Dabrowska-Kaminski and Kaminski
[2009] FamCA 894
•18 September 2009
FAMILY COURT OF AUSTRALIA
| DABROWSKA-KAMINSKI & KAMINSKI | [2009] FamCA 894 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage |
| Family Law Act 1975 (Cth) ss 75(2), 79 |
| Lee Steere and Lee Steere (1985) FLC 91-626 Ferraro and Ferraro (1993) FLC 92-335 Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355 Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693 Kowaliw and Kowaliw (1981) FLC 91-092 |
| APPLICANT: | Ms Dabrowska-Kaminski |
| RESPONDENT: | Mr Kaminski |
| FILE NUMBER: | SYC | 2726 | of | 2008 |
| DATE DELIVERED: | 18 September 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Johnston JR |
| HEARING DATE: | 28 & 29 April 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Mater |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan Kelly |
| COUNSEL FOR THE RESPONDENT: | Mr Millar |
| SOLICITOR FOR THE RESPONDENT: | Burridge & Legg |
Orders
That the husband and the wife shall forthwith do all things and execute all documents to cause the property known as L property to be sold by public auction and to cause the proceeds of sale to be paid as follows:
(a) In payment of the debt secured by mortgage on the property;
(b)In payment of the costs of sale, auctioneer’s expenses, agent’s commission;
(c) In payment of 55.375 percent of the balance to the wife and
(d)In payment of 44.625 percent of the above balance to the husband plus any amount due by the wife under her line of credit;
That in the event that the property is not sold at auction then the husband and the wife shall forthwith do all things and execute all documents to cause the property to be sold by private treaty for the best price reasonably obtainable within two months after the auction and to cause the proceeds of sale to be paid as provided by order 1.
That in the event that the parties do not agree on the identity of the listing agent or auctioneer, the amount of the reserve price or the amount of the best price reasonably obtainable, then they shall do all things and execute all documents to nominate the President of the Real Estate Institute of New South Wales or his nominee to determine the disputed matter within seven days of the dispute arising.
That within one month the wife shall do all things and execute all documents to resign from any office she may hold as a trustee of the Kaminski Unit Trust, the Kaminski Superannuation Fund and the Kaminski Family Trust and shall execute any document she may be requested to execute by the husband having the effect of releasing those entities from any claim she may have against them of any kind including in relation to any loan account.
That except as otherwise provided by these orders each of the husband and the wife is to retain all other items of property presently in the possession of that party or standing in the name of that party.
That in the event that the wife remains a shareholder and/or director of any of the companies previously established by the parties, that forthwith upon the making of these Orders, the wife do all acts and things and sign all documents necessary to:
(a) transfer to the husband her shareholding in any such company;
(b) resign as a director and office bearer of any such company;
(c)assign to the husband her interest in any credit or debit loan account in any such company.
That on and from the date of the making of this Order, the husband indemnify and keep indemnified the wife against any liability of any nature which the wife may have at any time arising in any way in respect of any of the corporate entities established during the marriage including but not limited to B Pty Ltd, D Pty Ltd, N Pty Ltd, B Pty Ltd, ACN …8 Pty Ltd and ACN …1 Pty Ltd and/or the Kaminski Family Trust, the Kaminski Unit Trust and the Kaminski Superannuation Fund and/or any business or businesses conducted by them (“the entities”) whether:
(a)by reason of the wife having been an employee, director, officer and/or shareholder of any of the entities;
(b) by reason of the wife having been involved in any of the entities;
(c)by reason of the receipt by the wife of any money from any of the entities;
(d)by reason of the wife having given or executed a guarantee of the entities’ liabilities to any person or corporation;
or otherwise.
That the items of personal property, furniture, furnishings and effects (excluding artwork) contained in the home shall be divided between the parties by agreement or failing agreement within 28 days of the date of the making of this Order in the following manner:
(a)the wife shall, within 60 days of the date of this Order, do all acts and things necessary to prepare 2 lists of the furniture, and the furniture contained in each list be approximate in total value to that contained on the other list;
(b)the husband shall select 1 of the said lists within 7 days of receipt thereof, and in default, the wife shall select 1 of the lists for the husband, and thereafter the husband shall be solely entitled to the items contained in the list he has selected or been allocated, and the wife shall be solely entitled to the items contained in the other list, such selection or allocation to be specified in writing;
(c)the wife shall make available for collection by the husband or any persons nominated by the husband, all of those items contained in whichever of the said 2 lists the wife chooses for the husband or the husband has chosen at any reasonable time requested by the husband, and that pending collection of the items, the wife shall properly maintain such items.
That in the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders then the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
That each party have leave to apply further in respect of the implementation of any of these orders on 7 days' notice to the other party.
That all exhibits be released.
That the above orders not commence operation until 30 September 2009.
That both parties have leave to re-list these proceedings at any time until 29 September 2009 for further submissions about the form of the orders only.
IT IS NOTED that publication of this judgment under the pseudonym Dabrowska-Kaminski & Kaminski is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 2726 of 2008
| MS DABROWSKA-KAMINSKI |
Applicant
And
| MR KAMINSKI |
Respondent
REASONS FOR JUDGMENT
Introduction and Applications
These are property proceedings. The parties in these proceedings are Ms Dabrowska-Kaminski and Mr Kaminski. For convenience I shall refer to them as “the wife” and “the husband” respectively.
The wife seeks the following orders:
1.That within 28 days of the date of these Orders and simultaneously
1.1the husband do all acts and things and sign all documents necessary to transfer to the wife all of his right, title and interest in and to the property at [L], NSW (“the home”);
1.2the wife will be solely responsible for and indemnify the husband against any past or future liability or outgoings associated with or arising in respect of the home.
2.In the event that the wife remains a shareholder and/or director of any of the companies previously established by the parties, that forthwith upon the making of these Orders, the wife do all acts and things and sign all documents necessary to:
2.1transfer to the husband her shareholding in any such company;
2.2resign as a director and office bearer of any such company;
2.3assign to the husband her interest in any credit or debit loan account in any such company.
3.On and from the date of the making of this Order, the husband indemnify and keep indemnified the wife against any liability of any nature which the wife may have at any time arising in any way in respect of any of the corporate entities established during the marriage including but not limited to [B] Pty Ltd, [D] Pty Ltd, [N] Pty Ltd, [G] Pty Ltd, ACN […8] Pty Ltd and ACN […1] Pty Ltd and/or the [Kaminski] Family Trust, the [Kaminski] Unit Trust and the [Kaminski] Superannuation Fund and/or any business or businesses conducted by them (“the entities”) whether:
3.1by reason of the wife having been an employee, director, officer and/or shareholder of any of the entities;
3.2by reason of the wife having been involved in any of the entities;
3.3by reason of the receipt by the wife of any money from any of the entities;
3.4by reason of the wife having given or executed a guarantee of the entities’ liabilities to any person or corporation;
or otherwise.
4.The items of the personal property, furniture, furnishings and effects (excluding artwork) contained in the home shall be divided between the parties by agreement or failing agreement within 28 days of the date of the making of this Order in the following manner:
4.1the wife shall, within 60 days of the date of this Order, do all acts and things necessary to prepare 2 lists of the furniture, and the furniture contained in each list be approximate in total value to that contained on the other list;
4.2the husband shall select 1 of the said lists within 7 days of receipt thereof, and in default, the wife shall select 1 of the lists for the husband, and thereafter the husband shall be solely entitled to the items contained in the list he has selected or been allocated, and the wife shall be solely entitled to the items contained in the other list, such selection or allocation to be specified in writing;
4.3the wife shall make available for collection by the husband or any persons nominated by the husband, all of those items contained in whichever of the said 2 lists the wife chooses for the husband or the husband has chosen at any reasonable time requested by the husband, and that pending collection of the items, the wife shall properly maintain such items.
5.Except as specifically provided for by any paragraph comprising this Order to the contrary, as against the husband, the wife is the sole owner of and the husband has no interest in:
5.1the wife’s superannuation entitlements;
5.2artwork in the home;
5.3any bank accounts standing to the credit of the wife;
5.4any public company shares held by the wife;
5.5the wife’s jewellery;
5.6the wife’s BMW 3 series motor vehicle.
6.That paragraph 7 of this Order has effect from the operative time.
7.That in accordance with Section 90MT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”), whenever a splittable payment becomes payable to the husband from his interest in the [Kaminski] Superannuation Fund, that the wife is entitled to be paid a base amount of $100,000 calculated in accordance with Part VI of the Family Law (Superannuation Regulations) 2001 (Cth), and there is a corresponding reduction in the entitlement the husband would have had but for this Order.
8.That having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the [Kaminski] Superannuation Fund.
9.The operative time for this Order is 5 business days after the date of service of a sealed copy of these Orders on the Trustee.
10.Except as specifically provided by any Order comprising this Order to the contrary, as against the wife, the husband is the sole owner of and the wife has no interest in:
10.1any moneys standing to the credit of the husband in any bank account in his sole name;
10.2the loan owed to the husband by the parties’ daughter, [J Kaminski];
10.3the balance of the husband’s entitlement in any superannuation fund;
10.4the husband’s shareholding in any private company;
10.5the husband’s entitlement, if any, as a beneficiary or loan account holder, in the [Kaminski] Unit Trust and/or the [Kaminski] Family Trust;
10.6the BMW motor vehicle in the husband’s sole name.
11.Both parties do all acts and things and execute all documents, authorities or writings as are necessary to give effect to all or any of this Order.
12.Except as specifically provided for by any Order comprising this Order to the contrary, each of the husband and the wife release the other from all debts owing from one to the other.
13.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these Orders then the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act, 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
14.Each party have leave to apply further in respect of the implementation of any of these Orders on 7 days' notice to the other party.
15.The husband pay the wife's costs of and incidental to these proceedings.
On the other hand, the husband seeks the following orders:-
1.The husband and the wife shall forthwith do all things and execute all do documents to cause the property known as [L property] to be sold by public auction and to cause the proceeds of sale to be paid as follows:
(a)in payment of the debt secured by mortgage on the property;
(b)in payment of the costs of sale, auctioneer’s expenses, agent’s commission;
(c)49.6% of the balance to the husband plus any amount due by the wife under her line of credit (because wife’s $35,261 will be paid out under (a) above and not to refund this to the husband and be unfair and this does not affect item 20 in balance sheet)
(d)50.4% of the balance to the wife.
2.In the event that the property is not sold at auction then the husband and the wife shall forthwith do all things and execute all documents to cause the property to be sold by private treaty for the best price reasonably obtainable within two months after the auction and to cause the proceeds of sale to be paid as provided by order 1.
3.In the event that the parties do not agree on the identity of the listing agent or auctioneer, the amount of the reserve price or the amount of the best price reasonably obtainable, then they shall do all things and execute all documents to nominate the President of the Real Estate Institute of New South Wales or his nominee to determine the disputed matter within seven days of the dispute arising.
4.Within one month the husband and the wife shall do all things and execute all documents to cause any benefits standing to the credit of the wife in the [Kaminski] Superannuation Fund to be paid out to a superannuation fund to be nominated by her.
5.Within one month the wife shall do all things and execute all documents to resign from any office she may hold as a trustee of the [Kaminski] Unit Trust, the [Kaminski] superannuation Fund and the [Kaminski] Family Trust and shall execute any document she may be requested to execute by the husband having the effect of releasing those entities from any claim she may have against them of any kind including in relation to any loan account.
6.The husband and the wife shall take all necessary steps not later than seven days prior to completion of the sale of the property at [L] to cause the household contents located at the property, with the exception of clothing and personal items, to be divided equally between them.
7.Except as otherwise provided by these orders each of the husband and the wife is to retain all other items of property presently in the possession of that party or standing in the name of that party.
Background
The husband was born in Poland in 1946 and he is therefore 63 years of age. The wife was born in 1953 also in Poland and she is therefore 56 years of age. The parties commenced cohabitation in November 1978, married in 1982 and separated under the one roof in October 2006. There are three children of the marriage namely J born in 1980 who is therefore 28 years of age, T born in 1989 who is therefore 20 years of age and C born in February 1992 who is therefore 17 years of age.
The parties met in Poland in 1977. At that time the husband, who is a mechanical engineer, was employed as manager of a workshop in Poland.
In November 1978 the parties arrived in Australia and commenced cohabitation living south of Sydney. At that time neither party had any property of significant value. The wife worked for an insurance company and the husband was employed as a mechanic.
In 1980 the parties moved to Sydney and the husband commenced employment as a mechanic in the northern Sydney area. The wife ceased full-time employment in September 1980 shortly before the birth of the parties’ eldest child J.
In 1982 the wife commenced part-time work. She also commenced full-time diploma studies.
In 1983 the husband became managing director of B Pty Ltd, managing S Business. At approximately this time the wife resumed full-time employment.
Between 1985 and 1988 the husband also managed another branch of S Business.
In July 1985 the parties purchased a home at R. They used their savings and borrowed funds on mortgage from the Commonwealth Bank to fund the purchase.
At approximately this time the wife resigned from her employment and commenced to assist the husband in operating S Business at L. But after a few months the parties realised that they did not work well in business together and the wife commenced working with M Company and CS Company.
In 1986 the husband became the managing director of B Pty Ltd and he managed the S Business at L.
In March 1988 the husband and wife purchased the property at L.
At approximately this time J commenced attending L Catholic school.
The wife continued to work until shortly before the birth of the parties’ second child T in 1989. She then ceased employment for approximately six months and was a full-time parent and homemaker. Then the wife worked as a freelance consultant through a company she established for the purpose, K Pty Limited offering services as a consultant and trainer.
Also in 1988 the parties sold the S Business at R and “broke even” on the sale.
In 1993 the husband commenced business with a Mr CH in A Pty Ltd managing and supervising a Polish subsidiary company.
The husband was also involved with Mr CH in a company called N Pty Limited, a residential property development company.
In 1994 the husband also assumed the management of a further S business being the S Business at W.
In 1997 the parties purchased an investment unit at V. This was retained for 4 or 5 years and then it was sold.
At approximately this time both the parties’ young sons were attending the local Catholic primary school.
In approximately 1998 the parties agreed to subdivide their property at L to create a second lot upon which a house would be constructed. The husband entered into a contract with a builder to construct the home. This project took about five years, much of this time being involved in obtaining the required approval from the local council.
On 24 November 1999 the parties entered into a partition agreement for the L property providing for the husband to have a 2 percent share and the wife to have a 98 percent share. The husband had been concerned to endeavour to protect the asset from possible claims by creditors. The husband was particularly concerned about his business activities in Poland.
The new home was sold in 2004 for $1 062 000. After paying the mortgage and costs of construction the proceeds of sale available to the parties were approximately $596 109.
In excess of $490 000 of these funds were spent on the purchase of a BMW motor vehicle ($53 005) transfer of funds to the Kaminski Unit Trust ($372 240) a trip to Europe ($6937) and approximately $58 780 was paid to the wife. This left the husband with the balance of approximately $100 000.
Unfortunately in 2004 the lease of the S Business at L expired and the S parent company would not renew the lease. The husband sold the stock and equipment and realised approximately $80 000 therefrom. The husband has not been employed since that time.
At approximately this time the parties’ daughter J resumed living with the parties after her marriage broke down. The husband, unbeknown to the wife, subsequently made approximately $180 000 available to J to assist her to purchase a home unit at Y. The circumstances relating to this advance are very much in issue between the parties and J, and I shall refer to this matter again below.
Subsequently, the husband investigated various other business possibilities including a couple of different ventures in the sporting industry and also the possibility of exporting goods to Poland. Unfortunately it was not possible to establish any of such businesses.
In August 2006 the wife was diagnosed as suffering from toxic thyroid and she was unable to work for approximately one month.
Since May 2007 the wife has been employed by X Company as a senior consultant.
The parties continue to live separated under the same roof.
The Applicable Law
Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.
Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
There is a long-standing preferred approach to the determination of an application brought pursuant to the provisions of s 79. This involves four inter-related steps. Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.
Property available for division
To the parties’ credit they were able to arrive at agreement in relation to many items of property. These are set out in the list below.
But there were areas of dispute. The first of these is a part of the major issue in the case. The wife says that there should be an item in the list of available property attributable as an asset of the husband. This is what the wife alleges is in reality a loan owing to the husband by the parties’ daughter J Kaminski in the amount of $28 800. On the other hand, the other part of this major issue is that it is asserted on behalf of the husband that in fact the husband owes J $180 172.
This issue has its genesis in the following. Unfortunately J’s marriage came to an end and she moved back to live with her parents and siblings in early 2004. J informed the husband that she wished to purchase a home unit at Y. She was awaiting a property settlement. The husband said that he informed her that he and her mother would provide her with some funds to assist in the purchase. The husband provided J with $65 000 on 16 August 2004 for the deposit on the purchase and he provided a further amount of $24 976.50 on 31 August 2004. He said that to complete the purchase in September 2004 he provided the further amount of $90 031. He said that there was no written document in relation to the transactions and that he regarded the provision of these monies as being a gift. He said that the wife was living in the home at the time and he recalls that she assisted J in looking at properties on the internet.
The husband said during cross-examination about this subject that J asked him whether he could assist and that he talked to the wife. He said that he and the wife discussed the matter at the dinner table and that the wife was reluctant and that he simply gave the money to J. When it was suggested by learned counsel for the wife that the wife did not know anything about him paying money to J for her purchase of her home unit nor of money being paid from J to the husband, the husband replied that the wife had access to all his accounts.
In her affidavit J said that she looked around for a property to buy. She said that she discussed this mainly with her father. She said that her father provided her with funds which she thought came from the joint bank account he had with her mother to enable her to pay the deposit on the Y unit and then later stamp duty and the purchase of furniture. She said that her father provided her with the deposit of $65 000, a cheque for stamp duty of $25 000 and that for the settlement her father provided $90 000. J said that in order for her to obtain a loan from the ANZ Bank it was necessary for her father to sign a letter required by the Bank to the effect that the funds that he was providing were a gift. She said that the mortgage broker prepared a letter and her father signed the letter and she assumed the letter was sent to the Bank. J said that she borrowed $520000 from the ANZ Bank.
During the course of her cross-examination J said that she thought that the monies provided by her father were a gift rather than a loan. She denied that her father intended that she was to repay this money to him. J said that she never spoke directly with her mother about the money but assumed that her mother knew about the fact that her father had provided this money to her. She said that she does not have a very close relationship with her mother. She also said that she grew up speaking to her father about financial matters and never with her mother about such matters.
The wife said in her affidavit that she was not aware of the arrangement between the husband and J because she was not made privy to it. She said that she first learned of the matter after these proceedings had commenced. The wife also said that she had no knowledge about whether the payments J said she made to the husband had been received by the husband nor about what use he might have made of such funds. She said that she had no idea about the payments.
The wife said that J informed her that she wanted to purchase a property at Y. The wife disagreed with the suggestion by learned counsel for the husband that she had been reluctant to provide J with financial assistance. She said that such a proposal had never been discussed with her.
I must say I feel much more confident about accepting the wife’s account of this matter than that of the husband. This was despite a slight concern which I had about the wife’s difficulty in giving the husband much credit at all for making any contributions to parenting the children. In my view the wife was much clearer in giving her evidence about the issue of the provision of funds to J by the husband than was the husband. At times the husband was equivocal in his responses and his overall presentation of evidence about this issue was unconvincing in some important respects.
J was unable to provide any evidence to support the husband’s assertion that there had been a discussion with the wife about this matter. In any event, J appeared to me to be partisan to her father’s case. Her demeanour and her body language appeared at times to cast her in a defensive mode in my view. I was much less confident about the veracity of her evidence on all points than I was about the evidence of the wife.
In all the circumstances, I find myself unable to accept that there was discussion between the husband and the wife about details of the provision by the husband to J of amounts of money to assist her in funding her purchase of her Y property. I do not accept that the wife had any knowledge that the husband had provided any such assistance until after these proceedings had commenced.
But things became even more complicated than just the dispute about the circumstances in which the husband said he made the $180 000 available to J. As indicated above, the husband said that in December 2004 the lease of the business which he had been operating at L was not renewed. There was no business goodwill but he sold the stock and equipment for approximately $80 000. The husband used this money to pay household expenses including school fees and mortgage repayments. But after about 18 months little of this money was left. The husband said that from June 2006 he was very much in need of some cashflow. In these circumstances he informed J that he was running out of cash and asked if she could help him with some cash payments. At the time she was working as a senior accountant with a large accountancy firm.
J assisted him in this regard. Between 27 June 2006 and 14 October 2008 J made cash payments to the husband’s account in the amount of $151 372. Subsequently, J paid a HECS account and an MBA invoice in relation to her own studies those amounts being $20 000 and $8 800 respectively. The total of these amounts as it appeared on the relevant statement of account was $180 172.10.
Accordingly, it was submitted on behalf of the wife that, in broad terms, what has really happened is that J has repaid the approximately $180 000 loaned to her by her father in this manner. This was denied by the husband on whose behalf it was submitted that what actually occurred was that the initial monies provided to J were a gift from the husband and the wife to J to assist with her purchase. It was further submitted on behalf of the husband that J’s assistance to the husband when he needed cashflow to the tune of approximately $180 000 was in fact a loan from her to him and that the husband still owes these monies to J.
In relation to this latter aspect of the case, that is the provision to her father of these monies to assist him with cashflow, J denied that this was by way of repayment of what was originally a loan rather than, as asserted by the husband and her, a gift.
Learned counsel for the wife tendered an email dated 15 September 2004 (just before settlement of the purchase of J’s Y property) from J to her father which included the following:
“So could you please deposit into my ANZ Cheque Account the balance $90 031 this means the total amount that I owe you is $180 000”
The email provided account details and concluded with the following:
“I just want everything ready to go for settlement.”
J’s explanation for including in this the words “I owe you” was that she always had it in her head to give the money advanced to her back. Learned counsel for the wife then showed J the husband’s ANZ Bank statements for the period including 27 June 2006 to 1 December 2006. Over this period J deposited various amounts to the husband’s account. What is interesting is that the transaction details for each deposit include notes which could be interpreted as a running record of reducing indebtedness by J to the husband with respect to the $180 000 that he paid her. For example, it is clear from J’s affidavit that she deposited $5000 into the husband’s account on 27 June 2006. The transaction details in the relevant ANZ Bank statement include “BAL NOW 180K [J]”. The transaction details relating to J’s deposit of $4000 on 28 June 2006 include “BAL 176K [J]” and similar details until 1 December 2006 when the transaction details for J’s $2500 deposit records “FROM BAL $116000 BAL 116000”. Between 27 June 2006 and 1 December 2006 the Bank statement reflects total deposits by J to the account consistent with the reduction from $180 000 to $116 000. But from 19 December the transaction details described each deposit as a loan or “from [J]” or similar. When questioned about these transaction details J did not concede that these details were evidence that her deposits to her father’s account were in fact loan repayments.
As was the case with the issue concerning the nature of the monies advanced to J to assist with the purchase of her Y home unit the wife denied that she knew anything about this arrangement between the husband and J. She said she had no idea that J was making monies available to the husband in the manner that occurred or at all.
There was no suggestion by J that she was aware of any discussion between her mother and father or between the mother and herself about this matter.
I must say, as with the earlier matter at issue, I have much more confidence in the wife’s version that she did not know about these matters than about the husband suggesting that she must have known. I accept that the wife did not know about this and that it was an arrangement solely between the husband and J. In relation to the earlier aspect, that is the suggestion by the husband that the original monies were advanced as a gift, J was asked by learned counsel for the wife would not it have been reasonable for her to get in touch with her mother and express her thanks for the gift. J’s response was that she had always received and done money transactions with her father and that she thanked him but not her mother because she always thought that he and her mother were one unit. I must say that this evidence struck me as being extraordinary, particularly when in my experience of hearing many family law cases I have rarely seen a parent give a child so much money.
Accordingly, the view that I have formed about this matter is that the monies provided by the husband to J to assist her to purchase the Y home unit were a loan and not a gift and that the effect of the deposit of monies by J into her father’s account was a repayment of the loan. I have the clear view that this Court could not find that there is any sum owing by the husband to the parties’ daughter J. I also have the view that in fact J still owes her father $28 800 of the original loan of $180 000. This is because of the view I have that such money was a loan most of which has been repaid. But I do not have the view that by J paying her own HECS and MBA liabilities she has in effect paid such amount to the husband. J has a different view about the effect of such payments. Her view is that she understood that her parents always intended to pay her educational expenses. Therefore by implication the fact that she has paid them in effect means that she has given her father $28 800. I do not accept this. For these reasons, it is appropriate for the Court to find that the sum of $28 800 is owing by J to the husband and will be brought into account as an asset of the husband.
There was also an issue about an amount of $36 515 which was said to be the balance in the Kaminski Unit Trust cash management account. It was submitted on behalf of the husband that in fact the current figure is $30 193. It was clear from the husband’s evidence that the amount of $36 515 had been reduced by various payments that he had made including a mortgage payment, registration for his motor vehicle, tyres for his motor vehicle and insurance for his motor vehicle. I propose to bring this item in at the lower figure of $30 193.
There was an issue about whether $13 109 which the wife paid towards her legal costs should be added back. I have not been persuaded that this should be added back.
There was also an issue about how to deal with the wife’s alleged credit card liabilities. The wife said in her financial statement that she had various credit card liabilities. These appear to have come to a total of approximately $19 000. The difficulty for the wife is that there is no evidence before the Court to support her assertions in this regard. This had been a matter in issue between the parties over some time and there was considerable correspondence directed from the husband’s solicitors to the wife’s solicitors asking for copies of relevant statements of account. Very little was produced and there was no document which would indicate what the position was at the date of the hearing in respect of any of these accounts. In these circumstances it was submitted on behalf of the husband that the Court could not be satisfied what the current state of the wife’s credit cards is and I accept that. I am unable to bring any of those alleged liabilities of the wife into the list of liabilities for the purposes of these proceedings.
Accordingly the property available for division is as follows:
Assets
$
1. Former matrimonial home at L
1,050,000
2. Wife’s Vanguard Managed Fund
19,616
3. Wife’s Commsec Share Portfolio
2,901
4. Wife’s ING accounts
640
5. Wife’s CBA accounts
68
6. Wife’s ANZ accounts
389
7. Wife’s jewellery
11,200
8. Wife’s BMW 3 series motor vehicle
20,000
9. Wife’s funds in solicitors trust account
35,261
10. Wife’s funds in Burridge & Legg trust account
1,037
11. Wife’s ING Superannuation Fund
62,822
12. Husband’s BMW X3 motor vehicle
41,100
13. Husband's V2 account
7,456
14. Husband's ANZ One account
368
15. Husband’s E trade account
1,054
16. Husband’s ING account
469
17. Husband’s Superannuation Unit Trust Term Deposit
172,268
18. Husband’s Superannuation Unit Trust Cash
30,193
19. Husband’s Superannuation Term Deposit
24,327
20. Husband’s loan to J
28,800
21. Husband's paid legal costs
5,134
_____________
$1,515,103
Liabilities
$
1. Mortgage on former matrimonial home
100,034
2. Wife's line of credit secured on home
35,261
3. Husband's ANZ Visa
3,872
_____________
$139,167
Net property
$1,375,936
Contributions
Both parties have worked very hard during the course of their cohabitation and marriage. They have raised their three children, two of whom are now adults. The children have attended private schools.
The marriage is a long marriage, the parties having cohabited for almost 28 years.
Counsel for the parties agreed that for these reasons the Court would find that the parties contributions overall have been equal. I accept this.
s 75(2) matters
The husband is 62 years of age. He has high blood pressure. He has a long history of self-employment and ceased income-earning employment in 2004. He has endeavoured to generate income producing activity. This included a proposal to establish a specialised sporting facility. But the establishment costs involved millions of dollars in initial outlay and this was clearly beyond his capacity to borrow the funds. He undertook discussions with a sporting franchise provider, but again the costs involved in establishing this business were again beyond him. He has also undertaken preparatory work in relation to the feasibility of establishing various import / export businesses between Australia and Poland. None of these came to fruition. The husband has also applied for employment positions as a salesman, a retail customer service provider and other positions in the area of his qualifications and experience. He has not been offered an interview for any of the positions he has sought.
It was suggested on behalf of the wife that the husband has a history of being entrepreneurial and it is likely that he will be able to work in some capacity or other. I am afraid I am unpersuaded to this view. In my view, it is more likely than not that the husband will find it difficult to find income-producing work, especially in a time of global financial crisis and increasing local unemployment. He has been drawing his income from the Kaminski superannuation fund.
On the other hand, the wife is 56 years of age. She has had some difficulties in her health but these are not such that she has been unable to work full time or likely to be prevented by such from working full time into the future. She has qualifications in information technology and is very computer literate. She works full time as a senior consultant with X Company and earns in excess of $85 000 per year.
The parties agree that their child C is now at an age at which it is likely he will decide with which of them he will reside. They agree that they are likely each to continue to have to support him for some time yet. This is not a matter which favours one or other of them.
The remaining s 75(2) matter in issue involves a submission on behalf of the wife that the husband has wasted a considerable amount of money which otherwise would have been available for household purposes. There was a lengthy and detailed cross-examination of the husband about his spending after separation. He was referred to a considerable number of entries in various bank and credit card statements. There were some overseas trips referred to and numerous items of general expenditure. The highest this arrived at for the wife was that it is clear that considerable funds have been spent by the husband in pursuit of his hobby of playing golf. It was submitted by learned counsel for the husband that this spending, although not profligate, was extravagant. As I informed counsel during submissions, as I understand the law, extravagant is not sufficient to permit the wife to have an appropriate set-off on the basis of the husband having wasted property.
The relevant principle is set out in the well-known case of Kowaliw and Kowaliw (1981) FLC 91-092 in which Baker J said as follows at page 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec. 75(2)(o) to applications for settlement of property instituted under the provisions of sec. 79.
Accordingly, in the present case I am not persuaded that the husband’s expenditure on his hobby of golf or otherwise has been at a level which would enable the Court to make an adjustment pursuant to s 75(2)(o) of the Act.
In my view this is not a case in which the s 75(2) matters assume great significance. But, as indicated above, the husband is 6 years older than the wife and in my view, more likely than not has little capacity to earn income. Although the wife has some concerns about her own security of employment in a difficult and uncertain economic time, in my view, her prospects in relation to earning income in the future are considerably stronger than those of the husband. But the Court must be cautious about this.
In all the circumstances in my view there should be a set-off of available property in favour of the husband to take account of the differences of the parties in terms of their future income-earning capacity. In my view the appropriate set-off is 2 percent of the available property.
Conclusion and fourth step
The wife is to have 48 percent of the property available for division between the parties. This is property with a value of $660 449 (48 percent of $1 375 936 is $660 449).
The wife has the following property:
$
1. Vanguard Managed Fund
19,616
2. Commsec Share Portfolio
2,901
3. ING accounts
640
4. CBA accounts
68
5. ANZ accounts
389
6. Jewellery
11,200
7. BMW 3 series motor vehicle
20,000
8. Funds in solicitors trust account
35,261
9. Funds in Burridge & Legg trust account
1,037
10. ING Superannuation Fund
62,822
_____________
$153,934
For the wife to achieve property with a value of $660 449 she will require further property with a value of $506 515 ($660 449 - $153 934 = $506 515). This will have to come from the equity in the former matrimonial home.
The home has equity of $914 705 ($1 050 000 - $100 034 - $35 261 = $914 705). If the wife was to have $506 515 from the equity in the home this would leave $408 190 of that equity for the husband ($914 705 - $506 515 = $408 190). $506 515 is 55.375 percent of the equity in the home.
On the other hand the husband is to have 52 percent of the available property. This is property with a value of $715 487 (52 percent of $1 375 936 = $715 487).
The husband has the following property:
$
1. BMW X3 motor vehicle
41,100
2. V2 account
7,456
3. ANZ One account
368
4. E trade account
1,054
5. ING account
469
6. Superannuation Unit Trust Term Deposit
172,268
7. Superannuation Unit Trust cash management account
30,193
8. Superannuation Term Deposit
24,327
9. Loan to J
28,800
10. Paid legal costs
5,134
_____________
$311,169
But the husband has his ANZ visa card liability of $3872. Therefore he has net property with a value of $307 297 ($311 169 - $3872 = $307 297).
For the husband to achieve property with a value of $715 487 he will require further property with a value of $408 190 ($715 487 - $307 297 = $408 190). $408 190 is 44.625 percent of the equity in the home.
The orders I propose will not affect the income-earning capacity of either party.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston.
Associate:
Date: 18 September 2009
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Remedies
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Injunction
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Costs
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Fiduciary Duty
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Constructive Trust
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Procedural Fairness
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