SOMMER & SOMMER

Case •

[2021] FamCA 61

FAMILY COURT OF AUSTRALIA

SOMMER & SOMMER [2021] FamCA 61
FAMILY LAW – PROPERTY – determination of the percentage share of two properties in the same suburb as between the husband, wife and the second and third respondents, the husband’s brother and his company – where the Court rejected the wife’s case that she, her husband and the second respondent each owned one third of both properties – finding that 50 per cent of both properties owned equally as between the husband and wife and the remaining 50 per cent by the second and third respondents – where the second respondent has solely maintained the properties since May 2016 – where the properties have a combined increase in value of $400,000 since purchase – declaration made as sought by the second respondent – second respondent given an opportunity to purchase the interest of the husband and wife in those properties – wife to receive 62.5 per cent of the parties’ property.
Family Law Act 1975 (Cth) ss 75(2), 79

Bevan & Bevan (2014) FLC 93-572
Coghlan & Coghlan (2005) FLC 93-220
Ferraro & Ferraro (1993) FLC 92-335
Pierce & Pierce (1999) FLC 92-844

Stanford v Stanford (2012) 247 CLR 108
APPLICANT: Mr Sommer
RESPONDENT: Ms Sommer
SECOND RESPONDENT: Mr N Sommer
THIRD RESPONDENT: P Pty Ltd
INTERVENER: C Pty Ltd t/as C Lawyers
INDEPENDENT CHILDREN’S LAWYER: Legal Aid NSW
FILE NUMBER: SYC 2639 of 2016
DATE DELIVERED: 18 February 2021
PLACE DELIVERED: Sydney
PLACE HEARD: Sydney
JUDGMENT OF: Henderson J
HEARING DATE: 23, 24, 25, 26 November 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr O’Reilly
SOLICITOR FOR THE APPLICANT: One Group Legal
COUNSEL FOR THE 1ST RESPONDENT: Self-Represented Litigant

COUNSEL FOR THE 2ND AND 3RD

RESPONDENTS:

 Ms Tabbernor

SOLICITOR FOR THE 2ND AND 3RD

RESPONDENTS:

 York Law Family Law Specialists
COUNSEL FOR THE INTERVENER: Chris Othen
SOLICITOR FOR THE INTERVENER: C Lawyers
COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER Mr Ahmad
SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYYER Legal Aid NSW

Orders

The Court declares as follows:

  1. The Second Respondent Mr N Sommer holds 40% of the property at 1 Q Street, Suburb D in the State of New South Wales (“the 1 Q Street”) in trust for the Applicant husband and First Respondent wife in equal shares.

  2. Each of the husband and wife are liable for one half of the mortgage referable to the property at 1 Q Street, Suburb D.

  3. The Third Respondent P Pty Ltd holds 50% of the property at 2 Q Street, Suburb D in the State of New South Wales (“the 2 Q Street”) in trust for the Applicant husband and First Respondent wife in equal shares.

  4. Each of the husband and wife are liable for one half of the mortgage referable to the property at 2 Q Street, Suburb D.

The Court orders:

  1. The First Respondent wife and Applicant husband are to assign their interest in the 1 Q Street and the 2 Q Street to Mr N Sommer provided the following occurs in accordance with Order 6 herein.

  2. Mr N Sommer is to refinance 100% of the current mortgages over the properties at 1 Q Street, Suburb D and 2 Q Street, Suburb D, discharge the husband and wife’s liabilities  in respect of those mortgages and thereafter:

    (a)Pay to C Lawyers on behalf of the Intervenor, C Pty Ltd, the sum of $236,238.81, or the sum as has been determined in Federal Circuit Court proceedings SYG697/2020 relating to the wife and Intervener’s costs dispute with those monies to be held on trust pending the conclusion of the Federal Circuit Court proceedings or by agreement between the wife and Intervener.

    (i)The Court notes the monies paid by Mr N Sommer to C Lawyers are part of the wife’s verdict of $452,354 to be paid by him to the wife reducing the sum then payable by Mr N Sommer to the wife accordingly;

    (b)Mr N Sommer is to provide to the husband and wife at settlement a spreadsheet of the outgoings and costs of the 1 Q Street and the 2 Q Street since 20 October 2020 to the date of settlement paid by him or any entity over which he has control;

    (i)The Court notes that Mr N Sommer must account to the husband and wife for the sum of $54,596 (refer to paragraphs 170 (c) and (d) of this judgment).

    (c)Mr N Sommer may deduct from the sum referred to in the above notation at (6)(b)(i) 50 per cent of the outgoings paid by him in respect of the properties since 20 October 2020 to the date of transfer by way of reimbursement to him and pay to the wife 62.5 per cent of the balance then remaining and the remainder to the husband;

    (d)Simultaneously with the wife’s compliance with Order 5 herein pay to the wife the balance then remaining of her verdict as determined in Order 6(a) and notation 6(a)(i) and Order 6(c) herein;

    (e)Simultaneously with the husband’s compliance with Order 5 herein pay to the husband the sum of $276,229 and his entitlement pursuant to order 6(c) herein less:

    (i)Any arrears of child support in the husband’s name as at the date of this judgment to be paid to the Child Support Agency for on payment to the wife.

    (f)Mr N Sommer is to comply with Orders 6(a) to 6(e) within 90 days of the date of delivery of this judgment or as agreed.

  3. The husband and wife are to do all things and sign all documents necessary to ensure compliance with Order 5 and Order 6 herein.

  4. The monies held in trust with York Law be immediately paid as to 62.5 per cent to the wife and the balance to the husband.

  5. Thereafter the property standing in all parties’ names including but not limited to superannuation shall be their property absolutely and the Applicant husband and First Respondent wife will thereafter have no right or interest in the properties at 1 and 2 Q Street, Suburb D or any asset of Mr N Sommer or P Pty Ltd.

  6. The Court grants the husband and Second Respondent Mr N Sommer authority to provide a copy of this judgment to any bank, financial institution or other lending authority, the Child Support Agency and the Australian Taxation Office in the event the wife makes allegations to any such institution of fraud, misleading conduct or financial impropriety in relation to Mr N Sommer and the husband.

  7. In the event Mr N Sommer chooses not to buy out the husband and wife’s interest in the 1 Q Street and the 2 Q Street (collectively “the properties”) or is unable to comply with the orders as set out in this judgment the properties are to be placed on the market for sale by way of auction at a reserve agreed with Mr N Sommer to have the conduct of the sale of the properties provided the following occur:

    (a)That in the absence of the parties’ agreement as to a reserve for the properties the reserve is to be determined by the real estate agent with carriage of the sale;

    (b)In the event of the parties being unable to agree as to a real estate agent and or a solicitor to conduct the sale by way of auction the wife is to within seven (7) days of failing to reach an agreement nominate three (3) real estate agents and three (3) solicitors and Mr N Sommer is to select one from each category with a further seven (7) days;

    (c)Mr N Sommer is to provide to the to the agent and solicitor with conduct of the sale sufficient authorities to enable the husband and wife to be  provided with all reasonable information concerning the sale that they may request from time to time;

    (d)       From the net proceeds of sale the following to be deducted:

    (i)Current mortgage as to the SS Bank in respect of both properties;

    (ii)Agent’s commissions and any associated sales costs;

    (iii)Solicitor’s costs for acting on the sale;

    (iv)To the wife 62.5 per cent of 50 per cent of the net proceeds of sale less the following amounts:

    a.$15,599 to be paid to Mr N Sommer;

    (v)To the husband 37.5 per cent of 50 per cent of the net proceeds of sale less the following amounts:

    a.$31,543 to be paid to Mr N Sommer;

    b.The amount of arrears, if any, of child support standing in his name as at the date of settlement with such sum to be paid to the Child Support Agency.

    (vi)The remaining 50 per cent of the balance of proceeds of sale of both the 1 Q Street and the 2 Q Street are to be paid to Mr N Sommer less the following amounts:

    a.62.5 per cent to the wife of the balance remaining of the sum of $54,596 after deduction of 50 per cent of the outgoings paid by Mr N Sommer since 20 October 2020 in respect of the properties to the date of settlement;

    b.The balance of the sum of $54,596 to the husband.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2639 of 2016

Mr Sommer

Applicant

And

Ms Sommer

Respondent

And

Mr N Sommer

Second Respondent

And

P Pty Ltd

Third Respondent

And

C Pty Ltd t/as C Lawyers

Intervener

And

Legal Aid NSW

Independent Children’s Lawyer

REASONS FOR JUDGMENT

  1. This matter concerned property, being a dispute between a husband and wife, the husband’s brother, Mr N Sommer, the third party to these proceedings, and a company 100 per cent owned by Mr N Sommer and named P Pty Ltd.

  2. The properties in dispute are properties at 1 Q Street, Suburb D and 2 Q Street, Suburb D named in this judgment as “the 1 Q Street” and “the 2 Q Street” respectively.  The legal title to the 1 Q Street is 90 per cent to Mr N Sommer and 5 per cent each to the husband and wife.  The legal title to the 2 Q Street is 100 per cent to P Pty Ltd, a company of whom Mr N Sommer is the sole director and owns 100 per cent of shares.

  3. The husband and wife have proceeds of sale of the former matrimonial home remaining in a solicitor’s trust account amounting to just in excess of $150,000.  The bulk of their wealth is their interest in the above properties.

  4. The husband and his brother Mr N Sommer were ad idem in relation to the ownership of the properties, being that Mr N Sommer or his company owned 50 per cent of each property and the wife and husband owned the remaining 50 per cent of each property equally despite the legal title to each property stating a different ownership. The wife did not accept this position and maintained that the three parties owned the two properties as to one third each.

  5. Additionally, C Pty Ltd trading as C Lawyers, who were the wife’s former solicitors, intervened in the proceedings to protect their interests for unpaid legal fees.  All parties entered into consent orders in relation to this issue and those proceedings are being dealt with in the Federal Circuit Court of Australia in proceedings number SYG697/2020.

  6. The wife, Ms Sommer, acted for herself.  The Applicant husband, Mr Sommer, was represented by Mr O’Reilly of counsel.  The Second and Third Respondents, being Mr N Sommer, the husband’s brother, and P Pty Ltd (“the company”), were represented by Ms Tabbernor of counsel.

  7. The material read was voluminous, and was as follows:

    a)For the husband:

    i)Amended Initiating Application filed 17 September 2018;

    ii)Affidavit of the husband filed 17 November 2020 with exhibits;

    iii)Financial Statement of the husband filed 13 November 2020;

    iv)Affidavit of Mr R filed 17 November 2020;

    v)Affidavit of Mr T filed 18 November 2020;

    vi)Affidavit of Mr S filed 18 November 2020;

    vii)Affidavit of Mr V filed 19 November 2020;

    viii)Affidavit of Ms W filed 20 November 2020;

    ix)Affidavit of Ms X filed 20 November 2020;

    x)Affidavit of Mr Y filed 20 November 2020;

    xi)Application in a Case filed 16 November 2020;

    xii)Affidavit of Mr Z filed 16 November 2020.

    b)For the wife:

    i)Affidavit of the wife filed 16 October 2020 with exhibits;

    ii)Financial Statement of the wife filed 16 October 2020 with exhibits.

    c)For the Second and Third Respondents:

    i)Reply to Second Further Amended Response of the Second and Third Respondents filed 11 September 2018;

    ii)Affidavit of Mr N Sommer filed 16 October 2020 with exhibits;

    iii)Affidavit of Mr N Sommer filed 13 November 2020 with exhibits;

    iv)Response to Application in a Case filed 17 November 2020;

    v)Affidavit of Mr N Sommer filed 17 November 2020 with exhibits.

    d)For the Intervener:

    i)Application in a Case filed 2 April 2019;

    ii)Affidavit of Mr AA filed 2 April 2019;

    iii)Affidavit of Mr AA filed 12 November 2020.

  8. The exhibits were as follows:

    a)For the husband:

    i)Husband’s exhibit 1: Countersigned Novation Deed dated 23 June 2015;

    ii)Husband’s exhibit 2: Costs memo of the husband;

    iii)Husband’s exhibit 3: Aide Memoire.

    b)For the wife:

    i)Wife’s exhibit 1: Four letters from the wife’s treating health professionals dated 30 November 2017, 25 October 2017, 12 August 2017 and 17 August 2018 through to 13 November 2017 and annexed to the wife’s Affidavit filed 20 August 2018;

    ii)Wife’s exhibit 2: Costs memo of the wife;

    iii)Wife’s exhibit 3: SS Bank Account statement with account number ending 9966;

    iv)Wife’s exhibit 4: SS Bank Account statement with account number ending 0262;

    v)Wife’s exhibit 5: Three emails between BB Brokers and CC Company dated from 20 May 2015 to 18 June 2015;

    vi)Wife’s exhibit 6: Emails dated 5 June 2015 through to 13 June 2015 relating to the wife’s health, and the husband’s redundancy arrangements.

    c)For the Second and Third Respondents:

    i)Second Respondent’s exhibit 1: Section 50 Schedule of the Second Respondent;

    ii)Second Respondent’s exhibit 2: Document from SS Bank setting out disbursements in relation to the two Suburb D properties.

    d)There were four Court exhibits:

    i)Court exhibit 1: The Family Report of Ms DD dated 22 November 2019;

    ii)Court exhibit 2: Real Property valuation report of Mr EE in respect of the property at 1 Q Street dated 19 November 2020;

    iii)Court exhibit 3: Real Property valuation report of Mr EE in respect of the property at 2 Q Street, Suburb D dated 19 November 2020;

    iv)Court exhibit 4: Joint Valuation Report dated 25 November 2020.

  9. The following witnesses were cross examined:

    a)For the husband:

    i)The husband;

    ii)Mr FF, the husband’s accountant.

    b)For the wife:

    i)The wife.

    c)For the Second and Third Respondents:

    i)Mr N Sommer, the Second Respondent.

  10. The relevant chronology is as follows: 

    a)The husband is 43, the wife is 40. 

    b)In 2002, before the parties met, the husband had purchased a property at Suburb GG for $225,000 (“the Suburb GG property”), and a valuation by Mr R retrospectively indicates that at co-habitation, that property was worth $310,000.[1]

    [1] Affidavit of Mr R filed 17 November 2020.

    c)The parties commenced co-habitation in 2003, and were married in 2004.  They separated on the 3rd of September 2015. 

    d)In September 2003, the wife purchased a property at Suburb HH for $267,000.  Her interest in that property at that time was some $10,000. 

    e)The Suburb HH property was sold in January 2005 and the husband asserts he was required to pay $30,000 for a deficit of sale proceeds over that then mortgage.  The wife disputes this sum but agrees that she did not receive any monies from the sale.

    f)There are three children of the marriage – JJ, born in 2005; KK, born in 2006; and LL, born in 2013. 

    g)In August 2004, the parties purchased their property at MM Street, Suburb B (“the Suburb B property”) for $490,000. 

    h)In late 2006, the wife was diagnosed with a medical condition, a lifelong condition from which the wife will always suffer, requiring her to take medication such as Cortisone. This condition can flare up at any time and cause her significant pain and mobility issues.

    i)In December 2014, all three parties purchased a property, 1 Q Street, Suburb D for $1,950,000. This property was fully financed by the SS Bank including stamp duty costs.

    j)The husband and wife refinanced the Suburb B property with the SS Bank at that time as their home at Suburb B was part of the security for this refinance. The title to the 1 Q Street is held 90 per cent to the Second Respondent, Mr N Sommer, and five per cent each to the husband and wife.

    k)In early 2015, the parties entered into a contract to purchase 2 Q Street, Suburb D for $1,575,000. This property was again financed with the SS bank but only up to 80 per cent of its purchase price and the husband, wife and Mr N Sommer needed to find $300,000 or thereabouts for the 20 per cent difference together with stamp duty and other costs.

    l)Prior to settlement of the 2 Q Street, a Deed of Novation was entered into between all three parties to change the purchaser’s name from their three names to P Pty Ltd. The 2 Q Street is registered in the name of P Pty Ltd and Mr N Sommer is the sole director and shareholder of the company.

    m)The wife disputes she entered into this Deed of Novation and disputes ownership of the property both legally and beneficially as she does with the 1 Q Street.

    n)In June 2015, the husband sold the property at Suburb GG for $525,000, netting some $300,000 from the sale.  These monies were used to fund the deposit and other outgoings for the purchase of the 2 Q Street.

    o)Mr N Sommer sold a property he owned at Suburb NN, netting some $186,000 in or around June 2015 and these monies together with other monies he had, were used by him to fund his share of the deposit and other outgoings to purchase the 2 Q Street.

    p)It is the case of the husband and his brother that these moneys were used by them to fund the purchase of the 2 Q Street, being the difference between the 80 per cent borrowed and the cost of completion of the sale, together with stamp duty.

    q)The parties separated on either 3 September or 20 September 2015.  Nothing turns on this dispute. 

    r)The husband and wife have not made any contribution to the outgoings or mortgage over the Suburb D properties since May 2016. Mr N Sommer has maintained those properties solely from his income and resources and has managed leasing of those properties and their upkeep.

    s)The parties’ home at MM Street, Suburb B was sold for $1,018,349 in March 2019, and $153,751 of the sale proceeds was retained by the bank reducing one of the mortgages in relation to the Suburb D properties.

    t)It is clear from the three valuations obtained by the parties in 2017, 2018 and now 2020, that the increase in value of the Suburb D properties since separation has been, combined, $400,000. 

  11. The children have not spent time with or seen their father for nearly two years.  To their credit, the parties resolved the parenting issues at trial as follows.

  12. The older children will spend time with their father in accordance with their wishes.  The younger child will ultimately be spending alternate weekends with his father.  His time is to commence shortly by way of supervised time, and graduate to unsupervised overnight and weekend time, and some school holiday time.

  1. The relevant procedural chronology is as follows:

    a)Proceedings were initiated by the husband in the Federal Circuit Court on 2 May 2016. The wife filed her Response on 16 May 2016.

    b)A Family Report was ordered on 24 March 2017.

    c)An Amended Response to Final Orders was filed by the wife on 27 April 2017 seeking orders for the Suburb B property (the former matrimonial home) to be transferred to the wife, and for the sale of the properties at 1 and 2 Q Street Suburb D with nett balance of proceeds to be distributed 10 per cent to the wife, 56.6 per cent to the husband and the balance to Mr N Sommer.

    d)The matter was transferred to the Family Court of Australia on 14 August 2017.

    e)The Second and Third Respondents, Mr N Sommer, the husband’s brother, and P Pty Ltd were joined to proceedings by way of Amended Response of the wife filed 11 January 2018.

    f)On 29 June 2018 the wife filed an Amended Response to an Application in a Case seeking to move into the 1 Q Street and pay rent of $1,000 per week.

    g)On 27 of August 2018, the wife filed a second further Amended Response. Orders were sought for a declaration that the 1 and 365 properties were held in shares of one third as between the husband, wife and Second Respondent.

    h)On 5 November 2018, consent orders were made for the Suburb B property to be sold with the proceeds of sale distributed $400,000 to the wife and $100,000 to the husband by way of partial property settlement. The orders relating to partial property settlement were suspended on 13 March 2019.

    i)On 20 December 2018 the wife filed a third Further Amended Response.

    j)On 13 March 2019 Justice Henderson ordered that, by way of interim property distribution and in substitution of suspended orders of 5 November 2018, $100,000 of the proceeds of sale of the Suburb B property were to be provided to the wife, and $33,000 to the husband of which $20,000 was to discharge all arrears of child support then owing. $50,000 was provided to the Second and Third Respondents.

    k)The balance was to remain in an interest bearing controlled monies account pending final hearing. It was noted that the wife would withdraw the NCAT proceedings in relation to the lease of the 1 Q Street.

    l)On 8 April 2019, C Lawyers were granted leave to intervene in the proceedings. The husband and wife were to pay the $100,000 due to the wife as per Orders of 13 March 2019 to C Lawyers to be held in a controlled monies account in the wife’s name pending further order.  They intervened due to a lien they asserted they had in relation to the wife’s entitlement to property for unpaid legal fees.

    m)On 9 April 2019 the wife filed an Application in a Case seeking orders that a sum of $70,393 from the proceeds of sale of the Suburb B property be paid towards the wife’s rental accommodation and $6,611 be paid to the wife’s brother in repayment of a loan.

    n)On 16 December 2019, an order was made for the husband to complete a Men’s Behaviour Change course.

    o)On 28 February 2020 the matter was listed for Final Hearing on 9, 10, 11, 12 and 13 November 2020.

    p)Orders were made for joint valuations to be completed for the properties at 1 and 2 Q Street.

    q)Orders were made on 7 August 2020 relisting the final hearing on 23, 24, 25, 26 and 27 November 2020.

Short synopsis

  1. It is the wife’s case that her brother-in-law, Mr N Sommer, has fraudulently dealt with her interest in the properties at Suburb D and that the husband is complicit in this as follows:

    a)By Mr N Sommer having conversations with the SS Bank without her knowledge;

    b)By Mr N Sommer changing the ownership of the 2 Q Street to a company owned by him without her knowledge or consent;

    c)Mr N Sommer and the husband being party in part to a forgery in that the wife asserts her signature does not appear on the Deed of Novation, which was exhibited in these proceedings;

    d)That Mr N Sommer has rented the property for an undervalue, the wife asserting the property could have been rented for $2,150 per week, when it was only rented for $1,000 per week;

    e)That Mr N Sommer and the husband have failed to include her in important decisions regarding the property;

    f)That Mr N Sommer’s actions have negatively affected her credit rating by claiming hardship in respect of the loans due to COVID-19, and having those loans paced into a hiatus in relation to payment of the mortgage and the like;

    g)That the husband has been receiving cash payments from the rental of the properties, and this has not been disclosed;

    h)That the husband purchased a boat worth $110,000;

    i)That the husband lives a luxurious lifestyle in a penthouse apartment and has holidays overseas and at other locations in Australia;

    j)That the husband has failed to declare his real income;

    k)That the husband has not been open and honest or forthcoming disclosing what his income is to the Child Support Agency or this Court;

    l)That the husband and Mr N Sommer have conspired to minimise the matrimonial pool for division, and minimise her interest in the properties. 

  2. As the evidence unfolded, it is the wife that has behaved in a most egregious fashion towards Mr N Sommer and, to a lesser extent, her former husband. 

  3. After hearing the evidence, the wife’s case and her evidence being tested and in reading the voluminous documents produced by the parties, I have unfortunately formed the view the wife is not a witness of truth, and will simply lie to continue her unsupported, ill-informed and totally unfounded allegations against Mr N Sommer and her former husband of fraud, poor behaviour, mishandling of money and endeavouring to cheat her out of her entitlement to property.

  4. The legal fees expended in this matter are approaching, between all parties, a million dollars and that is an absolute travesty as the pool of assets for division as between the husband and wife ultimately amounted to just over $1 million. There is perhaps 2 million dollars in net assets as between the three parties to this litigation.

  5. Nothing arose from testing the evidence of the husband or Mr N Sommer as it became apparent that their position regarding the properties, their acquisition, the beneficial ownership of the properties and their management was the correct position and the wife’s a mere fiction.

Wife’s evidence and position

  1. The wife’s argument at the hearing was that the properties at Suburb D are owned a third by her, a third by her husband, and a third by Mr N Sommer.

  2. It is Mr N Sommer and the husband’s case that Mr N Sommer and his company P Pty Ltd owns 50 per cent of the properties, and the husband and wife own the remaining 50 per cent of the properties equally and that the husband and wife each have a 25 per cent interest in both properties.

  3. That Mr N Sommer maintains this position is unusual and commendable for, at law, Mr N Sommer owns 90 per cent of the 1 Q Street, the husband and wife 5 per cent each and P Pty Ltd owns the totality of the 2 Q Street. Mr N Sommer is the sole director and shareholder of that company. It is rare I see a matter where a third party to a family law matter says he owns less of a property than is his or her legal entitlement.

  4. Mr N Sommer says:

    The way these properties are held at the Land Titles Office done for tax purposes is incorrect and that I hold on trust for my brother and former sister-in-law 50 per cent interest equally as between them, and I have been wishing to ensure that their entitlement to property passes to them.

  5. There was not one skerrick of evidence produced by the wife to support her assertion that she and her husband beneficially owned 66 per cent of both properties. The evidence was to the contrary and supports Mr N Sommer and the husband’s position and is as follows.

  6. When these properties were purchased and loans taken out, the repayment and offset accounts to repay the loans on each property were divided into two loans and two offset accounts, a total of four loan accounts and four offset accounts, across both properties.  One set of loans and offset accounts were in the name of the husband and wife and the second set of loans and offset accounts were in the name of Mr N Sommer.

  7. The husband and wife had a responsibility to make one half of the loan repayment for each property together with paying outgoings and Mr N Sommer had responsibility for the other half of the loan repayments.  Each were free to use the offset account attached to their loan accounts as they saw fit and could place as much or as little money into their offset accounts as they chose.  The dealings with the two loan repayment accounts and offset accounts in respect of each property were entirely independent of the other.

  8. The husband and wife and Mr N Sommer, up to May 2016, paid 50 per cent of the outgoings of the property including the mortgage.

  9. The wife asserted that her husband was paying 66 per cent of the mortgages post separation in respect of the property without producing one document to support this contention, despite having produced well over 1,000 pages of documents, including bank statements and the like, to support her assertions.  The reality is, without Mr N Sommer continuing to manage and support these properties, she and her husband would not have these properties today and the benefit of $400,000 increase in value since 2016.

  10. Not only did the wife not accept the reality of the situation, which she was involved in when set up, she alleged to the SS Bank in mid-2019 that Mr N Sommer, who is a mortgage broker working with that bank, had perpetrated a fraud upon her when the 2 Q Street was purchased by P Pty Ltd.

  11. Not only did this false accusation cause him significant embarrassment and a potential loss of income, but was potentially lethal to his capacity to earn income into the future.  The SS Bank dismissed, in their entirety, her baseless claims, yet she persisted with those allegations at trial. 

  12. On 27 April 2017 the wife filed an affidavit when she was represented by solicitors and said at paragraph 21 that she believed the properties were being purchased by the three parties as tenants in common in equal shares.  Yet, apart from her belief, provided no evidence to support her position.

  13. It was put to her in cross examination that she did not hold this belief at the time of purchase.  The wife would not concede and answered that she believed Mr N Sommer was a mortgage broker only in the arrangement.  That was an outright lie. Further, to allege at trial Mr N Sommer was only a mortgage broker is at odds with all the evidence before me including her fictitious argument that she, her husband and Mr N Sommer owned one third each of both properties.  If he was only a mortgage broker, one wonders how he could own one third of the properties even on the wife’s case.

  14. Again, the wife was unable to produce one piece of documentary evidence to support her baseless assertions.

  15. It is common ground that the husband and wife refinanced their mortgage at Suburb B with the SS Bank at the time of the purchase of the 1 Q Street as the bank required their home at Suburb B as part of the security for the 100 per cent borrowings including for stamp duty to purchase the 1 Q Street.

  16. The parties determined to purchase the 1 Q Street in late December 2014, early January 2015 for $1,950,000.  They funded the 5 per cent deposit to secure the property from monies the husband and wife were holding in their joint account, which was in part money the parties were holding for her brother, some $40,000. 

  17. The wife maintained that as she and her husband alone had paid the initial deposit for the purchase of the 1 Q Street from their funds and as Mr N Sommer made no contribution to this deposit he has no interest in the property.  It is correct that the husband and wife made this initial 5 per cent deposit to secure the property. However, the wife failed to disclose that when the purchase of the 1 Q Street settled and the entire purchase price including stamp duty was released by the drawdown of the loan, she and her husband were paid all of the deposit they had paid including that on Mr N Sommer’s behalf by a deposit of $92,500 into their joint SS Bank account on settlement.  The facts are no party paid a 5 per cent deposit at the end of the day as the entirety of the purchase price of the 1 Q Street was borrowed money which they had an equal obligation to repay to the SS Bank.

  18. The parties then determined to purchase the 2 Q Street in June 2015.  This property was purchased for $1.575 million and the parties were able to secure 80 per cent of the purchase price with a loan from the SS Bank of $1.2 million.  The parties were required to make up the shortfall of borrowings of $314,000 including paying stamp duty from their own resources.  

  19. The wife failed to acknowledge in her affidavit or orally that Mr N Sommer used the proceeds of sale of his property at Suburb NN to fund his share of the deposit and stamp duty required to enable the parties to purchase the 2 Q Street. The wife maintained that the money to fund the 20 per cent deposit for the 2 Q Street came from the parties’ joint account with the SS Bank. This too is a correct statement. However, again the wife failed to disclose the source of deposits totalling $186,000 into their joint account was the proceeds of sale of Mr N Sommer’s Suburb NN property.

  20. That this is what Mr N Sommer did becomes clear from the wife’s own exhibit, wife’s exhibit 3, wherein $186,001.20 in total is deposited into a joint SS Bank account in the husband and wife’s name on 22 June 2015.  The source of those funds is disclosed in wife’s exhibit 4, being two transfers one on 2 June 2015 in the sum of $41,998, the second $144,420.67 and are noted as:

    FROM HBA SUBURB NN SAL PP STREET

    That was a property the wife agreed Mr N Sommer owned. This evidence and the husband and wife’s evidence of their contribution to the 20 per cent deposit being the husband’s net proceeds of sale of his property at Suburb GG owned prior to the marriage from which he netted some $300,000, is clear evidence that this was a family venture and they each used the assets they had to make up the $314,000 plus stamp duty and other costs, a figure approaching $372,000, needed to settle the 2 Q Street.

  21. Mr N Sommer deposited sufficient monies into the husband-and-wife’s joint account to make up his necessary 50 per cent deposit and payment for stamp duty for the purchase of the 2 Q Street and the parties funded the remaining 50 per cent. The wife would not concede this was the case.

  22. When pressed in cross-examination, the wife said this money paid into the joint account of herself and her husband was not paid by Mr N Sommer when it is as clear as can be, it was. This is an extreme example of the wife maintaining her false position in the light of overwhelming evidence to the contrary.

  23. The wife and children were living in the former matrimonial home post separation and the mortgage was $380 a week .The wife was unable to pay this outgoing and in part this is due to the husband’s very poor record in paying child support. The parties were required to sell the property in 2019. Understandably, the SS Bank was very interested in this sale and sale price given they had an all monies mortgage over the Suburb B property as part of the financing of the Suburb D properties.

  24. In order to maintain the bank requirements of ensuring that parties only had borrowings up to 80 per cent of the value of a property, when the husband and wife sold the Suburb B property the bank required them to deposit $153,751 of their net proceeds of sale into the Suburb D mortgages or mortgage.  The bank required these monies to be paid off one loan and the wife objected to this for reasons that entirely escape me.

  25. The wife complained about this bitterly and her bitterness extended to trying to hold off settlement of the sale of Suburb B. That is clear from her own affidavit filed 16 October 2020 in which she says at paragraph 315:

    On 1 April 2019, I received a response from SS Bank which confirmed that both loans needed to be paid to reduce the balance. 

    317. I had objected to all parties on numerous occasions to the loan reduction being paid into only one Home-Loan…as I knew it could adversely affect my interest in the Suburb D properties. Both Mr N Sommer and Mr Sommer, and their solicitors, were pressuring me to agree to the loan reduction being placed solely into [one] home loan.

  26. The wife still did not agree on the day of settlement, 16 April 2019, to reduce one loan by the sum of $153,000 as required by the bank. The wife alleged that Mr N Sommer interfered, tried to control and deal with moneys from the sale of the parties’ property at Suburb B. This was a falsehood and there was no evidence of this occurring. The evidence was, rather, of Mr N Sommer doing all he could to ensure settlement took place on the due date.

  27. At paragraph 319 of the wife’s affidavit she says:

    On the same day…I had not yet provided consent.

  28. Whether the money was paid into one loan or paid off both loans did not affect her interest in either property given her brother-in-law and husband’s clear position that Mr N Sommer owned 50 per cent and the wife and husband owned the other 50 per cent of both properties.  This was egregious and misleading and the wife has maintained this erroneous view throughout the litigation.

  29. The wife further complained in her affidavit that:

    319. …Mr N Sommer unilaterally contacted the Conveyancer (instead of through his solicitor) to threaten that if they did not approve the loan reduction solely into the one Home-Loan…that the purchaser would sue Mr Sommer and me, and SS Bank would repossess the properties.

  30. The email the wife says supports this assertion of hers was annexure “S-49” to the wife’s affidavit of 16 October 2020. It is an email from Mr N Sommer to the conveyancer, Ms QQ, and reads:

    Hi Ms QQ.  As per your request to allow settlement to take place and to avoid legal proceedings being taken against Mr Sommer and Ms Sommer from the purchasers as well as to avoid mortgage in possession being actioned by the SS Bank please find attached the signed document.

  31. That is not a threat, it is an offer of help.

  32. At paragraph 321 of the wife’s affidavit she says:

    At or around 2.45pm, I received a phone call from Mr N Sommer’s solicitor, Ms Leanne Mastrofilippo, urging me to sign the Settlement Authority.  Ms Mastrofilippo and I had a conversation with words to the effect of:

    Ms Mastrofilippo said:  “Mr Sommer called me and said that you do not want to sign the forms.  You don’t need to worry about it, you’re not going to lose the money.” 

    I said: “I’ve never agreed for the money to go into the one loan.  Why is Mr N Sommer insisting on it going into the one?”

    Ms Mastrofilippo said:  “The settlement is coming up now and it needs to go through otherwise we could lose the buyer and everything will be lost.  All the costs and everything will fall on you because you’re the one holding it up.  Then you can be sued by everyone, even the buyers and you’ll lose the deposit.” 

    I said: “If I sign it now, that’s it, my money’s gone because it’s going to go into the one account and I have no guarantees of getting that back because you know why Mr N Sommer wants it in that account.  You know why Mr N Sommer wants to put it in one account only.” 

    Ms Mastrofilippo said: “We just need to get this signed and through, and after that, it can be equally distributed and assigned to the loans.”

    I said: “It needs to go into both of the loans.”

    Ms Mastrofilippo said: “And it will. It’s just so the property can go through today. Just sign it and it will be applied equally after. Just sign it, you will not lose out.”

  33. In cross-examination she was asked:

    Why did you object to this happening?  It was clear there was no detriment to you, it was the bank, not your brother-in-law, requiring it be paid off one loan.

  1. Reply:

    He had nothing to do with the sale of Suburb B. 

  2. Yet the wife admitted in her affidavit, at paragraph 306, that the $153,751 placed into the home loans for the Suburb D properties upon the sale of the parties' home at Suburb B occurred as the Suburb B property was cross-collateralised with the two home loans on the two properties.  With this admission it was disingenuous of the wife to assert that Mr N Sommer was improperly involved in the sale of their home at Suburb B when he had an interest in that sale and its outcome.

  3. The wife’s behaviour at settlement of the Suburb B property was entirely unjustified and puts her and no one else in a poor light.

  4. It is clear the Suburb B property was part of the financial arrangement the parties had with the SS Bank. Mr N Sommer had paid some $50,000 for necessary maintenance and upkeep of the property prior to the sale of the Suburb B property, being further support that this was a family venture which had prospects of doing well.  Mr N Sommer had had as much interest in the sale of the Suburb B property as did the wife and husband. 

  5. The wife’s egregious conduct and groundless beliefs have caused her husband and Mr N Sommer to incur significant legal expenses. 

  6. In relation to the wife’s submission that she did not sign the Deed of Novation to change the buyer of the 2 Q Street from the three parties’ names to P Pty Ltd I reject her argument for the following.

  7. Three people signed that document: on its face, the wife, husband and Mr N Sommer.  The witness to that signing, Mr N Sommer, filed an affidavit in which he said he witnessed the parties signing the document.  He was not cross-examined nor taken to task by the wife.  I can only assume the wife maintains the fiction she had not signed the document in face of this evidence which she did not challenge as part of her campaign to besmirch Mr N Sommer.  Yet, without Mr N Sommer continuing to do the right thing by her, the Suburb D properties may not exist. 

The wife’s unfounded allegations against the husband commencing paragraph 6 of her affidavit:

“It is my understanding that Mr Sommer currently lives in a penthouse… [in] Suburb D.”

  1. That the husband moved into the penthouse in December 2018. 

  2. These assertions are misleading. The husband lives in an apartment complex, not a penthouse.  The mother’s belief, she said, was based upon text messages or SMS messages the father had sent the older children.  When these text messages were called for, her answer was the children had deleted them.

  3. That the husband had an interest in the company RR Limited which employs him and that he is a director of the company.

  4. The wife’s tendered ASIC search attached to her affidavit at page 157 of the annexures indicated he had no shareholding and no interest in that business.

  5. That the husband has used the company of RR Limited, which he is a director, to hide his true earnings.  That was not established to my satisfaction in these proceedings and, indeed, the Child Support Agency decision, wherein they accepted the wife’s allegations that the husband owned a boat and was living a lavish lifestyle which were based on her falsehoods.  Thus those findings do not assist the wife in this case.

  6. That the husband owned a boat worth $110,000.  This was also a lie for the following reasons.

  7. In relation to this boat, a Mr Y owns the premises where the social media shot of an expensive boat was taken.  The wife provided this photograph to the Agency to support her allegation that the boat photographed was the husband’s boat.

  8. Mr Y filed an affidavit on 23 November 2020 in relation to the boat and says from paragraph 6:

    6. I recall that this photograph was taken around Christmas 2019.

    7. The photograph is taken outside the TT Cafe.

    8. On the day that the photograph was taken, I borrowed the motor vehicle that appears to be towing the boat from Mr VV. Mr VV’s vehicle had a tow bar and was a sturdy vehicle to tow the weight of the boat.

    9. On the day that the photograph was taken, I borrowed the boat that appears in the photograph from my friend, Mr WW.

    10. I recall a few of my friends and employees were taking photographs of the boat on that day.

    11. To the best of my knowledge, Mr Sommer does not own the boat in the photograph.

  9. He was not cross-examined by the wife and it is clear the husband does not own the boat.

  10. The wife is not to be believed and I will give the husband and Mr N Sommer permission to provide this judgment to any person in authority if the wife makes any allegations of fraud, failure to disclose or that parties own assets they do not own in the future.

  11. The husband says that due to the cost of these proceedings, he is unlikely to ever own a home again.[2] This is a travesty.

    [2] Affidavit of the Husband filed 17 November 2020 paragraph 96.

  12. A significant proportion of the costs arising were as a result of the wife continuing to maintain erroneous and misleading positions concerning Mr N Sommer’s conduct, the husband’s conduct and how the properties were held beneficially as between the three parties.  The wife continued to maintain her erroneous and false position of Mr N Sommer and the husband’s fraudulent and deceptive conduct when the evidence is overwhelmingly that this is not correct and, at all times, her interest in these properties has been protected by Mr N Sommer and supported by her husband.

  13. The wife’s answers under cross-examination were in the main an attempt by her to maintain her erroneous position vis-à-vis Mr N Sommer and her husband in their financial dealings.  However there are four matters which I accept are correct from the wife’s evidence.

  14. The first is that the husband does not seem to understand that being able to borrow $30,000 from your employer, as the husband has been able to do to pay his legal fees, is a benefit and yet he would not admit this.

  15. Secondly, I accept that in late 2014 and 2015, when the Deed of Novation was signed to change the purchaser on the contract to P Pty Ltd from the parties’ names, there were discussions with the husband, his brother and the accountant on this important issue in the absence of the wife and these discussions and outcomes should have been relayed to the wife fulsomely and they were not.

  16. The wife cross-examined the accountant, Mr FF, however he stood firm and his oral evidence was consistent with his affidavit evidence, namely that these matters were discussed between he and the brothers and he believed they were to be relayed to the wife by her husband, a perfectly reasonable assumption to make.  All agree that the wife was unwell at this time and could not make the meeting.

  17. Thirdly, I accept the wife was not well at that time, believing she had a brain tumour.  I accept she had a mass in her brain, and was suffering headaches.  Additionally, she had three children to care for and her medical condition was also flaring up.  Her husband should have been more fulsome with her in his explanation of what was changing in relation to who was to own the 2 Q Street and why this was to occur.  However, this was a family venture, not a business deal, and the parties apparently trusted each other at that time.

  18. Mr N Sommer was perfectly entitled to rely upon his brother to tell his former wife what changes to the title to the property were being made and why, and that it made no difference to their entitlement to the property.

  19. Fourthly, the husband has not paid regular child support and has been in arrears frequently.  He was in arrears of child support in the sum of $12,466.91 as at the date of the hearing.  I will ensure by order that any arrears of child support he has as at the date of delivery of this judgment are to be deducted from his entitlement to property and paid to the Child Support Agency for on-payment to the wife. 

  20. The wife admitted that the reason the legal title to the 1 Q Street was originally placed as to 90 per cent to Mr N Sommer and five per cent to each of them was that Mr N Sommer was to live in the property.  When it came time to ultimately develop the property, there would be minimal capital gains tax to be paid on any sale by Mr N Sommer, the husband or wife.  Their plan was to buy three lots ultimately and develop those three lots into one lot for the construction of units. Thus it is clear the wife was involved in conversations about why and how the properties were to be purchased.

  21. For all these reasons I do not accept that the wife did not know the reasons why the properties were purchased as they were and why ownership of the 2 Q Street was transferred to the company prior to settlement or that her signature was forged in any way by any party.

  22. The case of Mr N Sommer and the husband, that Mr N Sommer and his company owned 50 per cent of the properties and the husband and wife the remaining 50 per cent in equal shares has clearly been made out on the evidence.

The wife’s further allegations against Mr N Sommer of improper behaviour as follows

  1. The wife alleged that Mr N Sommer, “seeks an order to receive funds, being moneys held in trust for the parties from the sale of Suburb B property of $151,911.”  Mr N Sommer has sought no such order.

  2. At paragraph 291 of her affidavit, that:

    On 30 March 2019, orders were made for Mr N Sommer to receive a disbursement of $50,000 from the proceeds of the sale of Suburb B property, which he had no interest in.

  3. That the order was made because of disbursements Mr N Sommer had made in respect of that property prior to its sale to maximise its sale price.

  4. The wife accepted the schedule attached to Mr N Sommer’s affidavit and marked Second Respondent’s exhibit 1, being a spreadsheet reconciliation of receipts, expenses paid, moneys owed since the parties separated in September 2015 and from May 2016 when the husband and wife ceased to pay any outgoings at all in respect of the Suburb D properties including the mortgage.  The husband also accepted the schedule.

  5. However, although she accepted the expenses paid in her oral evidence she said she “doubted that Mr N Sommer was paying them as they were paid by BB Brokers.”

  6. BB Brokers is the business name Mr N Sommer uses as a vehicle to earn his income and it is clear he is the only person who provides income to that business and thus he paid the expenses.  This was a disingenuous argument by the wife.

  7. At paragraph 298 of her affidavit, that Mr N Sommer “unilaterally placed three of the four Home-Loans into hardship due to COVID-19 Pandemic” without her knowledge or consent.  On 27 August 2020, the loans were not placed into hardship with the bank.  Mr N Sommer took advantage due to the COVID-19 arrangements of a moratorium on the payment of the interest only on the home loans for that period.  The wife asserted in her affidavit material that this decision would affect her credit rating.  The loans were never placed in hardship, and the email she attached to her affidavit, at “S-47”, did not support her allegation, rather a moratorium on the payment of the interest on the loans. The attached documents are headed “Confirmation of Variation”:

    We’ve agreed to defer your payments on this loan for a period of six months…This means that you’re not required to make any repayments on your loan during that deferral period. However, please note that during this period interest will continue to be charged, and will be added to the outstanding balance of your loan. 

  8. There is nothing in that email from the bank concerning a hardship application.  The wife’s submission was an endeavour by her to mislead the Court and she maintained this position throughout the trial. 

  9. The wife’s assertion that Mr N Sommer unilaterally contacted SS Bank and arranged for the proceeds of sale of the Suburb B property to be paid into the home loan was a lie.  It was a requirement of the bank and had nothing to do with Mr N Sommer other than him reporting this was the requirement of the bank. 

  10. At paragraph 311 of her affidavit, the wife’s assertions that Mr N Sommer unilaterally directed that the loan reduction be paid into one loan only and that Mr N Sommer became heavily involved in the settlement of Suburb B to ensure that the money was transferred into one home loan only[3] is incorrect.  This was a requirement of SS Bank, their mortgagor. The facts are that Mr N Sommer’s involvement was crucial to ensure settlement occurred given the wife’s implacable resistance to this occurring.

    [3] Affidavit of the wife filed 16 October 2020 paragraph 312.

  11. The wife asserts she contacted the SS Bank and was told this reduction would go across both loans, yet the evidence she provided at “S-48” of her annexures to her affidavit do not support her contention and the email is as follows:

    Hi Ms Sommer. 

    Sorry for the delay in sending an email. 

    As discussed during the call, SS Bank may not allow full funds from the sale of MM Street Suburb B… to be retained as other two loans need to be paid to reduce the balance.  Can you please discuss with other customers and send me a proposal email.  If you wish to bring 2 Q Street…to secure against the outstanding loans then, we will need to get the Valuation ordered and authorization of all the customers related to the loan to do so after getting approval from management. 

  12. That email does not say the bank required the reduction to be paid over both loans.

  13. The wife’s assertion at paragraph 314 of her affidavit, that Mr N Sommer's intention in so doing was to put himself in a more “advantageous position for the Family Court proceedings,” is without merit.

  14. At paragraph 335 of her affidavit the wife asserts that “Mr N Sommer fraudulently forged my signature to illegally transfer my title in the 2 Q Street to P Pty Ltd [the company] without my knowledge or consent.”  This is both false and misleading and she had an opportunity to cross examine the person who witnessed the three parties signing the document and she did not.

  15. Further, at the time the Deed of Novation was entered into to effect the purchaser’s name change, the property had not yet been settled, nor did the three parties own the property.  The wife had no title to the property at that time, rather a right to enforce a notice to complete the sale of the property.  Yet the wife maintained this erroneous position throughout the trial.

  16. I accept she was not privy to the discussions between her husband, Mr N Sommer and the accountant and her husband perhaps was not as fulsome as he should have been explaining to her why this was occurring.  She signed the Deed, however.  I reject any assertion that Mr N Sommer or any other party forged her signature to that Deed.

  17. The wife alleged and continued to allege that Mr N Sommer said he had authority to act on the wife’s behalf as a trustee.  Mr N Sommer has never alleged that he has this authority. Rather that he holds on trust, inconsistent with the legal title to these properties, half the value of the properties on behalf of his brother and his brother’s former wife. 

  18. At paragraph 343 of her affidavit, the wife asserted Mr N Sommer tried to remove her access to the home loans.  On no occasion did Mr N Sommer do this.  The wife was always a signatory to the home loans.  Both home loans remained in the three parties' names.

  19. At paragraph 349, the wife asserted that in proceedings before me on 13 March 2019, I had instructed the Second Respondent to seek consent of all parties, and provide the wife with written notice prior to making any significant decision on the Suburb D properties.  No such order was made by me on that date, or at any time.  

  20. At paragraph 353 and in her closing submissions the wife still asserted that as she and her husband had initially paid for the 5 per cent deposit on the purchase of the 1 Q Street, a correct statement, that Mr N Sommer made no contribution to the purchase of this property, nor did he reimburse the wife and husband for his share of the deposit paid on their behalf.  This is incorrect.

  21. The wife’s allegation that Mr N Sommer has failed to provide disclosure as to the sale by him of his Suburb NN property and his disposition of those funds is rejected. He has made appropriate disclosure, the wife simply does not accept that which he has disclosed.

  22. The wife alleged that the tenancy agreement entered into between Mr XX and Mr N Sommer for the rental of the 1 Q Street was not valid and that it was fraudulent.[4]  The wife peddled this story to NCAT, wrote to Mr XX, the tenant, and told him he had entered into a fraudulent lease. Mr N Sommer was then forced to conduct proceedings in NCAT on the wife’s falsehood.  This was most egregious conduct by the wife.  I advised her of this when she came to Court on 13 March 2019, and she withdrew the NCAT proceedings, but the damage had been done.

    [4] Affidavit of the wife filed 16 October 2020 paragraph 365.

  23. The wife’s assertion Mr N Sommer is not receiving proper rent for this property is rejected by me.  He has paid all the outgoings and mortgages on this property since the parties separated, maintained them, made sure they were in good condition, negotiated leases, dealt with all the issues that needed to be dealt with and it is a nonsense he would not maximise a rental for these properties as to do so would be in his best interest as well as he too is bleeding financially from the ordeal of this litigation.

  24. The wife did not agree with the joint valuations that were obtained pursuant to an order for a joint valuation and obtained her own valuation.  A value was subsequently agreed for the purposes of the hearing as to the values of the Suburb D properties.

  25. The wife’s assertion at paragraph 403 of her affidavit that the husband and his brother have failed to provide full and frank disclosure is rejected.  I find it is the wife who has attempted to obfuscate what the real situation financially is between these parties.  The wife is not a witness of truth, and I do not accept her evidence if it is inconsistent with the evidence of the husband and/or his brother.

  26. It is the evidence of Mr N Sommer in relation to the financial dealings and agreements between them that is correct and reliable and the wife’s case is conjecture and a thin tissue of lies.  

The wife’s claims that her brother is still owed $40,000

  1. The husband agrees they were holding money on behalf of the wife’s brother and used that money in part to fund the initial 5 per cent deposit for the purchase of the 1 Q Street.  The husband asserts the parties repaid the wife’s brother when they were refunded their deposit and I accept his evidence for the following. 

  2. Attached to the husband’s affidavit is a series of emails about this very issue between he and the wife.  These are found at page 46 of the husband’s tender bundle.

  3. On 19 November 2015, texts go between the parties:

    Why is ur brother calling me for money you told me he was paid off.  Need to go through everything this weekend I’ve got the vals for the houses.  I will go for the loan next week.

    (As per the original)

    Wife’s response:

    Don’t know why he’s calling [you]. I just rang him. And he said he will call me later.

    Husband:

    Because he wants money why els [sic].  You told me he was paid off what’s going on?  Bring me everything when ever you want to meet up.

    Wife:

    Again don’t know why he called [you].  I will sort with him.

  4. That evidence is the best evidence I have to support the husband’s recollection that the wife led him to believe they did not owe her brother any money.

  5. The further difficulty I have with accepting the wife’s evidence that this money has not been repaid is she is not a witness of truth.

  6. If the wife has failed to pay her brother, it is now a matter for her and I reject her evidence that her brother is owed $40,000 by the husband.

The matrimonial pool, and the agreed balance sheet

  1. The valuers have agreed the 1 Q Street is worth $2,750,000.

  2. The 2 Q Street is worth $1,800,000.

  3. The wife received $100,000 by way of partial property settlement and the husband, $33,000.

  4. The parties have $151,911.49 in a controlled monies account held by York Law.

  1. The $153,751 they paid into the mortgage over one of the Suburb D properties at the settlement of the sale of their matrimonial home has caused some difficulty in how to deal with it.

  2. The wife accepts the schedule of income and expenses prepared by Mr N Sommer that shows what portion of those expenses paid by him are debts of the husband and wife.

  3. He has paid $188,000-odd in the last three years towards the expenses of this property and, as Mr N Sommer asserts that they own half the properties, their debt to him is $94,755.  However, the husband and wife’s reduction of the mortgages on the Suburb D properties of $153,751 must also be taken into account.

  4. Family Law proceedings are not a matter of mere accounting.  Mr N Sommer has single-handedly maintained, conserved and paid for these properties since separation with not only no assistance from the husband and wife, but with significant interference from the wife.  I find had the wife been able to, she would have brought Mr N Sommer to his knees.

  5. Her false allegations to the SS Bank that he had fraudulently dealt with her interest in a property, her proceedings in NCAT, telling Mr XX he had entered into a fraudulent lease, her complaints that he had not provided full and frank disclosure of his initial contribution towards the purchase of the 1 Q Street and continuing are without merit and bespeak of egregious conduct. Mr N Sommer has had to defend himself in his workplace, defend himself and his conduct in NCAT, defend himself in these proceedings, obtain documents from the SS Bank to prove that the wife took $12,000 from his offset account attached to his loans, which the wife initially denied, and took an additional $3,599 from his account which she continues to deny she took when it is clear she did.

  6. Mr N Sommer, in his role of maintaining these properties for the benefit of not only himself but on behalf of the wife and husband, has made a contribution to the ultimate assets in the parties’ matrimonial pool and I will find this is a contribution by the husband to their current asset base.

  7. These are highly relevant factors in my determination of the parties’ entitlement to their property and as between the husband and wife.

  8. I must first determine the entitlement to the properties at Suburb D as between Mr N Sommer and the husband and wife as that will determine the property pool held by the husband and wife. Having done so I can then assess the husband and wife’s entitlement to their property.

The entitlement of Mr N Sommer to the properties at Suburb D

  1. The evidence is clear and overwhelming that Mr N Sommer and his company own 50 per cent of the Suburb D properties and the husband and wife the remainder in equal shares and I will make the declarations Mr N Sommer seeks.

The value of assets as between the husband and wife

  1. As to the 1 Q Street, the value is $2,750,000. The total debt is $1,798,550 giving an equity of $951,450. 50 per cent of that net equity is $475,725.

  2. In relation to the 2 Q Street, that property is valued at $1,800,000 with a debt of $1.2 million giving a net equity of $600,000. 50 per cent of $600,000 is $300,000.

  3. Thus the assets for division as between the husband and wife are as follows:

    a)Net equity in the 1 Q Street of $475,725;

    b)Net equity in the 2 Q Street of $300,000;

    c)Interim property distribution to wife of $100,000;

    d)Interim property distribution to husband of $33,000;

    e)Controlled monies account held by York Law of $151,911.49.

    f)I will not take into account monies in the parties’ bank accounts. That is their money and they been separated for many years. They are not matrimonial assets for division.

    g)I will not have regard to the item listed as jewellery.  The wife says its value is $30,000 the husband $5,000.  I am unclear in whose possession it is and little was made of this at the trial and I will leave those items in the possession of whoever has them.

    h)This is total net assets of $1,060,636.

    i)I note the husband has superannuation of some $50,000 and the wife $96,129 and neither seek superannuation splitting order.

  4. The remaining, extensive debts of the parties are for legal fees, MasterCard loans to brothers’ etcetera and are the parties’ debts and not matrimonial debts.

  5. I will not include superannuation in the matrimonial pool for division.  Neither party seeks a superannuation splitting order.  These are young people.  They have many years before they can access their super.  The wife has currently $96,000 which she has reduced by $20,000 due to hardship in COVID-19 and the husband has $50,000, and I will take these assets into account in my determination.

  6. There are additional matters to be taken into consideration.

  7. The first is that the husband and wife owe Mr N Sommer $94,755 for their share of costs paid by him on their behalf in respect of the properties and $4,400, being costs of mediation and valuation that he paid.  This is a total debt to Mr N Sommer of $99,155.

  8. Additionally, the wife owes Mr N Sommer $15,599 being money she took improperly from his offset accounts attached to the properties. The wife accessed money in the offset account to which Mr N Sommer had sole entitlement.  Mr N Sommer did not agree to her doing this and requested she repay this money.  The wife acknowledged that she was “doing what [she] can to pay the money back.” This was Mr N Sommer’s money and not hers. It is proper this money be reinstated to Mr N Sommer and that the wife be solely responsible for this debt.

  9. The husband owes his brother Mr N Sommer $31,543 which money he used to discharge arrears of child support and other debts and he must solely repay this sum to his brother.

  10. Mr N Sommer owes the parties $153,751 being monies that the SS Bank required the husband and wife to pay into the mortgages when their matrimonial home was sold.

  11. Deducting the monies jointly owed to Mr N Sommer by the parties at paragraph 136 of $99,155 from the monies he owes the parties of $153,751 is a credit to them of $54,596.

  12. Mr N Sommer put forward a somewhat complicated formula that he asserted would do justice and equity between the parties and acknowledged their payment of $153,751 in reduction of one of the mortgages and take into account monies owed by the parties to him.

  13. I will not adopt that formula but will ensure by my orders that Mr N Sommer is repaid monies owing to him as, it is clear, without his efforts in maintaining these properties the parties would not have these assets today.

The contribution-based entitlement of the parties’ to their assets.

  1. It is just and equitable and appropriate having regard to the principles enunciated in Stanford v Stanford (2012) FLC 93-518 and Bevan & Bevan (2014) FLC 93-572, that I embark upon a division of the parties’ property pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”).

  2. Following the well-known principles enunciated in Ferraro & Ferraro (1993) FLC 92-335, Pierce & Pierce (1999) FLC 92-844 and Coghlan & Coghlan (2005) FLC 93-220 I must engage in, being the four stage approach which is to:

    ii)Identify the matrimonial pool and its value;

    iii)Assess the parties’ contribution based entitlement expressed as a percentage for their past contribution to their property both directly of a financial nature, indirectly by energy, effort and/or third party contribution and as parent and homemaker;

    iv)Determine whether there ought to be a further adjustment to either party’s contribution based entitlement for their past contribution having regard to their future needs;

    v)Look back at the orders proposed to be made and determine if they result in a just and equitable division of the parties’ assets.

  3. It was necessary, and to do justice between the parties, to embark upon an assessment of the division of their assets. The orders I propose to make acknowledge each parties’ contribution to their assets during the marriage having regard to the matters under section 79 and 75(2) of the Act.

  4. The wife says she is entitled to 80 per cent of the property pool.  The wife asserts that her contribution-based entitlement in the past, both as to parent and homemaker and financially, was greater than the husband’s and assesses her contribution at 65 per cent and her post-separation at 15 per cent.  I reject the wife’s contention as to her contribution-based entitlement for past contributions for the following reasons.

  5. The husband and wife, as is common, did the very best they could when the children were born to earn income and provide for their family, to maximise their income earning capacity and to care for their family.  I accept the wife was the primary parent and homemaker and the husband the primary income earner. 

  6. The wife’s allegations concerning the husband’s poor financial decisions which made her role as parent and homemaker more difficult is not accepted by me.  These parties entered into financial decisions as a couple and, as in life, some financial decisions succeed, others do not.  The specious arguments the wife maintained in the face of clear evidence that her view was erroneous of the husband living, post-separation, a luxurious lifestyle in a penthouse and had purchased a luxury boat did not assist the wife’s case.

  7. In relation to the husband’s behaviour and conduct towards the wife and children during the marriage it is apparent the husband does have anger issues and both his older children have referred to his anger and poor behaviour at times to the report writer who prepared the Family Report.  I accept that, particularly towards the end of this relationship, there was significant unhappiness and poor behaviour by the husband at times and that his wife and children did suffer on these occasions and at other times from his poor behaviour.  The consequence for the husband has been that he has lost his relationship with his older children at this time.  This may change if time with his younger child progresses well.

  8. The facts are the husband had the superior pre-cohabitation assets to that of the wife.  The wife’s submission that she is entitled to 65 per cent by way of past contributes is rejected by me.  The husband had an equity of some $95,000 in the Suburb GG property when the parties first commenced cohabitation.  Ultimately, it made them a profit of $300,000 to which the wife made a contribution.

  9. The wife’s contribution to the parties’ assets at the commencement of cohabitation was negative in that she had an interest in a property at Suburb HH which, when sold in January 2005, resulted in a deficit the husband asserts of $30,000. The wife does not agree but accepts there was a deficit which was made up by the husband.

  10. In these circumstances, I find the husband’s contribution-based entitlement to be 55 per cent during the relationship and the wife’s 45 per cent. 

  11. Post separation, the wife has had the full-time care of the three children of the marriage and I accept the husband’s behaviour, particularly towards the end of the marriage, would have made the wife’s parenting of the children more difficult than it need to have been.

  12. Secondly, the husband has been deleterious in paying his child support.

  13. However, Mr N Sommer has solely maintained the properties since May 2016 and this has been a significant contribution to the parties’ assets base and that contribution is a contribution made by the husband.

  14. Having regard to all these circumstances I assess the wife’s post-separation contribution for her care of the children and the difficulties experienced by her in irregular and, at times, no child support being paid to be 10 per cent.

  15. I find the husband’s post separation contribution to the parties’ assets being their equity in the Suburb D properties due to his brother’s exertions and efforts is superior to that of the wife and I find that entitlement to be 5 per cent.

  16. This results in an equal contribution by the parties to their assets.

The parties’ future needs

  1. The wife will have need of ongoing maintenance for the children and the husband has been deleterious in the past in paying regular child support.  Having the care of children does impact upon your capacity to earn an income and even though LL will be spending alternate weekends ultimately with his dad and holiday time, the bulk of his care and support will fall to the wife.

  2. In the event the husband is in arrears of child support as at the date of this judgement noting he was in arrears of child support of some $12,000 at the date of the hearing I will order his then child support arrears be deducted from his entitlement.

  3. I accept the wife suffers from a medical condition, that her health has been of concern and that she has struggled to find employment having regard to the age of the youngest child.  The wife does not have the work history the husband has, and she does have a deficit in her capacity to support herself having regard to her health, length of the marriage and age of the youngest child.  The husband has always been in full-time employment and this will continue.

  4. On these facts, I find her contribution-based entitlement in the past should be adjusted by 12.5 per cent to take account of her future needs.

  5. I find the parties’ entitlement to property is 62.5 per cent to the wife and 37.5 per cent to the husband.

  6. I have taken into account the fact that the wife has nearly $100,000 in superannuation, the husband $50,000 and that the wife drew down $20,000 of her superannuation which was accumulated during the marriage in my determination to provide a just and equitable division of the parties’ property.

  7. 62.5 per cent of the parties’ net property of $1,060,636 is $662,898 to the wife and 37.5 per cent is $397,738 to the husband.

Orders

  1. Mr N Sommer seeks I make declarations in relation to the beneficial interest of each of the parties’ to this litigation of the 1 Q Street owned by him as to 90 per cent and the husband and wife as to 10 per cent together with the 2 Q Street held as to 100 per cent by his company, P Pty Ltd.

  2. The evidence was overwhelming that the position Mr N Sommer and his brother adopted regarding the beneficial interest of all parties to the proceedings was correct and the wife’s was incorrect.  The overwhelming evidence supported that Mr N Sommer and/or his company owned 50 per cent in each property and the wife and her husband the remaining 50 per cent in each property equally.

  3. This overwhelming evidence included that the mortgages were payable 50 per cent to Mr N Sommer and his company and 50 per cent to the wife and husband in respect of each property.  The wife agreed with this truth.

  4. Further, that the loan accounts and offset accounts attached to each loan in respect of each property was separated as to 50 per cent between the husband and wife and 50 per cent to Mr N Sommer.

  5. Finally, that when the husband and wife were paying outgoings on the properties they contributed 50 per cent to the outgoings.

  6. The wife’s contention that each of the parties held beneficially one third interest in these properties was a fiction and, properly advised, the wife should have known this argument would never have succeeded.

  7. I will make the declaratory orders sought by Mr N Sommer as follows:

    a)I declare that Mr N Sommer holds 40% of the property at 1 Q Street, Suburb D on trust for the Applicant husband and first respondent wife in equal shares; and

    b)That P Pty Ltd holds of 50% of the property at 2 Q Street, Suburb D on trust for the Applicant husband and First Respondent wife in equal shares.

  8. I will make orders to provide that the husband and wife will transfer their interests in the 1 and 365 properties to Mr N Sommer for a cash payment by him to them taking into account the following factors:

    a)The sum of $15,599 that the wife owes to Mr N Sommer;

    b)The sum of $31,543 that the husband owes to Mr N Sommer;

    c)The sum of $99,155 that the parties owe to Mr N Sommer as at 20 October 2020 together with 50 per cent of all outgoings incurred from 20 October 2020 to the date of settlement of the transfer of the properties to Mr N Sommer, a figure as yet unknown; and

    d)The sum of $153,751.35 owed by Mr N Sommer to the parties.

    e)That a part of the entitlement of the husband and wife is monies standing in the York Lawyers trust account totalling $151,911.49. 

  9. In order to determine the sum to be paid by Mr N Sommer to the husband and wife to buy out their interest in the two properties I have carried out the following calculations:

    a)I found the wife is entitled to $662,898 being 62.5 per cent of the parties’ net matrimonial pool. From this sum must be deducted the following:

    i)$100,000 she received by way of interim property settlement;

    ii)$15,599 she owes Mr N Sommer.

    iii)This is a net figure of $547,299 to the wife

    b)I found the husband to be entitled to $397,738 less:

    i)$33,000 by way of interim property settlement; and

    ii)$31,543 he owes he owes Mr N Sommer.

    iii)This is a net figure of $333,195 to the husband.

    c)The husband and wife owe Mr N Sommer $99,155 for outgoings paid by him on their behalf up to 20 October 2020 and the valuation fees.

    d)Mr N Sommer owes the husband and wife $153,751.35 being monies paid off one of the mortgages at the time of sale of the parties’ matrimonial home.

    e)The difference between the amounts in paragraphs 170(c) and (d) is $54,596 notionally owed by Mr N Sommer to the husband and wife.

    f)The husband and wife are receiving as part of their property settlement cash held in a solicitors account on their behalf and I have determined the wife is entitled to 62.5 per cent and the husband 37.5 per cent of that cash, a sum of $151,911.49.  This is not money that Mr N Sommer must pay them in order to purchase their interest in the properties but is in existence as cash and must therefore be deducted from their entitlement as part of the calculation of what Mr N Sommer is to pay to them in order to have the properties transferred into his name.

    g)62.5 per cent of the sum of $151,911.49 is $94,945 to the wife and 37.5 per cent is $56,966 to the husband.

    h)Reducing the wife’s entitlement to property of $547,299 by $94,945 is a notional payment to her by Mr N Sommer of $452,354.

    i)Reducing the husband’s entitlement to property of $333,195 by $56,966 is a notional payment to him by Mr N Sommer of $276,229.

    j)Mr N Sommer owes the husband and wife notionally $54,596. However the husband and wife must refund him 50 per cent of the outgoings including the mortgage paid by him since 20 October 2020 to the date of the properties being transferred into his name.

    k)For simplicity, I will by order permit Mr N Sommer to deduct from the $54,596 he is to pay to the husband and wife 50 per cent of the outgoings including the mortgage paid by him since 20 October 2020 to the date of the properties being transferred into his name given that at this time the husband and wife’s share of the outgoings  is unknown

    l)Mr N Sommer is then to pay the balance, if any remaining of the $54,596 as to 62.5 per cent to the wife and the remainder to the husband.

    m)Consent orders were entered into between the parties and the Intervener who is the wife’s prior solicitors C Pty Ltd trading as C Lawyers for their unpaid legal fees which are subject to proceedings in the Federal Circuit Court number SYG697/2020.  The parties agreed that the sum of $236,238.81 be paid to the Intervener by the husband or Second and Third Respondents, or a lesser sum if Federal Circuit Court proceedings had been determined by the date of this judgment.

  10. I will make such an order being that Mr N Sommer is to pay these monies to C Lawyers as part of his payment to the wife to be held on trust until the outcome of the Federal Circuit Court proceedings is known.

  1. Additionally, I will provide for a sale of the properties if Mr N Sommer is unable to retain them.

I certify that the preceding one hundred and seventy-two (172) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Henderson delivered on 18 February 2021.

Associate: 

Date: 18 February 2021


Key Legal Topics

Areas of Law

  • Family Law

  • Property Law

  • Equity & Trusts

Legal Concepts

  • Constructive Trust

  • Costs

  • Remedies

  • Res Judicata

  • Standing

  • Statutory Construction

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Cases Citing This Decision

1

Sommer & Sommer [2021] FedCFamC1F 37
Cases Cited

1

Statutory Material Cited

0

Singer v Berghouse [1994] HCA 40