Lynch v Sultana
[2005] NSWDC 17
•8 December 2005
CITATION: Lynch v Sultana [2005] NSWDC 17 HEARING DATE(S): 28/11/05 - 2/12/05 EX TEMPORE JUDGMENT DATE: 8 December 2005 JUDGMENT OF: Rein SC DCJ DECISION: At [50]. CATCHWORDS: Property (Relationships) Act ss.20, 42, 43 - Assessment of joint assets as at time of separation - Interest under a will - Issue of 'clean hands' in claims under the Act - Whether orders could be made against a third party other than under s.42 of the Act - Amendment of claim LEGISLATION CITED: Property (Relationships) Act 1984, ss 8, 18, 20, 38, 42, 43
Evidence Act 1995, ss.83, 128
Conveyancing Act 1919, s23CCASES CITED: Cory v Gertcken (1816) 2 Madd 40; 56 ER 250
Overton v Banister (1884) 3 Hare 503; 67 ER 479
Powell v Supresencia (2003) 30 Fam LR 463
State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146PARTIES: Vanessa Jane Lynch (Plaintiff)
Victor Sultana (First Defendant)
Vic's Freights Pty Ltd (Second Defendant)
Matthew Sultana (Third Defendant)
Sultana Transport Pty Ltd (Fourth Defendant)FILE NUMBER(S): 50/03 COUNSEL: Mr Clifton (Plaintiff)
Mr Bliim (First & Second Defendants)
Mr Pluznyk (Third & Fourth Defendants)
- 26 -
JUDGMENT
1 HIS HONOUR: These proceedings arise out of a de facto relationship between the plaintiff, Vanessa Jane Lynch (“Vanessa”), and the first defendant, Victor Sultana (“Victor”). The relationship produced three children and continued for approximately nine and a half years. There is no dispute that the plaintiff is entitled to a 50 per cent share of the net joint assets at the time of separation.
2 Mr Clifton of counsel appears for Vanessa; Mr Bliim of counsel for Victor and Vic’s Freights Pty Limited; Mr Pluznyk of counsel appears for Matthew Sultana (“Matthew”) and Sultana Transport Pty Limited.
3 The relationship ended on 26 March 2001 or 11 April 2001. Vanessa left with an old Statesman motor vehicle and little else. The parties are agreed that 26 March 2001 is the relevant date at which the assets of Vanessa and Victor need to be assessed.
4 After the relationship ended, Victor continued with and even expanded the trucking business which he operated, and quite some time after the relationship ended, Victor incorporated Vic’s Freights Pty Limited, but no distinction is drawn by the parties between Vic’s Freights Pty Limited and Victor.
5 Victor’s father, Emenuel (“Emenuel”), died in 1997. Matthew is Victor’s brother and, for a lengthy period since the separation, Victor has, at various times, lived with Matthew. It is agreed that no distinction is to be drawn between Matthew and his company Sultana Transport Pty Limited. Emenuel and Matthew were also involved in the trucking business.
6 There is no dispute that during the relationship, Victor purchased a truck (a 1997 Kenworth truck) and trailer for his trucking business of carting metal and that after the relationship had ended he purchased another two trucks and a trailer, either himself or through the company, Vic’s Freights, and a Ford utility. These vehicles were all obtained through hire purchase agreements entered into with Esanda Finance.
7 There is no dispute that the three trucks and two trailers, just referred to, and the utility were sold by Victor to Matthew (or his company) in June 2004. Nor is there a dispute about the amounts received by Victor and Vic’s Freights for the vehicles, or the net amount received after Esanda was paid out. There is a dispute as to the relevance of these sales and amounts, other than the 1997 Kenworth and trailer. The assets to which I have just referred are assets numbered 2, 3, 4, 5, 6 and 7 on Exhibit “G”. The details of assets sold by Victor, or his company, to Matthew, or Matthew’s company, are summarised in Victor’s second affidavit and figures can also be seen on Exhibit “G”. In my view, no case has been made out that assets 4, 5, 6 and 7 (all purchased after the relationship had terminated) are assets of which account needs to be taken.
8 The other assets, that is other than assets 2 and 3 on Exhibit “G”, in question are:
2. Three Harley Davidson motorbikes being:1. A 1985 W Series Kenworth truck (item 1 on Exhibit “G”), which I shall refer to as “the W Series truck”;
(a) A Shovelhead (item 9);
(c) A Kenny bike (item 12): this bike is called the Kenny bike because it is asserted, by Vanessa, that it was purchased by Victor from a man named Kenny;(b) A Fat Boy (item 11);
3. A 1978 Jaguar (item 8 on Exhibit “G”)5. An interest in land at Prestons (item 13 on Exhibit “G”).4. A Holden Statesman (item 10 on Exhibit “G”). This was the vehicle taken by Vanessa at the time of separation and;
9 The critical section, it is agreed, is s 20 of the Property (Relationships) Act 1984, but s 42 is also relied on by Vanessa. Section 20 provides:
(1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:
“ 20. Application for adjustment
(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and
(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.(i) a child of the parties,
(2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property.”
10 Also relevant are s 42 of the Property (Relationships) Act 1984, which provides:
“ 42 Transactions to defeat claims
(1) In this section, disposition includes a sale and a gift.
(2) On an application for an order under this Part, a court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order relating to the application (being an order adjusting interests with respect to the property of the parties or either of them, an order for maintenance or an order for costs) or which, irrespective of intention, is likely to defeat any such order.
(4) A party or a person acting in collusion with a party may be ordered to pay the costs of any other party or of a bona fide purchaser or other person interested of and incidental to any such instrument or disposition and the setting aside or restraining of the instrument or disposition.”(3) The court may, without limiting section 38, order that any property dealt with by any such instrument or disposition may be taken in execution or used or applied in, or charged with, the payment of such sums payable pursuant to an order adjusting interests with respect to the property of the parties or either of them or for maintenance or costs as the court directs, or that the proceeds of a sale shall be paid into court to abide its order.
11 Section 43, which provides:
In the exercise of its powers under this Part, a court shall have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.”“ 43 Interests of other parties
12 And s 8, which provides:
“ 8 Declaration of interests in property
(2) Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including:(1) Without limiting the generality of section 7, in proceedings between parties to a domestic relationship with respect to existing title or rights in respect of property, a court may declare the title or rights, if any, that either party to the relationship has in respect of the property.
(b) in the case of a Local Court, orders of the kind which may be made under section 38(1)(b), (c), (i) and (j).(a) orders as to possession, and
(3) An order under this section is binding on the parties to the relationship but not on any other person.”
13 Assets 2 and 3 were the subject of hire purchase arrangements with Esanda and, as at 26 March 2001, had more owing on them than they were worth (see Exhibit “A”) so they were not assets in which Vanessa had any interest as at the termination of the relationship. Subject to the negative equity, I do not need to consider these assets further, as their subsequent sale could not have been intended to, or had the effect of, defeating an order of the court in favour of Vanessa over those assets unless perhaps she could demonstrate that at the time of sale of those assets Victor had a net surplus of assets over liabilities. His evidence was that the effect of the sale was to reduce his liabilities but that he remained significantly in debt to others. This was not tested in cross examination or contradicted by any other evidence.
14 So far as the W Series truck (asset 1) is concerned, Vanessa’s case is that it was purchased by Victor from a Mr Boland for $45,000 with money lent by Mr Morris for that purpose. Victor admits that he borrowed $45,000 from Mr Morris, together with Vanessa, but denies that he bought a truck from Mr Boland. He says the truck was bought by his brother, Matthew, from Mr Boland, and Victor had the use of it and was required to maintain and repair it. He says that in recent times, he returned the truck to his brother.
15 In support of Vanessa’s contention that Victor bought the truck, are the following items of evidence:
A(1) Vanessa’s evidence that Victor told her he was buying the truck but would have it registered in Matthew’s name because he, Victor, did not hold a New South Wales driver’s licence;
(2) Her evidence that she accompanied Victor, together with Matthew and Emenuel, to Mr Boland’s premises to take collection of the W Series;
(3) Vanessa’s evidence that $45,000 had been borrowed from Mr Morris, for the purpose of buying the truck, in April 1995, with a bill of sale entered into on 12 April 1995 (see Annexure A to Vanessa’s affidavit of 22 April 2004);
(4) Mr Morris’ evidence, corroborating Vanessa’s evidence, in item (2) above and indirectly (1) above;
(5) Evidence that Victor described himself as owning a 1985 Kenworth truck in the statement of assets which he completed in February 2002 and also in other documents contained in Exhibit “A”;
(6) Evidence that Victor claimed a tax deduction for a replacement truck engine in the amount of $21,356;
(7) Evidence that Victor did withdraw precisely that amount of $21,356 from his bank account in the relevant financial year (see Exhibit “F”), notwithstanding his evidence that he did not spend money on an engine for the vehicle;
(9) Evidence that Vanessa did feature in the RTA documents, although there was ambiguity as to its precise significance.(8) Evidence that he effected insurance on the vehicle (see Exhibit “D”), although see B(3) below;
16 In support of the contention that Matthew owned the vehicle there is:
B(1) Victor’s evidence that although he borrowed $45,000 from Mr Morris, he did not in fact use it for purchase of the W Series truck. He refused to explain what $30,000 of the funds were used for on the grounds that it might incriminate him and was not pursued on the use of those funds.
(2) Matthew was registered as owner of the W Series truck from 1995 onwards.
(3) In insurance policies effected by Victor, the insurance policy for the W Series truck noted that Matthew and a company called Kiskis Pty Limited, in which Matthew and his father were shareholders, were insured for their respective rights and interests. There was no evidence that Kiskis had bought the vehicle. It was agreed, as I say, that Kiskis is a company then controlled by Matthew and Emenuel.
(5) The fact that Matthew and Emenuel went to Mr Boland’s premises is also relied on as evidence in support of Victor’s claim that they, and not he, were the purchasers.(4) In a claim form in 1996, Victor described Matthew as registered owner of the vehicle, although, on either version, that was correct;
17 There is also, in a sense, support for Matthew being the owner of the vehicle found in Exhibit “1D9”, two receipts made out by Vanessa showing her as having received $20,000 from Matthew, in respect of the W Series truck. Vanessa’s evidence, however, was that she had written the receipts out at the request of Victor and she had not received any money from anyone (one referring to “with faults” (No 15) was written second, she said, and intended to replace the earlier one (No 16)). It was not Victor’s case, nor Matthew’s case, that Matthew bought the vehicle from Vanessa, she having bought it from Mr Boland. The circumstances are murky, Vanessa’s assertion that Victor had lost his licence, in New South Wales, gains support, by his having obtained a Western Australian licence and him having given a fake address in his claim form (see Exhibit “1D6”).
18 I should at this point mention that Mr Pluznyk, who appears for the third and fourth defendants, objected to the tender against his clients of documents containing admissions by Victor to the effect that he owned the W Series truck, and ownership of the motor bikes is in the same category. Mr Pluznyk relied on s 83 of the Evidence Act. Mr Clifton conceded that he could not rely on the admissions, contained in these documents, as against Matthew or Matthew’s company. This links to a wider and more fundamental difficulty to which I shall return.
19 There is a significant issue of credibility as between Vanessa and Victor. Matthew did not give evidence. I accept Mr Clifton’s submission that Vanessa stood up well to cross examination. She appeared to me, overall, to be an honest witness, notwithstanding her admission that she had taken part in acts that did not reflect well on her, signing the receipts (I comment further on this later), and drawing welfare for a short period when she was not entitled – the latter matter being the subject of a certificate under s 128 of the Evidence Act. She did seem evasive about when she had decided the relationship ended and its link to her copying documents relating to the business, but I do not regard this as significant. It was also submitted that she had, in her affidavit, said that she was a partner in the business, but she clearly resiled from that in her oral evidence. The fact is that she had been described as a business proprietor in the bill of sale (Annexure A to her affidavit) and had, with Victor, made herself liable for repayment of the $45,000 and had helped, to some degree at least initially, with Victor’s business, so it is not difficult to see how some confusion about her role may have crept in. Vanessa was not able to produce the book from which the receipts came (found in Exhibit “1D9”) but the first time that the book was sought, by the defendants, was during the hearing and it was not put to her that she had deliberately disposed of it. It was also pointed out, in submissions, that Vanessa was wrong in asserting that she, Victor, Matthew and Emenuel, had all visited Mr Boland, to buy the W Series truck on a long weekend. The dates of the receipt and the registration, at the RTA, excluded the possibility that the purchase had taken place on a weekend. I accept that Vanessa believed that this was the position, even if it is not correct. I prefer the evidence of Vanessa to Victor where it is in conflict with Victor’s evidence. One very significant element in this conclusion, is the fact that Vanessa’s version of the loan, from Mr Morris, was corroborated by Mr Morris, who was unchallenged by cross-examination, and no explanation was offered by Victor as to why he had told Mr Morris that the loan was for the purpose of buying a new truck when, on his case, it was borrowed for other purposes. Also Victor offered no convincing explanation for the reference in his taxation return to a deduction or depreciation claimed for purchase of the engine for a truck or the reference in documents signed by Victor relating to his ownership of the 1985 truck (see documents 3, 4 and 10 in Exhibit “A”). I accept Vanessa’s evidence, in all respects, in which is it in conflict with Victor’s. Accepting, as I do, her evidence, I find on the balance of probabilities, that the 1985 truck was purchased with monies lent to both Victor and Vanessa and that registration of the vehicle is not a guide to beneficial ownership of the truck.
20 Vanessa signed a receipt to Matthew for the vehicle in 1995 and noted the receipt, by her, of $20,000, when in fact, she did not receive any money. That receipt seems to have played some part in the process leading to Matthew’s registration (see document 19 in Exhibit “A”) but Vanessa was not aware how it was achieved and the documentation is not clear. No documents revealing the transfer of title from Mr Boland to Vanessa or Mr Boland to Matthew were produced by the RTA in answer to a subpoena. Mr Boland was not called by any party. Matthew did not give evidence and Victor’s evidence shed no light on the subject. In a context where Vanessa, through her counsel, laid great weight on the fact that Victor has signed documents, provided to Esanda, as finance provider, in which he describes the truck as having value of $110,000 (see document 10 in Exhibit “A”), the fact that Vanessa had signed a document which was, on its face, consistent only with the transfer of the 1985 truck, seemed to me to have significance. Vanessa was content to see Matthew registered as owner of the 1985 truck and prepared to sign a document that, on its face, gave Matthew the right to assert ownership of the vehicle, following purchase from her. As registered owner, Matthew becomes liable to others by virtue of the legislative provisions. I think the significance of the receipt is twofold. First, it does not reflect well on Vanessa’s probity; second it leads me to doubt whether it is just and equitable to treat the vehicle as being owned by Victor, when Vanessa herself, has executed documentation that points to ownership in Matthew.
21 The latter point was raised by me in submissions and adopted by Mr Bliim and Mr Pluznyk but no authorities were cited to me. The learned authors, Meagher, Gummow and Lehane, Equity Doctrines and Remedies (fourth edition) refer to Cory v Gertcken (1816) 2 Madd 40; 56 ER 250 and Overton v Banister (1884) 3 Hare 503; 67 ER 479, as cases which illustrate the maxim “he who comes into equity must come with clean hands”, para 3-110-135, being cases where infant plaintiffs represented to their trustees that they were of full age, thus inducing the trustees to advance money, and who when seeking to hold the trustees liable for amounts lent in breach of trust, were not able to rely on the protection of infancy. This, of course, is not an equity suit, but Vanessa is only entitled to adjustment on the basis of what is just and equitable, pursuant to s 20, which raises the same equitable principles.
22 Mr Morris, the lender, was not told that Matthew would be the owner but Victor and Vanessa have repaid all of the money lent. Although not free from doubt, I have come to the view, however, that as between Vanessa and Victor, the fact that Vanessa dishonestly, at the direction of Victor, made out the receipt, ought not preclude her from being treated as having an interest in this asset (see on the restriction of the defence para 3-130 of Meagher, Gummow and Lehane, supra). Vanessa did not induce Victor or Matthew to believe that the vehicle was owned by Matthew. They both knew that the money, which had been used to buy the truck, had come from a loan to Victor and Vanessa.
23 The only evidence of the value of the truck is what it was bought for in 1995 (ie $45,000) and what Victor said it was insured for (ie $110,000), as at 7 February 2002 (see document 10, Annexure A). And given its inclusion, at that figure, in Victor’s statement of assets, I treat that as a statement by Victor as to what he thought it was then worth and hence relevant to the question of its value. I have noted that it is agreed by Vanessa that the latter figure is not admissible as against Matthew. It was argued that Victor, in describing the vehicle as an asset, was not describing the vehicle as one owned by him. I do not accept that this is an appropriate view of matters, nor do I accept the submission that it was incumbent on Vanessa to call evidence of what is meant in accounting standards by “asset”. In any event, by showing the figure of $110,000, with no corresponding debt, Victor was representing that he had an equity in the vehicle.
24 The evidence concerning the bikes is as follows. According to Vanessa, Victor purchased a Shovelhead (asset 9), from someone in Melbourne for $8000 and Victor borrowed that money from Matthew, which he never repaid. Before separation, he carried out extensive modifications to the bike, according to Vanessa’s evidence, and Victor told Vanessa, in 2002, that he had spent more than $40,000 on it. After separation, Vanessa went to the house to collect some furniture and clothes for their three children. Vanessa says that Victor refused to let her take anything until she “signed over” the bike and the Jaguar for $1000 to Matthew. She says in her affidavit that she never received any money (see para 34). Mr Bliim asserted that in cross-examination she agreed that she had received $1000. My notes, and I do not have transcript of the evidence, point to her agreeing that that is what the receipt showed. I do not think she agreed that she had received the money and it was not put to her that para 34 of her affidavit was incorrect. It appears that Matthew was owed $8000 for the loan for the bike but it is also clear that $1000 did not represent the value of the bike and the Jaguar.
25 It appears, from Victor’s statement of assets, that he owned three bikes and not one (see document 10, Exhibit “A”). There are also references to bikes in some of the other documents in Exhibit “A”. It is clear that Matthew owned a Fat Boy Harley Davidson. Given the position with the Shovelhead and the 1985 truck and the statements of assets, I do not think it can be confidently accepted that as at 2 March 2001 Victor had no interest in two other bikes, but what interest Victor had in which bike is unclear. Vanessa did identify a photograph of a Fat Boy (Exhibit “1D2”) as being Matthew’s. I do not think that is necessarily inconsistent with her evidence that Victor did own a Fat Boy, but no other registration has been suggested than the Fat Boy which is asset 11. There is no evidence concerning the Kenny bike.
26 I conclude that the Shovelhead motorbike ought be treated as an asset of the relationship but account will need to be taken of the debt of $8000 owing to Matthew at the time of separation. For the reasons I have indicated, I do not regard any other motorbikes as being available to be treated as assets of the relationship.
27 So far as the Jaguar is concerned I treat its retention by Victor (through Matthew) as equivalent to the Statesman which Vanessa retained. The next issue related to Vanessa’s evidence that Victor had told her that he had discussed the question of his late father’s estate with Matthew and that he (“Victor”) would be “looked after”. Victor denies that conversation and denies that he had any arrangement with Matthew or his other siblings concerning his father’s estate. I accept Vanessa’s evidence of the conversation.
28 Vanessa’s case was that Victor is entitled to a 20 per cent share of a property at Prestons because there were five children and Matthew is now the sole owner and occupier of the property. Mr Clifton argued that the interest of Victor was a beneficial interest, which arose out of an agreement between Matthew and Victor, whereby Victor agreed not to bring a family provision claim against the estate of his late father.
29 There is some evidence which suggests that Victor did think of himself as having an interest in the property, not only the conversation to which Vanessa deposed to, but also a document of the finance broker (see Annexure A to the affidavit of Mr Garland). Mr Garland in an affidavit sought to explain the reference in the notes and was not required for cross-examination. There are, however, a number of problems with the claim:
1. There is no evidence from Victor or Matthew that there was a discussion about the estate.
2. Even if one could infer, from the conversation deposed to by Vanessa, that there was a conversation between Matthew and Victor, in which Matthew had promised to look after Victor, nothing was mentioned to Vanessa about suing Matthew or forbearing to sue, and I do not think the inference that there was such an offer of forbearance can be drawn. If there was no consideration for the offer, no authority was relied upon to establish that the mere offer alone, if made, would found an entitlement in Victor to an interest in the land, leaving aside any difficulties with the absence of writing (see s 23C of the Conveyancing Act 1919).
3. Even if Victor did have an interest in the estate, there is evidence that Matthew was already a tenant in common as to 60 per cent of the property as at 1992 (see Exhibit “3D1”). Whilst there is evidence that the property, as at 24 October 2005, was worth $2.5 million, which I accept, there is no evidence of what the 40 per cent interest was worth, as at March 2001, and more importantly, no evidence of what liabilities were owed by the estate to enable a view as to what 20 per cent of the estate equates. It could not be inferred, in my view, that the promise was 20 per cent of the property, rather than 20 per cent of the net residue.
4. Whilst dispositions under a will can, in circumstances where it is just and equitable to do so, be treated as part of the joint assets, that is not necessarily the case because it is not something which has resulted from joint exertions of the partners (see Powell v Supresencia (2003) 30 Fam LR 463). If there was a right to a share of the estate, it is quite unclear what that right would be and it is not obvious why it should be included. Document 12 suggests that there was a specific reason for Victor being left out of the will, namely separation from his then de facto wife, a matter potentially relevant to the issue about any family provision claim. This was not explored in the evidence.
30 I am not satisfied on the balance of probabilities that Victor has an interest in the Prestons property.
31 It follows that there were two assets, the 1985 W Series and the Shovelhead, which Victor either owned or had a beneficial interest in as at 26 March 2001.
32 The Court has no evidence of valuations of either item of property as at 26 March 2001 or since. Such material as can be gleaned in relation to the W Series is not tendered against Matthew. Some of the material that can be gleaned in relation to the Shovelhead is not tendered against Matthew.
33 The fact that the Court is placed in this situation is unfortunate, but conscious of the need to bring finality to the matter and the relationship having ended in 2001 and given the existence of some material on which I can form a view, I shall endeavour to form a view as to what value should be placed on the W Series and the Shovelhead respectively.
34 In coming to a view in relation to the W Series, I place considerable reliance on the estimate, of $110,000, given by Victor to insurers and to Esanda. I take into account that he bought the truck for $45,000 in 1995 and spent more than $21,000 on a new motor and approximately $40,000 on other items (see document 2 in Exhibit “A”), that he was fastidious in maintaining and repairing the vehicle (see Exhibit “A”, document 2, pages 1 and 2). I will treat the vehicle as being worth $90,000 as at 26 March 2001. Mr Bliim and Mr Pluznyk both argued that Victor was demonstrably unreliable in what he said to Esanda, and others, and submitted that no credence could be placed on his indication of value. I accept that there may have been an element of inflation in the figure, but it is an admission by Victor, that I am entitled to take into account, along with other evidence such as that in Exhibit “A”, document 2.
35 In coming to the view about the Shovelhead, I place considerable reliance on Victor’s statement to Vanessa (see para 32 of Vanessa’s affidavit) that as at 2002, he had spent $40,000 on the bike and Vanessa’s evidence, that he had done considerable work on the bike before separation (see para 31 of her affidavit), and that he described the three Harley Davidsons as being worth $90,000. I take into account that the vehicle was purchased for only $8000, in the mid 1990s, but I conclude that the Shovelhead had, as at 26 March 2001, a value of $35,000.
36 Vanessa was, subject to the matters which I shall refer to in a moment, entitled to 50 per cent of the value of those assets. There are, however, several other factors which need to be taken into account. First, Vanessa cannot take the benefit of the unencumbered W Series truck, without recognition of the monies owing on assets 2 and 3. From Exhibit “A”, it appears that almost $15,000 was owing on the truck and trailer purchased during the relationship. However, the W Series truck was taken by Victor, used by him as an asset for his business, and in his business, until he left the truck with Matthew and no compensation for that use has been allowed. The Shovelhead was available to Victor from the time of separation, through his brother, without any recompense to Victor.
37 Taking these matters into account, I think Vanessa should have 50 per cent of the value of both the W Series truck and the Shovelhead without any further deduction, leading to a total amount of $62,500.
38 I think the appropriate order, pursuant to s 38(d), therefore, is that Victor pay to Vanessa, a lump sum of $62,500 and to do so within a reasonably short period. I will hear submissions about the timing of that.
39 What I have said above relates to the position as between Vanessa and Victor. During submissions, I raised with counsel the question of whether any difficulty with the valuation evidence could be overcome by ordering the sale of the W Series and the Shovelhead. Mr Pluznyk, supported by Mr Bliim, opposed any such course, due to the absence of any reference to such relief in the Amended Statement of Claim. Mr Clifton argued that he did not need to plead the relief sought, a view which I was not inclined to accept and I invited him to seek to amend the Amended Statement of Claim, which he sought to do (see Exhibit “C” on the application to amend).
40 Mr Pluznyk, again supported by Mr Bliim, opposed the grant of amendment, relying on State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 and, in particular, the judgment of Kirby J, and also on the basis that the amendment was futile because of the limitation provisions in s 18 of the Property (Relationships) Act 1984 and because of s 8(3) of the Act, to which I shall return in a moment. On the first point, he asserted prejudice to the third and fourth defendants because they were not on notice of the relief now sought and that had they been, they would have put on affidavit evidence. Mention was also made, from the bar table, of the fact that Matthew has undertaken work on the W Series recently and has borrowed money from Esanda, who now have a charge on the vehicle.
41 I must say that I was very surprised at these submissions when they were first made. I had understood that ownership of the W Series was a key matter contested by Vanessa, Victor and Matthew. I indicated that given the time they were made, ie approximately 3pm on the fifth day of hearing, I would consider the matter in the context of my substantive judgment and indicate to the parties today, what course I would take in relation to the amendment. I formed the initial view that a tactical decision having been made not to call evidence from Matthew about any matter, that it was not appropriate to permit any attempt to revisit that decision. Mr Clifton vigorously opposed any attempt by the defendants to delay matters or to put any further evidence on any topic, although having heard for the first time that the W Series was encumbered to Esanda, he was naturally interested to hear more about that. Esanda, it should be noted, was by leave joined, but the case against it was discontinued.
42 I have listened to the tape of the matter for the first hour on 28 November, the first day of hearing, and I have also examined the correspondence passing between Vanessa’s solicitors and the solicitors for the third and fourth defendants (see Exhibits “A” and “B” on the application for leave; Exhibit “A” was also an exhibit in another application), and I think it is plain that Vanessa was seeking a charge over the W Series and over all three motorbikes, the subject of claim. The relief, the subject of the amendment, involves the same issues as those on which Mr Clifton opened, without objection, on 28 November. I do not think there is any basis for reliance on J L Holdings, supra, in such circumstances, insofar as it is asserted that an order for sale pursuant to s 38 could not be made. I think the amendment is linked to some wider issues, which are already matters with which I will need to deal and, in the circumstances, I think it is appropriate, that I allow the amendment and now deal with those matters.
43 The issue of limitation period was not only raised at the time of amendment, it is also a matter relied on by the third and fourth defendants in their defence. Section 18(1) of the Act provides that “an application to a court for an order under this Part can only be made within the period of 2 years after the date on which the relationship ceased, except as otherwise provided by this section”. Section 18(2) does provide for the Court to extend time on application by a party to a domestic relationship. No application had been made in this case, so s 18(1) is the only provision relevant.
44 Mr Pluznyk argues that the orders which are sought by Vanessa against his clients, whether originally when his clients were joined or now by the amendment, are not brought within the s 18 time limit. It should be noted that Part 3 commences with s 14 and ends with s 43. Thus ss 38 and 42 are within Part 3, and on its literal terms, covered by the limitation period in s 18.
45 Mr Clifton pointed out that since s 42 deals with dispositions intended to, or having the effect of, defeating an existing or anticipated order, s 18 cannot be read as imposing a two year limit. I think it is clear that s 18 cannot be read as relevant to s 42 because s 18 is initiation of proceedings pursuant to the Act. Section 42 specifically contemplates action being taken under s 42, even after orders have been made. The two year limitation period, in my view, cannot apply to s 42. There remains, however, another issue, which is whether s 18 is relevant to an application for an order against a person who was not a party to the relationship but not brought under s 42 of the Act. This links to a wider and more fundamental point. Leaving aside s 42 claims, what power is there to join a third party for orders under s 38?
46 In this context, it is important to note the provisions of s 8. Section 8 gives the court power to declare interests in relation to property but, given the terms of s 8(3), I think it is clear that the power to make declarations is limited to declarations binding as between the two parties to the relationship. Section 43 does not add any separate power. In my view, there is no power to add third parties to obtain orders of the Court that bind them, save in relation to s 42. If I am wrong in that view, then I can see no reason why the limitation in s 18 does not apply to such an application. This application would therefore be out of time because the application against Matthew, and his company, was not brought until this year.
47 It is clear that the 1985 W Series was not transferred in order to defeat Vanessa’s entitlement, and it was not argued that the disposition of legal interest that occurred in 1995 met the requirements of s 42. So far as the Shovelhead is concerned, I think it is clear that it was disposed of in 2001 (see Exhibit “1D8”), but it was not the subject of the transaction in 2004. Vanessa’s affidavit did deal with the issue, which was clearly relevant to the case against Victor. The pleadings in relation to the s 42 case, all refer to events post-October 2002. Although, as I have noted, an amendment was sought to include orders in respect of the Shovelhead, which amendment I have allowed. No case was mounted on the pleadings as filed, that the disposition to Matthew in 2001 was in breach of s 42. I do not think that it is a dispute of which the Court is seized and therefore I do not need to consider whether the disposition of the Shovelhead, in 2001, was made in order to, or with the effect that, orders which might be made by the court would be defeated.
48 Given what I have said about the position as between Vanessa and Matthew, I do not think there is any order that can be made requiring Victor to transfer the truck, that will be of any utility, given its lack of binding character on Matthew.
49 I note that whilst it is possible that an order requiring Victor to pay a lump sum of $60,000 will not be able to be met by Victor, I have referred to his evidence concerning unpaid debts, and no evidence of his overall financial position (ie assets owned or controlled by him) was adduced, the obviously close connection between the brothers, living in the same house at various times, the expressed expectation by Victor that Matthew will help him out of their father’s estate, suggests that there is a real prospect that Matthew will assist Victor to meet his obligations if Victor is in fact unable to otherwise find funds to avoid bankruptcy.
50 Accordingly, I order that the first defendant pay to the plaintiff a lump sum of $62,500.
0
2
3