ZABEK and ZABEK
[2016] FCWA 9
•19 FEBRUARY 2016
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: ZABEK and ZABEK [2016] FCWA 9
CORAM: DUNCANSON J
HEARD: 21 FEBRUARY 2014
24-28 FEBRUARY 2014
14-18 JULY 2014
23 JULY 2014
18-20 MAY 2015
23 NOVEMBER 2015
DELIVERED : 19 FEBRUARY 2016
FILE NO/S: PTW 137 of 2008
BETWEEN: MR ZABEK
Applicant
AND
MRS ZABEK
Respondent
Catchwords:
PROPERTY - where there was a lengthy marriage - where the parties disagree as to the date of separation - where there was a lengthy period between separation and trial - where both parties allege financial misconduct on the part of the other - consideration of losses sustained as a consequence of conduct of parties and treatment of those losses - where the husband contravened the superannuation legislation - where he forged the wife's signature on documents - where the wife borrowed significant funds from the then second respondent with whom she was in a relationship - consideration of the financial agreement entered into by the wife and the second respondent - where it is just and equitable to make a property settlement order - where assessment of contributions favours the husband - adjustment to wife for s 75(2) factors
Legislation:
Family Law Act 1975 (Cth), s 75(2), s 79
Family Court Act 1997 (WA), s 205ZN
Evidence Act 1906 (WA)
Superannuation Industry (Supervision) Act 1993 (Cth)
Superannuation Industry (Supervision) Regulations 1994 (Cth)
Category: Reportable
Representation:
Counsel:
Applicant: Mr R Hooper SC
Respondent: Mr M Berry (as he then was) thereafter Dr A Dickey QC
Solicitors:
Applicant: Carr & Co
Respondent: K G Sorensen
Case(s) referred to in judgment(s):
Biltoft v Biltoft (1995) FLC 92-614
Browne v Green (1999) FLC 92-873
C and C [1998] FamCA 143
Chorn and Hopkins (2004) FLC 93-204
Dougherty v Dougherty (1987) 163 CLR 278
Kowaliw and Kowaliw (1981) FLC 91-092
Stanford v Stanford (2012) 247 CLR 108
Waters and Jurek (1995) FLC 92-635
Watson & Ling [2013] FamCA 57
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
INTRODUCTION
1[Mr Zabek] (“the husband”) and [Mrs Zabek] (“the wife”) were married for 30 years. They have two adult children.
2During their marriage they accumulated significant assets.
3The parties disagree as to the date of separation. In about 2002 they began to lead separate lives, however, they continued to enjoy a reasonably amicable relationship. Their finances remained intermingled.
4In 2007 the wife informed the husband she wished to separate their finances and she sought a divorce. The parties were unable to agree about the division of their property and the husband commenced these proceedings in 2008.
5A number of significant events occurred in relation to the parties’ property following the commencement of proceedings. Both parties allege financial misconduct on the part of the other.
6The wife was in a relationship with [Mr Ambrosi] who lent her substantial sums of money. He was joined as the second respondent in the proceedings.
7The parties’ dispute continued such that the Court was required to make a number of interim orders in relation to financial matters.
8At the commencement of the trial there were difficulties in identifying the existing interests of the parties in their property. With the passage of time, some of those difficulties have been resolved partly, because property has been sold and financial statements prepared.
9The parties’ property includes two self-managed superannuation funds. In respect of one, both parties are members and in respect of the other, the husband is a sole member. The parties have other interests in property in their names and through various entities.
The orders sought by the husband
10The orders sought by the husband are contained within his Amended Minute of Final Orders Sought filed 18 May 2015. They are that certain assets and properties be transferred from the [Fund A Superannuation Fund] (“Fund A”), being the fund of which both parties are members, to the account of the husband in the [Fund B Superannuation Fund] (“Fund B”) being that of which he is the sole member. The properties to be transferred are those at 151 and 153 [Street A, Suburb A].
11The husband proposes that the property at [Suburb B] be transferred to a complying superannuation fund nominated by the wife. Thereafter, Fund A should be wound up with the balance of any assets in the fund divided equally between the parties.
12The husband proposes that the parties otherwise retain the assets and liabilities in their respective names, save and except for his personal effects and some chattels which he seeks to have provided to him.
13The husband proposes the property of the parties be divided 60% to him and 40% to the wife. The effect of the orders sought by him is that the percentage division would be 58% to him and 42% to the wife.
The orders sought by the wife
14The orders sought by the wife are contained within a Minute of Proposed Final Orders for Trial filed 17 July 2014. The orders sought therein, seeking the sale of items of real estate and the disbursement of the sale proceeds to a superannuation fund nominated by the wife, have been superseded by events, in that certain of those properties have now been sold.
15At the conclusion of the trial an updated minute of orders sought was not provided by the wife. Senior counsel for the wife said she does not wish to acquire the Suburb B property. She seeks to retain the assets and liabilities in her name and otherwise to receive funds such that the property of the parties be divided 55% to her and 45% to the husband.
THE PARTIES AND THEIR EVIDENCE
16The trial commenced in February 2014 and concluded in May 2015. The evidence was re-opened on 23 November 2015. The hearing of this matter lasted 16 days over a period of 21 months up to and including the application to re-open. There were 93 Exhibits. I have considered all of the evidence very carefully. In these reasons I have not referred to all of the evidence as I do not consider it necessary to do so. Much of the evidence has been superseded by the passage of time and subsequent events. If I do not refer to the evidence of a particular witness or part of it, it should not be assumed that I have ignored or overlooked it.
17Overall, I found the husband to be a reliable witness. He had a good understanding of events. His position was that he continued to manage the property of the parties, including their superannuation funds, without assistance from the wife and while obstructed by the wife, either alone or acting with Mr Ambrosi. There is justification for the husband’s complaint that the wife’s actions, supported by Mr Ambrosi, caused him to fear she would jeopardise his ability to manage the parties’ finances to meet the heavy commitments of the various entities and properties.
18I do not consider the husband attempted to remove funds from the parties’ pool of property to the exclusion of the wife. What I consider he did do was to ensure that he was in control of the parties’ property. To do this he forged the wife’s signature on various documents, assisted by his office manager [Ms Smith]. Further, to meet the many expenses of the parties’ entities, he moved funds from Fund A to entities controlled solely by him to enable him to share trade and manage the parties’ finances.
19The husband gave his evidence in a forthright manner. At times he showed some distress and frustration. In many aspects, where the husband’s evidence conflicts with that of the wife, I prefer that of the husband. Those aspects include where the wife’s evidence was supported by Mr Ambrosi.
20The wife complains, also with justification, that she was not kept informed by the husband of his dealings with the parties’ wealth. It seems the more she sought to protect her position, the more threatened the husband became. It is understandable that the wife was concerned that the husband had moved over $1 million from Fund A to an account in the name of Ms Smith. In dealing with the parties’ joint superannuation funds in that and other ways the husband contravened the superannuation legislation. The husband was inadequately serviced by accountants in whom the wife was unable to place any faith.
21The wife’s position was that the husband controlled the parties’ wealth and she was left without funds for her support. Mr Ambrosi advanced her significant funds, which were the subject of loan agreements. With the advice of Mr Ambrosi and her lack of information she had no trust in the husband’s actions. Over time her distrust grew and with the support of Mr Ambrosi she did not cooperate with the husband’s attempts to reduce debt.
22As a witness the wife was polite at all times and sought to give the impression that she was being cooperative in cross-examination. She was, however, unhelpful in that on many occasions she said she could not remember significant events and required to be shown documents in support of questions before she would answer. She was evasive when answering questions in relation to the loans from Mr Ambrosi and her relationship with him. I consider her evidence was less than truthful in relation to the Suburb D property.
23When asked about her travel in the last 12 months with reference to her Qantas Frequent Flyer screen shot the wife was particularly unhelpful and uncooperative. She was unable to recall her travel and only conceded she had undertaken a particular journey if she was shown the Qantas document. She was unable to recall overseas trips including those to Europe.
24The wife’s evidence in relation to the funds provided by Mr Ambrosi and her financial agreement with him was unsatisfactory.
25Mr Ambrosi became the second respondent in the proceedings, seeking to recover funds provided by him to the wife. These funds were initially secured over a property owned by the wife and subsequently, over a property owned by both parties. Mr Ambrosi gave evidence before the wife. His evidence in relation to personal loans to the wife was at times unsatisfactory, for example, in relation to a tax invoice issued to the wife.
26Similarly, his evidence in relation to the financial agreement with the wife and his relationship with her, was unsatisfactory.
27Mr Ambrosi’s evidence in relation to the sale of the [Suburb D] property was unconvincing. He said he could not remember if the husband wanted to sell the block in August 2008 and then he vaguely remembered an offer for the property. In cross-examination he was evasive and he prevaricated.
28Mr Ambrosi denied saying he would buy the block for $1.2 million and I did not believe his evidence in this respect.
29Mr Ambrosi answered questions with a question and he was unable to recall important matters. He was an unimpressive witness.
30Accountants gave evidence and were cross-examined. The evidence of these professionals was of assistance, although some of their evidence has been superseded by events in that financial statements have been prepared and contingent liabilities have crystallised.
31Ms Smith is a close friend of the husband. She has assisted him for many years and was supportive of him. She admitted she had witnessed signatures of the parties, including that purporting to be of the wife, when the wife was not present. Notwithstanding that, I consider Ms Smith gave honest evidence which was reliable.
32[Ms Baden] gave evidence in relation to the wife meeting Mr Ambrosi. She is a friend of the husband and was not well disposed towards the wife. She was keen to make speeches and be heard.
33In her oral evidence Ms Baden said “the wife said [Mr Ambrosi] is a big fish and I am going to hook him.” She gave evidence in relation to a pink diamond which the wife apparently owned. I do not consider Ms Baden’s evidence was entirely reliable, but little turns on it.
34[Ms Dubicki] is a friend of the wife who contradicted Ms Baden’s evidence regarding the pink diamond. I am not convinced she was present when the conversation regarding the pink diamond took place, but again, little turns on it.
35The parties’ sons [Paul] and [Thomas] gave oral evidence and were cross-examined. The husband found this difficult. He was visibly distressed and left the Court room. Both sons gave honest evidence. They were cautious in their replies and appeared uncomfortable. They had received gifts from the parties.
36[Mr Genovese] is a real estate agent who was engaged by the parties to sell properties. He was supportive of the husband but I consider he gave truthful evidence.
BACKGROUND AND BRIEF OVERVIEW
37The husband was born [in] 1952. He is 63 years of age. The wife was born [in] 1955. She is 60 years of age. The parties were married [in] 1979. They have two children, Paul Zabek born [in] 1983 and Thomas Zabek born [in] 1989.
38In around 2002 or 2003 the parties ceased cohabitation. The wife remained in the family home at Suburb C and the husband commenced living in Perth. Both parties had other personal relationships and they had what they described as “an open marriage.”
39In November 2004 the wife commenced a relationship with Mr Ambrosi.
40The parties disagree as to the date of separation. The husband said separation occurred when the parties ceased cohabitation in 2002. The wife said separation occurred in July 2007 when she requested a divorce and division of property.
41For reasons set out below, I find the parties separated at the end of June or early July 2007.
42At the commencement of their relationship each party had a few assets and both were in employment. Both subsequently worked in the entertainment industry.
43The wife ceased employment in 1983, prior to the birth of the parties’ first child. In 1985 the husband and two others established a business known as [Business A].
44The wife was involved in the business.
45The parties experienced financial difficulties and the husband was bankrupt between 1988 and 1991. At that time the wife formally controlled the business.
46Upon the husband’s discharge from bankruptcy the parties purchased items of real estate and invested in property.
47In 1996 the parties sold Business A and became involved in businesses known as [Business B] and [Business C] in Suburb C. These businesses failed. In 1997 the husband reacquired Business A. He purchased it back for $30,000, having sold it in 1996 for $480,000.
48From then onwards the business operated from Perth and the family lived in Suburb C. The wife cared for the children and assisted in the business. The husband operated the business. The income and profits of the business enabled the parties to invest in real estate at a considerable profit.
49After the parties ceased cohabitation they continued to enjoy a supportive and cooperative relationship.
50In about 2005 and 2006 the husband transferred much of the parties’ real estate (but not the associated debts) into Fund A. Both parties are members of this fund.
51After the wife informed the husband in late 2007 that she wished to sever the parties’ financial relationship, the parties endeavoured to negotiate a settlement. The husband commenced these proceedings in 2008, but shortly thereafter the parties reached agreement as to the division of their property recorded in a Deed of Undertaking. The agreement subsequently broke down.
52The husband continued to control the parties’ finances, but since 2008 the value of the parties’ share investments and properties diminished by reason of a drop in the share market and property values. The husband continued to invest in property and the profits were applied to meet liabilities and the expenses of the various entities, the parties’ living expenses, the costs of these proceedings and to increase the value of the parties’ assets.
53The wife borrowed substantial sums from Mr Ambrosi by way of loans, some of which carried an interest rate of 18%. She said she did this because the husband refused to provide her with financial support. Mr Ambrosi sued the wife for the debt and obtained judgment in the Supreme Court. The loans were secured over a property owned by the wife.
54Each party blames the other for losses incurred, alleging waste or financial misconduct by the other party.
55These proceedings have included many interlocutory applications concerning disclosure, the sale of properties and the treatment of Mr Ambrosi’s debt.
56During the course of the trial financial statements were prepared and real estate sold. As a consequence, there was greater clarity at the end of the trial, as to the financial position of the parties, than there had been at its commencement.
THE ENTITIES
57In his Papers for the Judicial Officer filed 14 February 2014 at pages 10 and 11, the husband sets out a diagrammatic summary of the company structures of the [Zabek Group].
58The entities include the following:
Company A as trustee for the Zabek Property Trust
59Company A was incorporated on 19 June 1985. Company A acts as trustee for the [Zabek Property Trust] and was set up to purchase properties and develop a Family Trust unit. The husband is the sole director of Company A. The wife resigned as a director on 5 February 2005. The parties each hold 50 of a total of 100 issued shares.
The Fund A Superannuation Fund
60Fund A was established by Deed dated 21 June 1994. The Deed was varied 26 June 2007.
61The parties are the joint guardians and appointors of the Trust. It was created to be used as a mechanism to generate revenue through investment in residential and commercial properties to reduce tax. The purpose of the fund was to benefit the parties upon their retirement.
Company B]as trustee for the Company B Unit Trust (trading as Business A)
62[Company B] was incorporated on 9 July 1996. The husband is the sole director and shareholder of Company B. The [Company B Unit Trust] was created by Deed of Settlement dated 18 December 2007.
Company C as trustee for Paul Thom Trust
63[Company C] was incorporated on 25 May 1996. The husband is the sole director and shareholder of Company C. Company C acts as trustee for the [Paul Thom Trust] which was created by Deed of Settlement dated 12 October 1992. The husband is the sole guardian and appointor for the Trust. Company C was created to purchase residential and commercial properties and share investment stocks. The company was set up to replace Company A.
Business A as trustee for the Fund B Trust
64Business A was incorporated on 9 March 1999. The husband is the sole director and shareholder. Business A acts as trustee of the [Fund B Trust] which was created by Deed of Settlement dated 2 September 2003. The husband is the sole guardian and appointor of the Fund B Trust.
65There is a services agreement between Company B and Business A.
Company D as trustee for the Company D Family Trust
66[Company D] was incorporated on 21 March 2006. The parties are joint directors and each hold one of two issued shares.
67[Company D] was the trustee for the [Company D Family Trust] which was created on 23 March 2006. The parties are joint guardians and appointors of the Trust. The purpose of Company D was to purchase property at [Suburb D, New South Wales]. Company D went into liquidation.
Company E as trustee for the Fund B Superannuation Fund
68[Company E] was incorporated on 18 January 2008 as the corporate trustee of Fund B which was established on 24 January 2008. Fund B is the husband’s personal self-managed super fund.
MATTERS RELEVANT TO THE FINANCIAL HISTORY
The date of separation
69In 1997, when the parties reacquired Business A, the husband resided mainly in Perth during the week and joined the wife and children, who were living in Suburb C, at weekends. Both parties entered into other relationships from 2002/2003 onwards. The husband said in early 2002 he considered the marriage over. He had openly re-partnered and became aware the wife was also in another relationship.
70The wife’s position is that separation took place on 27 June 2007 when she told the husband that she wanted a divorce and to have the property divided. She said until then neither expressed an intention to terminate the marriage.
71In cross-examination the husband said although the parties had independent lifestyles, neither had until 2007 sought a divorce or property settlement. He said they made financial plans together and supported each other financially and emotionally. The husband disagreed the parties were in daily contact, although the wife said they were. The parties socialised, celebrated at special events and attended functions together. The parties tolerated each other’s choice of partners.
72On 27 June 2007 the parties met at [a restaurant] in Perth with Paul. The wife sought a division of the parties’ property. The husband was upset. He had acquired assets to benefit the family and his view was the division sought by the wife would prevent the parties continuing to enjoy their assets which would also be the children’s future. The husband attributed the wife’s decision to Mr Ambrosi. He wrote to the wife in an attempt to dissuade her from seeking a divorce and property settlement.
73The husband’s tax returns for the years ended 2005, 2006 and 2007 show the wife as his spouse for the full year. Thereafter, the 2008 tax return shows no entry for a spouse as do the 2009 and 2010 returns.
74I find that until June 2007 the parties were in a mutually supportive and cooperative relationship. The husband continued to work for the benefit of the family and had no wish to divide the parties’ assets. Until that time the wife was reasonably content with the arrangements. She carried out domestic duties for both the husband and the children. She permitted the husband to manage the parties’ finances and remained involved in the various entities and properties. Properties were purchased in the parties’ joint and sole names prior to 2007. The fact that both parties had other romantic relationships did not affect their common aims and aspirations.
75I find the parties separated at the end of June 2007.
The husband forges the wife’s signature on documents
76Between June and August 2007, upon the advice of his accountant [Mr Taylor], of [Accountant A] the husband transferred three properties from Company C to Fund A. Those properties were:
151 [Street A, Suburb A];
153 [Street A, Suburb A]; and
the [Suburb F] property.
77The husband was advised by Mr Taylor that the Howard Government introduced legislation allowing the transfer of up to $1 million into superannuation. The husband said he transferred the three properties from Company C into Fund A to benefit the wife and himself upon their retirement.
78In cross-examination the husband agreed he signed the wife’s signature on a document called “Deed of Variation to the Fund A Superannuation Fund” which was prepared by Butcher, Paull & Calder, Barristers and Solicitors. The Deed is dated 26 June 2007. The husband’s signature was witnessed by a solicitor from Butcher, Paull & Calder. The wife’s signature purports to be witnessed by Ms Smith. The Deed was stamped on 12 September 2007.
79The Deed alters the operating rules of the fund.
80At this point in the cross-examination of the husband, his senior counsel requested and was granted a certificate pursuant to s 11 of the Evidence Act 1906 (WA) to cover the husband’s evidence in relation to forging the wife’s signature.
81A further Deed of Variation to Fund A was prepared, also dated 26 June 2007. In terms of this Deed of Variation, the Trust Deed which created Fund A (dated 21 June 1994) was varied by adding a new clause providing that the trustee must not vary the Trust Deed, or Rules or do anything which could allow any member other than the husband to have an interest in the aforementioned three properties.
82The husband said this was done on the recommendation of Mr Taylor and it was his intention to put the properties into Fund A so that both parties and the family could benefit and the rent could be paid into the fund. He said the wife continued to have an interest in the properties because she was a trustee of the fund. When the properties were transferred from Company C to Fund A, the titles were then registered in the name of Mr and Mrs Zabek as trustees for Fund A. The husband’s senior counsel correctly pointed out that the properties had been transferred from an entity controlled solely by the husband to the parties in their joint names as trustees of Fund A.
83Around that time the husband also transferred some shares from Company C to the parties as trustees for Fund A.
84The husband acknowledged he also signed the wife’s signature on this Deed. It too purports to be witnessed by Ms Smith.
85The husband was referred to a further document headed “Contribution of Property to the Fund A Superannuation Fund Declaration of Trust (un-deductable contribution)”. This Deed recites that the husband is the “Contributor” and the Contributor is the registered proprietor of the property referred to in its schedule. The trustees must specifically hold the property for the Contributor and the property cannot be pooled with another member’s contribution of fund assets.
86The operative part of the Deed provides that the trustees hold the property on trust for the Contributor and the trustees will not allow any member of the fund to obtain an interest in the property.
87The Deed was dated 26 June 2007 and stamped both 28 August and 12 September 2007.
88The husband acknowledged he signed the wife’s signature on this document which again purports to be witnessed by Ms Smith. It was suggested to the husband that the documents were created or amended after the wife had informed him she wanted a property settlement. The husband denied that, saying he transferred the properties because of the income tax ruling, upon the advice of Mr Taylor.
89It was put to the husband that he arranged for the documents to be dated 26 June 2007, but in fact they had been executed after the meeting that took place on that date and stamped well after that date. The husband replied the documents were dated 26 June, being the date of signature and were prepared in good faith to benefit both parties.
90It was put to the husband that ultimately he intended to move these assets from Fund A to Fund B. He denied that.
91The husband maintained the transfers were effected to benefit both parties. He said there was little point otherwise in him transferring properties from Company C of which he was a sole director, to a fund of which both parties were trustees. He also said the wife knew about the transfers into Fund A.
92It is highly unlikely she knew of the terms of the documents and particularly the amendments to the Trust Deed which gave him an exclusive interest in the properties.
93The husband acknowledged signing various other documents for the wife. He said he had been doing that for some time and she was aware of it. He said it had only become a difficulty since Mr Ambrosi became involved and interfered with their finances.
94I find the husband’s intention, in instructing the preparation of these deeds, was to maintain control over these properties to the exclusion of the wife, to enable him to manage Fund A without interference.
Company F
95The wife alleged the husband removed from Fund A the sum of $48,193 for what was referred to in the draft financial statement as at 30 June 2012 as a [Company F] payment. She said he did this without her knowledge, Fund A does not hold shares in Company F and the husband had not disclosed where this money went.
96The husband drew a cheque for $48,193 payable to Company F dated 22 June 2007 from the AMP account of Fund A. The husband’s acquaintance [Mr Sands] was involved in capital raising for Company F. The cheque was presented on 25 June 2007, but the husband did not receive any shares, or any asset in exchange for those funds. The husband instructed [a law firm] to enquire into this matter on his behalf. Steinepreis Paganin Lawyers responded on behalf of [Company G] (formerly Company F) advising that the company and its directors confirmed they did not at any time receive the husband’s application for shares, nor the cheque. The husband disagreed stating the funds were paid into the bank account of Company F, but were subsequently refunded and, upon refund, were paid directly to Mr Sands.
97Mr Sands is known to the husband. They had business dealings together and he was involved in the [Street B] purchase. The husband denied arranging to use the funds with Mr Sands for any other purpose.
98I accept the husband intended to acquire shares. He did not, however, do anything to retrieve these funds for many years. He said his lawyers “are on to it” but the fact remains that the funds were withdrawn from the Fund A account and Fund A received no benefit in return. It seems ultimately the funds ended up in the hands of Mr Sands.
99In his closing submission, the wife’s senior counsel submitted that the loss in respect of Company F should be brought into account. As the husband was not diligent in seeking the return of the funds, I agree. I shall take this into account when considering any fact or circumstance, which, in my opinion, the justice of the case requires to be taken into account pursuant to s 75(2)(o) of the Family Law Act 1975 (Cth) (“the Act”).
The parties’ negotiations
100In about August 2007 the parties began negotiating with a view to resolving their financial affairs. They were assisted in their negotiations by Mr Taylor. Mr Ambrosi assisted the wife. The husband deposed that Mr Ambrosi “started interfering in our financial affairs, to which he had no knowledge, which caused difficulties”.
101In November 2007 the wife changed the locks on the property at [Suburb E] which was in her sole name. The husband refused to pay her bills and cancelled her credit card. The wife lodged caveats over the parties’ properties and the husband said she made enquiries of AMP Bank with respect to freezing his share trading account in Fund A.
The Suburb G property
102In April 2007, Company C contracted to purchase a property in [Suburb G] which was due to settle on 21 December 2007. The parties’ negotiations failed. The wife refused to sign the guarantee required by the Bank of Queensland about which she said she knew nothing. The sale did not proceed. The husband asserts that as a consequence he lost the opportunity to obtain a considerable profit which he estimated at about $150,000. The husband describes this as the wife’s “negative contribution to [Company C]”. The wife said the husband purchased the property without her knowledge and she had nothing to indicate it was a good investment. She was asked to sign a guarantee for $1 million which she was not in a position to honour. I find in these circumstances the wife’s refusal to sign the guarantee was not unreasonable.
103The husband commenced these proceedings on 15 January 2008.
The Deed of Undertaking
104On 5 March 2008 the parties reached agreement and a Deed of Undertaking was signed, in terms of which the parties agreed to sell various pieces of real estate to reduce debt. In particular it was agreed that all of the parties’ assets outside of Fund A, which either party did not wish to retain, would be sold. The husband agreed to provide financial support to the wife and she agreed to remove all caveats from all properties.
105Both parties assert the other did not comply with the agreement. The wife said the husband stopped assisting her financially and removed items from the home. The husband said the wife did not remove the caveats in accordance with the Deed which caused a delay in settlements.
106The wife had made enquiries of the AMP Bank with a view to freezing the husband’s share trading account in Fund A. This caused the husband concern as he had to trade shares to generate an income to meet the commitments of the parties and their entities.
The Suburb D property
107The Suburb D property was purchased by the husband on 26 July 2006 for $1,030,000. It was registered in the name of Company D which was incorporated to purchase the Suburb D property and resell it for a profit.
108The property was originally inspected by the wife and Mr Ambrosi in early 2006. Mr Ambrosi owned an adjacent property. The husband said the intention was to sell both blocks at a later date at a profit. The wife said the intention was to develop both properties simultaneously, to reduce the costs of infrastructure and to enjoy these properties as holiday homes for both families.
109The purchase price was funded by a deposit from Company C and the balance at settlement was paid by a mortgage owing to St George Bank. The property was a vacant block and did not generate an income. The husband found it increasingly difficult to service the debt. He wanted to sell the property. The wife did not.
110The husband said in August or September 2008 a cash offer was made to purchase the property for $1.2 million (“the August 2008 offer”). He wanted to accept the offer but, as explained below, after meeting with the wife and Mr Ambrosi at a restaurant he counter-offered at $1.3 million which was subsequently rejected by the buyer. The August 2008 offer was not annexed to his affidavit and in cross-examination the wife’s counsel questioned whether such an offer existed.
111The husband’s evidence regarding the offers was initially somewhat confusing. At Exhibit 78 to his trial affidavit he annexed a faxed letter of offer from Ray White dated 3 February 2009 in respect of the Suburb D property. The seller is stated to be Company D, but the name of the buyer and the buyer’s solicitor was left blank. The purchase price is stated as $1.2 million. The document states the buyers wished to have the conditions accepted within 24 hours of the seller receiving the letter of offer, that is, by 4 February 2009. The husband explained that offer dated 3 February 2009 is different to the August 2008 offer.
112The wife’s criticism was that the husband had provided no evidence to the Court about the August 2008 offer and the “high point of the paperwork” was a document presented by an unidentified buyer. The point the wife made was that the husband based a claimed loss against the wife on such a document.
113In relation to the August 2008 offer, the husband said he originally received an offer for $1.15 million which he amended and initialled to $1.2 million.
114The husband said he contacted the wife and initially she agreed to $1.2 million, but said she had certain demands to be met before she was prepared to sign the contract. Those demands were a list of expenses which came to about $114,000.
115The husband said Mr Ambrosi talked her out of that and told him to counter-offer at $1.3 million. Mr Ambrosi assured the husband that if the buyer did not accept the counter-offer, he would buy the property for the wife for $1.2 million as he owned the block next door. The counter-offer was rejected. Mr Ambrosi then refused to buy the property.
116Exhibit 32 was the August 2008 offer for the purchase of the property, enclosed within a letter dated 20 August 2008 from Hickey Lawyers to Company D. The buyer was [Buyer A] as trustee for the [Buyer A Trust].
117Exhibit 32 came in for some criticism by counsel for the wife. The document was incomplete and not produced by the husband until re-examination, although it had been disclosed. Notwithstanding those criticisms and objections, I admitted the document into evidence.
118The husband then, with the benefit of Exhibit 32, amplified his evidence. He explained he received a call in relation to the offer to purchase the property to be faxed or emailed. The offer was originally for $1.1 million and he counter-offered at $1.25 million. The lawyer agreed not to take commission and he agreed to accept $1.2 million. This was the offer which Mr Ambrosi told him to counter-offer at $1.3 million which was subsequently rejected by the prospective purchaser.
119In cross-examination Mr Ambrosi was asked about the sale of the Suburb D property. At first he could not recall the husband wanting to sell the property in August 2008 but he recalled an event at a restaurant. He then vaguely recalled an offer but not the date. He said he got together with the husband and the wife at the restaurant to talk about him buying the property for $1.15 million but the husband wanted $1.2 million for it and got into a rage and “stormed off.” He said he consoled him but nothing was concluded. Mr Ambrosi denied offering $1.2 million for the Suburb D property. He then said he could not remember saying if the husband did not get $1.3 million for the property he would buy it, although he asked if that was before or after the husband stormed off. It was put to him again and he again said he did not remember the conversation.
120The wife said she told the husband it was undervalued at $1.15 million and was worth closer to $1.3 million. The husband then offered her the property for $1.3 million and when she refused he amended the purchaser’s offer to $1.3 million relying on his conversation with Mr Ambrosi that he would buy it for $1.2 million. The wife’s complaint was that the husband wanted her to pay $1.3 million for the property, but had been prepared to sell to a purchaser for $1.15 million. The wife said she could not remember Mr Ambrosi offering $1.2 million for the property. She said it was the husband’s suggestion to seek $1.3 million from the prospective purchaser.
121The property was not sold until August 2011 and Court intervention was required regarding the disbursement of the sale proceeds. The net proceeds were applied to the Bank of Queensland mortgage.
122The husband’s position is that, as a consequence of the wife’s refusal to accept the August 2008 offer and his reliance on Mr Ambrosi’s verbal undertaking to purchase the property, he incurred ongoing costs by way of interest and fees totalling $309,636 which he said could have been applied to other debts of the marriage.
123In relation to the circumstances of the offer for the property in August 2008, I prefer the evidence of the husband to that of the wife and Mr Ambrosi. The husband’s evidence in relation to Mr Ambrosi’s subsequent refusal to purchase the property for $1.2 million was corroborated by Mr Taylor.
124I find the husband did receive an offer to purchase the property in August 2008, although on the face of it, the counter-offer was $1.15 million. I am not satisfied that the husband received an offer for $1.25 million, the figure he sought. The wife did not cooperate.
125I find Mr Ambrosi told the husband to counter-offer at $1.3 million and said if the purchaser would not buy the property at that price he would buy it for $1.2 million. Having regard to their close relationship, I have no doubt the wife was aware of this and that Mr Ambrosi never intended to purchase the property for that price. In that way, the wife frustrated the sale of the property, which she wanted to retain in any event.
126Had the wife cooperated with the sale and not deceived the husband, the property may have been sold earlier, thus, saving the parties ongoing costs referred to above.
127It was also perhaps naïve of the husband to rely on the word of Mr Ambrosi, but I accept he was desperate to sell the property.
128Company D went into liquidation. Outstanding land tax of $70,000 was ultimately paid by the husband.
129In closing submissions senior counsel for the husband addressed the loss, being the ongoing costs, in the context of the wife’s contributions or lack thereof after 2005. I shall take into account the circumstances of the attempt to sell the Suburb D property and the wife’s conduct when considering s 75(2)(o) of the Act.
The husband transfers funds to Company H
130The husband claimed the wife’s behaviour forced him to cause funds held in Fund A to be loaned to [Company H]. Lending funds to Company H enabled the husband to continue to generate revenue through share trading investments and meet the substantial expenses associated with the parties’ various property interests. The husband said at “the most extreme point” he had to make monthly repayments for loans, credit cards, legal costs, tax liabilities and other expenses, totalling approximately $44,700 per month.
131The husband said the wife did not cooperate with his attempts to reduce debt in relation to the purchase of the Suburb G property and the sale of the Suburb D property.
132Ms Smith is the sole director and shareholder of Company H. The wife said the husband did not tell her he was operating bank accounts and share accounts in the name of Company H and did not disclose the transfer of Business A between Company B and Company H.
133In 2007 the husband and Mr Sands purchased a property at [Street B, Queensland] off the plan. The property settled in June 2008 for $3,102,966. The husband owned a 50% interest in the property. The purchase was funded by Fund A.
134On 18 November 2008, the husband sold his 50% interest in the property to Mr Sands. After paying some council liabilities, the husband received $1,370,116.
135These funds were paid into the AMP Cash Management Account in the name of the parties as trustees of Fund A. The husband said he lent $1 million to Company H on 26 November 2008 and a further $100,000 to Company H on 2 December 2008. He claimed he did this because the wife’s behaviour had caused him concern; he was worried she would interfere with, or hinder, the share trading accounts and his ability to generate revenue, causing severe financial loss to be incurred.
136The funds were sent to a Commonwealth Bank cash investment account in the name of Ms Smith. The husband initially maintained he was the sole signatory to this account and denied that he was trying to distance himself from the funds so that they would not be visible to the wife. He said the cheque for the proceeds of sale of the property had been made out to him personally and he could have put it into an account in his own name, but he did not and deposited it into the Fund A account first. When pressed as to whether he was the sole signatory of the Commonwealth Bank account, the husband said Ms Smith may have been able to sign the account as it was in her name.
137On 8 March 2013, the Commonwealth Bank wrote to the Court in response to a subpoena. The bank’s letter confirmed Ms Smith as the sole signatory on the accounts. Those accounts included account ending 8370, which received the funds. The husband claimed the bank made a mistake.
138Once the funds were transferred to Company H, Company H acquired shares in its name. The husband said the loan was repaid through a transfer of shares from Company H to Fund A on 14 April 2009 in the sum of $1,091,570. To make up the shortfall, he transferred $8,430 to Fund A on 3 February 2010.
139Annexure KZ92 to the wife’s trial affidavit is a number of share transfer forms. These forms show shares transferred by the seller, Company H, to Company E, the trustee of Fund B. Ms Smith signed on behalf of the seller and the husband signed on behalf of the buyer. The date of signature of all of the share transfers is 16 April 2009. The dates of purchase on the transfers are various dates in March 2009, and one dated early April 2009. The total value of the shares transferred is $857,270. Pages 491 and 492 of KZ92 are a [Stockbroker A] Off Market Transfer Cover Sheet dated 17 April 2009. This lists the share transfers referred to above, which total $857,270. The share transfers were provided by Stockbroker A.
140In cross-examination the husband agreed Company H did not transfer those shares to Fund A and they were not transferred at the price stated in Annexure 100 to his trial affidavit. The husband was shown further share transfer forms (Exhibit 25). In these share transfer forms, which refer to the same shares described above, the seller was Company H, for whom Ms Smith signed, and the buyer was the husband for the Fund A Superannuation Account. The date of purchase was stated as 14 April 2009; this was also the date of signature.
141The share transfers and the consideration therein marry up with the share transfers referred to in Annexure 100 to the husband’s affidavit. The husband agreed he had signed these forms. He could not, however, explain why the forms were not produced by Stockbroker A in response to the subpoena filed 30 May 2012 which sought the production of documents in Exhibit 25. Nor could the husband explain why Stockbroker A did not produce these forms which were obtained from [Accountant B]. It was put to the husband that these documents were not in fact signed on 14 April 2009, but prepared sometime after the date of the issue of subpoena. The husband did not accept that.
142The husband was asked how it could be that Company H transferred these shares on 14 April 2009 to Fund A, yet on 16 April 2009, the same shares were transferred by Company H to Fund B. The husband said the transfer of shares was a roll-over from his member’s account in Fund A to Fund B.
143The sum of $1.1 million was transferred by the husband from the Fund A account to the Commonwealth Bank cash investment account in the name of Ms Smith. The share transfers produced by Stockbroker A from Company H to Company E show a transfer of shares of a total value of $857,270. The shortfall was, therefore, $242,730 less the $8,430 paid to Fund A by the husband on the advice of his accountant referred to at paragraph 138 above. The net shortfall was, therefore, $234,300. It was put to the husband that these funds were applied to his own purposes, which he said was incorrect.
144The husband explained that the shortfall arose for taxation reasons and fluctuations in the market. He said he also made a profit on the share trading of about $147,000, which was used by Company C for business expenses. He was unable to identify the profit made in the accounts.
145As stated, the sum of $1.1 million was paid into the Commonwealth Bank cash investment account in the name of Ms Smith. The purpose of placing the funds in Ms Smith’s account was to enable the husband to continue share trading without obstruction from the wife. The husband said he trusted Ms Smith implicitly.
146In terms of the bank statement there are two entries creating new term deposits. One for $150,000 on 2 January 2009 and the other for $180,000 on 8 January 2009. It was suggested to the husband that the shortfall of $230,000 may have formed part of these term deposits, which he denied. He explained he traded shares at a profit and placed funds in term deposits for a short period to earn interest.
147Ms Smith said the funds comprising the term deposits, referred to in the Commonwealth Bank cash investment account, are hers. She said she did not have access to the account, except for an error on the part of the bank.
148Ms Smith sold a property at [Suburb H] on 30 December 2008. She said after paying out her investment loan, she paid $51,194 into her streamline personal account and the balance was to be placed into a term deposit. The bank credited the funds from the sale of the property into the investment account in error. Those funds amounted to $51,194. The sum of $51,194 was paid to her streamline personal account and her investment loan of about $300,000 was paid out. She had intended to open a term deposit for $180,000. The bank incorrectly created the term deposit in the sum of $150,000. A further $30,000 was added, creating the new term deposit of $180,000. These were her funds arising from the sale of the Suburb H property and these entries were the only entries on this account relating to her funds. I accept Ms Smith’s evidence in this respect, just as I accept her evidence that this account was otherwise used by the husband to trade, with funds which belonged to him and not to her.
149A further set of share transfers were shown to the husband (Exhibit 27). These transfers relate to the same shares referred to above. On 1 August 2008 the husband wrote to the trustees of Fund A requesting they do a partial rollover of his member account to Fund B for an amount of $1,115,340. Accompanying the letter were the relevant share transfer forms in which the husband, on behalf of Fund A, was the seller and Company E, as trustee for Fund B, was the buyer. The husband signed as both buyer and seller on 16 April 2009. The dates of purchase were various dates between 20 March and 15 April 2009. These share transfers were also not produced by Stockbroker A and the husband explained they represented a rollover from Fund A to Fund B.
150Mr Taylor’s advice to the husband was initially to repay the sum of $1.1 million to Fund A. The husband did not accept the advice and so Mr Taylor advised the husband that Company H should transfer the shares back to Fund A and to effect a rollover, Fund A would transfer the shares to Fund B. Mr Taylor sought to arrange the off market share transfers for the amount in question.
151Mr Taylor confirmed that when he was determining the value at which Fund B received the shares from Company H he looked at the share transfers and the considerations on the day of transfer.
152In cross-examination Mr Taylor acknowledged the shortfall of $234,000. [Ms Fabbri] of Mr Taylor’s office prepared a schedule of the shares transferred from Company H to Fund A showing that shares to the value of $1,091,570 were transferred back from Company H to Fund A. She did this on the basis of information provided by the husband. The values contained in that document came from the stock market and the only documents in support were the off market transfers. Mr Taylor’s employee used the share prices on the day, but in fact, the actual values of the shares transferred were those in accordance with the transfers prepared by Stockbroker A showing a transfer from Company H directly to Fund B.
153I find that the husband transferred $1.1 million into the account in the name of Ms Smith to enable him to trade freely without obstruction from the wife. He sought to keep these funds in his control. The purpose of trading was to generate an income to meet the many expenses of the various entities and not to secrete money away from the wife.
154The reliable evidence, in terms of the share transfers produced by Stockbroker A, is that when the shares were transferred from Company H to Company E as trustee for Fund B, they were transferred at a lesser value than $1.1 million. The shortfall was $234,000. I am unable to say how much of that arose from a loss on the value of shares. I take into account the husband made some profit, which he applied to the expenses of Company C and he also paid tax on that profit. The evidence did not enable me to calculate these sums with precision. The husband said money was taken from the account to purchase shares, provide working capital and pay business expenses. I accept that. None of the cheque butts comprising Exhibit 39 were for him.
155The husband’s actions, causing Fund A to lend $1,100,000, were a contravention of various sections of the Superannuation Industry (Supervision) Act 1993 (Cth) (“SIS Act”) and the Superannuation Industry (Supervision) Regulations 1994 (Cth) (“SIS Regulations”).
156Curiously, the wife said the husband should have applied the sale proceeds of Street B to reduce debt over the Suburb D property. Had he done that, it too would have been a contravention of the SIS Act and Regulations.
157The wife submitted this loss caused by the husband should be brought to account.
158In Kowaliw and Kowaliw (1981) FLC 91-092 Baker J, said at paragraph 76,644:
Marriage is for most couples an economic partnership. Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living. The reported decisions in respect of applications for settlement of property under sec. 79 of the Act are unanimous that both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally.
Is not, however, the converse equally sustainable? In other words, should not financial losses incurred by parties to a marriage or either of them, whether incurred jointly or severally, be shared by them in the same manner as the financial gains?
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 sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.
159In Browne v Green (1999) FLC 92-873, the Full Court assessed the Kowaliw guidelines and supported the trial judge’s assessment that the views stated by Baker J in Kowaliw do not constitute any form of fixed code, but accepted them as a “well accepted guideline.”
160The Full Court noted that the trial judge’s reasons for attributing sole responsibility for the financial losses to the husband seemed to be that he was the initiator of the project and had control of it. The Full Court determined that the trial judge erred. In that case there was no negligence, recklessness or deliberate reduction of assets by the husband.
161The loss sustained by Fund A was attributable solely to the actions of the husband who moved funds from that entity to another. Upon restoring the funds to Fund A the loss was $234,000. I accept that loss is ameliorated to some extent by profit also made on shares. I also accept the husband’s motivation was not to deny the wife her entitlements but to maintain control of the funds, to enable him to meet the significant expenses of the various entities. Nevertheless, the husband’s actions in causing Fund A to lend funds to Company H caused a loss. The husband’s unilateral actions involving, as they did, contraventions of the SIS Act and SIS Regulations, were unwise and, in my view, reckless. It cannot be said that the wife participated in this transaction at all.
162I find in this instance that the husband acted recklessly with matrimonial assets and caused loss to the parties. I shall take his conduct and the consequential loss into account when considering s 75(2)(o) of the Act.
Loan to Paul
163In 2008, the husband caused Fund A to lend the sum of $100,000 to Paul, assisting Paul to purchase a unit at Suburb G in May 2008. This loan was a contravention of the SIS Act and Regulations and the husband did not consult the wife about the loan. Paul agreed to repay the loan upon the sale of the unit. The loan was not documented until April 2014, when the husband asked Paul for a signed acknowledgement of the loan as a caveat had not been lodged on the title to the property. Paul provided this on 11 April 2014.
164It is expected that Paul will repay the loan when he is able to do so or upon the sale of the unit, although the wife said Paul’s property has dropped in value and he is unlikely to repay the sum due. The loan has been repaid in the accounts of Fund A. The parties agree that, if and when the loan is repaid by Paul, each will receive one half of the payment.
165In view of the consensus between the parties in this respect and the uncertainty as to the timing of repayment, this loan is not included in the schedule of the parties’ property below.
The wife receives funds from Mr Ambrosi
166The wife said the husband did not comply with the Deed of Undertaking between them signed on 5 March 2008. She said she had no access to funds and the husband ignored her requests for financial assistance. During the period from 25 June 2007 to 30 April 2013 the funds she received from the husband amounted to $5,391.
167The wife entered into three written agreements with Mr Ambrosi as follows:
•A Deed of Acknowledgement of Debt and Indemnity dated 8 January 2009 in respect of a loan of $40,000.
•A Deed of Acknowledgement of Debt and Indemnity dated 8 January 2009 in respect of a loan of $500,000. This was a line of credit.
•A Loan Agreement dated 4 March 2011 in respect of a loan of $300,000 which was also a line of credit.
168The wife secured the line of credit of $500,000 plus interest against the [Suburb I] property by way of registered mortgage dated 8 January 2009.
169The Deed of Acknowledgement of Debt and Indemnity dated 8 January 2009 provides that the principal sum of $40,000 shall be repaid in 12 months with interest at 12%. By the end of 2009 the wife had not repaid that sum. The Deed provided for interest on the sum owing each month at 12% and, failing payment, penalty interest of 18% was payable on the outstanding balance.
170In January 2009 the wife’s advances totalled $70,000. By March and April 2009 she had not made any repayments and the interest rate of 18% applied. The wife was in default as early as March 2009.
171The wife said she received advice that the interest rate charged by Mr Ambrosi on the loans was too high, but she said “Mr Ambrosi would not budge” and she was desperate. In contrast, Paul borrowed $60,000 from Mr Ambrosi in 2012 and repaid it in early 2014. Mr Ambrosi did not charge him interest. The wife said she applied for maintenance, she thought, in 2012. She did not. In July 2012 she filed an application seeking, among other things, a payment of $160,000 from Fund A for her personal expenses which she received in October 2012.
172It was put to the wife that this was a good way to extract money from the husband, which she absolutely denied. She said she was being starved out and borrowed money to survive.
173By 25 March 2010 the amount due by the wife to Mr Ambrosi was $631,386. The wife wrote to Mr Ambrosi on 1 April 2010 saying she was unable to repay the loan and that she was in default. She confirmed she agreed to Mr Ambrosi lodging caveats over all properties in which she had an interest. The following month the wife repaid Mr Ambrosi $230,000 from the proceeds of sale of the [Ferrari] to Mr Ambrosi, a vehicle she had purchased using funds borrowed from him.
174In 2011 Mr Ambrosi engaged an accountant to prepare schedules of the outstanding balances of the loans, who allocated the payment received to outstanding loans.
175It seems payment was not applied to the earliest loan as Mr Ambrosi issued a pro forma tax invoice for $56,914 in respect of the first loan and interest on 18 December 2011.
176It was put to Mr Ambrosi by senior counsel for the husband that the loans were a way to “rort” interest out of the husband and make him pay to help support his partner (the wife). Mr Ambrosi denied this.
177Mr Ambrosi sued the wife in the Supreme Court.
178The writ issued on 18 May 2010 at a time when the wife and Mr Ambrosi were holidaying together in Italy. The wife could not recall discussing the writ with him.
179On 11 August 2010 the wife subsequently attended Court and consented to judgment in the sum of $438,746 inclusive of interest.
180The third loan agreement dated 4 March 2011 provided for interest at the rate of 18% per annum.
181The wife deposed that by 3 February 2012 the balance of each of the loans including interest was about $819,000 (in total). Mr Ambrosi received $228,216 from the sale proceeds of the Suburb I property in March 2012.
182The wife received further funds from Mr Ambrosi. He advanced her the following amounts by way of three further loans:
• $30,000 on 6 May 2012;
•$25,000 on 22 June 2012; and
• $30,000 on 8 August 2012.
183Mr Ambrosi wrote to the husband’s solicitors on 4 July 2012 informing them of the extent of the outstanding loans which as at 30 July 2012 amounted to $707,724 inclusive of some costs.
184Exhibit 71 is a schedule of payments said to have been received by the wife from 2008 to 8 May 2015. Exhibit 72 is a revised version of Exhibit 71, the only changes being at line items 44 and 60. In the schedules, the funds received by the wife from Mr Ambrosi, credited to her Westpac account, total $820,000.
185The wife had also received $40,000 from Mr Ambrosi prior to January 2009 in addition to the payments referred to in Exhibits 71 and 72. The total of her receipts from Mr Ambrosi was $860,000 by August 2012.
186The wife made the following payments totalling $1,223,216 to Mr Ambrosi which he accepted in full settlement of sums loaned to the wife and interest. Those payments were:
•$228,216 from the sale proceeds of the Suburb I property in March 2012.
•$230,000 from the sale proceeds of the Ferrari in April 2010.
•$765,000 from the proceeds of the sale of [the Suburb J] property in June 2014.
187The wife estimated she paid Mr Ambrosi interest on the loans totalling about $360,000. It was submitted that $100,000 of this represented Mr Ambrosi’s legal costs as set out in his handwritten note which was Exhibit 45. Although I cannot be certain, that may have been the case.
188The husband considers the loans from Mr Ambrosi are “a sham, purposely orchestrated in order to reduce the net asset pool” and ultimately increase the funds received by the wife at settlement.
189I find the wife borrowed funds from Mr Ambrosi at a time when the husband had control of the parties’ wealth and he provided little financial assistance to the wife despite her requests that he do so. She did this as a means to access the parties’ joint assets and Mr Ambrosi assisted her in this respect. The reasonableness or otherwise of the terms and conditions of the loans and the wife’s expenditure of the funds are a different matter. The wife did not seek the husband’s cooperation in borrowing from a bank although, at the time, I am not convinced that cooperation would have been forthcoming as he considered the wife to be in a de facto relationship with Mr Ambrosi.
190The husband’s application to set aside the loan agreements between the wife and Mr Ambrosi was withdrawn on 28 January 2014.
The wife’s expenditure
191A schedule of the wife’s expenditure from 1 May 2007 to 30 April 2013 is contained in paragraph 16 of her affidavit filed 18 July 2013.
192The wife deposed her total expenditure from 1 May 2007 to 30 April 2013 was $841,508. This amount includes expenditure during that period associated with both Paul and Thomas in sums of $98,984 and $78,310 respectively. The husband considers a number of items of the wife’s expenditure to be unnecessary and unreasonable, including funds paid to Paul and Thomas. For example, the wife purchased a motor vehicle from Mr Ambrosi for Paul for $40,000 using the funds Mr Ambrosi had lent her. She also provided a motor vehicle to Thomas, having paid out the loan on the car with funds lent to her. The wife purchased a Ferrari motor vehicle. She sold it to Mr Ambrosi at a loss. The husband considers the wife’s expenditure on wining and dining to be excessive and costs paid by her associated with the Suburb I and the Suburb J properties were minimal.
193The husband deposed it appears that whilst the wife has borrowed funds from Mr Ambrosi she has then spent funds directly back on excessive spending including spending for Mr Ambrosi.
194Annexure B to the husband’s outline of closing address dated 22 May 2015 was a chronology of the wife’s travel. The wife has travelled extensively, both interstate and internationally with Mr Ambrosi in the last ten years. She said when she travelled as his carer he paid and if she travelled otherwise she paid for herself.
195It is necessary for me to consider the reasonableness of the wife’s expenditure and this is particularly important where that expenditure was of funds borrowed from Mr Ambrosi at a high interest rate. Clearly there were aspects of her expenditure which were extravagant such as the purchase of the Ferrari and unnecessary such as the provision of funds and motor vehicles to Paul and Thomas. However I also take into account that part of the wife’s expenditure was applied to her reasonable living expenses including medical costs although she could not recall the cost of medical treatment overseas when asked about it. The figures do not enable me to determine with any precision what her reasonable living expenses were. To the extent she funded her overseas travel from borrowings that was a further example of an extravagant lifestyle. For example she paid for business class flights for herself and Mr Ambrosi in August 2010. The wife’ expenditure is balanced against the husband’s lifestyle and commitments. Although he had control and use of the parties’ wealth, associated with that was the requirement to meet the heavy commitments in respect of the various entities.
196I find there were aspects of the wife’s expenditure which were unreasonable and extravagant and others which were not. Upon the evidence I cannot quantify each in dollar terms.
197The total of payments said to have been received by the wife contained in Exhibit 71 is $2,144,735. The wife took issue with the accuracy of this document, pointing out omissions such as the payment she received for the Ferrari and her Centrelink payments. She also pointed out that some payments went to third parties such as payment for [Lawyer A’s] fees and more significantly the part property payments in June 2014 which went to Mr Ambrosi. The total in Exhibit 72, the updated version, is $2,457,976.
198Annexure D to the husband’s said outline of closing address was a schedule of payments received by the wife or for her benefit from the property of the parties from 7 February 2012 to 5 May 2015 totalling $1,635,976.
199In the context of the addback sought by the husband of the wife’s partial property payment, I asked senior counsel for the husband about the wife’s reasonable living expenses. He submitted if one deducted from the total of $1,635,976, the partial property payment of $765,000 and the amount spent by the wife on her legal costs, the balance was enough to allow for living expenses of about $30,000 or $40,000 per year. The point he made was the wife had received enough overall to allow for her reasonable living expenses and they need not be included in the partial property payment. In any event, he questioned why I should have regard to a claim that was never made.
200I am not persuaded by the husband’s submission as I think the issue is not quite as simple as that. From June 2007 to late 2012 the wife received a negligible amount for her support from the husband. Her Westpac statements show her receipt of the funds provided by Mr Ambrosi which were applied directly to her expenditure. These funds were repaid by the wife using the partial property payment of $765,000. In considering the wife’s use of funds available to her, I am mindful that I will be adding back the amount for legal costs paid.
201As stated below, I do not intend to add back the wife’s partial property settlement as sought by the husband’s senior counsel. I will take into account the amout of the funds available to the wife and her expenditure in a global way when considering s 75(2) (o) of the Act.
The wife’s relationship with Mr Ambrosi
202The wife met Mr Ambrosi in 2004. They were girlfriend and boyfriend from about 2006. She said the relationship had changed in the past few years and said, “It has become more of a friend, platonic, caring-type relationship.” The wife said in 2010 she began to be Mr Ambrosi’s carer as he has some health difficulties. Mr Ambrosi said as at 2010 he would have referred to the wife as his “young lady friend.” He said until 2011 their relationship had been a sexual one and after 2011 it became a platonic one. However in further cross-examination he could not say if he and the wife were in a de facto relationship and he could not remember if his relationship with the wife was the same before signing the financial agreement as after.
203In August 2010 the wife and Mr Ambrosi entered into the financial agreement to which I refer below.
204The wife and Mr Ambrosi travelled extensively between 2005 and 2015, usually once a year overseas and frequently to [Darwin]. The purpose of travel was primarily holidays or Mr Ambrosi’s business interests.
205The wife said she spends 30% of her time in Suburb C and 70% of her time away from Suburb C. When in Perth she lives at the home of Mr Ambrosi in [Suburb K].
206As to who pays for her travel, the wife said it depends upon the purpose of the travel; if she accompanies Mr Ambrosi at his request to assist him with business or other matters, then he pays. If that is not the basis for her accompanying him, then she pays.
207When the wife is in Perth she has the use of a [Pulsar] motor vehicle provided by Mr Ambrosi, but when she is in Suburb C she uses the [Subaru] motor vehicle, which is owned by the husband and which she declined to return to him. She did not explain why she did not use the Pulsar when in Suburb C.
208The wife uses a telephone provided by Mr Ambrosi. She said she pays him $50 per month in cash to reimburse him for her phone calls.
209The wife lives in the [Suburb J] property to which I refer below. Mr Ambrosi said the Suburb J property was bought by his daughter [Alannah]. He lent her the money to pay for it although there is no loan agreement and she does not pay interest on the loan. He said the wife pays rent of $400 per week to occupy this property. The rent is paid to an account in the name of Mr Ambrosi and it is he who inspects the property.
210The husband’s position is prior to Mr Ambrosi’s involvement or interference in the parties’ financial matters, the wife was happy with their financial arrangements. He said they had communicated with each other well and it was only when Mr Ambrosi came along “things started going backwards.”
211Mr Ambrosi was joined as the second respondent in the proceedings by order dated 10 February 2012. The husband deposed Mr Ambrosi had made a number of indirect threats during the course of the proceedings. In January 2013 Mr Ambrosi wrote to the husband’s solicitors requesting access for two days to the husband’s disclosure. In his letter he said he would have a tax expert present and that the alleged loan between the wife and Company C looked like a tax evasion scheme. Mr Ambrosi said he required to inspect the husband’s disclosure because the husband said his loans to the wife were a sham.
212In February 2013 Mr Ambrosi told the husband’s accountant he had received financial statements relating to the husband’s entities and alleged tax evasion and fraud.
213On 14 October 2013 the husband and his solicitors received by post a copy of an article from the West Australian in which it referred to a former Perth Glory player being jailed for eight years over a $1.7 million tax fraud after using false business statements to feed his gambling addiction. I infer the husband asserts Mr Ambrosi sent the article.
214On 17 October 2013 Mr Ambrosi wrote to the husband’s solicitors enclosing a copy of a letter he sent to the Principal Registrar of the Family Court. In his letter to the husband’s solicitors Mr Ambrosi stated:
The husband is actively involved in taxation fraud and you need to immediately report this case to the Australian Taxation Office and the Australian Federal Police.
215In his letter to the Principal Registrar Mr Ambrosi informed the Court he was unable to attend the callover scheduled for 8 November 2013 due to a work commitment. His letter went on to refer to Fund A and stated that the wife had signed the 2008 financial report under duress.
216The final two paragraphs of his letter stated as follows:
The evidence of tax evasion is overwhelming.
Nothing can be lost, and future penalties and fines avoided, by notifying the authorities of Mr Zabek’s activities. The case needs to be immediately reported to the Australian Taxation Office and the Australian Federal Police.
217I am not persuaded there was any real change in the relationship of the wife and Mr Ambrosi after 2010 or 2011. The relationship may have become a platonic one, as both were keen to point out, but it continued to be no less supportive to the wife, including financially. I doubt the veracity of the evidence of the wife and Mr Ambrosi regarding the wife paying rent for the Suburb J property. I do not believe she pays Mr Ambrosi $50 per month towards a phone bill and if that money actually changes hands, in my view, it is for the purpose of these proceedings only. This is in the context of Mr Ambrosi being an extremely wealthy man with assets of over $87 million and an annual income of $1,600,000 according to the financial agreement.
218There was no evidence to suggest the wife and Mr Ambrosi have spent less time together since 2010 or 2011. Of the 70% of her time living away from Suburb C, the wife either travels, usually with Mr Ambrosi, or lives at Mr Ambrosi’s home in Suburb K or [Suburb L]. There was no suggestion that there were any difficulties in their relationship or that they had other partners. I find the wife and Mr Ambrosi have a close and financially supportive relationship and there was no evidence to indicate that might change in the foreseeable future. I further find that their assertion that their relationship changed after 2010 or 2011 is most likely an attempt to distance themselves from each other financially for the purpose of these proceedings and an attempt to mislead the Court as to the true nature of their relationship.
The Ferrari
219In 2009 the wife purchased a Ferrari for $270,000 using funds lent to her by Mr Ambrosi. In April 2010 the wife sold the Ferrari to Mr Ambrosi for $255,000. The loss on sale was $15,000. From the sale proceeds of the Ferrari, the wife applied $230,000 to repayment of her loan from Mr Ambrosi.
220After the wife sold the vehicle to Mr Ambrosi, he then owned two Ferraris. The Ferrari previously owned by the wife was parked in the garage at the Suburb I property and later at the Suburb J property where the wife said she “stored” it for Mr Ambrosi. Currently the vehicle is parked at Mr Ambrosi’s home in Suburb K.
221Mr Ambrosi said the wife drove the Ferrari after she sold it to him “on a number of occasions, but very limited”.
The financial agreement
222The wife and Mr Ambrosi entered into a financial agreement on 13 August 2010 made under s 205ZN of the Family Court Act 1997 (WA). The wife received advice from Lawyer A, who she said Mr Ambrosi had known for many decades. Lawyer A advised the wife that the agreement was financially disadvantageous to her, however, she “freely and voluntarily and willingly” signed it. The wife could not recall seeking advice from any other practitioner as to whether the agreement is enforceable or not.
223Recitals in the agreement provide that the wife and Mr Ambrosi have engaged in a relationship since in or about July 2007 and now propose to live together in a de facto relationship. A further recital provides that they intend to enter into a de facto relationship to last indefinitely. When asked about this Mr Ambrosi said they intended to do so but he did not know if his relationship with the wife was a de facto relationship. He did not know what the definition of a de facto relationship was.
224In terms of the financial agreement the parties have an obligation to make full disclosure. The agreement contains two schedules, namely the assets and liabilities of the wife and Mr Ambrosi. Two days before the financial agreement was signed, the wife had consented to judgment in the Supreme Court in favour of Mr Ambrosi.
225The schedules in the financial agreement make no mention of the wife’s debt to Mr Ambrosi either as a liability in her schedule or as an asset of Mr Ambrosi in his. When asked about her schedule, the wife said it was prepared by Mr Taylor and it indicated her financial position in a “general sense.” When he was asked about the schedules and whether he bothered to read either schedule, Mr Ambrosi replied he would probably have put his “eye over it.” He said there were five or six loans (to others) that were not recorded there and the document was clearly incomplete. Mr Ambrosi said he “possibly” looked at the wife’s statement of her financial position.
226In terms of the disclosure of property, Mr Ambrosi’s total worth is over $87 million, although the schedule does not refer to assets which he may own abroad. It was put to the wife that the financial agreement would be completely unenforceable, which she denied.
227The wife did not disclose the existence of the financial agreement in these proceedings until some 22 months after it had been signed.
228The wife deposed that under the financial agreement, in the event the relationship between her and Mr Ambrosi breaks down, neither party is entitled to any of the other party’s assets or spousal maintenance. I make no finding as to whether the financial agreement is binding or not. There are clearly deficiencies in the agreement with respect to the parties’ disclosure. Mr Ambrosi was noticeably casual about these deficiencies and both the wife and Mr Ambrosi seemed unconcerned about the omissions in the schedules. I doubt whether the wife and Mr Ambrosi intended to bind themselves by the financial agreement and whether they are in fact bound by it.
The Suburb I property
229The parties purchased the Suburb I property on or about 4 May 2005 for $1.65 million. The title was registered in the wife’s sole name. The purchase was funded by mortgage with StateWest Bank in the name of Company C. The property was acquired for investment purposes. The parties improved the property at a cost of approximately $100,000. On 6 September 2011 an order was made that the Suburb I property be placed on the market with the proceeds of sale to be applied in payment of agent’s commission and costs of sale, in discharge of any secured liability and the balance remaining to be held in trust pending further order. On 26 November 2011 the parties received a cash offer for the property of $1.7 million. The offer was subject to a sunset clause which lapsed at 5.00 pm on 29 November 2011.
394The High Court said at [42]:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
395The parties separated many years ago. Properties have been sold and monies distributed. Both parties seek a property settlement order. In these circumstances, I find it is just and equitable to make a property settlement order.
CONTRIBUTIONS
396The husband’s position is that contributions were equal to the date of separation, which he said occurred in 2002 or 2003. His case is that from then onwards he made greater contributions than the wife.
397In his said outline of closing address at paragraph 44 the husband’s senior counsel submitted:
It is in the period the wife formed her relationship with [Mr Ambrosi], in particular 2005 and onwards, that the contributions of the parties diverge.
398The wife’s position is that the parties’ contributions to date of trial should be seen as equal. From the commencement of the parties’ relationship, the husband was the primary income earner and the wife was the primary carer for the children.
399Although the parties had other relationships from around 2002 onwards, they did not separate their finances and continued their existing roles.
400The wife discussed business matters with the husband. She maintained the family home to which the husband returned at weekends when she was in Perth. She cooked, cleaned and purchased groceries. The wife attended special events with the husband. Their joint funds remained merged, with the husband managing those funds with the wife’s agreement.
401Thomas attended [Suburb C College] until 2006. The wife was involved with his schooling and extracurricular activities.
402The husband managed the parties’ finances. He acquired properties which he resold at a profit. His efforts created wealth for the parties. In 2007 the husband received an inheritance of about $138,000 which was applied to purposes of the marriage.
403Although the parties’ contributions were different, I conclude that until 2007, when the wife asked for a division of the parties’ property, the parties’ contributions were equal.
404After 2007 the wife continued her relationship with Mr Ambrosi. She travelled extensively with him each year, both interstate and overseas.
405Both of the parties’ sons had finished school and were living independently. The wife maintained the homes she occupied only. The husband did not provide ongoing financial support for the wife, and what he provided was insignificant. The wife did not bring an application for spousal maintenance although she sought lump sum payments for her personal expenses and legal costs and received funds from various sources. She had significant funds available to her, either received by her or on her behalf as set out above. The wife received an insurance payout of about $198,000 in 2013 which she applied to payment of her legal costs.
406The husband continued to manage the parties’ finances but with difficulty by reason of the financial climate after 2008 and the heavy commitments pertaining to the parties’ properties and entities. It was important that he reduce debt and his efforts to do so were considerable. The husband worked hard to maintain and increase the parties’ wealth in the lengthy period of eight years between separation and trial.
407The husband submitted that apart from some small costs paid by the wife towards the properties occupied by her, the wife could not point to any contribution made by her in respect of property of the parties probably after 2005 and definitely after 2007. The difficulty with that submission is that it ignores the fact that the jointly owned assets of the parties were in the sole control of the husband. He alone had access to and the use of the greater part of the parties’ wealth for many years. However, he no longer received the wife’s support and assistance in relation to financial matters that he had previously.
408The parties’ conduct and the losses sustained referred to above are not taken into account when considering their contributions as I will consider this aspect of the case under s 75(2)(o) of the Act.
Assessment of contributions
409In his closing submissions, the husband’s senior counsel referred to the “vastly different contributions” of the parties. He did not however specify a percentage division based on contribution. The wife’s senior counsel submitted there should be an equal division based on contribution.
410I must evaluate the weight to be given to each party’s contributions relative to the contributions of the other party.
411It is necessary to look at the nature of the parties’ relationship and the way in which they conducted their lives, both before and after separation. Although it is helpful to look at the parties’ contributions until and after separation, the question is not whether there should be an adjustment to an equal percentage division at separation to take account of contributions thereafter. I must consider, what is the outcome of evaluating the weight to be given to each party’s contributions of all kinds from the commencement of cohabitation to date of trial.
412When I weigh the parties’ respective contributions I conclude that the husband’s contributions were greater than those of the wife, largely by reason of the financial and non-financial contributions made by him in managing the parties’ assets for several years after 2007 without the assistance of the wife. I have taken into account that, by this time, Thomas had left school and both children were over 18 years. On the other hand I have not overlooked that the husband’s financial contributions in that period were made possible by the fact that he had exclusive use of almost all of the parties’ wealth. Exercising the wide discretion conferred by the legislation I consider contributions should be assessed 55% to the husband and 45% to the wife.
413The effect of this finding as to contribution is that the husband is entitled to receive property of a value of $2,905,727 and the wife is entitled to receive property of a value of $2,377,413.
SECTION 75(2) FACTORS
414The matters to be taken into account are as follows:
(a) the age and state of health of each of the parties
415The husband is aged 63 years and the wife is aged 60 years. The husband suffers from stress and anxiety, for which he was prescribed medication. The husband suffers pain in his shoulder for which he will require surgery. The wife suffers from cancer, anxiety and depression.
(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
416The husband has retired. He has sold Business A. He was a successful share and property investor and he is an astute businessman. He may be able to utilise these skills in the future. He is in receipt of a pension from Fund A of $9,000 per month.
417The wife has not worked in paid employment for many years. She has little in the way of administrative skills. It is unlikely that she has any capacity for employment. She too receives a pension from Fund A of $9,000 per month.
418The parties have the property referred to in the schedule above.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
419The children of the marriage have attained the age of 18 years and live independently.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain
420The husband shares rental accommodation for which he pays $1,500 per month. He applies his pension income to meeting repayments of credit card liabilities, a portion of which originally arose from losses incurred with respect to property developments in 2006 which did not proceed.
421His other commitments include car repayments, legal and accounting fees, personal loan repayments and living costs.
422The wife said she pays rent of $400 per week to Mr Ambrosi for the Suburb J property. It is questionable whether this is a commitment she actually incurs. She spends only 30% of her time at the property. The wife also has a credit card debt. She said she lived on borrowed money from her son Thomas and owed him $25,000.
(e) the responsibilities of either party to support any other person
423Neither party has a responsibility to support any other person.
(f) subject to sub section (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth or of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party
424At trial the wife was in receipt of Centrelink benefits. The parties have the superannuation interests referred to above and each receive a pension from Fund A.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
425The parties had a reasonable standard of living during the marriage. Both have had a reasonable standard of living since separation. The husband said he does not live a comfortable lifestyle.
(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
426Neither party makes a claim for spousal maintenance or proposes to undertake a course of education or training.
(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
427As at 31 March 2015 the tax liability of Fund A was $448,461. The principal sum was paid to the ATO leaving an amount outstanding by way of interest and penalties of $197,552. Accountant C will negotiate with the ATO with a view to part or possibly all of that being waived. The intention of the parties is to wind up Fund A. Technically the ATO debt must be resolved prior to the wind up. Accountant C said the fund would be wound up. The ATO would flag it as owing debts and those debts could be transferred to the parties’ personal accounts and thus met in certain proportions by the parties.
(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
428This is not relevant.
(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
429The parties’ marriage was a long one. I have referred to the earning capacity of the parties above. It is likely their income will be derived from their superannuation interests.
(l) the need to protect a party who wishes to continue that party’s role as a parent
430This is not relevant.
(m) if either party is cohabiting with another person – the financial circumstances relating to the cohabitation
431The wife is in a relationship with Mr Ambrosi. Mr Ambrosi provides the wife with financial support both directly and indirectly. For 70% of her time, the wife stays at his home or travels, usually with him.
432I refer to my findings above regarding the wife’s relationship with Mr Ambrosi and the financial circumstances of their relationship.
433The wife said she is Mr Ambrosi’s carer. Caring for him is financially advantageous to her. Senior counsel for the wife acknowledged in his outline of closing address that Mr Ambrosi “has shown the wife considerable generosity” (not least in respect of all fares and accommodation) but stated they are not in a de facto relationship.
(n) the terms of any order made or proposed to be made under section 79 in relation to
(i)the property of the parties;
(ii)vested bankruptcy property in relation to a bankrupt party;
434The orders which I propose will see the husband retaining certain items of real estate. The wife does not wish to retain real estate. The assets of Fund A will be divided between the parties in such proportions to give effect to the percentage division ordered. The husband will transfer property to Fund B. The wife may transfer funds to a superannuation fund of her choosing.
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii)
435This is not relevant.
(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
436This is not relevant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
437Under this heading I draw together my findings concerning the parties’ conduct and losses sustained as a consequence of that conduct. I propose to make an adjustment in favour of the husband for the following:
•The wife’s receipt of the partial property settlement. I have not added this amount back as notional property of the wife. She applied these funds to repay loans from Mr Ambrosi and, some but not all of her expenditure of the proceeds of those loans was extravagant and unreasonable;
•The wife’s conduct, aided by Mr Ambrosi in relation to the sale of the Suburb D property. She deceived the husband and obstructed the sale of the property when she knew the husband needed to reduce debt;
•The wife’s conduct, aided by Mr Ambrosi, in failing to cooperate with the sale of the Suburb I and Suburb J properties, in respect of which the parties sustained loss.
438I propose to make an adjustment in favour of the wife for the following:
•The husband’s conduct in transferring funds from Fund A to Company H and the loss sustained when the funds were restored to Fund A;
•The husband’s conduct in failing to diligently retrieve funds paid for Company F shares;
•The husband’s conduct in contravening the SIS Act and Regulations and the extent to which the parties incurred costs to Accountant A and Accountant B, and interest and penalties to the ATO as a consequence.
439As discussed above, for the most part, the losses sustained as a consequence of both parties’ conduct cannot be brought to account in precise dollar terms. There are circumstances which render the asserted amounts unreliable or uncertain. For that reason, I take into account the losses claimed by both globally. When I balance the matters I have referred to above, I consider this factor warrants an adjustment in favour of the wife.
(p) the terms of any financial agreement that is binding on the parties to the marriage;
440The terms of the financial agreement between the wife and Mr Ambrosi are discussed above.
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
441This is not relevant.
ASSESSMENT OF SECTION 75(2) FACTORS
442The husband seeks an adjustment for the s 75(2) factors such that the overall distribution is 60% in his favour and 40% in favour of the wife. The wife seeks an adjustment in her favour to an otherwise equal division based on contribution, such that she receives 55% of the parties’ property and the husband receives 45%.
443The purpose of an adjustment for the s 75(2) factors is to assist the Court in arriving at a just and equitable result (Waters and Jurek (1995) FLC 92-635).
444I consider the most relevant s 75(2) factors are:
•the financial circumstances relating to the wife’s relationship with Mr Ambrosi; and
•the facts and circumstances which, in my opinion, the justice of the case requires to be taken into account.
445In my discretion, taking the s 75(2) factors as a whole, I consider an adjustment of 3% in favour of the wife is appropriate. The overall distribution of property will be 52% to the husband and 48% to the wife. There is a disparity of 4% or $211,326.
JUST AND EQUITABLE
446Section 79(2) of the Act provides:
the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
447I must consider the practical effect of the orders.
448As the husband is entitled to 52% of the parties’ property, he is entitled to property to the value of $2,747,233. As the wife is entitled to 48% of the parties’ property she is entitled to property to the value of $2,535,907.
449The husband retains the following:
151 & 153 [Street A, Suburb A]
$1,400,000
Share Portfolio
$80,904
[Fund B Superannuation Fund]
[The Suburb P Property]
$135,000
[The Suburb Q Property]
$235,000
[Suburb O] Deposit
$200,035
Macquarie Bank Accounts
$38,809
Share Portfolio – comprising:
Shares in Listed Companies ($243,358); and
Shares in Listed Companies Under Court Order ($150, 447)
$393,805
Unlisted shares
$1
[Accountant D] Accounts
-$19,795
[Lawyer B] outstanding account
-$55,930
2004 [Subaru]
$4,500
Credit cards
-$7,118
Westpac [account]
-$16,577
Macquarie [account]
-$40,649
Bank accounts
$1,203
Personal loans
-$93,800
Legal costs paid
$769,897
Loans for Legal costs
-$169,171
Tax liabilities
-$25,793
[Company B Unit Trust] & [Business A]
Balance due by purchasers
$26,140
[Fund B Trust]
GST Liability
-$103,276
[Paul Thom Trust]
Bank Account
$42
Share portfolio
$22,594
Citibank Card
-$7,117
Citibank Account
-$32,333
[Zabek Property Trust]
nil
[Suburb D Family Trust]
[Lawyer B]
-$5,682
Total
2,730,689
450The wife retains the following:
[Company J] Options
nil
Westpac Bank Account
$48,000
Credit cards (as at May 2015)
-$57,358
Chattels at the [Suburb J] property
$10,000
Legal costs:
Paid $599,448
Solicitors Trust account $73,500 (May 2015)
$672,948
ATO assessment (as at May 2015)
-$28,639
Total
$644,951
451Fund A will be wound up. The balance of funds or assets will be divided between the parties in such proportions so as to achieve the division I intend to order.
452The husband seeks to retain certain properties and shares which will form a significant part of his entitlement. The wife does not seek to retain property or shares and will receive most of her entitlement in cash. Specifically, the wife does not seek to retain the property at Suburb G and it will require to be sold.
453The husband will receive or retain property of a value of $2,730,689 which is just short of his entitlement of $2,747,233.
454The wife will receive or retain property to a value of $644,951. To make up her entitlement of $2,535,907 she will receive most of the net assets of Fund A which includes funds at credit of the Macquarie bank account of Fund A and the proceeds of sale of Suburb G.
455Both parties will have sufficient funds with which to provide for their future. Most of the property of the husband is in real property and shares and that of the wife is in cash.
456I am satisfied that the orders I will make reflecting this outcome are those which are just and equitable.
457The parties are likely to require an opportunity to consider their positions following the publication of these reasons.
THE PROPOSED PROPERTY ORDERS
458I propose to make orders which can be summarised as follows:
1.The parties as directors and trustees of [Fund A] transfer to the account of the husband in [Fund B] the shares held by the fund and the properties at 151 and 153 [Street A, Suburb A].
2.In the event neither party seeks to retain the property at [Suburb G], the said property be sold.
3.[Fund A] be wound up and the balance of funds or assets of the funds be divided in such proportions so as to achieve a division of the parties’ property 52% to the husband and 48% to the wife, having regard to the property and liabilities to be retained by each of them, as set out in paragraphs 449 and 450 above.
4.The tax liabilities of [Fund A], when known, are to be paid from the assets of the fund or, subject to the consent of the ATO, by the parties in such proportions as will achieve the percentage division ordered.
5.The husband is to receive the [Subaru] motor vehicle.
6.The wife is to receive the [Company J] options.
459I propose to give both parties an opportunity to consider my findings and the summary of the orders as set out above, with a view to submitting a Joint Minute of Proposed Orders to give effect to these reasons.
I certify that the preceding [459] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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