Toffler and Eggers

FEDERAL CIRCUIT COURT OF AUSTRALIA

TOFFLER & EGGERS

[2014] FCCA 764

Catchwords:
FAMILY LAW – De facto property settlement - where a constructive trust over a property is claimed by an Intervener - contributions of the parties; whether the de facto husband’s earning capacity has diminished - where the de facto husband ceased to participate in the proceedings while still under cross-examination - whether the amount owed by the de facto husband to his former lawyers ought to be paid directly to them as Second Interveners.

Legislation:
Family Law Act 1975, ss.90SF, 90SM, 117

Goldstraw v Goldstraw [2002] VSC 491
Baumgartner v Baumgartner [1987] HCA 59
Allen v Snyder (1977) 1 NSWLR 685
Stanford & Stanford (2012) FLC 93-495
Bevan &Bevan [2013]FAMCAFC 116

Applicant:

MS TOFFLER

Respondent:

MR EGGERS

First Intervener:

MS D
by her Case Guardian
MS CLIFF

Second Intervener

MILLS OAKLEY SOLICITORS

File Number:

MLC 5904 of 2011

Judgment of:

Judge Small

Hearing dates:

24 - 26 June 2013, 11 December 2013
& 28 March 2014

Date of Last Submission:

11 December 2013

Delivered at:

Melbourne

Delivered on:

11 April 2014

REPRESENTATION

Counsel for the Applicant:

Mr Brown SC

Solicitors for the Applicant:

Middlemiss & Co

Counsel for the Respondent:

Mr Williams (24-26 June 2013 only)

Solicitors for the Respondent:

Rodda Legal (24-26 June 2013 only)

Counsel for the First Intervener:

Mr Bornstein

Solicitors for the First Intervener:

Julian Teh, Barrister & Solicitor

Counsel for the Second Intervener:

Mr R Harrison (11 December 2013 only)

Solicitors for the Second Intervener:

Nicholes Family Lawyers

DECLARATIONS

The real property shown as Property W on the Plan of Subdivision (omitted) approved by the (omitted) Council on 18 January 2001 and referred to as Property W in the Updated Building Direction issued by the said Council on 15 January 2013 is held by the Applicant on trust for the Applicant and the First Intervener as tenants-in-common such that the Applicant holds a one-quarter share and the First Intervener holds a three-quarters share.
Following from Declaration 1, and for the reasons set out herein, the First Intervener is entitled to a consequential order that the property situated at and known as Property W in the State of Victoria and more properly described in Certificate of Title Volume (omitted) Folio (omitted) (“the real property”) be subdivided in accordance with the said Plan of Subdivision and that Property W on the said Plan of Subdivision be transferred to the Applicant and the First Intervener as tenants-in-common such that the Applicant holds a one-quarter share and the First Intervener holds a three-quarters share free of all encumbrances.
The shareholder loan accounts detailed in the (business omitted) Pty Ltd income tax returns for the year ended 30 June 2010 are shareholder loans to the Respondent alone.
The Applicant and the Respondent lived together in a de facto relationship between 1992 and 2011 and that relationship was conducted in the State of Victoria.

ORDERS

The real property shall be subdivided in accordance with the Plan of Subdivision (omitted) approved by the (omitted) Council on 18 January 2001 (“the subdivision”) and the Applicant and the First Intervener shall do all such acts and things and sign all such documents as may be necessary to effect the subdivision, including instructing a surveyor, obtaining council approval and registering the proposed Plan of Subdivision so that separate titles issue for the two lots described thereon.
Within 90 days of the subdivision the Applicant and the First Intervener shall do all such acts and things and sign all such documents as may be necessary to transfer to the First Intervener and the Applicant as tenants-in-common in unequal shares the property marked as Property W on the said Plan of Subdivision.
Subject to Orders 1 and 2 hereof, the Applicant shall:
(a)retain all her right title and interest in the real property and indemnify and keep indemnified the Respondent against any liability for the mortgage encumbering the real property and all outgoings of the real property;
(b)Within 90 days cause the mortgage registered number (omitted) to (omitted) Bank currently registered over the real property to be discharged and refinanced so that the Applicant is responsible for the entirety of the balance due and payable under the mortgage and the First Intervener receives her interest in the property marked as Property W on the said Plan of Subdivision free of any mortgage.
The Respondent shall retain all his right title and interest in the company (business omitted) Pty Ltd (“(business omitted)”), including all assets owned by the company, and indemnify and keep indemnified the Applicant in relation to all loans, liabilities, interest, actions, suits, costs, claims, expenses or demands whatsoever whether past, present or future relating to (business omitted).
The Respondent shall forthwith sign all such documents as may be necessary to amend the records in the (business omitted) tax returns for the year ended 30 June 2010 to reflect Declaration 3 hereof.
Within 30 days the Applicant shall do all such acts and things and sign all such documents as may be necessary to transfer all her right title and interest in (business omitted) to the Respondent.
The proceeds from the sale of the property situated at and known as Property F in the State of Victoria are to be released forthwith as follows:
(a)First the sum of $52,263 to the Applicant;
(b)Second the sum of $23,877.23 to the Second Intervener;
(c)Third the sum of $3,487.77 to the Respondent.; and
(d)Fourth any remaining balance to be distributed 55 per cent to the Applicant and 45 per cent to the Respondent.
In accordance with section 90MT of the Family Law Act, whenever a splittable payment becomes payable in respect of the superannuation interest of the Respondent in the Eggers Superannuation Fund (“the Fund”), the Applicant will be entitled to be paid an amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001 using the base amount of $67,885.95 (sixty seven thousand eight hundred and eighty five dollars and ninety five cents) and there will be a corresponding reduction in the entitlement of the Respondent.
The trustee of the Fund must comply with the obligations imposed upon trustees of eligible superannuation plans under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
The Respondent is hereby restrained by himself his servants and agents from making any binding death benefit nomination to the trustee of the Eggers Superannuation Fund in favour of any person who is an eligible beneficiary within the meaning of Regulation 13 of the Family Law (Superannuation) Regulations 2001 which would have the effect of diminishing the value to the Applicant of the splitting order made in paragraph 8 hereof.
Paragraphs 8 and 9 of these Orders bind the trustee of the Fund when these paragraphs take effect from the operative time, being the fourth business day after the date these Orders are served upon the trustee.
The Respondent and the Applicant shall do all such things and execute all such documents as are necessary to facilitate the rollover by the trustee of the Fund of the Applicant’s entitlements pursuant to paragraph 8 of these Orders to another regulated superannuation fund, an approved deposit fund, or a retirement savings account or other such applicable fund or account at the sole nomination of the Applicant as soon as that is practicably possible after the operative time.
The Respondent trustee by himself, his servants or agents shall not do any act or thing that would prevent the Applicant from receiving the benefits and the fund to which she is entitled pursuant to paragraph 8 of these Orders.
Within 60 days the Respondent shall pay to the Australian Taxation Office the balance of the Applicant’s taxation debt owed for the year ending 30 June 2010 including any interest and/or penalties accrued.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:
(a)each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders. The chattels in the real property known as Property W are deemed to be in the possession of the Applicant and the chattels in the real property known as Property W are deemed to be in the possession of the First Intervener;
(b)monies standing to the credit of the parties in any joint personal bank account are to be divided 55% to the Applicant and 45% to the Respondent;
(c)each party shall forgo any claims they may have to any superannuation benefits belonging to or earned by the other;
(d)insurance policies remain the sole property of the life insured named therein;
(e)each party shall be solely liable for and indemnify the others against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and
(g)each party forgoes any claim they may have to any inheritances to which the other party is entitled to either presently or in the future.

AND THE COURT NOTES

A.That procedural fairness has been afforded to the trustee of the Eggers Superannuation Fund.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT MELBOURNE

MLC 5904 of 2011

MS TOFFLER

Applicant

And

MR EGGERS

Respondent

MS D by her Case Guardian MS CLIFF

First Intervener

MILLS OAKLEY LAWYERS
Second Intervener

REASONS FOR JUDGMENT

Introduction

This is a de facto property settlement matter in which the mother of the Applicant de facto wife, Ms D (“the First Intervener”), has intervened to claim, under a constructive trust, title to or a life interest in part of one of the assets owned by the Applicant and the Respondent.
She says that she acted to her detriment in giving the sum of $55,000 to the Respondent’s building company in 2000, relying on a promise by the Applicant and the Respondent that she would own the home unit to be built on a portion of the parties’ property, which they intended to sub-divide for that purpose.
The Applicant de facto wife Ms Toffler (“the Applicant”), the Intervener’s daughter, supports her claim, while the Respondent de facto husband Mr Eggers (“the Respondent”) says the First Intervener has no interest in the parties’ property and that all the assets should be divided between him and the Applicant alone.
The Second Intervener is the law firm which represented the Respondent for the first year or so of these proceedings. That firm has intervened in order to secure costs owed to it by the Respondent.
Thus, there are several issues before the court:
a)Whether the actions of the Applicant, Respondent and First Intervener gave rise to a constructive trust whereby the Applicant holds that parcel of land and the dwelling on it known as Property W on trust for the Intervener;
b)If the first issue is decided in the affirmative, what is the value of the interest held under that trust?
c)Once the first issue is decided, what is the property to be distributed as between the Applicant and the Respondent, what are the interests held by the Applicant and the Respondent in that property, and what is the value of those interests?
d)Whether, pursuant to s.90SM(3) of the Family Law Act 1975 (“the Act”), it is just and equitable to make orders altering the property interests as between the Applicant and the Respondent;
e)If that question is answered in the affirmative, what orders should be made under s.90SM(1) of the Act having regard to the matters set out in s.90SM(4)?
f)Should an order be made:
i)that the Respondent be ordered to pay the costs owed to his former lawyers from any monies he receives from the settlement of property interests between him and the Applicant, and; if so
ii)should those monies be paid directly to the Second Intervener before they reach the hands of the Respondent?

Background

Before addressing the above issues it is relevant to set out some of the background to the dispute.
The Applicant and Respondent began living together in August 1991 (according to the Applicant) or May 1992 (according to the Respondent). They separated finally on 14 March 2011, there having been one six month period of separation in 1994. Thus the period of cohabitation is 19½ years or 18¾ years, but I do not think anything turns on that difference.
There is one child of the relationship, namely X born (omitted) 2004 (“X”). X lives with her mother and spends time with her father by agreement between her parents.
The Applicant is 45 years old, having been born on (omitted) 1968. She is employed as a part-time (omitted), and during the relationship she also received wages from the husband’s building company.
The Respondent was born on (omitted) 1960 and is now 54 years old. He has historically worked as a self-employed builder and building consultant although he says he is now unable to work as a result of complications arising from hip replacement surgery.
The First Intervener is 70 years old. She is the mother of the Applicant and is retired. She has been incapacitated by a series of strokes suffered between the first three days of trial in June 2013 and the adjourned date of 11 December 2013.
When the parties began living together the Applicant owned a motor vehicle, some furniture and personal effects, and some nominal savings.
The Respondent owned a home with his then wife, from whom he was separated, at Property O (“the Property O property”). He gained sole title to the Property O property in March 1993. The Respondent also owned a motor vehicle and a one third interest in his family’s building firm.
The Applicant and Respondent lived in the Property O property until its sale, and then in rented accommodation in the same area until they moved into their own property in 2001.
There was a period of separation of approximately 6 months in 1994 during which the Applicant lived with her mother, the First Intervener.
At some time in 1995, the Respondent established (business omitted) Pty Ltd (“(omitted business)”) with his two brothers, Mr R and Mr P.
On 1 June 1995, (business omitted) Pty Ltd (“(business omitted)”) was incorporated, with the Respondent and his brothers being the Directors and joint shareholders. (business omitted) is a company providing construction, consultation and project management services to the building industry.
In December 1996 the Applicant purchased the property at Property F (“Property F”). That property was renovated by the Respondent and/or (omitted business) during the relationship, and was sold in the course of these proceedings.
From 2000 until its sale Property F was occupied by the Respondent. The net proceeds of sale from Property F are held in trust for the parties pending the outcome of these proceedings.
In September 1999 the Applicant and Respondent bought land at Property W (“the Property W property”), a suburb of (omitted), that property being registered in their joint names. The purchase price was $57,000.
In the same year the First Intervener sold her property at Property H (“the Property H property”) which left her with net proceeds of $59,000. She then moved in with the Applicant and Respondent in their rented accommodation at (omitted), and later moved with them to another rented house in (omitted).
Soon after settlement of the sale of the Property H property the First Intervener deposited the sum of $55,000 into the account of (omitted business). The nature and import of that payment is at the crux of these proceedings, at least in relation to the task of defining the property owned by the parties to the de facto relationship.
The Applicant and Respondent began building their own house on the Property W property in 2000.
In February 2000, (omitted business) was placed into liquidation. In the same year the Respondent set up an office in (omitted) and began working from there while residing during the week at the Property F property.
The ownership of (business omitted) was changed at that time, with the Respondent becoming the sole Director and Secretary, and all 12 shares being allocated to the Applicant.
A surveyor was engaged to prepare a Plan of Subdivision for the Property W property which was certified by the (omitted) Council on 18 January 2001. However no change was made to the certificate of title and the Property W property remains unsubdivided.
I shall refer to that portion of the Property W property which contains the house in which the Applicant and Respondent lived as “Property W”, and the portion on which the second dwelling was built as “Property W2” for ease of reference and convenience.
The parcels of land referred to in those terms are those described as Lot 1 and Lot 2 in the Plan of Subdivision approved by the (omitted) Council on 18 January 2001.
In 2001 the Applicant, Respondent and First Intervener moved into Property W.
In that same year, the Property W property was transferred from the joint names of the Applicant and the Respondent to the name of the Applicant alone.
From about 2004 a dwelling in the form of a self-contained unit was built on the Property W2 property. Although not finished, the First Intervener was able to move into that unit in late 2010. The First Intervener has lived in that property, which by all accounts has still not been completed according to plan, ever since.
After the demise of (omitted business), the Respondent was employed solely by (business omitted) as a project and construction manager for the remainder of the relationship.
There is no dispute between the Applicant and the Respondent about whether (business omitted) has any current value (both agree that it does not), but there is a dispute as to whether its debts ought to be considered as joint debts of the parties.
At the time of separation, both parties had superannuation entitlements – the Applicant’s being in (omitted) and the Respondent’s being in the Eggers Superannuation Fund, a self-managed superannuation fund established in 1995 whose members are the Respondent and his two brothers Mr R and Mr P.
On 6 December 2013, the Respondent deposed that his entitlement in the Eggers Superannuation Fund was $672,972, having decreased from $730,000 as at 15 August 2011.
After the parties separated on 14 March 2011, and over the ensuing year or so, the Respondent sold certain assets, some of which belonged to (business omitted), including shares, plant and equipment and a car.
The Respondent had repartnered by mid-2011 and is now in a relationship with Ms H (“Ms H”). Ms H is the sole owner of a business called (omitted business) and the sole Director and shareholder of a company called (business omitted) Pty Ltd.
At the time the matter came before me for final hearing in June 2013 the parties were primarily in dispute about the ownership of the Property W property, and the ownership of the remaining proceeds of sale of Property F. There was also dispute about the Respondent’s actual financial position and his earning capacity.

Procedural History

These proceedings were begun by way of an Initiating Application, Financial Statement and supporting Affidavit filed on 5 July 2011.
The Applicant sought orders that the Respondent pay her certain sums of money on a regular basis, those monies being categorised as wages, rental payments and school fees for X.

Further orders were sought for a general just and equitable division of the property which would include the applicant retaining the property at Property W and the Property F property. She would transfer her shares in (business omitted) to the Respondent and he would be responsible for all loans and debts of the company.
The Applicant also sought orders for specific discovery and a restraint on the Respondent disposing of certain sale proceeds in relation to the sale of business plant and equipment and materials, and that such funds be paid by the Respondent into the Applicant solicitor’s trust account to be held on trust pending resolution of the proceedings.
The First Intervener filed a Notice of Address for Service on 29 July 2011.
On 1 August 2011 orders were made by consent before Federal Magistrate Bender (as Her Honour then was) in relation to the Respondent paying rent for Property F, and the Applicant paying the mortgage loans and other outgoings on Property F and the Property W property.
Further consent orders provided for a restraint on the Respondent disposing of the net funds received from the sale of plant and equipment belonging to (business omitted), for the Respondent to file response material before 15 August 2011, and for the parties to attend a private mediation with the cost of that mediation to be borne equally by the Applicant and the Respondent.
The matter was then adjourned to the circuit sitting of the Federal Magistrates Court (as it then was) at Bendigo in the week beginning the 21 November 2011 for final hearing.
The Respondent filed his responding material on 15 August 2011, seeking orders which would result in him retaining the Property F property subject to its mortgage, his entitlement in the Eggers Superannuation Fund, all his interest in (business omitted), and the chattels and savings in his possession. The Applicant would retain the Property W property subject to its mortgage, her superannuation, her motor vehicle and the chattels and savings in her possession. He also sought orders that would release him from any personal guarantee signed by him in relation to the Applicant’s borrowings from the (omitted) Bank.
On 6 October 2011 the First Intervener filed an Application in a Case with supporting affidavit seeking leave to intervene in the proceedings, and declarations and orders which would entitle her to the whole of Property W2.
On 21 November 2011 Federal Magistrate Bender made an order granting leave to the First Intervener and the matter was otherwise adjourned for final hearing with an estimated hearing time of two days to 25 June 2012 with priority.
The Applicant filed her Trial Affidavit on 8 June 2012, and the First Intervener filed hers on 14 June 2012.
On 22 June 2012, the Respondent filed his trial Affidavit, and supporting Affidavits from his brother Mr P, his father Mr Eggers, his current partner Ms H, Mr G, who drew up the Plan of Subdivision in relation to the Property W property in 2001, and Mr R, who had sold the property at Property O for the Respondent in 1997.
He also filed Affidavits from valuer Mr J in relation to two properties owned by the Eggers Superannuation Fund and from quantity surveyor Mr M in relation to the potential development of the Property W property.
On 25 June 2012 Federal Magistrate Bender made substantive orders by consent for the sale of the Property F property.
The proceeds of sale were to be used to discharge two mortgages encumbering the Property F property, a business loan and business overdraft both in the name of (business omitted), and a loan advanced to the Applicant.
The remaining proceeds of sale were to be distributed as to $20,000 to the husband with such sum to be characterised the final hearing, and the balance to be held in an account in joint names requiring the signature of both parties, that account to be held as an offset against the mortgage secured over the Property W property.
The matter was then adjourned again to 19 November 2012 before Federal Magistrate Walters (as His Honour then was) with an estimated hearing time of four days with “absolute priority”.
On 19 November 2012, Federal Magistrate Walters administratively adjourned the matter by consent to 29 April 2013 with an estimated hearing time of 3 to 4 days.
On 8 March 2013 a telephone mention of the matter was heard by Federal Magistrate Riethmuller (as His Honour then was) and the hearing dates of 29 April 2013, 30 April 2013, 1 May 2013, and 2 May 2013 were vacated.
Federal Magistrate Riethmuller then adjourned the matter to a date to be fixed with priority with an estimated hearing time of three days.
On 7 June 2013 the matter came before me by way of a telephone mention for the hearing of an application by the Respondent for an adjournment of the final hearing which had been listed on 24 June 2013. That application was heard and dismissed.
The matter ultimately came before me for final hearing on 24 June 2013 and proceeded for three days. Mr Brown SC appeared for the Applicant, Mr Williams of Counsel appeared for the Respondent, and Mr Bornstein of Counsel appeared for the First Intervener.
Oral evidence was heard from the Applicant, who was cross-examined by Counsel for the Respondent, and from the Respondent, who was still under cross-examination by Counsel for the Applicant when the matter reached the end of its third day.
At the cessation of proceedings on 26 June 2013, orders were made for the valuers of the Property W property to confer; for the Applicant and Respondent to file updated financial statements; and for the release of such sum as might be necessary to discharge the Capital Gains Tax liability on the sale of the Property F property. The matter was then adjourned part-heard to 11 December 2013.
On 8 November 2013, Rodda Legal, who had been acting for the Respondent, filed a Notice of Ceasing to Act (sic).
On 15 November 2013 the Respondent filed a Notice of Address for Service in his own name.
On 4 December 2013, Mills Oakley Lawyers (“the Second Intervener”), who had represented the Respondent in these proceedings until 11 September 2012, filed an Application in a Case seeking to intervene in the proceedings in an attempt to secure their costs unpaid by the Respondent in the sum of $22,425.04 plus interest. Mills Oakley Lawyers also sought its costs of and incidental to that Application on an indemnity basis.
On 6 December 2013 the Respondent filed an Affidavit which, among other things, said that he was unable to afford legal representation for the further hearing on 11 December 2013 and that the stress and anxiety of attempting to represent himself would be detrimental to his health. He deposed that he was “unable to put myself through that process again”, and that he was providing this “final Affidavit detailing my circumstances in the hope settlement can be determined”. He also filed an updated financial statement on that date.
On 9 December 2013, an Application in a Case was filed by Ms Cliff seeking an order for her to be appointed as litigation guardian for the First Intervener, who had been incapacitated by a series of strokes since the last day of hearing on 26 June.
Again on 9 December 2013, a letter seeking an adjournment of the hearing listed for 11 December 2013 was received in my chambers by email from the solicitors for the Applicant. That letter sought an adjournment on three grounds:
·Mr Brown SC, who had appeared for the Applicant at the part-heard hearing in June 2013, was not available as he had not been made aware of the specific adjourned date until the previous working day;
·The First Intervener had suffered two major strokes and her solicitor would be seeking an order for a litigation guardian; and
·The application of the Second Intervener had only been received on the previous working day and the Applicant’s solicitors needed time to consider the Application and whether the deponent of the Affidavit in support of the Application would be required for cross-examination.
The Applicant’s solicitor indicated that the First Intervener’s solicitor had consented to the proposed adjournment and that he had written to the Respondent to seek his consent.
On 10 December 2013, a letter addressed to me and dated 9 December 2013 was received from the Respondent, also by email.
That letter set out the Respondent’s objections to the adjournment request from the Applicant’s solicitors as set out above, and said further:
I do not consent to any further adjournment of this matter. My request for adjournment in March of this year due to my serious health issues, providing over three months notice was vehemently opposed by both other parties and statements made that they were ready to proceed. This was not the case and a further hearing was required.
My health suffered greatly after the hearing and as outlined in my affidavit filed 6 December 2013 I am unable to pay for legal representation or represent myself and I request that a determination be made on the information provided to the court over the past 2½ years and during the three day hearing held in June of this year.
Since filing my affidavit on Friday afternoon I have received several email correspondences from Mr Julian Teh advising me of Ms D’s poor health and her inability to participate in the proceedings and that she has appointed a litigation guardian. I feel that given both the Applicant and the intervener had dealt with the issues of Ms Toffler’s health and adjournment would not be required.
I respectfully request that you also consider my current circumstances when making your decision regarding the matter of adjournment.
A further letter from the Applicant’s solicitors was received in chambers by email on 10 December 2013, notifying the Court that Mr Brown SC was now available for the hearing on 11 December and that there would be no application for an adjournment.
At the adjourned hearing on 11 December 2013, Mr Brown SC again appeared for the Applicant, Mr Bornstein of Counsel appeared for the litigation guardian for the First Intervener, and Mr R Harrison of Counsel appeared for the Second Intervener.
As no appearance had been entered by or on behalf of the Respondent, the Respondent was called outside court but there was no response to the call. The matter was then stood down so that the Applicant’s solicitor could attempt to contact him.
Upon the court resuming, the Court was informed that a call had been placed to the number provided by the Respondent in previous material and that while there had been no answer to the call, a message had been left on that number to indicate that the matter was before the court, and that, as matters presently stood, the case would be proceeding and orders might be made to the Respondent’s detriment. The Court was also informed that the Applicant herself had sent a text message to the Respondent to alert him to the proceedings.
I note that no response was received from the Respondent either at that time or at any other time during the hearing on that day, or indeed at any time between then and mid-March 2014. The matter therefore proceeded in his absence.
The Applications of the Second Intervener and Ms Cliff were then heard and both Applications were successful.
It was then put to the Court that as the Respondent had asked that the matter proceed on the basis of evidence already given, and that both the Applicant and the First Intervener concurred with that view, that the matter should proceed by way of closing submissions. I agreed with that proposal and the matter proceeded on that basis.
No further evidence was heard. Counsel for all remaining parties made submissions and judgment was reserved.
On 28 March 2014, a further mention of the matter was held so that the court could obtain sworn evidence from the Respondent about his superannuation entitlements and whether the trustees of the Eggers Superannuation Fund had been provided procedural fairness.
It was necessary to obtain that evidence because the last sworn evidence before the court about the Respondent’s superannuation entitlements was contained in an affidavit sworn in mid-2012 wherein Mr Eggers stated that the Eggers Superannuation Fund was about to be split so that his entitlements would be available for a superannuation split in these proceedings.

The Issues, the Evidence and Findings

A. Whether the actions of the Applicant, Respondent and First Intervener give rise to a constructive trust whereby the Applicant and Respondent hold Property W2 in trust for the First Intervener

The Applicant’s evidence is that in 1999 the Property W property was purchased by her and the Respondent, and was registered in her name for asset-protection purposes. The purchase price was $60,000 which was met from the sale proceeds from the Respondent's Property O property.
The Applicant says that she and the Respondent had purchased the Property W property because it was of sufficient size to build a home for them and X, and also to build a further home or unit for the First Intervener on a portion of the property which would be subdivided for that purpose.
It has always been her understanding that the money the First Intervener paid to (omitted business) was to cover the cost of construction of a unit which was to be built on the Property W property for the First Intervener. That unit was never intended to be an investment property.
The Applicant says that her mother sold her own property on the clear understanding that in consideration of the funds she applied to the Respondent’s building firm, a dwelling would be constructed for her on the Property W property and that ultimately the title to that portion of the property would pass to her.
She says that the Respondent and/or (omitted business) built Property W2 and that the First Intervener paid $55,000 to (omitted business) for the cost of the construction of the unit.
The Applicant deposes that her mother was fit, healthy and active at the time she sold the Property H property in 1999, rejecting the Respondent’s evidence that she was in ill health and that that was the reason for her selling her home and moving in with the Applicant and Respondent in 2000.
She says that a certificate of final completion has not issued in relation to Property W2 and that significant works, including the completion of brickwork, building of steps and a deck, and completion of the verandah framing and roof, need to be completed before such a certificate can be issued.
Her evidence is that, after separation, the Respondent ceased to work on the Property W property after she told him she did not want him staying at the property overnight and asked him to stay elsewhere.
She insisted, under quite robust and persistent cross-examination, that the arrangement between the parties had been that the money paid by the First Intervener would be applied towards the construction of a dwelling on the Property W property which the First Intervener would own, and not one that she would merely have a right to occupy.
The Respondent’s evidence is that the purchase price of the Property W property in 1999 was $69,500 which was funded from the sale proceeds of the Property O property. The Property W property was registered in the name of the applicant for asset protection purposes. His evidence is that it was always the intention of the parties to subdivide the Property W property and built two homes on it, one at the front and one at the rear.
The Respondent says that in late 1998 or early 1999, the Applicant had become concerned for the welfare of her mother, the First Intervener. The First Intervener was in poor physical and emotional health, and was having difficulty managing the external stairs at her property.
It is the Respondent’s evidence that as a result of these circumstances the Applicant suggested that the First Intervener sell her Property H property, and she did so in 1999. It was decided between all parties that the First Intervener would live with the Applicant and Respondent until the Applicant and Respondent could purchase a property large enough to build two homes, one for themselves and one for the First Intervener.
The Respondent’s evidence is that there were no conversations or discussions, either at that time or later, to the effect that the First Intervener would own a share of the second dwelling.
The First Intervener contributed approximately $55,000 to (omitted business) in or about March 1999. The Respondent says that the purpose of that payment was to assist with the expenses he and the Applicant incurred as a result of finding and purchasing the land and other costs associated with obtaining permits for the two dwellings.
The Respondent’s evidence is that as a result of (omitted business) going into administration, he and his brothers felt personally responsible for the loss of the First Intervener’s money, and as a result agreed to provide her with a home to live in.
His evidence is that he attempted to have the (omitted business) refund the First Intervener’s money to her but that he had been unsuccessful in that attempt.
The Respondent’s evidence is that building on the Property W property began in 1999 and that the cost of construction of Property W and the partial construction of Property W2 was approximately $466,500. The sum of $129,500 was provided from the sale of the Property O property; a further loan of $90,000 was secured against Property F; the parties provided $27,000 from their personal savings to landscape the Property W property; and a further sum of $220,000 was borrowed from the (omitted) Bank using the Property W property as security.
The Respondent says that he undertook all the project management and performed labour for the construction of the dwelling at Property W, although he concedes that the Property W2 property remained uncompleted.
In 2004, the Respondent’s evidence is that his brother Mr R provided his labour at half his normal rate to complete the frame and roof on Property W2 at a cost of approximately $50,000 which was funded from the sale proceeds of a property that he and the Applicant had bought and sold in the mid-1990s.
He says that in October 2010 he and the applicant agreed to borrow the sum of $100,000 from (omitted) Bank to recommence the works on Property W2, and that a further $80,000 was borrowed to complete the project.
His evidence is that a total of $279,050 was spent on the construction of the unit at Property W2.
He concedes that there are some unfinished external works to be completed at Property W2, namely incomplete decking and pergola, roof, flashings, external painting and roller door rectification, as well as ensuring that a separate electricity supply is provided for that property once the Property W property has been subdivided.
He agrees that the reason those works were not completed is that the Applicant asked him not to return to the Property W property on weekends after separation.
The First Intervener moved into Property W2 on 24 December 2010.
The Respondent denies that Property W2 belongs to the first intervener.
The First Intervener’s evidence is that in 1999 the Property H property was in need of refurbishment, and that during discussions with the Applicant and the Respondent, the Respondent had proposed that they should “buy land, build two units in it and subdivided, one would be for them and the other for me. As Mr R was (and is) a builder, he would be able to do the actual construction, and I would provide my capital.”[1] It is her evidence that it was clearly understood by all three parties that she would acquire an interest in what was to be “her unit”.
[1] Affidavit of the First Intervener filed 6 October 2011 p2
It was on the basis of that proposal that she sold her Property H property and moved in with the parties in their rented accommodation at (omitted).
The First Intervener’s evidence is that in March 1999, (omitted business) was in financial difficulties and the respondent asked her to give him the proceeds of the Property H property sale. She says she deposited $55,000 to the trading account of (omitted business) “on the faith of his promise to build my home”[2] shortly after settlement of the sale.
[2] Ibid

She is clear in her evidence that the payment of $55,000 to (omitted business) was not related specifically to the cost of purchase of the land or the obtaining of permits for the building.
She says that when (omitted business) went into liquidation early in 2000, she did not seek repayment of the money as she had understood that it was to be used to build her a home. She says that the Respondent had reassured her at the time that her home would be built “faithfully and promptly”[3].
[3] Ibid
She specifically denies any knowledge of discussions between the Respondent, his brothers and the Applicant to the effect that the work (omitted business) had undertaken to the Property F property at no charge would offset her contribution to (omitted business) for Property W2. She also denies any knowledge of the Respondent’s attempts to have the Administrators of (omitted business) repay her money.
The First Intervener’s evidence is that a Plan of Subdivision was prepared by Mr G, Surveyors and was submitted to and certified by Council. However, no further action was taken in relation to the subdivision of the Property W property.
She says that the foundations for her house were laid and brick fences for the courtyards and retaining walls were erected. Construction then ceased for several years, although the Respondent would frequently say to her “Nanna, you will be in your house by Christmas”[4].
[4] Ibid p4
The First Intervener deposes that at the time of the construction of Property W she was not informed of any decision that had been made to delay the construction of Property W2. Her understanding was the delay in completion was due to mismanagement and financial difficulties on the part of the Respondent rather than any conscious decision to delay the construction. It is her evidence that she was continually told that work on her unit would continue shortly and that there would be a separate title for it.
After some years of the building progress being stalled, the frame, roof and shed were built in the “mid-2000s” and the First Intervener’s evidence is that the Respondent used the shed to store building materials for other projects.
Work recommenced in about August 2010 and she was able to move in on Christmas Eve 2010.
However, the property remains unfinished and the First Intervener deposes to the following issues as requiring attention:
·a separate power supply needs to be connected to the Property W2 property;
·an external deck needs to be completed;
·there is no flashing over the connection between the roof of the deck and the roof of the dwelling so that water cascades down the exterior wall of the kitchen;
·painting needs to be completed;
·the roller door needs to be repaired;
·no Certificate of Occupancy has been issued.
The First Intervener says that if she had known that her house would not be completed until 2010, she would never have sold the Property H property.
In addition to the $55,000 paid to (omitted business) in 2000, the First Intervener says that she has paid for fittings and materials for her dwelling, and that she pays the municipal and water rates on an ongoing basis, as well as building and contents insurance for the dwelling.
She says in her Affidavit material that she is not in good health, having suffered a mild stroke in 2009 and currently suffering from hypertension and depression. She believes that the situation in relation to her living arrangements, where she was dependent on her daughter while waiting for 10 years for her house to be built, has contributed to her health problems.
I note that the First Intervener has suffered two strokes since the first final hearing days of these proceedings and that a litigation guardian was appointed for her at the final day of hearing on 11 December 2013.
Upon considering the evidence as a whole, and after having the opportunity to see the Respondent and the Applicant in the witness box under cross-examination on this issue, I find that at the time the First Intervener gave $55,000 to the Respondent in 1999 it was the understanding and intention of all parties that a property would be bought by the Applicant and Respondent, upon which would be built a dwelling for the Applicant and the Respondent and a dwelling for the First Intervener.
I find that it was the understanding and intention of all parties that the First Intervener would acquire the title to the subdivided portion of land upon which her dwelling was to be constructed.
The First Intervener sold her home, her only asset, and gave the overwhelming majority of the sale proceeds to the Respondent. It tests credibility to think that she would have done so had she not expected to receive a major asset, or an interest in such an asset, in return.
Her evidence, and that of the Applicant, is compelling on this issue.
The Applicant was cross-examined at some length about this issue and could not be shaken. Overall I found her to be a truthful and credible witness.
While the First Intervener was not placed under cross-examination, through no fault of her own, her Affidavit account of events surrounding the transfer of the money, and conversations that were or were not engaged in at that time and subsequently, have the clear ring of truth.
In contrast, the evidence of the Respondent on this issue is not persuasive.
His initial evidence, found in his affidavit material, that the $55,000 was to pay the costs of finding and buying the land and obtaining permits for the proposed subdivision, is simply not credible.
At trial the respondent was cross-examined about this matter and said then that the payment had been an investment made by the First Intervener in (omitted business).
He was unable to say why the First Intervener might have placed her only capital in a business which was struggling, and which collapsed about 12 months later, without an expectation and understanding that she would receive some return on that investment. There is no evidence before the court that the First Intervener was an investor in business in general, or that she engaged in gambling of any kind.
For these reasons, where the evidence of the Applicant and the First Intervener conflicts with that of the Respondent on this issue, I prefer the evidence of the Applicant and the First Intervener.
I therefore find that when the Applicant and Respondent bought the Property W property they held part of that property upon trust for the First Intervener pursuant to a constructive trust.
The law in relation to constructive trusts is well established. A constructive trust may arise in several ways: one of which is in a situation where “there is a common intention that a person will acquire an interest in a particular property in which another party holds legal title, and the person acts on that the belief to his or her detriment, such that it would constitute a fraud to deny the interest intended to be acquired”[5]
[5] Goldstraw v Goldstraw [2002] VSC 491 per Dodds-Streeton J at paragraph 26.
In the matter of Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, the High Court, approving comments made by Mahoney JA in Allen v Snyder,[6] said:
… the foundation for the imposition of a constructive trust in situations of the kind mentioned is that a refusal to recognise the existence of the equitable interest amounts to unconscionable conduct and that the trust is imposed as a remedy to circumvent that unconscionable conduct. [7]
[6] (1977) 1 NSWLR 685
[7] Baumgartner v Baumgartner paragraph 30
I have found as a matter of fact that there was a common intention among the parties that the property upon which the First Intervener’s dwelling was to be built was to be hers in the legal sense and not merely in the sense that she would have a somewhat amorphous right to live there.
Providing almost the whole of her existing capital to the Respondent on the basis of a promise by the Applicant and the Respondent that a second dwelling would be built for her on a property to be bought in the future, and that she would have legal title to that portion of the prospective property, constitutes, in my view, an act to her detriment, and it would be unconscionable for the Applicant and Respondent to deny her interest.
Therefore, I find that a constructive trust exists such that the Applicant holds the beneficial interest in Property W2 upon trust for herself and the First Intervener.
I find the amount of the interest in Property W2 held on behalf of the First Intervener to be seventy five per cent (75%).
It is impossible to say what $55,000 in 1999 would be worth in 2014 dollars on the evidence before the Court, but the Property W property as a whole was purchased as vacant land in 1999 for $69,500.
Therefore, the First Intervener’s contribution in 1999 was very significant and she should not be disadvantaged by the length of time taken to build her dwelling.

B. If the first issue is decided in the affirmative, what is the value of the interest held under that trust?

The agreed value of that portion of the property is $415,000.
I have found that the First Intervener has a 75% interest in Property W2, so her interest, held by the Applicant on trust for her, is valued at 75% of its value, or $311,250.
The value of the beneficial interest held by the Applicant is therefore twenty five per cent (25%), or $103,750.

C. Whether, pursuant to s.90SM(3) of the Family Law Act 1975 (“the Act”), it is just and equitable to make orders altering the property interests as between the Applicant and the Respondent.

In Stanford & Stanford[8], the High Court made clear that this decision must be made before any order is made altering the interests of parties to property in family law proceedings.
[8] Stanford & Stanford (2012) FLC 93-495
In Stanford the High Court said at paragraph 42:
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 the wife.
In Bevan & Bevan the Full Court said that the circumstances described in the above passage of the Stanford judgment “encapsulate the vast majority of cases”[9]. While these parties were not married, the principles set out in Stanford and Bevan apply equally to de facto relationships.
[9] Bevan & Bevan [2013] FAMCAFC 116 paragraph 70
In this case, the parties were in a de facto relationship for about 19 years. They have a child who has not yet attained the age of 18 years.
Property was bought and sold during the relationship such that the parties now have an interest in the Property W property, the sale proceeds of Property F and various other assets, as well as in significant superannuation entitlements.
It is clear that there cannot be common use of that property now that the relationship is over.
In those circumstances I find that it is just and equitable in all the circumstances to adjust the property interests of the parties.

D. Once the first issue is decided, what is the property available for distribution as between the Applicant and the Respondent?

(business omitted) Pty Ltd

It is the evidence of both parties that (business omitted) was established by the Respondent in the mid-1990s to allow him to conduct his business through a corporate entity. The Respondent is the sole director and secretary of (business omitted) but the 12 issued shares have been allocated to the Applicant. (business omitted) employs the Respondent as a project and construction manager.
It is the Applicant’s evidence that the Respondent has and always had complete management and operational control of (business omitted) and that she knew little of its operational or financial issues.
The Respondent’s evidence is that while (business omitted) was under his control, the Applicant knew about which projects were being tendered, whether (business omitted) had been successful in the tendering process and how much contracts obtained were worth. She also had access to company bank statements until about 2008 when the company moved to online statements.
When taken as a whole, the evidence of the parties leads me to the conclusion that while the Respondent actually controlled the company and its outgoings, the Applicant must have known some details about its operations and finances, at least until 2008.
Therefore the assets and debts of (business omitted) will be considered in the making of orders in this matter.

The loan accounts and the tax debt

The financial statements of (business omitted) for the year ended 30 June 2010 contain shareholder loan accounts (“the loan accounts”) which show loans totalling $275,327 having been allocated to “Mr Eggers and Ms Toffler” from 2005 to 2009.
In relation to those loans the Applicant’s evidence is that she has never received any of the monies stated in the loan accounts of (business omitted), and that the allocation of the loans was entirely within the Respondent’s control as Director of the company.
The Applicant gave evidence that her perusal of the (business omitted) financial statements and income tax returns for the years prior to 2010 show that the loan accounts were always in the name of the Respondent alone and not in the joint names of the parties. It was only in the 2010 tax return that all the loans, including those of previous years, were declared as having been in the names of both parties.
In those circumstances the Applicant denies that any liability falls to her for the repayment of the loans set out in the loan accounts of (business omitted) as at 30 June 2010 or for the year ended 30 June 2011.
She seeks an order or declaration to the effect that the loan accounts of (business omitted) are the liability of the Respondent alone.
When she spoke to the then (business omitted) accountant in relation to the loan accounts in 2010, it is her evidence that she was told that it was necessary to allocate a dividend to her in order to avoid tax problems for the company.
She deposes that she agreed under some pressure to declare a franked dividend of $50,980 in her 2010 tax return on the basis that the Respondent had assured her that he would pay the income tax liability related to that dividend.
It is the Applicant’s evidence that the husband has not paid that liability in full and she now has a debt to the Australian Taxation Office (“the ATO”) of $4,300 as a result of her 2010 tax return showing an artificially high income.
She seeks an order or declaration that the Respondent be solely liable for that debt.
It is the Respondent’s evidence that he was advised by (business omitted) accountant in April 2011 that a mandatory payment was due on the loan accounts and that as neither party had the funds to make that payment, a dividend would have to be declared to the Applicant, that being the most tax-effective way to avoid the mandatory payment.
His evidence is that the Applicant was advised to seek independent advice about the matter and that she “accepted the dividend and the terms with full knowledge and understanding of the consequences for her personal income taxes”[10]
[10] Affidavit of the Respondent sworn 22 June 2012 paragraph 84
In relation to the ensuing tax debt, the Respondent’s evidence is that he did agree to pay the debt from the (business omitted) accounts, and that he made payments pursuant to an agreement made with ATO until December 2011 “when the company income was required to meet the liabilities encumbering our personal assets”[11] He has apparently made no further payments since that date.
[11] Ibid paragraph 85.
Given the Respondent’s concession that he had agreed to pay the Applicant’s tax debt, and the circumstances under which it was incurred, I will make an order that he now pay the balance of that debt, including any interest or penalties arising from its non-payment.
In relation to the loan accounts, it is the Respondent’s evidence that he did not direct the (business omitted) accountant to transfer them from his sole name to joint names and that the accountant had done so without consultation with him. He believes that the amendments to the loan accounts were made because the accountant believed that the Applicant was also a recipient of the monies, which had been withdrawn from the (business omitted) account for personal expenses.
It is therefore the Respondent’s position that the Applicant should be responsible for her share of the loan accounts as they stand.
The allocation of monies from a private company or partnership to those involved in the enterprise of the company or partnership is not uncommonly effected by way of sums designated as shareholder or partner loans. Those sums are separate to wages paid and are used by the parties for their own purposes.
It is the Applicant’s evidence that the average wage paid by (business omitted) to the Respondent during the relationship and for a short time thereafter was $52,000 per annum and to the Applicant $33,000. The Applicant was never actually employed by (business omitted) and this was an income-splitting arrangement for tax purposes. It is the Applicant’s evidence that she used that income to pay for family expenses and X’s school fees.
The Applicant says that she received no other monies from (business omitted) throughout the relationship and that while the Respondent contributed to the household accounts and to family holidays from his income, he largely kept his expenditure private, engaging in pastimes like (hobby omitted) and (hobby omitted) and travelling overseas to pursue his personal interests. There is no evidence before me to contradict that. Indeed the Respondent’s own evidence supports his interests in the abovementioned pastimes, he having given evidence at trial that he had visited (country omitted) every year for almost the past 20 years to engage in (hobby omitted) activities.
As the Applicant was working and/or caring for X throughout the relationship, as well as applying the monies she “earned” from (business omitted) to household expenses, and on his own evidence the Respondent was applying his wages from (business omitted) to joint expenses and obligations, I find that the vast majority of the monies received by way of the (business omitted) shareholder loan accounts was applied by the Respondent for his own purposes and that he therefore is solely responsible for the repayment of those loans.

The assets and liabilities of (business omitted)

The Respondent’s evidence is that the global financial crisis had a major effect on the business and prospects of the company and that he was forced to cease trading on 31 March 2012 as (business omitted) was unable to service its debts.
It is the evidence of both parties that much of the plant and equipment owned by (business omitted) has been sold by the Respondent. However, they have different views as to how much money was obtained from those sales and how it was distributed.
The Applicant says that she simply does not believe the Respondent when he says that there has been a major downturn in his business, and further that he has intentionally sought to create that impression for the purposes of these proceedings.
The Applicant says that she believes that the Respondent and Ms H created a series of false invoices in order to account for considerable amounts of money leaving the (business omitted) bank account.
In her Affidavit sworn on 8 June 2012 the Applicant sets out nine such transactions between 30 September 2009 and 18 May 2012 where sums totalling $299,749.21 were paid by (business omitted) to Ms H’s business (omitted business) as a result of invoices provided by Ms H. The Applicant’s evidence is that Ms H undertakes the same kind of work as the Respondent, and that it is “inconceivable” that he would pay someone else to undertake work that he himself is able to perform.

The Respondent’s evidence is that these were all legitimate business expenses of (business omitted) and that Ms H’s expertise is slightly different to his own.
At trial, the Respondent gave evidence that he and Ms H, through their respective companies, had conducted several business projects from 2009 to 2012, including work at (omitted) and (omitted), a (omitted) project for (employer omitted), and work at a property referred to as “Property W”.
His evidence at trial was that Ms H had performed project management tasks in relation to the Property W project while he had managed the actual work done on the site. He said that in addition to negotiating the contract, Ms H “would organise all of the sub-contractors that were doing the work” while “I run the gentlemen that do the work on site. I look after the men on site was the role that I was providing”.
Ms H swore an Affidavit on 22 June 2012 in support of the Respondent. It is her evidence that she had been working with the Respondent on projects for about four years, she as project manager and he as construction manager. In her Affidavit, Ms H sets out her responsibilities thus:
I manage the overall status of a project which encompasses initial proposals and submissions, dealing with clients and services consultants, architects, managing the program, finding and engaging the site foreman and labourer, dealing with OH&S and insurances, the budget, financial reporting and all matters relating to the approval and payment of progress claims.[12]
[12] The Affidavit of Ms H sworn 22 June 2012 para 4.
Ms H does not provide any information in relation to tasks undertaken by the Respondent, but the information as sworn above seems to be very similar to the totality of the evidence given by the Respondent about his responsibilities at (business omitted).
It is difficult to see the distinction between Ms H’s responsibilities and those of the Respondent, and, in my view, even more difficult to see how that distinction might account for almost $300,000 being transferred from the (business omitted) account to Ms H’s company over a less than three year period.
It is the Applicant’s further evidence that statements produced by the Respondent in relation to the Respondent’s sale of plant and equipment belonging to (business omitted) have been contrived to ensure that (business omitted) made a loss on the sale. She says that this was done to mislead the court and in an attempt to hide the Respondent’s true financial position from her and from the court.
Again, it is the Respondent’s evidence that it was legitimate to employ Ms H to “project manage” the preparation for the sale and that therefore the expenses are genuine business expenses of (business omitted). His evidence is that the invoice for that work is still outstanding and that neither he nor Ms H has been paid for the work done in preparation for the sale by auction of the (business omitted) assets.
As the Respondent declined to take any further part in these proceedings after his first two days of cross-examination, Ms H’s evidence in relation to these matters was never tested.
The Applicant denies that (business omitted) has debts of approximately $493,000 as set out on page 31 of the Respondent’s affidavit filed 22 June 2012.
It is her evidence that the business loan of $162,739 and the overdraft of $67,000 were both discharged from the sale proceeds from Property F, and that further payments were also made from those proceeds, those being three mortgage loans totalling $236,748. That is, a total of $466,487 was applied to (business omitted) debt from the Property F proceeds.
The Respondent conceded under cross-examination that the sum of $230,000 had been paid from the Property F proceeds towards (business omitted) debt.
Only $79,628 remains from the sale of Property F and its sale price was $610,000. The sums the Applicant claims were paid from those proceeds amount to $466,487. When one adds sale costs, Capital Gains Tax and the distribution of $20,000 to the Respondent from the sale proceeds, almost the whole sale price is accounted for. There is no other explanation in evidence as to how those sale proceeds might have been applied.
In those circumstances I find that the sum of $466,487 is not a liability of (business omitted) as claimed by the Respondent as that sum has been paid towards that debt from the Property F sale proceeds. I can make no findings as to the details of the remainder of the liabilities asserted by the Respondent but if I took him at his oath as to those matters, the liabilities amount to some $26,513. I will take that amount as the liability of (business omitted) not including the tax debt.
In relation to other debts claimed to be owed by (business omitted), the Applicant does not accept that the sum of $19,000 is owed to (omitted business), nor does she accept a company loan stated to have been provided by Mr P in the sum of $30,000.
Again, as the Respondent withdrew from the proceedings while he was under cross-examination, none of his proposed witnesses, including Ms H and Mr P, was available for cross-examination at trial, although both Ms H and Mr P swore Affidavits in support of the existence of those debts.
In those circumstances, where the evidence is untested, I cannot make any finding of fact in relation to those asserted debts.
Further, it is the Applicant’s evidence that she does not accept that the stated credit card debt of $46,500 is the liability of (business omitted), believing that it relates to post-separation personal credit card spending by the Respondent. The Respondent did not make himself available for cross-examination as to that particular matter and I can make no findings in relation to it.
Nor does the Applicant accept the claimed debt of $79,130 owed to creditors. Further, she says that she has no knowledge of a $32,000 debt owed to (omitted) Bank for a Mercedes-Benz Vito van, and that the Respondent has provided no proof of a $55,000 debt to the ATO.
As far as the creditors are concerned, I have seen no evidence of invoices raised in relation to the claimed debts and therefore make no finding in relation to them.
At trial, the Respondent tendered a document dated 24 June 2013 which had been printed from the ATO portal and which discloses that at 30 June 2011 (business omitted) owed the sum of $20,111.63 in income tax. At the date of trial that amount had risen to $24,276.36 and I therefore find that to be the tax debt owed by (business omitted).
There is no evidence before me in relation to the asserted debt for the Mercedes Vito van and I therefore can make no finding of fact in that regard.
I therefore find that (business omitted) has debts of $50,789.36, being the $26,513 asserted by the Respondent and accepted by the Court (see para 197 above) and the $24,276.36 ATO debt.
The Applicant’s evidence is that a company search conducted by her solicitors has revealed that on 21 December 2011 the Respondent incorporated a new corporate entity – (business omitted) and (omitted) Pty Ltd. It is her evidence that this company was incorporated at a time when the Respondent was telling her that he had no money and that he could not pay rent for Property F or the agreed amount of child support for X.
The Respondent’s Affidavit evidence was that (business omitted) and (omitted) Pty Ltd (“(omitted)”) was established to enable him to “facilitate the split of my jointly owned (omitted) Superannuation”[13] and that it is a trading name of (business omitted). In his Affidavit sworn 22 June 2012, the Respondent deposes:
Since in or about March 2011 (business omitted) has tendered for many refurbishment and fit out projects and provided a number proposals (sic) in anticipation of work with large concept development deals. Company proposals have been sent to potential clients and then followed up. I have personally contacted and met with architects, body corporate managers, large builders and old and new contacts and leads to try and find potential new work and/or secure new contracts. There is a lot of work involved in the tender and proposal process and I had genuinely worked hard knowing the dire financial circumstances of (business omitted). Many of my applications have been unsuccessful but there are still some undecided contracts and I am hopeful that I will succeed in securing one of these contracts.
[13] Ibid para 106
It was his evidence that (business omitted) has not traded or received any funds[14].
[14] Affidavit of the Respondent sworn 22 June 2012 paragraph 107 .
However, under cross-examination at trial, the Respondent conceded that (business omitted) had entered into a contract with a value of $146,000 in May 2012.

The sale of the BMW

It is the Applicant’s evidence that at separation the Respondent was leasing a BMW motor vehicle which, he told her, had been sold. The Applicant gave evidence that as a result of discovery provided by the Respondent she had discovered that the vehicle had been sold to a company – (business omitted) Pty Ltd. Company searches revealed that (business omitted) Pty Ltd was incorporated by Ms H on 6 September 2011.
The Applicant says that her employer had offered to purchase the vehicle for a similar price to that paid by (business omitted) Pty Ltd, but that that offer had been rejected by the Respondent. She cites this as further evidence of the Respondent’s having diverted monies to Ms H in order to mislead this court. She notes that the name “(business omitted)” is a combination of the names “Ms H” and “Eggers”.
The Respondent’s evidence is that the residual payment of $33,000 was payable on the BMW’s lease in July 2011 and that he was unable to refinance the vehicle on suitable terms. He therefore decided to sell it, and although he had had discussions with the Applicant’s employer about the vehicle, he decided to sell it in November 2011 to Ms H for the amount of $33,803, which was used to pay out the lease residual. The transfer of the registration of the BMW was not undertaken until February 2012.
It is the Applicant’s evidence that she issued a subpoena to Ms H to produce documents to the court, but that Ms H failed to do so saying the subpoena had not been served in sufficient time. A subpoena was then issued to Ms H to give evidence at trial. For reasons which are unclear, Ms H chose not to answer that subpoena. Had the trial proceeded, I would have sought an explanation from her as to those reasons.
In those circumstances, on balance, I find that the sale of the BMW to (business omitted) Pty Ltd did not remove the car from the possession and ownership of the Respondent and that therefore the sale proceeds are part of the assets to be distributed between the parties.

Property F

It is the Applicant’s evidence that in 1996 she purchased Property F for about $110,000 and the property was registered in her name. She says that she met the purchase price by way of her own savings of $30,000 with a bank loan making up the balance.
The Respondent’s evidence is that Property F was purchased by the parties together although registered in the name of the Applicant and that $30,000 of joint savings were applied to the deposit, with an $80,000 loan being obtained from (omitted) Bank.
During the relationship, extensive renovations were carried out at Property F, the Applicant’s evidence being that those renovations were carried out by paid tradesmen, the Respondent, his brothers and the Applicant.
The Respondent’s evidence is that the renovations cost approximately $124,000, and were paid for by (omitted business) save for $20,000 which he applied from the proceeds of sale of a property bought and sold by the parties in the 1990s.
In addition, the Respondent’s evidence at trial was that the parties had obtained an extension on the Property F mortgage in 2000 in the sum of $90,000 to buy fittings and fixtures for the Property W property.
It is the Applicant’s evidence that she was forced to sell Property F in 2012 because the Respondent had ceased to pay rental for it, despite a court order that he do so, and she could not afford to retain it. It is her evidence that she spent amounts totalling $11,064.90 to prepare the property for sale.
It is common ground between the parties that the remaining proceeds of sale from Property F amounted to $79,628 after Capital Gains Tax of $24,134.15 had been paid and that this sum forms part of the pool of assets to be divided between them.
I will make orders in relation to the Property F sale proceeds which give effect to the overall property settlement set out in paragraphs 296 to 300 of these reasons.

The Property W Property

It is common ground between the parties that the dwelling at Property W was primarily built by (omitted business) in 1999-2000.
The Applicant provided no evidence as to the cost of the construction, but her evidence is that the Respondent always controlled (business omitted) finances, which were used to complete Property W.
The Respondent’s evidence is that in addition to the $57,000 cost of the land, which was met from the sale proceeds of the Property O property, the building works at Property W cost $371,500. That sum was met by way of $27,000 from joint savings, the remaining proceeds of sale of the Property O property, and bank loans of $310,000 secured against Property F and the Property W property.
The property at Property W is now valued at $500,000 and the mortgage loan stood at $287,300 at the time of trial.
The Applicant and X continue to live at Property W and the Applicant seeks to retain the property in these proceedings. The Respondent does not oppose that.
On the evidence available to me I therefore find that the current property to be distributed between the Applicant and the Respondent under s.90SM of the Act is as follows:
Assets
Property W   $500,000
25% of the Property W2 property  $103,750
Balance of sale proceeds from the sale of Property F     $79,628
Respondent’s savings  $58,000
(business omitted) Pty Ltd assets  $25,000
Respondent's (omitted) Super shares  $2,282
Respondent’s share sales proceeds  $14,500
Household contents Property W  $40,000
Sale proceeds from plant and equipment sales                 $15,400
Funds paid to the Respondent from the sale of
Property F              $20,000
Mercedes Benz Vito van        $18,500
Proceeds of sale from BMW sale to (business omitted) Pty Ltd     $33,308
Applicant’s superannuation  $132,209
Respondent’s superannuation  $672,972
(business omitted) assets  $1,715,549
Liabilities
Mortgage over the Property W property   $287,300
(business omitted) loan accounts   $275,327
(business omitted) debts   $50,789.36
The Applicant’s tax debt  $4,300
(business omitted) liabilities  $617,716.36
Nett assets  $1,097,832.64

E. In light of these findings, what orders should be made under s.90SM(1) of the Act having regard to the matters set out in s.90SM(4)?

Section 90SM(1) gives the court the power to adjust the interest in property of parties to a de facto relationship.
The matters to be taken into account when deciding what orders ought to be made in under s.90SM(1) set out in s.90SM(4).
Section 90SM (4) states that the court must consider:
·the financial and non-financial contributions made by each party to the acquisition, conservation or improvement of any of the property of the parties, to the relationship itself, and to any child of the relationship;
·the effect of any proposed order on the earning capacity of either party to the de facto relationship; and
·the matters set out in sub-s.90SF(3) so far as they are relevant.

Contributions

The Applicant’s evidence is that at the commencement of cohabitation she owned a motor vehicle worth about $15,000, some personal effects and furniture and some nominal savings. The Respondent owned the Property O property which he sold some three years later, netting about $100,000 from the sale. He also had a one third interest in his family’s building firm known as (omitted business).
The Respondent’s evidence is that his interest in (omitted business) was worth $92,000 when the parties began living together, while his equity in the Property O property was worth $168,000. He deposes that he also had household contents worth $50,000, a Honda (omitted) worth about $30,000, a Mazda van whose worth is not stated and bicycles worth $20,000.
The Applicant worked as a (omitted) throughout the period of cohabitation apart from when she took long service leave at the time of X’s birth. She also received a wage from (business omitted) for some of the relationship. She says that she always applied her earnings to joint finances and that she made vastly greater contributions to the welfare of the family as homemaker and parent.
The Respondent has been in the building trade for over 30 years and it is the Applicant’s evidence that his business has always been successful, and allowed him to provide funds for regular overseas trips and family holidays. She believes that he retains an ability to earn a substantial income.
The Applicant says that she used her earnings to pay household expenses, to maintain X and to pay accounts. The Respondent contributed significantly to household expenses, to family holidays and to the construction of their home and the First Intervener’s unit. He otherwise used his money for his own purposes.
The Respondent’s evidence is that the parties kept separate finances and lived quite separate lives by agreement from the commencement of the relationship.
He denies that the Applicant contributed financially to the family expenses, deposing that those expenses were met by way of the (business omitted) credit card or wages paid to the Applicant.
The Respondent deposes that the Applicant applied her wages from her (omitted) business for her own benefit.
In long relationships such as this, the initial contributions of the parties are almost always balanced by the contributions made by them during the relationship and it is not often that the parties’ contributions overall would be considered other than equal.
However, in this case, the initial contributions of the Respondent were substantial, as were his contributions through his professional expertise as a builder to the construction of the dwellings at the Property W property. It is therefore appropriate that he be given credit for those contributions. Apart from those particular contributions, I find that the contributions of the parties to the acquisition, maintenance and improvement to the property of the relationship were equal.
Overall I find that the Applicant made 45% of the contributions to the parties’ property, through her wages and her homemaker and parent role, and that the Respondent made 55% of the contributions through his initial asset holdings and his business enterprise and expertise.

F. Should there be any adjustment made to the value of those contributions based on the factors set out in s.90SF(3) of the Family Law Act 1975 (“the Act”)?

Section 90SF(3) states as follows, and I will address each matter in turn:
Section 90SF(3) The matters to be so taken into account are:
(a) the age andstateof health of each of the parties to the de facto relationship;
The Applicant is 45 years old. She reports being in good health.
The Respondent is 54 years old. His evidence is that his health is poor and that he is still recovering from hip replacement surgery in November 2012.
The Applicant, while acknowledging the Respondent’s need for a hip replacement in late 2012, says that he has overstated his health problems in order to advantage himself in these proceedings. She believes that once the proceedings are concluded he will return to his active life which includes (hobby omitted) and (hobby omitted).
Section 90SF(3)(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The Applicant earns $58,000 per year from her work as a (omitted) and $2,444 in Centrelink benefits.

She owns the Property W property subject to its mortgage, although I have found that she holds 75% of what I have called the Property W2 property on trust for her mother.
The Applicant has superannuation entitlements of $132,209.
The evidence shows no physical or mental impairment in the Applicant’s capacity for employment, although she is now caring for her mother in the evenings.
It was the Respondent’s evidence at trial that he receives $220 per week in Centrelink benefits, that he pays $490 per week in rent, that he has the use of a motor vehicle, that he operates a shared office at (omitted) at a cost of $500 per month, that he has eaten reasonably regularly at various somewhat expensive restaurants and that he is assisted in the payment of all his expenses by Ms H. At first he said that Ms H paid for his apartment rental but when questioned later, it was his evidence that (business omitted) paid his rent through his company loan account while Ms H pays for the (omitted) office facility and assists him with other expenses.
He owns (business omitted), which currently has no value, (business omitted), whose worth is unknown, and he has superannuation entitlements of $672,972.
The Applicant’s evidence is that the Respondent has the capacity to generate a substantial income and that once these proceedings are concluded she believes that his income will revert to its previous level.
In relation to his health and working capacity, it is the Respondent’s evidence that he underwent hip replacement surgery in November 2012 after suffering from arthritis. He deposes that his arthritis did not restrict his work as a project manager but that he had not had not been able to perform any heavy manual labour for eight hours per day since having an arthroscopy procedure in 2009.
However, when under cross-examination at trial, the Respondent conceded that he had been able to ride his (hobby omitted) while in that condition in early 2011. At that time, it was his evidence that he had travelled to (country omitted) with his friend Mr P for five-and-a-half weeks to go (hobby omitted).
When it was put to him that it was at that time that he had given evidence in Affidavits that (business omitted) was struggling, and that he had not been able to obtain contract work since 2010, the Respondent conceded that there were a couple of projects still earning income for him at that time.
His further evidence was that Mr P had paid for his airfares to (country omitted) by using his frequent flyer points and that Mr P had also paid for his accommodation. Mr P had also given him $2,000 for spending money during that trip. Mr P is a generous friend indeed. I note that he was not made available for cross-examination at trial.
The Respondent’s further evidence is that after he underwent a full hip replacement in November 2012 he suffered a deep vein thrombosis. It was his evidence at trial in June 2013 that he had not been able to work at all since October 2012.
This is despite his evidence given at trial that because of various structural problems with the building that was to be refurbished, the contract (business omitted) entered into in May 2012 was discharged and a new contract signed at the end of 2012.
It is the Applicant’s case that the Respondent has been deceptive and has failed to disclose his true financial position during these proceedings.
Her evidence is that a result of a subpoena issued to (omitted) Bank she discovered five accounts in the Respondent’s name which had various times between 15 April 2012 and 31 October 2012 held amounts of between $-15.24 and $40,984.58. The Respondent has never disclosed the (omitted) Bank accounts in these proceedings and the Applicant believes he may have other hidden accounts.
The Respondent gave evidence that some of those accounts are held in the (omitted) Bank, which is owned by (omitted) Bank, and are for (business omitted), having been opened initially and then closed before others were opened.
When asked why he had not disclosed them or the contract entered into in May 2012 the Respondent replied “we were not asked by the other party in discovery for anything I have done post (separation)”.
This statement is at very least disingenuous, especially when his earning capacity (or lack thereof) was a major feature of his case. At worst it could be seen as an attempt to conceal earnings from the court.
I accept that the Respondent underwent hip replacement surgery in November 2012, and that he has suffered further complications as a result of that surgery which may have temporarily affected his ability to actually earn the significant income he was earning during the relationship.
However the totality of the evidence before me indicates that he retains an earning capacity as a building construction manager and consultant.
On his own evidence that role does not appear to involve large amounts of physical labour and there is evidence before me that the respondent has been able to secure income generating work in the twelve months prior to trial. It is not possible to quantify that earning capacity, although from the evidence before me it appears to be significant, and certainly greater than that of the Applicant.
Section 90SF(3)(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years;
X is 9½ years old and lives with her mother. She sees her father by agreement between her parents but it is clear that the vast majority of the responsibility for X’s care rests with the Applicant.
Section 90SF(3) (d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
Both parties must support themselves. The mother must also provide most of the material support to X.
Section 90SF(3)(e) the responsibilities of either party to support any other person;
The Applicant now assists in the care of her mother who has become incapacitated as a result of several strokes. It is likely that she will need to assist in her mother’s care when she is not working for the foreseeable future.
I am not aware of any responsibilities the Respondent has to support any other person.
Section 90SF(3)(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party.
As already stated, the Respondent receives benefits of $220 per week from Centrelink.
There is no evidence that the Applicant receives or is eligible for any Centrelink benefits save for Family Tax Benefits.
Section 90SF(3)(g) a standard of living that in all the circumstances is reasonable.
The Applicant lives with X in the former family home, which is less than 15 years old and, apart from some minor maintenance problems, is perfectly suitable accommodation. She supports herself and X by working part-time.
Her standard of living can be said to be materially similar to the one she enjoyed during the relationship, although it is clear that she can no longer participate in the travel she enjoyed during the relationship.
The orders I propose to make will preserve her standard of living as much as possible.
The Respondent lives in a rented (omitted) apartment which is paid for by (business omitted). He eats in restaurants relatively regularly. That indicates a standard of living at least as high as that of the Applicant.
Section 90SF(3)(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income.
Not relevant.
Section 90SF(3)(i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant.
Not relevant.
Section 90SF(3)(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
Both parties have contributed over the years to the other’s income, earning capacity, property and financial resources as set out elsewhere in these reasons.
Section 90SF(3)(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The relationship lasted about 19 years with a separation of six months in the middle. There is no evidence before me that the length of the relationship has in any way affected either party’s earning capacity.
Section 90SF(3)(l) the need to protect a party who wishes to continue that party's role as a parent;
X’s young age means that she will need substantial care for many years to come. The orders I propose to make will provide her mother with some security of accommodation which will allow her to continue to be X’s primary carer.
Section 90SF(3)(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation.
There is no evidence before me that the Applicant is cohabiting with another person.
There is a clear inference to be taken from the evidence that Mr Eggers may be cohabiting with Ms H, but he denies that, and I can make no finding about it. Even if I were satisfied that he and Ms H are living together, there is no evidence before the court about Ms H’s financial position, other than that she has assisted the respondent several times over the years and that his company has paid her company significant amounts of money.
Section 90SF(3)(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party.
I propose to make an order that the Applicant retain the family home subject to its mortgage, her superannuation and some of the monies held in trust, and that the Respondent retain his companies, and most of his superannuation.
Section 90SF(3)(o)
Not relevant.
Section 90SF(3) (p)
Not relevant.
Section 90SF(3)(q) any child support under the Child Support (Assessment) Act 1989that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship;
The Applicant’s evidence is that there is a Child Support Assessment in the sum of $220 per week. She says that the Respondent has paid the assessed amount for some periods but not others. Her Financial Statement sworn on 6 December 2013 states that she currently receives no child support from the Respondent.
However there is evidence that the Respondent has contributed to X’s school fees from time to time. He conceded in oral evidence that he had ceased paying regular child support in February 2012, although the Applicant’s evidence was that at the time of trial in June 2013, she was receiving $1,000 per month for X’s support.
It would seem that Mr Eggers sometimes pays what he is assessed to pay and sometimes does not.
That means that Ms Toffler receives some support for X, albeit irregular. If she is correct in her assertion that Mr Eggers’ income will revert to its usual level once these proceedings are over, she can expect to receive more regular payments.
Section 90SF(3)(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Overall, I found the Respondent to be an unconvincing witness. His answers were often evasive or obfuscating and he failed to attend the court for the continuation of his cross-examination by the Applicant’s counsel at the adjourned hearing on 11 December 2013.
He also failed to make his own witnesses available for cross-examination when he knew they were required and his partner, Ms H, failed to answer a subpoena.
I can only draw an adverse inference from those facts.
In contrast, the Applicant impressed as an honest, open and truthful witness, and while she became confused occasionally about the content of questions being asked, she did not appear to be deliberately evasive or misleading in her responses.

The Settlement

On the whole of the evidence before me, I consider that there should be an adjustment to the percentage of the property awarded on the basis of contributions such that the Applicant’s share is adjusted by ten per cent. She has the primary care of X, albeit with some assistance from the Respondent, and her earning capacity is less than his. She will also need to care for her mother for some time when she is not at work.
That means that overall, it is appropriate that there be a distribution of the property of the relationship such that the Applicant receives 55 per cent of the net property pool of $1,097,832.64 (or $603,807.95) and the Respondent 45 per cent (or $494,024.69).
In order to effect that distribution, the Applicant will retain the following assets and liabilities:
Assets
Property W  $500,000
25% of the Property W2 property  $103,750
Balance of sale proceeds from the sale of Property F
Less $27,365 to the Respondent  $52,263
Household contents Property W  $40,000
Applicant’s superannuation  $132,209
Superannuation split from Respondent’s
superannuation  $62,885.95
Liabilities
Mortgage over the Property W property  $287,300
Nett worth of property to be retained by the Applicant
$603,807.95
The Respondent’s share of the property is to be constituted as follows:
Assets
Balance of sale proceeds from the sale of Property F
Less $52,128 to the Applicant  $27,365
Respondent’s savings  $58,000
(business omitted) Pty Ltd assets  $25,000
Respondent's (omitted) Super shares  $2,282
Respondent’s share sales proceeds  $14,500
Sale proceeds from plant and equipment sales  $15,400
Funds paid to Respondent from sale of Property F              $20,000
Mercedes Benz Vito van  $18,500
Proceeds of sale from BMW sale to (business omitted) Pty Ltd     $33,308
Respondent’s superannuation after super split to Applicant of $67,885.95       $610,086.05
Liabilities
(business omitted) loan accounts  $275,327
(business omitted) debts  $50,789.36
Applicant’s tax debt  $4,300
Nett worth of property to be retained by the Respondent
$494,024.69
To clarify the issue of the Property F sale proceeds, I will make an order that any monies standing in the joint interest bearing account from the sale of Property F that exceed $79,628 will be divided 55 per cent to the Applicant and 45 per cent to the Respondent.
I note that in oral evidence provided to the Court on 28 March 2014, the Respondent stated that his brothers Mr R and Mr P, who are the other Directors of the Eggers Superannuation Fund, have notice of an order being made for a superannuation split in these proceedings and that they and he, as the trustees of the Fund, have no objection to that order being made.

G. Should an order be made that the Respondent pay the costs owed to his former lawyers from any monies he receives from the settlement of property interests between him and the Applicant, or should those monies be paid directly to the Second Intervener before they reach the hands of the Respondent?

The result of the above settlement is that the Respondent would receive a cash payment of $27,365 with a liability to pay the Applicant’s tax debt of $4,300. He is therefore left with the amount of $23,065, plus any remaining savings he might have.
Counsel for the Second Intervener, referring to the Affidavit of his instructor sworn 3 December 2013, set the amount owed to the Second Intervener prior to the Second Intervener’s joinder to the proceedings at $22,425.04 plus interest of $1452.19, a total of $23,877.23.
I accept the evidence before me that that is the amount owed to the Second Intervener by the Respondent for professional services rendered to the Respondent in these proceedings.
I find that it is just and equitable in all the circumstances for the Respondent to pay that debt.
Given the Respondent’s presentation during his oral evidence, and his decision to withdraw from these proceedings while under cross-examination, I have little confidence that he will honour that debt if the moneys to be paid to him from the Property F sale are released directly to him.
I will therefore make an order that the sum of $23,877.23 be released to the Second Intervener from the sale proceeds of Property F of $27,365 that would otherwise have been released to the Respondent. That is, the Second Intervener will receive from those proceeds $23,877.23 and the Respondent $3,487.77.
The Second Intervener further seeks a costs order in relation to its intervention in these proceedings, and Counsel set that sum at $5,171.
The law in relation to costs applications is found in s.117 of the Family Law Act 1975 which says that in general, each party to proceedings under the Act should bear their own costs.
However, there is provision for one party to pay the costs of another in certain circumstances. That power is set out in s.117(2), and the matters the court must take into account when considering whether to make a costs order are set out in s.117(2A) which states:
Section 117(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings:
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grand assistance to party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of fact, production of documents and similar matters;
(d) whether the proceedings were necessitated by a party to proceedings to comply with previous orders of the court;
(e) whether any party to proceedings he spends all the unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settlement proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
When I consider all the matters set out under s.117(2A) I can see no reason why I should disturb the provisions of s.117(1). In particular, the Respondent’s conduct in the substantive case was not the cause of the debt owed to the Second Intervener and will therefore make no order as to the Second Intervener’s costs of their intervention.

I certify that the preceding three hundred and eleven (311) paragraphs are a true copy of the reasons for judgment of Judge Small

Date: 17 April 2014

[2014] FCCA 764

11 April 2014

Key Legal Topics

Areas of Law

Family Law

Property Law

Tax Law

Legal Concepts

Remedies

Procedural Fairness

Statutory Construction

Costs

Injunction

Res Judicata