Jansing & Falk
[2024] FedCFamC1F 487
•23 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Jansing & Falk [2024] FedCFamC1F 487
File number(s): BRC 3715 of 2020 Judgment of: JARRETT J Date of judgment: 23 July 2024 Catchwords: FAMILY LAW – PROPERTY – Where litigation has been on foot since 2020 – Where applicant argued for inclusion of post-separation liabilities – Where evidence does not support inclusion of liabilities – Assessment of applicant’s earning capacity – Adjustment made in favour of respondent Legislation: Family Law Act 1975 (Cth) Part VIIIAB, s 90SM Division: Division 1 First Instance Number of paragraphs: 62 Date of hearing: 17 July 2024 Place: Brisbane Solicitors for the Applicant: Litigant in person Counsel for the Respondent: Mr Linklater-Steele Solicitors for the Respondent: Wilsons The Family Lawyers ORDERS
BRC 3715 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR JANSING
Applicant
AND: MS FALK
Respondent
ORDER MADE BY:
JARRETT J
DATE OF ORDER:
23 JULY 2024
THE COURT ORDERS THAT:
1.Within ninety (90) days of the date of these orders, the applicant pay to the respondent $159,652.00 and for the purposes of this order, the respondent will nominate her preferred bank account to the applicant in writing within seven (7) days of the date of this order.
2.Otherwise, all outstanding applications and responses are dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JARRETT J:
In submissions, counsel for the respondent submitted:
As to the general proposition, not being disrespectful, but this is a matter where my client is asking your Honour to, and acknowledges to do [sic], the best you can. It is by no means a case of perfection. Your Honour would understand that it has been a long period of litigation. My client has dealt with a number of significant issues. It needs to come to an end. That doesn’t in any way assist us in a general sense, but it is an acknowledgement that the evidence is far from perfection in terms of many of the matters that normally might be able to assist your Honour. And indeed, my client takes the pragmatic view that it is not going to get any better.
I have done as asked.
This is a property adjustment application engaging the court’s jurisdiction pursuant to Part VIIIAB of the Family Law Act 1975(Cth). The applicant, Mr Jansing, and the respondent, Ms Falk were in a relationship between 2005 and either February, 2019 (as the applicant contends) or February, 2020 (as the respondent contends). They never married. They have one son, X, who is now 14 years of age.
Now that their relationship has come to an end, they cannot agree on how their property ought to be divided between them. It falls to this court to make property adjustment orders.
Having regard to the evidence led and the submissions made by each of the parties, the issues of fact for determination by this court are quite limited. In general terms, they are:
(a)whether the evidence establishes that the applicant has a number of specified debts and whether those debts should be brought to account in these proceedings; and
(b)whether the applicant has an income earning capacity that far exceeds the income earning capacity of the respondent.
Beyond those factual disputes, it is necessary to make an assessment of the parties’ contribution-based entitlements and what adjustment, if any, is required in respect of those entitlements by reason of matters set out in s 90SM(4)(d)-(g) of the Act. The parties are largely agreed as to how the court should assess their respective contributions but there is a dispute about the adjustment to their contribution-based entitlement.
I find that the parties have the following assets, liabilities and financial resources:
Applicant: B Street (A) $1,350,000.00 Motor Vehicle 1 (A) $35,000.00 NAB account …44 (A) $3,213.00 Applicant’s furniture and effects $37,100.00 Child support due from respondent (A) $4,961.00 Less: NAB loan secured by mortgage over the B Street property $1,033,982.00 C School overdue fees $7,718.00 NAB Credit Card $31,743.00 Nett Total: $356,831.00 Respondent: Motor Vehicle 2 (R) $1,834.00 D Bank account …83 (R) $53,082.00 NAB account …15 (R) $20,000.00 Respondent’s furniture and effects $15,000.00 Respondent’s E Finance Account $12,917.00 Less: Child support due to applicant $4,961.00 Total: $97,872.00
It is necessary to make some observations about this table.
I have not included an amount of $114,152 presently held in the respondent’s former solicitor’s trust account. The parties agree that those funds are the nett proceeds of sale of a property known as 1 H Street, Town F. It was owned by a company called L Pty Ltd and the parties agree that the funds are the company’s funds. The evidence does not permit me to treat these funds as funds belonging to the applicant on the basis that the company is his alter-ego, or on any other basis.
There are no useful Australian Securities and Investments Commission documents about L Pty Ltd in evidence. The respondent’s evidence is that:
(a)L Pty Ltd was incorporated in 2016;
(b)on incorporation Mr M and she were the company’s directors;
(c)the respondent owned all of the shares on issue in the company;
(d)as of 6 February, 2018 the applicant was the sole director and Mr M held “a 50% share whilst she and the applicant jointly held the other 50% share”;
(e)there was no change to the shareholdings in the company when the applicant purported to have bought out Mr M’s share at some indeterminate time; and
(f)inconsistently with all of the above, that another entity described variously as “N Pty Ltd” and “N Pty Ltd” owns all of the shares in L Pty Ltd.
The applicant’s evidence is that:
(a)he is a director of L Pty Ltd; and
(b)he owns 50 shares jointly in the company, although he does not say with whom.
So, the best evidence is that the applicant is probably the only director of L Pty Ltd and that he and Mr M are the likely shareholders, each holding 50% of the issued shares. This conclusion, however, borders on rank speculation.
Whatever is the case with L Pty Ltd, I am satisfied that the funds in the solicitor’s trust account are not funds to which either party is presently entitled. The applicant submitted that L Pty Ltd has creditors and in particular that the Australia Tax Office is owed money by the company. There is no direct evidence that bears this out. It is a fair inference, however, given that in mid‑2018 the company purchased one half of the property at 1 H Street, Town F. The other half was apparently purchased by Mr M. The purchase price was $415,000. It is uncontentious that in mid-2022 L Pty Ltd acquired Mr M’s share. The property was subsequently sold by L Pty Ltd and settlement occurred in late 2023. The mortgage over the property was paid out as were the costs of sale. From the balance $100,000 was paid to each party and the residuary deposited to the respondent’s former solicitor’s trust account. Those facts make it likely that there was a significant capital gain made on the purchase of the property and that, absent any other information about the company’s financial position, a capital gains tax liability has arisen. The fact that the parties helped themselves to the company’s money does not assist a resolution of this issue. All it probably indicates is that they each have a liability to the company (or any liquidator of the company) to disgorge those funds. Perhaps they have been accounted for as directors’ or members’ loans? Again, this is all speculation. There is insufficient evidence to permit of a concluded view about whether such a liability exists.
The respondent is in arrears of child support to the applicant in the sum of $4,961.00. There is no dispute about that. It is an asset of the applicant and a liability of the respondent (although no attention was paid to the proposition that it was probably, in truth, a debt to the Child Support Registrar).
The applicant contended for the inclusion a number of liabilities said to be debts owned by him to various companies, his mother and the respondent’s father. They were as follows:
(a)O Ltd (B Street) – $200,000
(b)O Ltd– $260,369
(c)O Ltd– $103,376
(d)Ms P – $20,000
(e)Mr Q – $12,850
(f)R Pty Ltd – $5,000
The applicant swears that he has never been a shareholder or director of O Ltd. He says that his brother Mr T was the sole director when it was incorporated in 2018. The respondent alleges the applicant was acting as a “de facto director” and has provided two documents (MF8 and MF10) where the applicant has signed on behalf of the company and been listed as a vendor on a contract of sale for property owned by the company.
What the true position is, I have no idea. Mr T was not called to give evidence and there was no attempt by the applicant to prove the debts that he says are owed by him to the company. The applicant represented himself at the trial and has done so for most of these proceedings. That was a poor decision on his part. I explained to him at the outset of the trial how I would make my decision in this case and the importance of evidence in relation to the outcome of the case. Notwithstanding that, the applicant considered that because he had provided certain documents to the respondent and her lawyers (but not to the court via sworn testimony), he had proved what he had needed to prove. The respondent did not concede the various debts contended for by the applicant.
I am not satisfied on the evidence that the applicant is indebted to O Pty Ltd No as he contends. Nor am I satisfied that the applicant is indebted to his mother Ms P or the respondent’s father, Mr Q as he contends. His evidence in chief does not deal with these alleged loans. There is no evidence from either Ms P or Mr Q, although I acknowledge that Mr Q is 96 years of age. The only evidence about these loans came from the applicant in cross-examination. I found his evidence about these issues unconvincing.
The applicant also contends that he has a liability to R Pty Ltd. I do not accept that this is so. The applicant’s evidence about his dealings with this company and Mr S, apparently its principal, is confused and confusing. The nature of the arrangements described by him in his evidence-in-chief are curious and absent any evidence about these matters from Mr S, I am not satisfied that the applicant is indebted to this company as he alleges.
I accept that the applicant has a credit card liability of $31,743.00. He seeks that I include his current credit card balance in the liabilities to be taken into account to determine the parties’ nett position. I decline to do so. His evidence was that this balance is a recently accumulated balance (post-separation). He seeks its inclusion on the basis that most of the expenditure has been for the parties’ child, who lives with him. However, I cannot be satisfied about just how much of the debt is attributable to expenditure for the parties’ child and how much is the applicant’s own living expenses. There is likely to be significant overlap in any event. The financial support of the parties’ child by the applicant is something I will take into account as part of the discretionary exercises set out later in these reasons.
Finally, the applicant contends that I should include as a liability to be brought to account, the school fees for the parties’ child that are presently outstanding int the sum of $7,718.00. There seems to be no dispute that that amount is owing, but the respondent contends that she is not liable for it and it should not be included. However, I have determined to include it as a liability both should contribute to given that it is a liability in respect of the education of their son and there was no suggestion that it was unreasonably incurred.
Turning to the respondent’s assets, I have found that the balance of the respondent’s D Bank account is $53,082.00. The respondent contended that it was much less – more like $10,000. However, the only sworn evidence I have is of a balance of $54,000. So much appears in the balance sheet in the respondent’s affidavit of evidence-in-chief. There was no attempt to update that value by sworn evidence at the trial. The respondent did not rely upon a sworn financial statement at the trial.
I have found a lesser sum than $54,000 on the basis that the sum contended for by the applicant is the last balance on a statement for that account he says was received by him from the respondent by way of disclosure prior to the trial. I treat his statements from the bar table about this as statements against his own interests because they contend for the lower sum rather than the higher sum sworn to by the respondent in her trial affidavit.
The respondent holds a National Australia Bank Limited account. I find that the balance of this account is $20,000. There is no sworn evidence before me about this account or its balance. At best I have the unsworn representations by the respondent in her case outlines filed on 9 and 16 July, 2024 as to the balance of this account. I treat those statements as statements against interest and find that the balance of the account is $20,000. Whilst the applicant contended that the account had a greater balance, there was no attempt by him to prove that greater balance.
The applicant has nett assets of $356,831.00 and the respondent $97,872.00. Adjusting for the applicant’s credit card (that should be borne solely by him) and ignoring the child support debt for the moment, the applicant has nett assets of $383,613.00 and the respondent $102,833.00. A total of $486,446, of which the applicant holds about 78.8% and the respondent 21.2%.
In the circumstances, both parties contend that it is just and equitable to make an order for property adjustment. I agree.
The applicant and the respondent commenced their relationship in City U, New Zealand. They commenced cohabitation in 2005. They moved to Australia in 2014.
According to the evidence of the respondent, unchallenged in cross-examination, the parties separated for 9 months between February and December, 2019. She says that they finally separated in February, 2020. The applicant says that they finally separated in February, 2019. It is not necessary to resolve this difference.
Following separation, the respondent returned to New Zealand in or around mid-2020. X remained living with the applicant in Australia and he has been primarily responsible for him since mid-2020.
The applicant commenced these proceedings for property adjustment on 3 April, 2020. By an amended application filed on 13 October, 2020 the applicant sought both property and parenting orders. By her response filed on 29 October, 2020 the respondent sought final orders for both property and parenting.
On 10 August, 2023 consent orders were made disposing of the parenting application between the parties. By those orders X lives with the applicant in Region V and spends at least half of his school holidays with the respondent in New Zealand. The orders provide that if the respondent moves to Queensland, X will live with the parties in a week about arrangement.
It seems common ground that the applicant’s employment varied considerably over the course of the approximately 15-year relationship and at the commencement of the relationship he was in business. He operated through a company called W Limited in City U, New Zealand.
Although the applicant contends that the respondent did not work during the relationship, her unchallenged evidence is that at the commencement of the relationship she was working full‑time for Y Company and then worked part time until 2009 running two enterprises for the applicant. Between 2010 and 2017 she was a full-time parent and homemaker. From 2017 until mid-2020 she ran her own business. I accept her evidence about these matters.
There is no evidence before me about the applicant’s financial position at the commencement of the parties’ relationship. The respondent says that he was self-employed by his business operated through W Limited. She thinks that he might have had a number of other business interests.
I accept that the respondent had:
(a)savings of approximately $300,000 NZD;
(b)Motor Vehicle 2 car; and
(c)no liabilities.
She swears that she loaned her savings to W Limited in about 2008 when it was struggling as a result of the global financial crisis. The company did not survive and went into liquidation in 2013. The respondent lost her contribution.
The applicant presented his own petition in bankruptcy in 2013. Needless to say, he lost all of his personal assets. He was discharged in 2017. He set about re-establishing himself and set up a trust although for what particular purpose is not revealed by the evidence.
Much of the respondent’s evidence is devoted to cataloguing the applicant’s employment and business activities after his bankruptcy. It was once her case, but no longer pursued at trial, that the applicant had a cache of property available to him somewhere, not disclosed in these proceedings. But, the evidence does not bear that out.
What the evidence does disclose is that both the applicant and the respondent worked hard during their relationship to accumulate property. Both exhibited entrepreneurial flair and engaged in real estate trading and development. The respondent suggests that the income and capital gains they made were contributed to their family or back into other projects.
The parties agree that I should conclude that as at the date of the trial their contributions to the acquisition, conservation and improvement of their property should be seen as equal. I agree. My own assessment of the evidence is that the parties have, up to the date of trial contributed equally to the acquisition, conservation and improvement of their property and I so find.
If their property was divided between them on that basis, they would each be entitled to $243,223.
Neither party suggested that the effect of any of their proposed orders would have an adverse impact upon the earning capacity of them or the other party in the proceedings.
I have set out the arrangements for X earlier in these reasons. I take into account that since separation the applicant has cared for X with little financial support from the respondent. The amount of child support assessed and paid is derisory. That there are arrears tends to indicate that future child support payments may be problematical. The respondent swears that she intends to return to Australia to be closer to X although just when that might happen is not clear. She says that she is waiting for “permission being granted by my [specialist]”. There is no medical evidence before me about why that permission is necessary or why the applicant’s care could not be transferred to a specialist in Australia. I am satisfied that it is likely that the applicant will remain primarily responsible for X.
The respondent’s evidence is that she has been assessed to pay $283 to the applicant for child support, although she does not say whether that is per week or per month. Unhelpfully, the applicant’s financial statement suggests the amount is $33.08 per week. Consistent with her belief that the applicant has undisclosed sources of income and assets, the respondent has apparently lodged a change of assessment application with the Child Support Agency seeking that they review the amount payable. There is no evidence as to the outcome of that application.
The respondent is 49 years of age. The applicant is 65 years of age.
In January, 2022 the respondent was diagnosed with a medical condition. According to her evidence, she spent most of 2022 and the first half of 2023 either in hospital receiving treatment or at home recovering from medical procedures.
She currently remains healthy.
The applicant has had surgery and suggests that his health is not all that it could be. However, he has no evidence about any issues with his health.
The respondent presently works for a government agency. Her weekly income is approximately $2,381.86 NZD per week (despite only a few paragraphs earlier swearing that her income was $1,190). I prefer the former figure over the latter. She holds a bachelor’s degree. She plans to remain in this occupation with her current employer until she returns to live in Australia. As I have said above, when that will occur is entirely speculative.
The applicant says that he has not been gainfully employed since the date of separation in February, 2019. Whilst that might be so on its face, it is clear that he has engaged in remunerative activity through real estate dealings. His own evidence bears that out. He has been able to fund travel for X to return to New Zealand to visit with the respondent during her illness. He says that he has funded the travel through capital realised by him from the sale of real property and borrowing from friends. Apart from the debts to which I have earlier referred, he does not claim that he has any debts to friends. I doubt that he has borrowed as he says and if he has, he has been able to repay the borrowings in a timely way.
It is difficult to make any assessment of the applicant’s earning capacity. What is clear is that he seems to have an eye for property and has been able to generate capital through buying and selling real estate in Region V. According to his evidence, his purchase and subsequent sale of 2 H Street, Town F netted him $460,000 in early 2022. He also made income or capital on the sale and purchase of the property at J Street, Suburb K, although the precise structure of that deal remains a mystery. The amount retained by him was at least $350,000 but could be as high as $1.09m.
Whatever is the case, it is clear that the applicant has significant skills when it comes to identifying real estate that might be purchased with an eye to subsequent capital gains.
I consider it likely, and I find, that the applicant’s capacity to earn income (and here I include within that concept the ability to generate capital) is greater than that of the respondent. I cannot quantify the difference on the evidence, but it seems to me that he is likely to have greater access to financial resources than the respondent. In this respect it is also necessary to note that the applicant may have access to the funds presently in the respondent’s former solicitor’s trust account, although given the state of the evidence about that, I can make no detailed findings.
Balancing the applicant’s greater financial capacity and potential resource constituted by the L Pty Ltd funds, his greater age and less time available to pursue income earning activities, his greater responsibility (both on a day-to-day basis and on a financial basis into the future) for the parties’ son against the respondent’s lesser financial capacity, her younger age and consequential time available in the workforce and her lesser responsibility for X, I consider that a modest adjustment to the respondent of 5% of the value of the parties’ nett property away from equality is appropriate. That equates to $24,322.30 or a differential $48,644.60.
On that basis, the applicant is entitled to 45% of the value of the parties’ nett property and the respondent 55%. The respondent’s share is $267,545.30 and the applicant’s share is $218,900.70. I will round the applicant’s entitlement to $219,000. The respondent will be entitled to the balance.
Presently the applicant has:
B Street (A) $1,350,000.00 Motor Vehicle 1 (A) $35,000.00 NAB account …44 (A) $3,213.00 Applicant’s furniture and effects $37,100.00 Less: NAB loan secured by mortgage over the B Street property (A) $1,033,982.00 C School overdue fees $7,718.00 Total: $383,613.00
The applicant will retain his credit card liability for which he is solely responsible.
To return to the respondent her entitlement, the applicant will have to pay the respondent $164,613.00 less the amount she owes him for child support. The net payment is $159,652.00 She will then have:
Motor Vehicle 2 (R) $1,834.00 D Bank account …83 (R) $53,082.00 NAB account …15 (R) $20,000.00 Respondent’s furniture and effects $15,000.00 Respondent’s E Finance Account $12,917.00 Payment from applicant (incl. child support arrears) $164,613.00 Total: $267,446.00
The only order necessary is that the applicant pay to the respondent the amount of $159,652.00. No other orders are necessary. The parties own no property jointly. Further, neither party proposed any orders that might deal with any default in payment by the applicant of any sum ordered to be paid by him. No doubt that can be worked out on an application for enforcement if it comes to it.
In her amended response filed on 12 March, 2024 the respondent seeks orders by way of periodic spousal maintenance. However, she seeks no such orders in her case outlines filed on 9 and 16 July, 2024. No submissions were made at the conclusion of the case in support of the orders for spouse maintenance in her response. In the circumstances it is plain that the respondent has abandoned that claim.
In any event the material does not establish either that the respondent has a need for maintenance or that the applicant has the capacity to pay maintenance. Whether because she has abandoned that claim, or she does not, on the evidence, make it out, the claim for spousal maintenance must be dismissed.
I make the orders set out at the commencement of these reasons.
I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 23 July 2024
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