Kellner and Kellner and Anor

FAMILY COURT OF AUSTRALIA

KELLNER & KELLNER & ANOR

[2016] FamCA 216

FAMILY LAW – PROPERTY – final orders – where consideration is given to section 90SF of the Family Law Act 1975 (Cth) as it relates to financial matters relating to de facto relationships – where the parties were in a de facto relationship for 22 years – where consideration is given to an alternation of property interests – where there is an intervener – where the de facto wife’s evidence is preferred to that of the de facto husband and the intervener – where orders are made for just and equitable property settlement 66 per cent in favour of the wife – where the de facto husband is required to pay monies to the de facto wife and the intervener.

Evidence Act 1995 (Cth) s 128
Family Law Act 1975 (Cth) s 90SB 90SF, 90SM, 106A
Limitation Act 1981 (NT)

Vass & Vass [2015] FamCAFC51

DE FACTO WIFE:

Ms Kellner

DE FACTO HUSBAND:

Mr Kellner

INTERVENER:

Ms King

FILE NUMBER:

DNC

439

2012

DATE DELIVERED:

8 April 2016

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Darwin

JUDGMENT OF:

Dawe J

HEARING DATE:

23-24 April 2015;
27-30 April 2015;
1 May 2015;
27-29 July 2015

REPRESENTATION

COUNSEL FOR THE DE FACTO WIFE:

Ms Farmer

SOLICITOR FOR THE DE FACTO WIFE:

Withnalls Lawyers

COUNSEL FOR THE DE FACTO HUSBAND:

Mr Black (until 1 May 2015)

Mr Hanlon
(with Mr Connop) (from 27 July 2015)

SOLICITOR FOR THE DE FACTO HUSBAND:

Cecil Black Family Lawyers (until 16 June 2015)

Connop Barristers & Solicitors (from 22 July 2015)

COUNSEL FOR THE INTERVENER:

Mr Baldry

SOLICITOR FOR THE INTERVENER:

William Forster Chambers

Orders

Within sixty [60] days the de facto husband Mr Kellner pay to the de facto wife Ms Kellner the sum of TWO HUNDRED AND TWELVE THOUSAND DOLLARS [$212,000.00].
Within thirty [30] days the de facto husband Mr Kellner pay to the intervener Ms King the sum of ONE HUNDRED AND FORTY FIVE THOUSAND SIX HUNDRED AND TWENTY TWO DOLLARS [$145,622.00].
Within fourteen [14] days the de facto husband MR KELLNER sign all documents necessary to effect a discharge of any mortgage and transfer to the de facto wife Ms Kellner all of his right, title and interest in the following estates:
(a)Property B from Plan(s) … otherwise known as C Street, Suburb D in the Northern Territory;
(b)Property E from Plan(s) … otherwise known as F Street, Suburb D in the Northern Territory.
Upon payment by the de facto husband Mr Kellner to the de facto wife Ms Kellner of the sum of TWO HUNDRED AND TWELVE THOUSAND DOLLARS [$212,000.00] the de facto wife Ms Kellner do all acts and things necessary to arrange a discharge of the Bank SA loan … in the name of Mr Kellner & Son Pty Ltd and refinance the loan indemnifying the de facto husband Mr Kellner and second respondent Mr G Kellner with respect to the loan.
Pursuant to s.106A of the Family Law Act 1975 (Cth), the Registrar or Deputy Registrar of the Family Court of Australia at Darwin be appointed to execute all deeds or instruments and sign all documents and things necessary in relation to Property E from Plan(s) … otherwise known as F Street, Suburb D in the Northern Territory and Property B from Plan(s) … otherwise known as C Street, Suburb D in the Northern Territory and for and on behalf of the de facto husband Mr Kellner and intervener Ms King upon presentation to the Registrar of an affidavit as to the request made to the de facto husband Mr Kellner and intervener Ms King to execute documents and their failure to do so within seven [7] days of presentation to them of the instrument to sign.
Within fourteen [14] days the de facto husband Mr Kellner and the intervener MS KING sign all documents necessary to effect a discharge of any mortgage and transfer to the de facto wife Ms Kellner all of their right, title and interest in Property H from Plan(s) … otherwise known as I Street, Suburb K in the Northern Territory which property is hereafter declared to be the sole property of the de facto wife Ms Kellner free from any claim by the de facto husband Mr Kellner or the intervener Ms King.
Pursuant to s.106A of the Family Law Act 1975 (Cth), the Registrar or Deputy Registrar of the Family Court of Australia at Darwin be appointed to execute all deeds or instruments and sign all documents and things necessary in relation to Property H from Plan(s) S2006/209 otherwise known as I Street, Suburb K in the Northern Territory and for and on behalf of the de facto husband Mr Kellner and intervener Ms King upon presentation to the Registrar of an affidavit as to the request made to the de facto husband Mr Kellner or intervener Ms King to execute deeds or instruments necessary in relation to I Street, Suburb K and their failure to do so within seven [7] days of presentation to them of the instrument to sign.
The de facto wife Ms Kellner indemnify the de facto husband Mr Kellner and intervener Ms King in relation to all and any capital gains tax applicable from the transfer or sale of Property H from Plan(s) … otherwise known as I Street, Suburb K in the Northern Territory.
Pursuant to s.106A of the Family Law Act 1975 (Cth), the Registrar or Deputy Registrar of the Family Court of Australia at Darwin be appointed to execute all deeds or instruments for an on behalf of the de facto husband Mr Kellner and sign all documents and things necessary to give effect to the sale of Property L from Plan(s) … otherwise known as M Street, Suburb K in the Northern Territory (“the M Street property”) with the de facto wife Ms Kellner to nominate the agent, sale price and execute any contract accepting any offer agreed by the de facto wife.
The proceeds of sale of the M Street property to be used:
(a)to pay the reasonable expenses of the sale including agent’s commission and legal costs and disbursements;
(b)to discharge any mortgage secured on the property;
(c)to pay all rates and taxes associated with the said property;
(d)to pay the remaining balance (if any) to the de facto wife.
The funds held in Withnalls Trust Account being joint funds of the de facto wife Ms Kellner and de facto husband Mr Kellner arising from the sale of Property N from Plan(s) … otherwise known as O Street, Suburb P in the Northern Territory and … Property Q from Plan(s) … otherwise known as R Street, Suburb P in the Northern Territory be paid forthwith to the de facto wife Ms Kellner.
The de facto wife Ms Kellner retain for her sole use and benefit the following investments:
(a)       Motor vehicle 1 Northern Territory registration …;
(b)       all of her right, title and interest in S Pty Ltd;
(c)all funds standing to the de facto wife’s credit in the following accounts:
(i)National Australia Bank BSB … Account …;
(ii)National Australia Bank BSB … Account …;
(d)       all jewellery within her possession; and
(e)       all of her member entitlements in Host Plus member number …
The de facto wife Ms Kellner do all acts and things necessary to remove the de facto husband’s name Mr Kellner and the intervener’s name Ms King from the following bank accounts and the de facto wife Ms Kellner do retain any funds standing to their credit:
(a) Bank SA Complete Freedom Account …;
(b) Bank SA Account ….
The de facto husband Mr Kellner retain for his sole use and benefit the following investments:
(a)all of his right, title and interest in the Motor vehicle 2 Northern Territory registration …;
(b)all monies standing to the credit in any bank account in the name of the de facto husband;
(c)all of his right, title and interest in Property T Plan(s) … otherwise known as U Street, Suburb V in the Northern Territory SAVE AND EXCEPT that the interest of the de facto husband Mr Kellner in the property at U Street, Suburb V in the Northern Territory is subject to any claim by the de facto wife Ms Kellner and the intervener Ms King arising out of any failure by the de facto husband to pay the sums due to the de facto wife Ms Kellner and the intervener Ms King within the times prescribed in these orders.
SAVE AND EXCEPT for the purpose of providing security for the payments due to the de facto wife Ms Kellner and the intervener MS KING pursuant to these orders the de facto husband Mr Kellner is restrained and an injunction is granted restraining him from dealing with his interest in the property at U Street, Suburb V in the Northern Territory until payment is made in full to the de facto wife Ms Kellner and the intervener Ms King.
The de facto wife Ms Kellner and de facto husband Mr Kellner do all acts and things necessary to complete the 2012, 2013, 2014 and 2015 Kellner Brothers partnership taxation return with all income and liabilities being paid to the de facto husband Mr Kellner solely and the de facto husband Mr Kellner make payment and indemnify the de facto wife Ms Kellner with respect to all or any income for the partnership for the financial years ending 2012, 2013, 2014 and 2015.
The de facto husband Mr Kellner do all acts and things necessary and provide to the de facto wife Ms Kellner all minutes of meetings and any ASIC forms for execution by the de facto wife Ms Kellner resigning her directorship and transferring her 25 ordinary shares in Mr Kellner & Son Pty Ltd to the de facto husband Mr Kellner at the de facto husband’s sole expense.
The de facto husband Mr Kellner indemnify the de facto wife Ms Kellner with respect to the following:
(a)any fees, invoices or debts due or owing to Deloitte Touche Tohmatsu arising from his instruction relating to Mr Kellner & Son Pty Ltd;
(b)any fines, penalties or obligations to the Australia Taxation Office arising from Mr Kellner & Son Pty Ltd;
(c)all personal taxation liability for the de facto husband Mr Kellner payable to the Australia Taxation Office;
(d)all monies due and owing as between the second respondent Mr G Kellner and intervener Ms King and Kellner Brothers and/or the de facto husband Mr Kellner and the de facto wife Ms Kellner and the second respondent Mr G Kellner and intervener Ms King.
The de facto husband Mr Kellner meet and pay all liabilities and indemnify the de facto wife Ms Kellner from all funds owing to the Australia Taxation Office arising from the capital gains tax attributable to the de facto husband Mr Kellner from the sale of the following real estates:
(a)Property W from Plan(s) … otherwise known as X Street, Suburb K in the Northern Territory;
(b)Property Z from Plan(s) S20110/225E otherwise known as AA Street, Suburb BB in the Northern Territory;
(c)Property Q from Plan(s) S2004/171 otherwise known as R Street, Suburb P in the Northern Territory;
(d)Property L from Plan(s) S2005/196A otherwise known as M Street, Suburb K in the Northern Territory.
The de facto wife Ms Kellner meet and pay all liabilities and indemnify the de facto husband Mr Kellner from all funds owing to the Australian Taxation Office arising from the capital gains tax attributable to the de facto wife Ms Kellner from the sale of the following real estates:
(a)Property Q from Plan(s) … otherwise known as R Street, Suburb P in the Northern Territory;
(b)Property Z from Plan(s) … otherwise known as AA Street, Suburb BB in the Northern Territory;
(c)Property W from Plan(s) … otherwise known as X Street, Suburb K in the Northern Territory;
(d)Property N from Plan(s) … otherwise known as O Street, Suburb P in the Northern Territory.
Unless otherwise specified in this order and except for the purpose of enforcing the payment of money due under this order or any subsequent order:
(a)each party shall be entitled to the exclusion of the other to all other property and chattels of whatsoever kind or nature in the possession of such party as at the date hereof and for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements; and
(b)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this order.
Save as to the question of costs the Initiating Application filed by the de facto wife on 17 October 2012 is dismissed and removed from the active pending cases list.
Any application for costs to be listed for hearing on a date to be advised after the Docket Registrar has received a written request for such hearing allowing the parties not less than fourteen [14] days’ notice.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kellner & Kellner & Anor 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 ADELAIDE

FILE NUMBER: DNC 439 of 2012

Ms Kellner

De facto wife

And

Mr Kellner

De facto husband

And

Ms King
Intervener

REASONS FOR JUDGMENT

Introduction

By way of Initiating Application filed on 17 October 2012 Ms Kellner (“the de facto wife”) sought final orders for property settlement.
By way of Response filed on 25 October 2012 Mr Kellner (“the de facto husband”) sought alternate orders for property settlement.
On 14 March 2014 by order of Judge Harland Ms King (“the intervener”) was joined as a party to the proceedings. The intervener is the daughter of the de facto husband.

Relevant background

The de facto wife was born in 1954 and was 60 years of age when the trial commenced. The de facto wife was born in Country CC. She first came to Australia in February 1986.
The de facto husband was born in 1945 and was 69 years of age when the trial commenced. He was born in Country DD.
The intervener was born in 1982 and was 33 years of age when the trial commenced.
The de facto wife met the de facto husband on 5 March 1986 in Australia. The parties commenced cohabitation on 26 August 1986 and were married in 1986.
A decree nisi was declared on 25 June 1990. Despite this, the parties continued their relationship. The de facto wife alleges the parties separated on 12 July 2012 when she moved out of the home.
The de facto husband was previously married and has three adult children from that relationship. When the de facto wife and the de facto husband commenced cohabitation the de facto husband’s children were aged 8, 6 and 4. The children lived primarily with their mother but spent time with the de facto husband on weekends and during holidays.
Shortly after separation the de facto husband commenced living with Ms EE (“Ms EE”). Ms EE was born in Country CC in 1982. She moved to Australia to pursue her relationship with the de facto husband. Ms EE and the de facto husband married in 2013. There is one child of the relationship born in 2015.
At the commencement of the relationship between the de facto wife and the de facto husband the de facto wife held no property of value. The de facto husband held an interest in a property at FF Street, Suburb GG and an interest in a construction business known as Kellner Brothers.

Procedural history

On 17 December 2013 Judge Harland delivered judgment in the Federal Circuit Court and made orders declaring that pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) from 8 July 1990 until 12 July 2012 the parties were in a de facto relationship and that pursuant to s 90SK of the Act both parties were ordinarily resident in the Northern Territory of Australia for more than one third of the de facto relationship.
On 14 March 2014 by order of Judge Harland, the intervener was joined as a party to the proceedings. II Pty Ltd and JJ Pty Ltd were also joined as parties to the proceedings. Orders were further made for partial property settlement, that the de facto husband transfer his interest in the Motor vehicle 1 to the de facto wife and that the de facto wife transfer her interest in the Motor vehicle 2 and the Motor vehicle 3 to the de facto husband. In the event that the properties situate at U Street, Suburb V, O Street, Suburb P and M Street, Suburb K were sold, proceeds after payment of sales agent commission, mortgage(s) and any outstanding rates and utilities were to be paid to Bank SA and the parties were restrained from accessing or expending any net funds without agreement in writing or order of the Court. The parties were further ordered to accept any offer received by an independent third party for R Street, Suburb P in excess of $685,000. The parties were ordered to accept an offer of $650,000 for the property at X Street, Suburb K.
On 14 May 2014 Judge Harland delivered judgment in the Federal Circuit Court and made further orders for partial property settlement. The de facto wife was given sole use and occupation of the property situate at F Street, Suburb D with the exclusion of all respondents. The parties were ordered to list on the market for sale the properties situate at I Street, Suburb K, R Street, Suburb P, M Street, Suburb K and O Street, Suburb P with detailed orders for the purchase price to be accepted by the parties. Further orders related to how the proceeds from the sale of the said properties were to be distributed. The property situate at C Street, Suburb D was ordered to be listed for lease. Detailed orders were made for the distribution of rental proceeds. Orders were also made for costs. The proceedings were then transferred to the Family Court of Australia noting that the parties estimated that the final hearing would take at least 5 days.
On 17 October 2014 I made orders by consent joining Mr KK as a party to the proceedings. Further orders were made in relation to JJ Pty Ltd and II Pty Ltd. Those parties were then released and discharged as parties to the proceedings.
On 10 March 2015 I made orders for discovery and costs. On that day further orders were made for the second respondent Mr G Kellner to transfer equally to the de facto wife and the de facto husband his interest in the property situate at F Street, Suburb D. Withnalls Lawyers were ordered to transfer to the second respondent $60,000 from the net proceeds of the sale of O Street, Suburb P and R Street, Suburb P. The second respondent was then discharged from the proceedings.

The final hearing

The trial was listed to commence on 22 April 2015 but was adjourned to 23 April 2015. The trial was heard over the following seven days. On 1 May 2015 I gave leave for the de facto wife to issue subpoenas to the ANZ Bank and Bank SA. It was further ordered that the de facto husband be restrained from accessing the contents of a safety deposit box, and the safety deposit box was to be delivered to the Registry Manager of the Family Court of Australia at Darwin. The de facto wife was ordered to continue to comply with the obligations for disclosure and discovery in relation to documents in her possession or control concerning I Street, Suburb K. The trial was further adjourned part heard to 27 July 2015.
The matter came back before me on 27 July 2015 and was heard over three days.
Judgment was then reserved on 29 July 2015.
Following an application on behalf of the de facto wife orders were made on 13 November 2015 fixing a further sale price for the M Street, Suburb K property.

Orders sought by each party

The orders sought by the de facto wife were outlined in the Outline of Case document filed by the de facto wife on 14 April 2015 with slight variations requested in the final address of counsel.
The orders sought by the de facto husband were outlined in the Outline of Case document filed by the de facto husband on 9 April 2015.
The orders sought by the intervener were outlined in the Case Outline document provided to the Court by the intervener on 27 July 2015. The document was entitled “Second Amended Case of Third Respondent”.

The de facto wife further sought orders that the de facto husband transfer to the de facto wife his interest in the properties situate at C Street, Suburb D and F Street, Suburb D.
In relation to the intervener, the de facto wife sought an order that the Court make a declaration that the intervener has no legal beneficial or equitable entitlement to the property situate at I Street, Suburb K. The de facto wife sought further order that the de facto husband and intervener transfer their interest in the said property to the de facto wife and upon doing so the de facto wife will indemnify the intervener from any capital gains tax applicable from the sale of the said property.
In relation to the property situate at M Street, Suburb K, the de facto wife sought an order that the Registrar or Deputy Registrar of the Family Court of Australia execute, on behalf of the de facto husband, any instrument necessary to give effect to the sale of the property accepting any offer over $680,000. The de facto wife sought an order that the proceeds from the sale of the said property be used to pay two Bank SA loans. The orders made on 13 November 2015 reduced the sale price to $660,000.
The de facto wife sought an order that the funds held in the Withnalls Trust Account (being the joint funds of the de facto wife and the de facto husband arising from the sale of various properties, which remain after the second respondent Mr G Kellner (“Mr G”) was paid $60,000 pursuant to the orders of 10 March 2015) be paid to the Bank SA Business Maximiser Overdraft Account and any residual funds to be distributed to the de facto wife.
The de facto wife sought an order that she retain for her sole use and occupation the Motor vehicle 1, her interest in the S Pty Ltd, all funds in two NAB accounts, all jewellery in her possession, and all of her member entitlements in her Host Plus superannuation account.
The de facto husband sought orders that the de facto wife transfer to him all of her interest in the properties situate at F Street, Suburb D and I Street, Suburb K. He sought further orders that the de facto wife be released from any liability in respect of those properties.
The de facto husband sought orders that the property situate at C Street, Suburb D be transferred to the de facto wife, and that he be released from any liability in respect of that property.
With regards to the property situate at M Street, Suburb K the de facto husband sought orders that the property be listed for sale with the listing price to be agreed by the parties. The proceeds of the sale of that property were sought to be applied to the mortgage secured over the said property, and payment of other debts due and owing in relation to Mr Kellner & Son Pty Ltd.
The de facto husband sought further order that the funds held in Withnalls Trust Account, being the joint funds of the de facto wife and the de facto husband arising from the sale of various properties, be used to pay the Bank SA Business Maximiser Overdraft Account and the balance to be distributed to the parties 30/70 per cent in favour of the de facto husband.
Further, the de facto husband sought orders that the de facto wife retain for her sole use and occupation the Motor vehicle 1, her interest in S Pty Ltd, all funds in various accounts in the name of the de facto wife, jewellery within her possession and all of her member entitlements in her Host Plus superannuation account.
Orders were further sought that enable the de facto husband to retain for his sole use and occupation the Motor vehicle 2, all monies in any bank account in his name, all interest in the property situate at U Street, Suburb V, and all superannuation in his name.
He also sought orders for his name to be removed from a number of credit accounts.
Further orders were sought by the de facto husband in relation to each party being solely liable for any liability encumbering any item of property to which the party is entitled pursuant to the orders he sought.
By way of adjustment, the de facto husband sought an order so as to effect an overall distribution between the parties of 30 per cent to the de facto wife and 70 per cent to the de facto husband of the total net property.
The intervener sought a declaration that she has a “legal and beneficial interest of one third of the property situate at I Street, Suburb K”. A further declaration is sought by the intervener that the loan from the de facto wife and de facto husband be “by way of gift”.
On final submissions at the end of the trial the parties sought different orders which are referred to later in this judgment.

Evidence relied upon by each party

The de facto wife relied upon the following documents at trial:-
a)Initiating Application filed 17 October 2012;
b)Affidavit of Ms Kellner filed 27 February 2015;
c)Affidavit of Ms MM filed 29 February 2015;
d)Financial statement of Ms Kellner filed 27 February 2015;
e)List of Exhibits filed 27 February 2015;
f)Case Outline filed 14 April 2015.
The de facto husband relied upon the following documents at trial:-
a)Response to Initiating Application filed 25 October 2012;
b)Affidavit of Mr Kellner filed 2 April 2015;
c)Financial Statement of Mr Kellner filed 2 April 2015;
d)List of Exhibits filed 7 April 2015;
e)Case Outline filed 8 April 2015.
The intervener relied upon the following documents at trial:-
a)Affidavits of Ms King filed 25 September 2014; 13 January 2015; 27 March 2015; 21 April 2015 and 28 April 2015;
b)Document entitled Second Amended Case of Third Respondent (the intervener) filed 27 July 2015.

Oral evidence

The oral evidence of the parties and the witnesses commenced on 23 April 2015. The de facto wife gave brief evidence in chief and was then cross-examined. The evidence of the witness Ms MM, the de facto wife’s niece was interposed. After that the cross-examination of the de facto wife continued.
Subsequently, the Court received the oral evidence of de facto husband with the assistance of an interpreter. The de facto husband was then cross-examined at length over a period of days.
When the trial resumed in July 2015, the de facto wife gave further brief evidence in chief.
The Court then received brief evidence in chief of the intervener who was then cross-examined.
Throughout the proceedings there were numerous certificates granted pursuant to s 128 of the Evidence Act 1995 (Cth) (“the Evidence Act”). Most of these were provided to the de facto husband, with the intervener receiving one.

The law

Part VIIIAB of the Act deals with financial matters relating to de facto relationships. A declaration was made by Judge Harland confirming the existence of the de facto relationship between the de facto husband and de facto wife from 8 July 1990 until 12 July 2012.
Section 90SM of the Act provides as follows:
Section 90SM
Alteration of property interests
(1)In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i)     either or both of the parties to the de facto relationship; or
(ii)    the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
Note 1:The geographical requirement in section 90SK must be satisfied.
Note 2:The court must be satisfied of at least one of the matters in section 90SB.
Note 3:For child of a de facto relationship , see section 90RB.
(2)If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)     to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)    otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)     to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)    otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
…
(10)The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a de facto relationship (the subject de facto relationship ):
(a)a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the order were made;
(b)a person:
(i)     who is a party to a de facto relationship (the other de facto relationship) with a party to the subject de facto relationship; and
(ii) who could apply, or has an application pending, for an order under section 90SM, or a declaration under section 90SL, in relation to the other de facto relationship;
(c)a person who is a party to a Part VIIIAB financial agreement (that is binding on the person) with a party to the subject de facto relationship;
(d)     a person:
(i)     who is a party to a marriage with a party to the subject de facto relationship; and
(ii)    who could apply, or has an application pending, for an order under section 79, or a declaration under section 78, in relation to the marriage (or void marriage);
(e)a person who is a party to a financial agreement (that is binding on the person) with a party to the subject de facto relationship;
(f)any other person whose interests would be affected by the making of the order.
…
(12)If a person becomes a party to proceedings under this section because of paragraph (10)(b), the person may, in the proceedings, apply for:
(a)an order under section 90SM; or
(b)a declaration under section 90SL;
in relation to the other de facto relationship described in that paragraph.
Section 90SF(3) provides as follows:
Section 90SF
Matters to be taken into consideration in relation to maintenance
(3)The matters to be so taken into account are:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)     himself or herself; and
(ii)    a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)     any law of the Commonwealth, of a State or Territory or of another country; or
(ii)    any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 90SM in relation to:
(i)     the property of the parties; or
(ii)    vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)     a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)    a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(i)     the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)    vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i)     a party to the subject de facto relationship; or
(ii)    a person who is a party to a marriage with a party to the subject de facto relationship; or
(ii)    the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)    vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
Issues arose in relation to the loan account which existed indicating that the intervener may have borrowed money which was repayable. This involved consideration of the Limitation Act 1981 (NT) impact on the recovery of any such loan, if it existed.
The intervener’s claim to a share in real estate was disputed by the de facto wife.
On behalf of the intervener the final submissions referred to many authorities in relation to issues of presumption of advancement. In particular, counsel for the intervener submissions included at paragraph 39:
39.          Finally, in Buffrey v Buffrey [2006] NSWSC 1349 Palmer J at [14] said that whilst the presumptions of resulting trust and advancement “often compete”, nonetheless “like all evidentiary presumptions” they “give way to facts showing the contrary” ([14(1)]); and that “whether either presumption is rebutted depends upon the intention solely of the party who provided the money” ([14(4)(a)]). His Honour observed that the principles upon which the Court proceeds are “well settled”. His Honour provided a comprehensive list of the principles, referenced extensively to the authorities. There is nothing controversial in his Honour’s formulation of the principles. I will set out those of particular relevant here:
[14]         The presumptions of resulting trust and advancement often compete in cases between husband and wife, or de facto spouses, or between parent and child, where title to property is held in joint names but the parties have made unequal contributions to the cost of acquisition. The principles upon which the Court proceeds are now well settled and can be summarised thus:
(1) one begins with the presumption that the equitable title to the property is at home with the legal title but that presumption, like all evidentiary presumptions, gives way to facts showing the contrary; …
(3) the presumption of resulting trust may be rebutted by showing that there is a relationship between the parties giving rise to the presumption of advancement so that the party who has contributed less or nothing to the acquisition cost is nevertheless to have an interest in accordance with the legal title;
(4) if a presumption of resulting trust or a presumption of advancement arises where one party has contributed the whole of the acquisition cost of the property but the title to the property is placed in the name of another party:
a.   whether either presumption is rebutted depends upon the intention solely of the party who provided the money because the question is whether that person intended to make a gift of an interest in the property to the person who did not contribute to its acquisition;
b.   evidence by the person making the payment as to his or her intentions at the time of the transaction is admissible but the Court will treat that evidence with caution as the evidence of an interested party;
c. the Court is more assisted in determining the subjective intention of the person making the payment by evidence of that person’s contemporaneous statements of intention, subsequent admissions against interest, subsequent dealings with the property, and by evidence of other relevant surrounding circumstances;
…
(7)   for the purposes of the presumptions of both of resulting trust and of advancement:
a)     the acquisition cost of property includes the costs, fees and disbursements incidental to its acquisition;
b)    a party contributes to acquisition cost by borrowing funds necessary to make up the acquisition cost, whether or not that party subsequently contributes to payment of principal and interest due on the borrowing;
c)    parties borrowing jointly in order to make up the acquisition cost are treated as having contributed the borrowed capital in equal shares;
d)    a party who does not borrow funds to make up the acquisition cost but who subsequently pays, or contributes to payment of, principal and interest on such a borrowing does not, by that fact alone, make a contribution to acquisition cost.

Although the submissions contain reference to numerous other cases they are not included in this judgment but have been given appropriate consideration.
The Full Court decided in the matter of Vass & Vass [2015] FamCAFC 51 at paragraphs 138 and 139 as follows:
138.There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford (2012) 247 CLR 108 – is authority for any necessary contrary solution. Some statements made by the High Court may lead to the conclusion that references to “notional property” as have been referred to in decisions of this court and at first instance may need to be reconsidered.
139.The decisions referred to seek to remind the Court that, however the exercise of discretion might seek to deal with property that is said to be the subject of “addback”, proper consideration must be given to existing interests in property, and the question posed by s 79(2) as a separate inquiry from any adjustment to property interests by reference to s 79(4) if a consideration of s 79(2) reveals that it is just and equitable to alter existing interests in property.

Assessment of evidence and summary

The de facto wife gave her brief evidence in chief and was then cross-examined by counsel for the de facto husband, Mr Black, and counsel for the intervener, Mr Baldry. The de facto wife was not able to give a detailed response to some questions. Her evidence was otherwise not significantly challenged in cross-examination. The evidence of the de facto wife’s witness, Ms MM, the niece of the de facto wife related to the arrangements made with the de facto wife and the de facto husband for the house and land package and the work that she carried out for the Kellner Brothers business.
In the evidence which she gave under cross-examination, the witness confirmed that most of the conversations she had about purchasing the property and the building of the house were with the de facto wife and not the de facto husband. Otherwise her evidence was not significantly challenged.
The de facto husband commenced his evidence when represented by Mr Black of counsel. At the request of the de facto husband an interpreter was provided. At the commencement of the evidence in chief he gave answers which indicated that he did not remember significant matters and could not remember whether he had some documents. During lengthy cross-examination, and whilst having the benefit of the interpreter, the de facto husband gave answers which included that he did not understand simple Court orders and that he did not read documents (such as orders of this Court in these proceedings). Specifically, he was asked whether he had read an undertaking of disclosure which he had signed in September 2014 and whether he had read it before he signed it. His answer was words to the effect “No, I don’t read it, most of the documents I don’t read”. He admitted that he had signed important documents but had not read them before he signed them. He agreed that his solicitor had explained documents to him but he maintained that he did not fully understand the contents.
At times his evidence in relation to the work he had carried out since separation was unsatisfactory. This included his answers when his evidence was given after being provided with an Evidence Act Certificate. His evidence was that since August 2012 he had regularly received cash for work done which had not been declared on his tax returns.
His evidence included that he had built two houses and for that work he had requested payment in cash, including approximately $63,000 which he did not bank. When asked whether the amount he received could have been $83,000 and not $63,000, his response was “I say approximately”.
He also confirmed that he had a builder’s registration certificate valid up until September 2016.
The de facto husband’s evidence about his ability to work was also inconsistent. At some parts of his evidence he said that he was 70 and could not work anymore. However, he conceded that he continued to hold a builder’s licence and continued to work with his son assisting in building properties.
His present wife did not give evidence. When asked about whether his new wife would work and he would care for the young child his answers were words to the effect that he was “not thinking that way… doesn’t know how he will make ends meet”.
When asked about the document which he had signed setting out his overseas travel he said that his lawyers had prepared it and he had not checked it.
In particular, in relation to his travel to Country NN, he took issue with paragraphs in his affidavit and said they were mistakes.
Under cross-examination he admitted taking large sums out of accounts but was unable to provide any satisfactory explanation to what he had done with the monies other than to say in general terms that he used the monies for expenses.
Specifically when asked about the money he had borrowed from Mr G Kellner (“Mr G”) he was asked to indicate where the $60,000 had been placed and where it was. His answer was that “Yes it has got to be somewhere”.
When asked about the material in his financial statement his response was to ask words to the effect “Did I draft this, did I do this?”. When told that he had sworn it on oath to be true, his reply was words to the effect “My lawyer requested me to sign the document and I just signed it”.
He was questioned at length about building work he had done over the years and the use to which he had put the funds he had received recently and his explanation for the inconsistencies in his written evidence and oral evidence.
When cross-examined about payments or withdrawals from accounts and where the money went, the de facto husband gave confusing answers and frequently said that his affidavit was wrong and he had not prepared it, his lawyer was wrong or his lawyer was confused. He also alleged that he did not write cheques he simply signed them and left them. At other times when presented with documents he would say that his original evidence needed to be corrected. Generally, the evidence of the de facto husband as to the whereabouts of monies withdrawn from accounts was unsatisfactory.
I am satisfied that the evidence indicates that the de facto husband withdrew large sums from accounts and notwithstanding there were large sums due and owing by way of mortgages and loans, he paid sums to his adult children and, in particular, to his daughter Ms LL and son-in-law.
Overall his evidence was regularly inconsistent. I consider his evidence to be very unreliable.
The de facto husband was also cross-examined by Mr Baldry on behalf of the intervener, including about the provision of monies to allow her to purchase properties. He denied that there had been any arrangements for the money used to purchase the property for the intervener to be anything other than a gift. He specifically denied that it was to be a loan. When asked about the document prepared for the intervener to arrange to borrow monies, he agreed that he had wanted to show that she had more of an income than she had.
He continued to maintain that the share of the land provided to the intervener was a gift. He denied that the de facto wife ever opposed the arrangement.
When cheque butts for monies, which were drawn and on the face of it paid to the intervener, were shown to the de facto husband, he said that he had not seen them before, he did not know why she was getting these amounts and did not remember seeing them. He was specifically asked if he was aware of any payments by Kellner Brothers to the Australian Taxation Office for the intervener in the years 2004, 2005 and 2006 and he said “No, never”.
In cross-examination by Mr Baldry the evidence of the de facto husband continued to be inconsistent and should be considered unreliable.
During further cross-examination by Ms Farmer, when specific documents were put to him concerning records of the intervener’s loans, he maintained that the money was given to the intervener as a gift and was never intended it to be entered up as a loan.
The de facto wife was cross-examined again in detail about the arrangements with the intervener. In cross-examination she denied that there was any consideration about a gift to the intervener.
The intervener gave evidence. Documents were put to her about the arrangements for the purchase of property and the provision of the $70,000. She agreed in cross-examination that she “went along” with the version of events that the de facto husband had provided. She continued to maintain that the money provided was meant to be a gift.
Her evidence under cross-examination about the discussions that allegedly took place in the presence of the de facto wife were not convincing. When challenged as to the evidence that she gave that coincided with the de facto husband’s evidence (which he had later changed) the intervener maintained that the evidence she had given was her understanding at the time.
Under cross-examination she admitted that some of the information that she had provided she believed to be true at the time, but that she was mistaken. Her evidence also confirmed that the $70,000 which was provided to her was not used to purchase the property but was used to pay other debts.
In summary the evidence of de facto wife and the evidence of her witness were much more reliable than that of the de facto husband and the intervener. The evidence provided by the de facto husband does not explain the whereabouts of funds taken from the business and various accounts. The de facto husband’s failure to disclose the whereabouts of funds or the use to which he has put large amounts of money is significant.

Final submissions

Final submissions by counsel given on 29 July 2015 referred specifically to exhibit 89 which is the schedule of assets and liabilities prepared on behalf of the de facto wife. The parties agreed upon the actual assets and liabilities to be brought into account. The issues that were required to be determined related to the de facto wife’s claim to bring into account the “negative post-separation contribution or wastage/premature distribution” by the de facto husband.
The de facto husband also sought to bring into account disputed debts.
Although the exhibit 89 provided on 27 July 2015 referred to the de facto wife receiving 70 per cent, counsel’s submissions indicated that the removal of some of the items initially disputed, brought about the situation where the de facto wife was now claiming 65 per cent of the net assets.
The orders sought by the de facto wife also included seeking an order that the Court extend the time for the de facto wife to bring proceedings from 7 June 1991 to 17 October 2012.
This apparently dates back to the time of the divorce of the parties. Orders have already been made that the parties were in a de facto relationship from 8 July 1990 until 12 July 2012. The de facto wife commenced proceedings in October 2012.
The provisions of the Act in relation to property settlement between married couples are similar, if not exactly the same, as those in relation to property settlement for de facto relationship couples. If it were necessary to grant the extension of time for the proceedings to be commenced in relation to matrimonial proceedings, rather than de facto property settlement proceedings, I would do so. I consider however that the provisions of s 90SF(3)(r) “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account” provide a basis upon which the facts relating to the assets of the parties at the commencement of their relationship at the time of their marriage and the subsequent contributions and other factors relating to the time between the marriage and the commencement of the cohabitation as a de facto couple can be taken into account appropriately.
In final submissions the de facto wife continued to seek orders which provided for the de facto wife to receive the property at C Street , Suburb D and F Street, Suburb D, that there be a declaration that the intervener had no interest in the property at I Road, Suburb K or in the alternative that she be declared to owe the Kellner Brothers Partnership, the sum of $249,063 as at 39 June 2010 “and continuing”. The de facto wife sought detailed further orders in relation to the payment of funds representing the proceeds of sale of the R Street, Suburb P property and various other orders in relation to debts and personal property.
During final submissions, counsel for the de facto husband, maintained that the orders sought as filed on 8 April 2015 were still the orders sought by the de facto husband. Those orders sought that the de facto husband retain the property at F Street, Suburb D, that he take over the debt owing on that property, that the de facto wife retain the C Street, Suburb D property and take over the debts on that property, that the de facto wife transfer her interest in the I Street, Suburb K property to the de facto husband and the intervener, that they take over the debt in relation to that property, that the M Street, Suburb K property be sold and that after payment of debts (some of which were not agreed) the balance be paid to the de facto husband, that the parties retain the personal assets (most of which were not in dispute) and that the monies standing in the Withnalls Trust Account (being the proceeds of sale of O Street, Suburb P and R Street, Suburb P) be used to pay the maximised overdraft account, with the balance to be divided such that the de facto wife receive 30 per cent of the “total net property for division as between the parties” and the de facto husband receive 70 per cent.
That is a summary of the orders sought which also included paragraph 15:
Such further or other payment (cash adjustment) by one party to the other party, so as to effect an overall distribution as between the parties, so that the Applicant Defacto Wife, [Ms Kellner], is seized of 30% of the total nett property for division as between the parties; and so that the First Respondent Defacto Husband, [Mr Kellner], is seized of 70% of the total nett property for division as between the parties.
Counsel for the intervener provided submissions running into 52 pages. His oral submissions referred to those submissions. These submissions included the reference to the “To whom it may concern” document. His submissions included that it “was most regrettable” that assertions had been made by the intervener in her earlier affidavit. He continued to maintain that the payment of $70,000 was made to the intervener as a gift and in any event that it was vague for uncertainty and, if a loan, was statute-barred.
The orders sought by the intervener continued to seek one-third of the net proceeds of the sale of the I Street, Suburb K property.
The detailed written submissions from the intervener provides various alternatives.
The final orders sought included the following:
(a)That there be a declaration that the intervener has a legal and beneficial interest as to one-third of the I Street property;
(b)That there be a declaration that all monies paid by the de facto husband and the de facto wife to the intervener or on her behalf as recorded in the financial statements of Kellner Brothers loan account be by way of gift.
(c)In the alternative that there be a declaration that the monies recorded in the financial statement of Kellner Brothers that the claim is unenforceable because the loan agreements relevant to those loans are statute-barred.
(d)That there be steps taken to ensure that the intervener receives information concerning the rental of the I Street property and the monies received;
(e)That the I Street property be listed for sale;
(f)That there be interim orders and ancillary orders made which will provide for the intervener to receive one-third of the balance of proceeds of sale;
(g)That there be a declaration that the intervener is not indebted to the de facto husband or the de facto wife.

Findings

As previously indicated the evidence of the de facto wife and her witness is to be considered far more reliable than that of the de facto husband and that of the intervener.
As I accept the evidence of the de facto wife rather than that of the de facto husband and the intervener, there is sufficient evidence to establish that the de facto wife appropriately believed that the sum of $70,000 was being paid to the intervener in return for the intervener transferring her share of the I Street, Suburb K property to the de facto husband and de facto wife. This did not happen. I am also satisfied that the ability to enforce this arrangement, whether by way of contract agreement or advancement is no longer possible due to the Limitation Act 1981 (NT). This does not mean that the Court will not take into account the past arrangements in determining the adjustments of the assets and liabilities of the de facto wife and de facto husband.
Similarly, I accept that the evidence indicates that the indebtedness due by the intervener to Kellner Brothers of approximately $250,000 was appropriately recorded in the loan account. The de facto husband confirmed these debts when he agreed the financial statements for the business. It is not denied that the money and benefits were received by the intervener, but it is asserted that the payments were gifts even though they are shown as a debt in the loan account.
I accept the evidence of the de facto wife that at no time did she intend to make gifts of these amounts to the intervener. The business did not provide gifts. I also accept that the recovery of these amounts may not be possible due to the Limitation Act 1981 (NT), however, the allocation of this indebtedness and the benefit that the intervener has received, is a factor which will be taken into account when considering the necessary factors for an overall adjustment of the assets and liabilities of the de facto husband and the de facto wife.
The intervener remains registered as an owner of one-third of the property at I Street, Suburb K, and because the earlier arrangement may not be enforceable now she claims the benefit of the same on sale or transfer of the property. This reduces what might otherwise have been the de facto wife’s interest in the property from one-half to one-third.
It is therefore just and equitable that the reduction in the de facto wife’s interest and the resulting benefit to the intervener should be taken into account as if it were a liability of the de facto husband rather than reducing the de facto wife’s entitlement.
As previously indicated the evidence has established that the de facto husband has received significant funds for which he has not provided adequate explanation. This includes withdrawal of funds of $60,000 in July 2012 (exhibit 32) and the funds used from the sale of X Street, Suburb K, retained by Bank SA to meet unexplained debts accrued by the de facto husband after separation ($108,700); income received by Kellner Brothers partnership after 2012, but not used to service liabilities of the partnership (amount not known) and other inconsistencies and irregularities in invoices and statements.
I accept that the de facto wife has also paid in excess of $16,000 from her partial property settlement to cover joint liabilities of the de facto husband and de facto wife.
The evidence establishes that the failure of the de facto husband to use the business income to pay the debts when they fell due incurred extra costs and interest payments ($7,201.76 and $62,819).
Assets, liabilities and financial resources

The list of the assets and liabilities which should be brought into account with the values agreed by the parties are set out below. The table (exhibit 89) indicates the assets the de facto wife sought to retain and which the de facto wife proposes the de facto husband retain:

Assets (including superannuation)

Agreed Value

U Street, Suburb V

H

$1,300,000.00

M Street, Suburb K – on the market for sale (estimate after costs of sale)

W

$650,000.00E

C Street, Suburb D

W

$860,000.00

F Street, Suburb D

W

$960,000.00

Motor vehicle 1 …

W

$1,500.00

S Pty Ltd (a 50 per cent share)

W

$Nil

Money in Withnalls Trust Account

W

$26,992.90

Household Contents

H

$20,000.00

Motor vehicle 2

H

$1,500.00

Motor vehicle 3

H

$2,500.00

JJ Pty Ltd and II Pty Ltd interest $800,000 – Orders 17 October 2014

H

W

$400,000.00

$400,000.00

Partial Property Settlement (Para 10(e) of the Orders 14 May 2014 & para 2 of Orders 10 March 2015)

H

W

$100,000.00

$100,000.00

I Street, Suburb K (total $678,000)

(one-third claimed by intervener)

W

$678,000.00

Host Plus Superannuation member number …

W

$42,708.00

Total Assets ($5,543,200.90)

W

H

$3,719,200.90

$1,824,000.00

Liabilities

Bank SA Account …

W

$179,915.00

Bank SA Account …

W

$299,999.00

Bank SA Account … – Mr Kellner and Son Pty Ltd

W

$364,351.00

ANZ Account … for I Street (possible one-third owed by intervener)

W

$241,133.00

Total Liabilities:

W

$1,085,398.00

Net Assets

$4,457,802.90

The provisions of s 90SB have been satisfied in that the parties were in a de facto relationship for more than two years. The orders of the Federal Circuit Court concerning these issues were made by Judge Harland on 17 December 2013.
The geographical requirements have also been met as is indicated by Judge Harland’s orders.
Taking into account the separation of the parties and the dispute arising as a result of the de facto husband and de facto wife’s involvement in the business and jointly held properties, it is in these circumstances just and equitable to make an order.

Contributions and s 90SM(4) factors

(a)Financial contributions the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;

whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;

whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent;

It was accepted by the parties that at the time of the commencement of the relationship the de facto husband owned the unit at FF Street, Suburb GG and an interest in the business known as Kellner Brothers. It is also accepted that the de facto wife had no property of value. In his final submissions, counsel for the de facto husband drew attention to the long de facto relationship and submitted that the parties’ contributions should be considered “somewhat equal for the full duration of the relationship”. It was conceded that if the Court took into account the de facto wife’s non-financial contribution in assisting the de facto husband care for his children during the relationship that that should be simply “offset against the greater initial contribution of the de facto husband”.
Counsel for the de facto wife submitted in final addresses that the de facto wife does not accept that the contribution of the de facto husband at the beginning of the relationship should be considered as $90,000 due in particular to the amount later paid to his former wife (a payment of $67,300). In final submissions the de facto wife’s position was that the contributions, both financial and otherwise, to the time of separation of the parties should be considered equal.
Taking into account the length of the relationship prior to separation and the contributions of both parties to the business and to the household (including the de facto wife’s contribution to assisting the de facto husband in the care of his young children from the previous relationship and the payments of the de facto husband to his first wife) I am satisfied that it is appropriate, just and equitable to consider the contributions, both financial and otherwise, of the parties up to the time of separation as equal.
There is however the need to consider the contributions since the separation. In particular, in this regard the Court takes into account the failure of the de facto husband to pay debts and outgoings from the income he was receiving thus incurring further additional interest and costs. It is also appropriate to consider the significant depletion or unexplained use of substantial funds by the de facto husband.
These matters are taken into account when considering the factors in s 90SM(3).

(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship;

The sale of the properties or the transfer of the properties proposed by either the de facto husband or de facto wife do not have any impact upon either party’s earning capacity.

(e)the matters referred to in subsection 90SF(3) so far as they are relevant:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship;

The de facto husband is aged 70 and the de facto wife is aged 61. Although the de facto husband might be considered to have more health issues than the de facto wife these were not significant.

(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

I accept that the de facto wife has qualified for a builder’s licence and has the capacity to earn an income running a business. Similarly, although the de facto husband maintained that he was retired, he has continued to assist in the building business. Taking into account his age however, I find that the de facto wife has an ability to engage in appropriate, gainful employment or business for a longer period.
Subsections (c) and (d) are not relevant

(e) the responsibilities of either party to support any other person;

The de facto wife has no responsibility to support any other person.
The de facto husband has a young child with his current wife. His evidence concerning his role in caring for the child was limited and unsatisfactory. It would not be appropriate to find, based on the evidence I have heard, that he has any significant role in the care and control of the child although he will have an obligation to provide financially for the child in the future.
The de facto husband’s evidence concerning his present wife’s financial circumstances was almost non-existent. It is assumed however that he would have the responsibility to support her if she were unable to support herself. This should not however be a significant factor due to the lack of information provided to the Court about his current wife’s financial circumstances and any capacity she has to support herself, the de facto husband and their child.
Subsection (f) not relevant.

(g) a standard of living that in all the circumstances is reasonable;

Both parties have sought to maintain a similar standard of living. This factor does not require any adjustment.
Subsections (h), (i) and (j) are not relevant.

(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

The de facto wife’s commitment in the past to assisting the de facto husband in the operation of the business has also provided her with the experience and background to enable her to earn future income as a builder.
The de facto husband’s earning capacity has not been affected.

(l) the need to protect a party who wishes to continue that party’s role as a parent;

The de facto husband did not indicate any wish or need to forego any of his building activities because of his obligation as a parent to the young child with his current wife.

(m)if either party is cohabitating with another person – the financial circumstances relating to that cohabitation;

As previously indicated the de facto husband did not provide any reliable evidence concerning the financial circumstances relating to his cohabitation with his present wife and young child. It is therefore difficult to bring into account this factor.
Subsections (n), (o) and (p) interrelate with the decision to be made in relation to property settlement factors.
Subsection (q) is not relevant.

(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

This is a significant factor in this matter.
The failure of the de facto husband to account for substantial sums and the significant monies which have been withdrawn and are unaccounted for (and the funds paid to the intervener which are now not recoverable) require a significant adjustment in favour of the de facto wife.
The de facto wife sought an adjustment of 15 per cent. The de facto husband maintained that there should be no further adjustment.
Whilst the de facto wife has not established all of the alleged “addbacks” I am satisfied that the de facto husband has failed to adequately explain significant withdrawals from the accounts, the use of funds and the basis upon which additional interest and costs were incurred.
The evidence clearly establishes the basis upon which there should be a significant adjustment under s 90SF(3)(r) due to the failure of the de facto husband to explain the use of the monies received and the failure to maintain payment of liabilities since the separation.
The de facto wife sought to keep assets worth $3,719,201 less liabilities of $1,085,398 bringing net assets and liabilities to be retained by the de facto wife of $2,633,803. She also sought a further payment of $226,000 from the de facto husband. This would provide the de facto wife with $2,859,803 of net assets which is approximately 64 per cent of the net assets of $4,457,803.
The I Street, Suburb K property is included above as an asset of the parties without taking into account an amount which would be payable to the intervener.
Considering the significant loan account monies which are now not enforceable against the intervener (in excess of $240,000) there is an appropriate basis to consider the calculations as if the I Street, Suburb K property was an asset of the de facto husband and de facto wife on the basis that the de facto husband should remain liable for the payment to the intervener of one-third of the net value of I Street, Suburb K property which will release the de facto wife from any liability.
The calculations which have been made above are on the basis that the de facto husband and de facto wife are entitled to the whole of the I Street, Suburb K property. The Court is satisfied that there were substantial monies paid by Kellner Brothers to the intervener which were classified as loans but may not be recoverable. Because it is necessary for the intervener to be paid her portion of the net value of the I Street, Suburb K property it is just and equitable in all of the circumstances that the de facto husband bear responsibility for the payment to the intervener of her share.
One-third of the net value of the I Street, Suburb K property is $145,622. The orders will therefore provide for the de facto husband to pay to the intervener the sum of $145,622 within thirty days. The orders will also provide for the de facto husband and intervener to execute documents to discharge the loan over the property and transfer the property to the de facto wife.
The de facto wife is hereafter to be the sole owner, both at law and in equity, of the I Street, Suburb K property and responsible for the other debts in relation to that property.
It will also be appropriate to make an order that the Registrar execute the necessary documents if the de facto husband and intervener fail to comply with these orders.
The transfer to the de facto wife of all the legal and equitable right to the I Street, Suburb K property is not conditional upon the payment by the de facto husband to the intervener. Any claim the intervener has or had against the de facto wife is transferred to now be against the de facto husband only.
Subsections (s) and (t) are not relevant.
If both the de facto husband and de facto wife were considered responsible for the payment to the intervener of her one-third share interest in the I Street, Suburb K property, this would reduce the net assets available for distribution by $145,622. This would leave the net assets at $4,312,181 ($4,457,803 minus $145,622). Taking this into account it would be just and equitable for there to be an overall distribution to the de facto wife of 66 per cent of this net figure which would bring about an overall allocation to the de facto wife of $2,846,039. Taking into account the assets she sought to retain at $2,633,803 this would leave an amount of $212,236 payable by the de facto husband to the de facto wife.

Conclusion

The orders that the de facto wife sought in relation to retaining certain properties (including the C Street, Suburb D, F Street, Suburb D and the I Street, Suburb K properties) together with personal property items and her superannuation are orders which are just and equitable.
The de facto husband will retain the U Street, Suburb V property worth $1,300,000 and personal property.
If the orders in relation to the intervener were not considered the transfer of the properties sought by the de facto wife to her on the basis that she takes over the Bank SA and ANZ liabilities, together with a payment of $226,000 from the de facto husband provide the de facto wife with approximately 64 per cent of the net assets. As previously indicated this does not take into account the monies which the de facto husband is also required to pay to the intervener. This significantly reduces the net assets to be retained by the de facto husband ($1,824,000 less $145,622). However the monies previously paid to the intervener in excess of $240,000 may not be recoverable. This significantly reduces the assets available to the de facto husband and the de facto wife.
If the debt to the intervener is taken into account as representing her one-third interest in the I Street, Suburb K property and the de facto wife were to receive 66 per cent of the net assets of the parties, this would require the de facto husband making a payment to the de facto wife of approximately $212,000.
Taking into account all of the necessary factors it is just and equitable for the de facto wife to retain the assets which she sought to retain, that the de facto husband pay a further $212,000 to the de facto wife and that the de facto husband meet the payment due to the intervener.
For the above reasons I make the orders which are set out at the commencement of these reasons.

I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 8 April 2016.

Associate:

Date: 8 April 2016

[2016] FamCA 216

8 April 2016

Key Legal Topics

Areas of Law

Family Law

Property Law

Tax Law

Legal Concepts

Injunction

Remedies

Costs

Assets (including superannuation)	Agreed Value
U Street, Suburb V	H	$1,300,000.00
M Street, Suburb K – on the market for sale (estimate after costs of sale)	W	$650,000.00E
C Street, Suburb D	W	$860,000.00
F Street, Suburb D	W	$960,000.00
Motor vehicle 1 …	W	$1,500.00
S Pty Ltd (a 50 per cent share)	W	$Nil
Money in Withnalls Trust Account	W	$26,992.90
Household Contents	H	$20,000.00
Motor vehicle 2	H	$1,500.00
Motor vehicle 3	H	$2,500.00
JJ Pty Ltd and II Pty Ltd interest $800,000 – Orders 17 October 2014	H W	$400,000.00 $400,000.00
Partial Property Settlement (Para 10(e) of the Orders 14 May 2014 & para 2 of Orders 10 March 2015)	H W	$100,000.00 $100,000.00
I Street, Suburb K (total $678,000) (one-third claimed by intervener)	W	$678,000.00
Host Plus Superannuation member number …	W	$42,708.00
Total Assets ($5,543,200.90)	W H	$3,719,200.90 $1,824,000.00
Liabilities
Bank SA Account …	W	$179,915.00
Bank SA Account …	W	$299,999.00
Bank SA Account … – Mr Kellner and Son Pty Ltd	W	$364,351.00
ANZ Account … for I Street (possible one-third owed by intervener)	W	$241,133.00
Total Liabilities:	W	$1,085,398.00
Net Assets	$4,457,802.90