Solare and Hearst
[2008] FamCA 1027
•28 November 2008
FAMILY COURT OF AUSTRALIA
| SOLARE & HEARST | [2008] FamCA 1027 |
| FAMILY LAW – PROPERTY SETTLEMENT – weight given to initial financial contributions – indirect financial contributions arising from assistance given by extended family members – gambling activities – third party interests – constructive trust |
| Family Law Act 1975 (Cth) |
| Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143 Robb and Robb (1995) FLC 92-555 Pierce and Pierce (1999) FLC 928-844 Muschinski v Dodds (1984-1985) 160 CLR 583 Baumgartner v Baumgartner (1987) 164 CLR 137 |
| APPLICANT: | Ms Solare |
| RESPONDENT: | Mr Hearst |
| SECOND RESPONDENT: | Trustee of the Estate of the late Mr Solare |
| FILE NUMBER: | HBF | 812 | of | 2005 |
| DATE DELIVERED: | 28 November 2008 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | The Hon. Justice Rose |
| HEARING DATES: | 3-9 October 2007; |
| WRITTEN SUBMISSIONS: | 20 March 2008; 4 April 2008; 11 April 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | C Boland |
| SOLICITOR FOR THE APPLICANT: | Chris Boland, Solicitor |
| COUNSEL FOR THE RESPONDENT: | D Keating |
| SOLICITOR FOR THE RESPONDENT: | Hand Ogilvie & Breheny, Solicitors |
Orders
That the wife pay or cause to be paid to the husband the sum of $35,139.00 on or before 5.00pm 27 February 2009.
That upon the wife complying with Order 1 the husband shall forthwith sign all documents and do all things necessary to transfer to the wife the whole of his right title and interest in the fishing licences described by the parties as “the fishing licence package”.
That in the event of the wife failing to comply with Order 1 the husband and wife shall forthwith appoint ship brokers as their agents to sell “the fishing licence package” upon such terms and conditions and for such price as the husband and wife may agree upon in writing or failing agreement as otherwise ordered.
That pursuant to Order 3 the husband and wife shall apply the proceeds of sale of their interests in “the fishing licence package” in payment of the following:
(a)Costs of sale.
(b)An amount equal to 30% of the balance in favour of the husband.
(c)The remaining balance in favour of the wife.
Declare that subject to the Orders made this day each of the husband and wife is the sole beneficial owner of all items of personalty (including superannuation entitlements) in his or her possession power or control respectively.
Declare that the second respondent holds a one-third interest in “the fishing licence package”.
That all documents produced on subpoena may be returned to the person who produced the same.
That the proceedings be removed from the Active Pending Cases List.
IT IS NOTED that publication of this judgment under the pseudonym Solare & Hearst is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: HBF812 of 2005
| Ms Solare |
Applicant
And
| Mr Hearst |
Respondent
| Estate of the late Mr Solare |
Respondent
REASONS FOR JUDGMENT
Introduction
In these proceedings the applicant (who for convenience I shall refer to as “the wife”) seeks orders for property settlement in accordance with her Amended Application filed 30 November 2005.
The respondent (who for convenience I shall refer to as “the husband”) had sought different orders for property settlement in accordance with his Amended Response filed 31 May 2007.
The orders sought by the husband were further amended in accordance with the “Minutes of Orders” dated 28 September 2007 which became Exhibit 3.
The second respondent in the capacity of trustee of the estate of Mr Solare deceased (“the deceased”) had sought declarations in accordance with the Reply to Response filed 16 June 2006. Ultimately, the declarations sought by the second respondent are in accordance with the “Minutes of Orders” which became Exhibit 24.
The deceased was the wife’s father.
One of the major issues in these proceedings is whether the second respondent is the owner at law of a one-half interest in certain fishing licences namely:
(a) Tasmanian fishing licence and fishing certificate.
(b) Fishing licence (Wrasse).
(c) Fishing licence (scalefish B).
(d) Fishing licence (vessel) 0-10 metres.
(e) AFMA Gillnet permit and quota.
The fishing licences referred to in paragraph 6 are hereinafter collectively referred to as “the fishing licences”.
There is a common interest in the cases for the wife and the second respondent in that the declaratory relief sought by the second respondent is supported by the wife.
The husband’s case is that he holds a 90% interest in the fishing licences, the subject of the declarations sought by the second respondent.[1]
[1] See Exhibit 3
The wife and husband cohabited for a period of approximately 18 ½ years which commenced in about February or March 1985 and continued until they finally separated in December 2003, according to the wife; or July 2003, in accordance with the evidence of the husband. This issue was sensibly not explored during the course of cross-examination as nothing of significance turns upon a finding as to which month in 2003 separation actually occurred. Therefore, I find that the wife and husband separated during 2003.
The wife and husband married in June 1985. That marriage was dissolved by decree nisi made 3 June 2005 which became absolute on 4 July 2005.
The wife was 47 years of age at the date of the hearing. The wife is a disability pensioner.
The husband was 43 years of age at the date of the hearing and is a professional fisherman.
The husband is married to his former partner Ms L who is 40 years of age. They have a child who was a little over one year old at the date of the hearing.
Historical background
The following are further brief relevant historical matters.
In November 1978 the wife married her first husband.
In January 1980 the wife’s eldest child, daughter, was born.
In February 1982 the wife’s first husband died in an industrial accident.
In April 1982 the wife’s second child, a son, was born.
On 3 June 1983 the husband was declared bankrupt.
In September 1984 in the Supreme Court of Tasmania, in what seems to have been a compensation to relatives action, damages were awarded in the sum of $156,091.00 in favour of the wife and $37,222.00 to her second child. The latter amount was ordered to be held by the Public Trustee for the State of Tasmania until that child attained his majority. A copy of the judgment is Exhibit 4.
Although the judgment does not make any reference to the wife’s eldest child as a party to the proceedings, it is not disputed that she was also awarded $46,935.00 also to be held by the Public Trustee on her behalf on the same terms.
On 8 October 1984 the wife contracted to purchase the property at S for $55,000.00 (“the S property”). The purchase price was paid by the wife from her own funds.
In June 1985 the parties’ child was born.
On 17 February 1985 the wife and the deceased purchased the fishing vessel “K” and fishing licence for $16,000.00 funded by them equally. Thereafter, “K” and the fishing licence were operated by the deceased.
In 1986 the husband commenced to operate “K” and the fishing licence.
On 1 June 1986 the husband was discharged from bankruptcy.
On 16 July 1991 the deceased made his last will and testament. The second respondent was appointed in the will as executor and trustee.
In 1991 “K” sunk whilst under the operation of the husband. “K” was repaired and refloated and continued to be operated principally by the husband.
In late 1997 “K” was sold for $6,000.00.
In November 1997 the wife and the deceased received an insurance redemption on “K” in the sum of $17,150.00. It was paid to the husband’s father.
In about 1997 the fishing vessel “V” was purchased for $16,000.00 funded by a first mortgage advance over the S property.
On 25 August 1998 the wife and the deceased unsuccessfully applied for scalefish A Wrasse and Morwong fishing licence. On the same date the husband unsuccessfully applied for the same licences.
On or about 16 November 1998 a transfer by the wife and the deceased of their current fishing licences to the two of them and the husband was executed.
On 10 December 1998 the last-mentioned transfer was approved.
In 1999 the wife and husband purchased the fishing vessel “E” for $55,000.00 from Hearst Pty Limited, a company controlled by the husband’s father. The vendor fully financed the purchase price.
In September 1999 “V” was sold for $18,000.00. The net sale proceeds were paid to the husband’s father or his company
In September 2001 “E” was sold for $45,000.00. The sale proceeds were paid to the husband’s father’s company.
In November 2001 the wife received net compensation of $78,198.00. There was an absence of direct evidence regarding the wife’s utilisation of that amount. I infer from other evidence that it was used to pay living expenses, liabilities and possibly gambling expenses.
On 12 November 2002 an overdraft facility of $10,000.00 was granted to the wife by Westpac Banking Corporation Limited secured by its mortgage over the S property. At that time there was an outstanding business loan secured by the same mortgage.
On 10 May 2003 the wife entered into a contract for sale of the S property for $162,000.00. The net proceeds of sale of $62,209.00 were applied by the wife to pay debts.
In June 2006 the deceased passed away.
On 10 January 2007 probate of the deceased’s last Will and Testament was granted to the second respondent. That Will provided for the whole of the residuary estate to pass to the mother of the wife.
Relevant legal principles
It is now well established that generally speaking the approach to be taken to determination of property settlement proceedings, concluding with an order that is “just and equitable”, represents four steps.
The first of which is that the Court should determine the property and financial resources of the parties at the date of the hearing.
Secondly, determine the nature and extent of the respective contributions made by each of the parties whether financial or non financial, including contribution to the welfare of family in the role of home-maker and parent.
Thirdly, determine and assess the relevant matters pursuant to s.75(2).
Fourthly, consideration of orders, if any that should be made that are just and equitable.[2]
[2] Hickey & Anor and Attorney-General for the Commonwealth (2003) FLC 93-143
I will now proceed to make findings in relation to the property of the parties, their respective financial and non-financial contributions and relevant matters (if any) pursuant to s.75(2) of the Act.
Property of the parties
Exhibit 23 is an agreed schedule of the property of the parties subject to the issue to be determined in relation to the legal interests held by each of the parties in the “Fishing Licence Package” and the notation with respect to the wife’s alleged entitlements in the “ARF Fund”. That schedule is reproduced as follows:
“Home Net proceeds of sale $44,895.00 (Husband claims $44,895.00 should be added back. Wife claims nothing should be added back) Motor vehicles Wife Husband Toyota Dyna truck (Husband) *E$7,990.00 *E$3,750.00 Daewoo Nubira wagon (Wife) *E$5,000.00 *E$10,000.00 Fishing Licence Package $160,696.78 Chattels Wife Husband Wife’s possession *E$1,500.00 *E$12,000.00 Husband’s possession *E$3,650.00 *E$1,500.00 Net proceeds of monies held in trust from lease of licences $5,814.63 Less Primus loan on Wife’s vehicle (now repaid by Husband) Nil Husband’s debt to [Hearst] Pty Ltd (Wife disputes) $13,696.00 Sub Total $224,960.41 Superannuation Husband (all acquired post separation) $11,417.00 Wife (all acquired prior to separation) ARF $960.00 Sub Total $12,377.00 Total $237,337.41 NOTATION: Query Wife’s ARF Fund”
Exhibit 23 – disputed items
I make findings in relation to the disputed items in Exhibit 23 as follows.
“Fishing Licence Package” - $160,696.78
The wife and the second respondent challenged the legal interest that the husband claims as a result of his name appearing as the holder of the fishing licences together with the wife and the second respondent as a consequence of him being added as a joint holder of the fishing licences on 10 December 1998.
The “Fishing Licence Package”, the centre of controversy in these proceedings, comprises:
(a) Fishing licence (vessel) 0-10 metres - $2,000.00.
(b) AFMA Gillnet permit and quota - $15,000.00.
(c) Fishing licence (Wrasse) - $43,000.00.
(d) Fishing licence (scalefish B) - $20,000.00.
(e)AFMA Gillnet permit with current Gummy Shark quota of 3,284 units - $80,969.00
(f) Total value of “Fishing Licence Package” is $160,696.00
It is relevant to consider the legislative regime in relation to the fishing licences. That legislative regime is not in controversy.
Counsel for the wife helpfully summarised the legislative regime as follows:[3]
“a)Prior to 1990 the fishing regime commercially for scalefish and shark species in Tasmania was ‘open slather’ in that no specific fishing licence was necessary or available. All that was required was for a fisher to hold a Fishing Licence (Vessel).
b)In 1990 the Tasmanian State Government introduced a licencing system for shark species. The Applicant and the Second Respondent participated in a ‘show cause’ review process and were issued a Fishing Licence (Shark Gillnet) with 2 nets of 500 metres in length each.
c)Shark (Gillnet) licences or Shark (Hook) fishing licences were non-transferable.
d)On 1 November 1998, the Scalefish Management Plan was introduced. The Plan allowed for the issue of a Fishing Licence Scalefish in one of three categories, named A, B or C and/or specific fisheries licences depending upon a prior catch history. The Applicant and the Second Respondent were issued with a Fishing Licence Scalefish (Category B) (Entitlement No. […]) and a Fishing Licence (Wrasse) (Entitlement No. […]).
e)On 1 January 2001, as a result of an Offshore Constitutional Settlement, the Australian Fisheries Management Authority (ie, being the Commonwealth) took over responsibility for the Southern Shark Fishery. The parties (including the Respondent whose name was added to the licences on 10 December 1998) made application to AFMA for a Commonwealth Permit to allow them to fish for shark in state waters (ie, within 3 nautical miles of the low tide mark). Again, a prior catch history was required to be eligible for an allocation of seasonal quota to attach to the permit.
f)The prior catch period was a fisher’s best three years between 1 January 1993 and 31 December 1997.
g)The parties were allocated about 2.5 tonnes of seasonal quota.”
[3] The applicant and second respondent’s case summary document filed 28 September 2007
The following is my review of the material evidence given by and on behalf of the parties, with my findings.
The affidavit evidence of the wife is that until 12 December 1998 the fishing licences were jointly in the names of the deceased and herself. The husband’s name had been added so that the three of them were recorded as holders of the fishing licences on 10 December 1998. No consideration was paid by the husband. Annexure “U” to the wife’s affidavit is a letter dated 24 January 2005 from Ms A of S Marine Pty Limited to the wife’s solicitor. That letter stated that the original licence package held in the names of the wife and the deceased was transferred into their names and that of the husband on 12 December 1998. A copy of the transfer dated 23 November 1998 and signed by those three persons on 16 November 1998 was enclosed with that letter. The transfer was endorsed with official entries by the appropriate authorities and also as a record of what appears to a registration fee of $100.00. There is an absence of evidence, let alone any allegation, that all or any of the signatures are not genuine signatures. The date “12 December 1998” is incorrect. It should be “10 December 1998” as appears from the copy of the transfer which is part of annexure “U”.
The wife’s further affidavit evidence was that the relevant documentation was signed by her and the deceased in circumstances whereby Ms A neither fully explained the reasons for the transfer nor did they understand such of the reasons given by her. It was further alleged by the wife that in or about December 1998 Ms A informed the two of them that the husband’s name was required to be added to the fishing licences “if they were to be renewed”.
The wife contends that she now had knowledge that she did not possess at the time when the transfer was signed, that the husband did not have to be added as an owner because he was able to fish the fishing licences as he was an authorised skipper. In that regard, the wife annexes to her affidavit as annexure “V” the copy of a letter dated 10 November 1998 from the Director (Marine Resources) Department of Primary Industries Water and Environment to Ms A.
The wife further contends that there was no need to add the husband’s name to the fishing licences as he was no longer actively fishing those licences having ceased that activity in 1991.
The wife gave further evidence-in-chief, during the course of which she stated that the transfer of an interest to the husband was due to a request by Ms A who had informed her and/or implicitly the deceased that the transfer was needed by the relevant authority. The wife stated that her view at the time was that the husband was an authorised skipper of the vessel and not gaining an interest in the fishing licences. That evidence was reiterated by the wife during the course of cross-examination. The wife also gave evidence that the husband was authorised to be the skipper.
The wife stated that she had not authorised the transfer of an interest in the fishing licences to the husband. The wife stated that she had made a complaint to the relevant authority in relation to the husband’s name appearing on the fishing licences.
An affidavit of the deceased sworn 2 December 2005 and previously filed in the Supreme Court of Tasmania was read on behalf of the wife, without objection, save and except in relation to that part of paragraph 3 after the word “boat” to the end of the paragraph was objected to and then struck out.
The affidavit evidence of the deceased was that he was at no time was requested to transfer any of his interest in the fishing licences to the husband and would have refused any such request had it been made. The deceased stated that he did not know how the husband’s name “came to appear as co-owner” and there had never been any agreement to transfer any interest in the fishing licences to the husband nor was any consideration or money agreed to be paid, or actually paid.
The deceased further contended that his understanding was that the transfer into the husband’s name in conjunction with the wife and himself “was a result of erroneous advice received from Mrs [A] of [S Marine] ‘a fishing broker’”.
The deceased contended that he had always held a half interest in the fishing licences and “continued to assert such an interest”.
The deceased further stated that in his view, following the introduction of quota, it was no longer necessary that the ARMA Gillnet permit be fished by the owners and that the quota itself was capable of being transferred and fished by third parties.
The deceased had passed away prior to the commencement of the hearing before me.
The wife’s brother, a professional fisherman, swore an Affidavit on 30 May 2007 which was filed on 31 May 2007. In that affidavit the wife’s brother stated that the deceased had told him on many occasions that the deceased’s half interest in the fishing licences would be left to him upon his death or that of his mother.
The wife’s brother was not cross-examined in relation to that evidence.
The wife’s mother swore an Affidavit on 30 May 2007 which was filed on 31 May 2007. Her affidavit evidence was that she disputed that there had been any gift by the deceased of his interest in the fishing licences. The deponent was not required for cross-examination.
The husband swore an Affidavit on 7 March 2007 filed 31 May 2007. In that affidavit the husband stated that he and the wife had discussed, for some time, the topic of his name “being on the licences”. The husband further contends that in August 1998 they raised this matter with Ms A who then sought and obtained departmental approval, prepared the transfer which was signed by him and the wife at Ms A’s home and witnessed by her. The husband further contends upon leaving Ms A’s home with the transfer the wife took it to the deceased who signed it and the wife then returned it to Ms A.
During the course of the husband’s oral evidence, he stated that he was unable to say who had prepared the application for the transfer to him of an interest in the fishing licences. The husband acknowledged that as an authorised skipper he did not have to be added to the fishing licences.
Affidavit evidence was also given by Ms H whose Affidavit was sworn on 16 February 2007 and filed 31 May 2007. Ms H is the quota manager for the Australian Fisheries Management Authority. Her evidence was not relevant to the issue dealt with at this stage of the judgment. The deponent did not give oral evidence.
An Affidavit was sworn by Mr W on 1 March 2007 filed 31 May 2007. Mr W’s occupation is that of senior officer (licensing and operations) for the Department of Primary Industries & Water in Tasmania. He had been employed with the licensing section since 5 November 1998 and the officer responsible for records in relation to commercial fishing operations within Tasmania.
Mr W stated that on 25 August 1998 the husband applied for a fishing licence (scalefish A), fishing licence (Wrasse), and fishing licence (Banded Morwong). The application was refused on the basis that the husband did not hold a fishing licence (vessel).
Mr W further stated that on 10 December 1998 an application to transfer the “Fishing Licence Package” from the wife and the deceased to the husband, the wife and the deceased was approved.
Mr W also stated that subsequent to legislative changes on 1 November 1998 an applicant had to be the holder of a fishing licence (vessel) and have a catch history to qualify for a scale fish species specific licence and most scale fish licences. In addition, the catch history was assigned to the licence from which the fish were taken and not to the fisher who actually operated the licence.
Mr W also gave affidavit evidence that if there had not been a recorded catch history by a fisherman, in this particular instance the husband, the licences and applications to which he earlier referred would not have been successful, although a scale fish licence of a lesser category would still have been issued.
During the course of his oral evidence, Mr W stated that licences must be attached to a licensed fishing vessel and cannot exist on their own account.
In relation to the crucial application for transfer by the wife and the deceased of their joint interest in the fishing licences to both of them and the husband, Mr W stated that the appropriate authority was not privy to terms of the “partnership” and in any event was only concerned with the names on the licence to be licence holders.
Mr W gave further evidence that there was no department policy in relation to an interest being held as joint tenants and/or tenants in common at the time of the subject transfer.
Mr W stated that it was not necessary for an authorised skipper to be added to the licences and that a catch history was not required for that purpose.
Ms A swore an Affidavit on 6 March 2007 filed 31 May 2007. Her occupation was given as company director. Ms A stated that she is a marine broker conducting business through S Marine Pty Limited of which she and her husband are the sole shareholders and directors and that has been the position since 1998.
The affidavit of Ms A gave her many years of experience in the fishing licensing area in Tasmania.
Ms A stated that in 1998 the wife and husband attended her in relation to the transfer of licences into the names of the wife, the deceased and the husband. Ms A stated that she sought department approval for the transfer which was subsequently given by its letter dated 10 November 1998.
Subsequent to obtaining departmental approval, Ms A prepared the transfer document. The husband and wife attended her home where they signed the transfer and both signatures were witnessed by Ms A.
Ms A stated that upon the wife and husband signing the transfer document, it was taken away by them to be signed by the deceased and was then returned to her with the deceased’s signature. A stamp duty exemption was obtained. The transfer document and related documents were then lodged by Ms A with the department. A new licence was then issued in the names of the wife, the husband and the deceased.
Ms A contends that it was not until many years later that the next occasion of the issue of the transfer document was drawn to her attention. That was upon receiving a letter dated 13 December 2004 from the wife’s solicitors. A copy of that letter is annexure “C” to the affidavit of Ms A. The letter sought a detailed explanation in relation to “the circumstances of the transfer and why it took place”.
Ms A replied by letter dated 24 January 2005. A copy of that letter is annexure “D” to her affidavit. In relation to the explanation sought, Ms A stated in her letter “with regards to the circumstances of the transfer, I was asked by both [the husband] and [the wife] to undertake the task of transferring the licence into the joint names which was done as requested”.
During the course of Ms A’s oral evidence, she reiterated that the wife and husband came to see her in August 1998 and that she wrote on behalf of the wife as a part licence holder. Ms A stated that she had not received instructions from the deceased.
Ms A further confirmed that part of her affidavit evidence in which she had stated that she had sought the marriage certificate from the wife and husband so that the transfer could be marked exempt for stamp duty purposes due to the matrimonial relationship.
Ms A further stated that:
“…an authorised skipper does not need to be part owner of the fishing licence. The transfer proceeded as he was the skipper and married” [to the wife].
Ms A’s further evidence was that she did not say to the wife that the department required the husband to be a licensee as the skipper.
Ms A also gave evidence that she was the broker for the husband’s father’s company which was a longstanding client. It was not suggested to Ms A that she had a conflict of interest or that she had failed to carry out her responsibilities in relation to taking instructions from the wife and husband, preparation of the transfer and lodgement of it with the relevant department.
Evidence was also given by Michael John Crisp, legal practitioner in his Affidavit sworn 6 August 2007 filed 8 August 2007. Mr Crisp was not required for cross-examination.
Mr Crisp stated in his affidavit that he acted for the husband and wife in relation to a fishing licence appeal in 1999. The relevant licences were held in the names of the husband, wife and deceased. Mr Crisp stated that he had never received instructions that either of them “was not or should not be one of the holders of the licences”. Mr Crisp further stated that he did not receive instructions direct from the deceased.
An Affidavit was sworn by Glenn Alan Hay, barrister on 6 August 2007 filed 8 August 2007.
Mr Hay stated in his affidavit that he first acted for the wife and husband in November 1997. Instructions were received by them in relation to a claim concerning a breach of a lease agreement for the vessel “K”.
Mr Hay further stated in his affidavit that in early January 1998 he received instructions from the wife and husband to make representations on their behalf to the relevant Minister to a draft Scalefish Management Plan. Mr Hay stated that those instructions “were on the basis that they jointly held various fishing licences and entitlements”.
Further evidence was given in Mr Hay’s affidavit that he had little more to carry out in relation to the matter until 12 November 1998 when the wife and husband attended his office and gave instructions to again write to the Minister. He stated that at time he first became aware that the deceased had any interest in the fishing licences and entitlements. Mr Hay treated the wife and husband as his clients and assumed that they were instructing him on both their own account and that of the deceased.
In his affidavit, Mr Hay denied that he acted unilaterally on the instructions of the husband only, and that the wife “was primarily and very directly involved with providing instructions whether in person or by telephone”. Mr Hay further emphasised that the representations he made to the Minister were based upon instructions received from both the wife and husband. It is implicit from other parts of Mr Hay’s affidavit that at all times he contended he was receiving instructions from both of them, not only for themselves personally but also on behalf of the deceased. Mr Hay concluded by stating in his affidavit that he was unaware of either the wife, the deceased, or the wife’s mother “having objected in any way to the submissions made in my letter of 13 November 1998 to the Minister before mid-March 2007”. The latter was the date when Mr Hay received a communication from the husband’s solicitor. Mr Hay had previously received one or two telephone calls from the wife’s solicitor in relation to a possible appeal to the High Court in relation to the refusal by the Minister to approve certain fishing entitlements. I accept Mr Hay’s evidence and that of Mr Crisp.
The evidence of Ms A is crucial to resolving the conflict of evidence as between the husband on the one hand, and the wife and deceased on the other. The reason is that the case for the wife is that she did not receive from Ms A either a full explanation for the reasons for the transfer, nor did the wife understand such of the reasons that were given to her. In addition, the wife contends that there was no commercial reason for a transfer of the interest to the husband taking place. Part of that evidence is supported by the affidavit evidence of the deceased.
I accept the evidence of the wife regarding the lack of any commercial imperative for the transfer to the husband of an interest in the fishing licences. That was supported in essence by the evidence of Ms A, although the evidence of Mr W suggests that there may well have been a commercial reason for that transfer being completed.
However, the undisputed facts are that the transfer was completed, executed and recorded.
That had the effect of transferring a third interest in the fishing licences to the husband. No complaint or query was raised by the wife and/or the deceased for many years. No evidence was given to explain the absence of those matters.
There is no evidence, let alone any allegation, that both or either of the signatures of the wife and deceased were forged or, that their actions in completing and signing the transfer were induced by fraud or duress.
I accept the evidence of Ms A that both the husband and the wife called upon her at her home for the purpose of seeking advice and giving her instructions for the preparation of the transfer and the subsequent lodgement of the completed and signed document with the relevant departmental authority. A possible explanation on the evidence before me, particularly that of the husband, is that irrespective of any misconceived view of the commercial advantages of a transfer to the husband of an interest in the fishing licences, he and the wife attended and gave instructions to Ms A because of the marriage relationship between them and as a means of formally recording the “partnership” in that personal sense as well as continuing to recognise the relationship and the commercial assistance provided by the deceased.
Should the wife have been misled in any way by Ms A and/or others, then that is a matter for her to obtain legal advice as to any remedy that she may have and the prospects of success. The second respondent is in a similar position.
Revised property of the parties
Home – net proceeds of sale - $44,895.00
It is contended on behalf of the husband that this is the remaining balance after concessions on his behalf with regard to reasonable expenditure.
I do not accept the submissions on behalf of the husband. Although, I will subsequently deal with this matter of the application of the net proceeds of sale of the S property, so far as contributions by the wife are concerned, I have concluded that all of the expenditure was reasonable given the matrimonial relationship and the parties’ lifestyle, there not being any evidence of substance which suggested that the wife’s expenditure was extravagant, wanton or reckless.
If a different approach had been taken then no doubt an analysis of “cash applied to debt incurred by [the husband] - $13,815.00” may have fallen for greater scrutiny, especially given the gambling activities that the husband engaged in as well as the wife. Therefore, a global picture must be drawn which reflects reality in terms of the relationship as then displayed between husband and wife for the purpose of concluding whether the expenditure was reasonable in these circumstances as opposed what might have been not regarded as reasonable so far as others are concerned.
Consequently, this amount will not be notionally included in the calculation of the net property of the wife and husband.
Loan from the wife’s brother - $8,500.00
I accept the submission that this is a “loan” which is now statute barred. I will take it into account as an indirect financial contribution made by the wife.
Therefore, it will not be included in the calculation of the net property of the wife and husband.
Half interest in insurance and sale proceeds “K” vessel - $11,575.00
This is a matter which also is relevant only to contributions, rather than being given a different status for the purpose of the calculation of the net property of the husband and wife. As a result it will not be included.
Husband’s debt to Hearst Pty Limited - $13,696.00
I will not include this indebtedness for the following reasons.
The history of the husband’s personal and financial relationship with that company, controlled by his father, is that he has received financial support from those sources for considerable amounts of money from time to time. For a substantial period, that was against a background of the husband’s known gambling activities. Any indebtedness was never enforced in the sense of legal action or threat of legal action. Rather, payments were made from time to time by the husband and wife in partial satisfaction of outstanding indebtedness. There is no evidence of substance before me which suggests that a different approach will be taken to this current indebtedness of the husband.
Wife’s receipt of “ETP” – net $39,060.37
Exhibit 22 shows payment of an assessable amount of $40,260.00. It is not disputed that following the deduction of costs of $1,200.00, the wife received net $39,060.37.
The wife received the net amount early in 2005 following representations made by solicitors on her behalf.
The evidence discloses that the wife has been living in straitened financial circumstances both prior and subsequent to the payment being received in 2005. Although, it is to her discredit as a truthful witness that she in fact has engaged in employment from time to time, that employment has been for spasmodic periods as a part-time casual carrying out cleaning work with modest earnings whether considered before or after tax. The wife has also suffered from serious health problems notwithstanding the employment in which she has been engaged. The undisputed medical evidence makes that clear.
I take into account money lent to a friend, as yet unpaid. I have concluded that in all of the circumstances to which I have referred the relevant amount will not be included as the wife’s notional property for the purpose of calculation of the net property of the wife and husband.
So far as gambling is concerned, I accept the wife’s evidence that gambling activities in recent years have been carried out to a significant degree by family members utilising her card. Given the wife’s long history of gambling, I am satisfied on the balance of probabilities that she has also continued gambling from time to time. On the evidence before me, it is not practical to carry out even on an approximate basis an analysis of money that should be considered separately as being sourced to the wife’s ETP payment.
Consistent with my findings and conclusions arising out of disputed items in Exhibit 23, I find that the property of the wife and husband is as follows:
Motor vehicles Toyota Dyna truck (Husband) *E$7,990.00 *E$3,750.00 Daewoo Nubira wagon (Wife) *E$5,000.00 *E$10,000.00 Fishing Licence Package $117,131.00 Chattels Wife’s possession *E$1,500.00 *E$12,000.00 Husband’s possession *E$3,650.00 *E$1,500.00 Net proceeds of monies held in trust from lease of licences $5,814.63 Less: Primus loan on wife’s vehicle (now repaid by husband) Nil Superannuation Husband (all acquired post separation) $11,417.00 Wife (all acquired prior to separation) ARF $960.00 Second respondent Interest in fishing licence package – one-third interest $53,565.00
Contributions
I make the following findings in relation to the financial and non-financial contributions of the husband and the wife, including contribution to the welfare of the family in the role of homemaker and parent.
The wife
The initial contributions of the wife, having regard to her unchallenged affidavit evidence, are as follows:
(a)Nissan motor vehicle purchased during the previous few years at a cost of about $20,000.00. The market value of the motor vehicle at the commencement of cohabitation was not given.
(b)A half-interest in a fishing licence and the vessel “K”. Those interests had been acquired jointly with the deceased in about 1983 for a total cost to the wife of $16,000.00. The market value of the fishing licence and “K” at the commencement of cohabitation was not given.
(c)The S property purchased in October 1984 for $55,000.00 plus costs. The S property was unencumbered. The market value of the S property at the commencement of cohabitation was not given.
(d)Funds of about $10,000.00 to $15,000.00.
(e)Furniture, furnishings and personal effects.
The wife’s estimate of her total net “worth” at the commencement of cohabitation was about $100,000.00. There is no evidence that disputes that amount, nor was the wife cross-examined in relation to it.
During the period of cohabitation the wife made the following financial contributions in different areas.
The wife joined in with the deceased in permitting the husband to operate the vessel “K” and the fishing licences with the consequential benefit to both of them from the income so derived.
The wife joined in with the husband in the purchase of the vessel “V” for $16,000.00. That purchase was only able to take place as a result of mortgage security granted by the wife over the S property in relation to the fully funded bank finance.
The wife permitted the lease of the vessel “K” with the resulting income for the benefit of the husband and wife.
The wife received an insurance redemption of $17,150.00 in relation to the vessel “K” and that amount was paid to the husband’s father. Financial resistance was also provided by the wife’s brother.
The subsequent receipt by the wife of $6,000.00 by way of the sale proceeds of the vessel “K” were applied by her towards meeting family living expenses.
The wife permitted the lease of the current fishing licence thereby engendering income for the benefit of the family.
The wife joined in with the husband in obtaining a bank loan of $20,000.00 to assist him in the fishing activities. That loan was secured by mortgage over the S property.
Following the sale of the vessel “V” the wife received $18,000.00 which was paid by her to the husband’s father or his company.
The wife joined in with the husband in the purchase of the vessel “E” from the husband’s father’s company Hearst Pty Limited for $55,000.00 paid by vendor finance.
In 2002 the wife joined in with the husband in obtaining a bank overdraft facility to assist the husband in his fishing activities. That overdraft was secured by mortgage over the S property.
In May 2003 the wife sold the S property for $162,000.00. The net proceeds of sale received by her was $62,209.38 disbursed or applied by her as particularised in paragraph 66 of her affidavit. Much of that expenditure related to living expenses, overseas travel, payment of liabilities, funds of $2,500.00 paid to the wife’s daughter of her prior marriage, and $4,500.00 for the benefit of the daughter of the husband and wife. In addition, $13,815.00 was applied to discharge debts allegedly incurred by the husband.
The wife was engaged in employment until 28 November 1998 when she suffered a workplace injury. I infer that the income earned by the wife was applied by her to meet living and lifestyle expenses. The wife received a net workers compensation payment of $78,198.00. There is an absence of evidence that shows the utilisation by the wife of that amount. I infer from the evidence in general that it was used to pay for living expenses, liabilities, and perhaps gambling.
The wife made the primary, if not exclusive, contribution in the role of homemaker and parent.
The husband
The husband’s financial contributions at the commencement of cohabitation were negligible as he was not an undischarged bankrupt.
The husband subsequently made a variety of financial contributions.
Both the husband and wife jointly purchased a house in Y (“the Y property”) for $34,000.00. The purchase of the Y property was funded by joint savings of $5,000.00, $7,000.00 first home owner’s grant to the husband, and the balance by way of mortgage loan. The Y property was sold in the following year. The oral evidence of the husband is that there was only “a few dollars profit”. I accept the husband’s evidence. No contrary evidence was given by the wife.
The husband operated the vessel “K” and successive fishing vessels. I infer that the income earned by the husband was applied towards living expenses and other lifestyle commitments.
The husband has paid fishing licence fees from time to time.
The husband made indirect financial contributions as a result of financial assistance received from his father and/or his company Hearst Pty Limited for the benefit of the husband and wife. That financial assistance included initial funding for the purchase of the vessel “V” subsequently repaid; payment of outstanding tax; gambling debts; credit cards; and mortgage instalments; amounting to $60,158.00 of which $53,584.00 was subsequently written off.
In addition, further financial assistance was provided to the husband and wife by the company controlled by the husband’s father, Hearst Pty Limited.
No evidence was given by the husband in relation to his contribution in the role of “homemaker and parent”, other than his oral evidence that he cooked meals with the wife.
Assessment of contributions
I have assessed the respective contributions of the wife and husband as 60% in favour of the wife and the remaining 40% in favour of the husband for the following reasons.
Arriving at the assessment to which I have referred, I have balanced the nature and significance of the respective contributions and taken a global approach.
The wife made significant initial financial contributions represented by the S property unencumbered, a motor vehicle, savings, a half-interest in the relevant fishing licences, and the vessel “K”, together with items of personalty with a total uncontested value of $100,000.00.
Those initial financial contributions played a prominent part throughout the period of cohabitation.
The S property was utilised by the husband and wife as their home throughout almost all of the period of their cohabitation. It was fully furnished.
The wife’s half interest in the relevant fishing licence and the fishing vessel “K” was able to be utilised to produce financial benefits for the husband and wife, albeit with the active involvement by the husband as a professional fisherman.
Subsequent financial transactions were only able to be completed as a result of the wife owning the S property. Those transactions included mortgage security for the funding provided for the purchase of the vessel “V”; a bank loan of $20,000.00 secured by a mortgage over the S property; and a bank overdraft facility presumably secured by the same mortgage.
In addition, the wife inferentially utilised her workers compensation payment, indirectly if not directly, in material respects for the benefit of the husband and wife with certain exceptions to which I have earlier referred.
The wife also applied the insurance redemption of $17,500.00 in relation to the vessel “K” and the sale proceeds of that vessel to satisfy indebtedness to the husband’s father or Hearst Pty Limited and otherwise for living expenses.
The wife made the primary, if not exclusive, contribution in the role of homemaker and parent in relation to the child of the husband and wife.
I have not included any contribution in that category in relation to the wife’s two children from her former marriage consistent with the Full Court’s judgment in Robb and Robb.[4]
[4] Robb and Robb (1995) FLC 92-555
The wife’s initial financial contributions to which I have referred must also be seen in terms of the weight attributed to them through their use for the benefit of the husband and wife against a background where at the commencement of cohabitation the husband was an undischarged bankrupt and subsequent to his discharge from bankruptcy did not acquire assets of significance whether in terms of real estate, fishing licence, or otherwise. Indeed, were it not for the indirect financial benefit that the wife was able to gain for the husband and herself as a result of her relationship with the deceased who was for many years a half owner of the fishing licences, the full extent of the financial benefits that the husband and wife received could not have been achieved. The deceased’s consent, notwithstanding the controversy surrounding it, was necessary to enable the husband to gain an interest in the fishing licences in 1998.
As previously stated, the wife’s contributions must be balanced against the contributions made by the husband.
For most of the period of cohabitation, the husband carried out his occupation as a professional fisherman. That work was at times performed in arduous conditions. The income, albeit modest, was applied to meet living expenses and the parties’ lifestyle.
The husband made significant indirect financial contributions due to the ongoing significant financial support provided by his father and Hearst Pty Limited. Those contributions were particularly important having regard to a combination of the modest income of the husband and wife, their inability to meet liabilities from time to time, and last but far from least, the erosion of their financial position due to the extent of their gambling activities.
I also take into account the fishing vessel opportunities that were provided for the benefit of the husband and wife by the husband’s father and Hearst Pty Limited.
I accept the undisputed evidence of Mr V that in total $60,158.93 was lent to the husband and wife by Hearst Pty Limited of which $53,584.78 was written off.
I have concluded that the weight I give to the wife’s initial financial contributions in particular[5] combined with her other contributions to which I have referred, results in a greater contribution entitlement in the wife’s favour compared to that of the husband, notwithstanding the important indirect financial contributions that he made, which I have described and summarised.
[5] Pierce and Pierce (1999) FLC 928-844
Relevant matters pursuant to s.75(2)
The following are my findings in relation to relevant matters pursuant to the provisions of s.75(2).
As at the completion of evidence in these proceedings the wife and husband were 47 and 43 years of age respectively.
The husband has good health.
The wife is in receipt of a disability pension. Implicitly, the wife’s health is unsound. There is medical evidence before me in relation to the wife’s health.
An Affidavit of Dr D, medical practitioner was sworn on 4 October 2007 which annexed his report dated 25 September 2007 a copy of which is also Exhibit 1. I accepted Dr D’s evidence, although it was adduced on either the first or second day of the hearing on the basis that there be an opportunity for the wife to be examined by a medical practitioner nominated by the husband.
The affidavit of Dr D includes his evidence that he has been the treating medical practitioner for the wife between 1999 and the date of his affidavit. Exhibit 1 referred to Dr D’s diagnosis in 1999 that the wife suffered a cervical disc prolapse at C5/C6 level on the left side. Subsequently, the wife underwent operative treatment on 8 December 1999 and on 10 July 2001. In addition, the wife has undergone various non-operative procedures. At the date of his report Dr D expressed his diagnosis that the wife has “chronic neck and arm pain, along with altered sensation and dysaethesia in the left arm” and that her medical condition was complicated by secondary depression and insomnia. Medication was being taken by the wife.
Dr D gave his prognosis that the wife:
“…was unable to work because of her chronic neck and arm pain and left hand weakness. This situation is unlikely to improve over time.”
Dr D referred to the wife awaiting further operative treatment for the removal of her gallbladder.
The husband’s nominated medical practitioner is Dr T, consultant occupational physician. Pursuant to directions made by me, Drs D and T conferred and provided a joint statement dated 12 November 2007 which is Exhibit 4. I summarise Exhibit 4 as follows:
(a)Agreement that the wife has chronic pain affecting her neck, left shoulder and left arm, and suffers from depression. The wife is required to take medication. The wife’s ongoing disability “handicaps her from performing [many aspects] of her normal cleaning duties”. (Emphasis added)
(b)There are no medical issues which are the subject of this disagreement.
(c) The wife’s capacity for future employment “appears to be poor”.
Subsequently, an Affidavit was sworn by Dr T on 6 March 2008 filed 7 March 2008. Dr T raised matters of concern having regard to documents provided to him in relation to the wife’s possible employment history which was different to the one which he had previously received from her and upon which his earlier reports were based. Annexure “D” to Dr T’s affidavit is his further report dated 5 March 2008. On the information that Dr T furnished, he concluded that the wife “is capable of performing income generating activity and that she has not been disabled to the extent that she had reported”. That was a reference to previous information that the wife had not worked since 1998. Dr T concluded that “it is clear that she has the capacity to participate in income generating activity as a cleaner on a full-time basis”.
Drs T and D conferred again. As a result, they produced a joint report dated 18 March 2008 which is Exhibit 9. The material features of Exhibit 9 are as follows:
“(a) If the work history, as presented to us, is judged to be a true and accurate account of [the wife’s] employment since her injury in November 1999, and the volume of work and/or type of duties performed exceed her assumed working capacity, then we would change our statement from the 12/11/2007, regarding her ongoing disability and impairment from performing many aspects of her normal cleaning duties. This would mean that she has, at the very least, capacity to perform part-time employment.
(b) If, however, the work history, as presented to us, is judged not to be true and accurate account of [the wife’s] employment since her injury, in that the volume of work or type of duties actually performed concurs with our assessment of her level of impairment, then we would not alter our statement from the 12/11/2007.”
I accept the joint medical evidence contained in Exhibit 9 and make findings in accordance with it.
Upon the resumption of the hearing this year following an order which allowed the husband to re-open his case, evidence was given in relation to the wife’s alleged work history subsequent to the separation of the parties, which of course was relevant to the weight to be given to Exhibit 9, and potential findings with regard to her capacity to earn income.
An Affidavit of Mr B was sworn on 6 March 2008 filed 7 March 2008. Mr B is a manager of T Organisation at Hobart and has held that position since 1 August 2000. Mr B stated that from January 2006 until middle of 2007 he saw the wife performing cleaning duties during stated hours on Mondays and Fridays. He could not recollect the number of occasions that he saw the wife performing those duties. Mr B stated that on some occasions he would see others performing the work, sometimes one or two people carrying out such work. Mr B saw the wife last performing cleaning duties in about the middle of 2007, although in a contradictory way his affidavit subsequently refers to the wife’s contract having concluded when “she stopped providing the services in February 2007”. Some of the other people who Mr B saw performing work included the wife’s sister and the parties’ daughter.
Mr B was cross-examined. He stated that Ms G, administration manager with his employer oversaw work done which included cleaning work. He was not directly involved in the management of such work on a daily basis. Mr B was unable to say that he definitely saw the wife vacuuming and mopping floors. He did see the wife clean some dishes and perhaps dusting. He further stated that other staff carried out work in the event of the wife not being there. Mr B recollected that about 50% of the time no-one arrived to carry out the work. The contract was available to the wife for a short period until her mother became available.
I accept the oral evidence of Mr B.
An Affidavit was sworn by Mr F on 6 March 2008 filed 7 March 2008. Mr F has been the general manager of the C Hotel since August 2006.
Mr F stated that the wife was a hotel employee as a housekeeper for the period reflecting the week ending 20 February 2007 to the week ending 22 May 2007. Mr F is unable to say from the hotel’s records that the wife’s duties included cleaning of guest rooms and public areas. He stated that her duties “would have included” vacuuming, bed making and other cleaning. He stated that the wife was employed as a part of a formal return to work program with Centrelink.
Mr F also stated that the wife made a written application for the position at the hotel. A copy of her letter dated 19 January 2007 together with her curriculum vitae was annexed to his affidavit and marked “A”. That letter states that the wife had “in excess of 20 years cleaning experience”. The wife also stated in that letter that she was able to work shifts, seven days a week.
The particular years that reflect the 20 years cleaning experience was not stated. The curriculum vitae gave a work history subsequent to the injury suffered in 1998. That history included employment as a cleaner with different employers including a then continuing position as a cleaner at T Organisation. Mr B was named as a referee.
Mr F gave oral evidence. He stated that he assessed the wife’s capability by a combination of a form that she provided and an interview. Mr F’s further evidence was that the wife was employed as a casual on a three month probationary period. He stated that the hotel records showed the wife as having been employed for three months during the period 20 February 2007 to 22 May 2007. Mr F was not in a position to say if the wife was called upon to carry out work after that period. The wife was paid $18.71 gross per hour.
In re-examination, Mr F stated that had there been a disclosure by the wife of an ongoing problem whereby her health including workers compensation injury prevented her from doing the job then she would not have been offered it.
An Affidavit was sworn by Mr R on 6 March 2008 filed 7 March 2008. Mr R’s occupation is that of supervisor of ED Company conducting business in Hobart and had been employed in that position since 2002.
Mr R stated that he first met the wife approximately two years ago when she commenced cleaning premises on the basis of filling in for her mother who was hospitalised. He described the cleaning duties which included crockery, computer screens, phones, occasionally the floor, dusting desks, and emptying waste paper bins.
Mr R observed the wife performing those duties during the period February 2006 to August 2007, once a week. The hours involved were not stated.
During the course of his oral evidence, Mr R stated that the work performed by the wife was “light duties”. He stated that the wife’s work occupied half an hour to three quarters of an hour, on occasions the wife arrived with another employee, and at times the floor was not cleaned.
An Affidavit was sworn by Mr C on 6 March 2008 filed 7 March 2008. His occupation is that of hotelier and farmer. Mr C is a hotel owner in Hobart as well as committee member of a sporting club.
Mr C stated that he first met the wife in late 2005 when the club was considering the employment of a cleaner. Mr C interviewed the wife and nothing was said by her about any medical condition that could limit her work as a cleaner. Consequently, the wife was engaged as a cleaner from 23 December 2005. He stated that the wife usually worked on Mondays and Friday and her work was performed in a satisfactory manner. Mr C further stated that from about mid-2006 the wife became increasingly unreliable and eventually her services were concluded by agreement on 29 September 2006.
Mr C stated that he did not see another person carry out the wife’s duties.
During the course of his oral evidence, Mr C stated that at times he could not see if a cleaner was actually on the premises carrying out work. Mr C found the wife’s very satisfactory in the first four to five months. Gradually, the wife became unreliable in that she did not arrive at work and stated that her work was of two to four hours duration.
Mr C categorised the work as “light duties”.
Further evidence was given by Ms G by her Affidavit sworn and filed 7 March 2008. The occupation of Ms G is office administrator employed by T Organisation who is also the employer of Mr B. Ms G has been so employed for approximately 10 years.
Ms G stated that prior to February 2006 the wife’s mother had been the contract cleaner for about 12 years. At that time the wife’s mother had to take leave due to her husband being critically ill. Interim arrangements were then made to enable the wife to carry out the cleaning.
Ms G further stated that during the period the wife was to perform the cleaning work, in fact when cleaning work was done it was undertaken principally by the parties’ daughter and the wife’s fiancé. The witness stated that the wife did attend on occasions when she carried out light duties qualified by “most occasions” of her attendance being devoted to sitting with Ms G talking and having coffee and tea whilst others did the work.
Ms G further stated that in about July or August 2007 when the wife’s mother informed T Organisation that she would not be returning to work the employer terminated its contract with the Solare family.
During the course of her oral evidence, Ms G described herself as a work colleague of the wife and not a good friend of hers. The witness stated that the wife performed very limited cleaning services.
The daughter of the wife and husband and her fiancé gave evidence in substance the same as that of Ms G regarding the extent of the wife’s work. I accept their evidence.
The wife gave further oral evidence in this regard. During the course of her evidence she considered that her mental state had deteriorated and found daily life difficult with lapses of concentration with suicidal ideation. The wife sought medical treatment at a medical centre. She has been taking medication in accordance with a health plan prescribed for her. The wife stated that her depression started when the deceased became terminally ill. The wife further stated that two or three weeks beforehand she had a further medical consultation and had consulted a therapist.
The wife stated that on 31 December 2003 she withdrew $20,000.00 to assist a friend who was very ill. It was a loan and $15,000.00 has not been repaid. A claim has been made on the friend’s estate.
With regard to the curriculum vitae annexed to the Affidavit of Mr F, to which I have earlier referred, the wife stated that it was incorrect in that she had not carried out work at the O Hotel and she informed the “lady” that she did not work there.
The wife stated that she had “dressed it up” in relation to her curriculum vitae as she was concerned that as she had been out of work for so long it would look bad otherwise.
In relation to work at the hotel, the wife stated that she performed light duties such as dusting and was not able to carry out ironing and other duties due to the difficulties that she experienced.
I find that the wife has a history in recent years of carrying out light duties in cleaning work on a part-time casual basis with a limited capacity due to her health problems which include recent serious mental health issues.
I find that the income of the wife is represented by her disability pension which in accordance with her financial statement albeit three years old amounted to $265.00 per week.
I find that the wife has the property described in paragraph 124 hereof. The wife does not have other financial resources.
With regard to the wife’s capacity for appropriate gainful employment, it is clear that the wife suffers ill health having regard to the medical evidence to which earlier reference has been made and in particular Exhibit 9. In that regard, I find that the wife has carried out unskilled light duties in the nature of cleaning work from time to time which ceased in August 2007 in accordance with Exhibit 10. The gross earnings generated by her during the historical periods referred to in Exhibit 10 including the hourly rate at which she was paid have been relatively low as illustrated by the earnings of $3,480.00 whilst in the employ of ED Company during the period January 2006 to August 2007.
The husband is a self-employed fisherman. In his Financial Statement sworn 7 March 2007 filed 31 May 2007 the husband revealed a gross income from his occupation of $1,012.00 per week subject to tax of $236.00 per week.
The husband has the property described in paragraph 124 hereof.
The husband has a financial resource represented by the indirect financial benefits that he has received over many years from his father and/or the company he controls, namely Hearst Pty Limited. That has been evident as a result of frequent advances made for his benefit to assist him financially ranging from funds to enable him to meet debts including taxation as well as provision of a fishing vessel so that he could continue to earn income from his occupation.
The husband has the mental and physical capacity to be engaged in gainful employment in his occupation as a fisherman, an occupation in which he is very experienced. Work has been made available to him due to the family connection with Hearst Pty Limited.
The husband has remarried and both he and his partner have a small child. In the absence of contrary evidence I have inferred that the husband supports his partner and their child.
The husband and wife have commitments for his or her support as described in their respective financial statements.
The husband has responsibilities for the support of his partner and their child.
The husband and wife have superannuation entitlements described in paragraph 124.
Each of the husband and wife raise an issue of “waste” in relation to the past gambling activities of the other.
The husband and wife each concede that they did gamble at one venue or the other prior to separation. The real issue is the extent of their respective gambling activities so far as financial losses were concerned.
The evidence of the wife is that she held a silver card issued by E Gaming Venue and that the extent of her gambling had not reached the level where she was offered a VIP gold card, in contrast to that category of card held by the husband.
The wife contends that “our losses were not excessive”.
The husband’s evidence is that both he and the wife had federal rewards cards issued by E Gaming Venue and that the wife also had a similar card issued by the O Gaming Venue, although he did not have one from that venue.
So far as the husband’s evidence is concerned, his affidavit referred to gambling in the terms stated in paragraphs 35 to 38 of the affidavit.
During the course of his oral evidence, the husband stated that they “both had gambling problems”. The husband stated that he used his card every time he went to the E Gaming Venue, but did not hold a card for O Gaming Venue. The husband stated that he hardly ever attended the O Gaming Venue.
During the course of the wife’s oral evidence, she stated that she used her card to obtain points whereas the husband did not always use his. They did not use each other’s cards.
The wife’s evidence is that her card may have been used by her sister or daughter at E Gaming Venue, and that she has not gambled at O Gaming Venue in the last four or five years, and had provided her card to her sister and that she had not cashed in points since about 2003.
Evidence was also given by a number of witnesses called on behalf of the husband.
An Affidavit was sworn by Mr I on 7 March 2007 filed 31 May 2007. Mr I’s occupation is that of security surveillance/compliance with E Gaming Venue. Mr I’s duties included being in charge of gaming compliance at the venue and he is familiar with the gambling activity records at the venue.
Mr I’s affidavit also stated that the rewards membership cards issued to customers are not credit cards but can be utilised for purchase of meals and other activities apart from gambling. He further refers to the venue records dating back to 2001 in relation to the husband and wife which in the former case showed an “expected loss” of $17,196.00 for the three year period up to separation and an “expected loss” for the wife for the same period of $49,833.00 which I have deduced from the total provided by Mr I for a more extensive period.
The affidavit of Mr I qualifies those statistics in two important respects. Firstly, the relevant card does not record jackpot wins and that is the reason for “loss” being termed “expected”, and the venue records do not indicate the person who was the actual user of the card. Brief cross-examination did not detract from Mr I’s oral evidence. Accordingly, I accept the evidence of Mr I and make findings accordingly.
An Affidavit was sworn by Mr M on 27 March 2007 filed 31 May 2007. He holds a similar position to that of Mr I at the O Gaming Venue. Mr M’s duties include overseeing gaming operations and in the course of his duties he is familiar with the venue’s records of gambling activities.
Mr M’s affidavit is the same as that of Mr I in relation to the nature of rewards membership cards and their use. He states that only the wife, as opposed to the husband, has been issued with a card. The venue’s records indicate that for the years 2002 and 2003 a loss was generated in the sum of $8,425.00. It is not clear whether that includes bonus wins amounting to approximately $393.00. Other losses were generated on the card for the years 2005 and 2006. As with Mr I’s evidence, Mr M stated that the card does not record jackpot wins, nor do the records indicate the actual user of the card.
During the course of his oral evidence, Mr M stated that the unrecorded range of jackpots which may be won is from $50.00 to $10,000.00. In addition, the card issued by the E Gaming Venue may be used at O Gaming Venue. The venue’s records are then kept at the place of use. Consequently, I infer that it was possible for the husband to use his E Gaming Venue card at the O Gaming Venue.
Evidence was also given by Mr U. Mr U swore an Affidavit on 13 March 2007 filed 31 May 2007. Mr U is a business management consultant, formerly a bank manager and supervised the banking business of the company controlled by the husband’s father Hearst Pty Limited, as well as being familiar with the financial position from time to time of the husband and wife. Mr U is also an advisor to a number of businesses including Hearst Pty Limited.
Mr U has reviewed records produced by E Gaming Venue in relation to the gambling activities of the husband and wife for the period July 2001 to 27 June 2004. Mr U also had regard to their bank statements.
I summarise the effect of his review, which was that the wife’s card was used on considerably more days than that of the husband; ATM cash withdrawals amounted to $58,616.00 offset by nine credits of $6,700.00; and that on 20 occasions ATM withdrawals were made either on the same day or the next business day when the wife’s card alone was being used. Those withdrawals amounted to $12,326.00 and the venue records for the same period showed $13,542.00 was lost on the wife’s card. In addition, ATM withdrawals at either the O Gaming Venue or in the town of O for 2002 and 2003 totalled $5,400.00 with a credit of $500.00.
Mr U gave oral evidence. During the course of that oral evidence, he stated that he was unaware that the wife was ill during 2003 and had also had engaged in overseas travel implicitly in or about that time. Mr U emphasised that he only analysed data and had no knowledge of the use of card by whoever was the holder of the relevant card, or whether cash passed between the husband and wife.
I accept the evidence of Mr U and make findings accordingly.
Having reviewed the evidence of the husband and wife and the detailed evidence of the witnesses to whom I have referred, albeit that their evidence has been summarised in this judgment, I find that the husband and wife each engaged in gambling activities at E Gaming Venue and I am satisfied on the balance of probabilities that given the nature and places of gambling activities that each undertook, the husband is more likely than not to have also gambled at the O Gaming Venue at the same time or different times to the attendances by the wife at that venue. It was not necessary to use a card for gambling activities.
The evidence that I have accepted demonstrates that relative to their financial circumstances, the husband and wife gambled extensively and incurred considerable losses. It is not possible to have conducted an audit on the evidence in relation to whose losses were greater than the other during the period of cohabitation. Jackpot wins at E Gaming Venue were not recorded. It is also not possible to ascertain whether one of the parties used the other party’s card from time to time, despite the wife’s contrary evidence. Gambling could have occurred without the use of a card, particularly by the husband at the O Gaming Venue. Clearly, it was a joint enterprise for their mutual and individual benefit. Unfortunately, the husband and wife could ill afford the losses that were incurred.
Accordingly, I further find that each of them had wasted much of their available and, at times, scarce funds on gambling at venues to such a degree that it inevitably contributed to the indebtedness which they faced, only relieved to some extent by the direct financial support provided to them by the husband’s father and/or his company Hearst Pty Limited.
Assessment of relevant s.75(2) matters
In considering my findings with respect to relevant matters that arise under s.75(2) I have concluded that there will be an adjustment of a further 10% of the net property of the wife and husband for the following reasons.
Fortunately, the husband has good health. In contrast to the husband, the wife’s health is poor. The undisputed medical evidence to which I have earlier referred makes that clear.
I have concluded that that is the position regardless of the wife having carried out light duties as a cleaner on a periodic basis during the last few years. The failure of the wife to make a full and frank financial disclosure in that regard is to her discredit as a witness. However, the essential and disturbing features of the wife’s physical and mental health based on the medical evidence, cannot be glossed over simply because the wife did not reveal the nature and extent of the work that she has performed to which reference has been made in this judgment. The work performed by the wife was “light duties” on a periodic and limited basis so far as the time that was actually occupied in that work.
The husband’s capacity to earn income is assured. He is a qualified and highly experienced professional fisherman able to continue to earn income in that occupation.
The husband also has the benefit of considerable financial resources represented by his personal and commercial relationship with his father and Hearst Pty Limited. There is no evidence to suggest that the benefit to the husband of those relationships is likely to cease in the foreseeable future.
The husband will be able to be in a position to increase his future security by superannuation. The wife’s position in that regard is realistically not available.
I have taken into account that the husband has remarried and that he and his partner have a small child. That domestic situation will result in ongoing financial commitments that need to be made by him. The wife does not have such ongoing commitments.
The weight which I have attributed to the contrasting relevant s.75(2) matters so far as the wife and husband are concerned is such that it is appropriate for there to be a further adjustment in favour of the wife as earlier described.
Conclusion
I have previously determined that the entitlement of the wife amounts in total to 70% given the net property of the husband and wife based on my assessment of contributions and relevant matters pursuant to s.75(2).
The reality is that the only significant property of the wife and husband is their two-thirds interest in “the fishing licence package” to which I have attributed the value of $117,131.00. The remaining one-third interest is held by the second respondent, subject to the orders sought and submissions made on behalf of the husband to which I will now refer.
The husband seeks orders whereby he would achieve an alteration of property interests of the husband, wife and second respondent in “the fishing licence package” to the effect that he gained a 90% interest in it.
The helpful written submissions made on behalf of the husband make it clear that to succeed the husband relies on both relevant matters pursuant to s.79 of the Act and the acceptance of the establishment of a constructive trust.
It is trite law that so far as the property interests as between the husband and wife are concerned, the Act covers the field and is a complete code to determine the property rights of parties to a marriage which includes a former marriage. The power to alter property interests as between husband and wife is found in s.79 of the Act. Declaratory relief may also be sought pursuant to s.78 although no such declaration was sought as between those particular parties. Consequently, it follows that reliance upon equitable principles for the purpose of establishing a constructive trust as between the husband and wife with consequential relief must fail.
The legal position is different so far as the husband and second respondent are concerned. As has been emphasised in the authorities a constructive trust recognising, in part, unconscionable conduct is remedial in nature. It may arise irrespective of intention.
In these proceedings, it was neither alleged nor would the evidence support a finding of equitable fraud or other conduct on the part of the second respondent which according to equitable principles would give rise to a constructive trust.[6] The following are my further reasons with reference to appropriate principle.
[6] Muschinski v Dodds (1984-1985) 160 CLR 583 at 593
As was emphasised in Muschinski, the application of equity for the purpose of establishment of a constructive trust “was imposed, as a personal obligation attaching to property, to enforce the equitable principle that a legal owner should not be permitted to use his common law rights as owner to abuse or subvert the intention which underlay his acquisition and possession of those rights”.[7]
[7] ibid at 613 per Deane J
Importantly relevant to this case in Muschinski, Deane J held that:
“The fact that the constructive trust remains predominantly remedial, does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice.”
Deane J further stated that:
“Viewed as a remedy, the function of the constructive trust is not to render superfluous, but to reflect and enforce, the principles of the law of equity.”[8]
[8] ibid at 615
However, it was recognised that “general notions of fairness and justice” remain relevant to “unconscionable conduct”.[9] In addition, it was held that:
“The principal operation of the constructive trust in the law of this country has been in the area of breach of fiduciary duty.”[10]
[9] ibid at 616
[10] ibid at 616
In considering the application of those principles and “unconscionable conduct”[11], the following facts apply.
[11] Baumgartner v Baumgartner (1987) 164 CLR 137 at 147
Throughout the period from the commencement of cohabitation between the husband and wife until the signing and recording of the relevant transfer on 16 November 1998 and 10 December 1998 respectively, “the fishing licence package” was held by the wife and the deceased. There is no evidence to suggest that at any time during that period an intention was evidenced by the deceased to confer upon the husband a beneficial interest in the fishing licences. The husband for his part operated the fishing vessels and indirectly the fishing licences in his capacity as a professional fisherman. The husband received the financial rewards as did the wife. There is no evidence of the deceased receiving any part of the income so generated, notwithstanding that he was a joint holder with the wife of “the fishing licence package” including their joint ownership of the vessel “K”. Accordingly, the deceased did not receive any financial return reflecting his ownership in part of the fishing licences or the relevant fishing vessel. In addition, there is no evidence of any agreement between the husband and/or the wife on the one hand, and the deceased on the other, whether written or oral prior to 16 December 1998 for the husband to gain an interest in the relevant fishing licences.
On 16 November 1998 the relevant transfer was completed and signed by the husband and wife and the deceased. The husband then became one of three persons together with the wife and the deceased to hold the relevant fishing licences. No consideration is expressed in the transfer itself, nor is it alleged that the husband achieved that interest at the expense of the interest otherwise held by the wife and the deceased due to a financial benefit to pass from the husband to the deceased. In effect, the husband’s one-third interest was gifted to him.
I have found that the relevant circumstances reflected the personal relationship as between the husband and wife. The husband implicitly recognised that as being the reason for the transfer that took place.[12]
[12] Affidavit of the husband sworn 7 March 2007, para. 30
It must not be overlooked that the husband had for many years received a financial reward for his labours in terms of the catch that resulted from his work due to the opportunity given to him to operate as a skipper pursuant to the fishing licences and the relevant fishing vessel. That was against a background where the husband lacked any significant property or other source of income.
Accordingly, in my view the remedial nature of a constructive trust and the need to provide a remedy in the situation of “unconscionable conduct” consistent with the relevant principles do not arise in this case.
So far as any other basis that may exist to alter the property rights of a third party, no application was made by the husband for an order pursuant to s.90AE(2)(b). Accordingly, an order will not be made that alters the current interest held by the second respondent in “the fishing licence package”.
The only significant property interest held by the husband and wife are represented by “the fishing licence package” with the agreed value of $117,131.00 after deducting the value of the one-third interest held by the second respondent.
Such has been the apparent animosity between the parties and seemingly lack of sensible pragmatic instructions held by their lawyers, that agreement was obviously not reached in relation to the current market value of unremarkable motor vehicles and chattels. No expert evidence was given.
In those circumstances, I have concluded that it is just and equitable for each of the parties to retain such motor vehicles and chattels in his or her possession respectively.
The discrepancies in contended values are such that the only sensible solution in my opinion is one that I have indicated short of ordering a sale.
With regard to superannuation, I have taken into account the husband’s higher superannuation entitlements albeit that the amount involved is not large.
The “fishing licence package” is held by the husband, wife and second respondent. The second respondent is the trustee of the estate of the deceased. The residuary beneficiary is the wife’s mother.
The husband seeks orders which would effect a sale of the interests of all parties in “the fishing licence package”. The wife seeks a transfer to her of the husband’s interest.
I have concluded that it is just and equitable for the wife to be given an opportunity to acquire the husband’s interest in “the fishing licence package”. Whilst I recognise that the wife does not have the financial resources to do so on her own account, nonetheless with the potential support of the wife’s daughter, the daughter’s fiancé who is engaged in the fishing industry, and the wife’s mother, the wife may be able to raise sufficient funds for that purpose. Otherwise, pragmatic decisions will have to be made for the sale of “the fishing licence package” by the husband and wife of their respective interests. I do not have the power to order the second respondent to join in such a sale. Depending upon the second respondent’s attitude in that regard, it may be difficult to readily achieve a sale in circumstances where the second respondent remains the holder of an interest in “the fishing licence package”. However, the parties will have to consider those practical aspects and to take into account sensible and commercial advice.
Consequently, I have concluded that the entitlements of the wife, based on my assessment of contributions and relevant matters pursuant to s.75(2) reflect the orders that I will make as being just and equitable. I will provide a period of time for payment of the husband’s 30% interest amounting to $35,139.00 expiring at the end of February 2009 given the often lack of financial activity over the Christmas/New Year period.
It is a disappointing situation that the litigation between the parties continued despite opportunities for a compromise to be reached as no doubt the legal costs are grossly disproportionate to the very modest value of the property involved.
I certify that the preceding two hundred & eighty-one (281) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose.
Associate:
Date: 28 November 2008
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
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Commercial Law
Legal Concepts
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Remedies
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Costs
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Fiduciary Duty
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Constructive Trust
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Injunction
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