Oxley & Oxley
[2021] FCCA 1158
•28 May 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Oxley & Oxley [2021] FCCA 1158
File number(s): BRC 10038 of 2020 Judgment of: JUDGE COATES Date of judgment: 28 May 2021 Catchwords: FAMILY LAW – property – application to set aside final property orders – application dismissed. Legislation: Corporations Act 2001
Family Law Act1975 (Cth), ss 79A
Cases cited: Norbis v Norbis (1986) 161 CLR 513
O’Sullivan v Farrer (1989) 168 CLR 210
Waterman & Waterman [2017] FamCAFC 23
Number of paragraphs: 173 Date of last submission/s: 24 February 2021 Date of hearing: 24 February 2021 Place: Brisbane Solicitor for the Applicant: Towns Wilson Lawyers Counsel for the Respondent: Mr K. Wilson QC Solicitor for the Respondent: Journey Family Lawyers ORDERS
BRC 10038 of 2020 BETWEEN: MS OXLEY
Applicant
AND: MR OXLEY
Respondent
ORDER MADE BY:
JUDGE COATES
DATE OF ORDER:
28 MAY 2021
THE COURT ORDERS:
1.That the Initiating Application filed 29 July 2020 be dismissed.
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 under the pseudonym Oxley & Oxley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE COATES:
Final property orders were made on 1 May 2014.
They were made by consent.
The result of the orders was that:
(a)The wife received a cash payment of $97,500;
(b)The husband received their Suburb B property with its mortgage debt;
(c)The husband retained the company C, indemnifying the wife against all claims and debts, and
(d)Both parties retained vehicles, bank accounts, superannuation and personal items in their name and possession.
The outcome of the final orders was that the wife took 56 percent of the property, after a reasonably short relationship, with the court considering the orders to be just and equitable given the contributions and needs.
The parties later reconciled for another short relationship and then separated again.
The wife filed an Initiating Application on 29 July 2020 seeking to set aside the final orders made in 2014.
Her application was filed pursuant to s.79A of the Family Law Act1975 (“the Act”).
If the orders are set aside, she seeks an equal division of the asset pool, taking into account the current “net value of other assets, liabilities and superannuation”. That is obviously on the basis that new assets have come into existence.
She set out draft orders to achieve that including the selling of a real property at Suburb D (in Queensland), and taking into account all the property existing when she filed this application. The major components of existing property at the time the application was filed includes the house at Suburb D, but also what is probably considered to be a resource for the husband, a lotto win wherein he receives $20,000 a month for 20 years.
Events said to be relevant to the wife’s application are:
(a)Alleged lack of disclosure by the husband when the final orders were made in 2014 with regard to Company C and another company, E Pty Ltd (“E Pty Ltd”);
(b)After reconciliation and before separation the husband winning a lotto prize called Set For Life wherein he receives $20,000 a month for 20 years;
(c)After reconciliation the opening of a joint bank account;
(d)After reconciliation the purchase of a house at Suburb D, put into both names, and
(e)An alleged agreement by the husband to share the lotto win.
The husband sought that the application be dismissed.
Briefly:
(a)The original relationship or cohabitation commenced probably in about mid-2008;
(b)The parties married 2011;
(c)They separated 20 August 2013;
(d)Final property orders were made by consent on 1 May 2014;
(e)The parties reconciled, the wife stating the date being 25 September 2016 and the husband stating it was January 2017;
(f)They separated again, different dates being given by the parties but the latest date being in about February 2019 (the case does not turn on these dates), and
(g)They divorced 5 September 2020.
The wife is aged 57 (born in 1963) and the husband is aged 60 (born in 1960).
THE LAW
Section 79A of the Act provides a unique power to set aside property orders which are otherwise conclusive so as to achieve the object of the Act in severing the financial relationship between parties.
There are two subsections of the Act the wife is relying on for this particular case – s.79A(1)(a) and s.79A(1A), as well as what was called a general justice and equity power.
As to s.79A(1)(a), the Act states:
(1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
For ease of reference I will call this the wife’s ‘non-disclosure case’.
As to s.79A(1A), the Act states:
(1A)A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
For ease of reference I will call this the wife’s ‘alleged consent case’.
A further case, partly referred to on the material but which emerged during submissions, not greatly supported by cross-examination, was that in justice and equity it would be unconscionable not to find for the wife.
For ease of reference I will call this the wife’s ‘justice and equity case’.
In all cases, the onus is that the Applicant is to prove the case.
There was also some cross-over between the cases of alleged facts or circumstances.
As to the ‘non-disclosure case’, the first determination is whether there was a relevant act or omission – in this case a failure to disclose.
If such a determination is made, the next step is determining that such amounts to a miscarriage of justice.
A miscarriage of justice can have many components – but the concept can be understood using the criminal authorities as an explanatory guide – it is in the nature of being deprived of a fair decision because of some factor, which in the case of the Act, names those factors being “by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance”.
The criminal cases usefully refer to missing out on a chance, or a fundamental error, or serious departure from the processes of trial. Failure to disclose under the Act would be a serious departure because of the absolute duty to disclose.
After determining the fact as to whether there has been a relevant act or omission, then and only then is a decision made as to a miscarriage of justice.
At that point the discretion may be exercised to set aside orders.
As to understanding the exercise of discretion, a guide was offered by the High Court in Norbis v Norbis (1986) 10 Fam LR 819 (Mason and Deane JJ):
“Discretion” signifies a number of different legal concepts ... Here the order is discretionary because it depends on the application of a very general standard – what is “just and equitable” – which calls for an overall assessment in the light of the factors mentioned in s.79(4), each of which in turn calls for an assessment of circumstances. Because these assessments call for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right, the making of the order involves the exercise of a judicial discretion. The contrast is with an order the making of which is dictated by the application of a fixed rule to the facts on which its operation depends.
In O’Sullivan v Farrer [1989] 89 ALR 71 Mason CJ, Brennan, Dawson and Gaudron JJ said that:
Where a power to decide is conferred by statute, a general discretion, confined only by the scope and purposes of the legislation, will ordinarily be implied if the context ... provides no positive indication of the considerations by reference to which a decision is to be made.
THE COMPETITING CASES
It was difficult identifying the exact character of some of the wife’s claims, however after hearing both cases, her case may be summarised as follows:
(a)‘Non-disclosure case’ – lack of disclosure as to the extent of the property pool before the final orders were made with particular reference to a company E Pty Ltd;
(b)‘Alleged consent case’ – the reconciliation resulted in the parties living together on a genuine domestic basis for a period exceeding two years, with the lotto win leading to:
(i)The opening of a joint bank account;
(ii)Both parties “retiring”;
(iii)Travelling together, and
(iv)The purchase of a house in both names;
(c)‘Justice and equity case’ – upon separation an oral agreement was made to share the lotto win in non-equal amounts, the particulars being that the husband took steps to put the agreement in writing and made two payments of $2,500 each, such being either an implied agreement to set the final orders aside or a justice and equity consideration where, by revoking the agreement, the husband acted unconscionably, or, it would be unconscionable to exclude the wife.
The husband sought that the application be dismissed, on the basis that:
(a)The evidence did not establish that there was not full and frank disclosure so as to amount to non-disclosure within the meaning of the Act;
(b)That there had been no miscarriage of justice, so there was no discretion to exercise;
(c)That the acts undertaken by both parties made no material change to the final consent orders in place;
(d)That there was no implied agreement or consent to set aside the final orders of 2014;
(e)That there was no power under the Act on the ‘justice and equity case’, and
(f)That there is no utility in setting aside the orders.
NON-DISCLOSURE CASE
As to the alleged lack of disclosure, relevant background history is essential.
At the time of the final orders, the husband was working within two businesses, Company C and E Pty Ltd.
The wife is claiming now that when the final orders were made “… she was not fully aware of the extent of the property pool due to non-disclosure of the respondent’s business interests” (paragraph 4(1)) of her Outline of Argument filed by leave on 24 February 2021, and, “The respondent husband accepts that he was a director of the business E Pty Ltd (“E Pty Ltd”) but says that he was only a paid director and did not held [sic] any shares therein” (see paragraph 6 of that Outline of Argument).
In her affidavit filed 4 February 2021, at paragraph 32 she claimed that the husband said during settlement negotiations that she could have Company C but that he “quickly followed this by basically saying that it wouldn’t be worth my while”.
That he offered the wife Company C was confirmed by the husband, but not words to the effect that it would not be worth her while.
While the wife’s case questioned the value of Company C at the time of the final orders being made, its value was stated in the 2014 Application for Consent Orders, the value then being $5,000.
In the witness box the wife conceded that figure was in the document and that she knew of the figure.
In my view such a concession was inevitable, because:
(a)She signed that document after receiving legal advice – which I will refer to later – as to the settlement;
(b)She also claimed she had assisted with management of the company and she knew it had been purchased from the Official Receiver for $7,500 a short time before in 2011 when the then owner was in deep financial trouble, and
(c)She made no claim that from the purchase date in 2011 to the final orders in 2014 that the company had made a remarkable recovery to increase its value.
Faced in cross-examination with the document, her concession as to her real knowledge was inevitable. That she ran that part of her case on an alleged failure by the husband to disclose the value was misleading and goes to her credit, a matter I will address below.
In the same paragraph (paragraph 32) she claimed that the husband intended keeping E Pty Ltd and told her it was not part of the settlement as it was his company, that he would make it difficult for her to include it in the settlement and widened her argument to include lack of disclosure about either Company C and E Pty Ltd, stating she never received any “documentation of assets and liabilities, profit and loss, bank statements etc for either business with regard to our property settlement at the time”.
I must state that there is difficulty in understanding why this allegation is inserted into the wife’s material, because at the time she swore the affidavit, 4 February 2021, she had seen Australian Securities and Investments Commission (“ASIC”) documents which revealed, as the husband claimed, that he had never owned the company and had no shareholding in it.
That she claimed the husband told her he owned E Pty Ltd just does not make a great deal of logical sense, since he had no ownership control over it, and had never had ownership control over it. There is simply no point in the husband making a statement that he owned a company, which he did not, during property proceedings as there is no legal advantage to him in doing so.
But here the wife’s case seemed to change, from an allegation that the husband owned the company, to one where he exercised a control over it.
This particular aspect of the case was not particularly clear in the affidavit material, but became clear during cross-examination of the husband.
In her affidavit filed 4 February 2021 at paragraph 21, the wife stated that the husband “… continued to work as a scientist [sic] in his own business, E Pty Ltd”. She went on in that paragraph to note that the husband stated he was not obliged to provide her with disclosure about the company because he was not a shareholder. She also wrongly claimed, without correction when the affidavit was admitted, that the husband set the company up prior to their initial cohabitation and that “It was his business and there were no employees”. She then stated she was not told whether he was running the E Pty Ltd business through a family trust or otherwise. This statement was made on the back of a remarkable claim, that she had “since found a copy of his family trust which commenced on 12 January 2007 and Mr Oxley [the husband] is the settlor, trustee and one of the beneficiaries” and that none of the trust business was disclosed to her.
I am keeping in mind that by the time she filed this affidavit she knew that the ASIC documents revealed the husband did not own the company, despite repeating the husband’s correct legal position of not being able to disclose information about a company he did not own, but it was perplexing that she did not produce the copy of the trust deed she claimed to have found, give any particulars about the deed’s clauses or call for the original.
The husband’s evidence, uncontradicted, was that he was the director of the company, and only drew wages.
At the time of the final orders on 1 May 2014, the shareholders of E Pty Ltd were the husband’s former partner Ms F and his uncle Mr G.
So that the wife now understands the legal position, he was not under any duty pursuant to the Act to disclose anything about the company, other than his wages.
She still maintained her immovable position that disclosure had not been made and he controlled the company financially for his own ends.
While it is not unknown that what has been referred to as the company veil being lifted, what would be required would be a set of circumstances, either extracted under cross-examination, or more likely than not in the form of independent facts, to come to a conclusion that a person not otherwise connected with the stated ownership of a company did in fact exercise total control over that company in the sense, as alleged here, of having access to more than wages. In other words, circumstantial evidence is required.
To this end, the wife sought to have a favourable decision in line with her conclusions, based on the ownership of shares, but without being able to refer to any independent facts upon which a circumstantial case could rest.
She stated this in her affidavit at paragraphs 22 and 23:
22.I attach ASIC search – Current & Historical Company Extract for the E Pty Ltd business. Annexure “:01”. This Extract indicates Ms F was a director until 2008, Mr Oxley was a director since then until 4 July 2018. Then his son Mr H (“Mr H”) was appointed. 3 shares were issued, 2 shares were held by Ms F, and 1 share was held by Mr J. All 3 shares are now held by Mr H Pty Ltd.
23.I have also done an ASIC search for Mr H Pty Ltd. It is attached and marked as Annexure “:02”. This search indicates that 12 shares were issued for Mr H Pty Ltd, Mr Oxley previously held 6 shares. Mr H, Mr Oxley’s son, now holds all 12 shares.
The evidence is that the husband continued in his role as a director of E Pty Ltd until 4 July 2018, and this appears to be another fact upon which the wife formed a belief that he somehow exercised a control over the company, over and above that of his duties as a director under company law.
In viewing the two ASIC documents the husband’s son became a director of E Pty Ltd on 4 July 2018, which is well after the final consent orders were made on 1 May 2014. Mr H Pty Ltd was first registered on 4 July 2018, and Mr H held the 12 shares of the company. At some stage, not apparent on the ASIC records, the husband held 12 shares in Mr H Pty Ltd.
In what follows as to E Pty Ltd, I will refer to facts in inverted commas, meaning that the wife believes they are facts but indeed they are simply allegations.
What then seems to be the first “fact” from which I am to draw an inferential finding that the husband controlled E Pty Ltd at the time the consent orders were made, without proper or any disclosure, is the husband’s continued directorship until 4 July 2018 and some interest he had in his son’s company Mr H Pty Ltd, which was not registered as an entity until 4 July 2018, well after the final orders were made in 2014.
What seems to be the second “fact” from which I am to draw an inferential finding is that the husband transferred his ownership in Company C to his son Mr H on 4 July 2018. As a finding I will state that the company was his to do with as he liked, and at the time of the property settlement in 2014, it was worth only $5,000, as the wife admitted under cross-examination, and it is not an independent fact relevant or even connected to the wife’s claim.
What seems to be the third “fact” from which I am to draw an inferential finding is that the husband transferred his shares in Mr H Pty Ltd to his son Mr H and resigned as a director on 22 April 2020 (see paragraph 12 of the wife’s Outline of Argument document).
And in cross-examination, which seemed to be a fourth “fact” from which I am to draw an inferential finding, a new angle arose when the husband was questioned about his ability to pay out the wife’s $97,500 she received in the settlement of 2014, and his reduction of his mortgage by about $155,000. He was questioned about his wages and it was revealed he earnt at the time about $70,000.
This part of the cross-examination was more in the line of being opportunistic in the hope that some disclosure would fall from the witness box to tie the wife’s beliefs together so that the court could see this alleged control of E Pty Ltd, outside the control of the registered owners. It was not based on any existing information, knowledge or logical progression from known facts and nor could it be, because no planning had been put into the wife’s case to subpoena any financial records (which could have included company bank accounts, taxation returns, profit and loss statements or loans to directors) from E Pty Ltd, and no enquiry was made as to whether shareholders past and present could give evidence and no customers were produced who may have some knowledge through their dealings with the husband as the company’s director. Obviously there would have been rulings on the admissibility of such evidence, but there was simply no attempt to secure evidence independent of the husband, or the wife’s views. Further, the husband was never cross-examined as to his duties under company law, or about the company’s finances, earnings, losses or profits and no call was made for any document.
Despite proper objection that the court’s time was being wasted, I allowed the cross-examination to continue to properly understand the wife’s case, but I stopped the questioning when it was beginning to suggest that the husband was engaged in acts which may be in breach of the Corporations Act2001, of which there was no warning, and no evidence at all upon which to base such questions.
However, as to the husband’s ability to pay the wife’s amount under the final orders and reduce his mortgage, he did answer a question as to earning money, being that he fixed and sold motorcycles and caravans – at which point no further questions were asked. It was obvious that either:
(a)The wife’s solicitor was not expecting such an answer and could not put any other circumstance as to how the husband earnt money to pay the wife out, or
(b)The wife knew the answer to be true.
Her case was left with answers damaging her claims.
A new tack was then tried. On instructions, the husband was questioned about claims on the internet that he owned E Pty Ltd and it was connected with Company C, which seemed to be a fifth “fact” from which I was to draw an inferential finding.
The claims appear on the internet site of Company C.
The questions were obviously asked on oral instructions, because no reference was made to these claims in the wife’s sworn material.
The answer was not what was expected – the husband stated that the web site was old, which is a fact because he is no longer associated with either company, and, it was the wife who prepared the web site and posted to it, including the posted claims of the husband owning E Pty Ltd.
Such answers caused the questioning to cease immediately. The wife’s solicitor then did not know what further answers were about to be given had he continued. None of this method in running the wife’s case elicited any evidence or independent facts to show the husband secretly controlled E Pty Ltd.
The sixth “fact” in contention, the wife’s legal advice, was that the husband organised the solicitor for the wife before she signed the document which became the consent orders.
The claim obviously is that the solicitor had a conflict of interest or that the solicitor did not do a professional and independent job.
The husband made an appointment for the wife with the solicitor in City K, where the wife was living at the time, for advice on having the court make orders by consent.
There was no evidence of any connection otherwise between the husband and the solicitor.
The wife claimed that the husband was going to pay the solicitor and that she only saw the solicitor once to sign orders presented to her.
As to payment, I am satisfied that the husband agreed to pay $500 towards the solicitor’s fee and paid that.
In fact the solicitor’s total fee came to $2,124.03, according to correspondence attached to the husband’s affidavit, such correspondence confirming the contact the wife had with the solicitors. There was no evidence as to who paid the full amount but it is irrelevant to this decision.
No positive allegation of impropriety was made against the husband or the solicitor, but the overall thrust of the wife’s case was that something untoward had occurred with regard to her legal advice.
There is no evidence that the husband’s arrangement for the solicitor or part payment for the wife’s legal costs in any way taints the orders made by consent, and it is not unusual for costs to be borne by one party in such proceedings.
The wife claimed, categorically, that she only saw the solicitor to sign the consent orders and the effect of the orders were not explained to her.
Under cross-examination she had to retract that claim, as it was obvious from documents, available to the wife, that there were numerous contacts between the wife and the solicitor, including personal visits, telephone calls and written correspondence.
She said she forgot this contact.
It is a funny thing to forget since her claims that the husband denied her opportunity to know about the E Pty Ltd business was tied up with her legal advice, and became the focus of important cross-examination – in that she knew the E Pty Ltd business existed, she admitted to telling her solicitor it existed, but expressed surprise at this trial, not at any time beforehand, that it was not in the proposed settlement. She admitted that she made no enquiries why her solicitor had not included the E Pty Ltd company or why he had made no proper enquiry as to its value.
As I heard her case, I concluded that the wife’s original statements were calculated to lead the court to the position that the husband was controlling the solicitor, even though she would not state that as an outright allegation.
The solicitor was not called by the wife, or his documents relating to the advice he gave, or his file notes subpoenaed to support her claims.
So the six “facts” identified above can be assessed.
On alleged “facts” one and two – there is no admissible evidence that the husband’s connection with either E Pty Ltd or Company C is such so as to show a secret control over E Pty Ltd. Share ownership and the transfer of shares, well after the 2014 consent orders, cannot be connected with the alleged failure to disclose which the wife is basing her case on from those two “facts”. As a finding I will state that cross-examination did not identify that the husband’s continued directorship of Company C until 2018 and an interest in the son’s company was a fact relevant to the wife’s claim. As a further finding I will state that the company was the husband’s to do with as he liked, and at the time of the property settlement in 2014, it was worth only $5,000, as the wife admitted under cross-examination, and it is not an independent fact relevant or even connected to the wife’s claim.
On alleged “fact” three, there was no cross-examination as to interests of the husband in Mr H Pty Ltd, such as to lead to a conclusion that in 2014 the wife had been denied access to financial information. As a finding, there was no comprehendible case that this “fact” was relevant to the wife’s case.
On alleged “fact” four, the case for the wife as to the husband’s ability to pay her out was opportunistic and not prepared, and simply went nowhere. The questioning did not pin down a figure which would be useful to the determination of the fact-finding process which has to be performed, and the suggestion that the husband accessed company money to pay the wife, and thus exercised secretly a control of E Pty Ltd, has no basis in fact.
On alleged “fact” five, questions were embarked upon without knowing any background as to the construction of the web site, information within the wife’s knowledge.
On alleged “fact” six, evidence generated by the solicitor who gave advice to the wife, simply his business correspondence to her, show no connection to the husband, other than he paid some of the legal fees, but that there was far more contact between the wife and the solicitor than she swore to in her affidavit.
In all of these claims, there is simply no case made out by the wife that financial disclosure relevant to the 2014 settlement was not made available to her.
Although it was open for the husband’s counsel to submit that some of what the wife stated were material lies, he did not go that far. That she “forgot” about the contact with her solicitor is probably a material lie, but all of this evidence surrounding her claims about lack of disclosure on both E Pty Ltd and Company C really displayed the wife’s evidence as lacking all credit as to her real knowledge of ownership of E Pty Ltd.
She has alleged a case of the husband being the secret owner of a company he does not legally own, and her case lacks any evidence whatsoever to prove that case.
This part of her application is dismissed.
SECTION 79A(1A) OF THE ACT – ALLEGED CONSENT CASE TO SETTING ASIDE THE FINAL ORDERS
Section 79A(1A) of the Act allows parties to set aside final orders. However, the court here is being asked to come to that decision on a circumstantial case. A circumstantial case, in short, relies on independent facts not amounting to the final fact alone, from which an inference can be concluded as to the final fact.
In such circumstances I was referred to Waterman & Waterman [2017] FamCAFC 23, where it was said:
87.… The relevant inquiry … is whether the post-reconciliation circumstances over the time frame of the reconciliation establish an inference that the parties intended the orders to not bring an end to their financial relationship and, consequently, an end to a later determination of later contributions made within the relationship.
The wife relies upon reconciliation and events stemming from it.
Reconciliation is a fact, cohabitation occurring probably from either just before or in early 2017 until separation either in February 2019 on the wife’s case or perhaps in December 2018 on the husband’s case (although there were claims as to the length of the relationship the questioning did not establish a time frame with precision).
Events of relevance relied on by the wife, which are facts, are:
(a)In or about January 2018 the husband refused to re-transfer the Suburb B property, which he took under the final orders of 2014, back into joint names;
(b)7 February 2018 the husband won lotto – Set For Life, which gave him $20,000 a month for 20 years;
(c)19 February 2018 a joint account opened, and
(d)August 2018 a house at Suburb D was purchased in both names.
As well, the wife seems to be relying on:
(a)Non-financial contributions and financial contributions, and
(b)An alleged fact, which is also the main argument in her justice and equity case, that an oral agreement was made on 12 April 2019 as to a property settlement, being $2,500 to be paid by the husband monthly until a new agreement was signed, the payment then to increase to $4,000 a month until the Suburb D property was sold, and then a 35 percent division to the wife of the lotto win. She alleged that there was an agreement for the wife’s lawyer to prepare draft consent orders. Two payments were made of $2,500 on 15 April 2019 and 15 May 2019. The wife attached a copy of a draft agreement she had drawn up which she claimed represented the oral agreement. I note that it does not contain the words that the previous orders are set aside.
On this part of her case, keeping in mind the onus is on her to prove the case, I was satisfied:
(a)That the wife spent some of her monies on expenses such as food, while also spending her money on herself;
(b)The husband paid the major joint expenses, including travel;
(c)That on the evidence the husband did much of the non-financial contribution such as cooking, although the wife also did some, and
(d)That both had done some housework.
Even taken together, these facts and acts do not amount to such a contribution by the wife to determine that such amounts to an agreement to set aside the final orders of 1 May 2014. Apart from the major joint expenses, there was not a great deal of money involved on the part of the wife and there was no evidence in her case that the money spent by her would be no more than she would have to spend, other than for housing, on herself, had she not been with the husband.
What would be required would be contributions capable of being held to be substantial and connected to the orders in place so that those orders could be seen to be set aside by agreement.
On a very significant matter, I was satisfied that the husband’s refusal to transfer the Suburb B property, the property that existed at the time of the 2014 orders and which the husband took and paid for under those orders, was a premeditated act by him deliberately calculated not to set aside the final orders.
He said he was badgered by the wife while on holiday in December 2017/January 2018 to transfer the house back – and he refused to do so.
The wife denies badgering the husband, but the real issue is that had the husband transferred the house back to joint names, that would be a relevant act to show that the final orders were being set aside by agreement.
It did not happen.
The only inference to be drawn is that he refused to set the final orders aside at that stage of their renewed relationship.
None of the other items each party took changed legal ownership to support the wife’s claim of setting aside the final orders by redistribution of goods and chattels.
As to the lotto win, the ticket was purchased by the husband.
He had spent about $100 a month for many years, and well before meeting the wife, on buying lotto tickets.
There was agreement by the wife in the witness box that he alone contributed to the purchase, by his act and expenditure.
There was agreement that the wife did not contribute in any way to the purchase.
Apart from an issue of equity on the lotto win which I will come back to, the lotto win was relied on by the wife because of subsequent events.
That a joint account was opened is a major component of the wife’s case.
The account was opened after the lotto win, and not before, even though the parties had been back together for at least a year. I was satisfied that the wife had spent some of her money for both parties’ benefit, but not that such amounted to setting aside the final orders of 2014 – as no property from those orders had its ownership altered in the relationship during the reconciliation period.
The joint account signifies ownership of the account jointly, but it did not exist before 19 February 2018.
However without the husband’s contribution of $5,000 a month, the account could not and would not have been opened jointly in both names.
The account was opened to pay for living expenses of both parties. I keep in mind that he claims the wife spent her money, mostly, on herself and despite some expenditure identifiable from bank statements, and despite her answers that she was shopping for both parties, some of her expenditure was not for both but for her alone.
The question arises as to whether the opening of the account can be considered an act of both parties to share their life, using a term which some judgments have referred to, in ‘coupledom’.
Cross-examination revealed, by the wife’s admission, that she did not contribute one cent to that joint account – all of the money came from the husband.
She did have some income, until she “retired” after the lotto win.
She did not contribute that income to the joint account.
She admitted in cross-examination that the husband fully funded the joint account.
I make the finding that she did not contribute to the establishment or maintenance of the joint account, other than a signature to open it, but that she subsequently used funds therein.
The purchase of a house in joint names is perhaps the wife’s strongest argument as to a relationship as a couple, but the legal issue to determine is whether it amounts to an agreement to set aside the orders of 1 May 2014.
The purchase of the house does not affect any of the property subject to the alteration of property interest orders made 1 May 2014.
It is a new property.
If there was evidence that the wife made a contribution, either of money or a substantial non-financial contribution, that may provide a fact to consider her claim that by implication the final orders of 1 May 2014 had been set aside.
All that occurred is that the husband put the wife’s name on the title, which did not alter the consent orders of 2014 as to property ownership.
The wife claims that should the final orders not be set aside, then she would be left on the expensive road of going through the Supreme Court of Queensland, although what for is not apparent. I cannot imagine the husband would want to keep the wife’s name on the title and he has funds to have it removed. As to being liable for the loan, so is the husband and again, I cannot imagine why he would want to keep the wife’s name on the loan and it does not appear she would have monies to satisfy demands made on the loan. The husband has such monies.
The wife further claimed she provided $10,000 towards the purchase of the house, and seeks that such be determined as an act whereby the parties were living in coupledom.
The husband denied that, or said it had been paid back.
If a person pays $10,000 towards a house, there must be a paper trail existing. Even if the claim was she gave the money in cash to the husband, and that is not the claim, there would still be existing a paper trail as to how that money came into existence in the hands of the claimant and its use by the husband. A cash component of a house deposit would have been recorded as cash by the lender.
No documentation capable of considering this claim was produced by the wife, despite her saying she could produce such, stating “… if you want I can show it to you”.
In the terms of her possessions, an amount of $10,000 would be significant and capable of being considered a significant contribution.
The onus at all times has fallen on the wife to prove her claim, not to leave it to the husband to seek out the evidence she states she has but did not produce.
As to the husband stating that if she had contributed $10,000 it had been paid back, such may have been a reference to the wife taking $56,000 from the joint bank account when she left, or that she was the recipient of his expenditure on her including travel, although the husband was not cross-examined about this statement.
There must be a reason why he was not cross-examined about such an obvious invitation to seek particulars. Whatever the reason, he was not asked.
The claim about paying $10,000, given that no documentary evidence was produced, was probably a lie, but even if it does not amount to that, to make the claim and fail to produce documentary evidence does her credit no favour.
The concept of living as a couple includes such things as joint property.
But it also takes in a contribution within the circumstances of the parties.
There was no evidence as to the loan for the house being obtained other than the husband obtaining it due to his lotto win, without contribution by the wife, either to a constant purchase of lotto tickets which the husband gave evidence of, or to the deposit on the house.
Further, and significantly, the wife admitted in cross-examination she had not paid a cent towards the mortgage, or the rates or the utilities, although when purchased, she had employment.
There is nothing in this part of the evidence to suggest that an inferential finding can be made that the final orders of 2014 were set aside, the test being that some act(s) or omission(s) sets the orders aside by consent. The final orders remained in place.
The next issue raised by the wife was an alleged agreement to share the lotto win at the rate of $2,500 a month until a new set of consent orders were made wherein she would receive 35 percent of the lotto win.
The wife claimed the husband verbally agreed to that – without giving particulars of the conversation or conversations other than a date being 12 April 2019 – and two amounts of $2,500 were paid, before he reneged on the agreement.
The husband states there was no agreement.
He said the wife constantly demanded she get a share of the lotto win and he decided to give her the two amounts of $2,500 until he could get legal advice.
He expanded that in cross-examination and said she was also in financial difficulty.
He said once he considered his position from an informed basis, he ceased paying the money.
The point is this – even if there was an agreement to pay the wife monies from the lotto win, eventually resulting in an alteration of the then existing property so that 35 percent of the lotto amount would go to the wife, such has to show an implied agreement to set the final orders of 2014 aside.
It may be that at one stage the husband intended supporting both parties, he paid for everything including holidays, but whatever his intention was for a reasonably short period after the lotto win, he changed his mind – his reason being that the wife became lazy and demanding – although his reasons go to his contributions compared with the wife’s contributions, and contributions are not a consideration under this particular section per se, unless such can show that by implication they set aside the final orders of 2014.
The wife cannot succeed on this claim as there is no evidence of an implied intention to set aside the final orders of 2014.
JUSTICE AND EQUITY CASE
In another difficult case to follow, it appeared the wife’s solicitor was claiming that there is a power to make a decision on a justice and equity basis, such was the nature of some evidence and some submissions.
During submissions, after referring to the non-disclosure claim and an implied agreement to set the orders aside, the wife’s solicitor stated: “… and the last one is what I’m saying is it would be unconscionable to retain the orders in those particular circumstances”.
It became clear in his submissions he was referring to the lotto win, stating the final orders of 2014 made no provision for a reconciliation and a windfall as was received by the husband.
He said the windfall belonged to both parties and very clearly there was going to be an agreement, evidenced by the payment of two amounts by the husband of $2,500 each. Although I made a finding that the wife did not contribute to the purchase of the lotto ticket, and whether it was a windfall or not, it was the husband’s practice for years, even before the parties met, to spend a certain amount on lotto tickets. It is simply not a windfall for both parties.
The wife’s solicitor then made a submission that there is evidence of all that the wife claims, because she has sworn to its truth.
I must say I was surprised by such a submission, but it did reflect the wife’s evidence about payment of a $10,000 deposit for the Suburb D property, as she said she put it into her affidavit, and I took her to mean that such makes it true.
It is not the law that simply because someone swears to the truth such makes their claims truthful.
In fact, from my references above, it is apparent that the wife’s credit is in issue in this case, on claims of only seeing her solicitor once, on claims of paying $10,000 towards the deposit for the Suburb D property and on all claims about E Pty Ltd referred to above.
In the way the wife framed her case, this is a matter now where I must make findings with regard to the wife. I find the wife lied about the contact she had with her solicitor, that the solicitor acted for her alone and was not under any influence of the husband. I find she lacked credit in her claim that she paid a $10,000 deposit for the Suburb D property and she lacked all credit in her claims that she knew nothing about the ownership of both Company C and E Pty Ltd.
This was all a very speculative aspect of the wife’s case and on this part she cannot succeed with her argument. There was no proper legal submission as to how some type of just and equitable power which the court could exercise exists, when no authorities were referred to, and no basis for the argument stated, because there is no power stated in the legislation.
Consequently, the wife’s application is dismissed.
I did not refer to evidence relied on by the wife from her family members, but it did not assist her case. In fact some of it assisted the husband to show the parties were having relationship problems after reconciliation.
I also did not refer to correspondence from the lottery office attached to the husband’s affidavit filed 18 February 2021 reflecting an enquiry about the splitting of the lotto win and a reference to receiving a copy of proposed consent orders. The correspondence is a reply to a letter from the husband’s former solicitor. The solicitor for the wife did not refer to the letter in his submissions and the correspondence being replied to was not in evidence and not called for. It is not evidence that the husband was in agreement with proposed consent orders. It is evidence that he was enquiring about the legal position of the winnings. It goes no further than that. In any case, I repeat, even if at some stage the husband was considering giving the wife some of the winnings, it was his money to do with as he liked, and a change of mind does not bring his property or resources, created after the final orders were made, within the provision to set aside the final orders, unless there is clear evidence that the final orders were to be set aside. It is not a question of an unconscionable act as has been put in this case. No property the wife took in 2014 has been affected in any way by the short term reconciliation and what the husband shared with her for the period did not take on the character of giving her an equitable ownership in any property. In simple terms, the evidence is that she spent a small amount of money on both of them and he spent a large amount of money on both of them.
I need to make some general comments.
There is a continuing practice on the part of some legal practitioners, or at least there is the appearance of such, of failing to properly assess the cases being presented to the court. In this case, there appears to be a failure to check the wife’s claims, especially as to claims she made about seeing her solicitor, claims she made about the ownership of E Pty Ltd, claims she made about the value of Company C not being revealed and claims of payment of $10,000 towards the property. Checking a client’s claims used to be called proofing the witness. She was not proofed, otherwise the case would not have been run as it was put before the court. She even claimed, or complained, that the 2014 property settlement orders removed her as a director of Company C – which is not actually the case. Lack of proofing of a witness is a problem occurring in some other matters which causes some trials to go ahead when proper assessment and advice on prospects was required. Such just slows the system when this court is attempting to deal efficiently with thousands of matters.
I have referred to some legal practitioners and I am not referring to the majority who do a very good job in difficult circumstances in a difficult jurisdiction. I am also not referring to cases which need to be run because a litigant wants their day in court, such cases are sometimes unavoidable, but very clearly, legal practitioners should be giving advice on prospects of unmeritorious cases.
I certify that the preceding one hundred and seventy-three (173) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Coates. Associate:
Dated: 28 May 2021
Key Legal Topics
Areas of Law
-
Family Law
-
Civil Procedure
Legal Concepts
-
Procedural Fairness
-
Jurisdiction
-
Injunction
-
Remedies
0