Ayre and Ayre

[2017] FCCA 1457

FEDERAL CIRCUIT COURT OF AUSTRALIA

AYRE & AYRE [2017] FCCA 1457

Catchwords:
FAMILY LAW – Property – issues of credit – property pool – consideration of relevant s.75(2) factors.

Legislation:

Family Law Act 1975, ss.75(2), 79(1), (2), (4), (d-g)

Cases cited:

Relationships Act 2003 (Tas)

Kennon v Kennon (1997) FLC 92-757
Stanford v Stanford (2012) 247 CLR 108
Bevan v Bevan (2013) FLC 93-545
Fielding & Nichol [2014] FCWA 77
Jones v Dunkel (1959) 101 CLR 298
Murphy & Murphy [2007] FamCA 795
Weir v Weir (1993) FLC 92-338

Applicant: MS AYRE

Respondent: MR AYRE

File Number: LNC 591 of 2016

Judgment of: Judge McGuire

Hearing date: 8 June 2017

Date of Last Submission: 8 June 2017

Delivered at: Burnie

Delivered on: 11 July 2017

REPRESENTATION

Counsel for the Applicant: Mr M Verney

Solicitors for the Applicant: Matthew Verney Lawyers

Counsel for the Respondent: Mr M Trezise

Solicitors for the Respondent: Dobson Mitchell & Allport

ORDERS

1. That within twenty-eight (28) days of the date of these orders the husband shall:

   (a)Pay to the wife a lump sum of $84,241;

   (b)Transfer and or vest all his right, title and interest in the following to the wife absolutely:

   (i)The property situate at Property A in Tasmania;

   (ii)Wife's (vehicle omitted) motor vehicle;

   (iii)The caravan in the possession of the husband;

   (iv)The boat, motor and accessories in the possession of the husband;

   (v)(omitted) Truck;

   (vi)(omitted) Truck;

   (vii)Forklift;

   (viii)Post-hole digger and log splitter;

   (ix)Trailer

   (x)The benefits of loans to the wife’s daughters, Ms C and Ms T;

   (xi)The wife’s superannuation entitlements;

   (xii)All personalty and chattels in the possession of or under the control of the wife as at the date of these orders; and

   (xiii)The benefits of any bank account or like investment in the name of or to the benefit of the wife as at the date of these orders.

   (c)Be solely responsible for and indemnify the wife in respect of the following:

   (i)Any residual liabilities of the (omitted) business “(omitted)”;

   (ii)Any and all liabilities incurred by the husband since separation in either joint names or in his name alone; and

   (iii)Any liabilities attaching to any of the assets retained by the husband pursuant to these orders.

2. That contemporaneously with the payment in Order No. 1 hereof, the wife shall:

   (a)Transfer and/or vest all her right, title and interest in the following to the husband absolutely:

   (i)The property situate at Property B in Tasmania;

   (ii)Any residual benefits of the business “(omitted)”;

   (iii)The Nissan (omitted) motor vehicle;

   (iv)The husband’s tools;

   (v)The tractor and containers;

   (vi)The husband’s cash-at-hand;

   (vii)The balance of any bank accounts or like investment in the name of or to the benefit of the husband as at the date of these orders; and

   (viii)All personalty and chattels in the possession of or under the control of the husband as at the date of these orders but subject to these orders.

   (b)Be solely responsible for and indemnify the husband in respect of the following:

   (i)Any and all liabilities incurred by the wife since separation in either joint names or in her name alone; and

   (ii)Any and all liability attaching to any of the assets to be retained by the wife pursuant to these orders.

3. That the husband be and is hereby restrained by himself or his agents from selling, otherwise disposing, encumbering, or otherwise dealing with any of the assets referred to in order 1(b) hereof otherwise than in accordance with these orders.

4. That there be liberty to the parties or either of them in respect of the implementation of these orders.

5. That the wife’s application for spousal maintenance be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Ayre & Ayre is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BURNIE

LNC 591 of 2016

MS AYRE

Applicant

And

MR AYRE

Respondent

REASONS FOR JUDGMENT

1. These are proceedings commenced by the wife on application filed 23 November 2016 seeking orders for property settlement and for spousal maintenance.  By the end of the evidence, however, it was clear that the wife no longer prosecuted her application for spousal maintenance and no submissions were made accordingly in her Counsel's final address.

2. The wife seeks an order that she receive 60% of the parties’ property inclusive of superannuation (on a one pool basis).

3. At the commencement of the trial, the husband was asking for orders whereby an unencumbered property of the parties situate Property A in Tasmania be sold and that from the net proceeds of sale the wife receive a sum of $40,000 and the balance then be divided between the parties equally.  That property has an agreed value of $185,000.  The husband's proposal therefore amounted to the wife receiving approximately $130,000 from that property and the husband to receive approximately $50,000.  He proposed that the wife otherwise retain assets to a value of approximately net $2,500.  The husband's proposal had him retaining assets to a value, depending on the content of the property pool, of $500,000 – $600,000 estimated.  The basis of this argument was that the parties had, prior to their marriage, entered into a Personal Relationships Agreement under the Relationships Act2003 (Tas). The husband had abandoned this argument by the time of final submissions.

Background

1. The husband is 54 years old.  The wife's 57 years of age.

2. The parties commenced their relationship in (omitted) 1987 but did not marry until (omitted) 2013.  They separated in January 2016.

3. There is one adult child of the relationship being Mr N who is 28 years of age.  Each of the parties has adult children from previous relationships.

4. In May 2008 the parties entered into a Personal Relationships Agreement pursuant to the Relationships Act 2003 (Tas). The wife says that she entered that agreement under duress which is denied by the husband. A casual reading of that document suggests that its application now would favour the husband highly disproportionately to considerations of contributions and relevant section 75(2) factors.

5. The wife works as a (occupation omitted) at the (employer omitted) on a casual basis with fluctuating hours.  She earns between $100 and $300 per week.  Her income is supplemented by Centrelink benefits.

6. During the course of the relationship the parties operated as a partnership in a (omitted) business.  The husband retained that business and its benefits following separation.  His evidence to this Court from the witness box was that he had discontinued this occupation and the business as of the previous Friday and was intending to enter into a career as a (occupation omitted).

7. The husband has apparently re-partnered with Ms H.  Her income is not disclosed.  She did not give evidence.

8. There is no evidence that the wife has re-partnered.

The Relevant Issues

1. Given the husband's abandonment of his argument of reliance upon the Personal Relationships Agreement, he now seeks an order whereby the wife receive 55% of the net tangible assets of the parties and 50% of the husband's superannuation entitlement.  The wife seeks an order on a one pool basis that she receives 60% of the parties’ property inclusive of superannuation.

2. There is agreement between the parties that their contributions to and throughout the relationship should be considered as equal. Consequently, the issue for the Court is as to what adjustment be made in favour of the wife on section 75(2) considerations.

3. There are a number of issues as to the content and value of the property pool.  Importantly, the wife claims that the husband has retained cash holdings of approximately $80,000.  The husband disputes this assertion. 

4. There are issues as to the value of motor vehicles and the existence of tools where in both respects the evidence as to the valuation is seriously lacking.

5. The wife in her affidavit material alleges that she was the victim of family violence throughout the relationship.  She does not to plead or argue any impact on her contributions[1]. She does, however, interestingly argue through her Counsel that such family violence is relevant for consideration under s75(2)(o) of the Family Law Act 1975 (‘the Act’) as “any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account”.

   [1] Kennon v Kennon (1997) FLC 92-757

6. There are serious issues of credit between these parties and where the husband in the witness box, admitted that he is perjured himself in his affidavits and in his viva voce evidence in Court.  Submissions were received from his Counsel during final address as to why the Court should not refer the husband to the Department of Public Prosecutions for prosecution on the criminal charge of perjury. 

The Evidence

1. Both parties provided trial affidavits and sworn financial statements.  They were both cross-examined.  Significantly the husband's trial affidavit and financial statement were not sworn until Friday 2 June 2017 being the working day prior to the listing of this matter for trial and well outside of the trial directions.

2. The wife adduced evidence from the parties’ son, Mr N.  His affidavit sworn 27 February 2017.  His evidence purported to support and corroborate that of the wife in two respects  being:

   a)That the wife was subjected to family violence;

   b)That the husband received and retained substantial cash from the partnership (omitted) business.

3. Mr N was clearly a witness partisan to his mother.  His evidence, however, differed significantly from that of his mother in respect of the particulars of the allegation that the husband retained cash.  Both parties were cross-examined as to those particulars.  The wife insisted that the husband retained the cash in two particular locked tins but denied the use of a safe although agreeing that one was present in the home.   Mr N specifically says that he saw his father placing the money into the safe as distinct from the tins and denied that the father used tins to store the money.  Nevertheless, I otherwise found Mr N to be a credible and honest witness and conclude that the discrepancy and particularised evidence between he and his mother is evidence of a lack of collusion between them. 

4. I received by way of exhibits copious bank statements relating to the husband and/or his business as well as invoices from (omitted) in respect of the transportation of the (omitted) truck across (omitted). 

Relevant Law

1. Matters of property settlement are provided for in section 79 of the Act. Sub-section (1) provides that in respect of alteration of property interests, the Court may make such orders as it considers appropriate.

2. Significantly, sub-section (2) provides that the Court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make that order.

3. Sub-section (4) sets out that the Court is to consider the contributions of the parties to the attaining and maintaining of assets be they financial or non-financial contributions made directly or indirectly by or on behalf of the parties and including contributions as homemaker and parent.

4. Prior to the well-known decision of the High Court in Stanford v Stanford[2], trial judges generally understood their process to be one of 'four steps' being:

   i)To identify and attribute value to the property of the parties inclusive of assets, liabilities and financial resources.  For these purposes, superannuation is to be 'treated as property’;

   (ii)To identify and attribute weight to the various contributions of the parties towards that pool of property;

   (iii)To identify and attribute weight to any relevant factors set out in s79(4)(d) – (g) of the Act and including ‘the section 75 (2) factors':

   (iv)To then stand back and consider that the proposed orders, after considerations of contributions in section 75(2), are just and equitable in all of the circumstances of the particular parties.

   [2] (2012) 247 CLR 108

5. Following a subsequent decision of the Full Court of the Family Court in Bevan v Bevan[3], I am of the view that to there remains utility in following the above course of consideration although perhaps with not such rigid adherence as prior to the decision in Stanford.  Significantly, however, the High Court in Stanford (supra) emphasised that the consideration of whether it be just and equitable pursuant to section 79(2) should not be conflated with simple considerations of financial contributions. In the matter before me, however, I am easily satisfied that is just and equitable to alter the property interests of these parties where they jointly own real property together and where the relationship has obviously ended. In any event, I am of the view that it is permissible to consider the various contributions of the parties to the asset pool in considering the question under s79(2) of the Act although not a necessary or determinative one.[4]

   [3] (2013) FLC 93-545

   [4] Fielding & Nichol [2014] FCWA 77

Credit

1. I had the advantage of the seeing and hearing the parties give evidence and be cross-examined.

2. I generally found that the wife to be an honest and credible witness. She was responsive in cross examination. She was able to particularise her responses and assertions.

3. To the contrary, the husband was a dishonest witness.  He admitted perjuring himself in his affidavits and in his evidence.  He commenced his evidence in a laconic and seemingly disinterested manner.  He was not inclined to be truthful as to even the most innocuous of questions even from his own Counsel such as whether he had read his own financial statement.  He appeared to be empowered in the entire process with little respect or regard to the functions of the Court.  It was only after some intensive cross-examination and being confronted with his own contrary and unsatisfactory responses that the husband admitted his perjuries.  As such, I have some sympathy for the husband's own Counsel when confronted with a client and witness so disinclined towards the truth and where I expect Counsel and instructing solicitor had similar difficulties in extracting truthful instructions from him.

4. It follows easily for me, therefore, to prefer the evidence of the wife where in conflict with that of the husband.

The Property Pool

1. The main issue between the parties in respect of the content of the property pool is where the wife claims that the husband has retained cash in an amount of approximately $80,000.  The husband says that no cash exists.  I prefer the evidence of the wife on the following bases:

   a)The wife did not retreat during cross-examination from her assertion that the husband had on occasion boasted to her of having $80,000 in cash whilst he counted the money in front of her;

   b)The husband in the witness box initially denied the assertion that he retained any cash from the business.  He later denied that he retained large quantities of cash.  He still later admitted that he did retain cash from the business;

   c)The parties’ son, Mr N, gave evidence that he had witnessed his father retaining large amounts of cash.  He gave evidence that he had been on business trips with his father whereby he was paid in cash and;

   d)The husband's business bank account statements are now before me.  They indicate, for instance, some five trips between (omitted) and mainland Australia between August and November 2016 by (omitted) transport with costs of approximately $3000 on each occasion.  The husband admitted that these were outgoings for transport of the (omitted) van to the mainland.  The bank accounts do not show any commensurate deposits for these jobs;

   e)The husband's evidence generally in this respect was evasive, selective, equivocal and inconsistent whereas the wife's evidence was consistent and withstood cross-examination.

2. Although the issue of the quantum of cash is “fluid”, the wife asserts a sum of $80,000 as being the amount counted out by the husband in front of her.  The husband is a blatantly dishonest witness.  I generally accept the wife as a witness of the truth.  Consequently, even taking a less cautious approach[5], but on the force of evidence that the husband consistently retained large holdings of cash, I intend to include the sum of $80,000 in the pool as cash holdings in the hands of the husband.

   [5] Weir v Weir (1993) FLC 92-338

3. The wife asks that I 'add back' to the property pool consideration of a tractor ($10,600) and six containers ($6000).  She says that the husband retained these assets upon separation.  He says that he has disposed of them variously to his current partner and another woman.  He says that he received payment of $16,600 and, as such, the value is not in dispute.  He says that he has dispersed the funds by 'paying bills' and ‘general living expenses'.  He was not able to otherwise particularise these expenses as 'necessary'.  He says that he incurred these bills and expenses during a time that he was otherwise gainfully employed and remunerated in the partnership business.  He did not adduce evidence from the two women whom he says, became the legal owners of the tractor and the six containers.  As such, and pursuant to the provisions of Jones v Dunkel[6].  I am therefore able to confidently draw an inference that the evidence of these two people would not have assisted the husband's argument.  It matters little, therefore, whether the husband did indeed sell the tractor and the containers or has retained them.  I am able to add their value to the property pool.

   [6] (1959) 101 CLR 298

4. The parties otherwise disagree as to the value of the husband's Nissan (omitted) motor vehicle.  Neither party adduced evidence in proper or satisfactory form.  The wife gives an estimate of $22,000.  The husband gives an estimate of $16,000.  As I generally find the wife to be a more reliable witness, I prefer to add the value of the $22,000.

5. The wife says that the husband retained tools to a value of $5,000.  The husband says that the tools have been removed from a shed on his property.  The implication of his serve assertion is that the wife may have removed those tools.  She denies doing so.  I note that the husband has not made a complaint to Tasmania of the tools being stolen.  I note that the husband has not made a claim on insurance.  On the balance of probabilities, I therefore again prefer the evidence of the wife that the husband has retained tools to the value of $5,000.

6. The wife has a credit card liability of $5,000.  The husband says that this should not be included in the property pool as it was accrued post separation.  The wife agreed in evidence that this is the case.  I accept the husband's argument in this regard and the wife's credit card will not be included in the property pool.

7. Consequently, I am able to find that the property pool of the parties to comprise of the following:

   Property B$215,000

   Property A$180,000

   (omitted) (goodwill)(“the business”)        Nil

   (vehicle omitted) motor vehicle (wife)  $  11,750

   Nissan (omitted) motor vehicle (husband)                  $  22,000

   Caravan $  42,000

   Boat & motor accessories  $  15,000

   (omitted) Truck  $  72,000

   (omitted) Truck  $  12,000

   Furniture$    4,650

   Tools$    5,000

   Forklift$    2,000

   Post hole digger  $    1,000

   Trailer$    4,000

   Log splitter$   1,500

   Tractor and Containers  $ 16,000

   Husband’s tools  $   5,000

   Husband’s cash  $ 80,000

   Husband’s bank account  $ 13,000

   Husband’s superannuation  $ 56,000

   Wife’s superannuation    minimal

   Loan to Wife’s daughter Ms C  $  3,000

   Loan to Wife’s daughter Ms T  $  1,500

   Total$763,000

Liabilites

Business GST liability from 2016 quarter        $  449
 (wife to retain) 

Wife’s tax liability from business income
2015/16  $1,654

Total               $2,103

Total property inclusive of superannuation   $760,897  

Contributions

1. This was a long relationship of some 28 years duration.  The parties agree that neither of them had substantial assets at the commencement of the relationship.  They agree that their contributions during and post separation should be seen as equal. 

Relevant s75(2) factors

1. The husband says that he has relinquished the (omitted) business and intends to take up a career as a (occupation omitted).  I have no indication of his likely earning capacity.  However, the (omitted) business seems to have been long-standing and remunerative for the husband.  He did not offer any particular reasoning for his late-in-life career move, apparently only determined in the two days before trial, from long standing self-employed (occupation omitted) to (occupation omitted). 

2. The wife works as a (occupation omitted) at a (employer omitted) on a casual basis.  Her income is supplemented by Centrelink benefits.

3. The husband has retained both pieces of real property since separation in January 2016.  He has also retained the business, its assets and the benefit of its income for that eighteen months whilst the wife has subsisted on casual (employment omitted) work and Centrelink benefits.

4. The wife also says that matters of family violence should be taken into account pursuant to section 75(2)(o) of the Act. Her Counsel provides me with a copy of a decision of his Honour Justice Carmody at first instance in the Family Court of Australia in Murphy & Murphy[7] His Honour at [751) says:

   The relevant conduct was serious enough and went on long enough during the marriage to have a discernible adverse impact on the wife’s efforts to justify special credit or additions to the percentage entitlement of s79(4)(c) contribution or be taken into account under s75(2)(o) even where there is no ongoing need aspect.

   [7] [2007] FamCA 795

5. I do not accept Counsel’s submission.  His Honour’s judgment is a decision at first instance and I know of no superior Court supportive authority.  In any event the wife here has particularised no 'impact' from the husband's alleged behaviour.  Rather, her affidavit simply lists a litany of allegations of violent events.   I suspect that to follow the course suggested by Counsel for the wife with reliance on Murphy would to run the danger of reintroducing 'fault' to the process of considerations under section 79 of the Act.

6. Significantly, I am to consider the earning 'capacity' of the parties rather than in simple remuneration by reason of career choice.  I make these comments within the context generally of me being suspicious of the veracity of the husband's evidence generally and as set out above.  In his financial statement sworn as recently as the 2 June 2017 he deposes to continuing the (omitted) business.  This is a business that he has operated from many years and with reasonable income.  He does not claim to be other than in good health.  I am of the view that he has a far greater capacity than does the wife for remunerative income from whatever career choice he makes.  Specifically, however, I find his evidence unsatisfactory as to his 'change of career' from a successful business operator to (occupation omitted).  I also take into account the ages of the parties and agree with Counsel for the husband that he has a slightly longer work life before him than does the wife.  I also take into account the value and content of the property pool and note that the husband will be retaining one home whilst the other property is to be sold and hence the wife will need to re-establish herself in accommodation.

7. In all those circumstances, I am of the view that an adjustment to the wife of 7.5% of the property pool is just and equitable noting such a percentage to be only some $57,000 in dollar terms.

8. Consequently, after consideration of the contributions in section 75(2) factors, I am satisfied that the property pool as set out above should be adjusted as to 57.5% to the wife and 42.5% to the husband. I calculate therefore that the wife will have an entitlement of $437,516 and the husband $323,381 in dollar terms.

9. The husband will retain the Property B property ($215,000), his Nissan motor vehicle ($22,000), cash-at-hand ($80,000), bank account ($13,000), superannuation ($56,000), tools ($5,000) and tractor/containers ($16,600) being a total of $407,000 and I calculate he would therefore make a cash payment to the wife of $84,241.

10. I note that the husband seeks orders for the sale of many of the assets as set out above.  The wife does not appear to object or to want to retain those items.  I note, however, the husband’s attitude generally to these proceedings and cannot be confident that he will be co-operative in any sale process.  As such, I propose to order the transfer of the remaining assets to the wife whereupon she will be free to dispose of them or retain them at her discretion.  I will, however, give the parties liberty to apply in respect of these Orders as I have not heard them specifically as to such transfer orders.

11. I have heard submission from the husband’s Counsel in respect of his admitted dishonest evidence and my consideration of his referral for prosecution on criminal perjury charges will be a separate one.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date:  11 July 2017