Rooks & Padley
[2014] FamCA 444
•15 May 2014
FAMILY COURT OF AUSTRALIA
| ROOKS & PADLEY | [2014] FamCA 444 |
FAMILY LAW – DE FACTO RELATIONSHIP – Where date of commencement of relationship in dispute – Where the applicant asserts it commenced in 1997 and the respondent asserts 2004 – Where the evidence supports on the balance of probabilities that the parties had been in a de facto relationship from 1997.
FAMILY LAW – PROPERTY SETTLEMENT – Division of property of de facto couples – Where court followed 4 step process provided in section 90SM – Where first step requires the identification of the parties’ legal and equitable interests in the property and thereafter determine whether just and equitable to make an order altering the interests of the parties in the property – Where the court noted it was just and equitable to make an order for the division of the property of the parties – Where evidence of the applicant is preferred to that of the respondent who was belligerent and failed to directly answer questions – Where the court was satisfied on the balance of probabilities that the respondent bought in greater initial financial contributions – Where financial contribution to acquisition, conservation and improvement of property during the relationship was approximately equal – Where the respondent made greater non-financial contributions by virtue of advantageous attributes brought into the relationship – Where homemaker parent contributions approximately equal – Where court found the assets should be divided 60/40 in favour of the respondent – Where no adjustment made on the basis of 90SF factors – Where final division of property to be 60/40 in favour of the respondent – Where division is just and equitable in the circumstances.
FAMILY LAW – PROPERTY SETTLEMENT – Failure to disclose assets – Where the applicant asserts the respondent has failed to disclose property or the proceeds of sale from that property – Where the court was persuaded on the balance of probabilities that the respondent has under his control funds or assets which were not disclosed to the court – Where the court noted that alternatively or additionally it could make an adjustment in favour of the applicant on account of the non-disclosure – Where the court made an adjustment adding a sum to the asset pool available for division.
FAMILY LAW – PROPERTY SETTLEMENT – Add Backs – Where court noted that add backs are exceptions and the power of the court is to divide the property, not notional property – Where the court took that expenditure into account under s90SF(3)(r).
| Family Law Act 1975 (Cth) ss 4AA, 75, 79, 90RD, 90SF, 90SM Alexiou v Alexiou [2012] FamCA 1146 |
Phillips v Phillips [1998] FamCA
Ferraro v Ferraro (1993) FLC 92-335
| APPLICANT: | Ms Rooks |
| RESPONDENT: | Mr Padley |
| FILE NUMBER: | BRC | 8570 | of | 2011 |
| DATE DELIVERED: | 15 May 2014 |
| PLACE DELIVERED: | Townsville |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | 15, 16 and 17 July 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Farr |
| SOLICITORS FOR THE APPLICANT: | Bell Legal Group |
| COUNSEL FOR THE RESPONDENT: | Ms Quinn |
| SOLICITORS FOR THE RESPONDENT: | Advance Family Law |
Orders
IT IS NOTED that publication of this judgment by this Court under the pseudonym Rooks & Padley has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 8570 of 2011
| Ms Rooks |
Applicant
And
| Mr Padley |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
The parties to this litigation were in a de facto relationship which they agree concluded in November 2009. However they do not agree when it commenced: Ms Rooks says it was on October 1997; Mr Padley says it was December 2004. By these proceedings, the parties seek to divide their property. Ms Rooks seeks a division of 40/60 against her favour; Mr Padley ultimately contended that there should be two asset pools with different splits. He says that the former matrimonial home at B Street, Suburb C on the Gold Coast should be sold and the proceeds divided 80/20 in his favour; as regards the rest of the parties’ assets, he says they should be divided 70/30 in his favour. On current valuations, that would see an overall effective division in his favour of 74.33 per cent.
THE ISSUES
As identified by the parties, the principal issue in dispute in this litigation was the time when the de facto relationship between the parties commenced. The parties were agreed that they were in a romantic relationship which commenced on Valentine’s Day in 1997; the question is whether from October 1997 the romantic relationship was also a de facto relationship within the meaning of that term as used in the Family Law Act.
Other issues in dispute between the parties were the extent to which Ms Rooks made non-financial contributions to the development of a property at Town A in NSW which Mr Padley already owned when the parties first met, the sale proceeds of which is the source of most of the parties’ current wealth. A further issue is the extent to which Mr Padley has made full disclosure of his assets, including either gold or silver bullion, or funds derived from its sale.
Finally, there was an issue as to the value of the Town A property as at 1997.
WHEN DID THE DE FACTO RELATIONSHIP COMMENCE?
The law
Pursuant to s 90RD(1) of the Family Law Act 1975 (Cth) (“the Act”) this Court is empowered in proceedings brought under, amongst other provisions, s 90SM of the Act, to declare for the purposes of those proceedings that a de facto relationship existed, or never existed, between the parties.
The definition of “de facto” relationship for the purposes of the Act is contained in s 4AA. Sub-section (1) provides as follows:
4AA(a) A person is in a de facto relationship with another person if:
(a)the persons are not legally married to each other; and
(b)the persons are not related by family (see sub-section (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has affect subject to sub-section (5).
Sub-section (5) provides as follows:
For the purposes of this Act:
(a)a de facto relationship can exist between two persons of different sexes and between two persons of the same sex; and
(b)a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
Some elaboration of the circumstances relevant to working out if persons have a relationship as a couple is contained in sub-section (2). That provides as follows:
Those circumstances may include any or all of the following:
(a)the duration of the relationship;
(b)the nature and extent of their common residence;
(c)whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e)the ownership, use and acquisition of their property;
(f)the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h)the care and support of children;
(i)the reputation and public aspects of the relationship.
Statutory guidance as to the inter-relationship of those circumstances, and the weight to be given to them, is provided in sub-sections (3) and (4) as follows:
(3) No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4) A Court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the Court in the circumstances of the case.
Those provisions, or their state counterparts, have been the subject of considerable judicial discussion, principally in an attempt to more precisely analyse what will comprise “a couple”. Much of that analysis seems to have its genesis in the difficulty in satisfactorily distilling the essence of such a common, everyday concept. From those decisions the following propositions may be stated:
(a)Whether a de facto relationship exists or not is a question of fact, not a matter of discretion;[1]
(b)A de facto relationship does not need to be akin to a marriage[2] although the nature of the association involved in a marriage relationship may be instructive;[3]
(c)The parties determine the nature of their relationship and it may evolve and alter, even dramatically, over time;[4]
(d)Whilst a composite expression, it is comprised of two parts “a couple” and “living together” each of which must be established;[5]
(e) There need not be full time living together;[6]
(f)The relationship may be unhappy, but still subsisting;[7]
(g)Sexual or other exclusivity is not necessary;[8]
(h)The gist of the inquiry is the degree to which parties have merged their lives into one.[9] That connotes financial, emotional and physical interdependence.[10]
[1]Jonah v White [2011] FamCA 221 at [58] per Murphy J.
[2]Moby v Schulter (2010) FLC 93-447 at [163]-[164] per Mushin J.
[3]KQ v HAE [2007] 2Qd R 32 at [18] per McMurdo P, Keane & Holmes JA.
[4]Vaughan v Bele [2011] FamCA 436 at [11] per Cronin J.
[5]Taisha & Peng [2012] FamCA 385 at [12]-[21] per Cronin J.
[6]Moby v Schulter (supra) at [140].
[7]JRR v PH [2005] QSC 253 at [29] per Byrne J.
[8]ibid at [62]-[64].
[9]ibid at [60] and [67].
[10]Zau v Uongh [2013] FamCA 347 at [35] per Cronin J.
The facts
The respondent was born in 1944 and is presently 70 years of age. He left school at about age 12, and for most, if not all, of his life, has been involved in property development. Amongst his achievements is developing and establishing a venue at Suburb D in Sydney which supported Australian bands.
Although the material does contain much information about it, it is plain that he was previously married, to which relationship he had one child, E, who is presently 43 years of age. (He also had another daughter, F, from a short relationship in the 1990’s). That marriage failed, and Mr Padley says that in February 1988 he agreed to pay his ex-wife $500,000.00 by way of matrimonial property settlement. He says that in the early 1990’s much of his remaining wealth was lost, however in about April 1994 he inherited the sum $1,206,749.88 from the estate of his mother. With those funds he bought and sold various properties in Suburb G in Sydney. One of those properties, I Street, Suburb G, was purchased by him in 1994 for $175,000.00, and remained owned by him at the time he met the applicant.
A significant asset which he held at the time he met Ms Rooks were two adjoining beachfront properties at H Street in Town A. He had purchased them in 1995 for $525,000.00, of which $300,000.00 was borrowed. His intention in purchasing them was to develop them as beachfront resort accommodation which would be attractive to people from the eastern suburbs of Sydney, who apparently would be prepared to pay a premium to stay there.
The applicant was born in 1963 and is currently 50 years of age. The material does not descend to much detail of her life prior to meeting the respondent save that in 1996, she received the sum of $250,000.00 from a family law property settlement. Most of that sum was still retained by her at the time that she met the respondent.
The parties met on 14 February 1997 at a Gold Coast hospitality venue and immediately formed a romantic attachment. At the time, Ms Rooks was living in rented accommodation at J Apartments at Suburb C. Mr Padley was then living in Sydney, although he was embarking upon the development of the land at Town A. He would regularly visit the Town A site, and after meeting Ms Rooks, when he was at Town A, he would often travel up to the Gold Coast for the weekend and stay with her.
In para 10 of his affidavit filed 9 November 2012, Mr Padley said:
As time went by in 1997 I began a weekend travel routine whereby on weekends I travelled from [Town A] to the Gold Coast to see [Ms Rooks]. It was a travel routine I followed over a long term once I began seeing [Ms Rooks]. I usually drove to the Gold Coast from [Town A] late Friday afternoon. I usually took with me from [Town A] supplies of food, groceries and alcohol for the weekend for both of us…
Ms Rooks accepts that between 1998 and June 2001, the parties routine was that during the week, Mr Padley would stay at Town A, but return to the Gold Coast on weekends. He would come back on Friday nights and leave on Monday mornings. She further says that during that time she would regularly go down to Town A for one or two nights during the week.
Although when the parties met, Ms Rooks had been working in the art field, she resigned from that position on 18 June 1997 and commenced work as Ms Padley’s personal assistant shortly thereafter. Mr Padley says he particularly employed her for her “good people skills” which he identified he did not have. Although initially undertaking administrative and other work associated with the development, her job progressed to including attending to his personal affairs as well. One of those was undertaking negotiations with the Child Support Agency in relation to an outstanding alleged liability relating to F.
Ms Rooks would invoice Mr Padley for services which she performed for him by reference to the number of hours she worked. These invoices appeared to be rendered on a weekly basis, with the last invoice said to be dated 18 February 2000. However she re-commenced full-time employment on the Gold Coast in January 1998, and in March 1999 was first employed in a property industry position, in which occupation she continued until June 2004, when she resumed employment with the respondent.
It is not in dispute that between February and October 1997, the parties were not in a de facto relationship, but were in a romantic relationship. Ms Rooks says that during that time they would stay at each other’s homes and enjoyed a sexual relationship, but did not regard themselves as being in a de facto relationship. She said that they were still in the “courting” stage of their relationship.
Ms Rooks identifies that the relationship commenced in October 1997, when Mr Padley moved from Sydney to live with her at the Gold Coast in her J apartment. Also in that month, Ms Rooks purchased a unit at K Street, Suburb C in her sole name, using part of her 1996 matrimonial property settlement. She says that the parties moved into that property in March 1998.
It is agreed that in 1999, the respondent drew his will so that it left 25 per cent of his estate to the applicant. It is also not in contention that on 22 September 2000, the respondent gave the applicant an enduring power of attorney in respect of financial and personal/health matters.[11]
[11]Exhibit W12.
In February 2001 the parties jointly purchased a unit at L Street, Suburb C. It was not in dispute that the contract for purchase of that property[12] listed the address of both of the parties as “… [K Street Suburb C] Queensland 4…” and in the accompanying Stamp Duty Declaration to the contract, both parties acknowledged that they intended to occupy the property as their principal place of residence. Further, in the material which they contemporaneously executed, both parties undertook to notify the Commissioner of Stamp Duties if the property should not be their principal place of residence for a period of not less than six months immediately following possession being taken. There is no evidence of either party so notifying the Commissioner.
[12]Exhibit W6.
The proposed business at Town A was intended to be up-market holiday accommodation units. Construction started in March 1997 and the business opened for trading in December 1997. Ms Rooks says that once the development was completed, Mr Padley left the operation of the business to her and another employee, and they jointly conducted the business until August 1998, when Mr Padley took over the management of the business. However by April 1999, the business was not doing well financially and the properties were put up for auction on 30 April. The properties did not sell, perhaps in part because during the course of the auctions a local councillor claimed that the properties were “illegal”. Indeed legal proceedings ensued between the local council and the parties between August 1999 and April 2004. I will deal with the parties’ involvement in that litigation in due course. However it is common ground that in October 2004, a court ordered the parties to cease operating the accommodation business, and the parties proceeded to close down the business and sell the remaining units which Mr Padley owned.
Mr Padley contends that the de facto relationship only commenced in December 2004 when he moved from living at Town A during the week, to living with Ms Rooks full-time at L Street. However that had not always been his position. Up until the first day of the trial, the declaration which he sought in his Response was that the de facto relationship between the parties “existed from November 2006 to November 2009.” No explanation was given as to the reason for the change from that position, other than that the respondent was “confused”. I will consider that further in due course. What is important to note at this stage however is that, in her submissions, Mr Padley’s counsel expressly disavowed any suggestion that there was any change in the nature or quality of the relationship per se before and after December 2004, particularly by reference to the considerations articulated in s 4AA. The only change relied upon by her to justify the commencement of the de facto relationship was that the respondent, after December 2004, spent seven nights a week with the applicant, whereas prior to then, he had only spent three nights per week.
Ms Rooks called a number of witnesses who gave their observations of the parties’ relationship between 1997 and 2004. Importantly, save for one of them, a Mr M, none of those witnesses were challenged as to their credit. Rather the challenge that was made to them was that the conclusions and opinions which they had drawn as to the nature of the parties’ relationship may have been founded upon incomplete or inaccurate perceptions or facts.
Against that background, it is convenient to deal with Mr M’s evidence first. He gave evidence that he first met Ms Rooks in 1996 when he was her landlord at J Apartments. He observed Mr Padley visiting Ms Rooks, with those visits becoming more regular and lasting for longer periods. In November 1997 Ms Rooks asked Mr M to help her find a property to purchase, and ultimately she purchased the K Street property. Speaking of the period from 1997 on, he said “I observed that they behaved as any other couple living together would and there was no doubt in my mind that they were in a committed relationship.”
In cross-examination Mr M conceded that he had been convicted of 26 counts of unauthorised withdrawals of deposits from his real estate agent’s trust account, being unauthorised because they were made before contracts of sale had settled. For those offences he received a $100,000.00 fine. However he denied that in giving evidence in these proceedings he was being untruthful. He did however concede that his observations could have been one of a committed girlfriend and boyfriend rather than a de facto couple, and he accepted that Mr Padley spent a lot of time at Town A. I accept his evidence.
Ms Rooks also called Ms N. She had known Ms Rooks for over 30 years, they met when they were students in 1981. She first met Mr Padley in 1997 in Sydney when she was at lunch with Ms Rooks and some other friends. She socialised with the parties in 1998 on two occasions in Sydney, and again in 2000. In September 2001 she travelled to the Gold Coast and stayed with the parties at L Street. She thereafter visited the parties at that property a number of times. She said that from what she was told and from her own observations “it was apparent they were in a committed relationship.” She said that when she stayed with the parties “I observed that [Mr Padley] and [Ms Rooks] shared a bedroom and [Mr Padley] would wake in the morning, bringing [Ms Rooks] coffee and the papers in bed after he went for an early morning walk.”
In cross-examination she conceded that she didn’t observe any of Mr Padley’s belongings in the J apartment, and in relation to their subsequent homes, just assumed that the furniture and items belonged to both. She further said that she believed that the parties commenced the de facto relationship in 1998, but she identified that it was difficult to pin point a date specifically. I accept her evidence.
Ms Rooks also called her mother, Ms O. She said she first met Mr Padley in late 1997 when Ms Rooks was living at J Apartments. She said that Mr Padley referred to Ms Rooks as his “partner” and she observed they were very affectionate to each other. She said that Mr Padley became a member of their family and shared many family occasions together. These included in 1998 when she, her late husband, their son and his family went to stay at the Town A apartments, at which time Ms Rooks and Mr Padley also were staying there. Her evidence was that she and her late husband stayed at that accommodation often.
Her evidence was that between 1997 and 2000, Mr Padley and Ms Rooks spent Christmas with Ms Rooks’ family at her home, but after her husband’s health declined, Christmas lunch was then held at L Street instead. Her evidence was that there was a habit that on Sunday nights she and her late husband would go to the parties’ home and have dinner.
In 2000 she, her late husband and the parties holidayed together at Location P and in June 2002 went on a further three night holiday together on a house boat.
After her late husband passed away, between 2002 and 2008 she spent every Christmas with the parties.
She gave evidence of other instances of shared family occasions. Her evidence was that to her observation “they were like any married couple, doing things together and joining in with family events.” I accept her evidence.
Also called by Ms Rooks was Ms Q. She was a long-time friend of Ms Rooks, having known her since they were 12 years old when they met at high school. She first met Mr Padley in the middle of 1997 over breakfast at Suburb G. Thereafter she often travelled to the Gold Coast to visit the parties, and stayed with them at J Apartments, K Street and their other homes over the years.
She observed that Mr Padley had a good relationship with Ms Rooks’ father, whilst he was alive. In July 2002 Ms Q flew to the Gold Coast for Ms Rooks’ father’s funeral. There were many family members staying with the parties, and although she offered to sleep on the lounge, she said that Mr Padley and Ms Rooks insisted that she sleep in their bedroom on a single mattress beside their bed.
In cross-examination she conceded that she simply assumed the parties were in a de facto relationship at the relevant time, in part because although she was aware that he was living and working at Town A, nonetheless Mr Padley was always on the Gold Coast for the weekends that she was there. When pressed why she thought they were in a de facto relationship rather than a boyfriend/girlfriend relationship, she identified the fact that Ms Rooks would stay on occasions at Town A as relevant to her thinking. She accepted that after 1998, when Ms Rooks re-commenced employment on the Gold Coast, there would have been limited opportunities for her to attend at Town A. I accept her evidence also.
Finally Ms Rooks called Mr S. He had known Ms Rooks from 1991 when they worked together in a hospitality venue. Between 1996 and 2004, he and his family owned and operated four businesses on the Gold Coast, including two restaurants. He was introduced to Mr Padley by Ms Rooks in 1997, and thereafter they dined regularly at Mr S’s restaurants. When they were dining there, he would often chat with them and came to know them well. He recalls from time to time other family members joining them at dinner, including Mr Padley’s daughter E, his ex-wife and Ms Rooks’ mother. He specifically recalled the parties attending Melbourne Cup lunches in 2002 and 2003 at the restaurants. He further said that he was a regular guest at their homes in J Apartments, K Street, L Street and B Street.
He particularly recalled what he described as “orphan’s breakfasts” on Christmas mornings that were organised by Ms Rooks for her friends who had no family on the Gold Coast. Notwithstanding the fact that he plainly did have Gold Coast family, he attended some of them. He particularly recalled the 2003 Christmas breakfast because on the evening before, Mr Padley, Ms Rooks, Mr Padley’s ex-wife and E all dined at one of his restaurants. The following day he went to their Christmas breakfast at L Street.
His evidence was “I observed during my visits that they acted as any other couple living together sharing the hospitality tasks between them.”
In cross-examination he was challenged as to whether his observations could possibly have been just of a boyfriend and girlfriend, but he disagreed. I accept his evidence.
Both of the parties placed some emphasis upon contemporaneous documents in which the parties referred to their relationship status and disclosed addresses. Mr Padley particularly relied upon relevant tax returns prepared by or for Ms Rooks which did not disclose, where there was an opportunity to do so, that she was in a de facto relationship with Mr Padley. He tendered into evidence copies of her tax returns for 1998, 2000, 2001 and 2002, none of which identified that she was in a de facto relationship.
He also pointed to instances where prior to 2004, he used addresses other than Ms Rooks’ home for correspondence including, for instance, his Town A address for correspondence from the Child Support Agency and health insurance.
Ms Rooks relied upon a number of documents in which, prior to 2004, the respondent gave a Gold Coast address. She pointed to:
·The contract which the parties entered into to purchase L Street on 22 January 2001 gave the parties’ address as K Street;
·In the course of the purchase of that property, Mr Padley signed a declaration that he intended the property to be his principal place of residence;
·On 8 May 1998 a radiology account was addressed to him at the K Street property;
·The contract for sale of his unit in I Street in Suburb G (on a date unclear from the document, but seemingly early in the relationship) gave his address as K Street;
·In 1997/8, there was correspondence from the Australian Tax Office addressed to him at K Street;
·In September 2003, a dental surgeon’s account was addressed to him at L Street.
Mr Padley’s credibility was firmly in issue in this case. There were three main prongs to the attack by Ms Farr, who appeared as counsel for Ms Rooks, being: firstly, his almost wholesale failure to disclose any relevant documentation pertaining to his financial affairs; secondly in his affidavit material, his failure to frankly detail his financial position, and particularly recent transactions; and thirdly what on any view would have to be described as his extraordinary performance in the witness box.
As to the first matter, it seems plain that notwithstanding numerous requests by the applicant’s solicitors, Orders of this court, and in the face of an Undertaking as to Disclosure given by the respondent and filed on 7 November 2012, there has been little disclosure of financial documents by him.
This was a major topic of cross-examination. Although not entirely consistent, the respondent’s position was that he had given all of the relevant documents to his former solicitor, who had told him that he had in turn made them available for inspection by the applicant’s then solicitors. However three things have to be said in relation to that assertion. The first is that the respondent’s List of Documents filed 21 November 2012 did not contain the documents which he asserted had been made available for the applicant’s inspection; that is evident simply from the face of the list itself. The second matter is that somewhat surprisingly, and despite strong avowals by the respondent under oath that he had earlier returned (via his solicitors) certain diaries to the applicant, in fact the diaries were produced by his solicitor and returned to the applicant during the course of these proceedings. The third matter is that he did not call the relevant solicitor who he said he had given the documents to, or even seek to have him called, to rebut the strongly made assertion that he was withholding relevant documents.
Turning then to the attack made upon the respondent based upon his failure to disclose assets, and recent transactions in relation to them, this largely relates to an issue to which I will return later, namely his investments in gold and silver bullion. Little detail about those transactions was contained in his affidavits. In his trial affidavit filed 9 November 2012, he denied any current holding of gold, but acknowledged a holding of silver with an estimated value of $344,792.97. However by the time of the trial in front of me, all of that silver had been sold. Apparently there was some form of disclosure during the trial of documents evidencing the last sale of the silver, but otherwise there was no evidence before me as to how it is that in a space of only a little over six months, those monies had been wholly dissipated, or what they had been invested in or spent on. It was indeed a remarkable feature of the case.
The third matter was the conduct of Mr Padley in the witness box. Even accepting that he was then 69 years of age, and perhaps naturally not prone to be respectful of authority and disinclined to directly answer questions put of him by others, nonetheless his performance was extraordinary. He would rarely answer questions, but rather would deal with them by giving a response which he presumably thought was helpful to his case, but not otherwise responsive to the question. He was belligerent. On many occasions he had to be directed to answer questions, as he plainly otherwise had no intention of doing so. This conduct persisted even though it was explained to him that in a credit trial such as this, such conduct was likely to weigh heavily against him. Even simple questions were not answered directly by him, but he employed strategies of obfuscation, filibustering or simply avoiding giving an answer.
It became plain during his cross-examination that he had little, if any, respect for the applicant, and did not have much faith in the process in which he was then enmeshed in this court. He seemed to very much feel that he was being victimised, and that the applicant had only ever been interested in him for his money.
Moreover, relevant to the consideration of the commencement of the de facto relationship, is his change in sworn position at the commencement of the trial, from asserting that the relationship had commenced in 2006, to instead substituting December 2004. “Confusion” cannot explain that variation. Not only was selection of the 2006 date not satisfactorily explained, but given its abandonment at the start of the trial, it seems to me to be quite inexplicable except for strategic and tactical reasons, as it was clearly in his financial interests to have as short a de facto relationship as possible.
Against that material, I have concluded that, unless it is independently corroborated by contemporaneous documents or other evidence, I should be very cautious in putting any weight upon any evidence of the respondent in relation to contentious matters. I find that in giving his evidence, he was more interested in trying to minimise the financial impact upon him of these proceedings, than in giving truthful, frank or comprehensive answers.
On the other hand, Ms Rooks presented as a forthright and honest witness. In fairness, little challenge to her credibility was made, and where her evidence was challenged, Ms Rooks made reasonable concessions.
In all respects I prefer the evidence of Ms Rooks to that of Mr Padley.
One other matter to which I should advert at this point in the reasons is that, seemingly from a very early stage, and certainly by 1998, the respondent would provide the applicant with a weekly cheque in the sum of $250.00 for housekeeping. He asserted that this was merely some instance of his generosity, but I reject that assertion. In my view it has all the hallmarks of a conscious contribution to household expenses reflective of an obligation to fund them.
I identify the following points as supporting the applicant and the respondent being in a de facto relationship between October 1997 and December 2004:
·The parties were in what the evidence would suggest was an exclusive, monogamous, sexual relationship;
·Throughout that period, the parties spent extensive time together on a regular basis, with the pattern being that Mr Padley would spend from Friday afternoon until Monday morning with Ms Rooks on the Gold Coast, during which time they would undertake numerous social activities together;
·During that period the parties presented to their social acquaintances as a couple, and their friends believed them to be a couple;
·The parties jointly acquired L Street together in 2001 and contemporaneously asserted it was to be their principal place of residence;
·From at least 1998, the parties regularly engaged with each other’s family, in the sort of way that domestic partners do, including joint holidays, weddings and other social functions;
·The financial support afforded to the applicant by the respondent during the period was consistent with there being a de facto relationship;
·Whilst the respondent did spend four nights out of every seven at Town A, the distance between the Gold Coast and Town A was such that it precluded daily commuting, and yet there was plainly a need for the respondent, who was then managing the accommodation (albeit with employed assistance) to be based in Town A;
·That in 1999 and 2000, Mr Padley drew his will and a power of attorney so as to financially advantage the applicant in the event of his death or disability.
On the other hand I identify that the following points support the argument that they were not for that period in a de facto relationship:
·The fact that Mr Padley spent most of his time at Town A, whilst Ms Rooks spent most of her time on the Gold Coast;
·For most of that period Ms Rooks maintained financial independence from Mr Padley, and there does not appear to have ever been a joint bank account;
·There does not appear to have been, except for two bar stools, any furniture or like effects brought by Mr Padley into either J Apartments, K Street or L Street;
In my view, the preponderance of the evidence supports the parties having been in a de facto relationship from 1997, and I find on the balance of probabilities that it commenced in October of that year.
APPROPRIATE ORDER UNDER FAMILY LAW ACT SECTION 90SM
The law
Section 90SM(1) of the Family Law Act, which deals with the division of property of de facto couples, is in relevantly identical terms to s 79, which deals with the division of property of parties to a marriage. It has long been established that the preferred approach to be adopted to determining property disputes under s 79 is a four step one which involves:
·The identification of the property of the parties including their assets, financial resources and liabilities;
·The evaluation of the parties’ contributions as mandated by s 79(4)(a), (b) and (c);[13]
·The evaluation of the matters referred to in s 79(4)(d), (e), (f) and (g)[14] including, by reference to s 79(4)(e), the matters set out in s 75(2);[15] and
·A determination as to whether the result is just and equitable by reference to s 79(2) of the Act.[16]
[13]Under s 90SM, these are found in subsection (4)(a), (b) and (c).
[14]Relevantly s 90SM(4)(d), (e), (f) and (g).
[15]Relevantly here s 90SF(3).
[16]Relevantly here s 90SM(3).
After the High Court’s decision in Stanford v Stanford[17] it may be taken as commonly accepted that the first step requires the identification of the parties existing legal and equitable interests in property, and thereafter, it is incumbent upon the court at the outset to determine whether or not, in the light of those interests, it is just and equitable to make an order altering them. However as the High Court itself indicated in Stanford, in many cases that step will be uncontroversial: for instance, where there is jointly owned property which is impracticable for the parties to jointly enjoy consequent upon separation, such as the former matrimonial home.
[17](2012) 247 CLR 108.
In Gould & Gould[18] the Full Court reviewed the previous authorities in relation to the approach of a court where there is a finding that a party has knowingly failed to disclose assets in the course of the proceedings. At [27] the court said as follows:
Rather the appropriate approach for his Honour to have adopted in this case would have been to have increased the asset pool to take account of non-disclosure by the husband, and indeed his Honour had already done this to some extent in accepting the schedule of assets prepared by the wife’s counsel…Alternatively, or even in addition, had his Honour been persuaded that on the balance of probabilities there existed assets other than those contained in the asset pool contained in his reasons, his Honour could have made some adjustment in favour of the wife on account of the husband’s non-disclosure pursuant to the provisions of s 75(2)(i) as did Holden CJ in Kannis.[19]
[18](2007) FLC 93-333.
[19]See also Jamine & Jamine(No 2) [2012] FamCAFC 104.
The pool and its value
By the conclusion of the trial it was agreed that the assets and liabilities of the parties included the following:
ASSETS:
B Street, Suburb C (joint) $930,000.00
K Street, Suburb C (applicant) $355,000.00
R Street, Town T in NSW (respondent) $750,000.00
Artwork (joint) $6,960.00
2003 Toyota (applicant) $6,450.00
2006 VW (respondent) $26,200.00
Bank accounts (applicant) $6,832.00
Shares (applicant) $6,592.00
SUPERANNUATION
MLC Superannuation (applicant) $12,313.00
LIABILITIES
Go Mastercard (applicant) $728.00
Westpac visa (applicant) $18,513.00
Applicant’s litigation loan (applicant) $137,516.00
There was only one asserted asset that was not agreed, namely that the applicant contended that the court should find that the respondent had gold and silver bullion worth $800,000.00, or at least had the proceeds of its sale in that sum in some form under his control, and had not disclosed it. Ms Farr said in her submissions that “the respondent has failed to give relevant disclosure as to his gold and silver purchases and sales, his bank accounts, taxation returns and assessments, credit cards, superannuation and share holdings.” Further, she noted that his Financial Statement disclosed expenditure in excess of income of $646.00 per week, which was consistent with there being undisclosed funds being used to fund the shortfall. I will deal with the question of undisclosed property shortly.
It is also pertinent to note that the parties agreed that there should be add backs of $110,000.00 being the legal costs expended by the applicant, in these proceedings and $17,868.00, in respect of a car purchased by the respondent for his daughter. However there is an oddity in relation to this, in that although not referred to in his affidavit, or elsewhere in his written material, during the course of his cross-examination the respondent asserted that he had expended somewhere in the order of $320,000.00 on his lawyers in the course of this litigation. His counsel told the court that her instructions were not to seek to have that sum added back into the pool of assets, although in fairness to her, she did concede that that was to her client’s advantage, and inconsistent with consenting to an add back of $110,000.00 in respect of the applicant’s costs. However I shall consider whether any add backs, and if so what, should be factored in, in due course.
Has there been a failure to disclose property under the control of the respondent?
At the time of separation, the respondent owned gold bullion. At para 188 of her affidavit filed 7 November 2012 the applicant said as follows:
188. As far as I am aware, other assets and liabilities held by [Mr Padley] are as follows:
Assets
Gold Bullion held at separation
Purchase price at time of separation
May 2006 $200,000.00 @ $914.00 oz
November 2008 – February 2009 $600,000.00
@ average price $1440 oz $800,000.00
…
189. While [Mr Padley] claims his gold bullion was converted to silver and is worth far less than the gold bullion he held at separation, there has been no explanation or disclosure by him to explain his assertion.
190. The values of these precious metals have increased since separation so the total value should have increased.
The respondent has attempted to explain his dealings in bullion in his affidavit of 9 November 2012 as follows:
42. In 2006 I began purchasing gold through [Business U]. At 30 June 2009 those holdings stood at $643,043.32. Based on advice that the best thing to do was to buy silver, on 30 December 2010 I began buying silver through [Business U]. On 4 March 2011 I sold the last of the gold and had totally moved into silver. As at 2 October 2012 the silver had, as [Business U] describes it, an “approx. value” of $342,792.97.
He returned to the theme at para 111 in the following terms:
I have the silver I previously mentioned…
In his Financial Statement filed on the same date as his trial affidavit, he deposed to having silver at Business U as at 2 October 2012 in the value of $344,792.97.
However by July 2013, all of the silver had been sold. During the course of final submissions, it became an agreed fact – apparently based upon a document shown by the solicitors for the respondent to the applicant’s solicitors – that the last of the silver had been sold. No detail as to what the $344,000.00 or thereabouts had been spent on was disclosed by the respondent. Part of the explanation of where it went might lie in the fact that, according to his Financial Statement, on a weekly basis he expended about $650.00 more than he earned. However plainly that could not account for nearly $350,000.00 of expenditure in seven months. Likewise, some part of the explanation might lie in the payment of legal fees associated with the preparation for and conduct of the trial before me, but again it would seem difficult to dissipate the sort of money that he had as at October 2012 on legal fees alone.
Plainly this was a case that called for disclosure of each and every document which would assist both the applicant and the court in understanding where the funds in question went. Absent such explanation in those circumstances, a court may be justified in concluding that the reason why there has not been disclosure is because the asset substantially remains in existence, albeit in a different form. Ms Farr contends that I should conclude that the respondent has under his control an asset which I should value at $800,000.00. How the figure of $800,000.00 is arrived at is apparently as set out in para 88 of her client’s affidavit recited above. As I understand that, it asserts a value of gold held at separation of $800,000.00. Apparently there were two sets of purchases - $200,000.00 worth of gold in May 2006 and further $600,000.00 worth of gold between November 2008 and February 2009.
The authorities are clear that where there has been a failure to disclose, a court may take a robust approach of the kinds identified in Gould (supra). Whilst I am persuaded, on the balance of probabilities, that the respondent does have under his control funds or assets derived from the gold bullion which have not been disclosed to this court, that is not the end of the matter; even taking a robust approach, I still need to be satisfied on the balance of probabilities as to the value of the undisclosed assets or funds. Alternatively, or additionally, I could make an adjustment in favour of the applicant on account of the non-disclosure under s90SF(3)(r).
Here I propose to do the former. Based upon the respondent’s Financial Statement, it appears as though he has a net deficiency of expenditure over income of $646.00 per week, or $33,592.00 per annum. The parties separated in November 2009, and therefore it is reasonable to assume that as at the date of trial (approximately three and a half years after separation) the respondent had spent $117,572.00 more than he earned, by recourse to the bullion. Further, plainly the respondent has spent money on legal fees. In his evidence he asserted that he has spent $320,000.00 on legal fees to three firms, in the sums of $100,000.00, $170,000.00 and $50,000.00. When he gave this evidence, he was plainly angry at the size of the legal bills which he has paid. That, coupled with the specificity of the amounts, causes me in this single instance, to accept his evidence even though it is uncorroborated by any document. Therefore based upon the above reasoning, it is likely that from the gold or its proceeds, the respondent has spent $437,572.00. If one adds that to the $344,792.97 worth of silver that he admitted to having as at 9 November 2012, one comes to a total figure of $782,364.97 – a figure remarkably close to the $800,000.00 which it is said was the value that the gold had as at the date of separation.
Based on the above reasoning, I am satisfied on the balance of probabilities that the respondent has under his control undisclosed funds, which I find have a value of about $340,000.00. I therefore propose to add that sum into the asset pool available for division.
Asserted add backs
The parties agreed that there should be “add backs” in respect of sums expended by the applicant on her legal costs and a sum of money expended by the respondent on the purchase of a car for his daughter. Notwithstanding the parties’ agreement, that does not bind me. Further, notwithstanding his evidence that he has expended $320,000.00 on his own lawyers, the respondent refused to accept that that expenditure should be “added back” into the property pool.
The correctness of add backs post Stanford must be seriously doubted. Relevant post-Stanford authorities of Bateman & Bowe [2013] FamCA 253; Baglio & Baglio[2013] FamCA 105 and Alexiou & Alexiou [2012] FamCA 1146 make it plain that add backs are exceptional, and the power of the court under s 79 or its de facto equivalent is to divide property, not notional property.
I do not propose to factor in any add backs to the property pool in this case reflective either of the two sums agreed between the parties, or for the respondent’s legal costs. Rather, consistent with recent authority discussed above, I propose to take that expenditure into account under s90SF(3)(r).
Should there be an alteration of the parties’ interests in property at all?
The principal asset of the parties, the former matrimonial home at B Street, Suburb C, is jointly owned. Since separation, the respondent has remained in occupation of it and enjoyed its contents to the exclusion of the applicant. In my view that fact alone makes it just and equitable to make an order for the division of the property of the parties.
One pool or two?
The applicant says that there should be one pool of assets; the respondent contends that there should be two. He says that the former matrimonial home at B Street should be treated separately to the remainder of the assets. The reasons why he so contended were not clear, but doing the best I can appear to arise from his assertion that the funds for the purchase of B Street were derived solely from the sale proceeds of Town A. However it seems uncontroversial that indeed other assets of the parties were also derived exclusively from those sale proceeds: for instance as I understand it the Town T property was so funded, as was the purchase of gold and silver bullion, and as was the purchase of the respondent’s current motor vehicle.
There is no justification for there being two pools of property in this case, and I propose to deal with the property as one pool.
Financial contributions to property
At the commencement of the relationship
There is no dispute as to what the applicant brought into the relationship when it commenced in October 1997. She had received in 1996 a property settlement in the sum of $250,000.00, of which $10,000.00 had been repaid to her father, and a further $20,000.00 paid for legal fees. The balance of the funds were retained by her, and therefore she had approximately $220,000.00 which she brought into the relationship.
The position in relation to the respondent is not so simple. He brought into the relationship a residential unit at Suburb G, which when it was sold in 1998, realised net proceeds of approximately $30,000.00 to $40,000.00.[20] He also at the time owned a Jaguar motor vehicle worth about $10,000.00, furniture and contents worth about $25,000.00 and a boat worth about $20,000.00. He further had about $30,000.00 in funds at the Commonwealth Bank.[21]
[20]This was asserted by the applicant at para 47(b) of her affidavit filed 7 November 2012 and seemingly accepted by the respondent at para 23 of his affidavit filed 9 November 2012. It was not explored at trial.
[21]These items and asserted values were contained in para 24 of his affidavit filed 9 November 2012 and were not the subject of any challenge.
He also brought into the relationship the two properties at Town A. He had purchased those for $525,000.00 in 1995, save that they were subject to a mortgage of $300,000.00.
Ideally, the court would have had direct evidence from a single expert valuer as to the value of those properties as at October 1997, and indeed orders were made in this Court requiring the parties to cause a retrospective valuation to be made by V Valuers at the respondent’s expense as at that date. However the respondent failed to comply with that order, and in explanation for that, said that there were extant valuations from around that time already in existence, which in his view, absolved him from the need to comply with the court order. Plainly that was a mistaken view, and probably another instance of his general defiance.
In his affidavit filed 9 November 2012 at para 22, the respondent gave evidence as follows:
22. By October 1997, the time when [Ms Rooks] claims we began living together, I owned the following properties that had the following “mortgage security purposes” values:
[1/1 H Street, Town A]
Valued by [W Valuers] for “mortgage security purposes” in October 1997 at $1million. It was not subject to a mortgage.
[2/1 H Street, Town A]
Valued by [W Valuers] for “mortgage security purposes” in October 1997 at $600,000.00. It was subject to a mortgage with [Mr X] for $300,000.00.
[2 H Street, Town A]. It was worth about $750,000.00 at the time. It was not valued at the time by [W Valuers].
The property originally had the address of [1 Y Street, Town A]. The Council changed the address and it became known as [2 H Street, Town A]. I subdivided the property into two halves made up of what became known as [1 H Street, Town A] into two parts that became known as: [1/1 H Street, Town A] and [2/1 H Street, Town A]. I eventually put strata title units on the [1 H Street] properties. What [W Valuers] valued in October 1997 for mortgage security purposes was [1/1 H Street] and [2/1 H Street]. Lot [1/1 H Street, Town A] ended upon with two properties on it called “[BB]” and “[CC].”
It can therefore be seen that the respondent contended that the value of the Town A properties (excluding mortgages) was $2,350,000.00, with a net value of $2,050,000.00 once the $300,000.00 mortgage was taken into account. He further gave evidence that in October 1997, Company Z loaned him the sum of $650,000.00, secured against both of the titles of 1 H Street, Town A. That would tend to support his contention that the value of the properties at that point in time was more than the $525,000.00 for which they had been purchased in 1995.
The two W Valuers valuations were not otherwise in evidence before me, nor was the basis for the respondent’s estimate of the value for 2 H Street explored or challenged in evidence. Further, there is the difficulty arising from the respondent’s non-compliance with the orders requiring to instruct and pay for the V Valuers valuation.
Doing the best I can in those unsatisfactory circumstances, it seems to me that I cannot conclude on the balance of probabilities what the value of the Town A land was as at October 1997, but I am satisfied that it was more than the $525,000.00 for which it was purchased in 1995. The evidence simply does not permit me to conclude what that higher value was. However, even if the value were only the 1995 value, then the respondent brought into the relationship assets with a net worth of between $340,000.00 and $350,000.00, whereas the applicant brought in assets with a value of about $220,000.00. Therefore on any view the respondent brought in greater initial financial contributions, and in view of the fact that I am satisfied that the value of the Town A land was more in 1997 than it was in 1995, the most that I can do is say that I am satisfied on the balance of probabilities that he made considerably greater initial financial contributions than the applicant, but I am unable to quantify them.
During the relationship
Both parties made financial contributions to the improvement of the Town A properties during the course of the relationship, in that monies were borrowed to enable the development of the accommodation business to be completed. Those funds were in part secured against the K Street property which was in the applicant’s sole name. Otherwise, it appears as though the funds were secured against the Town A properties themselves.
Neither party asserted that they had made a greater financial contribution to the property of the parties during the course of the relationship, save that it appears as though the respondent bases his greater claim to the B Street property on the fact that it had been acquired with funds solely derived from the sale proceeds of the Town A properties, however I have rejected his argument that there should be two pools.
Upon balance, I think that the financial contributions made by the parties to the acquisition, conservation and improvement of property during the course of the relationship is approximately equal.
Non-financial contributions to property
Ms Farr conceded that the respondent made a greater non-financial contribution to the acquisition or improvement of the parties’ property because of the skill which he had as a developer.[22] Her position was that, but for his specialist skill, the contribution based entitlement of the parties would be approximately equal. However in light of the respondent’s skills, she was prepared to concede a 10 per cent adjustment attributable to that in the respondent’s favour. Based on her contended figures of the value of the parties’ assets and liabilities, which on my calculations – ignoring add backs and superannuation – saw a net value of the pool at $2,643,277.00, that was an adjustment in his favour of about $264,000.00.
[22] As to “special skill” contributions see: Ferraro v Ferraro (1993) FLC 92-335; JEL v DDF (2001) FLC 93-075; Whitely v Whitely (1992) FLC 92-304; Brazel v Brazel (1984) FLC 91-568 and Phillips v Phillips [1998] FamCA 1551. However doubt as to any such “principle” was recently expressed in Kane v Kane [2013] FamCAFC 205 at [7] per Faulks DCJ and at [107]-[109] per May and Johnston JJ.
There was actually little evidence as to precisely what skills the respondent did have in development. Although he appears to have had extensive experience, at least after the failure of his first marriage, his development business in fact ran into financial difficulty.
Doing the best I can, it seems to me that the respondent most likely had two advantageous attributes which he brought to the relationship: firstly, by virtue of his experience as a developer, he had been able to identify the potential associated with the two beachfront properties in Town A. In a sense, their potential for a development was a special feature of those assets which he brought into the relationship. Secondly, he subsequently demonstrated that he did have the capacity to achieve the vision which he had for the realisation of the blocks’ potential. In that sense, he can be regarded as indeed having made a greater non-financial contribution to the improvement of the property of the parties. He described himself as “very driven to be successful” in the venture, and “obsessed with the business and development” of it.[23]
[23]Para 30 of his affidavit filed 9 November 2012.
That is not to say that the applicant did not contribute to the Town A properties as well. However four things need to be said in relation to her involvement. The first is that it does not appear that she had the entrepreneurial drive of the respondent, and in fairness to her, she did not claim to. Rather she conceded that the respondent was the “big picture” person, whereas she was more a “detail” person. Even the respondent conceded that she had better people skills than he, and in cross-examination conceded that they would jointly discuss aspects of the development, and that he used her as a “sounding board” for his ideas.
The second thing that needs to be said is that for some of her work associated with Town A, the applicant was remunerated, albeit perhaps not at a commercial rate. So for her initial work in 1997 – 1998, she was paid amounts as invoiced by her to the respondent. She was again paid when she returned to work at the properties in June 2004, albeit this time on a salary of $50,000.00 per annum. The parties did not operate a joint bank account, and it appears as though the applicant’s income thereby derived was largely available for her discretionary expenditure on herself.
The third thing which needs to be said is that the applicant was intimately involved in extensive litigation in relation to the properties. Whilst, as I understand it, that litigation ultimately saw the business required to be closed, and the properties sold as residences rather than as holiday accommodation, nonetheless this is an aspect of the applicant’s involvement which needs to be taken into account.
The respondent sought to persuade me that the involvement of the applicant in the litigation was as little more than a note taker. I reject that argument. During the course of her evidence the applicant demonstrated a real understanding and knowledge of the litigation, its steps and the issues involved. Moreover the contemporaneous correspondence would suggest that she was far more than just a note taker, and from time to time would provide instructions – no doubt in consultation with the respondent – to the solicitors engaged for the parties. I find that she made a real contribution to that litigation.
Finally the applicant was heavily involved in dealing with the respondent’s child support issues in relation to his youngest child F. Whilst the evidence does not really enable me to understand what those issues were, other than an asserted overpayment, I accept that it was the applicant who attended to the negotiations rather than the respondent and thereby freed the respondent to focus upon the business without irritating distraction.
Taking all of these matters into account, upon balance, I think it was correct for the applicant to concede that the respondent made a greater non-financial contribution to the acquisition, conservation and improvement of the property of the parties during the course of their relationship.
Homemaker parent contributions
Between October 1997 and July 2004, the parties spent more time apart than together, because the respondent was spending his weekdays at Town A. I infer that he attended to his own domestic requirements when in Town A, and likewise the applicant on the Gold Coast.
I did not understand the applicant’s case to be that she made greater homemaker contributions than did the respondent. Certainly there is no evidence from which I could so conclude, and I find that their contributions in this respect are approximately equal.
Analysis of contribution based entitlements
As has been seen, in my view the respondent made greater initial financial contributions than did the applicant, however I am unable to properly quantify that difference. Each of the parties made equal financial contributions to their property during the course of the relationship, however the respondent made greater non-financial contributions to the property by virtue of his specialist skill.
Weighing those matters in the balance, I am of the view that on a contribution based entitlement, the assets of the parties should be divided 60 per cent in favour of the respondent and 40 per cent in favour of the applicant.
Effect of order on parties’ earning capacities
Neither party advanced any argument with reference to this consideration.
Section 90SF(3) considerations
The principal considerations relevant to this case are the disparity in the parties’ age, their capacity for gainful employment and their respective expenditure on legal fees.
The respondent is 70 years of age, and does not appear to have been actively engaged in any business since the Town A development, which was finally wound up in 2007. Although the Town T property remains owned by him, and does have development approval for a 5 lot strata subdivision[24] the respondent disavowed any intention to in fact develop the property. On the other hand he did not venture any explanation as to why he continued to hold the Town T property absent a desire to develop it.
[24]See exhibit W14.
His counsel urged me to find on the basis of his behaviour in the witness box that he was infirm and unlikely to be capable to engage in any further development activities. That was not my impression. Whilst there were aspects of his appearance and behaviour which could be attributed to frailty based on age, he appeared to nonetheless have considerable residual vigour and mental acuity.
Whilst I accept that the respondent is now 70 years of age, I am not persuaded that he no longer has any capacity to continue with development of the Town T property. Despite his protestations, I find, upon the balance of probabilities, that the respondent is likely to use his considerable experience as a developer to attempt to develop the Town T property with a view to profit. However the evidence does not permit any sort of analysis or prediction as to what, if any, profit the respondent might thereby derive.
The applicant has not been employed in her property industry position since 2004, however she is only 50 years of age. To my observation she maintained physical and mental capacity for gainful employment, and the only impediment to her exercising that may be her capacity to obtain employment, given her absence from the work place for about 10 years. However I am by no means persuaded that she is unemployable.
Earlier in these reasons I have said that I do not propose to add notional and presently non-existing property back into the pool. However I do intend to take it into account under s90SF(3)(r).
It was not in contention that the applicant has expended $100,000.00 on her legal fees, funded by some sort of loan, which at trial had a balance of $137,516.00. Further, I have earlier found that the respondent has expended $320,000.00 on his legal fees. It is further agreed that he expended $17,868.00 on buying a car for his daughter. Therefore in total the respondent has depleted the assets available for division by about $210,000.00 more than the applicant has.
I have found that the net value of the assets of these parties is $2,271,277.00. $210,000.00 is about 10 per cent of that pool. In other words, the respondent has already expended and hence had the benefit of 10 per cent of the asset pool more than the applicant has.
There is one further factor which I identify as relevant, and that is that the respondent has since separation in 2009, remained living rent-free in the former matrimonial home. That said, he has also, it seems, solely attended to the payment of expenses associated with that home, and it appears likely that the applicant has continued in sole receipt of rent from K Street, (as indeed apparently has the respondent received rental from Town T).
There is nothing in the material which allows me to make any form of assessment of the value of the occupation of the former matrimonial home, or the total rental received by the applicant from K Street (save that in her Financial Statement of 9 November 2012 it says “tenant vacated – [K Street, Suburb C] - $350.00 per week”). The Financial Statement of the respondent disclosed average weekly rental from Town T of $900.00 per week.
Upon balance, I think there should be no adjustment in either parties’ favour based upon s 90SF(3) factors, as the various factors counter-balance each other.
Conclusion
As has been seen, I have formed the view that the applicant has a contribution based entitlement to 40 per cent of the assets, and there should be no adjustment in either parties’ favour based upon s 90SF(3) factors.
That will therefore result in a division of the property of the parties to the relationship in the proportion of 60/40 in the respondent’s favour.
Is a 60/40 division in the respondent’s favour just and equitable?
I am satisfied that a 60/40 division is a just and equitable outcome in these proceedings. It properly reflects a just division of assets given the parties’ relatively long relationship and its financial history. Particularly:
·Such a division properly reflects the greater financial and non-financial contributions of the respondent, and the fact that he is considerably older than the applicant;
·It enables both parties to leave the relationship with a reasonable amount of capital;
·It leaves the respondent with a property which I find he is likely to attempt to develop, no doubt with a view to earning profit thereby.
Orders
The only remaining matter is as to the precise form or orders which should be made. The respondent seeks an order that he retain the B Street unit, in part because he thinks its value might be more than the agreed figure. The applicant also seeks that the B Street unit be transferred to her name solely. She further sought an order that she be required to transfer K Street to the respondent.
Under the orders which I propose, there is a net pool of assets (excluding superannuation) of $2,271,277.00. A 40 per cent share of that is $908,510.80, however because the applicant will assume full responsibility for the total liabilities in the sum of $156,757.00, it follows that she is entitled to assets of $1,065,267.80. If she were to keep the Corolla (which she intends to) and the other assets presently in her control, that would still see her entitled to $1,045,393.80 worth of assets, which is more than enough to enable her to take B Street ($930,000.00) as part of the property settlement.
The respondent’s entitlement (accepting that, in part, it includes the $340,000.00 attributable to undisclosed assets) will be $1,362,766.20, however amongst the assets which he wishes to take is the Town T property valued at $750,000.00. There is therefore no prospect of him being able to take the B Street property as part of the division of assets.
There is no justification for requiring B Street to be sold, given that it has been valued and the parties are agreed as to its value. Therefore it will be ordered to be transferred to the applicant’s sole name at the value of $930,000.00. That will then leave her with a further entitlement from the parties’ assets in the sum of $115,393.80. There are insufficient cash funds to enable that to be paid by the respondent to the applicant, and therefore it is appropriate that there be an order that K Street be sold, and that from its net proceeds of sale the applicant receive $115,393.80, with the balance being paid out to the respondent.
Otherwise the parties will retain the assets presently in their possession and under their control (including the superannuation). The applicant shall remain wholly liable for the three liabilities in her name.
I direct that the applicant bring in draft orders consistent with these reasons within 14 days of today’s date.
I certify that the preceding one hundred and twenty-five (125) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 15 May 2014.
Associate:
Date: 15 May 2014
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