Sala and Sala and Anor
[2008] FamCA 381
•30 May 2008
FAMILY COURT OF AUSTRALIA
| SALA & SALA AND ANOR | [2008] FamCA 381 |
| FAMILY LAW - PROPERTY SETTLEMENT – The identification and valuation of the pool of assets - just and equitable |
| Family Law Act 1975 (Cth) ss 75, 78, 79 |
In the Marriage of McCabe (1995) 19 Fam LR 579; FLC 92-634
In the Marriage of Sommerville (1999) 27 Fam LR 233; (2000) FLC 93-042
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Rochefoucauld v Boustead [1987] 1 Ch 196
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Black and Kellner (1992) 15 Fam LR 343; (1992) FLC 92-287
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
| APPLICANT: | Mrs Sala |
| RESPONDENT: | Mr Sala |
| SECOND RESPONDENT: | Miss M Sala |
| FILE NUMBER: | PAF | 2013 | Of | 1990 |
| DATE DELIVERED: | 30 May 2008 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
| HEARING DATE: | 18 & 19 October 2007, 23 November 2007, 11 February 2008 & 13 March 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Heazelwood |
SOLICITOR FOR THE APPLICANT: | Hemant Prakash & Associates |
| COUNSEL FOR THE RESPONDENT: | Ms Cotter-Moroz |
SOLICITOR FOR THE RESPONDENT: | Ramrakah Jenkins Solicitors/ |
| COUNSEL FOR THE SECOND RESPONDENT: | Ms L Judge |
| SOLICITOR FOR THE SECOND RESPONDENT: | George Loupos & Associates |
Orders
Pursuant to section 78 of the Family Law Act 1975, the Court Declared that Miss M Sala holds the whole of her interest in the land comprised in Folio Identifier … (“the [K] property”) upon trust for the Respondent Husband absolutely.
Within 28 days Miss M Sala shall do all acts and things necessary to transfer to the Respondent Husband all her right, title and interest in that property in Folio Identifier … (“the [K] property”).
Forthwith upon that transfer the husband shall:
(a)Cause a repayment to the First Home Buyers Scheme of the amount claimed by Miss M Sala under the scheme for the purchase of the property and indemnify the other parties and keep them indemnified in relation to any further amount owing to under that scheme, whether by way of interest or penalty or fine;
(b)Pay to Miss M Sala or as she may direct the sum of $37,775.91; and
(c)Discharge the mortgage to [… Bank] and indemnify Miss M Sala in respect of any liability under that mortgage.
In the event that the husband fails to comply with order 3 Miss M Sala shall forthwith do all acts and things necessary to sell the K property and to apply the net proceeds of sale after adjustments for rates, as follows:
(a)in the payment of all costs of sale including agents commission, advertising costs and legal fees;
(b)In the discharge of the mortgage to the [… Bank];
(c)In a repayment to the NSW Chief Commissioner of State Revenue the amount claimed by Miss M Sala under the First Home Owner Scheme for the purchase of the K property;
(d)in the payment to Miss M Sala or as she may direct the sum of $37,775.91; and
(e)In payment of the balance to the husband.
By consent of the husband and wife, pursuant to Section 79A of the Family Law Act, the orders for settlement of property made by this Court sitting at Parramatta on 30 April 1990 are discharged.
Within 60 days of the date hereof the husband shall pay to the wife $285,000.
In the event that the husband fails to comply with order 6, unless he and the wife otherwise agree in writing, he shall forthwith do all things and sign all documents necessary to sell the property situate at and known as H being the whole of the land in folio identifier … (“the [H] property”) and to apply the net proceeds of sale after adjustments for rates, as follows:
(a)in the payment of all costs of sale including agents commission, advertising costs and legal fees;
(b)In the discharge of any borrowing secured on the properties or either of them;
(c)In payment to the wife of $285,000 together with interest on that sum calculated under the Family Law Rules from the date 60 days after the making of these orders to the date of payment; and
(d)in payment of the balance to the husband.
The husband shall meet all outgoings in relation to the property at S, as well as the K and H properties and shall indemnify the wife and keep her indemnified in relation to those outgoings.
The Respondent Husband is declared the owner and retains his interest in the Mercedes Benz motor vehicle registration number … to the exclusion of the Applicant Wife and shall indemnify the Applicant Wife in relation to any debts associated with that vehicle.
10.The Applicant Wife is declared the owner and retains her interest in the Nissan Pulsar motor vehicle registration number … to the exclusion of the Respondent Husband and shall indemnify the Respondent Husband in relation to any debts associated with that vehicle.
11.Each of the husband and wife otherwise retains any property in their possession or control to the exclusion of the other, including but not limited to real estate, superannuation, shares, savings, jewellery and personal effects.
12.Each of the husband and wife is otherwise responsible for any debts incurred in their name and indemnify the other in relation hereto and in particular:
(a)The wife for her credit card debts to Visa card.
(b)The husband for his Citibank’s line of credit and his debts with Mastercard, Visa card and Amex.
13.The operation of these orders is stayed for a period of 28 days or such further time as may be agreed between the parties or ordered by the Court. The proceedings may be restored by arrangement with the associate to Judicial Registrar Loughnan and the representatives of the parties in relation to the form of the orders.
14.The papers are referred to the Principal Registrar for further referral in relation to possible revenue fraud.
IT IS NOTED that publication of this judgment under the pseudonym Sala & Sala is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: PAF 2013 of 1990
| MRS SALA |
Applicant Wife
| MR SALA |
Respondent Husband
| MISS M SALA |
Second Respondent
REASONS FOR JUDGMENT
After a marriage that spanned 34 years the husband and wife cannot agree on a settlement of their property. Orders are sought against their adult daughter, M Sala, in relation to a property.
Applications
By the Case Outline document filed on her behalf the wife seeks the following orders:
1.The Second Respondent transfer her right title and interest in [K property] being the whole of the land in folio identifier […] to the husband.
2.If the husband is unable to arrange for mortgage […] to […] Bank to be discharged in respect of the said property at [K] then the Second Respondent shall cause the said property to be sold.
3.That upon transfer to the husband or sale of [K property], whichever occurs, the Husband shall simultaneously cause to be paid to the Commonwealth of Australia Home Savings Grant Section the sum of $7,000.00. The wife’s solicitor is directed to collect such sum and post it to the appropriate Government Department.
4.The wife shall cause to be transferred to the husband all her right title and interest in [T property] being the whole of the land in Folio Identifier […].
5.The First Respondent shall transfer to the wife all his right title and interest in the property at [H] being the whole of the land in folio identifier 11/258211.
6.The wife shall pay to the husband $42,000.00 provided that such sum shall not be paid until and simultaneously with the payment by the husband of all monies owed by him to the wife pursuant to a cost order made in proceedings in suit number PAM 1582/2006 made on 11 September 2006.
During the course of final submissions I was told that the wife did not seek an order in terms of paragraph 6 of the minute but that she consented, with the husband, to an order under section 79A setting aside the earlier property settlement orders.
By an Amended Response to Application for Final Orders the husband seeks:
Orders sought by Respondent Husband
1.That [Miss M Sala] (“[M]”) be joined as a party to these proceedings.
2.A declaration pursuant to section 78 of the Family Law Act 1975, that [M] holds the whole of her interest in the land comprised in Folio Identifier […] (“the [K] property”) upon trust for the Respondent Husband absolutely.
3.That [M] within 28 days transfer to the Respondent Husband all her right, title and interest in the property situate at and known as [K]; in the whole of the land in Folio Identifier […] (“the [K] property”) and [M] shall do all acts and things necessary to cause the Respondent Husband subject to the mortgage. Should [M] require the Respondent Husband to do so, he shall refinance the mortgage and release [M] from any liability in respect of the existing mortgage to [… Bank].
4.Upon the transfer referred to in 3 above, the Respondent Husband pay to [M] a sum equivalent to her contributions in the [K] property.
5.That pursuant to Section 79A of the Family Law Act, orders made on 30 April 1990 in relation to the alteration of property interests between the parties be discharged.
6.That within 28 days of the date hereof the Applicant Wife transfer to the Respondent Husband all her right, title and interest, if any, in the property situate at and known as [H] being the whole of the land in folio identifier […] (“the [H] property”) and the Respondent Husband shall indemnify the Applicant Wife in respect of all liabilities in relation to the said property.
7.That within 28 days of the date hereof the Respondent Husband transfer to the Applicant Wife all his right, title and interest, if any, in the property situate at and known as [S]; being the whole of the land in folio identifier […] subject to any encumbrance (“the [S] property”) and the Applicant Wife shall indemnify the Respondent Husband in respect of all liabilities in relation to the said property.
8.That within 28 days of the date hereof the Respondent Husband transfer to the Applicant Wife all his right, title and interest, if any, in the property situate at and known as [K] being the whole of the land in folio identifier […] (“the [K] property”) and the Applicant Wife shall indemnify the Respondent Husband in respect of all liabilities in relation to the said property.
9.That within 28 days of the date hereof, the Respondent Husband transfer to the Applicant Wife all his right, title and interest, if any, in the property situate at and known as [T] being the whole of the land in folio identifier […] (“the [T] property”) and the Applicant Wife shall indemnify the Respondent Husband in respect of all liabilities in relation to the said property.
10.That within 28 days of the date of these orders, the Applicant Wife pay to the Respondent Husband the sum of $60,162.82.
11.That the Applicant Wife be declared the owner and retain her interest in the Collection House shares currently in her sole name to the exclusion of the Respondent Husband.
12.That the Respondent Husband be declared the owner and retain his interest in the Telstra shares in his sole name to the exclusion of the Applicant Wife.
13.That the Respondent Husband be declared the owner and retain his interest in the Mercedes Benz motor vehicle registration number […] to the exclusion of the Applicant Wife and indemnify the Applicant Wife in relation to any debts.
14.That the Applicant Wife be declared the owner and retain her interest in the Nissan Pulsar motor vehicle registration number […] to the exclusion of the Respondent Husband and indemnify the Respondent Husband in relation to any debts.
15.That each party retain any furniture currently in their possession or control to the exclusion of the other.
16.That the Applicant Wife retains any superannuation entitlements with ING to which she may be entitled to the exclusion of the Respondent Husband.
17.That each party otherwise retain any asset in their possession or control to the exclusion of the other, including but not limited to savings, jewellery and personal effects.
18.That each party be responsible for any debts incurred in their name and indemnify the other in relation hereto and in particular:
(a) The wife for her credit card debts to Visa card.
(b)The husband for his Citibank’s line of credit and his debts with Mastercard, Visa card and Amex.
19.The Applicant Wife to pay the Respondent Husband the sum of $5,000.00 pursuant to the court order dated 9 October 2007.
20.That the Applicant Wife pay the Respondent Husband’s costs of and incidentals to these proceedings.
21.Such further or other orders this Honourable Court deems fit.
By a Reply filed 9 July 2007 the Second Respondent seeks the following orders:
1. That the Second Respondent be removed from these proceedings.
2. That Order 2 of the Response to an Application of (sic) Final Orders in these proceedings be dismissed.
3. That the First Respondent pay the Second Respondent’s costs of and incidental to these proceedings.
4. Any such further orders that this Honourable Court deems fit.
The hearing
The hearing was originally listed for two days in October 2007 and eventually took five days, the last of which was in March 2008. The matter was listed for hearing on 18 & 19 October 2007. By the conclusion of 19 October 2007 there was an issue about the valuation of a property that could not be resolved. Leave had been granted for a further expert on that issue and he attended at the property but refused to deliver himself of a valuation. As a result the proceedings were adjourned part heard to 23 November 2007. At the point of the adjournment the husband was in the course of cross-examination by counsel for the second respondent. Thus there remained the finalisation of that cross-examination, re-examination of the husband, the case of the second respondent, any cross-examination on the valuation issue and submissions.
On 23 November 2007 the evidence of the parties was completed but it was not possible to complete the experts’ evidence on the valuation issue. Although the experts had conferred in relation to the valuation of a property, the original expert had not had an opportunity to consider the comparable properties relied on by second expert and therefore there was no outcome from their conference. At all times the husband and wife were both opposed to the sale of the property as a method of identifying its value. I was asked to adjourn the proceedings part-heard yet again and granted that application. The matter was adjourned to 11 February 2008 with directions to address updating the case outline documents and schedules of assets and liabilities.
On 11 February 2008 two valuers, Messrs C and R gave evidence concurrently. At about 12.30 pm that evidence concluded and submissions commenced. At about 4.25 pm learned counsel for the wife was addressing a disputed issue in relation to the list of assets and liabilities. The husband sought credit for $64,570 spent on repairs to three properties of the parties. The evidence of payment was an invoice of E Property Group. Learned counsel for the wife sought information as to whether this was an arms length company (ie. a company independent of the husband). Learned counsel for the husband sought instructions and reported to the court, among other things, that it is an arms length company. It was then asserted by counsel for the wife that a company search showed the husband as a shareholder and office holder of a company bearing the same ACN as that shown on the E Property Group invoice. It was further asserted that the wife would give evidence that the phone number shown on the invoice diverted to a message recorded by the husband. At that remarkable point the matter was stood in the list in order that the parties could agree on a program to move the case forward. When the matter resumed counsel for the wife said that he would want to re-open in relation to the issue of the repair work and the husband’s financial circumstances but would not be able to do that until some enquiries had been made and that would take about four weeks. He also sought orders restraining the husband in relation to the company assets.
Counsel for the husband said that the husband had been an office holder of a company with a similar name but that that company was no longer trading. I understood the husband’s case to be that his role in that company was a mere formality, necessitated by his holding a real estate licence. The husband’s counsel then said that the husband no longer sought contribution from the wife for the $64,570 and that he withdrew his agreement to the values of the items on the list of assets previously handed up. It was not clear to me what connection there might be between those two propositions. It was not clear, despite open discussion on the issue, whether the withdrawal of consent about values affected anything other than personalty. Counsel for the husband announced that she and her instructing solicitor would be withdrawing from the case. I was not told why. The matter was further adjourned to 13 March 2008 with leave to restore. The husband activated that leave and sought interlocutory orders to facilitate payment of his legal fees. On 29 February 2008 the husband and the wife’s counsel appeared and orders were made, including provision for a release of funds for the husband’s legal fees.
On 13 March 2008 the wife was present and represented. The husband appeared in person. The second respondent and her lawyers had earlier been excused from further appearances. Each of the husband and wife relied on a bundle of documents[1] comprising written submissions, orders sought, lists of assets and liabilities and a table showing the effect of the order sought. The husband’s bundle was marked Exhibit A and the wife’s, Exhibit B.
[1] The husband’s bundle was marked Exhibit A and the wife’s Exhibit B.
Leave was formally sought and granted to both the husband and wife to re-open in relation to the question of the connection, if any, between the husband and E Property Group. Each of them entered further documents into evidence and after providing a proof of evidence to the husband, the wife gave further evidence in chief. She was cross-examined and re-examined and the husband gave evidence in support of a case in response, was cross-examined and re-examined. Final submissions were made and judgment was reserved.
Issues for determination
The issues for determination as between the husband and wife on one side and their daughter, the second respondent on the other, are:
Is the beneficial ownership of the K property held by the second respondent or the husband?
What financial adjustments, if any, are required following the determination of that issue?
The issues for determination as between the husband and wife are:
The value of the H property;
Which of them should retain the H property;
The connection between the husband and E Property Group and the implications of that connection;
Arguments about amounts to be added back as notional assets or allowed as joint debts.
Short History
As at the last day of the hearing the wife and husband were 55 and 58 years of age respectively. They were married in December 1972 and separated for the last time on 7 May 2006.
Children
They have two adult children:
O Sala who was born in February 1975 and as at the last day of the hearing was 33 years of age; and
M Sala
(the second respondent) who was born in January 1981 and as at the last day of the hearing was 27 years of age.
Background Facts
The husband and wife were married in The Pacific Islands in December 1972.
The husband owned a new car, a block of land in The Pacific Islands and had $13,000 in savings. From 1968 to 1976 he was in permanent employment with N Bank, W Bank and B Bank. He also says that he worked for the D Bank in 1975.
The husband and wife entered Australia on visitors’ visas in January 1974. They worked in various jobs over the next two years.
The husband and wife travelled to New Zealand in December 1974 or early 1975.
O was born in February 1975. The parties employed a baby sitter.
The parties’ evidence does not quite correlate but the arrangement was something like – the husband and wife returned to The Pacific Islands in May 1975, travelled to Australia in January 1976, went back to New Zealand in July 1976 and to The Pacific Islands in April 1978.
While in New Zealand the husband and wife both had paid employment, for much of the time both with G Company.
The husband and wife built a house on the husband’s land in a town in the Pacific Islands. The cost of the house came from savings and borrowings. They sold that house in October 1978 to the husband’s brother for $24,000 and migrated to North America.
In North America the wife worked as a process worker. The husband worked for M Company limited as a Consultant and later, a Manager. In 1979 the husband bought the business where he was employed and changed the name to MP Limited. The parties then both worked in that business which produced publications.
In 1980 the husband and wife purchased 2 properties in North America. The wife says they cost a total of $60,000. The husband says that they cost $60,000 and $75,000 respectively. I suspect that neither is correct unless the North American and Australian dollars were of equal value at that time but nothing turns on this issue. The deposits came from savings and business income and both properties were mortgaged. The parties lived in one property and rented the other out, the rental being applied to the mortgages.
M was born in January 1981.
In 1983 one of the publications was sold.
In 1984 the husband and wife purchased a third property in D, North America for $120,000, fully borrowed.
In 1987 the husband and wife commenced realising their assets in North America. The husband says the business was sold in 1988 for $30,000. He says that the three properties were sold for a net $200,000.
The husband and wife left North America in August 1988 and had a 6 week holiday in the Pacific Islands. They arrived in Australia in October 1988. The wife says they came to Australia with approximately $500,000, the husband says they had $230,000.
In Australia the husband undertook a 1 year Real Estate Course during 1989. The wife says she had paid employment with S Company until about December 1990 and she supported the family. The husband contends that he had an AUSTUDY allowance and that he paid rent and later, instalments on the T property from that allowance, part-time work and savings. The husband asserts that he received over $19,000 in the 1989 calendar year for the allowance and part-time work.
The husband and wife purchased land at T for $65,000 and in October 1988 work commenced on the construction of an A.V. Jennings home on that land at a cost of $85,000. Those two sums came from the parties’ savings. They then invested $50,000 in the name of O with Farrow Mortgage trading as Pyramid Building Society. The husband says that that investment was lost.
The parties separated on 8 December 1989. The T home was not yet completed. The husband travelled to the Pacific Islands on that date. The husband says he returned to Australia in January 1990 and the wife says he returned in April 1990.
The construction at T was completed in December 1989 or January 1990 and the wife and children moved into the property.
The wife says that upon his return to Australia in April 1990, the husband commenced living at the T property. The husband says that he has never lived at T.
Consent orders were made on 30 April 1990 in proceedings between the husband and wife, by this Court at Parramatta, to the following effect:
·The husband was to forthwith transfer his interest in T property to the wife and she was to indemnify him in relation to that property;
·The husband was to retain the investment with the Farrow Corporation;
·$15,000 of the settlement to the wife was deemed to be lump sum maintenance for M and $15,000 for O;
·otherwise the parties retained what they had.
The husband says that in the intervening period Pyramid Building Society went into liquidation and as a result, the Farrow Corporation investment was lost.
In May 1990 the husband travelled abroad. The wife says that the husband stayed at the T property in October 1990. The husband says that he has never lived at T.
In November 1990 the husband moved to P.
From 1990 to 2001 the husband worked in various positions in the Real Estate industry. He has some periods of unemployment between jobs. He studied to improve his qualifications from 2002 to 2006. Since 2003 he joined a partnership undertaking casual maintenance work from home.
The wife left S Company and applied for the Sole Parent Benefit in about December 1990.
On 5 September 1991 the wife filed an Application for Dissolution of Marriage.
In October 1991 she travelled to the Pacific Islands for her father’s funeral. The husband minded the children.
On 11 December 1991 the wife’s Application for Dissolution of Marriage was dismissed.
In December 1991 the husband and wife travelled to the Pacific Islands for a wedding and they were reconciled.
In May 1992 the wife returned to the paid workforce with C Company.
On 22 July 1994 the husband purchased H property. The purchase price was $300,000. $30,000 came from the husband’s savings as did $8,990 for stamp duty and $8,500 in solicitors’ costs and mortgage fees. The husband moved into the property, under licence in May 1994.
On 22 July 1994 the wife and children also moved into the H property. The wife says that she and the husband resided at H property until final separation. The children were then 19 and 13 years of age and at University and in Year 9 at H High, respectively.
The T property was rented out and $200 per week from that rent was used to pay the outgoings on that property.
In 1996 the husband and wife purchased a property at L for $280,000. The deposit of $28,000 came from savings and the remainder of the price was borrowed on mortgage.
On 13 September 1999 M commenced work at a Bank.
In December 1999 O was married. The wife paid almost $20,000 for the wedding.
In 2002 the property at K was bought in the sole name of M, the second respondent. In September 2002 the Bank approved a loan to M for the purchase of K property. The property was purchased for $440,000. M paid part of the stamp duty of $8,000. On 15 October 2002 she received $7,000 from the First Home Owners Grant. The husband and wife paid the deposit of $22,000 and a further sum of the order of $19,000. At all times the property has been rented out.
In 2003 the husband renovated or caused renovations to the H property.
In December 2003 M moved out of the home at H.
On 17 July 2004 the wife paid $4,000 towards M’s Nissan Pulsar car.
In 2005 the husband and wife bought S property.
On 31 March 2006 the husband and wife made a joint Application for Dissolution of Marriage, showing a separation date of 30 April 1990.
On 30 April 2006 the husband filed an Application for Dissolution of Marriage.
In 2006 the wife lodged a caveat against H property.
On 5 May 2006 the husband withdrew $170,000 from the Westpac Classic Plus account.
The parties separated for the last time on 7 May 2006.
On 8 May 2006 the wife granted a charge to her solicitors over property.
On 10 May 2006 the wife filed a Response to the husband’s divorce application alleging that the parties separated on 8 December 1989 and reconciled in early 1992.
On 15 May 2006 the husband lodged a caveat in relation to K property.
On 15 May 2006 a Decree Nisi of Dissolution of Marriage was pronounced.
On 31 May 2006 the Decree was rescinded. The Federal Magistrates Court found that the husband and wife separated on 7 May 2006.
On 11 August 2006 the husband withdrew $100,000 from the Westpac Classic Plus account.
In September 2006 the Federal Magistrates Court ordered that the husband pay the wife’s costs of the divorce proceedings on an indemnity basis. Those costs have not been paid. The husband asserts that the assessment process in relation to those costs was abandoned. It is common ground that the order has not been satisfied.
On 15 June 2006 M swore an affidavit on behalf of her mother in connection with divorce proceedings between the husband and wife in the Federal Magistrates Court at Parramatta. It was her evidence that the husband is the beneficial owner of the K property.
On 31 January 2007 the wife’s solicitors lodged a caveat over the H property.
M asserts that since 30 April 2007, she has been meeting the mortgage payments on the K property.
On 25 June 2007 M leased out the property at K.
On 9 October 2007 directions were made in terms agreed between the parties to the effect that a further valuer, a Mr K, be jointly instructed to value the H property and for a conference between himself and the earlier appointed valuer, Mr C in relation to any competing opinion and for the preparation of a statement identifying areas of agreement and disagreement etc.
It transpired that the arrangements miscarried and that on the first morning of the hearing I was told that Mr K had attended at the property but had not and would not deliver himself of an opinion in relation to its value. I stood the matter down and asked learned counsel for the husband and wife to agree on a valuer or a mechanism for identifying a valuer to provide a further valuation of the H property.
On 29 February 2008 the following interlocutory orders were made:
1.That within 7 days from today’s date the wife produce to the Court all documents and statements within her possession or control showing interest and dividends earned from May 2006 to date, on all savings, term deposits and shares held with banks and with the Collection House.
2.That as soon as practicable the former solicitors for the husband, Ramrakah Jenkins, provide to the wife’s counsel at the cost of the wife, a copy of any St George Bank account statements for the period 1 July 2007 to date in respect of Account BSB […], Account No. […] and leave is granted to the wife’s counsel to give notice of that order to the solicitor by telephone as soon as practicable.
3.That the husband forthwith do all things to cause production to the Court and to the solicitor for the wife of a copy of cheque number 25 on the said St George account.
3.The husband is to forthwith sign an authority in a form which is Exhibit A authorising the solicitors for the wife to act in his stead to recover a presented cheque AND it is noted the husband has signed the authority.
4.That the Orders of 19 October 2007 restraining the husband from dealing with funds in his St George bank account so as to reduce the balance below $130,000.00 pending further order, be varied to provide that the husband is restrained from dealing with the funds in that account so as to reduce the balance of that account below the sum of $100,000.00, except for the purpose of withdrawing in the form of a cheque payable only to his solicitors the sum of $74,000.00 representing the payment of past costs of $64,000.00 and future costs of $10,000.00 and the withdrawal of a total of $8,000.00 for the purposes of the husband’s living expenses and necessary outgoings up to and including 13 March 2008.
5.In the event that either party believes that the proceedings cannot be heard to conclusion on 13 March 2008 that party is to forthwith notify the other party and if there is no agreement about the matter either proceedings on that date or being adjourned to another date, is to forthwith cause the matter to be re-listed by arrangement with Judicial Registrar Loughnan’s associate for that issue to be determined.
Credit and Submissions
The evidence of the witnesses
The witnesses called for cross-examination were the parties and two experts.
The wife was a poor witness. She does not have a good recollection of events and regularly changed her evidence.
The husband’s evidence was affected by some rather unusual attitudes to his financial disclosure. He is a man of obvious sophistication and yet reported as the amounts he owes to various lenders, the credit limit on the facility in question rather than the extent to which the facility was drawn at the relevant date. He was pedantic, particularly in cross-examination and yet was put to correcting or withdrawing his own written testimony upon realising that it was inaccurately expressed. His evidence about his understanding of concepts such as equity in real property and ownership, beggars belief. It is not credible that when he told FM Donald that he had no equity or ownership of any kind in the K property, he meant to convey only that he did not have legal title to the property.
M Sala was a poor witness. M said in cross-examination that her affidavit of 15 June 2006 was true. That was her evidence but it is not her case. I refused her counsel’s application to allow further oral evidence which I understood would have the effect of repudiating her earlier evidence. M was a poor witness – vague, diffident and unreliable. For example it is her evidence that when she attended on a solicitor, Mr Nott in May 2006 to affirm affidavit for her mother about her parents’ separation, she knew the document in question was an affidavit. When she attended on the same solicitor for the same purpose in June 2006 she would have it that she did not know that the relevant document was an affidavit.
The valuers, Messrs C and R, gave oral evidence concurrently. Their credit is not in issue. As to preferring the opinion of one over that of the other, that is discussed later in these reasons.
Submissions
The written submissions made on behalf of the wife were:
1.The first step in the process required to be undertaken by s.79 is that the property of the parties must be identified (Barker and Barker (2007) 36 Fam LR 650). This step includes identifying title to property.
2.This raises immediately the question for determination of whether or not the Second Respondent has an interest in the property at [K].
3.The question of the determination of the interests in [the K property] can be reduced down to an assessment of the evidence given by the two Respondents.
4.The Second Respondent has not established that she is the beneficial owner of the property. She carries the onus of proof. She has confirmed the statements made by her in an Affidavit sworn in support of the mother’s cost application in the Federal Magistrates Court. The Second Respondent adhered to her Affidavit filed 26 June 2006 in the Federal Magistrates Court (Exhibit 9).
5.The Second Respondent is caught by her prior inconsistent statement. The dictionary, Evidence Act 1995 defines the following terms in the following manner:-
5.1Prior inconsistent statement of a witness means a previous representation that is inconsistent with evidence given by the witness.
5.2Previous representation means a representation made otherwise than in a course of giving evidence in the proceedings in which evidence of the representation is sought to be adduced.
5.3Two case authorities are apposite to the proposition relied upon by the Applicant that although the Second Respondent attempted in her evidence in these proceedings to resile from the contents of Exhibit 9 she was unable to do so during cross-examination.
5.4In Lee -v- The Queen [1998] 195 CLR 594, Gleeson C.J., Gummow, Kirby, Hayne and Callinan J.J. held as follows:-
“39.At common law, a previous inconsistent statement put to a witness was evidence only of the fact that the witness had made an inconsistent statement; it was not evidence of the truth of the contents of that earlier statement”
5.5However in Adam -v- The Queen [2001] 207 CLR 96, at p109 Gleeson C.J., McHugh, Kirby and Hayne J.J. held:-
“37.…But that difference brought about by a s.60 (of the Evidence Act 1995) was one of the significant alterations in the rules of evidence that the Act was intended to effect. No longer were tribunals of fact to be asked to treat evidence of prior inconsistent statements as evidence that showed no more than that the witness may not be reliable. The prior inconsistent statements were to be taken as evidence of their truth.”
5.6This Court is bound to follow Adams case and to accept that the Second Respondent is a trustee. To do otherwise, is to err in law.
6.If the Second Respondent is a trustee what conclusions flow?
6.1She has made no contribution to the acquisition of the property by way of execution of the mortgage.
6.2She is protected by s.40 and s.59 of the Trustee Act 1925 (NSW) and is entitled to reimbursement in respect of any monies paid “in or about the execution of her trusts or powers.”
6.3The fact that the Second Respondent entered into a mortgage is not a contribution to the purchase of the subject property. The Court will find that it was a term of the trust that the Second Respondent would enter into the mortgage. Indeed such a transaction is recommended pursuant to s.34 of the Trustee Act 1952 (NSW).
6.4Equity will protect a beneficiary from the conduct of the registered proprietor both before and after registration (Bahr –v- Nicolay (No.2) (1998) 62 ALJR 269 at 281 and 288 where Brennan J. said:-
“The title of a purchaser who not only has notice of an antecedent unregistered interest but who purchases on terms that he will be bound by the unregistered interest is subject to that interest. Equity will compel him to perform his obligation.”
The further comments made by Brennan J. are analogous to these proceedings where His Honour said:-
“A registered proprietor who has undertaken that his transfer should be subject to an unregistered interest and who repudiates the unregistered interest when his transfer is registered is, in equity’s eye, acting fraudulently and he may be compelled to honour the unregistered interest. A means by which equity prevents the fraud is by imposing a constructive trust on the purchaser when he repudiates the unregistered interest. …”
7.As a trustee the Second Respondent has expended monies either in relation to the preservation of the asset or in connection with monies which may be classed as payments in preservation of the trust property. Similarly the Second Respondent is obliged to account for any profits received.
8.It may be assumed that the Second Respondent was not exceeding her powers as a trustee in leasing the subject property (see s.36 Trustee Act 1925). Therefore the Second Respondent is entitled to be reimbursed the monies she has paid in respect of the preservation of the assets, including if considered appropriate, a sum for interest. Excluding the home savings grant payment those payments are:-
8.1Contribution towards purchase price $8,000.00
(See annexure “G” of the Affidavit of
[M Sala] filed 5 October 2007)
8.2By reference to the husband’s Financial Statement filed 28 September 2007 it seems reasonable to credit the Second Respondent with payments of $512.00 per month that is November 2006 to February 2008.
15 months x $512.00 $7,680.00.
8.3An appropriate sum to be allowed to the Second Respondent would be $20,000.00.
9.Notwithstanding the apparent illegality of the Second Respondent in obtaining a first home buyers grant the Court ought to follow Nelson –v- Nelson (1995) 18 CLR 538 and hold that the Second Respondent is the trustee for the husband. The Court may follow Nelson and order that the First Respondent refund any home savings grant paid to the Second Respondent to the Commonwealth of Australia. There will be monies payable to the Second Respondent and such monies can be the source of the funds needed to satisfy that obligation.
10.As the husband as beneficial owner has obtained the benefit of the home savings grant he should be obliged to meet those payments, but as the property will ultimately be regarded as the property of the parties the parties are equally obliged to share such payment.
Adjustment of Assets Between Wife and Husband
11.The husband and wife through their Counsel have submitted that there should be an equal distribution of assets as between the parties. Those assets would appear to be as contained in annexure “A”. The effect of the proposed orders sought is contained in annexure “B”.
12.The Applicant seeks the orders sought contained in annexure “C”.
The written submissions made on behalf of the husband were initially confined to the issue of the K property. The husband seeks a declaration under section 78 that M holds the beneficial interest in the K property on behalf of the husband pursuant to an express or constructive trust. He seeks that M be paid $37,775.91, being the net effect of payments made by her and drawings by her, being a calculation put to her and accepted by her in cross-examination.
It is submitted that section 78 can bind M because she is a party to the proceedings. Indeed it is submitted that all of the parties agree that the power exists. First, it is submitted that there is an express trust. As to certainty of intention, identification of the subject matter and the object – there is the oral confirmation in these proceedings of the truth of her affidavit of June 2006 in earlier proceedings making clear that she holds her interest, in K, for the husband. It is submitted that her evidence leaves no room for a presumption of resulting trust or of advancement. As to the need for writing it is submitted that the affidavit satisfies section 23C of the Conveyancing Act.
In the event that an express trust is not found it is argued that a constructive trust applies because M Sala knows that the husband has acted to his detriment on the understanding that he had the beneficial interest in the property and it would be unconscionable to allow her to reject his claim.
M Sala seeks that the application under section 78 be dismissed. It is submitted that the onus is on the husband and wife to establish a basis for going behind the legal title of the K property. The status of M’s title is to be established on equitable principles. It is submitted that the husband does not have clean hands. It is submitted that the presumption of advancement applies. It is submitted that the actions of the parties at the time confirm the intention of the parties to benefit M – the mortgage loan obtained by M from her employer; the securing of the first home buyer’s grant in M’s name; the fact that M claimed tax relief for associated costs, with the husband’s knowledge; the fact that the caveat was not lodged by the husband until four years after purchase; the fact that M made mortgage payments and paid rates and taxes from her income tax refunds and rental proceeds. It is submitted that M Sala contributed to the extent of the borrowing made from her employer and thus her contributions amounted to 89.52% of the purchase.
The husband appeared without legal representation on the final day of the hearing but he relied on written submissions, presumably prepared by a lawyer, dealing with the following specific topics:
· Reasons why the husband ought retain the H property;
· Reasons why the Valuation of Mr C ought be preferred over that of Mr R;
· Reasons why the wife ought contribute towards half of expenses met by the husband since separation;
· Reasons why the “gifts” of the jewelleries, car, and $6,260 paid by the wife to M and O (the daughters) ought be added back;
· Reasons why the costs order made by the Federal Magistrates Court ought not affect any payment between the parties;
· Reasons why the costs order that the wife pay $5,000 to the husband made by consent by this court on 9 October 2007 ought affect any payment between the parties;
Prior orders for settlement of property
On 30 April 1990 orders for settlement of property were made by this Court sitting at Parramatta in terms agreed between the husband and the wife. In the normal course those orders would have exhausted the Court’s jurisdiction in relation to their property.
Section 79A makes provision for the setting aside of orders for settlement of property in certain circumstances. The section provides:
79A(1) [Grounds on which order set aside, varied] Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a)there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b)in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c)a person has defaulted in carrying out an obligation imposed on him by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d)in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA) ), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e)a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
(1A) [Application with all parties' consent] A court may, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, and with the consent of all the parties to the proceedings in which the order was made, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
Here, the husband and wife join in an application to set the earlier orders aside. In those circumstances the orders will be set aside and any argument that there is no jurisdiction to deal with the property of the husband and the wife is resolved. In any event there is authority for the potential for a setting aside of property orders to be implied from conduct. See In the Marriage of McCabe (1995) 19 Fam LR 579; FLC 92-634, In the Marriage of Sommerville (1999) 27 Fam LR 233; (2000) FLC 93-042.
The beneficial ownership of the property at K
A key issue in the proceedings relates to the beneficial ownership of the property at K. The second respondent, M Sala, who is the daughter of the husband and wife, holds the legal title to the property. Her parents say that her father is the beneficial owner of the property. It is M’s case that she is the beneficial owner.
The husband and wife seek orders under section 78 in relation to that property. Their daughter, M Sala opposes those orders.
The approach in proceedings under section 78
Section 78 provides as follows:
[s 78] s 78 Declaration of interests in property *
78 (1) [Court may declare interests] In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
(2) [Consequential orders] Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.
Thus there is power, in the context of proceedings between the parties to a marriage, for the Court to make a declaration as to the rights that a party has in property. That can relate to property in the name of a person who is not a party to the marriage and where that person is also a party to the proceedings, the declaration and consequential orders can affect the rights of that third party.
M gives evidence in these proceedings that in August 2002 there was a conversation with her parents to the following effect:
Husband: “You work at [… Bank]. You should buy a house now because you can obtain the staff benefit of a reduced home loan.”
Wife:“ I agree, you should buy your own property because if you marry, you will have a property to move into instead of having to rent.”
[M]:“I will buy a house if you and mum assist me with the deposit.”
M deposes that she trusted her father’s recommendations (presumably about the particular purchase) because he was her father and a licensed Real Estate Agent. The purchase price of K property was $440,000 and the husband and wife paid a deposit of $22,000. M says she believes that the deposit was a gift to her from her parents. M received the First Home Owner grant of $7,000 and she paid $8,000 towards the stamp duty. She says that her parents paid $18,810.47 being the remaining shortfall on the purchase after she contracted to borrow $396,000 from her bank. She deposes that she received the rent and paid the mortgage payments and other outgoings on the property.
In an affidavit not read by her in these proceedings but sworn on 15 June 2006 and filed on behalf of her mother in divorce proceedings between the husband and wife in the Federal Magistrates Court at Parramatta, M gave very different evidence. There, she contradicted her evidence in these proceedings and generally corroborated that of her father. She deposed:
…
6.In about mid 2003 a residential property, [K property], was purchased by my Father in my name. The purchase price was $420,000.00 and the mortgage, with [… Bank] was $420,000.00. The mortgage is in my name as well as my Father’s name. The balance is now about $300,000.00.
7.I made a payment of $8,000.00 stamp duty towards purchase of the property.
8.I have not resided in the property and although it is in my name I regard it as my Father’s property.
9.The property is currently leased.
10.I have never lived in the premises. My Father receives the rental income which is now about $440.00 per week.
11.The mortgage repayments are approximately $900.00 per fortnight.
12.My father makes up the balance of the payments and pays the rates and other outgoings.
13.If the property was to be sold I would expect my Father to retain the net equity less the direct contributions that I made.
14.My Father and I do not have a written agreement about the property.
15.At the time of purchase of the abovementioned property he said to me “we will get a loan together to buy a house.” “It will be an investment property.”
16.At first, I thought the purchase would be for the benefit of both of us but then he did things differently. I was not expecting to be the only person on title. He attended to making all the loan arrangements. I have not exercised any control over management of the property, have not occupied it, paid the rates or made any payment to the mortgage.
17.I therefore do not regard the property as my own.
18.….
When she was asked about that document in cross-examination undertaken on behalf of the wife before me, M said that she was not aware at the time she affirmed the document that it was an affidavit but she confirmed that the contents were true.
It is the husband’s evidence that he said to M.
“As an investment property, it would be in your name and the mortgage will also be in your name as you will be able to get a reduced interest rate with the bank where you work. If you sell the property, the net proceeds will be mine unless (sic) any contribution that you make.”
And that she replied:
“That is alright, dad.”
It is the husband’s case that the K property was always to be his property. In his cross-examination he was taken through evidence he gave before Federal Magistrate Donald in September 2006 in proceedings related to the costs of divorce proceedings conducted in that Court. He confirmed that when cross-examined about the K property he agreed that he had “no equity or ownership of any kind” (in that property). The husband is a real estate agent and a person of some sophistication. It stretches belief that he was trying to convey to the learned Federal Magistrate that he had no legal interest but the entire beneficial interest in the property. The husband agreed that he had planned to assist M to buy a property. It is his evidence, however, that in relation to the K property, even though it was put in her name, she obtained the First Home Owner Grant and she took out the mortgage in her name, when he contributed the deposit he was intending to buy the K property for himself rather than help his daughter. He refers to the acknowledgement contained in M’s affidavit of 15 June 2006 to the effect that the K property belonged to him.
In cross-examination of the wife it transpired that it is the wife’s understanding that the husband always intended that he would be the beneficial owner of the K property but that he may have left M with the impression that it would be her house. The wife says that during 2002 she wanted to move away from the husband and she and M spoke about finding a property that they could move into together. However, it is the wife’s case that the K property was never suited or put to that use. She says that she told M that it would not be suitable to live in because it is not on a public transport route. The wife’s evidence is that she was afraid of the husband. She asked M to give evidence to support her in divorce proceedings before the Federal Magistrates Court.
This issue is greatly complicated by the conduct of the parties. It is arguable that the parties have either conspired at a fraud on the revenue or have given false evidence or both. If the husband and wife are correct then they encouraged their daughter to obtain the First Home Owner Grant in relation to a property that was not hers and to obtain finance from her employer for a similar purpose. In addition, the husband gave evidence to the Federal Magistrates Court that is inconsistent with his evidence before me. If the husband and wife are wrong then all of the parties gave false evidence before this Court and the wife relied on testimony from M given to the Federal Magistrates Court, that they both knew to be false.
In Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364 the High Court held that there is a rebuttable presumption that if a parent pays for property in the name of their child, then it is presumed to be a gift:
“But if the purchaser is the father of or a person in locus parentis to the legal owner, the presumption arises from the relationship that the father intended to purchase the property to advance his child and to make the child not only the legal but also the beneficial owner of the property.”
The Court also held in that case that subsequent acts and declarations by a parent ‘are not evidence to support the trust, although subsequent acts and declarations of the child may be so.’ Thus paragraph 8 of M’s affidavit sworn in June 2006 that: “I have not resided in the property and although it is in my name I regard it as my Father’s property” may be sufficient to rebut the presumption of advancement.
The fact of prior inconsistent statements or of an illegal or improper purpose does not relieve me of the obligation to make a finding about the true circumstances, assuming that a finding is possible. In Nelson –v- Nelson (1995) 18 CLR 538 the High Court was dealing with a situation described by Dawson J as follows:
DAWSON J. This is a case in which a mother provided the purchase money for a house which was transferred into the names of her son and daughter, both of whom were adults. The purpose of this arrangement was to enable the mother, should she subsequently wish to purchase another house for herself, to obtain a subsidised advance upon favourable terms under the Defence Service Homes Act1918 (Cth). Under that Act, the mother would not have been eligible for the subsidised advance if she were the owner of another house.
2. More than a year and a half later the mother did purchase another house for herself. She applied for and received a subsidised advance under the Defence Service Homes Act, falsely declaring that she did not own or have a financial interest in a house other than the one for which the advance was sought. This declaration was false because the mother claimed, as she does in this litigation, that she was the beneficial owner of the house for which she had previously provided the purchase money.…..
4. The house which was in the names of the son and daughter was sold and the mother claims to be entitled to the proceeds. The son concedes his mother's entitlement, but the daughter, having fallen out with her mother, claims half of those proceeds.
As is referred to above, an advance from a parent to a child attracts the presumption that the parent intended to benefit the child. The New South Wales Court of Appeal had determined that obtaining the subsidy on the purchase of the property involved Mrs Nelson in an illegal purpose and that illegal purpose could not be relied upon to rebut the presumption of advancement in respect of the Bent Street property.
Justices Deane and Gummow said:
23. There is an interplay of three doctrines or principles. They are that concerned with the imputation or presumption of a resulting trust in favour of Mrs Nelson as the source of the purchase moneys, the countervailing presumption of advancement which would leave the equitable title to Bent Street at home with the legal title, and the effect of what was classified as the illegal purpose in the later concealment by Mrs Nelson, to obtain the subsidy for the Kidman Lane property, of what she was found always to have intended to be her beneficial ownership of the Bent Street property. Do the circumstances of the case, as disclosed by the findings on the evidence, supply sufficient reason for concluding that the equitable title to Bent Street was not at home with the legal title when Bent Street was sold?
The appeal was allowed and orders were made declaring a trust in favour of the mother but making provision for her to repay the illegally obtained subsidy. Thus evidence of the illegal purpose was allowed to rebut the presumption of advancement.
Here the presumption of advancement arises. The husband made a significant contribution to M’s purchase of the K property. He contributed over $40,000 to the initial purchase and managed the income and mortgage payments until recently. The inference is available that he made those contributions because he wanted to assist his daughter. In 2006 he told the Federal Magistrates Court that he had “no equity or ownership of any kind” in the property. M says that she had a conversation with the husband and wife whereby they suggested she buy a property and she agreed provided they helped her with the deposit. On the other hand there is a wealth of material rebutting the presumption.
The husband says that he intended to benefit himself. He says that M agreed that he would be the only one to benefit from his injections of funds. On two occasions, more than 12 months apart, before different Courts, M has given evidence to the effect that at the time of purchase she thought it would be a joint purchase with her father, later found out that she alone would be on the title but came to realise that her father did not intend that she be a beneficial owner and that she in fact had no beneficial interest in the property. The evidence of the wife is that it was always the husband’s intention that the beneficial interest in the property would be his but that M might not have known that at first. That evidence is consistent with the evidence M gave to the Federal Magistrates Court on her mother’s behalf.
The onus lies with the husband and wife if they want to disturb the legal title. They need to identify a trust if M is to be found to hold her title in the K property as a trustee. Trusts fall into two broad groups, the second group containing two elements often dealt with separately[2]:
[2] Equity & Trusts by Michael Evans published by Lexis Nexis: Chapter 12 page 294
1. Express trusts are trusts arising from express declaration, which can be effected by some agreement or common intention held by the parties to the trust…
2. Trusts arising by operation of law might be either:
(a)resulting trusts, which may arise from a failure to dispose of the entire beneficial interest in property under a settlement or other instrument creating a trust, or upon the purchase of property by one person in the name of another where there was no intention to make a gift…;or
(b)constructive trusts, which are trusts imposed by the court irrespective of the intentions of the parties, in circumstances where it would be unconscionable for the legal titleholder to deny the beneficial interest claimed by the other party;
An express trust requires certainty of intention to create a trust; certainty of the subject matter of the trust and certainty as to the object of the trust.
The husband’s evidence is that he said to M:
“As an investment property, it would be in your name and the mortgage will also be in your name as you will be able to get a reduced interest rate with the bank where you work. If you sell the property, the net proceeds will be mine unless (sic) any contribution that you make.”
And that she replied:
“That is alright, dad.”
That is very similar to the understanding of M as set out in her affidavit sworn 15 June 2006. It is similar to the evidence of the wife.
As terms of a trust go, the arrangement was unusual. For example, if the property belongs to the husband why would a decision about selling the property be left up to M? However, the agreed arrangement clearly identifies the property, the object of the trust (the husband) and an intention to create a trust (the net proceeds will be mine ).
As to the requirement of section 23C of the Conveyancing Act 1919 (NSW) for writing, as is submitted on behalf of the husband, that part of M’s affidavit may itself be sufficient to meet that requirement[3]. The writing need not be made at the time the trust is declared[4].
[3] Section 23C Conveyancing Act 1919 (NSW)
[4] See Rochefoucauld v Boustead [1897] 1 Ch 196 @ 206
In any event the lack of writing may not be fatal to the case of the husband and wife on this issue. Given the sworn testimony of M before two courts it would probably be unconscionable for her to repudiate her father’s beneficial interest in the K property.
I do not need to make that alternate finding. I am satisfied that there is an express trust. I find that the Second Respondent holds the title of the K property on trust for her father, the husband.
In this case consequential orders are needed and can effectively bind the second respondent as she is a party to these proceedings. If practicable, the property should be transferred to the husband. The Second Respondent should be reimbursed the moneys she invested in the property. She conceded that she put in a net $37,775.91 (being $48,907.42 paid in and $11.131.51 drawn out) into the property. I will order the $7,000 First Home Owner Grant be repaid.
It may be that there are other consequences of the claim on the First Home Owner Grant Scheme. The web site of the NSW Office of State Revenue contains the following:
There are substantial penalties for making false or misleading statements in, or in connection with, an application for first home benefits.
The Office of State Revenue, as part of its role in administering the First Home Owner Grant Act 2000, conducts investigations and compliance checks to ensure applicants are entitled to receive the grant. A penalty of up to $11 000 may be imposed for knowingly making a false or misleading statement in, or in connection with, an application.
In addition, the Chief Commissioner of State Revenue can, as a result of an applicant's dishonesty, also require the applicant to repay the grant or benefit and impose a further penalty equal to the value of the grant paid.Having noted that, there is no evidence before me on this issue and I cannot take any such consequences into account. At the conclusion of these reasons I discuss the referral of the papers in these proceedings.
If the transfer of the property to the husband is not practicable, because the mortgage cannot be refinanced by the husband or for any other reason, the property must be sold, the necessary payments and adjustments made and the remaining proceeds paid to the husband.
The approach in proceedings under section 79
Once the property orders made on 30 April 1990 are set aside, there is jurisdiction to determine the competing claims by the husband and wife under section 79.
The case law reveals that a permissible approach to the determination of an application brought pursuant to the provisions of s 79 involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the husband and wife at the date of the hearing. Second, I should identify and assess their contributions within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the husband and wife expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the husband and wife established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [5]
[5] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the husband and wife at the date of the hearing. There is some controversy as to the pool of assets and liabilities.
There are circumstances which the Court has found in other cases, to have justified the inclusion of property that no longer exists, in the pool of property for settlement. Similarly the Court has sometimes found that debts that do exist should not be included in the list that goes to make up the net pool of assets. In In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
The matters about which the husband and wife disagree are as follows:
Pulsar motor vehicle being used by M at a value of $2,500
The husband submits that the Nissan Pulsar motor vehicle used by M is an asset of the marriage and should be included in the pool of assets as something in the hands of the wife. It is the wife’s evidence that she allows M to drive a family Nissan Pulsar motor vehicle. She concedes that the car has a value of $2,500. In re-examination the wife conceded that the car was not a gift and that if M obtains another car, she will give the Pulsar back to the wife. On that basis I will include the Pulsar as an asset in the hands of the wife, at a value of $2,500.
Gift of $6,260 by wife to M
It is the wife’s evidence that she paid $6,260 in relation to the K property as follows:
Date Advance Amount 16/8/06 Cash to M $1,000 20/10/06 Mortgage payment $5,000 2007 Tree cutting $220 2007 Window screen $40 $6,260.00
In cross-examination the effect of the wife’s evidence was that at some point M said to her: “I don’t have money for the rent and I can’t pay the mortgage.” The wife says that she never asked M to repay the advances. She says that the moneys came from her wages and savings.
The husband seeks that these advances, together with gifts of jewellery be read back into the list of assets. The submission is that the wife disposed of these assets; it is immaterial whether the advance was by way of gift or otherwise; the wife did not obtain the husband’s consent and therefore she is responsible for the dispositions.
On the face of it only one of these payments would appear to be a gift. The mortgage payment increases the equity in an asset of the husband and wife. The wife was not asked and did not say whether the payment was made to M or directly off the mortgage. It is possible that the $5,000 payment represents a double counting of the $48,907.42 of advances credited to M above. I take it that the tree cutting and window screen payments now benefit the husband and wife. There is no evidence as to amount that came from wages and the amount that came from savings.
In those circumstances it is not safe to assume that there was a preliminary distribution by the wife of funds that would otherwise have been available now, for purposes that have not largely benefited the husband and wife in any event. The husband bears the onus of establishing that the moneys should be read back as a notional asset in the hands of the wife. He has not discharged that onus.
List of outgoings
In effect the husband makes a claim for what he says was the shortfall of the income compared to the outgoings incurred by him in the management of the financial affairs of the marriage since separation. He asserts that the outgoings are by way of disbursements and make no provision for his time. Through her counsel the wife would accept so much of the accounting that reflects a profit in the hands of the husband but no more. Similarly, I do not accept the husband’s claim in relation to the alleged net liability incurred in his stewardship of the investment properties for himself and the wife, since separation. Despite the matter being raised at various points during the trial and the efforts outside Court hours of the legal representatives of the husband and wife, the husband was not able to put his supporting material into evidence.
The husband’s St George Bank account
According to exhibits A and B, it is the wife’s case that the St George Bank account should be included in the list of assets at $130,000. The husband seeks that it be taken into account at $100,000.
It was common ground that the account stood at about $100,000 on 29 February 2008 when interlocutory orders were made for a payment out to the husband for legal fees and living costs. The state of evidence does not permit a confident finding about circumstances prior to that time. Payments made in accordance with those orders would not be allowed against the wife, in the first instance. It may be that an order under section 117 is later made but the parties should not be required to contribute to the legal costs of another party, other than by reference to that section. I will include the account at $100,000.
Allowance for $64,570 allegedly spent on work on matrimonial properties
The husband claimed, then abandoned and then claimed again, that $64,570 spent on work undertaken by E Property Group was a proper deduction from the account. The husband purported to abandon this claim on 11 February 2008. On 13 March 2008 however, he said that he only said that to ensure the hearing was completed on the earlier day. The matter went over and therefore he seeks to include that as a joint debt. I accept that there is once again an issue between the parties on this point.
I cannot accept this claim. If the payment was made it may have been in breach of an injunction made in these proceedings. The husband sat silent behind his counsel when, after referring to him at some length at the bar table, she asserted that E Property Group was an organisation at arms length from the husband. It is not an arms length organisation. As the husband’s evidence developed, E Property Group is one of a number of trading names for an enterprise that has had connections with the husband. A search dated 11 February 2008[6] revealed the husband to be the director and one of only two shareholders of E Realty Pty Ltd, the registered office of which is the H property. The ACN endorsed on the invoice purportedly issued by E Property Group is the ACN for E Realty Pty Ltd. The husband’s evidence is that a principal of E Property Group rang him and suggested that the husband’s home phone number be endorsed on the invoice so that enquiries about the invoice would be addressed to him. That conversation itself suggests a connection between the organisation and the husband. Indeed, the husband’s evidence to the effect that on other occasions his phone number has been used by the enterprise when the principals go away, suggests something other than an arms length relationship. As I understand it, the husband does now concede that E Property Group is not an arms length organisation. Two issues then arise – First, was the work necessary, completed and completed for proper value? Second, has the husband failed to disclose another source of income and another asset? The husband bears the onus of establishing that the expense was incurred and necessary. In the circumstances, he cannot do that. I will not allow a claim against the wife for half that sum.
Paid legal fees
[6] Exhibit 13
Each of the parties has paid legal fees. Where the payments came from the parties’ own resources, in accordance with the approach cited in In the Marriage of Omacini, I am satisfied that the pool of assets for distribution would be greater but for the fact of those payments. I will read such payments back into the pool.
Value of H property
Like other aspects of these proceedings the question of the valuation of the H property has a sorry history. In the first instance there was a single expert, Mr C. His valuation was made in June 2007. On the application of the wife an order was made on 9 October 2007 for the appointment of a further single expert in relation only to the H property valuation. At the commencement of the hearing on 18 & 19 October 2007 there was advice that the second valuer refused to deliver himself of a valuation. That prevented the conclusion of the matter at that first hearing and the matter was adjourned to 23 November 2007. Subsequently, Mr R was appointed and valued the property.
The valuers disagree about the value of the property. Mr R values the H property at $685,000. Mr C puts the value at $620,000. That was a revision upwards in November 2007 from his valuation of $550,000 made in June 2007.
The husband relies on the opinion of Mr C. Notwithstanding that she seeks to retain the H property, and would therefore benefit from a lower valuation, the wife prefers the opinion of Mr R. It is submitted by the husband that Mr C is more experienced, more readily made concessions during cross-examination and his reasoning was more cogent and compelling. On the other hand it is submitted that Mr R’s reliance on land value was inappropriate; his adoption of the particular land value of $500,000 within a large range was made without any justification; his rejection of the Valuer General’s valuation was inappropriate; his assertion that values in the area increased since 2005 was without any basis; and he was unable to respond to the indicators relied on by Mr C who found that the property was “tired”.
The valuers were sworn in together and gave their evidence concurrently. It should be said at the outset that the valuers put a great deal of work into their reports and were thorough. They agree that their opinions may have an error of the order of plus or minus 5%. Thus the difference in their opinions is outside the range of error accepted by them.
The valuers differ greatly as to the size of the improvements on the property. One was at 155m2 and the other at 230 m2. To the extent that this was relevant to their opinions, it is unfortunate that there is a dispute about one of the few things that is entirely ascertainable. In dealing with comparables the valuers disagreed about the importance of a less attractive location versus better presentation, brick veneer versus cavity brick and newly renovated versus unrenovated properties. The comparable sales relied on by Mr C were more remote from the subject property than those cited by Mr R. Mr C observed that the area in question is subject to greater variation of prices than one might expect in a more settled area. This arises, he opines because first home buyers are less discerning buyers than those who are able to afford homes in established areas. There is no real disagreement on methodology although Mr R also took into account a figure based on the value of the land plus depreciated improvements whereas Mr C relied on comparison sales only. Mr C said that land value is an unreliable guide in part because often the only comparables were development sites where a block had improvements on it but was sold in the expectation that the improvements would be demolished. In making this comparison, however, Mr R did refer to prices achieved for vacant land.
In my view there was more to commend the opinion of Mr R than that of Mr C. His comparables were closer and he had another approach as a check against his opinion.
I find that the assets of the parties are:
Assets Value K Property (M Sala) $570,000 T property (W) $290,000 CBA A/c … (W) $6,862 St George Bank A/c … (W) $1,360 ING Maximiser Term Deposit (W) $11,405 Collection House Shares (W) $6,860 Nissan Pulsar motor vehicle (W) $2,500 Furniture (W) $10,000 Wife’s paid legal fees (McDonell Schroder) $47,000 Wife’s paid legal fees (Hemant Prakash & Assoc) $20,000 Wife’s paid legal fees (Hemant Prakash & Assoc) $5,000 ING Mastercard Superannuation Plan 1 (W) $82,508 H property (H) $685,000 S property (H) $335,000 Mercedes Benz C200 motor vehicle (H) $20,000 Toyota Camry 1998 motor vehicle (H) $6,500 CBA H Branch A/c … (H) $60.61 St George Bank A/c … (H) $100,000 Telstra Shares (H) $1,780 Furniture H property (H) $1,500 Husband’s paid legal fees (Ramrakha Jenkins) $8,624 Total $2,211,959.61
Liabilities:
I find that the relevant liabilities of the husband and wife as at the date of the hearing are as follows:
Liabilities Amount Mortgage on S property (H) $266,800 Mortgage on K property $337,724.06 Payment to M for K property $37,775.91 Repayment of the First Home Owner Grant $7,000 Citibank line of credit (H) $4,266.27 Qantas Telstra ANZ Visa card (H) $2,100 American Express card (H) $1,500 Mercedes Benz Finance (H) $18,000 $675,166.24
Net assets
The net assets have a value of $1,536,793.37 ($2,211,959.61 - $675,166.24).
Financial Resources
There is no evidence that the husband or wife have any financial resources.
Contributions
Prior to the first day of the hearing the husband and wife agreed that their contributions were equal. I was told of that agreement by counsel for the wife on the first morning of the hearing and that agreement is confirmed in the written submissions of the husband handed up on the last day of the hearing. Unfortunately that was not the end of the matter.
During final submissions on behalf of the wife, her counsel resiled from that agreement and argued that the contributions should be assessed as 56% by the wife and 44% by the husband based on the husband’s lack of disclosure. Reference was made to the decision of In the Marriage of Black and Kellner which is reported at (1992) 15 Fam LR 343; (1992) FLC 92-287.
The husband appeared without legal representation on the final day of the hearing albeit that he brought and relied on written submissions presumably prepared by a lawyer. In relation to his claim that the wife should contribute towards one half of his post separation expenses, the husband’s submissions refer to a dispute about contribution, at least in the alternative. It is his submission that if the Court does not adopt the approach of allowing him to claim the deficit incurred by him in the management of the marriage income and liabilities after separation, then “it cannot be said that the parties (sic) contributions as at the date of hearing are equal as the husband’s post-separation contributions will not have been properly taken into account. This will mean that the Court will have to make an assessment of the parties (sic) post-separation contributions”. Unfortunately the submissions do not go on to identify what that assessment should be.
I was concerned that had the husband known that the agreed position on contribution would be resiled from on the wife’s part, he could have had an advocate appear or further written submissions prepared on that issue. Indeed at times during the last day of the hearing the husband expressed dismay at the matters he was asked about in cross-examination and the tenor of submissions made on behalf of the wife. At one point he suggested that he would leave the Court room and take no further part in the hearing. There is an argument that it was unfair on the husband to permit the wife to renege on the agreed position without giving the husband time to obtain further advice on the issues. Having said that, it is clear from his written submissions that the husband too envisaged the possibility of an argument about contributions.
It needs to be remembered that the basis for opening up the question of contributions and for permitting the wife and husband to re-open their cases during final submissions, was the revelations made on 11 February 2008 about E Property Group. Those revelations were made at a time when the husband was legally represented. The circumstances of those revelations may have contributed to that representation being withdrawn. The husband alone was in a position to know that the concession made by his counsel on his behalf and presumably on his instructions, in relation to his lack of connection with E Property Group was incorrect. Nevertheless he did nothing to bring that to the attention of the Court on that day. He was the author of his own misfortune.
Notwithstanding that his written submissions did not address the question of lack of disclosure, on the last day of the hearing the husband addressed the allegation that he did not make a proper disclosure of his financial circumstances in his oral submissions.
As to whether the Court should assess contributions asset by asset or globally the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the case has been argued on the basis of one pool of assets. In accordance with the counsel of the Full Court, on that basis, I too will adopt that approach and apply the section 79(4) considerations to a combined pool of superannuation and non-superannuation assets.
The marriage of the husband and wife spanned 34 years. They had two children. The evidence reveals that they each made financial, non-financial and parent and homemaker contributions. In my view, no further enquiry is required into the issue of contributions. In any event the evidence does not permit a principled basis for distinguishing the quality and extent of the efforts of the husband and wife. The reality is that they prepared the case on the basis that there was an agreed position or no significant dispute about contributions. The husband’s disclosure was not complete but that has been addressed, at least in part, by findings made in relation to the pool of assets. Because of the paucity of evidence I did not accept the husband’s claim in relation to a payment of $64,570, said to have been made in relation to repairs on three properties. Similarly, I did not accept the husband’s claim in relation to the alleged net liability incurred by the husband in his stewardship of the investment properties for himself and the wife, since separation. To do any more in relation to contributions on the basis of those matters requires evidence that is not before the court.
The contributions of the husband and wife were equal.
The other matters in Section 79
I am then required to consider the matters identified in clauses (d) to (g) of s 79(4).
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. There is no such effect here.
Section 79(4)(e) - Section 75(2) Factors
The husband and wife agree that there should be no adjustment between them from the outcome warranted by reason of contributions, by reference to the matters in Section 75(2). I can see the sense of that position. The wife and husband are 55 and 58 years of age respectively. The wife is in paid employment receiving a modest wage. The husband’s earning capacity is unclear but he retains skills in property management. The parties are in similar circumstances. In the circumstances of this case, no further enquiry is required by me.
Section 79(4)(f)
There are no relevant orders.
Section 79(4)(g)
This is not relevant.
Conclusion
Largely on the basis of the agreement between the husband and wife, there will be no adjustment for the other matters in section 79(4).
Just and Equitable
Based on their contributions and the other matters in s 79 the appropriate division of property is an equal division. Finally, I must consider whether it would be just and equitable within the context of s 79 if the net assets of the parties were divided in those proportions.
As to the form of the orders there is the issue of whether the husband or the wife should have the first opportunity to retain the H property.
The wife’s case in relation to the H property is set out in her affidavit at paragraph 21. She says that she does not drive and it would be convenient for her to travel to work from that property. She asserts that most of the furniture, curtains and blinds suit that house. She regards H as a safer environment that the other places where she and the husband own homes. She asserts that if she has to sell the other properties she would incur Capital Gains Tax.
It is submitted on behalf of the husband that he should retain the property because:
He identified, selected and purchased the property without input from the wife and he has resided in the property since May 1994, whereas the wife lived there from 1996 to 2006;
The wife’s asserted problems with living in the T property are not genuine problems. The husband says that although the wife does not drive she is licensed to do so; she was able to live at the T property for 2 years in the 1990’s and there is no evidence that while there, she experienced difficulty in travelling to work or that her safety was at risk;
There is no evidence that since leaving the H property the wife has experienced difficulty in travelling to work or that her safety was at risk;
There is no evidence that if the T property was transferred to the wife she would be obliged to sell it or that if she did, she would incur a capital gains tax obligation.
I will give the husband the first opportunity to retain the H property. The property is already in his name and therefore there will be no additional costs in him retaining it. He has lived in the property, to the exclusion of the wife for significant periods and he lives there now.
As to the form of the remaining orders, it appears that neither of the parties seeks to retain the other real property. I will leave each party with the property/ies that are in his or her name. If a party wishes to sell one or more of the properties that is a matter for that party. To do otherwise would involve a sale program and a complicated formula to identify the final distribution between the parties. It would also require the parties to co-operate in that timetable and I am not confident that they could.
The wife has or has had the benefit of the following assets of the parties:
Assets Value T property (W) $290,000 CBA A/c … (W) $6,862 St George Bank A/c … (W) $1,360 ING Maximiser Term Deposit (W) $11,405 Collection House Shares (W) $6,860 Nissan Pulsar motor vehicle (W) $2,500 Furniture (W) $10,000 Wife’s paid legal fees (McDonell Schroder) $47,000 Wife’s paid legal fees (Hemant Prakash & Assoc) $20,000 Wife’s paid legal fees (Hemant Prakash & Assoc) $5,000 ING Mastercard Superannuation Plan 1 (W) $82,508 Total $483,495.00
In order to receive one half of the net assets she should have $768,396.68. Thus if the husband wants to retain the H property he should pay the wife about $284,901.69. I will round figure up to $285,000.
That would leave the husband with the following assets and liabilities:
Assets Value K property (M Sala) $570,000 H property (H) $685,000 S property (H) $335,000 Mercedes Benz C200 motor vehicle (H) $20,000 Toyota Camry 1998 motor vehicle (H) $6,500 CBA A/c …(H) $60.61 St George Bank A/c … (H) $100,000 Telstra Shares (H) $1,780 Furniture H property (H) $1,500 Husband’s paid legal fees (Ramrakha Jenkins) $8,624 Mortgage on S property (H) -$266,800 Mortgage on K property -$337,724.06 Payment to M for K property -$37,775.91 Repayment of the First Home Owner Grant -$7,000 Citibank line of credit (H) -$4,266.27 Qantas Telstra ANZ Visa card (H) -$2,100 American Express card (H) -$1,500 Mercedes Benz Finance (H) -$18,000 Payment to the wife -$285,000 Total $768,298.37
If the husband cannot pay the wife $285,000 then, unless the parties otherwise agree, the husband must sell the H property and pay that sum to the wife from the proceeds of sale.
Settling the existing costs obligations of the parties
The husband seeks that I include an order to facilitate compliance with a costs order made in his favour against the wife in the sum of $5,000. The wife opposes that course, among other reasons, because there is an outstanding indemnity costs order against the husband and in favour of the wife from the Federal Magistrates Court.
I told the parties that because of this and some other complexities involved in settling the orders I would publish my reasons and make orders but stay them. The parties can then be involved in identifying orders that will best give effect to the reasons for judgment. My associate will arrange for a listing after delivery of judgment by arrangement with the parties. The husband told me that he intended to instruct his former solicitor, Mr Ramrakha for the purpose of assisting to settle the final orders.
Referral of the papers
The evidence suggests that the parties may well have broken the law or committed a fraud on the revenue. For example, M may have given false evidence before a Federal Magistrate and this Court. She may have defrauded the revenue. Similarly, it is likely that her parents either gave false evidence or assisted M to defraud the revenue.
It is not for this Court to investigate those matters but I have an obligation to ensure that the facts are able to be investigated. Parties cannot come before a Court and make a case relying of behaviour that could to attract a criminal charge or civil penalty and expect that nothing be done about it.
I propose to refer the papers to the Principal Registrar for further referral in relation to the possibility of perjury and or Federal and NSW revenue fraud.
I certify that the preceding one hundred and seventy two (172) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 30 May 2008
Key Legal Topics
Areas of Law
-
Family Law
-
Equity & Trusts
Legal Concepts
-
Constructive Trust
-
Remedies
-
Costs
-
Stay of Proceedings
-
Consent
0
3
1