Sangster & Sangster
[2024] FedCFamC2F 923
•23 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sangster & Sangster [2024] FedCFamC2F 923
File number(s): ADC 5349 of 2021 Judgment of: JUDGE DICKSON Date of judgment: 23 July 2024 Catchwords: FAMILY LAW – PROPERTY – Final hearing – Where the parties’ two adult daughters have joined as the Second and Third respondents – Marriage of 27 years – Where the First Respondent husband’s case is ad idem with the Second and Third Respondent daughters – Where the parties had various family business ventures and arrangements in which the wife was not a named partner or director – Comingling of familial finances – Equitable interests – Where the wife asserts that she has a beneficial interest in the real properties – Limitations as to the evidence made available at Trial – Consideration of the existence of equitable interests – Consideration of add backs – Assessment of contributions and future needs – Where it is not just and equitable to include the real properties owned by the Second and Third Respondent daughters in the net asset pool – Orders for the sale of property – 55 per centum division in favour of the wife subject to the add back of the wife’s superannuation amount – Justice and equity. Legislation: Evidence Act 1995 s 140.
Family Law Act 1975 (Cth) ss 75, 79, 106A.
Cases cited: Babette & Falconer [2015] FamCAFC 124
Bevan & Bevan (2013) FLC 93–545
Bolger & Headon [2014] FamCAFC 27
Carr v Baker [1936] 36 SR (NSW) 301
Crapp & Crapp [1979] FamCA 17
Dickons& Dickons (2012) 50 Fam LR 244
Dovgan & Dovgan [2021] FamCA 306
Et-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128
Fields & Smith [2015] FamCAFC 57
Fox v Percy (2003) 214 CLR 118
Gissing v Gissing [1971] A.C. 886
Green & Green (1989) 17 NSWLR 343
Hampton Court Ltd v Crooks [1957] HCA 28
Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Ho v Powell (2001) 51 NSWLR 572
Housing Commission of New South Wales v Pastoral Company Pty Ltd [1983] 3 NSWLR 378
Jabour & Jabour [2019] FamCAFC 78
JEL & DDF [2000] FamCA 1353
Mallet v Mallet (1984) 156 CLR 605
Muschinski v Dodds (1985) 160 CLR 583
Norbis v Norbis (1986) FLC 91-712
Perrin & Perrin (No 2) [2018] FamCAFC 122
Peterson & Davis (No 3) [2022] FedCFamC1F 650
Rainford & Rainford [2020] FamCA 945
Rodgers & Rodgers (2016) FLC 93-703
Rosati & Rosati (1998) FLC 92-804
Selkirk & Selkirk [2019] FamCAFC 63
Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262
Silvia (Trustee) v Williams [2018] FCAFC 194
Stanford & Stanford [2012] HCA 52
Steinbrenner& Steinbrenner [2008] FamCAFC 193
Strong v Woolworths [2012] HCA 5
Summitt & Summitt and Ors [2009] FamCA 371
Taffner & Taffner (2021) FLC 94-022
Walpole & Secretary, Department of Communities and Justice (2020) FLC 93-950
Wei & Xia (No 5) [2023] FedCFamC1F 679
Division: Division 2 Family Law Number of paragraphs: 374 Date of last submission/s: 21 May 2024 Date of hearing: 1 to 4 May 2023, 11 to 15 December 2023 and 21 May 2024 Place: Adelaide Counsel for the Applicant: Mr J. Dillon Solicitor for the Applicant: ASW Lawyers Counsel for the First Respondent: Mr I. Roberts Solicitor for the First Respondent: AK Family Law Second Respondent: Self-Represented Third Respondent: Self-Represented ORDERS
ADC 5349 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SANGSTER
Applicant
AND: MR SANGSTER
First Respondent
MS B SANGSTER
Second Respondent
MS C SANGSTER
Third Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
23 JULY 2024
THE COURT ORDERS THAT:
1.There be a declaration that the Second Respondent, Ms B Sangster, and the Third Respondent, Ms C Sangster, hold their interests in the land situate at D Street, Suburb E in the State of South Australia being the whole of the land comprised and described in Certificate of Title … Folio … on trust as to half of the beneficial interest in the property for the Applicant Wife and the First Respondent Husband.
2.In full and final settlement of all claims for alteration of property pursuant to Part VIII of the Family Law Act 1975 (Cth) (as amended):
(a)Within sixty (60) days of the date hereof the Applicant Wife and the First Respondent Husband shall do all such things so as to place the property at D Street, Suburb E in the State of South Australia being the whole of the land comprised and described in Certificate of Title … Folio … (‘the Suburb E property’) on the market for sale on such terms and conditions as they agree in writing and with such selling agent as they agree in writing (or failing agreement by such selling agent as nominated by the Secretary of the Real Estate Institute of South Australia).
(a)The Applicant Wife and the First Respondent Husband shall follow all advice provided by the said selling agent including the mode of sale, the terms of sale and any offers to purchase the said Suburb E property.
(b)Upon sale of the Suburb E property, the net proceeds shall be disbursed in the following manner:
(i)To pay all sales costs and commissions;
(ii)To the Applicant Wife the sum of $64,333 (SIXTY-FOUR THOUSAND THREE HUNDRED AND THIRTY-THREE DOLLARS AND ZERO CENTS);
(iii)Such sum as shall be calculated by F Company for the payment of Capital Gains Tax (if any) on behalf of the First Respondent Husband arising from the sale of the Suburb E property;
(iv)The payment of any liabilities arising in relation to the Sangster Family Pty Ltd self-managed superannuation fund including but not limited to accounting fees and any penalties imposed by the Australian Taxation Office;
(v)The payment of a liability to the Australian Taxation Office for Sangster Pty Ltd in the sum of $4,728;
(vi)A sum representing 55% to the Applicant Wife;
(vii)A sum representing 45% to the First Respondent Husband;
WHERE:
A.= the assets retained by the Applicant Wife – ($39,500);
B.= the assets retained by the First Respondent Husband – ($490,800);
C.= the net proceeds of the sale of the Suburb E property;
D.= AND WHERE A+B+C = I;
E.The Applicant Wife shall receive a sum equal to (I x 55%) – A; and
F.The First Respondent Husband shall receive a sum equal to (I x 45%) – B.
(b)The Applicant Wife do retain as her sole property:
(i)Motor Vehicle 1 ;
(ii)The furniture and effects situate in the Suburb E property subject to paragraph 2(d) herein;
(iii)Artwork;
(iv)All sewing equipment, fabrics and associate items;
(v)The gardening equipment and mower;
(vi)Her savings and investments;
(vii)The sale proceeds of her H shares and her personal possessions.
(c)The First Respondent Husband do retain as his sole property:
(i)His one-third interest in the assets owned by the partnership ‘Sangster’;
(ii)His one-third interest in the assets owned by Sangster Pty Ltd;
(iii)His savings and investments; and
(iv)His superannuation balance in the Sangster Family Superannuation Fund in the sum of $63,332.
(d)Within twenty-eight (28) days of the date hereof (or on such other date as the parties agree in writing) the Respondents shall attend and collect from the Suburb E property the following:
(i)All Manchester and linen;
(ii)King Size Mattress (in original plastic);
(iii)All tools and equipment belonging to the Respondent Husband;
(iv)All personal belongings and paperwork which belong to each of the Respondents;
(v)All assets owned by Sangster Pty Ltd including but not limited to:
A.Motor Vehicle 2;
B.Motor Vehicle 3;
C.Motor Vehicle 4;
D.Motor Vehicle 5;
E.Motor Vehicle 6;
F.All sports equipment;
G.Shipping container and all contents within it; and
(vi)All paperwork relating to the partnership and company.
(e)The Applicant Wife shall do all such things to ensure that the said items referred to in paragraph 2(d) herein are made available for collection by the First, Second and Third Respondents including permitting unhindered access to all outbuildings and storage containers situate at the Suburb E property.
(f)In relation to the Sangster Family Superannuation Fund the parties shall:
(i)Comply with all requests made by Mr J of F Company to sign any documents in relation to the said Fund including but not limited to the 2021 financials and tax returns for the Sangster Family Pty Ltd and the Sangster Family Superannuation Fund;
(ii)Do all such things as required to ensure that all the documents are lodged with the Australian Taxation Office and the Sangster Family Superannuation Fund is closed; and
(iii)Resign their directorship or transfer their shares as requested by the said Mr J.
(g)All parties shall do all acts and things reasonably required including the signing or execution of all necessary documents to give effect to the terms of this order within fourteen (14) days of being requested to do so.
(h)Within twenty-eight (28) days of the date hereof, the parties do discharge at their sole expense any caveat or encumbrance registered by them over any asset the subject of these proceedings.
(i)Pursuant to section 106A of the Family Law Act 1975 (Cth), in the event that any party should fail, refuse or neglect to execute any document necessary to implement the terms of these orders, then upon proof of such failure, refusal or neglect by affidavit, a Judicial Registrar or Deputy Registrar of this Honourable Court is hereby authorised to execute any such document on behalf of the defaulting party.
3.All extant applications are dismissed as finalised.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON:
INTRODUCTION
These proceedings concern competing applications for final orders for property settlement.
The Applicant wife is Ms Sangster and the First Respondent husband is Mr Sangster. The Second Respondent is Ms B Sangster, the biological adult daughter of the wife, and the Third Respondent is Ms C Sangster, the biological adult daughter of the husband.
For many years the family ran successful businesses in the Northern Territory. As is common in family business arrangements, in happier times varying degrees of formality were implemented during the lifetime of the businesses. Whilst the family relationships were harmonious and intentions aligned, the lack of formality or clear understanding of intention and the comingling of finances created little difficulty.
The breakdown of the marriage between Ms Sangster and Mr Sangster and the need to make orders for a just and equitable settlement of property has created a multitude of evidentiary and legal issues for the Court. The problem is compounded by the differing recollections of the parties and the absence of corroborative documents or documents not discovered for the Trial. This has meant that the Court has been required to draw inferences where appropriate. In addition, aside from the real properties, no valuations had been obtained by the parties resulting in the Court having to make findings where it could on the value of multiple items in the Joint Balance Sheet to reach a just and equitable conclusion.
These are the Courts reasons arising from the Trial.[1] I have tried, as much as is possible in a case such as this, to write the Judgment in a manner that will be easily understood by the parties and, in particular, by Ms B Sangster and Ms C Sangster who are not lawyers and who need to understand the basis for the Court’s decision.
[1] The parties’ competing applications proceeded to Trial in three separate tranches on 1 to 4 May 2023, 11 to 15 December 2023 and with closing submissions on 21 May 2024.
DOCUMENTS RELIED UPON AT TRIAL
Ms Sangster relied upon the following documents:
(1)Amended Initiating Application filed 16 March 2023;
(2)Trial Affidavit filed 16 March 2023;
(3)Financial Statement filed 16 March 2023;
(4)Subpoena to Mr J, accountant, filed 20 April 2023;
(5)Costs Notice filed 11 December 2023;
(6)Outline of Case Document tendered 1 May 2023; and
(7)Closing Submissions filed 2 April 2024.
In addition, Ms Sangster tendered and relied upon Exhibits W1 to W5 inclusive.
Mr Sangster relied upon the following documents:
(1)Amended Response to Initiating Application filed 20 April 2023;
(2)Trial Affidavit filed 20 April 2023;
(3)Financial Statement filed 20 April 2023;
(4)Costs Notice dated 8 December 2023;
(5)Outline of Case Document and proposed order tendered 1 May 2023; and
(6)Closing Submissions filed 16 May 2024.
In addition, Mr Sangster tendered and relied upon Exhibits H1 to H7 inclusive.
Ms B Sangster and Ms C Sangster relied upon the following documents:
(1)Amended Response to Initiating Application filed 20 April 2023;
(2)Financial Statement of Ms B Sangster, Second Respondent filed 24 April 2023;
(3)Trial Affidavit of Ms B Sangster, Second Respondent filed 24 April 2023;
(4)Costs Notice of Ms B Sangster, Second Respondent tendered 10 December 2023;
(5)Financial Statement of Ms C Sangster, Third Respondent filed 24 April 2023;
(6)Trial Affidavit of Ms C Sangster, Third Respondent filed 24 April 2023; and
(7)Costs Notice of Ms C Sangster, Third Respondent tendered 10 December 2023.
In addition, Ms B Sangster tendered and relied upon Exhibits L1 to L29 inclusive.
ORDERS SOUGHT AND ISSUES IN DISPUTE
The formal orders sought by each of the parties are set out in their respective applications and responses relied upon as above.
Applicant Wife, Ms Sangster
Ms Sangster sought final orders for property settlement as follows:
1.That the properties [K Street, Suburb L] Western Australia and [M Street, City N] South Australia be declared assets of the marriage.
2.That the first respondent, the second respondent and the third respondent do all such acts matters and things to transfer all their right title and interest in the property [D Street, Suburb E] SA being the whole of the land comprised in Certificate of Title Volume […] Folio […] to the Applicant.
a. That the costs of the transfer of the property [D Street, Suburb E] to the Applicant take place at the expense of the Applicant.
b. That the Applicant do pay any stamp duty costs in relation to the transfer of the property [D Street, Suburb E] to the Applicant.
c. That in relation to any Capital Gains Tax associated with the transfer of the property [D Street, Suburb E] to the Applicant, the Applicant do pay half of such sum, or $10,000.00 (whichever is the lesser amount).
d. That the first, second and third respondents be otherwise personally responsible for their own costs in relation to the transfer of the property [D Street, Suburb E] to the Applicant.
3.That the Applicant do retain all furniture and household items as well as the [outbuilding] contents and currently in her possession at the property [D Street, Suburb E], SA.
4.That the Applicant retain [Motor Vehicle 1] currently in her possession as her sole property.
5.That the Respondent do pay to the Applicant the sum of $50,000.00 within 60 days of a final order.
6.That the first, second and third respondents do return the Applicant's member balance in the [Sangster Family] Superannuation Fund to the Fund and the Applicant be at liberty to transfer her balance to fund of her choosing.
7.That upon the Applicant withdrawing her member balance in the [Sangster Family] Superannuation Fund:
a.That the applicant transfer her shares in the [Sangster Family] Superannuation Fund to the first Respondent.
b.That the applicant resign as a member of the [Sangster Family] Superannuation Fund.
8.That the first, second and third respondents do indemnify the applicant in relation to any claims, actions or demands (including payment of any taxes) in relation to the [Sangster Family] Superannuation Fund.
9.That the parties otherwise retain any assets in their name possession or control.
10.That the first, second and third respondent do pay the costs of the applicant.[2]
[2] See the Amended Initiating Application filed by Ms Sangster on 16 March 2023.
During closing submissions, Ms Sangster’s counsel refined the final orders sought by her to be as follows:
(1)Ms Sangster sought to retain:
(a)the freehold at D Street, Suburb E in South Australia;
(b)Motor Vehicle 1;
(c)Her cash savings;
(d)The sewing machine;
(e)The gardening equipment and mower;
(f)An add back for half of the value of Sangster Family Pty Ltd self-managed superannuation fund being $63,000; and
(g)Cash payment of $50,000;
(2)Counsel submitted that this represented a total net super and non-super pool of $2.92 million and with the orders sought by Ms Sangster said to represent 38.64 per centum of Ms Sangster’s asserted pool in her favour; and
(3)Ms Sangster abandoned her claim to retain the assets owned by Sangster Pty Ltd.
First Respondent Husband, Mr Sangster
Mr Sangster sought final orders for property settlement as follows:
4. The applicant do pay the respondents costs of and incidental to these proceedings
5. Such further and other orders as this Honourable Court deems fit.
6. That the Applicant retain:
6.1. the Former matrimonial home situated at [Suburb E] in the State of South Australia ("former matrimonial home") (freehold) such that all Respondents transfer their interests in the property to your client (sic) at her sole cost in all things,
6.2. [Motor Vehicle 1],
6.3. the furniture and effects in the [Suburb E] property (save for the items listed in paragraph below),
6.4. the artwork in the [Suburb E] property;
6.5. the [sewing] equipment, fabrics and associated items;
6.6. the gardening equipment;
6.7. her personal bank accounts;
6.8. her [H Shares]; and
6.9. her personal possessions
7. That contemporaneously wiith the transfero fhte (sic) former matrimonial home to the Applicant the Applicant do pay
7.1. The the (sic) first respondent the sum of $120,000
7.2. The Second Respondent the sum of $243,000
7.3. The Third Respondent the Sum of $243,000
8. Alternatively if the Applicant does not seek to retain the former matrimonial home, then it shall be sold on such terms and conditions as agreed between the parties and the net proceeds shall be divided as follows:
8.1. 25 percent to each of the second and third respondents
8.2. The remaining 50 percent divided as follows:-
8.2.1.30 percent (i.e. 30% of 50%) to the First Respondent
8.2.2.70 percent (i.e 70% of 50%) to the Applicant.
9. That the Applicant sign all documents in relation to:
9.1. the 2021 financials and tax returns for [Sangster Family] Pty Ltd and the [Sangster Family] Superannuation Fund (and any related documents)
as they are currently prepared and presented to her. and that she do all such things as required by the Respondents to ensure that the documents may be lodged with the ATO and the [Sangster Family] Superannuation Fund closed.
10. Thereafter, that the Applicant resign as a director of [Sangster Family] Pty Ltd (being the trustee of the [Sangster Family] Superannuation Fund) and the Respondents indemnify the Applicant in relation to same.
11. That the Applicant transfer her shares in [Sangster Family] Pty Ltd to the First Respondent [Mr Sangster].
12. That the Respondents retain their respective interests in [Sangster Pty Ltd] and in the partnership [Sangster] which includes all assets of the partnership and company including but not limited to the two [City O] properties to the exclusion of the Applicant in all things.
13. That the Applicant facilitate the Respondents (and/or their nominees) attending at and collecting the following items from the [Suburb E] property within 14 days:
13.1. All [Manchester and linen];
13.2. King Size Mattress (in original plastic);
13.3. All tools and equipment belonging to the First Respondent;
13.4. All personal belongings and paperwork which belong to each of the Respondents;
13.5. All assets owned by [Sangster Pty Ltd] including:
13.5.1.[Motor Vehicle 2];
13.5.2.[Motor Vehicle 3];
13.5.3.[Motor Vehicle 4];
13.5.4.[Motor Vehicle 5];
13.5.5.[Motor Vehicle 6];
13.5.6.All [sports] equipment;
13.5.7.shipping container and all the contents within it, and
13.6. All the paperwork relating to the company.
13.7. All paperwork relating to the partnership and company.
14. That the Second and Third Respondents retain their properties at [City N] and [Suburb L] to the exclusion of the Applicant and the First Respondent (sic) That each party otherwise retain all assets in their respective possession and control.
15. That the Applicant has no right to make any further claim against any of the Respondents (or them collectively), including an inheritance claim.[3]
[3] See the Amended Response to Initiating Application filed by Mr Sangster on 20 April 2023.
During closing submissions, Mr Sangster’s counsel varied the orders sought by him to be as follows:[4]
(1)Mr Sangster proposed that:
(a)He make a cash payment to Ms Sangster of $430,000;
(b)Ms Sangster transfer her interest in the freehold property at Suburb E in South Australia to Mr Sangster;
(c)Ms Sangster retain Motor Vehicle 1, and her furniture and effects;
(d)There be a payment to Ms Sangster representing half of the Sangster Family Pty Ltd self-managed superannuation fund balance in the sum of $49,838.
[4] The substantial change in Mr Sangster’s position was not explained and was not subject to evidence during the Trial.
Second and Third Respondent Daughters, Ms B Sangster and Ms C Sangster
Ms B Sangster and Ms C Sangster each seek the same final orders as sought by Mr Sangster namely:
I agree with the Second Respondent, [Mr Sangster]’s Amended Response to Initiating Application (Family Law) in its entirety and seek the exact same orders.[5]
[5] See the Amended Response to Initiating Application filed by Ms B Sangster on 24 April 2024 and the Amended Response to Initiating Application filed by Ms C Sangster on 24 April 2024.
PROCEDURAL HISTORY
On 3 November 2021, Ms Sangster filed her Initiating Application seeking final orders for property settlement.
On 16 November 2021, Ms B Sangster was served with Ms Sangster’s Initiating Application. Ms B Sangster alleges that she was unaware that Ms Sangster and Mr Sangster had separated. Ms B Sangster complains that Ms Sangster made no attempt to communicate with any of the respondents in relation to the matters which are the subject of her application prior to service upon them.[6]
[6] See the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 8.
On 18 November 2021, Ms C Sangster was served with Ms Sangster’s Initiating Application. Ms C Sangster also alleges that she was unaware that Ms Sangster and Mr Sangster had separated at this time.
On 6 December 2021, Ms Sangster’s application first came before the Court. A series of notations were made noting that Mr Sangster was unaware that the parties were separated and his complaints about the lack of compliance with pre-action procedures by Ms Sangster, and that Ms B Sangster and Ms C Sangster had not yet sought legal advice. Ms Sangster sought to press interlocutory orders. Orders were made for the filing of answering documents by Mr Sangster, Ms B Sangster and Ms C Sangster and proceedings were adjourned to 2 February 2022.
By the next return date on 2 February 2022, Ms B Sangster and Ms C Sangster had secured legal representation. Orders were made to extend the time for the filing of their answering documents, single expert valuations, for the parties to attend a Conciliation Conference on 6 June 2022 and proceedings were adjourned 22 June 2022.
On 22 June 2022, a notation was made noting that the parties were unable to reach agreement as to which properties should be valued and that Ms Sangster had filed an Application in a Proceeding on 3 June 2022 which required determination prior to the parties attending dispute resolution. The matter was adjourned before me on 7 July 2022.
On 7 July 2022, the Court noted that the parties were endeavouring to resolve the issues raised in Ms Sangster’s Application in a Proceeding and interim applications were listed for argument on 22 August 2022 in the City N Circuit.
On 8 August 2022, consent orders were made in Chambers resolving the Application in a Proceeding. It was noted that the property at K Street, Suburb L in Western Australia (‘the Suburb L property’) had an agreed value of $331,000 and that the property at M Street, City N in South Australia (‘the City N property’) would be valued but on the basis that such values were on a no admission basis as to their inclusion in the property pool. Orders were made by consent for the property at D Street, Suburb E in South Australia (‘the Suburb E property’), the two commercial properties at 1 P and 2 P Street, City O (collectively ‘the P Street properties’) and City N to be valued. Further orders were made by consent for Ms Sangster to have sole use and occupation of the Suburb E property and to be responsible for all outgoings, and for Mr Sangster, Ms B Sangster and Ms C Sangster to pay all outgoings for the City O properties and any repayments owing to any tax debt of Sangster Pty Ltd and the parties to attend a Conciliation Conference on 7 October 2022. Motor Vehicle 1 was to be transferred to Ms Sangster. All interim applications were dismissed.
On 20 October 2022, the Court noted that the parties had not been able to reach final agreement but continued to negotiate. The proceedings were adjourned to 14 November 2022 for directions.
On 14 November 2022, Mr Sangster appeared self-represented before the Court and the then solicitor for Ms B Sangster and Ms C Sangster informed the Court that she may seek to withdraw from representing them at Trial. The parties requested a Judicial Settlement Conference which was listed on 19 December 2022 and proceedings listed for Trial to commence on 1 May 2022 in Adelaide.
The matter did not resolve at the Judicial Settlement Conference on 19 December 2022.
On 7 February 2023, orders were made confirming the Trial date and for the filing of Trial documents. The matter was adjourned for directions to 18 April 2023.
On 18 April 2023, the Court made orders to extend the time for the filing of Trial documents and for Ms Sangster to have leave to file and serve a subpoena to Mr J, accountant.
The first tranche of the Trial commenced before me between 1 to 4 May 2024, with further dates for Trial being required thereafter. At Trial, Mr Sangster was legally represented. Ms B Sangster and Ms C Sangster were self-represented.
The matter returned for Trial directions on 9 June 2023. A joint trial plan filed 2 June 2023 confirmed that at least a further five days of Trial was required to complete the evidence with a possibility of an extension beyond that time frame to complete evidence and final submissions. The parties agreed to attend a Conciliation Conference on 18 August 2023. The Trial was listed to resume on 11 December for five days. The matter was listed for further directions on 22 August 2023.
On 22 August 2023, the Court noted that the matter had not resolved at the Conciliation Conference.
On 11 December 2023, the second tranche of the Trial proceeded for a further five days, with each party’s case having concluded by 15 December 2023. Very detailed orders were made thereafter for the filing of written submissions to assist the Court. Closing submissions were adjourned to 25 March 2024 for the parties to speak to their written submissions.
On 9 February 2024, an oral application was made by Ms Sangster’s counsel to extend the time for the filing of written submissions which was not opposed. The matter was adjourned to 2 April 2024.
On 18 March 2024, further extension of time was sought for the filing of written submissions. The hearing on 2 April 2024 was vacated and the matter was relisted to commence on 21 May 2024.
The Trial concluded by way of closing submissions on 21 May 2024.
APPLICANT WIFE, MS SANGSTER’S CASE
It is Ms Sangster’s case that as Mr Sangster’s wife she is entitled to a sizeable proportion of the assets available for division at Trial. She argues that after a 27-year marriage, a just and equitable result can only be achieved by allowing her to retain the Suburb E property freehold and the other assets sought by her. Ms Sangster gave evidence that she had secured finance of $100,000 if required to pay Mr Sangster a settlement sum.
Ms Sangster argues that all the assets have been funded using monies earned from family business(es) operated by various family members during the marriage. On her case, it follows that all the assets should be included in the asset pool available for division. Controversially, this includes the homes owned by Ms B Sangster and Ms C Sangster in Suburb L and City N respectively and the full value of the two commercial premises owned by the partnership “Sangster” (‘the partnership’) in City O.
To include the assets owned by the partnership, the “Sangster Pty Ltd” company (‘the company’) and Ms B Sangster and Ms C Sangster personally, Ms Sangster seeks several positive findings in her favour so that the value of those assets can be included in the Joint Balance Sheet.[7]
[7] See the Outline of Case tendered by Ms Sangster on 1 May 2023.
Ms Sangster’s counsel acknowledged that Ms Sangster could only retain the Suburb E property freehold together with the cash sums sought by her, if the Suburb L and City N properties (or a proportion thereof), form part of the assets available for division.
Ms Sangster seeks an ‘add back’ for her member balance in the Sangster Family Pty Ltd self‑managed superannuation fund in the sum of about $64,333. It is not in dispute that Ms Sangster’s member balance was withdrawn by Ms B Sangster and used to pay liabilities and living expenses after the business was closed in 2021.
In relation to the cash payment sought in the sum of $50,000, Ms Sangster conceded in her evidence that this sum was sought by her to pay her legal fees. It is arguable that this claim is more akin to a claim for costs and not a claim for property settlement.
RESPONDENT HUSBAND AND DAUGHTERS, MR SANGSTER, MS B SANGSTER AND MS C SANGSTER’S CASE
I have included the three respondents under the one heading because the orders sought by all of them are identical. They are ad idem with one another in all respects and ran their cases as a united front.[8]
[8] The Outline of Case tendered by Mr Sangster on 1 May 2023 is signed by the three respondents on page 9.
Mr Sangster, Ms B Sangster and Ms C Sangster argue that the success of the family business can be attributed in large proportion to the sheer hard work and business acumen of the three of them. They point to the fact that from 2012 Ms Sangster lived in South Australia and due to the ‘tyranny of distance’ did not contribute to the business in any meaningful way. Rather, they argue that Ms Sangster was able to lead a comfortable life in rural South Australia doing her hobbies and gardening whilst the three respondents lived in a factory and worked seven days a week.
They argue that Ms Sangster is only entitled to bring to account the legal interests that she and Mr Sangster hold in the Suburb E property and Mr Sangster’s one-third interest in the partnership and company assets. At Trial, the partnership continues to operate and owns two commercial properties at 1 P and 2 P Street, City O (collectively ‘the P Street properties’). The company too continues to operate albeit that the name “Sangster Pty Ltd” is now used by Ms B Sangster to run her allied health business in Western Australia rather than a family business in Region RR.
Ms B Sangster and Ms C Sangster are strongly opposed to any inclusion of their homes in any proportion in the asset pool between their respective parents. They maintain that the City N and Suburb L properties were purchased using monies they received by way of partner distributions, directors fees and in the case of Ms C Sangster, income from additional external employment.[9] It is my observation that Ms Sangster’s decision to seek declarations in relation to Ms B Sangster and Ms C Sangster’s homes has not only caused the parties to take polarised positions at Trial and to take every point, but has resulted in a total estrangement of Ms Sangster from all of her family members.
[9] See Exhibit L4.
The three respondents seek to retain the P Street properties in City O together with other assets and plant and equipment said to be owned by them either as partners in the partnership, or as directors of the company. It is acknowledged that Mr Sangster’s one-third interest in the partnership and business assets should be included in the Joint Balance Sheet. They agree that Ms Sangster’s sewing machines and materials (which are agreed to be items purchased by the company) should remain with Ms Sangster.
The three respondents agree that there should be an ‘add back’ in Ms Sangster’s favour for the monies withdrawn from the Sangster Family Pty Ltd self-managed superannuation fund. They oppose paying Ms Sangster any extra sum of money to be used towards her legal fees.
The three respondents seek that several business liabilities be included in the Joint Balance Sheet, the most significant of which are directors’ loans and a tax liability. These liabilities are for the most part opposed by Ms Sangster.
ISSUES TO BE DETERMINED
The issues for determination as between Ms Sangster, Mr Sangster, Ms B Sangster and Ms C Sangster are:
(a)Do Ms B Sangster and Ms C Sangster hold their interest in the Suburb E property on trust for Ms Sangster and Mr Sangster and/or is it unconscionable for Ms B Sangster and Ms C Sangster to attempt to exclude half of the equity in the Suburb E property from division between Ms Sangster and Mr Sangster?
(b)Do Ms B Sangster and Ms C Sangster hold their title in the City N property subject to a constructive trust in favour of Ms Sangster or in the alternative, should an adjustment be made pursuant to section 79(4)(a) for a negative contribution where the provision of the purchase funds was made unilaterally and without reference to Ms Sangster?
(c)Should equity intervene to find that the property at Suburb L was purchased by funds from the business and that a remedial constructive trust should be inferred?
(d)Should the Court attribute the full values of 1 P Street and 2 P Street in the Joint Balance Sheet or one-third of the value for each property representing Mr Sangster’s one-third share in the partnership?
(e)What is the value to be ascribed to various assets owned by Sangster Pty Ltd or the “Sangster Partnership” in the Joint Balance Sheet and in the absence of evidence as to value?
(f)Should director’s loans in the amount of $304,998 (or at least Mr Sangster’s director loan) be included in the list of liabilities in the Joint Balance Sheet?
(g)Should Mr Sangster’s share for quoted repairs to 1 P Street in the sum of $11,666 be included in the Joint Balance Sheet?
(h)How should the Court address the issues of Ms Sangster and Mr Sangster’s interests in the Sangster Family Pty Ltd self-managed superannuation fund which was withdrawn by Ms B Sangster in 2021? and
(i)How should the Court address potential contingent liabilities and in particular Capital Gains Tax arising from the sale of the Suburb E property in the absence of any evidence being lead at Trial?
The balance of the issues between Ms Sangster and Mr Sangster are to thereafter be determined following well-identified Full Court authority being:
(a)Identification of the assets, liabilities and financial resources relevant to the marriage;
(b)A consideration of whether the alteration of interests in property is just and equitable and if so;
(c)To identify all relevant contributions and to weigh them;
(d)To consider matters under section 75(2) of the Act which are commonly referred to as ‘needs factors’; and
(e)To give consideration as to whether it is just and equitable to make the order.
EVIDENCE AND CREDIT FINDINGS
Courts have long observed that it is not the role of a Trial Judge to “rummage” through the material to fit together evidence to decipher a party’s case.[10]
[10] Wei & Xia (No 5) [2023] FedCFamC1F 679, [147]; Selkirk & Selkirk [2019] FamCAFC 63, [17]; Walpole & Secretary, Department of Communities and Justice (2020) FLC 93-950, [53].
Unfortunately, in this case the Court has been required to do exactly that to determine a just and equitable outcome. In my view the “rummaging” has been exacerbated by:
(a)The poor evidence given by the central parties to this litigation (Ms Sangster and Mr Sangster); and
(b)The lack of corroborative documentary material available at Trial which would have assisted the Court to have a clear understanding of even simple chronological events and financial transactions.
All of the parties bear the onus of establishing their respective cases on the balance of probabilities.[11] In these reasons, findings of fact are made on the balance of probabilities based on the demeanour and evidence of each of the parties.[12] I am not required to refer to every piece of evidence nor refer to each argument or submission relied upon by the parties.[13] A written Judgment is not a transcript of the Trial. I have endeavoured to reach my factual conclusions based on contemporary materials, objectively established facts and on the apparent logic of events.[14]
[11] Evidence Act 1995 (Cth) s 140.
[12] Evidence Act 1995 (Cth) s 140.
[13] Housing Commission of New South Wales v Pastoral Company Pty Ltd [1983] 3 NSWLR 378, 385-386.
[14] Fox & Percy (2003) 214 CLR 118, [31].
In deciding facts according to the civil standard of proof, I have had regard to following:
(a)First, to consider not just what the probabilities are on the limited material which the Court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision; and
(b)Second, to have regard to the ability of the parties, particularly the party bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have done so.[15]
[15] Wei & Xia (No 5) [2023] FedCFamC1F 679, [151] citing Ho v Powell (2001) 51 NSWLR 572, [14]-[15].
The onus of proof in relation to critical issues concerning the beneficial ownership of various assets in this case is borne by Ms Sangster. She seeks to persuade the Court that notwithstanding the various legal title holdings of the real property in the Joint Balance Sheet, all the real properties should be included in the division of assets at Trial. This contention by Ms Sangster must be determined considering the clear statement by the High Court in Stanford & Stanford [2012] HCA 52 (‘Stanford’) that there is “no concept of community ownership arising from marriage in Australian law.”[16] This approach, if accepted by the Court, has the corresponding effect of inflating the asset pool available for division between Ms Sangster and Mr Sangster.
[16] Stanford & Stanford [2012] HCA 52, [39].
The concept of onus of proof has been referred to by the High Court in Strong v Woolworths [2012] HCA 5 at [44] and Hampton Court Ltd v Crooks [1957] HCA 28 at [371]. The authorities emphasise what was described by Harper J in as Wei & Xia (No 5) [2023] FedCFamC1F 679 (‘Wei & Xia’) at [153]:
These authorities highlight the importance of inferential reasoning in reaching a conclusion about proof generally and discharge of an onus of proof. Such reasoning has long been understood as a process that requires the application of general human experience to determine whether the hypothesis that is sought to be proved is a conclusion that can be drawn given the alternatives that reasonably may be suggested and the standard of proof required (Morgan v Babcock & Wilcox Ltd (1929) 43 CLR 163 at 173 (Knox CJ and Dixon J)).
The strength of the subject inference depends upon the quality of the underlying evidence. It must be reasonable to draw the inference from primary facts. Mere conjecture will not suffice.[17] Ultimately, a Court “must feel an actual persuasion” of the fact or inference before it can be found. Mere speculation is always insufficient. An exactness of proof is required.[18]
[17] Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262, 275-278; Carr v Baker [1936] 36 SR (NSW) 301, 306-307.
[18] Peterson & Davis (No 3) [2022] FedCFamC1F 650, [307]
In Wei & Xia at [162], Harper J stated:
Moreover, according to long standing authority, in making a finding of any fact, the tribunal “must feel an actual persuasion” as to its existence, allowing for “indefinite gradations of certainty”, but actual persuasion should not be produced by “inexact proofs, indefinite testimony, or indirect inferences” (Briginshaw v Briginshaw (1938) 60 CLR 336 at 361 and 362 (Dixon J) (“Bringshaw”)). Heydon J pointed out in Hellicar at [255], despite some earlier authority to the contrary, that “actual persuasion” is a state of subjective belief or state of mind held by the tribunal of fact, which may be unattainable if the material for decision are “slight, general or scanty” (referring to Ho v Powell) (See Strong v Woolworths at [76] per Heydon J; Minister for Immigration and Border Protection v Makasa (2021) 270 CLR 430 at [38] (Kiefel CJ, Gageler, Keane, Gordon, and Edelman JJ)).
The evidence in this case covers nearly 30 years of married and family life. The evidence was made up from affidavits, cross-examination and exhibits. In determining whether an onus of proof has been discharged, I must assess the combined weight of all evidence, including circumstantial evidence, as a unified whole.[19]
[19] Wei & Xia (No 5) [2023] FedCFamC1F 679, [163].
In assessing the combined weight of the evidence, it is important that I comment on the evidence given by Ms Sangster and Mr Sangster. In doing so, I have little difficulty in finding that Ms Sangster and Mr Sangster are unreliable witnesses and caution must attach to their evidence in several significant respects.
Ms Sangster’s knowledge of the running of the business and the partnership, and the reasons for family financial decisions was extremely poor. She often answered questions with another question as a form of hypothesis as to why a certain transaction was undertaken. Ms Sangster gave the answer that she “was not allowed to be involved in the business” on multiple occasions when challenged about financial matters and to explain her lack of corporate knowledge. Ms Sangster said in her oral evidence that the purchase of property was “under investigation” because she considered the purchases had been made using “dubious means.”
I can positively find that Ms Sangster was content to leave the family financial decisions to Mr Sangster and Ms B Sangster, but mostly Ms B Sangster. This finding can be made on the combined evidence of Ms Sangster, Mr Sangster, Ms B Sangster and Mr J, accountant.
I am also able to positively find that Ms Sangster was deliberately not consulted by other members of her family on financial matters. In his evidence, Mr Sangster described Ms Sangster as “toxic” several times in relation to business growth and development. Mr Sangster was complimentary of Ms Sangster when describing other aspects of her contribution to married life. In my view, he did not use his oral evidence as an opportunity to needlessly denigrate his former spouse.
Mr Sangster and Ms B Sangster said in their evidence that not only did Ms Sangster not understand the business’ financial needs but that she was actively opposed to taking on debt to expand the business. Ms Sangster agreed in her evidence that she was “risk averse” and concerned about the level of borrowings.
Necessarily, Ms Sangster had a clear motivation to give a version of events which, if accepted, would have resulted in a large asset pool available for division. I, therefore, approach her evidence with a high degree of caution.
Mr Sangster’s evidence was also unsatisfactory to the extent he acknowledged many times that he has a very poor recall of past events. The answers given by Mr Sangster in cross-examination were so poor that they culminated in an oral application by Ms Sangster’s counsel to uplift his Trial affidavit.[20]
[20] The oral application to uplift was abandoned on the first day of the second tranche of the Trial on 11 December 2023.
By way of example, Mr Sangster could not recall the year when the business started nor when it closed. He had trouble remembering the preparation of his Trial affidavit and could remember signing it. He could not remember the occasion of his marriage to Ms Sangster. Mr Sangster could remember themes or topics, but could not remember specific details.[21] No medical evidence was called at Trial to explain Mr Sangster’s apparent inability to recall pivotal life changing events or even the evidence that he had given 24 hours earlier in the Trial.
[21] An adverse credit finding with respect to an aspect of a witness’s evidence does not justify the rejection of the totality of the evidence given: Et-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128.
Ms C Sangster was cross-examined for a total of 30 minutes. Her evidence is largely made up by the content of her Trial affidavit only which was largely unchallenged. Ms C Sangster asked no questions in cross-examination of any witness. I find that Ms C Sangster was also content to follow the lead of Mr Sangster and Ms B Sangster in relation to financial decisions.
In this case, on any issue where I am not able to rely on any other objective evidence and I only have the evidence of the parties, I prefer the evidence of Ms B Sangster. It is Ms B Sangster’s evidence that most assists the Court in reaching a just and equitable conclusion. It is an agreed fact that Ms B Sangster has managed the financial affairs of the partnership and company since about the year 2000. She has finance qualifications and was astute and careful in her evidence. I consider that she gave her evidence in a fair and even-handed way given that her relationship with Ms Sangster (her biological mother) is unlikely to recover from the rigours of this litigation. Ms B Sangster was also the main point of contact with Mr J, the family accountant, as they met in university when both studying. In summary, I consider Ms B Sangster to be an impressive and honest witness.
As an overview about the evidence, it is pertinent to refer here to the issue of disclosure, or lack thereof, in this case.
The duty of disclosure has been described as enforcing a high normative standard, fundamental to the integrity of the Court’s processes in determining financial cases under Part VIII of the Act.[22]
[22] Wei & Xia (No 5) [2023] FedCFamC1F 679, [168].
The Court recognises that a failure to disclose in financial proceedings may lead to unfavourable inferences against the defaulting party. The failure to disclose may have the effect of discounting the evidence of the non-disclosing party. [23]
[23] Wei & Xia (No 5) [2023] FedCFamC1F 679, [174].
In this case, I have formed the view that the evidence which should have been available to assist the Court, was hampered by the fact that Ms Sangster had retained and did not disclose, most of the business and personal documents belonging to Mr Sangster, Ms B Sangster and Ms C Sangster.
It is an agreed position that personal, partnership and business records were stored at the Suburb E property after the business closed in 2021. I accept Ms B Sangster’s evidence that she had been trying to access and recover the documents since 2021. I also accept Ms B Sangster’s evidence that Ms Sangster had made selective materials available during the currency of the litigation. Ms Sangster was still making select documents available during the Trial, including during her evidence, with Ms Sangster informing the Court that she had transported some documents to Adelaide in a Tupperware container. On 13 December 2023, Ms Sangster interjected to confirm to the Court that “14 huge tubs” of documents had not been brought to Adelaide for the Trial because it would take “two carloads to move”.[24]
[24] Transcript 13 December 2023, p. 34.
Ms B Sangster complained, and I accept her evidence, that Ms Sangster had packed up select personal items and records belonging to Ms B Sangster and Mr Sangster and the business entities at the Suburb E property, and had not permitted them to access the said property or outbuildings since they left for Western Australia in mid-2021.
The lack of corroborative documents has meant that the Court has been unable to make findings about certain events given the Court’s inability to rely on the evidence of Mr Sangster and Ms Sangster. This has meant that there are gaps in the evidence where there should not have been.
I have been required to “rummage” through the evidence to reach a result that the Court considers just and equitable in the circumstances.
BACKGROUND AND FINDINGS
Ms Sangster is 71 years of age. She resides in the home situate at D Street, Suburb E in South Australia (‘the Suburb E property’). Ms Sangster is retired and in good health. Ms Sangster is an extremely skilled ‘craftsperson’ and earns a modest income making crafts for sale.
Mr Sangster is also 71 years of age. He currently resides in Western Australia with Ms B Sangster. Mr Sangster is retired and in reasonable health. He receives a portion of the rent from the commercial properties in City O as his sole income. Mr Sangster enjoys playing sports.
Ms B Sangster is 45 years of age. She resides with Mr Sangster in Western Australia and works as an allied health worker in a business called ‘Q Business’ and is engaged in other part-time employment to supplement her income. Ms B Sangster has finance qualifications. She is in good health.
Ms C Sangster is 45 years of age. She resides in City N in South Australia and works on a casual basis as an office worker. Ms C Sangster has been diagnosed with a medical condition and has compromised health.
Mr Sangster and Ms Sangster commenced cohabitation in 1992. They entered their relationship with children from their first marriages. Ms Sangster had three children of her own from a previous relationship, one of whom is Ms B Sangster. Ms Sangster gave evidence that she has no relationship with her two other children, Mr R and Ms S. Mr Sangster had two children of his own from a previous relationship, namely Mr T and Ms C Sangster. Ms B Sangster and Ms C Sangster were each around 14 years of age when their respective parents commenced their relationship.
Mr Sangster and Ms Sangster married in 1994.
Ms Sangster alleges the parties separated on a final basis on 18 June 2021 after 27 years of marriage. Mr Sangster alleges that it was not until he was served with Ms Sangster’s Initiating Application for Final Orders in November 2021 that he became aware the relationship was over.[25] Ms B Sangster and Ms C Sangster agree that they were oblivious to the end of their parents' marriage until Ms Sangster issued proceedings for property settlement. I accept the evidence of the three respondents on this topic.
[25] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 16.
Mr Sangster and Ms Sangster have not yet divorced.
Since issuing proceedings for property settlement, Ms Sangster is now also estranged from her remaining daughter, Ms B Sangster and her stepdaughter, Ms C Sangster. Mr Sangster retains a good relationship with both Ms B Sangster and Ms C Sangster and his son, Mr T.
In 1992, when Ms Sangster and Mr Sangster commenced their relationship, they each had modest assets. Ms Sangster had a property settlement sum following agreement with her first husband in the sum of $30,000. From this amount, Ms Sangster paid $10,000 to her lawyers and had a credit card debt of $6,000. Mr Sangster agrees with this, and I so find. Mr Sangster had a Motor Vehicle 7 that he estimates was valued at $10,000, a Motor Vehicle 8 valued at $13,000 and a Motor Vehicle 9 at approximately $9,000. There is no evidence before the Court as to whether Ms Sangster agrees with Mr Sangster’s initial contributions. I do not consider that much turns on this given the passage of time and the modest nature of the assets involved.
In 1992, the parties initially lived in Town U before relocating to Town V for 12 months. During this time, Mr Sangster worked as a labourer to support Ms Sangster and the children.
In 1992, Ms Sangster’s two youngest children, Mr R and Ms S, went to live permanently with their father. This was an important event because it resulted in Ms Sangster being liable to pay child support for Mr R and Ms S to her former husband. Ms Sangster conceded in her evidence that she did not ever pay child support for Mr R and Ms S.
In 1993, the parties moved from Town V to City O where the parties both obtained employment and cared for their family.
In 1993, Mr Sangster, Ms Sangster, Ms B Sangster and Ms C Sangster moved to Town W in Region RR and commenced working in a local store. Ms B Sangster and Ms C Sangster undertook secondary education by correspondence and worked in the store one day per week.
In 1994, the parties returned to City O. Ms Sangster and Mr Sangster worked in a variety of differing jobs. Ms B Sangster and Ms C Sangster continued with their studies and assisted by working in the business one day per week. The family moved into a rented unit.
In 1995, Mr Sangster established “X Business” in partnership with Mr Y. [26] It is Ms Sangster’s position that this business commenced in 1996 and included herself and Mr Y and Ms Z as equal partners.[27] It common ground that there was no formal partnership agreement executed. I am unable to make a finding as to the composition of the partnership nor the year that it commenced given the conflicting evidence in the absence of any documentation but do not consider that anything turns on this.
[26] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 34.
[27] See the Trial Affidavit of Ms Sangster filed 16 March 2023 at paragraph 17.
It is agreed that some months later, Mr Y & Ms Z’s interest in the partnership was bought out. Mr Sangster contends that this was made possible by money given to him by his father in the sum of $6,000.[28] Ms Sangster agrees that after a few months, Mr Y & Ms Z’s interest in the business was bought out giving oral evidence that “$2,500 was borrowed” for this purpose. I am unable to make a finding about these events given the state of the evidence but do not consider that anything turns on this hiatus in the evidence given the intervening passage of time.
[28] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 35.
It is agreed that Ms B Sangster and Ms C Sangster would work in the business each day after school and all-day Saturday and upon the completion of their secondary schooling, commenced working in the business full-time.
In 1996, a property was purchased in Mr Sangster’s name only at AA Street, City O (‘the AA Street property’) for the sum of $118,000, subject to mortgage of an undisclosed amount. It is Mr Sangster’s position that Ms Sangster’s name was not included on the Title as she did not want “any debt in her name.”[29] I accept this evidence because Ms Sangster conceded in her evidence that she was personally averse to the risk of debt. A deposit of $18,000 was paid, of which Ms Sangster contends the sum of $10,000 came from her property settlement with her first husband. Mr Sangster does not acknowledge that Ms Sangster paid the deposit.[30] In the absence of corroborating evidence, I am unable to make a finding about Ms Sangster’s contribution by way of deposit to the AA Street property.
[29] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 36.
[30] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 36.
In 1996, an outbuilding at BB Street, City O (‘BB Street’) was also purchased in Mr Sangster’s sole name for about $90,000 subject to mortgage of an undisclosed amount. Mr Sangster and Ms B Sangster contend that BB Street (like the AA Street property) was purchased in Mr Sangster’s sole name because Ms Sangster did not want to pay child support to her former husband and because she was opposed to incurring debt in her name.[31] I accept this evidence. Mr Sangster also purchased a second-hand motor vehicle in his sole name to transport goods between Adelaide and City O.
[31] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 54 and the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 22.
In 1997, Ms B Sangster and Ms C Sangster commenced university studies in City CC. That same year, Ms B Sangster says she won a $10,000 Government study scholarship, which she contributed to the family business. I accept her evidence.
In 1997, Mr Sangster was involved in a serious motor vehicle accident and was badly injured. Mr Sangster’s accident was a life changing event for the family, with Ms B Sangster describing this in her evidence as a “crossroads for the whole family.” Ms B Sangster and Ms C Sangster returned to City O to help run the “X Business” with Ms Sangster while Mr Sangster recovered. Ms B Sangster subsequently transferred her university studies to the City O campus and continued studying whilst working full-time in the business.[32] Ms C Sangster was unable to defer her studies or transfer them to City O. She says that consequently, she never returned to university and continued to work in the family business full-time during this period.[33] I accept this evidence.
[32] See the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 21.
[33] See the Trial Affidavit of Ms C Sangster field on 24 April 2023 at paragraph 16.
There is no dispute that from 1997 to 2021, Ms B Sangster worked full-time in the business and amongst other duties, was responsible for administration work, the business finances and liaising with Mr J, the accountant for the parties and the entities. Ms B Sangster worked in the business for her entire adult life until it closed in 2021. Ms B Sangster astutely observed in her evidence that she would have earned more money working as a professional in private practise but had decided against this to work and help the family.
It is also agreed that from 1997 to 2021, Ms C Sangster worked full-time in the business in sales and social media marketing save for periods when she obtained external employment. Ms C Sangster continued to work in the family business after hours and on weekends when working full time elsewhere. For many years Ms B Sangster and Ms C Sangster did not have their own bank accounts and did not draw a wage. The family lived frugally and worked hard.
In or about 2000, the “Sangster” partnership was formed. No written partnership agreement was executed by the three partners. I accept Ms B Sangster’s evidence that the partnership was established to “recognise” the efforts of Ms C Sangster and Ms B Sangster who were both working in the business on a full-time basis and had contributed personal funds to the business.[34] Ms Sangster agreed in her evidence that she was not included in any conversations with Mr Sangster “and the girls” regarding the formation of a business partnership. Ms Sangster is therefore unable to give any evidence on the basis for the formation of the partnership. I reject her evidence that she had asked for the partnership name to be changed to include her name and that she was “scoffed at” for asking.[35] This is an example of Ms Sangster seeking to reconstruct past events to suit her narrative.
[34] See the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 22.
[35] See the Trial Affidavit of Ms Sangster filed 16 March 2023 at paragraph 23.
In late 2000, the business was renamed from “X Business” to “DD Business”. Mr Sangster, Ms Sangster, Ms B Sangster and Ms C Sangster all continued to work in the business in varying ways. There is no dispute that in this early period, the family invested money earnt from the business back into the business and did not draw a wage. Ms B Sangster was clear in her evidence that between 2000 and 2010, she and Ms C Sangster had retained earnings “left inside the business” so that it could expand. I accept this evidence.
In 1997 (according to Ms B Sangster) or 2000 (according to Ms Sangster), a local business called “EE Business” commenced at the outbuilding premises at BB Street. “EE Business” employed two people, one of whom was Mr T, Mr Sangster’s son.
In 2000, (according to Mr Sangster and agreed by Ms B Sangster) (or somewhere between 2002 and 2005 according to Ms Sangster), a property at 2 P Street, City O (‘the 2 P Street property’) was purchased by Mr Sangster, Ms B Sangster and Ms C Sangster as tenants in common for the sum of $285,000 subject to a mortgage of an undisclosed amount. The 2 P Street property is owned by the partnership and recorded in the partnership financials. Ms Sangster gave evidence that she “wasn’t allowed” by the family to have her name on the title for the commercial property nor be a co-mortgager. Ms Sangster claims that her requests to have her name registered on the title were “scoffed at and dismissed” by the other members of the family. For the reasons I have already found, I do not accept her evidence. This is another example of Ms Sangster seeking to reconstruct past events to suit her narrative.
In 2005, a block of land at FF Street, Town GG, South Australia (‘the Town GG property’) was purchased for about $200,000. The evidence is unclear about whether a mortgage was required. The Town GG property was registered in the names of Mr Sangster, Ms B Sangster and Ms C Sangster as joint tenants. Mr Sangster gave evidence that the Town GG property was purchased because he and Ms Sangster had discussed retiring there sometime in the future. I accept this evidence.
In 2005, the Sangster Family Trust was established when consideration was being given to purchasing a unit in City O for Mr T to live in. Ms B Sangster and Ms C Sangster were the appointors and Mr Sangster, Ms B Sangster and Ms C Sangster, the trustees. It is an agreed position that the Trust has been dormant since it was established.
Somewhere between 2005 and 2010, the “EE Business” was closed. During this period two businesses called HH Business and JJ Business were operated by the family. There was scant evidence given at Trial about these businesses.
In 2009, the property at BB Street, City O was sold. The final payment to discharge the mortgage in the sum of $172,694.87 was made in early 2009 to a KK Bank home loan account in the names of Mr Sangster, Ms B Sangster and Ms C Sangster.[36] There is a hiatus in the evidence about how much the property sold for and where the proceeds were applied.
[36] See Exhibit L7.
In early 2009 the mortgage to KK Bank secured over the AA Street property was “paid off.”[37] There is no independent evidence on the date of sale nor the sale price nor where the proceeds were applied. For her part, Ms Sangster contends that the property was sold “in or about 2010/2011… for approximately $135,000.00”.[38] The parties agree that once the AA Street property was sold, the family then moved into 2 P Street and lived onsite at the factory.
[37] See Exhibit L3.
[38] See the Trial Affidavit of Ms Sangster filed 16 March 2023 at paragraph 33.
There is no clear independent evidence of the sale prices for BB Street nor the AA Street property nor where the net proceeds were applied.
In 2011, the Suburb E property was purchased freehold in the names of Mr Sangster, Ms Sangster, Ms B Sangster and Ms C Sangster as joint tenants for the sum of $535,000.
In the absence of corroborative documentation, I accept Ms B Sangster’s evidence that the Suburb E property was purchased using a combination of monies realised from the sale of the BB Street property, the Town GG property and a $150,000 KK Bank overdraft in the names of the three respondents.[39] Ms Sangster and Mr Sangster gave different evidence about the source funds used to buy the Suburb E property.[40] I have already found that in relation to the financial arrangements of the family I prefer Ms B Sangster’s evidence. No primary source documents nor a settlement statement were provided to assist the Court. Nor was the Court provided with a breakdown of the various monetary contributions.
[39] See the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 38.
[40] See the Trial Affidavit of Mr Sangster filed 20 April 2024 at paragraph 73 and the Trial Affidavit of Ms Sangster 16 March 2023 at paragraph 35.
In 2012, the Town GG property was sold with the full proceeds of $270,413.72 paid to LL Bank.[41]
[41] See Exhibit H1.
In 2012, Ms Sangster effectively retired and relocated to the Suburb E property in South Australia. Mr Sangster, Ms B Sangster and Ms C Sangster remained living in City O. Ms Sangster contends that she moved to Suburb E “…with the understanding that [the] First, Second and Third Respondents would also relocate permanently to City N the following year.[42]” I am unable to make a finding about any common intention to all relocate to Suburb E in 2013 because this question was not put to any of the three respondents during their evidence. Quite obviously it did not happen because it is a common position that the three respondents all remained living in City O until 2021.
[42] See the Trial Affidavit of Ms Sangster filed 16 March 2023 at paragraph 36.
After the Suburb E property was purchased, renovations were undertaken. I accept Ms B Sangster’s evidence that the renovations cost more than $285,000. It is an agreed position that the renovations and improvements were paid for by the partnership and the company.[43]
[43] See the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 39.
Importantly for this case, it is a common position that the Suburb E property was purchased as a retirement home for Mr Sangster and Ms Sangster. I am satisfied on the evidence that this is so because of the similar evidence given by Mr Sangster, Ms Sangster and Ms B Sangster which I set out as follows:
(a)Ms Sangster gave evidence that the Suburb E property was purchased for “us” and was to be “our forever home”. For the first time, Ms Sangster’s name was included formally on the title for a property. When asked why she was registered as a joint owner for the Suburb E property, Ms Sangster’s evidence suggested that she did not know. She posed the question that “maybe they (the respondents) had thought it time that I be included on something.” Ms B Sangster gave evidence that Ms Sangster’s name was included because Ms Sangster had expressed a concern that she could be evicted from the property by Ms B Sangster and Ms C Sangster if Mr Sangster died. I accept Ms B Sangster’s evidence;
(b)Mr Sangster agreed that the intention behind the purchase of the Suburb E property was so that he and Ms Sangster could retire there.[44] He confirmed the intention to retire to Suburb E and live there permanently again in his oral evidence. He said that he wanted to live near Ms C Sangster to support her due to her ill health;
[44] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 74.
(c)During his evidence, Mr Sangster was asked by the Court about Suburb E property’s purchase:
HER HONOUR: Was there any intention for [Ms B Sangster] or [Ms C Sangster] to live with you and [Ms Sangster] in the [Suburb E] property or was that to be the home of you and [Ms Sangster].
[MR SANGSTER]: Oh, no. That’s the last thing in their whole lives that they’d ever want to do. [Ms B Sangster] always wanted to go to Western Australia and I hate Western Australia and [Ms C Sangster] wanted her own place which they both deserve, they worked for 25 years hard and that’s all they got is the [small houses].
HER HONOUR: But the [Suburb E] property was to be for you and [Ms Sangster] in your retirement?
[MR SANGSTER]: And I was going to bring my son down and put him in the [outbuilding] at the back which we extended and we were gonna work from there.
HER HONOUR: Yes, I think I recall you telling me that from last time.
[MR SANGSTER]: Yes. It was a dream I had, yes.[45]
(d)Ms B Sangster deposed that the ownership reflected the interests in the Suburb E property despite “the [Suburb E] property being purchased as a home for [Mr Sangster] and my mother to live in.”[46]
(e)Ms B Sangster went on to say in her evidence:
…we wanted our parents to live in that house. It was big enough that we could stay and visit if we wanted to and what we all agreed on is – it’s a very large home – they could live there in retirement, and we set it up as the tenants in common so that if any of us fell off the perch the interest would flow to the rest of the members of the family, and they said they’re older; they want to retire in years to come. [Ms C Sangster] and I – if they were in nursing homes or anything like that [Ms C Sangster] and I could move into that home together and then rent the other properties out for an income in our retirement… Mum [[Ms Sangster]] was adamant that she didn’t want her name on any business properties, but, of course, the house is excluded from the pension asset test and that’s why we purchased it like that… We prioritised [the Suburb E property] first knowing that in years to come it would still be held within the family.[47]
[45] Transcript 11 December 2023, p. 4.
[46] See the Trial Affidavit of Ms B Sangster field on 24 April 2023 at paragraph 38.
[47] Transcript 13 December 2023, p. 11-12. Ms B Sangster is incorrect on the title holding. The Suburb E property was purchased as joint tenants.
Based on the evidence lead at Trial, I am able to confidently find that the Suburb E property was purchased for the sole purpose of becoming a home for Mr Sangster and Ms Sangster. Whilst the property was large enough to allow family members to visit, it was never intended to be a permanent home for Ms B Sangster and Ms C Sangster. There was no common intention for all four family members to live at Suburb E at the date it was purchased nor at any time after it was purchased.
This finding is also supported by Ms B Sangster’s purchase of a home for herself in Western Australia and Ms C Sangster purchasing a home for herself in City N.
I find that the names of Ms B Sangster and Ms C Sangster were included on the title as joint tenants for two purposes – to assist if Ms Sangster and Mr Sangster required aged care accommodation in their older years and ultimately upon their deaths as a right of survivorship.
After moving to Suburb E in 2012 and until the business closed in 2021, Ms Sangster received the sum of $390 per week from the DD business for her discretionary spending together with the use of a credit card. There is no dispute that in this period all Ms Sangster’s personal and household expenses were paid for by the DD business.
To the extent that there is a dispute as to how often Ms Sangster worked in the business after moving to the Suburb E property, I prefer the evidence of Mr Sangster and Ms B Sangster. I find that from 2012 until late 2020 when the business closed, Ms Sangster worked for “…a few weeks per year”.[48] Ms Sangster was given an opportunity to refute this assertion by producing corroborative evidence by way of flight records but did not to do so. It was left to Ms B Sangster to do this by way of the flight information detailed in Exhibit L28.
[48] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 85.
In early 2016, a property at M Street, City N (‘the City N property’) was purchased freehold in the name of Ms B Sangster and Ms C Sangster in as joint tenants for the sum of $335,500. I accept Ms C Sangster’s evidence that the City N property was purchased because Mr Sangster and Ms Sangster would be residing at the Suburb E property, and she would therefore be close to her family.[49]
[49] See the Trial Affidavit of Ms C Sangster filed 24 April 2023 at paragraph 25.
It is Ms Sangster’s case that the monies necessary to purchase the City N property were paid from a KK Bank Saver account (account ending …40) in the names of Mr Sangster, Ms B Sangster and Ms C Sangster.[50] Ms Sangster, therefore, seeks a declaration that the City N property is an asset of the marriage and seeks to have Mr Sangster’s notional one-third share in the sum of $158,333 included in the Joint Balance Sheet.
[50] See the Written Submissions of Ms Sangster filed 2 April 2024 at paragraph 33.
Ms Sangster was not able to give any direct evidence surrounding the arrangements for the purchase of the City N property because she was not included in those family discussions.
Mr Sangster contends that the City N property was purchased by Ms B Sangster and Ms C Sangster using monies they earned working in the business from 1995 onwards. Mr Sangster says neither he nor Ms Sangster have an interest in the City N property. It is Mr Sangster’s evidence that the KK Bank Saver Account (account ending …40) is a personal savings account in joint names and is not attached to partnership accounts.
Mr Sangster confirmed in evidence that the City N property was put into the joint names of Ms B Sangster and Ms C Sangster because Ms C Sangster has a medical condition and because Ms B Sangster may need to care for Ms C Sangster in the future. He said the following:
HER HONOUR: Do you know why the [City N] property was put in the names of [Ms B Sangster] and [Ms C Sangster] and not just [Ms C Sangster]?
[MR SANGSTER]: [Ms C Sangster]’s very unwell and… (pause)
HER HONOUR: Do you know why the property was put in the names of the two girls?
[MR SANGSTER]: …[Ms B Sangster]’s gonna look after her.[51]
[51] Transcript 11 December 2023, p. 4.
Ms B Sangster stated that the City N property was purchased using monies from the Sangster Saver Account. Ms B Sangster agreed with Mr Sangster that the money applied to purchase the City N property came from partnership distributions, directors’ fees and retained earnings over 20 years. Ms B Sangster said:
So the money came from the bank account, as we’ve disclosed, of [Sangster].
…
So as we discussed yesterday with [Mr J]’s spreadsheet the money has come from partnership distribution and directors fees and the retained earnings over those 20 years.
…
So based on logic the funds that came out of the business that were transferred into [Sangster] savings account they’re all accounted for with the accountant, they’re all contained within the financial statements. Those funds that were paid from the business into that account include the partnership distribution for [Ms C Sangster], the directors fees for [Ms C Sangster] and the retained earnings in her account.[52]
[52] Transcript 13 December 2023, p. 5-6.
In her evidence, Ms B Sangster confirmed that the City N property was put into their joint names because Ms C Sangster has a medical condition and if her health deteriorated, Ms B Sangster would be able to handle all the bills and be responsible for the property. Ms B Sangster said:
COUNSEL FOR [MS SANGSTER]: So you agree that the property is registered in your name and [Ms C Sangster]’s name?
[MS B SANGSTER]: Yes.
COUNSEL: And why did you choose to do that?
[MS B SANGSTER]: As we’ve both testified, [Ms C Sangster] has [a medical condition], and we decided to purchase a property together. If she got sick in the future and her health deteriorated it would be a lot easier for me to help her manage the house.[53]
[53] Transcript 13 December 2023, p. 6.
Significantly and in response to a question from Ms Sangster’s counsel, Ms B Sangster stated “…in my heart, looking at the balance sheet, I see [Ms C Sangster’s] house as her house.” Like the Suburb E property, the City N property was put into names of family members for practical purposes but remained Ms C Sangster’s home and Ms B Sangster accepted this without question.
From 2016 to late 2020, the City N property was rented to tenants and the rent paid into a KK Bank ‘Rent Account’ in the joint names of Ms B Sangster and Ms C Sangster.
In 2016, Sangster Pty Ltd company was incorporated on the advice of Mr J, accountant. The company then began conducting DD Business. The directors are Mr Sangster, Ms B Sangster and Ms C Sangster. The secretary is Ms B Sangster and with each of the directors holding one ordinary share in the company.
The company owns plant and equipment including vehicles and trucks. The company has been used by the three respondents to own items not ordinarily associated with a retail business including Ms Sangster’s sewing machines and goods in a tax effective manner. It was also the family practice for company vehicles to be purchased in an individual’s name but for that asset to then end up in the company financials.
In 2016, a property at 1 P Street, City O was purchased by Mr Sangster, Ms B Sangster and Ms C Sangster for an unknown purchase price as tenants in common subject to a mortgage in the sum of $600,000. The three respondents then moved from the factory at 2 P Street and into a home above 1 P Street.
I accept Mr Sangster’s evidence that the P Street properties were put into the names of the three partners because “…[Ms Sangster] never wanted part of the business. She never trusted anything we said or done.”
In 2017, the Sangster Family Pty Ltd self-managed superannuation fund was established (‘the SMSF’) with the creation of member balances of $35,000 each for Mr Sangster and Ms Sangster.[54] Mr Sangster, Ms Sangster and Ms C Sangster are trustees of the fund and Mr Sangster and Ms Sangster are the only members. Ms B Sangster contends that she paid $15,000 each for Mr Sangster and Ms Sangster into the Saver account #...40 in June 2018 with those funds coming from her personal savings.[55]
[54] See Exhibit L26.
[55] See Exhibit L20.
In 2017, Ms C Sangster says that she contributed $20,000 by way of personal savings to the business.[56] On 30 June 2017, Ms B Sangster says that she contributed $200,000 from her personal savings which was then injected into the business.[57] This evidence was not challenged.
[56] See the Trial Affidavit of Ms C Sangster field on 24 April 2023 at paragraph 22.
[57] See Exhibits L18 and L26.
In 2017, the company purchased a new Motor Vehicle 1 for Ms Sangster at a cost of approximately $32,000. Finance was arranged for the vehicle with $250 per week in repayments being paid by the company. Motor Vehicle 1 is now freehold and registered in Ms Sangster’s sole name.
In 2018, Ms C Sangster says that she contributed the sum of $7,000 by way of personal savings to the business.[58] Her evidence was not disputed.
[58] See the Trial Affidavit of Ms C Sangster field on 24 April 2023 at paragraph 22.
In early 2020, Mr Sangster, Ms B Sangster and Ms C Sangster together discussed closing the business and leaving City O. In his evidence, Mr Sangster stated that Ms B Sangster had informed him that she was moving to Western Australia where she had friends. When COVID‑19 hit in March 2020 and the borders closed, the business experienced difficulties with supplies. The three respondents then decided to see the year out and deferred their relocation plans. This proved to be a good decision. I accept Ms B Sangster’s evidence that the business boomed when borders were shut as people in Region RR had limited choice from where to purchase goods.
By late 2020 Mr Sangster, Ms B Sangster and Ms C Sangster began to take active steps to pay down debt, close the business and leave City O. I accept Mr Sangster’s oral evidence that he did not discuss the “winding up “of the retail business with Ms Sangster prior to these steps being undertaken by the three respondents. I find that the three partners made decisions amongst themselves without reference to Ms Sangster and she was content to leave it that way provided that her needs were met.
In late 2020, Ms B Sangster transferred $252,872.49 from a partnership account to discharge the mortgage on 1 P Street, City O owned by Mr Sangster, Ms B Sangster and Ms C Sangster.[59] In four years, the combined efforts principally by Mr Sangster, Ms B Sangster and Ms C Sangster had paid down the $600,000 mortgage.
[59] See Exhibit L25.
By late 2020, company vehicles were first advertised for sale on social media. The three respondents commenced taking active steps to close the DD Business and leave City O.
In early 2021, Ms Sangster’s idyllic rural lifestyle was ruptured when the family relocated to Suburb E. Mr Sangster says that after he moved to Suburb E and into the Suburb E property, Ms Sangster was unhappy with the closure of the business and demanded that he return to City O and seek immediate employment.[60] I am unable to make a finding about this allegation as Ms Sangster was not asked the question. Given that Ms Sangster was not consulted about the business closure, the statement attributed to her by Mr Sangster seems plausible. I do not consider that anything turns on this.
[60] See the Trial Affidavit of Mr Sangster filed 20 April 2023 at paragraph 113.
Also in 2021, the DD Business was closed. Several company vehicles were relocated to Suburb E as not sold. Ms B Sangster gave evidence that she, Mr Sangster and Mr T drove the vehicles from City O to Suburb E in a convoy. At Trial, many of the company vehicles remain stored in the outbuilding at the Suburb E property.
The three respondents assert a company liability of $141,967 as set out in Part O of Mr Sangster’s Financial Statement filed on 20 April 2023. They seek to include Mr Sangster’s one-third share at $47,322. Ms Sangster asserts a nil value for this item. Part O of Mr Sangster’s Financial Statement is a compilation of the company assets and liabilities which appears to result in a net figure of $47,322. The assets and liabilities of the company are identified individually in the Joint Balance Sheet already set out herein. I consider that to include this figure would be a double dip of the items ascribed to the company referred to above.
I, therefore, propose to exclude this item from the Revised Balance Sheet.
REVISED BALANCE SHEET
Considering the Court’s findings as set out above, the Revised Balance Sheet is as follows:[111]
[111] The items included in the Revised Balance Sheet are itemised in accordance with the original Joint Balance Sheet as above taken from Exhibit W1.
ASSETS OWNERSHIP VALUE 1. D Street, Suburb E SA Ms Sangster and Mr Sangster[112]
(to be sold)$975,000 4. 1 P Street, Suburb QQ, NT Partnership $166,667
(Mr Sangster’s one-third interest)5. 2 P Street, Suburb QQ NT Partnership $216,667
(Mr Sangster’s one-third interest)10. KK Bank Account (ending …40) of Ms Sangster Ms Sangster $2,000 12. Motor Vehicle 2 Company $2,600
(Mr Sangster’s one-third interest)13. Motor Vehicle 13 Company $6,867
(Mr Sangster’s one-third interest)14. Motor Vehicle 3 Company $2,667
(Mr Sangster’s one-third interest)15. Motor Vehicle 14 Company $3,333
(Mr Sangster’s one-third interest)16. Motor Vehicle 1 Ms Sangster $23,000 17. Motor Vehicle 4(unregistered) Company $2,667
(Mr Sangster’s one-third interest)18. Motor Vehicle 10 Company $18,667
(Mr Sangster’s one-third interest)20. Sewing Machines Ms Sangster $10,000 22. Sports equipment and clothes Mr Sangster $3,000 23. Shipping Container Company $2,333
(Mr Sangster’s one-third interest)24. Tools and Toolboxes (in City N) Mr Sangster $1,667 25. Desks and filing cabinets Company $333
(Mr Sangster’s one-third interest)26. Furniture and household items & artwork Ms Sangster $2,000 27. Gardening equipment including ride-on lawn mower Ms Sangster $2,500 29. Mr Sangster and Ms Sangster’s member balances in the Sangster Family Superannuation Fund Ms Sangster, Mr Sangster, Ms B Sangster and Ms C Sangster $63,332
(Mr Sangster’s benefit rounded down)Assets Subtotal $1,505,300 (rounded down) 38. Repairs to 1 P Street, City O Partnership $11,667
(Mr Sangster’s share)40. ATO Liability Sangster Family Super Fund $10,538.76 41. ATO Liability Company $4,728
(Mr Sangster’s share)Liabilities Subtotal $26,933 (rounded down) TOTAL NET ASSET POOL (INC. SUPERANNUATION) $1,478,366 (rounded down) [112] I have recorded this as Ms Sangster and Mr Sangster’s property only due to my findings that Ms B Sangster and Ms C Sangster hold their interest on trust for Ms Sangster and Mr Sangster. The Certificate of Title records all four names as the registered owners.
Based on the above Revised Balance Sheet, Ms Sangster will be retaining Items 10, 16, 20, 26 and 27 in the Revised Balance Sheet and Mr Sangster will be retaining Items 4, 5, 12, 13, 14, 15, 17, 18, 22, 23, 24, 25 and 29. Excluding the net proceeds of sale of the Suburb E property, Ms Sangster’s assets are $39,500 and Mr Sangster’s assets are $490,800. I have found that the Suburb E property is owned by Ms Sangster and Mr Sangster. For the avoidance of doubt, I make it clear that only Ms Sangster and Mr Sangster are to share in the net sale proceeds of the sale of the Suburb E property as set out in these reasons.
The agreed company and SMSF liabilities,[113] will be paid ‘off the top’ from the net proceeds of sale of the Suburb E property.
[113] See Exhibit W1 at Items 40 and 41.
CONTINGENT LIABILITIES
The parties did not provide direct evidence on the issue of Capital Gains Tax arising if the Suburb E property is sold.
Mr J confirmed in his evidence that Capital Gains Tax could arise given that three of the four registered owners have interests in other real estate and because of his understanding that capital improvements had been made to the Suburb E property since it was purchased. Mr J was cautious when giving evidence on this topic because he had not been put on notice and did not have all the relevant data and calculations in the witness box. He stated that Capital Gains Tax was unlikely to arise for Ms B Sangster and Ms C Sangster if they did not receive a settlement sum. This is important given my findings that Ms B Sangster and Ms C Sangster hold their interest in the Suburb E property on trust for, and for the net proceeds of sale to be apportioned between, Mr Sangster and Ms Sangster. Ms B Sangster and Ms C Sangster will not be receiving any monies from the sale of the Suburb E property and based on Mr J’s evidence, no Capital Gains Tax should arise payable by each of them. I have, therefore, not included any reference to this contingent liability affecting Ms B Sangster and Ms C Sangster in my reasons.
Notwithstanding the parties’ failure to provide evidence on the Capital Gains Tax calculation, I am required to bring any potential liability to account.[114] The absence of any evidence prevents any safe finding as to the value of this contingent liability.
[114] Rosati & Rosati (1998) FLC 92-804; Rodgers & Rodgers (2016) FLC 93-703; Taffner & Taffner (2021) FLC 94-022; Rainford & Rainford [2020] FamCA 945.
Doing the best that I can, I propose to include an order that the Capital Gains Tax (if any) arising from the sale of the Suburb E property is to be paid ‘off the top’ from the sale proceeds of the Suburb E property. Given the parties close relationship with F Company, I would expect that this calculation can be achieved quickly and prior to any anticipated settlement of the Suburb E property.
In my view, it is appropriate that this liability be shared by Ms Sangster and Mr Sangster. Ms Sangster will be benefitting in the inclusion of Mr Sangster’s interests in various company and partnership and company assets. It is just and equitable that Ms Sangster share in the liabilities also.
STEP 2 - CONTRIBUTIONS BY MS SANGSTER AND MR SANGSTER
In considering an evaluation of Ms Sangster and Mr Sangster’s contributions, the Court must be careful to assess the totality of the contributions throughout their relationship together with contributions in the period post-separation.[115] The Court must assess their contributions at the date of Trial not at the date of separation. The Court is not required to undertake a mathematical exercise in assessing the contributions. Nor does the Court need to dissect each individual contribution and ascribe a percentage figure to it,[116] although an evaluation of each party’s respective contributions is necessary.[117]
[115] Dickons& Dickons (2012) 50 Fam LR 244.
[116] Bolger & Headon [2014] FamCAFC 27; Fields & Smith [2015] FamCAFC 57; Jabour & Jabour [2019] FamCAFC 78.
[117] JEL & DDF [2000] FamCA 1353.
In Mallet v Mallet (1984) 156 CLR 605, Wilson J said as follows:
15.… . However, equality will be the measure, other things being equal, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal. The quality of the contribution made by a wife as homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. She may be an admirable housewife in every way or she may fulfil little more than the minimum requirements. Similarly, the contribution of the breadwinner may vary enormously and deserves to be evaluated in comparison with that of the other party. It follows that it cannot be said of every case where the parties reside together that equal value must be attributed to the contribution of each. That will be appropriate only to the extent that the respective contributions of the parties are each made to an equivalent degree. …[118]
[118] Mallet v Mallet (1984) 156 CLR 605, 636.
The weight to be attached to an initial contribution must be assessed against the rubric of all contributions, however made, over the course of their relationship.[119] All contributions must be weighed collectively. The Court would fall into error to segment the various contributions and weigh one against the remainder.[120]
[119] Jabour & Jabour [2019] FamCAFC 78.
[120] Dovgan & Dovgan [2021] FamCA 306.
The approach to be taken in assessing contributions has been described as a broad discretionary assessment which is “neither an accounting nor mathematical exercise” and which requires a “broad brush approach.”[121]
[121] Perrin & Perrin (No 2) [2018] FamCAFC 122; Babette & Falconer [2015] FamCAFC 124.
I now turn to considering Ms Sangster and Mr Sangster’s contributions holistically and regarding section 79(4)(a) to (d) of the Act.
In this case, there is no dispute that the initial financial contributions should be assessed as equal.[122]
[122] See the Written Submissions of Ms Sangster filed 2 April 2024 at paragraph 96 and the oral submissions made by counsel on behalf of Mr Sangster in Closing Submissions.
Mr Sangster and Ms Sangster diverge when it comes to assessing the contributions made by each of them during the marriage. Ms Sangster submits the contributions should be assessed as equal.[123] Mr Sangster submits that there should be a weighting on 10 per centum in his favour on account of his greater effort in the business from 2012 to 2021.
[123] See the Written Submissions of Ms Sangster filed 2 April 2024 at paragraph 96.
I am satisfied on the evidence that from the commencement of their relationship until Ms Sangster moved to Suburb E in 2012, the parties worked together as a team providing mutual support for each other and their family but in differing ways. I can confidently find that Mr Sangster dedicated all of his time to the running of the business, and he worked very hard. Ms Sangster also worked in the business and in addition ran the home and undertook domestic duties. She also accompanied Mr Sangster on “runs” between City O and Adelaide when moving items for the business. Mr Sangster was highly complimentary of Ms Sangster as a homemaker in this period.
After moving to Suburb E, I find that Ms Sangster worked for approximately six weeks per annum in the business and on occasions when Ms B Sangster was absent. In the period between 2012 and 2021, the heavy lifting for the running of the business fell to the three respondents. Ms Sangster lived in the Suburb E property and had all her needs met by the business. In turn, she developed the gardens and maintained the property on her own. Ms B Sangster was highly complementary in her evidence of the beautiful gardens established by Ms Sangster in this period.
In this latter period, Ms Sangster and Mr Sangster still made varying contributions to the marriage but in differing ways. It is my assessment of the evidence that the arrangement between 2012 and 2021 suited the family as a united whole. Mr Sangster, Ms B Sangster and Ms C Sangster were free to run the business without any interference by Ms Sangster. Ms Sangster was able to live a quiet life doing her sewing.
I assess the contributions of Mr Sangster and Ms Sangster over the course of their long marriage as equal.
The proposed order will have no effect on the earning capacity of either party. Neither party has the care of a child of the marriage.
STEP 3 - RELEVANT SECTION 75(2) FACTORS
Before moving to the relevant subparagraphs, I record that Ms Sangster seeks an adjustment in her favour of 10 per centum on account of future needs. In the event that the Court does not add back the three sold motor vehicles and the money removed from the SMSF, Ms Sangster seeks a further adjustment in her favour of five per centum.[124]
[124] See the Written Submissions of Ms Sangster filed 2 April 2024 at paragraph 97(e) and 102.
For his part, Mr Sangster seeks and adjustment of “five per centum or thereabouts” on account of his future needs.
(a) the age and state of health of each of the parties
Ms Sangster is 71 years of age and in good health.
Mr Sangster is 71 years of age and in reasonable health.
Both parties continue to pursue their hobbies in retirement. Ms Sangster is an avid gardener and craftsperson. Mr Sangster enjoys playing sports.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
Mr Sangster receives no Government benefits. He has a taxable income of approximately $20,000 per annum, being his one-third interest paid to him by way of rent from the P Street properties. Mr Sangster was opposed to any suggestion that the P Street properties be sold as he wishes to continue to receive an income from the rent received. The evidence suggests that the apportionment of the rent received between the three partners will likely be adjusted in the most tax effective way. I consider that Mr Sangster’s interest in the income derived from the P Street properties is a valuable future financial resource for him.
Ms Sangster receives the Aged Pension of approximately $1,026 per fortnight. and earns a modest supplementary income from her crafting pursuits which she estimates at one item per fortnight.[125] The company has continued to pay the insurance premiums for the Suburb E property since litigation commenced in 2021.
[125] See the Trial Affidavit of Ms Sangster filed 16 March 2023 at paragraph 91.
Whilst I accept the submission made by Ms Sangster’s counsel that Mr Sangster has remained living with Ms B Sangster by choice, I also accept the evidence given by Ms B Sangster that she hopes to be living independently of Mr Sangster once these proceedings have come to an end. In other words, Ms B Sangster’s benevolence towards Mr Sangster has an expiry date and he will need to find accommodation of his own once these proceedings have been finalised.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain
Neither party is required to support any other person. At Trial, Ms Sangster had her commitments paid from her pension. Mr Sangster currently contributes to the expenses he shares with Ms B Sangster whilst he resides in Western Australia.
No evidence was adduced by either party to counter the proposition that they are both able to meet their commitments from their own financial resources.
In final submissions, Ms Sangster’s counsel submitted that the Court should bring to account that Ms Sangster’s relationship with Ms B Sangster and Ms C Sangster has now broken down and that Ms Sangster will not have the support of her children into her old age. I accept that submission. I do not consider, however, that this warrants any form of adjustment in Ms Sangster’s favour. Ms Sangster’s emotional estrangement from her children is not a matter I am obliged to bring to account under the Act in making orders that I consider to be just and equitable between Mr Sangster and Ms Sangster.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party
Ms Sangster receives the Aged Pension. There is no evidence to suggest this situation will change upon the making of final orders for property settlement.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The proposed orders will enable both of the parties to maintain a reasonable standard of living into the future. Each will receive sufficient funds to enable them to rehouse themselves and to pursue their activities in retirement.
No evidence was adduced by either party to counter this proposition.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
Ms Sangster seeks an adjustment in her favour of five per centum in the event that the Court does not add back in three motor vehicles and money removed from the SMSF.
There is no dispute that Ms Sangster’s money withdrawn from the SMSF should be added back into the marital pool. In the absence of any other assistance to the Court on how this should be achieved, I propose to achieve this by providing the funds ‘off the top’ from the sale proceeds of the Suburb E property.
That then leaves a consideration of the motor vehicles sold after the decision was made in late 2020 to close the business. There is no accounting of where the sale proceeds were actually disbursed. Five per centum of the net assets of the parties is approximately $73,918.
Apart from the SMSF funds, Mr Sangster opposes any adjustment in this subparagraph in Ms Sangster’s favour and any add back.
Conclusion as to Future Needs
In conclusion on future needs, I conclude that an adjustment in Ms Sangster’s favour of five per centum is just and equitable in this case. Doing the best that I can on the evidence made available at Trial, I bring to account the parties’ future financial resources and the disposal of various assets in 2021 in concluding that the weight of the evidence favours Ms Sangster by such an adjustment. I consider that the income to be received by Mr Sangster from the rent derived from the P Street properties is a valuable resource to him. Ms Sangster will be reliant on the Aged Pension and money received from her crafts business in the future.
STEP 4 – CONCLUSION AND JUSTICE & EQUITY
I am required to consider that the proposed orders are just and equitable in all the circumstances.[126] The Court must apply its various assessments to the assets it has identified. This has been described as a “leap from words to figures.”[127]
[126] Norbis v Norbis (1986) FLC 91-712.
[127] Steinbrenner& Steinbrenner [2008] FamCAFC 193, [234]
These proceedings have been on foot since 2021. The Suburb E property should be sold in order to bring about a just and equitable resolution as efficiently as possible. Whilst Ms Sangster had sought to retain the Suburb E property as a final order, she conceded at Trial that her intention was to sell the property. Ms Sangster has limited borrowing capacity, and her stated capacity would be insufficient to buy out Mr Sangster’s share. The valuations of all real property were undertaken in 2022. There is likely to have been a correlating adjustment to the value of the Suburb E property in the intervening period to 2024.
The orders I propose making will result in Ms Sangster receiving 55 per centum and Mr Sangster receiving 45 per centum of the property of the parties subject to the add back of Ms Sangster’s superannuation amount and the liabilities both agreed and contingent.
I have endeavoured to bring about a just and equitable outcome on the evidence available at Trial. The conclusion that I have reached is considered by the Court to be just and equitable based on the history and reality of these parties on the evidence at Trial.
For all the above reasons, the Court makes the orders as set out at the commencement of this Judgment.
I certify that the preceding three hundred and seventy-four (374) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 23 July 2024
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