Milla & Oran
[2023] FedCFamC1F 1049
•22 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Milla & Oran [2023] FedCFamC1F 1049
File number: MLC 4105 of 2020 Judgment of: MCGUIRE J Date of judgment: 22 December 2023 Catchwords: FAMILY LAW – PROPERTY – Application by husband for the alteration of property interests – Where there are evidentiary deficiencies on the cases of both parties – Contributions – Dispute as to add-backs to the pool – Dispute as to status of advancements – Where it is just and equitable to adjust the parties’ net property interests as to 51 per cent to the husband and 49 per cent to the wife Legislation: Family Law Act 1975 (Cth) ss 79, 79(2) and (4) Cases cited: Jabour & Jabour (2019) FLC 93-898, [2019] FamCAFC 78
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
R v Watson; Ex parte Armstrong (1976)136 CLR 248
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Division: Division 1 First Instance Number of paragraphs: 55 Date of last submissions: 20 October 2023 Date of hearing: 16 and 31 August 2023 Place: Melbourne, delivered in Sydney Solicitor for the Applicant: Litigant in Person Counsel for the Respondent: Ms Marshall Solicitor for the Respondent: Regina L Schaefer Property & Conveyancing ORDERS
MLC 4105 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR MILLA
Applicant
AND: MS ORAN
Respondent
ORDER MADE BY:
MCGUIRE J
DATE OF ORDER:
22 DECEMBER 2023
THE COURT ORDERS THAT:
1.All previous orders be discharged.
2.The net property pool of the parties inclusive of superannuation entitlements be distributed as to 251 per cent to the husband and 49 per cent to the wife in accordance with these Orders.2
3.Within thirty (30) days from the date of this Order the respondent Ms Oran (“the wife”) shall transfer to the applicant Mr Milla (“the husband”) all her right, title and interest in the property situated at B Street, Suburb C in Victoria and the husband shall be solely responsible for the payment of all amounts payable in respect of the mortgage payments for the property and all rates, taxes, insurances and any other outgoings and shall indemnify and keep indemnified the wife and where appropriate to provide the wife with a discharge of her obligations under any such mortgage within thirty (30) days of the date of these Orders.
4.Within thirty (30) days from the date of this Order the wife shall transfer to the husband all her right, title and interest in the property situated at 1 D Street, Suburb E in Victoria and the husband shall be solely responsible for the payment of all amounts payable in respect of the mortgage payments for the property and all rates, taxes, insurances and any other outgoings and shall indemnify and keep indemnified the wife and where appropriate to provide the wife with a discharge of her obligations under any such mortgage within thirty (30) days of the date of these Orders.
5.Contemporaneously with the transfer of the properties in Orders 3 and 4 herein the husband shall pay to the wife the sum of $555,545.64.
6.In the event that the husband fails to make the payment to the wife, in accordance with Order 5 herein, within thirty (30) days of the date of these Orders the property at 1 D Street, Suburb E in Victoria shall be forthwith placed on the market for sale by an estate agent with the husband to do all things necessary to co-operate with the sale and the husband pay and indemnify the wife from payment of all liabilities falling due in relation to the property including but not limited to mortgage repayments, rates, land tax, water charges and levies.
7.Should the parties not agree a real estate agent then the wife is to nominate three (3) suitably qualified agents and the husband then within seven (7) days to elect one agent from the nominees following which the parties are to jointly instruct the agent on the sale with the parties to accept the advice of the agent as to whether the sale be effected by auction or private treaty and the agents advice from time to time as to sale price or reserve price.
8.The proceeds of sale of the property at 1 D Street, Suburb E in Victoria (“the 1 D Street property”) be applied as follows:
(a)to discharge the mortgage and any other encumbrances effecting the D Street property;
(b)to pay all Real Estate Agent’s costs, commissions and expenses of the sale of the 1 D Street property;
(c)to pay any rates, land tax, water charges and levies outstanding in respect of the 1 D Street property;
(d)to pay the solicitor’s costs in relation to the sale of the 1 D Street property; and
(e)the remaining net proceeds of sale shall be divided between the parties so as to effect a settlement of the net property of the parties pursuant to the Reasons herein as to 51 per cent to the husband and 49 per cent to the wife.
9.Within thirty (30) days from the date of these Orders the husband shall transfer to the wife all his right title and interest in the property situated at F Street, Suburb G in Victoria and the wife shall be solely responsible for the payment of all amounts payable in respect of the mortgage payments for the property and all rates, taxes, insurances and any other outgoings and shall indemnify and keep indemnified the husband and where appropriate to provide the husband with a discharge of his obligations under any such mortgage within thirty (30) days of the date of these Orders.
10.Within fourteen (14) days from the date of these Orders the wife shall nominate three professional sellers to commission the sale of the engagement ring in her possession and provide a list of such nominations to the husband who will notify the wife within a further period of fourteen (14) days of his election of one of those three professional sellers to sell the said engagement ring whereupon the engagement ring in the possession of the wife is to be offered for sale by the seller nominated by the husband in Order 10 with the parties to accept the advice of the selling agent as to mode of sale and sale price from time to time and the proceeds of sale be applied as follows:
(a)to pay all costs, commissions and expenses in respect of the sale of the engagement ring; and
(b)the remaining net proceeds of sale shall be divided between the parties so as to effect a settlement of the net property of the parties pursuant to the Reasons herein as to 51 per cent to the husband and 49 per cent to the wife.
11.The husband shall retain the following to the exclusion of the wife:
(a)the business registered as a business name in the husband’s name alone;
(b)the proceeds of sale from the sale of Motor Vehicle 1, Motor Vehicle 2 and Motor Vehicle 3;
(c)all personalty and chattels in the possession or control of the husband;
(d)his superannuation; and
(e)the balance of any bank accounts or like investments in the name of or to the benefit of the husband as of the date of these Orders.
12.The wife shall retain the following to the exclusion of the husband:
(a)Motor Vehicle 4 in her possession;
(b)her Commonwealth Bank Shares;
(c)the balance in the Offset account;
(d)all personalty and chattels in the possession or control of the wife;
(e)her superannuation; and
(f)the balance of any bank accounts or like investments in the name of or to the benefit of the wife as at the date of these Orders.
13.The husband shall indemnify and keep indemnified the wife in respect of his liability to the Australian Taxation Office.
14.Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party, as at the date of these Orders;
(b)the parties do all things and sign all documents to forthwith close all joint accounts and any monies standing to the credit of the parties in those joint accounts shall be distributed as to 51 per cent to the husband and 49 per cent as to the wife;
(c)all insurance policies remain the sole property of the owner named thereon;
(d)each party foregoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these Orders;
(e)each party be solely liable for and indemnity the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(f)any joint tenancy of the parties in any real or personal estate is expressly severed.
15.There be liberty to the parties to apply in respect of the execution of these Orders.
16.Pursuant to s 81 of the Family Law Act 1975 (Cth) the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
17.All extant property and financial applications be dismissed except costs applications between the parties, if any, which are to be dealt with in accordance with the Family Law Rules 2021 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym of Milla & Oran has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCGUIRE J:
APPLICATIONS
These are property proceedings between the parties’ Mr Milla (“the husband”) and Ms Oran (“the wife”).
The wife who had the advantage of being represented by solicitors and counsel initially proposed a settlement whereby she receive 60 per cent of a contentious property pool, and where she claimed superior contributions by way of her earnings during the relationship. By the time of final submissions, however, the wife had retreated in these ambitions and was arguing for a 50/50 division of the net property pool.
The husband’s position was and remains more problematic. The husband has represented himself throughout these proceedings including at the trial before me and attacked his case in its preparation with vigor and in great detail, but where the husband clearly lacked an understanding of the principles of s 79 of the Family Law Act 1975 (Cth) (“the Act”) and despite the Court on a number of occasions articulating the process whilst also explaining the Court trial procedure to him. The husband is not sophisticated in the ways of litigation but to his credit maintained at all times a high degree of courtesy to the Court and to the wife and her counsel. So far as I could elicit, the husband commenced the trial seeking orders that would see him retaining approximately 80 per cent of the property pool but where his focus at no stage of the trial was on percentage division but rather on the funds which he could afford to make settlement payment on the wife. At the end of the evidence and prior to an adjournment for final submissions, the husband volunteered that he may be willing to settle the matter on a 50/50 distribution basis albeit with a still contentious property pool. However, when the Court reconvened for final submissions the husband’s focus again was on a cash amount which he could apparently see himself affording in order to settle upon the wife. At the end of those submissions the best I could decipher was that the husband was arguing that he makes a payment of $450,000 to the wife, but where he continued to argue the content and value of the property pool.
It is proper to point out, and without criticism of the husband, but where the Courts now more frequently encounter such difficulties with self-represented litigants, that the husband had no understanding of the onus and burden of proof in making assertions of fact. He frequently, both during the evidence and in his final submissions, referenced such assertions in the sense that the Court should accept them as fact but where, in reality, evidence was not given or adduced as proof of such fact(s) to the requisite standard of on the balance of probabilities or, often without any evidence at all. Again, I do not to make this statement in criticism of the husband but simply to point out that the complexities of this litigation in a sense overwhelmed him and where his efforts in preparation of his case including a trial affidavit and annexures totalling near 900 pages demonstrates the serious intent with which he embraced the litigation, but where he failed to grasp or address the fundamental principles of s 79 of the Act.
BACKGROUND
Where there remains a plethora of factual dispute, I accept that the parties commenced a relationship in about 2008. Their employment and living arrangements caused this to be a “distance” relationship for the great majority of its duration, but where their commitment to the relationship was evidenced by an intermingling of finances from about 2008. Nevertheless, where the husband in his final submissions describes the relationship as never more than “an engagement”, it is clear from the evidence of both of the parties that there was a commitment in the relationship, a marriage and, importantly for my consideration, joint financial decision making and contributions from an early date.
The parties were married in 2012.
There are no children of the relationship.
The parties separated in December 2019.
The wife is a professional. The husband is self-employed in his business. For reasons that escape me, the husband asked that the name of his business not be disclosed in these Reasons. Whilst being an unusual request, but where the business is operated only in the name of the husband, I am prepared to accede his application and the business, if reference is needed, will be known as H Company, but where notably neither party adduced any valuation evidence or even evidence as basic as an inventory of plant and equipment.
There is no evidence before me of either of the parties having re partnered in any relevant dependency or support manner. There is no evidence that either of the parties is not otherwise than in good health.
RELEVANT LAW
The Act at s 79 provides the Court with power to alter the interests of parties in property. “Property” includes assets and liabilities and where “superannuation” is to be treated as property for the purposes of the determination. It is available to the Court to deal with superannuation as distinct from the “tangible assets” on a two-pool basis or together on a one‑pool basis. In this matter where it is only the wife who has superannuation of any real value much of which was accrued during the course of the relationship from 2008 and where the husband has minimal superannuation entitlements, I determine to deal with superannuation on a “one-pool” basis together with the other assets and liabilities.
The discretion given to the Court at s 79(1) is a broad one but one that must be exercised within the statutory limitations.[1]
[1] R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 257.
Significantly, however, and following the decision of the High Court in Stanford & Stanford,[2] the Court is not to make any order altering the property interests of the parties unless it be satisfied, in all the circumstances of the case, that it is just and equitable to do so.[3] Importantly, “property” is to include both the legal and equitable interests of either of the parties either separately or jointly in property.
[2] (2012) 247 CLR at 108.
[3] Section 79(2) of the Family Law Act 1975 (Cth).
In the matter now before me, I am easily satisfied that it is just and equitable to consider altering the interests of the parties in the property pool. The relationship has been a long one extending from 2008. It is abundantly clear from the evidence of each of the parties that they have mingled their finances and where it is proper to consider the contributions by each of them to the property pool without simply conflating the considerations at s 79(4) with the “just and equitable” question at s 79(2). It is abundantly clear that the parties’ relationship is ended.
Once the determination is made at s 79(2), the Court is to resolve the contents of the property pool and the value of those contents and hence the value of the pool itself. It is at this juncture that there is both some serious dispute between the parties as to the contents of the property pool and also considerable evidentiary deficiencies where the Court is nevertheless obliged to make particular findings on the evidence given and adduced.
Once the property pool is crystallised with value, the Court considers the contributions by or on the behalf of each of the parties to the acquisition of that property pool together with its maintenance and improvement. The contributions may be of a direct or indirect financial type or may be of a non-financial type including as homemaker or parent.
After consideration and determination of the contributions towards the property pool, the Court then considers whether there should be any further adjustment to either of the parties by way of any relevant factors listed at s 79(4)(d)-(g), including those at s 75(2), of the Act. In this case, and appropriately, neither party argues for any adjustment under the s 75(2) factors where both are in employment and have no responsibility for dependents.
The notion of justice and equity permeates the entirety of the consideration and determination process set out above.
THE HUSBAND’S CASE
As mentioned above, the husband’s case was at times convoluted and a moving feast in respect of the orders that he seeks. His affidavit[4] clearly occupied much effort and appears in the form of a narrative unenumerated. It is replete with interesting analogies or observations which may be of dubious relevance to the issues for my determination, but which indeed provided absorbing and enjoyable reading. The affidavit deserves some particularisation in these Reasons if only to give an indication of the husband’s style in presenting his case and the interpretative abilities required by the Court, where, for example, at page 4 appears the following:
The Underarm Bowling Incident of 1981
With one ball of the final over remaining in the match, New Zealand required a six to tie the match. To ensure that New Zealand were unable to achieve this, the Australian captain Greg Chappell instructed his bowler (and younger brother) Trevor Chappell to deliver the last ball to batsman Brian McKechnie underarm along the ground. Trevor Chappell did so, forcing McKechnie to play the ball defensively, meaning Australia won. This action, although legal at the time, was nevertheless widely perceived as being wholly against the traditional spirit of cricketing fair play.
The outrage caused by the incident eventually led to an official amendment to the international laws of cricket to prevent it from occurring again.
The Prime Minister of Australia, Malcolm, Fraser called the act “contrary to all the traditions of the game”. (Wikipedia)
The Australian Captain in this incident is Ms Marshall instructing [the wife] as the bowler to deliver an underarm bowl to manipulate the outcome. The honourable Justice McGuire is the Prime Minister in this analogy. Lawyers manipulating affidavits and serving them to an unrepresented party after 11pm the night before a final hearing is contrary to the spirit of the Commonwealth Justice System.
[4] Filed 28 August 2023.
Similarly, at page 3 appears the following:
Like the great Sir David Attenborough once noted in one of his documentaries, the cheetah is the fastest land animal on the African plan and can outrun a gazelle. Yet the gazelle runs harder than the cheetah because the gazelle is running for its life and the cheetah is just running for a meal.
[The wife’s] legal team have the tactical advantage that they are not running for their lives, they are just running for a meal. I am the gazelle funning for my life and I am going to run hard for what I have worked hard for, for the last 27 years. [The wife] only contributed $150,000 to the entire marriage.
No matter what the outcome is, the Cheetah is going to take a swipe at me and it’s just a question of whether I lose some fur or my life. In the documentary I saw, the gazelle which was separated from the herd managed to save its own life with minor injuries and the cheetah walked off with its head down looking for its next easy meal.
Time constraints and the need to focus on the issues at s 79 of the Act prevent me from further particularising the thoughtful and analogous observations rife throughout the husband’s affidavit.
The husband now argues that he should make a payment of $450,000 to the wife. It is clear that such is reasoned more on his capacity to finance a lump sum payment on the wife rather than any understanding of the property pool and value and any grasp of the s 79 principles and each and every argument of the husband being accepted. Then such a payment would constitute a settlement in the husband’s favour of slightly more than 50 per cent of the net property pool. He argues a superior initial contribution by way of equity in two pieces of real property at the date of commencement of cohabitation but where the evidence is of the purchases being made substantially with borrowings.
The husband presented generally as an honest, good humoured and well-intentioned witness albeit with limited understanding of the family law process. He gave his evidence in a straight forward manner. He was willing to listen to contrary argument and to make admissions against interest. The husband adduced evidence in the form of an affidavit of Mr J sworn or affirmed 19 July 2023. Mr J is currently a public servant. He is a former solicitor. His evidence, both in court and on affidavit, was not so impressive as that of the husband himself. Mr J was evasive and selective in his evidence in court. He gave evidence of being a middleman in payments received by the husband’s business, but where he says some payments were paid into accounts of the wife but apparently contrary to some government regulation. If this was an attempt by Mr J to assist the husband by discrediting the honesty of the wife then effectively he achieved that in respect of himself primarily and, to a lesser extent, the husband, but with little or no damage to the wife’s credibility or to her case.
Significantly, Mr J was also responsible for the drawing of a document entitled “loan agreement” which carries a date of 14 May 2012 asserted to be between the husband and his father, Mr K, for the advancement of $110,000, The terms of the agreement are dubious, conflictual, and at times nonsensical and would do no credit to anyone holding themselves out as a solicitor. The evidence is, in any event, that the husband asserts that he repaid the money to his father only the day before the trial of this matter in 2023 but where the husband did not call his father to confirm such evidence and where corroborative evidence of repayment is lacking against the wife’s assertion that the advancement was a form of a “gift” and where, in that case, the practical effect of whether it be a “loan or becomes gift” may be negligible in its distinction. Put simply, the timing of the asserted “repayment”, the failure to call the father, and the unprofessional form of the agreement drawn by the former solicitor, Mr J are of negligible probative value and serve only to assist me in preferring the evidence of the wife in this factual dispute where, in any event, the advancement of $110,000 would amount to a contribution on behalf of the husband. I can only infer that the failure by the husband to call his own father suggests his evidence would not have assisted.[5]
[5] Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8.
THE WIFE’S CASE
As mentioned above, the wife originally asserted a greater contribution by way of her earnings during the course of the relationship and hence seeking 60 per cent of the property pool. Where in cross-examination she properly admitted the work endeavours of the husband both in his own business and towards renovations to various properties, she properly retreated from that position and now argues for a 50/50 settlement without adjustment for either on either a contributions or s 75(2) factors.
CREDIT
Both parties gave evidence and were cross-examined. Neither party was completely convincing in the evidence that they gave to the Court. Whereas some mitigation is afforded the husband by reason of his lack of understanding of the process, his tendency towards obfuscation, and being self-represented, the wife’s evidence in some senses was more problematic. Specifically, she was forced to make some significant concessions in cross-examination by the husband where his cross-examination was more direct and assisting than some of his own evidence. Specifically, the wife’s evidence in relation to jewellery retained by her did her no credit and adds to the difficulties for this Court where there are some significant issues between these parties in respect of their historical recollection of important matters such as source of funds to make various purchases and where the existence or location of various assets was not the subject to the best evidence.
I have commented above but emphasise that I found the evidence of Mr J to be in many ways lacking credit.
THE PROPERTY POOL
Whilst there is now some important agreement between the parties as to the contents and value of those items of the property pool, there remains much in dispute.
The husband says that he owes a debt of $31,000 to the Australian Taxation Office and that this should be included in the property pool. Whereas it might be the commonly accepted approach that the property pool of the parties is determined by content and value as of the date of the trial, the husband admits that his tax debt was accrued in the financial year 2020/2021 which is post separation of the parties and where it is clear that the husband was the sole beneficiary of income earned in that year and of such a quantum to bring the tax debt then I am of the view that the husband’s tax debt should not be included in the property pool.
The husband says that he has an outstanding loan to his father of some $98,000 or perhaps more correctly that the loan has since been repaid by him to his father only the day before this trial. The wife asserts that any advancement by the husband’s father was by way of gift. In cross-examination the husband volunteered that the loan had been repaid “yesterday”. The “loan agreement” allegedly prepared by Mr J was not discovered prior to the trial affidavit. The husband’s father was not called to corroborate the husband’s claims of both a loan and/or repayment. The document prepared by the former solicitor, Mr J, is of little assistance to me. The husband offered no corroboration of the repayment. Where the wife concedes that the advancement was made in a quantum of $110,000, I cannot determine that it achieved the status of a loan but accept that it was a gift by and on behalf of the husband and should perhaps therefore constitute a contribution by him albeit one made in 2012 and where it must be weighed in consideration of the myriad of contributions made by each of these parties during the course of their relationship.[6]
[6] Jabour & Jabour (2019) FLC 93-898, [2019] FamCAFC 78.
The property at B Street, Suburb C was purchased in 2012 and both parties attended the auction with the purchase being assisted by a joint loan by the wife and her father in circumstances where the husband and wife did not have the borrowing capacity. Again, I agree, after hearing the evidence, that the mortgage and renovations were paid with intermingled monies. The father’s interest is evidenced and protected on the title and hence is not a contribution other than obviously a non financial one in assisting the parties or allowing them to make the purchase.
I accept the property at 2 D Street, Suburb E was sold in 2014 with net proceeds of some $392,000 with $300,000 being deposited into intermingled accounts. I accept that Motor Vehicle 4 currently in the possession of the wife was purchased from these funds in 2015 at a cost of $75,000.
I am satisfied, therefore, that the properties at 2 D Street, Suburb E, 1 D Street, Suburb E, F Street, Suburb G, and B Street, Suburb C were all purchased during the course of the relationship between the parties albeit on occasions prior to their marriage. I am satisfied that the purchases were made with joint funds and effort and primarily with the assistance of mortgage loans where it follows that there is no evidence to satisfy me that either of these parties were persons of any considerable wealth prior to the commencement of their relationship.
The husband claims the wife is in possession of jewellery of significant value. Again, the evidence of both parties was unsatisfactory in assisting me as to the truth of this dispute. In final submissions, however, the wife conceded (as she did under cross-examination) that she retained an engagement ring with an insurance value of $40,000. The wife now agrees that the ring be sold on the open market and that the proceeds of sale be distributed in accordance with my determination as to a percentage distribution of the entirety of the property pool. I am unable to find the that the wife is in possession of any other jewellery of any significant value given the lack of particularity and of any corroborative evidence or indeed of any valuation evidence.
Similarly, the wife initially argued that the husband is or was the owner of a number of motor vehicles of substantial value including Motor Vehicle 5. The husband denied his ownership of these vehicles giving a name or names of persons he said were the actual owners. Despite my invitation for the husband to bring these persons to Court, albeit he not having filed affidavits from them, he declined this invitation and, similar to his father not giving evidence, did so without explanation as to why these persons could not come to court. Nevertheless, it is the wife who makes the assertion of fact of the husband’s ownership of these particular motor vehicles. She carries an onus of proof on the balance of probabilities. There is no onus on the husband to “prove a negative”. The wife adduces no evidence to prove or corroborate her claims. She does not bring registration papers, transaction records or former owners. She makes a bald assertion of fact to which she was on notice as to the husband’s denials. She has not discharged her onus of proof.
In a related argument, however, the husband says that an amount of E$100,000 should be included in the pool as the current overdraft balance of his business account. This is where the husband argues that the business is of no value and where he provided only a report of dubious probity, and not supported by the author being on affidavit to support this contention rather than valuation on affidavit. Whilst the balance of the overdraft account might have been in the negative of $100,000 it is now some years since separation. The husband has had the benefit of the ongoing income from the business. Significantly, however, the husband claims that for a period during the relationship he utilised $600,000 from the business towards renovations on one of the parties’ properties. He suggests that he did so when he was not working to full potential in his business due to his efforts in renovating the home. Taken in a global sense, where I cannot be satisfied that the husband’s ongoing business has no actual value, even in a future maintainable earning sense, given that the husband has not produced evidence in proper form as to valuation, but where I am satisfied that the business has been ongoing over many years and of some real financial benefit to the husband, then I am reluctant to simply include a figure in an overdraft account absent any valuation for that business. As such, I determined in my discretion not to include the current overdraft figure as asserted by the husband.
The husband argues that the wife used amounts of $60,000 and $100,000 (apparently separate amounts) during the course of the relationship without explanation and that these sums should be “added back”. I do not accept the husband’s argument. This was a lengthy relationship. Both parties worked hard during the relationship, both at their employment and in respect of increasing the value of the property pool. They clearly mingled their finances. The husband argues only from arbitrary and selective items in various bank accounts. His methodology is therefore dangerously flawed. He pointed to no specific purchases. I prefer the wife’s evidence that the funds of these parties from their endeavours were mingled and jointly spent for the benefit of the parties during the course of the relationship. As such, I reject the husband’s argument for “add-backs”.
The husband says that the wife holds shares through her employment with a value of some $20,000. During final submissions the wife conceded this argument.
Against the deficiencies in the evidence and the findings of credit made above, I determine the property pool for the purposes of my consideration to comprise the following:
Property pool 1. B Street, Suburb C in Victoria $1,600,000 2. F Street, Suburb G in Victoria $430,000 3. 1 D Street, Suburb E in Victoria $900,000 4. Wife’s shares $20,000 5. Wife’s offset account–B Street mortgage $74,224 6. Wife’s engagement ring (to be sold) Not known 7. Husband’s Motor Vehicle 1 (sold) $27,700 8. Husband’s Motor Vehicle 2 (sold) $5,000 9. Husband’s Motor Vehicle 3 (sold) $8,000 10. Motor Vehicle 4 (wife) $20,000 11. Husband’s superannuation (sworn financial statement) $5,545 12. Wife’s superannuation (sworn financial statement) $187,036 Subtotal of property pool $3,277,505
The liabilities are as follows:
Liabilities 1. B Street, Suburb C mortgage $435,565 2. F Street, Suburb G mortgage $139,551 3. 1 D Street, Suburb E mortgage $361,053 Subtotal of liabilities $936,169
Property less liabilities 1. Total property including superannuation $3,277,505 2. Total liabilities -$936,169 Net property pool $2,341,336 CONTRIBUTIONS
The husband says that he should be given credit by reason of his superior initial contributions by way of equity in two properties at the commencement of the relationship. This is a complex area of dispute between the parties where the wife argues a mingling of finances from an early date and where the husband tends to argue a separation of finances. Generally, I prefer the evidence of the wife in its particularised form where, for instance, I accept her evidence that she attended an auction in 2008 for the husband’s purchase of a property at 2 D Street, Suburb E and made contributions towards shortfalls on the mortgage from her bank accounts or income. Similarly, I accept the wife’s evidence that both she and the husband attended an auction in 2010 for the purchase of the property at 1 D Street, Suburb E and monies were paid from intermingled income despite the property being registered in the name of the husband. The husband’s evidence as to these events was more vague and obfuscating than that of the wife who was confident in her responses and did not retreat in cross-examination.
It is clear that the husband’s father made a contribution to the parties of $110,000 albeit in 2012. The status of this advancement is dealt with above. Suffice to say that I accept the advancement was made but I do not accept it achieved the status of a “loan”. It is therefore a significant contribution on behalf of the husband. Importantly, the wife’s father also made a contribution although his contribution is secured in its entitlement by way of mortgage. That contribution nevertheless allowed the parties to purchase a property.
I am satisfied that there were no significant discrepancies in initial contributions between the parties. That is, I am satisfied that property was purchased, albeit in the husband’s name, during the course of the relationship but substantially with the assistance of mortgage loans but where the parties were already intermingling their finances. I am satisfied that their relationship, actually and financially, began in 2008.
Both parties worked hard during the course of the relationship. I accept that the husband maintained his business and also worked as a labourer in the renovations of the parties’ homes. This, however, was at a time when the wife was working to her capacity in her employment and, whilst the husband’s efforts are noteworthy, it remains, on his own evidence, that he must have been absent from his remunerative employment when he was labouring to tradesman on the renovations. Generally, however, I accept both parties made substantial contributions of various types during the course of the relationship and that neither contributed to a greater extent than the other.
The husband has remained in occupation of the B Street property since separation in December 2019. Whilst the wife has been responsible for the payment of the mortgage and outgoings, she has done so from the balance of the mortgage offset account which emanated from joint funds.
Consequently, I find the only “unusual” contribution during this relationship is that of the $110,000 advanced by the husband’s father which I find was by way of gift. The advancement was made in 2012 and must be considered within the context of the length of the relationship, the numerous contributions of various types made by each of these parties during the relationship and to the value of the property pool. On the basis of contributions and on these considerations, I therefore intend to make an adjustment to the husband of 1 per cent of the property pool.
SECTION 75(2) FACTORS
Neither party seeks any adjustment from the Court by reason of the s 75(2) considerations. Where both parties are in employment and in good health, I consider this to be the appropriate position.
CONCLUSION
Consequently, the property pool which I find has net value of $2,341,336 is to be divided as to 51 per cent of the husband and 49 per cent of the wife. I calculate the husband would receive property to a value of $1,194,081.36. The wife would receive property to a value of $1,147,254.64.
The husband will retain the following:
Property 1. B Street, Suburb C $1,600,000 2. 1 D Street, Suburb E $900,000 3. His superannuation $5,545 4. Motor Vehicle 1 (sold) $27,700 5. Motor Vehicle 2 (sold) $5,000 6. Motor Vehicle 3 (sold) $8,000 Subtotal of property $2,546,245
Liabilities 1. B Street, Suburb C $435,565 2. 1 D Street, Suburb E $361,053 Subtotal of liabilities $796,618
The wife will retain the following:
Property 1. F Street, Suburb G $430,000 2. Shares $20,000 3. Offset account- B Street, Suburb C mortgage $74,224 4. Motor Vehicle 4 (wife) $20,000 5. Her superannuation $187,036 Subtotal of property $731,260.00
Liabilities 1. F Street, Suburb G Mortgage $139,551 Subtotal of liabilities $139,551
Consequently, I find that the husband must make a cash adjustment on the wife of $555,545.64
I am aware from his submissions that the husband may have limited borrowing capacity, although I have no evidence before me in proper form that this is the case. As such, I will give the husband the right to retain his preferred properties at B Street, Suburb C and 1 D Street, Suburb E but should he be unable to make payment of the adjustment on the wife failing which and as a default I will order the sale of the 1 D Street, Suburb E property with the net proceeds to be divided so as to give effect to the general percentage distribution of the property pool.
I will order the sale of the wife’s engagement ring and similarly that the net proceeds be distributed according to the percentage distribution of the pool. I will order the sale by the wife nominating three professional sellers and the husband to make a choice from those nominees.
After hearing the evidence of the parties, albeit with its limitations, I am satisfied that the proposed orders above do justice and equity to the circumstances of the parties’ relationship.
I will give the parties leave to apply in respect of the execution of these orders.
I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 22 December 2023
0
5
1