Sebastian & Sebastian (No.5)
[2013] FamCA 191
•28 March 2013
FAMILY COURT OF AUSTRALIA
| SEBASTIAN & SEBASTIAN (NO. 5) | [2013] FamCA 191 |
| FAMILY LAW – PROPERTY – Complex and extensive s 79 proceedings – Parties’ significant wealth – Successful sale of business established during the marriage – Property largely controlled by husband post-separation – Initial contributions – Substantial gifts to husband including a 50 per cent remainderman interest in a deceased estate – Approach to s 79 post-Stanford – Assessment of contributions – Add-backs sought for post-separation expenditure – Add-backs for paid legal fees – Mathematical approach –Full and frank disclosure – Duty of parties – Subpoenas – Specific questions and answers – Exhaustive and meticulous investigation of the property of the parties and their financial conduct – Section 75(2) relevant matters – Section 75(2)(o) adjustment – Future earning capacity and the resources of the parties – Standard of living – Whether real property was held on trust for a third party – Global or two-pools approach – Ascertaining the value of a deceased estate where party is a remainderman subject to a life interest – Possible future litigation regarding taxation advice – Extensive objections to affidavit evidence – Division of any proceeds received therefrom – Conduct of parties during the proceedings – Observation of conduct of parties and witnesses – Dispute as to ownership and possession of former matrimonial home – Dispute as to whether a transfer of property or a cash lump sum is appropriate – Split of superannuation entitlements. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 117 Black and Kellner (1992) FLC 92-287 | |
| APPLICANT: | Ms Sebastian |
| RESPONDENT: | Mr Sebastian |
| FILE NUMBER: | MLC | 6522 | of | 2010 |
| DATE DELIVERED: | 28 March 2013 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Young J |
| HEARING DATE: | 14, 15, 16, 17, 20, 21, 22 August 2012, 14, 15, 16, 17, 18, 21, 22, 23, 24, 29, 30, 31 January, 1 and 7, 26 and 27 February 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Geddes QC with him Ms Johns |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE RESPONDENT: | Mr North SC with him Mr Gates |
| SOLICITOR FOR THE RESPONDENT: | Moores Legal |
Orders
IT IS ORDERED:
THAT pursuant to s 79 of the Family Law Act1975 (Cth) (“the Act”) the property of the parties, excluding their superannuation entitlements, be divided:
(i) as to 66.5 per cent to the husband; and
(ii) as to 33.5 per cent to the wife.
THAT as part of her property division the wife retain ownership and possession of the following, at a total net value of $1,616,441:
§Property 2, Suburb K;
§her 2010 Mercedes Benz;
§the household contents of Property 1, Suburb K (“former matrimonial home”);
§her jewellery;
§the first and second partial property settlements;
§the monies in her NAB bank account number …67;
§the monies in her ANZ bank account number …78;
§the value of her legal fees already paid;
§her credit card liability owing to ANZ bank;
§her credit card liability owing to NAB bank; and
§her liability to Mercedes Benz Finance.
THAT in addition to the items identified in Order 2, within ninety (90) days of the date of these Orders (“the Date”) the husband pay to the solicitors for the wife, on trust for her, a lump sum cash payment of $3,374,365 (“the Lump Sum”).
THAT in default of payment of the Lump Sum by the Date the husband thereafter pay to the wife interest on the lump sum or on any outstanding balance that may exist from time to time, with interest to be calculated and payable quarterly in arrears at the rate prescribed from time to time in the Family Law Rules 2004.
THAT within twenty-one (21) days of her solicitors receipt of the whole of the Lump Sum the wife:
(a)vacate the former matrimonial home;
(b)resign any office held by her and transfer and assign to the husband at his expense any beneficial interest or shares held by her in any of:
i)Sebastian PM Pty Ltd;
ii)Sebastian PM Trust;
iii)PPG Pty Ltd;
iv)S Family Trust;
v)LG Pty Ltd;
vi)LG Trust;
vii)PP Pty Ltd;
viii)PP Trust;
ix)RRR Pty Ltd; and
x)RRR Trust
(“the Entities”).
THAT on vacating the former matrimonial home the wife is permitted and authorised to remove the furniture and chattels therein and her personal contents but all fixtures and fittings must remain in place.
THAT the husband indemnify and keep indemnified the wife for all debt(s) and liabilities of or arising out of the wife’s involvement in the Entities or any of them, as director, shareholder or otherwise howsoever.
THAT in the event that the Lump Sum is not paid in full by the Date the husband, at his expense, forthwith do all acts and things and sign all documents required to forthwith transfer the former matrimonial home to the wife on trust for sale (“the Sale”) upon the following terms:
(a)the selling agent be as agreed between the parties and failing agreement as nominated by the President of the Real Estate Institute of Victoria or his or her nominee;
(b)the reserve price be $3,000,000 or such other sum as may be agreed in writing between the parties;
(c)the sale be by public auction and the contract be prepared on an unconditional cash settlement basis; and
(d)such other terms or conditions as are agreed in writing between the parties.
THAT the proceeds of the Sale be applied as follows:
(a)first, to pay the costs and commissions and all other necessary and proper expenses of the Sale and in the adjustment of rates, taxes and other outgoings properly payable;
(b)secondly, to pay to the wife’s solicitors on her behalf so much of the Lump Sum as remains outstanding together with default interest payable thereon; and
(c)thirdly, the balance then remaining, if any, to the husband.
THAT there be liberty to apply, both as to the terms and conditions of the sale and the division of the sale proceeds, reserved to both parties upon proper documents being filed and served.
THAT liberty be further reserved to the wife, if there is a shortfall in the monies paid to her upon the Sale of former matrimonial home, to thereafter apply for the immediate sale, on terms and conditions to be agreed or otherwise determined, of the Peninsula property.
THAT until the whole of the Lump Sum has been paid to the wife, and save and except for the sole purpose of raising or securing monies to pay that Lump Sum, the husband personally and in his capacity as director of RRR Pty Ltd and as appointor of the RRR Trust be and is hereby restrained by himself or his servants or agents from selling, encumbering, mortgaging, charging or in any way disposing of or dealing with the real properties situate at and known as:
(a) the former matrimonial home; and
(b) the Peninsula property.THAT the husband be and is hereby restrained from dealing with the P Superannuation Fund (“the P Fund”) or the S Family Superannuation Fund (“the S Fund”) other than in compliance with these Orders and without limiting the generality thereof and pending compliance with these Orders the husband must not make or cause any transaction to take place in relation to either superannuation fund without the wife’s prior written consent which must not be unreasonably withheld.
THAT pursuant to Section 90MT(4) of the Act a base amount equivalent to 33.5 per cent of the combined value of the parties’ superannuation entitlements in the P Fund and the S Fund as at 4 January, 2013 (“the Superannuation Split Date”) less the value of the wife’s entitlement in the S Fund as at the Superannuation Split Date be allocated to her out of the interest of the husband in the P Fund.
THAT pursuant to Section 90MT(1)(a) of the Act the wife is entitled to be paid the base amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) and the husband’s entitlement to payments out of his interest in the P Fund is correspondingly reduced by force of this Order.
THAT these Orders bind the Trustee of the P Fund (“the Trustee”) and take effect from the operative time being the Superannuation Split Date.
THAT the Trustee must comply with their obligations as are imposed upon eligible superannuation plans under the provisions of the Act and the Regulations.
THAT after service of the payment split notice pursuant to the provisions of Regulation 7A.03 of the Superannuation Industry (Supervision) Regulations 1994 (“SIS Regulations”), the wife do all such acts and things as may be necessary, including but not limited to, exercising her request pursuant to Regulation 7A.06(1) of the SIS Regulations for the rollover or transfer of the transferrable benefits out of the husband’s interest in the P Fund to a fund of her choosing in accordance with Regulation 7A.12 of the SIS Regulations.
THAT until the happening of any of:
(a)the transfer or 'rolling over' into another superannuation fund or superannuation account of the payment split; or
(b)the wife satisfies a condition of release and is paid the payment split created by these Orders; or
(c)the wife executing a waiver of rights within the meaning of Section 90MZA of the Act in relation to the payment split;
the husband be and is hereby restrained by himself his servants or agents from executing a Death Benefit Nomination in favour of any person or doing any other act or thing which would render any part of his interest in the P Fund a 'not splittable payment' within the meaning of Regulations 12 or 13 of the Regulations.
THAT within thirty (30) days the parties do all such things and sign all documents required to roll out the wife's member entitlements with the S Fund to a complying fund nominated by her and thereupon she resign any office held and transfer to the husband at his expense any shareholding held by her in S Family Superannuation Pty Ltd and in order to effect the rollout, the husband be authorised to liquidate fund investments on behalf of the Trustee.
THAT in the event that the husband, his servants or agents or any of the Entities obtains legal advice as to a potential claim against X Partners, or any member of that accounting practice, with respect to monies paid in capital gains tax, penalties, interest or other costs or expenses arising from the sale of the Business Y business and/or any entities associated with that business (“the Claim”), he provide the wife with notice in writing of his intention to obtain that advice and thereafter serve upon her a copy of any invoice or account received by him for such advice.
THAT irrespective of the contents of any such legal advice the husband is under no binding legal obligation to commence court proceedings against X Partners or any member of that accounting practice.
THAT in the event that within thirty (30) days of receipt of the invoice the wife:
(a)pays or causes to be paid her required financial contribution fixed at 33.5 per cent of the invoice; and
(b)provides to the husband an acknowledgement in writing that she will keep such advice confidential and only disclose the contents to obtain her own independent legal advice and that the advice furnished by the husband to her is subject to a common legal professional privilege which may not be waived by her without the husband’s express consent first having been obtained in writing
the husband within fourteen (14) days of receipt of the payment and acknowledgement referred to in (a) and (b) herein provide to the wife true and complete copies of all advice obtained by him with respect to the Claim.
THAT in the event that the husband institutes Court proceedings in respect of the Claim (“the Proceedings”), he provide notice to the wife not less than fourteen (14) days prior to the commencement of such action.
THAT upon receipt of such notice the wife has twenty-one (21) days to elect, in writing to the husband, to participate in the Proceedings with respect to the Claim.
THAT in the event that the wife makes such an election:
(a)the wife be responsible for 33.5 per cent of all legal costs and disbursements incurred in the Proceedings and she is to pay in that proportion all invoices within thirty (30) days of her receipt thereof and any failure to pay the same by the due date shall be deemed an election by her to withdraw from the Proceedings;
(b)the husband be responsible for the balance of all legal costs and disbursements incurred in the Proceedings;
(c)the husband be at liberty to make all decisions with respect to the conduct of the Proceedings including decisions to compromise or abandon the Proceedings or any claim made within the Proceedings without the prior consent of the wife;
(d)the husband provide the wife with copies of all written communications with his legal practitioners in the Proceedings within seven (7) days of receipt of the same;
(e)the wife may at any stage elect to withdraw from participating in the Proceedings and cease to be then obliged to contribute to costs incurred by the husband after the date on which he is served with a written notice of withdrawal; and
(f)in the event that the Proceedings result in the husband recovering any monies in satisfaction of the Claim, or any part thereof, and the wife has contributed to the costs of the Proceedings in accordance with these orders, the husband pay her a sum equal to 33.5 per cent within fourteen (14) days of receipt of the same, only if at the time that the husband becomes entitled to the monies the wife is still a participant in the Proceedings and has not exercised her right of withdrawal.
THAT if at any time the husband should become liable for the legal costs or disbursements, by reason of Court order or otherwise howsoever, of any other party that joined, or was joined, to the Proceedings, then the wife is to pay to the husband a sum equal to 33.5 per cent of all such costs that were incurred whilst she remained a participant in the Proceedings.
THAT unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent Orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses in action) in the possession, management or control of such party as at the date of these Orders; and
(b)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled or controls pursuant to these Orders.
THAT subject to the rules of the Qantas Frequent Flyer Plan the husband forthwith do all acts and things and sign all necessary documents required to transfer or assign, by instalments if required, as soon as practicable but within twelve (12) months of these Orders, a total of 1,000,000 points to the wife’s Qantas Frequent Flyer account.
THAT all questions of legal costs and expenses of and incidental to these proceedings be reserved for hearing to Monday 8 April 2013 at 10.30 am.
THAT any such costs application be filed and served by 1.00pm on Thursday 4 April 2013 and be accompanied by a written summary of legal argument of not more than two (2) pages in length.
THAT if no such application is filed by that time the hearing date of 8 April 2013 be vacated.
THAT otherwise, and save for any and all issues of costs, all extant applications, both interim and final, are dismissed and the proceedings are removed from the docket of Young J.
THAT after the expiration of thirty (30) days and if no Notice of Appeal has been filed, all documents, records and files that were subpoenaed to Court in the s 79 proceedings, be forthwith returned by the Subpoena Clerk of the Family Court of Australia Melbourne Registry, to the person or organisation who had forwarded same to the Court.
THAT unless otherwise ordered all exhibits tendered during the proceedings are to remain on the Court file.
IT IS CERTIFIED
THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel including Senior Counsel for each of the husband and wife.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sebastian & Sebastian has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
INDEX
ISSUES
CONDUCT OF PROCEEDINGS
ORDERS SOUGHT
AFFIDAVITS RELIED UPON
OBJECTIONS TO AFFIDAVIT EVIDENCE
WRITTEN SUBMISSIONS
PROCEDURAL CHRONOLOGY
BACKGROUND FACTS
WITNESSES ORDERED OUT OF COURT
PARTIAL PROPERTY ORDERS
PREVIOUS COURT ORDERS
MAGISTRATES’ COURT – INTERVENTION ORDERS
STANDARD OF PROOF
OBSERVATION OF WITNESSES
FAMILY LAW ACT 1975 (CTH) (“the Act”)
SECTION S75(2) FACTORS
MATHEMATICAL APPROACH
GLOBAL OR ASSET-BY-ASSET (“TWO POOL”) APPROACH
DATE FOR DETERMINING THE NET ASSET POOL
ASSET AND LIABILITY SUMMARY STATEMENTS
AGREED REAL PROPERTY – OWNERSHIP AND NET VALUATIONS
AGREED PERSONAL AND BUSINESS ASSETS
LIABILITIES
ISSUES IN DISPUTE
WIFE’S ADD-BACKS SOUGHT
HUSBAND’S ADD-BACK SOUGHT
SUPERANNUATION
LEGAL FEES
PRE-MARRIAGE FINANCIAL CONTRIBUTIONS
LEGAL PRINCIPLES – INITIAL CONTRIBUTIONS
WIFE’S EVIDENCE
THE WIFE’S MOTHER’S EVIDENCE
MR H’S EVIDENCE
MS J’S EVIDENCE
MS N’S EVIDENCE
MR Z’S EVIDENCE
HUSBAND’S EVIDENCE
THE HUSBAND’S FATHER’S EVIDENCE
THE HUSBAND’S MOTHER’S EVIDENCE
MR R’S EVIDENCE
MS D’S EVIDENCE
FINDINGS ON PROPERTY IN DISPUTE
ADD-BACKS – LEGAL PRINCIPLES
ADD-BACKS SOUGHT BY WIFE
ADD-BACKS SOUGHT BY HUSBAND
MR F – BG FINANCIAL SERVICES FIRM REPORT
FULL AND FRANK DISCLOSURE – LEGAL PRINCIPLES
ALLEGED LACK OF FULL AND FRANK DISCLOSURE BY THE HUSBAND
CONCLUSION ON THE PROPERTY AND LIABILITIES OF THE PARTIES
IS IT JUST AND EQUITABLE TO PRONOUNCE A S 79 ORDER?
THE PROPERTY AND LIABILITIES TO BE RETAINED BY THE WIFE
PROPERTY AND LIABILITIES TO BE RETAINED BY THE HUSBAND
ASSESSMENT OF s 79(4) CONTRIBUTIONS
ASSESSMENT OF S 75(2) FACTORS
ASSESSMENT OF THE S 75(2)(o) FACTOR
OVERALL DIVISION OF PROPERTY
LUMP SUM CASH PAYMENT TO THE WIFE
DIVISON OF THE PARTIES’ SUPERANNUATION
CONCLUSION
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 6522 of 2010
| Ms Sebastian |
Applicant
And
| Mr Sebastian |
Respondent
REASONS FOR JUDGMENT
ISSUES
This lengthy and exhaustive Judgment arose from a very strongly contested 23 day defended property hearing where the parties filed and relied upon a large number of affidavits (from themselves and many witnesses) which were substantial and complex in size and content, with excessive annexures, detail and information. There were also over 100 exhibits tendered during the hearing.
The first few days of hearing were spent hearing legal argument and delivering rulings upon forceful challenges made by Senior Counsel for both parties to the admissibility of much of the affidavit evidence and annexures.
Thereafter issues of and concerning the identification and quantum of the existing property of the parties, full and frank disclosure, contributions, s 75(2) factors, extended cross-examination of the parties and their witnesses, resolving legal issues and several ex tempore rulings largely occupied the balance of the hearing days, with the final two days devoted to the delivery of oral and written submissions.
The approach of the clients that I observed in Court was confrontational towards each other, almost a win at all cost approach. Both solicitors were enthusiastic in the performance of their professional obligations, meticulous and overly focused upon all issues of fact and chasing down, or responding to, the last dollar sought.
The affidavits, specific questions asked and answered, subpoenas issued and documents received, annexures, aide memoires prepared and tendered and generally the whole approach to the case, on the instructions of the clients, was overwhelming.
Senior and Junior Counsel were clearly instructed to contest every available issue and that is best evidenced by the length of cross-examination and the many voluminous and complex annexures and exhibits that were tendered in the hearing.
That said the hearing was conducted with vigour but almost always in a professional manner.
The Judgment is long partly because of the facts of the case, the very substantial body of contested evidence, the required findings, the s 79(4) and s 75(2) issues and ultimately the very detailed life history of the parties both within the marriage, their extended families, their corporate structures, investments, expenditure and the inheritance issue.
The length of this Judgment is also explained because, with my imminent retirement from the Bench, I had to decide whether to include matters of fact which required considerable Court time but ultimately did not impact upon my s 79 orders. One example is the evidence of a chartered accountant called by the wife which occupied considerable Court time and no doubt significant expense to the parties. That evidence was ultimately not relied upon by the wife. However, because s 117 issues may later arise I have elected to include that matter, and various other issues within the Judgment. If I were to hear and determine any future costs application then I am fully understanding of the matters, but if it were to fall to another judge to determine costs issues at a subsequent date, then I concluded it was important that those matters be encapsulated and explained within these Reasons for Judgment.
I record at the outset of this Judgment that the Court made many efforts and recommendations for the parties to consider a negotiated outcome. The reality was that it was never an option which one or both of these parties would have considered.
This hearing commenced on 14 August 2012 and was adjourned part-heard for reasons explained later in the Judgment. When it resumed in mid January 2013 the High Court had handed down its decision in Stanford v Stanford (2012) 293 ALR 70; HCA 52; FLC 93-518, and thus Senior Counsel for both parties devoted some considerable time in their final written and oral submissions to the approach to be taken in a s 79 application, including the approach to add-backs.
Both the evidence and the approach adopted by both parties at the commencement of the hearing had been, in part, focussed on proving each of the numerous claimed add-backs. The hearing was opened and the wife gave evidence on that basis in August 2012.
I have considered the Reasons for Judgment delivered by the High Court in Stanford and determined my approach to this case in light of that decision, including, most importantly, a consideration of what are just and equitable orders for these parties.
CONDUCT OF PROCEEDINGS
This matter was originally to be listed for a hearing on both parenting and property issues and the time estimated by solicitors and Counsel for the total hearing was up to eight days. By earlier order of the Court, the parenting issues were split from the property issues and it was ordered that the property issues be heard and determined prior to the parenting issues.
It is necessary to explain upfront the way in which these proceedings were presented to the Court, the conduct and management of the hearing and the reasons for the necessity of the lengthy adjournment from August 2012 until the resumption of the hearing on 14 January 2013.
The first four days of hearing in August of last year were primarily occupied with interlocutory issues, the substantial objections taken by Senior Counsel for both parties to the contents of the parties affidavits and those of their witnesses. That part of the hearing and the rulings and orders that were required unfortunately occupied almost the first full week of the trial.
The wife’s case was not opened until 20 August 2012, the fifth day of the hearing. Leave was sought to extend her examination in chief to provide evidence to the Court of further matters that had arisen and in particular to respond to the affidavit evidence of the husband and his witnesses.
The order for the filing of affidavits had previously provided for both parties to file and serve their affidavit material on the same day and thus neither party had the opportunity to respond to matters of fact raised by or on behalf of the other party.
On 21 August 2012, when the wife was still giving her evidence in chief, the Court was approached by both Senior Counsel and informed that the wife’s Senior Counsel had become unwell and was needing to depart for medical advice and treatment at a hospital. By consent the matter was adjourned to the following day. Senior Counsel was still in hospital and unable to attend Court on the following day and an application was made by his Junior, and not opposed by Senior Counsel for the husband, for the adjournment of the hearing to resume on a subsequent date as fixed by the Court.
On 22 August 2012 I therefore ordered that the matter be adjourned part-heard before myself and be relisted for mention on 7 November 2012. The parties accordingly prepared draft minutes of orders dealing with the filing of further material and other procedural matters and I made those orders on 22 August 2012.
The orders provided for the filing of further updated and reply affidavits and updated valuations. Significantly, it was then agreed by the parties and ordered that 31 August 2012 be the date for the determination of the net asset pool of the parties. That order was made in the context that the wife had previously sought to prove the property values as at 2 May 2012, which date was opposed by the husband who was intent on proving the net value of all property as at August 2012.
Additionally, orders were made for updated discovery and disclosure, production of documents pursuant to subpoenas and for the husband to notify the wife in writing prior to any significant financial transaction or event.
The estimate of Senior Counsel was that a further period of eight days was required to conclude the property proceedings and that is the explanation as to why the matter was then adjourned part-heard before me until 14 January 2013. In January and February 2013 the hearing occupied a further fourteen days, plus two days of oral submissions. That was far too long and I regularly reminded all practitioners of their inaccurate estimates.
ORDERS SOUGHT
WIFE
The wife’s s 79 orders were substantially amended both during and near to the conclusion of the hearing. I have therefore identified each of the documents filed on behalf of the wife which identified the particular orders sought, from time to time, and the variations which she adopted as to the division of net property. This background is intended to better explain the continual amendment of the orders sought in the context of the continuing evidence and further disclosures, or otherwise her acceptance of legal advice.
The wife originally detailed her orders sought in her Further Amended Initiating Application filed 26 July 2012. Those orders were also reflected in her initial Outline of Case document filed 10 August 2012 (document number 104 in the Court Index).
As an overview she then sought orders for an equal division of the net property of the parties, a superannuation split effective of an equal division of the parties’ total entitlements and other specific orders and indemnities.
Under that umbrella the wife specifically sought:
§a transfer to her name, at the sole expense of the husband, the property at Property 1, Suburb K (“Property 1, the former matrimonial home”), being the former matrimonial home and the home in which she presently resides;
§that she retain ownership of Property 2, Suburb K (“Property 2”), but on the basis that only half of the agreed value of that property be brought to account within the net asset pool; and
§that she retain all of her jewellery, personal items, household contents, cash at bank and carry the debt owing on the leased equity in her Mercedes Benz motor vehicle;
The husband holds 3,470,604 Qantas Frequent Flyer points and the wife holds 925,000 points. Subject to the rules of that airline, the wife then sought a yearly transfer of the maximum sum of points available, or otherwise the yearly purchase of airline tickets to her benefit, up to a total amount of 2,000,000 points.
Otherwise the overarching order initially sought by the wife was that the husband pay within thirty days a lump sum cash payment so that, together with the real and other property that she sought to retain, she would be awarded 50 per cent of the net property of the parties.
On 15 January 2013 (the ninth day of hearing) the wife’s Senior Counsel updated her orders sought and presented a document to the Court which was marked as document number 152 in the Court Index.
It is necessary to record in some detail those specific orders then sought as they differed both from those upon which the trial originally commenced on 14 August 2012 and those finally sought on behalf of the wife.
Mid hearing therefore the wife sought amended s 79 property orders, which in summary included:
§a division of 50 per cent of the net assets, excluding superannuation;
§the transfer to her sole name of the former matrimonial home;
§her retention of Property 2, Suburb K;
§her retention of her partial property settlement payment of $500,000 and her personal chattels, jewellery, furniture and her equity in the Mercedes Benz AMG motor vehicle in her possession;
§repayment of her legal fees and disbursements;
§a transfer of up to 2,000,000 Qantas frequent flyer points, subject to the rules of that scheme;
§an equal division of the superannuation entitlements of the parties and appropriate restraining and other procedural orders in that regard;
§a payment equal to one half of any payment or refund of monies or interest which the husband may receive from the Australian Taxation Office or from his former accountants, X Partners;
§that the husband retain the investment properties, corporate entities and trusts and his personal assets, shares, motor vehicles and the like; and
§otherwise each party be and remain solely liable for and indemnify the other against any liability encumbering any item of property to which that party was entitled pursuant to the final orders of the Court.
On the morning of 24 January 2013 (16th day of hearing) Mr Geddes foreshadowed a further formal amendment of the wife’s orders sought. He advised the Court that the wife would shortly file orders sought whereby:
§the wife conceded her Application for ownership of the former matrimonial home and agreed either to the husband resuming occupation of that property, or alternatively to a sale;
§if a sale of the former matrimonial home occurred the net divisible pool of property should reflect the actual sale price and expenses associated therewith rather than its agreed value of $3 million; and
§otherwise the wife sought an overall division of 45 per cent in her favour and 55 per cent in favour of the husband of the net property (and not an equal division as had previously been the case).
The final orders sought by the wife were presented to the Court in a document which was marked as document number 154 in the Court Index. That document was originally produced to the Court on 29 January 2013, however, an amended version was produced on 30 January 2013. That amended version replaced the original version and contained the final orders sought by the wife. In summary the wife finally sought that the net property of the parties, inclusive of the husband’s interest in the Estate of Ms L, be divided as to 45 per cent to her and 55 per cent to the husband, subject to the wife retaining certain identified real and personal property as described in paragraph two of that document.
The wife proposed additionally that the superannuation entitlements of the parties be split so that she received a base sum equal to 45 per cent of the combined value of the parties’ superannuation entitlements.
The balance was sought as a lump sum cash payment to be made within sixty days and, upon receipt, the wife would transfer ownership of the former matrimonial home to the husband and resign any office held by her and transfer or assign to him, at his expense, any beneficial interest or shareholding which she had within any of the corporate entities or trusts, save for her self managed superannuation fund.
An issue that arose in the hearing, and from the affidavit and report of Mr Z (chartered accountant) was whether the husband has a potential claim for damages, or recovery of taxes, penalties and other monies wrongly paid on the advice of his former accountants, X Partners. If so, the wife sought orders which would have the effect of her receiving 45 per cent of any net monies paid pursuant to any future claim that might be instigated by the husband.
HUSBAND
The property orders sought by the husband were first detailed in his Amended Response filed 1 August 2012.
As an overview he then sought, in that Amended Response, orders that he pay to the wife, or she retain property, equivalent to 15 per cent of the net property of the parties, including superannuation, but subject to any further taxation sum, interest, costs or penalties thereon that may become due and payable to the Australian Taxation Office.
Specifically, the husband sought an order that the wife vacate the former matrimonial home and, as that property is registered in his sole name, he would then retain ownership and possession thereof.
Within the 15 per cent adjustment to the wife, the husband sought that she retain:
§$620,000 representing the full agreed value of Property 2, Suburb K, registered in the sole name of the wife;
§$470,068 representing the balance of the wife’s bank account balance as at separation (which the husband said was $988,068) and after deducting a sum of weekly expenditure set at $3,500 per week for 148 weeks post 3 March 2010;
§$93,500 being the value of her jewellery;
§the equity in her current leased Mercedes Benz motor vehicle of $92,150;
§her present entitlement in the S Family Superannuation Fund of approximately $28,500;
§her house contents valued at $28,740;
§her partial property settlement of $500,000;
§her diamond ring of $12,656;
§her prestige brand watch of $7,740;
§the loss (as a wastage argument) as a result of the decrease in value of her Mercedes Benz motor vehicle said by the husband to be a sum of $108,872; and
§the net balance of her bank account and credit card monies.
As to the Qantas Frequent Flyer points the husband proposed to pay out to the wife the sum of $7,407, or the equivalent of 1,000,000 Qantas Frequent Flyer points, calculated on what was said to be an agreed value of .074 cents per point.
Otherwise the husband proposed that he retain all other real property registered in his name or in corporate entities or trusts under his control or those of his extended family. He sought to retain his cash, publicly listed shares, motor vehicles, personal chattels and other assets identified in his Financial Statement.
The husband proposed that he resign from the corporate trustee of the S Family Superannuation Fund and transfer his shares and entitlement therein to the wife which would result in an effective superannuation split of $212,054 in her favour.
In that Amended Response the husband joined a second party to the proceedings, that being Sebastian PM Pty Ltd as trustee for the Sebastian PM Trust. Subsequently, and in a case management hearing prior to the commencement of the hearing, his Senior Counsel advised the Court that the husband sought to discharge that respondent from the proceedings and that the hearing therefore involved only the husband and wife themselves. There was no opposition from the wife’s lawyers to the removal of the second named respondent from these proceedings.
On the morning of 22 January 2013 the husband’s Senior Counsel advised the Court that they were drafting a substantially different form of orders, which were to be filed the following day. Accordingly, on 23 January 2013 Senior Counsel for the husband filed a document of the final property orders sought (document number 153 in the Court Index).
As per that document, the husband’s orders finally sought were, in summary, that:
§the property of the parties, excluding the husband’s interest in the Estate of Ms L, be divided as to 70 per cent to the husband and 30 per cent to the wife;
§that as part of her 30 per cent division the wife retain Property 2, Suburb K, her jewellery, bank savings, personal possessions, the household contents in the former matrimonial home and her superannuation entitlement which was then agreed to be $28,850;
§as part of her 30 per cent division the husband would transfer to her, at her expense, Property 6, Suburb K;
§the husband would pay to the wife a further sum of $474,895 within sixty days of the date of order, being the cash adjustment required to make up the wife’s 30 per cent;
§that in respect of the husband’s superannuation entitlements in the P Superannuation Fund there would be a split in favour of the wife of a base amount of $187,129, in addition to her retaining her personal superannuation entitlements;
§that the husband would hold his financial interest within the Estate of Ms L on trust for himself as to 85 per cent and 15 per cent to as to the wife and as soon as reasonably practicable following upon the death of his father the husband would pay to the wife, her heirs, successors or assignees a sum equal to 15 per cent of the then value of his interest in that estate;
§if the husband should institute any proceedings against X Partners then the net sum received would be divided as to 30 per cent to the wife and 70 per cent to the husband, after all costs and outgoings have been paid by the parties in like proportions; and
§the wife resign from any office holding, transfer any shares and forego any legal or beneficial entitlements within the various corporate entities and trusts.
AFFIDAVITS RELIED UPON
WIFE
In August 2012 the wife relied upon:
(i)her trial affidavit filed 6 August 2012;
(ii)her updated Financial Statement filed 6 August 2012; and
(iii)the affidavit of her mother, Ms AA, filed 6 August 2012.
After the commencement of the proceedings the wife sought leave to file and to rely upon the affidavits of:
(i)Ms N;
(ii)Ms J; and
(iii)Mr H.
I heard argument and delivered ex tempore reasons for judgment permitting the wife to rely upon each of these affidavits which were then filed pursuant to my order on 14 August 2012.
After the primary ruling, objections were then taken to various parts of each of those affidavits and I heard further argument from Junior Counsel for each of the parties. Various parts of each of those affidavits have been removed from evidence and thus I have read and evaluated only the remaining evidence.
Subsequently, and prior to the resumption of the hearing on 14 January 2013, the wife filed and relied upon the following further affidavits and documents:
(a) her affidavit in reply filed 6 December 2012;
(b) her updated Financial Statement filed 1 November 2012;
(c)the affidavit of Mr F filed 2 December 2012, including the voluminous annexures thereto;
(d) the affidavit of Mr Z filed 30 November 2012;
(e)the further affidavit of Mr Z filed 21 December 2012;
(f) the wife’s answers to specific questions filed 21 December 2012; and
(g)the further affidavit of the wife’s mother, Ms AA, filed 6 December 2012.
Various objections were taken to many of those affidavits and either by consent or otherwise by my rulings various parts were struck therefrom. Again, I read and evaluated only the remaining evidence.
WIFE’S COURT BOOK
On the first day of hearing Senior Counsel for the wife advised the Court that there was a substantial number of documents that had not yet been admitted into evidence but which was important to prove the wife’s case or to challenge the evidence of the husband and his witnesses.
Accordingly two volumes of documents were produced to the Court and they were marked, initially for identification only, as exhibits “W1” and “W2”.
From an initial scan of the index attached to those Court Books, the documents purported to introduce into evidence at a proper time in the hearing, and when proved, the corporate documents of and related to the sale of Business Y, other financial records and accounts of the husband and his management and control of finances, certain taxation returns and otherwise specific issues of and concerning the various add-backs as claimed by the wife, Estate issues and other specific issues which are in dispute between the parties. The Court Books also included a lengthy chain of correspondence between solicitors for the parties, encompassing some 93 pages.
HUSBAND
In August 2012 the husband relied upon:
(i)his trial affidavit filed 8 August 2012;
(ii)his Financial Statement filed 7 August 2012;
(iii)the affidavit of his father, Dr G Sebastian, filed 6 August 2012;
(iv)the affidavit of his mother, Ms S Sebastian, filed 6 August 2012;
(v)the affidavit of Ms D filed 6 August 2012;
(vi)the affidavit of Mr R filed 7 August 2012; and
(vii)the affidavit of Mr ZZ, accountant, filed 6 August 2012 and the attached correspondence with the Australian Taxation Office annexed thereto.
For the recommencement of the hearing on 14 January 2013 the husband filed and relied upon the following additional affidavits:
(a) his affidavit filed 14 September 2012;
(b) his further affidavit filed 19 September 2012;
(c) his further affidavit filed 2 November 2012;
(d)his further affidavit by way of updated evidence in chief filed 9 January 2013;
(e) the affidavit of Ms D filed 28 September 2012;
(f) the affidavit of Mr R filed 24 September 2012;
(g)paragraphs 40 and 41, and the relevant annexures, to the affidavit of Mr G Sebastian filed 18 June 2012;
(h) his updated Financial Statement filed 9 January 2013; and
(i)his two affidavits filed 6 July 2012 with answers to specific questions (which were also later tendered as H18 and H19).
The husband sought and was granted leave to withdraw and not rely upon the affidavit of Mr ZZ and I have therefore not read that affidavit.
OBJECTIONS TO AFFIDAVIT EVIDENCE
Both parties prepared and filed very detailed objections to the parties’ affidavits and those of their witnesses.
In August 2012 the objections taken by the husband to the wife’s evidence at that time were recorded in document number 109 in the Court Index. Likewise the objections taken by the wife to the husband’s evidence at that time were recorded in document number 110 in the Court Index.
When the hearing resumed in January 2013 the parties had filed further affidavits, described above, and both parties raised objections to that further material. The husband’s objections to the wife’s later material were contained in document number 150 in the Court Index. The wife’s objections to the husband’s later material were contained in document number 149 in the Court Index. It was because of the very substantial number of objections taken that I directed these documents form part of the Court file and be so recorded.
There were some matters upon which agreement was reached and evidence was struck from various affidavits. There were very many other objections, almost countless, where a ruling or indication was required from the Bench and whilst I had initially intended to provide separate Reasons for Judgment on each ruling, that task became overwhelming because of the length of time taken by Counsel in arguing for and then the responding argument against many of the objections. Thus all of my rulings are contained within the transcript and it is with much regret that I record these meticulous objections took almost three full days of Court hearing time in August 2012 as well as a further half day in January 2013.
The issue of the defective manner in which the legal practitioners had drawn or settled each of the affidavits under challenge may likely raise the issue of the substantial costs payable and they are therefore matters that may be an important consideration if any costs applications arise hereafter.
I record therefore that there are significant deletions from each of the affidavits, which I have marked in red ink on the originals, and I have excluded from my evaluation of the evidence all such deleted material.
WRITTEN SUBMISSIONS
WIFE
Pursuant to my case management directions prior to the hearing the lawyers for each of the parties filed an Outline of Case document. Both parties initial documents were filed on 10 August 2012, with the wife’s being document number 104 in the Court Index and the husband’s being document number 103.
The wife’s initial written submissions supported a 50/50 division of the net property, but on the basis of what she asserted to be the correctly identified net property including her various add-backs sought.
The wife’s submissions were founded upon the significant contributions of both parties but with a concession by her that the husband made a greater initial contribution, attributable to a loading of 5 per cent in his favour. Thus the wife effectively opened her case on a contribution based entitlement of 55 per cent to the husband and 45 per cent to the wife.
Leaving s 75(2)(o) aside the wife had then contended that there should be no adjustment provided for as a result of s 75(2) factors (paragraph 122 of document 104). Her qualification however was contained in paragraph 130 of her document where she asserted that “in the event that the Court makes a finding that the asset pool is valued at the quantum asserted by the husband, the wife reserves her right to seek an adjustment pursuant to s 75(2) of the Act”. The difficulty with that is that it would only be known after the case had finished and when judgment was delivered. It would then be all too late to reopen her case and seek different orders.
The wife’s written submissions then dealt with the impact of the husband’s alleged non-disclosure by reference to s 75(2)(o) which provides that the Court may take into account any fact or circumstance which is required by the justice of the case.
It was submitted in paragraphs 132 and 133 that “in circumstances where it is arguable that the husband has actively sought to conceal the true position with respect to the proceeds of sale of the Business and his interest in the Estate of [Ms L], it is submitted that a 5 per centum adjustment in favour of the wife is appropriate”. That was said to balance out the husband’s 5 per cent loading under s 79(4), resulting in an overall 50/50 distribution.
The final form of orders sought on behalf of the wife was identified in document number 154 in the Court Index, which I have earlier referred to in summary form. In support of those orders final written submissions were prepared and filed on behalf of the wife, which were adopted as document number 157 of the Court Index as well as a list of authorities relied on by the wife, which was document number 158 of the Court Index.
Therein the wife ultimately sought a division of net property as to 45 per cent to the wife and 55 per cent to the husband. That was on the basis of a 40 per cent contribution based entitlement to the wife, with an additional 5 per cent adjustment to be paid to her either as an adjustment for s 75(2)(o) issues or otherwise generally pursuant to all relevant s 75(2) factors or a combination of those factors. In this regard her case was most clearly explained in document 157:
134.The wife seeks an adjustment of 5 per centum pursuant to Section 75(2)(o) of the Act. An adjustment is sought in those terms to properly reflect the risk of the husband’s non-disclosure of other assets. It is submitted that that risk is real having regard to the evidence of the husband and both of his parents in relation to the management of the affairs of the Estate and in particular, with respect to the transfer to [the husband’s father] of a sum in excess of $1,269,000 from the capital of the Estate in November, 2011.
135.The wife has sought add backs in the sum of $2,817,312.77. In the event that the Court does not accept those add backs and they are not included in the pool of assets available for division, it is submitted that there should be a further adjustment to the wife pursuant to Section 75(2) of the Act to take into account the following matters:-
(a)the significant disparity in the parties’ income earning capacities. The wife has not been engaged in paid employment outside of the business since 2002. Further, the wife has significant health issues and her evidence was that she must take great care to avoid stress and anxiety so as to ensure that she maintains her sobriety;
(b)the significant disparity in the parties’ superannuation entitlements;
(c)the substantial assets and financial resources available to the husband as a result of his interest in the Estate.
It is helpful to summarise the issues which the wife therein identified as being the matters for consideration and determination by the Court:
4. The issues in this matter may be summarised as follows:-
(a)The identity and value of the existing legal and beneficial interests in the property of the parties, and whether it is just and equitable to make an order and if so what order should be made having regard to Section 79(4) of the Act.
(b)It is submitted that the identification and valuation of the parties’ interests in any assets has been made more difficult as a result of the failure by the husband to make full and frank disclosure in a timely fashion or at all with respect to some parts of the pool of his interests. As a consequence of the husband’s conduct with respect to disclosure it is submitted that the issues in dispute were expanded and the hearing lengthened.
(c)Assessment of the add-backs claimed on behalf of the wife, which she alleges should form part of the interests available for division between the parties.
(d)Assessment of the add-backs claimed on behalf of the husband, which he alleges should form part of the interests available for division between the parties.
(e)Assessment as to the weight to be given to the contributions of the parties and particularly of the husband at the commencement of cohabitation.
(f)Assessment as to the weight to be given to the contributions of the husband by virtue of the inheritance received by him in 1999 from the estate of his late great aunt, [Ms L].
(g)Assessment as to the weight to be given to the contributions of the wife, both financial and non-financial and as a homemaker and parent during the parties’ 18 year relationship.
(h)Assessment as to the impact of the husband’s non-disclosure and whether such conduct should attract a further adjustment to the wife pursuant to Section 75(2)(o) of the Act.
(i)Whether there should be any further adjustment to the wife pursuant to Section 75(2) of the Act.
HUSBAND
The husband’s initial Outline of Case was filed on 10 August 2012 and was document number 103 in the Court Index. It identified and focused upon the approach that he argued was open to the Court in a proper assessment of contributions. Specifically a “two pools” approach was canvassed as an option upon which the evidence of the parties and the calculation of the net property available for division could be determined. Those “two pools” were:
§first, the inherited property, cash and shares of the Estate of Ms L; and
§secondly, all other property of the parties.
The husband’s initial Outline (page 10) asserted that “an objective and informed qualitative assessment of the contributions made by or on behalf of each of the parties under any of the relevant subparagraphs of s. 79(4) of the Act leads inexorably to the conclusion that overwhelmingly the contributions in all spheres have been made by or on behalf of the Husband and were such that a proper assessment ought be 90% in favour of the Husband and as to 10% in favour of the Wife”.
An assessment of the s 75(2) factors in the husband’s written submissions concluded (at page 11) that “an adjustment in the Wife’s favour of 5% of the overall asset pool representing approximately $600,000, is the outer limit of any adjustment that ought be made in her favour”.
It therefore was on that basis that he originally instructed his lawyers to argue his case for an 85 per cent – 15 per cent division of property in his favour. That of course was subsequently varied by the husband’s filing of updated orders sought which substantially restructured his proposed division of property.
As I have earlier identified the husband’s s 79 orders were further amended so that he ultimately asked the Court to divide the property of the parties, excluding his interest in the Estate of Ms L as to 70 per cent to himself and 30 per cent to the wife, and subject to her retention of specified property and personal items. He further sought that he continue to hold his interest in the Estate of Ms L on trust for himself as to 85 per cent and as to the wife 15 per cent, that sum to be paid out in cash to her upon the then value of the Estate as at the date of death of his father who held a life interest in that Estate. Otherwise the further payments, superannuation splitting orders and other orders were as identified in his further amended final property orders as filed (see document number 153 of the Court Index).
In support of those orders the written submissions of his Senior Counsel were filed (document number 156 of the Court Index) and I have carefully read and evaluated that document.
PROCEDURAL CHRONOLOGY
The wife provided in paragraph 3 of her trial affidavit a history of the case management hearings and orders made in this matter, commencing from 19 July 2010 when she initiated proceedings. The husband’s lawyers accepted that summary, save for paragraph (k) thereof, and I have therefore, somewhat as a matter of convenience, largely incorporated that history into these Reasons for Judgment:
(a)19 July 2010 The wife initiated proceedings in the Family Court.
(b)23 September 2010 The husband filed Response and Financial Statement.
(c)27 September 2010 Matter was listed to a Case Assessment Conference before Registrar Mestrovic. The wife was present and represented by Ms Johns of Counsel. The husband was not present. He was represented by Ms Watson, solicitor of his former solicitors.
Orders were made by consent for the appointment of single experts and disclosure within 60 days (by 19 November 2010).
(d)13 April 2011 First mention before myself. Ms Johns appeared on behalf of the wife, who was present. Mr Dickson of Counsel appeared on behalf of the husband, who was not present.
Orders made for disclosure by 10 May 2011.
(e)25 May 2011 Further mention before myself. Ms Johns appeared on behalf of the wife who was present. Mr Ackman QC of Counsel appeared on behalf of the husband, who was not present.
The matter was listed to a final hearing on 10 October 2011 and further orders made for disclosure and a mediation.
(f)13 July 2011 The wife filed an Application in a Case in relation to parenting issues.
(g)1 August 2011 Further mention before myself. Ms Johns appeared on behalf of the wife who was present. Mr Oliver, solicitor, appeared on behalf of the husband, who was not present.
Order made for the appointment of an Independent Children’s Lawyer and listing of all extant property applications to 13 September 2011.
A direction was made that both parties personally attend the next Court event, the husband not having been present at the previous Court dates.
(h)10 August 2011 Conciliation Conference before Registrar Sikiotis. Ms Johns appeared on behalf of the wife and Mr Oliver, solicitor, appeared on behalf of the husband, who was present.
Orders made for disclosure.
(i)11 August 2011 Parenting matters listed before Senior Registrar FitzGibbon. Orders made in relation to parenting with the matter to return before the Senior Registrar on 18 August 2011.
(j)18 August 2011 Parenting matters listed before Senior Registrar FitzGibbon. Orders made in relation to parenting with the matter to return before the Senior Registrar on 17 October 2011.
(k)Not adopted as not agreed between the parties.
(l)13 September 2011 Further mention before myself. Ms Sanders appeared on behalf of the wife and Mr Sweeney of Counsel appeared on behalf of the husband.
Orders made vacating the trial date on 10 October 2011.
(m)10 October 2011 First Final Hearing before the Honourable Justice Young aborted by consent.
(n)19 October 2011 Hearing before myself in relation to the wife’s application for sole use of the former matrimonial home.
(o)21 October 2011 The wife filed an updated Financial Statement as ordered by the Court on 13 September 2011.
(p)27 October 2011 Parenting issues were listed before Senior Registrar FitzGibbon. Mr Geddes QC appeared on behalf of the wife and Mr O’Shannessy of Counsel appeared on behalf of the husband.
Orders were made by consent in relation to disclosure and in particular the husband’s compliance with orders made on 13 September 2011.
(q)30 November 2011 The husband filed an updated Financial Statement (due to be filed on 21 October 2011).
(r)7 December 2011 Mention before myself. Ms Johns appeared on behalf of the wife, Mr Sweeney appeared for the husband and Mr Mulvany as the Independent Children’s Lawyer.
Parenting orders made by consent and further orders for disclosure.
(s)1 February 2012 Mention before myself. Ms Johns appeared on behalf of the wife, Mr Gates appeared for the husband and Mr Mulvany as the Independent Children’s Lawyer.
Orders and directions made by consent listing the matter to a final hearing on 13 August 2012.
(t)20 June 2012 Mention before myself. Mr Wilson appeared on behalf of the wife, Mr Sweeney and Mr Gates appeared for the husband, Mr Mulvany as the Independent Children’s Lawyer and Mr Saunders solicitor on behalf of the husband’s parents.
(u)19 July 2012 Mediation with Mr Melilli of Counsel. Ms Johns appeared on behalf of the wife and Mr Gates appeared on behalf of the husband. The matter did not resolve.
(v)20 July 2012 Mention before myself. Mr Geddes QC appeared on behalf of the wife, Mr Gates appeared for the husband, Mr Mulvany as the Independent Children’s Lawyer.
(w)26 July 2012 The wife filed an Amended Initiating Application.
(x)1 August 2012 The husband filed Amended Response (due to be filed on 31 July 2012).
Thereafter the hearing commenced on 14 August 2013 and was adjourned part-heard on 22 August 2012 to 14 January 2013. The reason for the adjournment has been explained elsewhere. The matter finally concluded on 27 February 2013.
BACKGROUND FACTS
The following were agreed facts:
1967 Husband born
1968 Wife born
September 1992 Husband and wife commenced cohabitation living at U Street which had recently been purchased and settled in the wife’s sole name
1994Parties moved to Property V in Suburb K
1995Parties married
1998Eldest child, G, born (14 years old)
1999Date of death of husband’s great aunt, Ms L
5 July 1999Settlement of purchase former matrimonial home
2001Birth of second son, M (11 years old)
3 March 2010 Parties separate
19 July 2010 Wife commences proceedings in this court
11 July 2011 Parties divorced
WITNESSES ORDERED OUT OF COURT
On the afternoon of 20 August 2012 I pronounced an order that all witnesses were to be out of Court prior to giving their evidence. I directed that the witnesses were not to communicate any matter or fact in issue to any other interested person. In particular the matter arose because a person said to be the husband’s bookkeeper, Ms DM, was in Court sitting alongside the husband for much of the proceedings and Mr Geddes brought to the attention of the Court that she was also the bookkeeper for Mr R, the husband’s former business partner and a witness to be called. I therefore directed that no person, inclusive of Ms DM, was to communicate any matter, fact, court discussion or evidence to any other intended witness in the proceedings.
A general acknowledgement was received from Senior Counsel for both parties of the scope and intent of that order which was delivered in the presence of both parties and Ms DM.
PARTIAL PROPERTY ORDERS
By consent I ordered on 21 August 2012 that the husband pay to the wife a sum of $500,000 as a partial property settlement and I have had regard to that payment in determining just and equitable orders for the division of property of the parties.
A further partial property order in the sum of $400,000 was made by consent on 8 February 2013.
In my determination of the net pool of assets, and in my Orders I have had specific regard to each of these partial property payments.
PREVIOUS COURT ORDERS
The following are the previous Orders of the Court that are relevant to the issues in this hearing.
27 SEPTEMBER 2010 – REGISTRAR MESTROVIC (BY CONSENT)
It was ordered that within 60 days the husband provide, amongst other things:
§His taxation returns and financial statements in a relation to himself personally and a number of specifically listed entities;
§the contract of sale and all other sale related documents for CHI Pty Ltd;
§the Will and Probate for the Estate of Ms L;
§bank and credit card statements and passbooks for accounts and investments in his name personally and for all entities;
§lists of publicly held shares in his personal name and in the name of the entities; and
§any lease agreements or rental statements in relation to all investment properties.
The wife was ordered to provide all bank and credit card statements, cheque butts and passbooks for any accounts in her name or to which she is a signatory.
It was further ordered that both parties, within 28 days, instruct single expert witnesses to value real property, personal property and financial resources with costs shared equally.
13 APRIL 2011 - YOUNG J
It was ordered that by 10 May 2011 the husband make disclosure of:
§tax assessments, share portfolio statements and bank and credit card statements belonging to both himself and any related entity;
§the proceeds of sale of Q property;
§details of cash and shares in Estate of Ms L;
§answers to questions from the wife’s solicitors in a letter dated 18 March 2011; and
§answers to questions by Ms DB in an email dated 7 April 2011.
The wife was ordered to disclose:
§Frequent flyer statements;
§Bank account and credit card statements.
25 MAY 2011 - YOUNG J
It was ordered that within 28 days the husband provide copies of all documents as requested in letters from wife’s solicitors dated 19 May 2011 and 23 May 2011.
1 AUGUST 2011 - YOUNG J
It was ordered that by 8 August 2011 both parties provide an up to date statement of all assets, financial resources and liabilities including superannuation.
10 AUGUST 2011- REGISTRAR SIKIOTIS (BY CONSENT)
It was ordered by consent that within 14 days the husband account for:
§the expenditure for proceeds of sale of Y Business;
§monies paid to Ms D;
§all financial statements for the husband and all entities of which he is director, shareholder, trustee, appointer, guardian or beneficiary for year ending 30 June 2011; and
§documents relating to loans to the husband or entities from the husband’s father from January 1998 to present;
The wife was ordered to provide current bank statements of accounts in her name and all documents evidencing the interest of the wife’s mother in the U property.
13 SEPTEMBER 2011 - YOUNG J
It was ordered that both parties disclose their costs agreements at the next hearing date and that each party file and serve updated financial statements.
19 OCTOBER 2011 – YOUNG J
I delivered an ex tempore judgment and ordered that on an interim basis the wife continue to enjoy the sole use and occupation of the former matrimonial home. The husband was ordered to arrange for necessary repairs to that property, with the parties to share the cost of repairs equally.
27 OCTOBER 2011- SENIOR REGISTRAR FITZGIBBON (BY CONSENT)
It was ordered that by 8 November 2011:
§the husband provide documents and information requested regarding the settlement of the business, payments to Ms D and details of proceeds of sale of the Q property;
§the wife provide documents and information requested 12 September 2011.
24 NOVEMBER 2011- REGISTRAR MARRONE
It was ordered that within 7 days the husband provide to the wife a letter from Telstra dated 22 November 2011 and a copy of the Telstra records, with certain information to be redacted.
7 DECEMBER 2011- YOUNG J
Various interim parenting orders were made as well as an order for the husband to comply with the 24 November 2011 orders regarding the Telstra documents.
1 FEBRUARY 2012 - YOUNG J
It was ordered that by 8 February 2012 the husband provide:
§copies of Telstra records and letter (incompliance with two previous orders);
§documents sought by BG Financial Services Firm within 21 days; and
§information regarding the sale of the Q property (in compliance with previous orders).
The wife was ordered to provide within 7 days:
§documentation of wife’s mother’s interest in the U property;
§financial transactions from the wife to her mother since separation; and
§current loan statements for Mercedes.
Both parties were order to provide within 7 days tax returns, bank and credit card statements and share portfolio balances and that by 15 February 2012 both parties:
§assist in preparation of valuations of real property and those subject to life interests; and
§assist in preparation of actuary calculation on Dr G Sebastian’s life interest.
It was further ordered that by 2 April 2012 the husband provide and by 9th April the wife provide draft single balance sheet with bank statements and all other source documents.
20 JUNE 2012 - YOUNG J
It was ordered that a conference be arranged between the husband, wife and Mr F. It was further ordered that it be reserved for the trial judge to award the quantum of any costs arising from the subpoena dispute between the wife and the husband’s parents.
20 JULY 2012 - YOUNG J
The property dispute was set down for a final hearing on 14 August 2012. Procedural orders were made for the final hearing and it was ordered that both parties complete full and proper disclosure.
22 AUGUST 2012 – YOUNG J
After hearing the final hearing from 14 to 22 August 2013, the matter was adjourned part-heard before me to 14 January 2013. On this day I therefore made case management orders in relation to the resumption of the hearing, which provided for:
§the husband to file responding affidavits to various affidavits filed by the wife’s witnesses;
§for affidavits in reply to be filed;
§for further written notices of objection to be filed and then endeavoured to be resolved between the parties out of court and before the resumption of the defended hearing;
§for updated balance sheets to be prepared;
§for updated Financial Statements to be prepared and filed;
§for updated valuations of the properties in Suburb YY;
§for release of documents subpoenaed to Court; and
§for each party to seek leave to adduce evidence as to the taxation consequences and other costs arising from orders sought by them or otherwise to adduce evidence as to issues arising from the husband’s interest in the Estate of Ms L.
7 NOVEMBER 2012 – YOUNG J (BY CONSENT)
Further case management orders were made, by consent, requiring the parties:
§to instruct their valuers of real property to prepare updated single expert valuations at their joint cost;
§to instruct a firm of actuaries to prepare an updated single expert valuation of the husband’s interest in the Estate of Ms L;
§to fix 4 January 2013 as the relevant date for the valuation and preparation of respective balance sheets; and
§further case management orders.
The Notation that accompanied the Order that day read as follows:
THAT the Court has encouraged Counsel and solicitors present to communicate to their learned leaders that there is to be a real and meaningful level of discussion regarding objections to evidence.
20 DECEMBER 2012 – YOUNG J
Again further case management directions were made and extensions for the filing date of documents were provided and otherwise it was ordered:
§for the real property valuers to prepare updated single expert valuations in respect of properties at TC Street, Suburb YY, to be initially paid for by the husband with the question of the wife’s contribution reserved as an issue in the hearing;
§the wife was permitted to withdraw (and this was by consent) the affidavit of Mr PH that had been filed on 30 November 2012 and that affidavit was uplifted from the Court file and returned to the wife’s solicitors (and this occurred in open Court).
11 JANUARY 2013 – YOUNG J
I listed the matter on short notice for further case management directions before the resumption of the part-heard defended proceedings the following Monday.
The parties and their solicitors were present and elected to be represented by both Senior and Junior Counsel. I made orders for further and better discovery of taxation returns, share portfolio statements and bank statements and updated correspondence and directed immediate compliance with these Orders.
At the commencement of the defended hearing on 14 January 2013 the wife’s Senior Counsel rose to complain about a lack of discovery and non-compliance with my recent Court Orders.
As to Order 1(a) no further personal taxation returns had been produced by the husband. His Senior Counsel advised the Court that he had located his 1993 taxation return “in a box” but had no other taxation returns for the years identified and up to 30 June 2002. The Court was advised that both of his previous accountants had not retained copies of those taxation returns and thus it was said “that they were simply not available”.
As to Order 1(b) there was no updated share portfolio statement evidencing transactions or a detailed statement of shares held by the husband or his corporate entities as at 4 January 2013. What was produced by the husband’s solicitor was the subject of complaint in that it provided no further information save that it detailed three particular share trades but no overview of the portfolios, or any reconciliation thereof. It was submitted by Senior Counsel for the wife that there was no compliance with the Order and other documents should have been available to the husband upon proper request.
As to Order 1(c) it was said that only balances and not bank statements were produced and thus there was no ability for the wife’s legal advisors to investigate withdrawals or deposits from any of those various bank accounts. That was said by her Senior Counsel to again impede the proper preparation and presentation of her case to the Court.
Order 1(d) was wrongly stated and should have read “repaid by [Ms S Sebastian] to [Sebastian PM]”. Both parties had not previously notified the Court of this error but each of them said they understood what the Order was intended to provide for. The husband said the question would be addressed in evidence or otherwise the evidence had already been produced by or on behalf of the husband.
As to Order 1(e) Senior Counsel for the wife produced to the Court, and it has been marked as exhibit “W31”, a letter from X Partners dated 21 December 2012. That letter represented an objection lodged with the Australian Taxation Office upon instructions received by the husband, on behalf of the Sebastian PM Trust. That objection was against an assessment of penalty tax applied in the 2010 financial year. That document had not been identified by the husband in his further affidavit filed on 9 January 2013. Indeed the wife’s Senior Counsel highlighted the importance of the document and what he said was “the serious omission of the husband in failing to disclose his filed objection”. I do find that was a serious omission.
Otherwise the further complaint of the wife’s Senior Counsel was that the husband could have and should have accessed his Tax Portal, both for himself and for all relevant corporate entities and trusts, and provided an updated statement of monies paid to or outstanding to the Australian Taxation Office. That was not an unreasonable request in this case.
In summary the better part of the first morning on the resumption of this hearing was occupied by a consideration of the husband’s compliance with the Orders of 11 January 2013, or otherwise with the admissibility of evidence contained in recent affidavits filed. This finding may be relevant in any later hearing on cost issues.
8 FEBRUARY 2013 – YOUNG J
I ordered by consent that the husband pay to the wife $400,000 as a partial property settlement. As at the date of final addresses on 27 February 2013 the sum had not been paid. It was due and the Court was told, that it would be paid in early March 2013. The Court has accepted that situation.
Both parties requested the Court to adopt the approach of including the $400,000 as a liability of the husband and as an asset of the wife in the pool of divisible property of the parties. That effectively neutralised the sum as at 4 January 2013, being the date of assessment. This I have done.
MAGISTRATES’ COURT – INTERVENTION ORDERS
On the day of separation, 3 March 2010, the wife applied for and obtained an ex parte Family Violence Intervention Order against the husband. The application was then adjourned for further hearing, after service of the husband on 9 March 2010 where the order was continued until 28 April 2010. On that hearing date the wife withdrew her application on the basis of various notations being recorded by the Court. The wife’s application was before the Court as annexure “PGHS10” to the husband’s trial affidavit.
The husband and both children sought an ex parte Family Violence Protection Order against the wife on 3 June 2011 and that interim order continued until a defended hearing of the contested allegations on 21 February 2012. That intervention order is annexure “PGHS11” to the husband’s trial affidavit.
Arising out of that strongly contested defended hearing the Court pronounced and extended an Intervention Order against the wife, for the protection of the husband and children until 21 August 2013 and thus it is current and enforceable and it required that the wife:
(i)not commit family violence against the husband or the children;
(ii)not attend or loiter near the residence of the husband or children or attend at their school; and
(iii)not be under the influence of alcohol when in the presence of the children.
Finally, and as an indication of the strongly contested Magistrates’ Court proceedings, which the husband said cost him approximately $100,000 and in respect of which the wife did not volunteer her costs, I observed that the Magistrates’ Court granted a certificate under s 128 of the Evidence Act 1995 (Cth) (“Evidence Act”) to the wife, which did not become an issue before me.
STANDARD OF PROOF
Section 140(1) of the Evidence Act provides that a Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. Section 140(2) further provides that, without limiting the matters that the Court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject matter of the proceeding; and
(c) the gravity of the matters alleged.
While Dixon J’s classic discussion in Briginshaw v Briginshaw (1938) 60 CLR 336 of the operation of the civil standard of proof does express the considerations which s 140(2) of the Evidence Act requires a Court to take into account, the correct approach, as observed by Branson J (with whom French and Jacobson JJ agreed) in Qantas Airways Ltd v Gama (2008) 247 ALR 273, at para 139 is that :
. . . references to, for example, “the Briginshaw standard” or “the onerous Briginshaw test” . . . have a tendency to lead a trier of facts into error. The correct approach to the standard of proof in a civil proceeding in a federal court is that for which s.140 of the Evidence Act provides.
Similarly, in Johnson & Page (2007) FLC 93-344 (at 81,891) the Full Court of this Court expressly agreed with the view “that reference to the Evidence Act” is proper. I have therefore applied this section in my deliberations and assessed the evidence of both parties and their witnesses on that required standard.
OBSERVATION OF WITNESSES
I have had the benefit of observing the husband and wife in giving their evidence and being cross-examined and also in observing them in the courtroom. My observations of them have been of assistance in formulating appropriate orders. Those observations are acutely available to a trial judge and the legal authority for such a position is that part of the judgment of Kirby J in Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 at page 313 where it is said:
By conventional theory, the observations made by a trial judge of the appearance and demeanour of a witness giving evidence are not only available to be used in the determination of a dispute but amount to important ingredients of the decision-making process. They normally provide the primary decision-maker a distinct advance which controls, and even limits, the exercise by the appellate court of its statutory functions in an appeal by way of re-hearing… (citations omitted).
Mr Geddes addressed the Court on this paragraph and urged that I should make specific findings on my observations in Court of the conduct, aggressive behaviour and attitude of the husband. He identified certain answers or comments that were made and from which he submitted that I should be critical of the husband.
Given the length of this hearing, the combative and strongly contested nature of the evidence and the proceedings generally, it is not surprising that there were some moments when the parties, largely the husband, lapsed in their conduct. I have not however, in this case, penalised or used those short moments as a basis to form an adverse opinion of or make adverse findings about either party. It is important to look at their conduct, demeanour and the giving of their evidence on an overall basis throughout the hearing.
Exhibit “W59” is a Financial Statement prepared by the husband. It is dated 25 October 2011. He acknowledged his signature upon the document. It was not sworn or affirmed. I accept that this document was delivered to the wife’s solicitors by the husband (personally) under cover of letter dated 15 November 2011 and that document is marked as exhibit “W58”.
This Financial Statement does not identify, on page 13, who prepared the document. The husband’s solicitor’s name is specifically excluded from the document. I wholly accept that annexures “A”, “B” and “C” were produced by the husband and were annexed by him to his Financial Statement. The body of the documents and its typeface, by comparison to other Financial Statements filed, likely arose in the office of the solicitors.
In paragraph 56 thereof the husband identified his interest in “any trust or deceased estate” in the sum of $9,746,362 and that was cross referenced to annexure “C”. That annexure did not include any value for cash or shares of the Estate of Ms L. It did not properly include any value for the 50 per cent share, subject to the life interest of his father, in the Suburb RD property, as per paragraph 2(b) of that annexure, but always subject to the proper legal ownership of that property.
The husband’s evidence under cross-examination was that he was unsure of who had actually produced “W59”, or who had assisted him, but he did say that the document was produced “in good faith and he believed that it was then accurate”.
Mr Geddes referred again to the acknowledgements on the first page of the document, as to the husband’s knowledge and understanding to make full and frank disclosure but, as the document was not sworn or affirmed I ruled that line of cross-examination was inappropriate on that particular document.
A further Financial Statement was prepared by the husband’s solicitors and sworn by him on 24 November 2011. The document was filed on 30 November 2011 and is document number 47 in the Court Index.
As this was the first Financial Statement prepared and filed with the assistance of Moores Legal the husband was again challenged on his knowledge of his requirement to make full and frank disclosure, as recorded on the first page of that document in sub-paragraphs (a), (b) and (c) thereof. He confirmed that he had not been given specific instructions as to Rule 13.04, and that he was not given that document to read. Nevertheless the husband acknowledged that “I knew my obligation”. He added that he was “using his best endeavours” to provide updated and meaningful financial information to the wife and her solicitors.
Again the monetary value of his interest in any trust or deceased Estate was varied and this time, pursuant to annexure “C”, it was said to be $9,110,463.
I find that the documents annexed to this Financial Statement as annexures “A”, “B” and “C” were all prepared by the husband and formed part of the instructions that he gave to his lawyers.
It was these documents produced by him which were annexed to this further Financial Statement. Again annexure “C” makes no disclosure of cash or shares of the Estate.
Annexure “A” is also incorrect as it refers to a current single expert valuation of Property Q, when it had already been sold and settlement had occurred. What should have been disclosed was the cash sum then received.
The husband acknowledged the inaccuracy of the document but would not adopt the questioning of Mr Geddes that it was “misleading”.
Further the document is inaccurate, or financially incomplete, as to a valuation of his 50 per cent interest in the Suburb RD property (subject to the life interest of his father) and that error simply continued an earlier failure to make proper disclosure on this issue.
By orders which I had made on 1 February 2012, paragraph 10 thereof, the husband was required, on or before 2 April 2012 to provide:
To the wife’s solicitors a single draft page balance sheet together with bank statements and all other source documents which evidenced the value of each item included therein.
Exhibit “W60” is a letter from the husband’s solicitors enclosing that draft balance sheet and it advised that “bank statements and other source documents will be delivered to your office”.
That balance sheet, as prepared by the husband, is exhibit “W61”. It is dated 30 April 2012 and is described as the husband’s “asset pool / contributions”.
There was no reference to the shares or cash of the Estate of Ms L though the one significant update is that the wife and her solicitors were told of the sale of Property Q for $1,285,328 with the value of the husband’s interest therein being $428,657.
The husband again updated his asset pool and contribution statement as at 2 May 2012 and that document was marked as exhibit “W62”. In paragraph 9(g) thereof, and for the first time, a sum is attributed to the value of cash and shares in the Estate of Ms L. The husband there recorded that, in accordance with the Probate document, the valuation of his entitlement was $162,846.
That was a 1999 valuation and thus had no current relevance to a valuation performed as at 2 May 2012, which was the heading on the husband’s document.
What Mr Geddes there highlighted, and which the husband acknowledged, was that, for the first time since Registrar Mestrovic had ordered on 27 September 2010, he had acknowledged a value referable to the cash and public shareholding of the Estate of his late aunt. What was highlighted was that had taken some nineteen months and even then the sum deposed to was historical and of no current relevance when determining a net asset pool.
For reasons that were never explained exhibit “W63”, which is a letter from the husband’s solicitors to the wife’s solicitors enclosing that updated asset pool as at 2 May 2012, was delivered under cover of a letter dated 18 July 2012, meaning that there was a ten week delay. I have no idea as to the reasons why there was such a delay but it most certainly had the consequence of the wife’s solicitors being unaware of the updated further disclosure until approximately one month prior to the commencement of this defended hearing in August 2012. That was most unhelpful and unreasonable.
The husband filed a further Financial Statement on 7 August 2012, immediately prior to the commencement of this defended hearing. In response to question 56 he declared that his interest in the trust or deceased Estate totalled $8,743,760, a marked variation from his earlier filed Financial Statements.
I again find that the annexures “A”, “B” and “C” were prepared by the husband, and not by the office of his solicitors, and they were simply annexed by them to the Financial Statement which was prepared pursuant to those instructions.
Annexure “B” is an interesting document in that it purports to value, on Probate values, the assets and liabilities of the Estate of Ms L at $488,538 from which, after specific bequests and the life interest of the husband’s father and the half interest of the husband’s brother are adjusted, the husband asserted his share to be valued at $103,361. That was false and misleading.
That Financial Statement and annexure “B” are significant documents because it is the very first time that the husband actually swore to what he said was the value of cash and shares in the Estate of his late aunt. It is important to emphasise that this occurred in the week prior to the commencement of a defended hearing.
Simply put I find that such a financial disclosure was all too little and very late. I find that it was both inaccurate as to present day values and the husband did not comply with his obligation to make full and frank disclosure of his interest in the cash and publicly listed shares held by the Estate of his late aunt.
I further find that his solicitors should have understood the obligation to provide an updated financial valuation given that the husband was purporting to value his financial interests, net of liabilities, as at 7 August 2012.
In the document handed to the Court by the husband’s Senior Counsel at the recommencement of this hearing on 14 January 2013, exhibit “H8”, the husband had only modestly adjusted his evidence and he there asserted that the capital component of his value of shares and cash in the Estate of Ms L was $105,829. I would understand the reference to “capital component” was another way of stating the “Probate value” of that interest but that was wholly unhelpful and the document was titled “Asset Pool as at 4 January 2013”. Thus I find that paragraph 10(b) thereof had no relevance to the structure or purpose for which the document was prepared and it was unhelpful both to the Court and to the wife and her lawyers.
The wife had asked certain specific questions of the husband, to which he had responded in affidavit. These documents are before the Court as part of exhibit “H18”. I have carefully read both the questions and answers. I do find that the answers were inaccurate, unhelpful and generally misleading. I find that the husband, as a trustee and as a signatory to the bank accounts held with ANZ Bank and Bank of Queensland and with VS Partners, could and should have provided updated, relevant and reliable financial answers and information to the lengthy and somewhat verbose questions.
I certainly do not accept that the husband was dictated to or controlled by his father or other family members in providing the information to the Court that was contained in his answering affidavits, or otherwise in his unhelpful and inaccurate Financial Statements.
The wife’s lawyers had issued subpoenas to the ANZ Bank and to the Bank of Queensland. The husband filed a Notice of Objection to the release of any documents under those subpoenas. Those objection documents are exhibits “W64” and ”W65” and were both filed by Moores Legal on behalf of the husband on 9 May 2012.
The effect of filing those objections was that information provided by each of those banks were not released to the wife and that delay continued from 9 May 2012 until they were released by my direction at the commencement of the defended hearing before me on 14 August 2012. Thus more than three months were effectively wasted in the loss of opportunity for the wife’s lawyers to inspect those bank account records and to ascertain current bank holdings which were held in the account in the name of the husband, his father and his brother and held for and on behalf of the Estate of Ms L.
The issue had come before me on 20 June 2012 and I was referred to Notations “C” and “D” to my Orders of that day. I therefore understand and have balanced the further letter of clarification that was to be written by the wife’s lawyers to the ANZ Bank and thereafter the information was to be available to all parties if and when further banking records were produced.
Mr North relied upon each of those Notations, particularly “D”, to highlight what he said was a change in attitude by the husband’s solicitors. I do not agree. I find that the reality was that the husband remained reluctant, and that was shared by those solicitors then representing his parents, to disclose updated financial information of and concerning the value of cash and the shareholdings within the Estate of Ms L. I record in particular the evidence of the husband’s father which I wholly accept that he did not wish to continue the objection to the production of documents, he disagreed with his solicitor’s advice, but was persuaded to the contrary. Most likely the husband had a strong view in having his parents contest the production of documents and thus to appear at the Court proceedings through their solicitors.
In assessing the evidence of the parties on the disclosure made in respect of the Estate I have also carefully balanced the evidence of the husband’s parents. In particular I have had regard to the financial dealings which they disclosed, the way in which funds were transferred to their benefit, and the documents they were cross-examined upon which disclosed financial transactions that were made on their behalf or to their benefit.
I am not satisfied, on the balance of probabilities, that the husband has made complete, accurate and up to date financial disclosures concerning his financial interests and entitlements in the Estate. His evidence was wholly unconvincing, often inaccurate and begrudgedly provided to the wife’s lawyers and the Court.
I conclude, on the balance of probabilities, that there are most likely other income, entitlements, property or benefits that are or could be available for the husband. I cannot identify the particular property or its value but the husband has very clearly opened the door to this position by the nature, content and delivery of his unsatisfactory evidence.
Thus I find on this issue, for all of the various reasons and failure to disclose which I have identified, that it is just and proper to make an adjustment under s 75(2)(o) to facilitate a modest percentage loading and thus a monetary adjustment, in favour of the wife.
CONCLUSION ON THE PROPERTY AND LIABILITIES OF THE PARTIES
I have found the property and liabilities of the parties as to 4 January 2013, excluding their superannuation entitlements which I have separately considered, to be:
Property
Property 1, Suburb K (former matrimonial home)
$3,000,000
Property 3, Suburb K
$550,000
Property 4, Suburb K
$590,000
Property 5, Suburb K
$435,979
1 TC Street, Suburb YY
($83,000)
2 TC Street, Suburb YY
($64,000)
Property 6, Suburb K
$300,200
Peninsula Property
$1,750,000
Suburb BB Property
$610,200
Suburb W Property
$364,425
Property 7, Suburb K
$149,160
Property 8, Suburb K
$203,400
Property 9, Suburb K
$211,875
25% of Suburb CW Property
$322,050
50% of Suburb RD Property
$322,050
Property 2, Suburb K
$310,000
Husband's 2009 Mercedes
$84,400
Husband's Mercedes convertible
$97,700
Husband's Jaguar vehicle
$9,900
Husband's Boat
$85,000
Wife's 2010 Mercedes
$92,150
Fiat Vehicle
$16,300
Household contents of the Peninsula property
$15,880
Household contents of the former matrimonial home
$28,740
Wife's Jewellery
$93,500
First Partial Property Settlement
$500,000
Second Partial Property Settlement amount owing to wife
$400,000
50% unit holding in SA Unit Trust
$11
E Managed Fund
$299,881
Cash and shares in Estate (including Property Q proceeds of sale)
$963,449
Husband's Commonwealth Bank Account Number …051
$71,143
Husband's Commonwealth Bank Account Number …974
$122
Husband's ANZ Bank Account Number …335
$3,788
Wife's NAB Bank Account Number …67
$6,010
Wife's ANZ Bank Account Number …78
$33
Sebastian PM Trust Various bank accounts
$218,188
S Family Trust bank account
$3,678
LG Trust Various bank accounts
$302,704
PP Trust bank account
$51,152
RRR Trust bank account
$4,170
Husband's Share Portfolio
$46,710
Sebastian PM Trust Share Portfolio
$1,104,728
LG Trust Share Portfolio and Bank of Queensland
$580,170
PP Trust Share Portfolio
$150,967
RRR Trust Share portfolio
$90
Husband's paid legal fees – added-back
$791,527
Wife's paid legal fees – added-back
$311,783
Past school fees – added-back
$202,449
Sub-total Assets
$15,508,662
Liabilities
Second Partial Property Settlement – amount due to be paid by husband
$400,000
Husband's Various Credit Cards
$12,515
Wife's ANZ Credit Card
$13,134
Wife's NAB Credit Card
$3,769
ATO penalty tax (since paid by husband)
$72,445
Mercedes Benz Finance
$108,872
Sub-total Liabilities
$610,735
TOTAL NET PROPERTY
$14,897,927
IS IT JUST AND EQUITABLE TO PRONOUNCE A S 79 ORDER?
Following Stanford (supra) the Court must determine whether it is satisfied that it is just and equitable to pronounce an order for the division of the property of the parties. I am so satisfied and on that considered basis I have subsequently pronounced s 79 orders.
On behalf of the husband Mr North acknowledged the justice and equity of such orders and that is clearly encompassed within paragraphs 2 and 3 of his final written submissions where it was stated that:
The husband has here acknowledged that it is just and equitable to make an alteration in the parties’ existing entitlements to property. He has done so by the orders that he seeks and by having consented to two partial property settlement orders, one of $500,000 and a second of $400,000 in the wife’s favour.
Both the husband and wife acknowledged their marital separation and that each of them had sought orders for property division from this Court. They each acknowledged the necessity, and the justice and equity, of requiring an alteration of their existing legal and equitable property interests.
THE PROPERTY AND LIABILITIES TO BE RETAINED BY THE WIFE
The wife will retain:
Property 2, Suburb K
$310,000
2010 Mercedes
$92,150
Household contents of the former matrimonial home
$28,740
Jewellery
$93,500
First Partial Property Settlement
$500,000
Second Partial Property Settlement – amount owing to wife
$400,000
NAB Bank Account Number …67
$6,010
ANZ Bank Account Number …78
$33
legal fees
$311,783
Sub-total Assets
$1,742,216
Liabilities
ANZ Credit Card
$13,134
NAB Credit Card
$3,769
Mercedes Benz Finance
$108,872
Sub-total Liabilities
$125,775
TOTAL
$1,616,441
PROPERTY AND LIABILITIES TO BE RETAINED BY THE HUSBAND
By the orders that I have pronounced the husband will retain sole ownership of the former matrimonial home and all other real properties, save for Property 2, Suburb K, that are owned by him or the entities and trusts under his management and control which have been identified in this hearing.
He will retain his personal chattels, shares, investments and possessions as well as those in the names of the various entities. He will also retain his share of the value of the cash and shares in the Estate.
His responsibility imposed by the orders is to pay the required lump sum to the wife’s solicitors on her behalf within ninety days of the date of these orders.
In default of payment within ninety days of that lump sum, interest will then be applied, calculated and payable quarterly in arrears, at the rate prescribed from time to time pursuant to the Family Law Rules 2004. This default interest is to be paid on any outstanding balance of the lump sum that may exist, from time to time, beyond the period of ninety days from the date of these Orders.
I have required the wife to vacate the former matrimonial home within twenty-one days of the payment in full of the lump sum payment. All fixtures and fittings must remain in the former matrimonial home but the wife is permitted and authorised to remove all of the furniture, chattels and her personal contents from that property.
Likewise, and within twenty-one days of her receipt of the lump sum payment, the wife must sign all documents, do all acts and things and give all necessary and proper instructions to resign any corporate office holding held by her, and to assign or transfer to the husband at his expense any shareholding, beneficial interest or entitlement in all of the corporate entities and trusts identified in the hearing. The husband must indemnify the wife in that regard.
Pending payment of the whole of the lump sum, but save for the purposes of raising or securing monies for that sole purpose, I have restrained the husband, both personally and in his capacity as a director, from dealing with, selling, encumbering, mortgaging, or in any other way disposing of the former matrimonial home or the Peninsula property. To the extent necessary the wife must co-operate in all ways, if required, to facilitate the husband securing any required monies against the title to the former matrimonial home.
ASSESSMENT OF s 79(4) CONTRIBUTIONS
This case was conducted on behalf of the husband on the basis that an assessment of his contributions should support a finding that the property of the Estate be divided on a 85/15 basis in his favour and that the remaining property of the parties be divided on a 70/30 basis in his favour.
The wife’s case was presented on the basis that there should be a finding that her contribution) should be assessed at 40 per cent, and thus she had acknowledged that the husband made a 60 per cent contribution for the purposes of this sub-section of the Act.
Upon my careful evaluation of all of the evidence I find that the s 79(4) contributions made by each of the parties both to the welfare of the family and to the acquisition, conservation or improvement of all of their property, inclusive of the property of the Estate, should be assessed as follows:
§the husband: 70 per cent; and
§the wife: 30 per cent.
The monetary impact of that percentage division based on contributions alone, with the net property of the parties being $14,897,927, is that the wife would be entitled to property, or its equivalent, at a value of $4,469,379. The husband would retain the balance.
ASSESSMENT OF S 75(2) FACTORS
The husband’s case had been conducted on the basis that there was no requirement to award any additional percentage or loading arising from s 75(2) considerations. His evidence and submissions were presented on the basis that a division based on contribution alone was proper and that any further adjustment was unnecessary and would be unjust.
The wife’s case was conducted on the basis that there should be a 5 per cent adjustment in her favour awarded as a result of all relevant s 75(2) factors, but primarily sub-paragraph (o) thereof.
Section 79(4)(e) requires that a Court must take into account, insofar as they are relevant, applicable s 75(2) factors which I have identified throughout my Reasons for Judgment. I find that it is necessary and proper to have regard to these factors to conclude an order that satisfies s 79(2) of the Act.
Aside from sub-paragraph (o) thereof, which I have separately considered and evaluated, I have concluded that, to achieve a just and equitable outcome, there must be an initial 1.5 per cent loading awarded to the wife over and above her contribution based entitlements.
I have found for the reasons explained in the Judgment that, primarily pursuant to s 75(2)(a) and (b) and to a lesser extent pursuant to (g) and with the need for the wife to maintain a reasonable standard of living, that further adjustment is required in all of the circumstances. It is necessary to achieve an overall just and equitable outcome. I have, of course, balanced the other relevant factors including the husband’s care and control of the children and his commitment to their future financial support and upbringing. I have also had very specific regard to the order to be made under s 79 in relation to the property of the parties. All of these matters are more extensively examined throughout the lengthy Reasons for Judgment.
The 1.5 per cent loading is equivalent to a sum of $223,469 and, in the overall adjustment and having regard to the reasonable expectations for income and gainful employment of the parties, their property and financial resources and the terms of the s 79 order, such a percentage and monetary adjustment is just. I am particularly mindful of the past annual income received by the husband, or on his behalf through various entities. I have reflected upon the future earning capacity of the husband, as contrasted to that of the wife. I have further assessed the actual final dollar sum that each party would receive under the s 79 orders that I have pronounced. All of those considerations require this percentage loading as part of my balanced considerations of the s 75(2) factors.
I must record that my decision to award such a 1.5 per cent loading is in the full knowledge and understanding that I have separated from those considerations the further and related issue of an adjustment required because of the facts or circumstances identified in s 75(2)(o), which I have focused upon hereunder.
ASSESSMENT OF THE S 75(2)(o) FACTOR
Having concluded a contribution based division of property and then considered each of the other relevant s 75(2) factors, I have also considered the evidence and the outcome in the context of any further adjustment that is required arising out of any fact or circumstance which I conclude the justice of the case requires must be taken into account.
I have carefully recorded in these Reasons for Judgment that there are certain particular matters and findings that I have made that most properly fall under the compass of this sub-paragraph.
In addition to my findings as to the lack of disclosure by the husband in relation to the cash and shares of the Estate, I have also made particular findings in respect of the payment of interest foregone by the husband from his mother, his excessive cash withdrawals and the excessive payments to his business partner in respect of luxurious overseas holidays.
My considered assessment is that a further adjustment in favour of the wife arising from the s 75(2)(o) factor is required. I have fixed that adjustment to be a further 2 per cent, which equates to a monetary adjustment of $297,959.
For all the issues that I have identified and findings that I have made within the Judgment that are referable to this factor I conclude that such a percentage adjustment is proper and will bring about a just and equitable outcome.
Overall, I have ordered a total adjustment of 3.5 per cent in favour of the wife because of s 75(2) factors. That equates to a monetary adjustment of $521,428. Upon a careful evaluation, I regard that to be a just, equitable and required adjustment over and above that which I determined on a contribution basis.
OVERALL DIVISION OF PROPERTY
Thus my conclusion is that the property of the parties should be divided as to 66.5 per cent to the husband and 33.5 per cent to the wife and that such a division brings about a just and equitable division.
The dollar value of that division of property, excluding superannuation, is that the husband would receive or retain a value of $9,907,121 and the wife a value of $4,990,806.
Thus the monetary difference between the property awarded to each of the parties is $4,916,315 in favour of the husband. That dollar differential is just and proper and reflects all of his greater contributions which I have identified, adjusted by the s 75(2) factors that favour the wife.
LUMP SUM CASH PAYMENT TO THE WIFE
I have awarded to the wife a property division, excluding superannuation, of $4,990,806. She is to retain net property of a value of $1,616,441.
Thus the balance of the lump sum required to be paid to the wife’s solicitors on her behalf by the husband is $3,374,365. From that payment the wife must discharge all of her existing personal liabilities.
From that lump sum the wife has the option but would most likely acquire ownership of a home to live in and, on all of the evidence before me of like properties in the Suburb K area, it would likely cost no less than $1.25 million, and possibly an even greater sum. I make no specific finding on this issue but, if any such home is purchased by the wife it will significantly reduce the capital that she could invest and derive an interest or dividend return thereon.
DIVISON OF THE PARTIES’ SUPERANNUATION
The case proceeded upon the wife retaining her superannuation entitlements of $28,850 in the S Family Superannuation Fund. That is proper and in due course the wife must roll out that entitlement to a newly established superannuation fund. At that time, and when there are no other monies retained within the S Family Fund it may either be wound up or the wife may resign any corporate interest or entitlement that she has therein in favour of the husband, if it be his election to retain such a corporate structure.
As to the P Superannuation Fund, I have ordered that there be a splittable payment therefrom in favour of the wife so that, when combined with her $28,850 entitlement which she has otherwise retained, her total superannuation will equate to 33.5 per cent of the combined entitlements of both superannuation funds.
The husband otherwise is to retain the structure of his primary superannuation fund and will retain entitlements therein to equate to an overall superannuation apportionment of 66.5 per cent.
CONCLUSION
Finally I conclude that this division of property and superannuation as I have now ordered is a just and equitable division within the meaning of s 79(2) of the Act.
I certify that the preceding One thousand three hundred and fifty nine (1359) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 28 March 2013.
Associate:
Date: 28 March 2013.
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