Lagarno and Lagarno

[2012] FamCA 18

FAMILY COURT OF AUSTRALIA

LAGARNO & LAGARNO [2012] FamCA 18

FAMILY LAW - PROPERTY – Settlement in relation to marriage – where the husband had significant assets at the commencement of cohabitation – where the wife had three children from a previous relationship – where justice of the case requires the husband’s contributions to the welfare of the wife’s children to be taken into account pursuant to s 75(2)(o)

Family Law Act 1975 (Cth)

In the Marriage of Mehmet (No 2) (1986) 11 Fam LR 322
In the Marriage of Robb (1994) 18 Fam LR 489

APPLICANT: Ms Lagarno

RESPONDENT: Mr Lagarno

FILE NUMBER: SYC 7264 of 2007

DATE DELIVERED: 18 January 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Sydney

JUDGMENT OF: Fowler J

HEARING DATE: 5, 6 and 7 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Livingstone

SOLICITOR FOR THE APPLICANT: MCW Lawyers

COUNSEL FOR THE RESPONDENT: Mr Hodgson

SOLICITOR FOR THE RESPONDENT: Milne Berry Berger & Freedman

Orders

1. The husband is forthwith to do all such acts and things necessary to transfer to the wife all his right title and interest in the property presently occupied by her and known as … C Street, Suburb 1 (“Property 1”).

2. The husband is forthwith to do all such acts and things as may be necessary to discharge any mortgage or charge upon Property 1.

3. Within 42 days the husband is to pay to the wife the sum of $105,000.

4. Within 28 days of the date of these orders the wife is to provide to the husband a list of three proposed qualified valuers of the husband’s “[Holden]” Motor Vehicle, his unregistered cars, his assorted car parts, his concrete cutter, and his collection of shells of cars and trays.

5. Within a further seven days the husband is to nominate one of the said valuers to be the valuer of the personalty referred to in Order (3) (“the nominated valuer”).

6. The husband and the wife are to forthwith do all such acts and things at their joint and equal expense to cause the nominated valuer to produce to each of them a valuation of the Holden and the other items of personalty referred to in Order (3).

7. Within a period of seven days of the production of the valuation the husband is to pay to the wife 25 per cent of the said value and on such payment the husband will be declared as against the wife to be the sole beneficial owner of the said items of personalty referred to in Order (3).

8. The husband make available for collection by the wife the following items of personal property within seven (7) days of the date of these orders:

   (a)       the wardrobe given to the wife by her late great-grandparents

   (b)       the old green sewing machine cabinet

   (c)       the art-deco style mirror and

   (d)       the wife’s two ‘[specified plants]’.

9. The husband is to forthwith notify the wife of the resolution of the Supreme Court proceedings against Mr V and P Pty Ltd in Case

   
   

   No. …  by judgment or settlement.  The husband is to pay the wife as and when received, from the nett proceeds of the litigation, an amount equivalent to 25 per cent of the said nett proceeds.

10. The wife be declared to be the owner of all property in her possession or under her control including the amount of $100,000 previously paid to her by way of partial property settlement, the Mercedes and Honda motor vehicles, her household contents, her jewellery, her entitlement to superannuation and any other savings.

11. Save as provided in these Orders, the husband be otherwise declared to be the owner of all property in his possession or under his control, including all real property, motor vehicles, contents, birds, specified painting, monies in bank accounts, his entitlement to superannuation and that he be entitled to all monies which may be recovered from Mr and Ms T.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7264 of 2007

Ms Lagarno

Applicant

And

Mr Lagarno

Respondent

REASONS FOR JUDGMENT

Introduction

1. The proceedings before the court are proceedings between the parties to a marriage in which each of them seeks an alteration to interests in their joint property, or the property of either of them.

2. The parties commenced cohabitation in approximately 1994 and separated for the last time on 14 October 2008.  In the interim period there was a period of about four to five months during which the parties lived separately having separated on 31 October 2007 and resumed cohabitation in March 2008.

3. In all, the period of the relationship and marriage cohabitation was 14 years.

4. There is no issue that the husband was the primary breadwinner throughout the cohabitation.

5. There is no issue that the wife came to the relationship with three children by her two former partners, who were aged 10, 8 and 5 at the time.  She brought with her a modest entitlement to child support which was initially set at $50 per week but toward the end of the period increased to about $200 per week.

6. The husband asserts that he primarily provided for these children but it does appear at least until 1997 the wife, notwithstanding that she and the husband occupied the same premises, continued to receive a sole parent’s benefit as well as the child support payments referred to.  The wife’s 1998 Group Certificate and Pensions – 1998 Group Certificate were tendered and made Exhibits 3

   
   

   and 4.

7. The husband came to the relationship with significant assets and a business in the automotive industry known as Business 1.  The wife at that time had modest assets.

8. There is an issue between the parties as to the extent of the wife’s non financial contribution made to the parties’ wealth and welfare.

9. There are also significant issues as to the husband’s contributions to the welfare of the children and his involvement in domestic chores.

10. The parties each claim that post separation they have developed different ills.  The husband claims he is depressed.  The wife says that this is not so.  The wife claims that she is made fearful and anxious by reason of the husband’s conduct, inter alia, in placing dead rodents and a dead cat in the premises which she occupies or the car that she drove.  The husband denies that he did so.  The husband says that his capacity to earn is affected by his depression and the wife asserts that his conduct as set out indicates he has a clear capacity to process a campaign of terror against her and that this would belie the diagnosis.  She says that aliunde his conduct does not indicate depressive illness.

11. The wife asserts the greater earning capacity of the husband is a matter which should affect the Court’s decision significantly and the husband says that his contribution financially and otherwise during the marriage, in particular to the benefit of the wife’s children (notwithstanding that he clearly understood the position as to the extent of the support being provided to them by their fathers and the fact that the wife came as a “package” with the children), should cause the Court to leave by far the bulk of the assets of the parties with him.

12. The husband in the course of the preparation of this matter for hearing disclosed that he had failed to lodge tax returns for a period of 18 years and was directed by the Court to file such returns.  He has received an assessment of $190,000 for tax and interest and was at the time of the hearing in negotiation on penalty.

13. In these circumstances, the Court is asked to make that order which, in all relevant circumstances, will do justice and equity between the parties taking into account their contributions and their comparative needs, means and financial resources.

Background Facts

1. Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.

2. In 1950 the husband was born.  He is now 61 years of age.

3. In 1963 the wife was born.  She is now 48 years of age.

4. In 1972 the husband married his first wife, Ms D.  He has two children from this marriage namely, L aged 37 years and R aged

   
   

   34 years.  He was divorced from Ms D in the late 1980s.

5. On 27 June 1972, the husband purchased the property at C Street, Suburb 1 (“Property 2”).

6. On 4 July 1978, the husband purchased the property at … Y Street, Suburb 2 (“Property 3”).

7. On 14 December 1982, the husband purchased the property at … C Street, Suburb 1 (“Property 4”).

8. In 1983 the husband purchased a shelf company known as Z (No …) Pty Limited (“Z Pty Ltd”).

9. On 19 December 1983, the husband’s company Z Pty Ltd purchased the property at A Street, Suburb 3 (“Property 5”).

10. On 27 February 1984, the wife married her first husband, Mr W.

11. In April 1984, the wife’s first child, J, fathered by Mr W, was born.  She is now 27 years of age.  About two months after J’s birth the mother separated from Mr W.  They were divorced in November 1987.

12. In April 1985, the husband changed the name of C Pty Ltd to Lagarno Enterprises Pty Limited (“Lagarno Enterprises”).

13. In March 1986, the wife commenced cohabitation with Mr S.

14. In September 1986, the wife’s second child, B, was born.  He is now 25 years of age.

15. In February 1989, the wife’s third child, X, was born.  He is now 22 years of age.

16. In November 1988, the husband established Business 2.

17. In 1991, the wife separated from her partner Mr S.

18. On 19 April 1991, the husband purchased the property at … C Street, Suburb 1 (“Property 1”) together with his girlfriend at the time, Ms WH, for $185,000 with a mortgage of $100,000.

19. In November 1991, the parties met through the husband’s business, as the wife went there for a job interview.  This job involved the wife securing referrers for the business.  She worked three days per week for about five hours per day earning approximately $100 per week.

20. On 11 February 1992, the husband formed a partnership with Mr V.  The husband transferred the business of Business 2 to Mr V’s company P Pty Limited.  The two then operate the business as a partnership, initially at Property 5, then at Property 2, and then at Property 3.

21. In 1992, the husband sold Business 1 to Mr HD for $135,000.  These monies are put towards the purchase of the property at H Street, Suburb 4 (“Property 6”).  The property was purchased in November 1992 for $290,000.

22. In 1992, the parties commenced a relationship.  The wife moved into the husband’s property at Property 4 with her three children and paid him $130 rent per week.  At this time the husband moved into Property 6.

23. In 1994, the parties commenced cohabitation at Property 4.  The wife asserts she continued to pay the husband rent of $100 per week until

    
    

    23 May 1998.

24. In October 1995, the parties were engaged.

25. In 1996, the wife’s mother provided the parties with an interest-free loan of $50,000.

26. On 15 April 1996, Ms WH transferred her interest in Property 1 to the husband pursuant to Supreme Court Orders.

27. On 29 May 1996, the husband purchased a 50% interest in … Y Street, Suburb 2 (“Property 7”) together with P Pty Ltd.

28. In July 1996, the wife began working for the husband’s business at Property 7 three or four days per week from the hours of 9.30 am to 3.00 pm.

29. In November 1999, the parties were married.

30. On 22 May 2000, the wife was appointed a Director of Lagarno Enterprises and received the husband’s previous partner’s share.

31. On 30 June 2000, Property 5 was sold for $420,000 and the proceeds of sale were deposited into an investment account.

32. On 15 November 2000, the wife purchased a Honda motor vehicle.

33. In October 2001, Property 6 was sold for $700,000 and the proceeds of sale were deposited into an investment account.

34. In 2002, the wife began receiving interest from the St George Dragon Direct investment account as income.  She received approximately $2,800 per month.  In December 2006, the husband stopped paying the wife these monthly payments.

35. On 31 October 2007, the parties separated for the first time.  The husband asserts that he continued paying the wife’s credit card bills, and continued to give her $2,800 per month for a few weeks after they separated and then stopped when he realised she was not going to return.

36. In December 2007, the husband suffered from depression and saw his general practitioner and psychologist, Ms TN, for six sessions.

37. The husband asserts that in 2007 – 2008 he lent J $80,000 to buy a home and establish a business.  The wife asserts the payment was a gift.

38. In 2008, Business 2 ceased making mortgage payments for P Pty Ltd and the husband and a dispute arises between the husband, P Pty Ltd and

    
    

    Mr V.  This dispute is currently before the Supreme Court.

39. In 2008, the wife asserts that she renovated Property 1.

40. In mid January 2008, there were AVO proceedings against the husband in the Local Court.

41. On 13 March 2008, the parties reconciled and recommenced cohabitation on

    
    

    15 March 2008.

42. On 17 March 2008, the husband paid the wife all interest payments he had ceased paying in 2006, totalling $31,500.

43. In August 2008, the husband sought treatment for depression from

    
    

    Ms TN.

44. In October 2008, the parties separated for a final time.  The wife moved into the husband’s property at Property 1 rent free.

45. In mid November 2008, there was an altercation between the parties and the husband was charged the next day with assault and a provisional AVO was granted against the husband for protection of the wife.

46. In August 2010, the husband sought treatment for depression from

    
    

    Ms TN.

47. In mid September 2010, the husband was convicted with four counts of contravening a provision or restriction of an AVO.

The Issues

1. What, in the circumstances, is an order altering the parties interests in property which will reflect their direct and indirect contributions and those made on their behalf to the acquisition, conservation and improvement of the property of the parties or either of them and to the welfare of the family comprised by the husband and the wife (the children in the marriage were children of the wife but not of the husband and therefore not children of the marriage)?

2. To what extent should consideration be given to a variation of such an order by reason of the matters referred to in s 75(2) of the Act?

3. On a consideration of the result should any further adjustment be made by reason of the need to do justice and equity between the parties?

The Orders Sought by Each Party

1. The husband, in summary, sought the following orders:

   (1)that the husband pay to the wife by way of property settlement the sum of $625,000

   (2)that the wife transfer to the husband her right, title and interest in the 1999 Honda … motor vehicle registration number …

   (3)that the wife be declared to be the owner of all property in her possession or under her control including the amount of $100,000 previously paid to her by way of partial property settlement, the Mercedes motor vehicle, her household contents, her jewellery and her entitlement to superannuation

   (4)that the husband be declared to be the owner of all property in his possession or under his control, including all real property, motor vehicles, contents, birds and monies in bank accounts, his entitlement to superannuation and further that he be entitled to all monies which may be recovered from Mr and Ms T and J

   (5)that the wife pay the husband’s costs.

2. The wife, in summary, sought the following orders:

   (1)that within 42 days the husband transfer to the wife his right, title and interest in the property known as Property 1

   (2)that within 42 days the husband pay to the wife a sum of $700,000 by way of property settlement

   (3)that the parties be declared to be the sole legal and beneficial owner of any savings, investments and superannuation entitlements presently in the name of that party

   (4)that the husband make available for collection by the wife the following items of personal property within 7 days of the date of these orders:

   (a)the wardrobe given to the wife by her late great-grandparents

   (b)the old green sewing machine cabinet

   (c)the art-deco style mirror

   (d)the wife’s two ‘specified plants’.

   (5)that the Holden motor vehicle in the husband’s possession be listed for sale by public auction with Q Motor Auctioneers Pty Ltd.  For the purposes of giving effect to this order the following arrangements will apply:

   (a)within 7 days of the date of this order the husband is to deliver to the wife all keys, registration papers, log books, service records and insurance records for the motor vehicle

   (b)within 7 days thereafter the wife is to deliver the said motor vehicle to the Chief Auctioneer at Q Motor Auctioneers

   (c)within 7 days thereafter, or such other later date as the Chief Auctioneer may nominate, put the motor vehicle up for public auction.

   (6)the proceeds of sale of the auction of the Holden motor vehicle, after accounting for the auctioneer’s expenses be divided as follows:

   (a)to the husband 50%

   (b)to the wife 50%.

Property matters

1. The first step I must undertake is to identify the property of the parties or either of them available for division between them.

The Balance Sheet

1. The parties had submitted a balance sheet at the commencement of the proceedings which, by reason of matters revealed by the evidence and agreements reached between the parties, was altered during the course of the proceedings.  At the close of the evidence the balance sheet was as follows:

Ownership	Description	Wife’s Value	Husband’s Value
Assets
1.	Husband	[Property 4]	$650,000	$650,000
2.	Husband	[Property 7] jointly owned by [P] Pty Limited (husband’s 50% share)	$360,000	$360,000
3.	Husband	[Property 3]	$420,000	$420,000
4.	Husband	[Property 1]	$650,000	$650,000
5.	Husband	[Property 2]	$650,000	$650,000
6.	Husband	BankWest Debit Account Number […]	$761,631	$761,631
7.	Husband	1,100 IAG Shares	$3,322	$3,322
8.	Wife	2005 Mercedes […] motor vehicle registration […]	$27,000	$27,000

9.	Wife	[…] Honda […] motor vehicle registration number […]	$25,000	$25,000
10.	Husband	[…] Nissan […] motor vehicle registration […]	$25,000	$25,000
11.	Husband	Toyota […] motor vehicle registration number […]	$1,000	$1,000
12.	Husband	[…] [Holden] motor vehicle	$4,000	$4,000
13.	Husband	[Chrysler motor vehicle] – registered but in poor condition	$8,000	$8,000
14.	Husband	[Holden] motor vehicle – unregistered and in poor condition	$7,000	$7,000
15.	Husband	[Holden] motor vehicle – unregistered and in poor condition	Proposed sale	$30,000
16.	Husband	Subaru […] – unregistered	$5,000	$5,000
17.	Husband	3 motorbikes – unregistered	$3,500	$3,500
18.	Husband	Trailer	$1,000	$1,000
19.	Husband	Boat	$9,000	$9,000
20.	Husband	2 x ride on mowers (one not working)	$2,500	$2,500
21.	Husband	Air compressor	$200	$200
22.	Husband	Concrete cutter	$500	Nil
23.	Husband	Assorted car parts	$10,000	$1,000
24.	Husband	Shells of cars, trays and cars unregistered	$34,450	$8,000
25.	Wife	Household contents	$5,400	$5,400
26.	Husband	Household contents	$9,640	$9,640
27.	Husband	[specified] painting	$9,000	$9,000
28.	Husband	3 [Type 1 birds]	$4,500	$4,500
29.	Husband	9 [Type 2 birds]	$4,500	$4,500
30.	Husband	2 [Type 3 birds]	$800	$800
31.	Wife	Jewellery	$46,800	$46,800
Total Assets	$3,738,743	$3,732,793
Addbacks
32.	Husband	Payment to Wife in April 2008	$	$31,000
33.	Husband	Payment to Wife in 2006 from an insurance payment on a damaged motor vehicle	$	$57,500
34.	Husband	Payment to Wife in 2011 – partial property settlement	$100,000	$100,000
35.	Wife	Legal fees paid	$43,327	$43,327
36.	Husband	Legal fees paid	$80,875	$80,875
37.	Husband	Held upon trust for the husband re legal fees	$25,000	$25,000
Total Addbacks	$249,202	$337,702

Liabilities
38.	Husband	Mortgage over property at [Property 7] with [P] Pty Limited (husband’s 50% share)	$NK	$23,000
39.	Husband	National Australia Bank Visa	$NK	$6,000
40.	Wife	National Australia Bank Visa	$5,000	$NK
41.	Husband	Husband’s tax liability	$	$202,466
Total Liabilities	$5,000	$231,466
Net Total Excluding Superannuation	$3,982,945	$3,839,029
Super-annuation
42.	Husband	Superannuation Fund – 100% interest	$13,000	$13,000
43.	Wife	[C] Super – 100% interest	$4,000	$4,000
Total Superannuation	$17,000	$17,000
Net Total Including Superannuation	$3,999,945	$3,856,029

1. Under a separate heading of “Recoverables” on the balance sheet the husband included the following:

   a)

   there is a loan from Lagarno Enterprises Pty Limited to Mr and

   
   

   Ms T outstanding in the amount of $280,000 plus interest

   b)

   the husband contends that there is a loan of $80,000 outstanding to

   
   

   J.  He gave oral evidence that he proposes to seek to recover these monies.

2. A number of issues arose on the balance sheet, in particular with regard to the values of the Holden Motor Vehicle, concrete cutter, assorted car parts and shells of cars, trays and cars unregistered.

3. The Court suggested that an appropriate way to deal with the mentioned items on the balance sheet would be for the wife to submit three valuers and the husband to choose one of these valuers so that valuations can be carried out on those items.  Once the items are valued it was suggested that the value be divided into the proportions that the Court finds is appropriate for the ultimate division or adjustment of property.  This approach was agreed by the husband and wife to be appropriate.  Accordingly, the Holden motor vehicle, concrete cutter, assorted car parts and shells of cars, trays and cars unregistered will not be included in the balance sheet and will be treated as a separate pool of assets.

4. The wife informed the Court she no longer sought any of the Type 1 birds or the specified painting.

5. With regard to the add backs, the wife did not agree that item 32, being the payment of $31,000 to the wife in April 2008, should be added back.  It was submitted by the wife that it was agreed that this sum was requested and paid as a condition precedent for the wife resuming the marriage with the husband.

6. In relation to Item 33, being the amount of $57,500 paid to the wife in 2006, it was agreed by the wife that there was a payment on an insurance policy to the wife, but that this money has gone into consolidated revenue and should not be added back.  The Court notes that this payment was made prior to both dates of separation in 2007 and again in 2008.

7. It was submitted by the husband that to avoid a double count that the payments of $31,000 and $57,500 to the wife should be added up and then the wife’s legal fees should be deducted from this amount, leaving an amount of $45,173 to be included in the balance sheet as an add back.  It was also submitted that the wife’s legal fees and the partial property settlement should remain as add backs.

8. The Court does not consider that either the arrears of support or the amount received by the wife for her insurance claim should be added back by reason of the nature and use of the payments and the time at which they were accrued and received.

9. The husband submitted that the wife’s credit card was used in part to pay for legal fees but there is no satisfactory evidence of that.

10. The Court accepts that both the partial property settlement of $100,000 as well as the wife’s paid legal fees in the amount of $43,327 should be added back.  This is notwithstanding the argument that part of the wife’s legal fees were paid out of the partial property settlement.  The Court notes that the current balance in the wife’s St George Bank account is $98,690.76.

11. It was submitted by the husband that the $280,000 loan from Lagarno Enterprises Pty Ltd to Mr and Ms T should be considered as a contingent “liability” (sic) for the costs of recovery of the husband.  The Court regards it as a recoverable asset of the company.  The sum lent by the company was provided to it by the husband and would be due to him as either a loan or share capital.  The loan or share capital in Lagarno Enterprises Pty Ltd of $280,000, subject to the recovery of the secured debt owed to the company by Mr and Ms T and in the absence of any evidence as to any other liability of the company, will be included as an asset of the husband.  The costs of recovery will probably be recoverable from the debtors.

12. It was proposed by the husband, that with regard to the Supreme Court proceedings on foot with respect to the husband’s business, that the husband notify the wife of the ultimate result and that in the event that the husband is successful that he provide to the wife an amount in the percentage that the Court finds is appropriate for the ultimate division or adjustment of property.

13. Accordingly, I find the assets and liabilities of the parties are as follows:

Assets	($)
[Property 4] (h)	650,000
[Property 7] (husband’s 50% share) (h)	360,000
[Property 3] (h)	420,000
[Property 1] (h)	650,000
[Property 2] (h)	650,000
BankWest Direct Debit Account number […] (h)	761,631
1,100 IAG Shares (h)	3,322
[…] Mercedes […] Motor Vehicle registration […] (w)	27,000
[…] Honda […] motor vehicle registration number […] (w)	25,000
[…] Nissan […] motor vehicle registration number […] (h)	25,000
Toyota […] motor vehicle registration number […] (h)	1,000
[…] [Holden] motor vehicle (h)	4,000
[Chrysler motor vehicle] – registered but in poor condition (h)	8,000
[Holden] motor vehicle – unregistered and in poor condition (h)	7,000
Subaru […] – unregistered (h)	5,000
3 motorbikes – unregistered (h)	3,500
Trailer (h)	1,000
Boat (h)	9,000
2 x ride on mowers (one not working) (h)	2,500
Air compressor (h)	200
Household contents (w)	5,400
Household contents (h)	9,640
[Specified] painting (h)	9,000
3 [Type 1 birds] (h)	4,500
9 [Type 2 birds] (h)	4,500
2 [Type 3 birds] (h)	800
Jewellery (w)	46,800
Value of loan account with or shares in [Lagarno] Enterprises Pty Ltd subject to the recovery of the secured debt owed to the company by [Mr and Ms T] (h)	280,000
Superannuation Fund – 100% interest (h)	13,000
[C] Super – 100% interest (w)	4,000
Add back: Payment to wife in 2011 – partial property settlement (h)	100,000
Add back: Legal fees paid (w)	43,327
Add back: Legal fees paid (h)	80,875
Add back: Held upon trust for husband re legal fees (h)	25,000
Total Assets	$4,239,995
Liabilities	($)
Mortgage over property at [Property 7] with [P] Pty Limited (Husband’s 50% share) (h)	23,000
National Australia Bank Visa (h)	6,000
National Australia Bank Visa (w)	5,000
Husband’s present liability to the taxation department (h)	202,466
Total Liabilities	$236,466
Nett Asset Pool (inclusive of Superannuation):	$4,003,529

Credit

1. The evidence of each of the parties in these proceedings had unsatisfactory elements to it.  The wife for her part was a witness who tended (as did the husband) to speak in absolutes.  “I always” or “I never” were frequently used examples.  Further questioning brought some qualification to the answer.  They appeared overcome by the need to put their case at more than its highest even if that, on further consideration, was not open to them.  The wife’s assertions that the husband made no contribution to living expenses was not evidence (having regard to the way in which the parties lived), which was more probable than not.  It seems clear that the husband was in this relationship the major breadwinner.  That is not to say that the wife did not put her effort into supporting him in that process and making herself some contributions.

2. The wife appears to have been more forthcoming in relation to documentation.  Her memory seemed the more reliable of the two but it was not necessarily perfect.  The husband had a problem remembering many things and his answer “I do not recall” was a commonplace.  The Court does not suggest that giving evidence is a test of memory only but some of the failings in the husband’s capacity to remember were surprising to say the least.  He remembered for example that he had lent some $630,000 to a Mr and Ms T.  He remembered he had taken security for it.  He informed the Court that the security had been discharged on payment of $350,000 but said he had no security for the balance, that Mr and Ms T had gone overseas to live and he had considerable doubt that he would ever recover the money.  Shown a letter from his solicitors (which he said confirmed his evidence) the letter was tendered.  The letter clearly states that after the discharge of one mortgage a further security remained.  The husband subsequently accepted that he had signed mortgage documents charging a property owned by Ms T at Suburb 5 and conceded that the mortgage was still in existence.  His response to the information was “that’s nice”.  He however also conceded he had recently, whilst driving, taken notice of the property which was the security for his loan.  It does strain the Court’s credulity to suggest in these circumstances that he was not aware of the second security.

3. He said that he had lent money to his adult “daughter” in Western Australia who was the daughter of the wife.  The amount of the “loan” was some $80,000 made in two tranches.  He has never included the loan in a financial statement.  The wife asserts that it was a gift in any event.  The evidence of the husband is that it is a loan but one which he thinks will be “difficult” to recover.  The Court accepts, given his tearful expressions relating to his daughter, that it is more probable than not that he will not pursue the “loan”.

4. He had consulted with a Dr PI and introduced into evidence two reports of the doctor.  The doctor diagnosed him as being depressed.  The doctor under cross-examination, having put to him the behaviour of the husband in attending Karaoke Nights and entertaining young ladies at his house, said that the behaviour was inconsistent with his diagnosis unless the husband was under the influence of alcohol at the time.

5. The husband for his part said that he had not taken liquor to that extent.  The husband gave evidence of sleeplessness and tearful episodes and the evidence had the ring of verisimilitude.

6. There is an inability of the Court on the evidence to find that the husband is not depressed but the doctor conceded that his diagnosis was entirely dependent on the accuracy of the history that he was provided.  The evidence given to him whilst contra indicating depression could not be assessed without further inquiry.

7. The husband said that he was involved in litigation with his former partner in a business.  He was unable to say how much he was claiming in his evidence.  The Court found this surprising.

8. Neither the husband nor the wife was satisfactory as a witness but the Court will make no general findings on credit.  The evidence that the Court prefers on a particular issue will be indicated by its findings on that issue.

Section 79(4) contributions

Initial Contributions

1. The husband’s evidence is that he came to the relationship with the following assets and liabilities:

   a)Property 2 purchased in 1972.  This was encumbered with a small mortgage which was discharged in 1985.

   b)Property 3 purchased in 1978.

   c)Property 4.  The husband asserts he paid $50,000 for the purchase of this property in December 1982.  The husband asserts this was purchased and registered in the name of his brother-in-law Mr WN.

   d)Property 1.  At the commencement of cohabitation the husband owned the property together with his ex-partner Ms WH.  The property was transferred into the husband’s name in 1996 pursuant to Court orders.

   e)Property 6.  The husband purchased this property in 1992 for $290,000 and had a mortgage of $125,000.

   f)Ownership of his interest in Z (No …) Pty Ltd later renamed to Lagarno Enterprises Pty Ltd.  The company purchased a property at Property 5 in December 1983 for $145,000.  The husband asserts that this company has never traded and was simply a shelf company.

   g)Ownership of his interest in Business 2 which he had established in 1998.  The business name was transferred to P Pty Ltd in February 1992 as the husband did not hold a licence for that industry.

   h)Ownership of the business known as Business 1 sold in 1992 for $135,000.

2. At the commencement of cohabitation the husband was running Business 1 which was an automotive industry business.  The husband used Business 1 to supply work to his other business, Business 2, which was also in the automotive industry.

3. The husband also owned the Holden motor vehicle which he purchased for $21,000.

4. The husband contributed his earnings from the abovementioned businesses to the support of the family.

5. The wife substantially agrees but says that the husband also had a mortgage secured against Property 1, and a loan from a relative in respect of Property 6.

6. The wife came to the relationship with the following assets:

   a)Savings of approximately $12,000.

   b)Furniture and personal effects.

   c)Ford motor vehicle then valued at approximately $8,000.

   d)Nil liabilities.

7. The wife received $50 per week by way of child support.  She also received a single parent pension of $320 per fortnight and rental assistance which she continued to receive up until 1997 when the husband included her as a signatory of his cheque account.

Contributions to date of separation

1. The evidence shows that the husband was the primary breadwinner throughout the relationship.  He deposes that he paid for the groceries and all utilities for the home.

2. The husband asserts that he assisted the wife in attending to the home and in day to day tasks in relation to running the household.  He deposes that this included preparing meals, purchasing groceries and household supplies, purchasing of cars and gifts for the family, and maintenance to the home.

3. The husband states that he established a large Aviary and had between 20 and 40 birds throughout the relationship.  He asserts that some of these birds are valuable but others are not.

4. The husband has had substantial interest accruing to savings accounts that he has accumulated from the sale of properties.  The husband sold the following properties during cohabitation:

   a)in July 2000, Property 5 for $420,000 with the proceeds of sale deposited into an investment account

   b)in October 2001, Property 6 for $700,000 with the proceeds of sale deposited into an investment account.

5. The husband worked in the automotive industry throughout the relationship.  The husband was working in partnership with Mr V via the association with P Pty Ltd.  The husband deposes that all the income he derived from his business was used to service his liabilities and also applied to the family.

6. The husband deposes that he would acquire vehicles, work on them and sell them.  This was separate to his business being Business 2.

7. The husband asserts that he worked on motor vehicles for the wife’s mother, father, sister and other members of her family, and J.

8. The husband deposes that he has paid for all of the family’s holidays including renting a house on the North Coast of New South Wales, as well as holidays with the wife to Thailand, on a P&O Cruise around Asia, the United States, Canada, Bali and Singapore.

9. The wife asserts that she continued to pay rent of $100 per week to the husband after cohabitation commenced up until 23 May 1998.  The husband says that the wife ceased paying rent in 1996.

10. In 2004 the husband commenced to give the wife $2,800 a month from his

    
    

    St George Dragon Direct investment account.  The wife deposes that this ceased in December 2006 and that when the parties reconciled in March 2008 it was agreed that the husband would pay her $31,500 in respect of the payments he had not made during this period.  The husband also put the wife’s name as the secondary card holder with his NAB Visa card which had a credit limit of $5,000, and he asserts that she was able to spend as much as she wanted on that card and he made the repayments.

11. The wife asserts that she made significant contributions as a homemaker over the course of the relationship.  The wife asserts that the husband did not contribute to household duties or assist in the day to day care of the children.

12. It was the wife’s evidence that the husband did not support her and the children up until about 1997 when he allowed her to have access to his cheque account.  She asserts that she lived off the child support she received and her $320 per fortnight single parent pension to pay for groceries, electricity and other outgoings.

13. The wife asserts that she worked in the husband’s business from 1996 to 2004 for approximately three to four days a week, doing the paperwork for the business.  She also states that she was occasionally engaged in the main function of Business 1.  She asserts that she did the end of month accounts with the business partner’s wife.  The wife also deposes that she would attend auctions to bid on cars the husband wanted to buy and that the cars would be sold from the front of their house.  She states that she would talk to the potential buyers and attend to the sale when the husband was not home.  The wife deposes that she was not receiving a wage from the husband when she worked in his business.  The husband denies that the wife made a significant contribution to his business and asserts that she took on the primary role of homemaker and looking after the children.

14. The wife’s three children moved into the husband’s property at Property 2 in January 2000 and remained living there until about 2005.  This property is next to Property 4.  The wife asserts that she carried out some minor renovations to Property 2 prior to her children moving into the house.  The wife asserts that the husband imposed strict rules on the children when they were living at this house and that it was generally used to entertain friends and to sleep in.  J also used the residence to conduct her business.  The husband deposes that he did not charge the children rent to live in this property.

15. The wife asserts that she purchased the Honda motor vehicle in November 2000 for $75,000.

16. The wife asserts that she and her father carried out repairs to Property 1 when the tenants moved out in September 2005.

17. Between 2002 and 2006 the parties purchased nine Type 2 birds, two Type 1 birds and two Type 3 birds.

18. It is the wife’s evidence that in 2005 she spent less time working in the husband’s business as she was assisting the husband’s sister-in-law, who had ovarian cancer, with attending appointments with her oncologist and other doctors, as well as doing general day to day duties such as buying her groceries and doing household chores.

19. The wife also deposes that she took care of the husband’s mother, taking her to doctors’ appointments, shopping for groceries and hairdresser appointments.

20. The husband asserts that the wife’s contributions should be regarded as 10% to 12.5%.

21. The wife submits that her contributions should be regarded as 15% in her favour.

Contributions post separation

1. The husband asserts that since separation he has had no other income to support himself other than interest he receives from his investment accounts.  It was his evidence that he has not been able to work on motor vehicles as he has not had access to his factory premises.

2. The husband deposes that the wife and her adult sons have not paid him rent since occupying the house at Property 1.

1. The husband asserts that in approximately 2007 to 2008 he loaned the wife’s daughter J $80,000 so she could start her own business and for a deposit on a home.

2. The wife submits that the husband has, since separation, expended considerable amounts of money for which he gives only a vague account in his evidence.

3. The wife deposes that when she moved into Property 1 the house needed a lot of work.  In December 2008 she carried out renovations to

   
   

   Property 1 such as tiling the kitchen and the bathroom, removing the carpet and restoring the floorboards, paid for an air conditioning system and a hot water system to be installed and paid a plumber to fix the toilet in the laundry.

4. From 2007 until April 2009, the wife worked in a retail position for a major retailer.  In April 2009 the wife commenced working at Charity 1 shop at Suburb 6 in a retail position.  The wife asserts that in January 2010 a fire destroyed the shop and she ceased working there.  Following this she was required to find alternate employment at Charity 2 store at Suburb 7 as a manager and worked five days per week earning approximately $48,000 per annum.  The wife has subsequently recommenced working at the Charity 1 shop in Suburb 6 again.

Conclusion based on contribution

1. All in all I assess the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them including such property which is no longer the property of the parties to the marriage or either of them and to the welfare of the family to be 85:15 to the date of the hearing in favour of the husband.

Section 75(2) considerations

1. The husband is 61 years of age and the wife is 48 years of age.

2. This was a long cohabitation which began in 1994 and concluded for the final time in late 2008, being a period of 14 years.  The marriage itself was of nine years duration.

3. The wife is in good health.

4. Dr PI prepared a medico legal report dated 27 April 2011 and also gave evidence at the hearing in relation to the husband’s state of health.  The husband has been diagnosed by Dr PI as having a chronic Major Depressive Episode.  Dr PI recommended that the husband would benefit from referral to a consultant psychiatrist for more intensive treatment of his depressive illness.  Dr PI stated that despite treatment with psychological counselling and antidepressant medications his symptoms have only responded partially.  In his oral evidence, Dr PI conceded that his report is based on history and that a significant ingredient turns on the reliability of that history, however he confirmed that the husband presented as someone who was quite depressed.

5. The husband is on antidepressant medication Talam (Citalopram) and takes doses of 20mg to 40mg a day, varying the dose according to the way he feels each day.  The husband consults his psychologist, Ms TN, on a monthly basis.  He was also diagnosed as having Alcohol Dependence.  The husband also takes Flomax for benign prostatic hypertrophy, and antihypertensive medications.

6. The husband is currently involved in litigation with his former business partner.  He asserts that he has not worked in his automotive industry business since approximately 2008 and is currently not earning an income.  The wife submitted that the husband’s business is an untapped income which would provide him with income in the future, and should be treated as an indeterminate financial resource.  The Court notes that the husband has not disclosed a lot of information about the Supreme Court proceedings in relation to his business, and could not provide an approximate figure of what he is expecting to receive should he be successful in the litigation.

7. The husband describes himself as “semi literate” and a Certificate for an Affidavit by an Illiterate person was attached to the husband’s affidavit of

   
   

   19 April 2011.

8. The husband has not filed Income Tax returns for a period of approximately 18 years.

9. The wife earns approximately $600 per week in her employment in a management role at a store in the charity sector.  It was submitted by the wife that her employment is subject to vicissitudes, such as the dependence on the charity of others and also for example when the shop that the wife worked in was burnt down and she had to find alternative employment at another charity store.

10. It was the wife’s submission that the fact that she brought three children from prior relationships into the marriage did not have a big impact on the husband, as he did not prepare meals for them, take them to sporting occasions on a regular occasion, or read them bedtime stories.

11. A contribution to the welfare of persons who do not fall within the meaning of “family” may nevertheless be taken into account under s 75(2)(o) as a fact or circumstance which the justice of the case requires to be taken into account: 

    
    In the Marriage of Mehmet (No 2)

    (1986) 11 Fam LR 322 per Nygh J at Fam LR 327; In the Marriage of Robb (1994) 18 Fam LR 489; (1995) FLC 92-555. The Court finds that the contribution to the wife’s children is a circumstance which the justice of the case requires to be taken into account.

12. It was found in In the Marriage of Robb that the fact that a spouse has voluntarily contributed during a marriage to the welfare of children to whom he or she owes no legal obligation of support is relevant under s 75(2)(o).

13. In this case the wife’s children from her former relationships were not “children of the marriage” within the meaning of the Act.  Accordingly, the husband’s contribution to the support of her children should be taken into account as he was acting as a volunteer assisting the wife in the discharge of her legal obligations.  As it is the wife’s legal obligation and duty to maintain the children of her prior relationships pursuant to ss 66A and 66B of the Act, the wife’s contribution cannot be taken into consideration in the same way as the husband.

14. The husband asserts that he supported the wife’s children until they attained an adult age, and that he assisted in the payment of all extracurricular activities and other expenses related to the children, as well as birthday parties.  He also deposes that he assisted the wife with the day to day care of the children such as preparing meals, spending time with them, and attending and being involved in activities and events at the children’s schools such as sporting carnivals, presentations and concerts.

15. The husband deposes that he developed a very strong relationship with J and was very involved with her extracurricular classes and performances.  He asserts that he volunteered to build the props for the shows.

16. Both parties have minimal superannuation entitlements.

17. The husband asserts that the wife should receive an adjustment in her favour of 7.5% making her total share of the property pool at most 20%.

18. The wife submits that an adjustment should be made in her favour in the order of 10%

Conclusion on section 75(2)

1. For all the reasons referred to above, and including in particular the circumstances where the husband has a greater asset pool and a higher earning capacity, it is determined that after a consideration of those matters and those otherwise required to be taken into account under the section an adjustment of 10% is called for in favour of the wife.

Overall division of assets

1. The above determination will see the wife receive approximately 25% of the parties’ assets and the husband receive approximately 75%.  This is exclusive of the Holden motor vehicle, the concrete cutter, the assorted car parts, and the shells of cars, trays and cars unregistered, and the proceeds of the Supreme Court litigation (if any).

Just and equitable

1. The division of assets presently known would see the wife receive $1,001,527 worth of nett assets and the husband receive $3,002,002 worth of assets.

2. In the circumstances of this case, I determine that result to be just and equitable.

Orders which should be made

1. I propose orders which will give effect to the following division.

2. The wife will receive:

Assets	($)
Property 1	650,000
Mercedes motor vehicle registration …	27,000
Honda motor vehicle registration number …	25,000
Household contents	5,400
Jewellery	46,800
C Super 100% interest	4,000
Add back: Paid Legal Fees	43,327
Add back: Partial property settlement	100,000
Total Assets	$901,527
Liabilities
National Australia Bank Visa	5,000
Total Liabilities	$5,000
Net Assets (including superannuation)	$896,527
Payment due by the husband to the wife	$105,000
Total to be received by the wife – approximately 25%	$1,001,527

1. The wife will also receive from the husband 25% of the value of the Holden motor vehicle, concrete cutter, assorted car parts and shells of cars, trays and cars unregistered once they have been valued in accordance with the Orders.

2. The wife will also receive 25% of the nett proceeds of the Supreme Court litigation (if any).

3. The wife will also receive the following items of personal property:

   a)the wardrobe given to the wife by her late great-grandparents

   b)the old green sewing machine cabinet

   c)the art-deco style mirror and

   d)the wife’s two ‘[specified plants]’.

4. The husband will receive:

Assets	($)
Property 4	650,000
Property 7 jointly owned by P Pty Ltd (50% share)	360,000
Property 3	420,000
Property 2	650,000
BankWest Direct Debit Account number …	761,631
1,100 IAG Shares	3,322
Nissan motor vehicle registration …	25,000
Toyota motor vehicle registration number …	1,000
Holden motor vehicle	4,000
Chrysler motor vehicle – registered but in poor condition	8,000
Holden motor vehicle – unregistered and in poor condition	7,000
Subaru motor vehicle – unregistered	5,000
3 motorbikes – unregistered	3,500
Trailer	1,000
Boat	9,000
2 x ride on mowers (one not working)	2,500
Air compressor	200
Household contents	9,640
Specified Painting	9,000
3 Type 1 birds	4,500
9 Type 2 birds	4,500
2 Type 3 birds	800
Value of loan account with or shares in Lagarno Enterprises Pty Ltd subject to the recovery of the secured debt owed to the company by Mr and Ms T (h)	280,000
Superannuation Fund 100% interest	13,000
Add back: Paid Legal Fees	80,875
Add back: Held upon trust for husband re legal fees	25,000
Total Assets (including superannuation)	$3,338,468
Liabilities
Mortgage over Property 7 with P Pty Limited (husband’s 50% share)	23,000
National Australia Bank Visa	6,000
Husband’s Tax liability	202,466
Total Liabilities	$231,466
Net Assets (including superannuation)	$3,107,002
Payment by the husband to the wife	$105,000
Total to be received by the husband – approximately 75%	$3,002,002

1. The husband will also receive the Holden motor vehicle, concrete cutter, assorted car parts and shells of cars, trays and cars unregistered.  He will be required to pay to the wife 25% of the value of these assets once they have been valued in accordance with the Orders.

2. The husband will also receive the nett proceeds of the Supreme Court litigation (if any) and will be required to pay to the wife 25% of the said sum in accordance with the Orders.

I certify that the preceding one-hundred and fifty-three (153) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 18 January 2012.

Associate: 

Date:  18 January 2012