Yates and Wilcox & Ors
[2017] FamCA 163
•21 March 2017
FAMILY COURT OF AUSTRALIA
| YATES & WILCOX AND ORS | [2017] FamCA 163 |
| FAMILY LAW – PROPERTY SETTLEMENT – Where the spouses agreed it would be just and equitable for their property interests to be adjusted – Where both spouses urged that their superannuation interests be treated as property – Where the wife’s greater capital contributions and greater income during the marriage are offset by the husband’s infusion of capital from an inheritance – Where the husband expects to generate substantial income upon the completion of a commercial development project in the near future – Where an adjustment of five per cent in favour of the wife would represent one-third of the least amount the husband expects to receive from the development project – Ordered five per cent adjustment in favour of the wife FAMILY LAW – PROPERTY – Value of property – Where the spouses failed to settle a joint balance sheet – Where the spouses’ attempts to audit the monetary transactions between them and their corporate entities was misguided – Decided finding are made on the best evidence available – Decided the property adjustment process calls for a discretionary and holistic value judgment |
| Corporations Act 2001 (Cth), ss 459H, 1337H Family Law Rules 2004 (Cth), r 14.06 |
| Bevan & Bevan (2013) 49 Fam LR 387 Chorn v Hopkins (2004) FLC 93-204 Davey v Lee (1990) 13 Fam LR 688 Garrett v Garrett (1984) FLC 91-539 Marriage of Coghlan (2005) 33 Fam LR 414 Marriage of Parshen (1996) 21 Fam LR 199 Pierce v Pierce (1999) FLC 92-844 Quinn v Quinn (1979) FLC 90-677 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms Yates |
| 1st RESPONDENT: | Mr Wilcox |
| 2nd RESPONDENT: | B Bank |
| 3rd RESPONDENT: | Wilcox Pty Ltd |
| FILE NUMBER: | SYC | 7648 | of | 2014 |
| DATE DELIVERED: | 21 March 2017 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 27 & 28 February, 1 & 2 March 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Lawrence & Mr Reeves |
| SOLICITOR FOR THE APPLICANT: | Etheringtons Solicitors |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Neil QC & Mr Bell |
| SOLICITOR FOR THE 1ST RESPONDENT: | Horowitz & Bilinsky |
| COUNSEL FOR THE 2ND RESPONDENT: | No Appearance |
| SOLICITOR FOR THE 2ND RESPONDENT: | No Appearance |
| COUNSEL FOR THE 3RD RESPONDENT: | No Appearance |
| SOLICITOR FOR THE 3RD RESPONDENT: | Ms Corbett | COUNSEL FOR THE 3RD RESPONDENT: | No Appearance |
Orders
All former interim orders made under Parts VIII and XIV of the Family Law Act are discharged.
The applicant wife (“the wife”) and first respondent husband (“the husband”), as trustees of the L Super Fund (“the Super Fund”), shall forthwith do all such things and execute all such documents necessary to:
(a)Cause the Super Fund to sell the real and personal property it beneficially holds; and
(b)Upon completion of such sales, cause the net proceeds to be deposited into a bank account of the Super Fund.
Declaration that the wife and husband, as the trustees of the Super Fund, have been accorded procedural fairness in respect of these superannuation splitting orders, and orders ancillary thereto.
Order that these orders are binding upon the wife and husband as trustees of the Super Fund.
Declaration, pursuant to s 90MT(2) of the Family Law Act, that for the purpose of these orders:
(a)The value of the wife’s interest in the Super Fund is determined to be $735,373; and
(b)The value of the husband’s interest in the Super Fund is determined to be $1,167,195.
Order, pursuant to s 90MT(1)(b) of the Family Law Act, that whenever a splittable payment becomes payable in respect of the husband’s interest in the Super Fund:
(a)The wife is entitled to be paid 100 per cent of the splittable payment out of the husband’s member account;
(b)There is a corresponding reduction in the entitlement of the husband to that splittable payment; and
(c)The wife and husband shall cause payment of the respective entitlements whenever a splittable payment is made.
Order 6 hereof has effect from the operative time, which is one business day after compliance with Order 2 hereof.
Order, pursuant to s 90MT(1)(b) of the Family Law Act, that whenever a splittable payment becomes payable in respect of the wife’s interest in the Super Fund:
(a)The husband is entitled to be paid 45 per cent of the splittable payment out of the wife’s member account;
(b)There is a corresponding reduction in the entitlement of the wife to that splittable payment; and
(c)The wife and husband shall cause payment of the respective entitlements whenever a splittable payment is made.
Order 8 hereof has effect from the operative time, which is one minute after compliance with Orders 6-7 hereof.
The wife shall notify the husband in writing of the compliant superannuation fund into which her member account in the Super Fund should be rolled over.
The wife and husband shall do all such things and execute all such documents necessary to cause the wife’s superannuation interest in the Super Fund to be rolled-out to that other compliant superannuation fund immediately upon compliance with Orders 6-10 hereof; and
Immediately upon compliance with Order 11 hereof:
(a)The wife shall resign as a trustee of the Super Fund;
(b)The husband shall indemnify and keep indemnified the wife against any past or future liability in relation to her trusteeship of the Super Fund;
(c)The wife shall transfer to the husband all her right, title, and interest in the corporations G1 Pty Ltd and G2 Pty Ltd and resign any directorship of those corporations; and
(d)The husband shall indemnify and keep indemnified the wife against any past or future liability in relation to her directorship of those corporations.
The husband shall pay to the wife the sum of $489,319 within three months of the date of these orders.
Subject to compliance with Order 13 hereof:
(a)The husband is declared the sole legal and beneficial owner of the shareholdings held by the wife and husband in Wilcox Yates Pty Ltd and the wife shall forthwith do all acts and things necessary to transfer all her right, title and interest in her shareholding to the husband and to resign as a director of the corporation; and
(b)The husband is declared the sole beneficiary of the Wilcox Yates Family Trust and the wife shall forthwith do all acts and things necessary to relinquish and disclaim her status as a beneficiary of the trust.
The wife is declared the sole legal and beneficial owner of the spouses’ shareholdings in Wilcox Pty Ltd (the third respondent) and the husband shall forthwith do all acts and things necessary to transfer all his right, title and interest in his shareholding in the corporation to the wife and resign his directorship of the corporation.
The wife and husband shall forthwith do all acts and things necessary to cause the closure of B Bank Account No. …20 and the division of the credit balance between them in equal shares.
The wife is otherwise declared the sole legal and beneficial owner of the real and personal assets in her possession, including:
(a)The real property situated at and known as C Street, Suburb D, NSW;
(b)Her shares in F Pty Ltd;
(c)All shares in publicly listed corporations registered in her name;
(d)The vessel named N;
(e)The Japanese car registered in her name;
(f)The German car registered in her name;
(g)Banking accounts held in her name; and
(h)Her artwork, furniture, jewellery, and personal effects.
The husband is otherwise declared the sole legal and beneficial owner of the real and personal assets in his possession, including:
(a)The property known as GG Street, Suburb HH, Country II;
(b)His shareholdings in:
(i)J Pty Ltd;
(ii)E1 Pty Ltd;
(iii)E2 Pty Ltd;
(iv)E3 Pty Ltd; and
(v)I Pty Ltd;
(c)Banking accounts held in his name;
(d)The Suburb JJ plot;
(e)His share in the racehorse;
(f)His furniture and personal effects; and
(g)His superannuation interest in COMPANY RR.
The husband shall do all acts and things necessary to cause the following entities to forgive any debit loan account of the wife, is restrained from causing or permitting the entities to attempt recovery of such debt from the wife, and shall indemnify the wife against all liability in respect of such debt:
(i)Wilcox Yates Pty Ltd;
(ii)Wilcox Yates Family Trust;
(iii)J Pty Ltd;
(iv)E1 Pty Ltd;
(v)E2 Pty Ltd;
(vi)E3 Pty Ltd; and
(vii)I Pty Ltd.
The wife is restrained from attempting to recover any money in satisfaction of any credit loan account from any of the entities specified in Order 19 hereof.
The wife shall do all acts and things necessary to cause Wilcox Pty Ltd (the third respondent) to forgive any debit loan account of the husband, is restrained from causing or permitting the corporation to attempt recovery of such debt from the husband, and shall indemnify the husband against all liability in respect of such debt.
The husband is restrained from attempting to recover any money in satisfaction of any credit loan account from Wilcox Pty Ltd (the third respondent).
Pursuant to s 459H of the Corporations Act 2001 (Cth), the statutory demand dated 17 July 2015 served by the husband upon Wilcox Pty Ltd (the third respondent) is set aside.
The wife and husband shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession and any debts in their respective sole names, including any individual liability for capital gains tax arising out of the sale by them of property pursuant to these orders.
The husband shall forthwith do all acts and things necessary to:
(a)Remove the caveat he caused to be registered over the wife’s real property situated at and known as C Street, Suburb D, NSW;
(b)Withdraw the PPSR registration number … in respect of the wife’s Japanese car; and
(c)Withdraw the PPSR registration number … in respect of the wife’s German car.
Order that the partnership between the wife and husband known as the “Wilcox Yates Partnership” is dissolved forthwith.
The wife and husband shall do all acts and things necessary to sell any and all partnership property and divide between them any surplus property in equal shares.
In the event of the wife or husband refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Sydney is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act.
The Application in a Case filed by the husband on 16 January 2017 is dismissed.
Any and all other outstanding applications are dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Yates & Wilcox and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 7648 of 2014
| Ms Yates |
Applicant
And
| Mr Wilcox |
First Respondent
And
| B Bank Limited |
Second Respondent
And
| Wilcox Pty Ltd |
Third Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings concern adjustment of the spouses’ property interests under the provisions of Part VIII of the Family Law Act 1975 (Cth) (“the Act”).
The spouses met and formed a friendship in 1997, but they maintained separate dwellings for the next couple of years as their relationship developed. They began cohabitation in early 2001 when the husband moved into a property owned and occupied by the wife. They married in 2002 and separated in October 2014.
Each spouse introduced significant amounts of capital to the relationship, though there was considerable inconsistency in the evidence about both the identity and value of the capital they introduced. Both of them worked very hard to improve their financial position and, by the time their marriage ended, their overall financial circumstances were significantly enhanced.
The wife commenced these proceedings in December 2014, less than two months after their final separation, and the litigation then proliferated. There were many interim disputes needing determination by orders to regulate their affairs. The litigation even spilled into another jurisdiction. In July 2015, the husband served a creditor’s statutory demand upon an associated corporation under the provisions of the Corporations Act 2001 (Cth), which caused the corporation to commence proceedings in the Supreme Court of NSW seeking orders setting aside the statutory demand. In March 2016, those proceedings were transferred to this Court under s 1337H of the Corporations Act for determination as part of the matrimonial dispute. By subsequent order of this Court, made in May 2016, Wilcox Pty Ltd was joined as the third respondent to these proceedings.[1] Although a lawyer appeared for the third respondent at the commencement of the trial, she sought and was granted leave to depart and return as she pleased.
[1] Order made on 3 May 2016
The B Bank was earlier joined as a party because it was named as the second respondent to the Initiating Application filed by the wife in December 2014 to commence the proceedings. The B Bank has not filed any process and has not appeared at any Court event, including at the final trial, but has not been discharged as a party. No issue about the second respondent’s denial of procedural fairness arose because no party sought any order that transgressed upon its rights.
The proceedings progressed to trial in February 2017. The spouses agreed it would be just and equitable for their existing property interests to be adjusted, but they disagreed over how it should be achieved.
Evidence
The wife relied upon:
(a)Her affidavit filed on 13 February 2017, the exhibit to which was culled to eliminate some material and tendered separately;[2]
(b)Her financial statement filed on 13 February 2017;
(c)The affidavit of Mr KK filed on 13 February 2017; and
(d)The affidavit of Ms LL filed on 13 February 2017.
[2] Exhibit W4
The husband relied upon:
(a)His affidavit filed on 10 February 2017;
(b)His affidavit filed on 24 February 2017, reliance upon which was permitted over the wife’s objection;
(c)His financial statement filed on 23 February 2017;
(d)The affidavit of Mr O filed on 22 February 2017; and
(e)The affidavit of Ms MM filed on 24 February 2017.
No evidence was adduced by either the second or third respondents.
Both spouses relied upon the valuation report of the single expert, Mr NN, the contents of which were adopted as true and correct in Mr NN’s affidavit, which was tendered jointly by the spouses as an exhibit.[3]
[3] Exhibit A
Legal principles
Orders under s 79 of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 79(2), it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made (see Stanford v Stanford (2012) 247 CLR 108 at [22], [35]). While those two inquiries are not to be conflated (see Stanford at [35], [40], [51]), it is permissible for the s 79(4) factors to inform the inquiry under s 79(2) (see Bevan & Bevan (2013) 49 Fam LR 387 at [83]-[89], [163], [169], [171]-[172]).
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in marital property should be different from those that then exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act (see Stanford at [37]-[40], [50]). Commonly, however, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of common use of their property (see Stanford at [42]; Bevan at [68]-[70], [82], [164]-[165]).
If and once determined it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The Court must necessarily identify and assess the parties’ contributions within the meaning of ss 79(4)(a)-(c) and then take account of the relevant matters referred to in
ss 79(4)(d)-(g) and 75(2) of the Act.
Existing property interests
Although many of the discrepancies in the evidence about the parties’ property interests dissipated during the trial, many did not. Some of the important factual disputes were not explored in cross-examination and so the ultimate state of the evidence was unsatisfactory. Some six months ago, the spouses were ordered to settle a joint balance sheet,[4] but failed to do so at any point before or during the trial. During final submissions, the husband sought an adjournment of the trial to try and settle a balance sheet with the wife, but his application was dismissed. If the spouses were unable to settle a balance sheet by the fourth day of trial, after the evidence was closed and final submissions were being made, they deserved no more time. The litigation was started more than two years ago and the parties were given about six months’ notice of the trial dates, so they had plenty of time within which to prepare. The following findings are therefore made on the best evidence available.
[4] Order 9(a) made on 30 August 2016
The findings about the value of the spouses’ shareholdings in their private corporations and family trust are drawn from the report of the single expert and any inconsistent evidence in the spouses’ financial statements is disregarded. Some observations about the single expert’s evidence are, however, warranted.
First, although the single expert valued the spouses’ corporate, trust, and partnership entities as at 30 June 2015, the spouses wanted the valuations to be treated as current.
Secondly, in establishing the values of the entities, it was agreed the net values calculated by the single expert should be adopted, which calculations factored in the spouses’ credit and debit loan accounts with the entities. The valuation methodology flowed from the spouses’ eventual agreement that:
(a)Their joint interests in the corporate, trust, and partnership entities would be severed;
(b)The husband would assume sole beneficial interest in the Wilcox Yates Family Trust (“the Family Trust”) and sole proprietorship of most of the corporations in which they are presently jointly interested;
(c)The spouse who surrenders his/her proprietary interest in an entity would have any debit loan account forgiven, the corollary of which was that the surrendering spouse would also forgive any credit loan account, which means the entities keep the benefit of money loaned to them by the spouses and cannot recoup any loans made to the spouses; and
(d)An order should be made in respect of the NSW Supreme Court suit, transferred to this Court, setting aside the statutory demand served by the husband on the third respondent.
Accordingly, the current values of the entities are taken to be:[5]
(a)Wilcox Yates Pty Ltd (“Wilcox Yates”) - $675,532
(b)The Family Trust - $2,195,191
(c)The third respondent - $398,514
(d)E1 Pty Ltd (“E1”) - $210,821
(e)E2 Pty Ltd (“E2”) - $384,781
(f)E3 P/L (“E3”) - $386,593
(g)F Pty Ltd - $1,529
(h)Wilcox Yates Partnership (“the Partnership”) - nil
[5] Exhibit A (pages 4-7)
In final submissions, the husband sought to argue a different figure should be adopted as the value of the Family Trust but his submission is rejected. His cross-examination of the single expert was limited to two issues: the likely future earnings of the Family Trust and the consequences for its current value if a loan of $990,000, assumed to have been made to it by the wife, was instead assumed to originate from the husband or the spouses jointly.[6] The first issue made no difference to its deemed current value. As to the second issue, the single expert said the assumed fact “might” make a difference, but it depended on how income and outgoings were accounted for in the financial records, about which he was unable to make further comment. The issue was taken no further so, in its current state, the evidence affords no basis upon which to vary the valuation arrived at by the single expert. In any event, it seems to make no difference. The Family Trust ostensibly owes both spouses significant sums so, regardless of the proportions in which the aggregated debts are owed by the Family Trust to the spouses, the Family Trust is still liable for the same overall amount of debt, all of which will be forgiven. The spouses agreed the husband will take-over the Family Trust and neither he nor the Family Trust will need to repay any loan amount to the wife. The entire value held within the Family Trust will rest with him.
[6] Exhibit A (pages 55-56); Husband’s second affidavit, para 3
The wife and a third party hold equal shares in F Pty Ltd. The husband is uninvolved. Although the wife’s shareholding is worthless, the corporation owes her $1,529 so her shareholding is ascribed that value.
The spouses are partners in the Partnership. It was operational from about 2002[7] and still exists,[8] though it is apparently now dormant. The spouses proposed mirror-image orders in respect of the Partnership, requiring the transfer of all partnership property to one of them and the dissolution of the Partnership.[9] Since the single expert concluded the Partnership has a negative value, the spouses’ shares in the Partnership are assumed to be of no value. Neither of them will derive any valuable property from the Partnership and neither will be indebted to the Partnership.
[7] Wife’s affidavit, paras 198-200; Husband’s first affidavit, paras 27, 40
[8] Exhibit A (Annex G)
[9] Exhibit W5, Order 6; Exhibit H6, Order 7
The findings about the identity and value of the spouses’ other real property, personal property, liabilities, and superannuation interests are drawn from the parties’ financial statements.
Despite the orthodox treatment of the parties’ superannuation interests separately from their property interests (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429), both parties urged the Court to treat their superannuation interests as property and that approach is adopted.
The wife’s existing assets, liabilities, and superannuation interests comprise:
No.
Assets
Value
Total
1
Shares in Wilcox Yates Pty Ltd (50 per cent)
337,766
2
Wilcox Yates Family Trust (50 per cent)
1,097,595
3
Shares in third respondent (49 per cent)
est. 199,257
4
Shares in F Pty Ltd (50 per cent)
1,529
5
Suburb D property (100 per cent)
2,500,000
6
B Bank Acc #...00 (100 per cent)
54,364
7
B Bank Acc #...28 (100 per cent)
273
8
B Bank Acc #...68 (100 per cent)
603
9
B Bank Acc #...20 (50 per cent)
5891
10
Telstra shares
4,978
11
IAG shares
1,425
12
Subaru car
30,000
13
German car
60,000
14
Household contents
6,000
15
Artwork
113,000
16
Cruising boat
300,000
17
Jewellery
30,000
Sub-total
4,742,681
4,742,681
Liabilities
18
Mr FF Yates
300,000
19
OO Pty Ltd
24,000
20
B Bank visa card
217
21
Westpac visa card
5,713
Sub-total
329,930
329,930
Net assets
4,412,751
Superannuation
22
L Super Fund
735,373
735,373
Net assets and superannuation
5,148,124
The husband’s existing assets, liabilities, and superannuation interests comprise:
No.
Assets
Value
Total
1
Shares in Wilcox Yates Pty Ltd (50 per cent)
337,766
2
Wilcox Yates Family Trust (50 per cent)
1,097,596
3
Shares in third respondent (51 per cent)
est. 199,257
23
Shares in E1 Pty Ltd (100 per cent)
210,821
24
Shares in E2 Pty Ltd (100 per cent)
384,781
25
Shares in E3 Pty Ltd (100 per cent)
386,593
26
Country II property
230,000
27
Suburb JJ plot
11,045
28
Share in horse
8,000
29
B Bank Acc #...86 (100 per cent)
1,334
30
B Bank Acc #...65 (100 per cent)
79
31
B Bank Acc #...46 (100 per cent)
557
9
B Bank Acc #...20 (50 per cent)
5891
32
CBA Acc #...32 (100 per cent)
3,688
33
CBA Acc #...23 (50 per cent)
147
34
CBA travel money card
149
35
Country II Bank Acc
1,265
36
Household contents
42,698
Sub-total
2,921,667
2,921,667
Liabilities
37
Debt due on Country II property
40,000
38
CBA Acc #...82
16,594
39
Mr PP
350,000
40
Mr QQ
19,000
41
BB Pty Ltd
100,000
42
Credit card debts
144,777
Sub-total
670,371
670,371
Net assets
2,251,296
Superannuation
43
L Super Fund
1,167,195
44
Company RR
1,344
Sub-total
1,168,539
1,168,539
Net assets and superannuation
3,419,835
Both spouses claimed liability for unpaid legal fees,[10] but those liabilities are disregarded because outstanding legal fees are ordinarily not taken into account as liabilities (see Chorn v Hopkins (2004) FLC 93-204 at [59]). There was no indication in the evidence as to whether any of the other personal loans for which they each claimed liability relate to paid legal fees (items 18, 19, 39, 40 and 41) and it would be wrong to speculate. I simply accept at face value the unchallenged evidence about their respective liabilities. They cannot be heard to complain because the issue was not agitated.
[10] Wife’s financial statement, para 53; Husband’s financial statement, para 53; Exhibit H5
Section 79(2)
Both spouses contended for orders to be made under Part VIII of the Act adjusting their proprietary interests, so they each implicitly considered an adjustment of their interests would be just and equitable. They were correct to reach that conclusion, though not necessarily for the reasons they each inferentially contended. Their joint affairs in Wilcox Yates, the Family Trust, the Partnership, and the third respondent all require disentanglement and they should not be left to invoke the provisions of the Corporations Act 2001 (Cth) and the Partnership Act 1892 (NSW) to achieve that outcome, since even more litigation would then likely ensue.
Sections 79(4) & 75(2)
Initial contributions
The husband believed the parties were in a de facto relationship from as early as mid-1998,[11] though they did not begin cohabitation until early 2001. The spouses adduced inconsistent evidence concerning their respective capital contributions at about that time and, unfortunately, not all of the discrepancies were addressed and tested during cross-examination. Acknowledging that limitation, the following findings are made on the balance of probabilities.
[11] Husband’s first affidavit, para 9
At or about that time, the wife introduced the following assets, liabilities, and superannuation interests to the relationship:
(a)An interest in a trust, which beneficially owned Suburb SS land worth between $770,000 and $800,000. In effect, it was unencumbered because the loan related to the property had by then been subsumed into the mortgage secured over the wife’s Suburb D property.[12]
(b)The Suburb D property in which the parties lived, which was purchased in 1999 by the parties together, albeit in the wife’s sole name, for $1,827,000 with an encumbrance of $1,750,000. The wife’s estimate of its higher gross value in 2001 is not reliable because she does not possess the qualifications or experience to offer such opinion evidence.[13] The debit balance of the loan was still only $1,750,000, despite incorporation of the loan related to the Suburb SS land.
(c)Shares with Company TT, worth about $50,000.[14]
(d)Two parcels of real property at Suburb UU, NSW valued collectively at about $990,000, but subject to mortgaged debt of $870,000.[15]
(e)A motor cruiser worth $190,000, bought with a loan of $120,000.[16] The husband conceded in cross-examination he wrongly alleged the loan was for $100,000. The loan was repaid by the wife by September 2000,[17] so it was unencumbered by the time of cohabitation.
(f)Miscellaneous items of personal property valued at between $38,000 and $48,000.[18]
(g)A superannuation interest with AMP, then valued at between $150,000 and $180,000.[19]
[12] Wife’s affidavit, paras 35(a), 36(a), 39(a), 40(a)
[13] Wife’s affidavit, paras 39(b), 40(a), 82, 85; Husband’s first affidavit, para 30
[14] Wife’s affidavit, paras 35(b), 39(e)
[15] Wife’s affidavit, paras 39(c), 39(d), 40(a)
[16] Wife’s affidavit, paras 39(f), 134; Husband’s first affidavit, para 34
[17] Wife’s affidavit, para 182
[18] Wife’s affidavit, paras 35(g), 35(h), 39(h), 39(i)
[19] Wife’s affidavit, paras 35(f), 39(g)
The wife therefore injected about $1.45 million in net capital. It is impossible to be more precise given the unsettled state of the evidence.
At about the same time, the husband introduced the following assets, liabilities, and superannuation interests to the relationship:
(a)A parcel of real property at Suburb UU, NSW worth about $600,000,[20] which the husband admitted in cross-examination was encumbered by mortgaged loan of just under $400,000.
(b)Shares in E1, E2, E3, the third respondent, and J Pty Ltd (“JPL”). The dispute over the value of the shares is addressed below.
(c)Shares in VV Pty Ltd, WW Pty Ltd, and XX Pty Ltd,[21] which the husband did not assert had any material value.[22]
(d)Miscellaneous items of personal property valued at perhaps as much as $150,000, but also miscellaneous debts of about $60,000.[23]
(e)A superannuation interest worth between $35,000 and $50,000.[24]
[20] Wife’s affidavit, para 41(a)
[21] Wife’s affidavit, paras 154-157, 248; Husband’s first affidavit, para 25
[22] Husband’s first affidavit, para 17
[23] Wife’s affidavit, paras 41(g), 41(j), 42; Husband’s first affidavit, para 17
[24] Wife’s affidavit, para 41(h); Husband’s first affidavit, para 17
The husband alleged his equity in E1 and the third respondent was valued at about $2,582,000 in 2002, which the wife disputed.[25] In cross-examination, he admitted his valuation of $2,582,000 was only an estimate (being about 40-50 per cent of annual turnover), which figure he transposed from an asset schedule he prepared and furnished to a bank to support a loan application made by the spouses in September 2002.[26] However, he was impelled to concede the taxation returns submitted by all of those corporations (save for the third respondent, about which he was not asked) for the financial years ended June 2001 and June 2002 revealed quite different details about their financial fortunes.
[25] Wife’s affidavit, paras 37, 41, 52-54; Husband’s first affidavit, paras 17, 25
[26] Exhibits W1, H3
In June 2001, E2 had an asset surplus of only about $40,000, but the liabilities of E1, E3, and JPL exceeded their assets by a collective margin of well over $1 million.[27] Although the husband alleged some $960,000 of those liabilities were loans owed to him, they were still debts of the corporations.
[27] Wife’s affidavit, para 53; Exhibit W4, Tab 12
The more accurate analysis of the situation in early 2001 was that the husband enjoyed equity of about $40,000 in E2, which increased to $166,000 in 2002, but otherwise, he only had personal assets in the form of choses in action against the other corporations. Significantly, the debts owed to him by the corporations would probably not have been realised if called-in because the profit they then generated was very modest at best. In 2000, E2 showed annual profit of less than $12,000 and the other corporations showed losses.[28] The corporations often generated losses throughout the marriage, which losses the spouses used to reduce their tax.[29]
[28] Wife’s affidavit, para 52
[29] Wife’s affidavit, para 464
The husband admitted he always controlled the corporations. Accordingly, he had the power to adduce evidence about their affluence, but failed to do so. He knew the evidence was relevant because he belatedly prepared a schedule of historical corporate income, but he inexplicably omitted to include the operating expenses within the schedule to offset the income, so all he disclosed was gross revenue – not profit.[30] For example, he asserted the income of E2 in 2000 was $4,139,362 (though the wife contended $4,169,362), but he failed to disclose its expenses that year were $4,157,697, and so the annual profit was less than $12,000.[31]
[30] Husband’s second affidavit, para 21, Annex K
[31] Wife’s affidavit, para 52
Allowing the husband credit for the equity in E2 of $166,000, but no credit for the choses in action he held against the other corporations which were probably unenforceable, he therefore injected total net capital of about $500,000. Again, it is impossible to be more precise given the unsettled state of the evidence.
On that analysis, the wife’s capital contributions exceeded the husband’s by about $950,000.
Contributions during the relationship
Until January 2009, the wife was in full-time employment earning handsome income. At that point in time she abandoned her corporate career and concentrated on consultancy and charity work. Presently, her income is about $30,000 per annum.[32]
[32] Wife’s affidavit, paras 43-48, 460; Husband’s first affidavit, paras 22-24, 84
Since at least the time the spouses formed their relationship, the husband has been the sole director of and sole shareholder in E1, E2, and E3. He always occupied himself in the operation of the businesses undertaken by those and other corporations in which he has an interest. His annual income fluctuated greatly over the years but, on average, it was substantially less than the wife’s annual income up until at least recent times. On average, it was about one-half.[33] Although the wife’s income was greater, the values of E1, E2, and E3 are now greater than before (as they now have a collective value of about $975,000),[34] meaning the husband probably allowed those corporations to retain some profit derived from the business he superintended for them and did not draw as high an income from them as he perhaps could have. But that has only happened in more recent times because at least E1’s liabilities still exceeded its assets in 2012.[35]
[33] Wife’s affidavit, paras 54, 460; Husband’s first affidavit, paras 20-21, 25-26
[34] Exhibit A
[35] Wife’s affidavit, para 174
The wife contended in her Case Outline document that the husband “did not apply his income to the economy of the family unit”, but the submission is rejected for lack of evidentiary foundation. The proposition was not put to the husband in cross-examination for his approbation or rebuttal, as it should have been if it was pressed, and the wife adduced no evidence to prove the husband’s income was not used for the benefit of the family. A spouse’s income should be presumed to have been used for the benefit of the family unit, unless proven otherwise (see Marriage of Parshen (1996) 21 Fam LR 199 at 205).
After marriage, the spouses mingled their money in a variety of banking accounts and they jointly established several entities to pursue their common financial goals, including:[36]
(a)Wilcox Yates, of which the spouses are the directors and equal shareholders, and which was instituted as the trustee of the Family Trust;
(b)The Partnership, of which the spouses are the equal partners; and
(c)L Superfund (“the Super Fund”), of which the spouses are the trustees and members.
[36] Wife’s affidavit, paras 55, 198-200, 209-210, 250, 327-328, 467; Husband’s first affidavit, paras 27-28, 40
The spouses engaged in numerous commercial ventures through those entities, but the largest was a residential and retail sub-division in Victoria. The project became known as “Project I” and was pursued through a partnership (now called “the I Partnership”) in which Wilcox Yates initially had a one-third proprietary interest as trustee for the Family Trust, but now has a one-half interest as trustee for the Family Trust. E3 is separately engaged by the I Partnership to provide project management services associated with the land’s development. The husband is therefore integrally involved in the project, both through Wilcox Yates and E3. The project originally began in 2003 and is expected to culminate by early 2018.
During the spouses’ relationship, extensive renovations were performed by E2 to the Suburb D property owned by wife, in which the spouses lived. The renovations took years to complete and cost nearly $3 million. After separation, the property was sold for considerable profit. The renovations were performed by E2 at or about cost price, with only marginal mark-ups to cover overheads. The husband asserted he was not paid for the work he personally superintended for E2 upon the property and, while the wife doubted the veracity of that evidence, she could not contradict him. There was no proper basis to reject the husband’s evidence as false.
An attempt was made by both spouses to analyse particular deposits made to various bank accounts over time, but it was a futile exercise to consider individual transactions in isolation from their overall conduct. The wife admitted in cross-examination that money “wash[ed]” in and out of the accounts, making it “near impossible” to reconcile financial transactions, and the husband agreed with the proposition put to him in cross-examination that “money went all over the place”. Attempts to audit the monetary transactions between the spouses and the corporate structure they built around them were misguided. Instead, the process of property adjustment calls for a discretionary and holistic value judgment (see Quinn v Quinn (1979) FLC 90-677 at 78,615; Garrett v Garrett (1984) FLC 91-539 at 79,359, 79,372; Davey v Lee (1990) 13 Fam LR 688 at 689).
The wife contended the spouses shared the homemaking duties equally, about which she was not challenged.[37] The wife’s son lived with the spouses and the husband’s children visited their household regularly. The spouses each devoted time to the care and supervision of the children, though the wife took on a larger share of that responsibility. The wife also helped care for the husband’s ill mother for some time.[38]
[37] Wife’s affidavit, para 519
[38] Wife’s affidavit, paras 520-533
Additional capital contributions
In 2009, the husband received an inheritance from the estate of his late mother, which amounted to $1,761,276. From that money, he deposited $906,276 into the spouses’ joint bank account, deposited $255,000 into his superannuation account, and loaned the remaining $600,000 to another entity involved in Project I.[39]
[39] Wife’s affidavit, paras 164-168; Husband’s first affidavit, paras 46(i), 46(ii), 46(iii)
Of the money deposited to the spouses’ joint bank account, some was used to pay E2 for renovation work completed on the former matrimonial home, some was used to pay outstanding credit card accounts, and some was used to buy a car.[40]
[40] Wife’s affidavit, para 169; Husband’s first affidavit, para 46(vi)
Of the money loaned, the balance and interest was repaid in 2010, whereupon the money was split and deposited into the husband’s superannuation account, the husband’s bank account, and the third respondent’s bank account.[41]
[41] Wife’s affidavit, para 168; Husband’s first affidavit, para 46(iv), 46(v)
The more recent influx of funds from the husband’s inheritance in 2009 tended to redress the imbalance of the spouses’ initial capital contributions and the wife’s greater income prior to that time.
In 2013, the husband won $10,000 with a lotto ticket, some of which was given to the spouses’ children and the rest of which the husband retained.[42]
[42] Wife’s affidavit, paras 170-171
Post-separation transactions
Each spouse made veiled complaints about the money withdrawn from the family economy and spent by the other after their separation, but pursuit of the issue was unproductive.
In December 2014, the husband unilaterally withdrew $1 million from the spouses’ joint bank account but, on the wife’s application, an interim order was made in March 2015 compelling his repayment of that sum to the account, with which he complied.[43]
[43] Order 3 made on 11 March 2015; Wife’s aff, para 541; Husband’s first aff, paras 63-64, 75
Several interim orders made in March 2015, with the spouses’ consent,[44] required money of designated amounts to be moved within their corporate structure. The wife’s complaints about the husband’s use of money in the few preceding months must have merged in those consent orders.[45] She too withdrew money from their joint account before the orders. In November 2014, she used money from the joint account to pay the deposit on the purchase of her current home.[46] Both spouses were getting on with their lives.
[44] Interim orders made on 11 and 30 March 2015
[45] Wife’s affidavit, paras 543-549, 620; Husband’s first affidavit, paras 75-77
[46] Wife’s affidavit, para 563
The husband complained about the wife’s later expenditure, in or about May 2015,[47] which included the purchase of a car, payment of credit card debts, payment of rent, and an injection of funds to the third respondent. None of the expenditure was extraordinary and, even if it was, the husband did not contend such expenditure was in breach of the interim injunctions made in December 2014 and March 2015.[48] The husband’s wider complaint about their disparate post-separation expenditure was left unexplained.[49] Similarly, the evidentiary basis for his final submission to the effect the wife had spent about $1.54 million since separation was not explained, much less critically analysed.
[47] Husband’s first affidavit, paras 73, 78
[48] Orders made on 8/12/14, 11/3/15, and 30/3/15
[49] Husband’s first affidavit, para 74
In June 2016, further interim orders were made permitting the wife to use her solicitors’ controlled money account to pay stamp duty levied on the contract for the purchase of her current home in Suburb D.[50] She also used money from the controlled money account to complete the purchase of the home in July 2016.[51]
[50] Interim orders made on 28/6/16; Wife’s aff, paras 567(b), 568; Husband’s first aff, para 80
[51] Wife’s affidavit, paras 567(c), 568
In October 2016, the spouses agreed to pay an amount of $283,831 from the controlled money account to the I Partnership on behalf of the Family Trust.[52]
[52] Wife’s affidavit, paras 567(d), 568
No proper basis was demonstrated for either the notional “add-back” of spent resources or an adjustment to the spouses’ proportional entitlements to available property on account of post-separation expenditure.
The future
The wife is 58 years of age and in reasonably good health.[53]
[53] Wife’s affidavit, para 2
The husband is 60 years of age and in good health.[54]
[54] Wife’s affidavit, para 3
Both spouses have adult children, but they are financially independent.[55]
[55] Wife’s affidavit, para 4
The wife will likely continue to earn about $30,000 per annum for the remainder of her career. Although she demonstrated the capacity to earn a much higher income in the past, she withdrew from corporate enterprise over eight years ago and, given her age, she is unlikely to resurrect her corporate career. In any event, she was not challenged with the proposition she could.
The husband deposed to having no income at all, save for modest rent generated by his Country II property.[56] That could be so, but it is an incomplete picture of his financial circumstances. E3 continues to supervise the Project I, for which service it is paid and through which the husband derives personal benefit. The husband conceded E3 was due $115,500 from the I Partnership, of which sum he expected personal benefit of $30,000.[57] E3 also pays nearly $1,500 each week to meet the husband’s private expenses.[58]
[56] Husband’s financial statement, paras 9-16
[57] Husband’s financial statement, para 57
[58] Husband’s financial statement, para 18
The Project I is due to complete by early 2018. The project is being developed in two tranches: one residential and the other commercial retail. The contract for sale of the residential portion to YY Pty Ltd is due to complete in April 2017 and, allowing for payment of outstanding expenses and the possible retention of some money as working capital, the Family Trust will be then due to receive a distribution of between $850,000 and $1 million. The construction of the retail section is due to be completed by ZZ Pty Ltd by early 2018 and the I Partnership has not yet decided whether the freehold property will be sold immediately or instead leased and then sold about 12 months later. Its sale is expected to generate profit for the Family Trust of at least $2 million and perhaps as much as $2.45 million (being one-half of projected profit of $4.9 million).[59]
[59] Exhibit W2
The I Partnership is already indebted to the Family Trust for $1.55 million,[60] so the expected receipt of between $2.85 and $3.45 million within the next 12-24 months will result in taxable net profit of not less than $1.3 million and perhaps as much as $1.9 million. None of that projected taxable profit was taken into account by the single expert in assessing the value of the Family Trust.
[60] Wife’s affidavit, paras 359-360; Exhibit W4, Tab 118
Conclusions and orders
The spouses’ contributions should be regarded as broadly equivalent. They each worked as hard as the other for their mutual advancement. The wife’s greater capital contributions and her contributions of higher income throughout the marriage were offset by the husband’s infusion of capital from his inheritance in 2009. Neither gleaned an advantage through their post-separation expenditure or the use of their capital and resources.
The husband contended for an overall equal division of their property and superannuation interests, though the force of his submission abated when he advocated for certain orders (under which he would wrest control of the corporate entities and the Super Fund from the wife), regardless of whether they resulted in an equal division of property. His demand for those orders, irrespective of their financial implications, was an unhelpful distraction.
The wife contended for her entitlement to 65-70 per cent of the spouses’ property and superannuation (which correspondingly meant 30-35 per cent for the husband), though she admitted the only reason for disparity between their current entitlements was the differential in their initial capital contributions. She contended the differential did not erode over time and should still sound in her much greater entitlement (for which proposition she cited Pierce v Pierce (1999) FLC 92-844). The submission is rejected. The spouses’ disparate initial capital contributions have to be contextualised and weighed against other contributions they subsequently made over the duration of their relationship because the later contributions, including the inheritance received by the husband, also deserve appropriate weight.
The wife has an overall entitlement to 55 per cent of the spouses’ property and superannuation interests (which correspondingly means 45 per cent to the husband). Although their overall financial and non-financial contributions were equivalent, the income the husband expects to soon generate upon completion of the Project I warrants a modest adjustment in the wife’s favour (ss 79(4)(e), 75(2)(b), and 75(2)(o)). The five per cent adjustment amounts to about $428,398, which is a relatively large sum of money, but it represents about only one-third of the least amount the husband expects to receive through the Family Trust within the next 12-24 months (and excludes the income he additionally expects to generate through E3 working on the Project I). The husband would not be surprised by the magnitude of the adjustment because, at points during the trial, he conceded his entitlement could be as low as 45 per cent, though he wanted 50 per cent.
Ultimately, the spouses only clashed over five principal aspects of the proposed property adjustment orders, which were:
(a)The apportionment of their superannuation interests – they each wanted to retain their own superannuation interest, together with the other’s superannuation interest, leaving the other with none;[61]
(b)The transfer of ownership of partnership property upon dissolution of the Partnership – they each wanted the property;[62]
(c)Who would take control of Wilcox Yates – they both wanted it;[63]
(d)Who would take control of the third respondent – they both wanted to give it to the other, though the wife’s proposed orders were inconsistent;[64] and
(e)The payment of a cash adjustment to the wife – the wife wanted $1 million and the husband opposed any cash adjustment.[65]
[61] Exhibit W5, Orders 10-11, 18(c); Exhibit H6, Orders 5(k), 11-12
[62] Exhibit W5, Order 6; Exhibit H6, Order 7
[63] Exhibit W5, Orders 7, 18(f); Exhibit H6, Orders 5(i), 8, 14
[64] Exhibit W5, Order 8, 18(g); Exhibit H6, Orders 4, 10
[65] Exhibit W5, Order 3
As for the Partnership and its property, so far as the evidence goes, there is no property for either of them to have. The dispute was pointless, which is presumably why it was not addressed as an issue in final submissions. The orders will simply provide for dissolution of the Partnership. If, despite the absence of evidence about it, there is property to be distributed then it will be distributed between the spouses in accordance with their partnership shares.
As for Wilcox Yates, the husband should assume ownership and control. It is the trustee for the Family Trust and it was uncontroversial the husband should take the benefit of the Family Trust.[66] It would be an odd result for the husband to have exclusive beneficial interest in the Family Trust, but for the wife to have exclusive control of the corporate trustee. The only salient interest of the Family Trust is in the I Partnership, about which project the wife changed her mind and disclaimed any interest.[67]
[66] Exhibit W5, Order 4(g)
[67] Exhibit W5, Orders 4(f), 9
As for the third respondent, the wife should assume ownership and control. Although the husband brought his shareholding in that corporation into the relationship, the wife is currently a director of and shareholder in it and she is employed by it.[68] In 2011, the husband told the wife he wanted nothing more to do with the corporation and so the wife’s brother was appointed as a third director. Since then, the wife and her brother have run the corporation and the husband has had no involvement.[69]
[68] Wife’s affidavit, para 47, 298-305
[69] Wife’s affidavit, paras 309-312; Husband’s first affidavit, paras 36-38
If the wife retains the real and personal property she currently possesses (items 4-17), the spouses’ shares in the third respondent (item 3), and her own liabilities (items 18-21), she would have assets with a net value of $3,176,647.
If the husband retains the real and personal property he currently possesses (items 9, 26-36), the spouses’ shares in the other corporations (items 1, 23-25), the spouses’ beneficial interest in the Family Trust (item 2), his own liabilities (items 37-42), and his extraneous superannuation interest with Company RR (item 44), he would have assets with a net value of $3,488,745.
That would only then leave for consideration the spouses’ superannuation interests in the Super Fund (items 22 and 43), the combined value of which is $1,902,568.
Each party sought the entirety of the other’s superannuation interest. If the wife retained only her own superannuation interest (item 22), she would be left with property and superannuation with a net value of $3,912,020, which is only 45.66 per cent of the total property and less than her proper entitlement of 55 per cent. On the other hand, if she retains her own superannuation interest and also acquires the husband’s superannuation interest (item 43), she would be left with property and superannuation with a net value of $5,079,215, which is 59.28 per cent and exceeds her proper entitlement.
Accordingly, in order to ensure the wife receives 55 per cent of the net property and superannuation, the alternatives are to either:
(a)Split the husband’s superannuation interest in the Super Fund, so that the wife receives some, but not all, of it;
(b)Order that the parties retain their own superannuation interests, but order the husband to pay a large cash adjustment to the wife; or
(c)As a hybrid solution, split part of the husband’s superannuation for the wife and order the husband to pay her a smaller cash adjustment.
It is superficially tempting to leave the spouses’ superannuation interests within the Super Fund undisturbed, but that option is unlikely to suit the parties. Importantly, the wife is aggrieved about the manner in which past contributions made to the Super Fund were allocated between their superannuation accounts. She feels the allocations unfairly favoured the husband, meaning his superannuation interest is now much larger than hers.[70] Additionally, the assets of the Super Fund are apparently not all in liquid form, which prevents the spouses from simply rolling-out their existing superannuation interests to other compliant superannuation funds. They will need to act to convert all Super Fund assets to cash so that their superannuation interests may be segregated, but the eventual net value of the assets is unknown and, if left to their own devices as trustees of the Super Fund, the spouses will likely remain deadlocked about the allocation of the net assets between their superannuation interests.
[70] Wife’s affidavit, paras 467-473, 610-611
To avoid the probable prolongation of the parties’ dispute beyond this litigation, the best option is to order the spouses to act, in their capacity as trustees of the Super Fund, to sequentially: crystallise the Super Fund assets, deposit the net proceeds of any sales into the Super Fund, split 100 per cent of the husband’s superannuation interest and transfer it to the wife so it is aggregated with her own superannuation interest in the Super Fund, then split 45 per cent of the wife’s enlarged superannuation interest and transfer it to the husband. The overall result will be their division of the Super Fund in 55/45 per cent shares once its assets are converted to liquid form. They would both then retain superannuation interests of more equivalent value and the cash adjustment payable by the husband to the wife would not be as large.
The superannuation splitting orders are possible because the spouses agreed upon the current value of their respective superannuation interests, which agreement is the basis for the necessary findings about the current value of those interests (s 90MT(2)(b)). The spouses, as trustees of the Super Fund, have also been accorded procedural fairness as required by the Act (s 90MZD) and the Family Law Rules 2004 (Cth) (rule 14.06), since they both proposed superannuation splitting orders, albeit to the extent of 100 per cent of the other’s interest. They each had the opportunity to make submissions about alternate superannuation splitting orders, since they knew their overall property settlement proposals were ranged between as little as 15 per cent and as much as 25 per cent apart and must therefore have realised it was an option for their superannuation interests to be split in percentage proportions other than either zero or 100 per cent.
The superannuation splitting orders in the proposed form would, however, mean that the husband must still pay a cash adjustment to the wife. Given the property they each do and will retain ($3,176,647 + $3,488,745 = $6,665,392), the husband must pay $489,319 to the wife to ensure she receives 55 per cent of that property (3,176,647 + $489,319 = $3,665,966 = 55 per cent x $6,665,392).
Fortuitously, the husband will soon have access to much more cash than that. On present estimates, upon completion of the sale of the residential development to YY Pty Ltd in April 2017, the I Partnership is due to distribute to the Family Trust at least $850,000. Vested with exclusive control of Wilcox Yates and the Family Trust, the husband will be at liberty to use that money as he sees fit.
The orders will therefore make provision for:
(a)The crystallisation of the Super Fund assets and the re-allocation of the spouses’ superannuation interests in 55/45 per cent shares in favour of the wife by way of splitting orders, following which the wife shall roll her interest out of the Super Fund, resign as a trustee, and transfer to the husband her interest in two corporations named G1 Pty Ltd and G2 Pty Ltd, since they apparently fall within the beneficial embrace of the Super Fund;[71]
[71] Exhibit A (page 7)
(b)Subject to the husband’s payment of $489,319 to the wife within three months, which period will give him sufficient time within which to raise the money, his exclusive acquisition of the spouses’ shares in Wilcox Yates and interests in the Family Trust (items 1 and 2);
(c)The husband’s retention of the real and personal property he currently possesses (items 9, 26-36), the spouses’ shares in other corporations (items 23-25), his own liabilities (items 37-42), and his extraneous superannuation interest with Company RR (item 44);
(d)The wife’s retention of the real and personal property she currently possesses (items 4-17), the spouses’ shares in the third respondent (item 3), and her own liabilities (items 18-21);
(e)The spouses’ closure of the joint B Bank account and the distribution of its credit balance in equal shares (item 9), as the spouses’ equal shares in that account have already been factored in to the amounts they each retain;
(f)Dissolution of the Partnership;
(g)The husband’s removal of the caveat over the wife’s Suburb D home (item 5), about which they agreed;[72]
(h)The husband’s removal of encumbrances over the wife’s cars (items 12 and 13), about which they agreed;[73]
(i)The forgiveness of any debit loan accounts under which the spouses are indebted to any of their corporate entities (implemented by injunctions and indemnities), given the husband’s express agreement with the wife’s proposal to that effect;[74]
(j)The reciprocal forgiveness of any credit loan accounts with their corporate entities (implemented by injunctions); and
(k)An order setting aside the husband’s statutory demand served upon the third respondent, which is preferable to the husband’s proposed order requiring his withdrawal of the suit instituted in the Supreme Court of NSW.[75] The third respondent instituted the Supreme Court proceedings, so the husband has no power to “withdraw” them. Annulment of the husband’s statutory demand under the provisions of the Corporations Act immediately terminates that suit.
[72] Exhibit W5, Order 2: Exhibit H6, Order 3
[73] Exhibit W5, Orders 16, 17; Exhibit H6, Orders 15, 16
[74] Exhibit W5, Order 20
[75] Exhibit H6, Order 4
The orders provide for the husband to retain his shareholding in J Pty Ltd, as both spouses proposed.[76] The shareholding was not included in the schedule of the husband’s assets because he did not disclose it as a current asset and, in any event, the single expert concluded it had nil value.[77]
[76] Exhibit W5, Order 4(b); Exhibit H6, Order 5(b)
[77] Exhibit A (page 5)
The spouses both proposed that the husband assume sole ownership of the shareholding in I Pty Ltd,[78] which is the bare trustee of the I Partnership.[79] That order is made.
[78] Exhibit W5, Order 4(f); Exhibit H6, Orders 5(j), 13
[79] Exhibit A (page 6, Annex K); Wife’s affidavit, paras 353-355
The husband sought an order requiring the wife’s resignation from the committee of management for the I Partnership,[80] but the order is unnecessary. The husband sits on the committee as the representative of Wilcox Yates, as trustee for the Family Trust, and the orders require the wife’s surrender of interest in both Wilcox Yates and the Family Trust upon payment to her of the cash adjustment.
[80] Exhibit H6, Order 14
Orders to that effect represent a just and equitable division of the spouses’ property and superannuation interests.
An Application in a Case filed by the husband just before commencement of the trial will be dismissed, which dismissal the spouses jointly invited.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 21 March 2017
Associate:
Date: 21 March 2017
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