Sanderson & Sanderson
[2021] FamCA 342
•28 May 2021
FAMILY COURT OF AUSTRALIA
Sanderson & Sanderson [2021] FamCA 342
File number(s): NCC 1455 of 2015 Judgment of: MCCLELLAND DCJ Date of judgment: 28 May 2021 Catchwords: FAMILY LAW – PROPERTY – Final property orders – Where the parties seek orders for an adjustment of the marital property pool – Where the husband has not complied with his obligation of disclosure or meaningfully engaged in the proceedings – Where the Court finds that the contributions made by the parties during the course of their relationship is equal – Where the Court finds that the wife is entitled to a 15 percent adjustment in her favour as a result of greater initial and post separation contributions – Where the Court finds that the wife is entitled to a 35 percent adjustment on the basis of s 75(2) factors in respect to the husband’s non-disclosure and the wife’s role as sole carer and financial supporter of the parties’ child – Orders made for a 100 percent distribution of the identifiable marital asset pool in favour of the wife Legislation: Family Law Act 1975 (Cth) Pt, VIII, ss. 75, 79
Evidence Act 1995 (Cth) ss. 59, 76, 81, 140(1)
Family Law Rules 2004 (Cth) rr. 13.01(1) and 13.04(1)
Cases cited: Briese & Briese (1986) FLC 91-713
Coghlan and Coghlan (2005) FLC 93-220
Efthidmiadis & Efthidmiadis (1993) FLC 92-361
Farnell and Farnell (1996) FLC 92-681
Goddard Elliott v Fritsch [2012] VSC 87
Graf-Salzmann & Graf [2015] FCWA 68
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Kildea v Kildea (2007) 38 Fam LR 347
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361
Lee Steere and Lee Steere (1985) FLC 91-626
Livesey v Jenkins [1985] AC 424
Manolis v Manolis (No 2) [2011] FamCAFC 105
McGlen-McLeod v Galloway [2012] NSWCA 368
Mills v Mills (1938) 60 CLR 150
Petruski v Balewa (2013) 49 Fam LR 116
Robb and Robb (1995) FLC 92-555
Rodgers & Rodgers (No 2) (2016) FLC 93-712
Stanford & Stanford (2012) 247 CLR 108
Thornton v Telegraph Media Group Ltd [2011] EWHC 1884 (QB)
Whalan v Kogarah Municipal Council [2007] NSWCA 5
Zaruba & Zaruba (2017) FLC 93–776
Carroll, Hugh P K and Kopsen, Robyn Carroll, “The importance of full and frank disclosure in family law financial proceedings and the many consequences of non-disclosure” (2017) 45 Federal Law Review 97
Number of paragraphs: 208 Date of hearing: 22 March 2021 Place: Sydney by web conference The Applicant appearing in person by telephone The Respondent appearing in person by video ORDERS
NCC 1455 of 2015 BETWEEN: MR SANDERSON
Applicant
AND: MS SANDERSON
Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
28 MAY 2021
THE COURT ORDERS THAT:
1.Within 28 days of the date of these orders, the parties do all acts and things to cause the entirety of the funds in both the controlled monies accounts held by G Lawyers to be distributed to Ms Sanderson (“the wife”), and, for that purpose, this Order serve as authority from each of the parties to G Lawyers to release such funds.
2.Within 30 days of the date of these orders, Mr Sanderson (“the husband”) do all acts and things to cause the historic motor vehicle 1 registered in his sole name to be transferred to the wife.
3.As between the parties, the husband remain solely responsible for all liabilities in his name, including but not limited to the following:
(a)Default Order for the husband to pay H Pty Ltd; and
(b)Monies owed to A Pty Ltd.
4.As between the parties, the husband will retain the following motor vehicles:
(a)Motor vehicle 1 (…);
(b)Motor vehicle 2 (…);
(c)Motor vehicle 3;
(d)Historic motor vehicle 2; and
(e)Car Trailer.
5.Other than as herein provided, the parties each be declared the owner at law and in equity of all items of personalty including but not limited to money held in their name, proceeds of bank accounts, furniture and furnishings, jewellery, and personal effects presently in their respective possession and control.
6.Other than as herein provided, the parties each be declared the owner of such superannuation/annuity entitlements, and pension benefits to which each of them is or might become entitled in his or her own right.
7.Other than as herein provided, the parties remain liable for any debts in his or her sole name as at the date of these orders, and, in this respect, shall indemnify and hold harmless the other from any liability in relation thereto.
8.In the event any party refuses or neglects to comply with any of the orders herein requiring a party to execute a deed or instrument, the Registrar or Deputy Registrar of this Court at its Sydney Registry is appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute, in the name of the Husband or the Wife as the case may be, any deed or instrument necessary to give effect to the orders herein, or any of them, and to do all acts and things necessary to give validity and operation to the said deed or instrument.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sanderson & Sanderson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
McClelland DCJ:
INTRODUCTION
This matter concerns an Application for orders pursuant to Pt VIII of the Family Law Act 1975 (Cth) (“the Act”) originally commenced by Mr Sanderson (“the husband”) on 10 June 2015. Despite being the Applicant in the proceedings, it has been extremely difficult for the Respondent, Ms Sanderson (“the wife”), and the Court to engage the husband in these proceedings. This included a situation where the wife, to her credit, agreed to an adjournment of the proceedings for a period of several weeks to enable the husband to file evidence that he intended to rely upon at the hearing.
Despite that period of grace, the husband’s evidence is essentially a reproduction of now historic evidence that he has previously filed in the proceedings. Most significantly, the husband’s Affidavit material and Financial Statement have not properly disclosed his assets, nor the manner in which he has disposed of those assets and how he has applied the proceeds from the sale of those assets.
For reasons which I set out in this decision, taking into account the contribution factors and matters which I am required to consider pursuant to ss 79(4) and 75(2) of the Act, particularly the manner in which the husband has approached these proceedings including his inadequate disclosure, I have determined that it is appropriate for the property of the parties to be adjusted such that the wife receives 100 percent of the identified marital property. Nevertheless, for practical reasons, I have made orders for the husband to retain certain motor vehicles and a trailer which are in his possession. The orders otherwise provide for the parties to retain existing property and superannuation that is in their possession, and to be responsible for satisfying any liabilities that are in their respective names.
BACKGROUND
I will now set out the agreed facts relevant to this matter and, where controversial, the parties’ respective factual contentions.
History of the parties’ relationship
In 1955, the husband was born. He is currently aged 66 years.
In 1973, the wife was born. She is currently aged 47 years.
In 1998, the child from the wife’s earlier marriage, Ms F Sanderson (“Ms F”) was born. She lived with the parties until they separated and is currently aged 22 years.
In 2000, the parties commenced cohabitation.
In mid-2001, the parties married.
In 2002, the husband commenced participating in a motorsport.
In 2004, the only child of the parties’ marriage, B Sanderson (“B”), was born. She is currently aged 16 years.
In 2014, the parties separated on a final basis but continued to live under the one roof until 28 March 2015.
On 10 June 2015, the husband commenced proceedings in the Federal Circuit Court of Australia by filing an Initiating Application for final parenting and property orders.
On 15 March 2016, Judge Myers made orders transferring the matter to the Family Court of Australia.
On 15 November 2017, the husband withdrew all parenting applications. The children, being Ms F and B (collectively, “the children”) remain living with the wife.
In June 2018, the parties divorced.
A Pty Limited
On 8 August 1998, the husband established a products and services business which he incorporated, on 18 January 1999, as J Pty Ltd. The husband was the sole director of this company.
In February 2003, the company Company A was initially purchased and, after the acquisition, the company name was changed to A Pty Ltd and the wife commenced employment at A Pty Ltd. The wife continued to be employed by A Pty Ltd until the company was sold. The husband contends that J Pty Ltd purchased the Company A before changing the company name to A Pty Ltd. The husband further contends that the wife was not a director and shareholder of A Pty Ltd until April 2003. Comparatively, the wife contends that, in February 2003, both the parties were directors of A Pty Ltd and jointly purchased Company A in equal shares. The wife further contends that the acquisition involved A Pty Ltd taking over the liabilities owed by the purchased company.
In 2006, the parties finalised the acquisition of Company A by way of a payment to the original owners in the sum of $153,000 and became the sole shareholders and directors of A Pty Ltd. The husband contends that the sum of $153,000 was a final buy out price negotiated by himself with the original owners of Company A. Comparatively, the wife contends that the sum of $153,000 was required to pay out the original owners as a result of A Pty Ltd being unable to meet the tax liability owed by the company. The wife further contends that the parties paid the sum of $153,000 using a loan which was personally guaranteed by the wife’s parents.
In late 2010 or early 2011, the husband leased a factory bay at Town BB. The husband contends that this was for the purpose of a storage facility for the activities of A Pty Ltd. Comparatively, the wife contends that those premises were used by a motor mechanic hired to service the husband’s cars.
In October 2014, the bank accounts of A Pty Ltd with the Commonwealth Bank of Australia (“Commonwealth Bank”) were frozen until 3 November 2014, being the date that the parties signed a ‘Memorandum of Understanding and Mutual Undertakings’ (“the Memorandum”). That Memorandum recorded the parties’ mutual undertakings to establish a new Commonwealth Bank account for A Pty Ltd (“the company’s savings account”) from which the parties were entitled to withdraw funds to meet their respective living expenses, provided that they each separately recorded in a written ledger all drawings made by them respectively, but otherwise undertook not to withdraw funds from the new account. Both the parties make allegations that the other has improperly withdrawn funds from the company’s savings account, contrary to the provisions of the Memorandum.
On 13 April 2017, Rees J determined that a receiver/manager be appointed to manage A Pty Ltd and preserve its assets until the substantive proceedings were heard and determined: [2017] FamCA 231.
On 26 May 2017, by consent, Loughnan J appointed Mr K as the receiver of A Pty Ltd (“the Receiver”).
Between 2016 and 2017, a rival company incorporated as L Pty Ltd was established and, in November 2017, all remaining staff employed by A Pty Ltd resigned and commenced work at L Pty Ltd. The wife contends that the husband was responsible for negotiating with the overseas vendors of A Pty Ltd to establish L Pty Ltd as a franchise of A Pty Ltd. The husband denies having any involvement with establishing L Pty Ltd and, comparatively, contends that the former General Manager of A Pty Ltd was responsible for negotiating the establishment of the rival company and persuading the staff of A Pty Ltd to resign.
The parties each make allegations concerning inappropriate conduct of the other in respect to mismanagement as employees and directors of A Pty Ltd during the period leading up to the sale of the company in March 2018.
On the wife’s case, many allegations would rise to a breach of the husband’s fiduciary duties: see: Mills v Mills (1938) 60 CLR 150 at 185 (Dixon J). However, for reasons which I set out below, in circumstances where the information before the Court is insufficient, I am unable to make a finding to the standard required by s 140(1) of the Evidence Act 1995 (Cth) (“the Evidence Act”), in respect to the wife’s allegations regarding inappropriate administration of A Pty Ltd on the part of the husband.
Conversely, in presenting his case as to why there was a mass simultaneous exodus of staff from A Pty Ltd to the rival company, which was also joined by the husband, he contends that the wife was abusive in her dealing with the staff of A Pty Ltd. This, the husband further contends, resulted in their mass resignations and simultaneous engagement with the rival company. In that respect, the husband’s evidence is implausible and there is no evidence to corroborate his imputations against the wife. Specifically, the husband has not called evidence from any former employee of A Pty Ltd who he contends were so offended by the wife’s conduct towards them as to take the course of resigning from their employment. Accordingly, and having regard to the parties’ respective presentation in these proceedings, which I set out in further details below, I have not given any weight to the husband’s evidence that the wife behaved in an inappropriate manner in her dealings with the employees of A Pty Ltd.
In March 2018, the Receiver sold A Pty Ltd and the net proceeds of that sale was $499,602.85. The husband contends that the sale price was significantly reduced as a result of the Receiver rejecting his unconditional offer to purchase A Pty Ltd in favour of a lesser purchase offer. The husband further contends that the Receiver accepted a lessor offer from a competitor business that eventually employed the wife. Comparatively, the wife contends that the sale price was significantly reduced due to the actions of the husband in negotiating the establishment of the rival company, during his time as a director and employee of A Pty Ltd.
As I have earlier indicated, for reasons which I set out below, the evidence presented in the proceedings is not such that I have been able to determine the extent to which the sale price of A Pty Ltd was adversely impacted by the conduct of either party. Similarly, as the husband has not presented evidence of any offer made by him to the Receiver for the purchase of A Pty Ltd, I am unable to make a finding in respect to his allegations that the sale price of A Pty Ltd was adversely impacted by the conduct of the Receiver. For the purpose of these proceedings, I only note that A Pty Ltd has been sold and that the net proceeds of sale are held in a controlled monies account.
Pursuant to orders I made by consent on 12 November 2018, the net proceeds of the sale of A Pty Ltd were paid into a controlled monies account of G Lawyers solicitors (“G Lawyers”) and the Receiver was discharged. The parties are in agreement that the G Lawyers controlled monies account containing the net sale proceeds for the sale of A Pty Ltd (“the controlled monies account no.1”) currently contains approximately $514,382.97, that being the closing balance as at 31 January 2021.
Other property
In March 2001, the parties purchased the property located at M Street, Suburb N in the State of New South Wales (“the Suburb N property”) jointly with the husband’s parents for the purchase price of $410,000. The purchase was financed in part by way of a mortgage. It is not disputed that the wife contributed $75,000 towards the purchase of the Suburb N property. The husband contends that he contributed a further $180,000 towards the purchase. Comparatively, the wife contends that the husband and his parents each contributed a sum of $50,000 towards the purchase.
In April 2011, the parties sold the Suburb N property for $670,000.
In June 2011, the parties purchased the property located at O Street, Suburb P, in the State of New South Wales (“the Suburb P property” or “the former matrimonial home”) for the purchase price of $877,500. The husband contends that he contributed the sum of $50,000 towards the purchase of the Suburb P property, being the entirety of his entitlement in his superannuation fund which he contends was withdrawn to assist the purchase of the Suburb P property. Comparatively, the wife contends that the parties jointly contributed the sum of $670,000 towards the purchase of the Suburb P property, being the proceeds from the sale of the Suburb N property, and the balance of the purchase price was secured by way of mortgage.
On 26 September 2013, the husband gifted to the wife a historic motor vehicle 1 registered in his name. The Historic motor vehicle 1 remains registered in the name of the husband.
On 2 April 2015, the Suburb P property was sold for $1,290,000 and the net proceeds of the sale were paid into a controlled monies account now held by G Lawyers (“the controlled monies account no.2”). Pursuant to orders made by Loughnan J on 26 May 2017, the net proceeds of that sale have been distributed to each of the parties at a rate of $10,000 each per month until exhausted. The parties are in agreement that the controlled monies account no.2 currently contains approximately $9,000.
APPLICATIONS
The husband seeks orders be made in accordance with those set out in his Case Outline document filed 22 March 2021, as follows:
1. That within 28 days of the date of order, the parties do all acts and things to cause the entirety of the funds held in the controlled monies accounts by G Lawyers to be distributed 50% to the Wife and 50% to the Husband, and for that purpose, this Order serve as authority from each of the parties to G Lawyers to release such funds.
2. That within 30 days of the date of the orders, the Husband do all acts and things to cause the motor vehicle being the Historic motor vehicle 1 registered in his sole name to be transferred to the Wife.
3. That as between the parties, the wife will retain the following: monies held in bank accounts in her name; and furniture, furnishings, personalty and jewellery in her possession.
4. That as between the parties, the Husband will retain the following: All vehicles, boats and collections in his possession and proceeds from the sale thereof; Proceeds of sale from Q Street Suburb R; Monies held in bank accounts in his name; and furniture, furnishings and personalty in his possession.
5. That as between the parties the wife remain solely responsible for all liabilities in her name.
6. That other than as herein provided the husband and the wife each be declared the owner at law and in equity of all items of personalty including but not limited to money, proceeds of bank accounts, jewellery, and personal effects presently in their respective possession and control
7. That other than as herein provided the husband and the wife each be declared the owner of such pension benefits to which each of them is or might become entitled in his or her own right.
8. That other than as herein provided, the husband and wife remain liable for any debts in his or her sole name at the date of these Orders and in this respect shall indemnify and hold harmless the other from any liability in relation thereto.
9. That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein requiring a party to execute a deed or instrument, the Registrar or Deputy Registrar of this Court at its Sydney Registry is appointed pursuant to Section 106A of the Family Law Act to execute, in the name of the husband or the wife as the case may be, any deed or instrument necessary to give effect to the orders herein, or any of them, and to do all acts and things necessary to give validity and operation to the said deed or instrument
The wife seeks orders be made in accordance with those set out in her Case Outline document filed 27 February 2021, as follows:
1. That within 28 days of the date of order, the parties do all acts and things to cause the entirety of the funds held in the controlled monies accounts by G Lawyers to be distributed to the Wife, and for that purpose, this Order serve as authority from each of the parties to G Lawyers to release such funds.
2. That within 42 days of the date of the order, The Husband pay to the Wife’s nominated bank account the sum of $275,000.
3. That within 30 days of the date of the orders, the Husband do all acts and things to cause the motor vehicle being the Historic motor vehicle 1 registered in his sole name to be transferred to the Wife.
4. That as between the parties the Husband remain solely responsible for all liabilities in his name, including but not limited to the following:
a. Default Order for the Husband to pay H Pty Ltd;
b. Monies owed to A Pty Ltd.
5. That as between the parties, the wife will retain the following:
a. monies held in bank accounts in her name; and
b. furniture, furnishings, personalty and jewellery in her possession.
6. That as between the parties, the husband will retain the following:
a. Motor vehicle 4;
b. Motor vehicle 3;
c. Historic motor vehicle 2;
d. Historic motor vehicle 2 (Shell);
e. Van (…);
f. Motor vehicle 1 (…);
g. Truck 1 (…);
h. Truck 2 (…);
i. Proceeds of sale from Historic motor vehicle 3 (…)
j. Proceeds of sale from Historic motor vehicle 4 (…);
k. Motorcycle 1 (…);
l. Motorcycle 2 (…);
m. Bike Trailer (…);
n. Quad Bike 1;
o. Quad Bike 2;
p. Quad Bike 3;
q. Motor vehicle 5 (…);
r. Car Trailer for Racing Cars;
s. Caravan (…);
t. Spa;
u. One million Qantas Frequent Flyer points;
v. Crystal Collection;
w. Model Car Collection;
x. Spring free Trampoline;
y. Tractor;
z. Ride on Mower;
aa. Motor scooter (…);
bb. Motorcycle 3 (…);
cc. Historic Motorcycle 4;
dd. Caravan 2;
ee. Motor vehicle 2 (…);
ff. Motor vehicle 6 (…);
gg. Yacht;
hh. Dingy boat;
ii. Proceeds of sale from Q Street Suburb R;
jj. monies held in bank accounts in his name; and
kk. furniture, furnishings and personalty in his possession.
7. That other than as herein provided the husband and the wife each be declared the owner at law and in equity of all items of personalty including but not limited to money, proceeds of bank accounts, jewellery, and personal effects presently in their respective possession and control.
8. That other than as herein provided the husband and the wife each be declared the owner of such superannuation/annuity entitlements, and pension benefits to which each of them is or might become entitled in his or her own right.
9. That other than as herein provided, the husband and wife remain liable for any debts in his or her sole name at the date of these Orders and in this respect shall indemnify and hold harmless the other from any liability in relation thereto.
10. That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein requiring a party to execute a deed or instrument, the Registrar or Deputy Registrar of this Court at its Sydney Registry is appointed pursuant to Section 106A of the Family Law Act to execute, in the name of the husband or the wife as the case may be, any deed or instrument necessary to give effect to the orders herein, or any of them, and to do all acts and things necessary to give validity and operation to the said deed or instrument.
EVIDENCE
The husband relies upon the following documents:
(a)Affidavit of the husband filed 11 March 2021, together with annexures (marked ‘Exhibit A’) (“the husband’s Affidavit”);
(b)Case Outline document filed 22 March 2021 (marked ‘Exhibit B’); and
(c)Financial Statement filed 11 March 2021 (marked ‘Exhibit C’).
The wife relies upon the following documents:
(a)Notice to Admit Facts filed on 12 May 2020
(b)Affidavit of the wife filed 25 January 2021, together with the annexures (marked ‘ Exhibit D’) (“the wife’s trial Affidavit”);
(c)Affidavit of the wife in reply filed 17 March 2021, together with annexures (marked ‘Exhibit E’) (“the wife’s Affidavit in reply”);
(d)Financial Statement filed 18 November 2020 (marked ‘Exhibit F’);
(e)Case Outline document filed 27 February 2021 (marked ‘Exhibit G’);
(f)Tender bundle of documents provided to the Court on 17 March 2021 (marked ‘Exhibit H’); and
(g)Additional tender bundle of documents provided to the Court on 22 March 2021 (marked ‘Exhibit I’).
INADEQUATE DISCLOSURE
In this matter the husband has failed to provide adequate disclosure. For reasons which I set out below, I am satisfied that the husband had a number of items of property in his possession at the time of separation, which have not been disclosed by him nor has he provided information regarding the disposal of those items and what has happened with the proceeds from the sale of those items. Significantly, in that respect, the husband acknowledges that, contrary to orders made by consent on 18 September 2017, to which I will subsequently refer, he has sold items of property without the wife’s consent.
In Briese & Briese (1986) FLC 91-713 at 75,181, Smithers J applied the House of Lords decision in Livesey v Jenkins [1985] AC 424 in determining that:
… in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the Court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of a discretion.
His Honour further stated at 75,181:
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v. Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.
(As per the original)
In that regard, r 13.01(1) of the Family Law Rules 2004 (Cth) (“the Rules”) relevantly provides that “each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner”.
Further, r 13.04(1) of the Rules relevantly provides that:
(1)A party to a financial case must make full and frank disclosure of the party’s financial circumstances, including:
(a) the party’s earnings, including income that is paid or assigned to another party, person or legal entity;
…
(g) any disposal of property (whether by sale, transfer, assignment or gift) made by the party, a legal entity mentioned in paragraph (c), a corporation or a trust mentioned in paragraph (f) that may affect, defeat or deplete a claim:
(i) in the 12 months immediately before the separation of the parties; or
(ii) since the final separation of the parties; and …
Clause 1 of Pt 1 of Sch 1 of the Rules relevantly provides:
(6) At all stages during the pre-action negotiations and, if a case is started, during the conduct of the case itself, the parties must have regard to:
…
(i) the duty to make full and frank disclosure of all material facts, documents and other information relevant to the dispute.
Note: The duty of disclosure extends to the requirement to disclose any significant changes (see clause 4 of this Part).
The fact that the obligation of disclosure exists as a duty to the Court, as well as the other party, is significant. It is also significant that the obligation is in respect to the disclosure of “information relevant to the dispute”, not simply one that attaches to the production of documents.
In this matter, as a result of the inadequacy of the husband’s disclosure, which includes failing to disclose the particulars of the sale and sale prices of items of property contrary to an order of this Court, I infer that the husband is in possession of property which he has not disclosed. In so inferring, I note that the authorities confirm that there can be evidentiary findings made as a result of a party’s failure to comply with their obligations of disclosure. Carroll and Kopsen, in their essay, “The importance of full and frank disclosure in family law financial proceedings and the many consequences of non-disclosure” (2017) 45 Federal Law Review 97, usefully summarise some of the relevant authorities dealing with that issue at pages 109–110, as follows:
As a consequence of the rule, the Full Court of the Family Court has found that the failure by a party to disclose relevant financial information may lead the court to draw adverse inferences against that party, provided there was material upon which such an inference could be based. Many instances exist where such inferences have been drawn by the court. In Hall v Hall, for instance, an adverse inference was drawn from the failure of a wife to lead evidence to explain why she had not received financial support once she was aware it was available to her at the discretion of the executor of her late father’s will.
(Footnotes omitted)
In Graf-Salzmann & Graf [2015] FCWA 68 at [287], Walters J noted:
… a judge is entitled to take a “robust view” in relation to findings regarding a party’s financial position (including a party’s capacity to meet any proposed order) where that party has failed to make full and frank disclosure of his/her financial position: see Chang v Su (2002) FLC 93-117 at [71] and [72].
In Efthidmiadis & Efthidmiadis (1993) FLC 92-361 at 79,804, the Full Court said:
So far as the wife is concerned, there is no doubt that she should be treated as substantially understating her income… The circumstance that the wife had a significantly greater income that she deposed to was very damaging to her on issues of credit overall and virtually ensured that she was put out of Court so far as s75(2) factors were concerned.
As noted in Goddard Elliott v Fritsch [2012] VSC 87 at [894]–[895] by Bell J:
894.When it comes to making findings on the evidence, the non-disclosure of a party, and the appropriation by a party of matrimonial property for themselves, may be taken into account when making findings on the evidence. The applicable principle was enunciated in In the Marriage of Weir:
This court has pointed out in a line of cases leading up to the recent decision of the Full Court, … that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs.… It is clear enough from his Honour’s findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour’s findings in this case, then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It can be seen that the non-disclosure, like an adverse finding as to credit, is a reason ‘not to be unduly cautious’ about making findings in favour of the innocent party. But it is not a basis, upon its own, for deciding an application against the non-disclosing party. There must be “an underlying body of evidence from which such conclusions can be drawn”.
895.In cases of non-disclosure, the court must still do the best it can, even if the findings have to be imprecise; further, the court may “err on the side of generosity to the party who might be otherwise be [sic] seen to be disadvantaged by the lack of complete candour”.
(Footnotes omitted)
In this case, there is material available to make such an inference. That material is firstly set out in the Notice to Admit Facts filed by the wife on 12 May 2020. In accordance with orders of the Court made on 9 April 2020, both parties were required to serve any Notice Disputing the Fact or Document on the other party within 14 days of receipt of the other party’s Notice to Admit Facts if they wished to contest any fact contained in the Notice to Admit Facts.
The husband did not file such a Notice to Admit, nor did he file a Notice Disputing Facts. I am satisfied that the wife served her Notice to Admit Facts on the husband. I am further satisfied that the wife has, in her trial Affidavit, given the husband clear and appropriate notice that she intends to rely upon the Notice to Admit Facts as filed by her on 12 May 2020. In those circumstances, the wife was entitled to rely upon the Notice to Admit Facts rather than engaging in any further forensic research regarding property in the husband’s possession as at the date of separation. Similarly, the wife was entitled to rely upon the notice she gave in her Notice to Admit Facts regarding her asserted values of the various items of property and, in the absence of a notice disputing those assertions, to refrain from engaging the services of a valuer to value those items.
Accordingly I am satisfied that, as at the date of the parties’ separation, the marital property pool was, as set out in paragraph 5 of the wife’s Notice to Admit Facts as follows:
5.1. O Street, Suburb P
5.2. A Pty Ltd
5.3. Motor vehicle 4
5.4. Motor vehicle 3
5.5. Historic motor vehicle 2
5.6. Historic motor vehicle 2 (Shell)
5.7. Van (…)
5.8. Motor vehicle 1 (…)
5.9. Truck 1 (…)
5.10. Truck 2 (…)
5 .11. Motor vehicle 7 (…) leased by A Pty Ltd
5.12. Historic motor vehicle 3 (…)
5.13. Historic motor vehicle 4 (…)
5.14. Motor vehicle 8 (…) leased by A Pty Ltd
5.15. Motorcycle 1 (…)
5.16. Motorcycle 2 (…)
5.17. Bike Trailer (…)
5.18. Quad Bike 1
5.19. Quad Bike 2
5.20. Quad Bike 3
5.21. Motor vehicle 5 (…)
5.22. Car Trailer for motorsport
5.23. Caravan (…)
5.24. Furniture in the possession of each party
5.25. Spa
5.26. One million (1,000,000) Qantas Frequent Flyer points
5.27. Crystal Collection
5.28. Model Car Collection
5.29. Spring Free Trampoline
5.30. Motor vehicle 9 (…) leased by A Pty Ltd
5.31. Historic motor vehicle 1
I am further satisfied that, other than in respect of the business and the former matrimonial home, in accordance with paragraph 8 of the wife’s Notice to Admit Facts, the wife retained the Porsche motor vehicle, the Historic motor vehicle 1 and furniture in her possession. I am satisfied that the remaining items of property were property that remained in the possession of the husband.
Further, in drawing the inference that the husband has additional property in his possession which he has not disclosed, I note that, on 18 September 2017, the following consent orders were made:
3.That without admission the Husband shall be and hereby is, by injunction, restrained from:-
(a) disposing, encumbering or dealing with;
(i) yacht;
(ii) little motor boat;
(iii) Motorcycle 3 …;
(iv) Historic motor vehicle 4 …;
(v) Motor vehicle 1 …, and
(vi) Caravan 1 ….
(b)disposing of the following items without first having given the Wife fourteen (14) days notice in writing of his intention to sell the item and the minimum price at which he proposes to sell:-
(i) Motor vehicle 5 …;
(ii) Historic motor vehicle 3…;
(iii) Motor vehicle 3;
(iv) Historic motor vehicle 2;
(v) Van (…);
(vi) Delivery truck …, and
(vii) Car trailer for motorsports.
4. That for the purpose of any sale pursuant to the liberty in Order 3(b):-
(a)the Wife is at liberty to have a valuer, at her expense, attend to inspect the items in 3(b) within seven (7) days of the date of these Orders and the Husband shall make same available within forty eight (48) hours of a request;
(b)the Husband shall notify the Wife of any advertisement that he places for the items within twenty four (24) hours of placing the advertisement;
(c)following the sale the Husband shall provide the Wife with copies of all documents arising from the sale and shall within seventy two (72) hours of receiving the sale proceeds pay to the Wife half of the nett proceeds by way of interim property distribution with the Husband to retain his share by way of interim property distribution, and
(d)the items in 3(b) shall be offered for sale to the public by way of Car Sales, Gumtree, MY105.com.au or equivalent.
The fact that the parties entered into those consent orders, in which those items of property were so identified, necessarily leads one to conclude that the property existed at the time those consent orders were made in this Court. In other words, I construe the consent orders made on 18 September 2017 as an acknowledgment by the husband that the items referred to in the orders were in the husband’s possession as at the date those orders were made.
I further accept the evidence of the wife, as set out in paragraphs 21 and 22 of the wife’s Notice to Admit Facts, that since separation the husband has purchased the following for the amounts specified, as follows:
22.1. Scooter (…) $ 10,000
22.2. Motorcycle 3 (…) $ 28,500
22.3. Motorcycle 4 $ 20,000
22.4. Caravan 2 $ 63,000
22.5. Motor vehicle 2 (…) $ 25,000
22.6. Motor vehicle 6 (…) $ E25,000
22.7. Yacht r $ 125,000
22.8. Dingy boat $ 5,000
In his Financial Statement filed 11 March 2021, the husband states that he has disposed of the following property:
Model Car Collection sold $500
Crystal collection Disposed - broken during move $0
Motor Vehicle 4 Sold $11,000
Van Sold $5000
Truck 1 Sold $5000
Truck 2 Scrapped
Historic motor vehicle 3 Sold $500
Historic motor vehicle 4 Sold $10,000
Motorcycles disposed of prior to separation
Bike Trailer retained by purchasers of the matrimonial home
3 quad bikes scrapped as they were unsellable
Motor vehicle 5 Sold $4000
2012 Caravan Damaged unrepairable
Furniture and spa left at a property I sold
Trampoline Sold $500
The husband further states in his Financial Statement that the only property now in his possession, other than savings and credit accounts with commercial banks, are several motor vehicles, set out as follows:
Motor vehicle 1 Hail Damaged Valued $5000
Motor vehicle 2 Hail Damaged $10,000
Motor vehicle 3 not running no engine $5000
Historic motor vehicle 2 not running $500
2002 Trailer $500
TOTAL $21,000
Of further relevance is the evidence given by the husband during cross examination which, relevantly, is summarised as follows;
(a)The husband was unable to produce documents regarding the sale price he achieved for the sale of the:
(i)Motor vehicle 4 which the husband stated in his Financial Statement filed 11 March 2021 for the sum of $11,000 but then agreed to a submission from the wife that he had provided no evidence to support that figure (Transcript 22 March 2021, p.7 lines 3–10);
(ii)Historical motor vehicle 3 save to the extent that he acknowledged that the sale price of the vehicle recorded as $5,000 in his Financial Statement was a typographical error and should have been listed as $50,000, but that he otherwise had “no idea on the date” (Transcript 22 March 2021, p.8 line 40 to p.10 line 12); and
(iii)Historic motor vehicle 4 that the husband stated in his Financial Statement was sold for the sum of $10,000, but which, in response to a proposition from the wife that the sale price was actually $22,250, he stated that he did not know whether that was the sale price and that he would have to “look that up”(Transcript 22 March 2021, p.10 line 46 to p.11 line 14);
(b)The husband acknowledged that he sold his yacht, which he stated, in response to a question from the wife as to why it was not included in his Financial Statement, had happened “very – very recently”. Despite the sale being, according to his evidence, within “the last couple of weeks”, the husband stated it was “hard to say what it was actually sold for” before stating that he thought it was sold for $75,000 but that there was “roughly” $20,000 owing on the vessel. In response to a further question to account for the remaining $55,000, being the balance of the sale price for the yacht given by him, the husband stated that the amount has been “paid back to a friend of [the husband] who gave [him] a personal loan for it”. The husband, however, stated he was not “at liberty” to identify that friend when asked, but subsequently acknowledged that it is the same friend who he stated was the registered owner of the caravan 2. The reference to the caravan is significant because the husband stated that he had no knowledge about a compulsory third party insurance policy registered under his name and several payments made by him for the caravan. (Transcript 22 March 2021, p.7 line 31 to p.8 line 24; p.20 line 25 to p.21 line 17).
(c)In response to a question from the wife, the husband accepted the proposition, put to him by the wife, that he had not disclosed the proceeds of an insurance payout in the sum of $82,700 in respect to a 2012 caravan, the disposal of which was described in his Financial Statement filed 11 March 2021 as “2012 Caravan Damaged unrepairable” (Transcript 22 March 2021, p.11 line 33 to p.12 line 7);
(d)The husband was also unable to provide an explanation in respect to a deposit in the sum of $42,700 which was made into his S Bank savings account on 23 April 2019 (Transcript 22 March 2021, p.12 lines 11–23);
(e)The husband was also unable to explain a deposit in the sum of $16,400 which was made into his S Bank savings account on 30 September 2019 from a Mr DD (Transcript 22 March 2021, p.12 lines 45–47);
(f)In response to a question from the wife, the husband stated that he had “no idea” regarding an explanation for a cheque in the sum of $18,000 deposited into his S Bank savings account on 21 October 2019 (Transcript 22 March 2021, p.13 lines 1–3);
(g)In response to a question from the wife regarding the source of a cheque in the sum of $28,000 deposited into his S Bank savings account on 7 January 2021, the husband stated that he thought it was “for the sale of the motor vehicle 6”. To add further lack of clarity in respect to that item of property, the husband stated that he had not referred to that vehicle in his Financial Statement filed 11 March 2021 because he did not own the vehicle but, rather, that it was “owned by a friend and there was a subsequent repayment of that loan”. The husband, however, in response to a further question from the wife seeking an explanation why that sum was paid to him, stated that the Renault vehicle was registered in his name. Again, the husband declined to identify the friend which he stated owned the vehicle, save to say that it was the same friend to whom he had paid the proceeds of sale of the yacht (Transcript 22 March 2021, p.13 lines 5–19);
(h)The husband was further unable to explain a payment in the sum of $9,900 into his Commonwealth Bank of Australia Smart Access bank account on 22 October 2019 from a woman called “Sue” indicating that it was for a “car” (Transcript 22 March 2021, p.13 lines 35–37); and
(i)The husband further acknowledged that he had not recorded on his Financial Statement filed 11 March 2021 the proceeds from the sale of a motor scooter in the sum of $8,450 evidenced by an entry in his Commonwealth Bank of Australia Smart Access bank account on 30 November 2019 which indicated it was for a motor scooter (Transcript 22 March 2021, p.13 lines 39–44).
It is possible then to determine, by way of inference, what property is currently in the possession of the husband by having regard to the evidence to which I have referred. That determination can be reached by including, in addition to the property identified in his Financial Statement filed 11 March 2021 as remaining in his possession, those items of property identified to be in the husband’s possession as at the date of separation and at the date of the making of the consent orders on 17 September 2017, as well as the property specified in the wife’s Notice to Admit Facts that was purchased by the husband since separation, and then removing from that aggregated list those items of property identified by the husband as having been disposed of by him. I accept the submission of the wife that undertaking this exercise leads one to the logical conclusion that the husband still retains in his possession the following items of property:
·Motor vehicle 3;
·Historic motor vehicle 2;
·Historic motor vehicle 2 shell;
·Motor vehicle 1 (…);
·Truck 1 (…);
·Truck 2 (…);
·Car Trailer;
·Motorcycle 3 (…);
·Motorcycle 4;
·Motor vehicle 2 (…); and
·Dingy boat.
(Transcript 22 March 2021, p.74 line 16 to p.76 line 35)
In the absence of an explanation from the husband as to what has happened to the proceeds of sale of those items to which I have referred, I, accordingly, infer that the husband remains in possession of the proceeds of those sold items and the insurance payout. To avoid doubt, that includes the amounts which the husband stated that he paid to the undisclosed friend to which he referred.
CREDIT AND RELIABILITY
As reflected above, the written and oral evidence of the parties is at odds in a number of significant respects. In order to resolve the competing factual contentions, it is necessary for the Court to make findings of credit and reliability in respect to the parties’ evidence. However, in that regard, I note the caution expressed in Whalan v Kogarah Municipal Council [2007] NSWCA 5 at [41], where it was observed:
To disbelieve a party (or any witness for that matter) who swears his or her oath is a serious finding and not to be undertaken lightly without good and sufficient reasons.
In McGlen-McLeod v Galloway [2012] NSWCA 368, Tobias AJA, with whom Allsop P and Campbell JA agreed, referred with approval to the test for assessing the truth of a witness’s evidence as being stated by Tugendhat J in Thornton v Telegraph Media Group Ltd [2011] EWHC 1884 (QB) at [73], where it was said:
There is great assistance to be obtained from extra-judicial writing of Lord Bingham in a chapter headed “The Judge as Juror: The Judicial Determination of Factual Issues” … Lord Bingham cited Sir Richard Eggleston QC Evidence, Proof and Probability (1978), 155 who set out the main tests to be used by a judge to determine whether a witness is lying or not.
(1)the consistency of the witness’s evidence with what is agreed, or clearly shown by other evidence, to have occurred;
(2)the internal consistency of the witness’s evidence;
(3)consistency with what the witness has said or deposed on other occasions;
(4)the credit of the witness in relation to matters not germane to the litigation;
(5)the demeanour of the witness.
In the High Court decision of Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at 384, [62], the plurality stated:
Witnesses are supposed to answer questions put by counsel responsively: they are supposed to give a full answer, but no more. It is one thing to say that a witness was not asked the right questions. It is another thing to say that a witness did not answer the questions that were asked. And it is an even more serious thing to say that a witness was “reluctant” to answer. The duty of a witness is to tell the truth, the whole truth, and nothing but the truth so far as the questions asked seek it. The duty of a witness to answer questions responsively involves not only a negative duty (not to volunteer material for which the question does not call), but also a positive duty (to proffer all material within the witness’s knowledge for which the question does call).
Throughout the course of the proceedings, the husband could not separate his role as a witness in responding to questions from his role as his own self represented litigant. His answers were frequently delivered in a rude and belligerent manner and often were non-responsive, venturing into areas that were irrelevant to the questions asked of him including, at times, making disparaging comments of the wife.
The answers provided by the husband were substantially self-serving and, as indicated in the reasons I have set out immediately above in respect to the issue of inadequate disclosure, were frequently inaccurate. The husband, however, was unwilling to acknowledge the inaccuracy of his evidence until specific documents were presented to him as, in those circumstances, he had no alternative but to acknowledge the errors to which I have referred.
In contrast, unlike the husband’s belligerent presentation in these proceedings, the wife presented in a measured and rational manner, despite numerous discourteous interventions by the husband when she was addressing the Court. The wife gave her answers in response to questions asked of her, by both the husband and the Court, in a measured, direct and responsive manner.
Accordingly, wherever there is a conflict between the parties’ evidence, and the husband’s evidence is not supported by other corroborating evidence, I have preferred the evidence of the wife.
THE LAW – CONCEPTS AND PRINCIPLES
Insofar as is relevant in these proceedings, s 79 of the Act sets out the following:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In exercising that discretion, the Court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Since the decision of the High Court in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”), there has been some debate as to the approach that should be taken by the courts in the exercise of its discretion pursuant to s 79 of the Act.
Prior to Stanford, the Family Court had established principles for determining what kind of order is just and equitable under s 79(2) of the Act. In the leading case of Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, the Full Court held at [39] that the preferred approach was to adhere to the following four steps:
(1)identify and determine the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(2)identify and determine each of the parties’ financial and other contributions to the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(3)assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(4)step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
That approach had been endorsed many times: see, for example, Manolis v Manolis (No 2) [2011] FamCAFC 105 at [63] (per Coleman, May and Ainslie-Wallace JJ); Kildea v Kildea (2007) 38 Fam LR 347 at [104] (per Finn, May and Boland JJ); Coghlan and Coghlan (2005) FLC 93-220 at [22] (per Bryant CJ, Finn and Coleman JJ) and [142] (per O’Ryan J).
However, as the High Court plurality in Stanford noted at [35], s 79(2) of the Act provides that the court shall not make an order altering the interests of the parties to the marital property, unless it is satisfied that “in all the circumstances, it is just and equitable to make the order”. Accordingly, since Stanford, it has generally been the practice of the Court to determine, as an initial issue, whether it is just and equitable to make an adjustment of marital property. That issue is, however, to be determined having regard to the matters referred to in s 79(4) of the Act.
More generally, in Petruski v Balewa (2013) 49 Fam LR 116 at [49], the Full Court stated:
The task of assessing contributions under s 79 of the Act is an holistic one; what is required is to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship: Dickons v Dickons [2012] FamCAFC 154 (Dickons). As was also said by the Full Court in Lovine v Connor [2012] FamCAFC 168 at [40] and [41] (Lovine) such an evaluation “inevitably involves value judgments and matters of impression”, and accordingly it cannot be treated as “a mathematical exercise.”
CONSIDERATION
Is it just and equitable to make a property adjustment?
Both parties sought an adjustment of their property interests pursuant to s 79 of the Act. In that regard, in Stanford at [42], the plurality of the High Court stated:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
In this case, both parties seek an order adjusting their property interests so that they can terminate their financial connection with each other and get on with their respective lives. The circumstances referred to in Stanford are therefore readily satisfied.
The Balance Sheet
The wife contends that the assets currently held by the parties are those set out at paragraph 9 of her trial Affidavit, set out as follows:
Ownership Description Value A. JT Controlled Monies account operated by G Lawyers $ 523,312.69 B. JT Motor vehicle 4 $ 80,000 C. JT Motor vehicle 3 $ 80,000 D. JT Historic motor vehicle 2 $ 50,000 E. JT Historic motor vehicle 2 (Shell) $ 5,000 F. JT Van (…) $ 15,000 G. JT Motor vehicle 1 (…) $ 65,925 H. JT Truck 1 (…) $ 15,000 I. JT Truck 2 (…) $ 5,000 J. JT Proceeds of sale from Historic motor vehicle 3 (…) $ 50,000 K. JT Proceeds of sale from Historic motor vehicle 4 (…) $ 22,500 L. JT Motorcycle 1 (…) $ 25,000 M. JT Motorcycle 2 (…) $ 10,000 N. JT Bike Trailer (…) $ 1,000 O. JT Quad Bike 1 $ 774 P. JT Quad Bike 2 $ 774 Q. JT Quad Bike 3 $ 6,200 R. JT Motor vehicle 5 (…) $ 6,500 S. JT Car Trailer for motorsports $ 2,000 T. JT Caravan (…) $ 82,700 U. JT Spa $ 4,500 V. JT One million Qantas Frequent Flyer points $ 35,000 W. JT Crystal Collection $ 60,000 X. JT Model Car Collection $ 20,000 Y. JT Spring free Trampoline $ 1,050 Z. JT Tractor $ 5,000 AA. JT John Deere Ride on Mower $ 5,000 BB. JT Furniture in possession of husband $ 35,000 CC. H Motor scooter (…) $ 10,000 DD. H Motorcycle 3 (…) $ 28,500 EE. H Motorcycle 4 $ 20,000 FF. H Caravan 2 $ 63,000 GG. H Motor vehicle 2 (…) $ 25,000 HH. H Motor vehicle 6 (…) $ 25,000 II. H Yacht $ 125,000 JJ. H Dingy boat $ 5,000 KK. H Proceeds of sale from Q Street Suburb R $ 40,000 LL. JT Designer watch collection $ 20,000 MM. W Historic motor vehicle 1 $ 20,000 NN. JT Weber BBQ $ 5,000 OO. W V Super $ 108,900 TOTAL $ 1,707,635.69
Save to the extent that the husband acknowledges the existence of monies held in the controlled monies account no.1 and no.2 (collectively, “the controlled monies accounts”) to which I will refer, as well as the assets disclosed by him in his Financial Statement filed 11 March 2021 to be currently in his possession, the husband did not present evidence nor did he make submissions regarding the totality of the current assets and liabilities of the parties.
I note that the values identified for those items of property held by the husband or the parties jointly set out in paragraph 9 of the wife’s trial Affidavit are, save for the controlled monies accounts, the same values as identified in her Notice to Admit Facts filed 12 May 2020 for those respective items. The difficulty for the wife, however, is that she has identified the values of those property in her Notice to Admit Facts as at the date of separation, as opposed to the current value of that property. In those circumstances, her evidence, as set out in paragraph 9 of her trial Affidavit, is lay opinion and therefore not admissible under s 76 of the Evidence Act to establish the value of those items as at the date of hearing.
Nevertheless, the parties both agreed as to the monies held in the controlled monies account being the amounts as follows:
·$514,382.97 in the controlled monies account no.1; and
·$9,704.41 in the controlled monies account no.2.
(Transcript 22 March 2021, p.15 lines 39–47)
I accept that the combined assets of the parties include those items referred to in the husband’s Financial Statement filed 11 March 2021 as being owned by him, being:
·Cash in S Bank account ending #...02
·Motor vehicle 1;
·Motor vehicle 2;
·Motor vehicle 3;
·Historic motor vehicle 2; and
·2002 Trailer.
However, having regard to the provisions of s 76 of the Evidence Act to which I have referred, I do not accept the husband’s evidence as to the value of those items, save to the extent that it is an admission, in terms of s 81 of the Evidence Act, against his interests by identifying those items as property already in his possession. Similarly, the value of the Historic motor vehicle 1 asserted by the wife in her trial Affidavit, as well as the value of her National Australia Bank account and household contents acknowledged in her Financial Statement filed 18 November 2020 as being $33 and $1,000 respectively, are both admissions against her interests to the extent that they are items of property in her possession and which are proposed to remain in her possession.
In addition, for reasons which I have set out above having regard to his non-disclosure, I infer that the husband also remains in possession of the following assets:
·Historic motor vehicle 2 (shell);
·Truck 1 (…);
·Truck 2 (…);
·Motorcycle 3 (…);
·Motorcycle 4; and
·Dingy boat.
Despite recognising those items of property as being in the husband’s possession, they cannot be included on the balance sheet in circumstances where I am unable to ascribe a value to those items. Accordingly, having regard to those items to which I am able to attach a value, I determine that the assets of the parties are as follows:
· the controlled monies account no.1 – $514,382.97;
· the controlled monies account no.2 – $9704.41;
· the Historic motor vehicle 1 – $20,000
· Motor vehicle 1 (…) – $5,000
· Motor vehicle 2 (…) – $10,000
· Motor vehicle 3– $5,000
· Historic motor vehicle 2 – $500
· Car Trailer – $500
· cash in the husband’s S Bank account ending #...02– $2,000
· cash in the wife’s National Australia Bank account ending #...85 – $33
· household contents in the possession of the wife – $1,000.
In addition, I am satisfied that the wife has a superannuation entitlement with V Super in the value of $108,900, as set out in paragraph 9 in the wife’s trial Affidavit. The husband gave evidence, as set out in his Financial Statement filed 11 March 2021, that he currently held no superannuation entitlements. Specifically, the husband attested that, at paragraph 238 of his Affidavit, the entirety of his superannuation entitlement was applied towards the purchase of the Suburb P property. For reasons which I set out below, I prefer the evidence of the wife that this did not occur.
Furthermore, I am not satisfied that the husband has disclosed his superannuation interests and/or what he has done with his superannuation interests. The wife contends at paragraph 27 of her trial Affidavit that, in 2012, the husband disclosed he had access to his superannuation during a meeting with the parties’ accountant and received payments into his bank account which were described as “superannuation”. In that respect, I note that the husband acknowledged, in response to a question from the wife, that he received a superannuation payment into his bank savings account in July 2016, more than a year after the Suburb P property was sold. In those circumstances, it would, in my view, be unfair to the wife, in the exercise of my discretion in determining what is a just and equitable property adjustment, to include her superannuation interests but to omit those of the husband which, for the reasons I have set out, I am satisfied have not been properly disclosed.
The wife contends that the liabilities currently held by the parties are those set out at paragraph 10 of her trial Affidavit, set out as follows:
Ownership Description Value A. W Loan from [the children] for Court Proceedings $ 41,200 B. W York Law Legal Fees $ 20,282 C. W Trial Court Fees $ 1,740 D. H Default Order for [the husband] to pay H Pty Ltd $ 7,263 E. H Amount owed to A Pty Ltd $ 406,457.52 TOTAL $ 476,942.52
For the reasons set out immediately below, I do not, however, include those items on the parties’ balance sheet.
Findings in respect to liabilities
Loan from the children for Court proceedings and outstanding legal fees:
In Farnell and Farnell (1996) FLC 92-681 (“Farnell”) at 83,066, Fogarty J referred to the issue of determining whether a party’s liability for legal costs should impact upon the size of the property pool available for distribution as being:
… a problem which is peculiar to the Family Court and specifically to financial matters in this Court. In other jurisdictions it would be unusual for a situation to arise where the size of the property in dispute may be impacted upon by the costs of one or both parties in litigating that issue. In addition, in other jurisdictions orders for costs ordinarily follow the outcome of the litigation and are not controlled by the particular provisions as to costs contained in the Family Law Act.
His Honour also referred to the difficulty of a trial judge in determining whether the liability, in respect to such legal fees, was reasonably incurred, and, at 83,068, stated:
Nevertheless in most cases a realistic assessment of the parties’ property and the division of that between them must include the circumstance that the parties have legal costs and in many cases the amounts involved are such that they will assume great importance in the outcome. In calculating the amount which one party is required to pay to the other party out of his or her existing assets the circumstance that those assets will have already been diminished or will be diminished by costs is a fact of life. Similarly, the amount ordered to be received by the other party will be significantly diminished by the circumstance that his or her costs will be deducted from that figure or have already been paid. In some cases the parties agree to a procedure by which costs are deducted from the pool so as to give a more realistic figure for available property. Where that is not done, in most cases it would be a difficult exercise for the trial Judge to do in a direct way. The best that can be done is for that circumstance to be identified; beyond that there is little that the trial Judge can do. It would not be appropriate for the figures otherwise arrived at under s. 79 to be altered to cater for that circumstance. In some cases the issue will be dealt with by considering whether to make a costs order under s. 117. But that is a separate matter and realistically costs orders at first instance in property proceedings are not frequently made.
In arriving at that conclusion, his Honour expressed doubt as to the correctness of an earlier decision of the Court in Lee Steere and Lee Steere (1985) FLC 91-626 (“Lee Steere”), where it was determined that a liability in respect to costs incurred by a party should, on the facts of that particular case, be deducted from the property available for distribution between both parties.
In Farnell at 83,080, Kay J similarly doubted the correctness of Lee Steere, stating:
… To make any allowance for the liability for costs as was suggested by Lee Steere, in my view necessarily requires a breach of s.117(1). I have had the opportunity of reading the proposed reasons for judgment of Fogarty J and I concur with his conclusion that Lee Steere should no longer be regarded as representing the law on this issue. In my view the proper time to considering the impact of costs is when considering applications under s.117 after the proceedings have concluded.
Having regard to those statements of Fogarty and Kay JJ in Farnell, I determine that the amounts specified by the wife as being funds lent to her by the children in respect to legal fees as well as the amount of outstanding legal fees owing to York Law should not be included on the parties’ balance sheet. Similarly, I determine that the amount of $80,000 referred to in the husband’s Financial Statement filed 11 March 2021 as being legal fees owing to his former solicitor should not be included on the parties’ balance sheet.
Trial court fees
The wife has not provided sufficient information for the Court to determine the basis upon which it is asserted that this item should be included as a liability on the parties’ balance sheet. Insofar as the wife contends that it is costs related to these proceedings, it may be a matter that she would wish to consider in the event that she wishes to apply for a costs order pursuant to s 117 of the Act.
Default Order for the husband to pay H Pty Ltd
There is insufficient evidence before the Court to enable me to make a determination in respect to this item. Accordingly, the amount will not be included on the parties’ balance sheet and, insofar as the amount is outstanding, it will remain a liability of the husband rather than the parties jointly.
Amount owed to A Pty Ltd
At paragraph 59 of her trial Affidavit, the wife attests as follows:
On 28 June 2017, C Accountants were appointed as accountants of A Pty Ltd by a Court directed agreement. C Accountants found that [the husband’s] A Pty Ltd loan at the end of the 2016/17 financial year totalled $406,457.52. And that my A Pty Ltd loan account at the end of the same financial year totalled $11,331.
It is unclear whether the amount of $11,331, referred to by the wife as being her A Pty Ltd loan account, has been repaid to the company. The husband has not asserted that it is an amount which is outstanding. Accordingly, as result of the uncertainty as to whether that amount is outstanding, I do not include that amount as a liability on the parties’ balance sheet. If it is outstanding, it will remain the responsibility of the wife.
In respect to the amount of $406,457.52 identified by the wife as being the amount of the loan account with A Pty Ltd payable by the husband, I note that, in Rodgers & Rodgers (No 2) (2016) FLC 93-712, the Full Court applied previous authorities in confirming that, notwithstanding the general practice of including unsecured liabilities on a balance sheet, there may be circumstances where it may not be appropriate for that to occur. Relevantly, at [41], their Honours stated:
The usual practice or “rule” sits comfortably and conformably within that rubric – in many cases, perhaps almost all, liabilities will be deducted from the “gross” value of the property because it will be clear (and even if not expressly stated, determined) that the justice and equity of the case demands that the liabilities should be met by the parties in the proportions in which the court determines the property is to be divided. Liabilities that are vague, uncertain, unlikely to be enforced and the like might be treated differently because those circumstances might, in the circumstances of the particular case, render it unjust and inequitable for liabilities to be deducted in that manner. Those so-called “exceptional cases” are but instances of the broader consideration of the justice and equity of the particular case.
(Emphasis added) (Footnotes omitted)
In this case, the evidence at paragraph 59 of the wife’s trial Affidavit, which I have referred to above, satisfies me that the husband’s loan account with A Pty Ltd remains outstanding. In the exercise of my discretion, I do not, however, include that item on the balance sheet. To so include that item would have the effect of requiring the wife to share in the liability, in circumstances where the evidence satisfies me that the husband is the person who has had the benefit of those funds and where, in the absence of evidence from the husband in respect to those funds, I infer those funds were applied for his personal expenses. Accordingly, this item will not be included on the parties’ balance sheet and will remain a liability for which the husband is solely responsible.
Summary of the balance sheet
For reasons which I have set out, I determine that the liabilities and superannuation entitlements to which I have referred are not to be included in the balance sheet of the parties. Also, for reasons I have set out, I find that the total value of those assets of the parties which have an identifiable value and are capable of adjustment is the sum of $568,120.38.
Accordingly, I find that the balance sheet of property available for distribution between the parties in this matter is as follows:
Ownership Description Value A. JT The controlled monies account no.1 $ 514,382.97 B. JT The controlled monies account no.2 $ 9,704.41 C. W The Historic motor vehicle 1 $ 20,000 D. H Motor vehicle 1 (…) motor vehicle $ 5,000 E. H Motor vehicle 2 (…) motor vehicle $ 10,000 F. H Motor vehicle 3 $ 5,000 G. H Historic motor vehicle 2 $ 500 H. H Car Trailer $ 500 I. H Cash in S Bank account ending #...02 $ 2,000 J. W Cash in National Australia Bank account ending #...85 $ 33 K. W Household contents $ 1,000 TOTAL $ 568,120.38 Contributions
Initial contributions
Having regard to the Notice to Admit Facts filed 12 May 2020 by the wife, I accept that, at the commencement of cohabitation, the wife had the assets set out at paragraph 2 of her Notice, and that the values of those assets were as particularised in her Notice to Admit Facts. Those assets and their respective values are as follows:
2.1. Sole ownership of a property at Suburb W $ 220,000
2.2. Personal Bank Account $ Nominal
2.3. Term Deposits $ 10,000
2.4. CC Superannuation Account $ 28,000
2.5. Motor vehicle 4 $ 10,000
2.6. Furniture and Personal effects $ 1,000
At paragraph 2.7 of her Notice to Admit Facts, the wife stated that, at the commencement of cohabitation, she had a liability in the form of an outstanding Westpac Home loan, in respect to an investment property located in Suburb W, in the sum of $140,000.
At paragraph 106 of his Affidavit, the husband contends that, on or about 18 January 1999, he incorporated J Pty Ltd, at which time, he states, he became the sole director, shareholder and employee of J Pty Ltd. The husband further contends at paragraph 240 that, at the time of cohabitation, the turnover of the company was $1 million, and that the company had a value of $750,000. The husband’s opinion as to the value of the company is, however, inadmissible as evidence of its actual value pursuant to s 76 of the Evidence Act.
At paragraph 1 of the summary of argument contained in the husband’s Case Outline document filed 22 March 2021, the husband states that, in addition to owning J Pty Ltd, he also had, as at the date of the commencement of cohabitation, the sum of $180,000 being the proceeds of the sale of a property he owned located at Suburb N. There is, however, no sworn evidence by the husband to that effect and, in those circumstances, I am unable to determine the value of the husband’s assets as at the date of commencement of cohabitation, save to the extent that the wife concedes, as an admission against interest, at paragraph 13 of her trial Affidavit that, at the commencement of cohabitation, the husband had net assets with a value totalling $8,000.
Accordingly, having regard to the admissible evidence presented in these proceedings, I conclude that the wife’s initial contributions significantly exceeded those of the husband.
Financial contributions made during the course of the parties’ relationship
Approximately 15 months after the parties’ commenced cohabitation, the parties moved from Sydney to an area north of Sydney where they jointly purchased the Suburb N property with the husband’s parents. The husband did not challenge the wife’s evidence at paragraph 15 of her trial Affidavit that, in order to purchase the Suburb N property, she sold the property that she owned in Suburb W, and that the husband together with his parents sold the property which they owned in Suburb U. The husband also did not challenge the wife on her evidence that the purchase price of the Suburb N property was $410,000, nor did he challenge her evidence the husband and his parents each contributed around $50,000 each. Both parties agreed that the wife contributed $75,000 towards the purchase. The balance of the purchase price, according to the unchallenged evidence of the wife, was funded by way of mortgage.
In addition to contributing towards the purchase price, the wife was not challenged on her evidence at paragraph 16 of her trial Affidavit that she contributed approximately $5,000 from a term deposit held by her towards an improvement to the Suburb N property, being the costs of construction of a wooden slat wall at the exterior of the property. The wife was also not challenged on her evidence at paragraph 17 that, in 2002, she contributed the balance held in that term deposit of $5,000 to purchase a Historic motor vehicle 3 for the husband.
The husband did not challenge the evidence of the wife at paragraph 20 of her trial Affidavit that, in April 2011, the Suburb N property was sold for the sum of $670,000. It is uncontroversial that this sale occurred subsequent to the unfortunate passing of the husband’s parents, and the husband also did not challenge the wife’s evidence that, as a result, the parties received the entire proceeds of the sale of the Suburb N property.
In addition, the wife was not challenged on her evidence at paragraph 21 of her trial Affidavit that, in June 2011, the parties purchased the Suburb P property for the purchase price of $877,500. Nor was she challenged on her evidence that the parties applied the proceeds from the sale of the Suburb N property in the sum of $670,000 towards the purchase price and financed the remaining balance by way of mortgage. In light of that unchallenged evidence by the wife, which I accept in preference to that of the husband for reasons which I have set out, I do not accept the husband’s evidence, at paragraph 238 of his ffidavit, that he applied his superannuation which he had obtained in his employment with A Pty Ltd towards the purchase of the Suburb P property.
On 2 April 2015, the parties sold the Suburb P property for the sale price of $1,290,000, resulting in net sale proceeds of $680,552.04. As a result of subsequent deductions which have been made from those proceeds, the current balance is the amount of $9,704.41, to which I have referred above.
I have given consideration as to whether the husband is entitled to have recognised a possible greater financial contribution that he may have made towards the purchase of the Suburb P property, as result of the application of the sale proceeds of the Suburb N property towards the purchase. Relevantly, the wife concedes, at paragraph 15 of her trial Affidavit, that ownership of the Suburb N property was shared such that 25 percent was held by herself, with the remaining 75 per cent share being owned equally between herself, the husband and his parents as tenants-in-common. There is, however, insufficient evidence for me to make that determination in circumstances where the husband carries the onus of establishing that such a superior contribution was made. Specifically, one possible inference is that the husband’s parents either gifted or bequeathed their share in the Suburb N property to their son. However, in the absence of evidence of that having occurred, an equally possible inference is that the husband’s parents gifted or bequeathed their interest in the Suburb N property to both parties. In the absence of evidence enabling me to determine that one or other of those possibilities was more probable than the other, I am unable to conclude that the husband made a greater contribution than the wife in respect to the purchase of the Suburb P Property.
The wife acknowledges that, at the commencement of cohabitation in 2000, the husband was in full-time employment as a sales representative. At that time, the wife was working full time as a healthcare professional at a hospital, earning approximately $70,000 per annum. The wife was not challenged on her evidence at paragraph 14 of her trial Affidavit that, from her income, she contributed approximately $400 per week to the rent payable by herself and the husband.
The husband attests that, on 4 March 2003, J Pty Ltd purchased Company A. At that time, according to the husband, he changed the company name to A Pty Ltd. The wife was not challenged on her evidence that, at the time of the purchase, she was an employee of A Pty Ltd.
The husband further states at paragraph 109 of his Affidavit that, in or around 2004, he “added the Wife as a director and shareholder of A Pty Ltd” upon receipt of taxation advice from his then accountant. This is disputed by the wife, who states that she became a director of A Pty Ltd at the time the business was purchased. It is unnecessary to resolve that factual dispute between the parties.
The husband further attests that, while the wife continued to be a director and shareholder of A Pty Ltd, she had no active role in the management of the company. In that respect, the wife candidly acknowledged, at paragraph 24 of her trial Affidavit, that the husband took a larger role in the management of the business, and that most of the day-to-day work undertaken in the operation of the business was performed by paid employees of A Pty Ltd.
Despite attesting to the wife playing no active role in managing A Pty Ltd, his subsequent evidence attested to the wife assisting with the shipping of some disposable equipment to customers and being responsible for sending sample equipment to some sales representatives. According to the husband, however, that work took approximately one (1) hour per week and, as described at paragraph 110 of his Affidavit, the wife’s role in A Pty Ltd “was menial in nature and limited”.
The wife disputed that evidence and attests, at paragraph 24 of her trial Affidavit, that her role at A Pty Ltd “mainly involved the receipt, handling, packaging, shipping and delivery of disposable products”. The wife further attested to processing tax invoices and matching them with receipts, and to reconciling bank statements in the course of undertaking her role within A Pty Ltd. As I have earlier set out, the wife presented as a witness of truth and I accept her evidence to that effect.
Comparatively, the wife attests that, from early 2012, the husband was not including her in making decisions relating to the day-to-day management of A Pty Ltd. This included, as she attests, to concerns she expressed about the amount of funds being used by A Pty Ltd to pay for the husband’s involvement in motorsports which she described as a hobby.
As I have earlier noted, the husband appears to have reproduced, for the purpose of these proceedings, Affidavit material which he previously filed in respect to both the property and earlier finalised parenting proceedings between the parties. In that context, a substantial amount of the husband’s Affidavit relates to matters which would be considered by the Court in the context of parenting proceedings, but which is not relevant in these proceedings, save to the extent that some of the evidence to which I have had regard relates to non-financial contributions during and subsequent to the parties’ relationship.
At paragraphs 9 and 10 of his Affidavit, the husband makes a number of imputations in respect to “The Wife’s mental health during the relationship”. I have disregarded that evidence which I have determined to be irrelevant to the matters that I am required to decide in these proceedings. Further, the evidence set out in those paragraphs by the husband is, in large part, offensive and is, in totality, inadmissible in property proceedings as being unqualified opinion in terms of s 76 of the Evidence Act.
The wife was not challenged regarding her evidence that, during the period of the parties’ relationship, she was primarily responsible for parenting and homemaker responsibilities in addition to, as previously noted, her engagement in a number of tasks that related to the management and operation of A Pty Ltd. The wife’s evidence in that respect is summarised at paragraph 32 of her trial Affidavit, as follows:
There was a distinct division of roles between [the husband] and I in relation to parenting throughout our marriage. This arose due to the fact that when [the husband] and I commenced cohabitation, I was already the primary carer of my daughter Ms F. From the time that B was born, I attended to almost all of her and Ms F’s day to day needs such as preparing and providing their meals, transporting them to and from school and their sporting activities and interests. I regularly took the children shopping to buy them clothes, school uniforms, books, and other educational equipment. I arranged and took the children to their medical appointments and I attended their parent-teacher interviews. [The husband] very seldom participated in any of these activities and I do not recall him bathing or dressing B at any time. I do recall that on one occasion he changed B’s nappy when she was approximately 18 months old.
At paragraphs 34 and 35, the wife further attests as follows:
34.During the period that [the husband] and I were living separated under one roof (between August 2014 and March 2015), I observed that [the husband] seldom engaged with the children. During that time, B attended cricket practice on Wednesdays and cricket matches on Saturdays. She also attended weekly swimming lessons and basketball games. B also started taking music lessons in 2015. In that time, I transported B to all of those activities. I do not recall [the husband] attending any of them.
35.F also attended karate lessons twice weekly. She attended softball practice and weekend matches. I transported F to those activities with the regular assistance of my parents and [the husband] did not attend any of them.
Comparatively, at paragraph 50 of his Affidavit, the husband states that, during the period of the parties’ relationship, he contributed to the care of the children, including changing their nappies, feeding them, bathing them, playing with them and nursing them through illnesses. The husband further attests that, as the children got older, he participated in their schooling, including assisting them with their schoolwork and homework, and that he attended the children’s sports carnivals, swimming carnivals, parent and teacher nights and other similar school activities.
At paragraph 51 of his Affidavit, the husband further attests to attending and providing assistance to B when she appeared with him in a commercial in approximately 2012, and when she was an actress in a movie. The husband further attested to attending various photo shoots with B during the period of the parties’ relationship. The husband also attests, at paragraph 52, that, during the period of the parties’ relationship, he would take the children to Sydney for a holiday possibly four (4) times per year, at which time they stayed in comfortable hotel accommodation and participated in various recreational activities such as visiting the zoo, the Powerhouse Museum, the Sydney Aquarium, Madame Tussauds waxworks museum, Chinatown and otherwise generally participating in activities around Sydney Harbour.
While, for reasons which I have previously set out, I generally prefer the evidence of the wife to that of the husband, I accept that parties’ perceptions of the care and support they provide for the children is subjective. For the purpose of valuing and weighing the husband’s non-financial contributions, I accept his evidence as to the role he played in caring for the children, including the child from the wife’s first marriage. Even accepting that evidence, however, I am satisfied that the wife was the party who was primarily responsible for parenting and homemaking responsibilities and she did, at the same time, undertake work associated with A Pty Ltd as I have earlier described.
Further, I assess that the husband was primarily involved in the business activities of A Pty Ltd, including in respect to its management and day-to-day operations. In circumstances where I am unable to resolve the parties’ respective criticisms which they make of the other in respect to the management, control and day-to-day operations of A Pty Ltd, I conclude that the respective contributions of the parties during the period of their relationship were equal.
Post separation contributions
The husband contends, at paragraph 65 of his Affidavit, that, after 28 March 2015 being the date when the wife left the former matrimonial home with the children, she did not permit the children to spend time with the husband, other than his attending B’s netball game once each Saturday, until September of that year. For the purpose of these proceedings, and without traversing the reasons for the wife’s conduct, I accept that evidence which has provided by the husband.
At paragraph 77 of his Affidavit, the husband attests to recommencing spending time with the children each Sunday, from 10am to 3pm, in the period from 6 September 2015. The husband further attests that, on 24 April 2016, Ms F stopped coming to his home with her sister on Sundays and that he did not see Ms F until 16 October 2016. The husband also attests that he continued to spend time with B every Sunday in accordance with that arrangement until 6 November 2016, and that he has not since spent any time with the children.
The evidence of the husband in these proceedings is that he is currently living in a caravan park. At paragraph 90 of his Affidavit, the husband states that “I still have a room set up at my home for Ms F and B. They have separate rooms”. The inclusion of that statement reinforces the opinion which I have formed that the husband’s Affidavit is substantially based on an Affidavit which he has previously filed in these proceedings.
The wife was not challenged on her evidence, at paragraph 75 of her trial Affidavit, that the husband currently pays child support in the amount of $8.49 per week in respect to B. She was also not challenged on her evidence that the husband paid a total sum of $53 in child support between 1 June 2017 and 20 June 2018.
The wife acknowledges, at paragraph 73 of her trial Affidavit, that, in the period from 2015 to 2018, the husband contributed a total sum of $17,000 towards the children’s school fees. She attests, however, that the husband has not made any further contributions since August 2018 and, save for his payments of child support which she describes as “minimal”, he has otherwise provided no other financial support for the children. In addition, for reasons which I have set out above, I accept the wife’s evidence set out in her Notice to Admit Facts filed 12 May 2020 that, in October 2014, the husband withdrew an amount of $22,000 from the joint National Australia Bank account which the parties utilised to pay the children’s school fees.
I am satisfied that, in the period subsequent to the parties’ separation, and in addition to supporting herself, the wife remains the sole carer of B and has been solely responsible for attending to her needs and financially supporting her. Similarly, I am satisfied that the wife was likewise solely responsible for Ms F, in the period after separation until Ms F reached adulthood. The wife has therefore made a superior contribution during the period post the parties’ separation.
Evaluation of s 79 contributions
As result of the wife’s superior initial contributions to which I have referred, I am of the opinion that she is entitled to a five (5) per cent adjustment in her favour.
For reasons which I have set out, I have been unable to make a determination as to the extent to which each of the parties’ respective roles concerning the operations of A Pty Ltd, and its ultimate sale, resulted in loss of productivity of that business and, ultimately, a reduction in its sale price. In the absence of an ability to make a finding in that respect, I have assessed the parties’ contributions during the period of their relationship as being equal. In that respect, I have found that the wife did her best in her capacity as the primary homemaker and the parent primarily responsible for the care and welfare of the children, while at the same time assisting in the management and administration and also the day-to-day operations of A Pty Ltd.
Conversely, I am satisfied that the husband devoted his skills and entrepreneurship to the operations of A Pty Ltd, and was substantially responsible for the successful development of that business until the financial year ending 30 June 2015. At the same time, I am satisfied that the husband did make a contribution in respect to homemaking responsibilities, and also in respect to the care of both the children.
I am also satisfied that, in the period subsequent to the parties’ separation, the wife was been the primary carer of both the children and performed that role until approximately November 2016, at which time both the children ceased having contact with the husband. Since that time, the wife has been the parent with sole parental responsibility and, other than in respect to school fees which the husband contributed towards until August 2018, the wife has been solely responsible for the financial support of the children in addition to attending to their day-to-day needs and necessary support. Accordingly, I am of the view that the wife is entitled to an additional adjustment of 10 per cent in respect to her superior contributions in the period subsequent to the parties’ separation.
In summary, I determine that the wife is entitled to an adjustment in her favour, as a result of the considerations to which I am to have regard under s 79(4) of the Act, of 15 per cent.
Relevant s 75(2) factors pursuant to s 79(4)(e) of the Act
Sub-section (2)(a) – the age and state of health of each of the parties
I have earlier set out the ages of the parties. The husband contends that he has been diagnosed with depression and anxiety, and that he has, at times, resorted to addictions, including alcohol, gambling and minor drug use. The husband attests to receiving therapy from a clinical psychologist, however, no report has been tendered from that treating psychologist. In those circumstances, the husband’s evidence in respect to the state of his mental health is inadmissible opinion in terms of s 76 of the Evidence Act.
As previously noted, the husband has, in my view, made unreasonable and indeed, improper imputations in respect to the extent of the wife’s mental health, which he further repeats at paragraph 212 of his Affidavit. The wife acknowledges, however, at paragraph 67 of her trial Affidavit, that, as result of deterioration of the parties relationship, she suffered depression and consulted with her general practitioner who, on several occasions, referred her to a psychiatrist. The wife further acknowledges that, on 29 January 2015, she began consulting a local psychotherapist, however, since 2015, she has not felt the need to seek further assistance in respect to any mental health issues.
Sub-section (2)(b) – the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
At paragraph 100 of his Affidavit, the husband states:
I am self-employed and my work hours are flexible. There is a general manager, Ms Z, who is employed to run the business. I attend New Zealand regularly (usually several times per year) and Europe and the US every year for business purposes. The New Zealand trip is for 2 weeks and the Europe and US trip is normally between 4-6 weeks.
That account, however, appears to have been superseded by more recent evidence given by him during cross examination, whereby the husband states that he is receiving an age pension and he is not doing any paid work.
I have earlier detailed the parties’ evidence regarding the property which they contend is in their possession. For reasons which I have set out, I am satisfied that the husband has failed to disclose the totality of his property, including the proceeds of sale of the items of property which I have earlier identified.
The wife is currently employed as an office clerk with the new owners of A Pty Ltd and she receives an income of $67,855.53 per annum.
Sub-section (2)(c) – whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The wife has had sole responsibility of caring for the children since November 2016.
At paragraph 211 of his Affidavit, the husband attests that “[t]hroughout the marriage and subsequently I have constantly paid my half of all school invoices presented to me”. During the course of the proceedings, the wife confirmed that she does not want the husband to be aware of the school in which B is enrolled. The husband’s evidence in respect to the amount of school fees which he has paid was unsatisfactory, with the husband asserting at one point that he was continuing to make those payments. He continued to make that assertion until he ascertained that B was no longer attending the school for which he asserted that he continues to pay fees, and that he had not been advised by the wife of the name of the school that B is currently attending. The husband acknowledged that, in those circumstances where the wife has not presented him with such school fees for payment, he has not been paying B’s school fees for a period of time. In the context of that unsatisfactory evidence of the husband, I accept the wife’s evidence that she has been solely responsible for B’s school fees since August 2018. I further accept the wife’s evidence that, in the period from 2015 to January 2021, she has contributed over $85,000 towards school fees and additional related expenses such as the purchase of textbooks and uniforms.
The wife was further not challenged on her evidence that she remains responsible for paying for and facilitating all of B’s extracurricular activities, including dance classes and competitions, maths tuition, driving lessons and social events with her friends. In addition, the wife was not challenged on her evidence that she is responsible for all of B’s medical and dental appointments and expenses and personal care activities such as haircuts.
Sub-sections (2)(d) and (e) – commitments of each of the parties that are necessary to enable the party to support himself or herself, and a child or another person that the party has a duty to maintain; and the responsibilities of either party to support any other person
In addition to continuing to be the primary carer of B, who is currently aged 16 years, the wife was also the primary carer of Ms F, who was, as at the date of the parties’ separation in 2014, aged 16 years, in the period from 2015 until Ms F reached adulthood.
Sub-section (2)(f) – the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth, of a State or Territory or of another country; or any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party
As noted, the husband gave evidence that he is in receipt of the age pension. The husband further attests to having no superannuation, however, for reasons I have earlier set out, I am not satisfied that he has disclosed his interests in any superannuation entitlements. I have earlier set out the amount of her superannuation entitlement which has been disclosed by the wife.
Sub-section (2)(g) – where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The husband contends that, as a result of these proceedings, he has been reduced from a situation wherein he operated a successful business to circumstances where he has minimal property and, as disclosed in his Financial Statement, he is living in a caravan park for which he pays $280 per week in rent. I do not, however, accept the husband’s evidence that his financial circumstances are as dire as those which he has attested to in these proceedings. Specifically, as I have set out above, I am satisfied that the husband remains in possession of a number of significant items of property which he has not disclosed in these proceedings, including the proceeds of sale from other items of property which I have identified.
At paragraph 78 of her trial Affidavit, the wife attests that she and B currently live with other family members of the wife, as a result of her having insufficient income to pay rent in addition to school fees and living expenses for herself and B. I accept the wife’s evidence in that respect.
Sub-section (2)(h) – the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income
Neither party has presented evidence that they are desirous of undertaking any additional course or training program.
Sub-section (2)(ha) – the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant
Neither party has contended that this is a relevant consideration.
Sub-section (2)(j) – the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party
I am satisfied that, as a result of the wife undertaking responsibilities as the primary carer of the children, as well as undertaking the majority of homemaking tasks, the husband was able to devote a greater amount of time to the business activities of A Pty Ltd.
Sub-section (2)(k) – the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The parties’ relationship was a little over 14 years.
During the period of the parties’ relationship, the wife changed her career from working as a healthcare professional to working in A Pty Ltd. The wife now works with the new owners of A Pty Ltd performing clerical tasks. No evidence has been presented which could satisfy the Court that the wife’s earning capacity has been adversely impacted as a result of her decision to change careers or the time that she took out of the workforce to undertake child caring responsibilities.
Sub-section (2)(l) – the need to protect a party who wishes to continue that party’s role as a parent
As previously noted, the wife has sole parental responsibility and care for B who does not spend any time with the husband.
Sub-section (2)(m) – if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
Neither party disclosed the financial circumstances of any other person with whom they live and neither party contended that the other is in receipt of financial assistance from any other person.
Sub-section (2)(n) – the terms of any order made or proposed to be made under section 79 in relation to the property of the parties; or vested bankruptcy property in relation to a bankrupt party
The orders which I make in these proceedings will result in an outcome whereby the wife receives the totality of funds held in the controlled monies accounts, as well as requiring the husband to transfer to the wife the title in his name for the historic motor vehicle 1 which remains in her possession.
Sub-section (2)(naa) – the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to a party to the marriage; or a person who is a party to a de facto relationship with a party to the marriage; or the property of or vested bankruptcy property in relation to a person covered by the categories aforementioned
This is not a relevant consideration.
Sub-section (2)(na) – any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
It is not in dispute that the husband pays to the wife child support in respect to B currently in the sum of $8.49 per week.
Sub-section (2)(o) – any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The husband is entitled to acknowledgement of the fact that, at the commencement of the parties’ relationship, Ms F, the wife’s daughter from an earlier marriage, was only 2 years of age. As at the date of separation, Ms F was 16 years of age. The husband’s contribution to assisting in the care of Ms F as his non-biological child, and in providing financial support for her must be assessed in a meaningful way: see Zaruba & Zaruba (2017) FLC 93–776 at [53], citing Robb and Robb (1995) FLC 92-555.
I have, however, also taken into account other factors to which I have earlier noted. Those factors, which significantly weigh against an adjustment in favour of the husband, include the following:
(1)the husband disclosed in his Financial Statement filed 11 March 2021 that his bank account with the S Bank contained the sum of $2,000, as at the date of hearing, but which, prior to the hearing, had clearly been used for the deposit and withdrawal of much more significant amounts of funds, including in respect to certain items of property which the husband failed to disclose having sold;
(2)the husband failed to disclose that the sale price he received for the Historic motor vehicle 3 should have been $50,000, and not $500 as stated in his Financial Statement filed 11 March 2021;
(3)the husband disclosed the sale price of the Historic motor vehicle 4 is $10,000, in circumstances where I am satisfied for the reasons set out above that the sale price was actually $22,250;
(4)the husband failed to disclose that, prior to the hearing and contrary to consent orders made by this Court, he had sold his yacht for $75,000, in circumstances where he has not provided documentary evidence confirming that purchase price, and noting the wife’s evidence contains reference to an advertisement for sale in respect to the yacht listing the sale price at almost twice that price disclosed by the husband;
(5)the husband failed to disclose the proceeds of insurance, which he received in respect to a damaged caravan, in the sum of $82,700;
(6)the husband was unable to explain a deposit, which he made into his bank savings account with S Bank, in the sum of $42,700;
(7)the husband was unable to explain a deposit made into his account with the S Bank from a Mr DD, in the sum of $16,400;
(8)the husband stated that he had “no idea” regarding the source of the cheque deposited into his account with the S Bank, in the sum of $28,000;
(9)the husband was unable to explain an entry in his Commonwealth Bank Smart Access account, in the sum of $9,900;
(10)the husband had not recorded in his Financial Statement filed 11 March 2021 the proceeds from the sale of a motor scooter in the sum of $8,450;
(11)s the husband has not either declared his ownership in respect to the following items, or identified the circumstances in which they were sold, or otherwise disposed of, and what, if any, sale price was obtained for those items, being:
(a)Motor vehicle 4,
(b)Motor vehicle 3,
(c)Historic motor vehicle 2,
(d)Historic motor vehicle 2 (Shell),
(e)Motor vehicle 1 (…),
(f)Truck 1 (…),
(g)Truck 2 (…),
(h)Motorcycle 3 (…),
(i)Motorcycle 4, and
(j)Dingy boat;
(12)the husband has not disclosed how he applied the sum of $406,457.52 which I have found that he borrowed from A Pty Ltd;
(13)the husband has not explain how he has applied the sum of $1,218,803.86, which I am satisfied were withdrawn by him from the accounts of A Pty Ltd in the period from 3 November 2014 to 13 March 2015; and
(14)the husband has not explained why he withdrew the sum of $22,000 from the parties’ jointly held National Australia Bank account, in which the children’s school fees were being held, and how he has applied those funds.
Sub-sections (2)(p) and (q) – the terms of any financial agreement and any Part VIIIAB financial agreement that is binding on the parties to the marriage
This consideration is not relevant.
Evaluation of s 75(2) factors
Leaving aside those considerations to which I have referred in respect to s 75(2)(o) of the Act, I am of the opinion that the wife is entitled to an additional adjustment of 15 per cent, in circumstances where she is solely responsible for caring and supporting B, including providing for B’s financial needs. Those needs include expenses associated with B’s education, health, extracurricular activities and social activities. This is in circumstances where the husband has paid, and continues to pay, just $8.49 per week by way of child support.
In addition, I am further of the opinion that, as result of the husband’s inadequate disclosure, which I have detailed above in considering the factor set out in s 75(2)(o) of the Act, I am satisfied that the wife is entitled to an additional adjustment of 20 per cent in her favour. To avoid doubt, in the assessment of that sum, I have had regard to the contribution made by the husband by way of financial and non-financial support in the care of Ms F, during the period of the parties’ relationship.
CONCLUSION
For the reasons which I have set out above, I am satisfied that it is appropriate, just and equitable for an order to be made requiring the totality of the identifiable property, which I have included in the balance sheet of the parties, remaining with the wife and, insofar as it is not currently in the name of the wife, being so transferred to her.
However, in taking a holistic evaluation of the circumstances of this case, including the husband’s failure to constructively engage in this litigation, I am of the view that it is a futility requiring the husband to deliver to the wife those items of property which he refers to, in his Financial Statement filed 11 March 2021, as remaining in his possession. That reality appears to be implicitly acknowledged by the mother, in respect to her proposed order 6 as set out in her Case Outline document marked ‘Exhibit G’ in these proceedings.
This is not the case, however, in respect to the Historic motor vehicle 1 which is in the wife’s possession but remains registered in the name of the husband. During the course of the proceedings, the husband indicated that he had no difficulty with that registration being transferred to the wife, as reflected in proposed order 2 as set out in his Case Outline document marked ‘Exhibit B’ in these proceedings. The Court trusts that he will facilitate that occurring, and, should he fail to do so, the orders I make in these proceedings provide that arrangements can be made for the necessary transaction to be executed by a Registrar of this Court.
Essentially, therefore, I make orders as proposed by the wife, save to the extent that I have been unable to identify the property over and above those monies held in the controlled monies accounts, totalling $275,000 which the wife seeks to be transferred to her in accordance with proposed order 2 as set out in her Case Outline document. Therefore, I will not make that order sought by the wife. I will, however, make orders that the totality of funds currently held in the controlled monies accounts are to be paid to the wife. As I have noted, I will further order that the husband transfer the registration of the Historic motor vehicle 1 to the wife.
Finally, I find that the ancillary orders otherwise proposed by the wife are appropriate to give effect to the purpose and intent of the distribution which I have determined to be just and equitable. Specifically, those ancillary orders will confirm that the parties’ superannuation interests lay where they currently exist, and will further confirm that the parties are each responsible for debts and liabilities that currently exist in their own names.
For these reasons, I am satisfied that the orders set out at the commencement of these reasons for judgment represent an appropriate, just and equitable adjustment of the parties’ property.
I certify that the preceding two hundred and eight (208) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 28 May 2021
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