Elliott and Elliott and Ors - [2007] FamCA 1232

FAMILY COURT OF AUSTRALIA

ELLIOTT & ELLIOTT AND ORS

[2007] FamCA 1232

FAMILY LAW – PROPERTY – Short marriage – Pool - Asset by asset approach where no contribution by one party to certain assets – Contribution – Assessment of non financial contribution – Special skill contribution claimed by husband – Special skill claim rejected – Just and equitable result – Superannuation asset parcel of land – Other parties with interest in superannuation asset – Approach to superannuation asset having regard to interest of other parties – Just and equitable result as between husband and wife

Family Law Act 1975 (Cth) s 79, s 75(2)

Coghlan and Coghlan (2005) FLC 93,220 at [53], [65]
Farmer and Bramley (2000) FLC 93-060 at [68], [69]

Figgins and Figgins (2002) FLC 93-122 at [134]
JEL and DDF (2001) FLC 93-075 at [152]
Kessey and Kessey (1994) FLC 92-495 at 89,151
Kowaliw and Kowaliw (1981) FLC 91- 092 at 76,644
Omacini v Omacini (2005) FLC 93-218 at [30], [31]
Pierce and Pierce (1999) FLC 92-844 at [28]
Townsend and Townsend (1995) FLC 92-569 at 81,654
Zyk and Zyk (1995) FLC 92-644 at 82,509-10

APPLICANT:

Mrs Elliott

FIRST RESPONDENT:	Mr Elliott
SECOND RESPONDENT:	Y Elliott
THIRD RESPONDENT:	Mr Ascoti

FILE NUMBER:

BRF

747

2005

DATE DELIVERED:

3 August 2007

PLACE DELIVERED:

Brisbane

JUDGMENT OF:

O'Reilly J

HEARING DATE:

23, 24 and 26 April and 3, 4 and 10 May 2007

REPRESENTATION

THE APPLICANT:

In person

COUNSEL FOR THE FIRST RESPONDENT:

Mr Galloway of Counsel

SOLICITOR FOR THE FIRST RESPONDENT:	Mr Foster, Hemming & Hart
COUNSEL FOR THE SECOND RESPONDENT:	Mr Galloway of Counsel
SOLICITOR FOR THE SECOND RESPONDENT:	Mr Foster, Hemming & Hart
COUNSEL FOR THE THIRD RESPONDENT:	Mr Galloway of Counsel
SOLICITOR FOR THE THIRD RESPONDENT:	Mr Foster, Hemming & Hart

Orders

Pursuant to section 79 of the Family Law Act 1975 (Cth) the net property and assets of the parties or either of them be divided as follows to effect a division of 75% to the wife and 25% to the husband as follows:

The seven invoices of J & Associates, valuers, exhibits 25 and 33, amounting to $4,180 be paid from the proceeds of sale of the former matrimonial home presently held in the trust accounts of Hemming & Hart and Client Care Services, within seven days.
The wife have:
(a)the balance proceeds of sale of the former matrimonial home at C3, presently held in the trust accounts of Hemming & Hart and Client Care Services, with accretions (estimated $172,190 being estimated $176,370 less $4,180) to be paid to her within seven days;
(b)her Subaru Liberty motor vehicle, valued at $6,200;
(c)the furniture and chattels in her possession, valued at $22,760;
(d)her jewellery, valued at $8,479;
(e)the add back value of the premature distribution to her, $16,470;
(f)the further add back premature distribution to her, $160,000.
The husband have:
(a)his fishing shack and leased land on S Island, valued at $15,500;
(b)the furniture and chattels in his possession, valued at…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] FamCA 1232
Decision Date: 3 August 2007

CaseChat Overview and Summary

This matter came before O'Reilly J concerning the division of property between the wife and the husband. The dispute involved the distribution of various assets, including the former matrimonial home, other properties, vehicles, chattels, and superannuation interests, as well as the treatment of certain alleged post-separation deposits and borrowings.

The court was required to determine the appropriate division of the parties' net property and assets, specifically aiming for a 75% to 25% split in favour of the wife. This involved assessing the validity of alleged post-separation deposits by the wife, determining the nature of certain funds received by the wife, and ordering the sale and distribution of various properties, including a fishing shack, two residential properties, and land held within a superannuation fund. The court also needed to address the calculation and distribution of capital gains tax liabilities and the division of a superannuation fund interest.

O'Reilly J applied section 79 of the *Family Law Act 1975* (Cth) to effect the property division. The court found that the husband's allegation of $484,000 in post-separation deposits by the wife was unsubstantiated and abandoned by his counsel during the proceedings, noting the waste of court resources and legal expense caused by such unfounded claims. The court accepted the wife's evidence that the majority of the $79,774.39 in question represented borrowed funds for her living and legal expenses, not undisclosed assets. The judgment then detailed specific orders for the payment of debts, the distribution of proceeds from the sale of the former matrimonial home, the allocation of various assets to each party, and a detailed process for the sale of two other properties, including provisions for capital gains tax. Further orders addressed the division of a superannuation fund, including mechanisms for its valuation and distribution, and the removal of a caveat lodged by the wife. The court also included provisions for the Registrar to sign documents if a party refused to do so and scheduled further mentions for monitoring progress and addressing any necessary adjustments or enforcement.

Orders

Orders of the court

Pursuant to section 79 of the Family Law Act 1975 (Cth) the net property and assets of the parties or either of them be divided as follows to effect a division of 75% to the wife and 25% to the husband as follows:

The seven invoices of J & Associates, valuers, exhibits 25 and 33, amounting to $4,180 be paid from the proceeds of sale of the former matrimonial home presently held in the trust accounts of Hemming & Hart and Client Care Services, within seven days.

The wife have:

(a) the balance proceeds of sale of the former matrimonial home at C3, presently held in the trust accounts of Hemming & Hart and Client Care Services, with accretions (estimated $172,190 being estimated $176,370 less $4,180) to be paid to her within seven days;

(b) her Subaru Liberty motor vehicle, valued at $6,200;

(d) her jewellery, valued at $8,479;

(e) the add back value of the premature distribution to her, $16,470;

(f) the further add back premature distribution to her, $160,000.

The husband have:

(a) his fishing shack and leased land on S Island, valued at $15,500;

(b) the furniture and chattels in his possession, valued at $3,075;

The parties:

(a) list the properties at C1 and C2 (the two C properties) for sale with a real estate agent operating in C for a 60 day listing period;

(b) if they are unable to agree on the appointment of the agent for sale accept the nomination of an agent by the President of the Real Estate Institute of Queensland (the agent);

(c) if the properties or either of them not be sold within the 60 day listing period appoint the agent to sell the property/properties by public auction, the advertising, reserve price, auction date and conditions to be as determined by the agent;

(d) may each bid at any such auction.

The proceeds of sale of the two C properties, net of the costs of sale, including auction costs (if any) and the agent’s fees, outlays and commission are to be paid by the agent into the husband’s solicitor’s trust account to be applied in the following manner and priority:

(a) $40,000 to be retained in the husband’s solicitor’s trust account pending the assessment and payment of capital gains tax in relation to the two C properties and the properties at B1 and B2 (the four properties), and if there be a sale of one of the C properties preceding the sale of the other, the $40,000 be retained from the first such sale;

(b) the balance proceeds of sale of the C properties (that is, after the amount in (a) is retained) be paid to the wife;

(c) after payment by the husband’s solicitors of the capital gains tax in relation to the four properties, the balance of the $40,000 (if any) be paid 75% to the wife and 25% to the husband.

The husband, as soon as possible, lodge a tax return in relation to the capital gains realised upon the sale of the properties at B1 and B2.

The husband and the wife, as soon as possible, after the sale of the two C properties, lodge tax returns in relation to the capital gains realised upon the sale of those two properties.

The husband is to have the redeemable value of the parties’ unused airline ticket, and the ticket issuer is authorised by this order to pay the redeemed value to the husband, that value to be not included in the calculation of the husband’s 25% entitlement.

Within 14 days after the wife has received the balance proceeds of sale referred to in paragraph 5(b), the parties are to:

(a) calculate the percentage interest the wife should have in the E Superannuation Fund (the Fund), of the husband’s and the wife’s aggregate 91.34% interest in the Fund, to effect the result of the wife having 75% of the net property and assets of the parties, using the values in the Schedule set out at paragraph 11 of the Reasons for Judgment but with item 1 adjusted to include accretions less $4,180 and items 2 and 3 adjusted to actual net proceeds after sale, and adjust the wife’s percentage interest in the Fund accordingly (the wife’s percentage Fund interest);

(b) adjust the husband’s interest in the Fund accordingly to that percentage which is 91.34% less the wife’s percentage Fund interest (the husband’s percentage Fund interest);

(c) calculate the cash value of the wife’s percentage Fund interest using the rate of $4,700 for each 1% (the cash value of the wife’s percentage Fund interest).

10.

Unless, on or by 30 November 2007, the husband and the second and third respondents as trustees can arrange for either themselves or another investor to pay to the wife by bank cheque on or by that date the cash value of the wife’s percentage Fund interest, in exchange for the transfer of the wife’s percentage Fund interest, which the husband and the second and third respondents must use their best endeavours to do:

(a) the wife, the husband and the second and third respondents appoint a trustee to sell the land owned by the Fund at G (the Fund’s land);

(b) if by 7 December 2007 they are unable to agree in writing on the appointment of a trustee, they list the matter before me for the appointment of a trustee by the Court, and for directions to be given to the trustee.

11.

If sale by a trustee should become necessary pursuant to paragraph 10, the proceeds of sale of the Fund’s land, net of the costs of sale, including agent’s fees, outlays and commission, auction costs (if any) and the trustee’s fees and outlays be paid by the trustee in the following proportions to the wife, the husband and the second and third respondents:

(a) the wife: the wife’s percentage Fund interest

(b) the second respondent: 5%

(d) the husband: the husband’s percentage Fund interest.

12.

The caveat lodged by the wife over the Fund’s land (noted in the Department of Natural Resources and Water extract, exhibit 31) not be removed other than:

(a) by the wife tendering a signed release in exchange for the payment to her by bank cheque of the cash value of the wife’s percentage Fund interest, as contemplated by paragraph 10; or

(b) by the wife tendering a signed release to the trustee for the purpose of any sale, if sale by the trustee becomes necessary pursuant to paragraph 10.

13.

Upon the payment to the wife of the wife’s percentage Fund interest (whether by purchase by the husband, the second and third respondents or another investor, or upon sale of the Fund’s land):

(a) the parties (including the second and third respondents) do all things necessary to remove the wife as a trustee and member of the Fund; and

(b) the husband indemnify the wife in relation to all liabilities of the Fund.

14.

Otherwise, the parties are to retain all assets, liabilities and financial resources in their respective name or possession.

15.

Unless otherwise specified in this order:

(a) each party is solely entitled to the exclusion of the other to all property (including choses in action) in the possession of that party as at the date of this order;

(b) each party is solely entitled to the credit of any moneys in any bank accounts in his or her name;

(c) each party is to forego any claim he or she may have to any superannuation benefits belonging to or earned by the other;

(d) each party is to be solely liable for and to indemnify the other against any liabilities encumbering any item of property to which that party is entitled pursuant to this order.

17.

Should either party refuse or neglect to sign any documents which may be required to give effect to this order then a Registrar of the Family Court of Australia at Brisbane is authorised to sign all documents and do all things necessary to give effect to this order.

18.

The parties have liberty to apply, on short notice, by arrangement with the Associate:

(a) under the slip rule;

(b) if I should have made any calculation errors in the Reasons for Judgment or this order;

(d) if any further machinery or other orders may be necessary to carry out this order or to give effect to the decision; or

(e) if clarification of any part of the decision or order should be required.

19.

In any event, the matter be listed for mention, before me, for monitoring of the progress of carrying this order into effect, and for any further machinery orders which may be necessary to carry this order into effect, at 9.30am on 20 September 2007 and 31 October 2007 and such other dates as subsequently may be required.

20.

Any necessary default or enforcement proceedings be listed before me, by arrangement with the Associate.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Mr Galloway conceded immediately, without argument, that indeed there was no evidence to suggest deposits of $484,000. I do not suggest for a minute that Mr Galloway had sought to present any improper case. Indeed, Mr Galloway said that he had noticed the same flaw in the husband’s case during the break in the trial between 26 April 2007 and 3 May 2007, and at the first appropriate interval had proposed to convey that this part of the husband’s case was abandoned. I accept this explanation entirely. However, it is disturbing that the husband required or allowed his solicitors to mount such an unfounded case, alleging deposits by the wife post separation of $484,000, with no evidence to support that allegation. The Court’s busy schedule and resources are strained to deal with genuinely raised issues. The Court cannot condone the raising of false allegations, causing unnecessary increase in the lengths of trials and the consequent waste of a judge’s time let alone unnecessary legal expense to the opposite adversarial party. As to the $79,774.39, the wife answered the husband’s case by her evidence, which I accept, that all of the amounts, with the exception of the first amount $5,203.32 sourced from a Term Deposit Account, which is identified on its face as such, represented moneys borrowed by her post separation from two sources, first, a friend, and secondly from persons on her behalf by her son to provide for her post separation living and other costs and expenses, including legal fees, because despite having had considerable cash resources before meeting the husband (which will be referred to below) after the marriage and separation she found she had no cash to provide for these expenses and thus had to resort to the borrowing of funds. Indeed, a cursory glance at the wife’s Suncorp Investor Account annexure CJE1 to the husband’s affidavit filed on 20 December 2006 shows that as at the date of the final separation, 12 August 2004, the wife had a balance of $363.37 which, after the deposit on 17 August 2004 of three amounts transferred from the parties’ joint funds (totalling $7,500.59), the $80,000 referred to being her portion of the proceeds of sale of the property at B1 (not to be confused with the $80,000 released in December 2006 from the proceeds of sale of the former matrimonial home) and the redeemed amount for the cancelled trip to Russia, $8,470.06, the wife then had $91,380.70, with no further substantial deposits (apart from interest and minor amounts) other than the $1,722.09 already referred to, deposited on 18 November 2004 and the $5,203.32 deposited on 1 August 2005 (being a transfer from a Term Deposit Account on 1 August 2005), until 30 September 2005, when her account was depleted to $229.09. Then, leaving aside the $5,203.32 referred to, the deposits set out in the husband’s schedule, par 1.10, above, commencing on 30 September 2005 are shown as deposits on or about the dates in the husband’s schedule (including the $1,000 deposited on 31 July 2006 representing the proceeds of sale by the wife of a gold chain).

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

On 3 May 2007, I pointed out to Mr Galloway that, on my calculations by reference to the bank statements in relation to the wife’s Suncorp Investor Account annexure CJE1 to the husband’s affidavit filed on 20 December 2006 (statements 3 September 2002 to 2 February 2006) and ex 7 (statements 3 February 2006 to 2 January 2007) the total deposits post separation (12 August 2004 to 2 January 2007) totalled $214,251.81 and challenged Mr Galloway to identify deposits, as alleged, totalling $484,000. Mr Galloway conceded immediately, without argument, that indeed there was no evidence to suggest deposits of $484,000. I do not suggest for a minute that Mr Galloway had sought to present any improper case. Indeed, Mr Galloway said that he had noticed the same flaw in the husband’s case during the break in the trial between 26 April 2007 and 3 May 2007, and at the first appropriate interval had proposed to convey that this part of the husband’s case was abandoned. I accept this explanation entirely. However, it is disturbing that the husband required or allowed his solicitors to mount such an unfounded case, alleging deposits by the wife post separation of $484,000, with no evidence to support that allegation. The Court’s busy schedule and resources are strained to deal with genuinely raised issues. The Court cannot condone the raising of false allegations, causing unnecessary increase in the lengths of trials and the consequent waste of a judge’s time let alone unnecessary legal expense to the opposite adversarial party. As to the $79,774.39, the wife answered the husband’s case by her evidence, which I accept, that all of the amounts, with the exception of the first amount $5,203.32 sourced from a Term Deposit Account, which is identified on its face as such, represented moneys borrowed by her post separation from two sources, first, a friend, and secondly from persons on her behalf by her son to provide for her post separation living and other costs and expenses, including legal fees, because despite having had considerable cash resources before meeting the husband (which will be referred to below) after the marriage and separation she found she had no cash to provide for these expenses and thus had to resort to the borrowing of funds. Indeed, a cursory glance at the wife’s Suncorp Investor Account annexure CJE1 to the husband’s affidavit filed on 20 December 2006 shows that as at the date of the final separation, 12 August 2004, the wife had a balance of $363.37 which, after the deposit on 17 August 2004 of three amounts transferred from the parties’ joint funds (totalling $7,500.59), the $80,000 referred to being her portion of the proceeds of sale of the property at B1 (not to be confused with the $80,000 released in December 2006 from the proceeds of sale of the former matrimonial home) and the redeemed amount for the cancelled trip to Russia, $8,470.06, the wife then had $91,380.70, with no further substantial deposits (apart from interest and minor amounts) other than the $1,722.09 already referred to, deposited on 18 November 2004 and the $5,203.32 deposited on 1 August 2005 (being a transfer from a Term Deposit Account on 1 August 2005), until 30 September 2005, when her account was depleted to $229.09. Then, leaving aside the $5,203.32 referred to, the deposits set out in the husband’s schedule, par 1.10, above, commencing on 30 September 2005 are shown as deposits on or about the dates in the husband’s schedule (including the $1,000 deposited on 31 July 2006 representing the proceeds of sale by the wife of a gold chain).