Pilcher and Pilcher (No.3)
[2018] FCCA 551
•16 March 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PILCHER & PILCHER (No.3) | [2018] FCCA 551 |
| Catchwords: FAMILY LAW – Property settlement – where the wife’s contributions were almost entirely non-financial – where the wife removed large amounts of money from the parties’ (omitted) Bank Account during the marriage and gave that money to her son from a previous marriage – whether the husband was aware of the extent of those withdrawals – whether the husband should be liable for part of the wife’s Centrelink debt. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79, 90MT Family Law (Superannuation) Regulations 2001, pt.VI, reg.13 |
| Cases cited: Stanford & Stanford (2012) FLC 93-518 Bevan & Bevan [2013] FamCAFC 116 |
| Applicant: | MS PILCHER |
| Respondent: | MR PILCHER |
| File Number: | MLC 4567 of 2015 |
| Judgment of: | Judge Small |
| Hearing dates: | 7, 8 & 9 March 2017 |
| Date of Last Submission: | 9 March 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 16 March 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Combes |
| Solicitors for the Applicant: | Pearsons Lawyers |
| Counsel for the Respondent: | Mr Robinson |
| Solicitors for the Respondent: | Clancy & Triado |
ORDERS
Within 75 days of the date of these orders (“the due date”), the husband shall:
(a)pay to the wife the sum of $380,627 (“the payment”); and
(b)discharge the mortgage over the property situate at and known as Property A, in the State of Victoria (“the real property”);
Contemporaneously with the payment the wife shall:
(a)vacate the real property, leaving it in good order;
(b)remove the caveat she has placed over the real property;
(c)do all such acts and things and sign all such documents as may be necessary to transfer to the husband at the expense of the husband all of her right title and interest in the real property; and
(d)indemnify and forever hold indemnified the husband in relation to her debt to Centrelink.
If the husband does not make the payment by the due date then the parties shall, within 14 days of the default, do all such acts and things and sign all such documents as may be necessary to place the real property on the market for sale and the proceeds of sale shall be applied as follows:
(a)First, to pay all costs and commissions of the sale;
(b)Second, to discharge the (omitted) Bank mortgage dealing number (omitted);
(c)Third, so much of the payment as is outstanding to the wife together with interest at the rate of 8% per annum from the due date to the date of payment; and
(d)Fourth, the remainder to the husband.
The wife shall retain for her own use and benefit absolutely her Holden (omitted) motor vehicle.
The husband shall retain for his own use and benefit absolutely his 2010 Honda (omitted) motor vehicle.
In accordance with s.90MT(1)(b) of the Family Law Act 1975 (Cth), whenever a splittable payment becomes payable in respect of the superannuation interest of the husband Mr Pilcher (Account no. (omitted)) in the (omitted) Super Fund (“the fund”), the wife Ms Pilcher will be entitled to be paid an amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 using the base calculation of 40% (forty per cent) and there will be a corresponding reduction in the entitlement of the husband.
The trustee of the fund must comply with the obligations imposed upon trustees of eligible superannuation plans under the Act and the Family Law (Superannuation) Regulations 2001.
The husband is hereby restrained by himself, his servants and agents from making any binding death benefit nomination to the trustee of the fund in favour of any person who is an eligible beneficiary within the meaning of reg.13 of the Family Law (Superannuation) Regulations 2001 which would have the effect of diminishing the value to the wife of the splitting Order made in paragraph 6 hereof.
Paragraphs 6 and 7 of these Orders bind the trustee of the fund when these paragraphs take effect from the operative time, being the fourth business day after the date these Orders are served upon the trustee.
The wife and the husband shall do all such things and execute all such documents as are necessary to facilitate the rollover by the trustee of the fund of the husband’s entitlements pursuant to paragraph 6 of these Orders to another regulated superannuation fund, an approved deposit fund, or a retirement savings account or other such applicable fund or account at the sole nomination of the wife as soon as that is practicably possible after the operative time.
In the event that either party fails or refuses to sign any documents required by these orders, then pursuant to s.106A of the Family Law Act 1975 (Cth) a Registrar of this Court is appointed to sign on behalf of the defaulting party, such document as may be required to give effect to these orders, and the Registrar shall be satisfied as to his/her authority to do so upon receipt of sworn evidence from the aggrieved party as to the default by the other party.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders.
(b)monies standing to the credit of the parties in any joint bank account are to be divided between the parties in the proportion of 70 per cent to the husband and 30 per cent to the wife;
(c)insurance policies remain the sole property of the owner named thereon;
(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)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and
(f)each party forgoes any claim they may have to any inheritances to which the other party is entitled to either presently or in the future.
IT IS NOTED that publication of this judgment under the pseudonym Pilcher & Pilcher (No.3) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 4567 of 2015
| MS PILCHER |
Applicant
And
| MR PILCHER |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a property matter resulting from the breakdown of the marriage between Ms Pilcher (“the wife” or “Ms Pilcher”) and Mr Pilcher (“the husband” or “Mr Pilcher”).
The wife seeks Final Orders for the husband to pay her a lump sum payment, upon receipt of which she proposes to remove the caveat she has placed over the matrimonial home and transfer her title in it to the husband. If the husband were to default on this payment, the wife seeks Orders for the property to be sold with the net proceeds to be divided 60% minus $50,000 to the husband and 40% plus $50,000 to the wife. She also seeks a superannuation splitting Order which would equalise the parties’ entitlements.
The husband seeks Orders for him to retain the former matrimonial home and for that property to be transferred into his name. He seeks to pay the wife $300,000 inclusive of the partial property settlement already paid to her.
Therefore, the issues to be decided in this matter are as in any marital property dispute:
(a)Is it just and equitable to alter the parties’ property interests?
(b)If it is just and equitable, what are the property interests of the parties and what is their value?
(c)What were the parties’ contributions to the property?
(d)Should there be an adjustment to the contribution-based entitlements of the parties after a consideration of the matters set out in s.75(2) of the Family Law Act 1975 (Cth) (“the Act”)?
(e)In light of the above findings, what Orders should be made to effect a just and equitable division of property between the parties?
There are further ancillary matters in dispute in relation to the wife’s initial contributions, the application of Centrelink payments she received during the marriage, the application of certain lump sum payments she received from the Transport Accident Commission and her superannuation fund, and the responsibility for a (omitted) Bank loan of some $229,000, and I will deal with those matters under the above headings.
Background
Ms Pilcher was born on (omitted) 1958 and was therefore 59 years old at the time of trial. She is not in good health as a result of her involvement in a serious motor vehicle accident in (omitted) 1998. She is currently in receipt of a Disability Support Benefit and does not have the capacity to undertake paid employment.
Mr Pilcher was born on (omitted) 1953 and at the time of trial was 63 years old. He was born in (country omitted) and migrated to Australia with his parents at the age of thirteen. From that time until an Intervention Order was made against him 19 August 2015, he lived in the property at Property A (“the Property A property”).
He was made redundant from his position at (employer omitted) in (omitted) 2015 after working there as a (occupation omitted) for 35 years. At the time of trial he was working as a (occupation omitted) with (employer omitted).
The parties commenced living together in (omitted) 1999 when the wife moved into the Property A property, and married in (omitted) 2006. They separated temporarily between July and November 2010.
On 23 February 2015 the parties separated on a final basis under the same roof. Mr Pilcher vacated the matrimonial home on 19 August 2015 pursuant to the terms of an Intervention Order to which he consented without admissions. At the time of trial the wife remained living in the family home with the husband paying all mortgage payments and direct outgoings of the property. As far as the Court is aware, they had not divorced at the time of trial.
There are no children of the marriage however both parties have adult children from previous relationships.
Mr Pilcher’s children are Ms W and Mr D, both of whom are married and live independently.
Ms Pilcher’s children are Ms K (“Ms K”) and Mr C (“Mr C”). Ms K is married and has two children. She filed an affidavit in these proceedings on 1 August 2016. Mr C is divorced and lives with his children.
Procedural History
These proceedings commenced with Ms Pilcher filing an Initiating Application, Affidavit in Support and sworn Financial Statement on 22 May 2015, seeking a property settlement and urgent spousal maintenance.
Mr Pilcher filed a Response, Affidavit in Support and sworn Financial Statement on 19 June 2015.
The matter first came before me on 18 August 2015 in the Duty List at Melbourne. At this time I ordered the parties to attend a Conciliation Conference on 2 December 2015. I also listed the matter for Final Hearing on 15 August 2016 for a 2 day trial. The parties were able to reach agreement on an interim basis, and I ordered by consent that the husband pay all rates, taxes and bills for the Property A property, and pay to the wife $30,000 from his redundancy payment from (employer omitted), that payment to be characterised as a partial property settlement.
The parties attended the Conciliation Conference on 2 December 2015 and were unable to reach agreement.
On 22 December 2015 the wife filed an Application in a Case seeking spousal maintenance and a lump sum payment as a partial property settlement. The husband filed a Response to this Application on 29 January 2016. In this Response he sought sole use and occupation of the Property A property and costs.
The parties next appeared before Judge Stewart on 9 February 2016. Interim Orders were made by consent which provided that each party receive half of the $58,538.00 held in a (omitted) Bank Account, with those payments to be characterised as partial property settlement to each party. The matter was otherwise adjourned to 24 May 2016 for Mention.
On 14 April 2016 Orders were made in Chambers allowing the husband to withdraw his Application for sole use and occupation sought in Orders 2 and 3 of his Response to the Application in a Case filed 29 January 2016. The hearing date of 24 May 2016 was vacated and no Order was made as to costs.
On 15 August 2016 the matter was listed for trial, but came before Judge O’Sullivan as I was ill. The trial was adjourned to 20 October 2016 for 2 days.
Most unfortunately, the matter was unable to proceed on 20 October 2016 and was adjourned for Final Hearing with priority on 7 March 2017 for 2 days.
On 10 February 2017 the matter came before me for Mention, where Interim Orders were made by consent for Mr C to withdraw a subpoena objection.
The matter came before me for Final Hearing on 7 March 2017 and ran for 3 days. Witnesses were the husband, the wife, Mr C and Ms K, and all were subject to cross-examination.
On 9 March 2017 I made Orders that until further order, the husband make all payments to the (omitted) bank account secured by mortgage over the Property A property and discharged paragraph 1 of the Orders made by consent on 18 August 2015.
I otherwise reserved my decision.
On 8 September 2017, the wife filed an Application in a Case seeking to adduce further evidence about the purported change in value of the matrimonial home.
Immediately upon becoming aware of that Application, I ceased to write this judgment. At that time I estimate that the judgment was between one half and two-thirds complete.
I heard the Application in a Case on 10 October 2017 and after hearing submissions from counsel for both parties, indicated that I would pronounce judgment on that matter on 13 October 2017.
On 13 October 2017, I made an order dismissing the wife’s Application in a Case, and told the parties that I would settle written reasons for that decision in the next week and send those Reasons to the parties’ solicitors.
Those Reasons were finally settled on 20 October and sent to the parties on the same day.
I did not return to the writing of this judgment until the 28-day period for an appeal against my order of 13 October 2017 had expired, that is until after 10 November 2017. I note that no appeal was filed against that order.
On 7 December 2017, I was made aware that the wife had again filed an Application in a Case (“the second Application in a Case”) seeking to adduce further evidence about the change in value of the family home since the trial. I again immediately ceased writing this judgement.
I listed that Application for mention on 15 December 2017, when I set it down for hearing on 25 January 2018 and ordered the parties to file written submissions, the wife by 11 January 2018 and the husband by 18 January 2018.
The wife filed her submissions on 11 January 2018 and the husband filed submissions in response on 18 January 2018.
On 25 January, I heard the second Application in a Case and reserved my decision until 5 February 2018, although I made an Order on that day in the following terms:
2. In the event that the Wife is unsuccessful in her Application in a Case filed 7 December 2017, and the Husband wishes to pursue his costs of that Application, he shall file written submissions in relation to the issue of costs no later than 14 days after the delivery of judgment in relation to that Application, and the Wife shall file her submissions no later than 14 days after service upon her of the Husband’s submissions.
I delivered judgment in the second Application in a Case on 5 February 2018. I published my Reasons within a few days of delivering judgment.
I dismissed that Application under the principle of res judicata.
Neither party filed submissions in relation to the costs of that Application.
Again, I was forced to wait until the expiration of the appeal period before returning to this judgment on 5 March 2018.
By the time the judgment in the second Application in a Case was completed, and the appeal period had elapsed, almost 12 months had passed since the trial, at least five months of that delay being caused by the actions of the wife in seeking to have the property value of the family home increased so that the husband’s payment to her would increase.
Notwithstanding that those months of interruption have been very frustrating for the court, it should be noted that the outcome of these proceedings has not been influenced by those interruptions.
Issues and Evidence
(a) Is it just and equitable to alter the parties’ property interests?
This question arises from the requirements of s.79(2) of the Family Law Act 1975 which states:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The interpretation of s.79(2) was considered by the High Court of Australia in the matter of Stanford v Stanford (2012) FLC 93-518, where their Honours stated that it is not a simple matter to decide what is just and equitable. At paragraph 36 of their judgment, their Honours stated:
The expression "”just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
Nevertheless, the High Court went on to say, at paragraph 42:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.
In Bevan & Bevan the Full Court said that the circumstances described in that passage of the Stanford judgment “encapsulates the vast majority of cases”[1] .
[1] Bevan & Bevan [2013]FamCAFC 116 paragraph 70.
In this case, the parties were married and acquired property which, because of their separation, can no longer be enjoyed together. There is nothing in the circumstances of the present case which would remove it from the category of “the vast majority of cases” in this context, and therefore I find that it is just and equitable to consider altering the property interests of the parties.
(b) If it is just and equitable, what are the property interests of the parties and what is their value?
The property interests of these parties can be set out as follows[2]:
[2] Pursuant to the parties’ Outline of Case Documents and as explained below
Asset
Owner
Value
Property A, (omitted)
Joint
$1,350,000
Holden (omitted) motor vehicle
Wife
$20,000
Honda (omitted) motor vehicle
Husband
$20,000
(omitted) Bank account
Wife
Nominal
Redundancy payout remainder
Husband
$42,949
(omitted) Bank account
Husband
$295E
Amounts paid to the wife during the proceedings
$59,269
Amounts paid to the husband during the proceedings
$29,269
Total non-superannuation assets
$1,521,782
Liabilities
Ownership
(omitted) Bank account secured by mortgage over the former matrimonial home
Joint
$229,000
(omitted) Bank credit card
Husband
$7258
(omitted) Bank credit card
Wife
$6055
Centrelink debt
Wife
$100,000
Total liabilities
$342,313
Net non-superannuation assets
$1,179,470
Superannuation
Husband
$238,748
Wife
Nil
Total Superannuation entitlements
$238,748
Net assets including superannuation entitlements
$1,418,218
(c) What were the parties’ contributions to the property?
This question arises from s.79(4) of the Act which reads:
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Initial Contributions
The wife’s evidence is that at the time she and the husband began living together she owned (omitted) shares worth about $3500, savings of about $5200, a Holden (omitted) motor vehicle worth $10,000, and a property settlement from her previous marriage of about $100,000.
She says that she applied the $100,000 from her previous property settlement to pay off Mr Pilcher’s mortgage, “and otherwise for joint benefit including making cosmetic changes and improvements to Property A to purchase furniture, furnishings and household contents, curtains and kitchenware and for holidays that we enjoyed together”.
She does not provide any detail about how much of those monies were applied to the mortgage, furniture and chattels, and holidays. However, it would appear from other evidence that the husband’s mortgage stood at about $80,000 when it was paid off by the wife on 22 July 2003.
In his initial affidavit sworn 17 June 2015, Mr Pilcher deposes that at the date of cohabitation in 1999, he owned the former matrimonial home which was worth $450,000 at that time, and that the property was encumbered by a mortgage of about $80,000 (although he said at trial that he thought it had had a balance of about $100,000 at the time Ms Pilcher moved into his home).
That is, he says that he entered the relationship with real property worth about $350,000 to $370,000 net.
Under cross-examination at trial, Mr Pilcher gave evidence that his superannuation entitlements at the time of cohabitation were worth about $120,000, but after being shown a document from his then superannuation trustee, he conceded that his entitlements were worth only $44,354 in 1999. He said that he had been mistaken about the figure and that he was “hopeless with numbers”.
He concedes that Ms Pilcher paid off the $80,000 mortgage in 2003 when she received her property settlement from her former husband, and says that the property was then transferred to the parties such that they owned it as tenants-in-common in equal shares. He conceded that the mortgage was paid by instalments from joint funds between 1999 and 2003.
It is the wife’s evidence that she brought in cash of about $100,000 into the relationship as a result of payments received from the Transport Accident Commission and from hardship payments from her superannuation entitlements. Ms Pilcher says she applied those sums to refurbishing the property by way of repainting and providing new curtains throughout.
When asked about that matter at trial, Mr Pilcher conceded that Ms Pilcher had paid for the new curtains, but said that he had not known about those payments to his wife, and that he had “never seen it”. He did accept that she had bought manchester and kitchen utensils at the commencement of the relationship, but denied that she had paid for his fiftieth birthday celebrations or a trip overseas, saying: “How could she? I was the only one working.” It was his evidence that money the wife spent on the parties’ wedding was won “on a horse”.
Mr Pilcher conceded that Ms Pilcher had received lump-sum payments, although it was his evidence that Ms Pilcher had told him that the car accident she had been involved in had been her fault, and that she would therefore receive medical expenses from the Transport Accident Commission but no lump sums. He said that if she had received lump sums he had no idea how she had spent them, but that it had not been on any major improvements to the Property A property.
In those circumstances, with no real evidence from the wife about her lump sum payments’ application, I find that Mr Pilcher’s initial contributions to the property of the marriage outweighed those of Ms Pilcher to a significant degree.
Contributions during the marriage
During the relationship and marriage, Mr Pilcher worked full time and Ms Pilcher either worked or stayed home caring for the house and the children.
It is Ms Pilcher’s evidence that she has not worked outside the home since the parties began living together in (omitted) 1999, except for employment at (omitted) in 2007 and 2008, and at the (omitted) Bank for about 18 months after that.
There do not seem to have been any other contributions from outside the marriage to the parties’ property save for the husband’s redundancy payment of $131,487 in 2015.
So much is agreed by the parties.
The (omitted) Credit Account
The major dispute in these proceedings is how the (omitted) Bank Credit debt secured by mortgage over the Property A property ought to be treated, and I deal with that matter here because essentially, the husband’s case is that the wife created the debt by way of what might be called a “negative contribution” to the parties’ assets.
He says that the wife should be solely responsible for the (omitted) credit account, because it was used to pay for her son’s legal fees without his consent and, in relation to the extension of the loan in October 2013, without his knowledge.
Ms Pilcher says that the (omitted) credit debt is a joint debt because the husband knew about and consented to all drawdowns made from that account.
It is not disputed between the parties that between about March or April 2009 and the date of trial, sums totalling about $400,000 were drawn down from the (omitted) credit account and paid to one or other of Ms Pilcher’s children. At the time of trial, that debt stood at $229,000.
Ms Pilcher says her husband was entirely aware of those drawdowns and that he consented to them. Mr Pilcher denies that assertion in relation to those drawdowns made after 2009 and paid to Mr C or his lawyers.
It is the evidence of both parties that the original credit limit on the (omitted) credit account was $175,000 and that $140,000 of those monies were then loaned to Ms Pilcher’s daughter Ms K, so that she and her husband would not have to obtain bridging finance for the purchase of their family home. It is not is in dispute that Ms K paid that money back to the (omitted) credit account within a few weeks.
In his affidavit sworn on 17 June 2015, the husband deposes that he discovered in about March 2012 that Ms Pilcher had drawn down on the (omitted) credit account in the amount of about $83,000 “without my knowledge or consent, to assist Mr C with his family law proceedings”.
He deposes that when he confronted the wife about this drawdown she said that she had not told him about it because she knew he would not consent to it. He says that Ms Pilcher informed him at that time that Mr C would repay the loan and that he should not worry about it.
The husband’s evidence is that he was unaware that the loan limit on the (omitted) credit account was then raised from $175,000 to $225,000 in October 2013.
He deposes that he only became aware of the new limit in February 2015 when he visited the (omitted) Bank (“the (omitted) Bank”) branch in (omitted) and was told by a teller that the loan had increased.
Mr Pilcher deposes that while there is a signature which purports to be his on the application which increased the (omitted) credit account in October 2013, he does not recall signing the document and, in essence he believes that the wife, or some other person at her instigation forged his signature. Further, Mr Pilcher says that he does not recall receiving a telephone call from the bank manager in October 2013 confirming the increase.
He then deposes:
62. As referred to earlier in my affidavit, my literacy skills are reasonable but basic. During our relationship I have signed many bank documents when requested to by Ms Pilcher, regarding credit card applications as Ms Pilcher appeared to close them frequently and apply for new accounts.
[…]
63. In 2013 I registered for on line banking so I could keep track of my account balances. When I first accessed the online facility, a number of accounts appeared, including the (omitted) credit account. I asked Ms Pilcher to explain what was written for each account, as I was not confident I would understand. When we came to the (omitted) credit account Ms Pilcher said words to the effect of “That is a mistake” and I recall she seemed annoyed. The next time I checked the online banking facility, the (omitted) credit account did not appear. It did not reappear until April 2015. This was after I spoke to the teller staff at the (omitted) branch of the (omitted) Bank in March 2015, seeking statements for that account. I was informed that I was “blocked” from the account and they would not provide me with the statements. However a week or so later the (omitted) credit account appeared with the balance. I was also able to collect previous statements.
64. On 29 May 2015 I visited the (omitted) Bank and was shown by the bank manager that Ms Pilcher received online statements for the (omitted) loan from 2009. The statements were addressed to Ms Pilcher in her previous married name and to her previous address. I was not registered for online banking and I was not aware they were there and did not receive hard copies. To this date I am still not receiving the statements.
In his trial affidavit sworn 27 July 2016 and filed 1 August 2016, Mr Pilcher deposes that at the time the (omitted) credit account was established in 2009, he was considering purchasing “a small property to renovate as an investment” and that the account had been kept open after Ms K repaid her loan for that purpose. However, Mr Pilcher deposes that he had put the investment property project “on hold” because of the costs involved and that he “did not access the loan facility, nor was I aware it was being drawn against after Ms K repaid the loan”.
Mr Pilcher deposes further that during the period when the parties were separated in 2010, he attempted to close the (omitted) credit account, but that he had been informed by the bank that both parties’ signatures would be needed. He says that he did not pursue that option because he and Ms Pilcher were not communicating well at that time.
He says that after he had discovered that the (omitted) credit account had a debit balance of $83,000 in about March 2012, and he had had a conversation with his wife about that debt, he had “trusted Ms Pilcher that there would be no further drawing on the (omitted) credit account loan”.
He then repeats his evidence about how he discovered in February 2015 that the (omitted) credit account had been extended and that the debit balance was then almost $225,000.
In relation to the document evidencing the extension of the loan, Mr Pilcher deposes:
68. […] My signature is on the document. However I do not recall signing the document and I do not believe that the signature is mine.
He repeats his previous evidence that he does not recall receiving a phone call from Mr K, the manager of the (omitted) Bank at the time (“Mr K”), about the extension application.
He then deposes as follows:
74. On 15 July 2016 I visited the (omitted) Bank branch to enquire further about why I did not receive statements for the (omitted) Credit Account loan account and was unable to access it online. The bank manager logged into onto my Internet banking and agreed that I had no access to the account and that it was blocked. She was unable to explain why that was the case. The bank manager informed me that I should have received statements in the mail. I advised her that I had not received any, including since May 2015 when all my mail has been redirected.
75. The bank also advised me that the letter of confirmation to the increase in the (omitted) Credit Account loan limit to $225,000 was sent to Ms Pilcher only at (omitted), and addressed to Ms Pilcher.
76. Ms Pilcher has utilised the line of credit without my knowledge or consent and the application of the line of credit has not gone towards joint property. I do not agree that this is a joint liability. Even though the line of credit is in both our names, I have not had the benefit of the line of credit, nor was I made aware at any stage during the relationship that it was being used.
77. There was never any agreement between us that we would assist Mr C with his legal fees. I was never asked and I never agreed.
Mr Pilcher again says that he had trusted that Ms Pilcher would ensure that Mr C repaid the loan, and says he had “never considered it would not be repaid or that it would continue to be drawn against”.
In a further affidavit sworn 20 February 2017 and filed 21 February 2017, Mr Pilcher deposes that on 21 October 2016, the day after the trial date had been adjourned for a second time, his solicitors received correspondence from the wife’s solicitors asking to increase the (omitted) credit account limit by $50,000, such sum to be paid to Ms Pilcher as a partial property settlement as she was in need of funds. He instructed his solicitors to respond to that request saying that he did not agree to the extension of the (omitted) credit account limit as he did not wish to further encumber the Property A property.
He says that on 25 October 2016 he was contacted by the (omitted) Bank who told him that the (omitted) credit account was overdrawn by $980 and that the debt would need to be paid immediately. He asked the wife to ensure that the payment was made as she had previously deposed that Mr C was making regular repayments to that account. That payment was subsequently made.
Mr Pilcher then deposes that he received correspondence from the (omitted) Bank on 9 December 2016 informing him that his application for financial assistance had been granted and that repayments on the (omitted) credit account would be deferred until 1 March 2017.
Mr Pilcher says that until that time he was unaware of any application to the bank for financial assistance in relation to the (omitted) credit account. Upon making enquiries of the bank, he says that he was told that “the application was made over the phone and that the ‘Notes’ would be on Ms Pilcher’s file but there was nothing on mine”. Mr Pilcher expresses his concern about Ms Pilcher’s unilateral application for a deferral on repayments and any extra interest which would be incurred as a result. He says that he wishes Ms Pilcher to be held liable for any such extra interest incurred.
At trial, Mr Pilcher confirmed that on a day in late 2009 there had been a “conference call” between him, Ms Pilcher and Ms K in relation to how the family could assist Mr C as he was extremely distressed. He denied that there was any conversation about, or indeed mention of financial assistance at that time, saying that the discussion was about emotional support the family could give to Mr C.
He further denied that Mr C had attended at the Property A property on that evening.
He was adamant that Ms Pilcher’s evidence about arrangements purportedly made between him and Mr C about the financial assistance was false, and that he did not know that monies were being redrawn from the (omitted) credit account after Ms K had repaid the monies advanced to her until March 2012, when a bank teller told him the debit balance stood at $83,000.
Under cross-examination, Mr Pilcher said that Ms Pilcher had been “good wife in every way. We were good together”.
It was his evidence that he saw his wife’s children as “his own”, and that when his wife told him that Mr C needed help he had not hesitated. However, he says that the first he knew of Mr C’s distress was during a phone call sometime late in 2009 which had been received between 9:30pm and 10:00pm.
He was adamant that Mr C had not attended at his home that evening, and that the discussion between him and his wife at that time was that their approach to Mr C’s distress would be to “talk to him, calm him down, tell him everything would be all right”. He said that he considered that Mr C’s financial problems were an issue for him and his mother and that they were none of his business. Indeed, it was Mr Pilcher’s evidence that when he had tried to speak to his wife about those issues he had been told to mind his own business.
He said that when he discovered the $83,000 debt on the (omitted) credit account in March 2012, he had gone home and spoken to the wife about it, and she had said that she had not told him about the debt because she knew he would “probably say no”. It was his evidence that Ms Pilcher had asked him not to tell Ms K about the parties having loaned those monies to Mr C. He says he asked Ms Pilcher whether Mr C would be paying the monies back and that she had said that he would do so when he could. He agreed with counsel that he had not attended the bank to check whether the monies were being paid back as he had trusted his wife.
He denied that his lack of action at that time demonstrated his consent to the (omitted) credit account being used for Mr C’s legal fees, saying that it had showed only his trust in his wife.
Mr Pilcher said he believed that the signature on the extension letter in 2013 was a forgery, but he conceded that he could have signed it, because Ms Pilcher would often place documents in front of him to sign and his literacy skills were fairly basic. However, he insisted that he believed that the signature was forgery.
He could not explain why a handwriting expert had not been engaged to inspect the documents, but firmly denied that the reason was that he knew that the application had been made and that the signature was his.
Nevertheless, he agreed that on 15 August 2016 Judge O’Sullivan had made orders by consent with a notation stating:
A.That if the husband asserts that the extension of the (omitted) Credit Account was obtained by the fraud of the wife he shall notify the wife’s solicitors in writing by 4:00pm Wednesday, 17 August 2016.
Mr Pilcher conceded that he had made no such notification.
Mr Pilcher admitted that he knew that Mr C was involved in family law proceedings as Mr C often spoke to him about those proceedings, but said that when he asked his wife how Mr C was funding his proceedings she simply told him that “it had been taken care of”.
He was very clear that he had not taken any action when he had discovered the (omitted) Credit Account debt of $83,000 in March 2012 because he had trusted his wife when she said that Mr C would be repaying the debt.
In relation to his evidence that he did not receive statements for the (omitted) Credit Account, it was Mr Pilcher’s evidence that he was always at work when the daily mail arrived, and that his mail was left on the kitchen bench whereas his wife’s was not. He said he had not looked in the filing cabinet because he was “not allowed to”. When shown a (omitted) Credit Account statement from June 2010[3] with his name and the Property A address on it, Mr Pilcher was adamant that he had never received any such statements, although he conceded he had been living at the Property A address at the time.
[3] I note that this was about the time that the parties separated for the first time.
Mr Pilcher said he was very suspicious when he finally obtained access to Internet banking and saw that the (omitted) Credit Account balance was more than $100,000. He was very certain in his evidence that he had gone to the bank who had not told him anything, and that his Internet access to the account had then been blocked. He says he took the issue to the managers of the bank and the (omitted) Credit Account statements reappeared on his Internet account. He said that he was very suspicious about that circumstance, and that he thought that Mr K and the wife may have conspired together to keep from him the fact that the (omitted) Credit Account was being used regularly.
There is absolutely no evidence of such a conspiracy, and I mention it here merely to emphasise Mr Pilcher’s current lack of trust of the wife in relation to the (omitted) Credit Account debt.
Mr Pilcher stated that his trust in his wife during the marriage had led him to pay accounts she had stuck on a board at the Property A address “like a stooge”. He agreed with the suggestion that it was his practice to “put his head in the sand” in relation to finances.
Under cross-examination at trial, Mr Pilcher denied that Ms K had given him money on behalf of the wife during the marriage, saying that Ms K “was lying” when she gave that evidence.
Indeed, Mr Pilcher stated that the wife and Ms K were “the best” at lying and that the wife was “one of the best I’ve seen”.
It was his further evidence that it was he who had put cash on the kitchen bench for his wife each fortnight as she was not working and she needed money for herself and to pay for household expenses.
While I found Mr Pilcher to be suspicious in his approach to the wife’s evidence, if what he says is true, and he did not know that Ms Pilcher was regularly drawing down money from the (omitted) Credit Account to pay for Mr C’s legal and other expenses, he has every reason to be suspicious of her.
He was generally consistent in his evidence, and never faltered in stating that he never knew of the drawdowns exceeding $100,000 until well after the parties had separated, and that he was not aware of the extension to the (omitted) credit limit in 2013 until 2016.
Overall I found him to be a credible witness.
The wife’s evidence is that Mr Pilcher was fully aware that her son, Mr C, was experiencing financial difficulties in the conduct of his own family law proceedings between 2009 and 2014.
In her affidavit sworn 20 and filed 22 May 2015, the wife deposes as follows:
21.In 2009 Mr Pilcher and I applied for a (omitted) Credit Account against Property A for $175,000. We applied for this as my daughter Ms K was having problems gaining bridging finance for the purposes of buying a house. We agreed that we would help Ms K out and loaned her this amount which was paid back to us a few weeks later when her finance was approved and a settlement took place.
22.We then agreed to use the (omitted) Credit Account to help my son Mr C when he became involved in Family Court litigation with his former partner. Mr C has a limited ability to work as he was diagnosed with Becker’s Muscular Dystrophy. We both agreed to help Mr C out. Mr Pilcher said to me that he was happy to help Mr C out by letting him access our (omitted) Credit Account “as long as he paid us back”. In October 2013 we increased the limit on the (omitted) Credit Account to $225,000.
23.Initially Mr C was making fortnightly repayments towards the (omitted) Credit Account of $800, however this changed to monthly repayments in April 2014 of $1,100 instalments which he continues to make to date[4].
[4] I note that by the date of trial, Mr C’s monthly payments had reduced first to paying only the interest on that loan, and then to nil payments from December 2016.
In her affidavit sworn and filed on 1 August 2016, (“the wife’s trial affidavit”) Ms Pilcher describes a night in mid-2009 when Mr C called her in extreme distress about his family law proceedings. It is her evidence that Mr Pilcher heard the conversation between her and her son, and that he and she had agreed to use the (omitted) Credit Account to assist Mr C. She says that on that night Mr Pilcher said words to the effect of “We helped Ms K, we can help Mr C” and “I love your kids as my own”.
Ms Pilcher deposes that by the end of 2012, the (omitted) credit loan account stood at more than $100,000. It is her evidence that her husband “knew about this debt as he remained fully aware of what Mr C was going through to fight for custody of his children”.
She explains that during the parties’ separation between July and November 2010, she had rented a room from her former husband at (omitted) which was the address she gave the (omitted) Bank at that time. She asserts that as the (omitted) account was in the names of her and Mr Pilcher, both parties received statements at their respective addresses during that time. Ms Pilcher says that when the parties reconciled in November of that year, she had her mail redirected back to their home at Property A, before “subsequently” informing the (omitted) Bank that she had returned to that address.
It is her evidence that at the date of that separation, in July 2010, the (omitted) credit facility was in debt in the amount of about $17,500.
She then deposes as follows:
65.From February 2011, the (omitted) Credit Account continued to increase as Mr C’s legal proceedings became more protracted. By mid-2013, the debt on the (omitted) Credit Account had grown to $175,000. At all times, Mr Pilcher was fully aware of the level of debt as he was still in receipt of statements on a regular basis at Property A.
66.In mid-October 2013, the limit on the (omitted) Credit Account was increased to $225,000 with Mr Pilcher’s full knowledge and consent. The circumstances surrounding the extension of the loan facility were as follows:
(a)In or around late September 2013, I recall attending the (omitted) branch of the (omitted) Bank and speaking with MR K, bank manager (“Mr K”) who arranged the extension;
(b)Mr Pilcher did not attend the (omitted) Bank with me as he was at work;
(c)Mr K contacted Mr Pilcher by telephone to confirm his consent to the extension of the loan;
(d)Mr Pilcher provided his verbal consent and the extension was granted; and
(e)Mr Pilcher and I both signed the Application form and each of our signatures were verified by Mr K.
Ms Pilcher deposes that the additional $50,000 added to the (omitted) Credit limit “was applied to fund Mr C’s final Family Law hearing in March 2014.”
She annexes to her trial affidavit a copy of a letter from the (omitted) branch of the (omitted) Bank dated 3 October 2013, which confirms the increase in the credit limit of the (omitted) Credit from $175,000-$225,000 (“the extension letter”). That letter is addressed to “Ms Pilcher, (omitted)”, and it has an acceptance clause which purports to have been signed by both parties on 4 October 2013. I note that that date is almost three years after the parties reconciled after their first separation, and that Ms Pilcher had not yet changed her address back to the Property A address in the (omitted) Bank’s records.
She also annexes a copy of the original application for the (omitted) Credit dated 3 August 2008 (“the original (omitted) Credit application”), that document also containing what purports to be the signatures of both parties. The original (omitted) Credit application, however, has the words “signature verified” next to each party’s signature and that verification is initialled. No such verification is found on the extension letter.
The signatures of the husband on the two documents are similar, but not identical in that the signature on the extension letter is significantly more angled to the right.
Of course, I am not an expert in handwriting, but when I compare the signature of the husband on his multiple Affidavits filed in these proceedings with that on the original (omitted) Credit application, and with that on the extension letter, it is clear that the signature is so clearly angled to the right only on the extension letter.
At trial, considerable time was spent on this issue, and I note that neither party sought to have Mr K swear an affidavit or give evidence at trial.
Ms Pilcher’s evidence was that Mr C had initially been paying about $1000 per fortnight either directly to the (omitted) Credit account or to her, in which case she would deposit that amount to the (omitted) Credit account or, if she had already made that payment herself, she would retain it. She said that Mr C had stopped making payments of that magnitude when he stopped work in 2014 in order to look after his three children.
She said that he had stopped making any payments in December 2016 because, she said, Mr C could no longer afford to do so.
Given her own evidence that Mr Pilcher had agreed to advance monies to Mr C in 2009 on the condition that Mr C would repay the loan, it is surprising that there is no evidence of any conversation about that circumstance between either Mr C and Mr Pilcher, or Mr and Ms Pilcher, in 2014 or at any time subsequently.
Ms Pilcher’s evidence at trial was that Mr C had obtained the sum of about $100,000 in early 2016 from his father[5], but that he had not paid any of that money into the (omitted) Credit account.
[5] I note that in giving his evidence, Mr C stated that he had received about $150,000 from his father in early 2016. It was his evidence that at the time of trial, that is in March 2017, none of those monies remained.
Her evidence in relation to whether she had asked Mr C to make a lump sum payment to the (omitted) Credit account upon receipt of those monies was inconsistent and somewhat evasive. On one hand she said that while such a conversation had taken place, she could not remember the exact substance, or the timing or circumstances of that conversation. At the same time, Ms Pilcher said that Mr C had told her that he would advise her of his ongoing legal expenses so that she would know how much he had left over from the money given to him by his father. Later, Ms Pilcher said that Mr C was giving her updates about his legal fees throughout 2016.
It was Ms Pilcher’s evidence that Mr Pilcher was lying when he said he had not received bank statements in relation to the (omitted) Credit or the credit card, and while she conceded that the credit card was in her sole name, she said it had been her practice to leave her credit card statements on the kitchen bench for the husband to see.
In relation to the (omitted) Credit statements, Ms Pilcher said she did not know whether Mr Pilcher had online access to those statements prior to 2013, but she denied that she had told him that the (omitted) credit statement was “a mistake” when he discovered its balance in 2016.
She further denied Mr Pilcher’s evidence that she had told him that she had not informed him of the extent of the (omitted) Credit debt because she knew that he would not agree to it.
It was her evidence that Mr Pilcher had told her that he loved her children as his own, and that he had been very happy to assist Mr C in the same way as the parties had previously assisted Ms K.
She could not explain why Mr C had been making payments to the (omitted) credit account if the monies had not been advanced as a loan, saying only that he had “felt obligated”.
She said that the arrangement had been made between Mr C and Mr Pilcher during the period of the parties’ separation in 2010, although she could not say exactly when. She said that the husband had told her, after they had reconciled, that he respected Mr C and that if Mr C could not repay the monies, the parties would carry the debt. I note that that evidence appears to contradict her previous evidence about Mr Pilcher’s view of Mr C’s repayment of the monies.
Ms Pilcher adamantly denied that the reason Mr C had been making payments either directly to the (omitted) credit account or to her between 2009 and 2016 was that it was she who had given him the money, and that the whole process had been a secret from Mr Pilcher.
She could not explain why it had not been Mr Pilcher himself who had been making the (omitted) credit repayments or receiving monies from Mr C if he had known about the advancement of large sums of monies to Mr C and the arrangement was between him and Mr C.
Under further cross-examination, and for the first time in these proceedings, Ms Pilcher admitted that Mr C had been involved in a second set of family law proceedings in 2014 which had cost a further $140,000. She could not explain why she had not mentioned in her trial affidavit either that fact, or the payment from Mr C’s father, saying only that her affidavit was based on the $225,000 Mr C (then) owed for his first family law proceedings.
I note that in early 2016, when Mr C is said to have received $150,000 from his father, these proceedings were well and truly on foot, and Ms Pilcher can have been in no two minds as to the husband’s position on the (omitted) credit issue.
Under re-examination, Ms Pilcher said that Mr Pilcher had never told her during the marriage that he had thought the (omitted) debt was too high or that she could not withdraw further monies to pay for Mr C’s legal fees.
She said she had told Mr Pilcher that Mr C had a final hearing in March 2014 and that he needed an extra $50,000 to pay for that hearing. It was her evidence that Mr Pilcher had said nothing at all about that fact and that he had expressed no concerns in relation to the amount. She said further that she knew at that time that Mr C would not be able to repay the debt, and claimed that Mr Pilcher knew that too. She said that Mr C was working only on two half-days per week at that time.
She said that it was she who had approached the bank in order to extend the (omitted) credit limit, that she had taken the extension application home, discussed it with Mr Pilcher, told him that it was for an extension of $50,000, and that he had signed the application. She adamantly denied that she had forged his signature on that document and said that she had seen him sign it.
She said that the (omitted) credit statements were sent to the parties separately every three months and that she had seen Mr Pilcher looking at those statements, which had been either on the kitchen bench or in a filing cabinet.
Also under re-examination, Ms Pilcher said that the money Mr C had received in early 2016 was part of an arrangement she had made with Mr C’s father at the time of their divorce. That arrangement was that Mr C would live in the (omitted) address until it was sold, and that at that time, each of the children would receive one-eighth of its sale price. It was Ms Pilcher’s evidence that she had received one-eighth of the property’s value as part of her property settlement with Mr C’s father.
She said that she had discussed those circumstances with Mr Pilcher and that while Mr Pilcher might not have known exactly how much Mr C would receive, or when, he was aware of all other details of the arrangement. However, she had not discussed the situation with Mr Pilcher at the time of the sale of the (omitted) property because she and Mr Pilcher had been separated at that time.
As already stated, both Mr C and Ms K gave evidence at trial and were cross-examined.
Mr C gave his evidence over all three days of the trial because he did not have with him on the first day any bank statements evidencing his expenditure of the monies advanced to him from the parties’ (omitted) credit account, and because, after receiving documents from Mr C after hours on the second day, counsel for the husband required him for cross-examination on the third day about those documents.
On the first day, Mr C’s evidence was that he had telephoned his mother in a “hysterical” state and begging her to help him in late 2009 after his former partner had left his home with their children.
He said that he visited the parties at their home that evening, that Mr Pilcher had told him that he was “like family” and he and Ms Pilcher would help him fund his family law case. He said there was no discussion on that night about him repaying any of the monies would be advanced to him.
I note that when Mr C gave evidence on the first day of trial, he denied that the monies advanced to him from the (omitted) credit account were a loan at all, despite having made regular repayments to that account over several years, and he further denied that he had had any discussion with his mother about paying those monies back when he had received the $150,000 from his father, thus contradicting her evidence.
He then said that at a later date his mother had told him to repay the monies when he could afford to do so, and that when he had been working she had told him that as he was earning he should pay $800-$900 per fortnight.
It was his evidence under cross-examination that he had paid those monies “to pay off what Mum and Mr Pilcher incurred on the solicitors”, and he was “pretty sure” that the monies were paid by Ms Pilcher directly to his solicitors.
Under re-examination on the first day of trial, Mr C said that his first account from his solicitors, in late 2009, was for about $20,000 and that he had spoken to his mother about that account and told her and Mr Pilcher which solicitors he had instructed. He said that his mother had “a lot to do with the solicitors” and that Mr Pilcher had never indicated to him that he and Ms Pilcher could not keep funding his legal proceedings.
It was Mr C’s evidence that he was not able to repay any of the monies advanced to him, which he understood to be between $250,000 and $300,000, but that he hoped to find work which would enable him to do so in the future. He said he did not know that the money was coming from a (omitted) bank credit account at first and was just grateful for the support.
He stated that he did not believe that Mr Pilcher had been unaware of the extent to which the parties had been funding his legal fees because “Mum would have told him”. It was his evidence that he had never heard his mother speak to Mr Pilcher about that funding and that he had formed the impression that Mr Pilcher had not been very interested in his family law proceedings as time went on.
On the second day, he produced statements from his (omitted) Bank account showing various transactions between 21 December 2015 and 28 February 2017.
Apart from usual deposits from Centrelink and living expenses the statements show a deposit to that account of $148,125 on 22 January 2016. That appears to be the money Mr C received from his father.
At first, Mr C denied that he had received almost $150,000 from his father in January 2016, saying that the amount had been between $120,000 and $128,000. When shown the bank statement deposit of $148,125 on 22 January 2016, Mr C stated that his aunt had given him $10,000 at about that time. He could not explain why the deposit of $148,125 was entered in the bank statement as a single cheque deposit.
Mr C could provide no corroboration for his assertion that he had received only between $120,000 and $128,000 from his father, and on the basis of the bank statement evidence, I find that the sum he received from his father in January 2016 was $148,125.
It was Mr C’s evidence that most of the major withdrawals from this account were for lawyers’ fees. However, the statements show, for instance, “branch withdrawals” of $36,495 on 11 February 2016, $24,310 on 16 February 2016, and a telephone transfer of $78,000 to a bank account ending in the numbers (omitted) on 21 February 2016.
It was Mr C’s evidence at trial that the cash sums, withdrawn from the Property A branch of the (omitted) Bank, were then carried into the city in sums of $12,000 to $14,000 and deposited to the account of his solicitors, Aitken Partners. He said that the rest of the cash withdrawals, some $32,000, were either given to Ms K so that she could pay his solicitors, or deposited to make repayments on a loan he says he had taken out with the (omitted) Bank in order to fund his court proceedings.
It does not appear credible to me that a person would carry such large sums of money in cash through the streets of a modern city, but I suppose stranger things have happened, and no evidence has been adduced to contradict Mr C on that issue. He denied having spent that money on himself.
It is also difficult to believe that Mr C paid monies in large amounts to his sister so that she could pay his lawyers instead of paying them directly himself. There does not seem to be any evidence before the Court to explain that practice.
At first, Mr C said that the $78,000 transaction on 21 February 2016 was a transfer into an account in Ms K’s name, but then said he had transferred the money to his own (omitted) bank account. He had not brought to court statements from that account, but it was his evidence that he had then transferred those monies back to his everyday account in smaller sums over a period of time. He said that he was paying his mother $800 per month in cash for three or four months at about that time.
Mr C denied spending those monies on himself and on his family’s everyday expenses, and when it was suggested to him that the statements of his (omitted) account and every day savings accounts would not show $800 withdrawals, he said that he would put amounts of between $200 and $600 on his mother’s kitchen counter when he visited her.
Mr C said that he was “90% certain” that the $36,495 withdrawn on 11 February 2016 was applied to his (omitted) Bank loan. However he had not brought his loan statements to court either, saying only that he had not been asked to do so.
He said that the $24,310 withdrawn on 16 February 2016 was withdrawn in cash and paid to Ms K so that she could pay his solicitors. He could not explain why he had not simply paid the money directly to the lawyers.
Mr C’s explanations for other withdrawals from his (omitted) account in sums ranging from a few thousand dollars to $33,000 were essentially that they had been either applied to his lawyers’ accounts or given to Ms K for that purpose. He could not remember making a branch withdrawal on 29 April 2016 of $32,135.
It was his evidence that he had paid Ms K about $10,000 for a family holiday to (country omitted) in mid-2016, and that he had paid his mother approximately a further $6000 for that purpose.
On the third day, Mr C was cross-examined about the bank statements and lawyers’ accounts he had provided to counsel the previous day and evening.
That evidence revealed that his total legal fees for his Family Court of Australia proceedings were about $386,000.
I am very sceptical about Mr C’s evidence about the monies advanced to him. One does not deposit tens of thousands of dollars to a loan account belonging to someone else if one is not obliged to do so, unless one has significant money to spare, which is clearly not the case here. It is the evidence of both his mother and Mr Pilcher that the monies for Mr C’s legal fees were advanced by way of a loan, and I find that to have been the case.
I found Mr C an entirely unsatisfactory witness. His evidence was presented in a quite chaotic manner, changing multiple times under cross-examination, and he appeared to be very eager to provide great detail about matters not relevant to the proceedings.
I do not accept his evidence that the advancement of monies to him by the parties to these proceedings was not a loan, and I am sceptical in relation to much of his evidence about how those monies were applied. It is clear that large sums of money were applied to his legal fees but he simply could not account for the entire amounts advanced to him as loans by the parties, the (omitted) Bank, his aunt and his sister, or the gift from his father. His evidence was that some of that total sum was applied to the purchase of a motor vehicle and to the family’s holiday to (country omitted) in mid-2016, and of course, some would have been applied to his family’s usual living expenses, but there are still large amounts of money unaccounted for.
However, exactly how Mr C spent the $225,000 loan advanced to him by the parties is not the point, as the question before the Court is whether Mr Pilcher knew about the extent of the borrowings and whether he is liable for the resulting debt.
Ms K’s evidence in relation to the monies advanced to Mr C was that she had received a call from Mr C after he had spoken to their mother in late 2009, and that Mr C had been “suicidal” about the prospect of family law proceedings which he knew would be very expensive.
She said that there had been several phone calls between her and her mother about Mr C’s predicament on that day, and that she and her mother had been trying to console Mr C. It was her evidence that the telephone had been in speakerphone mode during those conversations, and that she could hear Mr Pilcher in the background as she and Ms Pilcher spoke about the parties assisting Mr C with his family law costs. Ms K said that in a three-way conversation late on that night, Ms Pilcher had told her that the parties would help Mr C because they had assisted her, but that nothing had been decided in concrete at that time. It was Ms K’s view at the end of that conversation that “Mum and Mr Pilcher had it covered”.
When asked how she knew that the decision to advance monies to Mr C had been a joint decision, Ms K said that it had been common knowledge in the family, that Mr Pilcher’s daughter Ms W had mentioned it once, and that it was talked about “in open discussion”.
Ms K denied the suggestion put to her by counsel for the husband that she was supporting her mother’s case because she was a loyal daughter, saying that she would not lie to do so. She also denied that the husband had never told her that he knew about the drawdown on the (omitted) account for Mr C, and that he had never told her that it had been a joint decision between him and his wife to do so.
While Ms K conceded that the (omitted) account had been established in order to help her with bridging finance for her family home, she was reluctant to ascribe any contribution to renovations to that property to Mr Pilcher.
I gained the impression throughout her evidence that she answered questions very carefully, and that she wished to support her mother, which is, of course, understandable in the circumstances.
However, towards the end of her cross-examination Ms K was forced to concede that she did not know that Mr Pilcher had been paying her mother’s credit card during the marriage, and that she was not privy to the parties’ financial affairs - for instance she was unaware whether they had had joint or personal bank accounts.
She was very clear that she believed her mother’s version of all events.
Ms K impressed as a truthful witness in general, although she appeared to be very much inclined to present her evidence in the most positive possible light for her mother’s case.
When I put the evidence of all three witnesses on behalf the wife together, I find it confusing and contradictory. As Mr Robinson for the husband said in his submissions:
(The events leading up to the extension of the (omitted) Credit Account to assist Mr C are) something which has been the subject, I will urge upon your Honour, of three different versions from the three people from the wife’s camp.
We have the wife, who says that it was a discussion had at the house after a traumatic phone call from Mr C. We have the daughter’s version, which says, “Actually, there’s a whole lot of phone calls that night back and forth and Mr Pilcher is on speakerphone”, something the wife didn’t say when she was in the witness box, she said after the phone call finished, she turned to him and spoke to him. And then you’ve got Mr C’s version, which is he was around there talking to them. Now, I say it’s no coincidence that they can’t get their story straight, the reality is it never happened.
On balance, after seeing both parties and the wife’s two adult children under cross-examination in the witness box, and for the reasons of inconsistency in evidence, contradiction of previous evidence, and the wife’s and Mr C’s propensity to change their evidence when it was challenged, where the evidence of the husband conflicts with that of the wife and her children, in general I prefer the evidence of the husband.
I find that while Mr Pilcher was aware of the initial (omitted) limit, and he may even have agreed that the parties would use the (omitted) account to assist Mr C, he was not aware of the full extent of the drawdowns used for Mr C’s family law proceedings, and I cannot be satisfied on the balance of probabilities that he knowingly consented to the extension of that loan in October 2013 to $225,000.
What is not in dispute is that all of those monies were applied to what might be called the wife’s side of the ledger and that Mr Pilcher gained no benefit from that application.
In those circumstances, I find that Ms Pilcher made a very significant and detrimental contribution to the (omitted) debt, and her contribution to it was very much greater than that of Mr Pilcher.
The wife’s Centrelink debt
Under cross-examination from the husband’s counsel, Ms Pilcher conceded that she had lied to Centrelink, in that she had been receiving fortnightly Disability Support Pension payments at the single rate, and rental assistance payments to which she was not entitled while she was living with Mr Pilcher from November 2010 to August 2015 (although she initially stated that it had been until January 2015).
It was her evidence that she had known that she was acting fraudulently in accepting those payments, and that she had given Centrelink the (omitted) address as her own for that purpose. She said that she had not updated any of her details with Centrelink after November 2010. That is, she had not advised Centrelink that she had returned to the Property A property and to the marriage in that month.
Ms Pilcher’s evidence about the information she had given to Centrelink at various times was, again evasive and inconsistent, although she did say that she may have an obligation to repay benefits for which she had been ineligible in the sum of about $100,000. She provided no documents to support that statement, but if what she told this court about her fraudulent acceptance of benefits is true, it is likely that such an obligation does exist.
While Ms Pilcher did not accuse the husband of being directly complicit in her fraud against Centrelink, she did state that he was fully aware of her payments because they had been contributed to the parties’ living expenses.
Ms Pilcher stated at first that none of her Centrelink monies had been paid to the (omitted), but when shown bank statements which showed the regular fortnightly payments of $800 being paid to the (omitted) account, and having conceded that her fortnightly benefit payments amounted to $800, she was forced to admit that there was no record of her having contributed to the parties’ living expenses from her Centrelink payments.
Nevertheless, it was her evidence that Mr C had paid her $800 per fortnight in cash, and it was those monies, she said, which had been deposited into the (omitted) account. When asked, she could not provide copies of any receipts given to Mr C for his cash payments.
She then stated that the parties had bought most everyday items such as food, fuel, car expenses, medical expenses and the like by way of her credit card, and she claimed that while the husband had paid the credit card debts from his own money, some of the credit card deposits had come from the cash given to her by Mr C.
When shown her credit card statements, Mr Pilcher acknowledged that she could not find any cash payments which could be attributed to Mr C.
Yet again, I found her evidence on the issue of the Centrelink debt evasive, inconsistent, contradictory and entirely unsatisfactory. Her admission to having defrauded Centrelink knowingly and deliberately puts her credibility on other issues into question.
It is likely that the husband knew that Ms Pilcher was receiving Centrelink payments, but I cannot be satisfied on the balance of probabilities that he was aware of the fraud involved in those payments. In addition, the evidence before the court indicates that little if any of those monies were applied to joint living expenses or to the parties’ property.
I therefore consider the accumulation of the Centrelink debt to have been a further “negative contribution” by the wife to the parties’ property.
Lump sum payments the wife received from the Transport Accident Commission
In relation to lump sums she received from the Transport Accident Commission (“TAC”) as a result of her motor vehicle accident, it was Ms Pilcher’s evidence that those monies had been deposited into her personal account. While she denied that she had spent that money on herself, she was forced to concede that she had no proof of the expenditure of those monies being applied to joint expenses.
Ms Pilcher could not explain why correspondence from the TAC and a referral from her general practitioner were sent to her at the (omitted) address in 2012.
When she was asked about a five-week holiday she had taken to (country omitted) in (omitted) 2016 to visit her mother, Ms Pilcher said that the trip was organised by Mr C and Ms K, and that her fares were paid by Ms K.
However, when shown a statement for the bank account into which her Centrelink monies were paid, which contained a deposit from Mr C of $2000 in 2016, Ms Pilcher said that she might have paid for fares by credit card and been reimbursed by Mr C.
She could not say why there had been no mention of the holiday in her trial affidavit sworn on 1 August 2016, saying only that her lawyers had known about it.
She denied that she had had any conversation with Mr C about his finances at the time of the holiday despite him having received the sum of about $150,000 from his father earlier that year and him having debts of some $300,000.
Overall, I consider Ms Pilcher a most unsatisfactory witness. She presented as a woman who has serious physical afflictions (she has undergone multiple surgeries and was clearly under some physical stress at trial) but one whose evidence is less than entirely credible for all the reasons set out above.
I find that the contributions of the parties to their property during the relationship and marriage were not equal because of the wife’s significant “negative contribution”, and the lack of any evidence that Ms Pilcher applied her lump sum payments to joint expenses.
I assess the contributions of the parties to their property during the marriage 80% to the husband and 20% to the wife.
Post-separation contributions
Since separation in February 2013, Mr Pilcher has paid all mortgage instalments, and for the utilities related to the property, while the wife has had the benefit of living at the property rent and mortgage-free since August 2013.
Therefore I find that the husband’s post-separation contributions to the parties’ property have been considerably greater than those of the wife.
Overall, on the basis of the husband’s significantly greater initial and post-separation financial contributions, and the fact that I have found that the husband did not know all details about the (omitted) debt until after the parties separated, which I consider to have been a deliberate concealment on the part of the wife, and thus a “negative contribution” by her, I assess the parties’ contributions to their property overall at 80% from the husband and 20% from the wife.
(d) Should there be an adjustment to the contribution-based entitlements of the parties after a consideration of the matters set out in s.75(2) of the Family Law Act 1975 (Cth) (“the Act”)?
Section 75(2) of the Act sets out the factors the Court must take into consideration when making orders for the maintenance of a party to a marriage.
The inclusion of this exercise in property proceedings is required by s.79(4)(e) (see above).
Section 75(2) states that the court must consider the following matters:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In this case, Ms Pilcher deposes in her Affidavit sworn 20 and filed 22 May 2015 in relation to her health:
3. I am aged 57 years having been born in Melbourne on (omitted) 1958. I was involved in a serious motor vehicle accident in (omitted) 1998 and as a result suffered significant injuries. I have had 27 operations, various procedures, and have a number of other medical conditions including:
(a)Suffered permanent hearing loss and complete deafness in my right ear due to having a condition of Chronic Positional Vertigo due to a damaged balance nerve;
(b)Severe nausea;
(c)Debilitating cluster migraines;
(d)Depression from which I am medicated (sic);
(e)Chronic arthritis in my upper body and in particular my hands, arms, neck and shoulders; and
(f)I have been diagnosed with Glomerulonephritis since 1980 which is an incurable kidney condition.
It is her evidence that she has not been able to work since approximately 2009 and that she is in receipt of a Disability Support Pension of about $450 per week. She is now 59 years old. I accept that these circumstances have had and will continue to have a deleterious effect on her ability to earn income.
I note that it was the husband’s evidence that Ms Pilcher looks after her grandchildren on a regular basis, and engages in gardening, and it was therefore his view that she could find work if she chose.
There is a very large difference between babysitting children and doing a bit of gardening, and working for an employer. Further, I note that Ms Pilcher has been assessed as eligible for the Disability Support Pension in an era where eligibility for that benefit is notoriously difficult to establish and even more difficult to maintain.
Ms Pilcher’s presentation at Court was that of a woman who was clearly in physical pain and who suffers from vertigo to the extent that she was dry retching in the witness box.
I am satisfied that she does not have the capacity for work outside the home.
Nevertheless, the costs of her disability are somewhat ameliorated by the fact that the TAC pays her medical bills and for some house cleaning assistance, and will do so into the indefinite future. While that does not make up for an inability to work, it does mean that the direct costs of her injuries are not borne entirely by her.
Mr Pilcher was born on (omitted) 1953 and in therefore now 64 years old. He does not depose to any major health issues. He works on a casual basis but in essence is employed on most working days.
There are no children of the marriage, and neither party is obliged to support any other person.
It is not the duration of the marriage, but the injuries incurred as a result of her car accident in the year before the parties’ relationship began, that have affected the wife’s capacity to develop a career.
The husband has superannuation entitlements and the wife does not. However, the husband is approaching retirement age and, unless he sells the Property A property, he will be dependent on his superannuation for his future support.
The wife is in receipt of Centrelink benefits.
Both parties will need to support themselves after these proceedings are concluded. The husband is the only party in any position to retain the family home and Ms Pilcher will need to find alternate accommodation.
When I take all the matters set out in s.75(2) of the Act into account, I find it appropriate to adjust the contribution-based entitlements of the parties 10% in favour of the wife.
(e) In light of the above findings, what Orders should be made to effect a just and equitable division of property between the parties?
As I have found that the parties’ contributions to their property were in the ratio of 80% to 20% in favour of the husband, a 10% adjustment to the wife means that she should receive 30% of the parties’ property overall, while Mr Pilcher should receive 70%.
The net value of that property, as far as the Court is able to discern, is $1,179,470 ($1,521,782 - $342,313).
The husband also has superannuation entitlements of $238,748, while the wife has none.
The husband’s superannuation entitlements have been accrued over some forty years of work, while the relationship and marriage were of a total 16 years’ duration.
It is not appropriate therefore, to equalise the parties’ superannuation entitlements by splitting half of the husband’s entitlements to a superannuation account established by the wife.
I consider that the appropriate percentage of the parties’ joint superannuation entitlements to provide the wife with some security in retirement would be 40%, and I will make orders to effect that split.
That leaves the division of the net non-superannuation assets of $1,179,470. I have already found that the wife should receive 30% of that property.
That means she should receive property worth $353,841.
The husband should retain 70% of $1,179,470, or $825,629.
The wife has already received a partial property settlement of $59,269 and the husband has received $29,269.
That means that in order to retain the Property A property, the husband needs to make a payment to the wife of $380,627, and I will make orders to that effect. He will also need to discharge the mortgage over the Property A property.
Ms Pilcher will retain her car, her credit card debt and responsibility for any debt she owes to Centrelink, as well as the payment from the husband.
In table form, the settlement may be set out thus:
| Husband | Wife | Value |
| Property A | $1,350,000 | |
| Honda (omitted) motor vehicle | $20,000 | |
| Redundancy payout remainder | $42,949 | |
| (omitted) Bank account | $295E | |
| Amounts paid to the husband during the proceedings | $29,269 | |
| Total assets husband | $1,442,513 | |
| Liabilities - husband | ||
| (omitted) Credit account secured by mortgage over the Property A property | $229,000 | |
| (omitted) Bank credit card | $7258 | |
| Payment to wife | $380,627 | |
| Total liabilities – husband | $616,885 | |
| Nett settlement | $825,628 | |
| Assets – Wife | Amounts paid to the wife during the proceedings | $59,269 |
| Payment from husband | $380,627 | |
| Holden (omitted) motor vehicle | $20,000 | |
| Total assets - wife | $459,896 | |
| Liabilities - wife | (omitted) Bank credit card | $6055 |
| Centrelink debt | $100,000 | |
| Total liabilities - wife | $106,055 | |
| Nett settlement | $353,841 | |
| Superannuation | ||
| Nett settlement – husband | 60% | $143,249 |
| Nett settlement – wife | 40% | $95,499 |
| Total Superannuation entitlements | $238,748 | |
| Net assets including superannuation entitlements | $1,418,218 | |
| Nett settlement including superannuation -wife | $95,499 + $353,841 | $449,340 |
| Nett settlement including superannuation – husband | $143,249 + $825,628 | $968,877 |
| Total % settlement including superannuation – wife | $449,340/$1,418,218 | 31.7% |
| Total % settlement including superannuation - husband | $968,877/$1,418,218 | 68.3% |
Conclusion
These have been extraordinarily protracted proceedings.
The wife filed her initiating application in May 2015, the final hearing was held in March 2017, and final orders are now being made in March 2018.
It is to be hoped that the parties will now be able to plan for the future with some certainty and to get on with their lives free from the shadow of family law litigation.
I certify that the preceding two hundred and forty six (246) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 16 March 2018
Key Legal Topics
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Family Law
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Civil Procedure
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Equity & Trusts
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Injunction
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Jurisdiction
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Procedural Fairness
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