Kacar & Corluka
[2022] FedCFamC1F 523
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kacar & Corluka [2022] FedCFamC1F 523
File number(s): PAC 17701 of 2016 Judgment of: SMITH J Date of judgment: 25 July 2022 Catchwords: FAMILY LAW – property – final hearing – oral reasons – very short de-facto relationship – purchased former matrimonial home – conceived one child – main issue distribution of residue of $216,721 from sale of FMH – each party claims 100% - husband’s step-mother intervenor claiming repayment of post separation loans to husband from residue. Husband - significant adverse credit findings non disclosure – gambling waste – no financial contribution to child - s128 Evidence Act certificate regarding alleged loans. Wife made greater contributions –wife will have sole financial responsibility for 8 year old child – adjustment in favour of wife. Liability to third party contractor who fixed FMH for sale to be paid first from residue. Intervenor unable to establish loan rather than gift – unable to establish nexus to residue. As between parties wife to receive entire residue after payment of contractors debt. All other assets, debts and superannuation to remain with the party. Legislation: Evidence Act 1995 (Cth) ss 50, 128.
Family Law Act 1975 (Cth) ss 90SF, 90SM, 90SS, 90ST
Cases cited: Black & Kellner [1992] 15 FLR 343
Martin & Martin 54 FAM LR 548
McMahon & McMahon [1995] 19 Fam LR 99
Norbis & Norbis [1986] 161 CLR 513
Roy & Yalden [2020] FamCA 1026
Stanford v Stanford (2012) 247 CLR 108
Weir & Weir [1992] 16 FLR 154
Division: Division 1 First Instance Number of paragraphs: 215 Date of hearing: 11-12 July 2022 Place: Sydney by Microsoft Teams Counsel for the Applicant: Mr O’Reilly Solicitor for the Applicant: Katsikaris Family Lawyers Solicitor for the First Respondent: Litigant in person Counsel for the Second Respondent: Mr Richardson Solicitor for the Second Respondent: Chamberlains Law Firm ORDERS
PAC 17701 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KACAR
Applicant
AND: MR CORLUKA
First Respondent
NSW TRUSTEE & GUARDIAN
Second Respondent
order made by:
SMITH J
DATE OF ORDER:
25 JULY 2022
THE COURT ORDERS THAT:
1.Within no less than 30 days, and no more than 40 days, from the date of these orders the remaining proceeds of sale of the property known as and located at C Street, Suburb D in the State of New South Wales (“Suburb D property”) currently held by B Lawyers on behalf of the Applicant and Respondent to these proceedings is to be distributed by B Lawyers as follows:
(a)$40,183 to E Pty Ltd in payment of their invoices in respect of work done on the Suburb D property; and
(b)the remainder to the Applicant.
2.Within 14 days the Applicant is to provide to B Lawyers:
(a)a copy of these Orders, and,
(b)a copy of an invoice from E Pty Ltd relating to the Suburb D property with payment details, and,
(c)instructions on the account to which the funds payable to her are to be paid.
3.Save as provided above, each of the Applicant and the First Respondent is declared to have the sole right, title and interest as against the other in any property or superannuation in their name, and is declared to be solely liable as against the other for any liabilities in their name, and is declared to be liable to indemnify the other in respect of any liabilities in their name.
4.The First Respondent Mr Corluka is granted a certificate issued under Section 128 of the Evidence Act 1995 regarding evidence given in these proceedings by that person on 26 July 2022 concerning the issue of whether the $335,000 in funds received by him from Ms F, as identified in Ms F’s affidavit sworn 13 December 2018, were gifts, loans, or loans which were subsequently forgiven.
5.The Registry Manager is to prepare for signature the certificate in accordance with Form 1 of the Evidence Regulations annexing the relevant parts of the transcript.
6.The Second Respondent’s Response be dismissed.
7.If a party seeks costs they are to file and serve an Application in a Proceeding and supporting affidavit in accordance with the Federal Circuit & Family Court of Australia (Family Law) Rules 2021.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SMITH J:
These are oral reasons for judgment in a final property hearing about what should happen to the approximately $216,721 held in the wife’s former solicitor’s account in the parties names (“the residue”) following the sale of the real property at C Street, Suburb D (“Suburb D”), which is real property that had been jointly purchased and owned by the applicant, Ms Kacar (the de facto wife or for simplicity the wife) who is now 50 and the respondent, Mr Corluka (the de facto husband or for simplicity, the husband) aged 49 during their short de facto relationship.
There is no dispute that they were in a de facto relationship pursuant to the Family Law Act 1975 (“the Act”). There is a dispute as to whether the de facto relationship lasted, with cohabitation, three months or nine months, but on any case, it was a very brief relationship. During the course of the relationship, they purchased Suburb D and had a child.
Each party seeks final orders altering the interests of the parties to the de facto relationship with respect to their property pursuant to section 90SM of the Act, and determining and ending the financial relationship between the parties pursuant to section 90ST of the Act.
There was no issue raised as to the existence or breakdown of the de facto relationship, nor as to any jurisdictional question. Each party claims that on a proper analysis of their relative contributions and a consideration of the adjustments pursuant to section 90SF, that pursuant to 90SM of the Act, they should receive 100 per cent of the residue.
The New South Wales Trustee and Guardian (“the Trustee”) has also been joined in these proceedings on behalf of the husband’s stepmother, Ms F. Ms F has had a serious medical incident. There is an order of the Guardianship Division of the New South Wales Civil and Administrative Tribunal (NCAT) dated September 2019 appointing the Trustee as her financial manager. Ms F had earlier filed an affidavit in these proceedings dated 13 September 2018 stating that she loaned the husband $335,000 and that these funds were repayable on the sale of Suburb D. The transfers from Ms F to the husband of the $335,000 between about December 2014 and July 2016 were not in contest.
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.
Ms F, appearing by her litigation guardian, was represented by Counsel instructed by the Trustee. She relied upon and read her affidavit, which had been filed on 13 December 2018, and the affidavit of Mr Ian Agamalis, who was the solicitor employed by the Trustee, filed on 5 August 2020, which went mainly to formal matters of proof concerning the orders appointing the Trustee and also as to Ms F’s capacity. Mr Agamalis was quite sensibly not required for cross-examination. There was no dispute that Ms F had suffered from a medical incident and has lost capacity and is the subject of a protective order. The Trustee filed a court book, which included the relevant financial management orders, and, as I said, the status of the Trustee and Ms F’s incapacity were common grounds. The Trustee also relied upon a submissions bundle, setting out the precise minute of orders sought as well as identifying the legal issues.
THE PROPOSALS
The wife seeks that she receive 100 per cent of the net proceeds of Suburb D and that otherwise each party retain their own assets, debts and superannuation. During the course of the hearing, the wife also sought orders that the debt in her name of $40,183 owed to “E Pty Ltd” for renovations to the Suburb D property she undertook as trustee for sale prior to its sale, and to facilitate its sale, be met first from those funds to protect the interests of E Pty Ltd as a third party to the proceeding.
The husband, by his order 2 of his further amended response of 22 June 2021, sought orders that he receive the entire sum in the controlled moneys account or term deposit.
The Trustee sought orders that the parties jointly pay $82,400 from the proceeds of sale or the residue pursuant to section 90SS of the Act. Submissions were made by the Trustee about, but no one ultimately disputed, the power or jurisdiction of the Court to make the orders sought by the Trustee if the Trustee was able to establish their case. The Trustee’s claim was based upon $82,400 of the $335,000 transferred by Ms F to the husband having been used by him to pay the mortgage on Suburb D during a period of time when the husband had sole use and occupation of Suburb D.
ORDERS
As I understand the parties are listening, and to avoid adding further unnecessary stress to this extremely long-running litigation, it seems appropriate to me, in the context of an oral decision, to indicate the conclusion now before I go through setting out all of my reasons.
First, I find that the Trustee has not met the evidentiary onus on it or the legal onus to prove on the balance of probabilities that the moneys advanced were a legally repayable loan rather than a gift from Ms F in her capacity as stepmother to the husband. I note that although it may not be strictly necessary, I also find that there is not the sufficient nexus between the $82,400 which was paid by the husband towards the mortgage, as the amounts paid were no more than the rental value of the property during the period when he occupied it.
In respect of the husband, I think it is important to state that he effectively admitted perjury and alleged a conspiracy to commit perjury with Ms F in respect of the issue of Ms F’s loans, although I do not find that there is any evidence that Ms F did so. It follows that the husband is a witness of no credit. In coming to that conclusion, I rely not only upon his somewhat surprising evidence to the Court regarding the various changes of evidence he made concerning the loan, but note that it is clear that he has not made full and frank disclosure. There are real concerns about whether or not he has been able to work since mid-2016, but since he has said he cannot, he has left the entire financial support of the parties’ child to the wife, noting that the husband is currently paying $5 per month or 17 cents a day in child support. There are also issues about the fact that it appears he has gambled away something like $700,000.
I also find that the only relevant asset for consideration of adjustment is the residue of the Suburb D property acquired during the parties’ brief de facto relationship, and that all other assets, liabilities and superannuation should stay with each party, excepting for the debt to E Pty Ltd, which I agree should be paid first from the residue, as submitted by the wife, to protect the interests of an innocent third party who is owed a debt.
As I foreshadowed, as between the parties, for the reasons I am going to set out below, taking into account the 90SM contributions and, significantly the 90SF adjustment factors, I find that the residue should be paid 100 per cent to the wife on condition that, as she submitted should occur, the debt owed to E Pty Ltd, who did the work to allow Suburb D to be ready for sale, to be paid from the residue first.
For the reasons set out below, I am satisfied pursuant to the relevant principles that it is both appropriate, and in all the circumstances just and equitable, to make the orders I make.
THE DE FACTO RELATIONSHIP
It appears that the parties met in around 1993 and dated for a while then but did not live together, and in or around 2006, they then dated for a little bit but did not live together, and in around 2011, they dated again but did not live together. During this period, the husband was married to another woman and had a child.
In around 2013, the parties started dating again. The parties mixed their financial affairs by opening joint bank accounts with the intention of purchasing a house in about mid-2013. In 2013, they fell pregnant with X.
There was a dispute about cohabitation, which commenced at the wife’s parents’ house. The wife said that the parties did not commence cohabitation until after X was born and she returned home to her parents’ house in March 2014. She said that in about June of 2014, the parties separated on a final basis after cohabiting for approximately three months in her parents’ home. The wife says that the husband was living with his father until he moved in with her family and her.
The husband’s case was that the parties were cohabiting at the wife’s parents’ house from October 2013, and they separated on, he says, 17 July 2014.
As I have said, there is agreement that despite the short period of cohabitation, taking into account the fact that they had a child and purchased a house together, there was a de facto relationship and no jurisdictional issues.
Given the findings I make concerning the husband’s credibility, which I am still to come to in detail, and noting that the husband referred to a series of documents which he said proved his point, but the dates on the documents do not actually prove his case, on balance, where I have only the wife’s and the husband’s oral evidence to assist me, I prefer the wife’s oral evidence and find that the parties cohabited from March to about June or July 2014.
Ultimately, it makes relatively little difference. The parties were in a form of relationship anticipating cohabitation and a child from mid-2013, when they opened bank accounts, through to when they became pregnant, and acted as a couple in pursuit of those goals and a life together through to the birth of their child and the purchase of Suburb D in early 2014. They lived together for about three months from March 2014 and separated about three or four months later, in about June to July 2014.
This was, on any analysis, a very short de facto relationship.
CONTRIBUTIONS
The relationship being extremely short, the financial contributions during the relationship were primarily to the purchase of Suburb D, although the parties led evidence about other work they did on family members’ properties and on Suburb D.
The husband was a labourer and doing trade work (although not licensed in those trades) and the wife was working, as she still is.
Initial Financial Contributions
The husband’s evidence was that at cohabitation, he had a vehicle worth $25,000, a work vehicle, which he did not seek to value and savings of approximately $50,000. Although the wife disputed the extent of the husband’s savings, I note that there is a cheque dated early 2013 which has as its printed statement “[H Venue] prize winner payout cheque.” That cheque made out to the husband in early 2013 was in the sum of $47,098.74. That is contained in the husband’s documents at page 24 of MFI 9 and I accept that the husband had that sum at the purchase of Suburb D.
The wife had a one-third interest in a property at Suburb J, which she had been gifted by her parents in the early 2000s. Her parents jointly owned the other two-thirds. The wife had nominal savings.
At the commencement of dating and cohabitation, the wife said that she was employed as a coordinator with FF Company, earning approximately $70,000 gross per year.
The husband’s declared income for the 2013 financial year was $22,120 [page 252 of MFI 9], for the 2014 financial year, it was $20,466 [page 254 of MFI 9], for the 2015 year, it was $45,326 [page 256 of MFI 9] and for the 2016 year, which was the last year he says he was able to work because the stress of these proceedings, was $33,768 [age 260 of MFI 9].
Suburb D
The financial contributions, as I said, were mainly to Suburb D, although the wife says she underwent emergency surgery relating to the pregnancy in 2013 and had to pay the entire $7,000 cost herself.
The evidence about the financial contributions to Suburb D was not clear-cut.
The wife’s evidence was that the parties opened two joint accounts to save for a house, and that from June 2013 to January 2014, she deposited “about $1000 each fortnight” and the husband deposited money “from time to time”. It would appear that the wife’s contributions would have been about $14,000. They saved about $37,511.20, which would include approximately $23,000 or so from the husband.
In early 2014, they signed a contract of sale and purchased Suburb D for $424,500. Suburb D was a three-bedroom dwelling. The contract provided for a 10 per cent deposit on exchange. In addition to the $37,511.20 from savings, the wife said she contributed $3,600 from her savings and she said the $14,590.50 stamp duty was paid by a $14,000 loan from her parents plus $592 from her. As with my finding concerning the Trustee’s case, and applying the same legal principles, which I will discuss, I am satisfied that the wife has failed to establish that this was a loan and I have treated the $14,000 as a gift and therefore her contribution.
The parties took out a loan from the Commonwealth Bank in the sum of $382,000 secured over the property and they opened an offset account. It appears, as best I can work out, that the wife contributed up to $32,000, including the $14,000 from her parents for stamp duty as a contribution. The husband contributed about a similar amount or possibly a little bit more.
Tenants in Suburb D
At the time of purchase, Suburb D was tenanted. The parties agreed the tenants could remain in the Suburb D property until April 2014, and significantly, the tenants were paying $400 a week, which went to cover the mortgage. There was a shortfall of approximately $100 a week on the mortgage, which was paid from the offset account by the parties.
Birth of X
X was born premature and spent nearly two weeks in the neonatal ICU at K Hospital before being transferred to ICU at L Hospital, and then was released.
The wife’s case, as indicated, was that in March 2014, the parties and X commenced cohabiting at her parents’ house at M Street, Suburb N. The wife, in respect of care, said that from birth she was the primary carer for X, and given that the parties separated from July of 2014, it seems clear that the wife, with whom X has always lived, has been the primary carer. I will come to that a bit further later.
Termites
After exchanging contracts, although it appears to be before settling, the parties received a property report identifying major termite problems, which clearly they agree made the property worth less than the contract price. Nevertheless, they completed the contract.
The husband denied that the wife had alerted him to this issue and sought, in effect, as I understand it, a negative contribution assessment for this, but it is clear from the text communications between them that he was alerted to this.
This was merely another example of his flexibility with the truth. The parties contributed equally to the unfortunate decision to complete despite non-disclosed major termite issues with the property.
Separation
The parties separated in July 2014. The husband moved into Suburb D.
It appears that he started doing work. He took a bathroom out and despite being a person who worked in the building industry, although not being a licensed builder but someone who was able to operate a business with subcontractors working on buildings, as we found out during the course of cross-examination, he did not fix the bathroom, which made it difficult to rent.
The husband then paid $2003 per month or about $460 per week towards the mortgage until May 2018 when he ceased making mortgage payments. That sum was in my view about the same as the rent being received, adjusting for inflation over the period.
This is significant as I do not accept that the husband was paying off the mortgage while he was living in the property. All he was doing was paying a sum equal to the prior rent.
I am also satisfied that the husband had the skills, given the fact that he was able to act as a contractor and have people working for him, he says, to renovate other properties, that he could have fixed the bathroom had he chosen to.
Non-financial contributions to property
In terms of non-financial contributions to property during cohabitation, both parties gave evidence of non-financial contributions to property, to which I give little weight.
The husband says that during the short relationship, they would go up on weekends to the Suburb J property, and he would help about a bit with some work. I give no weight to that in the context of the overall case.
There was also contested evidence about who did what work on Suburb D and when, to which I can give little or no weight.
There was some issue of some work on the wife’s parents’ property, for which the wife says the husband was paid and which he denies. There is no independent material, and I give this no weight as I cannot make a finding.
None of this was significant enough over the short period of the relationship to be given any weight in the assessment of contributions viewed against Suburb D.
Contributions to family welfare, homemaking and parenting during cohabitation
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.
The other contributions to some weekend work on Suburb J, and the parties’ parents’ properties, were not significant and I give them no weight.
The other very significant factor in my view is the wife has made the overwhelming contribution to the financial support of X since separation, and she has also made the larger support pursuant to X’s care and welfare.
Overall, taking a conservative approach, I assess the wife’s contributions at 65 per cent to the husband’s contributions at 35 per cent. That, though, is still subject to the adjustments pursuant to section 90SF which I will have to come to.
THE PROPERTY OF THE PARTIES
The Court is required to identify the parties’ existing legal and equitable property interests whenever acquired pursuant to the ordinary principles of common law and equity.
The husband has failed to make full and frank disclosure and I note the numerous letters requesting disclosure. I note that the husband’s only defence was to say that his solicitors knew about it and did not provide the information. That does not satisfy me.
The reality is I am not satisfied that I know the husband’s true financial position at all. Nevertheless, I have to do the best I can.
Parties Balance Sheet
The parties prepared a balance sheet dated 24 June 2021, which was at page 253 of the second respondent’s court book [MFI 5]. A further balance sheet was provided by the wife, dated 12 July 2022 [MFI 11] which appears to set out what is known in the parties’ positions. I will work from that and set out below a copy:
Ownership Description Applicant’s value Respondent’s value Second Respondent’s value ASSETS 1. J Sale proceeds of C Street, Suburb D – NAB Term Deposit account number …77 in the name of Mr P trading as B Lawyers ATF Ms Kacar and Mr Corluka CMA (balance as at 1 July 2022) $ 216,721 $ $ 2. A Bank account: Commonwealth Bank of Australia Account Number …42 (balance as at 5 July 2022) $ 1 $ NK $ NK 3. A Bank account: Commonwealth Bank of Australia Account Number …72 (balance as 5 July 2022) $ 189 $ NK $ NK 4. A Bank account: Q Bank Account Number …26 (balance as at 5 July 2022) $ 3 $ NK $ NK 5. A Bank account: Q Bank Account Number …91 (balance as at 12 July 2022) $ 1 $ NK $ NK 6. R Bank account: Westpac Banking Corporation Account Number …33 No disclosure $ NK $ NK 7. R Bank account: Westpac Banking Corporation Account Number …43 No disclosure $ NIL $ NK 8. R Bank account: Commonwealth Bank of Australia Account Number …33 No disclosure $ 63 $ NK 9. A Shares: shares held (share price as at 12 July 2022) $ 7,866 $ NK $ NK 10. A Investment: R Finance Investment Portfolio (balance as at 9 July 2022) $ 1 $ NK $ NK 11. A Motor vehicle: Motor Vehicle 1 $ E 45,000 $ NK $ NK 12. R Motor vehicle: Motor Vehicle 2 No disclosure $ NK $ NK 13. R Motor vehicle: Motor Vehicle 3 $ 2,500 $ 2,500 $ NK 14. A Property: situated in Suburb J $ NIL $ 800,000 15. A Investment property $ NIL $ $ 16. A Bank account: Commonwealth Bank of Australia account number ending …00 $ NIL $ $ 17. A Bank account: Commonwealth Bank account number …20 $ NIL $ $ 18. A Bank account: Commonwealth Bank account number …90 $ NIL $ $ 19. A Bank account: Commonwealth Bank account number …26 $ NIL $ $ 20. A Bank account: Q Bank account number ending …29 $ NIL $ NK $ 21. A Bonuses paid to applicant $ NIL $ 61,628 $ 22. J Interest accrued on monies held on deposit for sale of Suburb D property $ See item 1 $ NK $
Total $ 272,281 $ 864,191 $ 0 ADDBACKS 23. R Legal fees: paid $ NIL $ 19,300 $ 24. R Legal fees: loan from father to pay legal costs $ NIL $ 18,300 $ Total $ NIL $ 37,600 $ 0
LIABILITIES 25. J Invoice: E Pty Ltd invoice for renovations to Suburb D property $ 40,183 $ NIL $ 26. J Loan: from applicant’s parents to pay stamp duty on the purchase of the Suburb D property $ 14,000 $ NIL $ 27. J Loan: from applicant’s mother to prepare the Suburb D property for sale $ 7,606 $ 5,000 $ 28. A Personal loan: Commonwealth Bank of Australia (as at 5 July 2022) $ 14,004 $ NIL $ 29. A Personal loan: Loan from applicant’s mother - monies borrowed for counsel's fees $ 15,000 $ NIL $ 30. A Personal loan: Loan from applicant’s sister - monies borrowed for counsel's fees $ 5,000 $ NIL $ 31. A Legal fees: B Lawyers $ 41,222 $ NIL $ 32. A Legal fees: Katsikaris Family Lawyers (billed, not including WIP) $ 80,786 $ NIL $ 33. A Lease: S Company/Commonwealth Bank (payout figure as at 17 April 2022) $ 45,375 $ NIL $ 34. A Credit card: Commonwealth Bank Mastercard #...26 (balance as at 5 July 2022) $ NIL $ NIL $ 35. A Credit card: Commonwealth Bank Mastercard #...14 (as at 5 July 2022) $ NIL $ NIL $ 36. R Monies advanced by Ms F $ NIL $ NIL $ 335,000 37. A Loan: to purchase investment property $ NIL $ 420,000 $ 38. A Loan: Commonwealth Bank of Australia account number …90 $ NIL $ 20,000 $ 39. A Loan: Commonwealth Bank of Australia account number …35 $ NIL $ 40,000 $ 40. R Loan: from respondent’s father for purchase of Suburb D property $ NIL $ 16,000 $ Total $ 263,176 $ 501,000 $ 335,000
SUPERANNUATION Member Name of Fund Type of Interest Applicant’s value Respondent’s value Second Respondent’s value 41. A Superannuation Fund 1 (balance as at 12 July 2022) Accumulation $ 174,295 $ NK $ Total $ 174,295 $ NK $ 0
FINANCIAL RESOURCES Ownership Description Applicant’s value Respondent’s value 42. $ $ 43. $ $ Total $ 0 $ 0
As I have said, unfortunately, given the husband’s almost complete non-disclosure, the balance sheet is sparse, but the more recent balance sheet at least contains the wife’s disclosure rather than merely stating, as she did in the earlier balance sheet, that things should be excluded. That is a question for me and not a question for what the balance sheet is.
Assets
Working from the balance sheet to determine what should be in the Court’s balance sheet, the current residue, item 1, which is said to be $216,721, should be included, and that includes item 22, which is said to be the interest on it. The total sum currently available is as set out in the balance sheet.
The wife has disclosed nominal sums in her bank accounts totalling less than $200 at items 2 to 5. She was not challenged on those sums. She says, given they are small amounts and the husband’s non-disclosure, they should be excluded, and I agreed.
Some bank accounts of the husband were identified. There has been no proper disclosure. In those circumstances, there is no utility in including them, and items 6 to 8 should be excluded.
The wife has shares of $7,866 at item 9. They should be included in the balance sheet to identify the assets of the parties.
The wife has an investment of $1 at item 10. It is nominal and should not be included.
The wife has a motor vehicle at item 11 worth $45,000, however, there is a matching liability by way of a lease at item 33 for $45,375. In those circumstances, where the current value of the vehicle is no more than the wife owes on it, I do not think it is useful to include, and I exclude those.
The husband’s motor vehicle, item 12, was excluded by consent. The husband says his current motor vehicle is worth two and a half thousand dollars. I am not sure how realistic that is, but it is possible and I include that by consent at item 13.
The property at Suburb J at item 14 is not owned by the wife now. She transferred it back to her parents, and as we found out during the husband’s case, they have since sold it. She does not have any equitable or other interest in it. I will deal with item 14 when I consider the add‑backs.
There is an item 15, which refers to an investment property. There was no evidence that there actually is an investment property and this relates to certain allegations made by the husband. I will deal with item 15 in due course.
The wife has disclosed nil bank accounts for items 16 to 20 and I exclude those. The husband wanted to include a bonus the wife received at item 21. The bonuses were received over time and they formed part of her income. I exclude those.
Addbacks
Husband’s Legal Fees
The husband’s paid legal fees were said to be notionally added as add-backs at 23 and 24 but the wife did not press those and I do not include them.
Liabilities
E Pty Ltd
Item 25 is the liability to E Pty Ltd which should be allowed.
The background is that on 9 May 2019 a Judge made orders appointing the wife as trustee for sale of Suburb D. That was in the context of the husband’s conduct of the litigation, not paying the mortgage and refusing to move out.
The Judge also required the husband to vacate and remain away from Suburb D within 35 days. Order 2(a)(iii) read:
The trustee may incur costs for cleaning, redecorating and improvement of the presentation of the property for the purpose of sale to an amount not exceeding $5000.
She was also authorised by Order 2(a)(ix) that:
The trustee may do all other things which she deems reasonable in pursuit of the objects of the trust, namely in compliance with order 1 herein.
By order 3, she was granted liberty to restore on 24 hours notice to seek further orders.
Despite the limit to $5,000, the wife spent $40,183 to make Suburb D saleable by retaining E Pty Ltd. The husband’s evidence was that the property required about $160,000 to be spent on it to fix it.
Given both parties’ evidence about the property, and in particular the bathroom, I have absolutely no doubt that the work was required, but nevertheless, on its face, this was contrary to the Court’s orders.
The wife submitted that the power to do all things reasonable meant that she had the power to spend that money without breaching the Court’s orders. I do not accept that. Where there was a specific sum placed on it, the general power did not override the specific.
Nevertheless, the wife says that the sale price reflects the work they undertook, and that absent any work having been undertaken, they would have received a lower sale price, and further, she says that it is likely that the sum expended was fully recovered plus an additional sum.
Although the wife’s conduct of the proceedings might be seen as a reasonable response to the husband’s conduct by some, given his conduct was to do whatever he wanted to, it cannot be approved.
Nevertheless, the real question is whether it is likely that, though she breached the Court’s orders, the sum expended was likely to have been entirely recouped and/or exceeded in the sale price.
On balance, given that the wife had no ulterior motive than to achieve the maximum residue, I am satisfied that this sum was probably recouped or exceeded, and further, taking into account the evidence of the husband’s conduct of the proceedings in relation to delays and non‑disclosure and attempts to frustrate the sale process of Suburb D, which resulted in orders for the wife to be the sole trustee for sale and his ejection from the property, on balance, there is no basis on which I should reduce or negatively adjust the wife’s contributions in relation to this conduct, which, as I said, must still be condemned as a breach of the Court’s orders.
The wife says this debt should be paid directly from residue. I agree and will make that order. Item 25, therefore, is on the balance sheet.
Wife Loans and liabilities
The wife sets out a series of loans at items 26 to 30. In respect of item 26, an alleged loan of $14,000 for stamp duty, and item 27, a loan from her mother of $7,606 to repair Suburb D, I am not satisfied that these are established as loans. In forming that view, I have concerns about the wife’s mother’s credibility, which I will come to when I deal with the issue of what happened with Suburb J as an add-back. As I have said elsewhere, I treat the stamp duty as a contribution to Suburb D.
I do not have sufficient evidence of item 27 to make any finding about it. I do not include items 26 or 27 on the balance sheet. The wife did not press item 28. The wife says she has legal fees owing of, at item 31, $41,222 to her former solicitors, who hold the residue and $80,786 owing to her current solicitors. The wife is required to bear her own legal costs. Taking into account all of the other matters relevant to the proceedings, while I accept these liabilities exist, I will not include them on the balance sheet. It will make no difference.
The wife, as I have said, has a liability under item 33 of $45,375 for her vehicle which is worth $45,000 at item 11. I do not include either of those.
In terms of the husband’s alleged liabilities, items 34 and 35 are credit card debts. They are said to be nil. They are not included. Item 36 is the alleged debt owed to Ms F, which I will come back to.
Husband’s Alleged Matters
Items 37 to 39 are items that reflect the husband’s allegation that the wife borrowed money to buy an investment property in his name, which investment property cannot be identified, and in respect of which hundreds of thousands of dollars were said to be lent to the wife, who otherwise had no assets and minimal income, with no mortgage being granted over any property. It is frankly difficult to understand the husband’s case on this topic, but this alleged fraud has not been proven. I do not include these as liabilities owed by the wife, effectively to the husband.
Finally, the husband also seeks to include at item 14 a loan from his father for $16,000 for the purchase of Suburb D. His father did not give evidence although it was anticipated that he would. He was not available for cross-examination. I place no weight upon anything the husband says, and I find that debt is not proved, applying the similar legal principles I will come to when I consider Ms F.
Superannuation
The wife has superannuation of $174,295 at item 41. I include that. I note that the husband has disclosed nothing about superannuation, consistent with his general approach. He may have superannuation or he may not. I do not know.
The wife says that given the short duration of the relationship and the nominal portion of this that would have been earned during the relationship, this should be excluded. I will include it on the balance sheet, but ultimately that will make little difference since I intend to take an approach which deals only with adjusting the residue, largely for the reasons the wife has proposed.
Suburb J Property
I now come back to the question of the property at Suburb J, which should be on the balance sheet as an add-back, although again it may not make much difference. As I have said, the way the wife dealt with her interest in Suburb J post-separation was a substantial issue at trial. The wife said that she had a one-third interest in the property at T Street, Suburb J, which I have been referring to as the Suburb J property. Her parents sold the remaining two-thirds interest. That was her only substantial asset.
She had Motor Vehicle 4, some superannuation, and some savings. The property at Suburb J was purchased by her parents in 2003 for approximately $170,000. She made no contribution towards that, and she has made no contribution to mortgage repayments. She said that she gave her parents $800 towards the purchase of Suburb J. The wife transferred her interest back to her parents during the course of these proceedings.
The wife’s oral evidence, which was reasonably candid on this point, was that she gave her one third interest in Suburb J back to her parents because of these proceedings and the risk of the husband, who has been effectively, she says, conducting the proceedings dishonestly, which I accept, managing to hide his assets and then have access to hers.
Whilst I understand her concerns, and conduct, nevertheless, it was not appropriate. Unfortunately, the wife’s mother sought to defend what had happened and I did not think the wife’s mother’s evidence on the topic was particularly credible, so I give her other evidence little weight.
The wife relied upon the affidavit sworn 13 August 2021 and the report of the single expert Mr U of V Valuers giving a market value as at July 2021 of $250,000.
During the hearing, the husband produced an internet search suggesting that Suburb J had been sold for over $550,000. In response, the wife’s legal representatives, who had called the wife’s mother in the case, sought instructions and advised that Suburb J had in fact been sold. A contract for sale showed that Suburb J was sold to third parties in early 2022 for $520,000.
The wife did not disclose this, and nor did her mother, who gave evidence about Suburb J, disclose this during her cross-examination, and both of them were cross-examined about Suburb J.
The husband relied upon this non-disclosure as going to the wife’s credit, particularly where she positively relied upon a valuation of $250,000 which was put before the Court and which he suggested was there to intentionally mislead the Court as to the true position, given that it seems likely the wife was aware that her parents, with whom she lives, had sold Suburb J for that sum prior to trial.
This does raise real questions for me about the credibility of the wife and her evidence. It seems to me that the wife has taken the approach that if the husband was going to act in a certain way, maybe she should too should act in a fashion which was not appropriate. This makes my decision more complicated, but nevertheless I am satisfied, based upon the objectively reliable material I have, that the decision I have come to is appropriate despite this. Still, again, this conduct of the wife cannot go without criticism.
But for the wife’s transfer of the property back to her parents for no consideration, the gifts she had received would have been worth $173,333, subject to any capital gains tax she may have been liable for.
The husband sought that this be taken into account, and I think the wife’s interest having been disposed of to avoid its inclusion in the balance sheet should in fact be added to the balance sheet as a notional add-back pursuant to the principles discussed, for example, in Trevi v Trevi [2018] FamCAFC 173. However, for reasons given elsewhere, this will still not ultimately affect the result of this case.
Ms F
We then come to one of the most significant and difficult issues in the proceedings, which was whether or not the moneys advanced by Ms F to the husband were a loan or gifts, and whether, if a loan, some of the moneys paid towards the mortgage should be recoverable as a loan from the residue.
Item 36 on the balance sheet is $335,000 – “Monies advanced by [Ms F]”.
As I have said, the Trustee says it is a loan related to the payment of the mortgage on Suburb D, and to the extent it was used for repayment of the mortgage, which they estimated at $82,400, that it was repayable from the residue. On the balance sheet, both the husband and the wife say it was nil, as it was a gift, not a loan. The wife also says that if it is a loan, it was not used to repay the mortgage, and there is no nexus between the loan and the residue, and that even if the husband is liable for it, it should not come out of the residue.
The husband denied at trial it was a loan, and said Ms F, as his stepmother, treated him as if her own son. It is convenient, to understand the case, to first consider the husband’s evidence and statements on this topic over time, and his evidence before me at trial, to put some context around Ms F’s evidence and case.
Husband’s Affidavit of 13 December 2018
The husband did not read this affidavit in his case, but Ms F relied upon the husband’s affidavit filed 13 December 2018. That was filed on the same day as Ms F’s affidavit.
Given the significance of the issue and the concise nature of the husband’s affidavit, which has 11 paragraphs, I think it is appropriate to read paragraphs [2] to [11]:
Financial Contributions
2. From […] December 2014 until […] July 2016, I borrowed from my stepmother, [Ms F], several amounts of money by way of loans. on the condition that I would repay these loans once the [Suburb D] property is sold.
3. The details of these loaned amounts are outlined as follows in the following paragraphs.
4. [In] December 2014, I received a loan of $45,000.00 by way of a bank cheque from [Q Bank] from [Ms F], which was deposited [in] December 2014 into a-Westpac Bank Account held in my 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 "[MM-1]"
5. [In] August 20151 received a loan of $70,000.00 from [Ms F] by way of a [Q Bank] bank cheque in favour of myself which was deposited [in] August 2015 into [a W Bank] account held in my 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 "[MM-2]".
6. [In] September 2015 I received a loan of $100,000.00 from [Ms F] by way of a [Q Bank] bank cheque in favour of myself which was deposited [in] September 2015 into [a W Bank] account held in my 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 "[MM-3]".
7 [In] October 2015 I received a loan of $40,000.00 from [Ms F] by way of a [Q Bank] bank cheque in favour of myself which was deposited [in] October 2015 into [a W Bank] account held in my 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 "[MM-4]".
8. [One week later] I received a loan of $40,000.00 from [Ms F] by way of a [Q Bank] bank cheque in favour of myself which was deposited [in] October 2015 into [a W Bank] account held in my 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 "[MM-5]".
9. [In] July 2016 I received a loan of $40,000.00 from [Ms F] by way of a [Q Bank] bank cheque in favour of myself 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 "[MM-6]".
10 In total I have loaned [Mr Corluka] an amount of $335,000.00 from the bank cheques I have described above.
11 The owed sum of $335,000.00 was agreed between [Ms F] and I to be returned in full from the proceeds acquired from the sale of the [property at C Street, Suburb D].
The payment and receipt of these sums between Ms F and the husband is not in dispute.
Husband’s Affidavit of 20 March 2020
On 27 March 2020, the husband filed another affidavit. This is the affidavit the husband did not read, but tendered the annexures. This was an affidavit which, through Mr Agamalis, the Trustee relied upon.
Again, given the significance and complexity of the issue, I think it is appropriate to read onto the portions of the affidavit which go to what the husband was saying about this transaction. His affidavit again was included in MFI 5, the Trustee’s material, starting at page 111 and from [89] –[95]:
Assistance from [Ms F]
…
89. From approximately […] December 2014 until July 2016, I borrowed several amounts of money from my Father's partner [Ms F].
90. I lived with [Ms F], my father and her daughter [Ms Y] in [Suburb Z]. I assisted her with her renovations in her property.
91. [Ms F] offered to assist me. She said to me words to the effect, "look [Mr Corluka], I can help you financially to meet your home loan obligations. "I had no choice but to accept her assistance after [Ms Kacar] stopped making any contribution to mortgage payments from November 2014.
92. [Ms F] provided these funds on the condition that she would be repaid when the [Suburb D] property was sold. [Ms F] was not repaid. She is still owed money.
93. I used funds from [Ms F] for the mortgage payments since December 2014 and when I had no income from 2016 to 2018.
94. I also used the funds to support myself and my daughter. I was paying for her school fees and other expenses. I can provide receipts at the hearing. In particular, I paid the following:
(a) $2,909 for her tutoring;
(b) $400 for a phone.
95. The money was also used for water and electricity rates as well as other outgoings
At [96] to [103], he dealt with proof of payments in similar terms to the way he dealt with it before. He referred at [104] of his affidavit to the fact that Ms F had a medical episode and that in this affidavit the husband sought to rely upon Ms F’s affidavit of 13 December 2018, which stated that the monies were a loan, and not a gift.
The husband said at [105] to [106] that following separation, he lived with his father and Ms F at their home, and he had received monies from Ms F for doing work on her property at Suburb Z. Those together were the monies he was cross-examined on. He received substantial sums from Ms F for work on a property she owned. Those sums significantly exceeded the amount he declared as income, but he said he was working through an ABN and had to pay other people. This was part of the non-disclosure issue.
One of the issues at trial was whether or not in fact these monies were being paid to him for work he was doing on her property, and part of his income, that he was not declaring. The reality is it is impossible to know whether there is any substance to that suggestion or not, and I cannot give it weight against the question of the loan in respect of Ms F when assessing her case.
I will note that although I make credit findings against the husband, I am not in a position to and do not make any credit findings against Ms F, nor do I hold the credit findings against the husband against Ms F.
April – June 2020 hearings
The husband’s evidence and case at April 2020 time was that Ms F had loaned him $335,000 and that he had to repay this when Suburb D was sold.
On 7 April 2020, there was a defended hearing, and on 7 April, orders were made for final consent parenting orders. The husband was noted in those orders as having represented himself, the Trustee was not represented, and the Court on that date at order 4:
4.The Final Property Proceedings are adjourned to allow sufficient time for the NSW Trustee and Guardian who was appointed to act on behalf of [Ms F] as a result of Orders made by NCAT [in early] 2020 as to [Ms F’s] potential claim against the proceeds of sale of a property situated at and known as [C Street, Suburb D].
The matter was stood over to 2 June 2020.
In cross-examination, the husband denied that he had advised the Court of the debt and caused this order to be made, although, of course, that was the effect of his then sworn evidence and the sworn evidence which he sought to rely upon from Ms F’s affidavit.
On 2 June 2020, the matter was before the Court. The husband was legally represented, and orders were made joining the Trustee.
Husband’s Affidavit of 22 June 2021
We then come to the husband’s affidavit of 22 June 2021, where he changes his position on whether or not this a gift or a loan. He says at [82] to [96] (Page 81 of MFI 3):
Assistance from [Ms F]
82. From approximately […] December 2014 until July 2016 I was given several amounts of money from my father's partner [Ms F].
83. I lived with [Ms F], my father and her daughter [Ms Y] in [Suburb Z]. I assisted her with her renovations in her property.
84. [Ms F] offered to assist me. She said to me words to the effect: "Look [Mr Corluka], I can help you financially to meet your home loan obligations." I had no choice but to accept her assistance after [Ms Kacar] stopped making any contribution to the mortgage payments from November 2014.
85. My stepmother [Ms F] loaned me the money in the beginning but being part of the family all these years and seeing what was going on with my court proceedings she felt sorry and said in or about February or March 2019 words to the effect: "[Mr Corluka] you don’t have to pay me back it is gift to you.” I did say that to [Ms BB] from [BB Lawyers] and she made a note of that but never put it in my affidavit. If my stepmother had not gotten sick, I would have gotten the money back that [Ms F] gifted me after these proceedings were over, so the end result would be the same as gift.
86. I used funds from [Ms F] for the mortgage payments since December 2014 and when I had no income from 2016 to 2018.
87. I also used the funds to support myself and my daughter. I was paying for her school fees and other expenses. I can provide receipts if requested. In particular, I paid the following:
(a) $2,909.00 for her tutoring; and
(b) $400.00 for a phone.
88. The money was also used for water and electricity rates as well as other outgoings.
89. [In] December 2014 I received $45,000.00 from [Ms F] by way of a bank cheque from [Q Bank]. The funds were deposited [in] December 2014 into a Westpac account held in my name. Exhibited and marked with the Letter "T" is a true copy of the cheque and details of the transaction as recorded by Westpac Banking Corporation.
90. [In] August 2015 I received a gift of $70,000.00 from [Ms F] by way of a bank cheque. The cheque was deposited [in] August 2015 into [a W Bank] account held in my name. Exhibited and marked with the Letter "U" is a true copy of the cheque and details of the transaction as recorded by [W Bank].
91. [In] September 2015 I received a gift of $100,000.00 from [Ms F] by way of a bank cheque. The cheque was deposited [in] September 2015 into my [W Bank] account. Exhibited and marked with the Letter "V" is a true copy of the cheque and details of the transaction as recorded by [W Bank].
92. [In] October 2015 I received a gift of $40,000.00 from [Ms F] by way of bank cheque. The cheque was deposited [in] October 2015 into my [W Bank] account. Exhibited and marked with the Letter "W" is a true copy of the cheque and details of the transaction as recorded by [W Bank].
93. [One week later] I received a gift of $40,000.00 from [Ms F] by way of bank cheque. The cheque was deposited [in] October 2015 into my [W Bank] account. Exhibited and marked with the Letter "X" is a true copy of the cheque and details of the transaction as recorded by [W Bank].
94. In January 2016 $20,505.15 was taken by the Child Support Agency from the money gave to me by [Ms F]. Exhibited and marked with the Letter "Y" is a true copy of the Notice to Pay dated 8 January 2016. ~
95. [In] July 2016 I received a gift of $40,000.00 from [Ms F] by way of bank cheque. The cheque was deposited [in] July 2016 into my [W Bank] account. Exhibited and marked with the Letter "Z" is a true copy of the cheque and details of the transaction as recorded by [W Bank].
96. In total I have received an amount of $335,000.00 from [Ms F]. Exhibited and marked with the Letter "AA" is a true copy of the Statutory Declaration by [Ms F] dated 7 September 2016.
At [85], he relies upon his solicitor failing to put into his 2020 affidavit the fact that in February or March 2019, Ms F had excused or forgiven the loan and turned it into a gift. In cross‑examination, the husband sought to explain these inconsistencies by stating in summary that these monies were always a gift and he had merely sworn affidavits to make sure Ms F would get all of the residue and to make sure the wife would get none, and on that basis, Ms F would then give him the money as a gift.
The husband seemed entirely untroubled by the implications of his evidence and as Counsel for the Trustee noted, it was what it was. As I have said, I give no weight to this in impugning Ms F’s credibility.
I note that the husband sought to blame his solicitors in his oral evidence, as he did here, for non-disclosure and failing to pass information on. There is no suggestion the solicitors were not available as witnesses. In the context of all of his evidence, I give no weight to what the husband says criticising his solicitors.
As I said, the husband seemed entirely untroubled by the implications of his evidence. Even absent this evidence by the husband concerning the loan, both his changing evidence over time, and his oral evidence that it was really just a conspiracy with Ms F to lie on oath and make sure he got all the money, I had formed the view that the husband’s evidence should be treated with great caution, noting his failure to make full and frank disclosure and the fact that his excuse for that was that three different solicitors at least had just failed to pass on all the information he had provided, and also the disparity between the sums he was being paid as a contractor and his declared income, and his later concession in the oral evidence about gambling in respect of $700,000.
This evidence about the loan and taken with all the rest of it, means that I am not satisfied that I can place any reliance upon any of the husband’s evidence where it is not supported by other evidence. I have treated the husband’s evidence in this matter in this way.
I will deal with Ms F’s evidence in a moment, but I note, in submissions, Counsel for the Trustee sought to rely upon the husband’s evidence prior to his trial affidavit and also his conduct in front of the Court joining the Trustee as evidence he could rely on as supporting Ms F’s case. It was suggested that the husband’s change of evidence after Ms F’s medical episode did not affect the reliability of his evidence prior to that. I reject that submission.
The husband’s evidence is potentially consistent with both options. It may be that there was never a debt and it was a gift. It may be, as he now says, that he and Ms F were colluding to deceive the Court by alleging a debt which did not exist so that she could receive the money and then re-gift him the money. However, it may also be that there was a debt which Ms F sought to recover, but that the husband thinks that because Ms F is not in a position to give oral evidence he may be able to successfully, but falsely, deny it and so retain some of the money.
Where the husband has shown himself to be entirely unreliable, the evidence he gave which supported Ms F’s claim cannot be used to bolster her claim, any more than the evidence which he gave against it can be used to disprove it.
As I have said a number of times, but I think it is very important to keep saying, the evidence that the husband is untruthful is not evidence that Ms F was not telling the truth in her affidavit.
I must therefore assess the likelihood that there was a loan made by Ms F as an independent party and based upon such evidence as there is from her, and in documents, but excluding the husband’s evidence either in support of or against Ms F’s claim.
Section 128 Certificate
The husband not being represented, Counsel for the Trustee raised, after this evidence, raised the issue of whether or not a certificate pursuant to section 128 of the Evidence Act 1995 (Cth) could or should be given on the basis that the husband was being cross-examined about inconsistent affidavit evidence. He was not represented and he was not warned.
Having considered the matter, I consider in hindsight that I should have warned the husband, and I would have had I anticipated his response. Given he was being cross-examined on these inconsistencies and was unrepresented, I should have warned him.
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 Contributions
6. 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].
Before I come back to the terms of that affidavit, there was another sworn statutory declaration from Ms F, which the husband included in his Annexures at page 195 of MFI 9.
On 7 September 2016, Ms F swore a statutory declaration in which she said:
I have given a loan to [Mr Corluka] from [C Street, Suburb D], of $340,000 to pay off his mortgage. The loan was given in different amount[s] from December 2014 to July 2016.
Significantly, it appears that this statutory declaration was given by Ms F, not in relation to these proceedings but in relation to issues between the husband and his former wife around substantial arrears in child support. There are differences in these sworn declarations which I think are important. Before I come to them I will briefly set out the law.
The legal principles around debt were not in contest. I was referred to a number of authorities, but I was referred to a very useful summary by the Deputy Chief Justice in Roy & Yalden [2020] FamCA 1026 at [121]-[129]:
121. The burden of proving that those monies were advanced as a loan falls to those asserting that it was a loan: see Heydon v The Perpetual Executors Trustees and Agency Co WA Limited (1930) 45 CLR 111 at 113. This is to be determined by objective evidence not subjective perception. In Chaudhary v Chaudhary [2017] NSWCA 222 (“Chaudhary”) at [100], the New South Wales Court of Appeal said:
The question of whether or not the advances … are to be properly characterised as loans or gifts … is not to be determined by reference to any uncommunicated subjective state of mind about which inferences may or may not be drawn. The characterisation of the advance must depend upon the objective evidence as to what was said by [the lender/s] to [the recipient/s] and what [the lender/s] did, including, for example by way of documentation
(Emphasis added)
122. In Grefeld & Grefeld [2010] FamCA 504 at [95], Barry J described the usual characteristics of a loan as including:
•The real lender to know about the borrowing.
•Some definition of the period of the loan. Is it to be for five, ten or one hundred years, or when the borrower chooses to repay it?
•Some definition of the interest payable with evidence supporting such agreement by regular deposits to bank accounts.
•Some form of documentation to validate or authenticate a loan for such a significant sum of money.
123. However, the absence of one or more of those characteristics is not necessarily determinative of the issue.
124. It is frequently the case that financial arrangements between family members, including between parents and their children, are not expressed in formal terms: see Sackville AJA in Chaudhary (supra) at [7] and [8].
125. Nevertheless, even in those circumstances where there are, commonly, less formal arrangements between parents and their children and also between siblings, those seeking to assert that the monetary advance was a loan must adduce sufficient evidence to satisfy the Court of an intention to create a legally enforceable relationship. In that respect, in Strand & Strand (No. 2) [2018] FamCAFC 247 at [24], the Full Court said:
The characterisation of a particular advance of monies depends on whether the circumstances known to both parties to the transaction at the time demonstrate, objectively, that the payment was made by way of loan. If, for example, the money was paid upon the express condition that it should be repaid then, notwithstanding any absence of formal documentation, and regardless of the motivation for the payment, a contract of loan will exist: Berghan v Berghan (2017) 57 Fam LR 104.
(Emphasis added)
126. In terms of the Full Court’s reference to the “circumstances” of the case, in South Australia v Commonwealth (1962) 108 CLR 130 at 154, Windeyer J said:
The circumstances may show that they did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts. The status of the parties, their relationship to one another, the topics with which the agreement deals, the extent to which it is expressed to be finally definitive of their concurrence, the way in which it came into existence, these, or any one or more of them taken in the circumstances, may put the matter outside the realm of contract law.
(Emphasis added)
127. Applying that principle in the area of contract law, in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 at 105, the High Court stated:
“It is of the essence of contract, regarded as a class of obligations, that there is a voluntary assumption of a legally enforceable duty.” To be a legally enforceable duty there must, of course, be identifiable parties to the arrangement, the terms of the arrangement must be certain, and, unless recorded as a deed, there must generally be real consideration for the agreement. Yet “[t]he circumstances may show that [the parties] did not intend, or cannot be regarded as having intended, to subject their agreement to the adjudication of the courts.”
(Emphasis added)
128. In the context of family relationships, in Ashton v Pratt(No 2) [2012] NSWSC 3 (“Ashton v Pratt (No 2)”) at [29], Brereton J said:
In the absence of express statement that their arrangements were or were not intended to be legally binding, intention to create legal relations is an inference of fact, determined objectively; accordingly, Ms Ashton’s subjective intentions in that respect are not relevant [Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, 105-7, [24]-[28]; Darmanin v Cowan [2010] NSWSC 1118, [204]-[215]].
(Emphasis added)
129. In determining whether such an inference should be drawn, context is relevant. In that respect, in Ashton v Pratt(No 2) (supra) at [30], Brereton J further said:
Family, social, and domestic arrangements do not normally give rise to binding contracts, because the parties lack the necessary intention [Teen Ranch Pty Ltd v Brown (1995) 87 IR 308, 310 (Handley JA, referring to Balfour v Balfour [1919] 2 KB 571)].
(Emphasis added)
I also note the other authorities referred to be the Trustee.
In summary, the Trustee, and Ms F, who alleges the debt, bears the evidentiary and legal onus to prove there is a debt, and the terms of the arrangement must be reasonably certain.
Generally, there must be a real consideration for the agreement, which does not appear to exist here, and whilst Ms F is not the husband’s mother, so the presumptions that apply to parents do not apply, she describes herself as a stepmother. I note the Act deals with stepmothers in respect of some other matters. It is the nature of the social relationship that is relevant as a surrounding factor to determine intent, which is why there is a presumption about parents and advancement.
I must apply those principles to the determination of whether or not there is a debt, taking into account Ms F’s statements in her statutory declaration and in her affidavit.
The other issue that was raised, since the Trustee seeks access to the small net residual matrimonial funds in the residue, is whether the funds were loaned to the husband and used for the purpose of repaying the mortgage, to identify the kind of nexus identified in Martin & Martin 54 FAM LR 548, which I have referred to previously.
I have found this question troubling. As I have indicated, I have thought carefully about the fact that Ms F should not suffer from my credit findings against the husband, but she cannot rely upon the husband’s evidence to support her case, given that that evidence is explicable, potentially, as the husband conspiring with Ms F to make sure he gets all the money.
I must look only to Ms F’s statutory declaration and affidavit and such objective surrounding material as there is to see whether or not Ms F has met the onus of establishing a debt.
As I have said, her evidence was admitted without her being available for cross-examination given her health status, but that necessarily must be taken into account in assessing the weight to be given. I must be satisfied on the balance of probabilities firstly that there was a loan agreement, as Ms F says, guided and indeed bound by the authorities named above, as identified.
There were a number of issues of concern. Ms F’s evidence, both in her statutory declaration and in her affidavit, is sparse at best. It is not clear what the consideration was to be that would make it a contract. There was no deed to avoid the need for other consideration.
Troublingly, there are on the face of the two sworn statements made by Ms F at different times and for different purposes what I consider to be some important differences, in particular the stated purpose of the loan.
In the 2016 statutory declaration, Ms F says the purpose of the loan was to “pay off his mortagage”:
I have given a loan to [Mr Corluka] from [C Street, Suburb D] of $340,000 to pay off his mortgage. The loan was given in different amount from December 2014 to July 2016.
I place emphasis on the word “off” the mortgage.
In the 2018 affidavit, no mention was made of payment of the mortgage, and she refers instead to:
…loans with the expectation that [Mr Corluka] would return it was the property was renovated and sold.
I then look to the context. The husband said that in about 2015 and 2016 he was seeking to settle the matter on terms which I did not admit, as negotiations are not admissible, but he indicated he had to buy Suburb D and that would be consistent with seeking a loan from Ms F to pay off the mortgage. Of course, the mortgage was never paid off and indeed, the sums of money from Ms F were not paid in a single lump sum, which one might think would occur if the mortgage was to be paid off to facilitate a settlement.
The husband also gave evidence, as I have said, that the cost of entirely repairing Suburb D would be, as in his trial affidavit at [79] about $160,000, but the money was neither used to pay off the mortgage nor was it used to renovate and sell Suburb D.
On any analysis, these are different stated purposes for the loans. It raises a concern, in particular in respect of what was said in 2018, that Ms F has referred to what may have been a change in purpose in 2018, but that cannot affect the terms of the original loan.
I also note that the 2016 statutory declaration makes no reference to sale or repayment, although she does say it was a loan, but in terms of what she said the purpose was in 2016. If the purpose was to pay off the mortgage that implies the husband would be able to live there so there might not be a repayment date because he might continue living in the property.
Even without all the other matters, there is a real concern in my view, even accepting every other word of what is said in the 2018 affidavit, that there is just insufficient, without reference to consideration or other terms, to establish the loan.
On balance, while I make no adverse credit finding against Ms F and no criticism of the Trustee, who has had to run a case based upon what was available and the documents, having carefully considered the matter, the evidence which has been able to be led in Ms F’s case by the Trustee is in my view just not sufficient to satisfy me, having regard to the relevant principles that I must apply, that the Trustee on behalf of Ms F has met the burden of proof for establishing that the moneys transferred to the husband from Ms F were loans rather than gifts from his stepmother.
Although perhaps not strictly necessary, I will also note that I was not, on balance, persuaded that the monies transferred were relevantly used to pay the mortgage in such a way as to have a sufficiently relevant nexus to the matrimonial property that would justify Ms F being paid out of the residue, and that is because during the period from 2014 to mid-2016 the husband was working.
It is not clear that to the extent he paid the mortgage that he used the moneys from Ms F, and further, across the entire period, he was basically paying a sum of about $460 per week, which was about equivalent to rent.
Even if I had found that it was a loan, I am not satisfied that it necessarily would have had a sufficient nexus to justify the orders sought by the Trustee.
I make those findings having great sympathy for the difficult position Ms F is in, but I cannot know what she might have said and how she might have been able to assist the Court if she was present, and I can only adjudicate the matter based upon the evidence I have.
I do not include this item as a loan. I find there is no loan as the loan is not proved.
Court Balance Sheet
The balance sheet therefore, includes those matters which I have identified earlier and is:
Ownership Description Value ASSETS 1 J Sale proceeds of C Street, Suburb D – NAB Term Deposit account number …77 in the name of Mr P trading as B Lawyers ATF Ms Kacar and Mr Corluka CMA (balance as at 1 July 2022) $ 216,721 9 A Shares: shares held (share price as at 12 July 2022) $ 7,866 13 R Motor vehicle: Motor Vehicle 3 $ 2,500 Total $ 227,087 ADD BACKS
24A A Property situated at Suburb J $173,333 Total $173,333 LIABILITIES
25 J Invoice: E Pty Ltd invoice for renovations to Suburb D property $ 40,183 Total $ 40,183
SUPERANNUATION Member Name of Fund Type of Interest 41. A Superannuation Fund 1 (balance as at 12 July 2022) Accumulation $ 174,295 Total $ 174,295
Ultimately, in my view, given the husband’s conduct and the short nature of the relationship, the only asset which I need to consider in terms of the adjustment as between the parties is the residue and the liability to E Pty Ltd.
SECTION 90SF MATTERS
I come now to the section 90SF matters.
There is no relevant effect of any proposed order upon the earning capacity of either party. There is no other relevant effect of any other order. There is no issue not already dealt with elsewhere concerning eligibility for a relevant pension, allowance or benefit under a superannuation scheme or fund, nor as to each party maintaining a reasonable standard of living, noting that both parties’ standards of living are reasonably similar. Nor are there issues with the financial circumstances of any person cohabiting with a party, or the terms of any order or proposed order under Part VIIIAB, including a binding financial agreement.
The parties’ property is dealt with above. Each party appears to have some support from their parents, and no submissions were made that this was a relevant factor either way.
In terms of age and state of health, income, financial resources, physical or mental capacity for appropriate gainful employment, the wife says at [5] of her first trial affidavit that she is employed as a coordinator at CC Company, earning approximately $65,600 gross per annum plus bonuses. She is in good health.
The husband says he is not fit for work and has not been fit for work since mid-2016. He says that he was only earning the sums that he set out, which I have indicated previously, in his income tax returns.
There is a real issue about what the husband’s earnings were. He was cross-examined on his bank account [part of MFI 2], which included a bank account statement from Westpac from October 2015 to January 2016 which he said was his ABN bank account. There is a deposit from December 2015. The reference is “[Ms F] buildin [DD Street]” for the amount of $50,000.
In that financial year, he declared less than that, as noted above. He says, indeed, that much of this went to subcontractors. We know nothing about the subcontractors. It raises real suspicions in the context of non-disclosure about what the husband’s real income has been, certainly at the least in the period where it is clear he was working. That is also relevant to his credibility and non-disclosure.
The husband says at [177] of his trial affidavit that he is currently unable to work because he has been diagnosed with depression and anxiety. He says he has attended a couple of mental health practitioners since being diagnosed. He says he is reliant on Centrelink benefits, taking medication and attending upon a counsellor, diagnosed as unable to work, and has not been able to find employment due to his depression.
The difficulty is, of course, that the husband goes on, at [138] that he is unable to work because of his mental health, but given the credibility findings I make concerning him, I can give no weight to what he says about his subjective mental health and capacity to work.
He did provide one medical certificate. It is a one-page Centrelink certificate at page 232 of MFI 9. It is from a GP. It diagnoses:
Depression. Anxiety and Adjustment Disorder, Not improving.
It refers to ongoing counselling and medication having been provided but it also says the condition is temporary with a prognosis of three to 12 months. That was stated in early 2019, three years ago. According to that medical certificate, the only thing we have, the husband should have been back at work two years ago.
There is no proper medical evidence in support of the husband’s claimed incapacity. Of course, one of the complex issues with psychological injury or incapacity such as this is the fact that it is fundamentally based on self-report, and you have a real difficulty if the person who is making the self-report is found to be a person of no credibility.
Given my findings that the husband is a witness of no credit, I can give no weight to his subjective statements that he has not been able to work since 2016. I cannot say whether or not he has in fact been working since mid-2016, given his lack of disclosure, but I certainly make no allowance for his future needs on this basis.
I find that both parties have the physical and mental capacity for appropriate gainful employment. I find that the wife has stated her earning capacity, represented by her long-term employment. I make no other allowance for the husband’s earning capacity having been diminished.
That then moves on to the next question of child support, obligation to a child of the marriage, the care and control of a minor child of the marriage, commitments necessary to support self and a child or other person there is a duty to maintain and support, and the need to protect the consideration of the parenting role.
X was born in February 2014. He is presently eight, in year 3 at EE School. He is progressing well. Because the father says he has been unable to work for much of X’s life, his liability for child support was $7.29 per month. Since February this year has been reduced to $5 per month, which as I have noted, is about $60 a year or approximately 17 cents a day. In any event, the father currently has a child support debt of $679.42, which is to say 11 years’ worth of child support at the current rate.
Given the father’s history, both in respect of what he said about work and gambling, which I will come to in a moment, it is in my view extremely unlikely on the evidence before me that his contributions to the financial support of X are likely to change. The wife is therefore going to be effectively solely responsible for X’s financial care and support until he is 18. I give significant weight to this as a factor requiring a considerable adjustment in the wife’s favour.
In my view, noting that after the third party E Pty Ltd is paid, there will be about only $175,000, and that I accept that the wife has debts which she has incurred in this litigation of about $125,000 or $126,000, and that I also accept that it appears clear that the husband’s conduct of the litigation, which has been designed to delay and obfuscate, has contributed to that, even granting the wife the entirety of the net residue will only leave her with a relatively small sum. At least that will be something to contribute towards X’s needs.
I am satisfied the husband has failed to make full and frank disclosure. There is evidence of repeated requests. As I have said, the husband’s only response was that his multiple solicitors have failed to pass the material on. He also said, “Well, they have managed to subpoena a whole lot of my bank accounts so that is good enough.” Who knows whether they got all the bank accounts – he certainly did not provide all the material about the work he was doing through an ABN. This is a classic case to which Black & Kellner [1992] 15 FLR 343 and Weir & Weir [1992] 16 FLR 154 apply. To allow the husband anything in this case from the residue, or to take into account more than the residue would, in my view, assist the husband in perpetrating a fraud upon the Court and upon the wife. This is also why only the residue should be considered.
I note there is an argument about waste, which also may explain what happened to Ms F’s $335,000. It also goes to the husband’s failure to make substantial contributions or contributions to the child’s financial needs. The wife provided evidence that the husband had spent $731,278.12 in cash during the period of early 2014 to 2016. The wife subpoenaed the husband’s known bank accounts, prepared schedules and provided section 50 schedules.
The husband was advised before the trial that he could challenge those schedules if he wished.
His position at trial was that he had not looked at them, but ultimately, he did not contest their admissibility. Ultimately, he did not contest that it was likely that much of that $730,000 odd dollars, which was taken from ATM machines in cash largely at clubs and pubs, was probably spent on gambling. He did say that the court should take into account his wins, and indeed, it may be that the underlying sum which he originally had and spent is overstated by churn of some winnings coming back to him and then being gambled again, as so often happens. I note that for the purposes of this analysis only, it is appropriate to accept the husband’s own case he does not have any money. The fact that on his case he has no money suggests that what money he had and the winnings he received was all gambled away.
Again, given that the wife has had the financial support of X and will continue to have the financial support of X, this factor strongly supports the wife’s claim for an approach that the adjustment should entirely favour her, be limited to the residue, and requires the entire residue to go to her.
THE APPROACH
I note that the wife also said, noting Norbis & Norbis [1986] 161 CLR 513 and McMahon & McMahon [1995] 19 Fam LR 99, that this was a case where there should be an asset-by-asset approach to achieve a just result; noting the short duration of the relationship, the fact they only acquired a single asset, the fact that the husband has made no disclosure, the fact that the wife had Suburb J beforehand, despite the fact she dealt with it inappropriately, and the fact that her superannuation was almost all acquired outside the relationship, justifying an approach of dealing only with the residue.
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.
I certify that the preceding two hundred and fifteen (215) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Smith. Associate:
Dated: 10 August 2022
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