TRITTON & DUCATTI
[2019] FamCA 663
•20 September 2019
FAMILY COURT OF AUSTRALIA
| TRITTON & DUCATTI | [2019] FamCA 663 |
| FAMILY LAW – PROPERTY – third party interests – where the wife holds two items of real estate on trust for her husband and his father’s in their capacity as partners and as directors and shareholders of a building company – where the husband and wife have a 50% interest in the net value of the two items of real estate the subject of the dispute. FAMILY LAW – PARENTING – significant and substantial time with the father. |
| Conveyancing Act 1919 (NSW) s 23C(1) Family Law Act 1975 (Cth) s 75(2), 79 |
| Allan v Snyder (1977) 2 NSWLR 685 Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62 |
| APPLICANT: | Mr Tritton |
| RESPONDENT: | Ms Ducatti |
| INTERVENOR: | Mr E Tritton |
| FILE NUMBER: | SYC | 6271 | of | 2016 |
| DATE DELIVERED: | 20 September 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Henderson J |
| HEARING DATE: | 3, 4, 5, 6, 7 June 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Harper |
| SOLICITOR FOR THE APPLICANT: | Douros Jackson |
| COUNSEL FOR THE FIRST RESPONDENT: | In person |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Weinberger |
| SOLICITOR FOR THE SECOND RESPONDENT: | York Law Family Law Specialists |
Orders
All previous parenting orders are discharged.
The parties have equal shared parental responsibility for the children Y born …2014 and X born … 2013.
The children live with the mother.
The children spend time with the father as follows:
(a) Until Y commences formal school:
(i)In week one, from after preschool/school Friday until 7:30pm on Monday, and each alternate week thereafter; and
(ii)In week two, from after preschool/school Thursday to the commencement of preschool/school on Friday, and each alternate week thereafter.
(b) Commencing when Y begins formal school:
(i)In week one, from after school on Friday until the commencement of school on Monday, and each alternate week thereafter; and
(ii)In week two, from after school on Thursday to the commencement of school on Friday, and each alternate week thereafter.
(c) Commencing when Y begins second term in 2020:
(i)In week one, from after school Thursday until the commencement of school on Monday, and each alternate week thereafter; and
(ii)In week two, from after school Thursday until the commencement of school on Friday, and each alternate week thereafter.
(d) Commencing from the second term in 2021:
(i)In week one, from after school Thursday until the commencement of school on Tuesday, and each alternate week thereafter; and
(ii)In week two, from after school Thursday until the commencement of school Friday, and each alternate week thereafter.
For the remainder of 2019, the children are to spend time with their father in the term school holidays for a continuous period of seven days commencing from Friday after school to the following Friday morning, otherwise they spend the holidays with their mother.
For Christmas 2019-2020, the children spend seven days, in each parent’s care, with the mother to have the first period of time and the father the second week of the holidays and to alternate each week thereafter.
The father to spend time with the children at Christmas 2019 from 5pm Christmas Eve to 5pm Christmas Day and, the children to spend from 5pm Christmas Day to 5pm Boxing Day with their mother, otherwise the week-about arrangement is to continue. The parties may vary these times to allow the mother, for example, to take the children to Melbourne to visit their family and provided the father’s time with the children is not diminished, the parties may vary these orders by consent.
Thereafter, for all mid-term school holidays, the children spend one half of each school holiday period with their parents, being with the father for the second half in 2020 and the first half in 2021, and alternating thereafter and the mother at the other times.
For Christmas holidays 2020-2021, the children to spend time with their parents on a two-week arrangement, being with the father for the first period for two weeks, for the mother for the following two weeks, and the remainder of the school holidays to be equally shared between their parents, with the father to have the first portion and the mother the second portion.
For Christmas 2020-2021, the mother to have time with the children from 5pm Christmas Eve to 5pm Christmas Day, and the father to have time with the children from 5pm Christmas Day to 5pm Boxing Day.
For Christmas school holidays and the Christmas day period commencing 2021- 2022, the children to spend one half of the holidays with each parent, being with the father in the first half commencing 2021 and each odd year thereafter, and the mother the first half in 2022, and each even year thereafter.
The children to spend the day of Father’s Day with the father, unless they are otherwise living with him; and the children to spend the day of Mother’s Day with their mother, unless otherwise living with her from 9am until 6pm.
In the event of the children’s birthday the father to spend time with the children for three hours on each of their birthdays in the event they are not living with him and similarly for the mother.
The parties may take the children outside the Commonwealth of Australia for an overseas holiday, on the condition that they provide to the other, 28 days’ notice in writing of their intention to travel, a copy of the itinerary, return travel air flight and contact details whilst they are overseas.
The parties may vary any of the parenting orders by agreement.
The Court declares the respondent wife holds the following properties on trust for the applicant husband and second respondent:
(a)The property situated at and known as F Street, Suburb G in the State of New South Wales and being the whole of the land in Folio Identifier … (“the Suburb G property”); and
(b)The property situated at and known as H Street, Suburb D in the State of New South Wales and being the whole of the land in Folio Identifier … (“the Suburb D property”).
The respondent wife do all things necessary to transfer to the applicant husband and second respondent as tenants-in-common all of her right, title and interest in the Suburb G property and the Suburb D property forthwith.
Within four calendar months of the date of the respondent wife complying with Order 17, the applicant husband and second respondent do all things necessary to either discharge the mortgage secured over the Suburb D property or have the wife’s’ liability in respect of that mortgage extinguished.
In default of the parties or any of them doing all acts and things and executing all such documents as necessary to give effect to these Orders, a Registrar of the Family Court of Australia at Sydney be appointed pursuant to section 106A to execute all documents in the name of the party in default and to do all such acts and things necessary to give validity and operation of the said Orders. In giving effect to this Order it is sufficient for the Registrar to proceed with and make Orders on the basis of the sworn affidavit evidence of the party seeking to invoke this Order, and that the party in default will pay the costs of the other party on an indemnity basis.
Pursuant to Section 79 of the Family Law Act 1975 (Cth) (“the Act”) by way of final property alteration:
(a) Within 28 days the applicant husband shall pay to the respondent wife the sum of $50,000 and the wife is to immediately vacate the property at Suburb G upon payment of that money to her.
(b) Immediately upon the husband and second respondent’s compliance with order 18 the respondent husband shall pay to the wife the balance of monies owing to her being a sum of her $513,800.
(c) Pending the respondent wife vacating the Suburb G property:
(i)The respondent wife will pay as and when they fall due all statutory and consumable utilities in relation to the Suburb G property; and
(ii)The respondent wife will keep the Suburb G property in good order and repair, fair wear and tear accepted, and will permit the applicant husband access to the property seven days prior to her vacation of the Suburb G property.
(d) The applicant husband, L Pty Limited, and the partnership ‘Tritton Pty Ltd’ are hereby restrained from filing any amendment to the Income Tax Return for those entities for the period 2004 to 2017.
(e) When the respondent wife vacates the Suburb G property and removes all her possessions she is to the following items which are the husband’s:
(i)The pot in the driveway;
(ii)All fixtures and fittings;
(iii)Glass dining room table and four white leather chairs; and
(iv)All fittings and fixtures including but not limited to the ASKO Dishwasher and the SMEG freestanding oven.
(f) As between the applicant husband and the respondent wife, the applicant husband is solely entitled to the engagement ring, the wedding band and the RR ring.
(g) Other than provided for above:
(i)The applicant husband hereby indemnifies the respondent wife from and in respect of all actions, claims, suits and demands as may be made against the respondent wife in relation to all liabilities in the name of the applicant husband;
(ii)The respondent wife hereby indemnifies the applicant husband from and in respect of all actions, claims, suits and demands as may be made against the applicant husband in relation to all liabilities in the name of the respondent wife; and
(iii)The applicant husband and respondent wife shall be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession, ownership or control of each party as at the date of this Order including but not limited to superannuation entitlements.
(h) Subject to these Orders, the applicant husband shall retain to the exclusion of the respondent wife, all items of personalty in his possession, including but not limited to, motor vehicles, cash in bank accounts, superannuation, furniture and personal belongings.
(i) Subject to these Orders, the respondent wife shall retain to the exclusion of the applicant husband, all items of personalty in her possession, including but not limited to, motor vehicles, cash in bank accounts, superannuation, furniture and personal belongings.
(j) All previous financial orders be discharged to the date they stand paid.
These orders have been amended pursuant to paragraph 17.02(1)(e) of the Family Law Rules 2004.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Tritton & Ducatti has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 6271 of 2016
| Mr Tritton |
Applicant
And
| Ms Ducatti |
First Respondent
And
| Mr E Tritton |
Second Respondent
REASONS FOR JUDGMENT
The matter of Tritton & Ducatti was an application concerning both parenting and property matters. The property matter also involved the paternal grandfather, the husband’s father, as he and the husband had worked in a building partnership prior to and during the marriage.
Mr Harper of Counsel acted for the father. The wife was self-represented, and Mr Weinberger of Counsel acted for the second respondent.
The evidence I read was voluminous. For the applicant husband:
a)Case outline;
b)Affidavits of 16 April 2019 and 1 March 2019;
c)Affidavits of his partner, Ms P, of 16 April 2019 and 1 March 2019;
d)Affidavit of Mr JJ, the partnership accountant, dated 19 October 2018; and
e)Ms TT, the partnership bookkeeper, filed an Affidavit. Her evidence was uncontroversial and she was not cross-examined.
At the commencement of the proceedings the husband tendered an updated Financial Statement marked Husband’s Exhibit 2.
His exhibits are as follows:
a)Exhibit 1, the costs he has expended to date;
b)Exhibit 3, case outline document;
c)Exhibit 4, a joint balance sheet which was amended throughout the trial. Ultimately, on the fifth day of the trial a revamped agreed balance sheet was tendered to which both the husband and wife spoke;
d)Exhibit 5, a series of correspondence between Mr JJ and the various companies and entities the partnership and the husband and his father run;
e)Exhibit 6, graph of school holidays; and
f)Exhibit 6, the husband’s proposal for an initial five night and then six night a fortnight time arrangement. Ultimately proposal was for an equal time parenting arrangement of the children.
For the wife:
a)Affidavit of 21 March 2019; and
b)Financial Statement signed 3 June 2019 marked Mother’s Exhibit 2.
The mother’s exhibits were as follows:
a)Exhibit 1, a document giving approval for the wife to purchase the property at Suburb D;
b)Exhibit 3, a letter from the Child Support Agency dated 17 November 2018;
c)Exhibit 4, only that part of the wife’s Affidavit filed 27 May 2019 in relation to what she asserts are costs to be reimbursed to her including outstanding spouse maintenance. I did not accept the entirety of this affidavit into evidence; it was filed well outside the timetable of filing material specified by the Court;
d)Exhibit 5, pre-school fees for both children, and in particular the youngest child, Y, and including times of collection and pickup of the child by the mother; and
e)Exhibit 6, a letter from the Commonwealth Bank in relation to a default in payment of the mortgage for the home at Suburb D.
The material for the second respondent was as follows:
a)Amended Response filed 9 June 2017;
b)Points of claim filed 9 June 2017, together with an Affidavit in support filed 14 March 2019; and
c)Final submissions after the conclusion of the trial.
All parties, together with Dr B, who provided a family report marked Court Exhibit 1, Ms P and Mr JJ were cross-examined.
A joint balance sheet was tendered as was amended during the trial and marked husband’s exhibit 4. It formed the basis of my determination of the matrimonial assets for distribution
The wife was at a serious disadvantage, being unrepresented. However, this matter had been listed for final hearing in November 2018, and on the mother’s application it was adjourned. A decision was given by the Deputy Chief Justice, Justice McClelland in relation to the adjournment application on 6 November 28, and I read relevantly from that decision.
The application was adjourned in circumstances where there had not been compliance with orders for valuations of properties at Suburb G, Suburb D and Melbourne. Dr B’s report had not been released to the parties, and thus the matter could not proceed.
His Honour was concerned that the wife had failed to nominate a single expert to prepare valuations of the properties and had failed to cooperate in the drafting of joint letters of instruction. His Honour found that although she was self-represented, there was no reasonable basis for her failure to engage in relation to instructing the experts. As his Honour pointed out in paragraph 7:
The issue of the wife’s financial circumstances is a matter that will be ultimately determined at the hearing.
I have determined that, and more so in relation to the wife’s financial circumstances, unfortunately, the submission by Mr Harper at the conclusion of the trial that the wife had been disingenuous at best and at worst had embarked on a course of conduct to hide her income from the Court and her husband at that time of the adjournment application and at this hearing has been made out on the facts.
The wife said at the adjournment application, and this is recorded by his Honour at paragraph 9 that she had issued a subpoena to the accountants who prepared the financial returns and running sheets, for L Pty Ltd, the building partnership her husband and father-in-law ran together. The wife asserted documents pursuant to that subpoena had not been produced and she was prejudiced in not having access to those documents. The fact is the documents had been produced by at least 19 October 2018.
This issue was again raised by the wife on the fourth day of the trial before me, namely that a subpoena issued to Mr MM had not produced any documents. This was the same as her argument on the adjournment application before DCJ McClelland. The wife had issued a further subpoenas to Mr MM for these proceedings filed 28 October 2018. Correspondence and communications had been entered into with Mr MM and the parties concerning Mr MM’s response to the subpoenas. The wife was most concerned that a document she described in her subpoena as:
…copy of Partnership Drawings, spreadsheet and email correspondence regarding drawings made by Mr Tritton, Mr E Tritton and Ms Tritton, including any debt owing of each party, be produced to the court, had not been produced to her
The wife did not tell me until the fourth day of the trial that this subpoena had not been answered as far as she was concerned. As it transpired there had been a response by Mr MM to the subpoena, namely a letter dated 12 February 2019, which is addressed to the wife specifically. Although the wife told me in Court on Thursday 6 June 2019 that Mr MM had not answered her subpoena, he had answered it by sending a letter to her on 12 February 2019, an answer I accept she did not agree with. The letter reads as follows:
I did not act for the company or individuals until 2013. I sold my practice in 2014. You should contact NN Group, with whom you had contact. The 2014 and 2016 accounts were draft tax returns only, as no source documents were supplied. I do not and never did have the documents you detail. There is no document entitled “Partnership Drawings”.
Not only had the wife not prosecuted this matter and taken up Mr MM’s advice to contact NN Group, she was not honest with me as to Mr MM’s answering the subpoena when he clearly had.
The wife’s position is that she and her husband are equitably and legally entitled to the entirety of the value of the Suburb G and Suburb D properties which are both registered in her name.
The husband and his father’s position is that they are each beneficially entitled to 50% of the value of the Suburb G and Suburb D properties as a consequence of their contribution to those properties in their building partnership known as L Pty Ltd.
The wife’s case is that although at one level she accepts her husband and his father have an equal interest in their partnership and therefore its profits, her father-in-law and mother-in-law skimmed money from the company/partnership accounts, took more drawings than her husband or engaged in such other unacceptable behaviours such as having the building company renovate her former in-laws matrimonial home at no cost to them and that these actions have resulted in she and her husband receiving far more from the partnership profits than the minimal drawing she and her husband took.
Thus, she says, there must be an accounting between the husband and his father and that she and her husband are entitled to more than 50% of the current value of the properties due to the inequality in drawings and benefits her father-in-law and mother-in-law received from the partnership. The wife asserts the document she sought to subpoena from Mr MM would have been evidence of this being the fact. Additionally, she asserted there was an oral agreement between her husband herself and her father-in-law to this effect. This oral agreement was denied by her husband and former father-in-law.
Both the husband and his father disagree with the wife’s proposition. The wife failed to produce any document other than a document she had created to support her assertion of an inequality in drawings. I did not accept that document into evidence. It was objected to, it was not a business record but a document created by the wife for these proceedings. The wife could produce no other documentary evidence from any accounting, financial or other adviser, bank, or other institution or entity which would have assisted me to accept or consider her position.
This was in circumstances where both the husband and his father said their interest in their partnership and profits from that partnership were equal, both as to liability and as to profit. Each agreed they took drawings to sustain themselves during their partnership, and neither made complaint of the other in relation to any inequality of drawings or the father and his wife obtaining benefit from the building company such as renovation to their property without cost to them.
The wife’s persistence with this attitude towards her former father-in-law has maintained this dispute for far longer than it need to have been. Had she properly examined the documents that have been provided by her former father-in-law and assessed them in a detached manner rather than through her unfiltered erroneous position the correctness of that which her husband and father-in-law were putting to the Court would have been apparent.
This is all the more concerning given that the wife has a Master’s Degree, is a trained finance professional and earns a significant income working only three and a half days a week of $160,000 per year. The wife is clearly skilled at her occupation in finance, thus, the position she has maintained is all the more concerning unless it was maintained for an ulterior purpose.
Her take on how the family business was run, how profits were shared and outgoings paid and most particularly how finance was obtained for the numerous ventures entered into between her husband and his father in the running of their building business is not accepted by me and she has done herself a disservice. For the wife to persist with her position and assert that she and husband would own property worth in excess of $4 million as set out in her case outline is fanciful when one has regard to the facts.
Her closing submissions where she attempted to recreate as she saw it the costs of projects, and the profits from those ventures failed to have regard to the totality of the business ventures the husband and former father-in-law engaged in. This is all the more concerning given her clear skill set and the clear and logical points of claim filed by Mr E Tritton supported by his Affidavit. Had the wife read this document using her skills she would have realised the errors she had made in her calculations. Her position was effectively that she and her husband were entitled to the entirety of the profits of the husband and his father’s building company over a period of eight years save for an amount of some $315,000. That could not possibly be a correct position to maintain on any reading of the evidence.
The wife knew in November 2019, because she put it to DCJ McClelland, that she needed to do further inquiry and issue subpoena on this issue and she has chosen to conduct the proceedings herself. The reality is the wife has been living in the mortgage free property at Suburb G without paying any cost towards its maintenance or towards the property at Suburb D in which she asserts a beneficial interest as well. This is clear from her Financial Statement, wife’s Exhibit 2.
The Suburb D property has a mortgage which the husband has been paying post separation and that consequence has resulted him in him now having a significant debt. He sought the wife’s agreement to rent the property out in early 2019 when he was struggling to pay the mortgage and she refused. This resulted in the husband borrowing further monies from his parents to forestall the foreclosure notice.
It was not until the wife filed her Financial Statement in Court as an exhibit that the Court or other parties had any idea what her current income was. The wife has set out on a course of conduct to conceal her income from her former husband and father-in-law and has been almost secretive about her income and income earning capacity. Even at the date of the hearing and despite numerous requests she had failed to disclose or provide a copy of her contract of employment. There is no excuse for this behaviour and conduct in a financial matter, particularly for a person of the wife’s skill set and capacity.
Going to the wife’s Financial Statement.
The wife earns an income of $3,421 a week and asserts she has expenditure of $4,190 per week, expenditure I do not accept. The wife pays a mortgage for a property at AA Street, Melbourne she owns with her brother and did so at the commencement of cohabitation. This mortgage payment is of $360 per week. The wife receives rent for that property as well which rent she failed to include in her Financial Statement; has a lease for $155 per week for a motor vehicle worth some $40,000, has credit card payments of Amex and Visa; pays no rates, taxes and/or levies for the property she and the children live as this is all paid for by the husband, or his company, or by borrowings.
The wife pays no outgoings in respect of the property at Suburb D or Suburb G despite having an income of $3,421 gross per week. The wife has had a free ride as far as her accommodation is concerned post separation, and that is a significant factor I will take into account in my deliberations.
In relation to the property dispute, the items in dispute are the properties at Suburb G and Suburb D. They are in the wife’s name. Mr E Tritton claims that the wife holds those properties on trust for himself and his son, and that I should order the wife transfer those properties to he and his son as tenants in common in equal shares. The husband agrees with his father’s position; the wife does not. She asserts that all she and her husband owe to Mr E Tritton and his wife is some $315,000.
The points of claim together with written submissions of the second respondent set out clearly the basis of the case of the second respondent and, effectively, the husband.
The relevant chronology
The husband was born in 1980 and the wife was born in 1980.
The husband commenced working in his father’s business in 1997 as an apprentice and in 2001 became a qualified tradesman.
In September 2004, the father and husband began a business in partnership trading under the name “Tritton Pty Ltd”.
In 2005, the father and husband purchased the N Street property in the names of the husband and his brother Mr M Tritton. Mr M Tritton held his interest in that property on trust for his father. The N Street property was purchased in Mr M Tritton name in order to secure finance.
In February 2009, the business was incorporated into a newly incorporated company named L Pty Ltd, of which the father and husband with the directors and shareholders.
At all material times the husband and father were in an equal partnership on a 50:50 basis. In other words the profits and losses would be shared equally between them.
In April 2006, the father and husband purchased a property at Suburb D in the name of the wife. This was prior to the parties commencing cohabitation. They were in a relationship, but were not living together.
The parties commenced cohabitation in March 2007 and were married in 2010.
In 2013, X was born.
In June 2014, the husband and father purchased the property at F Street, Suburb G in the wife’s name.
In 2014, Y was born.
In January 2016, the parties separated under the one roof.
In February 2016, the husband moved out of the former matrimonial home and lived for a time with his parents.
In April 2016, the husband commenced a relationship with Ms P. That relationship continues.
The matter came before the Federal Circuit Court in November 2017. Interim parenting orders are made and the proceedings are transferred to the Family Court.
The matter is expedited and listed for hearing in November 2018. The expedited hearing is vacated on the wife’s application, and the matter is listed for trial before me.
The current balance sheet before me consists of matters I regard as both matrimonial property for division and the parties property not available for division and that is explained as follows.
The property at F Street, Suburb G is valued at $3.3 million. The wife says she and her husband own the entirety of that property at law.
The husband’s case is it is owned 50% by himself and 50% by his father, and he and his wife have an entitlement to 50% of that property only.
A property at H Street, Suburb D, the wife says she and her husband own that property in its entirety. As with Suburb G the property is in her name.
Again, the husband asserts, as with Suburb G, he and his wife have an entitlement to 50% of the property and he and his father owned 50% of the property equally.
Whatever the parties’ entitlement this is what their assets and liabilities are which is different to the initial balance sheet tendered as it included properly their current financial position which included many post separation personal debts.
The balance sheet is as follows:
| Assets | Value |
| F Street Suburb G- wife | $3.3M |
| H Street, Suburb D- wife | $874,000 |
| 1 CC Street, Sydney- husband | $52,962 |
| 2 CC Street, Sydney-husband | $65,000 |
| R Street, Suburb S husband | $390,000 |
| AA Street, Melbourne-wife | $425,000 |
| L Pty Ltd | Nil |
| Tritton Unit Trust profits-husband | $712,324 |
| Home contents of Suburb G-wife | $10,000 |
| FF Bank Shares-husband | $3,857 |
| Engagement ring-husband | $9,000 |
| RR ring-husband | $3,000 |
| Loan owing to Husband L Pty Ltd | $88,497 |
| Loan owing to husband by Tritton Pty Ltd | $365,686 |
| Husbands share of profits Tritton Unit trust | $712,324 |
| Wife’s car | $40,000 |
| Total | $7,051,650 |
| Liabilities | |
| GG Bank loan account #...84-husband | $13,000 |
| GG Bank Loan Account #...92-husband | $30,750 |
| CBA Loan (Suburb D)-wife | $520,000 |
| CBA Line of Credit Melbourne-wife | $80,000 |
| NAB Loan (Melbourne)-wife | $90,000 |
| Suburb S Loan Account #...07-husband | $215,928.35 |
| Loan payable to Tritton Unit trust | $973,864 |
| Car Finance | $40,000 |
| Total | $1,963,542.35 |
| Superannuation | |
| Super Fund 1 | $94,000 |
| Super Fund 2 | $169,000 |
| Contingent Liabilities | |
| Possible tax debt if new assessments lodged | $321,674 |
| Capital Gains Tax payable on sale of the Suburb G property | $89,094 for the husband Total: $180,000 |
| Capital Gains Tax payable on sale of the Suburb D property | $34,736 for husband Total: $67,000 |
In relation to the tendered balance sheet, I have not included the following items in the matrimonial pool for division for the reasons below:
a)The parties’ bank accounts, I have not include those in the pool as these amounts were acquired well post separation.
b)The parties’ credit card debts are theirs, although I note they are extensive.
c)The wife has borrowed money from her parents amounting to $149,632 to fund this litigation. This is her debt
d)Similarly as for the wife the money borrowed by the husband from his parents totalling $259,000 is his debt.
As to addbacks:
a)The wife has a mortgage over her Melbourne property of $90,000 together with the line of credit of $80,000 a total of $170,000. The line of credit was a draw down by her during the marriage over a matrimonial asset and I will treat it as an addback.
b)The husband had a boat at marriage which he has sold to his mother for $60,000 to reduce his indebtedness to her. I will treat this as an addback.
c)The husband asserts the wife used $3,300 in one of their children’s bank accounts and retained rent of $11,000 from Suburb D and that $16,300 should also be added back to the pool.
As to Liabilities:
a)There is a mortgage on the Suburb D apartment of $520,000. The husband says the parties’ share of that debt is $260,000.
b)The husband has a mortgage over the Suburb S unit of $215,000, two GG Bank mortgages in relation to his CC Street properties which total, he says, $43,750. He also has another loan which is not a matrimonial debt with GG Bank of $130,000.
As to contingent debts:
a)If I make the orders the husband and father seek, there may well be a Capital Gains Tax debt on the sale of the Suburb D and Suburb G properties and as such these debts may form part of the matrimonial pool for division.
b)Mr JJ asserts in his report that there will be additional tax payable for the Tritton Unit Trust and L Pty Ltd in the tax years ended 2013 up to and including the tax year ended 2017 if new returns are lodged given the many errors he says are contained in the current accounts upon which the income tax returns and assessments have been based. If amended returns are lodged for these entities there will be a tax liability of the husband of some $321,000.
Neither seek a super splitting order. I will do a two-pool approach in this matter. These are young people. They cannot access their superannuation for many years, and it would be unfair to include that figure as if it is a liquid asset available to them.
The husband says the amount of the husband and wife’s entitlement to the assets in balance sheet above is $2,115,000, including superannuation.
The wife asserts there is some $4 million in assets.
How does this conundrum come about?
It comes about due to the wife’s perception or recreation in her mind and orally of how the real estate in her name was financed and the use of profits from her husband and his father’s various joint ventures.
Before I can determine the parties’ contribution based entitlement, I must determine whether the wife or husband’s position in relation to their beneficial interest in the Suburb D and Suburb G properties is correct.
It is clear from the Affidavits of both the father and the husband that the husband and the father carried out a building business which was incorporated in September 2004 before the parties met known as “Tritton Pty Ltd”.
The husband had worked with his father for about three years before they determined to commence a partnership. The husband and father agree that they determined they would commence a partnership called Tritton & Tritton trading as Tritton Pty Ltd on a 50:50 equal-term basis. It is clear, and I accept because it was not controverted, that at the time the partnership was created the father had work in progress from his sole trader business, tools of trade, funds standing to his credit, in his bank account and a group of clients. Mr E Tritton has been always a successful businessman.
In 2007 Tritton Pty Ltd was changed to L Pty Ltd.
The work of the company and partnership was to purchase properties that were in, a run-down or poor condition. Either renovate or demolish them, rebuild and on-sell for profit. It is clear from looking at the various projects that were entered into that these men purchased properties in good locations. Location was important to them.
The numerous projects these men undertook with their company and in partnership solely are set out at paragraph 285 of the father’s Affidavit. There were at least two joint ventures with other partners as well between 2004 and 2014. The sole partnership ventures were:
a)N Street, Suburb O;
b)H Street, Suburb D;
c)Q Street, Suburb O;
d)R Street, Suburb S; and
e)The Suburb G property.
The husband and his father agree that when they purchased Suburb G they were intending to renovate it, but that has not occurred due to the marriage breakdown.
It was uncontroverted the husband and his father operated Westpac accounts throughout the marriage for their partnership and building companies.
The partnership account was styled the Joint Venture Westpac account, the JV account. There were two accounts at Westpac, the JV Westpac account and an account in the husband’s sole name.
At the commencement of cohabitation in 2007, the husband and his father had already purchased N Street, Suburb O on 23 April 2005. It is uncontroverted that the property was purchased for $900,000 plus stamp duty and legal fees of about $36,000.
The initial deposit of $90,000 was funded by a loan taken out by Mr Tritton over his and his wife’s property at Suburb O, a loan from the Commonwealth Bank of Australia of $720,000 and the balance of $128,876 for stamp duty and other incidentals was a drawdown over Mr E Tritton’s home with his wife at Suburb O. N Street was purchased in the name of Mr Tritton’s sons Mr Tritton and Mr M Tritton. Mr Tritton says he did not have sufficient income to fund the purchase whereas his brother Mr M Tritton did for the purposes of the bank, and Mr E Tritton was heavily geared at that time.
For a time, the husband and his brother lived at N Street. In August 2005, again, well before the wife arrives on the scene, a line of credit was established with the Commonwealth Bank in the names of the Tritton parents, Mr Tritton and Mr M Tritton. It had a limit of $700,000, and it was used to discharge the then moneys owing on N Street and pay various debts and thereafter, the N Street property was developed.
The father and son developed the property by drawing down the CBA loan of about $276,000, again, secured against Mr and Mrs Tritton’s property at Suburb O. There was cash injections being $100,000 from the husband, and $60,000 from Ms Tritton. The remainder of monies necessary to complete the project came from the business, Tritton Pty Ltd.
It is clear from the husband’s Affidavit, paragraph 92, that he and his father did all the work not only to have the plans developed, meeting with architects and the like, but organising and doing the building and attending to financing the project.
On 19 October 2007, some few months after the parties commenced cohabitation, this property was sold. The net balance of proceeds of sale was $1,051,622.07 after paying all debts including the repayment of money to Ms Tritton, the advance form the husband which with interest and risen to $110,000, Tritton Pty Ltd for monies they had advanced and moneys paid to Mr M Tritton for unpaid work he had undertaken.
It is clear that the husband was entitled to 50% of the balance of the proceeds of sale as an equal partner with his father once his specific advancements such as the $100,000 plus interest was paid to him. It did the wife little credit that, firstly, she objected to that proposition and objected to the husband’s evidence that at the time of commencement of cohabitation he had a valuable asset being his interest in the Suburb O property of no less than, $525,000.
The wife argued this was not true and that his interest in the property was 50% of the purchase price of the property. I reject that argument.
The wife had no involvement whatsoever with the development of N Street property and it is clear the husband was entitled to $525,000 profit from the development two months after cohabitation. Secondly, the wife cannot argue her husband’s entitlement to equal sharing of profits during the relationship and post separation but minimise that same claim prior to cohabitation.
The wife objected to the evidence that at the time of cohabitation there was $170,000 cash in the Tritton’s Pty Ltd account to which her husband and his father were equally entitled.
The wife objected to the husband’s assertion of the value of his interest in the deposit for the Suburb D property which he valued at $13,000.
The wife objected to the value of 1 and 3 CC Street, Sydney.
The wife did not object to the value of 2 CC Street, although thought there was a problem with the value of the boat that the husband owned and which he has subsequently sold to his mother to reduce his debt to her by $60,000.
It was clear after cross-examination of all parties that the husband was seized of nearly $900,000 in assets and cash at the commencement of cohabitation and the wife a modest interest in her unit in Melbourne which has never been used by her to for example provide a platform to support borrowings. However, it is evident she has paid monies earned during the marriage towards the rent for living in the property as the wife has always earnt a significant income and continue so to do. The wife has kept her asset completely separate from the husband and their joint endeavours. That is not the case of the assets that were in the husband’s name at the commencement of cohabitation. The wife conceded the husband had, to use her words “a greater initial contribution to her” at the commencement of cohabitation and that is simply the fact.
It is an overwhelming initial contribution when one has regard to the assets that the parties have today be it $2 million or $4 million.
The next development is that in about February or March 2006. the parties are in a relationship but not yet living together as the wife is still in Melbourne with her family. The husband and his father determine to purchase a property at Suburb D with a mooring for their boat, an important matter to them.
The father and husband said they required the wife’s assistance to purchase the property at Suburb D. The father was heavily geared in other projects and the husband did not have sufficient income to support a loan. The wife was working and had an income sufficient to support a lending institution providing monies to her to purchase the Suburb D property. Thus, it is not surprising that the property is purchased in the wife’s name. At this time the parties trusted each other.
The wife conceded she put no money towards the purchase of the Suburb D property, whatsoever, and this is clear in the material.
The question of whether her parents put forward a guarantee to assist her to obtain the loan is not a matter I need make a finding about for if they did so it was but a small contribution when one has regard to Mr Tritton’s contribution.
The husband sets out the conversation he said he had with his dad about this project and that his soon-to-be wife as well as his mother at one point were present. Mr E Tritton also sets out the conversation he had with his son and with his soon-to-be wife. The conversation from the husband’s point of view is as follows and begins at paragraph 297 of his Affidavit.
The husband:
I like this property think it has potential if it’s fully renovated.
The father:
I agree a bit of work on it and it will come up nicely then could also use the storage garages for our building equipment.
The husband:
I could live in it I need my own place and we need to get out of your place as Ms Ducatti is probably going to move up.
The father:
It has a mooring out the front too we can keep the boat on and use it as a base when we are out on the boat.
The husband says a week or two after this conversation he was at his parents’ home where he was living. Ms Ducatti, his mother and father were all together and we had a conversation in the following words.
The husband’s mother:
You two can live in the property as long as you pay the mortgage on the outgoings if you can do that you can live there.
The husband:
That’s fine we can do that we can also get a loan in Ms Ducatti’s name as she has a good income and we are geared up with the N Street project the property will probably need to be any in her name then.
The father:
Okay we can sort out the deposit and other bits and pieces from Tritton Pty Ltd and when we fix it up and sell it down the track we can just turn that over like the others.
The father’s recollection of the conversation begins at paragraph 19 of his Affidavit and says:
On 2 April 2006 Suburb D was purchased. At that time Ms Ducatti and Mr Tritton were in a relationship and about to start living together. At about the time of buying the property Mr Tritton said to me in the presence of Ms Ducatti:
What about we put the Suburb D unit in Ms Ducatti’s name. We can live in it until the time comes for when we can develop it. She will only for both you and I and the company will develop the site and then the profits will come out of will go back to the company.
The father:
I agree. It must be understood though that this is our property Mr Tritton, you and me, for, and part of our joint venture developments. I am paying the deposit on this in my business will do the reno work. My plan is to renovate now so that you and Ms Ducatti, can move into it. Later when we are ready we will develop it by doing a complete reno and sell it and divide the proceeds equally between you and me. Also, as you will be living here you will have to make the mortgage part the repayments could be about the amount of rent that you would pay.
The husband and Ms Ducatti:
“Yes that’s fair”.
The wife denies either conversation or any conversation took place at all on this very important issue. The wife asserts no conversation was had and that, in fact, this was a purchase by her and Mr Tritton for the purpose of it being their matrimonial home. I cannot accept that no conversation was had in relation to something as important as this.
The wife was passionate that I could not possibly find there was an agreement as outlined in the conversations set out in her husband and former father-in-law’s Affidavit because there was never a written agreement to this effect or even an assertion of a written agreement.
Secondly, the wife asserts that the purchase of the properties at Suburb D and Suburb G were not part of the partnership agreement between her former husband and his father. The wife says this is evident because the properties were purchased in her name and it was always the intention of herself and her husband that they would be their matrimonial home at the time of purchase. Therefore, the purchase of these properties were outside the scope of the partnership agreement.
I reject the wife’s arguments for the following reasons.
Firstly, it is clear there was an oral agreement between her husband and his father in which she was clearly involved from the answer Mr Tritton gave to the wife when she asked him, “was why was there no agreement in writing.” Answer, “I didn’t need one. It was my son. I trusted him”. This is a more than a sufficient explanation for me of why there was no written agreement.
Secondly, the husband, wife and his father acted upon this written agreement purchased the property at Suburb D and renovated it sufficiently for the parties to move in and the husband and wife paid the mortgage on an interest only basis on the property by way of rent.
Thirdly, it is also clear that the wife was an integral part of this transaction and without her income earning capacity they would not have been successful in obtaining the necessary finance to purchase Suburb D. I find that the wife was involved in that family discussion, agreed to it and acted upon it.
As I said to the wife during the hearing there is no necessity for an agreement such as this to be enforceable that it be in writing. It may be prudent to have a written agreement and that is what is usually done but it is not a requirement at law.
This oral agreement conforms with the husband and father’s partnership practices prior to the husband and the wife’s relationship and during their relationship namely as builders who purchase property for renovation and ultimately to on sell for profit. This intention was clearly set out in both the different yet similar conversations the husband and his father recall as their intention in respect of the Suburb D property.
This is how Mr E Tritton and his son went about doing what they had always done, purchasing a property, demolishing and rebuilding and/or renovating the property for on-sale. On some occasions Mr E Tritton and his wife used the equity in their property to fund the purchase of an investment property, or the husband and on occasions his brother put money into the purchase of an investment property or worked for no wages waiting for the property to be sold to obtain that to which they were entitled. The difference on this occasion was that the wife was integral part of their plan due to Mr E Tritton being highly geared and the husband’s low drawings and income not enabling him to obtain a loan in his name.
It is disingenuous of the wife to say there was no agreement when, clearly, there was. The wife was involved in the agreement because she put her name to a loan application for a property she did not have the capacity to renovate as well as pay the mortgage other than on an interest only basis. Payment for the renovation came from her husband and former father-in-law in their capacity as partners in Tritton Pty Ltd.
This was clearly a family venture and the lack of a written document supports this finding. The husband and his father were putting their trust in each other and the wife, who was not yet a member of the family at that time, in asking her to purchase Suburb D in her name when they were taking all the risk in its maintenance and cost of development.
It is clear from the wife’s material she put no money into the purchase of Suburb D. The parties resided in this property up until September 2014 when they moved to F Street, Suburb G where the wife and children have remained since separation. I accept that whilst living in Suburb D the wife used her income towards payment of the interest on the mortgage, the family outgoings and used her income towards the support of her family and her investment property in Melbourne.
The wife made much of the fact that a deposit of $26,000 was paid for purchase of Suburb D, and when the loan was drawn at settlement the full purchase price of the property namely $520,000 was drawn down, thus, there was a surplus of $26,000, the initial deposit.
The answer is clear that if she had read her husband and father-in-law’s Affidavits clearly. Mr E Tritton says at paragraph 22 of his Affidavit that $4,500 was needed to pay towards stamp duty and about $21,000 was given to Ms Ducatti and Mr Tritton to do with what they wanted. I accept the evidence of Mr Tritton.
Suburb D was purchased in 17 May 2006 and was tenanted until December 2006 when a minor renovation was carried out by the husband and his father so that he and his wife could move into the property. As Mr E Tritton says in his Affidavit, “in reality, the money used to pay for the renovations were my funds” and came from his building company, and he did not charge them for his time, a clear contribution by him. The oral agreement that Mr Tritton and his father set out in their affidavits were clear. They would be the equitable owners of the property at Suburb D, the wife would be the legal owner on title, Mr Tritton and the wife would remain living in the property with their children, Tritton Pty Ltd would carry out some initial renovations to enable them to live at the property and, “when we’re ready, we will develop it by doing a complete renovation, sell it and divide the proceeds equally between you and me. Because you're living there, you will have to make the mortgage payments, and it will be the same as rent”, and that is what the parties did.
Similar conversations and intentions are clear from the husband and his father’s Affidavit in relation to the purchase of Suburb G in around May 2014.
The father’s recollection of the conversation commences at paragraph 85 of his Affidavit:
I spoke with Mr Tritton in Ms Ducatti’s presence where I said to them words to the effect:
I think this is a great property. It’s in a great location stop whilst the property is heritage listed I think we can still develop it because of the houses around it which appear to have been recently developed there is a lot of upside on this project.
The husband:
Yes, I agree let’s go for it we made money from the developments with Mr Z and we can buy without a mortgage.
The father I spoke with Mr Tritton in Ms Ducatti’s presence words to the effect, “this will be a development site and part of our joint venture we need to think about in whose name we register it in.”
The husband:
What about if we put it in Ms Ducatti’s name I spoke to the accountant and he advises to put the property in Ms Ducatti’s name also while the application with the council is being considered can Ms Ducatti and I and the kids move in?
The father:
I do not have any issue with this but we need to spruce it up before you can move into it there some areas that need urgent works.
Ms Ducatti, “that’s great thanks [Mr E Tritton].”
The husband’s recollection of this conversation begins at paragraph 376 of his Affidavit.
The husband says he had a conversation with his father at his parents’ home where both Ms Ducatti and his mother were present.
The father, “we will buy this property together and develop it.”
The husband, “that sounds great.”
The father:
You two can live in it until we do the building works as long as you pay the outgoings. We will have enough cash from the other building projects and we can draw down some against the fund sitting to offset the Suburb D loan. Once all that is done and sold we can split it as usual 50:50.
The husband:
We can put in and Ms Ducatti’s name again as we have this Suburb W project that we should keep it all separate spoken to the accountant who advised this was the way to go.
The father, “that’s fine but it’s our development 50:50 as all your mother and my money is going into it.”
The husband, “of course” - and he adds that everyone was sitting at the kitchen table in his parents’ home at Suburb HH when this conversation occurred.
The wife’s position in relation to Suburb G and its purchase is exactly the same as for Suburb D. The wife asserts there was no conversation, which is an impossibility for me to accept, that this property was never part of her father-in-law and husband’s partnership and was purchased with the intention it would be the matrimonial home of the parties. The wife denies any oral agreement between herself, the husband and her former father-in-law, yet both the husband and his father say there was a similar oral, yet again different discussion between the three of them in relation to the purchase of Suburb G as there was for Suburb D.
They assert that this discussion formed the basis of the agreement of which Ms Ducatti was an integral part is apparent. The property was purchased in Ms Ducatti’s name on the advice of their accountant. By this stage the parties were married, they had two children, the wife was involved in the business of her husband and father-in-law in doing their accounts liaising with suppliers and the like and the husband and his father had two other projects running at the same time. They had significant funds in their building account and the availability of redrawing the paid out mortgage on the Suburb D property and this is clearly where part of the cash came from to purchase Suburb G on an unencumbered basis.
Between the purchase of Suburb D in 2006 and Suburb G in 2014, the husband and his father carried out very many successful building ventures from which drawings and profits were retained by each of them.
The husband sets out in paragraph 306 and his father from paragraph 29 to 35, that between 2008 and 2011, joint funds that the husband and his father held in their building account were put in the Suburb D mortgage to reduce interest payments that the parties were making. Of course monies were also drawn out from the same mortgage account when they were needed for building projects. The offsetting of the interest on the mortgage of Suburb D was a significant benefit to the husband and wife.
Mr E Tritton says the effect of the transfers in and out of this mortgage is that nearly the totality of the Suburb D mortgage owing to the bank was paid out towards the end of 2011. That loan was initially $520,000. Mr Tritton refers in his Affidavit at paragraph 306 that by 27 May 2011, the total funds paid from the joint funds of his father and himself to the Suburb D mortgage were $495,777.
By 2011, there was a small mortgage on the Suburb D property. The husband and his father would hardly have carried this process, namely putting monies from their building company into the Suburb D mortgage out if the Suburb D property was not part of their building enterprise.
Mr Tritton says by 2012, Mr Tritton and Ms Ducatti had refinanced the mortgage on the Suburb D property from Westpac to the Commonwealth Bank and at the time of the refinance, there was a credit in the account of $48,000 which were paid to Ms Ducatti and, Mr Tritton and they used these funds at their discretion.
The new mortgage obtained from the Commonwealth Bank for $520,000 in 2012, using the equity in the Suburb D property was carried out in anticipation of the next property development which was the purchase at Suburb G.
From September 2014 until about April 2017, the Suburb D property was rented out, and the rental income was applied to the payment of the Suburb D mortgage which was part of the source of the funds needed to purchase Suburb G.
Mr Tritton was required by order of this Court post separation to meet all the outgoings in respect of Suburb D. Given his modest income and Ms Ducatti’s large income, this has resulted in a significant burden to him and he has struggled to maintain that mortgage. The wife has not made a contribution to any mortgage or outgoing in the properties that she now asserts are her and her husband’s since separation. Nor did she agree to rent out the property when Mr Tritton was struggling to make payments as the bank had issued a section 57(2)(b)[1] notice.
[1]Real Property Act 1900 (NSW), s 57(2)(b).
The father and son carried out the development at Q Street, Suburb O and this development was sold in 12 March 2011 for $2.6 million, having been purchased for $922,000. The net proceeds of $1.9 million were deposited into the JV Westpac account and the funds were used as follows as set out at paragraph 49 of Mr Tritton’s Affidavit:
$120,000 was used to repay Mr M Tritton for his contribution to the development.
Discharge of the $375,000 mortgage over Mr Tritton and his wife’s property taken out to purchase the property.
$495,777 was transferred to the Suburb D mortgage, thereby, reducing it to virtually nil.
The remainder some $960,000 was placed into the JV Westpac account to be used for future purchases and developments.
On 4 June 2009 and prior to selling Q Street, Mr Tritton and the husband bought a development site at Suburb S, being a block of 4 units for $1.25 million. Mr Tritton said he and his son entered into an arrangement where the units were purchased in Mr Tritton’s name but it was a fifty-fifty deal and the profits went back to L Pty Ltd. This arrangement was confirmed by the husband. The husband and Mr Tritton said this discussion took place between them in Ms Ducatti’s presence and she made no objection to the arrangement.
The mortgage taken out to purchase the Suburb S units was $1,191,000. Again, a mortgage was secured over Mr Tritton and his wife’s home to ensure sufficient funds for the renovation costs of the project.
Three units have been sold and Mr Tritton has retained one. The net proceeds of sale of those units were $1,685,339 and these funds were applied to pay out the Westpac mortgage of $1,194,000, discharge the mortgage over Mr Tritton and his wife’s home of $381,000 and interest.
$100,000 was placed into the L Pty Ltd account to pay accounts.
The husband asserts and his father agrees that the apartment Mr Tritton owns at Suburb S is held on trust between he and his father on a 50:50 basis as is the Suburb D property and Suburb G property. This is a consistent pattern of purchase and development.
On 17 December 2012, a mortgage was taken out over the apartment in Mr Tritton’s name at Suburb S for $448,000 and those monies were placed into the L Pty Ltd’ bank account to be used for the company expenses.
On 8 September 2011, Tritton Holdings Proprietary Limited was established, and Mr Tritton and his father are equal shareholders in the company. Mr Tritton cannot find the trust deed and it was apparently sent to the wife at her request.
The wife, being a skilled accountant and financial controller, was involved in the accounts, doing books, MYOB account, and the like, and assisted the husband and his father to manage their, at times, complicated financial manoeuvrings. The wife knew what their business was and how it was funded. There is some difficulty now with the account position of the Tritton Unit Trust and Mr JJ’s Affidavit indicated that there had been significant errors in the accounts prepared by the wife which if fresh returns are lodged will result in a significant tax debt. I make no such findings.
The current entities of which the husband and his father are equal shareholders or have an equal entitlement in or to are:
a)Tritton Holdings Proprietary Limited;
b)Tritton Unit Trust; and
c)L Pty Ltd, formally Tritton Pty Ltd.
The Tritton Unit Trust had separate developments and bank accounts to Tritton Pty Ltd and L Pty Ltd. This unit trust was set up to develop sites at Suburb U and Suburb W. The trust was set up as these two developments were a joint venture with a third party. The bank account is styled Tritton Holding Account or TH WBC account.
In relation to the Suburb U development, the joint-venture purchased a property, at T Street, Suburb U. The sum of $460,000, which had been raised by a mortgage over the Suburb S unit and paid into the JV Westpac account, was used in the development of T Street. They paid the deposit of $170,000 from that account, then an additional $355,291 and also $86,890 for stamp duty and other costs from the TH WBC account.
Mr Z, their joint venturer, matched the payments by Mr Tritton and the father and the joint-venture obtained a mortgage from the V Bank.
During 2011 and 2014, the Suburb U development was carried out and the units sold off. Further monies than the initial stake were required in order to finish the development. By completion of the project in 2014, the Tritton unit trust had expended some $730,000 and additional $250,000 or so to that originally financed. The profit on the project was $1.5 million ultimately. This profit was paid in two payments: an amount of $730,500 on 2 September 2014, interest paid on the moneys borrowed from the Tritton Unit Trust to complete the project amounting to $310,000 and the balance of some $500,000 was paid later. Thus, the profit to the father and his son was the $310,000 in interest and payment of $500,000 about $810,000.
That $550,000, was used by the Tritton Unit Trust to purchase and develop a property at Suburb W. Another joint venture development between Tritton Holdings Proprietary Limited on behalf of the Tritton unit trust and Mr KK called the Suburb LL development.
Additional monies were required to fund that development and a loan was taken out by Mr Tritton secured over his apartment at Suburb S and unit trusts interest in the Hillsdale property for $1.32 million. This loan was taken out in 2013. Monies were expended as follows:
a)$82,500 was paid by Tritton Holdings Pty Ltd for the deposit;
b)L Pty Ltd paid 50% of the stamp duty namely $38,120; and
c)The other joint-venturer paid the same amounts.
Before the plans were developed, the property was purchased by a third party and the profits for the unit trust was $325,000.
In 5 June 2014, the father and the husband entered into another development at Suburb W with a Mr Z. The venture was between Mr Z and Mr Tritton. The joint-venture property was purchased for $9.5 million plus stamp duty and legals. To fund the purchase a loan was secured over the property for $7.5 million, $550,000 came from the Suburb U development profits, a loan from GG Bank secured over the residential of Mr Tritton and his wife own, a loan from L Pty Ltd to Mr Tritton of $300,000, a loan from L Pty Ltd to Mr E Tritton and Mr Tritton of $28,000, and Mr Z put in $1.25 million in.
The profits from this project were modest of some $20,000 and were received in June 2015. Interest was paid from the monies lent to the development by Tritton proprietary limited, L Pty Ltd and Mr and Mrs Tritton of $61,000. The principal sums of $550,000 from the Suburb U development, mortgage over Mr and Mrs Tritton’s home and the loan to L Pty Ltd totalling $800,000 were also repaid from that sale.
Suburb G was purchased on 19 June 2014 and was purchased as follows:
a)The purchase price was $2.325 million;
b)On 19 June 2014, $117,500 was transferred from the JV Westpac account to L Pty Ltd;
c)$519,596.14 was transferred by Ms Ducatti from the Suburb D property refinanced mortgage;
d)$130,000 from a GG Bank loan in the name of Mr Tritton and his wife, secured over their home at Balmain;
e)$850,000 was transferred from the JV Westpac account to Tritton Holdings Proprietary Limited;
f)A further sum of $500,000 were deposited into Tritton Holdings, being the repayments of the profits referable to the Suburb U development and from the Suburb W development; and
g)These transaction set out how the Suburb G purchase was financed and that it is unencumbered.
It is clear that the monies to purchase Suburb G came from the profits of the business activities the husband and his father had engaged in and to which the wife has made a modest contribution and which business was conducted between from 2004 to 2014. The husband and wife paid the mortgage interest only over the Suburb D property while she and the husband lived in the property.
Not only did Mr Tritton contribute to the projects of the partnership including Suburb D and Suburb G by effort and energy, he and his wife had throughout the period 2004 to 2014 permitted their own home to be mortgaged to assist in funding projects on many occasions. This contribution together with the wife’s contribution in the business activities indicate this was clearly a family business venture in which the father and his son were engaged in developing properties, the wife assisted in the running of the business parenting of their two children and also earning her own income.
In the wife’s case she has recorded that at one point her former father-in-law, owed his business $2.32 million, the purchase price of Suburb G. Yet it is her case that she and her husband own the property at Suburb G outright and her former father-in-law has no interest in it whatsoever either personally or by virtue of his shareholding in the unit trust and/or companies and the partnership he runs with his son.
The wife cannot have it both ways. Her position is flawed and does not support her contention that she and her husband own Suburb G and Suburb D and are seized of assets in the vicinity of $4 million.
The wife agreed that no property was gifted to the parties. I accept Mr Tritton’s evidence there was never a loan to be repaid; the payment of the mortgage over Suburb D was by way of rent that the parties would have had to pay had they not been able to live at Suburb D. Mr Tritton’s evidence is clear and his son supports his position both Suburb D and Suburb G like all other properties that were purchased between 2004 in 2014, no matter in whose name they were purchased were part of the property development business and partnership the husband and his father ran.
It is also clear on the evidence that the wife assisted in the purchase of Suburb D and Suburb G in the running of the business and was fully cognisant of the agreement between the husband and his father in relation to ownership of all the properties that were purchased and sold during this period of time.
Her assistance, complicity, compliance in those purchases does not change in any way the character of the purchases or how they were funded. The wife’s contribution to this funding has been the payment of mortgages, outgoings, the support of her family, and in obtaining loans at a time when neither her husband or his father were able to. It is clear her income assisted in obtaining the loans and engaging in refinancing. However, that is a separate issue to what is the entitlement of her husband and her father-in-law to those properties.
What the wife had failed to take into account in her assessment of this matter was the contribution made by her the former father-in-law and his wife in securing mortgages over their property to facilitate purchasing properties. The wife failed to take account of the fact that those mortgages, together with interest needed to be repaid upon the successful completion of the project.
The wife failed to make out any case that in some way Mr E Tritton had taken more of the profits or drawings of the business that her husband or that this was due to an agreement between her husband and his father his son would take minimal drawings on the basis that he would in some way have a greater share or entitlement to the properties at Suburb D and Suburb G. That is hardly a partnership that is being described.
The wife failed to take account of her former father-in-law’s entitlement as an equal partner to 50% of the partnership profits.
The way in which the husband and his father carried out the partnership is in stark contradiction to the wife’s stated case and the wife has merely recreated history as I see in order to achieve her end which is that she and her husband own the properties at Suburb G and Suburb D.
I find that the third party Mr Tritton and the husband have made out their case that he and his father own 50% of the properties at Suburb D and Suburb G and that the value of the properties to be included in the matrimonial pool for division is 50% of the value of Suburb D and 50% of the value of Suburb G less any mortgages in respect of those properties together with other assets in the parties own names.
The bulk of the monies to fund the purchase of Suburb G came from the profits of the Suburb U development of $1.5 million, which was a project of the Tritton Unit Trust of which her husband and father-in-law are joint shareholders in their capacities as shareholders of Tritton Proprietary Ltd.
The wife denied she was a company secretary for L Pty Ltd, however, the ASIC search revealed she was. She was not truthful in that matter as she was not truthful in many matters concerning finances. I prefer the evidence of her husband and his father when there is a matter of contest. The wife is at best an inaccurate historian and at worst, has simply covered up and not told the truth.
The husband and his father undertook numerous building ventures between 2004 and 2014 and ultimately the profits from those ventures went into the Suburb G property. They engaged in those projects for the equal benefit of each the husband and his father. The wife agreed she understood that was their arrangement, and she used the words “joint venture” in her Affidavit and in the witness box, but still persisted with her evidence that there was no such discussion to which she was privy as set out by her husband and former father in law, that Suburb D and Suburb G were not commercial developments and it was always intended these properties would be their matrimonial home. That last point is an irrelevant consideration for me.
What is relevant is how were the homes funded, and it is clear how they were funded: from the joint partnership profits of Mr Tritton and his father from various building activities.
The wife did not challenge the fact that the funds from the building projects were held in the JV Westpac account. The wife agreed she made no direct financial contribution to the purchase of Suburb D or Suburb G.
The wife denies there was a joint venture agreement as there was no agreement in writing. That is not necessary to found a joint venture agreement and I find there was a joint venture agreement between the three of them as outlined by the father and husband and as follows.
The agreement/joint venture was that Suburb D property would be purchased in the wife’s name in order to secure finance because at that time the father and the husband were heavily geared with the N Street project which had yet to sell. The wife would hold the title in the Suburb D property for the benefit of the father and the husband, and the husband and wife would live in the property until the time came when they could develop it, and they would be responsible for the mortgage and outgoings whilst they lived in the property.
The wife agreed that the funds drawn down on the Suburb D property in 2012 from the Commonwealth Bank of $520,000 were used to fund the purchase of the Suburb G property.
The only reason the parties had any capacity to draw down a loan of $520,000 in late 2012 over Suburb D was because Mr Tritton and his father deposited $475,777 into that mortgage from their successful by Q Street development.
Similarly, the wife made no direct financial contribution to the purchase of Suburb G. The agreement was the property would be purchased in Ms Ducatti’s name as this was a tax-effective arrangement based on advice from the father’s accountant and Ms Ducatti agreed with the tax benefit proposition in her oral evidence.
The wife would own Suburb G for the benefit of the father and the husband. The husband and wife would live in the property while the development was being considered by the Council. The wife does not deny this conversation took place. In her own Affidavit she refers to a joint venture but in her oral evidence could not say these words.
In her Affidavit at paragraph 297 she says:
I am the registered owner of H Street, Suburb D. I purchased this unit in June 2006, took out a loan with Westpac in my sole name. My parents provided a guarantee. The remaining $400,000 was underpinned by my salary. Mr Tritton made the deposit payment for the unit from his savings in the first instance. Once my loan was cleared Mr Tritton was repaid this value and the property was fully geared up with debt.
That is not a fulsome or truthful statement. The loan over Suburb D was paid out from the profits of her husband and his father’s partnership dealings and not by her or her husband alone. This was done to enable the husband and his father to purchase the property at Suburb G as partners.
The wife is disingenuous in her material and did not set out accurately what happened. The wife admitted the following in cross-examination in relation to the funding of Suburb G:
a)The Suburb D mortgage drawdown $520,000;
b)$130,000 loan from GG Bank over the home of the father and his wife. These two funds total this totals $670,000; and
c)The balance from profits, proceeds and distributions from the business of her husband and father in law.
The property was purchased for $2.3 million thus the balance required to settle the purchase was $1,630,000 and the wife agreed these funds came from the partnership assets of her husband and father-in-law’s. Given I have rejected any evidence of the wife that her former father-in-law withdrew significant funds from the businesses by way of drawings over and above those which her husband drew, even on her own evidence the claim that she and her husband are the owners of the property at Suburb G is not made out.
In addition to the only story that makes sense as to the acquisition of the Suburb G property is that of the husband and his father. Any evidence the wife has given on property issues that is not supported by documents is not accepted by me.
Unfortunately, the evidence supports my finding that the wife set out on a course of conduct to hide her income from the Court at the very time she made her application for an adjournment in 2018, crying poor and stating she was unable to fund payment for one half of the expert’s fees and the like. Additionally, the wife has continued to pursue an application for spouse maintenance when she is earning $160,000 per year, more than twice the income of the husband, whilst making no contribution to the maintenance of the property at Suburb G or Suburb D by way of mortgage payments and the like and has left that to her husband. This has resulted in significant debt for him. The obligation of disclosure is ongoing and when a party circumstances change they have an obligation to inform the other parties in the proceedings and the Court. Not only did the wife not inform anyone of any change in her circumstances she has attempted to hide the reality of her financial position as follows.
Going to the husband’s tender bundle, T3, pages 154 and 161.
At page 154. This is an email to her then employer, Mr PP dated 7 March 2019, from Ms Ducatti and is headed Ducatti Company QQ salary package offer:
Hi, [Mr PP]. Thank you for the opportunity to now finalise my salary package. I provided the comparative of [Mr SS’s] package and what I have been earning for the ‘17/’18 financial year. My proposal is for the ‘18/’19 financial year, noting that I have only been invoicing 5 k per month to avoid showing my real income to Malaka. My plan is next year to still work three days from the office and then in 2020 I can work daily with some reduced school hours on some days. I just need your position on the Q3 by Wednesday so I can either put the finance through Company QQ or my own business. Looking forward to chatting with you about this. I would suggest you run this through with [Mr Z].
At page 161 there are printouts of the wife’s invoicing referred to in her email of 7 March 2019. The invoices reveal that up to June 2018 the wife was invoicing Company QQ $11,000 per month. From July 2018, the invoices reduce to $5,500 per month. There is no mention let alone an explanation of this material change in her invoicing patterns in her material.
In the witness box when pressed on this damning evidence the wife said:
I was offered a permanent job if I reduced my salary and it would be paid back. I didn’t want to rock the boat. I was waiting for a permanent job. I’ve now sought action against him, and sought $42,000 to be re-paid. I’ve only been paid $2,000 from my back pay.
That evidence is not consistent with her email or conduct and has never been explained in any Affidavit she has filed in these proceedings.
The wife asserts the email of 7 March 2019 has been “doctored” to use her words and, that the words “my proposal is for the ’18/’19 financial year, noting that I’ve only been invoicing 5K per month to avoid showing my real income to Malaka” was doctored and this phrase was put in her email by someone else. The husband says the word “malaka” is a pejorative term in Greek, meaning arsehole, or something of that nature.
I reject entirely the wife’s poor explanation of her attempt to minimise her income for the purposes of the Court proceedings. The email and her request to minimise her income is consistent with her conduct in these proceedings. To this date the wife is not produced a copy of her current contract of employment, and only produced an updated financial statement when requested whereas the husband came to Court with an updated financial statement of his own volition.
Until the wife tendered her updated financial statement no other party in the proceedings or the Court had any idea what her income was. It is clear she was earning significant income at the very time she pleaded before the DCJ McClelland that she had no money with which to fund payment of experts’ reports and the like. That was a clear untruth to the Court as the reality was that she was invoicing $11,000 per month to Company QQ.
I am still not satisfied what her actual income or salary package is a she has chosen not to produce the contract of employment. I would be entitled to draw the inference that it is greater than the $160,000 she tells the Court she earns per year.
Therefore, in financial matters, despite her being a talented accountant, and clearly competent in her job, I cannot accept what she says when it is inconsistent with the evidence of the husband and former father-in-law. The wife is not a witness of truth when it comes to the financial matters.
Thus, the first and second respondents have clearly made out their case that they each own a 50% interest in the properties at Suburb G and Suburb D and that the wife holds those properties on trust for them as was the clear agreement they really reached when those properties were purchased and having regard to the funding of those properties. The evidence is overwhelming that Suburb G and Suburb D were purchased in the wife’s name on trust for the father and the husband as part of their joint venture as builders and renovators.
I find that the trust is an express trust created by the oral agreements between all three parties prior to the purchase of Suburb D and Suburb G. That the terms of this express trust are as set out in the husband’s and his father’s Affidavits and supported in the points of claim which terms were confirmed by them by their actions and in their oral evidence unchallenged by the wife. The evidence supports a finding of certainty of intention, a certainty of subject matter and a certainty of object, all necessary components to find an express trust as is set out in the decision of Korda v Australian Executor trustees (SA) Ltd[2].
[2]Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62 at [7].
It was clear the wife would hold her interest in the properties on trust for the father and the husband in their joint venture capacity. This was a term of each of the Suburb D and Suburb G joint venture agreement. The fact this express trust is not in writing does not mean it fails, and indeed there is case law to that effect which is Dunphy v Russell[3] and that Section 23C(1) of the Conveyancing Act[4] does not apply to defeat the husband’s claim.
[3]Dunphy v Russell (2018) NSWSC 721 at [130].
[4]Conveyancing Act 1919 (NSW), s 23C(1).
The wife acquired these properties by using funds provided by the husband and his father to pay initial deposits on exchange of contracts, additional monies required to complete the purchase, payment of stamp duty, legal fees and the like, and she cannot resile from these facts. The wife’s oral evidence was clear, she made no direct financial contribution to the acquisition of these properties.
Secondly, there was a common intention that there would be a constructive trust over the properties in favour of the husband and father. The three parties formed a common intention as to the ownership of the beneficial interest, and the party claiming the beneficial interest has acted to his or her detriment in that the husband and his father, have put the entirety of the profits of their building ventures, for a period from 2006 through to 2014, into Suburb D and Suburb G, and yet that property is held in legal title in the wife’s name. Thus, the husband and father have acted to their detriment Allan v Synder[5].
[5]Allan v Snyder (1977) 2 NSWLR 685.
Thirdly, the wife holds the properties on a resulting trust in favour of the father and the husband. Her evidence orally and the facts of the matter prove she put no money into the purchase of these properties. The wife paid outgoings such as mortgages and upkeep when she occupied the properties with her husband and family, monies she would have paid whether she lived in those properties or the property of a third party. A resulting trust will be presumed where on purchase the legal title to real property is vested in someone other than the person who is prove to have provided the purchase money.
In Amit Laundry Proprietary Limited v Jain[6] their Honours held:
The presumption of a resulting trust is thus a presumption as to a declaration of trust, premised on a presumed intention to create an equitable (beneficial) interest in the acquired property in some other than, or in addition to, the person in whom legal title is vested. Once the primary fact giving rise to the presumption is established (for example, that one or more persons has or have provided part or all of the purchase price but the legal title has been vested in another), the burden falls on the party disputing the existence of a resulting trust … to rebut the presumed fact on the balance of probabilities. Where that party fails to rebut the presumption, the court “upon consideration of all circumstances presumes there was a declaration [of trust] though the plain and direct proof thereof be not extant”.
[6]Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 at [163]-[164].
The facts of this matter clearly support the presumption of a resulting trust in favour of the husband and his father and the wife has failed to rebut that presumption on the balance of probabilities and therefore her case fails.
Having so found my next task is to determine the division of the parties’ assets, which is a 50% interest in Suburb D and Suburb G primarily as I note there are other at assets such as the wife’s property in Melbourne, superannuation chattels and like.
The first asked task is to assess the matrimonial pool for division. Using as a base the pool referred to in paragraph 58.
I will exclude the wife’s motor vehicle from the matrimonial pool as it was purchased post separation and its value and debt are nearly equal.
I will exclude the monies each of the parties assert they owe to their parents post separation and/or to friends. I note for the husband his personal debts amount to $400,000 which has been incurred in part comply with the orders made by this Court to fund the outgoings of the Suburb D property which could have been sold during the life of this matter or rented out. The wife owes $163,000 to her parents.
I note there is a contingent tax liability if fresh tax returns for the company and partnership are filed. There was no evidence that such returns will be filed or are required to be filed and the contingency of this liability does not permit me to take this ‘liability “ into account in the matrimonial pool.
Secondly, the husband seeks an injunction against himself, L Pty Ltd and the Tritton unit trust from filing any “amended” tax returns for the years ended 30 June 2008 to 30 June 2016 the time frame in which the wife was dealing with the partnership accounts. He seeks an indemnity from the wife in relation to 33% of any unpaid or assessed tax.
I will not order the wife to give such an indemnity given I have made no findings on this issue and if these issues arise they may be dealt with in another place. However, I will make the injunctions sought. This is a sufficient protective order as I see it.
I will allow as matrimonial debts to the husband liabilities for Capital Gains Tax on the sale of Suburb D and Suburb G as it was clear from the evidence of both the husband and his father these properties will need to be sold to rectify the current debt position for both the husband and his father and to allow the partnership and building company of the husband and his father to again become profitable if at all possible. If one or either of the properties is not to be sold the husband is to pay the wife, within 14 days of that decision being made, a sum being her percentage entitlement to the matrimonial pool of the value of the tax not paid and allowed for in this matter.
The wife will refund one half of the all the experts’ fees which have been paid by the husband to him from her share of the matrimonial pool. This is a sum of $11,915.
As to addbacks. The wife agrees she has drawn down $80,000 in the parties’ line of credit and used this money to renovate her Melbourne property. The husband sold a boat he owned to his mother for $60,000 and as with the wife’ unit which she owned prior to marriage this was a matrimonial asset. I will have regard to these two items as addbacks.
In addition I accept that the wife used rent of $11,000 from Suburb D for her own purposes prior to the husband residing in the property and that sum will be added back to the pool, as should the money she took from the child X’s account of $5,370.
I find the matrimonial pool for division to be as below:
| Assets | Value |
| F Street, Suburb G (50%) | $1.65M |
| H Street, Suburb D (50%), | $437,500 |
| AA Street, Melbourne – wife’s share | $425,000 |
| 1 CC Street, Sydney | $52,962 |
| 2 CC Street, Sydney | $65,000 |
| R Street, Suburb S | $390,000 |
| Loan owing to husband from the Tritton Pty Ltd | $712,000 |
| Loan owing to husband from L Pty Ltd | $88,497 |
| Loan owing to husband from the Tritton unit trust | $365,686 |
| Home contents of Suburb G | $10,000 |
| FF Bank Shares | $3,857 |
| Engagement ring | $10,000 |
| RR ring | $3,000 |
| Total | $4,162,503 |
| Addbacks - wife | $16,370 $80,000 |
| Husband | $60,000 boat |
| Total | $4,318,873 |
| Liabilities | |
| Suburb S | $215,000 |
| Suburb D | $260,000 |
| 2 GG Bank loans | $43,750 |
| Loan to Tritton Unit trust | $973,864 |
| Tax on the sale of Suburb G | $89,094 |
| Tax on the sale of Suburb D | $34,736 |
| Loans in respect of AA Street | $170,000 |
| Total | $1,786, 444 |
| Net value of assets | $2,532,429 |
The value of all liquid matrimonial assets for division as I have assessed them is $2,532,429 excluding superannuation.
Going now to the parties’ contribution based entitlement to the asset base as I have found it.
The husband was seized of a significant cash and assets at the commencement of the relationship approaching 40% of the parties’ current assets and he used his significant assets together with those of his father to purchase the properties at Suburb D and Suburb G, to maintain and conserve those properties and to support his family including the wife pre and post separation.
At the commencement of cohabitation the wife had an equal interest in her unit at Melbourne with her brother. The wife has kept that property totally separate from the marital assets. The wife’s income has been used in part to support that property at times and she used a matrimonial draw down facility secured over Suburb D to assist in renovations to the property. The wife has not only kept this property separate, it never has formed part of a platform to assist the parties for a finance for example.
I accept also the husband’s evidence that the he assisted the wife initially in carrying out some renovations to the property and he has made a direct contribution to its ultimate value.
This is in stark contrast to that which the husband did with his substantial asset base of some $900,000 at the commencement of cohabitation. He put the entirety of his assets into the acquisition of matrimonial property and the benefit of his family. The husband used all his income to support the family and acquire assets. The wife also made a contribution to matrimonial assets from her income but has clearly used some of her income to pay for her unit in Melbourne. There is an inequality in what each did with the assets in their possession at the commencement of cohabitation and during their relationship.
During their relationship and marriage the parties’ contribution to their assets and their family was equal by way of parenting and homemaker, funding their lifestyle, effort and energy. This young couple together with the husband’s father carried out a very successful joint venture until, unfortunately, their marriage failed.
The husband proposes he receive 60% of the assets ultimately and I find that this is appropriate having regard to his pre-separation contribution to the marriage and its assets. However, that is not the only contribution I have assessed and there are relevant 75(2)[7] factors in this matter.
[7]Family Law Act 1975 (Cth), s75(2).
Looking at the post separation contribution of the parties and the relevant 75(2)[8] factors.
[8] Above, note 7.
There are no relevant 75(2)[9] factors for the wife. The length of the marriage and the fact that the wife has the primary care, or has had the primary care, of two young children of the marriage, has not impacted upon her earning capacity. The wife has a significant earning capacity, far superior to the earning capacity of the husband, clearly proven throughout the marriage by his tax returns and the like in his filed financial material. The wife’s earning capacity is at least twice his earning capacity.
[9] Above, note 7.
Secondly, the wife has not made a superior contribution to the assets or the family to that of the husband post separation.
At first blush there are relevant factors under section 75(2)[10] favouring the husband namely wife’s superior income earning capacity and her superior superannuation account which will continue to grow at a far greater rate than the husband’s due to her high income earning capacity. However, the financial resource of the husband’s partnership is also available to him and it has been profitable in the past. This litigation and the wife’s insistence that she and her husband owned all of the profit of the partnership has stymied the husband and his father continuing in their previously successful business. I find this is a relevant consideration under section 75(2)(o) of the Act being any other factor that in the interests of justice the Court determines to take into account.
[10] Above, note 7.
Additionally and going to the husband’s financial post separation contributions. The husband has been required to fund the outgoings and maintenance of the Suburb D and Suburb G properties post separation. It is now clear on the evidence there would have been no detriment to the wife had Suburb D been rented as the husband sought, in circumstances where the wife’s income has been at times almost twice his income. The Court is still not satisfied as to the real income of the wife given she failed to disclose her contract of employment.
Secondly, the wife has lived rent-free in the former matrimonial home at Suburb G for 3 years and not paid one outgoing. These matters and the husband’s post separation acquired debt due in part to maintain the wife and children are relevant factors under section 75(2) of the Act.
I have assessed the relevant factors under section 75(2)[11] of the Act for the husband at 3% bringing his contribution based entitlement to 63% of the assets and 37% to the wife.
[11] Above, note 7.
In order to assess whether this adjustment is just and equitable I must determine what is the result of this division.
63% of $2,532,429 is $1,595,430 to the husband and rounded up $937,000 to the wife.
The wife is to retain her furniture $10,000 and her property in Melbourne which has net value of $255,000 and has had the benefit of add-backs of $96,300 a total of $361,300. Thus, the figure payable to her must be reduced by that amount to $575,000. From that sum the wife must pay the husband $11,900 being one half of the experts’ fees paid in this matter reducing her entitlement to $563,800. The wife will also retain her superannuation of $169,000.
The husband will be seized of $1,595,430 less the add back of $60,000 thus reducing his cash to $1,459,574 and his superannuation of $94,911. I find these orders are just and equitable and I will so order.
I do not accept the husband’s submission that the wife must wait for 12 months to receive her entitlement. I will order the wife to transfer her interests in both properties forthwith, be paid $50,000 upon that transfer as the husband suggests as part of her entitlement to property to the house herself.
I will give the husband and his father four months to pay out the wife’s remaining entitlement. This is sufficient time for them to determine how best to go about this and to sell both properties in order to pay the wife the remainder of her entitlement.
the parenting matter
There has been a number of AVOs taken out by the wife post separation. The husband has consented to two AVO’s on an without admissions basis in 2017. An extension of one AVO sought by Police in February 2018 was dismissed and the wife failed to attend on 2 May 2018 in relation to an AVO taken out by her and this also was dismissed.
The allegations supporting the AVO’s bespeak of a poor parental relationship and lack of trust rather than supporting a concern of domestic violence in the relationship or ongoing. I accept the father yelled at the mother on some occasions, that she was most concerned when she believed he went through her personal items whilst caring for the children in the home and confronted her with what he had found. Many of these behaviours arose from the parents attempt to jointly care for the children by “nesting “shortly after separation an arrangement no doubt entered into on advice. The concept of “nesting” sounds well in theory yet experience shows is a disaster in practice as these parents discovered. I do not find the father perpetrated violence on the mother during the marriage or post separation.
The evidence of Dr B was seminal in this matter. There is no doubt from his report, Court Exhibit 1, that he formed the view that the parties were co-operative, got on well, and he used the word “surprisingly well”. He, too, had read the distressing, upsetting, nasty text messages the parties send to each other.
In their Affidavits, each makes significant complaint about all sorts of unimportant issues; the extreme difficulty they have had at changeover with the children, resulting in AVO’s being taken out by the mother against the father, the consequences for her of her losing complete trust in him, particularly initially when he retained the girls for seven days early in the proceedings.
That retention by him has had a profound effect on the mother. I have no doubt that firstly she did not believe her marriage would ever end and has said so in one of her Affidavits and then, secondly, when he retained the girls, any vestige of trust evaporated and she still has not regained trust in the father. The mother became distressed when these issues were ventilated in Court.
The mother complains that he does not care for the children and that his parents do this. This is not a valid complaint and is not really a matter for her for when the children are with their father he provides the care that is appropriate for them as she does when they are with her. The facts are children are well cared for by each of the parents and are developing very well. Dr B was complimentary of each of them as parents. The mother’s complaints about the father are entirely unjustified.
The mother complained that the father would not agree to attend family therapy. This is correct, however, the father is concerned that the mother could use joint therapy sessions and the like against him and his concern has some merit. The mother’s behaviour in turning up well prior to the cessation of time, banging loudly on the door when the children are with him or his parents, damaging his parent’s property is correct. The mother minimised and diminished her former parents-in-law contribution to her children and to her and her husband’s financial position throughout the trial.
The husband’s position that he told the wife if she entered into the foyer of the building where he and his partner live when collecting the children he would call the Police did him no credit either and bespeaks of a somewhat immature attitude to these important issues. The parties do not get on well. They cannot be in each other’s presence. Yet, fortunately, as Dr B said, the children have not yet been affected by this.
Dr B was clear, the children are robust children; they have an excellent relationship with each parent. Moving them towards greater time with their father, which must occur, is not so much a problem for the children as it is an adjustment for the mother. Dr B opined the children:
Would cope if their parents cope, and they enjoy their time with their father. It is their mother who has the significant difficulty in accepting that they can have more time with their father than she believes they are able to cope with. She could not even foresee a time where the children, at ages 8 and 7, could spend three weeks with their father and three weeks with her, such is her fixation.
The mother has shown significant inflexibility, not allowing the children to be with their father on Father’s Day or spending some time with him on their birthday, matters which upset him and caused him stress in the witness box. The mother trotted out of phrases such as the “best interest of the children”, however, what that meant was what she believed was best for them and she is blinkered when it comes to their strong attached relationship with their father and their capacity to cope being away from her. Therefore, the orders I make must be clear and precise but not overdone. The mother would do well to have some flexibility in her parenting and not just say the words “best interests of the children”, but look at what that phrase means in terms of their day-to-day life.
These children are blessed. They have an excellent, caring, competent mother and loving grandparents in Melbourne. They have an excellent, competent, caring father, loving grandparents, and the husband’s partner in Sydney. They are well loved, well cared for children, who will thrive if each of their parents accept that the other parent is as valuable to the children as they are, and they are not at risk of harm in either parent’s care.
This is not a risk of harm case. This is a case about how much time the children can spend away from their mother without her regressing and, as Dr B said in his oral evidence, “the adjustment will be for you, madam, not for your children, when their time increases.”
The mother’s position about their time progressing is exceedingly slow. Her position is the current three nights a fortnight, broken up, Friday to Saturday, and then another night in the off week continue this year. In 2020 they progress to three nights in a row; mid 2020 next year, four nights in a block; January 2021, five nights in a block or broken up. That is far too slow the progression for these children.
Having regard to the matters under the Act and the facts of this matter, in particular Dr B’s report, that the following are the orders in the children’s best interest.
Neither parent seeks to rebut the presumption of equal shared parental responsibility. I will make that order and therefore, I must consider an order for equal time or significant and substantial time.
The father wants equal time in about 12 months’ time. Dr B was clear. He could not see that working at this stage, because of the poor relationship the parents have in reality. There is significant force and practicality in what he says. As Dr B said equal time arrangements require excellent communication between parents, and these parents are a long way from that.
The communication between the parents is fraught at present. Dr B recommended they only use text messages for short, information. For any lengthier or more involved communication this be by way of email. That if they do have an issue about the children that cannot be resolved they refrain from sending text messages about such important issues and either communicate by email or attend mediation. This was a sensible and practical advice to these young parents and the Court is hopeful they will have listened to this advice given their communication to date by way of text messages is distressing to read and I have not read all that is attached to the parties’ material.
Dr B says, the father must have substantial contact. The current time arrangement is very bitsy and although it provides for the children to see their father frequently at their ages for hours of time several times a week with travel time of perhaps 30 minutes either way may not be beneficial to the children. The current arrangement also requires the parents to be in constant contact with each other about collection and delivery of the children to and from each of their homes.
The children see their father nine times a week. On some occasions it is only for hours at a time. This type of arrangement is appropriate for younger children but in inappropriate for children of this age. It has resulted in unnecessary travel, to many changeovers and their parents coming into contact with each other on far more occasions than is appropriate. The current arrangement may be one of the reasons for the parent’s poor level of communication at present. These children are delightful, progressing well; a testament to their parents’ parenting capacity and strong and close attachment to each parent.
The children’s wishes are not formative or relevant in this matter.
Both parents have a high capacity to parent their children and each is available to care for their children whilst also working.
The children’s closest emotional attachment would be to their mother she was their primary carer however they have a strong and attached relationship with their father which is flourishing and is ready to move to the next stage
On all the evidence and having regard to the Act, I formed the view the children can easily cope with four nights a fortnight with their father away from their mother and this arrangement should commence forthwith.
Until Y commences formal school the time will be from after school/preschool Friday to 7.30pm Monday night in week one and from Thursday afternoon to the commencement of school/preschool Friday morning in week two.
When Y commences formal school the time on Monday will revert to the commencement of school Monday morning.
Upon Y’s second term at school in 2020, the father’s time with the children will be for a block period of five nights from Thursday after school each week extending to the commencement of school Monday in one week and from Thursday after school to the commencement of school Friday morning the other week.
Upon the children second term of schooling commencing in 2021 the father’s time will extend to six nights a fortnight from after school on Thursday to the commencement of school Tuesday in week 1 and every Thursday night from after school Thursday to the commencement of school Friday morning each alternate week. I accept the parents may want the children to have two nights in the second week and reduce the time in the first week to four nights. I will give the parties the capacity to do so provided they agree and that the children are spending six nights a fortnight in their father’s care.
For the remainder of 2019, the children are to spend time with their father in the term school holidays for a continuous period of seven days commencing from Friday after school to the following Friday morning, otherwise they spend the holidays with their mother.
For Christmas 2019-2020, the children spend seven days, in each parent’s care; with the mother to have the first period of time and the father the second week of the holidays and to alternate each week thereafter.
The father to spend time with the children at Christmas 2019 from 5 pm Christmas Eve to 5 pm Christmas Day and, the children to spend from 5 pm Christmas Day to 5 pm Boxing Day with their mother, otherwise the week-about arrangement is to continue. The parties may vary these times to allow the mother for example to take the children to Melbourne to visit their family and provided the father’s time with the children is not diminished the parties may vary these orders by consent.
Thereafter, for all mid-term school holidays the children spend one half of each school holiday period with their parents, being, for the father, the second half in 2020 and the first half in 2021, and alternating thereafter and the mother at the other times.
For Christmas holidays 2020-2021, the children to spend time with their parents on a two-week arrangement being with the father for the first period for two weeks, for the mother for the following two weeks, and the remainder of the school holidays to be equally shared between their parents, with the father to have the first portion and their mother the second portion.
For Christmas 2020-2021, the mother to have time with the children from 5 pm Christmas Eve to 5 pm Christmas Day, and the father to have time with the children from 5 pm Christmas Day to 5 pm Boxing Day.
For Christmas school holidays and the Christmas day period commencing 2021- 2022 the children to spend one half of the holidays with each parent being with the father in the first half commencing 2021 and each odd year thereafter and their mother the first half in 2022 and each even year thereafter.
The children to spend the day of Father’s Day with their father, unless they are otherwise living with him; the children to spend the day of Mother’s Day with their mother, unless otherwise living with her from 9am until 6pm.
In the event of the children’s birthday the father to spend time with the children for three hours on each of their birthdays in the event they are not living with him and similarly for the mother.
Both parties agree that they may take the children outside the Commonwealth of Australia for an overseas holiday, provided they provide to the other 28 days’ notice in writing of their intention to travel, a copy of the itinerary, return travel air flight and contact details whilst they are overseas.
I certify that the preceding two hundred and eighty-six (286) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Henderson delivered on 20 September 2019.
Associate:
Date: 20 September 2019
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