Crowley and Pappas and Anor
[2014] FamCA 241
FAMILY COURT OF AUSTRALIA
| CROWLEY & PAPPAS AND ANOR | [2014] FamCA 241 |
FAMILY LAW – PROPERTY SETTLEMENT – Application by applicant pursuant to s 106B to set aside loan agreement made 17 March 2011 between the first respondent and his mother and to set aside mortgage executed and registered in relation to that loan agreement and consequential orders.
FAMILY LAW – PROPERTY SETTLEMENT - Adjustment of property between de facto partners which essentially determines whether the outstanding debts of the parties are carried by either the mother of the first respondent or the parents of the applicant – the first respondent is a bankrupt however there were issues of property in relation to splitting of superannuation funds.
Family Law Act 1975 (Cth)
Biltoff and Biltoff (1995) FLC 93-614
Gould and Gould; Swire Investments Ltd (1993) FLC 92-434
Halabi and Artillaga & Ors (1994) FLC 92-470
Trustee of the property of G Lemnos, a bankrupt and Lemnos and Lemnos (2009) FLC 93-394
| APPLICANT: | Mr Crowley |
| FIRST RESPONDENT: | Mr Pappas |
| SECOND RESPONDENT: | Mrs Pappas |
| FILE NUMBER: | TVC | 1044 | of | 2011 |
| DATE DELIVERED: | 15 April 2014 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Townsville |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 17, 18 & 19 March 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Keegan |
| SOLICITOR FOR THE APPLICANT: | Ross Lawyers |
| COUNSEL FOR THE 1ST RESPONDENT: | In person |
| SOLICITOR FOR THE 1ST RESPONDENT: | In person |
| COUNSEL FOR THE 2ND RESPONDENT: | Mr Hibble |
| SOLICITOR FOR THE 2ND RESPONDENT: | Kevin O’Kane & Co |
Orders
Pursuant to s 106B(1) of the Family Law Act 1975 (Cth) (‘the Act’) the loan agreement executed on or about 17 March 2011 (“the loan agreement”) between Mrs Pappas (“the second respondent”) and Mr Pappas (“the first respondent”) relating to an alleged loan of three hundred and eight six thousand dollars ($386,000) be set aside.
Consequential orders following Order 1:-
a.The mortgage between first respondent as mortgagor and the second respondent as mortgagee dated 17 March 2011 and 4 April 2011 (“the mortgage”) secured over the property 2 P Street (Lot … on RP… in the county of … Parish of … title reference …) (“P Street”) be set aside.
b.Within twenty one (21) days from the date of this order the first respondent (and/or the Trustee of his Bankrupt Estate) and the second respondent sign all documents and all authorities necessary to cause the mortgage to be discharged.
By way of property settlement it is declared and ordered that the first respondent and Mr Crowley (“the Applicant”) are the owners of P Street in equal shares as tenants in common (subject to the first mortgage to the Westpac Banking Corporation).
Consequential orders following Order 3:-
a.In the event that the Westpac Banking Corporation continue exercising its power of sale as first mortgagee in possession to sell P Street; the applicant and first respondent (and/or the Trustee of his Bankrupt Estate) shall within twenty one (21) days of the date of this order sign all documents and all authorities to cause the net proceeds of sale of P Street to be paid as to one half to the trustee of the Bankrupt Estate of the first respondent and as to the other one half to the applicant.
b.The applicant shall in turn within twenty eight (28) days of the date of this order sign all documents and all authorities to cause his one half share of the net proceeds of sale of P Street to be paid in the following order and preference against the business debts of the former bookshop business operated by the applicant and/or first respondent (secured by guarantees of the parents of the applicant):-
i.to the Westpac Visa Card account with numbers ending …115 (with liability of about $22,822.52), and then;
ii.to Westpac Banking Corporation overdraft cheque account with numbers ending in …596 (with a liability of about $20,138.90) and then;
iii.to Westpac Banking Corporation business loan account with numbers ending …626 (with a liability of about $137,103.09), and then;
iv.if there are any remaining funds, such balance to be paid to the applicant.
c.In the event that the mortgagee sale of P Street does not proceed then leave is given to either the applicant, the first respondent or the trustee of the Bankrupt Estate of the first respondent (if such trustee seeks to intervene) to apply for mechanical orders to enable and facilitate the sale of P Street and consequential payment of the proceeds of sale in accordance with the parties obligations to the first mortgagee (and or its successor in title) and in accordance with these consequential orders as between the applicant and first respondent. Such leave to be available for six (6) months from the date of this order or such longer period as is allowed by further order made within that six (6) month period.
It is declared that:-
a.The Telstra Shares with a value of about $1,441 (“the shares”) owned by the applicant and first respondent are held as tenants in common in equal shares.
b.Consequently the applicant is appointed trustee for the sale of such Telstra shares.
c.The applicant shall do all acts and sign all documents to cause the shares to be sold at market value within thirty (30) days of the date of this order and to sign all documents and all authorities to cause the net proceeds of sale of the shares to be paid as to one half to the trustee of the Bankrupt Estate of the first respondent and the other half to the applicant.
As between the parties, the applicant is solely entitled (to the exclusion of the first respondent) to the household contents in his possession together with the applicant’s BT Superannuation entitlements of about $68,000.
As between the parties, the first respondent is solely entitled (to the exclusion of the applicant) to the household contents, his Ford motor vehicle in his possession together with the first respondent’s BT Superannuation entitlements of about $39,369.
In addition to the leave provided elsewhere in this order; leave is given to each party and/or the legal representative of such party to apply in relation to the mechanics of this order and/or procedural orders, such leave be available for a period of three (3) months from the date of this order.
Following the expiration of the appeal period, all subpoenaed documents, except for the parties’ case summaries shall be returned to the person or institutions from where they emanated and all exhibits to be returned to the person or persons who attended same.
All extant applications (except costs) as are not dealt with by these orders are dismissed. Any costs applications are to be dealt with in accordance with the Family Law Rules 2004.
THE COURT NOTES
Pursuant to s 90SM(14) of the Act, that after the commencement of these proceedings the first respondent became a bankrupt and the Trustee in Bankruptcy for the first respondent has been notified of these proceedings and has determined not to participate in these proceedings.
Pursuant to s 90SM(15) of the Act leave was and is granted, if necessary, for the first respondent to make submissions to the Court in connection with any vested bankruptcy property in relation to that bankrupt party.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Crowley & Pappas and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: TVC 1044 of 2011
| Mr Crowley |
Applicant
And
| Mr Pappas And Mrs Pappas |
Second Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Mr Crowley (“Crowley”) made an application for property orders pursuant to Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”) claiming an alteration of property interests following the breakdown of the de facto relationship between he and Mr Pappas (“Pappas”) who is the first respondent.
Pappas disputed that there was the de facto relationship as claimed by Crowley. This threshold issue was determined by Tree J on 11 October 2013 when he made a declaration in the following terms:-[1]
Pursuant to s 90RD of the Family Law Act 1975 (Cth) it is declared that a de facto relationship (as defined in s 4AA of the Act) existed between the parties [[Pappas] and [Crowley] between March 1987 and 15 January 2011.
[1] Crowley & Pappas [2013] FamCA 783.
No application was made to vary or set aside that declaration or to make an alternate declaration pursuant to s 90RH of the Act. In the absence of such an application the declaration of 11 October 2013 has the same effect as a judgment of the Court[2] and the parties are bound by it.
[2] Section 90RE of the Act.
On 17 March 2011, shortly after Pappas and Crowley separated, Pappas and his mother Mrs Pappas executed a loan agreement and mortgage (“the loan agreement” and “the mortgage”). The mortgage (which became a registered second mortgage behind a first mortgage to Westpac Banking Corporation) secured an alleged loan over property registered in the name of Pappas, namely 2 P Street, T (“P Street”). Crowley seeks to have the loan agreement and mortgage set aside under s 106B of the Act. Mrs Pappas has intervened in these proceedings asserting that the agreement and mortgage ought not to be set aside. She was represented at the hearing by counsel.
On 22 October 2012 Pappas made application by way of a Debtors Petition to become a bankrupt. As and from that date he was a bankrupt and his non superannuation property vested in his Trustee in Bankruptcy. That Trustee has decided not to participate in these proceedings.
At the commencement of the hearing, the issue of Pappas’s bankruptcy was the subject of discussion between counsel for the applicant, counsel for Mrs Pappas and Pappas (who was representing himself).
Pappas sought leave to make submissions in these proceedings pursuant to s 79(12) of the Act. Clearly that was a misconstrued application as it appears that the Trustee was provided with notice of the proceedings and has not participated in these proceedings. In any event the application ought to have been made under s 90SM(18) and (19). If such leave was needed it was granted.
THE ISSUES
In relation to the non-superannuation assets, the heart of the dispute between the parties was the priority of debts against the relatively meagre pool of property of the parties that being primarily any net proceeds from the sale of P Street.
On the one hand there are business debts due to Westpac Banking Corporation of Crowley and Pappas totalling about $184,603. These debts arose from a retail business of Pappas and Crowley. These liabilities are secured by the personal guarantees of both Crowley and Pappas, together with guarantees provided by Mr and Ms C, the parents of Crowley (“the parents”). The parents in turn secured their guarantees by mortgage over their home. Crowley is endeavouring to have any proceeds from the sale of P Street due to either he or Pappas paid against these liabilities, so as to reduce the financial exposure of the parents.
Mrs Pappas, on the other hand, alleges she lent a considerable amount of money to Pappas both before and after separation. Both she and Pappas are seeking that any proceeds of sale of P Street due to either he or Crowley be paid to Mrs Pappas. If the mortgage over P Street is not set aside its existence extinguishes any equity Crowley and Pappas may have in that property.
The added layer of complexity to the circumstances of the parties and the parents is the bankruptcy of Pappas.
The particular issues were:-
a)Whether Pappas should be permitted to participate in these property proceedings.
b)Whether the mortgage and loan agreement between Pappas and Mrs Pappas should be set aside.
c)If so, how and what is the legal and equitable interest in property (including superannuation property) available for adjustment and/or alteration as between Crowley, Pappas and the Trustee of the bankrupt estate of Pappas.
d)Whether there should be a splitting order in respect of Pappas’s superannuation entitlements.
THE ORDERS SOUGHT
Crowley sought orders that:-
a)The loan agreement and the mortgage be set aside pursuant to s 106B of the Act.
b)There be an order to the effect that 100 per cent of the superannuation entitlements of Pappas be split in favour of Crowley.
c)There be an adjustment of property to the effect that Crowley receives or has transferred to him from Pappas:-
i)the whole of Pappas’s equity in P Street, if any, to apply to the debt due to the parents,
ii)the furniture and Ford motor car (allowed by Pappas’s Trustee in Bankruptcy be retrained by him), and
iii)Pappas’s share of the jointly owned Telstra Shares with a value of about $1,441.
Pappas sought orders that he be permitted to retain the car and furniture not taken by his Trustee in Bankruptcy and that there be no superannuation split. He opposed the application to set aside the loan agreement and the mortgage. He could make no meaningful submissions in relation to other property, namely the Telstra Shares as his interest in that property has vested in his Trustee in Bankruptcy.
Mrs Pappas sought orders that the application of Crowley, insofar as it related to her mortgage over P Street and the veracity of the loan agreement be dismissed, that Crowley and/or Pappas withdraw any caveat which either had caused to be registered on the title of P Street and an order for costs.
BACKGROUND
Crowley and Pappas are both aged 54. They commenced a de facto relationship in March 1987 and that relationship broke down as a result of their separation on 15 January 2011. As a consequence this Court has jurisdiction to determine the property issues between the parties.
Mrs Pappas is Pappas’s mother. She is aged 79 and is in poor health. She asserts, and it is not in dispute, that she advanced to Pappas $190,000 between December 2010 and July 2012.[3] That annexure did not include the final payment of $50,000 made to Pappas.[4]
[3] Affidavit Mrs Pappas filed 21 June 2013 annexure FP3.
[4] Ibid at paragraph 32.
The nature of her alleged earlier advances is in issue as to whether they are secured loans, unsecured loans or advances by way of gift to Pappas. The details of those amounts and the recent loans are set out in the affidavit of Mrs Pappas filed 21 June 2013. From the evidence of Mrs Pappas and the evidence of Pappas (the evidence of whom is significantly compromised) I am satisfied that the advances made by Mrs Pappas to Pappas from December 2010 were loans. Given the circumstance and determinations made by me elsewhere in these reasons, such loans are unsecured.
The recent advance made by Mrs Pappas to Pappas in December 2010 was an amount of $20,000 and it was an unsecured loan. This sum was used to reduce arrears of rent in the business operated by Crowley and Pappas through their corporate structures.
The remaining subsequent loans appeared to have been applied by Pappas in payment of legal fees and perhaps living expenses. Pappas did not provide receipts nor did he provide accounts in relation to those fees.
In addition to these loans totalling $190,000, Mrs Pappas claims there are debts outstanding to her by her son of about $161,000. She says these loans had been made by her to Pappas over many years. There was no issue that the sum of either $10,000 or $20,000 had been advanced to Pappas in about March 1988, however, the evidence of Pappas was that that debt was repaid and Mrs Pappas had no recollection as to whether it was repaid or not. As such I have treated it as paid and I have had regard to that loan in terms of contribution.
The second grouping of loans was an amount of about $50,000 which Mrs Pappas said she paid towards the medical expenses of Pappas in 1992 when he suffered a stroke. It was not in issue that no claim was made for those alleged loans until March 2011. I did not accept that these sums were loans for which Pappas was liable, they were funds advanced to Pappas to which I have had regard in terms of contribution
The remainder of that amount namely $111,000 or $121,000 were assertions of advances made by the second respondent to Pappas over the years but without any detail or particularisation and there was no objective support in relation to that material. I have no doubt that from time to time the second respondent provided financial assistance to Pappas, however, given the findings elsewhere in these reasons, I do not accept, on the evidence before me, that they could be treated as loans. I have had regard to the financial assistance provided by Mrs Pappas in terms of contribution.
At the time Crowley and Pappas commenced their relationship in March 1987 Crowley was employed full time as a financial services officer and remained in that employment until 1992. Pappas held sales positions with a number of companies.
In February/March 1988 Mrs Pappas and her late husband sold their house at SS to Pappas. There was an issue as to the consideration paid. Pappas asserted that the property was sold at far less than its market value, although no retrospective evidence as to the value of the property was provided. It was not in issue that Pappas paid a deposit of $100,000 from his savings at that time, and he borrowed $60,000 from Westpac. At that time, or soon afterwards, he borrowed $10,000 or $20,000 from Mrs Pappas and perhaps his late father. It is clear that Pappas paid between $160,000 and $170,000 for that property. The $10,000 or $20,000 loan was paid off over the following years. I am satisfied that this repayment was by way of a joint contribution by both Crowley and Pappas.
Crowley and Pappas lived together in SS until September 1990 when they purchased a property at RR, New South Wales, in their joint names. That property was owned as to 75 per cent by Crowley and 25 per cent by Pappas. I accept the evidence of Crowley that the division of the property was to maximise the parties’ entitlements from low interest loans from Crowley’s then bank employer.
In August 1992 Pappas suffered an aneurysm. He was unable to go back to work for a period of about 12 months and he suffers some ongoing disability. Pappas says, and I accept, that he manages very well.
In November 1992 the parties resumed living at SS and in January 1993 they sold the RR property. There was a profit of about $15,000 on the sale of that property.
In November 1993 the parties moved to T and purchased a property T (not the 2 P Street property). Crowley and Pappas purchased a two-thirds share in that property and the other one-third was purchased by the parents, Mr and Ms C. Crowley and Pappas resided in that property with the parents for many years.
Initially after moving to T, Crowley and Pappas operated a horticultural business.
In November 1995 the parties signed a loan agreement with Westpac Bank for $125,000 which was secured against the SS property. That loan agreement[5] was dated 2 August 1995. In that loan agreement Crowley acknowledge that he was responsible for making equal contributions to the loan repayments to Westpac Bank (which secured the parties purchase of their two-thirds interest in the T property) and imposed an obligation on Crowley to continue making equal repayments in respect of that loan. The loan agreement noted that the parties had made equal contributions thus far. Pappas repudiated that which he had previously asserted in that agreement and he claimed that all of the repayments had been made by him. Given my comments on his evidence elsewhere in these reasons I reject the repudiation asserted by Pappas.
[5] Exhibit A12.
In September 1996 the parties formed a company, PC Pty Ltd, and in November 1996 Crowley and Pappas purchased a retail business in T using the company as the vehicle to acquire and operate the business. The acquisition cost was $290,000. That expense was secured by way of a loan over the T property.
At about the same time Crowley and Pappas sold their two-thirds share in the T property to the parents for $126,000. There was an issue as to whether it was sold at a reduced price. Tendered in evidence (without objection) was a letter from a real estate agent and a residential valuation in respect of that property.[6] Given that evidence, and in the absence of any cogent expert evidence to the contrary, I find that the consideration for that sale was at market value.
[6] Exhibits A1 and A2
The parents provided their property as security for the business loan. Crowley and Pappas resided in that home for the following eleven years. I have treated the provision of that guarantee of the loan and the accommodation as contributions made by or on behalf of Crowley.
In February 2008 Pappas sold the SS property and a number of debts were paid out. A company loan was reduced and Pappas received about $122,000.
Those funds were used to enable the parties to purchase a property at CC, New South Wales which they purchased and sold about one year later with a profit. In October 2004 their Q Business was sold for $80,000. During this period Pappas withdrew funds from the business to ‘pay himself back’ some purported Director’s loans.
In January 2007 Pappas purchased P Street for $235,000 Crowley and Pappas began planning for the development of that site and building works commenced in 2009. There were apparently two premises on that property once it had been completed. Over this period Crowley’s son lived with the parties on a regular basis.
In June 2010 Crowley and Pappas commenced living at P Street which they did as a couple until separation on 15 January 2011.
As I have indicated elsewhere in these reasons, each of the parties put about $20,000 into the company in December 2010.
From separation until possession was taken by Westpac Bank Pappas resided at P Street and Crowley resided at his parents at the T property.
In April 2011 Pappas ceased to operate the business and Crowley attended to winding down the business. He sold the fittings, fixtures, computer equipment and stock. Crowley said, and I accept, that he used that to reduce the liabilities of the business and in addition he has paid some money since that time. The liabilities had been reduced by about $100,000 although it is not clear how much came from the earnings of Crowley or from the sale of the assets of the business.
In April 2011 the mortgage to Mrs Pappas was registered on the title of P Street. In 2012 the parties had engaged in negotiations and had reached an ‘in principal’ settlement of these proceedings. However, before those terms could be implemented, Pappas lodged a debtor’s petition and on 22 October 2012 he became a bankrupt. In that petition he asserted, wrongly, that his mother, Mrs Pappas had demanded payment of the monies due to her. In his application, Pappas noted the liabilities of Mr and Mrs C (as guarantors of the business loan) as unsecured liabilities.[7]
[7] Exhibit A13.
In these reasons any statement of fact is to be regarded as a finding of fact.
EVIDENCE
Mr Crowley
Crowley relied upon his affidavits filed 7 October 2011, 5 December 2011, 15 June 2012, 6 July 2012, 3 October 2012, 21 June 2013 and 7 February 2014. These affidavits were read into evidence subject to weight. The voluminous annexures attached to his affidavits of 15 June 2012, 7 October 2011 and 21 June 2013 was removed and those annexures which were relevant were tendered separately in evidence. Crowley was cross-examined by Pappas and counsel for Mrs Pappas.
The extent of the conflict, animosity and unhappiness between Crowley and Pappas was clearly on display given their interaction during the cross-examination of Crowley by Pappas.
Crowley was asked whether he had debts at the time the parties commenced cohabitation and he denied the existence of such debt. I accept that evidence. Crowley said, and I accept, that his income was always paid into a joint account and that Pappas had his own account.
Crowley conceded that he paid child support and that his son lived with them for some years.
Crowley was cross-examined as to the assistance he provided Pappas when he was unwell in 1992/1993. I accept Crowley’s evidence in that regard.
Crowley was cross-examined by counsel for Pappas and agreed that the heads of agreement were put in place between he and Pappas in August 2012, where there was no issue taken or perhaps a concession made, in relation to the mortgage over P Street.
Crowley was not seriously challenged in many areas of his evidence in cross-examination and at times, made admissions against his interests. I am satisfied that he endeavoured to be frank and truthful in terms of his evidence, albeit from his subjective point of view.
Mr Pappas
Pappas relied upon his affidavits of 16 November 2011, 13 June 2013 and 9 January 2014. Subject to some objections, those affidavits were read into evidence. Pappas was not permitted to annex and read into evidence the report of Mr U.
During cross-examination Pappas was taken to his affidavit filed 12 January 2012 and to his affidavit filed 3 August 2012, that material became part of the evidence before the Court.
Pappas produced documents in relation to the property P Street which was tendered in evidence.[8] This Exhibit evidenced that the Westpac Banking Corporation was owed a total of about $525,312 (with a total of arrears included in that sum of $38,060) as at 20 February 2014. One of the loans was an investment loan with the final numbers …336 of which the liability was $283,975, with included arrears of $18,960. The other investment loan with final numbers …679 was $241,337 with arrears of $19,100. Part of that tender was a letter dated 28 February 2014 from Westpac Banking Corporation confirming that they had taken possession of P Street and a notice requiring possession addressed to Pappas dated 20 January 2014.
[8] Exhibit R1.
Pappas solely occupied P Street from separation on 15 January 2011 until very recent times when he was required by the bank to vacate the premises. He conceded in cross-examination that as at 22 October 2012 (when he filed his debtors petition) that the mortgage instalments due to the Westpac Bank on P Street were up to date.[9] Up to that time he was receiving $400 per week rent on the leasing of another part of that property.
[9] Exhibit A13 at page 14.
Pappas was cross-examined as to why he did not collect rent and pay it to the Bank. He asserted that it arose out of caveats and gave other answers which were unsatisfactory. During this period of time Pappas was in paid employment and was capable of letting part of the property but he did not do so. I do not accept his explanations.
I am satisfied that Pappas allowed the loans to go into significant arrears and did not take any meaningful steps to enable the sale of that property in an orderly fashion and has left the sale of the property to a mortgagee in possession with all of the costs associated with that course. He adopted an economically destructive course where the impact on him was limited.
In earlier affidavits Pappas asserted that the value of SS property when he purchased it was over $200,000. No evidence was adduced to that end and it was clear that his evidence in that respect had an air of artifice about it. When questioned about the acquisition of the SS property he said he initially put in about $30,000 from savings or cash but later it became clear that it was $100,000. I accept that his original contribution was about $100,000.
In terms of the alleged debts to his mother, prior to December 2010 Pappas provided no cogent or reliable evidence as to the amount of the advances, except the initial loan of $10,000 to $20,000 which was repaid by he and Crowley.
As to the loans from Mrs Pappas made after December 2010, Pappas did not provide a cogent explanation as to how he applied those funds. Similarly he provides no reliable evidence as to the alleged debts asserted by him to Mrs Pappas from prior to December 2010. It is significant that no claim was made for those alleged loans until March 2011. As I said earlier, I do not accept that they were liabilities for which Pappas was liable, they were funds advanced to Pappas which I have had regard in terms of contribution
Pappas was argumentative in cross-examination and was non-responsive to answers, often answering in submissions of his own. He gave little or no credit to Crowley for his work and contributions. He rarely missed an opportunity to understate or belittle such contribution and asserted that he had been the primary contributor.
When Pappas purchased the SS property he understated the consideration of the transfer.
It is clear that Pappas received at least $122,000 from the sale of the SS property back to his parents.
Pappas endeavoured to control the large sums of money that came through the parties’ hands during the relationship. This is clear from bank statements tended by the applicant.[10]
[10] See Exhibits A8, A9 and A10.
Pappas asserted that he borrowed the money to purchase their two-thirds interest in the T property and gave no credit of any meaningful contribution by Crowley. This was in circumstances where I am satisfied Crowley has made significant contributions.
Pappas was cross-examined in relation to the loans he received from his mother. He conceded that he received about $190,000 between December 2010 and July 2012. Most of these monies apparently were paid in legal bills and living expenses.
Pappas was cross-examined in relation to the loan agreement entered into in March 2011. He acknowledged that he was aware that Crowley was after the house which Pappas said “I built”.
He denied that the parties separated in January 2011, however, I am satisfied that the separation occurred at that time.
In February 2011 that litigation was anticipated between the parties.[11] At that time Pappas asserted that his mother had lent him $35,000. There is no issue that this had in fact occurred. What was not asserted in that letter was that as between Pappas and Mrs Pappas, they were asserting that there was a liability of some $386,000 outstanding in March 2011.
[11] Affidavit of Mr Crowley filed 5 December 2011 at paragraphs 4 and 5 and annexure C.
The evidence in relation to the alleged debts prior to the payment in December 2010 are without any substance and I am satisfied that those alleged debts, whether they be $161,000 or $386,000 did not exist. They may have been advances made by Mrs Pappas to assist her son, but the full nature of that assistance is unclear.
Pappas prevaricated in giving evidence. Counsel for Crowley submitted that Pappas was not reliable and referred me to part of his evidence in relation to the claim that he initially borrowed $145,000 in respect of the T property, his evidence in relation to his failure to rent P Street and his prevarication, when pressed, in relation to the events surrounding 17 March 2011.
The evidence of Pappas is unreliable and I will treat it with caution.
Mrs Pappas
Mrs Pappas gave evidence in terms of her affidavits filed 18 January 2013, 24 May 2013 and 21 June 2013. These affidavits were read into evidence subject to weight. Mrs Pappas gave her evidence by video link from the Sydney Registry of the Family Court, with the consent of all parties.
Mrs Pappas was vague in relation to her memory of various events, particularly those around March 1988 which was at the time of her husband’s passing. She said that the consideration on the transfer on the sale of the SS property was not the property’s true value, it was substantially more. I accept that it is clear that the amount paid for that property was $160,000 or $170,000. It was re-acquired by Mrs Pappas from her son for full consideration in 1998.
In relation to the loans to Pappas from 1988 through to November 2010 there is scant objective evidence and I am not satisfied that such loans were made. If made, many of them would have been statute barred and there is no detail provided by Mrs Pappas of those liabilities.
Mrs Pappas was cross-examined in relation to the $50,000 she says she paid towards the medical expenses of Pappas following his illness in 1992. She accepted that she paid those bills and did not enter into any agreement with regard to them. I am satisfied that she has made that as a contribution and I have treated that as part of the contributions but not as loans.
Mrs Pappas was aware that there were claims coming by Crowley before the mortgage and loan agreement dated 17 March 2011 were entered into. The solicitor acting for Pappas in the proceedings at that time was also acting in relation to the mortgage and loan agreement. No notice of the loans or mortgage were given to Crowley or those who represented him.
The loan documents have a sense of artifice and/or unreliability. Pappas and Mrs Pappas assert that the loan agreement and the mortgage were for advances anticipated to be made into the future. Yet the documentation is different.
The letter from Kevin O’Kane dated 17 March 2011[12] says:-
…Our client has loaned the sum of $386,000 to your client, repayable on demand.
[12] Annexure FP1 to Mrs Pappas’ affidavit filed 21 June 2013.
There was no indication that this was for advances into the future. The loan agreement itself provides:-
Principal sum: $386,000 being the loan amount advanced (emphasis added) to [[Pappas]] as at this agreement date.[13]
[13] Annexure FP2 (Loan agreement) to affidavit of Mrs Pappas filed 12 June 2013 at page 16.
If the loan was to cover advances to be made to Pappas from time to time, after 17 March 2013, the documentation did not identify the existing loans nor did it specify that it was to cover the advances anticipated into the future.
That, however, is a matter between Mrs Pappas and those who advised her. Mrs Pappas acknowledged that she has never made a demand for the funds from Pappas. Mrs Papas acknowledged that her son had told her that Crowley was seeking a property settlement.
It is clear from the evidence that Mrs Pappas is unsophisticated and relies upon Pappas. Her memory is poor. She was clearly endeavouring to assist her son in the context of the dispute between he and Crowley. As such her evidence is not reliable and needs to be treated with care.
FURTHER FINDINGS
I find that at separation in January 2011 the business liabilities secured by the parents over their home totalled about $289,802. With the sale of the assets of the business this liability has been reduced to about $184,603. I make no adverse finds about the sale of the business assets by Crowley.
In January 2007, Pappas purchased P Street. At separation that property was subject to a mortgage to Westpac Bank totalling about $480,000. At that time the parties believed there was equity in that property of some hundreds of thousands of dollars. That property is now subject to two loans to Westpac Banking Corporation totalling about $525,312. These two loans are subject to arrears of about $38,000.
From separation until recently that property was occupied by Pappas. It was possible for rent to be earned on all if not part of that property whilst he was in occupation. Westpac Bank has now exercised its powers of sale and has taken possession of the property and it is likely to be sold with the attendant (but as yet undisclosed) costs of sale by mortgagee in possession.
After separation Pappas entered into a loan agreement with his mother on 17 March 2011. Pursuant to that loan agreement there is a mortgage registered in her favour over the P Street property. It is this mortgage and loan agreement which Crowley wishes to have set aside pursuant to s 106B of the Act.
There may or may not be an excess of funds available after sale of P Street.
Whether the mortgage and loan agreement between Pappas and Mrs Pappas should be set aside pursuant to s 106B of the Act
The relevant provisions of s 106B are:-
(1)In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
(1A)…
(1B) …
(2)…
(3)The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
(4)…
(4AA)…
(4A)In addition to the powers the court has under this section, the court may also do any or all of the things listed in subsection 80(1) or 90SS(1).
(5) In this section:
disposition includes:
(a) a sale or gift; and(b)the issue, grant, creation, transfer or cancellation of, or a variation of the rights attaching to, an interest in a company or a trust.
interest:
(a) in a company includes:(i) a share in or debenture of the company; and
(ii)an option over a share in or debenture of the company (whether the share or debenture is issued or not); and
(b) in a trust includes:
(i) a beneficial interest in the trust; and
(ii) the interest of a settlor in property subject to the trust; and
(iii) a power of appointment under the trust; and
(iv)a power to rescind or vary a provision of, or to rescind or vary the effect of the exercise of a power under, the trust; and
(v) an interest that is conditional, contingent or deferred.
Plainly the application must relate to an instrument or disposition, which is made or proposed to be made by or on behalf of a party or at the direction of a party or in the interest of a party. Further the instrument or disposition must be made to defeat an existing or anticipated order or irrespective of intention is likely to defeat such an order.
Plainly in this proceeding the loan and mortgage were made shortly after separation and in circumstances where both Pappas and Mrs Pappas were aware that proceedings were being contemplated and a claim had been foreshadowed. Pappas’s then solicitor (Evan Sarinas) sent a letter to Crowley’s lawyer (Jane Ross) on 22 February 2011 confirming that he had had telephone communications with her in which the claim was referred to. The letter itself comments that Crowley ‘intends to make claim on property in the name of [Pappas] at [[P] Street]’.[14] Mrs Pappas knew of this claim in advance of entering into the loan agreement and mortgage on about 17 March 2011.
[14] Annexure “C” to affidavit of Crowley filed 5 December 2011.
The effect of the loan and mortgage were to extinguish the whole of the equity of Pappas in P Street and provide insufficient funds to satisfy any order sought by Crowley. These instruments would defeat the claim that had been made or at least outlined by or on Crowley’s behalf to Pappas in February 2011 following the breakdown of the de facto relationship on 15 January 2011.
I accept the submission on behalf of Crowley that Pappas on his own case, was that the loan agreement and mortgage were likely to defeat any property adjustment order and as such the provisions of s 106B became enlivened.
Pappas endeavoured to rely on the loan and mortgage to show there was no equity in P Street, therefore there was no property to distribute. It is the case of Crowley that the agreement and mortgage were brought into existence to defeat the claims. They submitted:-
(a)The letter to the solicitors from Pappas’s then solicitors to Crowley’s solicitors noting the only liability to Mrs Pappas of $35,000;[15]
(b)That the loan agreement was set out as loans that had been made not prospective loans.
(c)There was no requirement for repayment of the loan otherwise than in twenty years time or upon demand. No demand has been made yet.
(d)Pappas and Mrs Pappas were aware that proceedings were on foot and that Crowley was claiming an interest in 2 P Street.
(e)The nature of the loans changed over the period of time as more monies were made available to Pappas by Mrs Pappas.
[15]Ibid – page 5 of annexure “C”.
Accordingly, there are instruments or dispositions, in the form of the loan agreement and mortgage which were made by Pappas which were likely to defeat an anticipated order. As such the threshold has been established.
It remains an exercise for discretion whether to make or refuse to make an order. In exercising that discretion the Court must regard the interest of a bona fide purchaser (or more relevantly here) other person interested. The onus is on Crowley to establish that the availability of the discretion ought to be exercised as he seeks.
The exercise of that discretion may depend on a number of considerations, including, what was said by Nicholson CJ in Halabi and Artillaga & Ors (1994) FLC 92-470 at page 80-885:-
…a discretion should be exercised to set the instrument or disposition aside. The exercise of such a discretion may well depend upon whether if this is not done there are sufficient funds available to the party who has made the disposition to satisfy the order without setting the instrument or disposition aside.
Which approach was adopted in Gould and Gould; Swire Investments Ltd (1993) FLC 92-434.
If these elements are satisfied, it remains an exercise for discretion whether to make or refuse to make an order. In exercising that discretion the Court must regard the interest of a bona fide purchaser, or more relevantly here, other person interested.
As to the veracity of the pre December 2011 loans in his affidavit filed 16 November 2011 Pappas said:-
Loans from my mother
81.I also borrowed significant sums from my mother from time to time to assist with the working capital for [PC Pty Ltd], living expenses, property purchases and to assist me with other debt obligations and expenses.
82.The various advances made to me from time to time by my mother were formalised in a loan agreement and Mortgage over [[P] Street].
Pappas’s position changed in his affidavit of 3 August 2012 when he claimed;
124.I deny paragraph 76 of [[Crowley’s]] affidavit. The purpose of the loan agreement was to secure monies loaned by my mother … and for my mother to make further advances to me. Attached hereto and marked Annexure “NP-26” are deposit receipts showing payments by way of loan into my account from my mother totalling $140,000 for the period 1 December 2010 to 8 June 2012. My mother also loan to me an additional $50,000 on 2 July 2012.
…
128.Any shortfall in my income has always been supplemented by loans from my mother and I repeat and rely upon paragraphs 81 and 82 of my Previous Affidavit. I further say that my mother has lent me additional funds since this time to assist with living expenses, legal costs and maintenance and upkeep on [[P] Street]. Such expenses are also covered by loan the agreement and mortgage …
The 17 March correspondence from Mrs Pappa’s solicitor to Pappas’s solicitor[16] noted:-
We are instructed as follows;
1.[[Mrs Pappas]] has loaned the sum of $386,000 to your client [[Pappas]], repayable on demand.
[16] Annexure “FP-1” to the affidavit of Mrs Pappas filed 21 June 2013.
The mortgage refers to the principle sum as ‘$386,000 being the total amount advanced to the Borrower [[Pappas]] as at the agreement date.’[17]
[17] Annexure “FP-2” to the affidavit of Mrs Pappas filed 21 June 2013, page 20.
The mortgage did not require repayment until 20 years from the date of the agreement [17 March 2031] or upon demand.[18] No demand has been made by Mrs Pappas.
[18] Ibid – page 20.
The timing of the loan agreement and mortgage is troubling and I have treated it as a factor in this determination, given the breakdown of the de facto relationship between Crowley and Pappas on 15 January 2011. Mrs Pappas, Pappas and his solicitor were aware of the claim but no mention is made of it in the correspondence or the documents.
The curious and inherently implausible coincidence that the older loan and the loans from December 2010 to July 2012 match to the figure in the March 2011 document has the air of artifice. This is particularly the case where no agreements were produced in evidence about the alleged loans over the preceding 24 years.
I accept the submission on behalf of Crowley that Mrs Pappas was aware of the failed relationship and it can be reasonably inferred that she did not foresee that any repayments would be made.
The Court has had regard to the interests of Mrs Pappas. She has advanced a considerable sum of money to Pappas following the relationship breakdown between her son and Crowley.
Given the findings of fact and in all of the circumstances, I will exercise the discretion provided under the Act and set aside the loan agreement and the mortgage, and make consequential orders to give effect to such an order.
Counsel for Mrs Pappas referred me to the provisions of s 80(1)k of the Act where the Court can make any other order (whether or not of the same nature of those mentioned in the proceeding paragraphs of this section), which it thinks is necessary to make to do justice. It seems more likely that counsel meant to refer me to s 90SS of the Act which is the one that deals with applications of this nature.
Having regard to that submission, I am satisfied, if there are any funds available for distribution to Pappas, after the sale of P Street his share would, and should, be paid to his Trustee in Bankruptcy and it will be open for Mrs Pappas to prove her debt in that context.
In addition I will be ordering any money to be paid to Crowley from the sale of P Street be applied to the debts owed to the parents, thus reducing any proof of debt by them in the bankrupt estate of Pappas.
PROPERTY ORDERS - APPROACH
Bankruptcy of Pappas
On 22 October 2012 Pappas filed a Debtor’s Petition with the Australian Financial Security Authority. That petition was accepted and Pappas became a bankrupt.
At that time these proceedings were being conducted in the Federal Magistrates Court (as it then was) and by order made 25 October 2012 the Court noted that a Trustee in Bankruptcy was involved. There was an order made directing the Trustee in Bankruptcy (should the Trustee wish to do so) to file and serve any response and affidavit on or before 30 November 2012. The proceedings were then adjourned to 18 December 2012. When the matter came back before the then Federal Magistrates Court on 18 December 2012 there was no appearance for or on behalf of the Trustee in Bankruptcy.
On 18 December 2012 these proceedings were transferred to the Family Court of Australia. The proceedings were listed before a registrar of the Court on 17 January 2013. At that time there was no appearance by or on behalf of the Trustee in Bankruptcy. By that time Mrs Pappas had been joined as a party to the proceedings and there were a number of other mentions and trial directions made.
The matter came before a registrar of the Family Court on 28 May 2013 at which time Mr Gassner, solicitor, appeared on behalf of the Trustee in Bankruptcy. A Notice of Address for Service on behalf of the Trustee in Bankruptcy had been filed shortly before (on 15 May 2013). At the call over on 28 May 2013 the Registrar noted:-
The legal representative for the Trustee in Bankruptcy of [Pappas] advised his client is not currently seeking to be a party to the proceedings as the debts of the bankrupt estate exceed assets.
There was no appearance by the Trustee in Bankruptcy at that hearing nor did the Trustee engage in the proceedings which followed and were determined by me. I am satisfied that the Trustee in Bankruptcy had notice of the proceedings and I am satisfied that the Trustee has not sought to be a party to the property settlement proceedings. As such it is unlikely that Pappas needed leave pursuant to s 90SM(15).
I am now to:-
a)Identify, according to ordinary common law and equitable principles, and then value the property, assets, financial resources and liabilities of the parties;
b)Determine whether it is just and equitable to make an order altering those interests and if so;
c)Identify relevant contributions and assess them;
d)Consider relevant matters referred to in s 90SF of the Act;
e)Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.
This has to be done considering the rights of unsecured creditors (see Coleman J at paragraph 96-101 of Trustee of the property of G Lemnos, a bankrupt and Lemnos and Lemnos (2009) FLC 93-394; Biltoff and Biltoff (1995) FLC 93-614). Sometimes adjustments of property are made without removing all unsecured debts from the asset pool prior to dividing the asset pool between the parties. See Thackay and Ryan JJ in Lemnos (supra) at paragraph 262 - 264, 271 and the Act requires a just and equitable division of property as between spouses and unsecured creditors.
In this case the Trustee of the bankrupt estate of Pappas chose not to be involved in these proceedings, however the requirement set out above continues.
The Balance sheet
Non- superannuation property
P Street (estimated value)
This property is owned by Pappas and is subject to a mortgagee exercising power of sale
$690,000
Household contents – owned by Crowley (no evidence of value)
00
Household contents – owned by Pappas (no evidence of value)
00
Telstra shares – jointly owned by Crowley and Pappas
$1,441
Shares owned by Crowley
$16,000
Ford motor vehicle – owned by Pappas
$2,100
Cash in bank – owned by Pappas
$1,500
TOTAL
$711,041
Liabilities
Debt to Westpac secured over P Street –
$525,000
Costs of mortgagee exercising power of sale (not known)
00
Amount owed in respect of business (business loan) – joint guarantee by Crowley and Pappas
$138,535
Amount owed in respect of business credit card - joint guarantee by Crowley and Pappas
$20,990
Amount owed in respect of business overdraft account - joint guarantee by Crowley and Pappas
$20,311
Tax debt – I have disregarded this alleged debt
00
Creditors - I have disregarded this alleged debt
00
Unsecured debts due by bankrupt estate of Pappas to Mrs Pappas
$190,000
TOTAL
$894,836
Superannuation
BT Superannuation – Crowley
$68,000
BT Superannuation – Pappas
$39,369
TOTAL
$107,369
Telstra shares
In relation to the Telstra shares they were owned jointly as to one half by Crowley and the other half by Pappas which has vested in the Trustee in Bankruptcy upon Pappas’s bankruptcy. Crowley sought these shares.
Furniture and furnishings
Each of the parties asserted that the other has significant furniture and furnishings. There is no evidence of any such furniture and furnishings and each party has set up their own house. I am not satisfied that there is any furniture of any commercial value or any meaningful use in directing one party to transfer furniture to the other.
I do not propose to guess the value of the furniture. In the circumstance of these parties I do not propose to make any orders in relation to furniture other than to leave them with the party who had possession of them at the hearing.
Motor vehicle
Pappas has a 2001 Ford motor vehicle. Crowley asserts its value is $8,400. Pappas says that he disclosed this car to the Trustee in Bankruptcy[19] with an estimated resale value of $5,000.
[19] Exhibit A13 page 10.
Pappas gave evidence that the Trustee in Bankruptcy did not wish to take the car as its value was less than $2,500. In the circumstances, I will treat its value as that sum.
Shares of applicant
Crowley had a share portfolio which he sold and discharged some liabilities. The amount remaining has a value of $16,000.
Pappas makes no claim for an interest in those shares nor does the Trustee in Bankruptcy. Those shares will remain the property of Crowley.
Business debts to Westpac Banking Corporation
Crowley and Pappas are guarantors to Westpac Banking Corporation to the extent of about $180,000 in respect of three business debts. These debts are secured by guarantee over the home of Crowley’s parents and by them personally. They may be in part provable in the bankruptcy of Pappas. I treat them as debts of the parties.
Debt to Mrs Pappas
I have determined that Pappas owes his mother $190,000, which debt is unsecured and is likely to be provable in his bankruptcy.
Small debts
In his affidavit filed 7 February 2014 Crowley sets out the liabilities of PC Pty Ltd totally some $184,603 of which the majority of about $180,000 amount to loans to the Westpac Bank in the form of a business loan, credit card and overdraft debt. No documentary evidence was provided in respect of the smaller debts, being creditors and the Australian Taxation Office of about $4,766. There is no evidence that these small debts are the liabilities of Crowley and/or Pappas.
Secured debt of Westpac Banking Corporation over P Street
Westpac Banking Corporation is owed about $525,000 which is secured over the P Street property. The Bank is selling the property as mortgagee in possession. The costs of the Bank in doing this were not in evidence before me. If P Street is sold at the value of $690,000 the net proceeds of sale will be about $165,000 less those expenses. From the evidence of Crowley and Pappas the net proceeds of sale are likely to be much less than $165,000.
Crowley said he would indemnify his parents in relation to any outstanding amounts and it is clear that Pappas feels no obligation in that respect and has no obligation in that respect. Pappas says however that he will be responsible for the liabilities to his mother (presumably after he comes out of bankruptcy).
There is no effective non superannuation property to distribute having regard to the assets and liabilities of the parties.
Superannuation
There is an agreement between the Crowley and Pappas as to the quantum of their respective BT superannuation entitlements in the amount set out earlier.
Crowley claimed that Pappas had another superannuation account with Westpac Bank containing about $10,000. Pappas denied any knowledge of such an account and no evidence was adduced by Crowley to establish that such a superannuation account existed.
Section 116 of the Bankruptcy Act 1966 (Cth) provides that a bankruptcy does not extend to the interest of a bankrupt in a regulated superannuation fund (subject to some exceptions). There is no indication that the Trustee of Pappas’s bankruptcy is seeking access to the superannuation funds. I am satisfied that it is property to which this Court has jurisdiction under the Act.
DETERMINATION
Having identified the property, assets, financial resources and liabilities of the parties and their value according to ordinary common law and equitable principles, I determine that it is in all the circumstances just and equitable to make an order altering those interests.
Identify relevant contributions and assess them
I have made reference throughout these reasons to contributions which I have considered in evaluation of the respective contributions made by Pappas and Crowley.
At the commencement of the relationship Pappas made a significantly greater financial contribution than that of Crowley. He had $100,000 and used this to acquire a home at SS at a favourable cost. I have had regard to that significant contribution. I have had regard to the loan of about $10,000 or $20,000 made to Pappas by his mother, albeit that the loan was repaid by Pappas and Crowley jointly.
Following that time, the parties engaged in a domestic relationship over some 24 years. I am satisfied that each applied their incomes as they received it, to the acquisition of property during the course of the relationship. Each provided household services to the other and I am satisfied that Crowley provided significant support for Pappas following his illness in September 1992.
They have each made different contributions up to separation. Pappas provided contributions in direct support of Crowley’s son by way of monies paid by Crowley towards child support and providing accommodation.
The use of the property at SS for loans was a significant contribution by Pappas. Mrs Pappas made contributions through various financial contributions from time to time, including a large sum in terms of the medical expenses for Pappas in about 1992, the full extent of which was not before me or was compromised by the unreliability of the evidence of Pappas.
As to the loans from Mrs Pappas made after December 2010 as I said earlier, I accept that they were liabilities for which Pappas was liable. About $20,000 was used to assist the businesses in December 2010.
The parents of Crowley assisted by offering their property as security for loans and allowed Crowley and Pappas to live in their home for some eleven years. All in all up to the time of separation the contributions were equal subject to the consideration of the initial contribution by Pappas.
Since separation Crowley’s contributions have been greater, particularly given the reckless and indifferent approach by Pappas to the property at P Street. He did not collect rent. He did not arrange the sale of the property, he allowed the mortgage to fall substantially into arrears and his actions enabled the mortgagee to exercise the power of sale resulting in a cost which will be associated with that sale. It was open for him to make the property available to rent either in full or in part. He did not do so.
Crowley wound up the business. There was criticism of Crowley by Pappas. I reject that criticism. It is not clear how much of the business was paid down by the sale of the assets of the business or by Crowley. In any event those loans were paid down to about $180,000.
Given all of those numerous factors over so many years I generally evaluate overall the broad range of contributions of Pappas and Crowley from the commencement, during and after the breakdown of their relationship as being generally equal.
Consideration of relevant matters referred to in s 90SF of the Act
Neither party sought any adjustment in respect of the other factors including those under s 95SF of the Act.
Given the evidence of the parties and their particular circumstances I will adopt that approach which was pressed upon me.
Determine what order adjusting the property, assets and liabilities of the parties is just and equitable
The proceeds of sale of P Street are the contentious issue particularly in terms of which parent is paid and which is left unpaid.
I have determined that Crowley should be entitled to a one-half interest in whatever the net proceeds of sale of P Street will be. Given his evidence, and to preserve the assets in the bankrupt estate of Pappas, I will order that he pay that sum to Westpac Bank to reduce the liability to which his parents are exposed, thus limiting the extent of any proof of debt that they can lodge on the bankrupt estate of Pappas. This would in turn increase the amount available for Mrs Pappas should she prove her debts to the Trustee.
I will consequently order that the net amount due to Pappas from that sale be paid to his Trustee in Bankruptcy. I cannot give a preference to one unsecured creditor over another and I do not intend to do so.
As to the other items of property, Crowley will retain his shares, furniture and interest in the Telstra Shares. As to those shares, they will be ordered to be sold by Crowley as trustee (at market value) and half the proceeds will be paid to the Trustee in Bankruptcy for Pappas.
I do not intend to require the sale of the modestly valued car or the furniture held by Pappas. That would not in the circumstances be just and equitable.
I do not intend to make orders about the smaller debts of the business, those being creditors and the Australian Taxation Office of about $4,766. The question of the liability of either Pappas or Crowley was not established.
In terms of superannuation, I have treated that differently from the non-superannuation assets. Each of the parties has, since they commenced their relationship, made separate and independent contributions to their respective superannuation funds. The consequence of that is that Crowley has accumulated superannuation funds totalling some $68,000 and Pappas approximately $39,000.
Crowley seeks a split of those funds to him as a consequence of the significant contributions he has made since separation in January 2011. I do not accept that is a just and equitable approach. The effect of such an approach would be to take away the protection that the Bankruptcy Act provides for superannuation entitlements. Pappas seeks no split of the superannuation and I will adopt that course.
Each of the parties is aged fifty four. Pappas has health difficulties. Pappas earns about $700 per week and Crowley earns about $1,000 per week. Each are able to continue working into the future.
Accordingly I will so order.
I certify that the preceding one hundred and fifty eight (158) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 15 April 2014.
Associate:
Date: 15 April 2014
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