Tanzi & Ismailova [2025] FedCFamC1F 499 | Case summary

Tanzi & Ismailova [2025] FedCFamC1F 499 | Case summary | Zoe

[36]

These are property settlement proceedings between Mr Tanzi ("the husband") and Ms Ismailova ("the wife") with Mr Kidist (the husband's brother) as the second respondent, Mr Aviya (the husband's business associate) as the third respondent, and a number of business entities as the fourth (F Pty Ltd), fifth (J Pty Ltd), sixth ( K Land Holdings Pty Ltd), seventh (L Holdings Pty Ltd), eighth (F Investments Pty Ltd as trustee of the F Investment Trust), ninth (F Enterprises Pty Ltd as trustee of the F Enterprise Trust), tenth (G Pty Ltd as trustee of the G Family Trust), eleventh (H Enterprises Pty Ltd as trustee of the M Family Trust) and twelfth (N Holdings Pty Ltd as trustee of the N Holdings Trust) respondents.
It is the wife's case that the husband has diluted his interest in a number of these entities which had the effect of removing significant interests from the pool of property available for division between the parties. Her case against the husband and the entities was expressed in Points of Claim which, unfortunately, were not well drawn but she remains bound by, as counsel who appeared for her at the hearing but who did not draft the document, accepted.
It is asserted, essentially, that the reductions in the interest held by the husband in some of these entities from 50 per cent to 10 per cent should be set aside under s 106B of the Family Law Act 1975 (Cth) ("the Act"). Save for issues arising from those contentions, the balance sheet was largely agreed.
Regrettably, these reasons have taken too long to prepare. That is due in large part to a complex set of facts and an unfortunate looseness in the wife's Points of Claim and the evidence. This is not a criticism of counsel who appeared at the hearing who had only recently come into the matter. Questions of credibility loomed large and, in an attempt to resolve these difficulties, regard was had to the accounts of the various entities. That did not assist, as will appear later in these reasons. The matter was relisted and directions made for written submissions on the reliability of the accounts. The last submission was received on 5 July 2025.

[37]

The husband and wife commenced a relationship in mid-2008 and were married in 2009.
The eldest child, X, was born in 2011 and their second child, Y, was born in 2012.
The husband and wife separated on a final basis in December 2018 and were divorced in early 2020.
Parenting proceeding were settled by consent on 3 February 2023.
Prior to the parties commencing their relationship, the husband owned a property at O Street, Suburb E, NSW, which he had purchased with his brother for $300,000, with monies allegedly lent to him by his parents in 1999 ($150,000). That property was subdivided in 2004 and duplexes built on the lots in 2006, becoming O Street ("the O Street property") and D Street ("the D Street property").
In 2006 the husband, his parents and his brother moved to reside at the property at the D Street property. The O Street property was registered in the husband's brother's name and it was agreed that the husband would hold 99 per cent of the D Street property, the brother holding the other 1 per cent.
In 2011, the husband began discussions with his aunt, Ms P, about becoming partners in a property development business. It will be convenient, for ease of understanding, to refer to her and her daughter, Ms Q, by their first names without intending any disrespect.
The spouse parties purchased a property at R Street, Suburb C in 2012. That property was subsequently subdivided, becoming 1 and 2 R Street. These properties were registered in the wife's name, although the husband alleges that he paid the deposit and stamp duty. 1 R Street was ultimately sold in late 2013 for $640,000 with the husband receiving the net proceeds of $580,235.26. 2 R Street remains owned by the wife and she receives the rent, purportedly in the sum of $695 per week.
In 2012 the husband and his friend Mr Aviya, agreed to purchase a property at B Street, Suburb C ("the B Street property"), in 50 per cent shares. The property was registered 50 per cent to Mr Aviya and 50 per cent to the wife. The husband claims he paid the deposit and stamp duty on the property. The wife currently receives the rent received on this property, purportedly in the sum of $215 per week. Mr Aviya is the third respondent in these proceedings. He appeared on his own behalf on the first and fourth days of hearing and sought an order that he be given the opportunity to purchase the wife's half share of the B Street property. Orders will be made with the consent of Mr Aviya for that course, failing which the property will need to be sold from which he will receive one half of the proceeds.
The discussions with Ms P continued in 2013. The husband is a builder and project manager and has conducted numerous projects as such throughout the marriage, both by himself and in partnership with his aunt and cousin and related entities. The precise nature of the relationship was the subject of much evidence which I shall discuss shortly.
Various projects were conducted through the entities that are parties to these proceedings, and further companies and trusts against which no orders were sought and which were not parties. I do not propose to provide a detailed chronology of all of the transactions and will deal only with those that are relevant to the issues to be determined.
The general arrangement was that a company would act as the trustee of a unit trust which would conduct the development. The husband and Ms P would advance funds to enable the purchase of the land. Funds would then be borrowed from a commercial lender to carry out the redevelopment. Effectively, Ms P's dealings with the husband were conducted by her daughter, Ms Q (the husband's cousin), who gave evidence in the proceedings whilst Ms P did not.
In late 2013 F Pty Ltd was registered with the husband and Ms P holding equal shares. It became the trustee of the F Unit Trust. G Pty Ltd holds the husband's unit entitlement in the F Unit Trust for the G Family Trust. The husband is the sole beneficiary of the G Family Trust.
The husband's evidence during cross-examination differed from what was contained in his affidavit. He said that he did not make any initial contributions to the company and instead his father contributed $793,000 and Ms P contributed $1.5 million.
There was much confusion as to whether or not the husband's father's contribution was by way of a loan to the husband. The husband alleged the existence of an agreement with his parents for a loan of $951,816 signed in August 2016 ("the 2016 loan") with an expiry date of August 2020. During cross-examination it emerged that there were two versions of the 2016 loan agreement (Exhibit 4). The husband had no explanation for this. I will return to this later.
In late 2013, the husband's construction company, S1 Pty Ltd was incorporated. The husband is the sole director of that company and G Pty Ltd is the sole shareholder holding all 10 shares as trustee of the G Family Trust.
In mid-2014, F Pty Ltd purchased both 1 and 2 T Street, Suburb U for $1,075,000. These properties were subdivided and developed into Lot 4, Lot 1, Lot 2, Lot 3, Lot 5, Lot 7 and Lot 6 T Street. All the properties were subsequently sold except Lot 6 T Street.
Between early and late 2014, F Pty Ltd also acquired 1 and 2 V Street, Suburb W, each for $1,085,000.
The properties at V Street were subdivided and developed into four separate properties, being Lot 12, Lot 13, Lot 10 and Lot 11. Lots 12 and 13 V Street were sold in late 2016.
In February 2016 the husband, the wife and the children all moved to reside at 1 V Street, which is now the former matrimonial home. The parties were subject to a rental agreement with F Pty Ltd for $700 per week.
In or around March 2017, F Pty Ltd lodged a change of shareholding issuing eight more ordinary shares, which were taken up by Ms P so that the current shareholding is the husband holds one share and Ms P holds nine shares. This will be the subject of significant discussion shortly.
The wife alleges the husband sold Motor Vehicle 1 which was given to her by her father for $9,909 in late 2017 and retained the funds for himself.
H Enterprises Pty Ltd was registered in mid-2018 with the husband as sole director, secretary and shareholder.
On that same day, J Pty Ltd was also registered with Ms Q as the director and the husband and Ms Q holding equal shares. J Pty Ltd is the trustee of the J Unit Trust.
Also in mid-2018, Ms Q registered F Investments Pty Ltd of which she is the sole director.
On or around mid- 2018 the husband registered S2 Pty Ltd. He is the sole director and secretary and holds all 100 shares (at the time of hearing that company was in the process of being dissolved). That same day, the husband and his cousin registered J Developments Pty Ltd, with both the husband and Ms Q as directors and Ms Q as secretary.
In mid-2018 J Pty Ltd lodged a "Change to Company Details Changes to (Members) Share Holdings" form with the Australian Securities & Investments Commission causing the husband's shareholding to be reduced to 10 per cent (effective mid-2018). On the same day J Developments Pty Ltd lodged the same form also reducing the husband's shareholding to 10 per cent and increasing Ms Q's to 90 per cent.
In mid-2018 a property at 2 Z Street, Suburb W was purchased by J Pty Ltd for $1,250,000. This property was subdivided into six lots.
In late 2018, the husband transferred $850,000 to his parents from F Pty Ltd. The husband states this was in repayment of the 2016 loan agreement. This transfer was done without the knowledge or consent of Ms P or Ms Q. The husband alleges he still owes $101,000 plus interest on the 2016 loan.

[38]

In mid-2019, the husband registered AA Pty Ltd with himself as sole director and secretary. G Pty Ltd is the sole shareholder.
N Developments Pty Ltd was registered in early 2021. The husband was again the sole director and secretary and holds all 100 shares. It was in the process of being deregistered around the time of the final hearing. Also in early 2021, L Developments Pty Ltd was registered. The directors of that entity are the husband, Ms Q and Mr BB and the husband is the secretary. Each of the three directors holds 40 ordinary shares. A third entity, L Holdings Pty Ltd was also registered with Ms Q and Mr BB as directors and the husband, Ms Q and Mr BB each holding 40 shares. This entity is the trustee for the L Holdings Unit Trust in which the units are held equally by the husband, Ms Q and Mr BB's respective entities. L Holdings Pty Ltd was in the process of being deregistered around the time of the final hearing. A fourth company, being N Holdings Pty Ltd, was registered with the husband being the sole director, secretary and shareholder.
In early 2021,K Land Holdings Pty Ltd was registered, with the husband, Ms Q and the husband's brother, Mr Kidist, as directors and each holding 40 shares via their respective entities. That company is the trustee for the K Land Holdings Unit Trust in which the husband, Ms Q and Mr Kidist's respective entities hold equal units. That same day, CC Pty Ltd was also registered, with the husband as sole director and secretary, holding all 100 shares. That entity is the trustee for the CC Family Trust which is a discretionary trust of which the husband is a beneficiary.
The property at 1 Z Street, Suburb W was purchased in mid-2021 for $1,200,000 by K Land Holdings Pty Ltd. $610,000 was provided by the husband's brother towards the purchase and the remaining $645,000 was lent by F Pty Ltd. The money lent by F Pty Ltd is yet to be repaid.
A further property at 3 Z Street, Suburb W was purchased for $1,100,000 by L Holdings Pty Ltd in late 2021. That property was ultimately sold in mid-2024 for $1,520,000 and the net proceeds of $1,397,953 were divided equally between the three shareholders (affidavit of Ms Q filed 23 July 2024, paragraph 159).
In March 2023, the husband refinanced the mortgage over the D Street property for $1,180,000. The husband paid $426,000 from this refinance to his parents in "repayment" of the alleged loan he received in 1999 (husband's affidavit filed 22 July 2024, paragraph 13(f)).
In mid-2023, the property at Lot 2/2 Z Street was sold for $820,000. The property at Lot 3/2 Z Street sold for $765,000 in mid-2023 and Lot 1/2 Z Street sold in mid-2023 for $895,000. The proceeds of sale were directed to the Australian Taxation Office, various loans and J Pty Ltd.
On 20 September 2023, Ms Q's solicitors wrote to the husband's solicitor requesting the husband to resign as director of F Pty Ltd and other companies, which the husband did.
Lot 11 V Streetsold in late 2023 for $1,230,000.
In mid-2024, Lot 10 V Street sold for $1,345,000.
At the time of the hearing, the remaining properties the subject of dispute were:
- D Street, Suburb E
- Lots 4, 5 and 6 of 2 Z Street, Suburb W
- 1 Z Street, Suburb W
- B Street, Suburb C
- 2 R Street, Suburb C
- Lot 6 T Street, Suburb U

[41]

The first series of transactions relates to F Pty Ltd, the F Unit Trust and other associated entities, and the developments at V Street and T Street. This is a complex issue the resolution of which, at first, requires the consideration of a number of separate strands. This issue is similar to the issue relating to the J Unit Trust and the findings as to each have informed findings as to the other. As will become apparent, the unreliability of the evidence has not assisted this task.
As outlined earlier, F Pty Ltd was incorporated in late 2013, with the husband as a director and equal shareholder with Ms P. It became the trustee of the F Unit Trust. Ms P and the husband held one unit each. Relevantly, the husband's unit was held by G Pty Ltd as trustee for the G Family Trust, of which the husband is the sole beneficiary. Ms P's interest was held by H Enterprises Pty Ltd as trustee for the M Family Trust Family Trust.
In early 2017, further shares were issued in F Pty Ltd so that Ms P held nine shares and the husband held one.
A deed of variation to the F Unit Trust was subsequently entered into with effect from 1 July 2017. It empowered the trustee, with the authority of a special resolution of shareholders, to adjust the holding of the units in the trust (Exhibit 67). No change was effected to the units held in the F Unit Trust until after March 2021 when further units were issued to Ms P so that she owned nine units, and the husband retained his original one unit.
It is this transaction that the wife seeks to set aside. The change reflected a fundamental change in the underlying business. It will therefore be necessary to identify, if it can be done, the original underlying business arrangement and then to see what, if any, changes occurred.
In 2014, F Pty Ltd purchased properties at 1 and 2 V Street , Suburb W for $1,085,000 each and S1 Pty Ltd applied for a development application to construct four dwellings on the properties, which eventually became Lots 10, 11, 12 and 13. Once completed in 2016, Lot 13 was sold for $885,000, Lot 12 for $930,000 and Lots 10 and 11 were retained by F Pty Ltd and are now known as Lots 10 and 11 V Street.
Also around 2014, F Pty Ltd purchased properties at 1 and 2 T Street, Suburb U. S1 Pty Ltd was granted a development application and five townhouses and two villas were built. Four of the properties were sold following completion, being Lot 3 which sold for $787,000 in mid-2017, Lot 2 which sold for $800,000 in late 2017, Lot 5 which sold for $680,000 in early 2018 and Lot 1 which sold in mid-2018 for $672,000.
The remaining T Street properties were rented. In mid-2021, the property at Lot 4 was sold for $780,000. In late 2023, Lot 7 sold for $655,000. Lot 6 remains owned by the company.
F Pty Ltd purchased the property at DD Street, Suburb EE in mid-2016 for $1,420,000. This property was sold in early 2019 for $1,815,000.
It is the general tenor of the evidence that Ms P and the husband were to be equal partners (using that word in its non-legal sense) in the development of these properties and were to contribute equally to the capital required. The husband, or companies under his control, were to be the builder. Remarkably, given that this was said to be an arm's length commercial arrangement, apparently no building contracts were entered into. Certainly, none was tendered and no witness suggested that they existed.
The husband's affidavit evidence was that:
1. On or about 2011 I spoke to my Aunt [Ms P] about being my financial partner in my property development business. The reason I asked [Ms P] to come into this project development work was that I asked her to invest in the business and she agreed.
2. Once we agreed, [Ms P] and I waited until an opportunity arose to begin a project. The company for such purpose was created called [F Pty Ltd] ("F Pty Ltd") and was incorporated [in late] 2013. Both [Ms P] and I had equal shareholding of the company. [F Pty Ltd] is the trustee company for the [F Unit Trust]. At pages 59 to 127 of the Exhibit marked [MT1] is a copy of the [F Unit Trust Deed]. A trust was created for my unit interest in the trust which was [G Pty Ltd] as trustee for the [G Family] trust. At pages 13 to 58 of the Exhibit marked [MT1] is a copy of the [G Family] trust deed.
3. When [F Pty Ltd] was incorporated. I recall at that time [Ms P] put in $1.1million into the company and I put in $951,816. For me to put in such amount, I had to request a loan this amount from my parents. The loan agreement between my parents and I is dated 23 August 2016. At pages 5 to 8 of the Exhibit marked [MT1] is a copy of this loan agreement.
4. On 6 December 2013 I incorporated my construction company [S1 Pty Ltd]. I am the sole director of this company. My family trust [G Family Trust] is the sole shareholder of this company and the trustee is [G Pty Ltd]. I am the sole beneficiary of the trust.

[54]

It is useful at this stage to turn to the accounts of F Pty Ltd as trustee of the F Unit Trust.
The accounts for 2014 (Exhibit 10) record the acquisition of 1 T Street and 2 V Street. The sum of $2,377,667 is described as current liabilities with $793,353 owing to Mr GG (the husband's father) and $1,584,314 to H Investments Pty Ltd. The husband was one of two directors and it is likely that he provided the information as to the source of the funds from his side.
This loan from the husband's father is not in the same sum as the asserted loan agreements between the husband and his parents (which will be discussed later). The husband asserted that the entry was incorrect in that he should have been shown as the lender (Transcript 23 September 2024, p.22 line 4 to p.23 line 27).
Interestingly, the advances from H Investments to the F Unit Trust are supported by written agreements between them but the advance from the husband's parents, or the husband, appear not to be.
The 2015 accounts (Exhibit 2) record the same amounts as current liabilities for Mr GG and H Investments Pty Ltd. A non-current liability of bank loans totalling $950,000 also appears.
The amounts for 2016 are not in evidence but can be obtained from the 2017 accounts (Exhibit 77). The bank loans totalled $952,429 and the current liabilities $2,561,608, being $944,077 to Mr GG, $1,596,407 to H Investments Pty Ltd and $14,854 to the G Family Trust.
The 2017 accounts (Exhibit 77) show that the property at DD Street had been acquired by mid-2017. Bank loans in 2017 totalled $1,658,012.
The current liabilities for 2017 included Mr GG for $788,277, H Investments Pty Ltd for $1,296,408 and the G Family Trust $535,199. The two unit holders, M Family Trust Family Trust and G Pty Ltd Family Trust, are recorded as having an unpaid present entitlement of $107,942 each.
In 2018 (Exhibit 3), the bank loans were $2,085,907 and the amount owing to H Investments Pty Ltd was $1,396,408. The Mr GG loan remained the same and the G Family Trust loan increased to $555,199.
The 2019 accounts (Exhibit 5) record the lots at 1 T Street being sold with a gross profit of $1,060,361.87. A distribution of $729,970.14 made to the M Family Trust and $81,107.79 to the G Family Trust appears (i.e. a 90 per cent/10 per cent division). It is recorded as unpaid.
Interestingly, the relevant loans are now described as Mr GG for $124,617, G Family Trust for $212,199 and H Investments Pty Ltd as nil. Ms Q could not explain the reductions (Transcript 25 September 2024, p.208 line 36 to p.209 line 11). Later she accepted that a repayment had been made to Mr GG (Transcript 25 September 2024, p.211 lines 18-23). The husband also said a payment was made to Mr GG (Transcript 23 September 2024, p.25 lines 17-21).
Inconsistently with the 2018 accounts, the 2019 accounts record the 2018 figure for the H Investments Pty Ltd loan as $844,105 rather than $1,396,408.
The husband was a director and trustee throughout these periods. He agreed he saw the accounts. The accounts clearly differentiate between advances made by an entity on his behalf and those made by his father directly. He was adamant in his cross-examination that his affidavit evidence was correct but could not explain why the accounts record his father as a lender.
This casts a shadow over accepting that part of his evidence.

[55]

It is of assistance now to look at the evidence of the advances from the husband's father.
The loan agreement of 23 August 2016 between the husband and his parents is a curious document. It exists in two versions (Exhibit 4) which are in an entirely different format but said to be executed by the same parties before the same witness on the same date. The text is completely different. The interest rate in one is 10 per cent per annum and 8 per cent per annum in the other. Both agreements are for a four-year term.
The first describes the commencement of the loan as 23 August 2016 and requires payment four years later. It says little more.
The second describes the purpose of the loan as the construction and development of 1 R Street1 T Street and DD Street.
The evidence of Ms Q was that the funds were advanced in 2016 for construction and development. The husband's evidence is that this advance was used for the initial investment a number of years earlier (despite the discrepancy in dates). Obviously, both versions cannot be correct.
Neither of the husband's parents gave evidence, although they were available to do so. This does not enhance the acceptance of either version as a genuine agreement.
As I have said, the 2014 accounts of the trustee for the F Unit Trust record an advance from the husband's father in the sum of $793,353. There is no written agreement in evidence between the father and the trust. The husband ultimately said the loan was to him first and then he advanced $951,816 to F Pty Ltd as trustee. This was, he said, pursuant to the written loan agreement of 23 August 2016.
This is either wrong or the agreement was entered into some two years after the advance, because the loan, whoever it be from, is recorded in the 2014 accounts.
The husband's evidence was also that his parents were repaid $850,000 in 2018 "from [F Pty Ltd]" (husband's affidavit filed 22 July 2024, paragraph 75). This was said to be a repayment under the 2016 loan agreement, notwithstanding that loan was not yet repayable under the agreement.
The husband asserts that he still owes $101,000 plus interest to his parents under the 2016 agreement (husband's affidavit filed 22 July 2024, paragraph 76).
In cross-examination, the husband agreed that the money provided, he said through him, was well before the 2016 agreement (Transcript 23 September 2024, p.21 lines 40-41). He later said:

[58]

[MR COX]: There's nowhere else for you to get $550,000 at that time, though, is there?

[HUSBAND]: No. I can get it from my parents.

[MR COX]: Another loan?

[HUSBAND]: No. Well, that's my parents' input into [F Pty Ltd].

...

MR COX: I showed you the - well, different year for the [F Unit Trust] previously, but can I just show you the 2014 one. Just to satisfy yourself that that's what it is. Is this the position, the 550,000 that was deposited by you on 11 March, does it form some portion, as you understand it, of the 793,000 contributed to [F Unit Trust] by your father?

[HUSBAND]: I couldn't be certain.

[MR COX]: Well, you were the person who gave the instructions for these accounts to be prepared; correct?

[HUSBAND]: Yes.

...

[MR COX]: Well, you say that the proceeds of sale of [1 R Street] were paid to your parents; correct?

[HUSBAND]: Yes.

[MR COX]: So where did you get the 550,000 that's put into [F Pty Ltd]?

[HUSBAND]: That was from my parents as well.

[MR COX]: So you gave them - you repaid them with one hand and they gave you money with the other hand. Is that what you say?

MR WONG: Well, I object. It's not his evidence that they gave it to him.

MR COX: Well, they transferred - you transferred an amount of the proceeds of sale of [R Street] to them and they transferred another amount to you of 550,000, is that what you say, within the same week?

[HUSBAND]: I - I - I can't recall.

[MR COX]: I suggest to you that you don't actually remember what the source of the 550,000 that went into [F Pty Ltd] was?

[HUSBAND]: It - it was from my parents.

[MR COX]: I suggest to you that it's much more likely it came from the proceeds of sale of [1 R Street]?

[HUSBAND]: No.

[MR COX]: And you really don't remember?

[HUSBAND]: No. I don't - I don't remember your previous question where you asked me.

[MR COX]: What I'm suggesting to you is you don't remember where the 550,000 came from in 2013 without reference to some documents.

MR WONG: I object. The witness has answered - - -

...

MR COX: And you don't suggest that you have a memory of having a spare 550,000 floating around in 2014?

[HUSBAND]: I - like I said before, I can't recall.

[MR COX]: No. No. I accept you don't recall - - - ?

[HUSBAND]: Yes.

[MR COX]: - - - but in circumstances where you don't recall, and we know you received $580,000 from [1 R Street], I suggest it's much more likely the money came from the sale of [1 R Street]?

[HUSBAND]: I - I can see how you would see it that way.

[MR COX]: And what's your evidence as to the likelihood?

[HUSBAND]: Without bank statements, it's pretty hard to - to say, and I - like I said, I can't recall.

[MR COX]: Can I suggest to you that you have no basis for saying positively that you received the money from your parents?

[HUSBAND]: No.

[MR COX]: You don't have a bank statement showing it coming from your parents, do you?

[HUSBAND]: I don't have one on me or - I'm not sure, because it's over seven years, if I can even get one.

(Transcript 23 September 2024, p.32 line 30 to p.35 line 45)

[67]

Interestingly, the last comment tends to suggest that it was the husband and not Ms Q who was perceived as the person seeking the change.
In the accounts, the current liabilities owed to Mr GG, H Investments Pty Ltd and the G Family Trust changed during this period only by the inclusion of the G Family Trust by an advance of $555,199 somewhere during 2015 to 2017. This was not explained in the evidence. The payments made by the husband in reduction of his father's loan appear not to have been picked up in the accounts for the 2017 or 2018 financial years by a reduction in the indebtedness to the husband's father.
The respondents tendered a schedule under s 50 of the Evidence Act 1995 (Cth), detailing the amounts the husband paid from the F Unit Trust Business Transaction Account and the J Unit Trust Business Transaction Account (Exhibit 43). The first transaction is on 1 December 2016 and the last on 6 March 2024. The total is $1,839,247.
The transactions range from very small to large. Some are clearly personal expenses of the husband and some are payments to the husband's lawyers. There are many payments to the husband's father (described as "dad top up" or "[Mr GG] loan"), himself ("[Tanzi] repayment" or "transfer to [S1 Pty Ltd]"), many restaurants and liquor stores, as well as to "[...]", "[...]" and "[...]" - all of which seem to be personal expenses. Some, such as petrol stations and entries marked "wages" could well be business expenses, but there is no explanation of the entries. The bulk, if not all, of the building expenses seem to have not been included.
Notwithstanding this, the evidence of both the husband and Ms Q was that the payments were not improper, but merely premature.
On 1 March 2021, Ms P sent an email (from Ms Q's email account) enclosing a letter of demand from lawyers "being finalised this week" to the husband (Exhibit 8). The subject line is "I am sharing 'Letter to [Mr Tanzi] 12.11.20' with you". Ms Q said she sent this on behalf of her mother. A draft version of the letter with amendments marked up (bearing the original date of 12 November 2020 amended to 19 February 2021) was attached.
Sending a draft letter of demand to the husband is rather odd.
The letter itself makes many complaints against the husband including:
1. Our client does not believe consider that you have contributed the time and effort required to deliver the Projects on budget or time. You were involved in other activities which competed with your time and resources, and consequently did not devote your time exclusively (or adequately) to the Projects of the joint venture.
2. The [Suburb W] was to be completed by December 2015. However, as a result of your inattention it was not completed until [late] 2016 and was approximately $200,000 over budget;
3. Our client was assured that the [Suburb U] Project would be completed by January 2018, and on that basis our client agreed to commit to more debt and fund various holding costs in order to acquire and develop the land. Contrary to your assurances, as a result of your inattention, the [Suburb U] Project was not completed until [mid]2018 and was also approximately $200,000 over budget;

[81]

In cross-examination, the husband agreed that it was his father who made the advance to F Pty Ltd and not himself (Transcript 23 September 2024, p.18 lines 31-35). Later he said the advance was through him (Transcript 23 September 2024, p.21 lines 26-27). He maintained that view (Transcript 23 September 2024, p.22 lines 8-10).
Difficult as it is to follow, my impression was that the husband's evidence was to the effect that the money advanced by Mr GG to F Pty Ltd was the same advance which was the subject of the 2016 loan agreement with him (Exhibit 4).
According to the husband, Mr GG asked for the repayment of the advance in 2018 notwithstanding, if it was under the 2016 loan agreement, it was not repayable until 2020.
The husband did not recall a repayment from F Pty Ltd of some $330,000 that would explain the reduction of the G Pty Ltd loan from $555,199 to $212,199 in the 2019 accounts. He said that if it occurred, it would have been recorded in his Financial Statement filed in 2019 (Transcript 23 September 2024, p.25 lines 6-15).
It appears that there was a change in accountants who, according to Ms Q, may have had to redo some of the accounts at some stage. The reasons for the difference in the accounts between 2018 and 2019 remain unexplained.
I did not find the husband's evidence on this aspect of the case persuasive - a view supported by his evidence on J Pty Ltd and 1 Z Street which was also unsatisfactory.
I also found it difficult to accept the evidence of Ms Q. It was not consistent with the husband's evidence or the accounts. On a couple of occasions, when posed difficult questions, Ms Q would respond with things such as "That would be a question for the accountant" (Transcript 25 September 2024, p.199 lines 10-11), or "I'm not an accountant... I can't give evidence to what these figure correlate to without having direction from an accountant" (Transcript 25 September 2024, p.209 lines 9-11).
This was also a frequent retort by the husband on other aspects of the matter.
The accountants did not explain these matters. Whilst the current accountant was on affidavit, which annexed a summary of what he considered the current ownership structure to be, his evidence did not attempt to explain the accounts. He was not cross-examined. The true nature of the structure of F Pty Ltd and the F Unit Trust and payments to and from the accounts are particularly within the knowledge of the husband, Ms Q and the accountants. It would be expected that one or either of them would be able to call accounting evidence to bolster their case (Blatch v Archer (1774) 1 Cowper 63). It was not for counsel for the wife to cross-examine the accountant to seek out such evidence.
Three more matters must be raised. The justification for the reduction of the husband's interests in the F Unit Trust from 50 per cent to 10 per cent was that he had unilaterally made unauthorised payments of personal expenses and loans, the latter being said to be a premature repayment of capital (i.e. the initial advance) from working capital (funds borrowed from the bank to continue the development).
However, the reduction in working capital was not solved by restructuring the ownership of the units in the trust. A loan account could have been raised against the husband as a director. The amounts paid could have been set off against the management fee her or his company was to receive on the completion of the project. The husband could have been asked to repay the money. It is, therefore, an odd response.
That does not, of itself, prove anything as people can order their affairs as they choose, but it is a consideration to be borne in mind.
The asserted repayments of the loan to F Pty Ltd from Mr GG do not appear to be reflected in the accounts (accepting that there was some reduction in the sum owing). It may have been the repayment of another loan, possibly the one from the parents to develop R Street, as the husband said, but that did not cause a reduction in capital from F Pty Ltd for more than a few days as $550,000 seems to have been immediately returned.
Notwithstanding the unauthorised payments, no steps were taken to limit or control the husband's spending. Whilst it was true that they were in the middle of building and the husband, as the builder, needed to be able to pay for expenses, it would have been easy to impose limits on spending, such as requiring two people to authorise payments over a certain amount.
Not only was this not done, Ms Q entered into further projects with the husband on the same uncontrolled basis.
As noted earlier, the first steps taken in respect to these repayments was on 16 January 2017 and then proceeded with no urgency at all.
Further, I do not regard the 2021 letter as a genuine letter of demand. The fact that a draft was sent first to the husband for his comments strongly suggests this to be the case. The terms of the letter and its timing sit oddly with the concerns raised in it. It casts a further shadow over the evidence of Ms Q and the husband. Its existence casts a doubt on the genuineness of the dilution of the husband's unit holding.
Also entirely unexplained is the delay of three years in seeking to give effect to the agreement to reduce the husband's interest in the F Unit Trust, where the husband and Ms Q approved accounts showing the existing interest. To say it was an oversight by accountants is not at all convincing.
These matters combine to add to the view that the evidence of the accounts, the husband and Ms Q, cannot be relied upon.
The further submissions of the corporate respondents and the husband as to the reliability of the accounts did not come to grips with the above difficulties of reconciling the different evidence of different witnesses to the accounts. Rather, they pointed out the following:
- The Court should not assume the role of an expert witness or undertake a quasi‑inquisitorial role on behalf of the wife;
- The wife bears the onus of proving her case against the corporate entities;
- The wife did not call any expert evidence; and
- The annual accounts are simply a snapshot of an entity's position as at 30 June each year and not a ledger of the movements that have occurred during a year.
I accept each of these propositions.
I have not sought to explain the accounts or to rewrite them. However, they are in evidence and regard was had to them to try to settle differences in other evidence. As I have pointed out, this increased the discrepancies rather than solving them. This was exacerbated by, at times, the accounts appearing to be inconsistent or not followed.
Unassisted by expert evidence, I cannot take that exercise further. However, the accounts, such as they are, could perhaps readily be explained by expert evidence that might favour one side or the other. There is no such evidence. I merely note that the accounts do not assist in supporting the credibility of any particular witness.
It is trite to say that the wife bears the onus of proving her case. That is not done simply by persuading a court that the witnesses for the respondent should not be accepted.
The last bullet point is correct. However, the accounts and the evidence should match. For example, the question of the initial capital contribution made by or on behalf of the husband is not solved by reference to the accounts. The asserted reduction of this advance again seems not to have been picked up in the accounts (noting there is no suggestion of a further advance at this time).

[92]

Proposed orders 3 and 4 seek the reversal of one part of the quid pro quo but not the provision of the benefits to the husband. Requiring the respondents to repay funds received by them from the trust where the husband could not repay to the trust the funds he received from it would be most unfair.
The effect of the arrangement was to replace a "capital" interest of the husband in the F Unit Trust with the use of its income. I do not accept that the $1.8 million received by the husband was largely for business expenses. Many of the expenses are clearly personal. The repayment of loans, like so many things in this matter, do not match the records.
The reality is, however, that an interest was not removed from the reach of the wife - it was replaced with a right of a different kind. The "capital" interest, to use that word loosely, of a right to receive distributions when declared was largely replaced by an entitlement to use income. That alone makes success on the s 106B claim in relation to the F Unit Trust difficult to make out.
The 2024 amended tax return for the F Unit Trust shows total assets held by it as $3,408,554 with liabilities of $2,010,430 (Exhibit 59). The two major assets were buildings at cost ($541,996), a loan to the K Land Holdings Unit Trust ($644,416) and a loan to the J Unit Trust ($2,216,678).
The F Unit Trust conducted the development of the T Street and V Street properties creating a number of lots. Only Lot 6 T Street remained owned by the trust at the time of the hearing. The cost of the building is unlikely to be its current value but there is neither a valuation of the land, nor buildings, nor the trust.
The 2024 tax return for the J Unit Trust shows assets of $4,234,299 and liabilities of $4,234,189 (Exhibit 75). Its major assets are land at cost ($1,305,799) and a loan from the F Investment Trust of $1,847,916. Again, there are no valuations of any kind.
I do not propose to conduct this exercise further. It is not for the Court to act as a valuer of either real estate or commercial entities. Ultimately, the value of the F Unit Trust depends on the recoverability of each loan in the chain. There is no evidence by which to determine that.
It follows that the only evidence that would permit quantification of the current value of a unit in either trust is that which can be gleaned from the 2024 tax returns. Leaving aside issues of recoverability, recovery of assets may trigger unknown tax consequences. The sale of any land would almost certainly attract capital gains tax.
The non-spouse respondents opposed the orders, raising the lack of expert evidence as to the consequences, including tax consequences of the order and consequences to the other many entities given the intercompany loans and other liabilities of them. For example, H Investments Pty Ltd received a dividend in 2018 and the funds have undoubtedly been used in some way. There is no evidence it can repay the dividends received or, again, the commercial or taxation consequences of doing so. That speaks against making orders against the respondents.
A difficulty in finding that the agreement or arrangement was for the purpose of defeating the wife's claim is identifying what anticipated order there was at the time. That, in turn, depends upon the time the arrangement was made, which is difficult to pinpoint. Whilst most of the steps that were taken by the respondents occurred after separation when a property settlement order was reasonably in contemplation, not all were.
The claim for a s 106B order in relation to the F Unit Trust and H Enterprises Pty Ltd therefore must fail.
Rather, I find the position is that identified in the respondents' submissions, namely "The use of the $1,800,000 by the Husband is a matter between the Husband and the Wife" (fourth to eighth and eleventh respondents' written submissions filed 14 November 2024, paragraph 30).

[93]

The next series of transactions involves J Pty Ltd, the J Unit Trust and other associated entities, and the development at 2 Z Street.
When the J Unit Trust was settled in May 2018 the initial unit holders, with 50 shares each, were F Investments Pty Ltd as trustee for the F Investments Trust and F Enterprises Pty Ltd as trustee for F Enterprises Trust. The first is essentially Ms Q and the latter the husband.
On 13 August 2018 a "Transfer of Shares" document was executed by the husband and Ms Q along with an ASIC "Change to Company Details" form recording that the shareholding in J Pty Ltd, the trustee of the J Unit Trust, held by the husband decreased from 50 per cent to 10 per cent and Ms Q's increased from 50 per cent to 90 per cent.
It seems that little occurred after this correspondence. Ms Q described the next step as her consulting lawyers in late 2019 which led to a letter being sent to the husband in March 2021. This is the letter to which I have already referred and which refers to the F Unit Trust.
In cross-examination Ms Q said that she instructed the accountants that there was to be a 90/10 interest in the J Unit Trust, that the accountant assumed it was 50/50 and prepared the deed accordingly, but "corrected his error straight away" (Transcript 25 September 2024, p.205 lines 10-16).
The reason for the 90/10 division was said to be that the funds used for the development were borrowed from F Pty Ltd (Transcript 25 September 2024, p.205 lines 45-47).
As I have said, the shareholdings in J Pty Ltd were changed on 13 August 2018. A "Transfer of Units" was also executed on this date recording the husband's company, F Enterprises Pty Ltd, as transferring 40 units in the J Unit Trust to Ms Q's company, F Investments Pty Ltd (Exhibit 68).
Also forming part of Exhibit 68 are two "Unit Certificates" for the J Unit Trust showing F Enterprises Pty Ltd holding 10 units and F Investments Pty Ltd holding 40 units. They were also signed on 13 August 2018. I take it that they were in addition to the previous certificate showing F Enterprises Pty Ltd holding 50 shares.
This resulted in Ms Q and the husband, through their corporate structures, holding 90 and 10 units in the J Unit Trust respectively. The trust accounts for 2019 appear to have been prepared on that basis (Exhibit 79).
Neither the evidence nor the submissions attempted to reconcile those documents with the trust deed.
The wife pleaded her case as:
1. The applicant is the principal and primary beneficiary in and of the [F Enterprises] trust and owner of all the shares in the trustee of the trust [F Enterprises Pty Ltd].
2. [F Enterprises Pty Ltd] as trustee of the [F Enterprises Trust] did previously own 50% of the ordinary units in [J Unit Trust].

[119]

The parties were married in 2009 and commenced living together at the D Street property. The husband had a 99 per cent interest in it, which was subject to a mortgage in the sum of $275,000. There is no evidence as to the value of his interest. He said that he had superannuation in the amount of $50,000.
The wife had no assets of significance.
During the relationship the wife was the primary caregiver to the children and, at times, was also employed.
The husband worked as a builder and property developer, often working seven days a week. It is fair to say that whilst he has worked very hard, the burden of caring for the children has therefore almost solely been borne by the wife.
The parties separated in December 2018.
Prior to separation, in February 2016, the parties moved into the property at 1 V Street, which was owned by F Pty Ltd and was one of the properties that resulted from their development.
A residential lease of the property for 12 months at a rent of $700 per week was entered into by F Pty Ltd and S1 Pty Ltd and commenced on 28 February 2016 (Exhibit 50).
After separation in December 2018, the wife and the children remained in the property but ceased the payment of rent.
In early January 2020 the husband informed the wife via text message that she should put the electricity and gas accounts for the 1 V Street property in her name. The wife's solicitors wrote to the husband's solicitors on 6 January 2020 explaining their client was unable to do so as the property was registered to F Pty Ltd.
Also around this time, the husband's solicitors wrote to the wife's solicitors informing her the lease on the 1 V Street property was expiring and she would either have to vacate the property or renew the lease in her name. On 5 February 2020 the wife received a letter to the same effect from Ms Q. On 27 April 2020, the wife received an email via her solicitors from the estate agents working for F Pty Ltd offering a 6 or 12 month lease of the property with rent of $650 per week. The email attached a tenancy application form.
On 14 November 2023 a senior judicial registrar made orders for the wife to give F Pty Ltd vacant possession of the property by 31 December 2023. The wife left the property a few days after that date.
Whilst some time was spent on this point, I do not see how the wife's occupation of the property bears on the outcome of the proceedings as between the husband and the wife given the majority interest in F Pty Ltd, by this time, was held by Ms P. The burden of her occupation without the payment of rent was borne by F Pty Ltd and not, apparently, by the husband. Previously an agreed rent was paid. The Court does not recognise "negative" contributions and it was not submitted that her occupation was some form of "waste" (Kowaliw and Kowaliw [1981] FamCA 70; (1981) FLC 91-092).
One of the developments conducted by the husband was R Street. The property was purchased in the name of the wife and then developed into a dual occupancy. In 2014 the parties moved into one of the houses and the other was sold. Upon the move to the V Street property, the wife rented out the R Street property and she currently receives rent of $695 per week.
In 2012, the husband and Mr Aviya, a friend who is the third respondent in these proceedings, purchased and developed a property at B Street. The wife and Mr Aviya became owners in half shares. The property has been rented out with the wife receiving half of the rent in the sum of $215 per week.
The husband contends that the wife has not fully disclosed the rent she has received. It is clear that she has not disclosed at least some bank accounts into which rent was paid and her evidence as to her inability to obtain that evidence was impossible to accept.
The wife therefore has the benefit of this rent. She has used a significant amount to service the mortgage. According to her Financial Statement filed 8 April 2024, the rent on the R Street property is currently $695 per week and the mortgage is $450. She receives $215 per week in rent from B Street and pays that towards the mortgage payment of $260.
As has been mentioned, the husband has had the benefit of the NN Financial Services mortgage but that use is being taken into account on the balance sheet and will be (in relation to the repayment to his parents), in due course, also considered under s 75(2)(o) of the Act. It cannot be counted twice.
Since separation the husband has only paid nominal child support and nothing else towards the support of the children.
The wife has had the benefit of the rent received.
She has borne the care of the children herself since separation. The husband has not spent time with them. On 3 February 2023 final parenting orders were made by consent that the children live with the wife and that she have sole parental responsibility for them.
The initial contributions slightly favour the husband. The contributions during the relationship should be regarded as equal with the post-separation contributions favouring the wife.
Taking these matters into account, the contributions at the time of the hearing favour the wife as to 53 per cent and the husband 47 per cent.
As to the future, the wife presently earns $800 per week at her place of employment where she works part time. She will continue to receive the rent from R Street but not B Street. She and Mr Aviya have agreed that orders should be made for Mr Aviya to buy the wife out or, failing that, for the property to be sold and the net proceeds divided equally.
The wife will have the sole support and care of the children for at least another five years.
The husband's future as a builder and property developer is uncertain but he seems to have had constant work.
I do not see the wife's non-disclosure of rent and bank accounts as particularly significant. The amounts could easily be verified by the records of the letting agent and the bank. There is no doubt that the properties were leased and the mortgages paid.
It follows from the earlier finding that the husband has had the benefit of significant sums of money since the F Pty Ltd projects commenced in 2016. Whilst some of the money was used, apparently at least, for building expenses, some was clearly used for personal expenses and significant sums were paid to the husband's parents or his father. The total was at least $1.9 million.
As I have said, I have not found much of the evidence of the husband or Ms Q to be acceptable and I am not persuaded of the reliability of the financial accounts before the Court. The loan agreements between the husband and his father are markedly suspicious with the two written agreements each appearing in two versions which is entirely unexplained. Neither of the husband's parents gave evidence and no explanation was proffered for their absence.
Significantly, the accounts do not reflect what is said to be payments made by the husband to reduce his loan from his father from the F Pty Ltd account.
The husband has received significant distributions. In addition to those noted in [186] and [195] above, the husband has received the following:
- $465,984 from the sale of the property at 3 Z Street (affidavit of Ms Q filed 23 July 2024, paragraph 159). Apparently, at least $155,000 of that was paid to Ms Q (Transcript 26 September 2024, p.235 line 21 to p.236 line 37).
- A distribution of $34,910 as recorded in the 2024 accounts for the L Holdings Unit Trust (Exhibit 14).
- A distribution of $35,453 recorded in the 2024 accounts for the K Land Holdings Unit Trust as a non-current beneficiary account (Exhibit 58) and reflected in the 2024 trust tax return as a liability (Exhibit 75). It is not clear to me whether the husband actually received these funds.
The husband was cross-examined about the first of these. The husband's evidence was that it was not paid to him but to an entity under his control. As to what then happened to it, he said "ask the accountant. I don't know how it was distributed" (Transcript 24 September 2024, p.65 line 12).
As to whether or not there was a reference to the distribution in his Financial Statement, the husband said:

[123]

Neither the accounts nor tax returns of the holding trust were able to shed any light on the matter.
Some he said were used to repay loans to his parents and yet similar amounts seem to have been reinvested in F Pty Ltd or J Pty Ltd.
I simply do not know the true position of the entities associated with the husband or the funds he has received or what he has done with that money. There has therefore been significant non-disclosure by the husband.
It is well established that findings of non-disclosure permit the Court to draw adverse inferences against the defaulting party or refuse to make an inference sought by their case (Weir and Weir [1992] FamCA 69; (1993) FLC 92-338 at 79,593). It may also have consequences in the determination of what orders altering property interests are just and equitable including a conclusion the asset pool is greater than the evidence provides and justification for the Court taking a "robust" or "broad brush" approach to the considerations under s 79 of the Act (Zha & Wun (No 2) [2025] FedCFamC1A 101; Gould & Gould [2007] FamCA 609; (2007) FLC 93-333 at 81,715; Weir and Weir [1992] FamCA 69; (1993) FLC 92-338 at 79,594). The Full Court has indicated that this robust approach may allow a judge to conclude the asset pool is greater by the estimated value of any non-disclosed assets or to consider the non-disclosure under s 75(2)(o) of the Act to err on the side of generosity in favour of the party who would otherwise be disadvantaged by the non-disclsoure (Mayhew v Fairweather [2022] FedCFamC1A 53; (2022) 64 Fam LR 633 at [14]; Zha & Wun (No 2) [2025] FedCFamC1A 101 at [62]-[64]).
The husband has, in the words of Ms Q, received a "flood" of money. He has voluntarily allowed his interests in two valuable unit trusts to be diluted from 50 per cent to 10 per cent. It is easy to draw from these two facts and the non-acceptance of the evidence attempting to explain it that the two are linked, even if the precise link cannot be identified.
There is therefore force in the following submission made by the wife:
1. Alternatively, in the event that the Court is not persuaded to make the s106B orders, then the wife submits that the totality of the known pool should be provided to her under s79 as the disparity between the value of what the husband has access to by way of his property developments enterprises requires this to affect a just and equitable outcome to the wife.

[125]

This is not to, in effect, punish the husband for the rejection of his evidence. It is a reflection of the state of the evidence overall which resulted in the significant reduction in the husband's interest and the receipt of very large sums of money remaining unexplained. I consider, however, the wife's submission goes too far.
For these reasons, I have dealt only with the issues raised by the parties for determination. As the husband's affidavit makes clear, he had interests in many other entities and projects which have been ascribed no value because they cannot be valued or at present appear to have no value. It was not suggested that these should be taken into account.
As for the future it is likely that the wife will retain the care of the children without any support from the husband.
It then remains to consider what is to be done about the funds received by the husband. They include the funds taken from the joint developments with Ms P as well as the distributions indirectly made to him.
As I have already said, it may easily be concluded that much of the funds in the first group have already been spent or at least disposed of. Some appear to be business or personal expenses. Others are more problematic, such as the payments made to the father as "top-ups" or, supposedly, loan repayments. They appear not to have been reflected in any accounts or in other repayments.
The fate of the distributions was either unexplained or not satisfactorily explained. The evidence does not, however, permit a finding that someone, such as the father or one of Ms P's entities is "warehousing" funds on the husband's behalf.
Nonetheless, the husband's receipt of these amounts must be taken into account. After all, the funds received, other than the distributions, were some form of quid pro quo or recompense for the reduction of the percentage of units held in the F Unit Trust and the J Unit Trust.
The wife submitted that the way these matters should be taken into account, especially if there were no orders against the other respondents, was for the husband to retain his interests in the various entities and for the wife to receive the balance of the property.
Excluding the husband's superannuation for the moment, that would see the wife retain or receive:

[127]

For the sake of argument, a 53/47 split of all of the balance sheet items would see the wife receive or retain $1,580,813 (53 per cent of $2,982,667). Such a figure does not recognise the contributions that have been made and will continue to be made by her as the sole carer of the children for the next five years or so, with little to no financial input from the husband.
It also does not take into account the distributions received by the husband, the fate of which has not been revealed ($536,347), the amount paid to the husband's father from the NN Financial Services mortgage ($420,000), or the amounts received from the developments with Ms P. Adding 53 per cent of the total of the first two ($506,864) to the 53 per cent figure, would see the wife's share rise to $2,087,678. That exercise still does not take into account the future care of the children by the wife.
The exercise does, as a cross-check, assist in assessing the justice and equity of the wife's proposal. It is, however, an artificial exercise because it pre-supposes some certainty about financial matters when the only certainties here are as to the real estate and superannuation entitlements. In this case the uncertainties do not detract from the Court's capacity to make a just and equitable property division (see also Zha & Wun (No 2) [2025] FedCFamC1A 101). Nevertheless, that uncertainty cannot be sheeted home to the wife.
I recognise that the wife's proposal would leave the husband with balance sheet items that appear not to be of great worth. As explained already, I am sceptical about the value of his interest in the various entities. I am far from satisfied that I know the nature of the arrangements between Ms P, Ms Q and the husband, and especially the arrangements between the husband and his parents.
I accept that the D Street property is where the husband lives.
Having regard to these considerations, I find that the more appropriate course would be for the wife to retain the balance of the property excluding the D Street property, for the husband to retain the D Street property and for the husband to pay the wife a sum of $500,000. Each of the husband and the wife will also retain their respective superannuation. This will see the wife receive $2,142,382 consisting of the following property:

Tanzi & Ismailova [2025] FedCFamC1F 499 (25 July 2025)

At a glance

Court

Decision date

Before

Source

Judgment (134 paragraphs)

Legislation Cited (2)

Cases Cited (2)