Painter-Ward and Ward
[2012] FMCAfam 245
•30 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PAINTER-WARD & WARD | [2012] FMCAfam 245 |
| FAMILY LAW – Property – approximately equal contributions at commencement of cohabitation and at separation – period of cohabitation approximately 21 years – husband’s claim of post-separation debts owing to him by wife – financial contributions by wife since separation exceeds that of husband – both parties with considerable personal debt. |
| Family Law Act 1975 (Cth), ss.75(2), 79(4), 81 |
| Applicant: | MS PAINTER-WARD |
| Respondent: | MR WARD |
| File Number: | MLC 2470 of 2011 |
| Judgment of: | Hartnett FM |
| Hearing dates: | 14, 15 & 16 March 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 30 March 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Potter |
| Solicitors for the Applicant: | Lewis Holdway Lawyers |
| The Respondent: | In person |
THE COURT ORDERS THAT:
The respondent husband, within 90 days hereof, lodge with the Australian Taxation Office each and every one of his taxation returns which remain outstanding and include for the years ended 30 June 2006 to the year ended 30 June 2011, together with the taxation returns of any business and/or company operated by him and provide proof of same to the wife’s solicitors. In the event of non-compliance with this order the Court will give consideration to referring this matter to the Commissioner of Taxation.
Forthwith the property located at Property P in the State of Queensland being the whole of the land more particularly described in Certificate of Title with title reference 16905148 (Property P property) be placed on the real estate market for sale with an agent to be as determined by the wife and in the State of Queensland and with an auction to be held in no more than two months upon such terms and conditions, including reserve price, as are agreed between the parties and in default of written agreement within 14 days hereof, then on terms, conditions and at a reserve price as shall be nominated by the president (for the time being) of the REIQ and the proceeds derived from the sale be applied as follows:
(a)first, to pay all costs, commissions and expenses of the sale;
(b)second, to discharge the line of credit to the National Australia Bank with BSB 083437, account number 561664081 (‘Property P line of credit’);
(c)third, to pay the net proceeds of sale as to:
(i)the husband 50% but out of the husband’s share and before being paid out to him is to come any amount not paid by him pursuant to the orders made by the Court on 14 September 2011 being order number 1 and pursuant to these orders and such monies shall be paid to the wife together with interest on same in the sum of 10% per annum calculated from the date of default until the date of payment; and
(ii)the wife 50%.
Pending the sale of the Property P property:
(a)the husband be entitled to solely occupy the Property P property;
(b)the husband be solely responsible for all rates and taxes and like apportionable outgoings of the Property P property as they fall due;
(c)the husband be solely responsible for all repayments on the line of credit owing to the National Australia Bank secured against the Property P property with reference number BSB (omitted), account number (omitted) (‘Property P property line of credit’);
(d)neither party is to encumber the Property P property without the consent in writing of the other party;
(e)the husband ensure that, at all times, the Property P property is kept in a marketable and presentable condition; and
(f)the husband ensure that he make the Property P property available at all reasonable times as requested by the appointed selling agent.
Forthwith the property located at Property A in the State of Victoria being the whole of the land more particularly described in Certificate of Title with title reference Volume 10550, Folio 895 (‘(omitted) property’) be placed on the real estate market for sale, with the wife to appoint a real estate agent and with an auction to be held in no more than two months upon such terms and conditions, including reserve price, as are agreed between the parties and in default of written agreement within 14 days hereof, then on terms, conditions and at a reserve price as shall be nominated by the president (for the time being) of the REIV and the proceeds derived from the sale be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale;
(b)secondly, to discharge the line of credit to the National Australia Bank with BSB (omitted), account number (omitted) (‘the Property A line of credit’);
(c)thirdly, to the wife 80%; and
(d)fourthly, to the husband 20%.
Pending the sale of the (omitted) property:
(a)the wife be entitled to solely occupy the (omitted) property;
(b)the wife be solely responsible for all rates and taxes and like apportionable outgoings of the (omitted) property as they fall due;
(c)the wife be solely responsible for all repayments on the line of credit owing to the National Australia Bank secured against the (omitted) property with reference number BSB (omitted), account number (omitted) (‘Property A property line of credit’);
(d)neither party is to encumber the Property A property without the consent in writing of the other party first obtained;
(e)the wife ensure that at all times, the Property A property is kept in a marketable and presentable condition; and
(f)the wife ensure that she make the Property A property available at all reasonable times as requested by the appointed selling agent.
By consent, within 14 days of the date of these orders, the parties contemporaneously do the following:
(a)the husband do all such acts and things required to transfer his right, title and interest in the (omitted) Vacation credits to the wife;
(b)the wife do all such acts and things required to discharge the husband from the lease held over the (omitted) Vacation credits.
The wife retain all of her property absolutely, to the exclusion of the husband, and the husband relinquish any entitlement to the wife’s property as follows:
(a)her individual bank accounts;
(b)any chattels in her possession;
(c)her superannuation balance; and
(d)her Volvo motor vehicle.
The husband retain all of his property absolutely, to the exclusion of the wife, and the wife relinquish any entitlement to the husband’s property as follows:
(a)his individual bank accounts;
(b)any chattels in his possession;
(c)his Range Rover; and
(d)his Telstra shares.
By consent, the wife indemnify the husband from all and any taxation liability owing by her to the Australian Taxation Office and being past, present and future.
The husband indemnify the wife from any liability pursuant to court judgments entered against him in the past, present and the future and further indemnify the wife against all and any taxation liability owing by him to the Australian Taxation Office and being past, present and future.
The parties each retain sole responsibility for all credit card debts and personal loans held in their individual names and indemnify the other party from any such debt.
Unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:
(a)each party shall be solely entitled, to the exclusion of the other, to all property, including choses in action, in the possession of such party as at this date;
(b)money standing to the credit of either the wife or the husband in any bank, building society or investment account shall be the property of the account holder;
(c)all insurance policies shall be the sole property of the owner named therein;
(d)each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)each party shall be solely liable for and indemnity the other in respect of their individual debts; and
(f)any joint tenancy of the parties in any property, real or personal, is hereby severed.
There is liberty to the wife to apply with respect to the question of costs and the payment of her legal costs, in part or in their entirety by the husband.
Pursuant to s.81 of the Family Law Act 1975 (Cth) the parties intend these orders shall, as far as practicable, finally determine the financial relationships between them and avoid further proceedings between them.
IT IS NOTED that publication of this judgment under the pseudonym Painter-Ward & Ward is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 2470 of 2011
| MS PAINTER-WARD |
Applicant
And
| MR WARD |
Respondent
REASONS FOR JUDGMENT
These proceedings commenced with the applicant wife filing an application for property orders. At trial, the orders sought by the wife were those set out in her amended application filed 9 March 2012. The orders sought by the respondent husband were those as set out in his response filed 13 March 2012.
The wife relied upon the following affidavits of evidence sworn by her on:
a)25 March 2011;
b)18 July 2011;
c)26 August 2011;
d)13 September 2011 (two affidavits);
e)22 February 2012;
f)8 March 2012; and
g)13 March 2012.
In addition, the wife relied upon a financial statement sworn and filed by her on 13 March 2012.
The husband relied upon affidavits affirmed by him in the proceedings on
a)18 May 2011;
b)9 June 2011;
c)8 March 2012; and
d)13 March 2012.
The husband also relied upon a financial statement dated 13 March 2012, and the earlier financial statement by him.
Statements of fact in these reasons are findings of fact on the balance of probabilities.
Pool of Assets
The pool of assets as at the date of trial is as follows:
a)Assets:
i)the real property known as and situated at Property A in the State of Victoria and registered in the wife’s sole name with an agreed value of $470,000;
ii)the real property known as and situated at Property P in the State of Queensland and registered in the joint names of the parties with an agreed value of $375,000;
iii)a Range Rover motor vehicle in the husband’s registered name and possession, with an agreed value of $8,000;
iv)a Volvo motor vehicle in the wife’s name and possession with no, or negative equity;
v)a joint interest of the parties in (omitted) Resorts with an agreed value of $20,000; and
vi)Telstra shares in the husband’s name with an agreed value of $1,400; and
vii)chattels in each of the parties’ respective possession unvalued.
b)Liabilities:
i)a mortgage secured over the real property at Property A, $241,419.83;
ii)a mortgage secured over the real property at Property P, $241,390.82;
iii)wife’s Australian Taxation Office debt which she claims to be $142,078.65 and which the husband asserts is less;
iv)wife’s credit cards debt of approximately $60,000;
v)husband’s credit card debt of approximately $33,821.94; and
vi)the husband’s alleged judgment debts totalling $68,868 which he claims relate to two court actions against him but in relation to which he puts before the Court no evidence.
I note the equity in the real property at Property A is in the sum of $228,580.17, and the equity in the real property at Property P is in the sum of $133,609.18.
c)Superannuation:
i)the wife’s superannuation, with Premium Choice Superannuation Fund was approximately $45,000;
ii)the husband has no superannuation entitlements.
d)Other:
i)there are various other debts claimed by the husband to be outstanding to him from the wife, and they shall be dealt with further in these reasons.
Background
The husband was born on the (omitted) 1944 and he is aged 67 years. He has been, since 14 December 2009, in receipt of an aged pension. He has also continued to earn undeclared income – both to the wife in part and to the Australian Taxation Office in full – in the intervening period between separation and the date of trial.
The wife was born on (omitted) 1954 and she is aged 57 years. She is employed as an employee (omitted).
The wife claims to be in good health although she suffers from a depressive disorder. The husband claims that his health is poor. Although he attached to his affidavit of evidence-in-chief sworn 8 March 2012 a doctor’s medical report, and a report on a CT scan of the lumbar area of his back, he otherwise put before the Court no medical evidence attesting to the fact that the husband, by virtue of his health, was unable to be gainfully employed. Indeed the husband’s own evidence is that he is employed in a part-time capacity and by various employers, including (omitted), with whom he entered into a consultancy agreement dated 25 February 2009 and in relation to which his evidence is that such consultancy work is continuing.
There are no children of the husband and wife. The husband has three adult children from a previous marriage.
The parties commenced cohabitating in approximately 1982, initially as flatmates before commencing a romantic relationship in 1984. At the time of the commencement of their cohabitation, neither of the parties had assets of any significance. The husband claimed that he had a 1982 Rover motor vehicle, and otherwise had household effects. The wife claimed herself to have a motor vehicle and likewise household effects.
The wife’s evidence is that at the commencement of cohabitation, both she and the husband were working, albeit that her income was greater than that of the husband. The husband deposed, for the first time in his affidavit material and on 8 March 2012, that he was earning approximately $100,000 per annum. He had not claimed this in prior affidavits. He was cross-examined as to this claim, and I do not accept the evidence of the husband. He had almost nothing in the way of assets at the time and lived a fairly frugal life. He had no taxation returns to support such an assertion and I prefer the evidence of the wife as to this matter. Not that a great deal turns on this.
I find the parties’ contribution at the commencement of their cohabitation to be approximately equal, in that they had little by way of assets, and on balance, not dissimilar income. In 1985, the wife moved to Sydney and the husband followed. The wife had received a transfer in her job to Sydney. Initially, the husband had no employment in Sydney and the wife was financially supporting him. He then gained employment in the (omitted) industry and was earning an income similar to that which he earned in Melbourne. During this period of time the wife was earning significantly more income than her husband. Again, however, not a great deal turns upon this when determining the final apportionment of property as between the parties.
The parties remained residing in Sydney for a period of time, before deciding that they would move to the (omitted) and operate a business together. In approximately October 1988 and on the husband’s evidence, the parties commenced negotiations for the purchase of a (omitted) business in the (omitted), taking possession of such business on 29 December 1988. The husband claims that the purchase of such business was financed with approximately $43,000 of his money, with the balance borrowed from the ANZ Bank. There is insufficient evidence before me to establish the manner of the financing of the purchase of the business. Whilst the parties operated the business, it was a successful business. But unfortunately, in 1988, there was a pilots’ dispute which resulted in tourists ceasing to travel to the (omitted). Ultimately, there became insufficient customer numbers to sustain the business, and it ceased trading at Christmas time in 1989. As a direct result of the collapse of the parties’ business, the parties each entered into voluntary bankruptcy in 1990.
The parties thereafter relocated to (omitted), with the wife obtaining employment immediately but the husband being unable to find satisfactory employment in (omitted). The parties were residing in a caravan, and they remained in (omitted) for a little over a year, during which time the husband remained mostly or entirely unemployed.
The parties then took up residence in Brisbane in about 1991 where, again, the wife obtained immediate employment. The husband also became gainfully employed shortly thereafter and in the (omitted) industry. The wife then joined the husband in the (omitted) industry and both were contractors to (omitted). The parties remained so employed until the husband lost his employment in approximately 1993. The wife continued on in such employment for another 12 months, and the husband obtained employment, for a short period of this time, on the (omitted). The wife continued working in Brisbane, bringing in substantial income toward the support of the parties.
Whilst the husband was living on the (omitted), he obtained another job through another (omitted). The parties became friends with this (omitted) for whom he worked and his wife, eventually going into business with that couple in approximately 1994. That business traded as (omitted).
(omitted) was, according to the parties, a very successful business. But after about three years, it appeared to the parties that something was seriously wrong with the finances of the business. The parties both allege they discovered that their business partners had been misappropriating funds from the business, which resulted in its eventual collapse. Again the parties became bankrupts this time on a creditor’s petition of a major supplier, with such bankruptcy occurring in 1996.
The parties then separated for a time, and the wife returned to reside in Melbourne. She commenced working with (omitted) for a period of four to six months, but her employment was terminated and she received a cash payment of $20,000. This sum, she paid into a superannuation account in her name. The husband however asserts that the wife’s redundancy payout from (omitted) was approximately $33,000. He claims that, from those funds she purchased a lounge suite for $3,600, a washing machine for approximately $700 and had a coffee table and bookcase custom made for approximately $2,400. She then applied the balance of the funds into a superannuation account in her name. On either party’s account the wife received funds whilst separated that she then applied either to joint expenses or sole expenses which benefited both parties and to a superannuation account in her name. I find the sum of approximately $20,000 was deposited by the wife at this time into an account in her sole name and that it has increased to be in the sum of $45,000 approximately now.
The wife then obtained other employment in Melbourne, and the parties became reconciled, with the husband moving to Melbourne to resume cohabitation with the wife. Upon relocating, the husband was unemployed for a short time and then obtained employment.
The husband, all these years later (some 16), remains unhappy with the wife’s behaviour during this earlier period of separation. He said, in paragraph 44 of his affidavit sworn 8 March 2012:
“Ms Painter-Ward left me with responsibility for all of our bills, including the rent and the hire purchase on our Volvo 740 estate motor vehicle, which was $454 per month.”
The husband was however, paying the rent on the accommodation in which he was residing and the hire purchase on the motor vehicle of which he had possession and use. This complaint typified the husband’s attitude to the wife on each separation which was that she should pay the totality or bulk of the parties’ expenses, and that somehow this inequitable situation was warranted by her behaviour as he saw it. Contrary to his view, I find her approach to him to always have been nothing but fair with a spirit of kindness about it.
Returning to the parties’ history of cohabitation. During part of this time in Melbourne and in 1999, the wife collapsed and became very sick with anxiety. She resigned from her then employment and remained not working for a period of some four to six months before in about May 2000, commencing to work with the husband for (omitted), where the parties worked together for approximately two years. They relocated to (omitted) to be close to where the display centre of (omitted) was in (omitted).
After about one year with (omitted), the parties had earned and saved a sufficient deposit to arrange to purchase the property they were leasing at Property S in the State of Victoria (‘the Property S property’) for the sum of $245,000. They were able to secure the purchase of the property with a mortgage with the National Australia Bank. In the following year, they purchased an investment property at Property A in the State of Victoria with such property being purchased in the wife’s sole name. It is that property in which the wife now resides. During this period of time, the rental income received from the investment property at Property A was paid into the husband’s Bendigo Bank account BSB (omitted) account number (omitted). These rental payments were then transferred to the line of credit account (omitted), secured by the investment property by the husband from the Bendigo Bank account (omitted). Any shortfall between the rental amount received and the interest payment due was made up from the husband’s Bendigo Bank account (omitted) from joint funds of the parties.
Late in 2002, the parties were terminated by (omitted). The wife obtained a new (omitted) position with (omitted), who were commencing business in Melbourne from an office in Hawthorn. The husband had already obtained employment selling investment property, in relation to which he claims he was paid only $3,750 of the $120,000 he had earned, and that the balance has never been able to be recovered by him. I can make no finding as to that assertion of the husband’s. Fortunately, the wife was able to obtain employment for the husband at (omitted), where the parties again worked together, and earned good incomes which adequately supported them.
During her employment with (omitted), the wife approached the general manager to see if she could obtain a transfer within the company to Queensland, as her parents who resided in Queensland were both elderly, and her father was very ill. Such transfer was approved, and in 2002 the wife returned to Queensland to reside in Brisbane, and to commence working for (omitted), which was part of the same group of (omitted) companies as (omitted).
The husband remained in Melbourne for a time, in the parties’ home, and the wife took up rental accommodation in Brisbane. The husband prepared the Property S property for sale, which occurred in October 2004, for a sale price of $350,000.
The wife commenced work at (omitted) on or about 23 August 2004, and her income was applied toward payment of her rent, and other expenses. The husband claims he supported her in part at this time. That is denied by the wife but again nothing turns on it. The husband subsequently travelled to Brisbane, and the parties purchased the property situated at Property P for the purchase price of $320,000. They jointly signed a contract on 19 November 2004, and took possession of the property on 3 December 2004. The Property S property had been sold, and the security for the line of credit was transferred to Property P in Brisbane.
The husband arrived in Brisbane on 16 December 2004 and the parties were married on (omitted) 2004 in a civil ceremony on the (omitted) in Queensland.
The wife continued to work for (omitted), but was aware that the company was not doing well. She transferred her employment to a smaller (omitted) company, working for this company on the (omitted). Subsequently, the husband joined the company, known as (omitted). The husband had, on 9 January 2005, taken up a position with (omitted) at (omitted), but resigned from such position in late February 2005, working there for only a number of weeks. He obtained his position with (omitted) on 11 March 2005. The wife later commenced working for (omitted) as a (omitted) on or about 4 May 2005.
On 26 May 2005, the wife left the former matrimonial home, and the parties’ separation commenced after a cohabitation period of approximately 21 years. It continues to this day. The husband remained living in the former matrimonial home at Property P where he continues to so reside. The wife commenced to live with her brother in Brisbane. She was then transferred to the (omitted) to work for the (omitted) franchisee for (omitted), the (omitted), and she commenced to rent a property in (omitted). She remained at such residence for approximately 12 months. The wife then wished to return to Melbourne to be with friends and family, and after approaching and obtaining a position with (omitted) again, she returned to Melbourne, terminated the tenancy on the parties’ home in (omitted) and commenced to live at Property A where she resides to this day.
At the end of the above generally described period of cohabitation the parties’ contributions remained approximately equal. They worked, supported each other and engaged in a joint endeavour to improve their financial position.
Post-separation
When the parties separated in 2005 their assets were as follows:
a)the Property P property, with a value of approximately $340,000 (equity $151,728.06);
b)the Property A property, with a value of approximately $390,000 (equity $147,480.38);
c)the Range Rover, with a value of approximately $29,000. The husband claimed there was a debt on the Range Rover at the end of the relationship of some $11,000, but provided no supporting documentation to establish this claim. I find no monies were owing in respect of the vehicle which he retained;
d)the Volvo, with a value of approximately $41,000 but subject to finance leaving it with no or negative equity. The wife retained this vehicle;
e)the timeshares, with a value of approximately $17,600;
f)the husband’s Telstra shares, with an unknown value;
g)the husband’s boat and trailer (which no longer exists with the husband claiming his son now owns the boat housed on his property but in relation to which the wife takes a pragmatic approach and makes no issue of same);
h)an amount of cash, unknown; and
i)the wife’s superannuation of approximately $20,000.
At the end of the relationship the husband and wife had the following liabilities:
a)line of credit over the Property P property $188,271.94;
b)line of credit over the Property A property $242,519.62;
c)Volvo lease outstanding $41,669.23; and
d)credit card debt of $26,650.
The husband alleges the wife now owes him the following amounts (together with interest) in the circumstances described:
a)the husband says, in paragraph 97 of his affidavit sworn 8 March 2012 that:
“When my wife deserted the matrimonial home, she took with her my Volvo motor vehicle, for which I was committed to pay $930.05 per month, which was directly debited to my Bendigo Bank Account (omitted).”
The husband continued to pay the commercial hire purchase on this motor vehicle up until 21 May 2007. Thereafter, the wife took on the payments directly, and in October 2007, she traded the Volvo motor vehicle on a new Volvo motor vehicle. The husband claims a debt due of $930.05 each month from 21 June 2005 until 21 May 2007, being a period of almost two years and a sum of approximately $22,000.
b)at separation the parties had the (omitted) Resorts/(omitted) timeshares, which had been jointly purchased during the period of cohabitation. The payment for the timeshares continued to be automatically debited to the husband’s Visa credit card, up to and including 22 March 2009. Thereafter, the wife has solely met this liability. The husband argued the payments automatically debited to his credit card were a debt owed by the wife to him for which she remains, to this day, liable. He claimed without any corroborative proof, a sum paid by him of $13,891.33. I do not accept his evidence. In fact, the timeshare ownership remains joint, and the wife seeks as an order in these proceedings that she receive the ownership of such timeshare credits, with an agreed value of $20,000. In April 2009, and many years after separation, the wife purchased further credits on the time share. She paid $3,400 in relation to this purchase. This increased the amount paid by her toward the timeshare since 31 March 2009 to a total of $8,140. The husband made no contribution to this additional acquisition but it is represented in the current value of the timeshares. She has also, since separation, availed herself of the benefits of the timeshares, although the husband has not. The husband has been able to access the parties’ joint timeshare credits, but has chosen not to do so. He has not been precluded from enjoying this benefit. Yet he complains;
c)the husband also claims that from separation, and for a period of time, the wife left him with responsibility for both her medical insurance payments which were automatically debited to his Visa credit card and amounted in total to $942.53, and for her Optus mobile telephone account monthly payments, which were automatically debited to his Visa credit card, and amounted to $695.04;
d)the husband claims during the period from 26 May 2005 until 22 January 2006 the wife continued to access his Visa credit card accounts using her access card. His evidence is that the wife ran up a total of $16,560.02 in debits to his Visa credit card, (omitted):
“…from the time of her desertion until 22 January 2006, when her access card expired” (paragraph 116);
e)the husband claims during the period up until 27 May 2006, the wife continued to access his Bendigo Bank account number (omitted). He noted that her commission payments from (omitted) was paid into that account until 17 November 2005, and alleges the total sum of payments made on her behalf was $11,193.80 being a shortfall on monies accessed by her in the sum of $12,933 approximately. The payments actually made by the wife is a matter I shall return to;
f)the husband claims the wife withdrew $1,968.62 from his National Australia Bank account prior to 27 May 2006 which is owed to him; and
g)during the currency of these proceedings the husband took the extraordinarily vexatious step of instituting proceedings against the wife in the Magistrates Court of Queensland at (omitted) demanding a payment to him by the wife of the sum of $108,954.15 comprising repayment of the alleged debt as described in the preceding sub-paragraphs together with interest and costs. The wife was required to defend the proceedings and compel the husband to withdraw them.
At the time of the parties’ separation, the debt owing on the husband’s Visa credit card account number (omitted), on his own evidence (paragraph 111 of his affidavit of 8 March 2012) was $26,650. The wife thereafter placed approximately $3,600 of purchases onto that card, but made repayments of $2,500 toward the credit card. In addition, the wife applied her income to meet the parties’ joint expenses until about July 2007 by deposits into the husband’s Bendigo Bank accounts. The husband conceded under cross-examination that in December 2005, being some seven months after the parties’ separation, his credit card debt was reduced to nil. The credit card was paid out from the partial application of a receipt of a cheque by the husband of $44,100 being for income earned during the relationship. Further and on or about 8 December 2005, the husband made a payment to his American Express card in the sum of $12,700.56, these monies also coming from the earlier receipt of $44,100. The wife was unaware until the currency of the proceeding that the husband had an American Express card, and was not aware of what expenses the husband incurred in relation to it, save that they appear to have been incurred by him during the marriage. She was not in a position to seek further discovery in relation to this and took a pragmatic approach such that she did not challenge the expenditure which was during the marriage, albeit unknown to her, and was repaid with ultimately income from the marriage.
The husband retained the debt-free Range Rover and the wife retained the Volvo with debt. She continued to make repayments toward that vehicle’s lease by placing funds from her income into the Bendigo Bank account of the husband from which the repayments were sourced. Significantly the husband made no payment to her for her interest in the Range Rover motor vehicle. He simply claimed it as his own.
The husband claims, with respect to the Bendigo Bank account, in paragraph 124 of his affidavit of 8 March 2012 that:
“…apart from the token total of $7000 paid between the 15th February 2006 and 18th April 2007 my wife made no effort to repay the debts she had amassed in my name following her desertion of the matrimonial home.”
In respect of the Bendigo Bank accounts and the husband’s National Australia Bank account, the wife did remove money from the accounts to pay various of her expenses, but she did not remove more than that which she received through her wages and which were deposited into the Bendigo Bank accounts.
Following separation (and until 8 July 2007) the wife deposited payments of her income into the husband’s Bendigo Bank accounts totalling some $38,903 approximately. Such monies were to be applied by the husband toward joint matrimonial debt and expenditure. The wife never sought the return of such funds nor an accounting as to the application of such funds from the husband. Over and above this, the husband retained the benefit of an unencumbered car and applied the sum of $44,100 of marital funds as he saw fit in December 2005. It was the husband who owed the wife monies.
The husband complained about the late filing of the wife’s affidavit sworn 13 March 2012. That affidavit was a response to the affidavit of the husband sworn 8 March 2012, the husband’s affidavit replying to the earlier affidavit of the wife filed on 25 March 2011 – almost one year earlier. The husband had ample time to address the matters raised by the wife in the proceedings and in particular address the question of the wife’s deposits into his Bendigo Bank accounts he having sole control and access to those accounts and their history during the proceedings. I note he provided discovery with respect thereto very late in the proceedings. The wife raised in her affidavit sworn 18 July 2011 and that sworn 13 September 2011 her claim to have deposited funds into the husband’s Bendigo Bank account following separation for payment of her car loan and other expenses. The husband was on notice and not denied procedural fairness.
The husband made various assertions in his material and in the giving of his evidence at trial as to the wife’s income. The wife has made available to the husband and to the Court her taxation returns for each and every year since separation. She has also made available to the husband prior to the commencement of the final hearing her statements of commission. She has also made available the entirety of her banking documents. Her income is as stated in each of her respective taxation returns. In particular, her income for the financial year ended:
a)30 June 2006 was $24,539;
b)30 June 2007 was $53,395;
c)30 June 2008 was $77,317;
d)30 June 2009 was $204,902; and
e)30 June 2010 was $301,875.
On 1 July 2010, the wife became an employee. Her income receipt is as set out in her financial statement being in the sum of $1,200 approximately per week net. Her current taxation liabilities relate to the period from 2007 until becoming an employee on 1 July 2010. Upon completing and lodging her taxation returns up to the financial year ended 30 June 2010, the wife thereafter had a significant taxation debt. She, like the husband, had not paid tax for some time. The wife dealt with that in the following manner.
In October 2010, the wife had purchased two blocks of land in (omitted) being situate at Property 1 & 2. She did so with the addition of applying monies withdrawn by her in the sum of $3,314 from the Property P line of credit of which she did not advise the husband. Her evidence was that as she was repaying both lines of credit and had done so for some considerable time, she was entitled to draw back down her own funds. Subsequently, the wife sold such properties to pay part of the taxation debt that she had incurred. On 8 December 2010, she sold one of the Property 1 & 2 properties and on 13 December the remaining one, with the equity in the first property being $140,953.74 and the second the sum of $120,446.14. Following receipt of the money from the sale of the properties the wife paid on 4 February 2011 a payment of $109,697.19 to the Australian Taxation Office in partial reduction of her taxation liabilities. As the blocks of land were investment properties the wife has incurred a capital gains tax debt on the sale of the properties which adds to her remaining and current debt to the Australian Taxation Office, which is presently in the total sum of approximately $145,000. The wife is paying instalment payments pursuant to a scheme of arrangement of $1,000 approximately a month.
By contrast the husband has failed to file a taxation return since separation, indeed since well before separation. I propose to order that within 90 days of judgment being delivered he lodge with the Australian Taxation Office taxation returns for each and every year that he has failed to do so. His banking records disclose an income received by him in each and every of those years in relation to which it could be anticipated a taxation assessment will flow. The husband may well have a taxation liability in a sum yet to be determined. I do not accept his evidence that he will not at all, or that if he does it will be minimal. The husband has failed to disclose his income to the Australian Taxation Office and has failed to pay taxation on such income. He has disclosed to the wife in these proceedings income receipts of approximately $50,000 per annum for the last three financial years in addition to the receipt of his aged pension which he commenced to receive in December 2009. He did not disclose other income receipts knowledge of which was obtained by the wife through the use of subpoena in particular to (omitted). The husband continues to operate the business known as ‘(omitted)’ which was deregistered on 15 March 2010. He has sent out invoices claiming a fee for the GST without making such payments to the Australian Taxation Office. He had, at trial, cheques for work performed waiting to be banked. The husband has two accounts with the Bendigo Bank, being account number (omitted) and account number (omitted). In addition, he has a National Australia Bank account with reference 5429. Some $75,901 of monies received by him have not been placed in any of these accounts. The husband has sufficient income to support himself in a relatively comfortable lifestyle.
In 2010, the wife became very concerned about her financial situation and financial ties with the husband. She requested of the husband that he release her from the title of the Property P property and allow her to take sole responsibility for the line of credit over the Property A property and for the husband to take sole responsibility for the line of credit over the Property P property. The husband refused. In responding to the wife’s request the husband advised her that “treachery has a price.” The line of credit repayments paid by the wife were a total of $2,820.82 each month. The wife’s evidence was that she was finding it very difficult both financially and emotionally to continue making such repayments herself. The wife was then forced to issue proceedings in September 2011 to compel the husband to make payments in respect of the property in which he resided.
Following separation, the parties had agreed the husband would retain the Property P property and the wife would retain the Property A property. The parties received rental income on the Property A property for a time following their separation, and until the wife returned to Melbourne. The husband advised the wife that he was transferring the money received from the Property A rent into the line of credit of the Property A property to reduce the line of credit. The rental income was paid into the husband’s Bendigo Bank account of which he had control, but he would not always apply the rental receipts to the line of credit for Property A. The husband did not deposit in the line of credit rental income received by him in the sum of $6,175 approximately. He retained same. Further, in these proceedings the husband has claimed the rental payments a sole contribution of his instead of joint funds.
Between separation and 20 June 2007, the wife believed that the husband and she were making equal payments to the line of credit on both properties. This, in fact, was not occurring. From 20 June 2007 the wife commenced to make sole contributions toward the line of credit for both properties without assistance from the husband, save for a total amount, since 15 January 2008 to 5 January 2010, of $4,289.94. There has been an increase in the combined value of the line of credit from the Property P and Property A properties since separation of approximately $52,000. That sum would have been far greater had the wife not made the financial contributions that she has, in particular since 2007. The husband has failed to make regular contributions toward the line of credits from separation and has transferred money from one line of credit to the other line of credit, therefore not changing the parties’ debt position. It is only very occasionally that the husband has made any repayment toward the line of credit of the properties. In September 2011, the wife obtained an order that the husband pay the monthly debt associated with the home in which he resided.
The wife’s income has not covered her expenses and she has obtained credit on credit cards and not paid her tax on a regular basis. As a result she owes a large amount of money on credit cards and also to the Australian Taxation Office. The husband’s behaviour has contributed to her financial plight. On 21 February 2011, the wife transferred the sum of $1,500 into the line of credit. Three days later the husband withdrew the available balance on their line of credit of $1,905, putting in the reference, “Reparation.” On 3 March 2011, the wife sent the husband an email requesting that he return such funds to her. The husband refused. The husband claimed in one email response that, “It was my money,” and in the other, “What is good for the goose is also good for the gander.”
The wife was required to place a freeze over the line of credit over the Property A property to enable mortgage repayments to be continually made, but to not allow either the husband or herself to withdraw money from the account. On reviewing the statements of the Property P property the wife found that the husband had withdrawn $84 from the Property P line of credit on 24 February 2011. He also placed the word “reparation” as his comments for this transfer. The wife was then required to organise for a freeze to be placed over the line of credit of the Property P property to stop the husband withdrawing any further funds from that line of credit. In all, the wife contributed to the line of credit over both properties the sum of $145,232.40 and the husband the sum of $30,074.30. A sum of over $115,000 in favour of the wife.
Since occupying the Property A property the wife has spent monies in the maintenance of, and improvements to the property. It had not been well cared for by the tenants and the wife has spent considerable funds making improvements to the property, including building a deck, bifold doors, six person spa, placed down new flooring, inserted a new front door and other doors, cleared the garden and re-landscaped the property, which she claims has led to an increase in the value of the property. I cannot make a finding in any quantified sum but note that she has at the least maintained and improved the property.
The husband said at paragraph 202 of his affidavit of evidence-in-chief:
“My wife’s spending can best be described as extravagant, with large amounts of money being spent for her personal satisfaction while ignoring and refusing to pay her personal debts to myself.”
The husband has spent considerable time and effort in trawling through the expenses of the wife (post-separation) by the application of her own funds. He has required discovery of extensive documentation and prepared spreadsheets, which show that she has expended funds which he considers excessive on furniture and housewares, travel and travel-related expenses, fashion, clothing and jewellery, vanity-related expenses, restaurant, dining and entertainment expenses, late-fee expenses and other sundry expenditures. The husband claims the wife’s lack of fiscal responsibility played a major part in the disintegration of the parties’ relationship and that the property settlement action was commenced by the wife in an effort to avoid repaying her debts to him. The husband’s evidence is that the wife’s refusal to repay her personal debts to him has caused him considerable hardship, citing, as examples, that he has been unable to afford dental treatment when needed, medical treatment outside the public health system, hearing aids for his failing hearing and proper meals for himself in circumstances where he has been compelled to trim the excess meat from bones bought for the parties’ dogs and to create meals for himself from that meat.
All of the husband’s current financial ailments he sheets home to the wife. Indeed, these entire proceedings, he says, could have been avoided had the wife agreed to repay the debts that she owed the husband when first requested. The husband blames the wife for the judgment debts he now has, as claimed by him, in the sum of $11,368.96 and interest together with a further debt of $58,868.01.
The orders sought by the husband are not just and equitable; they are oppressive and cannot be made. Although the husband does not seek this in his orders sought, in paragraph 274 of his affidavit affirmed 8 March 2012, the husband says:
“That my wife be ordered to pay a monthly support sum of $1500 to enable me to retain my home and maintain a basic standard of living in my old age.”
The husband has shown no perspective in these proceedings. He has been harassing and obsessive and in so doing has been oppressive to the wife. The husband is not a witness of credit. At times, in particular in the examination of his own income and financial contribution since separation, he was an utter liar. By comparison the wife was a credible witness and in her demeanour entirely exhausted by the husband’s onslaught.
The husband has no capacity, on his own evidence, to retain the Property P property and meet its liabilities. The wife will not be released by the mortgagee and cannot be held in such a financial relationship with the husband. He has already caused her considerable financial loss.
The wife’s superannuation has been accumulated in two periods of separation. The husband’s contribution to same has been nil. Nevertheless the wife’s interest in her superannuation fund is a matter which I do consider as part of the property pool and pursuant to s.75(2) of the Family Law Act 1975 (Cth) as it is referred to in s.79(4) of that Act. The wife is receiving the benefit of the timeshares in relation to which she has substantially contributed and significantly over and above the husband and I consider the husband’s interest extinguished by virtue of his retention of his motor vehicle and Telstra shareholding. The parties shall share equally in the net proceeds of sale of the Property P property save for any adjustment as required by virtue of the husband’s non-compliance with earlier orders of the Court and in the event there is any non-compliance with these orders.
The evidence establishes that since separation the wife’s contribution to the retention and maintenance of the parties’ assets considerably exceeds that of the husband. Orders which are just and equitable must acknowledge this preservation of the asset pool by the wife. The equity in the Property A property is $228,580 approximately, less selling expenses. It is to be auctioned and will achieve the current market value. In the exercise of my discretion I consider an apportionment to the wife of 80% of the net proceeds is just and equitable in the circumstances of this case. This, together with retention of her superannuation entitlements will produce orders which are just and equitable in all the circumstances of this case.
Finally, each of the parties has amassed considerable personal debt following their separation which is attributable solely to each of them save that as I have said, some of the wife’s debt is indirectly caused by the husband. Repayment of their respective debt will probably result in each of them having little or no assets and at their respective ages in life, starting over again.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Hartnett FM
Date: 30 March 2012
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