Romano and June

[2013] FamCA 344

FAMILY COURT OF AUSTRALIA

ROMANO & JUNE [2013] FamCA 344

FAMILY LAW – PROPERTY – Where it is just and equitable to alter the property interests of the parties – Value of property – Determining the pool of property – Where there has not been full disclosure of assets – Where liabilities claimed by the husband are disputed by the wife – Where the husband’s investment arrangements were complex – Trust property – Whether trust property can be deemed property of the parties or either of them for the purposes of the Family Law Act 1975 (Cth) – Where the company for whom the husband claims he worked was incorporated in the British Virgin Islands – Where the company operated out of Monaco – Where the husband has resigned from his position as a director with the company – Where a former director under British Virgin Island law has no access to the company’s records – Where the form of remuneration from the company to the husband was consistent with a greater involvement than working as a contractor.
FAMILY LAW – EVIDENCE – Balance of probabilities – Where the reliance on Evidence Act 1995 (Cth) s 128 was not appropriate – Expert evidence – Admissibility – Whether an expert report’s probative value is outweighed by its prejudicial nature – Where it is submitted that the Expert’s report should be excluded as hearsay – Exception to hearsay pursuant to Evidence Act 1995 (Cth) s 69 – Where documents considered by the report writer were business records – Non-disclosure and reliance on Evidence Act 1995 (Cth) s 128 to protect from criminal or civil sanctions in Monaco.
FAMILY LAW – WITNESSES – Credibility – Inconsistent evidence – Where liabilities of the wife are disputed by the husband – Add backs.
FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Where the nature, form, characteristics and extent of contributions were considered – Where the wife was required to undertake significant international travel to accompany the husband – Where there are no children of the marriage – Where the wife was not engaged in gainful employment throughout the marriage – Where the wife undertook the role of homemaker – Property acquired before marriage – Property acquired after separation – Where the husband’s contributions greatly outweigh the wife’s contributions – Just and equitable.
FAMILY LAW – COSTS – Where the wife’s application for costs is adjourned.

Family Law Act 1975 (Cth) s 75(2), s 79(1), s 79(2), s 79(4), s 81,

Bankruptcy Act 1966 (Cth).
Evidence Act 1995 (Cth) s 3, s 48, s 49, s 57, s 58, s 69, s 128, s 135, s 140, s166-169, s 183,

Brett-Hall & Brett-Hall [2006] FamCA 712
Coghlan & Coghlan (2005) FLC 93-220
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
In the Marriage of Goodwin (1990) 4 Fam LR 801
Jones v Dunkel (1959) 101 CLR 298
Kannis (by his next friend) & Kannis [2002] FCWA 51
Kennon v Spry (2009) 251 ALR 257
Makita (Aust) Pty Ltd v Sprowles [2001] NSWCA 305
Rosati & Rosati [1988] FamCA 38
Stanford & Stanford (2012) 293 ALR 70
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Swanton & Farnell [2012] FamCA 510
Sydneywide Distributors Pty Ltd [2002] FCAFC 157
Watson & Ling [2013] FamCA 57
Weir v Weir (1992) 16 Fam LR 154

APPLICANT: Ms Romano

RESPONDENT: Mr June

FILE NUMBER: BRC 3679 of 2010

DATE DELIVERED: 17 May 2013

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 3-7, 10-14 and 17-20 October 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hackett

SOLICITOR FOR THE APPLICANT: Hirst & Co

COUNSEL FOR THE RESPONDENT: Mr North of Senior Counsel with Mr SJ Williams of Counsel

SOLICITOR FOR THE RESPONDENT: Bowen Buchbinder & Vilensky

Orders

(1)That by way of property adjustment between the husband and the wife, the wife retain as her sole property absolutely all of her right, title and interest in the following property:   

(i)the real property situated at F Street, Western Australia;

(ii)the real property at E Street, South Australia;

(iii)the real property at C Street, Western Australia;

(iv)the real property at M Street, Queensland;

(v)the real property at R Street, Western Australia;

(vi)motor vehicle 5 in her possession;

(vii)motor vehicle 6 in her possession;

(viii)motor vehicle 7 in her possession;

(ix)the wife’s household contents and other chattels in Queensland and in storage in Perth, Western Australia;

(x)the shares in public companies listed in the wife’s name; and

(xi)all money standing to bank accounts in the wife’s name.

(2)That within three calendar months of the date of these orders, the husband shall:

(i)refinance all joint liabilities of the husband and the wife into his own name and cause all mortgages of real property in which the wife has an interest that secure those joint liabilities to be discharged; and

(ii)cause all mortgages of real property in which the wife has an interest that secure any liabilities the husband has in his own name to be discharged; and

(iii)either pay to the wife the sum of $1,338,468 (one million three hundred and thirty-eight thousand four hundred and sixty-eight dollars), or, alternatively, refinance $1,338,468 of the wife’s sole liabilities and cause the mortgages of property in which the wife has an interest to be discharged to the extent that they secure that amount of debt.

(3)That in default of compliance by the husband with the obligations imposed upon him by paragraph 2 of these orders, the real property situated at A Street, Western Australia registered in the husband’s sole name shall be sold by private treaty or public auction within eight calendar months of the date of these orders and, if necessary in order to satisfy the husband’s obligations pursuant to these orders, the husband’s Western Australian boat “[SSS]” also be sold by private treaty or public auction  within ten months of the date of these orders, and the proceeds of sale of the said real property and, if necessary, the said boat, shall be disbursed as follows:

(i)in payment of the costs of sale;

(ii)as necessary to effect discharge of all mortgages of real property in which the wife has an interest securing any liability of the husband whether owed solely by him or jointly and severally with the wife;

(iii)as necessary to effect discharge of all mortgages of real property in which the wife has an interest securing any liabilities for which the wife is solely responsible up to an amount of $1,338,468;

(iv)any balance, at the direction of the husband. 

(4)That upon compliance by the husband with the obligations imposed upon him by paragraph 2 of these orders or paragraph 3 of these orders:

(i)the wife shall take all steps as are necessary to effect discharge of any caveat or caveats she has caused to be registered in respect of any real property situated in Western Australia in which the husband has any right, title or interest, including any real property included as an asset of the A Trust;

(ii)any injunction or order of this Court, previously made, shall be discharged; and

(iii)the husband shall retain as his sole property absolutely all right, title and interest he has in any real or personal property, including shareholdings in companies, motor boats, motor cars, motor cycles, furniture and household contents, artworks, wine collections, life insurance policies, farming partnerships, money in bank accounts and any interests held as a beneficiary in any trust, wherever so held and however described.

(5)That the husband shall do all things necessary to implement these orders, including signing any document within 14 days of any document requiring his signature being sent to him at care of his Perth solicitors’ address, and in default, the Registrar of the Brisbane Registry of this Court is appointed pursuant to s106A of the Family Law Act 1975 (Cth) to execute such document on behalf of the husband.

(6)That the wife shall do all things necessary to implement these orders, including signing any document within 14 days of any document requiring her signature being sent to her at care of her Brisbane solicitors’ address, and in default, the Registrar of the Brisbane Registry of this Court is appointed pursuant to s106A of the Family Law Act 1975 (Cth) to execute such document on behalf of the wife.

(7)That should either party seek an order in respect to the costs of and incidental to the proceedings, or any part of them, then within 28 days of the date of these orders such party shall file and serve the following:

(i)a minute of the precise costs order sought;

(ii)any further evidence sought to be relied upon in support of the application; and

(iii)written submissions.

(8)That within 14 days of receipt of service of the documents referred to in paragraph 7 of these orders, the party served shall file and serve the following:

(i)           a minute of the precise order sought in response;

(ii)          any further evidence sought to be relied upon in response;

(iii)         written submissions in reply.

(9)That should documents be filed pursuant to paragraph 7 hereof then, after 14 days from that date of filing, the parties will be notified of a date upon which such application will be heard by the Court, unless the Court is, before that time, notified in writing by the solicitors for each party that any such applications can be determined on the papers.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Romano & June has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3679 of 2010

Ms Romano

Applicant

And

Mr June

Respondent

REASONS FOR JUDGMENT

Background  

1.Ms Romano and Mr June married in October 2000. Their marriage was dissolved on the husband’s application on 21 September 2009. There were no children born of their marriage, although the wife sadly miscarried two pregnancies during the time they lived together before they actually married. 

2.Unable to amicably resolve their differences as to how their entwined financial affairs should be unravelled and finalised, they have both come to the Court asking for orders to be made altering their interests in property. Each party wants to retain certain property and to be paid a lump sum of money by the other.

3.Their competing applications were heard in a trial that took place in this Court over fifteen days between 3 and 20 October 2011.

4.Around nineteen months have now passed since the trial finished. That is an unfortunate and regrettable delay in delivering this judgment. I acknowledge that this delay will have caused distress to the parties in this case. That distress would be additional to the distress which they would already have been experiencing due to their disagreements and their involvement in these proceedings.  However, the trial was a long and complex one which raised many issues for this Court to determine. Determining the outcome has taken a great deal of consideration, and the responsibility for hearing and deciding so many other matters in this Court has, unfortunately, prevented me from finalising this judgment before now.  It can only be hoped that this judgment will bring certainty and finality to these two peoples’ lives after several years of uncertainty.

The determination of applications for alteration of property interests

5.The property interests of parties to a marriage may be altered by the Court making such order as it considers appropriate.[1] The Court’s power to alter the interests of the parties to the marriage in property includes the power to order a settlement of property in substitution for any interest in property and the power to make an order requiring either or both parties to make, “for the benefit of either or both of the parties to the marriage such settlement or transfer of property as the Court determines”.[2]

[1]          Family Law Act 1975 (Cth) s 79(1).

[2]          Family Law Act 1975 (Cth) s 79(1)(a), (c) and (d).

6.The Court cannot make an order under s 79(1) though, unless it is satisfied, in all of the circumstances, it is just and equitable to make the order.[3] The consideration of whether it is just and equitable to make a property settlement order begins by identifying, “according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property”.[4] Legal principle is to be followed and applied when exercising the discretion conferred by s 79,[5] and care must be taken not to conflate the s 79(2) question of whether it is just and equitable to make property settlement orders at all with the separate s 79(4) question as to the particular orders to be made if any are to be made.[6] 

[3]          Family Law Act 1975 (Cth) s 79(2).

[4]          Stanford and Stanford (2012) 293 ALR 70 at [37].

[5] Ibid at [38]-[39].

[6] Ibid at [40].

7.Seven matters that must be taken into account in “considering what order (if any) should be under [s 79(1)] in property settlement proceedings” are set out in s 79(4). These include various forms of contribution made by the parties to a marriage; the effect of any order on either party's earning capacity; consideration of the matters to be taken into account under s 75(2) of the Family Law Act1975 (“FLA”), so far as they are relevant; any orders already made under the FLA; and any child support that has been provided, is to be provided or might be provided in the future for a child of the marriage.

8.As Murphy J has identified[7], taking care not to conflate the two questions but to consider them separately, the matters listed in s 79(4), together with any such other considerations as are properly relevant, can inform the answer to the s 79(2) question as well as the s 79(4) question. Having said that, in my view, that which the Full Court of this Court has described as “the preferred approach to the determination of an application brought pursuant to s 79 of the FLA”[8] is still very much a useful and relevant exercise as part of the process in which the discretionary exercise is to be approached.

[7]          See Watson and Ling [2013] FamCA 57 at [12].

[8]See Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39] and Coghlan and Coghlan (2005) FLC 93-220 at [22].

9.That approach is said to involve four inter-related steps: firstly, making findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing; secondly, identifying and assessing the contributions of the parties within the meaning of ss (a), (b) and (c) of s 79(4) and determining the contributions based entitlements of the parties expressed as a percentage of the net value of the property of the parties; thirdly, identifying and assessing the relevant matters referred to in ss (d), (e), (f) and (g) of s 79(4) - including, because of s 79(4)(e), the matters that are relevant pursuant to s 75(2) - and determining the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step 2; and fourthly, considering the effect of those findings and determinations and resolving what order is just and equitable in all the circumstances.

10.Of course, it has never been mandatory to take this four step approach, and now, as just discussed, it is critical, once the parties’ legal and equitable interests in property have been identified, to determine the question of whether it is just and equitable to make property settlement orders at all in all the circumstances of their marriage. The discretion conferred upon the Court is a broad and “holistic” one[9] and it can equally be properly exercised in different ways, as long as legal principles, including those set out in s 79 of the FLA itself, are followed and the reasons that are given make that clear.

[9]          Per Murphy J in Watson v Ling supra at [13].

What are the Parties’ existing interests in property?

11.In this case, at the end of the trial, there was no dispute between the parties about the ownership and value of a large number of items of property.

12.This table sets out the agreed property interests of the husband and the agreed values of those interests:

Real property at A Street, Western Australia	Husband is the registered proprietor	Value   $3,250,000
Real property at Flat 1, London Property, UK	Husband owns a share in the company that owns the building – his share ownership entitles him to ownership of this apartment	Value   $1,207,500
Real property at Flat 2, London Property, UK	Husband owns a share in the company that owns the building – his share ownership entitles him to ownership of this apartment	Value   $1,086,550
Motor vessel “[SSS]” moored in Western Australia	Husband is the owner	Value   $400,000
Tender vessel “[SSS 2]” moored in Western Australia	Husband is the owner	Value   $26,000
Motor vehicle 1 garaged in Western Australia	Husband is the owner	Value   $7,500
Motor cycle garaged in Monaco	Husband is the owner	Value   $4,154
Motor vehicle 2 garaged in Monaco	Husband is the owner	Value   $31,850
Motor vehicle 3 garaged in Monaco	Husband is the owner	Value   $11,078
Motor scooter 1 garaged in Monaco	Husband is the owner	Value   $343
Motor scooter 2 garaged in Monaco	Husband is the owner	Value   $412
Motor vehicle 4 garaged in London, UK	Husband is the owner	Value   $10,477
Household furniture and  chattels  Monaco	Husband is the owner	Value   $20,700
Household furniture and chattels London, UK	Husband is the owner	Value   $2,182
Household furniture and chattels  Perth, WA, Australia	Husband is the owner	Value   $21,820
Artwork  Perth, WA, Australia	Husband is the owner	Value   $18,345
Wine collection  Perth, WA, Australia	Husband is the owner	Value   $150,321
Life insurance policy  Australia	Husband is the owner of the policy	Surrender value                   $167,889
Interest in a farming partnership styled “W Partnership”, Western Australia	Husband owns a one-third interest in the partnership	Value   $2,710
Beneficiary loan account balance in A Trust	Account is in husband’s name – husband is owed the money	Value   $1,067,324
Money in bank accounts	Husband owns the money	Value   $96,615

13.The total value of all of these items of property of the husband is $7,583,770.

14.This table sets out the agreed property interests of the wife and the agreed values of those interests:

Real property at F Street, Western Australia	Wife is the registered proprietor	Value $1,487,500
Real property at E Street, South Australia	Wife is the registered proprietor	Value $385,000
Real property at C Street, Western Australia	Wife is the registered proprietor	Value $1,300,000
Real property at M Street, Queensland	Wife is the registered proprietor	Value $930,000
Real property at R Street, Western Australia	Wife is the joint registered proprietor as joint tenants with her mother	Value of half share $377,500
Motor vehicle 5 garaged in Australia	Wife is the owner	Value   $7,500
Motor vehicle 6 garaged in Australia	Wife is the owner	Value  $6,700
Motor vehicle 7 garaged in Australia	Wife is the owner	Value $7,000
Household furniture and chattels, M Street, Queensland	Wife is the owner	Value $ 28,000
Household furniture and chattels in storage in Perth WA, Australia	Wife is the owner	Value $4,650
Shares in publicly listed companies	Wife is the owner	Value $14,775
Money in bank accounts	Wife owns the money	Value   $5,606

15.The total value of all of these items of property of the wife is $4,554,231.

16.The parties also agreed at the trial that the husband owned share options in a company listed on the AIM Market of the London Stock Exchange, called GM plc, and also in a company listed on the Toronto Stock Exchange, the AIM Market of the London Stock Exchange and the Lima Stock Exchange, called LA Limited. Despite jointly instructing TG UK to provide an expert report as to the value of the share options, the husband and wife could not agree on their value. The wife asserts that the share options carry a value of $830,399 and the husband asserts that they should be valued at $254,898. I shall return to this issue.

17.The Husband is one of two directors of the private Australian company, A Investments Pty Ltd. The company is the trustee of the A Trust, a discretionary family trust established by the husband in the 1980’s. The husband does not own shares in the company. He is a primary beneficiary of the A Trust and, as has been agreed, is owed over a million dollars by the trust. The parties agree that the value of the net assets of the trust, after allowing for all of the liabilities, including the debt to the husband, is $68,774. The wife asserts that the net assets of the A Trust are in reality the husband’s as, regardless of legal structure, the husband ‘controls’ the trust. As such, she contends that the assets of the trust constitute “property” of the husband for the purposes of these proceedings. In contrast, the husband disputes that, contending that the assets of the trust are not his and cannot be treated as his “property” in these proceedings. However, the husband does concede that it is a “financial resource” to him. I shall return to this issue.

18.The wife contends the husband is also the owner of shares in the company, LA Limited, referred to above. She asserts that the shares in this company carry a value of $1,509,563. The husband denies that he owns such shares, saying that they are held by another company, X1 Limited, in which he has no ownership interest. I shall return to this issue.

19.As to the company, X1 Limited, the wife would have the Court find that the husband owns, at least ultimately to his benefit, all the shares in that company and that those shares are worth at least $26,000,000. The husband denies that he does own the shares in the company, asserting rather that he is employed by that company as a consultant. This is fairly described, in my view, as the single biggest issue in this case. If both these assertions of the wife are correct, the value to the husband of the property in those shares is significantly more than the total of the balance of the property interests in the case. I shall return to this issue.

20.In a similar vein, the wife would also have the Court find that the husband owns, again at least ultimately to his benefit, all of the shares in another company, X2 Ltd, and that those shares are worth at least $1,300,000 which she contends is the value of the motor vessel named “[SSS]” (the same name as the husband’s boat moored in Perth) that is moored in the Mediterranean and is owned by that company.  I shall return to that issue.

21.The parties agreed that the husband had an interest in a superannuation fund at the time of trial that was worth $4,842.

22.The parties agreed about certain liabilities they have.

23.It was agreed the husband has the following liabilities.

To the Bank of Scotland secured by mortgage over his interest in Flat 1, London property	Liability $694,634
To the Bank of Scotland secured by mortgage over his interest in Flat 2 London property	Liability $790,452
To the National Australia Bank Ac no …62	Liability $75,877
To the National Australia Bank Ac no …94 Secured by mortgage over the wife’s interest in the M Street, Queensland property	Liability $218,084
To the National Australia Bank Ac no …87 Secured by mortgage over the wife’s interest in the C Street, Western Australia property	Liability $311,943
Debt due to Husband’s friend, Mr J	Liability $97,000

24.As such, the husband’s liabilities that are agreed total $2,187,990.

25.It was agreed that the parties had the following joint liabilities.

To the National Australia Bank Ac no …32 Secured by mortgage over the wife’s interest in the E Street, South Australia property	Liability $266,864
To the National Australia Bank Ac no …75 Secured by mortgage over the wife’s interest in the F Street, Western Australia property	Liability $254,164
To the National Australia Bank Ac  no …28 Secured by mortgage over the wife’s interest in the F Street, Western Australia property	Liability $804,801
To the National Australia Bank Ac no …33 Secured by mortgage over the wife’s interest in the R Street, Western Australia property	Liability $35,638

26.As such, the joint liabilities that are agreed total $1,361,467.

27.It was agreed that the wife has the following liabilities.

To  the National Australia Bank Ac no …13 Secured by mortgage over the wife’s interest in the C Street, Western Australia property	Liability $613,650
To the National Australia Bank Ac no …05 Secured by mortgage over the wife’s interest in the C Street, Western Australia property	Liability $404,801
To the National Australia Bank Ac no …33 Secured by mortgage over the wife’s interest in the M Street, Queensland property	Liability $80,426
To  the National Australia Bank Ac no …07 Secured by mortgage over the wife’s interest in the M Street, Queensland  property	Liability $218,084
To  the National Australia Bank Ac no …725 Secured by mortgage over the wife’s interest in the R Street, Western Australia property	Liability $61,193
To Ms Z Borrowed to pay legal costs	Liability $20,000
To Ms G Borrowed to pay legal costs	Liability $30,000

28.As such, the wife’s liabilities that are agreed total $1,428,154.

29.The wife asserts that she also has another liability to the National Australia Bank in respect of account no …97 for the amount of $30,753. The husband does not accept this. I shall return to this issue.

30.The husband asserts that he also has the following liabilities. The wife does not accept that the husband does actually owe these people money.

Debt owed to his friend and business associate Mr FD	Liability $906,727
Debt owed to his friend and business associate Mr BN	Liability $150,000
Debt owed to his brother Mr P June	Liability $124,995
Debt owed to his friend Mr Y	Liability $40,000
Debt owed to X1 Limited	Liability $1,125,525

31.The husband’s alleged liabilities that are not agreed total $2,347,247. I shall return to this issue.

32.The parties agree that the husband had paid $972,202 in legal fees up to the time of the trial.

33.The wife asserts that she had paid $295,377 in legal fees up to the time of the trial. The husband does not accept that. I shall return to this issue.

The history of the parties’ marriage relationship

34.There was an appreciable amount of disagreement about the history of their relationship in their evidence. There is no doubt though, that they met in 1993 in South East Asia. The wife was around 26 years of age at the time and the husband was around 38 years of age. Both of them were already married to other people. Neither of them had any children at that time.

35.The husband was working in South East Asia with a resources company, providing his services as a consultant in respect of restructuring that company. He travelled to that country for that work regularly and frequently throughout 1992, 1993 and 1994. The company that was operating in South East Asia was, at one point, partly owned by an Australian resources company of which the husband was a director. 

36.The wife was living, at the time, in South East Asia with her husband, who was working for the resources company there. She was not in paid employment.

37.The husband and the wife began a close personal relationship soon after they met. They began spending time with each other when they could, maintaining a sexual relationship.

38.The wife arranged a holiday in Europe with friends in mid-1993. She told the husband about this. He told her he was going to be in Europe at the same time. The wife’s travel plans were brought forward and she flew to Europe with the husband and they stayed together in London before travelling together to various European destinations where they stopped for a while before going on to Monaco, doing a little more travel and then returning to London. They parted company there for a while, with the wife joining her friends and sister for more travel around Europe that included a stay in the husband’s rented apartment in Monaco.  The husband and the wife spent some more days together though in London, later in 1993, before the wife returned to South East Asia. She and the husband met up again a couple of times that year to carry on their relationship.

39.In late 1993, the wife and her first husband left South East Asia and went to Perth to live. Soon after their arrival, the wife told her first husband of her relationship with the husband and she and her first husband separated.

40.The husband’s own marriage with his first wife also foundered around the same time. Their relationship as husband and wife ended in early November 1993 and they ceased cohabitating on or around 6 January 1994.

41.The relationship between the husband and the wife continued and quickly strengthened. They spent time together when they could, usually in Perth, at the husband’s brother’s unoccupied house. The husband was still travelling a lot, particularly to South East Asia, so the husband and the wife’s time together was intermittent in the first half of 1994. Their time together in Perth included boating trips on the husband’s motor boat that was moored in Perth, that he called “[SSS]”.

42.The wife obtained employment in Perth early in 1994 in an unskilled, administrative position. In late April, 1994, she gave that employment away and she left Australia for travel. The husband and the wife travelled together in Europe and they were later joined by one of the wife’s friends from Perth. They travelled to Monaco and spent time holidaying around the western end of the Mediterranean Sea on a different motor boat that was also named “[SSS]”. The wife believed that boat also belonged to the husband. The husband says it did not. They visited various countries during this time.

43.The wife returned to Perth in mid-August in 1994. The husband allowed her the continued use of his brother’s unoccupied home in Perth. The husband had, by this time, commenced property settlement proceedings with his first wife in the Family Court of Western Australia. Documents that were filed in those proceedings reveal that matters between him and his first wife were not all friendly and amicable during this time, even though the husband said that they were.

44.The husband spent time in Perth from time to time in the latter part of 1994. He spent that time with the wife at his brother’s house where she was living. He wrote that address on his Australian passport, that issued on 16 September 1994, as his address in Australia. The husband and the wife also spent time together on the husband’s Perth moored boat “[SSS]” and in the company of other friends and business associates of the husband.

45.The husband first provided the wife with a Westpac credit card for her use during this time, as she was not working anymore and had no income support. It had a credit limit of $25,000. He met all repayments on that credit card account from then until the card was cancelled by him, 15 years later, in 2009.

46.The wife was born overseas. She lived overseas until the age of ten. At that age, she moved with her family to Australia. She had never actually acquired Australian citizenship. Apparently, in late 1994, she could not travel out of Australia without putting at risk her lawful right to continue to live in Australia. The husband was still travelling extensively internationally, including to South East Asia, but he was also travelling to the United States as part of an international sporting competition. The husband was involved in the management of the Australian team. He had himself been a member of a successful Australian team, competing previously in that particular international sport.

47.The wife obtained Australian citizenship in late March 1995. She was issued with an Australian passport immediately thereafter and flew out to the United States to join the husband there. They were together there for a couple of months. The husband had arranged private health insurance cover for the wife before she left. They travelled together to some other international destinations, including Barbados in the Caribbean Sea, during the time they were based in the United States. After the sporting competition was finished, they travelled on to Europe for the northern summer. During their time in Europe that summer, they lived on the other, Mediterranean based motor boat called “[SSS]”, principally in Spain, where it underwent some refurbishment.

48.The wife returned to Perth in November 1995. The parties spent Christmas together in Perth that year, celebrating it with their families at the property of the husband’s brother. In early 1996, the wife went back to Europe, to the boat “[SSS]”, and lived on it, whilst it was still being refurbished, until late March. She returned to Perth and went boating with the husband, on the Perth “[SSS]”, off the Western Australian coast, a trip that was made by them at around the same time of year on several occasions up until 2006.

49.The husband and wife then went back to Europe and spent most of the northern summer of 1996 together. One of the wife’s Australian friends visited and spent time with them on the other boat “[SSS]” in Europe. Friends of the husband also visited and holidayed with them on the boat in the Mediterranean. The wife returned to Perth in late October with the husband, but he went off again on international business travel soon after. An apartment in Perth was rented for six months from November 1996 and the husband and the wife had Christmas together there.

50.In early 1997, the wife travelled overseas to meet up with the husband, returning to Perth again in March. In May, she went to Europe again to meet up with the husband and spent about five months there. Around October 1997, the wife learned she was pregnant. After the husband arrived in Perth soon thereafter, the wife asked him to marry her. He told her he would not marry her just because she was pregnant.

51.That pregnancy miscarried in January 1998, whilst the wife was in Perth.   The couple were staying at the husband’s house at A Street in Perth at the time. The wife stayed there, recovering, until she returned to Europe in June 1998. She returned to Australia again in November that year and, by that time, was pregnant again.

52.The wife went back to the husband’s A Street property but, unfortunately, miscarried again around Christmas that year. She left Australia again in February 1999 to be with the husband, returning for a while in March. She stayed at the A Street property again until July 1999 before again heading to Europe to be with the husband. She returned to Perth and the A Street property before Christmas 1999, which was spent there with the husband. She stayed in Perth until March 2000, went overseas again, then returned to Perth in April 2000. She then went back to Europe to join the husband in June 2000 and returned to Perth around the end of August before travelling to London. The couple married in a small civil ceremony in London in late 2000. They had family and friends from various parts of the world attend the wedding.

53.They returned to Perth in December 2000, and spent Christmas together again at the A Street property. The wife stayed there until May 2001 before travelling back to Europe. She came back around late August before going back to Europe to join the husband. She returned in December 2001, staying until May 2002, before going back to Europe again.

54.An apartment in London had been purchased by this time and the couple lived there when in London from that time on.

55.The wife did not accompany the husband back to Perth for Christmas in 2002, as she was suffering from a health problem and wished to avoid the Australian summer sun. She flew back to Perth in early 2003 and she stayed through the Australian winter at the A Street property. The husband stayed there with her on several visits through that period. The wife travelled to join the husband in October that year and they returned to Perth and spent Christmas together there in 2003.

56.The couple’s relationship began to experience difficulties around this time. It seems the wife tired of travelling as frequently as the husband travelled and, particularly, spending as much time in the southern and northern summers as she was. It seems they could not agree upon an arrangement in that regard that totally agreed with them both.

57.In early 2004, there were, during the time the husband was with the wife in Australia, some occasions when the wife left the husband at the A Street property after disagreements they had and she stayed away from him for a few days at a time. In or around March/April 2004, the husband learned that the wife was having an extra-marital relationship in Australia whilst he was out of the country. There is, however, substantial disagreement between the parties about the particular facts surrounding this discovery.

58.The husband asserts that the couple “separated” in the period soon after that revelation. The wife does not accept that and asserts that their relationship as a couple did not end until April 2007. There is agreement though that they did travel together from Perth to Sydney then on to the USA, Canada and London in July and August 2004. After the wife returned to Australia from that trip, she never travelled overseas again with the husband and although the husband was back in Perth for Christmas that year, they did not spend it together.

59.However, there is evidence that the couple certainly did spend time in each other’s company at the A Street property and on the Australian motor vessel, “[SSS]”, on occasions in late 2004, 2005 and 2006. There is evidence that suggests there was still affection between them when they got together, including evidence that they slept with each other on occasions during those years. However, there is no doubt that both of them entered into new emotional and sexual relationships with other people during that same period.

60.Indeed, the husband soon entered into a relationship with the woman to whom he is now married and with whom he now has two children. At the same time, the wife entered into a relationship with a woman that lasted around two years and with whom she lived in Brisbane for a while, returning alone to Perth from time to time to be there when the husband was visiting from overseas.

61.The wife’s relationship with that other woman ended badly in early 2007. At around that time, the wife caused a protection order to be obtained from a Brisbane Magistrates’ Court under Queensland domestic violence family protection legislation; the other woman being the respondent from whom the wife was seeking protection and with whom the protection order application noted she had been cohabitating for two years.

62.During this period between 2004 and 2007, the husband continued to completely financially support the wife. He also assisted her to purchase her interests in several real properties in various parts of the country that she still owns.

63.The husband and wife’s relationship though, however it was characterised -  whether as a separated couple who remained closely attached or as a married couple who were both otherwise simultaneously in de facto relationships -  clearly continued to deteriorate and was, by early 2007, completely ended. There is, at least in my view, no doubt that they were finally separated, as that term is understood, by April of 2007.

64.Notwithstanding that fact, the husband continued to financially support the wife, only cancelling the credit cards that he supplied her with and totally paid for in early 2009. Attempts were then made by the two of them to finalise their financial affairs. Additional properties were bought by the wife with the financial assistance of the husband who clearly considered it part of the process of finalising financial matters between them. A financial agreement, also supposedly giving written expression and legal effect to the finalisation of their financial affairs pursuant to Part VIIIA of the FLA, was entered into in 2008 by them. However, the wife, at least, had received apparently correct legal advice, prior to its execution, that the written agreement was not sufficiently correct in form to be binding under the FLA and, despite signing it, accepts she had no intention to be bound by it when she did sign it.

65.The marriage of the husband and wife was dissolved by decree in September 2009.

66.Ultimately, unable to extricate themselves from what remained of their entwined financial relationship, the wife commenced these proceedings in 2010. Numerous interim applications were heard and determined prior to the matter coming to trial, but by one set of interim orders made in this Court, the husband was ordered to continue to service all of the loans secured by mortgages over the various real properties in which the wife has interests. He did that until the trial in October 2011 and he would, I expect, have been doing that to this day.

What findings do I make about the commencement and termination of the relationship?

67.I am quite satisfied, on a consideration of what I consider are largely undisputed facts, that prior to their marriage in October 2000, the husband and the wife’s relationship was a de facto relationship, as that term is now defined in s 4AA of the Family Law Act, and that their relationship became one that would meet that definition sometime in 1994, most certainly by the time the husband was providing the wife with complete financial support.

68.As to the end of the relationship, I am quite satisfied that their relationship changed quite dramatically in or around the middle of 2004 and that neither party felt constrained any longer by a commitment to marital monogamy. I am, however, not convinced that complete separation, being the effective breakdown of the marital relationship, did occur at that same time. I am satisfied that April 2007 actually marked the point at which both parties felt that nothing bound them together as a couple any more, save for their remaining financial ties and obligations.

69.In any event though, I am not being asked to determine a relevant jurisdictional fact such as the establishment of twelve months separation for the granting of a dissolution of marriage or the ending of a de facto relationship after the date on which the Court’s jurisdiction to make orders in respect of financial aspects of de facto relationships commenced. In these proceedings, the precise date of the parties’ actual separation, as that term is understood to be defined for Family Law Act purposes, does not much matter, in my view. It is the consideration and weighing of matters such as the parties’ respective contributions, as required by s 79(4)(a) to (c), rather than the mere measuring of time during which they are regarded to have been a married couple, that is required in order to determine what, if any, property settlement orders should be made.

70.Ultimately, I am satisfied that their relationship as a de facto couple and then a married couple endured for around 13 years but that there was a significant change in their mutual commitment to the relationship after about 10 years. That said, I do not accept that either party acted entirely consistently with an intention to be completely separated from the other during that three year period although neither was faithfully emotionally committed to the other in a monogamous sense. To the extent that each party offers contrary positions, I do not accept them.

Determination of the Disputed issues in respect of the identification of the parties’ interests in property and the values applicable to that property

The husband’s share options

71.The valuation report of TG UK was, by agreement, tendered into evidence at the very end of the trial. It became exhibit 71.

72.In a table in paragraph 2.1 of the report, the share options that were valued are included. There were three option tranches in the company GM plc, and two option tranches in the company LA Limited, that were valued. The market values of the share options as at 29 September 2011 were set out in paragraph 2.3. The total market value of all five share option tranches was considered to be £303,792. At paragraph 2.7 of the report the joint experts say:

We have adjusted the valuation to allow for the effect of tax on any financial gain [the husband] would obtain by exercising the options. The documentation indicates that [the husband] would be liable for income tax as well as employer and employee National Insurance Contributions (NICs). This is discussed in Section 4. At current rates of tax and assuming the highest marginal rate of income tax applies (50%), the effect of income tax and NICs reduces the value of the options by 58.9%, and this is allowed for in the figures above and the sensitivity analysis that follows. Note that if the impact of Mr [June’s] potential tax liability is ignored the total option valuation increases from £303,792 to £739,153.

73.At paragraphs 4.32 – 4.34 under the heading ‘UK Tax Liability Arising from Exercising the Options’ the joint experts say:

Our understanding is that the options granted to [the husband] stipulate that on exercise of the options the liability for employer National Insurance Contributions (NICs) is transferred to [the husband]. In addition, [the husband] is liable for employee National Insurance Contributions and income tax. Assuming that tax at the current rates of:

·2% in respect of employee NICs;

·13.8% in respect of employer NICs; and

·50% in respect of income tax at the highest marginal rate

apply, then every £100 gain on exercise of the option will lead to a tax liability of £58.90 (ie 13.8% x £100 + 50% x (£100 – £100 x 13.8%) + 2% x £100 ).

Our tax calculations is [sic] on a number of assumptions. In particular:

·The rates of tax outlined above apply at such a time as [the husband] chooses to exercise the options;

·[The husband] is liable for UK NICs, and

·The employer has passed on the cost of tax and UK NICs to [the husband]

Although it may be possible to mitigate this tax liability, in the absence of being able to do this and based on these tax rates, the effect of the tax liability included in the option is to reduce the option valuation by 58.9%.

74.For the wife, it was submitted that the experts’ acknowledgment that it may be possible to mitigate the tax liability, combined with the husband’s own evidence that the only place he has paid tax is in Australia, supports the position that the potential tax liability provided for in the valuation should be ignored. It was also submitted that such “is the proper approach where there is no evidence of the need on the part of the husband to sell the shares once acquired under the options: Rosati [1998] FamCA 38, G v G [2001] FamCA 1453 and Brett-Hall [2006] FamCA 712.

75.I respectfully reject that submission. I do not understand the joint experts’ report to be saying that the potential tax liability only arises on the sale of any shares that are purchased on exercise of the options. On the contrary, I understand the experts to say that the potential tax liability relates to the actual exercise of the options and the acquisition of the shares. I read paragraphs 2.7 and 4.32 – 4.34 of the report to say that it is at that point, not the subsequent sale of those shares, that the potential tax liability arises.  Accordingly, I do not consider that the question of whether the husband would need to sell any shares he would acquire under the options is required to be answered.

76.No submission was made for the husband in respect of the issue of the tax liability. I understand, by that, reliance is simply placed on the contents of the report itself. On the face of the report, the experts have said “the documentation indicates that [the husband] would be liable for income tax as well as employer and employee National Insurance Contributions (NICs).”  Although the experts who provided the report acknowledged that it may be possible to mitigate the tax liability that would arise on the exercise of the options, there was no cross-examination of them by counsel for the wife in which this issue was explored in any way. Neither was there any cross-examination of the husband going to this issue. Whilst the evidence is that the husband has only paid tax in Australia, I cannot conclude from that alone that he would be able to avoid the potential tax liability that the joint experts in their report have indicated exists in respect of the share options “on the documentation”. I do not intend to ignore that potential liability.

77.For the husband though, it was submitted that there is no evidence that the 400,000 share options in GM plc included in what the experts listed as the first option tranche that had an expiry date of 17 October 2011, which was during the course of the trial, were actually exercised by the husband. The experts gave that tranche a value of £145,470, allowing for the potential tax liability. The submission for the husband was that the total value attributed to the share options should, therefore, be reduced by that amount.

78.With respect, I also reject that submission. Paragraph 4.28 of the report makes it clear that the experts were briefed with information suggesting concerns on the part of the husband that he would be unlikely to have the funds available to pay for exercise of the options. Indeed, the joint letter of instruction to the experts dated 13 April 2011 that is Appendix B to the report includes, at point 9 on page 2, that very suggestion, along with a request for the experts to comment upon the consequences were he not to have the funds required to exercise the options. The experts dealt with that in paragraphs 4.29 – 4.31 of their report. They considered it to be of little consequence given the likelihood of the husband being able to secure short term borrowings on presentation of evidence of the options held, that he could repay on the immediate sale of the shares acquired on exercise.

79.In the light of that issue being flagged, no doubt by the husband’s legal representatives, as early as April 2011, I have no doubt that evidence would have been given by the husband had he not intended to exercise the first tranche of the options. Indeed, I have no doubt that the husband would have sought leave to give further evidence in affidavit form or even orally upon the tender of that report at the end of the trial if he had actually not exercised the options in the first tranche by the expiry date of 17 October, 2011. I do not accept that the husband and his legal representatives would have simply let that matter go and taken the risk of a submission that there was “no evidence” that the options were actually exercised by the expiry date persuading the Court not to include the value of that option tranche, if the right to exercise the options had expired unexercised.

80.I intend to include in the list of items of property owned by the husband the share options in GM plc and LA Limited at the value of £303,792.  The parties have agreed that the exchange rate to apply to that sum to determine the Australian dollar value is 1.61. Counsel for the wife included the share options in the list of items of property in his submissions at £515,776. Frankly, I have no idea as to where that figure comes from. It certainly does not come from paragraph 2.7 of the experts’ report as the footnote to the entry in the submissions suggests. I will give the share options owned by the husband the Australian dollar value of $489,105.12.

The A Trust

81.The net value of the balance sheet of the A Trust is only $68,774. In the overall disposition of this case, that is not a lot of money. However, the dispute about this issue took up a lot of the trial time. The husband says that the trust is a financial resource to him, for, as a matter of law, he does not control the trust and has no interest in its assets other than as a member of a class of beneficiaries who may potentially benefit from the exercise of the trustee’s discretion to distribute income or capital of the trust. The wife argues that the rights, powers or privileges of A Investments as trustee and the persons appointed as appointors are a matter of appearance only, or of form rather than substance, and that the reality is that the husband controls all aspects of the trust. The consequence of such a finding, submits counsel for the wife, is that the net assets on the trust’s balance sheet are to be considered as property of the husband in the property division.

82.At the end of the submissions made for the wife, the relief sought by her is set out. She seeks to keep the real properties in which she has interests along with the “associated debt”. She seeks to retain other assets and debts that are in her name and possession. She seeks a transfer of the husband’s interest in the A Street property and, finally, she seeks an order that the husband pay her a cash sum of $10,000,000. Significantly, she has made no application to compel the directors of the trustee company or the husband, in his capacity as director of that company or any other capacity,  and/or the company itself as trustee of the trust, to do anything in respect of any of the assets of the trust that are under their control.

83.The issues in respect to the A Trust are then, at least as I see them, the determination of what interest the husband and/or the wife have in the net assets of the trust, the value (if any) of any such interest and just how that is to be considered in the overall determination of whether it is just and equitable to make orders and, if so, the nature of the orders to be made.

84.The husband is not and never has been an appointor of the A Trust. As such, he has no legal authority to replace the trustee of the trust. He has always only been one of the directors of the trustee company, although never a shareholder of that company. He has always been a capital and income beneficiary of the trust. The wife, having been married to the husband who is a capital and income beneficiary is, pursuant to clause 1(1)(c) and 1(1)(h)(iii) of the trust deed, also an income beneficiary. Neither the husband nor the wife has any legal interest in the assets of the trust. As beneficiaries or, rather, as members of the class of objects of the discretionary powers conferred on the trustee, they each have a right in equity to due administration of the trust.[10]

[10]See Kennon v Spry (2009) 251 ALR 257 per Gummow and Hayne JJ at [125] and the cases cited by their Honours therein, and also per French CJ [75], [77] – [78] and [81].

85.In Kennon v Spry[11], Gummow and Hayne JJ held that such a right was “property” that could be included in a party’s property for the purposes of the FLA, adding that it was:

important to recognise not only that the right of the wife was accompanied at least by the fiduciary duty of the husband to consider whether and in what way the power should be exercised, but also that, during the marriage, the power could have been exercised by appointing the whole of the trust assets to the wife.

[11](2009) 251 ALR 257 at [126].

86.French CJ, whilst also acknowledging that such a right is an equitable chose in action which has been treated as property for the purposes of the Bankruptcy Act 1966 (Cth), went on to observe that such a right “coupled with” the other spouse’s right (if it exists) to appoint the assets of the trust to the first spouse or to himself, can, in circumstances where the assets of the trust have been acquired by or through the efforts of that party, either before or during the marriage, constitute “property of the parties for the purposes of s 79”. His Honour did acknowledge, along the path of reasoning to that conclusion, that it would be difficult to value the beneficiary’s right if the beneficiary “does not control the trustee directly or indirectly”.[12] It seems, by his conclusion,[13] that his Honour did not consider the valuation of that which he determined would constitute “property of the parties for the purposes of s 79” would be difficult.

[12]         See Kennon v Spry (2009) 251 ALR 257 per French CJ at [57], [75], [77] – [78] and [81]

[13]         Supra at [81] – where he clearly accepted the valuation of the net assets of the trust as appropriate

87.I respectfully observe that French CJ had, along that same path of reasoning, also seemingly approved[14] the Full Court’s application as a statement of principle[15] of the proposition that:

…[T]he question whether the property of the trust is, in reality, the property of the parties or one of them…. is a matter dependent upon the facts and circumstances of each particular case including the terms of the relevant trust deed.

[14]         Supra at [57] – calling it a “perhaps unremarkable proposition”

[15]         In the Marriage of Goodwin (1990)14 Fam LR 801 at 805

88.There is no doubt in this case that the assets of the A Trust have been acquired by or through the efforts of the husband before, during and since the marriage to the wife. It is difficult to see, on the evidence, how anyone could argue that he has not always regarded and treated the trust and its assets as his, to be utilised to his own benefit and the benefit of those others upon whom he wished to bestow generosity, such as his family members and friends. Furthermore, it is difficult to understand how anyone could argue that it was anything other than intentional on the part of the husband that, on the creation of the trust, and since its creation, he has never been put in a position of actual legal control of the trust by making himself appointor and/or sole trustee and/or sole director/shareholder of the trustee company. It is, in this case, neither possible nor necessary to determine the reasons why the husband has elected not to do that. However, it is, I am satisfied, absolutely clear that the husband actually controls the A Trust as a matter of fact, as opposed to a matter of law.  All of the evidence going to the history of the A Trust from its inception until the trial persuades me of that. I am satisfied that, if the husband wanted to, he could cause the trustee to be replaced, even though his mother and sister are the lawful holders of that power to replace the trustee. I am satisfied that the husband’s mother and sister would act according to the husband’s direction in this regard and that they would not have been made appointors if the husband was not satisfied of that himself.  I am also satisfied that distributions of income and capital could be made according to the husband’s direction even though he is only one of two directors of the trustee company.

89.It is submitted for the husband that the line drawn by the legal right of control of the trust marks the boundary beyond which the determination of whether or not the property of the trust is property for the purposes of s 79 cannot go. I do not consider that to be the correct position following the High Court’s decision in Kennon v Spry. I consider that the net assets of the trust, coupled with the husband’s actual control that would allow him to cause those assets to be appointed to himself or his wife along with his and her right to due consideration constitute property of the parties for the purposes of s 79 and can be considered as property. I am satisfied, in the circumstances, that the appropriate value to attach to that property in the course of the discretionary determinations that I must undertake is the value of the net assets of the trust, namely $68,774.

90.If I am wrong on that point, then the husband’s concession that the trust is a financial resource to him applies in any event. Although no submission was made as to just what that actually means to the husband, I suspect that is because of an acceptance on the husband’s part that he does actually, as a matter of fact, control that trust and that one could safely treat it as a resource from which he could benefit, potentially even to the entire net value of the assets of the trust.

The shares in the company, LA Limited

91.The determination of this issue in dispute is very much connected with the determination of the disputed question of whether or not the husband has an interest in X1 Limited. The wife argues that X1 Limited is the husband’s company, so that its assets are truly his. The husband says this is not true. The wife says that the husband owns shares in LA Limited but the husband says X1 owns them. Clearly then, if a finding is made that X1 Limited is the husband’s company then it matters not whether the husband or that company own the LA Limited shares, as their value would be included in determining the value of the property of the husband. Accordingly, I consider it convenient to determine the X1 Limited issue first and to return to this issue later.

X1 Limited

92.The company, X1 Limited, was incorporated in the British Virgin Islands (“BVI”) in April 1992. That much is confirmed by a search of that Caribbean country’s Registry of Corporate Affairs that was in evidence. The husband describes this company (that I will refer to as “X1” from this point) as a private investment company.

93.A search of the records of the British Virgin Islands Registry of Corporate Affairs in respect of any BVI registered company does not reveal the company’s directors or shareholders. That is because, it seems, companies that register in the BVI are not required to register any details of their directors or shareholders. Additionally, they are not legally obliged to file annual returns. Clearly, I am of no doubt, such absence of regulatory requirement must make the BVI a haven for the registration of companies owned and operated by people who do not want others to be able to ascertain ownership, control and financial performance of the companies.

94.The husband says that the company was incorporated by his long-time good friend and business associate (who he knew for about ten years before the date of incorporation), English man, Mr FD. Mr FD was a witness for the husband. He says he did incorporate X1, but there was no document put into evidence that confirmed that. The husband agreed that he had not seen any such document.

95.Mr FD says he incorporated the company as a “pro-active” investment company. He says it is a company that primarily invests in early stage companies and where X1’s expertise “contributes to the value of the company which is eventually reflected in the increased sale or IPO [Initial Public Offer] price at a later date”.

96.The husband had been a legal professional specialising in corporate law in Perth in the early 1980’s. … He joined the D Company in early 1983. The husband says he “headed” the D Company’s business development or mergers and acquisitions group that was responsible for the company’s Australian and international business expansion. He says he remained with the D Company until “late 1991 or early 1992”, which was around the time the D Company financially collapsed and was dismantled, with some former senior employees of the group as well as its founder, Mr D, subsequently being dealt with for various breaches of the law.

97.Mr FD says he suggested to the husband, at around that time, to consider moving to Europe to live and work, later suggesting that he move to Monaco to live. The husband says he is a resident of Monaco and he has a Certificate of Residence issued by the Principality of Monaco certifying that he began residing in Monac in mid 1992. The husband commenced residing there, he says, following the advice of Mr FD.

98.There is evidence, put before the Court by the wife, that the husband was a director of an Australian company, N Company, in late 1992 but the husband, who said nothing about that in his evidence in chief, says that in late 1992 he commenced working for X1 as a consultant and has worked for X1 as a consultant ever since. He says that the company’s business involves “managing investments, corporate restructuring and consulting on investment and corporate restructuring to various companies” and that the company has “a portfolio of various investments and assets”. He says that he initially assisted Mr FD with corporate restructuring activities and strategic investments but became more involved with the company during the mid- 1990’s, over time assuming more of the responsibility for the work. He says that in 1999 he became a director of X1 and assumed the role of Principal Consultant doing this work for the company.

99.The husband says that his resignation as a director of X1 was requested in early 2010 following “discussions with the rest of the Board.” He resigned as a director on 17 May 2010, less than a month after these proceedings had been commenced by the wife.

100.The husband put into evidence an affidavit of a lawyer, educated and qualified in England, who resides and practices in the BVI. He expressed the opinion that a former director of a BVI incorporated or registered company has no rights to obtain access to any books and records of a company he was a former director of, whereas, unsurprisingly, he would if he was a director.

101.I am quite satisfied that the husband’s resignation as a director of X1 and several other companies, after the commencement of these proceedings, was effected not for the reasons advanced by the husband and those of his witnesses who gave evidence about the matter, but so that he could not be required to obtain access to any of the records of the companies that directors lawfully have access to. That he did so resign after being put on notice by the solicitors for the wife that he should not do so gives me added cause for such satisfaction, on the balance of probabilities.

102.The husband says of the consultancy fees that he says he is paid by X1 for his services that they “are generally estimated following the end of the prior financial year and are dependent upon the financial results and the company’s position at the end of the financial year.” He says:

After a broad assessment of my performance, my contributions to the company and the general outlook, my remuneration is settled in an informal dialogue with [the company’s] management.

The income I receive for my consultancy involves a minimum or base amount and the remainder is variable and negotiated and determined by the directors after an assessment of both my performance and the company’s financial position and its ability to pay me a consultancy fee that may include a bonus element.

103.Even though there is no obligation to register details of the directors and shareholders of X1 in its place of incorporation and registration, and those details cannot be found by search of that place’s corporate affairs registry, the husband deposed to the following in his affidavit evidence:

(i)the company’s [[X1]] sole shareholder is Q Trustees SA, as trustee for the X Trust;

(ii)he did not at the time of swearing his affidavit [August 2011] have, nor did he ever have a position in Q Trustees SA;

(iii)he did not at the time hold any trust deeds or other documents for Q Trustees SA;

(iv)he did not at the time have any beneficial interest as a shareholder, a partner, or by virtue of any other relationship, in any company or other corporate entity, trust or other vehicle or entity through which he might have in an indirect way any beneficial interest in X1 or in Q Trustees SA or the X Trust;

(v)that X1’s directors at the time of swearing his affidavit were Mr FD, Mr BN and Ms EE. 

104.The husband also agreed under cross-examination during the trial that:

(i)he had not disclosed any document that would establish who the directors of X1 are;

(ii)the shareholder of X1 could not be verified by a search;

(iii)he had not disclosed any source document establishing the shareholder of X1, nor any of the persons said to be directors of X1 who were witnesses for the husband;

(iv)he had never seen the share register of X1;

(v)he had never had a copy of the share register of X1;

(vi)he had not disclosed a company search of Q;

(vii)he did not know who the shareholders of Q are;

(viii)what he swore about never having had a position with Q was not something that could be verified by a search;

(ix)he had not disclosed a copy of the X Trust [deed];

(x)he had never read a copy of the X Trust Deed;

(xi)the X Trust Deed is not exhibited to any of the affidavits relied upon by the husband;

(xii)the ultimate beneficiary of the X Trust is not disclosed in any of the affidavits relied upon by the husband;

(xiii)there is no affidavit from any person who says that they are the ultimate beneficiary of the X Trust, and that the husband works for them.

105.Significantly, the husband also put into evidence an affidavit of a lawyer, educated in France, qualified in Monaco, who resides and practices in Monaco. That lawyer expressed the opinion that Section 308 of the Monaco Criminal Code and professional secrecy obligations imposed upon the husband as a consultant to X1 expose him to a risk of penal sanction in Monaco if he disclosed information about the company in breach of those professional secrecy obligations, even if the disclosure was done under compulsion by reason of the laws of Australia.

106.The husband gave evidence that Mr FD told him, and requested an acknowledgment from him of the fact that X1 and its directors are constrained by European and Monaco laws from disclosing to anyone, information belonging to third parties. The husband, when asked questions about X1, and the assets it holds, by counsel for the wife in cross-examination during the trial, said that on legal advice, he was not at liberty to disclose that. Senior Counsel for the husband submitted that was effectively an objection to giving the evidence based on s 128 of the Evidence Act 1995 (Cth) and also pursuant to the common law privilege against self incrimination. I heard argument on the point at the time and decided, on the evidence that was before me at the particular time, that there were reasonable grounds for the husband to object to giving the particular evidence sought to be adduced from him by the question asked.

107.However, I made it absolutely clear in the reasons I gave for my determination at the time that if I ultimately found that the assets of X1 are actually the husband’s then the husband’s objection to giving the evidence could not be regarded as being truly reasonable. Such a finding would inexorably lead to a finding that the husband has failed to meet his disclosure obligations in these proceedings. I am satisfied that counsel for the husband effectively acknowledged that in paragraph 2.4.5 of their written submissions, where they point out that unless a finding is made that the husband does own or control X1 (and another disputed entity, X2 Ltd)  “there can be no legitimate criticism of him for failing to disclose their records”. Clearly, if such a finding is made, then the criticism of him for failing to disclose the company’s records and its assets must be described as “legitimate” in the context of the disclosure obligations on parties to proceedings for property adjustment orders in this Court.

108.I am left with absolutely no doubt that the husband was entirely conscious of what was at stake in respect of the disputed issue about X1 and what the consequences for him in these proceedings could be if findings were made that he is truly the beneficial owner and ultimate controller of the assets of X1.

109.Even though the husband goes on in his evidence in chief to assert that his relationships with the other X1 directors (his friends and long term associates, FD, BN and EE) have suffered due to clashes with them over investment strategy and because he has been unable to attend to X1’s business with “the level of concentration, time and commitment that they can normally expect from [him]” since these Court proceedings were commenced, and that they requested his resignation as a director in 2010, he nevertheless says that they have allowed him to draw against anticipated future remuneration for “a number of years”.

110.In fact, the husband asserts in his evidence that X1 has provided him with a loan account that it expects to be offset or repaid from consultancy fees and bonuses payable to him in respect of any particular year. At trial, the husband contended that this debt was AUD$1,125,525. In this regard, a letter on X1 letterhead signed by Ms EE on behalf of X1, dated 22 September 2011 was admitted into evidence (exhibit 26). It stated that as of 30 June 2011 the loan account balance was US$1,157,353.73. Counsel for the husband, in their written submissions, converted that to AUD$1,122,633.

111.In his affidavit, the husband said:

(i)he has always relied upon X1’s internal accounting systems to keep track of the amount of his loan balance;

(ii)because of a high level of trust between all the directors there has never been any controversy about the loan;

(iii)X1 retains all the records and systems under its control;

(iv)although he confirmed the amount of the loan as at 30 June 2010 and 30 June 2011 by reference to X1’s records, he does not hold a copy of those records;

(v)when he asked the directors for extracts of X1’s records to prove confirmation of the amount owing, they refused his request;

(vi)when he again requested X1 provide him with an extract of its financial records, his request was again refused;

(vii)he was asked to confirm that he would not further mortgage, dispose of or encumber his “other assets”, in particular the A Street property, without either X1’s consent or prior repayment of the loan account balance;

(viii)the directors have “in effect” limited his future drawings against anticipated fee income and required the loan balance at 30 June 2011 to not exceed $US1,000,000. 

112.In their submissions, counsel for the husband curiously said:

..recognising the limitation on the Husband’s capacity to make disclosure of that account, or its commencement date, some discounting might be applied such that it be accounted for at say, $1,000,000. 

113.Clearly, whilst the existence of this debt is another one of the factual issues to be decided, its existence as a real issue stands or falls alongside the issue of X1. If X1or its assets are truly the husband’s, then there is no basis for taking into account this alleged loan account debt of the husband to the company. If, on the other hand, I find that X1’s assets are not truly the husband’s, then there will be a need to consider this distinct issue of the alleged loan account debt further.

114.Of course, if I accept all of the evidence of the husband and his long-time friends and associates, Mr FD and Mr BN, two of the three current directors of X1, the determination of this significant issue is easy. Acceptance of their evidence would lead to a finding that X1 and its assets are not the husband’s and, therefore, as such, the husband has not failed to disclose any relevant interest.

115.On the other hand, to make such a finding I necessarily must reject a great deal of the wife’s evidence and I must reject it as deliberately and falsely given. I do not consider there is room for another view if all of the husband’s evidence is accepted as truthful. 

What does the wife say about X1 then?

116.The wife, in her affidavit evidence, says that the husband told her sometime in the period soon after they started their relationship:

(i)that, after his experience at D Company, he would only ever work for himself and would never contemplate working for anyone else;

(ii)that a lot of the husband’s colleagues went overseas, including to Monaco to take advantage of the laws in Monaco, including the tax free status and other advantages that the laws of Monaco offered;

(iii)that one of the benefits of being a resident of Monaco is that Australian authorities cannot get any information from Monaco;

(iv)that he did not need an office, just a computer and a phone;

(v)that he was looking for work restructuring resources companies, his work with N Company being an example, and he planned to work like that for other companies;

(vi)that he worked for N Company on the basis that he gets a piece of the company, being shares and share options, and consulting fees;

(vii)that he had a secretary in Monaco, Ms MS, who works for a company, L Investments, that he engages to do administration for him;

(viii)that he has a company called X1 that he used for his consulting.

117.The wife also says the husband told her when they were in Europe together for the very first time:

(i)that he owned a house in the south of France with two other men, one being Mr FD;

(ii)that he had a one bedroom rented flat in Monaco where he pretended to live as “that is what people do, they get a rented apartment there, obtain residence and then live outside Monaco, that being the price of not having to pay tax”;

(iii)that he had a local woman named Ms EE who he paid to come to his Monaco flat to turn the lights on and to do her ironing there, to use the water and the telephone and to have other guests go there so that it appears he actually lives in the flat, as the Monaco authorities conduct an approval process each year by which one retains their residency card and the process involves showing them phone bills, electricity bills, gas and water bills.

118.The wife also says that the husband told her repeatedly and consistently throughout their relationship that “X” was his company. She says that he always referred to it as “my company”. She says that he told many people in her presence that he worked for himself. She says that he never told her at any time during their relationship that he was an employee of X1 or that he worked for the company, owed money to the company or that the company was anything other than his company. She says that he never told her that X1 was a company registered in the BVI or that a company called Q Trustees SA owned X1. She also says that whenever he completed a disembarkation document when they were travelling he would describe his occupation as ‘self employed’.

continues to be by reference to mandatory statutory considerations which:

·Make no mention of “special” or “extraordinary contributions;

·Do not distinguish between the relative importance of financial or non-financial contributions or between direct and indirect contributions;

·Do not mark out any starting point – whether as to equality or otherwise;

·Offer no guidance as to how entirely different types of contributions are to be compared one against the other in arriving at a just and equitable result.[27]

[27]         Swanton & Farnell [2012] FamCA 510 9 at [18].

355.However, against those reminders and the findings made with respect to the wife’s contributions during the marriage, stands the undisputed fact in this case, referred to quite poignantly by counsel for the husband in their submissions, that throughout the entirety of their relationship, the wife was completely financially supported by the husband. Their very comfortable, luxurious lifestyle throughout the years of their marriage was financially provided for solely by the husband. Virtually all of the property that I have found is to be considered in this discretionary process of determining the appropriate property adjustment orders to make, was acquired by way of the direct and indirect contributions of the husband, using money generated and/or contributed by the husband, without any real assistance of note by the wife beyond that already referred to above.

356.The husband’s contributions were more than just this though. He also contributed to the welfare of their relationship. He contributed by way of the provision of companionship, comfort and emotional support to the wife as well as being her sexual partner over the years of their relationship, just as I have found that she did with him. He also extended substantial financial support to members of the wife’s family, including by way of the provision of significant financial assistance for the wife’s mother and the wife’s sister to acquire property interests of their own, as well as permitting their use of property of his from time to time.  

357.Even after giving real weight to the wife’s non-financial contributions during the years of the marriage, I am compelled to find that all of the husband’s contributions during the marriage that are required to be considered pursuant to s 79(4) of the Act were overwhelmingly greater than all of those of the wife and must, therefore, attract far greater weight when I make the “leap” from qualitative evaluation to quantitative reflection that Coleman J has referred to in Steinbrenner & Steinbrenner[28].

[28]Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234], also discussed by Murphy J at [30] in Swanton & Farnell [2012] FamCA 510 9 at [18].

358.Before I undertake that step though, I must still consider and weigh the contributions the parties have made in the several years since their relationship ended.

359.In August, 2007, another apartment was purchased at E Street in South Australia. It was purchased for $350,000 and registered in the sole name of the wife. By agreement reached between the parties, the husband contributed $80,000 from overseas and the wife borrowed $280,000 from the NAB secured by mortgage of the apartment and a personal guarantee given by the husband. The husband also paid the stamp duty and other costs of purchase. He has also paid for renovations done to the apartment since it was purchased. The wife says they came to a total of $15,000 whilst the husband says he paid a total of $49,807 for the renovations. With no further evidence about that issue, I am unable to make a finding as to the actual cost of such renovations paid for by the husband. I do not consider the inability to do so to be material in the overall circumstances of determining and weighing up the husband’s post separation contributions. In addition, the husband has paid the mortgage repayments since the property was purchased.  The wife has retained all the rental income received for renting out the property.

360.In the middle of 2008, another property was purchased in C Street, Western Australia. It was purchased for $1,330,000 and also registered in the sole name of the wife. An amount of $1,050,000 was borrowed from the NAB, apparently in joint names, and a further $310,000 was borrowed solely in the name of the husband. The deposit of $30,000 and the stamp duty of around $65,000 were paid by the wife from funds to which she had access. The husband paid for furniture that was put into the property.

361.The wife has rented the property out since it was acquired and retained all of the rental income received. The husband has paid the mortgage repayments since the property was purchased.

362.In respect of the post-separation period, counsel for the wife said in his written submissions that the evidence establishes the following contributions by the wife:

(a)        Dealing with the husband;
(b)        Locating properties to acquire;
(c)        Management, maintenance and improvement of the rental properties;
(d)        Making mortgage repayments to the NAB.

363.I accept that she located the properties that were purchased in Perth and South Australia and that she dealt with the husband in arranging for the purchase and, in particular, the financing of the purchase of the properties.

364.I accept that the wife, having lived in the M Street, Queensland property for most of the time since it was purchased, has been responsible for its cleaning (particularly after the 2011 Brisbane flood), its maintenance, and for painting some rooms. I accept that she arranged for some maintenance work to be undertaken to the South Australian apartment and undertook some painting and damp-proofing work and gardening herself at the apartment. There is no actual evidence from which I can place any value on the work done or the impact any of that work has had on the value of the properties. The wife has, with the primary assistance of commercial rental agents, caused the South Australian and Western Australian properties to be rented out and for that to be managed.

365.I accept that in April 2010, the wife paid an amount of $13,502 to the NAB to remedy default on a number of the loans owing to that bank.

366.The husband’s contributions post-separation were all direct financial contributions. I accept that the evidence establishes that the wife continued to possess and use credit cards on accounts in the husband’s name after the point in time when their relationship finally ended right through until the husband took steps to finalise her ability to use them. Between September 2006 (some eight months before their relationship finally ended) and the point in time when the credit cards were no longer being used by the wife, around $130,000 was spent by the wife on the cards and paid for by the husband. He also continued to pay health insurance premiums for the wife until July 2010 as well as telephone accounts for many thousands of dollars for the wife until December 2010.

367.He made the direct expenditure on the purchase of the two additional properties acquired by the wife after the end of their relationship and has, but for the amount of $13,502 paid by the wife referred to above, paid all of the repayments on all of the loans that were taken out by the husband and/or the wife in respect to the purchase of all of the properties. I am satisfied that amounts, over the years, to hundreds of thousands of dollars. Since October 2010, at least, that has been $21,000 per month. Those repayments, significant as they are, have enabled the properties to be retained to this point in time and the rental income received on them retained exclusively by the wife.

368.Some idea of the value of that rental income to the wife is gained from her 2009 individual tax return that is exhibit 14 in the proceedings. In that document, the wife declared gross rent received of $68,661. Curiously, the wife also claimed deductions against that income that included the sum of $176,296 in interest paid in that year on the various loans used to buy the properties, even though the husband paid all of that interest. Her tax return, including those details, ultimately reflected a loss of $48,550 for the year with no tax payable by her. The document also reflected losses carried forward from the 2007 and 2008 financial years of $25,110 and $83,429 which I consider it is safe to infer came about through a similar process of declaring the rental income and claiming the interest paid on the loans by the husband as a deductible expense against that income. The wife has then, I am satisfied, received a further benefit, by way of the husband’s contributions, of the tax savings so achieved. There is, however, no evidence as to what that might amount to.

369.The 2009 tax return of the wife also reflects that the wife had sold a large parcel of CV shares in June 2009 for $201,000, a capital gain of about $190,000 on their purchase price. It also reflects that about $73,000 of this was used to purchase share parcels in eight other Australian public companies. The wife has said she sold all of her CV shares around this time for $218,000 and that she reinvested half of those proceeds back into shares. She says, and I accept, that most of those have since been sold and the funds used to contribute towards the wife’s legal costs that have notionally been “added back” to the property pool now being considered in this matter.

370.The wife has not worked in gainful employment during the period from 2007 to the trial.

371.The husband continued to work in pursuit of his international business interests since 2007, generating income that has been used by him to make the substantial direct financial contributions that he has made. Additionally, of course he has had, I have found, the use of the sale proceeds of the CV shares identified by Mr BB as sold in that time.

372.Ultimately, I am quite satisfied in respect of this post-2007 period that the husband’s contributions again have been vastly more significant than those the wife has made.

373.That leaves me satisfied, having regard to the contributions of property brought into their relationship, the contributions each made during the marriage and the contributions that each has made in the period of years since the end of their relationship, that there is an overwhelming disparity in favour of the husband that must be reflected in any notional percentage division of the pool of property as between the husband and the wife.

374.In my judgment, a notional division of the property pool I am using to determine the appropriate property adjustment orders that is an appropriate reflection of the significant disparity in their relevant contributions is of the order of 85 per cent to the husband and 15 per cent to the wife. That would see the wife retaining property to the value of $4,759,922 and the husband retaining property to the value of $26,972,889.

Should there be a further adjustment after consideration of the “section 75(2) factors”?

375.Having reached the conclusion that I have in the assessment of the parties’ relevant contributions, I am now, pursuant to s 79(4)(e) of the Act, required to take into account the various matters set out in that sub-section.

376.The husband is 57 years of age and the wife is 45 years of age. They are both in good health.

377.At the time of the trial, the husband had a new wife, a three year old child and a second child due to be born. Those children will be dependent upon the husband for many years, until he is well into his older age. He was working and can safely be expected to continue working in his international business career which the evidence satisfies me has been and is productive of substantial wealth for the husband. I have no reason not to be satisfied that will continue into the future.

378.At the time of the trial, the wife was living in a stable relationship with a partner who was engaged in remunerative employment. She has not worked herself in remunerative employment since 1994 when her relationship with the husband commenced. However, there is no evidence to suggest that she does not have the physical or mental capacity to engage in employment herself. She does not have the care of children whose needs might deflect her from some form of employment.

379.Making property adjustment orders reflective of the notional division arrived at on the contributions assessment would, as I have said, see the wife retaining property valued at $4,759,922 less, of course, that sum which she has already spent on legal fees. That is a very substantial capital sum and, I am satisfied, certainly adequate to meet her future needs, even if she determined not to obtain some form of remunerative employment.

380.For the wife, it is submitted that the husband’s non-disclosure supports an inference that there is yet more property that he has not disclosed. The submission goes on to assert that the Court can be confident that the “iceberg under the water is very large”; which I understand to mean that the Court could be satisfied that there is a lot more property than just that indicatively identified by Mr BB in his report as being X1’s assets  – which I have added to the pool of property against which the contributions assessment, any adjustment considered appropriate and, ultimately, orders will be framed.

381.Counsel for the wife refers to judgments delivered at first instance in this Court which he says are examples of “the quantum of adjustment the lack of financial disclosure should bring”.

382.One of those decisions is Kannis (by his next friend) and Kannis [2002] FCWA 51. Holden CJ determined in that case that he was satisfied there had been non-disclosure by the husband and the husband’s next friend. He was, however, unable to quantify the assets he was satisfied were undisclosed. The ascertained pool of property was valued at around $31,000,000. His Honour determined, where he considered the contributions assessment resulted in a 60/40 notional division, that it was appropriate and just and equitable to adjust by a further 10 per cent of the ascertained pool of $31,000,000 in favour of the wife pursuant to s75(2)(o) of the Family Law Act which allows the Court to consider “any fact or circumstance” the justice of the case requires to be taken into account.

383.The other decision is Lambert v Jackson [2010] FamCA 357. Watts J, having made findings of non-disclosure on the part of the husband that actually resulted in a sum of $80,000 being added back into the pool of property being considered, heard submissions from Senior Counsel for the wife that there ought to be a 30 per cent adjustment that included a 10 per cent adjustment purely on the basis of the non-disclosure finding. Watts J had determined that there was an ascertainable pool of property valued at $4,149,887. His Honour adjusted 20 per cent in favour of the wife taking into account “the effect of the non-disclosure (under s 75(2)(o)” balanced along with the other s 75(2) matters that he had discussed, but made no reference to any particular part of that being specifically in respect of the non-disclosure.

384.Of course, Counsel for the wife was not submitting that these first instance decisions demonstrate that an adjustment pursuant to s 75(2)(o) of the Family Law Act is always required in a case where non-disclosure has been found. They are but examples of how judges exercising the s 79 Family Law Act discretion have approached the task in respect to particular cases involving findings of non-disclosure.

385.With respect to counsel for the wife, I am not persuaded that there should be an adjustment in this case for the non-disclosure, having already included the $22,000,000 indicative value of X1 and the $1,300,000 value for X2 Ltd in the pool being considered and having assessed the wife’s contributions entitlement as against that pool. I am not prepared to say that I am satisfied that there must be a lot of other property that still has not been ascertained for which a further adjustment should be made.

386.Furthermore, having regard to the value of the property the wife will retain if the notional division based on the contributions assessment measured against the $31,000,000 pool being considered is given effect to, and mindful of the use the wife can make of that property to provide ongoing income for her own needs, I am not persuaded that there is a need for any further adjustment called for by considering the matters set out in s 75(2) of the Act.

What orders should now be made?

387.It is appropriate to start this part of the process by observing again what the wife’s property interests already are. They are reflected in the following table:

Real property at F Street, Western Australia	Wife is the registered proprietor	Value $1,487,500
Real property at E Street, South Australia	Wife is the registered proprietor	Value $385,000
Real property at C Street, Western Australia	Wife is the registered proprietor	Value $1,300,000
Real property at M Street, Queensland	Wife is the registered proprietor	Value $930,000
Real property at R Street, Western Australia	Wife is the joint registered proprietor as joint tenants with her mother	Value of half share $377,500
Motor vehicle 5 garaged in Australia	Wife is the owner	Value   $7,500
Motor vehicle 6 garaged in Australia	Wife is the owner	Value  $6,700
Motor vehicle 7 garaged in Australia	Wife is the owner	Value $7,000
Household furniture and chattels, M Street, Queensland	Wife is the owner	Value $ 28,000
Household furniture and chattels in storage in Perth, Western Australia	Wife is the owner	Value $4,650
Shares in publicly listed companies	Wife is the owner	Value $14,775
Money in bank accounts	Wife owns the money	Value   $5,606
Total	$4,554,231

388.The total value of all of these items of property of the wife is $4,554,231.

389.Including the add back of legal fees paid by the wife in the sum of $295,377 takes the wife’s property interests notionally to $4,849,608.

390.The wife also has significant liabilities though. They are:

To  the National Australia Bank Ac no …13 Secured by mortgage over the wife’s interest in the C Street property	Liability $613,650
To the National Australia Bank Ac no …05 Secured by mortgage over the wife’s interest in the C Street property	Liability $404,801
To the National Australia Bank Ac no …33 Secured by mortgage over the wife’s interest in the M Street property	Liability $80,426
To  the National Australia Bank Ac no …07 Secured by mortgage over the wife’s interest in the M Street  property	Liability $218,084
To  the National Australia Bank Ac no …25 Secured by mortgage over the wife’s interest in the R Street property	Liability $61,193
To Ms Z Borrowed to pay legal costs	Liability $20,000
To Ms G Borrowed to pay legal costs	Liability $30,000
Total	$1,428,154

391.Accordingly, not including any of the joint liabilities, and taking into account the notional “add back” of legal fees, the wife has net interests valued at $3,421,454 where she is, in my judgment, entitled to $4,759,922. She is, therefore, entitled to a further $1,338,468 in property. It seems to me that can be achieved by:

(a)The husband being required to refinance all joint liabilities into his own name and causing mortgages of property in the wife’s name securing those joint liabilities to be discharged;

(b)The husband being required to cause mortgages of property in the wife’s name securing liabilities in his own name to be discharged; and

(c)The husband being required to either pay the wife a further cash sum of $1,338,468 or, alternatively, refinance that amount of the wife’s liabilities into sole name and cause the mortgages of property in the wife’s name securing that much worth of liability to be discharged.

392.As I calculate this, the husband will have to refinance $1,891,494 in liabilities that are currently in his sole name or in joint names with the wife and will have to pay the wife (or at least refinance debt equal to) the sum of $1,338,468. Those two amounts total $3,229,962.

393.The husband owns the property at A Street, Western Australia valued at $3,250,000 as well as the boat, “[SSS]” in Perth valued at $400,000. He also is owed $1,067,324 by the A Trust, which I am satisfied he actually controls.

394.The property adjustment between these parties that I consider appropriate can be achieved, I am satisfied, by reference to property situated wholly within Australia. Of course, it will be a matter for the husband to determine himself how he meets the orders that I will make, but on the face of things, I am satisfied that even in circumstances of default there is sufficient property within Australia to effect such property adjustment.

395.In all of the circumstances of this case, I am satisfied that adjusting the parties’ interests in their property in such a way as effects a division assessed to be in proportions as to 85 per cent to the husband and as to 15 per cent to the wife against a pool of property notionally assessed to have a total value of $31,732,811 and by orders that can be effected against the property that is agreed to exist within Australia is just and equitable.

396.Written submissions were made in respect to an application for costs. I do not consider it appropriate at this point to determine the wife’s application for costs. Counsel for the husband correctly submitted, in my respectful view, in respect of the question of costs that “much will depend on various findings of fact and the ultimate order”. I will adjourn the consideration of any application either party presses or makes with respect to costs and make directions with respect to the filing and service of minutes of orders sought, any further evidence to be relied upon and written submissions to be made.

The Wife’s application at outset of trial for an undefended hearing

397.Finally, I refer to an application made by the wife at the very outset of the trial for the trial to proceed on an undefended basis. Application was made pursuant to Rule 11.02(2)(c) of the Family Law Rules 2004 for the Court to proceed to hear the wife’s property adjustment application as if it were undefended.

398.It was submitted that the husband had not complied with his disclosure obligations pursuant to the Rules or pursuant to previous orders of the Court and that, consequently, justice could not be done in the proceedings other than by way of proceeding undefended.

399.Although I was concerned that the evidence relied upon by the wife in support of her application appeared, at first reading, to demonstrate that there might very well have been non-disclosure on the husband’s part, nevertheless I exercised the discretion to dismiss that application at that point.

400.There was no dispute that the discretionary decision to determine a matter as if it were undefended is one to be made only in “exceptional” circumstances. The proceedings had been set for trial over three weeks for several months at that point in time. All of the evidence in chief relied upon by each of the parties had been filed. It was absolutely clear that there was an enormous amount of factual dispute between the parties about many important and relevant aspects of the case, including as to whether or not the husband had property outside Australia that he had not disclosed. There was also much factual dispute about the matters of non-disclosure alleged by the wife that were being relied upon in support of that application for the trial to proceed as if it were undefended.

401.The husband had travelled from Europe to be present for the entirety of the trial. Arrangements had been put in place for witnesses to give evidence during the trial by electronic video link from Perth and from London The husband was represented by Senior and Junior Counsel and experienced solicitors. The wife was represented by experienced counsel and solicitors.

402.I was simply not satisfied, on the evidence relied upon by the wife at that point in time in the proceedings, and in all the circumstances that then presented, that matters were so strikingly “exceptional” as to justify acceding to the wife’s application. I considered that justice would still be best served by proceeding with the trial in the usual manner with procedural fairness to both parties. That is why I dismissed the wife’s application and proceeded with the trial.

403.Now, I make the orders set out at the commencement of these reasons for judgment.

I certify that the preceding four hundred and three (403) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 17 May 2013.

Associate: 

Date:  17 May 2013