Rigby and Kingston & Ors (No. 2)
[2020] FamCA 695
•18 August 2020
FAMILY COURT OF AUSTRALIA
| RIGBY & KINGSTON AND ORS (NO. 2) | [2020] FamCA 695 |
| FAMILY LAW – PROPERTY – Where these are protracted and complex property proceedings between a husband and wife following the breakdown of a marriage of 24 years – Where, in the interests of progressing the matter and in accordance with the Court’s case management principles, the matter was listed for a series of trial dates – Where the initial trial dates relate to the hearing of evidence and cross-examination of witnesses so as to determine particular factual issues settled by the parties – Where findings are made in respect of those factual issues. |
| Family Law Act 1975 (Cth) Family Law Amendment Act 2000 (Cth) Family Law Rules 2004 (Cth) r 11.01, r 16.04 |
| Rigby & Kingston [2017] FamCA 877 Rigby & Kingston (No. 2) [2020] FamCA 467 Stanford & Stanford (2012) 247 CLR 108 |
| APPLICANT: | Mr Rigby |
| RESPONDENT: | Ms Kingston |
| THIRD PARTY RESPONDENTS: | Mr F Kingston (2nd) Mr G Kingston (3rd) |
| FILE NUMBER: | BRC | 12882 | of | 2016 |
| DATE DELIVERED: | 18 August 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 1 – 4 June 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Dr Ingleby |
| SOLICITOR FOR THE APPLICANT: | HopgoodGanim Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Kirk QC |
| SOLICITOR FOR THE FIRST RESPONDENT: | Hartley Healy |
| COUNSEL FOR THE THIRD PARTY RESPONDENTS: | Appearance excused (Ms Minnery appeared for part of the 3rd day) |
| SOLICITOR FOR THE THIRD PARTY RESPONDENTS: | Hede Byrne & Hall |
ORDER
The matter be listed for a case management hearing on 9 September 2020 at 9.30am.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Rigby & Kingston has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 12882 of 2016
| Mr Rigby |
Applicant
And
| Ms Kingston |
Respondent
And
Mr F Kingston & Ors
Third Party Respondents
REASONS FOR JUDGMENT
On 13 December 2019, with the consent of the parties, this matter was listed for a series of trial dates pursuant to r 16.04(c) of the Family Law Rules 2004 (Cth) (“the Rules”) and, pursuant to r 11.01, the initial dates for trial were listed for the hearing of evidence and cross-examination of witnesses in relation to particular factual issues settled by the parties.
The initial trial dates did not involve the third party respondents, although their legal representatives formally appeared for part of the hearing. The husband’s case against the third party respondents (a number of whom were disjoined by an order made on 26 May 2020) is yet to be particularised by the husband. The early allocation of the first series of trial dates enabled the trial to start and will hopefully assist the parties to narrow the issues in dispute, if not resolve it.
In December 2019, when this matter was set down for these initial trial dates, there was some reticence expressed by both parties about findings being made after the initial trial dates and the consequent prospect of an application for disqualification. However, the wife now supports the making of findings without demur and the husband does not oppose findings being made, submitting only that care should be taken to properly consider the possible consequences of findings being made on the identified issues before the end of the trial. The wife submitted that any application for disqualification, if made, should be dismissed because both parties embraced the case management proposals initiated by the Court and contributed to the identification of the issues for trial. Neither party suggested that there was an absence of power to make findings at the conclusion of the first series of trial dates.
I consider that the broad case management powers provided for in the Rules enable me to make findings in relation to the factual issues dealt with by me at these initial series of trial dates. In particular, r 11.01 empowers the Court to “order that part of a case be dealt with separately” and to “decide the sequence in which issues are to be tried”. In adopting this approach, I also have regard to the Court’s duty to ensure that cases are not protracted (s 97(3) of the Family Law Act 1975 (Cth) (“the Act”)). In this context, I note that the husband’s Initiating Application was filed in December 2016 and I have heard numerous interim applications involving the many parties involved. As already noted the husband is yet to particularise his case against a number of third parties. The allocation of the first series of trial dates at least enables the matter to progress.
The circumstances of this case are unique. In short, after a 24 year marriage that produced two children, the wife remains a very wealthy woman, due in large part to family wealth created by her father, and the husband has virtually nothing.
I have found previously that the husband and wife have each established a prima facie case for the relief sought against the other. Namely, the husband seeks a property settlement and the wife argues that it is not just and equitable to make any order i.e. the “Stanford point”.[1] The wife’s previous application for bifurcation of the trial to determine the Stanford point first was unsuccessful.[2] The involvement of the third party respondents arises because the husband argues the wife has insufficient property in her own name to satisfy his claim.
[1] (2012) 247 CLR 108 (“Stanford”).
[2] Rigby & Kingston [2017] FamCA 877.
Background
The husband and wife married in 1991 and separated on 26 October 2015. The husband contends that prior to marriage, the parties lived in a de facto relationship from in or about 1986. The wife disputes the existence of a de facto relationship.
The husband was born in 1965 and the wife was born in 1965.
There are two adult children born to the marriage, namely, Mr BR born in 1994, and Mr CF born in 2001.
The wife completed a science degree prior to the marriage but has not worked in this profession since joining the Kingston Group[3] in 1990.
[3] This is the shorthand reference to the group of entities that make up the wife’s family’s businesses.
The husband is a finance professional who currently conducts a business consultancy from which he earns about $93,600 per annum.
Prior to their marriage, the wife’s father was concerned to ensure that the husband did not benefit from the wealth that he had created during his lifetime and, in those circumstances, insisted that the husband sign a prenuptial agreement.
Throughout their long marriage, the husband and wife did not acquire any property in joint names. They had separate bank accounts and separate credit cards and maintained detailed ledgers of their respective expenditure on joint expenses, which they reconciled at regular intervals and made any necessary adjustments.
The husband contends that he should receive a property settlement of 35% of not only the property in the wife’s sole name or control (valued at about $7,300,000) but also her interest in the Kingston Group. There is a dispute about the nature of any interest the wife has in the Kingston Group. Previous estimates of the value of the Kingston Group by the wife were in the vicinity of $150,000,000.[4]
[4] The net assets of Kingston Group according to the statement of financial position as at 30 June 2016 were valued at $110,863,770.
The wife resists any property settlement in the husband’s favour contending that it would not be just and equitable to make any order.
Issues
The factual issues for consideration in this part of the trial were settled by the parties in the following terms:
(1) Did the parties conduct their financial arrangements during the marriage in accordance with the pre-nuptial agreement of 1991 and/or the financial agreement between them that they keep their finances totally separate, with all expenses being referred to in (1) shared equally?
(2) If the parties did conduct their financial arrangements in accordance with the agreement was the husband overborne by the wife to do so?
(3) Did the husband make substantial contributions of any nature recognised by the Family Law Act 1975 (Cth) to the improvement and conservation of property in the wife’s sole name over the years for which he was not recompensed?
(4) Was the husband underpaid for the work he did when employed as a contractor for the Kingston Group?
(5) Were the distributions made to the husband as a discretionary beneficiary of the CC Trust made in order to minimise tax for the wife or the family constituted by the husband, the wife and their children or were the distributions made as a tax effective means of the husband repaying loans the wife had made to him?
(a) Were the “loans” described in (5) in truth made and did the husband agree to borrow?
(6) Did the husband commence part time employment and then later his own consultancy which afforded him the opportunity to work less than full time hours in 2007 in order to enable him to meet the needs of the children?
(7) Did the contributions of the husband as homemaker and parent exceed those of the wife as homemaker and parent and were there periods he fulfilled a role of primary homemaker and/or parent and thereby indirectly contributed to the financial contributions being made by the wife?
(8) What were the contributions by the wife to the Kingston Group and how was she recompensed for her employment?
(9) What were the financial contributions of the husband during the relationship?
(10) What were the financial contributions of the wife during the relationship?
Did the parties conduct their financial arrangements during the marriage in accordance with the pre-nuptial agreement of 1991 and/or the financial agreement between them that they keep their finances totally separate, with all expenses being referred to in (1) shared equally?
The pre-nuptial agreement
On the day prior to their marriage, the husband and wife entered into a pre-nuptial agreement (“the pre-nup”) dated 11 October 1991. It is common ground that the pre-nup came about at the instigation of the wife’s father. The lawyers for the Kingston Group drafted the pre-nup and at least by September 1991 the husband was provided with a draft.
There is no suggestion that the pre-nup ousts the jurisdiction of the Court to make a property settlement order pursuant to s 79 of the Act because it predates the amendments to the Act which made provision for the binding nature of such agreements.[5] Its relevance relates, at least in part, to the broader enquiry and not one the subject of determination at this time, namely, whether it is just and equitable to make any order. In terms of the factual enquiry posed by the first issue formulated by the husband and wife for this hearing, the pre-nup’s relevance relates to whether or not the husband and wife conducted their financial arrangements in accordance with it.
[5]Family Law Amendment Act 2000 (Cth).
The husband did not receive legal advice prior to signing the agreement. He was at the time a finance professional but there is no suggestion he had any particular knowledge about pre-nups. He says that he agreed to enter into the pre-nup because he wanted to marry the wife and the wife’s father made it clear that signing the agreement was a pre-requisite to marriage.
The purpose of the pre-nup was expressed in the following terms:
… in the hope of leading to marital tranquillity in their life together and to avoid or reduce any disputes between them in the future about the ownership, use and descent of property and to avoid unpleasantness and dispute should, despite their best intentions, the marriage in any circumstances not work out, they wish to set down in writing before their marriage what they are agreeing to as to how certain aspects of their financial relationship with each other following the marriage should be regulated.
The husband certainly had some input into the agreement as his handwritten notes at the time attest. One such handwritten note querying the draft pre-nup is as follows:
2(b) p 3 what does it mean? ½ ½ after marriage
part about Legal advice page 2
Is this to stop any future claim “I didn’t know what I was signing?” In contract law your (sic) bound by what you sign – is it different in family law?
The agreement doesn’t consider future assets of each individual which are obtained from other than current or inherited sources
The wife responded with her own handwritten notes which state:
1. Current individual assets to remain ours
2. (a) Inheritances own.
(b) Is saying → that when it comes to dissecting joint assets (50:50 or whatever) then the inheritance of either party whether big or small has no bearing on this division.
3. If [current assets] or inheritance used to contribute to joint assets, then on separation, then value of this contribution shall be repaid at the initial value prior to any further division.
4. Above but towards support or benefit.
[underlining in original]
In addition, the wife drafted a further clause to address the husband’s concern that the agreement made no provision for future acquired assets in the following terms:
(Assets not inherited and not current assets)
6. Wholly owned assets accumulated in the future
belongwill be the property of that person. Jointly accumulated assets shall be divided by percentage contribution of each individual[strike out in original]
The final version of the pre-nup included the following operative provisions:
1. The parties agree that their current individual assets shall remain their own separate property following their marriage and neither shall have any claim for any share or part of the other’s current individual assets at any future time.
2. In the event that either party shall receive any inheritance/s during the marriage:-
(a) Such inheritance/s shall remain his or her own separate property and the other shall have no claim for any share or part thereof at any future time;
(b) Neither party shall be entitled to any greater share of assets they accumulate directly or indirectly by their joint efforts during the marriage on the basis that the other party’s needs are less because of his or her receipt of any inheritance/s.
3. In the event that either party contributes the whole or part of his or her current individual assets and/or future inheritance/s towards the acquisition of any asset/s in the name of the other party or towards the acquisition of any asset/s in the joint names of the parties then, in the event of a separation and division of property, such party shall receive repayment of the initial value of such contribution/s prior to any further division of property.
4. In the event that either party contributes the whole or part of his or her current individual assets and/or future inheritance/s towards the support or in any other way the benefit of the other party then, in the event of a separation and division of property, such party shall receive repayment of the initial value of such contribution/s prior to any further division of property.
…
6. ASSETS NOT INHERITED AND NOT CURRENT ASSETS
Wholly-owned assets accumulated in the future belong the property of that person. Jointly accumulated assets shall be divided by percentage contribution of each individual.
The assets and liabilities of each party at the time of the pre-nup comprised:
Husband’s assets – motor vehicle 1, various items of household furniture and equipment associated with the business of FF Retail, personal bank accounts
Husband’s liabilities – associated with the business of FF Retail
Wife’s assets – personal bank accounts, superannuation benefits, trust distributions, short-term investment policy with CP Company, GG Bank shares, equipment and books, motor vehicle 2 station wagon, assorted jewellery including .48 carat diamond and 18 carat gold ring, house (except Mr Rigby’s proportion of contribution) and land at RR Street
Wife’s liabilities – home loan on RR Street – $55,000
The wife conceded during cross-examination that the meaning of paragraphs 3, 4, and 6 of the pre-nup was uncertain. For example, the provision about how any initial contribution was to be dealt with in the event the marriage broke down might mean that she would receive her contribution as at 1991 values before the balance was divided between she and the husband, or it might mean that she would receive the percentage her initial contribution represented as at 1991 at today’s values before the balance was divided.
The pre-nup purports to protect from claim the husband’s and wife’s individual assets and respective future inheritances and to make provision for how assets will be divided in the event the marriage breaks down. The pre-nup does not make provision for the husband and wife to keep their finances totally separate during the marriage. To the contrary, the pre-nup envisages the acquisition of jointly accumulated assets. The pre-nup makes no provision about how expenses are to be shared.
The verbal financial agreement and how the parties acted upon it
Prior to marriage, the parties lived in the same accommodation and shared expenses equally with not only each other but also with other members of the household. The husband conceded during cross-examination that after his engagement to the wife, he agreed with the wife that after their marriage they would continue the “separation of our finances.”
The husband also conceded that he and the wife never held any joint bank accounts; never had joint ownership of any real property; never had joint ownership of any shares in public or private companies and never had joint credit cards. He conceded that he never paid rent in any property in which he was accommodated during the marriage nor paid any part of any mortgage taken out by the wife. He conceded that he never paid any rates, maintenance or repairs. He conceded that equal sharing of expenses (including expenses relating to the children) continued from the time of their marriage in 1991 until around 2007 but that ‘shared expenses’ did not include expenses such as mortgage repayments, which were paid by the wife.
It is common ground that prior to marriage the wife was supported by her father to whom she had to account for every cent spent. The husband observed that this made the wife anxious and it is common ground that in order to provide the wife with some additional funds prior to marriage the husband paid the wife for ironing his shirts. This is the background to the practice adopted by the husband and wife after their marriage of keeping records of their joint expenses and reconciling and adjusting their expenditure so that it remained equal (at least until 2007). The husband also says that he was aware that the wife “felt the need to control the family finances in this way and that this gave her comfort”.
Loans from the wife to the husband and the change to equal sharing of joint expenses
Starting in about late 1998 when the husband was short of funds, a “loan schedule” was prepared by the husband for funds advanced to him by the wife and interest was charged on outstanding sums at the rate being paid by the wife on her mortgage. For example, on 14 December 1998 the husband’s handwritten schedule notes that the rate of interest is nine percent.
From about 2007, the financial arrangements between the husband and wife changed, coinciding with the husband’s limited ability to contribute income from employment to the shared expenses. The husband lost his part time job with HH Company in 2007 and established his own consultancy business. The husband incurred expenses, including for the children, on a credit card in his sole name. The husband kept a running tally of the sums he owed the wife and the wife would provide the husband with the funds to pay off his credit card. The husband says that the wife paid the entire credit card balance each month. The wife says she thought she paid only that part of the credit card balance that related to joint expenses. The running tally of sums the husband calculated he owed the wife were recorded as a debit against the husband’s beneficiary loan account in the Kingston Family Trust (“the wife’s trust”). At the end of each financial year, the wife would arrange with her accountant to make a distribution to the husband via the wife’s trust and, from the after tax amount received by the husband, his beneficiary loan account would be reduced in whole or part. As the husband’s taxable income was significantly lower than the wife’s, the after-tax amount the husband had available in his hands was significantly larger than it would have been had the wife made distributions to herself because she would have been paying income tax at the top marginal tax rate. This practice involved an intermingling of their financial arrangements. It also reflected a change in the proportion of joint expenses shared, as the wife was meeting a greater than equal proportion.
Conclusion – issue 1
The answer to the first issue posed by the parties does not lend itself to a ‘yes’ or ‘no’ response because there are separate parts to the question which require individual findings. My findings on this first issue can be summarised as follows:
a)the pre-nup did not provide for the parties to keep their finances totally separate. To the contrary, it envisaged the possibility of the acquisition of joint assets;
b)the pre-nup made no provision for how living expenses were to be paid;
c)prior to marriage the husband and wife kept their finances totally separate;
d)the verbal agreement entered into between the husband and wife prior to marriage and acted upon until about 2007 was to continue to keep their finances separate and to continue to share joint expenses equally after marriage;
e)joint expenses after the marriage did not include accommodation expenses for which the wife was solely responsible;
f)the agreement changed in or about 2007 such that thereafter, the wife paid a greater proportion of the joint expenses; and
g)the financial arrangements entered into between the husband and wife from 2007, which involved expenses being debited against the husband’s beneficiary loan account in the wife’s trust and the distribution to the husband from the wife’s trust to reduce his loan account, involved intermingling of their finances.
If the parties did conduct their financial arrangements in accordance with the agreement was the husband overborne by the wife to do so?
During cross-examination, the husband conceded that after the parties became engaged to be married, he and the wife discussed the continued separation of their finances and an agreement was reached to do so. The husband conceded that his participation in the arrangement was voluntary.
The husband and wife each wrote in the ledgers and undertook calculations to reconcile and account for their expenditure on joint expenses. The detail contained in the ledgers and the accounting and reconciling for each expense is extraordinary. The husband maintained a loan schedule in relation to money borrowed by him from the wife and calculated the interest thereon.
After 2007, the husband and wife operated under an arrangement which involved the wife making a greater than equal financial contribution to the joint expenses. The practice of maintaining ledgers and recording loans from the wife to the husband continued. The husband incurred expenses for the family on his credit card and the wife provided funds for the payment of credit card debt. The husband’s beneficiary loan account in the wife’s trust was debited in accordance with the husband’s running tally of monies he owed to the wife and when distributions were made to the husband, his beneficiary loan account was thereby reduced.
To the extent that the husband claimed in his affidavit to having been “berated, chastised and admonished” by the wife, the husband resiled from the use of such descriptors during cross-examination as being “too strong”, but nevertheless maintained that he had felt overborne and inferior during the marriage. The only example provided by the husband in his trial affidavit to support his evidence that he felt “overborne and inferior” in relation to “the controlling nature of the financial arrangements set up by [the wife]” was that the “mere process of being required to account for my expenditure, being told to only purchase grocery items on sale in circumstances where [the wife’s] financial matters were never shared with me and where I never sought to comment or require [the wife] to spend funds in any particular way, made me feel inferior and controlled”. The husband expanded upon this evidence during his oral evidence referring to occasions when he had to produce the shopping receipts to the wife and would be reprimanded for not buying salt and vinegar chips on special. He described the wife as “quite confronting and pedantic about buying things on special”. A second example was that upon arriving home with a new hooded top he was asked by the wife how much it had cost her.
Conclusion – issue 2
For the reasons discussed, I reject the husband’s contention that the financial arrangements were set up by the wife alone. I do not regard the husband’s evidence as described above as negating the admitted voluntary agreement reached prior to marriage to keep their finances separate and share joint expenses. After marriage, both parties engaged in the practice of keeping ledgers and reconciling expenditure. The husband was not overborne. I reject the husband’s contention that the wife bore responsibility for his feeling inferior. To the extent that he may have felt inferior there are other explanations, namely, the husband’s limited employment history after 1999 and reliance upon the wife as his only client when he established his consultancy in 2007. The examples of the wife’s behaviour given by the husband are in my view trivial and materially unrelated to the way they conducted their broader financial arrangements.
Did the husband make substantial contributions of any nature recognised by the Family Law Act 1975 (Cth) to the improvement and conservation of property in the wife’s sole name over the years for which he was not recompensed?
As already noted, all real property was purchased in the wife’s sole name or by an entity controlled by her. The first property owned by the wife was at Suburb LL in VV City and she owned this property prior to marriage subject to a mortgage. There is no evidence of what contribution was made to this property by the husband, although I note that the pre-nup refers to contributions made to the house by the husband. The parties lived in this property until 1992 when they moved to the hospitality business where they were live-in managers. The Suburb LL property was sold in 2000 for $115,000.
In 1993, the wife purchased in her sole name a property at QQ Street, Suburb UU for $170,000 with the assistance of finance obtained solely in the wife’s name, the repayments for which were made by the wife. The husband concedes that the property was renovated and improved at the instigation of the wife without any input from him. This property sold in 1998 for $210,000 with the balance mortgage of $158,660 paid out at that time.
In 1998, the wife purchased a property at PP Street, NN Town in her sole name for $152,000. The balance sale proceeds from the Suburb UU property were utilised in the purchase and the wife obtained a loan in her sole name for $100,000. The husband concedes that the wife undertook renovations and improvements to this property without any involvement from him, save that he paid for half of the construction of a deck and some landscaping. The cost of the deck ($3,000 on 5 January 2000) and landscaping ($3,940 on 16 February 2000) were treated by the husband and wife as joint expenditure and accounted for in the loan ledger maintained by the husband. This property was sold in 2002 for $257,500.
In 2002, a property at TT Street, Suburb SS was purchased in the wife’s sole name for $199,000 utilising the balance proceeds of sale from the NN Town property and borrowings in the wife’s sole name. The husband concedes that the wife undertook renovations and improvements to this property without any involvement from him. This property was sold in 2011 for $550,000.
Between 2004 and 2014, the wife acquired a number of properties in furtherance of her passionate interest in animals and conservation. The husband came to share the wife’s passion.
In December 2004, the wife purchased in her sole name a rural property known as ‘BJ’ at WW Town. This property carried a number of livestock and was used by the husband and wife and their children as a weekender and for school holidays.
The husband says that he had an approximate 10 year involvement with ‘BJ’ during which he spent 3 to 4 hours each Friday at the property attending to maintenance, animal husbandry and other matters. ‘BJ’ was about an hour’s drive from where the parties lived. The husband says that he was originally paid nothing for his work but, at an unspecified time (likely to be mid-2007), he was paid initially $1,600 per quarter by the wife which increased to $3,300 per quarter after other rural properties were acquired by the wife. The husband says that he attended to any repairs or maintenance required at the two story, three bedroom cottage on the property including organising timely pest control and arranging for a quote and replacement of the hot water system. He also says that he looked after up to 50 head of livestock and monitored both the livestock and the cottage on what was either a weekly or at least fortnightly basis on a Friday or sometimes a Sunday for approximately 11 years. The specific tasks undertaken by the husband are stated by him to be as follows:
a)meeting and conversation with neighbours such as Mr XX and Mr YY on weather conditions and operation matters and concerns;
b)lick blocks for livestock;
c)gravel for creek crossings;
d)acquisition and construction of portable livestock yards;
e)negotiation and sale of stock;
f)checking of fences;
g)pregnancy testing of cows (a farm vet would assist);
h)livestock vaccinations;
i)ear tagging;
j)supply of lucerne to livestock;
k)installation of rainwater tank;
l)running pump engine to fill yard water tank for livestock;
m)quotes for installation of windmill and bore;
n)construction of fencing;
o)quotes for solar pump installation;
p)installation of bore by Mr YZ;
q)supply of forage sorghum bales for livestock;
r)organising replacement of windscreen (hail) on work vehicle by ZZ Company;
s)collecting NLIS ear tags;
t)obtaining comparative livestock prices from potential buyers;
u)advertising sale of a bull; and
v)completing fencing repairs.
The husband also says that he attended to conservation of relevant aspects of the property including:
a)LM weed control and tree planting;
b)contacting and considerations with Telstra and QR Town Council in respect of impacting soil erosion and weedicide of introduced rat tail grass;
c)organising weedicide (Round Up) from NP Shire Council for the eradication of Privit trees from “BJ”;
d)construction of fencing and segregating parts of LM with closure of gates in respect of livestock access; and
e)completion and submission of Environmental Grants and watering of trees planted by X Pty Ltd.
By reference to her personal diaries, the wife says that during the period mid-2005 to mid-2007 her records reveal that the husband went to BJ on his own on about five occasions and that on other occasions she and the children would accompany him either for the weekend or school holidays. The wife says that she reimbursed the husband for his fuel and other expenses associated with his attending the property and conducting repairs/maintenance e.g. a handwritten note from 2004/05 records the husband being reimbursed by cheque for a range of tools and equipment totalling $285.87.
It is common ground that in 2007 the husband put a business proposal to the wife, to which she agreed. The proposal was that the husband would provide consultancy services to the wife’s trust through his consultancy business for which he would be paid. Thereafter, the husband rendered invoices for the work undertaken on BJ and the other rural properties (when purchased), and was paid in accordance with his invoices. The husband says - “I structured arrangements in a commercial sense (with commercial documents) to ensure that [the wife] was able to obtain a tax deduction for the work I did”. By way of example, an invoice dated 13 August 2007 submitted by the husband to the wife and paid by her set out the following:
From 7 July 2007 to 12 August 2007
·Travelling to and attending to delivery of Molafox feed to the Property of “BJ” (WW Town) from ST Store (BL Town) on 7 July, 16 July, 23 July and 27 July, 2007.
·Checking and reporting on condition and wellbeing of 26 livestock situated at “BJ” (WW Town).
·Checking and reporting on “Cottage” residence situated at “BJ” (WW Town).
·Checking and reporting on boundary fences at “BJ” (WW Town).
TOTAL: $800.00
In relation to the work undertaken by the husband on BJ, he relies upon evidence from a Mr XX who says he owned the neighbouring property and observed the husband to attend BJ at least twice a month to check the livestock. He says that there were 20 “breeders” at BJ at any one time and that at least 4 to 6 times a year he would assist the husband to process the livestock. He says that such assistance involved putting the livestock into head bales, ear tagging, vaccinations and other animal husbandry matters. He says that the husband would maintain the National Livestock Identification records for the livestock in a book when they were ear tagged. He also says that the husband organised and set up the livestock yards initially.
Commencing in 2007, the wife acquired a further five rural properties known as the conservation properties - four are located near BG Town in Queensland and the property known as ‘JK’ is located in New South Wales. The properties were all registered in the name of an entity controlled by the wife, although the husband says that the wife regularly referred to the properties as “our” properties. The names of the properties and year of acquisition are set out below:
a)‘AB’ – 2007;
b)‘BC’ - 2012;
c)‘DF’ - 2013;
d)‘GH’ - 2014 (collectively, the “BG Town properties”); and
e)‘‘JK’ - 2013.
The husband says that he made regular visits to the BG Town properties and gives by way of example the following evidence – six visits in 2012/2013; 11 visits in 2013/2014 and eight visits in 2014/2015. The husband says that the trips took about four hours to drive each way and that he would make the trips either by himself or with the whole family or sometimes just with the wife. By way of example of the visits to the JK property, the husband says there were three visits in 2013/2014 and one visit in 2014/2015, none of which were made by him alone.
The husband’s contribution to the improvement and conservation of these conservation properties took a number of forms which the husband describes firstly in general terms as including the following:
a)meeting, corresponding and liaising with neighbours and previous owners in relation to such matters as weather, trespassers/shooters, security, access, road conditions, fencing, livestock control, pest control (pigs); and
b)dealing with things like nature refuge agreements (tendering, plans, issues, management, action, reporting), Box Gum Grassy Woodlands Program (contract, deed of novation, plans, actions, monitoring, reporting), account and purchasing from various authorities.
The husband identifies particular contributions to each property as follows:
a)‘AB’:
i)monitoring tree pear weed eradication;
ii)monitoring for trespassers;
iii)pests including feral animals;
iv)fire control management;
v)checking quality of fencing and repairing as required;
vi)negotiation, construction and maintenance of roads/tracks;
vii)preparing a conservation management plan.
b)‘BC’:
i)track construction and maintenance including project management of companies doing this;
ii)water tank replacement;
iii)mowing for fire breaks around house;
iv)roofing repairs;
v)completion of monitoring requirements in travelling to specific points;
vi)taking photographs and recording findings in respect of the Box Gum Grassy Wood lands Program;
vii)spraying of tree pear as part of weed eradication efforts;
viii)arranging dam building;
ix)monitoring dam water level;
x)monitoring for trespassers, pest management including feral animals;
xi)fire control management;
xii)checking quality of fencing and repairs.
c)‘DF’:
i)track construction and maintenance;
ii)arranging dam building;
iii)monitoring dam water levels, dam leaks;
iv)monitoring for trespassers;
v)pest management including feral animals;
vi)fire control management;
vii)checking quality of fencing and repairing as required;
viii)monitoring agisted sheep and livestock for more than 12 months including the management of the animals in the commercial aspects of this;
ix)negotiation of agreement and billing Agistees.
d)‘GH’:
i)monitoring for trespassers;
ii)pest management including feral animals;
iii)fire control management;
iv)checking quality of fencing and exploring for endangered plant species.
e)‘JK’:
i)meeting, conversation and correspondence with neighbours in matters of access, fencing, livestock control, pest control (pigs), fire control management, grants, weed control program and management;
ii)meeting with a neighbour in relation to the potential acquisition of his property.
The contributions made by the husband to the conservation and improvement of the rural properties are largely accepted by the wife. The husband and wife agree that they entered into a business arrangement at the husband’s suggestion for the work undertaken by the husband in relation to the rural properties. As already noted the husband says and I accept - “I structured arrangements in a commercial sense (with commercial documents) to ensure that [the wife] was able to obtain a tax deduction for the work I did”.
By way of example, the husband and wife entered into a written agreement on 2 August 2012 as between the wife’s entity, D Pty Ltd and the husband’s entity, Rigby Pty Ltd on behalf of the DD Trust which made provision for the payment of $10,000 for the husband’s services “in respect of the ongoing strategic, conservation and operational management of D Pty Ltd’s rural property assets known as AB, AG and BC, BH”.
A further example of the business relationship conducted between the husband and wife is demonstrated by an email exchange between them on 26 July 2012 in the following terms:
The husband to the wife:
I know $10,000 [per annum] is a lot and I am not trying to rip D Pty Ltd off. In fact RC [Rigby Consulting] in hindsight may be under charging a bit? If you break it down into two jobs per property then its $5000 each [per annum]. If you look at the 2011/12 year just gone and AB with the attached work involved I am not sure that you would find any consulting organisation which wouldn’t at least charge you $5000 to do the amount and type of work re AB, probably more. See what Mr RV [the Kingston Group accountant] thinks.
The wife to the husband:
I think $10k may be a bit light on for what you do. We’ll wait to hear back from [Mr RV] and then negotiate.
The husband to the wife:
Whatever it is it needs to be commercially realistic to maintain arms length in a business sense. I thought of $10,000 as reasonable will wait till you hear back from [Mr RV].
[emphasis added]
There is no evidence that the husband sought to further vary his consultancy fee at that time, although it is common ground that the annual fee increased to $13,200 after the purchase of the ‘JK’ and ‘DF’ properties in 2013. I infer that had he not considered it to be a “commercially realistic” charge for the work undertaken, he would have sought to increase it.
During cross-examination, the husband conceded that in relation to the $10,000 per annum fee that he negotiated with the wife – “I’m not saying [I was] underpaid.”
The husband suggests that one of their son’s girlfriend is paid $80,000 a year for conservation work on the properties, seemingly inviting the Court to infer that the work undertaken is the same as that undertaken by the husband. There is no evidence of the work undertaken by their son’s girlfriend. It is also common ground that their son’s girlfriend has tertiary qualifications in the field of conservation.
The last occasion the husband undertook any work in relation to the properties relates to the invoice rendered to the wife on 1 November 2015.
Conclusion – issue 3
The wife purchased numerous residential properties during the marriage and met all outgoings in relation to them. She undertook renovations on each property without any input from the husband save in relation to the addition of a deck and landscaping at one property.
During the period 2005 to 2007, the husband says that he carried out work on BJ for three to four hours per week. He concedes that he was reimbursed for some out of pocket expenses but says he was not reimbursed for all expenses and he gave as examples the purchase of pliers, sledgehammers, a rifle and a chainsaw, stating that a chainsaw “is very personal in nature” and that is why he purchased it for himself. Even allowing for the contentions of the husband that he worked on BJ unpaid for up to 208 hours per annum during this period, I am not persuaded that the contributions made could properly be described as ‘substantial’.
After 2007, the husband negotiated with the wife on a commercial basis to be reimbursed for the work he undertook on the rural properties and the invoices submitted by him were paid.
The evidence does not establish that the husband made substantial contributions to the acquisition and conservation of property in the wife’s sole name for which he was not recompensed.
Was the husband underpaid for the work he did when employed as a contractor for the Kingston Group?
In about September 1992, the wife’s father offered the husband and wife the opportunity to take over management of a medium sized hospitality business in Brisbane. The business employed up to 100 staff.
Neither the husband nor the wife had any background in hospitality or hotel management. The wife had qualifications in science and had worked in that capacity until joining the Kingston Group in 1990. Despite being a finance professional, the husband was operating a retail store from premises owned by the Kingston Group. It was not a profitable endeavour.
The husband was initially engaged as a Deputy Manager at the business so that he could “learn the ropes”. As part of their salary package, the husband and wife were offered free accommodation and board and the husband’s response to the offer at the time was that it was “too good to pass up”.
It is not clear what salary the husband received during the period 1992 to 1995 but the wife says they each worked for more than 15 hours per day. The husband does not differentiate between his salary when he commenced at the business and the years that followed. He says he was paid $40,000 per annum and I infer that his salary was never more than this sum.
The husband provided no evidence from an expert to support his contention that he was underpaid for any period between 1992 and 1999. The husband did not respond to the wife’s attempts to engage a single expert on the issue of remuneration. Ultimately, the wife was granted leave to rely upon a report[6] from a remuneration expert, Mr W. Mr W is an acknowledged remuneration expert with over 35 years’ experience in the field. He identifies in his report the sources of information that inform his opinion, which include publically available data, and information provided by the wife taken from the husband’s affidavit setting out his duties while employed at the business and the annual financial turnover of the business.
[6]Rigby & Kingston (No. 2) [2020] FamCA 467.
Mr W provides evidence that in 1992, a Deputy General Manager (training role) would have attracted a base salary of $33,500 and a fixed reward (base plus benefits) of $38,250. In 1993, a Deputy General Manager would have received a base salary of $35,500 and a fixed reward of $37,400. In 1994, a Deputy General Manager would have received a base salary of $37,300 and a fixed reward of $39,500. Mr W opines that the benefit of accommodation was equivalent to a further $18,250 per annum plus the FBT cost. I accept Mr W’s evidence.
Doing the best I can on the husband’s evidence, he received at most a salary of $40,000 per annum during 1992 to 1995 and in addition, free accommodation and board. The evidence does not support a finding that the husband was underpaid during the period 1992 to 1995.
On 12 January 1995, the husband negotiated a salary package with the wife’s father. The terms of that contract provide for a base fee of $40 per hour and a contract incentive of 10% of new business revenue pertaining to accommodation to the companies within the Kingston Group which is related to the husband’s business management and advice to the Kingston Group. The husband says that despite this negotiation, the wife’s father made it clear that he would not pay the husband more than $800 per week ($40,000 per annum) which equated to 20 hours per week by way of salary. Despite this indication, the husband continued in his role and in his written communication with the wife’s father at the time, the husband said he was looking forward to working with him in 1995. I do not accept that the husband did so because he thought he was part of a broader family enterprise. The wife’s father had always made it plain (dating back to the pre-nup) that he did not regard his children’s spouses as entitled to share in any of the Kingston family’s wealth. It seems common ground that the wife’s father was a tough negotiator who was intent on protecting his wealth both during his lifetime and beyond and, in particular, from the spouses of his children.
The husband and wife’s first child, Mr BR, was born in 1994. After the wife returned from maternity leave she says that she and the husband generally worked around 40 hours each per week. She describes her working hours as commencing at about 7am and concluding at about 2pm. She says that the husband worked from 2pm until 12:30am. When the wife was at work the husband looked after Mr BR and when the husband was at work the wife looked after Mr BR.
In addition to his regular working hours, the husband often filled in for staff when they were absent, sometimes working up to 28 days straight.
The wife deposes to the improvement of the business rating from a four star establishment when they took over management to a four and a half star one in 1996.
While the husband’s evidence is that his salary from 1995 to 1999 was $40,000 per annum his taxable income for 1995 was $17,456; for 1996 it was $32,922; for 1997 it was $34,319; for 1998 it was $39,519; and for 1999 it was $46,902.[7] I note that in the husband’s handwritten letter to the wife’s father in relation to the 12 January 1995 employment contract, the husband refers to his request for an increase in his cash remuneration from $41,600.
[7] Which includes income received after ceasing at the companyl.
Mr W provides evidence that the base salary for a General Manager in 1995 was $50,000 and fixed reward was $53,400. In 1996, it was $53,500 for a base salary and $57,400 for fixed reward. In 1997, the base salary was $57,500 and the fixed reward $62,300. In 1998, the base salary was $60,400 and the fixed reward $65,400. In 1999, the base salary was $64,600 and fixed reward was $70,000. I accept Mr W’s evidence.
I conclude that for the period 1995 to 1999, when the business was sold, the husband was likely to have been underpaid for the work he did at the business. Although the reliability of Mr W’s evidence was challenged by the husband, Mr W has acknowledged expertise in this area and sets out the sources of information upon which his opinion is based. The husband bears the onus of establishing the assertion made by him that he was underpaid and but for the evidence of Mr W I would not be able to make that finding. Doing the best I can on the evidence before me, I conclude that the husband was underpaid and, given the duties undertaken by him and the hours worked, a fixed reward salary would be the appropriate benchmark. Although there is some inconsistency in what the husband’s annual salary was, I have proceeded on the basis that it was $40,000 and accordingly, I find that the husband was underpaid by $13,400 in 1995; by $17,400 in 1996; by $22,300 in 1997; by $25,400 in 1998 and by $30,000 in 1999 i.e. a total of $108,500.
I take some comfort in coming to this conclusion by having regard to the husband’s own proposal to the wife’s father in the lead up to the 12 January 1995 contract in which he sought a salary of $47,000 plus other benefits, taking his proposed entitlements to a total of $54,300 per annum. In calculating what the husband considered was an appropriate return for his efforts, he had regard to remuneration paid to general managers of businesses twice the size of the businesss he managed. The husband conceded during cross-examination that his approach to the negotiations with the wife’s father in 2005 was “robust”.
However, that is not the end of this issue because the husband also asserts that he was not paid three months termination payment to which he was entitled pursuant to his contract and amounting to $10,000.[8] The only contract of employment is dated 12 January 1995 and it makes provision for a minimum of four months’ notice of termination. In a letter to the wife and one of her brothers dated 30 September 2003, the husband claimed his termination payment was $14,400 (it is not clear how this sum was calculated) but that the wife’s father had offered to pay him $7,700 which he declined. The husband’s letter proceeds to claim interest on the $14,400 at nine percent and claimed he was owed $20,937.
[8] The husband contended during cross-examination that this sum was incorrect.
Later in 2003, the husband wrote to the wife setting out a calculation of what he felt he had “lost” during his time as general manager at the business on the following basis:
Difference in GM Package $177,000
Commissions estimate 98/99 & 99/00 $ 40,000
Termination notice $ 14,400
Total $231,400
In a further letter written by the husband to the wife at this time the husband said among other things:
[as per original]
I know I dealt with your Father and I was naïve to think that some day there would be some recognition and appreciation in a financial form. I’ve never had the mind set that because you will benefit → I will benefit. It’s never been that way of thinking for us.
I never married you for your money. …
… In asking for 4 months notice I was not looking to be “greedy”. My instigation for asking for the $20,937 was to then immediately give it to you – to allow you to get the $ “tax free” in effect and me to reduce some debt. I was stuck between a rock & a hard place
·Knowing you could do with the money
·And Q Pty Ltd could probably afford it
·I thought Mr F Kingston would understand and support it (I misjudged this aspect)
·I’m on a relative lower tax rate and in receiving $20,937 you would get it “tax free” from me
…
I can understand how Mr F Kingston & Mr G Kingston think I am ungrateful in asking for the termination amount….
In further correspondence from the husband to the wife dated 28 October 2003 the husband wrote:
Thankyou for trying to have Q Pty Ltd attend to the payment of my notice of termination payment. … It has obviously stirred up a bit of a hornet’s nest …
I wrote the letter asking for that termination amount with the intention of then paying off some of my debt to you. Quite a while has passed since May 1999 and I appreciate that my debt to you has been there for a while too…
…
At that time, … I was going to pass the money on to you and my present debt would have been cleared.
…
… I have my debt to you but now have a much longer road to travel to pay it off …
The issue of the husband’s claim for a termination payment was a source of considerable animosity in the wife’s family, as reflected in the husband’s reference to his having “stirred up a bit of a hornet’s nest”.
Whatever amount may or may not have been due to the husband in relation to a termination or other payment, the husband now says that the “issue resulted in [the wife] wiping the debt she alleged I owed her as part of the reconciliations…”
The husband’s communications to the wife in 2003 do not reflect the husband’s present view that the debt he owed to the wife was contentious. The wife says that the debt to her at the time was “to the best of her recollection … approximately $120,000 to $130,000” and the husband accepted her offer to resolve the impasse by wiping his debt to her. The husband conceded during cross-examination that the effect of what he received from the wife was $120,000.
Whatever the amount of debt the husband acknowledged he owed to the wife in his 2003 communications, I accept the wife’s evidence that the husband’s claim for underpayment, commissions and termination payment was resolved on the basis that the husband’s debt to the wife was wiped. The husband’s communications to the wife at the time are consistent with such an outcome and I note the husband’s concession during cross-examination that his negotiations in 2003 in relation to the sums allegedly owed to him were “robust”.
Conclusion – issue 4
I find it likely that the husband was underpaid for the work he did when employed as a contractor with the Kingston Group during the period 1995 to 1999 in the sum of $108,500. This finding is made in the context of the contributions made by the husband during the marriage and is not intended to bind the Kingston Group, who have not been heard on this issue. The fact remains that the husband entered into a contract of employment with the wife’s father and was paid in accordance with that contract, apart from the termination sum. In addition to his salary, the husband had an entitlement under his contract of employment to receive four months’ notice of termination and in circumstances where he received no notice he arguably had a claim for payment in lieu i.e. $13,333 (on a salary of $40,000). The evidence does not satisfy me that the husband was owed commissions.
The husband resolved his informal claim for underpayment, termination and commissions by offsetting the sum he was allegedly owed by the Kingston Group against the debt he owed the wife in 2003.
Were the distributions made to the husband as a discretionary beneficiary of the CC Trust made in order to minimise tax for the wife or the family constituted by the husband, the wife and their children or were the distributions made as a tax effective means of the husband repaying loans the wife had made to him?
From 2007, the wife made the decision, at the husband’s instigation, to make distributions to the husband from her trust (the CC Trust). The distributions were made to the husband because he had a low income and it was therefore tax effective. As noted earlier in these reasons, the practice developed from about 2007 for the husband to use his personal credit card for the payment of family expenses and the wife provided funds to pay the credit card each month. The tally calculated by the husband as attributable to loans made to him by the wife were debited against the husband’s beneficiary loan account in the wife’s trust and when a distribution was made by the wife’s trust to the husband it reduced that debt. It was a tax effective means of distributing income from the wife’s trust and thereby meeting family expenses, and it was also a tax effective means of repaying the husband’s loans.
The payment to the husband via the wife’s family trust enabled the husband to make an indirect contribution by providing a tax benefit to the wife and to that extent the husband made an indirect contribution to the financial contributions made by the wife.
Conclusion – issue 5
The distributions made to the husband were made in order to minimise tax for the wife and as a tax effective means of the husband repaying loans the wife had made to him.
Were the “loans” described in (5) in truth made and did the husband agree to borrow?
The husband was at all relevant times a finance professional and personally prepared a number of the relevant documents recording the loans. The husband’s written communications to the wife at various times during their marriage refer to the loans being made to him from the wife.
Conclusion – issue 5(a)
I am satisfied that loans were made by the wife to the husband and that the husband agreed to borrow.
Did the husband commence part time employment and then later his own consultancy which afforded him the opportunity to work less than full time hours in 2007 in order to enable him to meet the needs of the children?
After leaving the business in 1999, the husband’s work history was intermittent.
The husband’s evidence about his employment history contains some inconsistencies e.g. he says that he was not in employment during the period April 2001 until the beginning of 2003 but elsewhere in his evidence says he undertook a short term contract between October 2001 to January 2002 and conducted workshops for a professional body from January 2002 to January 2003.
From February 2003 until July 2005, the husband worked three days per week as a manager for AA Pty Ltd and from July 2005 he worked three days per week as a business manager with HH Company, a position from which he was “constructively dismissed” in about July 2007.
Obviously the husband’s dismissal was unplanned and the husband conceded during cross-examination that he started the consultancy to try and derive an income and that he had no other options at that time. He also conceded that he failed to grow the consultancy and that he only had one client – the wife.
As the children’s needs increased at about this time, the husband threw himself into supporting the children’s sporting prowess in particular and thereby made a contribution to the welfare of the children/family.
Despite the husband’s intermittent or part time employment leading up to the establishment of his consultancy business in July 2007, the husband conceded during cross-examination that the wife was nevertheless the primary homemaker and that the children’s needs were mainly met by the wife.
Conclusion – issue 6
I reject the contention that the husband engaged in part time employment and later established of his own consultancy in order to enable him to meet the needs of the children.
Did the contributions of the husband as homemaker and parent exceed those of the wife as homemaker and parent and were there periods he fulfilled a role of primary homemaker and/or parent and thereby indirectly contributed to the financial contributions being made by the wife?
Although this was a question posed by both the husband and the wife in December 2019, Dr Ingleby for the husband submitted that this question “cannot be answered because it requires the application of a “mathematical” approach to non-financial contributions which is inconsistent with the requirement of a holistic assessment”.
I reject this submission. What the question invites is an assessment of the evidence including any concessions made by each of the parties. Even a “holistic” assessment of contributions requires an assessment of each party’s individual contributions across the myriad of contributions made during the marriage.
In this case, the husband conceded during cross-examination that up until July 2007 the needs of the children were mainly met by the wife and that she was the primary homemaker. This does not mean he did not make a contribution as homemaker and parent. The wife concedes that he did so. For example, in the period after Mr BR’s birth in 1994 the husband and wife worked competing shifts at the business until 1999 and whoever was not at work looked after BR. After CF’s birth in 2001, the husband either had no employment until January 2003 or limited employment and I accept that he carried out a role as parent and homemaker but, despite the husband having greater availability than the wife during the period from 1999 (after ceasing his employment at the business) to 2007, the husband accepts the needs of the children were mainly met by the wife.
After 2007, and coinciding with the needs of the children increasing, the husband’s contribution as homemaker and parent increased from what it had been prior to 2007. The wife concedes that between 2007 and 2013 the husband played a greater role than he had previously.
The husband was very keen to describe himself as a “Mr Mum” but this in itself is not a sufficient identification of the tasks he fulfilled. It is common ground that the husband assumed a significant role in assisting and encouraging the children to achieve their full potential in various sporting pursuits. The children excelled in sport and the husband not only drove them to training and competition but assumed more significant coaching and umpiring roles in both club and representative teams. The husband’s contribution to these endeavours was important and beneficial to the children.
The wife’s focus was more on the practical day to day requirements of the children e.g. washing and cooking. While the husband contends that he also undertook housework and I accept that he did, he complains that he could never live up to the wife’s expectations in relation to such duties. Perhaps because of this, it is common ground that the wife employed a gardener and a cleaner to assist with these duties.
The husband also assisted the children with their homework and drove them to and from school.
There were occasions throughout the marriage when the wife travelled intrastate or interstate (for short periods) and overseas for sometimes extended periods both for work and pleasure and the children were cared for by the husband during her absence. The occasions when he fulfilled the primary parenting role for extended periods were as follows:
·18 days in 2007 when the wife was in the USA on business
·31 days in 2009 when the wife was in Country CG on holiday (pursuing her interest in conservation and photography)
·29 days in 2010 when the wife was in Country CH on holiday (pursuing her interest in conservation and photography)
·36 days in 2012 when the wife was in Country CJ on holiday (pursuing her interest in conservation and photography)
·31 days in 2013 when the wife was in Country CH on holiday (pursuing her interest in conservation and photography)
·22 days in 2014 when the wife was in Country CL on holiday (pursuing her interest in conservation and photography)
·16 days in 2015 when the wife was in Country CM on holiday (pursuing her interest in conservation and photography)
The husband concedes that in the period leading up to separation (from some time prior to October 2013 until about March 2015), he struggled with alcoholism and obesity. The husband acknowledged the limitations of his contributions in an email to the wife dated 3 March 2015:
I wasn’t exactly a great person in being what I was prior to Oct 2013 and being there for you and my conduct somewhat wanting where I acknowledged it was tough for you by yourself and little to no help from me.
I am looking towards 2015 being better than 2014 and the landscape one where I am a better father to Mr BR and Mr CF, our family is a family like a family might be and I will be your friend and will look to do things I can do well – well.
Conclusion – issue 7
I conclude that the contributions of the husband as homemaker and parent did not exceed those of the wife as homemaker and parent. There were periods he fulfilled the role of primary homemaker/parent when the wife was absent and thereby indirectly contributed to the financial contributions being made by the wife.
What were the contributions by the wife to the Kingston Group and how was she recompensed for her employment?
The wife commenced to work for the Kingston Group in January 1990. The Kingston Group was established by the wife’s father in about 1939 and the Group has grown substantially since that time such that the wife’s estimate of value of the Kingston Group at an earlier time in these proceedings was in the vicinity of $150,000,000.
The Kingston Group consists of commercial construction, design and construction, civil engineering, industrial complexes, public building construction, plant hire, restoration works of various buildings, sand and gravel, joinery, housing developments throughout Queensland and land subdivision developments in BN City, VV City, WX Town, KK Town, BD Town and Suburb CK.
The wife joined the Kingston Group in an administrative role while learning the ‘ropes’. The wife’s father had expectations that the wife would work harder than other staff members and she complied with his expectations, working long hours. Between 1992 and 1999, the wife worked at the business with the husband and her roles and responsibilities vary during that time. Between 1999 and 2003, the wife continued to work for the business but was primarily responsible for assisting with the new owners takeover of the business. Since about 2003, the wife has been responsible for the management of the Residential Division, the Commercial Division (together with her brother Mr G Kingston) and the Land Division (along with her brothers Mr F Kingston and Mr G Kingston) inclusive of being responsible for a development which consists of 144 villas and townhouses next to the BM University in VV City.
Over the years, the wife’s role has expanded and the Kingston Group’s operations are conducted via 28 trusts and companies which are now managed and operated by the wife and her two brothers, Mr F Kingston and Mr G Kingston. The wife is employed through the entity known as Q Pty Ltd.
The roles undertaken by the wife between 1990 and 2015 and her salary throughout the marriage are set out in the following table:
Financial Year Role Annual Income 1991 Administration Unknown 1992 Administration Director E$33,000 1993 Director E$33,000 1994 Director E$33,000 1995 Director $39,211 1996 Director $48,792 1997 Director $49,552 1998 Director $50,881 1999 Director/Company Director $49,204 2000 Company Director $51,452 2001 Company Director $47,100 2002 Company Director $47,966 2003 Company Director $51,632 2004 Company Director $60,865 2005 Company Director $70,673 2006 Company Director $94,999 2007 Company Director $141,538 2008 Company Director $149,999 2009 Director - Managing $180,001 2010 Director - Managing $180,001 2011 Director - Managing $180,001 2012 Director - Managing $180,001 2013 Director - Managing $180,001 2014 Director - Managing $180,001 2015 Director - Managing $180,001 TOTAL $2,312,871
At least since 2009, the wife and her two brothers have been paid the same salary of $180,000.
Conclusion – issue 8
The wife has made significant contributions to the Kingston Group commencing in 1990 in modest roles as she learnt the ropes and increasing to senior management roles as particularised above. The salaries received for her contributions up to 2015 total $2,312,871.
What were the financial contributions of the husband during the relationship?
The husband’s various roles and taxable income throughout the marriage are set out in the table below:
| Financial Year | Role | Capacity | Annual Income |
| 1991 | Owner, FF Retail | Self-employed | Unknown |
| 1992 | Owner, FF Retail | Self-employed | $15,311 |
| 1993 | Deputy General Manager | Contract | $11,269 |
| 1994 | Deputy General Manager | Contract | $11,314 |
| 1995 | Deputy General Manager | Contract | $17,456 |
| 1996 | Deputy General Manager | Contract | $32,922 |
| 1997 | Deputy General Manager | Contract | $34,319 |
| 1998 | Deputy General Manager | Contract | $39,519 |
| 1999 | Deputy General Manager, Director, Corporate Finance, AF Company | Contract/Contract | $46,902 |
| 2000 | Director, Corporate Finance, AF Company/General Manager, Z Pty Ltd | Contract/Contract | $50,033 |
| 2001 | Contract Manager, GG Bank | Contract | $38,225 |
| 2002 | Workshops for professional body; and Independent invention commercial & technical assessment for AD Charity | Unknown | $15,844 |
| 2003 | Manager - Operations, AA Pty Ltd | Permanent Part- Time | $19,631 |
| 2004 | Manager - Operations, AA Pty Ltd | Permanent Part- Time | $47,170 |
| 2005 | Business Manager, Y Pty Ltd | Permanent Part- Time | $47,144 |
| 2006 | Business Manager, Y Pty Ltd | Permanent Part- Time | $61,617 |
| 2007 | Director, Rigby Consulting | Self-employed | $74,998 |
| 2008 | Director, Rigby Consulting | Self-employed | $166,967 |
| 2009 | Director, Rigby Consulting | Self-employed | $95,371 |
| 2010 | Director, Rigby Consulting | Self-employed | $80,164 |
| 2011 | Director, Rigby Consulting/ Director, Rigby Pty Ltd | Self-employed | $79,948 |
| 2012 | Director, Rigby Consulting/ Director, Rigby Pty Ltd | Self-employed | $80,005 |
| 2013 | Director, Rigby Consulting/ Director, Rigby Pty Ltd | Self-employed | $106,595 |
| 2014 | Director, Rigby Consulting/ Director, Rigby Pty Ltd | Self-employed | $18,447 |
| 2015 | Director, Rigby Consulting/ Director, Rigby Pty Ltd/ Contractor, HH Company | Self-employed | $7,753 |
| TOTAL | $1,198,924 | ||
From 2007 the husband’s sole client was the wife, and the husband received not only payment for work conducted on behalf of the wife but also distributions from the wife’s trust as a tax effective means of distributing income.
Conclusion – issue 9
The husband’s financial contributions during the marriage comprise taxable income of $1,198,924.
What were the financial contributions of the wife during the relationship?
During the relationship the financial contributions of the wife are set out in the table below:
| Financial Year | Salary | Trust distribution | Inheritance | History of acquisition and borrowings for property | Disposal of property | ||
| 1992 | E$33,000 | RR Street, Suburb LL (unknown price) QQ Street, Suburb BP ($170,000) | |||||
| 1993 | E$33,000 | ||||||
| 1994 | E$33,000 | ||||||
| 1995 | $48,792 | ||||||
| 1996 | $49,552 | ||||||
| 1997 | $50,881 | ||||||
| 1998 | $49,204 | PP Street, NN Town ($152,000) | $210,000 (Suburb BP property) | ||||
| 1999 | $51,452 | ||||||
| 2000 | $47,100 | ||||||
| 2001 | $47,966 | TT Street, Suburb SS ($199,000) | $115,000 (Suburb LL property) $257,500 (NN Town property) | ||||
| 2002 | $51,632 | ||||||
| 2003 | $60,865 | ||||||
| 2004 | $70,673 | $314,973 | |||||
| 2005 | $94,999 | $500,000 | |||||
| 2006 | $141,538 | $500,000 | |||||
| 2007 | $149,999 | $500,000 | |||||
| 2008 | $180,001 | $500,000 | |||||
| 2009 | $180,001 | $450,251 | |||||
| 2010 | $180,001 | $62,264 | BF Street, Suburb AC ($1,250,000) | ||||
| 2011 | $180,001 | $81,322 | $550,000 (Suburb SS property) | ||||
| 2012 | $180,001 | $3,060,000 | |||||
| 2013 | $180,001 | $1,073,060 | $820,000 | ||||
| 2014 | $180,001 | $71,612 | $192,732 | ||||
| 2015 | $180,001 | $757,849 | |||||
| Total | $2,312,871 | $7,871,331 | $1,012,732 | ($1,771,000) | $1,132,500 | ||
Conclusion – issue 10
The wife’s financial contributions during the marriage comprise salary, trust distributions, property sale proceeds and inheritance of about $10,558,434.
I certify that the preceding one-hundred and twenty-three paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 18 August 2020.
Associate:
Date: 18.08.2020
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