Pallas and Pallas
[2017] FCCA 1663
•19 July 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PALLAS & PALLAS | [2017] FCCA 1663 |
| Catchwords: FAMILY LAW – Property settlement – cohabitation period nineteen years – lack of proper disclosure by the husband – difficulty in assessing the value of the asset pool. |
| Legislation: Family Law Act 1975 (as amended), ss.79 & 75(2) |
| Cases cited: Weir & Weir (1993) FLC 92-338 |
| Applicant: | MS PALLAS |
| Respondent: | MR PALLAS |
| File Number: | ADC 2213 of 2014 |
| Judgment of: | Judge Mead |
| Hearing date: | 18 August 2016 |
| Date of Last Submission: | 18 August 2016 |
| Delivered at: | Adelaide |
| Delivered on: | 19 July 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Richards |
| Solicitors for the Applicant: | Diane Myers |
| Counsel for the Respondent: | Self-represented |
| Solicitors for the Respondent: | Self-represented |
ORDERS
That in full and final settlement of any claim that either party may have or hereafter have against the other for settlement of property:
(a)That both parties forthwith do all such things and sign all such documents as shall be necessary to effect a payment to the trust account of the wife’s solicitors, Diane Myers Pty Ltd, on account of the wife the total proceeds inclusive of interest of the (omitted) Bank interest bearing account in the joint names of the parties to which account has been credited the sale proceeds of the former matrimonial home in the sum of TWO HUNDRED AND SIXTY NINE THOUSAND AND EIGHTY NINE DOLLARS ($269,089.00), and the sale proceeds of the property at Property A in the sum of SIXTY TWO THOUSAND AND ONE HUNDRED AND THIRTY SEVEN DOLLARS ($62,137.00);
(b)That the wife transfer to the husband all and any interest she may have by way of shareholding, credit or debit loan account, beneficiary entitlement or otherwise in:
(i)Pallas Family Trust;
(ii)(omitted) Pty Ltd;
(iii)(omitted) Trust;
(iv)(omitted) Business (SA) Unit Trust; and
(v)(omitted) Business (SA) Pty Ltd
(“the companies and trust”) and forthwith resign any position she may hold by way of director or secretary in any of the said companies and trusts.
(c)The husband hereafter indemnify the wife and keep her forever indemnified against any claim or liability, including any liability for payment of income tax as may arise from the past, present or future financial dealings of the companies and trusts;
(d)That the husband do all things necessary to cause (omitted) Business (SA) Pty Ltd to transfer the registered ownership of the Mazda (omitted) motor vehicle presently in the possession of the wife to the wife free of encumbrance;
(e)That the parties otherwise retain all other real and personal property, bank accounts, credits, shares and superannuation entitlements as are currently within their respective possession, power or control; and
That all extant applicants be otherwise dismissed.
Liberty to apply as to consequential orders.
IT IS NOTED that publication of this judgment under the pseudonym Pallas & Pallas is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 2213 of 2014
| MS PALLAS |
Applicant
And
| MR PALLAS |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr and Ms Pallas are unable to agree on a division of their property. There was no real dispute between the parties as to issues of contribution to the asset pool, or indeed how the asset pool save as to superannuation should be divided between the parties.
The wife sought that superannuation be included in the calculation of one asset pool and that the total pool should be divided as to 60% in favour of the wife and 40% in favour of the husband.
The husband in his response was agreeable to a division as to 60% to the wife and 40% to the husband but of the non-superannuation assets only, and sought with respect to superannuation that it be equalised.
The parties were unable to agree on the composition of the asset pool and the value of the pool. Both parties sought that the court make a finding in relation to those issues.
Background
At the time of trial the applicant wife was aged 48 years. The husband was aged 52 years. The parties were married on (omitted) 1995 and separated on 24 March 2014, a total cohabitation period of nearly nineteen years.
The parties had two children X born (omitted) 2000 aged 16 at the time of trial and Y born (omitted) 2003, aged not quite 13 at the time of trial.
The final children’s orders made by consent on 22 April 2015 provide for the children to live primarily with the mother and spend time with the father for approximately three nights each fortnight as well as half of school holiday periods and for shared times on special occasions.
At the time of trial the wife was working in the (employer omitted) earning approximately $508.00 gross per week. She also received Centrelink income by way of Newstart and Family Assistance totalling approximately $390.00 per week. She was not receiving any child support.
The only financial statement before the court for the husband was that filed by him on 20 August 2014. At that time he deposed to an occupation of managing director, being self-employed with (business omitted). He deposed to nil income from any sources and to personal expenditure of $10.00 per week for (omitted) Superannuation and $50.00 per week for Visa card payments. He did not depose to paying any child support.
The proceedings commenced by way of an application filed by the wife on 23 June 2014. The husband filed a response to that application on 20 August 2014. On 5 November 2014 the husband filed an amended response wherein he also sought orders pertaining to the parties two children.
Children’s matters were finalised by way of a consent order made in this court on 22 April 2015.
A conciliation conference had taken place on 12 November 2014, with both parties being represented by counsel. The Registrar noted on that occasion that the percentage division of the matrimonial pool was agreed but that the “pool requires further investigation”.
On 18 June 2015 the court ordered that the parties forthwith instruct an agreed licensed valuer to value properties at Property C, Property A and Property B. The matter was adjourned to 9 September 2015.
By that date matters of discovery were still in issue and the following order was made:
1. Within twenty eight (28) days of the date hereof, the parties complete the process of discovery of all documents within their respective power, possession or control as are relevant to matters in issue in these proceedings and as required to be disclosed pursuant to the rules.
2. Within twenty eight (28) days of the date hereof, each party provide to the other a written notice of:
a. The parties’ actual costs, both paid and owing, up to and including that date; and
b. The source of funds for the costs paid.
3. Within twenty eight (28) days after the completion of the discovery process in accordance with paragraph 1 hereof, the parties exchange offers of settlement pursuant to Rule 10.06 of the Family Law Rules.
4. Further consideration of the matter be adjourned to 23 September 2015 at 10.00 am before Judge Mead for the fixing of final hearing and trial directions.
On the adjourned date the court ordered that the time for the parties to comply with paragraph 1 of the previous order be extended to 4 November 2015. The matter was listed for trial on 18 August 2016, being almost twelve months later, and directions were adjourned to 18 February 2016.
At the joint request of the parties solicitors the hearing on 18 February 2016 was administratively adjourned to 15 March 2016. The request was made in circumstances where the parties solicitors jointly advised the court by correspondence dated 16 February 2016 that the parties wanted three to four weeks to consider 2014/15 tax returns before exchanging settlement offers.
On 15 March 2016 the court ordered that trial directions be adjourned to 9:00am on 17 May 2016 and noted that the parties were awaiting accounting advice as to the value of their interest in various enterprises to be able to commence realistic negotiations.
On 17 May 2016 the court ordered the matter be further adjourned to 14 June 2016 with counsel to attend if possible if the matter remained unresolved, in circumstances where the court had ordered a joint informal conference involving both parties and counsel instructed for trial during the period of the adjournment.
The court further ordered on that day that on or before 5:00pm on 19 May 2016 the applicant’s solicitor provide a letter to the respondent’s solicitor setting out the exact financial transactions in respect of which the applicant sought an explanation.
At the directions hearing on 14 June 2016 the matter remained unresolved, as confirmed by counsel for both parties who attended at that directions hearing. The usual orders for the filing of trial affidavits were made, with the applicant wife’s trial affidavit to be filed on or before 6 July 2016 and the respondent husband’s trial affidavit to be filed on or before 20 July 2016.
On 21 July 2016 the respondent’s solicitor filed a notice of withdrawal as lawyer. On that same day the applicant wife filed her trial affidavit and statement of financial circumstances.
On 25 July 2016 the husband filed a notice of address for service in his own name.
On 10 August 2016 George Mantzoros solicitor of Mantzoros & Partners filed a notice of address for service. The respondent had not filed any trial affidavit by that time.
By correspondence to the court from Mantzoros & Partners dated 16 August 2016, copied to the wife’s solicitors, Mr Mantzoros advised that it was his intention to apply to adjourn the trial on 18 August 2016 in circumstances where he was aware the applicant’s solicitors would not consent to an adjournment.
When the trial was called on 18 August 2016, Ms Smith of counsel attended for the respondent husband on instructions from Mantzoros & Partners. After hearing argument and for the reasons given on that day the court declined the respondent’s application to adjourn the trial. The respondent then elected to represent himself at the hearing.
The court permitted the respondent to rely on his affidavit filed in support of his response to the wife’s property settlement application filed 20 August 2014 and the statement of financial circumstances filed on the same day.
The trial proceeded with the applicant wife represented by Mr Richards of counsel. The court facilitated the wife’s counsel cross-examining the husband first rather than the usual order of cross-examination to assist the respondent in understanding the court process.
Ultimately the orders sought by the wife by way of final orders for settlement of property were as follows:
1. That the wife be paid the proceeds of the (omitted) Bank interest bearing account in the joint names of the parties to which account has been credited the sale proceeds of the former matrimonial home ($269,089) and the sale proceeds of the property at Property A ($62,137) together with any interest accrued thereon.
2. The husband do all things necessary to cause (omitted) Business to transfer the registered ownership of the Mazda (omitted) motor vehicle presently in the possession of the wife to the wife free of any incumbrancer.
3. The husband pay to the wife within 60 days of the making of these orders the sum of $116,368.
4. The wife will transfer to the husband any interest she may have by way of shareholding, credit or debit loan account, beneficiary entitlement or otherwise in:
a) Pallas Family Trust;
b) (omitted) Pty Ltd;
c) (omitted) Trust;
d) (omitted) Business (SA) Unit Trust; and
e) (omitted) Business (SA)Pty Ltd.
“the companies in trust” and will forthwith resign any positions she may hold by way of director or secretary in any of the companies.
5. The husband will hereafter indemnify the wife and keep her forever indemnified against any claim or liability, including any liability of payment of income taxes which may arise from the past present or future financial dealings of the companies and trusts.
6. The parties otherwise retain all real and personal property, bank account credits, shares and superannuation entitlements as are currently within their respective possession, power or control.
7. All applications be otherwise dismissed.
The position of both parties with respect to the final orders to be sought at trial was somewhat unclear at the commencement of the proceedings, and the court requested of both Mr Richards of counsel and the husband that prior to addresses they each specify to the court in writing the final orders they were seeking.
In addition, prior to submissions, Mr Richards of counsel for the applicant wife tendered to the court an amended list of assets and liabilities upon which the wife relied.
It was the wife’s case that the asset pool consisted of the following:
Sale proceeds of the former matrimonial home $269,089 (omitted) Bank Account – wife $994 (omitted) Bank Account – wife $8,037 (omitted) Bank Account – wife $10,711 (omitted) Bank Account – wife $3,252 (omitted) Bank Account – wife $162 (omitted) shares – wife $4,678 Motorbikes & trailer – husband (sold) $5,000 Partnership loan account – husband $333,268 (omitted) Business (SA) Pty Ltd – husband (50%) $176,726 SUB TOTAL $811,917 Superannuation Wife $48,407 Husband $12,723 SUB TOTAL $61,130 TOTAL $873,047
The husband did not depose to any evidence in his affidavit filed 20 August 2014 as to the asset pool. In his financial statement filed 20 August 2014 he deposed to total property of $1,096,960.00 comprising the following:
Former matrimonial home $1,200,000 (deposed to 50% share of $600,000) (omitted) Bank joint account $2,500 (omitted) Business (SA) Pty Ltd (in which he deposed to a 50% interest) $402,500 Interest in (omitted) Pty Ltd, and (omitted) Trust (husband deposed to 50% interest in those entities) $91,960 TOTAL $1,096,960
It appeared that what he intended to convey by that document was that his share in the value of (omitted) Business (SA) Pty Ltd was 50% and his share in the other entities was 50%. The document was unhelpful in all aspects.
The husband tendered to the court prior to submissions a handwritten document setting out the order he sought on a final basis, namely that he pay to the wife the sum of $209,000.00 in full and final settlement of the wife’s application for property settlement.
In final submissions the husband agreed with the list of assets according to the wife save and except as to the inclusion of a value of $333,268.00 for what was described by the wife’s counsel as the husband’s “partnership loan account”.
He submitted that the partnership had not been trading for years.
The order proposed by the husband, being a payment to the wife of $209,000.00 without any other further adjustments would suggest, in circumstances where he confirmed in submissions that his proposal was based on a division of net non-superannuation assets to the wife as to 60% and the husband as to 40%, to his calculations being based on a non-superannuation asset pool totalling $348,000.00.
The wife’s submission as to the value of the non-superannuation asset pool excluding the amount of $333,268.00 totalled $478,649.00. A 60% share of that amount is $287,189.00.
The wife already has in her possession non-superannuation assets to the value of $26,840.00, which would result in a payment to her by the husband of $260,349.00 to effect a 60/40 division as proposed by the husband.
I set these matters out in circumstances where it was very difficult indeed to either make findings as to the value of the asset pool or deduce the basis of the husband’s proposal.
Asset Pool
The parties married on (omitted) 1995. At that time the applicant wife was aged 27 years and the husband was aged 31 years. They did not cohabit prior to marriage. Both parties held modest assets, with the wife being employed full-time as a (occupation omitted) of (employer omitted) and the husband being engaged in the business of (omitted).
Prior to marriage the husband’s father gifted the husband and his sister a parcel of land at the rear of the family home. This was developed by the husband and his sister in that it was subdivided and a house was built on the property for rental. Subsequent to the parties marriage the property was sold, with the husband and his sister sharing equally in the net proceeds.
It was the husbands evidence contained in paragraph 2.2 of his affidavit filed 20 August 2014, that his share was somewhere between $65,000.00 and $75,000.00. The wife took no particular issue with that evidence.
The parties had purchased a property at Property F in 1994 before the marriage. The wife deposed towards making a financial contribution of approximately $20,000.00 towards the deposit. It was her evidence that the husband also contributed to the deposit and the balance was borrowed from (omitted) Bank. It was the husband’s evidence that the monies he received for his share of the sale proceeds of the property at the back of his parents’ home was used to reduce the mortgage on that property. Again this issue did not seem to be in dispute.
Either prior to or early in the marriage the parties went into business (business omitted) through a company known as (omitted) Pty Ltd. That company was the trustee of the Pallas Family Trust and the husband and the wife were the two directors of the company.
(omitted) Pty Ltd subsequently entered into a partnership with (omitted) Pty Ltd which was a company owned by the husband’s sister and her husband.
In 1997 the husband opened a further business with his brother in-law, Mr D, (business omitted). The name of that business was (omitted).
The wife ceased working outside of the family home in approximately December 1999.
In or about August of 2007 the husband and the wife’s brother in-law Mr D incorporated (omitted) Business (SA) Pty Ltd as trustee for (omitted) Business (SA) Unit Trust. The husband and Mr D were the directors and shareholders of that company and each held 50% of the units in the Unit Trust.
Essentially the business of (omitted) Business (SA) Pty Ltd was to (business omitted). At the time that business commenced the husband was earning income from the business he and Mr D operated under the name (omitted).
In 2009 the husband and Mr D incorporated a business known as (business omitted) in which they are equal shareholders and directors.
Subsequent to the incorporation of (omitted) Business (SA) Pty Ltd various properties were bought and sold at Property G, Property H, Property D, Property B and Property E.
It was the wife’s evidence that the husband excluded her from any input in relation to their various business undertakings and that he kept tight control on the family finances. It was the husband’s case that the wife was disinterested in the operation of the various businesses.
It was the wife’s case that the only understanding she had of the various entities was that gained by her post-separation, when her solicitor undertook real estate searches and gained information from various financial statements and taxation returns provided by her to her solicitor.
It was her case that the husband either personally or through his directorship of the various business entities, had bought and sold properties without reference to her and in particular, that upon sale, had dealt with net sale proceeds of various properties without reference to her.
It was her case that throughout the course of these proceedings the husband had been obstructive and failed to provide proper discovery such that neither she nor her legal representatives were able to gain an accurate understanding of the parties assets and liabilities so as to be able to put before the court an accurate assessment of the pool of assets.
It was her case that in the absence of the husband’s cooperation in that regard, the court should be able to find in her favour where there was any ambiguity or lack of information that could have been clarified satisfactorily if the husband had attended to discovery diligently and honestly[1].
[1] Weir & Weir (1993) FLC 92-338
The wife’s case also relied on the husband having made numerous large cash withdrawals from various personal and business bank accounts without any or proper record as to the purpose of the withdrawals, particularly in the period of several months prior to and post-separation.
The husband was cross-examined at trial by Mr Richards of counsel. It was put to him that he had, through his previous solicitor Ms Jordan, received a series of requests to provide documents to the wife’s solicitors. He agreed that he had received numerous requests, said that he had supplied all of the information required and that he was surprised that it had not been received. He agreed that he had not produced various cheque stubs as requested, but said that not only could he produce the cheque stubs but also various witnesses.
When asked the whereabouts of the documents that he said that he had discovered, he said that they were with his previous solicitor Ms Jordan. The husband agreed that he had recently provided, through Ms Jordan, the 2015 financial statements for (omitted) Business (SA) Pty Ltd and the partnership between (omitted) Pty Ltd and (omitted) Pty Ltd.
The husband agreed that (omitted) Business (SA) Pty Ltd was a partnership between he and Mr D and that they each held equal units in the associated Unit Trust. Exhibit “W1” was the (omitted) Business (SA) Pty Ltd Unit Trust balance sheet as at 30 June 2015.
The husband agreed that the business known as (omitted) Pty Ltd was controlled by him, that the business (omitted) Pty Ltd was controlled by Mr D and that the businesses were operated as an equal partnership between he and Mr D.
Exhibit “W2” was the balance sheet as at 30 June 2015 for (omitted) Pty Ltd and (omitted) Pty Ltd. When it was put to the husband that his recorded interest in the partnership was not equal with Mr D in that the balance sheet showed the interest of (omitted) Pty Ltd to be $333,268.42 and that of (omitted) Pty Ltd $512,677.34 he agreed with that and said that he thought it was because of a “loan”.
The husband was asked whether he operated a personal bank account and replied that he only operated a business account which was the (omitted) Pty Ltd account. He said he considered this account to be both a business and a personal account, which was operated as a cheque account. He agreed that he had cheque books for the account. When it was put to him the production of cheque stubs had been requested he said that he had produced all that were requested.
It was put to him that he had been, through his solicitor, asked very specifically to provide a description of the purpose of withdrawals made from a (omitted) Bank account in the parties joint names between 19 August 2013 and 13 February 2014 and that he had failed to do so.
He denied that proposition and replied that all of that information and those records were in his study at the former matrimonial home, which had been in the control of the wife post-separation. He said that when he went back to the home before settlement of the sale of same, all he was able to retrieve was the dogs ashes as he discovered that all of his records were gone. He said that he could not produce what he did not have, and that the wife could have had the same information as him as she had the same accountant and was also a signatory to the account.
It was put to the husband that he had the cheque stubs for that account, that they had been requested and that he had not produced them. He agreed that he had the cheque stubs but said that they had not been requested and that he had given everything that had been asked of him to his lawyer.
When he was asked what documents he had produced to account for withdrawals totalling $32,500.00 from the joint (omitted) Bank account in the three day period from 18 to 21 November 2013 he said that he was unable to answer that.
When he was invited during the hearing to produce anything further that he had by way of documentary evidence to explain the various significant cash withdrawals from the account over a period of months prior to separation he said that he did not have his file.
The husband was asked by Mr Richards whether the business known as (omitted) Pty Ltd operated a (omitted) Bank cheque account. He replied that he believed it did so. When asked whether he operated that account routinely he replied that he had not done so of late but he agreed that he had operated it between 9 October 2014 and December 2015.
He was asked what funds that account had received. He said he was unable to tell without the documents but that the source of income was from the business which was (business omitted).
He was asked whether he operated the bank account by way of drawing regular recurring cash amounts. He replied that he did so and that they were on account of contractors fees and various business invoices. When it was put to him that statements for that account would show regular invoice withdrawals he replied “absolutely”.
It was further put to the husband that there had been four requests for further and better particulars and discovery to him via his solicitors between 22 October 2014 and 27 June 2016 with no response. He said that he believed there had been a response and that some cheque stubs had been provided.
It was put to the husband that he knew that he had not provided any cheque stubs. He replied that he believed that he had to the extent that he was able but that they related to partnership accounts.
Mr Richards suggested to the husband that there was a pattern emerging in relation to various business and personal accounts, namely that whenever money was credited to an account it was drawn out shortly thereafter in large cash amounts. The husband replied “Is that the pattern?”.
The husband further said that he did not know if the numerous large cash amounts withdrawn from various accounts were for his benefit, that he could not say that and that he did not have the stubs. When it was put to the husband that he could have had the information available if he had produced the cheque stubs when he was asked he replied that he did not think that he was ever asked for that information.
The overall tenor of the respondent’s evidence suggested an attitude of deliberate evasion of his obligation to provide full and proper discovery in relation to financial records relevant to these proceedings and overall disdain towards the wife and the court process. I accept however that the husband was self-represented and had thought that the trial would be adjourned. Prior to that date however he had a period of nearly twelve months to properly prepare for trial.
By the time the matter came to trial the former matrimonial home had been sold and net proceeds of sale in the sum of $269,089.00 had been invested into a joint interest bearing account. That property had been owned jointly by the parties.
In or about 2010 the parties former house was demolished and the husband and the wife built a new house in its place. Neither party adduced any evidence as to the cost of the new house. The wife deposed to the parties owing $85,000.00 on the mortgage at the time the old house was demolished, with the husband deposing to the house being freehold by that time. There was no objective evidence to support either position. The parties and the children lived in rental accommodation at (omitted) while the new house was being built.
The wife deposed to borrowing $340,000.00 from (omitted) Bank to build the new home, and to refinancing that mortgage with the (omitted) Bank in 2013 and borrowing additional funds at that time, such that there were two separate (omitted) Bank loans totalling $650,000.00.
The husband deposed to the builder going bankrupt mid-way through the build and to the house accordingly becoming more expensive to build. He deposed to using funds received by way of distributions from (omitted) Business (SA) Pty Ltd to make builders progress payments.
Neither party adduced any evidence as to why, when the mortgage was refinanced with the (omitted) Bank, a further $310,000.00 was borrowed, such that the total (omitted) Bank debt was $650,000.00. In any event, the former matrimonial home at Property F was sold by the parties post-separation for $1,000,090.00.
It would appear that the debt owing to the (omitted) Bank in respect of the mortgages registered over that property, together with costs relating to the sale proceeds and the discharge of those mortgages totalled $700,911.00, in circumstances where the net proceeds of sale were $389,089.00.
Each of the parties received the sum of $60,000.00 by way of partial property settlement from the settlement proceeds, with the balance being invested in an interest bearing account.
As I have said, no evidence was adduced by either party as to the cost of the building of the new house or exactly how that cost was funded, particularly as to whether there was any necessity over and above funds obtained by way of mortgage from firstly (omitted) Bank and then the (omitted) Bank for the husband to pay builders progress payments from funds earned through (omitted) Business (SA) Pty Ltd.
In or about 2009 or 2010, according to paragraph 2.8 of the husband’s affidavit filed 20 August 2014, (omitted) Business (SA) Pty Ltd purchased a property at Property A. It was the husband’s evidence that the company had borrowed $280,000.00 towards the land cost of $365,000.00 at the time of purchase. Ultimately that property was not developed, according to the evidence of both parties. It was the husband’s evidence that the mortgage payments were made by (omitted) Business (SA) Pty Ltd.
After separation the wife placed a caveat over the title to that property to secure her equitable interest.
Upon the sale of that property in November 2015, the husband’s share of the net sale proceeds in the sum of $62,137.00 were placed into the same (omitted) Bank interest bearing account as the net proceeds of sale of the former matrimonial home. The total of those proceeds, together with interest accrued thereon remained in that account as at the date of trial.
The total capital sum invested in that account was $331,226.00.
It was common ground that (omitted) Business (SA) Pty Ltd was, as the husband said in paragraph 2.5 of his affidavit filed 20 August 2014, in the business of buying and selling property and developing same.
In addition to the Property A property, the company purchased the properties referred to in paragraph 52 hereof.
The property at 7 Property B was sold on 10 August 2012 for $248,000.00. The wife deposed to the net sale proceeds totalling $242,171.86 with the husband’s half share being $121,085.93. The property was sold on 10 August 2012, some nineteen months prior to separation.
The property at Property G was sold on 23 October 2012. The wife deposed to the husband’s share of the net proceeds of sale of that property being $44,568.59.
On 23 January 2013, the property at Property H was sold. The wife deposed to the husband’s half share of the net proceeds of sale being $34,808.39.
The wife deposed to not being aware of what happened to the husband’s share of the net proceeds of sale of all of those properties totalling, on her evidence, $200,461.00.
The husband was not specifically cross-examined in relation to those issues. All of those sales occurred well prior to separation.
Pursuant to the order of 18 June 2015 the properties at Property B and Property C, both owned by (business omitted) (SA) Pty Ltd, were valued. The husband’s interests in the Property B property, as a result of his percentage ownership of that property through its corporate structure being 25%, was valued at $102,500.00. His ownership of the Property C property through the corporate structure was a half share and that interest was valued at $35,000.00.
It was the wife’s position as put by her counsel at the commencement of the proceedings in the case outline document, that the asset pool should include the sum of $102,500.00 being the husband’s valued interest through (omitted) Pty Ltd in the Property B property owned by (omitted) Business (SA) Pty Ltd, together with a further sum of $35,000.00 being his 50% interest through (omitted) Pty Ltd in the Property C property.
The wife argued that the further sum of $29,024.00 should be added to the asset pool being the husband’s half share through the corporate structure of the sale proceeds of Property D.
It was common ground that the property at Property D was originally purchased by (omitted) Business (SA) Pty Ltd as a single block of land and then subdivided into three allotments.
The husband’s evidence contained in paragraph 2.7 of his affidavit filed 20 August 2014 was that the cost of the enterprise to (omitted) Business (SA) Pty Ltd was $580,000.00, with $630,275.00 achieved from the sales, leaving a net balance of $50,275.00.
It was the husband’s case that the net sale proceeds of the entire venture went to (omitted) Business (SA) Pty Ltd and then distributed after expenses equally between he and Mr D.
It was the wife’s evidence that on 13 November 2013 two of the allotments at Property D were sold for $330,000.00 and $278,000.00 respectively. The husband deposed to sales of $350,000.00 and $280,000.00 respectively.
It was the wife’s evidence that it appeared that the proceeds of sale of both of the allotments were paid into the (omitted) Home Loan account number (omitted).
The total net proceeds of sale of those two properties were, according to the wife, $297,622.00, with the husband’s half share totalling $148,811.00.
In the final submissions of the applicant wife’s counsel however he submitted that it was appropriate, particularly in the circumstances of the non-disclosure by the husband of financial records to enable an accurate calculation of the husband’s interest in (omitted) Business (SA) Pty Ltd, that the sum of $176,726.00 should be included in the list of the parties assets on account of the husband’s interests in (omitted) Business (SA) Pty Ltd arising from the interest of (omitted) Pty Ltd in that company, being an equal share with the company (omitted) Pty Ltd owned by the husband’s sister and brother in-law. Accordingly he proposed that the Property A sale proceeds and the valued interests in the Property C and Property B properties be removed as individual assets in the calculation.
Mr Richards calculated the amount of $176,726.00 as follows:
Proceeds of sale of the Property A properties (according to settlement statements) $124,273 Valuation of Property E $410,000 Valuation of Property C $70,000 TOTAL $604,273, Less Liability to (omitted) Bank $250,820 Net assets (omitted) Business (SA) Pty Ltd
(Husbands 50% share)$353,453
$176,726
Exhibit “W1” was the balance sheet for (omitted) Business (SA) Unit Trust as at 30 June 2015. By that date the third of the Property D properties had been sold for $270,000.00 with net proceeds of $58,048.04, the husband’s half share being $29,024.00. It was the wife’s evidence that the full net sale proceeds were paid into a (omitted) Bank account in the name of (omitted) Business (SA) Pty Ltd on 1 April 2014.
According to the balance sheet the property at Property A remained unsold, the liability of the Unit Trust to the (omitted) Bank was in the sum of $250,820.00 and to (omitted) Home Loans $281,480.06.
The Property A property was sold on 11 November 2015 for $418,000.00. The total net proceeds were $124,273.00. That would suggest that the sum of $293,727.00 was required to discharge liabilities. According to the June 2015 balance sheet of the Unit Trust the (omitted) Home Loan had a debit balance of $281,480.06.
Mr Richards has omitted that liability from his proposed calculation of the husband’s interest through (omitted) Pty Ltd in (omitted) Business (SA) Pty Ltd. I find that was appropriate in circumstances that it was in all likelihood discharged at the settlement of the sale of Property A.
I am unable to find that it is appropriate to include the sum of $176,726.00 as the husband’s interest in (omitted) Business (SA) Pty Ltd.
The Property A property sold in November 2015. The evidence suggests that thereafter the assets of (omitted) Business (SA) Pty Ltd were primarily the property at Property B in which the husband’s interest through (omitted) Pty Ltd is 25% and the property at Property C in which the husband, through (omitted) Pty Ltd, has a 50% interest. His interests in those properties have been valued at $102,500.00 and $35,000.00 respectively.
The balance sheet of (omitted) Business (SA) Unit Trust as at 30 June 2015 appear to be the only evidence as to the secured bank liabilities in relation to those two properties being an outstanding loan from the (omitted) Bank in the sum of $250,820.00. I find, as submitted by Mr Richards, that the husband would be liable for half of that account.
In those circumstances, I find that in the absence of any further documentary evidence which I find was available to the husband and not to the wife that it is appropriate to include in the list of assets for the purpose of calculating the asset pool the sum of $12,100.00 (rounded from $12,090.00) by way of the husband’s interest in (omitted) Business (SA) Pty Ltd.
It was the husband’s evidence that his share of the sale proceeds of the first two Property D properties, both sold prior to separation, was used towards paying for the redevelopment of the former matrimonial home.
Subsequent to separation and upon perusal of discovered documents the wife became aware that in the latter stages of 2013 and early 2014, being a period of approximately six months prior to separation, that the husband engaged in a practice of regularly withdrawing large cash amounts from the parties joint (omitted) Bank account.
It was put to the husband that in relation to that account, which the husband confirmed was a joint account, he had made the following withdrawals namely:
2 October 2013 – cheque $10,000 3 October 2013 – cheque $7,000 4 October 2013 – cheque $2,000 15 October 2013 – cheque $6,000
The husband confirmed those withdrawals, being a total of $25,000.00 between 2 October 2013 and 15 October 2013.
The husband was also cross-examined as to withdrawals from that account on each of 20, 21 and 30 October 2013 in the sum of $10,000.00 for each cheque on each such date. It was put to him that he was asked to provide documents in relation to the purpose of those payments and had produced nothing. This was again denied by the husband.
It was put to the husband that in a period of four days between 18 and 21 November 2013 inclusive he had withdrawn cheques in the sum of $5,000.00, $10,000.00, 5,000.00 and $12,500.00, being a total of $32,500.00, and that he had not provided any documentary evidence as to the use to which those funds had been put. He replied that he had produced whatever he had been asked for. When asked what documents he had produced in relation to those particular four withdrawals, he said that he was unable to answer.
It was put to the husband that on 17 December 2013 he had withdrawn a further cheque in the sum of $5,000.00 and two further cheques in the sum of $5,000.00 each withdrawn on 23 December 2013, and that he had been requested to provide an explanation in relation to those particular withdrawals. He replied that he believed he had. When asked to produce anything that he had in relation to those withdrawals he said that he did not have his file.
The husband was cross-examined about the (omitted) Bank cheque account operated for the business (omitted) Pty Ltd. He conceded that he operated that account at least between 9 October 2014 and December 2015.
When asked the use to which four withdrawals between 9 October 2014 and 11 October 2014 totalling $36,000.00 had been applied and whether he would say it was for business expenses, he said that he would say so. Again when he was challenged as to having failed to provide documents in relation to those withdrawals, he said he had done so and denied he had not produced any documents in relation to those withdrawals.
The husband agreed in cross-examination that post-separation he had sold a boat. When asked where the proceeds of sale had been placed he said that it was in the (business omitted) account. He agreed that was a (omitted) Bank Business cheque account.
The husband agreed that between 9 and 11 July 2014 he had deposited $35,000.00 into that account, being the sale proceeds of the boat, and that prior to that deposit the balance of the account had been $726.00. When it was put to him that after a few withdrawals of $50.00 and $100.00 at a time he had withdrawn $29,000.00 from that account in the period 16 July 2014 to 25 July 2014 by way of cash cheques in the sum of two lots of $7,000.00 on 16 July 2014, a further $7,000.00 cash withdrawal on 22 July 2014 and further withdrawals of cash of $5,000.00 and $3,000.00 respectively on each of 24 July 2014 and 25 July 2014, he said it “sounds right”.
When it was put to him that he had been asked to provide evidence of where those payments had gone and had not provided such information he said that was lie and he had provided all of the required information.
It was put to him that he had said in his affidavit filed on 20 August 2014 that he had paid some of the funds to his parents. He agreed and said that he had also paid money to his brother. This was referred to in paragraphs 2.71 to 2.74 of that affidavit. He agreed there were no documents to support the eventual destination of any payments made from those cheque and cash withdrawals.
He was asked what the deposits into the (omitted) Bank Business cheque account, being the (omitted) Pty Ltd account, in the sum of $7,000.00, $1,000.00 and $10,000.00 on 9 October 2014 and 6 and 24 October 2014 respectively were from. He replied that it was “maybe” income from (omitted) or (omitted business).
He was asked why on 27 May 2015 he had withdrawn $7,500.00 in cash, and replied that it was to pay a loan to his parents or to his in-laws.
The husband was asked whether in November 2015 he needed substantial cash, and replied that lately his whole life had needed substantial amounts of cash.
He was asked how much he had withdrawn from the (business omitted) account between 1 November 2015 and 9 November 2015 being a period of nine days. He replied that he had probably been Christmas shopping. When asked how much he needed for that purpose he said that in previous years he spent up to $15,000.00 and when asked on whom said his “ex-wife et cetera”.
The husband was asked to account for total cash withdrawals from that account of $35,000.00 between 2 November 2015 and 9 November 2015 respectively. He said that he and the wife had each received the sum of $60,000.00 when the former matrimonial home was sold. When asked what he had spent the money on he replied “life’s expenses my friend”.
These were not matters that were new to the husband. They were raised, albeit in more vague terms, by the wife in her affidavit filed on 23 June 2014 to which the husband had responded in his affidavit filed 20 August 2014.
He was the person who was in a position to provide documents relevant to the disposition by him of the net sale proceeds of the various properties sold by (omitted) Business (SA) Pty Ltd in the period between August 2012 and November 2013 and further, to provide documentary evidence as to the use to which the funds withdrawn from the (omitted) Bank (omitted) account, the (omitted) Bank cheque account and the (omitted) Bank Business cheque account were applied.
It may well have been that some of these funds were expended on on-going construction and landscaping of the new family home. The husband refers to these payments in paragraphs 2.26 and 2.27 of his affidavit filed 20 August 2014. That was of course the tenor of the husband’s cross-examination of the wife.
The cross-examination primarily consisted of the husband asking the wife if she remembered the cost of various expenses relating to the building of the new former matrimonial home on the original premises at Property F.
The tenor of the wife’s evidence was that she was in the main unable to remember the cost of the various expenses asked of her, including the cost of floor coverings, outdoor deck, artificial lawn, pool, paving and water feature around the home, 15 metre wall and concreting and stone staircase. The wife’s evidence was that she had not been told the costs of most of those items as the husband did not disclose financial issues to her.
Taking into account the husband’s attitude clearly expressed during his cross-examination, I accept the evidence of the wife that the husband did not share financial information with her either during the period of the marriage or post separation.
The husband deposed in paragraph 2.7 of his affidavit filed 20 August 2014 to a total of $216,000.00 worth of expenses for the building itself, landscaping, concreting and paving, swimming pool and new furniture and appliances. It was his evidence that the invoices for all of those expenses were in the filing cabinet at the former matrimonial home and that he was unable to access those because of an intervention order placed on him by the wife. He said that was in malicious circumstances.
I do not have any great difficulty in accepting the husband’s evidence that many of the cash withdrawals or cheque withdrawals related to building and associated costs. The time of the rebuilding and the cash withdrawals at least in part appeared to coincide. I accept however that the husband controlled the family finances. I do not accept the evidence contained in paragraph 2.54 of the respondent husband’s affidavit filed 20 August 2014 wherein he deposes to the wife having a good relationship with the parties accountant and always being able to ask questions of him.
I am satisfied, taking into account the dismissive demeanour of the husband during cross-examination and what I find to be his consistent failure over a significant period of time to provide complete and proper discovery to the wife’s solicitors concerning financial matters of significant importance to these proceedings, that it would have been obvious to the wife during the period of the marriage that the husband was disinclined to discuss financial matters with her.
I do not accept that the wife’s lack of knowledge about financial matters illustrated a disinterest on her part in the operation of the various businesses.
Having made that finding, I am satisfied that the husband financially provided for the family and that the wife made no complaint about that issue prior to separation in circumstances where the husband worked full-time and the wife ceased working outside of the home after the birth of X in (omitted) 2000 prior to resuming employment in September 2014.
The husband deposed to financial difficulties particularly in relation to work done for the (omitted business). He was not challenged in that regard in cross-examination and the wife’s evidence contained in paragraph 19 of her affidavit filed 23 June 2014 (to which the husband was responding in paragraphs 2.20 and 2.21 of his affidavit filed 20 August 2014) was that the business (omitted) Pty Ltd had “stopped making money in the last two or three years”.
I find that during the period of the marriage the parties conducted their financial affairs in what might be described as a “traditional” manner in that the husband worked on a full-time basis and was responsible for providing for the family’s financial needs and the wife directed her energies to providing the major parenting and homemaking duties, such that the parties contributions were different but equal.
It was the wife’s case that as a result of lack of proper disclosure and accounting by the husband she was unable to place a value on any of the Pallas Family Trust, (omitted) Pty Ltd, (omitted business) and (omitted) Pty Ltd partnership and (omitted) Business (SA) Pty Ltd Unit Trust. I have already made my finding with respect to (omitted) Business (SA) Pty Ltd.
In addition, it was argued on behalf of the wife that the withdrawal of extraordinary amounts of cash from various business and personal accounts by the husband both shortly prior to and post-separation without any satisfactory explanation as to the use of such funds should lead the court to draw a conclusion that the husband had the personal use of those funds and therefore should be included in the asset pool on the basis that same have been retained by the husband.
It was argued that this was particularly so in circumstances where the husband asserted in his statement of financial circumstances filed 20 August 2014 to an income below the tax threshold but was able to live a lifestyle including overseas holidays that was not commensurate with his declared income.
The wife’s counsel submitted that the sum of $353,453.00 should be included as an asset for the purposes of the calculation of the asset pool being what he described as the “partnership loan account” of the husband. Mr Richards referred to the balance sheet as at 30 June 2015 for (omitted) Pty Ltd and (omitted) Pty Ltd. The total partnership funds were stated in that document to be $845,945.76. That figure was comprised of partnership funds of (omitted) Pty Ltd in the sum of $512,677.34 and (omitted) Pty Ltd in the sum of $333,268.42. It was this sum that Mr Richards submitted should be included in the asset pool.
It was Mr Richards submission that if the husband did not concede the calculation, or the 60/40 division of the parties assets, then there should be at least a 10% adjustment to the wife on account of the husbands failure to disclose relevant financial material that would have assisted both the wife’s counsel and the court to properly make a finding as to the asset pool.
Tempting as it is to accept the submission of Mr Richards with respect to the inclusion of the sum of $333,268.00 on account of the husband’s interest in the partnership of (omitted) Pty Ltd and (omitted) Pty Ltd, I find that in the circumstances of the lack of any clarity in relation to the true state of the husband’s interest in the various companies and business entities referred to herein, such an approach may well lead to a result that is both unjust and inequitable, particularly in circumstances where there was no genuine complaint from the wife as to the husband’s financial conduct until the very latter stages of the marriage and upon the separation, and where she has previously said in evidence that the business that generated the parties major income being (omitted) Pty Ltd had not, as at mid-2014 according to her, made money in the previous two or three years.
It is without doubt that significant large sums of cash were withdrawn by the husband from various accounts in the latter stages of the marriage and post-separation. It is without doubt that in circumstances where the husband’s evidence was that for two years or so prior to separation he had not earned any money, he was living a lifestyle that was suggestive of greater access to funds than he would concede.
I do not find that it is appropriate to include the sum of $333,268.00 in the asset pool as proposed by Mr Richards. I find that it may well be an appropriate figure for accounting purposes but is not, on its face, backed by an asset available to the husband.
I do however find that the husband’s share of the net proceeds of the Property A property currently held in the (omitted) Bank joint interest bearing account in the sum of $62,137.00, as well as the husbands share of the net proceeds of the last Property D property in the sum of $29,024.00 should be included in the list of the parties assets in circumstances where both properties were sold significantly after separation with the husband being able to do as he saw fit with the Property D sale proceeds.
In July 2014 the husband sold a (omitted) boat owned by the parties. It was common ground that he received $35,000.00 for the boat and trailer, and that the funds were paid into the (omitted) Bank business cheque account.
The husband agreed that he had withdrawn $29,000.00 from that account in the period 15 July 2014 to 29 July 2014. He denied in cross-examination that he had failed to provide information sought from him as to what he had expended those withdrawals on in that period.
I do not consider it appropriate to include in the list of assets the significant sums withdrawn by the husband shortly prior to separation and post-separation from the (omitted) Bank (omitted) account and the (omitted) Bank cheque account operated for (omitted) Pty Ltd. I am not satisfied on the evidence that he retained those funds for his own benefit although I am not able to make a finding as to the purpose to which they were applied.
I consider however the sale proceeds of the (omitted) boat be in a different category in that the sale occurred post-separation and it was of an asset that was not related to the husband’s business enterprises and was acquired during the parties marriage.
I accept that the $6,000.00 withdrawn from that account in small sums may well have been reasonably attributable to the husband’s personal expenses, but I do not take that view in relation to the sum of $29,000.00 being withdrawn by way of cash cheques and cash over a period of nine days without any reference to the wife.
Taking all of those matters into account I find the asset pool for the purposes of these proceedings to be as follows:
Remaining sale proceeds of the former matrimonial home (“F.M.H”) $269,089 F.M.H sale proceeds retained by wife $60,000 F.M.H sale proceeds retained by husband $60,000 Sale proceeds of Property A property $62,137 Sale proceeds of third Property D property $29,024 Husband’s interest in (omitted) Business (SA) Pty Ltd $12,100 (omitted) Bank Account – wife $994 (omitted) Bank Account – wife $8,037 (omitted) Bank Account – wife $10,711 (omitted) Bank Account – wife $3,252 (omitted) Bank Account cheque account – wife $162 (omitted) shares – wife $4,678 Motorbikes & trailer – husband (sold) $5,000 Balance sale proceeds of (omitted) motor boat $29,000 TOTAL $554,184 Superannuation Wife $48,407 Husband $12,723 TOTAL $61,130
I find that the husband’s lack of disclosure in these proceedings and the associated difficulty in making findings with respect to the composition of the asset pool is a matter that needs to be addressed in my consideration of the factor specified in the Family Law Act 1975 (as amended) s.75(2)(o)
Contribution
I find that contribution during the marriage with respect to non-superannuation assets should be assessed equally as between the parties. I have previously referred to the traditional manner in which the parties conducted their financial affairs and the different but equal contributions made by each of them.
The wife had been working on a full-time basis from the time of the parties marriage in (omitted) 1995 to approximately December 1999. At the time of marriage she was already in the position of (occupation omitted) at a (employer omitted). It is not clear from the evidence when the husband’s superannuation entitlements were accumulated but I do not consider that the evidence would support a finding that either party had made any significant contribution to the superannuation entitlements of the other of them.
Post-separation I consider that the wife has made a greater contribution on account of her providing full-time physical care and financial responsibility for the parties two children, who were aged 14 years and 10 ½ years respectively at the date of separation. It was common ground that the husband had not paid child support post-separation, although he had paid the 2014 and half of the 2015 (omitted) School fees.
I find that it is more appropriate to deal with the question of adjustment on account of the wife’s greater post-separation contribution in my consideration of s.75(2) factors.
Section 75(2) Factors
At the time of trial the applicant wife was aged 48 years and the respondent husband 52 years.
It was not disputed that for many years the wife suffered and continued at the time of trial to suffer from systemic lupus. The husband’s evidence was that the condition has never impacted on the wife (paragraph 2.65 of his affidavit filed 20 August 2014). The medical report attached to the wife’s affidavit filed 20 July 2016 suggested that the disease had responded with improvement in symptoms but was liable to fluctuate in severity as a result of various factors including excessive stress. There was no evidence as to the husband suffering any ill health.
At the time of trial the wife was engaged in appropriate part-time employment taking into account her primary responsibility for the care of the parties teenage children.
The husband deposed in paragraph 2.71 of his affidavit filed 20 August 2014 that he had not had a wage or drawings for over two years and that post-separation he had borrowed money from his parents and his sister and brother in-law for living expenses, some of which had been repaid from the $35,000.00 the husband received from selling a (omitted) boat and trailer in July 2014.
He deposed to trying to generate work and income five days a week in (omitted) but to the business not generating sufficient income from which he could draw earnings. It was his evidence that the downturn in the (omitted) industry was caused by an alteration of renewable energy policies by the Federal Government.
The husband deposed to having spent the $5,000.00 received from the sale of his motor bikes and a trailer on legal fees and to him paying a further $11,500.00 to his previous solicitors on a Visa card “for today’s effort”. This was another area in which the husband completely failed to put before the court detailed evidence clearly available to him and within his knowledge as to his financial circumstances from the date of separation in March 2014 to the date of trial in August 2016, a period of some two years and five months.
The husband had a history of working hard throughout the marriage both at a physical level and also using his best endeavours through property investment to advance the family finances. I find that the husband at the time of trial was capable of appropriate gainful employment.
I find that the applicant’s income at the time of trial was modest and that the husband had a capacity to earn a modest income. I find that the parties property and financial resources remaining upon their separation were modest.
The applicant retained the primary care of the parties children upon the parties separation in March 2014 and continued in that role as at the date of trial.
Neither party deposed to their commitments necessary to maintain themselves and the children but there was no evidence to suggest that either was unable to do so, save that the husband of course paid no child support to the wife in respect of the commitments necessary to maintain the children.
The wife was in receipt of income from Centrelink reduced according to her income from wages. The husband was not in receipt of any Centrelink benefit.
During the period of the marriage I am satisfied that as a result of the contributions made by each of the parties, the family had a reasonable standard of living. At the time of trial the wife was paying rent in the sum of $450.00 per week to provide housing for the children and herself. The husband did not depose to any living costs. I find that it is important for both parties to be able to have a reasonable standard of living but note that the wife also has to provide the main accommodation for the children.
The relationship between the parties to these proceedings was in existence for a period in excess of twenty years, with a cohabitation period of just under nineteen years.
It was common ground that the wife ceased to work outside of the home shortly prior to the birth of the parties first child, such that upon separation she had been out of the workforce for over fourteen years. The wife had been employed in the (omitted) industry prior to the birth of the parties first child.
The wife deposed to having no option but to return to the workforce upon separation in circumstances where the husband was resistant towards contributing towards the children’s educational costs, save as to actual school fees. Both children attended (omitted) School during the marriage and continued to do so as at trial.
The wife deposed to having been able to obtain employment at (employer omitted) in September 2014 but to having her hours cut and to having no security in her employment. I am satisfied that the duration of the marriage and the wife’s role as the primary homemaker and parent by agreement with the husband negatively impacted on the wife’s earning capacity.
It was common ground that the husband had not paid child support since separation. The wife deposed in paragraph 121 of her trial affidavit that she understood the reason that the husband did not pay her any child support was due to an exemption for the intervention order. I do not understand the wife’s evidence in that regard.
The husband did pay the school fees for both children at (omitted) School in 2014 and one half of the school fees for the boys in 2015. This evidence is contained in paragraph 126 of the wife’s trial affidavit. The wife deposed to having paid most of her half share of the 2016 school fees as at the date of trial in August 2016.
I find that other than with respect to school fees, the husband has not paid any child support since separation, and I find although he has the capacity so to do he is unlikely to pay child support in the future, although he may contribute to school fees.
I find that the wife has had the major responsibility for the financial costs of the children post-separation in addition to their physical care, and that she will do so for the balance of their childhood years.
I find, taking into account the wife’s post-separation contribution with respect to the primary physical care of the children and her primary financial responsibility for them save and except in relation to a contribution by the husband towards school fees, in addition to my finding that the wife will have the primary financial responsibility and the primary responsibility for the children’s physical care for the balance of their childhood years, that there should be an adjustment to the wife of 10% above the position of equality found with respect to the parties contributions during the period of the marriage.
I further find, pursuant to s.75(2)(o) of the Family Law Act 1975 (as amended) that the failure by the husband to give proper discovery for almost the entirety of these proceedings up to and including the date of trial has resulted in a situation where the court has been unable to accurately make findings as to the husband’s interest in the partnership between (omitted) Pty Ltd and (omitted) Pty Ltd, the Pallas Family Trust and (omitted) Business (SA) Pty Ltd..
It has also been unable to make any accurate findings as to the disposition of over $100,000.00 withdrawn by the husband from the (omitted) Bank (omitted) account between 2 October 2013 and 17 December 2013 and the sum of $36,000.00 from the (omitted) Bank cheque account between 9 October 2014 and 11 October 2014.
In addition, the husband confirmed that between 2 November 2015 and 9 November 2015 he had withdrawn approximately $35,000.00 from the (business omitted) account. It was the husband’s evidence in relation to those withdrawals that they were accounted for from his share of the initial distribution of $60,000.00 to each party from the net proceeds of sale of the former matrimonial home.
These are large sums of money. I find that they could easily have been accounted for by the husband if he had produced the records and cheque stubs for which he had been asked during the entirety of the proceedings between the parties. He was not inclined at trial to make any genuine attempt whatsoever to account for the withdrawals.
In those circumstances, I find that the most appropriate manner in which to deal with the courts inability to make a proper finding as to the asset pool is to make a further adjustment to the wife in the sum of 20%.
This will result in an overall division of the net non-superannuation asset pool as determined by the court being divided between the parties as to 80% thereof to the wife and 20% thereof to the husband.
In addition, I find that each party should retain their respective superannuation entitlements.
I consider that such a division of the parties assets is just and equitable. It is unfortunate if the findings I have made in determining the likely extent of the net asset pool of the parties and the percentage adjustments in favour of each party should result in an outcome that is less favourable to the husband than it should be. I find however that such an outcome arises solely from the unsatisfactory nature of the husbands evidence. I adopt the approach of the Full Court in Weir & Weir (1993) FLC 92-338 at page 75,594 when Their Honours said:
“…we appreciate that this is something of a broad brush approach, but as we have said, where there is clear evidence of non-disclosure as there was here, the court should not be unduly cautious about making findings in favour of the other party…”
I have found that the total net value of the parties non-superannuation assets is $554,184.00. 80% of that amount is $443,347.20, with 20% being $110,836.80.
Each of the parties has already received the sum of $60,000.00 by way of an interim distribution from the settlement proceeds available from the sale of the former matrimonial home. If the wife was to retain the capital sum invested in the (omitted) Bank interest bearing account in the parties joint names together with the $60,000.00 that she has already received, as well as her various (omitted) Bank Account deposits, her (omitted) Bank Account balance, her (omitted) Bank Account balance, her (omitted) Bank Account cheque account balance and the proceeds of sale of the (omitted) shares, she would have or have had in her possession or control post-separation non-superannuation assets to a value of $419,060.00. This is $24,287.00 less than what I have calculated to be her entitlement.
I am mindful however that the balance of the assets being the sale proceeds of the third Property D property, the $60,000.00 already received by the husband by way of interim property settlement distribution, his interest that I have calculated in (omitted) Business (SA) Pty Ltd, the proceeds of sale of the motorbikes and trailer and the balance of the sale proceeds of the (omitted) boat, are assets that are not likely to be easily available to the wife.
An order sought by the wife about which little was mentioned at trial was an order requiring the husband to do all things necessary to transfer the registered ownership of a Mazda (omitted) motor vehicle presently in the wife’s possession to the wife free of any encumbrance. In paragraph 96 of the wife’s trial affidavit she deposed to all vehicles the parties utilised during the marriage being owned by the business, including a Mazda (omitted) “which I drive”. The wife deposed to obtaining a Redbook valuation for the vehicle in the sum of $14,450.00.
She deposed to the business previously having paid registration and insurance on the vehicle but to recently paying registration and to understanding she would be continuing to pay the insurance as the husband had advised her he would no longer be paying it. She deposed to paying for petrol, tyres and servicing.
The vehicle was not included in the wife’s calculation of the asset pool nor in the husband’s. In the husband’s affidavit filed on 20 August 2014 and in particular in paragraph 2.56 of that document the husband agreed the evidence contained in paragraph 51 of the wife’s original affidavit filed 23 June 2014 wherein she said “all the vehicles are owned by the business including a Mazda (omitted) which I drive. The business pays the registration and the insurance on the vehicle. I pay for the petrol.”
The husband deposed to paying for the cars registration and insurance and he further said “I further say that the fact that the car remains with Ms Pallas is evidence of my attempt at showing care and goodwill notwithstanding her having me charged with a criminal offence which did not occur”.
The husband was cross-examined briefly about the issue but in submissions Mr Richards argued that the husband had previously proposed that the wife retain the car out of the corporate entity and further, that if the husband did not concede that course, even in the absence of the value being included in the list of assets the court was justified in making such an order as it was within the range of the courts discretion.
During his submissions the husband was asked by the court his attitude to the wife retaining the car. He told the court that he did not agree to that course.
I find that such a course is appropriate. This in some ways goes to the wife retaining assets to a value closer to that determined by the court to be just and equitable. It was clear that by the time of trial the car had been in the possession of the wife for over two years.
I have found that it is just and equitable for each of the parties to retain their own superannuation entitlements without any adjustment. I note that the wife’s superannuation value exceeds that of the husband by a significant amount. The husband’s superannuation entitlements are very minimal indeed, and I do not consider it to be just and equitable to make an order splitting those entitlements in favour of the wife in an effort to “make up” the difference between what I have found the wife is entitled to and the amount that is realistically available to her.
There will be some modest amount of interest that will have accrued in the (omitted) Bank joint account currently holding the net proceeds of sale of the former matrimonial home and the Property A property. I consider it appropriate in the circumstances of this case that without properly defining the amount of that interest the wife retain whatever amount it is over and above the capital balance in that account.
I consider the orders I intend to make based on these reasons to be just and equitable to both parties in the circumstances of this case.
For those reasons I make the following orders.
I certify that the preceding two hundred and nine (209) paragraphs are a true copy of the reasons for judgment of Judge Mead
Date: 19 July 2017
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Fiduciary Duty
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Constructive Trust
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Res Judicata
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