Stavri & Stavri
[2021] FedCFamC1F 221
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Stavri & Stavri [2021] FedCFamC1F 221
File number(s): ADC 1721 of 2018 Judgment of: BERMAN J Date of judgment: 24 November 2021 Catchwords: FAMILY LAW – PROPERTY – Declaration of rights – Equitable claim – Where the applicant seeks a declaration that a sum of money is an asset of the marriage – Where the second to fifth respondents oppose the declaration – Whether the applicant and first respondent are the beneficial owners of property held by the third parties – Where there are allegations the first respondent misappropriated funds from an account the second to fifth respondents have an interest in – Where it is alleged a sum of money was paid from the net proceeds of sale of matrimonial property to the account as repayment of the misappropriated funds – Where the wife relied upon representations of the first respondent in relation to the sum of money to her detriment – Where unconscionable conduct is established – Where a declaration is made.
FAMILY LAW – PROPERTY SETTLEMENT – Just and equitable – Contributions – Section 75(2) factors – Where the parties had little assets of value at the commencement of their marriage – Where the pool is modest – But for the first respondent’s theft of money the contributions of the parties are equal – Where there is a slight adjustment for contributions – Consideration of the parties’ current circumstances – Where the Court is unable to understand the current financial circumstances of the first respondent – Where the majority of the applicant’s legal fees incurred arise from the conduct of the first respondent – Where there is an adjustment in the applicant’s favour – Orders.
FAMILY LAW – PRACTICE AND PROCEDURE – Where the first respondent admitted to the theft of money – Where the papers should be referred to the South Australian Director of Public Prosecutions for consideration of whether there should be an investigation into whether a criminal offence has been committed.
Legislation: Family Law Act 1975 (Cth) ss 4(1), 78, 79(1), 79(2), 79(4), 79(5), 90AE(2), 113
Law and Justice Legislation Amendment Act 1988 (Cth) s 39(1)
Cases cited: Bevan & Bevan (2013) FLC 93-545
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Hickey & Hickey (2003) FLC 93-143
Mallet v Mallet (1984) 156 CLR 605
Riches & Hogben [1985] 2 Qd R 292
Sidhu v Van Dyke (2014) 251 CLR 505
Stanfordv Stanford (2012) 247 CLR 108
Watson & Ling (2013) FLC 93-527
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Division: Division 1 First Instance Number of paragraphs: 248 Date of hearing: 16 – 18 November 2020 and 15 – 17 March 2021 Place: Adelaide Counsel for the Applicant: Mr Scragg Solicitor for the Applicant: Peter Scragg & Associates Counsel for the First Respondent: The First Respondent appeared in person Counsel for the Second to Fifth Respondents: Mr McGinn Solicitor for the Second to Fifth Respondents: Tolis & Co Lawyers ORDERS
ADC 1721 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS STAVRI
Applicant
AND: MR STAVRI
First Respondent
B PTY LTD
Second RespondentMS C STAVRI (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
24 NOVEMBER 2021
THE COURT ORDERS:
1.That there be a declaration that the second to fifth respondents hold the sum of THREE HUNDRED AND TWENTY FIVE THOUSAND DOLLARS ($325,000) for and on behalf of the applicant and first respondent.
2.That in full and final settlement of any claim that either party may have against the other for settlement of property or alteration of interests in property pursuant to Pt VIII of the Family Law Act 1975 (Cth) (“the Act”):
(a)That within thirty (30) days of this order the second to fifth respondents do pay to the trust account of Peter Scragg & Associates for and on behalf of the applicant the sum of TWO HUNDRED AND SIXTY THREE THOUSAND FOUR HUNDRED AND FORTY SEVEN DOLLARS ($263,447) (“the said settlement sum”);
(b)That in default of the payment of the said settlement sum either in whole or in part and should the default continue for more than thirty (30) days from the date of the prescribed payment then the second to fifth respondents shall do all things and sign such documents as may be necessary to cause B Pty Ltd to cause the property situate at Q Street, Suburb R (“the Q Street property”) to be sold by such manner, at such price, and subject to such conditions as may be agreed between the parties and in the absence of agreement as may be determined by this Honourable Court upon the application of either party.
3.That from the net proceeds of sale of the Q Street property the applicant shall receive so much of the said settlement sum as shall remain outstanding together with default interest as calculated at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) to be calculated as and from the date of default until the date of payment to the applicant.
4.That the second to fifth respondents do pay the sum of SIXTY ONE THOUSAND FIVE HUNDRED AND FIFTY TWO DOLLARS ($61,552) to the first respondent.
5.That the applicant shall retain to the exclusion of the first respondent:
(a)her separate savings including funds in various accounts;
(b)her motor vehicle;
(c)her furniture and household contents;
(d)her clothing and jewellery; and
(e)any real and/or personal property or financial resource in her name or possession otherwise specified herein.
6.That the first respondent shall retain to the exclusion of the applicant:
(a)his separate savings including funds in various accounts;
(b)his furniture and household contents;
(c)his clothing and jewellery;
(d)all benefits, rights or entitlements due or accruing to or which may vest in him in respect of B Pty Ltd; and
(e)any other real and/or personal property or financial resources in his name or possession not otherwise specified.
7.That each party do indemnify the other in relation to their separate debts.
8.That a Judicial Registrar of the Federal Circuit and Family Court of Australia Division 1 refers a copy of this judgment and the papers generally to the South Australian Director of Public Prosecutions to consider whether there should be a formal investigation into the first respondent’s behaviour as to whether he has committed a criminal offence.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Stavri & Stavri is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
Ms Stavri (“the applicant”) and Mr Stavri (“the first respondent”) commenced a de facto relationship in 2000, were married in 2004 and separated in or around November 2017. There are two children of the relationship, X born in 2007 and Y born in 2008 (collectively “the children”).
By Amended Initiating Application filed 29 May 2020, the applicant seeks the following orders by way of property settlement:
1. Declarations pursuant to s 78 and s 113 of the Family Law Act 1975 (Cth);
a.that the sum of THREE HUNDRED AND TWENTY FIVE THOUSAND DOLLARS ($325,000)(“the sum”) paid to the ZZ Trust Account on 15 July 2014 is an asset of the marriage;
b.in the alternative to 1(a), that the sum is held on trust for the benefit of the parties.
2. A declaration pursuant to s 78 and s 113 of the Family Law Act 1975 (Cth);
a.that the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000) paid to NAB “F Business Cheque Account” number ...09 facility held in the name of the respondent husband and Mr D Stavri jointly on 15 July 2014 is an asset of the marriage;
b.in the alternative to paragraph 2(b), that the sum is held on trust for the benefit of the parties.
3.The assets of the marriage be divided 65% in favour of the applicant wife or such other sum as this Honourable Court thinks fit.
4.In the alternative to paragraph 3 hereof, the funds held on trust by and for the benefit of the parties be divided 65% in favour of the applicant wife or such other sum as the Honourable Court thinks fit.
5.In the alternative to paragraphs 3 and 4 hereof, and pursuant to s 90AE(2) of the Family Law Act 1975 (Cth) the respondent husband, B Pty Ltd (ACN …) Mr D Stavri, Ms C Stavri and the legal personal representative for the estate of Mr E Stavri (jointly or severally) pay to the applicant wife the sum of FOUR HUNDRED AND TWENTY FIVE THOUSAND DOLLARS ONLY ($425,000) or such other sum as this Honourable Court thinks fit.
6.In the alternative to paragraphs 3, 4 and 5 hereof, and pursuant to s 79(5), these proceedings be adjourned until such time as determined by this Honourable Court.
…
(As per the original)
The wife seeks her costs of and incidental to the proceedings to be assessed on an indemnity basis.
By Amended Response to Initiating Application filed 12 November 2020, the first respondent seeks the following orders:
1.The assets of the marriage be divided equally or such other sum as the Honourable Court thinks fit.
2.Current Court Order for Respondent 1 the husband to pay the applicant $35,000 be set aside as the assets from the marriage have yet to be determined pending trial.
3.The 1st respondent the husband and the applicant is at liberty to use funds from their Superannuation to settle the final property settlement if any.
4. The Applicants Jewellery of $30,000 is an asset in the marriage.
5.The Applicants control of the children’s bank accounts $15,000 is an asset in the marriage.
6. The Applicants Motor Vehicle 1 is an asset in the marriage $16,500.
7.Net proceeds from sale of Marital Home deposited into Applicants account $29,596 is an asset in the marriage.
(As per the original)
On 8 May 2020 an order was made that the entity B Pty Ltd Mr D Stavri (“the fourth respondent”), Ms C Stavri (“the third respondent”) and the legal personal representative for the estate of Mr E Stavri (“the fifth respondent”) (collectively “the second to fifth respondents”) be joined as respondents to the proceedings. The order also contained a notation that the first respondent pay to the applicant the sum of $35,000 within five calendar months from the date of the order.
The second to fifth respondents by their Amended Response to Initiating Application filed 13 November 2020, seek that orders sought by the applicant for declarations pursuant to ss 78, 113 and s 79(5) of the Family Law Act 1975 (Cth) (“the Act”) and for relief pursuant to s 90AE(2) of the Act be dismissed.
The applicant sets out the property of the parties as follows:[1]
[1] See Case Outline of the applicant, part C.
Asset Applicant’s value Respondent’s value Ownership Motor Vehicle 1 $13,500 $- Wife Motor Vehicle 2 $4,900 $5,000 Husband Cash at bank $3,000 $- Wife Cash at bank $27,326 $20,032 Husband S Super Fund $19,638 $19,638 Wife T Super Fund $93,247 $85,957 Husband
Liabilities Applicant’s value Respondent’s value Ownership Wife’s loan from parents and family $5,700 $5,700 Wife
In addition, the wife seeks that the following add-backs be included:[2]
[2] Ibid.
Description Value Sum paid to B Pty Ltd from net proceeds of sale of V Street, Suburb W $325,152 Sum paid to the National Australia Bank (“NAB”) on account of husband’s business overdraft facility held with Mr D Stavri $100,000 Sum paid to Z Solicitors for charging order against husband’s interest in V Street, Suburb W $2,086 Sum paid to N Pty Ltd against husband’s interest in V Street, Suburb W $3,247
It is apparent that the property of the parties is minimal and without the argument seeking declarations that the second to fifth respondents return the sums of $325,000 and $100,000 to the applicant and first respondent, there is little or no utility in the proceedings.
It is conceded by the applicant that the sum of $100,000 sought to be added back was paid to NAB pursuant to a guarantee given by the applicant in respect of the business overdraft facility held by the first respondent and Mr D Stavri, namely the fourth respondent.
The applicant gave a guarantee and an indemnity on 29 June 2012 to NAB in respect of credit extended to the partnership between the first respondents and his brother, the fourth respondent, trading under the name of F Business Suburb AA under a loan agreement.
The applicant and the first respondent as mortgagors gave a registered mortgage to NAB over the property situate at V Street, Suburb W (“the Suburb W property”). The NAB exercised its power of sale as mortgagee in respect of the Suburb W property and on 15 July 2014 the sum of $100,000 was paid to NAB pursuant to the applicant’s guarantee.
The second to fifth respondents argue that the sum of $100,000 was not retained by them and given that it is no longer property of the parties, in circumstances where NAB exercised their right and entitlement pursuant to the mortgage and guarantee, there is no property to which a s 113 declaration could be made.
For reasons that will be discussed, I consider there is merit in the argument that a declaration should not be made in respect of the sum of $100,000 paid to NAB.
DOCUMENTS RELIED UPON
The applicant relies upon the following documents:
(1)Amended Initiating Application filed 29 May 2020;
(2)Trial affidavit of the applicant filed 28 September 2020;
(3)Financial Statement of the applicant filed 28 September 2020;
(4)Affidavit of the applicant filed 16 November 2020; and
(5)Case outline document filed on behalf of the applicant.
The first respondent relies upon the following documents:
(1)Amended Response to Initiating Application filed 12 November 2020;
(2)Trial affidavit of first respondent filed 12 November 2020; and
(3)Financial Statement of the first respondent filed 12 November 2020.
The second to fifth respondents rely upon the following documents:
(1)Amended Response to Initiating Application filed 13 November 2020;
(2)Trial affidavit of Mr D Stavri filed 13 November 2020;
(3)Trial affidavit of Ms C Stavri filed 13 November 2020;
(4)Trial affidavit of Ms BB Stavri filed 13 November 2020;
(5)Trial affidavit of Mr CC filed 13 November 2020;
(6)Affidavit of Ms DD filed 22 December 2020;
(7)Affidavit of Ms EE filed 22 December 2020; and
(8)Case outline filed on behalf of the second to fifth respondents.
BACKGROUND
The first respondent was born in 1972. The applicant was born in 1977.
At present, the applicant is employed as a manager and the first respondent works as a professional.
Mr E Stavri and Ms C Stavri incorporated FF Pty Ltd on 12 December 1988. FF Pty Ltd changed its name to GG Pty Ltd and then on 30 March 1993 changed its name to B Pty Ltd. B Pty Ltd as trustee for the G Trust currently holds property at Q Street, Suburb R.
The applicant and first respondent commenced cohabitation in early 2000. The first respondent purchased a property at HH Street, Suburb JJ (“the Suburb JJ property”). Soon after the commencement of their relationship, the applicant and first respondent moved to Victoria and in August 2001 (on the wife’s case) purchased property at KK Street, Suburb LL, Victoria (“the Suburb LL property”).
In November 2002, the applicant and first respondent took up residence in Europe and were married in 2004. They returned to Australia later that year.
In December 2004, the first respondent purchased a property at MM Street, Suburb NN (“the Suburb NN property”).
The first respondent established the S1 Family Trust in February 2006. The first respondent is the trustee. The first and fourth respondents established a partnership entity comprised of the S1 Family Trust (“S1FT”) and the S2 Family Trust (“S2FT”) to purchase a retail business known as “the OO Business”.
The first and fourth respondents then purchased the business of F Business Suburb AA (AA Business) and utilised the business licence attached to the OO Business to enable AA Business to operate as a licenced business.
In or about March/April 2008, the applicant and the first respondent purchased the property at V Street, Suburb W (“the Suburb W property”) as tenants in common with 99 one hundredths to the applicant and 1 one hundredth to the first respondent for the price of $1,308,000. The purchase of Suburb W was principally funded by two NAB mortgages totalling $1,260,000. In 2009, the applicant and the first respondent undertook substantial renovations to the Suburb W property. A building contract was entered into with PP Company. A dispute arose with PP Company and debt recovery proceedings were issued against the first respondent. In April 2009, a loan facility with a limit of $400,000 was established for Mr Stavri and Ms C Stavri and B Pty Ltd.
Consequent upon an advice by NAB that the borrowings in respect of AA Business significantly exceeded its value by letter dated 16 November 2011, the first and fourth respondents were advised that the credit limit on the existing facilities and the outstanding debt would need to be reduced.
On 29 June 2012, additional security was provided to NAB in the sum of $100,000 by way of a guarantee signed by the applicant, secured against the Suburb W property. It is agreed that the purpose of the guarantee was to support the existing loans of the first and fourth respondents. The fourth respondent and his wife were also obliged to give a guarantee for a similar amount.
On 14 February 2013, the first respondent’s parents as directors of B Pty Ltd granted a Power of Attorney to the fourth respondent.
In March 2013, N Pty Ltd registered a charging order against the Suburb W property. On 21 June 2013, the second to fifth respondents registered a caveat over the Suburb W property claiming a beneficial interest arising from the acquisition, maintenance, conservation and improvement relating to the property.
Following the first and fourth respondents not being able to meet rent in respect of AA Business, on or about 7 April 2014 they were locked out of the premises. In July 2014, the first respondent was subject to a default judgment in the sum of $261,594.18 plus interest and costs.
On 15 July 2014, the Suburb W property was sold and the net proceeds were disbursed as follows:
·To NAB $1,141,069.44.
·To Z Solicitors $1,934.31.
·To N Pty Ltd $3,095.91.
·Amount paid to B Pty Ltd to withdraw caveat $325,000.
·The balance of the net proceeds of sale in the sum of $29,596.89 was paid to the applicant and the first respondent.
On 18 September 2014, the first respondent was the subject of a bankruptcy notice issued by F Pty Ltd which ultimately resulted in the first respondent’s bankruptcy.
The applicant and first respondent separated in or around November 2017.
ISSUES IN DISPUTE
The applicant asserts that she was misled by the first respondent in conceding that from the net proceeds of sale of the Suburb W property, the sum of $325,000 should be paid to B Pty Ltd. The fourth respondent alleges that in August 2012 his mother complained that she was unable to withdraw funds from her account. The first respondent was at that time in control of the financial affairs of B Pty Ltd and his parents.
The fourth respondent was advised by his mother that it was not the first time that an attempt to withdraw funds from her account had been declined. The following extract from the affidavit of the fourth respondent filed 13 November 2020, summarises the basis for the B Pty Ltd’s claim against the applicant and the first respondent:
22. I was very worried by what my mother told me.
23.I took my parents across the road to the National Australia Bank Suburb AA branch to make enquiries on their behalf and with their authority.
24.At that time, I was informed by the teller, and relayed to my parents, that my mother’s credit card was over the limit, and that there was no credit in their accounts or those of B Pty Ltd.
25.I confronted Mr Stavri about the state of my parents’ finances shortly thereafter, at which time, he brushed me off and suggested that we would be “better off” selling the building owned by B Pty Ltd, or words to that effect.
26. I requested copies of the bank statements on behalf of my parents.
27.When I reviewed the bank statements, I noted frequent and substantial withdrawals were being made from B Pty Ltd’s accounts.
28.I learned that loan facilities held by B Pty Ltd were up for renewal and the bank required updated “Financials” for the entity for the purposes of that renewal.
29.I learned that my parents’ loan facilities had been extended and my parents were indebted to the bank in a sum of over $550,000 and such sum was secured against their home.
30. I immediately contacted Mr Stavri about all that I had learned.
31.Mr Stavri told me, and I made enquiries on my parents’ behalf of various creditors, and learned that my parents also had unpaid accounts in relation to B Pty Ltd and their own personal household expenses in excess of $30,000.
32. …
33. …
34. …
35.Uncle QQ and I met with Mr Stavri at Uncle QQ’s home on the evening of Thursday, 15 November 2012.
36.The following paragraphs reflect my memory of events which has been confirmed by the notes made by Uncle QQ and recently provided to my solicitors. The notes are Item 26 in the Book of Documents.
37.At the meeting, Mr Stavri said words to the effect that he admitted that he had withdrawn money from the B Pty Ltd’s accounts and used funds from the bank secured by my parents’ home for his own purposes.
38.He also said words to the effect that he had applied those monies to pay for the maintenance and outgoings of his home, and to fund his and his wife’s lifestyle.
39.He further said words to the effect that he considered the money he had taken was a loan to him and that he would repay it.
(Emphasis in original)
As a result of the admissions by the first respondent, his access to his parents’ accounts were cancelled and he was no longer permitted to engage in the management of their affairs.
The fourth respondent alleges that in April 2009 NAB approved a portfolio facility with a limit of $400,000. The facility was secured by a registered mortgage over the home of the first respondent’s parents and whilst the facility agreement was signed by both parents on 23 April 2009, the fourth respondent contends that his father did not have cognitive capacity, arising from his state of dementia, to sign the necessary documents. The allegation is that the first respondent coerced his parents into signing the loan facility so that he would be able to access those funds. In October 2011, the loan facility was increased from $400,000 to $550,000 and the contention is that the first respondent misappropriated a significant proportion of those funds.
Following the investigation by the fourth respondent as to the purported misappropriation of funds by the first respondent, on 21 June 2013 he caused a caveat to be issued over the Suburb W property. It is not controversial that the first respondent did not warn the caveat and the fourth respondent contends that in June 2014 he was informed by the first respondent that he and the applicant had placed the Suburb W property on the market for sale. The first respondent allegedly offered to settle the debt owing to B Pty Ltd in the total sum of $325,000 which was ultimately accepted by B Pty Ltd, resulting in the caveat being withdrawn and the property was thereafter able to be sold and settled.
The first respondent admits that he withdrew money from the account of his parents and B Pty Ltd without consent or authority. The first respondent seeks to justify his unlawful conduct by his contention that monies misappropriated by him can be traced, at least in part, to the renovations and improvements to the Suburb W property up to a total expenditure of about $200,000.
The first respondent concedes the following at paragraph 164 of his affidavit filed 12 November 2020:
The transfer of funds was considerable and blowing out of proportion very quickly. I was embarrassed and ashamed to tell the wife that I was using my parents funds without authorisation. I felt as if with the sale of the house I could repay these back.
And further at paragraph 167:
In 2013 it was discovered that I had used funds from my parents accounts and reassured the family that the funds would be paid back from the sale of the marital home. My parents forgave me for what I had done.
The applicant does not accept that there is evidence that traces transfers of money misappropriated by the first respondent to “the acquisition, maintenance, conservation and improvement” of the Suburb W property.
The applicant does not accept that the fourth respondent acted upon the representations made by the first respondent that the funds taken by him were used for maintenance and household expenditure.
It is not contested that the second to fifth respondents became aware of the first respondent’s improper and unlawful conduct in November 2012. The applicant considers that the delay in the second to fifth respondents taking any action to recover the money until the registration of the caveat over the Suburb W property on 21 June 2013, is an indication that they were waiting for the right time to pursue their interests. The applicant highlights that the second to fifth respondents were aware of the financial predicament of AA Business from 2011, and as such, by 2013 realised that the only possible source of money was the interest of the applicant and first respondent in the Suburb W property. The applicant seeks a finding that the respondents were complicit in the decision to register a caveat, in circumstances where the Suburb W property was to be sold consequent upon the financial mismanagement of the first and fourth respondents.
The applicant’s position is that she was not informed either by the applicant or the second to fifth respondent’s at any material time of the extent of the misappropriation of funds by the first respondent. The applicant does not accept that the funds taken by the first respondent could be traced directly to the acquisition, maintenance, conservation or improvement of the Suburb W property and in any event the total cost of the renovations falls well short of the sum of $325,000.
It must be remembered that the applicant held 99 one hundredths interest in the property whereas the first respondent held a 1 one hundredth interest. There is no suggestion that there was any direct dealing between the second to fifth respondents with the applicant nor is there any evidence presented that the applicant acknowledged that funds removed from B Pty Ltd by the first respondent had been utilised.
EVIDENCE
The applicant
The applicant relies upon her trial affidavit filed 28 September 2020 and affidavit in reply filed 16 November 2020. The applicant states that following the purchase of the Suburb W property the first respondent was anxious to undertake renovations and improvements. PP Company were appointed to undertake the building works and following an initial quote of $100,000, the applicant believes that the first respondent entered into a contract.
The family finances were principally conducted by the first respondent. The applicant had access to money only via a debit card attached to a joint NAB transaction account. The applicant was aware of the mortgage and was concerned to keep debt to a minimum.
Whilst the applicant worked part-time in the AA Business, her primary function was to supervise the children. When she did work, her duties were as a sales assistant but she contends she was not part of the business operations. She did not have detailed discussion with the first and fourth respondents concerning the financial viability of the pharmacy.
The applicant has no recollection of signing the NAB guarantee document dated 29 June 2012. Exhibit “29” contains the guarantee document which appears to bear the applicant’s signature and witnessed by Ms RR being a Commissioner for taking affidavits in the Supreme Court of South Australia.
The applicant states that she was not aware of the caveat registered over the Suburb W property nor was it brought to her attention that a charging order had been registered in favour of N Pty Ltd and by the first respondent’s accountants M Ltd.
The applicant signed the Memorandum of Transfer for the sale of the Suburb W property on 10 July 2014. She recollects that she attended a meeting with SS Conveyancer.
The applicant specifically recollects that at the time the contract was signed the first respondent told her that there would be net proceeds of $345,000. She accepted that the first respondent would place those funds in the S1FT to protect them from creditors.
In 2017, the parties sought to negotiate a settlement of their financial arrangements as to child support for the children and a contribution to their extracurricular activities. In particular, the following acknowledgment appears at annexure “ST2” on page 36 of the applicant’s affidavit in reply:
I Mr Stavri acknowledge there is $325,000 in family trust account #…36 from sale of V Street Suburb W. Proceeds to be distributed upon asset settlement.
Mr Stavri S.
[signature] [signature]
9/12/17 9/12/17
The applicant does not remember signing documents at the conveyancer’s office in preparation for the disbursement of funds to B Pty Ltd. She acknowledges that documents must have been signed by her. It is her contention that the applicant’s conduct was such that she felt compelled to sign whatever documents were required to effect settlement.
The first respondent questioned the applicant’s inability to recollect signing the NAB guarantee document and reminded her that the applicant’s signature was witnessed by her sister in law who is a professional.
The applicant rejected the proposition put by counsel for the second to fifth respondents that it was her idea to renovate the Suburb W property. The applicant denied that she promoted renovation and reinforced her earlier position that she was concerned as to the ability of the family to maintain the loan repayments.
The applicant conceded that by sheer dint of her 99 one hundredths interest in the property, she had signed numerous documents starting with those required to instruct the real estate agent and the conveyancing documents necessary to effect the sale of the property.
It appears uncontroversial that the conveyancer was acting on the joint instructions of the applicant and first respondent.
The applicant accepted that the acknowledgement given by the first respondent dated 9 December 2017 was untrue but at the time the parties signed it she believed it to be true.
Exhibit “3” comprises an invoice from PP Company to the first respondent dated 14 September 2010 in the sum of $36,364 for renovations to the Suburb W property. A bank statement for the parties shows a withdrawal of $36,364 which coincides with the PP Company’s invoice. A further document being a statement of the account of B Pty Ltd shows multiple withdrawals by way of internet transfer to the first respondent. The applicant accepted that it was likely the first respondent had withdrawn money from the B Pty Ltd’s account which was then credited to the account of the parties and ultimately was used to pay the PP Company’s invoice.
Exhibit “4” comprises a PP Company’s invoice dated 15 September 2010 for the total sum of $31,063. The account of the first respondent shows a credit of $31,063 which was sourced by him from the B Pty Ltd’s account.
Exhibit “5” comprises a tax invoice dated 18 February 2011 in the sum of $5,700 for the supply of a marble kitchen benchtop. It appears that the sum of $3,000 came direct from the B Pty Ltd’s account to the benchtop supplier.
The first respondent was the subject of proceedings issued by PP Company for the payment of outstanding invoices. It seems that there was a dispute and exhibit “5” comprises an email from the first respondent’s solicitor advising that PP Company were now prepared to accept $10,000 in full and final settlement of the outstanding claim and litigation. Exhibit “6” also comprises a B Pty Ltd’s bank statement which shows that on 15 November 2011 there was an internet transfer in the sum of $10,000 into the first respondent’s account and then a withdrawal on 15 November 2011 to pay and settle the outstanding builders’ claim.
Exhibit “7” comprises invoices from TT Pty Ltd to the first respondent for $1,519.66, $2,140.37 and $11,033.35. The exhibit also comprises a B Pty Ltd’s bank statement which shows that on 19 January 2011 there was an internet transfer to the first respondent’s account in the sum of $16,223.72 with the descriptor as "TT".
Exhibit “8” comprises a B Pty Ltd’s bank statement which shows an internet transfer on 3 February 2012 in the sum of $4,000 with the descriptor being “N deposit”. The amount appears in the respondent’s account as a credit and then a withdrawal on the same day.
It is likely that the documents comprising exhibits 3 to 8 inclusive show that substantial funds were accessed by the first respondent and can be traced to the providers of services involved in the renovation of the Suburb W property. The documents do not show that the applicant had knowledge of these funds nor do they establish the basis upon which the first respondent accessed the accounts of B Pty Ltd.
The first respondent claims that he misappropriated the funds that comprise both the money withdrawn from B Pty Ltd for the Suburb W property renovations but also other funds related to the personal expenses of the family.
It could not be said that at least as to some of the monies transferred to providers, building and renovation services that it is anything other than transparent given the purpose of the transfer is recorded as the descriptor associated with some of the withdrawals.
The applicant contends that as far as she is concerned monies withdrawn by the first respondent were part of his general entitlement to draw down on his loan account with B Pty Ltd.
I accept that whilst some money came from B Pty Ltd and can be traced directly to the payment of goods and services provided for the renovation for the Suburb W property, the wife was not involved in the mechanics of the payments and was not told nor did she know the basis upon which the first respondent was able to withdraw funds from B Pty Ltd.
I consider the applicant to be a reliable witness. Whilst I do not accept that her signature was forged on the NAB guarantee documents nor that she was unaware of the circumstances surrounding the Suburb W property and the instruction given to the conveyancer, it is likely that the first respondent’s conduct was sufficiently deceptive that it would have been difficult for the applicant to challenge the first respondent in order to uncover the truth.
The first respondent
The first respondent accepted that he and the fourth respondent purchased the AA Business for $1,994,000. This sum was comprised of goodwill, the AA Business franchise and approximately $450,000 of stock. The purchase price was by way of money borrowed from NAB.
The first respondent was asked to accept that as at 30 June 2011 AA Business was profitable.
The first respondent was not able to explain where the balance of funds required for the Suburb W property renovations came from. He claimed that the total expenditure was about $200,000 but the source of those funds is not clear from his evidence.
The first respondent was asked to consider the content of various emails he received from Ms BB Stavri on 23 May 2011, 23 July 2012 and the profit and loss statement for the AA Business partnership for year ending 30 June 2014.
The email from Ms BB Stavri of 23 May 2011 asserts that turnover in the retail business was down by $168,387. By email dated 23 July 2012, Ms BB Stavri advises the applicant and first respondent that AA Business owed suppliers $140,728.78. Rent and insurance payments were overdue in the further amount of $71,024.80 and together with amounts owing to AA Business, the total amount owing was $355,263.47. A warning was given by Ms BB Stavri that the first and fourth respondents’ drawings were unsustainable taking into account the increasing debt level.
The profit and loss statement for year ending 30 June 2014 sets out a loss of $1,761,405.53.
The first respondent denied that the diction of Ms BB Stavri that the business was unsustainable given its then current debt level was accurate. The first respondent denied that the business was in serious financial stress and at first his position was that Ms BB Stavri was not really the bookkeeper. Eventually, the first respondent accepted that Ms BB Stavri did have the confidence of the first and fourth respondents to undertake the bookkeeping for the AA Business retail business.
It was put to the first respondent that the money he took from B Pty Ltd was not used principally for the financial support of the family but rather that it was used to prop up the business.
Paragraphs 169 to 177 inclusive of the first respondent’s affidavit filed 12 November 2020, provides a summary of the distributions paid to him from AA Business. The first respondent was unable to explain where he obtained the information from necessary to complete the summary of distributions. It is likely that the first respondent received the drawings as recorded by him.
B Pty Ltd produced a document entitled “Summary of loan advances to Mr Stavri” which particularises the borrowings to the respondent for the years 2009 to 2013 inclusive in the total sum of $622,020.25.
The first respondent conceded that the amounts owing by him to B Pty Ltd were calculated by reference to bank statements which were aligned with the transfer of funds. The first respondent referred to the transfers as “unauthorised”.
Page 877 of the second to fifth respondents’ book of documents contains a note from the accountants to the financial statements of B Pty Ltd for the income year ended 30 June 2012, in the following terms:
Opinion
In our opinion the Financial Report does not present fairly, in all material respects the Financial Position of B Pty Ltd as at 30 June 2012 and its Financial Performance for the year then ended in accordance with the accounting policies described in Note 1 of the Financial Report. The Company has been subject to financial mismanagement by the Company’s Property Manager who without authorisation by the Directors increased the Company’s Borrowings and kept the proceeds for his own benefit and also withdrew funds from the Company’s Bank Account for his own use without the approval of the Company Directors.
Unauthorised money advances made during financial years ended 30 June 2009, 2010, 2011 and 2012 are as follows:
…
TOTAL AS AT 30 JUNE 2012: 583,291.50
(As per the original)
The first respondent was asked to consider an extract from the B Pty Ltd’s annual general ledger dated 25 November 2012.[3] At point 5 on the page there are transactions under the heading of “Loan Advance Account – Mr Stavri Opening Balance.” It purportedly records all of the advances to the first respondent and bringing to account some more modest credits, the closing balance was $457,598.50. The first respondent admitted that he had not gone through the transactions and as such, it was put to him that without that document he had accepted what his family said was the amount that he owed B Pty Ltd. The first respondent denied that there had not been any checking or verification and further denied that given that he was intending to seek bankruptcy it would not have been in his interest to gain a better understanding as to the extent to which he was indebted to B Pty Ltd.
[3] Affidavit of the applicant filed 16 November 2020, annexure “JS11”, page 107.
The assertion was put to the first respondent that the books of accounts for B Pty Ltd were written after the first respondents’ conduct came to light. Whilst the financial information for B Pty Ltd deals with the 2012 financial year, the financial statements were prepared retrospectively.
The evidence of the first respondent was unsatisfactory. He was asked to consider the accuracy of his Financial Statement detailing his income. The Financial Statement filed 11 November 2020 sets out the first respondent’s average weekly income of $850 which he considered also incorporated the release of $10,000 by way of a superannuation hardship payment.
The issue was highlighted by the first respondent’s admission that he still retained the sum of $10,000 and accordingly the amount that he received from his locum work was around $6,000. It is self-evident that by his own arithmetic that $850 per week equates to $44,200 for the year and if that sum is reduced by the $10,000 retained from the withdrawal from superannuation entitlement, the amounts do not match up.
The first respondent was asked whether he expected the Court to consider that from 1 July 2020 to 17 November 2020 he was able to live initially on $6,000, later increased to $13,000. Taking into account the first respondent’s rent and other expenses his evidence was gossamer thin in its reliability.
The first respondent agreed that little or no weight could be attached to his Financial Statement.
The uncertainty surrounding the first respondent’s income also had a connection with the relatively modest child support currently being paid.
At times, the first respondent’s evidence was outlandish and exaggerated. It is difficult to accept his evidence where it is in opposition to that of the applicant.
The first respondent made no attempt to explain the financial arrangements that he had with B Pty Ltd and served to reinforce the applicant’s assertion that at all material times she was misled by him. It could not be said that the first respondent conducted himself with such transparency that the applicant understood without question that he had misappropriated substantial funds from B Pty Ltd for the benefit of the family.
The deceptive conduct of the first respondent in entering into the false acknowledgment that B Pty Ltd was indebted to the parties in the sum of $350,000 is significant corroboration of the applicant’s case that she did not know the nature and quality of the first respondent’s conduct.
Under cross-examination by counsel for the second to fifth respondent’s, the first respondent readily conceded that he stole money from his family, in particular his parents.
The first respondent also agreed that at a meeting with his brother and uncle he indicated that he would sell the Suburb W property in order to repay the money that he had misappropriated. He accepted that the financial circumstances of the family were dire and it was the applicant that suggested the respondent consider bankruptcy after the applicant had received a notice from solicitors acting for NAB of their intention to foreclose and sell the Suburb W property.
At the meeting with his brother and uncle, the first respondent agreed that the fourth respondent wanted to speak to the applicant and tell her what was going on. It was the first respondent who did not want anybody speaking to the applicant because he felt that the money he had taken was limited to $395,000 and could be resolved in some way in the future.
Mr D Stavri
The fourth respondent recalled the meeting with the first respondent and his uncle on 15 November 2012. The meeting took place at his uncle’s residence. His uncle was a professional and took notes of the meeting. The topic of discussion was in relation to the first respondent’s purported misappropriation of funds from his parent’s accounts with B Pty Ltd. The fourth respondent recalled that the first respondent believed that the amount was in excess of $400,000 not including interest.
The fourth respondent denied that amounts withdrawn by the first respondent could or should be categorised as distributions or legitimate withdrawals to the first respondent from the B Pty Ltd’s account.
The fourth respondent considered the loan advance account at page 107 of the applicant’s affidavit filed 16 November 2020, namely annexure “ST11”, but denied that it represented legitimate withdrawals as opposed to a method of recording the monies that had been misappropriated.
It is not controversial that the loan advance account ledger commences at 15 July 2010 which is two years and one month after the purchase of the Suburb W property and more than one year after the commencement of the renovations and the subsequent dispute with the builders.
The fourth respondent conceded that he had instructed his solicitors to look into the prospect of a caveat being lodged over the property in 2013, being about one year prior to the property being sold on 15 July 2014. The caveat was lodged on 21 June 2013 and the explanation for the delay was to give the first respondent an opportunity to sell the property and to tell his wife.
The fourth respondent confirmed that following the outcome of the meeting with the first respondent and his uncle, it was agreed that the B Pty Ltd’s accountant, Mr VV (not related to the respondents), would attempt to ascertain the extent of the first respondent’s misappropriation.
The second decision was that the solicitors for B Pty Ltd would be instructed to lodge a caveat over the Suburb W property. Exhibit “15” comprises the caveat dated 21 June 2013. The caveator comprises B Pty Ltd, Mr E Stavri (the deceased father of the first and fourth respondents), Ms C Stavri and the fourth respondent. The caveatees are the applicant and the first respondent.
The caveator claims the following:
[T]o be beneficially entitled to an estate in fee simple in some (at present) indefinable share in the land abovedescribed by virtue of having contributed directly and/or indirectly to the acquisition, maintenance, conservation and improvement of same.[4]
[4] Exhibit “15”.
The fourth respondent claimed to be familiar with the contents of the caveat but to the extent that there is any uncertainty, he claimed that the caveat was prepared by solicitors for B Pty Ltd.
The fourth respondent agreed with the proposition that the caveator had not provided directly to the acquisition, maintenance, conservation and improvement of the Suburb W property. The gravamen of the fourth respondent’s understanding of the claim is that in the 2008 financial year the first and fourth respondents each drew down the sum of $265,000 from AA Business. The fourth respondent believed that the first respondent utilised the funds as the deposit for the Suburb W property. He asserts that there was an agreement with the first respondent that within the next financial year the money drawn down would be repaid by each of them. The fourth respondent contends that he repaid the monies drawn by him but that the first respondent did not.
The claim by the fourth respondent is that the first respondent misappropriated money from the B Pty Ltd’s account and used it to repay AA Business for the money drawn down by him.
The fourth respondent’s evidence was unsatisfactory. He was not able to point to any evidence that corroborated his stated position, namely that the sum of $265,000 drawn from the accounts of AA Business was actually used to purchase the Suburb W property. There was no evidence as to the agreement between the first and fourth respondents nor what would happen if one or other of them did not repay the money. Presumably, the drawn down funds would be reflected as a debit to the loan account of the first respondent.
It is an uncertain pathway for the fourth respondent to contend that monies taken by the first respondent from B Pty Ltd to repay money drawn down by him from the AA Business is an indirect contribution to the acquisition, maintenance, conservation and improvement of the Suburb W property. There is little or no evidence that supports the contention.
The fourth respondent was asked to consider exhibit “23” which comprises a Statement of Claim filed by NAB, claiming the sum of $1,443,100.93 from Mr D Stavri and Mr Stavri pursuant to a loan agreement entered into on or about 12 May 2011. The bank received $100,000 from the first respondent in or about July 2014 following the sale of the Suburb W property and the sum of $100,140 in or about September 2014 from the sale of a property situate at AB Beach.
It appears that from the money being paid from the net proceeds of sale of the Suburb W property to B Pty Ltd as a condition of the caveat being withdrawn, the sum of $100,000 was used by the fourth respondent to discharge his obligation to NAB pursuant to his guarantee. The same accommodation was not given to the first respondent.
Whilst a number of good reasons exist for NAB dealing with each of the first and fourth respondents separately, it must be remembered that the interest held by the first respondent in the Suburb W property was as to 1 per cent whereas the applicant held 99 per cent.
The NAB issued a bankruptcy notice in respect of both the first and fourth respondents. The fourth respondent entered into an agreement with the bank and was ultimately released on the basis of the payment of $150,000.
The NAB went on to bankrupt the first respondent which was more than a year after the sale of the Suburb W property.
The fourth respondent was asked to consider the 2014 financial statements for B Pty Ltd. The fourth respondent agreed that the debit loan account for the first respondent had increased by about $45,000. The fourth respondent considered that any increase in the first respondent’s loan account was as a result of an interest component of about 6 per cent per annum.
The fourth respondent was shown page 9 of exhibit “17”, namely notes to the financial statements for AA Business which sets out the detail of partners’ funds for the year ended 30 June 2015. As at the year ended 2014, the first respondent was indebted to AA Business in the sum of $1,271,846.73 and the fourth respondent was indebted to the sum of $1,244,672.33.
As a result of the gross profit from trading in the sum of $2,088,477.89, comprising capital gain on sale of non-current assets and loss on non-current assets, that enabled each of the partners to contribute their share of the profit each in the sum of $946,024.17. The financial statements reflect that the first respondent introduced capital of $234,224.85 and the fourth respondent introduced capital of $390,245.87. The fourth respondent was not able to explain the source of the capital introduced.
Mr UU
Mr UU was the accountant for AA Business. He was asked to consider exhibit “17” and in particular to explain the capital gain on sale of non-current assets in the sum of $1,453,032.93. His evidence was that this figure represented a capital gain tax event.
He confirmed that the partnership owed in excess of $1,633,000. The fourth respondent was able to negotiate successfully with NAB to reduce the amount to $150,000. The NAB wrote off the balance of the debt. That reduction was a capital gains tax event.
The trading profit of $635,444.96 represented trading creditors. AA Business ultimately wrote off the debt and the correct treatment is to reverse the transaction. Even so, Mr UU considered that the proper accounting practice was for the transaction to be recorded in the financial statements.
The explanation for the partners’ funds was to enable the partnership to be wound up. The notes to the financial statement should not be read as an indication that each of the first and fourth respondents contributed capital other than in an accounting sense. I considered that Mr UU was a reliable witness.
Ms EE
Ms EE is a partner in a legal practice that had previously acted for the second to fifth respondents. Ms EE confirmed that on or about 21 June 2013 she was instructed by Mr D Stavri to register a caveat on the certificate of title for the Suburb W property. She understood that there was some urgency because the first respondent had told the fourth respondent that the Suburb W property was to be sold and the first respondent may well be moving to Melbourne.
Ms EE affirmed an affidavit which was filed on 22 December 2020.
The contents of paragraph 6(a) to (c) inclusive represent the basis upon which the caveat was filed. For completeness it is necessary to set out their content:
6.The information provided to me by Mr D Stavri included, not exclusively, the following.
(a)The Husband was or had been in partnership with Mr D Stavri. That partnership operated AA Business on WW Street, Suburb AA. The Husband had inappropriately taken funds from AA Business accounts without permission or Mr D Stavri’ knowledge or consent and the Husband had not repaid any of those monies to the business. The amount taken was in excess of $100,000 and if those monies had not been taken payments may have been made to AA Business within its terms thereby avoiding an action that was filed by it against Mr D Stavri and the Husband in the Victorian courts.
(b)The Husband had inappropriately taken funds, without permission or consent and without the knowledge or consent of B Pty Ltd, his mother Ms C Stavri and his father Mr E Stavri. The amounts taken were, according to the financial statements of B Pty Ltd more than $600,000 and included amongst other amounts, loan drawdowns with the NAB over $550,000 and the extension of a further $100,000 on a line of credit that was already to the value of $400,000.
(c)The Husband, when approached by Mr D Stavri to explain these inappropriate dealings and repayment of the funds, conceded that the funds had been taken by him and used to renovate or otherwise improve the Suburb W property.
Ms EE asserted at paragraph 7 that “[t]he admission referred to in paragraph 5c herein created an equitable interest in the Suburb W property in favour of the Second to Fifth respondents”.
Ms EE concedes that there was no aspect of 6(a) to (c) inclusive that was of her own knowledge but rather was history provided by the fourth respondent.
As is apparent from the evidence of the fourth respondent, the matters repeated in paragraph 6(a) of Ms EE’s affidavit are demonstrably incorrect. I accept that Ms EE would not necessarily have known whether the information provided by the fourth respondent accurately reflected the circumstances as alleged.
Paragraph 6(c) of Ms EE’s affidavit refers to the matters raised in paragraph 6(b) but not paragraph 6(a).
Even the most cursory consideration of the content of paragraph 6(a) of Ms EE’s affidavit would not invite a finding that the amount taken in excess of $100,000 was used for the “acquisition, maintenance, conservation and improvement” of the Suburb W property.
Ms EE agreed with the proposition that it was the purported admission of the first respondent, as set out in paragraph 6(c) of her affidavit, that enabled consideration of an equitable interest to be given and became the basis for the caveat.
Ms EE gave evidence that in addition to the history provided by the fourth respondent, he also gave her a quantity of documents comprising bank statements for B Pty Ltd. To be fair to Ms EE, the instructions for the issue of a caveat occurred in 2013 and since that date the file has been destroyed in the ordinary course.
Whilst it was surprising that Ms EE had not referred to the documents that she had been provided, I accept that reasonably she is not able now to remember with any precision the content of the bank statements provided.
I do accept Ms EE’s evidence as to the instructions provided by the fourth respondent. The inconsistency between the evidence of the fourth respondent and of Ms EE set out in paragraphs 6(a) to (c) inclusive is a relevant consideration.
It is also important to note that Ms EE does not assert that the fourth respondent makes complaint, allegation or any assertion of knowledge by the applicant of the conduct of the first respondent. Common sense would suggest that the manner by which the applicant and the first respondent held the Suburb W property would have been a highly relevant consideration for Ms EE in terms of the advice that she was asked to provide to the fourth respondent, relevant to the method and manner by which a caveat could or should be lodged on the Suburb W property. In circumstances where it is not suggested that the applicant had knowledge of the misappropriation by the first respondent of funds from B Pty Ltd nor any evidence that indicated the applicant acknowledged that she knew the source of funds used for renovation, conservation and maintenance raises the question as to whether the caveat should have been lodged on the interest held by the applicant in the Suburb W property.
Ms DD Ms UU is a partner in the firm of solicitors representing the second to fifth respondents. Her involvement was to negotiate the withdrawal of the caveat over the Suburb W property upon the payment from the anticipated proceeds of sale of the property of $325,000. Not dissimilar to Ms EE, Ms UU accepted her instructions from the fourth respondent.
The conveyancers for the sale of the Suburb W property were advised that the caveators would withdraw the caveat at settlement and Ms UU executed the withdrawal in anticipation of settlement and the payment to the caveators of the settlement sum.
Ms BB Stavri
Mr BB Stavri is the wife of the fourth respondent.
By her own admission she had little involvement in the financial transactions associated with the purchase of the AA Business but was aware that guarantees would be required from the applicant and her totalling $200,000.
Mr BB Stavri was not the subject of cross-examination, the content of her affidavit filed 13 November 2020 can generally be considered uncontroversial.
Ms C Stavri
Ms BB Stavri is the mother of the first and fourth respondents. She relies upon her trial affidavit filed 13 November 2020. Her recollection of the events was poor but I accept her evidence that she and her husband, during his lifetime, did not authorise the applicant to take money from the accounts of B Pty Ltd for the period between 2007 and 2012.
The recollection of events by the witness was such that she acknowledged that even though her signature appears on various bank applications and guarantee documents she did not recall signing them. The admission has importance in that the assertion is that the first respondent misappropriated money without authorisation. An aspect of the allegation against the first respondent is that he caused B Pty Ltd to increase its borrowing capacity so that he could then access the accounts of B Pty Ltd then subject to a higher credit limit.
When questioned, Ms BB Stavri altered her evidence such that she asserted she did recollect the loan facilities were approved but did not know what they represented.
The evidence of Ms BB Stavri is poor and I consider it to be unreliable.
LEGAL PRINCIPLES TO BE APPLIED
Section 79 of the Act provides:-
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property; or
(b) …
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) …
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(1A) …
(1B) …
(1C) …
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution, (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party of the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
“Property” is defined in s 4(1) of the Act as meaning:
property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
In Stanfordv Stanford (2012) 247 CLR 108 (“Stanford”) the majority held:
[35]It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless is satisfied that, in all the circumstances, it is just and equitable to make the order.” Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
[36]The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. …
(Footnotes omitted)
Importantly, the High Court found:
[39]… whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist.
It is therefore not an assumption that a party to a marriage has a right to an interest in property by reference to matters arising under s 79(4) of the Act. In effect, a party cannot pull themselves up by their own boot straps by asserting contribution under s 79(4) and then using that position to satisfy the obligation created by s 79(2) of the Act. To do so would be to conflate the relevant sections.
The High Court further held that:
[40]… To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
(Emphasis in original)
Whilst clearly the Court has a significant obligation to consider the justice and equity of making any order that adjusts the property rights of parties, I do not consider that Stanford goes so far as to suggest that there can be no regard to the matters that might fall for consideration under s 79(4) of the Act. It is the very nature of the suite of contributions made by parties to a marriage which in and of themselves have the ability to create equitable interests in the property of each of them.
In Bevan & Bevan (2013) FLC 93-545 (“Bevan”) the majority of the Full Court said (in relation to the previously quoted paragraph in Stanford):-
[70]In our experience, the circumstances described in the paragraph above encapsulate the vast majority of cases. Hence the reminder in Stanford of the pivotal role of s 79(2) is unlikely to have any impact in most cases, although it will serve as a reminder to trial judges that the precondition to making any order is a finding that it is just and equitable to do so.
At paragraph 73, the Full Court in Bevan stated that the rationale of Stanford can be reduced to three fundamental principles:
(1)A Court needs to consider the existing property interests of the parties and identify those interests (by reference to common law and equity);
(2)The discretion must be exercised in accordance with legal principles and not in respect of any assumption that the parties’ interests should be different from those determined by common law equity; and
(3)Section 79(2) cannot be conflated by reference only to matters in s 79(4).
Accordingly, I must give proper and separate regard to the legal and equitable interests of each of the parties.
This raises the extent of the continued applicability of the “four step approach” as determined by the Full Court in Hickey & Hickey (2003) FLC 93-143.
In Watson & Ling (2013) FLC 93-527 Murphy J was of the opinion that the “four step approach” may well provide a level of rigor that could lead to error. Therefore, the process needed further consideration:
13.As a result of those matters, the Court’s approach to s 79/s 90SM may be less compartmentalised than what a strict or unthinking adherence to four (or three) “steps” might otherwise reveal. The task is essentially holistic; is it just and equitable in the particular circumstances of the particular relationship or marriage under consideration to make an order and, if so, its terms must similarly meet that criteria. Of course, holistic though the approach is, it must be referenced to what the Act requires and care must be taken to ensure that the Court’s reasons make that clear.
In this case, both the first respondent and the applicant seek that there be an alteration of their respective interests in property.
Other than the applicant’s claim that she has an equitable interest by reason of constructive trust in the $325,000 paid to B Pty Ltd at the settlement of the sale of the Suburb W property, the assets of the parties are modest and not significantly in dispute. The financial circumstances of the parties are such that if the applicant is unsuccessful in her claim there is not much left for the Court to consider.
The following represents the property of the parties comprising the asset pool:
Assets
Motor Vehicle 1 (applicant) $13,500 Motor Vehicle 2 (first respondent) $4,900 TOTAL $18,400 Superannuation
S Super Fund (applicant) $19,638 T Super Fund (first respondent) $93,247 TOTAL $112,885
Each of the parties have sought and gained approval for the withdrawal by way of early release from their separate superannuation entitlements. The applicant has withdrawn $20,000 and the respondent has withdrawn $10,000.
Taking into account the parlous financial circumstances of each of the parties, in particular the applicant and her ongoing care of the children, no evidence has been presented that would suggest the monies withdrawn by each of the parties was used other than in the contingencies of life.
I do not propose to add any money back into account either in terms of cash at bank or superannuation withdrawals.
At settlement of the Suburb W property, the applicant received $29,596.89. There was no dispute that those monies have been spent on the expenses for the family and accordingly I do not propose to add them back.
The more significant consideration is whether a declaration can be made that would require the second to fifth respondents to pay to the parties the sum of $325,000, received by them from the sale proceeds of the Suburb W property, or whether if unsuccessful that sum should be added back in the ledger of the first respondent.
I have determined that there is no basis for a declaration to lie against the second to fifth respondents in respect of the sum of $100,000 that was paid to NAB pursuant to the applicant’s guarantee.
Whilst it might be argued that the financial dealings of the applicant and the first respondent in respect of the AA Business were labyrinthine in their scope, the transaction with NAB was relatively straight forward and whilst egregious, was nonetheless consequent upon the applicant entering into the guarantee arrangement.
The focus therefore is the extent to which there is a basis for the applicant’s claim against the second to fifth respondents that she has an equitable interest in the monies paid to them at settlement.
THE APPLICANT’S EQUITABLE CLAIM
The applicant seeks a declaration pursuant to s 113 of the Act that the sum of $325,000, paid to the trust account of the solicitors for B Pty Ltd, be declared an asset of the marriage. In the alternative, an order is sought that the said sum is held on trust for the benefit of the parties.
During the course of the proceedings, the applicant’s counsel was asked to consider whether an order pursuant to s 106B of the Act was sought and that the transaction comprising the payment of the sum of $325,000 from the sale proceeds of the Suburb W property should be set aside. No application was made to amend the orders sought and it is therefore not an option for the Court to consider whether the transaction should be set aside.
Section 113 of the Act relates to declarations as to the validity of a marriage, dissolution or annulment. The section is in the following terms:
In proceedings of the kind referred to in paragraph (b) of the definition of matrimonial cause in subsection 4(1), the court may make such declaration as is justified.
(Emphasis in original)
Paragraph (b) under the definition of “matrimonial cause”[5] means:
(b) proceedings for a declaration as to the validity of:
(i) a marriage; or
(ii) a divorce; or
(iii) the annulment of a marriage
by decree or otherwise; or …
[5] Family Law Act 1975 (Cth) s 4(1).
The orders sought in respect of relief pursuant to s 113 of the Act are not applicable and should be dismissed.
The applicant also seeks a declaration pursuant to s 78 of the Act. Section 78 provides for a declaration of interest in property in the following terms:
(1) In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
(2)Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to the sale or partition and interim or permanent orders as to possession.
Prior to its repeal in 1988, s 78(3) of the Act provided that orders under s 78 were “binding on the parties to the marriage but not on any other person”[6]. The consequence of the repeal of subsection (3) is now to remove any impediment to a declaration being made under s 78 which binds third parties.
[6] Family Law Act 1975 (Cth) as enacted, later amended by Law and Justice Legislation Amendment Act 1988 (Cth) s 39(1)
In this case the second to fifth respondents are joined to the proceedings, have had clear notice of the applicant’s claim and have engaged in the proceedings in their opposition to the orders as sought.
Counsel for the second to fifth respondents takes issue with the nature of the declaration sought by the applicant, namely that the sum of $325,000 “is an asset of the marriage”. Clearly it is not an asset of the marriage that is being sought by declaration rather that one and/or the other of the applicant and first respondent is the beneficial owner of property held by the third parties, namely the second to fifth respondents.
It is axiomatic that the Court is required to consider the legal and equitable interests of the parties before embarking upon a consideration of s 79 of the Act. Orders under s 78 are not able to adjust the interests of parties in property but rather can determine the existing property rights of parties.
It is arguable whether s 79 is sufficiently broad in its scope to encompass the consideration of the interests of the parties in the sum of $325,000.
I do not consider that the second to fifth respondents are in any way prejudiced by the careless drafting of the orders sought by the applicant.
I find that the applicant was placed in an invidious position by the caveat being lodged on the title in circumstances where the property was on the market for sale and clear title was a necessary prerequisite of settlement. I also accept the applicant gave instructions to pay the settlement proceeds of $325,000 to the B Pty Ltd’s solicitor’s trust account. I am not satisfied that the applicant understood the basis of the claim asserted by the second to fifth respondents in support of the caveat.
When pressed, counsel for the applicant struggled to elucidate the basis of the equitable relief sought pursuant to s 78 of the Act.
Counsel touched upon the existence of a constructive trust arising from the representation of the first respondent in circumstances where his own conduct was so egregious that it could not be said the applicant was acting in a manner consistent with informed consent. An indication that the respondents were acting in concert is exemplified by the absence of any advice to the applicant as to the conduct of the first respondent in allegedly misappropriating funds. Nor was there any notice of a demand that was to be made and the basis upon which an equitable interest was claimed in respect of money sourced from AA Business towards the purported acquisition of the Suburb W property and/or money sourced from B Pty Ltd towards the maintenance, improvement and conservation of the property.
The pivotal consideration is whether according to equity it would be unconscionable to allow the legal owner of property to enjoy sole beneficial ownership.
The applicant asserts that she relied upon the representations of the first respondent. I find that she did. I find that the absence of notice by the second to fifth respondents, in circumstances where they knew that the applicant was acting to her detriment by relying on the said representations, was integral to their plan to cause the applicant not to challenge the caveat and to payout the sum of $325,000 to B Pty Ltd (see Commonwealth of Australia v Verwayen (1990) 170 CLR 394.)
The lodgement of the caveat was pivotal to the second to fifth respondents being able to secure the payment of $325,000 at the settlement of the Suburb W property. It is an easy finding that the second to fifth respondents had no claim that would support the caveat. The fourth respondent conceded that the second, third and fifth respondents did not personally provide money to the applicant or the first respondent for the acquisition, maintenance, conservation and improvement of the Suburb W property. It is argued that the first respondent misappropriated money from the accounts of B Pty Ltd, some of which appears to have been used to pay for goods and services involved in the renovation of the Suburb W property. It is a convoluted argument put forward on behalf of B Pty Ltd that in 2008 the first and fourth respondents agreed to each draw down the sum of $265,000 which the fourth respondent contends was used by the first respondent as a deposit for the acquisition of the Suburb W property.
The fourth respondent argues that he repaid the money to AA Business as per the agreement but the first respondent did not. It is alleged that the first respondent then misappropriated funds from B Pty Ltd in order to do so. Hence, B Pty Ltd asserts that the misappropriated funds that were paid into B Pty Ltd takes on the flavour of money used for the acquisition of the Suburb W property some years earlier.
The fourth respondent on behalf of B Pty Ltd did not present evidence that linked the use by the first respondent of the sum of $265,000 drawn from AA Business for the acquisition of the Suburb W property. Evidence was not produced that established money had been transferred from B Pty Ltd to AA Business by the first respondent for the express purpose of repaying or discharging the money that he had drawn down.
The evidence of the first respondent was inherently unreliable. The reliability of the first respondent’s evidence is further tainted by his apparent admission that he misappropriated or stole money from B Pty Ltd. There were few areas of his evidence where the first respondent could be believed.
It is important that the first respondent did not tell the applicant what he had done or what had been the subject of discussion with the second to fifth respondents, in particular in respect of the meeting with his uncle who was a professional.
The conduct of the first respondent is made more egregious by his concession that he entered into a written agreement with the applicant, confirming that the sum of $325,000 was due and owing by B Pty Ltd. I accept without question that the applicant believed the representations of the first respondent to her detriment and that he intended her to do so.
The evidence of the fourth respondent was also unreliable. It may well have been the case that the second to fifth respondents were upset when they discovered the extent to which the first respondent had made unauthorised withdrawals from the accounts of B Pty Ltd. What flowed from that was a strategy to recoup some of the money from the only source that was likely to be available, namely the sale of the Suburb W property. The lodgement of the caveat was opportunistic and it was a relevant consideration that the first and fourth respondents took no action and made no attempt to advise the applicant of the circumstances in which the respondent’s found themselves. Their silence was an agreed position between the respondents with the only realistic purpose to ensure that the applicant was placed at a disadvantage in terms of being able to take independent and separate advice and challenge the caveat.
The second, third and fifth respondents have fallen a long way short of establishing any basis for the caveat and it is likely that if the applicant had warned the caveat it would have been unsustainable.
Other than the applicant giving instructions to the conveyancer to pay out the sum of $325,000 at settlement, the applicant had no easy way of making an informed decision particularly given the conduct of the first respondent in reinforcing to the applicant that she need not be concerned as to the money being later available for their use.
The onus of proof in relation to detrimental reliance falls to the applicant. She has discharged that onus. In addition, equitable intervention requires unconscionability and a finding of significant detriment.
McPherson J in Riches & Hogben [1985] 2 Qd R 292 at 300 said:
The critical element is the conduct of the defendant after the representation in encouraging the plaintiff to act upon it; Olsson v Dyson (1969) 120 CLR 365, 379 per Kitto J. That is what makes it unconscionable for the defendant to deny the right which the plaintiff has been led to expect …
In Sidhu v Van Dyke (2014) 251 CLR 505 (“Sidhu”) the plurality said:
[77]This category of equitable estoppel serves to vindicate the expectations of the representee against the party who seeks unconscionably to resile from an expectation he or she has created. The extent to which it is unconscionable of the appellant to seek to resile from the position expressed in his assurances to the respondent may be gauged by reflecting on the likely response of the respondent if the appellant had told her in January 1989: “I am happy for you to remain at Oaks Cottage, but only for so long as it suits me and my wife to have you here; and, while you remain on the property, you must care for it as if you were the owner of the property …
At paragraph 91 of Sidhu, Gageler J said:
To establish that the belief to which she was induced by the appellant’s representations was a contributing cause to the course of action or inaction which she took, the respondent needed to establish more than that she had the belief and took the belief into account when she acted or refrained from acting. She needed to establish that having the belief and taking the belief into account made a difference to her taking the course of action or inaction: that she would not have so acted or refrained from acting if she did not have the belief.
I have considered the elements of a constructive trust or promissory estoppel, as opined by Brennan J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429:-
(1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s actions or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.
I have come to the position that the applicant has established that the necessary representations were made and that they were intended to cause her detriment. It cannot be ignored that the first respondent’s interest in the Suburb W property was as to 1 per cent whereas the applicant held a 99 per cent interest. I consider that unconscionable conduct has been established on the part of the second to fifth respondents.
A declaration should be made that B Pty Ltd should notionally pay to the applicant the sum of $321,750 and to the first respondent $3,250.
CONTRIBUTIONS OF THE PARTIES
In Mallet v Mallet (1984) 156 CLR 605 at 636 Wilson J considered the approach to assessing the contributions of the parties but in particular the extent to which a court could assume parties’ contributions should be considered as equal:
However, equality will be the measure, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal. The quality of the contribution made by a wife as homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. She may be an admirable housewife in every way or she may fulfil little more than the minimum requirements. Similarly, the contribution of the breadwinner may vary enormously and deserves to be evaluated in comparison with that of the other party. … It is a wide discretion which requires the court to assess the value of that contribution in terms of what is just and equitable in all of the circumstances…
The parties commenced cohabitation in early 2000 and were married in 2014. The parties separated in November 2017 after a period of 17 years of cohabitation. There are two children of the marriage.
It is agreed that the parties commenced their married life with little by way of assets of value.
At the commencement of their relationship in 1999, the first respondent was working as a health professional whilst studying and whilst the applicant was employed on a casual basis, she was studying to complete a bachelor degree.
The applicant completed her degree in 2000 and commenced employment as a professional assistant.
The first respondent purchased the Suburb JJ property on or about 28 April 2000 by way of a modest deposit and a significant bank loan.
The parties worked cooperatively towards the renovation and improvement of the Suburb JJ property which was then utilised as a rental property until the year 2002 when it was sold. The first respondent obtained employment with a XX Business chain in Melbourne. The applicant obtained employment as a coordinator.
As discussed, the first respondent purchased the Suburb LL property, funded principally by a bank loan. Again, the parties undertook renovations and improvements to the property.
The respondent obtained employment with a XX Business chain in Europe. In November 2002 the parties moved to YY City. The applicant obtained employment as a secretary.
The parties returned to Australia in 2004 with the applicant obtaining employment as a coordinator and the first respondent resuming employment as a health professional.
In December 2004 the first respondent purchased the Suburb NN property, again, with a modest deposit and substantial bank loan.
In 2008, the Suburb LL and Suburb NN properties were both sold with the net proceeds of sale used towards the purchase of the Suburb W property.
It is readily apparent that the partnership between the first and fourth respondents set up to run the AA Business was unsuccessful.
The applicant considers that the first respondent’s conduct was so fiscally irresponsible that the Court should consider he wasted the assets of the parties but in particular the level of available equity in the Suburb W property.
It is a feature of the financial arrangements between the parties that the first respondent was secretive as to financial decisions that were made.
The first respondent frankly concedes that he did not tell the applicant of his misappropriation of funds from B Pty Ltd and in particular she was not informed of the decision of the first and fourth respondents and their uncle.
It is an important consideration that the handwritten agreement entered into by each of the parties in 2017 contained a deliberate misrepresentation by the first respondent as to the availability of the sum of $325,000 which had been paid to B Pty Ltd at settlement of the Suburb W property.
But for the first respondent’s egregious conduct in his theft of money from the account, the contributions of the parties are equal even though the AA Business was unsuccessful and the parties suffered significant financial debt as a result.
It is difficult to determine an appropriate level of adjustment for the contributions of the parties in circumstances where the pool is modest.
The task of determining an appropriate outcome must have regard not just to an arbitrary percentage adjustment but to the resultant dollar value.
The Court was not assisted by the submissions of counsel but when considering the contributions of each of the parties, overall I consider an adjustment of 55/45 in favour of the applicant to be an appropriate outcome.
SECTION 75(2) FACTORS
The applicant is in full-time employment and earns approximately $70,000 per annum as a manager. The respondent is currently employed as a sole trader working as a professional. There is no agreement between the parties as to the first respondent’s income.
As considered, the Court can place no reliance on the first respondent’s Financial Statement. The document is demonstrably inaccurate and I find that where there is uncertainty in the first respondent’s Financial Statement, it is as a result of deliberate conduct by him to obfuscate the evidence.
The first respondent’s evidence was unreliable and the Court can place little or no confidence in his representations as to his current financial situation.
The first respondent admitted to a history of misappropriation from B Pty Ltd but effectively the financial resource of his parents.
The first respondent was deliberate in not disclosing to the applicant the circumstances that allegedly underpinned the claim of the second to fifth respondents in support of the caveat placed over the Suburb W property.
The first respondent, together with the fourth respondent, determined that his family should be preferred over the interests of the applicant.
The inability of the applicant to understand the current financial circumstances of the first respondent resonates in the likelihood that the current assessment of child support payable by him has been adversely affected by his ongoing and deliberate nondisclosure.
As matters have transpired, the applicant seeks an adjustment of 65 per cent of the asset pool in her favour. I suspect that her claim is modest.
I have considered the legal fees of the parties and it is a trite observation that even on the applicant’s claim at its highest, her legal fees will consume a significant proportion of the settlement funds available to her.
The majority of the fees incurred arise from the first respondent’s deceptive behaviour and in concert with the fourth respondent, their intention to remove almost the entire balance of the net proceeds of sale of the Suburb W property which should have been payable to the applicant given her 99 per cent interest.
As between the parties, the net proceeds of sale of the Suburb W property would barely have justified commencing litigation. Even the most cursory attempt at mediation would likely have borne a settlement.
The applicant’s legal fees are a relevant s 75(2) factor to be brought to account.
The diminution of the asset pool, the incurring of unnecessary legal fees by the applicant, the egregious conduct of the first respondent and as a result of the deliberate nondisclosure by the first respondent of his current financial circumstances, the likelihood of there being a reliable child support assessment made in a small pool would speak to a significant adjustment.
I propose to adjust the property of the parties including their superannuation entitlements in line with the applicant’s orders sought, namely a 65/35 adjustment in her favour.
The superannuation entitlements of the parties are modest and in circumstances where neither party seeks a superannuation splitting order, I propose to adopt a single pool approach and to apply the adjustment accordingly.
Given that the total pool including the amount of $325,000 is $456,285, at 65 per cent the applicant is to receive $296,585. The applicant retains property and superannuation to the sum of $33,138. I propose to order that the second to fifth respondents do cause the sum of $263,447 to be paid to the trust account of the applicant’s solicitors within 30 days of these orders.
The first respondent is entitled to receive $159,669. He retains property and super to the sum of $98,147. He is entitled to receive a further $61,552 from the second to fifth respondents.
THE CURRENT POSITION OF THE FIRST RESPONDENT
It is conceded by the first respondent that the dire financial circumstances of the parties and the principle focus of the litigation is as a direct result of his misappropriation and theft of money from the accounts of B Pty Ltd.
It was not necessary for the Court to determine with precision the amount that the first respondent stole from the B Pty Ltd’s accounts but it is acknowledged by him and the second to fifth respondents that the figure was significantly in excess of the sum of $325,000 repaid to B Pty Ltd.
For reasons not enunciated, but presumably as a result of the familial relationship between the first respondent and his family, a decision was made not to involve a police investigation and potentially a charge being laid.
Presumably, a decision not to seek to have the first respondent charged for larceny or misappropriation of funds was made consequent upon the first respondent’s complicit conduct in the misrepresentations made to the applicant with the intended outcome that she would not warn the caveat or further investigate the purported basis of the equitable interest claimed by the second to fifth respondents.
The first respondent readily admitted the dishonesty and deceit of his conduct to the detriment of the second to fifth respondents but in particular the applicant.
The conduct of the first respondent was well outside of the general ambit of conduct expected in proceedings of this type.
The adverse impact of the first respondent’s conduct and behaviour is not ameliorated by his frank admission of his dishonesty in circumstances where it was part of a strategy to disadvantage the applicant in favour of his family.
I propose to order that a Judicial Registrar of this Court refer the papers to the South Australian Director of Public Prosecutions to consider whether there should be a formal investigation into the first respondent’s behaviour as to whether he has committed a criminal offence.
I make orders as appear at the commencement of these reasons.
I certify that the preceding two hundred and forty-eight (248) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 24 November 2021
SCHEDULE OF PARTIES
ADC 1721 of 2018 Respondents
Fourth Respondent:
MR D STAVRI
Fifth Respondent:
THE LEGAL PERSONAL REPRESENTATIVE FOR THE ESTATE OF MR E STAVRI
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