Searle (Formerly Pencious) & Pencious And Anor
[2013] FamCA 375
•28 May 2013.
FAMILY COURT OF AUSTRALIA
| SEARLE (FORMERLY PENCIOUS) & PENCIOUS AND ANOR | [2013] FamCA 375 |
| FAMILY LAW – PROPERTY SETTLEMENT – TRUSTS – THIRD PARTIES – Highly conflicted parties – Issues as to the extent of husband’s property and extent of his liabilities – Value of property – Conflicting evidence – Failure by the husband to make full and frank disclosure – Long relationship and alleged reduction in the husband’s wealth – A claim for debt against a third party – The wife’s parents’ family trust and a claim that one third of that trust’s corpus was property of the wife – A claim by the wife for a ‘Kennon’ type contribution and broader issues as to contribution – Issues as to the husband’s health and its impact on property adjustment |
Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
AC and Ors & VC and Anor [2013] FamCAFC 60
Af Petersens and Af Petersens (1981) FLC 91-095
Albion Hotel Pty Ltd v Federal Commissioner of Taxation (1965) 115 CLR 78
Black and Kellner (1992) FLC 92-287
Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226
CPT Custodian Pty Ltd v Commissioner of State Revenue (2005) 224 CLR 98
Essex & Essex [2009] FamCAFC 236
Hickey v Hickey and the Attorney General for the Commonwealth of Australia [2003] FamCA 395
Kennon & Kennon (1997) FLC 92-757
Kennon v Spry (2008) 238 CLR 366
Lend Lease Corporation Ltd v Commissioner of Taxation (1990) 21 ATR 402
Livesey (formerly Jenkins) v Jenkins (1985) 1 All ER 106
Manzi v Smith (1975) 132 CLR 671
Oriolo v Oriolo [1985] FLC 91-653
Stanford v Stanford [2012] HCA 52
Pittman & Pittman [2010] FamCAFC 30
Vernon & Bosley (No. 2) [1997] 1 All ER 614
Weir & Weir [1993] FLC 92-338
| APPLICANT: | Ms Searle (formerly Pencious) |
| RESPONDENT: | Mr Pencious |
| INTERVENER: | Searle Pty Ltd as trustee of the Searle Family Trust |
| FILE NUMBER: | MLC | 11069 | of | 2008 |
| DATE DELIVERED: | 28 May 2013. |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 29, 30 & 31 January 2013, 13 February 2013 (directions), 20, 21 & 22 March 2013, 17 & 23 April 2013 and 13 May 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wood |
| SOLICITOR FOR THE APPLICANT: | Adrian Abrahams Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Carlile |
| SOLICITOR FOR THE RESPONDENT: | Altona Legal |
| COUNSEL FOR THE INTERVENER: | Mr Tsalanidis |
| SOLICITOR FOR THE INTERVENER: | Halperin & Co Pty Limited |
Orders
Within ninety days from the date of this Order the wife pay to the husband the sum of $346,720.
Within seven days from the date of this Order the husband do all acts and execute all documents to transfer to the wife the registration and his interest and ownership in … Mercedes … sedan motor vehicle Registration No. …, (if he has not already done so).
The husband shall indemnify the wife in respect any liability of hers arising out of husband’s and F Pty Ltd debt to the Citibank Savings liability of about $63,500.
Within seven days of the date of this order the wife shall cause to be delivered to the husband’s solicitors, Altona Legal, (if she has not already done so) the three volume Greek Cookbook.
Each party shall be solely entitled, against the other party and to the exclusion of the other party, to all other property and superannuation benefits, (including chattels) in the possession and/or control of such party as at the date of these orders; and for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof; insurance policies are deemed to be in the possession of the beneficiary thereof; superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
Order 1 of these Orders is subject to any order this Court may make to apply all or part of the $346,720 towards any outstanding costs order in favour of the wife against the husband and/or any security for costs order made against the husband.
Leave is given to the wife to file an application in a case (with affidavits in support) in respect of her application to deduct, from the sum payable to the husband pursuant to these orders, the amount payable to her pursuant to the costs orders made 5 April 2012 and/or retain an amount likely to meet that order. Such application to be filed within twenty eight days from the date of these orders and be listed before Benjamin J after 15 July 2013.
Any application/s for costs by one and/or other of the parties to these proceedings to be dealt with according to the Family Law Rules 2004 (Cth); including the lodgement of any application in a case together with an affidavit in support within the time specified in the said Rules.
All other extant applications for orders are otherwise dismissed and removed from the list of cases awaiting finalisation.
Following the expiration of the appeal period, all subpoenaed documents shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Searle (formerly Pencious) & Pencious and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 11069 of 2008
| Ms Searle (formerly Pencious) |
Applicant
and
| Mr Pencious |
Respondent
and
Searle Pty Ltd as trustee of the Searle Family Trust
Intervener
REASONS FOR JUDGMENT
INTRODUCTION
These are acrimonious property proceedings between Ms Searle (‘the wife’) and Mr Pencious (‘the husband’) following the failure of their marriage in 2008. The parties are is disagreement about the existence, extent and value of some property, the contributions made during and after the relationship and the future needs of the husband. The wife asserts that her contributions in all aspects of the relationship were made more arduous as a result of being subjected to violent behaviour by the husband.
The husband claimed that the wife has a legal or equitable entitlement in her parent’s family trust, the Searle Family Trust (‘the trust’) and he has sought orders which would have constrained the operations of the trust and the trustee company. As a consequence, Searle Pty Ltd, the trustee for the trust, became a party to these proceedings. The trustee company was represented by counsel and solicitor at various relevant times during the hearing. Further the husband claims that the trust owes him $121,677.
THE OUTCOME
Having considered all of the facts and circumstances; I have determined that the wife will retain the former matrimonial home and that property be divided as to fifty seven per cent to the wife and forty three per cent to the husband, excluding the parties’ superannuation which is to be left as it presently stands. I have not included as matrimonial property the asserted legal or equitable interest of the wife in the Searle Family Trust. I have included the investment of $295,000, which I have determined the husband retains in Greece. I have determined that the $243,779 held by the husband in I Pty Ltd at separation ought be added back and included as a current asset of the husband.
I accept that the parties each took $165,000 in cash in November/December 2008 and I have found that each of the parties have applied their respective cash sum for their own purposes over the last four or so years. There are a number of other issues I have also determined, including the alleged debts of the husband.
THE ISSUES
The issues include:
§Whether the wife has a legal or equitable interest in the trust and if so the value of that interest, on the basis of the husband’s submission that one third should be treated as the wife’s property;
§The inclusion or otherwise of the liabilities totalling $260,791, set out in the husband’s 29 January 2013 Financial Statement – including whether; a loan of $63,500 to F Pty Ltd should be regarded as a joint liability of the parties; there is a sum of $50,000 due to the husband’s father;
§That jewellery allegedly withheld by the wife from valuation, and that such jewellery be brought to account;
§That alleged debts to J Pty Ltd with the Commonwealth Bank of Australia (Commonwealth Bank) be paid from the pool of assets;
§Whether the former matrimonial home ought to be sold or retained by one or other of the parties. There is a dispute as to the value of the former matrimonial home at Suburb L;
§That a sum of $50,000 allegedly removed by the wife from a bank account prior to separation be brought to account, presumably as property of the wife or an add back in her hands;
§That an alleged sum of $70,000 owed to the wife by her business be brought to account, presumably as property of the wife;
§Whether the trust owes the husband $121,677. If so whether the debt is his or that of his cancelled company, F Pty Ltd;
§Whether at separation there was $330,000 in cash in the family safe which money was either divided equally between the husband and wife or there was $165,000 in cash in the safe which the wife took and retained;
§At or about separation there was about $243,779 in a bank account of I Pty Ltd (an alter ego of the husband and/or the wife) and which money has now been allegedly spent by the husband. Whether this amount or a part of it should be added back as property of the husband for the purpose of property division;
§Whether there should be an add back of about $54,000 in respect of interests in racehorses owned by the husband at separation;
§Whether a sum of $295,000 formerly held by the husband in an account in Greece should be treated as property of the husband for the purpose of property division. With a consequential consideration in terms of contribution if it is added back to the pool of property;
§Whether the wife’s parents provided between $120,000 and $200,000 towards the costs of construction of the parties’ home in the early 1990’s and if so whether the wife and/or the husband owed the wife’s parents $185,000 at separation. Subject to the determination of the alleged loan by the wife’s parents to the parties, whether the wife’s parents directly and/or indirectly contributed to the construction of the parties’ family home, and if so the impact that has on the parties’ respective contributions;
§The wife claims and the husband disputes that the husband engaged in a course of violent conduct towards the wife during the marriage. The wife claims that the husband’s violence to her and the children had a significant adverse impact upon her contributions and made them more arduous than they ought to have been. If the wife’s allegation is established, how it should be taken into account, having regard to the principles set out in Kennon & Kennon[1];
§Whether the husband’s health is such that he is unable to engage in paid employment and as such there should be an adjustment of property in his favour as a consequence of the disparity of the parties’ earning capacities; and
§Having determined all of these issues, what property order, if any I should be made pursuant to s 79 of the Family Law Act 1975 (“the Act”).
[1] Kennon & Kennon (1997) FLC 92-757.
In his case outline the husband seeks a property division of fifty five per cent to him and forty five per cent to the wife. On his calculations this would involve at least transferring the matrimonial home to him plus a further payment of $500,000.
The cost of valuing the assets of the trust would have been oppressive to the trust in the absence of a determination of the wife’s legal and/or equitable interest in the trust. The trust appears to own about five groups or single holdings of properties. The course I adopted, with the consent of counsel for all parties, was to take submissions in respect of that trust issue by counsel for the trust and the husband, and later take submissions on the substantive property issue by each of the counsel for the husband and the wife.
In the event that I determined that the wife did have a legal and/or equitable interest in the trust which had some monetary value, or I needed that value for purposes of determination of financial resources pursuant to s 75(2) of the Family Law Act, I would relist the matter and inform the parties. I would then have taken evidence as to the particular value of the assets of the trust. As it was the Court and the parties had some indication of the property contained within the trust from the affidavit of Ms S (the wife’s mother) filed 15 March 2013.
For the reasons set out below, I am satisfied that the trust is a mere expectancy of the wife, akin to a possible inheritance and there is no value in her possible entitlement under the terms of the trust. In the circumstances of my findings, I did not need the trust valued for the assessment of the s 75(2) factors.
The trust is the alter ego of the wife’s parents and they remain firmly in control of it. The property of the trust can be spent or applied by the trustee as it wishes, the trustee can be changed, the beneficiaries can be changed, the date of vesting can be changed and the parties to whom the trust will vest can be changed. It remains a wholly discretionary trust. The wife’s parents are appointors and guardians of the trust.
On the evidence, I am satisfied that neither the wife nor the husband has contributed any property to the trust. The trust has not made distributions to the wife, the husband or the wife’s siblings. As is common in families, the wife’s parents have from time to time loaned or given financial assistance to their children and financially helped their children, and perhaps grandchildren. All distributions made by the trust have been to the wife’s parents or to what appears to be their company.
To limit the scope of the trustee’s costs, counsel and solicitor for the trustee company limited their appearances to time relevant to the trust issue.
BACKGROUND
At the time of the hearing the husband was aged 47 and the wife was aged 48. They met in the mid 1980’s and married and commenced cohabitation in September 1988.
The husband worked throughout the marriage until a date shortly before separation.
The wife undertook tertiary studies during the marriage and obtained a number of qualifications and degrees. She is now a healthcare professional by occupation and runs her own business. She earns a good income.
The wife claims she was the primary carer for the children and primary homemaker during the marriage. The husband disputes this assertion and claims that he was an equal or at least significant child carer and homemaker.
There are two children of the relationship, C and K. C is now aged nineteen and attends full time study at university. K is now aged sixteen, turns seventeen in August 2013 and studies full time. The children live with the wife and in 2012 the wife paid school fees for K of just under $9,000[2]. The husband has not spent time with C since May 2009 and has not spent time with K since March 2010. There is an issue as to the cause of those circumstances, which issue I do not need to determine in the context of this proceeding.
[2] Affidavit of wife filed 15 June 2012
In February 1990 the parties purchased a property at O Street, Suburb L (‘the matrimonial home”). In the early 1990’s the existing home on that property was demolished and a new home built. The parties entered into a contract with the wife’s father to build that new home. There is an issue as to the extent of the involvement of the wife’s father in that building.
The wife alleges that the husband was violent to her throughout the relationship and in particular assaulted her in March 2000, August 2001, April 2005 and November 2008. She alleges the husband assaulted C in October 2008, November 2008 and May 2009.
The wife claims that the parties separated in August 2008 but remained living under the one roof. The husband says they separated on 1 December 2008. Not much turns on whether that date was August or December 2008. In any event the wife and children left the matrimonial home on or about 1 December 2008 and the parties have not cohabitated since that date.
It is an agreed fact that shortly before 1 December 2008 the wife removed $165,000 in cash from the safe at the matrimonial home. There remain issues about the use of that money and whether a similar sum remained in the safe, which cash the wife alleges has been retained and used by the husband.
The husband was involved in a motor vehicle accident in February 2009 and suffered injuries. He received periodic payments from the Victorian Transport Accident Commission from a time soon after the accident until February 2012. He is now in receipt of a disability pension. The husband claims he does not have capacity to be in paid employment, but the wife disputes that assertion.
In late 2011 the husband’s application for a ‘Serious Injury Certificate’ was rejected by the Victorian Transport Accident Commission. The husband has commenced proceedings in the County Court of Victoria to review that decision.
The wife commenced parenting and property proceedings in December 2008 and an Independent Children's Lawyer was subsequently appointed.
On 30 January 2009 the husband vacated the matrimonial home pursuant to a Court order.
On 26 February 2010 the husband filed an application seeking to join the wife’s parents to the proceedings. The husband sought an injunction to require the wife’s parents to pay money in their hands into trust, being the sum of $150,000 allegedly paid to them by the wife from monies which she took from a safe at the former matrimonial home. That application was dismissed.
On 3 December 2009 the husband filed an application in a case seeking to restrain the wife’s solicitor from acting in the property and parenting proceedings. Those proceedings were protracted and involved a number of interlocutory hearings. That injunction application was heard by Cronin J. The proceeding was conducted over two days in February 2011, two days in September 2011, and four days in February 2012, some eight hearing days. The husband was represented by senior counsel in that litigation.
On 28 February 2012, the husband’s application for the injunction was dismissed. The wife sought costs and on 5 April 2012 Cronin J ordered the husband to pay the wife’s costs of the proceedings on an indemnity basis. The husband was also ordered to pay the costs of the Independent Children's Lawyer.
The substantive proceeding was then placed in my docket. I did not have jurisdiction to make parenting orders in respect of C, the elder child and the parenting application in respect of K was essentially abandoned.
The husband filed an appeal in relation to the order made on 28 February 2012. It is an agreed fact that that appeal was abandoned.
In his case outline, the husband sought an order that ‘there be no order in relation to the present costs dispute’. If that is an application for me to reconsider the indemnity costs orders made by Cronin J, I decline such invitation, as it is beyond the powers of this first instance Court.
The wife sought to adduce evidence of a doctor as to her father’s present health. However, that application to use that evidence was not pressed, the husband’s counsel having said that no adverse comment would be drawn about the wife’s father failing to give evidence in these proceedings.
Any statement of fact in these proceedings is to be regarded as a finding of fact unless the contrary is clear from the context of the statement.
THE EVIDENCE
The wife
The wife relied on three affidavits being those sworn 8 December 2008, her trial affidavit filed 15 June 2012[3] and her affidavit filed 1 October 2012. There were some minor changes to one or other of those affidavits. The wife relied upon an affidavit filed 13 May 2013, being material in respect of the video evidence of her counting the $330,000 cash.
[3] Annexed to that affidavit were documents numbered from page 36 to 138. These pages were removed from the affidavit and were tendered as Exhibit “W1”. Albeit annexure “U”, which was withdrawn.
The wife gave evidence in chief which included evidence that C was attending University full time.
The wife said that she had been in receipt of a Family Tax Benefit and received a letter from Centrelink in 2011 asserting that she did not have the primary care for the child. She made enquiries in respect of that letter and documents were produced to her under a Freedom of Information request[4].
[4] Exhibit W2
The wife gave evidence in relation to her attendance at the office of Mr P (a psychologist involved in the previous parenting proceedings between the parties). That appointment was on 20 July 2009. She said during the meeting with Mr P, the husband became angry and raised his voice. She did not recall the content of his statements while shouting. The wife said she was very distressed because of her recollection of the husband’s behaviour when they lived together. She said the husband became louder and louder and C commenced to cry.
When the husband continued to verbally abuse the wife and C, Mr P said ‘look at what you are doing to your daughter’. The wife said she endeavoured to comfort the child and that she (the wife) was shaking. At one stage she remembered the husband stopped, turned his head and then started yelling and threatening again.
The wife gave evidence about the alleged loan of $121,677 to the trust. She had no knowledge of any such loans advanced by her, F Pty Ltd or the husband to either her father or the trust. She said that ‘we’ (the husband and she) did not provide such funds. She had no knowledge of any demands made to her parents by the husband for these alleged monies. She said the only money they had paid to her parents was $20,000 or $25,000 in the early 1990’s which was, in her evidence, in part payment of the home.
The wife was cross-examined in relation to her life with her parents prior to her relationship with the husband. She was cross-examined in relation to medication she had taken as a consequence of a childhood illness and its effect on her well-being. The wife said she was depressed after the birth of C. She was cross-examined in terms of attending at a Mother and Child Unit shortly after the birth of C and denied that it was some form of psychiatric treatment.
The wife conceded that after the birth of C she suffered from some sleep deprivation. The wife said she did not recall suffering depression after the birth of K. The wife said that her mood was depressed from time to time but that she did not suffer from depression.
The wife was questioned as to her studies throughout the relationship, it is clear that the wife obtained a Bachelor Degree before the parties married and she undertook considerable study subsequent to the parties’ marriage. I am satisfied that in addition to studying she was the primary carer of the children and from time to time, was in paid and unpaid employment.
The wife was criticised during cross-examination in relation to assertions she made in the 1990 loan agreement. I am satisfied the wife was concerned, in 2000, as to the monies that her parents had paid towards the house and was endeavouring to obtain some protection. In doing so she reframed the advance made by her parents as a loan. I do not accept that it was a loan and as such will not include it as a liability.
The wife’s evidence in relation to the cash in the safe was cogent and consistent. She was not shaken in cross-examination. One of many examples of her careful approach was when the husband asserted that the wife did not encourage the children to go to Greek school or discourage them. It is clear that the younger child attended Greek school until the end of 2012 and, in recent times, at least, the wife has paid those school fees.
Generally the wife was impressive in giving her evidence; she was thoughtful, careful and made concessions against her interests when appropriate. The wife’s evidence was consistent, credible and I generally accept her version of events. For example, a number of her complaints in relation to physical violence were supported by photographs and medical evidence such as that of her doctors.
The wife was robustly cross-examined on her videoing of the $330,000 in September 2008 and her removal of $165,000 in cash in late November 2008. She was not shaken during cross-examination and I accept her evidence.
The wife was subjected to thorough cross-examination over a relatively long period of time and she dealt with this thoughtfully, frankly and thoroughly. I generally accept that her evidence is reliable, subject to care being taken of her subjectivity in seeing events through the prism of their own case.
Dr Q
Dr Q gave evidence as set out in his affidavit filed 11 July 2012. This affidavit was read into evidence and he was cross-examined. Dr Q had provided a letter to the wife’s then solicitors in August 2001. He details two particular alleged violent episodes, stating;
In March 2000, [the wife] stated that she was assaulted by a hit to her face from her husband. There was sensory loss to the right side of her face, consistent with bruising of the nerve.
On 21/8/2001, I was consulted by [the wife] in a distressed state. She stated she was physically assaulted by her husband. She complained of headache, neck pain, left facial pain, left upper arm pain, left thigh pain. There was swelling and bruising to the left side of her face. The next day when examined there was visible bruising to the left arm and left thigh. The injuries were consistent with a physical assault as stated.
There was no issue taken in relation to Dr Q’s qualifications and he gave evidence by telephone (with the consent of counsel for the husband and wife). Dr Q’s observations were consistent with the assault complaints made by the wife.
Dr Q’s evidence was clear, cogent and was not in any way impeached. I accept his evidence.
Dr R
Dr R gave evidence as set out in her affidavit filed 11 July 2012. This affidavit was read into evidence and she was cross-examined. Dr R took a history from the wife and observed injuries in accordance with that history.
She reported from her notes;
April 5, 2005.
[the wife] was abused by husband last night, wants separation and asked him to leave. He grabbed her, threw her to the ground and dragged her across coat hangers on the floor which scratched her right forearm.
[H]asn’t made application to the court because won’t take out an intervention order >> made him worse 5 years ago similar episodes.
o/e [presumably observations and examination]
Right forearm bruising and scratches, carpet burns to both knees painful left hip but no bruising, full range of movement 2 [too] …..
Dr R’s qualifications were not challenged and her evidence was not impeached. In 2005 the wife referred back to the earlier alleged physical assaults in 2000 and 2001 (those events 5 years before). Dr R gave evidence by telephone in accordance with the consent of counsel for each party.
I accept Dr R’s evidence, which is consistent with that of the wife on this issue.
Mr P
Mr P is a registered psychologist who has been in private practice for over seventeen years. He gave evidence in accordance with his affidavit sworn 27 November 2012. That material was read into evidence.
When giving his oral evidence Mr P said that he had dictated a note immediately after the events of 20 July 2009. Those notes were not attached to his affidavit, but in fairness he had not had access to his file for quite a number of years as it was held by the Family Court. Mr P conceded that his memory of events from years before was not entirely reliable and he relied upon the notes he made at the time. That note was tendered into evidence[5].
[5] Exhibit W4.
Mr P had a clear memory of the husband’s anger and hostility which he described in his note as ‘incredibly angry, aggressive, attacking, blaming and abusive tone he uses in relation to his wife and children’. In his note Mr P described the husband’s outburst and tirade directed at the wife, which occurred in front of C, as ‘purely disturbing’. Despite Mr P confronting the husband in an attempt to make him stop, he continued unabated. From Mr P’s observations it was clear that once the husband started his outburst there was no way he could refrain from the abuse.
Mr P has described the incident in clear and unambiguous terms. When challenged by the husband’s counsel with regard to the husband’s version, he could only say that the husband was untruthful.
Mr P was greatly disturbed by the husband’s aggressive, attacking and abusive behaviour towards the wife and child. Mr P said the child K was not present in his room when this occurred (she was waiting outside) but that she was clearly distressed after the husband walked past her on his way out to leave. In Mr P’s opinion, K had heard the angry outburst.
Mr P said that the children had told him that this was the kind of behaviour which they had endured during the relationship. Mr P continued to counsel the children and encouraged them to see the husband.
In his note dated 20 July 2009, Mr P observed of the husband the following:-
[the husband] blames [the wife], the children, her lawyer in particular for fuelling the intervention order application, but he cannot see that his behaviour is frightening, intimidating, threatening, aggressive and outright abusive. I will need to address this individually with [the husband] suggest to him that he needs to consider psychological treatment for himself and I think that this will prove to be very challenging for him. I think it likely that I will then be the subject of his narcissistic rage, the likelihood is that he will either be highly critical of me, denigrate me, certainly to his solicitors, possibly lay siege against me through the Registration Board, anything other than look at himself and his need to apologise for his abominable behaviour.
This was somewhat prophetic on the part of Mr P. The husband, consistent with the predictions of Mr P, lodged a complaint against Mr P with the Psychologist Registration Board. That complaint was unsuccessful. The husband was not satisfied with that outcome and lodged a further complaint against Mr P with the Victorian Civil and Administrative Tribunal. Mr P was obliged to attend at a session of Victorian Civil and Administrative Tribunal. That application was withdrawn when the husband was advised that he had commenced that further proceeding in the wrong division of the Tribunal.
It is clear that the husband’s approach to disagreement is by escalating the conflict.
Mr P is a highly skilled and highly competent counsellor and I accept his evidence in relation to the husband’s behaviour at that time. His evidence was powerful and compelling. I accept the accuracy of the evidence of Mr P as to the events of 20 July 2009 and his observations at that time.
Ms T
Ms T is a senior jewellery specialist who provided evidence in her affidavit filed 23 July 2012. She valued the wife’s jewellery at $22,175.
Ms T’s qualifications and evidence were not contentious. She was not required for cross-examination.
Mr U
Mr U is the head of Jewellery at Company V and he is a valuer of watches. He provided evidence in his affidavit filed 23 July 2012 as to the value of two watches, a Type W wristwatch which he said was valued at $3,500 and a Type X wristwatch valued at $200, making a total of $3,700. There was no issue as to Mr V’s qualifications and evidence, they were uncontentious. He was not required for cross-examination.
Mr Y
Mr Y is a Manager, Auctioneer and Valuer of BB Auctioneers. He provided evidence in his affidavit filed 11 July 2012 as to the value of chattels at the matrimonial home (the wife) and the husband’s home. He valued the chattels at the matrimonial home at $2,480 and the husband’s home at $1,900. Mr Y’s evidence was admitted without issue. There was no issue as to his qualifications and evidence, they was uncontentious. He was not required for cross-examination.
Ms S
Ms S is the mother of the wife. Ms S swore an affidavit filed 15 March 2013 which was read into evidence. She was cross-examined by counsel for the husband. A further affidavit of Ms S was filed in Court on 13 May 2013 and that material was read into evidence. Ms S was cross-examined in respect of that evidence; her recollection of events was generally consistent with that of the wife. I accept that evidence of Ms S is reliable.
Ms S is a woman in her eighties and she was clearly nervous about giving evidence. She also struggled with hearing. In her evidence she acknowledged errors in the accounting of the trust in regard to the alleged debt to the husband of about $121,677. She had difficulty explaining how and where the figure arose and the $1,150 change in that figure between the years 2000 and 2001.
Ms S, erroneously, denied that her daughter had been a director of Searle Pty Ltd. That error did not impeach the overall veracity of her evidence.
Ms S is clearly not sophisticated in relation to accounts and company structures. She, at times, had used language which showed that she was confused between the use and her understanding of the meaning of the terms ‘debtors’ and ‘creditors’; that in itself may be one of the reasons the figure of $121,677 appeared. Ms S did not understand the specifics of book-keeping but understood how the trust operated. From the detailed profit and loss statements of the trust, it was clear that the trust made profits at least each year from 2000 onwards.
Ms S was frank and clear in her evidence that the trust was a vehicle for the assets of her husband and herself. She said that she and her husband discussed all aspects of the business and that there had been no loans from them to their son-in-law. She was adamant on that point.
Whilst there was an issue in relation to Ms S’s evidence, such as her belief that the wife was not a director of the trustee company and some confusion about signatures, I am satisfied that Ms S endeavoured to tell the truth and was clear in her mind that there was no loan from the husband to her, her husband or the trust.
Ms S said that the properties owned by the Trust were purchased between 1978 and 1993 and comprise of: CC Street, Town DD; Property 1, EE Street, Town DD; Property 2, EE Street, Town DD; FF Street, Town GG; and AA Street, Town DD.
I am satisfied that all of the assets of the trust were acquired by Mr & Ms S with their own resources. I am satisfied that distributions under the trust were made by the trust to Mr S or Ms S or their company HH Pty Ltd. The copies of the trust income tax returns from 2001 to 2011[6] confirm that circumstance for those years.
[6] Exhibit H11
On cross-examination of Ms S by counsel for the husband, it appears that from time to time, money was paid to the wife by the trust against some form of loan account. It is neither unusual nor uncommon for parents to provide financial assistance to their children.
Ms S gave evidence about her observations of the counting of the cash amounting to $330,000 at the wife’s home in September 2008. She did not see the cash taken from or returned to the safe. I accepted her evidence in relation to that issue. Ms S’s affidavits had been prepared by the solicitors for the Searle Family Trust. Counsel for the husband commenced to cross-examine Ms S in relation to a mortgage on another property. The husband had not given notice to the solicitors for the trust that they wished to cross-examine Ms S on any issue apart from that arising of and about the DVD. I would not allow that cross-examination. It was open for the husband’s solicitors, if they thought it appropriate, to re-open their case and ask questions of Ms S, having regard to that new evidence (if that was the case). The solicitors who were representing the trust could then have been present as the issues seemed to relate to a trust issue.
I am satisfied, that although Ms S’s evidence is subjective, it is reliable and I generally accept her evidence.
The valuers - Mr JJ, Mr KK and Mr LL
Mr JJ is a qualified real estate valuer who was appointed a single expert for the purpose of valuing the matrimonial home. He completed that valuation on 15 June 2012 and concluded that its value was $1,275,000.
The husband asserted that that valuation was too low and that he had employed a ‘shadow expert’. That expert, Mr LL valued the same property at $1,600,000. The husband sought to rely upon Mr LL’s evidence. In view of the discrepancy, some $325,000, I acceded to that request and gave both the husband and the wife permission to rely on other experts.
The wife employed Mr KK who in later 2012 valued the home at $1,400,000.
Mr JJ provided his valuation in his affidavit filed 11 July 2012. His value was as at 15 June 2012. He reported on the valuers meeting in his affidavit filed 16 January 2013. Mr KK provided his valuation in his affidavit filed 1 November 2012. His value was as at 23 October 2012. Mr LL provided his valuation in his affidavit filed 29 October 2012. His value was as at 23 October 2012.
I directed that the experts meet and prepare a report and in accordance with that direction and the Family Law Rules 2004 (Cth) the valuers met on 17 December 2012 for a number of hours. They had extensive discussions in relation to the value of the property.
The valuers subsequently gave evidence concurrently. There was some cross-examination but there was no serious question as to the underlying qualifications of the valuers.
The valuers agreed as to zoning, the size of the block, the square meterage of the home, that a fair figure for the land alone was about $1,093,000, a fair figure for the garage was $15,000 and the depreciated value of the in ground pool was $40,000.
The valuers disagreed as to the value of the house on the land, Mr KK and Mr JJ having a view that it should be valued at $1,000 per square metre and Mr LL at $1,100 per square metre. There was disagreement as to the relevant comparable sales.
Mr KK and Mr JJ agreed to a revised valuation figure of $1,450,000. Mr LL came to a revised figure, at the time of the meeting of $1,481,000. He said he felt he needed to reflect on that figure.
All three valuers agreed that the contents of the letter dated 17 December 2012[7] were an accurate report of the meeting and its outcomes. There was an issue as to whether Mr LL had agreed to the value of $1,481,000 or not. When pressed, he said he did not agree to the lower amount of $1,450,000, but said that if the other valuers had agreed to a figure of $1,481,000 then he would have agreed to it as a final valuation figure.
[7] Letter from Mr JJ dated 17 December 2012 entitled ‘Valuers Conference Report’ annexure “GC-1” to affidavit of Mr JJ filed 16 January 2013.
Mr LL contacted one or other of the valuers a short time after the meeting indicating that in the circumstances he now persisted with the view that the property had a value of $1,600,000. Mr LL had spoken with the husband in the intervening period.
Mr LL used a broader range of comparable sales upon which to base his value. This included properties not on a main road and one property which was a corner block. He also referred to a value of a property which was a brand new property but on the same road. I prefer the comparable sales and the underlying reasoning for using them, by Mr KK and Mr JJ.
As to the value of the house, on balance, I prefer the evidence of Mr KK and Mr JJ. In particular that the house was not a master built home and that it had significant problems in terms of leakage which had been an issue for many years, including prior to separation. Mr JJ in particular works as a real estate agent in that area and is conscious of the subtleties with regard to the market in that particular part of Melbourne. The property was in Suburb L but it abounded the Suburb MM area.
Valuation is not an exact science. I am satisfied with the general approach adopted by all three valuers but prefer the understanding of the particular areas and analysis of the house value exhibited by Mr KK and by Mr JJ. This included the state of the home, the position of the land, the circumstances on the main road and the need to be cautious about comparable sales some distance away.
As such I am satisfied that the value of the former matrimonial home is $1,450,000 as asserted by Mr JJ and Mr KK.
I have considered whether I should simply order the property be sold however it has been the matrimonial home of the parties, the home of the wife since shortly after separation and the home of the children and other factors discussed elsewhere in these reasons. In the circumstances I will attribute the value to the matrimonial home of $1,450,000.
The interpreters – Mr NN and Ms OO
Affidavits sworn by professional Greek interpreter, Mr NN, and paraprofessional Albanian interpreter, Ms OO, both filed 13 May 2013 were read into evidence. Their evidence was treated as being uncontroversial by counsel for each of the parties. I accept their interpretation of the words spoken on the DVD which is exhibit ‘W10’.
The husband
The husband gave evidence in terms of a number of his affidavits, namely:
·Affidavit filed 14 January 2009 – this affidavit relates to parenting issues and addresses the questions of family violence. The husband denied any form of violence by him to the wife. He says her evidence is fabricated. Further he asserted that the wife was violent to him and engaged in self harm;
·Affidavit filed and sworn 3 December 2009 – This affidavit relates primarily to parenting and the previous injunctive proceedings. It briefly mentions the meeting with Mr P in June 2009;
·Affidavit filed 26 February 2010 – This affidavit touched upon the alleged loan made by the wife’s parents for building the matrimonial home. It also dealt with the cash in the safe and the loan the husband asserts his alter ego made to PP Pty Ltd;
·Affidavit filed 28 June 2010 – This affidavit relates to the children and the wife using the services of a private investigator in 2007 and 2008;
·Affidavit filed 23 March 2012 – This affidavit deals with the husband’s present financial circumstances, including the loan to PP Pty Ltd, the money invested in Greece and other alleged debts;
·Affidavit filed and sworn 21 May 2012 – This affidavit informed the Court of the current state of the proceedings and set out the husband’s concerns about the valuations of the matrimonial home, the wife’s jewellery, the motors vehicles and the respective house contents. The husband also raised issues about disclosure and discovery;
·Trial affidavit filed 25 June 2012 – This was the husband’s primary trial affidavit;
·Affidavit sworn 28 August 2012 and filed 7 September 2012 – This affidavit relates to allegations of non disclosure by the wife in relation to the trust and evidence to support his application for a real estate valuer;
·Affidavit filed 27 November was not read into evidence. It simply annexed documents in relation to the trust, those documents were tendered separately and are exhibit “H11”;
·Affidavit filed and served 30 January 2013 – this affidavit provided some details of the alleged loan of $121,667 by the husband to the trust;
·Affidavit to the husband’s Financial Statement sworn 25 January 2013 and filed 29 January 2013;
When giving evidence the husband prevaricated, obfuscated and at times was plainly untruthful. He was evasive, unresponsive and, at times, overbearing and aggressive. There are numerous examples of this approach and I will set out a small sample in these reasons.
The husband cannot excuse his demeanour during evidence on the basis that giving evidence was an unfamiliar environment to him and that his poor presentation of evidence was a consequence. He had given extensive evidence before Cronin J in the injunction application heard over eight days between February 2011 and February 2012. Further in the course of this hearing Counsel for the wife rightly observed that;
5.2 because of the manner in which the current hearing took place, the Husband had breaks during the course of giving his evidence in which he was afforded an opportunity to reflect upon the manner in which he was presenting the same; and
5.3 during his evidence in the current proceedings the Husband was warned that he should give his evidence in a responsive fashion by his own Counsel and by the Court. This process involved an indulgence being granted to the Husband by both the Wife and the Court.
It was submitted on behalf of the wife that I should use the comments of Mr P in his 20 July 2009 file note. I have not had regard to that evidence, I hasten to add that that is not a reflection upon Mr P (as I regard his evidence as reliable and objective; his qualifications were not in any way impeached). I have not done so because Mr P was not asked to provide such an assessment of the husband and to give it weight in those circumstances would have been unjust.
During cross-examination, the husband often responded to the questions put to him by saying that he failed to remember. I accept the submission of counsel for the wife that this was often a device or ruse by the husband to avoid difficult questions. An example of this was the series of questions asked of him about telephone calls to real estate valuer, Mr LL, as contended by the wife’s counsel.
The husband had demonstrated that he was not a witness of the truth with respect to financial matters. In the hearing before Cronin J, he claimed that he had no understanding of his income at that time and further claimed that he would not be able to state whether his annual income at that time was $1 or $2 million. At that time the husband was in receipt of Transport Accident Commission (“TAC”) payments. The husband did not reveal that information to the Court (see transcript 8 February 2011 at page 29).
The husband clearly engaged in a verbally violent outburst in the office of Mr P directed at the wife and C. In reference to the incident on 20 July 2009 at Mr P’s office, the husband said in evidence that it did not reflect adversely upon him. Counsel for the husband put to Mr P that the husband had behaved in a contained and controlled fashion at that time. This was at odds with the recollections of both the wife and Mr P and brought about an incredulous rely from Mr P of “are you serious?” The husband’s explanation of it was simply not credible and I find it was untrue. He made up an explanation, in an endeavour to excuse the inexcusable.
The husband is the registered owner of the car used by the wife. She has had the use of that vehicle since separation. The husband’s evidence in relation to how he discovered that his key to the motor vehicle did not work, i.e. that he discovered that circumstance because he was told by an employee of the car yard, was entirely different to the evidence he had given before Cronin J in a previous hearing.
His explanation about why he needed access to the car was implausible. I am satisfied that he wasted access to the car to continue to intimidate and control the wife.
The husband was cross-examined in relation to the reason for the significant proceedings to restrain the wife’s solicitor for acting for her. His answers in respect of his view of the wife’s solicitor were examples of prevarication. He would not answer the questions asked of him; he would instead make up questions himself and answer those questions. He said that he did not want to teach his wife a lesson but made it clear that that was what he was trying to do in relation to the evidence he gave on 9 February 2011.
The husband was cross-examined about whether he was going to seek a change in representation in respect of the Independent Children’s Lawyer. He kept backtracking and said he did not make such an application and it was put to him that he had contemplated making such an application. His evidence in this regard was an attempt to obfuscate.
The husband was cross-examined in relation to the litigation he took against the car company after his key had been changed, so that he could not gain access to the car used by the wife. In his evidence before me, the husband asserted that he would like the car. He said that one of the reasons he wanted the key was to maintain its value in case he was to take possession of the car, if the wife did not want it.
Yet that answer is different to the evidence given by the husband on 8 September 2011 when he was asked by Cronin J the following[8]:
Well, you would have solved the problem by transferring the registration, wouldn’t you? – yes
Mr Wood [the wife’s counsel] could we move to another topic? This is as clear as a bell. This was – the whole exercise of giving the car key was nonsense wasn’t it? You weren’t ever going to get the car. You didn’t want the car?
Answer: No I didn’t want the car, Your Honour.
[8] Transcript 8 September 2011 page 108 line 30
That answer was different to the answer he gave this court.
The husband made application to Centrelink in June 2011 for a lump sum Family Tax Benefit claiming that for the 2008/2009 and for the 2009/2010 financial years, he had the care of the children forty eight point two per cent of the time. This assertion was false given the circumstances where the husband and wife had ceased cohabitation on 1 December 2008 and the husband had spent no time with C since May 2009 and no time with K since March 2010.
He spent limited time with K between 1 July 2009 and March 2010, which were fortnightly visits during school term, a few hours one Tuesday per fortnight during school term and part of the school holidays. Yet he asserted that the time he spent with the children was almost equal to that which the wife spent with the children. The cross-examination of the husband in respect of this issue was difficult as he endeavoured to deflect blame onto others such as his accountant and the wife for (in his view) alienating the children from him. His evidence in this respect was disingenuous and he was attempting to distance himself from his application for money in recognition of his care of the children where, for a significant period of time, he was not involved in their care (for whatever reason).
In his trial affidavit[9] the husband claims to have spent $281,857 between 1 December 2008 (the date the husband asserted that he and the wife separated) and the date of his affidavit. During this period of time the husband was involved in a motor vehicle accident and claims that as a result of the accident he is unable to undertake paid employment. He adduced very little in terms of medical evidence[10], when logically much medical evidence must have been available to him, given his application for a ‘Serious Injury Certificate’ and his appeal of the adverse decision. The husband received payments from the Victorian Transport Accident Commission of about $1,500 per fortnight, a total of about $117,000[11]. The husband did not provide an explanation as to how he otherwise funded his lifestyle. I am satisfied that it likely came from $165,000 cash I have determined that he retained.
[9] Trial affidavit filed 25 June 2012, at paragraph 45.
[10] Medical report for disability pension – Dr QQ – exhibit W10.
[11] Letter from Victorian Transport Accident Commission 24 October 2011 – annexure “A” to affidavit of husband filed 23 March 2012.
The husband asserts that he needed to borrow $253,291.75 from friends[12]. I am troubled as to the nature of that evidence. In his March 2012 affidavit, the husband says he was repaid $15,000 on behalf of PP Pty Ltd via Mr RR. In his trial affidavit the husband discloses no debt to Mr RR[13]. In his 2013 Financial Statement the husband asserts he owes Mr RR $135,000. No satisfactory explanation has been offered in that regard.
[12] Financial Statement filed 29 January 2013 page 12.
[13] Paragraph 47.
In his March 2012 affidavit the husband says he owes his parents $60,000. In his trial affidavit he says he owes them $30,000 and in his 2013 Financial Statement he asserts he owes his parents $50,000.
As at January 2013, the husband alleged he had personal loans of $253,291, up from $141,781 in his June trial affidavit[14]. Plus he says ‘Further legal fees of $65,000 from 16 May to date [January 2013] have also been paid. He claims that PP Pty Ltd paid another $55,000 to one lot of creditors and $15,000 to alleged pre-separation creditors. This is set out in his March 2012 affidavit[15]. Some of these alleged debts pre-dated the PP Pty Ltd loan and were incurred in circumstances that the husband could well afford to pay them. The husband alleges debts to Mr SS of about $50,000 and to Mr TT either pre-date or are contemporaneous with the PP Pty Ltd loan.
[14] Ibid.
[15] Paragraphs 2(f)(vii) and 2(g).
One of the debts the husband alleges was paid by PP Pty Ltd on his behalf is a purported November 2008 liability to UU Pty Ltd[16]. The invoice contained no tax file number and UU Pty Ltd was deregistered in December 2005[17]. I am concerned as to the veracity of that evidence.
[16] Paragraph 2(g) and annexure “P”.
[17] ASIC search exhibit W8.
The husband claims he lent $176,000 to PP Pty Ltd in February 2010. The loan agreement between the husband and PP Pty Ltd asserts that a rate of five per cent interest per year is payable on the loan amount of $200,000[18]. The husband now claims that all of those monies have been spent or dissipated. The husband’s explanation was that it was better than the interest rate he would get at the bank. I note that in the loan agreement the husband required a personal guarantee from Mr RR. This occurred at about the same time the husband asserts that he needed income, arising from his inability to undertake paid employment following the accident in February 2009. The husband then advanced $295,000 to his cousin in Greece, without security, as an interest free loan. The husband’s assertion in that regard is risible and I do not believe him.
[18] Exhibit W7.
As I indicated earlier, the husband was involved in a motor vehicle accident and he was cross-examined about any compensation claim he had in relation to that circumstance. He evaded questions and failed to produce satisfactory medical reports (he annexed a letter to Centrelink to his affidavit which was unsatisfactory). Apart from his personal assessment of his alleged injuries[19], the husband provided no detail of the nature and extent of his injuries.
[19]Trial affidavit paragraph 42 and 42.
The onus was on the husband to call or produce medical evidence. Medical reports must have been produced to support the claim for compensation. Accordingly, I conclude that the contents of those reports would not have helped him establish that he is not able to work.
The husband has not paid child support to the wife since 30 January 2009. He was obtuse when responding to questions about his income during cross-examination by counsel for the wife before Cronin J in February 2011[20]. In the proceedings before me, the husband took the view that the wife had sufficient income to provide for the children. In 2011, he took the view that the wife could use the money from the safe to support the children and believed that those funds made provision for the children. It seems that the husband’s answers change depending on the circumstances in which the question is asked. His explanation was unsatisfactory. In the proceedings before Cronin J, he asserted that the $165,000 taken from the safe by the wife could be used for child support but in these proceedings he seeks an add-back of those funds. He cannot have it both ways.
[20] transcript 8 February 2011, pages 27, 28 and 29.
Earlier in these reasons I referred to the money which the husband had in Greece which he asserted was lent to a ‘cousin’ interest free. That was a potential source of income which the husband had available to him but chose not to invest it in a manner which would have given a return. Even at five per cent, it may have earned interest between $10,000 and $15,000 per year.
The husband is not a witness of truth; his evidence is not credible and he will tailor his answers to suit what he believes will give a favourable outcome, without regard to whether or not it is factually correct. Time and language do not permit exact expression of every single unsatisfactory feature of the husband’s evidence that has assisted in forming the impression that I have formed, and the conclusions that I have reached.
Overall, whenever the husband perceived that a fair and direct answer to a question might not be in his interests, he resorted to denial, non-recollection or avoidance of the question. The husband was evasive, disingenuous and many of the contentions asserted by him were implausible. Accordingly, when there is an issue of fact to be determined between the husband and another witness, unless there is objective material supporting the husband’s contention, I will generally accept the other witness.
In family law proceedings, a clear principal exists, that it is essential that each party makes full and frank disclosure of all facts and material to the other party and to the Court. See Black & Kellner (1992) FLC 92-287, Weir & Weir [1993] FLC 92-338, Vernon & Bosley (No. 2) [1997] 1 All ER 614 and Livesey (formerly Jenkins) v Jenkins (1985) 1 All ER 106, Oriolo v Oriolo [1985] FLC 91-653.
The husband has not been frank with either the wife or the Court in his financial disclosures. These reasons are littered with examples of his failure to disclose; including the $165,000 left in the safe, the I Pty Ltd monies and the money in Greece to name a few. I accept that the authorities provide that a Court need not be overly cautious in its approach to a person’s financial affairs if a Court is satisfied that a party has not made full disclosure to the Court, which is the situation the husband has created for himself in these proceedings.
THE LAW REGARDING THE TREATMENT OF PROPERTY
The law regarding the treatment of property is under some level of refocus and review following the High Court decision in Stanford v Stanford in November 2010.[21] Prior to that decision, the preferred approach (although not entirely uncontroversial) was the four step approach reflected by the Full Court of this Court in cases such as Hickey & Hickey & Attorney-General for the Commonwealth of Australia[22]
[21] Stanford v Stanford [2012] HCA 52.
[22] Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395.
In determining the property applications I have had regard to the parties’ relationship, marriage and subsequent separation; together with their property transactions during and after the relationship. The parties have been separated for some years. The parties’ differing assertions as to the date of separation are not material in the determinations I need to make. The approach of both parties is that this is a matter where there ought to be an adjustment of property between them. They have engaged in acrimonious litigation for a number of years. Having regard to the particular circumstances of these parties I am satisfied that it is appropriate and just and equitable to consider an alteration of the parties’ rights and interests in their respective property.
The first task is to identify, according to ordinary legal principles, the existing legal and equitable interests the parties have in property.
Following that task, the Court will consider whether, in the circumstances of these parties, it is appropriate and just and equitable for any orders to be made having regard to s79 of the Act. The Court will have regard to the relevant contributions and other matters to be taken into account under s 79(4) of the Act.
The Court will consider, in light of the evidence, whether to make orders to adjust the parties’ property interests. As part of that task the Court will have regard to the requirements of s 79(2) of the Act that it is just and equitable in all of the circumstances to make an order under the section.
THE PARTIES’ PROPERTY
The property of the wife or to be retained by the wife is;
Former matrimonial home at Suburb L (Wife) – value determined
$1,450,000.00
Wife’s jewellery - evidence of Ms T – property of wife
$22,175.00
Wife’s chattels – evidence of Mr Y
$2,480.00
2006 Mercedes motor vehicle
$ 23,000.00Total
$1,497,655.00
The property of the husband or to be retained by husband.
Money in Greece
$295,000.00
Husband’s watches - evidence of Mr U – property of husband
$3,700.00
Husband’s chattels – evidence of My Y
$1,900.00
Commonwealth Bank Term Deposit (I Pty Ltd) (Husband) – determined
$243,779.00
VV Ltd Shares (Husband) number of shares held – 32,600 as at January 2009
$ 650.002007 Mercedes motor vehicle
$40,000.00
F Pty Ltd loan for husband’s car
($63,500.00)
Total
$521,529.00
The total property is;
Wife’s net property
$ 1,497,655.00
Husband’s net property
$ 521,529.00
Total
$2,019,184.00
Superannuation
The husband and wife each have superannuation entitlements in slightly in excess of $10,000. Whilst the figures are not identical they are similar. I sought submissions from counsel for each of the parties as to how I should deal with the superannuation. Each of them submitted that it should not be included in the pool of property of the parties and each should be left with their superannuation without any splitting order or otherwise.
Having regard to the other significant assets in the pool of property and the submission of their counsel, which in all the circumstances is a just and equitable outcome, I will adopt the consent approach that was submitted to me.
Whether the wife has a legal or equitable interest in the Searle Family Trust and if so, the value of that interest, on the basis of the husband’s submission that one third should be treated as the wife’s property
The question
The wife’s parents, Ms and Mr S, set up the Searle Family Trust in 1977 (‘the trust’). This is a trust with a broad range of discretions contained within the trust deed. The wife’s parents are both appointors and guardians of the trust. The trust has assets the value of which could total ten million dollars or more. Apart from a purported loan of about $121,667 alleged by the husband (which alleged debt I have rejected for reasons set out elsewhere) the property of the trust has been wholly contributed by the wife’s parents.
The husband submits that the wife has a legal and/or equitable interest in the corpus of the trust and that such interest is property of the parties’ marriage within the meaning set out in s 4 of the Family Law Act. The husband sought to value all of the property of the trust. With the approval of counsel for the parties I adopted a course whereby I would determine this issue and hear final submissions as if the property of the trust was not property for the purpose of this determination. If I determined that the wife has a beneficial interest in the property of the trust I would relist the property proceedings and enable evidence to be called in terms of the precise value of the trust, insofar as it related to the wife.
Searle Pty Ltd is the trustee of the trust and it became a party to these proceedings. The trustee was legally represented and participated in the hearing. Both the wife and Searle Pty Ltd contended that the wife held no beneficial interest in the trust as could be treated as property of the wife under the provisions of the Family Law Act.
The outcome
Having heard, read and considered the relevant evidence and the submissions of and by the parties and Searle Pty Ltd, I am satisfied that the wife has no beneficial interest in the trust for the following reasons:
The reasons
The Searle Family Trust was created by a Deed of Trust in August 1977. At the same time Searle Pty Ltd was incorporated and appointed trustee of the trust. Since 1977 the wife’s parents have and continue to be sole shareholders and directors of Searle Pty Ltd. From time to time the wife and/or her sisters have been co-directors with their parents of Searle Pty Ltd. After being shown a document from the Australian Securities and Investment Commission (ASIC), the wife accepted that she was a director of the trustee company. The wife gave evidence that she was a director of Searle Pty Ltd from May 1992 to 22 February 2012. I accept the wife’s evidence that whilst she was a director of this trustee company, this was something she had done for her father and was not aware of the consequences but simply signed documents at his request. I accept the evidence of the wife notwithstanding that she signed the documents.
Ms S and Mr S have managed the affairs of Searle Pty Ltd and the trust from 1977 and continue to do so. The trust was varied by a deed dated 1 September 1984. The effect of that deed has been a matter of some contention. A further deed was executed on 4 March 2005 and purported to vary the trust. It is not in issue that the 2005 deed is of no effect.
The Trust Deed names the wife and her sisters as “specified beneficiaries”. Clause four of the 1977 Deed of Trust provides discretion as to how the corpus of the trust was to be distributed but contained a default provision whereby the specified beneficiaries (including the wife) took the corpus on vesting day in equal shares. The “specified beneficiaries” are generally defined as being the wife and her siblings in clause one of the 1977 Trust Deed. In that same clause, “specified beneficiaries” are included as meaning “general beneficiary”. Counsel for the trustee submitted, and I accept, that the power of the trustee in respect of general beneficiaries includes the specified beneficiaries.
It is not an issue that the trustee under the 1977 deed had power to revoke, add to or vary all or any of the details in the deed. These powers were subject to clause 10 of the deed which provided power to the guardian or the survivor of them.
The husband asserts that the 1984 deed made two significant variations to the trust. Firstly, the vesting date of the trust was varied from the original 79 years to the date of death of the last to die of Mr S and Ms S. That variation is not in issue as to the power and operation of that change. The second variation provided that the trust fund be distributed to the wife and her two sisters in equal shares. The meaning and efficacy of this provision was agitated before me. The 1984 deed complies with the clause 10 requirements.
Ms S said in evidence that the purpose of the 1984 deed was to ensure that upon the deaths of she and her husband, the trust would be distributed between her three daughters in equal shares.
The husband contends that the effect of the 1984 deed was that the wife’s purported one third interest in the trust must vest on the death of her parents and that her entitlement upon vesting is both fixed and certain. The husband says that this provision distinguishes this trust from the many cases where the distribution upon vesting is discretionary. His counsel submitted that “the capital beneficiary of an estate has an interest as the beneficiary will receive a share of the estate upon vesting. Such a position is akin to a residuary legatee.”[23] Counsel for the husband was ambivalent about the impact of the 1977 trust deed if the 1984 deed was invalid or inoperative in terms of the purported fixed interest of the wife.
[23] Husband’s written submissions filed in Court 23 April 2013, paragraph 12.
Initially, the submissions for the husband on the trust contended that if the 1984 deed was ineffectual then the husband’s case on that issue would have no merit. When pressed on this submission, counsel for the husband said that the entitlement of the wife, whether under the 1984 deed or under the previous provisions of the trust, gave her an entitlement. I accept that his submission was on the broader basis, although I am against him in the substance of his submission.
It was submitted that the consequence of the 1984 deed was that the wife had an irrevocable entitlement to one third of the trust capital.
Counsel for Searle Pty Ltd submitted that the wife was merely a discretionary beneficiary, which is in effect a potential beneficiary. It was submitted that the wife had a mere expectancy or hope of consideration by the trustee and does not have a proprietary interest, whether legal or equitable in the trust.
In Jacobs’ Law of Trusts in Australia (7th ed, 2006) at 47-48 paragraph [314] the leaned authors observed;
[314] The meaning of the expression ‘discretionary trust’ primarily is a matter of usage not doctrine…….
The chief jurisprudential interest of discretionary trusts is that a member of the class of possible objects of appointment has no proprietary interest in the trust assets (unless there is no other discretionary object, although the member does have standing to compel the proper administration of the trust.
In Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ said at [8];
In submissions upon the appeal, the term "discretionary trust" was used as an overall description of the trusts for which the Deed of Settlement provided. The meaning of this term is disclosed by a consideration of usage rather than doctrine, and the usage is descriptive rather than normative. Accordingly, a "discretionary trust" is not a component of the doctrinal divisions by which there is determined the formal and essential validity of trusts. For this purpose, divisions are made between express trusts, implied or resulting trusts, and constructive trusts, between purpose trusts and non-purpose trusts, between trust powers and bare powers, and between testamentary trusts and settlements inter vivos. On the other hand, "discretionary trust" has no fixed meaning and is used to describe particular features of certain express trusts.
Neither the wife nor the husband has received any distributions from the trust. They do not, nor have they ever controlled the trust.
Counsel for the trustee contends that the 1984 deed did not alter the essential characteristics of the trust, nor did subsequent deeds. The only change arising from the 1984 deed was that the vesting date was brought forward.
The 1984 deed made provision for the distribution of income and capital of the trust fund. It was upon this which the husband primarily (but not wholly) relied. It was the trustee’s contention that such provisions were ineffectual, invalid and misconceived.
Firstly, the recitals of the 1984 deed express that the powers upon which the deed was based arose from Clause 1(f)(i) of the 1977 Trust Deed. That provision gives the trustees absolute discretion to vary the vesting day (subject to clause 10 – which requires the consent of the guardian). In this case the guardians provided consent. In addition the guardians are still alive and thus the power to vary the vesting day remains at large with the trustee and the guardians. In addition, clause three of the 1984 deed purports to distribute and vest the trust fund ‘as soon as is practicable’ without reference to the vesting day specified in the 1984 deed. I accept the submission of Counsel for the trustee that;
The Vesting Day is central to the operation of the dispositive provisions of the Trust Deed. Before the Vesting Day, the trustee only has discretions to pay, apply or set aside the net income for a specific Accounting Period (see clause 3(b)) or to raise money and pay capital of the Trust Fund (see clause 6(a)), but not to create absolute beneficial interests in all of the income or all of the Trust Fund
Further the provisions of clauses 2 and 3 of the 1984 Deed are invalid because they purport to fetter the absolute discretion of the trustee in relation to the trust fund under the provisions of the Trust Deed[24]. Counsel took me to Jacobs’ Law of Trusts in Australia (7th ed, 2006) where it was expressed at page 369;
[1704] It is the duty – ‘[p]erhaps the most important duty’ – of a trustee to adhere rigidly to the terms of the trust. …..
The rule that the trustee must strictly conform to and carry out the terms of the trust modifies all other rules because these other rules are applied subject to any provisions contained in the trust instrument itself.
[24] Clauses 3(c)(iv) and (v), 6(a) and 10 of the 1977 Trust Deed
Counsel for Searle Pty Ltd further submitted;
The invalidity of clauses two and three of the 1984 deed by reason of the inconsistency with clause one and the fetter of the trustee’s discretion is highlighted by clause four which requires the accountants to lodge all taxation returns and notify the world at large that the trust “has vested”. This is not only misconceived but no-one acted on the basis that the trust had vested because the trustee has continued to make distributions of income to [Mr and Ms S] as evidenced by the taxation returns of the trust.
In conclusion, counsel set out in his written submissions that:
The [wife] has no beneficial interest in the Trust for the following reasons:
(a) As a discretionary beneficiary, the [wife] is a potential beneficiary with a mere expectancy or hope of consideration by the trustee and does not have a proprietary interest, whether legal or equitable in the Trust Fund. See Jacobs’ Law of Trusts in Australia (7th ed, 2006) at 47-48 paragraph [314] and 632-633 paragraph [2315]; Gartside v Inland Revenue Commissioners [1968] AC 553 at 604-607 per Lord Reid and at 617-618 per Lord Wilberforce; Re Goldsworthy, deceased (1969) VR 843; Kennon v Spry (2008) 238 CLR 366 at 393-394 per French CJ and at 414-415 per Heydon J.
(b) The 1984 Deed and the 2005 Deed are ineffectual and misconceived in relation to vesting any income or the Trust Fund of the Trust.
(c) The 1984 Deed altered the Vesting Day, at which point beneficial interests in the income and the Trust Fund of the Trust vest in beneficiaries under clause 4 of the Trust Deed. Any earlier vesting of income or the Trust Fund under the 1984 Deed is therefore incongruous.
(d) Any vesting of the Trust will not take place until the date of death of the last to die of [Mr or Ms S], at which time any beneficial interest will be created. Until then the whole of the Trust Fund, both legal and equitable, is vested in [Searle Pty Ltd] as trustee: see Glenn v. Federal Commissioner of Land Tax (1915) 20 CLR 490 at 497 cited with approval in CPT Custodian Pty Ltd v. Commissioner of State Revenue (2005) 224 CLR 98 at [25]. The [wife] may not acquire any beneficial interest on the Vesting Day if the income and capital of the Trust has been distributed in the meantime in exercise of the trustee’s extensive discretions under clauses 3(b), 3(c) and 6(a) of the Trust Deed or if the Trust is varied under clause 18. Moreover, such extensive powers given to the trustee, exercisable at its discretion and from time to time, deny any beneficial interest in the income or Trust Fund of the Trust because they render unstable the content of any interests in the trust estate: see Chief Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226 at [24]. The position in the present case is a fortiori because any beneficiary (which includes the [wife]) can be excluded from the class of General Beneficiaries under the proviso to clause 1 of the Trust Deed.
The decision of the High Court in Kennon v Spry (2008) 238 CLR 366 does not assist the [husband] in this case. Dr Spry was both the settlor and trustee of the relevant trust. The [wife], however, has not been a controller of the Trust and the [husband] was no more than a discretionary beneficiary (see clause 1(b)(1)(ii) of the Trust Deed) which ceased by force of the original terms of the Trust Deed when he and the [wife] divorced and he was no longer a spouse of the [wife]. Furthermore, in Kennon v Spry the trust was used to hold property for the benefit of the parties to the marriage: see at 443 paragraph [227] per Kiefel J. Also, the [husband] did not make any contributions to the assets of [Searle Pty Ltd] unlike the position of Mrs Spry: see at 442 paragraph [224] per Kiefel J.
The 1984 deed altered the Vesting Day, at which point beneficial interests in the income and the funds of the trust vest in beneficiaries under clause four of the Trust Deed. Any earlier vesting of income or the Trust Fund under the 1984 deed is incongruous.
Counsel for the husband took me to Pittman & Pittman [2010] FamCAFC 30. There are a number of significant differences in the trust referred to in Pittman and that in this case. The Pittman Trust existed for the benefit of the husband, his mother, [Mr S in Pittman & Pittman] and [Mr M in Pittman & Pittman]. The [Searle] Family Trust presently exists for the benefit of [Mr & Ms S in this case]. In the Pittman Trust the four family members were made irrevocable appointers and guardians, they became equal shareholders in the trustee company. In the [Searle] Family Trust, the wife’s parents remain sole appointors and guardians of the trust. The wife was a director of the trustee, [Searle] Pty Ltd, for some time but as a director she was always as a minority and there was evidence (which I accept) that she was not fully aware of her role in the company. The Pittman Trust was one where the husband had a level of control and expectation of his entitlement. In the [Searle] Family Trust, the wife has no control and any benefit is a mere expectancy. In the Pittman Trust there is evidence that beneficiaries were entitled to receive an ongoing entitlement under the trust. In the [Searle] Family Trust the distributions have only been made to the wife’s parents and their alter ego. In the Pittman Trust the husband had an irrevocable entitlement of not only to income but to a share of capital. I have determined that is not the case in the [Searle] Family Trust.
The Full Court of this Court in AC and Ors & VC and Anor [2013] FamCAFC 60 discussed trusts and third parties and observed at paragraph 85;
85. Whatever may be the outer limits of the powers in PartVIIIAA, we are satisfied that the Path can be used to require a trustee (including a third party trustee) to bring forward the vesting date of a trust fund for what can be termed, the ‘ancillary’ purposes of valuing and irrevocable entitlement [emphasis added] to ultimately share in the trust fund, and of distributing that share to the party entitled, and that these powers can be exercised even at the expense of third party interests ….
This comment arose in the circumstances set out in paragraph 81 of the reasons where the Full Court of this Court observed;
81.As already has been said, the trial Judge made an unchallenged finding that the husband and wife, as specified beneficiaries of a trust, each had a fixed and irrevocable entitlement [emphasis added] to a share of the trust fund upon vesting. This entitlement existed, as appeared to be common ground, because of the absence in this case of an Appointer or Guardian for the Trust.
In considering the Searle Family Trust, I am satisfied that the wife does not have a fixed and irrevocable entitlement to a share of the trust. Her parents remain as appointors and guardians under the trust deed. The trustee, with the consent of the guardian, remains empowered under the trust deed to change the vesting day, include or exclude general beneficiaries including the wife, vary as to whom the corpus may or may not vest.
This is not an irrevocable entitlement to a share of the trust fund upon vesting. The wife has a mere expectancy arising from a trust that was set up by her parents when she was about 12 years old. The beneficiaries of the trust are broad and include the children of Mr and Ms S, grandchildren, spouses of children, other trusts and companies.
In terms of the violence the wife sets out a history of violence over the whole of the marriage, of a physical, verbal and emotional nature. I accept the evidence of the wife that in 1994 she commenced attending counselling at AK Counsellors in relation to the violence (albeit unspecified) prior to that time and subsequent to that time.
There is evidence of the wife that in March 2000 the husband punched her in the face. The husband denies this assertion, but the wife’s evidence is supported by the evidence of Dr Q. Dr Q, in 2001, records the wife’s complaint and his observation of a ‘sensory loss to the right side of her face, consistent with bruising of the nerve endings’.
The following year in August 2001, the wife asserts that the husband again physically assaulted her and describes the event in detail. The wife’s version is consistent with the examination by Dr Q in August 2001 and his observations of swelling and bruising to the left side of her face. There was visible bruising to the left arm and left thigh. The husband denied this assault. I am satisfied that this assault occurred as asserted by the wife.
The wife says that she recalls another incident in 2005 and sets out in detail the events[58]. The wife describes a particularly violent incident and provided photographs of her bruising. The wife attended at the rooms of Dr R who observed that her injuries were consistent with the complaints and noted injuries to her right forearms, carpet burns to both knees and a report of a painful left hip. Dr R noted that the wife had complained of a similar event five years previously. The wife describes other incidents in October 2008 and November 2008.
[58] Paragraph 31(d) wife’s affidavit, filed 15 June 2012.
The husband took issue with these, however I prefer the evidence of the wife as her evidence is credible and generally consistent.
There is no issue that in November 2008 the husband came home and found C watching a DVD of a friend’s child being christened. The husband was in dispute with or angry with one or both of the parents of the child being christened. The mother was the god mother of that child and a friend of that child’s mother. The husband became enraged that C was watching that DVD of the christening and he removed the DVD out of the player, threw it on the floor and shattered it. This incident is not in issue and I am satisfied that it is indicative of the husband’s violent and abusive behaviour which the wife and the children endured during the course of the relationship.
Without going through the various complaints made by the wife at paragraph 31 of her trial affidavit and paragraphs 18 to 33 of her affidavit sworn 8 December 2008, I generally accept her evidence as being credible and consistent having regard to the other evidence.
The husband asserted that his action was in defence. I do not believe him having regard to other comments I have made about his evidence elsewhere in these reasons. The husband is not a credible witness. He is an angry person.
The wife gave evidence of the meeting with the psychologist Mr P, in July 2009. Both the wife and to a greater degree Mr P, described the husband as ‘losing control’ and yelling abuse at his daughter (C) and the wife. From the evidence of Mr P and the wife, it is clear that the husband could not be contained and he had little appreciation of the effect that his behaviour was having on the child and the wife.
Abusive and violent behaviour is normally hidden from those outside the family. The wife asserts that the husband was physically and verbally abusive to her and the children throughout the marriage. She describes many instances of physical abuse and the husband losing control and berating her. In his evidence, the husband denies that he has ever assaulted the wife or the children. He said he did not become violent, but that he becomes angry rather than abusive. The husband said he believed that the wife has alienated the children from him.
I have accepted the evidence of Mr P. He is an objective and impartial witness who observed the husband completely lose control and verbally attack and abuse the wife and C. The husband was incredibly angry and the situation required strong intervention on the part of Mr P, but even that did not deflect the husband. He continued unabated and I accept the evidence of Mr P that once the husband lost his temper there was ‘no way he could refrain from doing so’ [verbally attacking; blaming the wife and C].
I find the husband’s evidence, that both the wife and Mr P’s accounts of the meeting were not accurate, was untruthful.
The wife asserts that at a meeting with Mr P (a psychologist who was to provide therapeutic treatment for the child K) that she and C were the subject of aggressive and abusive behaviour by the husband. I have set out earlier in these reasons the wife’s evidence in relation to that event.
Mr P said in relation to that event in his affidavit[59]
My recollection of what occurred was that [C] and [the wife] were in my office and that [K] was outside. Whilst I do not recall the specific nature of the discussions, I do recall that [C] became extremely distressed in response to the [the husband’s] angry discussion with her, and that [the wife] tried to comfort her. [The husband] became extremely angry in response, and in response to [C’s] protest and was furious, yelling abuse at his daughter and his ex-wife. In my opinion, lost control and entered in to a tirade causing [C] and [the wife] enormous distress. I tried to intervene, to stop him but he could not curtail his behaviour in the face of [C’s] increasing distress. By this stage she was hysterical. My recollection was that he [the husband] was extremely loud, blaming, pointing his finger and acting in an aggressive and intimidating manner, and that I repeatedly told him to stop yelling, and it was causing to [C] enormous distress. My recollection was that [the wife] was also extremely disturbed as she and [C] huddled together. I demanded that he stop his verbal attack, and I ended the session. He seemed unable to appreciate the effect that his behaviour was having upon both [C] and [the wife]. In my notes I described this as an appalling session, that it was extremely abusive and damaging …
[59] Affidavit of Mr P, filed 27 November 2012.
The husband, in his evidence, attempted to minimise the seriousness of this event. However, I am satisfied that it was as described by the wife and Mr P.
The husband engaged in intimidating and abusive behaviour and such was the force of his anger that the child and the wife were intimidated, fearful and distressed.
In her trial affidavit filed 15 June 2012 from paragraphs 31 through to 54, the wife describes violent, abusive and intimidating behaviour on the part of the husband, directed towards her and the children. I generally accept the wife’s evidence that she was subjected to abuse, intimidation and bullying throughout the marriage. I accept that in 1994 the wife commenced counselling to assist with the impact of that violence upon her. I accept her evidence that around March 2000 the husband punched the wife in the face and she suffered injury to her face.
The wife gives evidence as to a violent event in the kitchen of the matrimonial home in August 2001. She was cross-examined in respect of that event which included the husband choking her, pinning her to the ground and screaming at her whilst she was defenceless. I accept her recollections of those events.
The wife described events in April 2005 where she was shoved and pulled along the ground by the husband and she suffered carpet burns as a result. She was intimidated by him to put his clothes back in the cupboard.
The wife sets out a series of other events in October and November 2008 culminating in the events on 1 December, or late November 2008. Some of her evidence in relation to these events was supported by evidence of others such as Dr Q in relation to the alleged assaults in March 2000 and August 2001 and the evidence of Dr R in her observations of injuries in April 2005.
Subsequent to separation there was an incident on 16 May 2009 which the wife describes in paragraphs 32 through to 54 of her trial affidavit, filed 15 June 2012. It must be observed that at that time C was aged fifteen and a half. I accept that the husband entered the property and verbally abused the child in demeaning tones. The husband’s anger and persistence continued and the police, inevitably, became involved. An interim order was made restraining the husband from committing violence on C or contacting her. Orders were then made in the Family Court by Senior Registrar Fitzgibbon and the intervention order was not pursued.
The wife asserts that the husband used demeaning and belittling words towards her. I accept her evidence in that regard.
The husband asserted in cross-examination that the wife precipitated the violence through violence of her own or through her ‘mood swings’. I do not accept the husband’s evidence to that end. The husband was a controlling and determined person who exercised authority through violence, yelling, intimidation and threats. This behaviour had a significant impact on the family during the marriage.
C made a statement to the police on 16 May 2009 (the day of the event). In that statement[60] C informed the police that she was terrified of the husband and that he [the husband] used to hit [the wife] in the past and was violent to her and her sister. She remembered that the husband had strangled the wife in front of her and her sister. C said in her statement ‘I feel ill about the Court making me go [to see the husband]’.
[60] Exhibit W5, pages 107 to 110.
That statement is consistent with all accounts of what happened in May 2009.
C then gave a detailed description of what occurred when the husband entered the home and demanded that C come with him. She had told the husband that she did not want to go.
The husband’s evidence that he was not physically and emotionally abusive to the wife and children throughout the marriage was, again, not credible.
The husband endeavoured to control the wife. The wife gives examples of his controlling behaviour in her affidavit material. A further example of this behaviour is in relation to the wife’s car after separation. Both parties had possession of a car but the husband declined to transfer the wife’s car to her. The wife paid some of the lease payments and paid the balloon payment at the end of the lease period. The wife sought that the husband returns the key to her car. I accept the wife’s evidence that the husband had attempted to and was successful in accessing her car. The husband conceded before Cronin J that he had tested the key against the car. The wife took steps to preserve the car for herself and arranged for a car dealer (who had serviced the car) to render the husband’s key useless. The car dealer did so.
The husband, in evidence before me, asserted that he did not try to open the car but in evidence before Cronin J said he did try to open the car using the key. This is an example of the husband’s unreliable evidence.
The husband then took proceedings through the Victorian Civil and Administrative Tribunal to have the key to the car restored. He did not notify the Tribunal that the car was operated by his former wife and that they were in the midst of litigation in the Family Court. He said, disingenuously, that he was only trying to preserve the value of the car. He was not. He was trying to gain access to the car and let the wife know that he could still control her.
The wife was joined in those proceedings and arranged for her solicitors to write to the husband and request that he discontinue the proceedings. He did not do so. The wife was then put through the trouble of filing material in reply and the husband’s application against the car dealer was dismissed.
The husband asserted to me that the reason he wanted the key was for the value of the car and that he had been told that the old key was useless. That was different from the finding in Victorian Civil and Administrative Tribunal.
This was simply an example of the husband attempting to control the wife. There is no reason why the car could not have been transferred to the wife and there was no need for him to make registration of the car difficult each year.
The wife has given evidence of an event in May 2009 when C (then aged 15, almost 16) declined to spend time with the husband, in accordance with the parenting orders. The husband’s response was violent, abusive and controlling. I accept the evidence of the wife; the version propounded by the husband is inherently unlikely and his evidence in that regard was unreliable. The wife was cross-examined, over some period of time, in relation to her alleged part in instigating and promoting the conflict.
In cross-examination the wife answered carefully and frankly. Her demeanour was such that taken in context with other objective material (such as the evidence of the injuries and reports to legal practitioners), she presented as a credible witness. From time to time she made omissions against interests such as engaging in a loud argument with the husband at the time of separation.
As such, I am satisfied that the wife was the subject of significant verbal abuse and intimidation throughout the marriage and, from time to time, physical abuse. These factors impacted on the wife in terms of her ability to parent and made that task much harder. It caused her to adopt stricter discipline and boundaries in respect of the children, to protect them from the husband. As a result she was anxious and depressed from time to time.
I accept the wife’s evidence in regard to the violent and controlling behaviour of the husband.
Counsel for the wife submitted that I ought to consider the violent conduct of the husband both during and after cohabitation. I have considered the husband’s violent behaviour throughout both of those periods.
Over the period from marriage until 1 December 2008, I find that the husband’s violence made the wife’s contributions significantly more arduous than they ought to have been, and I have taken this into account when assessing the parties' respective contributions within s 79 of the Act. A five percent allowance is that which I have determined appropriate. The violence endured by the wife and the children was, in this case, exceptional and falls within that narrow band of cases to which the Full Court of this Court referred in Kennon. It had a discernable impact upon the wife.
Counsel for the wife said that the husband’s behaviour subsequent to 1 December 2008 should also fall into that category. I accept that the husband engaged in controlling behaviour after separation and was violent to both C and the mother as described above. However, whilst I find that behaviour occurred as described, I am not convinced that it falls into the category of an exceptional case as the principle requires, in regards to contributions post separation.
The wife claims that her post separation contributions are overwhelmingly in her favour.
In that respect, the wife was the primary carer of the children either primarily or solely since December 2008. The husband has provided no direct financial support for the children over that period of time. Counsel for the wife submitted that;
44…In the current property proceeding he seeks to have the amount of cash retained by the Wife ($165,000) added into the asset pool. On that basis of course that amount cannot be seen as making any provision for the support of the children. When the Husband gave evidence before Justice Cronin he sought to take credit for having made provision for the children out of those moneys retained by the Wife.
Perversely, the husband endeavoured to claw back some of the Family Tax Benefit which had been paid to the wife.
The wife has had the occupation of the former matrimonial home since January 2009 to the exclusion of the husband; that is a contribution by him. The wife and the children have lived in this home over that period of time. Counsel for the wife submitted that the husband has ‘otherwise behaved towards the Wife in an oppressive and controlling manner’. Counsel for the wife set out examples such as the dispute regarding the Mercedes used by the wife, and associated Victorian Civil and Administrative Tribunal proceedings. This was a Kennon type claim, which I have already dealt with.
The wife asks for a five percent allowance for her contributions made during the post separation period. Counsel for the wife noted that the wife paid off the debt in respect of her car and yet the debt for the husband’s car remains constant.
Having considered all of those factors, in particular the wife’s care of the children, absent support from the husband, I am satisfied that there should be a further adjustment of two percent. This makes the overall assessment of contribution as to fifty nine per cent in favour of the wife and forty one per cent in favour of the husband, which in all of the circumstances, I am satisfied is just and equitable.
OTHER FACTORS INCLUDING THE SECTION 75(2) FACTORS
The wife seeks no adjustment in respect of the s 75(2) factors. She claims, and I accept, that she is employed as a healthcare professional and receives sufficient income to support herself and the children. She says that she is stressed and anxious and that she has not re-partnered. She has the care of the two children of the marriage, both of whom are engaged in study and one of whom is over the age of eighteen years.
The husband is aged 47 and asserts that he is in poor health and is unable to engage in paid employment. There is no evidence of him being in gainful employment since February 2009, although he conducted a successful business for about nineteen years prior to that time.
The husband is currently in receipt of a disability pension and has been in receipt of such pension since about February 2012. I have had regard to the husband’s receipt of that pension. Prior to that time he was in receipt of benefits from Victorian Transport Accident Commission arising out of his February 2009 motor vehicle accident.
The only evidence he has adduced with respect to his health was a medical report for a disability support pension[61]. In that report his General Medical Practitioner report diagnosed:
a)a right shoulder disruption. The current treatment was prescribed as Endone/Panadeine Forte.
b)a whip lash injury to the neck which produced neck pain and headaches. The treatment for this injury seemed similar to the shoulder, which is Endone and Panadine Forte. The report described ‘poor cognition’ as one of the impacts on function. The doctor reported that the husband had been his patient since 1995 and the report was dated 2012 but the precise date is not clear although it would have been prior to June 2012.
[61] Exhibit W10.
In his trial affidavit the husband asserts that he:
Suffered some quite significant injuries… and [have had] an operation to reconstruct my shoulder…
He annexed a copy of the document that was exhibit W10 to his affidavit. He said that his claim with the Transport Accident Commission was rejected in late 2011 and that he has issued proceedings in the County Court of Victoria to review the refusal. He said that he has been unable to obtain an assessment of the likely outcomes should his claim be successful. He provided no objective evidence as to the possible outcome of that litigation.
The husband produced no other medical evidence with respect to his injuries nor has he provided adequate material detailing the symptoms and how they would limit or preclude him from paid employment. There is no evidence from specialist medical practitioners in respect of the injuries. It was open for the husband to adduce further and more detailed medical evidence, even from his treating practitioner. It would be surprising, to say the least, that in a claim such as is being prosecuted in the Victorian County Court by the husband, that he does not have treating medical experts (including those who undertook the husband's shoulder surgery) and forensic experts, all of whom would have provided reports. No such reports were made available in these proceedings. I can only conclude that any such reports would not assist the husband to support his assertions in this Court that he is unable to work. Having regard to the criticism I have made about the reliability of the husband’s evidence, I do not accept that he is injured to the extent that he asserts.
I am satisfied that the husband is able to work on a full time basis but chooses not to do so.
There is no evidence that either party intends to retrain (this accords with the husband’s submissions in his case outline) and the husband seeks no spousal maintenance from the wife.
The husband, in his case outline, submitted that the marriage was a long marriage and that there is no evidence that the earning capacity of either party has been altered by it. I accept that submission.
The wife will continue her role as sole carer of the younger child; her role will not be affected by this determination.
The other issue raised by the husband’s counsel in final submissions was the question of an adjustment in his favour, a consequence of the wife having a financial resource arising out of the trust. I have already held that the trust is not included in the pool of property. The trust is such, that if both of the wife’s parents passed away under the current iteration of the trust, there is likely to be a vesting. However, the guardians of the trust are still in place and as such the vesting date can be changed, the general beneficiaries (including the wife) can be excluded, the corpus can be increased or diminished. There is no essential difference between this trust (as it now stands) and having parents with assets who are of full legal capacity. The wife’s interest in the trust is a mere expectancy and a proportion of the corpus of the trust may, or may not pass to the wife. It was submitted to me that the trust would need to be valued and the husband ought to receive five per cent. The precise nature of what the five per cent related to was not specified. In the context of the s75(5) factors it could not relate to treatment of the corpus of the trust as property and could only have related to the parties’ property.
I have not treated the corpus of the trust as a financial resource as it is similar to an anticipated inheritance from a family member who retains legal capacity, it is a mere expectancy. However, the wife’s parents have, from time to time, assisted their children (including the wife) with small loans from the trust. This is not an unusual scenario in many families. The particular loans made to the wife and her siblings over the last 10 years[62] were relatively minor. It is likely that the assistance provided by the wife’s parents to fund the building of the matrimonial home had been provided through the trust, in whole or part. The advances made to the wife by the trust from 2000 to 2011 are not great and having regard to the jurisprudence set out in the Full Court of this Court in Essex & Essex [2009] FAMCA FC 236 which dealt with anticipatory income or benefit from a trust it is a factor I should consider. In Essex, the trust to which the husband was particularly interested enabled payment of income to him (subject to his mother’s entitlements – she being alive at the relevant time) although no payments (other than one small amount) had been paid to the husband. The reasoning in Essex was by the majority and a dissenting judgment was delivered by Faulks DCJ, who was troubled by the majority approach. This decision has also been the subject of some comment by learned authors[63], but I am bound by the majority Full Court authority.
[62] Exhibit H11.
[63] Stephen Bourke, ‘Estate Planning for Blended Families’ pages 199-200 (Paper presented at the 14th National Family Law Conference, Canberra, 2010) Television Education, 2010.
As such, in the circumstances where the wife received small amounts from the Searle Family Trust and this being a financial resource, I have determined that there ought to be an adjustment. Having regard to the advances to the wife from the trust, from time to time, I have determined that an adjustment of two per cent in favour of the husband is appropriate. This will amount to an overall four (4) per cent difference.
JUST and EQUITABLE
The outcome is that the property is to be divided as to fifty seven per cent to the wife and forty three per cent to the husband.
The wife will retain the former matrimonial home, her jewellery, her chattels and the 2006 Mercedes motor vehicle with have a combined value of $1,497,655.
The husband will retain the money in Greece, his watches, his chattels, the funds from the I Pty Ltd Commonwealth Bank term deposit, the VV Limited shares and his Mercedes motor vehicle. The husband will be liable for the F Pty Ltd loan of $63,500, leaving a net amount in the husband’s hands of $521,529.
The total net property is;
Wife’s net property
$ 1,497,655.00
Husband’s net property
$ 521,529.00
Total
$ 2,019,184.00
This makes a total available pool of property (excluding superannuation which I have dealt with elsewhere) of $2,019,184.
Therefore to provide for an adjustment of property on the basis of fifty seven per cent to the wife and forty three per cent to the husband, the wife would need to pay the husband the sum of $346,720. The husband’s share of the property would therefore amount to $868,249 and the wife’s share of the property would amount to $1,150,935. The calculations would then be as follows.
Property of the wife or to be retained by the wife;
Former matrimonial home at Suburb L (Wife) – value determined
$1,450,000.00
Wife’s jewellery - evidence of Ms T – property of wife
$22,175.00
Wife’s chattels – evidence of Mr Y
$2,480.00
2006 Mercedes motor vehicle
$ 23,000.00Amount payable to husband
($346,720.00)
Total
$1,150,935.00
The property of the husband or to be retained by husband.
Money in Greece
$295,000.00
Husband’s watches - evidence of Mr U – property of husband
$3,700.00
Husband’s chattels – evidence of Mr Y
$1,900.00
Commonwealth Bank Term Deposit (I Pty Ltd) (Husband) – determined
$243,779.00
VV Ltd Shares (Husband) number of shares held – 32,600 as at January 2009
$ 650.002007 Mercedes motor vehicle
$40,000.00
Amount payable by the wife
$346,720.00
F Pty Ltd loan for husband’s car
($63,500.00)
Total
$868,249.00
I am satisfied that, in all the circumstances, this is just and equitable.
APPLICATION IN A CASE
The wife sought an order that any money she was to pay to the husband was to be reduced by a sum of about $127,000, being the costs assessed pursuant to the indemnity costs order made by Cronin J in 2012. There was no evidence before me as to the quantum or status of those costs. The wife is worried that if she pays money to the husband and then seeks her costs to be paid, it is possible that no money will be available. The wife’s case was that the husband has disposed of or failed to acknowledge the $165,000 in cash from the safe, the I Pty Ltd funds of $346,720 and the $295,000 in Greece. He has spent about $348,433 in legal costs[64] (subject to a sum of $17,400 which cannot be verified).
[64] Exhibit W12.
As that issue has not been resolved and is mechanical in nature, I will give the wife leave to file an application in a case to endeavour to secure a sum to meet her likely costs order. Such application must be made within twenty eight days of the date of the orders and must be supported by an affidavit.
I certify that the preceding three hundred and fifty eight (358) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 28 May 2013.
Associate:
Date: 28 May 2013.
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