Grange and Grange and Ors
[2018] FamCA 30
•30 January 2018
FAMILY COURT OF AUSTRALIA
| GRANGE & GRANGE AND ORS | [2018] FamCA 30 |
| FAMILY LAW – PROPERTY – whether the husband and wife have any beneficial interest in real property held by third parties – where the wife asserted that the husband’s parent gifted the property to them during the course of the marriage – where the gift was unperfected – where the husband transferred the title of another piece of real property to one of the adult children of the marriage – where the wife sought to have that disposition set aside – whether the husband and wife had any beneficial interest in proceeds of sale of a business licence – where those proceeds of sale had been paid to the husband’s mother following the sale of the licence – where the husband’s mother was a party to the proceedings but failed to participate – property adjustment – thirty year marriage – seven children – where the parties operated a business – contributions. |
| Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth) |
| ANZ Banking Group v Harper (1988) FLC 91-938 Blair & Ors & Perpetual Trustee Co Ltd v Curran (Adam’s Will) (1939) 62 CLR 464 Cerini & Cerini [1998] FamCA 143 Dickons & Dickons [2012] FamCAFC 154 Egri & Anors v DRG Australia Ltd (1988) 19 NSWLR 600 Foda v Foda (1997) FLC 92-753 Giumelli v Giumelli (1999) 196 CLR 101 Gollings & Scott (2007) FLC 93-319 Grange & Grange [2014] FamCA 81 Grange & Grange [2015] FamCAFC 10 Hankinson v De Vries and Ors (2013) 50 Fam LR 79 In the Marriage of Weir (1993) FLC 92-338 Jackson v Goldsmith (1950) 81 CLR 446 Kennon v Kennon (1997) FLC 92-757 Kuligowski v Metrobus (2004) 220 CLR 363 Lovine & Connor and Anor (2012) FLC 93-515 Port of Melbourne Authority v Anshun Proprietary Limited (Anshun Case) (1981) 147 CLR 589 Queensland Trustees Limited & Ors v Commissioner of Stamp Duties (Q.) (1956) 96 CLR 131 Ramsay v Pigram (1968) 118 CLR 271 Riches v Hogben [1985] 2 Qd R 292 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms Grange |
| FIRST RESPONDENT: | Mr Grange |
| SECOND RESPONDENT: | Ms A Grange |
| THIRD RESPONDENT: | Ms B Grange |
| FILE NUMBER: | ROC | 580 | of | 2011 |
| DATE DELIVERED: | 30 January 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATES: | 4, 5, 6 November 2015; Last written submissions received 22 September 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Shoebridge |
| SOLICITOR FOR THE APPLICANT: | Madden Solicitors |
| THE FIRST RESPONDENT: | In person |
| THE SECOND RESPONDENT: | In person |
| THE THIRD RESPONDENT: | No appearance |
Orders
Pursuant to s 78(1) of the Family Law Act 1975 (Cth) (“the Act”) it is declared that the amount of $1,024,600 of the total amount of $1,129,060 received by the Third Respondent on or about 8 November 2008 in respect of the sale of Sales Permit No. … was received by the Third Respondent as bare trustee for Mr Grange and Ms Grange.
Pursuant to s 78(2) of the Act it is ordered that the Third Respondent pay to the trust account of the solicitors for the wife, Madden Solicitors, within thirty (30) days of the date of these Orders the amount of $1,024,600 to be held by those solicitors on trust for Mr Grange and Ms Grange (“the trust fund”).
That as and by way of property settlement pursuant to s 79 of the Act:
(a)The wife is beneficially entitled to $512,300 of the trust fund and is entitled to retain that amount to the exclusion of the husband;
(b)The husband is beneficially entitled to $512,300 of the trust fund and is entitled to retain that amount to the exclusion of the wife;
(c)Each party shall be solely entitled to the exclusion of the other to all property and chattels in the possession of such party as at this date including any jewellery, furniture and furnishings;
(d)Each party shall 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;
(e)That the injunction granted by Order of this Court on 18 March 2013 be varied only for the purpose of the Third Respondent complying with the declaration in paragraph 1 and the consequential order in paragraph 2 and pending such compliance the injunction remain in full force and effect.
Each party shall do all acts and things reasonably necessary to give effect to these Orders.
If any party refuses or neglects to sign or execute and return any document necessary to give effect to these Orders within seven (7) days of a written request to do so then a Registrar of the Brisbane Registry of the Family Court of Australia is appointed pursuant to s 106A of the Act to sign or execute such document on behalf of that party upon lodgement of such document and the filing of an affidavit of the requesting party or a solicitor on behalf of the requesting party as to the said neglect or refusal.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Grange & Grange and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: ROC 580 of 2011
| Ms Grange |
Applicant
And
| Mr Grange |
First Respondent
And
| Ms A Grange |
Second Respondent
And
| Ms B Grange |
Third Respondent
REASONS FOR JUDGMENT
Ms Grange (“the wife”) and Mr Grange (“the husband”) are engaged in property settlement proceedings consequent upon the breakdown of their approximately 30 year marriage, which produced seven now adult children.
Ms A Grange (“Ms A”) is the parties’ fourth child. As outlined in detail below, the wife claims in these proceedings that the real property known as D, the legal title to which is held by Ms A, is property to which the parties to the marriage are beneficially entitled. Ms A, and the husband, dispute the wife’s claim in this respect. Ms A is joined to the proceedings as second respondent. Ms A participated in the proceedings as a party, being present throughout the course of these proceedings, and participated as a witness.
Ms B Grange (“Ms B”) was a necessary party to the proceedings on the basis of the wife’s claim, outlined in further detail below, that the husband and wife were gifted, and are thus beneficially entitled to, a real property known as the S property together with certain proceeds of sale of what is known as an “allocation” which proceeds were, post-separation of the parties, received by Ms B and retained solely by her. As will be further discussed, despite the wife’s claim apparently directly affecting her, and despite ample opportunity to so do, Ms B took no active part in these proceedings at all, either as a party or as a witness.
I interpolate here that the wife’s claims for relief in respect of the S property are clouded by matters not the subject of any evidence which ought to have been established in the face of such claims. For example, as at 2011 (the date of the most recent search adduced in evidence by the wife) the S property was legally owned by the company G Pty Ltd and other evidence discloses that that company was deregistered in 1999. More significantly, the relevant title search shows the property is subject to registered mortgages in favour of the ANZ Bank. There was no evidence as to the amount of any indebtedness with respect to those mortgages and moreover no valuation evidence of the S property. Even accepting that Ms B took no active part in the proceedings, together with what will be discussed about the husband’s failure to make full and frank disclosure, subpoenaed records from the ANZ Bank would have established whether and what debts remain owing with respect to the S property by way of registered security.
It ought be noted that the factual and legal issues surrounding the wife’s claims concerning Ms A and Ms B respectively are complex. Whilst Ms A and the husband were united as one in opposing the wife’s claims, the fact is that neither the husband nor Ms A had legal representation in the proceedings and neither of them has any legal training or experience relevant to their task of representing themselves in these proceedings. As will be further referred to, without any disrespect to either the husband or Ms A, this feature was productive of considerable difficulty in having those parties focus upon, and address, what was relevant to the wife’s claims. Such difficulty was compounded to an extent by Ms A’s efforts to not confine her engagement to the issues in the proceedings directly affecting her, but to her efforts also to assist the husband in his case. The difficulty referred to was further compounded by the difficulties in identifying with precision the wife’s claims for relief from time to time. There is an obvious disconnect between the relief claimed in her applications for final orders as compared with the orders sought in the final submission stage of the trial.[1]
[1] Exhibit 1
It is readily apparent that the breakdown in the marital relationship had the consequence of a broader division of the family in terms of some of the children aligning themselves with the wife and others, including Ms A, with the husband.
This dynamic finds reflection also in Supreme Court litigation, referred to further below, which took place between 2008 and 2011. The subject matter of that litigation was the beneficial ownership of a real property known as “T property”. The daughter Ms H claimed in those proceedings to be beneficially entitled to that property which was in her legal ownership. Her claim in that respect was not disputed by the wife. However, her claim was disputed by the husband. The husband’s attempt to dispute the claim was also supported by Ms A. In the result, the Supreme Court of Queensland delivered judgment upholding Ms H’s claim, determining that Ms H was beneficially entitled to that property.
An unusual dynamic in this case, as regards the wife’s claim in these proceedings concerning the property D and the consequent effect upon Ms A is, by way of overview, that whilst the wife did not dispute Ms H’s claim in the Supreme Court proceedings she obviously contests Ms A’s beneficial ownership of D in these proceedings. Conversely, whilst the husband vehemently opposed Ms H’s claim in the Supreme Court litigation he embraces the outcome of that litigation, contrary to the case he there mounted, as supporting Ms A’s case in these proceedings.
Of course, any entitlement of Ms A in D has nothing to do with, nor is it affected by, the outcome of the Supreme Court litigation. Each of these cases necessarily falls to be considered on their own facts and merits. However, it seemed clear throughout these proceedings that the husband and Ms A adopted a stance to the effect that the outcome of the Supreme Court litigation ought be treated as determinative of the wife’s claim in these proceedings concerning D/Ms A’s interest in D.
A further complicating feature of this litigation, or at least of the husband’s approach to it, is that the joinder of Ms A and Ms B as necessary parties, by reason of the nature of the wife’s claims directly affecting their interests respectively (such joinder having been opposed by the husband); is that the husband adopted the stance that the wife’s father, and other adult children ought be joined as parties to these proceedings. Supported by reasons delivered on 20 February 2014, Forrest J made orders dismissing the husband’s application that those parties be joined, essentially on the conclusion that such parties were not necessary parties as they were each unaffected by any order sought in the proceedings (see Grange & Grange [2014] FamCA 81). On 10 February 2015 the Full Court of this Court refused the husband’s application for leave to appeal that determination (see Grange & Grange [2015] FamCAFC 10). Despite those outcomes, and despite the husband failing to identify or articulate at any time any legitimate case or basis upon which the interests of additional parties could properly be affected by orders in these proceedings, a constant theme of the husband’s case and presentation was that it was somehow unfair to him that Ms A and Ms B were joined as parties to these proceedings, whilst such other persons were not. I record the finding that at no point of this litigation was there identified any legitimate basis for the joinder of other persons as parties (see Hankinson v De Vries and Ors (2013) 50 Fam LR 79 at [14] and following).
Because of my extant delay to that point, after the last instalment of evidence and submissions in the case, on 31 July 2017 I caused the parties to be notified that in the event that any party sought to reopen the evidence before judgment was delivered, an application for that purpose ought be filed. That resulted in the husband filing an Application on 22 August 2017 to reopen the evidence and for the wife to subsequently file an Updated Financial Statement; and on 8 September 2017 further oral evidence was received when the wife was
cross-examined on her Updated Financial Statement. At the conclusion of that hearing directions were made as to the filing of any further necessary submissions and the last of such submissions were received by the Court on 22 September 2017.
The submissions filed by the husband repeat some familiar themes that he advanced throughout the course of the proceedings, including at the interim stages. The husband consistently contended from time to time throughout these proceedings that there was unfairness to him in having insufficient time, in this particular instance, time to prepare the cross-examination of the wife he undertook on 8 September 2017 directed to her Financial Statement filed on 6 September 2017. As to that, it seemed that the husband was preoccupied with the notion that the wife earns far more than she discloses or has some hidden assets or resources. As to the husband’s complaints about fairness, I am confident that review of the transcript of these proceedings discloses that at all times the Court made adequate allowances for the feature that the husband and Ms A were self-represented. However, such allowances do not extend to permitting the husband to attach to his submissions a selection of documents which were objected to by the wife as these were not otherwise in evidence nor were they put to the wife in cross-examination. I will later discuss my reservations about the wife’s evidence and record my findings concerning her true earnings. That aside, I record that I do not have regard to any submissions not founded in evidence and I also do not intend to address submissions wholly irrelevant to the issues falling for determination.
More generally as to my own delay in delivering judgment, I must first record my unreserved apology to the parties for that delay.
It is necessary, given my delay, that it also be recorded and emphasised that the findings recorded in these reasons as to credit are the findings noted by me contemporaneously with the evidence when given during the course of the trial. Thus, whilst I have re-read affidavits and documentary exhibits in the trial for the purpose of finalising these reasons; as well as reading the trial transcript (and some transcript references appear in these reasons) that process has not been the foundation for the credit findings recorded in these reasons.
Whilst due allowance must be made for the feature that, as already noted, each of the husband and Ms A were self-represented in these proceedings, which involved legal issues of complexity; and, as already referred to, it was difficult at times to have the husband in particular focus upon relevant issues, as distinct from perceived (by him) unfairness of the proceedings; it will be seen within the following discussion that the Court is not satisfied that the husband met his obligation to give full and frank disclosure of documents and information as prescribed by the Family Law Rules 2004 (Cth) and as articulated in relevant authority.
As will also be discussed, the resulting difficulties of that for both the wife and the Court were compounded by the election of Ms B to take no active part in the proceedings.
Whilst, as will be outlined and discussed, there were many issues agitated about the identification of property to be included in the s 79 assessment, the fundamentally important issue in dispute is this: according to ordinary common law and equitable principles do the parties to the marriage (or either of them) have any interest in:
a)The D real property; or
b)The real property referred to as the S property; or
c)The sale proceeds of what is known as the allocation associated with the business previously conducted on the S property.
The parties’ respective cases
The wife contends[2] that two real properties known as the S property and D respectively are rightfully properties of she and the husband. She seeks that they be transferred to her to be held on trust for she and the husband. She seeks the option to retain either of these properties and to pay to the husband half of the value of whichever property she might elect to retain. Alternatively, she contends that the S property and D ought to be sold and the net proceeds of sale be equally divided between she and the husband.
[2] Exhibit 1
The wife also seeks the payment from the husband and Ms B of $505,550, being the amount the wife characterises as one half of the net proceeds of sale of the allocation, and failing any such payment, the wife be entitled to offset any sum the husband is otherwise entitled to receive.
Notably, the wife’s case concerning the S property is confined to gift. That is, the wife did not advance any case for any other equitable remedy, her case being limited to the contention that the S property was gifted to the husband and the wife by the husband’s father.
With respect to the husband, it is difficult to determine precisely what it is he is seeking by way of property adjustment and whether or to what extent his stated position is simply the converse of the wife’s claims for relief. The Case Information document filed by him in advance of the trial sets out the following:
1.That the Applicant Wifes whole case be dismissed on the grounds of: Tit for tat, biaos and discrimination based on scornful hate and vendetta. The application fails to prove basic fact needed to form a case. The application does not make up a meritable case.-
2.That the court strike out the Final Orders sought by the Applicant Wife numbered; 1, 2, 3, 4, 5, 6, 7, 8, 12, 13, 14 on the basis that this court cannot make these orders as this court cannot overturn the judgements of 3 other courts inc the full court of the family court.-
3.If achievable in the somehow alternative; the asset taken from targeted Respondents to go through the applicant lawyers be no more than 1% of the net asset and the targeted Respondents retain no less than 99% of the their asset on the grounds that it totally and meritably belongs to the targeted Respondents.-
4.That the Applicant Wife/lawyers be responsible for any stamp duty, capitol gains tax, GST or any other costs associated with any transfers resulting from the Amended/further/Initiating Application and this whole Court matter as a result thereof.-
5.Within 30 days of the date of this order the Applicant [Ms Grange]/lawyers pay to the Respondents the sum of $505,550.00.-
6.Within 30 days of the date of this order the Applicant Ms Grange pay to the 3rd Respondent [Ms B Grange] the full value of the items.-
7.The Applicant [MS GRANGE] incur 50% in the debt that the first Respondent [MR GRANGE] bears as a result of the, Applicants and the first Respondents, company and partnership and T property house and land including lawyer bills and other associated costs.-
8.That the Applicant Wife [MS GRANGE] incur spousal maintenance payment to assist the Respondent Husband [MR GRANGE] and their children.-
9.That the applicant pay Reparation for kidnaping, ransoming and the 7 years captivity.-
10.That the applicant pay Ms A for doing the applicants job.-
11.The Applicant Wife [MS GRANGE] pay; the costs of the husband [MR GRANGE], the costs of the second Respondent [MS A GRANGE], the costs of the third Respondent [MS B GRANGE] and the costs of the fourth Respondent Witness [MR M GRANGE], of and incidental to these proceedings on an indemnity basis.-
12.That the first, second, third Respondents and fourth Respondent Witness do not pay any costs of the Applicant, or any other incidental costs resulting from the amended/initiating application.-
(Errors and omissions in original)
The central thrust of Ms A’s case is that she assumed legal and beneficial ownership of the D real property with the knowledge and consent of both of her parents. The essence of her case is that she was gifted the property and that the wife acknowledged that Ms A was entitled to be gifted the property at least in part in recognition of her efforts in the family business.
The Third Respondent
Ms B was joined to the proceedings by an order made on 18 March 2013. She has not participated in the proceedings in any way. She did not file an affidavit, in her own case or as a witness in the case of either of the other respondents, nor did she appear at any hearing throughout the course of the proceedings.
This was so despite the feature that the orders made on 18 March 2013 included an order (Order 4) in the following terms:
Pursuant to sections 114 and 90AF of the Family Law Act 1975 (Cth) an injunction issue restraining [Ms B Grange] from dealing with or disbursing the monies received by her upon the sale of the …Allocations attached to the property situated at [V Street, D Town].
I am satisfied that Ms B was squarely on notice of the proceedings and the likely consequences of her non-participation and am satisfied that she has been afforded adequate opportunity to be heard, even though she evidently elected not to take up this opportunity.
I am satisfied that the wife’s solicitors provided Ms B with relevant filed documents throughout the course of the proceedings.
On 19 February 2013, Ms B was served personally with the Amended Initiating Application, and affidavits of the wife (filed 14 November 2011 and 13 March 2012) at her property at N Street, O Town. At this time she was also provided with correspondence which recorded that an application had been brought to join her to the proceedings which application was listed to be heard on 18 March 2013.
On 26 February 2013 Ms B spoke with the wife’s solicitors by telephone during which conversation she was advised of the consequences of not appearing in Court and advised to obtain independent legal advice. The wife’s solicitors have had no other direct contact from Ms B.
On 18 March 2013 the application in respect of Ms B’s joinder was heard and determined by the Court. Ms B did not appear.
Correspondence was sent by the wife’s solicitors to Ms B at the same N Street property on no less than 15 occasions between May 2013 and 29 October 2015. None of this correspondence has been returned to their offices.
Ms B did not appear at the final hearing.
The husband, who it was obvious maintains communication with his mother, confirmed during cross-examination that:[3]
a)Ms B was aware of the proceedings;
b)She was aware that an aspect of the proceeding sought to have her repay the approximately $900,000 she received from the sale of the allocation;
c)The husband had suggested to Ms B that the matter was of such significance that she ought to participate in the proceedings; and
d)Ms B told the husband that she was not going to participate in the proceedings.
[3] Transcript 25.01.2016, p 31 from l 36
The husband suggested that Ms B’s reluctance to participate was as a consequence of “an absolute phobia about courts. She has always said you don’t take your family to court”.[4]
[4] Transcript 25.01.2016, p 32, l 19-22
I am satisfied that Ms B was on notice of the matters before the Court and elected not to take the opportunities afforded to her to participate in any way in the proceedings.
As will be referred to where relevant, issues affecting Ms B or about which she might reasonably be supposed to have knowledge, thus fall to be determined on the available inferences where relevant, consequent upon her non-defence of claims by the wife and her non-participation in the proceedings.
The husband’s non-disclosure
The wife mounted a serious challenge to the effect that the husband failed to comply with his duty to make early, full and continuing disclosure of all information relevant to the issues in the case, as prescribed by Chapter 13 of the Family Law Rules 2004 (Cth). Based upon that challenge it was the wife’s contention that in accordance with authority the Court should not be unduly cautious about making findings in favour of the wife (In the Marriage of Weir (1993) FLC 92-338 (“Weir”)).
In my judgment there is considerable substance in the wife’s challenge in this respect, and the husband’s failure in this respect is not confined to, but best exemplified in his late production, after the trial had commenced, of two unsigned Deeds concerning the S property which will be more fully discussed in addressing that topic. Related to this topic, I reject contentions by the husband to the effect that he was denied an adequate opportunity to present his case.
The Full Court of this Court commented upon the approach the Court should take in cases of non-disclosure, observing in Weir (supra) at 79,593-79,594:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black v Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings of this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunt (1986) FLC 91-759 and Mezzacappa v Mezzacappa (1987) FLC 91-853.
…
It seems to us that once it has been established that there has been deliberate non-disclosure, which follows from His Honour’s findings in this case, then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party.
On 16 October 2015 the husband filed an Undertaking as to disclosure by which he swore to have carried out and complied with the duty of disclosure.
On the second morning of the trial the husband and Ms A produced two documents which later became Exhibits 8 and 9. Those documents form a significant pillar of the husband’s case concerning the S property and comprise two “Deeds of Variation” which purport to vary the terms of earlier Deeds of Gift. It was uncontroversial that those documents had not been produced prior to that day. In cross-examination by counsel for the wife, the husband gave the following evidence in respect of how those documents came into his possession:[5]
[5] Commencing at Transcript 25.01.2016, p 26, l 29
[Counsel for the wife]: Can you tell his Honour how did that document come to be in your possession?---
[The husband]: Could not tell you whether it’s being at the S or – I don’t know.
[Counsel for the wife]: Somehow when you came to court, on the first day of trial back in November, that document appeared in your hand in order to provide a copy to the court. How did the document come to be – how did you come to be aware of the document prior to the trial?---
[The husband]: I don’t know how I came into possession of it. It would have been filed somewhere or whether it was with my dad’s stuff or ours, I don’t know.
[Counsel for the wife]: Is it the case that you didn’t discover this document? Did someone else find it?---
[The husband]: It could have been [Ms A] who found it.
[Counsel for the wife]: You see, you’ve tendered it to the court. You’re suggesting that this is a pretty important document, aren’t you, this deed of variation?---
[The husband]: This?
[Counsel for the wife]: Yes?---
[The husband]: Yes.
[Counsel for the wife]: It didn’t strike you – you can’t remember when you found this very important document and thought, “I’ve got to take this to court”?---
[The husband]: Yes. But I can’t remember when.
[Counsel for the wife]: Well, do you agree with this. You hadn’t made it known to anyone until the first day of trial, had you? You hadn’t produced this document before then, had you?---
[The husband]: Not – I can’t recall. I don’t think so.
[Counsel for the wife]: So it stands to reason, doesn’t it – you must have – did you discover it sometime very soon before the trial?---
[The husband]: Most likely, yes.
[Counsel for the wife]: And because otherwise you would have disclosed it much earlier, wouldn’t you?---
[The husband]: Well, it only says what I’ve been saying to you all along.
[Counsel for the wife]: And what I asked you was if you had discovered this document much earlier in time, you would have disclosed it to [Ms Grange] and her solicitor much sooner than the first day of trial, wouldn’t you?---
[The husband]: I couldn’t ever get to see this solicitor.
[Counsel for the wife]: That’s not my ---?---
[The husband]: And I tried – I’ve told [Ms Grange] all this.
[Counsel for the wife]: [Mr Grange], I can’t help but suspect you’re deliberately avoiding my question. If you had discovered this document much earlier in time, you would have disclosed it to [Mr Grange] and her solicitor much earlier than the first day of trial, wouldn’t you?---
[The husband]: No.
[Counsel for the wife]: Okay. So it is a possibility, then, that you’ve discovered this document at some time well before the trial, say, and just not disclosed
it?---
[The husband]: Possible.
[Counsel for the wife]: All right. Is it possible that you’ve got other documents on the same topic that you haven’t disclosed?---
[The husband]: No. That’s not what this – well, that there’s – yes. Well, that’s not correct. There’s stacks, I guess, of - - -
[Counsel for the wife]: Have you found this deed which is dated 8 January 1997 that’s referred to in exhibit 9, being a transfer and deed of gift?‑‑‑
[The husband]: No.
[Counsel for the wife]: Have you looked for it?---
[The husband]: No.
[Counsel for the wife]: Do you know where you would start to look for that document?---
[The husband]: No.
[Counsel for the wife]: There’s an office at [S], isn’t there?---
[The husband]: Yes.
[Counsel for the wife]: The office would be a reasonable place to start looking for that document, wouldn’t it?---
[The husband]: No.
[Counsel for the wife]: Have you searched the office for this deed that’s referred to, dated 8 January 1997?---
[The husband]: No.
[Counsel for the wife]: Is that because you know it’s there somewhere and you just don’t want to find it because you don’t want to be put in the position where you’ve got to produce a document that you don’t like the contents of?---
[The husband]: No.
[Counsel for the wife]: Why else wouldn’t you look for such an important document, [Mr Grange]?---
[The husband]: Because it doesn’t exist.
[Counsel for the wife]: So do you - - -
[His Honour]: It doesn’t exist, you say?---
[The husband]: Mmm.
[His Honour]: How do you know that?---
[The husband]: I don’t believe it exists, that’s why I wouldn’t look for it.
I reject the proposition that the husband adequately and fully explained his late production of the subject documents. In my judgment it is more probable than not that the husband had failed to disclose relevant documents in his possession or control concerning the central issues. Other references will be made to what appear to be fundamental aspects of the case where the husband’s failure to disclose is conspicuous.
I do not accept, as the husband contends,[6] that he was denied any opportunity to properly put his case by the manner in which he provided evidence in chief or re-examination. He asserts that he had “trouble” giving evidence in chief and that despite his attempts to “arrange this” in his re-examination he continued to have “problems”. He asserts he was denied the opportunity to “say in [his] words what had happened and be asked questions around what really happened as compared to only be questioned around the convenient presumptions of the Applicant lawyer”.
[6] Written submissions of the husband provided to the Court on 5 May 2016, page 34
The husband filed extensive affidavit material in these proceedings, as did Ms A. His affidavit in chief consisted of 46 pages of prose plus extensive annexures. He and Ms A filed numerous further affidavits on 2 November 2015, only a matter of days before the commencement of the hearing.
While I accept that the wife was granted leave to file a further affidavit on 5 November 2015, the second morning of the trial, that affidavit was brief, consisting of only six pages. In light of the late filing of this material, the husband was afforded an opportunity to give further oral evidence in chief when his case was opened in response to this material.
The husband’s case did not open until 25 January 2016, nearly two months later. On that day, the husband was then afforded an opportunity to give further evidence in chief in relation to the wife’s late filed affidavit. His evidence in chief proceeded for an hour,[7] during which time he was given an opportunity to respond or comment upon every paragraph of that further affidavit. The husband’s very broad assertion that he was denied procedural fairness does not make clear what further opportunity he needed or what further evidence he might have led if he were afforded such an opportunity. When asked directly what additional evidence he would seek to lead at the commencement of his evidence the husband was not able to say[8] and suggested he would not know “until the court goes on further”.
[7] Transcript 25.01.2016, p 8- p 21
[8] Transcript 25.01.2016, p 10, l 7
It is not evident from the evidence the husband gave at the time (or from a review of the transcript of his evidence in chief) that the husband had any difficulty understanding the evidence he was responding to. I am not satisfied that he was denied any opportunity to properly put his case before the Court. He was provided with ample opportunity.
Relevant facts
The wife was born in 1960, and is now 57 years old.[9]
[9] Affidavit of the wife filed 18 July 2014, paragraph 2
The husband was born in 1959,[10] and is now 58 years old.
[10] Affidavit of the wife filed 18 July 2014, paragraph 4
The husband and wife married in 1978.[11]
[11] Affidavit of the wife filed 18 July 2014, paragraph 5
They have seven children together, all of whom have now reached the age of majority:[12]
a)Mr J, born in 1978;
b)Ms P, born in 1980;
c)Ms H, born in 1983;
d)Ms A, born in 1988, the Second Respondent;
e)Ms Q, born in 1992;
f)Mr M, born in 1995; and
g)Ms R, born in 1998.
[12] Affidavit of the wife filed 18 July 2014, paragraph 5
The wife contends that they separated in about August 2008,[13] making theirs a relationship of some 30 years. While the husband accepts that the wife “left” in 2008,[14] he contends there was a period of reconciliation of about six weeks from April 2013[15] and that the “family” separated on or about 14 May 2013.[16] As will be further discussed, I did not find the wife’s evidence on some issues convincing, nor her presentation as a witness compelling the conclusion that she was an entirely reliable witness. However, my reservations in these respects were generally greater with respect to the husband and his evidence. On this particular issue I found that as between the parties the wife and her evidence was persuasive and I find that, as the wife contends, the parties finally separated in about August 2008.
[13] Affidavit of the wife filed 18 July 2014, paragraph 8
[14] Affidavit of the husband filed 21 January 2015, paragraph 9
[15] Affidavit of the husband filed 21 January 2015, paragraph 9
[16] Affidavit of the husband filed 21 January 2015, paragraph 9
Shortly after their marriage, the husband and wife moved to live at V Street D Town,[17] (“the S property”) being a property owned and operated by the husband’s family at that time.
[17] Affidavit of the wife filed 18 July 2014, paragraph 21
The S property was purchased by the husband’s late father, Mr Grange Snr (“Mr Grange Snr”), in about 1965, via his company G Pty Ltd,[18] and continued to be legally owned by that entity at the time of the trial.
[18] Affidavit of the wife filed 18 July 2014, paragraph 30
The paternal family operated a business from the S property.
The S property had a number of dwellings erected on it and various members of the paternal extended family lived there for various periods.[19]
[19] Affidavit of the wife filed 18 July 2014, paragraph 21; Affidavit of the wife filed 5 November 2015 at paragraphs 4-7
The parties’ eldest child, Mr J, was born 1978 shortly after their marriage.[20] Their second child, Ms P, was born in 1980.[21]
[20] Affidavit of the wife filed 18 July 2014, paragraph 5
[21] Affidavit of the wife filed 18 July 2014, paragraph 5
In or about 1981, the husband and wife commenced operating F Contractors via a partnership they had established.[22] It is not entirely clear on the state of the evidence before the Court, what that entity’s business activities comprised, nor how successful it was.
[22] Affidavit of the wife filed 18 July 2014, paragraph 22
The wife deposes to F Contractors (presumably the business name) being deregistered in 1990.[23] The wife asserts that upon deregistration, various assets held by the partnership in the operation of the business remained at the S property and she is unaware of what occurred with them thereafter.[24] She seeks to have the value of those assets, as estimated by her, included in the property of the parties for the purposes of these proceedings.
[23] Affidavit of the wife filed 18 July 2014, paragraph 23
[24] Affidavit of the wife filed 18 July 2014, paragraph 23
During the operation of the partnership, the wife attended to the bookwork for the business, assisted with the maintenance of the machinery, and undertook the domestic duties such as housework, cleaning, cooking, mowing the yard, gardening, and care of the children.[25]
[25] Affidavit of the wife filed 18 July 2014, paragraph 102
The parties had two more children in 1983 (Ms H) and 1988 (Ms A) respectively.
In 1992, Mr J, the parties’ eldest child, then about 14 years old, left the S property and thereafter returned only for visits.[26]
[26] Affidavit of the wife filed 18 July 2014, paragraph 112
Their second child Ms P ran away from the S property in 1993, when aged about 13 years.[27] There is no evidence that Ms P ever returned.
[27] Affidavit of the wife filed 18 July 2014, paragraph 113
At about this time, the wife became aware of concerns held by the Department of Child Safety in respect of the children’s care and, fearful they would be removed from her care, fled with those children who then remained living at the S property.[28] The wife moved frequently between friends’ houses for approximately two years. She says that during this time, the husband knew her and the children’s whereabouts and would visit them “from time to time”.[29]
[28] Affidavit of the wife filed 18 July 2014, paragraph 113
[29] Affidavit of the wife filed 18 July 2014, paragraph 114
There is no evidence before the Court as to what the husband did during this period. There is also no evidence before the Court as to what the financial arrangements were between the parties at this time, or how the parties were in fact surviving financially. On the chronology, the evidence does not reveal how the family survived between the cessation of their contracting business in 1990 and their operation of the business, which, as will be referred to, commenced at some time between 1995 and 1998.
The wife and three children returned to the S property in about 1995.[30]
[30] Affidavit of the wife filed 18 July 2014, paragraph 115
In 1995, those of the children who had been attending school were withdrawn from formal education. The wife attempted to undertake some home schooling of them although this was limited.[31] It is not clear what arrangements, if any, were put in place for the formal education of the younger children who had not commenced school by 1995.
[31] Affidavit of the wife filed 18 July 2014, paragraphs 123 and 124
It is uncontentious that in or about 1998, the parties took over the operation of the business on the S property. There is a dispute between the parties as to what happened with respect to the ownership of the S property at this time. The wife contends that the husband’s father gifted them the S property and the business operated thereon, while the husband asserts they were afforded an option to purchase the S property but, unable to raise sufficient finance, they never did so and a transfer never took place.[32] Despite this dispute, the S property remained legally owned by the husband’s father’s company at the time of the trial. More will be said of this dispute below.
[32] Affidavit of the husband filed 21 January 2015, paragraphs 32 and 33
By the end of 1998, the parties’ youngest two children had been born, and five children under the age of 15 remained living at the S property.
In 1999, Mr Grange Snr, the husband’s father, passed away. Pursuant to the terms of his will[33] the husband became entitled to receive the real property known as “D”. The husband contends that this bequest was conditional upon the husband “hold[ing] the property on trust for a child or children who stay at home and show interest”.[34] The wife disputes this.
[33] Affidavit of the wife filed 18 July 2014, Annexure TDG6
[34] Affidavit of the husband filed 21 January 2015, paragraph 54
In 2002, the parties purchased real property known as the “T property”. That land was acquired in the name of their daughter, Ms H. As earlier referred to, subsequent to the marital separation the parties were subsequently involved in litigation in the Supreme Court with Ms H to determine the beneficial owner of the T property.
On 25 March 2004, administration of the estate of the husband’s father was finalised and legal title to D was transferred to the husband.[35]
[35] Affidavit of the wife filed 18 July 2014, paragraph 55
In 2008, the parties’ separation occurred when the wife left the S property with the parties’ three youngest children, who were then aged 16, 13 and 10. They moved to U Town.
Ms A, who was 20 years old at the time, remained living with the husband at the S property and continues to do so.
In late 2008, the parties sold the raw material allocation previously held at the S property.[36] The operation ended with that sale and there is evidence that such operation was, in any event, significantly reduced in the period leading up to the 1998 sale. The proceeds of sale of the allocation were paid to Ms B. The parties are in dispute as to the proper entitlements to these funds. The wife asserts that the whole of the $900,000 net proceeds of sale ought to be recouped from Ms B and considered property of the parties, whereas the husband asserts that the husband and wife never owned the S allocation and the proceeds of sale are rightfully owned by his mother. More will be said of this dispute below.
[36] Affidavit of the wife filed 18 July 2014, paragraph 69
Between 2008 and 2011, the husband and Ms H were embroiled in litigation in relation to the beneficial ownership of the real property referred to as “T property”. In 2011 the Queensland Supreme Court determined that the T property belonged to Ms H.
On 6 April 2009, the husband transferred D to the parties’ daughter, Ms A. The wife seeks to have this transfer set aside and for the property to form part of the property interests of the parties or either of them for consideration in these proceedings.
The son Mr M returned to live at the S property in or about 2013 and has remained there with his father.
The wife commenced working post-separation. There is limited evidence as to the husband’s position in terms of employment or capacity for gainful employment in the post-separation period. It was the wife’s case that the husband had at least an equal capacity as her to undertake external gainful employment had he chosen to do so.
The property of the parties
The parties’ voluntary separation brought to an end their common use of property and any implicit assumption as to the use of this property throughout the relationship. Having regard to these existing property interests, I am satisfied that it is just and equitable to make an order adjusting the property interests of the parties.[37]
[37] Stanford v Stanford (2012) 247 CLR 108 (at [42])
There is a vast gulf between the parties both as to the identity and value of any relevant property interests to be considered as reflected in the following table which includes references to those differences. The areas of dispute will be addressed below.
| Owner-ship | Description | Wife’s value | Husband’s value[38] | |
| Assets | ||||
| 1. | V Street, D Town Queensland (“the S property”) | 750,000[39] | 400,000[40] (belongs to the Third Respondent) | |
| 2. | “D” V Street, D Town Queensland | 500,000[41] | $NIL “D Is Ms A’s as per Order of the Supreme Court of Queensland”[42] | |
| 3. | “T property” W Street, D Town | E250,000[43] | ||
| 4. | X Street, Y Town Queensland | E250,000[44] | ||
| 5. | L Street, Y Town Queensland | E500,000[45] | ||
| 6. | Proceeds of sale: G (QLD) Pty Ltd S Allocation (sold 2008) | 1,000,000[46] | “We Never Had An Allocation neither did G (Qld) Pty Ltd”[47] | |
| 7. | F Contractors – plant and equipment | E80,000[48] | Nil 750[49] | |
| 8. | G (Qld) Pty Ltd – Materials and plant and equipment | E50,000[50] | ||
| 9. | Grange Family Trust (machinery, , tools and equipment) | E100,000[51] | Nil “Never Existed”[52] | |
| 10. | H | Household and personal effects | 5,000[53] | 350[54] |
| 11. | H | Motor vehicle 1 | 200[55] | 100 (“The Wife Can Have It, if she will go away and leave us alone”)[56] |
| 12. | H | Motor vehicle 2 | 500[57] | “I Do Not Have A Motor Vehicle 2” |
| 13. | W | Wife’s household and personal effects | 5,000[58] | |
| 14. | W | Motor Vehicle 3 | 6,500[59] | |
| 15. | W | Motor Vehicle 4 | 2,500 | |
| Notional addbacks | ||||
| 16. | Funds removed by the wife from the bank account of Mr & Ms Grange | 700[60] | ||
| 17. | Funds received by the wife from the wife’s disposition of property “to a Black-market Dealer in 2012” | E100,000[61] | ||
| Liabilities | ||||
| 18. | W | Madden Lawyers | E100,000[62] | |
| 19. | Joint | Total other liabilities | E127,350 | |
| 20. | Joint | “Debt recorded with BR trustee” | 272,650[63] | |
| Superannuation | ||||
| 21. | W | “Superannuation as of 18-7-17” | 31,016[64] | |
[38] Affidavit of the husband filed 21 January 2015, page 8
[39] Affidavit of the wife filed 18 July 2014, paragraph 20
[40] Balance sheet filed 18 July 2014
[41] Affidavit of the wife filed 18 July 2014, paragraph 20
[42] Affidavit of the husband filed 21 January 2015, paragraph 20
[43] Affidavit of the husband filed 21 January 2015, paragraph 20
[44] Affidavit of the husband filed 21 January 2015, paragraph 20
[45] Affidavit of the husband filed 21 January 2015, paragraph 20
[46] Affidavit of the wife filed 18 July 2014, paragraph 20
[47] Affidavit of the husband filed 21 January 2015, paragraph 20
[48] Affidavit of the wife filed 18 July 2014, paragraph 20
[49] Balance sheet filed 18 July 2014
[50] Affidavit of the wife filed 18 July 2014, paragraph 20
[51] Affidavit of the wife filed 18 July 2014, paragraph 20
[52] Affidavit of the husband filed 21 January 2015, paragraph 20
[53] Affidavit of the wife filed 18 July 2014, paragraph 20
[54] Affidavit of the husband filed 21 January 2015, paragraph 20
[55] Affidavit of the wife filed 18 July 2014, paragraph 20
[56] Affidavit of the husband filed 21 January 2015, paragraph 20
[57] Affidavit of the wife filed 18 July 2014, paragraph 20
[58] Affidavit of the husband filed 21 January 2015, paragraph 20
[59] Affidavit of the husband filed 21 January 2015, paragraph 20
[60] Affidavit of the husband filed 21 January 2015, paragraph 20
[61] Affidavit of the husband filed 21 January 2015, paragraph 20
[62] Affidavit of the husband filed 21 January 2015, paragraph 20
[63] Affidavit of the husband filed 21 January 2015, paragraph 20
[64] Affidavit of the husband filed 21 January 2015, paragraph 20
I have declined to include reference to certain “assets” asserted by the husband such as “wage” and “redundancy package” as neither of these items are in fact property for the purposes of the Act, particularly where there is no evidence to suggest the wife was ever made redundant and therefore ever received a redundancy package.
In resolving the significant disputes between the parties to the marriage both as to items of property which a party asserts is to be included, and the value of any such interest included, it is appropriate to take the approach that the party making the assertion bears the onus of proving it. As will be seen, that burden mainly falls upon the wife given the claims she mounts with respect to substantial property interests to which she claims some beneficial entitlement of the parties to the marriage or either of them.
Items 1 and 6: The S property and the allocation
On or about 11 July 1966, the company G Pty Ltd was incorporated and registered and Mr Grange Snr, the husband’s father, was named as a director.[65] It appears that at all material times Mr Grange Snr was the controlling shareholder of the company.
[65] Affidavit of the wife filed 18 July 2014, Annexure TDG2, page 1
The S property was purchased by G Pty Ltd, in the 1960s.[66] It was an operating business which had a number of residential dwellings erected on it in addition to S itself.[67]
[66] Affidavit of the husband filed 21 January 2015, paragraph 30
[67] Exhibit 10
In or about 1978, following the parties’ marriage, they moved to live in one of the dwellings at the S property. The wife accepts that she had little, if anything, to do with the operation of the G business prior to 1996, other than mowing the grass around some of the dwellings on the land.[68] It is not entirely clear what role the husband played in the operation of the G business prior to the mid-1990s. The wife concedes that the parties were never required to contribute financially in respect of their accommodation at the S property over the many years that occurred. She acknowledged in cross-examination that the parties, whilst Mr Grange Snr was alive, never paid rent for the accommodation they were provided with, nor for electricity usage.[69]
[68] Affidavit of the wife filed 5 November 2015, paragraphs 8 and 9
[69] Transcript 06.11.2015, p 127, l 41 and following
On 21 May 1976, each of the husband and his brother, Mr I Grange, were also appointed as directors of G Pty Ltd.[70]
[70] Affidavit of the wife filed 18 July 2014, Annexure TDG2, page 2
In late 1995,[71] the “Present Day Market Value of the business G Pty Ltd, [including] the stock at the date of Valuation, the Allocation, the associated plant and equipment, the real estate occupied by the business buildings and all the improvements thereon” was $500,000.[72] That value consisted of:
a)The business and licence, $100,000;
b)Stock on hand, $22,000;
c)The allocation No. … of …, $105,000;
d)Plant and equipment, $30,500;
e)Land and improvements, $250,000.
[71] Inspection took place on 22 October 1995, and the valuation is dated 31 December 1995
[72] Exhibit 10
Mr Grange Snr was diagnosed with emphysema at some unknown time and became unable to work the business. At some time between 1995[73] and about 1998[74] the husband and wife took over the operation of the business located on the S property.
[73] Transcript 06.11.2015, p 82, l 29
[74] Affidavit of the wife filed 18 July 2014, paragraphs 32 and 103
The wife says that following Mr Grange Snr’s diagnosis, the paternal family engaged in a series of discussions from time to time in relation to his property and how it was to be treated upon his death[75] which resulted in she and the husband being gifted the S property and the business.
[75] Affidavit of the wife filed 5 November 2015, paragraphs 19 to 24
I observe here that the wife’s evidence was, at best, vague and imprecise as to when and how many such discussions took place; who participated in such discussions; the nature and content of the discussions as to “who said what” and any conclusions or resolutions made, and by whom, in such discussions. This was so despite the wife receiving, on the first day of trial, the indulgence of having the opportunity to provide further affidavit evidence, it having been pointed out to the wife and her legal representatives by the Court that her trial affidavit was most unsatisfactory in terms of supplying sufficient details or particulars.
The husband accepts that the family took over the operation of the business when his father fell ill[76] however he rejects any suggestion that the husband and wife acquired ownership of the S property or of the allocation.[77] He says that he and the wife could have taken up the option given to them by Mr Grange Snr of purchasing from Mr Grange Snr (via his company) the S property and business for $500,000,[78] that they worked the business and attempted to save money to purchase the S property[79] and business but in the event they were never able to afford such a purchase, and they purchased the real property known as the T property instead.[80]
[76] Affidavit of the husband filed 21 January 2015, paragraph 33
[77] Affidavit of the husband filed 21 January 2015, paragraph 31
[78] Affidavit of the husband filed 21 January 2015, paragraph 40
[79] Affidavit of the husband filed 21 January 2015, paragraph 42
[80] Affidavit of the husband filed 21 January 2015, paragraphs 32 and 33
The wife’s evidence in respect of this alleged gift was vague and inconsistent.
In her affidavit of evidence in chief,[81] the wife asserted that there was an agreement “by [Mr Grange Snr] that [the husband] would take over the [S] property prior to [Mr Grange Snr’s] will being drawn up as [Mr Grange Snr] wanted to get out of the [business] due to his ill health”.[82] She also asserts that there was an agreement between her, the husband and Mr Grange Snr, to the effect that the S property and another property known as “D” had a value of $500,000 “taking into account all the work [the husband and wife] had already put into the business”.[83]
[81] Filed 18 July 2014
[82] At paragraph 33
[83] At paragraph 33
The wife does not particularise any conversation in which such an agreement was reached, nor does she give any evidence as to what she and the husband “had already put into the business”. Indeed any reference to contributions made by her and the husband to the business to that time are in direct contrast to assertions made by her in other evidence that she had little, if anything, to do with the S property prior to 1996[84] (an assertion entirely consistent with her evidence that she left the S property with the children for approximately two years from about 1993[85]) and that the husband derived income from working with heavy equipment owned by she and the husband but would “help with mechanical repairs to the machinery at the [business]” when needed.[86] Later in that same affidavit, the wife similarly makes reference to a verbal agreement between Mr Grange Snr, the husband and her in relation to the transfer of the S property.[87] Again, that reference is stated in the form of a conclusion about an agreement existing, rather than providing evidence of facts from which such a conclusion could be drawn.
[84] Affidavit of the wife filed 5 November 2015, paragraph 8
[85] Affidavit of the wife filed 18 July 2014, paragraphs 113 to 115
[86] Affidavit of the wife filed 5 November 2015, paragraphs 11 and 12
[87] Affidavit of the wife filed 18 July 2014, paragraph 41
The wife also asserts in that affidavit that she and the husband understood Mr Grange Snr had reached a similar agreement with the husband’s brother Mr I Grange, that he would receive a farm owned by Mr Grange Snr as it was of approximately equal value (to the S property and business) at that time. Again, that assertion is unsupported by any sufficient statement of facts or particulars upon which the assertion is founded.
I interpolate here that the wife’s version that there were correlative agreements to gift property between the parents and the son Mr I, on the one hand; and the parents and the husband (or husband and wife) on the other hand, designed to achieve each of the sons receiving property of equivalent value, appears to be met with the hurdle of what Mr Grange Snr’s will actually provides. Pursuant to Clause 3(c) of the will, Mr Grange Snr made the following testamentary dispositions:
3. I GIVE DEVISE AND BEQUEATH all my estate both real and personal of whatsoever kind and wheresoever situate or over which I may have any power of appointment disposition or control unto and to the use of my Trustee UPON the following Trusts:-
…
(c) I FURTHER DIRECT my Trustee:
…
(ii) to observe and be bound by all of the terms and conditions of the Lease dated 15 January 1997 over my property described as Lot … on … County of [AA] Parish of [D Town] and the option to purchase granted therein to my son [MR I GRANGE] AND IN THE EVENT that my son [MR I GRANGE] lawfully exercises his option to purchase my property at [BB Town] more particularly described as Lot … on … [County of AA] Parish of [D Town] pursuant to the option to purchase contained in the Lease dated 15 January 1997 then I DIRECT my Trustee to execute the Contract of Sale submitted by my son [MR I GRANGE] with the notice of exercise of option and I FURTHER DIRECT my Trustee to execute all transfer documents and to otherwise complete any such sale pursuant to the said Contract and to further execute any Mortgage documentation necessitated pursuant to the terms of the Contract and to ensure that the Mortgage is registered over the said property secured by same expeditiously.
AND in the event that my son [MR I GRANGE] does not take up this option to purchase then I FURTHER DIRECT my Trustee to sell all my right title and interest in my property more particularly described as Lot … on … County of AA Parish of D Town and to divide the balance proceeds of sale as follows:
(i)As to the sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) to my son [MR I GRANGE] for his sole use and benefit absolutely PROVIDED ALWAYS that should he predecease me or fail to survive me for a period of thirty (30) days leaving a child or children surviving me then such child or children shall take and if more than one equally the share and interest in my estate which his, her or their parent would have taken had such parent not so died as aforesaid; and
(ii)As to the balance thereafter to fall into the rest and residue of my estate.
…
Furthermore, a valuation obtained by Mr Grange Snr in late 1995, assessed the value of the S property, the business operated thereon and its stock in trade to have a value of $500,000. There is no evidence about the value of the D property at that time (or indeed at the time of the trial).
During the course of the proceedings, the wife was given leave to file a further affidavit. In that document the wife raises for the first time that there had been earlier discussions between her and the husband about moving away from the S property but that the husband had dissuaded her of that idea by telling her that “one day [they] would be receiving the [business]”[88]. It is beyond the bounds of credulity, in my judgment, that if such a statement had been made by the husband to the wife (in respect of which statement the wife seeks to impress the implication of gift) that the wife would have neglected to include this in her initial lengthy affidavit. That aside, even if such a statement had been made by the husband, it is not necessarily inconsistent with the husband’s version that the husband and wife were given the option of working towards purchasing the S property.
[88] Affidavit of the wife filed 5 November 2015, paragraph 16
The wife also asserts in that later affidavit (but not in her initial lengthy affidavit) that following Mr Grange Snr’s diagnosis of emphysema, there were a number of family meetings concerning how Mr Grange Snr’s property was to be dealt with upon his death, a number of which became heated. Importantly, the wife does not recall Mr Grange Snr reaching a decision at any of the meetings she attended.
She asserts that a number of years later[89] she had a conversation with the husband during which he told her that his brother, Mr I, had “elected to take the [farm] and that [they] were going to get the [business]”.[90] That is, the wife does not depose that she herself was a party to any conversation with Mr Grange Snr or to any agreement to the effect that the property would be transferred to them, whether as a gift or otherwise. Moreover, the statement attributed to the husband is not necessarily inconsistent with the husband’s case about the parties having an option to purchase the property.
[89] Affidavit of the wife filed 5 November 2015, paragraphs 31 to 35
[90] Affidavit of the wife filed 5 November 2015, paragraph 36
The wife continues that she and the husband subsequently sought accounting advice. She says that it was during the course of that meeting that she learned “for the first time” that the S property and allotment were to be transferred as a gift.[91] The wife does not give any other direct evidence in her affidavits which would suggest that there were earlier discussions or indications that the parties were to pay for the S property or allotment. Indeed the first time she gives any such evidence is during the course of her cross-examination. Again, the wife’s evidence comprises conclusions rather than facts upon which conclusions can be drawn. Moreover, on this version, the scenario of a gift post-dates whatever earlier discussions took place about purchase or an option to purchase.
[91] Affidavit of the wife filed 5 November 2015, paragraphs 42 to 43
The wife then recounts in her later affidavit a meeting at a solicitors’ office at which the husband and his parents were both present, during which all present at the meeting signed some documents in relation to the transfer of the S property. The wife asserts that it was during this meeting that the solicitor raised with Mr Grange Snr his liability for capital gains tax and that it would be necessary for Mr Grange Snr to make a payment to an accountant in respect of capital gains tax. I interpolate here to observe that it seems doubtful that at least the conversation about capital gains tax referable to the S property occurred as suggested by the wife, because the capital gains tax regime did not apply to assets acquired prior to 1985, and the S property was purchased by Mr Grange Snr via his company in the 1960s. In any event, if there were such a discussion it is, again, not inconsistent with the husband’s version that the husband and wife were given the option to purchase the S property.
The wife deposes that after this meeting she and the husband took over the S and operated it as if it were their own.[92]
[92] Affidavit of the wife filed 5 November 2015, paragraph 52
The wife accepted during cross-examination that:
…There was talk of that [the husband and wife purchasing the S property] for a start, and then it was discussed about – because the father had another block of land that had a farm on, and the way he tried to even things out was he’d give that one so much and give this one equivalent of that amount which is the 400,000 that he took off as way of gift to us, and he gave that other son the gift of 400,000 to the equivalent to come off because his amount was a bigger amount. So he took that amount off there. [93]
…
…The [business], say it was … Worth 400,000. That was … allocation – everything. The other one was a farm, and say it was worth 800,000. If he gifted that 400,000 to the one – he gifted the other one 400,000 as well. So that left the other one still to owe 400,000 so that they still got gifted an equal amount.[94]
[93] Transcript 06.11.2015, p 79 from l 39
[94] Transcript 06.11.2015, p 80, l 13-18
It will be immediately apparent that the wife had never previously referred in her affidavit evidence to any discussion about purchasing the S property, for any price. Furthermore her evidence suggesting Mr Grange Snr engaged in some balancing exercise to ensure that each of his sons were gifted an equal sum by offsetting one value with another is inconsistent with her earlier evidence that the farm was considered an equal value to the S property and D.
The wife accepted in the course of her cross-examination that the parties “went a certain distance down that path [to purchasing the S property]”[95] but stopped because “[Mr Grange Snr] has gifted it to us in the end”.[96]
[95] Transcript 06.11.2015, p 80, l 38
[96] Transcript 06.11.2015, p 80, l 40
The following matters can be established by objective documentary evidence or appear to be otherwise uncontroversial.
At some time between 1995 and 1998, the husband and wife took over the operation of the S property and business. From this time they met outgoings associated with that property including the rates,[97] power bill[98] and undertook maintenance on the property.[99] The husband accepted that he and the wife operated the business as if it was their own property.[100]
[97] Transcript 06.11.2015, p 81, l 21
[98] Transcript 06.11.2015, p 81, l 39
[99] Transcript 06.11.2015, p 82, l 7
[100] Transcript 25.01.2016, p 15, l 30-33
On 2 December 1996, G (Qld) Pty Ltd was registered.[101] The husband and wife were named as directors of the company and the husband was the secretary. They each held 12 shares in that company and were its only shareholders.
[101] Affidavit of the wife filed 18 July 2014, Annexure TDG5, page 1
On or about 8 January 1997, Mr Grange Snr executed various Deeds of Gift.[102] Those Deeds are not themselves in evidence. However, subsequent documents which purport to be “Deed[s] of Variation”[103] of each record or refer to the terms of the original gifts.
[102] Exhibits 8 and 9
[103] Exhibits 8 and 9
G Pty Ltd purported to gift to G (Qld) Pty Ltd the stock in trade used in the business located at the S property.
G Pty Ltd also purported to gift to the husband and wife as Trustee for the Grange Family Trust the S property including all fixed improvements, the business Licence No. .., the allocation and all plant and equipment of the business. Of critical importance, though, is that reference is also made in the Deed of Variation to a Transfer document dated 8 January 1997 recording that the transfer is not “fully completed”.
At a time after 8 January 1997, two Deeds of Variation were drawn up. By those Deeds, the earlier gifts of property were varied to be transfers for consideration of $5,000 in respect of the stock in trade, and $485,500 in respect of the land and business assets.
The copies of the Deeds of Variation in evidence are not signed and it does not appear on the state of the evidence before the Court that they were ever executed.[104] As earlier discussed, the late production of these documents and the husband’s unsatisfactory and unpersuasive attempts to explain that, inform the finding made as to the husband’s failure to make full and frank disclosure.
[104] Transcript 25.01.2016, p 67, l 6
In September 1998, (prior to Mr Grange Snr’s death in 1999) G Pty Ltd was voluntarily wound up.[105]
[105] Affidavit of the wife filed 18 July 2014, Annexure TDG2, page 2
On 15 September 1998, in association with the voluntary winding up of the company, G Pty Ltd lodged a Declaration of Solvency with the Australian Securities and Investment Commission.[106] That Declaration appears to be made and signed by each of the directors, namely, the late Mr Grange Snr, the husband’s brother, Mr I Grange, and the husband himself. It declares a correct statement of the assets of the company to comprise:
[106] Affidavit of the wife filed 18 July 2014, Annexure TDG 4
cash at bank 2,962
cash on hand
trade debtor 34,866
loans and advances 491,277
…
Estimated realisable value of assets 529,105
(Bold emphasis in original)
That list of assets does not include any freehold property, despite the company being the registered owner of the S property. However, it does include “loans and advances” in a total amount of $491,277 which equates to the combined total of the values referred to in the two Deeds of Variation – a figure of $490,500 (difference $770). That difference might be explained by a stock in trade variation between dates. However, there is no direct evidence, one way or the other, from the husband as a director at the time who signed the Declaration, as to whether the Declaration actually reflects that at the time of its execution the S property was to be paid for by the husband and wife. That is, the husband did not advance that evidence in chief but nor was he
cross-examined about this issue. Nor is there evidence to explain the “loans and advances” amount otherwise. That is, there is no evidence to reconcile that amount other than the speculative assumption, given the absence of direct evidence, that the document reflects the expectation that was operative at the time that the husband and wife would be paying to purchase the S property.
G Pty Ltd was deregistered in March 1999.[107]
[107] Affidavit of the wife filed 18 July 2014, Annexure TDG2
On 7 May 1999 Mr Grange Snr executed a will.[108] That will specifically deals with three pieces of real property:
a)D, which was gifted to the husband, and about which more will be said below;
b)Lot 1 of property located at BB Town, which was to be sold pursuant to the terms of the will; and
c)Lot 2 of property located at BB Town, which the husband’s brother, Mr I Grange, was afforded an option to purchase pursuant to the terms of an existing lease agreement. In the event Mr I Grange did not elect to exercise such an option, Lot 2 was to be sold with $500,000 of the proceeds of sale to be paid to Mr I Grange and the balance to be paid into the residue of the estate.
[108] Affidavit of the wife filed 18 July 2014, Annexure TDG6
The will is silent in respect of the S property.
Mr Grange Snr passed away in 1999.[109]
[109] Affidavit of the husband filed 21 January 2015, paragraph 54
It is uncontroversial that title to the S property was never formally transferred, and the registered proprietor remains the apparently deregistered company G Pty Ltd.
The wife says that in about 2000, during the course of legal proceedings between the parties and a local council, she became aware that legal title to the S property had never formally been transferred. She gives no evidence as to steps she took or conversations she had with the husband after coming to this conclusion about enforcing the “gift”. The parties did not lodge a caveat on the title to the S property.
Further reference will be made below, in discussing the issue of the D property, to a recorded telephone conversation which took place on 10 August 2011, the transcript of which was in evidence and the accuracy of which was not disputed by the wife. An extract from the transcript appears below but it will be seen that in discussing the Supreme Court litigation, at a time when the wife was being encouraged to participate, the wife said to Ms A (in relation to Ms H’s ownership of the real property known as the T property):[110]
… and how much different is that to [D] block with your name on it, that was all your father ever owned and now it’s got your name on it…
[110] Affidavit of the husband filed 2 November 2015, page 18 of 23, line 095
In my judgment, the emphasised portion of the statement by the wife is irreconcilable with the wife’s contention that the S property was gifted to the parties.
In my judgment the preponderance of the evidence results in the conclusion that the wife does not discharge the onus of proof she bears with respect to proving a completed gift of the S property to the parties to the marriage.
The wife seeks a finding[111] or declaration[112] that the S property is property of the husband, wife, or both of them and consequential orders which would affect the transfer of legal title.
[111] Submissions of the wife filed 17 February 2015, paragraph 3(a)
[112] Case Information filed 25 July 2014, paragraph 1
The legal basis upon which such a finding or declaration might be made is somewhat unclear.
The wife’s case proceeded entirely on the basis that in the late 1990s the husband’s parents gifted to them the S property and the allocation and that effect ought to be given to this gift. She rejected any notion that the parties had agreed to purchase the property.
It is uncontroversial that legal title to the S property remains with G Pty Ltd, even though that company has been deregistered.
The Property Law Act 1974 (Qld) governs the assignment and conveyance of real property in Queensland. Section 200 of that Act provides:
200 Efficacy in equity of voluntary assignments
(1)A voluntary assignment of property shall in equity be effective and complete when, and as soon as, the assignor has done everything to be done by the assignor that is necessary in order to transfer the property to the assignee –
(a)even though anything remains to be done in order to transfer to the assignee complete and perfect title to the property; and
(b)provided that anything so remaining to be done is such as may afterwards be done without intervention of or assistance from the assignor.
(2)This section is without prejudice to any other mode of disposing of property, but applies subject to the provisions of this and of any other Act.
It is effectively the wife’s case that Mr Grange Snr, as assignor, had done all things necessary to transfer the S property to she and the husband and all that remained was the formal recording of that transfer.
Her evidence in respect of any asserted “agreement” between her, the husband and Mr Grange Snr was directly contradicted by her later evidence that she was informed by the husband that they would receive the S property and that she was not a party to that conversation with Mr Grange Snr directly. She offered no particulars about any conversation in which it was said an agreement may have been reached, nor what the terms of any such agreement may have been.
There is no evidence by either party as to any direct financial contribution either made to the S property.
It has long been held that equity will not intervene to assist a volunteer. As McPherson J observed in Riches v Hogben [1985] 2 Qd R 292 at 300 - 301 (cited with approval in Giumelli v Giumelli (1999) 196 CLR 101):
A consequence of applying the principle may be to complete an otherwise imperfect gift, as in Dillwyn v. Llewelyn; (supra), or to give effect to an agreement that, for want of certainty or consideration or of some other essential element, falls short of constituting an enforceable contract. Many of the reported cases are concerned with imperfect gifts; but there is of course a sense in which all agreements made or promises given without consideration are imperfect gifts of the benefits they purport to confer. What distinguishes the equitable principle from the enforcement of contractual obligations is, in the first place, that there is no legally binding promise. If there is such a promise, then the plaintiff must resort to the law of contract in order to enforce it, it being the function of equity to supplement the law not to replace it. The second distinguishing feature is that what attracts the principles is not the promise itself but the expectation which it creates. In that respect it represents the precise converse of what was said by Jessel M.R. in Ungley v. Ungley, (supra), to be the basis for enforcing the contract in that case. Finally, the equitable principle has no application where the transaction remains wholly executory on the plaintiff’s part. It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise. That is why in Dillwyn v. Llewelyn (1862) 4 De G. F. & J. 517, 522; 45 E.R. 1285, 1287, where the son built on land promised but not effectively conveyed to him by a memorandum signed by his father, Lord Westbury L.C. said that the only inquiry was “whether the son’s expenditure, on the faith of the memorandum, supplied a valuable consideration, and created a binding obligation”…
The wife advances no evidence of any relevant conduct by the husband and wife acting upon the expectation of being gifted the S property. At its highest, the wife asserts that prior to any discussion about Mr Grange Snr’s estate planning, and prior to any steps being undertaken by the parties towards taking over the operation of the S business, she and the husband had a conversation about possibly moving from the S property to another property but the husband dissuaded her of this idea by telling her that there was no need as they would be receiving the S property in the future. Any reference to “receiving” the S property at this time, must however be seen in the context of her later evidence that during a much later conversation with an accountant which she deposes to being the first occasion on which she came to believe the parties were being “gifted” the S as opposed to acquiring it in some other fashion.
The evidence clearly establishes that the husband and wife, and their children, lived at the S property from 1978. For the nearly 20 years which followed, prior to them taking over the operation of the S, they did not make any financial contribution to this accommodation, they did not pay rent, they did not meet any of the utilities. Additionally, the wife accepted during
cross-examination that for any work the parties did on the S property prior to taking over operation of the S, they were properly paid (transcript 6 November 2015, p 98, l 13).
From the time of taking over the business operations, the parties assumed the payment of various utility expenses but seemingly had the benefit of whatever income was yielded from that business operation utilising the capital the S property provided.
There is no evidence from either the husband or wife as to any capital contribution made by them to the improvement or development of the facilities at the S property. Indeed, the husband asserts, without challenge from the wife, that the buildings which remain on the property are in the original state as when they were constructed in the 1930s.
As will be apparent from the preceding discussion, there are significant “gaps” in evidence, including gaps which might have been filled by the husband, including via full and frank disclosure of documents and information; and evidence from the Third Respondent. As to this, it was of course always open to the wife to subpoena the Third Respondent to give oral evidence under cross-examination at trial (and indeed to produce documents) but this the wife apparently elected not to do.
Despite these features, given that the wife bears the onus of proving her case confined to the equitable enforcement of a purported gift, I am not persuaded that the overall preponderance of evidence leads to the conclusion that the wife has discharged the onus of proof she bears in making out her case.
In summary, I am not ultimately persuaded that the late Mr Grange Snr promised to gift the S property to the parties. Even if, contrary to that conclusion, such a promise was made, it is a promise which remained executory in that no transfer of the title of the S property was ever affected. Moreover, any such unperformed promise did not, on the evidence before me, induce any relevant conduct on the part of the husband and the wife in the nature of valuable consideration sufficient to invite the intervention of equity to enforce such a promise.
At no stage during those conversations does the wife expressly assert that the husband transferred the D property to Ms A without her consent, or without her knowledge, or contrary to her expressed wishes.
It is uncontroversial that Ms A holds the legal title to D and that title to D was transferred to her in 2009. The wife’s case as presented, putting it at its highest given the difficulties in identifying that case with precision, does not actually engage with, or address, each and every of the elements of s 106B of the Act to enliven the discretion conferred by that section for the Court to set aside that transfer. The wife’s case, at its highest is that the husband unilaterally decided to transfer the D property to Ms A and that this occurred without the wife’s consent. However, that case does not address all of the requisites for s 106B to operate. I am not persuaded that the wife discharges the onus she bears to establish that s 106B applies and that the Court should exercise the discretion conferred by the section to set aside the transfer to Ms A (ANZ Banking Group v Harper (1988) FLC 91-938). Fundamentally, I am not persuaded that the transfer to Ms A occurred without the wife’s consent given the content of the discussions between the husband and wife earlier referred to.
The wife’s case does not contain any contention to the effect that the wife ever made any contribution, direct or indirect, to the D property inherited by the husband late in the period of cohabitation and transferred to Ms A well before these proceedings were brought. In that context, the wife’s case does not address how, or in what respect, the transfer to Ms A is to be characterised as being made in order to defeat an anticipated order in these proceedings, or irrespective of intention, as likely to defeat even any such order. Even if the discretion were enlivened, the wife’s case does not include, nor is there any attempt to address, Ms A’s right as a person interested within the meaning of subsection (3), in circumstances where the subject transfer occurred in 2009 and Ms A provided the unchallenged evidence earlier referred to as to meeting outgoings on the property in the many years since. Counsel for the wife submits that the wife’s knowledge of the transfer should not be equated with her consent. However, on any objective analysis of what transpired between the husband and wife in the relevant discussions earlier referred to, in the context in which that occurred, I do not accept that the wife was somehow overborne in failing to express any objection to the transfer occurring at the time when it occurred.
For these reasons I conclude that Ms A is the legal and beneficial owner of D and that property does not form part of the property interests of the husband or the wife for the purpose of these proceedings.
Item 8: materials, plant and equipment of G (Qld) Pty Ltd
Prior to specifically discussing this issue, relevant to this and subsequent like issues concerning what is asserted by one party against the other concerning the post-separation period, it bears emphasis that the husband and wife finally separated as long ago as 2008. By way of overview, it is well settled that it is unreasonable to conduct some kind of microscopic examination of each aspect of the parties’ post-separation conduct or expenditure with a view to determining notional assets to be brought into account; nor to likewise characterise provision of modest amounts by parents to their adult children. The notional adding-back of assets occurs only where circumstances are proven, and can be demonstrated to show, that it would be unjust and inequitable not to take those matters into account (see, for example, Gollings & Scott (2007) FLC 93-319 and Cerini & Cerini [1998] FamCA 143).
As with other significant aspects of the wife’s case, it is not entirely clear on what legal basis she contends this is an item of property or how it ought to be taken account in the property settlement of the parties: whether it remains property of the parties; whether any diminution in the value of the assets ought to be attributed to the husband as waste; the amount of, and whether any, proceeds of sale ought to be notionally added-back to a pool of property interests for adjustment; or how any application by the husband of proceeds of sale of assets or stock of the business ought to be treated.
In her affidavit of evidence in chief the wife includes the sum of “E$50,000” as an “asset” of the parties. Despite this, the evidence she leads falls well short of establishing this as an existing asset of the parties or that a notional asset in this amount ought to be considered.
The wife asserts that when she left the S property in 2008, “there [were] significant logs left on the property to be sold. Each log could be sold for anywhere between $1,000.00 and $10,000.00 … there would have been at least 20-30 (possibly more) logs on the property when I left”.[158] She continues that “there is no reason that [the husband] couldn’t have sold the logs shortly after separation for this amount. I cannot see why he would have chosen not to do so”.[159] She asserts that if the logs are damaged or in a poor state “that is because of [the husband’s] neglect post separation”.[160]
[158] Affidavit of the wife filed 18 July 2014, paragraph 85
[159] Affidavit of the wife filed 18 July 2014, paragraph 87
[160] Affidavit of the wife filed 18 July 2014, paragraph 87
The wife gives no evidence as to any plant or equipment operated by G (Qld) Pty Ltd which she observed remained on the property when she left. It is to be kept in mind that the wife was a co-director, with the husband, of the company.
The tax return for G (Qld) Pty Ltd for the 2009 financial year,[161] being the year in which the parties separated, records that the “opening stock” and the “closing stock” for that entity had a value of $22,490. The value of “all current assets”, including plant and equipment at cost of $29,201 which had been wholly depreciated, is stated at $23,430.
[161] Affidavit of the wife filed 18 July 2014, Annexure TDG10
The company declared $11,395 gross of income for that financial year which, when account was taken of expenses, resulted in $6,591 of taxable income. It owed $89,976.91 to various persons and entities. The company carried $67,085 of losses forward to later income tax years.
The 2010 tax return for G Pty Ltd[162] records an annual gross income of $3,322, which when adjusted for expenses resulted in a total loss of $21,701. That year, the company had only $5,622 of stock remaining at the close of the financial year and assets of $7,041.
[162] Affidavit of the wife filed 18 July 2014, Annexure TDG11
The husband’s evidence in respect of the materials is similarly inadequate. He contends initially that Mr Grange Snr purchased the materials for the business.[163] This is nonsensical when regard is had to the fact that Mr Grange Snr died in 1999 and the parties continued to operate the business until 2008. The husband appears to accept that the materials may have cost the parties between $1,000 and $10,000 to purchase but that they “are worth less now [and] the [materials] do not belong to us”.[164]
[163] Affidavit of the husband filed 21 January 2015, paragraph 85
[164] Affidavit of the husband filed 21 January 2015, paragraph 86
In the Financial Statement of the husband filed 1 August 2014, he deposes to the post-separation disposal of “ ” with a value of “E40,000”. He does not, however, provide any particularity, as to when the materials were sold, to whom or for specifically how much.
While in the same document he refers to the disposal of “ITEMS For Disclosure… SOLD BLACK MARKET DEALER”, being items which the husband clearly asserts were disposed of by the wife; in circumstances where the wife left the S property in 2008; where he remained living on the S property; and where the husband deposes to the difficulties he experienced in having the wife sign the documents associated with selling the allocation and the lack of communication between the parties post-separation, the only available inference is that the husband had the control of the disposal of whatever remained on the S property at that time.
Even if I accepted, as the wife contends, that in 2008 when she left the S property, there was “significant ” remaining and the value she ascribes to this asset is reasonable or accurate, the tax records for the company establish that by 30 June 2010 it held only $5,622 of stock in trade on hand and that at or about the time of separation, it held only approximately $22,490 of stock in trade.
Again, even if the husband retained for his sole use and benefit all of the “profit” recorded in the tax records for those two financial years, he would have received the benefit of $6,591 in FY2009, the return recording a loss of $21,701 in FY2010. It is uncontroversial that the husband did not obtain remunerative external employment post-separation. While the wife might assert that he had capacity to do so but elected not to, it could hardly be suggested that his expenditure of $6,591, if it occurred, could be anything other than reasonable in the nine years since separation.
For those reasons, I decline to include this as an asset of the parties or to notionally add-back any item in this respect.
Item 9: Grange Family Trust (machinery, , tools and equipment)
The entirety of the wife’s evidence in respect of this asserted asset is as follows:[165]
81. When [Mr Grange Snr] gifted us the [business] [the husband] set up the trust. I understood that the trust was there to protect us from law suits. The trust would purchase [the materials] for the [business].
82. The trust owned tools and equipment ….
83. [The husband] has not provided any disclosure in respect of the trust and I cannot find anywhere that these documents might be located.
84. I believe, the assets owned by the trust would be worth approximately $100,000.00.
[165] Affidavit of the wife filed 18 July 2014, paragraphs 81 to 84
The husband accepts that he has not disclosed any documents relating to the family trust, but contends this is because “it does not exist”.[166]
[166] Affidavit of the husband filed 21 January 2015, paragraph 83
As is immediately apparent, the wife’s “estimate” of the value of the assets allegedly held by the family trust is wholly without particularity. Not only does she fail to particularise what assets the family trust held at any time, but there is no articulation of the basis upon which she has arrived at this “estimate”.
The only objective evidence before the Court to establish the potential existence of the family trust is contained in Exhibit 9, the Deed of Variation purporting to transfer the S property, business licence, log allocation and all plant and equipment to “[Mr Grange] and [Ms Grange] as Trustee for the [Grange] Family Trust”. [167] By that document, the “Donee” of the S property and the allocation is said to be the husband and wife “as Trustee for the [Grange] Family Trust”. However, as documents which must necessarily post-date that deed indicate, the allocation was in fact subsequently held by G (Qld) Pty Ltd and not by the parties personally, or in their capacity as a trustee of any trust.
[167] Exhibit 9
There being no sufficient evidence advanced before me to establish this Trust ever actually existed, and nothing to explain, if it did, the content of the subsequent documents referred to, I am not satisfied of the existence of this entity. Even if that finding be wrong, I am not satisfied of the existence, or value, of the property items alleged by the wife.
Items 10 and 13: the household and personal effects of the parties
The husband remained at the S property when the parties separated in 2008. The wife estimates that his household contents are worth $5,000 while the husband contends they are worth $350. She says that the house they lived in was three bedrooms and was furnished including with white goods. He broadly asserts “[m]ost of the contents in the house belong to my Mum and the contents are not worth anywhere near what the applicant lawyer claims”.[168] Neither party had any such assets valued.
[168] Affidavit of the husband filed 21 January 2015, paragraph 94
The parties similarly disagree about the value of the wife’s household contents. She does not include any such item in her primary trial affidavit, and the Financial Statement filed by her in September 2017 records a value of “NIL” for household items. The husband asserts that this is $5,000. He does not provide any basis for this.
Neither party, respectively, proves the assertions they make against the other in respect of this topic.
Items 11, 12, 14 and 15: motor vehicles
Motor vehicle 3
The wife owns Motor vehicle 3 which is valued at $6,500.[169]
[169] Financial Statement filed by the wife on 6 September 2017, item 40
Motor vehicle 4
The wife says when she left the relationship she had Motor vehicle 4 which was worth approximately $1,100 but that it was given to the parties’ son Mr M who has since sold it.[170] I accept her evidence in this respect. The husband says that the parties acquired Motor vehicle 4 shortly before separation for $3,500.[171]
[170] Affidavit of the wife filed 18 July 2014, paragraph 95
[171] Affidavit of the husband filed 21 January 2015, paragraph 95
Motor vehicle 1
The wife asserts the Motor vehicle 1 which remains in the husband’s possession is worth $200 while the husband asserts it is worth $100.
It is unnecessary to the determination of appropriate and just and equitable property settlement orders under s 79 of the Act to specifically include any of these items or values in any pool of assets for adjustment.
Item 17: the “Items” - proceeds of sale received by the wife from the alleged sale of property to “black market dealers”
The husband asserts that the wife disposed of various “items” (presumably pieces of property) in 2012, and the funds she received from the same ought to be included as property of the parties. He estimates that these funds are approximately $100,000. With respect to the husband, the state of the evidence before me makes it nearly impossible to determine with any particularity what property the husband is in fact referring to, whether the wife in fact sold any of the property, and if she did, what was sold and how much money was received from the sale.
Save for including the same in a table setting out the property of the parties, the husband does not give any evidence in his affidavit as to what these “items” are.
In correspondence provided to the wife’s solicitors in April 2014[172] the husband provides a list of “some of the Items” which extends to two pages, although even this does not make particularly clear what is being referred to.
[172] Affidavit of the wife filed 18 July 2014 at TDG13
The wife denies taking the particular items with her upon separation and denies disposing of the same post-separation.
It became apparent during the course of the husband’s cross-examination of the wife that at least some of the “items” were guns, ammunition and various other weapon paraphernalia. The wife denies disposing of these assets, or having them in her possession or control.
The husband did not adduce any evidence from the person he asserts purchased the items, nor did he seek to adduce any expert evidence as to the values.
The husband pointed to a number of Applications for a Permit to Acquire[173] which the parties’ daughter Ms H lodged with the Queensland Police seeking a permit to acquire a number of different firearms. Those applications record that the weapons were being acquired from an individual whose personal information “they [didn’t] want to be known”. Those applications do not record from whom the weapons were acquired nor whether consideration was paid. They do not establish that the wife sold a number of firearms, that she achieved almost $100,000 from those sales, or that she secreted away those funds.
[173] Exhibit 11
I therefore do not accept that the husband establishes a case that the wife ought be treated as having had the sole use and benefit of $100,000 in the
post-separation period, or any other amount, in respect of this issue.
Liabilities
At paragraph 20 of his affidavit filed on 21 January 2015, the husband deposes:
I have attached a correct scheduled [sic] that I have prepared to the best of my ability, with limited time.
In that schedule the following appears under the heading “LIABILITIES”:
LIABILITIES
Ms Grange
Madden Lawyers
E100,000[174]
Mr and Ms Grange
Total other liabilities
E127,350
Mr and Ms Grange
Debt recorded with BR trustee
272,650[175]
[174] Affidavit of the husband filed 21 January 2015, paragraph 20
[175] Affidavit of the husband filed 21 January 2015, paragraph 20
As to the first item above, Madden Lawyers are the wife’s legal representatives in these proceedings. Nothing beyond the bare assertion in paragraph 20 was advanced by the husband to establish such a debt. The wife’s Financial Statement filed on 6 September 2017 does not identify any liability of the wife beyond the wife’s personal loan with the ANZ Bank for $20,000. I prefer, and accept, the wife’s evidence as to her debt position.
As to the second item above, there is no disclosure of documents by the husband to corroborate the existence of such joint debts or debts generally, nor evidence otherwise advanced in the husband’s case sufficient to prove the existence of such debts.
The third item appears to be a reference to the husband’s bankruptcy trustee. The wife addresses the husband’s bankruptcy in her affidavit filed on 18 July 2014 to which is annexed some documents relevant to the husband’s bankruptcy. The wife rightly points out in her affidavit that the husband disclosed very little detail about his bankruptcy, and that remained the position with respect to the husband’s disclosure throughout these proceedings.
Annexure “TDG18” to the wife’s affidavit is the copy of the schedule of creditors disclosed to the wife by the husband’s then Trustee in Bankruptcy when that Trustee was involved as a party at the interlocutory stages of these proceedings. The total of that schedule is $272,650, the same figure noted above. The items in the schedule provided by the Trustee are self-evidently debts personal to the husband, including debts incurred in relation to his unsuccessful Supreme Court litigation involving Ms H to which the wife was not a party. There is nothing to establish that any of these are joint debts of the husband and the wife. More fundamentally, it would appear that in any event all of these debts have been subsumed in the husband’s bankruptcy. There is no disclosure made by the husband or evidence advanced by him to demonstrate otherwise. The last interim order made in the course of these proceedings, whilst the Trustee was a party, was in February 2015.
Thus, other than the wife’s personal loan debt to the ANZ Bank, which is accepted to exist, there is no proof by either party of any relevant liability in existence.
Property interests considered for adjustment
For the reasons discussed above, in circumstances where the final separation of the parties occurred as long ago as 2008, it is unnecessary to the attainment of just and equitable property adjustment orders now made under s 79 of the Act to specifically incorporate minor value items, such as household and personal effects or motor vehicles held by either party, in the assessment. That is, whilst it is accepted that such property interests exist, the circumstances of a case involving a long marriage and seven children, and more particularly a lengthy post-separation period, does not dictate that each and every minor value item be included in the assessment process.
The wife’s 2010 motor vehicle was obviously acquired by her post-separation and, on the evidence which I accept, the wife has funded herself entirely in the post-separation period from her employment earnings. The wife’s total funds in bank accounts disclosed in her September 2017 Financial Statement at $8,000 are, I find, funded by the wife’s post-separation earnings from employment and are, in any event, offset by her $20,000 post-separation personal loan debt to the ANZ Bank. I accept the wife’s evidence that in the post-separation period she has partially funded/supported some of the now adult children of the marriage.
So too the wife’s accumulated superannuation interest in Sunsuper of $55,808 as per her September 2017 Financial Statement is the product of the wife’s post-separation earnings from employment.
In the circumstances of this case, and based upon the findings already recorded in the foregoing the property interests falling for specific consideration (assuming the parties otherwise retain their respective modest property interests – including the case of the wife her superannuation interest) are the proceeds of sale by G (Qld) Pty Ltd of the permit being the funds received by the Third Respondent.
As to the amount of those funds there are, for the reasons already discussed, difficulties in ascertaining with any precision the net amount.
As earlier referred to, Exhibit 13 in evidence contains a copy of the Sale Agreement dated 8 September 2008 between G (Qld) Pty Ltd as vendor and the corporate purchaser of the Sales Permit.
That Agreement contains various definitions but for present purposes all that need be noted is that:
·“purchase price” is defined as the sum of $1,044,600;
·“GST” is defined to mean what is conventionally known as the goods and services tax under relevant legislation;
·“deposit” is defined to mean the amount of $20,000 and “deposit holder” is defined to mean “CC Lawyers” who were the lawyers who acted for G (Qld) Pty Ltd.
Clause 5.4 of the Agreement is an acknowledgment by the parties to the Agreement that the sale is a “taxable supply” (within the meaning of the GST legislation); and that the purchaser is required to pay GST in addition to the purchase price; and that on settlement the vendor is to provide the purchaser with a tax invoice.
The standard 10 per cent rate of GST applied to the purchase price of $1,044,600 amounts to $104,460 and on this basis the total payable by the purchaser under the contract was $1,149,060. Allowing for the $20,000 deposit already paid, it meant that there was an amount of $1,129,060 payable by the purchaser company on completion.
That amount of $1,129,060 accords with the Authority which is Annexure “RGfa9” to the husband’s affidavit filed on 21 January 2015. That Authority, signed by the husband and wife as directors of G (Qld) Pty Ltd on 8 November 2008, directs the balance purchase price to be paid to the Third Respondent in two cheques totalling $1,129,060.00. The Authority further directs that after payment of all legal fees the balance of the deposit is also to be paid by cheque to the Third Respondent.
It is thus clear that the Third Respondent received from the sale of property belonging to the husband and the wife, via their company, the sum of $1,129,060. Of that amount, it is more probable than not that $104,460 is the GST amount that was payable by the purchaser under the terms of the Sale Agreement, and if that sum is accounted for, there is a net balance amount of $1,024,600.
However, due to the Third Respondent’s failure to take the opportunity to participate in the proceedings as a party, or otherwise to provide evidence; in combination with the husband’s abject failure to provide full and frank disclosure of documents and information; the following matters are unknown:
a)Whether the GST amount of $104,460 was ever accounted for, or whether any due payment of GST was ever remitted to the Australian Taxation Office, and if so, by whom? Plainly the husband retained sole control of G (Qld) Pty Ltd post-separation and no records are produced by the husband to establish that, in accordance with the advice he received from CC Lawyers prior to settlement, whether in fact the books of the company reflect the sale/payment by the purchaser of the GST amount. Such records of the company as are in evidence for the 2009 financial year (in which the sale occurred) do not suggest this was done;
b)No copy of the tax invoice, provided for in the Sales Agreement to be issued by the company to the purchaser upon settlement, is in evidence;
c)
No full explanation is provided by the husband as to the purpose, or reasons for, the direction in the Authority that the sum of $1,129,060 in total be paid to his mother (the Third Respondent) in two cheques in the amounts of $990,000 and $139,060. The husband’s evidence in
cross-examination on this topic was entirely unconvincing (see, for example, Transcript 25 January 2016, p 39-40, 43);
d)It is unknown whether, after legal fees, the Third Respondent received any balance sum from the $20,000 deposit.
Doing the best I can on the state of the evidence as referred to, I find that the Third Respondent received and retained net sale proceeds of not less than $1,024,600 and that is the amount to be brought to account.
For the reasons earlier referred to, that finding may well be conservative and thus unfair to the wife if no GST was ultimately payable (or paid) or was paid in some lesser amount. There may be some additional (not disclosed) balance deposit sum. Most fundamentally, properly invested, even at modest prevailing bank deposit rates, a capital sum of $1,024,600 invested in 2008 would have very substantially increased in amount even allowing for taxation on interest received. Again, there is no evidence of what the actual amount stood at when the injunction was granted in 2013 (or since) and there is only the husband’s general assertion in these proceedings, uncorroborated by any documents or by any direct evidence from the Third Respondent, to the effect that his mother (the Third Respondent) still holds the funds she received.
I considered it necessary to set out the foregoing in some detail because all of the cross-examination of the husband conducted by counsel for the wife proceeded on the footing that the relevant amount of net proceeds of sale was $900,000. When I sought clarification at the time, counsel suggested that his use of that figure was on the basis of the wife’s understanding of the amounts involved. How such an understanding was arrived at is entirely unclear. It is further unclear when regard is had to the terms of the orders sought by the wife, a cash payment of $505,500, which sum was said to represent 50 per cent of the value of the proceeds of sale, which would suggest that the total proceeds of sale was $1,011,000, not $900,000.
As stated, the evidence supports the conclusion that the sale proceeds, net of GST, received by the Third Respondent amounted to not less than $1,024,600.
Assessment of contributions
Within much of the foregoing discussion there are specific references, which need not be restated, as to contributions made by the husband and the wife, or either of them, of one form or another relevant to s 79(4).
In summary, the parties moved onto the S property following their marriage in 1978 and continued to live there, largely uninterrupted until their final separation in 2008. At the commencement of their relationship neither party had any assets of any significance.
Prior to taking over the operation of the business, they never paid rent or utilities for their occupation of the property,[176] that is to say for a period of approximately 20 years, the parties lived expense free on property owned by the husband’s parents.
[176] Transcript 06.11.2015, p 127, l 41-44
The wife accepts that prior to December 1996, she had very little to do with the operation of the S property[177] save for mowing some of the lawns at the dwellings.
[177] Affidavit of the wife filed 5 November 2015, paragraph 8
The parties commenced operating a heavy machinery business via a partnership in about 1980 and which ceased operations in about 1990. The wife undertook the homemaker and that the husband was the primary income earner at the time.[178]
[178] Affidavit of the wife filed 5 November 2015, paragraph 10
During the operation of the partnership conducted by the husband and the wife, the wife attended to the bookwork for the business, assisted with the maintenance of the machinery, and undertook the domestic duties such as housework, cleaning, cooking, mowing the yard, gardening, and care of the children.[179] The husband undertook the manual aspects of the business operation.
[179] Affidavit of the wife filed 18 July 2014, paragraph 102
This was a 30 year marriage which produced seven children. Those basic facts inform the utility of attempting to compare those forms of contribution identified in s 79(4) capable of measurement in money terms, with those forms which are not (see Lovine & Connor and Anor (2012) FLC 93-515 particularly at [39] to [42]). Moreover, this case involves a very lengthy post-separation period and the task of assessment is a holistic one taking that feature into account.
Those basic fundamental facts referred to probably explain why it is that neither the husband nor the wife considered it necessary to focus evidence, or direct cross-examination of the other, in an attempt to elevate the nature or worth of their individual contributions by comparison with the other party.
Whilst the benefit the parties received via the provision of accommodation for them and their family from the husband’s extended family is to be treated as a contribution by the husband, the husband did not dispute the wife’s case that throughout the marriage the wife was the primary homemaker and undertook the primary parenting responsibility for their seven children. Whilst there is no need to establish a causal link between a specific contribution and specific assets (Dickons & Dickons [2012] FamCAFC 154) the provision of accommodation has particular resonance as a factor if it can be seen to have afforded the parties to the marriage the opportunity to substantially increase their assets beyond that which would otherwise have been the case. This is not so in this case.
There is no doubt that aside from her homemaking and parenting contribution the wife:
a)Assisted to some extent with physical tasks undertaken over many years at the S property;
b)Undertook the bookwork and administrative tasks associated with the parties’ earthmoving contracting business;
c)Participated essentially on an equal footing with the husband as a director and shareholder of G (Qld) Pty Ltd; and
d)Contributed, via her homemaking and parenting role, to the assistance which was provided in turn by each of the children to the operation.
With respect to the husband, there was no challenge by the wife to the essential feature that the husband was a hard worker throughout the period of cohabitation and applied his efforts in this respect for the benefit of the family.
Whilst each party mounted some criticisms of the other via evidence to the effect that the other was abusive and prone to perpetrate family violence on occasions, neither party elevated this aspect via meaningful and cogently particularised evidence, to support a proposition to the effect that the party’s contributions should be given added weight or significance (Kennon v Kennon (1997) FLC 92-757).
Post-separation it can be seen that each party provided some support or assistance to the children of the marriage albeit that it needs to be recognised that the respective ages and levels of independence reached by the children as at the time of separation, and subsequently, means that this factor should not be given undue emphasis.
With respect to the subject asset of the sale proceeds of the permit it must be recognised, in my judgment, that both parties are to be taken to have contributed on an equal footing to the other to the operation of the business from when the husband and wife commenced to operate that business via their company G (Qld) Pty Ltd. Their efforts preserved the availability of the permit to operate a business which in turn facilitated the grant of the subject permit by the State Government to their company G (Qld) Pty Ltd in 2000 as earlier discussed.
In the post-separation period the wife has supported herself from her earnings from external employment. Whilst on my findings the husband has probably had the benefit of at least some joint capital as at the time of the parties’ separation this cannot be characterised, on my findings, as an unreasonable advantage he has enjoyed as compared with the wife.
Any advantage to this effect is offset if the wife retains for her own benefit her accumulated superannuation. As to that, it cannot be concluded that the husband has made any relevant contribution to the wife’s earning capacity
post-separation nor, thus, to her accumulation of superannuation.
In my judgment, taking into account the holistic assessment required, with respect to the subject sale proceeds it is legitimate to assess that the parties have made an equal contribution.
Future needs (s 75(2))
The husband was born in 1959 and is now aged 58. He continues to live at the S property along with Ms A and Mr M. It would also seem that Ms B lives with her adult children on a rotating basis.
The wife was born in 1960 and is now aged 57 years old.
On 8 September 2017 the husband cross-examined the wife on her Financial Statement filed on 6 September 2017. Such cross-examination demonstrated that the wife had significantly understated her current income in her Financial Statement. The wife deposed to average weekly income of $1,200 subject to weekly income tax of $400 (a net weekly amount of $800). In fact, the gross income was demonstrated to be in the order of $1,800 and, after taxation, an amount of $1,215.00 in net weekly terms.
The wife is currently[180] employed by Company HH and earns approximately $1,215 (after tax) per week and has superannuation of approximately $56,000. She lives in rental accommodation for which she pays $130 per week. She has approximately $8,000 in bank accounts and a car worth approximately $6,500. She also has a debt to the ANZ Bank of $20,000.
[180] Financial Statement filed by the wife on 6 September 2017
Taken from his Financial Statement filed on 1 August 2014, well prior to the trial proceedings, the husband was in receipt of government benefits of $484.60 per week. Significantly though, in the course of her cross-examination at trial, the wife challenged the husband to the effect that he was just as capable as her of obtaining external employment had he elected to so do and that challenge was not met by the husband by producing any medical evidence to suggest any relevant physical incapacity nor evidence otherwise.
On the face of things, the husband is unemployed and has no superannuation but I am not satisfied that he does not have an earning capacity similar to that exercised by the wife.
The husband purports to rely upon his care of two of the children of the marriage as a relevant factor however these children are 22 and 29 years old respectively. Even accepting that Mr M, the 22 year old, suffers from diabetes, there is no evidence as to the future impact this might have on the husband’s future financial needs.
Based upon the declarations I propose to make with respect to the subject sale proceeds received by the Third Respondent, and the consequential orders I propose to make for property settlement; which will see the return of those capital funds to the parties to the marriage; I do not consider that consideration of relevant s 75(2) factors dictates any adjustment being made in favour of either party.
Conclusion and Orders
The wife did not contend in these proceedings for any interest component to be added to the net sale proceeds amount of $1,024,600 to take into account the period that has elapsed since those proceeds were received by the Third Respondent in 2008. Thus, neither the husband nor the Third Respondent was put on notice of having to meet such a contention nor was it an issue explored at trial.
Obviously, for his part the husband did not contend any beneficial entitlement in the subject fund so cannot be heard to now complain to the effect that no allowance for this has been made.
The orders sought by the wife were predicated upon her receiving one half of the original sum received by the Third Respondent albeit that the amount stated in the form of orders sought ultimately by the wife was, on my findings, in error in identifying the sum constituting one half.
In those circumstances the Court is, in my judgment, constrained to deal by orders with the subject sum of $1,024,600.
On my findings the funds belonged to G (Qld) Pty Ltd but the feature, as already referred to, that the company can reasonably be regarded as the alter ego of the husband and the wife with respect to the sales proceeds, permits the subject asset to be dealt with as an asset of the parties to the marriage. For these reasons I am satisfied that the following orders ought be made and that the following property adjustment orders are just and equitable orders:
(1)Pursuant to s 78(1) of the Family Law Act 1975 (Cth) (“the Act”) it is declared that the amount of $1,024,600 of the total amount of $1,129,060 received by the Third Respondent on or about 8 November 2008 in respect of the sale of Sales Permit No. … was received by the Third Respondent as bare trustee for Mr Grange and Ms Grange.
(2)Pursuant to s 78(2) of the Act it is ordered that the Third Respondent pay to the trust account of the solicitors for the wife, Madden Solicitors, within thirty (30) days of the date of these Orders the amount of $1,024,600 to be held by those solicitors on trust for Mr Grange and Ms Grange (“the trust fund”).
(3)That as and by way of property settlement pursuant to s 79 of the Act:
(a)The wife is beneficially entitled to $512,300 of the trust fund and is entitled to retain that amount to the exclusion of the husband;
(b)The husband is beneficially entitled to $512,300 of the trust fund and is entitled to retain that amount to the exclusion of the wife;
(c)Each party shall be solely entitled to the exclusion of the other to all property and chattels in the possession of such party as at this date including any jewellery, furniture and furnishings;
(d)Each party shall 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;
(e)That the injunction granted by Order of this Court on 18 March 2013 be varied only for the purpose of the Third Respondent complying with the declaration in paragraph 1 and the consequential order in paragraph 2 and pending such compliance the injunction remain in full force and effect.
(4)Each party shall do all acts and things reasonably necessary to give effect to these Orders.
(5)If any party refuses or neglects to sign or execute and return any document necessary to give effect to these Orders within seven (7) days of a written request to do so then a Registrar of the Brisbane Registry of the Family Court of Australia is appointed pursuant to s 106A of the Act to sign or execute such document on behalf of that party upon lodgement of such document and the filing of an affidavit of the requesting party or a solicitor on behalf of the requesting party as to the said neglect or refusal.
I certify that the preceding three hundred and eight (308) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 30 January 2018.
Associate:
Date: 30 January 2018
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Constructive Trust
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Injunction
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Remedies
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