Beaufort and Garry

FEDERAL CIRCUIT COURT OF AUSTRALIA

BEAUFORT & GARRY

[2018] FCCA 2786

Catchwords:
FAMILY LAW – De facto property dispute – evidence incomplete and unsatisfactory – husband’s company in liquidation – whether company’s tax debt should be included in the pool – tax debts being wholly personal to the husband – major remaining asset constituted by former matrimonial home – husband seeking 75% of sale proceeds of home and wife seeking 100% – contributions and future needs both assessed as equal – wife to pay husband 50% of value of home and each party to retain their chattels.

Legislation:

Family Law Act 1975

Cases cited:

Stanford v Stanford [2012] HCA 52

Applicant:

MS BEAUFORT

Respondent:

MR GARRY

File Number:

DGC 2479 of 2017

Judgment of:

Judge Burchardt

Hearing dates:

10 & 11 September 2018

Date of Last Submission:

11 September 2018

Delivered at:

Dandenong

Delivered on:

12 October 2018

REPRESENTATION

The Applicant:

In person

Counsel for the Respondent:

Mr Tesoriero

Solicitors for the Respondent:

Lawyers By The Bay

ORDERS

The Applicant pay the Respondent $218,750 within 30 days.
Failing compliance with Order (1), the parties do all acts and things and sign all documents necessary to sell the real property at Property A, being the whole of the land more particularly described in Certificate of Title Volume within 60 days and that the proceeds of sale be applied as follows:
(a)Firstly, to pay costs, commissions and expenses of the sale;
(b)Secondly, to discharge the mortgage and any other encumbrance affecting the real property;
(c)Thirdly, $218,750 to the Respondent;
(d)Fourthly, the balance to the Applicant.
That the sale of the real property be conducted:
(a)By an agent as agreed between the parties and failing agreement, as appointed by the President of the Real Institute of Victoria for the time being (“the selling agent”) and the terms of the sales authority with the agent be in accordance with the standard terms;
(b)At a reserved price agreed between the parties and failing agreement, as determined by the selling agent;
(c)By public auction not less than 30 days from the date of the appointment of the agent.
Unless otherwise agreed, the husband and the wife accept any offer to purchase which is equal to or higher than 95% of the reserve price.
The parties do all acts and things necessary including signing all documents to give full force and effect to the provisions of these orders and in the event that either party refuses or neglects to execute an instrument in compliance with these orders, the Registrar of the Federal Circuit Court of Australia is hereby appointed to execute any instrument in the name of the Applicant or the Respondent and do all things necessary to give effect to the instrument.
That, unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders;
(a)The Applicant and Respondent each be declared to be the sole legal and beneficial owner of all other items of property presently in the possession, custody or control of each of them respectively including, but not limited to money, motor vehicles, furniture, furnishings, appliances, jewellery, equities, choses-in-action and personal effects;
(b)Each party hereby forgoes any claim they may have to any Superannuation benefits belonging to or earned by the other;
(c)All insurance policies to become the sole property of the owner named thereon;
(d)Monies standing to the credit of either party in any bank account are to become the property of that party;
(e)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; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That in the event that the real property is sold pursuant to these orders, the parties have liberty to apply in respect of the sale.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 2479 of 2017

MS BEAUFORT

Applicant

And

MR GARRY

Respondent

REASONS FOR JUDGMENT

Introductory

This is a property dispute arising out of a de facto relationship, which commenced in December 2000 and ended in 2014. It is convenient to refer to the parties as wife and husband. The evidence given is wildly incomplete and unsatisfactory, not least because substantial areas of the parties’ mutual recriminations were not explored in cross-examination and, further, both the two primary witnesses were unsatisfactory in various ways. The Court has to do the best it can in these unsatisfactory circumstances.
Apart from motor vehicles, the only meaningful asset possessed by the parties is the former matrimonial home in Property A, which they agree has a present value of $560,000 and a mortgage of $110,000. The husband seeks 75% of the home’s value and the wife seeks 100%.
For the reasons that follow, I am going to order that each party retain the motor vehicles in their possession and any superannuation that they may have. I am going to order that the wife, who continues to live in the matrimonial home, pay the husband half the value of the home, failing which it will be sold.

The Parties’ Affidavits

The wife’s affidavit filed 9 August 2017 contemporaneously with her application sets out her date of birth (1964) and that of the husband (1960). She deposes to suffering from depression and stress and asserted that the relationship ended on 17 August 2014, having commenced in 2000. She alleged an assault by the respondent husband on 31 December 2014, which led to an Intervention Order on 5 January 2015. From later material, it appears that there have been Intervention Orders in place throughout and that the current one will expire in 2023.
The wife deposed at the commencement of the relationship she had $50,000 cash in the bank and a car, the bulk of which had been inherited from her father’s estate ($47,000) earlier in 2000. The husband had a Motor Vehicle 1 and a Motor Vehicle 2. Otherwise, he had no property. She deposed that she was in possession of a Motor Vehicle 3 worth $8,000. She put the husband’s superannuation at $164,352 and the mortgage on the matrimonial home at $114,000.
She also deposed to a business loan in the sum of $67,472. This related to a company A (“Company A”), which had been registered in March 2013. The wife deposed that in April 2013, the husband took out a business loan in the sum of $60,000, secured against the Property A property, with which he bought a truck for $55,000. She deposed that the husband was retrenched from his employment with (employer omitted) in July 2013, receiving a payout of $104,000, of which $50,000 was applied to their mortgage account on the matrimonial home. She deposed that the balance was spent purchasing classic motor vehicles.
She further deposed that in about January 2014, the respondent withdrew $25,000 from the mortgage account and spent those funds on classic motor vehicles. She deposed that in August 2014, the husband borrowed a further $70,000 once again, secured against the Property A property, with which he bought a truck for $79,000.
The wife deposed following separation she had at the husband’s insistence redrawn $25,000 from the mortgage account and paid it to him. She deposed that following separation the respondent sold the truck for $60,000, but used the funds to his own ends.
The wife deposed that the gross income of Company A was more than sufficient to pay its loan obligations, but this was not occurring.

I note that she deposed to receiving a text message on 1 August 2017 to the effect that the husband had paid the business loan in full. She further deposed that neither party had any superannuation at the commencement of the relationship. She had worked as a (occupation omitted) during the relationship and continued to do so until 31 December 2014.
The wife deposed that she had paid the deposit on the Property A property of $30,000 from the inheritance she received from her father’s estate. The wife deposed that she continued to live in the former family home and paid the mortgage since separation.
The husband’s affidavit filed 4 December 2017 with his Response deposes that he is the sole director and shareholder of Company A. He said the relationship commenced in 2000 and lasted until June 2014. He complained that the wife was an avid gambler and drinker and had spent very substantial amounts of money on those addictions. He annexed as annexure G-1 bank records designed to support these assertions. He went on to depose that the wife had inherited $171,666 from her mother’s estate in 2015, the deceased mother having died 12 months’ before separation.
He deposed that this might explain the delay in the application (his opposition to an extension of time in which to bring the application was formally effectively abandoned by counsel during the running of the trial). He deposed to a number of withdrawals by the wife from the home loan account in the sum of $14,600 and deposed that these were withdrawn by fraudulent signatures executed by the wife in respect of his own signature. He accused her of having abused nine fuel cards. He deposed to having used his own superannuation to pay off debt.
He deposed to having sold shares, likewise, to reduce the company’s and parties’ debts. He deposed to vivid complaint about the alleged failure on the part of the wife to return company records, email address and other matters to him, which were said to have caused a significant loss.
The husband deposed to not having worked for nine months in 2015, because he was caring for his new partner, Ms B. He deposed to a $40,000 tax debt (although precisely what this tax debt was for was not made clear). His relationship with Ms B commenced in 2014 and she is very ill.
The husband put his redundancy payment in July 2013 as $97,000, of which $50,000 was applied to the mortgage, $20,000 to purchasing a Motor Vehicle 2 and the remainder was put into the business account.
It should be noted that annexure G-5, which purports to show the sale of his shares shows that on 7 July 2017 he ceased participation in a dividend reinvestment plan.
I note that a text comprising annexure G-6 shows the wife saying that the business computer was stolen as long ago as 11 September 2015.
Finally, I note that Company A has been placed into liquidation.
It should be noted that in his Financial Statement filed contemporaneously with the affidavit in response, he indicated income of $460 from Ms B and rent paid for him by Ms J in the sum of $400. He gave various values for his cars, to which I shall return, and I note that his tax bill, which was described as income tax, is described at $30,000 - $40,000.
The husband’s next affidavit which supported his application in a case filed 25 May 2018 does not take the matter much further, save that I note that the parties agreed that the Property A property is worth $560,000.
The wife’s affidavit filed on 2 August 2018 in response notes that the truck was sold for $15,000, when it had been allotted a value of $30,000 in the husband’s earlier Financial Statement.
In her amended Financial Statement filed 5 September 2018, the wife deposes to income of $1,100 per week and superannuation in the sum of $19,415. She now values her Motor Vehicle 3 at $5,000. She values chattels at $2,000, but I am not going to allot any value to these, as there is no evidence to support that and such items are almost invariably effective valueless. I note that her credit card debt had gone down from $13,000 in her earlier Financial Statement to $9,000.
In his final affidavit filed 5 September 2018, the husband makes substantial complaint about alleged non-disclosure on the wife’s part. He also deposes at paragraph 6 that the wife was the shadow director of Company A and its bookkeeper. He makes reference to subpoenaed Victoria Police records, which have not been tendered, suggesting these show attempts of the wife seeking to obtain property by deception.
I note that he also observes that he had:
“…cashed in my super…”
to pay debts. He says that Company A lost $38,000 because another business went into liquidation and:
“this loss was the end of Company A …”
(paragraph 27). He asserted, without any formal proof, that the wife had inherited $515,000 in February 2015.
The wife’s affidavit filed 5 September 2018 deposes that she works generally about 40 hours per week. She deposed that she had kept the truck until 31 December 2015 (clearly a typographical error), when she was assaulted by the respondent. She deposed to being unable to work through ill health until May 2018. At paragraph 23(i), she deposed that she was employed by Company A from separation in August 2014 until the respondent took the truck from her in April 2015.
This is, of course, inconsistent with her assertion that the respondent on 31 December 2015 (or even 2014) had demanded the keys from her and assaulted her.
At paragraph 36, the wife deposed that on 26 March 2018, liquidators had been appointed to Company A who discovered that the company owed the Australian Tax Office $132,198. She annexed as B6 a copy of the liquidator’s report, to which I shall return. She further deposed that in 2015 she had inherited $71,422 from her mother’s estate.

Annexure B6 – The Liquidator’s Report

This shows, relevantly, no meaningful assets on the part of the company, but unsecured creditors worth $132,198.88. The liquidators noted that the company had sold a vehicle before their appointment for $15,000, which had been recovered in full. The report noted an alleged tax debt of $94,541.37 and observed:
“I have received a formal proof of debt form from the Australian Tax Office (ATO) in respect of an ordinary unsecured claim. It should be noted that the ATO’s proof of debt reduced by $94,541.37. This appears to be due to the company not having lodged BAS’ since 30 September 2015.”
The report noted that there was no likelihood of any dividend paid to the ordinary unsecured creditors of the company, but under subheading F. Possible recovery actions, noted:
“I note that the company has failed to lodge business activity statements since 30 September 2015, Income Tax Return since 30 June 2016 and PAYG payment summaries since 30 June 2016.
I also note that the ATO and the director are the only creditors.
Given the above, the ATO are able to pursue the director directly for outstanding PAYG amounts and with the consent of the liquidator, an insolvent trading claim. In these circumstances it is not commercial for the liquidator to pursue these matters further.”

The Affidavits of Mr R

Mr R, a Branch Manager with the Bank K, swore an affidavit filed on 6 September 2018. Unfortunately, it emerged during the running of the trial that most of the material in it was hearsay.

The Exhibits Filed in Court

Exhibit R1 is a receipts+payments cash book, filled in by the wife, from 19 April 2013 until the last entry on 1 June 2013. It appears to show the wife endeavouring to keep a careful record of payments made by the business during this period, but it is clear that this was an initial attempt, which rapidly came to an end.
Exhibit A1 is a series of bank records relating to the business loan taken out by Company A and its business transaction account. The business loan, it is clear, was indeed paid out in full on 1 August 2017. I note that contrary to the evidence given by the parties, a loan of $85,000 was taken out on 22 July 2014.
The business transaction account may or may not, as the applicant asserts, shows moneys coming in in excess of $1 million, but it also shows moneys going out at a roughly commensurate rate. At no time did the business transaction account ever rise to any great level.

The Evidence Given at Court

The submissions and evidence of the wife

The wife said in opening the relationship was not a good one for a long time. The husband had an accident in 2007, which involved a head injury. He was never the same after that. She has paid the mortgage and rates for the last four years and she sought that the house be signed over to her. She proposes to pay the mortgage and has done so thus far.
The wife adopted her affidavits and Financial Statements as true and correct.
Under cross-examination, the wife conceded that the valuation of $150,000 she allotted to Company A was simply her estimation. There was no valuation of it either at separation or since. The value is just her opinion.
The wife conceded that the company had been placed into liquidation. She had heard this before she received the liquidator’s report. Word gets around in the (business) industry. She had rung the liquidator and they sent her a copy of the report. She had not been paid any superannuation. The only reason the company had no value was because the husband had sold the assets.
The wife says she did not know if the company owes the Australian Tax Office over $100,000.
The wife conceded that there were no valuations to the husband’s classic cars, but she had adopted what he had paid for them. He had paid $11,000 for a Motor Vehicle 4 and this would have gone up.
The wife knew that the husband had 1000 shares. She did not know what they were sold for, but she had told him to buy them.
The wife was cross-examined about the $25,000 redraw allegedly given to the husband. She said they went to the bank together 10 days after separation. He had demanded $25,000 and this was transferred directly to his account. It comes up as a cash transfer, but is just a credit. He had not provided his bank account.
I interpolate and say that this is one area of the wife’s evidence that was given with conviction and which I accept.
The wife said she had never been the bookkeeper for Company A. She is a (occupation omitted). She just checked that invoices were paid and gave everything to the accountant. She was not a shadow director either. Only the husband and herself were involved in Company A. She gave everything to the accountant at the end of the street. The wife stated she paid the husband’s first tax bill, but they split up six weeks later. She does not have access to the records of Company A. She said they were getting paid and fuel was being paid.
Any mail addressed to Company A she put back in the letterbox with a suggested forwarding address. She said she had had a phone call from the Bank Manager saying he would send correspondence to her. This was after he had missed the third payment. Correspondence about Company A was nothing to do with her. These answers, I should say, were unbelievable, as she had plainly opened some of the correspondence and it had all the appearance of being made up on the run.
The wife said that when the husband walked out, she had no access to Company A’s affairs. He gave her access for a couple of weeks, but then changed it. Separation was on 17 August 2014. She said she recognised the cash book (exhibit R1), which she had filled in for 10 days. This answer was inaccurate, as it turned out she had continued until June.
The wife conceded sending a letter to the husband urging him to refinance and suggesting to tell the bank he had broken his leg. She said this was just a jest.
When taxed with annexure R-1 to Mr R’s affidavit, these being a number of withdrawal letters ostensibly signed by both the husband and wife, the wife said that the husband signed these. She said this was when they were still speaking. This was around when the $25,000 was handed over. He signed them blank at the matrimonial home and said she could use them for the redraw. This was to pay the bills and mortgage. She said the husband does not have much conversation. He knew she was not irresponsible. It would have been for bills.

He signed about 10 of these pieces of paper. It was never an issue until she started proceedings in August 2017. Things were nasty by the end of 2014. The wife said she was still making withdrawals until the end of 2017, because the husband was not helping at all.
The wife was cross-examined about fuel cards. She said she drove the truck for six months after separation and it needed fuel. He stole the truck. He took the truck on 9 April 2015. She no longer has the fuel card, which was in the truck when he took it. She said she did not think she still had a fuel card for her car.
When asked about specific fuel card numbers, the wife said she had no idea what they were. She adamantly denied abusing the fuel cards she had previously had. She said to counsel:
“I don’t care what you say. I had nothing to do with fuel cards in 2016.”
Once again, I would interpolate and say that this aspect of the evidence was given with conviction and I accept it.
The wife denied drawing down $56,000 on the mortgage since separation. She said she had withdrawn down about $10,000, but had paid $70,000 into the mortgage. She denied taking $79,707 out of the Company A account since separation. She said that the husband cut her off. For six months after separation, she drove the truck. She was not paid holiday pay or superannuation. She has had no access to Company A’s accounts since separation. She could not recall a withdrawal in June 2015 and had repeated she had no access to the Company A account.
The wife said she earns $1,200 per week gross as a (occupation omitted). She has been unemployed most of the time since he took the truck away. She has tried to work, but it has been a couple of months. She has no medical evidence. She was unemployed from 9 April 2015 when he took the truck, but had undertaken ad hoc work here and there. She had one eight hour shift in six months. She had a couple of Adelaide trips in May to June 2016. It emerged that she had worked for a number of different entities. She said she reported all of this to Centrelink. She had emailed all her payslips to the husband’s solicitor.
When asked if she had re-partnered, she said she had not really re-partnered. A man in Court was a friend of hers of 30 years who was very well off and assists her financially. Sometimes he pays bills and sometimes petrol. He helps out here and there. Another friend in Court also helps here and there as well. She does not live with Mr F. He would lend her if her electricity was going to be cut off. She currently owes him about $3,000.
The wife said she had some superannuation when the relationship started, but it was not much. She said she had a superannuation statement for the husband, which she had only found the other day, when she was throwing stuff out. This answer was transparently unbelievable and the statement was never produced.
The wife says she still does not have the documents relating to her inheritances. The Company A computer was stolen a long time ago and she thought the husband took it. This was while she still had the truck. The wife denied being under the influence of alcohol in Court. She said she was unable to recall the Company A email code. She last used it before separation in August 2014.
When she was taxed with an email in September 2015 showing her using the Company A email account, she was driven to admit that she had used it. She said she obviously did know the password, but did not now. She did not accept that the husband had applied his superannuation to debts. She did not know what he had done with his shares.
The wife said she had about a $50,000 inheritance before the relationship started. $30,000 was used on the deposit for the home. She did not apply the inheritance from her mother to debt. She used it to survive on and to pay the mortgage over the last four years. It had been agreed they would have a truck each, but the husband changed his mind and put her out of a job. She had lost her licence during the relationship. This was once. She thought it was before her mother died in about 2010.
In re-examination the wife repeated that she never had a fuel card from the day the husband took the truck. The card probably stayed in the truck.

The submissions made by counsel for the husband and the husband’s evidence

Counsel indicated that he was seeking the orders indicated in the Outline of Case. The net position was that the property was worth $560,000 with a mortgage of $115,000 (it seems clear that it is $110,000 now). The liquidator suggests that Company A owes $110,000 after liquidation and the husband as sole director may face sole responsibility, although it is his position that the wife was a shadow director. He submitted that any tax should be paid out of the sale of the home. This would leave a resultant pool of $340,000.
The husband had put in $130,000 of superannuation, $104,000 redundancy payment and $25,000 from the sale of shares. The wife had only put in $30,000 to the matrimonial home. The wife’s negative contributions were made through gambling and transfers to herself. Future needs were roughly equal and the parties could be said to have similar working capacity. The husband should receive an adjustment in respect of contributions. The wife was withdrawing funds until the end of 2017. It was submitted the wife had provided no proof of her capacity to refinance to pay out the husband.
The husband was called and adopted his affidavits and Financial Statements as true and correct. He said he is retired at the moment. Company A had been placed in voluntary liquidation.
Under cross-examination by the wife, the husband said he closed his superannuation after separation and received $186,000, which he transferred to his bank account. He said this was gone paying bills. He paid out the company loan, cash bills, credit card bills and personal bills. He accused the wife of refusing to refinance the truck. He had about 900 shares and received $26,000 from their sale. He could not recall if it placed into his bank account, but he no longer has it. He had to live, as he was not working. He was paying bills and every day living costs.
He had registered Company A in 2013 and so he was the owner, not a sole director (this answer was given with force and conviction, but it is plainly untrue, as Mr Garry’s own affidavits make clear).
The husband conceded that the wife drove the truck until April 2015. He said she was paid superannuation. She was paid as a bookkeeper. He asserted that this was shown in exhibit R1, but despite his study of it in the witness box, he could not find any entries to support that proposition.
The husband said he did know if the accountant prepared tax returns. He said the wife gave him all the materials and that she handled it all. He said he did change the registered address of the company after separation and changed the address with the bank. He said that company mail was readdressed and that he had the mail redirected. He said the wife had the email address and it was impossible to file BAS as a result. None had been filed after September 2015. He could not do anything without the email address.
The husband did not agree he had failed in his duties as a director. The company ceased trade in March 2018. He sold the truck in 2016 for $60,000 and used it to pay fuel bills. He sold the other truck two to three months ago for $15,000, which paid the liquidator. At the moment, he is driving a truck for a friend who is in jail. Company A is no longer registered. He did not agree that the bank accounts of Company A would show payments between 2014 and 2018 of over eleven hundred thousand dollars, and professed ignorance about a number of transactions put to him by the wife.
He denied transferring funds out so that the company became insolvent. He said that Ms J is the wife of a friend of his and that he does not pay rent. Friends help him. He is waiting for his friend to get out of jail. In response to a question from the Court, Mr Garry confirmed that his (hobby) club is, in fact, the (name omitted).
The husband, when the matter resumed on 12 September 2018, denied being employed by (employer omitted) and denied driving a (employer omitted) truck to Court the previous day. When questioned about Ms B’s medical costs, the husband said that Ms B does all the bookwork. He admitted taking the truck and leaving the wife without work in April 2015. When it was put to him that he had access to the bank account, but made no complaints until property proceedings were commenced, the husband said he complained when he noticed them. The bank said it would be investigated. The truck was sold and proceeds went to the liquidator. He drove it between April 2015 to 2018. He has lost his licence after separation for demerit points.

The Evidence of Mr R

Mr R adopted his affidavit as true and correct. Unfortunately, it rapidly emerged that the visits to the bank to which Mr R had deposed had not in fact, as the affidavit suggested, been seen or evidenced by him but by other employees. The hearsay evidence was plainly inadmissible. However, Mr R admitted that Mr Garry had contacted the Suburb A branch. Both parties shared the funds. He was not a handwriting expert.

Findings about the Credit of the Parties

It is always regrettable to make findings of parties or witnesses that are critical of them. In this case it cannot, however, be avoided. I have already made a number of comments critical of the wife as a witness. Some of her speech was very difficult to follow and she presented at times as being, for whatever reason, scarcely coherent. Her answers about the documents tendered to the bank ostensibly signed by both the parties as recently as 2017 were utterly unbelievable. Her explanation is that the husband signed these documents in blank form in 2014, after separation, but when interpersonal relationships were still not collapsed, for her to pay bills into the future.
Her own evidence was that things were nasty by the end of 2014. She was still transferring substantial sums of money out of the home loan redraw facility to her own benefit as late as 18 October 2017. The withdrawal documents all give Mr Garry’s address as the Property A house, when this plainly was never the case.
Whether or not the signatures on the documents are genuine (and they certainly approximate Mr Garry’s signature on his affidavit material), I have no doubt, one way or the other, these were improperly procured by the wife for her own benefit. However, in the particular circumstances of the case, I am less concerned with the almost certainly fraudulent nature of the documents than with the fact that they show the wife drawing substantial sums of money to her own benefit. On any view, these cannot have been used to pay the mortgage, because they were redraws against the mortgage account.
While there were aspects of the wife’s evidence that were given with conviction and which I found believable, the above remarks, together with the more precise indications already made, show that I will have to approach the wife’s evidence with considerable caution.
That, however, is scarcely the end of the matter. It should be noted that no questions were put to the wife in any kind of detail that I can recall (what I set out above is taken from my notes) to substantiate the notion that she had gambled or drunk away huge amounts of money. Rather, cross-examination concentrated upon the fuel cards and the abstractions from the loan account.
Whatever reservations one might have as to the wife’s evidence, however the husband was no better. He presented as an intense man and had all the appearance of being likely to explode with anger at any moment. Some of his answers were completely unbelievable, for example, his alleged lack of understanding of Ms B’s medical costs. I regret to say that he impressed me as being no more inherently believable than the wife herself.

Findings about the Facts

Doing the best I can, the following narrative appears to me more probable than otherwise. The parties met at an earlier date, but commenced their relationship in 2000. The wife already had an inheritance of some approximately $50,000, of which $30,000 was later applied to the deposit for the Property A property. Neither party had anything otherwise of any moment at the commencement of the relationship. Both of the parties worked throughout the relationship.
In 2013, the husband established Company A and he plainly applied his redundancy payment of approximately $100,000 partly to that initiative and partly to the mortgage account on the home and partly to his enthusiasm for classic cars.
Loans appear to have been taken out to buy both of the trucks that the business bought, but which were ultimately sold.
Company A was never a sophisticated operation. It owned two trucks and had two persons working for it. Contrary to his extraordinarily firmly expressed denials in the witness box, Mr Garry was the sole director and shareholder. A passing reference on his part to the wife being the company secretary is impossible to evaluate, as no historical company record has been provided. The wife made a brief essay as a bookkeeper, which lasted for less than three months. I accept that the wife simply received the invoices and sent everything off to the accountant to be dealt with.
It should be noted that Company A was only in operation from 2013 until 2014 before separation occurred. It is clear, as I find, that the wife paid more attention to the running of the business than did the husband, who appears to have perhaps have concentrated his affairs on his interaction with the (hobby club) and his car enthusiasm (this being a criticism made by the wife in final submissions). The wife continued to work by driving her truck, as it were, until April 2015 when the husband repossessed.
I do not find that the wife has spent substantial amounts of money on fuel cards. Her denials were given with conviction and I accept them.
Although there is no medical evidence to support it, the wife’s evidence that she did not generally work from 2014 until relatively recently is largely to be accepted. It must be said that she was untruthful in seeking to minimise the amount of ad hoc work she did receive from time to time, but, as I find, the amounts she made were never sufficient to disturb her receipt of Centrelink benefits. I am unable to say whether the wife has gambled or drunk large amounts of money away. I am simply not sufficiently convinced by the evidence put forward by the husband to make such a finding.
It is clear that the wife has continued to pay the mortgage, which has reduced to the sum of $110,000, but it is equally clear that she has drawn improperly on joint funds from time to time to do so. The Court has not been given any meaningful forensic assistance in this regard and it is not possible to make detailed findings. I note that there is a spreadsheet breakdown annexed to the husband’s Case Outline, which purports to take these matters further, but detailed cross-examination foreshadowed in the Outline of Case arising out of subpoenas to the Bank 1 and Bank 2 has not eventuated.
For whatever reason, including very possibly a bad business debt, Company A failed. I accept that the husband paid out the business loan, because the bank records show that this has occurred. I am not able to say that he has contributed his superannuation in toto to the operating debts of the business or indeed to any other debts; likewise, the shares. I accept on balance that the shares have been sold, although the document designed to prove this does not do so. The husband’s description of the amount he received for the sale of shares was given with conviction and I accept it.
Quite how he was able to cash out his superannuation is not clear. He has not produced any documents to show a hardship application or anything of that sort. It may be that he has reached an age where superannuation can simply be accessed. No evidence has been given to support this proposition.
In the end, I am prepared to accept that the husband must have somehow accessed his superannuation to enable him to pay down the debts that were in the company. Given that the company operated with the participation of the wife from mid-2013 till April 2015, and continued to operate for a further three or so years thereafter until it was placed into liquidation, it seems far more probable than otherwise that any debts that accrued to Company A were the responsibility of the husband.
I appreciate that all this is painting with an incredibly broad brush, but there really is no other alternative.

Stanford v Stanford – Should There Be a Property Adjustment?

In this case, as in so many cases, the answer to this question can be shortly stated. The basis upon which the parties conducted their financial affairs when they were together has radically altered and each of them seek a property adjustment. There plainly should be one.

The Pool

The matrimonial home is worth $560,000 and has a mortgage of $110,000. The wife has a car which I will value at $5,000. This is the figure given in her most recent material. The husband’s cars, which I will take as a concession against interest taken from his Financial Statement, are a Motor Vehicle 2, $13,500; Motor Vehicle 5, $12,000; Motor Vehicle 6, $4,000; and Motor Vehicle 7, $7,000.
The truck deposed to in his Financial Statement has, of course, been sold for $15,000 and that money is gone.
The husband has no superannuation and the wife has some $19,000 odd.
Given that it is the wife’s position that neither party had any superannuation of any moment at the commencement of the relationship, and given that she says she has scarcely worked in the years 2015 to 2018, in my view, her superannuation should be included in the pool in its entirety, although she should retain it to her benefit.
The husband’s business has no value whatever. It has been liquidated.
Similarly, although there may be PAYG taxation owing, it is plainly PAYG owing on the husband’s wages since separation. If there is any such liability, it is his and not the wife’s. Any other taxation liabilities with the company would simply be disposed of by virtue of the liquidation. I note that the ATO has only lodged proof of debt as a simple, unsecured creditor.
Neither party has any chattels of any value worthy of inclusion in the pool.

Contribution

Counsel for the husband sought to persuade the Court that some sort of arithmetical calculation should be made to contrast the amounts of money contributed to the business with that of the wife. The trouble is that those contributions have produced, in effect, a nil outcome. I accept that the wife has the benefit now of not having a $67,000 business loan to deal with. It should be noted that the sums involved in the loan account were progressively decreased during periods of time that the wife was not a contributing employee. This contribution stands to the husband’s credit.
Correspondingly, however, it was the wife’s original $30,000 that enabled the parties to actually buy the matrimonial home that constitutes their most significant remaining asset.
This was a relationship which lasted for some 13 or so years. Both parties did their best. True it is that the wife has retained her inheritance post-separation, but leaving aside the question of future needs, there is no reason why she should not have reasonably have done so.
The wife has, of course, frittered away her inheritance, it would seem, over time. It is possible that there has been some element of wastage on her part, but it is not possible, given the three-year period that she has been largely out of work to say whether this is really excessive or not.
In circumstances where as I have said more than once the evidence is scarcely sufficient, and in doing the best I can, I find the contributions to have been equal.

Future Needs

The wife, whatever her mental health and other problems are, is back at work and working full time. The husband, like the wife could, in my view, easily obtain employment, should he desire to do so. The parties’ future earnings are likely to be of roughly equal amount and they are not of greatly disparate age. In my view, there should be no adjustment in respect to future needs.

Conclusion – Just and Equitable

In the somewhat chaotic history of the matter, in all the circumstances, in my view, a solution that gives the parties half of the pool each is appropriate. I have made the necessary calculations to work out how much the wife needs to pay the husband to achieve this outcome (see Annexure A). She says she is capable of paying the husband out, but I have considerable doubts that this will be the case. I will provide orders that give the wife one month to come up with the requisite funds, failing which there will be the usual orders for the sale of the property.

I certify that the preceding one hundred and two (102) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 12 October 2018

Annexure A

Matrimonial home  $560,000
Wife’s car$5,000
Husband’s Motor Vehicle 2                  $13,500
Husband’s Motor Vehicle 5  $12,000
Husband’s Motor Vehicle 6  $4,000
Husband’s Motor Vehicle 7              $7,000
Wife’s Superannuation  $19,000
TOTAL: $620,500

Less Mortgage $110,000

TOTAL $510,500

Wife receives $255,250

Car $5,000

Superannuation $19,000

Cash $231,250

Husband receives $255,250

Husband’s cars $36,500

Cash $218,750

[2018] FCCA 2786

12 October 2018

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Injunction

Constructive Trust