Stamatou & Stamatou
[2022] FedCFamC1F 241
•13 April 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Stamatou & Stamatou [2022] FedCFamC1F 241
File number(s): MLC11322 of 2018 Judgment of: MCEVOY J Date of judgment: 13 April 2022 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where it is just and equitable for property interests to be adjusted – Where the wife asserts that the husband’s elderly parents hold their title in a property on trust for her and the husband – Where the wife asserts that the husband’s parents represented to her and the husband that the property was theirs and that they acted on those representations to their detriment – Where the husband’s parents discharged the mortgage and the wife asserts that this was effectively a gift to her and the husband – Where the wife asserts the property should be included in the matrimonial asset pool for division between the husband and wife – Where the husband and his parents deny that any relevant representations were made to the husband and the wife and deny that the husband and the wife have suffered detriment – Where principles of proprietary estoppel by representation and by acquiescence are considered – Where it is found that a proprietary estoppel by representation has arisen in favour of the husband and the wife – Where a declaration is made that the husband’s parents hold their title in the property on trust for the husband and wife – Where contributions of the husband and the wife are considered – Where the wife seeks a Kennon & Kennon (1997) FLC 92-757 adjustment by reason of family violence perpetrated by the husband – Where it is accepted that the wife’s contributions were rendered more arduous by family violence inflicted upon her by the husband and an adjustment made in her favour – Where the husband failed to make proper disclosure and is found to have a significant financial resource in his partner – Where an adjustment on the basis of s 75(2) factors are made in favour of the wife – Where the property is to be sold and the proceeds divided – Where motor vehicles, chattels and superannuation are to be retained by the parties – Where the asset pool is to be divided 60/40 in favour of the wife
FAMILY LAW – COSTS – Where orders made for the parties to file material on the question of costs
Legislation: Evidence Act 1995 (Cth) section 140
Family Law Act 1975 (Cth) ss 75, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 1.06, 6.01
Administration and Probate Act 1958 (Vic) section 70ZG
GE Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 7th ed, 2019)
Cases cited: Amador & Amador (2009) 43 Fam LR 268; [2009] FamCAFC 196
Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Britt & Britt (2017) FLC 93-764; [2017] FamCAFC 27
Carter v Brine [2015] SASC 204
Chorn & Hopkins (2004) FLC 93-204; [2004] FamCA 633
Clementi v Rossi [2019] VSC 725
Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752; [2008] UKHL 55
Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1; [2016] HCA 26
Davey v Lee (1990) 13 Fam LR 688; (1990) DFC 95-084
Dillwyn v Llewelyn (1962) 45 ER 1285
Donis v Donis (2007) 19 VR 577; [2007] VSCA 89
E Co v Q [2018] NSWSC 442
Garrett v Garrett (1984) FLC 91-539; [1983] FamCA 55
Gillett v Holt [2001] Ch 210; [2000] EWCA 45
Gosper & Gosper (1987) FLC 91-818; [1987] FamCA 43
Harris v Harris [2004] NSWSC 638
Henderson v Miles (No 2) (2005) 12 BPR 23,579; [2005] NSWSC 867
Hendy & Penningh (2018) FLC 93-879; [2018] FamCAFC 257
Hurst & Hurst (2018) FLC 93-851; [2018] FamCAFC 146
In the Marriage of Black & Kellner (1992) FLC 92-287; [1992] FamCA 2
In the Marriage of Chang & Su (2002) FLC 93-117; [2002] FamCA 156
In the Marriage ofKessey (1994) FLC 92-495; [1994] FamCA 162
In the Marriage of Mezzacappa (1987) FLC 91-853; [1987] FamCA 20
In the Marriage of Quinn (1979) FLC 90-677; [1979] FamCA 86
In the Marriage of Robb (1995) FLC 92-555; [1994] FamCA 136
In the Marriage of Stein (1986) FLC 91-779; [1986] FamCA 27
In the Marriage of Weir (1993) FLC 92-338; [1992] FamCA 69
J & J [2006] FamCA 951
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Jarrott & Jarrott (No. 2) [2012] FamCAFC 72
Jobling & Slade [2020] FamCA 419
Keating & Keating (2019) FLC 93-894; [2019] FamCAFC 46
Kennon & Kennon (1997) FLC 92-757; [1997] FamCA 27
Khademollah & Khademollah (2000) FLC 93-050; [2000] FamCA 1045
Laird v Laird & Anor [2021] VSC 352
Legione v Hateley (1983) 152 CLR 406; [1983] HCA 11
Mabb & Mabb (2020) FLC 93-947; [2020] FamCAFC 18
MacDonald v Frost [2009] EWHC 2276
McDonald v Dunscombe [2018] VSC 283
McNab v Graham (2017) 53 VR 311; [2017] VSCA 352
Mould v Canale [2017] VSC 793
S & S [2003] FamCA 905
Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19
Sledmore v Dalby (1996) 72 P & CR 196; [1996] EWCA Civ 1305
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Tadrous v Tadrous [2012] NSWCA 16
Transport Industries Insurance Co. Ltd v Longmuir [1997] 1 VR 125
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Zuen & Lhao [2020] FamCAFC 84
Division: Division 1 First Instance Number of paragraphs: 258 Date of last submissions: 2 February 2022 Date of hearing: 20-23 December 2021, 2 February 2022 Place: Melbourne Counsel for the Applicant: Mr Glezakos Solicitor for the Applicant: Elsum Family Law Counsel for the First Respondent: Mr Hutchings Solicitor for the First Respondent: James Harris Lawyers Counsel for the Second and Third Respondents: Mr Miller Solicitor for the Second and Third Respondents: Schembri & Co Lawyers ORDERS
MLC 11322 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR STAMATOU
ApplicantAND: MS STAMATOU
First RespondentMR B
Second RespondentMS C
Third RespondentAA LAWYERS PTY LTD
Intervenors
ORDER MADE BY:
MCEVOY J
DATE OF ORDER:
13 APRIL 2022
IT IS DECLARED THAT:
The second and third respondents hold their title in Z Street, Suburb D VIC being the whole of the land comprised in Certificate of Title Volume … Folio … (“the Suburb D property”) on trust for the husband and the wife.
IT IS ORDERED THAT:
1.All previous property orders be discharged.
Motor Vehicles, Chattels and Superannuation
2.The wife shall retain, for her sole and exclusive use, enjoyment and benefit, all items of property, both real and personal, and including choses-in-action and financial resources, in her name, possession and/or control including, but not limited to:
(a)the Motor Vehicle 1 (unregistered);
(b)the Motor Vehicle 2 (registered …);
(c)the Motor Vehicle 3 (unregistered);
(d)the Motor Vehicle 4 (registered …);
(e)the proceeds of sale of the Motor Vehicle 5;
(f)any bank account in her name; and
(g)any superannuation in her name.
3.The husband shall retain, for his sole and exclusive use, enjoyment and benefit, all items of property, both real and personal, and including choses-in-action and financial resources, in his name, possession and/or control including, but not limited to:
(a)the workshop, tools and equipment as defined at page 30 of Mr E’s valuation report dated 21 June 2021 which is inclusive of:
(i)the miller welder;
(ii)the antique welder;
(iii)the sand blaster;
(iv)the tool chest;
(v)the contents of assorted tools;
(vi)the lathe, milling machine and drill press;
(vii)the belt sander x 2;
(viii)the custom frame jig;
(ix)the pipe bender x 2;
(x)the raw materials under house;
(xi)the assortment of tyres and wheels;
(xii)the retractable hose reels x 2;
(xiii)the tools and equipment;
(xiv)the assorted motorcycle parts;
(b)the Motor Vehicle 9 (unregistered);
(c)the Motor Vehicle 6 (unregistered);
(d)the Motor Vehicle 7 (registered …);
(e)the Motor Vehicle 8 (registered …); and
(f)any superannuation in his name.
4.For the purposes of paragraphs 2 and 3 herein, the husband and the wife forthwith do all acts and things and sign all documents as may be required to transfer ownership of any such property to either of them and/or remove any encumbrance on such property.
The Suburb D Property
5.The parties do all acts and things, and sign all necessary documentation, to cause the Suburb D property, to be sold within three months (“the sale”) on such terms and conditions as may be agreed between the parties in writing, and if they cannot reach agreement:
(a)the parties will engage and instruct a selling agent by the following method:
(i)the wife will, in writing, nominate three proposed selling agents to the husband and the second and third respondents;
(ii)the husband and second and third respondents will, within 28 days thereafter, select one of the selling agents proposed by the wife;
(iii)in the event the husband and second and third respondents do not select a selling agent within those 28 days, then the selling agent will be chosen by the wife;
(b)the method of sale will be at the direction of the selling agent;
(c)the reserve price will be at the direction of the selling agent;
(d)the settlement period will be at the direction of the selling agent but no later than 90 days; and
(e)the parties will engage and instruct a conveyancer by the following method:
(i)the wife will, in writing, nominate three proposed conveyancers to the husband and the second and third respondents;
(ii)the husband and second and third respondents will, within 28 days thereafter, select one of the conveyancers proposed by the wife;
(iii)in the event the husband and second and third respondents do not select a conveyancer within those 28 days, then the conveyancer will be chosen by the wife.
6.Pending the sale of the Suburb D property:
(a)the wife will have the sole use, occupation, enjoyment and benefit of the Suburb D property;
(b)all parties will cooperate and take all necessary steps and sign all necessary documentation to reasonably facilitate any inspections of the Suburb D property by the selling agent and by prospective buyers;
(c)the wife will maintain the Suburb D property and keep the property in a tidy and presentable condition for the sale; and
(d)neither the husband nor the second or third respondents shall encumber the Suburb D property without the written consent of the wife or Court order first obtained.
7.The proceeds of the sale of the Suburb D property be distributed as follows:
(a)first, to pay all costs, commissions and expenses of the sale including but not limited to the selling agent’s fees/commission, the advertising fees and the conveyancer’s fees;
(b)secondly, to discharge any encumbrance affecting the Suburb D property;
(c)thirdly, payable to the wife the dollar equivalent to X in the following formula:
X = (60 % (A+B)) – C
Where:
A = the net proceeds of the sale of the Suburb D property, after payment of expenses pursuant to paragraphs 7(a) and (b) of the orders herein;
B = the total value of all motor vehicles, chattels and superannuation retained by the husband and the wife, comprising of:
(a) motor vehicles and chattels, being $256,470; and
(b) superannuation balances, being $96,773
C = the value of the items that the wife is to retain pursuant to paragraph 2 of the orders herein, comprising of:
(a)motor vehicles and bank accounts in her name, to the value of $152,000; and
(b) any superannuation in her name, to the value of $44,000
The dollar equivalent to X in the above formula is payable to the wife as follows:
(i)first, to AA Lawyers Pty Ltd (“AA Lawyers”) Trust Account, to discharge any and all outstanding costs and disbursements owing by the wife to AA Lawyers and in accordance with order 2 of the orders of 21 December 2021;
(ii)secondly, and in accordance with order 1 of the orders made 19 December 2019, to the husband, the wife’s half share of the parties’ attendance upon Family Report writer Ms F;
(iii)the remaining balance to her lawyers, James Harris Lawyers Trust Account: Bank: Commonwealth Bank of Australia Account Name: James Harris Lawyers Practice Trust Account BSB: … Account No: …51;
(d)finally, the balance to the husband and/or at his direction.
Other
8.The wife be solely liable for, and indemnify the husband, and forever hereafter keep him indemnified, against all or any liability in her name, or attaching to any item of property that she is to retain pursuant to these orders, save and except as provided for in paragraph 3 herein.
9.The husband be solely liable for, and indemnify the wife, and forever hereafter keep her indemnified, against all or any liability in his name, or attaching to any item of property that he is to retain pursuant to these orders, save and except as provided for in paragraph 2 herein.
10.The husband and wife shall otherwise retain for their sole and exclusive use, enjoyment and benefit, all items of property, both real and personal, and including choses-in-action and financial resources, in their sole name, possession and/or control.
11.Unless specified in these orders, and save for the purposes of enforcing their terms:
(a)insurance policies remain the sole property of the owner named thereon;
(b)each party forgoes any claim they may have to any superannuation benefit, other employment related benefits and/or interest in any trust or deceased estate that is payable or belonging to or owned by the other;
(c)any monies standing to the credit of the parties in any joint banking account are to be equally divided between the parties within seven days, and closed within a further seven days; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
12.In default of the parties doing all acts and things and executing all such documents as are necessary to give effect to these orders, a Registrar of the Federal Circuit and Family Court of Australia at Melbourne be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.
13.All extant applications be otherwise dismissed.
Costs
14.Within 14 days of the date of these orders the wife file any application for her costs of the property proceedings with any supporting material and written submissions on the question of costs, with such written submissions to be of no more than four pages in length.
15.Within 14 days of the wife filing any application pursuant to paragraph 14 herein, the husband and the second and third respondents file any material in opposition and written submissions, with such written submissions to be of no more than four pages in length.
16.Pursuant to rule 1.06, item 2(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) and the Court’s inherent discretion, any unresolved questions of costs or the implementation of the above orders will be referred to the Honourable Justice Strum to heard and determined on the papers or as otherwise ordered by the Court.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Stamatou & Stamatou has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCEVOY J:
In these proceedings Mr Stamatou (“the husband”) and Ms Stamatou (“the wife”), seek orders altering their interests in property pursuant to s 79(1) of the Family Law Act 1975 (Cth) (“the Act”). It is accepted by both that it would be just and equitable for the Court to make orders pursuant to s 79 of the Act.
There are two children of the marriage: X, born in 2013 and aged 8 years, and Y, born in 2016 and aged 5 years (“the children”). Parenting issues had been in dispute, however on 7 October 2021 the parties agreed to final consent orders in relation to parenting matters.
Although there are various questions to be resolved in relation to the composition of the asset pool, contributions, and the other matters to be taken into consideration, the principal issue in dispute is whether the property in which the husband and the wife have lived since 2006 and raised the children (“the Suburb D property” or “the property”) is properly to be regarded as property of the parties to the marriage. This is in circumstances where the registered proprietors of the Suburb D property are the second respondent, Mr B, who is the husband’s elderly father, and the third respondent, Ms C, who is the husband’s elderly mother (collectively, “the husband’s parents”).
The husband’s parents contend that the Suburb D property belongs legally and beneficially to them, and that neither the husband nor the wife have any legal or equitable interest in it. The husband, who is an only child, adopts the same position. He says that although he and the wife lived in the property, it was never intended for it to be theirs. Indeed, he says that they were lucky to have been allowed to live in it.
However, it is the wife’s position that she and the husband have a beneficial interest in the Suburb D property, and that it can thus be the subject of an order pursuant to s 79 of the Act. The wife contends that in mid-2006 an agreement was made between her and the husband and the husband’s parents to purchase the Suburb D property in the name of the husband’s parents for the benefit of the husband and the wife, and for the title to be transferred into the names of her and the husband. She asserts that this agreement was partly oral and partly implied (it is common ground between the parties that there was never any written agreement between them as to the ownership, use, or occupation of the Suburb D property).
The wife says that the husband’s parents represented to the husband and to her that they were the beneficial owners of the Suburb D property in 2006, about 2007, and again in 2013 after the discharge of the loan obtained by the husband’s parents to purchase the property. She maintains that she and the husband were induced to assume that they were the beneficial owners, and that in reliance on the representation made by the husband’s parents she and the husband have acted to their detriment. The wife says that she and the husband paid the deposit, a licence fee to enter the property before settlement, council rates and other utilities, amounts by way of repayments owing on the loan and that they expended monies substantially renovating and improving the property. Thus the wife contends that the husband’s parents are now estopped from denying her and the husband an interest in the Suburb D property, and that the husband’s parents hold the property, or a portion of it, for the benefit of her and the husband pursuant to an implied or constructive trust, or pursuant to a resulting trust. The wife seeks final orders that she receive 70 per cent of the overall property interests, with the Suburb D property being included in the asset pool.
The husband’s parents deny that there was ever any agreement that they would purchase the Suburb D property for the husband and the wife, that there is any operative estoppel, and that circumstances exist which could give rise to the creation of an implied, constructive or resulting trust. They deny that the husband and the wife have any interest in the Suburb D property whatsoever, and seek a declaration to that effect.
The husband joins his parents in seeking a declaration that the Suburb D property is owned by them. He proposes final orders that would divide the parties’ limited remaining assets between them. If the Court were to find that the Suburb D property is beneficially owned by the husband and the wife, the husband proposes that it should be sold with 70 per cent of the proceeds to be distributed to him and 30 per cent to the wife after relevant costs and expenses are paid.
It is therefore necessary to make findings as to the beneficial ownership of the Suburb D property as well as in relation to other components of the asset pool, including whether there are liabilities to be included within it. Attention must then be given to the considerations prescribed in s 79(4) of the Act and other relevant matters in order to determine what orders would be appropriate pursuant to s 79(1) of the Act.
For the reasons that follow, I am satisfied that the husband’s parents did agree to purchase the Suburb D property for the benefit of the husband and the wife, subject to the husband and the wife meeting the repayments on the loan which the husband’s parents organised to buy the property. This arrangement was made at the time the Suburb D property was purchased in 2006, and confirmed after the husband and the wife had completed renovations to the property in or about 2007. By this arrangement the husband and the wife had become the equitable owners of the property, subject to the obligation to make the loan repayments. In 2013 the husband’s parents decided to pay out the loan and not require any further payment from the husband and the wife, assuring the husband and the wife, once again, that the property was theirs. In the context of what had already occurred, relieving the husband and the wife of their obligation to continue to make the loan repayments did not void the equitable obligations the husband’s parents had already assumed to the husband and the wife. Their decision no longer to require the husband and the wife to meet the loan repayments was effectively a gift to the couple, relieving them of that obligation. In circumstances where the husband’s parents now seek to recant their assurances to the husband and the wife that they would have an equitable proprietary interest in the Suburb D property, equity will estop them from so doing and intervene to impose a constructive trust on them in favour of the husband and the wife with respect to the property.
It follows therefore that the Suburb D property is to be regarded as property of the parties to the marriage, along with the various other items that less controversially constitute the asset pool. The Suburb D property accounts for some 70 per cent of the value of the asset pool. Insofar as contributions are concerned, it is conceded by the wife that the Suburb D property is a significant financial contribution made through the husband. Nonetheless, the wife has also made significant contributions, both financial and to the welfare of the family in her capacity as homemaker and parent. She has made those contributions in circumstances rendered more arduous by significant family violence perpetrated against her by the husband.
All things considered I have assessed the contributions of the husband and the wife on a 45/55 per cent basis in favour of the husband. Insofar as any adjustment pursuant to s 79(4)(e) and s 75(2) of the Act is concerned, I have formed the view that an adjustment of 15 per cent in favour of the wife would be appropriate. Amongst several other relevant matters, she will have the care of two young children until their adulthood, apparently with little if any assistance from the husband. In all the circumstances a division of the parties’ assets including superannuation on a 60 per cent basis in favour of the wife would be appropriate for the purposes of s 79(1) of the Act. I am satisfied that such a division would be just and equitable and orders will be made to give effect to this, endeavouring to accommodate the desire of the husband and the wife to retain certain of their chattels.
BACKGROUND
The husband was born in Australia on in 1967 and is 55 years of age. He says that he is unemployed and lives in Melbourne with his current partner in her home. The husband’s current partner operates her own business. He says that he assists her with this business, but rather unusually that he does not receive any wages for doing so. It would seem, however, that the husband’s current partner is extremely beneficent. She pays all his living expenses, and has funded much of his costs of these proceedings in an amount in excess of $64,200, and perhaps considerably in excess of that figure. The husband also has an adult child with another woman, who was born in 1994. He says he has not spent time with this child since she was 16 or 17 years old. The husband is otherwise in good health.
The wife was born in Australia in 1978 and is 43 years of age. She worked full time until the birth of the parties’ second child, and is now unemployed. The wife lives with the children in the Suburb D property. She has been diagnosed with post-traumatic stress disorder as a result of family violence which she says was inflicted upon her by the husband.
The husband and the wife met in 1998 at a business where the wife worked. She was 19 years of age at the time, and the husband 31 years of age. They commenced cohabitation in 1998 or 1999, and married in 2012. As has been mentioned, the children were born in 2013 and 2016.
The parties dispute the date of separation. The husband asserts that they separated under the same roof in August 2016; the wife says it was 2017. They agree that physical separation occurred when the wife left the Suburb D property on 20 August 2018. Shortly thereafter, on 31 August 2018, the wife obtained an interim intervention order (“IVO”) in the Magistrates’ Court against the husband, with the children listed as affected family members. A final IVO was made against the husband on 24 January 2019 for a period of two years. This was extended on 16 March 2021 until 15 March 2022. The parties are not yet divorced.
The husband’s father was born in 1942 and is now 80 years of age. He is in poor health. He has had a stroke and five heart bypass operations, he has a pacemaker, and he requires a walking frame. The husband’s mother was born in 1938 and is 84 years of age. She is also in poor health. She too requires a walking frame, and she was said to have had surgery on her legs in 2021. The husband’s parents both utilised an interpreter to give their evidence, although it was apparent that the husband’s father, at least, had a reasonable command of the English language.
HISTORY OF PROCEEDINGS
The husband initiated proceedings in the Federal Circuit Court of Australia by filing an Initiating Application for final and interim parenting orders on 1 October 2018. After the parties filed several (Amended) Initiating Applications and Responses, on 30 May 2019 the husband filed a Further Amended Initiating Application seeking for the first time both parenting and property orders. This Application sought a just and equitable adjustment of the parties’ respective property interests in accordance with s 79 of the Act.
On 29 July 2019 the wife filed a Further Amended Response seeking amongst other things that the second and third respondents be joined as parties to the proceedings, that they be restrained from transferring or disposing of the Suburb D property, that they transfer their interest in the Suburb D property to the husband and wife and that there be a just and equitable property division. The second and third respondents were duly joined to the proceedings, and on 4 November 2019 they filed a Response seeking a declaration that the husband and wife have no interest in the Suburb D property and an order requiring the wife to remove her caveat over the property, as well as costs on an indemnity basis.
On 21 November 2019 the proceedings were transferred to the Family Court of Australia. The matter was set down for trial in May 2020 for four days, but was subsequently adjourned on a number of occasions by reason of the COVID-19 pandemic and the need for the trial to proceed face to face. The parties participated in a judicial settlement conference before a Judge of the Court, which succeeded in resolving parenting matters on the basis that the husband and the wife have equal shared parental responsibility for the children, and that the children live with the wife and spend time with the husband.
Although the trial was listed to begin on 22 November 2021 for three days, it was unfortunately not ready to proceed at that time, and it was adjourned to 20 December 2021. The trial ultimately commenced on 20 December 2021, and the evidence concluded on 23 December 2021. The parties filed written submissions on 28 January 2022, and made final oral closing submissions on 2 February 2022.
On 16 December 2021 the wife’s former solicitors, AA Lawyers, filed an Application seeking orders that they have leave to intervene, that any order for payment of money or transfer of property in favour of the wife be charged with payment to them of outstanding costs and disbursements, and that any payment be made directly to their trust account. They also sought orders that the wife pay their costs of their Application. This Application was listed for the morning of the first day of the trial, and consent orders were agreed substantially in the terms sought by the interveners.
PROPOSALS OF THE PARTIES
On the morning of 2 February 2022, prior to closing oral submissions, the husband proposed an amended set of final orders that the wife retain several motor vehicles, her bank accounts and superannuation and that he would retain his tools and equipment, two motor vehicles and his superannuation. The husband seeks that the Suburb D property be declared as legally and beneficially owned by his parents. However, if the property is found by the Court to be the property of him and the wife, he proposes that it be sold with the proceeds of sale being applied first to the costs and expenses of the sale, secondly to discharge any encumbrance over the property, and thirdly to him and the wife on the basis of a 70/30 split in his favour. The orders sought by the husband’s parents are as set out above.
Although the wife filed written closing submissions on 28 January 2022, those submissions did not include a form of the final proposed orders that she seeks. Her proposal for final orders is therefore taken to be the proposed orders submitted to the Court on 17 December 2021, the substance of which has been described above. In the event the Court does not find that the Suburb D property is held for the husband and the wife on trust, then the wife proposes that she receive most of the assets in what remains of the pool including a superannuation split of the maximum amount available from the husband’s superannuation fund.
MATERIAL RELIED UPON
The parties filed a Court Book on 16 December 2021 that contained most of the relevant documents.
The husband relied upon the following material:
(a)Further Amended Initiating Application filed 31 May 2021;
(b)his affidavit filed 31 May 2021 (with objections as excised in the Court Book);
(c)his financial statement filed 28 September 2021;
(d)his Outline Of Case filed 18 November 2021;
(e)certain documents tendered at trial; and
(f)written submissions filed 28 January 2022.
The wife relied upon the following material:
(a)affidavit of Dr H filed 2 October 2019 annexing psychiatric report of the husband and the wife;
(b)affidavit of Ms G filed 22 June 2021 (with objections as excised in the Court Book);
(c)affidavit of Ms J filed 29 June 2021 annexing report concerning the wife;
(d)affidavit of Mr E filed 29 June 2021 annexing valuation report;
(e)her affidavit filed 1 July 2021 (with objections as excised in the Court Book);
(f)Further Amended Response to Initiating Application filed 2 July 2021;
(g)her financial statement filed 5 July 2021;
(h)her affidavit filed 23 September 2021 (with objections as excised in the Court Book);
(i)her affidavit filed 12 November 2021;
(j)affidavit of Ms K filed 12 November 2021;
(k)Amended Statement of Claim filed 6 December 2021;
(l)certain documents tendered at trial; and
(m)written submissions dated 28 January 2022.
The second and third respondents relied upon the following material:
(a)Amended Response to Final Orders filed 24 August 2021;
(b)affidavit of the husband’s father filed 24 August 2021;
(c)affidavit of the husband’s mother filed 24 August 2021;
(d)affidavit of Ms L (translator) filed 24 August 2021;
(e)affidavit of the husband’s father filed 17 November 2021;
(f)affidavit of the husband’s mother filed 17 November 2021;
(g)affidavit of Ms L (translator) filed 17 November 2021;
(h)Outline of Case filed 18 November 2021;
(i)affidavit of Mr M filed 15 December 2021 annexing valuation report and rental assessment of the Suburb D property;
(j)Defence to Amended Statement of Claim filed 15 December 2021;
(k)certain documents tendered at trial; and
(l)written submissions dated 28 January 2022.
THE STATUORY REGIME
Axiomatically, orders under s 79(1) of the Act altering the property interests of the parties to the marriage may only be made if the Court is first satisfied, pursuant to s 79(2), that it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made: see Stanford & Stanford (2012) 247 CLR 108 at [22], [35] (“Stanford”). While those two inquiries are not to be conflated (Stanford at [35], [40], [51]), it is permissible for the s 79(4) factors to inform the inquiry under s 79(2): see Bevan & Bevan (2013) FLC 93-545 at [83]-[89], [163], [169], [171]-[172] (“Bevan”).
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties to the marriage. It must not be assumed that the parties’ rights to or interests in marital property should be different from those that exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act: see Stanford at [37]-[40], [50]. Commonly however, and as here, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of the common use of their property: see Stanford at [42]; Bevan at [68]-[70], [82], [164]-[165].
If and once determined that it is just and equitable for the property interests of the parties to the marriage to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The Court must necessarily identify and assess the parties’ contributions of all kinds and from all sources within the meaning of ss 79(4)(a), 79(4)(b) and 79(4)(c), and then take account of the relevant matters referred to in ss 79(4)(d), 79(4)(e), 79(4)(f) and 79(4)(g) of the Act, which include the matters referred to in s 75(2) of the Act, so far as they are relevant: see Jabour & Jabour (2019) FLC 93-898 at [60] (“Jabour”). The process of property adjustment calls for a discretionary and holistic value judgment: see In the Marriage of Quinn (1979) FLC 90-677 at 78,615; Garrett v Garrett (1984) FLC 91-539 at 79,359, 79,372; Davey v Lee (1990) 13 Fam LR 688 at 689.
In order to identify and assess the parties’ property interests and contributions, it is necessary that they have provided full and frank disclosure to the Court and to each other as they are obligated to do: see r 6.01(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”). The approach that may be adopted in cases where there is a lack of full and frank disclosure and where the court is unable fully to identify a party’s true asset position is well settled: In the Marriage of Stein (1986) FLC 91-779 at 75-676-75,677; In the Marriage of Mezzacappa (1987) FLC 91-853 at 76,449; In the Marriage of Black & Kellner (1992) FLC 92-287 at 79,133.
The failure to disclose relevant information undermines the process of adjudication for a settlement of property because non-disclosure stymies the Court’s ability to identify the property of the parties, assess contributions, and assess s 75(2) factors: see In the Marriage of Weir (1993) FLC 92-338 at 79,594 (“Weir”). If it is established that there has been a deliberate non-disclosure by a party then the Court should not be unduly cautious of making findings in favour of the other party, and it is open to the Court to find that an indeterminate undisclosed amount is held by one of the parties and to make such property orders without reference to the overall pool: see Weir at 79,593-79,594: see In the Marriage of Chang & Su (2002) FLC 93-117 at 89,197-89,198 (“Chang & Su”).
CREDIBILITY OF THE PARTIES
Before turning to the asset pool and the contributions made by the husband and the wife, it is desirable to say something about the credibility of the husband, the wife, and the husband’s parents as witnesses. The wife was extremely critical of the husband and his evidence in closing submissions. She was also critical of the husband’s parents. For their part the husband’s parents question aspects of the wife’s evidence. Although there were occasions where the wife needed to be reminded to focus on the question being asked, on the whole I found her to be a believable witness. As will become apparent, however, I have accepted the wife’s submission that the husband and his father were most unsatisfactory witnesses. It is indeed the case that the husband’s answers to questions in cross examination were frequently unbelievable, and at times fanciful. The evidence of the husband’s father was also, at times, unbelievable. Indeed, my concerns about the evidence given by the husband and his father, in particular, were such that on more than one occasion during the trial I expressed my disquiet.
One especially troubling aspect of this was the husband’s evidence concerning his access to funds from his partner and her business and his involvement in bringing to his partner’s attention the subpoena to her to produce documents. This subpoena, issued 5 November 2021, sought documents relating to any financial dealings between her and/or her business and the husband, together with taxation returns and any shared bank accounts and credit cards. In circumstances where this subpoena had been ignored by the husband’s partner, and consent orders for substituted service had been agreed, the husband had also consented to an order that he would use his best endeavours to bring the subpoena to the attention of his partner.
The husband was cross examined as to the dealings he had had with his partner in relation to the subpoena, and it would seem that he was less than diligent in bringing it to her attention. Certainly no documents were produced, and the husband’s partner appears to have ignored the subpoena altogether. In the absence of any documents explaining the nature of their financial relationship, the husband insisted that he was unemployed and in receipt of no income whatsoever. He even asserted that he did not have a bank account. He said that his partner covered all his living expenses (including the significant cost of all of his legal fees), that although he did some work for his partner in her business he did not work for any reward, that he never had occasion for discretionary expenditure outside what his partner provided him, and that he had not applied for any unemployment benefits or other government benefits, even in circumstances where he asserted that up until recently he had spent his time “looking after [his partner’s] father before he passed away”.
The position in relation to the payment of the husband’s legal fees is most uncertain. His financial statement dated 28 September 2021 records $64,200 as a loan owing to his partner for this purpose, and he says that she has paid all his legal fees. However his statement of costs dated 19 December 2021 suggests that his total costs are in the region of $180,390. It is difficult in light of the husband’s treatment of this issue to know what he has spent on legal fees, but it would seem to be a very considerable sum, courtesy of his new partner, whatever it is.
Suffice to say that I do not believe the husband’s evidence in relation to the nature of his financial relationship with his new partner. The position as he described it would have the Court accept that he goes through life without any access to his own funds whatsoever, and that his partner is some sort of money font who will provide seemingly unlimited funds to him - perhaps hundreds of thousands of dollars to pay legal fees - in circumstances where he says he makes no substantial contribution to her business or in any other respect. In my assessment this is highly implausible, if not fanciful, and in the face of his partner’s refusal to answer the subpoena issued to her and in the absence of any documents corroborating the husband’s evidence in this respect, I do not accept that his financial relationship with his partner and more generally is of the kind that he contends it is. It is also noteworthy that in his 30 May 2019 affidavit the husband deposed to having borrowed $25,000 from a friend of his for legal fees, something which in cross examination he appeared to have forgotten and which debt his 28 September 2021 financial statement entirely failed to disclose as a liability.
Having regard to the principles essayed by the Full Court in Weir and in Chang &Su, I regard the husband as having deliberately refused to disclose his true financial position including the nature of his interest in or his involvement in his partner’s business and his access to funds from other sources. I am compelled to a conclusion that the husband has access to an indeterminate and undisclosed source of funds through the beneficence of his partner, or by some other financial arrangement or arrangements. This finding will be relevant when it comes to considering the final orders to be made: see Chang & Su at 89,197-89,198.
However, the difficulty with the husband’s evidence is not confined to the source of his financial resources. Another troubling feature of his evidence was his claim during cross examination (which had not been addressed in his affidavit material) that he suffered from dyslexia and could not read or write, and indeed that he had not read any of his affidavits filed in the proceedings. When challenged about this and how he could have deposed to his affidavits in these circumstances, the husband asserted that his affidavits had been read to him. As counsel for the wife observed, there is no statement in the jurat or other information in the affidavits to this effect, and the wife’s instructions were that the husband could in fact read and write. The position appeared to be, in truth, that the husband could read some things, perhaps most things, but not others.
The husband was not slow to utilise his asserted inability to read in circumstances where there were conflicts between what he had said in earlier affidavits and answers he was giving in cross examination. For example, in his 25 September 2018 affidavit the husband claimed that he and the wife had been given the opportunity by his father to live in the Suburb D property rent free. However, in cross examination he contended that he and the wife had been paying rent when they lived in the Suburb D property. When asked to explain which version of events was correct, the husband disavowed his earlier affidavit saying simply that “someone wrote it for me”. He adopted this approach on a number of occasions where there were discrepancies between his affidavit evidence and his evidence in cross examination.
It also became clear during cross examination of the husband that he was prepared to fabricate matters in court and other documents if it suited his purposes to do so. As much was clear in relation to the examination of a judgment debtor form the husband completed in the Magistrates’ Court on 16 February 2012 which contained information that was plainly wrong and which in cross examination the husband accepted was wrong. The same is also true in relation to vehicle registration documents which the husband falsely submitted to VicRoads in the name of his mother so as to attract some sort of pensioner discount on vehicle registration fees. After lengthy cross examination on the subject the husband admitted that he was in the habit of placing motor vehicles that he owned in his mother’s name. The husband even signed an application for a personal loan from the ANZ Bank which, in the statement of financial position, claimed total property assets of $1,370,000. This figure was plainly referrable to property assets which included the Suburb D property, but on being challenged about it the husband claimed that he just signed the document without its contents being read to him by the broker. He was, however, unable to explain where the broker had obtained the information included on the form about his total property assets. The reality of course, and I accept, is that this information had been given to the broker by the husband himself. It suited him at the time to claim that he owned the Suburb D property and so he was content to sign the loan application form on this basis; but it did not suit him at the trial to admit that he had claimed to have owned the Suburb D property, so he said that he signed the document without its contents being read to him.
Most significantly, the difficulties with the husband’s evidence extended to his recollection of key events concerning the purchase of the Suburb D property in 2006 and discussions he had with his father at the time and thereafter about the purchase. In cross examination he was unable to recall certain matters, such as the basis on which the Suburb D property was purchased, but he seemed to have no difficulty recalling why he signed the contract of sale, rather than his father. It was not at all clear why he could remember some things so vividly from 2006, but had very little recollection of other events at that time. Nor was the husband adverse to making claims without any foundation, such as his preparedness to pay maintenance to the wife, child support, and the arrears of the children’s school fees which remain owing. His cross examination in relation to this “offer” of support was demonstrative of the husband’s insincerity, and even his own counsel was at pains to ensure that the husband’s “concessions” on this subject did not amount to anything that could find its way into a minute of consent orders. It may be regarded as telling that, notwithstanding the husband’s assurances in cross examination, the husband’s proposals for final orders make no mention of payments of maintenance to the wife, child support, or any other payments for outstanding school fees and the like. Like so much of his evidence, the husband’s claim to be prepared to make these payments was little more than cant, said for effect during the trial.
It is on the basis of these matters, the husband’s evidence more generally, and the opportunity I had to see the husband cross examined over two days and observe his reactions and answers to questions, that I have formed the view that he was a most unimpressive witness. I found him to be a difficult personality, with a tendency to be argumentative and purposefully obtuse in his answers to questions in cross examination. His answers were almost uniformly fashioned in a way that he thought would best suit his case, although his assessments in this regard were frequently misconceived. He was generally reluctant to concede any point in cross examination which he thought might be contrary to the case prosecuted by him and his parents, even where there were contemporaneous documents which ran counter to the position for which he or they contended.
I have therefore taken the view that the husband’s evidence in relation to contentious matters needs to be approached with the utmost caution. I warned the parties of my views in this regard at the conclusion of the evidence, noting that I would have difficulty in accepting anything much that the husband (and the husband’s parents) said about any relevant matter which was not able to be objectively verified. Where the husband’s evidence in relation to particular matters contradicts the wife’s and is not supported by contemporaneous documents, I have preferred the evidence of the wife.
As I have said, on the whole I regard the wife as a witness of truth. Although she was naturally convinced about the correctness of her case and was sometimes slow to make concessions, generally she answered questions openly, and it was plain that her experiences with the husband, over several years, have caused her considerable anguish and ongoing distress. I have generally been prepared to accept her evidence in relation to particular matters, particularly in relation to assurances that she has been given by the husband’s father in relation to the beneficial ownership of the Suburb D property.
Insofar as the father’s parents are concerned, unfortunately I accept, as the wife submits, that the husband’s father was evasive and arrogant and that save with one important exception he refused to make any concession where he thought that to do so may not assist his case. The concession which he did make, to which it will be necessary to come, had the appearance of being made unwittingly. He needed to be reminded on a number of occasions to answer the question that was being asked, and he often refused to engage, claiming that he could not remember, or that he did not understand. I did not regard his evidence, particularly about critical conversations, as at all compelling and I found his memory to be highly selective. I formed the view that he was determined to do all that he could to avoid the wife being given a share of the Suburb D property. Where the evidence of the husband’s father in relation to particular matters contradicts the wife’s and is not supported by contemporaneous documents, I have preferred the evidence of the wife.
As to the husband’s mother, her evidence was of little assistance to the Court. It was plain that she went along with whatever her husband wanted to do, and to use her language, she regarded him as “the boss”. She claimed to have little recollection of anything that did not assist the case that she and her husband were prosecuting, and some of her evidence was contrived, or plainly unbelievable. Her claim that she did not discuss the renovations to the Suburb D property with the husband and the wife fell into this latter category.
With these preliminary observations in mind and recognising that the first step in determining an application pursuant to s 79 of the Act is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property of the marriage, I turn now to the matters which divided the parties in relation to the asset pool.
THE ASSET POOL
The parties were requested by the Court to provide a joint balance sheet at the conclusion of the trial. For whatever reason this request was not able to be accommodated and instead a document referred to as an “asset values sheet” was provided on 11 February 2022. In the final two columns the husband and the wife stated their respective positions in relation to each item. For what it is worth, the so-called asset values sheet is reproduced as follows:
1. Asset Husband’s Value Wife’s Value Husband’s Notes Wife’s Notes 2. Z Street, Suburb D $825,000 $825,000 Single Expert Valuation agreed 3. Lathe, Mill Machine & Drill Press $700 Husband says value as per Mr E valuation Wife says value is included within item 13 below 4. Motor Vehicle 9 $15,000 $30,000 Husband may retain (as per his orders sought) at $30,000 as part of his 30% in the event Z Street in the pool. If Z Street not in the pool, Wife retains 5. Motor Vehicle 1 $90,000 $90,000 Wife keeps 6. Motor Vehicle 7 $6,000 $7,000 Husband keeps 7. Motor Vehicle 6 $10,000 $14,000 Husband keeps 8. Motor Vehicle 5 $25,000 Proceeds of sale Wife refers to closing submissions 9. Motor Vehicle 2 $24,000 $24,000 Wife keeps 10. Motor Vehicle 3 $8,500 $7,000 Wife keeps 11. Motor Vehicle 4 $8,000 $6,000 Wife keeps 12. Motor Vehicle 8 - $7,500 Husband says belongs to his Mother Husband was cross examined as to this item and Wife says it is his and he may keep it 13. Motor Vehicle Parts - $46,000 Husband says all parts belong to third parties, refers to Wife’s evidence in cross examination on this point Wife says any third party property is excluded from valuation and Husband’s position now is different to his affidavit and case outline (wherein he said $20,000) 14. Bicycle $500 $4,000 Not valued by either party Husband keeps 15. Miller Welder $400 Husband says value as per E valuation Included in item 13 (see page 33 of E affidavit 29.6.21) 16. Antique Welder $80 Husband says value as per E valuation as above 17. Sand Blaster $150 Husband says value as per E valuation as above 18. Tool Chest $300 Husband says value as per E valuation as above 19. Contents of Assorted Tools $600 Husband says value as per E valuation as above 20. Belt Sanders (x2) $300 Husband says value as per E valuation as above 21. Custom Frame Jig $500 as above 22. Pipe Benders (x2) $280 Husband says value as per E valuation as above 23. Raw Materials Under House $100 as above 24. Assortment of Tyres & Wheels Husband says all parts belong to third parties See Wife’s comment as to 13 above 25. Retractable Hose Reels (x2) $160 Husband says value as per E valuation as above 26. Tools & Equipment $900 Husband says value as per E valuation as above Superannuation 27. Super Fund 1 (Wife) $44,000 28. Super Fund 2 (Husband) $52,773
It will be apparent that the asset values sheet does not include liabilities, however it is the wife’s case that she has an approximately $100,000 debt comprising loans from family members and friends to pay her legal fees. At the trial counsel for the wife submitted that this liability should be accounted for in the asset pool, whereas the husband says it should be excluded. Although this $100,000 liability has not been included in the asset values sheet, having regard to the wife’s position at trial and her written submissions, I proceed on the basis that she proposes that this debt be taken into account in the calculation of the asset pool.
In any event, in the absence of a joint balance sheet in a more conventional form it is convenient to proceed for present purposes by reference to the asset values sheet. Given the significance of the Suburb D property for the asset pool it is logical to begin with the question of whether the husband and the wife are properly to be regarded as having a beneficial interest in that property, and thus whether and to what extent it should form part of the pool. The other areas of disagreement about particular items in the asset pool will then be separately considered.
The Suburb D Property
The parties’ respective positions in relation to the Suburb D property have already been described. As the husband’s parents correctly submit, the three issues for determination are:
(a)first, are the husband’s parents estopped from denying the husband and the wife an interest in the property?
(b)secondly, do the husband’s parents hold the property, or a portion of it, for the benefit of the husband and the wife pursuant to an implied or constructive trust? and
(c)thirdly, do the husband’s parents hold the property, or a portion of it, for the benefit of the husband and the wife pursuant to a resulting trust?
Although the wife’s submissions deal in a somewhat broad brush with the relevant authorities, and the submissions of the husband’s parents outline much more comprehensively the relevant law in relation to proprietary estoppel, joint endeavour constructive trusts, common intention constructive trusts, and resulting trusts, there did not appear to be substantial dispute between the parties as to the applicable legal principles. At a level of generality I accept the statements of principle advanced by the husband’s parents and the wife in their submissions in relation to each of the claims made by the wife. However before turning to the relevant evidence it is important to emphasise certain of the principles concerning proprietary estoppel which are of particular relevance in the circumstances of this case.
Relevant legal principles
The wife claims pursuant to the two types of proprietary estoppel: estoppel by acquiescence and by representation. The requirements of proprietary estoppel were reiterated by the High Court in Sidhu v Van Dyke (2014) 251 CLR 505 at 511 (French CJ, Kiefel, Bell and Keane JJ) (“Sidhu”) as follows:
[2] In Giumelli v Giumelli, it was said that the category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn and Ramsden v Dyson is now a “well recognised variety of estoppel as understood in equity”, which affords relief “found in an assumption as to the future acquisition of ownership of property … induced by representations upon which there had been detrimental reliance by the plaintiff”.
In the present case, as in Sidhu, questions arise as to the sufficiency of proof of detrimental reliance required to give rise to a sound claim for relief based on this category of estoppel, and the appropriate measure of equitable compensation.
Nonetheless, as the High Court noted in Sidhu, proprietary estoppel vindicates the expectations of the representee against a party who seeks unconscionably to resile from an expectation he or she has created: Sidhu at 527, citing Donis v Donis (2007) 19 VR 577 at 582–583, [18]-[20] (Nettle JA, Maxwell ACJ and Ashley JA agreeing) (“Donis”). These paragraphs in Donis to which the High Court referred in Sidhu are instructive in the present context. Nettle JA (as his Honour then was) said as follows:
[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 [(1988) 164 CLR 387] and Commonwealth v Verwayen [(1990) 170 CLR 394] and in particular in the observations of Mason CJ in Verwayen that: [at 412 (emphasis added)]
… 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 [(1999) 196 CLR 101] 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. [Olsson v Dyson (1969) 120 CLR 365 at 378–9; Meagher, Heydon, Leeming, Meagher, Gummow & Lehane’s Equity, Doctrines & Remedies at [17–085]; see also Pascoe v Turner [1979] 2 All ER 945 at 949; [1979] 1 WLR 431 at 436]. 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. [Sullivan v Sullivan (2006) 13 BPR 24,755 at 24,758, [20]; (2007) ANZ ConvR 54, per Handley JA, who dissented in the result but whose judgment contains a thorough and, with respect, persuasive analysis of the relevant authorities. See also Handley, “The three High Court decisions on estoppel 1988–1990”, (2006) 80 ALJ 724.]
[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. [Jennings v Rice [2003] 1 P & CR 8 at [50] per Robert Walker LJ] Thus, as was also said in Giumelli v Giumelli, [at 125, [49]] 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” [Jennings v Rice, ibid; Sullivan v Sullivan at 24,758, [23]] 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. [Plimmer v Mayor, Councillors and Citizens of the City of Wellington (1884) 9 App Cas 699 at 714; Pascoe v Turner [1979] 2 All ER 945 at 949; [1979] 1 WLR 431 at 436] 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. [Flinn v Flinn at 744, [96]; Gillett v Holt [2001] Ch 210 at 232]
(Emphasis added)
Dealing further with the notion of the minimum equity, Nettle JA observed:
[32]… But, as has been seen, the effect of Giumelli is that, assuming that the promise, reliance and detriment have been established, the promisee is prima facie entitled to have the promisor held to the promise, and the court then considers all the circumstances of the case in order to determine whether it is necessary to mould or modify the relief to avoid going beyond what is required for conscientious conduct. As Brooking JA explained in Flinn v Flinn, [at 749–50, [119]] Giumelli means that departure from the assumed state of affairs is contrary to the requirements of conscientious conduct and it is a question depending on all the circumstances of each case whether departure is to be permitted.
…
[34] Bearing in mind what Deane J said in Verwayen, [at 462 per Deane J; and see also Gillett v Holt [2001] Ch 210 at 233 per Robert Walker LJ] I allow that an estopped party would not be held to a promise to transfer property worth $1m if the only detriment suffered by the party entitled to the benefit of the estoppel were the outlay of a couple of hundred dollars in constructing a shed on the land. But I take the reason for that to be that the outlay of a couple of hundred dollars on something as insignificant as a shed would be such a small and impersonal degree of detriment as to be wholly compensable in cash. Where, however, as here, the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature, it is in my view 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.
(Emphasis added)
Noting that the cases following Dillwyn v Llewelyn (1862) 45 ER 1285 are exceptions to the general rule that equity will not assist a volunteer and not compel the completion of an incomplete gift, Nettle JA expressed the principle underlying proprietary estoppel as follows:
[36] … As it is put in Meagher, Gummow and Lehane’s Equity, the fraud of the promisor and the action of the complainant are sufficient to produce equity’s intervention where it would otherwise decline interest. The underlying principle is that conduct of the promisor in engaging the complainant to change his or her position to their detriment on the footing that the promised property will be theirs, when acted upon by the complainant, creates an equity which binds the promisor to make good the expectation. Hence, the detrimental reliance which supports the estoppel need not constitute consideration in any sense.
(Emphasis added)
As the Victorian Court of Appeal observed in McNab v Graham (2017) 53 VR 311 at 340, [97] (Tate JA, Santamaria JA and Keogh AJA agreeing), what lies at the heart of proprietary estoppel is the encouragement of an acquisition of an interest in property. The relevant representation can be inferred from conduct: Legione v Hateley (1983) 152 CLR 406 at 438–439 (Mason and Deane JJ). And as McMillan J noted in Clementi v Rossi [2019] VSC 725 at [297] (“Clementi”), while it must be in clear terms, in cases of proprietary estoppel the test is less stringent and the precision of the promise relied on does not need to be proved to the same standard as that required to establish promissory estoppel: see also Laird v Laird & Anor [2021] VSC 352 at [17] (McMillan J); McDonald v Dunscombe [2018] VSC 283 at [17] (McMillan J); Mould v Canale [2017] VSC 793 at [49] and the cases there cited (Macaulay J); Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1 at 67, [215] (Nettle J). It is also well accepted that in the familial context the clarity of the representation may be less precise and legalistic than in general commercial circumstances: Clementi at [297]; Tadrous v Tadrous [2012] NSWCA 16 at [39] (Meagher JA, with whom Young JA and Handley AJA agreed); MacDonald v Frost [2009] EWHC 2276 at [20]; Gillett v Holt [2001] Ch 210 at 226 (Robert Walker LJ, with whom Beldam and Waller LJJ agreed); Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752 at 1781-1782, 1789 (Lord Walker of Gestingthorpe, with whom Lord Brown of Eaton-Under-Heywood agreed); GE Dal Pont, Equity and Trusts in Australia (Thomson Reuters, 7th ed, 2019) [10.120].
The husband’s parents submitted by reference to Carter v Brine [2015] SASC 204 at [326]-[327] (Blue J) (“Carter”) and E Co v Q [2018] NSWSC 442 at [912] (Ward CJ in Equity), and I accept, that the elements of proprietary estoppel by representation have been described as follows:
(a)a representation by the defendant to the plaintiff that the plaintiff has or will have a proprietary interest in property owned wholly or partly by the defendant (representation);
(b)the plaintiff forms an assumption that he or she has or will have a proprietary interest in that property (assumption);
(c)the conduct of the defendant in making the representation causes or materially contributes to the formation of that assumption by the plaintiff (reliance);
(d)the plaintiff takes action in change of his or her position in reliance on that assumption (inducement);
(e)the plaintiff would suffer detriment if the defendant were permitted to depart from the assumption (detriment);
(f)it would be unjust or unconscionable for the defendant to depart from the assumption (unconscionability).
Similarly, Blue J described the elements of proprietary estoppel by acquiescence in Carter as follows:
(a)the plaintiff forms an assumption that he or she has or will have a proprietary interest in property owned wholly or partly by the defendant (assumption);
(b)the defendant knows that the plaintiff has formed that assumption, it is erroneous, and the plaintiff is acting on it but remains silent when the defendant has a duty to inform the plaintiff that the assumption is erroneous (representation by silence);
(c)the conduct of the defendant in remaining silent in that knowledge and in breach of that duty causes or materially contributes to the continuation of that assumption by the plaintiff (reliance);
(d)the defendant takes action in change of his or her position in reliance on that assumption (inducement);
(e)the plaintiff would suffer detriment if the defendant were permitted to depart from the assumption (detriment);
(f)it would in all the circumstances be unconscionable for the defendant to depart from the assumption (unconscionability).
In Harrison v Harrison [2011] VSC 459 at [18] Kaye J proffered a similar description of the elements of proprietary estoppel.
It is by reference to these elements of proprietary estoppel by representation and acquiescence and bearing in mind the principles underlying this variety of estoppel that it is necessary to consider the relevant evidence concerning the purchase of the Suburb D property and the parties’ subsequent dealings with one another in relation to that property.
Before doing so however it must be observed that, for the most part, the parties give significantly differing accounts of relevant conversations and dealings concerning the Suburb D property and the purchase, occupation, and use of it. There is also a paucity of contemporaneous documents bearing on the critical matters for determination. This renders the task of determining what was said and done more than usually difficult, and elevates the significance of circumstantial evidence in assessing the relevant facts. In cases such as this it is critical to have regard to the combined weight of all the relevant facts and circumstances. As Winneke P observed in Transport Industries Insurance Co. Ltd v Longmuir [1997] 1 VR 125 (“Longmuir”) at 128:
In cases of circumstantial evidence each proven fact may gain support from the others and, although each, considered in isolation, might not provide a sound basis for inferring the ultimate fact to be proved, a combination of all facts might provide a compelling basis from which to draw that inference.
The evidence must be considered as a united whole in order to evaluate whether the wife has established what she ultimately seeks to prove on the balance of probabilities in accordance with s 140 of the Evidence Act 1995 (Cth) (“the Evidence Act”): namely, that a proprietary estoppel has been created in favour of her and the husband and that the husband’s parents can only fulfil their equitable obligation by making good the expectation that they have encouraged or in which they have acquiesced, if that is what has occurred. As Tadgell JA emphasised in Longmuir at 141:
A true picture is to be derived from an accumulation of detail. The overall effect of the detailed picture can sometimes be best appreciated by standing back and viewing it from a distance, making an informed, considered, qualitative appreciation of the whole. The overall effect of the detail is not necessarily the same as the sum total of the individual details: cf. Hall (Inspector of Taxes) v. Lorrimer [1992] 1 W.L.R 939 at 944; Shepherd v. R. (1990) 170 C.L.R 573 at 579-80.
These observations are of particular relevance in the present context. As will become apparent, it is by stepping back and looking at all the evidence as a whole and from a distance that it becomes clear that the husband’s father has made representations to the husband and the wife, on which the wife at least has relied, which gives rise to a proprietary estoppel precluding the husband’s parents from denying the husband and the wife their beneficial interest in the Suburb D property.
The circumstances of the purchase of the Suburb D property
The background to the purchase of the Suburb D property was addressed in some detail in the parties’ material and at the trial. To begin with, the husband says that prior to moving into the Suburb D property in 2006 he and wife were renting in a nearby suburb and that because the rent was so high (as much as $50,000 per annum he said in cross examination), he sought to obtain a loan to purchase their own property. In a similar vein the wife’s evidence is that she and the husband were paying rent elsewhere and they decided that it would be more prudent to purchase their own property rather than continue to waste money on rent. It is not altogether clear how much they were spending on rent as both the husband and the wife have different recollections and the available documents do not provide an answer.
It is also unclear what financial position the husband and the wife were in at the time. They were operating two businesses, but accounts vary as to how successful these business were. It would seem that the husband’s business partner had left, and that, if the wife is to be believed, the husband was mismanaging the businesses. The husband says that they were struggling to pay the rent and had to work second jobs, and that the wife’s sister had loaned them money
Nonetheless, it would seem that at least in part the businesses were being conducted on a cash basis, and I accept the wife’s evidence that the husband was in charge of the finances. Whether, as the wife contends, there was a lot of money coming in and they were in a position to obtain a bank loan and purchase their own home is hard to know at this distance, however it would seem that there was at least a figure of some $80,000 which was available in the business to pay the husband’s business partner out when he left.
In any event, the wife says that in early 2006 she and the husband commenced looking for a property together. According to her they inspected several houses over a two month period and that they saw the Suburb D property advertised for sale at P Real Estate. The husband’s evidence was that they only ever looked at the Suburb D property. This seems counter-intuitive, but probably not much turns on it. It is clear that both the husband and the wife regarded the Suburb D property as suitable for business purposes because it had a good sized garage, and that the wife at least regarded it as providing a suitable home.
The husband says that he was not able to obtain a loan to purchase the property. However whether or not this is true is difficult to determine definitively in the absence of contemporaneous documents. It may well be that the husband and the wife did not have the income to secure finance for the purchase of the Suburb D property or some other suitable home. But it may also be that, knowing his parents’ relatively comfortable financial position, and that he was their only child, the husband did not make any serious efforts to obtain bank financing for the purchase of their own property. He may well have considered that as was to occur, his parents would likely assist him as necessary. Whatever be the position, it is clear that the husband went to his parents for assistance with a loan to purchase the Suburb D property. The husband says in his affidavit that his father suggested he go and look for a property, and that subsequently he found the Suburb D property. However the husband was less definitive about this in cross-examination when he admitted that he could not recall the details of his conversation with his father, but he accepted that he asked his father for help if he was unable to obtain a loan.
For his part the husband’s father says that the husband came to visit him and his wife in 2006 and told them, amongst other things, that he had found the Suburb D property and needed financial assistance to secure it. It is clear that the husband’s parents wanted to assist the husband (and presumably the wife) by buying a house, and although the husband denies this I accept that his father told him that renting was a waste of money and it was better to put funds into a house that eventually the husband and the wife could own.
Whatever be the precise order of events, and whether or not the husband and the wife could have in fact obtained a loan, the husband and his parents obviously came to some sort of agreement about the purchase of the Suburb D property. Quite what they agreed, however, is somewhat unclear on their versions of events in their respective affidavits. The husband says that when he went to see his parents for assistance he suggested to them that they buy a property, and that he could rent it from them. However the husband’s father says that when the husband came to him and his wife in 2006 the husband had already found the Suburb D property. He says that the husband suggested that if he could not obtain a loan, then his parents could buy the property and the husband could rent it, thereby enabling him to save money to buy his own house later on.
The husband’s father says that he told the husband that he and his wife would buy the Suburb D property if the husband could not obtain a loan, and that the husband and the wife could live there rent free and run their family businesses from there. He says that he told the husband that he would take out a loan to purchase the property and that the husband would have to make the interest repayments on the loan and pay all expenses, rates, utilities and insurances and keep the property in good repair. The husband’s father says that as long as the husband did that, he could live at the property rent free and save money for his own property. The husband’s father says that the husband agreed to this arrangement, and that the wife was not involved in this discussion.
Although the husband’s parents have maintained in their material that the Suburb D property belonged to them and that the husband and his wife had not acquired any beneficial interest in it, the husband’s father conceded in cross-examination that his position was that if the husband and the wife had met the mortgage payments then it would ultimately have become their property and that this was what he had agreed in 2006 with the husband. The relevant part of the cross examination at pages 383-384 of the transcript proceeded as follows:
[Counsel for the wife]: When the property was bought it was your intention, and you knew it was [the husband] and [the wife’s] intention that it was going to be their house, that’s right?
THE INTERPRETER: When they were paying for the mortgage, yes, it would have been theirs.
THE WITNESS: Yes.
[Counsel for the wife]: They did pay for the mortgage.
THE INTERPRETER: There were arrears – they were late, and they would have to pay it for the whole mortgage for it to be theirs.
[Counsel for the wife]: So when the house was bought in 2006 the agreement was it was going to be their house if they paid the mortgage?
THE INTERPRETER: Yes.
[Counsel for the wife]: And it was going to be their house; they would own it. If they paid the mortgage it was going to be their house; they would own it.
THE INTERPRETER: Yes.
[Counsel for the wife]: And they made the mortgage repayments. They made the loan repayments. Sometimes they were late, but they made the loan repayments for seven years?
THE INTERPRETER: Yes.
[Counsel for the wife]: And you chose to say to them they don’t need to make loan repayments any more in 2013?
THE INTERPRETER: Yes. When I paid off the loan, and I told them to save money to buy their own house.
[Counsel for the wife]: As far as you were aware they would have kept making the payments if you hadn’t have paid out the loan?
THE INTERPRETER: I can’t – I have to recap because it was a bit mumbled. Is that all right or do you want me to – yes. Okay... I pay off the loan because they were late in making payments and I had health issues and I didn’t want any more stressors.
(Emphasis added)
In my assessment this evidence is significant. I take it to be a material concession on the part of the husband’s father that the Suburb D property was bought as and intended to be the property of the husband and the wife, so long as they made the mortgage repayments on the loan that the husband’s parents needed to obtain to purchase the property. I accept that this is what occurred. It is consistent with the apparent logic of events, including what happened thereafter. It would seem that the husband’s father also accepted in cross examination that the husband and the wife did not ask him to pay the loan in 2013, but that he decided to do so in order that the husband and the wife could be relieved from the obligation to keep making the mortgage repayments and because he did not want the stress of worrying about whether they would be late with the repayments. This too is of critical importance in understanding the nature of the arrangement between the parties.
As the wife submits, it is difficult in light of this concession for the husband’s parents to maintain that the purchase of the Suburb D property occurred other than with the common intention that it be owned beneficially by the husband and the wife, provided they paid the mortgage on the loan obtained to fund its purchase. Indeed, it is substantially correct that the only difference between the husband’s father’s evidence about the agreement between him and the husband in 2006 and the wife’s case is that the husband’s father asserted that the ownership of the property was contingent upon the mortgage repayments being made. But whether or not this difference matters may fairly be questioned. The husband’s father accepted that the husband and the wife made the mortgage repayments, although they were sometimes late. As the wife submits, it is hard to see that it would be open to the husband’s parents now to say that the occasional failure to meet the repayments could provide a conscionable basis to deny the husband and the wife their beneficial interest in the property in light of what subsequently transpired.
Having regard to these matters the question of whether the husband and the wife were in financial difficulties in 2006 prior to the purchase of the Suburb D property and would not have been able to buy the property without the assistance of the husband’s parents recedes in significance. Perhaps they would not have been able to obtain a commercial loan to purchase it. The evidence on the question is not altogether clear. But perhaps they did not need one. It may well have been that the husband was content to keep his borrowing within the family, so to speak. Certainly as his parents’ only son it can readily be imagined that this course would have been an obvious one if his parents agreed in it. Plainly they did, and in doing so they represented to the husband and the wife that that the two of them would have a proprietary interest in property legally owned by them if the husband and wife paid the instalments on the loan which the husband’s parents obtained on the security of another property in order to purchase the Suburb D property.
In all the circumstances I regarded Ms J as a credible witness and one who gave probative evidence as to her observations of the wife over the course of at least four years. I accept her evidence that at least a cause of the wife’s distress as she has observed it is the family violence to which the wife has been exposed.
Dr H – consultant psychiatrist
The wife also relies upon a psychiatric report of the husband prepared on 26 June 2019 and a similar report of the wife prepared on 1 July 2019 by Dr H. The report concerning the wife recorded that she described “low-grade but persistent symptoms of [PTSD], including depressive symptoms”. Dr H also noted that the wife described symptoms of PTSD characterised by “re-experiencing, avoidance, hyper arousal, mood and cognitive symptoms of PTSD”. He also noted that she described a “history of repeated emotional, verbal, physical and sexual abuse” by the husband, and that taking her story at face value the abuse would be the causative factor with regard to the PTSD.
The husband submits that this evidence is of limited assistance given that Dr H relied upon matters not in evidence (being the Family Reports), and that Dr H stated that the wife did not demonstrate any major cognitive deficits or signs of severe mental illness. He notes also that Dr H was told by the wife that she did not have any previous psychiatric history or treatment by a psychiatrist, psychologist or counsellor, and that Dr H did not question the wife about the violent behaviours she had alleged against the husband.
Dr H did not give evidence at the trial. For whatever reason he was unavailable. Nevertheless the wife says that he is an independent expert who was appointed on the joint instructions of the parties and that his evidence ought largely to be accepted. In all the circumstances however, I did not find Dr H’s report in relation to the wife of much assistance. It is not apparent that he questioned her on her allegations about the father, and in any event he was not cross-examined at the trial.
Conclusion on family violence
Having regard to all of the evidence, I am satisfied that the husband subjected the wife and the children to family violence within the meaning of s 4AB of the Act during the course of the marriage. I accept that the husband engaged in serious family violence, involving physical assault, verbal abuse and threatening behaviour. I accept also that the husband was generally controlling throughout the marriage. I have formed this view because there can be identified a core consistency in the wife’s evidence in relation to the family violence she endured at the hands of the husband. It finds support in the recollections of her sister, and in the report of her psychologist Ms J. The wife was believable in cross examination when she was asked about some of the relevant incidents, and counsel for the husband (perhaps unsurprisingly) did not probe very far in his cross examination of the wife in relation to these matters. In any event, as I have said, I have generally been disinclined to believe the husband where his evidence conflicts with the wife’s evidence. In my assessment his denials of the relevant conduct were not compelling.
It follows that I do not accept the husband’s submissions that the wife’s evidence as to family violence is insufficient, and that she fails to give particulars of what is alleged. She has in fact given detailed particulars of her allegations, and both she and the husband have been cross examined in relation to these matters. Nor do I accept the husband’s submission that he was not pressed in cross-examination on the extent to which he subjected the wife to family violence. He was asked about many of the particular incidents the wife described in her affidavits, and he denied the incidents.
All things considered I am prepared to accept that the course of violent conduct to which the wife was subjected by the husband during the course of the marriage would have made her contributions significantly more arduous: see Kennon at 84,294; S & S at [43]-[44]. As the relevant authorities acknowledge, the Court can draw an inference that family violence perpetrated by one party to a marriage may impact upon the contributions that the other party was able to make: see Britt at [74]-[75]; Benson & Drury at [49]. I draw such an inference here. The family violence to which the wife was subject was significant, and I accept long lasting. Sometimes it occurred in front of the parties’ young children while the wife was caring for them. I therefore find that there should be additional weight given to the wife’s contributions, both as a homemaker but also insofar as her role in paid employment was concerned. The family violence must surely have affected her contributions in all respects. It is unnecessary for me to quantify that impact in percentage terms, but I have regard to it on the question of contributions more generally.
Assessment on contributions
As has been mentioned, the wife has conceded that the Suburb D property is to be regarded as a contribution made by the husband through his parents. It has been valued at $825,000, in the context of a total asset pool of $1,178,243. The Suburb D property thus represents some 70 per cent of the asset pool.
Bearing this in mind, and paying particular regard also to my finding that the wife made a substantially greater contribution than the husband to the welfare of the family in the capacity of homemaker and parent, and that she also made a significant financial contribution in her own sphere, and that her contributions were made more arduous by the family violence to which she was subject by the husband, I determine that contributions should be assessed as about 45 per cent to the wife and 55 per cent to the husband. All things considered I regard this as a just and equitable basis on which to approach the question of what orders would be appropriate for the purposes of s 79(1) of the Act. This finding recognises that the husband has made a substantial contribution through the Suburb D property, but it also recognises the wife’s own substantial financial contribution and her very significant contribution to the family as home maker and parent to the couple’s two young children; both classes of contributions made in the context of serious and persistent family violence.
RELEVANT MATTERS REFERRED TO IN SECTION 75(2)
Section 79(4)(e) of the Act requires that in making an order pursuant to s 79(1) the Court take into account, as relevant, the various matters prescribed in s 75(2) of the Act. The husband seemed to concede in his oral closing submissions that if the Suburb D property were to be excluded from the pool it would be appropriate for there to be an adjustment in favour of the wife. His case outline concedes that a 10 per cent adjustment in her favour would be appropriate. Whether these concessions are to be taken as extending to circumstances where the Suburb D property is included, is not clear. The husband’s written closing submissions are equivocal on the subject.
The wife submits that there should be a substantially greater adjustment on s 75(2) factors in her favour if there is a small asset pool (with her having as much as 87 per cent of the pool were the Suburb D property to be excluded) and that several matters listed in s 75(2) are more applicable to her than the husband. If the Suburb D property is included in the pool as she conceives it, she says that she should have 70 per cent, or approximately $730,000. This she says would give the husband approximately $310,000, inclusive of items that she would be content to have him retain, together with the motor vehicle spare parts. Superannuation would remain as it presently exists (being close to equal).
For reasons I will explain, taking everything into account I consider that the wife should have an adjustment of 15 per cent by reference to the relevant matters referred to in s 75(2) of the Act.
Section 75(2)(a)
The wife is 43 years of age and plainly suffers from poor mental health. Although the wife points to the impact of family violence upon her mental health, Ms J gave promising evidence of her recovery, opining that upon the conclusion of the proceedings the wife would likely recover her “usual psychological stability, resilience, livelihood and financial independence”.
The husband is presently 54 years of age and accepts that he is in reasonable health. He says that to the extent the wife’s mental health has been affected, that has been by reason of the litigation, and not by his conduct during the relationship.
Whilst I accept Ms J’s evidence that the wife’s mental health may improve, I am of the view that her present state of psychological health is sufficiently uncertain that it is appropriate for there to be a s 75(2)(a) adjustment in her favour.
Section 75(2)(b)
Insofar as s 75(2)(b) is concerned, the wife says that she has a limited earning capacity as her time out of the workforce as a mother to the couple’s two young children has impacted her in this regard. Despite this, she conceded in cross-examination that she would hope to obtain full time employment when the children returned to school and that if she could obtain full time employment she agreed she might earn from $40,000 to $60,000 per annum. The wife said that she was confident she would be able to obtain work, that she has lots of skills, and that she could support herself and the children. She submits that the husband has a substantially greater earning capacity because, in reality, he has not stopped working and he likely has substantial financial resources in the form of his current partner which he has failed to disclose and has deliberately obfuscated.
The husband submits that the wife is some 11 years younger and that she can be expected to earn an income for a longer period of time than he will. He says that while he does have a capacity to earn an income, it is roughly equivalent to that of the wife. Of course he maintains that he is not presently in paid employment and that he is reliant upon his partner for financial support. He also says that the wife holds valuable qualifications and experience in retail, trades and education.
Insofar as the husband’s alleged interest in his partner’s business is concerned, the wife submits that it is open to the Court to find that the husband has available to him a significant financial resource. She points to the fact that he cohabits with his new partner, that she has funded him in these proceedings, that she owns certain real property and that she owns a consultancy business for which the husband works but from which he receives no wage. The husband’s position simply is that there is no evidence before the Court that he has any interest in his partner’s business, or in any real or personal property that she may have.
It is unnecessary to plumb the depths of the dispute between the husband and the wife concerning the husband’s failure to disclose his true financial position, and the extent to which he derives an income from or has an interest in his new partner’s business. As I have indicated, I am satisfied that the husband has sought to disguise his true financial position from the Court for the purposes of these proceedings. This is particularly so in relation to the sums expended on legal fees. Having regard to the principles expressed in Weir and Chang &Su, I am prepared to proceed on the basis that an inference can be drawn from the husband’s partner’s failure to answer the subpoena directed to her, and the limited and most unusual nature of the husband’s disclosures about his financial position, that relevant matters are being kept from the Court and that they would not have favoured the husband on the question of the income, property and financial resources available to him. The husband’s non-disclosure is also relevant in the context of s 75(2)(o), a matter to which I will come.
In these circumstances I accept that the husband has a financial resource available to him which is clearly very substantial and which is not available to the wife. His remarkably beneficent partner, who pays all of his expenses, including significant legal fees, seems to ensure that he wants for nothing. I accept also that the husband and wife will likely obtain, or are in the position to obtain, full time employment, although it is unclear whether their income would be relatively equal. Furthermore, I accept that the husband and the wife are both in sufficiently good health to obtain employment. It is also relevant to note that the wife will need to obtain accommodation for herself and the children. Nonetheless, taking all these matters into account, especially the financial resource available to the husband in the form of his new partner, I accept that a significant adjustment in favour of the wife by reference to s 75(2)(b) of the Act would also be appropriate.
Section 75(2)(c)
In relation to s 75(2)(c), the wife is obviously the primary carer of two young children and the husband has not contributed substantially to the support of the children. Notwithstanding his protestations at trial, it appears that he does not propose to do so. Actions speak louder than words, and there appears to be no action. It would seem that the older daughter is privately educated, and that the costs of her education are paid solely by the wife. In a rare show of common sense the husband appears to concede that an adjustment ought be made to take into account the fact that the wife is the primary carer of the two young children. There is evidently a long period of time in which the wife will remain their primary carer, with the children spending only alternate weekends with the husband pursuant to the consent orders of
7 October 2021. I therefore accept that a significant adjustment in favour of the wife on s 75(2)(c) factors would be appropriate.
Section 75(2)(d) and s 75(2)(f)
The wife contends in relation to s 75(2)(d) and s 75(2)(f) factors that she must support herself, that she will derive no support for the children from the husband, that she receives government assistance, and that for reasons unknown the husband has not availed himself of any government assistance. While the wife is not currently employed, she seeks to obtain employment upon the children returning to school, and she is committed to supporting them and therefore has expenses for herself and for them. She says that since separation she has needed to enlist the support of family and friends to make ends meet.
As has been mentioned, the husband maintains that he is not employed and that he is reliant upon his partner for financial support. However he concedes that the Court can find that he has the financial support of his partner, although he submits that there is no admissible evidence that he has any interest in his partner’s business. He accepts that he has assisted his partner in her business, but says that he has done this for love and affection and for support given that she provides for his needs. Although he concedes the Court can take a robust approach to his lack of disclosure, his evidence is he has no other property or financial resources other than what he has disclosed. He submits that if the Court is to find that he held an income earning potential from work in his partner’s business, then this cannot be counted again when considering the financial support he derives from his current partner. He does not explain why, given his asserted lack of employment, he is not in receipt of any government assistance.
As has been indicated, I accept that the husband has a significant financial resource in his partner, and he appears not to have to support himself. I also accept that he provides no child support to the wife, and that the wife has been forced to support herself and the children with government assistance and help from her family and friends. A robust approach should be taken in relation to the husband’s non-disclosure. I accept the wife’s submission that there should be an adjustment in her favour having regard to s 75(2)(d) and s75(2)(f) of the Act.
Section 75(2)(g)
In relation to s 75(2)(g), the wife submits that the evidence is that she has had an above average standard of living, particularly because the parties had chosen private education for their children and had collected expensive motor vehicles. Obviously the wife has been living in the Suburb D property with the children, and the husband lives, apparently comfortably, with his current partner. Whether or not the husband and the wife have enjoyed an above average standard of living is probably a matter of perspective. Whatever be the position, I accept that as the primary carer of two young children without the assistance of the husband her standard of living will almost inevitably deteriorate. A slight adjustment is therefore appropriate in her favour by reference to s 75(2)(g) of the Act.
Section 75(2)(k)
The wife submits in relation to s 75(2)(k) factors that the parties had a lengthy marriage and that her time out of the workforce since October 2016 to devote her time to parenting the children has likely impacted on her earning capacity. She contrasts this to the husband’s position, his own working life not having been affected by the children. For his part the husband points to the wife’s concession that she has the capacity to earn an income of perhaps about $50,000 per annum.
Self-evidently a period of time out of the workforce will almost always affect a person’s ability to regain employment, and the wife has been out of the workforce for almost six years. It is to be noted, however, that she accepted that she was not unskilled and that she would be likely to obtain paid employment. Nevertheless, in my assessment an adjustment in the wife’s favour on the basis of s 75(2)(k) would also be appropriate.
Section 75(2)(l)
The wife contends that she wishes to continue to focus on parenting as her primary concern. It is clear that she will need to do so, as the husband would not appear to be able or willing to perform this role. Both children will now be in school, and it is therefore apparent that the wife will have additional time without the children in her care in which she can attempt to take up some form of employment. The husband accepts that the wife has the primary care of the children, and that she will continue to do so. In my assessment a slight adjustment should be made in the wife’s favour having regard to s 75(2)(l) of the Act.
Section 75(2)(m)
The wife does not cohabit with any other person, and there was no evidence at trial that she had a partner. She contrasts this with the husband’s far more advantageous position in this regard. The wife submits that the husband’s failure to disclose his true financial position and his failure to comply with the order requiring him to bring the subpoena to the attention of his partner means that an inference should be drawn that whatever evidence might have been obtained from the return of the subpoena would not have favoured him. I have accepted that this is so, and that the husband’s circumstances in his new domestic situation are very favourable to him. There should thus be an adjustment in the wife’s favour by reference to s 75(2)(m) of the Act.
Section 75(2)(o)
As I have indicated, the husband’s failure to make proper disclosure of his financial position is also a fact or circumstance which the justice of the case requires to be taken into account for the purposes of s 75(2)(o). It is unnecessary to repeat the conclusions I have formed about this, but the principles expressed in Weir and Chang &Su are clearly of application in all the circumstances of this case, for the reasons I have explained.
Also, it is said by the wife that a further fact or circumstance which it is relevant to take into account is her occasional care for the husband’s daughter from an earlier relationship: see In the Marriage of Robb (1995) FLC 92-555. She also refers to the family violence and the husband’s failure to make proper disclosure, but consideration has been given to these matters elsewhere.
Insofar as the wife’s care of the husband’s child from his earlier relationship is concerned, the wife submitted that she would stay with them every second weekend, that she would care for her whilst the husband worked, that she had a close mother-daughter relationship with the child, and that they undertook various activities together.
The parties were not cross-examined about whether the wife cared for this child to the exclusion of the husband, although the wife’s sister Ms G gave evidence to the effect that there were situations where she would catch up with the wife and the child and the husband would not be present. Although the evidence is limited I am prepared to accept that the wife often did care for this child when she visited the husband, and I regard this as a further matter entitling the wife to an adjustment pursuant to s 75(2)(o) of the Act.
Assessment on s 75(2) matters
Taking all of the s 75(2) considerations into account, particularly having regard to the wife’s role as a primary carer of two young children who has supported the children without assistance financially from the husband, that the husband is unlikely to provide the wife child support, and that the husband has available to him a significant financial resource, in the form of his new partner, in my assessment it would be just and equitable to make an adjustment of 15 per cent in favour of the wife.
FINAL DISPOSITION
On the basis of the agreed valuations at trial and the valuations I have ascribed to particular assets in these reasons, I have concluded that the asset pool (inclusive of superannuation) has a value of some $1,178,243. I have assessed the respective contributions at 45 per cent to the wife and 55 per cent to the husband, with the wife to have an adjustment of 15 per cent having regard to the relevant matters in s 75(2) of the Act. This results in an overall division of 60 per cent to the wife and 40 per cent to the husband.
There will accordingly be orders as set out at the commencement of these reasons on the basis that orders in that form achieve an alteration of the interests of the husband and the wife in the relevant property which is just and equitable. In considering the orders to be made I have had regard to the orders proposed by the wife on 17 December 2021, and by the husband on 2 February 2022. It has, however, been necessary to make various refinements to both competing proposals having regard to the findings which I have made and the need to enable the husband and the wife to retain certain chattels.
As it has been determined that the Suburb D property is held on trust by the husband’s parents for the husband and the wife, there will be a declaration to this effect and there will be orders for the property to be sold within three months and for ancillary arrangements to facilitate the sale. Given that the wife has resided there with the children now for some years, and that the husband now resides with his new partner, there should also be an order that pending the sale the wife have the sole use and enjoyment of the Suburb D property. To protect the wife’s position there should also be an order that neither the husband nor his parents shall encumber the Suburb D property without the written consent of the wife, or an order of the Court. I will return to the manner in which the proceeds of the sale of the Suburb D property are to be dispersed.
For reasons which are not addressed in her closing submissions, the wife proposes an order that the husband be responsible for the council rates, insurances, utilities and apportionable outgoings on the Suburb D property as and when those payments fall due. Having regard to the husband’s disclosed financial position, and notwithstanding his obvious access to funds from his new partner, it is not apparent how it would be appropriate to make such an order. Unassisted by submissions on the subject from the parties, there will not be an order in these terms.
Having regard to the desire of the husband and the wife to retain certain motor vehicles, other chattels, and their superannuation, it is convenient to deal first with orders which would give effect to this before turning to the distribution of the proceeds of the Suburb D property.
It would seem to be agreed by the two of them that the wife should be permitted to retain the following:
(a)the Motor Vehicle 1 (unregistered);
(b)the Motor Vehicle 2 (registered …);
(c)the Motor Vehicle 3 (unregistered);
(d)the Motor Vehicle 4 (registered …);
(e)any bank account in her name; and
(f)all superannuation in her name.
In light of this agreement there will be orders that the wife retain these listed motor vehicles, any bank account in her name, and all of her superannuation in her name. Such orders would see the wife receive some $152,000 worth of motor vehicles (which includes the $25,000 sale proceeds of the Motor Vehicle 5 which have been received and expended by her and added back into the final balance sheet), and $44,000 in superannuation. This total figure represents approximately 17 per cent of the total asset pool, inclusive of superannuation, on the basis of the valuations agreed at trial or as found.
For reasons which are not addressed in her closing submissions, the wife proposes an order that she retain the furniture, furnishings and household contents at the Suburb D property. The husband says nothing about these items either, although his orders do propose that each party retain all other property in their possession. Noting that there has been no evidence as to the value of the contents of the Suburb D property, no allowance was made for them in the asset values table, and they have not been included in the asset pool, it will be sufficient for there to be an order as the husband proposes that each party retain all other property in their possession.
It would also seem to be agreed by the husband and the wife that the husband will retain the following:
(a)the Motor Vehicle 9 (unregistered);
(b)the Motor Vehicle 6 (unregistered); and
(c)all superannuation in his name.
In light of this agreement there will be orders that the husband retain these listed motor vehicles and all of his superannuation in his name.
Neither party has expressed a clear position on the question of which party would retain the workshop, tools and equipment as referred to in Mr E’s report and valued in the final balance sheet at $45,970. However the husband does seek an order that he retain his tools and equipment, including such tools and equipment as are held at the Suburb D property. Unassisted by submissions on this subject but having regard to the husband’s proposed orders, there will be an order that the husband retain the entirety of the workshop, tools and equipment.
Then there is the Motor Vehicle 8 which the husband drives. I have determined that in all the circumstances that vehicle is to be regarded as the property of the parties to the marriage. It seems more sensible for there to be an order that the husband retain the vehicle. If he does not want it, he can sell it.
Finally, neither party seems to have expressed a wish to retain the Motor Vehicle 7 if the Suburb D property is included in the asset pool. The husband’s proposed orders contemplate that the wife would retain this vehicle, whereas in the asset values sheet and her submissions the wife’s position seems to be that the husband may retain the vehicle. For the sake of simplicity and to quell the controversy there will be an order that the husband retain this vehicle. He may sell it if he does not want it.
These orders would see the husband receive some $104,470 worth of motor vehicles and other chattels, and $52,773 in superannuation. This total figure represents approximately 13 per cent of the total asset pool inclusive of superannuation on the basis of the valuations agreed at trial or as found.
Turning then to the distribution of the sale proceeds of the Suburb D property, there will be orders as follows. First, to make payment for the costs of the sale, and also for the discharge of any encumbrance affecting the property. There will then be orders providing for the wife to receive a distribution of such a portion of the sale proceeds that would provide her with 60 per cent of the total asset pool (including superannuation), making due allowance for the approximately 17 per cent of it (including superannuation) that she will retain. In other words, on the assumption that the Suburb D property is sold for $825,000, the wife should receive her remaining approximately 43 per cent from the proceeds of sale, upon the costs of the sale and the discharge of any encumbrance being paid and taking into account that she has retained 17 per cent of the asset pool already. Should the property sell for more or less than $825,000 then obviously the figures of 17 and 43 per cent would change. This would need to be taken into account by the parties in the event that the property sells for more or less than $825,000, and when subsequently distributing to the wife a payment of such a portion of the sale proceeds to ensure that she receives a total of 60 per cent of the pool. The orders to be made to give effect to this employ the use of a formula for the sake of precision.
That portion of the sale proceeds to the wife then must first be applied to pay all outstanding costs and disbursements owing by her to AA Lawyers Pty Ltd in accordance with order 2 of the orders made by consent on 21 December 2021 for this purpose. Secondly, and consistently with orders that were made by consent on 19 December 2019, the husband must be reimbursed from the wife’s portion of the sale proceeds her half share (which he has already paid) of the Family Report prepared by Ms F. From the remaining portion of the wife’s share of the sale proceeds, payment shall be made to her solicitors as her draft orders provide.
The remaining sale proceeds from the sale of the Suburb D property must then be distributed to the husband.
Broadly along the lines of what is proposed by both the husband and the wife, there will also be orders dealing with the following matters. There will be an order for the husband and the wife to do whatever needs to be done to transfer ownership of relevant property from one to the other to give effect to the orders made in relation to motor vehicles, chattels and superannuation. They will also be ordered to indemnify one another against any liabilities in their name, and they will be ordered to forego any claim they may have against one another in relation to superannuation benefits, other employment related benefits belonging to or earned by the other, or interest in any trust or deceased estate that is payable or belonging to or owned by the other.
On the basis that the husband and the wife agree to such an order, there will be an order that any monies standing to the credit of the parties in any joint bank account will be equally divided between the two of them and subsequently closed. Insofar as it is relevant, there will be an order that insurance policies remain the sole property of the owner named therein, and there will be an order severing any joint tenancy of the parties in real or personal property. There will also be an order discharging all other property orders. In addition, in all the circumstances I consider it desirable for there to be an order for the appointment of a Registrar of the Court to execute any document to give validity and operation to the orders if one of the parties refuses to do so as ordered. There will also be an order dismissing all extant applications.
Turning finally to the issue of costs, the wife has sought costs in the prayer for relief in her Amended Statement of Claim, although she says nothing on this subject in her written closing submissions, or in her proposed orders. The husband’s parents have of course sought their costs on an indemnity basis.
Having regard to the findings that I have made and the disposition of the matter, there is no occasion for the award of costs on any basis in favour of the husband’s parents or the husband. However, in the absence of any material or submissions on this subject from the wife it is appropriate for there be orders for the filing of any affidavit material and written submissions of no more than four pages in length by the wife on the question of costs, and for responding material from the husband and his parents on the same basis. Pursuant to r 1.06, item 2(b) of the Rules and the Court’s inherent discretion, any unresolved questions of costs or the implementation of the Court’s orders will be referred to Strum J to be heard and determined on the papers or as otherwise ordered.
I certify that the preceding two hundred and fifty-eight (258) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy. Associate:
Dated: 13 April 2022
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