Alfred and Alfred
[2007] FMCAfam 225
•26 April 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ALFRED & ALFRED | [2007] FMCAfam 225 |
| FAMILY LAW – Property – claims for declarations and consequential orders by way of property settlement – declarations of an equitable interest pursuant to a constructive and/or resulting trust – failure by the parties to produce relevant documents. |
| Family Law Act ss.79(4), 75(2) |
| Calverley v Green (1984) 155 CLR 242 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 365 Cromwell & Cromwell [2005] 5 FamCA1044 Elkington v Shell Australia Limited (1993) 32 NSWLR 11 In the Marriage of Hickey (2003) FLC 93-143 In the Marriage of Kowaliw (1981) FLC 91-092 at 76, 644 In the Marriage of Townsend (1995) FLC 92-569 at 81, 654 Jango v Northern Territory of Australia (2006) 152 FCR 150 Pierce v Pierce (1999) FLC 92-844 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 |
| Applicant: | MS C ALFRED |
| Respondent: | MR T ALFRED |
| File number: | BRM 8622 of 2005 |
| Judgment of: | Burnett FM |
| Hearing dates: | 12 & 21 December 2006 |
| Date of last submission: | 21 December 2006 |
| Delivered at: | Brisbane |
| Delivered on: | 26 April 2007 |
REPRESENTATION
| Counsel for the Applicant: | Ms McDiarmid |
| Solicitors for the Applicant: | Wheldon & Associates |
| Counsel for the Respondent: | Mr Baston |
| Solicitors for the Respondent: | James White Lawyers |
ORDERS
That the parties submit a minute of order giving effect to the rulings in this judgment and that such draft be submitted to the Court within fourteen (14) days of today’s date.
IT IS NOTED that publication of this judgment under the pseudonym Alfred & Alfred is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRM 8622 of 2006
| MS C ALFRED |
Applicant
And
| MR T ALFRED |
Respondent
REASONS FOR JUDGMENT
Introduction
In this proceeding the Applicant, Ms C Alfred (the Applicant) claims for declarations and consequential orders by way of property settlement pursuant to section 79 of the Family Law Act in respect to her marriage of Mr T Alfred (the Respondent).
Orders Sought
In her application the Applicant seeks:
a)a declaration that real property located at Property A more particularly described as Lot [X] being all that land described in certificate title [X] (Property A) form part of the matrimonial property and further that the Applicant be declared to have an equitable interest in the property pursuant to a constructive and/or resulting trust;
b)a declaration that property located at Property B being described as Lot [X] on Crown Plan [X] being all that land described in certificate title [X] (Property B) form part of the matrimonial property and further that the Applicant be declared to have an equitable interest in the property pursuant to a constructive and/or resulting trust;
c)that there be an accounting of all matrimonial property and financial resources;
d)that the matrimonial property and financial resources be divided equally between the Applicant and the Respondent for their respective sole use and benefit
In his response the Respondent sought:
a)a declaration that Property A and Property B form part of the matrimonial property;
b)that there be an accounting of all matrimonial property and financial resources;
c)that the matrimonial property and financial resources be divided 80% to the husband and 20% to the wife.
In the husband’s outline of case further orders were sought that the Applicant return to the Respondent chattels and personal items set out in Exhibit A to his affidavit filed 15 November 2006[1].
[1] Although the affidavit filed in the Court contains an annexure marking sheet no annexure was attached. I will hear the parties on this matter.
In final submissions it was contended by Counsel for the Respondent that in respect of the Applicant’s claims for declarations of equitable interest in each of Property A and Property B pursuant to constructive and/or resulting trusts that there was insufficient evidence to establish such trusts as a matter of law. The matter was not pursued by the Applicant in final submissions and although not formally abandoned, by reason of declarations which follow concerning those properties forming part of the matrimonial property it is unnecessary for me to make findings in respect of those matters.
History
The parties met in New Zealand in or about 1989. They commenced living together in late 1989 or early 1990[2]. In 1991 the parties travelled to the Philippines to visit the Applicant’s family and for the Respondent to meet her family. After that trip the Applicant says that it was resolved between she and the Respondent that she would come to Australia to live with him. That matter is also in contention between the parties but I accept it as a matter of fact to be the case. The Respondent said as much in his letter to her of 9 May 2006[3].
[2] This matter is disputed by the Respondent. However I disbelieve him generally where his evidence departs from the Applicant’s for reasons detailed in this decision. Where there is any such disagreement I have preferred the Applicant’s evidence.
[3] Affidavit of Applicant filed 15 November 2006, Exhibit C1A 15 para 1.
It took approximately 2 ½ years for the Applicant to successfully prosecute her application for an appropriate visa and to join the Respondent in Australia. Upon her arrival in Australia she commenced living with the Respondent in rented accommodation at Property P. Shortly after her arrival the Respondent was sent to prison. She remained at that residence until his release. The Applicant and Respondent moved from that residence to premises at Property J after he was released from prison in approximately mid 1994 and were living at that residence at the date of their marriage in December 1994.
The parties continued to live together until they finally separated in April/May 2006[4].
[4] The Applicant says separation occurred in mid 2005 when she says she advised the Respondent she considered the marriage was over. The Respondent had been imprisoned on 11 March 2005 for a period of 18 months. He was released on 10 September 2006. In submissions on his behalf his Counsel submitted separation occurred in May 2006. Nothing appears to turn on that disagreement.
Aside from periods of imprisonment or hospitalisation the parties lived together throughout that period.
During the course of their cohabitation the Applicant performed household and domestic duties consistent with those which would be expected of a homemaker. The Respondent during that period was not in employment. The Applicant also worked as a cleaner at [Y]. She continued in that employment until 21 April 2005 when she ceased work as a consequence of ongoing health problems. She swore that throughout the marriage her income was used to assist with the expenses of the household including groceries, telephones and in respect of payments toward the Respondent’s properties. In addition she says she provided the Respondent with nursing care following his various hospitalisations for an appendix and heart operations. Finally she also claims contribution to the improvement of various properties which were renovated by the parties through the course of the marriage.
During the course of the marriage the Respondent’s principal source of income aside from social security benefits was rental income received from property owned by him together with some interest from term deposits and savings.
At the time the parties commenced cohabitation the Applicant owned no assets. The Respondent says that he owned a property situate at Property J and about $60,000 in cash which represented the residue of proceeds received from him on the sale of a property which he owned in Auckland in New Zealand.
It is alleged by the Applicant that during the course of the marriage various assets were acquired and disposed of. They particularly include Property B, Property R, Property A, and Property G.
The acquisition and disposal of those properties was in addition to the disposal of the property at Property J.
At the time of trial the Respondent was not the registered proprietor of any of the above properties. For reasons which are more particularly explored below issues arise between the parties as to their inclusion in the property pool. That is so despite the concession apparent in the Respondent’s response.
At the outset of the trial in the course of debate the parties explored the nature of the relief sought in the principal application. This was particularly in the context of the nature of relief to be provided where, on the Respondent’s case, the properties subject to the declarations (Property A and Property B) were not registered in his name and said to be not beneficially owned by the Respondent. There did not appear to be any contention that the other two properties (G and R) were properties in respect of which the Respondent did not hold legal title and that the title thereto was in the name of his son N.T(2).A..
The Applicant however contended for “an accounting of all matrimonial property and financial resources”. At the outset of the trial the Applicant’s Counsel made it clear that what was sought was an award of “$200,000 or 35% of the matrimonial pool”. She submitted that the Property A and Property B properties form part of the pool and that the Respondent identified in his material those properties forming part of the pool. She submitted that what was in contention was the Respondent’s assertion of her entitlement being limited to 25% of the pool.
At the conclusion of the trial the Respondent’s Counsel submitted that the Applicant’s application was for declarations that the properties formed a part of the “matrimonial property” and that the Applicant be declared to have an equitable interest in the properties but not to hold “the whole equitable interest”. He submitted that the Respondent conceded that he held a beneficial interest in the property but says that it was a limited or partial interest.
The Applicant by her Counsel complained that the Respondent was estopped from maintaining that position because at the outset of the trial, following debate concerning issues to be resolved at trial, the Respondent by his Counsel made no objection to the Applicant’s claim as articulated above.
At the outset the Applicant made two matters clear namely:
a)The transfers of property to the son were a sham; and
b)Expressed in respect of Properties G and R that they should not be ignored because the Respondent has an interest in them.
Whether the Respondent is estopped from his submission concerning his holding of only a partial interest in Property B or Property A however does not in my view arise based upon my findings in respect of both the Property B and the Property A properties. As I have determined I have considered the properties are wholly beneficially owned by the Respondent. On that basis (and consistent with the Respondent’s Counsel’s submissions) no issue of procedural estoppel would in that event arise. Had my findings however been otherwise I accept that the matter would have required consideration.
The allegations concerning the Respondent’s interest in the G and R properties have been alive since the commencement of the application and in that regard I do not consider that any issue concerning procedural estoppel arises in respect of those properties.
In any event the Applicant’s application seeks an accounting of matrimonial property. In this case a significant dispute between the parties concerns the definition of the property pool. In addition through the course of the trial other financial information came to light which also required consideration in that context.
Governing Principles
The approach to be adopted in a property case is well settled and stated by the Full Court for example In the Marriage ofHickey (2003) FLC 93-143 that:
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of section 79. That approach involves four interrelated steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess contributions of the parties within the meaning of section ss.79(4)(a), (b) & (c) and determine the contribution based on entitlements of the parties expressed as a percentage of the net value of the property of the party. Thirdly, the Court should identify and assess the relevant manners referred to in ss.79(4)(d), (e), (f) & (g) (“the other factors”) including, because of s.79(4)(c), the matters referred to in section 7592) so far as they are relevant, and determine the adjustment (if any) that should be made to continuation based on the entitlements of the parties established at step 2. Fourthly the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all of the circumstances of the case; …”
The Property Pool
Property B
In her affidavit the Applicant says the Property B property was purchased as vacant land in or about March 1997 for the sum of $38,000. She says the contract in respect of the property settled on 15 April 1997. She believed it had been purchased by the Respondent. Subsequent to its purchase a house was constructed upon the property. In due course the Respondent and the Applicant resided at the property. She says she commenced residing in a partly completed dwelling on the site from mid to late 1997. The Applicant also says that she did extensive work together with the Respondent associated with finishing off the construction. The Applicant ceased residing in this residence in January 2005 when she took up occupancy at Property A. The Respondent vacated Property B in November 2004 to take up residence at Property T because of difficulties he had with the local police at B. He subsequently moved into Property A in January 2005.
In his affidavit filed 15 November 2006 the Respondent says that in 1998 his son N purchased the vacant land being the Property B property. He says that of the $35,000 consideration he contributed $5,000 and N contributed $30,000 which he (the Respondent) had provided to him through a trust fund which he held for N. The Respondent says that he, being N, had inherited the money from his grandfather’s estate and that the Respondent had held that sum for him since his grandfather had died in the early 1990’s. He says that he entered into an agreement with N that he would build a house on the Property B land and that both he and the Applicant could live there. He swore further that following the purchase of the property by his son the title deed was misplaced and as a result the transfer of ownership had never been registered to his son’s name as a solicitor had not been engaged to conduct the conveyancing as this was to be undertaken by the Respondent himself. He swore that in the meantime the title deed had been found however the transfer remained unregistered because the Applicant had placed a caveat on the title.
The Respondent says that the house built on the land was constructed by him at a cost of approximately $100,000. That sum he said was available to him by way of the proceeds from the sale of the New Zealand property[5]. He swore that the improvements to the Property B property were completed by subcontractors employed by him and that the Applicant made no contribution, either financial or non-financial, to the construction of the house or its subsequent completion. He swore that the house remained in an unfinished state for a number of years as he did not have sufficient funds to finish the project although the house itself was fully finished inside and liveable. He swore that external features such as verandas, roof linings, back porch and back stairs were not finished until 2003.
[5] The New Zealand property seems to have been something of a financial “magic pudding” for the Respondent as despite its being only $60,000 and that part of it was lost in a bad investment (see Respondent’s affidavit filed 15 November 2006 para 26) it appears also to have been the only possible disclosed source of funds available to purchase the BMW motor vehicle which the Respondent says was sold to provide his son N with funds for N’s later acquisition of R.
It appears that since the Applicant and Respondent vacated the property it has been rented and N has been receiving the rent.
The Respondent conceded for the purpose of the proceedings that despite his assertion of the property being N’s he (the Respondent) had a beneficial interest in the property as a result of his contribution to acquisition and improvements which he made. Based on his evidence of the $5,000 contribution and $100,000 in improvements that concession appears to constitute a concession as to 77 per cent ownership of the property.
The issue concerning this property relates to the value of the property which should be attributed to the matrimonial pool. Should that value be 77 per cent of its value as at the date of the trial or should it be 100 per cent.
At the heart of this issue is the question concerning both the intention of the Respondent at the time of purchase of the property together with the source of funds directed to its acquisition. The contract document itself (part of exhibit 2) is dated 18 March 1997. It nominates the buyer as “Mr T Alfred”. The consideration for the contract was $38,000. The contract was unconditional. Although title has not been formally conveyed, a Form 24 – Property Transfer Information form and a Form 1 – Transfer form have been duly completed. In particular the Form 1 nominates the Respondent as the transferee. Although the transfer has not been registered for reasons which are purported to be explained by the Respondent in his affidavit nothing turns on that matter. The fact remains that the Respondent is entitled to an immediate transfer and conveyance of title to him.
Despite the Respondent’s explanation concerning why title has not been conveyed to him it strikes me as remarkable that a conveyance has not been effected despite he having a clear capacity to effect such an outcome. Whilst no doubt the submission on the part of the Respondent is that a conveyance could not be effected because the Applicant had lodged a caveat in respect of the land, such an explanation only addresses the Respondent’s conduct since the date of lodging the caveat[6]. As an isolated incident the fact of the Respondent’s failure to register the conveyance of the title within the usual way within a reasonable period following the transfer would not alone be sufficient to draw any adverse inference. Undoubtedly though, it is suspicious. However when considered against the background of other matters addressed below in respect of properties discussed below I am drawn to the irresistible conclusion that the Respondent’s conduct in failing to register the transfer was intentional on his part and was designed to avoid a public registration of his interest to minimise or defeat the prospect of claims against him, either by the Applicant or other persons.
[6] I note there is no evidence to suggest that there was ever any approach by the Respondent to the Applicant either directly or through lawyers to arrange for registration to be effected and for the caveat to be removed for that purpose.
The explanation submitted by the Respondent is that in part the land was held in trust for his son N for whom he says the property was purchased. No evidence was placed before the Court concerning the will which allegedly bequeathed to the son N the $30,000 from his grandfather’s estate. Furthermore no records of any bank account were submitted to the Court to demonstrate the source of a sum of $30,000 which was alleged to have been available to the Respondent in or about March 1997 for the acquisition. Nor was there any evidence to demonstrate the funds had their source from the proceeds of the Respondent’s father’s estate. Given the obvious controversy concerning this property it is surprising that no effort was made to produce those documents to the Court. The Court was left only to rely upon the testimony of the Respondent in so far as those matters were concerned.
I found the Respondent’s evidence on this matter incredible. In his affidavit the Respondent stated that N contributed $30,000 which he (being the Respondent) had provided to him through a trust fund he had held for him.
When being cross examined concerning these matters the Respondent was unable to recall when his father died. He claimed that by reason of his excessive drinking that his memory had been affected and he was suffering “blank spots”. When pressed further he stated that in fact his father did not even know N or that N existed. He conceded that there was in fact no specific bequest for N but said that his father (being N’s grandfather) had said, if he (being the Respondent) had enough, to set one third aside for N. In the course of further cross examination he sought to demonstrate some nexus between N and the Property B property by saying that N came out to see the property prior to the purchase. The evidence was led as if to suggest that N had some involvement in its acquisition[7].
[7] It is worth noting that N would have been about 16 at the time of these events.
In his evidence N stated that in about 1989 he acquired Property B. He said his father held approximately $100,000 in trust for him as a result of a bequest to him from his late grandfather’s estate, his grandfather having died in 1993. He swore that the Respondent had found the property for him and applied $30,000 of his trust fund towards the purchase of the property and a $5,000 of his own funds, being the Respondent’s funds, towards its purchase price.
It is worthy to note in terms of both the reliability of N.A. and the Respondent that despite having the documents in their possession (exhibit 2) relating to the contract for the purchase and transfer of the property that they were unable to accurately relate in their prepared affidavits the consideration of $38,000 which is indicated on both the face of the contract and the transfer document.
I regard the evidence of both the Respondent and N.A. in respect of this matter as most unsatisfactory. I regarded both as having engaged in a collaborative scheme to deceive the Court in respect of these matters. Their motive for such an approach is clearly to minimise the matrimonial pool. Apart from the absence of documentation it is also odd that despite there being (on N’s evidence) a sum of $100,000 available only $30,000 was drawn down leaving the Respondent to find $5,000. It is unfortunate that Mr N.A. was not more vigorously examined in relation to the matters concerning this particular transaction but notwithstanding that matter I am satisfied that given the sums of money involved I expect there would have been records available to demonstrate the truth of the assertions and that such records would have been available to either of N.A. or the Respondent.
Other evidence which supports the conclusion that the land was in fact purchased by the Respondent in his own right is to be found in the material adduced through the course of the trial concerning improvements to the property. Exhibit 3, a QBSA insurance notification form is a form which was prepared by the Respondent. In it he noted the owner’s name as C.Alfred.. This co-incidentally is the Applicant’s initial. The notation indeed supports the Applicant’s assertion that she has an interest in the property. The owner identified is different to either of the Respondent, or the Respondent as a part owner with N.A.. Despite that matter the fact remains that had N.A. had some interest in the property his interest could readily have been disclosed at that time. This is particularly so given that the insurance notification form was signed by the Respondent himself. It also appears from the form that the owner’s name is written in the same handwriting as the Respondents own hand. Likewise but less compelling is Exhibit 4 which is an application for a water meter and water service. That form does not appear to be in the hand of either the Applicant or Respondent and although it notes the Applicant as the property owner. It was signed by the Applicant. However it does lend some currency to the suggestion that N.A. had no interest in the property as it is a document which also was prepared in the context of the building work undertaken, the subject of the notification exhibit 3.
I find that the property the subject of the contract dated 18 March 1997 between Mr B and Ms D as vendors and Mr T Alfred as purchaser was intended to be a contract for the purchase of that land by the Respondent in his own right. It is property which in its entirety falls within the pool of matrimonial assets. I do not accept that at the time of acquisition or later there was any interest acquired in the property by the Respondent’s son on the basis alleged or at all. I find the Respondent’s son has no interest in the Property B property.
The value of the property has been agreed between the parties at $250,000 which sum should be fully allowed in the matrimonial pool.
Property R
The R property was purchased by the Respondent in or about October 1999. The property was purchased in the name of “N.T(2).A.”. That is the same name as the Respondent’s son from his first marriage. The transfer document demonstrates that the property was purchased for a consideration of $74,000 sometime shortly before October 1999. The transferee’s signature, evident on the transfer form[8], is clearly in the hand of the Respondent[9]. At the time of purchase the property was subject to a tenancy in favour of Mr and Ms C. An attornment form in terms of a Form 5 provided for by the Residential Tenancies Authority noted the former lessor as “Mr P” and the new lessor as “T.Alfred”. The address for Mr Alfred was noted as Property M. This was and remains the address of the Respondent’s ex-wife, J.A..
[8] Affidavit of Ms Alfred filed 19 October 2005 Annexure CA3.
[9] See by way of comparison the signature on the transfer and the Respondent’s signature on the various affidavits.
In his affidavit the Respondent said that in about “1999/2000 I gave my son N about $60,000 so that he could purchase the property at R”. He said he had obtained these funds from the sale of his BMW motor vehicle which he had recently purchased from funds he had invested. He said that he gave these funds to N as he was entitled to these funds as part of the inheritance which he was to receive from his grandfather’s estate. The Respondent denied any beneficial interest in the property.
The Respondent’s affidavit material raised a number of questions which concerned the Respondent’s overall reliability. First it makes the observation that “in about 1999/2000” he gave N some money. It is to me puzzling that such a broad assertion would be made in response to the Applicant’s affidavit and in particular to annexure CA3 to her affidavit. Machine markings apparent on the transfer form made by both the Queensland Stamp Duties Office and also by the Titles Office indicate that the transfer was stamped on 20 October 1999 and the transfer was lodged for registration on 19 November 1999. There must have been in existence a contract prior to 20 October 1999 for the transfer to be stamped in the manner in which it was. None was produced to the Court. In any event it strikes me as an odd assertion that it is possible that some time after a contract was concluded on
20 October 1999 it could be said that the Respondent “gave” his son the money so he could purchase the property, given that the gift on the Respondent’s evidence would have been given some time after 1999 in the year 2000. A gift in the year 2000 for that purpose (after the property had been acquired) is simply not logical. Likewise no financial statements were produced by the Respondent to support his evidence that a sum of $60,000 was granted for that purpose. Furthermore it appears puzzling that the source of these funds were “funds from the sale of my BMW motor vehicle which I had recently purchased from funds I had invested”. However in the following paragraph the Respondent said that he “gave these funds to N as he was entitled to these funds as part of the inheritance which he was to receive from his grandfather’s estate”.
A literal reading of the paragraphs 47 and 49 of the Respondent’s affidavit filed 15 November 2006 suggests a clear intermingling of private and trust funds on the part of the Respondent. Whilst this proceeding is not one to resolve questions of any breach of duty as trustee by the Respondent viz a viz his son as alleged beneficiary of his grandfather’s will, the manner in which the Respondent used such funds (if they indeed ever existed) indicates that the funds were treated by the Respondent as his own funds. The transaction has all the hallmarks of a transaction where the Respondent sought to transfer the property into the name of his son for the purpose of secreting those funds and not for any bona fide trust purpose. In other words it does not appear to me that the Respondent either sought to make the acquisition using funds held by him in trust for his son (in which event the property is trust property); or alternatively, it does not appear to me that the Respondent genuinely intended to gift his interest in the property to his son such that a presumption of advancement might arise.
The transfer document itself is a curious document. It is noted for instance that the lodger of the transfer is identified as “T(2).N.A. Property R”. However the transferee is noted as N.T(2).A.. The transferee’s signature is T.Alfred. As I have earlier noted a comparison of the transferee’s signature with that of the Respondent leaves me to the irresistible conclusion that the transfer was signed by the Respondent as transferee. In any event it is clear that it was not signed by N.A. for the signature on the transfer document bears no resemblance at all to that of N.A.. Another matter which bears comment in respect of the transfer document is that it noted the address of T(2).N.A. as “Property R”. That of course was the address of the property. However even if as the Respondent would have the Court believe the reversal of the name N.T(2).A. to T(2).N.A. on the transfer was accidental it is clear that the Respondent’s son did not live at the property at Property R at the time of lodgement of the transfer documents. As Mr NA.deposed to in his affidavit at paragraph 17[10], he did not commence living on that property until about four weeks prior to swearing his affidavit. So much of course is entirely consistent with the change of lessor or lessor’s agent form 5 notice which was annexed to the Applicant’s affidavit[11].
[10] Affidavit N.A. filed 15 November 2006.
[11] Affidavit of Ms Alfred filed 19 October 2005 Annexure CA4.
The Respondent sought to demonstrate his son’s ownership of the property by adducing evidence concerning receipt of rental income by the son. In his affidavit N.A. swore that the property was rented out immediately after it was acquired until about September 2006. He further swore that he had received the rental income on the property “under (sic) about eighteen months ago when the Respondent commenced receiving the rent”. N.A. swore that he assisted the father who said he required him (N) to pay the Applicant $250 per week as a result of his marriage breakdown.
In the course of cross examination N.A. swore that he received the rent and that the rent was paid into his bank account by a tenant. He said it was about $500 per fortnight. He was asked whether he provided tax returns and whether he declared the rental income in his tax to which he responded in the negative. His excuse was that he did not think he had to.
Not only did his evidence of these matters bear upon the “revenue” but also provided another instance of evidence which should have been capable of objective verification but was not. Over a period of not less than six years tenancy the rental income had a value of many thousands of dollars. Evidence of the receipt of that money by the son would have constituted a significant corroborative body of material in support of a contention that the Respondent had unconditionally gifted the property to his son. Knowledge concerning the particulars of those matters lay with the Respondent or his son yet the best they could do was themselves swear to the issue.
Mr N.A. did not impress me as a witness. Affidavits by both N.A. and the Respondent were sworn a short time before the trial. Aside from the fact that by comparison of the affidavits there appears an obvious and deliberate collusion between the parties in the manner in which the affidavits deal with this issue, the evidence does not sit comfortably with the objective material which has been placed before the Court. For instance if, as Mr N.A. deposed, the property was let out immediately upon its conveyance and he was in receipt of the rental income a question arises as to why the notice of attornment did not identify him as the new lessor.
Other documentation not produced for the Court but which would have been useful in solving this controversy includes the stamp duty declaration made in support of the transfer application. Arguably it should have been signed by the transferee, N.T(2).A.. Unfortunately N.A. was not cross examined on the point so I do not know who swore the declaration for the Stamps Office concerning the duty payable on the transfer. In any event however I am satisfied that as the transferee was “T.Alfred” where on the transfer it appears signed “T.Alfred” by the Respondent it is clear to me that the intention of the Respondent was not to gift the property to his son N.A. but to retain title for himself. Equally I do not believe the evidence of either the Respondent or N.A. that there was some large sum which was in the nature of a “magic pudding” from which funds could be drawn down by the respondent to purchase property on behalf of N.A.. I address the apparent source of funds below.
It was contended for by the Respondent that the fact that the property was purchased in the name of N gives rise to a presumption of advancement and that by reason of that matter there had been a proper and effective disposition of the Respondent’s interests in the property.
It is well settled that “where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement i.e., a presumption that the purchaser intended to give the other a beneficial interest, is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser”; Calverley v Green[12] .
[12] 1984 155 CLR 242 at 246 per Gibbs CJ.
Further it is well settled that the presumption of advancement “…may be rebutted by evidence of actual intention of the purchaser at the time of the purchase”[13].
[13] Calverley v Green supra at 251.
In the instant case it is clear that the presumption of advancement arises because of the transfer of the interest by the Respondent to his son N[14]. The presumption however is rebuttable.
[14]Charles Marshall P/L v Grimsley (1956) 95 CLR 353, 364.
The burden of rebutting the presumption of advancement lies upon the person asserting the existence of a trust. Proof of contrary intention may be derived from the instrument pursuant to which the title is transferred, in other words in the actions of the parties arising at the time of and surrounding the transaction; Charles Marshall Pty Ltd -v - Grimsley[15].
[15] (1956) 95 CLR 353, 365.
Although the Respondent and N each maintain that the source of funds for the purchase of the R property were a bequest from N’s grandfather I do not accept that evidence. As discussed below in respect of the Proeprty G transaction the absence of even rudimentary documentation supporting this transaction leaves me only to consider this transaction by reference to the uncorroborated testimony of both the Respondent and his son. Despite the fact that they were not cross examined on this matter there is no rule that evidence which is unchallenged in cross examination must be accepted by the trier of fact especially if it appears to be inherently incredible or is contradicted by other credible evidence; Jango v Northern Territory of Australia[16].
[16] (2006) 152 FCR 150; Elkington v Shell Australia Limited (1993) 32 NSWLR 11 at 17.
Furthermore my views in this matter are fortified by the inference that I am entitled to draw in circumstances where the party who has the greater capacity to produce documents fails to do so.
It follows that I do not accept that the Respondent or his son had access to $60,000 in the manner suggested. I note in passing the consideration for the acquisition was $74,000 and even if the Respondent’s son had $60,000 there would still be a shortfall of $14,000. The arithmetic inconsistency further fortifies my view that the Respondent’s evidence in respect of this matter is not credible.
It follows from my view that there was no intention on the part of the Respondent to purchase the property for his son. It follows in those circumstances, that as the evidence indicates an intention to withhold the beneficial interest from a child as transferee. Accordingly, on one view it does not displace the presumption but rather excuses it from arising[17].
[17] See discussion Ford HHA & Lee WA, Principles of the Law of Trusts (3rd ed, Sydney, LBC, 1996), at para 21060; and Calverley & Green supra at 267 per Deane J.
In any event in this case that I am left with three broad positions. First the bald fact of the gift made by the Respondent to his son N without commentary. That circumstance gives rise to a presumption of advancement and the obligations upon the Applicant to rebut that presumption. The second is the circumstance where having been informed of the premise upon which the gift was made I reject the evidence of the Respondent and his son, but notwithstanding that matter I am still left with no direct evidence from the Applicant discharging her onus but for circumstantial evidence. The third circumstance is one whereby I reject the Respondent’s evidence but find by reason of the facts and circumstances that it was never the intention of the Respondent to convey to his son the beneficial interest in the property. That matter is evidenced by the manner in which the transfer form was executed and also by reference to the direction given following transfer for the payment to the Respondent of rental receivable from the property.
I am satisfied that on the balance of probabilities there was never any intention on the part of the Respondent to transfer the beneficial interest in the R property to his son. Accepting an application of the presumption of advancement I am satisfied that the Applicant has discharged her onus of rebutting the presumption by identifying to the Court the nature of the transfer as identified in the transfer form and also the Respondent’s true intention to retain the benefit of the property by seeking to receive rental income due in respect of the letting of the property. I also consider the Respondent’s dishonest conduct in seeking to disguise these transactions from the Court as also evidencing his intention not to intend an unconditional conveyance to his son, N.
I find the property is property held by N.A. in trust for the Respondent and it forms part of the matrimonial estate. Unfortunately in this case there does not appear to be any agreement concerning the value which should be attributed to this property. There was no evidence placed before the Court concerning its current value. It would be wholly inappropriate to simply ignore the property simply because there is no evidence of its current value. The fact remains that at least as at 1999 the property had a value of $74,000. Whilst it would be inappropriate to speculate as to its present value accepting that the property has continued to be tenanted from that time to this and that the current rental is in the order of $250 per week it seems reasonable to infer that the property has not diminished in value. Accordingly I adopt the purchase price of the property as its value for the matrimonial pool.
Property G
The G property was acquired by the Respondent in 2001. In her affidavit the Applicant simply noted that she became aware of the property after the husband had purchased the property as she recalled on a number of occasions he would drive her to the residence and inspect the renovation work being done to the house as the husband was proposing to tenant the property.
The paucity of the Applicant’s evidence in relation to that matter is consistent with other aspects of the Respondent’s treatment of her concerning the provision of information relating to assets acquired and disposed of during the course of the marriage. As annexure CIA14 to the Applicant’s affidavit filed 15 November 2006 amply demonstrates, the Respondent on many occasions sought to conceal from the wife, as best as possible, information by nominating agents or addresses other than his current residential address for the purpose of addressing correspondence of a financial character. For instance the transfer of April 2001 notes the original address for service as “Property R”. Given that tenants at R knew of the Respondent as their landlord it is reasonable to expect that any correspondence addressed to the Respondent at that address would have been on-forwarded. The evidence is unequivocal that the Applicant and Respondent never resided at R. Likewise upon the deletion of that address a firm of solicitors were engaged. But as annexure CAI9 to the Applicant’s affidavit demonstrates correspondence from those solicitors (at least in respect of later transactions) was addressed to Property M,, being the address of the Respondent’s ex-wife.
In any event the Respondent swore in his affidavit that in or about 2003 he attended at an auction and arranged for the purchase of a house and land at G. The Respondent’s affidavit in this regard is clearly in error. The transfer exhibited CAI14 clearly indicates that the transfer was registered on 20 April 2001 with the transferor having executed the transfer on 6 April 2001. One can only presume that a contract was entered into shortly before that time. Given that the transfer is a business record of the Respondent which was or ought to have been within his reasonable power or possession to procure, it is surprising to my mind that his affidavit inaccurately identifies 2003 as being about the time when he attended an auction and arranged to purchase the G property. This plainly slovenly approach to detail and accuracy as identified on this occasion and others which have been noted earlier in this judgment lead me to conclude that the Respondent has not adopted a particularly vigilant approach to informing the Court accurately of events. This is particularly so given the ease with which matters such as these were capable of independent verification.
Likewise the same criticism is apparent from the affidavit of N.A.. In his affidavit he notes that in 2002/2003 he acquired the property at G. The documentary evidence is unequivocal. A memorandum of transfer was executed transferring the property from his father to himself on 27 March 2002. It was subsequently subject to stamping on 3 May 2002 and the transfer itself was registered on 9 May 2002. As with the Respondent there appears to be no excuse why Mr N.A. could not have afforded greater accuracy and detail in respect of matters which from all accounts should have been beyond contention. His evidence in relation to these matters gives me no confidence that in all respects it accurately relates the relevant facts.
Matters relevant to my concerns about the accuracy of both the evidence of the Respondent and N.A. particularly bear upon other matters which are relevant to the acquisition of G. Both the Respondent and N.A. say that the property was purchased for $40,000 (again another fact which is quite inaccurate having regard to the objective material contained in the memorandum of transfer) using funds provided by N.A.’s mother.
In paragraph 20 of N.A.’s affidavit he says “my mother has told me that she contributed the entire purchase price for the property and also the renovation”. Mrs J.A., the Respondent’s ex-wife, in her affidavit filed 18 December 2006, swore that in or about early 2001 she gave the Respondent an amount of $40,000 for the purposes of renovating her home. She deposes that after she had paid the $40,000 to the Respondent he came to her and told her that he had used the money to purchase the G property. She says that following that she and the Respondent had a discussion and it was agreed that she would purchase the property (being G) from the Respondent for an amount of $120,000 and that as part of that arrangement the Respondent would perform significant work on the property. She then swore that the amount of $40,000 she had paid the Respondent in respect of the intended renovation to her M property was applied to the purchase price of $120,000. By this I understand her to mean that she would pay the Respondent an additional $80,000 for her acquisition of the G property including an allowance for the cost of renovations. No bank records verifying this transaction were ever presented to the Court.
She also says that at this time she purchased for the Respondent a motor vehicle for the sum of $26,000.
Premised upon those allowances and assuming that transaction was indeed one agreed between the parties the arithmetic is as follows:
Purchase of property $120,000
Initial payment $40,000
Motor vehicle $26,000 $66,000
Balance available for renovation $54,000
to both propertiesIn paragraph 21 of her affidavit J.A. refers to paying the balance of $53,000 to the Respondent in instalments. She says the Respondent used this sum to pay the sub-contractors he employed to perform works on the property and that the final instalment was paid in or about August 2003. It appears from my arithmetic that the deponent’s affidavit is out by about a sum of $1,000. Although only a minor matter it further highlights the slovenly approach taken to the provision and by the Respondent and his witnesses to evidence in this proceeding.
J.A. swore that she kept “a careful record of all payments made to” to (the Respondent) in respect of the G property. She swore at paragraph 22 of her affidavit filed 18 December 2006 that she took the diary to Property B and understood that it was left there in the care and control of the Applicant when the Respondent was incarcerated in about March 2005. There is no evidence adduced by the Respondent concerning any such diary including any evidence by him of he having taken such a diary into his possession and he having left it with the Applicant. The Applicant was not cross examined about the matter.
In addition to her statement concerning the provision of funds to finance the acquisition of that property she also stated there was some discussion between herself, N and the Respondent concerning the possible future sale of the property. She deposed that she informed the Respondent that should she ever want to sell the property she would like to give him half of the net profit of any such sale provided N agreed[18].
[18] By this J.A. appeared to recognise some proprietorial interest remained with the Respondent which she recognised, despite the notional transfer of title from the Respondent to his son N.
Despite the affidavits filed in the proceedings it transpired in the course of evidence that J.A. had sworn a statutory declaration on or about
23 March 2006which such declaration dealt with the question of ownership of the G property. In her declaration (exhibit 11) she deposed that she had offered to purchase the G property in 2002. She further deposed that she paid a cash deposit of $26,000 and further cash payments amounting to $94,000 over the following two years. The first cash payment was sworn to having been paid on 12 February 2002. It would seem that this deposition more accurately reflects the truth of events than the depositions contained in her affidavits sworn in the proceedings. Again by reference to the material contained in the memorandum of transfer forming part of exhibit CIA14 it can be seen that the date of execution of the memorandum of transfer was
27 March 2002and that the consideration was for a sum of $120,000. The approximate correlation of the date upon which it is alleged a deposit of $26,000 was paid and the date of execution of the transfer gives me some confidence that that is in fact what occurred. The fact that the transaction occurred in the manner asserted in J.A’s statutory declaration of 23 March 2006 is further supported by the direct correlation of the consideration provided for in the transfer and the sum said to be the purchase price as sworn to in the statutory declaration.
Despite the above I did not find J.A. a particularly satisfactory witness. She appeared as evasive, hesitant and vague. She struck me as a witness who was anxious not to inform the Court unconditionally of any matter. Indeed the impression I had was that the witness was anxious, if not fearful, about giving evidence.
Quite clearly the deposition provided by J.A. (Exhibit 11) is at odds with the evidence of both the Respondent and N.A.. Her subsequent evidence provided for in her affidavits filed 16 November 2006, 29 November 2006 and 18 December 2006 sought to tailor her evidence to that of both the Respondent and N.A.. The presentation of these three witnesses’ evidence on that matter was in my view a transparent tissue of lies.
I reject the evidence of the Respondent in respect of the circumstances surrounding his acquisition of the property at G. I find that he initially attempted to employ a pseudonym for the purposes of registering the transfer of the property to himself. For reasons which were not explored in evidence that matter did not come to pass and the property was registered in his name. That occurred in April 2001 and approximately twelve months later was subject to the transaction sworn to by J.A. in her statutory declaration (exhibit 11). The property was conveyed into N.A.’s name.
It was conveyed into his name in the circumstances deposed by
Ms J.A. in her statutory declaration, Exhibit 11. She paid the Respondent a sum of $120,000 (or forgave in part indebtedness to that value and acquired a motor vehicle for him). As she provided the consideration but permitted the transfer to be registered in her son’s name a presumption of advancement clearly arises.
The presumption has not been rebutted and the property remains his. However the disposition constitutes a premature disposition of matrimonial property by the Respondent in his favour as he did not account for the funds in respect of which he received the sole benefit. “What the (Respondent) did was to distribute to himself an asset in which the wife had a legitimate interest.”[19]
[19] (1995) FLC 92-569 at 81, 654 (per Nicholson CT; Fogarty, & Jordon JJ concurring)
Consistent with the approach In the Marriage ofTownsend I consider that in the circumstances the correct way to deal with the Respondent’s receipt of the money is to “bring them into the pool of assets on a notational basis and make a distribution accordingly”.
As the Respondent has received in cash and kind a sum of $120,000 which has not been accounted for in the matrimonial estate it should be brought to book in this proceeding.
Property A
The property at Property J owned by the Respondent at the commencement of the relationship between the parties was sold by him under contract dated 23 August 2003 for the sum of $400,500. That sale settled on or about 28 October 2003. On 30 October 2003 it appears that a sum of $350,000 was deposited in a term deposit[20] with the ANZ Bank. It seems apparent that the source of those funds were settlement funds received from the sale of Property J.
[20] Affidavit of Ms Alfred filed 19 October 2005 Annexure CA6.
In his affidavit the Respondent says that sometime shortly before
15 December 2004he entered into an arrangement with his son N whereby he would provide funds to N to purchase the property at Property A in exchange for a life tenancy. He said the property was purchased by his son and was financed by him using funds drawn from his ANZ term deposit account from which he had deposited the proceeds of sale from the sale of the Property J property. He said by reason of a “clerical error”, the name on the contract was shown as T(2).N.A. instead of N.T(2).A.. Despite that fact he maintained that N.A. was the legal owner of the property.
In her affidavit filed 15 November 2006 the Applicant attached additional material including documentation which came into her possession after the Respondent was jailed in 2005. In particular she annexed some documentation relevant to the property at Property A. Concerning that documentation I do not give the electricity transfer notice (Exhibit CIA7) any great weight. It is not evidence of ownership but merely evidence concerning the identification of the account payer.
However more significantly the Applicant produced a copy of a trust account receipt issued to the Respondent on 1 December 2000 identifying the receipt of $1,000 cash by [C] as a “deposit for sale contract” in respect of Property A. Further by a letter dated 6 December 2004 from Zappulla Trikam and Partners Solicitors “Mr T.Alfred.” of Property M was identified as the addressee. In the body of the letter itself the letter commences “Dear [T2]”. It is apparent from the letter itself that the solicitors had not had any personal dealings with “Mr T.Alfred” because in the second paragraph they ask for him to “please confirm that the correct spellings (sic) of your full name are (sic) T(2).A.”. Clearly the letter is a pro forma letter generated as a consequence of the solicitors receiving (possibly by reference through the real estate agent) a copy of the contract which they confirmed holding in the first paragraph to that letter.
In addition to reference in the title of the letter to the name “T(2)” there was also reference to the name “T(2).A.” in the transfer document which was prepared in respect of the transfer. Although there was no direct evidence concerning the obligation upon the purchaser to prepare the transfer documents that is a matter provided for in the standard REIQ contract which is commonly employed in residential conveyancing transactions. Given the agent appears to be a member of the REIQ (see the trust account receipt) I consider it is appropriate to draw an inference that the REIQ contract was employed in this instance. That being so there would have been a contractual obligation upon the purchaser’s solicitors to prepare the transfer documents. Consistent with that contractual obligation the transfer form prepared by the purchaser’s solicitors noted the transferee at item 5 as “T(2).A.”. It is however puzzling that despite the cash receipt noting the receipt from “Mr Alfred” a contract was prepared in the name of “T(2).A.”. It is further puzzling that the reference to T(2).A. bears only a passing resemblance to the Respondent’s son. The Respondent’s son’s name is N.T(2).A..
In her affidavit the Applicant says that he was also known as “N”. At no time was it suggested he was known as “T(2)”. It seems apparent to me that it more was than coincidence that the purchaser was described in the contract as T(2).A.. The description T(2).A. would permit documents such as stamp duty declarations and the like to be signed “T.Alfred” which signature would accord with the Respondent’s signature and could in that instance conveniently be passed off as the signature of T(2).A.. The enigmatic use of the name “T(2).A.” is further compounded by the notation made on the transfer form itself. Between the name “T(2)” and the name “[Alfred]” someone has handwritten the name “J”. The effect was that the transfer noted the transferee as “T(2).J.A.”. No such person exists or at least no such person of that name was identified by any party to these proceedings.
The circumstances of that transaction and the use of the name “T(2).J.A.” give rise to a strong suggestion of a ruse. My views in that regard are further fortified by the details of the transaction involving the G property where initially an attempt was made to transfer property to “T(2).A.” which was subsequently corrected to “N.A.”.
Annexed to the Applicant’s affidavit filed 15 November 2006 are photocopies of transfers numbered [X] and [X] registered in the Titles Office at Brisbane and relate to the Respondent’s involvement in the acquisition of the G property. They were marked exhibit CIA14. They indicate that the Respondent as transferee received a transfer of that property (the G property) on or about 6 April 2001 from the ANZ Bank as mortgagee exercising power of sale. Curiously the transferee at item 5 was originally noted as “T(2).A.”. It can be seen however from a review of that transfer form that the name “T(2)” has been struck out and the name “T” has been inserted. It is obvious from the type print that the name “T(2)” was the name originally inserted in the transfer form when it was initially prepared as both the type print and font of the other variable information inserted in the transfer form appear to be consistent with that used for the name “T(2)”. It is also apparent that the name “T” has been inserted following the deletion of the name “T(2)” and that by reason of its type print and font it has been inserted sometime after the original transfer form was prepared. Clearly someone has corrected the mis-description of the transferee’s name in that instance. Significantly however the transferee’s solicitors name has executed the transfer. The solicitor identified was Khimji Trikamji. It is reasonable to infer that that transfer was registered in accordance with the transfer document as the transfer bears a Department of Natural Resources stamp and dealing number. Furthermore by a transfer dealing number [X] dated 9 May 2002 Mr T Alfred is noted as having transferred the same property to N.A. for a sum of $120,000. In respect of that transaction there was no confusion as to the name of the transferee.
The events concerning G of course predated the transfer in respect of the Property A property which occurred in 2005 and it appears explicable that the solicitors for the transferee in that instance did not identify the discrepancy in the name of the transferee because a different solicitor appears to have been involved in that transaction[21]. However it strikes me as being more than serendipitous that the same misdescription error would occur again as had occurred in 2001; particularly given the Respondent had been corrected on this point in 2001.
[21] The transfer form identifies Jadwiga Christine Trikamji as the solicitor for the transferee.
It is apparent to me that the Respondent has sought to conceal this transaction from the Applicant. In my view it is no mere coincidence that the Respondent sought to use the pseudonym “T(2).A.” to engage in transactions in a surreptitious manner. Not only did it afford him an opportunity to sign documents with his usual signature but it also had the potential to permit himself to pass off as his son. I am satisfied this ruse was designed to enable him to register his assets in a fictitious name in order to preserve his interest in that asset. These transactions were significant when measured against the background of his matrimonial situation.
Although not explored in detail the Respondent had earlier that year been imprisoned for three months and was under threat of a suspended order for a further twelve months. In March 2005 he was then imprisoned for eighteen months.
No doubt the sentence in March 2005 came as no surprise. It is apparent from the correspondence forwarded by the Respondent from prison to the Applicant that things were over between them at that time. It is fair to surmise from the circumstances that this background was evident at the time of the Property A transaction.
I find that the transaction concerning the acquisition of the Property A property was one conducted by the Respondent for the acquisition of the property by him. By his conduct he sought to conceal that transaction from his spouse but at all times intended to retain title to the property. There was in respect of that transaction no attempt on his part to bestow a gift to his son which could be said to be the subject of a presumption of advancement and no trust was created because the transferee was a fictitious person. He is and remains the lawful proprietor of the property at Property A by his pseudonym T(2).J.A..
The parties agree this property has a value of $215,000 and it will be attributed to the matrimonial pool.
Add Backs – Miscellaneous and Other Assets
principles governing add backs were authoritatively articulated by Justice Baker In the Marriage of Kowaliw[22] where His Honour stated,
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint of several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(i)where one of the parties has embarked upon a course of conduct disguised to reduce or minimise the effective value or worth of matrimonial assets; or
(ii)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their residue…”
[22] (1981) FLC 91-092 at 76, 644
Those principles should be applied to a consideration of the following:
Bequests Unaccounted For
Generally the Respondent has had more assets than he has admitted to. A number of omissions require comment.
In evidence the Respondent said he had been the beneficiary of his father’s estate. (There is no question he appears to have received a benefit from his mother’s estate – the J, property) but there was also a reference to a trust fund held on behalf of N in respect of monies he had inherited from his grandfather’s estate[23]. However in evidence the Respondent said there had been no bequest as such but simply that the Respondent had held money for the son on an informal basis. He said that he had been instructed by his father (N’s grandfather) to provide N with a third of his estate. The Respondent said that he complied with his father’s direction.
[23] See affidavit of Respondent filed 15 November 2006 paragraph 38.
If that was the fact it would appear that the value of the estate was approximately $270,000. Working back, as best as it can be calculated, that sum is made up of an allowance for $30,000 allegedly contributed toward N’s acquisition of Property B and a subsequent $60,000 allowed towards N’s acquisition of R. In respect of those two sums the Respondent says that those funds were made available from monies held from N’s grandfather’s estate. Accepting that those funds in total represented one third of the value of the estate it follows that the total value of the estate was about $270,000.
No explanation is provided with respect to the disposition of this $180,000 sum (being the difference between $270,000 less $90,000). No bank account records were disclosed nor was any other evidence placed before the Court to demonstrate how between about sometime in the early 1990s and at least 1999 those funds were treated. It is material to bear in mind that throughout this period the Applicant and Respondent cohabited. The only other property purchased by the Respondent prior to the purchase of the R property was the Property B property and even allowing for the expenditure of $100,000 on its improvement a significant sum of money remains unaccounted for. In any event it can be seen from a consideration of the material that financially the acquisition of the Property B property in April 1997 can be justified from the proceeds alleged to have been received by the Respondent on the sale of his New Zealand property wherein he says he realised $60,000 in 1991.
No value can be attributed to the unaccounted bequest. For reasons noted above I do not believe either the Respondent or his son in respect of their assertions that the source of funds for the transactions were such bequest. In broad terms the proceeds of sale on the Auckland property appears, arithmetically, to have been sufficient to provide initial funding. This is particularly so if $100,000 was not spent improving Property B, as alleged, and allowance is made for day to day living expenses of the Respondent being covered by the Applicant. In any event I have no difficulty accepting the Respondent’s evidence that he invested the profit on the Auckland sale. However I do not accept his investments were poor. As the recorded transactions demonstrate his investments have proved profitable. If they were those profits would account for the source of funds to develop B. The Applicant’s ongoing income would in those circumstances have been critical to the household.[24]
[24] The Respondent’s evidence is promised in any event upon the truth in his unverified evidence that the net profit on the sale of the Auckland property was $60,000.
I do not accept there was in fact any such bequest as alleged and make no allowance for it.
Surplus Cash
The second series of transactions which occasioned suspicion are those transactions which occurred in late 2005. The Respondent sold the Property J property in August 2003. After payment of sale expenses and the discharge of the mortgage he appears to have netted about $350,000. That sum appears to have been deposited in a cash management account with the ANZ bank[25].
[25] See Exhibit 13.
In December 2004 Property A was purchased for a sum of $200,000. Subsequently in January 2005 an account was opened at Suncorp Banking Corporation, account number [X]. The arithmetic symmetry between the $350,000 deposited in the cash management account on
30 October 2003[26] and its closure on or about 14 December 2004 together with the subsequent deposit of almost $150,000 in Suncorp account [X] in early January 2005 leads me to the irresistible conclusion that the cash management account was closed upon the acquisition of the Property A property and the balance of the proceeds from the cash management account were deposited into Suncorp account [X] to create its opening balance.
[26] Which date coincides approximately with the date of sale of the J property
An examination of Suncorp account [X] shows that between 5 January 2005 when it was opened and 4 April 2005 when it was closed the balance was reduced by approximately $14,000. The $14,000 appears principally to have been withdrawn by ATM cash withdrawals. No explanation accompanied those withdrawals.
At the trial there was evidence by the Respondent’s ex-wife J.A. that N withdrew significant sums of cash from two accounts which were maintained by the Respondent. She says that these withdrawals were effected on her instructions. It is also worthy of note that the closing of Suncorp account [X] in early April 2005 roughly corresponds with the date of the Respondent’s imprisonment for a period of eighteen months. It would seem that this sum, at least, was drawn from the Respondent’s account and held in cash by J.A.. So much broadly corresponds with her evidence contained in her affidavit filed
18 December 2006. In that affidavit she claims to have been aware that on or about 10 May 2005 her son N transferred amounts totalling approximately $125,000 to his personal bank account. Given the general inaccuracy of the Respondent’s evidence and the very poor accounting some latitude has to be allowed for unreliability in respect of these matters. In any event J.A. says that the sum was withdrawn and paid to her in cash which was deposited by her to a safe at her house. She says that the cash sum was drawn upon periodically to pay for various accounts and that as at the date of swearing her affidavit she had only about $13,000 of the cash left. She swore that the expenditure by her was recorded in a book. That information has subsequently been transposed to a spreadsheet (Exhibit JFA1)[27] in respect to which the total withdrawal shown in the spreadsheet amount to $115,407.85 (not $100,707.85 as deposed to in paragraph 16 of her affidavit).
[27] Affidavit J.A. filed 18 December 2006.
When allowance is made for the $13,000 presently held in cash the money can be at least broadly accounted for. In that regard expenditure of approximately $115,000, cash of $13,000 and the balance in the account of account number [X] of approximately $9,000 broadly approximates with the $130,000 which was initially sourced from that account.
However what is unexplained is the actual expenditure. It can be seen from a cash management statement for Suncorp account [X] (Exhibit 7CM1) that on 10 May $125,000 was withdrawn by two separate withdrawals. Those are the sums which N.A. says were withdrawn by him upon his mother’s instructions. That balance of approximately $9,000 was further denuded from July 2005 through until April 2006 at which point bank statements cease (see Exhibit 7). No further property was acquired through that time. Accordingly it seems more probable than not that the money was expended in a manner broadly consistent with that asserted by J.A.. It is however curious to note the number of cash withdrawals from Suncorp account [X]. These were withdrawals made by Ms J.A. who had the pin numbers for that account.
In addition to Suncorp account [X] there was also a second account being Suncorp Banking account number [Z]. Copies of statements of Suncorp account [Z] from September 2004 to September 2006 are contained in Exhibit 8. That account is the account into which the Respondent’s Centerlink payments were made. Those payments appear to have been made notwithstanding that during most of that period the Respondent was in prison. Interestingly there are also in that account significant cash withdrawals made from that account on a regular basis. The payment of these sums remains unaccounted for particularly when regard is had to the payments made on the Respondent’s behalf from Suncorp account [X], during the period when the Respondent was in prison and arguably had little need for funds[28].
[28] Between March 2005 and September 2006 approximately $20,600 was withdrawn from this account and is unaccounted for. See Exhibit 2.
According to the spreadsheet annexed to Ms Alfred’s affidavit filed
18 December 2006approximately $51,000 was expended on the Respondent between approximately March 2005 and November 2006. Aside from solicitor’s costs and medical costs associated with an operation (totalling approximately $22,500 solicitor’s costs, $10,000 medical costs) the balance is said to have been expended on the Respondent. In that regard apart from a $3,000 payment for the P Father’s Day and a $5,000 payment made by the Respondent to his son N as a birthday present none of the other expenses appear exceptional.
In any event it is apparent that the manner in which these transactions were undertaken was designed to conceal and stymie any attempt by the Applicant to access these funds and have the benefit of a proper account in respect of their use. No doubt by the time the Respondent had been incarcerated in April 2005 the Applicant, having suffered his absence on three previous occasions because of imprisonment, had decided enough was enough and informed the Respondent so. So much in my view is apparent from the correspondence forwarded by the Respondent to the Applicant shortly after his incarceration. See for instance his letter of 9 May 2005. It is quite apparent from the text of that letter that there were difficulties between the Applicant and the Respondent although the letter itself does not precisely indicate the nature of that difficulty. There was in my view clear motive on the part of the Respondent at this time (if not earlier) to conceal his ongoing financial position from the Applicant.
The following is a summary of each transaction emanating from the $150,000 withdrawal.
Account No. [X]
| Date | Particulars | Dr | Cr | Balance |
| 14/12/04 | Opening balance [X] | 150,000 | 150,000 | |
| 5/1/05 – 4/4/05 | Miscellaneous cash withdrawal ATM | 14,000 | 136,000 | |
| 10/5/05 | Transfer to N (Note 1) | 125,000 | 11,000 | |
| Balance unaccounted for but said to be withdrawn to cash for J.A. | 11,000 | 0 |
Note 1:
N’s Account
| Date | Particulars | Dr | Cr | Balance |
| 10/5/05 | Opening balance | 125,000 | 125,000.00 | |
| Transfer J.A. | 10,011.01 | 114,988.99 | ||
| Transfer N.A. | 14,585.06 | 100,403.93 | ||
| Transfer T.A. (Note 2) | 51,039.52 | 49,364.41 | ||
| Property B | 18,966.34 | 30,398.07 | ||
| Property A | 2,937.67 | 27,460.40 | ||
| Property R | 3,168.25 | 24,292.15 | ||
| Cash to J.A. | 14,700.00 | 9,592.15 | ||
| Unaccounted | 9,592.15 | 0 |
Note 2[29]:
[29] Affidavit of J.A. filed 18 December 2006 Annexure ‘JFA01’.
Transfers for benefit of Respondent
| Date | Particulars | Dr | Cr | Balance |
| Opening balance | 51,039.52 | 51,039.52 | ||
| Solicitor – Wayne & Talloway | 22,432.30 | 28,607.22 | ||
| Operation | 10,000.00 | 18,607.22 |
| Gifts to N | 5,160.00 | 13,447.22 |
| Miscellaneous | 13,447.22 | 0 |
These unaccounted for transactions have the quality and character of premature distributions and are treated as such.
BMW Motor Vehicle
Thirdly there is no explanation for how the Respondent acquired the amount which he had swore had been invested and subsequently liquidated to fund the purchase of a BMW motor vehicle which vehicle was in turn sold to allegedly provide N with the $60,000 capital he required to purchase the property at R.
I note that the figure bears a remarkable resemblance to the $60,000 which the Respondent says was the sum realised by him on the sale of the New Zealand property (although that sum too was said to have been reduced by a loss in an investment scheme). In any event the sum was most probably applied to the acquisition of Property B in 1997.
In short there are significant gaps in the Respondent’s account. There does not appear to be any reasonable explanation for the gaps. It is clear to me that the Respondent sought to conceal from the Applicant and the Court a significant amount of financial information. That omission was clearly done with a view to minimising the size of the matrimonial pool. I am unable to make any finding concerning the BMW. It was probably fictitious and fabricated to justify other transactions.
It follows from the above that the following add backs should be allowed:
Sums drawn from account [X] or on transfers
Add Backs
Unaccounted cash withdrawal 14,000
Suncorp [Y] account
Unaccounted cash withdrawal 11,000
Suncorp [X] account
Withdrawal N account to J.A. 10,011.01
Withdrawal N to self 14,585.06
Withdrawal N to J.A. 14,700.00
Unaccounted balance account 9,592.15
Respondent’s account – legal costs 22,432.50
Operation 10,000.00
Gifts to N 8,160.00 111,980.52
Unaccounted withdrawal Suncorp account [Z] 20,600
Summary
Premised upon the above findings the property pool has a value of $828,387.52. That sum is made up as follows:
Real Estate
Property B 250,000
Property A 215,000
Property R 74,000
Unaccounted proceeds on sale of 120,000 659,000
Property G
Other Assets
Respondent’s chattels 15,000
Applicant’s superannuation 16,307 31,307
Sums drawn from account [X] or on transfers
Add Backs
Unaccounted cash withdrawal 14,000
Suncorp [Y] account
Unaccounted cash withdrawal 11,000
Suncorp [X] account
Withdrawal N account to J.A. 10,011.01
Withdrawal N to self 14,585.06
Withdrawal N to J.A. 14,700.00
Unaccounted balance account 9,592.15
Respondent’s account – legal costs 22,432.50
Operation 10,000.00
Gifts to N 8,160.00 111,980.52
Unaccounted withdrawal Suncorp account [Z] 20,600
822,387.52
Section 79(4) factors
Section 79(4) of the Act requires the Court in property settlement proceedings to consider that the listed financial and non financial matters provided for therein including the effect of any proposed order upon the earning capacity of the parties and the section 75(2) matters.
In undertaking this exercise the Court
“…must consider and evaluate the contributions of the parties, and seek to do so in a way that gives proper recognition to those contributions and their impact, it has never been suggested that this exercise is scientific, or necessarily empirical”.[30]
[30] Cromwell & Cromwell [2005] 5 FamCA1044 per Coleman J at paragraph 105 (the appeal against this decision was dismissed).
In Cromwell His Honour cited and applied the approach provided for by the Full Court in Pierce –v- Pierce[31] where the Full Court observed:
“…In our opinion it is not so much a matter of erosion of contribution by a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weight initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home” (per Ellis, Baker, O’Ryan JJ at 85 – 881) (emphasis added).
[31] 1999 FLC 92-844
As with Cromwell that passage has particular application in this case.
In this case the parties were married for approximately 11 years although their relationship extended over a period of approximately
15 years with cohabitation having commenced in about 1989 or 1990. The Respondent brought to the marriage his interest in the property at Property J which then had a value of about $180,000 (subject to mortgage) and the equity in his property in New Zealand. That sum was said to be worth about $60,000 in 1991. There was also a motor vehicle of inconsequential value. The Applicant had no assets.
Although not fully explained it is apparent that the Respondent put his assets to good use. He had sufficient funds to acquire and improve the Property B property in March 1997. If the Respondent’s figures are accepted and it is also accepted that there was never any loan required to acquire the Property B property and to develop it his $60,000 has grown to at least $138,000 over the intervening six years. Further Property J appreciated from a value of approximately $180,000 to $400,00 between 1994 and 2003 when it was sold.
The parties lived in both houses.
The Applicant says that throughout her marriage to the Respondent she worked. Initially she was employed as a cleaner at [X]. Subsequently she took up employment as a cleaner with the [Y] until April 2005 when she resigned from that employment due to recurring health problems.
The Applicant says that throughout that period she made direct financial contributions to the conservation and improvement of both the Property J property and to the acquisition and improvement of the Property B property. I accept her evidence on those matters. She also says she made an indirect contribution to those assets by her ongoing support of the matrimonial household from her earnings. I accept her evidence in relation to those matters.
The Respondent sought to diminish the value of those contributions by alleging that the Applicant spent excessive amounts of her earnings on poker machines. I do not accept any expenditure by the Applicant in that regard as excessive and do not make any allowance for it in the assessment.
Likewise I accept that she provided indirect financial support for the acquisition and improvement of other assets acquired by the Respondent over that period although the Applicant may not have been directly aware of the particulars of those assets. It is quite apparent that the Respondent was able to engage in the sale, purchase and improvement of property for sale by reason of the Applicant’s financial contribution to the household particularly in circumstances where the Respondent himself was not in regular employment. The Applicant contributed to the Respondent’s enterprise by the provision of household and domestic services and financially by the provision of day to day housekeeping in circumstances where it was clearly to the Respondent’s advantage leaving him free to pursue such opportunities as he did.
The Applicant’s Counsel quite properly conceded some additional allowance should be made for the Respondent’s initial contribution. Aside from that matter she submits the contributions should be considered on an equal basis.
In this case the Applicant has in my view made a significant contribution to the development of the matrimonial pool. Given the Respondent’s illness, alcohol difficulties and a time spent in prison it is unlikely he could have developed the matrimonial pool without significant contribution, both financial and non financial of the Applicant. Given the particular growth of the value of the estate over the life of the marriage I do not consider that the Respondent should be favoured with an allowance any greater than 15 per cent for his initial contribution.
In the circumstances I assess the Applicant’s contribution at 35 per cent of the matrimonial pool and the Respondent’s at 65 per cent of the matrimonial pool.
Section 75(2) factors
Section 79(4)(e) requires the Court to consider s.75(2) matters insofar as they are relevant.
Insofar as matters to be taken into consideration concerning spousal maintenance relevant to the facts of this case the principle considerations appear to be
a)the age and state of health of each of the parties;
b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
c)the standard of living that is in all of the circumstances reasonable;
d)the terms of any order proposed to be made under section 79.
Age and state of health of each of the parties
The Applicant is aged 50 although from her appearance looked older than her stated age. The Respondent is 70. Premised upon expectation of life tables the Applicant has a future life expectation of 33.53 years and the Respondent 13.10 years[32]. The Applicant has limited employment potential although I accept she has some residual employment capacity although it would be in low skilled employment of the kind that she has undertaken to date. I accept her evidence that although her health is generally good she does suffer problems with arthritis in her knees and right ankle and that that by reason of those ailments she does not intend to return to the type of work she previously performed as a cleaner. I accept that she intends to undertake further retraining in order to adapt herself to more suitable employment although it may take some time before she completes that training and is able to procure suitable employment.
[32] Assessment of Damages for Personal Injury and Death 4th edition Lunce Butterworths 2002 Appendix Table 6 and Appendix Table 7.
It is clear that the Respondent by reason of his age and health difficulties is now beyond useful employment.
Income, property and financial resources of each of the parties.
As discussed above the Applicant has some residual employment capacity although that is yet to be realised. The Respondent has none. The Respondent however does have a capacity to undertake passive employment in the nature of property redevelopment such as was undertaken by him through the course of his marriage to the Applicant. As the evidence has demonstrated this activity has proven to be quite remunerative for the Respondent despite his ill health and periods of imprisonment. Given the capital resources which he will have at his disposal despite the outcome of these proceedings I fully expect the Respondent will continue with those activities.
Additionally the Respondent has other financial resources at his disposal. He has sought to alienate assets by placing them in the hands of his son but he still has access to those assets. That includes not only the assets but also subsidised accommodation in that his son intends to permit him to reside at whichever property the Respondent chooses to reside at. In that regard he has the advantage of a rent free life tenancy.
A standard of living that is in all of the circumstances reasonable
Each of the Applicant and the Respondent have lived frugally but comfortably through the course of their marriage. Having regard to the length of their relationship that state should ensure if at all practical.
The terms of any order proposed under section 79
The orders following are the findings of the Court and will result in a financial adjustment in favour of the Applicant. That adjustment should enable the Applicant sufficient funds to purchase a small residential unit or cottage which will afford proper ongoing accommodation for her which such accommodation would represent an appropriate contribution to spousal maintenance.
In the circumstances I do not think it appropriate to make any express adjustment on account of s.75(2) factors.
Just and Equitable
S.79(2) requires that the Court consider overall whether in all the circumstances the proposed order is just and equitable.
Without rehearsing the above I am satisfied that overall the determination in favour of the Applicant of an entitlement of 35 percent of the matrimonial pool and 65 per cent for the Respondent is appropriate. Save for the Respondent’s initial contribution the balance of contributions are in my view equal. Given the equal contribution of the parties they should each enjoy the benefit yielded from the husbanding and growth of the assets over the time of the marriage with the Respondent enjoying an additional allowance recognising a return to him of the capital initially provided.
Spousal Maintenance
No formal orders were sought concerning spousal maintenance. I would in the ordinary course have expected them to be sought in the s.79 proceedings: Port of Melbourne Authority v Anshun Pty Ltd[33]. Since about March 2006 the respondent has paid approximately $250 per week by way of spousal maintenance by division of rental income on Property G. In view of my orders on the s.79 proceedings I do not consider it appropriate to make any formal orders under s.74 of the relevant s.75(2) matters have been taken into account in the proceedings.
[33] (1981) 147 CLR 589
Orders
In the circumstances I propose orders as follows:
a)a declaration that property situate at Property A described as Lot [X] being the whole of the land described in title reference [X] forms part of the matrimonial estate.
b)a declaration that property situate at Property B described as Lot [X] on Crown Plan [X] being the whole of the land described in title reference [X] forms part of the matrimonial estate.
c)that the Respondent pay to the Applicant a sum of $287,835.63.
As the above properties are not presently registered in the name of the Respondent but for reason of my findings I declare them to be the Respondent’s property and property in respect of which he is entitled to an immediate conveyance I will hear the parties in respect of the form of orders which should be made.
I certify that the preceding one hundred and forty-seven (147) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Bev Schmidt
Date: 26 April 2007
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