Diotr and Diotr
[2009] FamCA 463
•20 February 2009
FAMILY COURT OF AUSTRALIA
| DIOTR & DIOTR | [2009] FamCA 463 |
| FAMILY LAW – PROPERTY SETTLEMENT |
| APPLICANT: | Ms Diotr |
| RESPONDENT: | Mr Diotr |
| FILE NUMBER: | PAF | 883 | of | 2005 |
| DATE DELIVERED: | 20 February 2009 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Stevenson J |
| HEARING DATE: | 3 October 2007, Written submissions July 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Givney |
| SOLICITOR FOR THE APPLICANT: | Goldrick Farrell Mullan |
| COUNSEL FOR THE RESPONDENT: | Mr Anderson |
| SOLICITOR FOR THE RESPONDENT: | McLaughlin & O'Riordan |
Orders
That the husband pay to the wife, within two calendar months of the date of these orders, the sum of $90,700.
That, otherwise, each of the parties be declared to be solely entitled to all items of property of whatever kind which are presently in his and her respective possession.
IT IS NOTED that publication of this judgment under the pseudonym Diotr & Diotr is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: PAF 883 of 2005
| MS DIOTR |
Applicant
And
| MR DIOTR |
Respondent
REASONS FOR JUDGMENT
THE PROCEEDINGS
These proceedings concern settlement of property. The applicant wife, Mrs Diotr, sought orders to the effect that the respondent husband, Mr Diotr, pay to her an amount of $209,292. She contended that this amount, together with certain assets which she currently holds or has possessed in the past, would constitute 20% of the net pool of property. Her case was that the net pool of property is valued at $1,158,224.
The husband sought orders to the effect that each party retain the assets which are presently in his and her possession. He contended the net pool of property has a value of $986,291. He alleged that an unknown amount of money was remitted to the Czech Republic by the wife.
A number of factual issues arose during the proceedings. The principle areas of dispute were as follows:
· the length of the parties’ cohabitation and the periods during which they occupied the same premises
· the role, if any, played by the wife in the husband’s business known as AG Business Pty Limited
· the extent to which the wife made a contribution as homemaker and whether that role was made more arduous by the husband’s conduct, while under the influence of alcohol
· the amount of money transferred to the Czech Republic by the wife
· the extent, if any, to which the husband wasted funds after the separation
There was a significant issue as to credit, which impacts substantially on the findings I will make as to these and other issues. For reasons which appear below, I see problems with the credit of both parties but I am more inclined to prefer the evidence of the husband where there is a conflict. I have concluded that the husband was a sincere and honest witness, although his recollection is likely to have been impaired by his excessive alcohol consumption. On the other hand, I have concluded that the wife was prepared to do and say whatever she believed necessary to maximise the potential benefit to her from these proceedings.
BACKGROUND
The husband, who is now 62, and the wife, who is now 58, began a relationship in 1997. They had each been married previously and had children from their prior relationships.
The wife alleged that she moved into the husband’s property at M on a full time basis in August 1998. According to the husband, the wife began to accompany him on business trips and to stay overnight at the M property in late 1998. He alleged that she retained her Department of Housing premises at N, throughout the relationship and returned regularly to that property.
Considerable doubt was cast on the wife’s evidence that the parties began to live together on a full time basis in August 1998 by the contents of her Department of Housing file (Exhibit 18). A report dated 9 June 1998 stated that the wife told a Housing Department officer that she lived on a boat at C at that time. The file also contained a residential tenancy agreement signed by the wife in November 1998, in respect of a property at G. Further, the file contained an “advice of vacant dwelling” dated 18 June 1999, signed by the wife, in relation to the G property. According to this form the G property was vacant because the wife was “moving back with daughter” to the N property.
According to the Department of Housing file, the N property was occupied by the wife, her first husband, Mr H, and their two children from November 1988. Mr H and children stayed in the home on the breakdown of the marriage. Mr H then left Australia and the children continued to occupy the property. These documents do not sit comfortably with the wife’s contention that she commenced full-time cohabitation with the husband in August 1998. This is one example of my reasons for doubt as to the wife’s credit.
It seems clear that the wife’s daughter lived in the N premises throughout the parties’ relationship. The wife returned to that home during the periods of non-cohabitation and has lived there since the marriage finally broke down in 2005.
The parties married in October 2000. At this time the husband was the beneficiary of the Diotr Family Trust, of which the trustee was R Holdings Pty Limited. This company was also the trustee of the R Holdings Superannuation Fund. In its capacity as trustee of the Diotr Family Trust, R Holdings Pty Limited owns two ordinary shares in a company known as T Holdings Pty Limited. This company holds eight A class shares in AG Pty Limited, which owns the property at M. Through this network of companies and trusts, the husband acquired the M property and the AG business in 1987 or 1988.
At the commencement of the relationship the wife owned only furniture and personal effects. She had an interest in three superannuation funds. These benefits were rolled over into the R Holdings Superannuation Fund in 2003 and 2004, at a total value of $17,759.
The husband alleged that he owned 15 Kruger rand and a one kilogram 24 carat gold bar at the beginning of the relationship. He purchased the Kruger rand for $7,500 and the gold bar for $33,000 between 1990 and 1994. He alleged that the wife removed these items from his safe, without his knowledge or consent, and has retained this property for her own benefit. The wife denied any knowledge of the Kruger rands or the gold bar.
At the commencement of the relationship the husband or one of the corporate entities owned a BMW and a Hummer motor vehicle. Both of these vehicles were sold after the final separation.
In December 2002 the company AG Pty Limited sold its business for $900,000. The purchase price was paid in four instalments between 16 December 2002 and 30 September 2003. The husband deposited a sum of $495,778 into the R Holdings Superannuation Fund, which had been established in June 2003.
There was a substantial dispute as to the extent of the wife’s work in the AG business. She alleged that she did most of the clerical work. She said that she emptied envelopes containing used film and carried out additional physical work in the factory premises. The husband maintained that the business continued to operate as it had for years before he met the wife. I will consider below the evidence relevant to the wife’s involvement in the business.
It was common ground that the wife lived at the N premises between October 2003 and February 2004. The husband alleged that there was a separation in October 2003. The wife claimed that she lived away from the M property on the advice of members of a community health team. She said that she had taken a mental health team and two police officers to the M property, out of concern at the husband’s excessive drinking.
On 28 January 2004, the wife withdrew $50,000 from the superannuation fund and deposited this money into her National Australia bank account. On 4 February 2004 she transferred $40,028 to an account in the Czech Republic in the name of her son. There were additional transfers from the wife’s account to the Czech Republic, which I will consider below in these reasons.
On 1 February 2004 the husband asked the wife to call an ambulance, as he was suffering ill affects from alcohol withdrawal. He was admitted to Hospital for four days and discharged in the company of his daughter.
There was a dispute as to whether the wife returned to live at the M property on a full time basis, after the husband’s discharge from hospital. He maintained that she visited regularly but did not live there full time. He said that he did not want her to live with him. The wife claimed that the parties lived together on a full time basis, until they separated in February 2005.
On 5 January 2004 the wife opened an account with the National Australia Bank, using the address at N. She deposited into this account the sum of $50,000 which she had withdrawn from the superannuation fund.
In April 2004 the wife commenced employment at an aged care facility. She has worked in a part time capacity as a nurse since 24 June 2004.
On 3 June 2004 police officers attended the M property, following an incident between the parties. The wife alleged that the husband menaced her with a kitchen knife during an argument. The COPS entry (Exhibit 19) stated:
“On arrival the Vic appeared heavily intoxicated, she was unable to follow simple instructions from the ambulance crew or police” and
“she remained determined not to support any police action against the POI”
The wife signed a retraction statement in an officer’s note book.
In August/September 2004 the parties travelled to the Czech Republic. The husband claimed that he withdrew $32,000 in cash, in three lots of $8,000, between 13 August 2004 and 27 August 2004 and placed the money in his travel bag. He said that his intention was that each of the parties would have cash of $10,000 for use on their European trip. He alleged that the wife removed $10,000 from his bag without his consent, thus he refused to leave with her on the scheduled date. He departed some time later and joined her in the Czech Republic. They returned to Australia together in November 2004.
According to the husband, the wife lived at the N residence after they returned to Australia. He said that she came back to the M property, bringing a single mattress, in February 2005 and stayed there for one or two nights per week until May 2005. The wife maintained that she moved into a separate room in the M premises.
On 24 March 2005 the wife deposited $150,000 into her National Australia bank account, by way of a cheque drawn on the superannuation fund. She alleged, and the husband denied, that he had given her a blank cheque some months earlier. He quickly arranged for $150,000 to be debited to the wife’s account and credited to a Commonwealth Bank account under his control. The husband’s prompt action to secure the return of this money does not sit comfortably with the wife’s assertion that he gave her a signed blank cheque and, implicitly, invited her to withdraw an unlimited amount from the superannuation fund. This is another example of my reasons for doubt as to the wife’s credit.
On 8 April 2005 the wife lodged a caveat on the title to the M property, showing the N property as her address. The husband subsequently caused this caveat to be removed.
On 4 April 2005 there was an incident between the parties, which again resulted in the attendance of police officers at the M home. The wife alleged that the husband punched her on the nose. He claimed that she fell over and sustained an injury while under the influence of alcohol.
On 8 May 2005 a further incident occurred at the M property. The COPS entry (Exhibit 19) noted that interim apprehended violence orders were in existence. These orders included a provision that the husband not approach the wife within twelve hours of having drunk alcohol. This incident occurred on the day that the parties appeared at the Local Court in relation to the apprehended violence proceedings. The wife arrived at the property and found the husband drinking wine, so she called the police and complained that he had breached the interim apprehended violence order. The COPS entry stated that the investigating police took the view that no breach of the interim apprehended violence order had occurred and that, in their opinion, the husband was not intoxicated.
On 18 May 2005 the wife again summoned police to the M premises, after she observed the husband drinking wine. On this occasion he was charged with a breach of the apprehended violence order, with a conviction following on 12 July 2005.
On 25 May 2005 the wife removed all of her belongings from the M property. She was able to fit the whole of these items into her daughter’s car.
In August 2005 the husband sold the BMW for $31,000. He sold the Hummer motor vehicle for $75,000 in February 2006. He or the corporate entities have had exclusive use of these funds
In November 2006 the husband entered into leases with companies controlled by communications companies. He and/or AG Pty Limited receive rent for telecommunications equipment now located at the M property.
The Evidence And Witnesses
The applicant, the wife, relied on the following affidavits:
(1)The wife sworn 31 May 2006, 26 September 2007 and 11 February 2008;
(2)Ms A (psychologist) sworn 13 September 2007 and 9 May 2008;
(3) Dr D (general practitioner) sworn 14 January 2008;
(4)Ms J (translator) sworn 25 September 2007 and 6 February 2008;
(5) Christina Dawson (solicitor) sworn 7 February 2008;
(6) Barry Mullan (solicitor) sworn 9 May 2008.
Mr Mullan’s affidavit referred only to a dispute between lawyers as to whether notice was given that the husband’s witnesses were required for cross-examination. This issue proved to be of no moment in the proceedings. Miss Dawson is Mr Mullan’s employed solicitor. Her affidavits referred only to attempts to adduce evidence from a medical practitioner and to obtain statements from a bank in the Czech Republic.
Dr D provided a short report dated 16 November 2007, in relation to a consultation with the wife on 4 April 2005. He reported that the wife claimed that the husband had punched her on the nose the previous evening and had “physically abused her in the past”. He observed “minor swelling on the left side of the nose associated with minor swelling of the nasal mucosa on the left consistent with mild soft tissue injury.”
In oral evidence in chief Dr D said that these injuries were consistent with the wife’s description of the assault by the husband. In cross-examination he agreed that the injuries were consistent with other causes, for example, a situation where the wife fell and struck her nose. He said that the wife required the medical certificate for the primary purpose of documenting the injury.
Miss A is a psychologist who saw the wife on 51 occasions between 16 March 2005 and 27 November 2006. She provided reports dated 9 May 2005 and 12 August 2007. Her first report set out a history which, not surprisingly, was consistent with the version of events given by the wife in these proceedings.
Miss A made a diagnosis of “major depressive disorder, recurrent, severe without psychotic features associated with symptoms of severe anxiety” in her first report. Interestingly, in May 2005 Miss A commented:-
“In my opinion she is not safe in the house with her husband who continues to drink. However she has nowhere else to go.”
Obviously the wife did not see fit to inform Miss A that she had the option of living at the N premises, as she had done previously. In fact the wife took up permanent residence in the N home on 25 May 2005, that is, only two weeks after Miss A made this comment. This is a further example of my reasons for doubt as to the wife’s credit.
In her May 2005 report Miss A foreshadowed that the wife’s current “stress” may develop into post traumatic stress disorder. In her August 2007 report, Miss A arrived at a diagnosis of post traumatic stress disorder, based on “symptoms that unfolded in later sessions…”
Miss A expressed the opinion that the wife’s condition was “well stabilised” by the conclusion of the therapy sessions in November 2006. She was of the view that there could be “no guarantee that these symptoms could not be reactivated in the future.”
In oral evidence in chief Miss A stated that she never observed any indication of an alcohol problem in the wife. She said also that she “would be very surprised” if the wife had experienced panic attacks at the beginning of her relationship with the husband. This comment related to a report by a psychiatrist, Dr T, who carried out an assessment of the wife in the case for the husband. Dr T reported that the wife told him that she had experienced such symptoms at the commencement of the relationship.
In cross-examination Miss A agreed that she accepted as truthful the history provided to her by the wife. She confirmed that she was “pretty well symptom free by the time we finished.”
The Respondent, the husband, relied on the following affidavits:
(1)The husband sworn 26 April 2006, 25 September 2007 and 10 June 2008;
(2) Mrs JD (first wife) sworn 29 August 2005;
(3) Ms PD (daughter) sworn 30 August 2005
(4)Mr S (former employee of AG Pty Limited) sworn 5 October 2005;
(5)Ms L (account for the husband and his companies) sworn 4 December 2006;
(6) Dr T (psychiatrist) sworn 26 February 2008
Mrs JD gave evidence that she visited the husband at the M premises on approximately twenty occasions between February 2005 and the date of swearing of her affidavit, usually accompanied by her daughter PD. She said that she saw the wife at the premises on approximately three occasions. On one such occasion she left after being verbally abused by the wife. She said that she started to visit the husband only because he asked her to do so. She said that he told her that he was afraid for his life, because the wife had threatened to kill him.
In cross-examination Mrs JD said that her daughter PD was with her on all but one of her visits to the husband. She said that the husband told her that the wife “drank a lot and got very violent” and that she saw “scratches and punch marks on him”. She said that she “did not detect any sign that he had been drinking” on an occasion when the husband fell down the stairs, when she and her daughter were summoned to the premises by the wife.
Miss PD gave evidence that she rarely saw the wife when she visited her father at M prior to February 2005. She said that she saw the wife at the premises on about one in ten of her visits between February and May 2005. She said that she observed her to be under the influence of alcohol. She said she had been subjected to verbal abuse by the wife on more than one occasion. She said that she also observed her father to be affected by alcohol on occasions.
Miss PD recounted an incident in March 2005 when the wife phoned her and asked for help, as her father had fallen down the stairs. She said that she went to the M premises with her mother and sister. They found the husband lying at the bottom on a flight of stairs, saying “She pushed me, she pushed me”.
Miss PD said that she observed scratches on her father’s back early in April 2005, when he changed his shirt prior to going out for lunch. When she asked him what had happened he said “[the wife] did it to me. She scratched me. She never stops hitting me”. This complaint followed an earlier occasion in March 2005, when Miss PD observed her father bleeding from the head. When she asked him what had happened he said: “[the wife] kept hitting me with a shoe”.
In cross-examination Miss PD said that she visited her father approximately once per fortnight between February and August 2005. She said that she formed the view that he was intoxicated on some occasions when she attended the premises with her mother. She said that her father seemed to be affected by alcohol on approximately 60% to 70% of the occasions when she visited him, but not necessarily intoxicated. Miss PD said that she “had the impression that he had some drink” on the occasion when her father fell down the stairs.
Miss PD said that she could not recall any occasion, on which she was accompanied by her mother, when she saw the wife drinking alcohol. She estimated that she observed the wife to be “drunk” on approximately 50% of the occasions when she visited her father.
I found Mrs JD and Miss PD to be impressive witnesses and I accept their evidence. I am unconvinced by the criticisms levelled at their evidence in the written submissions on behalf of the wife.
It was suggested on behalf of the wife that the evidence of these two witnesses was in conflict as to the number of times Miss PD attended the premises at M and the frequency with which she and her mother were there together. I attach little significance to any such numerical inconsistency. It is clear that they attended the premises together on multiple occasions. It is equally clear that it is quite possible that Miss PD visited her father without her mother. In fact, she was not asked how many times she visited her father alone and in company with her mother.
It was also suggested that there was a conflict in their evidence as to whether the husband was affected by alcohol when they were both at the premises. In fact, Mrs JD was only asked for her observation as to the husband’s state of sobriety on one occasion, being the time when he fell down the stairs.
It was further suggested that there was a conflict in their evidence as to whether they observed the wife drinking during the period when they were attending the M premises regularly. In fact, Mrs JD was not asked whether she observed the wife drinking or under the influence of alcohol.
Mr S gave evidence that he commenced employment in 1983, in the AG business purchased by the husband’s company in 1986. In his affidavit he gave a detailed account of his duties.
Mr S said that he never saw the wife do any physical work in the business, as had been the case with the husband’s first wife. He said that the husband insisted that neither of his wives carry out any such physical labour.
Mr S said that neither of the parties gave him daily directions in relation to his duties. He said that approximately once per week one of them told him to attend certain premises to collect film. He said that he was very familiar with his run and did not require any such direction.
Mr S described arguments which he witnessed between the parties, after they had both been drinking alcohol. He said that he saw the wife scream at the husband and throw his belongings out of the house. He said that there were “turbulent times” when they were together.
Mr S described two attempts by the wife to enlist his assistance with her case. In his affidavit he deposed as follows:
“8. In February 2005 I walked from my home which is in the main village area of central [D] and was greeted by the wife. I said to her “Hello [Ms Diotr]. I haven’t seen you for some time. What are you doing?” She replied “I have moved back in with [the husband]. I have been told by my solicitor to move back in and stay in the home so that I can get a fair share when the divorce happens. She also told me to spend as much time up here as possible and be seen as a local’. We bid each other farewell.
9. In June 2005 the wife and her daughter called to my home and spent about one hour talking to me. The wife said to me “[the husband’s] daughter has started coming around and getting [the husband] drunk and telling him to sign blank cheques so that she can get money from him. She keeps trying to get him drunk. I am frightened that I will not be able to get my superannuation and that the daughter and the ex wife will get it.” The wife continued raising allegations against the husband and his former wife [Mrs JD] and their daughter [PD]. I was not able to help the wife and give evidence for the hearing in a way which she suggested I should. I refused to assist her notwithstanding that the husband and I had parted on bad terms when my employment with the company was terminated.”
I accept this evidence of Mr S. I am satisfied that the wife indicated to him that she was motivated to extract the maximum sum possible from these proceedings. I am satisfied that she attempted to enlist his support for her case. These matters did nothing to enhance my view of the wife’s credit.
Miss PD denied convincingly that she ever encouraged her father to drink or to sign blank cheques. She said that she frequently argued with him about his alcohol abuse. I thus reject any suggestion that the wife had a legitimate basis for these allegations.
In cross-examination Mr S said that the business systems were in place “years before [the wife] came onto the scene.” He said that “he had very little communication with her” and did not see her carrying out the duties which she described in her affidavit.
I found Mr S to be an impressive witness, who was not shaken in cross-examination. I have no hesitation in accepting his evidence. It follows that I do not accept any evidence given by the wife which conflicted with that of Mr S. I am thus left with further doubts as to her credit.
Dr T carried out a clinical evaluation of the wife on 12 November 2007 and prepared a report dated 4 December 2007. He assessed that:
“she was not manifesting significant symptoms of a major psychiatric disorder, that is, she did not manifest significant active symptoms of a major mood, anxiety or psychotic disorder. She did, however, endorse infrequent mild episodes of panic attacks characterised by palpitations and shortness of breath. She specifically denied having re-experiences of prior traumas, avoidant behaviour, hyper vigilance or startle and thus I was unable to conclude a diagnosis of post traumatic stress disorder. She describes experiencing depressive symptoms in 1997 from which she fully recovered.”
Dr T also reported:
“She describes the onset of symptoms consistent with a depressive disorder in about 1996 following separation from her first husband, these symptoms lasting approximately six months, resolving spontaneously and without significant psychiatric or psychological intervention. She describes at the same time the emergence of panic attacks which have persisted throughout her relationship with her second husband; but which persisted at the time that she saw me, albeit infrequently”.
Dr T reported further:
“With regard to causation, there is evidence that the wife has, prior to marrying her second husband, experienced an episode of depression. However, it appears by her account that she fully recovered from these depressive symptoms. There is also evidence to conclude that she had suffered from panic attacks that commenced prior to her relationship with her husband and continued to date, albeit, in an intinuated form. Thus, there is some evidence to suggest that the wife suffers from a pre-existing condition, that being panic attacks of a relatively mild nature preceding her relationship with the husband. Her description is that in the context of the breakdown of her relationship with the husband, due to multiple stresses derived from her relationship with him, a depressive disorder emerged with ongoing anxiety symptoms. In my opinion, having regard to the temporal relationship between her marriage and the onset of depressive symptoms and if it is to be accepted that the husband was abusing alcohol, it would be reasonable to be of the view that the kinds of stresses that she described would be significant contributing factors to the development of a depressive disorder. Notwithstanding this, she is now essentially recovered from these symptoms and does not manifest such condition at the time that I saw her.”
After conferring on 2 June 2008, Dr T and Miss A prepared a joint statement in which they reported as follows:- (Exhibit 21)
“1.That Dr [T] and Miss [A] agree that [the wife] suffered from a diagnosable psychiatric disorder characterised by depression and anxiety symptoms related to her relationship with her husband.
2.Both Dr [T] and Miss [A] agree that with treatment she has essentially recovered from these symptoms.
3.Miss [A] believed that [the wife] met criteria for a diagnosis of post traumatic stress disorder at the time that she saw her. Dr [T] was unable to conclude such a diagnosis although Dr [T] acknowledged that she had an anxiety disorder.
4.Miss [A] was unaware of panic attacks preceding her second marriage. Dr [T] obtained a history of panic attacks preceding her second marriage.”
An independent expert, Mr P, carried out valuations of the following entities:
·AG Pty Limited
·T Holdings Pty Limited
·Diotr Family Trust
·R Holdings Pty Limited
·R Holdings Superannuation Fund
The original report was prepared on 19 July 2006 and updated by Mr P and his colleague, Ms F, on 6 June 2008.
In the report of 19 July 2006 Mr P’s valuations are as follows:
1.
AG Pty Limited
$863,853
2.
T Holdings Pty Limited
$826,873
3.
Diotr Family Trust
$826,873
4.
R Holdings Pty Limited
Nil
5.
R Holdings Superannuation Fund
$292,231
Mr P noted that the value of the company F Holdings Pty Limited was “included in the value of [Diotr] Family Trust”, which would follow as the company is the trustee. The difference in the values of the trust and the company AG Pty Limited arose from the inclusion of two loans by the husband to that company and T Holdings Pty Limited, together with a debt owed by the wife to the company. It is not the case that different assets back the value of these two entitles. In each instance the principal asset is the M property, of which AG Pty Limited is the registered proprietor.
In the updating report of 6 June 2008 the only change was to the value of the superannuation fund. Mr P and Ms F valued the husband’s and the wife’s interests respectively at $123,729 and $17,297.
Another colleague of Mr P, Mr R, provided a report dated 27 February 2007 as to the likely taxation consequences of an order that the husband and/or AG Pty Limited sell assets for the purpose of making a payment to the wife. Mr R concluded that the most favourable outcome would be a taxation liability of $114,164 for the company.
In terms of the amount of cash available to the husband after payment of tax, Mr R identified six possible scenarios. The most favourable outcome was that the husband would have cash of $782,934 and the least favourable result was that he would be left with $547,243.
Approach to These Proceedings
According to guidelines established through a series of leading decisions, the Court is required to determine the following matters on the evidence:
·firstly, the assets, liabilities and financial resources of the parties to the marriage are to be determined
·secondly, all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other
·thirdly, the matters in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution
·finally, an order under section 79 must not be made unless the Court is satisfied that, in all the circumstances, it is just and equitable to make the order.
The Assets, Liabilities and Financial Resources
The Assets
It was agreed that the parties hold the following assets, with the values as set out below:
1.
Diotr Family Trust
$826,873
2.
R Holdings Superannuation Fund bank account as at the date of trial
$4,826
3.
Loan from the husband to T Holdings Pty Limited
$37,000
4.
Money owed by the wife to AG Pty Limited
$8,370
5.
Money sent to Czech Republic and retained by the wife at the date of separation
$4,750
There was a dispute as to the following assets:
1.
Loan from the husband to AG Pty Limited
$5,739
2.
Money withdrawn by the husband from the R Holdings Superannuation Fund after separation
3.
Money transferred to the Czech Republic by the wife
$56,000
4.
One Gold Bar and 15 Kruger rands allegedly taken by the wife (purchase price)
$40,500
5.
The wife’s superannuation
$21,306
The loan from the husband to AG Pty Limited appeared in the company’s balance sheets, which are attached to the report of Mr P. There was no evidence that this loan has ceased to exist. It is an accounting entry, rather than a tangible asset.
The money in the R Holdings Superannuation Fund came from the sale proceeds of the business conducted by AG Pty Limited. The superannuation fund was established in June 2003, when a sum of $495,778 was deposited into its bank account.
Ms L, the accountant for the husband and the various entities including the superannuation fund, gave evidence that a total of $247,719 was withdrawn from the superannuation fund between 24 September 2003 and 30 June 2004. As noted, it was common ground that the wife lived in the N premises between October 2003 and February 2004. The parties thus lived separately for most of the period during which this sum was expended.
It should be remembered, however, that the wife withdrew $50,000 from the superannuation fund on 28 April 2004 and transferred approximately $40,000 to her son’s bank account in the Czech Republic within one week. She has not returned this money to the superannuation fund.
The parties travelled to the Czech Republic in August/September 2004. There was no suggestion from the wife that she made any contribution to the cost of this trip from her own funds. I accept the husband’s evidence that he withdrew $32,000 in cash between 13 August 2004 and 27 August 2004, to provide spending money for this holiday.
There was no evidence as to the total cost of this trip. It seems to me, however, that the wife can hardly complain about the expenditure of this money, as she shared in the benefit of a holiday in Europe.
According to Mr P’s report of 19 July 2006, the balance of the husband’s account in the superannuation fund was $274,628. The husband thus spent $269,800 in superannuation money in the three year period up to the date of the trial.
The husband said that he carried out repairs to the factory premises but he could produce only one receipt to verify this claim. His evidence was that the tradesmen required payment in cash. The husband said further that he “hates to be alone” and “spends money on parties on boats with my friends”. Further, he said that he had taken a trip to the Czech Republic to visit his 87 year old mother shortly before the commencement of the trial.
On behalf of the wife it was submitted that it would be fair to allow the husband a sum of $60,000 for living expenses for the eighteen month period between 1 July 2005 and 2 January 2007, when he had no income. This submission relied on his first Financial Statement, where he deposed to total living expenses of $300 per week. The husband’s evidence at trial was that he currently spends $300 per week on food alone. In his Financial Statement sworn on 25 January 2007 the husband deposed to a total weekly expenditure of $1,225, a figure which was not itemised.
The husband’s total rental income was $42,679 in 2007 and amounted to $41,435 for the first six months of 2008. The 2007 rental amounted to approximately $820, which fell well short of the husband’s alleged total weekly expenditure of $1,225.
Overall, it seems to me that the husband spent freely between July 2005 and the date of the trial but he had no income for about half of that period. It appears that his income was insufficient to meet his needs for all but six months of the remainder of this time. It seems to me that there is some force in the submission, on behalf of the husband, that he used his superannuation for the precise purpose for which the fund was established. He supported himself with this money when he retired from the workforce and no longer received an income. In my opinion, it is arbitrary to fix an amount which he was entitled to expend and add back the remainder of these funds to the list of assets. I am reinforced in this conclusion by the wife’s removal and retention of $50,000 and her participation in the trip to the Czech Republic.
I do not accept the submission on behalf of the wife that the husband concealed from her and the court money which was withdrawn from the superannuation fund. There was simply no evidence that he did so. Accordingly, no amount will be added back to the list of assets on account of money withdrawn from the superannuation fund by the husband.
The wife admitted that she transferred $40,028 to her son’s bank account in the Czech Republic on 10 June 2004. She alleged, and the husband denied, that this money was transferred so that the parties could purchase a flat in the Czech Republic. The husband said, persuasively in my view, that if he had wished to purchase property he would have made his own financial arrangements and travelled to the Czech Republic himself. This is another example of my reasons for difficulty with the wife’s credit.
In my opinion the wife was unable satisfactorily to explain several other overseas transfers which appeared in the records of her National Australia Bank account (exhibit 20). These statements show the following additional overseas transfers:
17/7/03 unknown amount
12/5/03 $1,500
10/2/04 unknown amount
26/7/04 $1,000
14/3/05 $3,500
10/5/05 $500
18/5/05 unknown amount
19/5/05 $5,000
23/5/05 $372
4/7/05 $600.
It should be remembered that the wife was employed as a nurse at the time of these transfers. It could well have been that this money came from her salary.
The evidence relating to the gold bars and the Kruger rands consisted solely of the word of one party against the other. I am inclined to accept the husband’s evidence that these items were removed from his custody. In my view, however, the evidence falls short of establishing that the wife removed and has retained these items. I will thus exclude the gold bars and the Kruger rands from the list of assets. There was no evidence of the value of these items in any event.
The wife included a superannuation benefit of $21,366 in her Financial Statement. No reason was advanced on her behalf as to why this benefit should be excluded from the list of assets.
I thus find the assets to be as follows:
Non-Superannuation Assets
1.
Diotr Family Trust
$826,873
2.
Loan from the husband to T Holdings Pty Limited
$37,000
3.
Loan from the husband to AG Pty Limited
$5,739
4.
Money withdrawn by the wife from the superannuation fund and sent to the Czech Republic
$40,028
Superannuation Assets
5.
R Holdings Superannuation Fund
$4,826
6.
The wife’s superannuation
$21,366
Total:
$909,640
Liabilities
The only suggested liability was an amount of $8,370 said to be owed to AG Pty Limited by the wife. I propose to disregard the two loans from the husband, which are accounting adjustments between him and entities under his control. According to the report of Mr P, this debt arose because of the wife’s private use of the company’s BMW motor vehicle. It seems to me that this alleged debt will never be pursued by the company, thus I will disregard this accounting entry for the purposes of determining the value of the net pool of property.
Financial Resources
There was no suggestion that either party has a financial resource.
The Contributions of the Parties
There is no doubt that the husband made a very significant initial financial contribution. His company AG Pty Limited acquired the M property and the business in 1987 or 1988. There was nothing to contradict his evidence that the business traded profitably for many years prior to the commencement of the parties’ relationship. There was no suggestion of any reduction in debts of the husband or the company during their cohabitation.
The wife alleged that she played a substantial role in the day to day operations of the business. Her evidence was contradicted by that of both the husband and Mr S.
The wife claimed that she had a significant involvement in the management and bookkeeping aspects of the business. She also alleged that she participated in the physical processes in the factory and the collection of equipment from various sites.
Both the husband and Mr S were adamant that the wife had no role in the extraction processes which took place in the factory. Mr S said that he did not see the wife cuts strips of film and place the pieces in containers. Further, he said that he did not see the wife tape pieces of film to sheets of paper, as she alleged. Generally, Mr S said: “Some of her description of procedure is correct but some of it is a bit doubtful, for example, testing of chemicals”. The husband said in his oral evidence: “She did not get the technical aspects right at all”. I accept their evidence and I find that the wife exaggerated her role in the physical operations of the business. This is a further example of my reasons for doubt as to her credit.
A large number of documents were tendered in the case for the wife. These records were said to corroborate her evidence of her involvement in the management and bookwork of the business. These documents included cheque butts, bank deposit books, area lists, wages books, shipment books, a cash book and diaries. There is no doubt that these documents contain the wife’s handwriting. The handwriting of other people also appeared in these records.
The husband conceded that these various records contained the wife’s handwriting. He said that his writing is difficult to read and has been the subject of complaint by staff at his bank. He said that he told the wife what to write in the area lists and wage records. He said that she “put in her affidavit what she saw me do”.
I am satisfied and I find, that the wife carried out bookkeeping work for the business. It could well be that she carried out these duties under the guidance or direction of the husband. Nonetheless, it is clear that she had a role in preparing and maintaining various financial records of the business. I accept that she also attended to the company’s banking.
I do not accept that the wife was involved in management decisions or the development of operational systems for the business. Mr S was very clear in his evidence that “we had the same systems for years before she came onto the scene”. He also said “I knew what runs had to be done and they were done”.
It is thus my finding that the wife exaggerated her involvement in the business in order to bolster her case. At the same time, I did not consider that the husband’s evidence as to her role in the business was entirely satisfactory. For example, it was clear that the wife maintained diaries in which she entered messages which could relate only to business matters. The husband’s evidence as to these diaries was vague and illogical.
The wife alleged that she made a contribution by way of domestic support for the husband. Further, she claimed that this contribution was made more difficult because of his conduct while under the influence of alcohol. She relied on the Full Court authority of Kennon & Kennon (1997) FLC 92-752.
The husband said, in effect, that he did his own washing and ironing and was a competent cook. Further, he maintained that the wife’s opportunity to make a domestic contribution was curtailed by her absences from the M home. He strongly denied that there was any basis for the argument pursuant to Kennon & Kennon.
The police reports as to attendances of officers at the M property persuade me that both parties overindulged in alcohol and engaged in arguments from time to time. I have referred already to the incident on 3 June 2004, when the COPS entry noted that the wife “appeared heavily intoxicated” and “was unable to follow simple instructions from the ambulance crew or police”.
Miss PD gave evidence, to which I have already referred, that she observed the wife “drunk” on about 50% of the occasions when she visited her father at the M property. She also described scratch marks on his back, which he attributed to the wife. As already noted, Miss PD gave evidence that her father also complained to her that the wife hit him and pushed him down a flight of stairs.
I have already referred to the evidence of Mrs JD, as to the husband’s complaints to her of the wife’s drinking and violence towards him. She said also that she had seen “scratches and punch marks on him”.
I have also referred to Mr S’s evidence that he witnessed arguments between the parties after they had both drunk alcohol. He said that he saw the wife scream at the husband and throw his belongings out of the M property.
I am therefore of the view that the wife was an active participant in alcohol-fuelled arguments between the parties. Further, I consider that she directed at the husband the violent behaviour referred to by Mrs JD, Miss PD and Mr S. I am of the view that she understated her role in the turbulence of the parties’ relationship. This is another example of my reasons for reservation as to her credit.
The written submissions on behalf of the wife alleged that she “suffered three brutal assaults” at the hands of the husband. It was submitted that these assaults and other reprehensible conduct on the part of the husband made her domestic contribution much more difficult than would otherwise have been the case. It was suggested that she developed post-traumatic stress disorder as a consequence of the husband’s behaviour. This diagnosis of Ms A, of course, was disputed by Dr T.
The wife alleged that, in 1999, the husband pushed her through an open door during an argument. She said that she stumbled backwards and fell on to her head. The husband called an ambulance and she was taken to Hospital. She said that the husband was under the influence of alcohol on this occasion.
The husband’s version of this incident was that the wife “fell down and smashed her face when she was drunk”. He said that she was taken to Hospital and discharged herself later that night.
There was no independent evidence to corroborate either party’s version of this incident. The wife produced no records from the Hospital, which may have been of assistance. Other evidence to which I have referred would suggest that it was certainly possible, even probable, that the wife was under the influence of alcohol on this occasion.
The next incident alleged by the wife was that the husband punched her nose on 3 June 2004. Again, there were conflicting versions as to what occurred that night. As noted, however, the police records indicate that the wife “appeared heavily intoxicated” on this occasion.
The third allegation of an assault was that the husband punched the wife’s nose on 3 or 4 April 2005. The husband alleged that she fell and injured herself while under the influence of alcohol. The evidence of Dr D as to the condition of the wife’s nose was consistent with the version of events given by each of the parties.
More generally, the wife claimed that the husband failed to bathe regularly and was frequently incontinent as a result of alcohol consumption. This allegation of poor personal hygiene was not put to the husband. He admitted to incontinence on one occasion only. It was submitted on behalf of the wife that his statement “I loved the bitch” in cross-examination demonstrated that he “had a complete lack of respect for her”.
On the strength of all of these matters it was suggested that the wife’s contribution as homemaker should be given more weight than would ordinarily be the case, because of the difficult circumstances in which she carried out this role. I am inclined to the view that each of the parties drank to excess and engaged violent, abusive behaviour during the course of a turbulent relationship.
In Kennon & Kennon the Full Court said:
“Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contribution to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within section 79. We prefer this approach to the concept of ‘negative contributions’ which is sometimes referred to in this discussion.”
It seems to me that the wife must accept some responsibility for the conflictual relationship between the parties and the unpleasant incidents which occurred between them. In my opinion it is oversimplistic to lay all of the blame at the feet of the husband and to cast the wife as the victim of the piece. If she made her domestic contribution in difficult circumstances, it is my view that she played a significant role in creating this situation. I am thus not satisfied that the wife’s circumstances fall with “the narrow bank of cases” to which the Full Court referred in Kennon & Kennon.
The wife returned to work as a registered nurse in April 2004. She claimed that she used her earnings for the joint benefit of the husband and herself. The fact that she sent money to her son in the Czech Republic causes me some difficulty with this contention. Further, even on the wife’s own case, she did not live full time with the husband prior to the separation in 2005. It is my view, and I find, that the wife used a proportion of her income from nursing to maintain the household at N and to transmit funds to her son in the Czech Republic.
In my view, the two principal contributions which the wife made were to the bookkeeping and banking aspects of the business and her domestic role in the parties’ household. Her work in the business could be characterised as a contribution to the conservation of the assets of the Diotr Family Trust. I accept that she made a contribution as a homemaker but it is my view that she lived for considerable amounts of time at the N premises, rather than at the M property.
At the same time, however, the wife derived a benefit from the assets and income of the company AG Pty Limited. She shared in the profits of the business and lived in premises owned by the company. She removed $50,000 from the superannuation fund and sent this money to her son in the Czech Republic. She had the benefit of an overseas trip, which appears to have been fully funded by the husband.
The only tangible assets are those of the trust; the money currently in the account of the superannuation fund and the funds transferred to the Czech Republic by the wife. Otherwise, the assets are entries in the accounts of AG Pty Limited and T Holdings Pty Limited.
I assess that the wife made a 15% contribution to the assets of the trust; the money which she withdrew from the superannuation fund and the current balance of the account of the R Holdings Superannuation Fund. It does not seem that there was any significant increase in the value of the wife’s superannuation entitlements during the parties’ cohabitation. It could be said that the husband made an indirect contribution to the conservation of those benefits. Any such contribution, however, would be of insufficient significance to warrant an adjustment of my earlier assessment.
Section 75(2) Factors
I have considered all of the factors set out in section 75(2). I will refer only to those matters which seem to me to be relevant to these proceedings.
The husband is 62 and the wife is 57 years old. The wife alleged that she suffers from post-traumatic stress disorder but she did not suggest that this condition impacts upon her ability to work as a nurse. The husband made no suggestion that he is prevented by any health condition from engaging in gainful employment. Of course, he is of an age at which his working life would be of limited future duration.
According to her Financial Statement sworn on 28 September 2007, the wife earns $1,300 gross per week and has total expenditure of $866 per week. The two Financial Statements filed by the husband and AG Pty Limited disclosed a weekly income of approximately $822, by way of rental for telecommunications equipment. Effectively this income is that of the husband, although the money is paid to the company. It thus seems that both of the parties have the capacity to support themselves financially.
The wife lives with her daughter in the N property. There was no evidence as to the division of financial responsibility in their household.
The wife has superannuation benefits with a current total value of $21,366. The husband now holds superannuation to the value of $4,826. It could be expected that the wife’s superannuation will increase in value, as there was no suggestion that she intends to leave the paid workforce.
It seems to me that there should be no adjustment in favour of either party pursuant to section 75(2).
Result
I thus find that the tangible assets of the parties should be divided in the ratio of 85% to the husband and 15% to the wife. These items of property are:
1.
Diotr Family Trust
$826,873
2.
R Holdings Superannuation Fund
$4,826
3.
Money sent to the Czech Republic by the wife
$40,028
$871,727
85% of that figure equals $740,968 and 15% equals $130,759.
The wife took and retained $40,028 from the R Holdings superannuation fund, which money found its way to the Czech Republic. She is thus entitled to an additional sum of $90,731, by way of a payment from the husband. I will round off this figure to $90,700. I regard this result as just and equitable.
The husband indicated that he wished to have the opportunity to pay out any entitlement of the wife and to avoid an order for sale of the M property. I can see no reason to deny him this opportunity. It was indicated, further, that he would be required to borrow any such funds. I will allow him two months to arrange his financial affairs.
I certify that the preceding one hundred and thirty five (135) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson
Associate:
Date: 20 February 2009
Key Legal Topics
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Family Law
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Equity & Trusts
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