Sikorski & Sikorski

Case [2007] FamCA 487

FAMILY COURT OF AUSTRALIA

SIKORSKI & SIKORSKI [2007] FamCA 487
FAMILY LAW - PROPERTY SETTLEMENT - Parties previously executed informal “Final Separation Agreement”- Property divided approximately equally - Husband expended funds he received in settlement - Unidentified amount spent by husband on gambling and prostitution - Husband claims agreement not what purports to be - Seeks 65% of assets retained by wife and parties’ daughter - Consideration of intention of parties as reflected in agreement - Whether property transferred to the parties’ daughter is held on resulting trust or whether presumption of advancement applies - Whether husband’s parents held an interest in a property sold by husband - Notional adding back of assets to asset pool - Outcome proposed by husband unjust, inequitable and unconscionable - Equal division of asset pool appropriate
Family Law Act 1975 (Cth)ss 79(4), 75(2) & 79(2)

Baumgartner v Baumgartner (1987) 164 CLR 137
Calverley v Green (1984) 155 CLR 242
Charles Marshall Pty Ltd v Grimsley (1965) 95 CLR 353
Crampton and Crampton (2006) FLC 93-269
De Angelis and De Angelis (2003) FLC 93-133
Jones v Dunkel (1959) 101 CLR 298
Muschinski v Dodds (1985) 160 CLR 583
Nelson v Nelson (1995) 184 CLR 538
Omacini and Omacini (2005) FLC 93-218
GWR & VAR [2006] FamCA 894
Z v Z [2005] FamCA 996

APPLICANT: MR SIKORSKI
RESPONDENT: MRS SIKORSKI
FILE NUMBER: ADF 1910 of 2004
DATE DELIVERED: 5 April 2007
PLACE DELIVERED: Adelaide
JUDGMENT OF: BURR J
HEARING DATE: 14, 15, 16, 19, 20, 21 February 2007 & 8 March 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR DAVID HAINES QC
SOLICITOR FOR THE APPLICANT: DI MOROSINI & CO
COUNSEL FOR THE RESPONDENT: MR ROSS RICHARDS
SOLICITOR FOR THE RESPONDENT: CLELANDS LAWYERS

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the Judgment of the Court delivered this day will for all publication and reporting purposes be Referred to as Sikorski & Sikorski

orders

  1. That all previous Orders of this Court be and the same are hereby discharged.

  2. That the Court declares that the parties’ daughter R is the sole legal and beneficial owner of the property at S.

  3. That in full settlement of any claim that either party may have against the other by way of property settlement or variation of settlement of property:-

    (a)The husband’s estate and interest (if any) both at law and in equity in the following be and the same are hereby vested in the wife:-

    (i)The wife’s personal effects, clothing, jewellery and furniture;

    (ii)The property at W1;

    (iii)The net proceeds of sale of the property at D;

    (iv)The net proceeds of sale of the property at L;

    (v)The wife’s savings and investments;

    (vi)The wife’s motor vehicle.

    (b)The wife’s estate and interest (if any) both at law and in equity in the following be and the same are hereby vested in the husband:-

    (i)The husband’s personal effects, clothing , jewellery and furniture;

    (ii)The net proceeds of sale of the property at G1;

    (iii)The net proceeds of sale of the…

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AGLC
Sikorski & Sikorski [2007] FamCA 487
Case
[2007] FamCA 487
Decision Date

CaseChat Overview and Summary

This matter came before Burr J in the Federal Circuit Court of Australia concerning competing applications for property settlement between a husband and wife. The parties, aged 58 and 47 respectively, were married in April 1988 and disputed the exact date of their separation, which occurred between late 2002 and late 2004, following a marriage of 14 to 16 years. The dispute involved numerous real estate transactions undertaken during the marriage, the ownership of certain properties, and the disposal of significant funds by both parties.

The court was required to determine several preliminary issues before addressing the overall property division. These included the precise date of separation, whether a property in Se was owned by the parties' daughter or held in trust for them, the existence and division of cash amounts, the beneficial interest of the husband's parents in two units at G, and the disposition of proceeds from divided properties by both parties. The court also had to consider whether to notionally add back various amounts to the asset pool for distribution. A central issue was the validity and effect of an informal "Final Separation Agreement" executed by the parties in October 2003, which a solicitor had advised was not binding.

Burr J found that the husband's evidence was often unsatisfactory and, in at least one instance, amounted to perjury, particularly concerning the date of separation. The court preferred the wife's evidence where there was conflict. The total asset pool for distribution was valued at $1,738,000. The court determined that an equal division was appropriate, resulting in each party receiving assets valued at $869,000. The husband had retained assets totalling $863,000, meaning a payment of $6,000 was due from the wife to the husband. The court rejected the husband's application for a significantly larger share of the remaining assets, deeming his proposal unjust and inequitable, particularly given his wasteful expenditure of his share of the property after the informal settlement. The court noted that the wife would be left with a greater amount of assets due to the husband's unilateral divestment of his share.

Orders

Orders of the court

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Background

Background to the litigation

The competing applications for my determination are as to property settlement. That bland statement somewhat belies the interesting and complex issues for my determination. Background The husband and the wife are respectively 58 years of age and 47 years of age. They were married on … April 1988. They are unable to agree whether or not they separated in late 2002, late 2003 or late 2004. In any event, it was a long marriage of some 14 – 16 years. The husband had been previously married. He has two daughters, N and P, from that marriage but neither child lived with the parties to these proceedings during their marriage. At marriage the husband owned a house property at O for which he had paid $92,500.00 in June 1986. Shortly after marriage the wife discharged the husband’s mortgage on that property to the extent of approximately $20,000.00. At marriage the husband also had a car and some tools. The wife had the $20,000.00 which she used to discharge the mortgage on the husband’s O property. Thereafter, the parties engaged in a significant number of real estate transactions. They purchased shop, house and rental properties at :-·H1;·H2;·B;·W2 (including the business operated on that property);·W1;·2 units at G;·S;·D; and·C.Various of those properties were sold to fund the purchase of others. In 1989 the husband obtained employment with an engineering company in a central Victorian city at the end of which he received a termination payment of $5,800.00. The parties then returned to reside in South Australia. On … February 1990 their daughter R (“[R]”) was born. Thus R is now 17 years of age. In 1991 the husband secured work for a further three months with another engineering company. The husband alleges that he purchased the two units at G jointly with his parents, in that they contributed one-half of the purchase price. The wife disputes this. The wife alleges that the parties separated on 1 October 2002. An Application for Divorce was prepared by the husband, signed by both parties on 14 October 2003 and filed in the Federal Magistrates Court on 16 October 2003, using the separation date alleged by the wife. A Decree Nisi for dissolution of marriage was granted on 2 December 2003. That Decree became Absolute on 3 January 2004. For his part, the husband contends that the application for Divorce did not reflect the true situation. He alleges that the application was prepared during turbulent times in their marriage and that it was not intended to proceed with the application. He contends that the parties remained married in all senses of the word until just before he instituted proceedings for property settlement in this Court on 9 December 2004. On 14 October 2003 the parties executed an informal “Final Separation Agreement” (annexure “PK12” to the husband’s affidavit filed on 7 April 2006). It was a document which had been prepared by a solicitor, Mr Alan Carey who advised them it was not a binding document. On that day Mr Carey also witnessed their Application for Divorce. The wife contends that the informal agreement accurately reflects a settlement they had agreed between themselves earlier in 2003. The husband says that the document is not what it purports to be. He contends that the transfer of properties and informal agreement was simply part of a process to minimise land tax.

Evidence

Evidence Before The Court

The husband then issued proceedings for use and occupation of the property at W1. That application was granted and an order was made on 9 June 2005. The husband has remained living there since. The evidence Each of the parties relied upon identified affidavits filed by them. In the husband’s case he also relied upon the affidavit of psychologist Mr L filed on 18 April 2006. Each of the parties also gave oral evidence in support of their applications. Issues of credit loom large in these proceedings, given the wide number of issues in respect of which the parties are in disagreement. I will in my Reasons identify specific areas where credit was significant. However, overall, where the parties’ evidence was in conflict, I prefer the evidence of the wife. The husband’s evidence was extremely unsatisfactory on many occasions on a wide range of issues. In fact, in at least one instance the husband acknowledged perjuring himself before this Court.Issues Apart from the overall question of what is an appropriate division of property between the parties, there are a number of preliminary issues requiring my determination and they are:-29.1.The parties’ date of separation.29.2.Whether the Se property is owned by R or held in trust by her for the parties.29.3.Whether there were cash amounts taken by the wife or divided between the parties.29.4.Whether the husband’s parents had an interest in the G units.29.5.How the husband disposed of his share of proceeds of divided properties.29.6.How the wife disposed of her share of proceeds of divided properties.29.7.Whether or not it is appropriate to notionally add back various amounts to the asset pool. Assets and liabilities Those discreet issues need to be resolved in order to be able to identify the relevant net asset pool for distribution between the parties and how it should be distributed. Both parties agree that the relevant date for valuation of the asset pool is the date of trial. Whilst there are very few of the assets of the parties left, it is the wife’s contention that I should notionally add back all of the proceeds of sale received by her and by the husband after the informal property settlement agreed between them. It is the husband’s case that, as he expended those funds on supporting the wife, R and the wife’s properties, he is entitled to a share of what she now retains. He has nothing left. He admits that he has expended some hundreds of thousands of dollars since the parties’ informal property settlement. Given the dispute between the parties it is important to establish when the parties separated and whether they effected an informal property settlement between them at around that time or subsequent thereto. On the topic of the separation date, the husband has perjured himself. In the Application for Divorce (a copy of which is Exhibit 9) the husband swore on oath that the date of separation was 1 October 2002 (paragraph 11). He swore that at that time he regarded the marriage as over (paragraph 12(a)). He then nominated a date of 20 October 2000 as the date upon which he regarded the marriage as over (paragraph 12(b)). In paragraph 14(a) he swore that the parties had not lived together as husband and wife since the date of separation nominated. He further indicated, in paragraph 15, that he did not consider it likely that there would be a reconciliation.

Decision

Reasons for decision

No additional relevant matters emerge upon consideration of these sub-sections. Conclusion on Section 75(2) factors In my view, the factors are balanced and do not indicate that any further adjustment ought to be made in favour of one party or the other. Neither is employed although each has acquired some new qualifications which could lead to employment. Each has other skills which they could use in the pursuit of gainful employment. The wife will be left with a greater amount in assets thanks to the husband’s unilateral actions in divesting himself of all of his. The husband though still has access to considerable funds which he has given to his parents. The wife has ongoing commitments in relation to R’s care and has done so with effectively no financial support from the husband since the separation of the parties. The total asset pool for distribution between the parties is valued at $1,738,000 (paragraph 122). An equal division, as found by me to be appropriate, would result in the parties each receiving assets to the value of $869,000. The value of the assets received by the husband totals $863,000 and thus there is a payment due by the wife to the husband of $6,000.Just and equitable It remains for me to consider whether or not my determination represents a just and equitable outcome in these proceedings (Section 79(2)). Stripped to its barest, the husband’s case before the Court is essentially that:-148.1I should ignore the informal settlement reached between them in mid-2003 after their separation in October 2002.148.2I should ignore the fact that he received an approximate equal division of the parties’ net property pool at that time.148.3I should ignore the fact that he expended the totality of his funds in various ways, some explained, including an amount spent on gambling and prostitutes, and some unexplained.148.4I should ignore the fact that the wife retained most of her share of the assets received in mid-2003.148.5I should take back the S property from his daughter R in order to pay for his excesses. It is difficult to contemplate a more unjust or more inequitable outcome than that proposed by the husband. To accede to the husband’s application would be to reward him for four years of extravagant and wasteful behaviour. It is the husband’s view that he should receive 65% of the assets retained and accumulated by the wife and R as a just settlement of his claim. His application is preposterous. In monetary terms, the husband’s claim can be summarised as follows:-150.1W1 property (registered in the wife’s name) $490,000.00150.2Accumulated savings of the wife represented in largepart by the proceeds of sale of L and D properties $102,000.00150.3R’s S property $270,000.00Total $862,000.00If the husband was to receive 65% of that figure, he would receive additional assets to the value of $560,300. He asks the Court to transfer the W1 property to him requiring the wife then to pay him an amount of $70,300 to make up the balance. If that is added to the totality of the assets retained by him since the mid-2003 informal settlement (being an amount of $863,000 – paragraph 118), he would receive in total $1,423,300. If the additional sum sought by the husband of $560,300 is deducted from the property retained by the wife after the mid-2003 informal settlement and subsequent investment made by her, she would be left with $314,800. Another consequence of the husband’s application is that the wife would lose to him the W1 property and with it her only present source of income.

Ratio Decidendi

Legal Principle Established

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