Coroneos and Coroneos

FAMILY COURT OF AUSTRALIA

CORONEOS & CORONEOS

[2011] FamCA 12

FAMILY LAW – PROPERTY – wife’s father sought leave to intervene in proceedings between the husband and wife – intervener asserts a debt is owing to him with respect to the acquisition of a property – issues relating to a property registered in the name of the wife and her brother and transferred to the intervener after separation – dispute as to beneficial ownership – valuation evidence of estate in remainder of wife and life estate of intervener

Family Law Act 1975 (Cth)
Conveyancing Act 1919 (NSW)

APPLICANT:

Mr Coroneos

RESPONDENT:

Ms Coroneos

INTERVENOR:

Mr Bianca

FILE NUMBER:

SYF

4251

2005

DATE DELIVERED:

19 January 2011

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Justice Fowler

HEARING DATE:

10-14 August 2009, 13 and 26 November 2009, 17 September 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Lethbridge SC

COUNSEL FOR THE RESPONDENT:

Mr Givney

COUNSEL FOR THE INTERVENOR:

Mr Harper

Orders

Within thirty (30) days of the date of these Orders the husband shall do all such acts and things and sign all such documents as may be necessary to transfer to the wife the whole of his right, title and interest in the property situate at and known as H property in the State of New South Wales.
Simultaneously with the transfer referred to in Order 1 above the wife is to pay to the husband the sum of $160,102.08 and do all such acts and things as may be necessary to discharge the husband from any and all his liability under the terms of the mortgage or mortgages charged on the H property and secured on the E property and from this date shall hold him indemnified from any liability thereunder.
The Court declares that the wife holds an estate in remainder jointly with her brother in the P property subject to the life estate of her father the intervener in these proceedings.
The wife is declared, as against the husband, the sole and beneficial owner of:
(a)       C property
(b)       household contents in her possession
(c)       IAG shares in her possession
(d)       any bank accounts in her name and control and
(e)       her Volvo motor vehicle.
(f)her estate in remainder in the property at P which is held subject to the life estate of her father, the intervener in these proceedings.
The husband is declared, as against the wife, the sole and beneficial owner of:
(a)       E property
(b)       household contents in his possession
(c)       his interest in the CBUS Superannuation Fund and
(d)       his Toyota motor vehicle
If either party refuses or neglects to sign within fourteen (14) days of a written request to do so any documents necessary to effect the terms of these Orders, a Registrar or such other officer or person as may be appointed by the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 (Cth) to execute such documents on behalf of such party.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 4251 of 2005

MR CORONEOS

Applicant

And

MS CORONEOS

Respondent

And

MR BIANCA

Intervener

REASONS FOR JUDGMENT

Introduction

The proceedings before the Court are proceedings initiated by the husband in which he seeks orders under section 79 of the Family Law Act1975

(“the Act”).
In those proceedings the husband seeks to set aside the transfer of certain of the wife’s registered interests in property at P to her father, Mr Bianca, (“the intervener”), which the husband says are beneficially owned by the wife in partnership with her brother.
To those proceedings the wife has responded and sought orders under

section 79. She has sought orders that certain property registered in her name and the husband’s name be transferred to her upon payment of a sum of money. The wife seeks that she otherwise be declared as against the husband the owner of a certain property at C which was registered in her name. The wife denies that she owned the property at P held with her brother beneficially and opposes the setting aside of the transfer referred to.
The intervener in these proceedings, the wife’s father, seeks an order that the husband’s application to set aside the transfer referred to above be refused. He further seeks the repayment of funds he says he is owed and which is said to be the unpaid portion of a sale price of a property at H which he sold to the husband and the wife. He asserts the sale price was $650,000 and that only a portion of that sum has been paid. The amount said to be unpaid is $186,332.76. The husband denies that any such sum is owing and that the real purchase price was $400,000, notwithstanding the terms of the contract for sale, and that that sum has been paid.

Background Facts

Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
In 1935 the intervener was born and is currently 75 years of age.
In 1959 the wife was born and is currently 51 years of age.
In 1961 the husband was born and is currently 49 years of age.
In 1980 the husband commenced employment as a store person and remained in that employment until 1990.
In July 1980 the wife acquired the title to the property at C (“the C property”) which she says was purchased for her by her father. The purchase price was $50,000.
In 1981 the parties met.
During 1982 the parties commenced a relationship.
In 1985 the husband asserts that he lent to the wife the sum of $2,500 so that she could travel to Europe on a tour for three months.
In 1985 the parties became engaged.
In 1987 the husband purchased vacant land at E (“the E property”) for a purchase price of $37,500 which was financed by the husband’s savings and a mortgage advance of $17,000 from the St George Building Society.
The wife’s father installed cladding at the C property at a cost to him of $3,500.
In January 1988 the parties were married and for a period of approximately four months they resided with the husband’s parents. The wife was employed as a clerk.
On 5 May 1988 the husband asserts that the parties moved into the C property and the husband commenced construction of the E property.
On 11 November 1988 the mortgage on the E property was discharged.
In or about 1989 the parties gave $1,400 to the husband’s grandmother in Cyprus to assist her after she suffered a stroke.
In October 1989 the wife ceased paid employment prior to the birth of the parties’ child.
In December 1989 the parties’ child was born and is currently 20 years of age.
In 1992 the C property was rented out.
In September 2004 the parties separated, after 16 years and 3 months of marital cohabitation.
On 21 October 2005 the husband commenced proceedings for final property settlement in the Family Court of Australia, and he later sought orders for spousal maintenance.
On 2 June 2008 the wife’s father sought leave to intervene in the proceedings.
On 10 August 2009 the matter commenced to be heard before me over five days. On that date an application was made in relation to the production of documents under subpoena, and I delivered reasons orally in relation to that issue. At the conclusion of that hearing I reserved my judgment but re-listed the matter on 13 November 2009 to permit the hearing of submissions providing additional evidence, which was sought by me.
On 12 November 2009 the husband filed written submissions.
On 26 November 2009 I made orders, inter alia, that within seven days the parties appoint an employee of M Valuers to provide a valuation of the life estate and interest in remainder of the P property.
I had come to the conclusion that a possible result of these proceedings based on the evidence given might be that the wife held her interest in the property of which, but for a recent transfer to her father, she had been the registered proprietor on trust for her father for life and on his death to the benefit of herself and her brother equally. I noted that, if I so found, I had no evidence of the value of an estate in remainder and in its absence would not be able to do justice between the parties. I was informed that such a valuation could be rapidly obtained because the parties had retained an expert as to the valuation and the other information necessary was available and I confidently looked forward to the timely receipt of that evidence.
That hope was unfortunately misplaced as the parties became embroiled in a dispute as to the valuation, a dispute which continued for some time. I made orders and directions as to consultations between each of the experts that the parties sought to rely on and, as a result, a series of exchanges took place. Ultimately an agreement was procured that, based on the valuation tendered at the trial of an estate in fee simple (the valuation on which the calculation had been agreed to be made) the wife’s interest in the estate in remainder was valued at $909,853.
The real estate valuer would not sign off on the valuation because it was based on a value of the property which was out of date, and that being the valuation on which I was asked to rely and which was agreed to be used for the purpose of trial and was agreed to be the basis of the further valuation. Notwithstanding the valuer’s reticence to put his name to the document, that valuer nonetheless yielded to the other expert’s methodology.

The Issues

The principal issues for determination in this matter are:
a)What, if any, beneficial interest did the wife have in the property she transferred to her father, the intervener.
b)Was her transfer of her interest as a registered owner of the property jointly with her brother to her father a transaction which meets the criteria of section 106B of the Act or section 37A of the Conveyancing Act 1919 (NSW).
c)If the transaction did meet those criteria should the Court set aside the transfer and make an order for the re-transfer of the property. Alternatively, is it open to the Court to provide a just and equitable solution to the claims of each of the husband and wife against the other without the need to do so and in that event should it refrain from doing so.
d)Is there any and, if so, what amount owing to the father in respect of the property owned by the husband and the wife and purchased from the wife’s father.
e)What is the property of the parties or either of them, including property which has been disposed of.
f)What is a just and equitable re-distribution of that property having regard to the contributions made by each of the parties as described in section 79 of the Act.
g)What adjustment, if any, to a distribution reflecting the contributions enumerated otherwise in Section 79 of the Act should be made on the basis of a consideration of the provisions of section 75(2).
h)Is such a result arising from the considerations above just and equitable and, if not, what further adjustment should be made
i)What orders should be made to give effect to that decision.

Property matters

The first step I must undertake is to identify the property of the parties or either of them available for division between them.
The E property was the subject of a valuation by Mr R dated 18 April 2007. The vacant land was given a value of $40,000 as at 29 January 1988 and a value of $550,000 was given to the home at the valuation date.
In addition, the H property was also valued by Mr R and dated 18 April 2007, and a value of $675,000 was given as at 1 September 2002 and $965,000 as at the valuation date.
In relation to the C property a value was ascribed by Mr R on 18 April 2007 of $120,000 as at 29 January 1988 and a value of $350,000 was given as at the valuation date.
A valuation of P property was prepared by Mr L and dated 19 April 2007 in which the value of the P property at 22 April 2005 was said to be $3.5 million, and $3 million at the valuation date. This land was formerly Lot 5 and part of Lot 4, and the wife annexes two property searches dated 29 August 2006 to her affidavit filed 12 August 2008, which show the cancellation of the old title reference and the creation of the new one.
Subsequent to the completion of that report it was requested in December 2009 that the single expert complete a report valuing a life interest of the father based on the value of the property in the report of 17 April 2007.
It was further requested that the single expert complete a further valuation that being of an estate in remainder of the P property owned by the wife, having regard to the life estate of the intervener and on the assumption of the wife and her brother each having a half interest in that estate in remainder.
A single expert was instructed to determine the value of a life estate of the intervener in the P property, and an estate in remainder of the wife as at 1 February 2010 but by consent of the parties based on the valuation previously procured for the purpose of the hearing. These were to be calculated on the assumption that the wife has a half share in the estate in the remainder and the wife’s brother has an equal interest in the estate in remainder.
In consideration of the intervener’s age, the single expert determined a life expectancy of 11.2 years as at 1 February 2010. In regard to the land the single expert’s report included a determination as to current fair market rent, from which an estimate of statutory charges was deducted from the gross annual rent followed by an allowance for a vacancy factor. This resulted in a determination of a current net annual passing rent of $121,850 being attainable on an open market basis.
In consideration of these factors, a discount factor taking into account market risk and returns was applied, and a letting-up allowance and a sum representing agent’s fees were further deducted. This resulted in a current value of $713,000 and an adopted value of $710,000.
Further in issue is the value of the estate in remainder of the wife, the calculation of which is the present value of a future income deferred 11.2 years and discounted to reflect associated risk. The present value was calculated by the single expert to be $791,931 and a value of $790,000 was adopted, and thus the wife’s half interest is assessed at $395,000.
The conclusions of that report were not accepted by the husband and subsequently, a further expert, Mr S, prepared a report. In that further report the expert noted that Mr L followed a very different approach, including in relation to life expectancy. Mr S reported estimates as at 1 February 2010 of the intervener’s life interest and the remainder interests in the P property. The report differed in its conclusions from that of Mr L the single expert. The value of the intervener’s life tenancy was said by Mr S to be $1,180,296 and the value of the wife’s brother and the wife’s remainderman interest at $909,853 each. This was the valuation prepared on an ultimately conceded methodology.

The Balance Sheet

During submissions on 13 November 2009 counsel for the husband provided the Court with a balance sheet set out hereunder for its consideration:

Assets	($)
· The [E] Property (h)	550,000
· The [C] property (w)	350,000
· 50% interest in the [H] property (joint)	482,500
· Disputed - 50% interest in the [P] properties (w)	1,500,000
· 1988 Volvo motor vehicle (w)	3,000
· Toyota motor vehicle (h)	20,000
· Household contents (w)	15,000
· IAG shares (w)	3,850
· Cheques held but not cashed (w)	3,000
· Interest in CBUS Superannuation Fund (h)	52,815
Add back Legals paid including funds held in trust (h) ¹	57,824
Add back Legals paid (w)	NK
Total Property (excluding superannuation)	$2,985,174
Total Property (including superannuation)	$3,037,989

Liabilities	($)
· Disputed – Alleged debt to wife’s father on [H] property plus interest accruing since 28 October 2005 (joint)	225,642
· NAB mortgage in respect of purchase of [H] property but secured on the [E] property (joint)	17,542
· NAB personal loan for legal fees (h)	57,824
Total liabilities (excluding disputed debt)	$75,366
Total liabilities (including disputed debt)	$301,008

1.The husband’s paid funds including funds trust total $211,734.50 but $57,824 is conceded as the addback figure – the balance having been funded from income: Chorn v Hopkins (2004) FLC 93-204.

In relation to the alleged ownership by the wife of the property at P I find that prior to the transfer the wife did not have a beneficial interest in fee simple jointly with her brother. I accept the evidence of the husband in relation to the conversation he had with his father-in-law. I find on the evidence that it was more probable than not that the intervener intended that he would have the use of the property for his life but that on his death his daughter and his son should receive the beneficial ownership of the property. I reject the assertion that there was any limitation otherwise in relation to the property.
Apart from the transfer undertaken well after the litigation was commenced and at a time when the intervener knew of the claim being made, the parties acted at all times as if that was their respective interests in the land. The intervener paid the outgoings on the property and used it for his purposes and the wife and her brother derived no immediate benefit from it.
It seems to me that the words of the intervener as reported by the husband, which I accept were said, clearly indicated an intention that the property was to be held by the wife and her brother for his benefit during his life and that on his death they would receive the property. Accordingly, I find that the wife has an estate in remainder in the property and accept the value procured for such estate.
In determining the entitlement of the husband to such estate it is clear that he made no direct contribution to this estate in remainder and that it was in fact a gift at the hands of the intervener and as such the whole of the estate was acquired by contribution made on behalf of the wife. In assessing a just and equitable distribution of the property of the parties or either of them I will take those matters into account but I cannot ignore the existence of the estate for the purpose of considerations under the provisions of section 75(2).
It is my intention to take into account, in determining the relative financial positions of each party, the estate found to be held by the wife in the property. No order is sought by her to reverse the transfer in that event and it is not my intention to make such an order since it is possible to do justice between the husband and wife by orders which can be made otherwise.
In relation to the H property I again accept the evidence of the husband that the intervener sold the property to his son and his daughter-in-law and the wife and the husband at undervalue. I find that it is more probable than not that the full purchase price was not that stipulated in the contract and that the contract price was expressed in order that it might accord with the value of the property. I accept that the reduced purchase price was paid and I accept the evidence of the husband and prefer it on this topic where it conflicts with the evidence of the wife and her father.
In that regard, in determining the entitlement of the husband in these proceedings I have to, and will, take into account that the undervalued amount of the property was a contribution made by the wife’s father, the intervener. As such it must be regarded as a contribution made on behalf of the wife to that property and taken into account accordingly in determining a just and equitable distribution of the property of the parties or either of them.

In relation to the husband’s legal fees it appears that an add back is conceded in the sum referred to and a loan exists for the same sum and purpose. Since they equal each other it is not intended to include either figure in the balance sheet.
I find that the assets and liabilities of the parties are:

Assets	($)
· Estate in remainder of the wife of P property (w)	909,853
· The E Property (h)	550,000
· The C property (w)	350,000
· 50% interest in H property (joint)	482,500
· 1988 Volvo motor vehicle (w)	3,000
· Toyota motor vehicle (h)	20,000
· Household contents (w)	15,000
· IAG shares (w)	3,850
· Cheques held but not cashed (w)	3,000
· Interest in CBUS Superannuation Fund (h)	52,815
Total Assets (including superannuation)	$2,390,018

Liabilities	($)
· NAB mortgage in respect of purchase of H property but secured on the E property (joint)	17,542
Total Liabilities	$17,542
Nett Asset Pool (inclusive of superannuation)	$2,372,476

Section 79(4) contributions

Initial Contributions

At the date of the marriage the wife had a property at C which she had purchased on 18 July 1980 for $50,000 and which she says in effect was a gift from her father as he paid the whole of the purchase price. In addition, the wife had a Holden Commodore Sedan for which she received approximately $4,800 shortly after the marriage when the car was written off. There is an issue between the parties as to the extent, if any, of the wife’s savings at the date of the marriage. The wife asserts that she had savings of $96,000 and the husband says that she had no savings. No documentary evidence was before the Court as to the wife’s savings at the commencement of the marriage. In these circumstances I do not find the wife had such savings as she alleges. The wife also asserts that she had manchester and other items and rental income from the property that she owned at C.
The husband asserts that at the date of the marriage he had the property at

E which he purchased on 19 June 1987 for $37,500, and in relation to which he borrowed $17,000 from the St George Building Society. At the time of the marriage the husband asserts in his written submissions that it was subject to a mortgage of $11,635 which was reduced by $6,900 subsequent to the marriage before being discharged on 11 November 1988. In addition, the husband had a Volvo motor vehicle and personal effects. He also owned a Commodore sedan motor vehicle. I accept this evidence.
At the date of the marriage the wife was employed as an Administrative Assistant and the husband was employed as a Storeman.

Contributions to date of separation

The husband asserts, and I accept, that during approximately the first four months of the marriage the parties lived with the husband’s parents. In addition, the wife asserts, and I accept, that she and the husband lived with her parents in about 1993-1994 during the construction of the E property, and that they were not required to contribute financially to the household.
The wife asserts that until 2004 her father paid the rates on the property at C and that the husband, wife and intervener cleaned, repaired and re-decorated the C property. The husband asserts that in May 1988 the parties entered into occupation of the C property, however the wife asserts that they commenced to occupy that property in 1989. That property was renovated in 1991 and the kitchen was replaced and the property was leased by the wife, upon the parties moving into the E property. I am unable to resolve the issue of when occupation commenced.
In his written summary of argument the husband asserted he was in paid employment and contributed the whole of his income to the acquisition, maintenance and conservation of the parties’ property and to the welfare of the family. I accept that this was so.
During 1989 the husband was retrenched and remained unemployed for a period, the wife says for about a year. The husband says that in 1990 he received a redundancy payment of $20,000, which he says was utilised to meet construction costs in relation to the E property, and I so find.
The husband obtained an owner builder’s license and contends that in 1989 he designed a two story property to be constructed on vacant land at E, and which became the matrimonial home. The building work at E commenced in 1990 at a cost of $230,000, which the husband asserts was funded from his wages, redundancy payment, rental income from the C property and a $60,000 loan from the State Bank of NSW and which was repaid in June 1997. I accept this evidence and so find.
The husband and wife each say that the intervener provided assistance in relation to the construction of the E property, namely the purchase of building materials and labour. The wife asserts that the assistance provided by the intervener included the purchase of materials for the project. The husband sets out in detail the work he undertook in relation to designing and constructing the property, and the assistance provided by his father, particularly in relation to painting work. The house was completed in 1991, and in 1992 the husband and wife moved out of the C property and occupied the home at E. Following that time other building works were undertaken on the property.
In relation to the C property, the husband said he undertook improvements to the property and maintenance work, including extensive cleaning of the property following the departure of the tenants. In addition, the husband says he undertook work in respect of the property of the wife’s father.
In 1990 the husband commenced work in the intervener’s business,

Bianca Building, and continued in that employment until 2002; the wife says 2003. The husband’s evidence is that he worked six days per week, including eight hours overtime on Saturday. However, the wife says, and the intervener agrees, that the intervener did 90 per cent of the work in the business. The husband says that the costs of the building were funded from the loan from the State Bank of New South Wales, his wages and a redundancy payment he received. From 2002 the husband was employed as a store-person at another company.
In addition to that employment, the husband sets out a number of other contributions which he asserts he made to the intervener’s business and property for which he was not paid. These contributions were said to have included undertaking job estimates, preparing and writing quotations, arranging insurance policies for his private and company investment properties and organising and maintaining the company’s files, invoices and records. Furthermore, the husband contends that he undertook significant maintenance work on the intervener’s home, which the wife denies, and further contends that he undertook maintenance on his some 18 different investment properties, and for which he was not paid on the weekends. In relation to the intervener’s property, the husband says he also painted the home, mowed and maintained the lawn and garden and maintained the pool for a period of two years. The husband asserted that the wife also undertook work for her father, including assisting with domestic duties when her mother became ill.
Furthermore, the husband said he spent a large number of hours designing a two-storey building for the intervener, and which included the steps in having the plans and development proposal approved by the Council and which building plans were said by him to have been a major selling point when the property was eventually sold. The wife denies that the husband undertook that design work or that he was involved in the property’s sale as he alleges.
It is the husband’s evidence that from 1988 to 1989 the wife was employed on a casual basis as a clerk, and that following the birth of the parties’ child she did not return to paid employment. However, he asserts that throughout the marriage she worked for her father as a bookkeeper and clerk and was involved in the management of her father’s property investments. In her affidavit material the wife denies that she managed her father’s properties.
The wife’s father asserts that he purchased a property at Lot 5, P and says he was advised by his bank manager that if he borrowed money to purchase it then he would have to have his account managed other than by his local bank manager. He was informed, he says, that if the property was purchased in the name of his children then the account could remain locally.
The wife asserts that in February 1996 the intervener said to her words to the following effect:
I want to buy a property at [P]. I would like you to buy it in your name. It will help get finance for it. The land is not for you and [the wife’s brother]. I need this land for my business.
Land at P was subsequently purchased in the name of the wife and her brother for $280,000. The wife asserts that those funds were provided by an advance of $267,755 from the Commonwealth Bank and the balance was her father’s savings.
The intervener sets out extensive evidence of the work he asserts he undertook on the property including the removal of rubbish debris, soil and car parts and that he constructed a fence on the property. The husband alleges a conversation took place with intervener in the following terms:
Husband:Why did you put the [P] property in [the wife] and [the wife’s brother’s] name?
Intervener:It’s for you children, when I die, that is going to be yours anyway, so why not put it in your name now? That way you don’t have to worry about changing it over when I die.
I accept that this conversation took place, in those or similar terms.
During the husband’s oral evidence he says he had a conversation with the intervener and asked him why he transferred the P property into the names of the wife and her brother, and that the intervener replied:
It’s for you children. So when I die it’s going to be yours anyway, so why not put it in your names now, so therefore you won’t have to worry about transferring it over to your names when I die.
He says he took “the children” to mean that he, as part of the family, was included in that reference.
The wife denied that a specific conversation in relation to the P property took place in those terms. Rather, the wife’s oral evidence was that the intervener said to her, “When I die whatever I’ve got in property is yours. Whatever is left.” She further asserts that reference was not in relation to a specific property but rather was about a number of properties.
By 2002 the husband said he had accumulated savings of $43,031.39. His evidence during cross-examination by the wife’s counsel was that he had $6,000 cash kept in envelopes in the encasing of a downpipe in the laundry and in two biscuit tins under the stove, in a false bottom in the second drawer. His evidence is that the wife was aware of the existence of these amounts of cash as the money was counted in her presence by him. The husband further asserts that these monies formed part of the $75,000 which the husband asserts was given to the wife’s father.
The wife agreed that at or about the time of the purchase of Lot 5 P she guaranteed the borrowings of her mother and the intervener up to an amount of $1.45 million. Exhibit 10 comprises three letters, including a letter to the wife and her brother from the Commonwealth Bank approving a loan – in relation to the wife over the C property and in relation to the wife and her brother over the P property. The wife accepted that the purchase price for Lot 5 P was some $280,000, and that the purchase price for Lot 4 P was some $350,000. The one-half value of the P property for the purposes of the trial was agreed at $1.5 million. In addition, the intervener executed a guarantee and mortgage documents in relation to the properties owned by him, he asserts so as to finance the balance of the purchase price.
In 1999 the intervener paid a five per cent deposit on adjoining property at

P, being the property known as Lot 4 P. That property was acquired in the joint names of the wife and her brother, and which was said to have occurred in January 2000. Although not recorded on the Title it is asserted, and I accept, that the intervener provided all the funds for the purchase of that property.
The husband and the wife established a joint term deposit in the sum of $24,000 from accumulated savings.
In 2001 the intervener gave the husband a Nissan Navarra motor vehicle and the wife asserts that her mother gifted $6,000 to her and the husband in April 2001.
The wife asserts that the husband withdrew $30,000 from a trust account of the parties’ son and did not account for it. The husband denies having removed those monies.
The husband asserts that in November 2001 the parties withdrew $17,100 together with $24,735.39 from the term deposit to the Colonial First State Management Account Fund.
In 2002 the husband commenced employment as a store person at a new company and in that year discussed the purchase of an investment property. The wife asserts that in 2003 the husband resigned from his employment with Bianca Building and thereafter commenced to work as a store person.
In 2004 the husband and the wife purchased jointly a property at

H (“the H property”) with her brother and sister-in-law. The husband said that the purchase price of this property was $400,000 although the contract price was expressed as $620,000. The vendor was the intervener and the husband says it was agreed that as between the purchasers, namely the wife, the husband and the wife’s brother and sister-in-law and the vendor that the purchase price was $400,000. It is asserted that the reduction in the purchase price was at the urging of the wife’s mother.
In relation to the H property, in his oral evidence the husband said he agreed that the property was worth $600,000 and that they would purchase it for $400,000. However, the wife and her brother maintained that the purchase price was $620,000. It is the husband’s evidence that part of the funds used to purchase the H property comprised $75,000 of cash savings in addition to further savings held in the Colonial State Bank.
The intervener asserts that the purchase price was $620,000 as described in the contract and the wife agrees that the half share of her and the husband was $310,000. The husband says that his share was $200,000 on an agreed purchase price of $400,000. It is further asserted by the husband that the sum he was obliged to pay was financed by a loan from the National Australia Bank (“NAB”) in the sum of $80,000, monies from his cheque account with the Colonial State Bank in the sum of $45,000 and cash savings of $75,000. He says that no money was borrowed from the vendor. The wife denies that there were such savings of $75,000.
During the course of the cross-examination the husband set out his evidence as to the circumstances when he says he gave the money to the intervener. The husband says he told the intervener where he had the money and that it could be used towards the payment of the H property, to which he says the intervener replied, “that would be good, I can always use cash.” As a consequence, the husband says he gave him the money on two occasions: an initial amount of $40,000 followed by $35,000, and that at the time the wife’s mother was present. In his oral evidence he further said that the intervener took the money and put it under his sink.
During cross-examination by the husband’s counsel the wife denied that the funds used to purchase the H property were paid in cash but agreed that between 1997 and 2002 cash was kept in the home, comprised of funds received from the husband and wife’s wages and through rental monies and gifts.
In his oral evidence the intervener denied that he kept sums of cash in the laundry at the home and also denied that the husband made two payments totalling $75,000 with the payment being for the purchase of the H property.
The wife asserts that the purchase was funded by a loan from the NAB in the sum of $80,000, monies from the cheque account with the Colonial State Bank of $44,000 and a loan from the wife’s father of $186,332.76. She says that the balance of the purchase price of $44,000 was gifted to the husband and wife by her father.
The intervener says he had discussions with his accountant during which he told him that the husband and wife had purchased one-half of the H property for $310,000 and that they had borrowed $80,000 from the bank and were paying a deposit of $45,000 and that the remainder was being loaned to them by the intervener. The intervener says he requested that his accountant prepare a loan account ledger.
In relation to the H property, the husband says that in 2003 the factory unit was rented and the parties received $120 per week, but that such payments ceased at the end of March 2004. He says he did not receive any rental income from the real estate agent between 23 December 2004 and 12 September 2006. The wife agrees that the property was leased and contends that up until 11 July 2004 the rental payments were applied towards the NAB mortgage.
It is the husband’s evidence that the wife told him that as he had used the intervener’s car for a period of two years after he had ceased working for him, they owed the intervener for insurance, registration, usage and petrol, and to which the husband says he agreed.
It is the wife’s evidence that during 2003 and 2004 the husband took between $20,000 and $30,000 from her bank account, which he did not account for. However, the husband says that the wife withdrew funds from the NAB

re-draw facility, and being the sum of $20,000 at the end of June 2004 and $20,000 at the start of the following month. The husband sets out his evidence as to how the sum of $30,000 was accounted for, including in payment to the wife’s father and the NAB and towards the costs of the parties’ child. The husband asserts that $3,043 was retained by the wife.
Following the parties’ separation the husband says he remained at the E property for two months and then commenced to live with his parents and the wife commenced residing with her father. It is his evidence that the husband and wife each withdrew $2,000 from the NAB Flexi account, which was then closed in October 2004.
As at the date of separation the husband asserts the parties owned the E property, the C property, a 50% share of the H property, and a 50% interest in vacant land at P, in relation to which the husband says the title to the two lots had been consolidated. In addition, the husband asserts the wife had in her possession a Volvo motor vehicle and the contents of the home in addition to IAG shares valued at approximately $3,500. The husband contends that the parties’ liabilities were a mortgage secured on the home for the purchase of the H property and a contingent liability as a consequence of a debt of the wife’s father secured on the C property to the amount of $112,000.
It is the husband’s evidence that during the marriage he usually undertook the cleaning of the E home and says he washed the family’s clothes. In addition he asserts he maintained the garden and maintained the property’s exterior. However, the wife asserts she did the family’s washing, cooked the meals, cleaned the home and was primarily responsible for the care of the parties’ child. It is her evidence that the husband attended to minor household repairs and mowed the lawns.

Contributions post separation

Following the parties’ separation in September 2004 the wife accused the husband of removing her jewellery from the home of her parents and the husband also says he observed items to be missing from the home, including some of his personal items and jewellery. The husband says that following the parties’ separation there was a dispute between them in relation to accounting for money received and paid out during the year.

The husband asserts that following separation he continued to make payments in relation to the former matrimonial home and in reduction of the liability relating to the H property. The husband’s evidence is that in November and December 2004 he met the cost of certain expenses of the parties, including council rates and utility bills. In addition he says he met the costs of the child’s orthodontic expenses and mobile telephone. In February 2005 the husband says he further paid for the child’s orthodontic treatment and his school clothes and in April paid for his internet account and that on 28 February 2006 he paid $500 to the child’s school in reduction of outstanding school fees.
In December 2004 the wife says that in a telephone conversation with the husband he says he did not want the P property and says that on 22 April 2005 she and her brother transferred their interest in Lot 5 P to the intervener. The husband says this transfer was effected for $1. On 31 March 2005 the wife said she registered a Transfer in relation to the H factory property, thus unilaterally severing the joint tenancy.
There was a dispute between the parties in relation to the release of monies held in trust by D Realty, being rental receipts for the parties’ share of the H property. The husband sought orders for the release of the funds in discharge of the mortgage secured on the H property with the balance to be divided equally between the parties and any rent received thereafter to be paid equally to the parties on a monthly basis. The wife did not consent to the release of the monies, other than for the purpose of reducing the monies owing to the wife’s father in respect of the purchase of the H property.
Consent orders were subsequently entered into and provided, inter alia, for the payment of the monies held on trust. Of that sum $6,000 was to be paid to Michael Brown Solicitor to be held by him on the parties’ behalf, to meet the cost of any property valuation expenses and with the balance and continuing rentals less expenses to be divided equally between the husband and wife. The husband’s evidence is that each of the parties received $19,483.31 and he contends that he deposited $14,083.32 into the mortgage account in September 2006 in further reduction of the liability relating to the H property.

Conclusion based on contribution

All in all I assess the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them, including such property which is no longer the property of the parties to the marriage or either of them, to be 73% in favour of the wife and 27% in favour of the husband.

Section 75(2) considerations

Following separation the wife asserts that the parties’ child remained in her care and that she continues to have responsibility for the continued care of the child. However, in his case outline document the husband points out that neither party has the care and control of a minor child of the marriage. The child is currently 21 years of age.
In relation to each party’s income earning capacity, the wife contends that she does not enjoy good health and that her employment prospects are limited, whilst the husband is in regular employment. She further says that at the time of the hearing she had not participated in the workforce since the birth of the parties’ child and that her workplace skills in her area of previous employment are now out of date.
The husband asserts he has a modest income earning capacity and that the wife’s capacity in that regard is also limited, but she has assisted her father in his business and has her family’s wealth available to her as a financial resource. In addition the wife has the interest in remainder referred to above.
In addition, the husband asserts that he was exposed to asbestos and asbestos fibres whilst undertaking building work for the intervener in 2001. As a consequence, he says he has developed a phobia of asbestos and a fear of developing asbestosis to the extent that he was not able to continue working in the building industry as he experienced overwhelming fear in relation to potential asbestos exposure and that he sought treatment in relation to that, including consultations at a Psychology Health Clinic which were unsuccessful in reducing his anxiety and phobia.

Conclusion on section 75(2)

For all the reasons referred to above I consider that having regard to the financial positions of each of the parties that there are factors which require an adjustment to the division of property in favour of the husband and I find that that amount should be approximately 6%.

Overall division of assets

The above determination will see the wife receive 67% of the parties’ assets and the husband receive 33%.

Just and equitable

The division of assets would see the wife receive $1,589,558.92 worth of nett assets and the husband receive $782,917.08 worth of assets.
In the circumstances of this case I determine that result to be just and equitable.

Orders which should be made

I propose orders which will give effect to the following division.
The wife will receive:

Assets	($)
· Estate in remainder of the wife of Lot 1 P (w)	909,853
· 50% interest in the H property (joint)	482,500
· C property (w)	350,000
· 1988 Volvo motor vehicle (w)	3,000
· household contents (w)	15,000
· IAG shares (w)	3,850
· cheques held but not cashed (w)	3,000
Total Assets	$1,767,203
Liabilities
· NAB mortgage in respect of purchase of H property but secured on the E property (joint)	17,542
· Cash payment from the wife to the husband	160,102.08
Total Liabilities	$177,644.08
Net Assets (including superannuation)	$1,589,558.92

The husband will receive:

Assets	($)
· E Property (h)	550,000
· Toyota motor vehicle (h)	20,000
· Interest in CBUS Superannuation Fund (h)	52,815
· Cash payment from wife to the husband	160,102.08
Total Assets (including superannuation)	782,917.08
Liabilities
· Nil	0
Total Liabilities	$0
Net Assets (including superannuation)	$782,917.08

Costs

I note that on 10 August 2009 an application was made in relation to the production of documents under subpoena from Brown Family Lawyers. Leave to inspect the documents was granted and a short ex tempore Judgment was delivered. It was noted that the costs were to be dealt with at the end of the hearing.
Should there be any application for an order for costs then any applicant party must file and serve within 28 days of the orders herein made any such application that they might wish to make. Any application is to be accompanied by any affidavit material setting forth any evidence in chief on which they wish to rely together with any written submission in support of that application. Any respondent party must file within a further 14 days a response, together with a written submission in support of that response, and any affidavit material, setting forth any evidence in chief on which they wish to rely. Any applicant will have a further 7 days in which to file any submission or evidence in reply.
In the event that no application is filed within the time limit there will be no order as to costs.

I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 19 January 2011.

Associate:

Date: 19 January 2011

[2011] FamCA 12

19 January 2011

Key Legal Topics

Areas of Law

Family Law

Property Law

Equity & Trusts

Legal Concepts

Remedies

Injunction

Costs

Jurisdiction