STASIUK & GUILD

[2020] FamCA 810

FAMILY COURT OF AUSTRALIA

STASIUK & GUILD [2020] FamCA 810

FAMILY LAW – PROPERTY – interim application – where the husband sought parenting and property orders including orders for the sale of the former matrimonial home and other of the parties’ properties – where the wife sought payment of $150,000 to be characterised at trial and financial disclosure from the husband – where parties agreed to the sale of the former matrimonial home during the hearing – parenting orders were left to be addressed at trial – where the husband has failed to provide adequate financial disclosure – orders made for sale of property with input from both parties – order made for distribution to the wife and for the husband to comply with his financial disclosure obligations.

Family Law Act 1975 (Cth) s 90B

APPLICANT: Mr Stasiuk

RESPONDENT: Ms Guild

FILE NUMBER: MLC 13949 of 2018

DATE DELIVERED: 25 September 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Hartnett J

HEARING DATE: 1 September 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Dr Ingleby

SOLICITOR FOR THE APPLICANT: Berger Kordos Lawyers

COUNSEL FOR THE RESPONDENT: Mr Sweeney

SOLICITOR FOR THE RESPONDENT: Lander & Rogers

Orders

1. Forthwith following the making of these orders, there be paid out to the wife from the net proceeds of sale of the real property known as and situate at EE Street, Suburb DD in the State of Queensland (‘the EE Street property’), currently held in the trust account in the joint names of the parties as held by the wife’s solicitors, the sum of $150,000. Such sum is to be characterised by the trial judge at final hearing as partial property settlement or lump sum spousal maintenance. There is liberty to the husband to otherwise apply as to the immediate payment out to him of any assessed taxation liability that is presently due and in relation to which he has provided documentary proof to the wife and in the event the parties cannot agree on a release to the husband of such monies.

2. The husband provide to the wife and/or her nominated financial advisors on a monthly basis the following:-

   (a)       all sales records;

   (b)       copies of the business bank accounts;

   (c)       current list of trade creditors;

   (d)       copies of all MYOB records or records from any other accounting program used to operate the business; and

   (e)       copies of all invoices issued to the business including but not limited to invoices from suppliers.

3. In respect of international bank accounts, the husband provide within 14 days of the making of these orders:-

   (a)       details and documents as to the existence of any international bank account/s held by the husband personally or any of the entities and trusts;

   (b)       copies of complete statements referable to any and all international bank account/s held by the husband personally or any of the entities and trusts for the period 1 July 2017 to 25 September 2020;

   (c)       copies of inventories and or summaries of all stock purchases from suppliers for the period 1 July 2017 to 25 September 2020; and

   (d)       copies of all MYOB or any other accounting program used to operate the business for the period 1 January 2018 to 25 September 2020.

4. Each party comply with any reasonable request for disclosure within 14 days of the date of such request.

5. The parties do all acts and things necessary to list the real property known as and situate at 50 CC Street, Suburb DD in the State of Queensland (‘the CC Street property’) in accordance with the following conditions of sale:-

   (a)       the parties shall jointly have the conduct of the sale;

   (b)       the parties shall jointly appoint a real-estate agent to conduct the sale;

   (c)       the method of sale be determined by the recommendations of the selling agent; and

   (d)       the reserve price shall be agreed by the parties and failing agreement the reserve sale price shall be as determined by the selling agent.

6. Upon settlement of the CC Street property, the sale proceeds be applied as follows:-

   (a)       firstly, to pay all costs of the sale, including agent’s fees and commissions;

   (b)       secondly, to discharge the mortgages registered over the CC Street property to the Westpac Bank account numbers …52, …83 and …11; and

   (c)       thirdly, the balance to be deposited into an interest bearing account in the joint names of the parties to be held on trust by the husband’s solicitors pending further orders of the Court or written agreement of the parties.

7. Otherwise all extant applications, including parenting order applications, are adjourned to the trial date of 1 March 2021.

8. The costs of the parties are reserved.

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 Stasiuk & Guild 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 MELBOURNE

FILE NUMBER: MLC 13949 of 2018

Mr Stasiuk

Applicant

And

Ms Guild

Respondent

REASONS FOR JUDGMENT

Preliminary  

1. This matter was before the Court on 1 September 2020 in a judicial duty list by video hearing from the Court via Microsoft Teams. Both parties appeared through their respective counsel by video link from separate locations. The application before the Court was an Application in a Case filed on 14 July 2020 by the husband, being the Applicant to this proceeding but the Respondent to the substantive proceeding (‘the husband’).  That application sought both parenting and property orders. 

2. The wife, being the Respondent to this proceeding but the Applicant to the substantive proceeding (‘the wife’), filed a Response to an Application in a Case on 24 August 2020. The wife sought, amongst other orders, a payment to her of $150,000 from the proceeds of sale of a property known as and situate at EE Street, Suburb DD in the State of Queensland (‘the EE Street property’) with such payment to be characterised at trial. The wife also sought the sale of the former matrimonial home known as and situate at B Street, Suburb J in the State of Victoria (‘the B Street property’).  The wife sought disclosure by the husband.

3. On 1 September 2020, the Court made orders, partly by consent and partly by order of the Court, as follows:-

   THE COURT ORDERS, BY CONSENT, THAT:

   (1) The conciliation conference listed for 2 September 2020 at 9.15am be vacated.

   (2)   By no later than 2 October 2020 or such other date as may be agreed taking into account the stage four lockdown, the parties do all acts and things necessary to list the real property situate at and known as B Street, Suburb J in the State of Victoria more particularly described as the whole of the land comprised in Certificate of Title Volume number … Folio number … (‘the B Street property’) in accordance with the following conditions of sale:-

   (a)  the parties have the joint conduct of the sale;

   (b)  Mr AC from AD Company be appointed to conduct the sale;

   by the Court:-

   (c) the B Street property be sold by an ‘expressions of interest’ campaign with such campaign being concluded by 30 November 2020;

   by consent:-

   (d) in the event that the ‘expressions of interest’ campaign does not result in a sale on the recommendation of the selling agent, then an auction be held on a date nominated by the selling agent at the first available date with a reserve price as agreed, or in the event of a failure to agree, within seven days of the conclusion of the said campaign that reserve price be fixed by the President (or his/her nominee) of the Real Estate Institute of Victoria, taking into account the ‘offers’ contained in the ‘expressions of interest’ campaign;

   (e) in the event that the B Street property is not sold pursuant to the auction in order 2(d) above, it be marketed for sale by private treaty at the reserve price fixed therein unless otherwise agreed;

   (f) the wife make the property available in proper condition for inspections, auctions and all other necessary attendances as recommended by Mr AC; and

   (g) neither party make contact nor communicate with the selling agent except by a joint letter.

   (3) Upon settlement of the B Street property, the sale proceeds be applied as follows:-

   (a) first, to pay all costs of the sale, including agent’s fees and commissions;

   (b) second, to discharge the mortgages over the B Street property to the National Australia Bank, account numbers …68 and …52..52; and

   (c) third, the balance to be placed in the trust account of the lawyer agreed to complete the transfers or conveyance connected with the sale.

   THE COURT ORDERS THAT:

   (4) Upon the execution of a sale contract for the sale of the B Street property, the husband forthwith give notice to the tenants to vacate the property at T Street, Suburb U in the State of Victoria (‘the T Street property’) at the conclusion of the 12 month tenancy lease in January 2021, save in the circumstances where each of the husband and wife agree in writing upon another course of action which does not include the husband’s giving of notice to the tenants as provided for herein, and the wife be permitted sole use of that property pending further order of the court.

   (5) The husband be restrained from granting or entering into any further lease with the tenants of the T Street property or any persons whomsoever unless otherwise agreed in writing with the wife.

   (6) The wife do all acts and things required of her to facilitate the reduction of the mortgage/s secured on the title to the B Street property to an interest only mortgage in the event the husband is able to obtain an interest only mortgage and the husband is required to use his best endeavours to obtain either a further deferral of loan repayments; a change in the loan to an interest only loan; and/or the refinancing of the loan to an interest only loan on a lesser interest rate.

   (7) Until further order, the husband, personally and/or in his capacity as director and shareholder of any of the entities and trusts the subject of these proceedings, be restrained from:-

   (a) borrowing any monies in excess of $5,000 without the consent of the wife, including borrowing monies in the name of any of the entities and trusts or drawing down on any existing loans or lines of credit; and/or

   (b) disposing, selling, gifting, transferring or dealing with any of the assets held by the husband personally or any of the entities or trusts.

   (8) Otherwise, judgment is reserved in respect of the remaining competing applications before the Court this day.

4. These reasons address the remaining orders sought by the parties but not being the totality of the orders sought in each of their Amended Application in a Case and Response. Some of those orders the parties agreed to defer to final hearing. Whilst the parties did not specifically address the matters of production of relevant documents the Court determined that those orders should be made where sought on the basis of the parties’ ongoing disclosure obligations throughout this proceeding.

Material relied upon  

1. The husband relied upon the following material:-

   a)an Amended Application in a Case filed 27 August 2020;   

   b)affidavits affirmed by him on 14 July 2020 and 27 August 2020, including annexures; and

   c)a Further Updated Financial Statement filed 14 July 2020.

2. The wife relied upon the following material:-

   a)a Response to an Application in a Case filed 26 August 2020; 

   b)a Financial Statement sworn 24 August 2020; and

   c)an affidavit sworn 24 August 2020. 

Background

1. The husband was born in 1973 in Country BK and is aged 47 years. He is a self-employed retailer Shopping Centre. He resides in rental accommodation in Suburb J with his girlfriend.

2. The wife was born in 1974 in the United Kingdom and is aged 45 years. The wife is a professional and works for BH Services. She resides with the parties’ children in the former matrimonial home, being the B Street property.

3. There is disagreement about the date of commencement of the parties’ cohabitation. The wife claims cohabitation commenced in 2004 whilst the husband claims it commenced in November 2006 and the parties were engaged in January 2007. The parties were married in 2008.

4. There are two children of the relationship X born in 2009 and now aged 11 years and Y born in 2013 and now aged 7 years (‘the children’). The wife also has a child from a previous relationship, Ms Z born in 1999 and who is aged 20 years. Ms Z resides with the wife and her siblings at the B Street property. Ms Z is a full-time student and is completing a university degree at BL University. In the pursuit of saving unnecessary costs, the parties were content to leave the parenting applications to be a matter determined at trial without the need for any interim hearing.

5. The date of separation is also in dispute. The wife’s evidence is that the parties separated on a final basis on or around 20 May 2018 but that they had periods of separation prior to that time. The husband’s evidence is that separation on a final basis occurred on 10 March 2017.  

6. On 3 December 2018 the wife filed an Initiating Application commencing the proceeding. She sought, in essence, an alteration of the property interests of the parties; for the husband to pay spousal maintenance to the wife on an ongoing basis in an amount determined by the Court; and to be excused from further particularising the final orders sought by her. On 12 December 2018 Registrar George made orders requiring the wife to file and serve an Amended Initiating Application which was to include points of claim in relation to an agreement made by the parties pursuant to s 90B of the Family Law Act 1975 (Cth) (‘the Act’) and otherwise adjourning the proceeding to the judicial duty list on 18 March 2019. The wife filed the Amended Initiating Application on 14 February 2019 wherein she outlined the points of claim. Following the hearing in the judicial duty list, and on 22 March 2019, His Honour Justice Cronin made an order as follows:-

   ALL APPLICATIONS ARE ADJOURNED AND FIXED FOR THE DETERMINATION OF THE THRESHOLD ISSUE RELATING TO THE VALIDITY OF THE DOCUMENT CALLED “PRENUPTIAL AGREEMENT” DATED 7 JUNE 2008 before the Honourable Justice Wilson at 10.00am on 30 May 2019 subject to any part heard case as a two day case.

   (emphasis per original)

7. The matter in fact proceeded on 10 and 11 October 2019 and 9 January 2020 before His Honour Justice Wilson. On 14 May 2020 His Honour made orders setting aside the Binding Financial Agreement (‘the BFA hearing’). The orders made by His Honour were as follows:-

   1.  The agreement styled “prenuptial agreement” made between the applicant and the respondent on 27 June 2008 (also dated on its frontis page 26 June 2008) is set aside.

   2. I dismiss the respondent’s application for orders under ss 90B and 90KA of the Family Law Act.

   3.  I direct that at or before midday on 28 May 2020 the solicitors for the respondent provide an email to my associates informing me whether the respondent wishes any further litigation in this proceeding to be conducted before another judge of this court.

   4. If no such email is provided by the date specified or if the respondent consents to this proceeding remaining as a proceeding pending in my docket, then the further hearing of this proceeding is adjourned to 10am on 1 June 2020 for directions.

   5. If the respondent objects to my hearing of this proceeding further, then this proceeding is referred to the docketed registrar for ongoing case management.

The hearing on 1 September 2020

1. It is the wife’s evidence that following the BFA hearing the husband acted deliberately in order to prejudice her ability to recover her entitlements. The wife sets out in her affidavit sworn 24 August 2020 a number of instances which she says demonstrate such behaviour and which are outlined hereafter. The husband denies this allegation and asserts that he “needed to take action to ensure…[he could] meet [his] financial obligations”.[1]

Sale of properties before the commencement of the BFA hearing but after the initiating of the wife’s application of 3 December 2018

[1] Affidavit of Mr Stasiuk affirmed 27 August 2020, [38].

1. In 2019 the husband sold the real property known as and situate at FF Street, Suburb DD in the State of Queensland (‘the FF Street property’) for $1,370,000 and received net sale proceeds of $418,382.24.[2] The wife became aware of the sale of the FF Street property after reading the husband’s affidavit filed 26 April 2019.[3] The net sale proceeds were deposited into the account of the husband’s business, BD Holdings Pty Ltd. The proceeds were applied to “reduce various loans, pay credit card debts, clear the business overdraft and meet other business expenses”.[4] It is the wife’s evidence there was no proper explanation as to how those net sale proceeds were applied.[5]

   [2] Affidavit of Mr Stasiuk affirmed 14 July 2020, [50].

   [3] Affidavit of Ms Guild sworn 24 August 2020, [43(a)].

   [4] Affidavit of Mr Stasiuk affirmed 14 July 2020, [50].

   [5] Affidavit of Ms Guild sworn 24 August 2020, [43(a)].

2. In August 2019 the wife received the contract of sale for the real property known as and situate at CC Street, Suburb DD in the State of Queensland (‘the 30 CC Street property’).[6] The receipt of the contract of sale was the first time the wife became aware of the husband’s action in selling the 30 CC Street property. The wife became aware that settlement was scheduled to occur only three days later and in August 2019.[7] The 30 CC Street property was sold for $1,480,000.[8] The net proceeds of sale were $432,604.66.[9] The husband deposed that the proceeds of sale had been applied towards the loan encumbering the real property known as and situate at T Street, Suburb UT Street in the State of Victoria (‘the T Street property’).

   [6] Affidavit of Ms Guild sworn 24 August 2020, [43(c)].

   [7] Affidavit of Ms Guild sworn 24 August 2020, [43(c)].

   [8] Affidavit of Mr Stasiuk affirmed 14 July 2020, [53].

   [9] Affidavit of Mr Stasiuk affirmed 14 July 2020, [53].

3. It was the husband’s evidence that both the FF Street and 30 CC Street properties were sold “to meet the shortfall between income and loan repayments, family expenses, school fees and business expenses”.[10]

   [10] Affidavit of Mr Stasiuk affirmed 14 July 2020, [49].

Sale of property after the orders made by Wilson J on 14 May 2020

1. On 10 August 2020 the wife became aware (after being informed by her mother) that the husband had listed the EE Street property and the real property known as and situate at 50 CC Street, Suburb DD in the State of Queensland (‘the 50 CC Street property’) for sale. The wife submits in respect of the 50 CC Street property, that the husband appointed agents to sell the parties’ real property without her input, and that the husband was endeavouring to enter into a contract to sell the real property without proper marketing and through the agency of a real estate agent she did not trust. The wife’s evidence is that the husband gave instructions to the selling agents to sell both properties on terms that were essentially a “fire sale”. This is denied by the husband.[11] The 50 CC Street property was able to be removed from the market prior to being sold however the EE Street property had already been sold by the time the wife became aware of the listing (being some 48 hours following the listing).[12] The EE Street property was due to settle before the final hearing of this matter and the wife became concerned that the sale proceeds would not be held in a controlled monies account on the parties’ behalf.[13]

   [11] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(b)]

   [12] Affidavit of Ms Guild sworn 24 August 2020, [12(b)].

   [13] Affidavit of Ms Guild sworn 24 August 2020, [12(b)].

1. The monies were ultimately held in a controlled monies account and the wife seeks a distribution to her of some of those funds. The husband seeks such monies be applied to payment of and/or reduction of his debts. Both parties agree that the 50 CC Street property should be placed on the market for sale and the Court will make orders such that the parties have joint control over the terms of sale and the reserve price.

Borrowings and Withdrawals

1. On or about 9 June 2020 the husband borrowed $100,000 from the Westpac Bank without the wife’s knowledge or consent (and after the wife had sought undertakings through the husband’s solicitor that the husband not do so).[14] The husband’s evidence is that the loan was an “easy access relief [loan]” set up during the COVID-19 pandemic for which his business qualified.[15] He stated the funds were applied towards “rent for the store in the sum of $80,000 and to meet outstanding invoices of suppliers in the sum of $20,000”.[16]

   [14] Affidavit of Ms Guild sworn 24 August 2020, [12(c)].

   [15] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(c)]

   [16] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(c)].

2. In July 2020 the husband withdrew $215,000 from a facility held in CB Lenders without the wife’s knowledge and consent (and after the wife had sought undertakings through the husband’s solicitor that the husband not do so).[17] That further loan was secured against property that is the subject of the current proceeding.[18] According to the husband, the funds were applied as follows:-[19]

   [17] Affidavit of Ms Guild sworn 24 August 2020, [12(d)].

   [18] Affidavit of Ms Guild sworn 24 August 2020, [12(d)].

   [19] Affidavit of Mr Stasiuk affirmed 27 August 2020, [25]-[26].

   a)Westpac credit card ending ...51 in the amount of $98,920.70;

   b)private school fees in the amount of $30,000;

   c)ATO (BAS instalment) in the amount of $3,045;

   d)ANZ credit card in the amount of $8,700;

   e)plumbing drainage for the B Street property in the amount of $3,272;

   f)work cover insurance in the amount of $337.66;

   g)NAB loan account no. ending ...52 (interest payments) in the amount of $5,000;

   h)Westpac credit card account number ending …51 in the amount of $60,000;

   i)stock suppliers in the amount of $32,770.86;

   j)accounting fees in the amount of $30,904.50; and

   k)land tax for the 50 CC Street property in the amount of $11,369.59.

Various prepayments

1. The wife’s evidence is that the husband made a number of prepayments in respect of his legal costs, the children’s school fees and the rent for his business premises.

2. The husband’s solicitors currently hold approximately $10,620 in trust on his behalf.[20] On around 11 June 2019 the husband had funds of approximately $75,000 to his credit in his solicitors’ trust account,[21] and the wife’s evidence is that such funds were paid in part, from the husband’s credit card and through drawdowns from various loans. She claims the husband paid his solicitors approximately $319,136 by way of credit card, $39,050 of which was paid, using the husband’s personal Westpac Mastercard, for the period 11 February 2020 to 19 June 2020.[22] These funds were paid at a time when the husband’s child support arrears were accruing.[23] The wife asserts the prepayment of such funds enabled the husband’s solicitors to conduct the litigation post the BFA hearing and enabled the husband’s solicitors to send her solicitors up to six letters in less than 24 hours, all of which sought a response to a single issue.[24] The wife’s evidence is that such conduct was clearly intended to increase the costs that she incurred in pursuing relief.[25] The husband denies prepaying his legal costs.[26]

   [20] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(e)].

   [21] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(e)].

   [22]Affidavit of Ms Guild sworn 24 August 2020, [53(e)].

   [23] Affidavit of Ms Guild sworn 24 August 2020, [53(e)].

   [24] Affidavit of Ms Guild sworn 24 August 2020, [53(e)].

   [25] Affidavit of Ms Guild sworn 24 August 2020, [12(e)].

   [26] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(e)].

3. Additionally, the husband prepaid school fees, in excess of $30,000, for the parties’ children, despite (as according to the wife) there being a moratorium on fees instituted by the school,[27] and the husband alleging his financial circumstances were “parlous”.[28] The husband denied the existence of any moratorium and stated he had in fact received a tax invoice from the children’s school on 21 July 2020.[29]

   [27] Affidavit of Ms Guild sworn 24 August 2020, [53(f)].

   [28] Affidavit of Ms Guild sworn 24 August 2020, [12(f)].

   [29] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(g)].

4. Due to the current COVID-19 pandemic the husband has been negotiating the rent payable for his business premises with the commercial landlord. The wife states the husband has prepaid approximately $70,000 in rental payments for his business premises from borrowed funds without consultation with her and after she sought an undertaking that he not do so. The wife’s evidence is that this was despite there being an agreement in place where the landlord had offered a 50 percent waiver for the rent and a rental deferment of 50 percent until September 2020.[30] In his affidavit evidence the husband stated:-

   In the discussions with the landlord that have occurred so far, the landlord has compared the months sales to the corresponding month in 2019, to determine any reduction in rent. For example, if there has been a 40% decrease in sales then you are required to pay 60% of the usual monthly rent and half of that remaining balance is deferred. For example, if there has been a 40% decrease in the sales for the month of July then 60% of the monthly rental is payable. Of the remaining 40% of the unpaid rent, half of that is waived and the other half is deferred to be paid by the end of the rental term. My current rental is paid up until 1 November 2020, as I obtained the $100,000 COVID relief loan from Westpac and these funds could only be applied to business related expenses. If I am unable to pay rent then I will be evicted from the store which means I have no business. There has already been well publicised lock outs of tenants in major shopping centres in Victoria. The payment of this rent has allowed me a very small buffer during the stage 4 restrictions while my store is closed and will enable me to re-open the shop without the additional pressure of meeting rental repayments once the restrictions end. When the store is re-opened it will take some time for sales to return to a level (if at all) that will allow me to meet the expenses of the business including the rent.[31]

   [30] Affidavit of Ms Guild sworn 24 August 2020, [12(g)].

   [31] Affidavit of Mr Stasiuk affirmed 27 August 2020, [45(b)].

5. The amount of $38,000 has been paid by the husband to his accountant, Mr AB, who gave evidence for the husband in the BFA hearing.[32] The husband does not deny paying Mr AB and states the payments, many of which were late, have been made for work completed.[33]

   [32] Affidavit of Ms Guild sworn 24 August 2020, [12(h)].

   [33] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(i)].

Child Support

1. The wife submits the husband allowed substantial child support arrears to accrue in excess of $13,500 despite making substantial payments to his solicitors.[34] She asserts the husband has paid his solicitors more than $118,000 by way of credit card within the last 12 months.[35] The husband challenges the arrears quantum which he claims have accrued because of a re-assessment done by the Child Support Agency where the Child Support Agency used the income listed in the husband’s 2019 taxation return.[36] The husband states his taxable income for the 2019 financial year “was inflated”[37] due to the sale of the FF Street property.

   [34] Affidavit of Ms Guild sworn 24 August 2020, [12(a)].

   [35] Affidavit of Ms Guild sworn 24 August 2020, [12(a)]

   [36] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(a)]

   [37] Affidavit of Mr Stasiuk affirmed 27 August 2020, [39(a)].

The Husband’s Business

1. The business the husband operates is held in the name of BD Holdings Pty Ltd, as trustee for the BD Holdings Trust trading as BG Business (‘the business’). The husband has operated this business for 22 years.

2. The net profits of the business (before tax) are, on the husband’s evidence, as follows:-[38]

   a)30 June 2014 - $691,310;

   b)30 June 2015 - $550,930;

   c)30 June 2016 - $418,637;

   d)30 June 2017 - $291,589;

   e)30 June 2018 - $304,757;

   f)30 June 2019 - $236,914;

   g)30 June 2020 - $244,913.

   [38] Affidavit of Mr Stasiuk affirmed 14 July 2020, [11].

3. With respect to the financial year ending 30 June 2020, the husband’s evidence is that draft figures from the income statement for the business show that the sales in that period are $875,142 compared to sales of $1,138,945 for the financial year ending 30 June 2019.[39] The husband’s evidence is that this correlates with the reduction in the purchase of stock of $277,262 in the financial year ending 30 June 2020, compared to the previous financial year of stock purchased in the sum of $518,807.[40]

   [39] Affidavit of Mr Stasiuk affirmed 14 July 2020, [12].

   [40] Affidavit of Mr Stasiuk affirmed 14 July 2020, [12].

4. The business’ net profits for the financial year ending 30 June 2020 (before tax) are $244,913. A total of $43,000 has been received from government grants and subsidies.[41] The net profit is an average of $20,409 of business income per month.[42] The husband submits that given the increased competition in the retail industry and the impacts of the COVID-19 pandemic, the business’ sales will be significantly impacted and the business will not be able to generate the net profits received in the financial years ended 30 June 2014 to 2016 or even sustain the net profits received in the financial years ended 30 June 2019 and 2020.[43] It is clear on the evidence, however, that the husband has had more funds available to him in the last financial year than in the preceding one, with which to meet his longstanding financial obligations. Additionally, he has been able to defer, in whole or in part, his repayment obligations and/or obtain a reduction in the amount of those payments.

   [41] Affidavit of Mr Stasiuk affirmed 27 August 2020, [20].

   [42]Affidavit of Mr Stasiuk affirmed 14 July 2020, [13].

   [43]Affidavit of Mr Stasiuk affirmed 27 August 2020, [16].

Assets of the Parties

1. The value of the asset pool available for division between the parties is unclear. The husband has remaining, through various corporate structures, interests in the following real properties:-

   a)the T Street property;

   b)20 V Street, Suburb WV Street in the State of Victoria (‘the V Street property’);

   c)the 50 CC Street property; and

   d)the B Street property.

2. Relevant financial information pertaining to the abovementioned properties, on the evidence of the husband, unsupported by documentary evidence, is as follows:[44]

   [44] Affidavit of Mr Stasiuk affirmed 14 July 2020, [24].

Property	Rental Income Per/Month	Loan Repayment Per/Month	Approx. costs (outgoings) per/month (including rates, maintenance, agents  commission and land tax)	Deficit (Rent – (loan repayment + costs))
B Street, Suburb J in the State of Victoria	Nil	($24,579)	($791)	-$24,579
T Street, Suburb UT Street in the State of Victoria	$3,167	($8,563)	($1,216)	-$6,612
20 V Street Suburb W in the State of Victoria	$2,603	($4,607)	($1,216)	-$3,220
50 CC Street, Suburb DD in the State of Queensland	$3,648 ($912 per week)	($10,688)	($2,000)	-$9,040
Total	$9,418	(E$48,437)	(E$5,223)	-$43,451

1. I sound a note of caution in respect of the accuracy of the above loan repayment per month figures in particular. That is, they are provided by the husband with no usual supporting evidentiary material that is necessary in an application of this type and where the husband’s evidence is challenged. That material is, relevantly, bank statements and documents including all correspondence between the husband and the bank/s and any agreements entered into by the husband with the bank/s. When looking to current interest rates and the sums borrowed, the figures do not appear accurate and the Court cannot proceed to make findings on this evidence alone.

2. The wife asserts that the parties and the Court will be better able to determine the value of the assets of the parties after the sale of the B Street property. The parties have been informed by the selling agent that the B Street property could be sold for an amount between $5,600,000 and $7,500,000.[45] In these circumstances, the wife does not agree to the sale of further properties, as she submits that it is sufficient to sell the B Street property to dissipate the financial strain on the parties. The husband submits that the sale of the B Street property will assist his financial position, however that it will not alleviate the strain on his finances, given that his business income will not improve sufficiently to enable him to make the necessary repayments in respect of the properties held by him.[46] The husband wishes to sell the 50 CC Street property and indeed was in the process of doing so before this proceeding (see paragraph 18 above). The wife is not opposed to the sale of this property but wishes to make proper enquiries before marketing the property and determining an appropriate reserve sale price. The Court will make orders to ensure that this property is placed on the market for sale with input from each of the parties, and thus, after settlement of any sale, the ongoing liability of the husband is then ended. Those net sale proceeds will be held in trust awaiting the final determination of this proceeding unless otherwise agreed by the parties. The husband receives an average business income (before tax) of $20,409 per month, and additionally receives salary from the business in the amount of $2,892 (net) per month being a total amount of around $23,301 per month.[47] If all his monthly expenses claimed were accurate, and the B Street property does not sell, then clearly the financial position of the parties in the retention of their remaining ownership of property is not sustainable. That is a matter to be determined at trial and will involve the Court’s consideration of the sale of the V Street property. The sale of that property in the current market, with the stage four COVID-19 restrictions placed on real estate agents in Victoria, together with the absence of sufficient documentary evidence before the Court on the husband’s case, makes any decision to sell this property at this time, premature.

   [45]Affidavit of Ms Guild sworn 24 August 2020, [50].

   [46] Affidavit of Mr Stasiuk affirmed 14 July 2020, [26].

   [47] Affidavit of Mr Stasiuk affirmed 14 July 2020, [78].

3. The Court is further of this view when looking to the evidence provided by the husband in respect of the loan owing to him by a Mr AF. The husband claims to be financially stressed. Yet in May of this year he did not see the necessity to call up a loan owing to him by Mr AF. Counsel for the wife submitted that in May 2020, the husband informed the Court that “it was only $42,000” or words to that effect. The husband’s present evidence is that he has now sought repayment of that loan but that Mr AF has refused to make any payment/s, Mr AF claiming he has no money. The veracity of this evidence will remain a matter for trial.

Conclusion

1. The parties have agreed they will attend a private mediation before trial and that no order in respect of same was necessary.

2. The injunctions sought and obtained by the wife in the orders made on 1 September 2020 do not prevent the husband from carrying on his business but rather ensure that the husband not continue to sell properties without notice to the wife or her solicitors or draw on loan facilities which would have the effect of depleting the value of the assets available amongst other things.

3. The wife shall obtain a distribution of $150,000 to enable her to fund the ongoing litigation and/or fund her living expenses and/or fund the living expenses of the children in circumstances where the husband may continue to have arrears of child support and/or arrears of spousal maintenance payments. Due to the COVID-19 pandemic the wife has been home-schooling the parties’ children. She attends to the children’s needs, supervises their home learning and provides them with assistance throughout the day. She also attends to the preparation of the children’s dinner and other nightly tasks before she commences work from home at approximately 6.00pm. The wife is employed on a casual basis at BH Services and her taxable income for the financial year ended 30 June 2020 year was approximately $39,000 per annum.[48] She has significant needs for her support which are not met out of her income nor by the husband save for those housing expenses he meets for her and the children. It is the wife’s evidence that, at the commencement of the pandemic, the husband’s solicitors wrote to her solicitors “threatening that [the husband] would reduce all payments to [her], including disconnecting the utilities to the home and would otherwise reduce his periodic child support payments...”[49] As a result, and due to the heavy number of phone calls being received by BH Services from individuals seeking assistance during the pandemic, the wife took whatever additional shifts she could in order to derive income. These shifts would conclude between midnight and 1.00am.[50] It is the wife’s evidence that after several weeks of this routine she could no longer sustain such late hours and requested that her shifts conclude earlier around 10.30pm.[51]

   [48] Affidavit of Ms Guild sworn 24 August 2020, [47].

   [49] Affidavit of Ms Guild sworn 24 August 2020,[48].

   [50] Affidavit of Ms Guild sworn 24 August 2020, [48].

   [51] Affidavit of Ms Guild sworn 24 August 2020, [48].

4. The wife does not have the capacity to meet the legal costs associated with the ongoing litigation without incurring substantial debt. Her legal fees to date have been funded by a lump sum payment made to her pursuant to the orders made 18 March 2020. She has expended the entirety of those funds and her parents have paid the sum of approximately $31,000 towards disbursements on her behalf. She will be required to repay that amount once the proceeding has concluded.[52]

   [52] Affidavit of Ms Guild sworn 24 August 2020, [49].

5. The Court is satisfied that the distribution of $150,000 which shall be a payment of partial property settlement and/or spousal maintenance does not exceed the amount of any ultimate entitlement the wife may receive, in particular given that  at commencement of the relationship the wife owned two properties. Additionally, the wife has the primary care of the children and does not have the same income-earning capacity as the husband.

6. The husband has failed to provide adequate disclosure to the wife as is required of him in this proceeding. The wife seeks a fortnightly provision to her of relevant business documents so that she is better placed to make an assessment of the parties’ asset pool. The Court is of the view that such documents should be provided but that provision on a monthly basis will be sufficient and not unduly onerous on the husband. Other orders in respect of disclosure as sought by the wife have arisen in the following circumstances. On 29 May 2019, the wife received a spousal maintenance payment from the husband pursuant to Court orders. That payment appeared to be from a bank account which the wife was unaware of. The wife subsequently contacted BJ Bank on 20 July 2020 to query where the funds were paid from. It is the wife’s evidence that she was informed by BJ Bank that the funds “appeared to be transferred from an international bank account in the name of [the husband]”.[53] On 12 August 2020 the wife’s solicitors requested disclosure of any international bank accounts which the husband has an interest in. On 18 August 2020, the husband’s solicitors responded stating that the husband did not hold any international bank accounts, although he previously did between 2007 and 2011.[54] This matter needs to be resolved and will be assisted by the provision to the wife by the husband of the relevant evidence.

   [53] Affidavit of Ms Guild sworn 24 August 2020, [53(g)].

   [54] Affidavit of Ms Guild sworn 24 August 2020, [53(g)].

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hartnett delivered on 25 September 2020.

Associate:

Date:  25 September 2020