Kirkland and Kirkland - [2008] FMCAfam 1172

FEDERAL MAGISTRATES COURT OF AUSTRALIA

KIRKLAND & KIRKLAND

[2008] FMCAfam 1172

FAMILY LAW – Property – division – significant passing of time from separation to institution of proceedings – significant changes to the financial situations of the parties – both parties having acted in accordance with an informal agreement – consideration of recollection of each party and of credibility of each party’s evidence – specific consideration of a just and equitable settlement in the special circumstances of the matter.

Family Law Act 1975 (Cth), ss.75(2), 79(1),(2), (5)

Applicant:

MS KIRKLAND

Respondent:

MR KIRKLAND

File Number:

TVM 3170 of 2004

Judgment of:

Coker FM

Hearing dates:

20 November 2007, 3 & 4 July 2008 & 14 August 2008

Date of Last Submission:

14 August 2008

Delivered at:

Townsville

Delivered on:

31 October 2008

REPRESENTATION

Counsel for the Applicant:

Dr Sayers

Solicitors for the Applicant:

SR Wallace & Wallace

Counsel for the Respondent:

Mr Fellows

Solicitors for the Respondent:

Macrossan & Amiet

ORDERS

AS AND BY WAY OF FINAL PROPERTY SETTLEMENT:

The Wife receive an amount of $55,000 plus any interest accrued on that amount from the moneys held in the trust account of the solicitors for the Husband.
The Husband receive the remainder of the moneys plus any interest accrued on that amount from the moneys held in the trust account of the solicitors for the Husband.
Each party retain as their own property absolutely, all real property, bank accounts, insurance policies, superannuation entitlements, furniture and contents, shares, personal effects or other assets currently in the possession, power or control of that party, which assets shall from the date of this order become the sole and absolute property of that party currently having the possession, power or control of such assets.
Each party indemnify and keep indemnified the other in respect of any liability attaching to property retained by them.
Each party have liberty to apply within 28 days of the date of these orders for clarification of any order herein or in respect of the issue of costs.

IT IS NOTED that publication of this judgment under the pseudonym Kirkland & Kirkland is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
TOWNSVILLE

TVM 3170 of 2004

MS KIRKLAND

Applicant

And

MR KIRKLAND

Respondent

REASONS FOR JUDGMENT

I must say at the outset, that I have found this one of the most difficult matters to determine that I have ever had before me. It relates, not only, of course to issues in respect of the distribution of property between the parties to the proceedings, Ms Kirkland, whom I shall refer to as the wife, as the applicant, and Mr Kirkland, whom I shall refer to as the husband, as the respondent but it entailed also, real assessments of the credibility and character of the witnesses called, as well as perhaps unfortunately, some requirements that the Court, as best it can, piece together the limited information that was available in relation to the proceedings.
The reasons for that last difficulty in relation to the matter will become more obvious as the reasons are given in respect of the proceedings, but suffice it to say, that both the husband and the wife had limited recollections, in many instances, of the financial dealings and transactions that they had with each other and that, of course, led to confusion and, unfortunately to a significant degree, a lack of trust that each had, in relation to what the other said, with respect to the proceedings.
The application was commenced by filing of an application for final orders by the wife on 16 March 2006. That application was in fact filed initially in the Family Court, but quite early on was transferred to this Court for determination. The orders that were sought by the applicant were in these terms:
(1)That the husband provide to the wife or her solicitors a full accounting for his interest in the real property known as the [K] subdivision at [W] via Mackay in particular details of the following:
(i)all amounts of commission paid to him by Mr R in respect of sale of lots within the [K] subdivision, [W];
(ii)full particulars of any real property transferred to the respondent by Mr R in lieu of payment of commission for sale of lots in the [K] subdivision;
(iii)any consultancy fees paid to the respondent by Mr R in respect of the respondent’s interest in the [K] subdivision.
(2)That leave be granted to the applicant wife to amend her application after the process of discovery has been completed.
(3)That the property and financial resources of the parties be divided as to 60% to the wife and as to 40% for the husband.
(4)Such other order as the Court deems necessary.
The husband's response was filed on 28 April 2006. The orders sought by him were very short in compass. They were in these terms:
(1)That each party retain such items of property as is in their respective possessions and indemnify the other in respect of any indebtedness attaching thereto.
The parties then progressed over the next 18 months or so to an initial hearing, which commenced in Mackay on 20 November 2007. Unfortunately, at that time, the matter was unable to be completed because of difficulties that arose in relation to one particular aspect of the evidence and it is one of those matters to which I have already referred, being a distinct difference in the recollection of each party of a matter or point significant in respect of the determination of the matter.
The wife's position in relation to the matter and to how she said it should be resolved became more refined as the matter progressed to trial. In fact, in the outline of case document, which was provided to the Court at the commencement of the hearing on 20 November 2007, the final orders that were sought by the wife were detailed as follows:
(1)That the wife be absolutely entitled to retain the following:
(a)Shop 4 at Property V, North Mackay                   $135,000.00
(b)[U] business proceeds  $ 83,000.00
(c)Property S proceeds      $ 54,266.00
(d)Holden Berlina  $ 15,000.00
(e)Two boats  $ 17,500.00
(f)Superannuation with Colonial  $ 46,000.00
(g)Lot 11 Property F  $150,000.00
(h)½ share of Property M  $147,500.00
(2)That the husband be absolutely entitled to retain the following:
(a)     Property A & Property B proceeds                     $135,000.00
(b)     Property S, proceeds  $ 54,266.00
(c)     Mazda utility motor vehicle  $ 20,000.00
(d)     Boat  $    2,500.00
(e)     Superannuation [Mr Kirkland] Super Fund $158,278.00
(f)         Part proceeds of Property T received            $212,500.00
(3)That the balance of proceeds of sale of the property at Property T in the sum of $200,000.00 be distributed as follows:
(a)     the payment to the wife of the sum of $200,000.
The husband's position remained unchanged from that which was generally set out in the response of 28 April 2006. There was, however, a little more specificity in relation to exactly what the husband proposed, in that the minute of final order that was sought by him, and which continues to be sought by him right up to now, was in these terms:
(1)(a)That pursuant to section 78 of the Family Law Act 1975 (as amended) and unless otherwise provided herein each party is hereby declared to be the sole and absolute owner, in law and in equity, of all items of personalty, chattels, furniture and furnishings, motor vehicles, jewellery and bank accounts now in that party’s possession or control and of any contribution or entitlement arising from membership of any superannuation fund whether such entitlements are present, contingent or expectant.
As I say, there were many difficulties in relation to this matter and, not the least of those, arose from a situation, which came about during the first day of the hearing, on 20 November 2007. It related to the document, which was annexure 10 to the trial affidavit of the husband filed 29 August 2007. That document, ‘LK10’, gave rise to significant dispute between the parties. The husband, in his affidavit of 29 August 2007, says the following, half way through paragraph 21:
On 4 January 2002 I paid to the applicant an amount of $125,000, which the applicant had worked out as being owing to her at that time. Annexed hereto and marked ‘LK9’ is a copy of the worksheet provided to me by the applicant at the time that I made that payment. It was also my understanding that the applicant and I had reached agreement on the distribution of property between ourselves, which was evidenced by a written acknowledgement dated 27 October 2001. Annexed hereto and marked ‘LK10’ is a true copy of the acknowledgement, which was signed by both the applicant and myself.
Those two documents, and in particular ‘LK10’, was the subject of considerable dispute between the parties. It set out, not comprehensively, but at least to some significant degree, the assets that were owned by each of the parties, exclusive, it was emphasised in submissions, of certain chattel items and superannuation or other entitlements, but with detail, the real property entitlements of the parties as well as some cheque accounts, being particularly the [Kirkland] Realty Cheque Account, as well as interests in motor vehicles. The document, ‘LK10’, was at the end of the document noted as follows:
Mr Kirkland and Ms Kirkland both agree to the above this date 27 October 2000.
It is unclear whether in fact it is 2000 or 2001, because the final figure in the year is unclear, but it is certainly agreed that it was a document which was entered into, either in October 2000 or October 2001, and of course, both of those dates precede the actual date of separation of the parties. The issue that arose in relation to the matter was that the wife simply denied any real knowledge at all of the document and denied specifically that it was her signature on the document.
The wife was specifically questioned in relation to that particular area of concern. She indicated that the document was not known to her and that, whilst the signature was very like her signature, she has no recollection, she said, of having signed the document.
I have been assisted in this matter by the provision of a copy of the transcript relevant to that particular aspect of the matter. The transcript refers to the series of questions, that were directed to the wife by counsel for the husband.
Repeatedly, the wife indicated that the signature was not hers. She says, for example, at various parts of pages during the transcript the following:
Did you sign or write your name on that document?---No.
Later on:
Would you agree that until this afternoon you have never alleged that that is not your signature on the document?---I have told [name omitted] that it's not my signature.
I take it you didn't tell Mrs P it wasn't your signature?---Yes, I did tell Mrs P.
All right, and you say that you told your solicitor that it was not your signature?---Yes.
A little later:
When the document was finished you signed the document?---No, because I wouldn't have agreed to it.
And I put it to you, ma'am, that you signed the document. Do you agree or disagree?---I disagree that I signed the document.
The fact was that there was, impliedly at least, a suggestion that the husband had in some way falsified the document. It became such a heated and contested issue in relation to the matter that it was the subject of lengthy argument by counsel in relation to what course should be followed in respect of the hearing. Counsel for the husband said that it was an issue that went directly to the question of credibility of the parties and that the case would, to a very significant degree, turn on issues of credibility.
For that reason it was sought, on behalf of the husband, that the application should be adjourned and that a document examiner should be commissioned to do the examination of the document. It was contended more specifically, that the Court could not simply attempt to make a determination on continued evidence as to whether or not the document was legitimate or, in fact, some form of forgery. It was submitted, very strongly therefore, that the matter should not be dealt with as, "Amateurs might deal with it", but rather that there should be the use and utilisation of scientific and expert evidence, if it were available.
Counsel for the wife argued that that was entirely unnecessary in respect of the matter and that, whilst the document was before the Court, it would simply be a matter that could properly be the subject of submissions and determinations as to credibility. In any event, it was submitted on the part of the wife that it would be ludicrous to delay the hearing and that there should be further consideration of what evidence existed in relation to the matter.
In the end, however, it was acknowledged by counsel for the wife that the issue of credibility loomed large in relation to this matter, and that if that was the case, in an adversarial system, whilst cross-examination is at large, it was noted that it was not possible to cross-examine the parties in relation to the document, other than to get either a positive or negative response in relation to whether this document was a legitimate document or one that had been brought about by some fraud or forgery.
Therefore, it was determined that the appropriate course to follow would be for the trial to be adjourned and for orders to be made with regard to the preparation of an expert examination and assessment of the document and of the signature attaching to the document and, certainly in the first instance, it was required that the husband would be called upon to pay any costs associated with the preparation of such a report. As a result of that adjournment and the need for there to be an expert assessment in relation of the signature, the matter was held over for some six months or more.
Eventually, however, it came back before the Court with various other evidence called. In particular, there was a lengthy affidavit and report by Mr H. Mr H, a forensic document examiner, gave lengthy written evidence in relation to this matter and his report, annexed to his affidavit of 10 April 2008, addressed his determination in relation to this particular matter. In the end, Mr H found in his report under the heading, "In Summary”, the following:
There is an abundance of evidence present to conclude that the questioned signature "Ms Kirkland" was written by the author of the provided specimen signatures - Ms Kirkland and a singular lack of evidence present to suggest authorship by another writer.
In other words, it was finally concluded, and I might add quite properly then accepted by the wife, that the signature on the document was in fact, her signature. The position taken by the wife, however, did not really change very much in that, although she acknowledged that that document may have come into existence and have simply been forgotten by her, she remained adamant that it was not a situation where the document, in any event, reflected a settlement that had been agreed between the parties, if there were any settlement.
She emphasised, through her counsel, for example, that it failed to take into consideration or to include specifically a number of other assets, that might properly have been the subject of division between she and the husband, including, for example, superannuation entitlements, chattel items and the like.
Whilst Mr H was not called in relation to this matter, I of course, accept his evidence in that particular regard.
I should note also before addressing evidence in relation to the parties and their witnesses, that evidence was also taken from the wife's medical practitioner as well as various other evidence produced, as to valuations in relation to properties.
In that regard, I was provided with copies of affidavits and accompanying valuations under the hand of Ms L, a registered valuer employed by [H] in Mackay and Mr W, a registered valuer, again from [H] in Mackay. In those valuations evidence was given as to the value of properties situated at Property T and also Property M, Mackay. Neither Ms L nor Mr W was required for cross-examination and I accept their evidence in relation to the values, as placed by them on the properties that they attended at, for the purposes of valuation.
As I indicated, it was also the case that medical evidence was produced in relation to the health of the wife. Dr V, a doctor in private practice, but also employed by Queensland Health in Mackay, provided evidence as to the state of health of the wife. It was unfortunately the case, that since the matter was first before the Court, the wife had been diagnosed with two breast cancers within her left breast. It was indicated that the wife was undergoing radiotherapy and that there were therefore real difficulties at the time, in relation to her continued employment, both because of the requirement that she undergo radiotherapy in Townsville and therefore was required to be absent from Mackay for various periods, as well as, of course, the fact that the wife experienced real concerns in respect of her day to day health, as a result of the effect of the radiotherapy.
Dr V was not called in relation to this matter, but gave evidence in relation to future prospects with regard to the wife, which I accept. At page 2 of her report dated 5 June 2008, Dr V says the following:
I expect that Ms Kirkland would not be able to earn her usual wage until her chemotherapy and radio therapy are completed as even reduced working hours or days of sick leave when she was unable to work will certainly impact her earning capacity. However, once she has completed her chemotherapy and radiotherapy she should be able to return to her usual employment including the usual number of working hours.
It is, of course, to be hoped that that will be the case and certainly the only evidence that is available at that time is that the wife will be able, in due course, to return to work, but at the present time there is a limitation on the work that she is able to perform and, of course, therefore the income that she is able to earn.
As is often the case in relation to proceedings before this Court, the prime evidence in relation to proceedings relates to the evidence of the parties. But I also had the opportunity of considering the evidence that was given by the wife's daughter as well as by Mr R.
I will firstly address aspects in relation to that evidence before commenting more fully and specifically upon the evidence of the parties. In relation to the evidence of the wife's daughter, Ms K, I note the following. The evidence given by Ms K was not generally what might be considered her own specific recollection of evidence given or of circumstances in relation to this matter, but was more, as she put it, a recitation of information that had been provided to her by her mother.
It was certainly, of course, accepted that Ms K experienced certain difficulties relating, not only to the fact that she had unfortunately been involved to a significant degree in the drug culture in the past and that that may have had a significant effect upon her personal recollection of various matters, but also was influenced by the fact that, when her affidavit of 5 July 2007 was sworn on 18 May 2007, it was the case that Ms K was at that time incarcerated as a result of prior activities on her part.
However, when cross-examined in relation to the proceedings before the Court, when this matter came back on 3 July 2008, Ms K had been released from prison. I thought Ms K was, as far as could be expected, an honest witness, but her honesty, in fact to some extent, was her downfall in relation to assisting the wife’s case in this matter. It was clear when she was cross-examined, for example, that she had detailed figures and recollections in her affidavit which she obviously did not specifically recall.

When questioned about the purchase price of the property at Property M, or other factors in relation to moneys advanced by her mother, to assist in relation to the purchase, notwithstanding that such figures were detailed within her affidavit, Ms K had little, if any, recollection.
Her repeated answer in relation to very many of the questions relating to the figures associated with the purchase of the property were to this effect:
I don't really know.
She acknowledged that many of the details that were included within her affidavit, came from information provided to her by her mother and when she actually attempted to recall a specific figure, in relation to moneys repaid to her mother, she, having said it was $83,000, was unable to recall that in her affidavit sworn previously, she had indicated that it was a figure closer to $72,000. Her only response in relation to that particular aspect of the matter was that she was terrible with numbers.
She said, however, that what she did recall had been set out in the letter and that the letter that she wrote was the truth, in relation to the assistance that was provided by her mother in relation to this particular purchase. I must say that I generally accept that that is the case, however, I am unfortunately not sure that much could be drawn from the evidence of Ms K. For example, she was, I thought, less than a convincing witness in relation to any evidence that was given with regard to the subdivision of property abutting the Property M property, which is now referred to as, the Property F property.
In questions directed to her by myself, for example, she acknowledged that the Property F property was owned by her mother, that it had been conveyed to her because of a loan or advance that had been given by her mother to her of $40,000 for renovations and otherwise, but then was hard pressed, or in fact totally unable, to explain how the situation continued to be that the whole of that property was transferred to her mother, but that a one half interest in the Property M property continued to be held by the wife, rather than as appears to have been intended, or certainly indicated as intended, to be transferred back to her.
I must say that I felt somewhat sympathetic towards Ms K in relation to this particular matter and to the evidence that she was called to give. Her circumstances have changed, one would hope for the better, since her incarceration, but she was put in a position where she was being called upon, to remember very specifically, issues in relation to the purchase of a property, when she clearly had no real recollection whatsoever of those particular issues or of the financial arrangements that were put in place. I was little assisted, therefore, in relation to the determination of this matter with regard to the evidence of Ms K.
I turn then to the evidence of Mr R. Mr R is a farmer and developer and also has a family relationship with the husband in these proceedings. I must say that I was most impressed with Mr R in relation to the evidence that he gave. His affidavit of 4 September 2007 gave, I thought, a precise explanation of issues in relation to arrangements to sell and assistance provided prior to sale of the development known as "[K]".
Mr R was adamant that assistance had been paid for at various times, with regard to what he referred to as consultancies provided by the husband and that there were arrangements, in relation to the payment for those consultancies, as well as for commission on the sale of various blocks of land. It appears clear that there was a close relationship as between the husband and Mr R, but that there was also a degree of commercial reality in relation to their dealings with each other.
I gained the distinct impression that there was a real trust, certainly held by Mr R in the husband and that there was no suggestion whatsoever that Mr R's evidence in relation to any of the transactions, including any of the issues with regard to the commission paid in relation to sales, was anything other than precise and accurate. I would assess that Mr R was, what might be called an unsophisticated man. He described himself in his own evidence as a farmer, but also, I thought, a very honest and down to earth character.
I believe Mr R in relation to the evidence that he gave in relation to these proceedings. In particular, I accept that the arrangements which were put in place, which resulted in a partial payment of commission, as well as a transfer to the husband of a block of land, was done at what could best be described as, an arm's length transaction and that there was no underhand dealings as between the parties and certainly no payments received by the husband, which were not able and properly to be paid to and received by the husband and that, where payments were previously made, they were made in the appropriate form to the husband, to the wife or to their company.
I am not at all satisfied that there were other moneys paid by Mr R or received by the husband and I am more than satisfied that there is no further financial relationship between Mr R and the husband which would in any way be reflecting entitlements that might fall upon the wife. As I say, I was most impressed with Mr R and accept, without hesitation, the evidence that he gave in relation to matters involving he and the husband. Where Mr R denied, as did the husband I might add, that there was no further projects or activities currently being arranged by both of them together, it was clear that that was the case.
In fact, Mr R's evidence in relation to the current situation with regard to any developments on his part, was that he is, as he put it, "Trying to do the extra things now" himself but he could not say that if the situation arose, he might call upon the assistance of the husband. I found Mr R to be meticulously honest and accept his evidence in relation to the situation that existed between he and the husband without hesitation.
I turn now to the evidence of the parties themselves and, as I indicated, I struggled in part with some of the issues that arose in relation to this matter. It would be to some degree a gloss over, to suggest that the document ‘LK10’ was not relevant, in relation to these proceedings. Both the husband and the wife suffered, as was submitted by counsel for the husband, from a difficulty in, "Remembering events from 10 or more years ago", however, where there was a requirement to consider issues in respect of credibility and the legitimacy of the recollection of each of the parties, I must say, that I was far more inclined to accept the evidence of the husband, than of the wife.
I say that, notwithstanding that the wife's evidence in relation to this matter was given in two parts, some seven or eight months apart from each other, and that at least in the second instance, where evidence was given, the wife was clearly suffering from the effects of both chemo and radiotherapy. I must say, however, that the wife's evidence in relation to many issues that was given was troubling. I found the wife less than convincing, for example, in relation to the moveable feast, if I can describe it that way, that seemed to relate to the financial contributions of both of the parties to the joint activities of the couple, as well as to, in particular, the varying amounts that the wife says were owing to her in relation to advances to the husband and their joint dealings.
It was emphasised, for example, that in the initial dealings that the parties had with each other in relation to finalising their marriage, the wife firstly made no claim in relation to any moneys that might have been outstanding. The figures, however, changed over time and there were increases to $20,000 and further increases, which led eventually to a calculation made by the wife, that she was owed, because of assistance provided directly by her to the husband, an amount of $55,000.
However, the wife additionally made claims which totalled $200,000, it being the case, that in the final orders sought by her she sought the retention of various assets, as well as the balance of the sum of $200,000 which is currently held in the trust account of the husband's solicitors, by way of a payment of the entirety of that amount to her. That came about, it was said, because of the $55,000 plus accrued interest but, also as a result of what the wife contended were non disclosures of commissions received in respect of the sale of various blocks of land in the [K] development, as well as the wife's contention that there was a determined effort on the part of the husband to sell, in particular, the Property T property, for an amount significantly less than what it was deemed to be worth.
The husband sold that property some time ago for an amount of $416,000. However, the wife was of the view that the property was worth considerably more than that, contending that it should have been sold for an amount of at least $490,000 and that she had a valuation in that regard, in relation to the property. The wife also indicated particularly, that she would have been willing to have paid up to $460,000 for the property, because it would have been a, "Bargain".

Of course, the fact was that she had no such capacity to purchase in relation to that property.
As I say, I had real difficulties in relation to many of the matters that were raised on the part of the wife. Not only were there, of course, issues that gave rise to concern in respect of the sale of the Property T property and other issues in respect of commissions, if they were or were not received, but I also, as I have indicated, had concerns as to the real legitimacy of the wife's evidence in relation to such matters. In particular, one cannot avoid the fact that the wife did apparently sign the document in October of either 2000 or 2001, but denied any knowledge of it.
The relevance, of course, is the fact that it was well before the matter came to trial, that that particular aspect of the proceedings and the reliance placed by the husband upon that document came to light, but it was not until hearing that it was contended that it was not a legitimate or genuine document, reflecting the position of the parties.
More particularly, however, I gained the distinct impression that the wife was very much engaged in exaggeration in respect of any contribution made by her to the relationship, either at the commencement of the relationship or during the relationship, and unfortunately, significant minimisation of values, in relation to any contribution made by the husband.
In that regard, particular emphasis was placed upon the Property V property and the apparent enormous increase in value from what the wife purchased the business and property for, to what she said it was worth, only a matter of some seven or eight months later. The wife set out to explain that by a number of considerations, including purchase of plant and equipment and other steps involved in the utilisation of the Property V property, including particularly the subdivision of the property.
However, it became obvious in evidence, that many of those matters that the wife relied upon occurred significantly after the time that the parties had commenced their relationship one with the other and, more particularly, that many of those changes in circumstances had come about directly as a result of involvement and work or contribution, made by the husband. I was troubled in the extreme by that particular aspect of the matter and certainly am not willing to accept that the value of the property, as contended by the wife, was about $380,000, rather than the purchase price only some six or seven months prior, of $228,000.
Even if, as the wife had said, certain works were done within the properties, including in particular, the cleaning and re-establishment of the mixed business, there is no evidence whatsoever, that that would have in any significant way increased the value, to the extent that the wife contended. Of course, the real factor that arises in that regard, is that there was no evidence whatsoever of what might have been attributable to increases in trading profitability or otherwise of the business, other than the general statement made by the wife as to a new figure of $380,000 which, of course, related in a significant amount, to works or steps taken subsequent to the relationship being commenced between the parties.
The wife, in particular, sought to rely upon works that had been provided in relation to renovation of the property, but much of the evidence, when it finally became available in respect of such issues, showed that both the business books and accounts that were produced, all related to work that was either paid for or certainly commenced after the parties had begun their relationship. It was clear also, that when a more thorough investigation was done in relation to various log books and other records that were kept, that much of the work that was referred to as having increased value, occurred in 1996 and certainly considerably after the commencement of the relationship.
As I say, I was troubled therefore by significant aspects of the evidence by the wife and, as I indicated at the commencement of any comments relating to the husband and the wife, I was more inclined to accept the evidence of the husband where it was in contradiction or different to that of the wife.
I turn now to the evidence of the husband in relation to this matter. As is perhaps obvious, I was generally impressed with the evidence given by the husband in the proceedings and certainly found that his truthfulness, or at least basic recollection of circumstances, was certainly clearer than that of the wife.
I accept, as appears evident from the testimony of both parties, that even before the marital relationship between the parties commenced, they were working together in relation to various developments. It appears clear that their practise was to lend money one to the other and for funds to move between the accounts of the husband or the wife, in relation to various developments or projects that they were both involved in. It appears that for some years, the parties, relying primarily upon the calculations of the wife, transferred funds as between the accounts of the husband or the wife and that the husband accepted categorically that the wife's statements in relation to what might or might not have been owing by one party or the other, was a genuine assessment of moneys that had moved between the two households.
In that regard, however, the husband's honesty led me to a consideration of whether the entirety of any moneys that might have been transferred between the parties' respective accounts, was a complete reflection of what was owing by either the husband to the wife or the wife to the husband. In that regard, as I commented previously, the husband's affidavit filed in relation to this matter on trial, referred to a payment being required to be made by the husband to the wife, of an amount of $125,000.
As the husband said in his affidavit and already referred to by me, as a result of that, he paid to the wife a sum of $125,000 on 4 January 2002. However, it appears also to have been clear that there was, to some degree, a miscalculation and the husband in his own evidence, accepted that it would appear from the figures that were given, that the wife had, over time, lent to the husband a total of $220,000, repaid at various times, but that the husband had, on the best figures available, only repaid to the wife a sum of $200,000.
The husband accepted, that if that was in fact the case and he did not personally recollect all of the figures, then there was, on his best guess, a sum of $20,000 owing to the wife. The husband's own annexure, ‘LK9’, to the affidavit of 29 August 2007, does reflect that there were advances of $220,000 and that if that were the case, then there was a shortfall. The husband did not specifically acknowledge that there had only been partial repayments, but certainly acknowledged that if the wife's figures indicated a shortfall, then he would accept that that was the case.
It is a difficult situation in relation to this matter, because in excess of six years ago the husband, relying upon the wife and her statement as to what was owed in relation to the matter, namely $125,000, effected a payment to the wife in that sum. The husband says that that document annexure, ‘LK9’, to the affidavit of 29 August 2007, came into existence at around about the same time as the document annexure ‘LK10’, which was either brought into existence in October 2000 or 2001. The wife's evidence was that that was not the case and as best she could recall it was in fact a document that had come into existence, some considerable time before.
I must say that I had hoped that there might have been some more specific evidence in that regard, but unfortunately it was not forthcoming. I did note, however, that the document referred to various transactions in 1998 and 1999 and, quite clearly, if that was the case, it must have been after November of 1999, at the very least, that the document came into existence, because the last set of dates which are apparent on the annexure ‘LK9’ referred to 15 and 17 November 1999.
One can only properly assume, therefore, that they came into existence after that date and for that reason, but also because of the more confidence I have in the evidence of the husband, I am more inclined to believe that the document was a reflection of figures from earlier on, but that the document itself came into existence at or about the same time as the document annexure ‘LK10’, to which I have previously referred.
What those documents indicate, is that there was a payment to the wife by the husband, no doubt at her direction, of a sum of $35,000. It was acknowledged by the husband that that was a payment that was made, but the difficulty that arose is that no one seemed to have any clear evidence as to what source, or from which account, those moneys were drawn.
It appears that the wife's evidence was to the effect that it had come from the joint account, rather than the husband's account, in which case there was, of course, a “double dipping”, if I can refer to it that way, by the husband in relation to the payment and receipt of such moneys. The husband said that he simply could not recall whether it had come from the joint account, but certainly was adamant that if the wife had an interest in the account and if the payment was made from that account, then it was probable that there had been this contribution already made by the wife, to moneys then refunded to her.
The husband was shown a Flexi Plus statement, which was a joint account operated by he and the wife, which showed transfers of $35,000 from that joint account to various other accounts, including a payment from the joint account to the husband's account. On 2 December 1998 there was a direct correlation between a drawing from the joint account of $35,000 and a contribution or payment to the husband's personal account, being his Flexi Plus mortgage account, of $35,000.
It was also recognised by the husband, that there was no cheque for $35,000 coming out of the husband's account to any other source, including, of course, the wife. The husband was asked, therefore, whether, if it were true that the distribution had been made to both he and the wife from joint contributions, then it would not be the case that he had repaid that amount and that the wife was simply clarifying the situation. He said that he could not recall what the situation was in that regard, but it would appear clear that the only real indication of payments received by the wife, at least in respect of an amount of $35,000, had come from a joint account, but that also there had come from the joint account a payment of $35,000 to the husband.
As was contended by counsel for the wife, therefore, there was a situation where the wife had paid to herself one half of the $35,000, but had also been responsible for the payment to the husband, of a sum of one half of the sum of $35,000 received by him. There was, therefore, on the best evidence that could be gathered, a shortfall of $35,000 in relation to moneys that appear to have been agreed by the husband, as being required to be repaid by him to the wife.

As I said earlier, the difficulty that arises in relation to this matter is that so much of the evidence and so many of the contentions of each of the parties, arises specifically from issues significantly in the past and also from issues upon which neither of the parties have any real or clear recollection. It is therefore an extremely difficult matter to try and determine, particularly when calculations are required to be made in relation to what constitutes the property pool of the parties and how it should be distributed.
Whilst, of course, I note that the Court is in no way bound by the terms of the agreement that was apparently entered into by the husband and the wife, I must say that I am mindful of the fact that there is a situation where both the husband and the wife have acted upon payment and receipt of moneys, such that they both now find themselves in different circumstances to that which they were in, some considerable time ago. The husband, as is obvious therefore, says that both parties have moved forward, that the husband paid to the wife what she asked for in relation to settlement and that there should be no further distribution.
The difficulty that arises is that if, as appears to be the case, the wife's calculations in relation to what might appropriately have been required to have been paid to her was incorrect, then there is still a shortfall and, in fact, the husband acknowledged that if that was the best evidence that was available, then there was a shortfall in relation to the payment.
It leads me to the difficulties that I have in relation to this matter.
The means by which a normal calculation would be done, in relation to what is the pool to be divided between the parties, and then how it should be divided, is clear. The law requires that the following process be followed. There is a four step process to be followed in relation to such proceedings. The relevant legal principles are those which are contained within section 79 and section 75(2) of the Family Law Act.
The Court must firstly ascertain what the parties assets and liabilities are, at the date of trial. The second step is then to consider the contributions that each party has made towards those assets and can be contributions either of a financial or of a non financial nature. Contributions to property include financial and non financial contributions made directly or indirectly by or on behalf of a party to the marriage and to the acquisition, conservation or improvement, of the property of the parties. Contributions to the welfare of the family are the contributions made by a party to the marriage, constituted by their roles as homemaker or parent.
The authorities make it clear that contributions to the welfare of the family must be given appropriate weight and are not treated as a token matter or as a contribution, which is of inherently less value than a financial contribution to property.
In assessing the parties' contributions to the acquisition of the assets of their marriage, the Court must consider issues with regard to whether a global approach or an asset by asset approach, is appropriate. The global approach is the more common or generally adopted position in relation to proceedings.
Once contributions have been assessed, a third step is required to be looked at which is an assessment of the parties' future needs by reference to the factors which are set out in section 75(2) of the Family Law Act.
Finally there is a fourth step which is a general overview required to be looked at, in order to ensure that justice and equity are met.
In this case, however, it is necessary to firstly work out what the pool available to the parties is. But, of course, the difficulty here is that both the husband and the wife do not seek to divide assets, that are currently held. What is suggested by both the husband and the wife, is that the assets that the parties had, and have been distributed between them, should remain as distributed. What the parties subsequently purchased, unless it can be specifically traced back, should not be divided, though certainly from the wife's perspective, it should be taken into account, but that some adjustment of some nature should be done, to take into consideration what is the actual situation.
The real issue here then is what distribution should be effected in relation to the amount of $200,000, which is currently held by the solicitors for the husband, pending the determination of this matter. The husband says quite simply he should receive the entirety of those moneys and that the wife should receive nothing from those moneys. The wife says that she should receive somewhere between zero and $200,000 and contends that the entirety of the moneys should be paid to her.
It is, in my view, a difficult matter and, as was submitted to me as early as November of 2007, turns very much on the findings as to the credibility of the parties. What is obvious is that the parties worked with each other to assist each other in both their personal endeavours and also their joint endeavours. What is also, as best I can assess obvious, is that neither party set out at any time to charge interest in relation to their dealings with each other, but rather to, as best they could, provide for an equal distribution in relation to joint efforts and a repayment of contributions by the other party, if the endeavours or projects were not of a joint nature.
I struggle, therefore, to see how else a calculation could properly be done, in relation to this matter. There are many arguments that could be put forward and have been put forward in relation to how distribution could be effected, or in fact, even how there could properly be a division of the proceeds between the husband and the wife. It is unusual, but I do not consider that this matter, and the justice and equity, which is of course a particular consideration, can be looked at other than by dealing with what remains to be distributed between the husband and the wife, being the $200,000 that is held, and how that might be distributed. Each, as I say, do not suggest that there should be any other alteration of the property of the other.
It seems clear that the parties have moved forward in relation to their lives and financial circumstances. If anything, however, it would appear that what the husband brought into the relationship and what the husband now retains, is less than what was initially brought in. The parties' personal circumstances have also changed. Much has moved forward in relation to issues with regard to each party's circumstances, both financial and also, unfortunately, circumstances in relation to their own personal situation and in specific terms, in relation to their health. Neither is in the best of health, and neither certainly are able to continue earning income the way they have previously done.
I do not, therefore, intend to go through a process of contribution and add back that might otherwise be appropriate. I do not consider that in the circumstances there should even be adjustments made pursuant to the provisions of s.75(2). I realise that that is a somewhat radical approach in relation to this matter, but this matter, of its very nature is one that cannot be pigeonholed into a formulaic determination.
In my view, there has been a distribution, albeit notionally between the parties and, for many years the parties have then moved forward upon the basis of that notional distribution. In fact it was the case that the original application filed in March 2006, was some four years or more after the parties had affected a distribution of moneys between them and some years after the parties had in fact separated and moved on with their lives.
The real issue then turns, as was submitted to me, on the matters of credibility and the basis upon which it could be assessed that there should be an adjustment, if any, between the husband the wife. I have struggled with how that might be appropriately determined. In the end I have come to the determination that the best evidence, and it is limited by both restricted documentation as well as the recollection of the parties, is that there were continued transactions up to 2000, between the husband and the wife and that, as best as can be seen, the wife has, through miscalculation or lack of full particulars, failed to receive back the full amount that was required to be paid to her by the husband, so that there would be an equal adjustment, as has always been the practice between the parties, up until separation.
As best as one can calculate, the husband does owe the wife $55,000 from advances that were made during the joint efforts of the parties or the contributions that each made to the other in relation to their individual projects. A sum of $200,000 being part proceeds from the sale of Property T is held, one would hope in investment on the part of the parties, pending resolution.
There should not be an adjustment otherwise, in relation to the sale of the property at Property T. There is no basis upon which it could be suggested that the figure that was received upon sale by the husband, was anything other than the market value. The wife may have suspicions but they are exactly that and nothing more.
There should not be an adjustment in relation to anything received by the husband over and above that which has already occurred in relation to the sales and consultancy, relating to the development, [K]. The project was completed. The project was equally contributed to at appropriate times by the parties or by each party and appropriate adjustments and payments have occurred.
The only shortfall is the sum of $55,000. It was not through any fault of the husband that it was not received earlier. In fact, the clear agreement of the parties, is that the husband was advised that the payment required was $125,000 to be made to the wife, and that was affected.
In my view, the only just and equitable resolution of this matter, as between the parties, in light of issues of credibility, in light of the limited evidence that was available and in light of concerns as to each party being able to move forward forthwith, is that there should be a distribution of the moneys held on behalf of the parties by the solicitors for the husband, upon an apportionment of $55,000 plus any interest accrued on that amount to the wife and $145,000 plus any interest accrued to the husband and that otherwise each party retain all property in their possession, as and for their own property absolutely.
The orders of the Court will reflect that determination in relation to the matter.

I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Coker FM

Associate: C Herbst

Date: 31 October 2008