Macguire and Macguire & Ors
[2018] FamCA 750
•21 September 2018
FAMILY COURT OF AUSTRALIA
| MACGUIRE & MACGUIRE AND ORS | [2018] FamCA 750 |
| FAMILY LAW – PROPERTY – Final orders – Where the wife and husband have been married for 18 years – Where they each brought properties into the marriage – Where the wife acquired an interest in a number of properties during the marriage together with her parents – Where the husband made improvements to the property of the parties during the marriage – Where post separation the wife continued to have primary care of the children – Where there has been a lengthy post separation period from 2008 to the hearing in 2016 – Where the wife made greater financial contributions and greater contributions as parent and homemaker during the marriage and following separation – Where the husband made greater non-financial contributions through improvements to the property – Where contributions are assessed to be 57.5 per cent in favour of the wife. FAMILY LAW – PROPERTY – Equity – Where the husband asserts that he holds an equitable interest in a property legally owned by the wife and her parents due to representations made by the wife and her father during the marriage – Where the husband argues that due to a reliance on these representations he made improvements to the property – Where there is insufficient evidence that those representations were made – Where the husband did not contribute to the purchase of the property and has no legal interest in the property. FAMILY LAW – PROPERTY – Where the wife holds a one-quarter legal interest in a property and argues that she holds this interest on trust for her parents – Where the wife’s parents hold a legal interest in the remaining three-quarters of the property – Where the wife says that she did not contribute to the deposit or the mortgage repayments – Where there is insufficient evidence to rebut the presumption of advancement – Where the Court is satisfied that the wife’s legal interest should be reflected in the balance sheet. |
| Child Support (Registration and Collection) Act 1988 (Cth) Family Law Act 1975 (Cth) ss 75, 79, 81 |
| Brown v Brown (1993) 31 NSWLR 582 Callaghan v Callaghan (1995) 64 SASR 396 Calverley v Green (1984) 155 CLR 242 Cerini & Cerini [1998] FamCA 143 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Dullow v Dullow (1985) 3 NSWLR 531 Jones v Dunkel (1959) 101 CLR 298 Nelson v Nelson (1995) 184 CLR 538 Ramsden v Dyson (1866) LR 1 HL 129 Stanford v Stanford (2012) 247 CLR 108 | ||
| APPLICANT: | Ms Macguire | |
| FIRST RESPONDENT: | Mr Macguire |
| SECOND RESPONDENT: | Mr Birtles |
| THIRD RESPONDENT: | Ms Birtles |
| FILE NUMBER: | PAC | 4818 | of | 2011 |
| DATE DELIVERED: | 21 September 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 1 – 5 August 2016, 23 August 2016, |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Campton SC |
| SOLICITOR FOR THE APPLICANT: | Diana Perla & Associates |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Givney and Mr Alexander |
| SOLICITOR FOR THE FIRST RESPONDENT: | Vizzone Ruggero Twigg Lawyers |
| COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: | Mr Othen |
| SOLICITOR FOR THE SECOND AND THIRD RESPONDENTS: | Francis Legal Pty Limited |
Orders
Within 28 days from the date of these Orders the wife do all acts and things and sign all documents to transfer to the husband the property at B Street, Suburb C (“the property”), more fully described as folio identifier … (“the transfer”).
Simultaneously with the transfer in Order 1, the husband do all acts and things and sign all documents to discharge the mortgage to Westpac Banking Corporation registered number … and indemnify the wife in relation thereto.
Until the transfer the parties continue to use the rental proceeds on the property to pay for mortgage and outgoings and following the transfer the husband be solely entitled to the rental proceeds received on the property and be solely liable for the mortgage payments, rates, taxes and all other outgoings on the property.
Save as is otherwise provided for in these Orders the wife and husband are declared to be the sole and beneficial owners of their interests in:
(a)any motor vehicle in her or his possession;
(b)jewellery in her or his possession;
(c)furniture and household effects in her or his possession;
(d)money in bank accounts in her or his name;
(e)any shares in her or his name; and
(f)all other assets real and personal, financial resources and superannuation entitlements in her of his possession or ownership.
Except as these Orders provide to the contrary, the wife be responsible for, and indemnify and keep indemnified the husband in relation to, all debts and liabilities in her name (or jointly with any other person or entity).
Except as these Orders provide to the contrary, the husband be responsible for, and indemnify and keep indemnified the wife in relation to, all debts and liabilities in his name (or jointly with any other person or entity).
In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Family Court shall be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument and do all acts and things necessary to give validity and operation to the said deed or instrument.
The applications and responses of the wife, husband and the second and third respondents are otherwise dismissed.
Leave is granted to the parties to apply within 21 days, on giving at least seven days’ notice to the Court and each other in relation to the wording of these Orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Macguire & Macguire and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAC 4818 of 2011
| Ms Macguire |
Applicant
And
| Mr Macguire |
First Respondent
And
| Mr Birtles |
Second Respondent
And
| Ms Birtles |
Third Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings in relation to property settlement following the breakdown of an 18 year marriage. The wife seeks orders including an order that the husband transfer a property at Suburb C to her, subject to a mortgage. The husband seeks orders including orders against the wife’s parents. He seeks that properties in the name of the wife and her parents be included in the pool of assets available for division between the husband and wife. The wife’s parents are the second and third respondents and they seek that the orders sought by the husband be dismissed and that a declaration be made that the wife holds her interest in a property on trust for them.
The major issues in the proceedings relate to the identification of the assets and liabilities of the wife and husband. The integrity of the outcome of property settlement proceedings depends on reliable information about the financial circumstances of the primary parties. Here, much of the information about the financial arrangements of the wife and husband is unreliable, particularly the information about their financial arrangements with members of their respective families. The problems are exacerbated by the fact that each of the wife and husband contends that the legal title of some properties does not accurately reflect their beneficial ownership. In some instances the wife and husband concede that they have incorrectly reported their interest in assets or have done nothing to correct the records of public authorities, whether the land titles office or the Australian Taxation Office (“ATO”).
Each of the wife and husband makes allegations of non-disclosure and diversion of matrimonial funds against the other. Ultimately, they had as much trouble in supporting their various allegations as they did in justifying the representations made about their own circumstances. Suffice it to say, I am far from confident about identifying the true financial position of the wife and husband.
Applications
The wife sought orders in terms of a Minute of Order tendered on 25 August 2017[1] included in her Case Outline document as follows:
[1] Exhibit 40.
1.That within 28 days of the date of these Orders the husband do all acts and things and sign all documents to transfer to the wife “the property” at [B Street, Suburb C], more fully described as folio identifier ...
2.Simultaneously with “the transfer” in Order 1, the wife do all acts and things and sign all documents to discharge the mortgage to Westpac Banking Corporation registered number #55 and indeminfy [sic] the husband thereto.
3.Until the transfer the parties continue to use the rental procceds [sic] to pay for mortgage and outgoings and following “the transfer” the wife be solely entitled to the rental proceeds received on the property and be solely liable for the mortgage payments, rates and taxes on the property.
4.That except as provided herein, the Wife be solely entitled to and the Husband has no interest in:
a)Any motor vehicle in her possession;
b)Jewellery in her possession;
c)Furniture and household effects in her possession;
d)Money in bank accounts;
e)Any shares that she has in her name;
f)All other assets real and personal, financial resources, or superannuation entitlements, in her possession or ownership.
5.That except as provided herein, the Husband be solely entitled to and the Wife has no interest in:
a)Any jewellery in his possession;
b)Any motor vehicle in his possession;
c)Furniture and household effects in his possession;
d)Money in bank accounts;
e)Any shares that he has in his name;
f)All other assets real and personal, financial resources, or superannuation entitlements, in his possession or ownership.
6.That except as these Orders provide to the contrary, the Wife be responsible for as against the Husband, and indemnify and keep indemnified the Husband in relation to all debts and liabilities in her name (or jointly with any other person or entity).
7.That except as these Orders provide to the contrary, the Husband be responsible for as against the Wife, and indemnify and keep indemnified the Wife in relation to all debts and liabilities in her [sic] name (or jointly with any other person or entity).
8.That except as these Orders provide to the contrary each party otherwise release the other from any debts owing to each other.
9.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Family Court shall be appointed pursuant to Section 106A of the Family Law Act to execute such deed or instrument and do all acts and things necessary to give validity and operation to the said deed or instrument.
10.The Husband pay the wife’s costs of and incidental to these proceedings.
The husband sought orders in terms of a Minute of Order tendered with his submissions on 25 August 2017[2] as follows:
[2] Exhibit 41.
1.Declaration that the Husband and the Wife are the beneficial owners as tenants in common of the properties situate and known as [1 and 2 D Street, Suburb C].
2.The Husband shall surrender and otherwise do all acts and things necessary to transfer to the Wife his right title and interest in the property at [1 and 2 D Street, Suburb C].
3.The Wife shall within 28 days of the date of these Orders transfer to the Husband her right title and interest in the property situate at and known as [B Street, Suburb C].
4.The parties shall forthwith do all acts and things necessary to see [sic] the property at [3 D Street, Suburb C] and in respect of such sale the following shall occur:-
4.1.The parties shall place the property in the hands of a licensed auctioneer to sell the property within six weeks of the date of these Orders.
4.2In the event the parties cannot agree with a reserve price agreed between the parties [sic].
4.3In the event the parties cannot agree as to the reserve price at auction then the parties or either of them shall request the President for the time being of the Real Estate Institute [New South Wales Division] to appoint his or her nominee to assess the reserve price at auction and the parties shall be bound by such assessment and equally bear the cost.
4.4Upon sale the proceeds of sale shall be paid as follows:
4.4.1.In payment of agent’s commission and legal fees occasioned by the sale.
4.4.2.In discharge of the mortgage secured upon the property.
4.4.3.In payment to the Husband of 77 percent of the then proceeds of sale.
4.4.4.In payment to the Wife of the balance.
5.The Husband is declared sole and beneficial owner of:-
5.1.[E Street, Suburb F];
5.2.[G Bank] Investment Plan;
5.3.H Bank [J Pty Ltd Account];
5.4.Motor vehicle 1;
5.5.Motor vehicle 2; and
5.6.Household contents.
6. The Wife is declared sole and beneficial owner of:-
6.1.K Street, Suburb L;
6.2.One-third share[3] in M Street, Suburb N;
6.3.O Street, Suburb C;
6.4.3 D Street, Suburb C[4];
6.5.1 and 2 D Street Suburb C;
6.6.Funds in CBA account;
6.7.Household contents; and
6.8.Jewellery.
[3] I understand that the share in question is a one-quarter share.
[4] I understand that the husband seeks that this property be sold but that the wife receive the net proceeds of sale.
The second and third respondents sought orders in terms set out in the Case Outline Document submitted in their case and tendered on 25 August 2017[5] as follows:
1.That the relief sought by the First Respondent Husband at paragraphs 1-8 of his Amended Respondent to Initiating Application filed 3 September 2014 is dismissed.
2.A declaration that the Applicant [Ms Macguire] holds all of the interest presently registered in her name in and to the property situated at and known as [1 and 2 D Street Suburb C] in NSW more particularly described in Folio … on trust for, and in favour of, the Second and Third Respondents.
3.That the First Respondent pay the costs of the Second and Third Respondents on the indemnity basis.
(Footnotes omitted)
[5] Exhibit 42.
Documents Read
The parties relied on the following documents:
Documents relied on by the wife:
·affidavit of the wife sworn 24 September 2015;
·affidavit of the wife sworn 29 June 2016;
·Financial Statement sworn 29 June 2016;
·affidavit of Dr P filed 25 September 2015; and
·affidavit of Dr P filed 18 July 2016.
Documents relief on by the husband:
·affidavit of the husband sworn 2 September 2014;
·affidavit of the husband sworn 14 July 2014;
·affidavit of the husband sworn 22 July 2016;
·affidavit of the husband sworn and handed up in Court on 1 August 2016;
·affidavit of Mr Q Macguire filed 28 July 2016;
·affidavit of Ms R sworn and handed up in Court on 1 August 2016;
·Financial Statement filed 29 July 2016;
·Financial Statement filed 22 July 2016; and
Documents relied on by the second and third respondents:
·Cross Claim and Points of Defence filed on 16 February 2015; and
·affidavit of Mr Birtles filed 16 November 2015.
The Hearing
The case was listed for hearing over five days commencing 1 August 2016.
By 4 August 2016 the parties had neither agreed nor provided evidence about the value of some properties. On that day the following orders were made:
1.By consent, orders are made in accordance with the document titled “Husband’s Proposed Minute Of Order” (Exhibit A dated 4 August 2016), as set out hereunder:
1.In the event the Husband and Wife are unable to agree to the values of the properties listed in this Order by 4:00pm 8 August 2016 then the Husband and the Wife shall appoint a single expert to value the following properties:-
1.1 [O Street, Suburb C];
1.2 [1 and 2 D Street Suburb C];
1.3 [M Street, Suburb N];
1.4 [3 D Street, Suburb C];
1.5 [K Street, Suburb L];
1.6 [B Street, Suburb C]; and
1.7 [S Street, Suburb T].
2. To give effect to Order 1 the following shall apply:-
2.1The Husband’s solicitors shall provide three names of valuers together with CV and proposed costs to the Wife’s solicitors by 4:00pm 15 August 2016.
2.2The Wife through her solicitors shall nominate a valuer from the list provided by 4:00pm 22 August 2016 and upon such nomination the parties shall jointly instruct the valuer to prepare the valuations.
2.3Each party shall pay one half of the costs of the valuations so obtained.
2.Leave is granted to the parties to restore the proceedings to the list upon the release of the expert’s report.
3.[Mr U] is discharged as singe [sic] expert valuer.
An application was made on behalf of the respondent husband for a view in respect of work done at the premises at 1 and 2 D Street Suburb C (“1 and 2 D Street”). The application was opposed by the wife and the second and third respondents and the application was refused.
The application was made in aid of the husband’s claims in respect of non‑financial contributions to that property. It was submitted that a view would assist in understanding the significance of the work in question. The application was opposed on the basis that it would add to the time of the trial; that the work in question was undertaken a substantial time ago; that the husband’s evidence in chief was put in general terms and at a view, further evidence would necessarily arise that could and should have been given in chief, being evidence that the other parties may not be able to meet; and that in relation to identified claims, there was no issue about the fact or significance of the work, issue had only been joined in respect of who did the work, who paid for the materials and/or whether one of the parties paid someone else to do the work.
In my opinion, a view offered no appreciable benefit in relation to the disputes before the Court. The husband’s evidence in chief was required in written form. The dispute identified in the evidence largely related to who did the work in question and who paid for it. In my opinion, a view would have added little if anything to the forensic enquiry and ran the risks identified on behalf of the wife.
Despite trial directions, relevant material[6] in the husband’s case was filed late. That included an affidavit from the husband’s brother. It was conceded that no satisfactory explanation was available for the late filing. The evidence was relevant and subject to cost consequences, it was allowed.
[6] Including an updating affidavit on 22 July 2016, an updating affidavit responding to the affidavit of the second respondent (filed on 1 August 2016) and an affidavit of the husband’s solicitor in relation to valuations (filed 1 August 2016)
On 5 August 2016, subject to issues arising out of the orders made on 4 August 2016, judgment was reserved.
Pursuant to leave granted to restore, the proceedings were again listed on 23 August 2016 and further orders were made in relation to valuation evidence for the seven subject properties and an eighth property. Again, leave was granted to restore the proceedings to the list once an expert’s report was filed.
The matter was relisted on 9 December 2016 on the application of the parties in relation to further difficulties being experienced in implementing the orders of 4 August 2016. On 9 December 2016 the following orders were made:
1.Orders are made in the terms of paragraphs 1, 2 and 4 of the document titled “Wife’s Minute Of Order” (Exhibit 1 dated 9 December 2016), as set out hereunder:
1.That the Wife respond to the email correspondence dated 3 November 2016 from [Mr V] of [W Valuers], the Single Expert Valuer in accordance with a letter sent to the Single Expert by Diana Perla & Associates on 3 November 2016. Attached hereto and marked "A" is a true copy of the letter by Diana Perla & Associates dated 3 November 2016.
2.That the Husband and his solicitors be restrained from further corresponding with the Single Expert Valuer until after the release of his Report.
3. deleted
4.That further to the email from the single expert real estate valuer dated 28 September 2016 as to the property at [S Street, Suburb T] being under “extensive renovation” the husband shall disclose in writing to the solicitors for the wife within 7 days:
a)The nature and extent of the renovations, together with any council approved plans.
b) The cost of the renovation.
c)The identity of the person responsible for the management and/or construction of the renovation.
d) The identity of the person paying for the renovation.
2.It is directed that the solicitor for the wife add in relation to the response to the single expert valuer in respect of the subdivision status of [1 and 2 D Street] a statement as to what has been done with the relevant council for approval or any other authority towards implementing the subdivision of the property.
3.The question of the costs of the parties is reserved.
There being no further activity, on 13 March 2017 an email went from my chambers to the solicitors for the parties which included the following:
The final hearing in these proceedings was conducted on 1-5 August 2016. On 4 August 2016 orders were made in terms agreed by the parties to address the possibility that the husband and wife would not agree on the value of one or more of 7 properties. On 5 August 2017, judgment was reserved save for the possibility that further valuation evidence would be filed.
Pursuant to leave to restore, on 23 August 2016 further orders were made in relation to valuation evidence for one or more of 8 properties and again, leave was granted to restore the proceedings to the list once an expert’s report was filed.
The matter was again listed on 9 December 2016 and further orders were made in relation to the instructions to the single expert valuer, disclosure between parties as to renovations and provision to the valuer of information about a subdivision application.
The proceedings will be listed for mention to appoint the date or dates as soon as practicable after the filing of any evidence resulting from the orders made on 4 August 2016, 23 August 2016 and 9 December 2016. In the event that no such evidence is filed by 28 April 2017, the proceedings will thereafter be listed for directions in relation to the completion of the trial, in any event.
On 16 May 2017 an Application in a Case was filed on behalf of the husband seeking leave to re-open his case to give evidence in respect of the living arrangements of Mr X Macguire.
As proposed in the email of 13 March 2017, the proceedings were listed for mention on 24 May 2017. That mention occurred at Parramatta with the husband’s counsel appearing in person and the advocates for the other parties attending by telephone.
On 24 May 2017, by arrangement between the husband and wife a document was tendered setting out their competing positions in relation to the living arrangements of Mr X, who was then 17 years of age. It was agreed that the issue could not be satisfactorily resolved and indeed that there was a state of flux in relation to his arrangements. Ultimately there was an agreed position to the effect that Mr X was then living between his parents’ households in the range of two to five nights per week with the wife and the balance of the week with the husband. An agreed balance sheet (an update to exhibit 38) was submitted and I understood that there were no remaining disputes about the values of assets or liabilities. That contention proved to be premature. There was said to be no significant changes in the circumstances of either of the wife or the husband from the circumstances that applied in August 2016 other than Mr X’s living arrangements. A number of documents were tendered as Exhibit A on 24 May 2017 including a certificate under the Child Support (Registration and Collection) Act 1988 (Cth) as at 10 March 2017 and documents in relation to an Objection Decision reached by the Child Support Agency and dated 12 April 2017. The proceedings were then listed on 25 August 2017 for final submissions.
On 22 August 2017 an Application in a Case was filed on behalf of the husband seeking leave to re-open his case to adduce the evidence of an adversarial expert valuer in respect of two properties. That application was made returnable on 25 August 2017.
On 25 August 2017 the husband’s Application in a Case filed 22 August 2017 was heard and for reasons given on that day, it was dismissed. The parties’ counsel then made/summarised their final submissions. At the conclusion of those submissions, judgment was again reserved.
Given the effluxion of time and the likelihood that relevant circumstances may have changed, on 20 June 2018 an email issued to the parties’ lawyers from my chambers to the following effect:
I refer to these proceedings in respect of which judgment was reserved by Loughnan J on 25 August 2017. It is anticipated that judgment will be delivered in the next month or so. Any application for leave to re-open the evidence of any party must be made by the close of business on 6 July 2018. In the event that such an application is filed, subject to the convenience of the parties it will be listed for hearing on 16 July 2018 at 10 am. In the event that there is no application to re-open filed by 6 July 2018, judgment will be delivered on a date to be notified to the parties, as soon as practicable after that date.
An Application in a Case was filed on behalf of the husband on 6 July 2018. The application sought to re-open the husband’s case and was made returnable on 16 July 2018. The husband subsequently filed a Notice of Discontinuance of his Application in a Case. There being no application to re-open, I was thereafter free to deliver judgment in the property settlement proceedings without further reference to the parties.
More than 12 months has elapsed since the final day of hearing on 25 August 2017. I apologise to the parties for that part of the delay in the proceedings.
Short History
The wife was born in 1969 and at the date of judgment is 49 years of age. The husband was born in 1965 and is 52 years of age. The husband and wife were married in 1993. They separated on a final basis on 3 August 2008 and were divorced on 28 November 2011.
The second and third respondents are the wife’s father and mother. The wife’s father is about 78 years of age and her mother is about 76.
Children
There are three children of the marriage namely:
·Ms Y who was born in 1994 (currently 24 years of age);
·Ms Z who was born in 1999 (currently 19 years of age); and
·Mr X who was born in 2000 (currently 18 years of age).
Credibility
There were some issues in respect of which two or more of the parties gave entirely inconsistent evidence or had entirely inconsistent cases and there is no independent evidence. That means that it is necessary to say something about the credit of the witnesses. In proceedings involving a hearing that commenced more than two years before the delivery of judgment, it is important to also say that observations of the witnesses were made and recorded at the time they gave their oral evidence.
The wife
The wife gave her evidence in a confident manner. However, as with the husband, she has made formal representations to others that are entirely inconsistent with her case and her evidence before the Court. She readily conceded those inconsistencies. The wife said that she made an incorrect statement in her Financial Statement about her ownership of an asset so as to prevent her parents being caught up in these proceedings. Whatever else, that means that she set out to mislead the Court and the husband. On her case that was done for a worthy cause - to protect her parents from an involvement in the litigation. Her motivation aside, damage is done to the wife’s credibility in these circumstances. The wife was an unsatisfactory witness.
Mr Birtles
The wife’s father was not a credible witness. In his evidence in chief he was asked about his health and responded to the effect that he had high blood pressure and some depression. Sadly, he and his wife suffered the loss of a daughter, Ms AA Birtles, who passed away in 2002. He referred to his daughter passing and went on: “added to it because of the house being burned down with my daughter’s…late daughter’s memorabilia was there…it really got me, you know”. At one point he said something to the effect that his deceased daughter’s room had been like a shrine.
When he was cross-examined the wife’s father gave evidence to the effect that he prepared his affidavit in November 2015. He wrote out the contents at his home and that took some time. He and his wife were at home when that was done. He did not recall whether he spoke to his wife about the contents of the affidavit. He does not recall if his solicitor came to his house. He did recall signing his affidavit but not where that occurred. His response to many questions in cross-examination was to the effect that he could not remember. He variously answered: “I can’t remember”, “whatever is in the [affidavit], because I, my memory is not good”, “I don’t remember these things”, “Yes, I think I did”, “not sure”, “I don’t remember the details any more” and “can’t remember”. He repeatedly referred the cross-examining counsel to the contents of his affidavit.
I understood the wife’s father’s evidence to be that his affidavit is correct but that at the time of cross-examination he could not confirm the deposed facts from his memory. The suggestion in the case of the second and third respondents was that it was only after his home was destroyed by fire (I was told that occurred in February 2016), that the wife’s father could not remember things. Presumably, credible support for that proposition would come in the form of evidence, perhaps medical evidence, that linked or associated the events of February 2016 and their sequelae with the deterioration in the wife’s father’s memory or that confirmed the deterioration in that time frame. No such evidence was proffered.
On those facts, it is not possible to find that the wife’s father was a reliable witness in November 2015 when he swore his affidavit.
It is submitted for the husband that the oral evidence of the wife’s father was entirely unreliable and that he is not able to give probative evidence to the effect that he was a competent witness when he swore his affidavit. I agree.
I detected no attempt at guile or dissembling in the wife’s father but, whatever the reason, the fact is that he was unable to support his own affidavit.
The wife’s father was asked whether there was any reason why his wife could not swear an affidavit and he said words to the effect: “she is not with it either… after we lost the house…”.
It is submitted on behalf of the husband that in the absence of medical evidence about the mental health of the wife’s parents an inference arises that any such evidence would not assist their case. There is a reference in the submissions made on behalf of the husband to Jones v Dunkel (1959) 101 CLR 298 (“Jones v Dunkel”) on this point. In my view no Jones v Dunkel inference arises about that medical evidence. The wife’s father was called and he gave his evidence. It was not for him to call evidence to demonstrate that his testimony is unreliable. As to the wife’s mother, the wife’s father gave some evidence in respect of her ability to assist the Court. He was not challenged about that. However, as I will refer to later, in my view a Jones v Dunkel inference does arise from the absence of evidence from the wife’s brother, Mr BB, and from any of the other people who, the wife and her father assert, actually performed disputed building work that the husband also claims to have performed. The wife’s father was asked whether there was any reason why his son, Mr X, could not swear an affidavit and his response was to the effect: “but he’s not involved in anything, he has his own house and he only came and worked on 5A.” I take it that evidence is not available from those the wife’s brother or any other person to corroborate the case of the wife and her parents and/or that their evidence would not assist that case.
The husband
The husband was a very poor witness. It is his own evidence that there are a number of errors in his sworn documents being documents that, immediately prior to cross-examination, he again confirmed were correct. On many occasions during his cross-examination the husband contradicted his own evidence. On several occasions he answered “yes” or “no” about a proposition put in relation to a document only to later say that he did not understand the document. Several questions in cross‑examination were asked several times before the husband answered. That invited speculation as to whether he was trying to construct an answer that would suit his case. The husband said he was not able to answer questions about many of his financial records because he left those matters to his accountant. In a similar vein, as to issues about his financial records or dealings during the marriage, the husband said that he left financial dealings to the wife. On some matters, the husband gave specific evidence – such as the assertion that he and the wife paid $15,000 towards the purchase of 1 D Street, Suburb C (“1 D Street”). It transpired that the husband was not in a position to give credible evidence about this issue. In any event, because the deposit for the purchase was $23,500, the husband’s evidence cannot be reconciled with his contention that the wife’s parents made no financial contribution to the purchase of the property. The necessary inference, on his own case, is that the wife’s parents paid at least the balance of the deposit.
It was put to the husband that since separation he had engaged in an enterprise for buying and selling cars. He responded “Incorrect”. A few moments later he agreed that since separation he had bought and sold “maybe seven cars” and then later, “10 cars max”.
Through a combination of his asserted lack of knowledge of relevant financial arrangements; his asserted inability to understand documents, including those prepared by him or on his instructions; and his asserted and apparent inability to understand questions put to him in cross-examination, the husband was not a credible witness. It is not possible to know the extent, if any, to which the husband set out to mislead the Court but the damage to his reliability as a witness does not depend on the reason for the inadequacy of his evidence. That said, many of the errors in his evidence tended to favour his case.
It was asserted on behalf of the wife that the coincidence of payments of child support (albeit in arrears) at or about the time of Court events reflects poorly on his credit. I disagree. That is not to say that the timing of those payments reflects well on the husband in any sense but it has little if any bearing on his credit.
A very clear example of the problems in making findings of fact in the case was in relation to the fact and extent of the husband’s work on 1 and 2 D Street and, to the extent that he did work, whether or not he was paid for that work. The husband’s evidence about that work was set out in some detail, including at paragraphs 61 and 76 of his affidavit sworn 2 September 2014. As I will refer to later in these reasons there were problems with the husband’s own testimony in that despite apparently distinguishing between work he personally undertook and work he commissioned from others, in cross‑examination he said that some of the former work was done by others. In the context of this case, that undermines the reliability of his evidence. The wife and her father gave evidence to the effect that some of the work claimed by the husband was done by others and that, in any event, the husband was paid for all of the work he did. It was the husband’s evidence that he did the work he claimed and that he was never paid for that work. Thus, issue was joined on the topic. Apart from the husband, the possible witnesses in respect of those matters were:
(a)the wife, who said that she came home from her work and saw her father pay the husband cash for his work;
(b)the wife’s father, who was said to be the person who actually made the payments to the husband and who performed the work or commissioned others to perform the work that the husband claims was performed by him; and
(c)finally, there were the people or agencies who the wife and her father contend performed the work claimed to have been performed by the husband. They include the wife’s brother, Mr BB, and other named contractors including businesses of relatives of the wife’s father.
The wife was cross-examined and was emphatic in her evidence. However, as she did not make any of the payments in question and was not at the property all of the time, she was not in a position to effectively contradict the husband’s evidence or to corroborate that of her father. The effect of the wife’s father’s presentation for cross-examination was that he was unable to support his affidavit or give probative evidence about any contested material fact.
Critically, no invoices or receipts were produced from the people or agencies who allegedly performed the work and neither the wife’s brother nor any other witness was called to give direct evidence about the work in question or to corroborate the evidence of the wife and her father on this issue. No reason was given for not calling evidence from the wife’s brother or from other persons or businesses who did the work, save that it was asserted in the wife’s parents’ case that the issue about the husband’s involvement in the work was not relevant. Appropriately, given that the trial itself spanned more than 12 months, there was no suggestion that there was no opportunity to adduce that evidence. As I have noted above, I assume that evidence was not called to corroborate the contention that other individuals or enterprises performed the work claimed by the husband either because no such evidence is available, or because it would not have assisted the cases of the wife and her parents.
For those reasons I prefer the evidence of the husband over that of the wife and the wife’s father in relation to the work the husband said he performed at 1 and 2 D Street. Unfortunately, as I have mentioned above, the husband conceded during cross-examination that some of the work he deposed to performing, was work that he paid others to perform. I found the husband to be a generally unreliable witness.
Mr Q Macguire
Mr Q Macguire is the husband’s brother. He was cross-examined on behalf of the wife. While there was a direct challenge to the thrust of his testimony in respect of much of his dealings with the husband, he did not resile from his evidence. That said, as with the husband, in respect of the details of record keeping in relation to his business and particular development proposals, he deferred to his wife and accountant. In that sense he had difficulty in supporting some of the propositions found in his case and that of the husband about their financial dealings with each other.
There being no generally reliable lay witness, factual disputes otherwise fall to be determined issue by issue, where that is practicable.
Background Facts
During the 1980s the husband and his brother, Mr Q Macguire, purchased a property at E Street, Suburb F (“E Street”) for $48,000. Their parents gave them $6,000 for the deposit and they borrowed the balance. The husband deposed that his brother paid for the mortgage instalments thereafter.
In 1988 the wife purchased a property at K Street, Suburb L (“K Street”) for $45,500. She purchased it with savings of $8,000 and a loan from Westpac in the amount of $40,000. The property was rented out and the rental income applied to the mortgage.
In approximately 1988 or 1989 a property was purchased by the wife’s parents at M Street, Suburb N (“the M Street property”). At purchase, the wife was registered as a one-quarter owner. The wife deposed that she made no financial contribution to the purchase of that property.
In 1989 the husband and his brother constructed a new house on the property at E Street. The husband was working for his brother at that time.
In approximately 1990 the wife’s parents purchased a property at 1 and 2 CC Street, Suburb L in the name of the wife and the wife’s sister, Ms AA Birtles. This property was sold in approximately 1996 or 1997.
In 1991 the husband’s brother transferred to the husband his share in E Street for $1. It is the husband’s evidence that he and his brother reached an agreement whereby the husband would pay his brother $50,000 at a later date.
The husband and wife were married in 1993 and commenced living together at E Street thereafter.
The wife deposed that she and the husband were separated from July 1993 to March 1994. For most of this time the wife lived with her parents.
In September 1993 it is the wife’s evidence that the wife’s father purchased a property at DD Street, Suburb EE, in her name. The wife’s father built a house on the land and it was later sold. It is the husband’s evidence that he and the wife purchased this property in 1993 for $135,000 and sold it in 1995 for $157,000. I was not able to resolve that dispute.
The husband said that on 2 December 1993 and 4 March 1994 the wife and her parents registered mortgages against the M Street property in the amounts of $196,000 and $236,000, respectively.
In 1994 the husband transferred $50,000 to his brother. The husband deposed that his mother had gifted him $50,000 after his marriage to the wife, and that he then gave it to his brother to repay the debt he owed him for E Street.
On 20 January 1994 a property was purchased at 1 D Street for $235,000. There is a dispute as to the beneficial ownership of this property. The property was registered in the name of the wife and her parents. The wife and her parents borrowed $236,000 and entered into a joint mortgage to secure that debt, registered against 1 D Street and the M Street property. The wife says she paid nothing towards the acquisition of the property, nor towards the mortgage. The husband deposed that he and the wife purchased the property and provided the deposit, but registered the property in the name of the wife and her parents. I will discuss this matter later in the judgment.
In 1994, the first child of the wife and husband, Ms Y, was born.
The wife deposed that the wife and husband separated in November 1994 and again in February 1995.
In October 1995 the wife and husband moved into 1 D Street with their child, Ms Y. They did not pay rent to the wife’s parents but they paid the utilities and rates.
In March 1996 the wife and husband again separated and the wife moved to live with her parents. From this time until July 1997, 1 D Street was leased out and the rental income was collected by the wife’s parents. The wife and husband again reconciled and returned to live at that property. They paid some amounts of rent.
In 1999 a Development Application was lodged in the name of the wife’s father to subdivide number 1 D Street. Another house was built on the land and it became known as 2 D Street, Suburb C (“2 D Street”). There is a dispute as to whether the wife and husband, or the wife’s parents, financed that construction. Although the properties are known as 1 and 2 D Street the property was never formally subdivided and the houses remain on one title.
On 26 March 1999 the wife registered a mortgage in the amount of $55,000 against K Street and paid that money into the 1 D Street loan account. It is the wife’s contention that the payment was by way of a lump sum rental payment to her father for the use of 1 D Street. It is the husband’s case that this money should be characterised as a contribution to reduce the mortgage on 1 D Street. I will discuss that issue below.
In 1999, Ms Z was born to the wife and husband.
In approximately June 1999 the husband and his brother agreed to buy a property, with a view to developing it. The husband’s brother purchased the property and it was later sold. The husband deposed that he did not contribute to or receive any benefit from, that property.
In 2000, Mr X was born. Mr X was later diagnosed with verbal dyspraxia, mild intellectual disability and underdeveloped motor skills.
In 2000 the wife and husband purchased a property at B Street, Suburb C (“B Street”) for $280,000. The house had previously been registered in the name of the wife’s father and her sister, Ms FF Birtles. The wife deposed that they used $30,000 from matrimonial savings and borrowed $280,000. That property has been leased since that time.
In 2002 the wife and husband purchased a property at E Street, F Street (“E Street”) for $570,000. They borrowed the purchase price save for the deposit. It is the wife’s evidence that she paid the deposit of $28,500 from her savings. The husband’s evidence is that he borrowed the deposit from his brother, in the amount of $23,095. I am not able to resolve that issue. The husband deposed that when he later could not meet the mortgage repayments, his brother lent him $45,000 by way of three separate cheques for $15,000 each.
In September 2002 the husband gave his brother a cheque for $170,000 to invest in a development project at Suburb GG. It is the wife’s contention that this money was part of the borrowings used to fund the purchase of E Street. The husband said that in October 2004, his brother commenced repaying those funds to him and that by 30 March 2005, he had been repaid the amount of $284,000 which represented the repayment of the investment in addition to a profit share. The wife disputes this and says that the husband only received $168,000 for his investment.
In 2005 the construction of the house at 2 D Street was completed and the husband and the wife moved into that property. The property at 1 D Street was leased to a third party.
In 2005 the wife’s father transferred to her the property at 3 D Street, Suburb C (“3 D Street”). The property had been owned by the wife’s father and a sister, Ms AA Birtles, who sadly passed away in 2002. The property was transferred to the wife for $325,000 being the amount owed on the mortgage at that time. A new mortgage was registered in the wife’s name for that amount and the property was leased to a third party. When the wife received rental funds for 3 D Street she says that she deposited the monies into her Commonwealth Bank Account, the J Pty Ltd Account or directly into the mortgage. I understood that the wife conceded that mortgage payments were made from the J Pty Ltd Account.
In 2008 the husband purchased a one third share in a property at HH Street, Suburb GG together with his brother and Mr II. The husband deposed that when he later realised he could not make the required financial commitment he transferred his interest in the property to his brother for $1. He deposed that his name was removed from the title and he received no financial benefit from the dealing.
In August 2008 the wife and husband separated for the final time. The husband moved to live in the property at E Street. The husband deposed that he commenced paying the wife not less than $100 per fortnight in cash by way of child support. It is the wife’s contention overall that the husband failed to provide adequate financial support to her for the children after separation.
On 13 November 2008 the wife and husband sold the property at E Street for $472,000. The wife alleges that she signed the contract for sale on the basis that the husband would remove his name from the title to B Street. Further, the wife alleges that her signature on the Transfer was not made by her.
Upon the sale of E Street the husband received $160,000. He says that he used these funds to pay off a line of credit secured on E Street.
In January 2009 the husband opened a line of credit with H Bank and borrowed $184,000 against that facility. I understand that the line of credit was drawn on by the husband, increasing to more than $520,000. As at the date of judgment it is represented by a debt of $476,000 secured against E Street. The wife seeks that $470,000 be included in the balance sheet as a notional asset, representing the husband’s use of moneys from the line of credit. I will address that issue later in these reasons.
In early 2011 the wife purchased a property at O Street, Suburb C (“O Street”) for $665,000. The wife deposed that she borrowed $33,250 from her father, $20,000 from her daughter, Ms Y, and $600,000 from the bank. The husband deposed that the wife acquired the property for their daughter, Ms Y, using funds from Ms Y’s savings and a loan.
On 17 August 2011 the husband lent his brother $50,000. This was repaid on 9 November 2011.
On 28 November 2011 the husband and wife were divorced.
In October 2012 the wife obtained a Child Support assessment and the husband commenced to pay in accordance with that assessment.
In 2013 Ms Y purchased a property at JJ Street, Suburb L for $343,000. The wife said she gave Ms Y $40,000 by way of redraw on O Street and 3 D Street, and that the wife’s father gave her $25,000.
During 2013 and 2014 the husband had access to at least two bank accounts belonging to his cousin, Mr KK Macguire and withdrew various sums from those accounts. The husband deposed that he withdrew this money as payment for work done by him for his cousin. The wife contends that the husband set out to disguise his business as that of his cousin. It is not possible to resolve that dispute.
On 13 November 2014 the wife’s parents were joined to these proceedings as second and third respondents.
On 23 June 2016 the wife drew down on the mortgage secured on the O Street property and paid her father the sum of $65,000.
The Law
The Approach to Proceedings Under s 79
In the context of these proceedings, s 79 of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides:
79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or
…
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i)either or both of the parties to the marriage; …
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
These proceedings do not involve any controversy about the preliminary aspect of the requirement said to be created by s 79(2), as to whether there should be any property settlement order. As was observed in Stanford v Stanford (2012) 247 CLR 108 that the preliminary, just and equitable requirement is often readily satisfied. Here, neither of the parties to the marriage seeks that the existing financial arrangements should continue unchanged. They have both invoked s 79, seeking a change in property interests. I note the exhortation in s 81 to, as far as practicable, “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”. It is just and equitable that the wife and husband have relief under s 79.
I turn to the task of identifying just and equitable orders that will alter their interests in property. I will address the following matters:
(a)make findings as to the identity and value of the property, liabilities and financial resources of the wife and husband at the date of the hearing;
(b)identify and assess the contributions of the wife and husband within the meaning of s 79(4)(a), (b) and (c) and determine their contribution based entitlements, expressed as a percentage of the net value of their property;
(c)identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the wife and husband; and
(d)consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.
The property of the wife and the husband
In determining what order is appropriate, it is necessary to make a finding as to the property of the parties to the marriage. That involves identifying assets, liabilities and financial resources and their values.
Various iterations of the balance sheet were produced. On 24 May 2017 the latest version of the balance sheet was tendered (see Exhibit 38) and further concessions were made during submissions on 25 August 2017. There remain disputes about whether some of the assets should be included in the pool of assets to which s 79 will be applied but the assets and their values in the joint balance sheet were agreed in the following terms. The subtotals have been added by me:
Assets
Owner Description Wife’s Value Husband’s Value 1 Husband E Street 1,500,000 1,500,000 2 Wife K Street 450,000 450,000 3 Wife 1/4 share in the M Street property 216,666 216,666 4 Joint B Street 1,200,000 1,200,000 5 Wife O Street 1,300,000 1,300,000 6 Wife 3 D Street 1,300,000 1,300,000 7 Wife 5 & 2 D Street 1,500,000 1,500,000 8 Wife Funds in CBA account 1,657 1,657 9 Wife Household contents 10,000 10,000 10 Wife Jewellery 10,000 10,000 11 Husband G Bank Investment Plan 12,000 12,000 12 Husband H Bank (J Pty Ltd) account 1,564 1,564 13 Husband Motor vehicle 1 8,000 8,000 14 Husband Motor vehicle 2 5,000 5,000 15 Husband Household contents 20,000 20,000 16 Husband J Pty Ltd Business NK NK 17 Husband S Street, Suburb T 700,000 700,000 Total 8,234,887 8,234,887
Add-backs
Owner
Description Value Value 18 Wife Payment of $65,000 to the wife’s father on 23 June 2016 65,000 65,000 19 Wife Increase in mortgage on 1 and 2 D Street 38,000 38,000 20 Husband Cash proceeds from E Street plus deposit NK 0 21 Husband Profit from sale of LL Street, MM Group and NN Street NK 0 22 Husband Money paid to husband’s brother in 1994 50,000 50,000 23 Husband Money drawn down from line of credit at H Bank since 2009 470,000 470,000 Total 623,000 623,000
Liabilities
Owner Description Value Value 24 Husband Mortgage: E Street 476,000 476,000 25 Husband H Bank line of credit 20,000 20,000 26 Husband Debt to Mr Q Macguire 0 0 27 Husband Legal fees for hearing 0 0 28 Wife Mortgage: K Street 0 0 29 Wife Mortgage: the M Street property 37,500 37,500 30 Joint Mortgage: B Street 166,000 166,000 31 Wife Mortgage: O Street 597,272 597,272 32 Wife Mortgage: 3 D Street 225,645 225,645 33 Wife Mortgage: 1 & 2 D Street 93,000 93,000 34 Wife Debt to Mr Birtles 33,000 33,000 Total 1,648,417 1,648,417
Superannuation
Owner Description Value Value 35 Wife B Super 11,581 11,581 36 Husband G Bank Retirement 26,608 26,608 37 Husband OO Super 16,977 16,977 Total 55,166 55,166
Financial Resources
Owner Description Wife’s value Husband’s value 38 Wife Moneys placed in the wife’s solicitor’s trust account 0 0 39 Wife Continued assistance from parents NK NK Total 0 0 NET TOTAL ASSETS (Less liabilities but including superannuation, add-backs and quantified financial resources): $7,264,636 $7,264,636
There are a number of issues about the balance sheet and, as I indicated earlier in these reasons, I am not confident about getting to the truth of the relevant financial arrangements. Each of the wife and husband has made representations to various authorities that are inconsistent with their evidence in these proceedings. There are problems with the credibility of each of the main witnesses. Indeed, there is no generally reliable, lay witness.
The wife and husband caused their financial affairs to be intermingled with those of some of their relatives. It is likely that the breakdown of the relationship between the wife and husband, and the fact of these proceedings in particular, have resulted in a change of attitude about the intention and/or desired outcome of that intermingling among the persons involved. The mere fact of representations made by a party to government bodies about ownership, for example, does not relieve the Court of the obligation to identify the true position, where that is possible.[7]
Assets
[7] See the decision of the High Court in Nelson v Nelson (1995) 184 CLR 538.
Item 3: The M Street property
There is no dispute about the value of this property but there is a dispute about whether the property should be included in the balance sheet. This property is registered in the names of the wife and the second and third respondents as joint tenants. It is the wife’s contention, and that of her father, that she holds her interest in that property on trust for her parents. The husband contends that the wife has a beneficial interest in the property as to one-quarter of its value.
There is no evidence of the wife contributing to the purchase of the property. There is no reliable evidence to support the case of the wife’s parents. The wife’s parents bought the property and included the wife’s name on the title. However, presumptions arise from the way in which property is acquired. The issue was relevantly canvassed by Chief Justice Gibbs in Calverley v Green (1984) 155 CLR 242 (“Calverley v Green”) at 246 and 247, in the following terms:
Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such — not, e.g., as a loan.
….
As I have indicated, the general rule that in the situations mentioned it is presumed that a resulting trust arises in favour of the purchaser, or in favour of two purchasers in the proportions in which they contributed the purchase money, is subject to the exception created by the presumption of advancement. “It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title”: Martin v. Martin; in other words, it is “no more than a circumstance of evidence which may rebut the presumption of resulting trust”: Pettitt v. Pettitt. The presumption arises when a husband makes a purchase in the name of his wife, or a father in the name of his child or other person to whom he stands in loco parentis. …
(Footnotes omitted)
It is well established that the relationship between a parent and a child gives rise to the presumption of advancement (Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; Nelson v Nelson (1995) 184 CLR 538); Dullow v Dullow (1985) 3 NSWLR 531 at 535 – 536; Brown v Brown (1993) 31 NSWLR 582; Callaghan v Callaghan (1995) 64 SASR 396 at 405).
The presumption of advancement operates between the wife’s parents and her. There is no reliable fact or circumstance that rebuts this presumption. For example, unlike the circumstances in Calverley v Green there is no suggestion that the original purchase would have been impracticable without the wife’s name being included on the title.
I will include the property in the balance sheet at the value of the wife’s one‑quarter legal interest.
Item 7: 1 and 2 D Street
In respect of 1 and 2 D Street there is no dispute about value but there is a dispute about whether the property should be included in the balance sheet and, if so, the value to be given to the wife’s interest. This property is registered in the names of the wife and the second and third respondents as joint tenants.
Remarkably, no party contends that the legal title accurately reflects the wife’s interest in the property. In other circumstances that could be recorded as an agreed fact, however, the contentions as to the beneficial ownership are diametrically opposed and cannot be reconciled. It is the wife’s contention, and that of her father, that she holds her interest in that property on trust for her parents. On the other hand, the husband contends that he and the wife have a beneficial interest in the property as to the whole value of the property and that the wife’s parents hold their interest in the property on trust for them.
I will first deal with the husband’s claims. He seeks:
1.Declaration that the Husband and the Wife are the beneficial owners as tenants in common of the properties situate and known as [1 and 2 D Street Suburb C].
2.The Husband shall surrender and otherwise do all acts and things necessary to transfer to the Wife his right title and interest in the property at [1 and 2 D Street Suburb C].
…
6. The Wife is declared sole and beneficial owner of:-
…
6.5.[1 and 2 D Street Suburb C];
…
The agreed chronology in relation to 1 and 2 D Street is as follows:
·On 20 January 1994 1 D Street was purchased for $235,000. The property was located by the wife’s father and was purchased and registered in the names of the wife and her parents. In order to complete the purchase, the wife and her parents jointly borrowed $236,000 and entered into a mortgage to secure that borrowing. The mortgage was also secured against the M Street property that they jointly owned.
·In October 1995 the wife and husband moved into 1 D Street with their child, Ms Y. They paid the utilities and rates.
·In March 1996 the wife and husband separated and the wife moved to live with her parents. From this time 1 D Street was leased out and rental income was collected by the wife’s parents until July 1997. At that time the wife and husband reconciled and they returned to live at the property and paid some rent.
·In 1999 a Development Application was lodged in the name of the wife’s father to subdivide the property. The house subsequently built on the land became known as 2 D Street. Although the houses are known as 1 and 2 D Street they were never formally subdivided and remain on the same title.
·On 26 March 1999 the wife registered a mortgage in the amount of $55,000 against her property at K Street and paid that money into the 1 D Street loan account.
·In 2005 the construction of the house at 2 D Street was completed and the husband and the wife moved into the property. The property at 1 D Street was leased.
·The final separation of the husband and wife occurred in August 2008 when the husband moved out of 2 D Street. As at the conclusion of the oral trial in 2016 the wife continued to live at 2 D Street. At that time she was paying no rent to occupy the property and was assisted by her parents in respect of rates on one or more properties.
Because of the value of the property, this is a significant issue in the proceedings. The determination of the issue relies greatly on the agreed facts because, for various reasons, the parties are unable to provide reliable evidence about the relevant events. Unfortunately, the agreed facts lead to ambiguous inferences.
It is the husband’s evidence[8] that:
[8] Commencing at paragraph 53 of the husband’s affidavit filed 3 September 2014.
·At the time of their marriage (1993) the wife said to him that she wanted them to live at Suburb C, close to her parents. She said that as soon as a property came up that was near her parents, she wanted the husband and her to buy it. The husband agreed.
·The husband and the wife drove around the Suburb C area looking for a suitable property and the husband drove around Suburb PP, Suburb QQ and Suburb C and made enquiries of agents when he observed a for sale sign.
·In 1994 there were two separate conversations between the husband and the wife at E Street. The first conversation was:
[Wife]:Dad’s got a contract for [1 D Street, Suburb C]. I’ve had a look at the house. They want $240,000.00 for it. Would you be interested in buying that property if we can make the mortgage payments?
[Husband]: Yes.
[Wife]:Mum and Dad said they would go guarantors for us. I desperately want us to get that property.
·Albeit that it does not logically follow, the husband says that he understood from the wife using the word “guarantors” that the property would be registered in her parents’ names.
·Later there was the following conversation:
[Wife]:Mum and Dad have told me they will go guarantors on the property if we buy the property at [Suburb C].
[Husband]:Are you sure it will be our property.
[Wife]:It will definitely be our property.
·Later, at the home of the wife’s parents, there was the following conversation:
[Wife]:Dad will help us get a loan.
[Wife’s father]: I have a good record with Westpac.
[Wife]:It will be best if we put the house in our three names because we have a great history with the bank. We can use [M Street] as collateral because it’s in our three names. We will pay the mortgage and it will be our property.
·The husband deposed that he then looked at the wife’s father and said: “[Mr Birtles], that’s fine I’m happy to buy the house in your three names”.
·The husband recalls that after that conversation the wife said to him:
We can get the house for $240,000.00. We can borrow the money as long as we’re able to make the repayments because Mum and Dad will be on the mortgage.
·The husband deposed that it was only after the commencement of these proceedings that he became aware that the property was purchased for $235,000.
The husband was challenged about his evidence but he did not resile from his deposition about the conversations described above. The husband strongly asserted that he and the wife paid the deposit for the purchase and was, apparently, equally certain that the wife’s parents did not provide the deposit or any part of it. He ultimately could not recall whether he or the wife paid the deposit or how it was paid. He thought they paid $15,000 and could not account for the reference on the contract to a deposit of $23,500. Despite the husband’s evidence about the deposit, I understand from Mr Alexander’s submission that it is the husband’s case that the entirety of the purchase price was met from the funds borrowed from the Westpac Bank. The purchasers borrowed $236,000 from the Westpac Bank when the property cost only $235,000.
During cross-examination the husband could not explain why in his affidavit he said “after the commencement of these proceedings I became aware that the property was purchased for $235,000”. In my view, that demonstrates his lack of involvement with the purchase.
As to the mortgage instalments, it is the husband’s evidence that moneys withdrawn from J Pty Ltd always paid the mortgage instalments on 1 D Street. He conceded that no transfers or withdrawals were made from the J Pty Ltd accounts to the mortgage account with Westpac directly. He deposed that the moneys were withdrawn from the wife’s parents’ Equity Access account and were paid into the mortgage account. He explained the lack of banking records for J Pty Ltd being the source of the mortgage payments with words to the effect: “I would get paid, my wife would take my pay packet and put it into the account.” The husband was then asked: “So your case is that you gave your wife cash, and then your wife put the cash into the equity access account of her parents, and the equity access account of her parents paid the Westpac mortgage?” and he responded: “I presume”. Given that there is no other evidence supporting the husband’s contention, his presumption about the contribution to the mortgage made by him and the wife, does not provide a sound foundation for his case.
In summary, the husband argues that 1 and 2 D Street is the property of the wife and him. He asserts that he and the wife paid the deposit and all mortgage instalments. However, the husband does not purport to give direct evidence of those payments and there is nothing to corroborate his contentions. That is understandable because he was not directly involved in the purchase. He had no involvement in the identification of the property, in negotiating the purchase price, in instructing solicitors to contract to purchase the property, in the payment of the deposit, in the establishment of a loan to fund the balance of the purchase price, in the establishment of the mortgage that secured that loan or in the direct payment of mortgage instalments. The high point of the husband’s evidence is that he had conversations with his wife and her father about their intention in purchasing the property and that he had certain understandings about those intentions and about the source of the funds applied to the purchase of the property and the subsequent mortgage instalments.
One of the husband’s arguments was that he and the wife had an interest in the property via the doctrine of equitable promissory estoppel. The argument is that he performed work on the property as if it was his own based on the representations of the wife and her father.
In the husband’s supplementary materials there is a reference to Ramsden v Dyson (1866) LR 1 HL 129 as follows:
If a man, under a verbal agreement with a landlord for a certain interest in land, or, what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation.
In order to make this case, the husband would need to establish that he assumed that he and the wife were the beneficial owners of the property and that the wife and her father induced or allowed him to make that assumption. He would then need to establish that he performed work on the property relying on that assumption and that the wife and her father knew or intended that he do so. Finally, the husband would need to establish that he will suffer a detriment if it transpires that he and the wife are not the beneficial owners of the property.
The first thing to say is that I do not accept the husband’s evidence about the various conversations he said he had with the wife and her father. He is a generally unreliable witness and there is no corroboration of his version of events from the other parties to those conversations. As to the proposition that the husband only worked on the property because he thought it was entirely owned by him and the wife, only the husband can give evidence about that matter. I will find that the wife was and is a co-owner of the property. It is possible that the husband would not have worked on the property if he believed that to be the situation. I have in mind that the husband may have worked without remuneration on properties that were not totally owned by him or by him and the wife. Indeed, it would be unusual if he had not. I note in that regard, the wife’s assertions about the husband working on his mother’s property at S Street, Suburb T. It is not critical to my ultimate finding on this issue but I doubt that the husband was candid on this point. Suffice it to say that he has not satisfied me in relation to the promissory estoppel claim. I have not accepted the husband’s evidence about the conversations with the wife and her father and therefore he cannot establish that they intended him to act on the representations allegedly made in those conversations. Finally, the husband has not identified any detriment to him because of his actions. I will find that the wife is a co-owner of the property. She and therefore he, will have benefited from work done on the property although as I observe below, it is not possible to assess the significance of that work and therefore of that benefit.
I am satisfied that the husband undertook some work in renovating 1 and 2 D Street and in the construction of the house known as 2 D Street. However, the evidence does not permit any assessment of the significance of that work. Despite his written deposition, the husband conceded that some of the work he claimed to have done, was done by others. The husband is and was a tradesman and it is not remarkable or suggestive of only one conclusion, that he would perform work on a property that he and the wife occupied from time to time, being a property that was owned by the wife and her parents. In my view there is no basis for finding that any redress or accounting is required to the husband for the work he did or indeed that his contributions must be recognised beyond the scope available under s 79(4) in respect of the wife’s share of the property.
I am left with the wife’s legal interest, the inferences from the way in which the purchase was undertaken, the fact that the wife and husband lived at the property for periods and paid some outgoings, the fact that the husband worked on the property, and the payment of $55,000 by the wife to her parents. In all of that, there is no justification for the findings required to establish any element of the cases variously argued by the husband.
I will turn to the case of the wife and of her parents. They argue that the property at 1 and 2 D Street is beneficially owned by the wife’s parents and that the wife holds her interest on trust for them.
The wife’s parents seek the following orders:
1.That the relief sought by the First Respondent Husband at paragraphs 1-8 of his Amended Respondent to Initiating Application filed 3 September 2014 is dismissed.
2.A declaration that the Applicant [Ms Macguire] holds all of the interest presently registered in her name in and to the property situated at and known as [1 and 2 D Street Suburb C] in NSW more particularly described in Folio … on trust for, and in favour of, the Second and Third Respondents.
It is the wife’s evidence about 1 D Street that for most of the time between July 1993 and March 1994 she and the husband were separated. In early January 1994 she was living with her parents when they became interested in purchasing 1 D Street and requested a contract for sale from the agent. The original contract was in the name of the wife’s father and her sister, Ms AA, as purchasers. The wife says that her father then said to her:
After we received the contract, Mum said that we should replace Ms AA’s name with your and her name and buy it in all three names because of your situation with [Mr Macguire] but only for legal title and for your security. I will make all the payments. It is our property, but you are on the title.
And:
Please do not tell [Mr Macguire] or his family about this. It is our family and our business.
It is the wife’s evidence that contracts were exchanged for $235,000 on 20 January 1994. The wife and her parents borrowed $236,000 from the Westpac bank and the bank took security over both that property and the M Street property. It is the wife’s evidence that she paid no money towards the deposit, legal fees or stamp duty and that she has never paid any moneys towards the mortgage instalments. It is the wife’s evidence that her father has refinanced the loan on a number of occasions and has redrawn on the loan account, without reference to her, when he has been in advance. It is the wife’s evidence that she understood that she had no beneficial interest in 1 D Street and that her parents were the true owners of the property.
Liabilities
Item 26: Debt to Mr Q Macguire
It was the husband’s contention that he owed his brother $45,000. On 5 August 2016 and 25 August 2017 the husband’s counsel said that the item was not pressed.
Item 27: Husband’s legal fees
During submissions on 5 August 2016 the parties agreed to remove this item from the balance sheet. That was confirmed on 25 August 2017.
Items 29 and 33: Mortgage on the M Street property and mortgage on 1 and 2 D Street
In final submissions in August 2016 counsel for each of the husband and the wife agreed on the figure for the mortgage for each of these properties on an “if found” basis. That is, if each property is found to be included in the balance sheet, the value of the liability is agreed.
The mortgage balance of 1 and 2 D Street was included on the agreed balance sheet at $93,000. As that related to the entire value of the property at item 7 ($1,500,000) and I have reduced that to one third of the value to represent the interest of the wife, I will reduce the relevant mortgage debt accordingly, to $31,000. I appreciate that each of the mortgagors are jointly and severally liable for the entire debt but in my view a more sensible outcome will be achieved by notionally apportioning the debt between them.
Item 34: Debt to Mr Birtles
The wife contends that she owes her father $33,000. However, neither she nor her father gave admissible and probative evidence about the origins of that debt. The debt will not be included in the balance sheet.
Financial resources
Item 38: Moneys placed in the wife’s solicitor’s trust account
The parties have agreed not to add back moneys paid for legal fees and in my view there is therefore no reason to refer to moneys held in trust. They will be drawn on for the profit costs and disbursements in the wife’s case.
Item 39: Continued assistance from the wife’s parents
It is the husband’s case that the wife has a financial resource in the form of her parents. I have no doubt that there will continue to be links between the financial affairs of the wife and those of her parents. However, there is no evidence about the capacity of the wife’s parents to provide financial support to her. This is not a matter to be included as a financial resource to the wife.
Conclusion
I find that the matrimonial pool of assets is as follows:
Assets
Owner Description Value 1 Joint B Street 1,200,000 2 Husband E Street 1,500,000 3 Wife K Street 450,000 4 Wife The M Street, property (one-quarter interest) 216,666 5 Wife O Street 1,300,000 6 Wife 3 D Street 1,300,000 7 Wife 1 and 2 D Street (one third interest) 500,000 8 Wife Funds in CBA account 1,657 9 Wife Household contents 10,000 10 Wife Jewellery 10,000 11 Wife Add-back - Payment of $65,000 to wife’s father on 23 June 2016 65,000 12 Husband G Bank Investment Plan 12,000 13 Husband H Bank (J Pty Ltd) account 1,564 14 Husband Motor vehicle 1 8,000 15 Husband Motor vehicle 2 5,000 16 Husband Household contents 20,000 Total 6,599,887
Liabilities
Owner Description Value 17 Joint Mortgage: B Street 166,000 18 Husband Mortgage: E Street 476,000 19 Wife Mortgage: The M Street property 37,500 20 Wife Mortgage: O Street 597,272 21 Wife Mortgage: 3 D Street 225,645 22 Wife 1 and 2 D Street 31,000 23 Husband H Bank line of credit 20,000 Total 1,553,417
Superannuation
Owner Description Value 24 Wife G Super 11,581 25 Husband G Bank Retirement 26,608 26 Husband OO Super 16,977 Total 55,166
The net assets have a value of $5,101,636 of which $55,166 is in the form of superannuation and $5,046,470 is in the form of non-superannuation assets.
Contributions
The obligations placed on the Court by s 79 of the Act call for an assessment of the respective contributions by and on behalf of the wife and husband. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[13] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the wife and husband in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of wife and husband.
[13]In the Marriage of Shewring (1987) l2 Fam LR 139.
As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) FLC 91-814; In the Marriage of Norbis (1986) FLC 91-712; In the Marriage of Zyk (1995) FLC 92-644.
Here the assets held in the form of superannuation are relatively modest compared to the entire matrimonial pool of assets. The cases of the wife and husband were argued globally and I will take the same approach.
Section 79(4)(a) contributions
Financial contributions to property, both direct and indirect were made by each of the husband and wife.
The husband brought into the marriage his interest in E Street. That property now has a net value of about $1,000,000.
The following properties came into the marriage through the wife:
·in 1988 the wife bought K Street. The property was rented out throughout the marriage and the rent paid off the mortgage and thereafter supplemented the wife’s income. The property now has a net value of $450,000;
·a one-quarter interest in the M Street property. The property was used by members of the wife’s family as a holiday house. The wife’s interest in that property now has a net interest of about $180,000;
·in 1994 the wife brought into the marriage a one third interest in 1 D Street. That interest now has a net value of about $469,000;
·the wife and husband bought B Street from the wife’s father in 2000 but it was apparently bought for value;
·in 2005, 3 D Street was transferred by the wife’s father to her. The wife contends that although valued then at $500,000, it was transferred for $325,000, being the amount then owing on the mortgage. The transfer represented a gift to the wife of the order of $175,000. The property has a net value of over $1,000,000 in the agreed balance sheet. I gather that 3 D Street was rented at all relevant times and that the rent was applied to the mortgage. There is a dispute between the wife and husband about the parties’ income also being applied to the mortgage. I cannot resolve that issue. It is common ground that the husband assisted in renovating the bathroom at the property. The wife says that she hired a painter and electrician to do work associated with that renovation. I assume they were paid from joint funds; and
·in early 2011 the wife bought O Street for $665,000. The wife paid for the property with funds from her father and daughter and $600,000 borrowed by the wife from a bank. The wife rented the property out and repaid her father and daughter. The property now has a net value of about $700,000.
The husband made some contributions to some of the wife’s properties. Nevertheless, the wife’s contributions through properties brought into the marriage were significantly greater than those of the husband.
Throughout the marriage, the wife worked in retail. The husband conceded that she undertook that work until late in each of her pregnancies, had six to 12 months off work following the birth of each child and otherwise, she worked 9.00 am to 5.00 pm five days a week and sometimes on weekends. The wife deposed that an autoimmune condition flared up in 2008 and she was unable to work for a period. The wife also did the books and otherwise assisted with the husband’s business.
During the marriage, the husband was engaged in paid employment relying on his trade skills. The husband worked on average, more than six days every week.
Each of the wife and husband allege that the other diverted some of their earnings and other matrimonial funds away from the purposes of the marriage. For example, the husband alleges that the wife applied income from their business to the purposes of her parents, whether to reduce their debts or to contribute to assets. The husband contends that he and the wife contributed $55,000 to reduce the mortgage on 1 D Street, in about 1999. It is the wife’s evidence that under an arrangement with her father, she borrowed that amount on the security of K Street and paid it to her father by way of a lump sum payment of rent for occupying the property at 1 D Street. Neither version of events is inherently unlikely. The husband seeks to make a case about contribution or diversion of funds and he has failed to make it.
In turn the wife alleges that the husband intermingled matrimonial funds with projects, businesses or other assets of his brother or other relatives. For example the wife contends that payments of $10,000 and $15,000 made on 12 and 25 February 2003 represented payments by Mr Q Macguire for work done by the husband. I understand the husband’s case to be that those amounts represented part of a repayment by Mr Q to the husband of $170,000 invested by the husband in a project of Mr Q’s company, MM Pty Ltd at Suburb GG. It is not possible to make a probative finding about the nature of the payments.
The wife believes that Mr Q Macguire continues to hold matrimonial funds for the husband. The wife obtained a text message that passed from Mr Q Macguire to the husband on 20 October 2011 in the following terms:
Hay [Mr Macguire], be strong. Just give me till March next year, then we will act …. I know it’s hard, but you need to be deciplent (disciplined) …. let her act silly. You be smart. It’s a game. You will win in the end. …. Be strong and don’t reply to any sms
The message is suggestive of a level of cooperation between the husband and his brother to the wife’s disadvantage but, again, that is not the only possible interpretation of the message and no probative findings are available based thereon.
In or about 2013 the husband’s cousin opened a business called “J & KK Pty Ltd”. That is a very similar name to the business name under which the husband performed much of his work during the marriage. The wife contended and the husband denied that the husband was in effect running the parties’ business under the guise of that similarly named enterprise. The husband gave evidence that he drew funds on the accounts of his cousin’s business as a way of being paid for work he undertook for his cousin. Again the facts are suggestive but no probative findings are possible.
The wife contends that both during the marriage and since, the husband gambled away significant amounts of matrimonial funds. After separation the wife found TAB dockets in the husband’s car. At one point an old phone from Mr Q Macguire was provided to Ms Z and there the wife saw a number of text messages between the brothers in the period between 12 August 2010 and 8 April 2012. The messages are suggestive of there being significant amounts wagered. A message from the husband on 29 May 2011 referred to $3,000 the husband wanted to bet on a rugby league game. The husband’s evidence about gambling is very confusing. The husband denied that there was any significant gambling. He denied that he had ever used his brother’s TAB account. He said that he rarely gambled during the marriage. At pages 44 and 45 of Exhibit 6 the husband answered specific questions about this issue. It was conceded there that he used about $2,500 in gambling each year. The issue was taken up in cross-examination on 2 August 2016.[14] There the husband variously said that he gambled an average of about $2,500 per annum; that he wagered about that sum but only lost about $300 per annum; and at one point, that he won $2,500 per annum. It is not possible to make probative findings beyond the husband’s inconsistent concessions about his gambling. I take judicial notice that it would be unusual for one individual to consistently win $2,500 each year for many years, betting on rugby league games and horse races. Doing the best I can with all of that, I will find that the husband lost $2,500 on average per annum during the marriage and since.
[14] Starting at page 17 of the transcript.
The financial contributions by and on behalf of the wife exceeded those by and on behalf of the husband.
After separation the husband bought and sold cars. It was his evidence that he bought and sold between seven and 10 cars with the dearest car being $12,000 and the cheapest $1,000. There is no evidence that there was a financially positive outcome to those activities.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
The husband performed work on various properties that were owned or occupied by parties to these proceedings and by various members of his family and of the wife’s family. It is only the work performed on properties owned by the wife and or the husband or in respect of which one of them has a legal interest that could be a contribution under this provision.
It is the wife’s evidence that from late 1998 she took over managing her father’s rental properties when her sister, Ms AA, was unable to continue performing that work. Again, save in respect of properties jointly owned by her, the wife’s work for her father cannot represent a contribution to the acquisition, conservation or improvement of any of the property of the wife and husband or either of them. As with the husband’s unpaid work on family properties in respect of which neither he nor the wife had a legal interest, that work represents a diversion of effort from the purposes of the marriage of the wife and husband.
It is likely that the non-financial contributions of the husband exceeded those of the wife.
Section 79(4)(c) contributions
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
As is referred to above, during the marriage the husband worked an average of more than six days a week. Nevertheless, he deposed that when the children were young he shared with the wife the care of the children after school. He estimates that on seven to 10 occasions each month he would arrange to be home early from work.
When neither he nor the wife could care for the children, that care was provided by the wife’s sister, Ms Y or the maternal grandparents. I note in passing that there is no scope for contributions under this category to be made on behalf of a party to the marriage.
It is agreed that the wife attended to most of the cooking and shopping (both grocery and clothing for the children). It is agreed that the wife did most of the household cleaning. The wife attended most of the parent teacher interviews and the husband did not. The husband contends and the wife disputes that he did most of the household vacuuming. The husband deposed that he maintained the outside of the house and washed the dishes in the evening.
The children mainly lived with the wife after separation. Ms Y turned 18 on 26 January 2014. There was a period from September 2014 when Ms Z stayed with the husband for a period because the wife was in hospital for hernia and gall bladder surgery. The husband and wife disagree about the periods but Ms Z stayed with the husband for at least two months.
The wife disputes some of the husband’s evidence about his parent and homemaker contributions. It is not necessary to resolve all of those disputes as the agreed facts reveal that the wife made the greater contribution to the family as parent and homemaker. If only because his time was otherwise committed, the husband could not have made a contribution of this type, of the order of that made by the wife.
Conclusion on contributions
The cases of the wife and husband are made on the basis of their respective contentions about the balance sheet.
It is the wife’s case that a balance sheet that excludes 1 and 2 D Street and the M Street property would call for a finding that contributions favoured the wife in the proportions 75 per cent as to 25 per cent by the husband. In the event that either or both interests were included, it is submitted that the wife’s contributions were even greater.
For the husband it was submitted that the contributions overall were made in the proportion 52.5 per cent by the wife compared to 47.5 per cent by the husband. The husband submitted that if 1 and 2 D Street were excluded from the pool then the husband’s contribution would be 55 per cent. If it was determined that the wife’s legal interest in the properties was adopted, then it was submitted that the contributions would be equal.
As I have made some decisions about the relevant pool of assets that were not in accordance with the submissions on behalf of either the wife or the husband it is difficult to describe the range of dispute about contributions. It is probably fair to say that both parties assert that the contributions by or on behalf of the wife exceeded those of the husband.
I too am satisfied that the contributions by and on behalf of the wife exceeded those of the husband. In the context of a net pool of assets of nearly $6 million, the difference in the injections of assets brought to the marriage through each of the wife and husband is significant. The wife and husband also had the benefit of living in some properties without always paying a commercial rent. While the husband definitely made contributions to some of the properties, others were largely isolated from the marriage. Those properties were neither lived in nor renovated by the parties and they simply paid themselves off through rental income. In some instances, such as K Street, net income was generated for the family.
This was a marriage involving cohabitation spanning 15 years and more than 20 years of contributions. In my view the contributions of the wife and husband would be fairly recognised as made in the proportions 57.5 percent by the wife and 42.5 percent by the husband.
The other matters in section 79
Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:
Section 79(4)(d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. Each of the wife and husband has flagged likely restrictions on their capacity for working in their respective vocations. That said there is no evidence that would bear uniquely on the property settlement division for one of the parties by reference to this criterion.
Section 79(4)(e) – Section 75(2) factors
The relevant matters in s 75(2) would seem to be paragraphs (a), (b), (c), and (f).
(a) the age and state of health of each of the husband and wife
The wife is 49 years of age and has some health problems. The wife’s treating General Practitioner, Dr P gave evidence in the mother’s case. Together with a colleague, Dr P, has treated the wife since about 2000.
In his first report, dated 3 September 2015, Dr P described the wife as having the following health related issues:
Year:Condition
2000: Irritable Bowel Syndrome
2007: autoimmune disease
2007: depression
2008: Interstitial Cystitis
2013: D & C
2013: Laparoscopy, Iron deficiency, Gastritis with reflux
2014: Cholecystectomy – laparoscopic
2014: Cholelithiasis
2014: Umbilical hernia repair
In that report, Dr P opined that the wife’s general health was not good, and that the combination of her mental health issues and physical issues were affecting her ability to work. He said that he did not expect long term improvement in the agitated depression or arthralgias (Sjogrens), and thus predicted a poor prognosis (on those issues). He opined that her other issues have a mixed and variable prognosis.
In his oral evidence, Dr P confirmed that as at the date of his first report, being 3 September 2015, the wife suffered from agitated depression, reflux, Irritable Bowel Syndrome, autoimmune disease, and arthritis caused by connective tissue disease.
In his second report dated 13 July 2016, Dr P described the wife’s current medical issues as primarily anxiety and insomnia, a condition with her right foot and fatigue. Dr P opined that several issues were contributing to the wife’s mental health issues including the divorce proceedings, issues with her children’s health, overriding toes awaiting operative intervention, breast nodules awaiting clarification, and living with her parents as their house burnt down. He said that prolonged standing at work was exacerbating her foot condition and that fatigue and sleep deprivation were contributing to her difficulty making it to work.
Dr P accepted that the listed issues contributing to the wife’s mental health issues are all exogenous, that is, environmental factors, as opposed to endogenous factors, that is, factors that will remain the same regardless of environment. Dr P said that he had not referred the wife to a psychiatrist in relation to her depression, but he denied that if a patient has a serious form of depression they would normally be referred to a psychiatrist. He said that if a patient’s condition was deteriorating he would refer the patient to a psychiatrist. He said that the wife’s condition has fluctuated rather than deteriorated. Dr P opined that compared to two or three years ago, although the wife’s condition depends on the circumstances of the day, it is generally about the same. Despite the passage of time and the formal opportunities for the parties to update their evidence, there is no more recent evidence about the wife’s health than that referred to above.
The husband is 52 years of age and subject to consulting a psychologist, is in good health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
As at the conclusion of the oral trial the wife’s income was $1,157 per week made up of $600 in wages as a sales assistant, $147 in net rent from four properties, $60 by way of Carer’s Allowance and $350 in child support. There were no other income earners in her household. The wife benefited from $800 spent each week by her parents for groceries, utilities, the use of a car, rates, orthodontal expenses and petrol. She spent $1,471 each week made up of $70 in income tax, $12 in home contents insurance and $1,389 in living expenses which were apportioned as to $483 for the wife’s expenses and $906 for expenditure for the benefit of the children. There being no updating evidence despite the opportunities to provide it, as late as August 2018, I am obliged to find that there has been no significant change in the wife’s financial circumstances. That said, given that Mr X has turned 18 years of age, I take it that the child support payments have ceased.
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
The evidence about the wife’s state of health and ability to work is set out above. It is not possible to make a probative finding about whether the wife is fully exercising her earning capacity. During final submissions I put to learned senior counsel for the wife the impression that the wife might be soon working full time for her father. The response from counsel was to the effect:
There is no doubt that my client – and the evidence is clear – that she provides substantial assistance to her parents, and her parents provide her with assistance.
The effect of the evidence is that the assistance the wife gives to her father is in addition to her work. On behalf of the husband it was submitted that the wife’s parents are a substantial financial resource to the wife. I accept that there will continue to be dealings between the wife and her parents that owe more to their relationship as daughter and parents than to any commercial or formal arrangement. That said, it is not possible to know the import of that for the wife. For example there is no evidence about the financial circumstances of the wife’s parents, what provision they will make for their own support and for that of other family members.
The husband notes that his work is extremely labour intensive and he anticipates that his hours of work and, therefore, his earning capacity, will diminish. As at July 2016 the husband was consulting a psychologist and he anticipated that his treatment would continue into the distant future. However, the husband did not link any psychological condition to a reduction in his capacity to work. He noted however that there would be substantial ongoing costs associated with his treatment.
The husband’s income is $1,353 comprising $1,173 in income from the Macguire Family Trust trading as J Pty Ltd[15] and $180 in rent. He lives with his mother and he estimates her weekly income to be $250. The husband is unsure of his total expenditure because, for example, he is unaware of his weekly income tax, but he spends $1,405 each week, made up of $730 in mortgage payments to the H Bank, $120 in rates and unit levies, $20 in house insurance premiums, $65 per week to register a Motor vehicle 1 and $120 to register a motor vehicle 2 (both of those figures seem excessive and are probably exaggerated or are otherwise incorrect) and $350 in child support payments. Of those expenses the husband estimates that he spends $100 per week on Ms Y Macguire by way of an allowance, motor vehicle expenses and incidental payments; $100 on Mr X Macguire by way of an allowance and incidental expenses; and $100 on his mother for groceries and utilities.
[15] Nowhere in the husband’s written evidence or financial disclosure did the husband reveal the correct name of his employer. In his Financial Statements including the statement he swore on 29 July 2016 and which he affirmed as correct when sworn in to give his oral evidence, it is asserted that he is employed by J Pty Ltd albeit that he said in that document, for the first time, that his income by way of salary and wages came from elsewhere.
The evidence about his assets and liabilities is addressed above. It was not suggested that the husband is not fully exercising his earning capacity. The husband’s brother may represent a financial resource to the husband. That said, as with the wife’s parents in respect of the wife, it is not possible to know the import of that for the husband. For example there is no evidence about the financial circumstances of the husband’s brother.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
There are no children under the age of 18 years.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain
(e) the responsibilities of either party to support any other person
I have set out above what there is of the evidence in relation to the parties’ expenses. At the conclusion of the oral trial Ms Z was 17 years of age and Mr X was 16. They each lived with the wife. Mr X has been diagnosed with verbal dyspraxia, borderline receptive language skills for age, moderately impaired expressive language skills for age, severe reading difficulty for age, severe to borderline spelling difficulty for grade. He also has anxiety and allergies.[16] I anticipate that notwithstanding that he is now 18 years of age, Mr X will require ongoing support from his parents. As I referred to earlier in these reasons, on 24 May 2017, it was agreed that there was a state of flux in relation to Mr X’s living arrangements. The agreed position was that Mr X was then living between his parents’ households in the range two to five nights per week with the wife and the balance of the week with the husband. Despite the opportunity for updating evidence, that is the last evidence about Mr X. On that basis there is nothing in relation to Mr X’s needs that will have a bearing on any adjustment for the property settlement warranted by contributions alone.
(f) Subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party
[16] Exhibit 6, document 1 – Notice to Admit Facts; Exhibit 6, document 2 – Notice disputing facts.
The wife is in receipt of a modest carer’s allowance.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable
There is no probative evidence about the standard of living of the wife and the husband either during the marriage or since.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income
There is no evidence of either of the wife or husband undertaking studies or seeking to establish themselves in a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant
This criterion was not addressed in submissions. The wife and husband will each receive a significant property settlement. There is no reason to be concerned about their creditors.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party
The wife and husband each played a role for J Pty Ltd.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
This issue was not raised in final submissions.
(l) the need to protect a party who wishes to continue that party's role as a parent
There are no children under 18 years and Mr X lives between his parents’ homes.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation
I have set out above what there is of that evidence.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii);
This issue was not raised in final submissions.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
As at 18 July 2016 the husband’s arrears of child support stood at $1,545.[17] At paragraph 23 of the husband’s updated affidavit filed 22 July 2016 he says that he is not in arrears.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
[17] Exhibit 6.
The husband has gambled. However, the evidence does not permit a finding that the gambling was of such significance that it would be relevant to the calculation of a just and equitable property settlement.
It is asserted that the husband has failed to fully disclose his financial arrangements. In my view, neither of the principal parties has been fulsome in their disclosure. That may in part be because the detail of their financial dealings with members of their families are not fully known to them; that there was a level of informality in those dealings that defeats detailed reporting or they have chosen not to fully disclose matters that would be disadvantageous to them in these proceedings. It is also the case that in some instances, each of the wife and husband deliberately mislead the Court. In my view this issue is of no assistance in respect of adjusting the contribution based outcome.
Finally, the husband drew down on the line of credit after separation, increasing the matrimonial debt from about $184,000 to $476,000. It is the husband’s contention that he applied those funds to family expenses, including proper expenses incurred by him. It is the wife’s contention that the husband has not accounted for the additional borrowing and that given his income, he did not need to resort to the line of credit. As with most disputes in the proceedings, it has not been possible to get to the ultimate truth about this issue. I am confident however, that the husband had greater access to matrimonial resources after separation than did the wife.
(p) the terms of any financial agreement that is binding on the parties
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage
There is no relevant financial agreement.
Section 79(4)(f)
Beyond those referred to above, there are no relevant orders made under the Act.
Section 79(4)(g)
There is no current child support assessment. All of the children of the wife and husband are over 18 years of age.
Conclusion
The wife seeks a further adjustment of five per cent from her contribution based entitlement. The husband proposed an adjustment in favour of the wife by 2.5 per cent but allowed that it could be as much at five per cent. However, that adjustment was proposed in submissions made on 5 August 2016 (on the last day of the main trial) and was said to be largely based on the wife’s ongoing care for Mr X.
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
·the husband is marginally older than the wife;
·the wife’s health is compromised by a number of conditions; and
·the wife lives with her parents and the husband with his mother. The wife is assisted with weekly expenses by her parents and the husband receives rent from his mother.
In my view, the relevant factors under paragraphs s 79(4)(e) warrant a modest adjustment in favour of the wife, to the outcome that would be warranted by the assessment of contributions alone.
Just and Equitable
The net assets have a value of $5,101,636 of which $55,166 is in the form of superannuation and $5,046,470 is in the form of non-superannuation assets.
Before any adjustment under s 79(4)(e), if the assets were divided in the proportions 57.5 percent to the wife and 42.5 percent to the husband then the wife would have about $2,933,441 and the husband would have about $2,168,195.
Of the pool of assets identified by me, the wife has the benefit of and would like to retain:
Wife
Owner Description Value 1 Wife K Street 450,000 2 Wife The M Street property(one-quarter interest) 216,666 3 Wife O Street 1,300,000 4 Wife 3 D Street 1,300,000 5 Wife 1 and 2 D Street (one third interest) 500,000 6 Wife Funds in CBA account 1,657 7 Wife Household contents 10,000 8 Wife Jewellery 10,000 9 Wife Add-back - Payment of $65,000 to the wife’s father on 23 June 2016 65,000 10 Wife Mortgage: The M Street property -37,500 11 Wife Mortgage: O Street -597,272 12 Wife Mortgage: 3 D Street -225,645 13 Wife Mortgage: 1 and 2 D Street -31,000 14 Wife G Super 11,581 Total 2,973,487
Based on contributions alone, the wife would then need to pay the husband about $40,046. That would leave the husband with:
Owner Description Value 1 Husband E Street 1,500,000 2 Husband G Bank Investment Plan 12,000 3 Husband H Bank (J Pty Ltd) account 1,564 4 Husband Motor vehicle 1 8,000 5 Husband Motor vehicle 2 5,000 6 Husband Household contents 20,000 7 Husband Mortgage: E Street -476,000 8 Husband H Bank line of credit -20,000 9 Husband G Bank Retirement 26,608 10 Husband OO Super 16,977 11 Payment from the wife 40,046 Total 1,134,195
In addition he would retain the property at B Street which has a net value for the purposes of these proceedings of $1,034,000 ($1,200,000 - $166,000).
In my view an appropriate order would avoid the payment by the wife to the husband of $40,046. That would achieve a modest adjustment from the contribution based entitlements of the parties and would simplify the operative orders.
The operative orders will provide for the wife to transfer to the husband her interest in the property at B Street, subject to the current mortgage and for the husband to refinance the mortgage secured thereon. Otherwise the wife and husband will retain the assets in their respective names and will indemnify each other in relation to any associated debts. In my view that would represent a just and equitable outcome.
Conclusion under section 79
This was a long marriage and very significant contributions were made by each of the parties. They acquired substantial assets and supported their children through to adulthood. The parties shared the work of the marriage in different ways but overall the contributions by and on behalf of the wife exceeded those of the husband. A modest adjustment is warranted to the wife. In my view a division in the proportions identified above will reflect a just and equitable division of their property.
The operative orders will require a transfer of B Street to the husband.
As to the third parties, the orders sought against them and those sought by them will be dismissed.
I will allow the parties to bring the matter back within 28 days or such further time on which they may agree, in respect of any machinery or wording issues arising from the orders.
I certify that the preceding two-hundred and fifty-six (256) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 21 September 2018.
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