Aleksovski v Aleksovski

Biltoft v Biltoft [1995] FamCAFC 45; (1995) FLC 92-614

C & C [1998] FamCA 143 at [46]

Gadhavi & Gadhavi [2023] FedCFamC1A 117; (2023) 67 Fam LR 174

Holland & Holland [2017] FamCAFC 166; (2017) 57 Fam LR 84

Jabour & Jabour [2019] FamCAFC 78; (2019) FLC 93-898

Keating & Keating [2019] FamCAFC 46; (2019) 59 Fam LR 158

Kennon & Kennon [1997] FamCA 27

NHC & RCH [2004] FamCA 633; (2004) FLC 93-204

Norman & Norman [2010] FamCAFC 66

Pierce v Pierce [1998] FamCA 74; (1999) FLC 92-844

Van der Linden & Kordell [2010] FamCAFC 157

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

(a) That she will retain the property at B Street, Suburb C more specifically identified in certificate of title volume ... folio ... ("B Street") and pay the respondent such payment as is necessary to effect a division of the assets in Annexure A of 65 per cent to the applicant and 35 per cent to the respondent; or

(b) That B Street is to be sold to effect such payment to the respondent.

1. In the event the applicant nominates to retain B Street, she contemporaneously advise if she is retaining the D Shares in her name ("the D Shares") or selling the D Shares to assist in the payment to the respondent.
2. In the event the applicant nominates to retain B Street, and the D Shares; then within 90 days of the making of these orders ("the date"), the applicant pay the sum of $429,007 to the respondent ("the payment").
3. In the event the applicant nominates to retain B Street and sell the D Shares;

(a) the applicant forthwith do all acts and things to sell the D Shares; and

(b) as soon as practicable following the sale of the D Shares, the applicant advise the respondent in writing as to:

(i) the proceeds of sale of the shares; and

(ii) the likely capital gains tax arising from the sale of those shares as calculated by her accountant.

(c) in the event the respondent does not dispute the calculation of anticipated capital gains tax within 14 days of receipt of same, the applicant pay the respondent such sum as is necessary to effect a division of the assets in Annexure A of 65 per cent to the applicant and 35 per cent to the respondent ("the payment") with such payment to be made within 90 days of the making of these orders ("the date").

1. Contemporaneously with the payment referred to in Order 3 or 4(c) herein:

(a) the respondent do all acts and things and sign all such documents as may be necessary to transfer to the applicant, at her sole expense, the whole of his interest in B Street;

(b) the applicant do all acts and things and sign all documents necessary to discharge, at her sole expense, the mortgage number ... registered by Westpac Banking Corporation over the title of B Street (the Westpac home loan), so as to release the respondent from all liability thereunder and pay and indemnify the respondent with respect to any outgoings associated with B Street, including but not limited to rates, utilities or other liabilities;

(c) the parties do all acts and things and sign all documents necessary to discharge the Westpac home loan; and

(d) the respondent pay or cause to be paid:

(i) such sum to E Pty Ltd ("E Pty Ltd") as may be necessary to cause E Pty Ltd to remove their caveat registered over the title of B Street; and

(ii) such sum to Kennedy Partners as may be necessary to cause Kennedy Partners to remove their caveat registered over the title of B Street.

1. In the event the applicant nominates to sell B Street or in the event that the whole of the payment has not been made by the date (being a sale in default), the parties forthwith do all acts and things and sign all documents as may be necessary to place B Street on the market for sale.
2. For the purpose of the sale of B Street:

(a) the applicant forthwith nominate three real estate agents and three conveyancers to conduct the sale and the conveyancing, and the respondent select one agent ("the selling agent") and one conveyancer ("the conveyancer") from those nominated by the applicant within seven days of receiving the applicant's nominations;

(b) the parties do all acts and things and sign all documents as may be necessary to appoint the selling agent, including but not limited to signing a sale authority or similar document(s) within three business days of that document being presented or sent to either of them;

(c) the parties do all acts and things and sign all documents as may be necessary to engage the conveyancer including but not limited to signing a costs agreement or similar documents; and

(d) the method of sale, listing price, reserve price, sale price and any of the terms of sale be agreed upon between the parties in writing and in default of agreement, the terms and conditions of the default sale be determined by the valuer Mr F of G Valuers, with his costs to be met by the parties equally.

1. The proceeds of the B Street sale be applied as follows:

(a) to pay the costs, commissions and expenses of the sale, including but not limited to the agent's commission, advertising fees and conveyancer's costs;

(b) to discharge the Westpac home loan;

(c) such amount as is required to effect a 65 per cent division of the assets in Schedule A in favour of the applicant to the applicant; and

(d) the balance to Kennedy Partners, for payment out to the respondent or at his direction.

1. Contemporaneously with the receipt of the balance of the proceeds pursuant to order 8(d), the respondent pay or cause to be paid:

(a) such sum to E Pty Ltd as may be necessary to cause E Pty Ltd to remove their caveat registered over the title of B Street; and

(b) such sum to Kennedy Partners as may be necessary to cause the removal of their caveat over the title of B Street.

1. Pending the settlement of the sale of B Street:

(a) the applicant have sole use and occupation of B Street;

(b) the applicant pay as and when they fall due and payable, all mortgage, utilities, home insurance, council and water rates and water usage for B Street;

(c) the parties and in the respondent's case by himself, his servants and agents, hold their respective interests in B Street upon trust pursuant to these orders;

(d) the parties and in the respondent's case by himself, his servants and agents, be restrained by injunction from selling, transferring, encumbering or further encumbering their interest in B Street save with the written consent of the other party being first obtained.

(e) the applicant ensure B Street is presented in a neat and tidy fashion to any prospective purchaser and provide the agent with access to B Street as may be reasonably requested by the agent; and

(f) the parties be restrained by injunction from drawing on the Westpac home loan.

1. The applicant retain all of her right, title and interest in:

(a) the D Shares (if they are not sold);

(b) her Motor Vehicle 1, registration number ...;

(c) funds held in all bank accounts in her sole name including her ANZ account number ending ...79;

(d) the furniture and contents situated in B Street and otherwise in her possession at the date of these orders;

(e) her superannuation entitlements held in Superannuation Fund 1 (Account no. ...; Member No ...), currently in the amount of approximately $25,331;

(f) all other proprietary interests of whatsoever nature in the applicant's name, possession and/or control.

1. The applicant retain sole liability for and indemnify the respondent with respect to:

(a) her credit card liability with ANZ for ANZ Credit Card no ...30; and

(b) any other loan/s, lease/s, debt/s, credit card liability/ies or other liability/ies including but not limited to taxation liabilities held in her sole name, including but not limited to all loan amounts owed by the applicant to Mr H for payment of her legal fees of these proceedings and mortgage instalments.

1. The respondent retain all of his right, title and interest in:

(a) all funds held in all bank accounts in his sole name including his CBA account number ending ...83 and Westpac account number ending ...86 being the offset account to Westpac home loan account number ending ...21, in the amount of approximately $85;

(b) all monies held in the PP Lawyers trust account on his behalf, in the amount of approximately $350;

(c) his superannuation entitlements held in Superannuation Fund 2 (Account Number ...), currently in the amount of approximately $181,890;

(d) his motor vehicle collection;

(e) any and all cost amounts he receives from Mr J pursuant to the orders of the Supreme Court of Victoria made mid-2024; and

(f) his interest in K1 Company; K2 Company and L Pty Ltd.

1. The respondent retain sole liability for and indemnify the applicant with respect to:

(a) his liability owed to PP Lawyers for their costs to act on his behalf in relation to Supreme Court proceedings between he and Mr J in the amount of approximately $61,277;

(b) the $5,008 paid by E Pty Ltd in December 2024 so as to remove a Caveat lodged by M Pty Ltd, a creditor of N1 Pty Ltd ("N1 Pty Ltd"), against the respondent's interest in B Street, so he could obtain litigation funding from E Pty Ltd for his legal costs of these proceedings.

(c) his Westpac account number ending ...66;

(d) his Westpac MasterCard account number ending ...45;

(e) his Westpac MasterCard account number ending ...28;

(f) his liability owed to Kennedy Partners for their costs to act on his behalf in relation to these proceedings;

(g) his liability owed to E Pty Ltd, the finance provider for his legal costs of these proceedings;

(h) any and all contingent claims by the creditors of N3 Pty Ltd ("N3 Pty Ltd"), N1 Pty Ltd ("N1 Pty Ltd") and N2 Pty Ltd ("N2 Pty Ltd"), as asserted by the respondent;

(i) any other loan/s, lease/s, debt/s credit card liability/ies or other liability/ies including but not limited to taxation liabilities held in his sole name.

1. The respondent by himself, his servants and/ or agents indemnifies and keeps indemnified the applicant against all past, present or future manner of actions, suits, causes of action, arbitrations, debts, dues, costs, interest and demands whatsoever, both at law and in equity, in which the respondent by himself, his servants and/ or agents and/ or the Liquidators Mr P and Mr O of Q Partners and/ or the companies N1 Pty Ltd and/or N3 Pty Ltd and/or any creditors of the said companies, now or may have, at any time or times hereafter, against the applicant, or which may arise in respect of any act or thing done or omitted to be done by the applicant for any reason including:

(a) the applicant having been an employee and/or director and/or officer of either of the said companies; and/or

(b) the applicant's prior shareholding within either of the said companies; and/or

(c) any loan account/s previously in the applicant's name; and/or

(d) the receipt by the applicant of any moneys at any time from either of the said companies or otherwise.

1. The parties have liberty to apply with respect to:

(a) the sale of B Street; and

(b) the calculation of the capital gains taxation liability arising from the sale of the applicant's shares.

1. Unless otherwise specified in these orders and save for the purposes of enforcing the payment of any monies due under these or any subsequent orders:

(a) each party be solely entitled to the exclusion of the other to all other real and personal property (including choses-in-action and superannuation benefits) in the ownership or possession of such party, or to which that party is legally or beneficially entitled, as at the date of these orders;

(b) any monies standing to the credit of the parties in any joint bank account are to be divided equally and the parties do all such acts and things as may be necessary to close any joint bank account within 14 days of the date of these orders;

(c) all insurance policies remain the sole property of the owner named thereon;

(d) each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;

(e) each party be solely liable for and indemnify the other against any liability in the sole name of that party; and

(f) any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

1. All extant applications be dismissed.
2. Pursuant to s 90ST of the Family Law Act 1975 (Cth), the parties intend that these orders shall, as far as practicable, finally determine the financial relationship between them and avoid further proceedings between them.

Note: The form of the order is subject to the entry in the Court's records.

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

IF B Street, Suburb C - IS TO BE RETAINED BY THE APPLICANT

$1,600,000

less the Home Loan at

(355,981)

Or IF B Street, Suburb C TO BE SOLD, the net proceeds of sale after payment of:

the costs, commissions and expenses of the sale; and

the home loan mortgage to Westpac Bank

Applicant's shares IF THEY ARE TO BE RETAINED BY THE APPLICANT

Or IF THE SHARES ARE TO BE SOLD, the net proceeds of sale after payment LESS any Capital Gains Tax assessed to be payable on the sale of the shares

Applicant's entitlements with Superannuation Fund 1

Respondent's entitlements with Superannuation Fund 2

1. The parties in this matter were in a de facto relationship for about 16 years. The applications before the Court seek an adjustment of property following the parties' separation.
2. The major issues I must decide are:

(a) first, whether the respondent can rely on an affidavit filed by Ms S;

(b) secondly, whether the shares inherited by the applicant prior to cohabitation should be excluded from the joint pool;

(c) thirdly whether the respondent's post separation cash inheritance should be notionally added back into the joint pool;

(d) fourthly, whether the post separation liabilities incurred by the husband, substantially for legal fees in another action should be regarded as joint liabilities; and

(e) lastly, an appropriate division of the pool, given the parties' competing evidence as to contributions and s90SF(3) factors.

1. It was not in dispute that the superannuation would be treated as property and each party will retain their entitlements as part of their 'keep'.
2. In relation to contributions, it is not in dispute that the applicant contributed more at the commencement of the relationship. The issues in dispute are broadly how the parties' respective contributions should be weighed and assessed including the weight to be given to the applicant's greater initial contributions; and whether the respondent engaged in a course of conduct that made the applicant's contributions more arduous during the relationship.
3. In relation to the s 90SF(3) of the Family Law Act 1975 (Cth) ("the Act") considerations, the issues in dispute include:

(a) the parties' respective income earning capacities;

(b) what consideration, if any, should be given to various assets and liabilities that have arisen post separation; and

(c) whether there should be any consideration given to the contingent liability/ies that the respondent may face arising from the liquidation of the corporate entities.

1. The applicant wishes to retain the property at B Street, Suburb C ("B Street"). However, her ability to take on the mortgage and pay the respondent any monies is somewhat limited. It is her case that the respondent is entitled to approximately 27 per cent of the pool as she contends. That would, on her case, require no cash adjustment in his favour:

(a) The respondent would retain his superannuation (of $181,890), his motor vehicles ($3,550) and the notionally added back, post separation inheritance he has received - and spent (of $389,635). That would bring his 'keep' to $575,075. He would also be left with the legal fees incurred as a result of being involved in Supreme Court proceedings, post separation, regarding his business, and another business liability - totalling a little over $66,000. It is the applicant's case that as these were incurred long after the parties' separation, in circumstances where the respondent continued to operate the business and derive an income from it, and accordingly they should be met by the respondent only.

(b) the applicant would retain the home, and the mortgage on the property, her shares, her car and her superannuation. This would leave her with net assets of $1,570,123.

1. The applicant said this is a just and equitable outcome considering in particular the magnitude of her initial contributions, the use of those contributions, the respondent's conduct that she says made her contributions more onerous and the parties' income earning capacities.
2. The respondent seeks a division of the pool as he contends, 60 per cent in his favour;

(a) he proposes that the legal fees incurred by him in relation to the post separation commercial dispute should be treated as joint debts and paid from the proceeds of the sale of B Street;

(b) it is his case that whilst the applicant's initial contributions outweigh his, his post separation contributions outweigh those by the respondent. Overall, it is his case that contributions should be assessed 45 per cent/55 per cent in the applicant's favour; and

(c) he says that the considerations in s 90SF(3) of the Act weigh heavily in his favour. He says his income earning ability is lower than the applicant's, he has a number of personal liabilities, and he may face a significant liability if the liquidators take action against him personally. It was asserted these factors required an adjustment of 15 per cent in favour of the respondent.

1. On his case, the applicant would need to make a cash payment to him of $894,412 if she retained the home. Alternatively, the home would be sold and he would receive 60 per cent of the proceeds of sale together with a cash adjustment from the applicant of $148,000 to adjust for their respective 'keeps'.

1. The parties met in around 2000. The respondent says the parties commenced living together in around mid-2002. The applicant says cohabitation commenced about five months later. Nothing turns on the precise date cohabitation commenced.
2. The applicant owned an effectively unencumbered property at R Street, Suburb U, (R Street). That property had been purchased by her in mid-1993 for $160,100. She also had shares with the D organisation ("the D Shares") she had inherited.
3. The respondent operated a business.
4. In 2005, after receiving around $60,000 from a property settlement with his first wife, the respondent purchased a property at T Street, Suburb V ("Suburb V") for $200,000. He used the property settlement funds to do so. He did not discuss this with the applicant.
5. In 2006 the applicant sold R Street for around $439,000. She received net proceeds of about $422,283. The parties then purchased B Street for $860,000 as tenants in common, in equal shares. I am satisfied the parties funded the purchase of their half shares as follows:

(a) the applicant applied the proceeds of sale of R Street and used further inherited funds to contribute a total of around $460,000; and

(b) the respondent obtained a bank loan from Westpac Banking Corporation of $500,000 for which the applicant is guarantor. That mortgage was secured against the home.

1. In mid-2006 - just prior to settlement of B Street - the parties entered into a Deed of Indemnity ("the Deed"). I am satisfied the intention was to protect the applicant's contributions to her half share of B Street, and to ensure that the respondent was liable for the mortgage - to cover his half share.
2. The applicant learned about the respondent's property at Suburb V in early 2007. The parties then entered into a Deed of Variation pursuant to which the respondent granted the applicant a charge over the Suburb V property. At that time the respondent had incurred significant child support arrears of around $45,000.
3. The respondent sold the Suburb V property in around mid-2007 for $181,500. He paid $25,603 towards the discharge of his child support liabilities and retained the balance.
4. The applicant said the respondent began using steroids in around 2008. She said this marked a turn in their relationship as the respondent became more volatile and unpredictable.
5. In mid-2009 the respondent registered the business N3 Pty Ltd ("N3 Pty Ltd"), of which he is the sole director and shareholder.
6. In 2010 an area of the building at B Street was converted into a fully fitted commercial space for the applicant's business.
7. In mid-2011 the respondent was admitted into W Hospital and diagnosed with clinical depression or major depressive disorder. He was subsequently diagnosed with a mental health illness.
8. In early 2012 the respondent was told by his accountant that N3 Pty Ltd owed superannuation to its contractors, as the contractors were deemed employees. At that time the respondent had paid down the Westpac Home Loan to around $114,800.
9. In early 2012 the respondent was involved in a serious accident. He was in hospital and then subsequently moved to a rehabilitation facility.
10. The respondent received a payout of around $89,000 which he said he paid into the N3 Pty Ltd business account.
11. Whilst the respondent was recovering, he arranged for the applicant's son, Mr J ("Mr J"), to assist in running the business. They established N1 Pty Ltd ("N1 Pty Ltd") and N2 Pty Ltd ("N2 Pty Ltd") for which the respondent and Mr J were the directors and shareholders. These entities together with N3 Pty Ltd form the N Group ("the N Group"). Mr J and the respondent continued to operate the N Group thereafter.
12. In order to pay the superannuation owing by N3 Pty Ltd to its contractors, the respondent drew down on the Westpac home loan. After making a number of withdrawals, the liability to Westpac had increased to around $422,000 by June 2013. The respondent thereafter continued to make deposits into and withdrawals from the Westpac account without discussing these matters with the applicant.
13. The respondent said the parties separated in around February 2018 when the respondent left B Street and moved in to live with his mother. The applicant said she did not regard the relationship as over until 4 November 2018. She said the respondent regularly returned to B Street throughout 2018, collecting his clothes and belongings "in dribs and drabs" throughout most of 2018. The payment of the Westpac home loan and various utilities for the property continued to be made from the business accounts following separation.
14. In late 2018 the respondent attended at B Street. I accept the applicant's evidence that the respondent was furious and threatened to harm her. He smashed her mobile phone, and she ran to a neighbour's house. The respondent remained outside B Street pacing back and forth, screaming "I'll find you - you bitch. Where are you? I don't care how long it takes. I will get you. Call the police. I don't care." The applicant hid in the front garden of her neighbours for about 10 minutes before her neighbour came outside and brought her into their home. The police were called. By the time they arrived the respondent had left the premises.
15. The applicant was extremely distressed and frightened by the respondent's behaviour. She did not feel safe staying alone at B Street and she went to stay at the home of her daughter and two young grandchildren. The respondent then arrived at those premises in the early hours of the morning and threw an item at the window. He screamed and threatened the applicant, saying "come outside you fucking cunt. Come out right now, you whores, come out... I'm going to count to 10". The applicant's daughter called the police who arrived about eight minutes later. The respondent was still at the premises, screaming, when they arrived. The respondent then screamed at the police to 'put a bullet' in his head. It took eight officers to subdue him before he was taken away by ambulance to a psychiatric unit where he was admitted as an involuntary patient. He then spent time at the X Health Unit at the Y Hospital.
16. As a result of this incident the applicant obtained an Intervention Order sought by the police on her behalf. That order was made on a final basis, for three years and lapsed in late 2021.
17. Additionally, the applicant was diagnosed with Post Traumatic Stress Disorder and anxiety following the incident. She received weekly counselling for a number of months and was prescribed medication.
18. The applicant has remained in B Street since separation. The business continued to meet various additional outgoings in relation to the property until May 2022 when the applicant assumed responsibility for paying the rates, insurances and utilities. Mortgage payments continued to be made through the business until around August 2024.
19. In mid-2020 the respondent issued proceedings in Victorian Civil and Administrative Tribunal ("VCAT") for the sale and division of B Street.
20. In November 2020 the applicant issued proceedings with the then Federal Circuit Court of Australia seeking orders for property settlement. Orders were made for the respondent to discontinue the VCAT proceedings, which he did.
21. The respondent's mother died in 2021.
22. On 3 March 2021 by consent, the Initiating Application filed in November 2020 was struck out with a right of reinstatement. The applicant said that was because she believed she and the respondent - with the assistance of her adult sons - would be able to reach an agreement without litigation.
23. However, in mid-2021 negotiations stalled when the respondent was again admitted to hospital with poor mental health. At about that time the relationship between the respondent and Mr J became very strained, with the respondent asserting that he had been deceived by Mr J as to the financial management of the business - including how his salary was allocated - without the respondent's knowledge or consent.
24. By late 2022 the relationship between the respondent and Mr J had further deteriorated. The respondent believed Mr J was acting in bad faith and increasingly excluding him from the business. He engaged commercial solicitors - PP Lawyers - in late 2022/early 2023 "to assist" him in his dispute with Mr J.
25. The applicant issued these proceedings on 18 November 2022. She said she did so as she was concerned the respondent was deliberately thwarting her efforts to have the N Group valued. She said she was also concerned that the respondent and Mr J might do a deal between them in relation to the business to her detriment.
26. In early 2023 the respondent suffered another mental health decline and was again hospitalised.
27. On 28 February 2023 the respondent's adult daughter, Ms Z was appointed as his litigation guardian.
28. On 2 November 2023 the single expert provided the business valuation of the N Group, concluding that the equity in the N Group as at June 2022 was nil. Whilst the applicant asserted there were issues with the valuation, the single expert was not required for cross examination at trial.
29. In December 2023 the respondent received a cash amount of $389,635. This was paid into the trust account of PP Lawyers. Those monies were the respondent's inheritance - being his share of the proceeds of the sale of a property owned by his mother.
30. On 26 March 2024 the respondent sought to join Mr J and the N Group as parties to the family law proceedings.
31. In early 2024 Mr J filed an application in the Supreme Court of Victoria seeking orders to wind up N1 Pty Ltd and N2 Pty Ltd. The respondent sought that application be transferred to this Court.
32. On 10 May 2024 Mr J and the N Group were joined as parties to the family law proceedings.
33. Orders were made on about mid-2024 transferring the wind-up application to this Court. I understand an order was made for Mr J to pay the applicant's costs of and incidental to his transfer application. I do not know the quantum of those costs.
34. In mid-2024 Mr J and the respondent, by consent, appointed administrators for the N3 Pty Ltd and N1 Pty Ltd. The respondent deposed that became necessary as he received advice from his accountant that it appeared the N Group had been trading at a loss for at least several months.
35. In mid-2024, M Pty Ltd lodged a caveat over B Street. M Pty Ltd had been a supplier of N1 Pty Ltd and was owed $5,008. The respondent and Mr J had signed a charge in favour of the creditor in May 2018 and a caveat was subsequently lodged over B Street.
36. As at August 2024 the respondent directed the business to cease paying the home loan for B Street. At that time the administrators' reports to creditors were finalised. According to those reports, the N Group may have been trading whilst insolvent from at least as early as 1 July 2023. The reports set out that there may be action taken for insolvent training and this would be investigated should the company be placed into liquidation.
37. Leave was granted on 23 August 2024 for these family law property proceedings to be instituted out of time.
38. The voluntary administrators subsequently resolved to place N3 Pty Ltd and N1 Pty Ltd into liquidation. In mid-2024 the assets of the N Group were sold for $500,058 by the liquidators to AA Pty Ltd ("AA Pty Ltd") - an entity owned and controlled by Mr J's brother, Mr BB. The liquidators retained the funds paid to meet creditors and the costs of liquidation.
39. There is some dispute as to why the business was put into liquidation and ultimately sold to AA Pty Ltd for $500,000 in circumstances where the parties had apparently believed it was worth far more than that. Counsel for the respondent said this was as a result of a series of unfortunate events and a dispute between the respondent and his business partner. It is the applicant's case that the respondent made it difficult to value the N Group and that he "deliberately thwarted my efforts to have his share of the [N3 Pty Ltd] business properly valued to the point that it has now been sold and liquidators/administrators appointed". The applicant did not adduce sufficient evidence to support a finding that the respondent appointed liquidators to reduce the pool, or that he acted in a reckless or wanton manner in relation to the business.
40. The respondent granted his family lawyers, Kennedy Partners, a charge over B Street, and they have subsequently lodged a caveat as security for their costs. They are owed a further $61,143.
41. On 12 September 2024 the parties agreed to adjourn the final hearing that was at that time listed to commence on 6 November 2024. That was to give the liquidators time to determine whether they wished to intervene in these proceedings on behalf of creditors. They have not done so.
42. In late 2024 the respondent was again hospitalised having experienced a further mental health breakdown.
43. In late 2024 E Pty Ltd ("E Pty Ltd") also lodged a caveat against B Street. This was for funding secured on behalf of the respondent for the legal fees in relation to these proceedings. In order for E Pty Ltd to advance funding (and secure their own caveat), the sum of $5,008 had to be paid to M Pty Ltd - being a creditor who had lodged a caveat over B Street in relation to goods supplied to the company. That creditor's caveat had to be discharged (and the funds owing paid) so that E Pty Ltd could lodge their own caveat. The respondent asserts the sum of $5,008 should be treated as a joint liability.
44. The liquidation is ongoing and may take months, or even years, to finalise. It is the respondent's case that the liquidators have identified a number of potential breaches of director's duties by both the respondent and Mr J, which could see either of them being held personally liable.

1. It has not been possible to include every aspect of each of the parties' evidence. However, I have taken all the evidence into account. Just because I have not mentioned something in these reasons does not mean that I have not considered it.
2. Section 140 of the Evidence Act 1995 (Cth) sets out that the standard of proof in these proceedings is to a balance of probabilities.

(a) Amended Initiating Application dated 20 January 2025;

(b) her trial affidavit dated 22 January 2025;

(c) Outline of Case dated 7 February 2025;

(d) Financial Statement dated 20 January 2025;

(e) affidavit of Dr CC dated 20 January 2025;

(f) affidavit of Mr H dated 20 January 2025;

(g) affidavit of Mr DD dated 20 January 2025;

(h) affidavit of Mr EE dated 20 January 2025;

(i) affidavit of Ms FF dated 6 February 2025;

(j) affidavit of Mr H dated 6 February 2025;

(k) affidavit of Mr J dated 6 February 2025;

(l) affidavit of Mr BB dated 6 February 2025; and

(m) affidavit in reply dated 6 February 2025.

1. The applicant gave evidence and was cross examined. She gave her evidence in a genuine and considered manner. She impressed as candid and authentic, with a reliable memory.
2. The applicant's witnesses were not required for cross examination. Accordingly, their evidence is unchallenged. However, there were some matters in the material that were the subject of objection. Mostly those matters were agreed, and in relation to some parts I was required to rule. I have had regard only to the redacted affidavits.

(a) Further Amended Response to Initiating Application dated 29 January 2025;

(b) his trial affidavit dated 29 January 2025;

(c) Outline of Case dated 6 February 2025;

(d) Financial Statement dated 29 January 2025;

(e) affidavit of Mr GG dated 29 January 2025; and

(f) affidavit of Dr HH dated 4 February 2025.

1. The respondent was cross examined. It is not in dispute that the respondent has issues with his memory. It was apparent that he became overwhelmed and confused at times giving his evidence. His recall was poor and I have limited confidence in the evidence he gave. I prefer the evidence of the applicant over that of the respondent's where their recollections differ.
2. The respondent's treating medical practitioner was not required for cross examination. Accordingly, his evidence is also unchallenged.
3. The parties also relied on the affidavit of Mr F, single expert, dated 20 January 2025 annexing reports dated 5 May 2023 and 10 January 2025.

1. It is the respondent's case that the affidavit of Ms S - a solicitor at PP Lawyers - filed on 30 January 2025 should be admitted into evidence at this hearing. That was opposed by the applicant.
2. The affidavit and the annexures to it span over 314 pages. Ms S outlined that she was engaged to provide:

a qualified advice as to the likely liability and/or other financial exposure of [the respondent] in connection with the liquidations of each of [N3 Pty Ltd] (in Liq) (N3 Pty Ltd) and [N1 Pty Ltd] (in Liq) (N1 Pty Ltd), collectively [N Group]] (Advice).

The Advice is sought in the context of the impending hearing of the Family Law property settlement application issued against [the respondent] by his former de facto partner.

1. Ms S set out that the liquidations are still "in their infancy" as these matters can take years to resolve. She also noted that the liquidators cannot take any steps to assess any claim, or the viability of any claim against the respondent without first knowing what - if any - property settlement he will receive - as this would be the only asset against which the liquidator could pursue any claim.
2. It is Ms S's opinion that the most substantial exposure to a claim against the respondent arises in circumstances where it can be established that the N Group was trading whilst insolvent. She estimated the maximum claim could be for around $1.15 million - being made up of:

(a) all N Group debts incurred; and

(b) an indemnification for all monies paid to the Australian Taxation Office - and required to be repaid to the liquidator -

1. It is the respondent's case that whilst this is a contingent liability, the quantum of which cannot be known, the time it might be crystalised cannot be known, and the likelihood of whether it ever crystalises cannot be assessed, the Court should nevertheless have regard to it when determining an appropriate division of assets. It is his case that this contingent liability, taken together with the other liabilities of the respondent and the other relevant s 90SF(3) factors are such that a significant adjustment in his favour is warranted.
2. The applicant sought that the affidavit not be admitted into evidence. It was asserted that:

(a) the evidence falls foul of the single expert rules - Ms S having been unilaterally appointed by the respondent, and having been his solicitor in the commercial dispute he had with Mr J, and no effort was made to jointly appoint an expert on this matter;

(b) the evidence given as to risk is general and unable to be properly quantified; and

(c) the risk that any claim is pursued is similarly unable to be properly assessed, and in any event, the report of Ms S outlines a number of defences that could be successfully argued by the respondent in the event any claim was mounted against him.

1. The respondent asserted the evidence was not being put forward as a single expert. Rather, it was asserted that Ms S was akin to a treating medical practitioner; being an expert retained for a purpose other than for the giving of advice, or evidence or for the preparation of a report for these proceedings; see r 7.01(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules"). Thus it was asserted that Ms S's affidavit was excluded from the scope of the expert evidence rules. It was asserted that in the same way that a treating health practitioner provides a report to the Court, Ms S has reported as to the exposure of the respondent.
2. I note that r 7.01(b) of the Rules does not allow an expert to give evidence 'at large'. Rather, it is confined to evidence:

(i) about that expert's involvement with a party, child or subject matter of a proceeding; and

(ii) describing the reasons for the expert's involvement and the results of that involvement.

1. Ms S's evidence goes well beyond that. Her evidence is not confined to her involvement with the respondent as his commercial solicitor in the dispute he had with Mr J, describing the reasons for that involvement with him or the results of that involvement. Indeed, the outset of her report notes - as already recorded - that she was engaged to provide advice as to the likely financial exposure of the respondent. Moreover, the report was sought "in the context of" this hearing to identify the respondent's contingent liability "in order that the same can be taken into account by the Court when assessing and making final orders for alteration of property interests".
2. In the circumstances, I do not permit the admission of Ms S's affidavit into evidence. The question of any contingent liability should have been considered by a jointly appointed single expert.
3. In the absence of Ms S's evidence, I will however have regard to the liquidator's reports which were tendered.

ASSETS, LIABILITIES AND FINANCIAL RESOURCES AS AT THE DATE OF FINAL HEARING

1. The majority of the parties' respective superannuation entitlements were accumulated during the course of the relationship. They parties agree their respective entitlements should be included in the one pool of assets, given their ages. I agree that is a sensible approach.
2. The parties otherwise agree the following reflects their assets, liabilities and financial resources as at the date of the hearing:

Costs to be paid by Mr J pursuant to the orders of the Supreme Court of Victoria made mid-2024

Applicant's entitlements with Superannuation Fund 1

Respondent's entitlements with Superannuation Fund 2

1. As already set out the issues in dispute in relation to the joint pool are:

(a) whether the funds owing to PP Lawyers of $61,227 and the funds paid by E Pty Ltd to discharge a business debt of $5,008 should be included as joint liabilities;

(b) whether the applicant's share portfolio should be included or excluded from the pool; and

(c) whether the respondent's inheritance received in late 2023 of $389,635 should be notionally added back into the pool.

1. It is not in dispute that the parties have - post separation - incurred liabilities, and have acquired the following assets:

ANZ credit card ...30 liability in the name of the applicant

Westpac account ...83 in the name of the respondent

Funds held on behalf of the respondent in the PP Lawyers trust account

Kennedy Partners outstanding fees (for family law proceedings) owed by respondent

E Pty Ltd - amount referable to family law fees - owed by respondent

1. It is agreed that these amounts ought not be included in the joint pool.
2. However, it is the respondent's assertion that his liabilities should be taken into account when considering the matters set out at s 90SF(3)(r) of the Act. In addition, he asserts he has a contingent liability of as much as $1,155,082 which should also be taken into account.
3. It is the applicant's case that she has borrowed funds of $378,711 from Mr H substantially to pay her legal fees, and she will, at some point have to repay him.

$61,277 owing to PP Lawyers and $5,008 owing to E Pty Ltd

1. The respondent asserts that the fees owing to PP Lawyers of $61,277 and the sum of $5,008 paid out for the debt to M Pty Ltd should be regarded as joint liabilities.
2. The funds to M Pty Ltd were paid to lift the caveat M Pty Ltd had lodged. This debt had to be paid to enable the respondent to obtain litigation funding through E Pty Ltd and he extended his funding with E Pty Ltd to make that payment. The liability to M Pty Ltd was a liability of N1 Pty Ltd, acquired either during the relationship or close to separation. It is the respondent's assertion that should be treated as a joint debt.
3. PP Lawyers are the lawyers engaged by the respondent in relation to the dispute with Mr J. Mr J and the respondent each engaged commercial lawyers from early 2023 when they were experiencing significant difficulties working with each other.
4. As to the dispute between the business partners;

(a) It is the respondent's evidence that Mr J ran the business books in a manner that financially advantaged Mr J and disadvantaged the respondent, and that he did so without the respondent's knowledge or consent. The respondent also deposed that the payment of utility bills on B Street from the business was set up by Mr J and without the respondent's knowledge.

(b) Mr J denied any impropriety on his behalf. He further asserted that the respondent insisted that the utility bills for B Street were met post separation from the business accounts. Additionally, Mr J asserted that the respondent made unauthorised payments from the business accounts which impacted on cash flow, which were unexplained by the respondent.

1. As already observed, Mr J's evidence was unchallenged as he was not required for cross examination.
2. Mr J engaged JJ Lawyers to act for him. In a letter dated February 2023 JJ Lawyers wrote to PP Lawyers and advised if agreements were not reached, a liquidator would need to be appointed. There were further communications between JJ Lawyers and PP Lawyers throughout 2023.
3. Litigation in the Supreme Court was commenced by Mr J in early 2024 in which he sought the windup of the N Group. Mr J said he brought that application following the respondent's Application in a Proceeding in this Court in which he sought to join Mr J and the corporate entities to these proceedings. Mr J said he wanted to avoid becoming embroiled in costly and lengthy litigation between the applicant and respondent.
4. It is the respondent's assertion that the legal fees were incurred in trying to maintain the business. He says if the litigation had been fruitful, and the business continued to operate successfully, there is no doubt the business would have been included in the pool. Indeed, when the proceedings commenced it was the applicant's case that the business be valued and included in the pool. Unfortunately, the business was valued at far less than the parties anticipated and is now in liquidation. In circumstances where it was not asserted that the respondent acted improperly in operating the business - and where no argument as to wastage was made - the respondent says these liabilities are properly regarded as joint.
5. It is the applicant's assertion that the legal fees were incurred well post separation and in relation to a dispute between the respondent and his business partner of which she had no involvement or knowledge. She says accordingly these liabilities should be borne by the respondent only. She says further in circumstances where the respondent was drawing a reasonable income from the business, he could have, and should have, arranged his financial affairs to pay the legal fees in full as they were incurred, and it is wholly inappropriate that these fees would be paid to the husband's commercial lawyers with priority over her entitlement.
6. In relation to the liability of $5,008, that debt to the secured creditor was incurred prior to or around the date of separation. It was the applicant's case that the respondent could have, and should have, discharged that debt from the business income or his own income at any stage and it is inappropriate that the respondent seeks that payment be made to a creditor with priority over her entitlement.
7. The respondent continued to operate the business post separation - deriving an income from doing so. According to his tax returns, the respondent's income was $179,998 for the year ending 30 June 2019; $180,132 for the year ending 30 June 2020; and $327,000 for the year ending 2021. The applicant did not benefit from that income beyond business funds being utilised to meet the mortgage and some outgoings in relation to B Street. It was the submission of counsel for the respondent that these figures do not reflect the income her client actually received - and some of the income allocated to the respondent was 'on paper' only. For instance, some funds were allegedly used to reduce his loan accounts. However, I was not provided with any meaningful evidence to support these assertions, and I am satisfied that the respondent's income was as he has declared it to the Australian Taxation Office ("ATO").
8. It is a matter of discretion whether or not to take post separation transactions and liabilities into account; see NHC & RCH [2004] FamCA 633; (2004) FLC 93-204.
9. In the matter of Biltoft v Biltoft [1995] FamCAFC 45; (1995) FLC 92-614 at 82,125, their Honours said, "the assessment of debts and liabilities is not necessarily arrived at by a strict mathematical or accountancy approach in all cases...The court can make an allowance for a particular liability if appropriate to do so". That is, the Court can disregard an asserted liability if it is sufficiently uncertain, or unlikely to be enforced. There may also be circumstances in which it might be unjust to include a liability. For instance, if the liability has been incurred deliberately, or in reckless disregard of the other party's potential entitlement.
10. For the reasons that follow, I am satisfied that it is not appropriate to include these liabilities on the joint balance sheet.
11. As to the outstanding legal fees, these were incurred by the respondent as a result of a dispute between himself and Mr J some years after separation. Indeed, the respondent deposed that the legal fees were incurred to "try and save my business from [Mr J's] mismanagement". The applicant had no involvement with the business and no oversight of it. She was also not involved in the legal dispute between the co-directors. Mr J denies mismanaging the business, and he was not required for cross examination.
12. The sum of $61,277 is the outstanding fees. It is not all of the fees that PP Lawyers have charged the respondent. No evidence was adduced that detailed the total amount billed by PP Lawyers; when the amounts were incurred; what work was done to incur each bill; or the amounts paid. I do not know what work was undertaken in relation to the current outstanding fees or what period the bill is referable to.
13. The respondent agreed to appoint administrators for the N Group, less than four months after the Supreme Court proceedings were instituted by Mr J. The administrators quickly determined to place the business into liquidation. Had there been an agreement by the respondent earlier to this course, the legal fees may have been reduced. In the absence of detailed evidence from the respondent as to what fees were charged, when and for what work, this cannot be quantified.
14. When the Supreme Court action was transferred to this Court by way of orders mid-2024, orders were made for Mr J to pay the respondent's costs of and incidental to the transfer application. I have not been advised how much those costs will be or are likely to be. There was no evidence as to the recoverability or otherwise of those costs. The respondent deposed that any monies received from Mr J in payment of that costs order will be applied in payment of the outstanding costs to PP Lawyers.
15. As set out, I do not know the full amount of legal fees paid by the respondent to PP Lawyers. The respondent deposed that in early 2023 the respondent owed PP Lawyers $25,000. He deposed that in late 2023 his inheritance of $389,635 "was paid to the trust account of my commercial solicitors" and has been "entirely exhausted".
16. The respondent said he used his inheritance to pay PP Lawyers $139,730. He also used it to pay $197,769 to his family lawyers. The respondent used the balance of the funds to meet a personal tax debt, to pay one month rent and bond, to pay his personal accountant, to meet living expenses and to pay for "Forensic IT" attendance at the business premises in March 2024. That is, the respondent prioritised the payment of personal expenses from his inheritance - including legal fees in these proceedings - over payment in full of the PP Lawyers fees. He could have prioritised payment of the commercial lawyers - paying them in full and reducing the amount his paid to his family lawyers. It is notable that the parties agree that (subject to any costs application) they will each be responsible for their own legal fees incurred in the family law litigation.
17. I note further that Ms S was engaged by the respondent to give evidence in these proceedings. She deposed a detailed and lengthy affidavit. I do not know what portion of the outstanding PP Lawyers fees can be attributed to Ms S's time and expertise in the preparation of that affidavit.
18. As noted, the respondent's argument is that the legal fees to PP Lawyers were incurred in his efforts to resolve the partnership dispute and maintain the business. Given that argument, I am unclear as to why the respondent seeks only the payment of the remaining sum of $61,277 currently outstanding to PP Lawyers be treated as a joint liability rather than seeking the whole of the legal fees incurred be treated as a joint liability. There were no submissions made as to why the remaining fees should be treated differently (and regarded as a joint debt) to the fees already paid (and not claimed as a joint debt). The parties have included the costs the respondent might recover against Mr J as an item of property in the respondent's name, the quantum of which is unknown. That still does not, in my view, adequately explain why the costs already paid are to be treated differently to the costs that remain to be paid.
19. In all the circumstances - including where I have no real understanding of how and when the costs sought to be included as a joint liability were actually incurred and for what work; where the costs were incurred so long after separation in relation to an entity in which the applicant had no involvement and which the respondent continued to operate; where the respondent had a post separation inheritance which is excluded from the pool, but from which he could have satisfied the costs had he wished to do so; and where the respondent has a costs order in his favour but no evidence as to the potential quantum of costs, and no evidence those costs will not be recoverable - I am not of the view that I should include the remaining outstanding legal fees owed to PP Lawyers as a joint liability.
20. In relation to the sum of $5,008, I am satisfied that business liability could have been paid by the respondent from business income. He could also have paid it from his inheritance received post separation. He chose not to do so but instead determined to prioritise payment of other expenses for his sole benefit. It is not, in my view, appropriate for a business liability to be paid as a joint debt when the respondent has managed the business to the exclusion of the applicant post separation, including drawing a salary from the business (until sometime in 2024) and has had the resources post separation to ensure the liability was discharged.

1. The applicant asserted that the D Shares in her name should be excluded from the pool. She said those shares were inherited by her prior to the commencement of the relationship - and she has simply retained them, making no further contribution to them other than reinvesting dividends as they were received. It was further argued that neither the applicant nor the respondent made financial contributions towards those shares, other than by way of the applicant reinvesting dividends. The shares effectively remained at all times the applicant's property and there was no intermingling of the shares with any other part of the asset pool.
2. At the commencement of the relationship those shares were worth $26,733. They are now worth over $287,500.
3. I am required to begin consideration of whether it is just and equitable to make a property settlement by identifying the existing legal and equitable interests of the parties. This was made plain by the High Court in Stanford v Stanford (2012) 247 CLR 108 ("Stanford"). The shares clearly fall within the definition of property to which the applicant is presently entitled. That they were in existence prior the relationship does not of itself justify their exclusion from the pool. Nor does the reality that the respondent did not contribute directly to those shares in any way. As noted by the Full Court in Norman & Norman [2010] FamCAFC 66 at [38]:

"the property of the parties or either or them" includes all property of whatever type, whenever acquired (see Hickey & Hickey [2003] FamCA 395; (2003) FLC 93-143 at [40]). Further, it is not necessary to prove that any particular form of contribution is connected with any particular part of the property ...

1. These propositions were more recently referred to with approval in Holland & Holland [2017] FamCAFC 166; (2017) 57 Fam LR 84 [18-19] and again in Jabour & Jabour [2019] FamCAFC 78; (2019) FLC 93-898 ("Jabour").
2. I am satisfied that it is appropriate the shares are included in the joint pool.

1. It is the applicant's assertion that the sum of $389,635 received by the respondent in late 2023 by way of inheritance should be notionally added back into the asset pool. That is opposed by the respondent.
2. It is established law that it is a matter of discretion whether or not the Court will notionally addback assets, and the case law makes is clear that notionally adding assets disposed of back into the pool is the exception rather than the rule. Generally, the Court is to take the property of the parties as they are at the date of the final hearing and items will only be notionally added back where justice and equity require it. It is not simply a matter that the Court will add back assets that existed at the date of separation which have been dissipated by the time of the final hearing. Parties are not expected to go into a state of suspended economic animation at separation, and reasonable expenditure does not usually fall within the categories of accepted addbacks. Parties are entitled to conduct themselves post separation "in a manner that is consistent with properly getting on with their lives" as set out in C & C [1998] FamCA 143 at [46].
3. The respondent's mother died three years after the parties' separated, and the inheritance monies were ultimately received by the respondent five years post separation. The funds have been expended by the respondent substantially on legal fees paid to his family law and commercial lawyers, and partly to meet his living expenses. There was no suggestion that the funds had been wasted or spent unreasonably.
4. In the circumstances, I am not of the view that the inheritance should be notionally added back. Rather, this is a matter in which justice and equity can be achieved by consideration of the issue under s 90SF(3)(r) of the Act rather than by adding it back.

1. Accordingly, I am satisfied the relevant pool is as follows:

Costs to be paid by Mr J pursuant to the orders of the Supreme Court of Victoria made mid-2024

Applicant's entitlements with Superannuation Fund 1

Respondent's entitlements with Superannuation Fund 2

IS IT JUST AND EQUITABLE THAT AN ORDER BE MADE?

1. Before making any order altering the interests of the applicant and respondent in relevant property pursuant to s 90SM(3) of the Act, I must first be satisfied it is just and equitable for me to do so; see Stanford.
2. If I am satisfied it is just and equitable for an order to be made, I am then empowered to make such order as I consider appropriate taking into account a number of factors as set out in ss 90SM(4) and 90SF(3) of the Act, insofar as they are relevant.
3. Their Honours said in Stanford at [36] that the expression:

... is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.

1. Their Honours further said there is no presumption that the parties' entitlements in the existing asset pool should be altered, or that one party has the right to have the property of the parties divided between them only on the basis of the considerations set out in the legislation.
2. The High Court in Stanford made it clear that I cannot conflate my determination pursuant to s 90SM(3) of the Act with my determination pursuant to s 90SM(4) of the Act. These are separate enquiries.
3. In these proceedings, both of the parties urge the Court that it is just and equitable that orders be made to alter their interests in their property. It is not sufficient that the parties simply agree that there should be an order made. I must be satisfied myself that such orders are appropriate.
4. In my view, this is one of the "vast majority of cases" referred to by the plurality of the High Court in Bevan v Bevan [2013] FamCAFC 116; (2013) FLC 93-545 at [164] in which the requirements of s 90SM(3) of the Act are fairly readily satisfied. It is plainly just and equitable to make an order pursuant to s 90SM(4) of the Act in these proceedings for a division of property between the parties. If no order was made adjusting the parties' rights in their existing legal and equitable interests, the contributions of each of the parties, and their needs moving forward, after a relationship spanning approximately 16 years could not be properly recognised.

1. This is a matter in which for reasons to which I will shortly turn, I am satisfied that both parties worked as best as they could, over the course of their 16-year relationship. They are now disappointed in the available pool. The respondent suffered various setbacks - including poor mental health, and a serious accident. The business - managed jointly by the respondent and the applicant's son - has not prospered as the parties had hoped. However, as already observed, the applicant has not provided any probative evidence to establish that the diminution in the value of the business was because of the respondent's recklessness or wastage. Nor has the respondent demonstrated that the business was mismanaged by Mr J.
2. The applicant wishes to retain B Street and has sought to characterise the joint pool and assert contributions and 'future needs' in such a way that will enable her to do so. She is aggrieved that the respondent has not discharged the mortgage over B Street, which she regards as his obligation to do, and as was reflected in the Deeds entered into between the parties in 2006 and 2007. However, my role is not to engineer a result that will enable the applicant to remain in the home she wishes to retain at the expense of properly evaluating the matters to which I am directed in the legislation. Nor is it my role to implement an agreement the parties came to in 2006 when they purchased a property. Rather, I must determine what orders are just and equitable and otherwise proper in all the circumstances.
3. In coming to that determination, as observed by their Honours Baker and Rowlands JJ in Aleksovski v Aleksovski [1996] FamCAFC 111; (1996) FLC 92-705 ("Aleksovski") at 83,437 I must:

weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.

1. At 83,443 of Aleksovski his Honour Kay J said:

The Judge must weigh up various areas of contribution. In a short marriage, significant weight might be given to a large capital contribution. In a long marriage, other factors often assume great significance and ought not be left almost unseen by eyes dazzled by the magnitude of recently acquired capital... What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship.

1. This is an holistic assessment, and not an accounting or mathematical exercise: Dickons v Dickons (2012) 50 Fam LR 244 at [21] and [25].

1. The applicant owned the R Street property at the commencement of the relationship. It was effectively unencumbered. As noted, it was sold about three years into the relationship for around $439,000.
2. At the commencement of the relationship the applicant also had cash of approximately $127,000 she had inherited. She had shares at that time worth $26,733. They are now worth over $287,500. She also had a motor vehicle.
3. The respondent operated a business through L Pty Ltd. I do not know what it was then worth.
4. Any superannuation either party had at that time was likely modest.
5. The applicant's initial contribution of an unencumbered property was instrumental in the parties being able to later purchase B Street which remains as the single biggest asset of the parties. That property has risen in value largely as a result of market forces. It could not have been purchased but for the contribution of the proceeds of sale of the applicant's previously owned property.
6. However, I must not weigh the respondent's contributions "against" the initial contribution by the applicant. Rather, I must treat the contribution by the applicant of her unencumbered property "as one of the myriad of the contributions made"; see Jabour at [73].

1. The parties lived together in the applicant's R Street property. The respondent made no direct contributions to that property. I accept the applicant's evidence that for about the first two years the respondent lived in the R Street property he made no financial contributions to the household, and it fell to her to meet all the outgoings, including groceries, utilities, rates and insurances on behalf of both parties.
2. After about two years she said the respondent made some contributions towards utilities and groceries.
3. I am satisfied the applicant applied approximately $33,000 by way of cash funds inherited from her mother between 2005 and 2006 to improve the R Street property before it was sold in late 2006. That included a series of renovations to the property.
4. The applicant received net proceeds of sale of $422,283. She applied the entire of the proceeds of sale towards the purchase of B Street which was purchased for $860,000. I note the respondent's evidence that in relation to the net proceeds received by the applicant, that was "her business" and he "didn't get into figures with her".
5. There is some dispute as to who paid the deposit of $40,000. The applicant said she recalled paying the deposit taking the funds from one of her term deposits she had opened using inheritance funds. As already set out, the respondent was a poor historian, with limited recall of various events. I accept the evidence of the applicant as to her recollection as to the payment of the deposit. Accordingly, her contribution towards the purchase of B Street was a little over $462,000.
6. The respondent did not contribute any funds towards the property at the time it was purchased. When the mortgage was initially taken out on B Street the loan balance was $500,000. It was the parties' agreement that the respondent would pay off that mortgage, bringing his contributions up to those of the applicant. The Deeds entered into reflect that intention.
7. The respondent received about $60,000 by way of a property settlement from his former wife. I am satisfied he kept those funds separate from the applicant's moneys and used them for his own use and benefit. He purchased a property at Suburb V without discussing this with the applicant. The respondent said he believed he owed about $25,000 in unpaid child support to his first wife at about the time of purchase.
8. The respondent then sold Suburb V for around $181,500 - less than he had purchased it for, asserting "child support made me sell it". I anticipate there would have been other costs associated with the sale. I understand the child support liability had grown to around $44,000 at the time Suburb V was sold. The respondent settled that liability, paying approximately $25,600 by way of child support from the proceeds of sale.
9. It was the respondent's evidence that he contributed the balance of the proceeds towards B Street. However, he adduced no evidence to support this claim. In his oral evidence he said he contributed $40,000 from the sale of Suburb V at the time of purchase of B Street, asserting that he "actually landed" the purchase of the home because he had those net proceeds from the sale of Suburb V available to contribute. Clearly, the respondent's evidence could not be correct. B Street was purchased well prior to the sale of Suburb V and accordingly he could not have had the proceeds of sale from Suburb V at the time B Street was purchased.
10. The parties undertook a fit out of an area of the building at B Street, in 2010, enabling the applicant to use it as the premises from which she conducted her business. There is some dispute as to who paid for that conversion - with the respondent asserting he paid about $80,000 towards the fit out. That was disputed by the applicant who said the parties contributed about equally financially. As already observed, the respondent had a poor memory. The applicant appeared to be a more reliable witness. She was able to give reasonably detailed evidence about the work done as part of the conversion, including that the respondent constructed some storage, and the purchase by her of commercial grade equipment. I accept her evidence over that of the respondent and find that the parties contributed equally by way of finances to that conversion. I accept the respondent used his skills to install some of the equipment.
11. I am satisfied that in 2012 the applicant provided additional care for the respondent during his convalescence after his accident. I accept she had to reduce her working hours, help him around the home, and drive him to and from medical appointments over the next 12 months.
12. The parties had a traditional division of labour in the home, with the applicant being primarily responsible for homemaking duties, and the respondent undertaking duties in maintaining the garden at B Street.
13. Both parties worked in paid employment during the relationship. They maintained separate bank accounts. The applicant deposed that the respondent paid the utilities, home and contents insurance and the rates for B Street. The parties each contributed to groceries and to holidays and entertainment. It appeared each party maintained control over their respective incomes.
14. Over the course of the relationship the respondent had full control of the mortgage encumbering B Street. He made payments into it and made significant withdrawals from it without discussion with or reference to the applicant. By 2012 the respondent had reduced the mortgage encumbering B Street to approximately $115,000. At the time of separation, the mortgage balance had increased to around $440,000 - being a net reduction of just $60,000 over 12 years.
15. The applicant asserts the respondent's behaviour made her contributions more arduous. It was the applicant's evidence that in around 2008 the respondent commenced using steroids. She said that his behaviour changed dramatically - he became increasingly unpredictable, volatile and frightening when he got angry. She deposed he would "snap suddenly", swear excessively and at times was aggressive and hostile. In the unchallenged evidence of Dr HH, it is recorded that in 2015 the respondent was prescribed periodic testosterone injections. The applicant denied that the respondent was only taking prescribed hormone replacement medication and said she was aware he purchased - and used - steroids that were not prescribed.
16. The applicant deposed further that after his mental breakdown in mid-2011 she became scared of living with the respondent. She said he went through:

...an awful cycle of him being okay for a while and then going off the rails completely, where he would be angry, abusive towards me, paranoid, accuse me of having affairs, would disappear for periods of time, all of which left me feeling incredibly drained by the relationship.

1. He was diagnosed with clinical depression and then a mental health illness.
2. The applicant's evidence was that she spent considerable time trying to assist the respondent manage his significant mental health issues and his drug abuse issues. That included his abuse of steroids that started in 2008 and a dependency on medication after his accident in 2012. His behaviour in late 2018 was clearly frightening and caused the applicant considerable distress for an ongoing period.
3. The case law makes it clear that I must be firstly satisfied that a party has engaged in a course of violent conduct, and secondly, that the violence had an impact on the other party's capacity to contribute; Kennon & Kennon [1997] FamCA 27 and Keating & Keating [2019] FamCAFC 46; (2019) 59 Fam LR 158.
4. I accept that the respondent would have been 'difficult to live with' at times. However, I cannot be satisfied on the evidence that the respondent engaged in a course of conduct, or a pattern or coercive and controlling behaviour that cumulatively made the applicant's contributions more arduous. In my view, the evidence was not sufficiently particularised for those findings to be made.
5. Some of the applicant's complaints about the respondent's behaviours arose in the context of addiction to medication after a serious accident. Some were made in the context of his serious mental health conditions. I do accept that at times the respondent was experiencing poor mental health and medical issues the applicant would have undertaken more responsibilities around the home - and spent more time supporting and assisting the respondent. I take the applicant's increased responsibilities at those times into account.

1. The applicant has had benefit of living in the former matrimonial home from which the respondent has been excluded for over six years and in relation to which the respondent continued to pay the mortgage until July 2024. At the time of separation, the mortgage was about $440,000. In June 2024 the amount owing was approximately $350,000. It is now around $353,000. Accordingly, in six years post separation the respondent reduced the liability by approximately $90,000. The applicant has now commenced meeting the mortgage repayments.
2. The business continued to meet various outgoings in relation to B Street until May 2022. At that time the applicant began paying for the rates, insurances and utilities. In addition, post separation, the applicant has maintained the property, and undertaken some improvements. This included improvements of about $8,000. She has also continued to attend to its maintenance and upkeep.

RELEVANT CONSIDERATIONS PURSUANT TO SECTION 90SF(3) OF THE ACT

1. The applicant is 66 years old. She has not re-partnered. She is self employed, operating from the customised, converted area at B Street. She earns a modest income of about $44,720 per annum from that endeavour. In addition, she receives dividends/franking credits of around $11,067 from her share portfolio.
2. I accept that if B Street is sold the applicant's income will suffer significantly. If she continues to work in her present occupation, she will have to lease facilities at a commercial site which she said would be disproportionately expensive to the income she can derive. I accept that the applicant's current clients may not wish to continue at a commercial site. Additionally, if B Street is sold, it is not known where the applicant will live. I accept it would likely impact the applicant's client base if she was required to relocate far from her current location to re-house herself.
3. If she sells her shares to pay funds to the respondent - the applicant will lose the income she currently derives from them. She will also have to pay capital gains tax. The applicant said she had received advice that the likely capital gains tax payable would be approximately $65,543. This was not the subject of challenge.
4. The respondent is 54 years old. His financial situation is also poor. He is unemployed but said he undertakes some occasional odd jobs for family and friends. He lives with his sister and is not required to pay any rent or board. He is single.
5. Whilst he is a qualified tradesperson, with years of experience, I accept the respondent has a limited ability to work. The unchallenged evidence of his doctor includes that his ability to work his job - which involves heavy manual labour - is hampered by his chronic pain. He also suffers from various conditions, one of which resulted in him having surgery in 2024. The respondent said he continues to suffer residual pain from the 2012 accident, and that he has not completely healed from the 2024 surgery, and he continues to suffer pain and restricted mobility.
6. The respondent also suffers from significant mental health issues. I have already referred to multiple occasions when the respondent's mental health functioning was so compromised that he required hospitalisation. That included a further admission in the KK Health Unit in late 2024 for depression and suicidal thoughts.
7. The respondent's doctor concluded in his report that the respondent's:

...chronic mental health issues eg Major Depression, [another mental health illness], Chronic Suicidality and ongoing physical issues [...] limits his full participation work whether on a part time or full time basis.

1. The respondent acknowledged someone with his skills and qualifications might expect to early between $49 and $55 per hour. However, the respondent said his health issues made him an unattractive employee, as he is often in pain and could not reliably turn up to work for eight hours a day. There was also some suggestion by the respondent that his relative's friend - a 'bloke called [...]' - might have some work for him overseas. This did not appear to be a realistic job offer.
2. Whilst the applicant did not accept the respondent's claims that he is not in good health, I accept the unchallenged medical evidence that his ability to participate fully in work is limited as a result of the combination of his physical and mental health issues.
3. The applicant was diagnosed with Post Traumatic Stress Disorder following the respondent's threatening and frightening behaviour in late 2018 for which she was medicated and received counselling. The applicant adduced unchallenged evidence from her treating general practitioner that she continues to take medication to manage panic attacks and anxiety, and that she struggles to sleep for which she also requires medication. The doctor said the applicant had no history of anxiety or any other mental health disorder prior to the traumatic incidents in late 2018 involving the respondent and that "her current use of [medication] is as a direct consequence of the traumatic events she described to me".
4. I note the applicant has also had the benefit of $378,711 having been advanced to her by Mr H substantially to meet her legal fees and to make two payments towards the home loan. She described this as a debt, but acknowledged there was no loan agreement signed, nor did she have any particular time when she must repay the debt. However, she did regard herself as effectively morally liable to repay the monies, and if necessary, she would assign that family part of her interest in her property under the terms of her will.
5. It is the applicant's assertion that the respondent also has a significant collection of motor vehicles that exceed the value of same in the balance sheet. It is her evidence that he has a number of motor vehicles including three LL Brand motor vehicles. She said the respondent has resisted requests by her to have the collection valued. She deposed to having personally seen a large number of motor vehicles many of which he kept at his mother's property.
6. The respondent denied that he had a collection of vehicles as asserted by the respondent. He said what he did have was in poor condition and much has been disposed of. However, the respondent also acknowledged that his earlier estimates of the number of vehicles "may have been incorrect". He also said he did have a number of vehicles at the date of separation - including an LL Brand motor vehicle worth $6,000. He said he no longer has most of the vehicles and asserted he had an "[LL Brand motor vehicle]. Everything else, I had to sell". He retained the proceeds of those sales.
7. I have already referred to the poor lack of recall of the respondent and that generally the evidence of the applicant is to be preferred to his where they are in conflict. In the circumstances, I am satisfied that the respondent does have in his possession more vehicles than he has acknowledged - but I am unable to make any more specific findings in this regard.
8. The respondent owes funds on his master cards of in excess of $47,000. He has a personal loan with Westpac for $43,345 - which has grown considerably post separation. He owes his family lawyers more than $60,000 and has a loan for litigation funding of over $49,000. There is also the possibility that he will be sued by the liquidators. He owes in excess of $61,000 to his commercial lawyers. These are post separation liabilities he has incurred.
9. The respondent has had the benefit of an inheritance of $389,635 post separation - which he has spent.

The respondent's asserted contingent liability

1. I have not allowed Ms S's affidavit into evidence.
2. However, I have had regard to the administrators' and liquidators' reports for N3 Pty Ltd and N1 Pty Ltd dated August and December 2024 respectively as tendered at trial.
3. Those reports reveal that it is a possibility that the liquidators may pursue a claim or claims against the respondent. Whether any claim is pursued at all is not known - nor can the likelihood or otherwise of it being pursued be assessed. The quantum of any claim is also not known. There are defences that could be raised, the likelihood of success of same cannot be assessed.
4. Claims that could be brought against the respondent include trading insolvent, failure to keep financial records, and fraud - all being breaches of his obligations as a director, years post separation, in a company in which the applicant has never played a role.
5. It appears that the administrators assessed the business as having insufficient assets to meet liabilities from June 2022 and was insolvent from at least 1 July 2023. Their reports set out that the extent of any claim by a liquidator will depend on a number of factors, including the commerciality of pursuing recovery action/s.
6. The administrators also set out that there may be defences available to a director if a claim is made of insolvent trading - and noted that "establishing insolvency is a complex matter". The administrators' report set out that the company's de facto director (being Mr J) may also be liable.
7. In the liquidators' reports it is recorded that the recoverability of loan accounts remains uncertain, and "the Liquidators are conscious of expending further resources in the pursuit of recovery action due to the uncertainty of the enforceability and recoverability of the available claims". They said the investigations with respect to potential insolvent trading claims against the respondent and/or Mr J "remain ongoing".
8. The liquidators outlined a number of other potential claims that could be brought against either the respondent or Mr J including voidable transactions.
9. As to the quantum of any claim that could be mounted, it was noted that the unsecured creditors' claims totalled $851,070, and there may be additional ATO liabilities. The sum of $290,000 was identified in the liquidators' report as potentially being paid to the ATO by way of an unfair preference. Accordingly, a claim against the respondent and/or Mr J could potentially be up to $1.1 million. However, there was no certainty about that figure, or the likelihood of any claim being pursued.
10. Additionally, the liquidators set out that there may be defences available to a director. Their report concluded that the further inquiries to be undertaken included:

[p]ursuing any potential rights of action in respect of Voidable Transactions and any potential Insolvent Trading Claim if deemed commercial to do so.

(emphasis added)

1. Accordingly, the quantum and/or likelihood of any claim being made or, if made, successful is unknowable.
2. That there may be a claim, of some unknowable quantity, at some potential time, is a matter that I take into account pursuant to s 90SF(3)(r) of the Act. However, the highest potential figure of in excess of $1 million must be significantly discounted for a number of reasons. First, any claim at all being pursued is only a possibility. Further, the liability, if it ever crystallizes, would have been incurred years post separation, as a result of defects in the respondent's management of the business - and breaches of his obligation as company director. I also note the reports suggest that action could be pursued against the respondent and/or Mr J - and that there may be available defences to any claim.

ASSESSMENT OF CONTRIBUTIONS AND PROSPECTIVE NEEDS

1. As recently observed by the Full Court in Gadhavi & Gadhavi [2023] FedCFamC1A 117; (2023) 67 Fam LR 174 at 41:

...the exercise of the broad discretion bestowed upon the Court pursuant to s 79 of the Act "'inevitably involves value judgments and matters of impression', and accordingly it cannot be treated as 'a mathematical exercise'". It is often stated that there is an inevitable 'leap' from the evaluation of the parties' contributions to declaring the "quantitative reflection of such an evaluation".

(Citations omitted)

1. The Full Court in Van der Linden & Kordell [2010] FamCAFC 157 similarly observed, at [90]

As this Court has often recognised (eg see Steinbrenner & Steinbrenner [2008] FamCAFC 193, at paragraph 234), given that the assessment of the relevant factors arising under s 75(2) of the Act inevitably moves from a "qualitative evaluation" of those factors to a "quantitative reflection of such evaluation, there will inevitably be a 'leap' from words to figures". That is the nature of the exercise of discretion.

1. As set out, I am required to weigh up the myriad of contributions of all sorts made by the parties over the course of their relationship.
2. It is not in dispute that the applicant's initial contributions were greater than those made by the respondent. That initial greater financial contribution however is not carried forward as a mathematical proportion. As observed by the full Court in Pierce v Pierce [1998] FamCA 74; (1999) FLC 92-844;

28. In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution... regard must be had to the use made by the parties of that contribution.

1. I have already observed that the purchase of B Street was achieved by utilising the proceeds of sale of the unencumbered property the applicant brought into the relationship. I have also already set out at length all the other financial, non-financial and homemaker contributions made by the parties during their relationship and post separation. This included that the applicant had the benefit of living in the home, with the mortgage and utilities being paid on her behalf for a considerable period post separation.
2. Considering all of those contributions, and weighing them collectively, I am satisfied that these are appropriately assessed at 65 per cent to the applicant and 35 per cent to the respondent.
3. Having carefully consider the relevant matters in s 90SF(3) of the Act, I am not satisfied that there needs to be any further adjustment in favour of either party. The parties' both have limited income earning capacity. They both have mental health issues. The applicant is close to retirement age. The respondent is 11 years younger than her - and potentially has more years during which he may be able to generate an income when he is well enough to do so. They both have additional liabilities including the possibility of a commercial claim against the respondent. I have already set out the reasons why the potential highest figure that might possibly be claimed needs to be heavily discounted.

1. Accordingly, if the applicant wishes to retain B Street, she will need to make a payment to the respondent of $429,007. The applicant indicated that in the event a payment had to be made to the respondent pursuant to my orders, she would like the opportunity to consider whether she can raise finance and pay him out. If she cannot do so, then the property will need to be sold.
2. If the applicant has to sell her shares to effect a payout to the respondent, it is appropriate that the respondent's cash payment is adjusted to reflect 35 per cent of the pool that includes:

(a) the actual proceeds of the sale of shares; and

(b) the capital gains tax on the sale of those shares.

1. Whether B Street is sold, or the respondent is paid a cash amount, the funds he will receive will be sufficient to ensure the removal of the caveats - as the caveators will be paid from the respondent's payment at settlement.
2. I have provided for the applicant to nominate three estate agents and three conveyancers from whom the respondent can select.
3. I am also providing for the valuer to assist with the terms and conditions of the sale of B Street. It seems more appropriate for this to occur than to leave any dispute to be resolved by the selling agent who may be compromised. Whilst the applicant's proposed orders envisaged she would have conduct of the sale I was not addressed as to why the parties should not both be engaged in its sale.
4. I am also making the indemnifications as sought by the applicant. They are appropriate in all the circumstances, as I have already taken the various liabilities and contingent liabilities of the respondent into account in determining a just and equitable outcome.
5. For all of the foregoing reasons, I make the orders as are set out.

I certify that the preceding two hundred and two (202) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter.