Coleiro and Coleiro
[2012] FMCAfam 766
•6 August 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COLEIRO & COLEIRO | [2012] FMCAfam 766 |
| FAMILY LAW – Property settlement – pool of divisible assets – whether proceeds of sale of former matrimonial home to be included. |
| Family Law Act 1975, ss.75(2), 79 Evidence Act 1995 (Cth), ss.69(3), 140 |
| Hickey & Hickey; A-G for Commonwealth (Intervener) [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 AJO v GRO [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220 |
| Applicant: | MS COLEIRO |
| Respondent: | MR COLEIRO |
| File number: | PAC 821 of 2011 |
| Judgment of: | Halligan FM |
| Hearing dates: | 28 & 29 May 2012, 19 July 2012 |
| Date of last submission: | 19 July 2012 |
| Delivered at: | Parramatta |
| Delivered on: | 6 August 2012 |
REPRESENTATION
| Counsel for the Applicant: | Ms Conti-Mills |
| Solicitors for the Applicant: | Odtojan & Associates |
| Counsel for the Respondent: | Mr Greenaway |
| Solicitors for the Respondent: | Ian Harper & Co |
ORDERS
The husband shall pay the sum of $100,000 to the wife within thirty days.
Otherwise, each party is declared to be solely entitled as between themselves to all property in their respective possession or control.
IT IS NOTED that publication of this judgment under the pseudonym Coleiro & Coleiro is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 821 of 2011
| MS COLEIRO |
Applicant
And
| MR COLEIRO |
Respondent
REASONS FOR JUDGMENT
Introduction
These are contested property settlement proceedings under the Family Law Act 1975.
The wife sought orders that the husband pay her $100,000 within
30 days and that otherwise each party retain property and resources in their respective possession or control. The husband sought that each party retain their respective property and resources.
Background
The wife is aged 47 (born [in] 1964) and the husband is 73 (born [in] 1939). The parties married [in] 1996, separated on 1 August 2006, and their divorce became final on 28 March 2012.
The wife has two children, 25 year old Ms J and 11 year old [X]. The husband is not the father of either child.
At separation, the most significant asset was the matrimonial home, of which the husband was the sole registered proprietor. He sold the property in late 2010/early 2011, receiving net proceeds of sale of $200,000. The husband withdrew the whole $200,000 from the bank in cash in a series of withdrawals in March 2011, and said that in late March 2011 the money was stolen from his car. It is the wife's case that the husband's evidence of the proceeds of sale being stolen is false, and that he retains possession or control of the money. This is the most significant, but not the only, factual issue in this case, and on the wife's contention calls the husband's credit as a witness into serious question.
Matters relevant in assessing the husband's credit
The wife was the only witness in her case. The husband gave evidence and in addition called his friend Mr C and a clinical audiologist Mr M as witnesses in his case. Mr M was not required for cross-examination. I will deal with issues concerning the credit of the witnesses who were cross-examined in the course of canvassing their evidence and making findings on contested issues of fact. However, there are some matters pertaining to the husband that in my view are relevant to the assessment of his evidence and his credit as a witness, which I will now address.
The husband was born in Malta and came to Australia 48 years ago. His ability to read English appears to be extremely limited, to the point that I am prepared to proceed on the basis he is in effect illiterate, at least in English. His affidavits bear certificates indicating they were read to him before he affirmed them. He seems to have received very little formal school education, and I am uncertain whether he is literate in his native language.
Despite assertions by the husband’s solicitor to the wife's solicitor that the husband speaks English well and did not need the assistance of an interpreter, which is consistent with the wife's evidence, the husband subsequently preferred to have the assistance of an interpreter when giving evidence because, he said, he gets stressed in court. The court provided him with a Maltese interpreter throughout the hearing, and he used the interpreter extensively but not invariably when giving oral evidence. I draw no adverse inference against the husband from his requesting and using an interpreter. I am satisfied that in the context of giving evidence in court proceedings, this was entirely appropriate.
The husband suffers significant hearing loss and even with a hearing aid has great difficulty hearing, apparently relying on lip reading to assist his understanding. The husband did not always understand questions when first put to him in the witness box, and they had to be repeated until he demonstrated by his response that he understood the question. Counsel for both parties and the interpreter who assisted the husband patiently persisted with questions, repeating and rephrasing them to attempt to ensure the husband understood what he was being asked, but even so the husband's answers on occasions remained unresponsive to what he was being asked.
In light of the husband's hearing impairment, I am not prepared to proceed on the basis that any non-responsive answers involved a deliberate attempt by the husband to be evasive or avoid fair testing of his evidence. Despite some concerns I had that it appeared on occasions that the husband may have been intentionally avoiding answering questions, I am satisfied he should be given the benefit of the doubt where doubt exists due to the seriousness of the findings adverse to his credit the wife urges the court to make.
A suggestion was apparently raised when an interlocutory injunction application the wife filed early in the proceedings was before the court that the husband’s mental faculties may have been affected by dementia. When the wife's solicitors wrote to the husband's solicitor in October 2011 rejecting any suggestion the husband had dementia unless an expert report was provided and referring to the possible need for a litigation guardian if he did have dementia, the husband's solicitor replied rejecting any suggestion the husband was unable to give “clear and consistent instructions provided he understands what is being said”.
Despite this, the husband relied on a report of a general medical practitioner dated 18 April 2011, that was provided in response to a request by the husband's solicitor, and which the husband's solicitor had when giving the reply to the wife's solicitor just mentioned. That report referred to a CT scan of the husband's brain which was said in the report to show evidence of cerebral infarction and stated-
“(I)n my opinion he is suffering a considerable degree of dementia. Without a trained interpreter it is impossible to assess him further. I recommend a specialist referral.”
This report was prepared for these proceedings, and hence is not an admissible business record (Evidence Act 1995 (Cth), s.69(3)). However, it’s admissibility was not objected to on behalf of the wife.
The only matter mentioned in the doctor’s report as supporting the opinion that the husband was “suffering a considerable degree of dementia” was the CT scan, which was not in evidence. It seems the doctor was unable to communicate with the husband sufficiently to “assess him further”. It is unclear to what extent, if at all, the doctor was able to assess the husband by verbal communication with him. What further assessment the doctor was attempting but unable to conduct because of the absence of “a trained interpreter” was not stated. Whether the doctor was aware of the husband's hearing impairment, and whether this in fact was the impediment to communication rather than the absence of a trained interpreter, is unclear. There is no evidence the husband in fact saw a specialist, as the doctor recommended. The purpose of the recommended consultation with “a specialist”, and in what area of speciality, was not stated.
In any event, the opinion expressed by the doctor did not suggest whether, and if so in what way, the suggested diagnosis of “a considerable degree of dementia” affected the husband, in particular in relation to matters relating to an assessment of his evidence and his credit as a witness, such as his ability to understand questions, his ability to remember and coherently relate events occurring within the previous, at the time the doctor saw him, three or four months.
Because of these issues with the doctor’s report, and in light of the husband's solicitor’s contention that the husband was able to give “clear and consistent instructions provided he understands what is being said”, I am satisfied I should give the opinion expressed by the doctor no weight.
In any event, it was conceded by counsel for the husband that there was nothing to indicate how the court could or should take the doctor’s opinion into account in assessing the husband's evidence. However, it was submitted on behalf of the husband that it was obvious that on occasions the husband was confused when answering questions, although he generally was able to ultimately answer questions. I have already acknowledged this phenomenon in relation to the husband's hearing loss, and indicated I will not regard a non-responsive answer as adverse to the husband.
Other than that, however, as the husband has not put any probative evidence before the court to suggest he may be suffering from dementia or other cognitive impairment, despite clearly being put on notice in October 2011 that the wife required an expert report if it was to be suggested he suffered from dementia, and despite the clear recommendation from the husband's own doctor in April 2011 that there should be a specialist referral, I am not satisfied any allowance should be made in assessing the husband's evidence for the possibility he may be affected by dementia or other cognitive impairment in a way that affects his ability to give a proper and lucid explanation of facts in issue, in particular what happened to the proceeds of sale of the parties’ former matrimonial home.
In this regard, I note that it was the submission of the husband's counsel that the husband gave a consistent explanation in both his evidence in chief and in cross-examination for what he said happened to the proceeds of sale.
The evidence
The wife arrived in Australia from the Philippines the month before the parties married. At marriage, she had no property and was not in employment.
At marriage, the husband owned an unencumbered house property at [D] and its contents, his tools of trade, two motor vehicles and a bobcat. He had no debts. He worked as a [omitted].
The parties and Ms J, and from her birth [X], lived in the husband's home throughout the parties’ cohabitation.
In November 1996, the wife commenced work in a [omitted], and subsequently worked as a [omitted] and as a [omitted]. The inference is that this employment was part time. She contributed her income towards the family expenses, as did the husband.
In 1999, the wife went back to the Philippines and had an affair, as a result of which [X] was conceived. The wife said she offered the husband to have an abortion but he said the wife should keep the child and he would treat her as his own. The husband and the wife registered the child’s birth as the child of them both. The husband said the first time he knew he was not [X]’s father was when the wife's affidavit making the allegation was read to him. However, he did not challenge the mother's assertion he was not [X]’s father. Because of the view I take of the husband's credit as a witness, as dealt with later, I accept the wife's evidence that the husband knew this child was not his, encouraged the wife not to have an abortion, and promised to treat the child as his own.
On 11 August 2001, the wife and the children were injured in a motor vehicle accident, and on 17 May 2002 the wife received $12,000 compensation for her injuries. The wife saved $5,000 of this money for Ms J’s tuition fees and spent the balance on family expenses. When the wife had her car accident, the husband said he stopped work for four weeks to stay home and look after the wife and her two children. The wife denied this and said her mother came from the Philippines to take care of her and her daughters.
Because of the view I take of the husband's credit in relation to a “receipt” he said the wife gave him for money he allegedly paid her, and in relation to the alleged theft of the proceeds of sale of the matrimonial home, both of which I will deal with later, I prefer the wife's evidence to the husband's, and find that the husband did not assist in the care of the children when the wife was injured, but that the wife's mother came and assisted the parties.
The husband borrowed funds secured by mortgage on the [D] property. The evidence about this is somewhat confused. As best I can understand the evidence of both parties, in 2002 the husband borrowed $150,000 secured on the [D] property to meet legal expenses incurred in court action arising out of [omitted] work he did and in seeking to retain his [omitted]’s licence, which he lost in 2002. He borrowed a further sum of about $90,000, also secured on the [D] property, to purchase a [omitted] business in mid 2005. That further borrowing took the total indebtedness to about $250,000 at that time.
The husband sold his bobcat and one of his motor vehicles, a truck, for $34,000 “after” he lost his [omitted]’s licence. The husband did not say in his evidence in chief how long after he lost his [omitted]’s licence he sold these items or what he did with the proceeds of sale. Nor did he suggest in his evidence in chief that he undertook any work or employment after losing his [omitted]’s licence.
In cross-examination, the husband said that after he lost his [omitted]’s licence he did [work omitted] until he turned 65 in February 2004 and began to receive the age pension. He said when he received the age pension, he “sold everything”.
The wife said the husband used the $34,000 from the sale of his truck and bobcat to pay for a holiday in the Philippines “with his friends” and to buy a motor vehicle. The husband said in cross-examination that he paid for a trip to the Philippines in 2011 using the proceeds of sale of his truck and bobcat.
The wife's evidence was that from August 2002 when he lost his [omitted]’s licence, until becoming entitled to the age pension in February 2004, the husband received Newstart allowance. She was not challenged on this evidence, and I accept it, preferring it over the husband's belated suggestion, made for the first time in cross-examination, that he did work with the bobcat after losing his [omitted]’s licence. I accept the wife's evidence that the whole of the husband's Newstart allowance and age pension was paid towards the mortgage secured on the [D] property, and her income alone met all the other expenses of the parties.
A month after the husband lost his [omitted]’s licence, the wife took [X] to the Philippines and left her in the care of her mother for two years so she could work full time. The wife worked full time as a [omitted].
As mentioned, the parties bought a [omitted] business in 2005. It was bought in the wife's sole name. The wife alone worked in the business from its purchase.
In 2005, the parties approached solicitors for advice about protecting the [D] property. The wife was advised that she should lodge a caveat to protect her interest in the property. The solicitors placed a caveat on the [D] property on her behalf.
The husband said that the wife sent money to her family in the Philippines “on a frequent basis”, but did not know how much she sent. He also said the wife visited her family in the Philippines each year. He was not challenged on tis evidence, and I accept it. However, with no indication of the amount or frequency of the remittances to the wife's family in the Philippines, I am unable to take that matter further.
The parties separated on 1 August 2006. The wife and her children left the [D] property. However, the wife said that until about September 2010, she continued to meet the husband's living expenses, including council and water rates and utilities on the [D] property, insurance on the [D] property and the husband's telephone bills, and the wife said she gave the husband sums between $20 and $50 on an unspecified number of occasions. The wife said that the husband's Centrelink benefits continued to be paid in full in reduction of the mortgage on the [D] property.
In cross-examination, the husband agreed the wife continued to look after him and help him as much as she could, cleaning his house when she could, and sometimes driving him to medical appointments until March 2011. He said she paid his phone bills, but said sometimes he gave her the money. From separation she paid some but not all of his electricity bills. The husband suggested that sometimes the wife paid a bill for him as he helped her in the shop, but when challenged about helping the wife in the shop, the only thing he referred to was making some cupboards for the shop when it was first bought.
The husband then said in cross-examination that the wife never supported him, that he lived on his pension and the sale of his machines. When it was put to him that he had just said the wife sometimes paid his phone and electricity bills, he said maybe she paid once. When it was put to him that the wife paid his solicitor’s fees and court costs for assault charges against him for an assault on Ms J on the day of separation, he said that the wife reported him to the police and caused the trouble, so she had to pay.
I was not satisfied the husband was being truthful in the evidence he gave about the assistance the wife provided to him after separation, and I accept the wife's evidence about this.
The husband said that on three occasions while the business was owned, the wife asked him for money and he gave her $1,000. He said she refused to sign receipts until 5 October 2010, when he said he refused to give the money to the wife unless she signed a receipt. He said on this occasion the wife wrote out a “receipt” and gave it to him. He put the “receipt” into evidence. The wife denied receiving money from the husband as alleged, denied writing a receipt, and denied signing the “receipt”, which she said was a forgery.
In cross-examination the husband admitted that the “receipt” he said was written out by the wife was not in the wife's handwriting. He said it was not written by him, and he did not know who wrote it. He gave no explanation for his false assertion in his evidence in chief that the wife wrote out the “receipt” and gave it to him.
I am satisfied that the husband's evidence in chief about this document was intentionally false evidence. This calls the husband's credit as a witness generally into serious question. I am not satisfied the husband gave the wife any money as he asserted.
I accept the wife's evidence that from separation until January 2010, she attended the [D] property weekly or fortnightly and cleaned, washed the husband's clothes, changed the bed linen and fed the husband's seven dogs. She spent a least three hours attending to these tasks on each occasion she attended the home.
The wife said that from separation and until the business was sold in September 2010, the husband came to the business and ate three meals a day there, and when he came he took [goods omitted]. The husband said that whenever he went to the [business], he bought items and had to pay for them. He denied taking anything from the [business] that he did not pay for except for [omitted] the wife gave him where the date had expired on them. I prefer the wife's evidence over the husband's.
The wife said that in early 2009, she noticed that the [D] property was for sale.
The wife said that in July 2009, she bought a property at [R] for $365,000, all of which she borrowed. She said she borrowed $300,000 from Westpac bank, $60,000 from a friend, Mr H, and $11,000 from her daughter Ms J. She received $14,000 from the First Home Owners Grant scheme.
The wife's evidence about her arrangement with Mr H and Ms J was confused and confusing. The wife asserted that the arrangement with Mr H and Ms J as at February 2011 was that she would repay them when she sold the [R] property.
She further asserted that “each of them would have a 1/3 share of (the [R] property) by paying their share in the loan repayments”. She said the loan repayments were then $450 per week. She asserted her share was $250, Mr H’s share was $200, and Ms J’s share was $200. Why the three “shares” of the $450 mortgage repayment total $650 was not explained, and she was not cross-examined about this. The wife asserted that after she lost her employment in November 2010, Mr H paid the $450 per week loan repayment and that “this increases his interest in the ([R] property)”.
In fact, the bank records for the loan account put in evidence by the wife show the weekly loan repayment being made between
30 July 2010 and 28 January 2011was $216. The wife was not challenged about this inconsistency.
There was no evidence of how either Mr H or Ms J would have a one third share in the [R] property, or any other share for that matter.
In early 2010, the wife was contacted by an estate agent at the husband's request to advise her that there was a buyer willing to pay between $485,000 and $499,000 for the [D] property. Later, the wife noticed a “For Sale” sign on the property from the same agent. However, the husband repeatedly told the wife he would not sell the home, and if he did he would give her some money.
The wife said that later the agent told her he was removing the for sale sign as he could not sell the property, and she noticed that the sign had been removed.
There was a clear inconsistency between what the wife was being told by the husband and what she was being told by the husband's estate agent. She gave no evidence of challenging the husband on this obvious inconsistency.
In September 2010, the business was sold, netting $40,000, which was divided equally between the parties. The wife used her $20,000 to pay business creditors. However, she had insufficient to repay her credit card debts. She had used her credit cards to meet business expenses during the time she conducted the business, and after its sale owed $25,000 on her credit cards. Since the sale of the business, she has paid the interest charges on her credit card debts. By the end of April 2012, the wife's credit card debts totalled $54,496 and she was in default in her repayments.
The husband gave no evidence as to what he did with his share of the proceeds of sale of the business.
At around the time the business was sold, the husband asked the wife to sign a removal of caveat form for the [D] property his solicitor had prepared, and she did so.
The husband said that “when my money ran out”, he could not afford to make the mortgage repayments, so he sold the [D] property for $480,000, netting $200,000.
The husband did not say what money ran out. The husband's evidence about why he sold the [D] property is consistent with the wife's assertion that while she ran the [omitted] business, she was meeting the husband’s living expenses other than the mortgage repayments, enabling him to meet the mortgage payments from his pension.
In January 2011, the wife went to the [D] property and saw the contents being removed. When she questioned the husband about this, he advised her he had found a tenant for the property at $500 per week. There was no for sale sign on the property.
The wife travelled to the Philippines from 19 January to
4 February 2011 unexpectedly because her mother was ill. On her return, a friend told her the [D] property had been sold.
The wife rang the husband, who said he had been trying to contact her, and at his request they met outside a bank, where the husband gave her a cheque for $1,000. The wife asked the husband where the money from the sale was, and the husband told her there was no more money as he had been charged twice by the bank for the mortgage, so that he had paid two amounts of $269,000.
The [D] property was sold for $480,000. The net proceeds of sale were $200,000. I will deal with the evidence about what happened to the proceeds of sale later in these reasons.
During the parties’ cohabitation, the wife attended to child care, and performed the household duties. Until February 2011, she accompanied the husband to his medical appointments and ensured he met all his medical requirements.
After the wife sold the business in September 2010, the wife did not work until June 2011. There is evidence that she was unfit for work on medical grounds from 7 February 2011 to 7 May 2011.
The wife worked two or three days a week as a process worker from
22 June 2011 to 30 September 2011, was then unemployed until mid October 2011, was employed from 18 October 2011 to 11 January 2012 as a casual [omitted] worker through an agency, was then unemployed until mid March 2012, and since 16 March 2012 had worked between two and five days a week again as a casual [omitted] worker through an agency at an hourly rate of $21. She has no sick leave or annual leave.
The wife said she suffers arthritic pain and cannot kneel or stand up without support. She provided no medical evidence of any current medical condition. She said she needed to undergo dental treatment she could not afford, but provided no evidence from a dentist or dental surgeon that she needed dental treatment. I am not satisfied the wife has any impairment to her ability to work on medical grounds.
The wife alone supports [X]. The child suffers various medical conditions that require treatment the wife pays for.
The wife was unable to service the mortgage on her property at [R], and in late 2011 sold the property to her daughter Ms J for $385,000. Ms J assumed responsibility for the money lent by Mr H to the wife when she bought the [R] property. The payout figure on the wife's bank loan secured on the property at the time the sale to her daughter settled was $294,648.12. The wife did not say whether she received any money from the sale of the [R] property, and she was no cross-examined on the point.
The husband exchanged contracts for the purchase of a property at [T] with a friend, Mr C, as joint tenants on 23 May 2012. The purchase price is $90,000.
The husband said he saw this property advertised for $90,000. He said it has three “granny flats” that would provide a weekly income. He said he mentioned the property to his friend Mr C, who he had known for over thirty years. He said he drove out to have a look at the property. He said the house and granny flats all need repairs and maintenance which he said he could do as a [omitted].
The husband said Mr C offered to buy the property but said he needed a manager on site to collect the rent and effect any repairs. The husband said he offered to be the manager and do the repairs, but said he wanted some security because he had had a falling out with the friend on whose [property] he was living at [N]. The husband said that after some further discussion, on which he did not elaborate, Mr C agreed to buy the property in both their names as joint tenants, and the husband would manage the property and carry out repairs and improvements.
When it was put to the husband that he was buying a property, the husband said it was old and falling down, he borrowed the money and the agreement was he would pay what he could with no pressure. It was not part of the husband's evidence in chief, or that of Mr C, that the husband was borrowing any money for the purchase of the [T] property. It was their evidence that Mr C was providing the whole of the purchase price.
In cross-examination, the husband said that-
a)He went to see the [T] property with a friend about a month or month and a half before late May 2012, that is, after the end of March 2012, by which time according to the husband evidence the proceeds of sale of the [D] property had been stolen;
b)When he returned from looking at the [T] property, he told Mr C about it and Mr C decided to buy it.
c)He (the husband) decided to buy the property before speaking to Mr C about it, and later decided that Mr C would be included;
d)He and Mr C went to a solicitor Mr W about purchasing the property;
e)The husband was named as the sole purchaser on the contract for sale when first prepared, and Mr C’s name was then handwritten on the contract as an additional purchaser;
f)He put his name down as the sole purchaser of the property so it would not be sold to anyone else, then asked Mr C to help him;
g)He has not given Mr C any money in connection with the purchase of [T], he helped Mr C a lot in his business, and Mr C has offered to assist him in return;
h)The husband will live rent free on the property and act as caretaker, including looking after animals on the property, with the proceeds of sale of any animals going to Mr C; and
i)He paid the deposit, then corrected himself and said Mr C paid the deposit, and documents stating the husband paid the deposit are a mistake.
A letter dated 11 April 2012 from Mr W’s firm to solicitors for the owner of the [T] property refer to the husband as the sole purchaser. A letter dated 26 April 2012 from the estate agent handling the marketing of the [T] property addressed to Mr W’s firm and advising that the vendor has put the property back on the market due to delay in effecting an exchange of contracts refers to the husband alone. These letters, together with the contract for sale having Mr C’s name added as a purchaser in handwriting all suggest the husband's evidence in chief about how he came to be included as a purchaser of this property, and suggesting the decision to purchase was made by Mr C, is not true.
Mr C, a witness in the husband's case, described himself as a retired [omitted]. He said that the husband came to him a few months ago and said he had found a cheap property with three granny flats that could be rented out, that he had been up to see the property, and it needed some work done on it but it will bring in an income. He said in cross-examination that the husband told him about the property after the husband had been to see it with a friend.
Mr C said he decided to buy the property, but his decision was dependent on there being a resident manager to carry out repairs and maintenance on the property. He said the arrangement suited the husband as he needed assured accommodation and had the skills to take advantage of an opportunity to improve the property. He said he decided to buy the property with the husband as joint tenants as the husband is older than him and the husband's share will come to him when the husband predeceases him. In cross-examination,
Mr C appeared not to understand the difference between a tenancy in common and a joint tenancy.
Mr C said he had provided the deposit for the purchase of $9,000, and will pay the balance of the purchase price of $81,000 and stamp duty. In cross-examination, he said he got the deposit from the sale of some machinery, gave the husband the money for the deposit in cash, and the husband deposited the money into the estate agent’s account for the deposit. The husband's evidence as to his illiteracy satisfies me the husband could not have done this without assistance.
In cross-examination, Mr C said the first time he contacted
Mr W was to tell him he and the husband were interested in buying the [T] property. He said he was aware his name had been added to the contract for sale after it had initially been prepared with the husband as sole purchaser. He said the husband had contacted the solicitor’s office first and must have forgotten to mention that there were two purchasers. He said he had not seen the property, and accepted the husband's judgment about it. He did not consider the transaction risky as it was not “big dollars”. He described it as a business proposition for him, in that he anticipated making some money from rental and running a few animals on the property.
Mr C affirmed he paid the deposit, and said he would pay the balance of the purchase price. He said he had the funds available, and produced bank records to prove the fact. These records were in the name of [S] Pty Limited, and he said he intended that the company would purchase the property, and that the purchase would not proceed in his name. In fact, subsequent to giving this evidence, the purchase was completed with the husband and Mr C becoming the registered proprietors as joint tenants.
Mr C said in cross-examination that he had a verbal agreement with the husband that he would purchase the property, the husband would stay in one of the flats and renovate the units, look after animals on the property, and live there rent free. He would not pay the husband for what he does, he will pay the outgoings on the property except for utilities, which the husband will pay if he can afford to, otherwise he will pay them.
Mr C said he will assist the husband to transport his four shipping containers with his possessions in them to the property when the purchase has settled.
What became of the proceeds of sale of [D]?
After the sale of the [D] property, the husband moved to live in a “shed” on the farm of a friend at [N]. He bought four shipping containers to keep his personal property in after the [D] property was sold. The containers cost him $17,000, including their transport to his friend’s farm. He did not say where this money came from or when he paid it in his evidence in chief.
The husband said that after the sale of the [D] property, he wished to purchase a property in the country. He said he looked at properties at [F] for $90,000, at [N] for $120,000 and at [F] for $120,000. He said the first mentioned [F] property was too far out of town.
He said several unidentified people told him he could get a better deal if he paid cash.
He found a business selling two bedroom mobile homes for $80,000. He said it would cost him $5,000 to transport the mobile home to [F].
On 1 March 2011, a few days after the husband had been served with the wife's property settlement application, the husband deposited a cheque for the net proceeds of sale in the sum of $200,000 into his bank account.
The husband said he saw a solicitor in March 2011 to buy the second mentioned [F] property. This was after the husband had been served with the wife's property settlement application. The solicitor told him he could not build on it so he started looking for another property.
The husband withdrew the proceeds of sale of the [D] property in cash in a series of withdrawals as follows-
a)14 March 2011, $15,000;
b)15 March 2011, $15,000;
c)17 March 2011, $30,000;
d)18 March 2011, $15,000;
e)21 March 2011, $15,000;
f)23 March 2011, $35,000;
g)25 March 2011, $35,000;
h)28 March 2011, $40,000.
Thus, by 28 March 2011, he had withdrawn the whole $200,000 proceeds of sale in cash. He conceded in cross-examination that before he began withdrawing the money, he knew the wife had begun court proceedings for a share of it, and he described the content of the wife's court documents as “bullshit”. He at first denied, then admitted, that by 14 March 2011, he knew the wife was wanting a sum of money from him in these court proceedings.
Statements issued by the husband's bank have caused significant difficulty and unnecessary controversy in these proceedings, as they misdescribed a number of the cash withdrawals, and in fact suggested that instead of being cash withdrawals, several of these debits were in fact transfers of funds to term deposits, suggesting the husband retained those funds with the bank. This is not what occurred. There is now no issue that in each of the above transactions, the husband made cash withdrawals.
The wife filed an application in a case seeking an injunction to restrain the husband dealing with the net proceeds of sale of the [D] property on 15 March 2011. It was first listed before the court on the same day as the wife's initiating application, 1 April 2011. The wife's application for an earlier listing was unsuccessful. The wife said that the application in a case was served on the husband on 16 March 2011.
The husband said he put the cash he withdrew from the bank in a bag behind the driver’s seat of his utility parked at his friend’s farm at [N]. His driver’s licence had been withdrawn on medical grounds. Each time he withdrew part of the proceeds of sale, the friend on whose farm he was staying drove him to the bank.
The husband said that on the evening after he withdrew the last of the sale proceeds from the bank, which must have been the evening of
28 March 2011, he had a bad headache and decided to drive to the chemist to get some paracetamol, even though he was unlicensed. He said the chemist was closed, and so he began to drive back to his accommodation. He said on the way he felt dizzy and pulled to the side of the road. He said he lay down across the two seats of his utility and opened the passenger door a few inches to allow his feet to protrude. He said he fell asleep and awoke two hours later.
The husband said when he awoke, both the driver’s and passenger’s doors of the utility were open. He then drove home. He said he did not wake his friend as it was late, and he went to bed. He said the next morning he went out to the car and found that the cash was gone. He said he did not know what happened to it, and believed it was stolen.
The husband said he did not report the apparent theft of $200,000 to the police because he could not see any point of doing so. He said he did not want to tell them he was driving illegally and could not tell them anything more than the money was gone.
Understandably, the husband was cross-examined at length about what happened to the money he withdrew. Much of his evidence was confused and confusing. He clearly had difficulty understanding some questions, and he was confused about dates. However, while making what I am satisfied are appropriate allowances for the husband's hearing difficulties, his inability to read and general lack of education, and his difficulty understanding English, there remain a number of inconsistencies in his evidence that the money was stolen-
a)In cross-examination, he said when he lay down on feeling too unwell to continue driving home after finding the chemist closed, he lay across both front seats with his head on the left hand side and his legs on the steering wheel side, and that the car doors were closed although the driver’s door was unlocked. In his evidence in chief, he said he left the passenger door ajar so his feet could protrude, suggesting his feet were not on the driver’s side.
b)In cross-examination, he said when he awoke, both doors of the utility were open and the back of the driver’s seat was tilted forward. In his evidence in chief he said when he awoke both car doors were open, but did not mention that the back of the driver’s seat was tilted forward. In my view, that is a significant omission because this was the seat behind which he said he had the cash.
c)In cross-examination, the husband admitted having two safes, in which he kept cash he had during cohabitation, and said that he kept the cash from the proceeds of sale withdrawn from the bank is one of his safes and then placed it behind the driver’s seat of his utility when he decided to buy a farm in [F]. In his evidence in chief he made no mention of having the money in a safe at any stage and said he only kept the cash behind the driver’s seat of his utility.
d)The husband’s lack of concern about $200,000 in cash behind the driver’s seat of his car when he awoke to find clear evidence that someone had interfered with the car while he was asleep, whether that be indicated only by the car doors now being open or by the back of the driver’s seat being tilted forward as well, is unexplained and totally inconsistent with the money being in the car. His consistent evidence was that despite the clear indications the vehicle had been interfered with while he was asleep, he did not check on the money immediately, but waited until either the following morning or the afternoon two days later before doing so. He gave no reason why he did not immediately check on the money on finding the car doors open. In my view, his lack of concern for the money, his only significant asset, and money he needed to acquire accommodation, he having been asked to leave by the person on whose property he was then living, is completely inconsistent with the allegation the money was in the vehicle.
e)The husband said in cross-examination that on arriving at his accommodation on the night he said the money was stolen, he locked the utility and went to bed, and that he did not go to the utility again until the afternoon two days later, when he discovered the money gone. In his evidence in chief, he said he discovered the money gone the morning after his unsuccessful trip in search of paracetamol.
f)In cross-examination the husband said he did not report the loss of the money to the police because he was sick and did not know their phone number. This is not the reason he gave in his evidence in chief.
It was submitted on behalf of the wife that I should not accept the husband's evidence that the money was stolen, and that if it was not stolen, the husband still had it, as there was no other evidence to suggest he did not.
It was submitted on behalf of the husband that I should accept his evidence, and that the court should not find the husband was being untruthful in his oath. It was submitted that before finding the husband still had the money, the court needed to be comfortably satisfied on the balance of probabilities that the husband was deliberately being untruthful on his oath about the theft of the money, a serious finding to which s.140 of the Evidence Act was particularly relevant.
Having considered the matters relevant to the assessment of the husband's evidence referred to at the beginning of this judgment, and bearing in mind the seriousness of a finding that the husband was untruthful on his oath in asserting the proceeds of sale had been stolen, I do not accept the husband's evidence that the proceeds of sale of the [D] property were stolen. Apart from the various inconsistencies in his evidence highlighted above, the most obvious contradiction of any suggestion the money was stolen while he slept in the car in my view was his nonchalance and total lack of concern about his life’s savings on awaking to find the doors of his car open, and the back of the seat behind which he said he stowed the money tilted forward.
If the money had been there and he had woken to find the car obviously interfered with, he would have immediately checked to see whether the money was still there. This was a very significant amount of money. It was effectively all he had. He needed it to find himself accommodation in which to live in his retirement, having worn out his welcome with the friend on whose property he was staying. He offered no explanation why he did not check immediately whether the money was still there.
I am also concerned about the husband's credit as a result of his falsely asserting a document he knew was not in the wife's handwriting was written out by her and given to him.
There being no other basis on which the husband suggested he no longer had the money, I am satisfied he retains the proceeds of sale of the [D] property in his possession or under his control. The evidence does not enable me to find where, by whom or in what form that money is held, these being matters peculiarly within the husband's knowledge, and the husband, I am satisfied, having failed to truthfully provide that information.
The applicable law
Property settlement proceedings fall to be determined by reference to s.79. The court may make such order as it thinks appropriate (s.79(1)), but must not make an order unless satisfied it is just and equitable to do so (s.79(2)). In deciding whether to make an order, and if so what order, the court must have regard to those of the considerations in s.79(4), including s.75(2), the provisions of which are incorporated into s.79(4) by reference, as may be relevant in a particular case.
In Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355, the Full Court explained the preferred approach in determining property settlement proceedings under s.79, as follows (FamCA at [39]; FLC at 78,386; Fam LR at 370):
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”
Where the pool of divisible assets and resources includes a superannuation interest, the Full Court in AJO v GRO [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220, considered the approach that should be taken. The majority said (
58. Thus, we consider that because of the obligation under s 79(2) to make a just and equitable order, then in order to ensure such a result the Court should wherever there is a superannuation interest apply the provisions of s 79(4)(a) to (g) (which will include the matters contained in s 75(2)) to that superannuation interest whether or not a splitting order is sought.
…
61. Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.”
I note that the parties agreed in this matter to include the wife's modest superannuation interest in a single pool of divisible assets, resources and liabilities.
The pool of divisible assets, liabilities and resources
The major controversy in this case was whether the husband retained the proceeds of sale of the [D] property, or whether they had been stolen from him. I have found that the proceeds of sale were not stolen and that the husband retains control of those funds.
The only other issue concerning the parties’ property related to the value of the husband's motor vehicles. It was the wife's case that his two motor vehicles were worth a total of $9,500. It was agreed that one of them was worth $5,000. It was submitted on behalf of the wife that as the husband in cross-examination said that he had two vehicles, one working and one not, and that one of them was worth $4,000 or $5,000, that the court should average this range and ascribe the value of $4,500 to the vehicle other than the one the value of which was agreed.
On behalf of the husband it was submitted that the value the husband gave related to the vehicle the value of which was agreed.
The husband's evidence in cross-examination was that he had two 1991 Toyota Landcruiser’s. One was a four wheel drive and did not work. The other was a utility, it was in good condition, and it was worth $4,000 or $5,000. He was not asked what he thought the other vehicle was worth.
I am not satisfied that two vehicles should be included in the pool of divisible assets at the amounts contended for on behalf of the wife. Considering the husband's evidence that the four wheel drive does not work, and in the absence of any evidence as to its worth, I am not satisfied it should be included as a separate item of property.
Otherwise, the assets, resources and liabilities were agreed. It was the wife's position that the husband's interest in the property he recently acquired jointly with Mr C should not be included in the pool of divisible assets, and that there should be added back into the pool as notional assets she had, $15,000 for the net proceeds of sale of the [R] property and $1,500 proceeds of sale of a motor vehicle.
I therefore find that the pool of divisible assets, resources and liabilities is as follows-
Item Description Title Amount 1 Proceeds of sale Husband $200,000.00 2 Trailer Husband $300.00 3 Toyota Landcruiser utility Husband $5,000.00 4 Bed and sofa set Husband $100.00 5 4 shipping containers Husband $11,200.00 6 Cash at bank Husband $6,828.00 7 Furniture Wife $500.00 8 Proceeds of sale of motor vehicle Wife $1,500.00 9 Proceeds of sale of [R] property Wife $15,000.00 10 Wife's [omitted] superannuation Wife $3,925.23 11 Westpac Visa debt Wife -$6,747.60 12 GE Credit line Wife -$10,548.00 13 CBA Mastercard debt Wife -$9,287.36 14 ANZ Mastercard debt Wife -$7,715.00 15 CBA loan Wife -$399.00 16 Personal loan - Mr H Wife -$9,000.00 17 Personal loan - Ms J Wife -$10,000.00 18 Debt Cutter Wife -$800.00 Total $189,856.27
Of the above pool, the husband has net assets of $223,428, while the wife's debts exceed her property and resources, including her superannuation, by $33,571.73, a disparity in the parties’ financial positions of $256,999.73.
The assessment of contributions
It was the wife's case that contributions should be assessed as 60/40 favouring the husband. It was the husband's case that the contributions favoured the husband in the range 55/45 to 60/40.
In the result, the wife conceded contributions should be assessed at the top of the range submitted in the husband's case, and I therefore proceed on the basis that there is no controversy between the parties that contributions be assessed at 60/40 favouring the husband, an assessment I am satisfied is appropriate having regard to the evidence.
The assessment of non-contributions considerations
It was the wife's case that there should be an adjustment to the parties’ contribution based entitlements in her favour of 10%. As I understand the submissions on behalf of the wife, this was in large measure because the husband had acquired a half interest with Mr C in a property on which the husband would live.
It was also put on behalf of the wife that the husband would derive income from this property from renting out the flats after he renovated them, and from running some livestock on the property. However, both the husband and Mr C gave evidence that this income would accrue to Mr C alone, and neither was challenged in cross-examination about this. Nor was I asked to find that the evidence of the husband and
Mr C that the husband did not contribute any money towards the purchase of this property should not be accepted, and in fact such a position would have been inconsistent with the submission, which I accepted, that the husband retained the proceeds of sale of the [D] property despite this purchase.
I am satisfied that the arrangement between the husband and Mr C affords the husband accommodation for which he will have to pay very little and perhaps nothing at all. He will however provide his labour, in renovating the accommodation, and then managing the rentals and livestock on the property. To that extent, despite his age, he will derive some benefit from her personal exertion.
It was the husband's case that an adjustment of 10% should be made in his favour to the parties’ contribution based entitlements. This was said to arise because the husband lacked an ongoing earning capacity because of his age. It was put that the wife had accommodation available to her, and had a continuing earning capacity.
I accept that the wife has an earning capacity while the husband at his age would not be expected to return to the workforce. However, as mentioned, the husband will in effect be working in recompense for
Mr C’s generosity in providing the whole of the purchase price of the property he jointly purchased with the husband. The husband has some security in his accommodation, being a co-owner of the property. The husband said obtaining security in his accommodation was why he wanted to be on the title. On the other hand, the wife has no security of tenure where she lives, with her daughter Ms J. And she has the ongoing obligation to support [X]. While not the husband's child, this is nonetheless a child the wife has a duty to maintain, and is clearly relevant under s.75(2)(d). Further, as I accept the wife's evidence that the husband encouraged the wife not to abort this child and promised to treat her as his own, and I am satisfied that is also relevant under s.75(2)(o).
In the circumstances, I am not satisfied any adjustment should be made to the parties’ contribution based entitlements. In my view, the husband's age, 73, and the fact he is well past retirement age, which weigh in his favour as the wife is only 47 and able to work for a number of years, is balanced by the fact the husband has secure accommodation without having to use any of his share of the property pool, while the wife will need to use her share of the property pool and/or her income to obtain secure accommodation and has the ongoing responsibility to maintain [X], who is eleven.
A just and equitable order
In the result, I am satisfied the property pool should be divided 60/40 favouring the husband. It was common ground that if I found a sum was payable to the wife to achieve a proper distribution of the parties’ property, the court should order the payment of the necessary sum of money within a specified time, with no order as to what should occur if there was a default in the payment.
To achieve a 40% distribution to the wife, she must receive $75,942.51 of the total pool of $189,856.27. But as the wife’s debts currently exceed her property and resources by $33,571.33, she must receive a total of $109,514.24 to effect a 60/40 division of the property pool. However, the sum the wife actually sought is $100,000, and in the circumstances, that is the sum I am satisfied it is just and equitable the husband should pay her.
I certify that the preceding one hundred and twenty-four (124) paragraphs are a true copy of the reasons for judgment of Halligan FM
Date: 6 August 2012
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