Tabussi and Tabussi (As Executor of the Estate of the late Mr Tabussi Senior (deceased) and Ors
[2015] FCWA 108
•8 DECEMBER 2015
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: TABUSSI and TABUSSI (As Executor of the Estate of the late MR TABUSSI SENIOR (DECEASED) & ORS [2015] FCWA 108
CORAM: DUNCANSON J
HEARD: 15 AND 16 JUNE 2015
DELIVERED : 8 DECEMBER 2015
FILE NO/S: PTW 7109 of 2012
BETWEEN: MRS TABUSSI
Applicant
AND
MR TABUSSI JUNIOR (As Executor of the Estate of the late MR TABUSSI SENIOR (DECEASED)
First RespondentMR TABUSSI JUNIOR
Second RespondentMRS WARD
Third Respondent
Catchwords:
PROPERTY - application pursuant to s 106B to set aside transaction - transaction set aside - where husband died after commencement of proceedings - where it is necessary to determine if an order would have been made if the husband had not died and whether it is still appropriate to make such an order - where it is determined the statutory tests in s 79(8)(b) are satisfied - where it is found to be just and equitable to make orders altering the existing legal and equitable interests of the parties - where contributions are equal - adjustment to wife for s 75(2) factors
Legislation:
Family Provision Act 1972 (WA)
Family Law Act 1975 (Cth), s 75, s 79, s 106B
Category: Not Reportable
Representation:
Counsel:
Applicant: Mr R Hooper
First Respondent : Dr A Dickey
Second Respondent : Dr A Dickey
Third Respondent : Dr A Dickey
Solicitors:
Applicant: Clairs Keeley
First Respondent : Swan River Law
Second Respondent : Swan River Law
Third Respondent : Swan River Law
Case(s) referred to in judgment(s):
Buckeridge No 2 (1981) FLC 91-114
Grace v Grace [2012] NSWSC 976
Halabi v Artillaga (1994) FLC 92-470
Pflugradt and Pflugradt (1981) FLC 91-052
Stanford v Stanford (2012) 247 CLR 108
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
INTRODUCTION
1[Mrs Tabussi] (‘the wife”) and the late [Mr Tabussi Senior] (“the husband”) were married for about 35 years.
2After learning he was terminally ill, the husband transferred the title to the property at [Suburb N] (“[the Suburb N property]”) to the names of his two adult children from his first marriage. The wife subsequently learned of the transfer and commenced these proceedings. The husband died before he was served with the wife’s application.
3The husband’s son, [Mr Tabussi Junior], as executor of the estate is the first respondent, and he and his sister, [Mrs Ward], are the second and third respondents (collectively “the respondents”).
4Proceedings commenced by the wife in the Supreme Court under the Family Provision Act 1972 (WA) were transferred to this Court.
5The wife seeks to set aside the transfer of the title pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”) and an order that the property be sold. She submits the Court would have made an order if the husband had not passed and should now make an order for property settlement pursuant to the provisions of the Act.
6If the Court sets aside the transaction, but declines to make an order under the Act, the wife says the Family Provision Act claim is enlivened.
7If the Court declines to set aside the transaction and declines to make an order, then pursuant to the Family Provision Act the wife says she would be entitled to the residue of the husband’s estate.
8The first respondent’s case and that of the second and third respondents is that s 106B of the Act does not apply to the transfer and the transfer should not be set aside. They say the Court would not have made an order for property settlement if the husband had not died because the parties had not separated. The wife’s claim is, therefore, pursuant to the provisions of the Family Provision Act and she should receive the residue of the estate.
THE APPLICATIONS AND ORDERS SOUGHT
9The application before the Court is an amended initiating application of the wife filed 19 November 2013. The orders sought by the wife, contained within her amended papers for the Judge filed 24 October 2014 are as follows:
Section 106B order
1.The transfer of the property situate at [Suburb N] in the State of Western Australia (“[Suburb N property]”), by [Mr Tabussi Senior] (Deceased) to the Second and Third Respondents dated October 2012, be set aside.
2.The disposition of money out of the estate of the deceased husband by the First Respondent to the Second and Third Respondents be set aside.
3.In the alternative to paragraph 1 above, a declaration that the second and third respondents hold the [Suburb N property] subject to a life tenancy in favour of the applicant and a consequential order that the second and third respondents pay to the applicant such sum as the Court deems just and equitable in exchange for the surrender of her life tenancy.
Family Provision Act Orders
4.That the Will of the deceased dated September 2005 be varied as follows:
(a) Clauses 3 and 4 be deleted.
(b) In lieu thereof, the following clause be added:
“I give, devise and bequeath to my wife [Mrs Tabussi] the sum of $800,000.”
5.A certified copy of this order be included in the Probate and the First Defendant do produce the Grant to the Court for that purpose.
6.Within 30 days, the First Respondent pay $160,000 to the Applicant in partial satisfaction of her entitlements pursuant to the will as varied.
7.The Applicant and First Respondent be appointed joint trustees for the sale of the [Suburb N property] with liberty to apply as to the terms and conditions of sale.
8.Pending sale of the [Suburb N property] the Applicant have exclusive occupation thereof.
9.If the transfer described in paragraph 1 is not set aside pursuant to s 106B of the Family Law Act 1975 then the will of the deceased be varied to provide that the entire estate of the deceased husband as at the date of his death be paid to the Applicant.
Family Law Act Section 79 orders
10.The [Suburb N property] be sold and the first $800,000 from the proceeds of sale, or such other sum as the Court deems just and equitable, be paid to the Applicant.
11.The Applicant and First Respondent be appointed joint trustees for the sale of the [Suburb N property] with liberty to apply as to the terms and conditions of sale.
12.Pending sale of the [Suburb N property] the Applicant have exclusive occupation thereof.
13.Within 30 days, the Respondents pay $160,000 to the Applicant which be received in partial satisfaction of her entitlements pursuant to these orders.
14.All of the following vest in the Applicant absolutely:
(a) All funds standing to the credit of the Applicant in any bank, credit union or building society;
(b) The proceeds of the term deposit held jointly with the First Respondent;
(c) The contents of the [Suburb N property];
(d) The Applicant’s jewellery and personal effects;
(e) The [Peugeot] motor vehicle;
(f) Any other asset or liability in the Applicant’s possession or in her sole name, not otherwise specified in these orders.
15.The Second and Third Respondent pay the costs of the Applicant as ordered on 21 July 2014.
16.The Second and Third Respondents, or alternatively the First Respondent, pay the Applicants costs of and incidental to these proceedings.
10In closing the wife’s senior counsel submitted that the Court should set aside the transfer and make orders that the home be sold and the net proceeds of sale be divided equally between the applicant on one part and the second and third respondents on the other part.
11Having regard to the property to be retained by the wife that would not amount to an equal division. In the event the Court considers an equal division overall is appropriate then the sale proceeds of the home should be divided 40% to the applicant and 60% to the second and third respondents to achieve an equal division.
12The first respondent filed a response on 20 December 2013. In that response the first respondent sought an order that the application be dismissed.
13The orders sought by the first respondent are set out in a minute of proposed orders filed 27 October 2014. (The second and third respondents do not seek any relief in the proceedings independent of the first respondent.) They are as follows:
AIf:
(a) the wife’s s 106B Family Law Act Form 1 Application filed on 17 December 2012, and
(b) the wife’s s 6 Family Provision Act 1972 claim filed in the Supreme Court of Western Australia on 12 July 2013,
both be dismissed:
1. As and by way of property settlement the wife receive:-
(i) all funds standing to the credit of the Applicant in any bank, credit union or building society;
(ii) the contents of the [Suburb N property];
(iii) the applicant’s jewellery and personal effects;
(iv) any other asset or liability in the Applicant’s possession or in her sole name not otherwise specified in these orders;
(v) the 2014 [Peugeot] motor vehicle;
(vi) the sum of $145,000 from the first Respondent’s estate;
(vii) the wife’s Telstra shares
IN THE ALTERNATIVE:
BIf the wife’s s 106B Form 1 Application filed on 17 December only be dismissed:
1. The wife’s Family Provision Act claim and property settlement claim orders be as per paragraph A1 above.
IN THE ALTERNATIVE:
C.If:
(a) the wife not be granted a life interest to reside at [the Suburb N property], and
(b) the wife’s s 106B Family Law Act and the Family Provision Act claims both are not dismissed,
in addition to the orders in paragraph A1 above:-
1. The estate pay to the wife the sum of $205,000 within 60 days;
2. On receipt of the payment:
a) the wife do all such acts and things and sign all such documents as may be required to transfer to the Second Respondents at the expense of the First Respondent all of her interest in the real property known as [the Suburb N property] (''the real property'');
b) the Second Respondents indemnify the wife against any liability for all rates, taxes and outgoings of or with respect to the real property.
3. Pending the payment:
a. the wife have the sole right to occupy the real property. During such right of occupation the wife pay all rates and taxes and like apportionable outgoings of the real property as they fall due;
4. Contemporaneously with the payment in paragraph A1(vi), B1 or C1, the wife do all necessary acts and things and sign all necessary documents to transfer to the Second Respondents at the expense of the First Respondent all of her interest, if any, in:
a. The furniture, contents and personal effects in the possession of the Respondents;
b. Any monies in any account with any bank or credit institution held in the name of the Respondents in addition to the sum of $145,000 referred to in paragraph A1(vi) hereof;.
c. The wife’s Telstra shares 600.
Note:
Paragraphs C4 a – c inclusive comprise the entire estate of the First Respondent less expenses.
AND THE WIFE PAY THE RESPONDENTS’ COSTS in any event.
14In closing, senior counsel for the respondents conceded that the minute referred to above was not “perhaps the best drafted set of orders”.
15He confirmed that the respondents sought orders that the wife receive the life interest in the Suburb N property, the items of property already in her possession and the remaining money in the estate.
THE PARTIES AND THEIR FAMILIES
16The husband was born [in] 1928. He died on [in] December 2012. The wife was born [in] 1933. She is aged 82 years.
17The parties were married [in] 1977. They have no children.
18The husband has two children from his first marriage, Mr Tabussi Junior born [in] 1959 and Mrs Ward born [in] 1962.
19The wife has three children from her first marriage, [Samuel Di Bona] born [in] 1955, [Antonio Di Bona] born [in] 1956 and [Julia Di Bona] born [in] 1960.
THE ISSUES FOR DETERMINATION
20The first issue to be determined is whether, pursuant to s 106B of the Act, the Court should set aside the transfer executed by the husband, whereby he transferred his estate and interest as registered proprietor in fee simple of the Suburb N property to his son and daughter, Mr Tabussi Junior and Mrs Ward as tenants in common in equal shares.
21The Court must also determine pursuant to s 79(8)(b) of the Act, whether in the circumstances of this case it would have made an order with respect to property had the husband not died and that it is still appropriate to make such an order.
22Whether or not the transfer is set aside, if the Court declines to make an order pursuant to s 79 of the Act, it must determine what is the appropriate order pursuant to the wife’s Family Provision Act claim.
HISTORY
23The parties met in 1976. Both parties had previously been married and their spouses were deceased. After their marriage the wife moved in to the Suburb N property to live with the husband. The wife’s daughter Julia and the second and third respondents lived with them there.
24At the time of their marriage the wife owned a farm at [Suburb G], she had an account with the Home Building Society and household contents.
25At that time, the husband owned the Suburb N property, a motor vehicle, a truck and a shop [in Suburb R], which had a loan associated with it of approximately $12,000.
26During their marriage the husband worked and the wife was the homemaker.
27The parties had a tradition of hosting Sunday lunch for extended family, including their children and grandchildren.
28The parties established a partnership which operated a trucking business for [a transport company]. The wife assisted in the business. The partnership income was split between them to minimise tax.
29The parties retained ownership of their separate property. They had separate bank accounts and a joint bank account.
30The parties made property investments both separately and together. Mostly those investments were funded from partnership income.
31The debt owing on the Suburb R property was paid out with partnership earnings. In about 1982 or 1983 the husband sold the Suburb R property for about $30,000 and he purchased the [Suburb B] property for about $90,000. The proceeds of the Suburb R property were applied to this purchase together with funds from the partnership account. The Suburb B property was sold by the husband in 1996, at which time there was no debt associated with it. The husband placed the sale proceeds of the Suburb B property in an account in his sole name.
32The parties retired in 1991, at which time the bank account for the partnership was closed.
33The husband bought a property at [Suburb P] which he subsequently sold and retained the proceeds in an account in his sole name.
34The husband lived in the Suburb N property until his death. The wife continues to live there. Both parties renovated, maintained and improved the property. The wife contributed to the costs of improvements from her own account which contained funds derived from farm rent.
35In 1988 the parties purchased a shop [in Suburb W]. The husband told the wife he had lent her $50,000 from the partnership account which she had to pay back. The parties borrowed funds from the bank. They rented out the shop and the rent was paid into their business account. It was sold in 2007 and the funds placed into a joint term deposit.
36The parties purchased a property [in Suburb H] which they used as a holiday home. They also received rent for this property which was paid into their joint business account. This property was sold in 1995.
37The parties then purchased a property [in Suburb S] for $62,000. It was registered in joint names. Upon its sale in 2000, the proceeds were paid into their joint account. Both parties maintained this property.
38The wife retained the farm [in] Suburb G until 1993. The rent was paid into an account in her sole name. She applied no joint funds to this property. The wife sold this property in 1993, she said at the husband’s insistence. He sought repayment of $50,000 which he said he had lent her at the time they bought the property in Suburb W. The wife paid him $43,000, retaining $7,000 which was the amount she paid towards the kitchen renovation of the Suburb N property.
39The wife intended to retain the balance of the funds in an account in her name, but in 1993 purchased a commercial property in her sole name [in Suburb V] for $210,000. She said she did this upon the husband’s instruction. The wife subsequently sold this property in 2003 for $177,000. She retained the sale proceeds in a term deposit in her sole name.
40[In] 2005 the husband made a will. He appointed his son Mr Tabussi Junior to be his executor and trustee. The husband’s will provided that the Suburb N property be held by his trustee, upon trust for the use and benefit of the wife during her life provided she pay all outgoings on the said residence and maintain it and that she use it as her principal place of residence and upon the death of the wife, the property be held upon trust for his son and daughter as joint tenants absolutely.
41In about 2009 the husband told the wife that they should give part of their savings to their respective children to enable them to obtain a means tested pension in the future. At this time the wife asked the husband what would happen to her if she gave her money away and he died before her. She deposed he told her they were “half and half of the house because you are my wife”.
42In April 2009 the wife gave $10,000 to her son Samuel. In September 2009 she gave Samuel a further $20,000 and she gave $30,000 to each of Antonio and Julia. She pre-paid her funeral.
43In 2009 the husband gave $75,000 to each of the second and third respondents. This was the subject of some dispute at trial. In evidence, the respondents asserted the amounts they received from the husband in 2009 were loans. They said they each repaid him $1,000 per month from the time they received the loan until shortly before his death. Both asserted they had repaid approximately $45,000 and there was a balance owing of $30,000.
44Both respondents were extensively cross-examined by the wife’s senior counsel regarding their assertion that the funds they received were loans. Both agreed that the first time they had mentioned a loan was in their oral evidence and they had not deposed to having received loans in their affidavits. Neither could produce any written record of repayment, any document of loan or any document establishing the balance owing. The payments of $1,000 per month were said to have been made by way of cash payments to the husband. Neither respondent was able to produce bank statements showing regular or consistent withdrawals of $1,000. The third respondent said she withdrew varying sums from her account, she carried money in her purse which was mingled with her own funds, but ultimately she paid $1,000 per month to the husband.
45I did not believe either of the respondents in this aspect of their evidence. I consider their evidence that the funds they received from the husband was a loan, part of which was repaid, was untruthful and that both respondents lied in this respect. I do not know why they lied or what they had to gain. I can only assume that they endeavoured to show that the balance owing at the date of death was $30,000, the same as the amount the wife gifted to her children.
46After their retirement in 1991 the parties travelled on holiday and their joint funds met joint expenses. Their separate accounts met their individual expenses.
47The husband and the wife began receiving a reduced pension from about 2009 and each also received interest on their term deposits and dividends from their shares.
48The interest on the funds in the joint term deposit was paid into the joint cheque account from which they paid their joint expenses, including outgoings pertaining to the Suburb N property. The parties also contributed equally from their separate accounts for joint expenses.
49The parties made their wills separately. The wife’s will, dated September 2009, provided that her son Samuel be appointed her executor and trustee to hold her estate on trust to be divided equally among her children.
50At paragraph 7 of the wife’s will it stated:
I have not provided for my husband because I believe that he already has sufficient assets at his disposal to provide for himself for the remainder of his life. Further, he has informed me that he has excluded me from his will and therefore I do not believe that he should then be entitled to a share of my estate.
51The wife deposed that in 2009 she and the husband had conversations about his will. During one of those conversations the husband told her “you get what you get”. In March 2010, at the request of the second respondent, the wife signed some papers and became worried that what she had signed might prevent her from contesting the husband’s will.
52The wife sought advice from the solicitor who had prepared her will, Mr Elek‑Roser. She met with him, accompanied by her son’s wife.
53The wife instructed her solicitor to lodge a caveat against the title to the Suburb N property. She signed the caveat and Statutory Declaration on 2 June 2010. She later learned there was a difficulty with the caveat and it was necessary for her to lodge a further caveat. The second caveat was signed by her on 25 August 2010 accompanied by a statutory declaration of the same date. The wife thought the caveat had been lodged.
54The wife declared that the statutory declaration was made in support of her caveat to claim an equitable interest in the Suburb N property as co-owner. At paragraphs 3 and 4 of the statutory declaration the wife declared as follows:
3I claim an equitable interest in [the Suburb N property] as co-owner on the grounds that:
(a)I have been married to [Mr Tabussi Senior] since 1977 and have been living at [the Suburb N property] with [Mr Tabussi Senior] since our marriage; and
(b)I have made substantial direct and indirect financial contributions to the conservation and improvement of [the Suburb N property].
4I have also made substantial contributions to the welfare of the family in my capacity as wife, mother to [Mr Tabussi Senior’s] children and financial provider.
55Although the wife thought the caveat had been lodged, in fact it had not. She was not told by her solicitor that the caveat had not been lodged and heard nothing more about it.
56The wife again asked the husband what she would get when he died and he said “what you get, you get”.
57In early August 2012 the husband was diagnosed with terminal cancer. The wife assisted him, nursed him and cared for him. At this time he received medical treatment, had an operation and received chemotherapy.
58The second respondent removed papers and cash from the Suburb N property. He attended to the husband’s personal business. The husband gave power of attorney to the second respondent.
59The husband’s affidavit was accepted for filing pursuant to s 79C of the Evidence Act 1906 (WA). This affidavit was sworn on 7 October 2012 and in it the husband deposed he had decided to implement certain actions prior to deceasing to fulfil the intentions of his last will and testament. He explained the title to the Suburb N property was to be transferred to his two children as tenants in common (and not as joint tenants as provided for in his will). He directed his son, as executor, to ensure that the wife was provided with lifetime access to the property as long as she was able and willing to use it as her principal place of residence.
At paragraph 4 of his affidavit, the husband states:
It has been known and understood by my wife and I that it was always intended that our properties, investments and other assets be kept under our respective ownership and these assets would be passed onto our respective children by way of gift or inheritance. Only properties, investments and assets in joint names were to be shared in case of death or separation. This fact was also well known to our children, their partners and our close friends.
60In November 2012 the wife’s daughter Julia became worried because the wife had told her the husband and the respondents were having “secret meetings” and had asked her to leave the husband’s hospital room while they did so. Julia searched the title to the Suburb N property and ascertained that the husband had transferred the title to the Suburb N property to the respondents on 4 October 2012.
61Julia told the wife the husband had transferred the property to the respondents. Believing the caveat had been lodged, she could not understand how the transfer had occurred. She consulted a different lawyer and ascertained the caveat had not been lodged.
62The wife’s children arranged a meeting with the second and third respondents on 7 December 2012. The wife also attended. The husband was receiving treatment at the time. The wife and her children did not tell the respondents they knew the transfer had occurred. The respondents did not mention it either. They discussed where the wife would live after the husband passed away.
63On 17 December 2012 the wife filed an application in this Court in which she sought orders that the transfer of the Suburb N property be set aside and the husband transfer his interest in the Suburb N property and the [Holden Barina] to her. Alternatively, the second and third respondents should transfer to the wife the Suburb N property and the parties each retain all other funds and assets in their sole name and the wife retain all joint funds.
64The husband died on 26 December 2012. At the time of his death he had not been served with the wife’s application.
65The wife filed an amended initiating application on 19 November 2013 in which she sought orders that the transfer be set aside, the Suburb N property be sold and the proceeds divided 60% to her and the balance to the estate. At paragraph 59 of her affidavit filed 1 April 2014 the wife deposed to her knowledge as to the assets in the parties’ names, in addition to the Suburb N property. They were as follows:
| My Bankwest Term Deposit | $220,000 |
| My Bankwest reward saver | $12,765 |
| Husband’s Bankwest Term Deposit | $160,000 |
| Joint Bankwest Reward Saver | $4,376 |
| Joint Bankwest Term Deposit | $150,000 |
| [Holden Barina] motor vehicle | $15,000 |
| Household contents (estimate) | $6,000` |
| My 2100 Telstra shares | $9,187 |
| Husband’s Telstra shares, cash and jewellery | Value unknown to me |
| My jewellery | $2,000 |
66Shortly after the husband’s death the wife received a bank statement for the husband’s Gold Term Deposit with Bankwest showing that the balance of $160,000, together with interest of $1,601, had been withdrawn. The balance as at 27 December 2012 was “nil”. The wife arranged for the transfer of the funds in the joint account to her accounts.
67The first return date of the wife’s application was 29 January 2013. Upon certain undertakings made by the wife and the respondents regarding the wife’s use of the Suburb N property and the car, the proceedings were adjourned generally.
68In July 2013 the wife made a claim in the Supreme Court for family provision. Those proceedings were transferred to this Court by consent.
69After withdrawing the funds from the husband’s term deposit the first respondent placed them into an account in the name of persons unknown, possibly his family members. He subsequently transferred the funds into a CUA account in his name. He said at that time the term deposit funds were merged with his own funds of about $13,000.
70The first respondent did not disclose the account to which the funds were paid into. It is not known what happened to the interest. On 16 January 2013 the first respondent opened an account with Bankwest in the name “the Estate of the late [Mr Tabussi Senior]”. He deposited the sum of $148,879 into that account on 31 January and 1 February 2013.
71The first respondent paid various expenses on behalf of the estate. Those are set out in exhibit 18 and include legal fees for Family Court matters. He conceded the estate management expenses paid to himself were improperly charged and could be added back to the estate.
72The balance of the term deposit funds was accounted for as follows:
| Proceeds of term deposit | $160,000 |
| Proceeds of husband’s operating account | $4,500 |
| Proceeds of Telstra shares | $2,800 |
| Total | $176,300 |
| Less Expenses | $119,708 |
| Balance | $47,592 |
73To the above balance must be added the amount which the first respondent improperly charged for estate management expenses and which are to be refunded. The estate management expenses were approximately $100 per month, a total of $1,800.
74On 23 June 2014 the wife was involved in a car accident. She received an insurance payout of $9,600 for her Holden Barina. The wife applied the insurance money, together with funds from her cheque account, to purchase a Peugeot.
75The wife continues to reside in the Suburb N property. It is not suitable for her in the long term. She wishes to move to a location close to her friends and her church. She wishes to purchase a more suitable property and does not wish to retain the life tenancy of the Suburb N property.
76In principle the respondents are agreeable to purchasing another property in their names in respect of which the wife may have a life tenancy.
SECTON 106B OF THE ACT
77Section 106B of the Act provides as follows:
Transactions to defeat claims
(1)In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
(1A)If:
(a)a party to a marriage, or a party to a de facto relationship, is a bankrupt; and
(b)the bankruptcy trustee is a party to proceedings under this Act;
the court may set aside or restrain the making of an instrument or disposition:
(c)which is made or proposed to be made by or on behalf of, or by direction or in the interest of, the bankrupt; and
(d)which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
(1B)If:
(a)a party to a marriage, or a party to a de facto relationship, is a debtor subject to a personal insolvency agreement; and
(b)the trustee of the agreement is a party to proceedings under this Act;
the court may set aside or restrain the making of an instrument or disposition:
(c)which is made or proposed to be made by or on behalf of, or by direction or in the interest of, the debtor; and
(d)which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
(2)The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1), (1A) or (1B) may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale must be paid into court to abide its order.
(3)The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
(4)A party or a person acting in collusion with a party may be ordered to pay the costs of any other party or of a bona fide purchaser or other person interested of and incidental to any such instrument or disposition and the setting aside or restraining of the instrument or disposition.
(4AA)An application may be made to the court for an order under this section by:
(a) a party to the proceedings; or
(b)a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the instrument or disposition were made; or
(c)any other person whose interests would be affected by the making of the instrument or disposition.
(4A)In addition to the powers the court has under this section, the court may also do any or all of the things listed in subsection 80(1) or 90SS(1).
(5)In this section:
disposition includes:
(a)a sale or gift; and
(b)the issue, grant, creation, transfer or cancellation of, or a variation of the rights attaching to, an interest in a company or a trust.
interest:
(a)in a company includes:
(i)a share in or debenture of the company; and
(ii)an option over a share in or debenture of the company (whether the share or debenture is issued or not); and
(b)in a trust includes:
(i)a beneficial interest in the trust; and
(ii)the interest of a settlor in property subject to the trust; and
(iii)a power of appointment under the trust; and
(iv)a power to rescind or vary a provision of, or to rescind or vary the effect of the exercise of a power under, the trust; and
(v)an interest that is conditional, contingent or deferred.
78Section 106B is available if:
•there are proceedings under the Act;
•there is an instrument or disposition;
•the instrument or disposition is made or proposed to be made by or on behalf of a party, or by the direction of a party or in the interests of a party
•the instrument or disposition:
(a)is made or proposed to be made in order to defeat an existing or anticipated order in these proceedings; or
(b) irrespective of intention, is likely to defeat such an order.
79In Halabi v Artillaga (1994) FLC 92-470 Nicholson CJ set out the procedure to be applied in determining a claim under s 106B, at 80,885, as follows:
…the proper approach is to first determine whether the requirements of ss (1) have been satisfied, and if so, to treat the disposition as not having been made for the purpose of arriving at an appropriate order pursuant to s 79, and then having done so, to determine whether, having regard to the rights of the bona fide purchaser or person interested under ss (3), a discretion should be exercised to set the instrument or disposition aside. The exercise of such a discretion may well depend upon whether if this is not done there are sufficient funds available to the party who has made the disposition to satisfy the order without setting the instrument or disposition aside.
Are there proceedings under the Act?
80The wife’s application for property settlement constitutes proceedings under the Act. It is not necessary that the proceedings be on foot at the time of the transfer in October 2012.
Is there an instrument or disposition?
81It is not in dispute that the transfer of land dated 12 October 2012 is an instrument or disposition.
Was the instrument or disposition made by or on behalf of, or by direction or in the interests of a party?
82The instrument or disposition was made by the husband who was a party to the proceedings prior to his death.
Was the instrument or disposition made or proposed to be made to defeat an anticipated order in the proceedings or, irrespective of intention, likely to defeat such an order?
83This involves a consideration of whether the transfer was made to defeat an anticipated order (not a claim) in these proceedings or, irrespective of intention, was likely to defeat such an order.
84An order may be anticipated even though the transaction in question was made before the proceedings had commenced (Buckeridge No 2 (1981) FLC 91-114).
85The test to be applied is an objective one. In Pflugradt and Pflugradt (1981) FLC 91-052 Elliott J said (at 76,430):
... it is not a question of whether the husband expected or foresaw a subsequent property application by the wife and “anticipated” an order being made, but whether considering all of the circumstances at the time of the disposition such an application by her at some time, with a consequent order, was objectively to be foreseen or to be expected by him as being likely or reasonably probable.
86On behalf of the respondents it was argued that the parties had not separated and their marriage was intact. It was further argued that the husband’s object in making the transfer was to provide for his wife and his children inter-vivos in substitution for his testamentary intentions.
87Clearly, the husband did not wish the Suburb N property to form part of his estate. He instructed his son not to inform the wife of the transfer and it was not mentioned at a meeting which took place between family members to discuss the wife’s future living arrangements.
88It was the husband’s intention that the respondents should receive the Suburb N property and the wife should have a life tenancy of it.
89The wife denies any agreement between her and the husband that he would leave the Suburb N property to the respondents. She says that was not discussed at all.
90She said sometimes the husband told her they were “half-half” in the house and sometimes he told her “you get what you get”. The wife became worried about her future in the later years of the marriage. In March 2010, after the second respondent asked her to sign papers, she was very worried that the husband and the second respondent were doing things behind her back.
91That is precisely what happened. The husband was secretive. The husband did not tell the wife about the transfer of property and he instructed the second respondent not to do so.
92It is more probable than not he knew that if the transfer did not take place the Suburb N property would be the subject of a claim by the wife. The husband received legal advice after he had been diagnosed with terminal cancer. It is not known whether he received any advice as to family law proceedings and, in particular, the options open to the wife. In the circumstances at the time, such an application and consequent order was objectively foreseeable. The husband swore an affidavit and it is likely he did so intending it to be relied on if necessary in subsequent proceedings.
93The husband’s receipt of legal advice, the inter-vivos transfer of property, which he had already provided for in his will, and the secrecy surrounding this, all indicate to me that he was attempting to avoid any claim which the wife may have had to the property. While he was still alive, the only claim she could make was in proceedings pursuant to s 79. It is not necessary for the parties to have been separated for such an application to be made.
94Senior counsel for the husband submitted, in the context of whether a reasonable person in the shoes of the husband would have foreseen a property settlement order was likely to have been made, that the marriage was intact at the time of the transfer and that the parties continued to live together in the way they had done previously. However, it is clear there was distrust on the part of the wife in 2009, and more so in 2010, when she was asked to sign documents, such that she sought legal advice and instructed her solicitor to lodge a caveat over the Suburb N property, which she thought had been done.
95It is self-evident that had the caveat been lodged then any attempt to register a transfer of land in respect of the property would have triggered a notice to the wife requiring her to maintain her caveat. Her caveat would have lapsed unless she applied to the Supreme Court to maintain. It is more than likely she would have made an application to this Court.
96Senior counsel for the husband also referred to the wife’s evidence that she would have continued to live with the husband as they had always done. He submitted that even after the whole family knew of the transfer, there was no evidence that “the marriage between the parties was not continuing in its normal way”.
97The difficulty with that submission is the parties and their respective families each kept a very significant secret, the husband that he had transferred the Suburb N property to the respondents, and the wife that she knew of the transfer.
98Furthermore, the wife commenced proceedings in this Court for property settlement which is inconsistent with a marriage “continuing in its normal way”.
99I consider it was reasonably foreseeable that the wife would make a claim for property settlement at some time after finding out about the transfer of property. It was foreseeable to the husband which is why he kept the transfer a secret. When the wife found out about the transfer she commenced these proceedings.
100In 2010, before the husband was terminally ill, the second respondent asked the wife to sign papers. This triggered the wife’s suspicions and prompted her to seek legal advice. These events occurred prior to the transfer of the property by the husband. It is clear the husband wished to avoid any claim being made by the wife in respect of the Suburb N property. The only claim which the wife could have made prior to the husband’s death is one pursuant to s 79 of the Act.
101In all the circumstances, I find that at the time of the transfer the husband would have objectively foreseen or expected as likely, or reasonably probable, an application by the wife and consequent order under s 79, and the transfer was made with the intention of defeating such an order. In any event irrespective of the husband’s intention, the transfer has had the effect of defeating such an order.
102Having found that the requirements of s 106B(1) are satisfied I intend to follow the approach as set out by Nicholson CJ in Halabi and Artillaga (supra).
103That approach is to treat the transfer of the Suburb N property as not having been made for the purpose of arriving at an appropriate order pursuant to s 79, and then determine, having regard to the interests of the second and third respondents, whether my discretion should be exercised to set aside the transfer.
SECTION 79 OF THE ACT
104Sub-section 79(8)(b) of the Act provides as follows:
(b)if the court is of the opinion:
(i)that it would have made an order with respect to property if the deceased party had not died; and
(ii)that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii)any of the property of the parties to the marriage or either of them; or
(iv)any of the vested bankruptcy property in relation to a bankrupt party to the marriage; and ...
105It is therefore necessary to determine whether an order for property settlement would have been made had the husband not died and that it is still appropriate to make such an order. In determining this, the Court must consider, pursuant to s 79(2), whether it is just and equitable to make a property settlement order.
106Following the High Court decision in Stanford v Stanford (2012) 247 CLR 108 it is necessary to identify the legal and equitable interests of the parties in their property.
107The parties’ property at the time of the husband’s death, as known by the wife, was as set out at paragraph 65 above. I find the parties’ property as at the date of death is as set out below.
Description
Wife
Husband
[Suburb N property]
925,000
Wife’s Bankwest term deposit
220,000
Wife’s Bankwest reward saver
12,765
Husband’s Bankwest Term Deposit
160,000
Joint Bankwest Reward Saver
2,188
2,188
Joint Bankwest Term Deposit
75,000
75,000
[Holden Barina]
15,000
Household contents (estimate)
3,000
3,000
2100 Telstra shares
9,187
Husband’s Telstra shares, cash and jewellery
unknown
Wife’s jewellery
2,000
Total
324,140
1,180,188
108The property of the parties at trial (as at 5 June 2015) is set out in a schedule annexed to the wife’s outline of closing address. The table below is drawn from that document and includes estate management expenses which the first respondent conceded should be returned to the estate.
Description
Wife
Estate
[Suburb N property]
1,220,000
Bankwest term deposit
280,000
Bankwest reward saver
19,223
Residue of the estate including shares and cash
47,517
Estate management expenses to be repaid by the first respondent
1,800
2014 [Peugeot] hatchback motor vehicle
13,000
Household contents
5,000
1,000
2,100 Telstra shares
12,621
Sold
Jewellery
2,000
Total
331,884
1,270,317
109Both parties have paid legal costs in amounts which are not dissimilar. As the source of these funds was the existing property of the parties it was submitted by the wife’s senior counsel that adding back legal costs would have little effect on the outcome. I do not, therefore, include these amounts in the table above.
Was it just and equitable to make a property settlement order had the husband not died?
110In Stanford (supra) the High Court said at paragraphs 41 to 43:
Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to “the need to preserve and protect the institution of marriage” identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.
111The Suburb N property had been the parties’ home throughout their long marriage. The husband’s intention was that the second and third respondents would receive the Suburb N property. In her application to this Court, the wife sought an order that the transfer be set aside and the Suburb N property be transferred to her.
112During their marriage the parties had separate bank accounts, but they also had joint accounts. They bought and sold property separately and jointly. The husband gifted money to the second and third respondents and, at his request, the wife gifted money to her children, to enable the husband and wife to receive a pension. The wife paid for repairs and improvements from her own funds and the parties also spent their joint funds on the Suburb N property. The wife’s contributions to the property over the parties’ 35 year relationship were significant. The Suburb N property was by far the most valuable asset of the parties.
113The wife was worried about what she would receive in the event of the husband’s death and had asked him about the Suburb N property. In her oral evidence the wife said, had the husband not died, she would have continued to live with him in the Suburb N property. It is, however, difficult to see how their future together might have been, given that she had commenced these proceedings seeking an order that the Suburb N property be transferred to her. In contrast, the husband clearly intended the property to go to the second and third respondents and had indeed transferred it to them. The husband was secretive. The wife was distrustful.
114The husband’s intention to provide a life tenancy in the Suburb N property would have been insufficient to meet the wife’s needs. The Suburb N property is unsuitable for her in the long-term as she is unable to maintain such a big property and requires a smaller, more suitable home. Ultimately she may have to move to a retirement home and fund a bond.
115The husband was terminally ill. The parties’ intentions as to the use of the Suburb N property were not the same, albeit, they had not separated prior to the husband’s death. Both parties considered there should be a different arrangement to their interests in their property and the existing arrangements were not sufficient or appropriate for their purposes.
116Having regard to the circumstances of the marriage of these parties, I find it would have been just and equitable to make an order altering the parties’ legal and equitable interests in their property and that such an order would have been made if the husband had not died.
Is it just and equitable to make a property settlement order?
117It is necessary to consider whether it is still appropriate to make a property settlement order notwithstanding the death of the husband. It must be just and equitable to make such an order.
118The Suburb N property has an agreed value of $1,220,000. It well exceeds the combined value of all of the other assets. The wife’s entitlement from the husband’s estate is inadequate and a property settlement order is appropriate to provide the wife with a share in the Suburb N property, the most significant asset of the parties.
119The provision of a life tenancy in the Suburb N property does not meet the wife’s needs for reasons stated at paragraph 114 above.
120By reason of the husband’s death, the section 75(2) factors are not applicable to him, but operate in favour of the wife.
121Senior counsel for the wife proposed an equal division of property based on contributions and sought a 5% adjustment for the s 75(2) factors. Having regard to those factors, including the wife’s age and limited income, such an adjustment would be appropriate in the circumstances.
122I am mindful that I ought not take into account the claims or the financial circumstances of the second and third respondents. In Grace v Grace [2012] NSWSC 976 Breteton J said at 243:
... This means that the claim of or against the surviving spouse is to be considered essentially as between husband and wife before the claims of other beneficiaries are taken into account.
123Having regard to the above matters, I find it is just and equitable to make an order altering the parties’ legal and equitable interests in their property and that such an order is appropriate, notwithstanding the death of the husband.
CONTRIBUTIONS
At the commencement of cohabitation
124When the parties married the wife owned a farm [in] Suburb G, she had an account with the Home Building Society and household contents.
125The husband owned the Suburb N property, a motor vehicle, a truck and a shop in Suburb R, which had a loan associated with it of approximately $12,000.
During cohabitation
126The marriage endured for more than 35 years. The husband was the main income earner until he retired. The parties established a partnership which operated a trucking business for a transport business. The wife assisted in the business. The husband managed the finances. He gave the wife cash each week with which she had to buy food for the family.
127The wife also worked cleaning houses for about four years.
128The wife was the homemaker. She cared for her youngest child and the husband’s son and daughter (the second and third respondents) who lived with them at the time of the marriage. She undertook the home duties.
129Both parties cleaned, maintained and improved the Suburb N property. They renovated the kitchen and equally shared the cost from their own funds, although the wife was reimbursed some funds. The parties paid for expenses and improvements to the Suburb N property from joint funds. The wife paid for ceiling fans from her own funds.
130The parties made property investments separately and together. Mostly, the joint investments were funded from partnership income. Both parties maintained properties which they purchased together.
131The wife sold her farm and, on the husband’s instruction, bought a commercial property in Suburb V, in respect of which she lost money upon its sale. Both parties gifted money to their children. The parties received a reduced pension from 2009.
132Expenses pertaining to the Suburb N property were met from joint funds and each jointly contributed to those expenses from their separate accounts.
133The wife cared for the husband at home after he was diagnosed with terminal cancer in August 2012. She tended to his needs including dressing and changing him. She had assistance from Silver Chain three times each week.
Since the husband’s death
134With difficulty, the wife has maintained the Suburb N property including the gardens. Her family have assisted her. The wife has paid half of the shire and water rates and the home insurance premiums.
Assessment of contributions
135The parties’ marriage was a long one. They both worked hard in their respective roles.
136When I weigh the respective contributions of the parties, I consider they should be assessed as equal.
137The total value of the parties’ property is $1,602,201.
138Following my assessment of contributions, the parties would each receive or retain property to the value of $801,100.
SECTION 75(2) FACTORS
139The wife is now 82 years of age. The husband is deceased and therefore has no ongoing needs. The wife receives income from capital investment and is in receipt of a part pension. In terms of her financial statement, her average weekly income is $461. Her standard of living is modest. The wife grows her own fruit and vegetables and trades her produce amongst her friends for other groceries.
140The wife continues to live in the Suburb N property. She pays half of the shire and water rates and she pays insurance premiums and car registration. Her average weekly expenditure is $381 and her weekly personal expenditure is $104, a total of $485 per week.
141The wife is in reasonable health for her age and is physically able to look after herself, though she requires assistance from her family to maintain the Suburb N property. She incurs ongoing costs for medication to the extent that they are not covered by her private health insurance.
142The wife has no superannuation. She does not have any dependents.
143The wife would like to move to a smaller property with level ground. Her friends live in the [Suburb L]/Suburb N area and she attends church in Suburb L.
144The wife estimates that a smaller low maintenance property in the Suburb L/Suburb N area would cost her between $500,000 - $800,000. If eventually the wife becomes unable to live independently she would consider moving into a retirement village using the sale proceeds of her property to fund the retirement bond. By way of example, the bond for Suburb L Gardens retirement village is $440,000 and the weekly cost is $400.
145In my discretion I consider there should be an adjustment in favour of the wife of 5%.
Just and equitable
146It is now necessary to consider the practical effect of the orders I intend to make.
147The total value of the property of the parties is $1,602,201. The wife will receive 55% which is $881,211. The husband’s estate will receive 45% which is $720,990. There is a differential of 10% or $160,220.
148The wife retains the following:
Bankwest term deposit
280,000
Bankwest reward saver
19,223
2014 [Peugeot] hatchback motor vehicle
13,000
Household contents
5,000
2,100 Telstra shares
12,621
Jewellery
2,000
Total
331,844
149The husband’s estate retains the following:
[Suburb N property]
1,220,000
Residue of the estate including shares and cash
47,517
Estate management expenses
1,800
Household contents
1,000
2,100 Telstra shares
Sold
Total
1,270,317
150If each party retains the assets and liabilities as set out above, the wife will have to receive a further $549,327. The Suburb N property will have to be sold and the proceeds of sale divided in order to effect the 55% - 45 % division. I consider that the wife should be able to purchase for herself a smaller more suitable home and retain some money to support herself to provide her with a reasonable standard of living. Orders providing for the sale and overall division of 55% to the wife and 45% to the estate are those which are just and equitable.
The s 106B discretion
151Having regard to the value of the Suburb N property which is by far the most significant asset of the marriage, it is readily apparent that it is appropriate that I exercise my discretion to set aside the transfer. If I did not do so, this most significant asset of the parties would be excluded from the property of the parties to be the subject of orders. In exercising my discretion I take into account that the second and third respondents received the property by way of a gift from the husband as opposed to a bona fide purchaser.
THE PROPOSED ORDERS
152Subject to hearing from senior counsel, the orders I propose to make are as follows:
1.The transfer of the property situate at [Suburb N] in the State of Western Australia (“[the Suburb N property]”), by [Mr Tabussi Senior] (deceased) to [Mr Tabussi Junior] and [Mrs Ward] (the second and third respondents) dated 4 October 2012, be set aside.
2.The applicant [Mrs Tabussi] and the first respondent [Mr Tabussi Junior] be appointed joint trustees for the sale of the [Suburb N property], with liberty to apply as to the terms and conditions of sale.
3.Pending the sale of the [Suburb N property] the applicant have exclusive occupation thereof.
4.Upon settlement of the sale of the [Suburb N property] the applicant and the first respondent do cause the proceeds of sale to be applied as follows:
(a) in payment of the costs of sale and settlement of sale, including agents fees and commissions;
(b) in payment of rates and taxes
(c) the balance being the net proceeds of sale be divided in such proportions so as to provide an overall division of the net assets of the parties, 55% to the applicant and 45% to the respondents, taking into account the assets to be retained by each of them as provided for in paragraphs 148 and 149 of these reasons.
5.The first respondent cause to be repaid to the estate the sum of $1,800 in respect of his estate administration charges.
6.All of the following vest in the applicant absolutely:
(a) all funds standing to the credit of the applicant in any bank, credit union or building society;
(b) the proceeds of the term deposit held jointly with the first respondent;
(c) the contents of the [Suburb N property];
(d) the applicant’s jewellery and personal effects;
(e) the [Peugeot] motor vehicle;
(f) any other asset or liability in the applicant’s possession or in her sole name, not otherwise specified in these orders.
7.The second and third respondent pay the costs of the applicant as ordered on 21 July 2014.
8.All of the applicant’s right title and interest in the following vest in the estate absolutely:
(a) the residue of the estate including shares and cash;
(b) the estate management expenses to be repaid by the first respondent; and
(c) the household contents.
9.The application and response be otherwise dismissed.
I certify that the preceding [152] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
0
3
0