Tartabull & Tartabull and Ors

[2007] FamCA 1670

FAMILY COURT OF AUSTRALIA

TARTABULL & TARTABULL AND ORS [2007] FamCA 1670

FAMILY LAW – PROPERTY – No reliable evidence of a loan advanced to husband by third party – Absence of such evidence and lack of explanation for its absence permits the inference that such evidence would not have assisted the third party’s claim – Jones v Dunkel (1959) 101 CLR 298 cited – Husband owes substantial child support, wife has greater burden for care of four young children – Wife to receive all of the modest liquid assets of parties

FAMILY LAW – PROPERTY – SUPERANNUATION – In the circumstances no splitting order pursuant to Part VIIIB Family Law Act 1975 (Cth) ordered

Family Law Act 1975 (Cth)

APPLICANT: Ms Tartabull

FIRST RESPONDENT: Mr Tartabull

SECOND RESPONDENT: Mr P

THIRD RESPONDENT: Mr K

FOURTH RESPONDENT: Mr E

FIFTH RESPONDENT: G Pty Ltd ACN … & Ors

SIXTH RESPONDENT: Commonwealth Bank of Australia

FILE NUMBER: PAF 1298 of 2006

DATE DELIVERED: 3 December 2007

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Coleman J

HEARING DATE: 3 December 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Peter Maiden SC

SOLICITOR FOR THE APPLICANT: Mark Brown & Associates Solicitors & Barristers

ADVOCATE FOR THE FIRST

RESPONDENT:

Self-represented

COUNSEL FOR THE THIRD

RESPONDENT:

Mr Emmett

Orders

1. That moneys held in the Equity Division of the Supreme Court of New South Wales in suit number … of 2007 be paid to Mr E and the wife as follows:-

   i)Mr E $25,000.00

   ii)The wife: the balance including any accrued interest

   and further declares that no other person or entity has any right to such moneys.

2. That the parties forthwith do all things and sign all necessary documents to cause the funds referred to in Order one (1) to be paid to the parties referred to in that order in the portions shown and in the event of the failure of any party to sign any document necessary to effect the distribution of those funds within seven (7) days of being so requested the Registrar of this Court be authorised to sign any such document on behalf of the defaulting party.

3. That the husband and wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.

4. That in the event that either party refuses to execute any deed or instrument necessary to give effect to these orders, within seven (7) days of being requested to do so, the Registrar of the court be appointed pursuant to Section 106A to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.

5. That except as otherwise provided for in this order the husband and wife each be the sole legal and beneficial owners of all items of all property including furniture, money, motor vehicles, insurances, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively.

6. The operative time for this order is the date of this order.

7. That the wife indemnify the husband with respect to any child support liability of the husband up to and including 27 August 2007.

8. That all outstanding applications and cross-applications otherwise be dismissed.

9. That there be no order for costs.

IT IS NOTED that publication of this judgment under the pseudonym Tartabull & Tartabull is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAF1298/2006

MS TARTABULL

Applicant

And

MR TARTABULL  

First Respondent

And

MR P

Second Respondent

And

MR K

Third Respondent

And

MR E

Fourth Respondent

And

G PTY LTD ACN … & ORS

Fifth Respondent

And

COMMONWEALTH BANK OF AUSTRALIA

Sixth Respondent

REASONS FOR JUDGMENT

1. The proceedings before the Court comprise a matrimonial cause, the parties to whom are the husband and wife. As part of the matrimonial cause, an application by a third party, Mr K (“the third party”), seeking orders in relation to rights asserted by the third party and relief consequential to this Court finding the third party to be entitled as against the husband in the proceedings in the terms sought by the third party. The Court's jurisdiction to entertain the matrimonial cause is not in doubt, nor is its jurisdiction to hear and determine part of and necessarily part of the matrimonial cause the application by the third party.

2. For her part, the wife, who is the applicant in the proceedings, seeks orders for settlement of property in two parts. The first is that what is agreed to be the only liquid asset of the parties to the marriage ‑ a fund of $85 000 ‑ be paid in its entirety to her. The second is that, pursuant to the appropriate sections of Part VIIIB Family Law Act1975 (Cth) (“the Act”), a splitting order be made in her favour with respect to the husband's superannuation interests.

3. For his part, the husband, who appears in person and is an undischarged bankrupt, seeks that the wife obtain the residue of the $85 000 after payment out of that fund the sum of $40 000 sought by the third party. It is not entirely clear whether, if the third party's claim is unsuccessful, the husband seeks that he be paid anything out of the $85 000 fund. It is improbable that the husband does seek any part of it, given that he would not benefit from it, its effect being property available to the husband's trustee in bankruptcy for the benefit of the creditors of the husband's bankrupt estate.

4. So far as the superannuation interest is concerned, the husband opposes the making of a splitting order in any percentage.

5. The third party's claim for $42 500 at the commencement of the trial was, during the course of the trial, confirmed by his learned Counsel to be for the payment of $40 000, sought to be paid out of the $85 000 liquid fund. The $85 000 represents the residue of a fund of $110 000 which, in turn, represents the residue of the net proceeds of sale of the former matrimonial home of the parties. That property was sold pursuant to an order of the Supreme Court of New South Wales on the application to that Court of the mortgagee over the property, the mortgage being in default and having, the evidence suggests, been in default since about February 2006.

6. The parties have agreed that another third party, the second respondent in the proceedings, be paid $25 000 by way of settlement of a claim brought by that party against the property of the parties to the marriage, hence, the $110,000 becomes $85 000. The former matrimonial home having been held by the parties as joint tenants, the quantum of the third party's claim for $40 000 is at least inferentially referable to what is suggested to be the husband's 50 per cent interest in the fund resulting from the sale of the former matrimonial home.

7. It is not suggested by the third party that the wife was party to or had any knowledge of or, indeed, had ever met the third party. The third party claimed that funds advanced by him to the husband and secured by way of caveat lodged against the title to the former matrimonial home of the parties to protect an interest created or purportedly created by an unregistered mortgage given by the husband only over that property should be repaid to the third party out of the $85 000.

8. The position of the third party was succinctly stated by his learned Counsel to be that the third party had a valid equitable charge over the husband's interest in the former matrimonial home and that as such it formed no part of the property of the parties to the marriage. In the alternate, it was submitted that if, contrary to the weight of authority relied upon by learned Counsel for the third party, this Court concluded that the interest of the third party was not so secured or enforceable, the Court would, nevertheless, order that the $40 000 claimed by the third party be paid to him prior to any distribution of the remaining funds between the parties to the marriage.

9. The wife's position, both as emerges from her affidavit evidence and as outlined by learned senior Counsel who appeared for her, can be simply summarised, and, indeed, does not involve controversy. It is the wife's case, and it has at all material times been the wife's case, that she had no knowledge of any advances by the third party to the husband, she did not benefit from any such advances and she required the third party to prove his case before this Court before she would accept that such was the case. It was, at least inferentially, submitted that if contrary to the submissions of senior counsel for the wife, the Court found that the husband was indebted to the third party, that the Court would not order the repayment of that sum before the division of the property of the parties to the marriage.

10. As noted earlier, the wife was represented by senior Counsel; the husband was not represented and realistically, as a transcript would confirm, played a minimal part in the proceedings, save in the respects to which reference will shortly be made. The husband's trustee in bankruptcy, unsurprisingly, took no part in the proceedings. That was clearly a sensible election on any view of the evidence. The third party was represented by Counsel who competently and diligently prosecuted his claim.

11. A witness in the third party's case was the husband. The husband swore an affidavit which was read in the third party's case, and, perhaps more significantly in the circumstances, clearly was sympathetic to the claim of the third party.

12. Quite apart from any opposition to that claim and indeed sworn evidence potentially consistent with the third party's claim, it was apparent from cross‑examination of the wife by learned Counsel for the third party that the husband had conferred with Counsel for the third party and given instructions for the purpose of cross‑examining the wife. That inference is inescapable, given that the third party and the wife, it is common ground, had not met prior to the happening of events which were agitated with the wife in cross‑examination. There is no secret about this and, with respect to Counsel for the third party, no attempt to in any way misrepresent the reality that the husband, by conferring with the third party's Counsel and providing information which may have been of assistance in prosecuting the third party's claim, had been clearly willing to and, in fact, did assist the prosecution of that claim.

13. To the extent therefore that there are shortcomings in the third party's claim, when the evidence is reviewed it could not be submitted, and, in fairness, the Court does not understand Counsel for the third party to have submitted, that the difficulties faced by the third party in discharging the burden of proof which the third party bore were rendered more difficult by a lack of cooperation or resistance by the husband. There is a material difference between a case of this kind where someone in the husband's position does not assist the claim of a third party and, indeed may even resist it, to this case, where it is quite clear that, however effectively he did so, the husband actively sought to support the claim of the third party.

14. For reasons which will become apparent when the evidence is reviewed, it is to be noted that the third party has been engaged in the proceedings as and from 13 March 2007, at which time the third party was granted leave to intervene in the proceedings. Thereafter, the Court record reveals that the matter was before the Court in some form or other ‑ that is to say, before a Registrar or Judge ‑ on 30 March 2007 when the third party was represented by Counsel, on 5 April 2007, when the third party was represented by Counsel, on 24 August when the third party was represented, whether by Counsel or solicitor being less than entirely clear, and on 24 September when the third party was represented by Counsel. The relevance of those series of appearances will hopefully become apparent but, in short, there has been on that basis an abundance of opportunity for those advising the third party to utilise pre‑trial procedures, in particular the issue of subpoena for production of documents in support of the third party's claim.

15. To the extent that a review of the evidence finds the third party's claim deficient by virtue of the absence of documentation, it cannot, in the circumstances, be fairly suggest on behalf of the third party that there was any absence of reasonable opportunity to either secure documentation or, having made reasonable endeavours to secure such documentation but failed in those endeavours, to give evidence of due search and inquiry.

16. The issue of credit arises in two essential respects. Part of the husband's contention is that significant parts of the moneys advanced to him by the third party were utilised by the wife for the benefit of the family. To the extent that there is a provable debt on the part of the third party, it is submitted by the third party in reliance upon the evidence of the husband that this Court would be reluctant not to recognise the entitlement of the third party, whether that be effectively secured in the ways the third party's Counsel submitted, or unsecured in the event of this Court, contrary to those submissions and the authorities relied upon in support of them, concluding that the third party was an unsecured creditor of the husband. Objectively, if there is a provable loan and if that factual scenario were substantially realised, it is unlikely that the Court would not order the repayment of the third party's indebtedness, whether it was secured or not.

17. The wife, who presented as a responsive, open and essentially honest witness denied in her affidavit material and in cross‑examination that the husband had provided from whatever source funds of the order suggested, albeit on an unqualified basis by him in his affidavit evidence. The credibility of the wife's evidence was enhanced by her concessions in relation to the payment of a number of expenses over a period of time. The difficulty which the third party has, as learned senior Counsel for the wife submitted, is that there is no evidence as to what the husband had by way of income at the times the benefits provided by him, and readily conceded by the wife to have been provided, were being made.

18. Where there is conflict in the evidence of the wife and the husband and/or the third party, the Court prefers the evidence of the wife to either of those witnesses. In reality, the area of conflict to which the credit ruling relates is essentially confined to the question of the level of financial support asserted, as noted earlier, albeit on an unqualified basis, by the husband to the wife in the post‑separation period. The credit finding is not crucial in that regard, because, when properly analysed, it is only the wife who gives any qualification of the financial assistance provided or potentially provided by the husband in that period. The husband’s evidence is, in relation to both that and matters generally, best described as vague.

19. There is really no relevant conflict in the testimony of the third party and the wife, the third party not suggesting that in any way the wife knew of or was on notice of any transactions between himself and the husband. As noted earlier, the wife's position in relation to the third party’s claim, as her learned senior Counsel clearly stated it, was that the third party was obliged, if the claim was to succeed, to prove the claim on the balance of probabilities. As will be seen, that involves essentially two aspects of the evidence. The first is the evidence of the husband and the third party. As noted earlier, the evidence of the husband was vague and in some respects difficult to accept in the absence of any documentation, and there was none, supportive of matters stated by the husband.

20. So far as the third party is concerned, as a reading of the transcript would confirm, in short but incisive cross‑examination, senior Counsel for the wife demonstrated a number of material inconsistencies between the previous sworn evidence of the third party and his evidence in cross‑examination. There are also inconsistencies and anomalies in the evidence of the third party, to which reference will shortly be made.

21. Whilst it is trite to observe that whilst the wife did not offer and was clearly unable to offer a contrary version of events, it does not follow that the claims of the third party are thereby automatically entitled to succeed or that their path to success is in any way rendered easier. The reality is that unless, on the balance of probabilities, the Court is persuaded of each element of the claim by the third party, that claim cannot be upheld.

    The second aspect of the evidence which is relevant in relation to the claim of the third party and, as noted earlier was supported by the husband, relates more to the absence of evidence than to its presence. Reference will be made in greater detail in due course to that aspect of the evidence, or non‑evidence, perhaps. In short, as will be seen, there is almost a complete absence of documentation, which must have existed and may well still exist which would have been capable of corroborating the third party's claim. It could be inferred that the absence of that evidence and the absence of any explanation for the failure to adduce that evidence is referable to recognition that the evidence would not have assisted the third party's claim in the manner explained by the High Court in Jones v Dunkel (1959) 101 CLR 298.

22. Some brief material facts are appropriate given that if the third party's claim is unsuccessful the husband does not concede in the wife's favour the whole of the $85 000 fund and the wife is not entitled by default to it. The Court necessarily must address within the context of the matrimonial cause the relevant provisions of s 79 and s 75(2) of the Act. The material facts which follow reflect the Court's preference for the evidence of the wife to that of either the third party or the husband where there is inconsistency.

23. Some procedural events have been identified. Some others are appropriate to be identified, the most significant of which is that on 13 September 2006, the Federal Magistrates Court made a sequestration order against the husband pursuant to the provision of the Bankruptcy Act. There is a report by the husband's trustee in bankruptcy to which reference will, in due course, be made.

24. The husband and wife married in October 1992. They separated under the one roof in October 2004. The husband vacated the former matrimonial home on 25 April 2005. The party's marriage was dissolved on 26 September 2006.

25. There are four children of the marriage. They are aged 13, 12, 8 and 6. At all material times they have been, and the evidence suggests will continue to be, primarily cared for by the wife. The wife is 40 years of age, having been born in 1967. The husband is 41. The evidence suggests that throughout the whole of the marriage, unsurprisingly given the number and ages of the children, the wife was primarily devoted to home making and parenting duties.

26. The parties jointly purchased their first matrimonial home in 1993. The most significant aspect of that is that the parties applied their savings of $20 000 for that purpose and obtained a gift of $5000 from each of the wife's mother and the husband's parents.

27. In 1998, the parties sold their first matrimonial home and they purchased what became their last matrimonial home, the home which was sold and gave rise to the modest fund in contest in these proceedings. The parties refinanced the former matrimonial home in about 2001. There were subsequent borrowings and refinancings during 2003 at which time the husband, it seems, was engaged in what appears to have become a largely unsuccessful business, during that period.

1. The third party contends that in September 2004, he advanced the husband the sum of $14 000, which was repaid about six weeks later. As noted earlier, the parties separated under the one roof in October 2004. The third party contends that he advanced a further $12 000 on or about 4 November 2004 and on 14 December 2004, a further $14 610, although, as will be seen, the figures do not compute.

2. In February 2005, the husband, in his capacity as the sole shareholder and director of a corporation, D Pty Ltd, entered into a franchising agreement with an entity, P (ACT) Pty Ltd, in relation to franchise business in the ACT. He apparently, according to his evidence, entered into a second franchise with that organisation.

3. In April 2005, the husband signed what was intended to be a mortgage over the matrimonial home of the parties in favour of the third party, acknowledging receipt of the sum of $67 000 by way of principal and providing for interest to be repaid. On 18 April 2005, the third party claims to have advanced the husband a further $45 000. The husband vacated the matrimonial home a week later.

4. In October 2005, the husband, in his capacity as the sole director and shareholder of D Pty Ltd entered into franchises with P (NSW) Pty Ltd in relation to a business on the NSW Central Coast. In December of 2005, the husband, in his capacity as the sole director and shareholder of D Pty Ltd, entered into franchises with P (NSW) Pty Ltd in relation to a business in western Sydney and the Central Coast. The husband personally guaranteed the performance of D Pty Ltd in relation to these obligations.

5. In about mid‑2006 the husband and the third party caused to be obtained or incorporated a corporation known as T Investments Pty Ltd. That was at a time when, if the third party and the husband are to be believed, the husband had been in default under the mortgage entered into in April 2005 for in excess of 12 months.

6. In July 2006, the husband and the third party either commenced or negotiated to commence a business known as S Pty Ltd.

7. In early September 2006, P Pty Ltd demanded payment from the husband of a sum of $677 787. The husband was bankrupted in mid September 2006 pursuant to a sequestration order made on that date. On 1 November 2006, the husband filed his statement of affairs pursuant to the provisions of the Bankruptcy Act. On 23 November 2006, the trustee in bankruptcy prepared and filed the first report to creditors. That document is in evidence without objection and will shortly be referred to.

8. In early May 2007, the Commonwealth Bank, in its capacity as mortgagee in possession, sold the former matrimonial home of the parties pursuant to orders of the Supreme Court. That gave rise to the $110 000 fund to which reference has been made.

9. The report of the trustee to creditors is, for reasons which will hopefully in due course become more readily apparent, a significant piece of evidence. The trustee in bankruptcy referred to, at page 3, purported secured creditors of the husband. The first of those was the third party, who was purportedly owed $90 000. That figure may well be referable to the $67 000 provided for in the mortgage, to which reference was previously made, together with accrued interest.

10. What is perhaps more significant, for reasons which will become apparent, is the “possible undisclosed creditors of the bankrupt”, appearing at page 4. The third party does not there appear, notwithstanding that, in an affidavit sworn in this Court in March of this year, he claimed that, in addition to the sums allegedly owed by him pursuant to the mortgage previously given by the husband, the husband owed him a further $75 000. It is unnecessary to speculate about that, sufficient to record that unless, which does not seem to have been suggested, between November 2006 and March 2007, the third party advanced the husband the further sum of $100 000, $75 000 of which the husband repaid, it is difficult to understand why, as an unsecured creditor, the third party did not claim the $75 000 which in his affidavit in this Court in March he was not backward in asserting.

11. There follows a series of references to corporations. At page 5, there is a reference to an entity, S Pty Ltd. The trustee recorded in November 2006 that the husband “was the joint registered proprietor with [Mr K] of a business known as [S Pty Ltd] and that the business has ceased operating”. When it did so is not entirely clear but it is reasonably apparent that whatever the nature of their dealings, and the evidence of neither the third party or the husband adequately or clearly or logically explains any of those matters, the alleged advances have been post-dated, the significance of which is that the evidence of the third party is that the advances were made against a background of the husband claiming to be financially distressed. One must wonder why it would be, particularly as noted earlier that the husband had defaulted from the beginning under the April 2005 mortgage, why the third party in those circumstances would go into business with the husband.

12. During the course of cross‑examination of the third party and, to a lesser extent, the husband, senior Counsel for the wife suggested that the moneys provided, if they had been provided, by the third party to the husband were pursuant to a joint financial enterprise. This Court ultimately does not have to make a finding about that. All that this Court needs to make findings about has earlier been identified. It can, however, at this stage be foreshadowed that, when the evidence in relation to the alleged loans is reviewed, that scenario emerges as far from fanciful.

13. The husband was cross‑examined in relation to an entry in the trustee's report at page 6 which said:

    The bankrupt disclosed in his statement of affairs that he is owed money by the company for a loan taken out for the franchise business of [P Pty Ltd] for an approximate amount of $250,000.

14. The husband, in cross‑examination, made clear that if, instead of “a loan”, one read “loans”, that statement would be accurate. The interesting point of that is that, according to the search conducted by the official trustee, the business in question, P Pty Ltd, which was owned by D Pty Ltd and registered in September 2006, inferentially received $250 000 obtained by the husband subsequent to that date. As with so many other aspects of the evidence, how that could have occurred is unclear, and no evidence adduced on behalf of the husband or the third party clarifies it.

15. On what basis the husband at that time could have obtained loans of $250 000 is unclear. It was not clarified by any evidence in this Court, and it was clearly, to use the colloquial, up in the air at the time of the trustee's report, having regard to his inquiries of the liquidator of D Pty Ltd. D Pty Ltd was placed in liquidation in early September 2006, a curious date, given that the report appears to suggest that that was the date the corporation was, in fact, registered. In any event, it also appears from page 6 of the trustee's report that T Investments was registered on or about mid May 2006. T Investments is the corporation in which the husband and the third party were equal shareholders, and the husband was a director, he, as a bankrupt having to cease to become a director, which he in fact did.

16. Against that brief review of material facts, it is appropriate to consider the first matter requiring determination ‑ that is, whether or not the husband is indebted to the third party and, if he is, whether that is an unsecured debt of the third party or, as the third party contends, a secured debt.

17. The evidence in that respect can broadly be said to fall within two areas. The first is the evidence of the alleged creditor and the alleged debtor in relation to the loan itself. The second area of potential relevance relates to what the husband alleges he did with the moneys which he alleges that he borrowed.

18. It ought to be made clear that if the Court is satisfied of the existence of the loans, the failure of the husband to establish where they went would not, of itself, be fatal to the claims of the third party. The relevance of the evidence in relation to what became of the moneys allegedly borrowed is more in the area of potentially providing corroboration for the claims made by the husband and the third party. As noted earlier, the husband's claim is that the moneys provided by the third party very substantially went to meet expenses and/or debts which had to be funded from somewhere, to put it bluntly. The difficulty with this argument is that there is absolutely no evidence before this Court, nor any evidence of any attempt to obtain evidence, of what the husband was drawing from the corporations or any of them which are referred to in the trustee's report at the times when the financial assistance asserted by the wife, which evidence the Court accepts, was provided. Had that evidence been before the Court and established an absence of any funds, the probabilities of the husband having provided funds obtained from sources other than entities under his control would have been enhanced. The absence of that evidence does not enable such potential enhancement.

19. Such evidence as there is ‑ and it comes largely from the evidence of the husband and the third party ‑ is entirely unsatisfactory in terms of what funds the husband was drawing from time to time, the only evidence being in that regard that he drew between $500 a week and $800 a week, depending upon what we could draw from his business.

20. Turning, though, to the claim with respect to the loans, as noted earlier, cross‑examination of the third party raised significant questions as to the credibility of the third party. Reading of the transcript would reveal that the cross‑examination in relation to paragraph 2 revealed some unsatisfactory matters.

21. It should be said at the outset that the payment which was allegedly repaid and made on or about 2 September 2004 is the only payment which is capable, on the evidence, of being corroborated or otherwise established by source documentation. The first payment was by cheque made out to the husband and crossed “Not negotiable” upon which appear the words “Please pay cash” and a signature, which is identical with that of the third party and signatures of the third party on his affidavit. The evidence of the third party ultimately seemed to be that the cheque was cashed and $14 000 cash paid to the husband. It is to be noted that the cheque signed by the third party was drawn on the names of three people, one of whom, presumably, was the third party. On what basis the third party purported to lend on behalf of those other individuals was not made clear.

22. There was absolutely no evidence of the repayment of that sum six weeks later. It is also relevant that as early as September 2004 the third party was aware that the husband was asserting financial hardship. There was no evidence that the husband received the $14 000 in cash other than the word of the third party and the husband. There is absolutely no evidence that the husband repaid that $14 000 nor does the evidence suggest any source from which the husband might have at that time when he claims to have been so financially stressed obtained $14 000. In his affidavit, the husband simply says that he repaid the $14 000 to the third party, but it took about six weeks.

23. The next payment asserted, and this payment forms part of the claim for $67 000 plus interest, was, according to the third party, necessarily in about November 2004, as a consequence of a conversation to which the third party referred, the payment having been made on 4 November 2004. There was no particular evidence adduced on behalf of the third party as to the circumstances in which the actual payment of $12 000 was allegedly made on 4 November 2004. There is merely the assertion and a reference to an annexure, Annexure B to the affidavit of the third party in support of the third party's claim. Annexure B is a document headed “Transaction details for account […]6”. No name appears on that document. It is not clear with what organisation that document is or might be. The number does not correspond with the numbers on other annexures which might be what they purport to be. All that appears is “Cheque presented $12,000”. The cheque is not in evidence. There is no evidence of any attempt to obtain the cheque on or about 4 November 2004. In the absence of any other evidence, this assertion could not, and having regard to the Court's conclusions with respect to the credibility of the third party, be found to have been proved.

24. The husband's evidence in relation to this alleged advance is that on or about 4 November 2004, the third party gave him a cheque in the sum of $12,000 payable to him.  His recollection was that he:

    … cashed the cheque and placed most of these moneys "into our joint account in the name of [Mr and Ms Tartabull], and with this amount I paid various bills, including car lease payments, home mortgage payments and home accounts.  Those amounts that I retained, although I cannot recall how much I retained, I utilised to pay household expenses.

25. There is no evidence of any moneys referable to this claim having been deposited to the parties joint account nor, surprisingly given the claim, is there any evidence of the matters identified having been paid out of the account. The evidence of the wife, which the Court accepts, is that she normally kept the joint account, and certainly did at the relevant times, and that her perusal of the accounts reveals nothing consistent with the claim of the husband with respect to this transaction. In the absence of any other evidence, the Court could not find on the balance of probabilities that these moneys were provided by the third party to the husband, whether that be on a loan or any other basis.

26. The next payment alleged by the third party on 14 December 2004 was for $14 610. There is, indeed, a statement on an account in the name of three people, one of whom is presumably the third party, showing a customer cheque on 14 December 2004 for $14 610. The cheque is not before this Court. There is no evidence of any attempt to obtain the cheque. As noted earlier, the figures do not balance, in any event ‑ that is the $67 000, as will shortly be realised.

27. The husband's evidence in relation to this topic is word for word identical, paragraph 8, with what he asserted with respect to the alleged payment of $12 000 on 4 November 2004. The evidence is deficient in precisely the same ways. The cheque, as noted a moment ago, is not before the Court. No bank statements showing the lodgement of most of $14 610 into the joint account appear. No cheques showing payments out, no evidence explains the absence of such material. The evidence of the wife that the cheque account statements do not reveal any deposits consistent with the husband's claim is accepted by the Court. In the absence of any other evidence, and there is none, the Court cannot find that, if the husband received the moneys, which is not proved by the evidence, they were utilised in the ways he asserts. As noted earlier, the absence of any evidence, the husband having given a clear account of what he says was done with these funds, is not without significance.

28. The third sum allegedly advanced by the third party on 18 April 2005 was a cheque for $45 000 drawn on the account of three persons, one of whom was presumably the third party. Beyond what appears in his affidavit, the third party says nothing about the circumstances surrounding that transaction. There is no evidence of the cheque. That is not in evidence. There is no evidence of any attempt to obtain the cheque. It is for a very large amount.

29. The evidence of the husband is that he borrowed $45 000 from the third party on or about 18 April 2005. He recalls depositing this cheque into the account of D Pty Ltd. The parties at that time were separated, which the third party knew, the evidence of both the third party and the husband being that the wife had refused to sign the mortgage, which the husband had signed some few days earlier. The husband did not produce any records of any kind nor explain the absence of any such records or give evidence of attempts to obtain them to show this money going into D Pty Ltd or what became of it, if it did. D Pty Ltd is in liquidation. The identity of its liquidator is not in doubt. The trustee in bankruptcy clearly knew who that was, as, no doubt, did the husband.

30. The husband claims that he made various payments out of that account, none of which is evidenced in any way by any documentation. The husband then says in his affidavit:

    I say that in all that I owe the third party $71 610 as a result of the borrowings from 4 November 2004 to 18 April 2005 plus interest.

31. The third party has a different view of that. Clearly, the three alleged advances do total $71 610. The third party, however, says that after the execution of the mortgage and before payment, the husband requested that he give him further moneys, to which he agreed, thus increasing the total amount of his indebtedness by the sum of $4610, representing the addition of the bank statements which are annexed to this affidavit and marked A, B and C. Without labouring the point, the only way that $67 000 can ever have been the balance of the account, if the moneys were advanced, is rather if the payments referred to annexures A, B and C were made, and the Court does not accept that it has been proven on the balance of probabilities that they were, and $4610 was in fact returned rather than received. The documentation upon which the third party relies as to the balance of the alleged loans is consistent with the capital sum asserted by the husband. There is a material inconsistency in the evidence. That inconsistency is in no way clarified given that the absence of a single source document to evidence any of the matters which are asserted. The Court can say no more about that.

32. The mortgage refers to a sum of $67 000. The mortgage is inconsistent with the sworn evidence of both the husband and the third party. It is clear beyond doubt that the husband defaulted under the mortgage from its commencement ‑ that is to say, from April 2005 he has always been in default, notwithstanding which, as noted earlier, subsequent to that time, at its very lowest, the third party and the husband negotiated to go into business together. They acquired a corporate entity as joint shareholders. It is also not in doubt that at no time, the evidence reveals, did the third party ever make a demand by virtue of the defaults of the husband under the mortgage or take any step to enforce his security. There is a logical reason why that may have been the case.

33. The husband and the third party clearly were, at the very lowest, negotiating in relation to business dealings at the time of the alleged advances and had business dealings thereafter, the nature of which has to the been adequately revealed by any evidence adduced by either of them.

34. In paragraph 11 of his affidavit, the third party referred to additional loans from time to time totalling $100 000 of which $75 000 the third party claimed were outstanding. No document has ever been provided in relation to those moneys. Inferentially, those moneys were asserted to have been advanced after April 2005. The Court says inferentially because, notwithstanding the clear wording of paragraph 11, in cross‑examination the third party was unable to recall details of any other dealings which he had had with the husband, a surprising situation, one might think.

35. There is absolutely no credible evidence in relation to these moneys. More importantly, there is no reliable evidence in relation to the times at which and the means by which it is alleged that the husband repaid $25 000 of that $100 000. Notwithstanding the third party's clear assertion that the husband owes him $75 000, as noted earlier, the third party has not seen fit to prove or seek to prove as an unsecured creditor for whatever that might be worth in the bankrupt estate of the husband.

1. These transactions, if they occurred, and if they had the nature and character asserted by the third party and the husband, would have been readily able to be corroborated by obtaining documentation to which reference has been made, cheques, bank statements, things of that kind. They have not appeared notwithstanding the abundance of opportunity to obtain them. If, as is unlikely, these documents do not any longer exist and are not available, that is to say, are not available on subpoena from banks and other organisations who, three years later at the outside, could be presumed to still have these documents, there is simply no evidence of due search and inquiry. There is an abundance of evidentiary foundation for concluding that the absence of this evidence or any explanation of the failure to give the evidence is that the evidence would not have assisted the case being sought to be made out.

2. In cross‑examination, when the absence of documentation was pointed out to the third party, he asserted that his solicitor had made orders of the advances. Those documents were never sought to be tendered in evidence. The solicitor was not called. There was simply no evidence whatsoever to support those assertions. As noted earlier, to the extent that the third party’s claim is sought, it could be rated by the husband’s assertion that what the wife’s evidence concedes he made could only have come from borrowed funds, the evidence of the husband himself, or the absence of any evidence of what he was then earning, does not begin to establish that such, on balance, was the case.

3. The husband’s own financial circumstances, as noted earlier, are even more confusing given his assertion that he borrowed funds of approximately $250 000 for the purpose of P Pty Ltd, the evidence suggesting these transactions to have occurred well after the first alleged advance by the third party in November 2004.

4. As noted earlier, and correctly accepted by his learned Counsel, the third party bore the onus of proving on the balance of probabilities that he loaned funds in the sums alleged to the husband. As these reasons for judgment reveal, not only did the third party fail to prove the payment of funds on any view of what was suggested to be the balance of funds advanced, whether it was $67 000 or $71 000, to the husband.

5. The absence of that evidence would be sufficient basis for rejecting the claim. The circumstantial evidence provides an even stronger foundation for rejecting the claim. Notwithstanding the complete failure to comply with the terms of the alleged loans from the beginning of the alleged loans, the third party took no steps to call up the loans, enforce them. On the contrary, he went into business with the husband. He formed a corporation, T Investments, with the husband. Circumstantial evidence in relation to the conduct of the third party and the husband is inconsistent with any acceptance of a debtor‑creditor relationship. The Court does not need to speculate about how these things happened. But, on balance, the most likely explanation for what is otherwise inexplicable is that, to the extent that the third party provided funds to the husband, which has not been established, it is likely that that was referable in some way to business transactions entered into or intended to be entered into by them. There is no express evidence on this, and the Court does not meet to make a finding about that. It is sufficient to say that the claim is not made out on the balance of probabilities.

6. It follows that any question of a consideration of the status of the third party is unnecessary. It follows that the property of the parties to the marriage is the sum of $85 000. The contribution history of the parties establishes amply the wife’s entitlement on a contribution basis to receive 50 per cent of the $85 000. Her entitlement having regard to the post‑separation period may well be to a greater percentage. But the Court does not need to so find.

7. So far as the one half share, $42 500, to which the husband might, on a contribution basis, be thought to be entitled is concerned, reference to s 75(2) provides an immediate and total basis for extinguishing that interest. The evidence revealed that the husband, as at August of this year, has unpaid child support of $18 000. No evidence adduced by him provides any basis for finding that he lacked the capacity to pay that sum, that the assessment was other than appropriate or, indeed, any rational basis for not concluding, as the Court does, that the wife's only chance of obtaining that arrears of child support is out of the $85 000.

8. There still remains about $27 000 to be accounted for. There are four children who are all young. The wife has and clearly will continue to have the overwhelming financial, emotional and practical burden of providing for those children. The husband has not come clean in relation to his earning capacity. The wife, it can safely be inferred, has, whether by virtue of her skills and experience or the obligation to care for four children of tender years, a lesser earning capacity. She can, with no confidence, anticipate child support in the future. She will, on any view of it, have to provide housing and accommodation with a modest sum of money. Section 75(2) would provide abundant foundation for ordering that the wife receive the totality of the $85 000, and the Court will so order.

9. So far as the application for a splitting order is concerned, the parties are very young. The fund is modest and objectively it would be preferable, notwithstanding that in a notional sense the wife may have an entitlement to a splitting order albeit not in the magnitude sought by her, that no order be made. The Court is mindful in that regard the reality that the husband may, notwithstanding his bankruptcy and notwithstanding the outcome of this case, have other creditors with claims he must satisfy into the future and, that on any view of the evidence, the wife is obtaining the totality of the tangible assets of this marriage.

10. The superannuation fund appears to, according to the trustee and bankruptcy's report, to be in the order of about $8000 to $10 000. The wife herself refers in her affidavit of evidence‑in‑chief to an AMIST superannuation fund worth $5800. In the circumstances, to adjust by way of splitting order in addition to the order with respect to the tangible property of the parties would not be just or equitable, and the Court declines to do so.

11. For those reasons, the orders of the Court will be as per the minutes of order, which are made in terms of paragraphs 1 to 9. It is necessary only to say that no order for costs is proposed. Learned senior Counsel for the wife very fairly conceded that the third party's cost claim had added but minimally to the costs.  The Court accepts that such is the case and that the costs of taxing such costs would probably be disproportionate to the amount involved, hence, there will be no order for costs. For those reasons, the orders are made in the terms of the minutes.

I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman

Associate

Date: 5 March 2008