DP & VP
[2006] FMCAfam 120
•21 March 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DP & VP | [2006] FMCAfam 120 |
| FAMILY LAW – Property – where wife alleges parties cohabited for seven months and husband alleges forty years cohabitation – evidence strongly suggests parties engaged in social security fraud – stage one of preferred approach to adjudication property proceedings requires court to identify and evaluate the asset pool – before court can evaluate asset pool, parties referred to Centrelink for consideration of overpayment. |
| Family Law Act 1975, ss.75, 79 Property (Relationships) Act 1984 Child Support (Assessment) Act 1989 |
| In the Marriage of Lee Steere (1985) FLC 91-626 In the Marriage of Clauson (1995) FLC 92-595 Farnell (1996) FLC 92-681 |
| Applicant: | DP |
| Respondent: | VP |
| File Number: | PAM1851 of 2004 |
| Judgment of: | Ryan FM |
| Hearing date: | 31 October 2005 |
| Date of Last Submission: | 16 November 2005 |
| Delivered at: | Parramatta |
| Delivered on: | 21 March 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr D. Alexander |
| Solicitors for the Applicant: | M J Woods & Co. |
| Counsel for the Respondent: | Mr A. Canceri |
| Solicitors for the Respondent: | Not on record |
ORDERS
The Registrar of the Federal Magistrates Court refers this judgment to the Centrelink Investigations Unit in relation to findings made by the Court concerning the parties’ cohabitation and consideration of whether or not a claim for over-payment is to be made against either of them.
The matter is adjourned to 10 am on 10 May 2006.
On the adjourn date the Court requests that an officer from Centrelink attends and indicates whether or not Centrelink seeks to recover funds from either party.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT Parramatta |
PAM1851 of 2004
| DP |
Applicant
And
| VP |
Respondent
REASONS FOR JUDGMENT
The proceedings
These are proceedings for the adjustment of property pursuant to section 79 of the Family Law Act 1975.
The applications
DP “the husband” filed an application for property orders in the Family Court of Australia at Sydney on 12 May 2004. After the proceedings were transferred to this court, on 22 April 2005 he filed an amended application which sets out the orders sought at this hearing. In essence the orders sought are:
·The parties sell a home at Merryland and divide its sale proceeds equally.
·The wife provides him with a selection of tools and personal belongings which combined comprise half of Merryland’s contents.
·Costs.
During opening addresses the husband’s counsel conceded that if, as the wife contends, the court accepts the parties separated in 1967 the husband is entitled to far less than he claims.
VP “the wife” filed her response on 13 July 2004. Simply put, the wife seeks dismissal of the husband’s application and that he pays her indemnity costs. During opening addresses, the wife’s counsel submitted that if the court accepted the husband’s version of events, he is entitled to receive 30 per cent of the net matrimonial assets.
Both parties agree that neither is entitled to receive an adjustment pursuant to s.75(2). This case is presented on the basis that any s.79 orders result from an adjustment calculated by reference to the parties’ respective contributions.
The husband claims the parties commenced cohabitation upon their marriage in 1966 and finally separated in March 2004. During the intervening years his criminal activities resulted in numerous periods of imprisonment. Other than whilst in prison and for about 18 months when he was working interstate, the husband says the parties cohabited.
On the other hand, the wife claims the parties separated in January 1967 and stayed separated until they resumed cohabitation thirty-one years later in mid-1998. On this occasion the wife alleges the parties resumed cohabitation for three months. Notwithstanding that during the intervening period the parties had more children and purchased real estate together, the wife denies they resumed cohabitation. It is her case that the parties maintained an amicable relationship, providing each other with occasional support and comfort, but did not cohabit. As partial proof of her claim, the wife relies on the undisputed fact that since 1967, other than for a brief period in 1997/1998, she has continually received social welfare payments as a single parent.
During closing addresses the wife’s counsel bluntly observed that one of the parties has presented a case based on a monumental lie. There is little room for ambiguity between the parties’ cases. Ultimately, if the husband’s case is accepted it almost inevitably follows that the parties jointly engaged in an elaborate conspiracy to defraud the Commonwealth. I raised with both counsel my concerns that if I accept the husband’s case, before I could quantify the asset pool, the parties should be referred to Centrelink for investigation. This is so Centrelink can determine what funds, if any, are repayable. If by virtue of the parties’ continued cohabitation, the wife (as the relevant claimant) has received social welfare payments to which she was not entitled, these overpayments together with any fines and interest are joint matrimonial liabilities. Even if wrongly received, the monies were used for joint matrimonial purposes.
As the above observations suggest, this case raises very difficult credit issues. Commonly in family law cases parties have differing recollections of events, with differences reflecting memory lapses or an emotional gloss subconsciously imposed over time. Where accounts of events differ, particularly in financial cases there are frequently relevant documents which shed light on the situation. In this case each of the parties relied on documents in which it became clear one or other had deliberately provided misleading information to the author. Documents which are generated by others and based on information given by these parties do not have the integrity one would ordinarily accept. Plainly the husband built his career on deceit. There are important omissions in the wife’s testimony and she too has been less than frank with others concerning her financial situation. Regrettably each of the parties has been dishonest and neither comes to the court with clean hands. They have made the fact finding exercise particularly difficult.
Chronology
The husband was born in 1944 and is 61 years old.
The wife was born in 1944 and is also 61 years old.
Upon their marriage in July 1966 the parties commenced cohabitation. At the commencement of cohabitation both parties were 21 years old. The husband worked as a labourer at a timber mill and the wife as a process worker. When the parties commenced cohabitation the wife had no assets of value or liabilities. The husband claims he owned land at Girraween for which he had paid 5,000 pounds some time prior to the marriage. He says when the parties married the land was worth approximately 6,000 pounds. He did not own other assets. The husband claims the property was fully funded by vendor finance yet does not disclose the amount owing to the vendor. Apart from recalling that the husband told her he owned land at Penrith; the wife says she knows nothing about him owning land. The husband asserts that shortly before he went to gaol in 1967 he sold his Girraween land, receiving $2,000 net, which he gave to the wife for her use whilst he was in gaol. The wife denies receiving $2,000.
As this was a contentious issue I was surprised the husband failed to produce any documents proving ownership. Neither party had conducted a Land Titles Office search, the results of which, it was agreed, would definitively clarify the issue. By agreement, after the hearing concluded the husband instructed law stationers, “Legalink” to undertake a Land Titles Office search. Under cover of letter dated
8 November 2005[1] the husband’s solicitors advised the court, “We also note that the search which we have undertaken was unable to locate the block of land ….”. However, the search results commence from
1 June 1971 which post-dates the date by which the husband says he disposed of the land. Nor do the search results identify the husband’s interest in the Mt Druitt property. In these circumstances the search results do not definitively address the issue. I have no doubt that there are relevant records at the Land Titles Office which positively resolve this issue. The husband’s failure to produce these records does not assist his case. In these circumstances I am not persuaded that the husband owned land at the commencement of cohabitation.
[1] Exhibit P
On 27 January 1967 the husband was convicted of break, enter and steal. Although sentenced to three years, he was released from prison on 17 May 1969[2]. After their son’s birth the wife visited the husband in gaol. Provided he was in a metropolitan prison, during subsequent imprisonments the wife visited the husband reasonably regularly.
[2] Exhibit A
In early 1967 the wife stopped paid employment because of ill health arising from pregnancy. This coincided roughly with the husband’s imprisonment and about the same time the wife returned to live with her parents at Granville.
In 1967 the parties’ eldest son Darren (not his real name) was born.
In 1970 the parties purchased a home as joint tenants at Mt Druitt from the Department of Housing. The property was acquired through a government scheme for $15,000 on a $200 deposit with the balance borrowed from the vendor. The wife omitted any reference to this property. She says that during this period she lived at her parents’ home at Granville and then with her brother who also lived in Granville. Having conceded joint ownership during cross examination the wife claims the husband merely agreed to cooperate with this purchase, however he at no stage lived at Mt Druitt or contributed to it financially. She says she included him as a joint owner in order to satisfy the mortgagee she was able to repay the mortgage and that the husband agreed to help her out. While this is feasible I do not accept her evidence. Of course if the wife is correct she and the husband prima facie conspired to obtain an advantage by deception. On 27 March 1973 the wife gave the Department of Social Services[3] notice of a change to her address. The wife informed DSS she had moved from Granville (her parents address) and now lived at Mt Druitt. She makes no mention to DSS of living at her brother’s. I am satisfied that the wife lived at her brother’s after she sold Mt Druitt and not beforehand. Darren says his earliest memory of growing up is living with his mother and Uncle at Granville, the implication being he lived at Granville from when he was about two or three years old. Consequent on the above findings I am satisfied Darren’s evidence is misleading.
[3] Exhibit G
The husband says in about 1971 he moved to the Gold Coast where work was easier to find. Each month or so he returned to Sydney for about a week. While in Sydney he usually stayed with the wife. While living on the Gold Coast the husband alleges he paid the Mt Druitt mortgage. The wife denies receiving money from the husband and claims her brother helped her make the mortgage repayments. This is inconsistent with her affidavit evidence and left me with the strong sense the wife was making this evidence up on the run.
In 1972 the parties’ son Eric (not his real name) was born.
I am satisfied the wife lived at Mt Druitt from its purchase until shortly before its sale. I do not accept she purchased a home and left it vacant. It seems likely that the parties did not immediately resume cohabitation upon the husband’s release from gaol in May 1969. I consider it most likely that before the parties purchased Mt Druitt they resumed a significant relationship. Even although he was coming and going, they lived together at Mt Druitt, until the husband went to the Gold Coast in 1971. Whilst living on the Gold Coast the husband lived in a rented caravan with a plumber friend. It may be that at this stage each party had different perspectives about the state of their marriage. Perhaps the husband regarded it as continuing, whereas the wife was concerned about his coming and going, and to her the marriage was far more tenuous.
The factors which particularly suggest a continuing relationship and on and off cohabitation are Eric’s birth, the probability the husband was contributing towards the mortgage and staying with the wife at Mt Druitt each time he returned. Essentially the situation appears to be analogous to continuing marriages which accommodate a spouse working away for example, shearing for weeks on end, or for months on oil rigs. Because the husband was doing casual work, basically returning to Sydney between jobs, I doubt he had sufficient income to meet his own expenses, fully pay the Mt Druitt mortgage and comfortably support his family. I also consider it likely that the wife had little idea from week to week whether the husband was returning to Mt Druitt or whether he had sufficient money to pay the mortgage. It is likely the parties jointly decided the wife needed to continue to receive social security if the family was to survive financially.
I am satisfied that when the husband returned from the Gold Coast the parties lived at Mt Druitt until the husband was again imprisoned, which occurred not long after he returned. Darren’s failure to recall living at Mt Druitt, which the wife ultimately conceded, detracts from his evidence in effect denying his father’s residence at Mt Druitt. Darren lived at Mt Druitt from when he was three until about nine years old. He was living at Mt Druitt when he started school and attended the local school for a number of years. I do not accept he has forgotten these events. This is a serious omission and materially detracts from Darren’s veracity.
Having returned to Sydney it appears that, as well as thieving, the husband was selling bush rock taken from Crown land and working 3-4 nights a week at an illegal two up club. The husband’s role at the two up club was basically as an enforcer of outstanding debts. When thieving the husband disappeared for days, probably even longer, at a time. The husband said there was always plenty of cash about the house, the suggestion being proceeds of his thieving were available for the wife whenever he went into prison. When he realised by this evidence he may have exposed himself to sanctions the husband retreated from his evidence that he had significant amounts of cash. Although he then asserted he was arrested each time he committed an offence this seems implausible. With a criminal history spanning decades I consider the husband’s original version that he always had cash at the house is correct.
In 1972 the husband was shot in the course of his debt collecting work. For a period afterwards he was unable to work and received social security payments. Whilst receiving social security he provided DSS with an address other than the Mt Druitt address. This suggests either he was living away from Mt Druitt or gave DSS false details in order to hide from them that he and the wife were cohabiting. No doubt revealing they were cohabiting would have raised suspicions about for how long this had been the case.
On 26 April 1973 the husband was sentenced to three years imprisonment for receiving. He was released from prison on 14 January 1974. From this time onwards on each occasion the husband was released from gaol he was supervised by Probation and Parole. But for his release in 2004, on each release the wife told Probation and Parole the husband resided with her. She says he usually stayed a few weeks before leaving. The wife did not inform Probation and Parole the husband had departed. Questioned about her failure to do so, the wife denied this is because the parties continued to cohabit and says she regarded the husband as responsible for keeping his parole officer informed of his whereabouts. I do not accept her evidence. In my view the wife was aware she had specific responsibility to advise the husband’s parole officer if he left as doing so was probably a breach of his parole. I consider the most likely scenario is that upon his release the parties lived together at Mt Druitt, with the husband absent for days or weeks at a time when he was away thieving, perhaps also (as Darren and the wife allege) philandering. After his release the husband worked doing plumbing and draining work as well as selling bush rock and thieving.
On 16 January 1976 the husband was sentenced to imprisonment for break, enter and steal offences. He was released from prison on
24 January 1977.
The Mt Druitt property was sold in late 1976 for about $18,000. It appears the mortgage fell into arrears and the property was either privately sold in the face of impending repossession or by the Department of Housing. It is more than coincidental that with the husband’s imprisonment the parties have difficulty paying the mortgage, and indicates that the husband had been contributing to household expenses prior to his sentence. On its sale the parties received about $4,000 net of which it appears the wife received at least half.[4] The husband made reference to giving the wife about $2,000 from the sale of land which he intended she use to support herself while he was in prison. As the wife had control of the sale, it appears likely that his share of these sale proceeds is the source of that advance.
[4] Exhibit D
Upon Mt Druitt’s sale the wife moved into private rented accommodation in Granville. This is clear from the wife’s DSS “Evidence in Support of Claim[5]” dated 14 October 1976 and sworn 28 October 1976. The purpose of this document appears to be to inform DSS of the sale and to ensure her continued entitlement to benefits. Relevantly the wife explains to DSS the husband was gaoled six months previously and that she has no intention to reconcile. On my reading of the document it corroborates the husband’s assertion the parties cohabitated until he went back to gaol. This document also shows that the wife’s and Darren’s evidence that they lived with his uncle in Granville from 1972 is incorrect. Upon Mt Druitt’s sale the wife’s fortnightly widow’s pension gave her $120 from which she paid $40 per week rent, leaving her $40 per fortnight with which to feed and clothe herself and the two boys. Even with the most adroit budgeting skills this was impossible. It seems likely the wife used the Mt Druitt sale proceeds to meet the shortfall in her living expenses and supporting the children.
[5] Exhibit D
Upon his release the husband says he resided with her until his next period of imprisonment, which I accept. Again on his release the parties told Probation and Parole the husband was living with the wife. It seems most likely that from this time the husband, when not thieving, was self employed carting and selling bush rock taken from national parks. The wife’s brother leased Crown land from where the husband says he took bush rock. The brother was involved in the same activity but had his own business. The husband sold his rock to Flower Power and other purchasers. The wife feigned ignorance of the husband’s occupation as a “carter” and said she had no idea why he was so described in their subsequent land title and mortgage documents. As this was also her brother’s occupation and she signed the documents in which the husband is described as a carter, I am satisfied the wife pretended not to know of her husband’s activities because she feared awareness invited the question of how she knew.
The husband ran his bush rock business for about 18 years. He stopped in the mid 1980’s because he was being targeted by rangers and feared detection and gaol. This involved the husband collecting two or three, usually three truck loads of rock each week which he sold. On average he received $150 per load, from which the husband says he netted about $80. His expenses included fuel, tyre punctures, car repairs and registration. I consider his expenses are exaggerated and he cleared a greater share of the total income than he suggests. On average for the 18 years he carted and sold bush rock the husband received at least about $15,000 net per annum.
In the late 1970s the wife was allocated a rental home by the Department of Housing at Harris Park. She and the children moved to Harris Park. As will become apparent, I am satisfied that for at least some of the time, the husband did as well.
On 28 August 1980, as joint tenants, the parties purchased vacant land at Balcolyn. The property was acquired for $23,000[6], of which $20,700[7] at 15% per annum reducible was borrowed from Seaforth Securities. The monthly mortgage repayments were $414.62. The wife claims she alone paid the deposit, legal fees and stamp duty using $6,000 – $7,000 cash given to her by an uncle from money her mother had at her death. There is no evidence corroborating this gift. Nothing turns on the wife’s confusion about whether these monies were paid in pounds or dollars. On the other hand the husband says the $3,000 needed to meet the shortfall came from joint savings, yet there is no evidence the parties ever had a joint savings account. It seems likely the wife received an informal bequest from her mother from which she paid the deposit, legal fees and stamp duty. Relevantly the memorandum of transfer and mortgage documents describes the parties as married and residing at Harris Park. The wife says this description is an assumption, by those with whom she was dealing, that the parties lived together. I do not accept her evidence. It is my view the parties each represented to the vendor, their solicitors acting on the purchase and the lender that they cohabited. If they were not residing together, it seems clear the parties conspired to obtain money (the mortgage) through deception.
[6] Annexure C wife’s affidavit
[7] Annexure D wife’s affidavit
After they purchased Balcolyn property a small cottage/garage was erected, mainly by a builder. The wife claims she paid for the building work and paid the mortgage. On the other hand the husband claims he paid for the builder and paid the mortgage. At this stage the wife says she was living alone, paying rent and supporting the children without child support from their father. Her income comprised a widows pension and “funds I earned from breeding my chihuahuas”. I doubt the wife’s pension entitlement had substantially increased above that which she received in 1976 and was certainly no more than she was receiving by June 1984. At that later stage her pension was $255.80 per fortnight, from which she was paying $59.20 fortnightly rent and supporting the parties three children.
During cross examination the wife described her dog breeding as a hobby. She explained dog breeding was erratic and she could go six months without earning any income from it. The amount earned was modest, about $300 per dog, and never enough to affect her social security benefit. I accept there were about three – five pups sold each six months and that the sale proceeds barely covered breeding and veterinary costs. This evidence is inconsistent with her claim that dog breeding produced sufficient funds to pay Balcolyn property builder[8] and I am satisfied it did not. Inconsistent with this evidence the wife claimed[9] the source of funds used to erect the garage/cottage was her late mother’s inheritance. I do not accept the wife had sufficient funds from her social security payment to repay the mortgage unless she was cohabiting with the husband and he was contributing to the household expenses. I am satisfied the husband contributed to the mortgage repayments either directly or indirectly through his contributions to the families day to day living expenses. As to the cost of the cottage I consider it more likely than not that the wife used the balance of her mother’s bequest for this expense. Darren concedes the husband erected fences and did other building work at Balcolyn. The husband paid the modest cost for materials he used at Balcolyn.
[8] Paragraph 36
[9] Paragraph 83
In 1982 the parties’ daughter Stacey was born.
There are a number of factors which together persuades me the husband also lived at Harris Park. These include Stacey’s birth, documents the parties executed for Balcolyn’s purchase and the efforts the husband made improving Balcolyn. However, I also accept that while living at Harris Park, the husband was also absent for periods thieving or pursuing his own interests. Darren’s view of his father as elusive seems apt, even if the detail in his affidavit is exaggerated.
On 18 June 1984 the wife executed a statutory declaration, being a statement of her affairs, for the Department of Social Security[10]. In this statement the wife outlines her relationship with the husband, claiming they are separated and disclosing her financial circumstances. The wife says “My only investment is a Commonwealth Savings account at Parramatta in the name of VP account number 285233, balance of $6.26!” This is a significant document as the wife fails to disclose to DSS that she is a joint registered proprietor of the Balcolyn property. Had the wife informed DSS she and the husband had purchased another property I expect this would have pricked their interest in the state of the parties’ relationship. Apart from her social security payments the wife says “I receive no other income”. This is inconsistent with her evidence she used money earned from dog breeding to pay the mortgage and other costs at Balcolyn. This document seriously undermines the wife’s case that her continued receipt of social security benefits corroborates that the parties were separated. This document demonstrates the wife’s lack of candour with DSS. In my view the department’s reliance on her word may well have been misplaced. Shortly after this review the wife stopped breeding dogs.
[10] Exhibit N
On 26 October 1984 the parties sold the Balcolyn property for $57,500,[11] not $62,000 as the husband claims. On 13 December 1984 the wife purchased a property at Merrylands. This property was purchased for $64,500[12] with title registered in the wife’s name. After applying the Balcolyn sale proceeds towards the Merrylands purchase the wife needed $25,000 in order to settle. Contrary to the husband’s evidence that the parties borrowed $5,000 – $10,000 which included sufficient funds to purchase a boat and caravan, the wife borrowed $25,000 from Alliance Acceptance P/L in order to settle. The husband guaranteed the mortgage raised for this purchase. The husband’s counsel cross examined the wife concerning her description on the memorandum of transfer as “married woman”. I accept the wife’s evidence she used this description as it was technically correct. Its use does not help determine the cohabitation controversy. The husband says he was not worried about his position qua title because “we were a family”. By this time he was routinely subjected to police searches and was concerned about confiscation of family assets through proceeds of crime legislation. In order to minimise the risk of confiscation he says the parties agreed to register property, whether real or personal, in the wife’s sole name. For the same reason he kept a scrap book into which he pasted receipts for all household goods purchases. The husband’s evidence that he pasted these receipts is important. In the last decade of the marriage he claims to have purchased furniture and household goods the receipts for which were pasted into his books. The wife also claims to have paid for the same items and produces receipts in her name. None of the receipts shows any signs that they were pasted onto a page. While I accept the husband’s evidence concerning the strategy and existence of a book, the receipts produced by the wife do not come from his book. The wife and Darren gave consistent and seemingly accurate evidence which shows the source of funds used to purchase the goods. The husband’s knowledge of these purchases does not corroborate cohabitation. His knowledge arises merely because he was back and forth from the home.
[11] Annexure E wife’s affidavit
[12] Annexure F wife’s affidavit
The husband’s knowledge of the details surrounding the Merrylands purchase is less precise than the wife’s. He was wrong about the purchase price, the amount borrowed and could not recall the house number. The wife’s evidence accords with documents annexed to her affidavit. As she attempted to explain away her failure to disclose Mt Druitt by reference to poor recollection, it seems likely that her greater accuracy concerning Merrylands is influenced by at least partial reliance on source documents. Few people would be able to recall precise dates for a settlement which occurred about twenty years ago or upon which they executed a mortgage. Thus the wife’s more accurate evidence on this issue does not suggest more intimate involvement in the transaction or the husband’s less reliable information lack of involvement.
From 13 December 1984 until 13 October 1988 the wife and children lived at Merrylands. Apart from periods of imprisonment the husband claims he did also. While living at Merrylands the husband claims the property was renovated basically through his doing contra deals with friends whereby they worked on the house and he provided undisclosed services in return. While I accept this is likely to be correct I do not have evidence concerning the extent of these improvements and the impact, if any, on the properties increased capital value. Although I accept it is reasonable the husband is mistaken about aspects of Merryland’s acquisition, if he lived there for four years I would have expected him to remember the house number. His inability to do so suggests, excluding periods in gaol, he did not continuously live there.
On 23 May 1986 the husband received six months periodic detention which was discharged on 5 October 1986.
On 13 August 1987 the husband was imprisoned for stealing bush rocks. He was released from prison on 20 November 1987.
On 13 October 1988 the wife sold Merrylands for $142,000[13]. The entire sale proceeds were used in the purchase of a property later that same month at Ulladulla for $105,000. Ulladulla was acquired in the wife’s sole name and was unencumbered. The purchase price and associated transaction costs were met entirely from the Merrylands sale proceeds.
[13] Annexure H wife’s affidavit
On 26 April 1990 the husband was sentenced to a term of imprisonment for receiving. He went into custody on 5 March 1990 and his sentence ended on 4 December 1990. Whilst in gaol the husband was called up before the District Court for breaching a bond. He received a six months sentence, the effect of which was that he was imprisoned continuously from 5 March 1990 until his release on 23 December 1990.
The wife alleges the husband lived at Ulladulla for about one month in 1992 and at no other time. During this period she says the husband was thieving in the local area, a matter discovered by the local community. Apparently embarrassed by gossip the wife and Stacey returned to live in Sydney. Their return to Sydney coincides with the husband’s incarceration. The husband says he lived at Kings Cross throughout the period of ownership until he went back to prison. He admits thieving but says these offences were committed at Nowra, about two hours from Ulladulla and had nothing to do with the wife’s return to Sydney. During cross examination the husband seemed to have only scanty knowledge of the families life at Ulladulla, and I formed the impression it was unlikely he lived there continuously. The wife rented Ulladulla out and upon their return to Sydney, she and Stacey moved in with Darren. The rental income went towards the properties outgoings and any excess the wife used for day to day living expenses. Like his father Darren has an extensive criminal convictions history[14] commencing 1981 and ending with a three year jail term imposed in late 1992. At some stage, but certainly by the mid 1980’s, Darren supported his heroin addiction through thieving and fraud.
[14] Exhibit M
The husband claims that in the early 1990’s he received between $10,000 and $12,000 from his late mother’s estate. He produces no documents in support of this assertion and failed to adequately explain his inability to corroborate this evidence. With respect to him, his evidence concerning timing and amount received lacks sufficient particularity which, when combined with other unsatisfactory aspects of his evidence, results in my view this evidence should not be accepted.
The husband was incarcerated between 14 August 1992 and 22 September 1992. It appears that after Darren was gaoled in late 1992 the wife and Stacey moved into another rented property until completion of Ulladulla’s sale. The husband does not suggest that he resided with the wife and Stacey while they lived in rental accommodation and I infer he did not. This means the parties did not cohabit between 14 August 1992 and 16 February 1994.
On 19 May 1993 the husband was charged and refused bail in relation to a break, enter and steal offence. He was convicted on 12 August 1993 and received a nine month non-parole period. The effect of this is that he was in custody from 19 May 1993 until 16 February 1994.
On 27 May 1993 the wife inherited $9,662.50 from her late father’s estate. I infer these funds were used for joint matrimonial purposes.
I accept the wife sought to corroborate this evidence by production of bank records however the bank was unable to produce a copy of the relevant statement.
On 29 July 1993 the wife sold Ulladulla for $117,500.[15]
[15] Annexure J wife’s affidavit
On 14 December 1993 the wife purchased the property at Merrylands in her sole name for $124,500[16]. After applying the entire Ulladulla sale proceeds towards the purchase price and associated costs for Merryland, the wife borrowed $25,000 from the State Bank[17] in order to settle. The husband was not involved with this mortgage. Although the husband asserts there is $20,000 unaccounted from these transactions his assertion is not made out.
[16] Annexure K wife’s affidavit
[17] Annexure L wife’s affidavit
On 2 March 1995 the husband was sentenced to a 16 month term of imprisonment. This resulted in his incarceration from 23 January 1995 until 22 January 1996.
In about November 1996 the wife started working at nursing home as a kitchen hand. Apart from dog breeding this is her first paid work since 1976. In total, but not continuously, she worked for about 14 months with her employment coming to an end on 15 February 1998. When the nursing home’s cook resigned the wife approached the Matron and suggested the husband, who worked as a cook when in prison, as a replacement. Thus about 4 or 5 months after she started at the nursing home the husband started there as a cook. He worked at the nursing home for about three years. While working at the nursing home the parties met VR, his current partner. VR gave evidence and generally impressed me as an honest witness. With respect to all other witness she is the only person whose evidence was not successfully impugned. I accept her evidence. Where it conflicts with the parties or Darren’s evidence I prefer hers.
Excluding a short reconciliation in 1998, the wife says the husband lived with VR from around 1997 until in or around 2001. The husband and VR deny her allegation. The parties agree they cohabited for three months commencing 11 August 1998 at Merrylands. For those few months the wife went off Centrelink benefits. The wife relies on the husband’s 1997 and 1998 taxation returns[18] as evidence he was not living with her. In these documents the husband states his home address is in Westmead. He does not claim a spouse rebate in either year. In her affidavit the wife says during this period the husband was living with Ms Rainer in Parramatta. It appeared to me the husband had no idea whose address he used in these taxation returns. On balance I regard these documents as more of the parties, in this case under the husband’s hand, deception about their living arrangements and the probability is the parties were living together. As for most of this period the husband was employed at the nursing it is unlikely the wife was entitled to DSS benefits.
[18] Exhibit B
On 8 November 1999[19] the wife received $5,000 from a late uncle’s estate. She applied these funds to day to day living expenses.
[19] Annexure U wife’s affidavit
The husband rented a room from Ms Rainer for three months in 2000. At the end of this time the husband returned to live at Merrylands.
On 2 March 2000 the husband started to receive a disability benefit. Over the years, particularly during the 1980’s, he has received Centrelink benefits. He first received benefits after being shot while debt collecting for an illegal gaming venture and then at other times when he was not in legal paid employment. There is no suggestion that when claiming these benefits the husband advised Centrelink he cohabited with the wife or declared his bush rock income. As will become apparent, I am satisfied these parties engaged in an elaborate fraud over many years to maintain Centrelink benefits, to which their entitlement for extensive periods is highly questionable. It is also clear the husband failed to disclose to the ATO money earned as he described himself “a career criminal”, including his many years taking bush rocks from national parks sold to gardening businesses. In relation to non disclosure of his income earned from collecting and stealing bush rocks the husband sought and was granted a s.128 Evidence Act (Cth) certificate.
On 6 March 2000 the RTA resumed a small tract of land at the front of the Merrylands property. As consideration for its acquisition the wife received $20,000[20] which she used to payout the State Bank mortgage. The Merrylands property is unencumbered.
[20] Annexure M wife’s affidavit
During 2000 Darren asked the husband to help him purchase the home he was renting. As joint tenants with Darren, the husband purchased a property at Fairfield. The husband made no capital contribution towards its acquisition or mortgage repayments. His sole contribution was cooperating as joint mortgagee to raise funds for the purchase. The parties and Darren agree the husband has no beneficial interest in this property. In cooperating with this venture the husband replicates the role the wife says he undertook in her real estate acquisitions.
After 2000, other than for relatively brief periods, the wife refused to allow the husband to live with her. The husband lived with VR for about three months in 2000. In addition, until he was imprisoned the husband was itinerant, living for a period with Darren, with Eric at Blacktown and Doonside, was homeless and also staying with associates. From about 2000 the parties have rarely lived in the same house and when doing so this was no more than convenience.
On 2 March 2000, probably while living with VR, the husband applied for and was paid Centrelink benefits. As the wife was also reliant on Centrelink benefits there were no adverse ramifications vis welfare entitlements if the parties cohabited. I infer that the husband used an address other than the Merrylands address. If the husband had used the Merrylands address I would have expected him to rely on this fact as possible corroboration of cohabitation. As far as this period is concerned his failure to do so corroborates the wife’s evidence that the parties were not cohabiting.
The wife claims the husband lived with Darren at Fairfield from about September 2001. At this time Darren says he was living with the wife at Merrylands and Fairfield was tenanted to AJ. AJ is the mother of his three younger children. Darren has four children, three with AJ. With AJ he has twins born in 1999 and a son born in 2001. Although they have three children together Darren says he and AJ have never lived together. AJ and their three children still live at the Fairfield property. AJ is reliant on social security and child support. She pays Darren $125 weekly rent. Darren denies his father’s and VR’s evidence that he lives with AJ or that his evidence concerning residing with his mother is a ruse to enable AJ to receive social security benefits.
Attached to the wife’s affidavit[21] is a copy of a letter dated 21 December 2001 from Total Star addressed to the husband at the Fairfield property. The husband denies residing at Fairfield. As both the husband and, more relevantly, Darren agree the husband was not living at Fairfield in 2001, it appears the wife has used this document rather than her recollection to justify her claim this is where the husband lived from late 2001. The husband explains that the parties ensured there were no documents which show him residing at the wife’s address. When he joined Star City he used the Fairfield records for his residential address as he did not have proof of any other place of residence. On his case the husband lied to Star City about where he lived. On this issue, I prefer Darren’s evidence. The effect of which is that for a considerable period during 2000 the husband lived with Darren at Fairfield.
[21] Annexure P
Before proceeding further it is necessary to highlight the significance of the husband’s evidence that the parties ensured there are no documents showing he resided with the wife. When the issue of possible social security fraud was raised the husband declared he was unaware the wife received social security while they cohabited. If this was so there was no need for each of the parties to ensure documents proving cohabitation were not generated. If the parties cooperated in ensuring documents showing cohabitation were not created and they were cohabiting, there is only one logical reason for doing so. Namely, to jointly cooperate in social security fraud.
On 30 March 2001 the wife lodged a benefits claim with Centrelink[22]. The wife was questioned about the details she provided to Centrelink. She agreed that in answer to question 8 she failed to disclose Darren was (and still is) residing with her and paying her $100 per week board. Relevantly the wife also failed to disclose in response to questions 1, 2, 3 and 4 that she owned the Merrylands property. While ownership may not have affected her Centrelink entitlement, the significance of its non disclosure is that here is another example of the wife giving Centrelink misleading and erroneous information.
[22] Exhibit O
In April or May 2001 the wife consulted solicitors with a view to ending the parties financial relationship. Following discussions with the husband they agreed the wife would discharge a $9,000 car loan secured on the husband’s car. Thereafter the husband would retain his possessions, basically a Toyota Surf motor vehicle, boat, trailer and personal belongings and the wife would retain the house and personalty. At this stage the husband was living away from the home and facing a lengthy period of imprisonment. He says the wife said he could return to Merrylands provided he executed property orders which enabled her to keep the home. The husband agreed and upon receiving the draft terms from the wife’s solicitors, he consulted his solicitors and signed the submitted terms. I do not accept his evidence that because he was confident the marriage would continue, he believed the orders were ineffective. On his evidence “in about 2000 our marriage disintegrated to the point where the Respondent was regularly changing the locks on the former matrimonial home…”. It seems likely that the husband took a short term view and signed the terms so that he could have a roof over his head before he returned to prison. In any event the wife’s solicitors did not lodge the draft orders within the required period and the consents lapsed. The agreement did not become orders. Because the wife believed there was an enforceable agreement she paid the husband’s car loan. At some stage, before the wife discovered her solicitors failed to lodge the consent orders application, she allowed the husband to return to the home.
In the 1990’s the husband was stung by a catfish on a finger, which was amputated. In the late 1990s he commenced a compensation claim alleging medical negligence. In 2002 he received in excess of $60,000 compensation for this injury. After payment of expenses he received $46,000 net. On 9 April 2002 the husband deposited $20,000[23] from his compensation into the wife’s ANZ account. The wife claims the husband was living with VR at Abbotsbury and told her he wanted to hide his compensation money for fear of a de facto [Property Relationships Act] claim. As proof she relies on a Certificate of Registration of the husband’s Holden Rodeo[24] dated 22 April 2002 which shows his residential address as Abbotsbury. The husband denied ever living at Abbotsbury. He says this is a friend named K’s address and that he stayed with K for a short time after the wife made him leave the home. This document does not prove the husband cohabited with VR, who I am satisfied has never lived at Abbotsbury. In these circumstances the document has marginal relevance.
[23] Annexure V wife’s affidavit
[24] Annexure Q wife’s affidavit
On 18 April 2002 the husband paid $18,000 for the Rodeo motor vehicle[25]. Between 18 April 2002 and 7 May 2002 the wife withdrew $22,000 from her ANZ account, all of which she says she gave to the husband. That is, his original $20,000 plus $2,000 she says she loaned him so that he could buy the Rodeo. It is the wife’s case that she repaid him cash so that he could buy the car. The car receipt which forms part of the wife’s case shows that the car was purchased by bank cheque on 18 April 2002. The first large withdrawal from the wife’s account was $2,000 on 18 April 2002. The remaining $20,000 was withdrawn between 30 April 2002 and 7 May 2002. This means the husband did not use the $22,000 withdrawn from the wife’s account to purchase the Rodeo. Simply put, the Rodeo was purchased at a time when the wife had only withdrawn $2,000. This means the husband used his funds to acquire the Rodeo. However the wife only has the husband’s word he used this portion of his settlement to purchase the Rodeo and on her version it is just as likely the husband used his half to purchase the car and spent the balance when the wife repaid it. The husband says he paid the wife half of his compensation basically in order to keep peace with her and to buy his way back into the home. He denies receiving any part of it back and says the wife kept it for herself. Although both accounts are plausible, on balance I prefer the wife’s version she repaid the husband. Examining the wife’s bank accounts one sees diligent savings. Other than these transactions there are no large transactions. There is no alternate explanation why the wife would withdraw large cash sums unless she was repaying the husband. Although finely balanced, I am persuaded the wife repaid the husband all monies she received from his compensation. Unfortunately I am unable to reach any satisfactory conclusion about the $2,000 the wife says she gave him as a deposit.
[25] Annexure Y wife’s affidavit
On 16 January 2003 the husband was sentenced to a term of imprisonment of 3 years and 6 months. This resulted in his incarceration from 16 January 2003 until 15 October 2004. While he was in prison the wife visited and told him their marriage was over.
In mid 2003 the husband became eligible for gaol leave. Having approached VR through an intermediary, he telephoned her and at his request she agreed to sponsor his gaol leave application. Between late 2003 and October 2004 the husband was granted weekly leave provided he stayed with VR. During this period their relationship changed and upon his release the husband moved in with VR.
In March 2004 the wife filed an application for dissolution of marriage. The husband was served while in gaol and took no steps to challenge the wife’s evidence concerning separation in 1967. I have considered whether, apropos the date of separation, this raises a res judicata estoppel or issue estoppel thus precluding the husband from claiming a more recent separation date. In these proceedings it seems to me that if it applies, it only restricts the husband from asserting a date of separation later than one year prior to the date upon which the wife’s divorce application was presented. That is a date in March 2003. As I am satisfied separation took place earlier there is no conflict between the estoppel and my finding.
On 10 July 2004 the decree nisi became absolute.
Upon his release the husband from prison in October 2004 the husband moved in with VR.
On 10 February 2005 the husband broke his arm at work. Presently he receives periodic workers compensation payments.
The wife has not repartnered. She receives Centrelink benefits and it is agreed she is unlikely to ever work in the paid workforce again.
The issues
The primary issues are these:
·Whether the parties separated in 1967 or 2004.
·Whether the husband owned land at the commencement of cohabitation.
·If the parties separated in 1967, their respective post-separation contributions.
·If the parties separated at the commencement of the husband’s most recent sentence, whether the parties should be referred to Centrelink for investigation of possible social security fraud.
·Specific issues concerning inheritances and other contributions.
Relevant law – property
The approach to the determination of an application under s.79 is well established by authority: See In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-593. The process involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Biltoft and Biltoft (1995) FLC 92-614. Secondly, evaluating the contributions made by the parties as defined in s.79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s.75(2) insofar as they are relevant; any other order made under the Act affecting a party or child; and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide or might be liable to provide in the future for a child to the marriage.
In determining what order should be made under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so: s.79(2). It is the justice and equity of the actual orders that the court must consider: See Russell v Russell (1999) FLC 92-877.
Assets, liabilities and financial resources as at the date of hearing
The parties agree on the value of most of their assets and liabilities.
I find that the assets, liabilities and financial resources as at the date of hearing are as set out in the table below. Unless stated differently these figures are agreed or taken from the applicable financial statements.
| Assets | $ |
| Merrylands Property (W) (Agreed) | 340,000 |
| 1993 Subaru (H) (Agreed)[26] | 4,750 |
| Cash at bank (H) (Agreed) | 700 |
| Members First Credit Union (H) (Agreed) | 50 |
| Cash at bank (W) (Agreed) | 4.59 |
| Boat (H) (Agreed) | 1,500 |
| Contents Merrylands property | 3,000 |
| Husbands interest in the Fairfield property | Nil |
| Total non-superannuation assets | 350,004.59 |
| Liabilities | |
| Possible Centrelink debt | NK |
| Total liabilities | NK |
| Net non superannuation assets | NK |
| Superannuation | |
| Colonial Select Super (H) (Agreed) | $1,833.10 |
[26] Exhibit R
There are a number of findings which require explanation. The husband claimed the household contents at Merrylands in the wife’s possession are worth $10,000. The wife says they are worth no more than $3,000. Neither party provided a valuation of the household contents. In these circumstances I accept the wife’s evidence as an admission against interest. I contemplated, however decided against, ordering the sale of the entire household contents. On either party’s evidence, the household contents are of modest value and the hardship caused to both parties with selling costs and then needing to entirely replace the home’s contents is disproportionate to the issue.
The wife alleged the husband owned a boat worth $15,000. The value she attributes to it is drawn from the husband’s financial statement. The husband left the boat at Merrylands when he went to gaol in January 2003. The subject boat is a 14 foot runabout which on his release from prison the husband discovered had water in the engine oil. I accept his evidence that $15,000 is a typographical error and the boat is worth nothing like the amount. Neither party provided a valuation of the boat. In the circumstances I treat the husband’s evidence the boat is worth $1,500 as an admission against interest.
The wife claimed the husband owned a Toyota Hilux (Surf) worth $15,000. RTA records[27] show the car was disposed of on 12 May 2002. The husband alleges although he purchased and used the Hilux, it was never registered in his name. When purchased it was registered in the wife’s name and by agreement the Hilux was transferred to their son Eric. The husband understood Eric paid the wife $15,000 for the car. The wife denies receiving $15,000 or any other amount from Eric. Eric did not give evidence. Unfortunately, the RTA records reveal transaction dates but do not disclose the car’s registered owner. However, the subpoena addressed to the RTA required the RTA to produce, “Copies of the records relating to Mrs VP’s ownership of a Toyota Surf”. From this, I infer the RTA records corroborate the husband’s evidence that the wife, and not he, was the car’s registered owner. The difficulty I have is determining which of the parties received payment from Eric. Regrettably, both parties’ credit is compromised and this is not a case where I can generally accept one party’s evidence in preference to the others. It is equally plausible that Eric paid the wife for the car as paid the husband. In these circumstances I am not satisfied I can notionally add back the Toyota Hilux or its sale proceeds.
[27] Exhibit P
The wife alleged the husband owned a Holden Rodeo worth $19,000.
I have already found that the husband purchased a Holden Rodeo for $18,000 using part of his compensation settlement. When he went to gaol in 2003 the Holden Rodeo was garaged at Merrylands. Upon his release from prison, the car’s registration had expired and shortly afterwards the husband traded it in on a Subaru. The husband received $14,000 trade in for the Rodeo, $7,000 of which he used to purchase the Subaru. He spent the remaining $7,000 repaying gaol expenses, for dentists and the balance on day to day living expenses.
I am not persuaded that I should notionally add back the $7,000 spent on what appears to be reasonable living expenses.
The husband claimed a taxation debt of $5,047. This debt relates to the current taxation year. The husband’s income tax debt has accrued since his most recent release from prison. It arises at a time when both parties agree they were separated. The husband has enjoyed exclusive use of his income and there is no proper basis for treating this liability as a joint matrimonial liability.
The wife has a Commonwealth Visa Card debt of $33,000 and owes the parties’ son Darren $7,800. These liabilities relate solely to the wife’s paid legal fees. Relying on Farnell (1996) FLC 92-681 the wife’s counsel submitted the court should take the wife’s liabilities into account. This issue was recently considered by the Full Court in Chorn and Hopkins (2004) FLC 93-204. The Full Court held that the treatment of funds used to pay legal costs remains ultimately a discretionary matter. In determining how to exercise that discretion, regard should be had to the source of funds. If the funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right, they would generally not be notionally added back. Nor would any borrowing undertaken by a party post-separation for payment as fees be taken into account as a liability in the calculation of the asset pool. Outstanding legal fees themselves are generally not taken into account as a liability. If in the exercise of discretion it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability incurred to pay the legal fees should also be taken into account. Applying Chorn and Hopkins to the facts in this case, I am satisfied the proper outcome is to exclude the wife’s Commonwealth Visa card liability and debt owed to Darren from the asset pool.
Earlier in these reasons I made a series of findings concerning cohabitation. The only qualification to the wife’s counsel’s submission is that one of the parties is guilty of mounting a case based on a monumental lie is that this does not cast the net wide enough. With respect to both parties each has made the courts fact finding exercise almost impossible.
I am satisfied the parties cohabited far longer than the few months the wife suggests. Upon the husband’s imprisonment in 1967 the wife returned to reside with her parents and obtained a widow’s pension. As she was neither residing with her husband nor receiving financial support from him, there appears no issue about her legitimate entitlement to this benefit. However upon his release the parties reconciled after which there were separations while the husband was in gaol, when he lived on the Gold Coast, ad hoc absences from Harris Park, absences from Ulladulla, between 14 August 1992 and 16 February 1994 and then from early 2000. These findings affirm that I am confident each of the parties and also Darren has attempted to mislead the court. Simply put I am satisfied cohabitation was far more extensive than the wife claims. Not by a few short reconciliations but by decades. Standing back one sees these parties maintained intimate relations after their first child was born, had two more children after the wife claims they separated and bought and sold property together. The husband is far more intimately aware of the wife’s circumstances than her evidence suggests he should be. Excluding Ulladulla, there is no doubt the husband improved all of the properties the wife says she (but not he) has lived in. These improvements have been more than merely minor handy work around the properties. Excluding the first and final terms of imprisonment I also accept the wife visited the husband when he was in gaol and when her circumstances enabled her to. With so much deception apparent in the documents provided to others and submitted to this court it has been very difficult to discern facts indicative of truth. In the end I have come to the view the wife’s evidence concerning cohabitation is far more misleading than the husband’s exaggerated claims to cohabitation ending during his final term of imprisonment.
Because I am satisfied the parties jointly decided to withhold the true state of their relationship and relevantly cohabitation from Centrelink so as to enable the wife (at least) to receive welfare benefits which did not take into account cohabitation, they will both be referred to Centrelink. This is so that Centrelink can determine whether or not either party has received benefits to which they were not entitled. For both parties this seems to be a real possibility. With the real possibility Centrelink will seek repayment from one or both parties I am not in a position to determine the asset pool. At least as far as the wife is concerned, I am satisfied all money she received from Centrelink (and indeed all other sources) during the marriage was used on joint matrimonial purposes any overpayment will be a joint matrimonial liability. Interest and penalties may also, but not necessarily, also fall into the pool. Concerning the husband, at least as far as Centrelink benefits are concerned I am satisfied overpayments which arise during cohabitation (if any) must also be taken into account in deciding the pool.
Unfortunately in the Court’s experience obtaining advice from Centrelink in these circumstances is surprisingly difficult. So that the parties and Court are not required to wait indefinitely to discover whether overpayments are claimed, I request that within six weeks an officer from Centrelink appears and advises the Court whether or not further action is likely. Basically my intention is to establish as soon as possible whether I can finalise these proceedings. If no action is to be taken by Centrelink the asset pool is as identified above.
For these reasons I make the orders identified at the start of this judgment.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of Ryan FM
Associate: S.Mashman
Date: 21 March 2006
0
1
3