Jagoda & Jagoda & Anor
[2017] FamCA 1037
•31 March 2017
FAMILY COURT OF AUSTRALIA
| JAGODA & JAGODA AND ANOR | [2017] FamCA 1037 |
| FAMILY LAW – PROPERTY – TRUSTS – Whether the husband and wife are holding a property on resulting trust for the husband’s parents – Where the husband’s parents are parties to the proceedings – Where the husband’s parents provided the whole of the purchase price for the property – Where the property was transferred to the husband and wife two years after their marriage and was found not to be a gift – Where the presumption of advancement is rebutted – Where the husband’s parents are found to have retained a beneficial interest in the property – Declaration that the husband and wife hold the property on resulting trust for the husband’s parents. FAMILY LAW – PROPERTY – Application for the alteration of property interests – Where one of the parties’ properties is found to be held on resulting trust for the husband’s parents – Where a bad investment taken out by the parties is found to be a joint debt to which they are both liable – Where the wife’s financial and homemaker contributions to the marriage are more substantial than the husband’s – Contributions assessed at 70% to the wife and 30% to the husband – Consideration of s 75(2) factors – Where the wife has had primary care of the parties’ child since separation – Where the husband has disposed of assets of the marriage – The net assets of the parties to be divided as to 80% to the wife and 20% to the husband. |
| Family Law Act 1975 (Cth) ss 75(2), 75(2)(o), 78(1), 79, 79(4), 79(4)(e), 90AE(2)(b) |
| Buffrey v Buffrey (2006) 12 BPR 23,619 Calverley v Green (1984) 155 CLR 242 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Damberg v Damberg & Ors [2001] NSWCA 87 Ferraro & Ferraro (1993) FLC 92-335 Gillim & Gillim & Ors (No 2) [2014] FamCA 701 Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 In re Kerrigan (1946) SR (NSW) 76 In the Marriage of Kessey (1994) FLC 92-495 Kawada v Kawada (2012) 47 Fam LR 415 Kowaliw &Kowaliw (1981) FLC 91-092 Markoska & Markoska [2011] FamCA 572 McLay & McLay (1996) FLC 92-667 Nelson v Nelson (1995) 184 CLR 538 Shephard v Cartwright [1955] AC 431 Vadisanis v Vadisanis (2014) 53 Fam LR 345 Warby & Warby (2002) FLC 93-091 Wirth v Wirth (1956) 98 CLR 228 |
| APPLICANT: | Mr Jagoda |
| RESPONDENT: | Ms Jagoda |
| INTERVENOR: | Mr N Jagoda & Ms P Jagoda |
| FILE NUMBER: | PAC | 778 | of | 2013 |
| DATE DELIVERED: | 31 March 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 1, 2, 3 March 2017 and 28, 30 March 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Gould |
| SOLICITOR FOR THE APPLICANT: | Hancock Alldis & Roskov Lawyers & Notaries Public |
| COUNSEL FOR THE RESPONDENT: | Mr Greenaway |
| SOLICITOR FOR THE RESPONDENT: | Doolan Callaghan Family Lawyers | |
| COUNSEL FOR THE SECOND & THIRD RESPONDENTS: | Ms Murphy | |
| SOLICITOR FOR THE SECOND & THIRD RESPONDENTS: | Griffiths Delaney & Co |
Orders
The wife is to forthwith sign and deliver to the husband a duly executed form of Transfer sufficient to enable the transfer of her right, title and interest in the Suburb T property (Folio Identifier …12 and …57) to the husband, subject to the mortgage to St George Bank registered number …14.
A declaration that the husband is to hold his interest in the Suburb T property upon trust for the second and third respondents.
The husband, as and when required by the second and third respondents, is to sign and deliver a Transfer of the title to the Suburb T property from himself to the second and third respondents subject to the mortgage to St George Bank registered number ...14 (should the property still remain as security for that loan) or subject to any other loan the husband has obtained to discharge that mortgage.
The wife, within three (3) months from the date hereof, is to:
(a)Pay the sum of $195,827 to the St George Bank Portfolio Loan account as a partial repayment of capital on that loan;
(b)Discharge the mortgage to St George Bank obtained by the parties to purchase the Suburb V property in the joint names of the parties (loan numbers …01 and …00); and
(c) Pay to the husband the sum of $96,329.
Contemporaneous with the wife complying with Order (4) hereof the husband is to provide a duly executed Transfer of his interest in the Suburb V property (Folio Identifier …31) to the wife.
Upon either the payment by the wife to the St George Bank in reduction of the St George Bank Portfolio Loan of the husband and wife, as provided for in these Orders, or upon the payment as against that loan following the sale of the Suburb V property as required by these Orders, the husband, on behalf of the husband and wife, is to be solely responsible for the payment of the balance of the St George Bank Portfolio Loan then remaining to the St George Bank and shall indemnify the wife against any requirement to make any payment on the Portfolio Loan.
Within six months of either the wife complying with order (4) hereof or the sale of the Suburb V property pursuant to these orders, the husband is to cause discharge of the liability of the wife to the St George Bank in relation to the St George Bank Portfolio Loan. The requirement of the husband to comply with this order is to operate as a charge, in favour of the wife, against the Suburb T property with such charge to have a right of sale to enforce same.
In the event of the St George Bank not consenting to the registration of the transfer of the title to the Suburb T property from the wife to the husband, the husband is to hold the Transfer document and not seek to register same until he has been able to make other arrangements with the St George Bank, or any other financial institution, to refinance or otherwise pay out the amount owing on the St George Bank Portfolio Loan.
Until the husband creates a circumstance where the wife is no longer liable for any of the St George Bank Portfolio Loan, neither the husband nor the wife is to withdraw or “draw down” any further funds on that loan.
Upon the wife complying with order (4) hereof or upon the completion of the sale of the Suburb V property, the husband is to indemnify the second and third respondents against payment of all or any of the liability of the husband and/or the wife to the St George Bank in relation to which the said bank holds the title to the Suburb T property as security.
Until the transfer of the Suburb T property to the second and third respondents is completed by the husband, he is restrained from further encumbering or dealing with the title to the Suburb T property without first obtaining the written consent of the second and third respondents.
Until the husband has taken action which causes the wife’s liability to the St George Bank for the St George Bank Portfolio Loan to be discharged, otherwise than as may be necessary to comply with these orders, the husband is not to borrow any other money nor enter into any other contract or arrangement to acquire any other real property.
In the event that the wife fails to make the payments required by Order (4) hereof in the time stipulated then the parties are to forthwith do all things necessary to cause the Suburb V property to be sold for the best price reasonably obtainable and from the sale proceeds cause the funds to be paid as follows:
a)Payment of sale expenses including real estate agents’ commission and legal/conveyancing costs of sale;
b)Payment of the St George loan taken out to purchase the Suburb V property (number #01);
c)Payment of the St George Loan taken out on Suburb V property (loan number #00);
d)Payment of $195,827 to the St George Bank Portfolio Loan account for the mortgage secured against the Suburb T property (the wife’s half share); and
e)From the sale proceeds then remaining the wife is to receive 65.2% of the balance and the husband is to receive the residue.
Each of the husband and wife have leave to publish a copy of these Orders to the St George Bank so that a record of restrictions on the operation of the Portfolio Loan account (… number …37) can be noted together with other aspects of the Court’s Orders which touch upon that account or that banks securities.
In the event of the St George Bank refusing to release the security it holds in the Suburb V property upon payment of the funds outstanding on the Suburb V mortgage and $195,827 of the funds outstanding on the St George Bank Portfolio Loan, then to the extent that payment is required to be made to reduce the portfolio loan to a greater extent than the payment of $195,827 would achieve, such greater payment is to be charged, in favour of the wife against the title to the Suburb T property, with the wife to have a power of sale in relation to that charge which she may exercise at the conclusion of six months from the time of the payment made to the St George Bank which gave rise to the charge. The charge is to carry interest at the rate prescribed under the Family Law Rules. The husband may pay out the charge, together with any accumulated interest and any costs, fees expenses paid or incurred by the wife in action taken under the charge, at any time prior to the sale of the Suburb T property pursuant to the power of sale vested in the wife by these orders.
The wife may, at her option, register a caveat against the title to the Suburb T property in order to protect the charge hereby created. The second and third respondents are restrained from taking any action to have such caveat removed other than by application to this court.
The power of sale attaching to any charge created by these orders in favour of the wife is to enable the wife to cause the Suburb T property to be sold for the best price reasonably obtainable and apply the net sale proceeds to discharge the liability then outstanding on the St George Portfolio loan, meet any costs and fees incurred and/or paid by the wife in causing the sale, meet any interest payment due to the wife by any of these orders, pay any other sum due to the wife under these orders and pay any balance thereafter remaining to the second and third respondents.
The second and third respondents are restrained from dealing with their beneficial interest in the Suburb T property, including selling, transferring or financially encumbering same, otherwise than for the purpose of discharging the St George Bank mortgage secured against the property or satisfying any charge in favour of the wife, created by these orders and secured against the Suburb T property, unless the written consent of the wife to any such dealing has first been obtained or an order of this court made.
In the event of either party failing to sign any document necessary to execute the orders made herein, then pursuant to section 106A of the Family Law Act 1975 (Cth) the Registrar of the Court is hereby appointed to execute such documents in the name of the defaulting party.
Either party may apply to the court on short notice should it be necessary to seek any further order implementing any of the Orders made herein.
NOTATIONS:
The “Suburb T property” referred to in these Orders means all the land in Folio …12 and …57.
The St George Bank Portfolio Loan means registered mortgage number …14 secured against the Suburb T property and relating to the St George Bank loan to the husband and wife identified as account …37.
The “Suburb V property” referred to in these Orders means all the land in Folio …21.
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 Jagoda & Jagoda 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 SYDNEY |
FILE NUMBER: PAC 778/2013
| Mr Jagoda |
Applicant
And
| Ms Jagoda |
Respondent
And
Mr N Jagoda and Mrs P Jagoda
Second & Third Respondents
REASONS FOR JUDGMENT
Introduction
Each of the parties to the marriage in this matter, Mr Jagoda (“the husband”) and Ms Jagoda (“the wife”), are the Australian raised children of immigrant parents who have clearly worked hard to achieve an asset portfolio which might support them in old age and provide a platform for their children to have a head start in their own lives as adults.
Being raised in similar cultural backgrounds would clearly have been one of the characteristics which attracted the husband and wife to each other and probably pleased their parents.
Unfortunately the lofty ambitions which each parental group held for their children may have caused a situation to arise which created an irreparable breach to the relationship between the husband and wife and has given rise to their seven year old child being deprived of the security of a close knit family environment.
The husband and wife agreed to final parenting orders which were made on 8 February 2017, only a few days before the trial commenced. The parties, who include the husband’s parents Mr N Jagoda (“the second respondent”) and Mrs P Jagoda (“the third respondent”), require the property proceeding to be determined by the Court.
The issues which have been unable to be resolved include major items such as whether the husband and wife hold the title to a property at D Street, Suburb T (“the Suburb T property”) as trustees for the second and third respondents, and whether the husband and wife provided between $296,000 and $300,000 to Mr Q (the wife’s father) as a loan or as an investment in a business enterprise or partnership for building houses and developing property. Much of the hearing time was dedicated to evidence touching on those two issues.
The jurisdiction to determine the orders sought by the second and third respondents was not challenged before me. The second and third respondents relied upon the decision of Warby & Warby (2002) FLC 93-091 (“Warby”) to establish that this Court has accrued jurisdiction to determine the dispute between the wife and the second and third respondents as it is necessary to do so in order to determine what property is available to the Court to divide between the husband and wife. With respect, I agree this case does fall within the body of cases described in Warby as being within the jurisdiction of the Court to determine.
Background Facts
Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
There are facts in this case which are not in issue. Those facts are as follows.
The husband and wife were born in 1981 and are both currently 34 years of age.
The parties were married in 2005. That was the commencement of their cohabitation. The parties separated on 16 November 2010 and divorced in 2013.
There is one child of their union, namely B, who was born in 2009 and is currently seven years of age. Orders have been made by consent on 8 February 2017 which provide for B to live with the wife and spend time with the husband from 10.00 a.m. Saturday to 12.00 p.m. Sunday each alternate weekend and each other Sunday from 10.00 a.m. to 5.00 p.m. There are other occasions specified in the Orders made 8 February 2017.
The husband is employed by C Company Ltd (“C Company”) as a manager. His wage is estimated to be $1,080 per week. He commenced work with H Company in November 2005. That company became owned by C Company at a later time.
The wife is employed by X Group as a technical officer. She has a base salary of $60,027 and superannuation of $5,703. That provides her with a base salary of $1,154 per week. However, in the 2016 tax year she received a taxable income of $87,855 from her employer.
At the time of the marriage the second and third respondents, together with their son Mr F, were the registered proprietors of the Suburb T property. Mr F is the husband’s brother.
Shortly after the marriage, in July 2005 the wife received a payment of $100,000 being the award of damages following a successful “third party” claim made by her at a time prior to the marriage.
After returning from their honeymoon in 2005, the husband and wife commenced to reside in the Suburb T property. No rent was paid to the then registered proprietors of Suburb T, however, the council and water rates and service charges were paid by the husband.
Between the date of the marriage and November 2005 the husband worked for the wife’s father. He had previously worked for C Company and left that employment in 2005, before the marriage, when he commenced employment with H Company.
On 19 December 2005 the wife’s parents signed a document which evidenced a gift made by them of $39,000 to the wife in September 2003 being a deposit paid on a unit situated at Suburb V. The document also states a gift of $110,000 to the wife at the date of the document to assist with the purchase of that unit. The wife had entered into a contract to purchase the unit in 2003 “off the plan” and was required to settle the purchase at the end of 2005 which she did.
In order to complete the purchase of the Suburb V property the parties borrowed $160,000 from the St George Bank and the property was acquired in the joint names of the husband and wife.
In 2007 the husband and wife moved into the Suburb V property.
On 26 September 2007 each of the former owners of the Suburb T property (that is, the second and third respondents and Mr F Jagoda) signed a transfer of their interest in the Suburb T property in favour of the husband and wife as joint tenants. There was a stated consideration of $265,000.
In the year ended 30 June 2006 the wife filed a nil income tax return. In the 2007 tax year the wife had a taxable income of $22,769. In the 2008 tax year her taxable income was $29,913. In the 2009 tax year her taxable income was $32,117. In the 2010 tax year her taxable income was $2,018.
In the following tax years the wife had the following taxable incomes:
·2011 taxable income $28,573
·2012 taxable income $23,923
·2013 taxable income $42,811
·2014 taxable income $62,319
·2015 taxable income $85,525
·2016 taxable income $87,855
The husband commenced employment with H Company in November 2005 with a salary of approximately $43,000 per annum. The husband’s tax returns were not in evidence. However, in 2012 the husband’s taxable income was $80,441, and in 2015 his taxable income was $60,035
At some time prior to the birth of B the husband’s parents gave him a European car. After B was born the husband sold the vehicle and gave the proceeds of the sale to his parents. The amount of sale proceeds is not the subject of evidence.
At the time of the marriage the wife was driving a motor vehicle being a small sedan. This was registered in her father’s name and was used by her throughout the marriage.
About a month before B was born the husband and wife acquired on lease the 4WD1 motor vehicle. At separation the vehicle remained in the possession of the wife.
The husband has not paid any of the mortgage instalments on the Suburb V mortgage since separation. The wife has paid the instalments, or had them paid by her father on her behalf since the separation.
Between the completion date of the purchase of the Suburb V property in December 2005 and the husband and wife moving into the Suburb V property in 2007, the property had been leased and the income applied to meet the parties’ commitments on the property.
In 2007 when the parties moved to the Suburb V property, the Suburb T property was rented and the income of $350 per week applied towards the mortgage payments on the Suburb V property.
In December 2008 the husband and wife obtained approval for a Portfolio Loan from St George Bank which would provide them with up to $390,000 in borrowings. The security for the loan was both the Suburb V and the Suburb T property.
Orders sought
The husband sought the orders contained in his Initiating Application filed 10 April 2014. He sought that the Suburb V property be sold and the net proceeds be distributed by way of 45% to the husband and 55% to the wife. He sought that he and the wife transfer to the second and third respondents their interest in the Suburb T property. He also sought that the wife transfer the 4WD motor vehicle to the husband.
The wife sought the orders set out in Exhibit W5. The wife sought that the husband transfer his interest in the Suburb V property to her, and that she transfer her interest in the Suburb T property to the husband. Contemporaneously with those transfers, the wife sought that both parties discharge the mortgages secured over the Suburb T and Suburb V properties, and that the wife be responsible for only $185,000 as against the Suburb V mortgage, and that the liability against the Suburb T property be met solely by the husband. The wife sought orders to retain the 4WD vehicle, her superannuation entitlements, and any bank accounts she holds.
In submissions the wife said that should the Court find against her in relation to the trust argument and consequently find that the husband and wife are not the beneficial owners of the Suburb T property, then it was submitted it would be just and equitable to apportion the Portfolio Loan between the husband and wife in terms of specific responsibility for payment of same as between them. It was further submitted that if the second and third respondents are successful, then it needs to be remembered that the title to the Suburb T property was provided for the purpose of enabling it to be encumbered by a loan borrowed by the parties and there is no requirement for the Court to return the property forthwith to the second and third respondents unencumbered.
As a consequence, the wife seeks in those circumstances that the husband’s portion of the Portfolio Loan continue to be secured against the Suburb T property notwithstanding that the Court finds that the property is held on trust for the second and third respondents. It would then be a matter for the husband and his parents to negotiate any further facility on the title to the property.
The second and third respondents sought the orders contained in their Response to Initiating Application filed 23 January 2015. They sought that a declaration be made by the Court that the husband and wife hold 100% of the Suburb T property upon trust for the second and third respondents, and that the husband and wife transfer the Suburb T property to the second and third respondents, with the costs of the transfer to be met by the husband and wife.
Affidavit Evidence
Affidavit evidence of the husband in relation to contentious facts
I hereunder set out facts arising from the affidavit evidence of the husband which address issues of fact in this hearing.
The husband asserts that the wife did not contribute to any of the expenses of the family during the cohabitation. This was not put to the wife in cross‑examination.
The husband alleged that the Suburb V property had been purchased by the wife’s father “off the plan” although he thought the wife’s name may also have been on the contract. The husband said he heard the wife’s father say in 2005 “I purchased a property in Suburb V off the plan and this will be given to [Ms Jagoda] after she’s married”. This was not put to the wife’s father in cross-examination; however, the document evidence provided by the wife suggests she was correct when she said the property was purchased in her sole name.
The husband said that after the marriage the wife told him her father could not afford to complete the purchase of the Suburb V property and they would have to borrow to complete the purchase. The husband said there was a conversation where the wife’s father said “I will pay off any loan you will have to take out to finalise the purchase”. That was not put to the wife’s father in cross‑examination. The husband said the parties borrowed $170,000 from St George on mortgage, however, this proved to be incorrect as evidenced by a document exhibited to the wife’s affidavit. The amount borrowed was in fact $160,000.
The evidence is that the wife’s father did not pay any of the loan instalments on the St George loan that was obtained to acquire the Suburb V property, during the cohabitation of the husband and wife.
After the husband and wife completed the purchase of the Suburb V property, the husband says that the wife’s father in February 2006 asked for return of $10,000 which was paid to him. That was not put to the wife’s father in cross‑examination.
Between 2005 and 2007, the husband and wife leased the Suburb V property which provided an income of about $400 per week. In 2007, the husband and wife moved into the Suburb V property. The husband has not made any payments in respect of the Suburb V property since the date of separation.
In relation to the Suburb T Property, the husband asserts that sometime before the transfer of the property into the names of the husband and wife, his parents said to he and the wife, in the presence of Mr F Jagoda, the following:
We want to help you and [Ms Jagoda]. We understand you need help, especially with your current debts ... We want to transfer our property in both your names to help you out in your life. It can be transferred back to us once you’re back on your feet.
The husband asserts there were other conversations in the presence of himself and the wife where his parents said “Once you and [Ms Jagoda] are finally able to purchase a house, you can transfer it [the [Suburb T] property] back into our names.”
The $390,000 Portfolio Loan from St George bank
It is the husband’s case that in 2008 he and the wife decided to look into purchasing a property for themselves. To that end, the husband says that towards the end of 2008 they borrowed $390,000 from St George Bank (“the Portfolio Loan”).
Prior to borrowing those monies, the husband had a conversation with his parents. He said he had contemplated transferring the Suburb T property back to them and asking them to guarantee his loan. He said he discussed this with them. He deposed that his parents said to him “You will be out of pocket transferring the title (Suburb T) at this stage. It is another step backwards for you. We want you to move forward so we will do everything we can to help.”
The concept of having his parents guarantee a loan for the husband and wife had, according to the second respondent’s evidence (at paragraph 22 of his affidavit), been ruled out before the Suburb T property was transferred to the parties in September 2007.
It is the husband’s case that sometime in 2009, after obtaining the Portfolio Loan, the wife’s father prevailed on him to lend him that sum. The husband said that the wife’s father said the following to him:
You know I will be able to pay you back. I own my own home in [Suburb J] which is valued at $1,800,000, two properties at [Suburb M] each valued at over $4,000,000, two units [in South East Queensland] valued over $500,000 each and a Penthouse in North Queensland valued at $600,000. I just need the money to finish off the properties at [Suburb M].
The husband said that the wife also sought to convince him to lend the funds to her father. The husband said the wife said to him “You don’t appreciate my parents. If you don’t lend my dad the money he asked for, I will leave you.” In cross-examination of the husband it was put that this was never said by the wife. I note here that I have difficulty accepting the wife actually made that threat given, the evidence I do accept about the efforts she went to preserve the marriage at the time of separation and following.
It is the husband’s case that he finally agreed to lend the money on condition to the wife’s father. The husband deposed to agreeing to lend the money on the following conditions:
The money will only be used to develop and complete the properties at [K Street, Suburb M] and [L Street, Suburb M} (“the [Suburb M] Properties”);
[The wife’s father] will be responsible in making the Portfolio Loan repayments plus interest on whatever sums are withdrawn; and
To sell the two [Suburb M] properties and transfer $100,000 from each property as a gift to [the husband]. This was in return for … the [Suburb T] Property, being used as security for the Portfolio Loan.
The husband said no security was provided by the wife’s father for the loan.
In 2009, the husband said he became aware that the wife’s father was using the funds from the Portfolio Loan otherwise than for the specific purpose of the development of the two properties at Suburb M. In particular, the husband referred to a payment of $16,000 to pay a credit card liability of the wife’s father. The husband asserts that when he saw the credit card against which the payment was to be made, there were no purchases of building materials in the statement. The husband says that despite his stated concerns about this to the wife, she continued to press for the continuing loan of monies to her father.
The husband says that in late 2009, he had a conversation with the wife’s father who asked for $40,000 to “finish off the [Suburb M] properties.” The husband said “How could you need money to finish off houses that are already finished and that you are renting.” The wife’s father said “It’s none of your business why I need the money for. When you loan someone money, you have no right to ask any questions as to what it’s for.” The husband said “[Mr GG] [the wife’s brother-in-law] had requested the exact amount. Is that why you really want it?” The wife’s father said “Yes. Are you happy now? It shouldn’t make a difference what the money is for.”
The husband said he then spoke to the wife about the further payment of $40,000. She said to him:
I know where the money is going. You shouldn’t question my dad about it. You have no right to ask questions about the money. When you lent the money to dad, you shouldn’t worry about where it is going. He will pay the money back in full and give you a total of $200,000 so you shouldn’t ask questions.
Between 2007 and 2009 the husband said he worked as a labourer on the Suburb M properties with the wife’s father most weekends. Although he understood he was to receive $200 per day for his work, he asserts the wife’s father avoided paying him. He said the wife’s father said to him “I’m building these properties for you and my future grandkids. Your (sic) helping in providing for their future.” At times when the husband was working with the wife’s father and voicing his desire to cease working, he said the wife’s father said to him “The sooner the properties are completed, the quicker they would be sold and the quicker you will get your money.”
Shortly after the birth of B in 2009, the parties moved to a two bedroom unit in the same block of units at Suburb V where they had been living. They also purchased the 4WD1 in July 2009.
In 2009, the husband sought from the wife’s father repayment of the loan. He asked the wife’s father “When am I going to get my money?” In another conversation he asked the wife’s father “Why have you not put the properties up for sale?” The wife’s father responded “When I signed the rental agreement, the real estate agent told me I cannot sell the properties for at least 18 months while the properties are being leased.” The wife’s father refused to show the husband the rental agreements.
The husband asserts that between February 2009 and February 2013, a total of $360,000 was paid from the Portfolio Loan account to the wife’s father. The husband acknowledges that on 5 March 2012, the wife’s father made a deposit of $40,000 to the Portfolio Loan. The husband says that in about February 2014, he withdrew $30,000 from the Portfolio Loan account. He says that until 31 March 2014, the wife’s father paid the interest payment on the Portfolio Loan.
In April 2010, the husband and wife established a business called N Company. This was a business to be operated by the wife providing designs for new homes, alterations and extensions for various clients.
The husband currently lives in the Suburb T property.
Affidavit evidence of the wife in relation to contentious facts
The wife asserts that during cohabitation she applied the whole of her income towards the assets and expenses of the family.
D Street, Suburb T
The wife deposed that at the date of the marriage the husband held a half share in the title of the property located at W Street, Suburb PP, with his brother F Jagoda. At the same time, the Suburb T property was held in the name of F Jagoda and the second and third respondents. The wife deposed “My understanding at the time was that despite how the titles were held, both properties belonged to [the husband’s] parents.”
The wife asserts that prior to the marriage, the husband said to her “Mum and dad are going to gift one of their units to me and one of their units to [Mr F Jagoda] when we get married. At the moment I have [Suburb PP] and [Mr F Jagoda] has [Suburb T] but we are going to swap.”
When the husband and wife were engaged in 2004, the wife said she had a conversation with the husband’s parents in the presence of the husband, during which the husband’s parents said “We want to help you out and give you a head start in life. Whatever your parents give, they give, but we will be giving you a unit paid off. We are almost there in paying the unit off and once we have done so, we will transfer it into your names.”
The wife says that at no time was she told by the husband or any other relevant person that the Suburb T property remained in the beneficial ownership of the husband’s parents.
The wife says that prior to moving into the Suburb T property, renovations were carried out, including to the kitchen, bathroom, laundry, bedrooms, and other parts of the unit. Her description of the renovations suggest they were substantial. The wife asserts her father paid $25,500 for the renovation works, and arranged for and supervised all relevant tradespersons to carry out the works. She said her father also carried out work on the Suburb T property himself, and did not charge the parties for his services.
The wife says that she and the husband paid all outgoings on the Suburb T property during their cohabitation.
Shortly after the property was transferred into the husband and wife’s names in 2007, they moved to live in the Suburb V property and rented the Suburb T property. It is the wife’s case that the Suburb V property provided better facilities. The rental from Suburb T was applied to meet the Suburb V mortgage repayments.
At the time of separation, the husband gave notice to the Suburb T tenants and commenced to reside in the property himself. The husband continues to reside in that property. In March 2011, the wife moved to live in the Suburb V property. She remains living there with B.
The St George Portfolio Loan facility for $390,000
The wife says that $390,000 was borrowed at the husband’s instigation because he wished to purchase vacant land and build a house. The wife said she signed the last page of the loan application form and did not otherwise read it. She trusted the contents of the document were correct.
After the loan had been obtained, the wife says that she and the husband looked for houses and soon discovered that asking prices for properties which they considered suitable was in the region of $700,000. She said that was outside their budget.
The wife says she had a conversation with the husband where she said “Let’s sell the units (Suburb V and Suburb T) and we’ll be able to buy a house”. The husband replied “Why would I sell the units where one is paid off and the other unit can service itself?” The wife replied “So we can buy a house for our family.” The wife says the husband responded “I’m not selling the units, that would be the dumbest thing to do.” He said “I think we should invest our money with your dad so we can make money with him, and in the meantime we will rent a bigger unit.”
The wife says the husband then approached her father about investing the $390,000 borrowings with him. She heard a conversation between the husband and her father in about early 2009 to the following effect:
Husband: “My loan of $390,000 has been approved, we want to invest the money with you.”
[Wife’s father]: “Don’t you want to buy a house?”
Husband: “Yes but we don’t have enough money and I don’t want to sell the units. I know you have a loan from a private lender, so instead of using their money, me and [Ms Jagoda] want to be a part of your investments and hopefully we can all make money from it.”
[Wife’s father]: “Yeah OK but are you sure you want to do this.”
Husband: “Yes.”
[Wife’s father]: “At the moment I’m not getting the price point to sell L Street and once I do get the price I will sell this property and give you a profit from the sale. I will contribute $100,000 that would go into labour and materials to be used towards your future home that I would help loan money for you.”
Husband: “OK, I’m in no rush.”
[Wife’s father]: “You will pay the repayments on the Portfolio Loan from the $390,000. You can transfer the money upon request when I need it to pay for the upkeep and running costs until L Street is sold as this is what I use the money for with other private lender.”
Husband: “Yeah OK I am fine with this.”
Thereafter, the wife says sums of money were transferred by the husband to her father. She said she did not have any involvement in the transferring of the money. The wife says that during the marriage the husband looked after the parties’ accounts and finances.
The wife deposed:
It was agreed between me, the husband and my father that in return for my father’s use of our moneys from the Portfolio Loan, the husband and I would receive a share of the profit from the sale of the property at [L Street, Suburb M], in the total amount of $100,000 to be paid in the form of labour and materials to be given to the husband and me when we purchase land on which to build our house.
The wife says that at the time the $390,000 was provided to the parties, her father was working on a property at K Street, Suburb M, which development had been completed in 2005. In addition, there was a property at L Street, Suburb M. She says that property was completed in February 2009.
The wife said that the husband had worked on both of those properties and had not been paid by her father, however, she asserted her father had paid for service costs of the parties’ vehicles, and had bought household goods and appliances which the parties had wanted.
The wife says she has been informed by her father and accepts that $296,000 was withdrawn from the Portfolio Loan and paid into the wife’s parents’ account. She has verified that sum by reference to bank statements to the loan.
The wife asserts that the husband also used monies from the Portfolio Loan to pay for car payments in respect of the 4WD1 motor vehicle, strata levies for the Suburb T and Suburb V properties, and other utility bills. Further, she asserted that rent for the Suburb V rental apartment occupied by the parties was paid from the Portfolio Loan.
The wife asserts that the parties’ European motor vehicle was sold just prior to the birth of B in August 2009. The sale price was $30,000 and was deposited into the Suburb V home loan. This is contrary to the husband’s evidence that the funds were given by him to his parents, which evidence I have accepted.
The wife asserts that in February 2009, her father leased the property at L Street, Suburb M for two years at $3,000 per week. In November 2009, the tenant broke the lease after nine months. The wife’s father entered into a further two year lease at $3,000 rent per week. The wife asserts that the husband, her father, and herself all agreed to the rental.
The wife says that in June 2010, the husband wanted “to retrieve” the money from the Portfolio Loan. The wife deposed that the husband said to her “You better pay my money in full. I want the money back now. You think I’m not serious. I will put you and your father six feet under. People kill each other over $1,000. I’m going to kill you in your sleep you dumb bitch.”
On 16 September 2010, the husband withdrew $32,000 from the primary loan over the Suburb V property and purchased the 4WD2 motor vehicle. This is the vehicle which the husband says he purchased in his brother Mr F Jagoda’s name.
It is the wife’s case that she sought a reconciliation with the husband following their separation in November 2010. She considered that if she could retrieve some of the money from her father, it may give rise to a reconciliation.
The wife asserts that in the months prior to the separation, the husband had withdrawn, for his own personal expenses, $20,422.67 from the Portfolio Loan. (Evidence of how this amount was made up was not provided at the hearing.)
The wife asserts that from the date of separation until mid-2014, the wife paid all payments on the Suburb V mortgage and her father made repayments on the Portfolio Loan.
On 5 March 2012, the wife said her father deposited $40,000 into the Portfolio Loan account. On 21 May 2012, the husband withdrew that sum. On 2 December 2013, the husband deposited $35,000 into the Portfolio Loan account. On 3 March 2014, the husband withdrew $31,788.79. The wife says those funds have not been returned to the Portfolio Loan account.
Since separation, the wife has been solely responsible for the maintenance to the Suburb V property. She has carried out that work either herself or with the assistance of her father.
Throughout the cohabitation, the wife was primarily responsible for attending to the domestic aspects of the parties’ marriage. She has also been primarily responsible for B’s care. The wife considered that the husband assisted in those areas of homemaking and caring for the parties’ child. B was only 14 months of age when the separation occurred. The husband’s time with B did not amount to extensive periods until B was at least four years of age. At that time she was spending a whole day each weekend with him. After 4 February 2017, B commenced spending more time with her father pursuant to the agreed parenting orders. This includes one overnight per fortnight. Until this time, the wife has been solely responsible for the day-to-day care of B.
Post separation contributions
The wife asserts that from the date of separation in November 2010 until 3 February 2017, she has made, or her father has made on her behalf or otherwise, payments in the sum of approximately $188,444 in respect of the loans from St George. Of that sum, $87,432 were repayments on the Portfolio Loan. There was a one-off payment of $40,000 by the wife’s father into the Portfolio Loan. A total of $53,391 have been made in repayments on the Suburb V home loan account (the primary loan account), and $7,620 on the secondary loan. The wife asserts that the husband has paid, during that same period, a total of $51,490 to the Portfolio Loan.
The wife says that when the loans fell into arrears, the husband sought that the Suburb V property be sold. The wife would not agree.
The wife asserts that the payment on the 4WD motor vehicle due in 2014, in the sum of $14,000, was paid by the wife’s father in June 2014.
Since separation, the wife asserts she has paid $26,821 in expenses solely attributable to the child. She has also paid strata levies and special levies on the Suburb V property in the sum of $45,478. The wife’s father pays B’s school fees.
The wife says that prior to the separation, $11,617 was paid out of the St George Portfolio Loan as payments on the 4WD1 finance, and until 25 March 2011, $45,407 had been paid out as rental for the Suburb V property which had been occupied by the parties until separation.
The wife says the husband also withdrew monies from the Portfolio Loan account to meet personal expenses post separation. She did not specify what those sums were.
Affidavit evidence of Mr Q
Mr Q is the father of the wife in the proceedings. In 2005, the husband worked for Mr Q as a labourer for some months. It is asserted by Mr Q that during that time, the husband “became very familiar with both my property development business and my financial arrangements.” Mr Q does not provide any details as to how the husband became “very familiar” and thus in the absence of specific evidence elsewhere in this hearing, weight of substance to such an assumption cannot be given.
In late 2007, work started on L Street, Suburb M. At that time, Mr Q had a conversation with the husband. The husband said “I’d like to come and work with you on the L Street development. Mr Q replied “Sure, we are allowed to work for 4 hours on Saturdays. You can work with me on site each Saturday.”
Mr Q says the husband commenced working for him on 2 February 2008, and thereafter for four hours each Saturday. His last day of work was 13 December 2008. Mr Q kept a timesheet for the husband’s work. The husband was not paid directly for the work he performed, which totalled $8,350. Instead, Mr Q paid for bills and other items for the husband and wife. This included paying for their cars to be serviced and repaired and payment for the installation of a wardrobe in the Suburb V unit and an air conditioning unit.
In 2008, Mr Q obtained an approval for a second mortgage in the sum of $400,000 secured over L Street. The provider was Brixsand Pty Limited (“Brixsand”). The term was for 12 months, and the interest rate was 10% per annum. The loan required payment of interest only during its term. The date of the approval of the loan was 18 September 2008.
Mr Q says that about the same time that he obtained the private loan of $400,000, he became aware that the husband and wife obtained a loan facility from St George in the sum of $390,000. He records that the husband told him “Our application for the $390,000 loan has been approved. Now I’m ready to look at buying a block of land or an old house to rebuild on” and “I don’t want to sell the units, I want to keep my assets and build up my property portfolio the same way as you.”
In the weeks that followed the husband and wife obtaining the $390,000 loan, Mr Q records each of the husband and wife saying to him word to the effect “We didn’t realise how high property prices are. We would have to pay more than $700,000 plus the building costs of $400,000, it’s out of our budget.”
Mr Q said he was aware that the husband and wife’s interest rate on their loan was 8%. This was 2% lower than the rate of interest he had negotiated with Brixsand. Mr Q said he had a conversation initiated by the husband as follows:
[The husband]: “I can see I can’t get into the property market, the prices are well over our budget. We can’t buy or renovate a home, we don’t have enough money. We have talked about it and we would like to invest our $390,000 into your business.”
[Mr Q]: “Okay great. When I sell L Street, I’m sure I will get a good price, the market is strong right now. I will give you a $100,000 bonus. We could then look at buying a joint property for you and I using my assets to borrow against this property. The only condition would be that we have three names on the title. This would let you keep your two units.”
[The husband]: “That’s great, let’s start straight away. Stop using the money from Brixsand and start using the $390,000 instead. You tell me when you need payments and I will transfer them to your account.”
[Mr Q]: “Okay. Condition is I only pay interest on what I draw down on from the $390K. The money I draw down on I will pay the interest on. But don’t use this money for your personal expenses.”[The husband]: “That is fine, I don’t need to touch this money.”
[Mr Q]: “The interest repayments on the money used from the $390,000 would come out of the same account to service the loan.”
[The husband]: “Okay.”
Mr Q said the agreement entered into was oral and there was nothing reduced to writing.
After the said agreement was reached, Mr Q says the first payment of money to him occurred on 25 February 2009, with a payment of $5,000. Between that date and 24 May 2010 a total of $296,000 was transferred into his bank account. Mr Q has annexed to his affidavit statements from his St George bank account for the period 1 February 2009 to 30 September 2009, and from 1 May 2010 to 31 May 2010. However, the addition of the deposits does not reach $296,000. I accept as an admission that he did receive the total sum of $296,000 from the Portfolio Loan funds, there being no objective evidence to the contrary.
The development at L Street was completed in February 2009. A sale price was set for the property for $3,750,000. A real estate agent in Suburb M was engaged to sell the property. The sale price was not reached. The real estate agent was instructed to rent the property at $3,000 per week.
Mr Q said he had the following conversation with the husband:
[Mr Q]: “It looks like we’re not going to get the right money for L Street now. The agent says we could get $3,000 a week, what do you think? The rental market is strong but sales are low.”
[The husband]: “I’m okay with this, I’m not in a rush.”
The property was rented on a two year term. Mr Q calculated that the rental income was sufficient to service the repayments required on the $390,000 facility.
After nine months, the tenant vacated the property. The property was put back on the market for sale in June 2010. Mr Q was advised that a sale price of $3,750,000 would not be attained. A lease was entered into for a two year period at a rental of $3,000 per week. Mr Q says “The lease contained a condition that the house could not be sold during that two year period.” Mr Q asserted that the husband and wife agreed to that condition and to leasing the property. The lease commenced in October 2010.
On or about 20 September 2010 (prior to the L Street property being leased in October of that year) Mr Q said the husband asked him for a payment of $10,000 in order to buy a 4WD2 motor vehicle. Mr Q said that the husband transferred funds out of Mr Q’s CBA bank account to the husband and wife’s accounts (inferentially $10,000) in Mr Q’s presence and in his house.
Mr Q says that after that transaction, the husband’s behaviour towards him changed. The husband demanded the repayment of the $390,000 plus $100,000 profit. Mr Q said the following conversation occurred:
[The husband]: “I want my money back and I want my profit. You need to pay it back in full and pay it back now.”
[Mr Q]: “We can’t move forward without me selling L Street. We never agreed for me to give you your money back nor the profit in cash. As you know the house market has slumped and I can’t see us making any profit if we sell in this market. We need to be patient and hold on until the market gets back up again. We all agreed to secure the 2 year lease on L Street and we can’t break the lease now. Why are you pressuring and threatening me to sell the house now?”
[The husband]: “Just give me back my money.”
I note that the lease document referred to by Mr Q was not tendered in evidence.
Mr Q says that about that same time, the husband was pressing him further and threatening him with the words “I will be reporting you to the Police”. He further said “Didn’t I fucken [sic] make myself clear. I want my fucken [sic] money back now. Do you know who I am? Do you know who we know?”
In a telephone conversation, Mr Q says the husband said to him “You can keep repaying the $390,000. You can pay the lease on the [4WD1], I’m not paying anything.”
Mr Q says that he has had access to the bank statements for the Portfolio Loan account for the husband and wife and noted that between 24 August 2009 and 25 March 2011, the sum of $45,407.72 was paid from the account as rental on the property occupied by the husband and wife, and between November 2010 and January 2014, the sum of $11,617.44 was paid as lease payments on the 4WD1 motor vehicle owned by the husband and wife.
Mr Q asserts that between 2010 and 2012, he made payments totalling $86,260 to the Portfolio Loan account. Additionally he made a lump sum payment of $40,000 on 5 March 2012. That payment followed the sale of his investment property, known as O. Further, Mr Q says that since 2010, he has paid monies for and on behalf of the wife including rent, lease payments on the 4WD1, grocery bills and cash gifts.
When the lease on L Street concluded in October 2012, Mr Q in November of that year placed the house on the market for sale. It took 12 months to sell, and it was vacant during that period. Mr Q said “I was under pressure to sell from both [the husband] and [the wife].” He said that the wife said to him “I’m hoping that if some money is put back into the $390,000 [the husband] will return to his family.”
Mr Q accepted an offer for the purchase of the property which had a delayed settlement of 15 months. Mr Q said he suffered loss on the project. The deposit of 5% was used to pay arrears which had accumulated on the property during the period of sale. The property sold for $2.62 million and there was an outstanding bank loan of $2.75 million at the time.
In paragraph 43 of his affidavit, Mr Q says “I acknowledge that the sum of $296,000 from [the wife] and [the husband’s] joint St George Portfolio Loan was paid to me. It was paid to me to be used by me on the investment at L Street.”
In paragraph 46, Mr Q says “If it was not for [the husband] threatening me and my family, we could have held on to L Street until the market recovered, which it always does, and we would have been able to sustain the investments as they were all rented out. Instead I have lost everything and I am starting all over again.”
Affidavit evidence of Mr N Jagoda
Mr N Jagoda swore his affidavit on 13 February 2017. The affidavit has the attestation of interpretation of the affidavit before execution by Mr N Jagoda.
Following the marriage between the husband and wife on 15 May 2005, Mr N Jagoda said to the husband “If you want to, instead of living somewhere else and paying rent go and live in the Suburb T unit so you can save money to buy a home”. Mr N Jagoda gave notice to the tenants of the Suburb T property to vacate. The husband and wife took up residence in the Suburb T property. The husband and wife did not pay rent.
Mr N Jagoda said he relied on the husband to assist him with aspects of the rental of the Suburb T property prior to the husband and wife marrying. He says that may have included the husband authorising the agents who were collecting the rent on the Suburb T to make payments for work required to be carried out on the unit.
Mr N Jagoda’s native language is a Balkan language. He said “I struggle with both speaking English and understanding English”. He recalled that after the tenants left the Suburb T property the husband said to him “The unit needed painting so I painted it”. Mr N Jagoda said he was aware that work had been done to the kitchen and hot water system when the unit was rented.
In about February or March 2007 Mr N Jagoda said he had a conversation with the husband. The husband said to him “I want to use the unit (ie the Suburb T property) as security to buy a house”, and “[Ms Jagoda] and I want to buy a house at Suburb R.”
During the first half of 2007 Mr N Jagoda said there were other conversations between him and the husband where the husband said to him “I want to use the property at Suburb T to get the money for a house…I want to get the money from the Bank, we can’t get the money from the Bank or anyone else if you do not help me.” Mr N Jagoda said he told the husband “I do not want to be a guarantor for you … to sign some papers for you to do something stupid and then I will lose my unit, my house … I will not be responsible for any loan you take on to buy a house”.
Following discussions with his wife Mr N Jagoda said to the husband “We will give you the unit only for help to buy a house. To borrow money to buy a house. Not for any other purpose … not to buy a car or for anything else, not even a unit. You have to buy a house … I am not going to give you the unit – just for nothing”.
In about September 2007 Mr N Jagoda said to the husband “We are not giving you the unit for nothing, I will sign whatever for you to use the unit to borrow money against the property as security to buy a house but I am not signing the unit over to you so you can have it for good.” Mr N Jagoda said the husband responded “There will be no problem, if anything happens with any partner I am with, I will give you the unit back.” Mr N Jagoda said to the husband “If I have problems or if you have problems then you will give me the unit back.” The husband responded “I agree with what you are saying”. Mr N Jagoda said to the husband “When you get in a good financial position you will give me the unit back”. The husband responded “There is no problem”, he said “The unit will be put in [Ms Jagoda’s] name as well to make it easier to get the money.”
In September 2007 Mr JN agoda said at about 2.00 p.m. the husband and the wife’s brother Mr Z came to see him at Company S where he worked. The visit was unexpected. They showed him a piece of paper. The husband said “You sign this document so I can get the money from the bank”. Mr N Jagoda looked at the piece of paper, he did not read it, he did not see a figure of $265,000. To the best of his recollection it was not there. Neither the husband nor Mr Z (the wife’s brother) explained the document to Mr N Jagoda. He signed the document. He was not aware that he signed over the property. He understood he was helping the husband and wife use the property as security.
When he arrived home from work that day his wife said to him “[The husband] came with [Mr Z] and [the husband] said Dad signed it and you have to sign it, so I signed it”. At the time that the signing took place it was the intention of Mr N Jagoda that when the husband paid the money that he was to borrow back to the bank that he had to give the Suburb T property back. Mr N Jagoda requires the transfer of the Suburb T property back to himself and his wife.
Around September 2007 Mr N Jagoda said to the husband “We want F to have the same opportunity, so you must transfer your share of the [Suburb PP] property to F if he wants to buy a property like you”. The husband responded “Of course, you are the rightful owner”.
In about 2010 Mr N Jagoda received some information, independent from the husband and/or the wife, that the Suburb T property had been used as security for a loan. He thereafter spoke to the husband and said “If you did not buy a house then I want the unit back”. He asserted that he was very upset. He conceded that the husband had broken his promise to him to use the unit to buy a house. He said the husband said to him “I can’t, I borrowed the money and I gave it to [Ms Jagoda’s] father”. Mr N Jagoda asked “How long will it take for [Ms Jagoda’s] father to give the money back?” The husband responded “Six months”. Upon subsequent enquiries about repayment the husband has told Mr N Jagoda “[Ms Jagoda’s] father has never given them money back”.
It is to be noted that the evidence of Mr N Jagoda in relation to his intention at the time of the transfer needs to be weighed with caution, given that evidence of his intent at the time of the transfer is crucial to the determination of whether a trust was created.
The consideration of evidence in such a circumstance is looked at by the Court through the process of cross-examination, the surrounding circumstances, any corroborative evidence and the credibility of the evidence of the witness.
In this case I find that the evidence of Mr N Jagoda on the intention at the time of transfer should be accepted for the following reasons:
·He was not shaken in cross-examination on that issue;
·The husband who corroborated the witness on this issue was not shaken in cross-examination on that issue;
·The wife was not privy to any conversation between the husband and the second respondent about the transfer at the time the transfer occurred;
·The transfer of the property from the second and third respondents to the husband and wife was witnessed by the wife’s brother. He was not called to give evidence to the contrary about any relevant conversation which may have taken place at the time the transfer document was signed and which might have suggested the contrary to the evidence given by the husband and the second respondent. No evidence was provided by the wife to suggest her brother was not available to give evidence;
·There is unchallenged evidence from the husband’s brother, Mr F Jagoda, about a similar transaction between the second and third respondents and he and his wife which saw a different property owned by the husband’s parents transferred to Mr F Jagoda and his wife. That transaction occurred at a time well before the husband and wife separated.
Affidavit evidence of Mrs P Jagoda
On 2 March 2017 Mrs P Jagoda, the husband’s mother, swore an affidavit. This affidavit was filed without objection and read by the interveners in the proceeding without objection. Mrs P Jagoda was not required for cross‑examination. The affidavit attests that the evidence of her husband in his affidavit sworn 13 February 2017, to the extent that it concerns her, is true and correct. There is nothing in the affidavit of Mr N Jagoda with which the witness disagrees.
Affidavit evidence of Mr F Jagoda
On 20 February 2017 the husband’s brother Mr F Jagoda signed an affidavit. To the extent that his affidavit deals with facts and issues, the following has been sworn to be correct.
The deponent confirms that the Suburb T property was acquired by his parents who included his name on the title. He made no claim to beneficial interest in the property at that time although he may well have been entitled himself to rely upon the presumption of advancement.
The deponent says that Mr N Jagoda said to him “[The husband] has approached me and asked if he can use the [Suburb T] property as security to borrow money to purchase a house in [Suburb R]”. The deponent said “What did you say to him?” and Mr N Jagoda responded “I am letting him use it for security to get money from the bank.” Thereafter the deponent says the husband made contact with him and said “Has dad spoken to you regarding me and [Ms Jagoda] wanting to purchase a house?” and the deponent replied “He did”. The deponent said that later that afternoon the husband attended upon him and the deponent signed the documents. At the time the husband said to the deponent “This is a banking document to get the funds from the bank to purchase the house in Suburb R”.
In September 2008 the deponent says he and his wife were in a position to purchase “our own place”. He asked his father “Dad can I use [Suburb PP] as Suburb T is used by [the husband] and [the wife] already for security?” His father replied “It is fine but the same rules apply to you and [your wife] as they do for [the husband] and [the wife]. The unit is to only be used to help you get a home loan and no way is it to be sold, it remains mine.”
In October 2008 the deponent spoke to the husband and said “I want to do the same as what you and [the wife] did. I want to be in a position to be able to use the property for security to get a loan and purchase a house.”
The husband responded “It is a simple banking process and is even easier because you are on the title already. This is for the sole purpose of a loan and no solicitor is required as no purchase of any property has taken place.” The deponent then said to the husband “This sounds really good” and the husband responded “I need to take myself off the unit as I do not want to be part of your loan”.
The deponent says that the Suburb PP property (which was transferred to him and his wife by the husband) is rented. He said “Once my financial situation strengthens the unit will go back to my father as agreed”.
Oral evidence
Oral evidence of the husband
It was put to the husband that for a period of 14 months after separation he paid no child support. He denied that. He did agree that there was no child support assessment until 14 months after the separation. He denied the wife has paid all the child care and day care expenses for the parties’ child B. He did not assert that he had paid any. He agreed the wife had paid extra-curricular activities for the child such as swimming and ballet. He agreed he had not paid any hospital expenses for the child, nor paid for school uniforms.
The husband agreed that he entered into a joint mortgage with the wife in relation to the purchase of the Suburb V unit. The parties borrowed $160,000.
The husband denied that there was any consideration paid for the transfer of the Suburb T property and specifically denied that there was consideration of $265,000 notwithstanding the transfer document said that. He did not agree that the husband and wife had paid stamp duty on the transfer. He did agree that at about the time of the transfer of the Suburb T property an additional $40,000 was borrowed against the Suburb V mortgage. The husband asserted that he had paid the stamp duty on the Suburb T transfer. He paid it from his personal bank account. He said the stamp duty was $7,000. It was paid just before the loan was taken out.
The husband agreed that none of the discussions between he and his parents about the terms or conditions of the transfer of the Suburb T property into the joint names of the parties ever took place in the presence of the wife. This appears to be a contradiction to the evidence of the husband in paragraph 20 of his affidavit.
It was put that the husband and the wife’s father had a very good friendship at the time of the marriage. The husband denied that. He was aware the wife’s father was a developer and builder. He agreed he spoke to the wife’s father about developments that the wife’s father was working on. He said that this was part of general conversation. He denied he spoke in depth about any such developments. He agreed he worked as a labourer for the wife’s father. That work was performed on and off over a number of months.
The husband was cross-examined about the borrowings from St George in the sum of $390,000. He agreed he had completed the loan application document. He agreed he signed it as did the wife. He cannot remember what information he provided in that application form. He said some of the information came from the H Company database held in relation to the husband who was an employee at the time. He also asserted that the wife had provided information. He denied that the first time the wife saw the application form was when the husband asked her to sign it. He did not ensure it was accurate before he signed. He agreed that his stated income in the document of $200,000 was incorrect. His income at the time was approximately $50,000. He did not know who provided that information. He agreed when he signed the form he was stating it was accurate. He said information about his income at H Company was provided by “HR” at H Company. He said the wife had provided the information to the bank as to what security was to be provided. He did not recall that there were two properties offered, namely Suburb T and Suburb V. He thought it was only the Suburb V property that was being provided.
It was put to the husband that he knew that the security for the loan would include the Suburb T property. He said yes.
In relation to the funds obtained by loan from St George Bank in the sum of $390,000, the husband agreed that he and the wife intended to buy another property. It was to be an existing house and they had looked at three or four properties in the Suburb R area. He denied that at that time, or thereabouts, he spoke to the wife’s father about investing money with him.
The husband was taken to paragraph 24 of his affidavit where he said, in part, that in 2009 after obtaining the loan, the wife’s father continuously asked him about the loan. The husband confirmed that was the case. The husband asserted that the wife’s father had found out about the loan from the wife. He denied that he told the wife’s father he wanted to invest the money with him because he could not afford to buy another property. He denied it was his intention to do property development with the Portfolio Loan money. He denied that the wife’s father had put forward a proposition that he would give the husband and wife a profit from the sale of the L Street, Suburb M development.
The husband was asked whether there was any discussion between him and the wife’s father about $100,000 being paid to the husband. He said yes, the wife’s father told him that after the repayment of the loan there would be a payment of $100,000. He denied he had told the wife’s father to pay interest on the loan.
He asserted, as stated in paragraph 27 of his affidavit, that the transfer of the money to the wife’s father between 2009 and 2013 was done by the wife without his agreement. He agreed with the proposition that the money was paid against his will. He denied that he had physically caused the money to be transferred to the wife’s father. He denied he ever entered into an arrangement with the wife’s father about the advance of the money. He asserted it was the wife that did that. He denied he was the person who organised finances in the family during the cohabitation and that the wife deferred to him in relation to those matters during cohabitation.
It was put to the husband that there was never a threat by the wife to leave the marriage if the parties did not provide money to the wife’s father. The husband denied that was the case.
He denied he was the person who made all payments from the Portfolio Loan, although he conceded that he did make some. He was aware of money going from the Portfolio Loan to the wife’s father. He denied he used money from the loan for his own personal purposes. He agreed he withdrew $32,000 for the purpose of purchasing a 4WD2 motor vehicle in about September 2010. He said he provided the money to his brother who acquired the vehicle and that the vehicle went to his brother. He said it was a repayment to his brother of money he owed him. He denied he was fabricating that evidence.
The husband agreed that in March 2012 the wife’s father deposited $40,000 into the Portfolio Loan account. He further agreed that in May of that year he withdrew $40,000 from that account. He further agreed that in December 2013 he paid $35,000 to the Portfolio Loan account and in March 2014 he withdrew $31,788 from the Portfolio Loan account. He denied that only $296,000 was paid from the Portfolio Loan account to the wife’s father. He asserted it was a greater sum. He denied he had only paid $51,490 to the Portfolio Loan account. He said he paid more than that. He was unable to say how much more he had paid. He conceded that it might have been the $31,000 that was withdrawn from the Portfolio Loan account to meet various payments.
He denied that he sought post separation to offset payments made on the Portfolio Loan account as against his child support liability.
The husband agreed that the rent for the occupation of the Suburb V unit by him and the wife at the time B was born, was paid from the Portfolio Loan account.
Cross-examination of the wife by counsel for the husband
The wife was asked whether she had prepared a schedule to show a total of $296,000 being paid from the Portfolio Loan account to her father. She said she had something prepared but she had not provided it to the Court as yet. I note the schedule was never tendered.
The wife denied that the advance and/or payments made to her father from the Portfolio Loan account were in the nature of a loan or a gift. She asserted it was an investment. She was asked what the terms of the investment were. She did not specify what the terms were and she did not appear to understand the question asked.
The wife agreed that at the time the money was paid to her father he was in a much stronger financial position than the husband and wife. She agreed that his financial position was so strong that he did not need money from the husband and wife. She was asked what she and the husband had invested in. She responded “We were investing our money towards to the property portfolio that Dad had at the time”. She was asked “What were the terms of the investment?” and she responded “Well, the terms were that Dad was going to borrow the 390K towards his investment – towards his investments, and in return Dad was going to then give us $100,000 from the sale of L Street.”
The wife was asked “So was your father going to return the money advanced and additionally give you $100,000?” and the wife responded “No. He wasn’t going to return the money. It was our way to join with my dad’s property portfolio development that he had at the time.” She explained that her father built houses to either sell or keep and then move on. She said that is how he built his property portfolio. She said that she and the husband wanted to join in his business so that they could make money with him and through him.
It was put that the Portfolio Loan monies were not provided by the parties to the wife’s father for him to invest in a general way. The wife denied that. It was put that the husband was not keen on the idea of advancing money to the wife’s father. She denied that. She asserted that he was keen. She said that at the time the money was advanced to her father he had completed L Street. She said the money was going towards the maintenance and upkeep of L Street and her father’s other developments which he had.
The wife was asked how, in the circumstances where the funds provided from the Portfolio Loan were used for maintenance and upkeep only, that would give rise to an investment that could provide $100,000 return for the husband and wife. The wife said:
Well, it wasn’t $100,000 in cash. The $100,000 that we were going to make out of the investment was going to go towards something for the next project that we were going to purchase together. So dad, me and [Mr GG] were going to purchase another … property … So the $100,000 was going to go towards the other property that we were all going to join in with … We wanted to join in with Dad.
The wife asserted she left the arrangements for the provision of money from the Portfolio Loan account to her father to the husband. She asserted she had participated in discussions with the husband and her father about the arrangement/investment of the money from the Portfolio Loan with her father.
The wife was taken to paragraph 49 of her affidavit where she had asserted that $390,000 from the Portfolio Loan was paid to her father. She was asked whether she was suggesting that the whole of the $390,000 was paid to her father. She said that was not the case, some of the money was used to pay rent on the apartment the husband and wife were occupying and also the commitment for the finance on the 4WD1 motor vehicle. There were some other bills that were also paid.
When pressed as to the inaccuracy of her paragraph 49 in her affidavit she said “That was the agreement initially, that 390 was going to be invested with dad, but the whole 390 wasn’t invested with dad.”
The wife was asked whether she had asked her father for some or all of the Portfolio Loan monies to be returned to her and the husband. She said “Initially I did after me and [the husband] separated”.
The wife was asked how many occasions had she asked her father to return the money. She replied “Initially, when I was trying to save my marriage. So I would have, yes, numerous conversations with dad, yes, trying to plead so we can, you know, try and recoup our losses”.
It was put to the wife that she and the husband would not have lent the funds without hoping for its return. She said she did not think it was “an ill decision” at the time she “knew that dad was very successful and has been very successful throughout his life, so I didn’t feel like it was an ill decision or risk because I knew that dad would always have our back”.
The wife was asked whether she had asked her father recently for the repayment of the Portfolio Loan money. She said “No because he made a significant loss and so did we”.
It was put to the wife that at the time she and the husband entered into the loan with St George Bank she had told her father about it. She denied that was the case. She asserted that her father had become aware of the loan as a result of a conversation with the husband. She agreed she was present when the conversation occurred. It was put to the wife that her father had requested the money be advanced to him as a loan and that it would be repaid. She denied that.
The wife agreed she liked the idea of money from the Portfolio Loan being paid to her father. She agreed it would be invested with her father.
It was put that there were heated arguments between the husband and the wife about the proposed investment of the Portfolio Loan funds with the wife’s father. She denied that. She denied that she had threatened to leave him if he did not go ahead with the advance of the funds to her father.
The wife was asked whether any part of the monies advanced to her father had been returned. She said “yes $40,000”. She was asked “And was that part repayment as far as you could understand?” to which she replied “Yes”. She was pressed further on the words “part repayment” and she appeared to possibly retract her agreement to those words being applicable. She said “I don’t think there – it wasn’t – Dad had ended up selling one of his Queensland properties at that time, and then whatever money that he got, yes, he transferred into our joint account”. She was asked if she meant the Portfolio Loan account to which she replied “Yes”. She said that her father had made deposits in different amounts to that account between January 2010 and some time in 2012. She understood he had deposited about $3,000 a month “for the home loan and for the 4WD1 repayments”. She denied these were repayments of a loan by the husband and wife to her father and said “They were just to repay the loan, to keep maintaining the loan”. (I understood that referred to the Portfolio Loan).
The wife said that her father was making repayments on the loan “because [the husband] said that’s what needed to happen when he left”.
The wife was cross-examined about the transfer of the Suburb T property to the husband and wife by the husband’s parents. She confirmed her assertion that the property was conveyed to her and the husband as a wedding gift. She acknowledged that whilst she and the husband were married in May 2005 it was not until September 2007 that the property was actually transferred. She acknowledged that she knew the husband’s brother F was married on 27 May 2007 and that she knows the property that was transferred to his name by his parents was not transferred until 2008. The wife was asked to explain how the Suburb T unit being transferred into the name of the husband and wife could be a wedding gift when the transfer took place in excess of two years later. She said that “It was only two and a half years after the event because we transferred it then, but when we received the Suburb T unit, his parents gave it to us for the marriage. They said ‘this is our wedding gift to the both of you.’”
It was put to the wife that conversation never took place. She disagreed. She agreed no rent was paid from the time she and the husband moved into the property following their wedding. She denied that from the time of the marriage she spent a lot of time with her parents, her sister and other members of her family.
The wife agreed that she worked for her father in 2005 but said she worked in a voluntary capacity in order to get experience. She said she did not receive any money for that work. She agreed that she had represented to the Australian Taxation Office authorities that she had received no income for the year ended 30 June 2005. As a consequence she agreed she needed the husband’s assistance to get a loan in order to complete the purchase of the Suburb V unit property. Because of that the husband’s name was placed on the title to the Suburb V property.
It was put to the wife that the husband was not keen on the idea of having to borrow money to complete the Suburb V unit purchase. She denied that.
The wife agreed the husband paid for the outgoings on the Suburb V property. This appeared to be an agreement in relation to the 2005 year but in later years she said she contributed.
It was put to the wife that in relation to the Suburb T property the husband’s parents said, in her presence, “We want to help you and [the wife]. We understand you need help, especially with your current debts. We want to transfer our property in both your names to help you out; it can be transferred back to us once you’re on your feet.” The wife denied those words were said. She denied anything like that was said.
The husband’s parents, I have found, only ever intended to transfer the title to the Suburb T property so as to provide security for a loan which the husband and wife would borrow to buy a house. The Suburb T property was used for that purpose and there is no compulsion of this Court to now order that title to be free of encumbrance. I have not found that it was a condition of the transfer that the husband and wife would discharge any loan which they had charged against the title to the Suburb T property immediately upon a demand by the husband’s parents for the property to be placed back in their legal ownership. Such a demand, if made, may well have proved to be not possible given the other financial circumstances of the husband and wife at the time of the demand.
The Order that the second and third respondents seek does not specifically require the Suburb T property to be transferred to them unencumbered by the mortgage currently registered against the property (see the Response to Initiating Application filed by the second and third respondents on 23 January 2015), although inferentially it is reasonable to conclude that is what they intended should happen.
The events which the husband’s parents sought would trigger a return of the title of the property to them are threefold.
·“If I have problems”; or
·“if you have problems [then you will give me the unit back]”; or
·“When you get in a good financial position [you will give me the unit back]”.
There is no evidence from the husband’s parents to suggest they have “problems” which requires them to ask for the return of the title to the unit. Certainly it could be said that the husband has “problems”, however, the husband’s father did not define what he considered “problems” which the husband might experience and which would require the unit to be transferred back to Mr and Mrs Jagoda senior.
When the title of the Suburb T property was transferred to the husband and wife there was no time stipulated as the maximum time which the title may be available to them to use as security for borrowings. It would be unjust for the husband’s parents, in those circumstances, to require the husband and/or the wife to remove the charge against the Suburb T property forthwith. It must have been clearly envisaged, on any objective view, that it may have been many years before the husband and wife would have built sufficient equity in their home (which was to be acquired with the use of the Suburb T property as additional security) to be able to use that property alone as the totality of security to support any outstanding borrowing.
The Court is required to do justice to all parties in this case. However, if an order is made for the immediate transfer of the title to the Suburb T unit to the husband’s parents unencumbered by any financial charge or mortgage, it makes it not possible, in my view, to make an order which has the ring of “just and equitable” as between the husband and wife.
Given there is no evidence that the husband’s parents are in financial need for the Suburb T property to be transferred back into their name, it seems just and equitable that such an order not be made immediately.
The transfer of the Suburb T unit came about because of direct dealing between the husband and his parents, in particular his father. It seems to me that a just and equitable result may be able to be achieved if an order was made for the husband to hold the title to the Suburb T property on trust for his parents, subject to a portion of the St George Portfolio Loan. That approach would give the wife an opportunity to retain the Suburb V unit if she so desires and if she has the financial capacity to do so. It will be necessary to craft orders which require the husband to take all reasonable steps to have the St George Bank agree to the Suburb T property being transferred to the husband’s sole name and then redraw the mortgage between the bank and the husband solely with his portion of the Portfolio Loan secured against the Suburb T property. It may be that the husband can facilitate the same result with another financial institution rather than St George Bank if that be his preference. I note the husband is now employed by C Company.
The investment of $296,000 of the Portfolio Loan with the wife’s father was a poor commercial venture which both the husband and wife entered into. The balance of the St George Portfolio Loan has been used for the benefit of the family by way of payment of rental and car lease payments, and also for the husband’s sole purposes, although, the wife also received a $10,000 payment. The parties should share in the burden of that unfortunate investment and also in the responsibility for repaying the balance of the Portfolio Loan. There is nothing which convinces me that sharing should be other than equal.
The formulation of orders which can achieve that outcome is difficult and I have sought input from the parties as to the practicalities of implementing same and the appropriate orders. To that end the matter was relisted for further submission.
In oral address, the wife’s counsel sought that the Court consider such an approach as is outlined above without being specific about the size of the proportions each of the parties would retain. The submission was made as follows in response to a question I raised, namely “If the whole of the Suburb T property is found to be held in trust for the husband’s parents what order should be made in relation to the Portfolio Loan?” The wife submitted: “The husband should be found to be responsible for some proportion of the debt (of the portfolio loan) and that proportion should be secured against the Suburb T property as it was advanced for the purpose of being used to raise a loan.”
In the preparation of this judgment I came to realise that submission had not been the subject of any response from the husband or from the second and third respondents. I concluded it was important for the Court to hear their submission in relation to same as the wife had not sought an order to that effect as an alternative to the position posited in the minute of the order she sought. To that end, I had my associate send an email to each of the parties and the matter was listed before me on Tuesday 28 March and Thursday 30 March 2017 in order that all parties could be heard.
The email included the following:
For the benefit of the parties, His Honour has asked me to add the following in relation to what will be sought next week by way of provision of submission.
At the conclusion of the submissions of the wife it was submitted on her behalf that a method of achieving a just result would be to continue to have the Suburb T property charged with the portfolio loan to St George, or a proportion thereof.No submission was made in response to that proposal on the part of the wife, however, no formal order to that end was sought.
As this case is such an extraordinary case His Honour would like to hear submissions from each of the parties about such a proposal and from the wife’s part see a minute of order which details how such a proposal may work.
If any such proposal is pressed then His Honour requests the court's attention be directed to any evidence which establishes whether just the Suburb T property is held as security for the portfolio loan or whether both that property and the Suburb V property are held as security.
On 28 March 2017 only the second and third respondents and the husband were able to give their submission. A audio transcript of those submissions was made available to the wife who then made submissions on Thursday 30 March. As it transpired all parties were represented before the Court on 30 March 2017.
I called upon the parties only to address the wife’s alternate order, namely, should the Court make the declaration of trust as sought by the second and third respondents, is there any reason why the property should not remain charged with a proportion of the portfolio debt where that proportion would be the sole responsibility of the husband?
The second and third respondents submitted that should the Court accept there is a trust, then the use of funds borrowed against the title to the Suburb T property for any purpose other than the acquisition by the husband and wife of a home, would amount to a breach of the trust terms and as a consequence the trustees (the husband and wife) ought be required to make good that breach and clear the title to the property of any financial encumbrance. In relation to that submission, as can be seen from my earlier findings and determinations in this case, the terms of the trust in relation to how the funds raised against the title to the Suburb T property were to be used or for how long the property was to be available for the purpose of security for a loan were not clear. In the absence of a clear term in relation to the application of borrowed funds I would not be prepared to find that the facts in this case establish a clear breach of the trust.
The husband submitted that the position ought be as stated by the second and third respondents above.
On 30 March 2017 all parties were able to be present to hear the wife’s further submission in response to my request as detailed above (had I known that all the parties were available to attend before me on 30 March I would not have required the submissions to be split between the 28th and 30th March). The wife submitted that if the Court was to determine the trust is established in favour of the second and third respondents then the Court could order as follows:
“The 2nd and 3rd Respondent do all things and sign all documents necessary to consent to permitting a mortgage to be secured over the Suburb T property in a sum (to be fixed by the court) with the husband to be the mortgagor.”
The wife submitted that should the Court make a finding that the Suburb T property is to be held in trust by the husband and wife (or possible the husband alone to be trustee) for the second and third respondents, and further that the husband was to be responsible for the payment to the St George Bank for a proportion of the amount currently owing on the portfolio loan, then orders would be required to ensure the Suburb T property remain available to the husband to use as security for that part of the portfolio loan debt which was to be his responsibility.
The husband, in response to the written submission which was provided to the Court by the wife, pursuant to court direction, (and before the further attendance before the Court on 28 March 2017) submitted that to the extent the submissions reiterate what was said in oral submission before the court the written submission should be ignored. It was further submitted that the decision of In re Kerrigan (1946) SR (NSW) 76 is not of assistance because the case is not analogous to the facts in this case. Further, no decision was cited for the submission by the wife that the separation of the parties caused an automatic severance of the joint tenancy between the husband and wife on the title to the Suburb T property.
In relation to the mortgage secured against the title to the Suburb T property the husband said that the property was provided to the hand wife unencumbered by financial charge and should be re-conveyed to the second and third respondents in that same condition.
The evidence satisfies me that until the date of the hearing the interest on the Portfolio Loan has been met by the wife or her father following the separation. I do not propose to order that the wife meet the payments from the date of the orders I will make. It will be necessary to restrain each of the husband and wife from further drawing on the Portfolio Loan.
Creating orders which translate the Court’s determination into a required outcome in this case, I do not consider an easy task. Quite the contrary. The proposed orders raise questions about the practical outcome of an arrangement which is not as clear cut as the Court would normally seek to create with its orders (i.e. the creation of an order which ends the financial relationship and/or entanglement of the husband and wife). Clearly the wife needs to have at the end of the execution of the orders an entitlement as calculated in this judgment and contained either in her property at Suburb V, should she be able to retain that, or as cash realised from the sale of the Suburb V property as proposed.
The Court recognises that should the husband chose not to approach the execution of the Court’s orders willingly and actively seeking to action same as the Court clearly intends, then the Court has to build into the orders conditions and requirements which might act as a disincentive to the husband taking such an approach. Such disincentive would include the following:
·Restraining the husband from borrowing any funds (otherwise than to comply with the Court’s order) or acquiring any other real property until the wife has received her entitlements under the Court’s orders and she has been released by the St George Bank from any liability for the Portfolio loan;
·In the event of the St George Bank not releasing the Suburb V unit from the security it holds for the Portfolio loan upon payment of half of the husband and wife’s liability under the loan, directing that the wife hold a charge over the Suburb T property until she has received all funds payable to her under the court orders including interest charged at the rate prescribed by the Family Law Rules;
·The wife would need to protect her charge over the Suburb T property by registration of a caveat against the title to the Suburb T property. Further the second and third respondents will need to be restrained from dealing with the property in any way which may affect the wife’s charge.
I consider further that the following effects of the proposed orders, in practice, make the orders workable and in that sense competent to make:
·In the event that the husband does not re-negotiate the Portfolio Loan with the St George Bank or obtain a facility from another financial institution, the St George Bank will continue to hold the Suburb T property as security for the Portfolio Loan;
·In the event that the husband does not comply with the requirements of the St George Bank or any other lending body which might take its place as mortgagee on the Suburb T property, then the relevant lending body can be expected to act on its mortgage and sell the security in order to obtain repayment of the relevant loan;
·The second and third respondents may take action against the husband (and the wife if they so choose) to recover their losses, however, the husband will be required to indemnify the wife for any payment which might be sought from her, which will likely act a disincentive to the second and third respondents taking action against the wife;
·An injunction will prevent either the husband or the wife drawing any further funds from the Portfolio Loan facility. Thus, the debt will not grow larger otherwise than because the payments necessary to meet the interest payment and other charges are not paid as required by the mortgagee;
·The husband will hold a transfer of the title to the Suburb T property (subject to the mortgage registered in favour of the St George Bank) from the husband and wife to himself. He will be required to seek approval from St George Bank to register the transfer which, if refused, he will be able to hold until circumstances change which enable him to register the transfer subject to the registered encumbrance or otherwise;
·The wife will have the option to refinance her portion of the Portfolio Loan and pay the husband the sum required by the Court’s Order. If she desires not to retain the property then the property will be sold and her portion of the Portfolio Loan will be paid to the St George Bank and the net proceeds distributed in percentage shares as calculated hereafter.
·If it transpired that the Suburb V property had to be sold and the whole of the portfolio loan was repaid from the sale proceeds, then that part of the loan which the husband was to be responsible for repaying would be made a charge against the Suburb T property in favour of the wife with interest to run as specified under the Family Law Rules and the charge to carry a full right of sale of the Suburb T property to satisfy the liability if it was otherwise not discharged within a period of three months.
In the circumstances it is appropriate that each of the husband and wife be permitted to publish a copy of the Court’s Orders to the St George Bank so it can see what is intended by the Orders. Any order made herein does not bind the St George Bank as it has not been a party to the proceeding and no order is specifically made which requires the bank to do any particular thing.
I propose orders which will give effect to the following division.
The wife will receive:
Assets ($)
E Street, Suburb V 630,000
4WD1 12,000
Household goods 1,000
Total Assets: 643,000
Liabilities
St George home loan #01 (Suburb V) 138,488
St George home loan #00 (Suburb V) 18,867
One Half St George Portfolio Loan 195,827
Payment to the husband of 20% net
asset figure ($97,329 less $1000 of
household items retained by the husband) 96,329
Total Liabilities: 449,511
Net assets retained by the wife: 193,489
The husband will receive:
Assets: ($)
Household contents 1,000
Payment from wife 96,329
Total Assets 97,329
Liabilities($)
Husband’s share of Portfolio Loan 195,827
Total Liabilities 195,827
Net Assets retained -98,498
Although the husband receives a negative property settlement, it has to be remembered that he has, in one sense, already received an advance on his property settlement by the actions he took in removing funds from the Portfolio Loan account post separation, and giving away funds which would otherwise have been included as an asset for distribution between the husband and the wife. Those matters add to the conclusion that the proposed orders are just and equitable.
Should the wife not be able to pay to the husband the $96,329 as required by the Court’s Order, then there will need to be a sale of the Suburb V property and a division of the net sale proceeds between the parties in proportions that $96,329 represents to the net sales proceeds after having deducted the two St George mortgages over Suburb V, and half the Portfolio Loan. That will then calculate the net sale proceeds as $630,000, less $138,488, less $18,867, less $195,827. The result being $276,818. The husband’s payment required of $96,329 represents 34.8% of that figure.
The above calculation ignores the obvious costs of sale of the property. It also makes no allowance for the property selling for more or less than the value which the husband and wife have agreed to for the purpose of this hearing. By ordering a percentage division of whatever the ultimate net sales receipt might be having paid the sale expenses, each of the parties will share in any movement in the figure from that which has been used by me in this determination. In such circumstance the outcome is as fair as can be catered for.
Costs
Should there be any application for an order for costs then any applicant party must file and serve, within 28 days of the date of the Orders herein, any such application that they might wish to make. Any application is to be accompanied by any affidavit material setting forth evidence on which they wish to rely, together with any written submission in support of that application. Any respondent party must file within a further 14 days a Response, together with a written submission in support of that response, and any affidavit material, setting forth any evidence on which they wish to rely. The applicant will have a further seven days in which to file any submission or evidence in reply.
In the event that no application is filed within the time limit there will be no order as to costs.
I certify that the preceding five hundred and twenty-six (526) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 31 March 2017
Associate:
Date: 31 March 2017
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
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Property Law
Legal Concepts
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Constructive Trust
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Fiduciary Duty
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Remedies
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Charge
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Injunction
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