The Legal Representative of the Estate of Hule & Butler & Hule
[2022] FedCFamC1F 38
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
The Legal Representative of the Estate of Hule & Butler & Hule [2022] FedCFamC1F 38
File number(s): SYC 3774 of 2016 Judgment of: HENDERSON J Date of judgment: 7 February 2022 Catchwords: FAMILY LAW – PROPERTY – PRACTICE AND PROCEDURE – where the wife passed away during the proceedings – application of s79(8) of the Family Law Act 1975 (Cth) – finding that a property adjustment would have been made had the late wife not passed away.
FAMILY LAW – PROPERTY – consideration of what constituted the matrimonial pool – overwhelming contribution by deceased wife and the estate to the current value of the assets – husbands failure to disclose current value of his overseas assets and generally – adverse inference drawn.
Legislation: Family Law Act 1975 (Cth) ss 75(2)(na)-(o), 79(2), 79(4) 79(8) Cases cited: Butler & Hule [2018] FamCA 338
Meddow& Estate of the Late Ms Meddow [2015] FamCA 1182
Neubert (Deceased)& Neubert & Anor (No 2) [2017] FamCA 829
Division: Division 1 First Instance Number of paragraphs: 169 Date of last submission/s: 9 December 2021 Date of hearing: 7-9 December 2021 Place: Sydney Counsel for the Applicants: Ms Gillies SC Solicitor for the Applicants: Newnhams Solicitors Counsel for the Respondent: Mr O’Reilly Solicitor for the Respondent: The Norton Law Group Lawyers ORDERS
SYC 3774 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BUTLER, LEGAL PERSONAL REPRESENTATIVE OF THE ESTATE OF MS HULE
First Applicant
MS BUTLER
Second Applicant
AND: MR HULE
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
7 FEBRUARY 2022
THE COURT ORDERS THAT:
1.That the Estate of the late Ms Hule (“the Estate”) pay to the husband the sum of $390,910 within 30 days less 50% of the fees set out in Orders 4(a) and 4(b), the sum of $3,118.65 to the Independent Children’s Lawyer being the husband’s share of the ICL’s costs and the sum of $3,650 in arrears of child support payable by the husband to the Estate.
2.A declaration that the remaining assets form part of the estate of the wife and are to be placed into the Trust named The Estate of Ms Hule, for the benefit of the children of the marriage G, born 2010; H, born 2012; and J, born 2015 as soon as practically possible.
3.Thereafter all assets in the husband and the Estate’s control are declared to be their property absolutely including money in any bank account or superannuation account.
4.That within 14 days of these orders the Estate shall cause the following fees to be paid from the controlled monies account held by the Estate:
(a)Expert fees of Mr P for expert reports prepared for trial; and
(b)Expert fees of Dr Q for expert reports prepared for trial.
(c)Ms Butler’s (“the maternal grandmother”) portion of the ICL’s costs, as agreed to be paid by the Estate with repayments by the maternal grandmother to the Estate to be as determined by the Estate.
5.The Motor Vehicle 1 owned by R Pty Ltd is to be transferred to the ownership of the maternal grandmother forthwith.
6.The executor of the Estate, Mr Butler, is authorised to carry out all acts necessary including signing all documents necessary in order for the Estate to comply with these orders.
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 Hule & Butler is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
This is an application by the Estate of the late Ms Hule (“the Estate”) for final property orders. The respondent husband is Mr Hule (“the husband/father”). The late wife, Ms Hule (“the wife”) passed away during the proceedings in 2017.
On 7 February 2018 the maternal grandmother, Ms Butler (“the maternal grandmother”), filed an Initiating Application seeking parenting orders in respect of the three children of the marriage; G, born in 2010; H, born in 2012; and J, born in 2015.
The parties settled final parenting orders during the hearing and orders were made on the 8 December 2021 that the children are to live with their maternal grandmother; that she is to have sole parental reasonability, and that the father is to spend 3 occasions of supervised time with the children and have Skype communication with them.
On 5 June 2018, orders were made appointing Mr Butler (“Mr Butler”), the wife’s brother, as legal personal representative of the wife’s estate.
Probate of her estate was granted on 8 May 2018. Mr Butler is the Executor/Trustee of the Estate and the beneficiaries of the Estate are the husband and wife’s three children. This dispute is between the father and his three infant children in reality.
Ms Gillies of senior counsel represented the first and second applicants and Mr O’Reilly of counsel represented the husband.
The material read was as follows.
For the husband:
(a)Affidavit of Mr Hule filed on 16 September 2021;
(b)Affidavit of Dr S filed on 3 December 2021;
(c)Affidavit of Dr T filed on 29 November 2021;
(d)Financial Statement of Mr Hule filed on 21 June 2021;
(e)Affidavit of Ms U filed on 16 September 2021;
(f)Exhibits 1-6;
(g)Tender Bundle; and
(h)Counsel’s case outline
For the Estate:
(a)Affidavit of Ms Butler filed on 8 February 2021 and 10 November 2021, together with annexures;
(b)Affidavit of Mr Butler filed on 8 February 2021 and 15 November 2021, together with annexures;
(c)Joint Balance Sheet;
(d)Financial Statement of Mr Butler filed on 8 February 2021;
(e)Affidavit of Mr V filed 15 February 2021;
(f)Single Expert report of Mr P filed on 10 March 2021;
(g)Expert Report of Dr Q filed on 13 March 2020;
(h)Tender Bundle;
(i)Exhibits 1-8; and
(j)Counsel’s case outline
CHRONOLOGY OF EVENTS
In 1970 the husband was born in the United Kingdom.
In 2004 the husband and the wife commenced a relationship in the United Kingdom and commenced living together in 2005. In 2006 they moved to Australia.
In April 2006 the wife commenced a business, R Pty Ltd (“RPL”).
In mid-2007 the wife and husband purchased a property at W Street, Suburb X (“the Suburb X property”) for $805,000 with a mortgage of $630,000 funding the shortfall from assets and savings.
In 2008 the wife and husband marry and in 2010 their first child, G is born.
On August 2010 the wife purchased a commercial property at Y Street, Suburb Z (“the Suburb Z property”) for $390,000 with a loan from the CBA for $270,000 the shortfall being funded from the sale of shares in the wife’s name and the parties savings. RPL commenced operations out of these premises and continues to do so today.
In 2012 the second child, H is born.
In 2012 a workplace sexual harassment claim is made against the husband and the parties resolve it by a payment to the victim.
In November 2013 the wife and husband sell the Suburb X property for $1,111,000 and purchase the former matrimonial home at AA Street, Suburb BB (“the Suburb BB property”) for $1,380,000 with a mortgage of $825,000 funding the shortfall of the purchase price together with stamp duty from savings and income.
In 2015 the third child, J is born.
In March 2016 the wife and husband separate, with the husband vacating the former matrimonial home.
In March 2016 and almost immediately upon separation the husband cancels the husband and wife’s respective life insurance policies.
On 19 April 2016 the wife obtains her own life insurance policy.
On 16 June 2016 the husband commences proceedings seeking interim and final property and parenting orders.
In 2017 the wife passes away and the maternal family care for the children at the former matrimonial home.
On 10 November 2017 the husband does not return the children to the maternal family as agreed. He demands the maternal family leave the former matrimonial home. They do so and the children live in Sydney with him and he changes their schools and day care to Suburb CC.
The home remains vacant until its sale 12 months later.
In late January 2018 the police take out an ADVO against the husband on behalf of Ms DD, his then partner, and charge him with assault. The husband pleaded guilty and was sentenced to a two year ADVO and placed on a good behaviour bond.
In mid-January 2018, J sustains a dislocated shoulder, fractured wrist and broken clavicle whilst in the care of the father. J was taken to M Hospital. The hospital notes say as follows:
15 January 2018: dad not coping. Lots of staff around. Knows about clavicle. No answer as to what happened. Doctor’s impression that he’s not coping,[father] is aggressive. Assume a fall from a great height. Very rare injury. History of injuries vague/ unclear. Father presented ‘manic’ at times during the interview and was not showing concern or worry about the injury, he was very focused on being friendly to staff and other help employees at the hospital.
16 January 2018: Two injuries are unusual - that require a lot of force. He is not answering questions.
17 January 2018: Bruises more than expected of normal age.
On 12 March 2018 the husband takes J to their general practitioner, Dr L, for a yellow discharge from her right eye.
On 13 March 2018 the husband is issued a notice from the Department of Communities and Justice (“the Department”) to take J to the doctor for the production of a report.
On 14 March 2018 the husband takes J to Dr L. The notes citied in Dr L’s report to Ms N, case worker with the Department of Family and Community Services, dated 14 March 2018, provide as follows:
…When asked about J’s left-shoulder fracture she sustained previously, he told me that her sister, pushed J over a few steps, and she had a fall…
Examination: …[J] had a closed right eye with suppuratives discharge. When I approached her to open it she refused and winced. And she pushed my hand back and started to cry. I could not open her eye [as it distressed her]. I noticed bluish-yellow bruises on her right cheek, arranged in a horizontal line, and another one above the right eyebrow. She had two right upper arm bluish-yellow bruises. She also had two more bluish-yellow bruises on her right upper back. She had three more bluish-yellow bruises on her left upper arm, which were swollen above the left elbow, and had an operative scar at the left shoulder, denoting a previous surgical procedure. She had two left leg bluish-yellow bruises.
Dr L was concerned that the husbands’ explanation for bruising of the child, being her leaning on a table would not cause the bruises and injuries he observed. He cited in his report to Ms N that:
I think J was harmed and I consider that she could be at risk of further harm. The multiplicity of her bruises with no plausible explanation and significant trauma to her left shoulder - needing open reduction and internal fixation, would worry me. I recommend further assessment and treatment by a paediatrician - with expertise on child abuse, as soon as possible... I expressed my concern to the [husband] and asked him if someone was abusing her… He indicated he has a friend who has access to [them, and they] might be abusing her, but he was not sure”.
In early 2018 the police investigation commences in respect of J’s injuries.
On 21 January 2018 Mr Butler receives a call from Ms DD where she tells him she holds grave concerns for the children and the father’s mental health.
On 7 February 2018 the maternal grandmother commences parenting proceedings.
On 28 March 2018 the matter is listed for an interim hearing before Deputy Chief Justice McClelland where he determines the children should be in the care of their maternal grandmother and noted that they are at risk of harm in the husband’s care. In his decision his Honour states at [31]:
I am of the view there is such a plausible possibility that the injuries to J were caused by the [husband] and/or a person who the [husband] referred to as “a friend” having access to his children. In either event, there is a concern about the children remaining in the care of the [husband]. It is my view J is at an unacceptable risk of injury and neglect in the care of her [husband].[1]
[1] Butler & Hule [2018] FamCA 338
On 29 March 2018 the children return to the maternal grandmother and she notes they have bruises and worms. J had numerous bruises, a visible injury to her eye at changeover, and the grandmother immediately takes her to M Hospital that day. J was taken to surgery and remained in hospital for 10 days. J sustained permanent damage to her left eye.
On 17 April 2018 the children and the maternal grandmother travel to Suburb EE to live and the children are enrolled in FF School and GG Day Care and they have remained in that area since that time.
On 8 May 2018 probate is granted for the estate of Ms Hule.
In May 2018 Mr Butler ascertains the husband has listed the former matrimonial home for sale without the knowledge or consent of, the executor of the Estate, and he had attempted to lodge a notice of death for the property to be transferred into his sole name.
On 30 May 2018 Mr Butler files an application to be appointed a legal personal representative of the Estate and seeks to injunct the husband from selling the home.
On 25 July 2018 the wife’s Super Fund 1 of $136,277 is paid to the Estate, which is deposited into the controlled monies account held by Newham’s Solicitors.
In 2018 Mr Hule and Ms U meet in person and commence a relationship. They married in an Islamic ceremony in 2018 and a civil ceremony a few months later.
On 25 October 2018 the wife’s JJ Company life insurance pays the sum of $825,000 to her estate and this money with the $15,000 death benefit from JJ Company is deposited into the controlled monies account.
On 11 November 2018 the former matrimonial home is sold for $1.6 million. Settlement occurred on 23 January 2019 and the net proceeds after payment of the mortgage and costs of sale are $549,000.
After interim property distributions to the husband of $199,400 and of some $72,000, the sum of $178,411.33 is deposited into the controlled monies account.
A further sum of $124,865 is deposited into the controlled monies account on 1 November 2018 being the deposit on sale less the agent’s commission.
As at 30 July 2020 there was some $1,278,811 in the controlled monies account and the following were deposited into the account.
(a)the ultimate net proceeds of sale of the home of some $281,347 after disbursements to the husband and the maternal grandmother and other associated costs;
(b)Closure of wife’s various bank accounts and interest on deposits with CBA of $14,254;
(c)JJ Company Life Insurance $825,000 and death benefit some $15,000; and
(d)Wife’s Super Fund 1 superannuation $136,277.
On 18 November 2018 Dr Q is appointed as single expert. The Family Report is released on 14 May 2020.
In late 2018 Mr Butler’s wife, Ms KK, is interviewed by police following an anonymous complaint that Mr Butler and Mr LL, the wife’s partner, were sexually abusing the children.
In 2019 MM, the husband’s son, is born, currently aged 2.
In December 2020 G is diagnosed as being on the autism spectrum and may meet the criteria of deficits in attention, motor control and perception.
On 16 February 2021 concerns are raised by husband’s lawyers as to his capacity to provide instructions and the hearing date of 1 March 2021 is vacated.
On 20 March 2021 Dr T provides a report that the husband has capacity to give instructions, but recommends treatment by a psychiatrist.
On 2 August 2021 the matter is listed for trial on 3 December 2021.
THE JOINT BALANCE SHEET
ASSETS Ownership Description Agreed Value 1 Estate R Pty Ltd $210,517 2 Estate Commercial property at YY Street Suburb Z $600,000 3 Estate Balance of monies in the controlled monies account $1,013,153 4 Estate CBA account ending #...37 as at 07.10.2021 $1,413 5 Estate Funds in Newnhams Solicitors Trust Account $9,606 6 Estate Arrears of child support owed by the husband $3,650 7 Estate Loan payable to the Estate from RPL $51,483 8 Husband NN Bank bond of as at 2016 GBP1,014
equivalent of $1,877Total $1,891,699
The husband has three HH Bank accounts and an ANZ account which were acquired post-separation and ought not to form part of the pool. This is also the position in respect of the sum of $1,413 in the Estate’s account.
ADDBACKS/SECTION 75 ADJUSTMENTS Ownership Description Wife’s estimated value Husband’s estimated value 1 Husband Interim property orders made 22.01.2019 to PP Lawyers (husband’s prior solicitor) $125,000 2 Husband Interim property orders made 22.01.2019 for debt owed to QQ Real Estate $4,400 3 Husband Interim property orders made 22.01.2019 to Mr OO (husband’s prior solicitor) $65,000 4 Husband Pursuant to orders made 22.01.2019 for purpose of facilitating supervised time $5,000 5 Estate Interim property orders made 22.01.2019 to Newnhams Solicitors $65,000 6 Estate Pursuant to orders made 22.01.2019 for purpose of facilitating supervised time $5,000 7 Husband Pursuant to orders made 23.06.2021 for payment to maternal grandmother of arrears of child support $12,641 8 Husband Interim property orders made 23.06.2021 for legal costs and disbursements $53,515 9 Husband Pursuant to Orders 30.06.21 (for purpose of
facilitating supervised time)$5,000 10 Husband Pursuant to Orders 30.06.21 (for purpose of
husband's psychologist/psychiatric treatment)$12,420 11 Estate Interim property orders made 23.06.2021 for legal costs and disbursements $160,000 12 Husband Cars sold and funds given to Ms U to
purchase new car in her name$21,000 $0 13 Husband Insurance payout 2020 $27,000 Total $560,976 $512,976
The legal fees paid on behalf of the Estate from the controlled monies account are some $230,000 and for the husband some $280,000. The husband also received an insurance payout in 2020 of $27,000 and sold cars acquired during the relationship for $21,000. In total, the sum of $512,976 has been dispersed from the controlled monies to the husband and the Estate for legal fees and other amounts such as supervised contact fees and treatment for the husband.
The maternal grandmother has the use of the wife’s former car owned by RPL, a Motor Vehicle 1 worth some $29,000. That car is to be transferred to the grandmother. I note it is an asset of the wife’s business and was included as such in the valuation.
I will not add these monies back to the pool as to do so would artificially inflate the pool. However, it is highly relevant to my decision to have regard to the monies that have been provided to the husband, the Estate and the maternal grandmother.
LIABILITIES Ownership Description Wife’s estimated value Husband’s estimated value 1 CBA Loan (Suburb Z Property) as at 07.10.21 $31,134 2 Estate CBA Mastercard $2,909 3 Estate Funds owed to Centrelink $201 5 Joint Expert fees for attending cross-examination at final hearing $10,000 NK Total $44,244 $34,244
The CBA loan in respect of the Suburb Z property was $200,000 at separation. At the wife’s death, the loan was $172,473. Currently under the stewardship of Mr Butler it has been reduced to $30,995. I will not take into account capital gains tax if the Suburb Z property is sold. The evidence was to the contrary. Mr Butler is keen, if at all possible, to keep the company operational as he has done since his sister’s death.
The expert’s fees for attending court to give evidence are unknown, but I will make an order that they are to be paid equally between the husband and the Estate from the matrimonial pool prior to distribution to the parties. I note those costs will not amount to more than $10,000.
SUPERANNUATION Ownership Description Wife’s estimated value Husband’s estimated value 1 Estate Wife’s Super Fund 1 2 Husband Super Fund 2 as at 30.06.2021 $308,500 3 Husband Super Fund 3 (estimate for 10 years) $150,000 $15,000 Total $458,500 $323,500
The wife’s superannuation has been cashed in and forms part of the pool of assets for division. The husband currently has an Australian superannuation interest in Super Fund 2 of $308,500 and a UK Super Fund 3 which has not been valued by him, and for which he did not provide sufficient information to allow the Estate to value it either. He asserts it is valued at $15,000. The Estate asserts the value is $150,000, being its current value to him of $15,000 a year amortised over 10 years.
I was urged to adopt this method of valuation as the husband has failed to provide any information of the current value of his current N Bank bond, nor a valuation of his UK Super Fund 3, and without his co-operation the Estate could do little. I was urged to draw an inference that it would not have been in his interests to provide any updated information of the value of these assets or co-operate in having them valued given he was the only party able to find out this information.
The husband reiterated in his affidavit he had GBP30,000 in a UK state pension fund at cohabitation in 2004, yet in the balance sheet asks me to accept that the value of that fund today is $15,000.
Further in the husband’s financial questionnaire, marked Estates Exhibit 1, the husband said he had GBP70,000 at the commencement of the relationship, in line with the wife’s financial questionnaire, and a pension worth GBP40,000.
It is clear this pension is a valuable asset which he has chosen not to have valued nor has he even provided an updated document in respect of its value. As set out in Estate’s Exhibit 2, on 13 June 2017 the English pension he was entitled to as at 28 December 2017 was effectively GBP160 a week. That is the most up to date information provided by the husband on this asset which is an important resource.
On these facts I find that evidence of the current value of his British pension would not have assisted his case and I will draw that inference. I note that he has also failed to disclose all relevant financial information in accordance with his obligation under the Family Law Act 1975 (Cth) (“the Act”) such as tax returns and this consequence of such a serious dereliction of his obligation at law lays at his feet not at the feet of his legal representatives or any other person.
I will take into account that the husband is seized of this pension in my deliberations but will not include it in the balance sheet as its value is unknown.
The husband has a financial resource in his wife, Ms U, who is fully supporting him, and has lent him in excess of $300,000 to fund this litigation.
Both parties, being the husband and Ms Butler, have agreed to pay $3,118.65 to the Independent Children’s Lawyer. I will order the Estate to pay this money on behalf of and it can be paid back by her as the Estate determines.
HUSBAND’S EVIDENCE
The husband’s evidence was extremely difficult to reconcile with the actual facts at times. At times the husband’s evidence was inherently unreliable, either because he was not telling the truth, or because of his paranoid, delusional functioning, as described by his psychiatrist Dr S.
The husband continued to assert in his affidavit and orally that when he came to Australia he had GBP80,000. The wife’s financial questionnaire, completed in 2017, said he had GBP70,000 and his financial questionnaire said the same. Ultimately, the husband had to agree that he had GBP70,000. This is not an insubstantial sum. However it is but one example of the wife being the more accurate historian than the husband as the evidence that follows will substantiate.
The husband asserted that RPL was established in 2005 by him and the wife. The company was certainly established during the marriage. The husband’s evidence at paragraph 123 of his affidavit filed 16 September 2021, “I supported [the wife’s] decision [to set up RPL],” is accepted by me. I accept they discussed matters of setting up the business, where they would be located, but he had a full time job and clearly it was his former wife who was the moving party in setting up this profitable business for them.
It was a company solely in the wife’s name, she being the sole director and shareholder, and ultimately the Suburb Z property was purchased solely in the wife’s name and she ran the company solely.
This is not a criticism of the husband for at that time the husband was working at M Hospital full time and his evidence was he left home about 7.30am and got home, he said, at 5.30pm, but perhaps later. The husband’s assertion of the time, effort and energy he put into the wife’s’ business are not accepted by me given he too was working full time. I accept each of them were working to their maximum capacity in their various roles and occupation and as the wife supported the husband’s work, so did the husband support the wife. However it was the wife and not the husband who made the substantial contributions to the success of her business.
The husband asserted he had given a guarantee when the Suburb Z property was purchased. That was a falsehood. There was no guarantee in any of the records produced by the parties. I accept the husband agreed to permit the then equity they had at the Suburb X property to assist the wife to purchase the Suburb Z property, however, there was no guarantee as such provided by him.
At the death of the children’s mother they were aged two, five and seven. The husband initially agreed for the maternal family to remain in the home so the children could come to terms as best anyone could with such a significant loss in their life. The husband caused the maternal family to be ejected from the home shortly after the wife’s death and would not permit them into the home. He then sought to sell the home, and it was not until 12 months after he ordered the maternal family and the children in reality to leave the home, that it was sold. It is a mystery to me why the children could not remain in their home after having suffered such a loss until it was an imperative to sell the home. It was vacant for 12 months before it was sold and it fell into disrepair. This is a matter the husband did not agree with however I accept this is correct. This is not the conduct of someone who has the children’s best interests at heart.
The evidence given by Mr Butler, the executor of the Estate, was clear, cogent and accurate. He recalled conversations that he had had with his sister in 2006 and 2007 where she said she was concerned about funding a deposit to purchase the property at the Suburb X property, and he advised her to get her finances in order to be able to purchase this property. The wife was concerned how she would get the deposit, and she discussed with her brother selling part of a share portfolio she had at the commencement of the relationship of some $34,000 at that time to assist in that endeavour.
I accept that the husband put whatever was left of his GBP70,000 brought to Australia in 2006 to assist, as did the wife, with funding a deposit for the purchase of the Suburb X property. Whether it was the GBP70,000, $160,000, or a lesser sum, I do not know. It was within the power of the husband to obtain that information, and he simply did not. Yet in his affidavit he disputes that the wife sold shares to fund the deposit, when it is clear that is what happened as follows.
The Suburb X property was purchased for $805,000. I accept that the husband was working full time when that property was purchased, at M Hospital, and the parties borrowed $630,000. The purchase price was $805,000. There was a shortfall of $175,000. Stamp duty was paid of some $30,000, and the shortfall is then approaching $205,000. Even if the husband still had the GBP70,000 he brought over from England, equalling $160,000, taking $160,000 from $205,000 being the monies they needed to make up the difference is still a shortfall of $45,000 which was clearly made up by the wife’s shares, and their savings post moving to Australia. There would have been legal fees and other expenses as well to pay on the purchase.
Thus again, the husband’s statement in his affidavit filed on 16 September 2021, at paragraph 120, “I brought GBP80,000 in cash over with me to Australia… We used the funds to purchase [the Suburb X property] for $800,000…The balance of the purchase price was funded by way of a mortgage to the Commonwealth Bank of Australia” is incorrect.
Giving the husband a full credit of $160,000 still gives the wife a credit of $45,000 to purchase this property from pre-relationship assets.
Mr Butler’s affidavit, at paragraph 13 was clear. He and his sister discussed how she and the husband would purchase the Suburb X property. When cross-examined about the discussions, his evidence was as follows. The wife said words to the effect of “I’m concerned about how we are going to fund the deposit”. Mr Butler responded “what funds do you have available to you”. The wife then replied that “she had some funds and some money in shares”.
Mr Butler’s evidence was that the wife was also concerned with how she was going to fund the start-up costs of the business and that when she asked Mr Butler whether she could get a bank loan, he said to her, “highly unlikely as a bank will not provide a loan unless the business has been operating for a minimum of three years with healthy financials”. The wife then said to him that “she didn’t want to get a loan or get a loan off family, she wanted to do things in her own way in terms of being able to fund it herself”. In response to this, Mr Butler suggested to the wife that she sell her shares, and use her savings, and the wife responded, “that is the way she’ll have to go”. I accept this evidence entirely and it is consistent with the facts.
When it came time to purchase the Suburb Z property, the wife discussed again how she would fund the purchase of that property with her brother. Again in cross-examination, Mr Butler recounted saying to his sister, “how are you planning on purchasing the Suburb Z property?” and his sister said to Mr Butler something like, “basically from business savings and her income”. This was around mid-2010 and I accept that the Suburb Z property was funded from their savings and the equity the husband and wife would have had in the Suburb X property.
The Suburb X property was sold in November 2013 for $1,111,000 and the husband and wife funded the purchase of the Suburb BB property for $1,380,000 with a mortgage making up any shortfall from income and savings.
Mr Butler was clear. He recalled vividly his sister speaking to him about how she was going to pay for the legal fees of the husband’s sexual harassment claim in 2012. Mr Butler’s evidence was that “she said to me she was very concerned how she was going to fund the legal expenses and that she was going to have to try and work something out and pay for it out of her own savings for the legal cost of the sexual harassment claim against [the husband]”. It is clear the maternal family were a close family. The wife, her brother and her family saw each other two or three times a week.
Mr Butler was also clear that his sister had said to him in the past, “[The husband] has had no involvement in the business because he has no idea how to run a business”. Mr Butler confirmed that this must have been true, because when he took over running the business as a non-executive director after his sister’s death, only one person in that company, Ms RR, the business manager following the wife’s passing had met the husband, knew of the husband or heard of him. None of the other six or so employees had ever met the husband.
Ms RR, asked Mr Butler if the husband was trying to take over the business and he replied, “knowing [the husband], he would most likely try to”. Mr Butler said the other employees being, Ms TT, Ms RR and Ms VV were outraged because he had never had any involvement in the business and they never heard from him, or even met him. Mr Butler said “The other employees are Ms TT and Ms VV. Ms RR probably has met [the husband] because she has been there 10 years. But Ms RR said that she has never had a business discussion with [the husband]”.
Mr Butler also said, “Since I have taken over as director on not one single occasion has [the husband] contacted me”. I accept this evidence and it is consistent with the facts and how the wife held her interests in her business and the Suburb Z property.
The husband said that he was involved in the day-to-day running of RPL. He could not have been. In 2009 when it commenced, and up until separation, he was working in his own full time job. Of course he assisted the wife as best he could, as she assisted him. But he was not involved. The husband admitted that there has been a contribution by the maternal family to the value of the RPL business and its functioning. When was asked if he was up to running the business after separation, he responded, “Yes. I’ve been in allied health for over 30 years and I’ve helped in the [inception] of the business through to supporting other speech pathologists run their business and grow their business, such as UU Company, one of the main competitors and other ones”. The husband has never run any business and is incapable of doing so and I reject any assertion that he could.
The husband said he knew more people than Ms RR at RPL but could not name them. When he was asked whether he knew that his involvement in RPL was a fact in issue and whether he brought a document to the court to assist the Court to accept his evidence, he just said “no, I thought it would stand up, what I recounted”. What the husband recounted about the business and its day to day running was nothing at all.
The matrimonial home was in a poor state of repair at sale some 12 months after the husband insisted that the children and the maternal grandmother vacate the property. I accept Mr Butler’s evidence that he saw the pool black, the gardens overrun, furniture removed from the home, unkempt and untidy. The poor state of the home is confirmed by real estate agents letters and exhibits attached to Mr Butler’s affidavit filed 8 February 2021. All three agents who viewed the property said the pool needed attention and some purchasers had been put off by the state of the pool. At Exhibit L commencing at page 187 of Mr Butler’s exhibits to his affidavit, is a very comprehensive list of comments of all the purchasers who went through the Suburb BB property. The purchasers commented variously as follows :
Ms SS: ...recognised the home would benefit from some cosmetic renovations…
Ms AK: …the AA Street […], the parties’ property, needs a huge amount of work, and this should be reflected in the price…
Ms YY: …the home had enormous potential, however, the extent of the work to be completed was more than they were capable of taking on their budget...
Mr XX: …main concern was the damp smell in the under the house storage area and garage region, which he believed would require considerable work…
Mr WW: …the home needed a considerable amount of cosmetic renovation, and they showed concern for the state of the pool. They are unsure if they want to take this level of work on…
Mr ZZ: …house needed too much work to modernise it…
Mr AB: …concerned with the amount of work that the property required to renovate the property and he want to buy a home in good condition…
Ms AD: …the condition of the home is not ideal and there is too much work [to be done].
Ms AC: …home needs a lot of work to be done.
Ms AE: when arrived at the home, the garden was in a mess and the home needed too much work for her.
Ms AG: …too much work for them to get the home [into a reasonable state, and continuing].
It was clear the husband did not maintain the home yet ejected his children and the maternal grandmother from the home, for reasons best known to himself. I accept that the poor state of the home arose due to the husband’s choices and I reject his evidence that the home was not in a poor state.
Mr Butler has received the princely sum of $6,000 for his work as a non-executive director which he has taken on since the last financial year, a matter the husband complains about, raising assertions that the company/business has not been well managed and the income etc. is not properly accounted for. This is a modest sum for the work Mr Butler has carried out for over 3 years. The husband should be grateful as Mr Butler has maintained a business now worth $210,000 which provides an income for the support of his children and the business has by its income reduced the mortgage on the Suburb Z property from $172,000 in 2017 at the time of the wife’s death to $31,000.
The husband pays no meaningful level of child support, the sum of $37 a month for three children. Yet the husband raised concerns that the business was not being properly run, that the money was somehow being used to support the Butler’s and their family, that he has been excluded from running the business. I find the husband has no capacity to run the business and that if it was not for Mr Butler, the asset pool would be severely diminished and his children would have had no proper level of support in the past and into the future.
The husband’s behaviour and attitude in relation to child support when he was working was deleterious. At the time of the wife’s death, he was working and he was in arrears of nearly $4,000 in child support which he has never paid. He owed the maternal grandmother $12,000 in child support which was paid from the Estate i.e. his children paid their own child support. The only time he has ever been able to maintain child support payments to support his children is when the husband and the wife were living together, and both working, and $230,000 of their income was used to support the husband’s four children in England. This is a significant factor under section 75(2)(o) of the Act which I will take into account to do justice and equity between the parties, as is the fact the husband ejected the children and maternal grandmother from their home and then let the home deteriorate.
The husband would not concede that the wife’s father provided $100,000 to the parties to enable them to purchase the Suburb X property as the husband had just emigrated to Australia. The husband was taken to a treasury bond dated August 2005 maturing in September 2006 showing the deposit of $100,000 into the Commonwealth treasury bonds to support the husband emigrating to Australia. The parties did not have that money readily available at the time they sought to purchase the Suburb X property. They needed $100,000 from the wife’s father as the money that they had put in to the treasury bonds to allow the husband to emigrate to Australia, was not to be released until after they had purchased the Suburb X property. Clearly they borrowed $100,000 from the wife’s father and this money was repaid by them both
The husband would not concede that point when it is clear that is what happened. This is a supportive family who assists those who are members of their family. This attitude may be part of the delusion and persecutory complex of the husband as referred to in his psychiatrists report by Dr S.
Mr Butler was not particularly forthcoming about a director’s loan of $120,000-odd owed by the Estate to RPL, now paid down to $51,000-odd. However, I accept that this money was used for the benefit of the children, for the husband does not support them. The husband does not work and is supported by his current wife. He has been requested to provide financial disclosure for his HH Bank accounts, CBA bank account, ANZ bank account, and the Motor Vehicle 2 and Motor Vehicle 3 car finance loans, and no information has been provided.
He has not provided disclosure in relation to his UK pension, or the current balance of his UK bank account. The husband has not filed any tax returns, and yet he said he has filed a tax return every year. Two tax returns were received over the weekend prior to the hearing, in a matter which has been ongoing since 2016. The husband did not agree that in 2033 he would, on today’s figures, be entitled to a pension of GBP159 a week. He said that he received a document in 2020, or 2021 from the UK pension and that it was with the person he calls his father who resides in England. No such document was produced.
The husband then gave the most extraordinary evidence as to why he has not produced any of his financial records. He said all his legal documents concerning the money he brought over from England, the details of the property settlement with his prior wife, the mother of his four now adult children, his bank accounts, records of his pension and the like were left with his mum or the person he calls father, in a box, and no one knows where they are. I reject that evidence. He has done nothing because it would not have been in his interests in this case to obtain that information.
His last paid employment was in 2019 at AJ Company as a tradesperson. He was too unwell to continue with his position at M Hospital post the wife’s death. His current wife runs a business, and she is highly successful, and she supports him 100 per cent. The husband was asked during cross-examination, “what about supporting the children you had with [the wife], are you committed to that?” He replied, “yes, very much so”. He was then asked a series of questions. “You don’t send gifts to the children for their birthday”, he replied, “I have in the past”. He was then asked, “you don’t send them Christmas gifts. Pay for school fees?” The response to both these questions were “no”. The husband was then asked “haven’t sent money down for school should have you?” He replied “I gave them (the children) money at the contact centre”.
There is no record in any of the contact centre notes of that having occurred and I reject that evidence.
He has complained about the grandmother’s use of the wife’s car, and has insisted the car be included as an asset of the company at the 2017 value. He begrudges the grandmother’s use of the car, a woman who cares for his children full time, pays for their needs out of her income and support from the Estate including extracurricular activities and G’s specialist medical treatment. It was of concern that he was focussed on the use of the wife’s car by the grandmother.
The $319,000 he says he has received from his current wife to fund this litigation must be repaid as it has been borrowed by her. No objective evidence was tendered to support that assertion or from where she sourced those monies.
The husband said that the money he received from the Estate of $280,000 was used to pay outstanding legal fees, car finance on the Motor Vehicle 2 of around $49,000, and the Motor Vehicle 3 of around $19,000, debts on three credit cards of around $47,000, a CBA personal loan of $18,000, a personal loan from his father of GBP18,000, other small loans from friends, payments for travel to City AK; and medico-legal psychiatry consultation appointment. He provided no documentary evidence to support those payments apart from legal fees.
There is no evidence his father wanted money back, and at the time the husband said he repaid it. He has still not paid the Estate over $3,500 in child support, and nor did he pay the maternal grandmother $12,000 in child support. He does not disclose any documents of the loans on the cars he traded in to purchase a new family car in his current wife’s name were, or what he received on the trade in or what the new family car was worth.
At paragraph 8 of his affidavit filed 16 September 2018, the husband asserts that he did absolutely everything for the children prior to separation as opposed to the wife, despite his evidence that he was also working full time leaving home at 7.30am, not returning home till 5.30pm at best. He asserted he changed their nappies, did bedtime feeds, assisting with the breast pump, reading stories, helping with their homework, preparing dinner, watching TV with them, bathe them, prepare their lunches for the next day, and attending community centre mother’s groups with the wife. He also stated he was taking time off work to care for the children if they were sick, dressing the children and arranging for them to attend activities. The husband was working full time and this evidence is delusional.
At paragraph 9 of the husband’s affidavit filed 16 September 2021, he husband states:
[The wife] would usually be at home taking a weekend break for work. This division of responsibilities between myself and [the wife] had been discussed and agreed when the children were old enough to start these activities. In my opinion, due to [the wife’s] work responsibilities, I took on the greater share of parenting tasks during the relationship.
I reject this evidence. There was not enough time in the day for him to do this and maintain his full time employment. The wife’s business was doing well. The wife was the manager of the business and had an office manager. She had employees who in the performance of their work earnt her income. She was not required to be at work every minute. She had flexibility as a self-employed employee and the husband did not and this is no criticism of him.
On this issue I prefer the evidence put forward by the maternal grandmother, the evidence contained in the wife’s financial questionnaire, and her affidavit filed in these proceedings prior to her death, that she carried out the primary responsibility of parent and homemaker and that the husband assisted her when he was at home, but as he worked full time this responsibility primarily fell to her. That as she worked in her business and had employees she had more flexible hours. That the parents as all parents do when both are working, did their very best in all aspects of their contributions.
The wife took six months off after the birth of each child. That means G was in her full time care for six months. Then when H was born, G had another six months full time care with his mother, and H had her six months full time care. When J was born, G had had 18 months full time care of his mother, H had had 12 months full time care and J had had six months.
The husband had a nine day roster, left the house at 7.30am, returned home at 5.30pm at the best and he did what he could. His affidavit is not accepted by me and his case in relation to his contribution as parent and homemaker being far greater than that of the wife is delusional.
Post-separation, the husband agreed the wife had the predominant care of the children. That she remained in the home; paid all the outgoings, including the mortgage; maintained the property and paid all rates and utilities until her death.
Five days after the wife’s death, which was only 10 days after her diagnosis the husband insisted the maternal family leave the home. The husband was asked during cross-examination, “you in fact told them that they couldn’t stay in the home didn’t you”. The husband said “no”. The follow was then put to him. “But they did get out of the home though didn’t they after [the wife] died”. The husband replied “yes”. He was then asked, “and are you saying that you have no idea why that might been that they vacated the premises”. The husband responded, “I asked them to in the interest of the children”.
The husband caused a letter dated 7 November 2017 to be sent from his then lawyers, PP Lawyers to the Estate and the maternal grandmother. This letter is found at page 3 of the maternal grandmother’s annexures to her affidavit filed 8 February 2021. The letter is as follows:
Our client understands that members of your client’s extended family are presently staying at the former matrimonial home. As the property was held by the parties as joint tenants, the whole of the interest in the property now vests with our client. Our client acknowledges members of your family have travelled from regional areas to Sydney in light of the recent tragedy, and require accommodation while the family make arrangements. In that regard our client proposed the following:
a)That your client’s family members occupy the house until 12.00 pm this Saturday, at which time they will deliver the keys to the property to our client and return to the property.
b)That your client’s family be permitted to remove your client’s personal items from the property, but that all furniture and contents remain as part of the matrimonial asset pool, with a division to be agreed at a later date.
The maternal family complied. The husband did not live in the property, yet wanted his children and the family caring for them out of their home 5 days after the sudden and tragic death of their mother in circumstances where it is clear he was incapable of caring for them as the evidence disclosed. This behaviour is of concern given the tragedy everyone was suffering from.
The husband and wife each had life insurance policies. Upon separation, the husband cancelled them. The wife took out her own insurance policy post-separation with money she earned from RPL, a business she ran with no assistance whatsoever from the husband, other than his initial agreement to allowing the equity in their home to be used as collateral to set up the business.
Further, in circumstances where his failure to pay child support or contribute towards the mortgage would have placed a significant financial burden on the wife making her parenting and homemaking role far more arduous than it needed to have been, I have formed the view that the proceeds of this insurance policy are not a matrimonial asset but a financial resource of the Estate, do not form part of the pool for division and will be taken into account in the ultimate division of the property.
The husband would not admit that the wife had sold all her shares acquired prior to the relationship by the time of her death, and had used this money to set up RPL and support the family. Even when he was taken to the share transfers, buy and sell documents that the Estate had been able to produce on the wife’s behalf, he still would not concede this was the case.
The husband produced no documents to support what his income was during the relationship and I am left not knowing what it was, other than that which the wife said it was in the financial questionnaire, namely some $100,000 per annum.
The husband emptied the home of furnishings and would not admit he had done so saying someone broke into the property. I reject that evidence. He took the furniture and sold it, as he did with the cars. The husband said he went to Suburb Z police about this alleged break in. There was no record from Suburb Z police to verify he had notified them that his home had been vandalised.
He took the children’s old toys, and other personal items they had left at the home when he had made the family vacate. It is clear he did this as he brought some of these old toys, he alleged had been taken by vandals to the contact centre for the children at a later point in time. This is clear evidence that he took what was in the home, sold it and/or kept what he wanted.
THE LAW
The property application in this matter is made pursuant to section 79(8) of the Act which is as follows:
79 Alternation of property interests
…
(8) Where, before property settlement proceedings are completed, a party to the marriage dies:
(a) the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings;
(b) if the court is of the opinion:
(i) that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii) any of the property of the parties to the marriage or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and
(c) an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
It is accepted by all parties and I agree that had the wife not deceased, the Court would have made a property order adjusting the parties’ entitlement to property pursuant to section 79(4) of the Act and I will proceed on that basis.
The issue that then becomes relevant is the application of section 75(2) factors to this matter. I was referred to two cases by Mr O’Reilly of counsel: Neubert (Deceased)& Neubert & Anor (No 2) [2017] FamCA 829 (“Neubert”) and Meddow& Estate of the Late Ms Meddow [2015] FamCA 1182 (“Meddow”). Neubert was a decision of Benjamin J and Meddow, as a decision of Le Poer Trench J.
In both decisions their Honours found it was appropriate pursuant to section 79(8) to make an order for property division under section 79(4) as the Court would have done so had the party not deceased. These are clearly the facts in this matter, and as such the provisions of section 79(2) are also enlivened.
For the reasons that follow, I agree that the wife would have been entitled to a substantial adjustment under section 75(2) of the Act had she not died for at minimum as she would have had the full time care of three young children with virtually no child support being paid to her by their father.
I accept entirely the decisions of both Le Poer Trench and Benjamin JJ that the deceased wife, in their case, had no relevant 75(2) factor adjustments. Importantly in both matters there were no infant children who were being supported by the Estate or a grandparent and not their surviving parent. This is a significant difference in the facts of this matter and those I was referred to.
Section 75(2) of the Act, is a section that a Court must take into account in determining property division under section 79(4) of the Act, and is, relevantly, as follows.
75 Matters to be taken into consideration in relation to spousal maintenance
…
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
…
In exercising jurisdiction, I must take into consideration the following matters in respect of the husband under section 75(2). These are his age; state of health; income; property and financial resources; capacity for gainful employment; that he has a child to support from his new marriage; and that he does not have the care and control of the children of the marriage, as the children are in the care of the maternal grandmother.
That the husband is remarried and fully supported by his current wife, that he has an income earning capacity and that he currently suffers from a serious mental health condition which is treatable.
The relevant section 75(2) matters for the Estate are that the husband pays no child support for the three children and relevantly for both parties, pursuant to section 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
It is apparent to me that although the husband has relevant section 75(2) needs, his needs are being fully met by his current wife and he is the full time carer of their infant son. The husband’s current wife runs a successful business and she has provided him with over $319,000 to fund this litigation. The husband’s needs are including those due to his psychiatric condition, being fully satisfied by his current wife and she has a capacity to continue to meet his needs and in those circumstances I find neither the husband nor the wife have any 75(2) needs.
In relation to the Estate, pursuant to section 75(2)(na) a matter to be so taken into account is, “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”. This is highly relevant as the husband has virtually no child support obligation and is unlikely to have such an obligation in the future and the Estate and maternal grandmother will bear that burden for his three children.
There are relevant matters to be taken into account under section 75(2)(o) of the Act as well namely, that the husband caused the children to be ejected from their home within days of their mother’s death and that the home did not sell for 12 months.
Further that the husband has made the maternal grandmother’s care of the children far more arduous than it need to have been by maintaining his scurrilous allegations of her sexually abusing the children, harming and hurting the children when it is apparent that the children were harmed in his care and not the maternal grandmothers care and this is a relevant factor under section 75(2)(o) of the Act
MATRIMONIAL POOL FOR DIVISION
I have formed the view that the matrimonial pool for division between the deceased wife and the husband is the remainder of the sale proceeds of the Suburb BB property; the value of RPL; and the value of the Suburb Z property, they having been acquired or created during the marriage which is as follows:
R Pty Ltd at $210,517.
The Suburb Z property, worth $600,000 with a debt of $31,134, nett $569,000 rounded up.
The Estate’s bank account containing $1,413 will be excluded on the same basis I have excluded the husband’s bank accounts as this money has been acquired well after separation.
Monies in Newham’s trust account from the wife’s superannuation death benefit $9,606.
Remainder of monies in the controlled monies account of $1,013,153 less the $825,000 being the wife’s life insurance payout, nett $188,153.
Totalling $977,276
The monies in the husband’s NN Bank account and the value of his pension cannot be included in the pool for division as I am unaware of their current value. The husbands’ post separation bank accounts are clearly his money and will not be included in the pool.
I will take into account the interim property distributions the husband has received from the controlled monies account as I will take into account the interim property distributions the Estate has received from the controlled monies account in my ultimate determination.
Superannuation
I note the husband has superannuation of $308,000 together with a UK pension, value unknown, which will provide for his future needs. I will have regard to those assets in my determination.
I note that he cashed in two cars he had prior to separation and traded in on a new car receiving $21,000 and that the maternal grandmother will have the Motor Vehicle 1 transferred to her and I will not take either item into account in my deliberations and note that the Motor Vehicle 1 has been included as an asset of RPL in the valuation and the husband will receive the benefit of that inflation of the company value.
The Estate owns the life insurance payout of $825,000. I will have regard to this asset in my determination.
Husband’s contribution based entitlement
Dealing now with the husband’s contribution based entitlement to the pool.
There is no doubt the parties contributed, both by way of parent and homemaker and income earnt during their relationship to their assets and family
The parties contributed to the acquisition of the Suburb X, Suburb Z and Suburb BB properties. They each had substantial assets at commencement of cohabitation which they used to fund and purchase those properties. The husband worked full time. The husband agreed with and assisted initially with the setup of the wife’s business, RPL, however was not involved in any way with the running of that business, it’s day-to-day operations or in any aspect of its running other than agreeing to allow the wife to use equity in the matrimonial home to set up the business and ultimately purchase the Suburb Z property, from which the business ran.
The initial loan/mortgage taken out to buy the Suburb Z property was in the vicinity of $270,000. At separation, that loan had been reduced by the wife’s effort and energy to $200,000, indicating she was able to pay that loan off because the husband was working and no doubt paying other expenses for the family, thus an equal contribution. Its current reduction to $31,000 odd is totally due to the wife and the Estate’s effort and with the husband running interference at times and he will receive the benefit of such a significant reduction in debt for no effort on his part.
The wife has made a significant contribution to the support of the husband’s four children in England with payments totalling $230,000 being made during the relationship. This is a significant contribution by the wife to the husbands four children and was the only time he maintained his child support payments
Post separation contributions
Post separation the parties contributions changed vastly.
At her death, one year after separation in 2017, the wife had, by her own effort, reduced the loan over the Suburb Z property to $172,473 in circumstances where, at her death, the husband was in arrears of child support of over $3,000. The wife was not only paying the Suburb Z mortgage but also the former matrimonial home mortgage and all costs associated with that home. That is a remarkable contribution by the wife to the value of both properties and the business.
Secondly, post the wife’s death, the Estate has reduced the value of the Suburb Z loan to $31,000, again, a significant contribution to the ultimate value of the matrimonial property by the Estate i.e. the wife’s brother.
Thus the husband has profited from the decrease in the mortgage and the increase in the value of the Suburb Z property without having lifted his hand to assist in that increase in value or in the support of his children at any meaningful level.
I accept the evidence of the maternal grandmother that the home was in a poor state at sale and that this lays entirely at the feet of the husband.
The husband has failed to disclose the value of his pension fund. He told the Court in his financial questionnaire in 2017 it was worth AUD$64,000 yet asked me to accept in the balance sheet in 2021 that it is worth AUD$15,000. He has not disclosed the current value of his NN Bank account.
I have had regard to the fact the husband has received a benefit of $280,000 from the controlled monies account. The Estate has received a benefit of $230,000 from the controlled monies account. It has been due to the work of Mr Butler that the Estate has both an income producing asset in RPL business which has provided for the children and the real estate out of which the business operates with the mortgage debt having been almost extinguished since his sister’s tragic death.
Furthermore, the husband has some $380,000 in superannuation whereas the wife’s has been cashed in and has formed part of the pool.
I would have assessed the husband’s contribution to the assets of the marriage as I have found them to be at 40 percent on these facts, given what I regard to be an overwhelming contribution by the wife and the Estate to the assets in the pool. However, his failure to disclose the most basic information, such as tax returns, information about his UK pension or a valuation of that pension and the current value of his NN Bank account have led me to the view that these assets are valuable in his hands and this should be reflected in the percentage division of property.
Having regard to the Estate being seized of $825,000 being the wife’s insurance payout I will not interfere with my contribution based assessment for the husband to take account of that valuable asset in the Estates hands.
The husband has no section 75(2) factors. He is fully supported by his current wife. He will, if he obtains appropriate treatment, be able to work again. He was working prior to and post the relationship breakdown, and he has a capacity to re-train. He has a capacity to re-engage in the workforce once he accepts and takes on board the treatment he must receive. His wife runs a successful business and has provided him whatever money he has needed to fund this litigation. He has superannuation of $380,000 in Australia in addition to his UK pension.
ALTERNATE POSITION
If I am incorrect in my view that the wife’s insurance claim is a matrimonial asset and forms part of the pool for division then the husbands contribution based entitlement would be assessed by me at 25 percent given almost 50 percent of the pool arose due to an asset paid for from the wife’s post separation income and effort, albeit in a business established during the marriage. There would be a further reduction of 5 percent for his failure to disclose the value of valuable assets in his name, a total to him of 20 percent of the pool.
RESULT
The pool without the insurance policy is $977,276 with 40 percent of that figure being $390,910.
The pool including the life insurance proceeds $1,802,276 with 20 percent of that figure being $360,455.
I have determined that the husbands entitlement to the pool of assets is $392,000 rounded up being 40 percent of the pool excluding the value of the wife’s insurance pay out. Adding this figure to the monies he has received is $672,000 to him and the reminder to be held by the Estate and ultimately for the benefit of the children by way of a Trust which has already been established by the Estate.
In all the circumstances I find the orders I propose to make are just and equitable and I will so order.
I certify that the preceding one hundred and sixty-nine (169) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 7 February 2022
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