Tian & Larson & Ors

FAMILY COURT OF AUSTRALIA

TIAN & LARSON AND ORS

[2009] FamCA 1307

FAMILY LAW – PROPERTY SETTLEMENT – contributions – multiple properties owned by the parties – just and equitable – post-separation expenditure and liabilities incurred – payment of taxation liability and unpaid legal costs – “add-backs” in the calculation of net asset pool – superannuation splitting order not appropriate

Family Law Act 1975 (Cth)

Ferraro and Ferraro (1993) FLC 92-335
Hickey and Hickey (2003) FLC 93-143
Kennon v Kennon (1997) FLC 92-757
McLay and McLay (1996) FLC 92-667

APPLICANT:

Mr Tian

RESPONDENT:

Ms Larson

SECOND RESPONDENT:

Deputy Commissioner of Taxation for the Commonwealth of Australia

INTERVENER:

Meyer Pigdon Family Lawyers

FILE NUMBER:

SYF

2516

2005

DATE DELIVERED:

23 December 2009

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Justice Le Poer Trench

HEARING DATE:

9 June 2009 and by written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Mr Tian

COUNSEL FOR THE RESPONDENT:

Mr Connor

COUNSEL FOR THE

SECOND RESPONDENT:

Ms Rees SC

SOLICITOR FOR THE INTERVENOR

Ms Pigdon

Orders

The parties do all things necessary to cause the sum of $90,000 to be paid from the proceeds of the C property sale to Meyer Pigdon Family Lawyers in satisfaction of the wife’s debt to that firm.
The parties cause a further sum of $297,660 to be paid to the wife from the sale proceeds of the C property.
The parties are to cause the sum of $31,820 to be paid to the husband from the sale proceeds of the C property and the regional New South Wales property.
The parties are to cause any interest accumulated in the account holding the balance of proceeds from the sale of the C property to be divided 65% to the wife and 35% to the husband.
The parties cause the balance of the funds in the Macquarie Bank account 634 (proceeds from the regional land sale) to be paid to the husband.
The wife is to retain all of the parties’ interests in the company Larson Pty Limited and indemnify the husband against any claim made against him arising out of any dealing with or association with the said company prior to the date of these Orders.
The husband is to retain all of the parties’ interests in the company SE Pty Limited. He is to indemnify the wife against any claim made against her arising out of any dealing with or association with the said company prior to the date of these Orders.
The wife indemnify the husband against any claims made by any of the following persons/entities in respect of work done on the C property formerly owned by the parties:
(a) The tiler engaged by the wife to carry out work on the property; and
(b) P & Sons Pty. Ltd.
Each party otherwise retain as their own property the assets which stand in their sole names.
Each party is declared the absolute owner of the superannuation entitlements attaching to their own name as disclosed to the Court in these proceedings.
Each party have leave to apply for any order necessary to ensure implementation of these orders.
Otherwise all outstanding applications or responses seeking orders are dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Tian & Larson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2516 of 2005

MR TIAN

Applicant

And

MS LARSON

Respondent

And

DEPUTY COMMISSIONER OF TAXATION

Second Respondent

And

MEYER PIGDON FAMILY LAWYERS

Intervener

REASONS FOR JUDGMENT

introduction

This case has been hard fought for all of the time it has been before me. It seems likely that the parties have fought since the proceedings were commenced in early 2005. The proceedings were complicated by the husband having to defend a sexual assault charge, arising from an allegation of the wife, which was ultimately not proceeded with by the Crown. The fact that the husband was charged seems to have coloured his behaviour in a number of ways since that time. Part of the impact was that the husband says he was unable to work. He spent his time attempting to prepare for the criminal trial.
During most of the time the matter was before me in the lead up to the final hearing, the parties were self represented. Each presented themselves in a courteous and respectful manner to the Court. There were some highly emotive issues for each of the parties in this case. They each were born in different cultural environments to that which they found themselves living in at the time of their marriage. As I said to the parties at the end of the case, I considered each to be a highly intelligent person who has lived an extraordinary life. They were a wrong combination for each other, however, that does not detract from the fact that each had extraordinary talent, drive and determination to have achieved what has been achieved in one lifetime under difficult circumstances. I found each a very interesting and engaging person. I wished them both well for their futures and hope not to meet them again in the Court.

orders sought by the parties

The wife provided a minute of order she was seeking and that minute was marked as Exhibit W21. The orders sought by the wife were as follows:
1.That the wife retain the net proceeds of:
(a)      the sale of the [C] property;
(b)      the Macquarie Controlled Monies Account.
2.That the husband forthwith indemnify the wife and be responsible for and pay as and when they fall due, any instalment payments of principal and interest in respect thereof and or the payments of the principal sum (as and when it falls due):
(a)      % of the [Gold Coast apartment] NAB debt
(b)% of the costs and expenses of the sale of [Gold Coast apartment];
(c)      % of the [P Finance] debt;
(d)      % of the debt owed by the wife to [LF];
(e)      % of the debt owed by the wife to [GK];
(f)       % of the unpaid [C property] repairs;
(g)Any amounts owing in respect of the [regional property] License.
3.That the creditors named in Order 2 hereof be served with notice of an order to adjust the debts owing to them to reflect the liability of the husband in accordance with the said Order 2.
4.Declare that the wife is the sole and absolute owner as against the husband of all property in her possession, custody and control, including but not limited to:
(a)      The wife’s superannuation;
(b)      The BMW 330ci motor vehicle
5.That in default of the husband or the wife doing all acts and things and executing all such documents as are necessary to give effect to these Orders and Declarations the Registrar of the Family Court of Australia at Sydney be appointed to execute all such documents in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to these Orders and Declarations.
6.That leave be granted to re-list the proceedings on 24 hours notice in respect of the implementation of these orders.
The husband tendered an Amended Application for Final Orders which was marked as Exhibit H17. The document sought the following orders:
1.To pay outstanding debts of [SE] Pty Ltd and the liquidator’s fees to the liquidator, […], in order to terminate the liquidation in the Federal Court of NSW;
2.The rest of the money must be put into the controlled money trust account in the names of both parties with the Macquarie Bank pending final determination;
3.The wife must amend her tax returns for 2004 to claim her 50% share of tax deductions for the [C] home and to amend the tax returns for 2006, 2007 and 2008 to declare receipt of all rental income in respect of the [C] home and to claim 100% of the tax deductions in respect of the expenses for the [C] home including but not exclusive of the interest charges.
4.Subject to the husband’s acceptance to the accuracy of the amendments above the husband will approve the release of funds to pay the wife’s outstanding debts to the Deputy Commissioner of Taxation;
5.The remaining money will then be transferred wholly to the husband;
6.The wife will transfer half of her superannuation entitlement to the husband;
7.Other than as provided for in these Orders, each party is declared [sic] sole beneficiary and legal owner of all items currently in their possession and control including but not limited to real estate, cash in bank accounts, shares, jewellery, motor vehicle, furniture, furnishings and personal effects;
8.The wife pays the costs incurred by the Deputy Commissioner of Taxation through his intervention in the Family Court of Australia;
9.The wife pays all her other creditors;
10.The wife must pay the husband 60% of all proceeds from any tax refund from any prospective amendments of her personal tax returns from 1 July 2002 to 30 June 2004 and that the Deputy Commission of Taxation is to notify the husband of any refund to the wife in the stated period for up to 7 years.
11.The wife pays the husband’s costs in these proceedings including the criminal law fees;
12.In the event that either party refuses, fails or neglects to execute any deed or instrument to give effect to these Orders the Registrar of the Family Court is appointed pursuant to section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

submissions of the parties

Each of the parties provided written submissions. The husband provided, initially, a document which was marked as MFI2 and set out the contributions he relied upon. On the last day of the hearing the husband also made oral submissions.
On 12 June 2009 I made a direction that the wife provide to my associate by email on or before 16 June 2009 her list, in dot point form of the contributions to be relied upon by her together with a dot point list of matters she said were to be taken into account under section 75(2). Such a document was never received.
Submissions were made on behalf of the wife by her counsel Mr Connor on the last day of the hearing.

credit of the parties

Each of the parties gave evidence in affidavit and oral form. There was nothing about their affidavit material or the way in which they each gave their oral evidence which led me to think they were not telling the truth.
I was left with the opinion that the husband was more organised in his financial affairs than the wife. He represented himself during the time the matter was in my docket and he was predominantly able to comply with my directions. In matters of general history of transactions I do prefer the evidence of the husband, unless there be some document which establishes the contrary in relation to any matter of dispute.
As it becomes necessary to determine issues in these reasons I will consider the parties’ evidence on that point and set out the version of fact I prefer.

property: general principles

Section 79 of the Family Law Act 1975 (“the Act”) enables the court to make orders with respect to the property of the parties to the marriage. In considering what order, if any, should be made the court is required to take into account the matters under s 79(4).
It is now well established that the determination of a s 79 application requires a four step process (Ferraro and Ferraro (1993) FLC 92-335; McLay and McLay (1996) FLC 92-667; Hickey and Hickey (2003) FLC 93-143). The Court must:
a)firstly, identify and value the net property, liabilities and financial resources of the parties at the date of the hearing;
b)assess the contributions of the parties pursuant to s 79(4);
c)consider the relevant s 75(2) factors; and
d)lastly, consider whether such an order, in all the circumstances, is just and equitable. The final consideration is a reflection of the requirement under s 79(2).

Assessment of the s 79(4) contributions

In considering the alteration of property interests I am required to consider the contributions made by the parties in accordance with the matters outlined under s 79(4). Section 79(4) provides:
(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 to 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.

Section 75(2)

In making a decision in relation to property, s 79(4)(e) requires a consideration of relevant s 75(2) matters. I here incorporate s 75(2):
(2) The matters to be so taken into account are:
(a)the age and state of health of each of the parties;
(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;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(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;
(e)the responsibilities of either party to support any other person;
(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;
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(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;
(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;
(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;
(l)the need to protect a party who wishes to continue that party's role as a parent;
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;
(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;
(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.

the evidence

On 26 September 2008 I produced, in conjunction with the husband and wife, a chronology of non-contentious background facts. This was provided to the parties with the orders made that day. The chronology is reproduced as follows:

1953	Wife born
1963	Husband born
1986	R Larson born
1987	D Larson born
June 1994	MI Tian born to the marriage of the husband and his former wife HD Tian
July 1994	Larson P/L incorporated
August 1996	KM Tian born to the marriage of the husband and his former wife
01.01.00	Consent orders made in the Family Court of Australia, Canberra Registry
01.04.01	Husband purchased M property, Canberra, in his sole name
01.04.01	Following the purchase of the husband’s property at M in Canberra, the husband met all of the monthly mortgage payments except for one which was paid by the wife in about November 2001
June 2001	SE P/L was incorporated. The husband was the sole director and shareholder of that company. The company was liquidated in December 2006.
01.08.01	Wife’s property at T in Canberra had a value of $1.1 million
01.08.01	Cohabitation commences. Parties residing at M, Canberra
01.08.01- 01.01.02	Husband meets expenses associated with his children of about $2,000 per month
01.08.01- 01.10.04	In addition to child support payments during this time the husband made payments to the Australian Scholarship Group in relation to his children on a gradually increasing scale where the annual payment at about the date of cohabitation was $4000 per year and the annual payment at about the date of separation was $6,000 per year
27.08.01	SE P/L acquired a luxury motor vehicle for $150,000. The company borrowed $145,000 from the CBA. The wife provided a deposit of $5,000 for the purchase of that vehicle
30.08.01	Husband admitted to professional body
XX.11.01	Parties purchase D property, ACT in their joint names. The purchase was enabled by an advance of $292,326 from F Finance. The wife contributed $15,400 from her St. George bank account
01.11.01	Wife is assessed to pay child support in respect of her two children
16.11.01	The husband acquired property at Lots 5 and 6 in regional New South Wales for $320,000. The money used to acquire the property was $337,500 provided by advance from St.George Bank secured against the wife’s property at T, Canberra. This sum met the purchase price and expenses associated with the purchase
01.01.02	Husband commences a monthly payment of $2,000 in respect of child support for his two children, such amount being the subject of a verbal agreement between he and the children’s mother. This payment continued at least to the point of separation
XX.07.02	Wife rented a property at A Street in T, ACT and remained living in that property until the date of separation. Shortly after she rented the property the husband commenced to reside with her in that property and resided with her at that place until the date of separation.
04.07.02	Contracts were exchanged for the purchase of Gold Coast apartments in the wife’s sole name. The husband contributed $1,000 towards the deposit and the wife contributed $85.500 [sic].The contract price was $865,000. The contracts were exchanged at a time when the property had not been built. Settlement was concluded. The purchase was completed in about November 2005 with the wife borrowing $843,000 from Homeside Lending
10.09.02	The property at N, Sydney, was purchased in the husband’s sole name for $480,000. The wife paid the deposit of $48,000 and the balance of about $431,000 to complete the purchase was borrowed from NAB. At about the same time of completing the purchase of the N property the loan on the husband’s property (being the apartment in M, Canberra) was refinanced with the NAB. No funds were refunded to the wife from that sum. The $48,000 advanced by the wife as deposit on the N property came as further borrowings against her T, ACT property.
04.02.03	Parties settled the purchase of the property at S in Sydney which property was acquired in their joint names. The purchase was $1,330,000. The parties borrowed $1.4 million from the NAB. The wife paid a deposit of $133,000 by utilising the loan facility against her property at T ACT and following the completion of the purchase was refunded $129,000 from the moneys advanced by the NAB
13.03.03	Contracts exchanged for the purchase of the property at C. The property was acquired in joint names. The purchase price was $2.9 million. $2.45 million was borrowed from NAB to purchase the property. In addition the parties borrowed $200,000 from E Finance, the husband contributed $35,000 which he drew from his company and the balance of the purchase price and expenses was paid by the wife
On or about 08.04.03	Settlement took place of sale of wife’s home at T, ACT. The sale price was $1.36 million and from the sale proceeds approx. $1 million was paid to St.George Bank to meet the outstanding liability for loans borrowed against the T property and also the debt in relation to the regional New South Wales property
November 2003	Date of marriage
28.11.03	Husband sold his property at M, Canberra for $320,000. On completion $144,048 was paid to discharge the mortgage secured against the apartment. Of the sale proceeds $84.000 [sic] was paid to E Finance to reduce the loan advanced for the purchase of the C property. $42,000 was paid off each party’s liability to E Finance
21.08.04	Date of separation.
17.09.04	Husband acquired in the name of the Tian Trust, a professional office in Sydney. The purchase price was $350,000 together with $35,000 GST and costs
01.10.04	The property at S was sold for $1.61 million. From the sale proceeds $1,375,031 was used to discharge the mortgage to NAB. Further from the proceeds of the S property, $59,000 was discharged from each of the parties’ liabilities to F Finance and a further $57,407 was paid to each of the parties from the sale proceeds
01.10.04	Husband received a payout of $30,500 following the destruction of a speedboat which had been acquired in about November 2003 with the sum of about $34,500 coming from the proceeds of the sale of the M, Canberra property
07.02.05	Husband faced proceedings in the Canberra Magistrates Court and a Domestic Violence Order was made for a period of 2 years
February 2005	Husband was charged with 1 count of sexual intercourse without consent and 3 counts of take and detain person with intent to obtain advantage
09.05.05	Consent orders made facilitating the sale of the N, regional NSW and D properties
31.05.05	Consent orders made in relation to the C property and permitting the wife occupancy of same
15.06.05	Wife commences work on the C property renovations
17.10.05	N property sold for $500,000. The proceeds were used to discharge the mortgage to the NAB and meet sale costs and other liabilities of the parties.
November 2005	DPP offered no bill in relation to the criminal charges against the husband and they were dismissed
XX.02.06	Parties settled the sale of the regional New South Wales property. The property had been sold for $570,000. The net proceeds received were some $528,000 and from that sum, $294,276 was subsequently paid out to the ATO to meet the tax liability of SE P/L. The balance of the moneys were invested in a Macquarie Bank Controlled Moneys Account and there is $190,350 standing to the credit of that account
21.02.06	Watts J orders the payment of $294,276 from the proceeds of the regional NSW property to pay the ATO in respect of the liability of SE P/L
19.05.06	Wife leased the C property for the first time
December 2006	SE P/L was placed in liquidation, the liquidator being appointed by the ATO
21.01.08	Wife leased the C property to a tenant who paid the wife $209,995 on 16.01.08 in advance for 30 months of lease
August 2008	The husband made an application to the Federal Court of Australia to remove SE P/L from liquidation
27.08.08	As at this date, the wife’s property at T, ACT had a mortgage to St. George, which mortgage secured a sum that had already been advanced of between $450,000 and $465,000. The parties also had facilities of $150,000 and $337,500 with St.George which sums were drawn upon
June 2009	Settlement of the sale of the C property. The net proceeds received were $330,394.74

facts as determined by the court

In November 2001 the parties jointly purchased the property D in Canberra (“the D property”). The purchase was funded by mortgage obtained from F Finance. The deposit was paid from the wife’s St. George Bank business account (secured against her T house). This was repaid to her when finance was obtained through F Finance.
The Orders made on 9 May 2005 called for the sale of the property. The wife took charge of selling the property and it took over 12 months to dispose of. Ultimately there was a shortfall of $30,000 which was made good by the parties’ funds in the joint Macquarie Bank account. The mortgage instalments on the property were $2,613 per month and were paid by SE Pty Limited from the date of separation until May 2005.
In November 2001 the husband purchased 180 acres of property in regional New South Wales. The property consisted of freehold and leasehold title. The purchase price was $320,000 which was financed by a loan of $370,000 from St. George Bank. The mortgage was secured against the subject property and the wife’s house in T. The deposit of $32,000 came from the wife’s St. George Bank loan account. The stamp duty of $9,890 was also paid from the wife’s St. George Bank loan account. Once the loan was made available from St. George Bank of some $370,000 the funds advanced by the wife were repaid to her.
In February 2002 the parties purchased the property at S in Sydney (“the S property”). The purchase price was $1,330,000. The parties borrowed $1,400,000 from the National Australia Bank. The deposit of $133,000 came from a loan account which was secured against the wife’s T property. These funds were reimbursed to the wife once the purchase of the S property was completed. Renovations were effected to the S property at a cost of about $30,000.
In July 2002 the parties purchased in the wife’s name an apartment on the Gold Coast. The purchase was for $865,000 which was to be paid once the building of the property was completed. The husband paid $1,000 from his cheque account as a holding deposit. The parties’ evidence is different on the point of how this property was placed in the wife’s sole name. The husband says that it was a joint purchase and on his advice and to keep it simple given that it was an investment property, he said that the property should be purchased in the wife’s name. The wife’s version of facts is that the husband did not want to have anything to do with the investment as he thought it was a bad investment and, therefore, insisted that the wife purchase it in her sole name. In relation to this issue I prefer the version of the wife.
The deposit of $85,500 was paid shortly after the holding deposit ($1,000) and came from a loan facility secured against the wife’s T property. Settlement of the property took place in October 2005 (post separation).
The property was valued for the purposes of these proceedings at $965,000. However, it has now been sold for $750,000. There is an outstanding mortgage of $891,522.
In September 2002 the husband purchased a property, being an apartment at N in Sydney (“the N property”). The purchase price was $480,000. The purchase was enabled by an advance from the National Australia Bank of $656,000. The loan from the National Australia Bank was secured over not only the N property but also the husband’s apartment in Canberra. The 10% deposit was drawn against one of the wife’s St. George loan accounts secured against her T property.
The wife’s T property was sold in April 2003 for $1,360,000. The St. George Bank loan of about $1,000,000 which provided collateral security for the regional NSW property, was discharged.
In March 2003 the parties purchased the property at C (“the C property”). The purchase price was $2,900,000. The National Australia Bank provided a loan of $2,450,000, F Finance provided a draw down facility of $199,186 and the husband withdrew $35,000 from SE Pty Limited to put towards the deposit.
Given the size of the purchase and the borrowings, the National Australia Bank required further security and therefore the parties provided the N property and the regional property as part of a package. The National Australia Bank then provided $3,850,000 in loans across all of the parties’ security.
Some renovations were carried out to the C property shortly after purchase at a cost of about $70,000. The mortgage instalments on the property were $14,500 per month.
In November 2003 the husband sold his Canberra apartment for $320,000. After meeting sale expenses and discharging the mortgage, $84,000 was paid to the E Finance drawings facility in relation to the advance for the C property. Nearly $60,000 was deposited into a Commonwealth Bank mortgage account of which $34,500 was used to purchase a speedboat.
The Canberra apartment was sold after the husband personally involved himself in the marketing process. The property had been placed with two real estate agents who had been unable to affect a sale.
In May 2004 the husband entered into a lease with Telstra Corporation Limited for part of the regional NSW property. The lease was for five years and the husband negotiated an advance payment in respect of the first two years of rental of $34,000. The husband personally involved himself in negotiating the lease with Telstra. The rental was increased from $6,000 per annum to $18,700 per annum.
In about June 2004 the wife acquired her former husband’s half interest in a time share apartment in the United States for $6,000.
In September 2004 the husband purchased a property in Sydney for $385,000 (“the professional office”). This property is used as professional offices for the husband. The property is registered in the name of the husband’s sister, as trustee for the Tian Trust. The sum of $17,500 of the purchase price came from the SE Company accounts. The stamp duty was paid for by funds withdrawn from SE Company by the husband. The husband caused the Trust to borrow $348,000 to complete the purchase. The husband presently pays $4,100 per month for occupancy of the offices.
In October 2004 the parties sold the S property for $1,610,000. The funds were used to discharge the mortgage and liabilities of the parties to F Finance. Each of the parties received $57,400 from the sale. The property was originally listed for sale with a Sydney Agency. It did not sell. The husband then cancelled the Agency Agreement in July 2004 and set about selling the property privately. He attended at all the inspections of the property and negotiated with interested buyers.
Pursuant to Orders made by the Court in May 2005, the regional property was to be sold. The husband worked with the real estate agent and ultimately, the property was sold for $570,000.
On 21 February 2006, pursuant to the Order of Justice Watts, the sum of $294,276 was paid to the Australian Taxation Office (“ATO”) on behalf of SE Pty Limited from the sale proceeds of the regional property. A further amount of $233,865 was paid to a Macquarie Bank account held jointly by the parties. Thereafter, the funds in the Macquarie Bank account were used to meet forensic expert fees and repay a F Finance mortgage. The funds were also used to pay taxes and other expenses, as per Court Orders, as set out elsewhere in these reasons.
In October 2005 the husband exchanged contracts for the sale of the N property at $500,000. All of the available funds were used to meet sale and other expenses associated with the property and to also reduce the mortgage.
Between September 2004 and 31 May 2005 each of the parties paid one half of the mortgage payment required for the C property.
There is an issue between the parties about the provision of cash sums by the wife to husband during the course of the marriage. The wife alleges that from time to time, she provided cash amounts to the husband for matrimonial expenses. She further claims that the husband stole cash from her during the marriage for the purposes of gambling at casinos. The husband denies that he ever stole money from the wife. He also denies the extent of alleged payment by the wife to the husband of cash from her income. The evidence does not establish to my satisfaction that the husband stole cash amounts from the wife during the course of the marriage. I do prefer the husband’s version of fact in relation to this issue. He was cross-examined about the matter and I was impressed with his evidence on the point. The issue of provision of cash by the wife to the husband has no relevance to the assessment of contribution in any event. All of the wife’s income, whether cash or otherwise, earned during the cohabitation, has been taken into account by me.
During the course of the marriage and cohabitation the husband says he contributed as a homemaker. He said he cooked meals every weekend and for at least half of the working week. He said he washed and ironed his own clothes, including hanging them out to dry. He claims to have undertaken at least half of the cleaning tasks, although he arranged for a cleaner to attend every Monday morning. He says he attended to most of the household and grocery shopping as his office was close to Woolworths.
There is an issue between the parties about their homemaker contributions. The wife said she did the majority of washing and cooking for the husband and herself. She said that on rare occasions the husband washed his clothes and vacuumed the carpet. She concedes he did his own ironing. She further says that for a brief period he organised a cleaner to attend the premises. She concedes that the husband attended to the grocery shopping, but says this only occurred on ten occasions and that the balance of the shopping was done by her.
On the issue of homemaker contributions I think that the parties have selective recollection. I believe each has given what they believe to be true evidence on the subject. I find that the parties each contributed about equally to the domestic tasks associated with their cohabitation.
The husband also claims to have assisted the wife’s son, D, who lived with the parties during part of their cohabitation. The husband said he taught D to drive a motor vehicle. This is not a matter which can be taken into account as a contribution as it does not fit within the category of contribution defined by section 79(4)(c). I will take it into account under section 75(2). Similarly, the contribution made by the wife to the care of the husband’s children I will take into account under section 75(2).
The husband acknowledges assistance from the wife from mid-September to mid-October 2001, where she assisted in the management of his practice.
From 8 November 2006 SE Pty Limited was placed in liquidation. In August 2008 the husband applied to the Federal Court to remove the company from liquidation.
During the parties’ cohabitation, each of them paid about $70,000 in child support for their respective children.
During the period of cohabitation the parties had some 19 overseas trips. They generally flew first class and stayed in four or five star hotels.
The husband complains that during the course of the cohabitation the wife had expensive tastes, particularly in clothing. The evidence does not allow me to make a finding in this regard.
During the cohabitation the parties acquired jewellery from the husband’s brother who is a jeweller in the United States of America. This included a large diamond ring for which the husband attached an invoice for USD$59,650. The wife denies that it has this value. She alleged a value of about USD$16,000. The wife agrees that she purchased a ladies Rolex watch for USD$18,500 from the husband’s brother. Ultimately the parties agreed on a balance sheet value of $21,852 for the ring and watch.
Between 19 December 2001 and 24 September 2004 the husband paid a total of AUD$112,238 to his brother in the United States of America. The husband said this payment was for jewellery for the wife. I accept the husband’s evidence that he made that payment. This payment would be more consistent with the ring purchased for the wife having a value of USD$59,650 than AUD$16,000. I therefore accept the husband’s evidence in relation to the cost of the ring.
The wife selected a gentleman’s Rolex watch for the husband from the husband’s brother’s stock. However, in March 2005 the husband returned the watch to his brother. He said that he could not afford to pay for it. I accept that evidence of the husband.
In March 2005 the husband sold $12,000 worth of his wine to fund family law litigation.
On 16 January 2008 the tenant of the C property paid $209,995 to the wife as a lump sum lease payment.
The husband claims that the wife has a very expensive lifestyle today. She pays $6,500 per month rental for her Sydney apartment. She pays $1,850 per month rental for an apartment in Canberra, although this now appears to have ceased. The wife rents professional offices in Canberra and uses her Sydney accommodation as her professional office as well as her residence. The evidence does not permit me to find that the wife leads an extravagant lifestyle. It might be expensive, however I could not find it was inappropriate.
During the parties’ cohabitation the husband’s two children visited he and the wife almost every weekend. They also spent time with them during the school holidays. There was an issue between the parties explored in oral evidence about the input of the wife to the care of the husband’s children and the nature of her relationship with them. I accept the wife’s evidence on this point and find that she did have a good relationship with the husbands’ children during their cohabitation. I further find that she assisted in the care of the children whilst they spent time with the husband.
In relation to the C property the wife says that she paid the deposit of $290,000. She negotiated with St.George Bank to increase the portfolio loan account from $150,000 to $262,500. The deposit was, in part, paid from a draw down of the T property overdraft facility ($145,000). The wife also drew $25,000 from her St.George Bank account towards her deposit. Each of the parties borrowed $98,805 from F Finance. I accept that evidence.
The wife alleges that the property was difficult to lease and the husband refused to lease the property “to lawyers”. The husband denied that allegation. I accept the husband’s evidence on that matter.
In relation to the sale of the property at T in April 2003 the wife says she received two sums of money from that sale; one of about $23,558 and one of about $100,567. She says that both those sums were applied towards the purchase of the C property. I accept that evidence.
The wife in her affidavit material estimates that she provided $70,000 to the husband to be paid to his brother for jewellery. In relation to the quantum of the payment of money for jewellery to the husband’s brother I prefer the evidence of the husband on that matter. I do accept that the wife contributed to the money paid.
There are issues between the parties about the payment of mortgages and other expenses during the course of the cohabitation. Little turns on this issue as there is no allegation by either as to any waste of income during the course of the cohabitation. The wife attempted to suggest the husband was a gambler; however, that allegation was never established on the evidence before me.
Between June 2005 and November 2005 the wife paid the N property mortgage in the sum of $3,169 per month.
Between June 2005 and March 2006 the wife paid the monthly payments in respect of the D property mortgage. Those payments were $2,613 per month. From the time of separation until June 2005 the husband had made those payments through SE Pty Limited.
From the date of separation until June 2005 the husband made the payments in respect of the mortgage on the N property.
Between September 2004 and April 2005 each of the parties paid one half of the mortgage payment in respect of the C property. The total payment required was $16,313. Following the May 2005 Orders the wife has been responsible for monthly payments on the mortgage. The wife endeavoured to have the husband agree to refinancing arrangements in respect of the C property, which would reduce the interest rate and change the loan to an interest only loan. The husband did not agree. Later in these reasons I deal with an add back of funds against the wife arising from her occupation of the C property pursuant to the orders made by the Court 31 May 2005.
The orders of 31 May 2005 provided as follows:
1.That by consent and pending further order, orders and notations be made in terms of the document titled Short Minutes of Order marked Exhibit 1 and attached hereto.
2.That the proceedings in relation to a subpoena addressed to the wife be adjourned to 9:30 am on 23 June 2005.
3.That leave be granted to the wife to issue such subpoenas as she may be advised in relation to the husband’s financial position and provided they are filed in time may be made returnable on 29 September 2005.
By Consent and pending further Order it is ordered:
1.The husband shall today vacate the jointly owned property known as [C property] being the whole of the property contained in Certificates of Title, Folio Identifiers […] and […] (“[C property]”).
2.The wife shall have sole right to occupation of, access to maintenance and management of, and the right to carry out urgent repairs thereto for the improvement of [C property] at her expense and, at her discretion, to lease the property to tenants and to receive any rent there from provided she pays all the following expenses in relation to the property:-
2.1all monthly mortgage instalments due to the National Australia Bank;
2.2the Council and Water rates;
2.3insurance premium for the full insurable value of all improvements;
2.4insurance premium for all liability for personal injury,
2.5all repairs and renewals necessary to maintain the property in a proper state of repair, such works to be undertaken in a tradesman like manner;
and in the event that the wife shall default in relation to any such obligation other than the payment of Council and Water Rates, and such default remains outstanding for a period of 14 days after the relevant date of liability, the parties shall do all acts and things necessary to undertake the sale of [C property] (“the sale”).
3.The sale shall be undertaken by the parties in the following manner:-
3.1the parties shall list the property within 7 days of the wife’s default, for sale by public auction undertaken by L.J Hooker […] Real Estate Agents;
3.2the parties shall instruct Rimmer & Associates Solicitors to prepare the Contract and otherwise undertake all necessary legal steps in respect of the sale;
3.3the parties shall set a reserve price of $3,300,000.00 in relation to the Auction sale (or such other reserve price as the parties may agree in writing) and the parties shall attend the Auction to negotiate with the highest bidder in the event that the reserve price is not reached whereupon the parties shall accept any offer made in respect of the property which approaches the reserve price within a margin of 5%;
3.4execute all documents requested by the Agent and Solicitor in order to complete the sale;
3.5pay to the Agent in equal shares any sums requested by the Agent in advance of the Auction for advertising expenses;
3.6cooperate in every way with the Agent and Auctioneer in relation to the marketing and presentation of the property.
4.Upon completion of the sale the parties shall do all acts and things necessary to ensure that the proceeds of sale are distributed in the following manner and priority:-
4.1in repayment of all funds secured upon the title of the property in favour of National Australia Bank Limited, pursuant to mortgage registered dealing number […];
4.2in payment of all Agent’s commission and auction fees incurred in the sale.
4.3in payment of all reasonable legal costs incurred in the sale;
4.4in payment of the balance then remaining into a controlled monies account, in the joint names of the parties, pending further agreement or determination in these proceedings.
5.The wife shall be liable for, and indemnify and save harmless the husband in respect of, all of the following obligations in relation to the property:-
5.1all monthly mortgage instalments due to the National Australia Bank;
5.2the Council and Water rates;
5.3insurance premium for the full insurable value of all improvements;
5.4insurance premium for all liability for personal injury;
5.5all repairs and renewals necessary to maintain the property in a proper state, of repair, such works to be undertaken in a tradesman like manner,
5.6any penalty, costs or default interest charge imposed by the mortgagee in the event that the wife fails to observe the terms and conditions of the periodic mortgage registered upon the title of the property;
5.7any claim for personal loss or injury to any person.
6.Any Capital Gains Tax, Vendor Duty or Land Tax (“relevant liability”) payable in respect of the property [C] on the sale thereof shall be apportioned between the parties as follows:
6.1that amount which is attributable to the ownership of the property from the date of purchase to this date shall be borne by the parties in such proportions as would have been borne by them had the property been sold on this day;
6.2that amount which is attributable to the ownership of the property after this date (“future period”) shall be borne by the wife;
that is in accordance with the following formula:
that the proportion of the relevant period as is reflected by the equation future period
total period
shall be paid by the wife where the initial period is from 13 March 2003 to date and further period is from this date to the date of exchange of Contracts for sale.
7.The wife shall provide to the husband written evidence in relation to the payment by her of any obligation or liability pursuant to these Orders, within seven (7) days of such payment being made by her, including without limiting the generality of the foregoing, written evidence of the mortgage repayments made by her to the National Australia Bank.
8.Subject to the wife’s compliance with Orders 2, 5, and 6 herein, the husband is restrained from entering [C property], save and except that the husband shall be entitled to inspect the property at reasonable times and frequency as agreed by the parties in writing or, failing such agreement, upon giving to the wife twenty-one (21) days notice in writing such notice not to be given on more than one occasion in each period of six (6) months.
9.NOTED that it be a matter for determination by the Trial Judge as to the apportionment of contributions between the parties to the intent that if the wife is required to make any payment of Land Tax, Vendor Duty or Capital Gains Tax that such payments may be considered in the Trial Judges discretion as a contribution to her, and Orders numbered 5 and 6 are consented to by the wife without prejudice to her ability to seek to have such payments taken into account as contributions by her, although nothing contained herein is to be construed as a concession by the husband that the wife is entitled to seek that taking into account of such payments as a contribution.
10.Pursuant to rule 15.45(i), the Court appoints Mr [O], as single expert witness (“the expert”) to prepare and provide to the Court a written Valuation Report setting out the current fair market value of [C property].
11.The parties with seven (7) days of the receipt of a notification from the expert of the amount of his anticipated fees shall each pay one half of such anticipated fees to their respective solicitors trust accounts.
12.Reserve the parties costs of this application.
13.Without admission, the wife is restrained from selling or dealing with, in any way, her;
13.1engagement ring (4.3ct G-H colour)
13.2Rolex watch (18kt Diamond Black)
13.3BMW motor vehicle registered no. […]

As mentioned above, in dealing with item 49 on the balance sheet, I have determined an adjustment of $466,372 against the wife. This figure will also need to be considered when assessing the wife’s post separation contributions.
When the Gold Coast property was purchased by the wife she borrowed $843,000. It was an interest only payment. That mortgage currently stands at $891,522. As will be seen later in these reasons I permitted the wife to re-open her case to tender documents which establish the final figures resulting from the completion of the sale of the Gold Coast property.
Since 31 May 2005 the wife has carried out renovations to the C property at a cost of about $246,400.
In order to fund the renovations and repairs the wife borrowed $30,000 from LF on 25 October 2005. The wife also borrowed a further $70,000 from the National Australia Bank and $90,000 from F Finance. She borrowed $50,000 from Mr and Mrs GK. She ordered and had installed new office equipment at a cost of $10,266, however she has not paid all of that expense.
The wife says that neither party made payments in respect of the mortgage on the D property for many months before its sale.
When the parties commenced to reside together they lived in the husband’s apartment property at M in Canberra. At some later stage they moved to a rental property at A Street, T (“the A Street property”). Whilst occupying the A Street property the wife paid the rentals.
In September 2003 the wife spent approximately $15,000 on liposuction and a breast implementation.
The wife’s son D lived with the parties for two years and one month from July 2002 to August 2004. When the parties first cohabited the children were living week about between the wife and her former husband. In about October 2001 they commenced predominantly residing with their father. During the time that D lived with the parties the wife received $170 per month by way of child support for D.
In about October 2004 the boat owned by the parties and moored at the C property was destroyed, giving rise to the insurance payout received by the husband of $30,000 and which is included in the balance sheet.
As a result of the presentation of revised tax returns for the 2003 and 2004 financial years, the wife received a further liability of $207,767. As a result of her 2005 tax return she received an assessment requiring payment of $56,984.
In October 2005 the wife purchased a second hand 2000 model BMW motor vehicle. She borrowed $40,000 from F Finance.
The husband presented and tendered to the Court (with a copy supplied to the Second Respondent) his 2008 tax return prepared, however, not lodged at the time of the hearing. This disclosed a taxable income of $66,629. His business income was $257,252 gross.
The wife’s taxable income in the 2005 financial year was $190,341. In the 2006 financial year her taxable income was $146,980 and in the 2007 financial year it was $68,862. The wife has, since the conclusion of the main hearing and pursuant to my order, filed amended tax returns for the 2006, 2007 and 2008 tax years. The wife had claimed only one half of the expenditure on the C property in those years where in fact, by court order, she was required to pay all of the expenses.
Exhibit H10 shows that in the 2004 financial year the land tax payable on the C property was $43,576.82. In the 2005 financial year the land tax payable on the C property was $33,992.97.
The husband’s tax return for the financial year ended 30 June 2006 showed a taxable income of $120,724. That included a capital gain of $103,722. His 2007 tax return showed a taxable income of $49,926.
On 16 February 2009 I made the following orders, inter alia, in relation to the sale of C property:
2.By consent, the Order for sale of the [C] property made 31 May 2005 is varied only to the following extent:
(a)The husband is appointed as trustee for the sale of the property on behalf of the parties.
(b)The parties are to appoint LJ Hooker at […] as agent for the sale.
(c)The property is not to be listed for sale with the agent until the husband has obtained a legally binding agreement with the tenant of the property to vacate the property upon completion of the sale on such terms as they may agree upon. The Court notes the wife has agreed that the husband is empowered to enter into an agreement to repay the tenant that proportion of the rental which he paid in advance which will be lost to him upon vacating the property at the conclusion of the sale, together with a sum of up to $10,000 in exchange for a release by the tenant against the parties in respect of all other actions arising from the tenancy agreement entered into between he and the wife in respect of the [C] property.
(d)The husband is permitted to commit up to $14,000 of the parties’ funds in the cash management trust account with the Macquarie Bank for the marketing package of the property with LJ Hooker.
(e)The husband is permitted to commit up to $5000 of the parties’ funds in the cash management trust account with the Macquarie Bank to pay a retainer to engage the services of a solicitor on behalf of the parties to obtain a legally binding agreement with the tenant of the [C] property prior to the property being listed for sale with LJ Hooker and further, if necessary, to act for the parties in relation to the proceedings instituted by the National Australia Bank in the Supreme Court of New South Wales in relation to the recovery of the monies advanced by them on mortgage in respect of the [C] property.
(f)The husband is to engage the services of a conveyancer and/ or a solicitor to act on the sale of the [C] property.
(g)The wife is to expeditiously sign all documents presented to her to enable the sale of the [C] property and the withdrawal of funds from Macquarie Bank to comply with these Orders.
3.The husband has leave to re-list the matter urgently before me to have further orders made in the event of the wife refusing or failing to sign any necessary documents which the husband says are required to facilitate these orders.
I am satisfied that it was the husband’s efforts which ultimately saw the C property being sold. I accept that he devoted a considerable amount of time and effort to affecting all the steps necessary to complete the sale.

The Balance Sheet

On 24 September 2008 the docket Registrar prepared an updated draft balance sheet:

Ownership	Description	Wife's Value	Husband's Value	ATO's Value	Requires Expert Evidence
Assets
1	Joint	[C] property	TBA	TBA	n/a	No
2	Joint	[Regional NSW] Land proceeds (contained in Macquarie Bank Account # 634)	$190,352.00	$190,352.00	n/a	No
3	Joint	[D] office/[F Finance]	$0.00	$0.00	n/a	No
4	Husband	[Tian] Trust:-	$15,000.00	$15,000.00	n/a	No
5	Loan account	$17,500.00	$17,500.00	n/a	No
6	[Sydney] offices (parties agree this is worth $365,000 but this is included in the valuation by Forsythes listed at item 4 above)	$0.00	$0.00	n/a	No
7	Husband	[SE] Pty Ltd:-	-$9,900.00	-$9,900.00	n/a	No
8	[luxury] car (parties agree this is worth $80,000 but this is included in the valuation by Forsythes listed at item 7 above)	$0.00	$0.00	n/a	No
9	Husband	1986 Mazda motor vehicle	$1,000.00	$1,000.00	n/a	No
10	Husband	IAG shares (180)	NK	$1,000.00	n/a	No
11	Husband	Bank accounts:-
12	CBA account #621	$53.00	$53.00	n/a	No
13	Westpac account #210	$118.00	$118.00	n/a	No
14	Husband	Rolex watch (wife says USD$32,000)	$36,500.00	$0.00	n/a	Yes
15	Husband	Contents at [G] (in storage)	$7,710.00	$7,710.00	n/a	No
16	Husband	Contents at [Sydney professional offices]	$1,360.00	$1,360.00	n/a	No
17	Husband	Wine collection	$10,000.00	$10,000.00	n/a	No
18	Husband	Oriental rugs	$2,700.00	$2,700.00	n/a	No
19	Husband	Boat	$6,000.00	$6,000.00	n/a	No
20	Wife	[Larson] Pty Ltd	$0.00	$0.00	n/a	No
21	BMW 330ci motor vehicle	$0.00	$52,000.00	n/a	No
22	St George Bank account #521	$660.00	NK	n/a	No
23	Loan account	$0.00	$78,838.00	n/a	No
24	Wife	Gold Coast Apartment […]	$950,000.00	$950,000.00	n/a	No
25	Wife	[USA] Timeshare	$5,149.00	$12,000.00	n/a	Yes
26	Wife	Bank accounts:-	n/a
27	St George Bank account #898	$375.00	NK	n/a	No
28	St George Bank account #770	$592.00	NK	n/a	No
29	CBA bank account #469	$0.00	$20,000.00	n/a	No
30	ING account #284	$96.00	NK	n/a	No
31	Wife	Diamond ring, rolex watch and other items	$21,852.00	$21,852.00	n/a	No
32	Wife	Contents:-	n/a
33	[C] contents	$18,248.00	$18,248.00	n/a	No
34	Contents at [professional office]	$2,858.00	$2,858.00	n/a	No
35	Contents at C4 [Canberra] (in storage)	$4,753.00	$4,753.00	n/a	No
36	Contents at C6 [Canberra] (in storage)	$5,503.00	$5,503.00	n/a	No
37	Gold Coast contents	$5,000.00	$5,000.00	n/a	No
38	Wife	Other
39	BMW car	$0.00	NK
40	Inheritance from her parents - property at Ankara (Turkey)	$20,000.00	NK	n/a	Maybe
Total	$1,313,479.00	$1,413,945.00
Addbacks
Ownership	Description	Wife's Value	Husband's Value	Requires Expert Evidence
41	Husband	Paid family law legal fees	$111,579.00	$111,579.00	n/a	No
42	Husband	Proceeds of sale of husband's wine	$12,057.00	$12,057.00	n/a	No
43	Husband	[S property] proceeds	$57,000.00	$57,000.00	n/a	No
44	Husband	Whitegoods retained and disposed of	$2,000.00	$800.00	n/a	No
45	Husband	Boat insurance received by husband	$30,500.00	$30,500.00	n/a	No
46	Husband	Monies that His Honour Justice Watts directed come out of the [regional NSW] Land proceeds which the husband applied to tax debts of [SE] Pty Ltd	$294,276.00	$294,276.00	n/a	No
47	Wife	Paid family law legal fees	$91,445.00	$145,000.00	n/a	No
48	Wife	[S property] proceeds	$57,000.00	$57,000.00	n/a	No
49
Total	$655,857.00	$708,212.00
Liabilities
Ownership	Description	Wife's Value	Husband's Value	Requires Expert Evidence
50	Joint	[C property] mortgage	$2,401,821.00	$2,392,000.00	n/a	No
51	Joint	[C property] land tax	$154,915.00	$60,000.00	n/a	No
52	Joint	Costs of sale of [C property] (say 2%) + CGT	NK	$120,000.00	n/a	No
53	Joint	[D property] mortgage ([F Finance])	$0.00	$0.00	n/a	No
54	Husband	[Tian] Trust – [Sydney offices] mortgage	$0.00	$0.00	n/a	No
55	Husband	[SE] Pty Ltd - tax debt	$0.00	$124,865.00	$0.00	No
56	Husband	[SE] Pty Ltd - liquidators fees	$0.00	$16,000.00	n/a	No
57	Husband	[SE] Pty Ltd - CBA visa	$0.00	$641.00	n/a	No
58	Husband	Credit Cards:-
59	WBC Mastercard #6286	$0.00	$9,780.00	n/a	No
60	CBA visa	$0.00	$35,256.00	n/a	No
61	WBC Mastercard #6834	$0.00	$7,662.00	n/a	No
62	AMEX gold	$0.00	$14,085.00	n/a	No
63	AMEX platinum	$0.00	$89,955.00	n/a	No
64	Husband	Criminal law fees:-
65	[husband’s brother] personal loan	$0.00	$75,000.00	n/a	No
66	[HS] personal loan	$0.00	$26,289.00	n/a	No
67	[TD] personal loan	$0.00	$48,135.00	n/a	No
68	Barristers fees	$0.00	$15,389.00	n/a	No
69	[H Tian]	$0.00	$1,750.00	n/a	No
70	Husband	[Husband’s brother] jewellery debt	$0.00	$25,900.00	n/a	No
71	Husband	2005/2006/2007 tax debt	$47,073.00	$47,073.00	$47,073.00	No
72	Husband	Child support arrears	$0.00	$96,000.00	n/a	No
73	Wife	Gold Coast mortgage	$879,000.00	$862,000.00	n/a	No
74	Wife	2003/2004/2005/2006/2007 tax debt	$215,437.00	$215,437.00	$215,437.00	No
75	Wife	Credit Cards:-
76	CBA Mastercard	$31,000.00	NK	n/a	No
77	Wife	[Larson] Pty Ltd:-
78	[P Finance] goodwill Loan 7972	$375,000.00	$0.00	n/a	No
79	[P Finance] Car Loan 7674	$47,164.00	$0.00	n/a	No
80	[P Finance] Fixture and Fitting loan 9022	$44,941.00	$0.00	n/a	No
81	Wife	[LF] personal loan	$25,500.00	$0.00	n/a	No
82	Wife	[GK] personal loan	$50,000.00	$0.00	n/a	No
83	Wife	[VA] Associates	$18,000.00	$0.00	n/a	No
84	Wife	Unpaid [C property] repairs including Tiler ($3,000), Kitchen cupboards ($4,000) and Inclinator ($18,000)	$25,000.00	$0.00	n/a	No
85	Wife	[…] painters	$10,000.00	$0.00	n/a	No
86	Wife	Costs of sale of Gold Coast Apartment (say 2%)	$19,000.00	$19,000.00	n/a	No
87	Wife	Legal fees owed to Meyer Pigdon Family Lawyers	$118,432.00	$0.00	n/a	No
Total	$4,462,283.00	$4,302,217.00
Superannuation
Member	Fund & Interest	Wife's Value	Husband's Value	Expert
88	Husband	First State Super	$38,475.00	$38,475.00	n/a	No
89	Wife	[I Superannuation]	$217,000.00	$217,000.00	n/a	No
90
Total	$255,475.00	$255,475.00
Financial Resources
Ownership	Description	Wife's Value	Husband's Value	Requires Expert Evidence
91	$0.00	$0.00
92
93
Total	$0.00	$0.00
BALANCE SHEET NOTES
Assets
1	This property has been previously valued but that report is being updated. The single expert, [Mr O] was supposed to inspect the property on Monday 22.9.08.
2	This figure is current as at 31.7.08. The account was previously approx $244,000 but $35,000 was drawn down to pay experts fees as well as a further $30,000 to pay [F Finance] for an outstanding mortgage.
3	Property has been sold. There were no proceeds. There was an outstanding mortgage debt but as per 2 above, this has been paid from the [regional NSW] Land proceeds.
4	Value is as per single expert. The wife may assert the valuation is stale.
5	Value agreed.
6	No value is placed in the balance sheet for this item as the single expert has taken it into account when calculating the figure in item 4.
7	Value is as per single expert. The wife may assert the valuation is stale.
8	No value is placed in the balance sheet for this item as the single expert has taken it into account when calculating the figure in item 7. However, as the husband is likely to seek for the liquidation of [SE] Pty Ltd to be reversed, the figures may change and the wife may seek to include the value of the [luxury vehicle].
9	Value agreed.
10	Husband to provide a share certificate confirming the amount of shares held. Share price will be as at trial.
11	n/a
12	Husband has shown a statement with up to date figure as at 18.9.08.
13	Husband has shown a statement with up to date figure as at 18.9.08.
14	The husband alleges this item was returned to his brother and he had it only on loan. Expert will need to give an opinion of value based on description. [Mr AD] should be retained as single expert. There will need to be evidence and submissions at trial about whether this item is included.
15	Value agreed as per valuation.
16	Value agreed as per valuation.
17	Value agreed as per valuation.
18	Value agreed as per valuation.
19	Value agreed as per valuation.
20	Value is as per single expert.
21	The wife says no value should be placed in the balance sheet for this item as the single expert has taken it into account when calculating the figure in item 20. However, the husband will argue it's not a company asset and is the wife's personal asset.
22	This is the updated figure provided by the wife as at 21.9.08 but a copy of the statement has not been provided to the husband so he is unable to confirm if he agrees with the figure. The wife is to provide an up-to-date statement.
23	The wife says this should be deducted as there is insufficient money to pay it. Matter of evidence and submissions.
24	Value is as per single expert. It has recently been agreed by the wife that this property be sold.
25	Parties cannot reach compromise. Wife has indicated she cannot afford a valuation of the item and is in the court’s hands as to its value. Husband's application will be to take that asset at the wife’s figure. The husband says his figure is derived from the consent orders made between the wife and her former husband in 2000 where the agreed figure for the timeshare was $12,000.
26	n/a
27	This is the updated figure provided by the wife as at 21.9.08 but a copy of the statement has not been provided to the husband so he is unable to confirm if he agrees with the figure.
28	This is the updated figure provided by the wife as at 21.9.08 but a copy of the statement has not been provided to the husband so he is unable to confirm if he agrees with the figure.
29	The husband says that he discovered this account from material he subpoenaed . The husband says the wife opened this account on 9 April 2008 and deposited $20,000 to it. The wife has not provided her response to this.
30	The wife says this figure hasn't changed. She has not however, provided a copy of the statement to the husband so is unable to say if he accepts the figure. A statement will need to be provided forthwith.
31	Value agreed as per valuation.
32	n/a
33	Value agreed as per valuation.
34	Value agreed as per valuation.
35	Value agreed as per valuation however, the items have been taken by the storage company due to non-payment of storage fees. There is an issue about whose fault this was and whether this item is to be included on one party's ledger as opposed to the other.
36	Value agreed as per valuation.
37	Value agreed as per valuation.
38
39	The husband asserts the wife has acquired a second BMW car. The wife disputes this.
40	The wife's parents died in 2007 and the wife and her 3 siblings inherited their 2 properties in Turkey. 1 of the properties has already been sold and the wife says she received $20,000 (which she has applied towards her legal fees) however there is a dispute between the siblings about how the remaining property is to be divided. The husband does not agree with the values and does not necessarily accept that there is a dispute between the siblings as he has not seen any documentation about this.
Addbacks
41
42	Addback agreed.
43	Addback agreed.
43	Matter of evidence and submissions.
45	Addback agreed.
46	The husband says that this tax debt was accumulated solely during the marriage. The wife disputes this and says the money should've been applied in other ways, namely, to the wife's tax debts. Matter of argument at trial.
47	Wife to provide details and up to date figures forthwith.
48	Addback agreed.
49
Liabilities
50	The wife has provided the up-to-date figure as at 18.9.08. She acknowledges that she did not make 3 payments and some interest has accumulated.
51	Husband does not agree to pay for that part of the liability that was incurred post-separation. The husband's figure is the pre-separation amount. The wife's figure may increase as she will be making enquiries about whether a further tax debt has been incurred since this figure was last obtained.
52	The costs of sale will be dependent upon the value of the property which is not known as at 22.9.08. The husband thinks the costs will be about $120,000 as he is hopeful the property will sell for $4mil. This does not include CGT.
53	This debt has now been paid from a drawdown on the [regional NSW] Land proceeds.
54	No value is placed in the balance sheet for this item as the single expert has taken it into account when calculating the figure in item 4 above.
55	Company in liquidation although the husband says he will seek to reverse the liquidation and recommence operation of the company in which case, the debts will crystallise. ATO says that currently, there is no tax (ie. they cannot legally pursue any tax because the company is in liquidation.)
56	Company in liquidation although the husband says he will seek to reverse the liquidation and recommence operation of the company in which case, the debts will crystallise.
57	Up to date bank statement to be provided.
58	n/a
59	There is an issue about whether these are matrimonial debts.
60	There is an issue about whether these are matrimonial debts although the husband acknowledges that most of this debt was accumulated to pay his prior lawyer, Karras Partners.
61	There is an issue about whether these are matrimonial debts.
62	There is an issue about whether these are matrimonial debts.
63	There is an issue about whether these are matrimonial debts although the husband acknowledges that most of this debt was accumulated to pay his prior lawyer, Karras Partners.
64	There is a significant controversy regarding this matter. The proceedings brought by the DPP came about due to allegations by the wife. The trial didn't proceed and the husband seeks to bring the costs he incurred into account. Matter of evidence and submissions.
65	See above.
66	See above.
67	See above.
68	See above.
69	See above.
70	Wife does not agree to debt. Matter of evidence and submissions.
71	This is the updated figure from the ATO as at 18.9.08. The husband asserts that of this sum, approx $36,000 was derived from CGT from the sale of the [regional NSW] Land.
72	Wife says it should not be included as a liability and that there is no evidence from the child support agency that there is any debt outstanding. The husband says the debt relates to his children from a prior marriage.
73	The wife provided this updated figure as at 18.9.08. Some of this is interest that has accumulated because of non-payment of the mortgage by the wife.
74	Liability agreed but matter of evidence and submissions about whether all of the liability is to be included particularly as a portion of it is post-separation.
75	n/a
76	There is a controversy about whether this debt is included and whether it is matrimonial.
77	n/a
78	This liability was incurred post-separation and post the valuation by Forsythes. Husband says it should be exluded. Matter of evidence and submissions.
79	This liability was incurred post-separation and post the valuation by Forsythes. Husband says it should be exluded. Matter of evidence and submissions.
80	This liability was incurred post-separation and post the valuation by Forsythes. Husband says it should be exluded. Matter of evidence and submissions.
81	Husband does not agree to the debt. Wife says there is also interest on top of the figure. Matter of evidence and submissions.
82	Husband does not agree to the debt. Wife says there is also interest on top of the figure. Matter of evidence and submissions.
83	Husband does not agree to debt. Matter of evidence and submissions.
84	Husband does not agree to debt. The wife says she has paid some of the renovations since this balance sheet was first prepared. Matter of evidence and submissions.
85	Husband does not agree to debt and says it was post-separation. Matter of evidence and submissions.
86	This figure is approximate.
87	Husband does not agree to this liability as it is post-separation. Matter of evidence and submissions.
Superannuation
88	This updated figure (and the most recent statement) was provided by the husband on 22.9.08.
89	This updated figure was provided by the wife on 22.9.08 but a statement was not able to be provided to the husband. This will need to be arranged.
90
Financial Resources
91
92
93

Evidence arising from the orders made on 22 October 2009

On 22 October 2009 the matter was before me again with the wife making an application to re-open the case. My determination on that day gave rise to the following further orders:
IT IS ORDERED THAT
1.I grant leave to the Intervener to re-open the evidence for the purpose of tendering a copy of a deed entered into by Meyer Pigdon and [the wife] dated 21 August 2009.
2.By consent of the husband and wife and by way of partial property order:
a)The wife be granted leave to tender a statement of account from the Department of Lands dated 14 October 2009.
b)The wife forthwith sign all documents presented to her by the husband as may be necessary to surrender the lease/licence number […] over the property being contained in Identifier […] and others.
c)The husband forthwith, upon receipt of the documents signed by the wife, cause the surrender to be provided to the lessor/licensor and otherwise cause the termination of the lease or licence.
d)The parties are to cause the sum of $5,848.22 to be forthwith paid to the lessor/licensor from the funds standing to the credit of the parties in the Macquarie Bank account holding the proceeds of sale of the [C] property.
e)The husband at the time of presenting the surrender documents is to use his best endeavours to ensure the current owner of the property, previously owned by the parties at [regional New South Wales[ and sold in about November 2005, is aware of the parties’ intention to surrender the lease/licence and be present at the time of presentation of the surrender documents to the lessor/licensor (Department of Lands).
2.The Court notes the husband will today sign the necessary forms to authorise the Macquarie Bank to draw a cheque in favour of the Lands Department in the sum of $5,848.22 and send that form duly signed by him to the wife by mail to be posted prior to 5.00pm today.
3.I grant leave to the wife to re-open the evidence for the purpose of tendering a settlement statement for the sale of the [Gold Coast] apartment.
4.I grant leave to the wife to re-open the evidence for the purpose of tendering a tax invoice for LJ Hooker in relation to the sale of the [Gold Coast] apartment.
5.I grant leave to the wife to re-open the evidence for the purpose of tendering a latter dated 2 July 2009 from the wife’s solicitor to the solicitor for the National Australia Bank in relation to the sale of the [Gold Coast] apartment.
6.I grant leave to the wife to re-open the evidence for the purpose of tendering a letter dated 21 September 2009 from National Australia Bank to the solicitor for the wife in relation to the sale of the [Gold Coast] apartment and the balance of the debt to the National Australia Bank.
7.I grant leave to the wife to re-open the evidence for the purpose of tendering a letter from ARL dated 23 June 2009 in relation to the […] Council debt of $1,259.20.
8.I grant leave to the wife to re-open the evidence for the purpose of tendering an instalment notice issued 14 October September 2009 from […] Council requiring payment of $1,903.18.
9.I decline the wife’s application to re-open the case to admit into evidence documents from [I] superannuation.
10.I grant leave to the wife to re-open the evidence for the purpose of tendering a copy of a statement from [P] & Son showing a balance of $7,592.50 as owing.
11.I decline the wife’s application to re-open the case to admit fresh evidence of an alleged debt to [a pool company] in relation to the ]C\ property.
12.I decline the wife’s application to re-open the case to admit into evidence a letter from Trinity Law dated 15 October 2009 in relation to the debt said to be owing by the wife to Mrs [GK].
13.I decline the wife’s application to re-open the case to admit into evidence a letter from Hansteins lawyers dated 16 October 2009 and relating to a loan from Mrs [LF] to the wife.
14.I decline the wife’s application to re-open the case to admit update evidence in relation to three loans that were Items 78, 79 and 80 on the trial balance sheet.
15.I decline the wife’s application to re-open the case to admit into evidence an invoice dated 15 October 2009 from [the kitchen company] said to be in relation to work carried out to the kitchen of the [C] property.
16.I grant leave to the wife to re-open the evidence for the purpose of tendering a tax invoice from Rowe Lawyers Pty Limited.
17.I decline the wife’s application to re-open to make further submissions and potentially tender further documents in relation to the application of the proceeds of the ‘[L] Apartments’ in Canberra by the husband.
18.I decline the wife’s application to re-open to give evidence in relation to her contributions.
19.I grant leave to the wife to re-open the evidence for the purpose of tendering a receipt from Fitz-Walter Lawyers entered 17 July 2009 for $2,200 in relation to the cost of sale of the [Gold Coast] apartment.
The orders so made caused the following further evidence to be received.
The deed dated 21 August 2009 between Meyer Pigdon and the wife provided for the settlement of their claims for the sum of $90,000. That sum is to be paid by the wife to Meyer Pigdon from the wife’s entitlement arising out of these proceedings. If there be insufficient funds received by the wife to satisfy the indebtedness the wife is to pay Meyer Pigdon the balance within 28 days of the “Family Law Settlement”.
The effect of the order to pay $5,848.22 to the Department of Lands reduces the funds in the Macquarie Bank account by that sum and so the balance sheet needs to be adjusted.
Exhibits W22, W23, W29 and W24 all relate to the wife’s unit on the Gold Coast. The sale of that unit has now settled and the consequences of that settlement are as follows.
The wife received no funds from the sale, a fact which had been predicted at the time the hearing concluded. The sum of $698,138.81 was paid to the mortgagee, the National Australia Bank. The balance of the deposit was $16,380. Exhibit W24 makes it clear that those funds went to the mortgagee. The wife paid the solicitors, Rowe Lawyers, the sum of $1,085.45 associated with the sale of the Gold Coast apartment. The wife paid Fitz-Walter Lawyers the sum of $2,200 also associated with the sale of the apartment and the negotiations with National Australia Bank to release their security.
Exhibit W25 shows that the balance due to the NAB was a shortfall following the discharge of the mortgage on the Gold Coast apartment which was $190,749. I have adjusted the balance sheet at items 24 (to now reflect a nil value), 73 to reflect a balance of $190,749 and item 86 to nil to reflect that debt has been paid. As the amounts of $2,200 and $1,085.45 were paid by the wife from her income and not from the sale proceeds of the sale of the Gold Coast apartment I need to take that into account under section 75(2) and I will do so.
At about the date of the conclusion of the hearing before me the wife entered into an arrangement with the Council to pay the outstanding rates on the leasehold property the parties had held until the orders I made on 22 October 2009. The amount which the wife undertook to pay at $100 per week was $1,903.18. I have assumed for the purpose of this case that the wife has made that payment. I propose to take that payment into account under section 75(2).
The wife tendered an up-to-date invoice/statement from P & Sons Pty Limited (regarding the C property) showing a balance of $7,592.50. This balance has been reduced from the sum of $10,266 which appeared at item 84 on the balance sheet. I propose to leave the figure of $10,266 in the balance sheet and the effect will be that the wife will be refunded, from the final distribution to her, the additional payments she has made.
Exhibits W31 and W32 tendered by the wife on 22 October 2009 arise out of the orders made at the conclusion of the hearing requiring the wife to prepare and file amended income tax returns for particular years.
Exhibit T3 is a document tendered by the ATO which states the consequence to the debt owing to that body by the wife following the acceptance of the amended returns. The effect is that the debt now due by the wife to the ATO is $6,441.17.
As can be seen from earlier (and later) determinations by me in relation to the wife’s tax debt, I had removed the debt from the balance sheet which was then stated to be $113,113.That will continue to be the case.
The following determinations were made on the balance sheet. If a particular entry is not referred to in the following reasons it is because at the trial there was no argument advanced on the item.

Item 1: the C property

During the hearing the sale of the C property was completed. The net sale proceeds were $330,394.74. There are arguments about add backs in relation to this entry, however I will deal with those later when considering the add back section of the balance sheet. I will round this figure out to $330,395. From this sum must be deducted the amount ordered to be paid to the Department of Lands on 22 October 2009. That sum was $5,848.22. The balance of the sale funds therefore will be $324,547.

Item 2: the regional NSW land sale proceeds

The parties agree that the sale proceeds, which were deposited into an interest bearing account with Macquarie Bank has a balance of $4,931.88. I will round it off to $4,932 and insert it in the balance sheet.

Item 10: IAG shares

The parties agreed to accept the sum of $1,000 as the value of the husband’s IAG shares.

Items 12 and 13: the husband’s bank accounts

The parties agreed to remove from the balance sheet their respective bank accounts as the accounts represent post separation savings and are of little value in the circumstances of this case.

Item 14: the husband’s Rolex watch

The husband’s evidence is that the Rolex watch was never paid for by him. He said he returned it to his brother. There is no evidence from the husband’s brother, however the husband says that his brother will not speak with him because of the transactions during the marriage, which saw the parties paying for jewellery purchased from the husband’s brother in the USA over a lengthy period of time and which saw the husband’s watch not paid for at all.
At the end of the day I am left to rely upon my assessment of the husband’s credit on this point. The wife did not know whether the husband had returned the watch to his brother. She denied the suggestion that the watch had not been paid for by the parties. There was nothing about the evidence given by the husband in relation to the watch which led me to have concerns about its veracity.
I propose, therefore, to accept the evidence of the husband on this balance sheet entry. The item will be removed.

Item 21: the wife’s BMW motor vehicle

The wife agreed to include the vehicle at the sum of $52,000 as valued for the case.

Item 22: the wife’s St. George Bank account

This is the bank account of the wife. The parties agreed not to include this item in the balance sheet consistent with the exclusion of the bank accounts of the husband as referred to earlier.

Item 23: the wife’s loan account with Larson Pty Ltd

The wife argued that this item should not be included in the balance sheet as it is unlikely to be realised on a winding up of the company. The difficulty about that approach is that the value of the company Larson Pty Ltd is included in the balance sheet as $Nil. In achieving that value the amount of the loan account has been taken into account. I propose therefore to include the loan account in the balance sheet.

Item 24: the Gold Coast Apartment

This property was sold just prior to the commencement of the hearing in June. The sale price was $750,000. The sale has now been completed. I will remove this item from the balance sheet as there were no surplus funds from the sale. In fact there is a residual liability, which I will refer to later.

Item 25: the value of the wife’s time share

The husband agreed to accept the value of the time share attributed by the wife. The husband was relying upon a value of $12,000 and he said that was the value attributed to the item by the wife in the divorce case with her former husband in 2001.
I pointed out that I could not accept that figure as a value given the expiration of eight years since that valuation. The wife had said in her affidavit that she signed a power of attorney in favour of the husband’s brother when in the USA during the course of the cohabitation, in exchange for money she owed for her jewellery. It was agreed, however, that the power of attorney had never been exercised and the wife had since that time kept the payments current in order to preserve the time share. It seems that it is clearly still the wife’s property. The value will be $5,149 being the sum submitted by the wife.

Items 27 to 30: the wife’s bank accounts

As set out earlier the bank accounts of the parties will not be included in the balance sheet.

Item 35: the contents at C4 Canberra (in storage)

The parties agreed that this item should be excluded. There had been some issues raised in the affidavit of the husband, in particular, about this item. No cross-examination on the topic took place.

Item 39: BMW of the wife

This was a double entry and the parties agreed it should be excluded.

Item 40: the wife’s inheritance

The husband agreed to accept the wife’s value for this item, whilst at the same time protesting about the value.

Items 41, 44, 46 & 47: items the parties had included as add-backs

After some debate the parties did not strenuously oppose me removing these items from the balance sheet and taking them into account under section 75(2). There are a number of reasons I suggested these entries might be considered in that manner in this particular case. Those reasons are as follows.
Each of the parties have paid their legal fees from income earned post separation or as part of the funds they received from the distribution of $57,000 to each of them from the sale proceeds of the S property. The wife’s legal fees paid should be $185,825 as disclosed in the evidence from Ms Pigdon, the intervener in the proceedings and the former solicitor for the wife. To that evidence needs to be added the advice from Mr Connor as to the amounts paid to him after Ms Pigdon ceased acting for the wife.
The decisions of the Full Court in Farnell & Farnell (1996) FLC 92-681 and Chorn and Hopkins (2004) FLC 93-204 and subsequent decisions suggest as a guideline for trial Judges that usually it will be best to exclude paid legal costs from a balance sheet where the payment has been sourced from funds acquired or earned post separation.
In relation to the whitegoods sold by the husband ($2,000 or $800), there is no clear evidence of value here and so I do propose to exclude the item and have regard to it under section 75(2).
Each of the parties received $57,000 from the sale of the S property and each has used those funds. These sums fall squarely into the category of items the Full Court in Chorn and Hopkins (supra) said might be “added back” in a balance sheet.

Items 45 and 46:

Item 45, the boat insurance, should be an add-back as it related directly to an asset of the parties at separation.
Item 46 is the payment of $294,276 in tax debts of SE Pty Limited. The payment was made from the sale proceeds of the regional NSW land following an order of the Court made on 21 February 2006. Since that time I have made orders for the payment of taxation from the same pool of money. On 26 September 2008 I ordered that $122,927.47 be paid from the sale proceeds of the regional NSW property to the ATO on account of the wife’s taxation liability. I also ordered that the sum of $47,072.53 be paid from the same fund to the ATO on account of the husband’s tax liability.
I will deal with the payment of taxation by the parties at the time I discuss the parties’ contributions.

Item 49: an adjustment to add-back items against the wife arising from the orders of 31 May 2005

The husband argues that there should be included in the balance sheet an adjusted figure as against the wife arising from the orders of 31 May 2005. The matters the husband says should warrant being added back are as follows:
(a)The difference in the mortgage balance as at 31 May 2005 ($2,371,172 as at 18 April 2005, Exhibit H9) and the amount of $2,531,151 (Exhibit H18) paid to the mortgagee on the completion of the sale of the C property. That is the sum of $159,979.
(b)Amount payable to Sydney Council for outstanding rates in the amount of $10,849.
(c)Amount payable to Sydney Water for unpaid rates in the amount of $3,370.
(d)Amount paid to the tenant to secure vacant possession in the amount of $89,175.
(e)There was an amount of $280,569 paid to the Office of State Revenue. This was a payment of outstanding land tax. At the date of the orders (31 May 2005) the evidence establishes there was $43,577 owing in relation to the 2004 land tax year and $33,993 owing for the 2005 land tax year (commenced 1/1/2005). That is a total of $77,570. That amount was unpaid when the orders of 31 May 2005 were made. The wife in her evidence agreed with that figure.
(f)The Orders made 31 May 2005 included the following:
6.Any Capital Gains Tax, Vendor Duty or Land Tax (“relevant liability”) payable in respect of the property [C] on the sale thereof shall be apportioned between the parties as follows:
6.1that amount which is attributable to the ownership of the property from the date of purchase to this date shall be borne by the parties in such proportions as would have been borne by them had the property been sold on this day;
6.2that amount which is attributable to the ownership of the property after this date (“future period”) shall be borne by the wife;
that is in accordance with the following formula:
that the proportion of the relevant period as is reflected by the equation future period [over]
total period
shall be paid by the wife where the initial period is from 13 March 2003 to date and further period is from this date to the date of exchange of Contracts for sale.
7.The wife shall provide to the husband written evidence in relation to the payment by her of any obligation or liability pursuant to these Orders, within seven (7) days of such payment being made by her, including without limiting the generality of the foregoing, written evidence of the mortgage repayments made by her to the National Australia Bank.
(g)The mathematic exercise required by Order 6 of the Orders of 31 May 2005 would see the wife being solely responsible for 64% of the total liability for land tax at the time of sale. The amount paid was $280,569 and 64% of that figure is $179,564. The husband had submitted that the amount the wife should be responsible for was $202,999. That figure took into account the proportions of interest which formed part of the final payout figure. Although there is some logic in that approach I am minded (probably bound) to adhere to the formula agreed to by the parties on 31 May 2005.
(h)It should be noted that the Orders of 31 May 2005 carried a notation that the payments made by the wife may be assessed by the trial Judge as contributions. The particular order stated:
NOTED that it be a matter for determination by the Trial Judge as to the apportionment of contributions between the parties to the intent that if the wife is required to make any payment of Land Tax, Vendor Duty or Capital Gains Tax that such payments may be considered in the Trial Judges discretion as a contribution to her, and Orders numbered 5 and 6 are consented to by the wife without prejudice to her ability to seek to have such payments taken into account as contributions by her, although nothing contained herein is to be construed as a concession by the husband that the wife is entitled to seek that taking into account of such payments as a contribution.

I have made orders for the payment of taxation from the same pool of money. On 26 September 2008 I ordered that $122,927.47 be paid from the sale proceeds of the regional property to the Tax office on account of the wife’s taxation liability. I also ordered that the sum of $47,072.53 be paid from the same fund to the tax office on account of the husband’s tax liability.
The husband complained bitterly at the time I ordered the payment of the $122,927.47 because he said only part of the debt of $122,927.47 related to the tax years of the parties’ cohabitation. Further he argued that the wife had no tax liability for the tax years 2003 and 2004 until she lodged amended returns in 2006. He submitted she only lodged those amended returns when she realised there was a large disparity in the parties’ earnings during the cohabitation and consequently it might be adverse to her property claim in this Court.
The affidavit of Ms U filed 9 February 2009 provides evidence from the ATO setting out the running accumulation of debt by the wife to that body. That affidavit shows that the wife’s amended tax return for the 2003 tax year gave rise to an assessment in the sum of $21,820 and for the 2004 tax year her amended return gave rise to a further assessment of $34,788. Thereafter interest was charged and the 2005 tax year assessment added on 6 June 2006. That assessment called for payment of $56,984.
The parties had separated on 21 August 2004 and therefore only 14.2% of the 2005 assessment could be attributed to the period of the marriage. The total debt of the wife, therefore, which would have been owed to the ATO at the date of the separation (taking into account the 2003 and 2004 assessments at the amended values, together with 14.2% of the 2005 tax year) is $64,699. The wife incurred penalties/interest arising from the reassessments $10,942. These clearly arose as a result of the failure of the wife to have filed the correct return at the appropriate time and, in my view, the husband should not be required to contribute to those charges at this point. I will take into account that the wife has had to meet those interest charges when I consider the section 75(2) matters.
On 6 June 2007 the wife’s assessed tax for the 2006 tax year was issued calling for payment of $40,947. That assessment has since been amended to $3,995.69.
The payment of $122,927.47 was made on 8 October 2008. At that time the wife’s tax debt was $215,437.45.
As stated earlier I calculate the primary tax which the wife should have paid at the date of separation to be $64,699 (assuming the benefit of hindsight following the 2005 assessment).
As a consequence of all the above it appears the wife should only have had paid from the parties joint funds the sum of $64,699 and not $122,927.47. In the circumstances the fairest way to deal with this aspect of the case is to have an add-back in the sum of $58,228 as against the wife in the balance sheet.
The husband had paid from the same fund at the same time the sum of $47,072.53. The description in the balance sheet (item 71) identifies the relevant years of income which generated the debt. Those years are post separation and therefore the amount paid should be included as an “add-back”.
As referred to earlier, on 21 February 2006 Justice Watts ordered that the proceeds of the sale of the regional NSW land be partially applied to meet the outstanding tax debt of SE Pty Limited in the sum of $294,276.
In the judgment of Justice Watts delivered on 21 February 2006, His Honour carefully examined the evidence available from the ATO and concluded that in October 2004 the tax owed by the company was $329,334. The liability arose because the company did not withhold tax instalments from its employee’s wages. The evidence to support that finding as correct is before the Court as Annexure Q to the husband’s affidavit filed 17 September 2008.
His Honour found that the company accumulated a liability of $260,000 in the last 10 months of the marriage and when added to earlier defaults the amount (one assumes with penalties and interest) totalled $329,334.
Both parties relied upon the Judgment and Orders of Justice Watts delivered in February 2006, as above referred to.
It seems, therefore, that the amount of tax paid on behalf of SE Pty Limited from the sale proceeds of the regional NSW property was incurred as a result of income earned during the parties’ cohabitation.
SE Pty Limited was placed into liquidation with a tax debt of $124,865. The husband wishes to have that debt paid out. It is reasonably clear the tax debt now remaining is attributed to income earned during the period of cohabitation. There are substantial penalty sums included in that debt.
The Deputy Commissioner for Taxation is a party in these proceedings. The sum of $113,113.20 was sought by the Commissioner from the wife. Following the evidence given on 22 October 2009 that sum was amended to $6,441.17.
During the hearing before me it became apparent that the wife may have presented her 2006, 2007, 2008 and 2009 (not yet ready) tax returns on an incorrect basis of assessment of her taxable income. The wife was the subject of Orders made by consent on 31 May 2005. They provided for the wife to be entitled to occupy and enjoy the parties’ C property. The orders provided for the wife to be responsible for the payment of all outgoings on the property including mortgage payments, land tax, rates and taxes. The wife has presented tax returns which return only half of the rental received for the property and claimed only half of the expenses, notwithstanding that for some time she paid all of the expenses of the property and was required to do so by order of this Court.
During the hearing before me the requirement for the Deputy Commissioner of Taxation (the second respondent) to be present during the hearing was dispensed with. The second respondent made submissions on the last occasion the matter was listed for hearing which made the position clear in terms of the orders being sought by that respondent.
On the first day of the trial before me on 9 June 2009, the second respondent appeared to ask questions of the husband which took place and then the second respondent left. On the third day of the trial after discussing the matter with the parties I asked the second respondent to provide advice as to whether in this case the wife would be entitled to claim the whole of the liabilities for the C property post 31 May 2005 and be required to account for the whole of the income received by her from the property pursuant to the orders of the Court. The second respondent advised that, on the face of the facts, there appeared to be no reason why the wife could not do that. Accordingly, I ordered the wife to lodge with the second respondent within six weeks amended tax returns together with her 2009 tax return.
The Commissioner of Taxation no longer pursues an order against the wife.
The parties separated in August 2004 and thus the outstanding tax liability of the wife relates to post separation earnings. In those circumstances, the item should not be added to the balance sheet. The liability, whatever it might transpire to be, should be considered under section 75(2).
The husband seeks that the amount payable to the liquidator of SE Pty Limited be included as a liability on the balance sheet and that it be paid from the parties’ funds.
As I have said in relation to item 55 on the balance sheet, it is appropriate to include the amount necessary to pay the liquidator to have the liquidation set aside. The debt to the ATO relates substantially to the income earned during the period of cohabitation.

Contributions of the Parties

Husband’s contributions

The husband, pursuant to the directions made prior to the trial, provided a list of the contributions relied upon by him. I have considered that document and my findings referred to earlier in these reasons, to reach the following conclusions in relation to the husband’s contributions.
I find the husband’s contributions are as follows:

Initial Contributions

The husband had acquired an apartment at M, Canberra for $270,000 shortly before the cohabitation commenced. He had borrowed $240,000. The husband’s property at the M Apartment was used as a residence for the parties from the commencement of cohabitation for a period of time
He owned a Mazda motor vehicle. In an admission against interest the wife says in her affidavit that the car had a value of $10,000. The husband had a wine collection. Again, in her affidavit the wife says this wine had a value of approximately $30,000. In June 2001 the husband caused to be incorporated the company named SE Pty Limited.
The husband was a member of a superannuation fund which had a value (as disclosed by the wife) of about $28,000.

Financial Contributions

The husband’s income during the marriage as disclosed in his tax returns was as follows: 30/6/2002, the amount of $387,548; 30/6/2003 the amount of $375,650 and in 30/6/2004 the amount of $524,089. The total taxable income was $1,287,287. I accept that the husband contributed all of his income during the marriage.
In the early part of the cohabitation the husband’s company SE Pty Limited acquired a luxury motor vehicle. The vehicle cost $150,000. The income of the company was essentially generated by the husband.
Throughout the affidavit evidence and the argument in the trial much was made of each party’s particular financial input to the acquisition of particular properties and the contributions towards the mortgage instalments and other expenses on the properties. Until the date of separation I find that such matters are largely irrelevant as each claims initial contributions (as set out herein) together with the contribution of their income. It was that income which met all those expenses. To count those contributions in addition to taking into account the incomes of the parties would, in my view, amount to a double counting.
The husband caused the Sydney professional offices to be acquired by the Tian Trust at the point of separation. Since that time the husband has provided the funds, through rental, for the trust to be able to service the debt owing on the property.
Post separation the husband has contributed towards payments of the following mortgages.
·The C property mortgage (half of the monthly payment) from September 2004 until May 2005;
·The D property mortgage in total until separation. Then from September 2004 to June 2005 SE Pty Limited paid the mortgage instalments at $2,613 per month.
·The S property mortgage from separation. The property was sold in October 2004.
·The N property mortgage from separation until June 2005 at $3,169 per month.
·The regional NSW property mortgage to the extent that required payment post separation.

Non-financial Contributions

The husband personally took over the sale of the M apartment and effected a sale of same.
The husband made contributions associated with the sales of the S property and the regional NSW property. The husband took over the selling of the S property when the real estate agent failed to sell the property.
In relation to the C property the husband was appointed, against his wishes, as trustee for sale of the property as the wife did not appear to be making any headway in negotiating with the tenant or with selling the property. The husband negotiated with the tenant and secured a legally binding agreement with the tenant. Once that was done the property could be offered for sale which is what occurred. The settlement of the sale of the property was effected during the trial. I regard this contribution of the husband as a very significant one. If the husband had not been able to achieve the agreement with the tenant it seemed the parties were facing litigation on a number of fronts and the probability of a mortgagee sale.
The husband negotiated a lease with Telstra in relation to the regional NSW property which saw a substantial increase in the annual rent paid.

Homemaker

As referred to earlier I am satisfied that the husband made a significant contribution as a home maker during the cohabitation. I assess the parties’ contributions in this regard as equal.

Wife’s contributions

I have had regard to the documents produce by the wife to the court which set out submissions. I have had regard to the oral submissions made by her and made on her behalf. I have had regard to my findings in these reasons to conclude the wife’s contributions were as follows.

Initial Contributions

The wife had the following property:
·T property, Canberra $1,100,000. This property was used as security for borrowings which were used to acquire properties and other assets during the cohabitation. It is therefore a very significant contribution.
·The property was subject to a mortgage of either $465,000 or $459,000.
·BMW car which the husband admits had a value of $100,000. The car was on lease and therefore had a financial encumbrance.
·A wine collection which the husband says was worth $3,000.
·The wife had a superannuation entitlement of $102,390 (exhibit W15.).
·Shares in Larson Pty. Ltd.
·Half interest in USA Timeshare.
·Furniture and contents of the T property.

Financial Contributions

The wife’s tax returns show income for the wife during the cohabitation as follows: in 30/6/02 the amount of $240,335; in 2003 the amount of $234,598 and in 2004 the amount of $235,242. The wife’s total taxable income during the cohabitation was therefore $710,175.
The wife provided the deposit of $5,000 for the luxury car acquired by SE Pty Limited. This contribution of the wife’s is taken up in her income earned in the first year of cohabitation.
Post separation the wife paid the mortgage on the N property from June 2005 until November 2005 at $3,169 per month.
The wife made payments towards the mortgage on the D property from June 2005 until March 2006 in the sum of $2,613 per month.
The wife had contributed towards the S mortgage until the date of separation.
The wife made half payments on the C mortgage from separation until 31 May 2005 and then from 31 May 2005 until about May 2008 the wife paid the whole of the monthly payments. The payments were in the order of $16,500 per month. She made two payments of $4,400 in August 2008.
Between 31 May 2005 and the date of sale of the C property the wife carried out renovations costing $246,400. She borrowed $240,000 of those funds, some of which is still owed by her.
I have included in the balance sheet add backs against the wife in relation to the C property of $442,937. This then must be treated as a contribution by the wife.
I also need to take into account the income received by the wife from the property. This included a lump sum of $210,000 from the last tenant. I have taken that payment into account by applying a discount to the contribution of $442,937 referred to in the previous paragraph.
Post separation the wife acquired a BMW motor vehicle with borrowed funds from P Finance. She has been responsible for paying the finance and running the vehicle (included in the balance sheet).
Included in the balance sheet at item 40 is the wife’s inheritance of $20,000 to which the husband made no contribution.

Non-Financial Contributions

The wife assisted the husband in running his practice in the early days of his commencing same in Canberra.
The wife took charge of the selling of the D property following the separation. The property took 12 months to sell.

Homemaker Contributions

As stated earlier I assess the parties’ contributions as a home maker as being equal.

Contributions to Superannuation

There is no specific evidence about the parties’ contributions to superannuation during the course of their cohabitation. The wife had superannuation worth $102,390 at the date of cohabitation. The husband had superannuation worth $28,000 at the time they commenced their cohabitation.
The husband’s superannuation as set out in the balance sheet is $34,333. The wife’s superannuation in the balance sheet is $167,746. However, the wife has withdrawn $18,638.40 this year to pay legal fees. Prior to the withdrawal her benefit had a value of $186,384. I will use the figure of $186,384 to calculate the parties’ entitlements. The increase in the parties’ superannuation entitlements during the cohabitation was $90,327.
The husband’s income during the course of cohabitation was greater than that of the wife. Contributions to superannuation predominantly come from income.
There is no evidence as to what payments were made by each of the parties to their superannuation during the cohabitation. I have assumed that the funds earned some income during the cohabitation. The wife’s fund was larger in the first place and would therefore have contributed to the growth through income far more than the contribution from the husband’s fund. Both have their superannuation in managed funds.
Doing the best I can I consider the parties have contributed to the increase in their superannuation in proportions of 60% to the husband and 40% to the wife. The husband’s higher income being balanced, to some extent, by the wife’s larger sized fund initially and therefore having a greater growth potential.
The husband therefore is entitled to $54,196 of the growth in superannuation with a total entitlement of $82,196 in superannuation and the wife is entitled to $36,131 of the growth giving her a total entitlement of $138,521 out of an adjusted pool of $220,717.
As will be seen, hereafter the husband has sought a splitting order and the wife is opposed to such order. I would not impose a splitting order on the parties in this case even if that was procedurally fair to consider making such an order. The parties are self represented. They have an appalling relationship. It is most unlikely they would be able to implement an order for the splitting of the wife’s superannuation without further involving the court. The splitting of the wife’s superannuation to the husband may well have a severe and adverse psychological impact upon her which could adversely impact upon her capacity to earn income. These parties need a clean break from each other.
I propose to deal with this aspect of the case by taking into account under section 75(2) on behalf of the husband that he will be receiving $47,863 less of the superannuation pool than he has been determined to be entitled to on an assessment of contribution to the parties’ superannuation.

Submissions on Assessment of Contribution

The husband submitted that the contributions of the parties at the date of separation should be assessed as equal. He was not in a position to submit what the division should be as at the date of trial. He said; “I want you to decide.”
The wife’s counsel submitted that the assessment of contribution at the date of separation should favour the wife in proportions 80% to her and 20% to the husband. It was submitted that the division should not be determined to have altered at the date of the trial.

Conclusion on Assessment of Contributions to the Non-Superannuation Assets at the Date of Trial

The initial contributions of the wife were vastly superior to those of the husband. The wife had not less than $650,000 in net assets and the husband had not less than $70,000 in net assets. The wife’s initial contribution included her real estate with equity of about $635,000. This property was used as security to establish the parties’ real estate acquisitions.
The financial contributions favour the wife slightly. Assuming a discount of about 40% for the husband and about 30% for the wife in relation to their taxable income to allow for tax paid in respect of same and including in favour of each party all of the contributions referred to above together with a discount as against the wife’s contributions for the lump sum rental received by the her from the tenant the assessment of financial contributions does favour the wife.

The assessment of the non financial contributions favours the husband significantly.
The parties are assessed to have contributed about equally as home makers.
The cohabitation was over a short period of 3 years.
I conclude that the contributions of the parties should be assessed as 30% to the husband and 70% to the wife.

Section 75(2) Matters

The parties’ cohabitation lasted for only three years.
The husband is 46 years of age. He practices a profession. His Financial Statement sworn 22 September 2008 shows a weekly income of $5,000 before tax. His latest tax return shows that he had a taxable income for the year ended 30 June 2008 of $66,629. That return shows gross income of $257,252 and expenses of $190,623. The husband’s income earning capacity has, on his evidence, been reduced from that which he had anticipated to earn as a result of these proceedings, and in particular the criminal proceedings. I accept that the husband being charged with a criminal offence was a debilitating effect upon the husband and his capacity to earn an income.
I consider the husband’s income earning capacity has the potential to increase significantly once he has these proceedings behind him and he can concentrate on his career.
The wife is 56 years of age. She practices a profession. Her taxable income for the 2009 year was $410,741 Loss. The income attributed to her practice was $212,403. The losses incurred by the wife arose from the Gold Coast investment apartment and the C property. The wife will have neither of those properties draining her now, however, she will still have to pay off the balance of the mortgage owing after the sale of the Gold Coast apartment.
I consider that the wife’s earning capacity must have been adversely affected by all the work she has had to carry out in appearing for herself and collecting evidence. I consider it likely that, without the stress of the proceedings to trouble her further, she should be able to concentrate on her practice and develop that further.
For a period of time post 31 May 2005 and prior to the wife leasing the C property in about May 2006 the wife had the occupation of that property to the exclusion of the husband.
Exhibit H18 discloses that the husband has a tax liability of $15,588 arising from his 2008 tax return.
During the cohabitation the wife expended $15,000 on liposuction and other personal cosmetic surgery.
During the cohabitation the husband had his children stay with him during most weekends. He also had them stay with the parties during school holidays. I accept that the wife assisted in the care of the children and made either direct or indirect payment towards the support of the children during those times.
Between the date of cohabitation and the separation the husband paid into a scholarship fund for his children. The amount paid was an increasing sum from $4,000 in the year of cohabitation to $6,000 in the year of separation.
When the parties first commenced cohabitation the wife’s children lived with the parties each alternate week for a short while. Later one of the wife’s children lived with the parties for some considerable period. I accept that the husband assisted in the care of the children and made either direct or indirect payment towards the support of the children during those times.
Each of the parties paid child support during the cohabitation. They each paid about $70,000 over the cohabitation. In addition there was a period when the wife’s son lived with the parties and during that time the wife received child support from that child’s father.
During the cohabitation the parties lived at a high standard of living. This included about 19 overseas trips during which the parties travelled first class and stayed in four and five star hotels. The parties might reasonably be expected to live at a moderate to high-end standard of living.
During the time that the husband engaged Karras Partners Lawyers as his solicitor he paid the sum of $111,000, the entirety of which was paid on his credit card. The wife has paid $185,825 in legal fees and faced a claim of $118,432 (now settled at $90,000) to Ms Pigdon, of Meyer Pigdon, the Intervener. The wife paid further sums to Mr P. Connor, of counsel, for legal fees. The precise amount paid or incurred is not in evidence.
I have removed from the balance sheet the credit card liability of the parties. The husband’s credit card debt is $156,738. The evidence suggests that at least some significant portion of that debt is related to paying legal costs, either in relation to the proceedings in this Court or arising from the criminal charges the husband faced. The wife’s credit card debt is $31,000. Again it is reasonable to assume that at least some part of that debt was incurred in the payment of legal costs. I will take these debts into account.
Post separation the husband paid child support for his children in the sum of $2,000 per month until January 2005. Since that time he has not paid, however the husband says he holds himself morally bound to pay, arrears of $70,000. There is no child support assessment or child support agreement. The children’s mother could apply for child support and an assessment may be back dated. In any event, the husband holds himself bound to pay to the children’s mother the agreed rate of child support, namely $2,000 per month. I will take into account that the husband may be required to pay at least some of these monies by an assessment made by the Child Support Registrar and/or by personal obligation he has undertaken to the children’s mother.
I excluded item 44 from the balance sheet as the value was not agreed. I here take into account the fact that the husband has disposed of items of whitegoods which had a value of either $800 or $2,000.
I excluded from the balance sheet the husband’s claim for paid legal fees associated with the defence of the criminal charges which arose directly from the wife’s complaint to the police. The husband paid $166,563 in legal costs. All of the money was borrowed and the husband has yet to pay it back. I take that into account at this time. I said during the trial that the only manner in which the Court could deal with this issue is to take it into account under section 75(2). That which can be taken into account is that the husband was charged. The charges were withdrawn. The husband paid legal costs of $166,563. The husband has borrowed funds to meet those costs.
Following the sale of the Gold Coast apartment the wife paid from her income the solicitor’s costs which were incurred in the sale of the property and could not be funded from the sale proceeds. The total amount paid was $3,285.45.
Following the completion of the sale of the Gold Coast apartment by the wife in July 2009 she entered into an arrangement with the National Australia Bank in relation to the shortfall in payment of the sum owing on that property and is paying $1,000 per month. She has agreed to pay the bank 25% of the amount she receives from the family law case.
At about the date of the conclusion of the hearing before me the wife entered into an arrangement with the Council to pay the outstanding rates on the leasehold property the parties had held until the orders I made on 22 October 2009. The amount which the wife undertook to pay at $100 per week was $1,903.18. I have assumed for the purpose of this case that the wife has made that payment. I here take that payment into account in favour of the wife.
The affidavit of Ms U filed 9 February 2009 provided evidence from the Australian Taxation Office, setting out the running accumulation of debt by the wife to that body. When the wife was permitted to re-open her case in October 2009 she tendered documents which show that her tax liability is now $6,441.17. This liability relates to post separation income years and should not, therefore in my view, be included as a balance sheet item. I will take this into account under section 75(2).
In the wife’s affidavit there was extensive reference to matters of violence alleged to have been perpetrated by the husband upon the wife. The husband denies the alleged violence. No Kennon v Kennon (1997) FLC 92-757 case was referred to in submissions. As a result I have ignored those parts of the wife’s affidavits which allege violence by the husband upon the wife. In any event, I conclude that the evidence would not establish any justification in the Court taking the type of approach which was outlined by the Full Court of the Family Court of Australia in Kennon v Kennon (supra).
I accept the husband assisted the wife’s son, D, who lived with the parties during part of their cohabitation. The husband said he taught D to drive a motor vehicle. I accept that. This is not a matter which can be taken into account as a contribution as it does not fit within the category of contribution defined by section 79(4)(c). I will take it into account under section 75(2). Likewise the contribution made by the wife to the care of the husband’s children I will take into account under section 75(2).
Since the wife left the property at C she has continued to reduce the small debt to the tiler who carried out work at the house.
The Intervener, Meyer Pigdon, tendered documents to show that the debt for legal fees owed by the wife had now been agreed between the wife and Meyer Pigdon to be $90,000. If there be insufficient funds received by the wife to satisfy the indebtedness, the wife is to pay Meyer Pigdon the balance within 28 days of the “Family Law Settlement”. Consistent with the approach referred to earlier in these reasons, when dealing with legal costs I propose to remove this item from the balance sheet and have regard to it under section 75(2).
The division of assets between the parties based upon an assessment of contributions to the non-superannuation pool of assets gives rise to a split in favour of the wife. The wife will have $359,138 worth of net assets and the husband will have $153,916 worth of net assets. As a result of the fact of the determination of assessment to the superannuation pool the wife would be entitled to $141,455 of the superannuation pool and the husband $60,624 of the superannuation pool.
I have dealt earlier with the assessment of contributions to superannuation. I said at the conclusion of that exercise that I propose to deal with the fact that the husband will be receiving $26,291 less of the superannuation pool than he has been determined to be entitled to on assessment of contribution to the parties’ superannuation. I here take that matter into account.

Conclusion on 75(2)

I conclude that on balance there should be an adjustment in favour of the husband. That adjustment should be 5%.
In the result there will be a division of the net assets so that the wife receives 65% and the husband 35%. Not including superannuation, that translates to $333,485 to the wife and $179,569 to the husband.

The Wife Retains the Following Assets and Liabilities on the Balance Sheet

Assets
BMW motor vehicle  $ 52,000
Loan account Larson P/L  $ 78,838
USA Timeshare  $    5,149
Diamond ring, Rolex watch etc.                  $ 21,852
C property contents  $ 18,248
Contents of ACT professional office         $    2,858
Contents of C6 Canberra (storage)             $    5,503
Gold Coast contents  $    5,000
Inheritance  $ 20,000
S property proceeds  $ 57,000
C property adjustment  $ 442,937
Add back for tax paid by Court
Order 29/9/2008  $ 58,228
Total Assets     $ 767,613
Liabilities
Gold Coast mortgage (balance)                  $ 190,749
P Finance goodwill Loan  $ 382,978
P Finance car loan  $ 30,086
P Finance Fixture loan  $ 29,955
LF loan  $ 25,500
GK loan  $ 50,000
Unpaid C property repairs  $ 12,916
Painters  $ 9,604
Total Liabilities       $ 731,788
Net Assets retained by the wife               $ 35,825

In the result the wife will need to receive $297,660 in further assets. That can be achieved by a payment from the cash reserves arising from the sale of the C property.
The husband will receive the following assets and liabilities from the balance sheet:
Assets
Tian Trust  $ 15,000
Loan account with Tian Trust  $ 17,500
SE Pty Ltd  $ 80,000
Mazda car  $ 1,000
IAG shares  $ 1,000
Contents at G in storage  $ 7,710
Contents of Sydney offices  $ 1,360
Wine collection  $ 10,000
Oriental rugs  $ 2,700
Boat   $ 6,000
Proceeds of sale of wine  $ 12,057
S property proceeds  $ 57,000
Boat insurance received  $ 30,500
Tax paid by court order 29/9/2008             $ 47,073
Total Assets     $ 288,900
Liabilities
Debt of SE Pty Ltd  $141,151
Net Assets retained  $147,749
The husband will receive $31,820 from the cash available from the sale proceeds of the C property and the sale of the regional NSW land.
The parties will share any interest accruing on the C property sale proceeds in the proportions they are entitled to the net assets. As the amount standing to the credit of the parties in the Macquarie Bank account is so small the balance of any interest accruing thereon is to be retained by the husband.

The Claim of the Intervener Against the Wife

Arising from the further appearance on 22 October 2009, the Court was apprised of the settlement reached by the wife with Meyer Pigdon Solicitors.
The deed dated 21 August 2009 between Meyer Pigdon and the wife provided for the settlement of their claims for the sum of $90,000. That sum is to be paid by the wife to Meyer Pigdon from the wife’s entitlement arising out of these proceedings. If there be insufficient funds received by the wife to satisfy the indebtedness the wife is to pay Meyer Pigdon the balance within 28 days of the “Family Law Settlement”.
The interveners do not wish to contest priority between themselves and the Deputy Commissioner of Taxation in the event of there being insufficient funds to meet both claims.
As there are sufficient funds to pay out the Intervener an order should be made requiring payment to them from the wife’s entitlements.

Just and Equitable

One of the matters I need to consider is whether there should be a splitting order made in relation to the wife’s superannuation. That is, I need to determine if my decision not to make a splitting order is just and equitable in the circumstances. I am still convinced that it is the right decision in this case for the reasons already provided.
I am also required to consider whether the determinations by me give rise to a just and equitable result.
I conclude that the result is just and equitable. This was a short marriage with no children. Each of the parties worked and earned an income. The husband’s income was greater than the wife’s. The wife’s income was nonetheless a substantial income.
By far the most significant contributions, in my view, came from the wife at the commencement of the cohabitation. It was the wife’s assets which very much enabled the parties to quickly build assets as they did. The borrowings clearly needed to be serviced by the parties’ incomes however, in my view, the availability of substantial equity in the wife’s T property must be seen as the most significant contributor to the availability of collective borrowings.
It can be clearly seen that the parties overstretched themselves and when the separation came about the investments quickly dissipated.
One financial catastrophe after another compounded the parties’ unfortunate circumstances.
The wife has paid the price for poor judgment on her part relating to the decision to try and retain the C property. The balance sheet required adjustment by addition of a very significant add-back against the wife arising from the circumstances of her dealings with, and occupation of, that property.

The orders the Court Should Make

Both parties made submissions in relation to the orders which should be made.
The first area of submission addressed the husband’s application to apply joint funds to discharge the liquidation of the company SE Pty Limited. The husband submitted that the liability which gave rise to the company being wound up was the debt to the Australian Taxation Office. He submitted that in February 2009 the Court ordered the release of $123,000 to meet a tax liability of the wife. There seems no justification for not paying a tax debt of the company which was incurred during the parties’ cohabitation. The evidence discloses that the husband would need to pay to the liquidator of SE Pt Limited about $142,000 to obtain a discharge of the liquidation.
The wife opposed any order to pay funds to the liquidator. It was submitted that it does not make commercial sense to do so. It was further pointed out that the discharge of the liquidation would see the company holding the vehicle, which has a value of $80,000, which would have to be then taken into account. Further, I was reminded of the evidence from the Australian Taxation Office that if the company was again a trading company, then the Australian Taxation Office would pursue the totality of the liability owing to it, which is a sum much greater than $124,865.
I have effectively decided this issue by dealing with item 55 and item 7 on the balance sheet. Unfortunately, there are insufficient funds to enable the order sought by the husband. However, as I have said, I permitted inclusion in the balance sheet of the liability to the liquidator. The husband may reorganise his assets retained by the Court orders to be made in order to pay the liquidator the amount required.
The husband seeks an order that the wife pay the amount of legal costs incurred by the husband as a result of being charged with one count of sexual intercourse without consent and three counts of “take and detain person with intent to obtain advantage”. The charges were made in February 2005. In November 2005 the Department of Public Prosecutions offered a “no bill” on those charges. Between those two dates the husband had paid a considerable amount of money in legal costs. His evidence is that he borrowed $151,575 and paid more from his own resources. As stated earlier I do not propose to make such an order for the reasons stated.

I certify that the preceding two hundred and ninety two (292) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench.

Associate:

Date: 23 December 2009

[2009] FamCA 1307

23 December 2009

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Fiduciary Duty

Injunction