ATWAL & DANI
[2020] FCCA 1106
•8 May 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ATWAL & DANI | [2020] FCCA 1106 |
| Catchwords: FAMILY LAW – Property proceedings– whether amounts advanced to the parties constituted gifts or loans – whether amounts advanced to the wife post separation constitute loans such that should be included in the matrimonial asset pool – whether one party owns property or assets in India – dispute as to the financial contributions of the parties – what adjustment should be awarded relative to the factors contained in section 75(2) of the Family Law Act 1975. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79 |
| Cases cited: Bevan v Bevan (2013) 279 FLR 1 |
Other sources:
Pannam, Clifford, The Law of Money Lenders in Australia and New Zealand (Sydney Law Book Co., 1965)
| Applicant: | MR ATWAL |
| Respondent: | MS DANI |
| File Number: | MLC 2261 of 2019 |
| Judgment of: | Judge Blake |
| Hearing date: | 21 February 2020 |
| Date of Last Submission: | 14 March 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 8 May 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Kiernan |
| Solicitors for the Applicant: | RRR Lawyers |
| Counsel for the Respondent: | Mr Richardson |
| Solicitors for the Respondent: | Vernon Da Gama and Associates |
ORDERS
The matrimonial asset pool be divided so as to effect a split of 53% to the Husband and 47% to the Wife, comprising the following:
(a)To the Husband:
(i) $58,274.09, being the proceeds of sale of the former matrimonial home;
(ii)$2,356, being the Motor Vehicle 1, valued at $15,500, less the associated loan of $13,144;
(iii) $400 being the value of the Husband’s shares in a Mutual Fund in India; and
(iv) $12,554 being the Husband’s superannuation.
(b)To the Wife:
(i) $56,253.81 being the proceeds of sale of the former matrimonial home; and
(ii) $9,000 being the Wife’s superannuation.
Within 14 days of the date of this order, the parties do all things necessary to cause the amount of $114,527.90, being the proceeds of sale of the former matrimonial home, held in the trust account of RRR lawyers to be distributed as follows:
(a)$58,274.09 to the Husband; and
(b)$56,253.81 to the Wife.
Within 30 from the date of this order each party shall do all things necessary to transfer to the sole name of the Husband the Motor Vehicle 1, at the cost of the Husband, and the Husband hereby indemnifies, and shall keep indemnified, the Wife in relation to all liabilities in respect of the motor vehicle whenever and however arising.
Pursuant to section 78 of the Family Law Act, each of the husband and the wife shall be and hereby are declared to be the sole and absolute owners at law and in equity of:
(a)all items of furniture, furnishings, personalty, chattels and jewellery;
(b)all monies (whether held in cash or in deposit with any financial institution);
(c)any motor vehicle;
(d)all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant;
in the possession, custody or control or each or in which either has an interest which are not otherwise dealt with in these orders.
Unless otherwise provided for in these orders, the Husband be entitled to be the sole legal and beneficial owner of all items of property including real property, money, motor vehicles, insurances, equities, superannuation entitlements and personal effects in his name, possession or control.
Unless otherwise provided for in these orders, the Wife be entitled to be the sole legal and beneficial owner of all items of property including real property, money, motor vehicles, insurances, equities, superannuation entitlements and personal effects in her name, possession or control.
The Husband indemnify the Wife in respect of all liabilities in his sole name or jointly with any other person, including but not limited to any credit card debt in his sole name or jointly with another person, and any loan or debt to any financial institution or other person in his sole name or jointly with another person.
The Wife indemnify the Husband in respect of all liabilities in her sole name or jointly with any other person, including but not limited to any credit card debt in her sole name or jointly with another person, and any loan or debt to any financial institution or other person in her sole name or jointly with another person.
IT IS NOTED that publication of this judgment under the pseudonym Atwal & Dani is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 2261 of 2019
| MR ATWAL |
Applicant
And
| MS DANI |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application filed by the Husband on 4 March 2019 for a just and equitable division of property.
For the reasons that follow, I have decided that the asset pool be divided 53% to the Husband and 47% to the Wife, comprising as follows:
a)the Husband retain the Motor Vehicle 1 and the loan attached to it;
b)each party retain their respective superannuation balance;
c)the Husband retain his shares in the Mutual Fund in India; and
d)the balance of the asset pool, being the funds from the sale of the Property, be distributed $58,274.09 to the Husband and $56,253.81 to the wife.
Principal issues in Dispute
The principal issues in dispute between the parties are set out below.
In respect of the composition of the asset pool:
a)whether amounts of money advanced by Mr Atwal, the Husband’s father, to the couple were loans or gifts;
b)whether the following amounts advanced to the Wife post separation are loans to her and should be included in the asset pool as a liability:
i)$3,774.80 from Mr B;
ii)$3,800 from Mr C;
iii)$1,500 from Mr D;
iv)$2,500 from Ms E; and
v)$6,600 from Vernon Da Gama and Associates;
c)whether the Husband owns land in India, and if so, what value is attributable to it;
d)whether the Husband holds funds in deposits and bank accounts in India and if so, what the value of those amounts are; and
e)whether the parties own jewellery, the location of the jewellery and its value.
The financial contribution of each of the parties to the marriage.
The non-financial contributions of each of the parties to the marriage.
What adjustment should be made in respect of any factors set out in section 75(2) of the Family Law Act 1975 (‘Act’).
Background
The Husband and the Wife are both 39 years of age. The parties married in India in 2007.
In 2011, the parties moved to Country A to live.
In 2012, the parties returned to India.
In 2013, the parties migrated to Australia. They initially lived in Sydney.
In around 2014, the parties received from Mr B an amount of $50,000. A number of payments made by Mr B to the couple followed.
In late 2015/early 2016, the Wife commenced IVF treatment.
In 2016, the parties purchased Motor Vehicle 1, obtaining a loan from F to do so.
In 2016, the parties purchased land at Suburb G in Victoria on which they planned to construct their marital home (‘Property’).
In 2016, the Wife became pregnant. In around 2017, the Wife ceased employment.
The construction of the marital home was completed on the Property in around 2017.
In 2017, the parties’ child, X, was born. Regrettably, X passed away in 2017.
In 2017, the Wife travelled to India to reside with her parents.
In around April/May 2018, the parties separated.
In mid-2018, the Wife commenced proceedings against the Husband in India that related to, among other things, allegations of family violence perpetrated by the Husband against the Wife.
On 31 January 2020, the parties successfully completed the sale of the Property. The net proceeds available to the parties after the sale are $114,527.90.
Evidence
The Husband relied upon his trial affidavit filed on 31 January 2020 and his Financial Statement filed on 4 March 2019. He also relied upon the affidavit of his father, Mr B, sworn on 31 January 2020.
The Wife relied upon her trial affidavit affirmed on 8 February 2020 and her Financial Statement filed on 21 May 2019. Further, eight exhibits were tendered into evidence during the hearing.
The parties each filed closing written submissions, and in the Husband’s case, submissions in reply, which have also been taken into account. The submissions in Reply went beyond matters that might be strictly regarded as being in reply. To the extent they do so, I have disregarded those submissions.
Relevant Principles
The provision of key relevance when assessing an alteration of property interests is section 79 of the Act. Section 79(1) of the Act empowers the Court to make such orders as it considers appropriate in altering the interests of the parties to the marriage.
The power of the Court under section 79(1) is a power to be exercised having regard to the subsections that follow. Of primary importance is what is set out in section 79(2). Section 79(2) provides as follows.
‘The Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.’
Section 79(4) requires the Court, ‘in considering what order (if any) should be made under this section in property settlement proceedings’ to take account of the various factors set out in subsections (a) to (g) of section 79(4). One of the factors set out in section 79(4) is subsection (e) which requires the Court to take into account, so far as they are relevant, the matters referred to in section 75(2) of the Act.
The provisions set out above have been the subject of extensive consideration by both the High Court of Australia and also by the Full Court of the Family Court of Australia.
In Stanford v Stanford (2012) 247 CLR 108 (‘Stanford’), the High Court said this at paragraphs [35]-[36] in relation to the operation of section 79 of the Act.
‘[35] It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes the matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two subsections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
[36] The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit an exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by section 79 is not “to be exercised in accordance with fixed rules”, nevertheless, the three fundamental propositions must not be obscured.’ Citations omitted
The High Court then set out the three fundamental propositions that guide a property settlement. The High Court stated as follows:
‘[37] First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
…
[38] Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion... any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”
...
[39] Because of the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist.
…
[40] Third, whether making a property settlement order is “just and equitable” is not to be determined by beginning from the assumption that one or the other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.’ Citations omitted
The three fundamental propositions set out above by the High Court were the subject of comment and guidance by the Full Court of the Family Court in Bevan v Bevan (2013) 279 FLR 1 (‘Bevan’) at paragraphs [73] to [86]. In Bevan, the Full Court noted that the High Court did not approve nor disprove the ‘4 step process’ that was applied prior to the High Court decision in Stanford. Rather, what the Full Court did in Bevan was to note that the High Court in Stanford refocused attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
In Bevan, the Full Court at [86] stated that it did not consider it helpful, and indeed ‘it is misleading’, to describe the enquiry as to whether it is just and equitable to make a property settlement order as a ‘threshold’ issue. Rather, the Court stated that ‘…the just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.’
Having addressed the interaction between sections 79(2) and 79(4) of the Act, the Full Court noted (as was noted in Stanford at [42]), that in many cases, the preliminary question of whether it is just and equitable to make an order is effectively answered by the way that the parties present their case. Indeed the High Court in Stanford at paragraph [42] noted that:
‘…the just and equitable requirement is readily satisfied by observing that, as a result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife.’
In Bevan, the Full Court provided express guidance for trial Judges in respect of the application of, and approach to, section 79 of the Act. First, at paragraph [72], the Full Court cautioned as follows:
‘It follows that judges would be well advised to avoid what we considered to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the 4 step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.’
The following was also stated by the Full Court in Bevan at paragraph [89] in relation to the approach that trial Judges should take:
‘In our view, it will be less likely that the separate issues arising under s 79(2) and (4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order.’
When it comes to the assessment of contributions and the approach to be taken, I have had regard to the comments of the Full Court in Dickons v Dickons [2012] FamCAFC 154 (‘Dickons’), and Eufrosin v Eufrosin [2014] FamCAFC 191, in particular the following extract from paragraph [24] of Dickons:
‘The essential task [of the court] is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.’
In respect of an approach which attributes percentage contributions to differing periods within the relationship, or types of contributions to be made, the Full Court has stated that there is little to be gained, and much to be said against approaching the task of assessing contributions by attaching percentages to components of it: Dickons at [23]. Further, in, Lovine & Connor & Anor [2012] FamCAFC 168, the Full Court stated as follows:
‘[42] As part of the process of ultimately determining just and equitable orders under s 79 there is included a complex of discretionary assessments and judgements of many components of contribution, only some of which are capable of measurement in money terms and then often only in historical, rather than present, money terms. Any dictate to the effect that in the course of assessment each disparate component part or kind of contribution must be assigned a discrete and identifiable value or percentage is antithetical to the nature of the discretion involved.’
The task of assessing contribution is ‘holistic’: Dickons at [24].
I am satisfied that in this matter it is just and equitable to embark upon an exercise of determining how the assets between the parties are to be split. The parties have been separated since April/May 2018. A divorce order was made on 15 October 2019 and came into effect on 16 November 2019. It is self-evident that the parties are no longer in a relationship and that there will no longer be any common property available for shared use by the parties.
The composition of the asset pool
The parties identified the following assets and liabilities in the asset pool. The table below notes the assets, liabilities and the areas of dispute between the parties.
| Assets | Ownership | Value | Agreed/Not Agreed |
| Proceeds of sale of Property | Joint | $114,527.90 | Agreed |
| Motor Vehicle 1 | Joint | $15,500 | Agreed |
| Husband’s fixed deposits in India | Husband | Unknown | Not agreed |
| Husband’s real property in India | Husband | Unknown | Not agreed |
| Wife’s jewellery | Joint | Unknown | Not agreed |
| Husband’s shares in Mutual Fund in India | Husband | $400 | Not agreed |
| NAB account ending in …90 | Husband | $4,000 | Not agreed |
| NAB account ending in …97 | Husband | $190 | Not agreed |
| NAB Accounts ending in …85 and …34 | Wife | $1,874 | Not agreed |
| NAB accounts ending in …70 and …58 | Wife | $3,660 | Not agreed |
| Superannuation | Husband | $12,554 | Agreed |
| Superannuation | Wife | $9,000 | Agreed |
| Liabilities | Ownership | Value | Agreed/Not Agreed |
| Loan for Motor Vehicle 1 | Joint | $13,114 | Agreed |
| Loans from Mr B | Joint | Not agreed | Not Agreed |
| Loans from: · Mr B ($3,774.80) · Mr C ($3,800) · Mr D ($1,500) · Ms E ($2,500) · Vernon Da Gama & Associates ($6,600) | Wife | $18,174.8 | Not agreed |
I now turn to deal with each of the disputed areas in the asset pool.
The payments from Mr Atwal
This issue emerged as the most significant one in the trial and occupied most of the time allocated to the hearing.
The Husband contends that various cash payments made by his father to the couple were in fact loans. His evidence was supported by that of his father who travelled from India to give evidence.
The Wife disputes that the amounts given by Mr Atwal were given as loans. She contends that the amounts given to the couple by Mr Atwal were gifts or alternatively, the amounts were sourced, at least in part, from the Husband’s funds in India, to which she had contributed throughout the course of the marriage.
A loan involves an obligation on the borrower to repay the sum borrowed. In Federal Commissioner of Taxation v Radilo Enterprises Pty Ltd (1997) 142 ALR 305 at 317, Sackville and Lehane JJ quoted with approval the following passage from Dr C Pannam in The Law of Money Lenders in Australia and New Zealand at page 6:
‘A loan of money may be defined, in general terms, as a simple contract whereby one person (the lender) pays or agrees to pay a sum of money in consideration of a promise by another person (the borrower) to repay the money upon demand or at a fixed date. The promise of repayment may or may not be coupled with a promise to pay interest on the money so paid. The essence of the transaction is the promise of repayment. As Lowe J put it in a judgment delivered on behalf of himself and Gavan Duffy and Martin JJ: “‘Lend’ in its ordinary meaning in our view imports an obligation on the borrower to repay” (Ferguson v O'Neil [1943] VLR 30 at 32). Without that promise, for example, the old indebitatus count of money lent would not lay. Repayment is the ingredient which links together the definitions of “loan'’ to be found in the Oxford English Dictionary, the various legal dictionaries and the text books. In essence then a loan is a payment of money to or for someone on the condition that it will be repaid.’
In a Family Law context, a Full Court of the Family Court of Australia in In the Marriage of CJ and V Biltoft (1995) 19 Fam LR 82 considered an unsecured loan given by a third party to the Husband. An issue before the Full Court was whether the debt to the third party should have priority over the claim of the wife. The Court looked at all the circumstances of that matter, which included the unsecured nature of the debt and the steps taken (or more accurately, not taken) by the third party to recover the amounts, before determining that the trial judge did not fall into error in refusing to give the third party debt priority over the claim of the wife. In so holding, the Full Court held that where an unsecured liability is vague or uncertain, or unlikely to be enforced, the Court may determine not to take it into account.
In contrast, in In the Marriage of FS and LM Petersens (1981) 7 Fam LR 402, Nygh J found that a debt arising from money advanced by the father of the husband to a family company was not a sham and that the proceeds of the sale of the company property should be paid in reduction of that mortgage debt. Among the factors pointing to the existence of the debt being genuine included minutes of a directors meeting, and a formally executed and registered mortgage.
In the present matter, the oral evidence of both the Husband and Mr B is that the amounts forwarded by Mr B to the couple are loans. The documentary evidence said to support the existence of the loan are as follows. First, bank statements evidencing either the withdrawal of monies by Mr B from his accounts, or the receipt of those moneys by the Husband. Second, a document prepared by Mr B’s lawyers in India demanding repayment of an amount of $144,425. The document is undated. Evidence given by the Husband under cross examination indicates he only received the document in March 2018. Around a week later, the parties separated.
At the outset, it is appropriate to note that the Husband’s evidence (as set out in his trial affidavit) as to the amounts said to have been advanced by Mr B is extremely unclear and inconsistent. The Court has spent much time trying to understand what may have been paid and when. Whether the poor quality of the evidence arises from the Husband, or his solicitors, is not clear. What is clear from what follows is that the poor attention given to these matters has had a consequence for the Husband.
The evidence as to any obligation to repay the amounts given by Mr B to the couple is scant. In his affidavit, Mr B says he provided some of the funds to help the couple to ‘settle down’ in Australia and once they had done that, they would be able to refund him. He later said that he gave further amounts which he expected them to ‘repay at the earliest’. Under cross examination, Mr B indicated that during a phone conversation with the couple, he understood that when both of them commenced working, one of them could use their salary to repay him the amounts advanced. There is no contemporary, corroborating evidence to support any of this.
In addition to the above, Mr B’s evidence is he has retired from the workforce, that his financial position is now parlous, and his health is in decline. He says that he could never afford to give the amounts as gifts, only as loans.
I have considered carefully the evidence of both the Husband and Mr B. When all of the evidence is considered, I find that the amounts advanced by Mr B to the couple were not advanced as loans. My reasons for this conclusion are as follows.
First, the evidence relied on, and the contentions advanced by the Husband, as to the amounts said to constitute the loaned amounts are not consistent. In any loan arrangement, one expects the amount said to have been loaned to be clearly identified. A lender would want to have certainty about the amount of money given to another. The borrower would wish to understand clearly the amount being provided by way of the loan, as distinct from any other type of advance. The evidence in this case, however, about the total amount said to be loaned, is vague and uncertain on the Husband’s own case. By way of example:
a)In his affidavit, the Husband deposes to various amounts received from his father which he says were loans. Adding the various amounts from each relevant paragraph in his trial affidavit produces a total amount of $181,400. However, this figure is not consistent with the amount of $144,425 which the Husband says at [32] of the affidavit is the total amount of the loans.
b)Mr B annexed to his affidavit, at annexure A-2, a table he prepared of the amounts that he claims he loaned to the couple. The amounts in that table, when added together, total $191,435.
c)I referred earlier to the demand the Husband received from Mr B’s lawyer in India. That document identifies the loaned amounts as $144,425.
d)The Husband, in his final closing written submissions, urges the Court to find that the loans provided by Mr B amount to $201,425.
No explanation is given for the inconsistencies above.
Second, there is no evidence of a written loan agreement between the parties. There is not even an email or contemporaneous message or phone call recording or adverting to the funds being given pursuant to an agreement under which Mr B would be repaid. The documents relied on by the Husband to support the existence of the loan agreement do no such thing. The bank statements simply identify amounts transferring between the parties. The demand from Mr B’s lawyers is simply that – a demand for payment. Not only that, it is a demand for payment that appears to have been sent either after separation, or, at the very least, at a time when it would have been clear that the marriage was in trouble. In this respect, I note that the demand for payment includes a demand for an amount forwarded by Mr B on 29 March 2018, and a little over a week later, the Husband notified the Wife by email of his intention to seek a divorce order.
Third, and unsurprisingly given the lack of written documentation, the terms of any loan agreement are vague and uncertain. In the authorities referred to earlier, a critical part of any loan agreement is an obligation to repay the amount loaned. In this matter, the evidence concerning the obligation to repay is far from certain or consistent. There is not a repayment schedule nor is there any evidence of repayments having been made since the first payments were advanced in 2014. The absence of a clearly articulated timeline or event under which the couple would be required to repay the amounts said to be owed is telling. The highest the evidence gets is that given by Mr B where he talks about repayment once the couple have ‘settled down’ in Australia, or a vague promise to direct either the Husband’s or Wife’s salary to him when both were working. Even accepting this evidence, it falls far short of a crystallised and clear term requiring repayment by a particular date, or on a particular event.
Fourth, not only is the obligation to repay not clear, but other important terms one usually associates with a loan are not clear. For example, it is not clear whether interest was to be payable. The letter from Mr B’s solicitor referred to earlier demands payment of interest, but the amount is not specified. There does not appear to be any clear evidence of whether interest would be charged, what the rate of interest would be, or indeed whether the loan would be interest free. Under cross examination, Mr B seemed to walk away from the claim for interest.
Fifth, no demand for repayment was ever made until separation had occurred or was imminent.
Sixth, there was a real question as to whether the couple had the capacity to repay any loan. It is true that both had worked during the relationship. Notwithstanding that, however, both had time off work in connection with the birth and subsequent passing of X in 2017. At that time, neither of them was working. They had already, by that stage, obtained significant sums from Mr B. Notwithstanding that, however, they continued to request and receive funds. While Mr B may not have known of the exact financial circumstances of the couple, he must have known, particularly by around 2017 when X was born, that the capacity of the couple to repay him was in question. He says as much in his affidavit when he indicates that he continued to forward monies to ensure that the couple did not lose their house. He therefore continued to provide funds, notwithstanding the couple’s apparent incapacity to pay.
Seventh, in evidence before the Court was the application by the couple to obtain finance for the Motor Vehicle 1. In that document (which is not signed), the couple was asked to set out the amount of any other loans they had taken out. The Husband discloses a loan from H. The Wife does not disclose the existence of any other loan. Neither discloses any loan to them from Mr B.
Much of the debate during the hearing concerned how the amounts given by Mr B to the couple were spent. The evidence suggests that at least the initial amounts were forwarded to help the couple settle in Australia, and to help them purchase a house. Later on, the evidence seems to be that monies were provided by Mr B to help the couple with living expenses in Australia and potentially with the cost of IVF. Whatever the payments might have been used for, however, it tells me little about whether the character of the sums advanced were advanced as a loan or as a gift.
For all of the above reasons, I find that all of amounts given by Mr B to the couple are not loans. It seems to me that this is a case, as often occurs in families, that money was advanced because a close relative needed a hand. It might be that there was an expectation that monies would be repaid at some unidentified point in the future were the couple in a position to do so. It may be that there was an expectation that if the situation was reversed and Mr B needed assistance, the couple would do what they could to provide it. While there may be social expectations of these types within families, they fall short of establishing an obligation to repay a loan. The amounts advanced were not loans. If anything, they were in the nature of gifts. They should therefore not be included in the asset pool as liabilities of the marriage.
The loans to the Wife
The Wife claims the following loans have been made to her and constitute liabilities of the marriage:
a)$3,774.80 from Mr B;
b)$3,800 from Mr C;
c)$1,500 from Mr D;
d)$2,500 from Ms E; and
e)$6,600 from Vernon Da Gama and Associates.
The first three of these loans were, according to the Wife, given to her in early 2019. They postdate separation. It is not known as to when the last two loans were entered into or effected.
The Wife did not produce any documentation to support her claim that the above amounts are to be characterised as loans. There is not any formal loan agreement in respect of each of the amounts. There is no contemporaneous record that records the amounts above being loaned to the Wife. There is no evidence as to the terms of any of these loans. None of the individuals who are said to have loaned the amounts were called to give evidence.
Having regard to the matters above, I find that the amounts above are not loans to the Wife. They are not to be treated as liabilities of the marriage or included as part of the asset pool.
The Husband’s Property, bank accounts and shares in India
The Wife’s evidence is that the Husband owns real property in City J in India. She says that the value of this property is $60,000 and that the property should be included in the asset pool of the parties.
There is no corroborating evidence before me that the Husband owns real property in India. There is not a certificate of title or other document in evidence that records the Husband’s ownership of land in India. The Husband when asked under cross examination, expressly denied that he owned land in India. Further, while the Wife says that the value of the real property is $60,000, there is no evidence before me from a property valuer or other expert as to the value of the land claimed.
The Wife then claims that the Husband holds funds and other interests in fixed deposits or bank accounts in India.
There is not any evidence before me that corroborates the Wife’s claims that the Husband has maintained bank accounts or fixed deposit accounts in India. No bank statements or other records documenting the existence of accounts, or the amount of funds within any accounts, was placed before the Court.
The Husband was asked during cross examination whether he held funds in India either in his own name, or jointly with his Father. He denied doing so. The Husband’s father was also asked whether he held any funds jointly with his son. He denied doing so.
In my view, the claim that the Husband owns land in India cannot be sustained on the evidence. Likewise, the claim that the Husband has bank accounts or fixed deposits in India cannot be sustained on the evidence.
In relation to the property and the accounts referred to above, while the Wife conceded that her claims were not supported by other evidence, she urged the Court not to be unduly cautious in accepting her claims. In substance, she alleged nondisclosure by the Husband and cited cases such as In the Marriage of Weir (1992) 16 FamLR 154 (‘Weir’) to support her contention that the Court should accept her assertions.
Weir concerned a situation where the Wife claimed that the Husband had concealed income from a Quarry business. The Wife’s claim was supported by evidence from her accountant as to discrepancies he had discovered in undertaking a valuation of the business. There was also evidence from the parties’ son that the Husband had a practice of pocketing cash payments. Further, there was evidence about movements in the Husband’s income from the business, and evidence of fluctuating profit figures pertaining to the business. In those circumstances, the Full Court held there was sufficient evidence upon which the trial judge could make a finding that the husband had not made full disclosure. Once such a finding was made, the Full Court stated that the Court should not be unduly cautious about making findings in favour of the innocent party.
It is clear from the Full Court’s decision that the statement that a Court should not be unduly cautious about making findings in favour of an innocent party are to be understood in a context where there is sufficient evidence before the Court to establish ‘deliberate non disclosure’. It is only where sufficient evidence exists to make such a finding that the Court should take a less cautious approach.
The facts of this matter fall far short of the circumstances in Weir. The Wife has not called evidence from any other party to support her claim. In Weir, there were two other persons supporting the wife’s claim. Moreover, there is not a sufficient evidentiary basis to support a finding that the Husband has deliberately not disclosed his financial affairs. The evidence before the Court in relation to alleged nondisclosure is an email request from the Wife’s solicitors for disclosure in relation to bank accounts and shares, and a response from the Husband’s solicitors that he does not hold shares or bank accounts in India. The Husband was cross examined about the lack of bank statements from the parties’ time in Country A. His answer to that was that he had not been asked to produce those. That, of course, is not an answer to any alleged failure to fulfil the obligations as to disclosure. The evidence and circumstances here, however, fall far short of the evidence a Court requires to make a finding that the Husband has deliberately avoided providing disclosure. It certainly falls short of the circumstances in Weir.
Given the above, the Court will not include in the asset pool for distribution, any property of the Husband’s in India, or any funds in banks or fixed deposits in India alleged to be in the Husband’s possession.
At annexure A-19 of the Husband’s trial affidavit, there is evidence in the form of an account statement, that the Husband owns shares, or an interest, in a mutual fund in India. The account statement discloses that, as at 19 January 2007, the value of that asset is approximately $400. This amount will be included in the assets of the marriage.
The Jewellery
It is agreed that, at least at one point, the parties owned jewellery. Unfortunately, that is where the agreement ends. The Husband claims that the Wife has the jewellery. The Wife in turn claims that the jewellery is in a locked box in India controlled by the Husband’s parents.
There is not a complete list of the items said to constitute the jewellery of the parties. The Husband annexed to his affidavit an itemised list of jewellery that was set out for the purposes of home insurance with K Insurance. This appears to be the only document in evidence that identifies any items of jewellery and the claimed values of such jewellery.
There is no independent or expert evidence before the Court as to the valuation of the jewellery. In his trial affidavit, the Husband identifies the jewellery as having a value of between $20,000 and $22,000. Curiously, however, his Outline of Case filed before trial identified the value of the jewellery as being $10,000. In his final written submissions, he claimed once again that the value of the jewellery was between $10,000 and $22,000.
For her part, at trial, the Wife produced a photograph of her wearing jewellery: see Exhibit W2. Her trial affidavit identified the value of the jewellery as equivalent to $80,000. Notwithstanding that, in her final closing submissions filed on 9 March 2020, she accepted that the value of the jewellery was now as claimed by the Husband in his trial affidavit. No explanation was provided for the change of position.
Given the lack of evidence in respect of this topic, the inconsistent nature of what is in evidence given at trial by the Wife and the Husband, and the parties’ changing positions, I examined the documentary evidence that exists in respect of the jewellery. As I have noted earlier, the only document in existence relating to the jewellery is the K Insurance form. While I have considered that document carefully, I do not accept it as evidence that the jewellery currently exists, that it is presently in the possession of one or other of the parties, or that it is an accurate representation of the items of jewellery or the value of the jewellery. The document was issued over two years ago in January 2018. It simply lists jewellery at that time. During the hearing, it emerged that even the items on this list may not have been in the home at the relevant time. There is no independent valuation of the jewellery attached to it. Further, what a party claims as an insurable amount is not, in the absence of further evidence, proof of the value of that item.
The evidence of both parties in respect of this matter, which would appear to have some significance given the pool available to the parties, is extremely deficient. The parties appear to have paid insufficient attention to what in the circumstances of this case appears to be a significant amount of money. The Court is unable, however, to make any findings in relation to this matter given the state of the evidence.
I have also considered the Wife’s contention that I should not be unduly cautious about finding that the Husband has the jewellery, in reliance upon the propositions set out in Weir. For the reasons adverted to previously, the evidence and circumstances in this case are very different from that set out in Weir. There is not a sufficient basis upon which the Court can make a finding that the Husband has not made full disclosure in respect of the jewellery.
In the circumstances and for the reasons above, the jewellery is not to be included as part of the asset pool.
The Australian Bank Accounts
The Husband in his Outline of Case identified a number of bank accounts held in the National Australia Bank. Two of the accounts are said to be accounts of the Husband, the accounts ending in …90 and …97, and are said to total $4,190. The remaining accounts are said to be accounts of the Wife, the accounts ending in …85, …34, …70 and …58, and are said to total $5,534.
The subject of these accounts did not arise during the oral hearing. They did not feature in the parties’ closing written submission. I have been unable to identify any evidence as to the amounts in these accounts.
In light of the above, I will not include these accounts in the asset pool.
The Asset Pool available for distribution
Having regard to the above, the asset pool available for distribution between the parties is as follows:
| Assets | Ownership | Value |
| Proceeds of sale of former matrimonial home | Joint | $114,527.90 |
| Motor Vehicle 1 | Joint | $15,500 |
| Husband’s shares in Mutual Fund | Husband | $400 |
| Liabilities | Ownership | Value |
| Loan for Motor Vehicle 1 | Joint | $13,144 |
| Net non-superannuation assets | $117,283.90 | |
| Value of superannuation assets | ||
| Husband | $12,554 | |
| Wife | $9,000 | |
| Total | $21,554 | |
| Net assets including superannuation | $138,837.9 | |
Contributions
The Husband
The Husband contends that as I have not found the amounts forwarded by Mr B to be loans, I should regard the amounts as gifts and recognise them as contributions by the Husband to the marriage. In contrast, the Wife contends that the amounts forwarded by Mr B should be seen as a gift to both parties and not necessarily a contribution emanating from the Applicant.
In In the Marriage of CJ and TK Kessey (1994) 18 Fam LR 149, a Full Court of the Family Court of Australia considered a situation in which the parties purchased a matrimonial home together in the sole name of the husband. The wife’s mother ultimately sold her property and used funds from the sale to build an extension to the matrimonial home for her own accommodation. She lived there until her death. The Full Court held that it was open to the trial judge to find that the contribution by the mother was made for and on behalf of the wife having regard to the circumstances of that case, which included the existence of a mother-daughter relationship, and a long history of support by the wife for her parents.
In In the Marriage of J and O Pellegrino (1997) 22 Fam LR 474, the parties had lived rent-free in accommodation owned by the wife’s parents for 17 years, and had carried out renovations to the property while living there. Chisholm J held that the provision of rent-free accommodation by the wife’s parents should be treated as a contribution made by the wife.
In In the Marriage of Gosper (1987) 11 Fam LR 601, Fogarty J considered property that was transferred to the parties by the wife’s parents. Fogarty J found that the property should be treated as a financial contribution made by the wife. At pages 610 – 612 of his decision, Fogarty J stated as follows:
‘Where there has been a gift or advance by a relative to one or both of the parties to the marriage, the first step is to determine the ownership of the benefaction…
…
The next step is to consider the application of s 79 to all of the property of the parties, including property received by one or both of them by way of benefaction from a third party. Traditionally this task is performed by firstly considering the question of contributions under s 79(4)(a) — and then, if relevant, the s 75(2) factors. There is no reason to apply a different approach in relation to property having this particular history.
Where a gift is made solely to the donor's relative (for example a gift by parents to their married daughter) and that spouse applies that property to the marriage, that is a direct financial contribution solely by that party and will be assessed in the ordinary way alongside other contributions by each party to the marriage. Cases such as Rainbird, Freeman and Read, supra , are examples of this.
…
The critical case is where a relative of one of the parties gifts property to both the parties to that marriage. Dependent upon the circumstances of the case, it is, in my view, open to the Court in such a case to look at the actuality and treat that as a “financial contribution made directly … on behalf of” the spouse relative (see for example Rainbird, Matthews, W, Underwood, Abdullah, Freeman, cf Cleary, Hogan J in Freeman, and Antmann, supra ).
In many such cases that gift was made only because of that relationship and in reality as a means of benefiting that relative in that marriage. It was made “because she was a daughter of that family” as was said in W's case at 75,527 .
It is clearly a “financial contribution” and one “made directly” to the acquisition, conservation and improvement of property. In such cases it is open to the court to conclude, if the facts justify it, that it was made “on behalf of” one spouse.’
The comments of Fogarty J are instructive. Having said that, the present matter, of course, does not concern the transfer of title to property. It concerns the advances of money to the parties.
I have considered closely the evidence of Mr B as to his intentions when making the advances. Mr B’s evidence is:
a)that his son wanted to start a new life in Australia and that at that time he lent him a total amount of $17,000 (I observe that at this time, the parties were married);
b)both the Husband and the Wife asked for money to travel to Australia and for living expenses and he provided the money;
c)he advanced money so that they could ‘settle down’ in Australia;
d)subsequently, both the Husband and the Wife continued, jointly, to ask for more funds from him, and he provided the funds.
The evidence also discloses that the funds provided by Mr B were used by the parties for a range of expenses. These included contributions towards establishing themselves in Australia, payment of living expenses while in Australia, contribution to the acquisition of the former matrimonial home, contributions towards health expenses, IVF and other matters.
I have already indicated earlier in these reasons that the amounts advanced to the parties were not advanced by way of loan, but are rather gifts. The evidence above discloses that Mr B advanced the funds in the knowledge that both parties would benefit. In my view, however, the motivation or reason for advancing the funds was the relationship between Mr B and his son. The funds were advanced solely because the Husband was Mr B’s son. For these reasons, I am of the view that the funds provided by Mr B should be treated as a contribution made by the Husband.
A question arises in relation to the value of, or the weight to be given to, the contribution made by the Husband as result of the funds advanced by Mr B. The evidence on this point is, as I have stated, entirely unsatisfactory. I have referred earlier in these reasons to the inconsistencies in the evidence of the Husband and Mr B in relation to the amounts said to have been advanced. While I accept at a general level that an amount said to be loaned to a person can be different from the total amounts advanced to a party, there needs to be an explanation of the difference. There is not in my view, on the evidence, any way for the Court to distinguish between what is said to be amounts loaned and what is said to be amounts advanced. It is difficult for the Court to make a finding in relation to these matters when the distinction between loans and advances is not articulated in the evidence. It is also difficult for the Court to make a finding on the precise amount of the contributions when the amounts advanced on the Husband’s case are inconsistent when one has regard to the Husband’s evidence and the evidence of Mr B.
In his closing submissions, the Husband urged me to make findings that Mr B provided to the Husband a total amount of $201,425. I have a difficulty accepting this to be the case. For a start, the amount of $201,425 advanced to the Husband is also said in the Husband’s closing submissions to be the amount of the claimed loan. Secondly, the figure is inconsistent with the Husband’s own evidence in his affidavit, which the affidavit is itself inconsistent – see my earlier comments in relation to this. Third, it bears no relation to the amounts Mr B has disclosed in his affidavit. Fourth, it bears no relation to the demand made by Mr B that the Husband repay an amount of $144,425.
In light of the state of the evidence, I accept that the Husband (through the assistance provided by his father) made a significant financial contribution to the acquisition of the property and also to the marriage. I find the contribution was, at a minimum, an amount of $144,425. In the context of this marriage and the assets of these parties, I regard that as a significant contribution.
Aside from the funds provided by Mr B, the husband worked during the marriage and contributed financially to it. I take into account those contributions.
The Wife
The evidence of the Wife is that she had assets of about $10,000 at the time of entering the marriage.
The Wife further deposes that the expenses of the wedding ceremony were met by her and her parents. She claims those expenses were the equivalent to $110,000. The Husband agrees that the expenses of the wedding were met by the Wife or her family. He says, however, that the expenses were no more than $5,000.
I do not accept the evidence of the Husband in relation to this matter. Plainly, as he himself states, it is the culture in which the parties married that the Wife’s parents pay for the wedding. He would not therefore know, and I infer not concern himself with, the costs relating to the wedding.
While the Wife says that the expenses amounted to $110,000, she has not provided any evidence to corroborate that amount. Further, there is little in the evidence even by way of description to indicate the scale of the wedding which would justify the incurring such a significant sum of money. Be that as it may, I accept that the Wife and/or her family incurred significant costs in staging the wedding.
The evidence in this matter is also that the Wife has worked during the marriage. She has contributed financially towards the acquisition and maintenance of the Property, as well as household and living expenses. No meaningful challenge was made to this by the Husband and I accept it as fact.
Finally, it was the Wife’s evidence that she was primarily responsible for a range of household tasks including cooking, cleaning, shopping for groceries, doing the laundry, etc. She was also the primary carer of X until X passed away. None of this evidence was seriously challenged by the Husband and I therefore accept it. I regard the Wife’s contributions as homemaker as being significant.
When the respective contributions of the parties are considered, it is apparent that both parties worked and contributed financially to the marriage. The principal matter weighing in favour of the Husband is the financial contributions toward the purchase of the Property. The principal matters weighing in favour of the Wife are her contributions as homemaker and her funding of the wedding. The financial contributions of the husband, largely attributable to the contributions of his father throughout the marriage, enabled the purchase of the Property and it is those proceeds that are now the main asset in dispute. These matters, in my view, favour a slight, but not significant, adjustment in favour of the Husband.
The factors under section 75(2) of the Act
The Husband presently works as a courier. The Wife is also presently employed as a health care worker. Both parties presently earn a similar income.
I find that both parties are in good health. The Wife contended that she suffers from anxiety and depression and that I should take that into account. I decline to do so for two reasons. Firstly, no evidence was tendered from a medical professional which contained a diagnosis of the Wife and how any condition may affect her ability to earn an income. Second, while it might be that the Husband stated on past occasions that the Wife was anxious and that he could not cope with her, that does not necessarily mean that the Wife suffers from a diagnosed medical condition which affects her ability to earn an income.
Both parties are 39 years of age. Each is young enough to start over and both are in good health. There is not any child of the relationship to be supported. There is no evidence that either of the parties are required to maintain another.
Accordingly, when the factors under section 75(2), I regard them broadly as equal.
The Husband uses the Motor Vehicle 1 to earn an income. Requiring him to part with that would have an effect on his ability to earn an income. It seems to me to make some sense to make an order that the Husband retain the vehicle, retain his interest in a Mutual Fund in India and retain his superannuation interest, and to take those matters into account in setting the overall adjustment in his favour, that I have indicated I would make.
For the reasons set out above, I am of the view there should be a slight adjustment in favour of the Husband. In light of the above, I will make the following orders:
a)the Husband retain the Motor Vehicle 1 and the loan attached to it;
b)each party retain their respective superannuation balance;
c)the Husband retain his shares in the Mutual Fund in India;
d)the balance of the asset pool, being the funds from the sale of the Property, be distributed $58,274.09 to the Husband and $56,253.81 to the wife.
The orders above reflect a split of the total asset pool of 53% to the Husband, and 47% to the Wife. I regard the above orders as being just and equitable in the circumstances.
I certify that the preceding one-hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of Judge Blake
Date: 8 May 2020
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Jurisdiction
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