SUTCLIFFE & SUTCLIFFE
[2015] FCCA 1011
•24 April 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SUTCLIFFE & SUTCLIFFE | [2015] FCCA 1011 |
| Catchwords: FAMILY LAW – Property – parties divorced in 2005 but subsequently had a relationship which the applicant contends was a de facto relationship –applicant seeks a property settlement and contends that the case can be treated either as an out of time s.79 application or a s.90SM claim following the end of a de facto relationship and that it makes no difference which approach is adopted – where the respondent also contends that it made no difference which approach is adopted – whether the outcome would be different if one approach rather than the other was adopted – where the court is of the view that it does make a difference – matter treated as a de facto property claim and orders made pursuant to s.90SM. |
| Legislation: Family Law Act 1975 (Cth), ss.75, 79, 90SF, 90SM Cases cited: Kennon v Kennon (1997) 22 FamLR 1 |
| Applicant: | MS SUTCLIFFE |
| Respondent: | MR SUTCLIFFE |
| File Number: | NCC 1341 of 2012 |
| Judgment of: | Judge Terry |
| Hearing dates: | 29, 30 & 31 July 2014 & 16 October 2014 |
| Date of Last Submission: | 16 October 2014 |
| Delivered at: | Newcastle |
| Delivered on: | 24 April 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Kelly |
| Solicitors for the Applicant: | Bridge Street Lawyers |
| Counsel for the Respondent: | Mr Boyd |
| Solicitors for the Respondent: | A W Simpson & Co |
ORDERS
Pursuant to s.44 (3) of the Family Law Act 1975 leave is granted to the applicant to file this application notwithstanding that more than 12 months has passed since the divorce order took effect.
The money held in Bridge Street Lawyers Trust Account shall be paid:
(a)As to $51,801.00 to the applicant.
(b)The balance to the respondent.
Subject to the preceding order each party is declared the owner to exclusion of the other of all property in their possession, registered in their name or under their control.
If either party refuses or neglects within 14 days of a written request to do so to sign any documents necessary to give effect to these orders the Registrar of the Newcastle Registry of the Federal Circuit Court of Australia is hereby appointed pursuant to s.106A of the Family Law Act 1975 to execute such documents on behalf of such party.
IT IS NOTED that publication of this judgment under the pseudonym Sutcliffe & Sutcliffe is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1341 of 2012
| MS SUTCLIFFE |
Applicant
And
| MR SUTCLIFFE |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property settlement proceedings but what kind of property settlement proceedings they are remains to be seen.
The applicant and respondent married in 2000 and were divorced in April 2005.
When the respondent filed for divorce in February 2005 the parties were living under one roof. They subsequently lived separately for four or five months but then resumed living under one roof and according to the applicant commenced a de facto relationship in (omitted) 2006.
It was the applicant’s case that the de facto relationship ended on 24 December 2011 and she filed an application for property settlement in May 2012. She sought orders pursuant to s.79 of the Family Law Act 1975 and leave to proceed out of time but she gave the date of separation as 24 December 2011 and she completed Part H of the application thus also making a claim for a property settlement pursuant to s.90SM.
The applicant’s counsel submitted that it made no difference whether the court treated the matter as an out of time s.79 claim or a de facto property claim. I do not agree and will discuss this further later.
Despite being the one who filed for divorce in 2005 and despite having withdrawn the nullity application he filed in 2012, the respondent was still insistent at the hearing that he and the applicant were never legally married. He was also most reluctant to admit that their relationship between 2006 and 2011 was a de facto relationship.
The respondent’s counsel rightly recognised that the respondent’s denial of the legality of the marriage was untenable and that the evidence might well establish a de facto relationship. He also submitted that it made no difference whether the matter was treated as an out of time s.79 application or a de facto property matter but the outcome he proposed was very different to the outcome the applicant sought.
The major assets in play are a home in Property O registered in the applicant’s name, a home in Property M registered in the respondent’s name, some superannuation in the applicant’s name and $676,000.00 in the applicant’s solicitors trust account which absent property settlement orders belongs to the respondent.
Consistently throughout the proceedings the applicant has sought orders that she retain her superannuation, motor vehicle, furniture and the home in Property O, the respondent retain his furniture, motor vehicle and the home in Property M and that she receive a payment from the respondent.
At trial the applicant sought $138,000.00 from the money in trust. Her counsel submitted that this would result in her receiving 35% of the assets and the respondent 65% which gave adequate recognition to her contributions balanced against the initial contributions of the respondent and his future needs.
The respondent’s case at trial was that the money in trust be returned to the respondent and that the parties otherwise retain the assets in their possession.
The respondent’s counsel submitted that contributions should be assessed as 70/30 in the respondent’s favour and that an adjustment of 10% should be made in his favour for s.75 (2) or s.90SF (3) matters. He acknowledged that the distribution of property he proposed would in fact result in a 77.2/22.8% division in the respondent’s favour not an 80/20 division but said that the respondent was prepared to accept that.
The evidence
The hearing ran for three days in July 2014 and was adjourned to October 2014 to allow the respondent to file further evidence about his health.
The applicant relied on her amended application filed on 27 July 2014, her affidavit filed on 21 July 2014 and her financial statement filed on 18 July 2014.
The respondent relied on his amended response filed on 9 September 2013, his affidavit and financial statement filed on 18 July 2014, his affidavit filed on 26 September 2014 and the affidavit of Dr K, a medical practitioner, filed on 26 September 2014.
Each party was cross-examined in July 2014. Dr K was not required in September 2014 and the applicant’s counsel did not seek to cross-examine the respondent about his 26 September 2014 affidavit.
At the request of the respondent’s solicitor an (language omitted) interpreter was provided for the respondent for the three hearing days in July 2014. The respondent answered almost all of the questions put to him without any recourse to the interpreter.
The parties as witnesses
The applicant was a credible witness. There were no inconsistencies between the answers she gave during cross-examination, the evidence in her affidavit and the contents of documents.
The respondent was a witness entirely without credit. He told different stories at different times to suit himself and he changed his story about various issues during cross-examination.
The respondent’s conduct after proceedings commenced in respect to funds of $696,417.27 invested in his name was disgraceful.
In December 2011 this money was on deposit in the respondent’s name at (omitted) Bank. On 18 July 2012, two months after the applicant commenced proceedings, the respondent asked (omitted) Bank to draw a cheque in his favour for the entire amount.[1] The cheque was never presented but when the respondent eventually filed a financial statement in July 2013 he did not include this money as one of his assets.
[1] Applicant’s affidavit, Annexure AO.
On 29 August 2013 the respondent requested that the cheque for $696,417.27 be cancelled. He re-invested $600,000.00 with (omitted) Bank and had two cheques drawn for the balance, one for $20,000.00 and one for $76,417.27.
The cheque for $20,000.00 was presented on 30 August 2013 and it emerged during the hearing that the respondent had given it to his solicitor on account of legal fees.
On 9 September 2013 six cheques for $100,000.00 were drawn at the respondents request so that $676,417.27 was then in the form of seven cheques.
The applicant was aware in broad general terms that the respondent had once had money on deposit with (omitted) Bank and noting that it was not referred to in the respondents financial statement kept asking the respondent through her solicitor where it was.
The matter was raised by the applicant’s solicitor during a mention before me on 20 November 2013. The respondent’s solicitor informed me that the respondent had sent $600,000.00 to (country omitted) to pay legal costs associated with his attempts to recover a property which he alleged was his but which had been taken over the applicant’s brothers. The respondent’s solicitor maintained that the solicitor in (country omitted) was refusing to explain what had happened to the money.
The respondent’s solicitor was urged to make inquiries with (omitted) Bank to find out if the cheques had in fact been presented.[2]
[2] Transcript of the proceedings annexure “AN” of the applicants affidavit.
In May 2014 the applicant’s solicitor issued a subpoena to (omitted) Bank and discovered that the entire $676,417.27 still existed in the form of un-presented cheques. An order was made shortly afterwards requiring the respondent to cancel the cheques and authorise (omitted) Bank to transfer the money to the wife’s solicitor’s trust account and this was done.
The respondent’s conduct with respect to this money was nothing more than a blatant attempt to hide assets.
I would not be prepared to accept anything the respondent said unless it was corroborated or there was some other very good reason to accept it but even when a witness is as entirely lacking in credit as the respondent, I cannot simply determine every issue in dispute in advance by saying that I will prefer the applicant’s version to the respondent’s version. I must still consider the evidence about each issue in dispute as it arises but the respondent’s total lack of credit will have a bearing on the findings I make.
Background
The respondent was born in (omitted) in 1938. He migrated to (country omitted) in about 1962 and then to Australia in 1967 and he married in Australia in 1971.
In Australia the respondent was either employed or in business as a (occupation omitted).
The applicant was born in (country omitted) in 1963 and is the daughter of one of the respondent’s brothers.[3]
[3] In her trial affidavit the applicant said that at one time the respondent told her that she was not really his niece because her parents had found her by the side of the road in (country omitted) as a child. Everything during the hearing suggested however that the respondent and applicant believe themselves to be uncle and niece by blood. The respondent repeated on a number of occasions during cross-examination that the applicant’s brothers would kill her if they found out that she had been married to him.
The applicant married at 18 but in 1991 she divorced and returned to live with her parents. Not long after this the respondent contacted her mother and father and asked if she could come to Australia to help him and his wife as he had suffered an injury. The applicant’s parents persuaded her to go and the applicant came to Australia and lived with the respondent and his first wife for six months.
In 1995 the respondent again asked for the applicant to come to Australia and she did. The applicant’s evidence was that she went home earlier than planned because the respondent told her that he had feelings for her and when she told him that she was not interested he told her to go back to (country omitted).
The respondent denied the truth of this but the applicant was a calm, consistent and credible witness and I accept her evidence.
In 1996 the respondent and his first wife were divorced and divided up their property.
In 1996/1997 the respondent visited (country omitted). According to the applicant (and again I accept her evidence) he lavished gifts on her but she remained uninterested in him. He then decided to marry Ms N, a (nationality omitted), and Ms N returned to Australia with him.
In 1998 the respondent again asked the applicant to come to Australia and she agreed to do so and came with the intention of remaining for six months.
When the applicant first arrived she lived with the respondent and Ms N on a farm the respondent had purchased at Property G. She said that she was the respondent’s labourer on the farm and worked with him looking after sheep and cattle and doing fencing, helping dig dams and watering livestock. She said that she did all the cooking and cleaning and cared for the respondent when he had an operation on his feet.
During the visit the respondent told the applicant that Ms N did not work hard enough and he intended to send her back to (country omitted) and he subsequently did so.
The respondent owned some shops in Property H and after he sent Ms N back to (country omitted) he and the applicant spent some time living in makeshift conditions at the shops while they did them up and created two flats.
The applicant’s evidence was that while she and the respondent were living at the Property H property they commenced a sexual relationship. The applicant said that the respondent offered to marry her and she accepted his proposal.
The respondent denied all of this but I accept the applicant’s evidence about what happened during the 1998 visit.
The applicant stayed in Australia longer than she had planned but after eight months returned to (country omitted) to nurse her mother who was ill.
The respondent travelled to (country omitted) twice in 1999 and again on (omitted) 2000[4] and on (omitted) 2000 he and the applicant were married in (omitted).
[4] Exhibit “E.” The respondent denied being in (country omitted) at certain critical times and records were subpoenaed from the Department of Immigration and tendered together with a summary.
During the hearing the respondent claimed that he was not present at any wedding ceremony and he alleged that he knew nothing about any marriage until the applicant arrived in Australia in October 2000 and told him that she had forged his signature on a marriage certificate to gain entry to Australia.
The respondent is entirely without credit on this issue. He applied for a divorce from the applicant in February 2005 and he did not raise any issue about the validity of the marriage then nor did he do so until February 2012 after he and the applicant had a falling out. He filed a nullity application on 28 November 2012 but withdrew it in July 2013 after it was listed for hearing and costs were awarded against him.
Even leaving aside the suspicions arising from this behaviour, the applicant’s testimony, the evidence from the Department of Immigration confirming that the respondent was in (country omitted) at the time of the marriage and the documents created in 2000 in connection with the applicants application for a spouse visa support a finding that the applicant and respondent were legally married and that the respondent knowingly and willingly participated in the marriage ceremony.
The applicant was successful in obtaining a spouse visa and she arrived in Australia in October 2000. The respondent met her at the airport and drove her to a small farming property in Property J which he had purchased. The parties commenced living in a shed on the property and planted olive trees and in November 2000 the respondent transferred the property into joint names.
The applicant commenced attending TAFE in (omitted) to learn to read and write English.
In 2001 the parties purchased a second property in Property J2 and transferred the olive trees to that property.
In 2002 while the applicant was visiting her parents in (country omitted), the respondent purchased an old run down (omitted) hotel in Property M and upon the applicant’s return to Australia the parties set about renovating the property with a view to turning it into a bed and breakfast however they were ultimately not able to do this because of difficulties obtaining council approval.
In late 2004 the two Property J properties were sold and the parties tried unsuccessfully to sell the Property M property.
At around this time the respondent told the applicant that he would divorce her unless she took legal action against her brothers in (country omitted) to recover possession of a property in (country omitted) which was in the her name but which her brothers had taken possession of after she came to Australia.
The parties told different stories about how the applicant had come to own the (country omitted) property. The applicant said that her father gave her the land and that the respondent paid about $70,000.00 in 1999 to have a house constructed on it.
The respondent did not say where the land came from but said that a house was built on it using $112,000.00 paid to his family as blood money by the (omitted) Organisation and $350,000.00 contributed by him from his Australian property settlement. He said that ownership of the property was subsequently transferred to the applicant but did not explain why this was done.
The applicant was by far the more credible witness and the respondent was inherently unreliable and I accept the applicant’s evidence. However nothing turns on which story is correct because however it was the applicant came to own the land and however much money the respondent put into building a house on it the fact was that after the applicant came to Australia her brothers who lived in an adjoining property took it over and set up a business in it and it became of no value to the applicant.
The applicant gave compelling evidence of how she had been brought up in a culture in which women had no rights and were considered to be under the control of the man of the house and were required to do as they were told. She said that as a woman she did not feel able to take her brothers to court.
When the applicant refused to sue her brothers the respondent carried out his threat to divorce her. In February 2005 he took her to the Federal Circuit Court in Newcastle where he completed and lodged a divorce application in which he stated that the parties had separated under one roof in 2003. At his request the applicant initialled the place on the form where the information about the date of separation was provided.
The applicant said that she did not agree with the separation date but felt powerless to resist the respondent’s demands. She also alleged that she could not read what she initialled.
I have some reservations about whether the applicant’s assertion that she could not read English at that time is entirely true as she had been studying English at TAFE since 2001, but I accept that as a result of her upbringing and cultural background she felt powerless to resist the respondent’s demand.
In February 2005 the respondent also took the applicant to the (omitted) Embassy in Canberra and made her sign a document in front of an official stating that the respondent had provided money for the construction of the house on the (country omitted) property. The applicant understood that the respondent hoped to use this in a court case which he was determined to pursue in (country omitted).
The applicant alleged that what was written in the document was largely untrue and that she signed the document because the respondent insisted and I accept her evidence.
The divorce was granted on 12 April 2005.
On 16 August 2005 the applicant became an Australian citizen.
At or about the time the divorce application was lodged the applicant left Property M and commenced living in a home in Property R which the respondent owned. While she was in Property R she looked into studying (omitted) which had been her long held dream. She discovered that it would be better to do this in NSW and she returned to Property M and began living at the Property M property again.
In 2006 the applicant enrolled in a TAFE course with a view to becoming an (occupation omitted) and about four months after starting this course she began work at (employer omitted) in (omitted).
The applicant’s evidence was that she and the respondent resumed a sexual relationship in (omitted) 2006 and that they thereafter lived in a de facto relationship. The respondent disputed this and I will consider this in more detail later in the judgment.
The respondent spent a lot of time in (country omitted) between 2006 and 2009 as he was intent on pursuing a court case about the (country omitted) property. Between August 2007 and June 2009 he travelled to (country omitted) on five separate occasions and spent a total of 18 months there.[5] It was his case that he commenced a relationship with someone called Ms E or Ms L in (country omitted).
[5] Exhibit E
The applicant admitted that she became aware through text messages of the existence of someone of this name and it might be that the respondent formed a relationship with such a person but apart from the respondent’s bare assertion (and he was blatantly untruthful whenever it suited him) there was no evidence that the respondent ever lived with this person or was in a committed relationship with her.
The applicant did well in her (omitted) course and in 2007 and 2008 she studied to become an (occupation omitted) while working at (employer omitted) and continuing to live in Property M.
In early 2009 the applicant commenced studying at (omitted) University to become a (occupation omitted) and she lived in (omitted) in 2009 and 2010 while studying. The respondent was in Australia for most of this period and lived in Property M. The applicant spent time in Property M when not engaged in her studies and the respondent visited her in (omitted).
In early 2011 the applicant was successful in obtaining a position as a (occupation omitted) at (employer omitted). She said and I accept that she thought about living in the (omitted) Quarters at the (employer omitted) but when she mentioned this to the respondent he suggested that they purchase a house in (omitted) so that he could visit her there.
The parties looked at houses and decided to purchase Property O for $190,000.00.
The applicant had accumulated savings of about $65,000.00 while working between 2006 and 2010. She contributed this and the respondent contributed $125,000.00 so that the parties were able to purchase Property O outright. The property was purchased in the applicant’s name and the sale settled in January 2011.
After the purchase was completed the respondent took the title for the property, he said for safekeeping. The parties subsequently jointly did some renovations to the property.
The applicant said and I accept that during 2011 she went to Property M from time to time and stayed with the respondent and the respondent came to Property O from time to time and stayed with her.
During 2011 the respondent purchased a Toyota (omitted) motor vehicle which he registered in the applicant’s name and presented to her as a surprise. He then took the applicant’s old vehicle and shortly afterwards traded this in on another Toyota (omitted) for his own use.
The applicant said that a final break between the parties occurred on 24 December 2011 when she and the respondent had an argument while she was in Property M. She said that the argument was over something trivial but that during the argument the respondent told her to go and removed the key for the Property M house from her key-ring.
The respondent agreed that there was a fracture between the parties in December 2011 but his version of events was that he went overseas in November 2011 and returned home in early December and found papers and money missing from his safe. He said that the applicant admitted taking the papers but not the money. He said that he phoned the applicant and accused her of being a thief and said that he was going to take her keys. He said that shortly after this the applicant came to Property M and he took her keys and refused her request to be allowed to spend the night at the house.
The records from the Department of Immigration show that the respondent left Australia in September 2011 and returned in October 2011 and did not leave Australia again until August 2012 so his time line is inaccurate but even leaving that aside, the respondent was not a witness of credit and I do not accept his version of why the parties’ relationship broke down in December 2011.
However nothing really turns on exactly what happened in December 2011 because whatever happened it was common ground that it was a watershed in the parties’ relationship.
After this incident the respondent removed the applicant as a nominated beneficiary of his life insurance policy and he consulted a solicitor who wrote to the applicant in February 2012 demanding repayment of $148,200.00 which the respondent alleged he had loaned her.
In May 2012 the applicant filed her application for property settlement.
The respondent filed a response seeking dismissal of the application but in November 2012 he also filed an application for nullity in the Family Court in Sydney. The Federal Circuit Court does not have jurisdiction to hear nullity applications and the property proceedings had to be placed on hold while the nullity application proceeded through the Family Court.
The nullity application was listed for hearing but in July 2013 the respondent discontinued it. A costs order was made against him following this discontinuance. At the time of the hearing before me in 2014 costs were still being assessed.
Following the discontinuance of the nullity application, the parties attended a conciliation conference but the property matter did not settle and it was listed for a hearing which commenced in July 2014.
Whether the parties were in a de facto relationship between (omitted) 2006 and December 2011
In Part C of her May 2012 application the applicant stated that the date of final separation was 24 December 2011 and she completed Part H of the application which asks for details if a de facto property claim is made. The applicant answered yes to questions about whether the parties were in a de facto relationship which broke down on or after 1 March 2009, whether the relationship lasted more than two years and whether the parties lived in NSW for at least one third of the relationship.
I accept that the parties lived in NSW for at least a third of the time between (omitted) 2006 and December 2011. The respondent had numerous absences from Australia but even if his absences are treated as periods when he did not reside here rather than holidays or absences on business he resided in NSW for two thirds of the time between (omitted) 2006 and December 2011.
Counsel for the parties said that as far as they were concerned the matter could be treated as either an out of time s.79 application (with leave to proceed out of time not opposed) or a s.90SM claim following the end of a de facto relationship if the court was satisfied that a de facto relationship existed and that it did not matter how the matter was treated.
In my view it does matter and it is essential that I make a finding about whether a de facto relationship existed.
S.4AA of the Family Law Act provides that parties are considered to be in a de facto relationship if three criteria are met.
The applicant and respondent clearly meet two criteria in that they were not legally married between 2006 and 2011 and they are not related by family as that term is defined in s.4AA(6).
The third criterion is whether during this period they had a relationship as a couple living together on a genuine domestic basis.
S.4AA (2) gives examples of circumstances which may help to decide whether parties were living together on a genuine domestic basis although it also provides that no particular finding in relation to any of the circumstances is regarded as necessary and that the court can have regard to such matters and attach such weight to any matter as seems appropriate in the circumstances of the case.
My findings about each of the matters in s.4AA(2) are as follows:
a)The duration of the relationship – on the evidence of both parties they had an ongoing relationship of some kind between (omitted) 2006 and December 2011, a period of five years and five months;
b)The nature and extent of common residence – the parties did not live together continuously throughout this period. The respondent made 9 separate trips to (country omitted) between 2007 and 2011 and was away for 18 months altogether in the 2007/2008 period and the applicant moved to (omitted) to study in early 2009 and then to Property O to work. However they did often live at the same address and I am satisfied that the reasons they lived apart were either the respondent’s desire to recover the (country omitted) property, the applicant’s need to live elsewhere in order to study and then work and for some brief periods when they were absent from Australia on holidays or in the case of the applicant on a student exchange.
c)Whether a sexual relationship existed – the applicant said that it did. The respondent conceded this through his counsel although he was very touchy on the issue and discouraged any inquiry into it. The evidence in his affidavit was that he and the respondent only ever had sexual relations on two occasions throughout their entire association and that this was because the applicant forced herself on him. I prefer the applicant’s evidence that the parties had an ongoing sexual relationship between (omitted) 2006 and December 2011.
d)The degree of financial dependence or interdependence and any arrangements for financial support between them – the parties did not go into detail about who purchased food or paid for petrol but there was clearly financial interdependence between them.
The respondent’s counsel put to the applicant during cross-examination that she was able to save $65,000.00 between 2006 and 2011 because the respondent was supporting her by paying living expenses.
The applicant said that her savings from employment were deposited into an account in her name but that in 2008 she discovered that she had $92,000.00 in her name on deposit with (omitted) Bank and was unsure where it had all come from. In November 2008 this entire deposit was transferred to the respondent’s name with the applicant’s consent but at the same time the respondent signed a document authorising the applicant to deal with the money.
The parties jointly selected a home in Property O and both parties contributed to the purchase price.
The applicant did admit during cross-examination that at one time when she was studying but not working she received a single pension from Centrelink and did not tell them that she had resumed a relationship with the respondent.
e)The ownership, use and acquisition of their property – throughout the 2006 and 2011 period the parties both continued to use the Property M property which had been purchased during their marriage. They also purchased a home in Property O in early 2011 to which they both contributed funds although the property was placed in the applicant’s name. The respondent purchased a car for the applicant without consulting her and took her car and traded it in on a car for his own use.
f)The degree of mutual commitment to a shared life – there is strong evidence of this. The applicant lived in the former matrimonial home in Property M between 2006 and early 2009 and the respondent lived there too in between visits to (country omitted). The applicant moved to (omitted) to study in early 2009 but returned to Property M during the holidays and the respondent spent time with her in (omitted) and attended her graduation at her invitation. I accept the applicant’s evidence that the respondent said that he wanted her to live in a home of her own rather than at the (employer omitted) quarters in (omitted) so that he could spend time with her and finally the situation with the motor vehicles is strong evidence of the parties having an intertwined relationship.
The applicant gave evidence that when she and the respondent were under one roof she was the one responsible for cooking, cleaning and doing the washing.
Two other aspects of this are first that neither party was in another committed relationship during this period (the applicant certainly wasn’t and I do not accept the respondent’s evidence that he had another committed relationship) and second that the respondent named the applicant as his beneficiary on his life insurance policy and made a will in her favour in which she was referred to as his spouse.
g)The relationship is not registered under a state law as there is no such law in NSW.
h)The parties have no children.
i)I must finally consider the reputation and public aspects of the relationship – there was no evidence from friends or relatives but there was no dispute that the applicant invited the respondent to her graduation in 2010 and the parties quarrelled because the respondent felt himself slighted by the arrangements.
The applicant also said and I accept that many people in (omitted) did not realise that she and the respondent had ever been divorced.
My findings about the matters in s.4AA(2) overwhelmingly support a finding that the parties were in a de facto relationship but de facto relationships are not like a marriage where a piece of paper proves status and I have to be careful to stand back and think about the overall feel of the relationship and ensure that I have not added 2 and 2 together and made 5.
If the individual findings are ignored for a moment various little snippets give rise to a feeling of satisfaction that the relationship between the applicant and respondent between 2006 and 2011 was one of “coupledom” and not a relationship of friends or uncle and niece.
There are a plethora of small indications of this including but not limited to the fact that the applicant’s savings ended up in the respondent’s bank account, that the applicant invited the respondent to her graduation in (omitted) and he became upset about the applicant choosing to spend time with her friends and stormed off, that without consultation with the applicant the respondent bought her a car as a surprise and then took her car for himself and that the respondent became vindictive when the relationship ended.
On 21 January 2012 the respondent sent the applicant a text message threatening to send a DVD to her brothers. The exact text message read:
I am brbrn som dvd to shwe you brathe how well I luck after you I send your adrs just inkase the[y] want to viset you
The applicant said that during the relationship the respondent often informed her that her brother’s would kill her if they knew she had married him and said that the DVD was a “sex tape” which the respondent had made during the marriage. The implication the respondent’s threat to send the tape to her brother’s was a serious threat to her safety.
The respondent said that the DVD contained photos to show how well he had looked after the applicant in Australia but given that the respondent had been in conflict with the applicant’s brothers for years over the (country omitted) property, this explanation makes no sense, and the respondent mentioned more than once during the hearing the applicant’s brothers would kill her if they found out about her relationship with him. I am satisfied that this was a vindictive response by the respondent to the end of the relationship.
In February 2012 the respondent began making claims that the marriage had been invalid and in March 2012 he sent the applicant the following text message:
I have meting withe solicitor he refuse to brosed before I get clernc from the imigratin department I am about to call wat you want to do if you dont come to Property M will go tomorrow to Sydney waiting your repli hed deportain is emnal
All of this evidence suggests that both the applicant and the respondent viewed what had happened in December 2011 as something significant which turned a de facto relationship which up to then had been mutually supportive both financially and non-financially into a broken down de facto relationship.
I am satisfied that the applicant and respondent were in a de facto relationship between 2006 and 2011. They lived in NSW throughout and the relationship was more than two years in length and broke down after 1 March 2009 and I therefore have the jurisdiction to hear this matter as a de facto property claim.
The law applicable to applications for property settlement
S.90SM (3) of the Family Law Act 1975 provides that the court shall not make orders altering the interests of parties in property unless it considers it just and equitable to do so.
In Stanford & Stanford[6] the High Court said that the first thing the court needed to do was to identify the parties property because only then could it consider whether it would be just and equitable to consider making orders altering their interests in property.
[6] Stanford v Stanford [2012] HCA 52.
The assets and liabilities
The non-superannuation assets are as follows:
Property Ownership Value Property O Applicant 200,000.00 Toyota (omitted) Applicant 7,500.00 Furniture Applicant 1,000.00 Cash in the applicant’s solicitor’s trust account Respondent 676,417.00 Property M Respondent 90,000.00 Toyota (omitted) Respondent 7,500.00 Furniture Respondent 8,000.00 Total 990,417.00
There are no relevant liabilities.
There is a mortgage over Property O but it was lodged in 2014 to secure a loan for $30,000.00 which the applicant took out to pay legal fees and it is not a debt in which the respondent should be required to share.
The applicant has a HECS debt of $16,000.00 which was incurred during the de facto relationship. HECS debts are repaid by deduction from wages once wages reach a certain level. There was no suggestion that the applicant intended to pay the HECS debt in a lump sum if she received a property settlement and given the nature of this debt I intend to take it into account as a s.75 (2) matter rather than as a liability to be used to determine the pool.
The respondent asserted that the applicant owed him $148,200.00 and that this was a relevant liability. It was allegedly made up of $125,000.00 which he contributed to the purchase of Property O, $13,000.00 he put into the renovations and $20,000.00 spent on purchasing the Toyota (omitted) motor vehicle less $9,800.00 which the applicant had repaid him.
The respondent claimed that at the time Property O was purchased he told the applicant that the $125,000.00 he put into the property was a loan and that she agreed that that this was the case. He also claimed that the applicant agreed that money he spent on renovations was to be a loan. He did not allege that any conversation took place prior or the purchase of the Toyota (omitted) motor vehicle.
The applicant said that there was no mention of any loan until February 2011 when the parties had an argument over something trivial and afterwards the respondent insisted that she sign a piece of paper saying that she had borrowed $125,000.00 from him. She said that the respondent yelled at her and said that he would put her out into the street if she did not sign the paper.
The document the respondent asked the applicant to sign said as follows (spelling and punctuations as in the original):
I am Ms Sutcliffe
Mr Sutcliffe have build home for me in (country omitted) and gave me home he inherit from his father
I borrowed $125ooo dollars to bay home in Property O
No 1 jam my place Property O
This money have to be paid within 5 years or the home will be sold to pay Mr Sutcliffe his money.
The applicant signed the document but I accept her evidence that as a result of her upbringing and cultural background she felt she had no choice. It is also credible that the respondent’s threats to put her onto the street would have worried her as she had witnessed him force his wife Ms N to return to (country omitted).
The applicant said that during 2011 the respondent insisted that she give him some of her wages and she paid him $1,000.00 per month when she could. She paid the respondent $9,800.00 in total. The respondent’s counsel submitted that this lent credibility to the respondent’s claim about the loan but I do not accept this. I consider that this, like the applicant signing the document after the respondent drew it up, is explained by her tendency as a result of her upbringing and background to give in to the respondent’s demands.
The respondent alleged that he drew up a second document in which the applicant agreed that he had bought a car for her and given her money for repairs totalling in all $33,000.00. He alleged that the applicant took this from his safe when he was overseas in late 2011. The applicant denied that there was a second document and I am not satisfied that it ever existed or that there was ever any discussion or agreement about the applicant repaying money to the respondent in connection with the repairs or the purchase of the Toyota (omitted).
I am satisfied that there were never any loans between the parties and that the money the respondent put into Property O and the money he spent on purchasing the Toyota (omitted) are relevant only on contributions within the context of a de facto relationship.
The applicant has superannuation with (omitted) which is worth $23,633.00.
There are two items of property in (country omitted) which I do not intend to include in the pool.
First there is the house in (country omitted) which is now in the respondent’s name. He maintained that it was in the applicant’s name but the evidence produced demonstrated that it was in his name. Presumably this came about because of the document the parties signed in 2005 at the (country omitted) embassy.
All of the evidence suggests that the property is of no benefit to the respondent let alone the applicant. The land on which the house is built was part of a parcel of land owned by the applicant’s family. I accept the applicant’s evidence that it was given to her by her father but that her brothers took it over in 2000 when she came to Australia.
The respondent has tried unsuccessfully for years to either obtain possession of the property or recover the money he put into it and the chance of anyone now being able to rectify this situation is remote.
Second the applicant said that prior to her mother passing away her father gave her a “room” in the family home at (country omitted). She said that the room was put in her name and that she transferred her interest in it to the respondent in 2005.
There was no evidence that this “room” had a value or that it was likely to be of any practical use to either party in the future. The respondent is unlikely to be able to enforce any right of ownership against the applicant’s family and the applicant is fearful of returning to (country omitted).
The pool therefore consists of superannuation of $23,633.00 and non-superannuation assets of $990,417.00, a total of $1,014,050.00.
Whether it is just and equitable to make property settlement orders
This is not a case in which I can be comfortably satisfied without further enquiry that no orders altering the parties interest in property should be made. It is not a case where the parties kept their affairs entirely separate either during the marriage or during the de facto relationship. They both contributed to the acquisition of the Property O property for example and they are inimical to each other and cannot continue to share the use of any of the property in the pool.
If the matters in s.90SM(4) are considered the outcome might still be that no adjustment in ownership of assets is made but in my view it is appropriate to take the usual steps to determine whether an adjustment should be made and those steps are:
i)to assess the contributions of the parties under s.90SM(4)(a), (b) and (c) of the Family Law Act and to express those contributions as a percentage;
ii)to consider the matters set out in s.90SM (4)(d), (e), (f) and (g), which include the matters in s.90SF(3) so far as they are relevant, and to determine whether any adjustment should be made to the contribution based entitlements as a result;
iii)to consider the effect of those findings and resolve what orders are just and equitable in all the circumstances of the case.
An assessment of contributions
Although I intend to treat this as a de facto property claim I will start by considering the parties contributions so that I can assess what the applicant’s claim to a property settlement might have been in 2005. This prima facie claim was an interest the applicant brought into the de facto relationship and findings about this will also allow me to consider whether the outcome might have been different in the alternative scenario of it simply being an out of time s.79 application.
Initial contributions
The parties married in (omitted) 2000 and commenced cohabitation in Australia in October 2000.
The applicant gave evidence about non-financial contributions she made prior to the marriage which particularly included doing work on properties owned by the respondent in 1998.
In some cases contributions made prior to a marriage or prior to the commencement of cohabitation are taken into account but I do not consider that it would be just and equitable to do so in this case. The applicant was not in a relationship with the respondent when she came to Australia in 1991, 1995 or 1998. She had no assets and no income and it is reasonable to suppose that anything she did to assist the respondent during these visits was in exchange for financial support provided to her in Australia whether by way of food or accommodation or otherwise.
Toward the end of the 1998 visit the parties formed a relationship and became engaged but the applicant did not give precise information about the timing of this and it is impossible for me to isolate and place a value on work done by the applicant on the Property H properties in this limited period whatever it might have been.
When the parties married two years later the applicant was living in (country omitted) and her only asset was the (country omitted) property. Her evidence was that the respondent spent $70,000.00 constructing a house on the land in 1999 but I do not know what the land was worth when it was gifted to her or what the house and land were worth in 2000.
The respondent said that in 1996 he had assets worth $500,000.00 plus superannuation as a result of his settlement with his first wife and by implication suggested that he still had substantial assets in 2000. He said that this was evidenced by two letters dated 21 November 1996 attached to his affidavit but that is not exactly the case. The letters make reference to items of property but not values. The letters state that by way of property settlement the respondent was to retain properties at Property G, Property H and Property W and pay the wife $133,000.00. They make no mention of superannuation.
The respondent referred to “my superannuation” several times in his trial affidavit but there was no evidence that he ever had any as such. It is reasonable to conclude, in particular from paragraph 13 of his trial affidavit, that the applicant considers that the (omitted) Bank money, which must derive in part or in whole from the sale of the assets he received from his property settlement, is his superannuation ie money available to assist him in retirement.
There is some indirect substantiation of the respondent’s claim about the value of his assets at the commencement of cohabitation however because historical title searches confirm he sold the Property G property in 1998 for $100,000.00, a shop in Property I in 1998 for $350,000.00 and the Property H shops in 1999 for $431,500.00.[7]
[7] Land Titles office documents Annexures R,S, V & W to wife’s trial affidavit
I cannot be sure about the entire value his assets in July 2000 and he muddied the waters by claiming that he spent $350,000.00 in the (country omitted) property in 1999. However the applicant accepted that he had savings and a motor vehicle and he also owned a property in Property J which he purchased for $29,000.00 just before travelling to (country omitted) on 13 May 2000.
Contributions during the marriage
When the applicant arrived in Australia in (omitted) 2002 she began living with the respondent on the Property J property. The dwelling on the property was a shed and there was no electricity or water connected to the property. The applicant helped the respondent to plant 400 olive trees and to water them every day by hand with water from a dam. The applicant also helped the respondent to do some renovations to the shed.
During the hearing the respondent insisted that the applicant did not do a single thing on the property except make coffee and lunch for him. I do not accept his evidence and indeed I do not accept that the respondent would have tolerated this. I accept the applicant’s evidence that she worked extremely hard on the property.
In November 2000 the respondent transferred the Property J property into joint names.
In March 2001 another property being Property J2 was purchased for $30,000.00. It was purchased in the applicants name but she said that she only found this out as a result of a title search done for these proceedings and had no idea of it at the time.
The parties transplanted the 400 olive trees to this property and planted a further 900 trees and also 100 fruit trees.
In 2002 the applicant travelled to (country omitted) to visit her mother and while she was away the respondent purchased Property M for $90,000.00. He borrowed $72,000.00 for this purchase.
After the applicant returned from (country omitted) the parties embarked on renovating the Property M property. The applicant said that she cleaned, removed carpets, cleaned out a well, cleaned cement render off the walls and did painting, tiling and established a garden. She said that she was the respondent’s offsider in respect of all of the work done on the property.
The respondent insisted that the applicant did nothing except to paint the cornices in 21 rooms which he could not do as he had a bad back and could not climb a ladder. I do not accept this and I prefer the applicant’s evidence.
In November 2004 the two Property J properties were sold, the first for $81,000.00 and the second for $150,000.00. Interestingly in view of his refusal to acknowledge the value of the applicant’s contributions during the marriage the respondent said as follows in his affidavit:
When I sold the farm, I made approximately $60,000.00 which was by increasing its value from planting olive trees. There were no other improvements to the property.[8]
[8] Husband’s trial affidavit paragraph 15
The applicant said that in about February 2004 the respondent purchased Property R. She said that she was unaware of the purchase price and that the respondent borrowed money to complete the purchase. The respondent said that the property was purchased in 2005 for $80,000.00 and sold in 2007 for $89,000.00. The respondent was a conspicuously unreliable witness but I have no other evidence about the purchase and sale price.
The applicant said that after completing the renovations to Property M the parties placed it on the market as they could not get council approval to open it as a bed and breakfast but they received no offers.
I am satisfied because of the history of the matter that the applicant did the cooking and cleaning during the marriage. She also went to TAFE to learn English.
It appears that during this period the applicant’s father gifted her the room in (country omitted).
Conclusion about contributions during the marriage
I do not have a complete idea of what was in the pool when the parties separated which I am satisfied happened at the time the divorce application was filed and not in September 2003 as the parties represented in the divorce application.
Property M was in the pool as was the (country omitted) property and the room in (country omitted) but I have no idea whether the Property M property was still subject to a mortgage at this time.
There was no evidence about how much the respondent had left from his first property settlement or about where the profits on the Property J properties had gone. The respondent made no effort to provide any information about this. However I am prepared to accept that the respondent’s savings deriving from his property settlement were in the many hundreds of thousands of dollars given the amount in the (omitted) Bank account in 2011. This money must have come from somewhere and the respondent did not work between 2000 and 2011 and the only substantial profit made during this period was the $170,000.00 made on the sale of the Property J properties.
When the parties were divorced in April 2005 they had been married for nearly five years. The applicant had brought nothing into the relationship except the (country omitted) land of unknown value. The (country omitted) room was gifted to her during the marriage but she said it had no value. Neither party worked in paid employment during the marriage and all the financial contributions during the marriage were made by the respondent from his pre-existing property.
Toward the end of the marriage the parties made a profit of about $170,000.00 on the two Property J properties. On the respondent’s own admission $60,000.00 of this was due to the planting of the olive trees, an enterprise into which the applicant put considerable effort. The documents suggest the profit was greater than $60,000.00.
Using a very rough rule of thumb I would assess contributions to the profit of $170,000.00 as 70% by the respondent because of his financial contribution and 30% by the applicant because of her effort and other non-financial contributions and contributions to the welfare of the respondent which would entitle the respondent to $119,000.00 and the applicant to $51,300.00.
The applicant clearly made a contribution as homemaker and a contribution to the refurbishment of the Property M property and while that did not lead to any increase in its value the effort must still be recognised as if nothing else it helped preserve the property. This might well have entitled the applicant to a finding that at this time that she was entitled to a small percentage of a pool which included the respondent’s money from his previous property settlement despite the short marriage and the fact that the parties had no children. It is impossible for me to put a dollar figure on this and the best I can say is that I consider that the applicants overall claim at this time would have been in the vicinity of 10% to 15% depending what was in the pool.
Contributions after the divorce
In (omitted) 2006 the applicant brought into the de facto relationship her entitlement to a property settlement arising out of the marriage. It is entirely understandable that she did not actually pursue a property settlement given the parties living circumstances between 2005 and 2006 and the subsequent resumption of their relationship.
The applicant did not claim that she owned anything in 2006 and the only information I have about the respondent’s assets at that time are that the Property M property and Property R property were registered in his name, the (country omitted) property had been transferred to him and it is reasonable to suppose that he had a substantial amount invested somewhere deriving from his property settlement in 1996 and the proceeds of sale of the two Property J properties.
The applicant lived in the Property M property from 2006 to early 2009. During this period the respondent spent almost two years in total overseas trying unsuccessfully to recoup something from the (country omitted) property. The applicant said that whenever she and the respondent were in the same residence the cooking, cleaning and washing fell to her and I accept her evidence.
The applicant worked in paid employment from (omitted) 2006 to early 2009 and made financial contribution to the parties’ day to day living costs. She pursued full time studies at (omitted) in 2009 and 2010.
The applicant said that the respondent controlled the finances throughout their marriage and de facto relationship. She said that she had a bank account in her name but the respondent demanded that he have authority to deal with the account and that he would switch money back and forth between her account and his accounts.
There was some evidence of this in that an (omitted) Bank statement dated 30 June 2008 shows that Ms Sutcliffe of Property M had $92,440.37 on deposit but from the applicant’s evidence this was not all her money. In November 2008 this entire deposit was transferred to the respondent’s name but he simultaneously gave the applicant authority to draw on it.
Property O property was purchased in January 2011 using about $65,000.00 the applicant had saved and $125,000.00 provided by the respondent.
The parties both put money and effort into doing renovations at Property O. I accept the applicant’s evidence that they put in new carpet and painted the house and that the respondent paid for the carpet and fridge and she paid for the paint, lights and equipment.
The applicant gave some evidence which seemed to suggest that she intended to run a “Kennon” argument.[9] She alleged that the respondent assaulted her on a number of occasions during the relationship. She said that in 2010 the respondent accused her of breaking the key to his car and slapped her face with such force that her head hit the wall. On another occasion the respondent slapped her forcibly with his hand, kicked her with his foot and flicked her in the face with a tea towel after becoming angry over an issue of whether he had been able to attend a graduation dinner with the applicant in (omitted).
[9] Kennon v Kennon (1997) 22 Fam LR 1
The applicant said that the respondent told her repeatedly that her brothers would kill her if she went back to (country omitted) and threatened to have her deported or to send her back to (country omitted).
I accept the applicant’s evidence about these matters because I found her a witness of credit but there was no evidence that these matters made her contributions more arduous and that there should be an adjustment in her favour as a result as referred to in Kennon. However this behaviour by the respondent lends credibility to the applicant’s claim that when the respondent insisted that she sign documents or hand money over to him she felt that she had no option but to do so.
The applicant acquired superannuation during this period but if I treat the parties as having been in a de facto relationship the respondent must be taken to have made an indirect contribution to this. The respondent also acquired $10,985.00 superannuation between separation and June 2014. The respondent made no direct contributions to this but some of it was growth in the pre-separation amount.
Conclusion about contributions at the end of the de facto relationship
I must assess contributions to a pool consisting of the Property M home, the Property O home, motor vehicles, furniture, the applicant’s superannuation which has grown in the post separation period and the (omitted) Bank money with a total value of $1,014,050.00.
The applicant brought no assets into the de facto relationship save for her prima facie claim to a property settlement which was never resolved because the parties resumed their relationship. In my view she would very likely have had an entitlement to between 10% and 15% of the pool in 2005.
After cohabitation resumed the applicant contributed to the respondent’s welfare by doing cooking, cleaning and looking after the respondent when he was in Australia and she looked after the Property M property when the respondent was in (country omitted) making futile efforts to retrieve something from the (country omitted) property. She also worked and saved money; her evidence was that she personally saved $65,000.00 between 2006 and 2011. She was the sole direct contributor to her superannuation.
The respondent did not earn income from personal exertion during this period and the fact that the applicant was bringing home income must have assisted him to preserve his capital. The respondent gave no evidence of having used his capital to support himself and the payment of $9,800.00 which the applicant made to him in in 2011 would also have helped him with the day to day living costs.
However there is no doubt that the respondent must be given credit for a very large initial contribution. The respondent brought into the de facto relationship the Property M and Property R properties and personal effects and probably a motor vehicle. He must also have still had many hundreds of thousands dollars on deposit although he made no effort to clarify exactly how much he had at this time.
The applicant clearly built during the de facto relationship on her initial contribution of her prima facie entitlement to a property settlement but in assessing contributions overall I need to bear in mind that the respondent was 62 years old when he married the applicant in 2000. He had a significant asset in the form of the proceeds of sale of the Property H shops and other assets and he had already purchased the first property in Property J for $29,000.00. He had acquired these assets as a result of decades of hard work and it is highly likely that he brought a very large amount of this into the de facto relationship.
The applicant worked hard and accumulated savings during the de facto relationship but she did benefit from the relationship in being able to pursue her dream of becoming a (occupation omitted) which meant that she left the relationship with a good income earning capacity and the respondent made a contribution to that.
If it is true that the respondent sunk $70,000.00 or more into the property at (country omitted) in 1999 and this money has been lost that is sad for the respondent but I accept the applicant’s evidence that it was the respondent who proposed investing the money. He was not forced to do so by the applicant and the money has not been lost due to any fault of the applicant’s. I do not accept that this should be treated as a contribution to the applicant’s family which should somehow diminish the applicant’s entitlement to a property settlement.
In my view (notwithstanding that I do not accept the submission by the respondent’s counsel about how money which the respondent put into the (country omitted) property should be treated) an appropriate assessment of contributions at the end of the de facto relationship is 70% by the respondent and 30% by the applicant as the respondent’s counsel submitted.
This would entitle the applicant to $304,215.00 and the respondent to $709,835.00.
S. 90SM (4) (d), (e), (f) and (g) matters
I must consider the matters in s.90SM (4)(d), (e), (f) and (g). S.90SM (4) (d), (f) and (g) are not relevant and as required by s.90SM (4) (e) I turn to the matters in s.90SF (3).
S. 90SF (3) matters
The applicant is 51 and is employed at (employer omitted) as a (occupation omitted). She is working what she described as “0.7.” The applicant said that she was earning $57,106.00 but agreed that she was salary sacrificing $16,000.00 which when added to $57,106.00 per annum totals $73,106.00.
The applicant is in good health and absent injury or illness has a good working future ahead of her. She will continue to accrue superannuation.
The applicant has not re-partnered and has no dependents.
The applicant has no assets besides those included in the pool. She has a HECS debt which she will have to repay over time and which will somewhat diminish her income until it is repaid and she has a loan for $30,000.00 which she took out in 2014 to pay legal fees. She had spent $17,000.00 on legal fees to the time of the trial.
The applicant is entitled to $304,215.00 on the basis of contributions. If she retains Property O and her motor vehicle, household contents and superannuation she has assets to the value of $232,133.00 and is entitled $72,082.00 from the money in trust.
The respondent is 77 and is in receipt of an aged pension.
In April 2014 the respondent suffered a burst appendix and subsequently developed symptoms of a major abdominal infection. He was required to undergo surgery several times and he made a slow recovery.
The proceedings were adjourned to September 2014 to allow the respondent time to present evidence about his health and any needs arising out of his health including the need to pay for care. Pursuant to this he filed an affidavit by Dr K and a brief affidavit about the cost of going into residential aged care.
In his report dated 5 September 2014 Dr K said that the respondent was weak and had difficulty looking after himself and was due to have further surgery in November 2014. He said that his prognosis was guarded.
I accept unreservedly that the respondent is in poor health and that his health is relevant to his future care needs.
In his affidavit filed on 26 September 2014 the respondent said that he would like to move to Sydney because of his health, loneliness and racial abuse he was being subjected to. He provided information from a retirement village in (omitted) which charged between $350,000.00 to $1,900,000.00 for the various types of accommodation it has on offer and also charged either a monthly or quarterly fee, and from a retirement village in (omitted) which charged between $75,000.00 and $850,000.00 to enter the village and also charged either a monthly or a quarterly fee.
The lower price at (omitted) and the lower price at (omitted) may be affordable for the respondent but I cannot help but observe that the respondent provided information about retirement villages in two of the more up-market suburbs in Sydney and I cannot rule out the possibility that other options are available to him.
I cannot on the state of the evidence form a view about how much of the money the respondent receives will be needed for his future care or about the precise impact on him receiving any particular sum of money.
The respondent is entitled to $709,835.00 on the basis of contributions. If he retains this amount he will receive the Property M property, his motor vehicle and furniture and $604,335.00 from the money in trust. He may have an outstanding debt for legal fees associated with these proceedings.
On 9 September 2013 the respondent was ordered to pay the applicant’s legal costs of and incidental to the nullity application as agreed or assessed. At the date of the hearing of the property matter these costs had not been quantified but the applicant was claiming in excess of $14,000.00. However it would be unjust to the applicant if I took this liability into account when considering a property distribution.
Pursuant to s.75 (2)(o) the court can take into account any relevant fact or circumstance which the justice of the case requires to be taken into account and I need to consider here the implications of the respondent’s conduct in respect of the (omitted) Bank money.
This money was eventually located and most of it is still there but $20,000.00 ended up in the respondent’s solicitor’s hands on account of legal fees during the course of these proceedings and as the applicant’s counsel submitted the respondent has also caused a loss to the pool by not having the money invested although I was not provided with any evidence which would allow me to quantify that loss.
The respondent’s conduct also gives rise to concern that he might have been more successful hiding other assets. However there is simply no evidence that the respondent had any other assets to hide and I cannot punish him for his actions in respect of the (omitted) Bank matter by proceeding on the basis that there may be other assets when there is nothing in the circumstances of the case to suggest that this is likely to be so.
The applicant’s efforts to try and find the money may well have resulted in her incurring additional legal costs but I will need to consider that separately if a costs application is made.
Conclusion about s. 75(2) matters
The applicant’s counsel submitted that the respondent should receive 65% of the pool because of his greater initial contributions and his future needs but he did not suggest what percentage should be assigned to each component.
I have made a finding that the respondent is entitled to 70% on the basis of contributions and in my view despite the fact that I cannot quantify the respondent’s future care needs it is appropriate to make an adjustment in his favour for s.75 (2) matters.
This is because the capital the respondent now has will have to last him the rest of his life and he will not be able to augment it by earnings while the applicant is in a much more fortunate position in that regard.
$709,835.00 may seem like a substantial sum but it includes household contents and a motor vehicle and the home Property M. It is quite understandable that the respondent would not want to stay in Property M and he faces the prospect of having difficulty selling the property there if past indications are anything to go by and if he does sell he will incur selling costs.
The applicant has a home in Property O where she is content to remain and has 16 or so years of working life ahead of her in which she can save money, preserve capital (in the form of the home she owns) and put more money into superannuation. Her relationship with the respondent has been of considerable benefit to her in that it has assisted her to obtain her (omitted) qualifications which will stand her in good stead in the future.
The respondent’s counsel submitted that a 10% adjustment was appropriate but this would give the respondent an additional $101,405.00 and is far too high.
Absent the loss to the pool caused by the respondent’s behaviour over the (omitted) Bank money I would have made a 3% adjustment in his favour giving him an additional $30,511.50 and creating a differential of $61,023.00 between the parties. However as a result of the loss caused by his conduct I intend to make a 2% adjustment giving him an additional $20,281.00 and creating a differential of $40,562.00 between the parties.
This will entitle the applicant to 28% of the pool or $283,934.00 and entitle her to $51,801.00 from the money in trust. It will entitle the respondent to $730,116.00 which he can use in whatever way he chooses, whether that is by providing himself with accommodation or simply making his day to day life a little more comfortable than it would be on the aged pension.
Whether the outcome if just and equitable
The applicant and respondent married in 2000 and lived together as husband and wife between (omitted) 2000 and (omitted) 2005 and in a de facto relationship from (omitted) 2006 to (omitted) 2011. They were either married or in a de facto relationship for about 10 years, a not insignificant period of time.
I am conscious of the fact that the applicant will be receiving 28% of the pool after a relationship spanning in all about 10 years and she will not have much cash after she repays her loan for legal fees. I am conscious of the fact that the respondent has already accessed $20,000.00 to pay his legal fees and the applicant has been required to take out a loan to pay hers. I am conscious of the fact that with this division the applicant may not be as well off as the respondent when she is a similar age to what he is now even if she works for the next 16 years. However the respondent acquired his assets over a lifetime of hard work and the application in the years ahead is highly likely to acquire much more than the additional amount I have awarded to the respondent and it is not the role of the court to try and equalise the parties situations.
I am satisfied that the outcome is just and equitable.
The other approaches to the problem thrown up by this case
There were two other possible solutions to the problem thrown up by this case.
One was to find that regardless of whether the matter was treated a de facto property settlement or an out of time s.79 property settlement s.79(2) or s.90SM(2) were not enlivened because it was not just and equitable to consider making an order adjusting parties interests in property.
This would have resulted in a slightly more favourable outcome for the respondent in that he would have kept all of the money in trust rather than being obliged to part with $51,801.00 of it.
However the intertwining of the parties lives over a period of more than 10 years, the work done on Property M and Property O properties to which they both contributed and the purchase of the Property O property using money contributed by them both make this an unattractive, arbitrary and inappropriate solution to the problem. I might still have arrived at this outcome applying the considerations in s.79(4)(a),(b) and (c) or s.90SM(4)(a),(b) and (c) but to refuse to consider how the matter might look if these considerations were applied would not have been just and equitable.
The second was to treat it as an out of time s.79 claim.
There would have been some difficulty doing this because of the lack of information about the assets in 2005, but this also in my view would have resulted in a slightly more favourable outcome for the respondent.
I could have had some regard to contributions in the 2006-2011 period if I adopted this approach and could have carried forward the applicant’s prima facie claim to a property settlement from the marriage and perhaps the benefits to the respondent in not having to settle with her earlier as well as the savings she contributed to the purchase of Property O and this might have more or less justified the applicant retaining Property O and the other assets in her possession but it might not have done more. The respondent would have had no claim on the applicant’s superannuation to which he would not be deemed to have made any contribution but the applicant might not in my view have been able to claim any credit for contributions to the respondent’s welfare during the 2006-2011 period.
In any event to approach the problem in this way would have been to ignore the reality of the parties’ lives between 2006 and 2011. They married in 2000 and divorced in 2005 but I am satisfied that they went on living just as before between 2006 and 2011, with living in a common residence creeping back in four to five months after the divorce and a sexual relationship creeping back in after more than a year.
During their second period of cohabitation they provided mutual support for each other, they both continued to use the Property M property which had been purchased jointly, they saved money together (the applicant’s savings ended up in the respondent’s account) and they discussed and agreed on the purchase of a real property together.
In my view the appropriate way to deal with the matter was always to treat it as a de facto property settlement and I am satisfied that the division of property resulting from an analysis of this claim is just and equitable.
I do intend however to make an order that the applicant have leave to proceed out of time with a s.79 claim simply to make it clear that it is appropriate for me to take into account the applicant’s entitlement to a s.79 property settlement as part of considering her de facto property claim.
For all of the above reasons the orders of the court will be as set out at the beginning of this judgment.
I certify that the preceding two hundred and twenty five (225) paragraphs are a true copy of the reasons for judgment of Judge Terry
Associate:
Date: 24 April 2015
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Jurisdiction
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Remedies
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Procedural Fairness
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Statutory Construction
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