DVN v J [2008] QDC 12

DISTRICT COURT OF QUEENSLAND CITATION: DVN v J [2008] QDC 12 PARTIES: D V N Plaintiff V J First Respondent V FIDUCIAL TRUSTEES LIMITED AS TRUSTEE OF THE ELORINDI ASSET TRUST Second Respondent V RAYMOND PEARS Third Respondent FILE NO/S: D629 of 2006 DIVISION: Civil Jurisdiction PROCEEDING: Application for Property Adjustment Order ORIGINATING COURT: District Court Southport DELIVERED ON: 11 February 2008 DELIVERED AT: District Court Brisbane HEARING DATE: 12, 13, 14 and 20 December 2007 (Final submissions received 25 January 2008) JUDGE: Kingham DCJ ORDER: 1. That the first respondent pay the applicant the sum of $138,075 by way of property adjustment by bank cheque payable to “Jones Mitchell Lawyers Trust Account” within one month from the date of this order. 2. That pending the first respondent’s compliance with paragraph 1 of this order, the injunctions in Paragraph 6 of the order dated 27 August 2007 and paragraph 1of the order dated 13 December 2007 are hereby extended until further order. -- 1 of 30 -- 2 3. That if the first respondent defaults in payment in accordance with paragraph 1 of this order (“default”):- 3.1 The first respondent shall, within 3 days after its delivery by the applicant, do all acts necessary to execute an authority addressed to the Commonwealth Bank of Australia authorising and directing the release of the entire funds standing on deposit in YouthSaver account number 443010706325 in the name of IR Johnson to the applicant by way of bank cheque in favour of “Jones Mitchell Lawyers Trust Account”, and in the event of the respondent’s default of compliance with this paragraph, the Registrar or Deputy Registrar of the District Court of Queensland at Southport is hereby appointed to sign all documents necessary to implement this order in the name of the respondent; and 3.2 The applicant be and is hereby appointed trustee for the sale of the property at 10 Warrigal Crescent, Ashmore in the State of Queensland (“the Ashmore property”), and for that purpose the following shall apply:- 3.2.1 The first respondent shall, within three days after default, transfer to the applicant as trustee, the whole of his right, title and interest in the Ashmore property, subject to the existing mortgage in favour of Perpetual Trustees Victoria Limited; 3.2.2 In the event of the first respondent’s default under paragraph 4.2.1 of this order, the Registrar or Deputy Registrar of the District Court of Queensland at Southport is hereby appointed to sign all documents necessary to implement this order in the name of the first respondent; 3.2.3 The first respondent shall vacate the Ashmore property and deliver all keys, codes and devices in respect of the property to the applicant within 14 days after default, and thereafter remain away from the property and not re-enter it; 3.2.4 The first respondent shall forthwith cause to be repaired all damage to the Ashmore property caused by him at his sole expense; 3.2.5 The Ashmore property shall be listed for sale by private treaty or public auction with such real estate agent and/or auctioneer as determined by the applicant; 3.2.6 The list price or reserve price (as the case may be) of the Ashmore property shall be as determined by the applicant and not less than $470,000; 3.2.7 The sale price of the Ashmore property shall be any offer which is at least 90% of the list price, or at least 90% of the -- 2 of 30 -- 3 reserve price if the reserve price is not reached at auction; 3.2.8 The contract of sale in respect of any sale by private treaty shall provide for completion within 30 days of the date of the contract; 3.2.9 The applicant shall have authority to execute the contract of sale and transfer of the Ashmore property as trustee for the first respondent; 3.2.10 The applicant shall instruct a solicitor to act in the sale and prepare the contract of sale and transfer; 3.2.11 Pending completion of the sale, the first respondent shall pay or cause to be paid all loan repayments to the mortgagee, rates, insurance premiums, electricity expenses and other outgoings in respect of the Ashmore property as they fall due; 3.2.12 The sale proceeds of the Ashmore property shall be applied in the following manner and priority:- 3.2.12.1 In payment of all monies due under the mortgage to favour of Perpetual Trustees Victoria Limited registered over the title of the property; 3.2.12.2 In payment of agent’s commission and any advertising or other costs associated with the sale; 3.2.12.3 In payment of the legal costs and outlays relating to the sale, including the applicant’s costs of implementing this order on an indemnity basis; 3.2.12.4 The sum of $138,075 to the applicant, together with interest at the rate of 10% per annum from the date of default under this order until the date of completion of the sale, provided that:- 3.2.12.4.1 In the event that the remaining sale proceeds are less than $138,075, then the entire remaining sale proceeds shall be paid to the applicant as a credit towards the sum due to the applicant pursuant to this order; and 3.2.12.4.2 Interest shall be payable by the first respondent on the sum referred to in paragraph 3.2.12.4.1, and any balance due to the applicant after that payment, at the rate of 10% per annum. 3.2.12.5 Any balance to the first respondent. 4. That pursuant to Section 341 of the Property Law Act 1974 (Qld), the first respondent shall within 30 days after the date of this order pay the applicant’s costs of and incidental to these proceedings, fixed in the amount of $59,211.74. -- 3 of 30 -- 4 5. That the applicant shall have liberty to apply as to the implementation or enforcement of this order at short notice. CATCHWORDS: PROPERTY LAW- De Facto Relationship- Property Adjustment Order- Where Dispute About Assets For Notional Distribution- Where Assets Placed On Trust- Where Party Failed To Fully Disclose His Assets- Where Party Ceased Paid Employment And Makes No Child Support Payments Chorn v Hopkins (2004) FLC¶ 93-204 followed DJM v JLM (1998) FLC ¶92-816 followed E v S [2003] QSC 378 followed Fo v Haf [2006] QCA 555 at [52] applied In the marriage of Scott PW and Scott CE (1984) FLC ¶92-457 followed In the Marriage of Townsend AD and Townsend AC (1995) FLC¶ 92-569 at [81654] followed In the Marriage of Weir SM and Weir WH (1993) FLC ¶92-338 at [79594] followed Jones v Dunkel (1959) 101 CLR 298 321 applied Kowaliw and Kowaliw (1981) FLC ¶91-092 followed S v B [2004] QSC 80 at [51] – [52] followed COUNSEL C Forrest for the applicant The first respondent self represented REPRESENTATIVES: Jones Mitchell Lawyers for the applicant No appearances for second and third respondents [1] The applicant and first respondent have terminated their de facto relationship and the applicant now seeks a property adjustment order under Part 19 of the Property Law Act (1974). Whilst they disagree about the length of that relationship, they cohabited between some time in late March or early April 2005 and mid to late March 2006. They travelled together in Europe for some months in 2004. This marked the commencement of their intimacy and, by October 2004, when they had both returned to Australia and saw each other on a nightly basis, they were patently a couple. I find they did not live together as a couple on a genuine domestic basis until they commenced cohabitation. So the relationship is a short one. Regardless, the court has jurisdiction to hear the application because the applicant gave birth to their daughter, Indiana, on the 28 th of November 2005. (s287(b)) [2] The first respondent does not dispute a property adjustment order can and should be made. His issue is the amount sought by the applicant. He disputes aspects of her evidence about the length of the relationship; the extent of their respective contributions to Indiana’s care both before and after separation; and the extent of the applicant’s contributions. In essence, he argued it was a short relationship, he brought the bulk of the assets into the relationship, he had provided for their daughter’s future and the application was a “money grab” motivated by the -- 4 of 30 -- 5 applicant’s greed and not by their daughter’s best interests. He argued arrangements he made for their daughter’s future should not be disturbed. [3] The applicant raised a number of issues which proved significant to the amount ultimately awarded to her. [4] Firstly, the applicant claimed funds which the first respondent said he had placed on trust for Indiana should be included in the pool of property subject to the adjustment order. Those funds were raised by a loan secured against one property owned by the first respondent and from the net proceeds of sale of another. In September 2007, the applicant applied for an order, amongst others, to set aside the disposition of the funds to the trust (the Elorindi Asset Trust). The applicant asserted the first respondent retained effective control of those and continued to benefit from them. [5] Upon making orders requiring Fiducial Trustees Limited (the entity nominated by the first respondent as the trustee) and Raymond Pears (that company’s director) to produce information to the court about the trust, I adjourned the application until after the property adjustment order is made. I also restrained any dealings in the trust property pending further order. As will later become evident, the funds were, in fact, dealt with after I made the restraining order. There are no breach proceedings currently on foot. [6] What information the court has before it about the trust, its assets and dealings in them has been obtained, to the large part, as a result of the diligence of the applicant’s solicitors. Neither Fiducial Trustees Limited nor Mr Pears responded to the order to provide trust information and documentation. During the hearing, the first respondent belatedly sought to produce some documents, not previously disclosed, purportedly relating to the trust. For reasons canvassed below that material was not admitted into evidence. [7] Secondly, the applicant complained the first respondent had not fully disclosed his assets. This complaint extended beyond the funds placed on trust. The applicant asserted the first respondent had interests in properties in Bali which he had note disclosed and had not fully disclosed his interest in or the value of company shares, assets in another trust, furniture and furnishings, jewellery and bank accounts. Some further information about bank accounts came to light in the course of the hearing. However, the applicant maintained the first respondent had failed to give full and frank disclosure of his assets and income. [8] Thirdly, the applicant urged me to consider the first respondent’s earning capacity and the child support contributions he had made since separation. She argued his disclosed income did not reflect his earning capacity. As a result he had made limited and more recently no monthly child support payments. [9] In summary, the applicant contended the first respondent had failed to fully disclose his assets and income, had attempted to place assets beyond the jurisdiction of the court by way of a sham trust arrangement, had manipulated his working arrangements to limit his liability for child support payments and could not be relied upon to willingly contribute to their daughter’s care in the future. [10] On the 20th of December 2007 I informed the parties that, in due course, I would make an order awarding the applicant the sum of $138,075. This reflects a -- 5 of 30 -- 6 distribution of approximately 25 per cent of the notional net property pool of $695,899, less the value of assets retained by the applicant. I requested written submissions as to the form of the final orders and the costs of the application. In the interim I maintained an order precluding any dealings with a property owned by the first respondent (the Warrigal Crescent home). I also extended an order precluding any dealings with funds in a Commonwealth bank account opened by the first respondent in his daughter’s name (the youth saver account). [11] In determining the property adjustment order I have adopted the four stage approach endorsed by the Queensland Court of Appeal in Fo v Haf: • Identifying and valuing the property, resources and liabilities of the parties; • Assessing their contributions to arrive at a notional distribution based on their contribution based entitlements (subdivision 3 of Part 19); • Assessing adjustment factors (subdivision 4 of Part 19); and • Determining orders which are just and equitable taking into account the parties’ contributions and the adjustment factors. 1. Identifying and valuing the property, resources and liabilities of the parties [12] It is open to this court to approach the property adjustment by way of an asset by asset investigation or by a global assessment. The latter involves an adjustment based on an overall proportion of the global view of the total assets. Whilst there is no dispute that the overwhelming bulk of the assets were contributed by the first respondent, I am satisfied the global approach will result in a fairer distribution, reflecting the financial and non financial contributions of both parties and their responsibilities for the future care of their daughter. (S v B) [13] The applicant filed undisputed valuation evidence about the Warrigal Crescent home and of the furniture, furnishings and motor vehicle in her possession. The value of an investment property at Mitchell Avenue Molendinar is established by the price the first respondent obtained when he sold it after separation. The first respondent filed no valuation evidence about his other assets. He declined a request for the applicant’s valuer to inspect and provide the court with a valuation of the assets in his possession. In his affidavit, the first respondent gave an estimate of the value of some of his assets. Whilst she did not accept the estimate, the applicant was content to proceed on the basis that the court did not have independent evidence of the value of the first respondent’s jewellery, shares and bonds, bank accounts, furniture and furnishings. Prior to the hearing, the applicant estimated the total property pool was assets in excess of $1,000,008 and a loan liability of some $360,000. [14] Both parties requested the court take into account funds they spent on legal fees. The applicant said she had spent some $5,000 on the proceedings. The first respondent said he had spent some $20,000. Both incurred legal costs which otherwise would have been available for distribution and these amounts should notionally be added back in before the property adjustment order is made and I will do so. (DJM v JLM and Chorn v Hopkins) -- 6 of 30 -- 7 [15] There are four disputes of substance about the property pool. They are: • Whether the funds said to have been placed on trust for their daughter should be taken into account; • Whether the first respondent has properly disclosed all his assets and, in particular, whether he holds interests in two properties in Bali; • Whether the house owned by the applicant’s father and in which she resides rent free, should be taken into account; and • Whether the funds in the youth saver account should be taken into account (a) Should the funds said to have been placed on trust for their daughter be taken into account? [16] The first respondent argued they should not. The funds were raised from dealings in two properties he owned before he and the applicant commenced cohabitation. At that time, the Warrigal Crescent home was unencumbered. There was a significant mortgage liability on the Molendinar property. On the 26 th of March 2007 the first respondent’s then solicitors, Quinlan Miller & Treston, advised the applicant’s solicitors, Jones Mitchell, that they held instructions to accept service of de facto property proceedings. In April 2007 the Warrigal Crescent home was mortgaged to secure a loan to the first respondent of $360,000. In May 2007 the Molendinar property was sold for net proceeds of $178,000. The first respondent gave evidence that the loan and net sale proceeds were placed on trust for their daughter and that he had no interest in or control over those funds. [17] On 27 August 2007, Judge O’Sullivan ordered the first respondent to file an affidavit concerning the trust, including its history and the trust documentation. On 18 September 2007, the first respondent filed an affidavit which exhibited correspondence with Fiducial Trustees Limited, but did not exhibit any trust documentation. The first respondent did not disclose any Deeds of Trust or related documents prior to the hearing. [18] On 19 September 2007, I gave the applicant leave to join Fiducial Trustees Limited and its Director, Raymond Pears as respondents to the application. Amongst other orders, I restrained the first respondent, Financial Trustees Limited and Mr Pears from transferring, diminishing or otherwise disposing of the trust assets and directed Financial Trustees Limited and Mr Pears to disclose by affidavit a statement of the assets held on trust, a copy of the trust deed and a statement of any dealings with trust assets. These orders were served upon the company and Mr Pears. Neither appeared at the hearing or filed an affidavit. [19] There is a most regrettable dearth of information about the Elorindi Asset trust, its assets and dealings in them. In his final submissions, the first respondent complained that I had ruled inadmissible documents which would have verified his assertion he had no interest in the trust. [20] The applicant’s solicitors made written requests of the first respondent to provide copies of the trust deed, financial documents and records of the trust on 8 occasions -- 7 of 30 -- 8 between July and late November 2007. In August 2007, Judge O’Sullivan ordered him to provide trust documentation. The affidavit he filed on 18 September referred to e-mail correspondence he stated he entered into with Fiducial Trustees Limited but which he could not produce because, he said, it was sent from an internet café. He also annexed copies of letters apparently from Fiducial Trustees Limited. He did not, however, provide any trust documentation. [21] During the hearing, he repeatedly stated he did not have possession or control of any trust documentation and that he had made numerous requests to the trustee to provide the information. On the second day of the hearing, a person who identified himself as Ross Shilliday entered the courtroom. Initially, the first respondent referred to him as a “courier” but later in the hearing identified him as someone who had introduced him to the trustee and implied that he had some authority to act for the trustee (T pp 203, 241, 309). In response to my enquiry, Mr Shilliday stated his purpose was to “drop some documents off for Dean” and said he was not connected with any of the parties, was not representing and had not been asked to come to court by Fiducial Trustees Limited or Raymond Pears. (T p153) As will become evident, Mr Shilliday was directly involved in dealings with the funds said to have been placed on trust for the parties’ daughter. [22] Subsequently, the first respondent sought to tender what he described as a Variation of Trust Deed. He conceded that he had been a trustee but asserted he no longer was and that the document demonstrated this. The applicant objected to the document being received into evidence because it had not been disclosed, it was not stamped and the source, and therefore authenticity, of the document was uncertain. Further, the applicant would have no opportunity, at that late stage of the hearing, to test its veracity. In light of the circumstances in which it was produced I did not exercise the court’s discretion to receive into evidence an undisclosed document. [23] As I have observed, it was the diligence of the applicant’s solicitor which resulted in the court having access to information about funds raised by the mortgage of the Warrigal Crescent home and the sale of the Molendinar property, the establishment of the trust and the account in which the funds were initially deposited. Documents obtained under non party disclosure orders established: • On 26 April 2007, the first respondent opened a St George Bank “Freedom Business” account in his name as trustee for the Elorindi Asset Trust (a/c no 455136810), as its sole signatory. In the application to open the account the first respondent described himself as the trustee of the Elorindi Asset Trust. He provided a trust deed which named Ross Shilliday as the settlor of the trust, the first respondent as the trustee and Indiana Rose Johnson as the primary beneficiary. • On 8 May 2007, the first respondent borrowed $360,000 from Perpetual Trustees Victoria Limited, a loan account managed by Future Financial Pty Ltd. • On 8 May 2007, $353,788.37 was deposited into the Elorindi Asset Trust account. (The first respondent agreed this was derived from the loan raised on the Warrigal Crescent home.) -- 8 of 30 -- 9 • On 9 May 2007, $178,000 was paid into the same account. (The first respondent agreed this was the net proceeds of the sale of the Molendinar property.) • Between May and September 2007, regular repayments were made from that account to service the first respondent’s housing loan with Perpetual Trustees. $9674.34 was paid towards the loan between 8 June 2007 and 14 September 2007. (The first respondent agreed that, despite the order of 9 September 2007, loan repayments were continuing to be made from the loan and sale funds but maintained that they were made at the trustee’s discretion (T 306).) • Further, amounts totalling $536,000 were withdrawn from the Elorindi Asset Trust account in May and June 2007. • The account was closed on 27 September 2007. [24] Under cross-examination about the withdrawals from the Elorindi Asset Trust account, the first respondent referred to the bank account as a “clearing account” which had served its purpose and that was why it had been closed (T 305-306). He also said that the amounts totalling $536,000 were deposited to other accounts as directed by the trustee but could not provide specific information about their destination. [25] This evidence demonstrated the need to preserve what assets were still available for distribution. (s333(1)(g)) Other then the Warrigal Crescent home already subject to a restraining order, the only remaining asset apparently available to meet any court order was the funds in the youth saver account. There was no prejudice to the first respondent in restraining dealings in the youth saver account which he said was established for their daughter’s benefit. Accordingly, I made an order restraining dealings in those funds. [26] I directed the first respondent to produce documents to demonstrate the destination of those funds. The following day the first respondent sought to tender documents which he described as receipts of trust funds. This was objected to. The documents did not demonstrate the destination of those funds, and, therefore were not responsive to my direction. As they had not been disclosed, I declined to receive them into evidence. [27] Documents later produced by the St George Bank under subpoena revealed the following: • On 14 and 17 May 2007, amounts of $200,000 on each occasion were withdrawn from the Elorindi Asset Trust account and were deposited into a St George Bank account no 127 816 875 in the name of Equity Advances Unit Trust Limited. • On 25 May 2007 and 25 June 2007, amounts of $76,000 and $60,000 respectively were withdrawn from the Elorindi Asset Trust account and were deposited into a St George Bank account no 155 460 941 in the name of Fiducial Trading Trust. -- 9 of 30 -- 10 • Mr Ross Shilliday was named as the sole signatory for both accounts. [28] That evidence indicated the funds may still be within the jurisdiction and could be preserved to aid enforcement of the property adjustment order once made. (s333(1)(g)) I made orders restraining Mr Shilliday from dealing with funds in either account and directed him to disclose by affidavit, statements pertaining to both from 1 May 2007 to the date of the order. The matter was adjourned for further hearing and receipt of Mr Shilliday’s affidavit to 20 December 2007. With my leave, Mr Shilliday, was served with those orders in my presence in court on the 14th. [29] Mr Shilliday did not file any affidavit by and did not appear at the adjourned hearing on the 20th. On that day, the applicant’s solicitor informed the court that he was advised by an officer of the St George Bank that the two accounts were closed on 10 November 2007. That information is hearsay. There is no evidence before me about the ultimate destination or fate of the funds. [30] I invited submissions from the parties as to whether I should reopen the case to consider Mr Shilliday’s affidavit. I received and considered submissions by the applicant’s solicitor. None were provided by the first respondent. I had already determined and announced the amount that would ultimately be awarded to the applicant. On 24 January 2008 an affidavit by Mr Shilliday was filed. Mr Shilliday’s affidavit was to deal with the destination of the funds deposited and then withdrawn from the accounts in the names of Equity Advances Unit Trust Limited and Fiducial Trading Trust. This did not bear upon the quantum of the property adjustment order. By these orders if the Warrigal Crescent home, the youth saver account and other assets of the first respondent are insufficient to meet the order, the applicants has liberty to apply for further orders. If that eventuates, Mr Shilliday’s evidence is likely to be material. That is the more appropriate time for his affidavit to be received and for Mr Shilliday’s evidence to be tested under cross-examination. In the circumstances I decided not to reopen the case to allow further evidence to be led at such a late stage. [31] The first respondent’s evidence was that he took out the loan on the Warrrigal Crescent home and sold the Molendinar property in order to make provision for their daughter’s future. He asserts that he is not and has never been a beneficiary of the trust. It is evident from the document he provided to the St George Bank that it is possible for him to become a tertiary beneficiary if he is nominated as such prior to the vesting day of the trust. By the terms of that document, only the settlor may not be so nominated. (See Exhibit D to the Affidavit of the applicant sworn 05/12/2007). [32] The use of some of the funds to meet the loan repayments is also at odds with his assertions that their daughter is the sole beneficiary of the trust. As the funds have been applied, in part, to meet the first respondent’s personal loan liability, secured against an asset owned solely by him, it is clear that he has benefited from them. The first respondent’s evidence that the loan repayments were made at the trustee’s discretion is not credible and I do not accept it. If Indiana were, in fact, the sole beneficiary of the trust funds, there would be no benefit to her in repayments being made on a loan secured against an asset in which she holds no interest either directly or through the trust. -- 10 of 30 -- 11 [33] Further, payments of significant amounts ($536,000) have been made into accounts held in the names of other entities (Equity Advances Unit Trust Limited and Fiducial Trading Trust) in which Indiana has no apparent interest. Ross Shillilday is the signatory for the St George Bank accounts held in the names of those two entities and is also named as the settlor of the Elorindi Asset Trust in the deed provided to the St George Bank. There is a similarity in name between the entity said to be the current trustee of the trust, the second respondent Fiducial Trustees Limited and one of the account holders, the Fiducial Trading Trust. However, there is no evidence to establish that any legal interest that Indiana does have in the remaining funds disbursed to those accounts will be preserved and protected. [34] During his evidence, and by affidavit, the first respondent asserted he had no control over the trustee’s actions. The regular repayments which reduced his personal liability and the exposure of his asset indicate otherwise. [35] So does correspondence evidently sent by Fiducial Trustees Limited to the first respondent and to the applicant’s father. A letter sent to the first respondent was marked as an exhibit during an interlocutory hearing before me on 19 September 2007. The author employed extravagant and florid language, professed to state conclusions about legal issues and displayed unprofessional and concerning partisanship in the dispute between the applicant and the first respondent. [36] A letter in similar vein, dated 11 December 2007, was sent to the applicant’s father. During evidence, the first respondent conceded he had played a role in that letter being sent. (T 245) The author sought to persuade the applicant’s father to intervene to settle these proceedings and conveyed the first respondent’s offer to him to take up a position as “back-up Guardian”. Extraordinarily, the author expressed the view that, if the grandfather did not take up that offer, this meant he did not have his granddaughter’s best interests at heart and would not be prepared to support her financially in the future. The author also asserted the first respondent had never been a trustee or beneficiary of the Elorindi Asset Trust. That is patently false. [37] The terms of both letters caused me to have serious concerns about both the identity and role of their author. Those reservations were compounded by the lack of response by either Fiducial Trustees Limited or Mr Pears to my orders of 19 September 2007. [38] On the whole of the evidence before me, I am satisfied that Indiana is not the sole beneficiary of the funds said to have been placed on trust. Further, I am satisfied that the first respondent retains effective control over the use of those funds. [39] The applicant initially applied to have the trust set aside but reserved her position on that application pending the outcome of the application for and enforcement of a final property adjustment order. At that time it will be evident whether the establishment of the trust is likely to or will defeat the adjustment order. If so, the application to set aside the disposition may be further pursued by the applicant. (s335) [40] Quite apart from that application, in order to make a property adjustment order, I am required to identify and value the property pool. Mr Forrest submitted I should notionally include the value of the Warrigal Crescent home and the Molendinar sale proceeds in that pool of assets. I am satisfied the first respondent embarked upon a -- 11 of 30 -- 12 course of conduct designed to reduce or minimise the effective value of the property available for distribution by order pursuant to these proceedings. Kowaliw and Kowaliw. That inference clearly arises from the first respondent’s conduct and is explicit in correspondence annexed to his affidavit filed on 18 September 2007. (annexure DEJ-1) In it the author offers “Asset Protection – Quarantining ALL assets from litigation, or legal challenge from your estranged defacto / partner spouse/ ….”. [41] The approach urged upon me is consistent with that taken in relation to property proceedings under the Family Law Act 1975. Where, after separation, the husband sold an asset and spent the proceeds, the Full Court of the Family Court decided “the correct way in which to deal with the husband’s receipt of the money is to bring them into the pool of assets on a notional basis and make a distribution accordingly.” (In the Marriage of Townsend AD and Townsend AC) [42] It is appropriate that the value of the Warrigal Crescent home and the proceeds of sale of the Molendinar property are notionally included in the property pool for the purpose of determining the property adjustment order. [43] Documentation obtained by the applicant under non-party disclosure, refers to another entity, the Eloram Business Trust, which the first respondent is also named as the trustee and in whose name the first respondent opened another St George Bank account (no 428587113). There is also reference in the documents to shares in a company Eloram Pty Ltd. Whilst she has complained about non-disclosure of these interests, the applicant has proceeded in this application on the basis that there is negligible value in those interests. (b) Does the first respondent hold interests in two properties in Bali? [44] The applicant asserts the first respondent has not fully disclosed all of his assets and, particularly, that he is the owner of or has interests in two properties in Indonesia as follows: • Property at Jl, Pantai Bingin, Pecatu Badung, South Kuta, Bali, Indonesia (“the Bingin property”); • Property known as Villa Harmoni, Jl, Drupadi, Gang, Mertasari v. Seminyak, Kuta, Bali, Indonesia (“the Villa Harmoni property”). [45] The applicant said she became aware of the Bingin property when she spent time with the first respondent in Bali in September of 2000. She says that whilst she was there the first respondent told her that he had purchased the Bingin property. She said she accompanied him and was present during an interview with a person introduced to her by the first respondent as his lawyer. In her presence, the first respondent discussed with that person his acquisition of the Bingin property. The applicant also says that the first respondent showed her over the Bingin property. It was then a vacant block of land. She said he told her of his plans to develop the property. [46] She says that when she visited Bali a second time in June 2004, the first respondent took her back to the Bingin property to show her the end product of the plans they had discussed in 2000. They stayed overnight and had dinner with the tenant. The applicant produced photographs she said were taken of that visit to the property. During evidence, the first respondent denied he had told the applicant in September -- 12 of 30 -- 13 2000 that the Bingin property was his. He did agree there was a visit to a lawyer, but claimed that the visit was with a friend, Peter Silva, who was the purchaser of the property. (T 253-254) [47] The applicant says she first become aware of the second property, Villa Harmoni, during the second visit to Bali. She said the first respondent introduced her to a man he identified as Mr Eli. He told her that he had purchased Villa Harmoni with Mr Eli. The first respondent took her to see Villa Harmoni and the applicant said she met a man named Daniel whom she was told was the tenant of Villa Harmoni. They dined at Daniel’s restaurant that evening. The first respondent did not deny any of those assertions, including the conversation about his purchase of the property with Mr Eli. He agreed that he may have said something about an interest in that property but said that he was basically doing what some guys do… “maybe big noting” (T 255). He denied he had any interest in the property. [48] The applicant’s affidavit of 5 December 2007 exhibits correspondence which demonstrates that the applicant’s solicitors have made a number of very specific requests for production of documents relating to his assets to which there was no response or only a partial or belated response. They include: (a) Requests for copies of the trust deed, financial documents, bank statements and records with respect to the Elorindi Asset Trust (8 separate requests between July and November 2007); (b) Statements in relation to the first respondent’s accounts with the Heritage Building Society (3 requests between October and November 2007 – this request was complied with on 8 November 2007); (c) Trust deed, financial statements and tax returns of Eloram Business Trust (2 requests in November 2007); (d) Documents regarding shares, bonds and motor vehicles referred to in his application for a loan from Pinnacle Solutions on 9 March 2007 (4 requests between September and November 2007); (e) Tax returns for year ended 30 June 2005, cheque butts and deposit slips for Eloram Pty Ltd’s Commonwealth Bank Account, statements of account in respect of the Heritage Building Society and Commonwealth Bank of Australia accounts from 1 January to June 2006 and an explanation for withdrawals and deposits of large sums in the Heritage Building Society and Commonwealth Bank of Australia accounts in June and September of 2006 (requests made between July and October 2007). [49] The first respondent is now self represented. A notice of withdrawal of his former solicitors was filed on 31 August 2007. Some of the requests predate that change. In any case, a self represented party is not excused from compliance with the relevant rules and practice directions regarding disclosure of relevant documents relating to these proceedings. (UCPR r 211 and PD No 5 of 2004) [50] The correspondence from the applicant’s solicitors was very specific about what documents were required. Many of the requests arose as a result of documentation that was obtained by the applicant’s solicitors through non party disclosure orders. Most of the information now before the court about the first respondent’s assets is only available because of the applicant’s efforts. [51] That information and the circumstances surrounding the establishment of the Elorindi Asset Trust, already canvassed in these reasons, demonstrates the first -- 13 of 30 -- 14 respondent has not fully disclosed his interests and casts doubt on the credibility of his evidence about other assets or interests. [52] During cross examination, the first respondent did not challenge the applicant’s evidence about the properties and did not ask her to comment on his version of those visits. Whilst the first respondent is self represented, he certainly put to her his version of quite a number of other matters while cross-examining her. The applicant was in the witness box for approximately four hours and he had ample opportunity to open up questioning on this and other topics. Further, during his own evidence, he only denied the alleged conversation in relation to the Bingin property. His characterisation of the conversation about Villa Harmoni is convenient but unconvincing. [53] I have formed the view that, where there is a conflict in the evidence of the applicant and the first respondent about any matter which cannot be resolved by access to documentation, I prefer the evidence of the applicant. The first respondent’s credibility as a witness is undermined by his failure to fulfil his disclosure obligations and by his repeated assertions that he is not the beneficiary of any funds he said he placed on trust for his daughter, when he clearly has and apparently continues to benefit from them. On the other hand, whilst I do not necessarily accept all that the applicant gave evidence about, I find her to be a more credible and reliable witness. [54] The first respondent was aware as early as 9 th of July 2007 when his first affidavit was sworn, that there was dispute about his interest in the properties in Bali. The applicant gave very specific evidence about properties and conversations. The first respondent was on notice of the nature of her allegations and the applicant’s evidence called for an answer. Unlike the applicant, he was in a position to demonstrate that he did not hold the interests that she asserted. He referred to people who could confirm his assertions about the properties but no evidence was called from them. He suggested no reason such evidence was not forthcoming. In assessing all the evidence about the first respondent’s assets, his failure to adduce evidence about the Bali properties is a matter I may properly take into account. (Jones v Dunkel) [55] I am satisfied that the first respondent has not fully disclosed all his assets and has some interests in the two Bali properties. I am not in a position to determine what those interests are because of the paucity of the evidence. I accept, however, that the property pool available for adjustment is larger than that disclosed by the first respondent. I will return to this issue later in these reasons. (c) The applicant’s residence [56] The first respondent claims the house in which the applicant resides, owned by her father, should be included in the property pool along with her car. There is no dispute about the car and that has been included in the applicant’s material. There is a dispute about whether the value of the house in which she lives should be included. The applicant has disclosed she pays no rent to live in the house. However, there is no evidence before me to indicate she has any interest in the property. There is no evidence on the matter from her father. As with the Bali properties, I have not included this house in the property pool. I have, however, taken into account, the applicant’s access to generous family support, including rent -- 14 of 30 -- 15 free accommodation, in determining what property adjustment order should be made in this case. (d) The youth saver account [57] One of the accounts the first respondent did not disclose prior to the proceedings is a youth saver account no. 443010706325, held with the Commonwealth Bank, in the name of I. R. Johnson (T 278). The first respondent is the sole signatory. The first respondent said he opened that account in May 2006 after closing, without consultation with the applicant, an account at the same bank (no 43010704151) that he and the applicant had previously opened in their daughter’s name in January of 2006 (the joint account). Both parties were signatories to the joint account. [58] Whilst the first respondent disputes this, I accept the applicant’s evidence that she deposited amounts totalling approximately $5,000 into the joint account. Some $3,000 represented a “baby bonus” received from the Commonwealth Government and some $2,000 was withdrawn from one of her bank accounts and was money given to her by her family. I also accept that she made some further payments into the joint account. The balance of the joint account when it was closed was $6,333.28. [59] The funds in the joint account were credited to the youth saver account. The first respondent has made regular payments since he opened the youth saver account. As at July 2007 the balance of the account was $12,663. The first respondent’s contributions to the youth saver account were made during a period in which he paid little to the applicant by way of child support payments. The first respondent argued the funds in the youth saver account are solely for their daughter’s benefit and should not form part of the property pool. It is clear that the first respondent is the only person who has made payments into the youth saver account. However, nearly all the opening balance of the account was comprised of funds contributed by the applicant. I am satisfied the funds in the youth saver account represent property of the parties which should be included in the property pool for distribution. [60] I have determined the net property pool available for distribution in this case is $695,899 calculated as follows ITEM OF PROPERTY VALUE First Respondent’s Property at 10 Warrigal Crescent, Ashmore, Queensland (registered in First Respondent’s sole name) as per valuation $450,000 to $470,000 Notional $360,000 -- 15 of 30 -- 16 addback, funds borrowed against the security of the property at 10 Mitchell Court, Ashmore, Queensland in approx. May 2007 and invested by First Respondent offshore Notional addback, net proceeds of sale of property at 57 Mitchell Avenue, Molendinar, Queensland (sold in approx. December 2006) and invested by First Respondent offshore $178,000 Property at JI, Pantai Bingin, Pecatu, Badung, South Kuta, Bali, Indonesia (registered in First Respondent’s sole name) NOT KNOWN Property known as ‘Villa Harmoni’, J1, Drupadi, Gang, Mertasari IV, Seminyak, Kuta, Bali, Indonesia (registered in First Respondent’s Name with co- NOT KNOWN -- 16 of 30 -- 17 tenant, Mr Eli) First Respondent’s jewellery NOT KNOWN First Respondent’s shares/bonds NOT KNOWN First Respondent’s bank accounts NOT KNOWN First Respondent’s furniture and furnishings NOT KNOWN Notional addback, funds spent by First Respondent on legal costs Not less than $20,000 First Respondent’s shareholding in Eloram Pty Ltd (51 fully paid A class shares, and 49 fully paid B class shares), the assets of which include Holden Crewman motor vehicle, subject to lease liability with Capital Finance Australia Limited Negligible Sub-Total $1,008,000 Plus NK Applicant’s Applicant’s bank accounts:- Westpac One Everyday account 74- 8844 Westpac One Savings account 31- 5347 $34.55 $0.61 $1,191.63 $13 -- 17 of 30 -- 18 Westpac Max-I Direct account 31-5355 Societe Generale Caledonienne de Banque account Applicant’s furniture and furnishings (purchased/acq uired by her post- separation) as per valuation $7,160 Hyundai Tucson motor vehicle (registered in Applicant’s sole name) as per valuation $22,500 Applicant’s jewellery Negligible Notional addback, funds spent by Applicant on legal costs $5,000 Sub-Total $35,899 Total $1,043,899 Liabilities Loan from Challenger / Perpetual Trustees Victoria Limited, standing in the First Respondent’s sole name ($360,000) Net Total $683,899 Commonwealth Bank YouthSaver account $12,000 -- 18 of 30 -- 19 standing in name of IR Johnson Grand Total $695,899 Financial Resources Applicant’s superannuation interest with AMP (as at 3 December 2007) $856.76 Applicant’s superannuation interest with SunSuper (as at 29 November 2007) $8,031.51 Respondent’s superannuation interest with AMP (as at 30/6/2007) $38,934.63 [61] Both parties also have access to superannuation entitlements in the future. The applicant’s current superannuation interests are some $1,688: $856.76 with AMP as at 3 December and $831.50 (See fn 1) with Sunsuper as at 29 November 2007. The first respondent has accrued $38,934.63 with AMP as at 30 June 2007. 2. Contribution entitlement – the subdivision 3 criteria [62] Subdivision 3 of Part 19 of the Act sets out a number of criteria which must be considered in arriving at a notional distribution based on the parties’ contributions. (a) Financial and non financial contributions to the acquisition, conservation or improvement of any of the property of either party - s291(a) [63] The real estate assets included in the property pool were brought into the relationship by the first respondent. He owned the house at Warrigal Crescent unencumbered. During the year prior to cohabitation commencing, he purchased the Molendinar property. When they commenced cohabiting, the mortgage on that property was approximately $235,000 leaving equity in the property of $60,000. The mortgage was substantially reduced to approximately $150,000 after the first respondent applied to the mortgage the sum of $79,500 which he says he obtained as compensation for a back injury. The applicant conceded the first respondent brought into the relationship significant real estate assets. 1 This figure is reproduced from the applicant’s outline provided to me. Her affidavit revealed an estimated figure of $752 as at 14 December 2006. I have proceeded on the assumption that the correct figure at the date of hearing is $831.50 -- 19 of 30 -- 20 [64] The first respondent asserted the applicant made no financial contributions to the properties during the relationship. The applicant disputed that. She said she paid the first respondent approximately $400 each month and he used that money towards the family expenses including costs associated with both properties. The first respondent told her he had substantial bills to pay and that her payment of the family’s household expenses and bills would enable him to pay for other expenses. She said she gave him cash because he did not want any record of deposits into an account. The applicant said the payments came from her accumulated funds which included gifts of money from her family. [65] In addition to the $400 per month, she said that between March 2005 and March 2006 she paid household bills of $21,605 including rates and insurance premiums in respect of both properties. The calculation of that figure, derived from her disclosed bank accounts, includes cash withdrawals of some $7,000. Whilst I accept that some of that will have been applied to household expenses, it is possible that some of the cash withdrawals represented the payments of $400 per month. Even excluding cash withdrawals, the applicant’s evidence is that, during their cohabitation, she paid in the order of $14,000 towards groceries, clothing, household items, petrol, internet access, dining out and entertainment. Whilst the first respondent challenged her evidence on this issue, I am persuaded the applicant did pay the amounts itemised in her statement. [66] As to the cash payments of $400 per month, the first respondent contested these payments were made. He claimed the applicant made some payments for a short time as rent for the front room of the house from which she conducted a beauty therapist business. The applicant denied that she operated a business from that room or that she paid rent for that purpose. There are a couple of receipts for $400 but they do not demonstrate anything more than the first respondent received and acknowledged certain cash payments. (See Ex MM to the affidavit of the applicant sworn 05/12/2007). [67] The only evidence to suggest the applicant conducted such a business is that given by the first respondent. My reasons for preferring the evidence of the applicant over that of the first respondent have already been explained. I am satisfied that, throughout their cohabitation, the applicant contributed approximately $400 per month towards household expenses as well as those items set out in the schedule in her statement, other than the cash withdrawals. That is a contribution of approximately $18,000. [68] The first respondent hotly contested the applicant’s affidavit evidence that the sums she contributed went towards meeting the shortfall on the expenses associated with the Molendinar property. The first respondent tendered documents including real estate agent statements (Ex 5) to demonstrate, he said, that the Molendinar property delivered a surplus not a shortfall. However those statements do not reveal all the expenses of the property such as insurance costs, interest repayments and rates. The first respondent’s submissions themselves show that there was a shortfall of expenses over income on that property albeit, on his account, only a small one. I accept that during the relationship the expenses of the property exceeded the income it generated and that the applicant’s contributions to the family’s finances assisted to meet that shortfall. -- 20 of 30 -- 21 [69] I also satisfied that financial contribution enabled the first respondent to apply his earnings to expenses associated with the acquisition, maintenance and improvement of both properties. [70] Considerable time was taken during the first respondent’s cross examination of the applicant about the nature and extent of her contribution towards the renovation of a bathroom in the Molendinar property. I accept that, by making the financial contributions referred to above, the applicant contributed towards the financial circumstances of the family unit which facilitated the renovations. The only other contribution claimed by the applicant is that she assisted to select tiles for use in the bathroom. This was hotly contested by the first respondent who sought to persuade me the applicant was referring to an entirely different occasion when tiles were purchased for some other purpose. The applicant asserted only the most minimal of non financial contributions. Ultimately, resolution of this issue could have no substantial bearing on the order. However, I am persuaded the applicant did provide the very limited non financial contribution she alleged. (b) Financial and non financial contributions to the financial resources of either party - s291(b) [71] The applicant’s assumption of the role of home maker and primary carer after the birth of their daughter enabled the first respondent to work full time and thereby earn income and make contributions towards his superannuation. This contribution was of significance only after the applicant stopped working in October 2005, some six months or so before the relationship was terminated. The extent, therefore, of the applicant’s contribution towards the first respondent’s financial resources is necessarily limited. (c) Contributions to family welfare - s292 [72] The first respondent contested the applicant’s evidence about the extent of her contributions to the welfare of the family unit whilst they cohabited and to their welfare as a couple prior to cohabitation. He did not contest her evidence that they spent nearly every night together between October 2004 and March 2005, a period of some six months. I accept that during that period the applicant will have made some contributions by way of home making to the couple’s welfare. [73] I reject the first respondent’s evidence about the applicant’s contribution as a home maker and parent after cohabitation. He did not contest most of the specific assertions made by her in her affidavit of the 5th of December 2007. He claimed he cooked more often than she did, that she did not make him lunches more than occasionally, that she was reluctant to clean the house and more often than not he had to re-do what she had done and that he was the one who primarily did the shopping. He was hostile and dismissive in his criticism of every aspect of the applicant’s contribution to the family’s welfare and was unwilling to concede that she performed any household tasks to an acceptable standard. He said he did not like her food, that she did not wipe down the benches properly and only grudgingly conceded that she performed her function as a mother. It is inescapable that he did all he could to minimise her contribution and, in doing so, overstated the extent of -- 21 of 30 -- 22 his own. I accept the applicant’s evidence about her contribution to the family’s welfare. [74] Further, the applicant had primary responsibility for the care of their daughter. The first respondent was then working full time and, necessarily, the load rested with the applicant. Whilst she was breastfeeding their daughter, for some six weeks after the birth, the first respondent could do little to assist with feeding. Once the baby was weaned, I accept the first respondent assisted with bottle feeding whilst the applicant prepared their evening meal. I also accept that he frequently bathed their daughter. He would also have helped to care for and supervise the baby, when he was not working. The first respondent did not argue the applicant was not the primary carer nor did he dispute that her caring for the baby enabled him to work full time. [75] Prior to the birth of their baby, and while working full time herself, I find the applicant made substantial contributions towards the family’s welfare by way of household and domestic duties such as cooking, cleaning and washing, shopping and banking. Once their daughter was born, the applicant’s contribution to family welfare necessarily increased substantially. Further, since separation, the applicant has had more significant care responsibilities as the carer for the child 8 of the 14 days of each fortnight. Her status as the primary carer must also be assessed in the light of the level of financial support she has received from the first respondent since separation. This is a topic to which I will return. [76] In summary, I am satisfied that the applicant has contributed to the welfare of the family as a unit before cohabitation, during cohabitation and, in relation to the care of their daughter since separation. (d) Child support provided or to be provided by either party - s294 [77] After separating, the first respondent made six payments to the applicant of $150 per week totalling $900. The applicant then, as the recipient of government benefits as a single parent, was required to register for child support through the Child Support Agency. It appears that the first respondent’s disclosed taxable income was so low he was assessed as having a liability of only $104 per month, one sixth of what he had agreed to pay to the applicant. Since 15 August 2007 he has paid nothing towards the support of their daughter whilst in the care of the applicant. That assessment from the Child Support Agency is current until the 31st of December 2008. That is because he is currently not working, a decision he made voluntarily, he says in order to retrain as an earthmoving contractor. [78] There is conflicting evidence about the first respondent’s income and earning capacity. In applications for finance, the first respondent stated he had a very significant net annual income. For example, in a loan application to Pinnacle Wealth made on the 9th of March 2007, when he was paying only $104 per month in child support, he recorded his annual net income as $150,000. The first respondent declared his taxable income for the year 04/05 at $20,690. For 05/06 he declared taxable income of $27,500, less than 1/5th of his estimate in the loan application. -- 22 of 30 -- 23 [79] Further, his declared taxable income does not rest easily with his earning capacity. He is qualified and experienced as a butcher, plasterer, and form worker. Questions are necessarily raised by his ability to accumulate significant assets whilst earning so little. It is also inconsistent with his protestations about the extent of his contributions to family finances during the relationship. [80] He is now not working and pays no child support. The first respondent was adamant that he stopped working to retrain to obtain earth moving qualifications. He said he was studying but when pressed agreed that there was no formal study that he was undertaking, just on the job experience. He is working. He declared he is not being paid as he is being trained in the use of the equipment so he can get his hours up to obtain his licence. The first respondent’s evidence about this topic is characteristically unconvincing and concerning. If a party gives up secure employment, without good reason, this can be taken into account. (In the marriage of Scott PW and Scott CE) [81] The disparity between the first respondent’s declared taxable income and his loan application, his evident earning capacity and ability to amass assets, and the evidence about his unpaid work experience give rise to a material concern that he has and would in the future manipulate his working arrangements so as to minimise child support payments. [82] These concerns are compounded by the first respondent’s attitude towards the applicant and this application. It is apparent that he considers quarantining assets and income from the applicant’s reach will adequately provide for their daughter’s future. However, he is making no contribution, in the meantime, to the applicant’s care of the child and those assets said to have been quarantined are being applied to his own benefit. [83] He left the court in no doubt that he considered the applicant was a gold digger and her application was motivated by personal greed. “The beneficial interests of my daughter and myself to lose a house so – a money-grabber…. And a gold-digger can get money.” (T 243) and “This is very clearly a money-grabbing exercise orchestrated by the Applicant (mother) for her own personal benefit and duly egged on by her lawyers” (first respondent’s written submission filed 19/12/2007). [84] He displayed a somewhat paranoid approach to her application for child support. On the slimmest of information, a conversation with a Child Support Agency Officer, he leapt to the conclusion that her motives in making the application were malicious. Yet all he said the officer told him was that the applicant had applied for a child support assessment. This in no way supports a malicious motive. He agreed he said to the applicant that she would “shoot herself in the foot” if she applied for child support. [85] There can be no doubt that the first respondent has a resolute objection to providing the applicant with any assistance at all in relation to the cost of raising their daughter. He appears to have formed the view that she cannot be trusted to apply these funds to their daughter’s welfare. He has demonstrated his willingness to take a range of steps to prevent access by the applicant to funds or assets under his control or to his income. For most of the period of separation, the first respondent has provided little ($104/month) or no monthly contribution to the applicant in relation to the care of their child. Nothing I have read or heard during the course of -- 23 of 30 -- 24 the hearing gives me confidence that that situation would change in the future. This is a matter which I have taken into account in assessing what order I should make. (e) Notional award on a contributions basis [86] On the basis of the uncontested valuation evidence, the applicant’s current assets represent approximately 5 per cent of the ascertained property pool excluding those items for which the first respondent’s interest cannot be ascertained. The first respondent’s submission is that she should receive only 5 or a maximum of 8 per cent overall. If I were only required to assess the applicant’s financial contributions to the property pool, I would be unlikely to award much more than contended for by the first respondent. However I am also required to take into account the applicant’s contributions to family welfare and the child support provided or to be provided by either party. I have real concerns about whether the financial support that the first respondent would be required to and would make to their child’s ongoing living expenses would properly reflect his ability to contribute. [87] Further I have concluded that the first respondent has deliberately not fulfilled his duty to make full disclosure of his financial affairs. Once it has been established there has been a deliberate non-disclosure the court should not be unduly cautious about making findings in favour of the innocent party. (In the Marriage of Weir SM and Weir WH) A broad brush approach is necessitated by the state of the evidence. The applicant’s counsel submitted I should deal with the non-disclosure by taking a robust approach to the assessment of the percentage that should be allocated on a global basis. That presents as a reasonable and appropriate approach in the circumstances. Accordingly, on the basis of the financial and non-financial contributions of the parties, and taking into account the child support paid and to be paid, I would notionally award the applicant 15% of the ascertained property pool. 3. Adjustment factors - the subdivision 4 criteria [88] Both parties are young and in good health (s297). The income, property and financial resources of the parties and their earning capacities differ significantly. (s298) I am satisfied the first respondent attempted to divest himself of substantial assets through the trust arrangement. It is clear he retains effective control of the funds. He continues to live in the Warrigal Crescent home. Whilst it is now significantly encumbered, the “trust funds” are applied to service that loan. The first respondent has not fulfilled his disclosure obligations. I am not satisfied he has fully disclosed his assets. [89] In contrast, the applicant has provided independent expert evidence about the value of her assets, none of which has been contested. She has been frank about her current living arrangements, by which her living expenses are reduced considerably. I cannot assume that the arrangement that she currently has with her father will extend indefinitely or that he will gift the house to her in due course. I do, however, take that current arrangement into account as an illustration of her ongoing family support. I accept that she will continue to receive the generous support of her family as she has in the past. -- 24 of 30 -- 25 [90] The parties’ earning capacities are divergent. The taxable income disclosed by the first respondent does not reflect his earning capacity. He already has a number of trade qualifications and said he expects he could earn $40,000 to $60,000 as an earth moving contractor. The applicant is qualified to work in retail or as a beauty therapist. Were she able to establish her own business as a beauty therapist, as she has done in the past, she may well be able to earn significantly more than her current income of $18,200. [91] The applicant’s ability to work is more significantly affected by the care arrangements for their daughter than is the first respondent. The first respondent made much of the number of nights his daughter spends with him (6). However, he has her in his care for only 5 days each fortnight, two of which fall on a weekend. 7 of the remaining 9 days, during which the applicant has the care of their daughter, are working days. This necessarily confines the applicant’s ability to earn income to a far greater extent. It also restricts her opportunity to re-establish a business. [92] I have already adverted to the first respondent’s approach to providing for his daughter’s welfare. His actions convey a view that he is the person best able to provide for her and that he will do so at some imprecise future point in time using the “trust funds” and the youth saver account. In determining the property adjustment order I need to consider the parties’ commitments to caring for this child whilst she is a dependant. [93] Whilst child care proceedings have not concluded, current arrangements place primary responsibility with the applicant. None of the evidence indicates the applicant will have less responsibility in the future. Neither has asked these proceedings be deferred until the outcome of others is known. Nor can I ignore the serious criminal charges faced by the first respondent which, if proved, would almost certainly result in a period in custody. In that event the applicant would have sole responsibility for their daughter’s care whilst he is in custody. (s299) It is likely his ability to provide for her in the future would also be undermined. [94] The first respondent contributes towards the costs of child care fees and pays for swimming lessons. The applicant shares child care fees and pays private health insurance for their daughter. [95] I am left uncertain about the first respondent’s likely future earnings. He was unable to be specific about when he would return to employment or how much he expected to earn. I have already expressed grave reservations about the first respondent’s willingness to make financial contributions to the applicant regarding the care of their daughter. There is ample cause to doubt the level of support he will either be able, or willing to provide for the care of their daughter whilst she is with the applicant. Their daughter is only 2 years old and the applicant will have her primary care and financial responsibility for a lengthy period. [96] In assessing the adjustment factors, I have noted the parties’ divergent earning capacities; the greater impact on the applicant’s earning capacity; their differing levels of financial and carer responsibilities; and the age of their child. Taking the adjustment factors into account, I consider a further award of 10% of the ascertained property is justified. 4. Determining the final orders -- 25 of 30 -- 26 [97] There is no argument that this is a short relationship and that this is a relevant factor. (s305) The length of the relationship and the extent of the first respondent’s financial contributions weigh the scales heavily in his favour. E v S [98] For obvious reasons, the legislature has provided for a property adjustment order, even in a relationship of short duration which has resulted in the birth of a child. The respective parenting contributions and the attitude expressed by the first respondent towards his obligations now and in the future weigh in the applicant’s favour. [99] The first respondent’s conduct in seeking to place assets beyond the reach of this application and deliberately not disclosing full details of his financial position entitles me to take a robust approach. Taking into account both the subdivision 3 and the subdivision 4 criteria, I consider an award of 25 per cent of the notional property pool of $695,899 is just and equitable and that an award of $138,075 should be made. 5. Application to adjourn hearing [100] There was an application to adjourn the hearing on its third day during cross examination of the first respondent. The application was made after he was asked questions about his motivation in establishing a trust for his daughter. The suggestion was made to him that he had done so to avoid the operation of legislation providing for confiscation of property the proceeds of crime. The first respondent is currently facing serious criminal charges for which he has been committed for trial. The first respondent claimed privilege in relation to any questions the answers to which might incriminate him in relation to those charges. The first respondent said he wished to obtain legal advice about answering any questions about his motivation in establishing the trust. [101] The first respondent was previously represented by lawyers in this and other matters but appeared self represented in this court during the hearing. The applicant applied to set aside the trust some months before the hearing and, from material filed and submissions made during interlocutory hearings, the first respondent was aware that his motivation for establishing the trust was an issue between them. What his motive was is not relevant to whether the trust should be set aside and the applicant has not urged me to make any such order at this time (s 335). The first respondent availed himself of the privilege against self incrimination. No further questions were allowed about that Act or his criminal charges. I was satisfied the first respondent would not be prejudiced if the hearing proceeded. On the other hand there would have been considerable prejudice to both parties caused by an adjournment of the hearing at that late stage. 6. Costs [102] The applicant sought an order that the first respondent pay her costs of and incidental to the proceedings, including those costs reserved in relation to her interlocutory applications regarding dispositions to the Elorindi Asset Trust. She submitted costs should be assessed on an indemnity basis and fixed in an amount assessed by Glenn Walter, solicitor and legal costs consultant. [103] The usual provision for these applications is that each party bears their own costs (s 341) The Court may make any other order for costs if satisfied there are -- 26 of 30 -- 27 circumstances justifying it doing so, having considered the matters set out in s 341(4). I have considered each of those matters. The circumstances of this case do justify an order for costs in favour of the applicant. [104] The first respondent took action to place assets beyond the reach of this application. He failed to give full and frank disclosure of those dispositions and of his financial circumstances. Each of these circumstances has already been traversed at some length in these reasons and it is unnecessary to revisit them. The combination of these circumstances was increased time, effort and expense for the applicant in preparing for this hearing (s 341(4)(c)). This order exceeds two of three offers made by the applicant to settle these proceedings (UCPR 9, Part 5). [105] Whilst I am sympathetic to the applicant’s complaints about the first respondent’s conduct, those complaints are appropriately met by departure from the usual rule that each party bear their own costs. I reject her application for costs to be assessed on an indemnity basis. In making that decision I have taken into account that the first respondent was not, at all times, legally represented. Certainly the obligations of a self-represented party to comply with procedural rules do not differ to those applying to represented parties. It is clear I have formed the view that the first respondent’s conduct is not explained entirely by a failure to understand his disclosure obligations. Nevertheless, it is a relevant factor in determining what view I take of his conduct of the proceedings and, therefore, what the order for costs should be. [106] There is much force in the applicant’s submission that significant further time, effort and expense would be involved if the costs order required taxation. The applicant would be exposed to meeting those further costs alone. It is open to this Court to fix costs. (UCPR r 685(2) PD 3 of 2007) Mr Walter has extensive experience as a legal costs consultant and solicitor. His assessment of the applicant’s costs and disbursements on a standard basis at $44,390.44 appears reasonable given the history of these proceedings. The order will require the first respondent to pay the applicant’s costs fixed at $44,390.44. 7. Form of Orders [107] As to the form of the final orders, the applicant sought a cash order with default orders should the judgment not be satisfied within 14 days. They provide for the sale and distribution of the net sale proceeds of the Warrigal Crescent home and payment of those funds and the funds held in the youth saver account to the applicant. If those amounts exceed the judgment, the balance will be paid to the respondent. If the default orders do not result in full satisfaction of the judgment, the proposed orders give the applicant leave to apply for further enforcement orders. The proposed orders include interest on the judgment sum at the standard rate. [108] The first respondent opposed each of the orders. He complained the default provisions placed the applicant in a position of conflict of interest as both the vendor and the beneficiary of the sale. I am satisfied the proposed default orders protect both parties’ interests whilst providing for an efficient sale of the property. The first respondent has not persuaded me the default orders, the interest order and the order granting leave to apply for further enforcement orders should not be granted. The first respondent was informed the final order would be in the amount now ordered on 20 December 2007. He has already had more than a month to make arrangements to meet that judgment sum. Nevertheless, I consider it is appropriate to allow a further month after which the default provisions will apply. -- 27 of 30 -- 28 [109] I have decided not to make the second of the orders sought by the applicant. It seeks to impose a blanket restraint of any dealings both parties in all their assets and financial resources until the judgment is met. As the orders of 27 august 2007 and 13 December 2007 will remain in force until the judgment has been fully satisfied, such a wide restriction is not necessary Orders 1. That the first respondent pay the applicant the sum of $138,075 by way of property adjustment by bank cheque payable to “Jones Mitchell Lawyers Trust Account” within one month from the date of this order. 2. That pending the first respondent’s compliance with paragraph 1 of this order, the injunctions in Paragraph 6 of the order dated 27 August 2007 and paragraph 1of the order dated 13 December 2007 are hereby extended until further order. 3. That if the first respondent defaults in payment in accordance with paragraph 1 of this order (“default”):- 3.1 The first respondent shall, within 3 days after its delivery by the applicant, do all acts necessary to execute an authority addressed to the Commonwealth Bank of Australia authorising and directing the release of the entire funds standing on deposit in YouthSaver account number 443010706325 in the name of IR Johnson to the applicant by way of bank cheque in favour of “Jones Mitchell Lawyers Trust Account”, and in the event of the respondent’s default of compliance with this paragraph, the Registrar or Deputy Registrar of the District Court of Queensland at Southport is hereby appointed to sign all documents necessary to implement this order in the name of the respondent; and 3.2 The applicant be and is hereby appointed trustee for the sale of the property at 10 Warrigal Crescent, Ashmore in the State of Queensland (“the Ashmore property”), and for that purpose the following shall apply:- 3.2.1 The first respondent shall, within three days after default, transfer to the applicant as trustee, the whole of his right, title and interest in the Ashmore property, subject to the existing mortgage in favour of Perpetual Trustees Victoria Limited; 3.2.2 In the event of the first respondent’s default under paragraph 4.2.1 of this order, the Registrar or Deputy Registrar of the District Court of Queensland at Southport is hereby appointed to sign all documents necessary to implement this order in the name of the first respondent; 3.2.3 The first respondent shall vacate the Ashmore property and deliver all keys, codes and devices in respect of the property to the applicant within 14 days after default, and thereafter remain away from the property and not re-enter it; 3.2.4 The first respondent shall forthwith cause to be repaired all damage to the Ashmore property caused by him at his sole expense; 3.2.5 The Ashmore property shall be listed for sale by private treaty or public auction with such real estate agent and/or auctioneer as determined by the applicant; -- 28 of 30 -- 29 3.2.6 The list price or reserve price (as the case may be) of the Ashmore property shall be as determined by the applicant and not less than $470,000; 3.2.7 The sale price of the Ashmore property shall be any offer which is at least 90% of the list price, or at least 90% of the reserve price if the reserve price is not reached at auction; 3.2.8 The contract of sale in respect of any sale by private treaty shall provide for completion within 30 days of the date of the contract; 3.2.9 The applicant shall have authority to execute the contract of sale and transfer of the Ashmore property as trustee for the first respondent; 3.2.10 The applicant shall instruct a solicitor to act in the sale and prepare the contract of sale and transfer; 3.2.11 Pending completion of the sale, the first respondent shall pay or cause to be paid all loan repayments to the mortgagee, rates, insurance premiums, electricity expenses and other outgoings in respect of the Ashmore property as they fall due; 3.2.12 The sale proceeds of the Ashmore property shall be applied in the following manner and priority:- 3.2.12.1 In payment of all monies due under the mortgage to favour of Perpetual Trustees Victoria Limited registered over the title of the property; 3.2.12.2 In payment of agent’s commission and any advertising or other costs associated with the sale; 3.2.12.3 In payment of the legal costs and outlays relating to the sale, including the applicant’s costs of implementing this order on an indemnity basis; 3.2.12.4 The sum of $138,075 to the applicant, together with interest at the rate of 10% per annum from the date of default under this order until the date of completion of the sale, provided that:- 3.2.12.4.1 In the event that the remaining sale proceeds are less than $138,075, then the entire remaining sale proceeds shall be paid to the applicant as a credit towards the sum due to the applicant pursuant to this order; and 3.2.12.4.2 Interest shall be payable by the first respondent on the sum referred to in paragraph 3.2.12.4.1, and any balance due to the applicant after that payment, at the rate of 10% per annum. 3.2.12.5 Any balance to the first respondent. 4. That pursuant to Section 341 of the Property Law Act 1974 (Qld), the first respondent shall within 30 days after the date of this order pay the applicant’s costs of and incidental to these proceedings, fixed in the amount of $59,211.74. -- 29 of 30 -- 30 5. That the applicant shall have liberty to apply as to the implementation or enforcement of this order at short notice. -- 30 of 30 --