Jurlina & Jurlina

[2014] FamCA 284

FAMILY COURT OF AUSTRALIA

JURLINA & JURLINA [2014] FamCA 284

FAMILY LAW – PROPERTY – Where the court found the parties financial and non-financial contributions to the property acquired by them and to the welfare of the children up to the time of separation are equal – Where post-separation contributions up to the date of the hearing require a small adjustment to the wife being 51 per cent to the wife and 49 per cent to the husband – Where pursuant to s 75(2) it is appropriate that there be an adjustment in favour of the wife of 7 per cent resulting in her receiving 58 per cent of the net assets and the husband 42 per cent.

Family Law Act 1975 (Cth) ss 75(2), 79, 79(4)

Kennon & Kennon (1997) FLC 92 - 757
Re Lawrie & Lawrie (1981) FLC 91-102

APPLICANT: Mr Jurlina

RESPONDENT: Ms Jurlina

CASE GUARDIAN: Mr B

FILE NUMBER: SYC 3468 of 2012

DATE DELIVERED: 2 May 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 28 & 29 November 2013, 9 & 10 December 2013, 14 February 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Blackah

SOLICITOR FOR THE APPLICANT: Caroline Chung & Associates

COUNSEL FOR THE RESPONDENT: Mr Jackson

SOLICITOR FOR THE RESPONDENT: Tomasevic Poljak Lawyers

Orders

1. That the wife is to retain her interest in the following:

   (a)       The … motor vehicle registration number …;

   (b)       The household items in the property situate at C Street, Suburb D;

   (c)       The funds held in the ANZ Bank account number …;

   (d)       The 1218 E Pty Ltd Shares presently held in the wife’s name; and

   (e)       The bank accounts held by the wife in the name of F.

2. That the husband is to retain his interest in the following assets:

   (a)Half interest in the property situate at G Street, Suburb H;

   (b)Half interest in the property situate at I Street, Suburb J;

   (c)The proceeds of sale of the motor home;

   (d)       The utility motor vehicle registration number …;

   (e)Half interest in the ANZ Joint Cheque Account number … held with Mr K;

   (f)       The funds held in the ANZ Bank Account …;

   (g)Half interest in L Pty Ltd;

   (h)The household items in the property situate at M Street, Suburb N;

   (i)        The 1444 E Pty Ltd Shares presently held in the husband’s name; and

   (j)        His tools of trade.

3. That the parties are forthwith to take all necessary steps to sell the property at O Street, Suburb P (‘the O Street property’) (folio identifier …) and for the purpose of implementing that sale the parties shall do the following:

   (a)List the property for sale by public auction, such auction to occur within four (4) months of the making of these orders at a price to be agreed between the parties and failing such agreement at a price, or at a reserve price, nominated by the President of the New South Wales Division of the Australian Property Institute and his/her nominee;

   (b)Forthwith listing the property for sale with such real estate agent as the parties may agree to appoint and failing agreement within fourteen (14) days list the property with such agent nominated by the President of the New South Wales Division of the Australian Property Institute (“the Agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when they fall due.

   (c)The parties shall each co-operate in every way with the Agent including (without limiting the generality the foregoing):

   (i)making the keys available to the Agent;

   (ii)allowing inspection of the property at all reasonable times as required by the Agent;

   (iii)not do or say anything to hinder or prevent a sale being effected;

   (iv)Ensuring that the property including the grounds are in a neat, fit state of repair and tidy condition at the time of the inspection by the Agent and prospective purchasers;

   (v)sign all documents as requested by the Agent in relation to the listing for sale of the property except contracts or agreements for sale which have not been authorised by the parties’ solicitors;

   (vi)the parties shall each execute contracts for sale on the forms prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties or in the absence of any agreement at or above the price nominated by the President of New South Wales Division of the Australian Property Institute;

   (vii)the parties shall do all things and sign all documents necessary to instruct a solicitor or licensed conveyance within seven (7) days of the date of these orders to have the primary conduct of the sale on behalf of both parties and, failing agreement, such solicitor or conveyancer as nominated by the President of the New South Wales Division of the Australian Property Institute.

   (d)That any costs payable to the solicitors will be and form part of the legal costs of the sale to be deducted from the proceeds of sale.

   (e)Neither party may confer upon any agent without the consent of the other party any right, or sole or exclusive agency in respect to the property or to any commission. 

   (f)       The proceeds of the sale shall be disbursed as follows:

   (i)in payment of the usual sale costs;

   (ii)in discharge of any mortgage or other encumbrances held over the property;

   (iii)in discharge of any capital gains tax liability incurred on the sale of the property (and for the purpose of effecting such a payment the solicitor acting on the conveyance for the parties shall calculate and retain a sum sufficient for payment of the Capital Gains Tax);

   (iv)the payment of $350 000.00 to the wife and $350 000.00 to the husband;

   (v)the balance to be paid into an interest bearing bank account in the joint names of the parties or their instructing solicitors.

4. That upon the husband ceasing to reside at M Street, Suburb N (‘the M Street property’) (folio identifier …), or upon his death, whichever first occurs, the parties or the wife and the husband’s legal personal representative shall do the following:

   (a)List the property for sale by public auction at a price to be agreed between the parties and failing such agreement at a price, or at a reserve price, nominated by the President of the New South Wales Division of the Australian Property Institute and his/her nominee;

   (b)Forthwith listing the property for sale with such real estate agent as the parties may agree to appoint and failing agreement within fourteen (14) days list the property with such agent nominated by the President of the New South Wales Division of the Australian Property Institute (“the Agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when they fall due.

   (c)The parties or the wife and the husband’s legal personal representative shall each co-operate in every way with the Agent including (without limiting the generality the foregoing):

   (i)making the keys available to the Agent;

   (ii)allowing inspection of the property at all reasonable times required by the Agent;

   (iii)not do or say anything to hinder or prevent a sale being effected;

   (iv)ensuring that the property including the grounds are in a neat and tidy condition at the time of the inspection by the Agent and prospective purchasers;

   (v)sign all documents as requested by the Agent in relation to the listing for sale of the property except contracts or agreements for sale which have not been authorised by the parties’ solicitors;

   (vi)the parties or the wife and the husband’s legal personal representative shall each execute contracts for sale on the forms prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties or in the absence of any agreement at or above the price nominated by the President of New South Wales Division of the Australian Property Institute;

   (vii)the parties or the wife and the husband’s legal personal representative shall do all things and sign all documents necessary to instruct a solicitor or licenced conveyance within seven (7) days of the date of these orders to have the primary conduct of the sale on behalf of both parties and failing agreement such solicitor or conveyance as nominated by the President of the New South Wales Division of the Australian Property Institute.

   (d)That any costs payable to the solicitors will be and form part of the legal costs of the sale to be deducted from the proceeds of sale.

   (e)Neither party may confer on any agent without the consent of the other party any right, or sole or exclusive agency in respect to the property or to any commission. 

   (f)       The proceeds of the sale shall be disbursed as follows:

   (i)in payment of the usual sale costs;

   (ii)in discharge of any mortgage or other encumbrances held over the property;

   (iii)the balance is to be deposited with the funds held in the joint bank account holding the proceeds of the O Street sale pursuant to Order 3(f)(v) above.

5. That upon the proceeds of sale from the M Street property being received into the joint bank account pursuant to Order 4(f)(iv) the funds in that bank account are to be distributed, if there are sufficient funds available to do so, $915 186.00 to the wife and $408 924.00 to the husband with any surplus being distributed as to fifty-eight per cent to the wife and forty-two per cent to the husband.  In the event there are insufficient funds to enable those payments to be made from that account the funds are to be distributed as to sixty-nine per cent to the wife and thirty-one per cent to the husband.

6. That the parties are to do all acts and things necessary to effect a transfer of the jointly held E Pty Ltd shares as follows:

   (a)       165 shares to the wife; and

   (b)       119 shares to the husband.

7. That within fourteen (14) days of the making of these orders the husband is to do all acts and sign all documents necessary to transfer his right, title and interest in his shares in the company Q Pty Ltd ACN … to the wife and to do all acts and sign all necessary documents to resign as director and secretary of the said company.

8. That within fourteen (14) days of the making of these orders the parties are to do all acts and sign all documents necessary to pay into the trust account of R Accountants the sum of $7 000.00 in the proportion of fifty-eight per cent by the wife and forty-two per cent by the husband on account of their costs of being appointed as liquidators of that company.

9. That within one (1) month of the husband transferring his shares in the company Q Pty Ltd ACN … to the wife and, resigning as a director and secretary, the wife shall take all steps necessary to appoint Mr S of R Accountants as liquidator for the purpose of winding up the company Q Pty Ltd ACN … and that thereafter, subject to being in a position to do so, make the following in specie distribution to the wife:

   (a)The property situate at C Street, Suburb D in the State of New South Wales (folio identifier …). 

10. That in the event funds are required to be paid to the said liquidator to enable the in specie distribution of the property to the wife to take place the parties are to provide the further funds to the liquidator in the proportion of fifty-eight per cent by the wife and forty-two per cent by the husband.

11. That neither party is to take any steps to encumber any of the properties, the subject of these orders, or to increase their amounts owing under any securities over the said properties without first giving the other party fourteen (14) days’ notice in writing.

12. That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to s 106A of the Family Law Act to execute such deed, document or instrument in the name of the said defaulting party and do all acts an things necessary to give validity and operation to the deed, document or instrument upon a Registrar being provided with verification of such refusal or failure by way of affidavit.

13. That any application for costs may be made by notifying the other party the costs orders sought and the basis for such order together with any evidence to be relied upon within twenty-eight (28) days of today and by approaching my Associate within a further thirty-five (35) days to arrange the further listing of the matter for a costs hearing. 

14. That all applications and cross applications be and are hereby dismissed.

15. That all issues be removed from the Active Pending Cases List.

16. That all material produced on subpoena shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same not before fifty-six (56) days from the date of these Orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Jurlina & Jurlina has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3468 of 2012

Mr Jurlina

Applicant

And

Ms Jurlina

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are property proceeding between the parties pursuant to s 79 of the Family Law Act 1975 (Cth) (‘the Act’).

2. They are complicated by two issues.  The husband and his son Mr K, to whom, for convenience, I shall refer to by his given name without intending any disrespect, own two properties as tenants in common.  The husband asserts that he holds his interest in these properties in trust for Mr K.  The wife disputes that assertion. 

3. The wife holds a number of accounts in the name of her son Mr F.  Mr F is profoundly disabled.  The wife asserts that the funds in these accounts originated with the earnings of Mr F when he was able to work and that they are his funds, notwithstanding that she is the only person entitled to operate the accounts.  The husband asserts that the monies in those accounts came from the joint funds of the husband and the wife and that they did not lose that character by being placed by her in an account in the name of their son.  He asserts, therefore, that the funds in those accounts are the property of the parties.

4. On 21 October 2013 I appointed Mr B as the case guardian of the husband.  This was due to the poor health of the husband.  It was anticipated that he would be unable to attend the hearing for that reason.  Ultimately, the husband managed to attend the hearing.  The case guardian did not, having been injured in a car accident shortly before the hearing.  As far as could be seen, this did not create any difficulties during the hearing

Background

1. The parties were each born in Country T.  The husband was born in 1941 and is now aged 73. The wife was born in 1946 and is now 67. 

2. In 1960 the husband migrated to Australia to work on the U Scheme.

3. On 23 April 1967 he purchased land at Suburb P.

4. In December 1968 the wife migrated to Australia.

5. The parties were married in 1969.

6. In 1970 their son Mr K was born.  He is now aged 43.

7. In 1971 the parties’ daughter Ms W was born.

8. In 1974 the parties’ son Mr F was born.  He is now aged 39.

9. In 1973 the Suburb P property was sold and a parcel of land at C Street, Suburb D (‘the C Street property’) was purchased.  The purchase was made in the name of Q Pty Ltd(‘Q’).  The shareholding of that company is still held ninety per cent by the husband and ten per cent by the wife.  It has been agreed by the parties that orders should be made for the liquidation of this company and for the distribution of its assets as part of the overall orders.

10. On 7 August 1980 the parties purchased 5 M Street, Suburb N (‘the M Street property’).  It is noted that the parties variously referred to this property as either 5-15 M Street or 5-11 M Street, however, the section 149 certificate, being annexure ‘BB’ to the wife’s affidavit, describes the property as  M Street, Suburb N and it is that description that will be used for the purposes of this judgment.

11. In 1981 the C Street property was subdivided into four blocks.  They constructed new homes on three blocks and sold them.  They constructed a new home for themselves on the block of land retained.  The home in which they previously lived on that property was moved onto the M Street property. 

12. On 13 April 1987 the parties purchased O Street, Suburb P (‘the O Street property’).  They constructed five industrial units on the site from which they continue to receive income. 

13. At some stage in 2008 the parties separated. 

The property, liabilities and financial resources of the parties

Applicable Principles

1. According to guidelines established through a series of leading decisions the court is required to determine the following matters:

   ·The assets, liabilities and financial resources of the parties to the marriage.

   ·Having regard to the breakdown of the marriage if any, is it just and equitable to consider whether the alteration of the parties’ interests in their properties is just and equal.

   ·All relevant contributions of each of the parties.  

   ·The matters in paragraphs (a) – (c) of s 79(4), must be identified and weighed against each other.

   ·The matters in paragraphs (d)-(g) of s 79(4), particularly paragraph (e) which takes up, by reference, the provisions of s 75(2) must be considered and a determination made as to what, if any, alterations should be made to the entitlements of the parties earlier assessed on account of their contributions.

   ·An order under s 79 must not be made unless the Court is satisfied in all of the circumstances, it is just and equitable to make the order.

Property of the Parties

The Property Owned by the Husband and Mr K Jurlina

1. It is first necessary to determine the nature of the husband’s interest in the two properties of which he and Mr K are the registered proprietors.

2. On 1 March 2008 the husband and Mr K acquired I Street, Suburb J (‘the I Street property’) as tenants in common in equal shares.  It is an investment property. 

3. On 26 February 2010 the husband and Mr K acquired G Street, Suburb H (‘the G Street property’) as tenants in common in equal shares.  Since that time Mr K and his wife have lived there with their children as their family home. 

4. The husband sought the following orders in his Amended Initiating Application filed 13 November 2013:

   1.That to the extent it is necessary in order to deal with this application the court exercises its accrued jurisdiction.

   …

   10.A declaration that the husband holds his interests in properties at [I Street, Suburb J (‘Suburb J’)] and  [G Street, Suburb H (‘Suburb H’)] on trust for the parties’ son [Mr K Jurlina (‘Mr K’)].

   11.That the husband shall within 28 days transfer the whole of his interest in [Suburb J] and [Suburb H] to [Mr K].

5. Mr K was not joined as a party to the proceedings by either the husband or the wife.  He did not seek to be joined as a party.  He gave evidence in support of his father’s application. 

6. At the commencement of the proceedings I raised the issue of whether or not, given the orders sought by the husband, Mr K should be joined as a party.  The husband’s counsel said he was not seeking any order which would affect Mr K’s interests.  Thus, the court is limited to making a finding as to whether or not, as between the husband and the wife, the husband has any interest in those two properties.  For that reason alone, it is difficult to see how any of the orders set out above could be made because, although the declaration would not be binding upon Mr K (he not being a party) the order of transfer would affect his interests.  

7. In any event, it would not be desirable to make a declaration as to the beneficial ownership of a property when not all of the persons with an interest in that property were parties to the proceedings.

1. The issue was then approached on the more procedurally apt way as whether or not any interest of the husband in those properties should appear in the list of assets of the parties.

2. Counsel said the mechanism by which the trusts arose was a gift by the husband to Mr K on the sale of the townhouses at the X Street property which will be referred to later in this judgment. 

3. No other basis for the trusts arising was advanced. 

4. Prior to the acquisition of the G Street and I Street properties Mr K and the husband, and occasionally the wife, engaged in a series of property transactions. 

5. In 1993 Mr K was 23, having just completed his apprenticeship. 

6. He said he had saved $80 000 which he used in the purchase and development of the first property.  He said that his mother had saved his wages as a paper boy and apprentice.

7. The wife said she had saved $30 000 in funds for Mr K. 

8. Given the manner in which the father says the trust arises it is not necessary to determine which of these versions is correct.  This is because no resulting trust, dependent upon the provision of funds, is relied upon.

9. In any event, the court is not able to resolve this dispute.  No one adduced any documents to support their assertions.  The evidence given by the parties in particular, but also by Mr K, tended to be given in broad generalisations.  The parties in particular, but also Mr K to a lesser extent, did not answer questions directly and were often remarkably vague.  At times their evidence was not consistent with conveyancing documents, land title records or bank records. Given the age of the events they are trying to recall this is not surprising. Without suggesting that anybody is deliberately telling an untruth it is not possible, however, to accept mere assertion from anyone. 

10. A property at Y Street, Suburb Z (‘the Y Street property’) was purchased for $382 000 on 27 September 1993 by the husband and Mr K as joint tenants.  According to the details inserted on the mortgage in relation to the stamp duty, the mortgage to the ANZ Bank used to acquire the property was $400 000. 

11. The husband said that property was in fact acquired by himself, the wife and Mr K.  The husband said that Mr K’s funds were used towards the deposit and the cost of servicing the loan. 

12. In his affidavit sworn 31 October 2013 the husband continued:

    20.The land was subdivided, the original house sold, a new home built on the subdivided battleaxe block at the back and that was also sold.  My recollection is that I made very little money on that transaction.  It was however, financed with a loan from the ANZ Bank secured over the matrimonial home at [Suburb D].  … I had given one of the duplexes to [Mr K] in this development.

13. Mr K said that he put $80 000 into the Y Street property and worked on the project from ‘dawn to dusk’.  He said in his affidavit sworn 5 November 2013:

    11.When the duplexes were finished, Dad said to me “choose one” and I did.  Dad sold “his” and mine was rented for a couple of years.  Dad made a good profit and he paid off the loan to the ANZ that he had and he still retained cash.  From memory I received about $500.00 per week or a fortnight clear.  The market escalated over that period of time and I sold my duplex at the peak of the market.  Again, my recollection was that I netted about Seven hundred and fifty thousand dollars ($750,000.00) from the sale.

14. The duplexes at the Y Street property were sold in May 1994 for $270 000, December 1997 for $344 000 and May 1999 for $350 000. 

15. Exhibit 7 which is an undated file note by the solicitor acting for the husband and Mr K said:

    Financed via the ANZ and they have already sold the front block with an existing house and repaid the bank part of the mortgage – there is still a balance due and the bank holds the security.…

    [Mr Jurlina] has almost completed the development and is awaiting a final inspection.  I believe this approval will then enable [Mr Jurlina] to proceed with the registration of the titles and have folio identifiers issued. 

16. The recollections of the husband and Mr K are not consistent with the details of the acquisition and sales of the property.

17. In June 1996 a property at AA Street, Suburb BB (‘the AA Street property’) was purchased by the husband, the wife and Mr K as tenants in common in equal shares.  The purchase price was some $278 000.  $310 000 was borrowed from the ANZ Bank.  The land was subdivided and one block sold on 27 March 1997 for $245 000 and the other on 12 March 1998 for $250 000 with the transfers taking place on 27 June 1997 and 23 April 1998, respectively (see Annexure ‘MJ1’ pages 155/6 of the husband’s affidavit sworn 31 October 2013).

18. The evidence does not disclose what happened to the proceeds of sale.  The wife said that she did not receive any.

19. On 3 October 1997 the husband, the wife and Mr K purchased a property at CC Street, Suburb DD (‘The CC Street property’).  The purchase price was, apparently, although it is not clear, $312 000.  An amount of $415 000 was borrowed from the ANZ Bank. 

20. That property was subsequently sold. The evidence does not disclose what happened to the proceeds.  The wife said that she did not receive any. 

21. On 15 April 1999 the husband and Mr K purchased EE Street, Suburb FF (‘the FF Street property’). 

22. A balance sheet about this property dated 30 June 2000, headed ‘The [Mr Jurlina] and [Mr K] Balance Sheet As at 30^th June 2000’ (Annexure ‘AAA’ of the wife’s affidavit sworn 8 October 2013) says:

    …

    -Land (April 1999) $570 244.00

    -Building Costs      $267 375.73

    …

23. In cross-examination the husband’s evidence was that he did not think that the property was acquired for $570 000 but thought that it was of the order of $300 000 to $400 000.  He said that it could be that the property was sold in 2001 for $534 000.  The evidence does not disclose what happened to the proceeds of sale, if any. 

24. On 15 April 1999 Mr K and his sister Ms W purchased a block of land being GG Street, Suburb HH as tenants in common for $140 000 (Exhibit ‘DDD’ of the wife’s affidavit).   

25. On 25 October 2002 the husband and Mr K as joint tenants purchased X Street, Suburb HH (‘the X Street property’). 

26. It is to be recalled that the trust alleged by the husband is said to have arisen on the sale of the town houses at the X Street property. 

27. The property was purchased for $555 000 (page 162 of annexures to husband’s affidavit).  It is not clear how much money was borrowed but it appears at least $502 162.76 was borrowed from the ANZ Bank because that amount was repaid to it on 25 October 2002 on the sale of one of the properties. 

28. Four townhouses were constructed at the X Street property.  They were rented out for some time. 

29. Mr K said of this purchase:

    12.… I purchased land at [X Street, Suburb HH] for five hundred and fifty thousand ($550,000.00).  I remember that amount of money as I did not have enough for the construction costs of what our architect had advised us to build and I was short on money.  I was also concerned that the Bank would not lend me, as the market out west was slower, and Dad offered to assist me cash wise.  I know I needed about a hundred thousand dollars ($100,0000.00) to finish it off, Dad gave me a substantial portion of that but I still needed a loan as I incurred a large tax bill from a profit made on [Y Street] and so as to assist me, Dad came on the loan with me.  As expected, the markets slowed again, so all four townhouses were rented.  I lived in Unit 3 (on site) as I wanted to keep an eye on the tenants and make sure the property retained its new look because ultimately, all the townhouses were to be sold and by this stage, my wife [Ms II] was pregnant with our third child.  Upon the sale of the three (3) townhouses I was able to clear the debts as well as make a profit and when my unit was sold, [Ms II] and I decided that it was time for us to buy a larger home, a family home that would suit our growing family.  I started looking around and the property [G Street, Suburb H] caught my attention.  Dad had a look at it with me and we both agreed that whilst the house was spectacular with a swimming pool, on two acres, it also had another purpose that later on the land could be subdivided.

    …

    16.I needed funds for the stamp duty due and payable on [Suburb H] and I approached the ANZ again to refinance [I Street] or could they increase the existing loan.  After short negotiations with ANZ, they drew up new loan documents, Dad had to sign off on it, and what I did not realise, I don’t think dad realised it at the time, that the Bank actually took the new loan out using [Suburb H] as security which then left [I Street] unencumbered.  In hindsight, I should have removed Dad’s name from the loan, as by that time I was well known and respected at the bank.

    (Errors as per original)

30. Thus Mr K suggests that an error led to his father being a co-borrower.  That does not explain how the husband came to be registered as a co-owner.  Further, he suggests that, apart from some cash he received from the husband, he was responsible for finding the funds for the purchase with the husband being a co-borrower just for convenience.

31. The husband said:

    31.… I say that upon the sale of the [X Street] Properties I had a conversation with [Mr K] in which I said to him “the money is yours go buy yourself a house for your family to live in”.  I am unsure as to why the property was purchased in the joint names of [Mr K] and myself, the only explanation I can offer is we had been doing things this way for many years.

32. This version does not match with Mr K’s version, save for him being a co-borrower for convenience.

33. One of the properties was sold on 22 of September 2006 for $350 000 (folio identifier …).  The second was sold on 1 October 2009 for $298 000 (folio identifier …).  The third was sold on 1 October 2009 for $300 000 (folio identifier …).  The last sold for $305 000 on 1 October 2009 (folio identifier …) [pages 163 to166 of Annexure MJ1 of the husband’s affidavit].

34. For the first sale the settlement sheet shows that the purchaser was required to provide a cheque for $316 344.08 in favour of the vendor (Annexure MJ1, page 172, of the husband’s affidavit).  For the second and third sales the settlement sheets show that cheques were to be drawn in favour of the ANZ Bank in the sums of $303 253 and $300 100. (Annexure MJ1 pages 177 and 180 of the husband’s affidavit)

35. On 14 April 2008 the husband and Mr K purchased the I Street property.  Given that the purchase price was $309 000 it is possible that the funds came from the sale of the first townhouse from the X Street property.  A number of bank cheques were used to complete the purchase.  The evidence does not enable a finding to be made as to the source of the purchase funds.

36. Mr K said of this purchase:

    20.My father has discussed that with me my mother stating that he is half owner of [Suburb J] and [Suburb H].  I reiterate, [I Street, Suburb J] is my investment property.  I have repaid my father any monies that he advanced me to complete the construction of [X Street], and [Suburb H] is his family home of myself, my wife and my children.  I understand that my father is seeking an order for the transfer of his interests in both of those properties to me and that if transfers do occur pursuant to orders of the Court that there will be no stamp duty payable.

37. At some time (11 May 2009 if the document was executed on the same day as the facsimile transmission slip states) a document was prepared on the letterhead of Mr Jurlina and was addressed ‘To whom it may concern’.  The document, being Exhibit 9,  said:

    This is to confirm that we are the owners of [I Street, Suburb J] being lots … and … in DP...

    We have constructed the buildings on each of the properties and confirm they are being sold as unoccupied and the premises are brand new.

    They have never been occupied.

38. The document was signed by both the husband and Mr K.

39. This document is not consistent with the husband’s case.  It was not explained. 

40. On 22 July 2009 62A I Street, Suburb J (being Lot … of DP …) was sold for $390 000.  The purchaser was directed to pay $351 246 to the ANZ Bank on settlement.

41. On 23 October 2009 the husband and Mr K deposited $900 000 with the ANZ Bank.  It was a term deposit maturing on 6 November 2009 (Annexure ‘RRR’, page 448, of the wife’s affidavit).  On 9 November 2009 they deposited $800 000 with the ANZ Bank in a term deposit maturing on 9 December 2009.  (Annexure ‘RRR’, page 449, of the wife’s affidavit).  On 10 December 1999 they invested $800 000 with the ANZ Bank in a term deposit maturing on 9 January 2010.  (Annexure ‘RRR’, page 450, of the wife’s affidavit)

42. Having regard to the dates involved I infer that they are the same amounts of money.

43. On 19 December 2009 the husband and Mr K entered into contract for the purchase of the property at G Street, Suburb H (‘the G Street property’).  That property settled with the provision of a bank cheque payable to the vendor’s mortgagee. 

44. After the purchase no mortgage was registered against the property.

45. I infer that it was the funds from the term deposit that were used to make that payment. 

46. Given the time of the sale of the last three of the townhouses at the X Street property (September and October 2009), and the amounts for which they were sold, it is more likely than not that the $900 000 deposited into the term deposit account with the ANZ Bank was the proceeds of the sale of those properties.

47. This, taken in accordance with my earlier finding that the $900 000 was used to purchase the G Street property, means that it is found that it is more likely than not that that property was purchased with the proceeds of the sale of the last three townhouses at the X Street property.

48. The issue then becomes whether the husband had a conversation with Mr K, as previously stated, in relation to the proceeds of the sale of the X Street properties in which he said ‘the money is yours go buy yourself a house for your family to live in’.

49. The husband’s evidence is not corroborated by Mr K.

50. Mr K did not mention such a conversation in either his written or oral evidence.  Indeed, what is quoted above at paragraph 56 is inconsistent with there being such a gift.  Mr K said his father ‘offered to assist me cash wise.  He apparently needed about $100 000 of which his father gave him a substantial portion.  He still needed a loan and his father ‘came on the loan with me’. 

51. It is a clear inference from his evidence ‘I was able to clear the debts as well as make a profit’, that Mr K regarded the profit from the X Street townhouses as his as of right and not dependent upon any gift from his father. 

52. I find the explanation offered by Mr K as to why the G Street property was registered as tenants in common with his father to be unconvincing and improbable.   

53. I have already referred to the caution in accepting evidence from either of the parties or Mr K in this case.  The differing evidence in relation to this issue from the husband and Mr K is a prime example of that. 

54. In any event, I would not accept the uncorroborated evidence of the husband on this issue.

55. Taking all these things into account I am not satisfied, on the balance of probabilities, that the gift asserted by the husband occurred.  It is most significant that not only does Mr K not refer to that conversation but gives a different version. 

56. The presumption of advancement was not relied upon by the husband.  In any event it does not apply.

57. In this case, had the G Street property been registered in the name of Mr K the presumption would have applied unless a contrary intent was established.  This is because one could infer a gift of the funds used to purchase the property.  That is not what occurred. 

58. Further, the presumption cannot be used to infer that the husband holds his interests in the G Street property in trust for Mr K.  This is because no transfer of an interest in either the purchase funds or property was involved and the registration of the two parties as tenants in common is evidence of a contrary intention.

59. It can be seen that the alleged gift did not extend to the I Street property.  That, of itself, is sufficient to dispose of the claim that the husband holds his half share in that property in trust for Mr K. 

60. The evidence does not disclose any other basis upon which a trust could properly be established or inferred and none was suggested. 

61. Accordingly, one half of the value of each of the G Street property and I Street property will appear in the parties’ list of assets.

The bank accounts of Mr F Jurlina

1. At the time of the hearing the wife operated a number of accounts in the name of Mr F Jurlina.  I was informed by counsel for the husband, without objection, that for the purposes of the balance sheet the amount in those accounts totalled $231 000. 

2. The husband asserts that, as the funds in these accounts came primarily from the parties joint accounts they remain joint funds. The wife asserts that whilst some funds may have come from the joint account most of the money in the accounts represents money earned by Mr F himself and also the proceeds of his disability pension.

3. Mr F is and always has been profoundly disabled.  The wife agreed that he had no capacity to understand a loan and that he is severely intellectually disabled. 

4. When he was younger Mr F worked casually for McDonalds as part of a program for the provision of casual employment for young adults with Downs Syndrome.  He was employed there between 2001 and 2006 when sadly Mr F’s mental condition deteriorated further and he was unable to work. 

5. The payslips show that over that period he seemed to work of the order of seven to eight hours per week receiving about $130 to $150 per week.  Mr F has received a disability pension because of his inability to work.

6. Over the years many payments have been made from those accounts.  The wife described them as being all expenses for Mr F but this is not so.  Whilst there were specific payments for him (such as a bed, a television, and expenses involved in attempting to send Mr F to the special Olympics) there were payments of $10 000 which the wife described as a gift from Mr F to her, $38 000 from this account to buy the wife a motor vehicle and $15 000 for her legal fees.    

7. The wife asserts she is the trustee of the funds of Mr F because of his inability to deal with his own finances.  The sums of $38 000 and $15 000 are said by her to be liabilities of hers because she is obliged to repay those funds to Mr F, the payments to her being loans.

8. The bank accounts show numerous lump sum deposits and withdrawals.  They were explained by the wife as monies being moved from one account to another but all being monies of Mr F. 

9. The joint accounts for the wife and the husband also show numerous significant withdrawals.  

10. I do not accept the wife’s evidence.  It seems to me highly improbable that the net sum of $231 000 would be the funds earned by Mr F at McDonalds and from what was saved from his pension.  Even if no expenses were drawn from this account, and many clearly were, it would be highly improbable for this sum to result from those sources. Significant sums have regularly been withdrawn from the accounts making it more unlikely.  Having regard to that and the sum presently in the accounts it is unlikely that Mr F’s wages and pension could be the sole source of the funds.

11. I have also already referred to the general difficulties of each of the parties’ evidence.  This applies equally to the wife who was frequently argumentative and avoided answering questions when giving evidence. 

12. Thus, the funds in the account represent the payments from the joint account.  It may well be that amounts originally went into that account from Mr F’s work at McDonalds and from his pension but the evidence does not enable any determination of what those funds might be to be made. 

13. Thus the only finding that can be made is that the funds originated from the joint account and thus remain the joint property of the husband and the wife.  Being jointly owned funds the wife cannot unilaterally declare a trust over them in favour of Mr F.

1. It follows that the monies in this account will appear in the parties’ list of assets and liabilities.  The claimed liabilities of the wife to repay those funds to Mr F also will not appear for the same reason.

Other items to appear in the list of assets and liabilities

1. The wife sought to have inserted as a liability the payment required to be made by her to JJ Pty Ltd, the parties’ accountant.  I am not satisfied that it is an appropriate expense to include.  It is an expense incurred in preparing for these procedings.

2. As I have earlier identified the M Street land is owned by Q Pty Ltd.  Its only function is to hold that land.  The parties agreed that if that property were to be sold the appropriate course of action was to in fact wind up Q Pty Ltd and for the proceeds of sale to be distributed as determined by the court.  An allowance of $7 000 needs to be made for the costs of the liquidator.

3. Capital gains tax will arise on the sale of the Suburb P property of the order of $200 000. 

The parties’ list of assets and liabilities

1. The parties otherwise agreed on their assets and liabilities. At the time of the hearing they were:

M Street, Suburb N

$1 230 000

O Street, Suburb P

$1 000 000

C Street, Suburb D

(owned by Q P/L)

$945 000

G Street, Suburb H (husband’s ½ interest)

$750 000

I Street, Suburb J (husband’s ½ interest)

$240 000

Proceeds motor home

$38 000

Utility vehicle

$2 000

Motor vehicle

$31 000

Husband & Mr K’s ANZ Cheque Account …

(1/2 share)

$2 324

Husband’s ANZ cheque account …

$3 253

L P/L (husband’s ½ interest)

$1 980

ANZ Bank Account …

$100

ANZ Bank Account …

$1 100

Household items Suburb D

$11 300

Household items Suburb N

$500

284 E Pty Ltd shares

$1 010

1218 E Pty Ltd shares

$4 336

1444 E Pty Ltd shares

$5 141

Tools of trade

$200

Mr F Jurlina bank accounts

$231 000

TOTAL ASSETS

$4 498 244

LIABILITIES

Capital Gains Tax in Suburb P sale

$200 000

Liquidators expenses for winding up Q P/L

$7 000

TOTAL LIABILITIES

$207 000

NET ASSETS

$4 291 244

sub-section 79(2) of the act

1. I must first determine whether it is just and equitable that there be an alteration of the property rights of the parties. This must be done by consideration of the relationship, its breakdown, if any, the property held by the parties and the basis on which it was held and used by them. The determination is not to be inflated with the consideration of matters arising under s 79(4).

2. In the present case I am satisfied that it is just and equitable to make orders altering the interests of the parties to the marriage to the property held by them.  They are no longer living in a marital relationship.  The basis on which the ownership of their property and the use of it, by reason of them being in a married relationship and living together, has ended and it is appropriate that their property interests are altered so as to meet their new needs and circumstances.  The parties join in seeking such an order. 

Section 79(4) factors

Contributions to Time of Separation

1. The parties have had a long marriage. 

2. The husband has worked long and hard and through his efforts the parties have managed to acquire and develop a number of properties.

3. The wife asserted that she had attended on and assisted at building sites. For example in relation to the Y Street property the wife said words to the effect ‘I worked everywhere wherever they needed help. I took [Mr F] to the building sites’.  When it was suggested to the wife that her role in the family was to look after the home and the children she said words to the effect ‘I was helping and present all the time and worked as hard as I could’. 

4. Having regard to the fact that at early stages in their lives the wife had the care of a number of young children and, since Mr F’s birth has always been responsible for his care, it is difficult to accept the wife’s evidence that she put as much effort into the building sites as she did. 

5. The wife was clearly the primary carer of the children and homemaker.  Much of the burden of raising the children fell upon her.  The main effort directed by the husband to the children was to take the children to Judo three times a week for fourteen years.

6. Mr F was diagnosed with Down Syndrome at birth.  His developmental milestones were delayed.  He started walking at 22 months of age and started to speak at the age of three years.  He is described by Dr KK as having a moderate intellectual disability.  He has required a lot of care which was almost entirely provided by the wife.  She continues to be his carer.

7. In about 2006 Mr F appeared to have increased anxiety.  He appeared to be scared saying that he could see lights and a man, and complained of headaches.  There was an increase in self talking and he was talking to people who were not present.  Mr F has subsequently been diagnosed with paranoid schizophrenia (September 2010).  In April 2011 he was described as having sub-clinical hyperthyroidism which has badly affected his weight making him more difficult for his mother to care for him.

8. In February 2012 Mr F was described as having anxiety and challenging behaviours.

9. Having regard to the above, I find these parties financial and non-financial contributions to the property acquired by them and to the welfare of the children up to the time of separation to be equal.

Contributions Post Separation

1. The wife has continued to care for Mr F.  As can be seen his condition has deteriorated.

2. Due to his age and his deteriorating health the husband has not worked.  The parties have relied upon the income received from the Suburb P properties to pay their way.  Having regard to the difficulties of caring for Mr F and his recently deteriorating condition I find that the contribution of the wife to the welfare of Mr F during that period requires a small adjustment in her favour.

3. Accordingly, I find that the contribution of the parties of their financial and non-financial contributions to the property acquired by them and to the welfare of the family up to the date of the hearing is 51 per cent to the wife and 49 per cent to the husband.

4. Having regard to the fact that neither party has any current earning capacity, due to their age and illness, the orders to be made in this matter will not have any effect upon their earning capacity.

Section 75(2) factors

Age and State of Health of Each of the Parties

1. The wife is in good health.

2. The health of the husband is very poor.  Dr LL is the husband’s treating respiratory physician.  He said:

   He has severe shortness of breath on exertion resulting from pulmonary fibrosis.  This is causing respiratory failure and he requires oxygen treatment.  He is short of breath on any exertion.  His condition will deteriorate and he will require increasing care.  He will require assistance with activities of daily living and personal care.  I expect his survival to be nine to twelve months.  He requires oxygen treatment constantly which makes it difficult for him to travel.

3. The wife said that she had recently observed the husband drinking coffee or walking without any walking or breathing aids.

4. It was not suggested to Dr LL that his report was in any way inaccurate.  In those circumstances the evidence of the wife to the contrary is not accepted.

5. The husband did not adduce any evidence of any particular medical expense or care that he is likely to require in the future.

6. Nevertheless, one might expect there to be an increase in his medical expenses and care requirements, in a general sense.

7. The wife submitted that the limited life expectancy of the husband should be taken into account.

8. In Re Lawrie & Lawrie (1981) FLC 91-102 Fogarty J said at 76, 750:

   It is appropriate and, in my view necessary, to consider the relative future needs of the parties in determining what is a just and equitable order under sec 79. Where there is a significant disparity that would ordinarily be reflected in the orders. This is frequently a result in cases of a more usual type. Further, where in any case it is clearly established that the future financial needs of a party will terminate (or perhaps significantly diminish) upon the happening of a definite future event, it is proper to take that into account. A number of examples of that readily spring to mind. The weight to be given to that will obviously vary from case to case.

   The effect of the orders here are to give the husband security of the home for the balance of his life, and then provide the wife with a small additional capital sum in excess of fifty per cent directed to providing her with modest accommodation and comfort for the balance of her life, a result achieved not of the expense of the husband but at the expense of his estate.”

9. Accordingly, given the husband’s future needs and life expectancy, in particular, he will require less funds in the future than the wife.

Income, Property and financial resources

1. The property and financial resources of the parties has already been set out.  They presently earn an income from the units at Suburb P but that will cease on their sale if that is to be ordered.  Each will then have to make provision for an income out of the capital that they receive.  Neither has the present capacity for gainful employment. 

Any fact or circumstance which in the opinion of the court or justice of the case requires to be taken into account. 

1. The wife raised three issues that need to be considered under this heading. 

2. The first was that there was non-disclosure by the husband.  The wife relied on seven instances of non-disclosures. 

3. The first four of these instances were that the husband’s financial statement referred to bank statements that were ultimately not produced, non-disclosure of E Pty Ltd shares, the non-disclosure of the company L Pty Ltd Bank Account and an ANZ bank account.  These matters were rectified by the conclusion of the hearing and there are appropriate entries in the parties’ list of assets and liabilities. 

4. The fifth instance was that after the sale of the motor home which appears in the list above the husband was still arguing over the value and seeking the appointment of a valuer rather than disclosing the sale.  The sale is now disclosed and the proceeds will be taken into account.

5. The sixth instance was a failure by the husband to disclose his interest in MM Pty Ltd. 

6. It emerged during the hearing that the husband owned one share in the company called MM Pty Ltd.  Mr K owns the remaining ninety-nine shares.  According to its Statement of Financial Position as at 31 December 2013 it has net assets of $761,788. 

7. Assuming that the shares could simply be valued at the net asset backing of the company, which may well be unwarranted, one share would be worth $7,617.88. On 20 January 2014 the directors of MM Pty Ltd (the husband and Mr K) resolved as follows:

Home Owners Insurance

Insurance:

To satisfy the requirements of the company to obtain home owners warranty insurance it was resolved that 25,000 ordinary shares at $1 00 each be allocated to [Mr K Jurlina].

1. That Minute was not disclosed.

2. No evidence was led as to the value of the shareholding or the value by which that shareholding of the husband was diminished by the allotment of shares.

3. On its face, in the context of the assets of this case, the one share did not seem to be of significant value. Given that the value of the husband’s one share was not the subject of agreement or valuation, and in the absence as to any evidence that an asset-backed valuation is appropriate or that the accounts provide a proper basis for doing so, no value will be attributed to this share.

4. The final instance of non-disclosure arose from a mortgage of the G Street property. Sometime after its purchase a mortgage of $207 000 was registered on the title.  Mr K said that he used part of the funds borrowed to pay a tax bill of $50 000.  Accordingly, it was submitted by the wife that the fate of $150 000 was unexplained and thus not disclosed.

5. There is no evidence that the husband received any part of these funds.

6. I am not satisfied that the above matters require anything other than the ordinary approach to the property division or that the basis for a bolder than usual approach has been established. 

7. The second matter arose out of the husband’s conduct.  The husband bet on horses.  It was said that he had lost some $11 000.  The mere losing of money betting on horses, particularly of the magnitude alleged, is not a matter that requires adjustment.  The parties to a marriage are entitled, generally speaking, to spend the funds as they see fit, particularly where this was part of their married life.

8. The third matter arises from was what was said by the wife to be the severe violence that she suffered throughout the relationship at the hands of the husband.  The husband denied this.

9. Like much of the evidence of this case it is difficult to accept either of the parties’ version of events on this issue.  It is true that on one occasion she was admitted to hospital as a result of a beating by her husband.  Mr K said that from what he observed during the marriage that the parties fought like cats and dogs but there was limited physical violence. 

10. If, however, one assumes the violence was of the magnitude alleged by the wife one would still need to consider its impact.  As set out in Kennon & Kennon (1997) FLC 92 - 757 violence may be taken into account if it renders other contributions made by the party, the subject to the violence, more onerous. It is, however, necessary to establish, by evidence, that particular contributions were made more onerous by the conduct of the husband. There is no such evidence. The wife’s claim for such an adjustment does not succeed.

11. The husband raised two issues that he said required consideration. 

12. The first is that the wife had obstructed the husband’s relationship with Mr F.  This was said to be a negative contribution.  As the concept of a negative contribution does not exist it is not necessary to pursue this further.

13. The second matter requires more consideration. 

14. Contrary to the husband’s case it has been found that the husband is a one half owner of the I Street and G Street properties.  This is so as between he and the wife.  However, as between the husband and Mr K, it is said, the husband has committed himself to a position that the properties are Mr K’s so that he will not be able to realise any benefit from them which he can use for his support and maintenance.  Further, it was said that if in the event an order is to be made for the sale of the M Street property, which is where the husband lives, such a sale should be delayed until after his death so as to provide somewhere for him to reside in the near future. 

15. There is force in both of those submissions.  It would not be appropriate, given the husband’s need for support that he be left with only his interest in the two properties co-owned by the son.  It will also be appropriate, if possible to permit him to reside in the M Street property for the remainder of his life, he having nowhere else to live.

16. Taking all these things into account, it is appropriate that there be an adjustment in favour of the wife of 7 per cent so that she will receive 58 per cent of the net assets and the husband 42 per cent. The adjustment of 8 per cent is a sum of $343,300 which will be added to the wife’s share of the assets and removed from the husband’s.  It is a substantial sum but it recognises that the primary care and support for Mr F will fall solely on the wife’s shoulders.  This is a large burden both in financial and non-financial terms.  It recognises that the husband will need some care and support but his life expectancy is short. 

17. Given that the net assets of the parties are $4,291,244 the wife therefore needs to receive $2,488,922 (58 per cent) and the husband $1,802,322 (42 per cent). 

18. The wife will retain the following assets:

C Street, Suburb D	$945 000.00
Motor vehicle	$31 000.00
ANZ Bank Account …	$1 100.00
Household items at C Street	$11 300.00
1218 E Pty Ltd Shares	$4 336.00
Mr F Jurlina bank accounts	$231 000.00
TOTAL	$1 223 736.00

1. Accordingly, in order to receive 58 per cent of $4 291 244 she will need to receive an additional $1 265 186 ($2 488 922 - $ 1 223 736).

2. The husband will retain the following assets:

His half interest in G Street, Suburb H

$750 000.00

His half interest in I Street, Suburb J

$240 000.00

Motor home (which he received the proceeds)

$38 000.00

Utility vehicle

$2 000.00

His half share in a joint ANZ Cheque account with Mr K

…

$2 324.00

ANZ Cheque account …

$3 253.00

ANZ Bank account …

$100

Half the value of his shares in L Pty Ltd

$1 980.00

Household items at Suburb N

$500.00

1444 E Pty Ltd shares

$5 141.00

Tools of trade

$200.00

TOTAL

$1 043 498.00

1. Accordingly, in order to receive 42 per cent of $4 291 244 he will need to receive an additional $758 824 ($1 802 322 - $1 043 498).

2. This leaves three assets to be dealt with.

3. The husband has no significant sums with which he can support himself. As the parties have agreed to the sale of the O Street property it should be sold and the net proceeds (after payment of any encumbrances, selling costs and capital gains tax) distributed by each party receiving $350 000.00 and the balance held in a joint interest bearing account.  The balance is to be held in an interest bearing account pending the sale of the M Street property.  The purpose of this order is to provide the parties, and in particular, the husband, with an immediately available source of funds.  As the actual proceeds of sale are unknown I have taken a cautious approach in determining the sum to be released.  On present estimates the net balance retained should be of the order of $100 000.

4. This will mean that the wife will need to receive a further $915 186 and the husband a further $408 824 – a total of $ 1 324 010.

5. The M Street property is valued at $1 230 000.  The sale proceeds from the M Street property are to be added to those funds which will produce a sum of approximately $1 330 000.  The exact sum is unknown as it will depend upon the sale values.  The sum is to be distributed as to $915 186 to the wife and $408 824 to the husband.  Any surplus is to be distributed to the parties as to 58 per cent to the wife and 42 per cent to the husband.  If there is a shortfall the proceeds of the M Street property and the balance of the O Street proceeds are to be distributed in the ratio 69 per cent to the wife and 31 per cent to the husband (being $915 186/$1 324 010 and $408 824/$1 324 010 respectively).  This should then, as best as can be done, achieve the intended overall distribution of 58 per cent to the wife and 42 percent to the husband.

6. The sale of the M Street property should be delayed because of the husband’s ill health and because he has nowhere else to live.  The sale should not occur until after his death or until after he ceases to reside in the property.

7. There are 284 jointly held E Pty Ltd shares.  The wife should receive 58 per cent of these (165) and the husband 42 per cent (119).

8. Thus the wife should receive approximately 58 per cent of the available assets and the husband 42 per cent.  The exact percentage will depend on sale values but the result will be sufficiently close to the intended distribution.

9. Taking all of the above matters into account, I am satisfied that the orders I propose to make are appropriate, that is to say, just and equitable taking into account all of the matters I have discussed under the heading s 79(4) as set out above. The orders meet, as best they can in the circumstances, the obligation under s 81 finally to determine the financial relationship between the parties and avoid further proceedings between them to the extent possible.

I certify that the preceding one hundred and sixty-five (165) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 2 May 2014.

Associate:

Date:  2 May 2014