Yang and Lawson
[2012] FamCA 1025
FAMILY COURT OF AUSTRALIA
| YANG & LAWSON | [2012] FamCA 1025 |
| FAMILY LAW - PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Where both parties made valuable contributions – Where the husband made the greater financial contribution – Where there are no children of the marriage – Adjustment to the wife under section 75(2) – Just and equitable. |
| Family Law Act 1975 (Cth) Sections 74, 75, 79 |
In the Marriage of Omacini (2005) 33 Fam LR 134 ; In the Marriage of Hickey (2003) 30 Fam LR 355; Prince and Prince (1984) FLC 91-501; Biltoft and Biltoft (1995) FLC 92-614; 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; Mallett v 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 Coghlan (2004) 33 Fam LR 414 ; In the Marriage of Clauson (1995) 18 Fam LR 693
| APPLICANT: | Ms Yang |
| RESPONDENT: | Mr Lawson |
| FILE NUMBER: | PAC | 2879 | of | 2011 |
| DATE DELIVERED: | 31 August 2012 |
| PLACE DELIVERED: | Parramatta |
| JUDGMENT OF: | Loughnan J |
| PLACE HEARD: | Parramatta |
| HEARING DATE: | 25 – 28 June & 2 August 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT WIFE: | Mr G. Kenny |
SOLICITOR FOR THE APPLICANT: | Maclarens Lawyers |
| COUNSEL FOR THE RESPONDENT HUSBAND: | Mr G. Gould |
SOLICITOR FOR THE RESPONDENT | Shepherds The Family Law Specialists |
Orders
1.Within 28 days of the date of these orders or within such further time as the parties may agree in writing they shall do all such acts and things and sign all such documents as may be required to transfer to the husband, at his expense, all of the wife’s right, title and interest in the real property situated at and known as D Street, E Town (“the US Property”).
2.Forthwith upon that transfer the husband shall refinance the mortgage secured over the US Property into his sole name and pending that refinance, the husband shall meet and indemnify the wife against, all payments and liability pursuant to the existing mortgage together with all rates, taxes and outgoings of or with respect to the US Property of whatsoever nature and kind.
3.Within 28 days of the date of these orders or within such further time as the parties may agree in writing the wife shall do all such acts and things and sign all such documents as may be required to transfer to the husband her shareholding in the company F Pty Ltd and the husband shall be solely responsible for and indemnify and keep the wife safe with respect to any liability the wife may have relating to that company.
4.Within 28 days of the date of these orders or within such further time as the parties may agree in writing the parties shall do all such acts and things and sign all such documents as may be required to cause the company F Pty Ltd to forgive and release any claim it may have against the wife and the company G Pty Ltd.
5.Within 28 days of the date of these orders or within such further time as the parties may agree in writing the husband shall deliver the wife's lawyers all documents of ownership of the boat and all signed documents necessary to transfer to her ownership, registration and possession of the boat.
6.Forthwith upon the making of these orders the parties shall do all such acts and things and sign all such documents as may be required to cause the balance of the controlled moneys account held with the wife’s solicitor to be paid to the wife.
7.On and from the date of these orders the husband shall be solely responsible for and indemnify and keep the wife safe with respect to any liability the wife may have relating to H Pty Ltd and Ms I and to the extent possible do all things necessary to cause H Pty Ltd to release the wife from any liability she may have to it.
8.As between the parties the wife is declared to be the sole owner of the property situate at and known as B Street, C Town in South Korea and except as otherwise provided herein, she shall retain and is the sole owner of all other property of whatsoever kind or nature presently in her possession or control.
9.Except as otherwise provided herein, the husband is declared to be the sole owner of all other property of whatsoever kind or nature presently in his possession or control.
10.Leave is granted to the parties on notice to the other party and the associate to Justice Loughnan to restore these proceedings before the Court within 21 days of the date of these orders in relation to the wording of the orders.
IT IS NOTED that publication of this judgment under the pseudonym Yang & Lawson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC 2879 of 2012
| Ms Yang |
Applicant
And
| Mr Lawson |
Respondent
REASONS FOR JUDGMENT
Ms Yang and Mr Lawson were married for almost 5 years. They separated in October 2010. Following the breakdown of their marriage they cannot agree about a settlement of their property.
Applications
The wife seeks the following orders:
1. Orders that the assets, liabilities and financial resources of the parties be identified and valued and for the net assets to be divided between the parties equally.
2. Orders to give effect to Order 1 as follows:
2.1 Within 28 days of the date of Order the husband transfer to the wife all his right, title and interest in the property situate at and known as [D Street, E Town] in the United States of America free of any encumbrance.
2.2The wife retain the property situate at and known as [B Street, D Town] in South Korea.
2.3The wife retain and be the sole owner of the contents of the E Town property and all other personalty in her possession.
2.4 The wife transfer to the husband her shareholding in the company [F Pty Ltd] and the husband to be solely responsible for and indemnify and keep the wife safe with respect to any liability the wife may have relating to the company.
2.5 The husband be solely responsible for and indemnify and keep the wife safe with respect to any liability the wife may have relating to [H Pty Ltd] and [Ms I] and to the extent possible do all things necessary to cause [H Pty Ltd] to release the wife from any liability she may have to it.
2.6 Within 28 days of the date of Order the husband pay to the wife such sum as is necessary to achieve the overall equal division of the net assets as found by the Court and such payment to come in the first instance from the controlled monies held by Maclarens Lawyers and in the event of there being any surplus controlled monies they be paid to the husband.
2.7 The wife retain the shareholding in the company [G Pty Ltd] and all its assets and indemnify the husband with respect to any liability he may have relating to the company.
2.8 Within 28 days of the date of Order the parties do all acts and things necessary to cause the company [F Pty Ltd] to forgive and release any claim it may have against the wife and the company [G Pty Ltd].
2.9 Within 28 days of the date of Order the husband deliver the wife's lawyers all documents of ownership of the boat and all signed documents necessary to transfer ownership and registration of the boat to the wife and the wife retain the boat.
2.10 Save as otherwise provided, each of the parties retain all other property of whatsoever kind or nature presently in their respective possession of control.
3 The parties cause payment of [Ms K's] fees for attendance at Court in the sum of $3,542 from the funds held in the controlled money account.
The husband seeks orders in terms of a minute of orders contained in his case outline that was received on 21 June 2012. He seeks:
1. That the Wife be solely entitled to and the Husband waive any claim in respect of the apartment owned by her in … Korea.
2. That the Husband pay to the Wife the sum of $15,000 within 28 days of the making of these Orders.
3. (a) That the Wife take all necessary actions and sign all necessary documents to transfer to the Husband all of her right, title and interest in [F Pty Ltd].
(b) That the Wife be solely entitled and the Husband waive any interest in the business known as [G Pty Ltd] and the company established by her and referred to (without reference to name) in paragraph 81 of her Affidavit sworn 5 June 2012.
4. (a) That the Wife shall do all such acts and things and sign all such documents as may be required to transfer to the Transfer at the expense of the Husband all of her right, title and interest in the real property situated at and known as [D Street, E Town] in the United States of America (“the US Property”).
(b)The US Property shall be transferred subject to all mortgages existing at the time of the making of these Orders and the Husband shall indemnify the Wife against all payments and liability pursuant to the mortgage in respect of the US Property and all rates, taxes and outgoings of or with respect to the US Property of whatsoever nature and kind.
(c) Pursuant to sub-order (a) above the Husband shall do all acts and things to refinance the mortgage secured over the US Property into the Husband’s sole name.
The Hearing
This matter was listed for three days commencing 25 June 2012. On 27 June 2012 the matter was adjourned to 2 August 2012 for submissions. On 2 August 2012 submissions were made and judgment was reserved.
Documents read
The wife relied on the following documents:
Initiating Application filed 28 June 2011;
Financial Statement of the wife filed 7 June 2012; and
Affidavit of the wife filed 7 June 2012.The husband relied on the following documents:
Affidavit of the husband filed 8 June 2012;
Financial Statement of the husband filed 8 June 2012;
Affidavit of Ms I filed 8 June 2012; and
Affidavit of Mr J filed 18 June 2012.
Short history
The wife was in 1971 and is 40 years of age. The husband was born in 1966 and is 45 years of age. The parties commenced cohabiting in January 2005 and married in 2006. They finally separated in October 2010.
Children
There are no children of the marriage.
Background facts
9. The wife was born in South Korea and the husband was born in Australia.
10. In 1963, the husband’s parents commenced a business in Australia, in the form of a partnership. The husband commenced working for that business in 1988.
11. In 1994, the company known as H Pty Ltd was incorporated. The husband received some shares in the company, along with his sister and his parents, with the parents having the majority shareholdings.
12. In 2004, the husband’s father passed away. His entire estate was left to the husband’s mother but the husband’s father’s shares in H Pty Ltd were in fact transferred to the husband. That transfer was reversed in 2009.
13. The parties commenced their relationship in mid 2004.
14. In late 2004, the husband purchased a property at L Street, Suburb M for $1,290,000. The husband also purchased a marina berth in the same complex for $125,000. The husband borrowed $758,613 from H Pty Ltd which was paid toward the purchase price.
15. In January 2005, the parties commenced cohabiting when they moved into the Suburb M property.
16. At the commencement of cohabitation, the wife was working as a manager for and had completed 2 years of a 4 year post graduate degree. The husband was working as the manager of H Pty Ltd.
17. The wife said she had around $120,000 in savings, a motor vehicle with a related debt and personal effects at the commencement of cohabitation.
18. In addition to the Suburb M property, at the commencement of cohabitation, the husband owned a property in Suburb N, Victoria, a 25 per cent shareholding in H Pty Ltd, other shares worth approximately $40,000 and a motor vehicle. The Suburb N property was sold in 2008 for $387,000. Each of the parties also held superannuation interests.
19. In March 2005, the husband purchased a boat for $63,000.
20. On 30 June 2005, H Pty Ltd paid to the husband $350,000 in dividends which was credited against his loan from the company to purchase the Suburb M property.
21. In 2006, the parties were married.
22. In 2007, the wife became General Manager of H Pty Ltd. The husband would have it that she was self appointed to that position. The wife deferred her MBA studies for one year.
23. In 2008 (or 2009), the parties purchased a property in South Korea in the wife’s name for approximately $300,000. The parties borrowed funds from H Pty Ltd for the purchase. The wife said this debt was later paid by a declaration of dividends in the husband’s favour. The wife’s parents have lived in that property since it was purchased.
24. In 2008, the husband sold the property at Suburb N for $387,000 and cleared $381,968 from the sale.
25. In 2009, the parties established a business in the United States known as F Pty Ltd[1] (F Pty Ltd[2]), using funds borrowed from H Pty Ltd and proceeds from the sale of the husband’s shares. The husband and wife own a 1 per cent share in the company, with the balance of the shares held by a company known as O Pty Ltd. O Pty Ltd is a Hong Kong based company which was created by the parties for UK and Korean sales. The husband and wife are the only directors and shareholders of that company.
[1] Limited Liability Company – a structure created under State law in the U.S.A.
[2] F Pty Ltd was a trading name for H Pty Ltd in Australia
26. The parties established a design team as part of the US operation and ultimately the Australian design team employed by H Pty Ltd was dispensed with. Thereafter, all design work for F Pty Ltd Baby & Kids LLC and for H Pty Ltd in Australia was performed by the US team. H Pty Ltd pays F Pty Ltd $25,000 per month for design and related work.
27. In September 2009, the parties purchased a condominium in E Town, US State 1 for $736,245 USD, which then represented about $778,087 AUD. The husband said that the purchase was funded using $300,000 from the sale proceeds of the Suburb N property plus borrowings from H Pty Ltd in the amount of $478,087.
28. On 14 September 2010, the wife resigned from H Pty Ltd. Her access to some company resources was cut but she continued to receive her salary until February 2011.
29. In September 2010, the wife asserts that the husband sold two motor vehicles in Australia and retained the sale proceeds of $84,000.
30. In October 2010, the parties separated when the wife moved out of the condominium in US State 1 and into premises rented by F Pty Ltd.
31. In December 2010, F Pty Ltd opened a retail shop in Suburb P, US State 1.
32. On 28 June 2011, the wife filed an Initiating Application in this Court thereby commencing these proceedings.
33. On 1 August 2011, Johnston J made the following orders:
1. That by consent orders are made in accordance with the hand-written Minute of Orders filed in Court today signed by Justice Johnston and placed with the Court papers as set out hereunder:-
1. The husband shall by 30/08/2011 provide to the wife's solicitors copies of the following documents and records:
1.1 Personal tax returns and Notices of Assessment from the financial year ended 30th June 2006 to date.
1.2 Statements for all personal bank accounts conducted by him from 1/1/05 to date.
1.3 Tax returns and financial statements for the company H Pty Ltd (Australia) P/L (the company) for the financial years ended 30th June 2006 to date.
1.4 All journals and ledgers recording payments made by the company to the husband or on his behalf during the period 30th June 2006 to date.
1.5 All minutes and records of the company relating to changes in shareholdings and directors from 1/1/05 to date.
1.6 All records relating to the sale of the Melbourne property and the application of the sale proceeds.
1.7 All documents and records relating to the sale of the wife's Lexus motor vehicle and application of the sale proceeds.
1.8 All documents and records showing source of funds for establishment of the US business and purchase of the US condominium.
1.9 Financial statements and the husband's member benefit statements for the H Pty Ltd Staff Superannuation Fund for the financial years ended 30th June 2006 to date.
1.10 All documents and records relating to the sale of shares and application of the sale proceeds.
2. That by 30/8/2011 the wife provide to the husband's solicitors copies of the following documents:
2.1 Documents relating to the wife's savings of approximately $120,000.00 referred to in paragraph 10 of her affidavit sworn 27 June 2011.
2.2 Documents relating to the expenditure of the said sum.
2.3 Bank account statements held by her solely or jointly from 30 June 2005 to date.
2.4 Taxation returns of the wife for the financial years ended 30 June 2005 to date.
2.5 Documents relating to any rent received by the wife in relation to the apartment owned by her in Seoul, Korea.
2.6 Statements relating to the wife's interest in any superannuation fund from 30 June 2005 to date.
2.7 Copy of market appraisal to be obtained by the wife as to the value of the said Seoul apartment.
3. Pending further Order the wife manage and have exclusive control over the retail shop conducted by the company F Pty Ltd and the husband manage and have exclusive control of the wholesale operations of the company and to give effect to this order:
3.1 Each of the parties shall cause both of the parties to be an authorised signatory of all accounts conducted by the company.
3.2 Each of the parties shall ensure that both of the parties have full internet access to all records of the company.
3.3 Each of the parties is restrained from doing any act or thing in their capacity as an officer of the company other than in the ordinary course of the companies' business.
2. That orders are made in accordance with the hand-written document titled Minute of Orders marked Exhibit A filed in Court today signed by Justice Johnston and placed with the Court papers as set out hereunder:-
1. Pending further Order, the husband be restrained from receiving and applying the sum of $500,000 from the sale proceeds of the property situate at and known as L Street, Suburb M and the husband cause the sum of $500,000 from the net sale proceeds to be deposited into a controlled money account to be established by his solicitors and the wife's solicitors and held pending further Order of the Court.
2. The wife is granted leave to file an Amended Application seeking further or other orders in relation to occupation of the E Town property and interim financial support.
3. Upon the wife filing an Amended Application, the proceedings be restored to the Judicial Duty List for further consideration on not less than 21 days notice.
4. The Court notes the wife's undertaking as to damages in relation to Order 1.
5. Each parties costs reserved.
34. On 12 December 2011, Collier J made the following interim orders by consent:
1.Orders pending further Order that in the event the husband resolves to close down the wholesale operations of the company F Pty Ltd, the following shall apply:
1.1The husband shall give the wife not less than two weeks notice.
1.2The husband shall resign all positions that he holds in the company and sign all documents necessary to enable the wife to continue to operate the company as a sole director and carry on the business of the retail outlet and the husband to be removed as a signatory to all company accounts.
1.3The husband shall pay all outstanding liabilities of F Pty Ltd relating to the wholesale operation and be entitled to realise all of the assets of the company relating to the wholesale operation.
1.4The husband ensure that the wife is provided with all accounting records and software relating to the retail outlet.
1.5The husband shall ensure that all outstanding invoices are paid with respect to the retail outlet.
2.The husband inform the wife within seven days of any dividends declared or paid by H Pty Ltd.
3.1That the wife shall be entitled to all takings, receipts and income of the retail outlet of [F Pty Ltd] and shall apply such to all expenses and outgoings of the retail outlet of [F Pty Ltd] including but not limited to paying salary and wages, rent and utilities, payment of supplies, telephone
3.2That the wife shall be liable for and shall pay all expenses and outgoings of the retail outlet of [F Pty Ltd] including but not limited to paying salary and wages, rent and utilities, payment of supplies, telephone.
3.3That the husband shall be entitled to all other takings, receipts and income of [F Pty Ltd] (excepting for the retail outlet) and shall apply such to all expenses and outgoings of [F Pty Ltd] (excepting for the retail outlet) including but not limited to paying salary and wages, rent and utilities, payment of supplies, telephone.
3.4That the husband shall be liable for and shall pay all other expenses and outgoings of [F Pty Ltd] (excepting for the retail outlet) including but not limited to paying salary and wages, rent and utilities, payment of supplies, telephone.
35. By consenting to the orders of August and December 2011 the apparent intention of the parties was to allow the wife to go forward with the retail arm of F Pty Ltd as a separate enterprise operating out of the existing premises at Suburb J and for the husband to retain the wholesale and design business.
36. On 1 March 2012 the husband wrote[3] to a US supplier advising that he planned to open a new retail store under the auspices of F Pty Ltd, in the same general area as the wife’s store (Suburb J).
[3] Letter to 4Mums dated 1 March 2012 – annexure JY35 to wife’s affidavit.
37. On 1 April 2012, the wife established and commenced operating a new store known as G Pty Ltd. She operates that business from the same Suburb J premises and with the same staff as the original F Pty Ltd retail store. The business continues to sell stock from F Pty Ltd. The wife said that the set up costs were $35,000 and that as at the time of the hearing, the store was covering expenses but that the turn over is not sufficient to pay her a salary or make a profit.
38. In the last few months, the wife has developed a romantic relationship with Mr Q, a US State 1n attorney. Mr Q was known to the parties through their business endeavours in the USA. The wife and Mr Q do not live together and the wife has no plans to marry him.
39. In May 2012 the husband sold artworks to an art dealer friend in Sydney for $15,000. The husband said that he was paid $5,000 in cash and that $10,000 remains outstanding. He accepted his friend’s professional opinion as to the price paid. The $5,000 cash is now represented by some hundred dollars that he has in his back pocket and by cash sitting on his dressing table at his mother’s home.
Credit and Submissions
The evidence of the witnesses
40.The wife gave her evidence directly. Her evidence about the role of the husband’s mother was to the effect that her role was limited to preparing invoices. At paragraph 15 of her affidavit the wife said:
15. [Mr Lawson] and I regularly discussed the development and direction of [H Pty Ltd] and made all decisions regarding the business. [Mr Lawson’s] mother continued to do the invoicing and did not involve herself in the management decisions. [Mr Lawson] or I would inform his mother of decisions after they had been made and implemented. If staff or customers asked [Mr Lawson’s] mother any questions she would reply: “All decisions are made by [Mr Lawson] and [Ms Yang], you need to ask them.” ….
41.It was the contention of the husband and of his mother that she has had a far more extensive role than just the preparation of invoices. In cross-examination the wife was asked about the assistance provided by the husband’s mother when the parties and she travelled to China on business. The wife conceded that on those trips, presumably as a result of the husband’s mother being available, she and the husband did not require a Mandarin interpreter. The wife disputed that the husband’s mother ever travelled on business to China alone during the parties’ cohabitation. She said that the husband’s mother only travelled alone to China on one or two occasions during that period and that was not for work. She rejected the proposition that the husband’s mother had travelled to China for work once or twice each year.
42.The wife was taken to an email sent by her to the husband on 24 November 2010. She was responding to an email by the husband about a proposed new manager for the business. She wrote:
Have you spoken with Mum?
If Mum is going to do what she’s been doing for last 6 years e.g. Overwriting the decisions he’s going to make, doing her own things with the warehouse and staff etc. I can guarantee you that hiring [Mr R] will be a waste of time and money for everyone.
I would suggest that you need to have a real good talk and clear record of what’s discussed with your mum, before you get [Mr R] meeting with the staff.
43.The wife did not explain the apparent inconsistency of her views about the involvement of Mrs Lawson senior in the business. The necessary inference is that the wife set out to mislead the Court as to the extent of the involvement of Mrs Lawson senior in the running of H Pty Ltd. Otherwise, the wife was not successfully challenged.
44.The husband dissembled in respect of the pattern of dividends paid to himself and his mother during the marriage and since. He was taken to the fact of generous provision of dividends to him during the marriage and less for his mother and the reduced provision for him since separation with greater provision for his mother. His response was to the effect that there was no pattern at any time and the allocation of dividends was solely or largely a matter for his mother and Mr J. In my view the husband was less than frank about this issue. When asked about his wife’s role in the company the husband continually reinforced that she was a member of a team. At the margins at least, the husband sought to minimise the wife’s role. The husband was asked about the wife becoming general manager. He said that she was self-appointed. That evidence is inconsistent with his case that at all times his mother controlled the business.
45.The husband made some concessions against interest. He agreed that he told his mother that with her MBA, the wife could command remuneration of the order of $250,000. He further conceded that that was his opinion. He conceded that he had plans to set up an operation in the same area as the wife’s business
46.Mrs Lawson is the husband’s mother. English is not her first language and it appeared from her answers in cross-examination that she did not always understand the questions asked. In any event her answers were not entirely responsive to the questions asked.
47.As to one issue in the case - who made decisions about dividends declared by H Pty Ltd, it was difficult to find someone willing to admit to making the relevant decisions. The husband’s evidence was that it was a matter largely between his mother and Mr J. Mr J suggested that he had little input and was only interested in the issue insofar as measures were needed to deal with loan account balances that were likely to attract the deemed dividend provisions of Division 7A of Part III of the Income Tax Assessment Act 1936. The evidence of Mrs Lawson was to the effect that the dividend decisions were shared by her and Mr J. In my view Mrs Lawson was disingenuous on this issue. As a matter of law, as the majority shareholder and as a director she had a significant say in the decisions and I am satisfied that as a matter of practice, she had the final say in respect of dividends. Otherwise I accept Mrs Lawson as a witness of truth.
48.Mr J was a careful witness. He was not successfully challenged on any significant matter.
49.Ms K gave evidence as a single expert and her credit was not in issue.
The approach in proceedings under Section 79
50.The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79, involving four inter-related steps. First, I 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 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 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 determinations and identify orders that are just and equitable in all the circumstances of the case.[4]
51.There is no mention of steps in s 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.[5]
[4] 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.
[5] In the Marriage of Hickey above.
The property of the parties at the date of the hearing
52.The Court is required to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.
53.There are circumstances whereby assets can be included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
54. The parties settled a joint balance sheet. As a result of concessions and agreements made leading up to and during final submissions, the resultant joint balance sheet was as follows:
Ownership Description Wife/de facto partner’s value Husband/de facto partner’s value 1 Joint E Town Condominium $AUD(@1.0508) 709,000 709,000 2 Husband Marina sale proceeds 158,306 24,145 3 Wife Korean Apartment 213,500 213,500 4 Husband Boat 15,000 15,000 5 Husband Sale proceeds Suburb M 890,356 0 6 Joint Controlled money account (Balance sale proceeds Suburb M) 306,913 306,913 7 Husband Sale proceeds wife's car 45,000 0 8 Husband Sale proceeds husband's car 39,000 0 9 Husband Contents Suburb M property 17,500 17,500 10 Husband Art work Suburb M NK 15,000 11 Husband Contents - E Town 16,500 16,500 12 Wife Contents 11,500 11,500 13 Wife Bank accounts 4,134 NK 14 Husband Bank accounts NK 20,000 15 Husband H Pty Ltd 2,079,958 693,319 16 Joint F Pty Ltd NK NK 17 Joint O Pty Ltd 0 0 18 Husband Vespa 3,000 3,000 19 Wife Piano 3,000 3,000 20 Wife Cello 9,500 9,500 21 Wife December 2011 distribution from Controlled Monies 0 75,000 22 Husband December 2011 distribution from Controlled Monies 75,000 75,000 23 Husband Monies Held in Trust 22,525 22,525 24 Wife G Pty Ltd (Husband says between $100,000 to $200,000) 0 125,000 25 Wife Distribution from Controlled Monies as per Order 27/06/12 40,000 40,000 Total 4,659,692 2,395,402
ADDBACKS
Ownership Description Wife/de facto partner’s value Husband/de facto partner’s value 26 Husband Paid Legal Fees $46,063 $46,063 27 Wife Paid Legal Fees $1,000 $1,000 Total $47,063 $47,063
LIABILITIES
Ownership Description Wife/de facto partner’s value Husband/de facto partner’s value 28 Husband H Pty Ltd NK $899,195 29 Wife Mr Q $28,000 $28,000 Total $28,000 $927,195
SUPERANNUATION
Member Name of Fund Type of Interest Wife/de facto partner’s value Husband/de facto partner’s value 30 Wife BT Accumulation $34,396 $34,396 31 Wife Merril Lynch Accumulation 0 $33,000 32 Wife AMP Accumulation 1,000 1,300 33 Husband H Pty Ltd SMF $263,691 $263,691 Total $299,087 $332,387
FINANCIAL RESOURCES Ownership Description Wife/de facto partner’s value Husband/de facto partner’s value 34 Husband H Pty Ltd NK Total $ 0 $ 0
55. As to the disputed issues:
56. As a general submission it was argued on behalf of the wife that H Pty Ltd has over $2 million in undistributed profits and that is somehow relevant to the value of the husband’s interest in the company or perhaps to the practice of the husband running substantial loan account balances. I did not follow this argument but record that it was made.
Item 2: Marina Sale Proceeds
57. The marina in question was associated with the Suburb M apartment but was sold separately for $158,306. The contention of the wife was that the net proceeds should be included in the balance sheet in the hands of the husband as a notional asset. The husband argued that $24,145 of the proceeds should be included in the relevant list of assets.
58. It was the husband’s evidence[6] that of the net proceeds of sale he applied funds as follows:
[6] Exhibit 9.
Amount
Purpose
$1,320
Barristers fees
$4,686
Visa card
$5,079
Visa card
$20,066
Transfer to US to meet expenses of US business
$5,000
Personal expenditure
$10,117
Husband personal income tax shown on earlier Financial Statement
$25,000
Paid to husband’s solicitor’s trust account ($22,525 remains in trust
$7,000
To S Pty Ltd accounts
$7,426
Paid legals included in item 24 (sic perhaps item 23) of Joint Balance Sheet
$31,887
US wholesale stock and expenses
$4,380
Visa card
$5,000
Visa card
$20,341
US payroll plus expenses
$147,302.00
Total
59. Of those disbursements the personal expenditure and the visa card payments are conceded by the husband to be amounts that should be added back as notional assets. Thus $24,145 is conceded. It was conceded that the amounts paid to lawyers should be added back but that is already addressed by items 23 and 26 of the agreed balance sheet. That effectively leaves the amounts paid for the husband’s tax and for the benefit of F Pty Ltd. The tax was a debt arising from income received and it would be artificial to include one without the other. I will not add back the amount applied to income tax.
60. As to the funds paid into F Pty Ltd, there was no challenge to the husband’s evidence that the funds were applied in that way. Just as the wife has injected funds into G Pty Ltd, the husband has injected funds into the F Pty Ltd operation. Indeed, the husband contends that between half and one million dollars has been invested in F Pty Ltd. Again, as with the wife’s attitude to G Pty Ltd, although the husband has doubts about the ultimate profitability of F Pty Ltd he remains committed to pursuing the venture.
61. Therefore the controversy here relates to about $80,000 invested in F Pty Ltd by the husband. In my view this is not an amount that should be included as a notional asset. In addition to the usual caveats about add backs, such a finding here would be inconsistent with the approach I have taken with other injections into the US operations of the parties.
62. I note that the husband has not accounted for $11,004 of the marina proceeds. I will add back the conceded $24,145 together with $11,004. The add back will be $35,149 in the hands of the husband.
Item 5: Sale proceeds Suburb M
63. The wife argued that the husband has not accounted for the proceeds of sale of the Suburb M property and that $890,356 should be included in the balance sheet as a notional asset of the husband. The husband argued that the proceeds are represented on the balance sheet by the balance of the controlled moneys account at item 6 and are otherwise accounted for by the preliminary distributions to the parties from that account, the repayment of $400k to the husband’s mother and by payments to H Pty Ltd.
64. The Suburb M property was sold by the husband for $1.42 million in 2011. The net sale proceeds, including the balance of the deposit were $1,390,356. From the account into which those proceeds were paid, the husband paid $900,000 to H Pty Ltd and a further $400,000 to his mother. As a result of an order of this Court, $500,000 was subsequently paid from a H Pty Ltd account to the wife’s solicitor to be held in a controlled moneys account to abide further order. It was the latter amount, after distributions to the parties, that appeared in the agreed balance sheet at item 6 with a balance of $306,913. It was the husband’s evidence that the balance of the sale proceeds ($90,356) was applied to various expenses, including his legal expenses, removalist fees and payment of expenses of F Pty Ltd. As at the date of his affidavit, the husband retained about $9,000 from the proceeds.
65. The husband’s evidence was that the $400,000 from the proceeds of sale that remained with H Pty Ltd was applied to his loan account with the company.
66. At the heart of the wife’s argument is that the husband’s mother was paid twice for her $400,000 advance to the pay out the husband’s then loan account. It is noted that there is no written agreement evidencing the loan from mother to son. The wife contended that the husband’s mother was paid by the husband from the proceeds of sale of Suburb M and she received a dividend in a similar sum soon after the advance. The submission was that the husband had other opportunities to repay his mother, such as from his 2009 dividend of $400,000 or from the net sale proceeds of the Melbourne apartment. The argument was that the loan was only repaid when the parties’ marriage broke down. The wife also complained that the $400,000 that was paid to H Pty Ltd was attributed to that part of the husband’s loan account referable to the advances made for the benefit of F Pty Ltd, rather than that part that was referable to the E Town condominium purchase. It is noted in the wife’s case that Ms K asserted that loans in favour of F Pty Ltd are irrecoverable. In any event, it was the wife’s contention that in previous years the entire loan account would have been addressed by the declaration of dividends.
67. It was also noted in the wife’s case that although the husband consented on 1 August 2011 to an order that $500,000 from the Suburb M proceeds be retained in a controlled moneys account, on 5 August 2011 $900,000 from those proceeds was paid to H Pty Ltd. It was submitted that the transfer frustrated the consent order and that the wife incurred further costs in having $500,000 recovered from H Pty Ltd.
68. For the husband it was submitted that there is no suggestion that the husband retains $890,000. There is no doubt that Mrs Lawson senior advanced $400,000 to the husband to reduce his loan account nor that the advance was repaid from the Suburb M proceeds. $500,000 residue is in the controlled moneys account. It was submitted that the absence of a written loan agreement between mother and son is not remarkable or suspicious.
69. The submission was that had he not reduced the loan account, it would be greater and would thereby reduce the available assets. The submission was that the husband had used his loan account since before the marriage and that there was nothing irregular about it.
70. It was also submitted that were it the fact that the loan account with H Pty Ltd was a fiction then his contributions must be seen as greater to the extent of the asserted loan.
71. There is no basis on which $890,356 can be justifiably added back to the list of assets in the husband’s hands. It was not submitted that the husband retains those funds. It is an agreed fact that the advances which were repaid with the Suburb M proceeds were made. There was a change of approach in relation to the husband’s remuneration from H Pty Ltd from the time of the breakdown of the marriage but at the same time the parties had recently embarked on their US operation. It is an agreed fact that the husband’s mother was not and is not fully convinced by the US venture. It is not more probable than not that the repayments were unnecessary or a device to reduce the pool of assets amenable to the wife’s claims. The fact of Mrs Lawson senior receiving a dividend in a similar sum to the advance is suggestive but does not detract from the fact that the advance was made by her to the husband and it was repaid.
Items 7 & 8: Sale proceeds of the parties’ cars
72. The submission on behalf of the wife was to the effect that the sale proceeds of the parties’ cars should be added back to the list of assets as an asset in the hands of the husband. The husband opposed that course.
73. At paragraph 18 of his affidavit the husband deposed to the effect that a motor vehicle driven by the wife and a motor vehicle driven by the husband were sold in Sydney in about September 2010, following the parties move to US State 1. The husband’s evidence was somewhat contradictory. According to that paragraph of the husband’s affidavit, the sale was “to assist with our living expenses and business costs” and “to buy more stock for the US business”.
74. The husband’s evidence was not entirely consistent but there is no issue about the cars being sold. There is no basis on which I could assume that the proceeds of sale exist or that they were not applied as the husband contends. I will not write the proceeds of sale back into the list of assets.
Item 10: Art work
75. The wife challenges the allowance for the art work at $15,000. It was submitted on behalf of the husband that the court would accept that the art work was sold. The husband attached a copy of a note from the purchaser to his affidavit.[7] It was submitted that there is no other evidence of value that could be relied on by the court.
[7] Annexure 15 at page 77 of the husband’s affidavit.
76. It is vexing that the husband took matters into his own hands. He did not consult with the wife, let alone, as he was obliged to do, obtain her consent to the sale. Nevertheless, beyond recording those problems there is nothing I can do to recognise the issue in settling the balance sheet.
77. I will record the art works as having a value of $15,000 in the hands of the husband.
Item 13: Wife’s bank account
78. It was conceded on behalf of the husband that the court would accept the wife’s figure as an admission against interest.
Item 14: Husband’s bank account
79. It was submitted on behalf of the husband that the court would accept his figure as an admission against interest. There was no complaint on behalf of the wife to that approach.
Item 15: Husband’s interest in H Pty Ltd
80. Ms K was called to give evidence as a single expert forensic accountant. Her report is dated 23 November 2011 and although it was not attached to an affidavit she adopted the report in the witness box. Ms K said this about H Pty Ltd:
17. The trading business conducted by [H Pty Ltd] involves the design of …and its distribution to retailers located across Australia and New Zealand. Some sales are made to United Kingdom and parts of Asia. The business also has been successful selling its products directly to consumers via its website and during 2010 and 2011, it was a significant source of sales for company.
18. The …products are sold by [H Pty Ltd] under the brand name of ['F Pty Ltd'] which include a range of [products] suitable for both babies and infants up to the age of 6 years. The product lines are manufactured by a key supplier based in China under design rights which are owned by the company. The design team are currently based in the USA and employed by an associated company registered in the USA.
19. The manufactured goods are then imported from China and stored in a warehouse based in [T Town] in New South Wales, which is owned by the majority shareholder with rent charged to the company.
20. The trading business has been established since 1963 originally in the form of a partnership structure between [H Pty Ltd] and [Mrs Lawson] and then roll-over into the current company structure on 28 June 1994 which gave rise to a goodwill value being recognised of $308,992.
81. Ms K assessed H Pty Ltd to have a value of $1,961,822 on 1 January 2005 and of $3,466,597 as at 30 June 2011. She assessed the husband’s interest as a 25 per cent shareholder of the company to have a value of $392,364 as at 1 January 2005 and $693,319 as at 30 June 2011.
82. The husband formally relied on the expert’s valuation although it was submitted in his case that somehow the value attributed to the husband’s interest should be discounted in some way. The thrust of the argument was that no purchaser would pay the asserted value for a minority interest in a company otherwise owned by the husband’s mother and sister.
83. It was the wife’s contention that there are three possible findings. Her preferred position was that I would find that the husband’s interest is a 60 per cent interest and therefore should be valued at $2,079,958. Alternately, the submission was that I could find the husband’s interest in the company to be valued in accordance with the expert’s valuation but without the 20 per cent discount applied by the expert. Finally, I could find in accordance with the expert’s report. In the latter case, it was submitted that a significant allowance should be made pursuant to s 75(2) for the company as a financial resource of the husband.
84. The submission on behalf of the wife in aid of the highest valuation was that the husband held and acted as though he held a 60 per cent shareholding in the company for much of the marriage. Further, it was submitted that his evidence was inconsistent on this issue. The argument runs that in addressing this matter at paragraph 4 of his affidavit, the husband gave the impression that the allocation of his father’s shareholding to him was a paper entry only. Nevertheless, it was submitted that at all relevant times the husband acted as if he controlled the company. It was submitted for the wife that his evidence was inconsistent with the agreed evidence about remuneration and his influence during those years. For example, the evidence suggests that the U.S. venture was not supported by the husband’s mother and yet it went ahead; the husband’s remuneration over those years was greater than that of his mother; the husband told the wife during the marriage that he had various levels of ownership between 40 per cent and up to 70 per cent of the company; the husband agreed during cross-examination that one day the company is likely to be his; there was a meeting involving the parties, Mrs Lawson senior and Mr J in 2010 when the question of the husband succeeding to his mother’s interests was discussed; and advice was obtained from accountants about that possibility.
85. It was submitted for the husband that it is clear that at law he is not the owner of 60 per cent of the shares in the company and that the Court should be satisfied that the husband has (only) a 25 per cent interest in the company. It is noted that there was no argument made on behalf of the wife that the husband’s mother holds her interest on trust for him. As to the representations made during the marriage by the husband to the wife, the effect of the submission was that the husband was just trying to impress the wife. As to the meeting, it was submitted that the wife’s version of events is inconsistent with the facts. Why would Mrs Lawson senior give her son her shares in the company at the point of the breakdown of the parties’ marriage? Why was the wife crying at the meeting if the effect of the discussions was as she contends? In any event it is the evidence of Mr J that the discussions related to the fate of Mrs Lawson’s shares, after her death. Mrs Lawson gave evidence to similar effect. It was submitted on behalf of the husband that the Ernst and Young advice about a transfer of control was in a document only addressed to the wife.
86. It was not the wife’s evidence that the husband’s mother promised to transfer her ownership in the company to him. It was her evidence that from as early as before the parties’ wedding Mrs Lawson senior said to her that H Pty Ltd would “be yours and [Mr Lawson’s]”. The wife said that at a meeting attended by the parties, Mrs Lawson senior and Mr J in March 2010, the husband’s mother said words to the effect: “As of 1st July 100 per cent ownership of the company will be with [Mr Lawson] and [Ms Yang]. You need to decide what percentage shareholding [Ms Yang] will have. I will still come to work everyday and get paid a salary of $100,000 a year”. That evidence was challenged by the husband and his mother but even if it is correct, that is not to say that the husband’s mother will transfer ownership to the husband in the short term. Particularly if the wife is correct about the centrality of her (the wife’s) role in the success of H Pty Ltd.
87. The circumstances about the mistaken share transfer and the correction late in the marriage are suggestive but there is no sound basis for departing from the opinion of the single expert. On the face of it the original transfer to the husband was inconsistent with the will of the husband’s father. The husband has in fact a 25 per cent shareholding.
88. Learned counsel for the wife was typically sensible in not pressing on me a further discount to the expert’s valuation of the husband’s shareholding on the basis that it is a minority shareholding in a private company. Those factors were taken into account by the expert.
89. I accept the practical realities of the case. The husband is likely to control the company one day and his remuneration from the company could in the future return to the more generous basis applied before the breakdown of the marriage. However, those facts do not justify a different finding in relation to the value of his interest in the company than the expert has identified. Although far less satisfactory from the wife’s point of view, those matters can only be accommodated by taking them into account under s 75(2).
Item 21: Wife’s 2011 distribution from Controlled Moneys Account.
90. It was submitted on behalf of the husband that $75,000 distributed to the wife from the controlled moneys account (which in turn represented the proceeds of sale of Suburb M), should be added back as a notional asset in the hands of the wife. It was submitted for the wife that the advance should not be included in the balance sheet.
91. It was the unchallenged evidence of the wife[8] that she injected the distributed funds into G Pty Ltd. The moneys went to meet overdue invoices and were otherwise applied to the operation of the business. There is no reason to add back these funds. In a perfect world they would be brought to account in the value of G Pty Ltd but I have been asked to find that the company has no value. A similar argument arises on the husband’s case in relation to the treatment of funds invested in or injected into the operation of F Pty Ltd after he took over the non-retail elements of that business. It is surprising that the parties advocate a different approach to similar circumstances.
[8] Paragraph 81 of the wife’s affidavit.
92. There needs to be a reason to add back to a pool of assets, funds that no longer exist. The intention of s 79 is obviously to divide what there is, not what there was. Add-backs bring a degree of artificiality to the task of property settlement that risks frustrating the aim of a just outcome.
93. I will not add back the funds distributed to the wife from the Suburb M proceeds.
Item 24: Value of G Pty Ltd
94. It was claimed by the husband that G Pty Ltd should be included in the balance sheet at a value of $125,000. The wife sought that it be included at no value.
95. The thrust of the argument on behalf of the husband was that in circumstances where the wife failed to disclose there is an adverse inference to be drawn. In those circumstances, I was invited to take a more expansive view of the husband’s case and not allow the wife to benefit from her failure to disclose.
96. The asserted value of $125,000 was said on behalf of the husband to arise from the husband’s evidence that the company had the use of about $200,000 in stock from F Pty Ltd and allowing for $75,000 that the wife injected into the company from a distribution from the controlled moneys account (paragraph 81 of her affidavit). The submission was that the company cannot be valueless in those circumstances. With respect I do not agree. In any event there seems to be no logical reason why the company would in those circumstances be valued at $200,000.
97. Neither of the parties called evidence of value of G Pty Ltd.
98. It was submitted on behalf of the husband, without complaint on behalf of the wife, that there was no response or no adequate response to the call by the husband’s solicitors for production of documents.[9] That seems to be so but there are similar difficulties with the financial records of F Pty Ltd.
[9] Exhibit 1.
99. There is no basis for allocating a value of $125,000 or any value to G Pty Ltd. It seems to me that this company and F Pty Ltd are in a similar category. The parties respectively assert that each company, is trading unprofitably but they have expectations that each company will be profitable. Ms K considered that the loans made by H Pty Ltd to F Pty Ltd are irrecoverable. That suggested that there is little expectation of a return in the short or medium term.
There is no valuation evidence in relation to G Pty Ltd. I will allocate no value to that company.
I find that the assets are:
ASSETS
VALUE Joint E Town Condominium $AUD(@1.0508) $709,000 Husband’s Marina sale proceeds $35,149 Wife’s Korean Apartment $213,500 Boat $15,000 Joint Controlled money account (Balance sale proceeds Suburb M) $306,913 Husband’s Contents Suburb M property $17,500 Husband Art work Suburb M $15,000 Husband’s Contents - E Town $16,500 Wife’s Contents $11,500 Wife’s Bank accounts $4,134 Husband’s Bank accounts $20,000 H Pty Ltd - Husband $693,319 Joint F Pty Ltd $0 Joint O Pty Ltd $0 Husband’s Vespa $3,000 Wife’s Piano $3,000 Wife’s Cello $9,500 Husband’s December 2011 distribution from Controlled Monies $75,000 Husband’s Moneys Held in Trust $22,525 Wife’s G Pty Ltd $0 Wife’s Distribution from Controlled Monies as per Order 27/06/12 $40,000 Wife’s paid legal fees $46,063 Husband’s paid legal fees $1,000 Total Gross Assets $2,257,603.00
Superannuation:
The parties agreed about most of their superannuation interests. As to the disputed issues:
Item 32: Wife’s interest with Merrill Lynch
In prior disclosures the wife had declared a superannuation interest with Merrill Lynch with a balance of $33,000. It was the wife’s evidence in cross-examination that she rang Merrill Lynch and was told that her interest was no longer held with that organisation and that her nominal interest was transferred to AMP.
It is frustrating that there are no original documents to support the wife’s case. Given the age of the wife, the impact on the overall task under s 79 of a dispute about $33,000 in the form of superannuation is not critical. The wife gave oral evidence about this and did not resile from it. I accept the wife’s evidence.
Item 32: Wife’s interest with AMP
On the face of the agreed balance sheet there is a dispute about the wife’s superannuation interest with AMP. She asserted that it stands at $1,000 and the husband relied on an earlier disclosure of $1,300. I will put the figure at $1,000 as an admission against interest.
The superannuation interests are as follows:
SUPERANNUATION
VALUE Wife’s BT $34,396 Wife’s AMP $1,000 H Pty Ltd SMF $263,691 Total $299,087.00
Liabilities:
The parties agreed about some relevant debts. As to the disputed issues:
Item 28: Husband’s debt to H Pty Ltd
The husband’s loan account with H Pty Ltd stands at $899,195. About $480,000 of that advance can be traced to the parties’ purchase of the condominium in E Town, US State 1. The balance was made up of funds advanced to F Pty Ltd. It was the wife’s contention that at least as to the funds applied to F Pty Ltd, the husband has an asset in the form of a similar amount owed by F Pty Ltd to him. Those matters were put to the husband and he agreed. The point of contention comes with the recoverability of the husband’s loan to F Pty Ltd. It was further submitted that in the past the husband’s loans have been covered by dividends and deliberately so. There was an instance for example, whereby the husband received a dividend to pay out his loan account and then a further dividend to meet the taxation liability attracted by the first dividend. I understand the submission to be that because of these proceedings, the husband’s remuneration and benefits from H Pty Ltd have been suspended. In those circumstances the wife would have it that this liability will not ultimately be pressed against the husband or that it will be balanced by an increase in income.
The submission on behalf of the husband was that there is no challenge to the fact that the funds were advanced to the husband or that the advances were applied to F Pty Ltd and that about $480,000 was applied to the E Town purchase. It was submitted that this is not a unique arrangement and that the Korean apartment, for example, was also purchased with such an advance. It is submitted that at all relevant times the husband has had an outstanding debt to H Pty Ltd and that previous advances were repaid, not forgiven. Thus the argument on behalf of the husband was that the current loan balance was not contrived to reduce the husband’s assets but was simply a continuation of an arrangement that predated the parties’ separation.
There is no basis on which this liability can be ignored in identifying the relevant pool of assets. The advances in question were actually made. The E Town condominium was purchased with funds from that source. There is no issue about funds so advanced being injected into F Pty Ltd. The loan exists.
In Prince and Prince (1984) FLC 91-501, Evatt CJ as part of the Full Court said:
…The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases. While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, e.g. tax liabilities (Kelly and Kelly (No. 2) (1981) FLC 91-108 p. 76,801). In some cases the amount of the liability can only be estimated generally (Albany (supra), p. 75,717). The Court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced; Af Petersens (supra); Quirk (1983) unreported). In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party's potential entitlement under sec. 79 (Kimber and Kimber (1981) FLC 91-085; Kowaliw and Kowaliw (1981) FLC 91-092; Antmann and Antmann (1980) FLC 90-908; Af Petersens (supra)). Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC 91-311).
Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect ‘contribute’ to the liability by having that spouse's fair share in the parties’ property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under sec. 79 (Af Petersens (supra)).
A later Full Court in Biltoft and Biltoft (1995) FLC 92-614 cited those observations with approval.
There is a possibility that the husband’s debt will be forgiven. However, there is nothing in the history of past advances nor in the oral evidence of Mrs Lawson senior or Mr J which could support a finding on the balance of probabilities that this debt will be forgiven.
I will include the husband’s debt to H Pty Ltd as a relevant debt for the purposes of establishing the net pool of assets for division between the parties.
As to whether the loan is matched, as to the funds put into F Pty Ltd, by a debt owed by that company to the husband, that fact was conceded. The issue relates to whether the debt owed by that company to the husband is recoverable. Ms K’s report suggests not. The same issues arise in relation to value of F Pty Ltd and indeed, in relation to the value of G Pty Ltd. Neither of the parties conceded that their investments in the US entities will be repaid in the short or medium term. Neither of them sought to bring to account as an asset, whether in the form of a loan account with the entity or as a value ascribed to their ownership of the entity, the investment they have respectively made.
The relevant liabilities are as follows:
LIABILITIES
VALUE H Pty Ltd – husband $899,195 Mr Q – wife $28,000 Total Liabilities $927,195.00
Financial Resources
The husband has a financial resource in the form of his mother, particularly through H Pty Ltd. He has a legitimate expectation that he will one day control H Pty Ltd. In the meantime, based on the past, the husband can anticipate significant support from his mother. There was no evidence as to his mother’s financial circumstances save for the fact that she has a controlling interest and the majority shareholding in H Pty Ltd. With the husband’s sister, Mrs Lawson senior owns 75 per cent of the shares in H Pty Ltd. I am satisfied that Mrs Lawson makes the decisions about dividends and about company loans.
Net asset pool
The parties’ assets have a net value of $1,629,495 ($2,556,690 - $927,195) of which $299,087 is in the form of superannuation interests and $1,330,408 is in the form of non superannuation assets.
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.[10] 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.[11]
[10] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1.
[11] In the Marriage of Shewring (1987) l2 Fam LR 139.
As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it the former 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.
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:
… 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.
Here, the parties did not isolate superannuation interests for the purposes of applying s 79(4) to the assets.
I too will apply s 79(4) to superannuation and non-superannuation assets alike.
The wife’s case was confusing. The orders she sought are essentially for an equal division of the parties’ property. In the written outline provided in her case it was submitted that on a lower value pool (as contended for by the husband) the wife can justify a finding on contribution that, with an allowance under s 75(2) would bring her to an equal share. However, it was also conceded that if the wife were accepted as to her argument for a pool of greater value then her entitlement will be less than 50 per cent. In any event the precise recommended percentage findings on contributions and adjustments are not specified. It is always difficult when the submissions do not entirely match the orders sought. Perhaps the arguments are based on the knowledge that I am permitted without further reference to the parties to consider a just and equitable property settlement within the range of outcomes proposed by the parties.
The husband contended that on his arguments as to the pool, his contributions and those made on his behalf represent 85 per cent of the contributions made compared to 15 per cent by and on behalf of the wife.
Section 79(4)(a) Contributions
Financial contributions, both direct and indirect were made by each of the parties. The initial contribution of the husband was far greater than that of the wife.
The husband brought to the marriage assets which were worth or were later realised at a total of $2,357,626. He owed about $750,000. Thus he had net assets of the order of $1.6 million. The assets were made up of the Suburb M apartment, ultimately sold for a net $1,390,356, the Melbourne apartment sold for $375,000, a 25 per cent interest in H Pty Ltd valued by Ms K at that time at $392,364, shares worth about $74,906, superannuation at about $60,000 and a motor vehicle worth $50,000. The husband’s shares were sold in 2010 for either $97,762[12] or $87,000.[13]
[12] Paragraph 19 of the husband’s affidavit.
[13] Paragraph 34 of the husband’s affidavit.
The wife said that at the commencement of cohabitation she had around $120,000 in savings, a motor vehicle with a related debt and personal effects. The husband could not recall the wife having $120,000 at that time. He thought that she had more like $75,000. The wife was cross-examined about this issue. She did not resile from her testimony. She has no records to support her recollection. In the context of these proceedings it probably does not matter greatly whether the wife came into the relationship with $75,000 or $120,000. The husband made the overwhelming initial contribution.
There was a dispute between the parties as to the extent and importance of the wife’s role in H Pty Ltd. The wife’s submissions rely in part on the increase in the value of H Pty Ltd over the period of the parties’ cohabitation. That period coincides with the wife’s involvement with the company. The increase in value identified by Ms K was from $1.9 million to $3.46 million. The wife would have it that she was instrumental in the improvement of the company’s fortunes and that her appointment as General Manager reflected the importance of her contribution. The husband and his mother suggest that the wife was self appointed as General Manager and that her role was not as critical as she suggests. It would be difficult to attribute the increase in the value of the company to any one person or factor but the issue is made more difficult here by evidence given as to the benefit to the company of the baby bonus policy of the Australian Government. Given the nature of the business it is obvious that a substantial payment to all new parents would be a fillip to the business.
As to the extent of the wife’s role, it was her evidence that she:
· redesigned the company website and upgraded it;
· recruited and worked with designers to improve the range and quality of products;
· worked with the factories in China to control manufacturing and the logistics of supply;
· took over control of stock;
· took over the budgeting and financial planning for H Pty Ltd including sales forecasts and expenses;
· liaised with the company accountants in relation to the provision of financial information and preparation of the financial accounts; and
· introduced a new accounting software system so as to enable the preparation of management accounts.
The wife asserted that under her influence, tax returns and BAS (s)tatements were brought up to date; a new design collection became a commercial success; the cash position was significantly improved as was turnover and profitability. Lending support to the wife’s case is the fact that after separation the husband sought[14] the wife’s advice about the appointment of a new manager for H Pty Ltd. That tends to suggest that the wife had an important role in the company.
[14] Exhibit 2.
On the other hand the wife has made entirely inconsistent references to the role of Mrs Lawson senior in the business. Her evidence about the role of the husband’s mother was to the effect that it was limited to preparing invoices. At paragraph 15 of her affidavit the wife said:
15. [Mr Lawson] and I regularly discussed the development and direction of H Pty Ltd and made all decisions regarding the business. Mr [Lawson’s] mother continued to do the invoicing and did not involve herself in the management decisions. [Mr Lawson] or I would inform his mother of decisions after they had been made and implemented. If staff or customers asked [Mr Lawson]’s mother any questions she would reply: “All decisions are made by [Mr Lawson] and [Ms Yang], you need to ask them.” ….
On the other hand on 24 November 2010 the wife responded to an email from the husband about a proposed new manager for H Pty Ltd. She wrote:
Have you spoken with Mum?
If Mum is going to do what she’s been doing for last 6 years e.g. Overwriting the decisions he’s going to make, doing her own things with the warehouse and staff etc. I can guarantee you that hiring [Mr R] will be a waste of time and money for everyone.
I would suggest that you need to have a real good talk and clear record of what’s discussed with your mum, before you get [Mr R] meeting with the staff.
As to the husband’s role, the wife’s case about the extent of the husband’s ownership of the business seems to be that following his father’s death, he acted in a way consistently with him having a 60 per cent shareholding in the company. That representation would seem to contradict the evidence about her influence on the company.
For part of her time with H Pty Ltd the wife was completing her management studies. The wife’s evidence is to the effect that her studies did not distract her from her involvement with the company.
Each of the witnesses gave contradictory evidence about the respective roles of the parties and Mrs Lawson in the management of H Pty Ltd. Doing the best I can, I find both of the parties played a valuable role in H Pty Ltd, particularly in the years prior to the US venture. The increase in the value of the company cannot be sheeted home by me to one cause, let alone to one of the parties.
Otherwise, the husband made the overwhelming financial contribution.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
Apart from work undertaken by the parties in the three businesses, there is little evidence of contributions of this type.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage. There were no children of the marriage.
The husband deposed to performing the majority of the household chores. He did most of the shopping and cleaning. In the latter regard, although the parties employed a cleaner once a week at each of the Suburb M and E Town properties, the husband swept, vacuumed, scrubbed the kitchen and bathrooms. He performed most of the clothes washing and most of the cooking. The husband did not resile from that evidence in cross-examination.
The husband conceded that the wife occasionally assisted with the cooking.
In a case such as this where there was a short marriage, no children and a level of paid assistance with household chores, the influence of homemaker contributions would not normally loom large.
That said, on the evidence the husband made a greater contribution by way of homemaker than did the wife.
Conclusion on Contribution
Here, contributions were made during nearly 6 years of cohabitation and since.
On any view, in the context of a net pool of assets of $1.5 million, an initial contribution of the order of $1.6 million is very significant. Otherwise valuable contributions were made by both parties. Their recent contributions have not net born fruit as they seek to establish new businesses in US State 1. In my view the contributions of the wife would be properly recognised at 30 per cent compared to 70 per cent by the husband. That puts his contributions at more than twice those of the wife.
The other matters in Section 79
Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:
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 s 75(2) would seem to be paragraphs (b), (j) and (o).
(a) the age and state of health of each of the parties;
The wife and husband are 40 and 45 years of age, respectively. They are both in good 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 $50 per week being the value of a car allowance provided by G Pty Ltd of which she is company president. The wife lives alone in rented premises at U Street, U suburb, US State 1, USA. Her expenses, inclusive of all living expenses are:
Expense Amount Rent – U Suburb, USA $485.00 Water, gas, electricity and internet $45.00 Health Insurance – Medibank Private $22.00 All other expenditure $148.00 Total $700.00
In cross-examination the wife was asked to explain the fact that between June and October 2011 her Financial Statements showed that she had an income of $73 per week and outgoings of $2,300 and yet her savings increased from about $48,000 to about $53,000 over that same period. The wife said that she received an income tax refund of $9,000 to $10,000 in the second half of 2011. That would not explain how the wife paid out about $38,600 more than she received and yet her savings increased by about $5,000. The 2011 Financial Statements were not put into evidence and so I assume that there is no explanation revealed there, for example, as to the wife’s borrowings.
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
It is not suggested that the wife is not currently exercising her earning capacity. The wife holds a Bachelor degree in a health science. She has a postgraduate degree in management. As with the husband in relation to F Pty Ltd, this question rests with the reliability of the wife’s confidence in the future of her enterprise. Neither of the parties can argue that the level of their current earnings is a reflection of their likely income into the medium term. Either they have chosen not to exercise their earning capacity or their income will soon return to a proper reward for their labour and skills.
The husband receives an income of $4,230 per week made up of his salary as Director of H Pty Ltd of $1,923 and $2,307 per week by way of dividend from that company. It is the husband’s evidence that in 2011 and 2012 his salary has been paid on an annual basis and has been retained by the company to reduce his loan account. In cross-examination the husband could not recall that circumstance occurring during the marriage. It was the husband’s evidence that despite the financial year ending in a few days, he did not yet know if he would receive a dividend from the company for the current year.
He lives alone in the E Town condominium. When in Australia he lives with his mother at L Street, Suburb M. The husband deposed to the following expenses:
The husband said in cross-examination that he meets his expenses by using cash, which he said he uses at a significant rate, and credit cards. As to his use of cash, it was his evidence that as at the date of the hearing, he retained most of the $5000 cash he received some weeks earlier as partial payment for his art work either on his person or in the bedroom he uses at his mother’s home. That suggests that he does not spend cash at a significant rate.
It was suggested that the husband is not exercising his earning capacity to the extent that his remuneration has been artificially reduced. As I have observed in relation to the wife, insofar as the issue relates to his F Pty Ltd operation in US State 1, it depends on whether the husband’s confidence in the viability of that operation is justified. There remains a concern that the husband’s remuneration from H Pty Ltd has been less generous in recent years because of these proceedings.
Neither party has adequately explained their current financial circumstances.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
There are no children of the marriage.
(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 parties’ superannuation interests are identified above.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There was little evidence about the standard of living of the parties during the marriage. The husband bought a boat for $65,000. The Suburb M and E Town properties were apparently comfortable properties.
(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;
Beyond the evidence about the parties’ US State 1 ventures, there was no evidence that either party intends further study or to establish a new business.
(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;
There was no significant evidence on this issue. The wife has a romantic relationship with Mr Q. She said that she has no plans to marry Mr Q. He has provided the wife with $28,000 but on the basis of a loan, repayable in August 2012. It seems to me that the range of orders possible in these proceedings would not preclude the repayment of that loan.
On the husband’s case H Pty Ltd is taking steps to recover moneys advanced to him. Given the husband’s relationship with H Pty Ltd it is difficult to see how the orders made in these proceedings would interfere with the recovery of the husband’s company loans.
(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;
There was no application for maintenance. The wife completed the last two years of postgraduate study during the marriage and the business, H Pty Ltd, paid her fees.
(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;
There was no evidence about this issue.
(l) the need to protect a party who wishes to continue that party’s role as a parent;
This provision has no relevance to these proceedings.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
Except when the husband stays with his mother in Sydney, each of the parties live alone.
(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
There are no children of the marriage.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
I accept the practical realities of the case. The husband is likely to control H Pty Ltd one day and his remuneration from the company could in the future return to the more generous basis applied before the breakdown of the marriage.
In the event that my assessment of the respective contributions of the parties unfairly undervalued the significance of the wife’s role in the success of H Pty Ltd, the wife will take with her the knowledge, skills and experience that enabled her to make those contributions.
(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 made under the Family Law Act 1975.
Section 79(4)(g)
There is no child support.
Conclusion
It is not the role of the non-contribution elements of s 79(4) to equalise or balance the parties’ financial circumstances. For example, it has been said in relation to s 79(4)(e) that the provision does not invite a process of social engineering,[15] and in Mallett, above, at Fam LR 472, Wilson J said that:
The objective of the section is not to equalize the financial strengths of the parties. It is to empower the court, following a dissolution of a marriage, to effect a redistribution of the property of the parties if it be just and equitable to do so…
[15] In the Marriage of Clauson (1995) 18 Fam LR 693 at 711; [1995] FLC 92-595 at 81,912.
Again on the basis that the husband is substantially successful as to his pool arguments and on the basis of a finding of 15 per cent for the wife’s contribution the husband argues for a 5 per cent adjustment to her pursuant to these matters.
As I have set out above, I take it that the wife sought an adjustment sufficient to bring her to an equal division on the pool contended for by the husband and that would be adjusted in some way to achieve less than an equal division on the basis of a larger pool.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
The division of assets warranted by the parties’ contributions alone would leave the husband better of than the wife by some $633,000;
The husband has more assets tied up in the form of superannuation than does the wife;
The husband contributed to the wife’s earning capacity because she completed her postgraduate studies during the marriage and the fees were met by the company; and
The husband has a significant financial resource in the form of H Pty Ltd and his mother.
As was conceded in the husband’s case, an adjustment to the wife is warranted. Such is the importance of the disparity in the parties’ financial circumstances that the adjustment should be 10 per cent. In the context of this case that represents over $158,000 and will cause a disparity in the parties’ settlement of twice that sum.
Just and Equitable
The parties’ assets have a net value of $1,629,495 ($2,556,690 - $927,195) of which $299,087 is in the form of superannuation interests and $1,330,408 is in the form of non superannuation assets.
A division in the proportions 40 per cent to the wife and 60 per cent to the husband would leave them with about $651,798 and $977,697 respectively.
As to the format of the orders, each of the parties sought to retain the E Town condominium. The parties agreed that the wife will retain the Korean property and G Pty Ltd. The husband will retain F Pty Ltd. The wife sought an order in respect of fees payable to Ms K. I do not recall any submissions in relation to that issue.
As to the condominium, it was submitted in the wife’s case that she is in rented premises and does not have the resources behind her that the husband can rely on. It was submitted on behalf of the husband that he lives in the property and that he should retain it. There is nothing by way of evidence or principle that can help with this issue. The husband is living in the condominium and I will make orders on the basis that he retain that property.
The wife sought to retain the boat and the husband was on notice of her application. He seeks no specific order in respect of the boat. I have recorded no specific submissions on this issue. I will order that it be transferred to the wife.
The wife has had the benefit of or will have the benefit of the following assets:
WIFE’S ASSETS & LIABILITIES
VALUE Wife’s Korean Apartment $213,500 Husband’s Boat $15,000 Wife’s Contents $11,500 Wife’s Bank accounts $4,134 Wife’s Piano $3,000 Wife’s Cello $9,500 Wife’s G Pty Ltd $0 Wife’s Distribution from Controlled Monies as per Order 27/06/12 $40,000 Wife’s paid legal fees $46,063 Wife’s BT $34,396 Wife’s AMP $1,000 Mr Q – wife -$28,000 Total Gross Assets $350,093.00
In order to bring the wife to 40 per cent of the net pool she must also receive a further $301,705. The controlled moneys account holds $306,913. I will order that the wife retain the balance of that account. The wife will incur expenses if she returns to the housing market and the increment she thereby receives over an exact 40 per cent division represents a recognition of that fact.
That will leave the husband with the benefit of:
HUSBAND’S ASSETS & LIABILITIES
VALUE Joint E Town Condominium $AUD(@1.0508) $709,000 Husband’s Marina sale proceeds $35,149 Husband’s Contents Suburb M property $17,500 Husband Art work Suburb M $15,000 Husband’s Contents - E Town $16,500 Husband’s Bank accounts $20,000 H Pty Ltd Australia - Husband $693,319 Joint F Pty Ltd $0 Joint O Pty Ltd $0 Husband’s Vespa $3,000 Husband’s December 2011 distribution from Controlled Monies $75,000 Husband’s Moneys Held in Trust $22,525 Husband’s paid legal fees $1,000 H Pty Ltd SMF $263,691 H Pty Ltd– husband -$899,195 Total Gross Assets $972,489.00
The orders sought are framed differently by the parties and no submissions were made as to the format to be preferred. I will make orders relying where I can on the wording proposed by one of the parties but will allow the parties to bring the matter back before me within 21 days after delivery of judgment to allow an opportunity for submissions to be made as to the working of the orders.
Conclusion under Section 79
Significant contributions were made by each of the parties. They worked hard in the course of nearly 6 years of cohabitation. The husband made a far greater contribution than the wife. The orders I propose will effect a just and equitable settlement of their property.
I certify that the preceding one hundred and ninety one (191) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan.
Associate:
Date: 31 August 2012
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