Skourta & Skourta & Ors
[2018] FamCA 897
•7 November 2018
FAMILY COURT OF AUSTRALIA
| SKOURTA & SKOURTA AND ORS | [2018] FamCA 897 |
| FAMILY LAW – PROPERTY SETTLEMENT – Contribution – Whether the property that the husband and wife lived in as the matrimonial home was a gift of the whole property or a gift of occupation by the husband’s parents – Where the husband and wife resided in the property for 24 years – Where the husband and wife made improvements and alterations to the property – Whether the property represented a third party contribution made for the husband by the parents. FAMILY LAW – PROPERTY SETTLEMENT – Whether to adjust the property of the parties pursuant to section 79 Family Law Act 1975 (Cth) – Stanford v Stanford (2012) 2247 CLR 108 considered. |
| Family Law Act 1975 (Cth) ss 75(2), 79 Real Property Act 1886 (SA) s 69 |
| Baumgartner v Baumgartner (1987) 164 CLR 137 John Dyson Heydon and Mark James Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016). |
| APPLICANT: | Ms Skourta |
| 1st RESPONDENT: | Mr Skourta |
2nd RESPONDENT: 3rd RESPONDENT: | Mr Skourta Snr Ms Skourta Snr |
| FILE NUMBER: | ADC | 3067 | of | 2016 |
| DATE DELIVERED: | 7 November 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 3 - 6 September 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Dickson |
| SOLICITOR FOR THE APPLICANT: | Marie Taylor Lawyers |
| COUNSEL FOR THE 1ST RESPONDENT: | Ms Lewis |
| SOLICITOR FOR THE 1ST RESPONDENT: | Mellor Olsson |
| COUNSEL FOR THE 2ND RESPONDENT: | Ms Pyke QC |
| SOLICITOR FOR THE 2ND RESPONDENT: | Tindall Gask Bentley |
| COUNSEL FOR THE 3RD RESPONDENT: | Ms Pyke QC |
| SOLICITOR FOR THE 3RD RESPONDENT: | Tindall Gask Bentley |
Orders
That there be a declaration that the second and third respondents hold an interest in the land comprised and described in C/T …/…7 situate at C Street, Suburb E, South Australia (“the Suburb E property”) for the husband and wife quantified in the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000).
That the chose in action of the husband against the second and third respondents is assigned to the wife.
That in full and final settlement of all claims for alteration of property pursuant to Part VIII of the Family Law Act 1975 (Cth) (as amended):-
(a)Within sixty (60) days of the date of this order the second and third respondents do cause to be paid to the trust account Marie Taylor Lawyers for and on behalf of the wife the sum of TWO HUNDRED AND SIX THOUSAND THREE HUNDRED AND EIGHTY ONE DOLLARS ($206,381);
(b)That the wife shall indemnify the husband and keep him indemnified in respect of the D Bank personal loan and her NAB Visa credit card liability;
(c)That the wife shall retain for her sole use free of any claim by the husband the following:-
(i)Her superannuation entitlements;
(ii)Her furniture and household goods in her possession;
(iii)Her jewellery;
(iv)Any motor vehicle registered in her name; and
(v)Her personal effects.
(d)That the husband shall retain for his sole use free of any claim by the wife the following:-
(i)His superannuation entitlements;
(ii)His jewellery;
(iii)Any motor vehicle registered in his name; and
(iv)His personal effects.
(e)That the wife will do all things necessary to transfer to the husband any interest she may hold in Motor vehicle 1 PROVIDED that the wife shall have no further liability in respect of the H Bank personal loan and in default of the husband being able to obtain a release for the wife THEN Motor vehicle 1 shall be forthwith placed on the market for sale with the net proceeds to be retained by the husband.
Should the second and third respondents default in the payment to the wife (for and on behalf of the parties) the settlement sum of TWO HUNDRED AND SIX THOUSAND THREE HUNDRED AND EIGHTY ONE DOLLARS ($206,381) THEN the Suburb E property shall forthwith be placed on the market for sale by public auction or private treaty upon the following terms and conditions:-
(a)With such real estate agent as is agreed between the parties and failing agreement as may be nominated by the wife;
(b)That the list price or sale price of the property shall be not less than FIVE HUNDRED AND TEN THOUSAND DOLLARS ($510,000);
(c)That the parties are to co-operate in every way with the appointed real estate agent in relation to the marketing of the Suburb E property and shall make the keys readily available, allow inspection of property as may be required and ensure that the property is clean, neat and in good order at the time of inspection by any buyer.
(d)That the proceeds of sale of the Suburb E property shall be paid in the following manner and priority:-
(i)Any outstanding rates, taxes, levies owing to the property;
(ii)Payment of the agent’s commission and other sale costs;
(iii)Such sum as is outstanding to the wife including default for penalty interest pursuant to the Family Law Regulations 2004 (Cth);
(iv)The balance of any funds remaining to the second and third respondents.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Skourta & Skourta and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 3067 of 2016
| Ms Skourta |
Applicant
And
| Mr Skourta |
Respondent
And
Mr Skourta Snr and Ms Skourta Snr
2nd & 3rd Respondents
REASONS FOR JUDGMENT
INTRODUCTION
1.Ms Skourta (“the wife”) married Mr Skourta (“the husband”) in late 1994. They separated on 22 June 2016 after 22 years of cohabitation. There are two children of the relationship namely X born in 2002 and Y born in 2005 (“the children”).
2.Mr Skourta Snr and Ms Skourta Snr are the husband’s parents and the second and third respondents to the proceedings.
3.By her Further Amended Initiating Application filed 25 May 2018, the wife seeks a declaration that the second and third respondents hold their interest in property situate at C Street, Suburb E, South Australia (“the Suburb E property”) on trust for the husband and/or the wife.
4.In the alternative, the wife seeks a declaration that she and the husband are the legal owners of the Suburb E property.
5.Consequent upon a determination that the husband’s parents hold the Suburb E property on trust for the parties, or that they hold the legal interest in the property, then by way of property settlement and division the second and third respondents shall transfer the Suburb E property to the wife contemporaneously with her payment to the husband of $210,000.
6.Thereafter, each party shall retain free from claim by the other their separate superannuation entitlements and personalty.
7.If the wife is unsuccessful, then upon her vacating the Suburb E property she would seek to retain a broad selection of furniture, furnishings and fixtures from the home together with the motor vehicles of the parties and her personal effects.
8.By his Amended Response filed 6 August 2018 the husband opposes the making of any declaration that the parties hold an equitable interest in the Suburb E property and seeks by way of property settlement that the wife retain her superannuation entitlements together with her personalty, that the husband retain his superannuation entitlements, the two motor vehicles in his possession and seeks to assume responsibility for and indemnify the wife in relation to a personal loan to H Bank pertaining to the purchase of Motor vehicle 1.
9.The second and third respondents oppose the orders sought by the wife in so far as they relate to the Suburb E property.
10.The Suburb E property has an agreed value of $510,000. The balance of the agreed property between the parties is modest and accordingly, the gravamen of the proceedings relates to the extent, if any, of the equitable and legal interests of the parties in the Suburb E property.
11.Final parenting orders were made by consent on 21 March 2017 which provided for the parties to have equal shared parental responsibility for the children, that they live primarily with the wife and spend time with the husband. Given the modest value of the property of the parties, it is a regrettable feature of the proceedings that the wife’s costs are in excess of $68,512, the husband’s costs in the sum of $94,710 and the costs incurred by the second and third respondents is $123,612.
BACKGROUND
12.The wife is 47 years of age and the husband is 50. The parties are both in employment.
13.The second and third respondents have both retired from employment.
14.The parties are of Greek descent. They met in 1991. At the time the wife was completing an apprenticeship and the husband assisted his parents in their business.
15.The husband announced his intention to marry the wife by making a formal marriage proposal known as a “logo”. They were formally engaged in November 1992. Following the marriage proposal the parties began to prepare for the wedding. The wife saved her income in anticipation of the cost of the wedding dress and those of the bridesmaids, the likely expense of the wedding itself and the purchase of household items in preparation for their home.
16.The parties were married in late 1994.
17.Following the engagement, the parties turned their minds to the possibility of purchasing a house as their future matrimonial home.
18.The wife contends that the husband and his parents inspected properties in the western suburbs. On occasion the wife would attend, but generally her work commitments prevented her from doing so. If a prospective property was of interest she and the husband would attend at a later time.
19.The husband’s position is that various properties that were looked at were either unsuitable or out of the parties’ price range. He contends that in early 1994 his parents wanted to purchase an investment property and following the inspection of about four properties his parents settled upon the Suburb E property. The husband and the wife inspected the property, although the husband denies that their involvement represented more than simple curiosity and interest. The husband specifically denies that any representation was made or expectation engendered by his parents that the Suburb E property was being purchased by his parents for the husband and the wife.
20.The husband’s parents purchased the Suburb E property in June 1994 for $153,000 with a cash deposit of $63,000, stamp duty of $7,000 and $90,006.50 by way of a bank loan. The mortgage was discharged in 1996. It is not controversial that the parties did not contribute towards either the initial purchase costs or the ongoing mortgage payments.
21.The parties commenced to pay the outgoings in respect of the property from 1996 until a period in 2011 when the parties could no longer afford the council rates, water rates and emergency services levy and in 2014 when the parties could not maintain the insurance and allowed the insurance cover over the Suburb E property to lapse.
22.The wife’s parents also assisted the parties by the payment in 2014 of council and water rates in the sum of $3,000.
23.Following separation on 22 June 2016, the wife received a letter of demand dated 27 June 2016 from the second and third respondents requiring her to vacate the Suburb E property by 1 July 2016.
24.In response to the demand, the wife commenced proceedings on 17 August 2016.
THE ALLEGED REPRESENTATIONS
25.The wife contends that prior to the purchase of the Suburb E property the husband made the following representation:-
“Dad’s offered us the business or a house. We’ll talk about it tonight”.
26.The wife says that the representation was made by the husband in the context of a discussion that he had with his parents concerning an appropriate wedding gift. As he explained to her, she believed that the husband’s father had offered him the option of either taking over the snack bar business or that his parents would provide a house for the parties. The wife’s position was that it was a decision for the husband and she contends that the husband rejected the option of taking over the business in preference for a house. It is a significant aspect of the wife’s case that she states the future consideration of various house properties and ultimately approval of the Suburb E property was predicated on the husband’s representation and her belief that it represented the genuine intention of the husband’s parents.
27.The wife further refers to a purported representation of the husband’s mother to the effect of:-
[The wife] has to look at it. [The wife] has to like it. It’s going to be yours and [the husband’s] house.
28.In May 1994 the wife inspected the Suburb E property following the husband’s advice that he and his parents considered the Suburb E property to be worthy of inspection. The wife states that she attended the property with the husband and his parents and in the presence of the husband’s father, his mother said the following:-
You have to be happy with it. It’s going to be yours and [the husband’s] house.
29.The wife contends that she and the husband discussed the property and agreed that it would respond well to various improvements and renovations and alleges that she told the husband’s parents the Suburb E property was to her liking.
30.A short time after the inspection the parties attended at the husband’s parents’ home and in the presence of the real estate agent various documents were apparently signed which the wife believed related to the sale and purchase of the Suburb E property.
31.Her evidence was graphic in her description of the emotional interchange between the parties and his parents during which they wished the parties happiness in their lives.
32.Following settlement the parties collected the keys for the Suburb E property and gained access in or about June 1994. Thereafter the parties caused modest renovations to the Suburb E property to be undertaken.
33.In September 1994 the parties held a krevati which is a pre-wedding ceremony. Fifty people attended and the celebration consisted of the bridesmaids placing new linen on the bed and food being served to the guests. It was traditional that the guests would make monetary gifts to the parties.
34.The wife states that she and the husband had worked hard to improve the Suburb E property so that it would be presented in the best aspect to the guests. New curtains had been installed and landscaping and other improvements to the property had been made.
35.The wedding ceremony appears to have been a substantial affair. The invited guests were genuine and whilst there is some argument as to the extent of the money that had been given to the parties, the total was likely to be substantial.
36.Whilst the wife does not contend that any further representations were made at the wedding ceremony, she emphasises that if the husband’s parents had not told the parties that the Suburb E property was a “wedding gift to us” she would not have spent her savings on decorating and improvements to the Suburb E property and she would have told her parents to give them a cash wedding gift rather than a bedroom suite.
37.The husband agrees that following an inspection of the Suburb E property with his father he had informed the wife of his father’s intention to purchase the property, but denies that his father had made any representation to him that the Suburb E property would be a gift, or that he had made any separate representation to the wife that suggested the husband had the option of taking over his parent’s business or that they would purchase a property for the parties.
38.He specifically denies that any representation was made by him or his parents in respect of the Suburb E property other than what he says was his parent’s generous offer that following the purchase of the Suburb E property the parties could live in it rent free while they saved for a deposit to purchase their own home.
39.He denies that he and the wife ever attended at his parent’s home and were introduced to a real estate agent. He does not remember any remarks made by his mother that the Suburb E property was purchased for the parties.
40.The second and third respondents denied the making of any representation to either the husband and/or the wife that the Suburb E property was purchased for them. They acknowledge that they anticipated the parties would live in the property for about five years whilst they saved for a deposit. It is their evidence that they told the parties that their opportunity to live in the Suburb E property rent free was to be their wedding gift.
41.It is likely that the husband’s parents were financially generous towards the parties in terms of the expense and cost of the engagement, krevati and the wedding.
42.The wife concedes that prior to the signing of the contract for the Suburb E property, the only representation that had been made (other than from the husband) was from the husband’s mother.
43.The principal representation attributed to the husband’s mother appears in [23] to [25] of the wife’s trial affidavit. In particular, the representation that “[the wife] has to look at it. [the wife] has to like it. It’s going to be yours and [the husband’s] house” is not a representation that the wife attributes to the Suburb E property but rather, was purportedly said by the husband’s mother when an arrangement was made for the wife to inspect a property, but not the Suburb E property. The wife relies upon the representation to support her claim that the husband’s parents gifted their interest in the Suburb E property to the parties.
WAS THERE A GIFT OF THE SUBURB E PROPERTY?
44.The wife claims that consistent with the husband’s representation made to her, at the time of the contract being signed for the purchase of the Suburb E property the husband’s parents’ actions were consistent with the property being purchased as a wedding gift.
45.In the absence of a direct representation evincing a clear intention on the part of the second and third respondents to transfer their beneficial and legal interests in the Suburb E property to the parties, it is difficult to conceive how a gift could be maintained.
46.The wife acknowledges that prior to the purchase of the Suburb E property no representation was made directly to her by the second and third respondents of an intention to gift. Neither the husband nor the wife advanced any funds in respect of the purchase of the property and it has not been submitted that even if there had been an offer of the Suburb E property to the parties there has been any consideration given.
47.The husband’s parents have remained as the registered proprietors. They were responsible for the payment of the mortgage until its discharge in 1996. The parties acknowledge that at no stage did they contribute to the mortgage and at best they have contributed to the payment of various outgoings consistent with their occupation of the property rather than its ownership.
48.The wife is not able to identify the time at which she claims a disposition by gift should be declared. As at the date of purchase of the property, it was subject to a substantial mortgage. That mortgage was discharged in 1996. Thereafter the value of the property has changed by reason of market forces and it is agreed as at the date of trial that the Suburb E property has a value of $510,000.
49.The wife cannot point to any representation that provides the terms and conditions of the purported gift. It is not a matter of subjective consideration by the wife but rather, she has the onus to establish with clarity the basis upon which the gift is made.
50.Section 69 of the Real Property Act 1886 (SA) provides:-
The title of every registered proprietor of land shall, subject to such encumbrances, liens, estates, or interests as may be notified on the certificate of title of such land, be absolute and indefeasible, subject only to the following qualifications:
(a)Fraud
…
(b)Forgery or disability
…
(c)Erroneous inclusion of land
…
(d)Omission of easement
…
(e)Several certificates for the same land
…
(f)Certificate of title to be void if any person is in possession and rightfully entitled adversely to the first registered proprietor
…
(g)Wife’s title to prevail
…
(h)A lease or letting for not more than a year
…
and
(i)Failure of mortgagee to comply with verification requirement
51.The issue of indefeasibility is relevant given the wife’s evidence that whilst she asserts she was present at the time that the husband’s parents signed the contract for the purchase of the Suburb E property, she did not see the relevant documents, nor query why her parents in law were signing the contract as opposed to the husband and wife.
52.She also concedes that there was never any discussion as to how the property was to be paid for and what were the future and ongoing commitments of maintaining the mortgage.
53.The wife admits that when she received the council rates and emergency services levy notices that they were in the name of the second and third respondents.
54.It was only in 2014 following a discussion with her father that she realised the implication of the Suburb E property still being in the names of the husband’s parents.
55.She confirms that she never raised the continued ownership of the property with the husband’s parents because she trusted them, but did discuss it with the husband.
56.An offer is different to a promise to make a gift to another person that is relied upon to his or her detriment (see Beaton v McDivitt & Anor (1987) 13 NSWLR 162).
57.An offer usually invites consideration from the offeree.
58.In Beaton v McDivitt & Anor (supra), McDivitt was the registered proprietor of farming land. He received advice that there was to be a council rezoning which, if it eventuated, would significantly increase the council rates and taxes. Fearing that he would not be able to meet the increased levies, he planned to divide up the property amongst his sons and a third party. McDivitt offered to Beaton that he and his family could live on a portion of the property rent free. Beaton moved onto the land, built a modest hut and commenced a farming operation. When McDivitt refused to carry through with his promise to transfer the land to Beaton, he brought an action claiming he was entitled to the legal title promised to be transferred to him.
59.On McHugh JA said at 182 – 183:-
When a person promises or offers to transfer property to another person, care must be taken to distinguish between three situations. The first concerns a promise to transfer property subject to the occurrence of an event or condition. The promise will not be enforceable even if the event or condition occurs. An example is a bare promise to pay X $100 if a certain team wins a football match. The second situation concerns a promise to transfer property after which the promisor allows the promisee to act to his detriment in reliance on the promise. In this situation, depending on the circumstances, Equity may prevent the promisor insisting on his strict rights and may enforce the promise. The third situation is where the promise contains an express or implied request by the promisor to do and act or fulfil a condition. In that situation the doing of the act or the fulfilling of the condition by the promisee in reliance on the promise will usually constitute consideration and create a binding contract: see Australian Woollen Mills Pty Ltd v The Commonwealth (at 456, 457, 458, 459 – 460) and Combe v Combe [1951] 2 KB 215 at 221.
…
60.Therefore, an act undertaken in reliance on a promise is not consideration for an offer unless the offer has as an essential term and condition a request that the offeree does something.
61.I find that on the balance of probabilities the second and third respondents did not make the representations as alleged by the wife. There is no evidence to support the wife’s contention of a gift.
62.I accept that as at the date of the purchase of the Suburb E property the husband’s parents intended to allow the parties to occupy the property for an extended period, not less than five years.
63.The second and third respondents are not able to assist the Court in what may have been said by the husband to the wife in respect of the property. In finding that there was no intention to gift the property, I find that it is likely the wife formed the erroneous belief that in some way the Suburb E property was for the benefit of the husband and her.
64.At the date of purchase the wife was 23 years of age and by her own admission she was commercially unsophisticated and relied substantially on the husband’s representations.
65.The husband presented as an unsatisfactory witness. He was challenged as to his current employment status. Notwithstanding that at the time he signed his trial affidavit on 6 August 2018 he gave his employment as a casual employee, he was not able to provide any detail nor produce documents to establish his employment status. His evidence was that he had been unemployed for three and a half years and had last worked in casual employment four weeks prior to the trial and then only for four hours. He pays child support in the sum of $16 per fortnight and is substantially in arrears.
66.He currently resides with his parents and pays no board or rent. It is his hope to move into independent accommodation but only once he finds a job. He agreed that the wife’s financial position was precarious, particularly in respect of arrears relating to the children’s school tuition fees outstanding in the sum of $24,137.
67.The husband was asked as to the provenance of the letter of demand sent by the second and third respondent’s solicitors to the wife on 27 June 2016 seeking that she vacate the premises. The husband denied any prior knowledge of the letter, but did confirm that his brother had been involved in providing the solicitors with instructions to send the letter of demand because his brother considered that one half of the house was his. By necessary implication, the husband considered that he held an interest in the other half.
68.The husband further confirmed that, notwithstanding the contents of [23] of his trial affidavit, he believed that his father had always wanted to purchase a property for the husband and his brother.
69.Whilst initially denying that he had any conversation with the wife about the Suburb E property or an option proposed by his father that he could elect to take over the business or receive a home, in evidence the husband conceded that he may have told the wife that a property was to be provided by his parents.
70.He further agreed that the contents of [24] of his trial affidavit was accurate and that he did attend the Suburb E property and inspect it prior to purchase. It is relevant that he concedes a conversation with the wife that a feature of the Suburb E property that he liked was that it had a three car garage.
71.The parties further inspected the Suburb E property in the absence of the second and third respondents. In evidence, the husband agreed that there was no reason for the wife to further inspect the property if it was intended only as an investment property. He acknowledged that it was his understanding the Suburb E property was where he and wife would be living after marriage.
72.The husband was asked to consider the contents of [27] of his trial affidavit. When asked to consider the detail as set out, the husband could not initially remember the meeting, but reminded of the contents of his affidavit he did remember attending a meeting but did not know what it was about, nor did he have any recollection of anything that was discussed.
73.I accept the wife’s evidence as to the accuracy of the representations that she says were made by the husband. The husband’s evidence was unsatisfactory and where it differs from that of the wife and in the absence of third party corroboration I propose to accept her evidence.
MOTOR VEHICLE 1
74.Exhibit “2” comprises the purchase documents and the application for finance in respect of motor vehicle 1 purchased in January 2011.
75.The total price of the vehicle was $48,866. The purchase was financed by the husband borrowing $39,497. Application was made to a bank for consumer finance and on the application as signed by the husband he listed the Suburb E property at $550,000. He confirmed in his application for finance that the information provided as to his assets and liabilities were true and correct.
76.The evidence as to the wife’s initial involvement with the finance provider was not inconsistent with the representations made by the husband.
77.In evidence the husband was taken to the finance documents and it was only with great reluctance that the husband was prepared to look at the documents and then acknowledge their contents. His explanation for the Suburb E property in his declaration of his assets and liabilities was that “I didn’t read it”.
78.He agreed that he sat with the wife when the information had been provided over the telephone and did not resile from his assessment that the contents of the home were represented as $150,000. The husband’s purported misrepresentation to the finance provider is not easily explained by lack of attention.
79.The husband’s evidence lacked credibility and his faltering and improbable explanation for the content of the finance application lends weight to the belief by the wife that the parties in some way owned by Suburb E property arising from the husband’s representations and actions.
CLAIMS OF THE PARTIES
80.In her Outline of Case document, the wife seeks declarations that she and the husband are the beneficial owners of the Suburb E property.
81.She asserts that they “acted to their detriment in relying on those representations, encouragement and acquiescence of the second and third respondents by losing the opportunity to apply their use of resources and income to purchase a home of their own”.
82.She highlights that the “representations, encouragement and acquiescence” continued for a period of 22 years with their full knowledge of the parties’ extensive expenditure on the property in terms of renovations, including the installation of a new kitchen and the payment of the majority of the council rates, land tax and other outgoings. There was also extensive expenditure on fixed furnishings including curtains and window treatments.
83.The husband does not accept that either he or the wife hold any equitable interest in the Suburb E property and considers that his parents have been generous by the gift of rent free accommodation which has persisted for 22 years.
84.Whilst his Outline of Case document does not assert any interest in the Suburb E property and opposes the wife’s application to retain it, his position may need to be tempered given his evidence that he believed the property was purchased for the ultimate benefit of him and his brother.
85.The second and third respondents deny that they ever made any representation that the husband and wife either had any interest in the Suburb E property or were entitled to receive it by way of a gift.
86.By reference to the authorities relied upon by the wife, it is assumed that the basis for the declaration as sought by the wife depends upon her success in establishing that the Suburb E property is the subject of a constructive trust in favour of the husband and the wife.
RELEVANT PRINCIPLES – EQUITABLE INTERESTS
87.In Muschinski v Dodds (1985) 160 CLR 583 Deane J held at 620 [14]:-
…the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purpose of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that the other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do. …
[cases and citations omitted].
88.The High Court further considered the discussion commenced in Muschinski v Dodds in Baumgartner v Baumgartner (1987) 164 CLR 137 that a constructive trust can be imposed as an equitable remedy in accordance with:-
[G]eneral equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them.
89.A constructive trust is not a remedy available simply because a party has been unjustly enriched to the detriment of another party.
90.In Shepherd v Doolan & Ors (2005) NSWSC 42 White J said:-
[31]One class of case where equity will intervene to prevent the unconscientious denial by the legal owner of another party’s rights, is where the party agreed, or it was their common intention, that the claimant should have an interest in property owned by the other, and the claimant acted to his or her detriment on the basis of that agreement or common intention. [Citations omitted]
[32]Another class of case where equity will intervene is to “…[restore] to a party contributions which he or she had made to a joint endeavour which fails when the contribution have been mad ein circumstances in which it was not intended that the other party should enjoy them.” (Baumgartner v Baumgartner (1987) 164 CLR 137 at 148). …
91.The decision of Giumelli v Giumelli (1999) 196 CLR 101 is authority for the proposition that consideration should always be given to whether the circumstances of a case might permit of equity offering an alternative remedy than that of a constructive trust.
92.The facts in Giumelli (supra) involved a claim by a son against his parents. The parents had promised him that he would receive a parcel of land by way of compensation for working without wages. This was considered by the Court to be the first promise. The second promise was made when upon his marriage his parents allowed him to build a house on the subject land. The son separated from his first wife and when his parents did not support his subsequent relationship he left the land and commenced proceedings seeking a declaration that his parents held the subject property on trust to convey the promised land to him.
93.The trial Judge determined that the son had indeed suffered detriment by reason of the expenditure on the house in reliance on the second promise, but had not suffered detriment in respect of a third promise to subdivide a further portion of the land. The decision of the trial Judge was overturned on appeal and a declaration was made that the parents held the whole of the larger property on trust for their son.
94.On appeal to the High Court, the decision of the Full Court that the son had acted to his detriment in reliance on the third promise was upheld, but the Court determined that rather than an order of subdivision of the property and transfer to the son a monetary sum representing an appropriate level of compensation should be the appropriate order.
95.The plaintiff’s claim rested on a constructive trust. The High Court quoted from Professor Scott’s work, Scott on Trusts, 4th ed, (1989), Vol 5, at [§462.4] as follows:-
In submissions to this Court, the term “constructive trust” was used to identify the nature of the equitable remedy granted by the Full Court. Care is required in the use of the term “constructive” in this context. Professor Scott has pointed out:-
“It is sometimes said that when there are sufficient grounds for imposing a constructive trust the court ‘constructs a trust’. The expression is, of course, absurd. The word ‘constructive’ is derived from the verb ‘construe’, not from the verb ‘construct’. The court construes the circumstances in the sense that it explains or interprets them; it does not construct them.”
The relief granted by the Full Court involved a trust that was “constructive” in that way. The Full Court so interpreted the circumstances as obliging the appellants, in good conscience, not to retain their beneficial interest in the whole of the Dwellingup property and as requiring them to answer the respondent’s equity by bringing about a subdivision of the Promised Lot and conveying the title to it. The equity of the respondent was seen by the Full Court as sufficiently strong as not only to prevent the appellants from insisting upon their strict legal rights but also, in respect of the Promised Lot, to convey it to the respondent.
96.Their Honours said further at 112 [10]:-
… Before a constructive trust is imposed, the Court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust. At the heart of this Appeal is the question whether the relief granted by the Full Court was appropriate and whether sufficient weight was given by the Full Court to the various factors to be taken into account, including the impact upon relevant third parties, in determining the nature and quantum of the equitable relief to be granted.
97.John Dyson Heydon and Mark James Leeming, the learned authors of Jacobs’ Law of Trusts in Australia say:-
[A constructive trust] differs from the express trust in that it is raised by operation of law often without reference to the intention of the parties concerned and indeed largely contrary to the desires and intentions of the constructive trustee. … In the case of a constructive trust, the inquiry is not solely as to the actual or presumed intention of the parties, but as to whether, according to the principles of equity, it would be a fraud for the party in question to deny the trust. …[1]
[1] John Dyson Heydon and Mark James Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016) 228 [13-01].
98.The intention of the parties is a relevant consideration. A constructive trust can be conferred in the absence of an intention to create or transfer a beneficial interest, but intention always has the potential to be of assistance.
99.In Donis & Ors v Donis [2007] VSCA 89 the following discussion of the principles of equitable estoppel and the concept of “the minimum equity” is of assistance:-
18.Each of the appellants’ arguments is to some extent premised on the idea that equitable estoppel “permits a court to do what is required in order to avoid detriment to the party who has relied on the assumption induced by the party estopped, but no more”. That idea finds support in some of the judgments in Waltons Stores (Interstate) Ltd v Maher and Verwayen v the Commonwealth and in particular in the observations of Mason CJ in Verwayen that:
“…equitable estoppel will permit a court to do what is required in order to avoid detriment to the party who has relied on the assumption induced by the party estopped, but no more.”
19.As the more recent decision in Giumelli v Giumelli shows, however, there is no such restriction in cases where the expectation which is encouraged is the acquisition of an interest in property. In such cases the remedy relates to the understanding of the parties and the expectation that has been encouraged. Prima facie the estopped party can only fulfil his or her equitable obligation by making good the expectation which he or she has encouraged. The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation. It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it.
[20]The prima facie position will yield to individual circumstances. Principle and authority compel the view that where a plaintiff’s expectation or assumption is uncertain or extravagant or out of all proportion to the detriment which the plaintiff has suffered, the court should recognise that the claimant’s equity may be better satisfied in another and possibly more limited way. Thus, as was also said in Giumelli, before granting relief the court is required to consider all of the circumstances of the case, including the possible effects on third parties, and to avoid going beyond what is required for conscientious conduct or would do injustice to others. But that does not mean that the court is required to be “constitutionally parsimonious” or that it is necessary for there to be substantial correspondence between expectation and the monetary value of the detriment suffered, or which but for the relief to be accorded would be suffered. The object of the exercise is to do equity and for that purpose “detriment” is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.
99.Relevant to the matter before me, the Full Court considered the benefit of “rent free accommodation”. The following appears:-
54.In the second place, I regard the so-called benefit of “rent-free” accommodation as substantially irrelevant. As Robert Walker LJ said in Gillett v Holt:
“The point made in the passage [from Jones v Watkins] may be thought obvious, but sometimes it is useful to spell out even basic points. If in a situation like that in Inwards v Baker, a man is encouraged to build a bungalow on his father’s land and does so, the question of detriment is, so long as no dispute arises, equivocal. Viewed from one angle (which ignores the assurance implicit in the encouragement) the son suffers the detriment of spending his own money in improving land which he does not own. But viewed from another angle (which takes account of the assurance) he is getting the benefit of a free building plot. If and when the father (or his personal representative) decides to go back on the assurance and assert an adverse claim then, as Dixon, J. put it in the passages just quoted from Grundt v Great Boulder Pty Gold Mines Ltd, ‘if [the assertion] is allowed, his own original change of position will operate as a detriment.’”
100.In Sidhu v Van Dyke (2014) 251 CLR 505the High Court considered the situation where a party had been induced to make small quantifiable outlays of money. The following appears at [84]:-
If the respondent had been induced to make a relatively small, readily quantifiable monetary outlay on the faith of the appellant’s assurances, then it might not be unconscionable for the appellant to resile from his promises to the respondent on condition that he reimburse her for her outlay. But this case is one to which the observations of Nettle JA in Donis v Donis are apposite:-
“[H]ere, the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature … beyond the measure of money and such that the equity raised by the promisor’s conduct can only be accounted for by substantial fulfilment of the assumption upon which the respondent’s actions were based.”
RENOVATION AND IMPROVEMENT OF THE SUBURB E PROPERTY
101.Following settlement on the Suburb E property, the husband’s parents provided the parties with the keys to the property. It was understood that the parties wanted to make minor improvements to the property in preparation for the pre-marriage festivities including the krevati.
102.The family was proud of the purchase of the property and in keeping with clear cultural traditions, wanted to present the property to friends and extended family as a functioning family home.
103.One of the husband’s uncles offered to paint the inside of the home as a wedding present, conditional upon the parties providing the paint and materials.
104.Another uncle purchased and fitted a new door to the parties’ ensuite bathroom with a modest contribution of $100.
105.The wife arranged for and paid the cost of sanding and polishing the floors.
106.The husband’s friend, who is an electrician by trade, installed new power points, switches and dimmers as a wedding gift to the husband and wife.
107.The wife’s parents purchased an Italian bedroom suite for the parties at a cost of $10,000.
108.The parties purchased furniture and furnishings for the home at a cost of $7,000.
109.The curtains in the living areas and main bedrooms were purchased by the parties at a cost of $17,500. Whilst there is some contention as to whether the wife’s recollection of the total cost of the curtains is accurate, I found the wife’s evidence on the topic to be reliable and I accept that she paid for the curtains from her pre-marriage savings.
110.Following the wedding, the parties installed an alarm system at a cost of $3,500. In 1996 the husband’s uncle replaced a hot water system at a cost of $1,100.
111.In 1995, extensive repair was undertaken to the garage attached to the Suburb E property. A new double roller door was installed at a cost of $890 and in addition, work was required to remove the central pillar and construct a frame that was able to support the new roller door, the motor and the remote controls required for its operation.
112.In 1997, a tool shed was constructed at a cost of $504.50 together with the necessary earthworks at a cost of $206.50. There were continuing improvements made to the soft furnishings inside the property. In 2002 the parties replaced the curtains and pelmets in the children’s bedrooms at a cost of $2,300. A new air-conditioning unit was required at a cost of $740.85 with further work necessary to remove the old wall unit, repair and replaster the wall and install the new unit.
113.In 2009 the parties decided to renovate the kitchen. It is the wife’s evidence that the kitchen renovation was extensive. The original kitchen was removed in its entirety and new cupboards, benchtops, flooring, wall tiles and range hood and splashback were installed.
114.New appliances were purchased and the wife’s estimate of the total cost of the renovation was about $20,000. The wife’s evidence was that the husband’s parents were aware of the kitchen renovations based upon their own observations when attending at the Suburb E property, but also because the husband and wife did not have cooking facilities and were frequent guests at the husband’s parents’ home for meals.
115.The husband’s evidence sought to minimise the extent of any renovation and improvement to the property. Whilst he agrees that some work was done on the garden which included the planting of a few plants and the mowing of lawns, he considered that any improvements made were minor in nature and consistent with the basis upon which he understood the parties were living in the home namely, as a gift of free rent.
116.Neither the husband nor his parents were prepared to concede that the kitchen renovations were extensive. The husband acknowledges that the total cost would have been about $10,000, but denies that his parents gave any indication that they recognised the extent of the kitchen renovations to be substantial. I do not accept the evidence of the husband’s parents that they were not aware of the full extent of the kitchen renovation being undertaken. Whether the family ate at the husband’s parents’ home every night during the period that the home was without cooking facilities, or at a lesser level of frequency, I find that they were advised and made their own observation of the kitchen installation. At no stage did the husband’s parents question why the parties were undertaking significant renovations, but in particular to the kitchen, which would have been inconsistent with the suggestion that the husband and wife were mere occupiers of the premises at the sole discretion of the second and third respondents. As at the date of the installation of the new kitchen, the parties had been occupying the property for nearly 15 years.
CONCLUSION AS TO THE EQUITABLE CLAIM
117.I have found that prior to the occupation of the Suburb E property by the parties, no representation was made by the second and third respondents which would have entitled the wife to believe that the property was being gifted to the parties. Equally, I find that no representation was made which set out the basis upon which the parties would be permitted to occupy the property. While the second and third respondents consider that they were making a gift of accommodation to the parties for a period of time sufficient to enable them to save up for a deposit and purchase their own home, if this was the considered intention, it was never conveyed to the parties.
118.I find that the conduct and representations made by the husband to the wife left her with the belief that the parties would retain some interest in the property.
119.The wife asserts that at the commencement of cohabitation she had savings of about $25,000. That money was used to pay the cost of some of the more minor improvements to the property, the wedding and honeymoon. The wife lacked the necessary sophistication to challenge the husband’s parents as to the legal and equitable status of the property. She knew that the notices for rates and taxes remained in the name of the husband’s parents. The parties did pay the house insurance.
120.For his part, the husband believed that his parents had purchased the Suburb E property to eventually benefit him and his brother. Both parties acted upon their own belief that in some way they held a proprietary interest in the property that exceeded a mere right of occupation.
121.In the absence of any representations to the contrary, the husband’s parents were at all times aware of the occupancy by the parties over a period of 24 years and raised no complaint, query or opposition to the substantial expenditure being incurred by the parties, in particular by reference to kitchen renovations.
122.The wife and the husband relied upon the clear acquiescence by the second and third respondents to their continued occupation of the property and expenditure consistent with the wife’s understanding and belief namely, that they held an interest greater than a right of occupation.
123.I find that but for the separation of the parties, the second and third respondents would not have taken any action to cause the wife to leave the property. In those circumstances it is unconscionable for the second and third respondents to assert that the parties have no interest in the property and that the wife should now vacate.
124.In Sidhu & Van Dyke (supra) the plurality opined as to the likely response if the following proposition was put:-
“I am happy for you to remain at Oaks Cottage, but only for so long as it suits me and my wife to have you here; and, while you remain on the property, you must care for it as if you were the owner of the property and do unpaid work on parts of Burra Station other than the property. Until I make the property over to you, you must pay rent sufficient to content my wife. Should you choose to leave, you will leave with nothing in return for the value of your work here.”
125.I find that the parties were induced by the silence of the second and third respondents to remain living in the property for a period of 24 years. I consider it would be unconscionable for the second and third respondents to require the parties, but in particular the wife, to vacate the premises and to deny the clear detriment that would result in those circumstances.
QUANTUM OF THE CLAIM
126.The wife argues that if she had been aware that any interest in the Suburb E property would be challenged, the family would not have remained in the property beyond that which was required to obtain the deposit to purchase their own family home. Moreover, any expenditure would have been minimal and would certainly not have extended to improvements to the fixtures, fittings and structural alterations.
127.I accept the wife’s contention that the fitting of extensive curtain treatments, the installation of an air-conditioning unit, changes to the garage and the entire kitchen makeover were inconsistent with mere occupancy at will.
128.The detriment occasioned to the parties is not limited to the totality of their expenditure. As discussed, some expenditure may well be considered consistent with the long term occupancy of a property, whereas other expenditure is unlikely to be so easily explained. The duration of occupation of the Suburb E property must be a significant factor. Opportunities that were available to the parties in terms of securing other accommodation are likely now to have been lost or made more difficult. The parties are no longer together. The financial circumstances of the parties are parlous and whilst no evidence has been presented of enquiries made by the wife as to the state of the real estate market and the likelihood of the wife obtaining alternate accommodation, the evidence supports a finding that the parties’ financial position is parlous. The wife is unlikely to receive substantial financial support from the husband in respect of the care of the children.
129.The second and third respondents have presented evidence as to the benefit obtained by the parties in their continued occupation of the Suburb E property. An assessment of the rental that should have been paid has been assessed by the single expert valuer at $300,000. That figure is uncontroversial. Equally, that evidence can assist giving some context to the loss and detriment likely to be experienced by the parties into the future given that they will be denied the benefit of ongoing occupation.
130.In Sidhu & Van Dyke (supra) the following appears:-
85.The appellant’s argument, rightly, sought no support from the discussion in cases decided before Giumelli v Giumelli of the need to mould the remedy to reflect the “minimum relief necessary to ‘do justice’ between the parties”. There may be cases where “[i]t would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption”; but in the circumstances of the present case, as in Giumelli v Giumelli, justice between the parties will not be done by a remedy the value of which falls short of holding the appellant to his promises. While it is true to say that “the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct”, where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party’s detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise.
131.I do not consider that the appropriate remedy is to require the transfer of the legal and equitable interests in the Suburb E property to the parties. A more measured approach is required and the better way forward is to quantify the claim of the parties in terms of a damages award that reflects the detriment likely to be sustained by them. In this regard I considered their claim should be quantified in the sum of $300,000 which brings to account the potential loss to the parties of enjoying rent free accommodation going into the future and the extent of lost opportunity in purchasing their own home, together with a recognition of the level and extent of actual expenditure by the parties on the maintenance and improvement to the property.
F STREET, SUBURB B
132.The wife seeks a declaration that she holds no interest in the property at F Street, Suburb B (“the Suburb B property”). The wife’s parents built a house on the land which was registered in the name of the wife and her brother. She does not recall the transaction, but agrees that the purchase occurred when she was 18 years of age.
133.The wife’s parents lived in the Suburb B property since its purchase. The wife lived at the property until her marriage to the husband.
134.It is asserted that neither the husband nor the wife made any contribution to the property and the husband provides no evidence to the contrary.
135.In 2012 the wife signed an acknowledgement that she held the property on trust for her parents.
136.While I do not propose to make the order of declaration as sought by the wife, the orders will reflect that the property has been disclosed and that at no time have the parties contributed to the property or that it represents a valuable interest that should be brought to account when considering the separate financial circumstances of the parties.
PROPERTY OF THE PARTIES
137.The assets of the parties are modest and by reference to the balance sheets as prepared on behalf of the parties I consider that the assets and liabilities are as follows:-
ASSETS
Interest in Suburb E property
300,000
Furniture & household goods (wife)
15,000
Motor vehicle 1 (husband)
25,000
Motor vehicle 2(husband)
6,500
Total
$346,500
LIABILITIES
D Bank
14,237
H Bank personal loan (motor vehicle)
8,000
NAB Visa (wife)
5,500
Amount outstanding for repairs to Motor vehicle 1
8,541
Total
$ 36,278
Balance
$310,222
M Superannuation (wife)
5,581
G Super (wife)
5,932
L Super (husband)
10,000
IS IT JUST AND EQUITABLE TO ALTER THE PROPERTY INTERESTS OF THE PARTIES?
138.The parties contend that it is just and equitable for the Court to make an order pursuant to s 79 of the Family Law Act1975 (Cth) (“the Act”).
139.In Stanford & Stanford (2012) 247 CLR 108 the majority held:-
35.It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
36.The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. …
140.In Bevan & Bevan [2013] FamCAFC 116 the Full Court considered at [73] that the decision of Stanford could be reduced to three fundamental propositions:-
(1)The Court needs to consider the existing property interests of the parties and to identify those interests (by reference to common law and equity); and
(2)The discretion must be exercised in accordance with legal principles and not in respect of any assumption that the parties interests should be different from those determined by common law equity; and
(3)Section 79(2) cannot be conflated by reference to matters in s 79(4).
141.I consider that it is just and equitable for a s 79 order to be made.
METHODOLOGY TO BE ADOPTED
142.The superannuation interests of the parties are modest. Given the age of the parties and the significant period that will likely elapse before either of them can satisfy a condition of release, I am of the view that the superannuation interests are best dealt with by treating them as a financial resource rather than notionally including the superannuation entitlements in the pool of property or by a consideration as to whether the superannuation interests should be split.
CONTRIBUTIONS OF THE PARTIES
143.The parties each argue that they held a significant sum of money at the commencement of marriage. Each of the parties were in paid employment and while no documents are available to definitively resolve this issue of monies held in 1994, the evidence of the parties is reasonable.
144.During the course of the marriage the parties made appropriate financial and non-financial contributions consistent and commensurate with their circumstances from time to time. Each of the parties held employment which generated a modest income. Following the birth of the first child the wife adopted the role of primary homemaker and there is no argument that she fulfilled the role of a homemaker.
145.The parents of the parties have been generous in their provision of financial support.
146.From time to time the parties were not able to meet the outgoings on the Suburb E property. Outstanding rates and taxes have been paid by each of the maternal and paternal families.
147.Members of the parties’ extended families have also contributed by providing free labour for the upkeep and maintenance of the Suburb E property.
148.The Suburb E property has an agreed value of $510,000. I have found that the reasonable compensation to be paid by the second and third respondents to the parties is in the sum of $300,000. It could be argued that a valuable contribution was made by the second and third respondents of the difference between the interest established and the value of the property. It may well be argued that whilst the “gift of free rent” is not particularly relevant to the consideration as to whether an equitable interest exists in favour of the parties, nonetheless, they did remain in the property and a consideration must be made as to whether this represents a contribution made by the husband’s parents on his behalf.
149.In Gosper & Gosper (1987) FLC 91-818 Fogarty J said at page 76,167:-
Where there has been a gift or advance by a relative to one or both of the parties to the marriage the first step is to determine the ownership of that benefaction…
150.In Pellegrino v Pellegrino (1997) FLC 92-789 Chisolm J considered that the Court should determine whether or not a parent of a party making a gift or a provision has done so to benefit one of the parties as distinct from benefitting both parties. His Honour cited the following passage from Gosper (supra at 76,168) with approval:-
The critical case is where a relative of one of the parties gifts property to both of the parties to that marriage. Dependent upon the circumstances of the case it is, in my view, open to the Court in such a case to look at the actuality and treat that as a “financial contribution made directly … on behalf of” the spouse relative. …
In many cases that gift was made only because of that relationship and in reality as a means of benefitting that relative in that marriage. It was made “because she was a daughter of that family” as was said in W.’s case at p. 75,527.
It is clearly a “financial contribution” and one “made directly” to the acquisition, conservation and improvement of property. In such cases it is open to the Court to conclude, if the facts justify it, that it was made “on behalf of” one spouse.
In other cases the evidence, including evidence that the donor intended to benefit both spouses, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.
151.The evidence supports the finding that the husband’s parents were kindly disposed to both of the parties. The wife’s evidence is that she had a good relationship with them until she separated from the husband in 2016.
152.The wife attended at the home of the husband’s mother and did her hair on a regular basis. There was a close connection between the parties and the husband’s parents. The husband’s parents intended that the gift of occupation was a wedding present.
153.In all the circumstances, I consider that the second and third respondents intended that the provision of the property and the parties’ ability to take up residence and remain in the Suburb E property was a benefit intended to be bestowed equally on each of the parties.
154.Accordingly, I find support in the evidence that the contributions of the parties should be considered as equal.
SECTION 75(2) FACTORS
155.The wife continues to reside in the Suburb E property, but as a result of the orders that are to be made she and the children will need to find alternate accommodation.
156.The children live primarily with her and spend some hours with the husband on each Monday, each alternate Sunday and on five consecutive days in all school holidays.
157.The presentation of X is difficult. She has learning difficulties and requires weekly speech and occupational therapy. The wife considers that whilst difficult, X is currently supported by the teachers in her school and she would seek that X remain at her current college.
158.The evidence supports the wife’s assertion that she is the primary carer of the children and it is left to her to arrange for and pay the tuition and ongoing therapy for X without contribution by the husband.
159.There has been significant issue as to the payment by the husband of any contribution towards the children’s tuition fees.
160.The wife is currently employed with an income of $758 per week. Her expenses are likely to consume all of her income, particularly when she needs to factor in future accommodation costs.
161.The husband is employed earning $473 per week. His financial statement reveals that his total personal expenditure exceeds his income. He is significantly in arrears in respect of child support.
162.The husband was challenged as to the extent of his work and I found his evidence to be unsatisfactory. He was evasive and left the Court with the real impression that he was employed, but without there being any documents that would establish the basis of his employment. The husband contends that he has not worked for a considerable period of time and his principal source of income is Newstart Allowance supplemented by a modest wage.
163.The husband argues that the Suburb B property will eventually pass to the wife and her brother in equal shares. At present and on the basis that the property is valued by the husband between $600,000 and $650,000, he estimates that the wife’s interest in terms of future inheritance is in or about $200,000.
164.No evidence was presented as to the present value of the wife’s future interests in the Suburb B property and taking into account the provisions of the wife’s parents’ wills, I am satisfied that any future expectation by the wife in relation to the Suburb B property has not been quantified and in any event is dependent upon the death of the wife’s parents which in and of itself is difficult to determine with any certainty. I do not consider that I should bring to account any expectation of inheritance by the wife.
165.The most significant consideration under s 75(2) are the poor financial circumstances of the parties and the financial obligation that the wife has in caring for the children with minimal financial support by the husband.
166.I do not ignore that X is now aged 16 years and Y will soon be 13 years.
167.The husband is in arrears in child support and I was not able to gain any confidence from his evidence as to the likelihood that he with either obtain employment or that he would disclose his employment such that it could properly be reflected in a child support assessment.
168.An adjustment pursuant to s 75(2) is not simply a consideration of the application of a percentage in favour of one party or the other but rather, care must be exercised to ensure that any adjustment made is meaningful in terms of its dollar value.
169.For those reasons I find that there should be an adjustment of the net pool in favour of the wife of 15 percent.
CONCLUSION AS TO ALTERATION OF PROPERTY INTERESTS
170.I find that the net pool of assets should be divided as to 65 percent to the wife and 35 percent to the husband. In respect of a net pool of $310,222 the wife should receive $201,644.
171.The wife holds or has the following:-
Assets
Furniture and effects
15,000
Liabilities
D Bank
14,237
NAB Visa
5,500
Balance (in deficit)
-$ 4,737
172.Accordingly, the wife is to receive $201,644, but with a deficit of $4,737 the total payment that is required is $206,381.
173.The husband does not have the ability to meet the settlement sum and accordingly I propose to order that the second and third respondents discharge the husband’s obligation to the wife from the amount that they are required to pay to the parties.
174.I am satisfied that the orders I propose to make will represent a just and equitable outcome.
175.Following the payment of the wife’s legal fees there will be a modest sum remaining. It is likely that the husband will remain in the Suburb E property and if that is to occur there may need to be some agreement reached with his parents as to the borrowings that may be required.
176.I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and seventy six (176) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 7 November 2018
Associate:
Date: 7 November 2018
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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