Peters & Walker
[2015] FamCA 732
•21 May 2015
FAMILY COURT OF AUSTRALIA
| PETERS & WALKER | [2015] FamCA 732 |
| FAMILY LAW – PROPERTY SETTLEMENT – DE FACTO RELATIONSHIP – where parties agree there was a de facto relationship for the purpose of Part VIIIAB of the Family Law Act 1975 (Cth) (‘the Act’) – where the parties sought a property settlement pursuant to s 90SM of the Act – where the de facto wife made significant initial financial contributions – where the parties bought and sold four properties during a 25 year relationship – an allegation by the de facto wife as to non-payment of tax by the de facto husband – allegation by de facto wife of waste by the de facto husband – where the de facto wife sought adjustment in relation to monies allegedly spent by the de facto husband himself pursuant to s 90SF of the Act – orders made that property pool be distributed in the proportion of 60 per cent in favour of the applicant de facto wife and 40 per cent in favour of the respondent de facto husband. |
Family Law Act 1975 (Cth)
Bevan v Bevan (2013) FLC 93-545
Chapman v Chapman (2014) FamCAFC 91
| APPLICANT: | Ms Peters |
| RESPONDENT: | Mr Walker |
| INTERVENOR: |
| INDEPENDENT CHILDREN’S LAWYER: |
| FILE NUMBER: | HBC | 421 | of | 2014 |
| DATE DELIVERED: | 21 May 2015 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 21 May 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Trezise |
| SOLICITOR FOR THE APPLICANT: | M+K Dobson Mitchell & Allport |
| COUNSEL FOR THE RESPONDENT: | Ms Foale |
| SOLICITOR FOR THE RESPONDENT: | Simmons Wolfhagen |
Orders
Within sixty (60) days of the date of this order Mr Walker (‘the respondent’) sign all documents and authorities to transfer his right, title and interest in the property at B Street, Suburb C (‘the B property’) to Ms Peters (‘the applicant’) subject to:-
(a)the applicant discharging (at her own expense) the mortgage over the B property to the Australia and New Zealand Banking Group Limited or securing from that Bank a release for the respondent of his personal covenants in respect of the mortgage and loan;
(b)payment by the applicant to the respondent of the sum of $39,323.
Within sixty (60) days of the date of this order in the event that the applicant is unable to secure finance to enable the transfer of the B property in order 1 herein the parties shall do all acts and things and sign all documents necessary to effect a sale of the B property subject to:-
a.the method of sale, whether by auction or private treaty, shall be as agreed between the parties; in the absence of agreement within thirty (30) days or if any agreement for method of sale breaks down, then by auction at the request of either party.
b.the parties shall instruct a legal practitioner (agreed by them) to act on the sale of the B property; failing agreement a licenced legal practitioner shall be nominated by the President of the Law Society of Tasmania, at the request of either party.
c.the B property shall be listed for sale with a licenced real estate agent and auctioneer, agreed between the parties; failing agreement the licenced real estate agent and auctioneer will be the person nominated by the President of the Real Estate Institute of Tasmania at the request of either party.
d.the listing price, reserve price for auction and sale selling price of the B property shall each be as agreed by the parties; failing such agreements, such price, reserve or sale price shall be as determined by a valuer nominated by the President of the Tasmanian Division of the Australian Property Institute at the request of either party.
e.from the date of this Order until the completion of the settlement of the sale of B property, the applicant shall pay all outgoings on the property; including but not necessarily limited to the payment of council rates, water rates, mortgage payments and interest on the mortgage.
f.at settlement of the sale of B property the proceeds of sale shall be applied as follows:-
i.payment of legal costs and disbursements of the legal practitioner acting for the parties on the sale;
ii.payment of the real estate agent’s commissions, fees and reasonable advertising and auction expenses;
iii.any fees or charges paid or payable to the Law Society, the Real Estate Institute and/or the Australian Property Institute in implementing the orders for the sale;
iv.in re-payment of any mortgage secured over the B property;
v.in payment of the net balance of the proceeds of sale be divided between the parties so as to result in a division of the net assets 60 per cent to the Applicant and 40 per cent to the Respondent, as per the schedule of assets set out in the reasons upon which these orders are based (attached).
The applicant shall pay all amounts of principal and interest on the Australia and New Zealand Banking Group mortgage and loan over the B property together with all rates, taxes insurance and the like on that property as and from the date of this order.
The parties shall sign all documents and papers to cause the distribution of the net proceeds of sale of the parties’ property at D Town (totalling about $87,980) to the respondent.
Each of the parties, respectively, shall be liable for and shall pay any capital gains tax on one half of the net taxable capital gain in respect of the sale of the D Town property.
The parties shall do all acts and sign all documents to close the Australia and New Zealand Banking Group Limited joint account (final four numbers of such account being 3553) with a balance of approximately $1,067 with such amount to be divided equally between the parties.
The parties or their nominated agents shall do all acts and sign all documents to cause the ‘shed contents’ (including; timber, frames, firescreens and pictures), now or formally at the shed, to be divided equally as between the applicant and the respondent. If the parties or their nominated agents are unable or unwilling to agree on the division of the items in the shed then the respondent shall make a list of all of the items now or formerly in the shed and each shall pick alternate items with the applicant to have the first pick.
As and between the respondent and the applicant, the respondent shall be declared the owner of the property set out in this order and the applicant shall within thirty (30) days from the date of this order reasonably make available for collection by the respondent or his nominated agent the following property:-
(a)a large photo on canvas of the respondent’s granddaughter;
(b)the stainless steel Weber Barbeque;
(c)the large polished pearl shell that was sitting on gas heater; and
(d)the print in a gold coloured frame;
As and between the respondent and applicant, the respondent shall be declared the owner of the following property which, if still in existence, shall be made available to the respondent or his nominated agent as soon as it practicable:-
(a)the monocular and tripod;
(b)the Russian flag;
(c)the Visitor’s Book; and
(d)the respondent’s watch;
(e)the timber strip for the bench seat from under the house; and
(f)the Stereo set that was removed from D Town.
Within thirty (30) days from the date hereof the applicant shall make reasonable arrangements for the respondent or his nominated agent to collect the leadlight mirror on the lounge room wall in the B property and the respondent will make good any damage to the wall including filling any hole, and appropriate painting of that wall.
Subject to these Orders; as between the respondent and the applicant it is declared that the following property is the applicant’s property:-
a.the furniture and contents in the B property;
b.the Japanese motor vehicle;
c.the applicant’s Peters Superannuation entitlement;
d.the applicant’s savings and investments held in any bank accounts in her name, and
e.the applicant’s chattels and personal effects in her possession and/or control.
Subject to these Orders; as between the respondent and the applicant it is declared that the following is the respondent’s property:-
a.the Van, 4WD and Korean motor vehicles;
b.the Boat;
c.the kayak and surfboards; and
d.the respondent’s interest in any of the bank accounts in his name.
Unless otherwise specified in this order and as against each other:-
(a)each party will be solely liable for and indemnify the other party against any liability affecting and/or encumbering any property to which that party is entitled pursuant to that order;
(b)each party will remain solely liable for their respective debts;
Each party shall sign all such documents and do all things necessary to give effect to the implementation of these orders.
All other extant applications for orders, except costs applications, be otherwise dismissed and removed from the list of cases awaiting finalisation. Any costs application may be dealt with in accordance with the Family Law Rules 2004 (Cth).
All subpoenaed documents shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Peters & Walker has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: HBC 421 of 2014
| Ms Peters |
Applicant
And
| Mr Walker |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Ms Peters, (‘the de facto wife’) and Mr Walker (‘the de facto husband’)[1] both concede that they have been in a de facto relationship, within the meaning of Part VIIIAB of the Family Law Act 1975 (Cth) (‘the Act’), which has subsisted from January 1989 until January or February 2014 (a period of 25 years).
[1] For the ease in writing these reasons and to assist in the anonymisation of them I will refer to the parties as de facto husband and de facto wife as each, from time to time, refer to each other during the course of the proceedings.
There was a minor issue as to whether the relationship ended in late January or February 2014, and there was nothing of significance in relation to the separation date in terms of the property adjustment between the parties.
There are a number of questions for the Court to determine: the first is whether there ought to be a property adjustment pursuant to s 90SM(3) of the Act and, if so, the second is what order ought to be made having regard to the principles of justice and of equity.
The de facto husband and de facto wife both assert that there ought to be an adjustment of property. That question has to be determined by the Court. Given the evidence, the findings of fact, agreed fact and including in aggrieved circumstances of the irretrievable breakdown of the parties’ relationship, and the differential contributions made by them at different times during the relationship, I am satisfied that a property order ought to be made.
Later in these reasons I will set out the legal and equitable interest of the parties which are, to a large part, by way of agreement.
THE ISSUES
The issues to be determined are:-
(a)the precise legal and equitable interest in the parties’ property;
(b)what was the de facto wife’s initial contribution, whether it was about $41,000 or $80,000 plus a car and some furniture;
(c)how to deal with the parties’ acquisition, renovation and sale of properties, Suburb E, Suburb F and D Town and the renovation of the property at Suburb C;
(d)the questions raised by the de facto wife that the de facto husband had failed to disclose significant cash payments through his plumbing business and the G Market business, to which moneys were then spent on the de facto husband’s various collection and hobbies;
(e)an overall assessment of the respective contributions of the parties;
(f)the differential earning capacity asserted by at least the de facto husband; and
(g)the de facto wife’s assertion that the husband remains in receipt of significant amounts of cash in the business as a tradesman and the G Market.
BACKGROUND
The de facto husband is 64 years of age, and he resides on H Town with a new partner. His evidence is that the partner is dependent upon him.
The de facto husband continues to work as a tradesman and earns a modest income in that community. He asserts that his health is poor, although no expert evidence was adduced to that end.
I have had regard to his age and the nature of work as a tradesman. Given that his present partner did not file any material I have given no weight to any obligation that the de facto husband may have to support her.
The de facto wife is aged 55. She is qualified both as a hairdresser and a nail technician. There is some evidence that she has training in interior decoration and has experience in property renovation.
The de facto wife continues to run her small business and has an income of about $20,000 a year. In addition, she receives some Centrelink payments. The de facto wife also assists in the care of her elderly father in Sydney and travels regularly to visit him, although not to the extent set out in her affidavit. Those circumstances have apparently changed. The de facto wife has not re-partnered.
The de facto wife has a modest superannuation entitlement.
When these proceedings were commenced in June 2014 each of the parties was represented by counsel.
In these reasons any statement of fact is to be regarded as a finding of fact unless the contrary is indicated from the context of the statement.
THE EVIDENCE
The de facto wife
The de facto wife gave evidence in accordance with her affidavit filed 30 March 2015 which was read into evidence subject to some minor objections. She also provided evidence in accordance with her financial statement of 11 June 2014 and relied upon her initiating application filed the same day. Her financial circumstances, she said, had not substantially changed in that period since the filing of her statement of financial circumstances.
The evidence of the de facto wife was supported by a quantity of documents. There was some evidence of the de facto wife exaggerating, such as with regard to the $12,000 cash payment received on the sale of the boat, where her evidence was different to that contained in some objective documentary material. The evidence of the de facto wife was, from time to time, inaccurate, not though to any intent on her part to be untruthful but more through her subjective view of the case and her views as to her contribution. Counsel for the de facto wife said that the de facto wife’s evidence was unimpeached.
I would not go quite that far. As I have said earlier, like any evidence it was coloured with her case, and there are some errors which arise over a relationship of that period of time. The de facto wife produced a DVD taken by the de facto husband as to his surfing activities in 2004. The wife endeavoured to rely on this to demonstrate that the de facto husband did not work hard, and his financial circumstances would not have been good but for her involvement. I am not satisfied that the DVD added much to these proceedings. It was a story and a self-serving story created by the husband some years ago.
I accept that the de facto wife endeavoured to give evidence as truthfully as she possibly could do so.
Mr I
Mr I gave evidence contained in his affidavit filed 8 April 2015. The de facto husband operated a business at G Markets, and the de facto wife provided evidence from Mr I, who was 15 years old when he started his two year work at the markets. Mr I’s evidence was designed to assert or prove that the de facto husband receives significant cash payments from the business. I do not believe it achieved those heights. Mr I was not cross-examined, and his evidence was that merchandise was sold.
He was not involved in the selling of the merchandise, and it is clear that documentation in relation to business was undertaken by the de facto husband. Mr I said that he did not see receipts for cash payments, although this needs to be seen in context with the period of time when this occurred and the explanations offered by the de facto husband.
The de facto husband
The de facto husband gave evidence in accordance with his financial statement filed 1 May 2015 and his affidavit filed the same day.
He was challenged in relation to issues of credit.
The de facto husband denied that he had ever engaged in tax evasion. He said that he relied upon his then accountant of some 20 years who has now retired. The de facto husband swore that the money from the G Market was always banked into the business account, although sometimes not immediately. The de facto husband answered questions put to him in a frank and straightforward way. His answers were pressed from his own subjective point of view.
When asked the direct question as to tax evasion the de facto husband was warned that he need not answer them if they were incriminating answers. The de facto husband, after that warning, gave clear and unambiguous answers.
The de facto husband was challenged in relation to money allegedly paid to the de facto wife by way of bookkeeping expenses which, in the circumstances of this case, is neither here nor there given that I find and accept the parties received income from the de facto husband’s business and generally shared the benefits of that income.
The business operated by the husband will remain his business. If the de facto husband has not been frank with the Australian Taxation Office, and I note that he has been the subject of at least one telephone audit in recent years, the consequence of that will rest entirely with him. It will not, in any way, impact, as I understand it, upon the de facto wife.
Counsel for the de facto wife said that the de facto husband’s evidence was impeached in that he gave greater weight to his work than that of the de facto wife. I have found that the de facto husband undertook significant parts of the hard physical work for the renovation of the parties’ four properties, albeit with help from other people from time to time. Given the amount of renovations, the de facto husband believed his work was harder than that of the de facto wife. Whilst I have found that the parties’ contributions in terms of renovations, in their own ways, was about equal the de facto husband’s views are understandable, albeit they may, from time to time, have been coloured by his own sense of his importance in those areas.
The de facto husband may have minimised the de facto wife’s contribution, but this was not indicative of untruthful evidence but simply human nature. The de facto husband eventually acknowledged that the de facto wife contributed significant moneys, although not the amount asserted by the de facto wife.
There was an argument as to Jones v Dunkel (1959) 101 CLR 298 in that the de facto husband failed to call his now retired accountant to give evidence. I am not satisfied that much could have been added in relation to the retired accountant except perhaps in respect of modest capital gains tax which may or may not be payable on the site at G Market, which costs the de facto husband will, under the effect of these orders and the bookkeeping, be responsible for and in respect of the bookkeeping expenses allegedly paid to the de facto wife.
I do not see this as impeaching the de facto husband’s evidence.
Mr J
Mr J provided evidence in accordance with his affidavit filed 8 May 2015 and also in relation to the timber and other contents at the de facto husband’s shed. He said the value of the items in the shed were some $3,760. Mr J was not cross-examined in relation to his evidence.
Mr K
Mr K is a boat broker who valued the boat of the de facto husband. His evidence was that this boat had a value of about $24,000 to $26,000. That evidence was admitted unchallenged, and the parties eventually agreed that the value of the boat was some $25,000.
THE LAW
The law regarding the treatment of property has been clarified following the High Court decision in Stanford v Stanford.[2] Prior to that decision the preferred approach was the four step process as reflected by the Full Court in cases such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.
[2] [2012] HCA 52, (2012) 293 ALR 70.
Following Stanford v Stanford (supra) the approach is that a Court must firstly be satisfied that before making any order it is “just and equitable”[3] to do so. Then consider what orders, if any, should be made having regard to s 79(4) of the Act.
[3] Section 79(2).
This approach was later adopted in Bevan v Bevan,[4] where Bryant CJ and Thackray J noted that the Stanford and Stanford (supra) decision:-
… serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so. [5]
[4] (2013) FLC 93-545.
[5] Ibid at para 65.
In Chapman v Chapman[6] the Full Court considered the independence of ss 79(2) and 79(4) and confirmed that Bevan v Bevan correctly stated the law in relation to the Courts consideration of s 79(2), whether the making of an order is just and equitable. At paragraph 19 of their joint reasons Strickland and Murphy JJ said:-
Section 79 demands a consideration, separately, of all of its requirements without conflation.
[6] [2014] FamCAFC 91.
However, their Honours disagreed with any intention of plurality in Bevan v Bevan, in that the Court must consider the matters in s 79(4) when addressing s 79(2) of the Act in terms of what order is to be made. To clarify, Bryant CJ said in a separate judgment:-
Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2) …
Accordingly, the approach I will adopt, when determining a division of property, is:-
(a)Identify, in the context of ordinary legal principles, the existing legal and equitable interest of the parties in the property;
(b)Consider whether in the circumstances of the parties it is appropriate and just and equitable for any order to be made having regard to s 79 of the Act; and
(c)To consider and take into account any contributions and other matters, as are relevant, having regard to the provisions of s 79(4) of the Act and make such order as is appropriate. It is the function of the Court to consider those relevant factors in the context of what is appropriate in all of the circumstances, provided always that it is just and equitable to do so.
Clearly in this matter I am adopting this process pursuant to Part VIIIAB of the Act.
What I have done is prepared a schedule setting out the interests of the parties in the properties, and I am giving a copy to each of the parties and their legal practitioners now. [A copy of which is appended to these reasons and marked A].
The parties tendered a document prior to submission in relation to the agreed pool of assets which is Exhibit A9. I accepted that list. The total property to which the parties sought adjustment, having regard to the list that I have prepared, totals some $361,003. In addition there was joint account, furniture and contents of the shed which were dealt with on an item by item basis. I have had regard to that approach in coming to my overall conclusions. Included in the list was the joint access bank account containing some $1,067, which the parties agreed should be closed and divided equally. I will make that order.
The de facto husband sought return of personal property set out in paragraph 110 of his trial affidavit. At the commencement of submission it was agreed between the parties that furniture and furnishings in the former matrimonial home were to be valued at $6,000, and that certain items were to be returned to the de facto husband, those being a large photo on canvas of the de facto husband’s granddaughter, a stainless steel Weber Barbecue, a large polished pearl shell that was sitting on a gas heater, and a print in gold coloured frame.
Subject to the following, I have made that order by consent.
There were a number of items which the de facto husband asserted were at the former matrimonial home which the de facto wife asserted no longer existed. I am going to make orders that if those items of property are in existence they are the property the property of the de facto husband, and the de facto wife is to return them to him, those being:-
(a)the de facto husband’s monocular and tripod;
(b)a Russian flag;
(c)the Visitor’s Boo;
(d)the de facto husband’s watch;
(e)the timber strip for a bench seat from under the house that the de facto husband had been restoring; and
(f)the stereo set that was removed from D Town.
The only item left outstanding was a leadlight mirror in the lounge room of the former matrimonial home. Each of the parties wanted that item and each sought it as against the other. During the course of the hearing no evidence was given as to the provenance or importance of this mirror.
As such, by leave, each of the parties gave further brief evidence. It was common ground that the mirror was obtained by the de facto husband during the course of his work at G Markets. The de facto husband expressed there was some significance in his attachment to the mirror. The parties were in agreement that it had a value of some $700.
The de facto wife was concerned as to the loss of the mirror, and when it was removed there would be damage to the wall upon which it is hung in the former matrimonial home. Given the evidence before me I have determined the value of the mirror at $700. I have reduced the agreed value of the furniture to be retained by the de facto wife from $6,000 to $5,300. I intend to direct that the mirror be collected by the de facto husband but that he make good any damage to the wall, including repainting that particular wall, but not the whole room, as may be necessary.
Findings and contributions
It is generally conceded between the parties that the de facto husband will retain the proceeds of sale of the shack. I have referred elsewhere in the reasons in relation to the capital gains tax which may or may not be payable in respect of that sale.
The de facto wife has a small superannuation policy to which neither party seeks adjustment. Given the pool and the modest pool of that fund I intend to treat them as a single pool with the other assets and leave that amount in the de facto wife’s own hands. In any event, it’s a sum which would not be amenable to a splitting order.
Motor vehicles
The husband has three motor vehicles: a Van valued at $5,370, an 4WD valued at $4,470 and a Korean motor vehicle which is valued at $7,990. There was no independent evidence as to the value of these vehicles, and the de facto wife asserted their value as per their insurance value. In the absence of the evidence and with the agreement, as I understand it, of the parties I will simply treat these vehicles as the amount asserted by the de facto husband.
Similarly, the de facto wife had a Japanese motor vehicle which she asserted had a value of $2,500. I will adopt the same course in respect of that.
The de facto husband has a boat which the de facto wife valued at some $38,000, being its purchase price. The evidence of the expert is that it had a value between $24,000 and $26,000. Sensibly, the parties agreed its value at $25,000.
As to the former matrimonial home at B Street each of the parties agreed that the home should be transferred to the de facto wife. I will allow the wife 60 days to make arrangements to refinance the property, with the de facto wife taking the property and the mortgage liability and/or releasing the husband from the mortgage liability.
Given the adjustment of property contained in these orders, the de facto husband’s responsibility for contributing further moneys to the home will cease as and from the date of the orders.
In relation to the contents of the shed the parties have agreed to divide the contents earlier. If they are unable to do so then the parties are ordered to adopt an alternate pick type arrangement.
The de facto husband will retain his kayak and surfboards.
There was no significant cross-examination in relation to the husband’s overdraft or car loan. The de facto husband is entitled to treat those liabilities as against the assets to which he retains.
CONTRIBUTIONS AND DISCUSSION
The de facto wife gave evidence that she came into the relationship with savings of $80,000, a car with a value of about $3,500 and furniture. There is an issue about the quantity of furniture; however, I am satisfied, given the evidence of the de facto wife, that she had savings in or about that sum. She did not gain access to all of those savings, however, for some years. They accrued interest through an investment.
This was a substantial contribution by her at the commencement of the relationship, and its use helped the parties create assets, particularly regarding the Suburb F property.
The de facto wife said she supported herself during the course of the relationship. Given her modest income I am not sure that that was wholly the case. I am satisfied that each of the parties worked hard in this relationship. I am satisfied the de facto husband made significant contribution in terms of assisting the de facto wife set up a business, the renovations on the four properties, and the like.
Given the evidence of the de facto husband and his hard work in the business and despite his occasional surfing trips I am satisfied that he was the primary but not only income earner during the course of the marriage.
It was the money from the de facto wife, as I said, that enabled the parties to buy the property at Suburb E which was renovated and operated as a business for some years. It is significant that the parties borrowed about $100,000 on that property to enable the renovations. As such, the capital increase was not at the extent asserted, at least by implication, in the affidavit of the de facto wife.
The parties purchased Suburb F and undertook significant renovations to that property. Some of that work was undertaken by professionals, on a paid basis. I accept that the de facto husband undertook a deal of the physical work. Criticism of one against the other was not helpful given the period of time between the acquisition and renovation and the current time, and given the length of this long-term partnership between this couple.
I accept submissions of counsel for the de facto wife and as such I have had regard to the use of the de facto wife’s money, particularly in the purchase at Suburb F. However, I also accept that much of the increase in value is likely to have arisen from a combination of the renovations and the change in market values of property during that time, of which I have taken judicial notice. The parties spent a great deal of effort on renovating the property. It was sold at a significant profit. There seemed to be some explicit or implicit criticism of the de facto husband for investing in the share market in 2006 given the consequences of that in the following years. The de facto wife was aware of that investment and consented to money being borrowed to enable that investment. The impact of that was simply part of the vicissitudes of life during a long relationship.
I accept that the de facto wife received $15,000 from her mother, and I accept her evidence to that end, and I have taken it into account in assessing her contributions.
I also accept that the de facto wife’s mother loaned $6,500 to the de facto husband to purchase the site at G Markets. The loan was repaid, but it was a contribution to start that business.
The de facto wife gave some evidence as to the proceeds of sale of the boat, and I have mentioned that before. It was not a significant amount in the context of the overall assets of the parties.
The de facto wife asserted she undertook significant work on the boat room at Suburb F. I find that it was undertaken by both parties, and it was clearly a joint endeavour as a renovation of part of the home in their joint life at that time.
There was some issue about a cutting out of a driveway for Suburb F. That evidence did not impeach the veracity of either the de facto husband’s testimony or that of the de facto wife. Overall, each of the parties made their contributions to the best of their ability, and overall, each of the parties accepted the approach adopted by the other party during the course of that relationship. That was, in fact, their partnership and how they operated.
In annexure B to the wife’s affidavit she seeks add-backs in relation to some funds totalling $274,289. It is not really sought as add-backs; it is more sought as an adjustment in relation to either contribution or an adjustment in respect to the future needs. This pool was made up of $45,000 in cash allegedly received by the de facto husband in his business in 2011 to 2013. The de facto wife asserted these cash sums were not banked. There was no forensic accounting evidence supporting this assertion, and the de facto wife’s knowledge of the de facto husband’s income tax returns is somewhat limited.
There is no evidence that these amounts of cash were retained. Similarly, in terms of the cash receipts from the husband’s 2008 work diary and the business cash receipts in 2000 of the G Market business fall into that category. The husband denies that such cash was paid to him, and it is clear to me that the de facto wife clearly disputes this assertion; however, there is no evidence, even if that was correct, that the money was retained because the evidence of the de facto wife is that the money was, in fact, used on “toys” or collections.
So it is not as if there is money hidden away in that group, and on balance, I am not satisfied that the wife has established evidence that those moneys were not banked or were not included in the tax returns of the husband. As I said earlier, the consequences, if he was untruthful to the Court, to him will be extreme and will not visit on the de facto wife. I have already dealt with the proceeds of sale of the small boat which were then used in living expenses. The proceeds of sale of the G Market site were paid into the de facto husband’s business account.
The husband believes it was included in there, but it is clear from his tax return that it was not included as a capital gain. If it is not, it is a liability for the husband and not a liability for the wife, and he loses the benefit of that liability in the context of this application. The de facto wife sought some credit in relation to bookkeeping fees, over a number of years some time ago, in the sum of $5,122. If those funds were to be paid to the de facto wife it would not have an overall impact on the outcome of these proceedings. The de facto husband would be $5,122 poorer, the de facto wife $5,122 richer, and I would have to have regard to those in the balancing of the process that exists before me.
It would simply be an adjustment of moneys which had been earned by the parties during the course of their relationship. If the de facto husband is left with a tax liability in respect of that sum, so be it.
There was a sum of $9,016 referred to in a Westpac account. As far as I can recall, there was no significant cross-examination in respect of that sum.
The husband took his superannuation at age 60. He believed he was lawfully entitled to it. Part of it was used to purchase the boat, and part went into the business account.
The de facto wife asserted there was a huge wine collection of thousands of bottles. The de facto husband denied this, and the evidence of the de facto wife was that there was, at some stage, 100 bottles which were not professionally valued.
I am satisfied that the parties acquired wine during the course of the marriage and, no doubt, part of it may have been consumed. There is no evidence that the de facto husband presently has wine apart from a few bottles that he may have taken at separation. He asserts he has no bottles of wine at the present time. I accept that evidence on balance.
The de facto wife asserted pictures and prints from the de facto husband’s former business had a large value. The de facto husband claimed they were part of the contents of the shed. Given the stated evidence I cannot adopt the value asserted by the de facto wife.
There was some evidence of a book collection. The wife apparently had an oral valuation of that collection but did not adduce that evidence before the Court.
There was a claim about a knife set and a coffee machine purchased some years ago. There was no current valuation of those items.
Finally, there was the AAMI insurance payout which the wife complained about, in that the husband may have made the claim without reference to her.
Whilst that may or may not have been the case, the amount of that claim was eventually divided equally. The evidence of the de facto wife in relation to the G Market turnover is, in the absence of expert forensic evidence, of no significance as I cannot put meaning to it, and it is not my task to undertake that audit process. I accept the evidence of the parties that the de facto husband has been paying half the mortgage instalments and half the rates and insurance on the B Street property. The de facto wife applied to have her business declared as a hobby business in 2002, which is more in keeping with the de facto husband’s assessment of the earnings of that business.
The wife complained that the de facto husband had taken three overseas trips. One was joint and, of course, neither party can complain about the other in terms of that. The others were two modest trips taken by the husband at a cost of about $2,000 each. Given the circumstances of the parties that is also part of the vicissitudes of life.
The de facto wife gave evidence that the first time she discovered the alleged failure to pay tax was after separation when going through papers. Given the de facto husband’s evidence that some of the handwriting in a book, which was exhibited before me, was of the de facto wife, I am not satisfied the de facto wife was entirely unaware of the business circumstances of the plumbing business and/or the market business.
In any event, I make no findings about tax evasion given the unambiguous evidence of the de facto husband.
There were different approaches to the contribution in relation to this matter. The position of the husband was that the initial contribution of the wife was limited to $41,000, at best, but at the end of a 25 year relationship little or no credit should be given to that sum. The de facto wife’s submissions were that her contribution was a significant amount and enabled the parties to purchase the Suburb E property and, more significantly, Suburb F.
I have given weight to that contribution by the de facto wife, and I have determined that at $80,000, to which I have referred to earlier. However, in considering that contribution I have also considered the work undertaken by the de facto husband in terms of the renovation work on the four properties, some of which was hard physical work. I am also satisfied that the de facto husband’s earning capacity over the years of marriage was probably greater than that of the de facto wife. Weighed against that, of course, was that the de facto husband’s children were relatively young at the start of the relationship and that must have enabled some contribution by the de facto wife in terms of his children over that period of time.
Part of the property of the parties is the proceeds of sale of their shack at D Town. That sum is approximately $87,980, which sum has to be paid to the de facto husband. Evidence was adduced that there may be capital gains tax payable in relation to the sale of that property. Each of the parties had the benefit of the capital gain of the property, and it would be unjust if one party or the other was left to pay the whole of that capital gains tax.
I had considered treating the capital gains tax as per the division to which I have referred elsewhere in these reasons. However, rather than cause an arithmetical difficulty and perhaps problems in terms of the lodgement of tax returns and the like, I propose that each party will be responsible for the capital gains tax on one-half of the property. That way each will pay tax in accordance with their respective earnings in the year that the capital gain accrued.
I have had regard to the slight disproportion in relation to that liability given the percentages to which I refer later. The de facto husband is currently a self-employed tradesman in H Town and earns a modest income. His turnover is significant; so are his expenses. I am satisfied that he has a greater earning capacity than that of the de facto wife notwithstanding that he’s operating from a small town. I am also conscious of the age difference and that the de facto husband works in hard physical employment as a tradesman.
In terms of the reasons the parties moved from Suburb L, the de facto husband agreed that he supported the de facto wife in her legal challenge with the RSL Club, and again, his criticism can bear no significant weight. It is one of the vicissitudes of life, and it was a path that he took jointly with his then partner.
The de facto husband said, and, on balance, I accept, that the G Market business was not overly profitable, but it was something which he enjoyed. He said that the overheads made profitability marginal.
Having regard to the facts, both agreed and determined, over this lengthy period of marriage, the contributions made by the parties, their future needs, their ages and what have you and those matters to which I have referred to above, I am satisfied that the adjustment of property of the parties ought to be 40 per cent to the de facto husband and 60 per cent to the de facto wife.
The outcome of that will be that the de facto wife will retain:-
B Street Suburb C (jointly owned) (agreed value)[7]
$360,000
B Street home furniture and contents
$5,300
Japanese motor vehicle (agreed value)
$2,500
De facto wife’s superannuation (Peters Super)
$3,125
Home mortgage
-$115,000
NET FIGURE
$255,925
[7] To be transferred from joint ownership of the parties to the de facto wife.
That the de facto husband retain:-
The D Town Shack sale proceeds
$87,980
Van motor vehicle
$5,370
4WD
$4,470
Korean motor vehicle
$7,990
Boat (determined at $25,000)
$25,000
Kayak and 2 surf boards
$1,000
De facto husband’s overdraft
-$18,732
De facto husband’s car loan
-$8,000
NET FIGURE
$105,078
Despite the urgings of counsel for the de facto wife to the contrary, I have decided to adjust the property on a percentage basis that has enabled me to better understand the outcome.
Given the factors set out above I have determined that division on a 60/40 basis, which would mean the de facto wife would need to pay the de facto husband $39,323 to give effect to that outcome. I am satisfied in all of the circumstances that the outcome is just and equitable and I will so order.
I had raised with the parties the question as to whether the documents in this matter should have been referred to the Australian Taxation Office given the serious allegations set out by the de facto wife in her affidavit
It was clear from the de facto wife’s affidavit that she had suspicion about the de facto husband; however, a plausible explanation was provided to that. As I said earlier, if the de facto husband is untruthful he will bear the whole consequences of it. Putting aside the suspicions of the de facto wife as to cash, the only other issues of tax were of a relatively minor nature, the first being the payment of capital gains tax on the sale of the G Market Site and the second being the bookkeeping expenses. I do not, in all of the circumstances, intend to refer the matter to the Australian Taxation Office.
Over the last 48 hours I have drafted the orders. I invite counsel and their respective clients to inspect the orders, and if there are any mechanical changes that need to be made to give effect to the intent of the orders I am happy if a joint letter is sent to me setting out those submissions. If my arithmetic is incorrect I invite, again, a joint letter in that respect. Otherwise, tomorrow morning at 10 o’clock I will perfect the orders in that form so that they are done beforehand.
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 21 May 2015.
Associate:
Date: 21 May 2015
Appendix A
The existing legal and equitable interest of the parties in the property
B Street Suburb C (jointly owned) (agreed value)[8]
$360,000
B Street home furniture and contents
$5,300
Japanese motor vehicle (agreed value) (de facto wife to retain)
$2,500
De facto wife’s superannuation (Peters Super)
$3,125
Home mortgage
-$115,000
NET FIGURE
$255,925
[8] To be transferred from joint ownership of the parties to the de facto wife.
Shack sale proceeds
$87,980
Van motor vehicle (de facto husband to retain)
$5,370
4WD
$4,470
Korean motor vehicle (de facto husband to retain)
$7,990
Boat (de facto husband to retain) (determined at $25,000)
$25,000
Kayak and 2 surf boards
$1,000
De facto husband’s overdraft
-$18,732
De facto husband’s car loan
-$8,000
NET FIGURE
$105,078
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