Ballantyne and Sands
[2016] FCCA 1464
•17 June 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BALLANTYNE & SANDS | [2016] FCCA 1464 |
| Catchwords: FAMILY LAW − Where distribution of matrimonial assets between parties already made − whether just and equitable to make an order. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79, 79(4), 81 |
| Cases cited: Kowaliw and Kowaliw (1981) FLC 91-092 |
| Applicant:: | MR BALLANTYNE |
| Respondent: | MS SANDS |
| File Number: | DGC 519 of 2015 |
| Judgment of: | Judge Phipps |
| Hearing date: | 24 May 2016 |
| Date of Last Submission: | 24 May 2016 |
| Delivered at: | Dandenong |
| Delivered on: | 17 June 2016 |
REPRESENTATION
|
ORDERS
That the husband have sole ownership and possession of the Toyota Land Cruiser and (omitted) Caravan now in his possession.
That the husband and wife sign all documents and do all things necessary to have the registration of the Toyota Land Cruiser transferred into the husband’s name.
That the wife have sole possession and ownership of the (omitted) Corolla Sedan now in her possession.
That within fourteen days the husband nominate:
(a)A date and one hour period of time, being a date not less than seven days and not more than 21 days after the date on which he makes the nomination upon which boxes of goods be made available by the wife to be collected;
(b)The name of the person, not being the husband, who will collect the boxes of goods.
That the wife make available for collection by the husband on the date and during the period of time nominated, boxes of goods for collection by the person nominated by the husband. The number of boxes and contents of those boxes are to be at the sole determination of the wife.
That the husband not attend at the wife’s premises with the nominated person.
That if the husband does not make the nominations of date and time and name of the person as set out in paragraph 4, or if the boxes of goods are not collected within the period of time on the nominated date the wife, in her sole discretion, may dispose of, or retain in her sole possession and ownership the goods in the boxes.
That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned or in the possession of such party as at the date of these orders;
(b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
That otherwise all extant applications are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Ballantyne & Sands is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DANDENONG |
DGC 519 of 2015
| MR BALLANTYNE |
Applicant
And
| MS SANDS |
Respondent
REASONS FOR JUDGMENT
Introduction and proposals
The husband and wife were married for 53 years. The marriage has come to an end and there is very little in matrimonial property. There is a disputed debt. The application is for a payment or alteration of matrimonial property.
The husband sets out his proposals in his affidavit affirmed and filed 5 April 2016. His proposals, in paragraphs 26, 27, 28, 29, 30, 31, and 32, are not in a form usual for an order under s.79 of the Family Law Act 1975 (Cth).
Paragraph 26 (without following the husband’s format) is: my money that she spent overseas whilst I was sick (what I paid), $5,000, Pension she stole $680, refund from dentist $213; what Ms Sands took out of what was a fair distribution of $100,000, $1,373; half share of what was in (omitted) Bank account; $1,803, half share of what I could find out in our (omitted) Bank account $1,201; half share of (omitted) Bank Saving account $351; half share of Xmas club account $150; half share of what Ms Sands received from mower $250; half share of what Ms Sands received from Quad Bike $250; half share of over $30,000 worth of assets the (omitted) took, $120. The total is $12,091.
Paragraph 27 is a series of items, tools and equipment and other items. The husband alleges that the wife threw them out. He asks for $10,000.
Paragraph 28 is a proposal that the wife give him $10,000 and that she retains everything in the sewing room.
Paragraph 29 proposes the sale of a diamond solitaire ring, diamond earrings, 2 pearl necklaces and an emerald ring and the even division of the proceeds.
Paragraph 30 proposes the wife pay him $25,000 for what she did with the company’s assets. They include a Ride on Mower, Quad Bike and (omitted) Trailer. He alleges the wife disposed of assets at far below the proper value.
Paragraph 31 is a detailed proposal for the division of household goods.
Paragraph 32 proposes a court order for the wife to sit in a room with the husband and his three daughters and explain a whole series of acts which he sets out in the paragraph. I explained to the husband this is not an order that the court can make.
The wife’s proposal is that the husband’s application should be dismissed, that he transfer the registration of the Toyota Land Cruiser he retains into his own name and collect boxes of items currently at her residence. The Toyota Land Cruiser remains registered in the name of one of the parties trust companies, both of which the wife says have been deregistered.
Property proceedings
An application under s.79 is an application for the alteration of existing property interests, that is, property interests which exist at the date of the hearing. In Stanford v Stanford [2012] HCA 52 the High Court said at [36], [37].
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 of exhaustive definition [21]. It is not possible to chart its metes and bounds. And while the power given by s 79 is not to be exercised in accordance with fixed rules [22], nevertheless, three fundamental propositions must not be obscured.
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. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
In some circumstances money spent, the value of assets disposed of or devalued and liabilities incurred following separation may be added back. In Mayne & Mayne [2011] FamCAFC 192; (2011) FLC 93-479 the Full Court says at [72-[74]:
72 . Parties to proceedings about the division of property before the Family Court (and the Federal Magistrates Court) frequently urge the Court to add-back assets or funds that have been applied by one party or another for allegedly his or her own purposes after separation. The rationale is that one party should not benefit from a premature distribution of the assets. An obvious example is withdrawing and using money from a bank account either joint or owned by one of the parties. It is also the case that the parties may decrease the pool by increasing liabilities. The issue in such cases is whether the liability should be a joint liability or a liability only of the party who created it.
73. The application of the funds removed (or the debt incurred) may have been for a personal purpose (for example, to pay legal fees) or it may have been applied in the sustenance of a party or the children of the parties.
74. If the former is the case this has generally found to be a pre-emptive unilateral division of property. If the latter is the case then the principles enunciated in Marker v Marker [1998] FamCA [42] and NHC & RCH [(2004) FLC 93-204] apply. If the money was, or part of the money, was used to meet reasonable living expenses then that money, or that part of the money, is not “added-back” or regarded as a pre-emptive distribution.
In some circumstances “waste” by one party may be taken into account. Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 said at 76, 644:
As a statement of general principle. I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Except for money in bank accounts, jewellery, household goods and what the husband describes as contents of the wife’s sewing room, each of the amounts sought by the husband, if they are to be taken into account, will have to come within the addback or waste considerations.
Background
The husband was born on (omitted) 1940. The wife was born on the (omitted) 1937. They married on (omitted) 1961. They separated about 10 March 2014. There are three adult daughters of the marriage.
A brief description only of the history of the parties’ relationship is needed. The wife says that from 1961 until 1971 the parties, in partnership with the husband’s father, conducted a business (business omitted) and (business omitted). The husband says it was not a partnership and that he bought his father out in 1967 and after that his father worked for a wage. The business failed and both parties were declared bankrupt in 1971.
The parties give considerable detail but broadly, with the participation and assistance of the wife’s father, they ran a (omitted) business known as (omitted business) on (omitted) at (omitted).
In 1972 (business omitted) began trading as (omitted business) on a month-to-month lease from the (omitted) at (omitted). The husband worked seven days a week and the wife worked in the (omitted business) on weekends. The wife completed a (omitted) Degree at (omitted) University during this time. The wife was released from bankruptcy in 1972.
Again, with the participation of the wife’s father, land at Property G, was purchased and the parties erected a house. This property was sold it seems in 1975 and the wife’s father was repaid money he had lent. The parties differ on the amount which was repaid. They then purchased 30 acres of land in Property C and established their (omitted business) and home there.
The wife says that (omitted business) became very successful until 1976. They went into a joint-venture (omitted business) with their solicitor and his wife known as (omitted business) in (omitted). The business failed in 1978 with, according to the wife, losses in excess of $1 million. The husband says the losses were $1.5 million.
The parties sued their former solicitor. The Supreme Court of Victoria action took seven years and was heard in 1988. They reached what the wife describes as a Commercial Settlement of $185,000. The husband says the settlement was $125,000. They sold their house and after the bank was paid out, only $60,000 was left. The house in Property C was sold in 1988.
In 1987 the wife returned to university for two years and gained a (qualifications omitted). She obtained full-time employment in about 1989 as a (occupation omitted) with the (employer omitted).
The parties through the Trustee of one of their family trusts (omitted business), Pty Ltd, purchased Property R in 1988 and started a (omitted business). The parties dispute to some extent where the money came from. The wife continued working for the (employer omitted) for another two a half years and then worked full time in the (omitted business).
The wife’s mother died in 1998 and she inherited $80,000. $50,000 was paid into the (omitted) business and she used the remainder largely on the family home.
In 2000 the parties, or their corporate trustee, borrowed $80,000 from the wife’s brother. While the husband claims the money was borrowed by the corporate trustee, there is a written loan agreement between the wife’s brother and the parties signed by both parties. While the husband initially said he had no recollection of it he did acknowledge his signature. Later a further $26,000 was borrowed. Whether any money is still owed to the brother is one of the issues.
The wife says the business ceased trading and closed in 2008. The wife says that (omitted) bought all the remaining (omitted) stock which left them with a $100,000 debt to the (omitted) Bank. The property was put up for sale but there were no offers.
In 2011 the business was reopened. The wife says this was against her wishes. A further $100,000 was borrowed from the (omitted) Bank. The debt to the bank increased to $490,000 and in February 2013 the Bank withdrew support and the business ceased trading. A mortgagee auction was held on 12 October 2013 with the property sold for $600,000. Settlement was on 13 December 2013. The parties lived in their caravan in a caravan park in (omitted) for a few weeks and on 15 January 2013 moved to a rental property at (omitted) owned by their son-in-law.
Assets and liabilities
The parties separated in March 2014. The parties to an extent agree on what happened at separation. The husband, alleging that the wife had been abusive towards him, said he would take the parties Toyota Land Cruiser and (omitted) Caravan, other various goods and $25,000 and the wife retain the rest.
The husband took the Toyota Land Cruiser and the wife paid $23,627.50 into his bank account. She sent the husband a letter dated 14 March 2014 in which she advised him of the deductions. These were;
a)Half the cost of a skip to remove the items from the yard of (omitted). The wife described it as “the mess you left within and around the shed in the backyard”.
b)Half the final electricity bill for (omitted) for $85;
c)Pharmacy costs incurred while the husband was in (omitted) hospital, $34.05; and
d)Half the amount of a loan to one of their daughters to fix her car, $1,500.
The parties dispute the amount they had in bank accounts in March 2014. The husband says it was $100,000 and he alleges that comes from a document the wife gave him. He also says he went through the documents he could find and found a total of $92,329.65. He sets all this out in annexure B2 to his affidavit affirmed 27 April 2015. The wife says it was about $75,000.
The document the husband says the wife gave him lists three (omitted) Bank term deposits totalling $15,000 and five (omitted) Bank term deposits totalling $60,000. It then has under the listing of the five (omitted) Bank term deposits on entry “At Call 25,000”. The wife acknowledges that the term deposit entries were made by her but she did not write the entry “At Call 25,000” nor the totals. She said there was no money at call.
Each of the eight entries for the term deposits lists an account number the amount and the maturity date. The At Call amount does not have an account number and is in noticeably different handwriting. The wife says that following settlement there was $100,000 but there were then expenses of about $26,000 to be paid. The husband’s annexure B2 includes a statement that the wife had spent $29,700 on 1 March which is some confirmation of what the wife says.
The husband’s list of accounts which total $92,329.65 does not contain dates or account numbers. The wife was looking after the parties’ finances, the husband by his own statement was unwell and not able to. I am satisfied on the balance of probabilities that the wife’s evidence of the amount the parties had in early March 2014 is correct, that is about $72,000 to $75,000. The wife says that at the time of separation there was $60,000 in (omitted) Bank term deposits in joint names plus $10,000 in the (omitted) bank account.
Prior to leaving the property the parties conducted a clearing sale. The husband became ill with polymyalgia rheumatica and was hospitalised for long periods of time between April and October 2013 and when at home was largely disabled. He conducted a clearing sale with some difficulty and subsequently the wife sold the business assets. She mostly managed the settlement of the sale and the move from the (business omitted) property.
The husband alleges that the wife disposed of assets for less than a proper value. He says that the most valuable assets were the (omitted), the (omitted) Machine and the Truck. None sold at the clearance sale. After the clearance sale the husband was hospitalised again and the wife sold the (omitted) for $7,000, the (omitted) machine for $15,000 and the truck for $1,000.
The husband says that after the clearance sale a potential purchaser offered $7,000 for the (omitted). The husband says there were 60 steel uprights that had to be pulled out as they were concreted in. The husband says the purchaser told him it would cost $20,000 to pull down and re-erect them at his own (business omitted). The purchaser of the property heard the discussion and offered $7,000. The husband went to hospital and the wife, through the real estate agent, sold the (omitted) to the real estate purchaser for $7,000. The husband says there was no hurry for the sale and he believes he could have negotiated the potential purchaser for up to $25,000.
(omitted) Machine was passed in at auction for $14,000. The wife, again through the agent, subsequently sold it for $15,000. The husband says the (omitted) machine had cost nearly $40,000, and was almost new, he said could have got at least $25,000.
The wife sold the truck for $1,000. The husband believes it should have been sold for more. The wife says registration was due and she sold it for $1,000 to somebody who was going to use it for parts.
The husband alleges that a mower and Quad Bike should have achieved more. The wife sold the mower for $1,500. He says it was in the depreciation schedule at $8,000. He makes a similar allegation about the Quad Bike. He owned a large amount of tools and various other items, some of them in a container. The wife says she obtained a quote from the (omitted) of $200 per truckload to remove these items and they estimated three loads plus tipping fees. (omitted) of (omitted) removed these items at no cost and for no remuneration.
The wife was in a position where the property had to be cleared of all the (omitted business) equipment. The husband was unable to help. The assertions by the husband are no more than that. Perhaps more could have been obtained but to use the words of Baker J, the wife has not “embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets”, or that the wife “has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value”.
The husband says that at separation he retained these assets:
a)(omitted) Toyota Land Cruiser;
b)(omitted) Caravan;
c)Linen, Electric cooking oven and vacuum from the caravan;
d)(omitted) 60L refrigerator/freezer; and
e)(omitted) 201 generator.
The husband estimates the Toyota Land Cruiser and (omitted) Caravan had a market value of $54,000 at the time of separation.
The wife says that at separation she retained the money in the bank accounts less the $23,627.50 paid to the applicant. She retained household furniture and her clothes and personal items. She says that at the time of the hearing there was a $10,000 term deposit at (omitted) Bank and $30,000 on term deposit at (omitted) Bank. She says she purchased a second-hand (omitted) Corolla Sedan for $14,800. Otherwise she has household goods and personal possessions including the jewellery the husband refers to.
The wife says that the Toyota Land Cruiser had been fitted with long-range tanks, (omitted) Heavy Duty Springs and lambs wool seat covers. She alleges the value of the Toyota Land Cruiser was greater than $29,000 and annexes copies of advertisements for similar vehicles showing prices of $32,000 and $45,200. The wife says that the (omitted) Caravan was insured with (omitted) for an agreed value of $40,000.
The wife says that in addition to the items he refers to, the husband took a 240 volt and 12 volt colour TV, satellite disk, two electric drills, one electric sander, two chainsaws, one circular power saw, 5 x 60 litre boxes full of antique woodworking tools, $300 cash from the sale of a fridge and freezer, $1,000 cash from the sale of the shipping container, 10 x $20 notes in mint condition and CDs.
Thus the wife alleges that at separation, the husband took assets, the Toyota Land Cruiser and (omitted) Caravan valued at significantly more than $54,000, a cash amount of $23,627.50 and other assets which are not valued. The wife retained about $62,000 plus household goods and personal possessions, including jewellery which are undervalued.
The matrimonial assets at the time of the hearing are the Toyota Land Cruiser and (omitted) Caravan and whatever other items the husband retained. None have been valued by a suitably qualified valuer.
The wife has $50,000 in a term deposit and what she describes as second-hand furniture all showing damage and signs of 51 years of wear and tear. She has a motor vehicle which she purchased for $14,800. There is no professional valuation.
Section 79
The approach in applications made under s.79 is first to determine the property held by the parties, the liabilities and then determine whether it is just and equitable to make an order and then consider the parties contributions taking into account the considerations in s.79(4) and then whether any adjustment should be made for the matters in s.75(2).
The property is described above. The husband has the Toyota Land Cruiser and the (omitted) Caravan with disputed valuations by the husband and the wife but no professional valuation. He has a number of other items which are not valued but given the nature probably have little value if the husband was to sell them. He has some money.
The wife has $50,000, second-hand furniture which is not valued and her personal items which includes some jewellery again not valued. The husband asserts a value for the jewellery based on what he has seen in jewellery shops but a retail value may be no indication of what a private seller could obtain.
There is a dispute about the debt to the wife’s brother. He lent $80,000 and then another $26,000. For a period of eight or nine years the husband says the business paid him $8,500 - $9,000 yearly. The husband estimates a payment of $66,000.
The husband says that he gave the brother an acknowledgement from one of the parties’ trust companies, (omitted) Pty Ltd trading as (omitted) that it owed the money. The wife tendered the original of an agreement. It takes the form of a printed copy of an email sent on 30 June 2003 which is then signed. The email reads:
Dear Mr D,
We, Mr Ballantyne & Ms Sands agreed to borrow from you the sum of $60,000 for a period of 12 months the rate of 10% interest.
The sum of $115.00 will be paid directly into your bank account every Wednesday.
We offer you what is left after the bank has its go, the remainder of the assets are security.
The document is signed by both the husband and the wife. The husband initially said he had no recollection of the document. When shown the document during his evidence he acknowledged it as his signature and then appeared to accept that he did sign the document.
The wife says that her brother has said that money can come to him from her estate so that the amount is not presently payable.
Both parties, the husband in particular, filed extensive affidavits about their life together. The only conclusion that can be drawn is that contributions were equal taking into account the financial and non-financial contributions, the contributions as homemaker and the care of the children. The wife acknowledges that the husband worked very hard in their businesses. She also worked in the businesses and had periods of employment outside. The parties raised three children. The husband alleges some conduct of the wife in the running of the business which caused loss but none of it comes within the type of behaviour which would constitute waste.
So far as the matters under s.75(2) are concerned, both parties sole income is the age pension. The husband lives in the caravan at the rear of a friend’s property. The husband makes no payment to the friend. The wife lives in a house which at the hearing was described as being owned by one of the parties’ daughters and that daughter’s husband, although it appears the husband is the sole owner. A residential tenancy agreement dated 10 March 2013 shows that the wife pays $1,474 per month in rent. The parties’ incomes are equal. The wife’s living circumstances are more comfortable but she pays rent while the husband does not.
Thus, if there was to be an order made it would be on the basis that the parties contributions throughout the marriage were equal and that no adjustment is required for the matters in s.75(2). Apart from the $50,000 the wife has in bank accounts none of the parties’ assets are valued. The wife has a small motor vehicle, the Toyota Corolla and the husband has a larger motor vehicle, the Toyota Land Cruiser and he has a caravan in which he lives. The husband proposed the division of assets which occurred at the time of separation. He says that if the wife had not deducted money from the amount of $25,000 agreed to be paid to him he would have gone and she would never have heard from him again.
The husband is obviously bitter about the circumstances in which the marriage came to an end. There is one occasion shortly before the parties left the Property R property where he considers he was particularly badly treated. He was taken to hospital where he spent some hours in the Emergency Department. He had broken ribs and he was in considerable pain. When he was taken from the house police were present. Whether or not he was badly treated is not relevant in this property application and whether the wife’s behaviour otherwise, including to the running of the business and the use of money, is not relevant except as it goes to the question of waste. I have made a finding about this issue.
The conclusion from these considerations is that following the end of the parties’ marriage there has been an appropriate distribution of what assets the parties had left. It is not just and equitable to make an order except in respect of items in boxes at the wife’s property which the wife acknowledges the husband can take.
The Toyota Land Cruiser, according to the wife, is registered in the name of a deregistered corporation. She proposes an order that the husband transfer the registration into his name. The husband retained the Toyota Land Cruiser. Transfer of the registration may require the cooperation of both parties. I will order that each party take the steps necessary to have the registration transferred.
I will make an order that the husband nominate a date and time upon which a person he nominates will attend the wife’s premises to collect boxes of goods which the wife in her sole discretion, considers should be collected by the husband.
The wife fears that if the husband attends without some control of his behaviour he might become abusive and aggressive. Given the husband’s attitude to the wife during the hearing there are some grounds for her fears. In those circumstances I will order that the husband not attend the premises for the collection of the goods.
I will include in the order that if the husband does not nominate a date and person as required or if the nominated person does not collect the boxes of goods on the nominated date then the wife is at liberty to dispose of them.
I make it clear that I am making no finding and making no order about what should be in the boxes of goods the wife leaves for collection by the husband. To ensure that there is finality and no further proceedings between the parties, a requirement of s.81 of the Family Law Act1975 (Cth), the number of boxes and what is in the boxes is to be determined solely by the wife.
I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Judge Phipps.
Date: 17 June 2016
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Property Law
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