Weller and Weller
[2007] FamCA 1420
•6 December 2007
FAMILY COURT OF AUSTRALIA
| WELLER & WELLER | [2007] FamCA 1420 |
| FAMILY LAW - PROPERTY SETTLEMENT – Identification of assets – Non-disclosure |
| Family Law Act 1975 (Cth) |
In the Marriage of Hickey (2003) 30 Fam LR 355;
In the Marriage of Black & Kellner (1992) 15 Fam LR 343; (1992) FLC 92-287
In the Marriage of Weir (1992) 16 Fam LR 154; (1993) FLC 92-338
In the Marriage of Kannis (2002) 30 Fam LR 83; (2003) FLC 93-135
In the Marriage of DJM & JLM (1998) 23 Fam LR 396; (1998) FLC 92-816
In the Marriage of Omacini (2005) 33 Fam LR 134
Mallett & Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
| APPLICANT: | Ms Weller |
| RESPONDENT: | Mr Weller |
| FILE NUMBER: | SYF | 3708 | of | 2005 |
| DATE DELIVERED: | 6 December 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | JR Loughnan |
| PLACE HEARD: | Sydney |
| HEARING DATE: | 29 November 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr G Johnston | |
SOLICITOR FOR THE APPLICANT: | Gells Lawyers | |
SOLICITOR FOR THE RESPONDENT: | In person | |
Orders
By consent as between the parties and unopposed on behalf of Sagacious Legal, pursuant to s.106B of the Act the Deed of charge between the husband and Sagacious Legal dated 3 May 2007 be set aside, insofar as it affects the interests of the husband and wife.
The husband shall forthwith transfer and assign to the wife the whole of his right title and interest in the net proceeds of sale and all interest accrued thereon of the former matrimonial home at W (“the monies”) held by the Registrar of the Supreme Court of New South Wales in proceedings number … of 2004.
Upon the undertaking of the wife given through her counsel to properly consider all legal advice and to indemnify the husband against any future costs orders, the wife shall take over and conduct on behalf of the parties, proceedings No … of 2005 and proceedings No … of 2004 in the Supreme Court of New South Wales between C Company (NSW) Pty Limited (A.C.N. …) (“[C Company]”) as Plaintiff and the parties as Defendants.
3 a)In the event that the dispute with C Company is capable of resolution without trial the wife shall in any such settlement obtain a release from C Company in favour of the husband and his corporate entities in respect of the whole of his indebtedness to C Company.
3 b)In the event that the dispute with C Company is incapable of resolution or compromise without trial the wife shall do all acts and things necessary in the said Supreme Court proceedings to bring the proceedings to conclusion at the earliest possible time.
The husband shall do all acts and things and execute all documents as are necessary from time to time at the request of the wife in respect of the future conduct of the proceedings referred to in order 3.
The Court declared that the husband is solely entitled to the exclusion of the wife to the remainder of his legacy from his said late mother’s Estate.
The Court declared that otherwise each party is the sole and beneficial owner of all other items of property in their respective possession custody or control including but not limited to superannuation entitlements.
In the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.
That the operation of these orders be stayed for a period of 28 days from the date of the orders.
That within 7 days of the date of these orders the wife send a copy of these orders by ordinary prepaid post to each of the following persons or entities:
Diners Club
ANZ Bank
Citibank
St George Bank
American Express
G.E. Automotive
Sanderson Motors
Alliance Factoring
Reed Group
Credit Corp Services
David Ballard
Carlisle Attorneys
Clayton Utz Solicitors
C Company Holdings Pty Limited (In liquidation)
B Company Pty Limited (In liquidation)
Andrew Wily, Armstrong Wily, Chartered Accountants.
The parties and any other person affected by these orders are at liberty to apply on 7 days notice in respect of the orders.
IT IS NOTED that publication of this judgment under the pseudonym Weller & Weller is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 3708 of 2005
| MS WELLER |
Applicant
And
| MR WELLER |
Respondent
REASONS FOR JUDGMENT
After a marriage of more than 32 years the parties cannot agree on a settlement of their property.
Applications
The wife seeks orders in terms of a minute of orders attached to her case outline documents, as amended in final submissions, as follows:
That pursuant to s. 106B of the Act a Deed of charge between the husband and Sagacious Legal dated 3 May 2007 be set aside, insofar as it affects the interests of the husband and wife.
That the husband forthwith transfer and assign to the wife the whole of his right title and interest in the net proceeds of sale and all interest accrued thereon of the former matrimonial home at [W] (“the monies”) held by the Registrar of the Supreme Court of New South Wales in proceedings number […] of 2004.
That upon the undertaking of the wife given through her counsel to properly consider all legal advice and to indemnify the husband against any future costs orders, Order that the wife forthwith take over the conduct of and Defend proceedings No […] of 2005 and proceedings No […] of 2004 in the Supreme Court of New South Wales between [C Company] (NSW) Pty Limited (A.C.N. […]) (“[C Company]”) as Plaintiff and the parties as Defendants.
3 a)That in the event that the dispute with [C Company] is capable of resolution without trial the wife shall in any such settlement obtain a release from [C Company] in favour of the husband and his corporate entities in respect of the whole of his indebtedness to [C Company].
3 b)That in the event that the dispute with [C Company] is incapable of resolution or compromise without trial the wife shall do all acts and things necessary in the said Supreme Court proceedings to bring the proceedings to conclusion at the earliest possible time.
That the husband do all acts and things and execute all documents as are necessary from time to time at the request of the wife in respect of the future conduct of the proceedings referred to in order 3.
That the husband authorise and direct the Executor, [Mr G Weller, the husband’s brother] to pay to the wife within 7 days of the date of these orders the sum of $100,000.00 from the husband’s interest in the Estate of the Late [Mrs Weller, the husband’s mother].
Declare that the husband is solely entitled to the exclusion of the wife to the remainder of his legacy from his said late mother’s Estate.
Declare that otherwise each party is the sole and beneficial owner of all other items of property in their respective possession custody or control including but not limited to superannuation entitlements.
That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar or a Deputy Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.
That the parties have liberty to apply on 7 days notice in respect of the implementation of these orders.
That the husband pay the wife’s costs of and incidental to the proceedings.
By a minute of orders emailed to my chambers by the husband in advance of the hearing the husband consented to orders 1, 3, 4, 6, 7, 8 & 9 of the wife’s orders sought. That indication was given prior to the amendment of the wife’s minute to include the wording at 3 a) and b) above. Further, in the course of submissions it appeared that the husband does not fully agree with the terms of order 3. I understand that the new 3 a) and b) are intended on behalf of the wife to address his concerns. The husband will seek some advice in relation to the extent of his protection in relation to those proceedings, both in the event of settlement or judicial determination. As to the disputed orders, he seeks that he and his companies be fully released in relation to the C Company litigation and he seeks:
That the court declare in what proportions the Supreme Court fund is the husband’s property and the wife’s property. The husband seeks 50%.
The $50,000 received from the husband’s mother’s estate be declared the property of the wife.
The Hearing
The hearing had more of the flavour of a financial enquiry than a final property settlement hearing. The parties had been litigating in this Court since 2005. An earlier final hearing in May 2007 had been abandoned. Before me the wife was not in a position to present complete evidence about the parties’ current and past financial circumstances because she does not have the necessary information, nor the funds to acquire it, let alone to have the information digested and put into proper form. For his part, the husband failed to make a complete disclosure of his financial affairs. That has had a disastrous impact on this case because the husband’s affairs are very complicated. Over the years the husband has used various corporate entities, sometimes single purpose corporate entities. Some are active, some are inactive and several are or have been involved in litigation. There are no relevant recent financial records available for the entities. For example, there are no recent tax returns for the husband or the entities. I have not been provided with any recent annual accounts, profit and loss statements or balance sheets for any of the companies. The husband may be insolvent or may at least owe substantial sums and most of his creditors have not been put on notice of the orders sought or the hearing date.
Although he has had a sequence of solicitors and has had advice and assistance from a solicitor in drawing his current Financial Statement, the husband appeared in person and conducted his own case. The husband relied on two affidavits that appeared to have been drawn to address specific issues or interlocutory proceedings, rather than the breadth of matters referred to in section 79. The affidavits were sworn on 3 May 2007 and 7 May 2007. The husband did not seek to challenge the wife’s evidence at all. He neither objected to it, nor, even after I warned him of the consequences, did he seek to cross-examine her.
In the circumstances, the requirement to identify a just and equitable settlement of property is practically unachievable.
I indicated to the parties during the hearing that whether determined by me or by belated agreement between the parties, because of my obligations to creditors, I would stay any orders for a period and give creditors and their representatives an opportunity to apply. For that purpose I had the husband draw up a list of his creditors. They are:
Diners Club
ANZ Bank
Citibank
St George Bank
American Express (3 accounts)
G.E. Automotive
Sanderson Motors
Alliance Factoring
Reed Group
Credit Corp Services
David Ballard
Carlisle Attorneys
Clayton Utz Solicitors
C Company Holdings Pty Limited (In liquidation)
B Company Pty Limited (In liquidation)
The husband says that the liquidator for the last named companies is Andrew Wily of Armstrong Wily, Chartered Accountants.
Issues for determination
The issues for determination are:
The assets and liabilities of the parties and their value;
Whether the husband has made a proper disclosure of his financial circumstances;
Short History
The wife and husband are 57 and 60 years of age respectively. They commenced cohabitation in late 1971, were married in April 1972 and separated under one roof in August 2004.
Children
The parties have three adult children:
E who was 25 years of age as at the date of the hearing; and
M and
L who were 22 years of age as at the date of the hearing.
Sadly, the parties lost S, who was born on the same day as M and L, soon after her birth.
Background facts
The parties started to live together in late 1971. They purchased the R property for $14,000. The wife paid $1,000 and the husband paid $400 for the 10% deposit. The balance was borrowed.
They were married in April 1972.
In 1977 the parties bought land at A for $20,000.
In early 1979 the parties purchased the P property for $214,000.
In 1980 the parties purchased two blocks of land at C for $90,000.
In 1982 the parties sold the R property for $216,000 and the C land for $130,000.
In 1982 the parties sold the A land for about $45,000.
In mid 1982 the parties bought the T property for $215,000.
The child E was born in August 1982.
In 1984 the P property was sold for about $1.1M. and the T property for $950,000.
The children M, L and S were born in March 1985. The child S died the day after birth.
In late 1987 the W property was purchased for $750,000.
In April 2000 the husband purchased a unit at F for $850,000. In 2001 the unit was sold for $1,800,000.
In 2001 the husband’s company, A Pty Limited bought a unit at H. In late 2001 the husband purchased a unit at H2. At some point that property was transferred to the husband’s brother, Mr G Weller. In November 2001 the husband bought an office floor in Sydney for $1.9M. It has since been sold by the mortgagee.
For a short period in about 2001 or 2002 the W property was unencumbered. In June 2002 $1,600,000 was borrowed on the security of the property, from Banksia Mortgages, for the purposes of operating expenses for the husband’s companies. On 12 August 2003, the husband’s company, G Company Pty Limited borrowed $1,267,500 from C Company (NSW) Pty Limited. The loan was guaranteed by D Pty Limited, L Company Pty Limited, T Company Pty Limited and the husband. Again those funds were used for the purposes of the husband’s companies. Interest was payable at the rate of 5% per month. There were two monthly payments of $63,375 and a total of $420,468.56 paid off the principal but by August 2005 the debt stood at $2,330,532.32. The debt finally resulted in a claim for over $11M. At some point the debt may have been assigned by C Company (NSW) Pty Limited to C Company Holdings Pty Limited.
The parties separated under one roof in August 2004.
In 2004 the property at W was sold for $2,450,000. The parties exchanged contracts with the purchaser but Banksia Mortgages entered under a power of sale and settled the conveyance. On or about 17 September 2004 Banksia Mortgages paid $668,000, being the balance of the net proceeds of sale of the W property into the Supreme Court of NSW.
In April 2005 C Company (NSW) Pty Limited issued a summons out of the NSW Supreme Court against the parties seeking that the entirety of the funds be paid out of Court and to it and as a result, the moneys held in the Supreme Court together with interest accrued, have remained there to abide the outcome of the C Company litigation.
The physical separation of the parties occurred in late 2004 or January 2005.
These proceedings were commenced by the wife on 11 August 2005.
On 8 May 2007 an order was made for interim costs.
Credit and Submissions
The evidence of the witnesses
The only witness called for cross-examination was the husband. He has a good recollection of events. On some occasions he answered before he had fully thought his answer through but on most occasions he was careful to ensure that he understood the question and expressed his answers in precise terms. The husband’s written evidence is patchy. He gives little or no evidence about the matters referred to in section 79(4) and there are inconsistencies in his testimony. For example, in his affidavit sworn 3 May 2007 the husband deposes to paying his brother $700 per week in rent for the H2 apartment. His latest Financial Statement says that he pays $600 per week by way of rent to his brother. Later in the same Statement he says “I pay rent to my brother by deduction from my interest in my mother’s estate at $400.00 per week.” It is the husband’s case that neither he nor his brother believes he has any interest in his mother’s estate. When I pointed out the inconsistencies in his Financial Statement to him, the husband said that the figure of $400 was a typographical error and that what he meant to say was to the effect that he understood that his brother was recording a debt owed by the husband to him for rent, at the rate of $600 per week. The husband was at least, careless in his written evidence.
Submissions
The written submissions on behalf of the wife are as follows:
FINANCIAL POSITION
Asset Husband Wife Agreed1. Proceeds of sale of
the [W Property] E750,000 E750,000 Yes*2. [D] Pty Limited NK No
3. [T Company] Pty Limited NK No
4. [L Company] Pty Limited NK No
5. [A] Pty Limited NK No**
6. [G Company] Pty Limited NK No
7. [Z] Pty Limited NK No
8. [N] Pty Limited NK No
9. [J] Pty Limited NK No
10. Husband’s interest in Unit [at H2] NK No
11. [M Company] litigation relating
to [M-B Company], Mr [MS] and husband NK No12. Husband’s interest in the
Telstra towers located
at [H property] NK No13. Husband’s interest in
late mother’s estate
[Mrs Weller] (deceased) 250,000 250,000***14. Wife’s AMP super 3,800
Liabilities
15. Claim against net proceeds
of sale of home NK No16. Husband’s liabilities NK NK No
* subject to a claim by [C Company] Pty Ltd – there is an unknown amount of additional income/interest which attract income tax.
** this company owns a city car parking space at [H] and the company receives rental income pursuant to a lease to Telstra. A calculation of the future earnings will be tendered at hearing.
*** The wife received $51,000 by way of an interim costs order.CONTRIBUTION BASED ENTITLEMENTS
·The wife made direct financial contributions to the purchase of property, initially from her savings and later via capital gains from trading properties (paragraphs 31 to 40 of her affidavit);
·The wife made direct financial contributions from her wages (paragraphs 6-19 of her affidavit);
·The wife made the vast majority of the homemaker contributions (paragraphs 73 to 76);
·The wife was the primary care giver to the children of the marriage (paragraphs 47 to 72);.
SECTION 75(2) FACTORS
a.The wife is 57 years of age. The husband is 60.
b.The wife health is reasonable. She has little property and has working capacity as a personal assistant.
c.Not applicable;
d.The wife’s commitments are set out in her financial statement;
e.Not applicable;
i)f. (i) Not applicable;
ii)(ii) The wife has minimum in superannuation;
g. The parties enjoyed a high standard of living;
h.Not applicable;
iv)ha. Not applicable;
v)j. Not applicable;
vi)k. The marriage lasted 33 years.
l. Not applicable;
m. Not applicable
n. Not applicable.
na. Not applicable.
o. The parties had a high standard of living and had unencumbered properties until the husband decided to venture in to property development in the 2000’s. The wife claims that the husband has not made full and frank disclosure.
p. Not applicable.
The oral submissions by learned counsel for the wife were to the following effect:
The orders sought are largely agreed;
In terms of the four step process of determining property cases, it is impossible in this case to identify the pool of assets;
The known assets are the fund holding the net proceeds of the W property which abides the outcome of the C Company litigation and the husband’s interest in his mother’s estate;
There may be other assets in the form of the various corporations and in the various pieces of litigation in which they are engaged;
Where it is not possible to define the pool of assets due to non-disclosure, the authorities say the Court need not be overly concerned about the percentage division;
The husband has said that he wanted the net proceeds of the W property to go to the wife.
There were no written submissions on behalf of the husband. His submissions at the conclusion of the hearing were to the following effect:
This was a long marriage and it would be proper at the end of the day for an equal division of assets;
His wife made a valuable contribution and he makes no criticism of her;
The parties commenced from modest backgrounds and the family enjoyed an increasing standard of living with regular overseas travel and private schooling for the children;
The husband rose through the ranks with M Company to become a director. The parties engaged in investing in and improving property. The husband’s evidence would be that all came crashing down with an unsuccessful venture;
Although 50:50 would be equitable the husband has previously suggested and could understand an order being made, whereby the wife retained the balance of the funds held in the Supreme Court, being the net proceeds of the W property. The husband’s main concern is that he and his corporate entities are all fully released from the C Company debt;
Although there is no evidence about it, the husband says that he agrees with his brother that he (the husband) has no further entitlement to their mother’s estate;
In any event, he submits that the wife made no contribution to that estate and should not further benefit from it;
The husband points to the fact that although the children are adults, M lives with him, is currently unemployed and is supported by him. The husband’s evidence would be that he has not permitted M to access unemployment benefits because he (the husband) thinks that would be immoral;
Many of the propositions contained in the husband’s submissions have not found expression in the evidence before me.
Applications under Section 106B
Relevantly the section provides:
Section 106B
(1)In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
…..
(2)The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must be paid into court to abide its order.
(3)The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
The husband and companies associated with him (G Company Pty Limited, A Pty Limited, L Company Pty Limited and S Pty Limited) entered into a deed on 3 May 2007 with Sagacious Legal (former solicitors for the husband and the companies) to secure legal fees and to address a lien that would otherwise have prevented access by the husband to documents held by the solicitors.
The wife seeks that the deed be set aside. The husband consents to the order.
There remains an issue of natural justice. Has Sagacious Legal had proper notice of the application and an opportunity to be heard? It had not but at the commencement of the hearing, the husband’s solicitor, Mary-Clare Kennedy, gave evidence that she had telephoned Mr Paul O’Shanassy of Sagacious Legal some minutes earlier and had told him that her client was moving the Court for an order to set aside the deed. Mr O’Shanassy told Ms Kennedy that Sagacious Legal did not want to be heard in relation to the application.
By its terms the deed evidences a claim for costs of $61,819.56 and an acknowledgement by the husband and the companies, subject to their right to formally challenge the quantum, that the costs are owed to the solicitors. It purports to secure the costs against funds of the husband that pass through the hands of his subsequent solicitor – Carlisle Attorneys Pty Limited.
There is no suggestion that the deed was entered into by any of the parties with the intention of defeating the wife’s claim but there is no doubt that it could have that effect. The wife’s claim is for all of the parties’ entitlement to the fund representing the net proceeds of sale of the W property and for $100,000 from the husband’s undistributed interest in his mother’s estate. Depending on the net value of the main asset of the estate, a property at V, there may not be $61,819.56 left to the husband’s credit, if orders were made as sought by the wife. On that basis and given that the order is agreed between the parties and not opposed by Sagacious Legal, I will make it.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. As I say, the Full Court has supported such an approach.
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties at the date of the hearing. That involves identifying assets and liabilities and financial resources and their values. It is impossible to do that in this case with any confidence.
Financial disclosure is of critical importance to the effectiveness of the exercise of discretion under section 79. See In the Marriage of Black & Kellner (1992) 15 Fam LR 343; (1992) FLC 92-287; In the Marriage of Weir (1992) 16 Fam LR 154; (1993) FLC 92-338 and In the Marriage of Kannis (2002) 30 Fam LR 83; (2003) FLC 93-135; [2002] FamCA 1150.
Each of the parties is obliged to make a complete disclosure of their financial circumstances. In relation to the property development ventures, all of the husband’s corporate entities and key relevant events since separation in August 2004, it falls to the husband to provide that disclosure. As between the parties, they were matters uniquely within his knowledge and control.
The background facts evidence a significant reversal of the parties’ fortunes over recent years. At one point the parties were prosperous. Today the wife has been obliged to return to full-time paid work and has no significant financial resources. Although in the last two weeks the husband has acquired paid employment, he has largely been out of work, is living in rented premises and is pursued by creditors. At least two of his companies are in liquidation and in addition to these proceedings, he and companies associated with him are or have been engaged in various legal proceedings. The husband credits the physical security arrangements at his current premises for the fact that there are not further proceedings against him, including bankruptcy proceedings. I gather that process servers have difficulty in breaching the security of the H accommodation. Supporting that conclusion is the fact that an order for substituted service on the husband was granted in the C Company litigation in the Supreme Court of NSW.
The husband has made no real effort to provide an explanation for his failure to provide proper disclosure. It is not for me to do that for him.
The husband’s evidence is that he provided lists of documents and of categories of documents that were available for inspection by the wife’s lawyers. He does not say when he did that but given that the lists are attached to an affidavit of May 2007 I can infer that it was in or before May 2007. It does not constitute complete disclosure for the husband, as he has done here, to metaphorically point to the location of hundreds of documents and invite the wife to do the rest.
The husband says that he had insufficient funds to pursue certain litigation and it is his evidence that he had insufficient funds to pay out previous lawyers, so as to access records or meet the cost of photocopying other records. His affidavit evidence was sworn in May 2007 and invites the question - what has he done since?
No mention was made of the husband’s health in his submissions but it is his unchallenged evidence that he suffered from depression. The husband’s company G Pty Limited relied on a report from a Professor D in relation to the husband, in proceedings in which it was a defendant and cross-claimant in the Equity Division of the Supreme Court of New South Wales. Professor D is Professor of Medical Psychology. He first saw the husband in October 2006. Professor D was told a number of things that could and if true, should, have been given in evidence by the husband before me. To paraphrase the report, in October 2006 Professor D was told among other things:
·The husband is suffering major life stresses including recent divorce, theft of $1.5 million by his closest friend, recent death of his mother, and caring for his 21 yo disabled son;
·He reports episodes of crying, anhedonia (the loss of the capacity to experience pleasure), appetite disturbance, recent weight loss and middle insomnia. He has discussed suicidal thoughts but these are not clearly formed and he expressed a moral aversion to taking his own life;
·The husband is a retired accountant who held a senior, and stressful, executive position in a large corporation. He reports a history of hypertension, obesity, gout, and polycythemia (over-production of red blood cells). He was diagnosed with endogenous depression in 1999, treated with Efexor. The Efexor had major side effects on concentration and memory and he is loathing taking it up again.
Professor D said that the husband presented as clearly depressed and he referred him to a Psychiatrist for a review of medication. He thought that the husband was functioning well below his normal capacity, that he was sleep deprived, anxious, disoriented and experiencing significant cognitive impairment. He did not believe that the husband would be capable of sustained concentration, able to instruct attorneys, to provide coherent evidence or be effectively cross-examined. In his brief report dated 19 October 2006, Professor D opined that the husband’s acute crisis would resolve with medication and counselling over the following 2 months.
The problem here is that the report from Professor D is dated October 2006. The only affidavits relied on by the husband, one of which attached the report, were sworn in May 2007. There is no current medical evidence – not even the outcome of the consultation with Professor D scheduled for 28 May 2007 that was referred to in his affidavit sworn on 3 May 2007. If the husband wants to make a case that justifies or seeks to explain his failure to make a proper disclosure by reference to his health, then evidence is required about the state of his health up to the present day and not 13 months ago.
The circumstances of this case and in particular the evidence that his health may have been compromised for a period since the commencement of the proceedings, raise the question of whether the husband’s non-disclosure was a matter of volition or not. In my view the husband has not established that he did all he could to meet his obligation. It may be however, that the circumstances of the non-disclosure are not particularly relevant. In discussion in the unreported component of the reasons for decision of Kannis and Kannis (above), the Full Court said:
…
50. Mr Ackman submitted that the cases discussed above were authority for the proposition that where there was a finding of deliberate non-disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it. We do not see that the principle should be so confined.
51. Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.
….
As to particular assets, there is some information, albeit largely given by the husband in cross-examination rather than from primary sources:
Husband’s interest in his mother’s estate
The husband’s mother died in September 2006. The husband’s brother, Mr G Weller is the executor and has obtained probate of the estate. The will provides that the husband, his brother Mr G Weller, and his sister each take one third of the remaining assets of the estate, being a property at V valued at about $800,000 and nearly $7,000 in savings.
The husband would have it that he and his brother are estranged but that they share a belief that the husband has no further interest in the estate. The husband says that he brother came to that view on 17 December 2006. There is no probative evidence of that fact. Even if there was evidence of the executor holding that view, that is not a relevant fact. Nor is it consistent with the way in which the executor and the husband have behaved. Funds have been paid out to the husband from the estate. The husband deposes to his brother having agreed to advance him $250,000 for the costs of litigation and that approximately $50,000 was advanced under that agreement. On 8 May 2007 interim costs orders were made in the following terms:
2.Leave to the parties to notify the Registrar that that date is not required not later than 24 hours prior to the adjourned date in the event that they have agreed on directions for trial and presented those to a Registrar in Chambers.
3.Until further order unless the parties agree to the contrary in writing the husband forthwith authorise and direct [the husband’s brother] to pay from the fund representing the husband’s interest in the estate of the late [Mrs Weller, the husband’s mother]:
a.to the solicitor for the wife the sum of $51,000 to be applied for the purposes of the wife’s costs of and incidental to these proceedings;
b.to the solicitor for the husband the sum of $25,000 to be applied:
(i)to the debt of $6,053.67 of [G] Pty Ltd associated with proceedings in the Supreme Court;
(ii)as to $15,000 to the costs and disbursements of the husband of and incidental to these proceedings; and
(iii)as to balance of that sum of $25,000 to be evenly divided and applied to the costs of and incidental to the proceedings involving [G] Pty Ltd and the proceedings involving [A] Pty Ltd.
4.Leave is granted to restore the matter to the list on 7 days’ notice to the Court and to the other party in relation to any further distribution of the funds.
5.The husband is restrained from authorising or directing [the husband’s brother] other than in accordance with these orders.
I understand that those orders were complied with insofar as the husband’s brother advanced the required funds. Thus approximately $126,000 has already been advanced from the husband’s interest in the estate. How could that be if he has no such interest?
There is no evidence of any challenge to the will. There is no evidence that the administration of the estate has been finalised. In a letter from his solicitors of 22 January 2007[2] the husband’s brother was advised, among other things, that the only outstanding matter, in order to finalise the estate, was the sale of the V property and the final distribution of proceeds. Thus the husband has an undivided one third interest in the assets represented by the V property and some modest savings, subject to the costs of the administration, including the costs of realising the assets.
[2] Exhibit 6
The husband has not called any more detailed evidence about the value of his interest. There is mention of a figure of $250,000 in the wife’s case and that would seem to be a reasonable estimate. It may be no coincidence that the sum that the husband’s brother agreed in March 2007 to advance the husband was also $250,000. From that sum $126,000 has already been drawn down. In addition, it is the husband’s evidence that his brother is totting up a bill for the husband’s rent at the rate of $600 per week. There is no evidence as to how long the rent has been calculated. The husband sold the property at H2 to his brother on 21 December 2006 for $650,000. The sale was necessary in order to satisfy the mortgagee, Westpac Bank. The husband and M live there now and they may well have been there since the sale.
Doing the best I can, the effective balance of the husband’s interest in the estate may be in the range $100,000 to $124,000.
Husband’s interest in Telstra panels at the H property
As I understand it, the position is as follows. A Pty Limited owns a car park in the H block in which the husband resides. There is a lease between Telstra and the Strata Plan whereby Telstra is permitted to fix a microwave panel to the outside of the building. Under the lease the lessor receives half of the premium and the other half is paid to the owner of Lot …, A Pty Limited. The current lease runs from 1 February 2003 to 31 January 2008. There are three options for 5 year extensions. To date Telstra has given no notice of an intention to exercise the first option. The premium paid by Telstra was $30,000 in 2003 and under the agreement, it was to increase by 5% each year. The rent is now at about $40,000 per annum. Telstra paid about $50,000 in January 2007 being the rent to 31 January 2008 plus some arrears. Those funds were applied to debts of the husband and or the companies. If Telstra takes up the first option then $20,000 (half the premium) will be paid to A Pty Limited.
That does not mean that the husband will receive the money. A Pty Limited is now in liquidation. There is the Clayton Utz debt, $3,754,938 owed to Armstrong Wily as the liquidator of B Company Pty Limited (in liquidation) and debts to four other creditors. If there is an asset in the form of the right to obtain money for the use of the external wall of the H property by Telstra then it is an asset of A Pty Limited (in liquidation). The only possible asset for the husband would arise if there is a distribution to him in the administration of that company. That does not seem likely.
Husband’s interest in the M Company litigation
During cross-examination the husband explained the M Company litigation in the following terms:
[THE HUSBAND]: The [A Pty Ltd] was the landowner in the development at [H]. [B Company] was previously called [M-B Company] Pty Ltd. It was a single purpose subsidiary of [M Company] whose role was to develop the land on behalf of the [A] company. [M Company] was the builder for [M-B Company]. The [A] company surrendered all its rights to [M-B Company] as the developer for the project. At the completion of the project the [A] company believed that [M-B Company] had abused its position in the structure and had charged things, had charged amounts to the development project that were not properly contributable to that project. And the [A] company seeks recovery of those amounts.
There is reference in correspondence[3] from the liquidator of B Company Pty Limited (In liquidation) to that company having invoiced A Pty Limited approximately $42,995,700 in respect of the B Company development and as at 20 April 2002, having received only $40,705,605 from sales. That left a shortfall of $2,290,095.
[3] Exhibit 1
The husband asserts that A Pty Limited was treated unfairly in the final counting in relation to the H development. The husband believes that M Company underpaid his company $600,000. The husband invited the current liquidator to pursue the $600,000 and the husband says that the liquidator thought that proposition to be hilarious. In cross-examination the husband was asked if he believed that there were prospects of such a claim being successful and he said “No”. He went on to say that he is very angry about the issue. I understood him to mean that if he had the option, he would pursue the claim for reasons other than any reasonable expectation of success.
It is the husband’s evidence that the litigation between M Company and B Company Pty Limited (In liquidation) was settled in October 2007 and therefore he is barred from pursuing a personal claim[4] for $3.1M in relation to a loan he made to A Pty Limited. If the litigation is concluded then there is no asset or contingent asset.
Litigation on behalf of G Company Pty Limited
[4] Exhibit 13
One of the stated purposes for the application of funds released from the husband’s interest in his mother’s estate pursuant to the order made on 8 May 2007 was to apply about $4,000 to the costs of the litigation involving G Company Pty Limited. The proceedings were instituted by the company against the purchasers of a property at Y. It is the husband’s evidence that the proceedings were withdrawn by the company at the invitation of Young J, Chief Judge of the Equity Division of the NSW Supreme Court. The husband said that the proceedings could be re-commenced. As at the date of the hearing the litigation is concluded and there is no asset or contingent asset.
Paid legal fees
The wife has paid $51,000 in legal fees from the funds advanced from the husband’s mother’s estate. Those funds will be read back into the list of assets on the basis that the pool would have been greater but for that payment. See the discussion of In the Marriage of DJM & JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 and other authorities in In the Marriage of Omacini (2005) 33 Fam LR 134.
The husband was earlier advanced $50,000 for the purposes of legal fees in relation to other litigation. By the orders of 8 May 2007, among other moneys, the husband was advanced $15,000 for the purposes of legal fees in these proceedings. That sum too will be read back into the list of assets.
The assets are:
Assets Value Proceeds of sale of the W property (Joint) $750,000 D Pty Limited Not known T Company Pty Limited Not known L Company Pty Limited Not known A Pty Limited (in liquidation) Not known G Company Pty Limited Not known Z Pty Limited Not known N Pty Limited Not known J Pty Limited Not known The husband’s interest in the H2 property Nil M Company litigation relating to M-B Company, Mr MS and husband Nil Husband’s interest in Telstra panels at the H property Nil Husband’s interest in the estate of the husband’s mother (deceased) – estimated $124,000 Wife’s AMP superannuation $3,800 Legal fees paid by the wife $51,000 Legal fees paid by the husband $15,000 Total $943,800.00
During cross-examination the husband accepted the proposition that as at 29 October 2007 the 200 shares in A Pty Limited were held equally by L Company Pty Limited (above) and A Pty Limited. There is no evidence about the ownership of the latter company.
Liabilities:
As to the liabilities:
Debt to C Company
I have referred earlier in these reasons to litigation in the NSW Supreme Court instituted by C Company (NSW) Pty Limited against the parties for the balance of the proceeds of the W property. That company or its assignee is said to have a claim of in excess of $11M against the husband and some of his companies. That claim resulting from the compounding effect of interest payable under the deed, on the debt that stood at $2,330,532.32 in August 2005. There have been settlement discussions with C Company (NSW) Pty Limited. The husband says that in March 2007 a director of that company agreed to accept a payment of $300,000 in 12 months (March 2008) to settle the proceedings brought against the parties. It is not clear whether that agreement would have resulted in the husband and his companies being released in relation to all claims arising under the deed. I gather that there were subsequent negotiations and therefore assume that the compromise settled in March 2007 is no longer available. Nevertheless the best evidence I have is that the parties’ debt is $300,000.
Debt to Clayton Utz
The husband owes Clayton Utz solicitors something of the order of $21,000. The debt has been recorded in a judgment and a Bankruptcy Notice[5] issued on a date that does not appear in the evidence. The husband says he compromised the debt by agreeing to pay instalments of $1,500 on a monthly basis. He paid two instalments. He missed the instalment due on 7 November 2007 and understands that at a result, the entire debt again falls due. Thus the husband owes Clayton Utz about $21,000.
[5] Exhibit 8
The liabilities are:
Liabilities Amount C Company debt $300,000 Clayton Utz debt $21,000 Husband’s other liabilities Not known $321,000
Net assets
Doing the best I can in what is a very artificial exercise, the net assets have a value of $622,800 ($943,800 - $321,000).
Financial Resources
There is no evidence that either of the parties has any financial resources.
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[6]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[7].
[6] Mallett & Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[7] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should apply the considerations in sectio 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
The husband’s mother’s estate
The husband’s mother died after separation. There is no evidence of any contributions by either of the parties to the estate. The husband argues for the estate to be treated differently from other assets. That argument can be accommodated without dealing with contributions asset by asset.
A separate pool for superannuation
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
The case was argued on the basis of there being one pool of assets, combining superannuation and non-superannuation. In accordance with the counsel of the Full Court, on that basis, I too will apply the section 79(4) considerations to a combined pool of superannuation and non-superannuation assets.
Contributions
Section 79(4)(a) Contributions
Financial contributions, both direct and indirect were made by each of the parties.
The parties had modest savings at the commencement of the marriage.
The wife was in paid employment in various positions from the start of the marriage until 1982. She was an Office Manager, Shop Manager Personal Assistant and Bookkeeper. Apart from sub-contracting work in 1984 and one month as a sales person in 1999, the wife next returned to the paid workforce as a Data Entry Operator from 2002 to 2004 in various part-time positions. She supplemented that income in 2004 with work 5 hours a week as a Shop Assistant and ironing and baby sitting. In 2005 the wife took a position as Financial Manager. In 2006 she worked as Office Manager and Accounts Assistant but apart from 2 weeks of temporary work in October, she was out of paid work from 1 September 2006 until 12 November 2006. Since 13 November 2006 the wife has been employed as a Personal Assistant.
The husband generally worked as an Accountant from the start of the marriage. From 1981 to 2000 the husband worked for M Company in Sydney, rising from Accountant to Financial Controller. The wife thinks that over this period the husband salary rose from about $35,000 per annum to about $375,000 per annum. From 2000 to 2004 the husband was self-employed as a property developer.
Section 79(4)(b) contributions
Over the years the parties bought, improved and sold properties and in the later years, engaged in property development. The husband played the key financial role. Although the parties apparently worked on various ventures over the years, sadly the net effect has been a massive loss.
Albeit unchallenged, there is a bald assertion contained in the wife’s affidavit to the effect that the husband engaged in gambling. There is no probative evidence of the duration or extent of his gambling nor, more importantly, is there any indication of a loss, let alone the extent of any loss, incurred as a result. Therefore the evidence has no weight.
Section 79(4)(c) contributions
The only evidence about contributions comes from the wife. The husband occasionally mowed the lawns and did a little landscaping. From May 1984 the husband spent a little more time with E and on the weekends did jobs around the house, including gardening. With assistance from friends, his mother, his sister and the wife’s parents the husband cared for E during the wife’s confinement from January to March 1985. The husband played no part in feeding or changing the twins. By June 1986 although he did not help with a family move, the husband spent a little more time with the children, mainly playing with them. From 1972 to 1982 the husband did the cooking. From 2003 to 2005 the husband cooked and shopped about twice a week. Otherwise as between the husband and the wife, the wife undertook the remaining parent and homemaker roles.
In relation to the parenting and homemaker task, that largely fell to the wife. For much of the marriage she had one or more minor child to care for. She cannot have had an easy time of it when she was hospitalised on weekdays in the months leading up to the birth of triplets in March 1985. There was the tragic loss of S and then twins to care for. In 1988 M suffered a major head injury and was hospitalised for 2 months. He needed full time physiotherapy and occupational therapy for the next year; by 1989 he still needed constant monitoring in relation to a leg brace and exercises; he repeated Year 5 at school as a result of his head injuries; and in 2002 he had an orthopaedic operation on his left foot and physiotherapy thereafter.
Conclusion
This was a long marriage during which very significant assets were developed, three children were supported and the parties enjoyed a good standard of living. There were no contributions made to the husband’s mother’s estate. The only evidence about contribution was given by the wife. Her contributions generally exceeded those made by the husband. In the circumstances of this case it is not possible or necessary to identify the imbalance in contributions by reference to percentage figures. However, the husband’s mother died after separation. The husband’s interest in the estate should be seen as a contribution made wholly on his behalf.
The other matters in Section 79
Once contributions have been assessed, the other factors in section 79(4) need to be considered.
Dealing with the matters identified in the legislation:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties..
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (b), (c), (k) and (na).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The wife is 57 years of age and the husband is 60. There is the evidence referred to above about the husband’s health. The wife says she is in reasonable health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife’s income is $985 per week made up as follows:
Source Amount Salary $960 Baby sitting $25 $985.00
The wife lives alone.
The wife’s fixed expenses are as follows:
Expense Amount Income tax $211.00 Rent $100.00 Private health insurance – HCF $20.00 Motor vehicle registration – Nissan Pulsar … $60.00 Hire purchase payments – to David Jones for a Vacuum cleaner $15.00 Mastercard payments $150.00 Living expenses $420.00 Food $150.00 Household supplies $10.00 Gas $5.00 Electricity $5.00 Heating fuel $20.00 Telephone $15.00 Petrol $35.00 Motor vehicle maintenance $10.00 Fares and parking $10.00 Clothing & shoes $10.00 Medical dental optical $60.00 Entertainment and hobbies $20.00 Chemist pharmaceuticals $10.00 Dry cleaning $5.00 Books and magazines $2.00 Gifts $3.00 Hairdressing toiletries $50.00 sub-total $420.00 Total $976.00
The rent seems very moderate but there was no challenge to it or any other aspect of the wife’s evidence. Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
There is no evidence to suggest that the wife is not exercising her earning capacity.
The husband earns $900 per week made up of his salary as a Consultant. The husband has been engaged to work on a change of zoning for three rural properties. In cross-examination he said that he only recently took the job and that it is for 12 months. There is no written contract at this moment, ‘just a handshake with an honourable man’. In addition to the salary, which has yet to flow through, there is an agreement for a success fee of as much as $250,000. That fee would be paid if there is a successful rezoning of all three properties. If all of the properties are not rezoned there will be a pro rata success fee based on the value of the property or properties in respect of which rezoning is achieved.
The husband lives with the parties’ son, M. M has no income. That is not to say that M is regularly or generally out of work. It is the husband’s evidence[8] that M earned about $300 per week in December 2005 and $540 per week in October 2006. The husband discloses no income tax payment. That may be as a result of the fact that the salary had not yet been received. In his Financial Statement sworn 28 November 2007 puts his expenditure as follows:
[8] Husband’s earlier Financial Statements filed in these proceedings
Expense Amount Rent paid to the husband’s brother $600 All other expenditure $1,000 Total $1,600.00
I have referred to the confusing evidence given in relation to the husband’s rent. The husband told me that he meant to say he understands that his brother is recording a debt owed by the husband to him for the rent of the H2 unit, at the rate of $600 per week. As to his living expenses the husband says that he pays $100 per week to his son, $350 per week by way of instalments on a judgment debt, $300 on food and groceries and $100 on legal fees and miscellaneous. As to the instalments I understand the husband to have said that he failed to make a recent instalment payment on a debt to Clayton Utz and may not attempt to make others because the whole debt now falls due. Noting the missing provision for income tax instalments, he does not otherwise account for the other $150 per week of expenditure. Reference to his assets, liabilities and resources is set out earlier in these reasons.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
The parties have no children under 18.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
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 set out the evidence in relation to the parties’ expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
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;
The wife has a modest superannuation interest. Neither of the parties is in receipt of Centrelink benefits. I gather that the husband is philosophically opposed to the receipt of unemployment benefits – whether for himself or M.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is little evidence in relation to the standard of living of the parties during the marriage. There is reference to regular expenditure on restaurants in accounts provided from 2004. There is reference to the construction of a tennis court at one of their properties. The children attended private schools. The wife asserts that the parties had a good standard of living and in final submissions the husband said something consistent with the parties having regularly travelled overseas in years gone by.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no evidence that either of the parties intends to undertake further study.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is a very significant aspect of the case. With companies in liquidation, extensive litigation and inadequate disclosure it is highly likely that some if not all of the visible assets could be the subject of a claim by creditors. I propose to deal with this issue by requiring notice to be given to known creditors.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The wife gave up paid employment for about 18 years from 1984. She has returned to paid employment since. When she was in paid employment she did not command a level of remuneration comparable to that earned by the husband in the latter years at M Company. Nor does she currently command an income of the order of that which would be received by the husband under his current contract if one or more of the rezoning applications is successful. No doubt the wife has missed out on the benefits of an unbroken history of paid employment. They include the opportunity for promotion or progression, long service and other leave entitlements and the establishment of employer funded superannuation entitlements. The marriage adversely affected her earning capacity.
(l) the need to protect a party who wishes to continue that party's role as a parent;
This is not relevant.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
The husband lives with the parties’ son, M. He has no income and the husband pays him $100 per week. The wife buys meals for M when she and he go out.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
These issues are not relevant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
The considerable uncertainty in relation to the current financial position of the parties is largely the responsibility of the husband. To the extent that the litigation has had a deleterious effect on the pool of assets, the husband’s attitude to litigation is concerning. For example there is his evidence of wishing to pursue a claim in the M Company litigation for a reason other than the likelihood of success. There are many references to “anger” in the husband’s case. He is very angry in relation to the M Company litigation; he says that the liquidator, Mr Wily and the wife are very angry with him. Whatever might be said about that, any losses resulting from imprudent litigation should not be sheeted home to the wife.
(p) the terms of any financial agreement that is binding on the parties.
There was no binding agreement made between the parties.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
This is not relevant.
Conclusion
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
Ø The parties are at a similar time of life;
Ø The husband’s income earning capacity is likely to be greater than that of the wife;
Ø The husband did not fully disclose his financial circumstances and is likely to have wasted assets.
In my view there should be an adjustment to the wife by virtue of the other matters in section 79(4). In the circumstances of this case there is no utility in making the adjustment by reference to a percentage figure. Because I do not know the net financial circumstances of the parties, in my view it would be appropriate for the wife to receive the lion’s share of the visible assets.
Just and Equitable
The wife seeks nearly all of the visible assets - the remaining net proceeds of the W property and a further $100,000 from the husband’s interest in his mother’s estate. That application is made not on the basis that she can make out a case for nearly 100% of the assets on the application of section 79(4) but on the basis that the husband has manifestly failed to make a proper disclosure.
In my view it would be just and equitable within the context of s 79 if the wife retained what she has and the balance, if any, of the funds held in the Supreme Court of NSW from the proceeds of the sale of the W property. She has already benefited from the husband’s mother’s estate. In all the circumstances it is unlikely that the husband will achieve any further benefit from that source, in any event.
Conclusion
The wife has or has had the benefit of:
Assets Value Wife’s AMP superannuation $3,800 Legal fees paid by the wife $51,000 Total $54,800.00
The wife will take over the C Company litigation and will be entitled to retain, as against the husband, any amount of the fund representing the net proceeds of the W property, after C Company is satisfied. That could be as much as $450,000 ($750,000 - $300,000).
That would leave the husband with the benefit of:
Assets Value D Pty Limited Not known T Company Pty Limited Not known L Company Pty Limited Not known A Pty Limited (in liquidation) Not known G Company Pty Limited Not known Z Pty Limited Not known N Pty Limited Not known J Pty Limited Not known Husband’s interest in the estate of the husband’s mother (deceased) – estimated $124,000 Legal fees paid by the husband $15,000 Clayton Utz debt -$21,000 Husband’s other liabilities Not known Total $118,000.00
Conclusion under Section 79
This is a very sad case. The husband has failed in his duty of disclosure. In those circumstances I need not be unduly cautious about the framing of orders in favour of the wife. There may be no net assets of the marriage. In those circumstances the known creditors and their representatives must have an opportunity to be heard. Subject to that, the wife will have the opportunity to retain the greater share of the identified assets.
I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate
Date: 6 December 2007
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Family Law
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Equity & Trusts
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