Carlisle & Neely
[2022] FedCFamC2F 1539
Federal Circuit and Family Court of Australia
(DIVISION 2)
Carlisle & Neely [2022] FedCFamC2F 1539
File number(s): MLC 6289 of 2021 Judgment of: JUDGE HARLAND Date of judgment: 11 November 2022 Catchwords: FAMILY LAW - property - short relationship - length of relationship disputed - significant initial contributions - family violence - whether or not there should be an adjustment Legislation: Family Law Act 1975 (Cth) ss 4AB, 79(2),(4), 90SF(3)(a), (3)(k), 90SM(1),(3),(4), s90SF(3),(3)(a),(3)(k) Cases cited: Aleksovski v Aleksovski (1996) FLC 92-705
Benson & Drury [2020] FamCAFC 303
Bevan and Bevan [2013] FamCAFC 116
Dicksons v Dickons [2012] FamCAFC 154
Froth v Froth [2007] FamCA 1608
Robb v Robb (1995) FLC 92-555
Stanford & Stanford [2012] FamCAFC 1
Woodcock and Woodcock (1997) FLC 92-739
Division: Division 2 Family Law Number of paragraphs: 122 Date of hearing: 17-19 October 2022 Place: Melbourne Counsel for the Applicant: Mr Stanley Solicitor for the Applicant: Freeman Family Law Solicitor for the Respondent: Mr Robertson of Ian Robertson Legal ORDERS
MLC 6289 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CARLISLE
Applicant
AND: MR NEELY
Respondent
order made by:
JUDGE HARLAND
DATE OF ORDER:
11 November 2022
THE COURT ORDERS THAT:
1.Within 60 days the Respondent will do all acts and things and sign all documents necessary to transfer to the Applicant at the expense of the Applicant all of his right, title and interest in the property at B Street, Suburb C more particularly described in Certificate of Title Volume … Folio … (“the transfer”).
2.Contemporaneously with the transfer the Applicant discharge or refinance the mortgage registered number … to Company D (“the mortgage”) to remove the Respondent as a liable borrower and indemnify the Respondent against all payments and all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
3.In default of the discharge or refinance of the mortgage, the Applicant shall forthwith take all necessary steps and execute all necessary documents to cause the property at B Street, Suburb C, to be placed on the market for sale and sold by auction (‘the sale’).
4.At settlement of the sale, the proceeds of the said sale be disbursed as follows:
(a)First, payment of the agent’s commission and advertising and legal expenses of the sale;
(b)Second, payment of the money due and owing to the mortgagee; and
(c)Third, such that the Applicant receives 100% of any part of the proceeds of the sale which remains outstanding.
5.Contemporaneously with the transfer the Respondent discharge the Personal Loan registered number … to the National Australia Bank (“the Personal Loan”) and indemnify the Applicant against all payments and liabilities pursuant to the Personal Loan.
6.The Applicant otherwise retain the balance of any funds in any bank accounts in her name, Motor Vehicle 1, household contents and other assets in her respective possession.
7.The Respondent otherwise retain the balance of any funds in any bank accounts in his name, the business known as Company E, Motor Vehicle 2, Motor Vehicle 3, boat, work tools, dirt bikes, trailer, and any other assets in his respective possession.
8.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 party to all other property (including choses-in-action) in the possession of such party as at the date of these orders including but not limited to the shareholdings as or in the respective name of each party;
(b)Insurance policies remain the sole property of the beneficiary named therein;
(c)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these orders;
(d)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(e)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
9.In the event that either party fails to comply with these Orders, then the Registrar of the Federal Circuit and Family Court of Australia is empowered and authorised to exercise all necessary documents on behalf of the non-complying party pursuant to section 106A of the Family Law Act 1975 (Cth) and by way of consequential arrangement to this order:
(a)An affidavit by the compliant party and/or their solicitor setting out the non-compliant party’s failure to comply with these orders will be sufficient evidence of non-compliance; and
(b)The compliant party nominate a solicitor who is authorised to sign documents of PEXA transfers and such solicitor shall sign on behalf of the non-compliant party upon the written request from the compliant party to do so upon provision of a sealed copy of these Orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Carlisle & Neely has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE HARLAND
The parties were in a short de facto relationship. The main asset in dispute between the parties is the property situated at B Street, Suburb C (“B Street, Suburb C property”). The legal title of the property is in both of the parties’ names as tenants in common in equal shares. The mortgage is in the parties’ joint names.
There are no children of this relationship. The applicant has 3 children from a previous relationship who lived with her throughout the relationship and continue to do so. At the beginning of the relationship the applicant’s sons were aged 13, 9 and 8. The respondent has two children, one of whom was 8 at the beginning of the relationship and lived with the parties half the time during the relationship.
Counsel for the applicant opened the applicant’s case asking the court to make five findings of fact:
(1)The parties were in a short de facto relationship;
(2)All the capital for the purchase of the B Street, Suburb C property was paid by the applicant;
(3)Any financial contributions made by the respondent is less than half of what he would have been obliged to pay in rent;
(4)The applicant was subjected to family violence throughout the relationship including threats and physical assaults;
(5)The parties signed a separation agreement in 2018 and thereafter acted as though they were bound by that agreement.
The applicant says the property and the mortgage should be transferred to her sole name and otherwise the parties should keep the assets they have in their possession and control.
The respondent says that whilst the applicant’s initial contributions must be given significant weight, he also made significant contributions and should receive 25% of the parties’ net assets.
Issues in Dispute
The five issues I must determine are:
(1)What are the parties’ legal and equitable interests and what assets should be included in the asset pool?
(2)What is the length of the de facto relationship?
(3)What weight should be given to the parties’ respective contributions including:
(a)The applicant’s initial contributions to the purchase of the B Street, Suburb C property;
(b)The works carried out on the B Street, Suburb C property;
(c)Homemaking and parenting contributions; and
(d)Post separation contributions.
(4)What weight should be put on the applicant’s allegations of significant family violence impacting on her contributions?
(5)What are the extent of the parties’ respective earning capacities and whether there should be any adjustments under s90SF(3)?
impressions of the witnesses and evidentiary issues
The applicant provided detailed evidence in her trial affidavit filed 19 September 2022 with respect to family violence. Her evidence was not shaken during cross-examination and her evidence was detailed and consistent.
The applicant relied on an affidavit by her 18-year-old son filed 19 September 2022. In his affidavit he refutes the respondent’s assertions that he was significantly involved in caring for him and his brother and outlined an incident where the respondent physically assaulted him. He was required for cross-examination. He gave his evidence in a straightforward manner that was consistent with both his affidavit evidence and also his mother’s evidence. One striking example was when it was suggested to him that the respondent would do painting around the house, he responded spontaneously stating that the respondent never did any painting which is consistent with the mother’s evidence that the respondent would do plastering and other works, and that he refused to do any painting.
In contrast, the respondent’s evidence was vague and his evidence when cross-examined was inconsistent and unconvincing.
One of the major disputes between the parties is whether or not the work done by the respondent was defective or whether it increased the value of the B Street, Suburb C property. Neither party provided any expert evidence enabling the court to determine this issue. The applicant annexed a statutory declaration from a friend who did some of the works to her trial affidavit which was struck out as it is inadmissible.
Both parties sought to rely on the valuation of the B Street, Suburb C property to support their respective arguments. In his trial affidavit, the respondent anticipated that the valuation which was not yet available would show the property as having doubled in value. The valuation however is of limited assistance in this regard, noting that the valuer was not asked to assess what value the works added or detracted to the value of the property.
The respondent annexed several tables to his affidavit which purported to summarise various transactions which he says supports his argument that he made significant contributions during the relationship. These annexures were also struck out as being inadmissible despite his advocate disavowing any attempt to engage in an accounting exercise, which was indeed what the annexures purported to do. Documents like these created by a party are unhelpful and inadmissible as it is impossible to know the basis upon which the summary was collated and what was excluded and whether or not it is accurate. It would be necessary to study all of the bank statements.
It became apparent during the cross-examination of the respondent that he has little understanding of financial matters and it is extremely unlikely that he authored those summaries without considerable assistance.
What weight should be given to Dr F evidence?
The applicant relies on an affidavit by her treating GP Dr F filed on 9 September 2021, however, he was not available for cross-examination due to being overseas. As the respondent’s advocate indicated, Dr F does not give the basis for her opinion as to the applicant’s mental state and the reasons for it. What it is evidence of is the applicant attending the clinic and relevantly reporting on 23 April 2018 with anxiety and panic attack as being due to relationship issues. That is not proof of that fact. Dr F annexes reports from a psychologist in 2018, but that is not admissible to prove any diagnosis of mental illness. What it does establish, along with the other documents annexed to the applicant’s affidavit is that she sought assistance to deal with the impact of the violence on her. As Dr F was not able to be cross-examined, I do not place any weight on her opinions.
Legal Principles
Both parties provided me with a list of authorities before making their closing submissions and made submissions with respect to their respective legal arguments. I will not set out all of these references. Given the parties’ respective cases, it is useful to begin by discussing the relevant legal principles before analysing the evidence and determining the issues in dispute.
Part VIIIA is the part of the Family Law Act dealing with property, spousal maintenance and maintenance agreement between de facto partners. The major provisions relating to de facto property division are contained in ss.90SM(1); 90SM(3), 90SM(4); and 90SF(3) of the Family Law Act.
The High Court considered the operation of s.79 of the Family Law Act (which has almost identical terms to s.90SM) in the matter of Stanford & Stanford [2012] FamCAFC 1. In this case, the majority stated at [35]-[36] that:
35. “It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”
36. The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:
1. Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.
2. Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
3. Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).
In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.
The High Court also pointed out that what is just and equitable is different in every case.
The principles referred to in Stanford are equally applicable to de facto property matters.[1]
[1] See Watson & Ling (2013) 49 Fam LR 303.
Counsel for the applicant stressed the High Court’s comments in support of his contention that other than transferring the B Street, Suburb C property subject to the mortgage into the applicant’s sole name and the National Australia Bank loan to the respondent’s sole name, they each keep what assets they have.
One of the issues of controversy between the parties is whether or not the parties entered into a separation agreement on 9 May 2018 and whether or not the parties acted in accordance with that agreement. The applicant acknowledges that the agreement is not legally binding, but argues that the agreement supports both her contention as to the parties separating in 2018 (acknowledging that there was a reconciliation the length of which is disputed) and that this is relevant to the Court’s determination of what orders would be just and equitable. Part of the applicant’s case is that the parties acted as if they were bound by the 2018 separation agreement and this must be taken into account when considering a just and equitable outcome.
The parties’ legal and equitable interests
At the end of the trial the parties handed up a joint balance sheet showing items in contention and items that are agreed.
The parties agree that the B Street, Suburb C property has equity of $686,795.
Asset Value Liability Equity B Street, Suburb C Property $845,000 $158,205 $686,795
The applicant has the following agreed assets in her possession and control:
Asset Value Motor Vehicle 1 $5,000 Caravan $3,000 Super Fund G $435 Net Total $8,435
The respondent has the following agreed assets in his possession and control:
Assets Value Company E – Including Motor Vehicle 4 $34,200 Tools of Trade $5,000 Unregistered Trailer $500 Super Fund H $19,639 Total Assets $59,339 Liabilities Company E – Including Motor Vehicle 4 finance -$24,794 NAB Personal Loan -$3,918 Total Liabilities -$28,712 Net Total $30,627
The respondent further acknowledges having withdrawn $10,000 from his superannuation post separation pursuant to Covid-19 hardship provisions.
It is appropriate to include the parties’ modest superannuation in a single pool particularly as neither seeks a superannuation splitting order.
The respondent disputes that he has tools of trade worth $10,000 and deposes that it is worth approximately $5,000. A value of $5,000 was attributed to his tools in the 2018 agreement. The applicant does not provide any basis for attributing $10,000. I will include the value of the tools at $5,000.
The respondent also disputes owning a Motorbike 1 and a Motorbike 2 and further disputes the Redbook valuation for those motorbikes of $25,000 and $29,000 respectively. Tendered as Exhibit 7, the applicant relies on photographs of the respondent on Facebook posing with the motorcycles and bragging about them. The respondent says he was showing off and that they belong to his housemate. The red book valuations the applicant obtained were based on the Facebook photographs. She has no other information about the bikes such as year and mileage.
I am unable to make a finding as to the value of these motorcycles and that the respondent owns them. The evidence is unclear as to the current whereabouts of the Motorbike 2 purchased during the relationship. The 2018 separation agreement attributes a value of $12,000 to the motorcycle with the respondent to retain it. In the respondent’s trial affidavit, he claims that the applicant retained the motorcycle and that she sold the motorcycle to Mr J. He does not provide any basis for this claim. The applicant was not cross-examined about this allegation. The respondent was cross-examined about 2 other motorcycles, but he was not asked about the current whereabouts of the Motorbike 2 referred to in the 2018 agreement. Given the lack of cross-examination of this topic and the unreliability of the respondent’s evidence, I find that on the balance of probabilities that the respondent had possession of the Motorbike 2 when they separated in 2018, however, I can make no findings about its current whereabouts and current value.
Length of Relationship
The applicant says their relationship consisted of two periods from September 2014 to May 2018 and that they briefly reconciled from June 2019 to 1 September 2019. The applicant says the parties reconciled in June 2019 as the respondent convinced her that he had changed. She says the reconciliation only last for a few months as the respondent continued to be abusive.
The respondent says the parties started dating in March 2014 and commenced living together in October 2014 and finally separated on 1 September 2019. The respondent says the parties briefly separated in 2018.
The respondent says their relationship lasted 5 to 5 ½ years depending on whether the period they dated is included. There is no justifying factor to assume the parties commenced a committed de facto relationship from the time they started dating.
The respondent agrees that final separation took place on 1 September 2019. As a result of the incident on 1 September 2019, the respondent plead guilty at the Suburb K Magistrates’ Court on 4 March 2020 to the following criminal charges:
·Discharging a Missile to Endanger Person or Property; and
·Unlawful Assault.
The police also obtained a 5 year IVO for the applicant’s protection.
The applicant was cross-examined about her statement to police dated 1 September 2019 which was tendered as Exhibit 3. In that statement she says she was in a relationship with the respondent for 5 years. The handwriting is the police officer’s that recorded her statement. I accept that this is inconsistent with her evidence in these proceedings as to the length of the relationship in these proceedings. However, I acknowledge that she was giving this police statement shortly after being assaulted and abused by the respondent.
Separation agreement - 9 May 2018
The applicant annexes a separation agreement dated 9 May 2018 to her affidavit showing the parties’ signatures on the last page. The applicant says she prepared the agreement without legal advice and says she used the separation agreement that she had entered into with her first husband as a guide.
The agreement refers to the respondent and his income being $56,000 and the applicant’s annual income being similar being a combination of employment income of about $14,000 and non-employment income of about $36,000. The agreement lists the assets and liabilities that the parties are to retain.
The applicant was to take over the B Street, Suburb C property mortgage and retain the property. The home was not attributed a value. The mortgage had a balance of $175,000.
Apart from the B Street, Suburb C property, the applicant was to retain her Motor Vehicle 5 valued at $12,000 and furniture in the house valued at $5000.
The respondent was to retain the following assets:
Asset Value Motorbike 2 $12,000 Boat $3,000 Motor Vehicle 2 $5,000 Various tools $5,000 3 Dirt Bikes $1,300 Furniture and Shed Tools and Machinery $4,000 Trailer $2,000 Net Total $32,300
The agreement also refers to the respondent’s business accounts totalling $19,572 and debtors owing his business $9,224 as well as taking on the responsibility for the joint NAB personal loan which had a balance of $12,922. The respondent argues against these amounts being notionally added back into the pool or being taken into account as he says there is no suggestion that he wasted those sums. The respondent’s business is not included in the list of assets he retained. It is apparent from the business bank statements annexed to the respondent’s trial affidavit that it was the respondent’s practice to use the business account for both business and personal expenses.
The respondent also argues that the trade debtors and funds in the business account are reflected in his income for these years so that in essence the applicant is double counting. The respondent also relies on his contention that in any event they were not separated. One difficulty is that in 2018 the business was a going concern. Now the respondent claims he is unable to work.
The respondent annexed his personal income tax assessments without the returns and financial statements for the business. It is clear from the business bank accounts that he used that account to pay for a variety of personal expenses as well as business expenses. It is not possible to gain a complete picture of the respondent’s earnings from these tax records.
It is significant that at paragraph 70 of the respondent’s trial affidavit he refers to the 2018 separation agreement and annexes a page from it seeking to rely on the value of the Motor Vehicle 5 the applicant had. This does not sit well with his contention that he did not sign the agreement.
The respondent also says that he does not own any motorcycles currently. He says at separation the applicant kept the Motorbike 2 and annexes a copy of the registration in the applicant’s name dated 1 January 2019. This is not necessarily reflective of the applicant keeping the motorcycle as the parties did not transfer legal title of the house, mortgage and NAB loan either.
The respondent annexes a photograph of the boat with a tear in it and claims that its value is nil. He does not say when the photograph was taken and how it was damaged. The evidence has established that he has damaged belongings when violent. I am not satisfied that the boat has no value.
The applicant acknowledges that this agreement is not legally binding and enforceable although she says she thought it was at the time. She relies on it in support of her contention that the parties separated in May 2018 and says that the parties acted consistently with the terms of the agreement.
In the respondent’s trial affidavit at paragraph 77 he says:
At the time of signing this Settlement Agreement 9 May 2018 I had not obtained legal advice, my mental health was poor and I do not remember signing this.
He does not suggest that the signature was not his.
When cross examined about this he said that the applicant asked him to sign it several times but said for the first time in the witness box that it was not his signature on the agreement, referring to there being a flourish on the letter ‘…’ of his signature which he says he never does, alleging that his signature was forged. The respondent did not raise this at any stage in his material prior to giving this answer in cross examination. There is no expert evidence before the court with respect to the party’s signatures. The respondent signed his trial affidavit in front of his lawyer and the signature looks similar. I emphasise I cannot make any finding as to whether the signatures are of the same person or not, but note it is not unusual for a person’s signature to vary somewhat from time to time. It is somewhat troubling that the respondent would make such a serious accusation during cross examination. Regardless of this, it is not crucial to the issue in dispute as the applicant relies on it for the purposes of establishing that the parties separated in May 2018 and acted in accordance with that agreement.
The respondent refers to various bank account statements and superannuation statements of his which show his address as being the B Street, Suburb C property address during between May 2018 and April 2019 which he says is conclusive of the fact that he did not move out. Whilst it is evidence that is consistent with his contentions, the applicant does not suggest that he changed his mailing address and was not questioned about that. It is also consistent with the parties not transferring the B Street, Suburb C property and vehicles into each other’s names.
Furthermore, the respondent’s evidence that he moved temporarily to the factory for no more than 10 days and that he would at times go to the factory to escape the applicant lacks credibility. Significantly, he merely makes the assertion in his affidavit and does not provide evidence of a single instance of the applicant harassing him.
I prefer the applicant’s evidence with respect to the parties separating in May 2018 and that the respondent moved out of the B Street, Suburb C property in May 2018 and did not return living there until June 2019, moving out 3 months later. I find that the parties’ de facto relationship totalled a little under 4 years being from September 2014 to May 2018 and June 2019 to September 2019.
Contributions
Initial Contributions to the Purchase of the B Street, Suburb C Property
The respondent did not seriously challenge the applicant’s contentions that she provided all of the capital for the purchase of the B Street, Suburb C property. At the commencement of the relationship, the applicant owned a property in Queensland for which she received rental income for the first year of their relationship and also had premium investment bonds in the United Kingdom. She had these assets as a result of the settlement from her previous relationship.
The respondent owned a couple of motor vehicles and tools of trade at the beginning of the relationship and a small amount of superannuation of about $6,000.
Initially the applicant signed the contract to purchase the B Street, Suburb C property on her own for $520,000. She paid the following sums for the purchase:
Deposit $52,000.00 Stamp Duty[2] $23,705.00 Conveyancer Costs $1,050.50 Proceeds of sale of applicant’s Qld property $295,239.00 Total Sum $371,994.50 [2] The applicant received a refund of $11,000 from the stamp duty paid which she says she then put back into the B Street, Suburb C property and paid for the parties’ daily living expenses.
I prefer the applicant’s evidence to the respondent’s with respect to the purchase of the B Street, Suburb C property. I reject the respondent’s contention that they bought the B Street, Suburb C property together because they were in love, which was raised for the first time during cross-examination and is inconsistent with the documents. This includes the document setting out the conveyancing costs. The respondent’s advocate cross-examined the applicant with respect to the additional charges to have the respondent added to the title of the property and mortgage. I find that the applicant initially entered into a contract for the purchase of the B Street, Suburb C property on her own, but as she was seeking to borrow some $180,000 and at that time was not working, the bank required someone else to co-sign the security. The respondent was working in his business and co-signed the mortgage resulting with the title being held by the parties as tenants in common in equal shares.
The applicant was able to fund the purchase of the B Street, Suburb C property and to pay for improvements and other expense towards the improvements from the net sale proceeds she received from the sale of her Queensland property totalling $295,239 and sales of her UK bonds in various tranches totalling $173,832.41.
The respondent stresses that if he had not agreed to become co-mortgagor the applicant would have forfeited the deposit of $52,000. The applicant disputes this and says that her mother was willing to co-sign the loan, however the respondent insisted. There is no evidence from the applicant’s mother of this. The reality is that if the respondent did co-sign the mortgage which enabled the applicant to complete the purchase, this is a contribution that cannot be simply ignored.
The respondent asserts at paragraph 33 and 40 of his trial affidavit that “at all material times” the applicant had control of all of his personal and business bank accounts. However, a mere assertion does not establish a fact.
The applicant also provided evidence showing two transfers she made from her account to the respondent, being $5,000 on 7 November 2014 and $6,700 on 14 November 2014. She says these were loans that the respondent never repaid. The respondent denies these being loans. He has no explanation for the transfers.
The applicant also refers to 3 transfers she made to his account of $5,000 each on 24 November 2015, 25 November 2015 and 31 January 2016. She says these were reimbursements for materials the respondent purchased for the renovations conducted on the B Street, Suburb C property.
I accept that the respondent obtained materials for the improvements. He also had contacts and people working for him who he introduced to the applicant and who helped with the improvements. There would have been some savings in this. However, I also accept that the applicant paid for materials and labour. I accept the applicant’s evidence that she paid for the works. I also accept her evidence that she reimbursed the respondent for materials.
At paragraph 4 of the respondent’s trial affidavit he refers to the applicant often going to gambling venues and highlights a single transaction for $52.00. The applicant was not cross-examined on this topic at all. I reject any inference that the applicant wasted money gambling.
Contributions to the Improvement of the B Street, Suburb C Property
The respondent details what work he did to improve the house at paragraph 47 of his trial affidavit. The applicant disputes the extent and quality of that work. She referred to several people being involved, including friends, and conceded in cross-examination that this included people she met through the respondent and his business. It is important to note that in paragraph 47 of the respondent’s trial affidavit he refers to carrying out the work with his company. He did not claim to do all of the work himself, and when, for example, he was asked about the plumbing work, he readily said that he did not do the plumbing work as he is not qualified but that he worked alongside the plumber that carried out the work.
Although the respondent is not a qualified carpenter, builder, or plumber, he is a labourer and operated his own business carrying out that type of work for some years. I accept that because of his experience and contacts he would have been able to do some of the work that a person unskilled in that area may struggle to do and that he also was able to secure labour and some materials at a reduced or no cost. However, I also accept that the applicant also contributed to the works and made payments to the labourers and for some of the household expenses. I also accept that she also contributed to the physical labour, including painting.
The state of the evidence is such that I am unable to find that the works done were either defective as asserted by the applicant, or improved the value of the property as asserted by the respondent. Neither party put forward expert evidence in this regard before the court, and the expert valuer was not asked to carry out such a task. The court is left with an agreed value of the property at $845,000 which could be due to a combination of factors including market forces.
The respondent claimed that the applicant had complete control of the parties’ finances and that he is not good with finances. The applicant says that she did some bookwork for his company and received weekly payments from the company for doing that bookwork, although the sum did not reflect the amount of work she did. The applicant readily agreed that she paid for various business expenses and said that all the transactions had to be first approved by the respondent. The applicant says she did not have access to the respondent’s bank cards and could not withdraw cash from his accounts. The respondent’s evidence on this topic as it was on other topics was vague and his general assertion is not enough to establish this claim. The applicant had a Bank L account in her own name, which the respondent did not have access to.
The applicant annexes her Bank L accounts which show payments for rates, utilities and insurance. The respondent conceded this account is in the applicant’s sole name and that he did not have access to it.
The applicant also says that she was responsible for various business expenses on the respondent’s behalf. It is clear from the respondent’s evidence that he was content to leave financial matters to her. I do not accept however that the applicant had control of the respondent’s accounts and dealt with his funds without authority. The applicant also at times transferred funds to the respondent’s account. The refund of the rental bond being paid into the respondent’s account despite the applicant paying the bond is also inconsistent with his assertion that she had control of their finances in addition to the other lump sums referred to above.
I am satisfied that the applicant solely paid the mortgage from May 2018 onwards. She has provided bank statements showing her transferring $950 into the respondent’s sole account on 23 May 2018 and thereafter she made the mortgage payments from her Bank L account. I accept that the respondent’s bank statements annexed to the applicant’s affidavit do not show a change of address for him from September 2018. However, this is still consistent with the applicant’s version of events regarding their separation in 2018 where she said the respondent moved into the shed and then his factory, sleeping in the caravan and on the factory site before the final separation on 1 September 2019 where he initially moved to his sister’s home before finding other accommodation. The applicant taking over the mortgage repayments and the respondent ceasing payment is consistent with the parties separating in 2018 and is also consistent with their acting in accordance with the separation agreement signed on 9 May 2018.
What is also of interest when looking at the business bank accounts are the periods where there are regular grocery charges which are consistent with the periods the applicant says the parties separated and when the respondent would have been purchasing his own groceries. They also show the respondent transferring funds to the applicant on 31 May 2019 which is consistent with the applicant’s evidence about the parties briefly reconciling.
Another matter that is inconsistent with the applicant having control of the respondent’s accounts is the NAB personal loan the parties took out in November 2017 for $14,850. The account statements show that $14,500 was transferred to the respondent’s Super Fund H superannuation account. He has had sole benefit of the funds from this loan. This is reflected in both the separation agreement but also the fact that the respondent has continued to repay this loan and concedes that he should be responsible for the remaining balance which is approximately $3,918. As the personal loan is still in the parties’ joint names, the respondent will need to refinance it.
Homemaking and parenting contributions
The respondent’s son from a previous relationship, M lived at the B Street, Suburb C property from September 2014 to May 2018 in alternate weeks. It is the applicant’s evidence that she would cook for M, do his laundry and take him to school and extra-curricular activities, noting that he attended the same activities as her children. The applicant’s youngest child N, now aged 16 is the same age as M. Her son Mr O is aged 18 and Mr P is aged 22. Her children lived with the parties throughout the relationship and they continue to live with her.
Significantly, the applicant was not challenged about this evidence and the respondent conceded during cross-examination that the parties assumed so-called traditional roles during the relationship, where the applicant was primarily responsible for homemaking tasks.
The respondent stated that he was significantly involved in caring for the applicant’s three children and took them too many extracurricular activities such as sporting activities. Again, I prefer the evidence of the applicant and her son. In this regard the respondent was for a time the coach of his son’s sports team where the applicant’s son also played for a period. I accept that the respondent attended some games with the applicant and took his son to games. I do not accept that he was extensively involved with the applicant’s children. .
The applicant acknowledges, and I accept that the respondent did make contributions during the relationship which included paying half of the mortgage between September 2014 and May 2018, as well as contributing to other expenses and carrying out works around the house.
Post separation contributions
The respondent complains that the applicant made unauthorised transactions post separation. The applicant was cross-examined about various sums taken from the respondent’s account after the final separation. The applicant transferred $1,000 to the respondent’s account on 2 September 2019. She says the respondent authorised the transfer to pay the mortgage. The applicant acknowledged that there was a payment to Company Q, the energy provider for the B Street, Suburb C property on 3 September 2021. The applicant denied the fine from Fines Victoria being hers and said that the Company R mobile charge was for M’s phone. Significantly, the energy charge is just a couple of days after the assault.
Family violence
Family Violence is broadly defined in s 4AB in the Family Law Act 1975 (Cth) and includes but is not limited to verbal abuse, threats, physical abuse, and damage to property.
The applicant refers to the effects of the violence both physically and mentally on her during the relationship as she continued to carry out homemaking, parenting and other tasks.
The respondent admitted some family violence but only with respect to matters he could not avoid. I set out paragraph 79 in full:
During the relationship, the applicant and I would have fiery arguments with each other we often had strong differing views on issues consequently we would each “give as good as we received” however, the applicant would also become physically violent towards me where I would have to protect/defend myself. At no time was I ever verbally or physically abusive towards the applicant’s children.
The respondent claims that the applicant physically assaulted him but does not provide any detail. I do not find his evidence credible on this point.
The respondent also seeks to minimise his conduct on 1 September 2019. He claims that the applicant hit him with the guitar and claims the police photographed his injuries. He says he acted in self-defence yet the police charged him. Again he does not provide any detail as to his version of events. He did not tender any evidence from the police subpoena to support his claim. The applicant’s police statement tendered as Exhibit 3 is consistent with her trial affidavit when she says that the respondent threw a briefcase at her but she moved and it hit the wall causing damage, photographs of the damage were tendered as Exhibit 10. She says that he then hit her on the head with a guitar before hitting his own head with the guitar. An image of the damaged guitar was tendered as Exhibit 12.
The respondent claims he pled guilty to the charges on legal advice and “to get it over with”. This does him no credit. He pled guilty to these offences. He is responsible for them. No one else is.
At paragraph 84 of the respondent’s trial affidavit he says:
I did not have the skill set to deal with the applicant’s violence and harassing, coercive behaviour towards me.
This self-serving statement is not evidence. This vague statement seeks to deflect from his own conduct. He does not provide any supporting evidence and the applicant was not effectively challenged about this in cross-examination. I reject the respondent’s contention that the applicant was violent, harassing, and coercive towards the respondent.
Again, in contrast, the applicant gives details in her affidavit of incidents of violence perpetrated by the respondent throughout their relationship. She gives specific examples of incidents where the respondent came home drunk and was emotionally and physically abusive. She also refers to one incident in November 2016 where she was afraid for herself and the children and called the police. She says the respondent was upset by the children playing on the PlayStation and grabbed a heater and threw it at her. She locked herself in the bedroom and called the police. The respondent smashed various items and punched a hole in the wall. The police obtained an intervention order on her behalf. The applicant says the respondent pressured her to remove it so that he could move back into the home and that she did so because she was afraid. It is important to note that the applicant was not challenged about this incident during cross examination.
Tendered as Exhibit 11, the applicant includes extracts of 3 audio recordings which were played during the course of cross-examination of the respondent. They are all instances of the respondent verbally abusing the applicant during arguments. Those recordings were on 7 April 2018, 5 October 2018, 7 April 2018 and 6 July 2019. The respondent did not challenge the accuracy of these transcripts. What is telling about these is the fact that whilst the respondent is being abusive towards her, she does not abuse him in response. These provide further support for the applicant’s narrative.
The applicant gives other detailed examples of incidents of violence including in March 2018 when the respondent threw a metal wrench at her, hitting her on the thigh causing significant bruising, a black and white photo of which is annexed to her trial affidavit. The respondent was shown a colour photograph of this during cross-examination. The bruising is clear and large. He was also cross-examined about a colour version of a photo showing small marks on the applicant’s neck which she says she received after he put his hands around her neck. At one point during cross-examination, the respondent complained that the applicant photographed everything. He asked for photographs a number of times after being cross-examined about his violence towards the applicant and Mr O.
The applicant also refers to an incident on 6 April 2018 when she says the respondent returned home drunk and she was woken up by a phone hitting her head which she says gave her a black eye. She says after this incident the respondent moved into the shed in the backyard before moving into his factory at Suburb S in May 2018.
In support of her claims that the respondent moved out in May 2018, she annexes text exchanges between them. The respondent denied throwing a phone at the applicant while she was asleep and referred to the fact that the phone did not break and was still working. The fact that the phone did not break does not assist him particularly given that it was thrown at her when she was in bed and she does not claim that the phone broke but complains about him smashing her things up.
The text exchanges is one of several examples of the respondent engaging in incredibly abusive language towards the applicant in response to the applicant’s complaints about his abuse and saying that it had to stop. She said he was too violent and insisted that he move out. In part of that exchange when she refers to her receiving a cut on her head and a black eye as a result of him throwing the phone, the respondent’s first response is to complain that she is carrying on as if he hit her. This is typical of his minimisation of violence which was apparent throughout his evidence.
On 5 October 2018 the respondent attempted suicide and called the applicant. The applicant attended upon the respondent and called an ambulance. She says she found him sitting in his car with the exhaust pipe directing exhaust fumes into the car. The applicant says she opened the car door and tried to help the respondent when he physically attacked her. She includes a transcript of his abusive call from him when he was in the hospital.
January 2019 incident
The applicant says that between May 2018 and June 2019 the parties would occasionally meet and took the occasional trip together including a camping trip with the children in January 2019. She says that the respondent had told her he was working hard to be a better partner and if they reconciled he would obtain help for his conduct and drinking.
The parties went camping with Mr O, N and M in January 2019. The applicant and Mr O refer to an incident where the respondent became angry after giving Mr O $10 to buy food and he did not have any change. The respondent berated him and then hit him in the face. Mr O burst into tears and ran away from the campsite.
The respondent denied hitting Mr O and denied being angry and requested photographic evidence to be produced. Mr O swore an affidavit filed on 19 September 2022 and was cross-examined about this incident. Mr O said his face did not bruise but went red and said he did not take a photo of his face as he had just been hit and was in shock. I prefer Mr O and the applicant’s evidence to the respondent’s.
It is important to observe that it is not necessary for a victim-survivor of family violence to provide corroborating evidence to be believed. This is because of the very nature of family violence that it occurs in private and can be a very difficult thing to disclose to others.[3]
[3] See, Family Court of Australia and Federal Circuit Court of Australia, Family Violence Best Practice Principles (4th edition, 2016); Australian Institute of Judicial Administration, National Domestic Family Violence Bench Book (June 2022)
Section 90SF factors
In short relationships such as this where there are no children of the relationship and where neither party has any ongoing obligation or involvement with the other parties’ children with respect to maintenance adjustments under section 90SF(3), the wording of the subsections are important. With respect to s 90SF(3)(a), the subsection refers to the age and state of health of each of the parties to the de facto relationship and does not require a nexus to the relationship. This is in contrast with s 90SF(3)(k), for example, which refers to the duration of the de facto relationship and the extent to which this has affected the earning capacity of party. In some cases it may appear to have a somewhat harsh effect. For example, if what was otherwise a short relationship and the parties were to walk away with the assets they put in, the other party must make an adjustment to the other because of that party’s ill-health whether or not that was pre-existing, arose during the relationship, or arose after separation. The counter position may be that, in contrast to other types of relationships, parties to a marriage or a de facto relationship commit to each other and it is this that makes them different to other relationships such as a partnership.
I must take into account the parties’ respective incomes, property and financial resources and their physical and mental capacity for employment. The applicant is in a far stronger financial position than the respondent. As a result of my findings with respect to contributions, the applicant will receive the house subject to the mortgage and the parties will otherwise keep what is in their possession and control.
Both parties have obligations to their own youngest sons who are both aged 16. Neither has a duty to maintain any other person. The relationship was short and there is no evidence to suggest that the relationship had any impact on either of their earning capacity. The respondent seeks a 5% adjustment on the basis of the disparity in the parties’ current earnings. Clearly on the basis of current actual earnings there is a disparity, but I must also consider the parties’ earning capacities.
I must consider the terms of the orders I make pursuant to section 90SM and any other fact or circumstance that the court considers to ensure that the orders are just and equitable.
The applicant was initially in receipt of Centrelink benefits and medically exempt from seeking work for some period. The evidence shows that in recent months the applicant has been able to secure full-time employment as an professional earning $75,000 a year being able to secure this long after separation and being in a position of full-time employment where she had not been previously.
In contrast, the respondent is currently in receipt of Centrelink benefits and says he is medically exempt from seeking work and is not working in his business. The respondent says he has significant mental health issues and is therefore unlikely to be able to return to work. He does not annex any medical certificates that he has submitted to Centrelink. I have carefully examined the Centrelink statement annexed to the respondent’s affidavit. It is a statement summarising jobseeker payment he received between 17 June 2022 and 8 September 2022. There is no reference on the form to the respondent being exempt from seeking employment. The form refers to his requirement to advise Centrelink of his gross employment income. As at 8 September 2022, the respondent has a current working credit balance of 918. It is impossible to discern what this refers to as it is not explained on the form.
The statement also refers to his income and assets. The respondent B Street, Suburb C property to be worth $900,000, and otherwise refers to having a 50% interest in household and personal effects and motor vehicle, however he does not provide particulars and it is not clear what motor vehicle he is referring to. It is not clear whether or not this is the complete form.
The respondent provides no evidence from any treating medical professional regarding his incapacity to work. It is another example of the respondent making vague assertions and failing to provide evidence in support of them. He annexes a letter with respect to his hernia operation on 8 December 2021 and consent to treatment. He signed the consent form to the treatment on 14 September 2021. It advised of the surgery date by letter dated 17 November 2021. It was not an emergency operation. There is no evidence as to the period the respondent was incapacitated due to his operation and there is no evidence that he is not recovered. It cannot be assumed that he will not be able to resume his business. He has not been assessed as being so impaired so as to qualify for the disability support pension. The respondent also says he has musculoskeletal problems but again provides no detail and no medical evidence. Given the absence of this evidence, I cannot be satisfied that the respondent is fully exercising his earning capacity. At the time the parties separated in May 2018 they were both earning similar incomes.
It is not enough for the respondent to say he should receive an adjustment due to the current disparity in their income. Section 90SF(3) refers to the parties’ income earning capacities several times. The respondent has failed to put any evidence before the court as to his income earning capacity.
Closing submissions
At a number of points during the trial, the respondent sought to run contradictory arguments, most particularly with respect to the respondent’s income. Earlier during the trial, the respondent was keen to stress that as he works in his own business, he is entitled to make various tax deductions where his taxable income may be lower than it otherwise would be if he were a PAYG employee. There is nothing improper about this and it is permissible under our tax system. What it means however is that he cannot at the same time seek to rely on his low taxable income to say there is an earning disparity between the parties. Of course, it suits his case to have a higher income when considering contributions, but a lower income with respect to future capacity.
The respondent maintained that it would be just and equitable for him to receive 25% of the net property. He referred to having been punished for his family violence in the Magistrates’ Court and that punishment is not the role of the Federal Circuit and Family Court. That is certainly true but it does not engage what the Court is required to consider.
The respondent submitted that he should receive a 5% adjustment in his favour for the s 90SF(3) factors.
The respondent also referred to Aleksovski v Aleksovski (1996) FLC 92-705 and Kay J’s gold bar analogy, Watts J’s discussion about this in Froth v Froth [2007] FamCA and the Full Court’s approval of that statement in Dicksons v Dickons [2012] FamCAFC 154. Whilst I accept the correctness of those statements, I do not see how these assist the respondent’s case as this is a short relationship. Those cases discussed the treatment of significant capital contributions in much longer relationships.
The applicant’s closing submission referred back to the five findings he would ask the court to make at the end of the trial.
In civil proceedings the party seeking to establish a fact bears the onus of proof on the balance of probabilities. The applicant argues that the respondent has failed to discharge his onus of proof with respect to several of his arguments. Specifically with respect to the following:
(1)That the respondent made substantial contributions from his income to the relationship. The evidence establishes that the payments he made towards the mortgage is a little less than half of what he would have paid for a similar rental property. Whilst I accept that he made some other payments, contrary to his assertion, the evidence shows that the applicant contributed significant sums in addition to her capital for the purchase of the B Street, Suburb C property. In addition to the various lump-sum referred to during the course of the evidence, the applicant also established that she made payment for various utilities and household expenses from her Bank L account. I am satisfied that the respondent has exaggerated the extent of his financial contributions. The applicant has been solely responsible for paying the mortgage from 2018 to date, apart from their three-month reconciliation. This has all been post separation. These contributions are significant.
(2)The respondent has also failed to establish on the evidence that his work on the property significantly improved the value of the property. His advocate referred to the reference in the valuation to the bungalow. The valuation also referred to the property being of below average construction for its age with ongoing maintenance issues compared to other properties. The value also assumed that the improvements were legally constructed with the appropriate permits.
(3)The respondent also failed to establish his claim that he made significant contributions to the care of the applicant’s children. Counsel for the applicant referred to the case of Robb v Robb (1995) FLC 92-555. Robb recognised that parties have a legal duty to maintain their children from a previous relationship, but they do not have a legal duty towards step-children unless there are orders in place. Rather, they volunteer in assisting the other party in maintaining their children. The applicant was not challenged about her contributions towards M’s care. I am not satisfied that the respondent bought bikes for the applicant’s children as he claimed and I am not satisfied that he was significantly involved in their care. I accept Mr O’s evidence against the Respondent and that he witnessed the respondent’s violence towards his mother.
I am satisfied that the applicant and her children were subjected to significant family violence by the respondent. His violence took various forms, including verbal abuse, threats, physical harm to her and Mr O, and damage to property. I accept that the applicant’s contributions were made more arduous because of this. As is made clear by the Full Court in Benson & Drury [2020] FamCAFC 303, I must consider this holistically with all the other contributions I must consider.
With respect to the respondent’s argument that there should be a 5% adjustment in his favour for s 90SF(3) factors in response to my raising the issue of the wording in section 90SF, Counsel for the applicant argued that it would be ironic if the fact is that the applicant has recovered sufficiently from her experiences of family violence to obtain good employment that she would now be required to make a payment to the perpetrator of that violence. In this regard, he argued that this is where a careful consideration of the circumstances of this case is required when considering holistically whether there is a principled reason for making an order for an adjustment. His submission is that in circumstances of this case that would be an unjust and inequitable result.
There is some considerable attraction in that argument. The issue is whether or not that is somewhat dependent on my making findings that the respondent has already received assets, as contended for by the applicant in the joint balance sheet handed up at the end of the trial.
Counsel for the applicant drew attention to the Full Court decisions of Woodcock and Woodcock (1997) FLC 92-739 and Bevan and Bevan [2013] FamCAFC 116 with respect to the treatment of informal agreements. Informal agreements cannot oust the court’s jurisdiction, but it is a relevant matter to consider the assessment of whether or not it is just and equitable to make an order for adjustment of the parties’ property interests. I am satisfied on the balance of probabilities that the parties acted as though bound by the 2018 agreement and note that at the time the parties had similar incomes. The effect of the agreement was to recognise the overwhelming financial contributions and other contributions made by the applicant and the respondent’s assets of his bank account and superannuation. It was appropriate for the respondent to take on the responsibility for the NAB loan which the applicant acknowledges in these proceedings he should be responsible for, given that he solely benefited from that line of credit with most of it being placed in his superannuation fund and the rest in his business. When the parties separated in 2018, the respondent had $25,000 in superannuation. The respondent has since withdrawn $10,000 from his superannuation account post separation due to the hardship provisions arising from Covid-19.
The applicant has incurred significant legal costs of $87,001, which she funds from her resources. The respondent’s legal fees are considerably less at $31,955, but will nonetheless leave him with a significant debt if I make the orders sought by the applicant.
Conclusion
In considering all the circumstances in this matter, I find that it is just and equitable to make the orders sought by the applicant. I acknowledge that this will leave her in a much stronger financial position than the respondent and that the respondent will be somewhat worse off given the legal costs he has incurred. However, this is one of those cases where it is important to consider the overall circumstances of the relationship. In considering a just and equitable outcome, I must not only focus on the mathematical calculation, or from the presumption that there typically should be a property adjustment.
This was a short relationship where the applicant came into the relationship with significant capital and while the respondent made contributions, both financial and non-financial during the relationship, and where he has failed to establish that they were anything near as significant as he claimed. In fact, much of the respondent’s case was based on bare assertions rather than evidence. In contrast, the applicant provided detailed evidence that was not significantly challenged. I am satisfied that the applicant made significant contributions in addition to her initial capital contribution including further financial contributions, non-financial contributions including care of the respondent’s son as well as her own children, and significant homemaker contributions that were made significantly more arduous due to the family violence she experienced throughout the relationship. The consideration of the impact of the family violence is not about seeking to further punish the respondent, but to recognise the significant impact on the applicant when considering the relevant s90SF(3) factors. If the 2018 agreement and the parties’ subsequent conduct was to be ignored, it would be hard for there to be a need for the recognition of the disparity in the parties’ assets. Whilst I accept that the respondent is currently in receipt of Centrelink payments, he has not established that he is unable to exercise his previous earning capacity. I am satisfied that it would not be just and equitable to acquire the applicant to make a payment to the respondent. I order that the respondent transfer the B Street, Suburb C property and the mortgage into the applicant’s sole name, and the balance of the NAB debt into his sole name, with the parties to otherwise keep what they have
I consider it just and equitable for the home to be transferred to the applicant and for each party to keep what they have without further adjustment. I have assessed the myriad of the parties’ respective financial and non-financial contributions including the impact of the respondent’s violence. With respect to s 90SF(3) factors, I have considered the impact of my findings as to contributions which leave the applicant in a much stronger position than the respondent. After the payment of legal fees she will still be left with significant equity in the home of some $600,000 which is in sharp contrast to the respondent’s position. Apart from the disparity in the parties’ assets and resources, the respondent relies on the current disparity in the parties’ income. The respondent has failed to provide evidence as to his current earning capacity and future earning capacity. Having considered the legislative requirements, I must stand back and consider the practical impact of my orders and whether or not that outcome is just and equitable in all of the circumstances. For reasons I have given, I am satisfied they are just and equitable.
I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Harland. Associate:
Dated: 11 November 2022
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