BAREN and JILES

[2019] FCWA 42

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY COURT ACT 1997

LOCATION: PERTH

CITATION: BAREN and JILES [2019] FCWA 42

CORAM: DUNCANSON J

HEARD: 24 JANUARY 2019

DELIVERED : 8 MARCH 2019

FILE NO/S: PTW 3899 of 2017

BETWEEN: MR BAREN

Applicant

AND

MS JILES

Respondent

Catchwords:

PROPERTY - Where loans from family member found to exist - Where husband made greater initial contributions - No adjustment for s 205ZD(3) factors

Legislation:

Family Court Act 1997 (WA) s 205ZD(3), s 205ZG,

Category: Reportable

Representation:

Counsel:

Applicant	:	Self-Represented Litigant
Respondent	:	Self-Represented Litigant

Solicitors:

Applicant	:	Self-Represented Litigant
Respondent	:	Self-Represented Litigant

Case(s) referred to in decision(s):

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1[Mr Baren] and [Ms Jiles] are unable to agree about the division of their property.

2For convenience I shall refer to the parties as husband and wife, although they were not married.

3The parties agree that their [Property A] should be sold. The husband's position is that from the sale proceeds a debt to his father should be paid and thereafter the net proceeds divided 60% to him and 40% to the wife.

4The wife's position is that no debt is owed to the husband's father and the net sale proceeds should be divided equally between the parties.

THE ORDERS SOUGHT

5The orders sought by the husband are contained in the applicant's Papers for the Judicial Officer filed 17 January 2019. The husband proposes that Property A be sold. Upon the sale, after payment of the usual selling costs and adjustment of rates and taxes, the sum of $103,800 be paid to his father, [Mr Baren Snr] and the balance be divided 60% to the husband and 40% to the wife.

6The parties would otherwise retain the assets and liabilities in their respective names.

7The orders sought by the wife are contained in a Minute dated May 2018. The wife proposes that the parties appoint a selling agent to sell Property A. After deduction of the usual selling costs and adjustments for outstanding rates and taxes, the net sale proceeds be divided equally between the parties. The wife also proposes that the parties otherwise retain the assets and liabilities in their respective names.

THE PARTIES AND THE EVIDENCE

8Both parties were self-represented litigants. Both gave honest evidence. A significant issue in dispute was whether a debt payable to Mr Baren Snr exists. Although both parties gave evidence as to this much from their own perspectives, I am satisfied that their evidence was truthful and to the best of the recollection of each of them.

9The husband relied on his trial affidavit filed 30 April 2018. Annexed to his affidavit was a Book of Exhibits extending to in excess of 330 pages. Some of the exhibits related to matters not in dispute. Others were invaluable in the process of determining whether Mr Baren Snr had lent money to the parties and whether the money had been repaid. At the commencement of the trial the husband agreed with my suggestion that he identify a particular exhibit upon which he relied and this would be noted accordingly. In the event, the husband was unable to do so. The affidavit had been prepared by his solicitors and he explained the evidence was "all there". The husband relied on his evidence as set out in the affidavit, but in cross‑examination or in answer to my questions, he had difficulty recalling or explaining the precise financial details.

10Where the husband's oral evidence differed from his affidavit evidence, I prefer the affidavit evidence as it was mostly supported by bank statements. The parties' funds became intermingled with those of Mr Baren Snr’s and funds were transferred between various accounts. I have had to do the best I can to follow the money trail in determining the issues.

11The wife's affidavit filed 15 May 2018 contained a number of paragraphs referring to "without prejudice" offers made between the parties at various times. These paragraphs were struck out.

BACKGROUND AND SHORT FINANCIAL HISTORY

12The husband was born [in] 1963. He is 55 years of age. He is a sales person.

13The wife was born [in] 1968. She is 50 years of age. She is a [contracts coordinator].

14The parties lived in [Country A]. They commenced dating in 1989. In 1992 they ceased dating but maintained a casual intimate relationship.

15The parties' first child, [Child A] was born [in] 1997. The parties commenced cohabitation in April 1998. The parties' second child [Child B] was born [in] 1999, and their third child [Child C] was born [in] 2004.

16Between 1988 and 1998, the husband bought and sold property. He also established a business called [Business A].

17In February 1998, the husband purchased [Property B] [in] Country A in the wife's name for £195,000. The purchase was funded with the sale proceeds of [Property C] of £100,000, the husband's savings of about £45,000 and a loan in the wife's name of £50,000.

18Between 2004 and 2013 the parties visited Western Australia and decided to migrate to Western Australia.

19In 2013 the husband wound up Business A and the parties relocated to Perth in September 2013.

20[In] October 2013, Property B was sold. [In] December 2013, the sum of $582,075 was transferred to the husband's bank account, being the net sale proceeds of the property.

21In January 2014 the husband commenced employment with [Company B].

22[In] January 2014, Mr Baren Snr transferred the sum of $73,800 to the husband's Commonwealth Bank account.

23In February 2014 the parties purchased Property A in the wife's sole name. The total cost associated with the purchase was $638,585.

24The parties separated [in] 2015. The husband moved into rental accommodation in [Suburb M] at a cost of $500 per week. The wife remained in Property A. At separation the husband held funds of $85,000.

25In December 2015 and March 2016 the husband transferred funds to a Commonwealth Bank account in the name of his father totalling $65,000 by way of repayment of a loan. The husband subsequently drew on those funds and other funds held at separation to meet his living expenses and legal costs.

26

After separation Child A lived with the husband for about 12 months. Child C lived with the wife, but in about October 2018

Child C moved to live with the husband.

27The wife continues to reside in Property A. She is in a relationship but does not cohabit with her partner.

THE LEGAL PRINCIPLES

28These proceedings are governed by s 205ZG of the Family Court Act 1997 (WA) ("the Act"). Orders altering the property interests of the parties may only be made if the Court is satisfied that it is just and equitable to make such orders.

29It is necessary firstly to identify the existing legal and equitable interests of the parties in their property.

30Having identified the existing legal and equitable interests of the parties in their property, it is necessary to ascertain whether it is just and equitable to make an order altering the interests of the parties in their property. In that process it is permissible to consider the contributions of the parties, but to do so is not mandatory, nor it is conclusive as to whether the just and equitable test has been met.

31If and when the Court determines it is just and equitable for the parties' interests in their property to be altered the Court must identify and assess the contributions of the parties within the meaning of ss 205ZG(4)(a), (b) and (c) of the Act. The Court must then identify and assess the relevant matters referred to in ss 205ZG(4)(d), (e), (f) and (g) of the Act which include those in s 205ZD(3).

THE EXISTING PROPERTY INTERESTS OF THE PARTIES

32The parties were able to agree the existence and value of most of their property. The disputed items are set out below.

Loan from Mr Baren Snr

33The husband deposed that he borrowed funds from his father to assist with relocation costs and expenses.

34The husband said in August 2013 his father lent him $20,000. He said the money was used to purchase flights and for cash. This was corroborated by Mr Baren Snr who said he lent £10,000 to the husband. [In] July 2013, the sum of $16,530 titled "[COUNTRY A] PAYMENT Admin" was credited to the husband's account which he said was the balance of the $20,000 loan, less the cost of airfares.

35The husband rejected the wife's suggestion that the funds provided by Mr Baren Snr were funds collected by him on behalf of the husband in respect of the sale of cars and other assets in Country A.

36The parties did not have paid employment upon their arrival in Australia. Their property in Country A had not sold. I accept that Mr Baren Snr lent the husband funds. There was no evidence of payment of air fares. I find the amount lent was $16,530 being the amount credited to the husband's account. This is likely to be the approximate equivalent of £10,000. [ATO Foreign currency exchange rates for calendar year 2013.]

37In relation to the purchase of Property A, the wife said she and the husband had sufficient funds to meet the cost of the property and associated expenses. The husband said they had insufficient funds to cover the stamp duty and there was a shortfall of $80,000. He said his father encouraged them to purchase Property A and offered to lend them money to assist in this respect. The husband accepted Mr Baren Snr’s offer.

38The wife said she was not aware of any loans by Mr Baren Snr to the husband. The husband said the wife was involved in discussions regarding the purchase of Property A and aware that they could only increase their offer as a result of a loan from Mr Baren Snr. I am unable to make a finding about this, but as stated below I am satisfied funds were received by way of loan.

39The husband deposed that his father loaned him approximately $83,800 to purchase Property A. The husband deposed this was made up of payments of $70,000 on 24 January 2014 and $10,722 on 11 February 2014 to his Commonwealth account. Those two payments total $80,722. The husband does not know when the balance of $3,078 was transferred.

40The bank statements disclose that on 24 January 2014, the sum of $73,800 was credited to the husband's Commonwealth account. This was marked "[COUNTRY A] PAYMENT Admin". Then $70,000 of this was transferred to the husband's account, being the $70,000 I have referred to at [39] above.

41The husband deposed that $10,722 was paid into his account on 11 February 2014, which is correct. There is not however a corresponding "[COUNTRY A] PAYMENT" of this amount and no indication that it came from Mr Baren Snr.

42Mr Baren Snr deposed he loaned the husband and the wife £40,000. He said he transferred to the husband two amounts of £20,000 on 24 January 2014. He considered this equated to approximately $80,000.

43The wife said the husband and his father frequently transferred money between each other's accounts. She said she and the husband always had separate accounts. She said she was not aware that the loan had been made.

44I accept the husband's evidence that his father advanced him $73,800 in January 2014. This is likely to be the approximate equivalent of £40,000. [ATO Foreign currency exchange rates for calendar year 2014.] The husband's evidence is corroborated by that of Mr Baren Snr and the bank statement demonstrates that these funds were received. It was not established upon the evidence that a further sum of $10,722 was advanced to the husband by Mr Baren Snr.

45I find the total of the sums lent by Mr Baren Snr to the husband to be $90,330. Mr Baren Snr said he requires repayment when the husband is in a position to finalise his financial affairs. He stated he has three other children and he requires the return of the funds.

Was the loan repaid?

46The husband said after purchasing Property A he had a surplus of funds which he deposed were "essentially owed to my father". He moved them into a GoalSaver Account. The closing balance in the GoalSaver Account as at 30 April 2015 was $85,000. The husband said and I accept that he held those funds as at June 2015 when the parties separated.

47The husband deposed that the sum of $85,000 was money he considered he owed to his father which needed to be returned.

48The husband subsequently accessed part of those funds for his living expenses.

49During a visit to Australia, Mr Baren Snr opened his own Commonwealth Bank account and the husband paid funds into Mr Baren Snr’s account. He paid $8,000 on 16 December 2015, and $57,000 on 2 March 2016, to that account.

50As at 2 March 2016, the husband had repaid Mr Baren Snr $65,000. The husband deposed, "I consider these amounts represented some of the funds I owed my father".

51I find that of the sum of $90,330 advanced, $65,000 was repaid directly to Mr Baren Snr.

Funds held by husband at separation

52Although it is not entirely clear, it appears that the husband may not have needed to borrow the funds, which is consistent with the wife's belief that they had sufficient funds to purchase Property A. After the purchase had been completed, the husband had a surplus of funds.

53At separation the husband held funds of $85,000 as set out above. $65,000 was paid to Mr Baren Snr. The balance of $20,000 was applied by the husband to his own purposes including rent and living expenses. That balance represented funds in which both parties had an interest. Had they been applied to the purpose for which the husband said they were intended, namely repayment to Mr Baren Snr, the remaining debt to him would have been $5,330. I find the sum owed by the parties jointly to Mr Baren Snr to be $5,330.

The husband's subsequent borrowings

54The husband borrowed money to meet his legal costs and living expenses from Mr Baren Snr by drawing on the amount of $65,000 which he had repaid to Mr Baren Snr. He did this with Mr Baren Snr’s consent. The husband deposed he borrowed a total of $84,531 from Mr Baren Snr from 1 January 2016 to date of his trial affidavit, which was sworn on 30 April 2018. He also deposed he currently owes Mr Baren Snr $104,531.

55While repayment may be required by Mr Baren Snr, the husband's borrowings and use of those funds were his alone. The funds were applied to his post-separation living expenses. The wife had no involvement in any arrangement between the husband and Mr Baren Snr that the husband may access the funds which had previously been repaid to Mr Baren Snr. This is a debt due by the husband to Mr Baren Snr for which the wife has no responsibility. In my discretion I do not intend to include it in the balance sheet. The loan will probably be repaid by the husband when the financial matters between the parties have been finalised. I shall take into account the liability and the circumstances in which it was incurred when considering matters relevant to s 205ZD(3) of the Act and in particular s 205ZD(3)(o).

Legal costs

56The husband has paid legal costs of $51,000. The source of funds was the funds repaid to Mr Baren Snr and subsequently borrowed back. In my discretion I do not intend to add back the paid legal costs and as stated above I do not intend to include the loan in the balance sheet.

57The wife has paid legal costs of $12,000. Her legal costs have been paid from her post-separation income. In my discretion I do not intend to include her paid legal costs in the balance sheet.

Balance Sheet

58I find the property of the parties to be as follows:

ASSETS	Owner	Value
[Property A]	W	$560,000
Bank account	H	$7,500
Bank account	W	$9,000
[Car A]	W	$15,000
Furniture	H	$500
Furniture	W	$10,000
Total Assets	$602,000
LIABILITIES
Debt owed to [Mr Baren Snr]	$5,330
Total Net Assets	$596,670

IS IT JUST AND EQUITABLE TO MAKE A PROPERTY SETTLEMENT ORDER?

59The parties separated over three years ago. Both parties seek a property settlement order in that they both seek an order for the sale of Property A and the division of proceeds.

60There is no longer any common use of property by the parties.

61The parties seek to separate their financial affairs. In these circumstances I find it just and equitable to make a property settlement order.

CONTRIBUTIONS

62At the commencement of cohabitation the husband owned properties which he subsequently sold. The wife did not have any assets of any significance. Shortly prior to the commencement of cohabitation the husband purchased Property B in the wife's sole name. It was not in dispute that the husband applied the sum of £145,000 being the sale proceeds of another property and his savings to the purchase of that property, which represented his assets at the commencement of cohabitation. The husband also owned a business although its value was not known. The husband assumed a conversion rate of $2 to £1. It was not in dispute that the value of the husband's assets at the commencement of cohabitation was approximately $290,000.

63Property B was sold on 17 October 2013 after the parties' relocation to Perth. The net sale proceeds of approximately $580,000 were applied to the purchase of Property A.

64During the parties' cohabitation the husband was the primary income earner and the wife was the primary carer of the children. Both parties worked hard in their respective spheres. The parties agree that their contributions during the relationship were equal and I agree with that assessment.

65After the parties separated the wife occupied the unencumbered Property A. The husband rented accommodation at a cost of $500 per week. Mr Baren Snr paid the husband's rent for the first six months and lent him funds associated with the costs of furnishing the property. These amounts are included in the amount owing to Mr Baren Snr.

66After separation Child A lived with the husband for about a year and Child B and Child C remained with the wife. At the time of separation Child A was over 18 years of age, Child B was 16 years of age and Child C was 10 years of age. The wife was critical of the husband's lack of financial provision for the children. The wife applied for child support. She deposed that the husband was furious with her for doing so and intimidated her into contacting the child support agency requesting that they do not collect child support. The wife was subsequently granted an exemption and received Family Assistance payments from Centrelink. The husband denied behaving in an intimidating manner towards the wife. He said they agreed he was unable to pay child support and she withdrew her application.

67The husband contributed to Child B’s school fees, but otherwise the wife was largely responsible for financially supporting both Child B and Child C until Child B turned 18 years of age [in mid] 2017 and Child C commenced living with the husband in about October 2018.

68The wife retained [Car B] at separation. She subsequently traded that for $3,000 against the purchase of a new Car A for which she paid $24,500. That vehicle is included in the balance sheet at a value of $15,000.

69Since separation both parties have remained in employment.

ASSESSMENT OF CONTRIBUTIONS

70The value of the husband's assets at the commencement of cohabitation was greater than that of the wife. During the relationship both parties worked hard and contributed equally. Since separation the children have lived with both parties and Child C is currently living with the husband.

71I have considered the parties' differing contributions in the particular circumstances of their relationship from the commencement of cohabitation to date of trial. In my assessment by reason of contribution the percentage division should be 55% to the husband and 45% to the wife.

72The effect of this finding as to contribution is that the husband is entitled to receive property of $328,168 and the wife is entitled to receive property of $268,502.

SECTION 205ZD(3) FACTORS

73The husband is 55 years of age. The husband has health difficulties, for which he is prescribed medication.

74The wife is 50 years of age. She [also] suffers from [health difficulties] for which she takes medication.

75The husband is employed as a sales person. He estimates his gross annual income to be approximately $65,000. The wife is employed as a contracts coordinator. Her gross annual income is $68,500. Both parties are capable of appropriate gainful employment.

76The husband has an interest in a [Pension Fund A] with a pension of £10,128 per annum upon retirement. The wife has an interest in an individual retirement plan with [Pension Fund B], with an annual income of approximately £1,160 upon retirement.

77The husband has an interest in [Superannuation Fund A] with a value of $25,063. The wife has an interest in [Superannuation Fund B] with a value of $14,246.

78Child C who is aged 14, currently lives with the husband and spends time with the wife. Child C experiences some mental health difficulties.

79Both parties have commitments which are not unreasonable.

80Neither party is eligible for a pension, allowance or benefit.

81The wife is in a relationship with [Mr C]. She does not cohabit with him. Both parties seek to enjoy a comfortable standard of living. The parties' relationship endured for approximately 17 years. No child support is paid by either party to the other.

82As to any other circumstance the justice and equity of the case requires to take into account, the husband said he owes his father over $100,000.

83The husband said after the parties separated he was unable to meet his living expenses from his income and was unable to access the equity in Property A to obtain accommodation.

84The husband left Property A [in] June 2015 and obtained rental accommodation at a cost of $500 per week. He deposed that he was earning $800 per week. He estimated his expenditure to be $1,140 per week. His expenditure included rent of $500 per week, credit card payments of $75 per week and entertainment of $100 per week.

85The husband deposed that his father paid his rent for the first six months and this was done by the husband drawing on funds held in his account, which had not yet been returned to Mr Baren Snr.

86The husband also borrowed $5,000 for costs associated with furnishing the property, although of that the sum of $4,019 was applied to the cost of a radio.

87During 2016, the husband accessed the funds he had paid to his father as set out above. He deposed he had borrowed a total amount of $84,531 from January 2016 to the date of his affidavit, which was sworn on 30 April 2018. The husband deposed that he was living beyond his means as he had been unable to access the equity in Property A. His father assisted him by transferring funds to assist in meeting his expenses, including his credit card payments. The husband deposed that the wife enjoyed sole use of her income and sole enjoyment of Property A and has not been required to contribute to rental payments as he has.

88I have taken into account the wife's occupation of Property A and the husband's occupation of rental property when considering the parties' respective contributions post-separation.

89The wife deposed that since separation she worked full-time and continued to support the children in every capacity she could.

90The wife said the husband has a generous father. Her position is that the husband made a lifestyle choice to live beyond his means and the level of expense he incurred was unnecessary. The wife was critical of the husband's expenditure in this respect. She considered the rent of $500 per week to be excessive and as was the cost of the radio in the sum of $4,019.

91The wife deposed the husband has had three holidays since separation. She has had to be very careful with money, managing with the second-hand furniture provided by neighbours and she has not had any holidays.

92I consider that both parties struggled financially after separation. The funds held in the account presented a ready supply of money for the husband to draw on, with Mr Baren Snr’s consent. Approximately $51,000 was applied to the husband's legal costs. Although the husband had to obtain rental accommodation, I am not persuaded that the husband's expenditure in this respect was reasonable and that he was unable to meet his needs.

93In the circumstances I do not consider the husband's debt to Mr Baren Snr warrants an adjustment in his favour.

94I consider the most relevant s 205ZD(3)(o) factors are:

•the husband's care and control of Child C; and

•the husband's greater pension and superannuation benefits.

95In my discretion taking the s 205ZD(3) factors as a whole, I consider no adjustment is warranted.

JUST AND EQUITABLE

96The overall distribution of property will be 55% to the husband and 45% to the wife. The total of the parties' property is $596,670. The husband's entitlement is $328,168 and the wife's entitlement is $268,502. There is a differential of 10% or $59,667.

97The husband retains the following:

Bank account	$7,500
Furniture	$500
Share of the net proceeds of [Property A] (after payment of debt to [Mr Baren Snr])	$320,168
TOTAL	$328,168

98The wife retains the following:

Bank account	$9,000
[Car A]	$15,000
Furniture	$10,000
Share of the net proceeds of [Property A] (after payment of debt to [Mr Baren Snr])	$234,502
TOTAL	$268,502

99Property A is to be sold. From the sale price will be deducted the costs and commissions on sale, the adjustments for outstanding rates and taxes and the sum I have found due by the parties to Mr Baren Snr.

100The actual amount to be received by each party will be that which gives effect to the percentage division which I have determined is just and equitable. The amount will be calculated by reference to the balance sheet as set out at [58] above together with the actual net sale proceeds of Property A after deduction of the costs and commissions on sale, the adjustments for outstanding rates and taxes and the debt to Mr Baren Snr.

101Both parties will receive significant funds to assist them financially in the future. The husband will receive a greater share of the sale proceeds of Property A, but he will have to repay his loan from Mr Baren Snr.

102In the context of this relationship where the husband made a significant initial contribution and both parties worked hard in their respective spheres, I am satisfied the orders I propose to make are just and equitable.

THE PROPOSED PROPERTY ORDERS

103I propose to make the following orders.

1The parties do all things and sign all such documents as necessary to place the property situate and known as [Property A] in the State of Western Australia on the market for sale as Joint Trustees with a Selling Agent and at a Selling Price to be agreed and if not agreed, at a Selling Price as recommended by the Selling Agent from time to time.

2Upon the sale of [Property A] the proceeds of sale be disbursed as follows:

(a)in payment of all sales costs including the selling and conveyancing fees; and

(b)in payment of outstanding rates and taxes;

(c)in payment of the sum of $5,330 to [Mr Baren Snr];

(d)the balance be paid to the parties to effect an overall division of assets 55% to the Applicant and 45% to the Respondent with reference to the balance sheet, a copy of which is attached to these orders and in respect of which all values are fixed save and accept for the value of [Property A] which shall be the actual sale price less the actual selling cost and adjustments for rates and taxes.

3Any interest of the Respondent in the following vest in the Applicant absolutely:

(a)all personal possessions, furniture and effects in the Applicant's possession;

(b)the Applicant's interest in [Pension Fund A] and [Superannuation Fund A]; and

(c)all bank accounts held in the Applicant's sole name.

4Any interest of the Applicant in the following vest in the Respondent absolutely:

(a)all personal possessions, furniture and effects in the Respondent's possession;

(b)the Respondent's interest in [Pension Fund B] and [Superannuation Fund B];

(c)all bank accounts held in the Respondent's sole name; and

(d)the Respondent's [Car A].

5That unless otherwise specified in these orders:

(a)each party be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank's record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlement; and

(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.

6The Applicant and Respondent do all acts and things and give all consents and execute all documents necessary to give effect to these orders.

7The Applicant and Respondent have liberty to apply with respect to the implementation of these orders.

8The proceedings otherwise be dismissed.

9In relation to material tendered as an exhibit into evidence in these proceedings:

(a)all parties must collect the exhibits tendered by them (“their exhibits”), from the chambers of Justice Duncanson, at least 28 days, and no later than 42 days, from today’s date;

(b)all parties must contact the chambers of Justice Duncanson to arrange the collection of their exhibits;

(c)in default of compliance with subparagraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the court without notice to the parties.

10In the event of an appeal being lodged prior to the expiration period of 42 days, paragraph 9 above does not apply.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

RM
Associate

8 MARCH 2019