Lavanya & Lavanya [2025] FedCFamC1F 717 (10 October 2025)

1. All prior property and spousal maintenance orders are discharged.

1. Within 60 days from the date of these Orders, and contemporaneously:

(a) The husband pay to the wife the sum of $4,411,713;

(b) The wife do all acts and things and sign all necessary documents to transfer to the husband all of her right, title and interest in:

(i) The property situated at and known as D Street, Suburb E in the State of New South Wales (...) ("the Suburb E property") subject to the NAB mortgage Account #59; and

(ii) The property situated at and known as B Street, Suburb C being all of the land contained in Folio Identifier ... in the state of New South Wales ("the B Street property").

(c) The husband do all acts and things and discharge and otherwise indemnify the wife and keep her indemnified in relation to:

(i) The NAB mortgage Account #59 secured over the Suburb E property;

(ii) The NAB mortgage Account #59 secured over the B Street property; and

(iii) The NAB mortgage Account #09.

1. In the event that the husband fails, omits or neglects to comply with Order 2 by the due date, then forthwith upon default, the parties do all acts and things and sign all necessary documents to immediately list for sale the Suburb E property, such sale to occur as follows:

(a) The property will be listed with an agreed agent as agreed between the parties in writing or in default of agreement an agent appointed by the "joint expert" Mr L of M Company;

(b) The property be listed at a price agreed by the parties or in default of agreement, at a price as nominated by the joint expert;

(c) The parties do all acts and things to make the property available for inspection;

(d) The solicitor acting on the sale shall be as agreed, but in default of agreement, as nominated by the listing agent;

(e) Both parties do all acts and things and sign all documents necessary to effect the sale of the property;

(f) Within 24 hours of the Suburb E property being listed for sale, the husband shall vacate the Suburb E property;

(g) The proceeds of sale be distributed as set out in Order 8 hereof.

1. In the event the Suburb E property does not sell by private treaty within a period of three (3) months from the date of first listing:

(a) The parties do all acts and things and sign all documents to list the Suburb E property for sale by auction with a listing price and reserve price as agreed between the parties or in default of agreement, as determined by the joint expert;

(b) The parties will jointly negotiate with any prospective purchaser; and

(c) The parties will agree upon a sale price or in default of agreement, at such price as may be nominated by the joint expert.

1. Upon the Suburb E property being sold at auction in accordance with these orders, the proceeds of sale be distributed as set out in Order 8 hereof.
2. In the event the Suburb E property does not sell at auction, the parties immediately list the property for sale in such manner as may be recommended by the listing agent and the proceeds of sale be distributed as set out in Order 8 hereof.
3. Pending the sale of the Suburb E property, the husband shall:

(a) Do all acts and things to maintain the property in its current state of repair until it is sold;

(b) Ensure that all of his belongings are removed from the property and that vacant possession is given to the purchaser of the property.

Sale terms for Suburb E property - Default on due date

1. Upon settlement of the sale of the Suburb E property in accordance with Orders 3-6 above, the proceeds of sale be distributed as follows:

(a) In payment of all real estate commission, legal fees, and other legal costs associated with the sale;

(b) Payment of an amount sufficient to discharge the mortgage/s to National Australia Bank secured on the Suburb E property and the B Street property and the NAB mortgage Account #09;

(c) In payment to the wife the sum of $4,411,713 plus any interest that has accrued on any amounts outstanding thereon as set out under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) in full discharge of the husband's obligations under Order 2; and

(d) In payment of the balance to the husband.

Payment of mortgage and outgoings for Suburb E and B Street properties

1. Pending transfer or sale of the Suburb E property in accordance with these Orders, the husband shall:

(a) Be solely responsible for and shall pay any and all outgoings in relation to the Suburb E property until it is sold, including but not limited to all utilities, mortgage (principal and interest) repayments to NAB, council and water rates;

(b) Ensure that the house and contents are insured at all times for the full replacement value and pay all necessary insurance premiums as and when they fall due. If requested by the wife, the husband shall within 24 hours of any request to him in writing provide to the wife a copy of the policies obtained by him in compliance with these Orders and confirmation that he has met the payment of all premiums for same;

(c) Pay for all outgoings in relation to the Suburb E property and the cost of maintaining the Suburb E property;

(d) Indemnify and keep indemnified the wife as to the outgoings specified in this Order.

1. Pending transfer of the B Street property in accordance with these Orders, the wife shall:

(a) Be solely responsible for and shall pay any and all outgoings in relation to the B Street property until it is sold, including but not limited to all utilities, council and water rates;

(b) Pay for all outgoings in relation to the B Street property and the cost of maintaining the B Street property;

(c) Indemnify and keep indemnified the husband as to the outgoings specified in this Order.

1. Pending transfer of the B Street property in accordance with these Orders, the husband shall:

(a) Be solely responsible for and shall pay all mortgage (principal and interest) repayments to NAB;

(b) Indemnify and keep indemnified the wife as to the outgoings specified in this Order.

1. The husband pay or cause to be paid to the wife spousal maintenance as follows:

(a) The sum of $800 per week with the first payment to be made within 7 days, to an account as nominated by the wife;

(b) Order 12(a) shall be discharged upon the husband's compliance with Order 2.

1. Each of the parties will instruct their representatives to do all acts and things necessary to give effect to the settlement of any transfer or sale of real property pursuant to these Orders via an electronic conveyancing platform, such platform to be agreed between the parties, and in default of agreement within 7 days of the date of Order, to be PEXA ("the electronic conveyancing platform").
2. In the event either party is self-represented at any time, then that party will nevertheless instruct a subscriber to the electronic conveyancing platform for the purpose of settlement and will meet their own costs of the practitioner instructed by them.

1. Within 60 days from the date of these Orders and contemporaneously, the wife do all acts and things and sign all documents as are provided to her by the husband necessary for her to:

(a) If required by the husband, vote to and sign a Minute of a shareholder meeting to amend the Articles of F Pty Ltd to permit it to be a one shareholder and one director company;

(b) Transfer to the husband the whole of her right title and interest in any shareholding in F Pty Ltd;

(c) Transfer to the husband or his nominee any and all debit loan accounts, credit loan accounts in the wife's name in F Pty Ltd; and

(d) Relinquish any and all interest as to income and capital in F Pty Ltd.

1. Within 28 days from the date of these Orders, the husband do all acts and things to provide to the accountant all necessary documents and information to calculate the capital gains tax payable on the sale of the property situate at K Street, Suburb C ("the K Street property") by G Investments Pty Ltd, with the husband to provide a copy of the correspondence from the accountant in respect of this Order to the wife's solicitors within 48 hours of receipt.
2. For the purposes of the Order 16, each of the parties shall do all acts and things and sign all documents necessary to arrange for the disbursement of the funds deposited into the controlled monies account operated by Matthews Folbigg Lawyers held on behalf of the parties for the payment of capital gains tax payable from the sale of the K Street property.
3. Any funds in the controlled monies account referred to in the Order 17 held in excess of the sum required to pay capital gains tax be disbursed to the parties in equal shares.
4. Within 14 days from the date of compliance with Orders 16-18 above and contemporaneously, the wife shall transfer to the husband the whole of her right title and interest in any shareholding in G Investments Pty Ltd.

1. Within 30 days of the date of these Orders, the parties do all acts and things and sign all documents and give all consents necessary to transfer the balance in any jointly held NAB bank accounts to the husband, and the parties thereafter close the joint bank accounts.

1. The husband shall be solely liable for and shall indemnify and keep indemnified the wife in respect of any liability of any nature including as to any tax liability, which she has at any time arising in respect of F Pty Ltd and G Investments Pty Ltd, by reason of the wife having been an employee, director, officer, credit or debit loan holder and/or shareholder of F Pty Ltd and G Investments Pty Ltd.
2. The husband, by this Order, indemnify the wife (and keep the wife so indemnified) from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband or any trust, company or other entity controlled by the Husband or in which the Husband has an interest.
3. The wife, by this Order, indemnify the husband (and keep the husband so indemnified) from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife or any trust, company or other entity controlled by the wife or in which the wife has an interest.
4. Except as specifically provided for by any paragraph comprising these Orders to the contrary, each of the husband and the wife by this Order release the other from all debts owing from one to the other.

1. The husband be declared the sole legal and beneficial owner of all items of personal and real property in the husband's possession or of which the husband is the registered proprietor as at the date of the making of these Orders, including but not limited to all or any money standing to the credit of the husband in any bank or building society, shareholdings, motor vehicles and any present or future expectation under a trust or estate.
2. The wife be declared the sole legal and beneficial owner of all items of personal and real property in the wife's possession or of which the wife is the registered proprietor as at the date of the making of these Orders, including but not limited to all or any money standing to the credit of the wife in any bank or building society, shareholdings, motor vehicles and any present or future expectation under a trust or estate which are not otherwise dealt with by these orders.

1. In the event the husband shall neglect or refuse to sign any documents or give any consent necessary to give effect to these Orders, then the Registrar of the Federal Circuit and Family Court of Australia shall pursuant to section 106A of the Family Law Act 1975 (Cth) sign all documents on behalf of the husband. It shall be sufficient to show default in the event that a document forwarded for signing to the last known address of the husband is not returned signed within 48 hours from when it was sent. For the purpose of this Order such default to be confirmed by a sworn Affidavit.

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 the pseudonym Lavanya & Lavanya has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. The applicant husband and respondent wife seek property settlement orders following the breakdown of their marriage.

1. The husband is aged 57 and the wife is aged 53. The parties commenced cohabitation in around 2008 and were married in 2015. They separated on a final basis in December 2021 (on the husband's account) or in November 2021 (on the wife's account), and were divorced in 2024. Their relationship spanned approximately 13 years.
2. At the start of the relationship, the husband operated a business (N Pty Ltd) importing and selling products from Country O. N Pty Ltd was placed into liquidation in 2013. In around 2010, the husband established F Pty Ltd as his relationship with suppliers in Country O was proving difficult. In 2015, F Pty Ltd was moved to a more spacious property located at P Street, Suburb Q, NSW, where products are made and distributed across different locations around the country.
3. The wife worked as a health professional after finishing her studies in 1993. She continued working as a health professional three days a week until the birth of the parties' child (X) in 2010, after which she has not undertaken paid work.
4. The wife has not been involved in the husband's business but has, in the past, been paid a weekly income from the business. The wife's affidavit filed 15 April 2025 recounts:
   1. ... Between 2010 to 2015, [F Pty Ltd] employed me as a staff member and paid me $700 per week as a wage which was recorded on payslips and in my tax returns during that period. [Mr Lavanya] said to me, "I'm going to pay you and keep you on the books for [F Pty Ltd]." I said, "Okay if that's the way it done then that is fine." I applied this money towards groceries and day to day expenses for the family.
5. The parties each have two adult children from previous relationships. The wife has two sons aged 26 and 28 and the husband has two sons aged 19 and 22 respectively. The parties have only the one child together. Final parenting orders with respect to their child X were made on 9 August 2024 which broadly provide for the mother to have sole parental responsibility for long-term parenting issues, X to live with his mother and spend time with his father in accordance with his wishes. However, X then lived with the husband for some months when the wife went overseas and now spends time in each household.
6. The husband now says that X currently lives with him full-time at the Suburb E property and attends school in the same area, and the wife says that X spends time with both parents in a week-about arrangement. The wife's affidavit indicates that the parties had agreed to X enrolling in a distance education program at R School in Suburb S at the end of Term 1 2025. The wife indicates that she often takes X to and from extracurricular activities and takes him to his medical, chiropractic and dental appointments.

1. The husband was cross examined at some length on his understanding of the duty to make full and frank disclosure. He accepted that he was aware of this obligation from at least 2022, and that the obligation is an ongoing one. He also stated that he had complied to the best of his ability, but that he relied upon the financial controller and the accountant from his business (neither of whom were called to give evidence).
2. Whilst the proceedings have been pending since 2022, it was only on the Wednesday before the trial (23 April 2025) that a further bundle of documents was provided to the wife in answer to a request made in November 2024. The husband attempted to explain this on the basis that he was awaiting the report from the Single Expert business valuer, however, that report would not have rationally affected the requirement to provide disclosure, particularly since a number of the documents produced were bank statements that were not required for the business valuer.
3. The husband accepted that he had not made full and frank disclosure in the proceedings, and that he had not complied with disclosure orders. He maintained that he tried his best, repeating that he is not an expert in financial matters and relied upon others. He also said the business had struck difficulties since COVID-19 and that it had been "a real struggle" due to wages and other business costs.
4. He was cross examined at some length concerning his financial statement filed on 23 April 2025, two business days before the commencement of trial. It became clear that the financial statement bore little resemblance to the true state of his financial affairs. For example, at Item 37 he listed only one of his bank accounts, and stated that the balance was only $1.79. He listed one credit card, the average weekly amount listed as $350 on this card in his financial statement.
5. He stated that he had company credit cards or debit cards with NAB that he uses for personal expenses from time to time and that he has a PayPal account for the company which sometimes he uses for personal expenses. He said he was unsure if the company operated a Zip account. He said he was not aware that the 2023-2024 tax return was only sent to the wife last week, and was not able to say when he completed that return. He was shown a copy of the return, which listed a Commonwealth Bank account in which he had an interest during that tax year, but stated he was unaware of the account. However, it later transpired that this was interest from a controlled monies account established to effect interim orders and not an account one would expect him to think of for his financial statement. His financial statement recounted that each of his sons earnt $1,250 per week, which he openly stated in the witness box was not correct. He could not explain why the financial statement had those figures.
6. He stated that he had been earning around the same amount for the last two years (a little over $190,000 per annum), and that his motor vehicle (Motor Vehicle 1) is a company car leased by one of the companies in his corporate group. At Item 35 he lists his son as an owner of property, although it appears this was probably an error as no particular property is included.
7. Notably, he lists his mortgage payments as $668.55 per week, but accepted that it was "obviously wrong" as the mortgage payments are more than $20,000 per month. He explained that all of the mortgage payments were met by his company and the amounts added to a loan account which is the total of the money that the company has lent him and that he must (at least in theory) repay. At present, it appears that loan account is well in excess of $3 million. He explained that he has also bought real property and the company paid the mortgage payments, he then renovates or improves the properties, and then sells it and repays the company.
8. The husband's loan account with the company has been operating since 2012 (on his oral evidence). He has used the loan account to pay legal expenses and living expenses. His solicitor had not filed a costs notice on his behalf setting out how much he has incurred in legal expenses, although he guessed that it was around $250,000. The husband's solicitors later filed a costs notice on 20 May 2025 which set out his costs billed to date (by the current solicitors) at $62,257.47, along with expert fees totalling $150,288.79.
9. During his evidence he explained that he often gets confused between business and personal expenses.
10. The husband was unable to explain various other entries in the loan account, such as a loan account entry relating to a transfer to his ex-girlfriend. He stated that she had worked as a contractor for the company, however, this would not explain why the company would have lent her or the husband money that, according to the loan account statement, still has to be repaid.
11. His evidence concerning the purchase of boats was confusing. It appears that in substance he has utilised the loan account of the company to borrow money to purchase boats, including one that was bought around a year ago for $40,000 and then sold in January 2025 for $42,000. This transaction was not disclosed to the wife.
12. The husband maintains that formal loan agreements have been entered into, and copies of them were called for as they were not previously disclosed. He was unable to say whether or not the loan agreements had been provided in the past. The loan agreements are significant as they affect the taxation liability that may flow from the payments made by the company on his behalf and listed as borrowings. Significantly, he said that he did not know how much interest was paid on the loan accounts to the company.
13. Whilst the husband maintained that he had significant business interests prior to the relationship commencing, this is difficult to reconcile with his oral evidence. He said that he had a previous business which ultimately went into liquidation. Whilst it is not entirely clear from his evidence, it appears that he had a dispute with a Country O supplier, as the relationship broke down. He changed to making his products locally rather than importing products, which meant that he had to commence sourcing, making, and packaging which he had not done before. He explained that he had been to Country O on several occasions before the parties' child was born in order to source a machine. When the machine arrived, people came to Australia to set it up for him.
14. He agreed that the growth of the business occurred principally during the time of the parties' relationship. This accords with his evidence that the wife was appointed a director from 2012, and the shareholdings in F Pty Ltd were one ordinary share to the wife and 100 Class A shares to the husband. The husband was somewhat vague about the reasons for this although it appears from his evidence that he had concerns as to his exposure to the Country O company (a prior creditor) and the ATO as a result of which the previous company was placed into liquidation (owing around €200,000 to the Country O company and around AUD$100,000 to the ATO). He was also concerned as to the optics of being a director of a company that had been placed into liquidation. He explained that he wanted a clean slate and did not want to be pursued for these debts as it would have been difficult for him to pay them.
15. I accept that the husband came to the relationship with a business and experience in the industry, however, it appears that by the time the relationship started, his business had reached a point where placing a company into liquidation was the realistic option for him, and that his concerns were such that he made the wife the director of the new company. In substance, the current businesses were built during the time that the parties were together, however, the skills and background that he brought together with what was left of the previous business enterprise cannot be ignored.
16. The husband also said that at the time he came to this relationship, he had recently divorced his previous wife, however, it appears that a settlement had been reached, which meant that there was no real exposure to his previous wife for property settlement proceedings by that time.
17. On the morning of the third day, the husband produced a number of documents which included two appraisals with respect to a property located at T Street, City U (Country O) ("the City U property"), a letter terminating the arrangements between a buyer and the company ("the V Company letter") of 3 February 2025, a contract between the company and Z Company to supply products to Z Company, and a spreadsheet giving estimated supply volumes and pricings.
18. Despite the evidence concerning the business difficulties and the important role the wife had played in reestablishing a business, the husband, in evidence, minimised the role that the wife played. He described himself as the one who collected the children from school, took them to sporting events, and did the cooking and the like. On his evidence, the wife was primarily involved in "surfing the internet" and pursuing her interest in alternative therapies.
19. He accepted that he did travel, however initially said that he did not travel with the business. It makes no sense that he would not have travelled reasonably regularly given that he has warehouses in Melbourne and Queensland, and he accepted that for the last six to seven years he travelled around twice per annum. He said two people employed by the company travel regularly, although I note that from the balance sheet the company's expenses for travel are a very significant amount, $228,698 in 2024 (Single Expert Report dated 10 April 2025, p.50).
20. The husband accepted that the turnover of the business in the last financial year was over $20 million.
21. No schedule was produced of the ledger for the director's loan amounts. No explanation was made as to the repayments of the loan amounts that would ordinarily be required pursuant to a loan agreement as required by the provisions of Div 7A of the Income Tax Assessment Act 1936 (Cth).
22. The husband accepted he had spent €85,000 to renovate the City U property around five years ago, but stated that he did not think the wife should contribute to the renovations. However, those costs form part of the director's loans from the company. The husband described the City U property as a two-bedroom home that he inherited from an uncle, and which both his father and grandfather had lived in. He does not rent it out for visitors, although it is close enough to the coast that one can have a view of the sea from the home.
23. The wife resigned as a director of the company when the parties separated and the husband said she was paid out her entitlements, and denied reducing her pay thereafter. The wife sets out the details of the reductions in her pay at paragraphs 208-212 of her affidavit filed 15 April 2025.
24. The husband said that whilst the wife had left the home in Suburb E, he would have left it if asked to do so by the wife. I have trouble accepting this proposition.
25. Whilst the husband accepted there were consent orders on 15 June 2022 for the valuation of a number of motor vehicles, including Motor Vehicle 2, Motor Vehicle 3, and Motor Vehicle 4, this was never carried out. He said that Motor Vehicle 3 had already been sold at the time of the consent orders and that he was "railroaded" by his lawyers at the time. He then claimed not to understand the valuation order. He accepted that his solicitors wrote on 4 July 2022, saying that he did not propose engaging W Company to carry out the valuations. It appears that he sold Motor Vehicle 4 to his eldest son for around $25,000, although it seems that he has made an arrangement for that to be paid by his son from his son's salary rather than there being a payment transaction. He claimed that Motor Vehicle 3 had been sold to the dealership when it was only six months old, for a price sufficient to pay out the outstanding finance agreement. At trial, there were still no documents produced showing either the sales agreements or the banking records demonstrating the payments. The valuations obtained by the wife came from Transport for NSW records setting out buyer disclosures which the husband did not dispute.
26. The husband was cross examined at some length concerning the loan account ledger for the monies he owes the company. It transpired that there were two versions of the loan account register that had been provided which were not consistent, although not wildly different. The husband had no explanation as to why the two versions had been created.
27. He stated that the loan account had commenced in April 2018, however it commenced with entries totalling $1,500,000 and he was unable to explain the source of those entries. He did claim that proceeds of sale for the sale of a property in Town AA were deposited into that account, but they did not appear in the ledger and he was not able to explain where those monies may have gone.
28. For reasons that were unexplained, in October 2021 the mortgage on the B Street property was increased by $550,000, which was deposited into a joint account from which $250,000 was paid into the company as repayments on the director loan account (on 8 October 2021 and 11 October 2021). Again, the husband was unable to explain the purpose of those transactions. There were credits appearing in September 2021 which the husband was unable to explain. It appears that at one point he purchased a boat for $250,000, which resulted in a loan account transaction of around $173,000, but again was unable to explain the details of the transactions and money movements.
29. The loan account ledger shows entries that were cancelled for funds to purchase BB shares . The shares were purchased, and the husband was unable to say what the source of the funds was for that purchase.
30. It is difficult to avoid the propositions that the loan account ledger is not a reliable document, and that the husband was unable to provide any real explanation for the most significant transactions contained within the document.
31. The husband said that the care of the child of the parties, X, changed when the wife went overseas in August 2024, resulting in X moving in with him, at least until January 2025. He has a child support debt of over $7,000, although he says that he has applied for variation of the child support assessment. A text message was put to the husband where he stated that the parties had shared care since the mother had returned, even though he had care of the child whilst the mother was overseas. He now says the child lives with him full-time, although that is not reflected in the child support assessment and it is disputed by the mother.
32. When asked to explain the source of funds for making his child support payments he stated that it came from his NAB account. However, he was unable to identify any account entries in this regard and then stated that the payments were deducted from his pay prior to him being paid by the company, and therefore the transaction for the payment of the amount was from the company.
33. He said that the spousal maintenance that has been paid comes from the company and is added to his account but was unable to explain the absence of entries in the loan account ledger, and was also unable to explain the negative entries for salary placed in the records as identified by the single expert valuer, Ms CC, who said:
    1. I am advised, per a letter from [Ms DD], dated 24 September 2024, that the negative payroll liability of $23,918 relates to child support and spousal maintenance payments made on behalf of the Husband. I have assumed for the purpose of this report that the amounts are recoverable from the Husband in full and should be considered a loan. A corresponding amount should be included as a liability in the Family Law Financial Statement of the Husband.

(Single Expert report dated 10 April 2025, paragraph 23 (notes to Appendix E/2))

1. There were consent orders entered into by the parties on 26 October 2023 which included the following indemnity clause:

Indemnity

1. That the husband shall indemnify and keep indemnified the wife in respect of all and any liability incurred by way of Director loan or other form of loan with [F Pty Ltd] in relation to:

4.1 Spousal maintenance payment payable by the husband to the wife.

4.2 Mortgage payments paid to any loan account encumbering the property known as and situate at [D Street], [Suburb E].

4.3 Mortgage payments paid to any loan account encumbering the property known as and situate at [B Street], [Suburb C].

1. That the categorisation of the husband's loan account with [F Pty Ltd] is otherwise reserved for determination at Final Hearing of these proceedings.

1. It became apparent that he had spoken to the bookkeeper or accounts manager of the company during the luncheon hour including to ask about the loan account ledger, despite still being the subject of cross examination. That person was not called as a witness.
2. On 3 February 2021, the husband made representations to a financier that the business had a value of $8 million, describing it as a business with "8 time profit" (wife's tender bundle, p.47). He was unable to explain what this phrase was intended to mean, claiming that he did not actually write it even though he signed the document. He went on to explain that he says the margin is only half as much now due to an increase in prices associated with his products in recent times.
3. He was then cross-examined about approaches to NAB last year for finance. It transpires that he has entered into a contract with Z Company on 1 April 2025 to commence supplying his products with Z Company stores. In preparation for this he obtained trade finance facilities from NAB of up to $800,000. The negotiations leading to this were not disclosed to the valuer, Ms CC, although he said he advised her he had a trial of placing products in 22 stores of other retailers in September 2023. He denied the accuracy of the records from NAB recorded on 12 April 2024, which said:

Joint Call client seeking debtor finance for $1mill. Recently recieved the [Z Company] contract ...

(As per the original, wife's tender bundle, p.84)

1. The husband contended that all tenders for supply to Z Company are in December each year and therefore he would not have had a contract at that point. This is not necessarily inconsistent with the notes from the bank document if he had been told he was getting a contract before the formal agreement was entered into.
2. In the records, there was also a loan from EE Company of $200,000. EE Company is an investment company of the husband's, however, he was unable to explain where the funds were expended or their purpose.
3. The husband's lack of knowledge of the business and the lack of appropriate disclosure lead to the conclusion that little weight can be placed on his evidence or the business records.

1. The wife gave evidence stating clearly that their marriage was a traditional one where she was the homemaker and the husband was operating the business and finances of the company. She confirmed that the husband had a business when they met and that the business had a warehouse property that had been purchased in 2006. She also confirmed that she had no assets at the time that they met, but was working as a health professional and continued to do so until 2010. The wife did not work in the business, although attended some trade shows both in Australia and overseas.
2. The wife confirmed that despite obtaining parenting orders in August 2024 she then went overseas to visit her sons in Country VV in August 2024 and remained there until January 2025, some five months. She claimed that their child X was living with her family during the five months and is now living week about between her and the husband.
3. Whilst she went to Town J at the end of the relationship in 2021, she lives in Suburb FF in Sydney now, although has no lease, saying that she pays rent to her landlords. The wife explained that she was allowing her sister to live in the Town J property free of charge. She sought to justify this on the basis that the sister was managing the rental of two studios at the property for around $840 per week. This has been going on since 2023. The studios are not rented on a particularly short-term basis (such as weekends or holiday weeks, but months at a time). One tenant has been in place since August 2023 and another remained there from July 2023 to April 2024. The wife attempted to justify this position on the basis that some years ago she attempted to rent the property, but the tenant only remained one week therefore she did not pursue rentals, and also stating that her sister cared for the property. I am not persuaded that there is any real need for the Town J property to be provided to her sister rent-free, nor that she could not obtain more in rental return from the property if it was rented as a whole.
4. The wife was well aware of the City U property, having visited it a number of times and was aware that renovations had been carried out, even though the husband had not made disclosure of it earlier in the proceedings.
5. When the husband and wife commenced their relationship, they each had two children from a previous relationship. Whilst the husband's two children primarily resided with their mother, the wife's two children resided with her as their father is deceased. The parties relocated to Sydney in 2009, ultimately buying the Suburb E property in 2014. Whilst there were renovations, the wife was unaware of the costs or arrangements for payment. She confirmed that her lack of knowledge about the finances of the family was the result of a traditional marriage. She did not see this as any sinister attempt to stop her from being aware of the finances of the family or to deny her any control.
6. It was put to her that the husband's children from his previous relationship ceased coming to visit as a result of her actions, however it appears that in reality she was quite ill during her pregnancy and not able to care for the two young children from his previous relationship when they came to visit. This resulted in them not coming for overnight visits, however they continued to visit on a regular basis. This appears consistent with evidence that she was largely the homemaker whilst the husband was the income earner.
7. School fees were paid for the children by the husband, including the wife's children from her previous relationship. She estimated those fees to be around $30,000 per child per year, which ran from years 9-12 for one child and years 8-12 for the other child, totalling about $270,000.
8. She disputed the extent to which the husband was involved in the day-to-day care of the children.
9. The wife's evidence concerning the period where her father passed away was surprising. It occurred when she was overseas for five months. The parties' son attended the funeral in Brisbane. Her evidence that she was unaware of the arrangements of the nearly 14-year-old boy to travel from Sydney to attend the funeral in Queensland was surprising. I found her evidence in this regard unconvincing and prefer the husband's evidence that he arranged the travel.
10. It was clear that the wife was unaware of the repayments (or even the amounts) on the mortgages, at one point suggesting that she thought the repayments on an interest only basis on the Town J property would only be $550 per week, a figure which appears unrealistically low.
11. The wife agreed that the husband undertook development applications, painting, and organised refurbishment or renovations to their properties, including the properties at Town AA and Suburb E. She said that they undertook the renovations of the K Street property together.
12. The wife begrudgingly admitted that the husband would cook at least from time to time, but firmly described this as his "hobby". She agreed that he maintained the gardens. When asked whether they undertook several overseas holidays each year together, her response was "not every year".
13. She said that she is not seeking employment as she is working for herself and as such has not thought about office work or taking the training required to renew her qualifications, which she said lapsed in 2010. She earned a degree in 1993. It appears she has made no enquiries as to what was in fact necessary to renew those qualifications, describing only a brief conversation she had with her solicitor. She hypothesised that she would have to redo her degree, but had taken no steps to enquire of the regulations.
14. I found the wife's evidence less than convincing and treat it with considerable caution.

1. The business valuation expert, Ms CC, was called to give evidence. She explained that the process of valuing the husband's business interest took two years in this case due to the difficulties in gathering and reviewing the information, complicated by a lack of material provided to her.
2. Ultimately, she never received sufficient material to make a detailed valuation and relied upon the sales figures in order to calculate an indicative value based on industry norms. She explained that a business with a turnover in excess of $20 million per annum should have proper books and records, but that in this case the underlying accounting was of very poor quality. She said there was a lack of supporting information to support the balance sheet figures, and that the integrated client account from the tax office did not reconcile with the company's books. She was unable to say whether the poor quality of accounting for the business was deliberate, the result of ineptitude, or simple lack of care.
3. She pointed out that the books appeared to indicate a growth in revenue and diminishing profits, however, on a normalised basis, the business would be doing better than appears on the business books. She was unable to reconcile the inter-entity loans. Ms CC said that there was potentially money missing from the books, for example where there is an expense in one company but no receipt in another, and it was an inter-entity transaction. For example, management fees said to be paid by GG Company to F Pty Ltd did not appear in the income figures for F Pty Ltd. She noted one transaction where it was said $651,465 was listed as paid (Single Expert Report dated 10 April 2025, p.68) but where she could not find a receipt.
4. The recording of spousal maintenance payments was in her view misleading, saying at [23] of the notes to Appendix E/2 in her report:

I am advised, per a letter from [Ms DD], dated 24 September 2024, that the negative payroll liability of $23,918 relates to child support and spousal maintenance payments made on behalf of the Husband. I have assumed for the purpose of this report that the amounts are recoverable from the Husband in full and should be considered a loan. A corresponding amount should be included as a liability in the Family Law Financial Statement of the Husband.

(Single Expert Report dated 10 April 2025, p.39)

1. When asked to consider the loan account ledger for borrowings by the husband, she pointed out that there was no proper explanation of the initial loan figures, two sums that total in excess of $1 million. She said that in her attempt to ascertain a value for a business, she found that almost every item on the balance sheet required adjustment. It was apparent that the process of attempting to understand the company's records was frustrating for the valuer who stated that she could not recall a valuation where almost every item required an adjustment.
2. She was provided with copies of the documents concerning the loss of the V Company contract and the addition of the Z Company contract. In her view, the figures in the documents indicated that no significant change was required to the overall value of the business as the loss of sales to V Company were replaced by the sales to Z Company. When pressed as to whether the Z Company contract showed the business was in a more precarious position now, she was of the view that the contract to a smaller purchaser such as V Company placed the business in a more precarious position than a contract to a larger purchaser such as Z Company. She reiterated that neither of these contracts were such a large part of the revenue now, as to take this business into the category of businesses that are heavily reliant upon one customer. She estimated that if the V Company contract were not lost and if the Z Company contract was in addition to the existing contract revenue, that would increase the net value of the business. She provided a brief explanation of this in evidence and provided some more detailed calculations (on the following day) showing how these changes would affect the valuation which forms Exhibit 10.
3. When asked about the director's loan agreements, she explained that she has not been provided with the various loan agreements that would be necessary for compliance with Div 7A of the Income Tax Assessment Act. She explained that a deemed dividend under Div 7A (which can occur if associated persons are lent money from a company that is not appropriately documented and treated as a loan in accordance with the Division) is not able to be franked. The husband's present loans from the company could be discharged by the company declaring a dividend to the husband in the amount of the loans, however, this would generate a taxation consequence for him. Assuming that the company's earnings have all been subject to tax payments at company tax rates, she estimated that the additional tax that would need to be paid by the husband, if the husband were to be provided a dividend sufficient to pay out the loans, would be significant. However, the husband's counsel was clear that it was not his case that this would occur.
4. Ms CC also noted that the stock clearing account was indicative of more money running through the business than the profit and loss statement, however, she was unable to ascertain the detail of this. She made some adjustment based on the cost of goods being sold being undervalued. She explained that if the sales numbers were manipulated then that would affect the value of the business. She undertook no assessment of the value of the equipment, relying upon the expert report by Mr JJ. She did not recall seeing any business records indicating that a machine had been purchased from Country KK as alleged by the husband in evidence.
5. The expert was not concerned to factor in any reduction in the valuation on the basis that V Company may be developing a business to compete directly with F Pty Ltd, pointing out that the data showed that there were around 687 businesses in the sector.
6. I have no hesitation accepting the evidence of the expert. Any weaknesses in her evidence are not, in my view, the result of the lack of expertise or care by the expert, but the consequence of the failure by the husband to provide full and frank disclosure, combined with the apparent poor state of the financial records.
7. Based upon Ms CC's evidence, it appears to me that the valuation figure she struck is a conservative value for the business. With respect to the loan accounts, it appears that the loan accounts could be discharged by the company declaring dividends sufficient to pay those amounts (indeed that could have occurred in each of the years when loans were made). The real effect of the loan accounts is that there is a potential tax liability, however, this may never crystalise. The limitations of this evidence are as a result of the failure to provide suitable books and records to the expert, and a choice by the husband not to call his own accountant to provide evidence in this regard.
8. The assets and liabilities each of the parties contended for is as follows:

T Street, (City U), Country O (Estimated value converted from Euros to AUD on ... 1 EUR = 1.77165 AUD)

G Investments Pty Ltd [Husband is sole director, Parties are

sole director, Husband is majority shareholder and wife is

Interim property settlement pursuant to Orders dated 26 August

Interim property settlement pursuant to Orders dated 26 August

Interim property settlement pursuant to Orders dated 26 August

Interim property settlement pursuant to Orders dated 26 August

Funds in Matthews Folbigg Controlled Monies Account for CGT

Costs Order dated 22.4.24 in favour of the wife unpaid to date

Mortgage on the Suburb C property NAB #59 (estimated)

Pty Ltd pursuant to paragraph 2.6 page 7 of Ms CC's Business Valuation

1. By the end of trial, there were still some disputes as to the balance sheet.

1. Whilst the value of the City U property was agreed, later in the proceedings the husband relied on a different exchange rate to arrive at a different figure. I accept the figure that was initially agreed because the exchange rates will constantly fluctuate.

1. The wife contends that the business is worth $7,513,000 whilst the husband says it is worth $5,913,000. I accept the valuation by the expert, calculated on the basis of the loss of the V Company contract and the added value of the Z Company contract, as set out in Exhibit 10, being $6,913,000. This valuation is based on the records the husband produced, however, I am not satisfied that the husband made full and frank disclosure of the business records.
2. The reliability of this figure is weakened by the poor financial records, the poor disclosure, and that it is less than the figure represented to NAB by the husband of $8 million. On the evidence, this is, at best, a conservative value limited by the husband's non-disclosure. The potential effect of the husband's non-disclosure is considered pursuant to s 75(2).

1. The parties were not agreed as to the value of the wife's motor vehicle (Item 24), however there was no valuation evidence from either party. The wife admitted it was worth $15,000. In the absence of evidence, I adopt that figure.

Items 30-32 (Addbacks) - The husband's motor vehicles

1. Items 30-32 concerned three motor vehicles the husband has sold. Orders made early in the proceedings for their valuation were not complied with by the husband. At trial, the husband said that two of the vehicles were leased and all of the proceeds of sale were paid to leasing costs or returned to the company. Whilst one would expect that the relevant documents would be available and produced, few documents were produced and only late in the proceedings. However, it does appear that vehicles were generally leased and the parties lived out of the husband's loan account at the company. Rather than treating these items as addbacks, I will take them into account pursuant to s 75(2) of the Family Law Act 1975 (Cth).

1. The obligation of the husband to pay costs to the wife is not an asset of the wife for the purpose of the balance sheet, but an entitlement to be reimbursed for expenses incurred in the proceedings. To include it in the balance sheet would result in the wife bearing a proportion of a costs order requiring the husband to pay costs to the wife. I therefore exclude this item. This should remain a separate liability of the husband to be met from the property he retains.

1. The remaining dispute concerns the husband's loan account with his companies (Items 37 and 38) which he says now total $4,616,205.36.
2. Counsel for the wife argued that the loans payable by the husband to the companies should be ignored as he owns the companies, and therefore, they are simply monies effectively payable by him to himself (albeit through corporate entities). However, the loans are included as assets of the companies by the valuer and thus greatly increase the value of the business. To ignore the debt of the husband to the business but take up that debt as an asset of the companies (and ultimately the husband as the owner of business entities) would artificially increase the value of the companies. It is appropriate for the debts to be taken up as assets of the companies (as the valuer approached the valuation), but also to take account of the husband's obligation to the companies. The same reasoning applies to inter-party loans.
3. The real difficulty is that the husband has not adequately explained where all of the loan monies were paid. It seems likely that the parties have been meeting most personal expenses from the company accounts, recording the amounts as loans to minimise taxation rather than as salary or dividends.
4. I am not persuaded that the loan account ledger is accurate but am persuaded that a considerable proportion of the loan account monies were applied to relationship purposes and living expenses, as a great deal of the loan account amounts accrued during the relationship and before it appears a separation was contemplated. For example, the loan account increased from $3,664,471 at 30 June 2024 to its present figure, by the time of trial. However, loan repayments on the Suburb E property alone were around $20,000 per month. That has resulted in a benefit to the parties as the property less the mortgage is in the balance sheet. Yet the loan repayments and expenses of the properties do not explain the totality of the increase in the loan account in this period.
5. The wife put an argument that interim orders of 26 October 2023 required the husband to meet the payments on the mortgages and indemnify the wife with respect to the director's loans. I am not persuaded that this was a partial property settlement order rather than an interim order to ensure that payments were made pending final orders. It cannot be the case that significant mortgage payments (borrowed from the company) which increased the equity in the properties would simply be ignored when determining the property settlement. However, borrowings from the company for the husband's sole use are a unilateral disposition of funds for which he should bear responsibility.
6. Whilst many of the loan account figures remain without clear evidence as to how they have been applied, it appears to have largely been funds of the company used by the husband both during the marriage and after separation. If the debt were waived or a distribution made by the company to the husband to discharge the debt, his net position would remain the same (subject to the taxation consequences for the husband). I am not persuaded that the debt should be ignored in circumstances where it is included as an asset of the company. However, as with the disclosure for the purpose of valuing the business, I am not persuaded that the figures are reliable. In the absence of sufficient evidence to adopt an actuarial approach to the amounts, the impact of the lack of disclosure, both with respect to the director's loans and valuations, is best addressed pursuant to s 75(2) rather than in numerical adjustments to the balance sheet.

1. The annual leave entitlements of the husband were taken up as a liability of the company by the valuer. If the company did not owe these amounts to the husband, the value of the company would be greater. The husband has control over the payment of that leave entitlement as the owner and manager of the business. The case was put on the basis that these entitlements are a financial resource of the husband. I will therefore take the leave entitlements into account when considering the s 75(2) factors.
2. I therefore find the assets, liabilities and superannuation of the parties to be as follows:

T Street (City U) Country O (Estimated value converted from Euros to Aud on ... 1 EUR = 1.77165 AUD)

Interim property settlement pursuant to Orders dated 26 August

Interim property settlement pursuant to Orders dated 26 August

Interim property settlement pursuant to Orders dated 26 August

Interim property settlement pursuant to Orders dated 26 August

Funds in Matthews Folbigg Controlled Monies Account for CGT

Mortgage on the Suburb C property NAB #59 (estimated)

IS IT JUST AND EQUITABLE TO MAKE PROPERTY SETTLEMENT ORDERS

1. Section 79(2) of the Family Law Act provides:

(2) 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.

1. There was no dispute that in the circumstances of this case, it is just and equitable to make property settlement orders. This is because the existing legal and equitable property rights of the parties to the marriage are no longer appropriate now that the parties are separated and the common use of the parties' property has ceased.
2. Neither party sought to have the superannuation interests treated as a separate property pool, nor did either party seek splitting orders. Having regard to the size of the pool and the comparative values of the superannuation interests, it is convenient to simply treat the superannuation interests as another property interest for the purpose of calculating the property settlement orders.

1. At paragraph 17 of the husband's trial affidavit, he contends that at the commencement of the relationship he had: a property situated in Suburb UU purchased in 2006 for $1,200,000, the City U property, superannuation entitlements of around $41,000 and an interest in five businesses. The wife had no real assets.
2. The valuation of the business at the time was assessed as $288,000 by Ms CC (Single Expert Report dated 5 March 2025, p.6). Importantly, I note the difficulties the husband was facing with the Country O supplier which left him exposed to court proceedings and that he had taxation liabilities. He placed his company N Pty Ltd into liquidation in June 2013. There is no evidence as to the extent to which the Suburb UU property was encumbered.
3. Much of the detail of the relevant contributions is recounted earlier in this judgment and need not be repeated. Both parties made considerable financial and non-financial contributions during the relationship through their respective roles. The husband inherited the City U property, however significant improvements were made to it and the various properties owned by the parties. The parties bought, renovated and sold homes. The husband developed his business. The wife was primarily the homemaker and the husband the income earner. They raised a child together. Both parties made significant contributions in their own spheres during the relationship.
4. Following separation, both parties have contributed to the care of their child.
5. The wife has not generated any income of significance since separation (nor set about retraining to earn an income in the future). The husband has continued to actively operate the business which generates considerable profits. I am persuaded that they have largely shared in the care of their son and note that the husband has paid the son's school fees.

1. The husband argued for contributions to be assessed at 32.5 per cent to 67.5 per cent in his favour. The wife sought a 50/50 split in her response, revising the figure down to 45 per cent to 55 per cent in the husband's favour in her outline, to recognise that the "husband's greater initial contribution provided the foundation upon which the subsequent successful business was established" (at [44]).
2. The contributions of the parties should be assessed at 57.5 per cent to 42.5 per cent in favour of the husband.

SECTION 75(2) FACTORS

1. The husband's counsel claimed that a Robb & Robb (1995) FLC 92-555; [1994] FamCA 136 consideration ought to be taken into account in light of the fact that the wife's two sons from another marriage lived with the parties and considerable sums were paid in school fees (around $270,000). I accept that the care of the wife's sons is a relevant consideration.
2. The husband also claimed that he made significantly greater post-separation contributions, as he claimed the child lived with him full-time following separation. I accept he had the primary care of their son when the wife travelled overseas for an extended period (during which her father died). I accept that they otherwise largely share the care of their son now.
3. I note the ages of the parties, although neither has plans to retire in the foreseeable future. The parties have enjoyed a high standard of living over the years.
4. The wife has not attempted to update her qualifications (or retrain) but is pursuing her own business ideas, although does not appear to have yet generated any income of significance. The nature of her role during the relationship has meant that she has few income generating skills other than returning to nursing (which would require updating training or retraining).
5. The husband has business skills, as is demonstrated by the growth of the business interests over time. His income is represented by the notional costs of a manager. He also has skills in property renovations. I note that the business income above the notional costs of a manager is already taken into account in the valuation of the business and should not be double counted by taking it into account as part of his income earning capacity.
6. I take into account the husband's leave entitlements as shown in the company records. They are a liability for the company, reducing its value slightly and a resource of his, as the money is payable to him but not taken up as an asset in his hands. As neither party put that the leave entitlements should be treated as an asset of the husband rather than a financial resource it is appropriate to take them into account pursuant to s 75(2).
7. The disclosure of the business records by the husband was quite unsatisfactory. As identified above, two versions of the loan ledger were produced. The valuer found that she had to make numerous adjustments to the figures to have inter-entity loans balance. The husband did not appear to have a clear understanding of the business finances. Only during the trial did documents get produced concerning the Z Company contract and the letters indicating the loss of the V Company contract. The loan application documents showed a greatly inflated estimated value of the business. The valuation of the business must be considered a conservative valuation in light of these factors. However, there is also the potential tax implications if the loan account is ever repaid although this was not the husband's case. It appears likely that the loans to the husband during the relationship were monies used by the parties and applied to their joint benefit. The loans made after separation were partly used to continue to meet mortgage payments, living expenses, and some child support and spousal maintenance, although the evidence did not go so far as to allow a figure to be struck. The husband clearly received considerable financial benefits from these loans.
8. The husband failed to have the motor vehicles (referred to above as Items 30-32 of the balance sheet of the parties) valued and failed to produce the documents that would have demonstrated the sale prices and amounts of any financing that encumbered the vehicles. The failure to make full disclosure in this regard (particularly given he failed to have the vehicles valued as ordered by the court) is also a relevant factor. However, as discussed above, it appears unlikely that the vehicles would have been owned outright, rather than having significant financing debts. I take this factor into account.
9. When assessing the size of the s 75(2) adjustment as a percentage, I bear in mind the size of the pool of assets, in this case over $10 million.
10. An adjustment pursuant to s 75(2) of five per cent in favour of the wife is appropriate.

1. The effect of the assessment of contributions as adjusted for the s 75(2) factors is that the wife should receive 47.5 per cent of the assets and the husband 52.5 per cent. This results in the wife having net assets (including superannuation) of $4,818,368 and the husband having $5,325,564.
2. The husband wishes to retain the properties (and primarily the Suburb E property) and attempt to obtain finance to pay the wife her entitlements. The wife does not oppose this course. The husband did not seek orders to adjust the amounts should enforcement require sale of properties and nor did the wife (neither as to the price of the properties nor the sale costs and any potential taxation implications) should there be a sale of properties in default of the payment of the sum ordered. I accept the husband will pay out the wife.
3. I am persuaded that it is just and equitable to make an order for the payment of a sum of money to the wife that is fixed and does not alter if the enforcement provisions in the orders require the sale of the properties.
4. The wife will retain the following assets and liabilities:

(a) LL Bank Account #33 $546.00

(b) LL Bank Account #67 $10,003.00

(c) Motor Vehicle 5 $15,000.00

(d) Superannuation Fund 1 (Member No. ...) $118,831.00

(e) Interim property settlement (boat proceeds) $56,609.00

(f) Interim property settlement (K Street) $155,182.00

(g) Funds in Matthews Folbigg Controlled Monies Account $50,484.00

1. The payment of the husband to the wife should be in the sum of $4,411,713.
2. I am satisfied that this is a just and equitable outcome.
3. The form of orders proposed by the wife allows the husband longer to pay, and contains considerable default orders should he fail to make the required payment. As such, I am satisfied that orders largely in the form proposed by the wife are just and equitable and appropriate in the circumstances to give effect to the decision. I will therefore make orders accordingly.

I certify that the preceding one hundred and fifteen (115) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Riethmuller.