Eden & Eden (No 2)
[2024] FedCFamC2F 1291
•18 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Eden & Eden (No 2) [2024] FedCFamC2F 1291
File number(s): SYC 5080 of 2017 Judgment of: JUDGE STREET Date of judgment: 18 September 2024 Catchwords: FAMILY LAW - PROPERTY – de facto relationship – 20 years – 2 daughters – relationship ended March 2009 - ongoing financial connection with joint property- de facto husband acquired whole of joint property as a result of debtor’s petition by de facto wife- proceedings commenced 2017 – unfortunate procedural history- alteration of property interests under s90SM – orders for payment of $75,000 and otherwise sale of property Legislation: Family LawAct 1975 (Cth) Cases cited: AJO & GRO (2005) FLC 93-218
Dickons & Dickons [2012] FamCAFC 154
DJM v JLM (1998) FLC 92-816
Dovgan & Dovgan [2021] FamCA 306
Estate of Gardner [2019] NSWSC 1324
Fairbairn v Radecki [2022] HCA18
Fitzmaurice & Woolridge [2020] FamCAFC 64
Hickey and Hickey and Attorney-General (Cth) (Intervener) [2003] FamCA 395
Jabour & Jabour [2019] FamCAFC 78
Kowaliw & Kowaliw (1981) FLC 91-092
Piras v Egan [2008] NSWCA 59
Townsend & Townsend (1995) FLC 92-569
Division: Division 2 Family Law Number of paragraphs: 197 Date of hearing: 3 September 2024 and 4 September 2024 Place: Sydney Solicitor for the Applicant: Mr M Di Lizio of Di Lizio & Associates Counsel for the Respondent: Ms E Clifton Solicitor for the Respondent: Blumberg Family Lawyers ORDERS
SYC 5080 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS EDEN
Applicant
AND: MR EDEN
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
4 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to Part VIIIAB of the Family Law Act 1975 (Cth), the Court declares that the applicant and the respondent were in a de facto relationship from 1989 until March 2009.
2.The Court declares that is just and equitable that there be an alteration of property interests between the applicant and the respondent.
3.Pursuant to section 90SM of the Family Law Act 1975 (Cth), that the alteration of property interests be affected by the respondent paying the applicant the sum of $75,000.00 within 90 days.
4.If Order 3 is not complied with, the Property situated at B Street, Town C, NSW and more particularly described in Certificate of Title Folio Identifier … (“the property) be sold at auction within 60 days.
5.The respondent be responsible for the conduct of the sale of the property.
6.The respondent must do all acts and things and sign all necessary documents to effect the sale of the property as follows:
a.The property is to be listed for sale with such real estate agent selected by the respondent alone within 14 days of the failure to comply with Order 3.
b.The respondent is to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonable requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;
c.The reserve price for the property shall be the price nominated by the real estate agent selected by the respondent;
d.An independent solicitor or conveyancer is to have the conduct of the sale on behalf of the parties, and is to be selected by the respondent;
e.The respondent is authorised to negotiate with the highest bidder at the auction, in the event the reserve price is not reached, and is authorised to sell the property and enter a contract of sale with the proposed purchaser even if the property does not reach the reserve price.
7.Upon sale of the property, the proceeds of sale shall be paid in the following manner and priority:
a.To discharge the mortgage to Commonwealth Bank of Australia;
b.Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;
c.Payment of the legal costs relating to the sale; and
d.The balance to be divided:
i.$75,000 to the applicant; and
ii.The balance to the respondent
8.That the parties retain all their right title and interest in and to their superannuation entitlements and have no further claim on such entitlements of the other.
9.That other than as otherwise set in the above orders the parties have the sole right title and interest in any other property which is at the date hereof in their possession title or name.
10.The Court reserves its written reasons.
11.Preserves the time for any appeal so that it is not to commence until the publication of the written reasons.
BY CONSENT, THE COURT ORDERS THAT:
12.The Court dispenses the need with an oral hearing in respect of any costs dispute, including any reserved costs and directs that after the publication of the Court’s written reasons, any application for costs or reserved costs be advanced by written submissions and any affidavit evidence filed and served by the party moving for the same within 14 days of the date of publication for written reasons and the opposing party have a further 14 days to file and serve any affidavit or submissions in relation to costs, and if there is a fresh issues raised, a further 7 days for reply by the party contending that a fresh issue has been raised.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE STREET
INTRODUCTION
These de facto property proceedings were commenced by the applicant, de facto wife, on 7 August 2017 against the respondent, de facto husband, after what the Court finds to be an almost 20 year de facto relationship from 1989 until March 2009 during which the parties had two daughters, the younger of which did not turn 18 until 2014. The respondent suffered a medical episode in 2023 and has significant ongoing medical needs.
The proceedings were the subject of an order granting leave under s44(6) on 22 April 2018 and then the subject of a protracted unfortunate procedural history. There was a dismissal of the proceedings for want of jurisdiction on 8 July 2022 which was set aside on appeal on 27 October 2022.
The matter was transferred into the docket of this Court by orders made on 19 February 2024 fixing the matter for a 3 day hearing commencing on 3 September 2024. The hearing concluded on 4 September 2024, on which day this Court pronounced final orders and reserved its written reasons. The Court made an order preserving time for appeal so as not to commence until the publication of these written reasons.
EVIDENCE
The following affidavits were read, with annexures treated as being in evidence:
(1)Affidavit of Mr Eden dated 13 August 2024; and
(2)Affidavit of Ms Eden dated 2 August 2024.
EXHIBITS
The following exhibits were tendered into evidence in the proceedings:
(1)Exhibit A: Applicant’s Financial Statement dated 2 August 2024;
(2)Exhibit B: Joint Tender Bundle;
(3)Exhibit C: Respondent’s Financial Statement dated 13 August 2024;
(4)Exhibit D: Joint Balance Sheet dated 29 August 2024;
(5)Exhibit E: MSE-1 dated 2 August 2024; and
(6)Exhibit F: Applicant’s Travel Tickets.
CHRONOLOGY
Date Event 1947 Respondent is born (77 years of age). 1956 Applicant born (68 years of age). 1980 Applicant marries in Country F. 1981 Applicant Emigrates from Country F to Australia. 1988 Applicant’s husband dies. 1988-1989 Parties commenced a de facto relationship 1990 Parties purchase a property at O Street, Suburb G for $310,000. 1990 Applicant inherited of $106,443.33 from the late husband’s estate – used by respondent - contributes to renovations of O Street and IVF treatment 1992 Daughter (X) is born (now 32) 1996 Daughter (Y) is born (now 28) 2001 Parties purchase house in D Street, City E, Country F for $36,000 2002 Parties purchase land in Town AN, City E, Country F for $2,500 2005 Applicant’s father dies, receives inheritance $125,000 Mid-2006 Parties purchase further land in Town AN, City E, Country F for $8500, sold late 2015 for about $110,000 Late 2006 Parties purchase house in Town AO, City E, Country F for $100,000 according to respondent, for $8000 in mid-2006 according to applicant 22 November 2007 Parties first separate.
Respondent moves out of the O Street property.Late 2007 Parties enter purported debt agreement with a repayment schedule for the lump sum payment of $110,000 by the Respondent for the Applicant’s credit card debt. Late 2008 Respondent returns to live at the former matrimonial home (O Street, Suburb G) with Applicant and children. 2009 Parties proposed Domestic Relationship Agreement 2009 Respondent receives redundancy payment of $194,000 March 2009 De facto relationship subsisted until March 2009 2010 Older daughter turns 18 2012 Second proposed Financial Agreement Late 2012 O Street property is sold for $1,0650,000.
A property purchased at B Street, Town C (the Town C property), jointly by the parties.December 2012 Settlement statement from N Law Firm detailing distribution of settlement proceedings Early 2013 Respondent pays part of the Applicant’s credit card liabilities, albeit properly characterised as joint debts, namely:
$21,865 to Applicant’s NAB MasterCard;
$3,000 to Applicant’s Credit Card; and
$40,000 to Applicant’s Westpac Credit Card.2013 Respondent receives $112,590.00 as a result of a claim against the Commonwealth Bank of Australia in relation to superannuation investments Early 2014 Respondent encourages Applicant to become bankrupt, to pay out joint credit card debts incurred during relationship. This included the settlement of her earlier credit card debt.
Respondent subsequently offers to buy out applicant’s interest the of Town C property. Her interest transferred by trusteeEarly 2014 Applicant signs debtor’s petition – respondent other owner of Town C – no mention other overseas property or 31 moneys owed to you Early 2014 Sequestration order made against the Applicant. 2014 Younger daughter turns 18 2014 Respondent marries Ms AG (Current wife) Late 2014 Handwritten letter by Respondent purportedly in the Applicant’s name and signature to AQ Firm, trustee in bankruptcy Mid-2015 Respondent purchases the Applicant’s half share in the Town C property from the Trustee in Bankruptcy for $83,000 and encumbers property with mortgage for the same Late 2015 Applicant signs a purported tenancy agreement with AR Company (Respondent’s company) to continue to live in the Town C property for $100 rent per week paid to the Respondent. Late 2015 Town AO, City E, Country F sold for about $110,000, taxes on sale $7,200, $21,600 repairs, $20,500 for mother’s hospitalisation and care, helped brother and living expenses- sold with help of respondent Mid-2017 The Applicant discharged from bankruptcy Mid-2017 The Respondent commences NCAT proceedings, seeking to have the applicant evicted from the Town C property. These proceedings are ultimately dismissed. Mid-2017 Letter respondent to applicant for unpaid rent – termination notice 7 August 2017 Proceedings under Part VIIIAB commenced by applicant February 2018 Concession by respondent relationship broke down shortly after March 2009 20 April 2018 By Consent Orders by Court granting leave under s44(6) and refers to date of separation 16 July 2018 Applicant and Respondent attended a Conciliation Conference October 2018 Settlement of the further claim against the Commonwealth Bank of Australia by the respondent in relation to superannuation investments in the further sum of $150,000.00. 19 November 2018 Directions hearing before Court. In the presence of the Respondent the court is wrongly advised that the respondent had decided not to pursue his claim against the Commonwealth Bank. 11 December 2018 Letter from Respondent’s solicitors to Applicant’s solicitor stating that the Respondent instructs, wrongly, there are no open complaints or cases with CBA. Annexed to the letter was an email dated 29 November 2018 from CBA to like effect September 2019 Email explaining Payout fully spent- Commission, into super accounts, solicitors mortgage payments Town C, rent and holiday Late 2019 The Respondent changed the locks to the property and evicts the Applicant from the property. 3 September 2020 Transcript records consent by respondent – go ahead under jurisdiction April 2021 Respondent and current wife purchase a property at AS Street, Suburb AT, QLD for $415,000 8 July 2022 Order dismissing proceedings want of jurisdiction 27 October 2022 Appeal allowed on dismissal remitted by Austin J 2023 Respondent suffers medical episode Early 2024 Respondent and current wife move into Town C property Mid-2024 Sale of AS Street, Suburb AT, QLD for $405,000-net proceeds $28,552 APPLICANT’S EVIDENCE
The applicant was born in Country F and immigrated with her former husband to City AM, Australia in 1981. The applicant became an Australian citizen in 1983.
The applicant stated that the parties met in about 1989 and commenced a relationship and cohabitation shortly thereafter.
The applicant relocated with the respondent as a couple in about early 1990.
The applicant has two daughters X, born in 1992 and Y, born in 1996 with the respondent.
The applicant deposed that at the date of cohabitation the only significant asset held by the applicant was her entitlement to an inheritance from her deceased husband. The applicant identified the respondent informed her that he was divorced and later telling her that he was not divorced and that his wife and children had relocated to Europe. The applicant alleges that the respondent did not fully confide with her his financial position at the commencement of cohabitation.
The applicant stated that in 1990 the parties purchased a property at O Street, Town C (“O Street property”) for $310,000.00. The applicant identified having conversations with the respondent prior to purchasing the property in relation to whether they could afford the property.
The applicant received a letter from the Public Trustee enclosing a cheque in the sum of $106,443.33 being her entitlement from her late husband’s estate in 1990. The applicant alleges that she showed the respondent the letter containing the cheque and said to her “that’s great we can put it on the house” and identified the respondent taking her to the bank, opening a chequing bank account and depositing the cheque. The applicant alleges that she was unable to access the funds deposited into the chequing account and is under the impression that the entirety of the inheritance was used to purchase the O Street property.
The applicant deposed that there was a loan from Westpac Bank for $270,000.00 which was secured by a mortgage over the O Street property. The applicant identified that the respondent organised all financing for the purchase of the O Street property.
The applicant stated that the respondent in an undated letter questioned whether the applicant contributed any money from her inheritance to the purchase of the O Street property. The applicant also identified locating a letter dated mid-1990 sent by the respondent to the manager of Westpac Bank Suburb AU where the respondent outlined his financial circumstances for the purchase of the O Street property.
The applicant ‘s solicitors received a letter from the respondent’s former solicitors in mid-2018 advising that the applicant’s inheritance contributed to the purchase of the O Street property but did not constitute $106,000.00
The applicant deposed that during cohabitation she was primarily responsible and carried out domestic duties for the respondent and the children.
The applicant also acknowledged hosting international students in the O Street property and being responsible for them in terms of shopping and preparing meals. The applicant identified that the international students would pay an accommodation fee into an account managed by the respondent.
The applicant relocated to Country AV with the respondent and their children in 1992 for almost 2 years.
The applicant identified that the respondent purchased a business in Suburb AW in 2005 or 2006 and selling it after 18 months. The applicant identified that during that 18 months period she would attend the business and clean and prepare the premises each day. The applicant alleged that she has never received any payment for such work other than occasional reimbursements of petrol expenses for travelling to the business. The applicant alleged that the respondent did not tell her how much the business sold for or for what purpose the proceeds of the sale were used for.
The applicant deposed that the respondent would travel at least once a year to Country F becoming a source of discord in the relationship. The applicant identified several incidents of domestic violence taking place during cohabitation in relation to arguments regarding the respondent’s holidays to Country F. The applicant expressed being afraid of the respondent.
The applicant alleged that the respondent failed to inform her of any details in most of his financial dealings.
The applicant deposed that in late 2007 the respondent said to her “I am going to leave you. I want to live by myself. I don’t want a family anymore” The applicant identified that the respondent remained in the O Street property until late 2007.
The children remained with the applicant in the O Street property and faced significant difficulty during that time referring to one of the parties’ children being hospitalized after a self-harm episode.
The applicant believed that the relationship had broken down during the first separation and engaging lawyers to reach a resolution in relation to the division of property.
The applicant deposed that during the first separation she received no financial assistance from the respondent other than mortgage repayments on the O Street property.
The applicant identified that the first credit card debt had accumulated since the year 2000. The applicant identified that the respondent assisted her in completing the application for the credit cards. The applicant alleged that the respondent was aware of the debts.
The applicant stated that during the relationship with the respondent, he would provide her with sporadic financial assistance to meet the family’s living expenses. The applicant expressed using the credit card to meet daily living expenses for herself and her children.
The applicant asserted that the respondent attended the O Street property in late 2007 and having a conversation to the effect:
A - “now that you have left me, I don’t have any money for groceries for me and the children. I can’t buy clothes for them, and you left me with a big credit card debt. Can you at least pay off my credit card debt”
R - “I can’t do that unless you sign a paper where you promise to repay me”
The applicant referred to a later conversation between herself and the applicant in late 2007 where the respondent said, “unless you pay off your credit card debt you will be made bankrupt”. The applicant signed a loan agreement between herself and the respondent dated late 2007. The applicant acknowledged having a credit card debt of $110,000.00 at the time of signing the loan agreement.
The applicant asserts resuming cohabitation with the respondent in late 2008. The applicant identified the respondent slept in the spare room for 2 weeks before resuming to sleep in bed with the applicant.
The applicant applied for child support benefits with the Child Support agency after the respondent had left in 2007 and continued to receive those payments through the Child Support Agency even after the respondent returned home in late 2008.
The applicant alleged that the respondent completed and lodged a Centrelink application form for her to receive payments. The applicant identified that she signed the form without reading it.
The applicant attended counselling in 2007 after the parties first separation and recalled attending counselling with the respondent on two occasions in 2008. On the second occasion the parties were advised to seek medical advice and upon attending the family doctor the respondent received a prescription for depression.
The applicant asserted that the parties maintained a joint bank account with ANZ Bank at O Street when they resumed cohabitation in 2008 at the O Street property.
The applicant deposed that upon the respondent returning to the O Street property the parties and their children began travelling and going out together as a family including holidays to City H in 2009, 2010 and 2011.
The applicant said the respondent provided her with two copies of the first proposed domestic relations agreement in mid-2009 concerning financial entitlements in the event of separation which had already been signed by the respondent. The applicant identified that she did not sign the agreement. A further second financial agreement was prepared by the respondent’s solicitors in 2012, however the agreement was also not signed by the applicant.
The applicant said that the O Street property was sold in 2012 for $1,065,500.00. The applicant identified that the respondent expressed concerns prior to the sale of the property in relation to paying off the mortgage. During the sale of the O Street property the applicant identified a conversation with the respondent where he said words to the effect of:
“After we finalise the sale of the house, we will buy another cheaper property. We will have to buy something in the county. We can’t afford to buy a property in Sydney”.
The applicant said that a property at B Street, Town C NSW (“Town C property”) was purchased by the parties in 2012 for $250,000.00 using the proceeds from the sale of the O Street property.
The applicant asserted that the respondent organised a loan from the Commonwealth Bank and the parties signed the mortgage for a loan amount of $60,000.00 in 2012 and was discharged in October 2014.
The applicant moved into a unit in Suburb G after the sale of the O Street property in 2012 until late 2013. The applicant identified moving into the Town C property in late 2013 whilst the respondent remained living in Sydney.
The applicant alleged accumulating a further credit card debt of about $99,000.00 between 2009 and 2014. The applicant identified that the expenses for which the credit cards were used were the living expenses for herself and her children.
The applicant recalled a conversation with the respondent in March 2014 where the respondent said words to the effect of:
R – “you should apply for bankruptcy to get rid of that debt. If you include the other debt of $110,000.00 you will be able to get it back”.
The respondent recalled another conversation with the respondent in March 2014 to the effect of:
R – “I have the documents for you to apply for bankruptcy. I will fill them out. All you will have to do is sign them that way we will get rid of your credit card debt”.
A – “I really don’t know how to fill in these documents”
R – “Don’t worry I know how to do it. I did it before for your friend. I told you I will fill them in for you. You just have to sign them”.
The applicant recalled the respondent told her she needed to include all assets on the bankruptcy application. The applicant alleged that the respondent said to her “I won’t put the properties in your name in [Country F]. I don’t think it’s necessary”
The applicant signed the debtors petition and a statement of affairs dated early 2014.
The applicant was declared bankrupt in early 2014 and a trustee of her estate being appointed.
The applicant said that the respondent informed her he was going to buy her share of the Town C property and that he required her to sign a lease. The applicant recalled being notified by a letter dated July 2015 that the trustee had agreed to sell the applicants interest in the property to the respondent. The applicant received a letter dated July 2015 advising her that she would be evicted from the Town C property unless she came to an agreement with the respondent. The applicant received a letter dated late 2015 advising the applicant that she would be evicted from the Town C property if she did not sign the respondents proposed lease.
The applicant signed a lease for the Town C property with the respondent’s company AR Company at some point after late 2015.
The applicant alleges that her share of the Town C property which had passed to the trustee was transferred to the respondent in 2015.
The applicant recalled being discharged from bankruptcy in mid-2017.
The applicant said that the respondent purchased a number of real estate properties and shares through companies that he was sole shareholder and director such as AR Pty Ltd, during the course of the relationship.
The applicant deposed that the respondent inherited $125,000.00 in 2005. The applicant identified that this money was deposited into an ANZ account in the name of both parties.
The applicant alleged that the respondent managed all financial matters during the relationship and did not inform the applicant as to how proceeds from the sale of properties or the respondent’s inheritance was used.
The applicant purchased four properties in Country F with the respondent in the applicant's name. The applicant identified that she has retained three of the four properties while her brother and his family live in the remaining property rent free.
The applicant alleged meeting Mr AX in about late 2015. The applicant said that Mr AX accompanied the applicant and her children in Country F where they stayed for about three weeks in late 2016.
The applicant alleged that she has maintained her friendship with Mr AX and that he would visit her every two months and stay overnight at the Town C property whilst she would visit him once a month staying overnight at his City AY home.
The applicant alleged that Mr AX did not provide her with any financial assistance and identified that they do not share any joint bank accounts. The applicant said that she has not been in a romantic relationship with Mr AX since 2018.
The applicant deposed that in 2013 after the respondent moved to the Town C property, he informed the applicant that he had received $125,000.00 from the Commonwealth Bank for improper financial advice.
The applicant alleged that the parties signed a heads of agreement in July 2018 in relation to the respondents Commonwealth Bank claims. The applicant asserted that paragraph four of the heads of agreement provided that any future funds received by the respondent from the claim against the Commonwealth Bank of Australia would be shared equally between the parties.
The applicant was informed by her solicitor that a letter dated 11 December 2018 from the respondent’s solicitor with an email from the Commonwealth Bank dated 29 November 2018 which stated, “Our Client instructs there are no open complaints or cases with the Commonwealth Bank of Australia”.
The applicant said subpoenaed documents from the Commonwealth Bank of Australia indicate that the respondent received an additional $112,590.00 in compensation from the bank in 2013.
The applicant alleged living in the Town C property from about late 2013 until December 2019.
The applicant received a termination notice of the lease in mid-2017.
The applicant identified travelling to Sydney in late 2019 and receiving a phone call from a neighbour in Town C informing her that a chain lock had been put on, a note on the front door, the screen door handle removed and that the locks had been changed. The applicant was informed by her daughters in late 2019 that the respondent left items belonging to the applicant at their houses.
The applicant volunteered twice a week at a care facility whilst living at the Town C property.
The applicant deposed to previously being in receipt of a “New Start” allowance from Centrelink of about $580.00 but now receiving an aged pension.
The applicant asserted having two Town C based doctors who have cared for her since 2013 including a General Practitioner and a specialist.
The applicant now lives with her sister in Sydney. The applicant identified paying $200 in rent per week to her sister. The applicant currently shares a bed and room with her sister while her nephew has a separate room. The applicant said that she cannot afford alternate accommodation.
The applicant gave oral evidence that the relationship ended under the same roof shortly after March 2009 and that this was communicated to her by the respondent. The applicant changed her evidence about a child support conversation with the respondent and continuing the same from October 2009 in an earlier affidavit to October 2008. The applicant admitted that she was aware that the Country F properties were not included in her debtor’s petition. The applicant blamed the respondent for the omission of those properties from the petition. The applicant’s evidence makes clear that she knew she was omitting the same, however says she did so on the advice of the respondent. The applicant agreed that she did not include any asset in relation to any claim involving the Commonwealth Bank.
The applicant admitted spending significant time in City AY and had a relationship with a Mr AX over 3 to 4 years. The applicant maintained that the relationship had come to an end and that Mr AX lent her money to fix her car which she has tried to repay. From further bank statements it was admitted that Mr AX purchased an air travel ticket for the applicant to see her daughter who had given birth and that she repaid him. The applicant downloaded herself an afterpay app on her mobile that she used for living expenses and other purchases. The purchases using afterpay were almost half her pension revealing a diminished level of financial means. The evidence about the applicant’s visits to City AY, her volunteer work and staying with friends whilst in City AY further revealed the limited means and limited standard of living of the applicant.
The applicant admitted that the property in her name in Country F was purchased with funds by the respondent. The applicant acknowledged that her lawyers were paid from the proceeds of sale of the O Street property in 2012. The applicant in oral evidence did not accept that she received the funds identified in the settlement sheet from the sale proceeds of O Street that shows her allegedly receiving approximately $37,000. Although she did travel overseas in 2013 the applicant did not accept that she actually received those funds into her account.
The applicant acknowledged that there were credit card payments paying off her credit card debts acquired after the end of their relationship paid by the respondent. The applicant disputed that she received an amount of approximately $6000 into a CBA account and contended she had no such account.
The applicant alleged that the respondent controlled everything at the time of the alleged 2012 settlement, whilst she had solicitors acting for her and denied that this was an exaggeration.
The applicant did not accept that there as any agreement to use the equity in the Town C property to pay out her credit card debts. The applicant denied knowing anything about a mortgage of the Town C property, although it is clear she signed a mortgage at the time of the acquisition of that property.
RESPONDENT’S EVIDENCE
The respondent’s affidavit dated 13 August 2024 identified that he was born in Country AZ in 1947 and moved to Australia in 1972.
The respondent deposed that he formerly worked as a professional for a large multinational company from 1979 to 2009.
The respondent asserted that the parties commenced a relationship in or about 1988 and relocated to Sydney together in 1990.
The respondent alleged that the parties separated in November 2007 when the respondent moved out of the O Street property into a nearby rental apartment.
The respondent said that he met his current wife, Ms AG in 2011 and that they were married in 2014.
The respondent entered the relationship having finalised his financial separation from his previous wife and having sold a property he owned in City AM in 1990 for $210,000.00. The respondent identified the applicant entered the relationship with no assets but an expectation to receive an inheritance from her late husband. The respondent alleged that he is unaware how the applicant used her inheritance but expressed a belief that the inheritance was used to finance IVF treatment.
The respondent said that the parties purchased the O Street property for $310,000 in 1990 as joint tenants. The respondent alleged that he paid the $31,000.00 deposit in 1990 from his savings and that there was a mortgage of $270,000.00
The respondent deposed that he was the sole wage earner throughout the relationship, noting that the applicant ceased part-time employment in 1992 prior to the birth of their daughter. The respondent expressed meeting the cost of all mortgage repayments, rates, utilities, daily living expenses including school expenses, extra-curricular and school excursions.
The respondent recalled that the applicant contacted him in 2007 and said words to the effect of “I have a big credit card debt. I don’t know how I am going to pay it. You have to help me”. The respondent identified increasing the mortgage over the O Street property from $140,600 to $260,000 to pay off the applicant’s credit card debt. The respondent identified that the applicant signed an agreement and repayment schedule dated late 2007 to repay the respondent the $110,000.00 for her accumulated credit card debt.
The respondent referred to his daughter’s significant mental health struggles including episodes of self-harm, following the parties separation.
The respondent said that he began paying child support in or about June 2008.
The respondent alleged moving back into the O Street property in or about late 2008 and initially sleeping on a mattress on the floor. The respondent referred to suffering from depression and being unable to work for a period of 10 weeks after moving back into the O Street property.
The respondent was made redundant in 2009 and receiving a payment of $194,000.
The respondent operated a business with the applicant charging between $200 and $300 a week for international students to stay in the spare room of the O Street property generating additional income. The respondent declared $20,795 of income from this business in his 2006 tax return. The respondent identified that the applicant collected all rent from the business for her sole use after November 2007 until the property was sold in 2012.
The respondent said that a domestic relationship agreement identifying how all assets were to be divided between the parties upon separation was prepared by the applicant’s solicitors in March 2009 and signed by the respondent and his solicitor at the time. The respondent said that the applicant never signed the agreement.
The respondent referred to the applicant instructing new solicitors in relation to a new agreement in 2012. The respondent referred to correspondence from the applicant’s solicitor referring to the date of separation as “at a point in 2009” and in later correspondence dated 6 November 2012 “as about 28 July 2012”. The respondent stated that the parties agreed that the pool of assets would be split 70/30 in the applicant’s favour. The respondent agreed for the applicants outstanding solicitor fees to be paid from the joint proceeds of the O Street property.
The respondent deposed that the O Street property was sold in 2012. The respondent noted that the applicant refused to sign the Contract for sale unless she had elsewhere to live. The respondent referred to being re-partnered but agreeing to assist the applicant purchase the property at B Street, Town C with both parties owing a one-half share with the intention for the property to be bequeathed to the parties’ children.
The respondent instructed his solicitors to prepare a financial agreement detailing the arrangement for the division of the net proceeds of the sale of the O Street Property and how the applicant would reside in the B Street, Town C property rent free with the rates, insurance and other fixed expenses to be paid equally between the parties.
The respondent took out a mortgage over the B Street, Town C property from the Commonwealth bank for the sum of $75,000 to give effect to the 70/30 division of pooled assets. The respondent alleged that the applicant received the whole benefit from that loan while he was solely responsible for all repayments.
The respondent alleged that the applicant also retained the four properties in Country F along with the interest held in the Town C property, the payment of $37,461.00 from the sale of the O Street property and the respondent’s payment of $75,000.00. The respondent alleged that the applicant received 70% being $280,461.00 and he received 30% being $123,155.00.
The respondent alleged that the agreement for a 70/30 division was intended to finalise the parties financial relationship on a final basis.
The respondent acknowledged assisting the applicant complete her Bankruptcy application form. The respondent alleged that the applicant did not include her Country F properties in the list of assets on her Bankruptcy application.
The respondent said that the Trustee in Bankruptcy sought to sell the applicant’s share in the Town C property. The respondent negotiated a final settlement of $83,000. The respondent accessed his superannuation and took out a further loan of $70,000 with the Commonwealth bank noting the previous loan of $75,000.00 was paid off to pay the Trustee. The respondent said he still owes approximately $38,569.00 to the Commonwealth bank in respect of the loan.
The respondent said that a condition of purchase from the trustee was the vacant possession of the Town C property. The respondent identified that the applicant offered to pay rent in order to stay at the Town C property. The applicant agreed to sign a residential tenancy agreement dated September 2015 to pay $100 per week in rent for the front bedroom and access to all common areas in the house.
The respondent deposed that the applicant requested that he sign a Centrelink form as her landlord to enable her to receive rental assistance. The respondent alleged that the applicant never paid rent despite receiving rental assistance and signing the tenancy agreement.
The respondent recalled writing to the applicant requesting that the applicant pay 10 weeks of rent in mid-2017, and writing to the applicant again one month later enclosing a termination notice that was registered with the Residency Tenancy Tribunal. The application for eviction to the Residency Tenancy Tribunal was listed before the NCAT tribunal in mid-2017 however the hearing was adjourned until late 2017.
The respondent confirmed that the applicant commenced proceedings in the FCFCOA on the 7 August 2017. The respondent noted that the NCAT proceedings could not continue whist FCFCOA proceedings had been commenced.
The respondent identified that the applicant lived in the Town C property from late 2013 until late 2019. The respondent alleged that the applicant owes four years’ worth of unpaid rent in the sum of $43,680.00.
The respondent alleged that he was notified that the applicant was vacating the Town C property in late 2019 to which he agreed to lease to the Town C property to friends who changed the locks and secured the property with his permission.
The respondent purchased four properties in Country F with the applicant, that were all registered in the applicant's name. The respondent noted that the applicant retained all four properties as part of the 70/30 split of assets in 2012.
The respondent stated that the applicant sold the Town AO, City E, Country F property in 2015 for approximately $110,000.00. The respondent noted signing a release declaring no interest in the property.
The respondent deposed that he suffered from depression as a result of these proceedings, and suffered from a medical episode in 2023 that has had a permanent effect on the respondent.
The respondent said that he and his current wife moved into the Town C property in early 2024. The respondent identified that initial modifications that were required were carried out at a cost of $3,500.00. The respondent noted that in early 2024 his Homecare Package was approved and the home care provider carried out minor bathroom modifications.
The respondent stated that he is unable to work and now receives the aged pension and that his current wife left her job to become the respondents full time carer and receives a carers payment and allowance.
The respondent said that he sold the Queensland unit he owned with his current wife in mid‑2024 as he could no longer meet the costs of the mortgage repayments. The respondent identified that the property was sold at a loss and after repayment of the mortgage the respondents share of the sale proceeds was only approximately $30,000.00
The respondent sold a small parcel of shares for $1,000.00 and Motor Vehicle 1 for $6,000.00.
The respondent rents out a room of the Town C property and shared use of the house for $150 rent per week.
The respondent identified the medical professionals he currently attends for treatment and monitoring. The respondent noted that further modifications are planned for the Town C property by his home care providers.
In oral evidence the respondent confirmed the properties he bought and sold between 2008 and 2012. The respondent confirmed that the Commonwealth Bank mortgage on O Street of $246,000 included the $110,000 credit card debts incurred by the applicant and that the home loan had been increased to cover the same. The respondent confirmed that the applicant refused to sign the sale contract for O Street in 2012 unless she knew where she was going to live.
The respondent said the Town C property was something they both were going to be bequeath to their two children. The Court raised with the respondent that the full credit card debts were not paid out on settlement of O Street and were in existence and the card numbers put into the debtor’s petition. The respondent said that the applicant wasn’t aware that she had her credit cards paid out. The respondent said the applicant had a CBA savings account but that she did not have an overdraft account. The respondent was not able to confirm that he paid $6723 to the applicant’s savings account.
The respondent confirmed that he assisted the applicant complete the debtor’s petition and that he included the alleged debt of $110,000 and that it was incurred over the period of the de facto relationship. The respondent only paid out of the O Street settlement $64,865 when the actual debts amounted to $99,000. The respondent completed the date allegedly incurred for the credit card debt for Westpac in the debtor’s petition as mid-2012 and confirmed it was in his handwriting but couldn’t say were it came from.
The respondent couldn’t explain where the alleged overdraft debt to the CBA came from in the debtor’s petition and presumed it was the applicant’s.
The respondent was asked about the related party box on the petition for the alleged 2007 debt and asserted that he has always maintained he is not the applicant’s husband. The respondent confirmed that 2007 debt made him a major creditor and that the respondent was effectively bankrupted because of that 2007 debt. The respondent confirmed he prepared the alleged debt letter dated late 2007 that the applicant owes him $110,000 and which she signed. The respondent said in evidence that he was only trying to help her out and said “She wasn’t very sharp”. The respondent confirmed his understanding that the trustee could sell the assets to a major creditor.
The respondent confirmed he declared accommodation income in his tax return but included in the return the assertion that the property was 100% owned by him.
The respondent confirmed that that letter dated late 2014 was in his handwriting and purported to be signed by the applicant. The contents of the letter made assertions as to the $110,000 debt and alleged that the bank delayed processing the mortgage. The respondent confirmed that he got a dividend of $13,000 from the trustee in relation to his alleged 2007 debt. The respondent confirmed that he purchased the applicant’s half interest in Town C for $82,000. The respondent confirmed that the applicant lived at Town C for about 5 years.
The respondent was asked about a letter to the Financial Ombudsman Service in relation to the CBA and said he was represented by Financial Management in relation to the advice from AP Company in 2006 concerning super. The respondent confirmed that the super shares were acquired during the de facto relationship and that he suffered a loss of about $250,000. The respondent was also asked about the claim on the CBA and said he put the $112,590 received in 2013 back into his super.
The respondent was asked about his second claim on the CBA and said he received another payout in 2018. The respondent said the applicant’s inheritance was spent on the quite extensive renovation after they moved into O Street. The respondent was asked about the tenancy agreement between his company AR Company and the applicant. The respondent confirmed AR Company was not the owner of the property and that he did so in order to be able to directly garnishee the rental money from Centrelink.
The respondent was also asked about the letter dated October 2018 which confirmed a further settlement payment from CBA of $150,000 and was taken to a letter by his solicitor’s that suggested no open complaints and did not disclose receipt of the $150,000 by the respondent.
The respondent was asked about the acquisition of the property in Suburb AT, Queensland and the reference to land worth $60,000 that belongs to his current wife.
PRINCIPLES IN RELATION TO ALTERATION OF PROPERT INTERESTS – DE FACTO RELATIONSHIPS
The definition of de facto relationship in s 4AA of the Family LawAct 1975 (Cth) as follows:
4AA De facto relationships
Meaning of de facto relationship
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6));
(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3) No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4) A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5) For the purposes of this Act:
(a) a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
In respect to the parties dispute regarding the division of their property these proceedings, s 90SM of the Act, the Court has taken into account sets out the following:
(1)In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring
(i)either or both of the parties to the de facto relationship; or
(ii)the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
(2)If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
(iii)whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
Section 90SF(3) of the Act is as follows:
(3)The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship); and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i)a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
The applicant is seeking an alteration of property interests under s 90SM of the Act. The Court must be satisfied that it is just an equitable to make such an order. The Court must take into account the matters in s 90SM(4), including the matters so far as relevant in s 90SF(3) of the Act. The Court may make a declaration as to the existence of a de facto relationship under s 90RD of the Act and, in relation to that declaration power, the Court must be satisfied of the geographical requirement under s 90RG of the Act. Section 4AA defines the meaning of a de facto relationship.
There is a length of relationship requirement in s 90SB of the Act and also a geographic requirement under s 90SK for the making of an order under s 90SM of the Act. The principles in relation to the approach of the four-stage process for alteration of property interests are correctly identified in the applicant’s submissions referred to below and is summarised, albeit referring to the married parties relevantly identical provisions.
In Hickey and Hickey and Attorney-General (Cth) (Intervener) [2003] FamCA 395 (“Hickey”) the Full Court discussed the preferred approach to the determination of a property settlement order:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. (Citations omitted)
In Fitzmaurice & Woolridge [2020] FamCAFC 64 (“Fitzmaurice”), the Full Court makes the point that Hickey is only a preferred approach:
These three aspects echo three of the four steps or stages developed in [Hickey]. Adherence to those four steps is not mandatory, and the approach “merely illuminates the path to the ultimate result” (see Norman & Norman [2010] FamCAFC 66 at [60]). Indeed in Martin & Newton [2011] FamCAFC 233; (2011) FLC 93-490 at 86,127, it was said of the four step calculus: 305. ... [T]hat approach is not legislatively mandated, and as the Full Court [in Hickey] said, is simply the preferred approach. This is because it will be sufficient, in most cases, to have regard to the overall justice and equity of the orders after determination of the asset pool, consideration of contributions and assessment of the relevant S75(2) matters.
The principles in relation to the existence of a de facto relationship are adequately summarised as follows. In Piras v Egan [2008] NSWCA 59, Campbell JA held at [146]:
The finding of not being satisfied that the plaintiff lived on a full-time basis with the Deceased in the relevant period is of central importance to whether a de facto relationship existed. It should be recalled that the list of “circumstances” in section 4(2) are reminders of matters that possibly might be relevant in deciding whether two people are in a de facto relationship, but do not state its essence. The essence is to be found in the definition in section 4(1). If two people do not “live together as a couple” they do not satisfy the definition of being in a de facto relationship, regardless of what might be the situation concerning the various “circumstances” listed in section 4(2).
The principles have also been summarised in Estate of Gardner [2019] NSWSC 1324 [20] – [44] Bell J. These principles, in determining when the de facto relationship commenced, whether it existed, and when it ended, and the statutory framework are summarised by the Full Court in Fairbairn v Radecki [2022] HCA18 at [4-6], [28-31], [33], [38-39].
Is it just and equitable to make a property adjustment?
Addbacks
In AJO & GRO (2005) FLC 93-218 at 79,617, the Full Court identified three categories where it may be appropriate to notionally add back an item of expenditure, as follows:
(1)Where the parties have expended money on legal fees: see DJM v JLM (1998) FLC 92‑816 at [85]-[262];
(2)Where there has been a premature distribution of matrimonial assets: see Townsend & Townsend (1995) FLC 92-569 at [81]-[654]; and
(3)In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at [76]-[644], including:
(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
The Court is required to make an assessment of the nature and quality of the totality of the parties’ contributions throughout the entirety of their relationship, together with their contributions in the period subsequent to their separation. In [29] Dickons & Dickons [2012] FamCAFC 154, [14] (Bryant CJ, Faulks DCJ, Murphy J); Jabour & Jabour [2019] FamCAFC 78, [61] (Alstergren CJ, Ryan and Aldridge JJ). See also Dovgan & Dovgan [2021] FamCA 306, [347] (Harper J), which restates the need to holistically assess contributions following the case of Dickons, and that ‘all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder’.
APPLICANT’S SUBMISSIONS
The Court has taken into account the applicant’s case outline dated 30 August 2024. The amended application advanced orders for sale of the Town C property and a 90% split of the net sale proceeds in favour of the applicant. The applicant’s outline advanced a division for contributions of 50% by the applicant. Reference was made to a global approach, the applicant’s contributions from her late husband’s estate and that the non-financial contributions must be given significant weight. The applicant accompanies the respondent to Country AV for 18 months. The outline referred to the post separation contributions as a parent, the CBA claim and the bankruptcy said to have occurred at the instigation of the respondent. The outline addressed the adjustments and criticised the respondent’s disclosure.
Mr Di Lizio on behalf of the applicant submitted that it was just and equitable to alter the property interests and did not contend that the de facto relationship continued after March 2009. It was however a 20 year de facto relationship during which the couple had 2 daughters. It was submitted that the applicant contributed to the renovations for the O Street property from her inheritance of $125,000 in 2005 and that she also contributed part of that inheritance towards the IVF treatment for conceiving their 2 daughters.
It was submitted that the applicant did not receive proceeds from the sale of the O Street property, either in the amount of $6,723 or $37,461.19. It was maintained that the applicant had no Commonwealth Bank account, but that does not sit with her savings account identified in the debtor’s petition.
The Court raised with Mr Di Lizio the apparent problem with the existing costs notification and the certificates to which the applicant was entitled by reason of the orders made by the learned Austin J upon upholding the appeal against the dismissal for want of jurisdiction. The Court raised that it would appear perverse to order a sale of the Town C property only to meet legal costs. The Court also raised its concern as the interest albeit of the respondent’s current wife in their now matrimonial home being the Town C property and the serious consequences of the respondent’s medical condition and disabilities.
Mr Di Lizio did not press for the significant % identified in the amended application or indeed in his written submissions and ultimately submitted that the appropriate amount was $70,000 to be paid to the applicant and confirmed that this would result in a substantial benefit for the applicant.
RESPONDENT’S SUBMISSIONS
The Court has taken into account the respondent’s case outline dated 30 August 2024. The amended response asked for orders that the amended application be dismissed. The respondent’s outline advanced a separation in November 2007 or December in 2012 through to December 2014, however advanced that the consent by the respondent had resolved the jurisdictional issue. The outline argued for no alteration of interests and a dismissal of the application. Reference was made to the first consideration identified in Standford v Stanford (2012) HCA 52 at 37 and that the property was adjusted under a separation agreement of 2012 that was not binding. The respondent alleged he performed that 2012 agreement and that property was distributed in accordance with those 2012 terms. The outline identified the legal and equitable interests as at the date of hearing and that the respondent’s wife Ms AG has a significant equitable interest after a relationship said to have commenced in 2011.
The outline addressed the sale of O Street and acquisition of Town C. It was alleged that the applicant had engaged in waste in accumulating credit card debts of $110,000 and reliance was placed on assigned agreement dated late 2007 by the applicant to repay the same. The outline referred to the credit card debts and bankruptcy of the applicant in 2014. It was alleged there was an agreement in 2015 for the respondent to acquire her half interest by paying out the wife’s debts and by accessing his superannuation to fund an amount of $83,000 and that he then acquired the legal title with due consideration. The outline referred to the alleged rental agreement made in late 2015, alleged receipt by the applicant of 70% of the asset pool and the CBA compensation being expended. Three was reference to the mortgage payments by the respondent and s90SF(3) factors and the wife Ms AG’s interest. It was alleged the applicant received a lump sum of $37,461in 2012 and received 70% of the pool of assets.
The respondent through his counsel, submitted that it was not just and equitable for any alternation of property interests. The respondent accepted that the de facto relationship ended in March 2009. The respondent submitted that the 2012 proposed settlement agreement, not accepted by the applicant, had been implemented and the applicant had received 70% of the net proceeds from the sale of the matrimonial home in O Street and had received in substance 70% of the net property pool. The respondent submitted that the applicant received the benefit of payment of her credit card debts and, upon issue raised by the Court, revised this submission to the applicant having the benefit of her credit card debts incurred after the de facto relationship ended being paid down in an amount in the order of $64,000.
The respondent submitted that the applicant must have received the $37,000 from the settlement of the proceeds of O Street because of the content of the settlement letter and that the respondent received a further $6,723 into her CBA account. The respondent submitted that the CBA account must have existed because it is referred to in the debtor’s petition.
The respondent maintained that the applicant received the benefit of her credit card debts incurred during the de facto relationship in the sum of $110,000 being paid out. The respondent accepted that the purported debt agreement prepared by the respondent and signed by the applicant in late 2007 was unenforceable. The respondent maintained that the applicant entered into the debtor’s petition of her own free will and that the respondent had told her to disclose the Country F properties and that this was why he did not sign the assistance section of the petition.
The respondent submitted that the bankruptcy was to the benefit of the applicant in removing pressing creditors and that it was her choice not to disclose the Country F properties and that this reflected adversely on her credit. The respondent contended that the applicant obtained the benefit of the payment of her credit cards from the mortgage for $75,000 on the Town C property and that the respondent was helping her by assisting in the debtor’s petition.
The respondent submitted that it was a material consideration in the context of whether it was just and equitable that there was a real and obvious prospect that the respondent, who is disabled and who has had his home adjusted for his disabilities, and his current wife would lose their home. The respondent submitted that this was not a just and equitable outcome taking into account the respondent’s current wife who has a notional interest in the matrimonial property having married the respondent in 2014 and submitted the application should be dismissed.
BALANCE SHEET
| Ownership | Description | Applicant Wife’s Value | Respondent Husband’s Value | Court’s Findings | |
| ASSETS | |||||
| R | B Street, Town C | $465,000 | $465,000 | $465,000 | |
| R | CBA#...80 | $8,700 | $8,700 | $8,700 | |
| R | ANZ #...74 | $19 | $19 | ||
| R | Motor Vehicle 1 | $4,000 | $4,000 | ||
| R | Motor Vehicle 2 | $ 3,000 | $3,000 | ||
| R | Motor Vehicle 3 | $500 | $500 | ||
| R | Land | $60,000 | Nil | $0 | |
| R | Furniture and personal effects | $60,000 | Nominal | $0 | |
| A | Properties in Country F | $75,000 | $75,000 | $75,000 | |
| A | Westpac Bank account | $11 | NK | $11 | |
| A | Motor Vehicle 4 | $400 | $400 | $400 | |
| SUB-TOTAL | $676,230 | $556,619 | $549,141 | ||
| ADDBACKS | |||||
| R | Insurance proceeds received for Motor Vehicle 5 - after early 2004 | $7,700 | $0 | ||
| R | Motor Vehicle 6 – sold mid-2023 | $6,000 | $0 | ||
| R | Funds received from CBA settlement claim in 2013 | $113,000 | $0 | ||
| R | Funds received from CBA settlement claim in 2019 | $125,000 | $0 | ||
| R | Funds received on sale of Queensland Unit in 2024 | $31,000 | $0 | ||
| A | Funds received sale of Town AO, City E, City E property | $102,800 | $110,000 | $0 | |
| A | Unpaid rent from B Street, Town C | Nil | $ 43,680 | $0 | |
| SUB-TOTAL | $ 385,500 | $ 153,680 | $0 | ||
| LIABILITIES | |||||
| R | Mortgage – B Street, Town C | $ 38,569 | $ 38,569 | $ 38,569 | |
| R | CBA Mastercard | $ 2,036 | $ 2,036 | $ 2,036 | |
| SUB-TOTAL | $ 40,605 | $40,605 | $40,605 | ||
| TOTAL NET ASSETS | $508,506 | ||||
The Court makes findings as to the assets and liabilities of the parties as identified in the third column of the Balance Sheet. Notwithstanding the above legal title the Court finds that the respondent’s current wife would now have a potential half interest in the Town C property that must be taken into account under s90SF(2)(r). The Court does not accept that the respondent’s wife’s alleged equitable interest prevails over that of the applicant in the seeking of orders in these proceedings. The Court does not accept that the respondent has any land worth $60,000 and finds that this land belonged to the applicant de facto wife. The Court does not accept that furniture and personal effects have any value. There was no superannuation of any real value as at the date of hearing. The respondent did have superannuation as at the end of the de facto relationship in March 2009 and had an outstanding claim for superannuation losses relating to AP Company from the Commonwealth Bank for which he received $112,000 in 2013 and $150,000 in late 2018 less a small amount to the entity assisting his recovery. This superannuation and his claims against the CBA would have been included in the net property pool at the end of the de facto relationship if there had been a determination by the Court at that time. Further, the mortgage on Town C to meet credit card debts incurred by the applicant, were a continuation in part of the debts not paid out upon the sale of O Street, which should be properly characterised as joint debts, incurred to meet living expenses and schooling of the children.
The Court rejects the alleged add backs as a matter of discretion. The Court is of the view that the matters raised in relation to the sale of City E and the CBA settlement payments should be taken into account under s90SM(2)(r). It is not reasonable or appropriate to treat any of those alleged add backs as amounts to be added back into the current assets and liabilities pool. The motor vehicle insurance proceeds, and the motor vehicle sale proceeds were ordinary transactions that did not unreasonably deplete the asset pool. The Queensland unit was purchased by the respondent and his new wife, has been since sold for a small profit, and was not in any way contributed to by the applicant and should not be added back into the property pool.
Whilst the Court accepts that the applicant does appear to have received rent from Town C, just as she did in relation to O Street, the Court does not accept that this should be treated as an add back or that it should be added back into the current net pool. The Court does accept that the benefit of rent from Town C tenants by the applicant, her enjoyment of that property without paying rent, other than for a short period, are matters to be taken into account under s90SF(2)(r).
The net property pool, as at the date of hearing, is $508,506.00
FINDINGS AND CONCLUSIONS
The Court has taken into account the law referred to above as to determining the existence and duration of the de facto relationship. The Court finds that there was a de facto relationship between the parties from 1989 until March 2009. There was a short period of separation in 2007 however the Court finds that the de facto resumed until March 2009. The evidence of the applicant supports the continuation of the de facto relationship under one roof until March 2009 and that Court accepts that evidence.
The first step the Court must now address is whether it is just and equitable to alter the property interests of the parties.
The applicant was, prior to her bankruptcy a joint owner of the Town C property and made direct financial contributions to its acquisition from the proceeds of O Street being the former de facto matrimonial home. The applicant contributed part of her inheritance to the renovations to that property and from her substantial homemaker, parent and family welfare contributions over the period of the de facto relationship of almost 20 years, she had a substantial interest in the proceeds of O Street. The Court finds that the applicant provided at an equal contribution to the purchase of the Town C property, albeit encumbered by a mortgage to meet the partial payment of her post de facto relationship credit card debts. The Court finds the applicant did not engage in excessive spending or waste and finds that the applicant used the credit cards to meet reasonable living expenses including schooling while the daughters were children.
Through the proceeds of sale of O Street, which paid out a Commonwealth Bank line of credit and the use by encumbrance of the de facto matrimonial home as security, in 2012 the applicant also financially contributed to the other properties of the respondent including the Country F properties in her name that the respondent had acquired using that line of credit.
The applicant placed herself into bankruptcy in 2014, the Court finds on the advice of the respondent to avoid being pursued for credit card debts that were incurred by her after the end of the de facto relationship. The Court finds that the applicant did so on the advice and with the assistance of the respondent. The Court does not accept that her will was overborne by the respondent, however her understanding of the debtor’s petition was limited and derived from the respondent to the effect that she would not be pursued by the credit card debtors and would be discharged from the bankruptcy after 3 years. The Court does not accept that the applicant understood the significance of omitting the Country F properties or that she was not in fact insolvent if those properties were included and the alleged indebtedness to the respondent were excluded. The applicant did not understand the want of foundation for the respondent’s alleged debt, the significance of the ticked box that it did not arise out of a relationship and being solvent she should not have petitioned for bankruptcy. The applicant did not fully understand the consequences for her interest in the Town C property, although she understood the bankruptcy would permit the respondent to acquire her half share. It is not clear that the applicant understood that meant she would forever lose her half share and from her conduct in remaining in occupation it appears that she continued to have an understanding that she would be able to continue to live in the Town C property.
The Court finds that the only person from whom the applicant obtained advice about the debtor’s petition was the respondent and accepts that the respondent told her to leave out the Country F properties. The Court does not accept the respondent’s evidence that he told her to include the same. The Court does not accept the respondent’s evidence that he refused to sign the assistance section because the respondent insisted on excluding the Country F properties. The Court does find that the respondent understood the significance of the exclusion of the Country F properties and that the applicant would probably not have been the subject of a sequestration of her bankrupt estate had those properties been included. Further the Court finds that the respondent knew that the inclusion of those properties may have revealed that the applicant was solvent, and that no bankruptcy would occur. The respondent included in the debtor’s petition a debt to himself that made him the major creditor with the intention the Court finds of acquiring the applicant’s half interest in Town C. That alleged debt arose from credit card debts incurred by the applicant during the de facto relationship. That alleged debt is not one that would have been recognised by a Family Court. That alleged debt had been purportedly paid out by the refinancing of the mortgage on O Street prior to its sale. That alleged debt in the Debtor’s Petition did not disclose that it arose during their de facto relationship which petition was filled out entirely by the respondent other that the applicant’s signature at the end.
The applicant’s identified herself as a trusting victim of the respondent in relation to the bankruptcy petition and given the respondent’s concession in his evidence that he knew she was not “sharp” the Court accepts that characterisation. Whilst the applicant was able to assert her own position as evidenced by her rejection of the 2009 proposed settlement that she believed to be unfair it is not apparent that the applicant fully understood the significance of the content in the Debtor’s petition, prepared by the respondent, which she signed.
The applicant did exercise of her free will to reject the settlement in 2012 because it did not include the respondent’s superannuation and that she did not think it was fair. The Court finds that the applicant did not understand the content of the debtor’s petition in relation to the exclusion of her Country F properties and did not deliberately exclude those properties from disclosure to the trustee in bankruptcy.
The Court finds that the applicant knew that the respondent may try and purchase her former interest from the trustee so that he might acquire the whole of the Town C property. The applicant knew that the alleged debt might assist the respondent in his acquisition of her interest in the Town C property. However, the applicant did not fully understand the Debtor’s petition and did not understand that she was solvent at the time of the petition because of the Country F properties and that the respondent’s alleged debt should not have been included in the petition. The above findings adverse to the respondent are also based on the adverse credit findings as to the conduct of the respondent identified below.
The Court accepts that the applicant has had a substantial period of occupation, apart from 3 months, effectively rent free in the Town C property. The respondent met the outgoings and continued to pay the mortgage debt incurred to buy out the trustee. The applicant made no financial contribution to the mortgage repayments on Town C or its outgoings. The Court finds that the Town C property was acquired as a low-cost home for the applicant de facto wife to live in, rent free for the rest of her life and with property to be passed on to their daughters at least by a will made by the respondent at that time. That Town C property is now the matrimonial home of the respondent and his current wife.
The applicant’s property assets in Country F were acquired due the direct financial contribution by the respondent in purchasing the same in the applicant’s name as well as by the applicant through her direct financial contribution to the O Street property through her inheritance in renovations and in the indirect financial contribution through the use of that matrimonial property to secure the respondent’s credit line and upon sale to pay out the same. This means that the Court finds that the applicant also made financial contributions which were almost equal to that of the respondent in the acquisition of the existing Country F properties in the net asset pool and made similar contribution to the property that she sold in 2015.
There was a proposed domestic relationship agreement of 2009 that was not agreed and in relation to which there was an email dated June 2009, said to apply if the parties separate on a final basis, and had 3 schedules as to assets, Schedule A the applicant, Schedule B the respondent and Schedule C Jointly held. The actual proposed agreement involved as payment out of the line of credit and a transfer of the O Street property to the applicant. At this time in 2009, according to an email dated June 2009, there were relationship assets of $1,422,833 and liabilities of $754,500 which included a credit card debt of $110,000, reflecting net relationship assets of $688,333. There was a proposed 70% split of the net proceeds of O Street of $310,500 amounting to $217,350. That proposed 2009 settlement did not proceed and the parties remained joint owners of the O Street property until sold at the end of 2012.
In the respondent’s affidavit there is the following alleged schedule of settlement distributions relating to the proposed settlement in the unexecuted 2012 proposed agreement with an alleged property pool split of 70% to the applicant and 30% to the respondent. This is also reflected in an email dated November 2012 from the respondent.
[Image omitted to comply with Part XIVB of the Family Law Act 1975 (Cth)]
In the email dated November 2012 the respondent agreed to split the AP Company recovery 50:50. The above schedule does not reflect in 2012 a net pool of 70% to the applicant and 30% to the respondent. The treatment of the $75,000 was unfair and double counted. Further the mortgage was to meet credit card debts that remained from 2012 and properly characterised were joint debts given that they were incurred for living expenses and schooling whilst the younger daughter did not turn 18 until 2014. The matrimonial pool of assets should have comprised in principle the net proceeds of O Street being $322,139, Town C $250,000, the Country F properties $157,000 and the respondent’s pension $144,000 totalling $843,139 less the $75,000 mortgage as a joint debt leaving an approximate net pool of $768,139. If a notional 70% of that pool for the applicant were applied, it reflects a figure of $537,697 and no such amount was received by the applicant. The applicant notionally was to receive the 3 Country F properties being $157,000 and a half interest in the net value of the Town C property being $175,000 which half interest amounts to $87,500, reflecting a total of $244,500. The respondent retained his pension of $144,000, received a half interest in the net value of the Town C property being $87,500, reflecting a total of $231,500. It is readily understandable why the applicant was not inclined to accept the misleading property pool split being advanced by the respondent in the proposed 2012 agreement. It is further the case the respondent pocketed the whole of the two settlement sums, first in 2013 and second in 2018 from the Commonwealth Bank arising out the superannuation advice by AP Company totalling approximately $238,000. That amount allegedly received by the applicant was not split 50:50.
Further, after the sale of O Street there is a Line of Credit Card Payout 2013 that purports to record a transfer to Ms Eden CBA account of $6,723. The Court is not persuaded on the whole of the evidence of the fact that the applicant received $6,723 into her controlled bank account either from the net proceeds of sale of O Street or at any time afterwards from the respondent. There is no account number given and the applicant denies receiving the same. The Court accepts that the applicant had in her name a CBA savings account ending …84 as disclosed in answer to question 23 on the debtor’s petition, being the same number described as “overdraft” in answer to question 40. However no other evidence has been adduced to support the alleged payment in fact being made to the applicant and the Court prefers her evidence that no such payment was received by her.
The letter to Mr and Mrs Eden from N Law Firm dated late 2012 confirms an alleged disbursement (70% of balance) of $37,461.91 to Ms Eden. The applicant denied receipt of that amount and the Court accepts the applicant’s evidence given that it was the respondent who clearly had access to and control of the CBA line of credit account, the CBA mortgage account and whether described as savings or overdraft the CBA account ending …84 as he put that detail into the debtor’s petition. Further the non-receipt of the $6723 and the $37,461.91 by the applicant is consistent with the settlement proposal of 2012 by the respondent. Further in Exhibit B at page 371 in the transcript of the respondent’s evidence the respondent confirmed that the 2009 and 2012 proposed property settlements were not performed and were not signed by the applicant. The Court finds that the alleged 2012 agreement was not performed by the respondent and did not give the applicant 70% of the then property pool.
The Court found the applicant in general to be a credible witness. The Court has also taken into account in making adverse credit findings against the respondent that the letter written by the respondent in the name of the applicant to the trustee in in 2007 was not honest and falsely represented that it was written by the applicant to his own advantage. The conduct of the respondent including the 2007 debt in the debtor’s petition and positively asserting it was not a joint debt was not honest and was to his own advantage. The conduct of the respondent in permitting his lawyers to represent that he had not received a second settlement sum from CBA at the end of 2018 was not honest and was to his own advantage. For these reasons the Court prefers the credit of the applicant as to the payments that she says she did not receive.
In the above circumstances where there continued to be a joint property held by both parties until the bankruptcy of the applicant, entered into on the advice of the respondent, and taking into account the above findings as to the net pool of assets, the Court is satisfied that it is just and equitable to alter the property interests of the parties and that the first discretionary hurdle is overcome by the applicant. The Court has taken into account in this regard the illness suffered recently by the respondent and his remarriage 10 years ago. However, the respondent did not take proper steps to finalise a binding property resolution and remained in a property venture with the applicant until assisting her to go into bankruptcy and now lives in the home at Town C that she was originally intended to live in at the time of its purchase. In all the above circumstances it would not be just or equitable to make no alteration of property interests between the parties.
Accordingly, the Court now turns to the four steps identified above in determining what alteration of property interests is just an equitable. In relation to the first step the Court has made findings identifying the property of the parties as identified in the above balance sheet as at the date of hearing and finds that there are no other relevant financial resources. The Court accepts the applicant’s evidence that she is not in a continuing relationship with Mr AX.
In relation to the second step the applicant has contributed to the net property of the parties both financially and by substantial non-financial contributions over the 20 year relationship. The Court has already identified above some of those contributions including the financial contributions of the parties to the O Street property the proceeds of which were used to acquire the Town C property. Whilst the Court accepts the respondent provided greater financial contributions to the acquisition and mortgage payments of O Street the applicant financially contributed to the renovations to that property and made significant and substantial contributions to the de facto relationship as a parent to the two children of the de facto relationship and as homemaker to the welfare of the family and financially to the IVF treatment to have two children. The applicant did the majority of the childcare and parenting, cleaning, cooking and looking after the welfare of the family. The applicant’s contributions were at least equal to those of the respondent to the matrimonial home at O Street up to March 2009. The applicant continued to make significant contributions in her role as a mother of the two daughters, the elder turning 18 in 2010 and the younger turning 18 in 2014. The Court accepts the applicant continued to reside in the O Street property with her daughters until its sale in 2012. The O Street property sale proceeds in 2012 were used to acquire the Town C property and was a direct financial contribution by the applicant. The applicant also financially contributed from the sale proceeds of O Street to paying out the respondent’s line of credit. The sale proceeds to CBA to which the applicant financially contributed discharging the mortgage and line of credit amounted to $716,222.
The Court accepts that there was accommodation rent received by the parties from the O Street property prior to the end of the de facto relationship and from March 2009 until sale in 2012 the applicant received some payments from international students and the respondent continued to meet the outgoings and mortgage on the O Street property. The applicant also contributed to the respondent’s tax position because he claimed in his tax return that he owed 100% of O Street.
The Court accepts that the respondent paid out a portion of credit card debits incurred by the applicant at the time of sale of the O Street property but finds that the applicant was still left with the existence of the same credit cards having an indebtedness that continued up until her bankruptcy in 2014. The Court finds that the credit card debts incurred by the applicant which were partially pay by the respondent from the sale proceeds of O Street should have been treated as joint debts given the there was still a child under 18 living with the applicant. The Court accepts the applicant’s evidence as to the credit card debts being incurred substantially to meet living expenses as well as costs of schooling. The Court finds the applicant has had limited means since moving out of Town C and has a diminished standard of living reflected by her need to use afterpay.
The Court does not accept that there was any legitimate debt in the sum of $110,000 as per the letter prepared by the respondent and signed by the applicant dated late 2007. The Court does not accept that those debts were other than joint de facto relationship liabilities. The Court also finds that the respondent refinanced those joint debts into the mortgage on the O Street property prior to its sale. The inclusion of the $110,000 by the respondent in the applicant’s debtor’s petition and false representation in the form completed by the respondent that it was not a joint debt contributed to the applicant being placed into bankruptcy.
The respondent financially contributed to the property in Country F that were placed into the name of the applicant. The Court accepts that the respondent provided the greater financial contribution to the acquisition of that property, although the applicant contributed financially by the indirect use of the matrimonial home at O Street and her inheritance to renovate the same, to fund the acquisition of the same, as well as indirect contributions as homemaker and primary parenting role. The Court also accepts that realising the property in Country F is a difficult process. The Court finds that the contributions to the Country F property were at least equal. The Court accepts that the respondent had a potential interest in the property in City E sold on in late 2015 for a net amount of $102,800.
The Court has taken into account that the de facto relationship ceased in March 2009. The respondent remarried in 2014. The Court accepts the respondent met the outgoings and mortgage on the O Street property up to its sale. It is also the case that the respondent has met the mortgage and other outgoing on the Town C property since its acquisition have been met by the respondent and that the applicant enjoyed occupation of the same from November 2013 until late 2019. The Court accepts the applicant maintained the property and paid for grass cutting on the Town C property during her occupation of the same. The respondent acquired the applicant’s interest through the bankruptcy and re-mortgaged the Town C property to do so. The respondent also received a dividend from the bankruptcy of the applicant in the amount of approximately $13,000. That dividend was clearly contributed to by the applicant as was the acquisition of her half interest by the steps she took to follow the respondent’s advice and place herself into bankruptcy and to not disclose the Country F properties. That conduct balances out the parties contributions to the Town C property as being effectively equal.
So, the two real property assets in the above net pool valued at $508,506 were contributed to by the parties equally and allowing for the mortgage debt, properly characterised as a joint debt, reflects a net pool for alteration of approximately $500,000. The applicant’s contribution based entitlement is a 50% interest accordingly would accordingly reflect an amount of approximately $250,000. Given that the applicant already owns the Country F properties having a value of $75,000 this means the applicant would on a contributions basis need to receive a payment of $175,000 from the respondent to reflect a 50% property split as the contributions based entitlement.
The Court turns to the third steps and in that regard under s90SF(3)(a) the applicant, now 63, is not working, albeit she provides some charitable work, has health problems and receives the age pension. The applicant has a medical condition and requires some specialist treatment. The applicant lives with her sister and her sister’s 15 year old son paying $200 per week for rent and shares a bedroom with her sister. The applicant has limited education and although she did some work at a care facility is now unlikely to be able work.
The respondent, now 77, is no longer able to work and receives the age pension. The respondent only moved into the Town C property with his current wife Ms AG in early 2024 after suffering a medical episode in 2023. The Court accepts that the respondent has significant and ongoing health issues with limited mobility and has had alterations to assist him in the Town C property. The respondent’s current wife has had to become his career, receiving a carer’s pension, and he takes in lodgers who pay about $150 per week. The respondent requires treatment twice a week and has specialist monitoring and would lose his support structures if required to find alternative accommodation.
In relation to s90SF(3)(b) neither party is now able to engage in gainful employment and the property of the parties and pensions are identified above. The physical capacity of the respondent has been materially impaired following his illness in 2023.
In relation to s90SF(3)(c) neither party now has the care of either of the two now adult children from the de facto relationship.
In relation to s90SF(3)(d) and (e) the commitments necessary to meet the respondent’s health needs are obviously substantial and this includes the medical support at his now location in Town C, the home modifications and his commitment to support his current wife of 10 years. That duty of the respondent to his current wife is a substantial obligation after such a significant period of marriage. The applicant’s means to sustain herself are limited and she is coping with the assistance of tight accommodation with her sister.
In relation to s90SF(3)(f) the parties are in receipt of the age pension and have not further financial resources beyond the assets identified in the balance sheet.
In relation to s90SF(3)(g) the standard of living of the applicant is stressed and the Court has taken into account that her standard of living at the moment is not in all the circumstances reasonable. The standard of living for the respondent is currently reasonable and a significant asset division would be likely to cause the loss of his current home and place him in difficult circumstances.
In relation to s90SF(3)(h), (j) and (k) the Court is not considering payment of maintenance of a party. However, it is the case that the applicant contributed positively and in a material way to the earning capacity of the respondent during the period of the de facto relationship of 20 years as a homemaker and his acquisition of properties through the use of the matrimonial home as security for the respondent’s line of credit.
In relation to s90SF(3)(i) there is relevant effect on a creditor from the proposed orders and the mortgagee on the Town C property will be repaid if the home has to be sold.
In relation to s90SF(3)(l) has no application as the two daughters are now adults.
In relation to s90SF(3)(m) the Court has taken into account as a very significant factor that the respondent has been living with his current wife for the last 10 years and that she has given up her job to care for him since his medical episode. The Court has taken into account he age pension being received by the parties and the carer’s pension by the respondent’s current wife, the living circumstances of the applicant with her sister and 15 year old son and the applicant paying $200 per week for rent.
In relation to s90SF(3)(n) the Court has taken into account the effect of the proposed orders upon the property of the parties and that the applicant is no longer a bankrupt. The Court has also taken into account that the applicant should not have in fact been made bankrupt and in these circumstances is satisfied that if challenged the bankruptcy would, if necessary, most likely be annulled and the Country F properties would remain vested in the applicant. The Court has also taken into account that the trustee declined to participate in the proceedings as advanced by the applicant.
In relation to s90SF(3)(o) and (p) the Court has taken into account the impact of the declarations and orders upon the parties and the respondent’s current wife as well as finding that the Country F properties would remain vested in the applicant.
In relation to s90SF(3)(q), (s) and (t) there is not child support issue raised before the Court, there is not binding Part VIIAB agreement and no binding financial agreement. The Court accepts the respondent paid child support between 2008 and 2014.
In relation to s90SF(3)(r) the Court takes into account the CBA settlement payments received by the respondent, the City E proceeds received by the applicant and that the respondent’s now wife of 10 years has a potential half interest in the Town C property. The Court has also taken into account the sale of the property in Queensland by the respondent with his current wife. The Court has taken into account the occupation of the Town C property by the applicant from late 2013 until November 2019, substantially rent free, and that she derived some rent from Town C tenants over that period. The Court has taken into account that the applicant derived some rent whilst in the O Street property prior to its sale. The Court has taken into account the properties bought and sold by the respondent using the line of credit between 2008 and 2012 on pages 13 and 14 of Exhibit E.
In relation to s90SM(4) the proposed orders do not affect the earning capacity of either party as both are retired and the Court finds neither have any earning capacity to be taken into account. The charitable work by the applicant does not reflect a real earning capacity. There is no other order made to be taken into account affecting a party to the de facto relationship or a child of the de facto relationship and as identified above, the respondent has provided and paid child support from 2008 until 2014 and the two daughters are now adults.
Taking into account all the above relevant factors the Court that there should be a substantial adjustment of approximately 20% of the net pool being $100,000 in favour of the respondent in relation to the contribution based entitlements. Given the applicant’s contribution based entitlement of 50% being $250,0000 there must be allowance for the Country F properties that remain held by the applicant with a value of $75,000. This reflects a potential payment of $175,000 to which the Court has found an adjustment of 20%being $100,000 must be made which leave an amount of $75,000 to be paid by the respondent to the applicant. This adjustment is in all the circumstances just and equitable. This substantial adjustment has given significant weight to the now acquired interest of the respondent’s current wife after 10 years of marriage, that it is now their matrimonial home which has had necessary alterations made for the respondent’s needs and has placed significant weight on the sad plight of the respondent following his recent illness and his significant special needs. The Court has also taken into account the applicant’s delay in commencing these proceedings, until almost 3 years after the respondent remarried. The Court acknowledges the most unfortunate further protraction in final determination of these proceedings, which was not within the control of the parties.
The Court turns to the fourth step. The orders made should still permit the applicant to remain in his home at Town C and given the Country F property retained by the applicant and what was said to the Court by her solicitor as the limited costs to be imposed, the applicant should have significantly improved and reasonable living standards. The Court finds that there is a reasonably realistic prospect of the respondent being able to be able to finance the $75,000 to be paid to the applicant without losing his now home. The Court also finds that it would not be just and equitable to order a greater alternation of property in favour of the applicant. Further a greater interest would be more likely to force the sale of the Town C property and cause considerable disruptions and difficulties in meeting the respondent’s needs as a result of his illness and adversely impact on his now wife of 10 years. The Court finds that it would not be just and equitable to order any lesser sum to be paid to the applicant, even if there be a real risk of sale of the Town C property. The Court finds that it would not be just and equitable to dismiss the application.
In all these circumstances the Court finds that it is just and equitable under s90SM(3) to make the final orders pronounced on 4 September 2024.
The Court notes that it took into account the overarching purpose in s95 in deciding to pronounce orders and reserve its written reasons and that this course was also support by the applicant, as well as taking into account the most unfortunate procedural history given the proceedings were commenced in 2017.
The Court also indicated that there would be difficulties, because of the financial circumstance of the parties, in any application as to costs under s117, and with the consent of the parties, made orders on 4 September 2024, to permit any such application for costs to be determined on the papers without any further oral hearing.
I certify that the preceding one hundred and ninety-seven (197) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street. Associate:
Dated: 18 September 2024
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