Amado and Gough
[2007] FamCA 388
•4 May 2007
FAMILY COURT OF AUSTRALIA
| AMADO & GOUGH | [2007] FamCA 388 |
| FAMILY LAW - PROPERTY – Weight to be given to one party’s sole use of sale proceeds of shares initially purchased from joint funds – Failure to provide full and frank financial disclosure – Weight to be given to a non-binding agreement between the parties – S 75(2) matters. FAMILY LAW - SPOUSAL MAINTENANCE – Whether threshold issue has been established – Failure to provide full and frank financial disclosure. |
| Family Law Act 1975 (Cth) |
Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143
Farnell and Farnell (1996) FLC 92-681, reviewed in NHC v RCH (2005) 32 FamLR 518
Black and Kellner (1992) FLC 92-287
Dupont and Dupont (No. 3) (1981) FLC 91-103
| APPLICANT: | MR AMADO |
| RESPONDENT: | MS GOUGH |
| FILE NUMBER: | SYF | 5594 | of | 2003 |
| DATE DELIVERED: | 4 May 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | The Hon. Justice Rose |
| HEARING DATE: | 31 January 2007; 1 & 2 February 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr R Bell |
| SOLICITOR FOR THE APPLICANT: | Clinch Neville Long |
| RESPONDENT: | In person |
Orders
Property settlement
That in implementation of the Orders made 12 December 2005 and to the extent they have not already been complied with the applicant shall sign all documents and do all acts and things necessary on behalf of both himself and the respondent in relation to the sale of the property situate at C in the State of New South Wales, Folio … (“the property”) and the applicant on behalf of himself and the respondent shall cause the proceeds of sale to be disbursed in the following manner:
(a) Payment of any real estate agent’s commission and auction expenses.
(b) Payment of legal costs of sale.
(c)Payment of any adjustment of any council and water rates as between the parties and the purchaser.
(d)Payment of the following liabilities:
(i)Body Corp services, strata levies of the property - $6,500.00.
(ii)Liquidation costs – J Company - $12,000.00.
(iii)Tax liability on superannuation distribution - $24,000.00.
(iv)Established tax liability under “[Amado] & Partners” - $25,000.00.
(v)Antic account fees V superannuation fund audit, advice on tax payable prior distribution of superannuation - $6,000.00.
(vi)PF, Solicitors re sale of property - $5,000.00.
(e)Payment to the respondent of an amount equal to 20% of the balance of the proceeds of sale.
(f)Retention by the applicant for his sole benefit the remainder of the balance of the proceeds of sale.
That on or before 11 May 2007 the respondent shall vacate the property leaving it in good order and condition and remain away from the property.
That the respondent is restrained from lodging any caveat to the title of the property or from communicating with the selling agent and lawyers who have the conduct of sale of the property other than for the purposes of obtaining information in relation to the dates of exchange of contracts and completion of a sale and particulars in relation to such matters.
That the applicant shall cause the respondent to be furnished with copies of the agreement for sale and settlement sheet for completion of such sale in relation to the property as soon as possible after such documentation becomes available to him.
That the applicant’s solicitors cause all monies held by them in their controlled monies account established on behalf of the parties or either of them to be applied in meeting any further tax liabilities arising out of the parties superannuation fund or in respect of the past positions held by the parties or either of them as a director of any of their commercial entities incorporated prior to the separation of the parties and the balance remaining (if any) shall be apportioned between the parties as to 80% in favour of the applicant and the remaining 20% in favour of the respondent.
Declare that subject to the Orders made this day each of the parties is the sole beneficial owner of all items of personalty in his or her possession power or control.
Spousal maintenance
That the application of the respondent for an order for spousal maintenance is dismissed.
Procedural
That all documents produced on subpoena may be returned to the person who produced the same.
That liberty to apply to seek orders in relation to the implementation of all or any of the Orders made this day upon seven (7) days written notice being given.
That the proceedings be removed from the Active Pending Cases List.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
File number: SYF5594 of 2003
| MR AMADO |
Applicant
And
| MS GOUGH |
Respondent
REASONS FOR JUDGMENT
Introduction
In these proceedings, Mr Amado (who for convenience I shall refer to as “the applicant” rather than “the husband” as referred to in affidavits and other relevant documents) seeks order for property settlement.
The respondent correctly points out that the parties are divorced and on that basis the terms “the husband” and “the wife” are objected to by her.
The respondent Ms Gough (who for convenience I shall refer to as “the respondent”) seeks orders for property settlement and spousal maintenance in accordance with her Response filed 24 October 2005. The orders sought by the respondent for spousal maintenance are as set out in a handwritten attachment to her Response.
Each party seeks orders for costs.
The parties cohabited for a period of approximately 30 years. Cohabitation commenced during 1972.
The parties married in December 1974. They separated in November 2002.
The marriage was dissolved by decree nisi made in January 2005 which became absolute in February 2005.
The applicant is 69 years of age. The applicant’s occupation is that of mechanical engineer.
The respondent is 55 years of age and is unemployed.
There is one child of the marriage, a daughter, who was born in October 1977.
Historical background
The following are further brief relevant historical matters.
In 1968 the applicant acquired company title of D (“the [D] Unit”). The husband’s company title was held as a consequence of his shareholding in R Pty Limited.
In October 1973 the husband purchased P (“the [P] property”) for about $35,500.00 which was fully financed using the D Unit as collateral.
In about 1974 the parties jointly acquired A in the State of Victoria (“the [A] property”) for about $65,000.00 which was fully financed.
In 1976 the husband sold the P property for $49,000.00 and the net proceeds of sale were utilised to reduce the mortgage loan on the A property.
In 1979 the parties sold the A property.
In 1979 the parties moved to Hong Kong.
In 1987 the parties returned to live in Australia.
In 1987 the parties purchased S (“the [S] property”) for about $135,000.00 which was fully financed. The D Unit was used as collateral security.
In 1990 G Pty Limited was incorporated. The parties were directors and shareholders.
In about 1992 the D Unit was sold according to the oral evidence of the applicant. The sale price was about $300,000.00 and the net proceeds of sale were about $150,000.00.
In 1992 the parties established “[V Company]” of which the respondent became the proprietor and leased business premises at O. Subsequently, there were changes of name of the business to “[E Company]” and then “[A Copmpany]”. The business activities were conducted by the respondent.
In 1992 the parties purchased H (“the [H] property”) for about $320,000.00. There is an absence of evidence as to the manner of funding the purchase price.
In 1995 there was a change of name of G Pty Limited to GC Pty Limited.
In 1995 the applicant purchased W (“the [W] property”) for $164,000.00. I accept the oral evidence of the applicant that the purchase price was funded by 10% deposit from available funds of the parties and the balance by way of finance borrowed.
In about 1996 the V business was sold. I accept the respondent’s evidence in her Affidavit filed 24 October 2005 that the sale occurred prior to the purchase of X (“the [X] property”).
In 1996 the parties purchased the X property for about $390,000.00. There is an absence of evidence as to the manner in which it was financed.
In 1996 the D Unit was sold. There is an absence of evidence of the gross and net proceeds of sale.
In 2000 the parties sold the H property for about $525,000.00. There is an absence of evidence of the net proceeds of sale.
In 2001 the parties purchased M (“the [M] property”) for about $370,000.00. It was financed by the net proceeds of sale of the SD property and a loan for the balance.
In 2001 the parties sold the SD property. The net proceeds of sale were about $300,000.00.
In 2002 GC Pty Limited changed its name to GP Pty Limited.
In 2002 the parties sold the S property for $207,000.00. There is an absence of evidence of the net proceeds of sale.
In 2002 the parties established GA company.
In 2002 Amado & Partners was incorporated. The parties were the directors and shareholders.
In 2002 the applicant sold W property for about $230,000.00. The net proceeds of sale were about $120,000.00.
In 2003 the parties purchased C property for about $425,000.00. It was fully financed and the M property was used as collateral security. It is now unencumbered as the mortgage was discharged from the sale proceeds of the M property.
On 18 December 2003, interim orders were made by consent restraining each of the parties from carrying any alterations to the structure of particular companies and carrying out certain business activities, as well as requiring them to carry out certain business and finance transactions. Those interim orders followed certain mutual undertakings that the parties gave on the previous day in relation to particular bank transactions in respect of ongoing business activities of certain companies.
In 2004 GP Pty Limited was placed in liquidation.
In 2004 the parties sold the M property for $825,000.00. The settlement sheet is annexure “M” to the Affidavit of the applicant filed 27 June 2006. It shows the net proceeds of sale as $86,553.97 excluding the deposit paid of $82,500.00. The parties each received half of the former and latter two amounts less, implicitly, agent’s commission.
In March 2005 the respondent commenced to reside in France.
In October 2005 the respondent returned to Australia.
On 12 December 2005, further interim orders were made by consent which in substance provided for the parties to forthwith give vacant possession of the C property; that each of the parties be restrained from entering the property other than with the written consent of the other party or for the purpose of giving effect to the orders; the parties be restrained from encumbering the property or disposing any interest in it. The parties were also ordered to do all things necessary to place the property on the market for sale and to sell it at the best price reasonably obtainable upon certain defined conditions and were required to cause the net proceeds of sale to be retained in a controlled monies account in the names of their respective solicitors in trust for the parties pending further order. The parties also authorised and directed the applicant’s lawyers to remit approximately $24,000.00 held by them to the controlled monies account for remission to the V Superannuation Fund upon certain conditions and the parties were restrained from dealing with that amount except to pay on their accountant’s advice amounts due to the Australian Taxation Office or other statutory authorities. Rent for the C property was required to be paid into the controlled monies account. An order was made pursuant to s 106A of the Act.
In February 2006 the respondent returned to France.
In August 2006 a Registrar of the Family Court of Australia signed the following documents on behalf of the wife pursuant to s 106A of the Act, namely:
(g) Sales inspection and agency agreement.
(h) Contract for sale prepared by PF, Solicitors.
(i) Authority to complete.
(j) Irrevocable authority and direction to pay.
(k) Withdrawal of caveat … .
(l) Standard costs agreement.
Relevant legal principles pursuant to the family law act 1975 as amended (“the act”)
It is now well established that generally speaking the approach to be taken to determination of property settlement proceedings, concluding with an order that is “just and equitable”, represents four steps.
The first of which is that the Court should determine the property and financial resources of the parties at the date of the hearing.
Secondly, determine the nature and extent of the respective contributions made by each of the parties whether financial or non financial, including contribution to the welfare of family in the role of home-maker and parent.
Thirdly, determine and assess the relevant matters pursuant to section 75(2).
Fourthly, consideration of orders, if any, that should be made that are just and equitable.[1]
[1] Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143
I will now proceed to make findings in relation to the property of the parties, their respective financial and non-financial contributions and relevant matters (if any) pursuant to section 75(2) of the Act. In addition, I will make findings in respect of the issue of “waste” raised by the applicant.
Property of the parties
At the commencement of the hearing, I directed that the parties prepare and tender a schedule of their property and liabilities.
Such a document was prepared by counsel for the applicant and it became Exhibit 1. Exhibit 1 was subsequently amended. The amended exhibit became Exhibit 1A. Exhibit 1A in turn was further amended. The further amended schedule of the parties’ “assets liabilities and resources at trial” was tendered at the conclusion of the evidence by counsel for the applicant, having given the respondent an opportunity to review it and have noted items in dispute. The respondent’s handwritten amendments appear on the document received as Exhibit 1B.
It is apparent from Exhibit 1B that the applicant purported to rely upon subpoenaed material. In response, and as I emphasised, especially to the respondent who was unrepresented throughout the hearing, I am only relying upon evidence and not documents which may have been subpoenaed but which were not adduced in evidence.
For ease of reference a copy of Exhibit 1B is annexed to the Reasons for Judgment.
Disputed items in exhibit 1b
I make the following findings in relation to the disputed items.
I will use the same description and designation given in Exhibit 1B.
Item 2 - RR, France (respondent)
The respondent is the sole registered proprietor of the property. Her evidence is that it was purchased in May 2005 for EU60,000-65,000 and significant renovations were undertaken.
The amount of EU65,000 was given by the respondent as her estimate of value in her Financial Statement sworn 15 November 2006.
The property was not disclosed by the respondent at all in the list of property contained in her Financial Statement sworn 18 July 2005 and 19 December 2005.
The applicant relies on the currency converted printout which gives the Australian currency equivalent of $107,000 reflecting the purchase price. There is an absence of expert evidence of current market value.
In the circumstances, I will attribute the purchase price as reflecting the current market value given that on face of it the property was purchased in an arms length transaction and there is no expert evidence that the current value is in fact less than the purchase price in May 2005.
Indeed, the respondent’s evidence is that she has carried out substantial renovations to the property subsequent to its purchase by her.
The respondent’s case is that the property was purchased by her post-separation of the parties and funded in least in part by money she received as a beneficiary of the estate of her late mother. Those are matters which relate to contributions. I will subsequently consider the evidence in that regard and set out my finding based on that evidence.
As I explained to the respondent on more than one occasion, it has long been established by the Court in its interpretation of the Act that in property settlement cases, I am required to make findings in respect of the property of the parties whether acquired prior or subsequent to their separation and regardless of the sources of funding of that property. The contributions that each party made to individual items of property is a separate matter for which I have made reference.
Accordingly, I find that this property has a value of no less than $107,000.
Item 4 - 800 Coles Myer shares (respondent)
On 2 February 2007 I was informed by the parties that they had agreed that these shares are owned by the respondent and have a value of approximately $9,300.00.
Item 5 - 2,500 MIM shares (respondent)
There is no issue that the parties have owned these shares.
The evidence of the applicant is that he did not sell or receive the proceeds of sale of the shares.
The evidence of the respondent is that the parties had sold the shares implicitly prior to their separation. There is an absence of documentation such as broker’s records or company records which may have provided objective and reliable evidence.
Neither of the parties’ evidence was shown to be unreliable.
In those circumstances and in the absence of the documents to which I have referred I am not satisfied on the balance of probabilities regarding the amount of the sale proceeds, let alone the manner in which they were applied, by either of the parties.
Item 6 - HSBC shares (applicant)
It is not disputed that these shares had been pooled in either the names of the parties or their individual names or by one of the relevant entities.
The evidence of the applicant is that he did not sell or receive the proceeds of the sale of the shares.
The respondent’s evidence is that the shares were sold in approximately 2000 or 2001 implicitly by the company that went into liquidation, being GP Limited.
The respondent’s evidence was that all company records were handed by the applicant to the liquidator.
In relation to this disputed item there is also an absence in the evidence of relevant documentation.
Neither party’s oral evidence was shown to be inconsistent or otherwise unreliable.
In those circumstances and having regard to the absence of documentary evidence, I am not satisfied on the balance of probabilities that either the shares are still held by the respondent or that the proceeds of sale were received by her and utilised for her personal benefit without any accounting to the applicant.
Item 7 – CBA shares (respondent)
The respondent’s evidence is that “we sold the shares” and that “we” used L Stockbrokers. No documents were tendered in evidence by the respondent in relation to the share sale.
Annexure “M” to the Affidavit of the applicant sworn 27 October 2006 refers to 1,000 CBA shares with an alleged value as at 3 December 1999 of $25,000.50. The applicant contends the shares were owned by V Company. He further states that he did not sell or receive proceeds of sale of the shares.
The statement of transactions of L Stockbrokers being part of Exhibit 7 refers to the sale on 5 April 2005 of 1,000 CBA shares resulting in net proceeds of $34,862.25. Implicitly, those shares so sold are the relevant disputed item in Exhibit 1B. There is an absence of evidence to the contrary.
I accept the evidence of the applicant that the 1,000 CBA shares were funded by monies generated during the period of cohabitation. Exhibit 7 reveals that payment was made to the respondent of all of the sale proceeds as part of the payment to her on 11 April 2005, an earlier payment on 8 April 2005 having been stopped.
Item 8 – NAB share sale proceeds of $78,525.00 (applicant)
The applicant’s case is that the parties through one or other of their commercial entities purchased 3,000 NAB shares and subsequent to separation those shares were sold by the respondent using the services of L Stockbrokers.
The applicant further contends that he did not receive any of the sale proceeds, the sale having been authorised by the respondent who received and retained all of the sale proceeds of $78,525.72.
The oral evidence of the respondent was that the shares were sold and that the applicant was paid $60,000.00.
The respondent’s further oral evidence was that L Stockbrokers did forward payments to her from time to time to her CBA account and funds from that account were subsequently transferred to her French bank account.
The respondent, during the course of her oral evidence, also stated that she did sell NAB shares in the name of GP Pty Limited such sale taking place in 2004.
The respondent contended that there “thousands of creditors” and that there were claims in the Consumer Claims Tribunal and ultimately it was her responsibility to pay.
The respondent conceded that the NAB shares were sold for $78,000.00 and that the stockbrokers provided to her the sale proceeds of her personal shares.
Exhibit 7 comprises records produced by L Stockbrokers. The documents to which I will make subsequent reference are included in Exhibit 7.
L Stockbrokers account agreement form reveals that an account was opened with that firm on 23 October 2002 in the names of the respondent with the designation of the account being “[GP] A/C”. The postal address given was W. That was a property at one time owned by the applicant from which business activities were conducted.
The L Stockbrokers statement of transactions (“the statement of transactions”) reveals that on 23 October 2002, 3,000 NAB shares were purchased for $100,268.46.
On 24 October 2002 a cheque for the last-mentioned amount is recorded as having been received from “[the parties]”.
On 30 July 2004 and subsequent to the separation of the parties, the respondent gave written instructions for the establishment of a nominee account into which shares being purchased by her that day in Bendigo Bank and HSBC would be placed “as I am leaving for overseas indefinitely”.
On 5 August 2004 the respondent provided “urgent” written instructions to L Stockbrokers authorising the sale of the 3,000 NAB shares. The respondent’s written instructions also stated “I hereby also confirm net sale price of shares at $78,525.72”. The respondent at the same time provided instructions for the cheque to be sent to her at the F property.
The statement of transactions shows that on 6 August 2004 the 3,000 NAB shares were sold for $78,525.72.
On 11 August 2004, a cheque for $78,525.72 was sent to the respondent.
On 1 October 2004 two parcels of shares were purchased in the respondent’s name being 2,700 BHP shares and 4,000 Bendigo Bank shares for the purchase prices of $39,039.54 and $39,053.62 respectively. Those purchases totalled $78,093.16.
It is apparent from the statement of transactions that on 14 October 2004 the cheque previously sent to the respondent for $78,525.72 was stopped. On the same day a “contra settlement” was entered to enable the purchase price to be met for the 2,700 HSBC shares and 4,000 Bendigo Bank shares resulting in a credit to the wife in her account of $432.56.
The tax invoices in relation to the sale of the 3,000 NAB shares and purchases of the HSBC and Bendigo Bank shares are all made out to the respondent at her address in France.
The tracing of the purchase of the 3,000 NAB shares, their subsequent sale and the utilisation of the sale proceeds for the purchase by the respondent in her sole name of 2,700 HSBC shares and 4,000 Bendigo Bank shares lead me to find that the sale proceeds of the 3,000 NAB shares for $78,525.72 were utilised solely for her benefit and without any distribution of any part of the sale proceeds to the applicant or accounting to him in that regard.
On 31 March 2005 the 2,700 HSBC shares were sold by the respondent for $48,117.89. The amount so received together with an amount of $760.00 held to the credit of the respondent was paid on 5 April 2005 to her by cheque for $48,877.89. The tax invoice was made out to the respondent at her address in France.
On 1 April 2005 being the day following the sale on behalf of the respondent of the 2,700 HSBC shares, to which I have made previous reference, the respondent had written instructions to L Stockbrokers in relation to her new address in France and that documentation should record her change of name from “[her married name] to [her maiden name]”.
On 5 April 2005, 1,000 CBA shares were sold on behalf of the respondent for $34,862.25.
On 11 April 2005 the two cheques payable to the respondent of $48,877.89 and $34,862.25 to which I have referred, representing the sales of HSBC and CBA shares were stopped.
However, on the same day, namely 11 April 2005 the statement of transactions records an electronic transfer of $83,740.14 being the total of the two cheques previously stopped. The transfer is to a CBA account (…). That was the account of the respondent as demonstrated by Exhibit 8 which reveals her account receiving that amount from L Stockbrokers.
The 4,000 Bendigo Bank shares previously purchased for the respondent by L Stockbrokers on 1 October 2004, to which earlier reference has been made, are shown on the statement of transactions as having been sold on 31 October 2005 for $45,025.45.
The sale proceeds of the 4,000 Bendigo Bank shares were utilised by the purchase on the same day, namely 31 October 2005 of 1,900 ANZ shares in the respondent’s name for $44,903.42.
On 28 July 2006 the 1,900 ANZ shares were sold for the respondent for $47,616.39.
On 2 August 2006 the sale proceeds of the 1,900 ANZ shares together with the sale proceeds of other shares to which I will subsequently refer was transferred to the respondent’s CBA account earlier identified.
I accept the evidence contained in Exhibit 7. It clearly shows that the respondent utilised the sale proceeds of the 3,000 NAB shares which produced $78,525.72 in the subsequent purchase in her sole name of 2,700 HSBC shares and 4,000 Bendigo Bank shares, the latest sales of which produced the funds which ultimately were transferred to the respondent by deposits to her CBA bank account (Exhibit 8) including the subsequent purchase and sale of the 1,900 ANZ shares which were the product of the sale of the 4,000 Bendigo Bank shares.
Nowhere in the respondent’s affidavit or oral evidence did she provide any accounting or detail of the utilisation of the proceeds of sale of shares which I previously analysed in payment of the “thousands of creditors” or any of them referred to by the respondent in her oral evidence.
The respondent did not produce any of her banking records in relation to her French bank account which she stated received transfer of funds from her CBA account. The respondent stated that she had left her banking records in France.
Item 9 – share proceeds - various (respondent)
The applicant contends that subsequent to the separation of the parties the respondent instructed L Stockbrokers to sell shares resulting in proceeds of sale of approximately $200,000.00 which was then transferred to the respondent and retained by her for her own purposes.
Implicit in the applicant’s case is that the shares so sold were initially funded by money generated by the parties from joint endeavours.
The respondent’s case is that there were indeed shares sold by L Stockbrokers after the separation of the parties being shares purchased by her in the post-separation period funded solely by a distribution she received as a beneficiary in the estate of her late mother being the estate of Mrs Gough deceased.
There does not appear to be any dispute on the evidence that the respondent did receive approximately $200,000.00 from L Stockbrokers from the sale of shares which were paid to the respondent in August 2006.
My analysis of the objective evidence represented by Exhibits 7, 8 and 10 lead me to conclude that the respondent’s case on this issue is established for the following reasons.
Exhibit 10 includes a copy of the grant of probate of the Will of the respondent’s mother dated 9 April 2001. The date of death was in March 2004. The date of grant of probate was in June 2004. The trustees at all relevant times have been Mr F, Accountant and Mr M, Solicitor.
The respondent received specific bequests and otherwise is a beneficiary of the residuary estate as to a two-tenths share. The respondent is also a beneficiary for the same proportion of a share portfolio required to be held by the trustees for a period of 10 years from the date of death. The trustees are directed to sell the shares at the expiration of that period and the proceeds distributed to all beneficiaries in accordance with their interests specified in the Will which includes the respondent’s proportion of a two-tenths share.
Exhibit 10 reveals that on 9 February 2005 the trustees made a distribution to the respondent of a cheque for $170,500.08.
Exhibit 8 shows that the amount of $170,500.08 was deposited into the respondent’s CBA account.
Exhibits 8 and 7 demonstrate that on 3 March 2005 the respondent transferred $150,000.00 to L Stockbrokers received by them on the same day.
It is clear from the statement of transactions being part of Exhibit 7, that the receipt by L Stockbrokers of $150,000.00 from the respondent funded the purchase on 28 February 2005 of 6,090 SGB shares at a cost of $149,872.09.
The statement of transactions reveals that on 28 July 2006, L Stockbrokers sold the 6,090 ES shares to which I have referred for $172,314.28 which then remained a credit balance in the respondent’s account.
A further sale of shares took place on 28 July 2006, namely the sale of 1,900 ANZ shares to which earlier reference has been made resulting in further sale proceeds of $47,616.39 also credited to the respondent’s account.
The total of the sale proceeds of shares realised from the sale of the 6,090 ES shares and 1,900 ANZ shares amounted to $219,930.67 which was the credit balance in the respondent’s account as at 28 July 2006. That appears from the statement of transactions.
On 2 August 2006 the amount of $219,930.67 was transferred by L Stockbrokers to the respondent’s CBA account leaving a nil balance in her account with L Stockbrokers as is shown in the statement of transactions.
Exhibit 8 reveals that on 2 August 2006 the respondent did receive a deposit in her CBA account of $219,930.67. Fifteen days later, namely 17 August 2006 the amount of $210,166.47 was withdrawn by the respondent. That is clear from Exhibit 8.
I accept the oral evidence of the respondent that the amount withdrawn of $210,166.47 from her CBA account was transferred by her to her French bank account.
The respondent’s further oral evidence was that the amount last referred to was spent by her on legal and travel expenses, support for herself and payment of debts.
As a result of my findings based on the analysis of Exhibits 7, 8 and 10 which is consistent with the oral evidence of the respondent, except for the history of the funding and subsequent sale of the 1,900 ANZ shares leads me to conclude that the purchase of her 6,090 SGB shares were funded solely by a distribution she received from the estate of her late mother and that the sale proceeds of $172,314.28 received by her will not be included as part of the respondent’s notional property for the purpose of my ultimate findings as to the property of the parties which is potentially available for division between them. Rather, I will consider the manner in which those funds should be treated for the purpose of the orders for property settlement which will be made by me.
However, the sale proceeds of the 1,900 ANZ shares which produced $47,616.39 will not be included as notional property of the respondent for the purpose of calculation of the net property of the parties available for division between them having regard to my findings which trace the history of the purchase of those shares to the sale of shares previously acquired prior to the separation of the parties. By not taking into account the sale of the ANZ shares as possible notional property of the respondent, I am avoiding “double counting”.
Item 10 – proceeds of sale of V Company (respondent)
It is agreed that the V business was sold in the late 1990s for $40,000.00 which was received by the respondent.
The respondent’s evidence is that the amount of $40,000.00 to which I have referred was contributed to the V superannuation fund.
The respondent stated that the applicant became a member and trustee implicitly with her in about 2000.
Item 11 – St George Bank account of $120.00 (applicant)
The evidence of the applicant, which I accept, is that this amount represents post-separation funds. There being no evidence to the contrary, I accept the applicant’s evidence. Therefore, I will not include it in the calculation of the net property of the parties, although I will refer to it as part of the applicant’s property.
Item 12 – CBA account of $27,494.00 (respondent)
In his written submissions (Exhibit 15), counsel for the applicant correctly submits that as at 17 July 2006 the respondent had a credit balance of $27,494.00. That is clear from Exhibit 8.
However, Exhibit 8 also includes copies of the CBA bank statements subsequent to 17 July 2006. They reveal the most significant deposit as being $219,930.67 on 2 August 2006 from L Stockbrokers to which earlier reference has been made.
The last bank statement in evidence in relation to the CBA account shows that there was a credit balance of $1,227.89 as at 15 November 2006.
The respondent’s Financial Statement sworn 15 November 2006 states that the CBA account had a balance estimated at $500.00. That amount is obviously inconsistent with the bank statement for the same date being part of the documents included in Exhibit 8.
It is clear from Exhibits 7 and 8 that the respondent received funds from sources such as sale of shares, rent from the C property and the estate of her late mother.
Exhibit 10 shows that apart from the distribution to the respondent from the estate of her late mother of $170,500.08, to which earlier reference has been made, the respondent also received distributions of $8,023.69 and $6,925.73 on 23 September 2005 and 2 June 2006 respectively. The bank statements in Exhibit 8 do not cover those particular dates.
I have been greatly handicapped in tracing the movement of funds, the subject of controversy in the proceedings, due to the lack of complete documentation in the evidence, the absence of precision in the evidence of the parties, and the absence of a report from an investigative accountant. The latter would have been very helpful and could have saved a considerable amount of time for the parties in relation to the periods they may have spent as well as the applicant’s legal representatives in perusing and endeavouring to present a clear picture of the financial matters in controversy.
Quite possibly, the costs that might have been associated with the retention of an investigative accountant, even perhaps as a single expert, could have been an inhibiting factor so far as the retention of such an expert is concerned.
I should add that my difficulties would have been even greater had it not been for the helpful written submissions of counsel for the applicant, being Exhibit 15.
As I cannot be satisfied on the balance of probabilities regarding the precise source of all deposits which actually produced the result and balance of $1,227.89 in the respondent’s CBA account, I will include it as part of the net property of the parties for consideration so far as division is concerned. At least some deposits were rent from the C property.
Item 13 – ANZ bank account of $1,200.00 (applicant)
Despite the respondent’s contention that the amount should be $33,000.00, there is no evidence to support that figure as opposed to the applicant’s estimate given in his Financial Statement sworn 27 October 2006 of $1,200.00.
Item 14 – ANZ term deposit of $52,787.00 (applicant)
There is no controversy on the evidence as opposed to the respondent’s contentions that this amount represents the respondent’s distribution from the V superannuation fund from which each of the parties received $60,000.00.
I accept the submissions made on behalf of the applicant that it will not be included as part of the calculation of the net property of the parties as the amount of $60,000.00 which the respondent also received is not taken into account.
I have not included various property of the parties for the purpose of calculation of their net property available for division between them, nor certain liabilities as described in Exhibits 1B and 15. The reasons are set out in the following paragraphs.
Property that I have excluded for that purpose includes:
(a) the respondent’s French property;
(b) Painting from mother’s estate;
(c) share proceeds (various) attributed to the respondent;
(d) V business (respondent);
(e) St George Bank account (applicant);
(f) ANZ Bank account (applicant);
(g) ANZ term deposit (applicant);
(h) 2002 Mercedes Benz (respondent);
(i) household contents (applicant);
(j) V Superannuation Fund payment (applicant/respondent);
(k) rent from tenant at C property (respondent);
(l) proceeds of M property - F (applicant/respondent);
(m) “[W] monies” (respondent);
(n) notional half CN fees paid by applicant (applicant);
(o) notional half CF fees paid by applicant (applicant);
(p) notional half council rates paid by applicant (applicant).
The reasons for not including the property described in the preceding paragraph is that certain property such as:
(a)the respondent’s French property, a Painting, and share proceeds (the subject of earlier findings) represented the sole contributions of the respondent due to funds that she received from her late mother’s estate,
(b)whilst other property described did not have any nexus with the marriage in that it came from:
(i)post-separation earnings, or
(ii)was property which the parties equally shared, or
(iii)there was a lack of evidence of market value on a resale basis such as the 2002 Mercedes Benz, or
(iv)payments of joint debts made by the applicant will be taken into account for the purpose of the orders that will be made.
To that extent it represents property to be separately taken into consideration.
Similarly, I have not included certain liabilities referred to in Exhibits 1B and 15. They include:
(a) Amex, Mastercard and ANZ Visa card (applicant);
(b) CBA Mastercard (respondent);
(c) Flexirent laptop (applicant); and
(d) CN legal fees (applicant).
Those liabilities have not been included in the calculation of the parties’ net property either due to the liabilities having arisen in circumstances that were post-separation and do not have any nexus to the marriage or that the asset represented by the laptop has been excluded and consequently the liability should also be excluded and the CN legal fees of the applicant should be excluded as to do otherwise would mean that the respondent indirectly bears a proportion of them.[2]
[2] Farnell and Farnell (1996) FLC 92-681, reviewed in NHC v RCH (2005) 32 FamLR 518
Despite the exclusion of certain property and liabilities as described by me, I will nonetheless take that property and liabilities into account pursuant to s 75(2)(b) and in determining orders for property settlement that I am required to make which are just and equitable.
Property of the parties
The net property of the parties, for the purpose of possible division between them, pursuant to orders that I may make and excluding other property which I am required to take into account pursuant to s 75(2) as subsequently referred to, is as follows.
For the purpose of setting out that property of the parties, it reflects Exhibit 1B and my findings earlier made with regard to controversial items in Exhibit 1B.
Item A/R(2) Liability Asset Assets Unit – C A/R $450,000.00 Telstra shares (500) R (3)2,328.00 Coles Myer shares (800) R 9,300.00
34,862.25CBA shares NAB shares sale proceeds R 78,525.00 CBA savings account R 1,227.89 HSBC Hong Kong account A 587.00 CN Trust Account A 24,179.00 1997 Ford Falcon Ute motor vehicle A 1,500.00 1995 Jeep Cherokee motor vehicle A 6,000.00 1987 Toyota motor vehicle A 1,000.00 Household contents R 30,000.00 Personal apparel and used furniture R 5,000.00 U painting 5,000.00 Liabilities Body Corp services, strata levies of Unit – C A/R 6,500.00 Liquidation costs – J Company A/R 12,000.00 Tax liability on superannuation distribution A/R 24,000.00 Established tax liability under “[Amado] & Partners” A/R 25,000.00 Antic account fees V superannuation fund audit, advice on tax payable prior distribution of superannuation A/R 6,000.00 PF, Solicitors re sale of C Unit A/R 5,000.00 $78,500.00 $649,509.14 Net property of the parties $571,009.14 (2) A – applicant; R - respondent (3) Exhibit 1B – amount given by respondent in her handwriting
Contributions of the parties
At the commencement of the hearing, counsel for the applicant informed me that his client’s case was that the parties’ contributions to their net property should be assessed in the proportions of 55% to the applicant and the remaining 45% in favour of the respondent.
Implicitly, that net property excluded property the parties acquired subsequent to their separation from their own separate endeavours. In that regard, there were a number of grey areas which were to be the subject of further evidence and ultimately submissions such as funds received by the respondent by her late mother’s estate.
During the course of the hearing, counsel for the applicant informed me that there was a change in his client’s position so far as the apportionment of contributions was concerned and that his client’s case now was that contributions of the parties should be assessed as being equal.
There was no opposition to that approach by the respondent.
The parties initial financial contributions included, so far as the applicant is concerned, his company title to the D Property and personal effects. The applicant could not recall if he had a motor vehicle. There was an absence of evidence of the applicant’s equity in the D Unit.
The respondent’s initial financial contributions appear to have been negligible having regard to the applicant’s affidavit evidence. No evidence in that regard was given by the respondent.
The parties cohabited for a period of approximately 30 years.
The parties had one child.
There is no controversy on the evidence that each of them was engaged in income earning endeavours whether as an employee or otherwise self-employed, at times by use of one or other of their corporate entities.
The parties also engaged in a number of real estate transactions for private and commercial purposes at times not always in joint names. However, there is no doubt that each was aware of the real estate transactions involved and was supportive of them on the basis that the real estate so acquired and subsequently sold was for their mutual benefit.
Each of the parties applied their respective income and available funds to meeting living expenses and liabilities. Each of the parties also made a contribution to the welfare of the family in the role of homemaker and parent as described by the applicant in his Affidavit filed 27 June 2006. I accept the applicant’s evidence, which was not the subject of challenge.
Accordingly, my independent review of the financial and non-financial contributions made by each of the parties including contributions to the welfare of the family in the role of homemaker and parent and my findings in that regard lead me to conclude that it is proper for their contributions to be assessed as being equal.
Relevant matters pursuant to section 75(2)
I make the following findings in relation to relevant matters pursuant to the provisions of s 75(2).
The applicant and respondent are 69 and 55 years of age respectively.
The applicant had serious health issues as shortly prior to separation he was treated for cancer. As there is an absence of expert evidence as to his current state of health, I infer that his health is now sound.
There was no evidence given by the respondent or any expert evidence on her behalf to suggest that she currently has health issues. Consequently, I also infer that her health is sound.
The applicant’s income is set out in his Financial Statement sworn 27 October 2006 revealing an average weekly amount of $1,400.00 gross. I accept his evidence and make findings accordingly.
The applicant has the property described in paragraph 159 together with other property described in Exhibits 1B and 15. He does not have any other financial resources.
The applicant has the physical and mental capacity for appropriate gainful employment in his current employment as an engineer. He has the formal qualifications and many years experience in utilising that qualification. There are obvious limitations in relation to exercising that capacity having regard to his age.
The income of the respondent is as set forth in her Financial Statement sworn 15 November 2006 amounting to $480.00 per week gross. The sources of that income are distributions from “family estate” of $340.00 per week and rent from the C property of $140.00 per week.
The respondent has property described in paragraph 159 and in addition referred to in Exhibits 1B and 15. In particular, that includes her French property which is her residence.
The respondent also has property which may be conveniently described as a financial resource as she has an interest as beneficiary in the proportion of two-tenths of the shareholding in the estate of her late mother. I find that in accordance with Exhibit 15 the total value of those shares as at 1 February 2007 was $4,224,384.00 which would result in the result in the respondent’s 20% as having a value of $844,876.80. However, her interest will not be able to be realised until after 31 March 2014 to which earlier reference has been made.
Unfortunately, I am not in a position to be satisfied on the balance of probabilities that the respondent has given evidence of all of her income and property as she has failed to make a full and frank financial disclosure.
The need for parties to make such a disclosure has been well established as a matter of law for many years in relation to both property settlement and spousal maintenance proceedings emphasised even further by the Family Law Rules.[3]
[3] Black and Kellner (1992) FLC 92-287
In that regard, the respondent in her Affidavit sworn in France on 15 November 2006 being part of her Financial Statement of that date and filed 21 November 2006 acknowledged her obligation to make a full and frank financial disclosure of her financial circumstances to both the Court and the other party.
Exhibit 13 contains the respondent’s two earlier Financial Statements sworn 18 July 2005 and 19 December 2005. The respondent also swore an affidavit to each of those financial statements acknowledging her obligation to make a full and frank financial disclosure. Those financial statements do not contain a disclosure of her interest in her French property notwithstanding that she had an interest in it pursuant to a contract for sale by the time those affidavits were sworn.
Belatedly, the respondent’s interest in the French property was described in her Financial Statement sworn 15 November 2006. However, the latter financial statement does not contain any reference to her French bank account. The respondent also did not provide any particulars of it either from the Bar table or during the course of her oral evidence and claimed that her bank statements in relation to that account had been left behind by her in France.
The relevance of the respondent’s French bank account became even more significant once it became clear that the respondent had transferred funds of approximately $219,000.00 from her CBA account to that French bank account. Quite clearly, on the evidence before me the French bank account at one time held substantial amounts of money.
Ironically, the respondent was keen to criticise the applicant in relation to tracing monies at his disposal and the use of it but applied a different standard so far as she was concerned.
The parties commitments necessary to support themselves are set out in their respective financial statements.
Neither of the parties has superannuation entitlements.
A further relevant matter is that on 25 October 2004 the applicant signed an acknowledgment in writing that provided for the net proceeds of sale of the M and C properties to be divided equally between the parties. The applicant also acknowledged that the parties had agreed that there would not be any further claim against the other “in respect of any property, business or financial matters which may be entered into after today”.
The relevant document (“the 25 October 2004 agreement”) is “annexure A” to the Affidavit of the respondent sworn 24 October 2005. The respondent places much weight on that document and contended that her legal advice was that the document in effect was a binding agreement which must produce the result in terms of these proceedings that the net proceeds of sale of the C property are divided between the parties equally.
It is clear that the 25 October 2004 agreement is not a Financial Agreement within the meaning of the Act. It is not binding on the parties and does not oust the Court’s jurisdiction to make orders for property settlement pursuant to s 79.
I explained the legal effect of the 25 October 2004 agreement to the respondent on a number of occasions and I am satisfied that she understood the explanation on each of those occasions, although was not prepared to accept the effect of it.
I have concluded that the 25 October 2004 agreement is relevant on an historical basis as representing an agreement between the parties in relation to the dispersal of the net proceeds of sale of the C property. To that extent, it is similar to other non-binding agreements in relation to financial matters that parties to property settlement proceedings have entered into.[4] It is a question of the weight that should be given to that agreement.
[4] Dupont and Dupont (No. 3) (1981) FLC 91-103
I attach little weight to the 25 October 2004 agreement as the parties’ financial situation was in a state of flux with significant actual or potential liabilities to which no reference was made in the document itself. It seems remarkable that at the date of the 25 October 2004 agreement there is a statement by the draftsperson from C F Davies & Co., Solicitors that “we are not acting for either party on family law property settlement matters”, and yet other evidence before me demonstrates that a solicitor from that firm did in fact act for or gave legal advice to the respondent, albeit perhaps after 25 October 2004.
Further relevant matters are the payment by the applicant of CN fees of $16,380.00 in relation to GP Limited; payment by applicant of CF fees of $14,786.00; and C council rates of $1,734.00 also paid by him subsequent to separation.
Conclusion
I have determined that property settlement orders will be made in accordance with s 79 which provide for the net proceeds of sale of the C property arrived at after payment of the outstanding liabilities set out in paragraph 159 and further costs of sale to be apportioned between the parties as to 80% in favour of the applicant and the remaining 20% in favour of the respondent for the following reasons.
The parties had a lengthy period of cohabitation of some 30 years. They have one adult child.
I found that their contributions are assessed as equal.
On the evidence before me, and the findings I have made, the respondent is in a vastly superior financial position to the applicant.
The applicant lives in rented premises with modest property. He has a potentially superior income earning capacity but the exercise of that capacity is clearly limited as he is 69 years of age.
In contrast, the respondent owns her own home in France which is unencumbered. In addition, the respondent received $219,930.67 in recent times, namely 2 August 2006 (the subject of earlier findings). No evidence was given by the respondent which satisfactorily explained the application and use of those funds.
In addition, the respondent has received a total of $125,015.00 being the whole of proceeds of sale or the value of currently held publicly listed shares. Those shares include Telstra ($2,328.00); Coles Myer ($9,300.00); CBA ($34,862.25); and NAB ($78,525.00).
No satisfactory evidence has been given by the respondent which demonstrates the application and use of the proceeds of sale of such of those shares that have been sold.
In addition, the respondent has a substantial financial resource represented by her 20% interest in the shareholding in her late mother’s estate, albeit that it will not be available to her for several years.
The respondent has had the sole benefit of the use and sale proceeds of the 2002 Mercedes Benz sedan, rent received from the tenant of the C property and without having to meet a proportion of the rates paid by the applicant in relation to that property.
Last but far from least, I have made findings regarding the respondent’s failure to make a full and frank financial disclosure of her financial circumstances. To that extent, the respondent has been the architect of her own fortune.
It is impossible in those circumstances for me to be satisfied on the balance of probabilities of the real nature and extent of the respondent’s property.[5]
[5] Black and Kellner, ibid
I have not given weight to the payment by the applicant of liabilities to CN and CF as the limitations of the evidence are such that it is not clear to me that funding for that purpose came from sources other than from the realisation of assets which had been generated by the endeavours of the parties during cohabitation and to a limited extent thereafter.
I have also not given weight to the 25 October 2004 agreement, the subject of earlier findings, as on the evidence before me the applicant did not receive independent legal advice nor did the agreement refer to the nature and extent of the parties real and prospective liabilities or the manner in which those liabilities was to be satisfied by the parties.
There is a current interim order which provides for the parties to join in the sale of the C property. I will not discharge that order. I will make orders that provides for the proceeds of sale of the C property to be applied in meeting of selling costs and the outstanding liabilities of the parties actual and notional as referred to in paragraph 159 which clearly must be met.
Orders have been made which provide for sale documents to be signed by a Registrar of the Family Court of Australia on behalf of the respondent, to which earlier reference has been made. Those orders also remain current. There is no need for me to make orders which duplicate current orders.
There is an abundance of evidence of the disruptive conduct by the respondent, so far as the sale of the C property is concerned, including but not limited to the lodgement of caveats which do not reveal a caveatable interest and distracting correspondence sent to the solicitors retained in relation to the sale of the property. I accept that evidence and will make orders which restrain the respondent from conducting herself in that manner.
I will also make an order for the respondent to vacate the C property and remain away from it to enable completion of a sale with vacant possession to take place.
In the event there are further difficulties in respect of the sale of the C property then liberty will be granted to enable both or either of the parties to make application for appropriate orders upon seven (7) days written notice being given.
Spousal maintenance
By her Response filed 24 October 2005, the respondent sought maintenance on several bases including but not limited to “30 years maintenance 1974-2004 years of marriage”. Reference was also made by the respondent to half of a superannuation policy; life insurance; costs of travel, amongst other things.
Although an order was not sought with the precision required by the Rules, it is clear the respondent was seeking a lump sum payment reflecting the various matters to which I have referred.
The Court has a discretionary power to make an order for spousal maintenance against a party to a marriage for the maintenance of the other party:
“to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity to appropriate gainful employment; or
(c)for any other adequate reason having regard to any relevant matter referred to in sub-section 75(2).” (emphasis added)
I am not satisfied that the respondent has established the threshold basis for an order being possibly made in her favour in terms of whether or not she is unable to support herself adequately. My reasons are as follows.
As with any other litigant in maintenance proceedings, the respondent has an obligation to make full and frank financial disclosure. I have found that the respondent has failed to do so. I refer to and rely upon my earlier finding and the reasons for it in this regard.
Amongst other things, the respondent has failed to adduce evidence of her French bank account and the utilisation of approximately $219,000.00 which was transferred by her from her CBA account to the French bank account. The rolled-up explanation for the manner in which that sum was applied without any detail or corroboration is simply unsatisfactory.
As a consequence, I am not in a position to make any findings as to the full nature and extent of the respondent’s financial circumstances.
Accordingly, the respondent’s application for spousal maintenance will be dismissed.
I certify that the preceding two hundred and twenty four (224) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose
Associate:
Dated: 4 May 2007
Key Legal Topics
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Procedural Fairness
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Statutory Construction
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Standing
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