Commissioner of State Revenue v Bulzomi (2009) 24 VR 643; Kowaliw & Kowaliw (1981) FLC 91-092; New South Wales Police Force v Winter [2011] NSWCA 330; (2011) 10 DDCR 69; Palis Victoria Pty Ltd & Ors v Gelare International Pty Ltd & Ors (2015) 302 FLR 127;
[2021] FCCA 573
•24 March 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| EWBANKS & DALRYMPLE | [2021] FCCA 573 |
| Catchwords: FAMILY LAW – Property settlement – de facto relationship – wife owning property at commencement of relationship – substantial disputes about amounts received from the wife’s parents and the amounts she paid them – neither party a credible witness. |
| Legislation: Interpretation of Legislation Act 1984 (Vic), s.14 Family Law Act 1975, ss.79, 90RD, 90RG, 90SB, 90SF and 90SM Property Law Act 1958 (Vic.), s.53(1)(b) Stamps Act 1958 (Vic), ss.8, 9(1), 10 and 30 |
| Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] ALR 334; (1938) 12 ALJR 100; [1938] HCA 34 Browne v Dunn (1893) 6 R 67 Commissioner of State Revenue v Bulzomi (2009) 24 VR 643 Other materials: Western Australian Mental Health Commission, Impact of FIFO work arrangements on the mental health and wellbeing of FIFO workers (Report, September 2018) |
| Applicant: | MS EWBANKS |
| Respondent: | MR DALRYMPLE |
| File Number: | MLC 3687 of 2018 |
| Judgment of: | Judge Riley |
| Hearing dates: | 30 November and 1 and 2 December 2020 |
| Date of last submission: | 16 December 2020 |
| Delivered at: | Melbourne |
| Delivered on: | 24 March 2021 |
REPRESENTATION
| Counsel for the applicant: | Mr Sweeney |
| Solicitors for the applicant: | Marshalls & Dent & Wilmoth |
| Counsel for the respondent: | Ms Teicher |
| Solicitors for the respondent: | Mirabellas Solicitors |
DECLARATION:
The parties were in a de facto relationship from 2005 until February 2017.
ORDERS
On or before 7 April 2021, the wife pay to the husband $4,170 as her half share of the outstanding balance of the loan for the Motor Vehicle 1.
On or before 24 May 2021 (“the date”), the wife pay to the husband the further sum of $233,269.50 (“the payment”).
In the event that the whole of the payment has not been made by the date, C Street, Suburb D (“the property”) be forthwith sold altogether out of court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to discharge the mortgage and any other encumbrance affecting the property;
(c)thirdly, 30% of the balance then remaining to the husband; and
(d)fourthly, 70% of the balance then remaining to the wife.
Pending the payment or the completion of the sale:
(a)the wife have the sole right to occupy the property and during such right of occupation the wife pay all instalments pursuant to the mortgage and all rates and taxes and like outgoings in relation to the property as they fall due;
(b)the parties hold their respective interests in the property upon trust pursuant to these orders; and
(c)the wife be restrained from further encumbering the property without the consent in writing of the husband.
Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses in action) and superannuation entitlements in the possession of such party as at the date of these orders;
(b)monies standing to the credit of the parties in any bank account be the sole property of the party in whose name the account is;
(c)insurance policies be the sole property of the owner named thereon;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
NOTATIONS
(A)Section 121 of the Family Law Act 1975 provides that it is an offence punishable by imprisonment for up to one year to publish or disseminate to the public any account of family law proceedings which identifies the parties, witnesses or other people concerned with the proceedings, unless specifically authorised by the court.
IT IS NOTED that publication of this judgment under the pseudonym Ewbanks & Dalrymple is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 3687 of 2018
| MS EWBANKS |
Applicant
And
| MR DALRYMPLE |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for property adjustment under s.90SM of the Family Law Act 1975 (“the Act”).
In brief summary, the parties were in a de facto relationship for 11 years and had two children together. The wife owned a house, subject to a mortgage, at the commencement of the relationship. That house became the family home and the wife and children continue to live in it post-separation. The parties bought another property to renovate and sell during the relationship. The wife claimed to have borrowed substantial sums from her parents to assist with the purchase of, and mortgage repayments on, both properties and the renovation of the investment property. Amongst the many issues in dispute was how much money was borrowed from, and how much was paid to, the wife’s parents.
It was common ground that the wife largely controlled the parties’ finances. The husband claimed that he was kept in the dark about many of the wife’s financial dealings. He conceded that the wife did not waste money on frivolous purchases, but claimed that the wife had not been honest with him or the court in relation to the amounts she had borrowed from and paid to her parents.
The parties agreed at the commencement of the trial that the main asset, being the house registered in the wife’s name, was worth $1,005,000, and was subject to a mortgage of $227,435. The wife claimed that she held 10% of the value of the house, being $100,500, on trust for her parents. The wife claimed further that she and/or the husband owed her parents about $566,000. On the wife’s figures, the amount available for distribution was about $100,000.
Included in the approximately $566,000 that the wife claimed was owed to her parents was $220,000 in legal fees. As is well-established, the court does not take into account a party’s own legal fees in property proceedings. The fact that money may have been borrowed to pay legal fees does not detract from that basic principle.
Fortunately, in the present proceeding, there were no allegations of drug or alcohol abuse, or physical family violence. However, the husband alleged that he left the relationship because the wife was continuously verbally abusive to him. Be that as it may, it was not alleged that the alleged verbal abuse had any bearing on the property division in this case.
The husband said that he was depressed for a few months after his mother died, but otherwise there were no mental health issues in this case.
For the reasons discussed below, I have found both parties to be seriously and blatantly dishonest. Neither of them was a credible witness.
The wife proposed that each party keep the assets in their own names. Alternatively, she proposed an 80:20 split in her favour, which she claimed would be less advantageous for her than each party keeping their own assets. The husband proposed a 60:40 split in the wife’s favour of the equity in the former family home.
Like many property disputes this court is called upon to determine, the parties provided to the court a large mass of documents in a poorly organised fashion. The parties provided over 10,000 pages of documents to the court, the vast majority of which were not referred to by either party during the hearing and were not tendered.
The husband’s case, in particular, was disorganised. For example, in his material filed shortly before the hearing, he alleged that the wife owned three additional properties. However, his counsel disavowed that allegation when the court asked about it on the first morning of the trial.
By way of further example, the husband emailed his amended case outline to chambers, and presumably the wife, on the third day of the trial. He did not file it until six days after that. Obviously, it is helpful to have a finalised case outline before the trial commences, because it gives everyone a clear understanding of the matters that are agreed and the matters that are in dispute, and it thereby provides a framework for settlement discussions and for the trial.
One additional example is that, contrary to the requirements of the court, the respondent husband did not identify the documents that he wanted in the court book prior to hearing, so the court book did not contain his trial material. When given the opportunity to file a supplementary court book containing his trial material after the trial began, the husband still did not do so, even though he was represented by an experienced family law solicitor. Ultimately, my associate was obliged to prepare the supplementary court book on the husband’s behalf.
Mr Dalrymple
Pursuant to trial directions, the parties filed a joint chronology on 27 November 2020. It was meant to clearly set out which events were agreed, and which were disputed. The wife, as the applicant, prepared the document. Unfortunately, the wife did not set out one allegation at a time, which the husband could indicate that he agreed with or not. Instead, the wife set out the chronology in sections, many of which contained multiple allegations. The husband said that he disagreed with most of the sections. In reality, he probably agreed with many of the individual allegations in many of the sections, and only disagreed with one or two allegations in each section. However, he said that he disagreed with numerous sections in their entirety. As such, the chronology did not fulfil its purpose. Both parties were responsible for this.
For what it is worth, the chronology (exhibit 2) is substantially as set out below. It is noted in the chronology which allegations the husband disagreed with. In the relatively few cases where the chronology is silent on that question, the husband agreed with the allegation.
Date
Event
1965
The husband was born (now 54)
1970
The wife was born (now 50)
1998
The wife purchased C Street, Suburb D ("the C Street, Suburb D property") for the sum of $170,000. At the time of purchase, the C Street, Suburb D property was secured by way of mortgage to the Westpac Bank.
[In the joint chronology, the husband said he disputed this. However, in his outline of case, he accepted that the wife bought the C Street, Suburb D property in 1998.]
1999
The wife formalised a loan agreement with her parents in relation to the C Street, Suburb D property. The amount loaned to the wife was $57,000.
Pursuant to the loan agreement, the wife's parents hold a 10% beneficial interest in the C Street, Suburb D property and a further $40,000 bank loan is to be repaid. At 27 November 2020, the 10% beneficial interest was $91,000 and the outstanding bank loan was $40,000, totalling $130,000.
The husband disagreed.
2005
The parties commenced cohabitation. The husband had no assets of significance and had a child support debt from a previous relationship.
March 2006
The parties purchased E Street, Suburb F ("the E Street, Suburb F property") for $390,000. The property was registered in joint names. A 10% deposit was funded from the equity in the C Street, Suburb D property. The balance was funded by way of mortgage. On 29 March 2006, the wife refinanced the mortgage secured over the C Street, Suburb D property from $276,901 to $316,901 to fund the deposit for E Street, Suburb F. On 17 April 2006, the E Street, Suburb F mortgage was $410,500.
[In the joint chronology, the husband said he disputed this. However, in his outline of case, he accepted that the E Street, Suburb F property was bought in March 2009 for $390,000 as an investment property and registered in joint names.]
April 2006
The E Street, Suburb F property was in poor condition and the parties renovated the property. The wife's father undertook the majority of planning and execution of the renovations. The wife's father spent approximately 20 to 30 hours per week for 16 to 18 months on site unpaid.
The husband disputed this.
2007
X ("X") was born.
14 September 2007
The parties entered into a formal loan agreement with the wife's parents, as they were unable to meet the E Street, Suburb F mortgage repayments, the renovation costs, the C Street, Suburb D mortgage repayments and their day to day living costs. The loan agreement provided inter alia that at the date of entering into the agreement, payments of $8,000 had already been made, $3,000 per month would be deposited into the parties' joint loan account and extra payments would be made from time to time for building works etc.
The husband disputed this.
2008
The wife's brother, Mr G, lent the parties $5,000.
The husband disputed this.
19 August 2008
The wife’s brother lent the parties a further $5,000.
The husband disputed this.
13 October 2008
The wife’s brother lent the parties a further $10,000 by way of two $5,000 bank transfers.
The husband disputed this.
April 2009
The parties were forced to sell the E Street, Suburb F property due to their impecunious situation. The E Street, Suburb F property was sold for $615,000. After discharging the mortgage, renovation costs and repayment of loans, a nominal profit was made that was directly attributed to the parties' joint bank account.
[In the joint chronology, the husband said he disputed this. However, in his outline of case, he accepted that the E Street, Suburb F property was sold for $615,000 in April 2009.]
[The husband said further in his outline of case that, from April 2009 and following, he constructed fences and did paving and landscaping at the C Street, Suburb D property.]
On 13 May 2009, the wife's parents were paid $70,000 which was only a part payment of the amount that they had advanced to the parties. The $70,000 repaid was approximately $21,451 less than the amount/expenses actually paid by the wife's parents and that are repayable pursuant to the loan agreement. Thus $21,451 still remained outstanding as at 27 November 2020.
The husband disputed this.
The husband acknowledged in Federal Circuit Court proceedings against his former partner, Ms H, that after payment of the outstanding loans, there will be a nominal net profit retained by the parties.
The husband neither agreed nor disagreed with this.
28 January 2010 to 18 February 2013
The wife's parents lent the parties approximately $69,395 during this period. The funds were applied to the parties' day to day living expenses that they could not meet etc. The funds were advanced from the wife's parent's bank account and deposited into the parties' joint Westpac account. The funds have never been repaid.
The husband disputed this.
2010
Y ("Y") was born.
9 April 2010
The wife's parents lent the husband $5,000 to start a business. The wife's parents set up a Westpac account in their joint names and provided the parties with access to purchase materials. The $5,000 has never been repaid.
The husband disputed this.
8 September 2010 to 19 December 2016
The wife's parents lent the parties approximately $68,125 during this period. These funds were advanced from the wife's parents' account to the home loan account secured over the C Street, Suburb D property.
These funds have never been repaid.
The husband disputed this.
2013
The parties paid rent for the husband's daughter from a previous relationship ("Ms J") for a year, at a cost of approximately $16,800. The parties bought Ms J a motor vehicle, including the payment of her registration and insurance costs, at a cost of approximately $4,143. Those sums totalled approximately $20,943, which the parties paid from their joint funds for the benefit of Ms J during this period.
The husband disputed this.
28 May 2014
Child support proceedings were brought against the husband by his former partner, Ms H.
The husband agreed with this.
Orders were made including:
1. The husband pay $30,598.94 to his former partner; and
2. The husband pay his former partner's legal fees fixed at $4,985.
The husband disputed this.
The parties paid these amounts from their joint funds, as well as their own legal fees of approximately $4,700. The various amounts totalled about $40,253.94.
The husband disputed this.
2016
The husband's mother passed away.
The husband, his nine siblings and his two deceased siblings' children are the beneficiaries of the Dalrymple Trust. The trust holds 82 hectares of fee simple costal land in the Region K of Country L. The husband has not disclosed an inventory of assets and liabilities to date.
The land can be sold in fee simple and the husband can sell his interest.
The land is no longer Region K land nor has any trust been established.
The husband's interest has been valued at AUD$53,719.
[In the joint chronology, the husband said he disputed this. In his outline of case, he added that he began suffering from depression at this time and was unable to work full-time between February 2016 and April 2016. He said he recommenced working intermittently as a tradesman in April 2016.]
16 February 2016
The Westpac Bank sent Ms Ewbanks a notice to vacate the C Street, Suburb D property due to being in arrears of the home loan.
The husband accepted this.
The parties were constantly in arrears of home loan repayments during the relationship and incurred regular dishonour fees as a result for late payments.
The husband disputed this.
29 June 2016
The husband owed $4,710 to the Sheriff's department. The wife's parents lent the parties $4,710 following the Sherriff's attendance at the C Street, Suburb D property.
The husband disputed this.
11 or 14 February 2017
The parties separated. The husband moved out of the C Street, Suburb D property. The husband received the total sum of $19,000 from the wife.
[In the joint chronology, the husband said he disputed this. In his outline of case, he said that separation occurred on 3 January 2017.]
$10,000 was transferred to the husband. The husband acknowledged this in an agreement executed by him on 11 February 2017.
The husband disputed this.
On 29 March 2017, $8,000 was transferred to the husband for the payment of a Motor Vehicle 1 and $1,000 cash.
The husband disputed this.
The wife's parents advanced her:
1. $10,000 on 14 February 2017; and
2. $10,000 on 28 March 2017
so that the wife was able to pay the husband $19,000. The wife has not repaid these funds to her parents.
The husband disputed this.
May 2017
The wife's Motor Vehicle 1 was written off following a no-fault accident. Despite the wife paying the husband $9,000 to retain the vehicle, the husband solely retained the insurance payout of $16,945. The wife and the children were left without a vehicle.
The husband disputed this.
Late 2017/early 2018
The husband formed a relationship with his current de-facto partner, Ms M ("Ms M"). The husband continues to reside with Ms M.
[The husband disputes this and asserts that he and Ms M do not live together and have never lived together save for a period when Ms M's father's house suffered flood damage.]
May/June 2017
The wife's parents lent her $15,000 to purchase a Motor Vehicle 1. These funds were lent as the wife was left without a vehicle following the husband retaining the insurance payout.
The husband disputed this.
19 March 2018 to the current date
The husband deposited approximately $128,064 into Ms M's bank account.
The husband has not contributed to the mortgage repayments secured over the C Street, Suburb D property or to the children's expenses and is in arrears of child support since separation. The husband has not provided full and frank disclosure.
The husband disputed this.
6 April 2018
The wife filed an initiating application in the Family Court of Australia at Melbourne seeking final property orders.
25 June 2018
The parties unsuccessfully attended a case assessment conference.
27 June 2018
The husband filed a response to initiating application seeking final orders.
4 September 2018
The parties unsuccessfully attended a conciliation conference. The matter was transferred to the Federal Circuit Court.
Around October 2018
The husband lodged caveats over properties located in Suburb N and Suburb O. This is despite previous correspondence advising that the wife had no interest in the properties and that the husband had incorrectly stated the wife's brother's name as the owner.
The husband continued to assert that the wife owned four properties. It was determined that neither the wife nor her brother had any interest in the properties. The true registered owners were left with no option but to engage solicitors to have the caveats removed. The wife was forced to attend an application in a case hearing and her costs were reserved to the final hearing.
26 October 2018
The wife filed an amended response and affidavit.
30 October 2018
The final hearing date was listed for 3 April 2019.
17 November 2018
The wife entered into a formal loan agreement with her parents. The outstanding amount is approximately $220,000.
The husband disputed this.
13 February 2019
The husband filed an affidavit in reply.
March 2019
The Country L property was valued at $680,000.
18 March 2019
The husband filed five subpoenas to various banking institutions, seeking approximately nine years of bank statements.
21 March 2019
The husband filed a further subpoena, again seeking financial documents, being approximately nine years of bank statements.
25 March 2019
The wife filed an amended response and affidavit.
26 March 2019
The husband filed an affidavit.
27 March 2019
The husband filed an affidavit, trial affidavit and financial statement. The husband sought parenting orders in addition to property orders.
1 April 2019
The wife applied for an intervention order against the husband, following continued harassment via text messages and the husband attending the C Street, Suburb D property when asked not to.
The husband disputed this.
3 April 2019
The final hearing date was adjourned.
15 May 2019
A final intervention orders was made against the husband for a period of two years. The wife was listed as the affected family member.
4 June 2019
The husband filed an application in a case seeking interim parenting orders. The application also sought information relating to the Suburb N and Suburb O properties in which the wife had no interest.
The husband agreed with this.
The application was heard on 17 June 2019 and was dismissed by the court. Costs were fixed at $4,000 and reserved to trial. Leave was granted for the husband to file a further six subpoenas.
The husband disputed this.
June to August 2019
The husband filed a further eight subpoenas in this period. This was an additional two subpoenas over the number permitted to be filed pursuant to the orders dated 17 June 2019.
18 July 2019
The husband and Ms M attended a section 11F report together. Ms M was interviewed in the group family session with her daughter from a previous relationship. The husband and Ms M confirmed to the report writer that they were living together.
The husband disputed this.
4 September and 17 September 2019
The parties participated in a private mediation. Interim parenting orders were entered into on this day and were made by the court on 17 September 2019.
The husband provided consent and executed the documentation for the children to obtain passports and to travel internationally with the wife and her parents. The wife lodged the application with the Department of Foreign Affairs and Trade.
The husband disputed this.
3 October 2019
The husband contacted the Department of Foreign Affairs and Trade and withdrew his consent to the children being issued passports. This was one day after the husband's application to have the intervention order withdrawn was dismissed by the court.
The husband disputed this.
25 October 2019
The wife filed an application in a case seeking to obtain passports for the children and permission for their international travel.
8 November 2019
The wife's application in a case was listed. The wife was successful in her application and costs were reserved.
13 February 2020
Final parenting orders were made which inter alia provided for the following:
1. The children live with their mother; and
2. The children spend time with their father:
a) each alternate weekend from 7:30pm Friday until 5:00pm Sunday;
b) special days; and
c) half school holidays.
The matter was listed for final hearing commencing 30 November 2020.
22 May 2020
The parties attended a conciliation conference. Property matters did not resolve on that day.
20 August 2020
The wife filed a subpoena to the ANZ Bank seeking financial documentation of the husband's de facto partner, Ms M.
The husband disputed this.
2 September 2020
Ms M filed a notice of objection to the subpoena to the ANZ Bank. The matter was listed for hearing on 18 September 2020.
18 September 2020
The objection to the subpoena was dismissed and costs were reserved.
15 October 2020
The husband was in arrears of child support in the sum of $7,862.49. The husband's taxation return was intercepted and an amount of $4,655.61 was applied to reduce the outstanding debt.
The husband disputed this.
18 October 2020
The mortgage secured over the C Street, Suburb D property was $227,605. At the time of separation, the loan was $247,023. The wife has solely met these repayments herself since separation. The wife paid $66,130 towards these repayments, consisting of approximately $40,876 interest.
The husband disputed this.
19 October 2020
The wife obtained an updated valuation report for the C Street, Suburb D property valuing the property at $910,000.
The husband disputed this.
23 October 2020
The husband attempted to file a further four subpoenas to various banking institutions seeking documentation in relation to the wife's parents. This was despite the husband not having obtained leave of the court to file further subpoenas.
27 October 2020
The husband filed a further five subpoenas, again without leave of the court.
November 2020
The wife solely paid for expenses for the children totalling approximately $45,411.80. These expenses were registered on the parties' Our Family Wizard application. To date, the husband has not contributed to these expenses. The wife's parents have paid for X's private school fees of $11,790 per year.
The husband disputed this.
1 November 2020
The wife was loaned approximately $220,000 from her parents to pay her legal fees, which have continually increased due to the husband's non-compliance with orders, filing of multiple unsuccessful applications in a case and filing excessive subpoenas.
The husband disputed this.
5 November 2020
The wife filed a notice of objection to all five subpoenas filed by the husband on 27 October 2020 which sought production of her parents' financial documentation.
6 November 2020
The husband filed a further subpoena, again without leave of the court. The subpoena sought further financial documentation of the wife's parents. The husband has now filed 20 subpoenas.
The husband disputed this.
10 November 2020
The wife filed a notice of objection to the subpoena filed by the husband on 6 November 2020, which sought production of her parent's financial documentation.
13 November 2020
At the subpoena objection hearing, the wife's parents had not been served with a copy of the subpoenas directed to them and the matter was adjourned to 23 November 2020.
23 November 2020
At the subpoena objection hearing, the objections were dismissed.
30 November 2020
The final hearing commenced. The matter was listed for two days.
Material relied upon
In her outline of case filed on 26 November 2020, the wife said she relied upon:
a)the affidavit affirmed by a valuer, Mr P, 19 November 2020;
b)her affidavit sworn on 17 November 2020;
c)her affidavit sworn on 12 November 2020;
d)her amended initiating application filed on 2 November 2020;
e)her financial statement filed on 2 November 2020;
f)her affidavit sworn on 2 November 2020;
g)the affidavit sworn by her father, Mr Q, on 2 November 2020;
h)the wife's application in a case filed on 25 October 2019;
i)her affidavit sworn or affirmed on 25 October 2019;
j)her unsworn affidavit filed on 16 September 2020;
k)her affidavit sworn on 15 July 2019;
l)her affidavit sworn or affirmed on 13 June 2019;
m)the affidavit sworn or affirmed by a valuer, Mr R, on 2 April 2019; and
n)the affidavit sworn or affirmed by a valuer, Mr P, on 26 March 2019.
In his amended case outline filed on 8 December 2020, the husband said he relied upon:
a)his response to final orders filed on 30 November 2020.
b)the wife's notice of objection to the subpoena issued to The Proper Officer, S Pty Ltd filed on 10 November 2020;
c)the husband's subpoena to The Proper Officer, S Pty Ltd filed on 6 November 2020;
d)the wife's notice of objection to the subpoena issued to The Proper Officer, S Pty Ltd filed on 5 November 2020;
e)the wife's notice of objection to the subpoena issued to The Proper Officer, Westpac Banking Corporation filed on 5 November 2020;
f)the wife's notice of objection to the subpoena issued to The Proper Officer, T Bank filed on 5 November 2020;
g)the wife's notice of objection to the subpoena issued to The Proper Officer, U Bank filed on 5 November 2020;
h)the wife's notice of objection to the subpoena issued to The Proper Officer, Super Fund V filed on 5 November 2020;
i)the husband's subpoena to The Proper Officer, S Pty Ltd filed on 27 October 2020;
j)his subpoena to The Proper Officer, U Bank filed on 27 October 2020;
k)his subpoena to The Proper Officer, T Bank filed on 27 October 2020;
l)his subpoena to The Proper Officer, Westpac Banking Corporation filed on 27 October 2020;
m)his subpoena to The Proper Officer, Super Fund V filed on 27 October 2020;
n)his financial statement filed on 23 November 2020;
o)his unsworn affidavit filed on 20 November 2020;
p)his affidavit affirmed on 19 November 2020;
q)the affidavit affirmed by his partner, Ms M, on 19 November 2020;
r)the affidavit affirmed by his friend, Mr W, on 16 November 2020;
s)the husband's affidavit sworn or affirmed on 13 November 2020;
t)the unsworn affidavit of his partner, Ms M, filed on 2 September 2020;
u)the husband's application in a case filed on 4 June 2019;
v)his affidavit affirmed on 28 May 2019;
w)his amended response to initiating application filed on 29 March 2019;
x)his application in a case filed on 29 March 2019;
y)his affidavit affirmed on 26 March 2019;
z)his affidavit sworn or affirmed on 12 February 2019
aa)his response to initiating application filed on 27 June 2018.
The witnesses who gave oral evidence were the parties, the wife’s father, Mr W and the husband’s partner. The valuers were not required for cross-examination.
Declaration of de facto relationship
Section 90RD of the Act permits the court to make a declaration that a de facto relationship existed between two persons. Under s.90RG of the Act, the court is only permitted to make such a declaration if it is satisfied that one or both of the persons were ordinarily resident in a participating jurisdiction when the primary proceedings commenced. There was no dispute about this issue. On the material before the court, I am satisfied that the applicant and the respondent were both ordinarily resident in a participating jurisdiction, namely, Victoria, when the primary proceedings commenced. I am satisfied that it is appropriate to make a declaration that the parties were in a de facto relationship from 2005 until February 2017.
Preliminary issues
Under s.90SB of the Act, the court may only make an order under s.90SM of the Act if the court is satisfied that:
a)the period or the total periods of the de facto relationship were at least two years; or
b)there is a child of the de facto relationship; or
c)the applicant made substantial contributions of the kind mentioned in s.90SM(4)(a), (b) or (c) and a failure to make an order under s.90SM would result in serious injustice to the applicant; or
d)the relationship is or was registered under a prescribed law of a State or Territory.
In the present case, it was common ground that the de facto relationship lasted for more than two years and there were children of the relationship.
The legislation
Section 90SM of the Act gives the court power to alter the interests of the parties to a de facto relationship in the property of those parties following the breakdown of their relationship. Sub-section 90SM(3) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 90SM(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
The matters to be taken into account under s.90SF(3) of the Act are as follows:
(a)the age and state of health of each of the parties to the de facto relationship …; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i)a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
The approach to property settlement applications
In Stanford v Stanford (2012) 247 CLR 108; (2012) 293 ALR 70; (2012) 87 ALJR 74; (2012) 47 Fam LR 481; (2012) FLC 93-518; [2012] HCA 52, the High Court explained the proper approach to an application under s.79 of the Act, which applies equally to applications under s.90SM of the Act, as follows:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. … The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. … (footnotes omitted)
39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered. (footnotes omitted)
40.Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act. (emphasis in original) (footnote omitted)
…
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4). (emphasis in original)
Stanford requires the following matters to be determined in applications brought under s.79, and 90SM, of the Act:
a)whether the parties have separated;
b)the assets and liabilities of each party;
c)the contributions of each party;
d)the future needs of each party;
e)bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and
f)what orders, if any, are just and equitable in all the circumstances of the case.
Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above.
The wife's proposal
The orders proposed by the wife in her amended initiating application filed on 2 November 2020 were as follows:
1.That there be an equalisation of the parties' superannuation entitlements.
2. That the Applicant pay, indemnify and keep the Respondent indemnified against all and any liabilities of and in relation to her personally, past present and future and howsoever arising including but not limited to:
(a) Any personal loan and credit card debt standing in the Applicant's name; and
(b) Mortgage secured against the property at C Street, Suburb D.
3. That the Respondent pay, indemnify and keep the Applicant indemnified against all and any liabilities of and in relation to him personally, past present and future and howsoever arising including but not limited to:
(a) Any personal loan and credit card debt standing in the Respondent's name;
(b) Any child support arrears in the Respondent's name; and
(c) Any past, present and future taxation liabilities assessed payable by the Respondent.
4. That the Applicant otherwise retain as her property absolutely to the exclusion of the Respondent, all property she has as at the date of these Orders, including but not limited to:
(a) The property situate at C Street, Suburb D;
(b) Motor Vehicle 1;
(c) All bank accounts registered in the Applicant's sole name;
(d) Subject to paragraph 1 herein, all superannuation entitlements the Applicant has registered in her name;
(e) Any insurance policies registered in the Applicant's name; and
(f) The furniture and chattels presently in the Applicant's possession;
5. The Respondent otherwise retain as his property absolutely to the exclusion of the Applicant, all property he has as at the date of these Orders, including but not limited to:
(a) All his interests in the Dalrymple Trust;
(b)Motor Vehicle 2;
(c) All bank accounts registered in the Respondent's name;
(d) Subject to paragraph 1 herein, all superannuation entitlements the Respondent has registered in his name;
(e) Any insurance policies registered in the Respondent's name; and
(f) The furniture and chattels presently in the Respondent's possession.
6. That unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a) Each party be solely entitled to the exclusion of the other to all other property (including choses in action) and superannuation entitlements in the possession of such party as at the date of these orders;
(b) Monies standing to the credit of the parties in any bank account are to become the property of the party in whose name the account is registered;
(c) Insurance policies remain the sole property of the owner named thereon;
(d) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(e) Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
7. Pursuant to Section 117(2A) of the Family Law Act 1975 the Respondent pay the Applicant's costs when reserved in previous hearings on an indemnity basis on the following dates:
(a) 17 June 2019, fixed at $4,000 (reserved to trial);
(b) 8 November 2019, reserved; and
(c) 18 September 2020, reserved.
8. Pursuant to Section 117(2A) of the Family Law Act 1975 the Respondent pay such amount that this Honourable Court deems appropriate a portion of the Applicant's overall legal fee on an indemnity basis.
9. The Respondent pay to the Applicant the current child support arrears of $3,220 in a lump sum payment.
10. The Respondent pay to recompense the Applicant 50% of the $45,411.80 in expenses registered on the Our Family Wizard App.
11. Such further or other orders as this Honourable Court considers appropriate.
In relation to the wife’s proposed order 1, regarding an equalisation of superannuation, the wife said in her closing submissions that she sought the orders proposed in her amended application filed on 2 November 2020, but then proceeded to say that she wanted no adjustment of each party’s legal or beneficial interests. While there may be some argument about whether the concept of legal or beneficial interests includes superannuation, the wife’s position was made abundantly clear in paragraph 58 of her closing submissions, where she said that, on her submission, she should keep her approximately $44,000 of superannuation and the husband should keep his approximately $65,000 of superannuation. Consequently, I take it that the wife did not press her proposed order 1.
In relation to the wife’s proposed orders 7 and 8, the husband did not address the question of reserved costs in his closing submissions. It is customary to deal with the costs of the proceeding following the delivery of judgment, when the parties know how successful they have been, and can make submissions accordingly. It seems to me to be preferable to leave this issue until after the delivery of judgment and the receipt of any further submissions on the question of costs.
In addition, in her closing submissions, the wife sought a costs order against the husband’s partner, Ms M. It was not apparent that Ms M had been notified of that application. She has not had an opportunity to make submissions on the issue. Consequently, I will leave that issue until after:
a)the delivery of judgment;
b)evidence of proper notice to Ms M; and
c)the receipt of any submissions.
In relation to the wife’s proposed order 9, the wife conceded in her closing submissions that child support arrears are more appropriately dealt with by the Child Support Registrar. Consequently, I take that matter no further.
The husband's proposal
The orders proposed by the husband in his response to final orders filed on 30 November 2020 were as follows:
1. That the Applicant pay to the Respondent a figure representing 40% of the net equity of the former relationship home, being C Street, Suburb D.
2. That each party retain their respective parties' superannuation entitlements.
3. The Applicant otherwise retain as her property absolutely to the exclusion of the Respondent all property in her possession and control as at the date of these Orders.
4. The Respondent otherwise retain as his property absolutely to the exclusion of the Applicant all property in his possession and control as at the date of these Orders.
In view of the wife’s apparent agreement that each party retain their own superannuation, and the husband’s express proposal that the court make an order to that effect, I take it that the parties are in agreement on that point.
The wife’s allegedly undisclosed Westpac account
It was put to the wife in cross-examination that she had failed to provide the bank statements for one of her Westpac accounts which were obtained under subpoena and became exhibit 14. It was put to the wife that a written request was made for bank statements that the wife had during the relationship. The request was said to be at CB196, which is a letter dated 27 February 2019. What that letter actually asks for is the wife’s bank statements from 1 July 2016 to date. The statement of the Westpac account that became exhibit 14 is for the period 2010 until 2012.
Consequently, the bank statements in exhibit 14 did not fall within the request dated 27 February 2017. Although technically, the bank statements in exhibit 14 were not disclosed, they were not specifically asked for, so the usual rule relating to parties who do not disclose should not be applied in relation to the wife’s non-disclosure of the bank statement in exhibit 14.
The account was for a personal loan. The statements are not in chronological order in exhibit 14, and nor were they in chronological order in the husband's tender bundle. Counsel for the husband said that they began with statement 9. In fact, they began with statement 7 and go to statement 10. The balance starts at $13,100.88 on 1 July 2010 and finishes with $4,636.62 on 29 June 2012. It is noted in statement 10 that, as at 29 June 2012, an amount of $2,220.86 was overdue.
In any event, if the repayments continued on their previous trajectory, being about $8,000 in two years, the loan would have been repaid well before 1 July 2016, being the date from which the husband requested bank records. In other words, the account would have been closed before 1 July 2016. It was for the husband to prove there was relevant non-disclosure and he has not done so in relation to this account.
The wife’s defaults on her Westpac personal loan
The wife acknowledged, when taken to the relevant bank statements in cross-examination, that she defaulted four times on her Westpac personal loan, being the loan for which bank statements are provided in exhibit 14. In fact, that exhibit shows that the wife defaulted on that personal loan for each of her 24 monthly repayments between 1 July 2010 and 30 June 2012. On each occasion, the wife incurred a $9 default fee. The bank statements show that the defaults were partially remedied, but, as at as at 29 June 2012, an amount of $2,220.86 was overdue, in addition to approximately $2,400 that was simply outstanding.
The wife explained that she was at home with a young baby and there was just not enough money, which led to the defaults. The husband disputed that, asserting that their household income was actually the national average earnings, and in one year, as the wife acknowledged, his taxable income was over $160,000.
Be that as it may, the default fees in relation to this account for the period provided to the court added up to $216. It is not a significant amount in the overall scheme of things, but these defaults, along with other evidence in the case, indicate that the wife frequently failed to pay her debts as they fell due.
The U Bank documents
The wife was taken to exhibit 15 which is a U Bank statement in respect of the wife. It gives her full name, address, birth date and driver’s licence number.
It refers to a Magistrates’ Court complaint with a particular file number issued on 14 October 2010. The wife denied being served with any such complaint, and said U Bank might have mixed her up with someone else of the same name. However, there is no reason to doubt that a Magistrates’ Court complaint was issued in respect of the wife, given that the document records the wife’s full name, address, date of birth and driver’s licence number.
Exhibit 15 also records a telephone call between the wife and a collections officer at U Bank on 20 December 2011. The collections officer basically said that she needed payment of $3,250 that day, and the wife basically said that she would speak with her parents.
It is not clear what happened next, or whether the $3,250 is some or all of the Magistrates’ Court debt. The wife denied in cross-examination that her parents bankrolled her because she was financially inept and continually got into debt.
However, as mentioned above, it is clear that the wife frequently did not pay her debts as and when they fell due.
Defaults on the wife’s other Westpac accounts
Exhibit 16 consists of Westpac bank statements for the wife for the period of 19 March 2018 to 19 March 2019, which is after the parties separated. One statement was for account XXXX, which seems to have been a deposit account, and the other was for account XXXX, which seems to have been the wife’s home loan account for the C Street, Suburb D property (p.344 of 6,102).
In relation to the deposit statement, at page 342, there is a dishonour fee of $5 and an overdrawn fee of $15. At page 343, there is default interest of $0.59. At page 348, there are four dishonour fees of $5 over a period of two and a half weeks.
In relation to the home loan statement, page 350 shows that, on 12 June 2018, the wife failed to pay $510 of her $1,403 monthly repayment. The arrears built up to about $1,400 by October 2018, after which they were cleared, and then built up again to about $650 in January 2019.
The wife conceded in cross-examination that she had received numerous missed payment notices from the bank in relation to her home loan since separation.
The wife said that, since separation, she had only borrowed money from her parents for legal fees.
When asked whether she wanted counsel to go through every bank statement to show the defaults, the wife acknowledged that she had been late with her mortgage repayments on many occasions but had never received a formal notice to vacate or a notice of repossession.
The court invited counsel for the husband to specify the precise dates and amounts of the arrears in her closing submissions, but she did not do so. It is not for the court to locate amongst the reams of documents presented to it the detailed evidence to support a party’s case. Be that as it may, as already noted, there is ample evidence of the wife’s frequent failure to pay her debts as they fell due.
The husband’s child support for previous children
The wife said in her trial affidavit that the husband, during the relationship, had been in arrears for child support in respect of his children from a previous relationship. She said that Judge Riethmuller made orders on 28 May 2014 requiring the husband to pay the mother of his previous children, Ms H, child support of $30,568.94 plus costs of $4,985, being a total of $35,553.94. She said that she and the husband jointly paid the sum of $35,553.94 plus the husband’s own legal costs of about $4,700, making a total of $40,253.94. The wife annexed a copy of the orders made on 28 May 2014 to her trial affidavit as annexure -10.
The wife failed to tell the court that the husband did not comply with the orders made on 28 May 2014 and, in fact, the orders made on 28 May 2014 were set aside by orders made by Judge Riethmuller on 21 July 2014. Instead of $35,553.94, the husband was then ordered to pay Ms H $10,000 for child support and nothing for Ms H’s costs: see annexure -10 to the husband’s trial affidavit.
I have no doubt that the wife knew that the orders of 28 May 2014 were set aside. I have no doubt that the wife knew that, contrary to her affidavit, she and the husband did not pay Ms H $35,553.94. It was grossly dishonest of the wife to claim that she and the husband had paid Ms H $35,553.94. This falsehood greatly diminishes the wife’s credibility.
The husband said that the $10,000 that he was ultimately required to pay to Ms H was garnisheed from his tax returns. He did concede, however, that a further $2,030 was paid from the parties’ joint account to Ms H for child support on 21 October 2014.
Even in the face of the husband’s evidence about the $35,553.94, which the wife ought to have known that the court would accept because it was substantiated by an order of the court, the wife said in her closing submissions that she and the husband paid $61,196.94 for the support of the husband’s children from a previous relationship. The figure of $61,196.94 included the amounts of $30,568.94 plus costs of $4,985, being a total of $35,553.94, which the husband did not have to pay because of a subsequent order of the court. Instead of $35,553.94, the husband was required to pay Ms H $10,000. The difference of about $25,000 is a substantial sum in the context of this case.
The amounts that the wife said the husband paid for and in relation to child support, leaving aside the $35,553.94, were as follows:
a)E$4,700 for legal costs;
b)E$16,800 consisting of rent of $1,200 per month for 14 months for the husband’s daughter, Ms J;
c)E$800 for Ms J’s car registration;
d)E$2,000 for a car for Ms J; and
e)E$1,343 for car insurance for Ms J for 17 months.
The husband did not agree that he paid $4,700 for his own legal expenses. However, neither party provided to the court a copy of the lawyer’s invoice.
The orders of 28 May 2014 show that the husband was not represented and did not appear in court at all on that day. It would be surprising if there were any legal costs for that day.
The orders of 21 July 2014 show that the husband was represented by counsel on that day. In the absence of documentary evidence and because of my concerns about the wife’s credibility, I consider that a figure of $2,350 is more realistic for the husband’s legal expenses for what appears to have been a short hearing in 2014 which resulted in orders being made by consent.
The husband denied that he paid $1,200 rent per month for his daughter Ms J. He conceded that he paid $999 monthly rent for her. He did not dispute that he paid that amount for 14 months. That totals $13,986, rather than $16,800, as claimed by the wife. The difference is $2,814. The wife did not substantiate with documents her assertions in relation to Ms J’s rent. Because I do not accept that the wife was a witness of truth, and because she has clearly exaggerated other amounts, I accept the husband’s concession.
The husband said, without challenge, that he paid that rent in 2014, when, on the wife’s own case, he earned $162,919 for that financial year while she earned $23,220. I accept that evidence.
The husband conceded that he did buy a car for Ms J, and conceded that it cost $2,000. However, he said without challenge that it was sold for $3,500, so there was in fact a profit. I accept that unchallenged evidence.
The husband also said that registration for the car was $695, rather than $800, and that the car was not insured at a cost of $1,343 or at all. The wife has not substantiated her assertion regarding insurance with documentary evidence so I accept the husband’s denial on that point. It also strikes me as plausible; it would be foolish to pay $948 annualised insurance for a $2,000 car. The wife has not substantiated her assertion regarding registration with documentary evidence so I accept the husband’s concession that he paid $695.
All up, that means that the husband paid for and in relation to child support for his previous children:
a)$10,000 to Ms H; plus
b)$2,030 to Ms H; plus
c)$2,350 for legal costs; plus
d)$13,986 for Ms J’s rent; plus
e)$695 for Ms J’s car registration; minus
f)$1,500 as the profit on the car.
That totals $27,561. The wife said in her affidavit, incorrectly, that the husband had paid $61,196.94 for child support for his previous children. That is more than double what he did pay. The difference is $33,635.94. The gross overstatement by the wife in relation to child support greatly diminishes her credibility.
The husband submitted that his payment of child support could not be regarded as wastage. The wife submitted that that the husband’s payment of child support was a contribution issue, as the amount that the husband paid for child support was not available to his second family.
The principles relating to wastage are well established. In Kowaliw &Kowaliw (1981) FLC 91-092, Baker J said at [10]:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
It cannot be said that the husband, by paying child support, embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, and it cannot be said that the husband, by paying child support, acted recklessly, negligently or wantonly with matrimonial assets. On the contrary, his payment of child support to Ms H was a legal requirement. His payment of rent and so on for Ms J when she was a young adult is what any right-minded parent would do for a child in need.
On the other hand, there is authority that the payment of child support for children of a previous relationship is a matter to be taken into account in assessing contributions, because money spent on a prior family is not available to be contributed to the more recent family: Warner & Warner [2008] FamCAFC 156 at [15]. Consequently, I will take into account the payment of child support of $27,561 for the children of the husband’s previous relationship when assessing contributions.
The insurance payout for the car
When the parties separated, there was a Motor Vehicle 1 registered in the husband’s name. It was subject to a loan of about $23,000 which was also in the husband’s name. The car had an agreed value of $18,000. The husband sold the car to the wife on 26 February 2017, which was a few weeks after separation.
The wife agreed to pay the husband $9,000 for the car, as it had an agreed value of $18,000 and she considered that she already notionally owned half of it. The car was subsequently written off in an accident which occurred while it was parked in the street. The accident was neither party’s fault, although, obviously, there is always a greater risk in parking a car on the street than in a garage.
The wife asserted, without any documentary evidence, that the husband agreed to bear the liability for the car loan. The husband denied that. I do not accept the wife’s claim in this regard, partly because I do not consider the wife to be a credible witness, and partly because it is inherently unlikely in the context of the very strained relationship between the parties and their mutual unwillingness to concede anything in the financial dispute between them.
The parties do not appear to have understood that, if the husband, as the registered owner of the car, had sold it to an independent third party, he could have sold it for its value of $18,000, but to have been able to sell it, he would have been required to discharge the loan before, or at the same time as, the sale. This is just like when a house is sold. Therefore, to have been able to sell the car, the husband would have had to have paid to the lender the $18,000 he received as the sale price, plus the additional approximately $5,000 he owed to the lender.
It is beyond dispute that the loan for the car, from a family law perspective, was a joint loan. It was a family car which the husband and wife both drove. The husband was not solely liable for the loan on basic family law principles. Therefore, for the car to have been sold to an independent third party, the husband and wife jointly would have needed to have paid the lender the $23,000 outstanding on the loan.
When the husband sold the car to the wife, she should not have paid him anything for it, because they had no equity in the car. The wife should have had $18,000 of the debt refinanced to her, because she obtained a car worth $18,000. The result would have been that she had an asset worth $18,000 and a debt worth $18,000, meaning that they cancelled each other out. In addition, the parties jointly should have paid out the additional $5,000 owed to the lender, because it was a joint debt.
In any event, the wife said in her trial affidavit at paragraph 123:
… The entire insurance payout figure of $16,945.62 was paid to [the husband]. In effect, [the husband] received both the insurance payment of $16,945.62 and the $9,000 payment from me and I was left without a car. …
In cross-examination, the wife was shown page 5330 of the husband's tender bundle, which is an email dated 20 June 2017 from Insurance Z to the husband and wife, who are described as the insured. It said:
…
We confirm that your motor vehicle has been assessed as a total loss as it is uneconomical to repair.
…
As your vehicle is currently subject to a financial arrangement your lender requires us to pay out the loan, up to our full settlement amount, prior to making any payment to you. We have confirmed that the loan balance is $23,232.66.
How your settlement was calculated:
The vehicle value we agreed $18,000.00
Less your excess $950.00
Less any outstanding premium (incl. stamp duty GST and FSL where applicable) $104.38
Settlement amount
$16,945.62
Less our payment to your financier
$16,945.62
Our payment to you
$0.00
The wife was asked whether, contrary to her affidavit, where she said that the husband received the insurance payment of $16,945.62, the payment to the husband was nothing. She said that the payment to her was nothing.
When asked whether the payment to the insured person was zero, the wife conceded that was correct. She conceded that the whole insurance payment went to the lender, and she said that the husband continued to have a debt of $8,340 to the finance company.
The wife conceded that the car was a family car that had been driven by her. It was put to the wife that the debt to the finance company should be paid jointly out of the pool. The wife said that she disagreed with that.
When asked again whether the entire insurance payment went to the finance company, the wife said that the entire insurance payment went to the husband’s liability with the finance company. She denied making a misleading statement in her affidavit at paragraph 123 when she said that the husband received both the insurance payout of $16,945.62 and the $9,000 she had paid him. She insisted, wrongly, that the husband had received the insurance payment.
It was put to the wife on the second day of her cross-examination that, notwithstanding the email from Insurance Z on 20 June 2017, she had subsequently emailed Insurance Z demanding that the insurance payment be put into her account. The relevant email is exhibit 9. The wife’s email was sent on 19 May 2017, a month before the letter from Insurance Z.
Consequently, contrary to the husband’s position, it is not correct that the wife insisted, after receiving the letter dated 20 June 2017 from Insurance Z, that the insurance payment be made from Insurance Z to her. However, it is certainly the case that she made that demand prior to Insurance Z’s letter dated 20 June 2017.
The wife’s claim that the husband received $16,945.62 from the insurance company plus $9,000 from her was not correct. The $16,945.62 was paid to the lender. This is example of the wife attempting to distort the facts and figures to suit her case, and also, perhaps, an indication of a self-centred and entitled attitude.
The husband said at paragraph 86 of his affidavit filed on 27 November 2020 that the wife did not give him any money for her half share of the car loan. As discussed, the wife should not have given the husband any money for the car, the wife should have taken on $18,000 of the loan for the car, and the parties jointly should have paid out the balance of the loan.
The husband also said that the wife arranged for the car repayments following separation to be paid from their joint T Bank account, even though he had understood the wife set that account up for him as his individual account. The husband said in his affidavit that, by the wife’s unilateral deduction of repayments from an account which he thought was his alone, he unintentionally paid $2,050 in car repayments post separation for the car which the wife was driving.
In cross-examination, when shown the relevant bank statements (exhibit 5), the wife conceded that $3,280 in car repayments had been paid post-separation from the account which the wife said was the parties’ joint account but which she did not access and which in reality was the husband’s solely.
As I have said, the wife should have assumed the debt for the car loan when she purchased the car from the husband. Because the debt was about $23,000, and the car was worth about $18,000, the husband should have transferred the car to the wife without any money being paid to him, on the basis that the wife would take over $18,000 of the debt and get a car worth $18,000, and the additional $5,000 of the debt would be paid by the parties jointly.
As discussed below, the wife paid the husband $8,000 for the car, not $9,000. However, she used $3,280 of his money post separation for car repayments. Deducting that sum from the $8,000, leaves $4,720. That is the amount that the husband received in relation to the car which he should not have. It will be treated as a part property settlement.
The debt to the finance company is a joint liability. It has grown from about $5,000 to about $8,340, presumably because the parties did not pay it promptly. The parties should equally bear that liability.
The wife seems to have believed that she should have received the $16,945.62 insurance payment, and the husband should have been left with a car loan debt of $23,232.66. I hope it is now obvious how unreasonable the wife’s position was in relation to the car loan.
The purchase of C Street, Suburb D and the deed
The parties agreed that the wife bought the C Street, Suburb D property in 1998, more than seven years before the parties commenced a relationship in 2005.
The wife said that she purchased the property for $170,000. In the joint chronology, the husband disputed the purchase price. However, he admitted it in his trial affidavit and in his closing submissions. In any event, the transfer of land shows that the consideration was $170,000. The court has been given no reason to doubt the authenticity of that document, so I accept that figure.
The wife claimed that her parents lent her $57,500 to assist with the purchase of the property and she also had a mortgage. The husband appears to have accepted that the wife had a mortgage of $112,500 at the time of purchase and that the wife’s parents provided the balance, which amounts to $57,500: husband’s closing submissions, paragraph 3.
The wife claimed that, on 1 December 1999, which is about 22 months after the purchase of the property, she entered into a Deed of Trust and Declaration of Loan (CB606; exhibit 4) which provided that:
a)the wife had purchased the property partly with funds made available by her parents;
b)$17,500 of the funds provided by the wife’s parents represented 10% of the value of the property, and she undertook to hold the property on trust for herself as to 90% and her parents as to 10%;
c)$40,000 of the funds provided by the wife’s parents were a loan which the wife would repay by 100 consecutive fortnightly instalments of $400;
d)the first instalment was due on 7 January1999 [which was 11 months before the deed was executed];
e)in default, the parents could install a tenant or sell the property; and
f)the wife would pay 10% of the value of the property to her parents upon its sale or within 30 days of their written request.
The wife said that she continued to hold 10% of the value of the C Street, Suburb D property on trust for her parents and the $40,000 loan was still outstanding. The husband’s case was that the wife had repaid the loan of $40,000 and that the declaration of trust was invalid.
The husband argued that the declaration of trust had not been stamped in accordance with the Stamps Act 1958 (Vic), even though it had been prepared by a solicitor who would have known that stamp duty was payable. The wife argued that the failure to have the deed stamped was irrelevant, because the Stamps Act 1958 was repealed in 2001.
It is true that the Stamps Act 1958 was repealed on 1 July 2001. However, it was still in effect when the deed was executed, namely, on 1 December 1999. It required payment of stamp duty within three months of the execution of the deed. That Act provided that:
8.Documents requiring payment of fees not to be evidence without receipt of fees
(1)After the time named in the Order of the Governor in Council authorized by the last preceding section to be made no instrument to which the Order applies and in respect of which any fee is payable by any law in force at the time of the commencement of this Act or at any time thereafter shall be used or pleaded or received in evidence except in criminal proceedings unless the fee payable on such instrument is denoted on such document or instrument or otherwise certified by a person to whom a declaration under section 7(2)(a) applies or person who is for the time being an officer of the Court declared under section 7(2)(b) in the manner provided by the regulations.
(2)The provisions of the next succeeding section shall with such adaptations as are necessary extend and apply to the provisions of this section.
9.Documents not properly stamped to be invalid
(1)Subject to this section, a document that ought, under this Part, to bear a stamp or be denoted as prescribed, shall not be of any validity unless it is properly stamped or denoted as prescribed.
…
10.Court to note document not duly stamped
Except in criminal proceedings any document which ought to be but is not, under this Part, duly stamped or denoted as prescribed shall not nor, though no objection is raised thereunto, shall any court allow such document to be used until such document has been first duly stamped or denoted as prescribed.
…
30.Instrument not duly stamped inadmissible
Save and except as aforesaid, no instrument executed in any part of Victoria or relating wheresoever executed to any property situate or to any matter or thing done or to be done in any part of Victoria shall except in criminal proceedings be pleaded or given in evidence or admitted to be good useful or available in law or equity unless it is duly stamped in accordance with the law in force at the time when it was first executed.
Although the Stamps Act 1958 was repealed, by s.14 of the Interpretation of Legislation Act 1984 (Vic.), the repeal of the Stamps Act 1958 did not affect any obligation or liability under it. That is, the repeal did not affect the wife’s liability to have paid stamp duty, and the repeal did not affect the court’s obligation to not admit the unstamped deed into evidence.[1]
[1] See Commissioner of State Revenue v Bulzomi (2009) 24 VR 643.
The parties did not raise this point, but an express trust in respect of land, such as was alleged in this case, can only be created by writing pursuant to s.53(1)(b) of the Property Law Act 1958 (Vic.). In the absence of the deed, which was not stamped and cannot be received in evidence, there was no written evidence that the wife did declare a trust in respect of 10% of the property in favour of her parents in 1999.
The wife also argued that there was a presumption of a resulting trust in this case, proportionate to the amount of money the wife’s parents had contributed to the purchase price. The wife said that there was a resulting trust for 10% of the value of the property. In fact, the wife’s evidence was that her parents contributed about 33% of the purchase price. However, she also said that 23% of the purchase price was the $40,000 loan.
The wife also noted the presumption of advancement, by which money provided by a parent to a child is presumed to be a gift. However, the wife said that presumption did not apply in this case, as evidenced by the deed. As discussed above, the deed cannot be admitted into evidence, and cannot therefore be relied upon to rebut the presumption of advancement.
The presumption of a resulting trust and the presumption of advancement are both rebuttable. In my view, on the balance of probabilities on the admissible evidence, when the property was acquired by the wife, her parents’ intention was to give her 10% of the purchase price, or $17,500[2], and lend her $40,000.
[2] This figure is actually $500 more than 10% of the purchase price of $170,000.
That is consistent with there being no effort to formalise the arrangement for 22 months after the wife purchased the property. Moreover, if it had really been intended that the wife’s parents would be 10% owners, it would have been far simpler to put their names on the title as tenants in common as to 5% each when the property was bought.
The husband also argued that the very fact that the deed was not stamped, although prepared by a solicitor, was an indication that it was never intended that the wife’s parents would have a 10% share in the property. I give some limited weight to that circumstance.
The husband also noted that the wife’s parents entered into a substantially similar agreement with their son, the wife’s brother. The husband noted that, when the wife’s brother sold his house, he did not repay his parents, but rolled all of the proceeds into a new house purchase. The husband argued that, as the wife’s parents did not recover their 10% share when the husband’s brother sold his house, contrary to the deed, there was no intention that the wife’s parents would recover a 10% share of the C Street, Suburb D property if and when that is sold. I consider that there is some force in that submission, and give that circumstance some weight.
The husband also noted the lack of a caveat to protect the wife’s parents’ alleged interest in the property. The wife said that was immaterial, but it is one more small factor that lends some credence to the husband’s position.
The wife’s father swore an affidavit in these proceedings and was cross-examined after the wife had been cross-examined. The wife’s father said in his affidavit that he held a 10% interest in the C Street, Suburb D property and none of the $40,000 loan had been repaid.
While the wife’s father asserted that he has a 10% interest in the C Street, Suburb D property, his evidence does not significantly advance the matter. As discussed elsewhere in these reasons, I do not consider the wife’s father or the wife to be credible witnesses.
All in all, I conclude that the wife’s parents do not hold a 10% interest in the C Street, Suburb D property. I consider that the 10% of the purchase price advanced by the wife’s parents to the wife was intended at the time of purchase to be a gift. It will be taken into account as a contribution by the wife, along with the rest of her equity in the C Street, Suburb D property.
The loan agreement is curious in that it requires repayment of $40,000 by 100 fortnightly instalments of $400 starting in January 1999. The loan agreement itself is dated 1 December 1999. If the loan agreement had been intended to reflect the real arrangements between the wife and her parents, one would have expected it to acknowledge any repayments that had been made between January and December 1999. If no repayments had been made, one would have expected it to specify a later start date for the repayments. This peculiarity raises some doubt about the genuineness of the loan agreement.
In any event, the wife’s case was that she had made no repayments under the loan agreement, and that the whole $40,000 remained outstanding. In her affidavit sworn on 2 November 2020 (CB562), the wife said at paragraph 82:
I purchased the C Street, Suburb D property in 1998 for the sum of $170,000. I am the sole registered proprietor of this property. At the time of purchase, there was a modest mortgage secured against the property. My parents loaned me the sum of $57,500 to assist me to purchase C Street, Suburb D. This loan was formally documented and was consistently acknowledged by each of myself and my parents that it would be repaid thereafter. They protected themselves somewhat in purchasing the property as they always held a 10% interest in it. A Deed of Trust and a Declaration of Loan was executed on 1 December 1999 evidencing such loan. The Deed of Trust and Declaration of Loan states that my parents hold a 10% beneficial interest in the property. The current amount owing to my parents pursuant to the Deed of Trust and Declaration of Loan is $131,000 (10% interest $91,000 and $40,000 bank loan). (emphasis added)
The so-called modest mortgage referred to by the wife was actually two thirds of the value of the property at the time. In is interesting that the wife said at line 4 of that paragraph that her parents loaned her $57,500 and that the loan was formally documented. That contrasts with the wife’s claim that $17,500 of the $57,500 was not a loan but her parent’s purchase price for a 10% interest in the property.
However, the wife did go on to indicate that only $40,000 of the $57,500 was a loan, and the balance of $17,500 represented her parents holding a 10% interest in the property. The wife explained in her oral evidence that the bank loan she referred to in paragraph 82 of her affidavit was the loan from her parents, not from a bank. Her statement that the 10% interest was worth $91,000 was made before the parties agreed that the C Street, Suburb D property is now worth $1,005,000. The confusion in paragraph 82 of the wife’s trial affidavit about how much of the $57,500 was a loan undermines somewhat the reliability of the wife’s evidence.
In any event, there was no suggestion in the wife’s trial affidavit that she had made any repayments towards the $40,000 debt mentioned in the loan agreement. Her case was that the $40,000 debt remained outstanding in its entirety.
In her oral evidence, the wife initially said that she had not made any repayments towards the $40,000 loan, notwithstanding that the loan agreement she relied upon required her to pay $400 each fortnight for 100 fortnights. Then the wife said that may have paid a few hundred dollars now and then in 1999.
It was put to the wife that she had made repayments of $400 per month to her parents until December 2006, when the debt of $40,000 was discharged in full. The wife denied that. She said that she certainly had not paid out the loan of $40,000. She said that she had not been concerned to repay the loan because it could be repaid when the house was eventually sold.
The wife then said that she had made some payments, but her parents had lent her other money, which brought the balance back up to $40,000. She acknowledged that she had not said in any of her affidavits filed in this proceeding that she had made some repayments and re-borrowed an equivalent amount to bring the debt back up to $40,000.
At this point in cross-examination, the wife’s counsel noted that the husband had conceded in paragraph 138 of his affidavit filed on 27 November 2020 that the $40,000 loan was outstanding. The husband’s counsel said that the husband would withdraw that concession. The wife noted in her closing submissions that the husband did not formally withdraw the concession when he gave oral evidence. However, the husband’s conduct of the case showed that he certainly did not stand by the concession. I do not consider that he should be bound by it.
The wife was then taken to her parents’ bank records which had been obtained under subpoena. The wife had objected to that subpoena but the objection was overruled. When shown the bank records (exhibit 13), which only went as far back as January 2005, the wife conceded that she had repaid her parents $400 per month from January 2005 until December 2006. That is 24 months and totals $9,600. I cannot help but think that the wife objected to the subpoenas for her parents’ bank records because she was attempting to hide the truth from the court. This reflects poorly on the wife’s credibility.
Most of the $400 payments were clearly from the wife because, in the bank statement, most of the relevant transactions had her name next to them and said monthly p’mnt. When taken to another payment of $1,000, which also had her name next to it in the bank statement, the wife acknowledged making that payment as well. That meant the wife conceded making repayments of $10,600.
On 3 April 2006, there were two deposits to the wife’s parents’ account of $1,500. The bank statement did not have the wife’s name next to those transactions. When taken to these transactions in cross-examination, the wife declined to acknowledge them as her payments saying that they did not have her name next to them. It does not inspire confidence in the wife’s evidence if she will only admit matters contrary to her interests when confronted with incontrovertible documentary evidence.
It was put to the wife that she had in fact paid $400 per month to her parents from the time that she had purchased the property until December 2006. The wife denied that, prior to January 2005, when the bank statements commenced, she had paid her parents $400 per month. The wife said in her oral evidence, but had never said in any of her affidavits, that her parents demanded that she started making payments on the loan. The wife did not say when that demand was made, but, by implication, it was made in about January 2005.
The wife submitted that this evidence amply demonstrated that the husband’s and Ms M’s finances were intertwined and her affidavit to the contrary was false.
It was not suggested that the husband and Ms M have a joint bank account. They clearly pay money to each other, but that does not necessarily mean that they are living together, or that the husband is supporting Ms M or vice versa. Having seen both the husband and Ms M in the virtual witness box, I am not satisfied on the balance of probabilities that the husband’s finances and Ms M’s are intertwined in any relevant sense. I am satisfied that they paid for various items on each other’s behalf and then repaid each other.
The wife also noted that the wife was described as the husband’s partner in a court order and in the s.11F report. However, as people can have different understandings of the word partner, I do not consider that this amounts to a concession that the husband and Ms M were de facto partners.
All in all, and having observed the husband and Ms M in the virtual witness box, and notwithstanding some serious flaws in their reliability as witnesses, I am not persuaded that the husband and Ms M live together as a de facto couple, or support each other financially. I was particularly struck by Ms M’s description of caring for her elderly father, and accept her evidence that she lives with him, and not with the husband.
The wife’s relationship with Mr KK
The husband said at paragraph 107 of his trial affidavit that the wife was in a relationship with Mr KK, who she had formerly been in a de facto relationship with for six years. It seems that the husband was suggesting that the wife and Mr KK were in a de facto relationship prior to the husband’s de facto relationship with the wife. (As an aside, that might explain why the wife and her parents entered into the so called deed of trust and loan agreement but, of course, I am in no position to make a finding to that effect.)
However, currently, the husband’s allegation was simply that the wife and Mr KK spent a lot of time together, and the wife had used funds from the pool to buy a boat that Mr KK uses. These allegations are so vague and unsubstantiated, and the husband is such an unreliable witness, that I am unable to factor these claims into the determination in this matter.
Whether the parties have separated
The parties agreed that they had separated.
The assets and liabilities
The parties filed a joint statement (exhibit 1) (“the Table”) which was meant to set out clearly and concisely what they agreed and what they disputed in relation to the pool, contributions and future needs.
Like so much else in this matter, the Table was in many respects unclear.
In any event, the parties considered that they had no joint assets and no joint liabilities at the time of trial. However, as discussed above, I consider that they have a joint liability for the loan for the first Motor Vehicle 1, in the sum of $8,340. For convenience, I will treat each party as owing $50% of that debt.
It also appears from the Table that the parties agreed that:
a)the C Street, Suburb D property was registered in the wife’s sole name; and
b)at the time of trial it was worth $1,005,000.
However, the wife alleged that she held 10% of the C Street, Suburb D property on trust for her parents. The husband disputed that. As discussed above, I do not accept that the wife holds 10% of the C Street, Suburb D property on behalf of her parents.
The parties were also in dispute about the value of the wife’s household contents. The wife said that they were worth $3,500 and the husband said that they were worth $50,000. There was no valuation evidence from an appropriately qualified expert. The value of an asset is what it could be sold for second-hand, not what it cost. In any event, in the absence of expert evidence, I will treat the wife’s estimate as a concession, and treat her chattels as being worth $3,500.
The parties agreed that the wife had savings in her T Bank account of $956 and in her Westpac account of $3.
The husband also alleged that the wife had a Motor Vehicle 1 which he said was worth $10,700. The wife agreed that she had such a car but claimed in the Table that was worth $8,600. In the absence of any sworn evidence from an appropriately qualified person, I will treat the wife’s valuation as a concession and treat the car as being worth $8,600.
The parties agreed that the wife’s bank mortgage in respect of the C Street, Suburb D property was $227,435.
The wife also alleged that she had outstanding loans from her parents of:
a)$23,234.19 for materials and so on for E Street, Suburb F;
b)$137,520 for monies deposited in the home loan account and the joint account;
c)$220,000 for legal fees; and
d)$35,000 for the first and second Motor Vehicle 1s, for the husband to relocate and for home loan arrears of $2,000.
As discussed above:
a)there is no outstanding debt to the wife’s parents for E Street, Suburb F;
b)of the $137,520, $68,125 was a gift and not a loan, $66,230 was largely a repayment by the parents of the $70,000 the wife paid them on the settlement of E Street, Suburb F and $3,165 was double counted by the wife;
c)on established authority, legal fees incurred in these proceedings are not taken into account; and
d)the $10,000 to the husband to relocate and the $14,000 for the replacement Motor Vehicle 1 were gifts from the wife’s parents to her and not loans, and the $8,000 for the original Motor Vehicle 1 and $2,000 for home loans arrears were not advanced by the wife’s parents to the wife.
In other words, I am not satisfied that the wife has any relevant outstanding debt to her parents.
The parties agreed in the Table that the husband has bank savings of $423.33, and a child support debt to the wife of $3,220. However, in paragraph 27 of the wife’s closing submissions, these matters were not included in the summary of assets and liabilities. Consequently, it seems that they were not pressed, and I will disregard them.
The husband alleged in the Table that he had two motor vehicles worth $300 each. The wife said they were worth $3,350 in total. There was no sworn evidence about the value of these cars from an appropriately qualified expert. In paragraph 27 of her closing submissions, the wife appears to have accepted that the value of the two motor vehicles is $600. I will treat that as a concession.
The wife also alleged that the husband had an interest worth $53,719 in his deceased mother’s estate. However, as discussed above, I do not accept that his inheritance has any realisable value.
The wife also alleged that the husband had a debt to her parents of $5,000 for a business and $4,710 for a Sheriff’s fine. However, as discussed above, I do not accept that those debts exist.
The wife alleged in the Table that the husband had household chattels of an unspecified value. There was no sworn evidence from an appropriately qualified expert regarding the husband’s chattels. There is nothing at all for me to base a finding on, and I am not permitted to speculate. In any event, in paragraph 27 of her closing submissions, the wife did not refer to or include a figure for the husband’s chattels. I assume the point was not pressed. In the circumstances, I am unable to find that the husband has any household chattels of any appreciable value.
The wife also alleged in the Table, and the husband denied, that he had an unquantified interest in Ms M’s Motor Vehicle 3, her property, and her funds. However, there was no appropriate evidence about any of these matters. In any event, in paragraph 27 of her closing submissions, the wife did not refer to or include a figure for the husband’s interest in any of Ms M’s assets. I assume the point was not pressed. In the circumstances, I am unable to find that the husband has any interest in Ms M’s assets.
Consequently, the pool is as follows:
Joint assets
NIL
Joint liabilities
NIL
Wife’s assets
C Street, Suburb D
$1,005,000
Replacement Motor Vehicle 1
$8,600
Household contents
$3,500
T Bank savings
$956
Westpac savings
$3
Wife’s total assets
$1,018,059
Wife’s superannuation
$43,672
Wife’s total assets plus superannuation
$1,061,731
Wife’s liabilities
Mortgage on C Street, Suburb D
($227,435)
50% of the $8,340 owing for the car loan
($4,170)
Wife’s total assets plus superannuation less liabilities
$830,126
Husband’s Assets
Value
T Bank savings
$423
2 motor vehicles
$600
Husband’s total assets
$1,023
Husband’s superannuation
$64,849
Husband’s total assets plus superannuation
$65,872
Husband’s liabilities
Value
50% of the $8,340 owing for the car loan
($4,170)
Husband’s total assets plus superannuation less liabilities
$61,702
TOTAL POOL
$891,828
At present, the wife holds 93% of the pool.
Contributions
a. Initial contributions
The parties agreed in the Table that the husband's initial contributions included:
a)a motor vehicle; and
b)accruing child support arrears to his former partner, Ms H.
The parties agreed in the Table that the wife's initial contributions included:
a)C Street, Suburb D;
b)a motor vehicle subject to finance; and
c)a credit card debt.
The husband alleged in the Table and the wife disputed the following matters concerning initial contributions:
a)the wife's credit card debt; and
b)the wife's motor vehicle finance was $27,000.
The wife alleged in the Table and the husband disputed the following matters concerning initial contributions:
a)that the husband had credit card debt; and
b)that the husband's child support liability was significant.
However, no real evidence was given about these matters, and no closing submissions were made about these matters, except for the C Street, Suburb D property. I am not able to make findings about the issues alleged in the Table, except in relation to the C Street, Suburb D property.
The parties seemed to be in agreement that, when the wife bought the C Street, Suburb D property for $170,000 in 1998, it had a mortgage of $112,500, or about two thirds of its value. When the parties commenced their relationship in 2005, the mortgage on the C Street, Suburb D property had had increased to $277,639, and the property had presumably increased in value as well. However, a retrospective valuation was not provided to the court, so the wife’s equity in the C Street, Suburb D property at the commencement of the relationship cannot be ascertained.
In addition, as discussed above, the wife had a debt to her parents of $10,600 at the commencement of the relationship, not the $40,000 that she claimed.
b. Contributions during the de facto relationship
The de facto relationship started in 2005 and lasted until 6 February 2017, a period of just over 11 years.
The parties were unable to agree on any of the husband's contributions during the de facto relationship.
The parties agreed that the wife's contributions during the de facto relationship included her ongoing ownership of the C Street, Suburb D property, which provided them with a place to live and accommodate their two children.
The husband was the principal breadwinner, and the wife was the principal homemaker and carer, although she did work part time as well, and the husband did contribute to childcare, cooking and cleaning.
The wife said at paragraph 103 of her trial affidavit, without challenge, that the parties’ respective earnings from 2009 until 2017 were as follows:
Financial year ended 30 June:
Wife
Husband
2009
$54,909
$77,077
2010
$15,457
$17,663
2011
$16,745
Not Known
2012
$25,663
$29,250
2013
$25,042
$101,576
2014
$23,220
$162,919
2015
$26,756
$123,034
2016
$22,869
$33,665
2017
$51,093
$11,998
The husband provided his tax return for 2011, which showed a taxable income for that financial year of $39,442. The total earnings for the wife between 2009 and 2017 were $261,754 and for the husband were $596,624. That is, the husband’s earnings were more than twice the wife’s, in fact, $73,116 more than twice the wife’s.
It was not disputed that the husband contributed all of his earnings to the family’s joint account, and that his earnings were used for the family’s expenses including the mortgage over the wife’s property in C Street, Suburb D. That is, to be very clear, because the wife has not expressly acknowledged it, the husband contributed, directly or indirectly, to the wife’s mortgage over the C Street, Suburb D property, and thus, to the retention of that property.
The husband’s large annual earnings of $101,576, $162,919 and $123,034 were achieved while he was a fly-in-fly-out worker in Western Australia. While the husband was away, the wife was solely responsible for caring for the two children of the relationship. Except for those three years, the husband’s earnings were $209,095 and the wife’s were $186,736.
The parties were in agreement that the husband had a number of trips back to Country L when his mother was sick and eventually died in 2016. I do not consider that these trips should be taken into account as negative contributions. The trips were on compassionate grounds, and were a foreseeable and natural consequence of the husband having family overseas.
After his mother’s death, the husband was unable to work for a couple of months. However, his overall earnings were as discussed above.
The wife claimed that, during the relationship, the husband contributed in excess of $61,000 of family income to the support of his children from a previous relationship. However, as discussed above, the wife grossly overstated that figure. As found above, during the relationship, the husband contributed $27,561 to support his children from a previous relationship. Even taking into account that child support, the husband’s earnings during the relationship were still more than twice the wife’s.
In 2005 and 2006, the wife repaid to her parents $10,600 which she owed them at the commencement of the relationship and which would otherwise have been available to the family.
The husband claimed that he undertook renovations of the wife’s property in C Street, Suburb D, including landscaping the front and back garden, laying outdoor paving, erecting fences, painting the interior of the property, building a carport and making interior structural alterations to improve access to the bedrooms. The wife said that her father completed these works at his own expense with some physical assistance from the parties.
While I did not find either party to be an entirely credible witness, I did find the husband to be credible on this point. His evidence on this issue strikes me as very plausible. Having said that, I also accept that the wife’s father may have provided some relatively minor assistance.
I draw the same conclusions in relation to the renovation of the E Street, Suburb F property.
I accept that the wife drew down on the mortgage on the C Street, Suburb D property to fund the deposit on the E Street, Suburb F property. However, the wife’s case is that the E Street, Suburb F property only produced “nominal” proceeds of sale. Therefore, on the wife’s case, her contribution for E Street, Suburb F was of marginal benefit.
However, as discussed above, the proceeds of sale of E Street, Suburb F were in the order of $146,000. Therefore, the wife has to be given credit for using some of her equity in the C Street, Suburb D property (without double counting it) as a contribution in the form of the deposit for E Street, Suburb F. That deposit was a springboard for the production of the proceeds of sale of $146,000. On the other hand, the wife has not satisfactorily explained where that money went.
When E Street, Suburb F was sold, the wife paid to her parents $67,000, of which they subsequently repaid $66,230.
In addition, the wife’s parents gave to the wife during the relationship $68,125 and $4,710, making a total of $72,835. I am satisfied that money was used for the benefit of the family. These gifts should go on the wife’s side of the ledger.
During the relationship, the wife was also able to borrow from, and repay to, her brother the sum of $20,000 to assist with E Street, Suburb F. The benefit to the parties of this was the difference between the interest they paid the wife’s brother and would they would have paid a commercial lender. However, there was no evidence about that, so I am unable to assess it.
c. Contributions post separation
The parties were unable to agree on any of the husband's post-separation contributions.
The parties agreed that the wife's post-separation contributions included the wife remaining the primary carer of the children and attending to all of their needs.
It was also agreed that the husband received $18,000 from the wife at separation, being the husband’s $10,000 relocation expenses and the $8,000 for the Motor Vehicle 1.
The wife also said in the Table that, post-separation, she had contributed $60,649.94 to the mortgage for the C Street, Suburb D property, and paid rates and utility bills. In the wife’s closing submissions, the wife claimed that she had contributed $66,000 towards the mortgage, post separation.
In her trial affidavit, she said at paragraph 134 that she had made mortgage repayments post-separation of $66,130, including interest repayments of $40,876, and reduced the mortgage from $247,023 at separation to $227,605. That is a reduction of $19,418.
To the extent that the wife was paying interest in her mortgage repayments, that was the equivalent of rent, and, along with utility bills, was largely just the cost of accommodating herself and the children. To the extent that the wife reduced the mortgage on the C Street, Suburb D property, she would have added to the equity in that property. I accept that the wife has made a post-separation contribution to the equity in the C Street, Suburb D property of about $20,000.
After separation, the wife received gifts from her parents of $14,000 to buy a replacement Motor Vehicle 1 and $10,000 to pay the husband’s relocation expenses. These gifts should go on the wife’s side of the ledger.
The wife used $3,280 of the husband’s money to make repayments for the Motor Vehicle 1 that was later destroyed. However, that will be dealt with as discussed above.
In the Table, the husband alleged, and the wife disputed, that the husband makes child support payments with respect to the two children of the relationship. I am satisfied by -16 to the husband’s trial affidavit that the husband has paid child support for the children of the relationship. Payments were deducted from his wages when he was working and he has also made payments by credit card.
The husband was in arrears of at least $4,655.61 in October 2020, when his tax refund was intercepted. He said that the arrears arose because his employment ceased and he did not tell the Child Support Agency.
In addition, the wife said in her trial affidavit that the husband is currently $3,220 in arrears of child support. That is largely substantiated by annexure -1 to the affidavit sworn by the wife on 15 September 2020, which showed that, as at 15 September 2020, before the husband’s tax refund was intercepted, the arrears were $7,682.46. If $4,655.61 is deducted from that sum, the amount left is $3,026.85. It is plausible that the husband’s arrears have increased by about $200 since 15 September 2020. That is, I accept the wife’s evidence about this issue.
The husband is now assessed to pay child support of $31.81 per week. Obviously, that would not go very far when trying to feed, clothe, accommodate, educate, and otherwise care for a 13 year old and an 11 year old.
In the Table, the husband alleged, and the wife disputed, that the husband cares for the children each fortnight and half of the school holidays pursuant to final parenting orders. Those orders were made by consent on 13 February 2020, and provide for the children to spend time with their father for two nights a fortnight, on special occasions and for half of school holidays. I understand that those orders are broadly complied with, and I accept the husband’s claims in this regard.
In the Table, the wife alleged and the husband disputed that, post-separation, she had solely met all expenses for the children totalling $45,411.80. The wife supported this claim with a print out of her entries into My Family Wizard: -19. Obviously, that is not evidence as such. It is just the wife’s assertions. She did not provide evidence that she had incurred these expenses or that she had paid them.
The wife appears to propose that the $45,411.80 should be split equally, so that each party would pay $22,705.90.
In any event, some of these expenses are for extracurricular activities, such as the expenses for hobbies and sports lessons. The husband argued that the children should do fewer extracurricular activities. However, they seem to me to be within the normal range.
Other expenses are for medical, dental and counselling services. I am prepared to accept that the children needed those services.
However, the $45,411.80 includes school fees of $1,502.50, $11,790, $2,740, $6,100 and $1,550, totalling $23,682.50, plus the costs of school winter, sport and other uniforms of $1,340.27. The children attended a Catholic primary school, and the older child is attending a Catholic secondary school, at a cost of $11,790 per year.
The wife said that the parties agreed to send the older child to a particular Catholic secondary school. The husband disputed that there was an agreement, or any consultation, and said that, in his view, the older child should attend a free, government, secondary school. I accept the husband’s evidence about the lack of agreement or consultation in relation to the older child’s secondary schooling. There does appear to have been agreement in relation to the children’s attendance at a local Catholic primary school.
If the wife wants the children to attend fee-charging secondary schools, that is something that she can arrange, subject to equal shared parental responsibility. However, subject to any child support determination or agreement to the contrary, she cannot expect the husband to contribute to the cost of the school fees for private secondary education. Nor should her payment of private school fees be treated in these proceedings as a contribution. It is just a voluntary expenditure on her part.
I also note that, in another example of double counting on the wife’s part, she said in the Table that her parents paid the older child’s private school fees. It was only because I closely examined -19 that I noticed that it also included private school fees amongst the expenses of $45,411.80. Again, if the wife’s parents want to pay for private school fees, well and good. But it should not count in the assessment of contributions.
In any event, the wife has not provided appropriate evidence that she has incurred or paid these expenses. Moreover, they are a child support issue.
Having said that, I accept that the husband is paying minimal child support, and that the wife is bearing the bulk of the children’s expenses.
The wife also said in the Table that, post-separation, the husband had given his de-facto partner, Ms M, funds to purchase a Motor Vehicle 3. The husband and Ms M were cross-examined about this. The husband was clearly confused, but his evidence was to the effect that he and Ms M lent each other money and repaid whatever they borrowed. In particular, he said Ms M would make payments on the husband’s behalf when he was working remotely and he did not have access to the internet to make online payments. Ms M was more clear in her evidence. She said that the husband lent her $4,000 for a car after her car was written off.
I found the husband’s and Ms M’s evidence plausible and convincing on these matters. That is, the husband did not buy the wife any car at all, much less a motor vehicle worth $100,000 or thereabouts. Once again, the wife has overstated the position.
The s.90SM(4)(d), (e), (f) and (g) and the s.90SF(3) factors
The parties were able to agree that the children of the relationship spend two nights a fortnight and half school holidays with the husband and otherwise live with the wife. Otherwise, the parties were unable to agree on any of the future factors.
Obviously, the children living 12 nights a fortnight with the wife, and the husband paying child support of only $31.81 per week, means that the children are a huge financial burden on the wife, even leaving aside private school fees.
The wife alleged in her closing submissions that the husband has fulltime employment from which he earns $69,891 per year, but alleged that he could earn a lot more if he returned to working in W.A, where, in the past, he has earned $162,919 per year.
The husband conceded in paragraph 104 of his trial affidavit that he had earned $69,891 for the year ended 30 June 2020.
In my view, working on a fly-in-fly-out basis is potentially very oppressive. A Curtin University study, of which I consider I can take judicial notice, has found that one in three FIFO workers experience high or very high levels of psychological distress: foreword, Centre for Transformative Work Design, Impact of FIFO work arrangements on the mental health and wellbeing of FIFO workers, report produced for the WA Mental Health Commission (September 2018).
I do not consider that the husband should be treated in these proceedings as having an earning capacity of $162,919 per year, or any amount above what he is presently earning. He has skills as a tradesman, but is now working as a labourer. It would be grossly unreasonable to insist that he work on a FIFO basis.
As discussed above, I am not satisfied that either party is in a de facto relationship with another person, or receives financial support from another person, except that the wife receives financial assistance from her parents. If anything, the wife’s evidence was to the effect that the husband supports Ms M. However, as discussed above, I am not persuaded of that claim.
Referring specifically to the matters listed in s.90SF(3) of the Act, I note the following:
a)the husband is 55 years old and the wife is 50 years old;
b)they are both able to work, the husband having an earning capacity of about $70,000 a year, and the wife having an earning capacity of about $65,000 per year;
c)the wife has the children of the relationship for 12 nights a fortnight, and half school holidays;
d)the children are 13 years old and 11 years old, so there are many years ahead of caring for them;
e)neither party has a duty to maintain anyone other than their children;
f)they both have the usual expenses of supporting themselves;
g)neither party is eligible for a pension;
h)a modest standard of living for each party would be reasonable in all the circumstances of this case;
i)it is not suggested that either party pay maintenance to the other;
j)the proposed orders will not impact on the ability of a creditor to recover their debts;
k)the duration of the relationship has not impacted on either party’s earning capacity;
l)this is not a case where it is necessary to protect a party’s role as a parent;
m)neither party is cohabiting with another person;
n)the husband is presently liable to provide child support of about $31 per week; there is no reason to suppose that he will provide much more than that in the future;
o)there is no applicable binding financial agreement; and
p)all relevant matters are addressed elsewhere in these reasons.
Whether it would be just and equitable to alter the parties’ property interests
The wife proposed that there should be no alteration to the parties’ legal and beneficial interests, or failing that, an 80:20 split in her favour. The husband argued that the C Street, Suburb D property should be sold and the proceeds divided 60:40 in the wife’s favour.
In my view, based on the various contributions and future needs discussed above, it would be just and equitable to alter the parties’ legal and beneficial interests in their property.
The husband argued that the wife’s initial contribution of the equity in the C Street, Suburb D property had dissipated with the passage of their 11 year relationship. However, in my view, the wife’s initial contribution of that property, although its value at the time the relationship commenced was not properly quantified, was a significant and ongoing contribution.
The first point that must be resolved is the debt to the finance company for the car. As discussed above, that it is a debt that should be borne by the parties equally. However, the debt is in the husband’s name, and the finance company will look to the husband for payment of that debt. Therefore, the appropriate course is for the wife to pay her half share of the debt to the husband, and the husband to then pay the finance company. As this debt has been outstanding for a long time, the wife should pay that half share to the husband within 14 days.
In addition, the husband has received $10,000 from the wife shortly after separation to relocate as well as, in effect, $4,720 in relation to the car. These amounts are to be treated as a part property settlement.
Taking into account those matters, and weighing up the property pool and the parties’ various contributions and future needs as discussed above, I consider that it would be just and equitable for the wife to receive 70% of the equity in the C Street, Suburb D property, and the husband to receive 30%. That is based on the wife receiving an uplift of about 10% of the equity in the C Street, Suburb D property for contributions and a further 10% for her future needs. The uplift for the wife’s future needs is particularly because of the wife’s much greater share of the care of the children of the relationship, and the husband’s very low rate of child support payments.
What order is just and equitable?
The equity in the C Street, Suburb D property is $1,005,000 minus $227,435 which equals $777,565. 30% of that is $233,269.50. That is how much it is just and equitable for the wife to pay the husband, in addition to the $4,170 for the finance company.
The husband proposed that the C Street, Suburb D property be sold. I consider that it is just and equitable that the wife be given 60 days to obtain finance to, in effect, buy out the husband’s share in the property. If she is not able to pay him $233,269.50 within 60 days, it is just and equitable that the property be sold, and the proceeds be divided 70% to the wife and 30% to the husband.
There will be orders accordingly.
I will hear the parties on the question of costs.
I certify that the preceding three hundred and ninety-eight (398) paragraphs are a true copy of the reasons for judgment of Judge Riley
Deputy Associate:
Date: 24 March 2021
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