Watts & Evans (No 3) - [2025] FedCFamC1F 197

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 and Kowalski (1993) FLC 92-342

Lin & Ruan (202 l) FLC 94-024; [2021] FamCAFC 90

M & M [1998] FamCA 42

Magnus & Sandri (No 4) [2024] FedCFamC1F 499

Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21

Martin & Newton (2011) FLC 93-490; [2011] FamCAFC

233

Needham & Trustees of the Bankrupt Estate of Needham

(2017) FLC 93-777; [2017] FamCAFC 94

Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17

Norman & Norman [2010] FamCAFC 66

Papas v Co [2018] NSWSC 1404

Phillips and Phillips (2002) FLC 93-104; [2002] FamCA

350

Russell v Russell (1999) FLC 92-877; [1999] FamCA 1875

Sarto & Sarto (2022) 65 Fam LR 605; [2022] FedCFamClA 16

Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52

Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173

Twinsectra Ltd v Yardley [2002] 2 AC 164; [2002] UKHL 12

Vass v Vass (2015) 53 Fam LR 373; [2015] FamCAFC 51

Watson v Ling (2013) FLC 93-527; [2013] FamCA 57

Watts & Evans [2022] FedCFamC1F 1063

Wei v Xia (No 5) (2023) 67 Fam LR 421; [2023] FedCFamC1F 679

Welch & Abney (2016) FLC 93-756; [2016] FamCAFC 271

Welch & Abney (No 2) [2015] FamCA 1116

Wirth v Wirth (1956) 98 CLR 228; [1956] HCA 71

Wotton & Wotton [2010] FamCA 194

Ying v Song [2010] NSWSC 1500

Zao & Lee [2019] FamCAFC 169

Division: Division 1 First Instance

Number of paragraphs: 271

Date of hearing: 13–22 January 2025

Place: Sydney

Counsel for the Applicant: Mr Trout

Solicitor for the Applicant: Tiyce & Lawyers

Solicitor for the Respondent: Mr Reeve of Marsdens Law Group
ORDERS

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
25.3To 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.
IT IS NOTED that publication of this judgment by this Court under the pseudonyms Evans & Watts have been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
INTRODUCTION

These are property proceedings under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”) between the applicant wife, Ms Evans (“the wife”) and the respondent husband, Mr Watts (“the husband”).
The start of the relationship, and therefore its length, were matters of dispute, to which I will return, but there was no dispute that the parties were married in 1998. The date of separation was contentious, and is discussed later, but both parties agreed it happened in 2019, and they lived separated for a time under one roof. Cohabitation ended when the wife vacated the former matrimonial home at P Street, Suburb H (“P Street”) on 3 January 2020. The parties were divorced in mid-2022.
There are two children of the marriage: Mr AA (“Mr AA”) and Ms BB (“Ms BB”), presently aged 22 and 25 years respectively.
There is a substantial and complex asset pool, with a net value of between $32,000,000, according to the husband and $40,000,000 according to the wife, although both values are reached by adding back notional property.
By the conclusion of the trial, each party sought to retain P Street. The wife sought an overall property adjustment giving her 60 to 65 per cent of the net asset pool. In broad terms, she contended that the parties’ contributions should be assessed as equal, but she should receive a substantial adjustment of up to 15 per cent under s 79(4)(e) because of the husband’s failures in disclosure. The wife also sought spouse maintenance of $5,000 per week. The husband argued that contributions should be assessed 60 per cent in his favour, together with an adjustment of up to 5 per cent under s 79(4)(e), awarding him up to 65 per cent of the asset pool.
BACKGROUND
The wife was born in 1964 in New Zealand and is currently 61 years of age. She became an Australian citizen in 1985.
The husband was born in 1966 in Australia and is currently 59 years of age.
The wife and the husband both served in the Australian Defence Force. The wife served for seven years as a ranked officer and was promoted thereafter. The husband served for three years as a ranked officer.
In 1995 the husband commenced full-time study for a degree. He graduated in 1997 and began work as a health professional.
In 1996 the wife became a public servant. She served in this position until 2007.
As mentioned, there was dispute about the dates the parties met, commenced cohabitation and whether they entered a de facto relationship before marriage. It is convenient to make findings about this dispute at this point.
In order to explain some elements of the dispute it is necessary to record here that in late 1997 or early 1998 the wife purchased a property at 2 CC Street, Suburb H (“2 CC Street”) for $148,000. She paid the $20,000 deposit from her savings and funded the balance of the purchase price with a mortgage with National Australia Bank (“NAB”). The parties moved into the property after settlement.
The wife contends the parties met in 1991 and commenced a de facto relationship from mid‑1993. This is consistent with the date of formal recognition of a de facto relationship between the parties by the Australian Defence Force. The wife said the parties commenced cohabitation in 1994 at a unit at Suburb DD. The lease was in the wife’s name and she paid the rent, although she received full reimbursement from the Australian Defence Force on account of the parties’ recognised de facto status and consequent entitlement to married quarters for Defence personnel. The wife said the property was 40 minutes from where she worked but was chosen for the husband’s convenience as it was close to DD Hospital where he gained practical experience during his degree.
The husband denied he lived with the wife in married quarters provided by the Australian Defence Force from 1994 as he did not commence his degree until 1995, though he agreed he was working as a health professional at DD Hospital. He said he lived separately until the parties moved into 2 CC Street in 1998. He claimed that the wife lived at EE Street, Town FF in 1995 and 1996. He tendered a copy of the wife’s public service questionnaire in which she gave this property as her home address as early 1996.
The husband claimed the parties did not meet until 1993, though conceded it may have been earlier. He claimed their relationship started in 1997, though he accepted the de facto status was recognised by the Australian Defence Force in mid-1993, and he had signed documents in 1993 in which the existence of a de facto relationship was represented as a fact. He explained in his affidavit that he held out to the Australian Defence Force that the parties were in a de facto relationship when they were not, to help the wife obtain government support ordinarily reserved for married or de facto personnel (husband’s affidavit, paragraph 32). He maintained that cohabitation did not commence until mid-1998 at 2 CC Street. In cross-examination the wife took him to his previous affidavits sworn in 2022, 2023 and 2024 in which he variously said cohabitation commenced in 1993, 1997 and 1998.
All aspects of the evidence cannot be entirely reconciled. On balance, I find the husband’s evidence in this regard is not convincing. There was clear evidence of both parties holding themselves out as in a de facto relationship from 1993 to their employer at the time. I do not accept the husband’s reasons for alleging the relationship started at some later date. I find the relationship commenced in 1993 as asserted by the wife. I note that this finding is separate to a specific finding, which is unnecessary, that the parties were in a de facto relationship as defined in s 4AA of the Act.
I return to the chronological narrative.
In early 1998 the husband registered B Pty Ltd (“B Pty Ltd”). The husband was and is the sole director and shareholder. B Pty Ltd has been the entity through which the husband conducted a practice as a health professional, using the trading name W Company.
However, he initially also practiced elsewhere. In or around 1998, the husband joined a medical practice, GG Company, operated by Mr HH, and later became a partner.
After the incorporation of B Pty Ltd and as it built up cash or retained profits, it was the husband’s practice to receive loans from the company during consecutive financial years, which fell within Div 7A of the Income Tax Assessment Act1936 (Cth) (“the Income Tax Act”) (“Division 7A loans”). This practice allowed him to receive cash amounts from B Pty Ltd which were used, as will be explained, at times for living expenses and the purchase of properties, but had to be repaid in stipulated time periods to avoid the imposition of onerous interest or other financially adverse treatment by the Australian Taxation Office (“ATO”). Repayments were made either by further Division 7A loans or the declaration of dividends by B Pty Ltd in favour of the husband which were used, at least in part, to repay the loans.
In May1999 the S Unit Trust was established by unit trust deed with B Pty Ltd as trustee. This was later converted to a hybrid trust in June 2004. The husband is the sole unitholder of the S Unit Trust. The discretionary beneficiaries include the husband, the wife, the children and various entities of the husband.
In mid-1999 B Pty Ltd acquired the property at JJ Street, Suburb H (“JJ Street”) for $229,000. The property underwent renovation in 1999, to which both parties say they contributed. Thereafter it was used as the premises for W Company. The husband claims W Company has been winding down since 2022. I will return to this issue later.
In 2000 Ms BB, the parties’ first child was born.
In late 2001 the parties purchased P Street in their joint names for $600,000. This was a vacant block of land at the time and became the matrimonial home. They purchased P Street from Mr KK, a close friend of the husband and a witness in his case, and his wife Ms BO (“Mr KK and Ms BO”).
In 2002 Mr AA, the parties’ second child was born.
There was no dispute that from about 2003 the husband began to earn more than the wife through his efforts in B Pty Ltd. In his trial affidavit at paragraph 63, he described his management of B Pty Ltd in the following way, which was not disputed by the wife:
I maintained a tight knit team within [B Pty Ltd] over the years. For example, I have had two staff with me for 20 years, one staff member for 14 years and one for around 10 years. I have been the only [health professional] in the practice since I first started it.
In early 2003 the property at 1 CC Street, Suburb H (“1 CC Street”) was purchased for $499,000. The wife said the property was registered in the husband’s sole name as she had a lower income and other mortgages. The wife claimed the purchase was funded by savings for the deposit and a mortgage with NAB. The husband said he purchased the property, and agreed there was a mortgage from NAB but did not specify the source of the funds for the deposit. I am unable to resolve this difference, and it is not material to the outcome. The parties resided in this property until 2004 when they moved into P Street.
In late 2003 a property at 2 LL Street, Suburb MM was purchased in the husband’s sole name for $315,000. The wife claimed the purchase price was paid using the parties’ joint savings and a mortgage. According to the husband, he used a Division 7A loan from B Pty Ltd to fund the purchase. However, the title search tendered by the husband showed that the transfer to him and a mortgage to NAB were lodged together for registration in late 2004, which is a year later than the date given by both parties for this purchase. Nonetheless, this evidence is more consistent with the need for a mortgage to complete the purchase and therefore with the wife’s version. I accept a mortgage was used to fund the purchase, being money borrowed by the husband.
In or about mid-2004 the wife purchased a property at 1 LL Street, Suburb MM for $323,000 in her sole name. The husband agreed she used the parties’ savings to pay the deposit and a home loan to complete the purchase. She sold the property in mid-2021 for $540,000 and used the proceeds to purchase a property at 2 NN Street, Suburb OO (“2 NN Street”) for $1,050,000 in joint names with her mother.
In mid-2004 V Pty Ltd (“V Pty Ltd”) was registered with the husband as the sole shareholder. Both the husband and the wife are directors. V Pty Ltd served as the trustee for:
(a)the S Trust and the S Reserve Trust, both trusts being established by trust deed in June 2004. The husband was the principal and a primary beneficiary along with the wife and children;
(b)the PP Unit Trust, established by unit trust deed in October 2007, the husband holding 1,300,000 units of the trust; and
(c)Superannuation Fund 1 (“Superannuation Fund 1”), established by trust deed in May 2004. The husband was the initial member and the wife became a member in 2010.
In early 2005 the property at Q Street, Suburb R (“Suburb R”) was purchased in the husband’s name for $332,500. The wife states the property was purchased entirely with joint savings and there was no mortgage against the property. The husband agreed there was no mortgage, but claimed he purchased the property using a Division 7A loan from B Pty Ltd. However, he also claimed “rent received did not cover the outgoings for the property for the mortgage, strata levies, rates and maintenance. I met the difference between the income and outgoings as best as I could from my income” (husband’s affidavit, paragraph 84). By the date of trial there was a mortgage secured against the property which the husband agreed to discharge. Clearly the property was used as security at some point whether at the time of purchase or later. I accept the husband used a Division 7A loan to buy the property and met its expenses, as he claimed.
In 2007 the wife retired from her role as a public servant. She qualified for a pension, which was 75 per cent of her salary, worth approximately $120,000 per annum. She claimed that after 2007, she did casual work for B Pty Ltd, secretarial duties, personal assistant work for the husband, and organised maintenance for him. She said she took on a more significant role in the care of the children, homemaking and in the management of the parties’ property portfolio. The husband continued working in and managing B Pty Ltd as the only health professional, supported by a team of employees.
In or around late 2007 the husband acquired an interest in 1 PP Street, Suburb H through the PP Unit Trust. The husband ceased holding this interest as of early 2022 after the PP Unit Trust sold the property to QQ Pty Ltd, in which the husband no longer had an interest by late 2021.
In or around late 2007 the husband acquired an interest in 2 PP Street, Suburb H through the RR Unit Trust. The husband states he ceased holding any interest in this property as of late 2021 when he stopped holding units in the RR Unit Trust.
In March 2013 the O Trust was established by trust deed with O Pty Ltd (“O Pty Ltd”) as trustee. The husband is and was the sole director and shareholder of O Pty Ltd and is the Appointer of the trust. The parties as well as their children are among the beneficiaries.
In mid-2013 the husband established C Pty Ltd (ACN: …) (“C Pty Ltd”), of which he was and is the sole director and shareholder, and C Trust, which is a discretionary trust with C Pty Ltd as trustee. The trust was established as the investment vehicle. The husband is the Appointer of the C Trust with the power to appoint or remove the trustee. The parties as well as their children are among the beneficiaries of the C Trust.
In 2013, the wife purchased a property at SS Street, Suburb TT (“SS Street”) for $1,350,000. The property was registered in the wife’s name only for taxation purposes. There was no dispute the $50,000 deposit was paid using a Division 7A loan from B Pty Ltd, and the balance was funded by a mortgage from NAB, supported by the husband’s personal guarantee. The property was tenanted for periods with the rental income applied to the mortgage. In 2020, upon the tenants vacating the property, the property was sold for $1,880,000 as the wife could no longer afford the mortgage repayments.

In early 2014 property at 1 UU Street, Suburb VV was purchased for $2,750,000 through C Pty Ltd. The purchase was financed by Division 7A loans and a NAB mortgage, with the husband and B Pty Ltd as guarantors, and a property the husband had purchased in 1992 at WW Street used as security. In late 2020 the property would be combined with 2 UU Street, purchased in 2016, to form a new lot at ZZ Street, Suburb AB.
In or around 2014 or 2015 the husband started to experience medical issues. He said his doctor expressed doubts about his ability to continue working beyond five or ten years and so he decided to build a property portfolio as an alternative income source.
In late 2015 property at AC Street, Suburb VV (“AC Street”) was purchased for $1,700,000 by O Pty Ltd. The husband financed the purchase with a Division 7A loan from B Pty Ltd.
In 2016 the husband caused C Pty Ltd to purchase properties at G Street, Suburb AD (“G Street”) for $746,500; 2 UU Street, Suburb VV for $3,030,000 and AE Street, Suburb AF for $5,875,000. The properties were financed by Division 7A loans from B Pty Ltd and loans from NAB.
In mid-2016 the husband caused C Pty Ltd to purchase a business complex at AG Street, Suburb AF (“AG Street”). He gave evidence, which was not disputed, that the purchase was funded by a loan from NAB and Division 7A loans from B Pty Ltd. AG Street was sold in mid‑2023 and C Pty Ltd received net proceeds of sale of $3,265,867 after the discharge of the mortgage to NAB.
The parties had discussions in early 2017 about the wife establishing another practice, in which the husband could work along with other health professionals. To progress this idea, in early 2017 S Pty Ltd (“S Pty Ltd”) was incorporated with the parties as directors. The husband holds 11 shares, the wife holds 1 share. The entity was established so Superannuation Fund 1 could borrow money to purchase property at L Street, Suburb M (“L Street”), which it did in early 2017. The property was purchased for $1,425,000 with S Pty Ltd as the registered owner, and financed with $540,000 that the husband deposited into Superannuation Fund 1 as the wife’s contribution, and a loan plus mortgage from the X Bank for the balance. In May 2017 the L Street Property Trust was established, providing for S Pty Ltd as the bare trustee of L Street and Superannuation Fund 1 as the beneficial owner. The property at L Street was intended to be renovated and set up by the wife as the multi-health practice. The property is the main asset of Superannuation Fund 1 and is subject to a mortgagee sale after defaults in mortgage repayments. I return to this issue later in these reasons.
In late 2017 the husband caused C Pty Ltd to purchase a property at J Street, Suburb K (“J Street”) for $1,000,000. The property was purchased using a Division 7A loan from B Pty Ltd.
In late 2017 2 CC Street was sold for $857,000. The wife states she paid all outgoings for the property which I accept. The husband claims the sale was at an undervalue, for which he seeks an addback. I will discuss this further below.
In June 2018 QQ Pty Ltd as trustee for the RR Unit Trust was registered, the husband being the director and shareholder from June 2018 to November 2021. The RR Unit Trust was established in 2005 by Mr KK and his wife. The husband states that through Superannuation Fund 1 and PP Unit Trust he subscribed to a total 853,458 B-Class units in the RR Unit Trust. Superannuation Fund 1 transferred its 853,458 B-class units in November 2021 to Mr KK & Ms BO for $463,816.67.
In late 2018 the husband caused C Pty Ltd to purchase business commercial property at AH Street, Suburb AB (“AH Street”) for $18,000,000. The purchase was funded by a loan from NAB and a Division 7A loan from B Pty Ltd.
I return to the question of the date of separation. The husband stated it was in February 2019 but the wife claimed the date was 30 November 2019. There was no dispute the parties continued to live under one roof until 3 January 2020, when the wife left the former matrimonial home.
There was no dispute that the relationship was faltering in 2018. There was evidence that on 27 November 2018 the wife emailed the husband acknowledging the parties were parting ways, and proposing a broad outline of how their assets should be dealt with and divided. In an email dated 22 January 2019 to her then solicitor the wife stated, “I am currently separating from husband of 20 years” and on 23 January 2019 the wife stated to her solicitor “we separated 5 Dec 2018”. In response to the idea of the husband retiring for health reasons, in an email in April 2019, she said “[j]ust wish you had retired when we were married” suggesting the marriage was over at least in her mind. On the other hand, during 2019 the parties continued to act in a manner consistent with a continuing relationship in some respects, such as holidaying together, attending a concert together, and discussing the development and use of L Street despite the fact there was already correspondence passing between solicitors. On balance, the evidence of the wife’s own statements in her emails in early to mid-2019 is inconsistent with final separation taking place in November 2019. The more plausible date is February 2019, as the husband contends. I make that finding.
In early 2019 the wife established a company called Z Pty Ltd (“Z Pty Ltd”). She is the sole director, secretary and shareholder. Z Pty Ltd entered into a five-year lease with S Pty Ltd for the use of L Street, with the wife as guarantor for the rent. She seeks to be released from the lease and guarantee as part of the final orders in these proceedings. The wife also withdrew $141,479 from NAB account …73 as part payment towards the fit out for L Street. According to the husband, the premises were ready for a practice to commence by about mid-2019 but the wife moved to Queensland and the intended multi-health practice never came into existence. In 2020 the COVID-19 pandemic caused severe disruptions including the shutdown of practices, and L Street remained unused and has sat idle.
In January 2020 3 PP Pty Ltd as trustee for PP Unit Trust was registered with the husband being the director and shareholder from January 2020 to November 2021. The PP Unit Trust had been established around February 2018 with the PP Unit Trust holding 1,920,000 units. The PP Unit Trust transferred its unit holdings in September 2021 and November 2021 to Mr KK & Ms BO and to Mr KK & Ms BO’s self-managed superannuation fund.
In or around early 2020 the husband purchased a property at 3 PP Street, Suburb H (“3 PP Street”) through PP Pty Ltd as trustee for PP Unit Trust. This property, together with the properties at 1 & 2 PP Street, were part of a development project with Mr KK. The husband states he ceased to have any interest in the property as of November 2021, and that proceeds from the transfer of the units went to Superannuation Fund 3. The wife claims the husband still holds an undisclosed interest in the PP Street properties and the development project, and suggested Mr KK holds property interest, in full or in part, on trust for the husband. The husband and Mr KK denied this. I return to this issue below.
In mid-2020 the wife purchased property at 1 NN Street, Suburb OO (“1 NN Street”) for $475,000. The property is registered in her sole name and was purchased with proceeds from the sale of SS Street.
In early 2021 the husband established AJ Pty Ltd (“AJ Pty Ltd”). He is the sole director and shareholder. In his affidavit he said, and I accept, “I was hoping that [AJ Pty Ltd] would provide me another avenue to reduce taxes by claiming some offsets through [AJ Pty Ltd] that were also shared through [B Pty Ltd]” (husband’s affidavit, paragraph 174). It was common ground at trial that AJ Pty Ltd had no value and a net loss of $27,865 which reflected the fact it met some expenses associated with L Street.
Around early 2021 the husband sold 2 LL Street for $420,000 and, to the same buyer, sold the property at WW Street for $275,000. The husband says the sale proceeds went to reducing debt held with NAB. The wife contends the sales were undervalued and, at the end of the trial, claimed she held an equitable interest in these properties, I discuss these claims later below.
In mid-2021 Superannuation Fund 3 was established with AK Pty Ltd as trustee. The husband is the sole director and shareholder of AK Pty Ltd.
On advice from the husband’s accountant, as at 30 June 2023 a dividend was declared by B Pty Ltd in favour of the husband in the amount of $21,175,500. The purpose of this dividend was to repay outstanding Division 7A loans owed by the husband to B Pty Ltd in light of the benchmark interest rate charged by the ATO on Division 7A loans that was increased to 8.27 per cent. The dividend was not paid in cash to the husband but recorded in the accounts of B Pty Ltd as repaying the Division 7A loans.
PROCEDURAL HISTORY
Some procedural history is relevant.
On 27 April 2021 the wife filed an Initiating Application seeking financial orders in the Family Court of Australia (as it was then known). She sought a division of property which, if based on her valuations, would award her 10 per cent of the marital assets.
On 11 June 2021 the husband filed his Response to the wife’s application for final orders and sought a 60/40 property division in his favour.
On 2 August 2021 the wife filed an Amended Application for Final Orders seeking property division 60/40 in her favour, as well as spousal maintenance of $5,000 per week.
On 11 February 2022 orders were made by consent for the following properties to be sold:
(a)G Street; J Street, Suburb K and L Street (“the commercial properties”);
(b)AL Street, Suburb H; and
(c)P Street.
On 28 October 2022 the Court noted that a dispute had arisen between the parties in relation to the appropriate agent to conduct the sale of properties pursuant to the orders of 11 February 2022.
On 9 December 2022 I delivered judgment in Watts & Evans [2022] FedCFamC1F 1063 and made an order for the husband to cause B Pty Ltd to pay him a further dividend so that he retained $350,000, the whole sum of which was to be paid to the wife for the purpose of meeting legal costs, with the payment to be characterised at trial. Certain orders of 11 February 2022 were discharged and replaced with orders for C Pty Ltd to sell the commercial properties by public auction for the best price reasonably obtainable.
On 5 December 2023 I delivered judgment in Evans & Watts (No 2) [2023] FedCFamC1F 1033 and made orders for the husband to pay the wife the sum of $750,000 as partial property settlement.
Final hearing commenced on 13 January 2025 and ran for 8 days with judgment reserved on 22 January 2025.
MATERIAL RELIED UPON
The wife relied upon the following documents:
(a)The wife’s Case Outline filed 6 January 2025;
(b)The wife’s Amended Application in a Proceeding filed 6 January 2025;
(c)The wife’s affidavit filed 6 January 2025;
(d)The wife’s amended trial affidavit filed 19 December 2024;
(e)The wife’s Financial Statement filed 13 December 2024;
(f)The wife’s Undertaking as to Disclosure filed 13 December 2024;
(g)The affidavits of Mr AM filed on 13 December 2024 and 28 December 2024; and
(h)The affidavit of Mr AN filed 19 December 2024.
The wife was cross-examined.
The husband relied upon the following documents as set out in his Amended Case Outline filed 13 January 2025:
(a)The husband’s Further Amended Response to Initiating Application filed 20 December 2024;
(b)The husband’s Financial Statement filed 6 January 2025;
(c)The husband’s affidavit filed 13 December 2024;
(d)The affidavit of Dr AO filed 13 December 2024;
(e)The affidavit of Mr KK filed 13 December 2024;
(f)The affidavit of Mr AP filed 13 December 2024;
(g)The affidavit of Mr AQ filed 13 December 2024; and
(h)The affidavit of Mr AR filed 10 January 2025.
The husband was cross-examined.
Mr KK, Mr AQ and Dr AO were cross-examined.
The documents tendered and received into evidence are set out in Schedule 1 to these reasons.
Expert evidence
A number of single experts were appointed in this matter.
Ms AS of AT Company provided three reports, including an updating report dated 12 December 2024, valuing a number of the entities in the asset pool. Ms AS was cross‑examined.
Mr AU of AV Valuers was appointed to value 1 P Street. He provided a report dated 8 November 2024. Mr AU was cross-examined.
Mr AW of AV Valuers was appointed to value a number of properties. Of these valuations, the only one in contention was Mr AW’s valuation of JJ Street. The registered proprietor is B Pty Ltd, so the value of this property is important for the overall value of B Pty Ltd. On 10 January 2025 the husband filed an affidavit annexing a different expert valuation of JJ Street as at 9 January 2025 from Mr AR. The husband was given leave to rely upon this evidence because it had been foreshadowed, an order had earlier been made on 6 November 2023 permitting evidence from Mr AR. Both Mr AW and Mr AR were cross-examined.
Mr BQ of AV Valuers provided a report valuing AH Street at $21,600,000 as at 29 October 2024. Mr BQ was not cross-examined.
On 6 January 2025, one week before the commencement of the trial, the wife filed an Amended Application in a Proceeding seeking leave to rely upon the expert reports of Mr AM, Mr AX, Ms AY, Mr AZ and Ms BA. In relation to Mr AX, the wife in the alternative sought leave to rely upon schedules prepared by Mr AX as summaries pursuant to s 50 of the Evidence Act 1995 (Cth) (“Evidence Act”).
Mr AM of BC Lawyers swore two affidavits. The first, filed 13 December 2024, annexed two reports. These reports gave his expert opinion on several issues. It is not necessary to mention them all here. The second affidavit, filed 28 December 2024, annexed a report by Mr AM concerning the liability of the husband and a self-managed superannuation fund to capital gains tax if certain properties were sold.
The husband objected to paragraphs 86 to 92 of the first report dated 2 December 2024, which answered a number of specific questions. The impugned paragraphs responded to the following question:
Question 7
Your assessment of the balance of the Division 7A loan between [B Pty Ltd] and the Husband in:
The 2019 Financial Year Special Purpose Financial Report; and
The 2023 Financial Year Special Purpose Financial Report when the 2023 [B Pty Ltd] Dividend was declared (or just prior to the dividend being deemed if possible).
I rejected these paragraphs for two reasons. Firstly, Question 7 put to Mr AM seeks an “assessment” of a Division 7A loan of $2,582,376 owing by the husband and appearing in the balance sheet of B Pty Ltd for the financial year ended June 2019. It is unclear what expertise was brought to bear upon this loan in making an “assessment”. Secondly, the reasoning process of Mr AM exposed in paragraphs 86 to 92 involved making a number of assumptions, including the assumption that the loan was made pursuant to a Facility Agreement dated 30 June 2011. In substance Mr AM was invited to, and did, engage in speculation about the loans on the basis of his assumptions, despite noting in relation to the 2019 loan, “the manner in which the accounts have been cast makes it difficult to determine whether the minimum repayment in respect of each year's loan has been made” (paragraph 91). He assessed the 2023 loan using the same assumptions. Objection having been taken, in my view the paragraphs were inadmissible for these reasons.
Otherwise the evidence of Mr AM was read and he was not cross-examined.
The report of Mr AX was annexed to an affidavit affirmed on 12 December 2024, filed on 13 December 2024 and received by the husband on that date. It comprised a number of summaries of transactions, specifically withdrawals and deposits, by the husband, B Pty Ltd, the O Trust, the C Trust, Superannuation Fund 1, Superannuation Fund 3, S Unit Trust, S Partnership, S SF Partnership, AJ Pty Ltd, PP Unit Trust, and certain miscellaneous transactions. He also annexed a number of summaries which the wife sought to adduce separately pursuant to s 50 of the Evidence Act. I received the summaries pursuant to s 50 and gave leave to the wife to rely upon the affidavit, but limited pursuant to s 136 of the Evidence Act, to evidence explaining the summaries.
I refused leave to the wife to rely upon the evidence of Ms AY, Mr AZ and Ms BA, because none of these expert witnesses had been foreshadowed and all were served unreasonably close to the trial. But in any event, the evidence of Ms BA was considered by the single expert valuer of P Street. I return to this later.
PART VIII
Part VIII of the Act sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s 79 of the Act, which gives the Court power to make such orders for alteration of property interests as it considers appropriate.
Section 79(2) of the Act provides that:
The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the factors to be taken into account in considering what order, if any, should be made. These will be discussed in detail below.
In Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) the High Court made clear at [37] it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in property, as well as their liabilities and financial resources at the date of the hearing (see Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at [72]–[73]). Contributions are then identified and assessed, to determine the contribution based entitlements of the parties expressed, often, as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach. The matters referred to in s 75 of the Act are considered to determine the adjustment (if any) to be made to the contribution entitlements, the Court resolves what order is just and equitable in all the circumstances of the case.
Several other fundamental points should be made. Under Australian law there is no “community” in property owned by spouses individually and the question of whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different” from those at the time when the discretion may be exercised (Stanford at [37]–[39], [50]; Wirth v Wirth (1956) 98 CLR 228 at 231–232 and 247–248).
Unless and until property rights or interests are adjusted pursuant to s 79, one spouse has no inchoate or other proprietary interest in the exclusive property owned by the other spouse (Bevan at [80]; Lin & Ruan (2021) FLC 94-024 at [41], [48]–[49]; Sarto & Sarto (2022) 65 Fam LR 605 (“Sarto”) at [19]; Agnarsson & Agnarsson (No 4) [2024] FedCFamC1F 407 at [46]). It is wrong to assume that one spouse enjoys an inchoate interest in the exclusive property of the other spouse “simply because it was acquired during the marriage” (Sarto at [24]). So in Duarte v Morse (2019) 59 Fam LR 323 (“Duarte v Morse”) at [529]–[532], the Full Court explained that once property (in that case, shares) was held exclusively by one spouse, there is no occasion to characterise such property as “marital” or “matrimonial property”, because the starting point, as settled in Stanford, is to identify the parties’ property according to ordinary legal and equitable principles at the time of trial. Until the Court exercises its discretion and unless restrained by an injunction made under s 114(1) of the Act, the spouses may each exert the full measure of their property rights against third parties and one another (Kartal & Templeman [2022] FedCFamC1A 46 at [53]).

In particular, where a property is purchased by one spouse entering into a mortgage, the funds derived from the mortgage loan are a payment and contribution by that spouse. Borrowed money normally (in the absence, for example, of a Quistclose trust) becomes the beneficial property of the borrower and the lender is left with an in personam right, secured or unsecured, of repayment (Twinsectra Ltd v Yardley [2002] 2 AC 164 at [68]; Ying v Song [2010] NSWSC 1500 at [32]; Papas v Co [2018] NSWSC 1404 at [399]). Putting to one side situations where the other spouse may have a proprietary interest in the property under a resulting or constructive trust, the property is an asset of the spouse who is the owner, unless and until the Court exercises its power to divide the parties’ assets by adjusting the legal interests.
Consequently, as a general comment, it was unfortunate that a repeated feature of the wife’s evidence was the claim that the spouse parties or “[Mr Watts] and I” purchased a number of properties, registered in the “sole name” of one or other spouse, using “our savings” for the deposit together with a mortgage by the registered spouse as owner. On the other hand, it was a pattern in the husband’s evidence to claim that he used Division 7A loans to make property purchases, which at least gave a more concrete source for the funds, where the wife claimed to use “our savings”. The wife did not give any detail of what savings she referred to, or how they were joint funds. This approach tended to confuse or obscure at the time of trial the identification of the parties’ property interests or the details of ownership required by Stanford. A perception by one spouse that property owned by the other spouse is “ours” or “marital property” may possibly have some relevance to the questions of the parties’ “stated or unstated assumptions and agreements about property interests during the continuance of the marriage” (Stanford at [41]), but it does not constitute evidence of ownership according to ordinary common law and equitable principles.
Stanford at [40] also made clear that the requirement pursuant to s 79(2) that it would be just and equitable to make orders altering property should not be conflated with the requirements of s 79(4). The requirement to make an order that is just and equitable permeates the entire decision-making process and is not a threshold issue (Martin & Newton (2011) FLC 93-490 at [306]; Bevan at [62], [86]). The very fact of separation may lead to the ready satisfaction of the just and equitable requirement (Stanford at [41]–[42]). Here the parties accept it would be just and equitable to make some form of adjustment. However, the Court must also be satisfied that the final proposed orders are just and equitable, and I will return to this below.
Having regard to the language of both s 79(1) and s 79(2) of the Act, the Court is required to make orders which are not only “just and equitable” but also “appropriate” (Zao & Lee [2019] FamCAFC 169 at [48]; Aitken & Aitken (2023) FLC 94-142 at [59]). Section 80 grants specific powers to make a range of different orders to adjust property interests.
Section 81 is also relevant, although the Full Court has held it is neither a “head of power” nor an absolute requirement; it reflects a policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings.
Disclosure
A substantial part of the wife’s case was that the husband had engaged in serial defaults in complying with his disclosure obligations and breached numerous Court orders. For this reason, some detailed focus on relevant rules and principles is necessary.
I accept the duty of disclosure has been called “absolute” and enforces a high normative standard, fundamental to the integrity of this Court’s processes in financial cases. I have observed elsewhere that this duty “is not some hollow guideline to which perfunctory lip service can be paid”, but it does not embody a counsel of perfection and is not unconfined (Wei v Xia (No 5) (2023) 67 Fam LR 421 at [168]–[175]). Rather, the duty of disclosure is confined by relevance and the overarching purpose set forth in s 95 of the Act.
In Huang & Wen (No 3) [2025] FedCFamC1F 71 I recently had occasion to consider the interaction of the established principles concerning disclosure, complaints about non‑disclosure and the overarching purpose, which I venture to repeat:
78. To avoid unnecessary repetition, I set out my understanding of many of the relevant principles, summarised in the following propositions. Firstly, the duty and obligations of disclosure are “absolute” and enforce a high normative standard, fundamental to the integrity of this Court’s processes in financial cases under Pt VIII of the Act. Secondly, although described as absolute, the duties of disclosure are confined by relevance, reasonableness and proportionality. Thirdly, the obligation requires disclosure of only those documents in the possession, custody or control of the disclosing party. Fourthly, the statutory duty to uphold the overarching purpose (s 95 of the Act) imposes upon litigants requirements of efficiency, timeliness, cost and proportionality which may serve to limit the scope of arguments about disclosure by obliging a party to assess rationally and carefully not only the materiality and legitimacy of claims about disclosure but their true importance in the overall litigation. Fifthly, the obligations and purpose of disclosure require real proactive and frank conduct by a disclosing party, but are generally not intended to place one party in a position to undertake an unreasonable, overly detailed, unnecessarily fastidious or obsessive audit of another party’s expenditure, dealings and transactions over many years, as opposed to ameliorating the disparity where there is a clear imbalance between parties in their access to relevant financial information (Julien & Perrin (No 2) [2025] FedCFamC1F 50 (“Julien & Perrin (No 2)”) at [14]–[21]; Wei v Xia (No 5) (2023) 67 Fam LR 421 (“Wei v Xia (No 5)”) at [168]–[175]).
79. Sixthly, the possible consequences of a failure to disclose can include a finding that hidden assets exist, or taking account of the likely existence of other assets under s 79(4)(e) of the Act (s 75(2)(o) of the Act), or an order beyond the ascertained property, to achieve substantial justice relative to the non-disclosure or an order that all known assets be awarded to the innocent party (Wei v Xia (No 5) at [175]). The question is ultimately one of demonstrating injustice to a vulnerable party in need of the protection of the duty to disclose (Stopford Malloy & Malloy [2021] FedCFamC1F 123 at [22]–[24]). However, as the Full Court pointed out at [87] in Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006 the achievement of justice must be relative to the subject non-disclosure.
80. It is important to emphasise that to support a factual finding that assets exist beyond the known asset pool or a conclusion that notional property should be added back in the assets of a non-disclosing party, by inferential reasoning, the claimant must adduce evidence which engenders a state of actual persuasion in the mind of the tribunal of fact and this may be unattainable if the evidence is “slight, general or scanty” (Weiv Xia (No 5) at [162]). Where an inference is relied upon “it must be more than an inference of equal degree of probability with other inferences, so as to avoid guess or conjecture” (Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275–276, [85]–[88]; Lithgow City Council v Jackson (2011) 244 CLR 352 at [94]). In substance, the effect of the jurisprudence in this Court concerning non-disclosure is to enhance the probability of the inferences available from non-disclosure adversely to the defaulting party. Having said that, the degree of persuasion will be influenced by the overall probabilities of the situation assessed from the combined cumulative weight of all evidence, including circumstantial evidence, as a unified whole (Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 128; Wei v Xia (No 5) at [163]–[165]).
It is not the automatic consequence of deficiencies in disclosure that the innocent party receives a greater adjustment in their favour (Needham & Trustees of the Bankrupt Estate of Needham (2017) FLC 93-777 at [40]).
The arguments of the wife appeared to proceed from the presupposition, common in matrimonial litigation, that the husband’s conduct during the proceedings has been motivated by a devious intention to mislead her and hide or dissipate assets after separation. Consequently, implicit in her claims about disclosure was the proposition that the husband deliberately tried to obscure his financial contributions, particularly after separation, through non-disclosure and deplete the asset pool in which he would share. This aspect of her case included a repeated complaint, not that she had been unable to obtain or lacked information, but that she had to resort to the court’s processes, such as issuing subpoenas, to fill gaps in the husband’s disclosure. Thus gaps in the husband’s information about expenditure or for which there was no explanation were perceived to be evidence of the husband’s trickery and confirmation of his central objective to deprive the wife of her just entitlement. Her arguments concentrated on the proposition that the wife should have a higher percentage adjustment under s 79(4)(e) because the husband’s conduct had made it more difficult for her to obtain information. The wife’s final submissions also contended the Court should infer further cash assets exist that are not yet located (Exhibit W, paragraphs 68 and 86).
It was clear from the trial affidavit of the wife that she engaged in a thorough, if not overly detailed, audit of the husband’s financial dealings especially since separation. But this simply demonstrated the substantial volume of information garnered by the wife and available at trial. As will be explained in more detail later, there have obviously been expenditures of funds by the husband for which no, or no clear explanation, was given. But the wife’s extensive evidence about the dealings of the husband, taken together with his evidence, tended to lay bare with considerable clarity the asset position of the parties overall and in particular the dealings by the husband which affected the asset pool after separation. Consequently, I am driven to the conclusion that the wife’s complaints about non-disclosure were exaggerated. Again as will be explained, the wife commenced the trial claiming a number of categories of notional property which she valued at millions of dollars. By the end of the trial the value of these categories was substantially discounted by her. As a result a material part of the trial was devoted to an unproductive exploration of matters which ultimately appeared largely immaterial when placed in the context of the wider factual matrix and the composition of the property pool.
More importantly, the evidence overall and its probabilities militated against any actual persuasion that the husband’s deficits in disclosure were as egregious or important as the wife claimed, or that the achievement of justice relevant to any non-disclosure required findings of an adjustment in her favour or that there existed undisclosed or hidden assets. Indeed as will be explained, the evidence demonstrated the husband took steps after separation which maintained and enhanced the property pool.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES AT THE DATE OF THE HEARING
I turn then, to the identification of parties’ property, liabilities, and financial resources at the date of the hearing, according to ordinary principles of law and equity.
A joint balance sheet was tendered by the parties, which became Exhibit I. In relation to disputed items, I express my conclusions as follows, noting the reference to item numbers is a reference to the item number on Exhibit I.
Item 1
The value of P Street was disputed. Mr AU valued the property at $2,525,000 on 6 November 2024. The wife claimed the value should be $3,100,000.
As part of her final relief the wife sought an order that she receive P Street unencumbered. In her submissions the wife advanced the position that she sought P Street, but if the Court made such an order, the property should be treated as having a value of $3,100,000. The husband also sought P Street be received by him. On 11 February 2022 orders had been made for the property to be sold, but this has not happened. The wife accepted this was an alternative the Court could consider as part of the final relief ordered.
At the trial, she sought leave to rely upon adversarial expert evidence from Ms BA to support this value, but as mentioned leave was refused, and the report of Ms BA was not in evidence. Nonetheless, Mr AU was supplied with a copy of Ms BA’s report prior to his cross-examination. He therefore expressed views in cross-examination having taken the report of Ms BA into account.
Mr AU used comparable sales as his valuation method. In cross-examination by counsel for the wife, Mr AU initially appeared to accept that a value closer to $3,100,000 was appropriate, after considering the report of Ms BA. It was put to him that he should take into account a sale of the property next door on P Street. The sale price of that property was said to be $3,100,000. He at first said “perhaps” this changed his opinion of the value of P Street. However, the problem is that there was no evidence of a completed sale of the next door property on P Street, only the assumption that the property was “under contract”. Under cross-examination from the solicitor advocate for the husband, Mr AU agreed that, if the next door property on P Street was to be treated as a comparable sale, he needed to see the contract, know if it contained any unusual special conditions, and could not treat the asserted sale as reliable unless it had settled. He then appeared to return to supporting his original opinion.
Under further cross-examination by counsel for the wife, Mr AU was asked whether he agreed another property on P Street was a comparable sale at $3,200,000 which he had failed to take into account. This property was sold for $3,200,000 in early 2024. It had land two thirds the size of P Street, but superior presentation. Mr AU did not accept it was necessarily comparable. He was also asked about a third property on P Street, which he did use as a comparable sale. It had half the land size of P Street and sold for $2,750,000 in mid-2024. In his report at page 22, Mr AU differentiated the third property on P Street from the parties’ property on the following basis:
Inferior sized land parcel. Superior internal fit out, fittings and fixtures. Superior state of repair and condition. Overall: Superior
I am not obliged to accept any expert value, because reaching a value is a common sense endeavour (Dovgan & Dovgan [2021] FamCA 306 (“Dovgan”) at [215]; Mallet v Mallet (1984) 156 CLR 605 (“Mallet”); Phillips and Phillips (2002) FLC 93-104 (“Phillips”) at [44]). In Phillips the Full Court said:
44. In The Commonwealth v Milledge [1953] HCA 6; (1953) 90 C.L.R. 157 the High Court at pp.161-162 said that the correct approach to be applied to the resolution of a valuation dispute should be a common sense endeavour after consideration of all material to fix a value satisfactory to the mind of the Court as representing the value.
In Dovgan at [215] I set out my understanding of the applicable principles as follows:
a)a trial Judge is not obliged to accept one out of several competing valuations: In the Marriage of Borriello [1989] FamCA 48; (1989) 97 FLR 211; In the Marriage of Goodwin [1990] FamCA 147; (1990) 101 FLR 386 at 394; Tyler v Thomas at [56]; Arcus Shopfitters at [76]; Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004; 333 ALR 193; 109 ACSR 465 at [350]; See also Macquarie International Health Clinic Pty Ltd v Sydney Local Health District (No 11) [2017] NSWSC 1249;
b)where there is valuation evidence from only one expert, the trial judge is not obliged to accept that evidence: Federal Commissioner of Taxation v St Helens Farm (A.C.T.) Pty Ltd [1981] HCA 4; (1981) 146 CLR 336 (“St Helens [Farm] (A.C.T) Pty Ltd”) at [381]; Investa Properties at [350]; this applies equally in this Court where a single expert has been appointed pursuant to Part 15.5 of the Rules: Salmon at [42];
c)the trial Judge, however, must never allow himself to be cast in the role of a valuer or additional expert: Players Pty Ltd v Corporation of the City of Adelaide [2001] SASC 369 (“Players Pty Ltd”) at [81]; Arcus Shopfitters at [76]; Tyler v Thomas at [52];
d)a trial judge cannot draw on his or her own knowledge, experience or expertise to choose between experts or impose a second or third opinion: Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 6 SASR 541 at 544 545; Players Pty Ltd; Tyler v Thomas at [55];
e)valuation is a matter of estimation, not of precise mathematical calculation, involving the making of a value judgment in the metaphorical as well as the literal sense; the value of particular land on a particular day is necessarily to some extent conjectural, no valuation of land can sensibly pretend to be precisely accurate to the last dollar: St Helens Farm (A.C.T.) Pty Ltd at 381; Tyler v Thomas at [46];
f)in making a finding of value as a common sense endeavour, the trial judge should consider the whole of the material before the Court, including expert opinion: Milledge at 162; Lenehan & Lenehan [1987] FamCA 8; (1987) FLC 91-814 at 76,142; Phillips and Phillips (2002) FLC 93-104; (2002) 29 Fam LR 128; [2002] FamCA 350 (at [43]; Garraway v Territory Realty Pty Ltd [2010] FCAFC 9 at [57];
g)while a trial judge should determine a disputed valuation issue where the evidence permits such a determination, there is no obligation to do so irrespective of the state of the evidence: In the Marriage of Little (1990) FLC 92-147 (“Little”); Lunar & Lunar [2019] FCWA 259 at [125]; Atkins and Hunt and Ors [2019] FamCA 977 at [172].
h)if it is too difficult, complex, uncertain or hazardous for the Court to accept a valuation or come to a separate conclusion as to value on the application of proper principles and methodology, it may be a more proper to consider a sale of the property: Little at 78,020; Smith & Smith (1991) FLC 92-261 at 78,759; Bollen & Bollen [2020] FamCA 605 at [34].
I am not satisfied the wife has demonstrated a sufficient basis to depart from the valuation of Mr AU. The methodology adopted by Mr AU was orthodox, and I do not accept he actually resiled from his valuation in cross-examination. Nor do I accept the wife has adduced any sufficient evidence to conclude $3,100,000 is the appropriate value, and Mr AU did not accept it was. I will include P Street in the balance sheet at a value of $2,525,000.
Item 6
The value of the husband’s interest in B Pty Ltd was disputed. The wife insisted the value was $1,321,000, while the husband argued it has no value. This item was valued by Ms AS at nil, because she took into account a liability for the cost of a long running review of more than 20,000 x-rays, put in train by the husband in the course of his practice after 2019, undertaken by Dr AO, at a cost of $1,384,523.
The arrangement between Dr AO and the husband for the review of x-rays began in 2012. Between 2012 and 2019 Dr AO’s fee for reviewing x-rays was covered by a Medicare rebate. The husband claimed the review process after 2019 was affected by the disruptions caused by COVID-19. Dr AO said he stopped offering the review service in 2019 under Medicare as the rebate fee was too low for the work required, and that since mid-2019 he has received no Medicare rebates. In November 2023 the husband accepted Dr AO’s quote of $200 per x-ray for the review of 16,577 images and his quote of $265 per x-ray for the review of 5,561 images as a method to check for pathologies that may have been missed in his patients, before he moved to retirement. Dr AO gave evidence in the husband’s case. He stated his quotes were based on the fees recommended by the Australian Medical Association, and that the review of x-rays was prudent for a cautious health professional, especially if he was approaching retirement.

I also take into account that the wife has incurred interest costs on the loan from BH Financial Services.
Both parties have substantial superannuation interests and are approaching ages where these resources will become available.
(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;
I have already described at length the commitments of the parties.
The wife states she pays for private health insurance for both children. She gives Mr AA $200 per week for personal expenses, and transferred money to Ms BB for similar reasons.
The husband stated he provides both children about $200 weekly for general living expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
The wife receives payments from her Superannuation Fund 2 of $2,641 per week.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
The wife suggested she has a lower standard of living post-separation as compared to the “grandeur” that the husband enjoys, allegedly by his control over the majority of the marital assets. It is hard to know what to make of this argument. The question that is raised by s 75(2)(g) is the reasonableness of the standard of living in all the circumstances. A disparity between each party’s standard of living may bear upon the question of reasonableness, but it is only one circumstance. The evidence satisfies me that both parties presently enjoy a standard of living which is reasonable in all the circumstances.
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation
The husband currently lives with Mr AA at P Street. It was unclear if Ms BB also resides there but the parties agreed that both children consider P Street as their home.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken in to account
The wife sought additional adjustment in her favour to penalise the husband for his conduct in the proceedings including alleged failures in disclosure and breaches of court orders, and for the associated expenses incurred issuing subpoenas, conducting tracing exercises and obtaining expert evidence. Counsel for the wife argued the husband’s conduct was not only a matter for costs but went towards considerations for justice and equity. I do not accept this submission. I have considered the issues of disclosure at length above (at [96]–[102]). Both parties complained about the conduct of the other during the proceedings.
The task of the Court under s 79 is to assess contributions and future needs, not compensation. It is not the purpose of the matters set forth in s 75(2) of the Act to compensate one party for the alleged poor conduct of the other. Even if it be accepted that in some circumstances egregious conduct could be taken into account under s 75(2)(o), the wife here has not shown the conduct of the husband was such that it should be taken into account in delivering to her a higher percentage of the matrimonial pool as opposed to being taken into consideration if any application for costs is made. In my view, in the ordinary course, complaints about conduct are more properly taken into account if a party applies for a costs order in their favour. This does not mean that a costs application made on such a basis would succeed, because the question of costs is separate to adjusting property interests and may be affected by a range of considerations unconnected with disclosure or the conduct of a party during proceedings.
Conclusion
I am not satisfied there should be any adjustment under s 79(4)(e) for either party.
Consequently, the parties’ assets should be divided 46 per cent to the wife and 54 per cent to the husband.
SPOUSE MAINTENANCE
In her proposed Minute of Orders (Exhibit V), the wife sought spouse maintenance of $5,000 per week from the date of making final orders as and until the earlier of:
a.The Respondent Husband’s complete compliance with the terms of these orders; or
b.The expiry of the period of 2 years from the date of these orders.
She held concern about the husband’s compliance with final orders because of his alleged dissipation of funds from the marital pool. She claimed that if the husband delayed any required sales of property she would not receive payment for 6 to 12 months, though no evidence was provided that the husband held such an intention were such orders to be made.
Counsel for the wife submitted that the husband will continue to have access to financial resources in the intervening period between the reserve of judgment and compliance with final orders, but the wife will not. She relies on her weekly gross Superannuation Fund 2 of $2,641 and has an estimated $7,462 in weekly expenses, including some costs for the children. She has large outstanding debts for litigation funding. She claims that since separation she has been unable to maintain the same standard of living because the husband has controlled, and enjoyed the benefit of, the majority of the marital assets.
The husband denied the wife has need for spouse maintenance and claimed he does not have capacity to pay it. He pointed to a $40,000 increase in the wife’s expenses for a counselling course which the wife does not intend to utilise for paid work, and submitted this is not a proper basis for spousal maintenance or reason for him to account for the increase in her needs. He also submitted that the wife’s proposed order sought spouse maintenance until the husband’s “complete compliance” with the final orders, and suggested this form of order was adverse to the duty to bring finality to proceedings. The husband was not cross-examined about spouse maintenance.
Section 72(1) of the Act makes provision for spouse maintenance:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Neither party is caring for a child under 18 years. I am not satisfied the wife has shown she is unable to obtain gainful employment by reason of age or physical or mental incapacity. On the contrary she impressed me as a strong and capable person. Consequently, she must demonstrate some other “adequate reason”. I am not persuaded she has done so. The orders which I propose to make will deliver a very substantial cash payment to the wife, which will be more than adequate for her to rehouse herself and have funds to invest to generate income. Her other assets such as superannuation are substantial. Until the wife receives her cash payment she has her own sources of income.
WHETHER THE PROPOSED ORDERS ARE JUST AND EQUITABLE
Although the parties agree that it would be just and equitable to make an order adjusting their property interests, s 79(2) requires the Court to be satisfied the proposed order itself is just and equitable.
The High Court in Stanford commented at [36] on the meaning of “just and equitable” as follows:
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
(Footnotes omitted)
On the basis of a division 46 per cent in favour of the wife, it is clear she is entitled to a substantial cash payment. The size of the payment is contingent upon a number of other considerations.
Neither party directed any detailed submissions to their proposed form of final orders. As mentioned, both parties sought to retain P Street. The husband desired to stay in the property, and accept liability for the mortgage, as he has continuously occupied it, one or both children live there, and he had every expectation that he would keep the property until the wife changed her position late into proceedings. He argued it would not be just and equitable to remove that security from him without proper reason. The wife sought to receive the property, unencumbered, and gave evidence she may use the property to earn rental income. She did not think it would be disruptive to the husband to rehouse himself and claimed he had let the property go to “ruin”. She agreed P Street was the only home the children have ever known and that they effectively treat it as their “base”. She said she partially wanted the property because she did not believe the husband had sufficient cash to pay her an equivalent sum, and because it was a “clean” property not subject to other holdings, though when cross-examined she said she still wanted to keep the property even if the husband could afford a cash payment.
The wife has not lived there for more than five years, and left the property voluntarily. It has been the husband’s home since separation. On balance it is more appropriate for P Street to be retained by the husband, included in the asset pool with a value of $2,525,000, and with him shouldering the liability for the mortgage.
Both parties proposed orders that the wife receive the Suburb R property unencumbered from the husband.
The wife also proposed that she receive the 1 CC Street property unencumbered from the husband. This was not agreed. There was no convincing reason why this property should be transferred to the wife when her entitlement can be satisfied by a cash payment.
The parties seek differing orders regarding Superannuation Fund 1. The wife wants splitting orders to be made, rolling her interest out of Superannuation Fund 1, with the husband remaining as a member. The primary asset of Superannuation Fund 1 is L Street. On the wife’s proposal, the sale of L Street, and any risk that the sale does not meet the value in the balance sheet, would be borne by the husband. It was not disputed that the property fell into arrears when the husband withdrew all liquid funds from Superannuation Fund 1, and rolled it into the Superannuation Fund 3 (Transcript 16 January 2025, p.72 lines 14–17). The husband argued that the property was a problematic investment that needed to be sold, and pointed to the wife being the initial driver of the project which had ultimately caused the parties to lose money. The wife in cross-examination said that she could have met the costs associated with the mortgage but did not want to as she thought the husband was in a better position to do so. Neither party covered themselves in glory in this regard.
The husband wants to wind up Superannuation Fund 1 and seeks orders for the disposal of L Street. He argued that once the property has been sold and the value realised, then the known value of the interests of the parties may be adjusted, after which Superannuation Fund 1 may be wound up. In this way, any risk can be fairly distributed between both parties. As both parties are directors of the corporate trustee, their entitlements can be rolled into another complying fund in accordance with relevant superannuation laws as they see fit without the need for a splitting order.
One of the extraordinary aspects of this matter, as mentioned already, is that there have twice been Court orders for the sale of L Street. As mentioned, the wife seeks to be released from the five-year lease Z Pty Ltd entered into with S Pty Ltd for the use of L Street and her personal guarantee for the rent. This can happen if the property is sold.
The most appropriate order is in the nature of a mandatory injunction requiring the parties as directors of the corporate trustee of Superannuation Fund 1 to take the necessary steps to sell L Street and then roll out their respective interests in Superannuation Fund 1 to another complying fund.
The husband sought orders for W Company, the business of B Pty Ltd, to be sold, and after payment of all associated costs and debts, the balance to be paid 65 per cent to the husband and 35 per cent to the wife. He does not want to sell the business premises at JJ Street, but believes the best possible outcome for the sale of the business would be to sell the lease so it may stay operating at the same site. The wife did not resist the sale of the business, but it seemed she thought it better value to convert JJ Street from a medical practice into a house, and then sell the property with the business. I do not however think it is necessary to order a sale. I have found B Pty Ltd has no value once the liability to Dr AO is taken into account. Rather than ordering a sale, it is less complicated and more efficient to use the values on the balance sheet for B Pty Ltd as the basis for the calculation of the wife’s cash entitlement. There was no dispute that both B Pty Ltd as the owner of W Company and as owner of JJ Street as trustee for the S Unit Trust was property of the husband. The husband can cause B Pty Ltd to sell its business if he chooses, as sole director and shareholder. An order for sale is not required. JJ Street can be retained by B Pty Ltd as trustee as the primary source of income for that trust, again if the husband chooses.
On a 46/54 percentage division, the wife is entitled to assets totalling $14,997,301, based upon the values found or agreed at the date of judgment. If the husband retains P Street with its mortgage and transfers to the wife the Suburb R property unencumbered, by assuming the liability NAB account numbers …85 and …66, and the parties retain their other property interests and superannuation, the wife would require a cash payment of $8,668,680 to receive her entitlement, based upon the values found or agreed at the date of judgment.
It is necessary to consider how the amount payable to the wife can be raised by the husband and could be secured in the event he fails to make payment. The most substantial asset on the balance sheet is the loan owing to him of $11,840,501 by the C Trust. Ms AS gave a net asset value of $4,663,280 to the C Trust. Her analysis showed that although the C Trust has extensive valuable property holdings valued at $37,615,000, these properties secured loans to NAB totalling $20,793,500. In broad figures a sale of the C Trust properties would result in a cash fund of approximately $17,000,000 after discharge of the secured loans, in other words more than enough to repay the beneficiary loan of $11,840,501 owing to the husband. The husband himself proposes orders for himself, O Pty Ltd and C Pty Ltd to take the necessary steps to sell properties to finance a payment to the wife. He proposes that O Pty Ltd and C Pty Ltd be joined as parties for this purpose which I accept is appropriate. However, he nominates specific properties on the basis that they would be sufficient to fund a payment equivalent to 35 per cent of the asset pool. I have determined the wife is entitled to 46 per cent. Consequently, it may be necessary to sell additional properties.
To address this contingency, the husband, O Pty Ltd and C Pty Ltd should be ordered to sell such properties as are necessary to pay to the wife her entitlement.
The other observation to make is that the balance sheet has obvious complexity, and the value of interests in the C Trust and O Trust are contingent on the market value of several parcels of real estate. These may achieve more or less than the values available at trial when they are sold. The orders should make provision for adjustment, up or down, of the amount payable to the wife, to reflect the actual value of the relevant properties as determined by the market at sale. I will include a notation that as at the date of the orders the amount payable to the wife was $8,668,680.
The husband sought a specific order for a payment to him by the wife of a total of various smaller amounts for such things as expert fees, being $59,500, which had been ordered during the currency of the proceedings. The simplest way to address this minor matter is to deduct $59,500 from the amount payable by the husband to the wife.
The parties held time share units in something called “[T Resort]” in the United States of America. Neither suggested these units had any value. Each party proposed orders that their entitlements in T Resort be transferred to the other party. There is no basis to prefer either position other than an arbitrary choice. I will make the order proposed by the husband to favour the wife, since she is the applicant.
The wife sought an order compelling the husband to take the necessary steps to release her from obligations associated with S Pty Ltd and Z Pty Ltd. I will make an order compelling both parties to take the necessary steps to achieve this.
The wife sought an order for the burial plots to be transferred to her sole name. There was no dispute that the burial plots were an asset of the wife alone. It is unnecessary to make this order.
Based upon the values agreed or found at the date of this judgment, on a 46/54 percentage division, the wife and husband will have the assets and liabilities as set out in the below table (figures rounded and excluding items with a nil or zero balance).

Assets and liabilities to be retained by the wife

Value ($)

Q Street, Suburb R NSW

$850,000

2 NN Street Suburb OO QLD (50 per cent interest held as tenants in common with wife's mother)

$787,500

1 NN Street Suburb OO QLD

$800,000

NAB …97

$30,459

ANZ …43

$1,391

BN Bank …90

$699

Motor Vehicle 1

$19,750

Motor Vehicle 2

$3,000

Household contents of P Street, Suburb H NSW, personal collections

$7,500

Household contents and personal effects of 2 NN Street, Suburb OO QLD

$5,000

Burial plots

$4,500

Jewellery

$67,640

Partial property settlement payment

$750,000

Cash payment from the husband

$8,668,680

Superannuation Fund 1 (Trustee: V Pty Ltd) 60.8 per cent interest

$341,643

Superannuation Fund 5

$1,927

Superannuation Fund 2 – Capitalised value of pension payments

$2,682,612

Cash payment to the husband

-$59,500

Funds owed to Mr KK and Ms BO

-$15,000

Funds owed to Mr BP

-$10,000

Total:

$14,937,801

Assets and liabilities to be retained by the husband

Value ($)

P Street,Suburb H NSW2750

$2,525,000

1 CC Street,Suburb H NSW

$1,575,000

O Pty Ltdas trustee forO Trust

$103,800

C Pty Ltd as trustee forC Trust

$4,663,280

V Pty Ltd as trustee for S Reserve Trust

$1,245,000

B Pty Ltd as trustee for S Unit Trust

$1,153,000

AJ Pty Ltd

-$27,865

BK Pty Ltd

$12,750

LoantoB Pty Ltd

$749,215

LoantoO Trust

$127,750

LoantoC Trust

$11,840,501

LoantoS Reserve Trust

$133

LoantoS SF Partnership

$5,619

LoantoAJ Pty Ltd

$694

NAB…65

$4,622

NAB…86(HeldjointlywithDr AO)

$988,734

NAB…16

$32,505

BL Bank…15

$911

BD Company Shareholdings

$238,414

BE Pty Ltd shares

$140,624

BM Financial Services Portfolio

$76,706

Household contents of P Street, Suburb H NSW, personal collections

$7,500

Duplicated funds paid by the husband to Superannuation Fund 1 refunded by U Financial Services subsequently

$44,764

Funds unaccounted for transferred from NAB …65 in the total sum of $2,800,000 under description of "wages" to X Bank …37 and not returned to B Pty Ltd …21

$649,740

Distributions made to the children as per the B Pty Ltd accounts

$352,734

Income paid to the children

$605,994

Funds paid from the husband’s personal NAB …65 as “gift for service” payments

$410,000

Superannuation Fund 1 (Trustee: V Pty Ltd) 39.2 per cent interest

$220,425

Superannuation Fund 4

$246,605

AK Pty Ltd as trustee for Superannuation Fund 3

$1,947,168

Cash payment from the wife

$59,500

Cash payment to the wife

-$8,668,680

NAB Loan Account …54 (1 P Street)

-$958,729

NAB Loan Account …66

-$484,729

NAB Loan Account …85

-$941,408

Mr Watts Income tax 551 liability

-$861,975

Mr Watts tax Activity Statement 001

-$420,275

Total:

$17,665,027

COSTS

I will order that any party who seeks costs to file the relevant application within 28 days of these orders.
CONCLUSION
For all the foregoing reasons I am satisfied the orders set out at the commencement of these reasons should be made.
ADDENDUM
The parties were notified of the listing at 9.30 am for delivery of judgment on 26 March 2025 at 5.01 pm on 25 March 2025. At 8.45 pm on 25 March 2025 the wife forwarded to my Chambers by email a revised proposed Minute of Orders, with the consent of the husband. No application to reopen or for other leave was sought by the wife. No submissions were directed to the changes made which varied the proposed minute from Exhibit V, which had been addressed by the parties at final hearing. No explanation was proffered to explain why this revised minute was forwarded to Chambers some two months after judgment was reserved and only after the parties were notified that judgment would be delivered the following day. It would have been entirely appropriate to ignore the document. However, with some misgivings, in light of the consent given by the husband, the Court received the minute and gave it consideration prior to the delivery of judgment to determine whether it had any prospect of affecting the outcome. It did not.

I certify that the preceding two hundred and seventy-one (271) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper.
Associate:
Dated: 26 March 2025
SCHEDULE 1 – MATERIAL TENDERED AND RELIED UPON BY THE PARTIES

Exhibit Label Document Tendered by

A Minute of consent order for subpoena to BW Company Joint

B List of objections to wife’s affidavit RH

C Wife’s Australian Defence Force service record RH

D X Bank statements …37 RH

E NAB statements …21 RH

F U Financial Services letter dated 20 November 2024 RH

G Balance sheet Joint

H AV Valuers letter dated 10 December 2024 RH

I Balance sheet Joint

J Correspondence between Tiyce Lawyers and Ms AS AW

K Letter dated 20 January 2025 from Tiyce Lawyers to Ms AS AW

L Controlled money statement AW

M Letter from F Lawyers dated 6 October 2021 AW

N Document titled ‘Documents for tender on behalf of the Applicant Wife’. Note: Exhibit N is comprised of the document marked together with the pages from the wife’s tender bundle dated 9 January 2025 nominated in Exhibit N and including p.477-479. AW

O Second electronic bundle dated 21 January 2025 from wife. Note: item 38 pages 709-719 do not form part of the exhibit. AW

P Order dated 3 August 2021 AW

Q Costs notices of wife and husband RH

R Bundle of bank statements with aide memoire cover email dated 20 January 2025 RH

S Documents exhibited to the trial affidavit of the husband as identified in the index to the husband’s tender bundle as items 1 through to 133, and excluding item 40. RH

T Index of husband’s tender bundle RH

U List of Invoices AW

V Wife’s revised Minute of Final Orders dated 22 January 2025 AW

W Wife’s written submissions AW

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 and Kowalski (1993) FLC 92-342 Lin & Ruan (202 l) FLC 94-024; [2021] FamCAFC 90 M & M [1998] FamCA 42 Magnus & Sandri (No 4) [2024] FedCFamC1F 499 Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21 Martin & Newton (2011) FLC 93-490; [2011] FamCAFC 233 Needham & Trustees of the Bankrupt Estate of Needham (2017) FLC 93-777; [2017] FamCAFC 94 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 Norman & Norman [2010] FamCAFC 66 Papas v Co [2018] NSWSC 1404 Phillips and Phillips (2002) FLC 93-104; [2002] FamCA 350 Russell v Russell (1999) FLC 92-877; [1999] FamCA 1875 Sarto & Sarto (2022) 65 Fam LR 605; [2022] FedCFamClA 16 Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52 Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173 Twinsectra Ltd v Yardley [2002] 2 AC 164; [2002] UKHL 12 Vass v Vass (2015) 53 Fam LR 373; [2015] FamCAFC 51 Watson v Ling (2013) FLC 93-527; [2013] FamCA 57 Watts & Evans [2022] FedCFamC1F 1063 Wei v Xia (No 5) (2023) 67 Fam LR 421; [2023] FedCFamC1F 679 Welch & Abney (2016) FLC 93-756; [2016] FamCAFC 271 Welch & Abney (No 2) [2015] FamCA 1116 Wirth v Wirth (1956) 98 CLR 228; [1956] HCA 71 Wotton & Wotton [2010] FamCA 194 Ying v Song [2010] NSWSC 1500 Zao & Lee [2019] FamCAFC 169
Division:	Division 1 First Instance
Number of paragraphs:	271
Date of hearing:	13–22 January 2025
Place:	Sydney
Counsel for the Applicant:	Mr Trout
Solicitor for the Applicant:	Tiyce & Lawyers
Solicitor for the Respondent:	Mr Reeve of Marsdens Law Group

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

Assets and liabilities to be retained by the wife	Value ($)
Q Street, Suburb R NSW	$850,000
2 NN Street Suburb OO QLD (50 per cent interest held as tenants in common with wife's mother)	$787,500
1 NN Street Suburb OO QLD	$800,000
NAB …97	$30,459
ANZ …43	$1,391
BN Bank …90	$699
Motor Vehicle 1	$19,750
Motor Vehicle 2	$3,000
Household contents of P Street, Suburb H NSW, personal collections	$7,500
Household contents and personal effects of 2 NN Street, Suburb OO QLD	$5,000
Burial plots	$4,500
Jewellery	$67,640
Partial property settlement payment	$750,000
Cash payment from the husband	$8,668,680
Superannuation Fund 1 (Trustee: V Pty Ltd) 60.8 per cent interest	$341,643
Superannuation Fund 5	$1,927
Superannuation Fund 2 – Capitalised value of pension payments	$2,682,612
Cash payment to the husband	-$59,500
Funds owed to Mr KK and Ms BO	-$15,000
Funds owed to Mr BP	-$10,000
Total:	$14,937,801
Assets and liabilities to be retained by the husband	Value ($)
P Street,Suburb H NSW2750	$2,525,000
1 CC Street,Suburb H NSW	$1,575,000
O Pty Ltdas trustee forO Trust	$103,800
C Pty Ltd as trustee forC Trust	$4,663,280
V Pty Ltd as trustee for S Reserve Trust	$1,245,000
B Pty Ltd as trustee for S Unit Trust	$1,153,000
AJ Pty Ltd	-$27,865
BK Pty Ltd	$12,750
LoantoB Pty Ltd	$749,215
LoantoO Trust	$127,750
LoantoC Trust	$11,840,501
LoantoS Reserve Trust	$133
LoantoS SF Partnership	$5,619
LoantoAJ Pty Ltd	$694
NAB…65	$4,622
NAB…86(HeldjointlywithDr AO)	$988,734
NAB…16	$32,505
BL Bank…15	$911
BD Company Shareholdings	$238,414
BE Pty Ltd shares	$140,624
BM Financial Services Portfolio	$76,706
Household contents of P Street, Suburb H NSW, personal collections	$7,500
Duplicated funds paid by the husband to Superannuation Fund 1 refunded by U Financial Services subsequently	$44,764
Funds unaccounted for transferred from NAB …65 in the total sum of $2,800,000 under description of "wages" to X Bank …37 and not returned to B Pty Ltd …21	$649,740
Distributions made to the children as per the B Pty Ltd accounts	$352,734
Income paid to the children	$605,994
Funds paid from the husband’s personal NAB …65 as “gift for service” payments	$410,000
Superannuation Fund 1 (Trustee: V Pty Ltd) 39.2 per cent interest	$220,425
Superannuation Fund 4	$246,605
AK Pty Ltd as trustee for Superannuation Fund 3	$1,947,168
Cash payment from the wife	$59,500
Cash payment to the wife	-$8,668,680
NAB Loan Account …54 (1 P Street)	-$958,729
NAB Loan Account …66	-$484,729
NAB Loan Account …85	-$941,408
Mr Watts Income tax 551 liability	-$861,975
Mr Watts tax Activity Statement 001	-$420,275
Total:	$17,665,027

Exhibit Label	Document	Tendered by
A	Minute of consent order for subpoena to BW Company	Joint
B	List of objections to wife’s affidavit	RH
C	Wife’s Australian Defence Force service record	RH
D	X Bank statements …37	RH
E	NAB statements …21	RH
F	U Financial Services letter dated 20 November 2024	RH
G	Balance sheet	Joint
H	AV Valuers letter dated 10 December 2024	RH
I	Balance sheet	Joint
J	Correspondence between Tiyce Lawyers and Ms AS	AW
K	Letter dated 20 January 2025 from Tiyce Lawyers to Ms AS	AW
L	Controlled money statement	AW
M	Letter from F Lawyers dated 6 October 2021	AW
N	Document titled ‘Documents for tender on behalf of the Applicant Wife’. Note: Exhibit N is comprised of the document marked together with the pages from the wife’s tender bundle dated 9 January 2025 nominated in Exhibit N and including p.477-479.	AW
O	Second electronic bundle dated 21 January 2025 from wife. Note: item 38 pages 709-719 do not form part of the exhibit.	AW
P	Order dated 3 August 2021	AW
Q	Costs notices of wife and husband	RH
R	Bundle of bank statements with aide memoire cover email dated 20 January 2025	RH
S	Documents exhibited to the trial affidavit of the husband as identified in the index to the husband’s tender bundle as items 1 through to 133, and excluding item 40.	RH
T	Index of husband’s tender bundle	RH
U	List of Invoices	AW
V	Wife’s revised Minute of Final Orders dated 22 January 2025	AW
W	Wife’s written submissions	AW