Fellowes and Fellowes and Ors
[2019] FCCA 680
•21 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FELLOWES & FELLOWES & ORS | [2019] FCCA 680 |
| Catchwords: FAMILY LAW – Property – long marriage – assessment of contributions – two children of the marriage – no adjustment in respect of s.75(2) matters – justice and equity – orders made. |
| Legislation: Family Law Act 1975 (Cth), s.75(2) |
| Applicant: | MS FELLOWES |
| First Respondent: | MR FELLOWES |
| Second Respondent: | MS BURGESS |
| Third Respondent: | MR A FELLOWES |
| File Number: | MLC 6519 of 2017 |
| Judgment of: | Judge Hartnett |
| Hearing dates: | 8, 9 November 2018 30, 31 January 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 21 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr MacFarlane |
| Solicitors for the Applicant: | Nanscawen Lawyers |
| Counsel for the First Respondent: | Mr Mort |
| Solicitors for the First Respondent: | Berger Kordos Lawyers | |
| The Second Respondent: | No Appearance | |
| The Third Respondent: | In Person | |
ORDERS
Within 30 days of this day (‘the due date’) the First Respondent pay to the Applicant the sum of $671,580.00 (‘the payment’).
In the event that the whole of the payment has not been made by the First Respondent by the due date then the real property known as and situate at Property B in the State of Victoria (‘the property’) be forthwith sold altogether out of Court (‘the sale’). The Applicant have control of the sale save for the reserve price which shall be as agreed between the parties and failing written agreement within 45 days of this date, as determined by the President of the Real Estate Institute of Victoria or his nominee. Upon completion of the sale, the proceeds of the sale be applied:-
(a)first to pay all costs, commissions and expenses of the sale;
(b)secondly to pay the balance then remaining in the proportion of:-
(i)58 per centum thereof to the First Respondent; and
(ii)42 per centum thereof to the Applicant.
Pending the payment or completion of the sale:-
(a)the First Respondent shall have the sole right to occupy the property and that during such right of occupation the First Respondent pay all rates, taxes, insurances and outgoings of the property as they fall due;
(b)the Applicant and First Respondent hold their respective interests in the property upon trust pursuant to these orders; and
(c)neither the Applicant nor the First respondent encumber the property without the consent in writing of the other.
The First Respondent be solely liable for any and all outstanding rates, land tax and other outgoings with respect to the property, past, present and future.
In the event of order 2 becoming operative, such monies as may be required to be paid in respect of outstanding rates and land tax shall be paid solely by the First Respondent out of his 58 per centum distribution.
The Applicant shall retain for her sole and exclusive use, enjoyment and benefit the following chattels:-
(a)the baby photos;
(b)one leather couch;
(c)her queen size bed;
(d)one 46” inch TV; and
(e)the washing machine or fridge, being at her election.
The chattels are to be collected by the Applicant within fourteen days of this date on a date and at a time advised by the Applicant to the First Respondent. The First Respondent shall not be in attendance and one or both of the parties’ daughters may be present, together with any necessary removalist as organised by the Applicant.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:-
(a)each of the Applicant and First Respondent be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels) in the property being deemed to be in the possession of the First Respondent save for the chattels listed in order 6 herein;
(b)insurance policies remain the sole property of the owner named therein;
(c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
There is liberty to the Applicant and First Respondent to make application seeking orders (by way of machinery provisions) to further enable the sale of the property.
Otherwise all extant applications are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Fellowes & Fellowes is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 6519 of 2017
| MS FELLOWES |
Applicant
And
| MR FELLOWES |
First Respondent
| MS BURGESS |
Second Respondent
| MR A FELLOWES |
Third Respondent
REASONS FOR JUDGMENT
These proceedings commenced by the Applicant wife (‘the Applicant’) filing an initiating application on 30 June 2017. In that application the Applicant sought property orders in general terms. They were as follows:-
“1. That the assets of the parties, be divided in the proportions 50% to the Wife and 50% to the Husband.
2. That the Superannuation of the parties be split evenly between them.
3. Such other orders as this Honourable Court thinks fit.”
On 17 August 2017, the First Respondent husband (‘the Respondent’) filed a response. He sought final property orders as follows:-
“1. That the Husband retain his interest in the property situate at Property B ("The Property B property").
2. That the Wife retains the following:
(a) All monies received from the estate of her late father;
(b) Her Motor Vehicle C; and
(c) All jewellery and personal affects taken by the Wife from the Property B property, save for and except the jewellery that belonged to the Husband's late father and mother which is to be returned to the Husband within 7 days of the Orders.
3. That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a) Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date, with certain furniture, personal possessions, and like chattels in the former matrimonial home to be considered to be in the possession of the Husband, and the Wife to prepare a list of such chattels to be collected by the Husband within 7 days of the date of these Orders.;
(b) Monies standing to the credit of the parties in any joint bank account are to become the property of the parties equally and the parties each do all acts and things and sign documents to close any joint account/s;
(c) That any policy of life insurance or assurance remain in the sole property of the owner named therein;
(d) Each party to be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(e) Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
4. The Applicant pay the Respondent's costs of and incidental to this Application.”
In the Applicant’s Outline of Case document filed the 7 November 2018, the Applicant further particularised the orders sought by her, in the following terms:-
“1. That the property situated at and known as Property B (“the Property B property”) be sold forthwith altogether out of Court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:
1.1 first to pay all costs, commissions and expenses of the sale;
1.1 [sic] secondly to discharge any mortgage and any other encumbrance affecting the Property B property;
1 .3 thirdly, the balance to be divided equally between the Applicant and the Respondent
2. That pending the payment or completion of the sale:
2.1 the Respondent shall have the sole right to occupy the Property B property and that during such right of occupation the Applicant [sic] pay all instalments pursuant to the mortgages and loans and all rates, taxes insurances and like apportion able outgoings of the Property B property as they fall due;
2.2 the parties hold their respective interests in the Property B property upon trust pursuant to these orders; and
2.3 Neither party encumber the Property B property without the consent in writing of the other parties
3. That each party be solely liable for and indemnify the other party against any liability encumbering any item of property to which that party is entitled.
4. That there be an equal distribution of the contents of the former matrimonial including furniture, beds, white goods, televisions, crockery, cutlery, glassware, ornaments and all other household goods
5. That each party be solely entitled to the exclusion of the other to all property in the possession of such party as at this date including any jewellery, furniture, furnishings, shares, bank accounts and motor vehicles.”
Evidence material
The Applicant relied upon the following evidence:-
a)an affidavit affirmed by her on 30 October 2018 and a statement of financial circumstances affirmed by her on 21 June 2017;
b)an affidavit affirmed by Ms D (a daughter of the Applicant and Respondent), on 30 October 2018; and
c)an affidavit affirmed by Ms E (a daughter of the Applicant and Respondent), on 29 October 2018.
The Applicant was cross-examined by the Respondent in the proceedings. Both daughters were cross-examined by the Respondent. The Third Respondent cross-examined Ms D.
The Respondent relied upon the following evidence:-
a)affidavits sworn by him on 17 August 2017 and 5 November 2018 together with a statement of financial circumstances sworn by him on 17 August 2017.
The Respondent was cross-examined by the Applicant in the proceedings.
The Third Respondent, Mr A Fellowes, relied upon the following evidence:-
a)affidavit sworn by Mr A Fellowes on 1 November 218; and
b)affidavit sworn by Mr F, builder, on 13 December 2018.
The Third Respondent was cross-examined by the Applicant in the proceedings. Mr F was cross-examined by the Applicant and by the Respondent in the proceedings.
Previous Order
By Court order of 20 June 2018, the Respondent’s two siblings, Ms Burgess and Mr A Fellowes, were joined as parties to the proceedings. The Second Respondent, Ms Burgess, failed to participate in the proceedings in any way and sought no orders from the Court. Both siblings were joined to the proceedings as the Respondent claimed each had an interest in the real property situate at Property B in the State of Victoria. Ms Burgess made no such assertion, nor claim, and the Respondent, in the running of the matter accepted that only the Third Respondent has any claimed interest in the real property.
Asset Pool
The Court has determined the asset pool is comprised as follows:-
Assets
Ownership
Value
1. Property B
(2/3 interest)
Respondent
Agreed value of the whole of the property $1,550,000
($1,033,333)
2. Inheritance received by the Applicant of $181,000
Remaining (Applicant’s Commonwealth Bank of Australia savings account at trial)
Applicant
$3,000
3. Husband’s motor vehicle (agreed)
Respondent
$11,000
4. Wife’s motor vehicle (agreed)
(paid with part of the Applicant’s inheritance)
Applicant
$35,000
5. Chattels retained by husband and wife
Applicant and Respondent
Not Known
6. Jewellery retained by husband and wife
Applicant and Respondent
Not Known
Total Assets (when comprised of total value of Property B)
$1,599,000
Liabilities
Ownership
1. Council Rates
Respondent
$6,156.30
2. Land Tax liabilities
Respondent
$15,227.75
Total Liabilities
$21,384.05
NET TOTAL (Total Assets less Total Liabilities)
$1,577,615.95
Background
Statements of fact in these reasons are findings of fact on the balance of probabilities.
The Respondent was born on … 1948. He is now aged 70 years. His health is poor. He underwent triple bypass surgery on … 2018. He is retired and is in receipt of Centrelink benefits in the form of the aged pension in the sum of approximately $440 each week. He remains in occupation of the unencumbered real property situate at and known as Property B in the State of Victoria (‘the former matrimonial home’).
The Applicant was born on … 1960. She is now aged 59 years. Her health is good though she claims to have suffered from “depression and anxiety”. No medical evidence is before the Court to support that claimed diagnosis. However, the wife is periodically in receipt of a Centrelink disability pension. She is prescribed Zoloft and on a mental health plan. Otherwise she is in receipt of a Newstart allowance. Her current income is approximately $325 each week. She resides in rental accommodation, paying approximately $200 each week. She has done so since approximately August/ September 2016.
The parties commenced their cohabitation on their marriage. Prior to that, and for approximately 12 months, the Respondent paid for a lease on a unit occupied by the Applicant. The parties married on … 1988 and took up residence in real property situate at Property G in the State of Victoria (‘the Property G property’), being property owned by the Respondent. They remained living there until approximately April 2013 (a period of 25 years). In April 2013, the parties and their children moved into the home of the Third Respondent. They remained in occupation, in the absence of the Third Respondent, for approximately 14 months. They paid no rent although the Respondent claimed that a payment made to his brother well after the event was, in fact, in part (the sum of $8,000) a lump sum rental payment. The Court rejects that claim. The Third Respondent’s evidence did not support such a claim. The Applicant denied the claim. No evidence before the Court supported it.
The Applicant and Respondent took up residence in the newly built former matrimonial home in September 2014. By that time they had separated, under the one roof, on 8 December 2013. On 11 June 2016, the Applicant physically left the former matrimonial home. Their cohabitation period was thus 28 years.
On 14 September 2016 an Interim Intervention Order was made against the Respondent in the Magistrates’ Court of Victoria at Melbourne. The Applicant was named as the ‘Affected Family Member’. The order was made by consent and without admission of the allegations in the complaint. The order was to expire on 13 September 2017. In December 2017 the final intervention order was extended in its operation for a further five year period. The husband was convicted of a breach of the intervention order in August 2017 and again in 2018.
The parties’ elder child Ms E was born on … 1990. She is now aged 29 years. She remained in occupation of the former matrimonial home with her father (after her mother’s departure in June 2016) until May 2017 at which time she was 27 years old and financially independent. She moved into an apartment with her boyfriend. Her father assisted in the purchase of the apartment for his daughter by arranging for a more favourable price. He made no direct financial contribution.
The parties’ second child Ms D was born on … 1996. She is now aged 22 years. She also remained in occupation of the former matrimonial home until May 2017 at which time she was 20 years old and partially financially independent. She had been supported in part by her mother since December 2013 and that financial support continued until May 2017. It continued in an ongoing way until the conclusion of the trial.
Contribution
Commencement
In about 1971, the Respondent purchased the Property G property for approximately $21,000. He secured such purchase with a loan from the Commonwealth Bank of Australia for $16,000. The remaining $5,000 together with costs and any applicable stamp duty, was paid by him out of savings. In about 1976 the Respondent, having paid in full the mortgage to the Commonwealth Bank of Australia, obtained a discharge of mortgage and thereby obtained an unencumbered title.
In 1987, and prior to the marriage and cohabitation commencing, the Respondent purchased further real property, as a tenant in common in equal shares with his sister, Ms Burgess. This property was a freehold shop premises situate at Property H in the State of Victoria (‘the Property H property’). The Respondent and his sister borrowed approximately $100,000 to secure the purchase. The loan was interest only and the occupants of the premises were the Respondent and his sister, who together ran a business from the premises. Additionally, the Respondent and his sister (the Second Respondent) operated a business from a leased premises in Suburb J.
By the commencement of cohabitation, the Respondent was self-employed and contributed:-
a)the Property G property unencumbered;
b)a one half interest in the Property H property with an approximate $50,000 encumbrance (being his half share). He had no equity;
c)the two businesses; and
d)the Respondent claimed, additionally, savings of $100,000. No documentary evidence of such claim was before the Court and the Applicant denied the claim.
At the commencement of cohabitation, the Applicant had no assets. She was aged 28 years. The Respondent was aged 40 years.
The Court accepts the evidence of the Respondent that it was he who paid for the great majority of the Applicant and Respondent’s wedding costs, and the honeymoon taken by the Applicant and Respondent. These funds were savings held by him of an indeterminate but modest amount. Otherwise there is insufficient evidence before the Court, and indeed, some contrary evidence – he had borrowed the entire amount to fund the Property H property purchase the year previously – to establish the savings quantum asserted by the Respondent as an initial contribution.
During and Post
Following the birth of the Applicant and Respondent’s children, the Applicant assumed their primary care. She was engaged primarily in home making tasks and the care of the children whilst the Respondent earnt the majority income for the family’s needs, in particular during the children’s early years. The Applicant assisted the Respondent by, at some unknown commencement date, working four days a week in the family business and juggling her care of the children, who were often at the business premises, with her provision of very “hands on” assistance in the running of the business.
In 1993, the Respondent and the Second Respondent (his sister Ms Burgess) sold the Suburb J business and received approximately $10,000 net each. These funds were applied by the Respondent in the living and other expenses of the family.
In … 2008 and … 2009, the Respondent’s father and mother passed away, respectively. They died intestate. The Respondent (with the consent of his two siblings) some time later applied for Probate and Letters of Administration of the Estate of his father as the sole administrator of the estate. The estate was comprised in the main of the real property situate at Property B. It was registered in the sole name of the father of the Respondent and the Second and Third Respondents. It was valued in the sum of $540,000.
In 2010, the Respondent retired. The Respondent and Second Respondent sold the Property H property, with settlement occurring on 17 May 2010. The Property H property had been purchased with interest only borrowings. The purchase had pre-dated the marriage by approximately one year. The Respondent had no equity in the real property. It was sold after the Applicant and Respondent had been married for 22 years. The Respondent received a net sum of $390,579 from the sale of the Property H property together with his share of the deposit monies of approximately $21,000. These funds represented an equal contribution by both the Applicant and the Respondent. The Respondent claimed that such proceeds of sale were expended by him on his family and their living costs. The Applicant challenged that assertion. The Court does not accept the bold assertion of the Respondent nor his evidence in this regard, as later canvassed in these reasons.
The Respondent and his sister shut down the business operating from the Property H property premises. They received no monies in respect of any sale of this business.
The Respondent invested further in Property G in 2010 with a part of the proceeds of sale of the Property H property ($78,000) and borrowings up to the value of his interest, being $185,000. In 2013, the Respondent sold his interest in this venture to make funds available for the ongoing construction of the former matrimonial home. That investment provided a profit to the parties of approximately $80,000.
In 2012, the Applicant, the Respondent, the Second and Third Respondents agreed between themselves for the Applicant and Respondent to acquire the interests of the Respondent’s siblings, Mr A Fellowes and Ms Burgess, in the former matrimonial home. Each of the Third Respondent, Mr A Fellowes, and the Second Respondent, Ms Burgess, had a one third interest, together with the Respondent, in the residuary estate of their deceased father. That comprised the freehold property at Property B described in Certificate of Title Volume … and Folio …. The agreement between the Respondents was reflected in an unsigned and undated 2012 Deed of Family Arrangement. That Deed provided for a payment of $180,000 by the Respondent to the Third Respondent upon the signing of the deed and a payment of $180,000 by the Respondent to the Second Respondent by payment of $90,000 on the signing of the Deed and a further payment of $90,000 within 12 months of the date of the Deed or upon the settlement of the sale of the Property G property by the Respondent, whichever was first.
The Court finds the Respondent paid to each of the Second Respondent and Third Respondent, the sum of $180,000. Ms Burgess received $90,000, being the final payment to her, in August 2013 consistent with the Deed of Family Agreement. The Respondent’s claim, in his affidavit evidence and during the running of the proceedings, that Ms Burgess received such payment of $90,000 by way of payment of “wages”, is rejected. The business was closed in 2010. The Respondent had the sale proceeds of the Property H property available to him in 2010 out of which to pay any “wages” lump sum to the Second Respondent that may have been claimed or owed. He made no payment for “wages”. No evidence was before the Court from Ms Burgess, the Second Respondent. No calculation of taxation due on such sum was made, nor allowed for. There was simply no evidence to support this fabricated claim, in circumstances where evidence from the Second Respondent could easily have been put before the Court. There was no documentary evidence of any description as would be expected, and indeed legislatively required, were the payment related to “wages”.
The Third Respondent received his payment (and the Second Respondent her first payment) as described hereafter albeit the Third Respondent claims to have never been paid his entitlement.
On 11 February 2013, the former matrimonial home was registered in the Respondent’s name as the legal personal representative of his late parents’ estate. This again was consistent with the Deed of Family Arrangement.
In April 2013 the Respondent sold the Property G property for the sum of $575,000. These monies were held in an interest bearing account by the Respondent and over time he claimed were applied in their totality to costs incurred in the building of the former matrimonial home. The Court does not accept that anything more than $500,000 was applied in this regard.
The costs incurred in the building of the former matrimonial home were never clearly identified in the courtroom. The initial building sum was anticipated to be $250,000. The Respondent claimed the costs were ultimately $500,000. The Applicant simply had no idea. She throughout the period of cohabitation had no control over, or knowledge of, the particular details of the family finances. As a practical matter, she generally proceeded on the basis of an acceptance of the Respondent’s claim as to the figure of $500,000. The Respondent provided no documentary evidence to support this claimed expenditure.
During the period from April 2013 to approximately September 2014, the Applicant and Respondent and their children lived in the home of the Third Respondent. During this time, the Respondent, as an owner builder, demolished the existing old wooden home in which the Respondents parents’ had lived, and built a new family home.
In approximately September 2014, and whilst separated, the parties and their children moved into the former matrimonial home. In respect of the Applicant and Respondent’s ownership of this home, the Applicant and the Respondent informed their children that they had purchased the interests of the Second and Third Respondents in the former matrimonial home and that the home was owned solely by them. Neither the Second Respondent nor Third Respondent ever claimed to the children that they had an ongoing financial or equitable interest in the former matrimonial home. That claim was first made to them by the Respondent following their mother’s June 2016 departure from the former matrimonial home. Prior to that, the Respondent had asserted that the former matrimonial home was owned by he and their mother.
In … 2015 the Respondent was involved in a motor vehicle accident. He received approximately $13,000 in an insurance payment. Those funds were applied to the purchase for the Applicant, in April 2016, of a second hand Motor Vehicle C registration number …, for approximately $61,000. The Respondent paid the sum of $35,477.55 toward the acquisition, inclusive of the $13,000. The Applicant paid the balance. The Applicant and Respondent were separated at this time.
The parties remained together in physical occupation of the former matrimonial home until June 2016. At that time, the parties had lived together, separated under the one roof, for approximately two and a half years. When the Applicant left the home, she travelled overseas until 18 July 2016. She took only personal belongings with her. She later returned to the former matrimonial home to take few chattels. The majority remained with the Respondent. She now seeks to have made available to her:-
a)the baby photos;
b)one leather couch (there are two);
c)her queen size bed;
d)one 46” inch TV (there are three); and
e)a washing machine or fridge.
She shall have such items, and of her choosing. The Applicant has been denied the use of any significant household chattels for almost three years. She has had to meet rental payments whilst the Respondent has remained in occupation of the former matrimonial home, rent and mortgage free. Additionally, he has paid no rates on the property, nor land tax as, he said, proceedings were pending. The arrears of rates and land tax have accrued during the Respondent’s occupation of the former matrimonial home. He has had the capacity to make those payments but refused to do so. The Applicant has incurred rental expenses exceeding $26,000 in the past two and a half plus years. The Respondent is liable and should remain liable for these outgoings incurred for the most part by him.
Other evidence
The Court accepts the evidence of the Applicant and her and the Respondent’s two daughters as to the date of separation.
The Applicant discovered, whilst the family was living in the home of the Third Respondent, that the Respondent had an ongoing affair. She did not cope for an initial period of some two weeks, refusing to leave her room. She confronted the Respondent and thereafter considered herself separated from the Respondent. She conveyed that to him. She no longer occupied the same bedroom. She lodged a caveat on the title to the former matrimonial home on 20 January 2014. She commenced to receive Centrelink benefits in the form of a Newstart allowance. The evidence of the Applicant and Respondent’s daughters corroborated that of their mother, which was that their mother “did not cook for [their father], clean for [their father], or do any of [their father’s] washing”. Further, that the three women “paid for all [their] day to day living expenses” and had no regular financial assistance provided by the Respondent. Whilst the Respondent did travel with the Applicant to visit her dying father in Adelaide, and did co-operate in the purchase of the Applicant’s Motor Vehicle C, those aspects did not signal that the Applicant and Respondent were again in a married relationship. Indeed, on the Respondent’s own evidence he was aware of the receipt of Centrelink benefits by the Applicant from separation and had no issue with such receipt. He accepted the Applicant had a Centrelink income, as did he, and he accordingly made no financial provision for her.
In March 2016, the Applicant received an inheritance from her father’s estate of approximately $181,000. She kept those funds and used them, in small part, to establish herself in alternative accommodation. Otherwise, the Applicant’s expenditure of her inheritance was described by her as follows:-
a)overseas trip - $30,000;
b)purchase of car & expenses including insurance, registration, repairs, service and tyres - $37,400;
c)Ms D’s car (including registration, insurance and driving lessons) - $8,740;
d)Ms D’s rent for period of five months starting April 2017 with bond – $5,400;
e)Ms D’s weekly shopping and clothes – $6,000;
f)Sports lessons $90 for 30 weeks - $2,700;
g)Ms E’s furniture to set up apartment - $7,000;
h)visit to Adelaide and Queensland to see sister and brother for moral support in two and a half years - $6,500;
i)rent - $26,000;
j)weekly food, medication and petrol at $280 per week for two and a half years - $36,400.
Further, the Applicant states that money “squandered” by her at Crown Casino was approximately $30,000 and that this was spent on “clothes, bags, anything to make [her] feel better about [herself], as [she] was feeling worthless”.[1] The Applicant’s expenditure was not a contribution to the acquisition and/or maintenance of the assets of the Applicant and Respondent and her expenditure in respect of the adult children was discretionary. Unlike the Respondent’s inheritance receipt, the inheritance received by the Applicant did not add to the Applicant and Respondent’s asset pool and was in part wasted by the Applicant.
[1] Exhibit SF1.
The Respondent alleged the Applicant took items without his knowledge or consent on her departure from the former matrimonial home. Those items included a jewel case, with its contents valued by the Respondent personally, but without any expert valuation evidence before the Court, in the sum of approximately $50,000. The jewel case allegedly contained:-
a)two gold bars;
b)six … gold sovereigns;
c)two gold medallions;
d)six rings; and
e)15 diamonds.
Additionally, the Respondent claimed, the Applicant subsequently removed from the former matrimonial home items totalling $20,000 including the Respondent’s … wristwatch, which he valued at approximately $6,000 and his wedding band. Again, no valuation evidence was before the Court. The Applicant denied the allegations of the Respondent. On the Respondent’s evidence the Court cannot find substantiation of his allegations. The Respondent conceded that much in closing address.
Ownership of the former matrimonial home
The Respondent’s evidence as to the current beneficial ownership of the former matrimonial home was inconsistent and implausible. He claimed in his affidavit evidence sworn 17 August 2017 that the Applicant and Respondent had sought to buy out the interest of the Respondent’s two siblings in the former matrimonial home but that those negotiations were unsuccessful. [2] He claimed the position which remained was that his siblings maintained their individual third interest in the real property with an agreement existing between the Respondent and his siblings that they would charge no rent; contribute $0 to the renovation costs of approximately $500,000; and thereafter said “…If I sold the property, we would each receive a one third share of the proceeds of sale.”
[2] Affidavit of Mr Fellowes sworn 17 August 2017, [26]-[27].
On 17 August 2017, the Respondent also deposed to there being, in respect of the former matrimonial home, the sum of $4,191.90 in outstanding rates; $3,300 in outstanding land tax liability; $2,399.95 in an outstanding gas account; and a total of $44,000 in outstanding invoices to contractors who had much earlier performed the necessary works but who had failed to be paid. No enforcement proceedings were ever instituted against the Respondent. No letters of demand appeared on his doorstep. No corroborating evidence was provided by the Respondent in circumstances where that could easily have been obtained by the Respondent. The Applicant denied any contractors were owed funds, in particular, the claimed amount of $30,000 outstanding in respect of the provision of marble, as claimed by the Respondent. There was never any discussion between the Applicant and Respondent that any monies were owed following the completion of the building of the former matrimonial home. Rather the Applicant was told no amounts remained outstanding and a significant sum had been expended. This claim was another recent invention of the Respondent.
In his affidavit sworn 5 November 2018 the Respondent gave differing evidence as to ownership of the former matrimonial home. He deposed, relevantly:-
“…the siblings and I agreed that when the Wife and I sold the property, the proceeds of sale would be distributed as follows:
a. That the wife and I be reimbursed all monies for the building of the former matrimonial home on the Property B property; and
b. The balance of any proceeds of sale be divided equally between my siblings and me.”[3]
[3] Affidavit of Mr Fellowes sworn 5 November 2018, 19.
In addition to its inconsistency with the earlier evidence given by the Respondent, the above evidence is implausible. If true, and the Court does not accept this, it provided for, amongst other things:-
a)an opportunity for the Applicant and Respondent to never place the former matrimonial home on the market for sale during their lifetime or alternatively to not do so until the death of the Second and Third Respondents; and/or
b)the payment by the Applicant and Respondent solely of all maintenance and/or any further renovations costs without reimbursement from the Second and Third Respondents.
Neither of these scenarios was contemplated or agreed to by anyone.
Evidence of Mr F
Mr F’s wife is a first cousin of the three Respondents. Mr F has a good relationship with the three Respondents.
Mr F and his wife Ms K are, and were, at the relevant time, directors and shareholders of Company L (‘the company’), a company registered in the Australian Capital Territory.
In … 2011, the Third Respondent was convicted of serious criminal charges. He was to be imprisoned for a period of eight years. He was incarcerated for approximately fourteen months. He appealed his convictions and required funds for his legal fees. Those funds were said by the Respondent to have been advanced by Mr F. No quantification of the legal costs was in evidence. Nor was there any evidence as to the amount (of costs) recovered by the Third Respondent upon his convictions being overturned. The Third Respondent denied monies were advanced to him for the payment of legal costs.
On … 2011, the company paid the sum of $200,000 for the purchase of property contained in Certificate of Title Volume … Folio … being the property owned by the Third Respondent and situate at Property M (‘the Property M property’). A deposit of $20,000 was paid. Settlement occurred on … 2011. On … 2011 the company became registered as the sole proprietor of the Property M property. The Respondent received at that time, on behalf of his brother, the Third Respondent, approximately $193,531.39 net proceeds of sale, after payment out of necessary disbursements, costs and charges over the property (a Victoria Legal Aid re-imbursement was paid). The effect of these family transfers of funds was that the Third Respondent was rendered asset less and the Respondent held funds on behalf of his brother, the Third Respondent.
On … 2012, Mr F advanced to the Third Respondent the sum of $45,000 as requested by the Third Respondent. The Third Respondent was no longer in jail. The Third Respondent indicated to Mr F that “he needed to pay some bills”.
On 19 August 2013, Mr F received a payment of $210,000 from the Respondent on behalf of the Third Respondent to re-purchase the Property M property. These monies were paid by the Respondent, on behalf of the Third Respondent, to Mr F on the same date that the Second Respondent received her further payment of $90,000. The Property M property remains held in the Mr F Family Trust on behalf of Mr A Fellowes to be transferred back to Mr A Fellowes at his request. No transfer of ownership of the Property M property has occurred to date. The Third Respondent described this as keeping his assets safe from any possible claim, in particular from his new wife of now three years.
On 2 June 2014, Mr F received a further payment but this time from the Third Respondent directly in the sum of $57,650. This was said to be occasioned by the Third Respondent wishing to protect his assets. He wanted Mr F to “just keep for him” the monies.
Evidence of Mr A Fellowes - Third Respondent
Mr A Fellowes intervened in the proceedings to, as deposed to by him “protect my own third interest in the property…”. He claimed to have “not been paid by any other person to transfer my interest to anybody whatsoever”.
The Third Respondent’s evidence was also inconsistent. He gave evidence that his one third interest in the former matrimonial home was, variously:-
a)a third interest of its current sale price value;
b)a third interest of its current sale price value after deduction of a “costs of the building” payment to the Applicant and Respondent;
c)no interest capable of establishment upon the death of the Respondent.
The evidence of Mr F and the Third Respondent perhaps confused the matter. What that evidence disclosed was that this is a family who support each other to conceal relevant financial matters in circumstances of a family separation and divorce. The Third Respondent’s actions were taken to protect his assets against any possible victims of crime compensation or potential proceeds of crime issues, and if not those, then to protect his assets against any claim that could be made by his ex-wives. The Respondent also acted to obscure the path to an accurate establishment of the assets held by he and the Applicant. His brother, the Third Respondent, assisted in this regard. His sister did not.
Prior to the unsigned Deed of Family Arrangement being drafted, the Respondent received considerable sums over which he had total control. He had received approximately $501,579. This was prior to his receipt of a further approximately $575,000 from the sale of the Property G property. The Second and Third Respondents were paid out by the Applicant and Respondent who acquired their interests in the former matrimonial home by approximately August 2013. The Respondent used the funds held by him to make those payments. This left him still making a contribution to the acquisition of the Applicant and Respondent’s assets of $180,000, being his share of his parents’ inheritance. After paying out the Second and Third Respondent’s interests, the Respondent still had approximately $141,579 before receipt of the proceeds of sale of the Property G property. That receipt was $575,000 together with interest. The building costs he claimed were $500,000. This left approximately $216,000 plus interest unaccounted for which the Respondent claimed went in living expenses for the family. But of course the time period he referred to in respect of these living expenses, by necessity, was between April 2013 and December 2013. After that time the Applicant commenced to receive Centrelink benefits and the Applicant and Respondent made no financial contributions to the other save the Respondent’s input of $35,477.55 to the purchase of the Applicant’s car which included the $13,000 insurance payout. The Court determines no adjustment is necessary as between the parties in respect of the differing value of their motor vehicles.
The Respondent’s evidence, for the most part, could not be relied upon. Nor could that of the Third Respondent.
Section 75(2) matters
As both the Applicant and Respondent concede in closing submissions, these matters apply fairly equally to the parties. On the evidence there is nothing that distinguishes one from the other and no adjustment is made in respect of this consideration.
When looking to the justice and equity of any orders in the circumstances of this case, the Court is satisfied that a division of the former matrimonial home, with otherwise the parties ownership of assets not disturbed (save as provided for in the orders) is appropriate. These orders shall allow each of the parties a reasonable standard of living and reflect those matters required to be considered by the Court.
I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Judge Hartnett
Date: 21 March 2019
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Costs
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Injunction
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