Details
- AGLC
- Kacar & Corluka [2022] FedCFamC1F 523
- Case
- [2022] FedCFamC1F 523
- Decision Date
-
CaseChat Overview and Summary
In this family law matter, the parties were before the court to resolve a dispute over property settlement. The wife claimed that the husband owed her $84,200 from loans she had made to him during their marriage. The husband denied these were loans and instead claimed they were gifts. The case was heard over two days in July 2022 and the court reserved its decision. The court had to determine whether the sums claimed by the wife were loans or gifts, and if they were loans, whether they should be repaid. The wife argued that the husband had not made full and frank disclosure of his financial situation, and that the funds should be repaid to her to cover her ongoing costs. The husband admitted that he had spent large sums of money on gambling, but denied owing the wife money from loans. The court found that the sums claimed by the wife were loans, not gifts, and that they should be repaid. The court ordered that $84,200 be paid from the residue of the parties' property settlement to the wife. The court also made orders that each party retain their own assets and superannuation, and that each party be liable for their own debts.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
The question of whether or not they were loans or gifts was in contest, with both the husband denying that they were loans and the wife not admitting that they were loans. The amount sought by way of repayment on Ms F’s behalf was not the full $335,000, but only $84,200, which was said by the Trustee on behalf of Ms F to have been used by the husband to pay the mortgage, establishing a “nexus” within the concept identified in Martin & Martin [2015] 54 FamLR 548, which factual nexus the wife denies. The Trustee says through the solicitor on the record, Mr Agamalis, that:[Ms F] requires the funds advanced by way of loan to be repaid for her ongoing costs, not limited but including her accommodation costs. New South Wales Trustee holds minimal funds, approximately $700, on behalf of [Ms F].PROCEDURAL BACKGROUND AND THE HEARING These property proceedings were instituted by the wife on 19 April 2016 in respect of property matters. On 30 November 2017, the husband filed his response and joined parenting. Final parenting orders were made by the then Federal Circuit Court on 7 April 2020. On 6 May 2022, the matter was mentioned before me, and pursuant to the case management powers, and noting the relatively small sum in dispute, orders were made as to the evidence that could be relied upon, witnesses who could be cross-examined, and the matter was set down for two days hearing only. As it turned out, two days was more than adequate time to deal with the matter. This matter came on before me for hearing for two days on 11 July, and it concluded on 12 July, at which time I reserved my decision. At the hearing, the wife moved on her further amended initiating application filed on 26 March 2021, read her updated financial statement which she had sworn on 26 March 2021 and her affidavit filed on 3 May 2021, together with a short updating and correcting affidavit of 28 August 2021. The wife also read the affidavit of her mother, Ms G, filed on 3 May 2021, and tendered a range of documents, many of which were provided to substantiate the section 50 (Evidence Act 1995 (Cth)) schedules prepared to prove the husband’s expenditure of over $700,000, it was alleged, through gambling. I note that the husband ultimately, in cross‑examination, largely admitted that he had spent the substantial sums largely on gambling. The wife also relied on her outline of case document filed on her behalf on and dated 6 July 2022, which included the minute of order sought by her seeking the entirety of the residue. It was part of her case that the only property the Court should deal with is the residue, not only because of the short nature of the relationship but because she says, and it is quite clear, that the husband has failed to make anything approaching full and frank disclosure. Both the wife and Ms G were required for cross-examination. The wife was represented by Counsel. The husband relied upon his further amended response, his affidavit and his financial statement all filed 22 June 202. He also relied upon documents which had been exhibited to his affidavit of 27 March 2020, which he did not read, but which to some extent were put to him by Counsel for the Trustee. This somewhat unusual course was not objected to and was permitted as the husband was not legally represented at trial, although he had been legally represented by a range of different solicitors throughout the proceeding.
Evidence
Evidence Before The Court
To the extent possible, pursuant to section 128, the husband should be given a certificate retrospectively in respect of his evidence which suggested that he had or may have perjured himself on the issue of the loans, and the relevant part of the transcript would be taken out and a certificate given to the extent to which I have the power to do so.Ms F’s Evidence I now come to Ms F’s evidence. Ms F’s affidavit filed 13 December 2018 was originally objected to, but was ultimately admitted. It is clear that she was unavailable for cross‑examination. Her inability to be cross-examined did not go to admissibility, but it is a matter which does go to weight. Ms F said she was 77 when she swore her affidavit. She described herself as the husband’s stepmother, having commenced a relationship with the husband’s father in about 2013. That is significant as in her mind she has put herself in a position of a stepmother. She gave evidence about these loans, and again, as it is relatively short, I consider it appropriate to read the entire substance of her affidavit on the topic onto the record. She says commencing at [6] (Page 38 of MFI 3):Financial Contributions6. From […] December 2014 until […] July 2016, I loaned [Mr Corluka] various amounts of money by way of loans. with the expectation that [Mr Corluka] would return it once the [Suburb D] property was renovated and sold.7. The details of these loaned amounts are outlined as follows in the following paragraphs.8. [In] December 2014, I drew a bank cheque in favour of [Mr Corluka] from my bank account with [Q Bank] for $45.000.00, which was deposited [in] December 2014 into a Westpac Bank Account held in [Mr Corluka’s] name. A copy of the bank cheque and details of the transaction as recorded by Westpac Banking Corporation have been annexed to this affidavit and is marked "[MF-1]".9. [In] August 2015 I drew a bank cheque in favour of [Mr Corluka] from my bank account with [Q Bank] for $70,000.00 which was deposited [in] August 2015 into [a W Bank] account held in [Mr Corluka’s] name. A copy of the bank cheque and details of the transaction as recorded by [W Bank] have been annexed to this affidavit and is marked “[MF-2]".10. [In] September 2015 I drew a bank cheque in favour of [Mr Corluka] from my bank account with [Q Bank] for $100,000.00 which was deposited [in] September 2015 into [a W Bank] account held in [Mr Corluka’s] name. A copy of the bank cheque and details of the transaction as recorded by [W Bank] have been annexed to this affidavit and is marked "[MF-3]".11. [In] October 2015 I drew a bank cheque in favour of [Mr Corluka] from my bank account with [Q Bank] for $40,000.00 which was deposited [in] October 2015 into [a W Bank] account held in [Mr Corluka’s] name. A copy of the bank cheque and details of the transaction as recorded by [W Bank] have been annexed to this affidavit and is marked "[MF-4]'.12. [One week later] I drew a bank cheque in favour of [Mr Corluka] from my bank account with [Q Bank] for $40.000.00 which was deposited [in] October 2015 into [a W Bank] account held in [Mr Corluka’s] name. A copy of the bank cheque and details of the transaction as recorded by [W Bank] have been annexed to this affidavit and is marked "[MF-5]".13. [In] July 2016 I drew a bank cheque in favour of [Mr Corluka] from my bank account with [Q Bank] for $40,000.00 which was deposited [in] July 2016 into [a W Bank] account held in [Mr Corluka’s] name. A copy of the bank cheque and details of the transaction as recorded by [W Bank] have been annexed to this affidavit and is marked '[MF-6]"14. In total I have loaned [Mr Corluka] an amount of $335,000.00 from the bank cheques I have described above.15. The owed sum of $335,000.00 was agreed between [Mr Corluka] and I to be returned in full from the proceeds acquired from the sale of the [property at C Street, Suburb D].
Decision
Reasons for decision
I am satisfied, taking into account those factors and all the other factors I have referred to above, including non-disclosure, waste, the failure to provide child support, my concerns about the husband’s evidence about his earning capacity, that it is appropriate, for the purposes of adjustments, only to deal with the residue and not to take into account the superannuation in particular or the disposition of Suburb J either as an add-back, or given that it may yet come back to the wife through her parents as a financial resource.DECISION I am satisfied that the section 90SF factors overwhelmingly favour the wife. I note that after the payment to the third party E Pty Ltd and the payment of her legal fees, which she has to pay herself but nevertheless which have been larger than they should have been by reason of the husband’s conduct, there will be little of the residue left. Noting that she made the greater contribution, I am satisfied that even if the wife gets all of the residue and is allowed to keep all of her property and superannuation and not account for the add-back, whilst it is technically just and equitable in terms of the test I have to apply so that I may make the order, giving her everything is not just and equitable in common parlance, as the wife is receiving far less than I suspect she would if the Court had any real idea of what the husband’s true earning capacity or financial position were. Accordingly, noting the findings I made about Ms F, I am satisfied that it is appropriate, just and equitable that an order be made adjusting the parties’ property interests in terms of Stanford v Stanford (2012) 247 CLR 108. These orders are in terms that determine and end the financial relationship between the parties. I will enter orders in accordance with these judgments, which will include an order that the solicitors holding the residue pay to E Pty Ltd the sum of $40,183. I will make the order for a section 128 certificate. I will make an order that the remainder of the residue be paid to the wife and I will otherwise make orders in terms proposed by the wife which effectively have the orders that each party is able to retain their own assets, is able to retain their own superannuation and is otherwise liable for their own debts. I will enter those orders, and I will order that a written copy of this judgment be taken out. If any party seeks costs, they are to make an application within the Rules. Those are my reasons for decision.
Ratio Decidendi
Legal Principle Established
The contributions to family welfare during the three months the parties lived together were probably equal, but again this was an extremely short period of time.Post-separation contributions I now turn to post-separation contributions. The husband ceased work in mid-2016, he says as a consequence of the stress of these proceedings. Prior to that his declared income does not sit comfortably with the sums of money flowing through his bank account which he said was as a person contracting to a head contractor but then having subbies who he had to pay. He said this was done through an ABN. He had disclosed in the proceedings that he had a company but said it never traded. He did not disclose the ABN and did not disclose material about the alleged contractors who were receiving payments which left him with little net income despite being paid quite large sums of money. This was part of the non-disclosure pattern. There were countless letters sent to him. His defence to non-disclosure was to say he gave his solicitors everything and that the Court should find that a range of different solicitors who acted for him all failed to pass this information on. Taking into account the issue of what he said about the loan, I give no weight to that. I will come to that in more detail later. The simple fact is that the wife has provided the overwhelming financial support for X since separation. The father is now paying $5 per month in child support. I will come to the likelihood about who will provide for X in the next 10 years when considering the section 90SF factors. The husband moved into Suburb D and paid the mortgage. He claims this is a financial contribution, however, his mortgage contributions were the equivalent of rent, and I give them no weight as a positive financial contribution. The wife has provided the larger portion of the parenting and homemaking to X since July 2014. I note that there was a dispute about this given that there were criminal proceedings and AVO proceedings over allegations made against the father in respect of X. The criminal charges were dismissed, but an AVO which allows the father contact with X was granted. I cannot make any findings about this matter. I assume for these purposes, in those circumstances, that the father would have spent such time with X as the orders allowed if he could have. SUMMARY AND FINDINGS – CONTRIBUTIONS In terms of the analysis of contributions, the husband may have made a slightly larger contribution to the purchase of Suburb D, although only slightly larger once the wife’s parents’ stamp duty is dealt with as a contribution. In those circumstances, the contribution by the father may have only been a few thousand dollars greater. I give no weight to the mortgage payments the husband has made, as they were in effect equivalent to rent and did not constitute a positive contribution. He then made a negative contribution by way of living rent-free in Suburb D for a year with the mortgage going up.