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Could a divorce property settlement get any worse

Property settlement with ex wife, and a business partner (2nd respondent)

If you have the time to read this, any worthwhile advice would be greatly appreciated.

My now ex wife and I were married in early 2000, and separated in April 2004. About a year prior to the marriage we purchased a block of land in the Hunter Valley of NSW with the intention of constructing an accommodation retreat. Work subsequently commenced on the project in 2002 and opened in April 2003. Due to a lack of funds my ex found a person interested in becoming a business partner where they would also have to provide manual labour on some of the construction aspects in addition to an injection of funds into the project. During the early stages of my ex talking to this person I was working overseas for six months and was hardly involved in the selection or terms of a partnership arrangement at all. The partner subsequently provided less than 10% of the funds for the project. He was aware at all stages of the discussions that title over the property would never include his name as part of his investment. That stance did not waiver from the first day to the date the property was sold.

After the partner had been involved for about nine months it became apparent to the ex and I that he had no idea how to run a business, or the rapport required to liaise with guests and assist with their requirements. An offer was put to him to become a silent partner, one that he rejected.

In late 2004 a second stage of the project was completed. It was not long after this that my ex and I separated, partially for reasons connected with this business partner. The business remained running with input of staff and each of the partners in varying degrees until it was sold in late 2010.

In 2006 my ex and I, and the business partner conducted a meeting chaired by the ex's sister. It lasted 13 hours but an agreement was made. The ex later withdrew her support from the agreement with no reason given. It was never signed but it was agreed to.

In mid 2007 the ex filed property settlement papers with the Family Court. Two Court allocated attempts at Reconciliation have been attempted without success.

During this case the following has occurred (and this is an extremely brief summary):

- 35+ appearances before the Family Court

- There are no children involved

- In 2004 during the construction of the second phase of the business my mother provides a loan to the business to complete the works. Both ex and business partner now allege no loan was made. My mother is still over $30,000 out of pocket in respect of that loan.

- In 2006 the ex leaves the business and actively attempts to sabotage it. Another paid manager (not the business partner) is employed but only lasts about seven months when the business partner has to sack him. Due to the urgency of finding another manager or the business closing my (now) wife takes up the role of manager and does so until June 2009.

In May 2009 the business partners barrister alleges in Court during a Mention that I had stolen money from the business. Business partner was not at the Mention yet after heated discussion between us he purchased the transcript from the Court as to the events of that day. Later says that he did not instruct his barrister to say that. This act was the catalyst for a total breakdown of the business relationship.

- Business partner is appointed by the Court as Trustee for sale of the business and appointment of a new manager

- My wife and I leave the business at the end of July 2009 and the new business manager is appointed by the partner against my wishes involving a conflict of interest.

- Agreement is reached to sell the business in 2009. The new manager (from July 2009) also works for the real estate agent tasked with selling the business. I (and my legal team at that time) regarded this as a total conflict of interest.

- An offer is received for the purchase of the business. The ex and business partner refuse the offer and give me no say in the decision (due to the fact at that time they were Court appointed Trustees for the sale of the business).

- A further offer providing an additional $70k is made. They both still rejected the offer.

- Business partner applies in 2009 to the Family Court to have me barred from entering or having anything to do with the business. The application was granted without a single word of evidence being provided in the witness box.

- In April 2010 business partner agrees to withdraw from being the Trustee for the above matters. The same trustee who is dealing with ex's bankruptcy is appointed to deal with the sale of the business after business partner and ex "stuffs it up".

- Final hearing of the case was to be heard in the Family Court from early January 2010.

- Due to the GFC and other actions by the ex and business partner my (now) wife is not paid a substantial amount of money in back pay. Both ex and partner ignore all demands for payment. Wife then takes matter to IRC seeking damages.

- One month after the aborted final hearing dates the ex wife declares bankruptcy and ever since has tried to stall proceedings

- Business partner at the time of the final hearing seeks anti-suit injunction for my (now) wife from continuing action in the IRC. Final hearing dates are aborted. Injunction application is heard and partner loses case in July 2010.

- In late 2010 new Trustee sells property via auction for $280k less than the final offer rejected by the ex and business partner to the same purchasers!

- (Now) wife continues action in the IRC with case not starting until December 2012. Settlement agreement reached about July 2013.

- About late 2012, Justice who was appointed to the case (from virtually the time when he joined the bench) retires and a new judge is appointed. Case has been sitting in the "awaiting dates" pile ever since, even though the matter has been ongoing since mid 2007!

- I have spent well in excess of $200k on legal fees, and sold a home unit to pay for some of it. I have no funds whatsoever to continue to fight the litigation and will have to go it alone…

QUESTION:

One question I cannot find an answer to is regarding the issue of who can be a Respondent. The husband (or wife) obviously is, but as for a second respondent as nominated by the applicant ex wife, I cannot find anything about the legality of nominating a business partner as a second respondent.

The issue has arisen as the partner has provided 17 volumes of Affidavit and Annexures in which he states his involvement in the business. The partner's normal day job is that of a NSW Police officer, where a transcript of a complaint made by me (forming part of his own evidence in the Affidavit) shows him answering a question to internal affairs, that he was only "an investor", and had virtually nothing to do with the construction and running of the business.

The ex wife nominated him. He is not a "party" to the marriage and claims that he is only an investor.

When the ex went bankrupt she owed a considerable sum of money to her solicitors who during the early stages of the litigation placed a caveat on the land the business is situated on. After the sale (the caveat was lifted to effect the sale) the Family Court allowed the solicitors (as creditors of the ex) to become interveners in the matter. These firms had a "confirmed debt" and the debt was the reason the caveat was permitted (without my consent and which affected the final sale price).

My current wife is also now a intervener (unsecured) due to the money now owed by the partners in respect of her settled claim before the IRC. The business partner was nearly bankrupted by my (now) wife due to non payment of Court costs as issued by the Family Court. He now makes a miniscule payment each week to her.

I am thinking of making an application to the Court to have the business partner removed as a second respondent as I believe his claim is a civil claim that should be heard in the Federal Magistrates Court.  As that Court can only award payments going back six years (that's my understanding anyway) the partner would likely get nothing from any Court action in that jurisdiction. I may sound callous however considering he gave my wife a nervous breakdown and having to spend six weeks and $34k in hospital, AND he is after all the remaining funds held in Trust from the sale of the property (and the only tangible asset of the marriage after only investing about 10% of the funds), personally I would call it natural justice.

I cannot see anywhere in the legislation where it permits a second respondent to be a  "party" to a marriage. There was nothing besides a business relationship between us and as he himself admits in written evidence, he was only an investor. In light of the above which even writing it has given me a headache, does any one have an idea as to what chances such an application may have of success. Any other advice besides jumping off the gap at Watsons Bay would be appreciated. Right now it's not a bad option…..


I can't really follow your story, does the second respondent still have an interest in the business?.If so, under the Family Law Act, banks, creditors or anyone who maybe financially affected by a property settlement can potentially become a third party to a settlement. The family law rules state that any persons whose rights may be directly affected by the outcome of a case and whose participation the court deems necessary, has a right to be included as a party to a case. It is not only party's to a marriage that can be respondents in property settlements.

You can find the Family Law Rules 2004 online www.comlaw.gov.au . From memory Part 1 deals with necessary parties.
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