DIXON & ELLIOT
[2020] FamCA 1005
•10 December 2020
FAMILY COURT OF AUSTRALIA
| DIXON & ELLIOT | [2020] FamCA 1005 |
| FAMILY LAW – PROPERTY – Where proceedings commenced in the Court in 1984 but never finalised – Where the husband paid the wife $100,000 following separation – Where the husband contends that this payment constituted a final property settlement and the wife denies this – Where there was no written agreement – Where the husband contends there was a subsequent agreement in 2013 – Where neither of these alleged agreements were binding or approved by the Court – Where nothing in this case justifies departing from the starting point that the date for valuing the property pool is at trial - Where it is just and equitable to make an order adjusting the parties’ property interests – Where contributions during the marriage assessed as equal – Where the husband has made a greater post-separation contribution – Where the s 75(2) factors favour the wife – Where it is just and equitable to make an adjustment in favour of the wife in the vicinity of 30% of the total asset pool – Where the wife’s case was ultimately for 28.5% of the pool –Where the wife to be held to her case as put at trial and an adjustment of 28.5% in favour of the wife is just and equitable. FAMILY LAW – JURISDICTION – Accrued – Single justiciable controversy – Adverse possession claim – Where the husband and wife are each registered proprietors as tenants in common of one half share of a property – Where the husband has been in exclusive possession of the property since 1992 – Where the husband has acquired the wife’s half share in the property by adverse possession from 2007 – Where the husband would not be in a position to seek to have the Registrar vest the land in fee simple in his favour until 2022 -Where property interests are nonetheless able to be altered under s 79 of the Act |
| Family Law Act 1975 (Cth), s 4(1), s 44(3), s 44(4), s 74, s 75(2), s 75(2)(a)(b)(d)(f) (g)(j)(k)(m)(n)(o), s 78, s 79, s 79(1), s 79(2), s 79(4), s 79(4)(a)-(c), s 79(4)(d)-(g), s 80(J)(k), s 85A, s 87, s 87(2), s 90G(1), s 90G(1A), s 90G(1B), s 90X Evidence Act 1995 (Cth), s 81, s 82, s 140, s 140(1), s 140(2) Transfer of Land Act 1958 (Vic), s 42(2)(b), s 60, s 60(1), s 60(2), s 62 Family Law Rules 2004, Rule 11.06 |
| Allen v Roughley (1955) 94 CLR 98 Bradbrook, Adrian et al, Australian Real Property Law (Lawbook Co, 5th edition, 2011) |
| APPLICANT: | Mr Dixon |
| RESPONDENT: | Ms Elliot |
| FILE NUMBER: | MLC | 437 | of | 2018 |
| DATE DELIVERED: | 10 December 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | McEvoy J |
| HEARING DATE: | 6, 7, 8 and 13 November 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Thompson and Mr Moloney |
| SOLICITOR FOR THE APPLICANT: | Frid & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Clutterbuck |
| SOLICITOR FOR THE RESPONDENT: | Turnbull Mylne |
Orders
On or before 4.00 pm on 15 December 2020, the parties are to confer and submit to the Court a joint proposal, or if they are unable to agree, separate proposals for the further conduct of the proceeding, including orders to give effect to these reasons and all consequential matters, including the costs of the proceeding.
The matter is fixed for mention at 4.15pm on 16 December 2020.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dixon & Elliot has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 437 of 2018
| Mr Dixon |
Applicant
And
| Ms Elliot |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties to these proceedings are the applicant, Mr Dixon (the husband) and the respondent, Ms Elliot (the wife). The parties met in around 1970 and commenced a relationship when the wife was about 16 years of age and the husband was about 31 years of age. The wife conceived their first child shortly after the commencement of the relationship, and she was born in 1971. The parties married in mid-1972, and there were three further children of the relationship born in 1973, 1974 and 1976. The second child of the relationship died several weeks after she was born in 1973.
In 1983 the parties separated and the wife left the matrimonial home at 2 B Street, Suburb C, Victoria (2 B Street). Initially two of the three surviving children went with the wife, and the third child joined the wife shortly thereafter.
In February 1984 the wife commenced a proceeding in the Melbourne Registry of this Court seeking custody orders, orders for child maintenance, property orders and restraining orders (the 1984 proceeding). The wife sought that 2 B Street be sold and that she be paid a lump sum amount as ordered by the Court, and that the husband pay her a further lump sum amount in respect of her registered half interest in a property at 4 B Street, Suburb C, Victoria (4 B Street) which she owned as a tenant in common with the husband’s brother.
Interim consent orders were subsequently made which, amongst other things, granted custody of the three children to the wife, required the husband to pay child maintenance, and for the preparation of the case for trial. However the 1984 proceeding was never listed for trial.
The marriage was dissolved by orders of the Court made in September 1985, and in May 1986 the Court made further orders, apparently in the absence of an appearance by the husband. These orders included that the 1984 proceeding be referred to a list of cases for hearing with priority.
Also in 1986, and extending into 1987, the husband made certain monetary payments to the wife, totalling $100,000.
For reasons which are not clear, the 1984 proceeding was not finally heard or determined by the Court and the file was archived at some point after 1986 without any final disposition or final orders being made.
On 16 January 2018, some 34 years after the 1984 proceeding was commenced, the husband filed an Initiating Application in the Federal Circuit Court of Australia naming the wife as the respondent and seeking orders in substance that the 1984 proceeding, so far as it related to property adjustment orders, be reinstated into the active pending cases list, or alternatively for leave to commence a property settlement application out of time pursuant to s 44(4) of the Family Law Act 1975 (Cth) (the Act). That application was subsequently transferred to this Court, and orders were ultimately made by Johns J on 18 March 2019 listing the matter for trial before me, and requiring the filing of pleadings.
The husband’s case
By a Second Further Initiating Application filed 24 July 2019, the husband seeks relief pursuant to Part VIII of the Act and/or in the Court’s accrued or associated jurisdiction based on allegations in his Further Amended Statement of Claim (FASC), essentially as follows:
(a)that to the extent necessary he have leave to proceed under s 44(4) of the Act;
(b)declarations that:
i)on and from 1 July 2002, alternatively 2007, he was the sole owner of 4 B Street by reason of adverse possession of the prior interest of the wife; and
ii)the financial and property interests of the parties are as determined by a settlement which the husband alleged the parties reached in 1986, and/or a subsequent agreement, as varied, which he alleges the parties made in 2013;
(c)orders that:
i)the wife transfer the registered interest in 4 B Street which she had retained to the husband;
ii)alternatively that the wife be ordered specifically to perform the obligations alleged under the terms of the 2013 agreement, as varied, to enable the subdivision of 4 B Street, the front allotment to be sold, and the husband pay the wife $30,000 from the net proceeds of the sale of that front allotment; and
iii)the wife remove a caveat that she has lodged over one of the certificates of title to the 4 B Street property; and
(d)costs.
The case the husband pleaded was, as he has conceded, multi-layered. First, he alleges that the parties reached a financial accommodation in 1986 (the 1986 financial settlement) which involved him paying the wife $100,000 in instalments, the wife continuing to receive half of the rental income from 4 B Street until the final instalment of the $100,000 had been paid, and the wife then transferring her registered half interest in 4 B Street to the husband. The husband contends that at the time of the alleged 1986 financial settlement it was a fair and reasonable settlement of property interests of the parties. It is his case that notwithstanding him having paid the wife $100,000, and the wife having continued to receive half of the rental income of 4 B Street until the $100,000 had been paid in about the middle of 1987, the wife failed to transfer her half interest in 4 B Street to him. The husband alleges that from about the middle of 1987 he has retained the whole of the income from 4 B Street, that he has paid all the outgoings and maintenance costs relating to the property, and that since the date of separation in 1983 the wife has not visited the property, exercised any rights over it, made any contributions to its outgoings, or been involved in any of the residential leasing arrangements in relation to it. The husband alleges that he does not know why no order was ever made by the Court approving the 1986 financial settlement.
Secondly, the husband alleges that in 2012 he decided to sell 4 B Street but he “discovered” that the wife was still the registered proprietor as a tenant in common as to a one half share of the property with him. He alleges that upon becoming aware of this reality, in order to “correct the situation” he organised through his solicitor for an agreement to be executed by the wife pursuant to which the parties’ third daughter, Ms D, was appointed by the wife as her attorney under power to do all things necessary to effect a sale of 4 B Street. The husband alleges that there were terms of that agreement (the alleged 2013 agreement) including that the wife knew that 4 B Street was by this time valued at in excess of $1.5 million, that she acknowledged that she had no claim on the property, and that the husband would pay her $50,000 out of the sale proceeds of 4 B Street.
Thirdly, the husband contends that the alleged 2013 agreement was varied in 2014 to allow him to subdivide 4 B Street and sell the front allotment but retain the rear allotment for the parties’ son, Mr E. The husband alleges that the wife assented to this variation and that she received $20,000 by way of consideration for her assent. The husband contends that in reliance on the varied alleged 2013 agreement and the representations in it, he commenced the necessary steps to subdivide 4 B Street and expended significant sums in this regard. He contends that the wife, in breach of the varied alleged 2013 agreement, wrongfully purported to revoke the power of attorney granted to Ms D and has refused to honour her alleged obligations under it. The husband contends that he is, and has always been, ready and willing to perform his obligations to pay the wife the remaining $30,000 under the varied alleged 2013 agreement.
Further, or alternatively, the husband alleges that at all material times from about the middle of 1992 (by which time he says that he had acquired the other half interest in 4 B Street which had previously been owned by his brother) he has had exclusive occupation and possession of the whole of 4 B Street to the exclusion of the wife, and that he has paid all outgoings, leased the property to various tenants under leases granted solely by him, undertaken at his sole expense all repairs, and received to his own use the whole of the rental income from 4 B Street. The husband relies on s 14(4) of the Limitation of Actions Act 1958 (Vic) (the Limitation Act) and says that by reason of these matters at all times on and from 1 July 2002, or at least from 2007, he had acquired the wife’s registered half interest in 4 B Street by adverse possession or by abandonment, and that the wife is precluded from asserting or claiming any current interest in that property.
The husband also claims that by reason of her conduct from the time of separation until trial the wife is:
(a)estopped from seeking any further adjustment of the financial interests of the parties beyond what she has received or will receive from the husband over the 35 years from the date of separation until the date of trial, under the 1986 financial settlement, the varied 2013 agreement, or otherwise; and
(b)“guilty” of laches and “inexcusable and unexplained delay” in not prosecuting the 1984 proceeding or commencing any other proceeding for adjustment of the financial interests between the parties for more than 30 years and therefore as a matter of discretion is not now entitled to the relief from the Court that she seeks.
The wife’s case
Discerning the wife’s case, and in particular the relief she seeks, is more challenging. As the husband’s case outline submitted, many of the paragraphs of the wife’s pleading were embarrassing in form and substance, and the form of her counterclaim was irregular. However it may fairly be observed that the pleadings of both parties sat uncomfortably in certain respects with, for example, the requirements of Order 13 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), Part 16 of the Federal Court Rules 2011, and Part 27 of the High Court Rules 2004.[1] Nonetheless, doing the best I can, I proceed on the basis that the wife’s case is set out in her Amended Defence and Counterclaim filed 7 June 2019 (so before the final version of the husband’s statement of claim which was filed on 24 July 2019), in her case outline of 4 November 2019, and in her final submissions of 26 November 2019 (albeit that at times this latter document is difficult to follow).
[1] The orders made by Johns J were simply for the filing of pleadings. They did not require substantial compliance with the pleading rules of any other court. They ought, however, to have been taken to require compliance with the general rules of pleading.
In her Amended Defence and Counterclaim filed 7 June 2019 the wife takes issue with almost all of the material allegations of fact in the husband’s then current statement of claim (that filed on 21 May 2019). The wife did not ever file a defence to the husband’s FASC. In broad terms the wife says that there was no financial settlement in 1985 (as originally contended by the husband). Although the wife persistently refers to the non-existence of an agreement in 1985, rather than 1986 as ultimately contended for by the husband, I take her position to be that there was no agreement in 1986 either, and that there could not have been an agreement in 1985 or 1986 because the property pool had not been established at that time. The wife says that there was no agreement at that time or thereafter providing for a just and equitable distribution of the assets of the marriage or which was sanctioned by the Court. She characterises the payments made to her by the husband in 1986-1987 amounting to $100,000 as either spousal maintenance (in circumstances where she had the children), and/or interim property settlement.
The wife says that these payments, as settlement of interim property, were inequitable because she had an equity in 2 B Street, a legal half interest in 4 B Street, that there was never a consideration of the relevant s 79(2), (4) and s 75(2) factors, and that there was no agreement between the parties. She contends that on the evidence available the property portfolio in 1985 would have taken into account the husband’s superannuation as a financial resource, the “contingent asset” of the husband’s compensation for his back injury, his redundancy payment which is said to be in the sum of $205,000, the combined value of 2 and 4 B Street at $235,000 (which figure, as will be seen, is not correct), the rental income stream from 4 B Street, the fact that the husband had been residing and would continue to reside at 2 B Street rent free, and, by way of s 75(2) factors, the fact that the wife was left with the three young children and that there was an income disparity between the parties. The wife says that the payment to her of $100,000 represented less than 32 per cent of the then divisible pool.
Insofar as the alleged 2013 agreement is concerned, the wife accepts that she signed it, but says that it is not a contract that could be the subject of enforcement. She says that the mention of a payment to her of $50,000 was no more than a promise to give her a gift, and not consideration for the performance of an act of transfer. She relies on the doctrine of non est factum in relation to the alleged 2013 agreement, and she denies that there was any variation of the 2013 agreement as the husband alleges. The wife says further that in any event the 2013 agreement would not have been sanctioned by the Court as just and equitable consistently with s 79(2) and (4) of the Act. It is also the wife’s position that the 2013 agreement is not an agreement that could be binding upon the parties pursuant to s 90G(1A) of the Act, and that it is not an enforceable agreement for this reason as well.
On the subject of the husband’s adverse possession claim, the wife’s position is ultimately that the question of adverse possession is not determinative of the issues falling to be considered pursuant to s 79 of the Act. She says that both she and the husband have good title to 4 B Street and that, for the purposes of s 14(1) of the Limitation Act, the husband is not in adverse possession of that property as against her as someone otherwise entitled to the land. Her position is that both she and the husband are entitled to the land, and there is no adverse possessor. She submits that proceedings under s 79 of the Act remain on foot, pursuant to which she seeks a judicial determination altering the interests of the parties to the marriage in the property of the marriage, which property includes 4 B Street.
As to whether she is guilty of laches, the wife says that she is not seeking equitable relief, only an alteration of property interests for the purposes of s 79 of the Act. She says that it is in fact the husband who has sat on his hands in relation to the 1984 proceeding, knowing that the she was on title to 4 B Street when she did not have that knowledge. The wife points to the fact that the husband was non-compliant with Court orders, that he did not appear, that he did not make proper disclosure, and that a costs order was made against him. It is the wife’s case that any operation of the doctrine of laches is against the husband, not against her. She also says that principles of representational estoppel do not operate in the manner contended for by the husband.
Insofar as the final relief sought by the wife is concerned, there is significant imprecision. By her Amended Response filed 3 June 2019 the wife seeks the following orders:
(a)a declaration that the sum of $100,000 received by the wife in or about 1986 be categorised as partial property settlement;
(b)the property at 4 B Street be sold and after the usual proceeds of sale be divided 50% to the husband and 50% to the wife;
(c)that the wife receive from the sale of 4 B Street the additional sum of $285,000 representing 10% of the sworn value of 2 B Street to be adjusted against the proceeds of sale of 4 B Street;
(d)a splitting order that the wife receive 30% of the combined superannuation of the parties;
(e)consequential orders giving effect to the above; and
(f)costs.
In her Amended Defence and Counterclaim of 7 June 2019 the wife seeks a declaration and an adjustment of the property of the parties pursuant to s 79(2) and s 79(4) of the Act, and that there be a just and equitable settlement of property between the parties assessing values at the date of trial. She otherwise seeks the relief set out in her Amended Response of 3 June 2019, together with “an order that the property at 4 B Street be sold to effect 60% to [her] and 40% to [the husband] (such adjustment representing a 17.5% adjustment of the value of the property at 2 B Street, allocated to 4 B Street)”. How this latter order would sit with the other relief the wife seeks in relation to 2 and 4 B Street is not explained.
Leaving to one side those matters no longer in issue, in her amended case outline of 4 November 2019 the wife seeks:
(a)“a declaration and an adjustment of the property of the parties pursuant to s 79(2) and s 79(4) that there be a just and equitable settlement of property between the parties assessing values at the date of trial”;
(b)an order that she receive to her benefit 50% of the current value of 4 B Street;
(c)an order that she receive to her benefit 10% of the current value of 2 B Street;
(d)an order that 4 B Street be sold “to effect 60% to [the wife] and 40% to [the husband] or such adjustment as to represent a 17.5% adjustment of the value of the property at 2 B Street”;
(e)“a declaration as to the categorisation of the monies already received by [the wife] as either division of joint matrimonial funds, spousal maintenance or partial property settlement”;
(f)an order pursuant to s 90X of the Act splitting the superannuation to give effect to 30% to the wife;
(g)“consequential orders giving effect to the above”; and
(h)costs.
Paragraph 67(m) of the wife’s final submissions refer to the terms of the proposed order sought by the wife as giving her “a reasonable distribution of 30% of the Applicant Husband’s superannuation, together with a reasonable interest in no. 4 B Street (at 50% of the property upon sale)”.
However in the last paragraph of her final submissions the final orders the wife seeks are described as follows:
(a)the husband’s application be dismissed;
(b)a “property settlement” which is just and equitable, taking into account:
i)“an apportionment” of the husband’s interest in 2 B Street to her in the amount of 30%, acknowledging however that:
ii)“an appropriate order would be 50% of the pool, that is, the pool representing [4 B Street], however, given the current value of superannuation, [which] appears to have diminished, then between 30% and 50% sought would be appropriate”.
By contrast, probably the clearest articulation of the final relief sought by the wife is that found at paragraph 14 of her final submissions, under the heading “Amended Application and Amended Response”, where she seeks:
(a)an order that the husband’s application be dismissed; and
(b)an order or orders that pursuant to s 79 of the Act the interests of the parties in the pool be adjusted:
i)50% to each over 4 B Street;
ii)10% of the value of 2 B Street (to be reflected by payment out of the sale proceeds of 4 B Street); and
iii)a splitting order of 30% of the combined superannuation of the parties.
It is unsatisfactory that the relief sought by the wife is not clearly articulated. Nonetheless, having regard to the various formulations proffered, and doing the best I can, I proceed on the basis that the wife seeks the relief identified in the above paragraph, together with her costs of the proceeding.
Matters for determination
The parties having agreed that the husband should be able to proceed with his claims pursuant to s 44(3) and (4) of the Act, and that the Court has subject matter jurisdiction to entertain all of the husband’s claims, the following issues arise for determination. The first is whether, as the husband contends, the parties reached a final financial accommodation in 1986 which was not approved by the Court but whereby the husband agreed to pay the wife $100,000 by way of property settlement in return for her agreement to allow him to retain his sole registered interest in 2 B Street and for her to transfer to him her registered half interest in 4 B Street. The validity of the alleged 2013 agreement, and its alleged variation, must also be considered as part of the husband’s case in this respect.
For reasons I will explain, I am not able to conclude that the parties reached a final financial accommodation in 1986, or that the alleged 2013 agreement, or any variation of it, are able to be enforced. Indeed, the husband’s case in relation to the various agreements has the appearance of an elaborate construct.
It therefore falls to determine the s 79 application on its merits, having regard to the factors set out in s 79(4) of the Act as they existed at the time of the hearing and according to the law presently in force. Consistently with established principle, this would be so regardless of whether or not the parties had entered an agreement in 1986, or thereafter, which had not been approved by the Court under the provisions of the Act or formalised in consent orders. The existing legal and equitable interests of the parties must be identified, and consideration then given to whether in all the circumstances it would be just and equitable for the purposes of s 79(2) of the Act to make orders altering the interests of the parties in the property of the marriage. If it is appropriate to make orders altering the interests of the parties in the property of the marriage it will be necessary to assess the contributions made by the parties at the commencement of and during the marriage, as well as after separation, pursuant to s 79(4) of the Act, together with the matters to be taken into account pursuant to s 75(2) of the Act. Insofar as contributions are concerned, it will be necessary to understand the changes in the composition and value of the property pool, so that post-separation contributions can be properly assessed. The husband’s claim that he has acquired 4 B Street by operation of the doctrine of adverse possession, and his arguments in relation to equitable estoppel and laches, also fall to be considered in this context.
As will be seen, I am satisfied that it is just and equitable to make orders altering the interests of the parties in the property of the marriage. Further, having taken into account the contributions required to be considered pursuant to s 79(4) of the Act, and the matters referred to in s 75(2) of the Act insofar as they are relevant, I am satisfied that relief broadly consistent with that sought by the wife would be just and equitable. The parties will be directed to furnish a draft minute of orders to give effect to the relief that the wife has sought, and other consequential matters. The matter will be listed for mention and the making of final orders.
Material Relied Upon
The husband relied upon the following documents:
(a)Second Further Amended Initiating Application with FASC attached, filed 24 July 2019;
(b)Reply and Defence to Counterclaim dated 1 July 2019;
(c)Trial affidavit dated 20 May 2019;
(d)Affidavit in Reply dated 2 June 2019;
(e)Supplementary Affidavit filed 24 July 2019;
(f)Affidavit of Mr E dated 18 May 2019;
(g)Affidavit of Ms D dated 18 May 2019;
(h)Affidavit in Reply to Wife’s Trial Affidavit of Ms D dated 8 July 2019;
(i)Financial Statement of husband dated 16 January 2018;
(j)Documents in 1984 Court file in proceedings M1000 of 1984:
i)Wife’s Application for Custody, Maintenance and Restraining Order filed 6 February 1984;
ii)Wife’s Affidavit sworn 23 January 1984 and filed 6 February 1984;
iii)Marriage Certificate filed 6 February 1984;
iv)Wife’s Statement of Financial Circumstances dated 23 January 1984 and filed 6 February 1984;
v)Wife’s Affidavit sworn 21 February 1984 and filed 22 February 1984;
vi)Husband’s Statement of Financial Circumstances sworn and filed 9 April 1984;
vii)Two Affidavits of the Husband both sworn and filed 9 April 1984;
viii)Orders of Emery J dated 9 April 1984;
ix)Application for Dissolution of Marriage filed 4 June 1985;
x)Wife’s Statement of Financial Circumstances sworn and filed 28 May 1986; and
xi)Orders of Registrar Edney dated 2 June 1986;
(k)Affidavit of Mr F, Registered Valuer dated 18 July 2019;
(l)Case outline filed 25 July 2019;
(m)Case outline variation of 1 November 2019;
(n)Submissions on preliminary issue of jurisdiction and leave to proceed dated 6 November 2019; and
(o)Final submissions dated 13 December 2019.
The wife relied on the following documents:
(a)Amended Response in the Federal Circuit Court form filed 3 June 2019;
(b)Financial Statement filed 7 March 2018;
(c)Financial Statement filed 3 June 2019;
(d)Affidavit of the wife filed 3 June 2019;
(e)Trial Affidavit filed 4 June 2019;
(f)Amended Defence and Counterclaim filed 7 June 2019;
(g)Amended case outline filed 4 November 2019;
(h)Final submissions dated 26 November 2019; and
(i)Final submissions in reply filed 16 December 2019.
It should be observed that the cases the parties advanced in outline before the trial appeared to have narrowed somewhat in their final submissions. I proceed on the basis that the parties’ final submissions reflect the way that they put their cases in light of the evidence that was adduced at trial.
Background Facts
The husband was born in Europe in 1939 and immigrated to Australia with his father and brothers when he was 14 years of age. The wife was born in Australia in 1954. As has been mentioned, the husband and the wife first met in about 1970 and began a relationship shortly thereafter.[2] There was a significant age difference between them at the commencement of the relationship, the wife being only about 16 and the husband about 31. At the time they met the husband was working as a forklift driver in Melbourne, and the wife was working in a milk bar.[3]
[2] Affidavit of Mr Dixon sworn 20 May 2019, paragraphs 2, 3 and 23 (Husband’s trial affidavit); Affidavit of Ms Elliot affirmed 4 June 2019, paragraph 4 (Wife’s trial affidavit).
[3] Husband’s trial affidavit, paragraphs 6 and 23; Wife’s trial affidavit, paragraph 4.
The wife fell pregnant very quickly, the parties’ first child being conceived prior to their marriage in mid-1972. By this time the parties’ first child was about 7 months old. As has also been mentioned, there were subsequently three further children, one of whom passed away shortly after birth.[4]
[4] Husband’s trial affidavit, paragraphs 27 to 30; Wife’s trial affidavit, paragraph 41.
The wife gave evidence in her trial affidavit of significant physical and sexual violence prior to and during the course of the marriage, but this evidence is the subject of comprehensive denials by the husband. It is also the subject of objection, primarily on the ground of relevance. In the end none of the wife’s allegations were put to the father in cross examination, and he was not challenged on his denials. The wife did however, in answer to a question in cross examination, say that by the time she left the husband she “just wanted out of that marriage so badly”, and that she did not like her life with the husband and lived in fear of him every day.[5] It is noteworthy that she was not challenged in any way on this evidence.
[5] Transcript 8 November 2019, p.53, lines 30-32.
Just prior to the parties’ marriage in 1972, 2 B Street was purchased and registered in the husband’s sole name.[6] The husband suggests that he had the property some months prior to the wedding.[7] However, upon being presented with the certificate of title for the property during cross-examination he accepted that the transfer of the property into his name occurred on 24 May 1972, three days prior to the parties’ marriage.[8] The parties and their children lived together in this property until separation.
[6] Husband’s trial affidavit, paragraph 21; Wife’s trial affidavit, paragraph 18.
[7] Transcript 6 November 2019, p.53 lines 35-37; Husband’s trial affidavit, paragraph 21.
[8] Transcript 6 November 2019, p.53 lines 39-40.
For the duration of the marriage the wife was a home-maker and the primary carer of the children with a brief period in paid employment, while the husband continued to work.[9] It is agreed that the husband also undertook renovations of 2 B Street during the marriage. The wife says that she assisted in these renovations, however the extent of her contributions to the improvement of this property is contested.
[9] Husband’s trial affidavit, paragraph 31; Wife’s trial affidavit, paragraphs 17, 41 and 60.
In November 1975 the property next door at 4 B Street was purchased and registered equally in the names of the husband’s brother, Mr H Dixon, and the wife, as tenants in common.[10] It is agreed that Mr H Dixon provided at least half of the purchase price of $36,250, and related purchase costs. The husband says that the other half of these funds were provided by him, although the wife’s position was that Mr H paid for the entire property, and that he had given her the half share as a gift. It will be necessary to return to the subject of how the wife came to have the half share in 4 B Street.
[10] Wife’s trial affidavit, paragraphs 31 and 32; Wife’s amended defence and counterclaim filed 7 June 2019, paragraphs 11 and 12 (Wife’s amended defence and counterclaim); Husband’s trial affidavit, paragraph 33; Husband’s second further amended initiating application with further amended statement of claim attached, filed 24 July 2019, paragraph 11 (FASC).
After the parties’ separation in 1983,[11] and then divorce on 3 September 1985,[12] the husband made payments to the wife amounting to $100,000.[13] The exact timing of these payments, whether they were made in instalments or not, and how they are properly to be characterised (namely as final property settlement on the husband’s case, or as spousal maintenance or partial property settlement on the wife’s case) are the subject of dispute. It will be necessary to return to aspects of this matter.
[11] The wife says this occurred on in January 1983 (Wife’s trial affidavit, paragraph 66) while the husband says this occurred in October 1983 (Husband’s trial affidavit, paragraph 49).
[12] Wife’s trial affidavit, paragraph 66; Husband’s trial affidavit, paragraph 14.
[13] Husband’s trial affidavit, paragraph 54; Wife’s trial affidavit, paragraph 69, although she says only that she built a house “using $100,000 that came from our money in the bank”.
In 1987 the wife used $75,000 of this money to purchase land and to build a house in Suburb J.[14] A few years later the wife remarried, and the Suburb J property was sold for about $90,000 in 1991.[15] The wife and her second husband bought a larger house in Suburb J for about $145,000 and sold this property for $138,000 before re-locating to Queensland in 1993 with the two younger children.[16] The eldest child, who was then around 22 years old, remained living in Suburb J with her then partner.[17] The wife, her second husband, and the two younger children who by then must have been aged about 19 and 17 respectively, moved into a rental property in south-east Queensland before buying and relocating to a house in Suburb L.[18] The wife deposes that “after some time” the couple separated and her second husband moved back to Melbourne.[19] She says that she ‘believes’ that she divorced her second husband but says that she does not have a copy of the Decree.[20] It is her evidence that there was no property settlement upon separation as her second husband did not contribute financially for very long, there was no property accumulated during the relationship, and he did not have any equity in the house.[21]
[14] Wife’s trial affidavit, paragraph 69.
[15] Wife’s trial affidavit, paragraph 70.
[16] Wife’s trial affidavit, paragraph 70.
[17] Wife’s trial affidavit, paragraph 70.
[18] Wife’s trial affidavit, paragraphs 70 and 71.
[19] Wife’s trial affidavit, paragraph 71. When pressed to provide a date of separation during cross-examination, the wife confirmed that she could not remember the date, saying only that it was a long time ago: Transcript 8 November 209, p.10 lines 35-39.
[20] Wife’s trial affidavit, paragraph 71.
[21] Wife’s trial affidavit, paragraphs 71 to 72; Wife’s final submissions, filed 26 November 2019, paragraph 67(b) (Wife’s final submissions).
The wife does not provide any evidence as to the purchase price of the Suburb L house, or how much she realised on its sale. She says only that she sold that property as she could no longer afford the mortgage on her own.[22] The husband is critical of the wife for failing to disclose detailed information about her marriage to her second husband and whether she had sought to obtain a property settlement from him.[23] However, beyond seeking to establish the date of their separation, counsel for the husband did not cross examine the wife about her relationship with her second husband, any alleged property settlement with him, or any other benefit she may have received from him.[24]
[22] Wife’s trial affidavit, paragraph 72; Transcript 8 November 2019, p.60, lines 1-6.
[23] Husband’s trial affidavit, paragraph 88; Husband’s final submissions, filed 13 November 2019, footnote 11 (Husband’s final submissions).
[24] Transcript 8 November 2019, p.10 lines 31-39.
The wife deposes that “at some point” thereafter, when the two younger children were adults, the husband purchased a home for them in south-east Queensland and they moved into it.[25] It is not clear how long into their adulthood the children remained living with the wife. It is, however, clear that, to use the words of counsel for the husband, the wife consistently had “financial difficulties” after she separated from the husband.[26] In cross examination the wife accepted that by October 2001 she was “in a bad way”, could not pay her debts, and owed money to various finance companies and other creditors.[27] It was the wife’s evidence that she lost her job at this time and that by reason of her limited education she had never been able to get a good job.[28] She said that she had no one to help her organise her affairs, and that the only way out was to go into bankruptcy.[29]
[25] Wife’s trial affidavit, paragraph 73.
[26] Transcript 8 November 209, p.53 lines 45-46; p.54.
[27] Transcript 8 November 209, p.54 lines 1-6.
[28] Transcript 8 November 209, p.54 lines 7-24.
[29] Transcript 8 November 209, p.54 lines 25-38.
The husband produced the wife’s bankruptcy petition.[30] Her date of bankruptcy is recorded as 4 October 2001. The statement of affairs nominates a series of matters as the primary cause of insolvency, including “unemployment or loss of income”, “relationship breakdowns”, and “excessive use of credit facilities including losses on repossessions high interest payments and pressure selling”. The wife’s evidence in cross examination about her bankruptcy is broadly consistent with what she disclosed in her statement of affairs.[31] However, the wife also said that after she had sold the house she had bought in Queensland with her second husband she bought another cheaper property, a unit in Suburb W.[32] She was not able to remember precisely how much this property cost, but thought that perhaps she had paid about $90,000-$100,000 for it.[33] She accepted that although she would have had a small mortgage on that property, she ended up selling it because she was always in and out of jobs and could not afford to keep it.[34]
[30] Husband’s trial affidavit, paragraph 41 and annexure [Mr Dixon-4].
[31] Transcript 8 November 209, p.59-60.
[32] Transcript 8 November 209, p 60.
[33] Transcript 8 November 209, p.60.
[34] Transcript 8 November 209, p. 60-61.
It would seem that since her bankruptcy the wife has rented accommodation of one kind or another, and has not been in a position to afford to purchase another property.[35] Her evidence is that she has used all of the money that she has had on general living expenses because as both a full time parent and a part time worker her income has been very minimal.[36] At the time of trial she worked casually in sales and lives in south-east Queensland with a friend, Mr M, from whom she rents a room for $100 a week.[37] It will be necessary to return to the nature of the wife’s relationship with Mr M.
[35] Wife’s trial affidavit, paragraph 78; Wife’s final submissions, paragraphs 67(b) and (g).
[36] Wife’s trial affidavit, paragraph 79.
[37] Wife’s trial affidavit, paragraphs 78 and 80; Transcript 8 November 2019, p.10 lines 1-11.
The husband retired from his job in October 1992 due to a serious injury, and has not worked since this time.[38] He has continued to live at 2 B Street and to collect rental income from 4 B Street.[39] He provides no evidence of having re-partnered.
[38] Husband’s trial affidavit, paragraph 6.
[39] Husband’s trial affidavit, paragraph 85.
The 1984 Proceedings
On 6 February 1984 the wife commenced proceedings in this Court, seeking orders for custody (as it was referred to then) of the three children, child maintenance, a restraining order against the husband and property settlement including orders that 2 B Street be sold and the wife be paid a lump sum from the proceeds of sale as the Court thought appropriate and that she also receive a lump sum payment from the husband in respect of her interest in the 4 B Street property. In support of this application the wife swore two affidavits, dated 23 January 1984 and 21 February 1984, together with a Statement of Financial Circumstances dated 23 January 1984.
In response, the husband swore and filed two affidavits and a Statement of Financial Circumstances on 9 April 1984.
Following a hearing held on 9 April 1984, during which both parties were represented, Emery J made orders by consent providing for:
(a)custody of the three children to be granted to the wife;
(b)the husband to pay $60 per week in child maintenance;
(c)the husband to have access to the children one day per week on either Saturday or Sunday from 12 noon to 6:30pm;
(d)the husband to be restrained from entering any premises occupied by the wife, save for periods of access with the children;
(e)the parties to make bona fide endeavours to reach agreement on the matters in issue between them both in relation to the children and property settlement;
(f)directions enabling the matter to be prepared for trial, including requiring the filing of trial material and providing for discovery and valuations of four properties to be undertaken (2, 4 and 6 B Street, Suburb C, and N Street, Suburb O); and
(g)the parties to have liberty to apply.
On 4 June 1985 the wife made an application for dissolution of the marriage, and a decree nisi issued on 3 September 1985, with effect from 4 October 1985.
On 28 May 1986, the wife filed a further sworn Statement of Financial Circumstances.
On 2 June 1986 a registrar, upon hearing the mother who appeared through her lawyer and where no appearance for the father was recorded, made further orders including that:
(a)costs of $150 be ordered against the husband for his non-attendance;
(b)the matter be referred to the Short Defended List of cases with priority;
(c)that a sealed copy of this order be served upon the husband;
(d)the parties otherwise comply with the existing orders of 9 April 1984; and
(e)that parties have liberty to apply.
The coversheet of these orders suggest that the husband was represented at the time. However, the husband denies that he had legal representation at that time or that he was ever served with a copy of the 2 June 1986 orders and says he was never informed of the relevant court event in 1986.[40]
[40] Husband’s case outline, filed 25 July 2019, paragraph 12 (husband’s case outline); Transcript 6 November 2019, p.45 line 21 to p.46 line 28.
From what appears in the Court’s archives and as is accepted by both parties, no further orders or other step was taken in the 1984 proceeding and there were no final orders made to dispose of or conclude the 1984 proceeding.[41] It would seem that the husband took no further part in the proceeding after the 9 April 1984 hearing before Emery J, and the wife appears not to have taken any further steps after the 2 June 1986 orders referring the matter for trial. Nothing further happened in relation to the matter until the husband filed his Initiating Application in the Circuit Court on 16 January 2018 seeking to reinstate it.
Preliminary Matters
[41] Husband’s trial affidavit, paragraphs 16 and 17; Husband’s final submissions, paragraph 17; FASC, paragraph 20; Wife’s amended defence and counterclaim, paragraph 22; see also Transcript 8 November 2019, p.7-8.
Jurisdiction and leave to proceed
At the commencement of the trial counsel for the husband sought to have the Court rule on the question of whether there was subject matter jurisdiction to entertain the claims of the husband and the causes of action that he had raised in his FASC, and whether leave was required for the husband to proceed with his claims under s 44(3) and (4) of the Act. The question of whether the husband required leave to proceed under s 44(3) of the Act depended on whether the 1984 proceeding was properly to be regarded as remaining on foot, or whether it had come to an end.
Insofar as the question of leave is concerned, it was the husband’s position that the 1984 proceeding, not having been the subject of final orders, remained on foot albeit that it had gone into abeyance. This was also the position of the wife. In circumstances where the 1984 proceeding had been commenced but not determined, and no application had been made by the husband that it be dismissed for want of prosecution pursuant to rule 11.06, it seemed to me to be correct to regard the 1984 proceeding as remaining on foot, and I indicated that the Court would proceed on that basis. Accordingly the husband did not require the Court’s leave to proceed under s 44(3) and (4) of the Act.
On the question of whether the Court had subject matter jurisdiction to entertain the husband’s adverse possession claim, although the wife’s case outline appeared to contend that the Court did not have such jurisdiction, counsel for the wife conceded during the husband’s opening that the Court did have and could exercise its accrued jurisdiction with respect to the husband’s adverse possession claim.[42] Counsel for the wife explained that the wife’s case outline should be understood to mean that although the Court had jurisdiction to determine the husband’s adverse possession claim, in the circumstances here prevailing the husband did not have a valid claim for adverse possession of 4 B Street and so there was no occasion for the exercise of that jurisdiction.[43]
[42] Transcript 6 November 2019, p.12 line 5.
[43] Transcript 6 November 2019, p.12 line 10; p.14 line 6.
The husband filed submissions in support of his position on the Court’s jurisdiction, contending that as the Court has federal jurisdiction to determine all matters arising under Part VIII of the Act that involve a matrimonial cause, the term “federal jurisdiction” in this sense means no more than the Court’s authority to adjudicate on, or hear and determine, a “matter” (in the constitutional sense) arising under the Act: Rizeq v Western Australia (2017) 262 CLR 1, [8] (Kiefel CJ) (Rizeq v Western Australia); a “matter” in this context meaning “a single justiciable controversy”.
The husband submits that a matter is distinct from (but may be comprised of) one or more claims or causes of action as disclosed by the pleadings in the proceeding, referring in this respect to Fencott v Muller (1983) 152 CLR 570, 603 and Emerald v Emerald [2018] FamCAFC 217, [176]. Consistently with Re: Wakin; Ex parte McNally (1999) 198 CLR 511 at 585-586 the husband contends that there is a single justiciable controversy if the various claims or causes of action arise out of “common transactions and facts” or a “common substratum of facts”, notwithstanding that the facts upon which the claims or causes of action depend do not wholly coincide, and there is also one matter if the different claims or causes of action are so related that the determination of one is essential to the determination of the other.
Having regard to the decision of the High Court in ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559, 571 [7] and other authorities in this Court to which he refers, the husband contends that once a matter is within federal jurisdiction the entire matter remains within that jurisdiction, regardless of whether the federal claims or causes of action are struck out, dismissed, or determined adversely to the party who pleaded or raised them.
The husband’s submissions in this respect are orthodox statements of legal principle and are to be accepted. As Kiefel CJ observed in Rizeq v Western Australia:
Federal jurisdiction, understood as the authority conferred upon a court to adjudicate a matter, is to be distinguished from the law that the court applies in the exercise of that jurisdiction. In Anderson v Eric Anderson Radio & TV Pty Ltd, Kitto J explained that the conferral of federal jurisdiction merely provided a different basis for the authority of a court to enforce whatever law is applicable to the matter before it. It does not change the law the court enforces in adjudicating upon that matter. It follows that the fact that a court is exercising federal jurisdiction says nothing about the laws to be applied in a particular case.[44]
[44] (2017) 262 CLR 1, 12-13 [9]; see also Bell, Gageler, Keane, Nettle and Gordon JJ, 23-24 [53]-[56].
To similar effect the plurality observed:
Thus, it is commonplace that resolution of a matter within federal jurisdiction may involve application both of Commonwealth law and of State law. Indeed it can happen that a matter in federal jurisdiction is resolved entirely through the application of State law. Application of State law in federal jurisdiction came for a period to be described “[f]or want of a better term” as “accrued jurisdiction”. There is “no harm in the continued use of the term ‘accrued jurisdiction’ provided it be borne in mind … there [is] but one ‘matter’’. However, the imprecision the the term introduces into the word “jurisdiction” means that the term is best avoided. There is but one matter and that matter is entirely within federal jurisdiction, as distinct from State jurisdiction.[45]
(Citations omitted)
[45]Rizeq v Western Australia, 24 [55].
The 1984 proceeding, and its reactivation by the husband in 2018, are proceedings between the parties to a marriage for the purposes of s 78 of the Act. The relief sought by the husband involves s 78 of the Act in that he has petitioned the Court to declare the title or rights in or over 4 B Street in his favour based on the doctrine of adverse possession (by operation of the relevant provisions of the Limitation Act). Similarly, the proceeding is a property settlement proceeding within the meaning of s 79(1) of the Act, being a proceeding between parties to a marriage with respect to the property of the parties or either of them, and it involves a “matrimonial cause” falling within paragraph (ca)(i) of the definition of that term in s 4(1) of the Act.
Accordingly, all of the issues which arise for determination in the 1984 proceeding, as reactivated in 2018 by the husband’s claim, constitute one “matter” over which the Court has federal jurisdiction as involving a matter arising under Part VIII of the Act. The husband’s adverse possession claim directly invokes s 78 of the Act, and the starting point for the Court in determining whether or not it is just and equitable to grant relief under s 79 of the Act is to determine the existing legal and equitable interests of the parties in the property the subject of the claim for relief: Stanford v Stanford (2012) 247 CLR 108, [36] (French CJ, Hayne, Kiefel and Bell JJ) (Stanford v Stanford); Hsiao v Fazarri [2020] HCA 35, [50] (Kiefel CJ, Bell and Keane J), [55], [66] (Nettle and Gordon JJ). The Court must determine whether the wife has retained her interest in 4 B Street or whether, as part of the husband’s case contends, it has been extinguished by operation of the doctrine of adverse possession. As all of the causes of action pursued by the husband in his FASC, in particular his claim to have acquired 4 B Street by adverse possession, arise out of a common substratum of facts which are so related that the determination of each of them is essential to the determination of the others, and they are not colourable or separate and distinct or unrelated, it follows that the Court has jurisdiction to adjudicate on each of them.
Legal principles concerning informal agreements in subsequent proceedings pursuant to s 79 of the Act
It is desirable to say something also at this point concerning the legal principles applicable where there is said to have been an informal agreement between parties to a marriage and there are subsequently s 79 proceedings commenced. Unaccountably given the husband’s case, the submissions of neither of the parties, particularly the husband’s, engaged properly with these principles.
Central to the husband’s case is the effectiveness of the agreement he alleges the parties reached in 1986 to effect a final alteration of their property interests. As the Full Court observed in Maine & Maine (2016) 56 Fam LR 500, [18] (Ryan, Murphy, and Kent JJ) (Maine & Maine), the relevance and significance of informal agreements entered into between parties to a marriage in subsequent proceedings pursuant to s 79 of the Act is well settled. In Woodland & Todd (2005) FLC 93-217, [38]-[39] (Woodland & Todd) the Full Court (Finn, May and O’Reilly JJ) said:
38.Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made. There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force. The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing.
39.In determining s 79 applications in circumstances where there has been an earlier agreement, it will often be necessary to consider what was the value of the parties’ assets at the time of the agreement, what their various contributions were to that time, and what might have been an appropriate s 75(2) adjustment. A consideration of these matters might well be necessary in order to provide a background to the parties’ understanding of what was a just and equitable settlement at the time. However, and perhaps more significantly, it would generally be necessary for the court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.
An agreement’s failure to be ‘binding’ in the s 90G sense renders its use in Part VIII proceedings very limited. Specifically such an agreement will not operate as a bar to orders made under Part VIII: see Maine & Maine, [19], Senior & Anderson (2011) FLC 93-470 at [96] (Strickland J); Ruane & Bachman-Ruane (2012) 48 Fam LR 131 at [70] (Murphy J). As the Full Court said in Maine & Maine at [19], the decisions in Senior & Anderson and Ruane & Bachman-Ruane are consistent with what the High Court later said in Stanford v Stanford at [41]-[42], as follows:
41.… if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Part VIII, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact… These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
(Emphasis in original)
Where it is alleged that the parties have entered an agreement formalising, or seeking to formalise, a property settlement between them it will be necessary to consider whether there was, in fact, such an agreement and if there was the nature of its terms. Once the proper role of that agreement (if any) consistent with established principle is appreciated, the Court’s first task is to consider whether it is just and equitable to make any order adjusting the then existing legal and equitable interests of the parties in the property of the marriage (s 79(2) of the Act) and, if it is, to consider what order should be made by reference to s 79(4) of the Act: Maine & Maine, [21]. In respect of this latter task it is necessary to consider, among the other requirements of s 79(4), the respective contributions of the parties over “the entire relationship between the parties whether arising out of contributions before, during or after the formal tie of marriage”: Maine & Maine, [21]; In the Marriage of HT and NI Kowalski (1992) FLC 92-342 at 79,630 (Nicholson CJ, Nygh and Purdy JJ).
It is noteworthy that neither the husband nor the wife referred to Woodland & Todd or Maine & Maine at trial or in the course of, respectively, 51 and 33 pages of their final submissions. As I have mentioned, the Full Court said in Maine & Maine at [18] that the relevant principles in cases such as this are well settled. The husband’s case in particular failed to engage with these principles and appeared to ignore the wife’s stated reliance in her case outline on, amongst other cases, In the Marriage of Woodcock (1997) FLC 92-739, Burgoyne & Burgoyne (1978) FLC 90-467 and In the Marriage of Dupont (No 3) (1981) FLC 91-103.
It will be necessary to return to these principles, and to address the husband’s submissions on the question of how justice and equity is to be done in the circumstances of this case.
The evidence of the parties
Before turning to the various issues to be resolved it is desirable to say something about the contentious evidence of the parties, and two of their children who gave evidence. At the outset it is to be noted that the fact finding exercise in a case of this kind is conducted in accordance with the civil standard of proof in s 140 of the Evidence Act 1995 (the Evidence Act). Section 140(1) requires the Court to find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. Section 140(2) sets out, without limitation, certain matters which the Court is required to take into account in deciding whether it is so satisfied.
As might be expected, both parties have taken issue in their final submissions with the credibility and reliability of each other’s evidence. The husband’s submissions deal in some detail, and in strong language, with particular evidence given by the wife which is said to reveal her lack of credibility.[46] The wife’s submissions do likewise in relation to the husband.[47] It is fair to say that there were sometimes difficulties with the evidence of both parties. As their submissions both observe, there were occasions where it was open to conclude that neither of them had acted honestly. The husband’s preparedness to forge the wife’s signature on a building permit application in relation to 4 B Street was a striking example of his own preparedness to do whatever was necessary to achieve a result.
[46] Husband’s final submissions, paragraphs 23-28.
[47] Wife’s final submissions, paragraphs 68-70, 73 and 78.
Nonetheless, my impressions of them both in the witness box were different. The husband impressed as shrewd, and significantly more astute than the wife. As will become apparent, I formed the view that he was generally careful to answer questions in a manner that suited his case, rather than by reference to the objective truth of what he was being asked about. The wife, by contrast, and with great respect to her, struggled to understand in anything other than a general sense what was being asked of her. As will be apparent, she was a woman who had left school at or before the age of 16, and she had acquired no subsequent education. She has worked all her life in low paying jobs and has limited, if any, conversance with matters of finance, to say nothing of complicated questions of the legal and beneficial ownership of property.
In any event, whatever may be thought about the testimony of the parties, the critical point is that it is necessary to be careful about what they both say, especially when the relevant claims are unsupported by other evidence, or particular denials sit uncomfortably with other contemporaneous evidence. It must also be remembered that they were both giving evidence about matters that occurred a very long time ago. Much the same is true of the parties’ daughter, Ms D, and their son, Mr E. Although in the end much of the evidence of Ms D and Mr E was lacking in probative value and not determinative of very much, it was clear that for whatever reason they had both taken their father’s side in this dispute. Their evidence needs to be viewed through that lens. For his part Mr E stood to gain considerably from the proposed sub-division of 4 B Street. Whether Ms D stood to receive some benefit from her father was less clear.
With these matters in mind it is necessary to turn to the husband’s contention that the parties reached a final financial accommodation in 1986, and that there was then a subsequent, related, agreement in 2013 which was itself varied in 2014.
Did The Parties Reach a Financial Settlement in 1986?
The husband’s primary submission is that in “mid to late 1986” he entered into a property “arrangement” with the wife which was not approved by the Court, whereby he promised to pay the wife $100,000 by way of “property settlement” in return for her agreement to –
(a)allow him to retain his sole registered interest in 2 B Street; and
(b)transfer to him her registered half interest in 4 B Street.
The husband contends, and it will be necessary to return to this question, that at the time this payment of $100,000 represented a just and equitable adjustment for the interests of the parties to the marriage in accordance with the provisions of the Act as they stood in 1986 and 1987, taking into account the matters required to be considered by the Court when applying s 79 of the Act as it then stood.
Events in or about 1986
The case pleaded by the husband is that in late 1986 he attended at the offices of the wife’s solicitors to discuss settlement of property issues.[48] He says that he was unrepresented,[49] and that the wife was represented by her solicitor. The husband’s evidence is that a settlement was reached whereby he would pay the wife the sum of $100,000 and she would transfer her half interest in 4 B Street to him, but she would continue to receive half of the rental income from that property until the settlement sum was paid.
[48] See generally Husband’s trial affidavit, paragraphs 50-54 and 56-57.
[49] Although it is to be noted that that in the alleged 2013 agreement the recitals record that the husband did in fact have a “Lawyer” at the time. Quite what the position was in this regard is unclear.
It appears to be uncontroversial that the sum of $100,000 was paid to the wife. There is a dispute as to whether it was paid in one lump sum, two payments, or four payments, with the husband insisting it was paid in four tranches, and the wife contending that it was paid in a lump sum.[50] Probably nothing of substance turns on whether there was one payment or four. It seems that the wife used $75,000 of the money paid to her to build a house for her and the children in Suburb J.
[50] Husband’s final submissions, paragraph 68.
It is also uncontroversial that the wife did not transfer her interest in 4 B Street property to the husband, and that for whatever reason a financial settlement was not presented to the Court for approval and therefore is of no legal effect pursuant to s 87(2) of the Act.
In support of the existence of this agreement the husband points to evidence given by the parties’ daughter Ms D, who would have been about 11 or 12 years old at the time, in her affidavit to the effect that her mother told her “in the late 1980s” that she had received $100,000 in a divorce settlement with the husband.[51]
[51] Affidavit of Ms D, sworn 18 May 2019, paragraphs 16 and 18 (Affidavit of Ms D).
For her part the wife denies in her trial affidavit that she ever attended a meeting at her solicitor’s office with the husband for the purposes of a property settlement, although she accepts that she received the sum of $100,000.[52] The wife was cross examined about whether she had ever reached a financial settlement in or about 1986 with the husband.[53] Her position appeared to be that she had no recollection of any such agreement being reached and that the husband gave her the money when she told him that she wanted to move out of the unit she was living in with the children and take advantage of the opportunity to purchase a house and land package. It was readily apparent from the wife’s answers in cross examination that she had very little recollection at all about the circumstances which attended the payment by the husband to her of the $100,000, whenever it was that this occurred.
[52] Wife’s trial affidavit, paragraphs 69 and 93; Transcript 8 November 2019, p.48-53
[53] Transcript 8 November 2019, p.48-53.
While it is unnecessary to consider in detail what a just and equitable division of the assets of the marriage in 1986 would have looked like as a threshold issue before entering upon the s 79 exercise,[54] a number of high level observations can be made at this point which are not irrelevant to the question of whether the parties reached a financial accommodation in 1986. The first is that, as will be seen in due course, the assets of the marriage in 1986 had a value in the range of about $239,000-$285,000. The wife apparently received $100,000 from the husband, presumably as well as keeping her car which was worth some $14,000. It would thus seem that the wife received something in the range of 40 to 47 per cent – less than half of the approximate pool – whether by way of interim property settlement or spousal maintenance. She also took the three children who in 1983 were aged around 11, 8 and 6, and apparently continued to care for them for the duration of their childhood. Although the husband says that he paid for things from time to time, the wife contends otherwise and, as will be seen, there is little by way of contemporaneous documentary or other evidence one way or the other about the extent of the father’s ongoing support of the children. In these circumstances it is sufficient for present purposes to record that the payment to the wife in 1986 or thereabouts of a sum of $100,000 by the husband, were it to have reflected a final property settlement between them as the husband contends it did, would have represented an alteration of the interests of the parties in the property of the marriage which was unlikely to have been, in all the circumstances, just and equitable.
[54] Woodland & Todd, [38]-[39]; Maine & Maine, [18]-[19], [21].
Events after 1986: the P Lawyers correspondence
Against the background of the parties’ competing allegations about the events of 1986, it is relevant to have regard to the husband’s conduct in the years following. The husband claims that after the 1986 financial settlement was reached with the wife he “believed her lawyer had transferred [the wife’s] half share [of 4 B Street] to me”.[55] However he says that to be “absolutely certain of it, around 1988, I engaged the law firm, P Lawyers to ensure that that the transfer had been completed.”[56] The husband maintains that after his dealings with P Lawyers at this time he “believed [the wife’s] interest had been transferred into my name and that [the wife], therefore, had no interest in the property as was our agreement.”[57] The husband has retained copies of some of the relevant correspondence between himself and P Lawyers, and this correspondence is exhibited to his trial affidavit.
[55] Husband’s trial affidavit, paragraph 58.
[56] Husband’s trial affidavit, paragraph 58.
[57] Husband’s trial affidavit, paragraph 59.
An analysis of the relevant correspondence is instructive. It is entirely inconsistent with the formation of a belief by the husband that the wife’s interest in 4 B Street had been transferred into his name, and that the wife had, therefore, honoured the alleged agreement to transfer her interest.
The first letter from P Lawyers to which the husband refers is a letter to him of 23 August 1988. The letter advises that the firm had been requested by the Stamps Office to provide advice as to the marital situation between the husband and the wife. The husband is requested to advise whether the transfer of the wife’s interest in the property to him was made by reason of the breakdown of the marriage, and it is noted that the husband’s instructions have implications for the amount of any stamp duty payable in respect of the transfer instrument. P Lawyers confirm in this letter that the husband has instructed that there is no need to lodge a caveat to protect his interest in the property.
Further letters to the husband from P Lawyers dated 30 August 1988, 5 September 1988, and 15 September 1988 follow. These letters each request the husband to make contact with P Lawyers. It is plain on the face of this further correspondence that the husband did not provide further instructions to P Lawyers, as requested, in the period following that firm’s letter to him of 23 August 1988.
The next piece of correspondence from P Lawyers to the husband is dated 16 February 1989, almost 6 months after that firm’s letter to the husband of 23 August 1988. This letter refers to a recent telephone conversation with the husband and encloses statutory declarations relating to the marital status of the husband and the wife as at “the time of her agreement to transfer her interest in [4 B Street] to you”. The author confirms that the declarations have been prepared on the basis of the husband’s instructions, and advises that if both the husband and the wife are satisfied that the declarations are accurate and complete they should both be declared in the presence of a justice of the peace, solicitor, or other appropriate person. The husband is informed that if either he or the wife believe the documents to be in any way inaccurate, they should not be declared, and he should contact the solicitors immediately.
The next piece of correspondence from P Lawyers on which the husband relies is dated 3 April 1989. It advises that the statutory declaration sent to the wife has been returned, address unknown. The husband is requested to confirm the correct address, and to arrange for the wife to contact the firm by telephone to discuss the matter.
Almost four months pass before the next piece of correspondence from P Lawyers dated 27 July 1989. This letter refers to the firm having made another attempt to obtain from the husband’s brother, Mr F Dixon, the duplicate certificate of title to the property, so as to facilitate registration of the husband’s transfer, and advises that there has been no response from the husband’s brother. P Lawyers renew their advice to the husband that he should instruct them to lodge a caveat “especially in the light of the difficulties being experienced by us in lodging your transfer of land”. Prompt instructions are requested.
It is apparent that the husband did not provide prompt instructions, or indeed any instructions at all. More than six weeks later, on 18 September 1989, P Lawyers wrote to the husband again, noting that they had had no response to their letter of 27 July 1989. Further instructions were again requested, but it would seem that the husband did not provide them. On 18 October 1989, one month later, P Lawyers wrote to the husband again, noting that they had still not received further instructions, and requesting that he respond. There is no further correspondence from P Lawyers provided by the husband. It may be inferred, therefore, that nothing further happened: no further instructions were provide to P Lawyers by the husband, and there was no further attempt made to register any transfer of the wife’s interest in 4 B Street to the husband.
The husband was cross examined by counsel for the wife in relation to his assertion that as a result of his dealings with P Lawyers be believed that the wife’s interest had been transferred into his name, and that the wife therefore had no interest in 4 B Street, consistently with their “agreement”.[58] The husband maintained that, in consequence of his dealings with P Lawyers, he formed the view that the wife had transferred her interest in 4 B Street to him, and that he did not find out until 2012 that the wife’s interest had in fact not been transferred to him.[59] He maintained that he never suspected that the wife had not transferred her interest in 4 B Street.[60]
[58] Transcript 6 November 2019, p.77-88.
[59] See, in particular, Transcript 6 November 2019, p.80 line 19; p.81 line 26; p.85 line 32; p.85 line 40.
[60] Transcript 6 November 2019, p.81 line 20; p.87 lines 34-35.
I do not accept the husband’s evidence in relation to these matters. His account of his “belief” that the transfer had been effected flies in the face of the contemporaneous documents which he has himself placed before the Court. Not only has he failed to prove that he believed the wife’s interest in 4 B Street had been transferred to him, I am prepared to find, as counsel for the wife put squarely to him and he denied,[61] that he well knew that the property had not been transferred and he simply decided to do nothing about it. In other words, as counsel for the wife also put it to the husband, he just sat on the property, knowing that it was in the wife’s name, and not caring one way or the other about whether it had been transferred. It is noteworthy, in this regard, that at no time has the husband given evidence that he was in fact in possession of a signed transfer of the wife’s interest in 4 B Street.
[61] Transcript 6 November 2019, p.86 lines 15-25; p.88 line 44.
I observe, for completeness, that the husband’s account in cross examination of his dealings with P Lawyers in relation to this matter did not engender any confidence that he was endeavouring to give truthful evidence. Not only was his version of events entirely at odds with the relevant correspondence, he was at times belligerent in answers to questions,[62] and fixated on the idea that because he had paid for the wife’s interest in 4 B Street (with marital funds), it belonged entirely to him.[63]
[62] Transcript 6 November 2019, p.81 line 30; p.88 line 25.
[63] Transcript 6 November 2019, p.80 line 12; p.86 lines 36-37.
The parties’ submissions concerning the alleged 1986 agreement
The husband submits that the evidence permits a finding that a settlement, albeit not perfected, was reached in or about 1986. This is put on the bases that –
(a)the husband consistently rejected in cross examination the suggestion that there was never such an agreement;
(b)the husband has consistently maintained this position throughout the course of the proceeding;
(c)the evidence of the parties’ daughter Ms D supports the husband’s position; and
(d)the wife’s evidence in her trial affidavit that she never attended a meeting at a solicitor’s office for the purposes of a property settlement should not be accepted because in cross examination she was simply unable to remember what had happened so long ago.
Rather confusing the burden of proof in this regard, the husband submits that no reliable evidence has been presented to the Court which would enable a finding that there was no such agreement as the husband alleges he made with the wife in late 1986. It is the husband’s case that there was such an agreement, and the wife’s case that there was not. Obviously it is for the husband to prove the existence of the agreement.
From July 1989 until June 2005 the amount earned by the husband by way of rental income can be taken from the tax returns. The tax returns are contemporaneous documents and they are the best evidence available for present purposes. They are likely to be more accurate than the husband’s recollections many years after the event in any case. The tax returns produce a figure of $196,234 over this period.
From July 2005 to December 2018, although the rental receipts are an imperfect record of the rental income, they at least provide some guide. If one assumes for present purposes that the rental income would have held steady in between periods where there are not receipts, the figures would look something like this:
Period
Number of weeks
Rate (per fortnight)
Approximate rental income for this period
1 July 2005 – 31 January 2007
82 weeks and 6 days
$310
$12,843
1 February 2007 – 22 June 2010
176 weeks and 6 days
$390
$34,487
23 June 2010 – 3 July 2011
53 weeks and 5 days
$520
$13,966
4 July 2011 – 16 December 2012
76 weeks
$560
$21,280
17 December 2012 – 9 February 2014
60 weeks
$600
$18,000
10 February 2014 – 4 May 2014
12 weeks
$620
$3,720
5 May 2014 – 8 January 2017
140 weeks
$520
$36,400
9 January 2017 – 6 August 2017
30 weeks
$660
$9,900
7 August 2017 – 17 December 2018
71 weeks and 1 day
$720
$25,611
Total
$176,207
Obviously it would be necessary to assume some discount to reflect the reality that, as the husband has said and as one would expect, there will have been periods in which the property was not tenanted. Nonetheless, one can say that in the period July 2005 through until December 2018 the rental income derived by the husband from 4 B Street could well have been considerably higher than the husband is prepared to concede.
From 18 December 2018 until trial the rental agreement provides for the payment of $450 per week, so for about 46 weeks until early November 2019 the figure would presumably have been about $20,700.
On this basis then, and recognising that there can be no precision, contribution of the rental income from 4 B Street to the parties’ assets after separation must have been at least $264,950, and perhaps in excess of $300,000.
Obviously, however, rental receipts are not all there is to the picture. 4 B Street will have incurred costs over the relevant period. The husband says in his trial affidavit that he paid all rates, taxes and other outgoings on 4 B Street in equal shares with his brother from purchase until 1992 and alone thereafter.[282] However, he suggests in his FASC that he alone paid the outgoings on the property following separation in 1983 despite the fact his brother was still receiving half the rental income at this time.[283] Although it is not entirely clear, this position seems to be maintained in his final submissions.[284] It was the husband’s evidence in cross examination, although again it was not entirely clear, that he paid these outgoings in full and maintained the property since separation or perhaps since 1987.[285] The wife accepts that the husband would have paid the rates, taxes and other outgoings on the property following separation, but she points out that he had the benefit of the income from the property to do so.[286]
[282] Husband’s trial affidavit, paragraph 38.
[283] FASC, paragraph 14.
[284] Husband’s final submissions, paragraph 102.
[285] Transcript 6 November 2019, p.64 line 22 to p.65 line 5.
[286] Wife’s final submissions, paragraph 93; Wife’s amended defence and counterclaim, paragraph 15.
The husband’s evidence as to the quantum of the regular outgoings on the property over time is incomplete.[287] His evidence during cross-examination was that the current expenses on the property are $16,100 per year being $11,800 in land tax, $3,200 in council rates, and $1,100 in water bills,[288] although there appeared to be evidence that the husband’s land tax estimates were inflated.[289] The husband accepted during cross-examination that sometimes the outgoings on the property are considerably less than the rental income, but he contended that sometimes this was not the case, and that from time to time the property has been untenanted.[290] Nonetheless, if it be relevant, I do not accept that generally speaking expenditure on 4 B Street would have exceeded rental receipts.
[287] Transcript 6 November 2019, p.67.
[288] Transcript 6 November 2019, p.62, lines 10-34.
[289] Transcript 7 November 2019, p.149-150.
[290] Transcript 6 November 2019, p.62 lines 42-44.
The husband says that he paid exclusively for and assisted various tradesmen in carrying out extensive renovations commencing in 1992.[291] He contends that this included replacing the external weather boards and fence, renovating the kitchen and bathrooms, replacing the carpets throughout the house, installing two new windows and a new hot water system, and re-wiring, re-stumping and re-plastering the property.[292] In his trial affidavit the husband estimates that these renovations would have cost him about $20,000,[293] although elsewhere he says this amount would have been $5,000.[294] In cross-examination the husband disavowed this evidence, saying that he would have spent about $13,000 on the renovations.[295] Whether these funds came from rent received on the property, or from elsewhere, is not altogether clear.[296]
[291] Husband’s trial affidavit, paragraph 43; FASC, paragraph 15.
[292] Husband’s trial affidavit, paragraph 43; FASC, paragraph 15.
[293] Husband’s trial affidavit, paragraph 43.
[294] Husband’s trial affidavit, paragraph 67.
[295] Transcript 6 November 2019, p.71 line 47 to p.72 line 13.
[296] Transcript 6 November 2019, p.72-74.
The wife’s position is that she had no knowledge of the renovations to 4 B Street.[297] However, she submits that the husband would have had an opportunity to pay for these renovations out of the rental income which was rightfully payable, at least in part, to her, and that the husband may have subsequently benefited to her detriment though a capital increase in the value of the property, and an increase in rental income or taxation benefits.[298] How there may have been a taxation benefit is not developed.
[297] Wife’s amended defence and counterclaim, paragraph 16.
[298] Wife’s amended defence and counterclaim, paragraph 17; Wife’s final submissions, paragraph 93.
Ultimately it is clear enough that in the years from about 1987 to the present the husband has derived at least $264,950 in rent from 4 B Street, and probably a good deal more. He has also had expenses to pay each year, he has spent money on renovations, and he has himself assisted with renovation work. However by reason of the paucity of records it is impossible to say with any certainty what the nett position has been for the husband with respect to 4 B Street. Nonetheless, it must obviously be accepted that 4 B Street has been a considerable financial resource to him over the past 33 or so years, and he has taken the entirety of this benefit which is now reflected in the asset pool.
The much more substantial benefit, however, which has been realised from 2 B Street and from 4 B Street in the years since separation, is the capital appreciation that has occurred in that time. At present the husband holds all of the benefit of this, albeit that properly understood the wife has made an important contribution to this wealth.
Contributions: conclusions
What, therefore, can ultimately be said in relation to the parties’ respective contributions over a period spanning almost 50 years, only about 13 of which they were in a relationship together? The husband says that because he provided “all of the direct financial contributions to all of the assets of the marriage and he owned the 2 B Street property and the Suburb V property prior to the marriage”, the Court should assess what is just and equitable on an “asset by asset” basis, at least in relation to the financial contributions.[299] He suggests that, in 1986, a range of 40 to 60 per cent in favour of the wife would have been appropriate for 2 B Street, 40 to 50 per cent in favour of the wife for 4 B Street, and 50 per cent of the husband’s then superannuation.[300]
[299] Husband’s final submissions, paragraph 82, see also paragraph 90.
[300] Husband’s final submissions, paragraph 90 et seq.
Insofar as assets acquired post-separation are concerned, in particular the husband’s superannuation and his workplace injuries payments, the husband’s position is that the wife made no contribution to these and they are so remote from the time of the marriage that they should not even be included in the asset pool.[301] He says that because the wife has not lived in any of the properties for over 35 years, never made any contributions to the acquisition, conservation, or improvements of the properties since separation, the fact that the children were adults by the 1990s, the fact that he has maintained and improved the properties and paid all the outgoings, and that the capital value has increased markedly since 1983, the wife should not be permitted to “profit from her laches”.[302] The husband’s position is that it would not be just and equitable for her to receive any further order for adjustment beyond what she has already received, and that were she to do so this would represent “double dipping” having regard to the $100,000 that she has already received.[303]
[301] Husband’s final submissions, paragraph 112, see also paragraph 116.
[302] Husband’s final submissions, paragraph 114.
[303] Husband’s final submissions, paragraph 115-116.
If the asset pool is to be assessed globally, the husband says that the Court must make reasonable allowances in his favour for the fact that the case took over 30 years to come on for trial, that the properties have appreciated significantly in value since separation, that he has made extensive contributions, that the wife has made no financial contribution towards the acquisition, conservation, improvement and preservation of the assets and the costs of maintaining them, the fact that at separation the wife held only a half interest in 4 B Street, and that the wife has made poor financial decisions. The husband says that the wife’s poor financial situation should not be visited on him, and that she should not be given “what is in effect a further adjustment on the basis of her own folly”. The husband submits that the Act is not to be applied so as to achieve a form of social security for a party who has fallen on hard times for no reason attributable to the other party to the marriage.[304] He submits that the “global approach” would not do justice and equity as between the parties, particularly given that the wife has received the $100,000 from the husband already, together with a sum of $3,000 in 2001 from him, and $20,000 on his behalf in 2014.
[304] Husband’s final submissions, paragraph 116.
It must be said that the husband’s submissions have an air of unreality about them. As has been explained, in all the circumstances of this case there is not a proper basis to depart from the usual starting point identified in Omacini & Omacini that the property and financial resources of the parties should be valued at the date of hearing. The fact that the husband’s direct financial contributions were greater than the wife’s at the commencement of the relationship does not necessarily mean that the assessment of what is just and equitable should be done on an “asset by asset” basis. To do so in the circumstances of this case would give insufficient credit to the wife for her substantial role as a wife during the relationship between the parties, and to her role as a mother to the four children of the relationship, both prior to and after separation. As I have found, these contributions must be regarded as very significant. The parties’ current asset pool should be assessed globally, and not on an asset by asset basis.
The husband’s position on the subject of post-separation contributions also unjustifiably minimises the wife’s contributions. It ignores the fact that she took the three remaining children of the relationship with her when she left, and assumed the primary responsibility for their care for the balance of their childhood. Although it is true that the payments derived by the husband from his employment reflect substantial contributions by him, the husband does not acknowledge in any way the contributions made by the wife by leaving a portion of her equity in 2 and 4 B Street and allowing those properties to appreciate, effectively allowing him to live in 2 B Street rent free, and also to go on collecting hundreds of thousands of dollars in rent from 4 B Street in the years since about 1987. All this while the wife struggled, ultimately unsuccessfully, to make ends meet.
True it is that the wife has not made contributions to the conservation or improvements of the two properties, but nor has she had the benefit of living in 2 B Street, or any of the income derived from 4 B Street. Although the husband is correct to argue that the payment to the wife of $100,000 in 1986-1987 must be taken into account, in my view this does not mean that the wife should be denied any share in the appreciation in the value of the two properties that has occurred since separation.
The husband’s allegation that the wife has made “poor” financial decisions must also be approached with caution. Whilst it is correct that she has, in effect, lost the $100,000 that she took out of the marriage in 1986-1987, the fact that she has done so likely reflects the reality that the amount she was given by the husband at that time was simply insufficient to sustain her and the three remaining children post-separation, rather than any particular “folly”. To suggest that the wife’s case seeks, in effect, a form of “social security” because she has fallen on hard times, and that her position has nothing to do with the husband, reflects a limited understanding of the Act and the obligations that the common law has long imposed on the more advantaged party in the event of marital breakdown. This submission may also be said to reflect a troubling lack of insight on the part of the husband’s legal advisers.
Although the wife submits that she has made significant contributions, unhelpfully her final submissions do not nominate what amount should be adjusted in her favour on contributions. Nor do they clearly specify what overall split there should be. The wife’s position appears to be simply that she should have 50 per cent of the value of 4 B Street, 10 per cent of the value of 7 B Street, and a splitting order of 30 per cent of the parties’ combined superannuation.
In my assessment up until the date of separation contributions were fairly evenly balanced. Whilst the husband brought a respectable asset base to the relationship, and provided for virtually all of the family’s financial needs during the marriage, the wife played a similarly important part on the home front. In doing so she neglected her own education, and considerable demands were placed on her young body by frequent conception and childbirth. Had the 1984 proceeding progressed to hearing at that time, and having regard to what can be divined about the situation at that time, I consider that a finding of equal overall contributions by the parties would have been realistic. An adjustment in favour of the wife would then have needed to be made pursuant to s 79(4) of the Act, once the matters referred to in s 75(2) had been taken into account.
As will readily be accepted, the position is much harder to evaluate more than 35 years after separation. Although the husband has effectively kept the two properties and taken the benefits that they brought, largely to the exclusion of the wife, he also continued to generate income and other payments from his employer up to his retirement in 1992, as well as other monies.[305] What is of great significance, however, is that shortly after separation he gave to the wife a sum representing somewhere between 40 and 47 per cent of the assets of the marriage at that time. The wife utilised these funds fully in the ensuing years. This was an amount which was less than it may be expected that the wife would have received had her case proceeded to final hearing at that time, but it was not an insignificant sum of money by any means and it consumed a considerable proportion of the parties’ assets at the time. In my view it must be taken into account in considering the justice and equity of making a property adjustment order pursuant to s 79 of the Act. Similarly, the further payment to the wife of $20,000 on behalf of the husband in 2014 must also be taken into account. It is unnecessary to have regard to the $10,500 that the husband submits that he loaned to the wife because I have not been able to make a finding that this money was, in fact, advanced to the wife.[306]
[305] Husband’s trial affidavit, paragraph 86.
[306] Husband’s final submissions, paragraph 93.
It is obviously difficult to be precise in accounting for the value of this $100,000 “contribution” in 1986-1987, the $20,000 paid to the wife more recently, and in assessing the value of the parties’ other contributions post-separation up until the hearing. However doing the best I can and looking at the parties’ respective contributions over the entire period since 1970, if their contributions were to be regarded as about equal at the time of separation I consider that by reason of his post-separation contributions, particularly the $100,000 in 1986-1987, the husband could reasonably expect to receive something in the order of about 75 per cent of the current asset pool before the matters required to be taken into account by s 75(2) of the Act are considered. Self-evidently the s 75(2) factors favour the wife.
Section 75(2) matters
For reasons that are not at all apparent, other than to say that the wife remarried after separation the husband says very little in his final submissions in relation to the relevance of s 75(2) factors, whether at the time of the 1984 proceeding or at the hearing.[307] Unaccountably his position appears not to concede the applicability or relevance of any s 75(2) factors.
[307] Husband’s final submissions, paragraph 81. See also the discussion at paragraphs 90-95.
The wife’s position is that pursuant to s 79(4)(e) of the Act the following matters referred to in s 75(2) of the Act must be taken into account:
(a)the age and state of health of each of the parties – s 75(2)(a);
(b)the disparity in income, property and financial resources of the parties and the limited capacity of the wife to obtain appropriate gainful employment – s 75(2)(b);
(c)the commitments of each of the parties that are necessary to enable the party to support themselves – s 75(2)(d);
(d)the disparity between the expected entitlements of the wife to a pension and her limited superannuation balance and the husband having regard to his superannuation – s 75(2)(f);
(e)the low standard of living of the wife – s 75(2)(g);
(f)the significant contribution the wife made to the husband’s income earning capacity, property and financial resources – s 75(2)(j);
(g)the relevantly long duration of the marriage and the extent to which this impacted on the income earning capacity of the wife – s 75(2)(k);
(h)if either party is cohabiting with another person, the financial circumstances relating to the cohabitation – s 75(2)(m);
(i)the terms of any order made or proposed to be made under s 79 in relation to the property of the parties – s 75(2)(n);
(j)other facts and circumstances relating to the significant disparity between the parties which justice requires to be taken into account – s 75(2)(o).
The wife advances the following submissions in relation to these matters.
Insofar as the age and heath of the parties is concerned, at the time of trial the husband was 80 years old and he accepted that he was in “reasonable” health for his age.[308] The wife was 65 years old.[309] The wife submits, in contrast, that she is not in good health. She deposes to experiencing mental health issues, persistent lower back pain, asthma, arthritis in her right foot, chronic sinusitis which causes headaches and has needed to take hormone replacement therapy ever since undergoing menopause.[310] She further says that her medical costs are significant, and that her current financial resources do not allow her to pay for all treatments and procedures which she requires.[311] I am satisfied that although the wife is much younger than the husband, she is not in good health and that this is a matter to be taken into account in her favour.
[308] Husband’s trial affidavit, paragraph 85.
[309] Wife’s trial affidavit, paragraph 80; Wife’s final submissions, paragraph 67(a) – she says she was 64 but her birthday is 1 September 1954 (see her amended case outline page 4) which would have made her 65 at the hearing.
[310] Wife’s final submissions, paragraph 67(a); Wife’s trial affidavit, paragraphs 81-88.
[311] Wife’s trial affidavit, paragraphs 82, 84-86 and 88.
Insofar as the matters under s 75(2)(b), (d) and (f) are concerned, the wife submits that her property holdings, financial resources and income, including from superannuation and government entitlements, are far below that of the husband.[312] She notes also that she has little in the way of cash resources or superannuation entitlements from which she could meet any future financial commitments, while the husband has no current financial commitments, including any mortgages, and has the ability to draw on income from his superannuation and rent to meet any commitments.[313] The wife notes that she is a discharged bankrupt, and says that she received no property settlement from her second husband, Mr Elliot.[314] She submits that she currently owns no property,[315] (aside, obviously, from her claim on 4 B Street). It can be accepted on the basis of the wife’s financial statement filed 3 June 2019, where she discloses savings of $30, a car worth $14,000, household contents worth $3,000, a superannuation balance of $10,000, and outstanding debts of $17,000, that she is effectively in a negative asset position.
[312] Wife’s final submissions, paragraph 67(b).
[313] Wife’s final submissions, paragraph 67(d).
[314] Wife’s trial affidavit, paragraphs 71 to 72; Affidavit of Ms Elliot, affirmed 3 June 2019, paragraph 1E-F; Wife’s final submissions, paragraph 67(b).
[315] Wife’s final submissions, paragraph 67(b).
The wife also discloses a pre-tax income of $650 per week and weekly personal expenditure including for rent, insurance premiums and loan re-payments, of $357 and a further $159 in other weekly expenses, being a total of $516 in average weekly outgoings. It is noteworthy that she has at times experienced periods of unemployment. The wife says that she expects that she will be eligible for the age pension in a few years given her limited income and property holdings.[316] She submits that the husband, by contrast, has significant superannuation entitlements, far in excess of her modest $10,000 balance, together with substantial financial resources in the form of the former matrimonial home and the investment property at 4 B Street. She submits that he derives a “significant” income from 4 B Street.[317] The wife also says that the husband is unlikely to be eligible for an age pension given his substantial property holdings.[318]
[316] Wife’s final submission, paragraph 67(f).
[317] Wife’s final submissions, paragraph 67(b).
[318] Wife’s final submissions, paragraph 67(f).
It is plain that the husband and the wife have vastly different financial resources and commitments. The husband presently has effective control of more than $5 million worth of unencumbered assets. The wife has virtually nothing. There is no evidence that she would or could have access to any property settlement from her second husband, Mr Elliot. I am satisfied that the parties’ disparate financial resources and commitments are such that these are further matters to be taken into account in the wife’s favour.
Insofar as the matters in s 75(2)(g) of the Act are concerned, the wife submits that she lives a very modest lifestyle and that her standard of living is “less than reasonable.”[319] She occupies a single bedroom in the house of a friend for which she pays rent, and she otherwise has very little by way of spare income.[320] All this can be accepted. Although the wife says that she has no knowledge of the husband’s standard of living,[321] there is nothing to suggest that the husband is other than comfortable. I am satisfied that the wife’s much less than reasonable standard of living is, in all the circumstances, a matter to be taken into account in her favour.
[319] Wife’s final submissions, paragraph 67(g).
[320] Wife’s final submissions, paragraph 67(g).
[321] Wife’s final submissions, paragraph 67(g).
Insofar as s 75(2)(j) of the Act is concerned, the wife submits that she has significantly contributed to the property, namely the maintenance of 2 B Street and 4 B Street in which she has contended she retains an interest, as well as in her role as the mother of the parties’ children giving the husband the capacity to work and earn so as to build up the property portfolio.[322] As has also been observed, although the wife did receive $100,000 from the husband in 1986-1987, as well as keeping her car, she has nonetheless has made a significant contribution to the assets of the marriage by, in effect, leaving her equity in 2 and 4 B Street over the last 35 years, enabling them to appreciate in value in the way that they have. I am satisfied in all the circumstances that the wife’s contribution to the income, property, and financial resources of the husband has in fact been very substantial, and that this is a further matter to be taken into account in her favour.
[322] Wife’s final submissions, paragraph 67(i).
Section 75(2)(k) of the Act is also a matter which tilts heavily in favour of the wife. As has been observed, her relationship with the husband, although of only about 13 years, produced four children. It began when the wife was very young. The wife submits, and I have accepted, that she had no income earning capacity during the course of the relationship, save for some limited casual work near the end of the marriage.[323] However the terms of s 75(2)(k) direct the Court’s attention not only to the impact of the marriage on the earning capacity of the wife during the marriage, but also to the extent to which the marriage has affected the earning capacity of the wife more generally. While the wife’s submission does not go further to address directly how her earning capacity has been affected after separation, it is plain that marriage to the husband at such a young age, and the resulting early pregnancies, have adversely affected the wife’s earning capacity. As the wife said during cross-examination, “I could never find great work. I put that down to my education.”[324] While the Full Court emphasised in Grieves & Grieves [2012] FamCA 691 at [100] that caution must be exercised to avoid double counting differences in income earning capacity already undertaken under s 75(2)(b) of the Act, I accept that the effect of the marriage on the wife’s income earning capacity in the circumstances of this case is also a matter to be considered pursuant to s 75(2)(k) of the Act.
[323] Wife’s final submissions, paragraph 67(j).
[324] Transcript 8 November 2019, p.54 lines 22-23.
In relation to s 75(2)(m), the wife says this is not a relevant factor as she is not currently cohabitating with anyone.[325] The husband maintained in his trial affidavit that the wife was in a relationship with and cohabitating with her landlord, Mr M.[326] However Mr M, in an affidavit affirmed on 29 June 2019, deposed that he and the wife had commenced a relationship in about February 2016 but that they are no longer in a relationship, their involvement having ended in about March 2017.[327] For her part the wife denies ever having been in a relationship with Mr M.[328]
[325] Wife’s final submissions, paragraph 67(l).
[326] Husband’s affidavit in reply, paragraph 66.
[327] Affidavit of Mr M, affirmed 29 June 2019, paragraphs 4-9.
[328] Wife’s trial affidavit, paragraphs 78 and 80; Transcript 8 November 2019, p.10 lines 1-11; p.89 lines 39-42.
Mr M was called as a witness but failed to appear on two separate occasions during the trial. Ultimately, on 13 November 2020, Mr M’s affidavit was tendered by consent without him being cross examined. During the hearing counsel for the husband accepted that for the purposes of s 75(2)(m) the relevant consideration is whether the wife was currently cohabiting with another person, and that in this regard there was no difference between the evidence of the wife and Mr M. He did, however, submit that the difference between their evidence did go the credit of the wife and later made further submissions to this effect.[329] In the event it is not apparent that anything much turns on the issue of the wife’s relationship, if any, with Mr M. For the purposes of s 75(2)(m) I accept that she is not cohabiting with Mr M and that it is not therefore necessary to consider the financial circumstances relating to the cohabitation.
[329] Husband’s final submissions, paragraph 26.
Insofar as s 75(2)(n) is concerned, the wife refers simply to her proposed order, or an aspect of it, that she receive “a reasonable distribution of 30% of the applicant’s superannuation, together with a reasonable interest in 4 B Street (at 50% of the property upon sale)”. It is not clear that the wife makes any substantive submission as to the relevance of s 75(2)(n) of the Act.
The wife submits finally, in relation to s 75(2)(o), that the significant disparity of assets between the parties is such that the justice of the case requires an adjustment in the pool. She says that in contrast to the husband she has been “poverty stricken since she left the matrimonial home and [that] her position has not changed to this date”. The wife says that she looked after the children and was left to bring them up by herself. She points also to the fact that the husband is now in a position to and is in fact seeking to devolve financial benefit on the children.[330]
[330] Wife’s final submissions, paragraph 67(n).
In my assessment the cumulative effect of these s 75(2) factors is that the wife should have an adjustment in her favour in the order of about 5 per cent. Given my conclusion that, in light of the $100,000 he paid to the wife in 1986-1987 and the subsequent payment he made, the husband could reasonably expect to receive in the order of about 75 per cent of the current asset pool before the matters required to be taken into account by s 75(2) of the Act are considered, this adjustment of 5 per cent in favour of the wife would bring the husband’s share of the asset pool to something in the order of 70 per cent, with the balance of some 30 per cent to the wife.
Laches, estoppel and the exercise of the s 79(2) discretion
It remains only to record that the husband has submitted that because s 79(2) of the Act confers a discretion on the Court as to the making of orders that are just and equitable, it may not be irrelevant to have regard to the wife’s delay in prosecuting the case that she originally commenced in 1984. It is said by the husband that the wife has provided no plausible explanation for her failure to prosecute this case.[331]
[331] Husband’s final submissions, paragraphs 119-120.
The husband also submits that by her conduct in not prosecuting the 1984 proceeding after June 1986, signing the alleged 2013 agreement, signing an exclusive agency agreement for the sale of 4 B Street, and agreeing to vary the 2013 agreement to enable 4 B Street to be subdivided, the wife represented to him that she had no ongoing beneficial interest in that property and that she would transfer her “paper title” to him.[332] He says that he has acted on the wife’s representation to his detriment by proceeding with both the preliminary steps for the sale of the property, and the subsequent steps to have it sub-divided.[333] Thus the husband says that on “accepted principles of representational estoppel” the wife should now be denied any of the relief that she seeks.
[332] Husband’s final submissions, paragraphs 121.
[333] Husband’s final submissions, paragraphs 122.
I do not accept that in the circumstances existing in this case principles of laches or representational estoppel could be said to operate to deny the wife the relief that she seeks. In the first place, as the Full Court made clear in Woodcock v Woodcock in the passage extracted earlier in these reasons, the equitable principle of promissory estoppel cannot oust the jurisdiction of the Court to grant relief under, relevantly, s 79 of the Act. Notwithstanding this principle, the Full Court did accept that facts relied upon to establish the existence of circumstances where the doctrine of equitable estoppel might otherwise operate may be relevant in determining whether it is just and equitable to make an order under s 79 of the Act. By parity of reasoning the same must apply in relation to the equitable doctrine of laches.
However the facts relied upon by the husband here cannot sustain an argument that laches and principles of representational estoppel could prevent the exercise of the Court’s discretion under s 79(2) in the way he urges. Although it is correct that the wife did not pursue the 1984 proceeding, the contemporaneous documents seem to suggest that the husband ceased to participate in the proceeding. After he had paid the wife the $100,000 in 1986-1987 he determined to let matters lie, notwithstanding the fact that he had not been able to procure from the wife a transfer of her share in 4 B Street. The husband is shrewd. One might easily infer that an aspect of his failure to have the litigation formally concluded was an awareness on his part that he had provided the wife with an amount that was less than just and equitable. The husband continued to let matters lie after he had tried, and failed, to procure a transfer of the wife’s interest in 4 B Street with the assistance of P Lawyers in 1998-1989. In this sense the husband could also fairly be regarded as having elected to sit on his hands.
Further, it must be remembered that the wife was still a relatively young woman at this time, without any income to speak of, contending with a broken marriage and the need to house and care for three young children. She had little education and, as I have found, limited understanding of the true nature of her entitlements. It is, in my assessment, highly likely that when she was offered the $100,000 by the husband in 1986 she simply took what was being proffered and decided to make the best of it, giving little thought to the extant proceeding. As she herself has said, her priority was simply to remove herself from the marriage.
It will be equally apparent that the facts relied upon by the husband to establish a representational estoppel cannot do so in light of the findings I have made in relation to the alleged 2013 agreement. I have concluded that that so-called agreement was not an agreement at all, and was in fact no more than a further attempt by the husband to procure from the wife a transfer of her interest in 4 B Street, something which it is not at all apparent she had ever agreed to do. That the husband proceeded with the preliminary steps to sell the property and the subsequent steps to have it sub-divided cannot be regarded as detriment for relevant purposes. The husband cannot rely on equitable doctrine in these circumstances to contend that it would be inappropriate to make an order for the alteration of property interests pursuant to s 79(1) of the Act or that it would not be just and equitable to make an order for the alteration of property interests within the meaning of s 79(2) of the Act.
Disposition
As has been mentioned, the wife’s articulation of the final relief she seeks is regrettably imprecise. At its clearest, however, it would seem to be for 50 per cent of 4 B Street (which is to say $1,170,000), 10 per cent of 2 B Street (which is to say $276,500) and 30 per cent of the parties’ combined superannuation (which is to say $34,800, $10,000 of which she already has), together with her costs of the proceedings. In total, and leaving costs to one side, this represents a sum of $1,481,300, which is approximately 28.3 per cent of the current asset pool of $5,231,000.
In light of my conclusion that an adjustment of something in the order of about 30 per cent of the current asset pool in favour of the wife would be appropriate, I consider that a distribution to the wife of the approximately 28.3 per cent which is the subject of her application would also represent an alteration of the interests of the parties in the current asset pool which is, in the difficult and unusual circumstances presented by this case, just and equitable. Although it may perhaps have been open to the wife to seek a slightly higher amount, she has not done so. In all the circumstances therefore I consider that the approximately 28.3 per cent of the asset pool which the wife has sought reflects a just and equitable alteration of the parties’ property interests. The wife should be held to the way that she has presented her case.
I will hear the parties as to the orders to be made to give effect to these reasons for judgment, including in relation to costs.
I certify that the preceding three hundred and forty-eight (348) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McEvoy delivered on 10 December 2020.
Associate:
Date: 10 December 2020
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