Kazama and Britton (No. 2)
[2013] FamCA 545
FAMILY COURT OF AUSTRALIA
| KAZAMA & BRITTON (NO. 2) | [2013] FamCA 545 |
| FAMILY LAW – PROPERTY – de facto relationship – where the de facto wife seeks an 85/15 split in the de facto husband’s favour – where the de facto husband asserts the de facto wife made limited contributions – findings made on 15 January 2013 in relation to the parties’ de facto relationship – where the de facto husband sponsored the de facto wife to immigrate to Australia and made representations to the Department of Immigration as to the de facto wife’s contributions. |
| Family Law Act 1975 (Cth) |
| APPLICANT: | Ms Kazama |
| RESPONDENT: | Mr Britton |
| FILE NUMBER: | CSC | 543 | of | 2011 |
| DATE DELIVERED: | 19 July 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Cairns |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 11-12 March 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Morzone |
| SOLICITOR FOR THE APPLICANT: | Murray Lyons Solicitors |
| SOLICITOR FOR THE RESPONDENT: | Litigant in person |
Orders
By way of alteration of property pursuant to s 90SM Family Law Act 1975 (Cth), the de facto husband pay to the de facto wife the sum of $195,000 within a period of two months.
The de facto wife is granted liberty to make an application on 14 days notice in respect of the enforcement of Order 1 in the event the de facto husband does not comply with the order.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kazama & Britton has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: CSC 543 of 2011
| Ms Kazama |
Applicant
And
| Mr Britton |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
The parties in this matter were in a de facto relationship for six years and 10 months. A feature of the relationship was that for most of that time the parties were not together at night.
APPLICATIONS
The de facto wife is seeking 15 percent of the overall net assets on the basis of contributions and s 90SF Family Law Act 1975 (Cth) (“FLA”) factors. The de facto husband seeks no adjustment be made.
DOCUMENTS RELIED UPON
The de facto wife relied on the following:
3.1.Initiating Application filed 6 September 2011
3.2.De facto wife’s affidavit filed 6 September 2011
3.3.De facto wife’s affidavit filed 4 March 2013
3.4.Financial statement filed 20 November 2012
3.5.Financial statement filed 12 March 2013
The de facto husband relied on the following:
4.1.De facto husband’s affidavit filed 13 February 2012
4.2.Financial Statement filed 6 December 2012
SHORT HISTORY
The de facto husband was born in 1926 and is now aged 87.
The de facto wife was born in 1952 and is now aged 61.
The parties commenced a de facto relationship on 9 November 2002.
The parties separated on 9 September 2009.
CREDIT
Although I had made credit findings against the de facto husband in the hearing that led to a declaration being made under s 90RD(2)(a) FLA as to the existence of a de facto relationship, the de facto husband indicated that he wished me to hear and determine the consequential dispute relating to the alteration of property.
The versions of the relationship between the parties varied significantly. As indicated in my Reasons for Judgment delivered 15 January 2013, the difficulty for the de facto husband in his version is that some of his evidence about what happened during the relationship was inconsistent with a document entitled “Form 40SP” that he had signed on 11 September 2006. It was also inconsistent with notes of an interview between himself and an officer from the Department of Immigration and Citizenship in August 2008.
I concluded that in the circumstances I was unable to place any great reliance upon the version given by the de facto husband and that although I may have some doubts about some of the evidence given in the de facto wife’s case, I generally accept the version of events presented by the de facto wife.
Unless I specifically indicate otherwise, there was nothing in any additional evidence given by the parties in this second hearing which alters that initial conclusion.
Neither party provided complete evidence about their current respective financial circumstances.
The de facto husband gave three estimates of the value of his current residence, the third estimate being almost twice the value of his first estimate. The large variability in the de facto husband’s estimations does not give me any confidence about placing any weight on any of the estimates the de facto husband gives about the value of particular assets.
DETAILED CHRONOLOGY
The de facto husband was born in 1926 and is currently 87 years of age.
The de facto wife was born in Japan in 1952 and is currently 61 years of age.
The de facto wife’s daughter Ms K was born in 1985.
The de facto wife’s son was born in 1989.
In August 1997, the de facto wife immigrated to Australia with her two children.
The parties met on 22 October 1997 at a party.
The parties commenced a sexual relationship in January 1999. At that time the de facto husband was 72 years of age and the de facto wife was 47 years of age.
In November 2002 the de facto husband separated from his then wife and moved into a villa at a resort in North Queensland town P. I accept the de facto wife’s evidence that she had a key card to the villa at the time. The de facto wife commenced going to the de facto husband’s villa every day. The de facto wife performed cleaning, cooking and ironing duties for the de facto husband.
In 2002 the parties spent Christmas together. The de facto wife wrapped the de facto husband’s Christmas presents to his children.
In 2003 the de facto husband concedes that he gave the de facto wife an opal ring. The de facto husband insists that it was of very little value. He does concede however that the de facto wife wore that ring on her wedding ring finger and it made her very happy to be able to wear that ring on her wedding ring finger.
In 2003 the de facto wife commenced a personal services course and the de facto husband paid for that course. The de facto wife then commenced employment at XX Resort.
During 2003 the de facto husband paid for the maintenance of the de facto wife’s motor vehicle.
In 2004 the de facto husband expressed to the de facto wife that he wished to make an application for a marriage visa for the de facto wife. However, the de facto wife received a four year visa supported by her employer. The de facto husband paid the costs associated with that application for a visa. The parties holidayed together at Noosa and on the Gold Coast and the de facto husband introduced the de facto wife as his partner. The de facto wife continued to regularly come and stay at the de facto husband’s villa and the de facto wife continued to provide cleaning, cooking and ironing services. The de facto wife prepared pre-cooked meals for the de facto husband’s children prior to them staying with the de facto husband. It is common ground that whilst the de facto husband’s children were with him at the villa, the de facto wife was not present. The de facto husband paid for the de facto wife’s medical fees; car insurance; repairs; telephone and the gardener at the property which she rented at X. The parties attended the … Bank Christmas party together.
There were three “final” property hearings between the de facto husband and his former wife. The decisions of the first two trial judges were overturned on appeal by the Full Court and a new trial was ordered on each occasion. In 2005, the first “final” hearing led to what the de facto husband thought at the time were final orders. The de facto husband began to financially maintain the de facto wife more regularly.
In 2006 the de facto husband’s company leased a new property for the de facto wife to live in at D Avenue, X and maintained the payment of rent and outgoings on that property.
The de facto husband’s grandson E and his girlfriend A helped the de facto wife move into D Avenue. E and A stayed at the de facto husband’s villa for approximately five months and during this time the de facto wife continued to do all the cleaning, cooking, ironing and other household duties at the villa.
When the de facto wife’s son went to spend time with his father in Japan during the school holidays, the de facto wife stayed at the villa.
In May 2006 the de facto husband purchased a wide screen television and Austar for the de facto wife and paid for the de facto wife to undertake a four week vocational course.
In July 2006 the parties commenced the process to obtain a spousal visa with the de facto husband as the de facto wife’s sponsor. They attended upon Mr Z, an immigration agent.
In September 2006 a spousal visa application was lodged with the Department of Immigration and Citizenship by the de facto wife and her two children supported by a Form 40SP by the de facto husband.
In 2007 the de facto husband commenced paying for Ms K’s (the de facto wife’s daughter) university fees.
In June 2007 the parties holidayed overseas together, visiting friends and relatives of the de facto husband together. The de facto wife returned to Australia for her son’s return from Japan. The de facto husband continued on to Europe. The parties then again met up in Southeast Asia and continued their holiday.
In 2007 the de facto husband commenced discussion with the de facto wife in respect of entering into a prenuptial agreement. The de facto husband told the de facto wife that he wished to provide for her and her children if he were to pass away. The parties also discussed purchasing a hospitality business for the de facto wife.
In August 2007 the de facto husband purchased a new motor vehicle for Ms K.
In 2008 the de facto wife’s son went back to Japan to study. The de facto wife then stayed overnight at the villa more regularly and rarely returned to D Avenue except when the de facto husband’s children stayed with him for holidays. The parties took a four week holiday together to North America via Japan.
In August 2008 the parties both had interviews with the Department of Immigration and Citizenship to progress the application that had been lodged in September 2006.
In 2009, the de facto husband’s daughter Ms S and her family stayed at his villa and the de facto wife was there at that time. The de facto wife supervised tradespeople doing work at the villa.
In January 2009 the parties discussed living under the one roof together but decided against it given continuing litigation with the de facto husband’s ex wife.
On 10 April 2009 the de facto wife moved to a second D Avenue property and leased that property in her own name. The de facto husband continued to pay the de facto wife’s rent.
The de facto husband was divorced from his former wife on 23 May 2009 (see IABH & HRBH [2010] FamCA 110 at [78]).
On 22 February 2010, I made orders and published my Reasons for Judgment in the matter of IABH & HRBH [2010] FamCA 110 (“the 2010 judgment”). This was the third “final” property hearing the de facto husband had with his former wife. These orders were not the subject of an appeal by either the de facto husband or his former wife. The parties explicitly agreed to my hearing this matter notwithstanding my involvement in those earlier proceedings.
On 9 September 2009 the parties ended their relationship.
On 15 June 2011, the de facto wife began operating a hospitality business.
On 6 November 2012, I declared a de facto relationship existed between the parties from 9 November 2002 to 9 September 2009.
In November 2012, the de facto wife ceased operating the hospitality business
APPROACH
In this matter my task is to:
50.1.Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
50.2.Determine whether it is just and equitable to make an order altering those interests and if so;
50.2.1.Identify relevant contributions and assess them;
50.2.2.Consider relevant matters referred to in section 90SF Family Law Act 1975 (Cth)(“FLA”);
50.3.Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.
BALANCE SHEET
The de facto husband’s financial position
As a result of the order for alteration of the property interests between the de facto husband and his former wife made by me on 22 February 2010, the de facto husband received net assets of $5,293,365 (see the 2010 judgment at [374]).
The 2010 judgment also notes that the de facto husband retained assets that had associated with them inherent capital gains tax and realisation costs which were quantified when assessing matters under s 79(4)(d)-(g) FLA in the sum of $1,131,339 (see the 2010 judgment at [361]). Looking at what was the net value to the de facto husband of distribution, there was also an amount of $873,411 the de facto husband paid in legal fees which had been included as an addback in the hearing with the de facto husband’s former wife. This amount has been removed from the de facto husband’s assets. Once those items are accounted for, the de facto husband actually retained net assets amounting to $3,288,615.
The de facto husband represented himself throughout this hearing. He was given a number of opportunities prior to the final days of the hearing to properly disclose his financial circumstances but his disclosure was not fulsome.
The de facto husband did file a financial statement on 6 December 2012.
The de facto wife tendered (by way of a tender bundle) various financial records of the de facto husband (which became exhibit 11).
The balance sheet which appears below takes as its starting point the items that the de facto husband retained in 2010 as part of the alteration of property interests with his former wife. Assets or liabilities that were valued at $0 have been removed.
De Facto Husband’s Assets Item No. Description Value in the 2010 Judgment 1 BH Family Trust $3,818,505 2 WB Pty Ltd $51,713 3 Shares in KK Pty Ltd $907,813 4 Loan from related parties -$1,065,932 6 Shed at CC $210,000 7 P2 Villa $1,850,000 10 … (marine vessel) $245,000 11 Mercedes Benz (…) $2,500 12 Prestige motor vehicle (…) $15,000 14 Funds received/receivable from Mr RM pursuant to settlement $8,400 17 Income tax refunded/refundable (from husband's financial statement) $8,178 18 ANZ account No. …42; ANZ Progress Saver Account No. …35; ANZ Gold Access Statement No. …43 $2,815 19 IAG Insurance Australia Group $2,056 20 Miller Harris Trust Account $44,000 21 Sparken Hausen German Bank $3,358 22 Natwest Winchester Bank account $3,128 28 Chattels and jewellery $33,430 De Facto Husband’s Liabilities Item No. Description Value 34 ANZ Equity Manager account $743,000 35 Accountancy fees $3,740 36 Land tax $65,150 38A A further borrowing from the ANZ Bank at the [de facto] husband's direction $573,000 40 Capital gains tax and sale costs $6,300 N/A Allowance for capital gains tax $1,131,339 N/A Payment to former wife $328,820 Total Net Assets $3,288,615
It will not be possible to reach any precise conclusions about the de facto husband’s current net asset position. I will however discuss some of the evidence which is available, primarily from documents subpoenaed by the de facto wife.
Items 1 and 2 – BH Family Trust and WB Pty Ltd
The BH Family Trust owns property at MN Street, Town P. The property consists of a group of eight shops. HW Valuers (“HW”) conducted a valuation of the property on 26 April 2010. They opined the property was worth $4,280,000. That valuation was done on the basis that the assessed net annual income the property generated was $321,546 per annum (see pages 165 and 177 of exhibit 11).
It is the de facto husband’s case that the property is now worth $2,500,000 on the basis of decreased rental income. He says when the valuation was conducted the shops were each rented out for approximately $4000 - $6000 per month. He says that the shops are currently rented for:
Shop 1 – rent of $2000 per month plus GST
Shop 2 – rent of $3000 per month plus GST
Shop 3 - rent of $1250 per week plus GST
Shop 4 - rent of $1250 per week plus GST
Shop 5 - rent of $2000 per month plus GST
Shop 6 – vacant for three years
Shop 7 - rent of $2000 per month plus GST
Shop 8 - rent of $3500 per month plus GST
The de facto husband gave evidence that the tenants of shops 3 and 4 were substantially in arrears.
Senior counsel for the de facto wife pointed to the BH Family Trust’s Detailed Statement of Financial Performance for the year ended 30 June 2011. That document asserts that rental income in 2010 was $328,253.66 but that in 2011 it had only dropped to $297,032.81.
The de facto husband asserted that the valuation in 2010 was based on lease value. He said that only one of the leases has been signed, and that without “good” leases, the property cannot be worth $4,280,000. He conceded that the tenants have leased the premises for some years.
WB Pty Ltd (“WB”) is the trustee for the BH Family Trust. As at 15 February 2013, WB has a debt of $2,659,116.43. This is slightly more than what the de facto husband asserted on his financial statement sworn 6 December 2012, where he said the account was $2,600,000 overdrawn. Exhibit 11 includes a credit card statement for WB. As at 29 January 2013, WB owed $2,026.26.
Item 3 – Shares in KK Pty Ltd
This item was valued at $907,813 in the 2010 judgment. KK Pty Ltd (“KK”) owns the G Street shops. HW valued that property on 21 April 2010 at $3,430,000, based on a net rental income of $263,267 per annum. The de facto husband said that property has 12 shops in the complex. The de facto husband asserted that property was worth $2,500,000.
Page 55 of exhibit 11 is KK’s Detailed Statement of Financial Performance for the year ended 30 June 2011. For the year ended 30 June 2010, the rent received was $262,916.58. In the year ended 30 June 2011, the rent increased to $264,312.12. This seems to indicate that the rental income from these shops has not reduced in any significant way since 2010.
The de facto husband pointed to the increase in interest repayments for KK. In the 2010 financial year, KK paid $67,083.70. In the 2011 financial year, KK paid $86,888.75 in interest.
The de facto husband conceded he has not produced his financial records for year ended 30 June 2012 to show the rental income had decreased.
As at 15 February 2013, KK has a debt of $1,238,213.85 (see page 88 of exhibit 11). KK also has a credit card liability of $670.99 (as at 29 January 2013).
The de facto husband asserted in his financial statement that the company was in debt $1,200,000, but in oral evidence he said that the debt was more in the order of $1,400,000 or $1,500,000. When he was questioned on why the debt had increased substantially in one month (from 15 February 2013 to the date of the hearing), he said some substantial creditors who had commenced proceedings in court were paid by the bank. The de facto husband produced no documentation to substantiate this claim and I can place little weight upon it.
Item 6 – Industrial Shed
This item was valued at $210,000 in the 2010 judgment. The de facto husband asserts at item 36 of his Financial Statement that the shed is now worth $100,000. Exhibit 11 includes a valuation report prepared for the ANZ Bank dated 21 November 2011. The shed was valued at $125,000.
Item 7 – the de facto husband’s villa
There was evidence before me in this hearing that the de facto husband no longer owned P Villa which was valued at $1,850,000 in the 2010 judgment. He exchanged P Villa for a smaller villa. He paid $750,000 for P2 Villa, and he received $2,000,000 for P Villa. The de facto husband says $1,250,000 was used to pay off debts but again there has been no accounting by the de facto husband as to how the significant surplus funds from those transactions were deployed.
Exhibit 11 includes a Residential Valuation and Security Assessment dated 21 April 2010. That document asserts the market value of P2 Villa is $795,000. I note at page 200 of exhibit 11, the valued report says “[t]he sale includes furniture. We have assessed the added value of the furniture at $10,000.”
The de facto husband asserts in his Financial Statement that P2 Villa is worth $450,000. In his oral evidence he said it was worth $750,000. He later asserted that it was worth more than $795,000 because he had made substantial improvements to the property.
Item 10 – Marine Vessel
The de facto wife relies upon an Applicant/Guarantor Declaration which the de facto husband completed on 30 March 2011 for the ANZ Bank (see pages 110-114 of exhibit 11). In that document, the de facto husband completed a section entitled “Statement of Financial Position (Consumer)” and asserted the “total other assets (eg insured value of contents and valuables, boat etc)” was $420,000.
The de facto husband said he purchased the boat for approximately $300,000.
The de facto husband said he sold the boat approximately two years ago. He said he sold the boat for $30,000. Again there is no explanation from the de facto husband as to why the boat was sold for one-tenth of its purchase price.
Items 11 and 12 – motor vehicles
Items 11 and 12 in the 2010 judgment were agreed values between the de facto husband and his former wife (see the 2010 judgment at [100]) in the sum of $17,500.
Item 40 of the de facto husband’s Financial Statement asserts he now has three motor vehicles:
2007 Mercedes … $21,100
2009 Mercedes … $38,200
Honda (owned by WB Pty Ltd) $8,200
TOTAL $67,500
The de facto husband said in his oral evidence that he sold a 1989 Mercedes 300E for $50 (although he initially indicated he sold it for $15) because he “had a bill to pay”. He said it had rusted away.
In the Applicant/Guarantor Declaration, the de facto husband asserted he had four motor vehicles, the total value of which was $283,000. The de facto husband said at that time the 2007 Mercedes was worth $85,000 and the 2009 Mercedes was worth $100,000. Despite the fact that the declaration related to assets in his personal name, the de facto husband asserted the remaining $98,000 would have been four other vehicles that were in the name of WB Pty Ltd and used by his family members. I have insufficient evidence to be confident that what the de facto husband has asserted about his motor vehicles is accurate.
Items 34 and 38A – further borrowing from the ANZ bank
Page 89 of exhibit 11 is an interim statement of account from the ANZ Bank. The account is described as “equity manager” and has a balance of $694,358.33 in debit as at 15 February 2013.
I note the de facto husband’s credit card statement as at 10 February 2013 indicated he had a debt of $19, 899.02 on his ANZ Frequent Flyer Gold and a debt of $21,536.90 as at 22 January 2013 on his ANZ Low Rate card.
Conclusion about the de facto husband’s financial circumstances
As indicated, it is not possible to know the de facto husband’s current financial position. As the above discussion demonstrates the de facto husband has not in any comprehensive way attempted to provide to the Court a complete picture as to how his asset position had changed since 2010. The de facto husband contented himself with general statements to the effect that the Global Financial Crisis had significantly affected the value of his two main shopping centre assets and that a shortfall in rents over the expenses of holding the assets (the most significant expense being interest payments to the bank) had meant that his debt level had risen since 2010. I am prepared to accept that the costs of the de facto husband’s lifestyle since 2010 may have seen some diminution in the de facto husband’s capital.
The de facto husband’s position is that if he had to sell any of his assets then the bank would take them all and he would be left with nothing after sale costs. The de facto husband has not demonstrated by evidence led by him that that is in fact so. He has not explained what happened to the proceeds of the difference between the sale price of the P Villa and the purchase price of the residence that he now occupies; he has not produced any expert evidence to support his assertion as to the decrease in value of the two main assets that are retained by WB and KK. I do not accept the de facto husband’s overall assertion that his net asset position has greatly reduced since 2010. The conclusion that I reach is that, for the purposes of this hearing, the de facto husband should be assumed to have an asset position somewhat reduced from the one he had in 2010. Senior counsel for the de facto wife submitted that I should find the de facto husband’s net position to be $2.6 million. I am comfortably able to do so.
De facto wife’s assets
The de facto wife did have an interest in a business known as “SP Company” (“the hospitality business”). The de facto wife gave the following evidence at paragraphs 31 and 32 of her affidavit filed 4 March 2013:
31. I was previously operating the business known a [sic] [SP Company] but I am no longer doing so. I “purchased” the business from [QT] Pty Ltd who purchased the business from [O] Investments Pty Ltd. I am still paying the instalments for the purchase price. The director of that company is my friend [Ms O]. When [QT] Pty Ltd purchased the business from [O] Investments Pty Ltd it never received a transfer of the legal title to the assets of the business, including the business name, franchise agreement or Lease.
32. [Ms O] then changed her mind about having sold the business and told me she wanted to take it back over. Even though I did not want to stop operating the business, as I did not have the legal title to the business I was in a weak bargaining position. Therefore, in November 2012 I accepted an offer from [Ms O] to purchase the business off me for what I paid to [QT] Pty Ltd.
It seemed to be the de facto wife’s case that she “purchased” the hospitality business from QT Pty Ltd for a sum of $200,000. The purchase was financed by her friend Ms O lending her $60,000 and QT Pty Ltd providing vendor finance for the balance in the sum of $140,000.
As appears in paragraph 31 set out above, the de facto wife asserts that QT Pty Ltd did not provide her with good title at the time of her purchasing the business. The de facto wife in her financial statement asserts that she still owes QT Pty Ltd $70,000. It is unclear how that could be so given that it is the de facto wife’s case that QT Pty Ltd failed to provide her with good title in relation to what she bought from them. It seems to be the de facto wife’s evidence that she paid to QT Pty Ltd during the time that she operated the business an amount of $70,000. In relation to the $60,000 lent to her by Ms O, the de facto wife’s financial statement indicates that there was still $40,000 owing in relation to that liability. I infer from that evidence that the de facto wife paid back to Ms O an amount of $20,000.
Item 43 of the de facto wife’s financial statement also indicates that Ms O’s company owes the de facto wife $65,000. I take from that evidence that $65,000 was the amount the de facto wife accepted by way of an offer from her friend to purchase back the business which her friend had originally sold (seemingly without passing good title) to QT Pty Ltd. What the de facto wife is suggesting is that she sold back to her good friend a business that she paid $200,000 for an amount of $65,000. Apart from asserting that she was in a “weak bargaining position”, the de facto wife gives no real explanation as to why that would be an appropriate transaction to enter into.
Given that the friendship between the de facto wife and Ms O continues, I am unable to say with any confidence what, if any, the de facto wife’s current interest is in the hospitality business. I do however have considerable difficulty accepting the position put by the de facto wife in evidence about the hospitality business.
The de facto wife also says she has a liability of $28,000 in relation to taxation debts arising from the hospitality business but there is no evidence from any accountant that would give me any comfort that those estimates in relation to tax are accurate.
The de facto husband’s income and expenses
The de facto wife tendered various financial records of the de facto husband. The de facto husband’s 2011 tax return indicates that the de facto husband’s taxable income from dividends and distributions through entities was in the sum of $163,198. The de facto husband received a tax refund of $15,000 in the 2011 year. The de facto husband in his financial statement filed on 6 December 2012 indicated that he had a “salary” of $2000 per week from the family trust which operated the business of “real estate/owner-manager”. The de facto husband indicated his two major commitments were the payment to the ANZ bank of $30,000 per month and payment of rates and unit levies on the two commercial properties totalling about $80,000 annually. The recording of payments to the bank and outgoings on the commercial properties as personal expenses cannot be accurate and those expenses must be expenses of entities which derive income from rents paid by tenants who lease shops in the commercial properties. The de facto husband also pays $100 per week each for child support in respect of the two children of the marriage with his former wife. The de facto husband in no way attempts to provide any comprehensive indication of what the current net income is from various entities or any indication about his personal expenditure.
The de facto wife’s income
The de facto wife in her financial statement filed 20 November 2012 indicated that at time she was self employed in the hospitality business and was drawing a weekly amount from a company called “WD Investments Pty Ltd” of $484.37 per week. It was the de facto wife’s position at hearing that her involvement with that company had ceased. As I have earlier indicated, I do not, on balance, accept the de facto wife’s evidence about her lack of continuing involvement with that business.
WHETHER AN ORDER ALTERING INTERESTS SHOULD BE MADE
The parties have separated and their de facto relationship has ended. After the separation, there was no longer a continuing commitment by the de facto husband to financially support the de facto wife nor did the de facto wife continue in her role as homemaker for the de facto husband.
I find that in all the circumstances, particularly those set out in s 90SM(4) FLA, it is just and equitable to make an order altering property.
CONTRIBUTIONS
Initial Contributions
The de facto wife concedes she had no significant assets at the commencement of the relationship.
All of what the de facto husband has today is derived from those assets which the de facto husband had at the commencement of the de facto relationship (see discussion at [242]- [262] of the 2010 judgment).
Financial Contributions
In 2004, the de facto husband sold the BT property on favourable terms in circumstances described in the 2010 judgment (see [260] of the 2010 judgment). The de facto husband has made all significant financial contributions and provided significant support to the de facto wife and her family. The de facto husband paid the de facto wife’s rent and other expenses, such as the de facto wife’s personal services course. He paid for the de facto wife’s daughter’s university fees, rent and a motor vehicle.
In oral evidence, the de facto husband seemed to suggest that the de facto wife’s daughter owes him money and/or a motor vehicle. That evidence is not consistent with his financial statement where he sets out no such asset. It is my assessment that it is unlikely that the de facto husband has any claim against the de facto wife’s daughter and even more likely, if he did have such a claim, he wouldn’t exercise it.
Exhibit 3 sets out a schedule of expenses the de facto husband says he paid between April 2005 and July 2008. Those expenses total $135,209.94. I accept that those payments were made.
Senior counsel for the de facto wife submitted that was “unremarkable given the time of the relationship and the roles adopted by the respective parties in that relationship.” However I find given the length of the relationship and all contributions made in that time, those direct financial contributions made on behalf of the de facto wife are of some weight.
The de facto wife earned $15 per hour over two to three days a week in 2003, and earned $26,000 per annum between 2004 and 2007 working as a personal services provider. The de facto wife asserts that she used that income to support herself and her children and to pay for “joint expenses of my relationship with [the de facto husband], such as groceries.” The de facto husband denied the de facto wife paid for groceries, but I accept her evidence that she did.
Non-Financial Contributions
The de facto wife contends that she attended to significant domestic chores between 2002 and 2007.
The de facto husband denies the de facto wife made significant contributions in the way of homemaker. He conceded she attended his villa on Thursdays and cooked for him. He also conceded she would cook extra food which was then frozen.
The de facto husband asserts he employed a housekeeper.
As I noted in my Reasons for Judgment dated 15 January 2013, the de facto husband was interviewed by Ms L (a departmental officer from the Department of Immigration and Citizenship) on 21 August 2008 in regards to the de facto wife’s application for a spousal visa. Notes from that interview include:
There was no contact between the children of each partner with the children of the other partner, in that [Mr Britton] never visited [Ms Kazama] at her place when her children were with her and she never visited him when his children were with him…
…
Household
[Mr Britton] owns a 4 br villa at [a] resort in [Town P] and this is where he has resided since 2002 when he left the family home at [R]. He stated that [Ms Kazama] does everything in the villa and looks after him very well. (Cleans, washes & irons).
He advised that [Ms Kazama] makes heaps of food for when his sons come to stay with him however she still cannot be at his place when the boys come to stay.
I accept the de facto wife’s version in respect of the chores she carried out.
I accept that the de facto wife did not attend the de facto husband’s villa when his sons were there.
The de facto husband said that his children spent almost every weekend with him. The de facto wife asserts the de facto husband’s sons visited him each alternate weekend and half of school holidays. I accept the de facto wife’s evidence about this.
Post Separation Contributions
Since separation the de facto husband has continued to receive income from assets held by him although the de facto husband says most of that income is currently expended in servicing debt.
Conclusion on contributions
The de facto wife is seeking 5 percent to 7.5 percent on the basis of contributions.
I particularly take into account the overwhelming financial contributions made by the de facto husband and the financial benefits the de facto wife received during a relatively short relationship. I find in the circumstances it is appropriate to give the de facto wife an adjustment of the overall assets of 2.5 percent on the basis of contributions.
FUTURE NEEDS - SECTION 90SF MATTERS
The de facto wife seeks a 7.5 percent adjustment for s 90SF FLA factors.
The de facto husband is currently aged 87, and has a life expectancy of 5.4 years (see exhibit 10; a life expectancy table from the Australian Bureau of Statistics). The de facto wife is currently aged 61 and has a life expectancy of 25.5 years.
The de facto wife asserts her health has deteriorated since the breakdown of her relationship with the de facto husband. She says that she has been undergoing psychological treatment in relation to anxiety. She asserts that in July and September 2012 she suffered temporary paralysis.
Exhibit 8 is a letter from Queensland Health to the de facto wife dated 5 November 2012 stating “[y]ou were referred to the Stroke Outreach Service following your recent presentation to … Hospital Emergency Department. Our information indicates you were diagnosed with having had a stroke.”
I am unable to place significant weight on the de facto wife’s evidence regarding her health given its form.
The de facto husband has significantly more capital than the de facto wife. The de facto husband still had a taxable income of $163,198 in the 2011 tax year.
The de facto wife points to her fluency in English as a barrier to gainful employment. The de facto wife is currently unemployed.
Taking into account the de facto wife’s age and her language difficulties, I find the de facto wife’s employment prospects are limited subject to the comments I have already made about my uneasiness in respect of the de facto wife’s disposition of her interests in the hospitality business.
I take into account the short length of the relationship and the positive effect it had on the de facto wife’s employment prospects in Australia.
In the circumstances, it is appropriate to give the de facto wife a 5 percent adjustment for s 90SF FLA factors.
JUST AND EQUITABLE
The de facto husband asserted that any order that is made will be unenforceable because all his assets are encumbered by the bank as a secured creditor and the bank will take it all. The bank however has recently saved the de facto husband from bankruptcy; there have been bankruptcy notices issued which the bank has just paid out.
As indicated, I adopt an assessment of the de facto husband’s current wealth in the sum of $2,600,000. The de facto wife should therefore receive 7.5 percent of that sum which amounts to $195,000.
Standing back I consider that a just and equitable amount to order the de facto husband to pay the de facto wife by way of alteration of property.
The de facto wife did not seek to obtain any orders if the de facto husband defaults in making the payment. Consequently, it is not my intention to make any orders that would provide a default position in respect of the sale of any particular assets in the de facto husband’s name in circumstances where he fails to make the payment ordered. I will however grant the de facto wife liberty to make an application on 14 days notice in respect of the enforcement of the order in the event the de facto husband does not comply with the order.
I certify that the preceding one hundred and twenty five (125) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 19 July 2013.
Associate:
Date: 19 July 2013
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