Gleeson and Gleeson and Anor
[2014] FCCA 482
•17 April 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GLEESON & GLEESON & ANOR | [2014] FCCA 482 |
| Catchwords: FAMILY LAW – Property – husband’s father joins as second respondent seeking repayment of alleged loans to husband and wife – husband declares bankruptcy during the course of the trial – effect of non-disclosure of alleged liabilities on bankruptcy statement of affairs – weight to be attributed to expert evidence – credit issues – onus of proof – contributions – section 75(2) factors including considerations under section 75(2)(o). |
| Legislation: Family Law Act 1975 Bankruptcy Act1966 (Cth) Evidence Act 1995 (Cth) |
| Stanford & Stanford [2012] HCA 52 Bevan & Bevan (2013) FLC ¶93-545 Biltoft & Biltoft (1995) FLC 92-614 Hickey & Hickey & Attorney-General for the Commonwealth Bank of Australia [2003] FamCA 395 Kowaliw & Kowaliw (1981) FLC 91-092 Elias & Elias (1977) FLC 90-267 Jones v Dunkel (1959) 101 CLR 298 Jordan & Jordan (1997) FLC 92-736 Makita (Australia) Proprietary Limited v Sprowles (2001) 52 NSWLR 705 |
| Applicant: | MS GLEESON |
| First Respondent: | MR D GLEESON |
| Second Respondent: | MR V GLEESON |
| File Number: | MLC 5004 of 2011 |
| Judgment of: | Judge McGuire |
| Hearing dates: | 7 August 2012 3 – 4 December 2012 27 – 28 June 2013 21 – 23 October 2013 |
| Date of Last Submission: | 19 December 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 17 April 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Robinson |
| Solicitors for the Applicant: | Duane Portway Family Law |
| Solicitors for the First Respondent: | Unrepresented |
| Counsel for the Second Respondent: | Ms Carter |
| Solicitors for the Second Respondent: | Dr Stretch Kontelj Lawyers |
ORDERS
That within 28 days of the date of these orders the husband shall:
(a)Transfer and/or vest all his right, title and interest in the following to the wife absolutely:
(i)The property situate at Property D in Victoria;
(ii)All personalty and chattels in the possession of or under the control of the wife as at the date of these orders but subject to these orders;
(iii)The balances of any bank accounts or like investment in the name of or to the benefit of the wife as at the date of these orders; and
(iv)The wife’s shareholdings with (omitted) and (omitted).
(b)Be solely responsible for and indemnify the wife in respect of any and all liabilities incurred by him since separation in either joint names or in his name alone.
That contemporaneously with the transfers referred to in Order 1 hereof, the wife shall:
(a)Pay to the husband a lump sum of $3, 305;
(b)Transfer and/or vest all her right, title and interest in the following to the husband absolutely:
(i)The monies held in trust for the parties being the balance proceeds of sale of the property at Property H;
(ii)All personalty and chattels in the possession of or under the control of the husband as at the date of these orders including:
A.the (omitted) watch;
B.gold necklace with the crucifix (received at (omitted));
C.didgeridoo;
D.collectable albums by (omitted);
E.Barbeque;
F.all photos involving the husband’s family members;
G.all VCR recorded tapes with the husband’s relatives;
H.half of the framed portraits of the children;
I.selected family photos of the kids (or negatives); and
J.husband’s tools, and all paperwork relating to (business omitted).
such to be available to the husband to collect upon reasonable notice.
(iii)The balances of any bank accounts or like investments in the name of or to the benefit of the husband as at the date of these orders;
(iv)The husband’s superannuation policy and entitlement with (omitted) Superannuation.
(c)Be solely responsible for and indemnify the husband in respect of the following:
(i)The mortgage held by (omitted) Bank and that the wife forthwith make her best endeavours to obtain a release by the bank for the husband’s liability under this mortgage;
(ii)Any and all liabilities attaching to any of the assets retained by the wife pursuant to these orders;
(iii)Any and all liabilities incurred by the wife since separation either in joint names or in her name alone.
That in all other respects the Application and Responses be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Gleeson & Gleeson & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 5004 of 2011
| MS GLEESON |
Applicant
And
| MR D GLEESON |
First Respondent
| MR V GLEESON |
Second Respondent
REASONS FOR JUDGMENT
Applications
These are proceedings for property settlement. There is a third party intervener, namely the husband’s father, Mr V Gleeson. His interest in the proceedings is in respect of one discrete and important issue. He says he loaned the husband and the wife sums totalling $158,000 during the course of their marriage. He pursues an amount of $128,000 which he says remains outstanding. The wife disputes this claim. She concedes loans or a loan in the sum of $50,000 but says $42,000 has been repaid and the remaining $8,000 forgiven. The husband supports his father’s case.
During their marriage the husband and the wife operated a (omitted) business through service company entities. This business directly and indirectly gives rise to the other issues between them being:
a)The husband’s claim that the wife has syphoned off an amount of $282,370.28 from business accounts for her own use and benefit. The wife denies the allegation;
b)The husband’s claim that he gave the wife cash of $50,000 in or about December 2012 being proceeds from the sale of a truck. The wife denies the allegation;
c)The wife’s allegation generally that the husband wasted assets during the marriage through gambling and a drug habit, culminating in the husband declaring himself bankrupt on a debtor’s petition during the course of this trial. She alleges, however, that the husband has retained assets of the business and continues to be employed or self-employed but without disclosure to his trustee in bankruptcy;
d)The general issues between the husband and the wife as to their contributions to the family and the business, both during and since the demise of their marriage, together with various considerations under section 75(2) of the Family Law Act 1975 (“the Act”).
The Property Pool
The known or the agreed assets, liabilities and resources of the husband and the wife are the following:
a)the former matrimonial home at Property D, Victoria, $445,000;
b)(business omitted) sale proceeds rested in the husband’s bankruptcy trustee(anticipated), $1,734 – $9,434;
c)wife’s chattels, $7,000;
d)wife’s shareholdings ((omitted) and (omitted)), $54,600;
e)proceeds of sale of investment property at Property H, Victoria, $3,979;
f)mortgage – Property D, $184,154;
g)superannuation – husband’s (omitted) Superannuation policy, $28,000.
Many of the disputed issues in respect of the property pool involve what are colloquially known as “add backs”. There are significant issues of credit between the parties. Those issues can be summarised and particularised as:
a)The parties agree that a truck was sold. The husband says he gave the $50,000 proceeds in cash to the wife in December 2012 and during the course of this trial. The wife’s denial implies that the husband sold the truck and retained the proceeds;
b)The husband says that the wife has removed $282,370.28 from the business accounts in her role as bookkeeper for the business;
c)The wife says that the husband has gambled and lost approximately $180,000 from their joint and business moneys;
d)The wife alleges there to be an asset of an outstanding loan to the husband’s brother, Mr A, in the sum of $23,000 advanced to him for legal costs in his criminal trial.
Background
The husband and the wife married and commenced cohabitation on (omitted) 2000. The wife says final separation occurred in September 2007. The husband says they separated “on a final basis” on 3 May 2011. Little turns on this dispute as the business continued to operate after 2008 and on the same basis with the wife being the bookkeeper. It seems clear, however, that there was a reconciliation for a few months in 2008 and a later short reconciliation attempted, but unsuccessfully as in early 2011.
In 2011 the husband moved from the former matrimonial home to the parties’ investment property at Property H. That property has since been sold and the husband now rents accommodation. The wife has remained in the former matrimonial home.
The parties have two children being X born (omitted) 2001 (aged 13 years) and Y born (omitted) 2003 (aged 10 years). The children now live with the wife. They were the subject of these proceedings but fortunately consent orders were entered on the 1st day of the trial. There had, however, been serious dispute as to the children’s living and parenting arrangements since the wife’s initiating application was filed in mid 2011. There were numerous interim hearings together with the wife obtaining a recovery order after X had been overheld by the husband. Mr Gleeson claimed that X had run away to his care.
The wife is 38 years of age. The husband is 43 years. There is no evidence that either has re-partnered.
The wife receives a Centrelink benefit for herself and the children. She receives no child support or only the statutory minimum.
The husband claims that he is unemployed. He concedes, however, that he has obtained some casual work in his trade as a (omitted). The wife alleges that he is more substantially self-employed as he has retained a quantity of (business omitted) equipment from the business.
The applications were initially listed for trial in respect of both children and property matters in February 2012. That date was vacated as the family report had not been completed and the husband was not then represented. A family report was prepared and later an addendum report due to changes in the children’s circumstances. Further, the parties were both psychiatrically assessed by a Dr K due to the wife’s allegations of the husband’s drug use and gambling. Dr K’s report was not read into evidence in this trial.
The parties jointly operated a business providing (omitted) and through service company entities. The husband had previously been employed in the (omitted) industry and in about 2004 obtained experience in (omitted) by working with a cousin. The parties’ business, (business omitted) commenced in late 2004 or early 2005. A quantity of plant and equipment including (omitted), was purchased. The husband provided his experience and labour. The wife did the books of the business. Between 2009 and February 2011 the business/company operated in partnership with the husband’s previous employer, (omitted).
On 27 March 2013 during the course of these proceedings, Mr R and Mr D were appointed the joint trustees of the husband’s bankrupt estate. Mr R has sworn an affidavit dated 10 April 2013 which was read into evidence without him being required for cross-examination. The trustees, obviously being aware of these proceedings, elected not to actively participate. The husband’s statement of affairs references significant creditors as solicitors previously acting for him in these proceedings. He discloses minimal (omitted) equipment.
The wife was represented by solicitors and counsel for the duration of the proceedings. The husband was represented initially. He had counsel appear on the first four days of the trial and thereafter he represented himself. In doing so, the court offered Mr Gleeson all information in respect of procedure and a general invitation to request assistance at any time. The second respondent made an application to join the proceedings in November 2012 and was thereafter represented by counsel for the remainder of the trial.
The trial was originally estimated to occupy two to three days of court time. At the time of that estimate the litigation involved both children and property issues. The proceedings thereafter took on a life of their own, compounded by matters such as the husband’s bankruptcy and the joinder of the second respondent. It was clear that, especially on the part of the husband, pre-trial forensic preparation had been seriously lacking. As a result the wife endured cross-examination of, on my recollection and notes, some four days, including the need to be recalled. The majority of that cross-examination related to the husband’s allegation that she had serially removed moneys from business accounts. He adduced no forensic accounting evidence in support of the allegations. I comment only that a proper and thorough pre-trial preparation may save parties the expense and trauma of attempting to prove their cases solely on the brave attempts of their counsel in cross-examination. In the end, this trial continued over 8 days.
Orders sought
The second respondent simply wants to be repaid the sum of $128,000. He seeks an order that the former matrimonial home be sold to give effect. In the witness box, Mr V Gleeson volunteered that he thought each of the parties separately should be indebted to him in a sum of $64,000. I accept this comment, however, to be legally naive on his part and his case was always run on the basis of the husband and wife being jointly and severally liable to him for $128,000.
Mr V Gleeson supports his case by various documents which he claims to be receipts and acknowledgements of the loans that he says he has made to the husband, the wife and/or and their business.
The wife wants to retain the former matrimonial home and take over the mortgage liability. On her case, she would also retain her shareholdings ($54,600) and her chattels ($7000). Inherent in the wife’s case is her denial of any liability to the second respondent. She urges the court to find that the husband has:
a)Retained $50,000 from the sale of a truck;
b)Retained (omitted) equipment at some value and not disclosed to his trustee in bankruptcy;
c)Maintained employment or self-employment, also not disclosed to his trustee;
d)Wasted assets through gambling and imprudent operation of the business. She alleges the husband’s gambling losses at $180,000. Again, no forensic accounting evidence was adduced.
e)The husband seeks orders in terms best transcribed from his aide-memoir handed to the court at the time of his final address on 19 December 2013 and as follows:
(1) The husband submits that this Honourable Court, order Property D, be sold and the proceeds of which are to pay out the mortgage with (omitted) Bank (approx $175k) and Mr V Gleeson (approx $131k);
(2) The husband submits that the balance of the above, and in addition to the (omitted) shares and the (omitted) shares, be divided between the husband and the wife with a 50/50 split.
(3) The husband submits that the wife harvested a total of $282,370.28… into her own personal bank account and consequently requests that this information be considered in the decision-making process. The husband further submits that the entire amount be reimbursed by the wife and the said amount be included in the asset pool from which the financial settlement will be determined.
(4) Husband further submits that credit interest is added to the principal. The amount is to be calculated at a reasonable rate (compounding) over a defined period. That period being from the commencement of withdrawals to the final withdrawal.
(5) Furthermore, that debit interest is added to the aggregate of the principal and credit interest.
(6) The husband submits that in the event any of the withdrawn funds were employed for investment purposes of any nature, that any earnings acquired as a result of these purchases be added to the asset pool and interest calculated accordingly.
(7) The husband submits that the derivative balance of the above, be divided between the husband and the wife with a 50/50 split.
(8) The husband submits that the moneys held in trust by Dwayne Portway (solicitor) being proceeds from the sale of the Property H property, be divided between the husband and wife with a 50/50 split.
(9) The husband further submits that all remaining chattels be listed and each party selects an item alternatively;
(10) … The wife return to the husband the following personal items: the (omitted) watch, gold necklace with crucifix (received at (omitted)), didgeridoo, collectable albums by (omitted), barbeque, all photos involving the husband’s family members, all VCR recorded tapes with the husband’s relatives, half of the framed portraits of the children, selected family photos of the kids (or negatives), husband’s tools, all paperwork relating to (business omitted).
In considering the orders sought by the husband, I infer that he denies any gambling losses or wastage of other assets.
The Evidence
All three parties gave evidence on affidavit and the husband and the wife provided sworn financial statements. They were all cross-examined at length.
The husband’s trustee in bankruptcy provided an affidavit but was not required for cross-examination.
The wife adduced evidence from Ms T. Her husband is Mr J and is Mr D Gleeson’s first cousin. Ms T was subpoenaed by the wife to give evidence and produce documents. Ms T’s family also operate a (omitted) business. Mr D Gleeson worked with the Ms T family to learn the business before branching out on his own in about 2005. Ms T gave evidence of splitting payments due to Mr D Gleeson to accommodate his gambling debts. She produced documents in corroboration which are now exhibits. Ms T confirmed that Mr D Gleeson purchased a quantity of (omitted) from her family company. No purchase price was disclosed.
The second respondent adduced evidence from a handwriting expert, Mr N, in respect of a number of documents allegedly containing the wife’s signature. They are documents relating to alleged loans from the second respondent to the husband and the wife. The wife denies or does not admit the authenticity of the signatures. Mr N opines the signatures to be authentic and in the hand of the wife.
Mr N provides an affidavit sworn 30 November 2012 and annexing his report and setting out his qualifications and experience dating from 1976 when he began employment with the (employer omitted). Mr N was cross-examined.
The Relevant Law
The jurisdiction and power of the Courts to make orders for property settlement or alteration are provided in section 79 of the Act as follows:
Alteration of property interests
(1) In property settlement proceedings, 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 marriage or either of them--altering the interests of the parties to the marriage 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 marriage--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 marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall 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 shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or 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 marriage 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 marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or 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 marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, 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 marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) references section 75(2) of the Act which itself provides:
The matters to be so taken into account are:
(a) the age and state of health of each of the parties; 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 marriage 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 (3), 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) where the parties have separated or divorced, 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
(ha) 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 marriage 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 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; 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
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
(3) In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
The High Court in Stanford & Stanford[1] and the Full Court in Bevan & Bevan[2] have recently revisited and provided guidance for trial Judges in implementing section 79 of the Act. The approach had previously been thought settled by way of a multi-step approach as articulated by the Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia[3]:
a)The Court is to identify and attribute value to the property of the parties, including assets, common liabilities and financial resources and, for these purposes, superannuation interests are to be “treated as property”;
b)to identify and assess the various contributions of the parties pursuant to section 79(4)(a)-(c) and then, usually notionally, alter the parties’ property interests on a percentages basis;
c)to identify and attribute weight to the other factors under section 79(4), including the section 75(2) considerations, and then determine whether there be an adjustment to either of the parties after the contribution entitlements;
d)to stand back and consider whether the proposed orders arrived at on the above basis be just and equitable pursuant to section 79(2) of the Act, it being the orders themselves, rather than the simple percentage distribution, that should be seen as just and equitable.
[1] [2012] HCA 52
[2] (2013) FLC ¶93-545
[3] [2003] FamCA 395
The Full Court in Bevan has cautioned against trial judges taking a strict step-by-step approach and agreed with the superior Court that the notion of justice and equity, pursuant to section 79(2), should permeate the entire statutory and intellectual process. Significantly, there has also been doubt cast on the propriety of an established practice of courts of making “notional add-backs” to the property pool where a party has disposed of or had the benefit of, an asset prior to a trial. The Full Court in Bevan preferred that such issues be dealt with under section 75(2)(o) of the Act which represents no real change from previous approaches.[4]
[4] See Kowaliw & Kowaliw (1981) FLC 91-092
The High Court in Stanford laid down three “fundamental” propositions as a guide through the section 79 process and summarised in Bevan at [73] :
The determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
(2) the discretion conferred by statute must be exercised in accordance with legal principles and must not proceed on assumption that the parties’ interests in the property are, or should be, different from those determined by common law and equity;
(3) a determination that a party has a right to a division of property fixed by reference only to the matters in s.79(4), and without a separate condition of s.79(2), would erroneously conflate what are distinct statutory requirements.
In summary, therefore, the Court must firstly determine the legal and equitable interests of the parties in property as at the date of the trial. There must be then be a determination as to whether it is just and equitable to alter those interests. That task is relatively simple in the matter now before me where the parties have separated and have previously enjoyed common usage of property but no longer do so. The Court must then consider the matters under section 79(4) of the Act in arriving at orders which themselves are just and equitable in their terms.[5]
[5] Russell & Russell (1999) FLC 92-877
Husband’s Allegation that Wife Removed $282,370
The husband particularises this allegation in the aide-memoire handed to the Court with his final submissions and as follows:
Deposits – Ms Gleeson’s personal account (total deposits by type):
(business omitted) business account – $74,873.64
(business omitted) staffing account – $42,478.98
Joint account – $30,100
Joint credit cards – $7,000
Centrelink payments – $95,729.17
Rental payments – $7760
Miscellaneous – $24,332.03
Additional misc. – $27,096.03
Total: $282, 370. 28
It is clear that the husband references the above as deposits into the wife’s personal account from all sources over a period of approximately 3 ½ years from October 2007.
When cross-examined as to the Centrelink payments, the wife responded that she had an entitlement to Centrelink. She says that the parties first separated in late 2007, with a short reconciliation of about three months from January 2008 and another short reconciliation for a couple of months prior to the date that the husband says they separated, being May 2011. There was little, if any, further intrusive cross-examination of either party in respect of the circumstances of separation.
The wife, however, particularises those circumstances, including the husband’s drug-taking, gambling and inconsistent work practice. I am of the view that her application for Centrelink benefits, being accepted by the Department is consistent with her version of the separation and I prefer the wife’s evidence in this regard. As such, I infer that she had a proper entitlement to Centrelink benefits in the amount quantified by the husband above.
Generally, and as to the numerous issues of credit in this matter and left for the Court’s consideration, it is important to note for the benefit of the parties that a party making an assertion of fact bears an onus to prove that assertion on the balance of probabilities.[6] That is, it is not for a party in defending such an assertion to “prove their innocence”. The onus rests with the maker of the assertion.
[6] Evidence Act 1995 s.140
Whilst the husband argues that the total sum of $282,370 should be “added back” to the pool of property, the thrust and force of the lengthy cross-examination by his counsel of the wife was on the alleged transfer of funds from the two (business omitted) accounts and the joint account and joint credit card during the relevant period and totalling $127,452.
The Court was not assisted by any forensic accounting evidence to support or explain the husband’s contention. Rather, it is clear that he relied simply on his own examination of particular entries on bank statements. The “tracing exercise” suffers accordingly through his own lack of accounting expertise, the fact that he did not keep the accounts of the business himself, and the various explanations proffered by the wife in cross-examination.
The wife was cross-examined extensively over many days and often in minute detail as to specific alleged transactions. The difficulty for the husband’s counsel and the wife was that the husband’s allegations appeared in his trial affidavit filed only a matter of days before the trial, and even that affidavit particularised only five “suspicious” transactions and mentioned others in only general terms. The result for the wife being that she was regularly taken to specific entries in bank statements, some of which were three or more years old, and asked to give a response without, in my view, proper opportunity for consideration or forensic investigation by her own legal representatives.
It is for this reason that courts make directions for the filing of trial affidavits containing evidence-in-chief, in the hope that proper forensic preparation will assist in resolving issues of disputed fact and credit and reduce the length of trials accordingly, with consequent benefit to the parties.
I note that the husband, in making his assertions and allegations does not provide evidence of any account now containing the moneys he says were removed by the wife. He provides no evidence of actual or lifestyle expenditures by the wife to corroborate his assertion.
The husband’s allegations are summarised at paragraphs 53, 54 and 55 of his trial affidavit sworn 26 July 2012. He alludes to “five transactions that are highly suspicious”:
(i) 4 January 2008, Ms Gleeson withdrew $5000 from (business omitted) (omitted) Bank account and noted as “home loan”, but has been traced to Ms Gleeson’s personal account;
(ii) 25 October 2010, $10,000 withdrawn from business account described as “investment property (omitted)”, but traced as being deposited into Ms Gleeson’s personal (omitted) Bank account;
(iii) 8 November 2010 – $10,000 withdrawn from business account, described as “home loan”, but deposited into Ms Gleeson’s personal account;
(iv) 13 July 2010, a “branch-assisted withdrawal” of $10,000 from joint (omitted) Bank account, such withdrawal requiring joint signatures, but I did not authorise;
(v) 3 May 2011, Ms Gleeson obtained a cash advance of $7000 from my Visa card. This is the day I say we separated … it is apparent Ms Gleeson, in fact, made the $7000 cash advance and deposited it into her account.
At paragraph 55 of his affidavit, Mr Gleeson deposes:
I genuinely believe there have been more substantial withdrawals made by Ms Gleeson during the penultimate years. I note that Ms Gleeson is also in receipt of Centrelink single parent payments, which have been deposited into her personal (omitted) Bank account, win (sic) the past for yeas (sic). I, in fact, have remained living at Property D until 3 May 2011.
Again, in respect of the Centrelink issue, I note that the husband adduces no evidence to his assertion as to his living arrangements. I prefer the evidence of the wife noting that she was deemed eligible for Centrelink benefits and the lack of challenge to her assertions as to the various periods of separation.
Given the difficulties and circumstances referred to above, the wife was given leave to respond to these allegations in evidence-in-chief. She gave plausible explanations to each of the “five transactions”. On occasion, she was able to point to moneys deposited into her account being later returned to the original account, with explanations. She was able to point to the purpose of the deposits such as a payment to the husband’s credit card. I accept the wife’s explanations for each of the five relevant transactions and am satisfied that she did not remove those moneys for her personal benefit.
In cross-examination the wife volunteered that her bookkeeping of the accounts of the business was independently reconciled each quarter, for the purposes of preparing BAS statements. The wife was cross-examined at some length in respect of alleged anomalies of payment of employees. It was alleged that payments were often “split” between the employee’s account and her own account. The husband adduced evidence from two brothers, Mr O and Mr C. They each disputed the wife’s claim that they had at times requested payment by cash and hence the “splitting” of their wages on the company books.
Significantly, however, each of the Mr C & Mr O brothers confirmed that they had at all times been paid their full entitlements which would seem contrary to the allegation of the wife “skimming” from their wages. Although the actual payslips were not made available to the Court, time sheets were provided. On my reading, they simply confirmed that the Mr C & Mr O brothers had not been underpaid. Noting the wife’s evidence as to quarterly independent reconciliation of the books, I accept the wife’s explanation that the nature of the business finances at times necessitated her obtaining short-term loans from her grandparents in order to meet commitments. Those loans would be repaid when moneys were received into the business and hence the use of her personal account. Although she did not adduce evidence from her grandparents, I accept the wife’s evidence as plausible and not inconsistent with her explanations otherwise.
I found the wife generally to be a credible witness. When confronted with particular allegations by the husband’s counsel, many of which were not particularised in the husband’s affidavit, the wife was candid in saying that she could not provide an explanation. She gave her evidence in an honest and forthright manner and, from my observations, attempted to be responsive to the questioning.
Given the lack of evidence as to the whereabouts or use put to this significant amount of money, the lack of forensic accounting evidence, and the wife’s various detailed and plausible explanations I am not satisfied that the husband has made out his allegation in respect of the wife “harvesting” $282,370.28 for her own benefit.
I note her specific and plausible responses to the five particularised allegations made by the husband. I am not satisfied that the Mr C & Mr O brothers’ evidence in any way assisted the husband’s allegation and find the “skimming” allegations contradicted by the admissions of the Mr C & Mr O brothers that they always received their full entitlements.
Proceeds of Sale of Truck – $50,000
The husband says that he sold a business asset being a truck and reaped $50,000. He says that he paid that money, in cash, to the wife on 19 December 2012. The wife denies that she received this money. Again, being an issue of credit, the husband bears the onus of proof on the balance of probability.
The husband deposes that on 19 December 2012 he was enjoying a Christmas barbecue with his parents and his children when he received a telephone call from the wife. He says they arranged to meet at another location and he handed her the $50,000 in a blue bag.
In the face of the wife’s denial, there are a number of evidentiary difficulties with the husband’s assertion. Despite being with his family, the husband took no witnesses to the transaction. Despite this transaction allegedly taking place on 19 December 2012, being a date a number of days into this trial, and at a time when the wife was giving her evidence and denying the husband’s assertions in respect of “skimming” the business accounts, he says he hands her $50,000 without obtaining a receipt.
When challenged as to the implausibility of such a circumstance, the husband says that he did so because he was “fearful of the wife”. He alleges variously that she had threatened to withhold the children from him and that she had threatened to kill the children if she did not receive the money. He provides these as reasons for not obtaining a receipt.
When pressed in cross-examination, the husband says that the threats were made from about October 2012. Significantly, he had entered into consent orders in respect of the children only in August 2012 and, more significantly, the wife was under cross-examination until about the 3rd or 4th of December 2012. Yet, the husband had apparently not advised his counsel of such a serious threat and circumstance, as the wife was not cross-examined in this regard. It is noteworthy that the husband was prepared to make a complaint to Victoria Police in respect of his allegation that the wife had removed $282,000 from the joint accounts, yet was not inclined to make a complaint where he says his wife threatened to kill the children. Nor did he bring any application to this Court in respect of the children.
Not only has the husband not satisfied me on the balance of probabilities as to this assertion, his version of events is implausible and, in my view, his evidence is untruthful. It is simply unfathomable that in the circumstances that faced the husband on 19 December 2012, he should hand the wife $50,000 in cash without receipt or without a witness to the transaction. I do not accept his evidence that he was fearful of the wife or that she made the threats alleged.
It is clear that the truck was sold. Notably there is evidence that that this particular truck has since been on-sold for $92,000. The evidence of the husband’s trustee in bankruptcy suggests that the proceeds of sale of the truck did not find their way to the trustee. I am satisfied, therefore, that the husband has retained those proceeds of sale but cannot be satisfied that they are limited to $50,000.
Alleged Loans from Mr V Gleeson to the Husband and the Wife
The second respondent, Mr V Gleeson, has filed two affidavits, sworn 26 July 2012 and 26 November 2012. He deposes to have loaned $158,000 to the husband and the wife and particularised in his affidavit at 26 July as follows:
27 November 2002: $50,000; 29 June 2005: $50,000. 2006: $33,000. In relation to the $33,000 paid to Ms Gleeson in 2006 – this total sum was comprised of three separate loans – $8000, $10,00 and $15,000 …
I have also advanced $25,000 to Mr D Gleeson to apply toward the purchase of a truck for his business.
In his affidavit at paragraph 12, the second respondent deposes to $27,000 having been repaid as follows:
(i) $15,000 was paid by Ms Gleeson to (omitted), for my benefit, so that I could buy a Ford from (omitted); (ii) $5000 paid directly to my sister, Ms M; and (3) $7000.
At that stage the second respondent claimed a sum of $131,000 outstanding. By the time of the final submissions his counsel conceded a further payment of $3000 having been made and that the second respondent sought to be repaid $128,000.
Given agreement that the second respondent is not statute-barred, his counsel identified three broad issues for the Court’s consideration. Firstly did the second respondent advance the funds to the husband and wife and, if so, in what quantum? Secondly, what amounts have been repaid? Thirdly, if the court accepts that the funds were advanced by the second respondent, then should he be repaid, and if so, how? The onus of proof rests with the second-respondent who is generally supported by his son, the husband.
Whilst the amounts advanced are in significant quantum, the evidence suggests that any advancements were made in cash, which appears consistent with the evidence of all three parties that they regularly conducted substantial transactions between themselves and with other parties in cash and such corroborated to a degree by the wife’s own evidence in respect of her dealings with her own grandparents.
The wife denies the debt. She concedes that she and the husband were the beneficiaries of one loan of $50,000 in 2005. She says $38,000 was spent on (business omitted) and the remainder was put to the husband’s debts (the implication being that these were his gambling debts). She says $42,000 has been repaid and the remaining $8000 forgiven by the second respondent. She says that other advancements (but not in the quantum alleged by the husband and the second respondent) made earlier in the marriage were by way of gift.
She received some support in this contention from the husband himself, who, in his affidavit sworn 26 October 2011, at paragraphs 24 and 25 says:
…although we paid rent to my father during the periods that we lived in his unit and lived with him in his home, when we moved into our home, my father gave to us a lump sum of $10,000. It was a gift to help with costs of further work to the home. My father said it was a reimbursement to us of two years of rent we had paid to him.
In addition to this $10,000 gift, my father paid a number of expenses relating to the construction of the home along the way, such (sic) the cost of the timber to build the deck at the back, steel and concrete. In total, I estimate my father contributed a further $10,000 by way of paying such expenses.
That affidavit is silent as to any loan of $50,000 to the parties, as alleged by the second respondent.
At paragraph 19 of his trial affidavit sworn 26 July 2012, the husband sets out his version of the property pool. He does not refer to any alleged debt to his father. In that affidavit, the husband repeats his evidence as to the gifts made to the parties in 2002 by his father.
Nevertheless, that same trial affidavit, at paragraph 28, states and inconsistently as to time and quantum with the evidence of his father:
Around this time (late 2004), my father, Mr V Gleeson (“my father”), loaned us $158,000 interest-free. This was to fund the purchase of real estate and also for the business. Since then, we have paid off $20,000, and accordingly, there remains a balance of $138,000 which needs to be repaid.
Much time and energy was expended at the trial in adducing evidence and on cross-examination in respect of this issue. The second respondent brought evidence from a handwriting expert, Mr N, as to the authenticity of two documents allegedly signed or authored by the wife. The second respondent produced documents purporting to be acknowledgements or “receipts” signed by the husband or the husband and the wife, acknowledging the loans.
A further document, known throughout the trial as the “(omitted) document”, which is an exhibit at A33, purports to be in the hand of the wife and consistent with the second respondent’s evidence as to gross advancements of $158,000 but showing repayments of only $20,000.
It is relevant also that this complex issue involving much disputed fact and argument as to credit also reference the husband’s bankruptcy. In March 2013, and whilst this trial had been continuing for a number of days, the husband became bankrupt on his own debtor’s petition. As required, he lodged a sworn affidavit of his financial affairs, including his liabilities.
Section 265(1)(a) of the Bankruptcy Act1966 (Cth), requires full disclosure of all property on oath[7]:
[7] This is by way of a statement of affairs as required by s55(2)(b) Bankruptcy Act 1966
Failure of bankrupt or debtor to disclose property etc
(1) A bankrupt:
(a) shall fully and truly disclose to the trustee all of the property of the bankrupt, and its value;
(b) shall fully and truly disclose to the trustee particulars of any disposition of property made by him or her within the period of 2 years immediately preceding the date on which he or she became a bankrupt;
(c) shall not refuse or fail to comply with a direction by the trustee to deliver to the trustee property in the possession of the bankrupt, being all or part of the property of the bankrupt;
(ca) shall fully and truly disclose to the trustee such information about any of the bankrupt's conduct and examinable affairs as the trustee requires;
(d) shall not refuse or fail to tell the trustee where the books (including books of an associated entity of the bankrupt) relating to the bankrupt's examinable affairs may be found;
(e) shall not refuse or fail to comply with a direction by the trustee to deliver to the trustee books (including books of an associated entity of the bankrupt) that are in the possession of the bankrupt and relate to any of the bankrupt's examinable affairs;
(f) shall not omit any material particular from a statement relating to any of the bankrupt's examinable affairs;
(g) shall, if he or she knows that a person has lodged a proof of debt in the bankruptcy that is false, forthwith inform the trustee of the fact; and
(h) shall give to the trustee a full and proper explanation of any loss or depreciation of any of his or her assets or part of any of his or her assets that occurred within the period of 2 years immediately preceding the date on which he or she became a bankrupt.
Penalty: Imprisonment for 1 year.
This includes full disclosure of any debts, with section 265(4) stating:
A person who, after the presentation of a petition on which, or by virtue of the presentation of which, he or she becomes bankrupt:
b)conceals a debt due to or by him or her
is guilty of an offence and is punishable, upon conviction, by imprisonment for a period not exceeding 1 year.
Significantly, the husband did not disclose any debt to his father, yet he comes to this Court arguing the existence of such a liability. The obvious inferences available to me are:
a)That there is no debt owing to Mr V Gleeson; or
b)that the husband did not believe there was a liability to his father, such as was being or would be pursued against him.
Two principles are therefore invoked. Firstly, with reference to what is often referred to as the “Elias principle”[8], a party having made a representation of fact so as to gain an advantage from doing so, then it is open to a court in subsequent proceedings under s.79 of the Act to decline to accept from that party any evidence contradicting those transactions. It is proper to observe, however, that later decisions and prominently by Chisholm J in Jordan & Jordan[9] view “Elias” as not providing a “principle” in the sense of creating an estoppel. Nevertheless, a prior inconsistent statement must remain relevant to any finding of fact or credit. I must therefore consider this assertion of the husband and the second-named respondent in light of the husband’s evidence as a whole, together with his credit generally, in determining the status of what he alleges to be a debt due and owing to his father, but not one disclosed to his trustee in bankruptcy.
[8] Elias & Elias (1977) FLC 90-267
[9] (1997) FLC 92-736
Secondly, I must consider whether the advancements, if any, made to the parties by the second respondent are legitimate debts, in the sense of being legitimately pursued for repayment.
The Full Court in Biltoft & Biltoft[10]considered the position of unsecured creditors and:
…(a) acknowledged that a general practice had developed and that the normal procedure for determining the values for the assets of the parties is to deduct from the gross value the total liabilities, including unsecured liabilities;
(b) held that the “normal procedure” in relation to unsecured liabilities was neither absolute nor prescribed by statute (but the same cannot be said for secured liabilities). There are circumstances where it is open to the Court to discount or disregard an unsecured liability, including, eg, a liability which is vague or uncertain, unlikely to be enforced or unreasonably;
(c) held that there is no requirement that the rights of an unsecured creditor must be considered and dealt with prior to the Court making an order under sec 79 , nor is there a rule of priority as between a creditor and a spouse – the rights of the creditors must not be ignored, rather, they must be balanced against the rights of the spouse;
(d) stated obiter that there is an obligation on both parties to disclose the existence of any significant creditors because, if the ability of a creditor to recover its debt is likely to be affected by the making of any order, then notice of the proceedings must be given to the creditor.
[10] (1995) FLC 92-614
Generally, Biltoft is authority for the principle that it is open for the Court to disregard debts which are vague or speculative or which are not being, or are unlikely to be, enforced. Consequently, I find the failure of the husband to declare to his trustee in bankruptcy the alleged indebtedness to his father as weighty and persuasive of either there being no real indebtedness or, alternatively, that any such debt, being intra-family, is not realistically to be enforced or pursued.
The weight I attached to this circumstance is enhanced by the fact that the husband and the second respondent argued before me in concert against the wife for repayment of the debt from sale of the former matrimonial home.
I find such evidence and circumstance to be persuasive, if not fatal, against the argument of the second respondent and the husband. It is proper, however, that I comment on the other evidence adduced in respect of the issue of the indebtedness of the husband and the wife to the second respondent. Firstly, there are inconsistencies permeating the evidence of the husband and the second respondent in respect of these alleged loans.
Mr V Gleeson says that he loaned the husband and the wife $50,000 on 27 November 2002 “to assist the parties to purchase real estate”. Mr V Gleeson’s bank passbooks for that time were produced and are now exhibits. They do not show withdrawals, either singularly or in total, around that time consistent with his evidence.
Further, the husband and the wife agree that their real estate was purchased prior to November 2002. At paragraph 13 of his affidavit sworn 26 October 2011, the husband deposes:
In or about 1998, when Ms Gleeson and I were in a relationship, but had not yet moved in together, we purchased jointly the block of land at Property D. We purchased the land for the price of $39,000 plus stamp duty and other associated fees. We both had savings at the time, and we paid the purchase price, stamp duty and associate fees in exactly equal shares. We did not have to borrow any money to finance the purchase.
The wife and the husband effectively agree with this evidence, but which is contrary to that of Mr V Gleeson.
The second respondent’s bank passbooks do not corroborate in quantum or contemporaneity his claims of later advancements to the parties. Those passbooks show simply a propensity by Mr V Gleeson to make substantial withdrawals, but such being unexplained and certainly not explain in the terms of his alleged loans to the husband and the wife.
Mr V Gleeson produced to court a number of documents purporting to be alleged receipts or acknowledgements signed by the husband or the husband and the wife. They are exhibits A28-A31. In my view, rather than corroborating the argument of the second respondent and the husband, those documents raise doubts as to the veracity of their evidence generally. For instance, a document dated 29 June 2005 appears in three different forms, each allegedly signed by the husband and the second respondent on that same day, but significantly, in my view, not signed by the wife. No explanation was given by either the husband or the second respondent as to why multiple documents were prepared and executed, supposedly on the same day and in different form. Generally, no explanation was given as to the reason for the creation of the documents themselves, within an apparent environment of regular intra-family cash loans or advancements. There was also inconsistency in the evidence of the husband and the second respondent as to the purpose of the alleged advancements. I have referred above to the conflicting evidence of the husband and the second respondent as to the alleged initial loan of $50,000. There is equally confusion as to the purpose of the later loans, variously as for a truck or a container, and inconsistent with other evidence as to the purchase of a truck for the business.
There does exist some evidence, however, which is supportive of the argument of the second respondent and the husband. Exhibit A32 is the “(omitted)” document. It purports to be in the hand of the wife. She admits that it resembles her handwriting. She does not admit, however, to being the author. That document is not signed. The document sets out transactions consistent with the argument of the second respondent as to the separate loans and could also be corroborative of part-repayment of $20, 000.00. Mr N, the handwriting expert, examined the document. His opinion is that the wife was the author. Mr N had been provided with sample signatures and writings of the wife. He gave his opinion as to his highest standard of “beyond reasonable doubt”. He gave evidence to a similar standard of opinion in respect of a signature of the wife on a document purporting to be a “binding contract” from 27 November 2002 purporting to evidence an interest-free loan of $50,000 from Mr V Gleeson and Ms Z to the husband and the wife. That document contains signatures purporting to be those of the husband, the wife and Ms Z. The document is not signed by Mr V Gleeson. As mentioned above, there are numerous other inconsistencies in the evidence as to this alleged transaction.
Mr N was cross-examined extensively as to the specific examples of the wife’s handwriting and signature. He has considerable expertise in his field dating from 1976. His evidence complies with the requirements of the well-known authority of Makita (Australia) Proprietary Limited v Sprowles[11]. It is clear that Mr N’s consideration revolves around comparisons of disputed signature/handwriting with samples provided and with emphasis on “differences”, “variations” and “similarities”. He withstood intrusive cross-examination and held his opinion at is highest standard[12].
[11] (2001) 52 NSWLR 705 at 743-4
[12] See annexure “B1” of report of 18 October 2013 from Scientific Document Services Proprietary Limited to Dr Stretch Kontel J. (Exhibit O1)
I am satisfied generally that Mr N was a credible witness. It is important, however, to consider such evidence only within the context of all of the evidence. It is evidence of opinion, albeit with some expertise. It is evidence to be considered and to have weight contributed, but is not in itself definitive. It is well-settled that expert or scientific evidence is no less matter-of-fact within the province of the determiner of fact and it is for the judge, as the determiner of fact, to estimate the reliance to be placed on expert evidence, and once admissible, it becomes merely a question of value or weight to be attributed within the context of all evidence given and adduced in respect of any particular issue. The court is not bound to accept uncontested evidence but should not disregard it capriciously. Rather, such evidence is considered against, and may be rejected, if there is other evidence to support a different finding of fact.
I repeat specifically for this issue that the party asserting a fact has an onus of proof to the standard of “on the balance of probabilities” to prove that fact. It is not for the other party to prove “innocence” or to disprove the assertion. No onus rests on the party defending the assertion.
In conclusion, I am persuaded in this issue by the circumstances of the husband’s bankruptcy set out above. It is frankly disingenuous of him to act in concert with his father in seeking repayment of an alleged loan whilst not disclosing such debt to his trustee in bankruptcy. Such a circumstance satisfies me, in any event, that the husband did not consider any indebtedness to his father (if any) to be enforceable or legitimately pursued by his father. It follows then that if the second respondent presses any claim against the parties for repayment then his recourse rests with his son’s trustee in bankruptcy.
The remainder of the evidence as to this issue does not, in any event, persuade me on the balance of probabilities that there is a debt or an enforceable debt owing by the husband and wife to the second respondent. It is true that there is some evidence that supports his claim, and notably that of the handwriting expert. Nevertheless, those very documents examined by Mr N are themselves inconsistent in numerous particulars with other sworn evidence emanating from the second respondent and the husband. It is not proper that I consider the handwriting evidence in isolation and, as such, it does not satisfy me on the balance of probabilities. Consequently, I do not find that there is a debt outstanding to the second respondent of $128,000 or at all.
Consequently, I find the property pool settled in the terms of paragraph 3 of these reasons.
Contributions
The evidence of the husband in his affidavits is suggestive of a roughly equal initial contribution by the parties. He notes that both contributed pre-cohabitation to the purchase of a block of land at Property D. He says that the wife had purchased a motor vehicle for $25,000 in 1998 from her own savings and that he owned two motor vehicles of roughly similar value to that of the wife. He concedes that the wife owned the (omitted) and (omitted) shares currently in her possession and now valued at $54,600. Notably, an argument flagged by the wife’s counsel to quarantine these shareholdings on the “Gold Bar” principle was not eventually pursued. Nevertheless, accordingly, her initial contribution was slightly superior in quantum to that of the husband but to considered in the context of the flux of time and the value of the pool of property.
The wife in her affidavit material alludes to contributing $13,000 to the wedding and is suggestive of her being in a slightly better financial position than the husband at that time. In light of the complex issues dealt with above as to the property pool, little emphasis was put on the testing of evidence of contributions. Mr Robinson, counsel for the wife, in his final submissions summarised the contributions as follows, and I adopt these submissions:
In relation to contributions, there have been significant contributions over a reasonably long marriage. Your Honour had discussed with me throughout the proceedings and I was reminded when I read – re-read the transcript about whether the Kennon argument was in or out and it did a little bit of hokey pokey. It’s clearly out now, but part of that factual matrix which was relevant at least to the question of cash payments was the behaviour that occurred between the husband and the wife and my client simply gave evidence about the assaults that she had been subject to and the threats that she had been subject to. I don’t seek to make a Kennon argument out of it in this case.
Nonetheless, these parties both contributed, I say significantly, to the build up of the asset pool in the way I described earlier, the husband worked in the business, doing the practical side of things, the wife was the bookkeeper. Now, the husband says in his submissions, look, she put nothing in. She did nothing for that period. She lies when she said she made those payments in 2008 to 2011. The wife says, quite simply, “I made those payments in the way I always made those payments” which was the business had responsibility to meet the mortgages and the loans in relation to the business equipment. I made sure those payments were made. She otherwise maintained her account. The income from the Property H investment property went in there. The mortgage was paid out of it and she received the payments from Centrelink.
On a consideration of all of the evidence, I am satisfied that the husband and the wife made equal contributions until their separation by way of direct financial, indirect and homemaker and parent contributions. In making these findings, I also take into account the gifts made to both of the parties jointly by the husband’s parents as set out in the husband’s affidavit. As mentioned above, I cannot be satisfied as to the alleged later loans made by the husband’s father. The wife does concede, however, that a sum of $50,000 was advanced in 2005 but which I accept has substantially been repaid.
The wife claims a significant superior contribution post-separation. I am satisfied on the evidence that the parties were separated or substantially separated from about September 2007 but with two short periods of reconciliation. I am satisfied that the wife had the primary care of the children for the majority of that time. The evidence before me suggests that the husband has been remiss in his obligations to pay child support and that primary responsibility falls on the wife to this day and that she has been burdened with that responsibility for more than six years. The husband was not, however, challenged on his evidence that he provided some financial assistance for the children by way of purchase of school uniforms, clothing and the like. Generally, the wife has, on the evidence, maintained the family and such assets of the parties that remain being primarily the former matrimonial home. She has, of course, had the benefit of living in that home with the children and the mortgage liability has stagnated. On a strictly formal basis, I would consider a loading of 10 per cent in favour of the wife as appropriate given the significant post-separation contributions made by her over the lengthy period since September 2007 and the current nature and quantum of the property pool.
Section 75(2) Factors
The wife has the ongoing responsibility for the care of the children. She does so without any real financial assistance from the husband. The children are aged just 13 and 10 years. The wife is likely to have this responsibility throughout their minority. On the evidence before me, I have little confidence that the husband will voluntarily contribute or contribute substantially to the children’s needs.
The wife has been away from the workforce for some years by reason of her responsibilities to the children. Her most recent employment was within a family business. Whilst she has some skills and experience as a bookkeeper, she has no formal qualifications. It follows that her re-entry to the workforce would be difficult.
The husband, on the other hand, has considerable experience and skills as a (omitted). There is real concern on the evidence as to his failure to maintain the business and hence his own substantial income. His own evidence was of an income of in excess of $100,000 per annum early in the marriage as an employee. No medical evidence was adduced as to any inability for him to obtain gainful employment. Indeed, to the contrary, there is evidence that the husband has recently enjoyed employment in his field as a (omitted). There is evidence that supports the contention of Mr Robinson of counsel for the wife in his final submission in the following term:
Yes, from a man who, if you look at the history up until then, ran a successful and productive business.
And it is also our case, not only did he conduct the business, but he effectively cannibalised the business, kept those things to himself and continued operating post-that. So it was a conscious decision not just to try and get rid of those creditors, but also to keep himself in business doing what he knows how to do, but lie to the court about it.
The evidence of the husband himself as to his recent employment was vague and unsatisfactory. I am satisfied that he has obtained some employment. Evidence from Mr O and Mr C is suggestive of the husband being substantially employed with them. Photographs tendered by the wife as exhibit A37 suggests that the husband may have retained (business omitted) equipment outside of his disclosure to his trustee in bankruptcy and continued to be self-employed, albeit under another or bogus business name. Frankly, the husband’s statement that his sister now operates a (omitted) business with a similar name and using similar equipment was unconvincing.
Generally, I am satisfied that the husband has a greater capacity than does the wife for remunerative employment or self-employment.
There are a number of matters which I must consider under section 75(2)(o) of the Act under the heading “any fact or circumstance, which in the opinion of the court, the justice of the case requires to be taken into account”.
I make these findings generally as to credit. Where such matters of credit arise, I prefer the evidence of the wife. She gave her evidence in a candid and forthright manner. She was able to make admissions against interest, for instance, when questioned by the husband’s counsel, Ms Treyvaud, in respect of discrete particulars of transactions between business and personal bank accounts. She on occasion responded that she could not provide explanations being a response which I found to be honest and candid. To the contrary, I found the husband to be evasive to a fault in his evidence. His evidence was often inconsistent or contradictory. He was regularly unwilling or unable to provide reasonable responses when confronted with facts contrary to his case such as evidence of his continued employment. I did not generally find the husband to be a witness of the truth.
I have considered above the circumstances of the sale of a truck. I am satisfied that the husband did not pay the wife $50,000 on 19 December 2012 as he claims. I am satisfied on the husband’s own evidence, that the truck has been sold and therefore satisfied that the husband has retained the proceeds of sale for his own use and in a sum of at least $50,000. In fact, there is evidence now before me, and undisputed, that this truck has been onsold for $92,000.
The wife alleges that the husband had a substantial gambling habit during the course of the marriage. He does not admit to have had a problem with gambling. I prefer the evidence of the wife which is corroborated by that of Ms T who gave clear and essentially uncontested evidence as to the payment from her business towards a number of the husband’s gambling debts. Surprisingly, in light of the lack of admission by the husband, his counsel’s cross-examination Ms T and the wife was effectively an admission of his gambling. That is, it was not put to either witness that Mr Gleeson was not a gambler. Rather, the cross-examination simply suggested (correctly) that there was no evidence particularising winnings and losses similarly, Mr V Gleeson conceded that he had “helped Mr D Gleeson with his gambling debts”. He conceded that he was “embarrassed by Mr D Gleeson’s gambling”.
Within the context of a successful and remunerative (omitted) business, I am satisfied that Mr D Gleeson did have gambling problems during the relationship. Documents were tendered through Ms T which evidence betting accounts. Not unusually in such situations, however, I am unable to quantify the success or failure of Mr D Gleeson’s gambling in dollar terms. I am able, however to be satisfied on the balance of probabilities that it contributed to the downturn and ultimate demise of the (omitted) business.
There were also issues raised throughout these proceedings and from the wife’s initial application in respect of the husband’s use of the drug “ice”. Little cross-examination was carried out in this respect. The allegation was put to the husband. He denied it, but admitted to “using cannabis, but not for 18 years”. I am unable, therefore, on the evidence to make any findings in this regard generally and specifically as to any impact on the property pool of the parties.
The wife’s counsel urges me to find both that the husband has retained plant and equipment of the business outside of his disclosure to his trustee in bankruptcy and that he remains substantially employed or self-employed in the (omitted) industry. During his cross-examination, the husband was presented with photographs of houses showing (omitted) erected on the exterior. The husband recognised the homes as being owned by acquaintances of his “(omitted)” and “(omitted)”. The Mr C & Mr O brothers in their cross-examination volunteered that they had recently been working with the husband. They did not elaborate in detail as to the amount of work or regularity of work. Mr O volunteered that the husband recently transported (omitted) in his ute or in his brother’s ute. The husband conceded in the face of the photographs and the wife’s claim to have seen him on work sites that he had engaged in some recent employment. When pressed, the husband claims that the (omitted) belonged to his sister who now apparently, and according to him, operates a (omitted) business under a name uncannily similar to the business name of (business omitted).
The affidavit of the husband’s trustee in bankruptcy discloses (omitted) equipment with a market value of $8000 and an “auction realisation” of only $5500. The evidence of the parties generally is of significant expenditure on (omitted) equipment and certainly indicative of a much higher value in quantity than that realised by the trustee in bankruptcy.
The husband, during his cross-examination, was presented with his recent residential tenancy agreement which obligates him to rental in a sum of $600 per fortnight when his disclosed income from Centrelink unemployment benefit is only $680 per fortnight. The husband’s explanation for him being able to live on a disposable income of $40 per week was generally unsatisfactory in that he said only that he received “assistance from eating at mum and dad’s”.
I am satisfied on the balance of probabilities, and taking into account my comments generally as to credibility and my findings in respect of the husband retaining the proceeds of sale of the truck, and together with the unsatisfactory responses given by the husband in cross-examination, that he has retained at least a quantity of (omitted) equipment and that he has continued to be self-employed in the industry. In this sense, I am able to draw an inference against the husband from the principles in Jones v Dunkel[13] contrary to the husband in that he did not see fit to seek leave to call evidence from his sister in rebuttal to the assertion made by counsel for the wife in cross-examination that the (omitted) allegedly in possession of the sister and a company run by her was, in fact, a veil or sham for the husband’s continued operation of a (omitted) business.
[13] (1959) 101 CLR 298
In conclusion, and confirming that recent High Court and Full Court authorities obligate me to deal with circumstances of the retention of assets under section 75(2)(o), I am satisfied that the husband has retained the proceeds of sale of a truck at a minimum of $50,000 together with some (omitted) equipment. I calculate the pool of property currently standing and including superannuation to have a value of just $353,979. Thus it is that $50,000 in isolation represents some 12.5 per cent of the pool should it have been disclosed and available for inclusion in that pool and leaving aside the other assets for which I am unable to attribute value.
In conclusion and on the basis of the wife being the primary parent for the children and having this role yet for a number of years, together with her being solely, or almost solely, responsible for their financial support, she could reasonably expect an adjustment in her favour under section 75(2) of the Act from the property pool. I also note my findings as to the husband’s superior earning capacity and my findings under section 75(2)(o). Consequently, I am content that justice and equity would be served by the wife receiving an adjustment under the section 75(2) factors of approximately 30 per cent. Together with my determination after contributions, I am therefore satisfied that the wife should retain approximately 90 per cent of the property pool and the husband should retain approximately 10 per cent. In doing so, I do not differentiate between superannuation entitlements and tangible assets. I have received no submissions from any party in respect of a splitting order in relation to the husband’s superannuation entitlement. I note my findings in respect of the parties’ employment capacities. I note that the wife seeks to retain the home for the benefit of herself and the children of the marriage. In all of the circumstances, I am of the view that the husband should retain the totality of his superannuation entitlement without any splitting order.
I intend to distribute the property of the properties as follows:
Wife to retain:
a)Home, $445,000
i)Mortgage, $184,154
b)Wife’s shares, $54,000
c)Chattels, $7000.
Net, $321,846.
Husband to retain:
a)Superannuation, $28,000
b)Proceeds of sale of Property H, $3,979
Net, $31,979.
Total pool, $353,979.
On my calculation this would necessitate a cash payment by the wife to the husband of just $3,305.
I consider just and equitable pursuant to the requirement under section 79(2) of the Act this to be a distribution and gives consideration to the circumstances of the marriage and the parties now, together with considerations of contribution and the relevant matters under section 75(2) of the Act and the relatively small property pool.
In light of my particular findings and their impact on the jointly owned assets, I intend to order that a copy of these reasons be provided to the husband’s trustee in bankruptcy.
Due to any lack of contest or submissions to the contrary, I will order that the wife return to the husband any items of his personalty particularised in the orders he seeks set out in these reasons.
I certify that the preceding one-hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Date: 17 April 2014
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