FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Watts & Evans (No 3) [2025] FedCFamC1F 197
File number: PAC 275 of 2021 Judgment of: HARPER J Date of judgment: 26 March 2025 Catchwords: FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDING – PROPERTY – Adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) – Assessment of contributions – Where the wife sought equal assessment of contributions with a 15 per cent adjustment in her favour – Where the husband sought contributions assessed as 60/40 with a 5 per cent adjustment for overall division 65 per cent in his favour – Where both parties sought addbacks – Where the wife sought to add back large sums of “unexplained” or “unaccounted” for money transfers by the husband – Where the wife failed to establish defaults in disclosure by the husband lead to a conclusion of hidden assets – Where the mere fact expenditure over a number of years in a very large property pool are not precisely accounted for does not of itself demonstrate wanton or improper dissipation of marital assets – Where expert evidence supported the inference the net movement of funds by the husband was objectively innocent – Where funds given to adult children by the husband are added back – Where the wife failed to establish claim for spouse maintenance – Where overall contributions assessed in favour of the husband as to 54 per cent – No adjustment pursuant to s 79(4)(e) – Final division 46/54 in favour of the husband. Legislation: Evidence Act 1995 (Cth) ss 50, 136, 144
Family Law Act 1975 (Cth) Pt VIII, ss 4AA, 72, 75, 79, 80, 81, 95, 114
Income Tax Assessment Act1936 (Cth) Div 7A
Cases cited: Agnarsson & Agnarsson (No 4) [2024] FedCFamC1F 407
Aitken & Aitken (2023) FLC 94-142; [2023] FedCFamC1A
69
Akbar & Gandega (2023) 67 Fam LR 593; [2023] FedCFamC1A 174
Barnell & Barnell (2020) FLC 93-961; [2020] FamCAFC
102
Benson & Drury (2020) FLC 93-998; [2020] FamCAFC
303
Berfield & Berfield (No 2) [2024] FedCFamC1F 573
Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Burke and Burke (1981) FLC 91-055
C & C [1998] FamCA 143
Candle & Falkner (2021) FLC 94-069; [2021] FedCFamC1A 102
Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA
633
Dickons v Dickons (2012) 50 Fam LR 244; [2012]
FamCAFC 154
Director of Public Prosecutions v United TelecastersSydney Ltd (1990) 168 CLR 594; [1990] HCA 5
Dovgan & Dovgan [2021] FamCA 306
Duarte v Morse (2019) 59 Fam LR 323; [2019] FamCAFC 93
Evans & Watts (No 2) [2023] FedCFamC1F 1033
G and G (2000) FLC 93-043; [2000] FamCA 1075
Gould & Gould (2007) FLC 93-333; [2007] FamCA 609
Horrigan & Horrigan [2020] FamCAFC 25
Huang & Wen (No 3) [2025] FedCFamC1F 71
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC
78
JEL and DDF (2001) FLC 93-075; [2000] FamCA 1353
Kartal & Templeman [2022] FedCFamC1A 46
Keehan & Keehan [2015] FamCAFC 122
Kowalski…
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- Watts & Evans (No 3) [2025] FedCFamC1F 197
- Case
- [2025] FedCFamC1F 197
- Decision Date
CaseChat Overview and Summary
The court's decision was based on the evidence presented, including expert valuations of various properties and financial reports. The court found that the wife had failed to establish that the husband's undisclosed financial activities constituted hidden assets or improper dissipation of marital funds. The court also found that the husband's contributions to his adult children did not warrant an adjustment in the wife's favour.
As a result of the court's decision, the final division of the asset pool was 46% to the wife and 54% to the husband. The court issued detailed orders regarding the transfer of specific properties, the payment of settlement monies, and the winding up of a self-managed superannuation fund. The court also restrained the parties from transferring any benefits from the superannuation fund without following the specified procedures. The wife was not awarded spousal maintenance, and the husband was found to be solely liable for his personal debts and liabilities, while the wife was solely liable for hers. The parties were ordered to indemnify each other for any liabilities arising from their business operations and personal property. Any application for costs was to be filed within 28 days of the court's orders, with no order for costs if no application was filed.
Orders
Orders of the court
PAC 275 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MS EVANS
Applicant
AND:
MR WATTS
First Respondent
C PTY LTD
Second Respondent
O PTY LTD
Third Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
26 MARCH 2025
THE COURT NOTES THAT:
Definitions
A. “L Street” means the property situate and known as L Street, Suburb M, folio identifier … registered in the name of S Pty Ltd.
B. “C Pty Ltd” means C Pty Ltd, ACN …. The respondent husband (“husband”) is the sole director and shareholder of C Pty Ltd which is the trustee of the C Trust.
C. “T Resort” means the time share units at T Resort in the United States of America under Contract Number ….
D. “CGT amount” means any capital gains tax liability arising from the sale of the sale properties.
E. “CGT estimate” means the estimate of capital gains tax payable on the sale of the sale properties obtained from U Financial Services.
F. “CGT estimate amount” means the amount that is held in the Marsdens Trust Account pending the preparation of the tax returns and financial documents for the husband, C Pty Ltd and O Pty Ltd for the financial year/s that relates to the sale of sale properties.
G. “Corporate Entities” means the following:
(a) C Pty Ltd;
(b) C Trust;
(c) S Pty Ltd;
(d) B Pty Ltd;
(e) V Pty Ltd as trustee for PP Unit Trust;
(f) O Pty Ltd as trustee for O Trust;
(g) V Pty Ltd as trustee for S Reserve Trust;
(h) S Unit Trust; and
(i) S Partnership.
H. “Due date” means twelve weeks from the date of these orders.
I. “S Pty Ltd” means S Pty Ltd, ACN …. The husband and the applicant wife (“wife”) are the directors and shareholders of S Pty Ltd.
J. “U Financial Services” means the accountants for the husband and the Corporate Entities.
K. “Marsdens Trust Account” means the trust account of Marsdens Law Group.
L. “P Street” means the property situate and known as P Street, Suburb H, folio identifier ….
M. “P Street Guarantee” means the personal guarantee provided by the wife with respect to the National Australia Bank (“NAB”) mortgages account numbers …85 and …66.
N. “P Street mortgage” means the mortgage in favour of NAB that is registered on the title of P Street, registered dealing number ….
O. “B Pty Ltd” means B Pty Ltd, ACN …. The husband is the sole director and shareholder of B Pty Ltd and it is the corporate trustee for S Unit Trust and the trading vehicle for W Company.
P. “L Street mortgage” means the mortgage in favour of X Bank registered dealing number … that is registered on the title of L Street.
Q. “Sale properties” means such of the properties and any of them, of which the husband, C Pty Ltd or O Pty Ltd is the registered proprietor, the sale of which may be necessary to comply with these orders.
R. “Settlement monies” means the payment to be made to the wife by the husband in the amount equivalent to 46 per cent of the net value of the asset pool, as determined by the Court, less:
(a) the net value of the assets and liabilities the wife retains pursuant to these orders, and subject to any adjustment in accordance with these orders; and
(b) $59,500.
S. “SMSF” means Superannuation Fund 1. The husband and wife are the sole members of Superannuation Fund 1. V Pty Ltd is the corporate trustee.
T. “Suburb R Property” means the property situate and known as Q Street, Suburb R, folio identifier … that is registered in the name of the husband.
U. “Suburb R mortgage” means the mortgage that is registered on the title of Suburb R, in favour of NAB, registered dealing number ….
V. “O Pty Ltd” means O Pty Ltd, ACN …. The husband is the sole director and shareholder of O Pty Ltd and it is the trustee of the O Trust.
THE COURT ORDERS THAT:
1. C Pty Ltd and O Pty Ltd be joined as parties to these proceedings.
P Street
2. On or before the due date the wife will do all acts and things and sign all documents necessary to transfer to the husband all of her right, title and interest in the P Street property.
3. Simultaneously upon the wife's compliance with Order 2 the husband will do all acts and things and sign all documents necessary to:
3.1 Discharge the P Street mortgage.
3.2 Release the wife from the P Street Guarantee.
T Resort
4. On or before the due date the husband will do all acts and things and sign all documents necessary to transfer to the wife all of his right, title and interest in T Resort.
5. The wife shall indemnify the husband from all current, past and future liability with respect to the T Resort.
Suburb R Property
6. On or before the due date the husband will do all acts and things and sign all documents necessary to:
6.1 Discharge the Suburb R mortgage.
6.2 Transfer to the wife all of his right, title and interest in Suburb R.
Corporate Entities
7. The husband is declared the sole owner of the following, both in law and in equity of the Corporate Entities and on or before the due date the wife will do all acts and things and sign all documents necessary to:
7.1 Resign all positions that the wife holds in the Corporate Entities.
7.2 Transfer to the husband all of the wife's shareholdings in the Corporate Entities.
7.3 Transfer to the husband any other rights or entitlements the wife may have in or against the Corporate Entities including the benefit of any loan accounts.
Capital Gains Tax
8. Within 7 days from the date of these orders the husband will do all acts and things necessary to obtain the CGT estimate from U Financial Services.
9. The husband, C Pty Ltd and O Pty Ltd will do all acts and things and sign all documents necessary to cause their respective tax returns and financial documents to be prepared and lodged for each financial year that relates to the sale of the sale properties and such tax returns and financial documents are to be lodged by no later than 30 December.
10. The husband cause a copy of the tax returns and financial documents for himself, C Pty Ltd and O Pty Ltd for each financial year that relates to the sale of the sale properties to be provided to the wife within 7 days of them being lodged.
11. The husband will do all acts and things and sign all documents necessary to:
11.1 Cause a copy of the Notice of Assessments for each financial year that relates to the sale of the sale properties to be provided to the wife.
11.2 Cause the CGT amount to be paid from the funds held in Marsdens Trust Account.
Sale Properties
12. That within 14 days from the date of these orders the husband, C Pty Ltd and O Pty Ltd will do all acts and things and sign all documents necessary, to cause such of the sale properties to be sold as are necessary to produce the settlement monies, and for the purposes of this order:
12.1 Y Real Estate will be appointed as the agent to act on the sale (“agent”).
12.2 E Solicitors is appointed as the solicitors to act on the sale (“solicitors”).
12.3 The sale properties will be listed for sale by any method and price as recommended by the agent to ensure the realisation of sufficient net proceeds to make good the payment of the settlement monies to the wife.
12.4 The husband will elect the order of priority of sale of each property that makes up the sale properties and cause a Contract for the Sale of Land to be executed for each of the properties that are to be sold.
12.5 The husband will instruct the agent and the solicitors to supply to the wife all information reasonably required by the wife in relation to the sale and will execute any necessary authority in writing for that purpose.
13. For the purposes of Order 12 the husband, C Pty Ltd and O Pty Ltd will each cooperate in every way including (without limiting the generality of the foregoing):
13.1 Making the keys available.
13.2 Allowing inspections at all reasonable times requested by the agent.
13.3 Doing or saying nothing that will prevent a sale being affected.
13.4 Signing all documents requested.
14. Upon the completion of the sale of the sale properties which are required to be sold the husband, C Pty Ltd and O Pty Ltd will do all acts and things and sign all documents necessary to authorise the sale proceeds to be applied as follows:
14.1 In payment of all costs and disbursements referrable to the sale.
14.2 In payment of all amounts as are necessary to discharge any mortgage encumbering the property.
14.3 In payment to discharge any outstanding council and water rates and land tax liability.
14.4 In payment of the CGT estimate to Marsdens Trust Account.
14.5 In payment of the settlement monies to the wife, subject to Orders 15 and 16.
14.6 In payment of the balance then remaining to the husband.
15. If the sale properties sell collectively for more than the amounts used to calculate the settlement monies then the amount paid to the wife shall be increased by 46 per cent of the increase in the sale proceeds.
16. If the sale properties sell collectively for less than the amounts used to calculate the settlement monies then the amount paid to the wife shall be decreased by 46 per cent of the decrease in the sale proceeds.
SMSF
Real Estate
17. Within 28 days of the date of these orders the parties will in their capacity as directors of the corporate trustee of the SMSF do all things and sign all documents necessary to cause L Street to be sold and for the purposes of this order:
17.1 Y Real Estate is appointed as the agent to act on the sale (“agent”).
17.2 E Solicitors is appointed as the solicitors to act on the sale (“solicitors”).
17.3 The method of sale will be sold by private treaty, or as otherwise in accordance with the agent's recommendation.
17.4 Both parties will sign all documents required by the agent and solicitors to facilitate the sale, including but not limited to agency agreement, cost agreement and contract for sale.
17.5 Neither party can confer on any agent without the consent of the other party, any right to any sole or exclusive agency agreement in respect of L Street or to any commission.
17.6 The parties shall each cooperate in every way with the agent including but not limited to:
(i) Making the key available to the agent.
(ii) Allowing inspection of L Street at all reasonable times as requested by the agent.
(iii) Doing or saying nothing to the agent that will prevent a sale being effected.
(iv) Ensuring L Street, including the grounds, are in a neat and clean condition at the time of inspection by the agent and prospective buyers.
18. In the event L Street is not sold by private treaty within a period of 3 months of the date of being listed for sale, then the parties as directors of the SMSF, shall forthwith do all acts and things necessary to cause the said property to be listed for sale and sold by public auction at the earliest possible date with the same agent and at a reserve price to be agreed upon between the parties and, failing agreement as to a reserve price for more than 14 days, at a reserve price to be determined by the listing agent whose decision shall be final and binding upon the parties AND such sale shall be subject to the following terms and conditions:
18.1 The auction shall take place at the earliest date recommended by the agent;
18.2 Both parties shall attend at the auction and in the event that the property is passed in they shall negotiate with the highest bidder and shall accept any offer to purchase the property at no less than 97.5 per cent of the reserve price.
19. In the event L Street does not sell at auction or does not sell by private treaty within 2 weeks after the date of the auction, then the husband will relist the property for sale by auction at intervals of no more than 6 weeks upon the same terms and conditions as set out herein until the property is sold.
20. Upon L Street being sold in accordance with these orders, the parties will do all acts and things necessary to immediately distribute the proceeds of such sale in the following order and priority:
20.1 In payment of any amount to discharge the mortgage in favour of X Bank that is registered on the title of L Street, registered dealing number ….
20.2 In payment of the agent's commission and advertising expenses and legal expenses of the said sale.
20.3 In payment of the solicitors’ costs associated with the sale.
20.4 In payment of costs incurred, if any, in relation to determination of value or selling price of L Street.
20.5 In payment of any adjustments, inclusive of council and water rates; and
20.6 In payment of the balance then remaining proceeds (“L Street proceeds”) to be deposited in the SMSF, NAB account number …01 (“SMSF Account”).
Restraints
21. Save for the purposes of giving effect to these orders, the parties be and are hereby restrained both in their personal capacity and that of director of the SMSF from otherwise requesting rollover and/or transfer of any transferrable benefits to another fund or to make any further payment from the SMSF or SMSF Account.
Wind up of SMSF
22. Within 14 days of the L Street proceeds being deposited in the SMSF Account, the parties will in their capacity as directors of the SMSF do all such acts and things necessary to:
22.1 Engage U Financial Services to prepare any audits, outstanding taxation returns and the final taxation return for the SMSF; and
22.2 Instruct U Financial Services to pay existing tax liabilities for the SMSF from the funds presently held in the SMSF Account; and
22.3 Ensure that any insurance policies presently held by the SMSF are cancelled; and
22.4 Pay any outstanding accounting fees owing to U Financial Services for the preparation of the tax returns for the SMSF from the funds presently held in the SMSF Account; and
22.5 Instruct U Financial Services that subject to the preceding orders hereof to deregister and wind up the SMSF and share in all costs associated (including any ASIC related fees) the same.
23. That upon payment of all the tax liabilities and accounting fees referred to in Order 22 hereof, within 7 days the wife and husband will both do all acts and things and sign all documents necessary to cause the remaining funds held in the SMSF Account, at the point of winding up, to be disbursed as follows:
23.1 The wife's allocated SMSF entitlement to be rolled over into such superannuation fund as the wife directs in writing.
23.2 The husband's allocated SMSF entitlement to be rolled over into such superannuation fund as the husband directs in writing.
24. For the purposes of Orders 17 to 23 the parties will do all such acts and things and sign all such documents as may be required, including but not limited to the signing of the SMSF trustee minutes, rollover requests and any related documents that may be necessary to transfer each of their respective member account balances and member entitlements out of the SMSF and into another complying superannuation fund established by each of them in their respective names.
Z Pty Ltd
25. That the parties within 28 days do all acts and things and sign all documents required:
25.1 To cause S Pty Ltd to release Z Pty Ltd (ACN: …) and the wife from any and all liability associated with the lease between S Pty Ltd and Z Pty Ltd for the property at L Street; and
25.2 To release the wife from the personal guarantees provided by her or Z Pty Ltd to X Bank in relation to the mortgage held by V Pty Ltd as trustee for Superannuation Fund 1 with X Bank in respect of the property at L Street; and
25.3 To release the wife from the personal guarantees provided by her or Z Pty Ltd in relation to the chattel mortgage held by B Pty Ltd with X Bank; and
25.4 To cause S Pty Ltd to indemnify and keep indemnified Z Pty Ltd and the wife from and against all actions, claims, suits or demands howsoever made against Z Pty Ltd and the wife in relation to or arising out of any liability associated with the operations of S Pty Ltd and the husband.
Declarations
26. Except as otherwise provided for in these orders the husband is declared the sole legal and beneficial owner of the following:
26.1 All funds standing to the credit of the husband in bank accounts held in the husband's sole name;
26.2 All of the husband's interest in life insurance policies in his sole name;
26.3 All of the husband's superannuation member entitlements in his sole name;
26.4 All items of furniture, furnishings, contents, electronic equipment and personal effects currently in the husband’s possession, custody or control at the time of the making of these orders; and
26.5 All other personal property of whatsoever nature and kind in the possession of the husband at the date of the making of these orders.
27. Except as otherwise provided for in these orders the wife is declared the sole legal and beneficial owner of the following:
27.1 All funds standing to the credit of the wife in bank accounts held in the wife's sole name;
27.2 All of the wife’s interest in life insurance policies in her sole name;
27.3 The wife’s superannuation member entitlements in her sole name;
27.4 All items of furniture, furnishings, contents, electronic equipment and personal effects currently in the wife’s possession, custody or control at the time of the making of these orders; and
27.5 All other personal property of whatsoever nature and kind in the possession of the wife at the date of the making of these orders.
Indemnities
28. As between the parties, the husband shall be solely liable for all debts and liabilities in his sole name however and whenever arising and he shall indemnify and keep indemnified the wife in relation to any liability associated with him, his business operations in B Pty Ltd and any liability in connection with the Corporate Entities.
29. As between the parties, the wife shall be solely liable for all debts and liabilities in her sole name however and whenever arising and she shall indemnify and keep indemnified the husband in relation to the same.
30. The parties hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
Ancillary Orders
31. The parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these orders in the time periods prescribed.
32. In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
33. The parties have liberty to apply to relist the proceedings on 7 days’ notice for the purpose of any further orders necessary to implement these orders.
34. All outstanding applications are otherwise dismissed.
Costs
35. Any application seeking an award of costs is to be filed and served with an affidavit in support within 28 days of the date of these orders, and in the event no application is filed within the time specified, there shall be no order as to costs up to and including the date of these orders.
THE COURT FURTHER NOTES THAT:
W. At the date of these orders, based upon the values of the net assets of the parties as found or agreed at the date of judgment delivered on 26 March 2025 the amount calculated as payable to the wife is $8,668,680, subject to adjustments made in accordance with these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
Evidence
Evidence Before The Court
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
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