Rabkin and Edsall (No 4)
[2018] FamCA 810
•8 October 2018
FAMILY COURT OF AUSTRALIA
| RABKIN & EDSALL (NO. 4) | [2018] FamCA 810 |
| FAMILY LAW – PROPERTY SETTLEMENT – just and equitable – de facto relationship – where the cohabitation is about five years duration – where there is one child of the relationship – where it is found that the parties did not make any contribution to the real property owned by the other at the commencement of their cohabitation – assessment of contributions. |
| Family Law Act 1975 (Cth) |
| In the Marriage of Clauson (1995) FLC 92-595 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Hickey (2003) FLC 93-143 In the Marriage of Lee Steere (1985) FLC 91-626 In the Marriage of Pastrikos (1980) FLC 90-897 In the Marriage of Waters and Jurek (1995) FLC 92-635 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Mr Rabkin |
| RESPONDENT: | Ms Edsall |
| FILE NUMBER: | BRC | 5702 | of | 2013 |
| DATE DELIVERED: | 8 October 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Hogan J |
| HEARING DATE: | 1 June 2018; written submissions on behalf of the Respondent filed on 14 June 2018; written submissions filed on behalf of the Applicant on 19 June 2018 |
REPRESENTATION
| THE APPLICANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Ms Oakley |
| SOLICITOR FOR THE RESPONDENT: | CNG Law |
Orders
IT IS ORDERED BY WAY OF FINAL ORDER THAT
The Respondent, Ms Edsall, is entitled to be paid the proceeds of the two investment accounts held by solicitors on behalf of the parties, being:
(a)the funds held in the I Lawyers Term Deposit account on behalf of the parties in the amount of $144,803.33 and whatever interest may have accrued in this account since 15 March 2018; and
(b)the funds held in the JL Lawyers Term Deposit account on behalf of the parties in the amount of $206,360.87 and whatever interest may have accrued in this account since 9 April 2018.
By this order, I Lawyers is hereby authorised:
(a)to pay on behalf of Ms Edsall: the sum of $2,834.00 to Mr Rabkin by way of direct transfer into an account nominated by him in writing; and
(b)to pay to Ms Edsall: the balance of the funds standing in the investment account maintained by that firm on behalf of the parties and to cause the transfer of such funds to a bank account nominated in writing by Ms Edsall.
By this order, JL Lawyers is hereby authorised to pay to Ms Edsall the balance of the funds standing in the investment account maintained by that firm on behalf of the parties and to cause the transfer of such funds to a bank account nominated in writing by Ms Edsall.
Within 28 days of the date of this order Ms Edsall do all that is necessary to transfer ownership of the 4WD motor vehicle to the Applicant, Mr Rabkin, and he shall thereafter be solely entitled to ownership and possession of this vehicle.
Unless otherwise specified in this order, each of Mr Rabkin and Ms Edsall be solely entitled, to the exclusion of the other, to all other property and chattels of any nature and kind owned by each of them and in the possession of each of them as of the date of this order and, for this purpose:
(a)bank accounts are deemed to be in the possession of the person whose name appears on the bank records; and
(b) insurance policies are deemed to be in the possession of the payer; and
(c)superannuation entitlements are deemed to be in the possession of the person who is named on the account.
Each party shall be solely responsible for and will indemnify the other and keep the other indemnified in respect of any debts in that person’s sole name as at the time of the making of this order.
Each party shall forthwith relinquish any interest in any company and/or business in the control and/or the name of the other party and shall indemnify each other in relation to all debts and liabilities in relation to any claims against such company and/or business.
In the event that it is necessary for either party to sign any document, transfer or instrument of any kind in order to give effect to the terms of this order and that party fails to sign such document within 14 days of a written request to do so, then, upon lodgement of such document and the filing of an affidavit of a solicitor on behalf of the requesting party as to the said neglect or refusal, a Registrar of the Court is appointed pursuant to s 106A(1) of the Family Law Act 1975 (Cth) to sign any such document in lieu of the non-signing party.
The costs of and incidental to a request and production of documents to the Registrar, as provided for in paragraph (8), shall be borne by the defaulting party without further order and may be fixed by the Registrar or Deputy Registrar and, thereafter, shall be recoverable from the defaulting party by the other party as a debt.
All extant applications be otherwise dismissed and removed from the list of cases awaiting finalisation.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Rabkin & Edsall has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 5702 of 2013
| Mr Rabkin |
Applicant
And
| Ms Edsall |
Respondent
REASONS FOR JUDGMENT
Mr Rabkin, a tradesman, was born in 1967 and is currently 51 years of age. Ms Edsall, a health professional, was born in 1973 and is currently 45 years of age. They commenced cohabitation in about March[1]/July[2] 2008 and separated in June 2013. Thus, theirs was a cohabitation of approximately five years’ duration.
[1] On Mr Rabkin’s account.
[2] On Ms Edsall’s account.
They have one child together: K (the child), who was born in 2010. It is uncontentious that Ms Edsall owned a business, KM Pty Ltd (KM) on Suburb LN at the commencement of cohabitation, that she worked there until its sale in 2011 and, thereafter, continued to work as a health professional throughout the existence of the de facto relationship and that she was the “main income earner” during the same; it is also uncontentious that Mr Rabkin ceased engaging in any significant paid employment after the child was born.
On 13 July 2018, I made orders which finalised the parenting proceeding between the parties. Such orders permitted Ms Edsall to relocate the child to live with her in the United Kingdom.
What remains to be resolved is the property settlement proceedings.
The parties’ voluntary separation some years ago has meant that they no longer enjoy the common use of property in which they have legal interests and any equitable interests which might have been ‘acquired’ during their cohabitation. Such separation has also brought to an end any “assumption that any adjustment to those interests could be effected consensually as needed or desired”.[3]
[3] Stanford v Stanford (2012) 247 CLR 108, [42].
Both parties contend and I accept that, in all the circumstances, it is just and equitable within the meaning of s 90SM(3) of the Family Law Act 1975 (Cth) (“the Act”) that, pursuant to s 90SM(1) of the Act, orders altering the interests in property owned by each of them are made.[4]
[4] Ibid at [42].
Whilst agreeing that it is just and equitable that orders altering their interests in property are made, the parties are in dispute as to the terms of the orders which are appropriate to reflect properly those matters which, by s 90SM(4) of the Act, must be considered.
The competing proposals
Ms Edsall
According to the written submissions filed on her behalf on 14 June 2018, Ms Edsall advances that it is just and equitable that orders are made to ensure that she receive the following property:
a)the proceeds of the two investment accounts held by solicitors on behalf of the parties, being $144,803.33 (as at 15 March 2018[5]) held in the I Lawyers Term Deposit account and $206,360.87 (matured as at 9 April 2018[6]) in the JL Lawyers Term Deposit account – that is, a total of $351,164.20[7]; and
b)the 4WD motor vehicle (valued at $51,000.00 as at January 2017).
[5] Supplemented by any interest which has accrued since then.
[6] Supplemented by any interest which has accrued since then.
[7] Supplemented by any interest which has accrued.
She also proposes that Mr Rabkin be ordered to pay her $2,475.00, being half of the $4,950.00 mediation fee she has already paid in full.
Ms Edsall’s proposal also includes that, unless otherwise specified, each party be solely entitled, to the exclusion of the other, to all other property and chattels of any kind, in the ownership and/or possession of each party: this, obviously, includes any amounts in bank accounts, insurance policies and superannuation entitlements.
An order in these terms would see Ms Edsall retain real property located at H Street, Suburb E (in which the parties and the child lived during their cohabitation and in which she remained living after separation) in respect of which she is the registered proprietor. It would see her retain MO Pty Ltd (the company through which she operated her business and in respect of which she is the sole shareholder).[8] Ms Edsall also proposes that she retain her “right, title and interest” in the Ms Edsall Discretionary Trust. MO Pty Ltd is the corporate trustee of this Trust, which operates Ms Edsall’s business (KM). Ms Edsall’s income emanates from her work as a health professional and is received by her via the Trust.
[8] Affidavit of Ms Edsall filed 8 April 2015 at [24].
Ms Edsall also proposes that Mr Rabkin sign all necessary documents to resign from, or surrender, any roles he may have in MO Pty Ltd and the Ms Edsall Discretionary Trust. She advances that it is just and equitable that each party be solely responsible for, and will indemnify the other in respect of, any debts in that party’s sole name and that each party relinquish any interest in any company and/or business in the control and/or name of the other party and indemnify the other in relation to all debts and liabilities in relation to any past, present or future debts or claims against such company and/or business.
Mr Rabkin
According to the written submissions he filed on 19 June 2018, Mr Rabkin seeks that Ms Edsall is ordered to provide to him those items particularised in Annexure 5 to his affidavit[9] filed 8 February 2017. The items he describes under a heading “items brought into the relationship not included in financial records as a contribution I would like back”[10] have been valued at $2,645.00 in total – he says that, of these chattels, items valued collectively at $1,190.00 are already in his possession; he also seeks that Ms Edsall provide him with other specified chattels[11] which have been valued at $9,020.00 in total. Included within the last category is a barbeque, although I note that the valuer who valued all of these chattels recorded that, as it is built-in at the H Street property, he considered it part of the fixtures of the same and, therefore, did not proceed to value it. Given this, I am not persuaded, whatever other orders are made, that Mr Rabkin should be permitted to remove it from the H Street property.
[9] Sworn/affirmed 2 February 2017.
[10] Being a number of pieces of tools, furniture and electrical goods itemized by Mr Rabkin.
[11] As itemised by Mr Rabkin.
Mr Rabkin also seeks to retain certain goods, vehicles and equipment[12] previously valued by All Asset Appraisals. As I appreciate the evidence, these are valued at $5,175.00. Mr Rabkin also seeks to receive the 4WD motor vehicle referred to above.
[12] As itemised by Mr Rabkin.
His position is that, if the Court decides Ms Edsall should keep the H Street property, he should be paid the funds currently held in trust on behalf of the parties: that is, he should receive $351,164.20.[13]
[13] Supplemented by any interest which has accrued.
Mr Rabkin’s previous position[14] was that there should be an equal division of the property of the parties (if the issue of the child’s future parenting regime was determined “equally or in his favour”); he also previously advanced that Ms Edsall should be ordered to pay his costs on an indemnity basis or, alternatively, pursuant to the scale of costs prescribed by the Family Law Rules2004 (Cth).
Approach to be adopted in determining those orders which are just and equitable in the circumstances of this case
[14] At February 2017.
The “usual” manner in which the Court is to approach proceedings such as these is well known.[15] However, this is not the only approach. Given that the ultimate requirement is to make orders which are just and equitable in the circumstances of each case, the Court may adopt either a “global” or an “asset by asset” approach.
[15] See, for example: In the Marriage of Pastrikos (1980) FLC 90-897; In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Waters and Jurek (1995) FLC 92-635; In the Marriage of Clauson (1995) FLC 92-595, In the Marriage of Hickey (2003) FLC 93-143 and Stanford v Stanford (2012) 247 CLR 108.
In this case, I consider the approach most likely to afford me the opportunity to make orders which are just and equitable in the circumstances of this case, which involves parties whose cohabitation was of a duration of about five years, is to identify the property each party owned at the commencement of their cohabitation; to analyse the use to which such property was put during the cohabitation; to consider whether each party made any contributions of any sort to the property each owned when they started to live together; to consider the contributions (of whatever sort) made by each party to any property acquired during their cohabitation and any contributions to the same made after their separation.[16]
[16] That is, to adopt something akin to a ‘number of pools’ approach.
Consideration of the various non-financial contributions will occur in the context of discussion about specific property and will, of course, be supplemented by a consideration of the overall contributions each party made to the welfare of the family and in the context of homemaker.
I have arrived at this conclusion because of the manner in which the parties themselves approached their dealings with property each owned at the commencement of their five year cohabitation, the manner in which they approached the acquisition of the property acquired during their cohabitation and the fact that some of the property the subject of consideration in these proceedings was acquired after the separation, but had its source in the sale proceeds of property owned at the commencement of cohabitation.
The property of each party at the commencement of cohabitation, the use to which the same was put and whether either party made any contribution to the property owned by the other at the start of their cohabitation
When the parties commenced cohabitation in either March or July 2008, Ms Edsall was working as a health professional in her own business (“KM”). I do not know the extent of Ms Edsall’s income at this time, but note that she was working fulltime in the business, which she sold in about May 2011 for $540,000.00.
When the parties commenced cohabitation in either March or July 2008, Mr Rabkin was working as a tradesman (via “NP Pty Ltd”), earning approximately $50,000.00 per annum.
Both worked in their respective occupations on a full-time basis until the child was born in 2010.
Ms Edsall’s property
Mr Rabkin does not really dispute the property owned by Ms Edsall at the start of their cohabitation; any dispute between the parties is about the value of such property at that time. The differences in this respect are as outlined immediately below.
Property
Ms Edsall’s value
Mr Rabkin’s value
B Street, Suburb C
$500,000.00
E$443,000.00
RT Bank home loan #21 (B Street) as at 5 July 2008
($154,442.39)
$345,557.61
($155,121.25)
$287,878.75
D Street, Suburb C
$635,000.00[17]
E$635,000.00
RT Bank home loan #39 (D Street) as at August 2008
($639,274.51)
($4,274.51)
$635,000.00
NIL
Antiques
$10,000.00
E$10,000.00
Motor vehicle 1
unknown
MO Pty Ltd (the corporate Trustee) and the Ms Edsall Discretionary Trust
Not specified
unknown
RT Bank line of credit #16
($42,514.89)
as at 9 July 2008
($45,531.78)
RT Bank reverse charges account #22 as at 8 June 2008
$1,180.21
ANZ Access a/c #24
Negligible
OQ bank account #44
Negligible
3 x Building society accounts
Negligible
Account #00 as at 26/03/08
($54,957.94)
Account #30 as at 18/03/08
($38,559.37)
TOTAL
$309,948.42.
$158,829.66
[17] This was the price Ms Edsall paid to purchase the property on 7 January 2008: either two months before cohabitation commenced (according to Mr Rabkin) or about five months before cohabitation commenced (according to Ms Edsall).
I accept Ms Edsall’s evidence to the effect that a valuation of the B Street property she obtained in January 2008 valued the property at approximately $500,000.00. In the absence of any expert evidence relied upon by Mr Rabkin as providing the basis for his estimated value, I prefer and accept the value suggested by Ms Edsall.
I suspect that the differences in the quantum of each of the home loan accounts and the RT Bank line of credit account advanced by each party may simply reflect the different date/s upon which each obtained the figure each advanced. I consider the differences immaterial in the overall determination of those orders which are just and equitable in the circumstances of the case.
As Mr Rabkin’s assertions about the liabilities recorded in the last two rows of the table above are unsupported by corroborating documents and I remain unclear about the basis for his assertion that Ms Edsall was indebted in such amounts at that time and I cannot discount the possibility that the indebtedness was in some way related to Ms Edsall’s business (operated through MO Pty Ltd and/or the Ms Edsall Discretionary Trust, for which no value has been attributed), I intend to proceed on the basis of my acceptance of Ms Edsall’s evidence that, when the parties commenced their cohabitation, she owned the property she particularises at the value she asserts and had the liabilities she asserts.
It is also relevant to note that, whilst MO Pty Ltd and the Ms Edsall Discretionary Trust (through which Ms Edsall operated her practice or business under the trading name of “KM”) were not prescribed a value as at the date of cohabitation by either party, that practice or business was sold in May 2011 for $540,000.00 and accorded to Ms Edsall, on her account, a nett profit of $495,860.67. It follows, it seems to me, that it is more likely than not that the practice or business had some value when the parties commenced their cohabitation. However, there is simply no evidence before me to enable me to determine what that was.
Consequently, I am persuaded that, when the parties commenced their cohabitation in March – July 2008, Ms Edsall owned property valued at no less than $309,948.42.
Ms Edsall advanced that there is no evidence to support a conclusion that Mr Rabkin made any contribution of any kind to either the B Street or the D Street properties. Mr Rabkin disputed this on the basis of his assertion that “the couple’s money was joint during the relationship.” I reject the contention that the mere existence of the cohabitation between the parties transformed money contributed by one of them into “joint” money.
I also note that Mr Rabkin said that he paid about $12,000.00 to engage a draftsman to draw plans related to a proposal that the B Street property be raised and built-in underneath; however, such proposal did not eventuate. Given her overall contention that Mr Rabkin made no contribution to either property, I have proceeded on the basis that Ms Edsall does not accept Mr Rabkin’s contention in this respect. Given that the B Street property was tenanted during the parties’ cohabitation, it seems unlikely that any expenditure associated with it would not have occurred in a manner to enable an appropriate tax deduction to be claimed in respect of the same and, in the absence of any corroborative evidence, I decline to accept Mr Rabkin’s contention about his payment of these funds.
For the reasons outlined above, I am not persuaded that Mr Rabkin made any contribution to either the B Street or the D Street properties during the parties’ cohabitation.
This is of particular relevance because these properties are the source of the funds currently held in the investment accounts held by I Lawyers and JL Lawyers. It is also relevant to record that, as a consequence of an order made by Judge Howard on 23 June 2014, Ms Edsall was paid $28,537.22 and Mr Rabkin $25,000.00 from the sale proceeds of the B Street property. As outlined elsewhere in these Reasons, I accept Ms Edsall’s evidence to the effect that she received $3,537.22 more than Mr Rabkin because she had to pay capital gains tax associated with the sale of that property. It is also relevant to record that, as a consequence of an order made by Judge Howard on 8 March 2016, each party was to receive $30,000.00 from the sale proceeds of the D Street property.
That is, I accept that Ms Edsall has already received $55,000.00 by way or partial property settlement. I also accept (because it was asserted by Mr Rabkin and accepted by Ms Edsall) that Mr Rabkin has also already received $55,000.00 by way of partial property settlement. He has also received $20,000.00 by way of maintenance payments from Ms Edsall.
It seems more likely than not that the monies paid to both Ms Edsall and Mr Rabkin were sourced from the sale proceeds of the two real properties owned by Ms Edsall at the commencement of their cohabitation and in respect of which I consider Mr Rabkin to have made no contribution.
As mentioned earlier in the context of outlining Ms Edsall’s proposal, the funds in the investment accounts of I Lawyers and JL Lawyers currently stand at $351,164.20 in total (exclusive of any interest earned on the same since March/April 2018).
Mr Rabkin’s property
As was the case with Mr Rabkin, Ms Edsall does not really dispute the property Mr Rabkin owned at the start of their cohabitation; again, any dispute between the parties is about the value of such property at that time. The differences in this respect are as outlined immediately below.
Property
Mr Rabkin’s value
Ms Edsall’s value
Commonwealth Bank account #99
$4,092.00
$4,145.42
NP Pty Ltd Business account #72
$12,806.00
Unknown
Commonwealth Bank account #32
$8,653.00
Commonwealth Bank account #80
$2,729.79
Commonwealth Bank account #80
Unknown
NP Pty Ltd
Minimal
Utility motor vehicle
E$34,500.00
Vintage motor vehicle
$300.00
SU bank account #00
NZD$6,038.00
NZD$5,231.49
SU term investment account #471
NZD$135,000.00
NZD$135,000.00
Property located in TV Town, New Zealand - (per UW Valuers valuation)
NZD$335,000.00
NZD$335,000.00
SU home mortgage (TV Town property) as at March 2008
(NZD$126,827.00)
NZD$208,173.00
(NZD$126,827.00)
NZD$208,173.00
TOTAL
Using conversion rate of 0.8610
$361,021.67
$306,851.48
Even taking into account the reservations about Mr Rabkin’s veracity that I expressed in the Reasons for Judgment delivered in support of the final parenting orders made earlier this year and noting that such reservations persist as a consequence of some of his evidence in the property aspect of the dispute between the parties, I intend to proceed on the basis that, at the commencement of the parties’ cohabitation, he owned property valued at about $361,021.67.
There is no suggestion that Ms Edsall made any contribution to the real property owned by Mr Rabkin in New Zealand which was, I accept, tenanted during their cohabitation. My finding about the absence of contribution by Ms Edsall to this property is relevant because this New Zealand property is the source of the funds Mr Rabkin contributed to the purchase of the VX property: a property in respect of which his legal interest is as a tenant in common in equal shares with Ms V, his partner.
I now turn to consider the property acquired by the parties during the course of their cohabitation and the contributions each made to the same during that time and after the June 2013 separation.
H Street, Suburb E
The parties purchased the H Street property in November 2008 (that is, about four months after their cohabitation started, according to Ms Edsall and about seven months after it started, according to Mr Rabkin) for about $560,000.00. They lived there until their separation in June 2013, after which time Ms Edsall (and the child, when he was in her care) remained living there.
It is uncontroversial that Ms Edsall has been entirely responsible for meeting the loan repayments in respect of borrowings secured by mortgage over that property.
The H Street property was purchased in the sole name of Ms Edsall.
Mr Rabkin’s evidence is that the parties intended that the H Street property be owned jointly by them. His position, supported by the paternal grandmother’s evidence, is that both he and Ms Edsall were named on, and signed, the purchase agreement for this property.[18] At trial, he clarified that his reference to “purchase agreement” meant a copy of the contract. The paternal grandmother said that, as she had spent five years working in real estate, the parties asked her to look at the purchase agreement on their behalf, which she did. Her evidence is that, in August 2015, Mr Rabkin tracked down the real estate salesperson: he was informed that the agency had since closed down and that her hand-written notes said the agreement was dated Tuesday, not Saturday and featured Ms Edsall’s name only.
[18] Affidavit of Ms Rabkin filed 9 February 2017 at [13].
In his written submissions, Mr Rabkin takes issue with Ms Edsall’s failure to provide the purchase agreement when requested; he alleges she failed to comply with her ongoing duty of disclosure. He submitted that the Court should accept the evidence of the paternal grandmother and conclude that Ms Edsall behaved dishonestly when she failed to present the purchase agreement. I do not accept his submissions in this respect.
Ms Edsall said that she and Mr Rabkin signed a contractual agreement to purchase the H Street property at the real estate agency’s office. That is, she accepted that both parties signed the first agreement with the real estate agent. However, she also said that, after he signed the document, Mr Rabkin refused to give her his payslips, tax returns and financial statements so that she could provide these to the bank in support of his application for finance; consequently, he was unsuccessful in his attempt to obtain commercial funding to purchase the property. She said that Mr Rabkin then agreed that the H Street property should be bought in her name alone. I accept the evidence given by Ms Edsall in this respect.
In any event, Mr Rabkin says he contributed $110,000.00 to the purchase of the Suburb E property.[19] Ms Edsall accepts that he paid about $100,000.00. I accept that Mr Rabkin contributed about $100,000.00 to the purchase of the H Street property. That is, I accept that he contributed no more that about 17.86 per cent of the cost of acquiring that property in late 2008.
[19] Affidavit of Mr Rabkin filed 8 February 2017 at [180], page 53.
Ms Edsall says she paid three sums totalling $165,000.00 in November 2009 to reduce the loan encumbering the H Street property. I accept her evidence in this respect and I also accept that the majority of these funds came from her inheritance from her grandmother.[20] That is, I accept that, by about 12 months after its purchase, Ms Edsall had contributed, as a consequence of these payments, no less than about 29.46 per cent of the cost of acquiring that property in late 2008.
[20] Affidavit of Ms Edsall filed 8 April 2015 at [67] – [69].
I also accept that, when “KM” was sold for $540,000.00 in May 2011,[21] Ms Edsall received a nett profit of $495,860.67.[22] I also accept that, in June 2011, she applied these funds to reduce the RT Bank home loan secured by mortgage over the H Street property.[23] I also accept that, of these, about $446,000.00 was subsequently transferred from that account and applied to discharge various other loans, to pay credit card liabilities and business expenses, to fund building works and toward the purchase of chattels, including antiques, a boat, an outboard motor and a trailer. At least some, if not all, of the chattels, antiques, the boat, outboard motor and trailer remain in existence.
[21] Affidavit of Ms Edsall filed 8 April 2015 at [8(e)].
[22] Affidavit of Ms Edsall filed 8 April 2015 at [30].
[23] Affidavit of Ms Edsall filed 8 April 2015 at [31].
Mr Rabkin says he made substantial contributions towards “KM”; he says his contributions included maintenance, building repairs and assisting Ms Edsall in the selection of staff. He says that, in 2010, at Ms Edsall’s request, he replaced the manager and assumed responsibility for managing the business. He deposes that it was around this time that Ms Edsall appeared to have lost interest in the business, which was on the verge of closing its doors. Mr Rabkin says there were numerous payroll difficulties as staff members were not being paid and team morale was also lacking. Mr Rabkin’s evidence is that he managed to correct these difficulties and retain the staff. When the child was born in 2010, Mr Rabkin says he assumed the role of receptionist, whilst managing to care for the child at night. He says he answered the phones, made appointments, did the banking and ensured the staff were paid.
Ms Edsall was cross-examined at trial about Mr Rabkin’s involvement in the business. She rejected the proposition that Mr Rabkin changed the environment of the workplace. She also rejected the proposition that his role was crucial to the operation of the business. Her evidence is that Mr Rabkin filled the role of receptionist and carried out some minor administrative tasks (including assisting with payroll and invoices from staff) for a short time after that role became vacant. I accept her evidence in this respect.
Ms Edsall denied that Mr Rabkin ran sales meetings, held meetings with health professionals and/or that he hired people for the business during the time about which he speaks. I accept her evidence in this respect.
I accept the contentions advanced on behalf of Ms Edsall to the effect that Mr Rabkin’s contributions to, and/or role in, the “KM” business were relatively minor and not to the extent he claimed. Even if I am wrong in arriving at this conclusion and Mr Rabkin in fact carried out the duties he asserts that he did, it is relevant to record that he accepted that, in 2010, the Ms Edsall Discretionary Trust (through which Ms Edsall operated the business) paid him $14,000.00. That is, even on his case, he was paid for the work he did, whatever that was. In fact, Ms Edsall said that her practice transferred, on average, $1,000.00 per fortnight to Mr Rabkin, a contention he did not accept.
I accept that Ms Edsall paid the home loan repayments referrable to the H Street property throughout the relationship and that she continued to do so following the June 2013 separation.
Mr Rabkin also asserted that, in addition to the initial financial contribution he made to the acquisition of the H Street property, he and/or NP Pty Ltd also contributed a $40,000.00 toward the cost of improvements: namely, about $30,000.00 towards the costs of installing the swimming pool and $10,000.00 towards the costs associated with the construction and/or refurbishment of the studio. Save for these direct financial contributions, Mr Rabkin does not assert that he made any other direct financial contributions to the acquisition and maintenance of this property.
I accept that, after the H Street property was purchased, various improvements were effected to it, both during the existence of the de facto relationship and after separation. Ms Edsall says[24] that the following improvements were made, at the nominated cost:
a)a pool was installed and the surrounding area landscaped, at a cost of $60,000.00; and
b)a shed was constructed, at a cost of $40,000.00, which she paid after separation; and
c)skylights were installed, at a cost of $3,000.00, which she paid for after separation; and
d)two replacement water tanks were installed; and
e)a new driveway and concrete entrance was built in order to comply with Council requirements: this cost $15,000.00, which she paid for after separation.
[24] Affidavit of Ms Edsall filed 8 April 2015 at [70].
I did not understand Mr Rabkin to take particular issue with Ms Edsall’s evidence in this respect. Given he was not in paid employment of any substantial kind after September 2010, it is clear that all costs associated with any improvements made to the H Street property were paid by Ms Edsall from the income she derived from her work.
However, Mr Rabkin says he did a lot of the work in and around the H Street property and, in that way, contributed to its improvement and maintenance. He says the work he did was extensive: he says he built a detached studio from which Ms Edsall’s undertook her work as a health professional after the child’s birth. It is accepted that the studio was built in 2010. Ms Edsall said that, when the property was purchased, there was an existing shed on it; she said that some conversion work had already occurred and that Mr Rabkin did work to sections of the shed that had not been lined or converted. She accepted he also installed all the lighting around the pool and all the drains.
Mr Rabkin also said that he built an extension to the house, a veranda and an outdoor kitchen. He said he also finished the new bathroom, inserted wardrobes in the house, cleared the scrub around the property, put in a pool including a “pool house”, paved around the pool and a new driveway and did landscaping and gardening. Ms Edsall said that both parties planted the hedge around the property.
Mr Rabkin relied on the contents of an “Owner/Builder Permit”[25] dated 6 December 2011 as detailing the extent of the works he did. It describes the work as “Extension/Addition” with detail of “extension to existing dwelling to extend living room and add new master bedroom with ensuite. Extending existing study room to transfer to a guest room. Also new court yard”. According to the permit, the notified value of work is $70,000.00, which was spent as follows: concreting ($18,000.00); builders ($5,000.00); Timber ($11,000.00); biocycle tank ($10,000.00); roofing ($8,000.00); plumbing ($3,000.00); electrical ($5,000.00); building supplies, timber floors, plaster, interior and exterior paint and other miscellaneous items ($10,000.00). Mr Rabkin also said that the parties then spent a further $49,890.00 on a walk-in robe, renovating the bathroom, on an outdoor covered area and outdoor kitchen and finishing touches.
[25] Affidavit of Mr Rabkin filed 8 February 2017 at Annexure 8.
Whilst Ms Edsall did not concede that Mr Rabkin had done all that he claimed to have done, she did agree that he did various work on the property; she did not accept his contention about the extent of the work he did or his contentions about the value of the same, but she did accept that he built a retaining wall and laid tiles around the pool. She also accepted that he made a contribution to the air conditioning of the house on the property. She accepted that he had lined portions of the building with plasterboard and painted the inside of the same, from which she operated her clinic.[26]
[26] Affidavit of Ms Edsall filed 8 April 2015 at [71].
Mr Rabkin submitted that the work he did on the H Street property saved the parties a significant amount of money; he provided his estimate, which he said he arrived at on the basis of the cost to the parties if they had had to pay for the work to be done. On his account, the work he said he did would have cost the parties $330,000.00. [27] I note that this figure includes the $40,000.00 referred to in paragraph 55 above.
[27] See Written Submissions of Mr Rabkin filed 10 June 2018 at [9]; Affidavit of Mr Rabkin filed 8 February 2018 at [253] – [296], p. 57 - 59.
On the admissible evidence before me, I am not persuaded to apportion a dollar value to the work undertaken by Mr Rabkin. In arriving at this conclusion, I have also taken into account the fact that, despite the money spent, and effort expended, on the H Street property by the parties, the value of the same for the purpose of these proceedings is agreed to be $575,000.00 (only $15,000.00 more than was paid to purchase the property in about November 2008 and prior to the works done to the same).
However, I accept that it is likely Mr Rabkin made a not insignificant contribution to those improvements and renovations which were effected to the property during the time he lived there. I accept, given his occupation, that it is more likely than not that he at least co-ordinated works done on the property.
I also note that Mr Rabkin asserted that Ms Edsall removed and retained either $312,799.00[28] or $319,334.00[29] from the home loan account secured by mortgage over the H Street property. In advancing this contention he said that the borrowings at the time the property was bought were about $448,000.00; that this loan was fully repaid using the proceeds from the sale of “KM”; that between about December 2011 and about August 2012, the parties redrew from the home loan to finance the building/extension works such that, as at 6 August 2012, the total borrowings stood at $119,890.88 (being the amount spent by the parties doing the work particularized in paragraph 60 above). He said that correspondence from the bank on about 19 February 2014[30] revealed that the balance owing on the home loan was then $439,225.60 and, from this, he calculated that Ms Edsall had drawn a further $319,334.72 from the home loan since the renovation works were completed in August 2012; he also says that has been unable to trace the use to which these funds have been put because Ms Edsall has not provided any disclosure in relation to this issue – a contention not accepted by Ms Edsall.
[28] Case Information document filed by leave 6 March 2017.
[29] Affidavit of Mr Rabkin filed 8 February 2017 at table p. 50-51.
[30] A document not in evidence.
I am not persuaded that Mr Rabkin has established that Ms Edsall withdrew funds from the home loan account and applied them solely for her own use. I note that his approach to the conclusion he has arrived at, and which he seeks to advance, ignores Ms Edsall’s evidence that funds drawn from the home loan account were also used to acquire antiques and chattels (themselves valued at $125,010.00) and a boat, outboard motor and trailer (which she said cost about $40,000.00). Further, I consider myself unable to discount the possibility that additional funds were spent on joint expenses in the period from August 2012 (where Mr Rabkin seems to seek to draw, in effect, a ‘line in the sand’) and the separation in June 2013.
It also appeared that Mr Rabkin contended, in essence, that Ms Edsall was not to be believed in her account of the extent of the expenditure on the H Street property. I do not accept that contention. I accept Ms Edsall’s evidence to the effect that significant funds were applied to the renovation, modification, refurbishment, outfitting and furnishing of the H Street property. As already noted, albeit perhaps obliquely, I accept her evidence about the acquisition of antiques and chattels used to furnish the H Street property, noting that the chattels (including antiques) located at that property have been valued at $125,010.00.
Ms Edsall said that, as at about February 2017, the amount owing in respect of the home loan was $312,455.00; as at April 2018, the amount owing was $302,915.00. I accept her evidence in this respect. Given Mr Rabkin’s evidence about the extent of the loan as at about February 2014 (namely, $439,225.60), it appears that Ms Edsall has been solely responsible for the reduction in the same to the April 2018 balance. I also accept that the H Street property has a value, as agreed between the parties, of $575,000.00. Consequently, its nett value for the purpose of these proceedings is $272,085.00.
I now turn to consider the real property acquired by Mr Rabkin after the June 2013 separation.
The property at WY Street Suburb VX (the VX property)
Mr Rabkin purchased the VX property with Ms V in September 2015. In his Financial Statement dated 9 April 2018, Mr Rabkin values his interest in it at $170,461.93; this is said to represent a 30 per cent interest in the property. However, he does not include any reference at all to his interest in this property in a Financial Statement dated 1 June 2018.[31]
[31] Exhibit 1.
In any event, when Mr Rabkin was asked to explain the basis on which he arrived at the figure of $170,461.93, he said he had arrived at this figure by combining the $162,000.00 he provided for the initial deposit (which was sourced from the sale of the real property he had owned in New Zealand) and half of the loan repayments made from the time of purchase to present (approximately $900.00/week). He said that Ms V owns “a massive percentage of the home”; he said that, as the parties had contributed different amounts to the acquisition of the property, Ms V owned a great deal more of it than he did.
However, reference to the relevant Transfer document[32] (dated 3 September 2015) establishes that Mr Rabkin and Ms V purchased the VX property as tenants in common in equal shares. Further, a Title Search dated 31 May 2018[33] reflects the information on the Transfer and establishes that there has been no change to the legal interest of either Mr Rabkin or Ms V in the property since its September 2015 acquisition.
[32] Exhibit 2.
[33] Exhibit 3.
Despite this evidence, Mr Rabkin maintained that he and Ms V do not own the VX property as tenants in common in equal shares; whilst he also advanced that the Title Search was incorrect, he later said, when asked to explain his understanding of a tenancy in common in equal shares, that he had “no idea”.
I also note that Mr Rabkin also said that he had contributed $140,000.00 (not $162,000.00) to the purchase of the VX property; he said Ms V contributed $200,000.00 towards its purchase and they jointly borrowed $180,000.00 to complete the acquisition. On these figures, the purchase price for the VX property was about $520,000.00 – this is corroborated by reference to the relevant Transfer document[34] (dated 3 September 2015) which establishes that the property was bought for $517,000.00.
[34] Exhibit 2.
Using that figure, Mr Rabkin’s direct financial contribution to the purchase price of the property[35] (exclusive of his contribution to the borrowings needed to acquire it) was about 27.07 per cent (if his initial contribution was $140,000.00) or 31.33 per cent (if his initial contribution was $162,000.00). Ms V’s direct financial contribution to the purchase price[36] (exclusive of her contribution to the borrowings needed to acquire it) was about 38.68 per cent.
[35] Exclusive of additional costs associated with the purchase, about which there is no evidence before me.
[36] Exclusive of additional costs associated with the purchase.
In his April 2018 Financial Statement, Mr Rabkin asserted that his “share” of the ANZ home loan, secured over the VX property by way of mortgage to the ANZ bank, was in the amount of $81,538.07.[37] When asked how he arrived at that amount, he said that half of the $180,000.00 the parties borrowed was “his” debt. He said that, from this $90,000.00, he had deducted the amount of the loan which he had repaid to arrive at the $81,538.07 asserted. On this evidence, the amount of the loan from ANZ bank he has repaid appears to be about $8,461.93.
[37] Exhibit 1.
However, during his cross-examination by Counsel for Ms Edsall, Mr Rabkin accepted that, as at 3 April 2018, all that remained outstanding of the $180,000.00 he and Ms V had jointly borrowed from the ANZ bank was $23,765.25. That is, $156,234.75 of the borrowed amount has been repaid since no later than September 2015.
Mr Rabkin then asserted that he owed the sum of about $80,000.00 to Ms V and not to the bank because she was the person who had paid off a substantial amount of the borrowings. He said he had to pay that amount to her in order to pay off his half of the borrowings.
Mr Rabkin said, in essence, that he and Ms V had decided to structure their ownership of the VX property as they had in order to safeguard their respective children’s entitlements in the event that either of them died. However, he also asserted that he currently only “had” a 30 per cent interest in the property (despite the position at law, as recorded on the Title Search) and said that, when he paid “his” per cent of the borrowings (presumably by paying Ms V whatever amount is needed to ensure that each of them repaid half of the $180,000.00 borrowed jointly from the bank), that would “increase” his interest (the percentage that he owns) in the VX property.
The only evidence before me about the current value of the VX property is that it was bought for $517,000.00 in September 2015. As at April 2018, $23,765.25 remained repayable to ANZ: consequently, the nett value I attribute to the VX property for the purpose of these proceedings is $493,234.75.
I am not persuaded that it is appropriate simply to value Mr Rabkin’s interest in the VX property at 27.07 per cent or 31.33 per cent or 30 per cent of its nett value. Rather, having regard to the evidence before me, I consider that the most appropriate way to value Mr Rabkin’s interest in this property is to proceed on the basis of his legal interest as a tenant in common in equal shares with Ms V. Consequently, I value his legal interest in the VX property at $246,617.38.
However, given that Mr Rabkin also gave sworn evidence that he owes Ms V about $80,000.00 – as she has, to date, repaid more of the funds borrowed from ANZ bank than he has (in fact, on his account, his repayments are no more than about $8,461.93) – I am persuaded that he holds his legal interest subject to her equitable interest, which I quantify for the purpose of these proceedings, and at this stage, in this amount.
Another way of approaching the determination of the value of Mr Rabkin’s interest in the property for the purpose of these proceedings would simply have been to take in his legal interest (at $246,617.38) and record that he is indebted to Ms V in the amount of no less than $80,000.00 for such interest: especially given his evidence to this effect and to the effect that he will ‘acquire’ his legal interest in the property only upon paying Ms V that which he owes to her by virtue of her having made a greater than 50 per cent contribution to the repayment of the borrowed funds. Such evidence is in the nature of admissions against interest, is certainly contrary to his own legal interests and is a position from which, in my view, he would be estopped from departing in any future proceedings.
For the reasons outlined above and doing the best that I can on the evidence before me and for the purpose of these proceedings, I value Mr Rabkin’s interest in the property (inclusive of Ms V’s equitable interest in the same or subject to his indebtedness to her in the amount of $80,000.00) at $166,617.38.[38]
[38] Being $246,617.38 less $80,000.00.
There is nothing to suggest that Ms Edsall has made any contribution to the VX property or Mr Rabkin’s interest in it.
Summary of findings about the existing real property and the funds in investment with I Lawyers and JL Lawyers
For the reasons outlined above, I consider that the money invested with the solicitors (which now amounts to $351,164.20 in total, exclusive of any interest earned on the same since March/April 2018) is property to which only Ms Edsall made any contribution. It was sourced from real property she owned prior to the start of their cohabitation and it is property to which I consider Mr Rabkin has made no contribution at all. It is also the source of the payments already made to each of the parties, which I quantify in the amount of $55,000.00 already paid to Ms Edsall[39] and $55,000.00[40] already paid to Mr Rabkin.
[39] $25,000.00 (consequent upon an order made on 23 June 2014) and $30,000.00 (consequent upon an order made on 8 March 2016 and which was applied to pay child s upport arrears in the sum of $16,644.22 and to pay $4,682.82 which was outstanding following an order made on 12 December 2013 and with the balance paid to Ms Edsall’s solicitors’ trust account.
[40] $25,000.00 (consequent upon an order made on 23 June 2014) and $30,000.00 (consequent upon an order made on 8 March 2016).
For the reasons outlined above, I consider that Mr Rabkin’s interest in the VX property (for the purpose of these proceedings) is valued at $166,617.37. Such interest was sourced from real property Mr Rabkin owned prior to the start of cohabitation and it is property to which I consider Ms Edsall has made no contribution at all.
For the reasons outlined above, I consider that the H Street property has a nett value of $272,085.00. I accept that Mr Rabkin’s sole financial contribution to the acquisition, conservation and improvement of the same was $100,000.00, made at the time of its acquisition in November 2008 and the contribution of an additional sum of about $40,000.00 which was applied to renovations and/or improvements. I accept that Ms Edsall made no contribution at all to his payment of the initial sum of $100,000.00 and some indirect contribution to his ability to contribute the latter sum.
I accept that Ms Edsall contributed $165,000.00 to reduce the borrowings secured over the property in about November 2009 and that this financial contribution was mainly sourced from inheritances;[41] I also accept that Mr Rabkin made no contribution at all to her payment of this sum. I accept that, thereafter, Ms Edsall was entirely responsible for the financial contributions required as a consequence of her ownership of the property: I accept that she met the loan repayments and that, other than the $40,000.00 contributed by Mr Rabkin, she was responsible for paying all of the costs associated with the renovation, fit-out, refurbishment and furnishing of the property and that she made such significant contributions (detailed above) using the sale proceeds of her business (a business to which I find Mr Rabkin made an extremely limited contribution, if any, and in respect of which contribution he was paid) and the money she earned by working as a health professional.
[41] Of the $165,000.00, $20,000.00 came from savings accrued from Ms Edsall’s business.
I find that, whilst Mr Rabkin made some contributions to the improvement of the property via his labour and oversight of renovation works, such contribution was not productive of any particular monetary gain. I accept that, after the June 2013 separation, Ms Edsall continued to meet all of the costs associated with her ongoing ownership of the property and that she has done so without any financial or other contribution of any kind from Mr Rabkin. I also accept, though, that she continued to live in the property.
Consideration of specific property and liabilities: value or amount and associated matters
I turn now to consider specific items of property and liabilities and to resolve any dispute about the value to be accorded to the same. I do so cognisant of the terms of Notation B to the order made by Registrar Spink on 25 September 2017. It provides:
That subject to the need (if any) to update valuations for the trial, the parties agree that the property pool consists of the following assets with the following valuations:
(i)[MO Pty Limited] and [Ms Edsall Discretionary Trust] and in relation to the valuation of these entities the parties agree to rely upon the affidavit of [Mr XZ] filed 28 April 2015;
(ii)[H Street, Suburb E] : $575,000.00;
(iii)[WY Street Suburb VX] : $517,000.00;
(iv)monies held in the [I Lawyers] Trust Account: $141,182.00 (to be updated for trial);
(v)monies held in the [JL Lawyers] Trust Account: $226,021.00 (to be updated for trial);
(vi)the value of personality (sic) in the possession of the wife;
(vii)antiques: $118,215.00;
(viii)household items: $3675.00.
The value agreed to be attributed to MO Pty Limited is $1.00 and I accept that. The value agreed to be attributed to the Ms Edsall Discretionary Trust is $63,253.00, as this is the value accorded to the Trust by Mr XZ in about April 2015.
However, a difficulty arises because Mr Rabkin seeks to retain the 4WD (which is registered in the name of MO Pty Limited) – this vehicle was included by Mr XZ in his calculation of the nett value of the Trust; it appears that, at the time he valued the Trust, the 4WD was the object of finance in an amount of about $90,586.00. I accept that this liability was initially met by Ms Edsall after the June 2013 separation (despite Mr Rabkin having the use of the vehicle) and that she has since paid it out using funds borrowed from her mother.
It is obvious that an unjust double-counting would occur if I valued the Trust at $63,253.00 but determined that Mr Rabkin retain the 4WD: such a scenario would mean that Ms Edsall would be regarded as retaining property (the Trust) the value of which was determined on the basis that it retained ownership of the 4WD in circumstances where this would not be the case.
I also note that, when the parties appeared before Registrar Spink on their own behalf on 14 February 2017, the Registrar included a Notation in the Order made that day to the effect that the agreed value for the vehicle was $51,000.00. Given this, I consider it appropriate to accord the 2012 4WD motor vehicle a value of $51,000.00.
For the reason outlined above, I will determine the value to be accorded to the Trust after I have determined whether it is just and equitable for Mr Rabkin to retain the 4WD.
The dismantled vintage motor vehicle
There is no expert evidence before me to establish the value of this property. Instead, Ms Edsall accords it a value of $5,814.00 (based, it seems, on her own estimate), whilst Mr Rabkin asserts that it should be regarded as having a “Nil” value. He contended that his value is more likely because he said the vehicle was valued at $300.00 when the parties commenced their relationship in early 2008.
In the absence of expert evidence, I am not persuaded that it is appropriate that I accord any particular value to the dismantled vehicle and I decline to do so.
Ms Edsall – partial property settlement
In his Case Information filed by leave on 6 March 2017, Mr Rabkin asserted that Ms Edsall had received $58,537.22 by way of partial property settlement. However, Ms Edsall’s evidence is to the effect that she received the sum of $55,000.00 ($25,000.00 on the sale of real property in July 2014 and $30,000.00 after orders were made on 8 March 2016).
As I understand it, the difference can be explained by the fact that Ms Edsall was required to pay capital gains tax following the sale of the property from which proceeds the payments made to each party were sourced. I accept this to be the case; consequently, I consider it would be unjust to Ms Edsall to take into account her receipt of the larger amount contended for by Mr Rabkin without taking into account the fact that it was larger so that tax could be paid and that the tax was paid.
Therefore, I intend to proceed on the basis that Ms Edsall received $55,000.00 (nett) following the sale of the properties.
Mr Rabkin’s superannuation
In his Financial Statement,[42] Mr Rabkin estimated his entitlement to superannuation to have a value of $1,300.00. Whilst Ms Edsall estimated his entitlement to superannuation to be $10,000.00 in a February 2017 affidavit, a Case Information document filed on her behalf on 27 February 2017 asserted its value to be $1,313.00. In those circumstances and in the absence of any other evidence to corroborate the assertions made by either party, I accord Mr Rabkin’s entitlement to superannuation a value of $1,300.00.
[42] Exhibit 1.
The loan from Ms Edsall’s mother
In her Financial Statement filed 9 April 2018, Ms Edsall asserted that she owes her mother about E$540,387.00.
Ms W (Ms Edsall’s mother) said in her evidence that she loaned Ms Edsall certain monies; she said they had entered into an Unsecured Loan Agreement, dated 13 September 2013.[43] Ms W also said that, on 17 April 2018, she executed a Deed of Amendment to record amendments to the Loan Agreement. The amendments reflected an increase in the amount loaned to Ms Edsall (such that the total sum owed is £330,226.00) and a changed date for repayment, to 9 March 2020. I accept Ms W’s evidence in this respect.
[43] Affidavit of Ms W filed 29 May 2018 at [2].
As I understood his case, Mr Rabkin (at least initially) disputed the quantum of the funds advanced by Ms W to Ms Edsall; he also noted that an earlier figure had been provided (in an amount of about $304,314.00) and took issue with Ms Edsall’s approach to disclosure about this issue. He also noted that whatever borrowings found to have been incurred by Ms Edsall occurred after the parties separated. He also advanced that it was unlikely Ms Edsall would, in fact, be called upon to repay whatever funds her mother had advanced to her.
I accept that Ms Edsall has borrowed money from her mother in the amount outlined in the evidence she gave, as supported by Ms W, whose evidence I also accept. I accept that they entered into a formal agreement in relation to these funds.
I also accept the evidence given by Ms W to the effect that, in the event that Ms Edsall is unable to repay her by the March 2020 date for repayment, she and her daughter would then have to have a further discussion about what would then happen. I think it highly unlikely that Ms W (whom I accept is the owner of real property valued at no less than about £3,000,000.00) would enforce the terms of the agreement she has with Ms Edsall: after all, she (Ms W) is quite prepared for Ms Edsall and the child to live in premises she owns and to assist her daughter to re-establish herself in the United Kingdom.
Given this conclusion, I am not persuaded to take the loan Ms Edsall has to her mother into account for the purpose of determining the nett value of the property of the parties. It is, though, a relevant matter to be considered during the assessment of the parties’ respective financial situations. It is also relevant to note that at least some of the borrowings enabled the repayment of liabilities associated with property which remains in existence. The 4WD is a good example of this: I accept that Ms Edsall discharged in full the lease in about September 2013, by paying the sum of $86,460.23, which she had borrowed from Ms W.
If Mr Rabkin retains the 4WD for his use following the conclusion of the proceedings, he will obtain the benefit of a vehicle unencumbered by a chattel mortgage, but Ms Edsall will remain indebted to her mother for the amount required to cause this to be the case.
Ms Edsall’s credit card debts and liabilities to YA Bank
Given that Ms Edsall’s credit card debts and the liabilities she has to YA Bank arose after the parties separated, I am not persuaded that it is appropriate that the same be included for the purpose of determining the nett value of the property of the parties. Of course, such liabilities are relevant when considering the parties’ respective financial circumstances.
Conclusions as to the property of the parties (other than funds held by solicitors) and its value
As a result of the findings I have already made and as a result of the parties having agreed the values of other items of property, I find that Ms Edsall’s property and its relevant nett value is as follows:
a)H Street property: $272,085.00.
b)MO Pty Ltd: $1.00.
c)Ms Edsall Discretionary Trust: to be determined when a decision is made about the fate of the 4WD.
d)chattels (including antiques) at H Street property: $125,010.00.
e)cash at bank (in Australia and overseas): negligible.
In addition, I accept Ms Edsall has already received $55,000.00 by way of partial property settlement.
I also note that Ms Edsall declared receiving $40,000.00 following the sale of an Audi motor vehicle. Whilst it is a little unclear, it seems more likely than not that Ms Edsall used funds borrowed from her mother to discharge the loan owing in respect of this vehicle (recorded in the value of the Ms Edsall Discretionary Trust as at December 2013 as being in the amount of about $70,000.00) and then received the sum of $40,000.00 following its subsequent sale. In such circumstances, I consider it would be unjust to take Ms Edsall’s receipt of these funds into account for the purpose of determining the nett value of the “property pool” when I have determined not to take her indebtedness to her mother into account for that very purpose.
I also accept that Ms Edsall has borrowed about $540,387.00 from her mother, has credit card liabilities which, in total, amount to $61,978.00 and is also indebted to YA Bank in an amount of about $180,154.00, associated with her July 2013 purchase (and later sale) of a modified vehicle from which she operated a mobile business.
As a result of the findings I have already made and as a result of the parties having agreed the values of other items of property, I find that Mr Rabkin’s property and its nett value is as follows:
a)interest in VX property: $166,617.37.
b)NP Pty Ltd (through which he works as a tradesman): Nil.
c)cash at bank in Australia: about $1,000.00.
d)cash at bank in New Zealand: about $1,000 NZD.
e)dismantled vintage motor vehicle: NIL
f)two Boats: value unknown
g)furniture, chattels and personal effects at VX property: $7,000.00.
h)Superannuation entitlement: $1,300.00.
In addition, I accept Mr Rabkin has already received $55,000.00 by way of partial property settlement.
Further discussion of the s 90SM(4) considerations
As already noted, Ms Edsall worked full-time as a health professional at KM from the commencement of cohabitation until when the child was born in 2010. I accept that she applied her income from this employment to meeting the repayments payable on the loan taken to fund the acquisition of the H Street property toward the end of 2008. I accept that she applied the nett proceeds following the sale of KM in the manner outlined above. I also accept that, after the child’s birth, she continued to work on a full-time basis as a health professional from a home office located at the H Street property. I accept that she applied the funds she received (via distributions made to her by the Trust[44]) to meeting joint expenses during the parties’ cohabitation.
[44] The gross profits of which were, for example: $107,564.00 in FY 2012 and $65,383.00 in FY 2013.
I accept that, during the parties’ cohabitation, Mr Rabkin worked only through the entity NP Pty Ltd. I accept that NP Pty Ltd recorded the following income for the following financial years: $33,068.00 for FY2008; $75,920.00 for FY2009 and $60,121.00 for FY2010.[45]
[45] Exhibit 4.
Whilst Ms Edsall contends that Mr Rabkin kept whatever money he earned separate, she also said that, as well as buying items like fishing equipment for himself, he also bought toys for the child and plants and gardening equipment for the H Street property. Whatever his financial contributions, as Mr Rabkin himself accepted,[46] Ms Edsall earned most of the income during the course of their cohabitation and, particularly, following the child’s birth when it is uncontentious that Mr Rabkin ceased to work outside the home for remuneration.
[46] Affidavit of Mr Rabkin filed 7 April 2015 at [373].
Despite this, it seems that NP Pty Ltd continued to record the receipt of income: $13,300.00 in FY2011; $3,000.00 in FY2012 and $3,000.00 in FY2013.[47] Whilst Mr Rabkin was uncertain, it seems much more likely that these amounts were distributions made by the Trust.
[47] Exhibit 4.
Mr Rabkin contended that he was the child’s primary caregiver from birth until separation and that he remained the primary caregiver (on the basis of caring for the child for 12 nights per fortnight) until about August 2015. Ms Edsall said that she and Mr Rabkin cared equally for the child following his birth; she said that this was possible because she worked from the studio at the H Street property. I accept that both Ms Edsall and Mr Rabkin cared for the child on a daily basis in the period from his birth in 2010 until their separation in June 2013. I accept that, therefore, during different periods until trial, both had the child in their respective primary care.
Considered on a holistic basis, I consider that both Ms Edsall and Mr Rabkin contributed equally to the child’s care until about September 2015 when an order provided that he live primarily with his mother and spend significant time with his father.[48] Whilst I consider that Ms Edsall contributed slightly more to the child’s parenting from that time on, there is no doubt that Mr Rabkin remained very involved in the child’s care also.
[48] Five nights per fortnight.
Post separation contributions
I accept that, after the parties separated in June 2013, Ms Edsall purchased a purpose-built mobile business for $318,000.00. The purchase of this property was funded via a chattel mortgage. I also accept that Ms Edsall continues to be indebted to YA Bank in an amount of about $180,000.00 as a result of this venture. I accept that the income Ms Edsall earned after separation was applied to her own support and to the child’s support and to meeting costs associated with the H Street property and to paying the costs associated with the litigation. I also accept that, for a time, she continued to pay the costs associated with the borrowings incurred to purchase the 4WD, despite Mr Rabkin having the use of that vehicle.
I also accept that, consequent upon an order made on 26 August 2013, Ms Edsall paid $20,000.00 to Mr Rabkin by way of lump sum spousal maintenance and, in this way contributed to his financial support after their June 2013 separation. Save for this, I accept that Mr Rabkin has returned to paid employment and has been working on a self-employed basis as a tradesman. According to an Income Statement from NP Pty Ltd,[49] its gross income was $62,534.00 in FY 2016 and $70,743.00 in FY 2017. I accept that Mr Rabkin has applied the income earned from his exertions to his own support, to meeting the child’s costs when in his care and to the payment of the assessed, very limited child support due to Ms Edsall.
[49] Exhibit 4.
None of the orders proposed by either party will have any effect on the earning capacity of either party.
Relevant s 90SF(3) matters
I accept that both Ms Edsall and Mr Rabkin have the capacity to continue in gainful employment, self-employed in their chosen fields. I note that it was submitted on Ms Edsall’s behalf that, save for a consideration of the child’s living arrangements, there are no other matters that would result in the Court being persuaded to make an adjustment in favour of either party, having regard to their future needs.
I accept Ms Edsall’s evidence about her various health issues. I also accept she has been diagnosed with Chronic Suppurative Lung Disease and Primary Immunodeficiency/Primary Immune Deficiency Syndrome Disorder (a condition whereby her body is unable to produce immunoglobulin antibodies and which requires her to undergo immunoglobulin replacement therapy in hospital for approximately four or five hours every four weeks). I accept as likely that there may be some costs associated with this treatment and that these appear to be met by her health insurance cover.
I accept Ms Edsall’s evidence that, as at April 2018,[50] her weekly income was in the amount of $146.00 (being $83.00 in family allowance and energy payments and $63.00 in a carer’s allowance) and that she was then supporting herself and the child using funds she had borrowed from her mother.
[50] Financial Statement of Ms Edsall filed 9 April 2018.
I accept that Mr Rabkin is in good health and has the income earning capacity reflected by NP Pty Ltd receipt of income as outlined above. Given this and the reality of Ms Edsall’s previous earnings, I accept that her income earning capacity is likely to be significantly greater than that possessed by Mr Rabkin.
I also accept, though, that, as a result of the parenting orders made earlier this year, Ms Edsall will bear the vast majority of the child’s future day-to-day care. She will also be overwhelmingly responsible for meeting the child’s future financial needs.
Justice and equity of the proposed orders
Having regard to the manner in which they approached their ownership of property and the various contributions each made to, during and after their five year cohabitation, and to the relevant considerations prescribed by s 90SF(3), I consider that orders which are just and equitable are orders which will result in:
a)Mr Rabkin retaining his interest in property which had its genesis in property he owned at the start of cohabitation and, subject to what appears below, Ms Edsall retaining property which had its genesis in property she owned at the start of cohabitation; and
b)the parties sharing in the nett value of the H Street property such that Mr Rabkin receive property valued at 40 per cent of the same and Ms Edsall receives property valued at 60 per cent of the same.
That is, of the $272,085.00 which I have found to be its nett value, Mr Rabkin will receive property valued at $108,834.00. I note he has already received $55,000.00 of this entitlement by way of partial property settlement. I am also persuaded that, in receiving the balance of that to which he is entitled by virtue of the decision I have made about the H Street property, it is appropriate that Mr Rabkin receive the 4WD, noting as I do that Ms Edsall was successful earlier this year on her application to relocate the child to live with her in the UK.
In so far as Mr Rabkin is concerned, the consequence of the determinations outlined through-out these Reasons and which have persuaded of the conclusions expressed immediately above will be that he will receive, or be entitled to retain absolutely, all property currently in his possession, which includes the following property at the nominated value/s:
a)interest in VX property: $166,617.37.
b)NP Pty Ltd (through which he works as a tradesman): Nil.
c)cash at bank in Australia: about $1,000.00.
d)cash at bank in New Zealand: about $1,000 NZD.
e)dismantled vintage motor vehicle: NIL
f)two Boats: value unknown
g)furniture, chattels and personal effects at VX property: $7,000.00.
h)superannuation entitlement with BUSS: $1,300.00.
i)partial property settlement already received : $55,000.00.
j)4WD motor vehicle: $51,000.00.
k)payment to be made by Ms Edsall: $2,834.00.
Save as is dealt with above, I decline otherwise to make orders sought by Mr Rabkin in relation to various chattels. I also decline to make an order that Mr Rabkin reimburse Ms Edsall for his half of the mediation costs (that amount being $2,475.00) as I have taken the forgiveness of his responsibility for this payment into account in arriving at the determination of orders I consider just and equitable in the circumstances of this case.
In so far as Ms Edsall is concerned, the consequence of the determinations outlined throughout these Reasons and which have persuaded of the conclusions expressed immediately above will be that she will receive, or be entitled to retain absolutely, all property currently in her possession, which includes the following property at the nominated value/s:
a)H Street property: $272,085.00.
b)MO Pty Ltd: $1.00.
c)Ms Edsall Discretionary Trust: $12,253.00.
d)chattels (including antiques) at H Street property: $125,010.00.
e)cash at bank (in Australia and overseas): negligible.
f)partial property settlement already received: $55,000.00.
g)funds held by solicitors : $351,164.20.[51]
[51]Less the $2,834.00 which Ms Edsall is to pay to Mr Rabkin.
Given that Ms Edsall is required to pay $2,834.00 to Mr Rabkin, it seems appropriate that orders are made directing the payment for the same to him directly from the funds held in the I Lawyers account before those funds are released to Ms Edsall.
For the reasons outlined above, I am satisfied in all the circumstances of this case that it is just and equitable and appropriate that orders be made in the terms appearing at the commencement of these Reasons to give effect to the conclusions outlined above.
I certify that the preceding one hundred and thirty-seven (137) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 8 October 2018.
Associate:
Date: 8 October 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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Res Judicata
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