Choate & Choate and Ors
[2009] FamCA 525
•12 June 2009
FAMILY COURT OF AUSTRALIA
| CHOATE & CHOATE AND ORS | [2009] FamCA 525 |
| FAMILY LAW – PROPERTY SETTLEMENT – CONTRIBUTIONS – Husband and wife found to have contributed equally initially and during cohabitation – Finding considered just and equitable in circumstances in which wife was able to complete university studies – husband made significant improvements to property of the parties enabled by wife’s greater income during cohabitation – wife’s marketing and sale of property saving considerable commission sum – wife’s compensation for personal injuries – rent-free accommodation provided for period of time by wife’s parents – finances and labour provided by husband’s family FAMILY LAW – PROPERTY SETTLEMENT – POST SEPARATION CONTRIBUTIONS – No adjustment made for contributions in post separation period – Although wife had significant income and use of former matrimonial home without servicing line-of-credit, husband gave unsatisfactory evidence with respect to finances and lived with his parents on financially advantageous terms during that period FAMILY LAW – PROPERTY SETTLEMENT – SECTION 75(2) – Adjustment made in wife’s favour as unsatisfactory and inconsistent evidence of husband and husband’s father regarding expectation that husband will be “looked after” by his family for unpaid work done on family building project, and absence of source documentation of trusts of which husband is beneficiary disentitle husband to “undue caution” in this regard – Weir v Weir (1993) FLC 92‑338, Black v Kellner (l992) FLC 92‑287 and Oriolo v Oriolo (1985) FLC 91‑653 cited |
| Family Law Act 1975 (Cth), Part VIII Jones v Dunkel (1959) 101 CLR 298 |
| APPLICANT: | Mr Choate |
| RESPONDENT: | Ms Choate |
| 2ND& 3RD RESPONDENTS: | Mr and Mrs Choate (Snr) |
| FILE NUMBER: | PAF | 1448 | of | 2006 |
| DATE DELIVERED: | 12 June 2009 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | COLEMAN J |
| HEARING DATE: | 10, 11 & 12 March 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Anne Rees |
| SOLICITOR FOR THE APPLICANT: | Nikola Velcic & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Maurice and Mr Dura |
| SOLICITOR FOR THE RESPONDENT: | Galloways |
| COUNSEL FOR THE 2ND & 3RD RESPONDENTS: | Mr Willmott S.C. |
| SOLICITOR FOR THE 2ND & 3RD RESPONDENTS: | Don Velcic & Co |
Orders
That within 90 days of the date of these orders the wife pay to the husband by way of settlement of property the sum of $327 607.
That upon payment by the wife to the husband of the said sum $327 607 the husband shall do all acts and things and execute all deeds, documents, instruments and writings necessary to cause to be transferred to the wife the whole of his right, title and interest in the property known as and situate at H in the State of New South Wales (“H property”).
That upon compliance with Orders 1 and 2 hereof the wife shall indemnify the husband and forever keep him indemnified with respect to all liabilities and outgoings whether secured or unsecured with respect to the H property.
That, in the event of the wife failing to pay to the husband the said sum of $327 607 in accordance with these orders, the parties shall do all acts and things and execute all deeds, documents, instruments and writings necessary to cause H property to be sold at and for a price agreed in writing between the parties and, failing agreement in that regard, the price determined by the nominee of the Australian Institute of Valuers to be the market value of the property and do cause the proceeds of sale after payment of agent’s commission, selling expenses and the line of credit from the Adelaide Bank secured upon the property to be divided between the parties as tenants in common in shares of 68.4 percent to the wife and 31.6 percent to the husband.
That, in the event of H property being sold pursuant to these orders, the wife be entitled to remain in occupation of the premises pending completion of such sale provided that, as and from 90 days from the date of these orders, until completion of the sale of H property the wife meet the interest obligations of the parties pursuant to the Adelaide Bank line of credit and together with council rates, water rates, insurances and other statutory outgoings on the property and maintain the property in good order and condition, reasonable wear and tear excepted.
That as and from the date of these orders, the parties do hold title to H property as tenants in common in shares of 68.4 percent to the wife and 31.6 percent to the husband.
That, save to the extent provided for by these orders, each party retain as his or her property absolutely and beneficially all property real or personal possessed by either of them.
That, save to the extent provided by these orders, and subject to the determination of any costs applications, all outstanding applications and costs applications be dismissed.
That the costs of all parties of and incidental to these proceedings be reserved.
That any party to the proceedings seeking an order for costs of and incidental to the proceedings file and serve written submissions in support of such claim within 28 days and thereafter within a further period of 28 days any party against whom a costs order is sought file and serve submissions in opposition to any such order.
IT IS NOTED that publication of this judgment under the pseudonym Choate & Choate is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAF 1448 of 2006
| MR CHOATE |
Applicant
And
| MS CHOATE |
Respondent
| MR AND MRS CHOATE (SNR) |
2nd & 3rd Respondents
REASONS FOR JUDGMENT
introduction
By Application filed 30 November 2006 Mr Choate (“the husband”) sought orders pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”) with respect of property of himself and Ms Choate (“the wife”). In essence the husband sought that the matrimonial home of the parties be sold and the proceeds distributed such that the husband receive 65 percent and the wife 35 percent of those proceeds.
By Amended Response filed 20 February 2007 the wife opposed the relief sought by the husband and sought orders in the alternative to those sought by him. In essence the wife sought that the husband’s interest in the matrimonial home be transferred to her, and that she indemnify him from any liabilities arising in connection to that property. The wife also, pursuant to the accrued jurisdiction of the Court, sought orders in the nature of equitable relief against Mr and Mrs Choate (Snr), the parents of the husband in relation to a property owned by them.
The parents of the husband intervened or were otherwise joined in the proceedings and, on 11 April 2007 filed a Response by which they sought the dismissal of the claim made against them by the wife.
On 15 October 2007 the wife amended her Response and Cross Application.
In final submissions, Counsel for the husband submitted that the wife should have the option to purchase his interest in the matrimonial home of the parties by paying to the husband 55 percent of the parties’ equity in that property.
Counsel for the husband supported Counsel for the husband’s parents’ resistance to the wife’s claims against them.
The wife’s claim against the husband’s parents was ultimately pleaded in the following terms:-
3.That it be declared that the Second and Third respondents hold, by way of constructive trust, a one half interest in the property known as and situate at [P] (“the [P] property”) on behalf of the Applicant and First Respondent.
The claim included a consequential order that:-
4.That the Husband, Second and/or Third Respondent cause the sum of $1,500,00 to be paid to the Wife within 42 days of these Orders representing the Wife’s interest in the [P] property.
In their Case Summary document, Counsel appearing for the wife particularised the claim against the husband’s parents in the following terms:-
The wife, husband and his parents agreed in substance that the husband and wife would pay for and redevelop the [P] property owned by the husband’s parents and when it was sold they would retain the profit generated returning to his parents the balance representing the value of the property pre-development.
The husband and wife, relying on this agreement had applied for a $1 million line-of-credit secured over their [H] home and by August 2004 they had drawn down $110,000 from their line-of-credit facility towards the [P] property development project. The husband says he paid $107,000 bills for the development with his credit cards.
Relying on the agreement neither the husband nor wife received any remuneration whatsoever for their work on the property. The wife assisted with the project management of the construction and the husband used his skills as a licensed builder. The wife serviced their line-of-credit out of her salary from [B Company]. During construction the husband was not otherwise employed and therefore had little, if any, income. The husband’s earned income for the years ended 30 June 2003, 2004 and 2005 was $8,040, $1,843 and $1,843 (estimated) respectively. Assuming he was capable of earning even average weekly earnings, the income forgone was between $150,000 and $200,000 at least over that period.
Unfortunately however the breakdown of the marriage effectively stymied the wife’s further involvement in the project after separation in July 2006. The wife says that subsequent to the separation the husband and his family have invented the story that the [P] development project was managed by the husband’s brother [L] and that the husband was employed by his father to work on it.
The husband’s explanation for the work done on the [P] Property and the amounts expended on it out of the parties’ line-of-credit and his credit cards is contradictory and is not credible. He says he expects to “be compensated” for his work but does not exactly explain how or what form that will take.
There is no sensible reason why the husband would give up paid employment, work several years for nothing and draw down a six figure sum amount on the parties’ line-of-credit and his credit cards for no specific reward. That reward still has not been received notwithstanding the completion of the project and the passage of more than 5 years since the work was first undertaken.
The parties’ dealings with the husband’s father with regard to [N property] provided a precedent for the parties’ agreement with regard to [P property].
Resulting trust
The parties provided their ingenuity, skill and labour free of costs and paid for construction materials from funds they borrowed notwithstanding they were not the legal proprietors of the [P] property. They did so in the expectation that they would receive a substantial share of profits from the sale of the developed property. There is no presumption of advancement.
Constructive trust
In its newest formulation the constructive trust as described in Baumgartner v Baumgartner (1988) DFC ¶ 95-058 is imposed because “a refusal to recognise the existence of the equitable interest amounts to unconscionable conduct and the trust is imposed as a remedy to circumvent that unconscionable conduct”
In Turner v Dunne [1996] QCA 272, Pincus JA summarised the law in relation to constructive trusts in the context of contributions as follows:
“The most important source of authority as to the principles upon which the Court should act in such cases is the principle judgment in Baumgartner v Baumgartner (1987) 164 CLR 137, (1988) DFC ¶ 95-058. That establishes or confirms the first three of the following propositions which are of present relevance:
1. A constructive trust may be imposed even though the person held to be trustee had no intention to create a trust or to hold property on trust.
2.An intention to create a trust may be imputed where it is necessary to do so ‘in good faith and in conscience’.
3.A principle, which may be applied, is that which restores to a party contribution made to a joint endeavour, which fails, when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. [Case Summary of Wife, pages 12 & 13].
Early in the trial, Senior Counsel for the husband’s parents informed the Court that his clients conceded that they were indebted to the husband in the sum of $222 400 (after tax) with respect to work done by the husband for his parents on their P property for which he had not been remunerated for the period from 12 December 2003 to June 2006.
Senior Counsel for the husband’s parents further informed the Court that the husband’s entitlement could be charged against the P property.
Senior Counsel for the husband’s parents conceded that any monies which the Court concluded to have been expended by the husband and/or the wife for materials or other expenses associated with the development of the P property for which they had not been reimbursed could also properly be charged against the P property.
In final submissions, Senior Counsel for the husband’s parents asserted that the evidence provided no basis for a charge other than to the extent which he had first indicated less discretionary distributions from the husband from trusts controlled by his parents for the 2004, 2005 and 2006 income tax years totalling $84 287. It was thus ultimately the position of the husband’s parents that a charge in the husband’s favour limited to the sum of $138 143 could be declared by the Court.
Learned Counsel for the husband adopted the position advanced on behalf of his parents with respect to the charge in his favour.
Although not formally abandoning their client’s pleaded cause of action against the husband’s parents, in final submissions, Counsel for the wife asserted that the Court would declare that the husband’s parents were “indebted to the Applicant Husband and first Respondent wife in the sum of $396,787 and that there is a charge on the [P] Property in that sum in favour of the applicant husband and the first respondent wife” and further that the Court would declare “that the Second and Third Respondents are indebted to the Applicant Husband in the sum of $363,700 and that there is a charge on the [P] Property in that sum in favour of the Applicant husband”. [Supplementary Notes in aid of the wife’s submissions, page 1, par 2].
The Court does not consider it to be an inaccurate oversimplification of the proceedings to suggest that the wife’s claim against the husband’s parents has three potential bases, the most optimistic of them, being the claim pleaded in the wife’s Amended Response filed 15 October 2007 and set out earlier having been effectively, and sensibly, all but formally abandoned by that time.
Realistically, Counsel for the wife ultimately sought to base the claim against the husband’s parents on the two remaining bases. They were with respect to wages not paid to the husband from December 2003 to the present time and totalling $363 700 and monies expended by the husband and wife for the benefit of the husband’s parents by way of goods and services utilised in or for the benefit of the husband’s parents’ property at P.
Whilst it will be necessary to provide reasons for so doing, the Court’s rejection of the pleaded basis of the wife’s claim against the husband’s parents does not have fatal or necessarily adverse consequences for the wife in these proceedings.
The second and third bases of the wife’s claim against the husband’s parents fall to be determined by reference to the evidence before the Court. Whether, as the wife seeks, the husband’s unpaid labours on his parents’ behalf should augment the charge conceded by the parents with respect to the pre-separation period is rather more a matter for submissions than evidence.
Whether, and if so to what extent, the charge in favour of the husband’s parents’ indebtedness to him for unpaid wages should be reduced by the trust’s distributions asserted on behalf of the husband’s parents is clearly a matter for evidence.
So far as the wife’s claim with respect to goods or services provided in or for the benefit of the husband’s parents’ P property development is clearly a matter for evidence.
Relevant to each of these issues is the onus of proof. Potentially pivotal to the evidentiary issues is the credibility of each of the parties to the proceedings.
Credit
The husband was comprehensively shown in cross-examination to be an unreliable and less than credible witness. With respect to him, the husband appeared, with little apparent forethought, to say whatever seemed most convenient at the time throughout his cross-examination.
On most topics of any significance, the husband gave at least two versions of events which were diametrically opposed. On some topics the husband even managed three inconsistent versions of events. But for the concession which the husband made in his affidavits and confirmed in his oral evidence in relation to his expectation that his parents would “look after him” in return for working for them for five years for no wages, the husband’s evidence would be entitled to virtually no weight, and to be able to be almost totally disregarded.
Whilst the husband’s father is entitled to some leeway by virtue of English not being his first language, he too was shown to be a less than totally reliable re-counter of the facts.
Ultimately, the most significant aspect of the husband’s father’s evidence for the purpose of determining these proceedings turns less on credibility than on the failure to discharge the burden of proof which fell upon him. The topic to which that observation relates is the alleged trust distributions.
With respect to her, the husband’s mother’s evidence does not materially impact upon the determination of the proceedings.
Were the wife’s primary claim against the husband’s parents to turn solely upon the evidence of the husband and his father, it would be difficult to resist. There is however other relevant evidence, including the evidence of the wife herself. Although the unreliability of the wife’s evidence demonstrated during cross-examination fell short of that which was apparent from the cross-examination of the husband and his father, the wife’s evidence could not be accepted without qualification in the light of her cross-examination. The wife appeared to struggle to relinquish the role of advocating her case to learned Counsel engaged on her behalf. The wife sought to embellish her contributions throughout her evidence and to dismiss or avoid questions the truthful answers to which she clearly realised would be unhelpful to her cause.
Although, for reasons which will emerge, the wife’s primary claim against the husband’s parents cannot succeed given the deficiencies in her own evidence, its failure is not ultimately solely referrable to those defects. As will be seen, the terms of the agreement the wife alleges, combined with the circumstantial evidence and inability to accept without qualification the wife’s version of events disentitles that claim to succeed.
Simplistically preferring the evidence of the wife to the evidence of the husband where the two are in conflict would not, were that option realistically available to the Court, change the situation.
Even if, contrary to the Court’s conclusion, the evidence should be held to establish that the parties had reached an agreement with respect to the P property in the terms asserted by the wife, the undisputed evidence of what occurred subsequent to such agreement would preclude the wife from receiving the relief sought by her in her primary claim as being unjust and inequitable.
The husband’s brother, L Choate, gave evidence and was cross-examined. Despite his demeanour at times, which was mildly suggestive of antipathy to the wife, and suggestive of resentment of being drawn into the proceedings, Mr L Choate’s evidence provided a welcome element of objectivity in a case where the opposing parties struggled to see beyond their own immediate interests. The evidence of Mr L Choate provided an objective understanding of how what otherwise seemed curious to the point of being mysterious could have occurred. The Court accepts the evidence of Mr L Choate.
Although ultimately perhaps not of major significance, Mr K, the owner of the property adjoining the husband’s parents’ property at P, upon which a substantial dwelling has been developed as part of what might loosely be described as a joint building operation, gave evidence and was cross-examined. Nothing emerging from cross-examination of Mr K or any circumstantial evidence provides a rational basis for rejecting the evidence given by him. The Court prefers the evidence of Mr K to the wife in relation to a disputed meeting between the pair. Ultimately little turns on that preference.
Material Facts
The husband was born in March 1969 and is accordingly 40 years of age.
The wife was born in December 1970 and is accordingly 38 years of age.
The parties disagree as to the date of commencement of their cohabitation. The wife asserts that it was 1 December 1996. The husband asserts that it was in September 1997.
No rational basis for preferring the evidence of either party to that of the other in relation to this topic emerges from the evidence. Each of the parties clearly understood the potential benefits of increasing or decreasing the length of their cohabitation. The evidence of each of them was likely to have been influenced by that realisation. Ultimately, not a great deal turns upon when the parties in fact commenced cohabitation.
In cross-examination the wife acknowledged that, given that the parties lived with the wife’s parents after cohabitation commenced, her parents would have been well able to corroborate the wife’s assertions. The wife conceded that she knew of no reason why her parents could not have given evidence in the proceedings. No explanation for her failure to do so was ever suggested. (See Jones v Dunkel (1959) 101 CLR 298).
The Court is not persuaded that the parties commenced cohabitation prior to September 1997. The wife has failed to establish any earlier date on the balance of probabilities.
The parties separated under the one roof in July 2006, and finally separated in November of that year, at which time the husband vacated the former matrimonial home. Since the parties’ separation the wife has had sole use and occupation of the parties’ former matrimonial home.
There were no children of the marriage.
At the time the parties commenced cohabitation the husband had owned a property at N. The acquisition of the property, whether it was shortly prior to December 2006, as the wife contends, or in November 1995 as the husband contends, was completed by the husband without any contribution from the wife.
The property cost $425 000. The husband contributed $20 000 from his savings together with a bank loan for $270 000 and a loan from his father of $135 000.
There is no reliable evidence which enables the Court to make a finding as to the husband’s equity in the property at the commencement of cohabitation. It can safely be said that the husband brought to the cohabitation equity of not less than $20 000 in the N property.
The husband was self employed at the date of commencement of cohabitation. At that time the wife was a full time university student. The wife had a part time job. She owned a car in respect of which there is no admissible evidence of value. The wife claimed to have repaid a debt to a previous girlfriend of the husband of approximately $2000.
The parties were engaged to be married in April 1997. In June of 1997, the Council having approved a development application in February of that year and the tenants who had occupied the property prior to that time having vacated, the husband, his brother L (who owned the property next door) and his father commenced substantial redevelopment works at N property. L Choate was the builder for the project and supervised it.
In July 1997 the husband travelled overseas. The wife also travelled overseas at about that time and met up with the husband. The parties returned to Australia in September 1997 and moved into the wife’s parent’s home. During the husband’s absence overseas, his brother and father continued work at the N property.
The parties lived rent-free with the wife’s parents from September 1997 until about December 1998. The parties’ living expenses were thereby significantly subsidised by the wife’s parents during that period.
The redevelopment work at the N property was financed by a loan the husband’s father made to him of $386 000. The loan accrued interest which was not paid until the property was sold. The evidence does not establish that the interest rate recouped by the husband’s father was either generous or usurious.
Prior to the completion of the redevelopment work at N property, the wife’s involvement in that work was, contrary to her assertions, minimal. Whilst the husband made some contributions to the work, his brother L and his father undertook the bulk of the redevelopment work.
The parties moved into the redeveloped residence at N in about December 1998. The wife designed brochures for the sale of the property and achieved a sale of the property without the involvement of a real estate agent.
The property was sold shortly thereafter for $1 400 000 which was reduced to $1 370 000 in return for an expedited settlement. The evidence does not establish that the price achieved was above or below the market value of the property.
The evidence before the Court is unsatisfactory as to the commission which a real estate agent would have been likely to have charged on the sale of the property. The husband concedes 1.5 - 1.8 percent to have been the likely rate of commission and, of necessity, Counsel for the wife relied upon that figure.
The proceeds of sale of N property were applied as to $488 422 by way of repayment of the husband’s father’s loans to the husband with respect to the initial acquisition of the property and its redevelopment. After the mortgage originally taken out by the husband was discharged and other expenses met, the net proceeds of sale were either $529 259 (husband’s contention) or $547 829 (wife’s contention). Little turns on which party is correct about that.
Between December 1998 and May 1999 the parties again lived with the wife’s parents on the same terms as they had previously.
In March 1999 the parties’ purchased at auction in their joint names the property at H for $507 000. The proceeds of sale of the N property were used to purchase H property. At best a modest sum remaining after stamp duty and associated expenses of the H property purchase were met.
In May 1999 the purchase of H property was completed and the parties took occupation of it.
The wife had by that time completed her first degree at university, graduated, and obtained employment at B Company. The wife has continued in that employment to the present time.
Shortly after the acquisition of H property, the parties commenced renovation work on the property.
During the year 2000 the parties travelled overseas and spent several months in Europe.
In January 2001 the wife received compensation of $15 686 for personal injuries sustained by her motor vehicle accident. The funds were applied for the benefit of the family.
In December 2002 the husband’s parents acquired property at P for $1 500 000. At about the same time, an old family friend of the Choates, Mr K, purchased the property next door, P2 property. At the time of these purchases there was a dwelling built across the two properties.
In 2002 the parties again holidayed in Europe. In their absence, the husband’s father completed the construction of external concrete stairs at the H property at his own expense.
In late 2002, after discussions between the husband’s father, and Mr K and L Choate, it was agreed that L Choate would build and/or project manage the construction of two houses on P and P2 property. The intention was that the costs of construction of the two apparently not dissimilar dwellings would be shared equally by the husband’s father and Mr K and that, by building the two dwellings in conjunction, both owners would achieve significant savings.
In late 2002 the local Council provisionally approved a development application for the two buildings.
On 5 December 2002 Mr L Choate, Mr K and his wife and the husband’s father signed a Deed whereby L Choate was appointed builder/project manager for the P property development. It was agreed that, upon completion of the works, P Choate would be paid $200 000 half by each owner, a total of $400 000.
The wife contends that the oral agreement upon which she bases her primary cause of action against the husband’s parents in these proceedings occurred in about December 2003. The husband and his father deny that any such conversation ever occurred. The wife’s version of the relevant conversation appears at paragraph 38 of her primary affidavit evidence and is in the following terms:-
38. On or about 1 December 2003 the husband and I had discussions with the husband’s father regarding our property development plans to the following effect:-
The husband’s father:- “When are you going to be in a position to start developing again? Are you going to demolish your [H] home, rebuild and sell?
The husband:- “No, we wouldn’t make as much money than just selling it as is”.
The husband’s father:- “Where else have you been looking? Have you got a line of credit in place?”
I explained to the husband’s father the effect of the terms and conditions of the Commonwealth Bank as I read them in the brochure provided to the husband and I by the Commonwealth Bank.
The husband’s father: - “That’s too restrictive. No, you don’t want to be calling the bank manager every second day you need to write a cheque. When you have good security over your loan, the bank should leave you alone. Try to find something better.”
The husband and I:- “How are your other property developments progressing?” The husband’s father was working on other developments including the [P] property.
The husband’s father:- “I’ve always been heavily involved in all of my developments. That’s the only way to make sure the job is done properly, but you see with the [V] development we agreed to use a professional developer and now we have legal problems costing us so much time and money.”
Me:-“What are your plans for the [P property] development given that you’re commited [sic] to developing two luxury houses. Have you found yourself a new builder for that property?”
The husband’s father:- “I’m getting too old to battle with new development companies, then things go wrong and the laws keep changing so much every day, it’s hard to keep up. It’s not like the old days! [L] (the husband’s older brother) has done some bits and pieces but needs to work on finishing his own house as his family has been complaining for some time. He’s also tied up in his own list of developments”
The husband’s father:- “I’ve discussed this project with [L] and he agreed that he doesn’t have the time to dedicate to it but of course given that he’s in the industry he’s always happy to give a hand every now and then like on the previous projects.”
The husband’s father:- “Now that you have a builders licence why don’t you develop [P property]? You have the experience from [N property] and the other projcets [sic] the family has developed and I’ll be here to lend you a hand when I’m in Australia. I’ve got an agreement with [Mr K] to split the development costs 50:50 and [Mr K] will deposit money into the account as required. I’ve helped [L] over the years and he is well established now. It’s time for me to help you get ahead again. The girls will get their turn later down the track but they should be looking to their husbands to provide for them. I’ve got some money in the account plus [Mr K’s] deposit. This will be enough to get started with ordering some materials. You should get a flexible line of credit as the estimate to build is about $700,000. So long as you pay me back for the land value and interest costs I pay along the way, the profit is yours.” [Wife’s affidavit filed 29 Jan 2008, par 38].
The husband’s assertion as to what was agreed in late 2003 is contained in his affidavit evidence-in-chief at paragraph 51 and says:-
Towards the end of 2003, I had conversations with my brother, [L], and my father. During the course of those conversations, one or both of them said to me:
“Will you do the plumbing at my [or dad’s] place?”
“Can you come up to [P] and help out?”
“In January we are going to clean the site up and start excavating. Can you help?”
I would say something like,
“Yes.” Or “Just tell me when and I will be there.”
[Husband’s affidavit filed 29 Jan 2008, par 51].
On 28 January 2004 a “Dilapidation Report” was obtained with respect to the property adjoining the proposed P developments. Shortly thereafter demolition of the house which straddled the P and P2 properties commenced.
At about that time the husband commenced work at P property. From January 2004 to the present day the evidence reveals the husband to have had no remunerative employment other than on the P property project.
From January 2004 to date the husband has had access to his father’s cheque account from which he has from time-to-time reimbursed himself for expenses incurred on the P property which were initially paid for by him using his own credit card.
In April 2003 the wife was promoted in her employment and posted to Adelaide where she continued to work until February 2004. On most weekends either the wife returned to Sydney to be with the husband or the husband travelled to Adelaide to be with the wife. The wife’s employer apparently bore the bulk of the expenses associated with such travel.
The wife has not ever undertaken any significant activities at or on or with respect to the P property other than, as a result of a conversation between herself and the husband’s brother L Choate and the husband, preparing a spreadsheet to enable L Choate to track expenses on the P property project. Whilst that was the wife’s only direct contribution to the P property developments, as L Choate appeared to acknowledge, it was of assistance.
In August 2004 the parties acquired a line-of-credit through the Bank of Adelaide. The parties disagree as to the purpose of that line-of-credit. The wife asserted that $110 000 was drawn down on the line-of-credit and applied towards costs of the P property development. The husband denied that the line-of-credit was obtained for the purpose asserted by the wife, and maintained that each party utilised the line-of-credit for other purposes.
The parties separated under the one roof in July 2006 and finally separated in November of that year.
In October 2006 the husband’s father refunded to him, and the parties’ line-of-credit, was reimbursed in the sum of $164 961.55 with respect to expenses incurred by the parties on the line-of-credit for the benefit of the P property development.
In the post separation period the husband has lived with his parents.
The evidence at trial
In cross-examination the husband said that his charge out rate as a tradesman had been $65 per hour in December 2003, which remained unchanged to the present time. Apart from the obvious improbability of his charge out rate having not increased in more than five years, the husband’s case is that he has not charged out any work at that rate during that time.
When cross-examined about the Choate Family Trust and the NS Trust, the husband asserted that he was “not interested” in whether or not he was a beneficiary of those trusts. Given his belief as to his future provision being secure, that was unsurprising.
The husband’s evidence in relation to distributions from the Choate Family Trust and NS Trust was inconsistent and unconvincing. Initially, the husband asserted that he had not ever received distributions from either of the trusts. Presented with his 2005, 2006 and 2007 Tax Returns, which revealed trust distributions to have been his only source of assessable income, the husband was obliged to abandon his assertion that he had not ever received distributions from the trust.
However, the husband did not admit that he had received monies by way of trust distribution of the magnitude referred to in his Tax Returns. The husband was adamant that his father had never paid him wages over the years he had worked on the P property developments, and no-one has suggested otherwise. The husband suggested that he had met his living expenses by operating on a supplementary card attached to his father’s Visa account. The husband’s evidence does not reveal there to have been any imposed, or self-imposed limits on the extent of his drawings on that Visa account.
In the post separation period the husband’s living expenses appear to have been greatly reduced by virtue of his living with his parents in their home, although the evidence in this regard is not detailed.
The husband was cross-examined in relation to an application on or about 28 July 2004 for a $1 000 000 line-of-credit. In such application the husband represented, or allowed to be represented that his income was $125 000 per annum. The husband asserted that such figure was untrue and acknowledged his preparedness to mislead the finance provider in order to obtain the credit facility. In final submissions, sensibly in the Court’s view, the husband’s learned Counsel did not dispute that his earning capacity could be considered to be in the order of $125 000 per annum, and have been so at all material times.
The husband appears to essentially assert that his business, G Business, has not operated since the beginning of 2004. Cross-examination revealed some possible anomalies in that regard, including payments styled as payments to G Business totalling approximately $37 775 between 2005 and 2008 with respect to the P property. The husband’s evidence in relation to the provision of tax invoices and remission of GST was unconvincing. Just what the payments were, or were for, remains obsure.
In cross-examination the husband reiterated that “my father will look after me” once construction of the P property concludes. Mr L Choate’s evidence is that practical completion is fast approaching. Whilst the husband could not, or would not, suggest in what way he thought his father would look after him, he conceded that he expected to be compensated by receiving more than the $500 per week with which he has been provided, according to his evidence, over the last five years.
The husband’s concession that his father will look after him once the P project is completed provides the one rational basis for declining to reject everything controversial asserted by the husband in his evidence. Accepting that it is ultimately not necessarily within the husband’s capacity to determine how, or in what magnitude, his father will look after him, it is difficult to accept that the husband has been content to work for five years on the basis he asserts, without ever having sought or gained from his father any indication of how he would be looked after.
Whilst the husband’s evidence in relation to his role in the P property developments on a day-to-day on site basis was less than convincing, in the light of the evidence of his brother L Choate it is ultimately reasonably clear that, whether described as a “leading hand” as the husband asserts, or as the site foreman as his duties appear to have been consistent with, the husband has been on the P site almost every day, except for two months, out of the five years during which construction has been underway.
The husband’s evidence is that when his brother has not been on site, and clearly Mr L Choate has not been on site all day every day, the husband has been responsible for work on the site. There is nothing sinister about that, and in fairness, the husband did not seek to mislead the Court as to the nature of his duties on site. In the light of the evidence as to the husband’s day-to-day role on site, the documents upon which he was cross-examined which were addressed to him by various contractors or authorities do not assume any sinister overtones.
The husband confirmed that in the post separation period, neither party had serviced the line-of-credit which they had obtained from the Bank of Adelaide in late 2004. The debit balance of the line-of-credit has thereby increased to its current balance of about $212 000.
To the extent that the cross-examination of the husband by reference to documents addressed to him as the “contractor” were asserted to establish that the husband’s role in the P property developments was other than that of an unpaid worker with expectations of being “looked after” they do not, when viewed with the totality of the evidence, and particularly the evidence of Mr L Choate, have that significance.
Objectively, whilst the husband’s evidence in relation to any topic involving money was confusing, inconsistent and unconvincing, no aspect of the building work with which he has been involved on the P property developments suffers from those defects. But for the evidence of Mr L Choate, the significance of that, and other matters, might be viewed differently.
To the extent that cross-examination of the husband sought in some way to suggest that the financial arrangements on the P property developments as between the K family, the husband’s parents and L Choate were other than on a strict and equal basis, with Mr L Choate being paid equally by them, nothing emerging from the evidence of the husband, or any other witness who was cross-examined supports so concluding, or even arouses suspicion, that in some undefined way, Mr K was benefiting at the Choates’ expense, or vice versa.
The husband was cross-examined on the line-of-credit, and dealings with other monies. His evidence in relation to those matters was unconvincing. Objectively, there have probably been two sources of money available to the husband since early 2004. The first of those, whether it be via his father’s credit card, cheque account or through trust distributions, has been the husband’s parents. Given that there is no issue that the husband’s father controls the finances of himself and his wife, it can realistically be said that the husband’s father has been in control of the possible sources of those funds.
The other possible source of funds available to the husband has been his personal credit card and/or the line-of-credit from the Bank of Adelaide which the parties obtained in late 2004. No other probable sources of funds emerged from the evidence. Whilst it is not possible to quantify what the husband may have received from his father since January 2004, howsoever styled, the concessions on behalf of the husband’s parents as to the unpaid wages from December 2003 to the parties’ separation in mid 2006, combined with the concession as to the husband’s earning capacity thereafter largely alleviate the difficulties arising from the evidence of the husband and his father.
Realistically, that leaves for consideration the extent to which monies of the parties, whether from credit cards or the line-of-credit have been drawn down and not reimbursed for the benefit of the P property developments. Given that the husband claims no current credit card debt in these proceedings, that area of possible exploration ceases to be of significance. It is thus the movements in the debit balance in the line-of-credit which attract greatest interest.
In cross-examination, the husband was repeatedly obliged to concede that he had “no idea” why the transactions to which he was referred had occurred. It is clear that from late 2006 onwards, the husband has paid substantial legal fees. As any monies paid for legal fees have not been shown to have been reflected in the line-of-credit balance, it is unproductive to attempt to pursue this topic.
The husband was cross-examined with respect to transactions on the Bank of Adelaide line-of-credit (see Exhibit X2), the first transaction on which occurred on about 15 November 2004. The husband conceded in cross-examination that funds drawn down on the line-of-credit, and advanced to the wife’s parents in order to purchase a property in Croatia had been reimbursed to the line-of-credit together with interest.
The husband conceded in cross-examination that since November 2006 he has not, and the wife has, paid the council and water rates with respect to the H property which the wife has occupied.
The husband confirmed in cross-examination that he maintained that he had paid on his own credit cards $117 000 with respect to the P property development. The husband’s parents conceded through Senior Counsel that the husband had paid $117 334.49 on his credit card with respect to the P property developments.
In cross-examination by learned Senior Counsel for his parents, the husband confirmed that in October 2006 his parents had repaid to him, and he in turn had lodged with the Adelaide Bank line-of-credit, the sum of $164 961.55.
Prior to cross-examination by Senior Counsel for his parents, the husband had variously asserted that he had not received the trust distributions referred to in the income tax returns to which reference has earlier been made, that he had received some of those distributions and that he may have received all of them. Cross-examination of the husband by Senior Counsel for his parents did not advance that topic, and not surprisingly, given that when the husband’s father gave evidence, that did not result in any source documents capable of impacting on the probabilities emerging. Nor did such documents emerge from any other source during the balance of the trial.
In cross-examination by Senior Counsel for his parents, the husband’s evidence was consistently vague and unconvincing with respect to financial transactions. His evidence however in cross-examination with respect to ATM withdrawals on the Adelaide Bank line-of-credit, later largely corroborated by the wife herself, is able to be accepted. The husband was reasonably clear that a series of $1000 ATM withdrawals on the Adelaide Bank account to which he referred by reference to Annexure “E” to his affidavit of March 2009 were not referrable to the P property developments, but related in part to his own and the wife’s living expenses, and in part to work done on the H property. The husband claimed that he had given the wife funds from some of those cash withdrawals but that none of the $1000 withdrawals or the three withdrawals each of $500 had been actually made by the wife.
Ultimately, the evidence of the husband in isolation provides little guidance as to the probabilities with respect to disputed financial matters. Although not due to the efforts of the husband or his father, these matters have eventually emerged with sufficient clarity for the Court to be able to do justice to all the parties to the proceedings.
The husband’s father was cross-examined. Significantly, given the duration of the P property project, and the amounts of money involved, and the nature of the dispute before this Court, it is little short of extraordinary that the husband’s father did not produce a single source document. In fairness to him, it does not seem to be suggested that the husband’s father was developing the P property in the course of any business, but it would be reasonable to think that he would have records of what was expended.
The unexplained absence of the usual kind of records evidencing activities of discretionary trusts is little short of remarkable. Objectively, the husband’s father, as the controller of the Choate Family Trust and the NS Trust, was uniquely placed to provide evidence of the payments of the distributions represented to the Taxation Commission to have been made to the husband, and to provide evidence of the balance (be it credit or debit) of the husband’s beneficiary’s loan account in those trusts.
Just as the husband’s evidence was unclear as to the nature of the arrangement which he has had with his father to date in relation to remuneration for work done on the P property, so was the father’s evidence. The evidence of the father was essentially, and literally, that the husband has “taken what he needs” either from Mr Choate Senior’s cheque account or credit card, whether that be by way of reimbursement for expenses paid by the husband for the P property development, living expenses, legal fees, or anything else which the husband considers that he requires.
Mr Choate Senior confirmed that he has never placed a limit upon what the husband has been able to draw on these facilities. Mr Choate Senior was as coy as his son about his intentions towards the husband in the future. Mr Choate Senior did not dispute that he controls both the Chaote Family Trust and the NS Trust. No explanation for the failure to adduce evidence from the accountants who prepare the financial records of the trusts was ever forthcoming, notwithstanding that Mr Choate Senior suggested that the accountant would know the answers to some of the questions directed to him by Counsel for the wife. The accountant did not give evidence.
It did however emerge from cross-examination of Mr Choate Senior that he appeared to contend that only himself, his wife and the husband have ever received distributions from the trusts. When unable to explain transactions with respect to the trusts to which he was referred, Mr Choate Senior suggested that his son L managed the affairs of the trusts. No other evidence suggests that to have been the case. Like his son, Mr Choate Senior struggled to explain the disbursement of significant amounts of money, such as the $50 000 payment on 22 December 2006.
Mr Choate Senior confirmed that he would not have signed any bank documents unless they were true, but also suggested that he had not checked them, relying upon his son L in relation to their accuracy. Whatever the truth of the matter, nothing emerging from the NAB documents (Exhibit R9) assumes significance for present purposes. The position statement provided to the NAB on behalf of Mr Choate Senior, his wife and the trusts suggest that they had a surplus of assets over liabilities in excess of $14 000 000, $4 710 000 of which was described as “investments held in trust”.
Mr Choate Senior’s evidence in cross-examination with respect to the 5 December 2002 Deed between himself, Mr and Mrs K and Mr L choate was unhelpful and confusing. His assertion that “I am the builder of my house. [L] is the builder of [Mr K’s] house” further potentially confused the issue. Thankfully, when Mr L choate gave his evidence, that confusion was removed. It is ultimately clear that, on or about 1 December 2003, an owner/builder’s permit was issued to Mr Choate Senior with respect to the P property development. It is clear beyond doubt from the evidence of Mr L choate that this was an interim measure in order to deal with problems arising from the notorious collapse of HIH Insurance. Technically, between December 2003 and September 2004 Mr Choate Senior was, on reliable evidence, actually the builder of his house in a broad sense. He remained thereafter involved in the building of his house albeit Mr L Choate was, and has remained, the “builder” in a contractual, practical, regulatory and insurance sense since September 2004.
Not surprisingly, in cross-examination Mr Choate Senior conceded that he had “no idea” how much his son (the husband) had drawn against his cheque account or credit card since 2007 for his “own personal use”. Ultimately this does not assume great significance given the absence of any evidence that, whatever the husband was drawing for his own personal use, he availed himself of a luxurious or excessive lifestyle or accumulated funds or assets by reason of having such funds.
Mr Choate Senior, justifiably, the evidence suggests, asserted that he had always been able to afford to pay the husband a wage for work done by him on the P property. That he did not, and could not, suggest what relation the husband’s drawings bore to a proper wage, combined with the concession made by his Senior Counsel reinforce the impression that, although neither father nor son would give any clue as to when or in what manner, the mutual expectation of the husband and his father was that, once the P property development was completed, the husband would be compensated for his years of effort on the P property project.
Despite all the curious, and possibly even mysterious aspects of the evidence of the husband and his father, it is ultimately clear and not seriously disputed by either of them that the husband will be looked after. However, the most significant part of the picture remains as obscure after the evidence as it had been when it commenced.
During the course of his cross-examination Mr Choate Senior stated when the P property is completed he and his wife intend to occupy those premises. There is no evidence of a contrary intention in that regard and nothing emerging from the cross-examination of Mr Choate Senior to suggest that the Court should not accept that he and his wife do intend to occupy the property as he stated.
Counsel for the wife explored with Mr Choate Senior what he proposed doing for, or giving the husband on completion of the P property development. Mr Choate Senior reiterated that he had “no idea what I will give him”, but pointed out that he had worked for the husband on the N property, and expended money for materials on that property for no remuneration or recompense.
Mrs Choate Senior was briefly cross-examined. As noted earlier, with respect to her, Mrs Choate does not suggest that, whatever the arrangements were, she was materially involved in them or any conversations of significance relating to them.
Mr L Choate gave evidence and was cross-examined. As noted earlier in these reasons, Mr L Choate was an impressive witness whose evidence had the ring of truth, and the considerable attraction of substantially according with reliable documentation tendered in evidence. It was also supported by commonsense. Without referring to it in detail, Mr L Choate was able to explain how the Choate and NS trusts essentially operate. He was able to explain how the circumstances surrounding the December 2002 Deed between himself, Mr and Mrs K and his father evolved.
Mr L choate was able to credibly explain the apparent inconsistency between his father obtaining an owner/builder’s permit in December 2003 and his assertion that he was the builder on both the Choate and K family sites. Mr L Choate’s evidence was corroborative of the substance of the husband’s evidence as to the nature of the husband’s duties on site at P, and the responsibilities and authority which he then had, and currently has.
Mr L Choate gave detailed evidence with respect to the monies expended on the P properties and removed any uncertainty as to the equal sharing of expenses between the two sites. The court accepts Mr L Choate’s evidence. Whilst so doing does not necessarily preclude acceptance of the wife’s assertion as to the agreement reached between herself, the husband and his parents in December 2003, accepting Mr L Choate’s evidence creates a circumstantial matrix which is inconsistent with the terms of the agreement asserted by the wife. This is particularly so when regard is had to the funding of the construction which he has directed and overseen at P.
Mr K was briefly cross-examined. There were two issues of possible significance agitated during such cross-examination. The first related to the funding arrangements between the K family and the Choates. The evidence of Mr L choate, which is consistent with Mr K, is that what has been done on the K side has been paid for by the Ks without subsidy from the Choates.
The fact that greater formality may have surrounded that process does not render it sinister, or his version of events able to be rejected. Mr K was unshaken in cross-examination in relation to his assertion that he had not met the wife at any material time or had conversations with her as asserted by her. There is no reason to disbelieve Mr K’s evidence in relation to that topic. The Court accepts Mr K’s evidence.
The wife gave evidence-in-chief that she had paid $30 714 in legal fees to date, of which $30 000 had been drawn down on the Adelaide Bank line-of-credit. From her income the wife had deposited $11 040 into her solicitor’s trust account. The wife deposed to having two bank accounts, the balance in one being $6 416.16, the balance of the other being $482.18. The wife acknowledged in evidence-in-chief that the husband had given her money from time to time out of cash withdrawals he made on their Adelaide Bank line-of-credit.
Cross-examination of the wife by Senior Counsel for the husband’s parents revealed a number of matters which both reinforced the Court’s conclusion with respect to the wife’s credibility, and revealed circumstances which are quite inconsistent with the agreement which she asserted in her affidavit evidence-in-chief. It is instructive to refer to the course of that cross-examination in some detail.
Senior Counsel for the husband’s parents reminded the wife that in paragraph 33 of her affidavit evidence-in-chief she had asserted that the parties obtained a $700 000 line-of-credit facility in November or December 2003. The wife confirmed that she thought such approval had been granted prior to the conversation which she asserts gave rise in December 2003 to the agreement primarily relied upon by her in her claim against the husband’s parents. The wife reiterated that she was “sure” that she and the husband did have approval for the $700 000 facility at the time of the alleged conversation in December 2003.
The wife was referred to Annexure “H” to her affidavit, a letter dated 23 December 2003 from the Commonwealth Bank confirming approval of an application for a $700 000 line-of-credit. The wife had asserted in her affidavit evidence-in-chief that the conversation which gave arise to the alleged agreement had occurred on 1 December 2003. The wife was thus obliged to concede that she had been in error in believing that on 1 December 2003 the $700 000 line-of-credit had been approved. The concession has adverse implications for the wife’s version of the parties’ agreement.
It is common ground that the facility offered on 23 December 2003 was never taken up by the parties. The wife agreed with Senior Counsel for the husband’s parents that the first application for funding subsequent to the unaccepted offer of the Commonwealth Bank of 23 December 2003 was not made until on 24 June 2004.
The wife was referred to Annexure “J” to her affidavit evidence-in-chief which, as its terms make clear, was neither an application for a finance facility nor its approval. The wife was unable to explain why it was not until five months later that she sought to apply, through the same broker, for the line-of-credit facility. The wife’s claim is that the parties agreed that she and the husband would fund the P property development. The wife does not dispute that from early 2004 work was occurring at P property on the development and that the husband was engaged on site for that purpose.
The wife was referred to the application made to the Bank of Adelaide for the $1 000 000 line-of-credit facility on 28 July 2004 which was approved on 20 August 2004. In her endeavours to explain the delay in applying for funding from 23 December 2004 to 28 July 2004, the wife suggested that she had been in Melbourne and had “not had enough time to search to get it”. That explanation was unconvincing having regard to what the evidence suggests was involved in pursuing the funding. Her delay does not sit well with her allegations in relation to the parties’ agreement.
Notwithstanding the circumstantial evidence, and the cross-examination of L Choate, the wife maintained that L Choate was not in charge of the P property project and that the husband was. The wife conceded that, notwithstanding her contention, she understood that L Choate had turned up every other day at the site. The wife was obliged to concede that she had not been involved in any aspect of the construction at the P property.
The wife was cross-examined in relation to document supplied by Home Loans Limited (Exhibit R2). On 15 December 2006 Home Loans Limited wrote to the wife in response to a request from her providing a copy of the loan application which resulted in the $1 000 000 Bank of Adelaide line-of-credit facility being approved. The exhibit suggests that the husband in fact made the request for a credit facility on 14 September 2004 but nothing really turns on that for present purposes.
The wife was directed to that part of the report which related to the “purpose” for which the loan was required. The form recorded that the credit to be provided was to be “applied wholly or predominantly for business or investment purposes or both purposes”. Nowhere on the form was there anything to indicate that the purpose of the loan was in any way referrable to the P property development. Whilst it is correct to suggest that no part of the form readily invited such information, the significance properly attaching to the absence of reference to P property is necessarily limited.
The wife was cross-examined in relation to the use which was made of the line-of-credit after the facility became available on 15 November 2004. It is to be remembered that the wife’s case was that the line-of-credit was obtained solely for the purpose of the parties funding the development of P property as, on her version of the agreement, was the consideration for their ultimate receipt of the profits of the development.
As Senior Counsel for the husband’s parents ultimately submitted, quite apart from the other anomalies emerging from the wife’s evidence, how the parties utilised, or perhaps more importantly did not utilise the line-of-credit when it was approved assumes significance. The wife confirmed that between February 2005 and 20 December 2005 $436 870 had been drawn down on the account, a significant proportion of which had been sent overseas for use by the wife’s parents, albeit that was later paid back into the line-of-credit with interest.
The wife was obliged to concede in cross-examination that, two years into the P property development, the 45 percent of the line-of-credit had been drawn down but none of it had been applied for use in or for the P property development.
The wife was also cross-examined in relation to a caveat which she caused to be lodged against the title to the P property on about 19 December 2006 (see Exhibit X3). The wife swore a statutory declaration in support of her caveat. The caveat was lodged by the solicitors who have represented the wife throughout the proceedings in this Court.
The nature of the state or interest claimed by the wife was described as “legal and equitable interest” the facts by virtue of which such interest or estate was claimed were described as “legal and equitable interest in the property by virtue of the caveator’s financial and non-financial contribution to the development of the property”. Save to the extent of the $117 000, the husband drew down on the line-of-credit, the evidence does not establish financial contributions by the wife up to that date. Her only non-financial contribution related to the “spread sheet”.
It is readily apparent that the basis upon which the caveat was asserted bore little resemblance to the agreement which the wife asserted had been reached between her and the husband’s parents. The wife, who is an intelligent woman with both Bachelors and Masters Degrees from university, was unable to give any explanation for the difference between the basis of the interest asserted in the caveat and the basis upon which her primary claim against the husband’s parents was asserted in this Court.
In cross-examination by Counsel for the husband, the wife was referred to some inconsistencies between her oral evidence and her affidavit evidence with respect to the N property redevelopment. The wife’s evidence in that regard was evasive, and less than impressive. The wife did however confirm that neither the husband’s father nor his brother expected to be or was paid with respect to work done at N property.
The wife was a fulltime student when the parties married, and continued to be a full time student until December 1999. She subsequently, and prior to separation, completed a Masters Degree. Those qualifications, as the wife fairly conceded, contributed materially to her current position of employment and level of remuneration.
Cross-examination of the wife revealed that she had significantly exaggerated the physical work that she claimed that she had done with respect to the N property. That emerged in numerous ways, in part by reason of the period when the parties were overseas and work was ongoing, in part from her evidence in relation to her attendances at university and necessity to devote herself to her studies, and in part because of her agreement that the husband was in fact, as he claimed, doing work on a 60-bed nursing home at the time the work at N was being completed.
It is difficult not to conclude that the wife sought to exaggerate the significance of her contributions to the N property in order to enhance her claim in this Court. That is not to say that the wife was not involved with N property, as she clearly was in the selection of interior design items, the marketing and sale of the property at a price which the evidence does not reveal to have been either greater than a real estate agent might have reasonably achieved or any less than a real estate agent might have achieved.
The wife conceded that the husband’s father had not been paid for work done by him on the H property. The wife was obliged to concede that the amount of money the parties would have had with which to do work at H property after completion of its purchase could only have been minimal.
When cross-examined in relation to the agreement which she alleged that the parties had reached with respect to the P property development, the wife asserted that the husband’s father would be reimbursed for the $1 000 000 which the evidence suggested that he had contributed to the development at P property. The wife was obliged to concede that the agreement asserted by her required the husband and wife to have contributed those costs, and that she had never previously asserted that any expenses thus paid by Mr Choate Senior would be reimbursed to him.
Notwithstanding that, contrary to the clear evidence that the husband and wife had not paid for the development at P, and that the husband’s parents had, the wife remained adamant that she and the husband should receive any profit referrable to the acquisition and redevelopment of P property. So doing, in the light of the evidence, did not reflect well on her.
The wife also said during the course of cross-examination that the expectation had been in 2003 that the re-development of P property would be completed within 18 months. The wife was obliged to concede that her affidavit did not suggest that to have been the case. Nor was it suggested to any of the witnesses called against her. On the wife’s own version of the agreement, no timeframe for the realisation of the P property had been agreed. That is a problem for the wife’s version of events, but not one for the husband’s parents’ version of events, given that, as the husband’s father’s evidence reveals, the husband’s parents intend to occupy the P premises when they are completed.
The wife was reluctantly obliged to concede in cross-examination that she and the husband had not fulfilled their part of what she asserted the agreement between the parties had been. Objectively, they failed totally to fulfil their alleged obligations. Notwithstanding that, the wife sought to retain the benefits potentially passing to her and the husband pursuant to that agreement.
The wife’s explanations for the reality that the Bank of Adelaide line-of-credit was not utilised in or for the P property development were unconvincing rationalisations of circumstantial evidence which she appeared not to have previously anticipated having to address. As did the husband, the wife tended to say what presumably seemed best at the time.
The wife conceded in cross-examination that the line-of-credit had been used by the parties to make payments on credit cards, to pay for expenses with respect to the H property and for other living expenses. As is not in doubt, $63 418.44 was drawn down on the line-of-credit on or about 14 June 2005 for the purchase of an Audi motor vehicle which the wife has retained. Significantly, the wife did not suggest that, notwithstanding the purpose for which she claimed it had been acquired, the line-of-credit was utilised for the purpose of the P property development.
The wife was cross-examined in relation to her assertion that:-
52.On or about 10 August 2004 I spoke to the husband’s father at his […] house late in the afternoon about signing an agreement for [P property] as I needed evidence for the bank for the large sum I was borrowing. I recall the husband’s father saying words to the effect:- “Yeah, I’ll sign the papers if you need me to.” As the husband and I had received the approval from Homeloans Ltd on 23 August 2004 I did not again request the husband’s father to sign any documents for the Bank loan application. [Wife’s affidavit filed 29 January 2008, page 15, par 52].
The wife was adamant that the conversation occurred, and was in the terms asserted by the wife. The wife’s evidence left no scope for doubt that the conversation was suggested to have taken place in Australia. The wife was presented with Mr Choate Senior’s ANZ Frequent Flyer Visa Statements for the period in question, which included the whole of the month of August in 2004. It was suggested to the wife, and reluctantly accepted that, at the time she alleged the conversation took place Mr Choate Senior was not present in Australia.
The Court’s rejection of the wife’s claim with respect to that conversation is underpinned by the absence of any evidence that the husband’s father ever asked what had become of the line-of-credit which the wife suggested to have been integral to the agreement, or when the parties were going to start to make the contributions which the wife asserted it had been agreed that they would make. If the wife’s claim in relation to the agreement had any substance, it is inconceivable that Mr Choate Senior would not have raised the question of payment. The wife does not suggest that he ever did. The circumstantial evidence in that regard further militates against accepting the wife’s evidence.
Material Findings of Fact
It is convenient to record a number of factual conclusions arising from the foregoing review of the evidence at trial. The Court’s conclusions with respect to credibility are relevant in that context. The first of those is that on balance, the cohabitation of the parties commenced in September 1997, although little of significance turns on that.
It is not in contest that the husband had equity in the N property of not less than $20 000 at the date of commencement of cohabitation. The wife had a car, the value of which has not been established, but otherwise had no assets of significance. The wife has not established that she discharged any debts of the husband.
The wife was then a student, and remained a fulltime student according to her evidence in re-examination at the end of 1999, during which period she attended a suburban campus on not less than 3½ days per week. The under-graduate and post-graduate qualifications which the wife acquired during cohabitation have, as she conceded, materially contributed to her current earning ability.
The husband was a qualified tradesman when the parties commenced cohabitation. He remains a qualified tradesman. During cohabitation the husband acquired a builder’s license. Although the evidence is not clear, and significant reliance upon the husband’s evidence in relation to the topic would not be safe, there appear to be limits on the size of building works which the husband may contract to undertake pursuant to the license which he holds. He can earn $125 000 per annum as a tradesman independently of the licence.
The renovation and improvements of N property were financed by the husband’s father, as was his initial acquisition of the property, albeit when the property was sold the husband’s father was repaid the monies he advanced together with interest thereon. There is no evidence that the interest rate recouped by the husband’s father with respect to those advances was either generous or usurious. The benefit to the husband, and the parties after cohabitation commenced, was thus that they did not have to make any repayments on the substantial sums which were owed to the husband’s father until the property was sold.
The evidence reveals that the great bulk of the work done on the N property, often at a time when the parties were both overseas, was undertaken by the husband’s brother and father, neither of whom was paid for their work.
The wife made modest contributions to the improvement of the property, as did the husband, there being no rational basis for suggesting that the contributions of one were greater than those of the other. The wife contributed to the marketing and sale of the property. The property having sold for $1 370 000, estate agent’s commission of between $20 550 and $24 660 (1.5 – 1.8 percent of $1 370 000) was thus saved and represents a direct and quantifiable financial contribution by the wife.
The H property was materially improved by the husband albeit, as he was obliged to concede, the wife’s income was required to support the parties during the time that he did so. To regard his efforts as superior to hers, or hers to his would not be realistic. The husband’s father and brother did work on the property, some of it during the parties’ absences overseas for which they were not remunerated.
The wife has occupied the home since the parties separated. Whilst the wife has paid statutory outgoings, she had paid nothing with respect to the line-of-credit secured over the property. The husband, in the post separation period, has lived with his parents. Whatever shortcomings cross-examination has revealed with respect to the wife’s claims in relation to contributions during the parties’ cohabitation, the wife’s finances have been transparently revealed in these proceedings. The husband’s have not. Whether, as Counsel for the wife contended, that should result in a finding of the kind discussed by the Full Court in cases such as Weir v Weir(1993) FLC 92‑338, Black v Kellner (l992) FLC 92‑287 and Oriolo v Oriolo (1985) FLC 91‑653 remains to be considered.
So far as the wife’s allegations with respect to the agreement in relation to P property are concerned, the evidence does not permit the Court to make a finding on the balance of probabilities that there was ever an agreement in the terms asserted by the wife. The unsatisfactory nature of the wife’s evidence generally, and in relation to that issue, combined with the circumstantial evidence of what occurred and what did not occur is decisive of the issue. Even if, contrary to the Court’s conclusion, there was an agreement in the terms the wife asserted in her affidavit that would not entitle the wife to succeed with her claim.
As the evidence makes clear, the agreement asserted by the wife did not contain any provision with respect to when the “profit” in the P property would be determined and paid. There is no reason to reject the evidence of the husband’s father that he and his wife intend, and have always intended, to occupy the P property when construction is completed.
Moreover, as the evidence clearly reveals, the fundamental obligation of the husband and wife pursuant to the agreement asserted by her was never fulfilled. The evidence with respect to the timing of the acquisition of credit, the use which was made of it, and the other circumstantial evidence to which reference has been made are decisive in that regard. Defects in the credibility of the husband and his father cannot cure the defects emerging from evidence which can be accepted.
As suggested earlier, the issue remains what, in the circumstances as they have emerged, is the measure of entitlement of the husband as against his parents. As will be seen, that is not necessarily conclusive of matters given the potential overlap in those issues and matters which assume significance within the context of the matrimonial cause.
The property of the parties to the marriage
Other than in the respects to which reference has been made, identifying the property of the parties to the marriage and quantifying such property is not significantly controversial.
The H property is agreed to be worth $1 250 000. The Adelaide Bank line-of-credit secured over the property has an agreed current debit balance of $213 182. There is no reliable evidence with respect to the value of the contents of the H property.
The wife has the Audi motor vehicle purchased in 2005 for $63 418.44 utilising the line-of-credit, which she admits to be worth $17 000. The husband has a 2003 Ford Falcon motor vehicle which he admits to be worth $12 000. The wife has monies in the bank totalling $6898. The husband admits to having G Business including its tools being worth $5000, and to having wine worth $1000.
Although it is not relevant, given the Court’s conclusions with respect to the interest the parties have in it, the P property owned by the husband’s parents is agreed to be worth $5 750 000 and to have been worth $5 000 000 when the parties separated.
The husband is entitled as against his parents to the sum of $222 400 exclusive of income tax. That was conceded by Senior Counsel for the husband’s parents. It was asserted however by Senior Counsel for the husband’s parents that the trust distributions to the husband recorded in the husband’s 2004, 2005 and 2006 tax returns should be offset against that entitlement. That issue requires consideration. So does the issue raised by the wife with respect to the post separation period.
The wife has paid legal fees of $30 714 out of the line-of-credit. As the current debit balance of the line-of-credit will be included as a liability, that sum should be included as an asset.
The husband asserts that he has a MasterCard debt of $16 799. He may well have, but the unsatisfactory nature of the husband’s evidence with respect to all matters involving money precludes the Court from having any regard to that sum unless, which has not occurred, the debt is conceded by the wife. Apart from the line-of-credit debt, the only other debt to which regard should be had is the $4200 debt attaching to the husband’s Ford utility motor vehicle. That debt should be taken into account.
Both parties have superannuation interests, the wife $53 023 in an B Company Superannuation Fund, the husband $20 369 in a Portfolio Care Fund. Given the ages of the parties, the time since they ceased cohabitation and the duration of their cohabitation the preferable approach to their superannuation interests is to have regard to them pursuant to section 75(2) of the Act, rather than to include them, even if in a separate pool, as “property” of the parties to the marriage.
On behalf of the wife it was, quite properly, submitted that the husband had a financial resource in the Choate Family Trust and the NS Trust. That was based upon Exhibit R10 and the undistributed trust distributions of $1 043 936 in the NS Trust as at 30 June 2007 and the beneficiaries’ account in the Choate Family Trust as at 30 June 2005 of $1 097 494. Unlike the position which applied in Kennon vSpry (2008) 251 ALR 257, whilst the husband is a discretionary beneficiary of the trusts, he does not have the legal or other capacity to control the exercise of the trustee’s discretion. As such, whilst the husband is entitled to proper administration of the trusts and due consideration by the trustee, he has no “property” in the trusts as such.
Whilst it could be suggested that the deficiencies in the evidence of the husband’s father in relation to this topic ought not be visited upon the husband, it is not ultimately reasonable to accept that proposition. The evidence leaves little scope for doubt that the case for the husband and that for his father were conducted “hand in glove” in relation to the P property project. The inconsistencies and inadequacies in the evidence which they offered, though foreseeable, may not have been anticipated by them. It is inconceivable however that the husband and his father, both of whom have had representation of the highest calibre throughout the proceedings, would not have been made aware of the importance of this topic and the necessity to be able to give some candid and credible evidence about it. The record speaks for itself. Neither the husband nor his father was willing to give away anything in relation to this topic.
To the extent that it might be suggested that whatever the husband receives when he is “looked after” by his family bears no nexus to the marital relationship between himself and the wife, such suggestion can be safely rejected. The reality is that the anticipation of being “looked after” arose during the course of the cohabitation of the husband and wife. The husband’s ability to make the contributions which give rise to this expectation arise out of that relationship. That is so because, whilst the husband was doing the things which gave rise to the expectation, the wife was contributing her income towards the support of herself and the husband whilst the husband, on any of his various versions of events, was not. It would be repugnant to justice and equity to allow the husband to retain the benefits of being “looked after” to the exclusion of the wife in those circumstances. Objectively, as the husband was obliged to all but concede, the husband’s involvement in the P property project was only possible because the wife continued to contribute her earnings for the support of herself and the husband.
Objectively, nothing emerging from the evidence provides any reliable basis for suggesting when, in what manner and to what extent the husband is likely to be “looked after” by his parents. Clearly, having failed to give any evidence about a matter which was peculiarly within the knowledge of the husband and his father, and utterly beyond the knowledge of the wife, the husband cannot benefit from the obscurity with which he has managed to shroud this topic.
On the other hand, the husband’s financial position is largely transparent given the concessions sensibly made on his behalf by his learned Counsel with respect to his earning capacity, and the absence of any real suggestion that, other than to the extent that he will be “looked after” by his parents, the husband has undisclosed assets or resources. Whilst there are clearly cases where the deficiencies of the financial disclosures of a party disentitle them to any real caution in the exercise of discretion, the husband in this case does not in the Court’s view fall within that category of litigant.
Rather than a general absence of “undue caution” (see Weir v Weir (1993) FLC 92‑338, Black v Kellner (l992) FLC 92‑287 and Oriolo v Oriolo (1985) FLC 91‑653), the husband’s evidence disentitles him to “undue caution” with respect to the impact under section 75(2) of being “looked after” by his parents.
Accepting that the husband’s case has never been that he would be thus “looked after”, and accordingly ought not benefit from such an approach, reference to the basis upon which Mr L Choaate will be remunerated when the P property project has been completed is instructive. The husband has been onsite at the P property project almost every day and Mr L Choate almost every other day. That simple proposition however overlooks the differing roles which each has played in the project and the greater responsibility, both practical and legal, which has fallen upon Mr L Choate. Even so, the fact that Mr L Choate will receive $200 000 from his parents on completion of the P property is useful for present purposes. To suggest that the husband would be likely to be “looked after” to any less extent would be, on the evidence, unfair to the husband.
Objectively to suggest that the husband might be “looked after” to the extent of $300 000 would not be unrealistic. Payment to the husband of his three years unpaid wages alone would, after tax, comfortably accommodate such a provision on his behalf. Regarding the husband as having a financial resource in the order of $300 000 is arbitrary. It is arbitrary because the husband chose not to place before the Court any evidence which provides any empirical basis for quantifying how he will be “looked after” by his parents, notwithstanding that he and his father readily concede that he will. The husband had ample opportunity to tell the Court what he expected to receive. In circumstances in which he made clear that he did expect to be “looked after” the refusal, or inability to give any indication of what his expectations might be cannot be successfully relied upon to the detriment of the wife.
Although a less than ideal figure, in the absence of anything which appears less unreliable, the Court proposes to regard as a resource of the husband the potential to be “looked after” in the order of $300 000. It would be naïve not to expect that the husband will be “looked after” in a tax effective manner. The concept of a “gift” by his grateful parents comes to mind. Being thus “looked after” to the tune of $300 000 represents benefaction of event greater magnitude if “income” were to be involved.
What significance that financial resource has is significantly influenced by the extent to which it comes about by reason of events which have a nexus with the marital relationship of the parties. At least for half the time that the husband has worked on the P property, there was a very real nexus with the marital relationship of the parties in that they were cohabiting, and the husband was not bringing in the $125 000 per annum which he was capable of earning from self-employment elsewhere. Objectively, to adjust in the wife’s favour by $75 000 by virtue of how the husband might be “looked after” when the P property is completed would in the circumstances be not unrealistic.
The Choate Family Trust and the NS Trust are also potential financial resources of the husband. The evidence suggests that the trusts were established a decade before the wife became part of the Choate family (see Exhibit R6). In those circumstances, and given that the wife has not contributed directly or indirectly to the assets of the trust, there impact pursuant to section 75(2) must be limited.
The husband may or may not have received distributions from the trusts in 2004, 2005 and 2006. If he has, the husband has not been credited in these proceedings with such distributions.
The last financial statements for the NS Trust (see Exhibit R10) relate to the financial year dated 30 June 2007. The balance sheet for the trust for that year reveals net assets of $100 after taking into account non-current assets worth $2 352 044, external non-current liabilities of $1 332 872 and unpaid trust distributions to the Choate Family Trust of $1 043 936. The profit and loss statement for the trust reveals gross income of $266 169 less expenses of $184 904 to produce an operating profit of $81 265. The income appears to be essentially, if not entirely referrable to rentals generated by four shops and two units owned by the trust.
There is no suggestion that the husband has contributed directly or indirectly to any assets of the trust or to its trading activities. Regrettably, the 2007 financial statements of the Choate Family Trust have not been provided to the Court. The last financial statements for the Choate Family Trust relate to the year ended 30 June 2006. Those statements reveal a net profit from trading of $60 093. It is reasonably apparent from the financial statements for the NS Trust for that year that the NS Trust profits are paid directly to the Choate Family Trust.
The balance sheet of the Choate Family Trust as at 30 June 2005 is identical to the balance sheet of the NS Trust for the same year. What precisely is the relationship between the two trusts is not readily apparent, and the Court has not been assisted by any evidence produced by or on behalf of the husband. As at 30 June 2005 the Choate Family Trust was indebted to the current accounts of the beneficiaries in the trust in the sum of $1 097 494.
Having regard to the profits generated by the trusts, it is tempting to conclude that, however any distributions might be recorded, little is actually paid out by the trust to the beneficiaries in any given year.
It ought not have been difficult for the husband to adduce evidence from his accountant, or to call evidence from the trust’s accountants in relation to the trusts. It is difficult to accept that, the husband having declared distributions in his tax returns for the 2004, 2005 and 2006 income tax years that there would not be records of individual beneficiary’s loan accounts. How the trusts could be properly administered without such documents is difficult to imagine.
The failure to reflect the evidence with respect to the trusts as potential financial resources of the husband appears unfair to the wife. Moreover, so doing potentially rewards the husband for failing to make anything approaching a full and frank disclosure of his financial circumstances. The evidence before the Court precludes the husband from successfully asserting that, although a discretionary beneficiary, he will not, in the course of the trustee’s due consideration, benefit from the trust in the future. On one version of the evidence, the trustee has in the past exercised the discretion in his favour by declaring distributions in at least three years.
On the other hand, to the extent that either of the trusts bears any nexus to the marital relationship of the parties, the Court’s findings, and particularly its adverse findings, leave little scope for suggesting that there remains any significant residual capacity for the trusts to impact upon the entitlements of the parties pursuant to section 75(2).
Objectively, on the findings of fact which the Court has made, and the conclusions based upon those findings, to enhance the wife’s entitlement by reason of either of the trusts would in the circumstances be no more and no less than increasing the entitlement of a wife in circumstances where, fortuitously, the husband has wealthy parents. Without more, such a step would in the circumstances of this case be difficult to justify.
The evidence suggests there are a number of beneficiaries of the trust. The Deed of Trust pursuant to which the Choate Family Trust was created suggests that Mr L Choate, and any other children the husband’s parents may have will also be discretionary beneficiaries of the trust.
The husband’s parents are clearly wealthy independently of the trust as the representations of the husband’s father to the NAB confirm (see Exhibit R9). It is possible that the husband and his brother would, at some future time, receive the totality of the trust assets. There is no clear evidence, but it is likely that the balance sheets record the historical costs of trust assets whereas, as occurred when the husband’s father provided his bankers with a position statement, much higher market appraisals or assessments were relied upon. There is no expert or other reliable evidence as to the life expectancies of either of the husband’s parents.
Not irrelevant to this aspect of the case are the submissions on behalf of the wife with respect to the husband’s failure to make a full and frank disclosure. Whilst the Court does not conclude that the husband had substantial undisclosed funds, his failure to attempt to make full and frank disclosure of the position with respect to the trusts is of significance. In circumstances where a party has been competently represented, as the husband in this case undoubtedly has, the failure to produce source documents cannot be likely ignored.
As noted earlier, the trusts have very substantial assets. There are a limited number of adult beneficiaries of the trusts to whom distributions can be made. The trusts clearly have had income to distribute. The evidence suggests that there have been substantial distributions, whether they have been paid out, or, as appears more likely, credited to beneficiaries’ loan accounts. As also noted earlier, there has been a complete absence of explanation for the failure to produce source documents in relation to the trusts.
The Court struggles to accept, given the level of representation of both the husband and his father, and the abundance of opportunity during the trial to do so, that the failure to produce the source documents is inadvertent. It may well be that the husband preferred to risk adverse inferences being drawn as a result of not producing source documents with respect to the trusts, and particularly the beneficiaries’ loan account ledgers, rather than produce them and provide evidence supporting a finding that he had actual resources. It should be noted that there is no evidence before the Court that what might be considered the usual records of trading trusts do not exist or are unavailable. The totality of the husband’s evidence with respect to financial matters permits the Court to be not unduly cautious about his interests.
The Court struggles with the issue of the trusts. As noted earlier, to the extent that the trusts have been revealed by the evidence to bear a nexus to the marital relationship of the husband and wife, their involvement, or possible involvement, has been accommodated within the Court’s findings and conclusions based upon them. On the other hand, for all the Court knows, or has been allowed to know by the husband, the husband may have a very substantial credit balance in a beneficiaries’ loan account in the trusts. Making no adjustment for the trusts does not in those circumstances sit well with the notions of justice and equity, quite apart from the comprehensive failure of the husband to make a full and frank disclosure of his financial circumstances.
Objectively, although necessarily arbitrary, if an adjustment of $100 000 were made in the wife’s favour by reference to how the husband might be “looked after” by his family, the unsatisfactory disclosures with respect to the Choate Family Trust, and the husband’s generally inadequate and unreliable financial disclosures, the husband could not, in the Court’s view, complain about that. Such an adjustment arises from the husband’s own failure to make a full and frank disclosure of matters which the evidence reveals to have been within his control.
Conclusion
The effect of the reasons which the Court has endeavoured to articulate, is that the wife is entitled to receive, exclusive of her car, bank account and paid legal fees, a further sum of $709 213.
The equity in the former matrimonial home of the parties is approximately $1 036 820. Receipt by the wife of $709 213 of the equity in the property results in the husband receiving approximately $327 607 of such equity. The wife’s entitlement to the equity in the former matrimonial home accordingly approximates 68.4 percent of such equity whilst the interest of the husband approximates 31.6 percent.
Given the finding of equality of contributions, to property, real, deemed or notionally added back, which is ultimately not seriously controversial, and to the reality that the property to be retained by the parties other than relating to the equity in the former matrimonial home is very modest and approximately equal, the very considerable disparity in the entitlements of the parties with respect to the equity in the former matrimonial home necessitates careful consideration of whether the outcome the Court proposes satisfies the requirement of justice and equity imposed by section 79(2) of the Act.
It could be suggested that, if the determination of section 79(4) and section 75(2) factors fell within the ambit of a reasonable exercise of discretion there would be little scope for altering that state of affairs by reference to section 79(2). Similarly, it is difficult to suggest how any factor relevant under section 79(2) would not have excited consideration pursuant to the provisions of section 79(4) and/or section 75(2) of the Act.
As is transparently obvious, in this case the disparity in entitlements of the parties favouring the wife arises from matters which were always beyond the capacity of the wife and her legal advisors to reveal, and always within the capacity of the husband to reveal.
There is no rational basis for concluding that the husband has not made a conscious decision to obscure the true arrangement between himself and his parents with respect to the P property development and/albeit ultimately of less significance, his true position in relation to the NS and Choate Family Trusts. Other than by paying lip service to the authorities in relation to litigants who fail to make full and frank disclosures, the Court does not consider that any outcome which does not significantly favour the wife over the husband could, in the circumstances of this case, satisfy the requirements of justice and equity.
The Court concludes that, whatever the true nature and effect of section 79(2) of the Act, it does not on the findings of fact and conclusions based upon them in this case provide a basis for altering the entitlements of the parties which it has concluded to be appropriate by reference to section 79(4) and section 75(2).
As is apparent from the orders sought by each of the parties, the husband does not seek to retain the former matrimonial home at H. The wife does. On that basis alone an order in favour of the wife retaining the property, provided that she pays the husband his entitlement with respect to it, could be justified. The reality that the Court’s orders will provide that the wife receive a significantly greater share of the equity in the property than the husband provides further support for so ordering. Although the wife has, inexcusably in the Court’s view, failed to service the interest on the line-of-credit secured over the matrimonial home in the post separation period, which has in turn been taken into account, the fact that the wife has retained occupancy of the property for what is now a substantial post separation period further supports giving her the option to acquire the husband’s interest in the property.
The Form of Orders
Whilst the concession made by Senior Counsel for the husband’s parents in relation to the sum of $222 400 remains on the Court record, and no doubt could, were it necessary to do so, provide an adequate foundation for an order in those terms, the Court does not propose making such an order. The husband has never sought such an order.
As the equity in the former matrimonial home of the parties is more than sufficient to satisfy the wife’s entitlement, failing to make such an order cannot adversely impact upon her. In those circumstances, and as the husband has not sought orders against his parents, it is sufficient to dismiss the claims with respect to the husband’s parents, and make an order that the wife pay to the husband the sum of $327 607 upon payment of which the husband shall transfer his interest in the former matrimonial home to the wife, failing which the property will be sold and the proceeds of sale after payment out of agent’s commission, selling expenses and the line-of-credit be divided as between the parties in shares of 68.4 percent to the wife and 31.6 percent to the husband.
The costs of all parties will be reserved.
I certify that the preceding two hundred and forty nine (249) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman.
Associate:
Date: 12 June 2009
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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