Truman and Truman
[2018] FCCA 359
•8 March 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TRUMAN & TRUMAN | [2018] FCCA 359 |
| Catchwords: FAMILY LAW – Property Settlement – respondent wife deceased – contributions and s.75(2) factors – issues of credit. |
| Legislation: Family Law Act 1975, ss.75 (2), (o), 79, (d) – (g), (2), (4) Evidence Act 1996 (Cth), s.140 |
| Cases cited: Re: Litigants In Person Guidelines (2001) FLC 93-072 |
| Applicant: | MR TRUMAN |
| Respondent: | MS TRUMAN (DECEASED) (THROUGH CASE GUARDIAN MR A) |
| File Number: | LNC 616 of 2016 |
| Judgment of: | Judge McGuire |
| Hearing date: | 30 January 2018 |
| Date of Last Submission: | 30 January 2018 |
| Delivered at: | Launceston |
| Delivered on: | 8 March 2018 |
REPRESENTATION
| The Applicant appeared in person |
| Counsel for the Respondent: | Ms K Mooney |
| Solicitors for the Respondent: | Feeney Family Law |
ORDERS
That within forty-two (42) days of the date of these Orders the husband notify his election in writing to the respondent’s solicitors as to whether he intends to take title to the entirety of the property situate at Property A in Tasmania and, if so, then he make a lump sum payment of $282,108 to the respondent’s solicitors within a further period of twenty-eight (28) days and contemporaneously with such payment the respondent’s legal representative(s) sign all documents so as to transfer the respondent’s interest in the property at Property A in Tasmania to the applicant.
That provided that should the applicant not make an election to retain the Property A property then:
i)The applicant husband have sole use and occupation of the property until:
(a) The applicant’s death; or
(b) The applicant permanently vacating the property; or
(c)The applicant and the respondent’s legal personal representative(s) agreeing to sell the property.
ii)Provided that the applicant be solely responsible for payment for the property of all council rates, utilities and household and building insurances and maintain the property in a tidy, clean and proper state of repair.
That upon the activating of any of the situations in Order 2(i) hereof, the property at Property A in Tasmania be sold on terms as agreed between the parties and at a price agreed between the parties and failing agreement then as directed by the delegate of the President of the Real Estate Institute of Tasmania and the proceeds of sale be disbursed as follows:
i)To payment and reasonable costs and disbursements on the sale; and
ii)The balance in accordance with and to give effect to these Orders generally being as to 55% of the net tangible assets to the applicant husband and 45% of the net tangible assets to the respondent’s estate.
That the applicant forthwith transfer and/or vest all his right, title and interest in the following to the respondent’s personal representative(s) absolutely:
i)The benefit of the outstanding loan to Mr T; and
ii)All personalty, chattels, balances of any bank accounts or like investments, motor vehicles and superannuation entitlements in the name of or to the benefit of the respondent as at the date of these orders.
That the respondent forthwith transfer and/or vest all her right, title and interest in the following to the applicant absolutely:
i)All personalty, chattels, balances of any bank accounts or like investments, motor vehicles and superannuation entitlements and shareholdings in the name of or to the benefit of the applicant as at the date of these orders.
That each party be solely responsible for and indemnify the other in respect of the following liabilities:
i)Any and all liabilities attaching to any of the assets retained by that party pursuant to these orders; and
ii)Any and all liabilities incurred by that party since separation in either joint names or in that party’s name alone.
That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
IT IS NOTED that publication of this judgment under the pseudonym Truman & Truman is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT LAUNCESTON |
LNC 616 of 2016
| MR TRUMAN |
Applicant
And
| MS TRUMAN (DECEASED) (THROUGH CASE GUARDIAN MR A) |
Respondent
REASONS FOR JUDGMENT
Applications
These are competing applications for property settlement commenced on the husband's application Initiating Proceedings filed 2 December 2016. The respondent wife passed away on (omitted) 2017 and her case is continued by her personal legal representatives through her previously appointed Case Guardian, Mr A.
The applicant husband represents himself before this Court. He has previously enjoyed legal representation apparently up to the stage of assistance with the preparation of his trial material. Mr Truman conducted himself in an efficient and courteous manner albeit understandably struggling with the forensic complexities of this matter and of cross-examination. The Court offered Mr Truman a detailed explanation of the procedure of the trial, together with an invitation to request assistance with procedure at any stage[1].
[1] Re: Litigants In Person Guidelines (2001) FLC 93-072
The respondent was represented by solicitors and Counsel.
The Issues
There is substantial factual agreement between the parties with the issues being readily identifiable, discrete and as follows: –
i)The husband argues a superior initial contribution where he says that he brought some $2.4M into the relationship being a substantially superior initial contribution to that of the wife. The respondent argues that the parties’ initial contributions were closer to equal and should be given no discrepancy as to weight in a relationship of some 17 years.
ii)The parties remain the joint owners as tenants-in-common in equal shares of a property at Property A in Tasmania now with an agreed value of $625,000. The respondent proposes that the husband retain life interest or sole use and occupation of the respondent’s half interest in that property pending the husband's passing or other intervention and the property then be sold with the balance proceeds been divided as to 50% to the husband (or his estate) and 50% to the wife's estate. The husband seeks an immediate transfer to him of the respondent’s 50% interest in that property.
iii)The parties agree that the respondent retains a (omitted) bank account with about a balance of $238,403. The husband argues for a transfer of $100,000 from that account to him. The respondent says that the wife's estate should retain the balance of those monies in the ultimate property distribution.
iv)As of the date of the wife's passing, the husband had a share portfolio comprising of conservative Australian stock with a value in August 2017 of approximately $184,599. He concedes that he unilaterally disposed of that portfolio and in turn purchased shares through a (country omitted) broker in (country omitted) stock such that he says have now been lost in the entirety of their value. He says that he has been the victim of a scam and that the investment is not recoverable. The respondent argues for an 'add-back' of the initial value of $184,599 into the pool and such to be applied to the husband's entitlement. The respondent argues on the basis of reckless dealings with an asset broadly under the principles in Kowaliw v Kowaliw[2].
v)There was at the commencement of the trial of some argument between the parties as to the value of their respective jewellery. No valuation evidence has been adduced and no inventory provided to the Court. Final submissions for each of the parties indicated a consensus that it was not possible for the Court to make findings and determinations in respect of jewellery.
vi)The husband asserts generally that the wife retained monies of approximately $790,000 for her own benefit from the profits of the parties’ Queensland (omitted) business and/or the sale of assets. Within this argument he also asserts that the wife provided her daughter, Ms B, with jointly owned monies in a quantum of $125,000 - $160,000 in order to reduce Ms B’s mortgage secured by her home at (omitted), in Queensland. The respondent denies firstly that the wife improperly retained any joint monies for her own benefit and concedes an advancement from joint funds to Ms B but that the monies loaned which were less than claimed by the husband, have been repaid in full.
vii)There is an issue as to whether there should be an adjustment for the husband, after consideration of contributions, in respect of the relevant section 75 (2) factors.
[2] (1981) FLC 91 - 092
Background Facts
The applicant husband is now 79 years of age.
The parties commenced a relationship in about (omitted) 1999. They married in (omitted) 2000.
The husband is retired. During the course of the marriage the parties operated a (omitted) farm business at locations in Queensland.
At least in the early period of the marriage the wife was employed at the (employer omitted), Queensland.
In about 2005 the parties purchased a block of land at Property A in Tasmania. A residence was built on that land and now has an agreed value of $625,000.
During the operation of the (omitted) farm business, primarily on land at Property B, the parties purchased a further property at Property D near to the Property B property. Appropriate planning approval was never granted in respect of that property and it was eventually sold.
During the course of the relationship the parties purchased a cottage in (country omitted). That property has since been sold. The parties purchased an aeroplane. The aeroplane has since been sold. The parties have purchased various luxury vehicles including a (omitted) motor vehicle which has since been sold.
In June 2015 the Property B property was sold for a sale price of $7,250,000. There remains some dispute as to the extent of and whereabouts of any at balance proceeds of sale after payment of liabilities.
In or about 2013 the husband says that he took 'a step back’ from the day-to-day operations of farm and agreed to lease the farm to a farm manager, Mr R. It is generally agreed that the lease arrangement was a financially unsuccessful enterprise for the applicant. Also in 2013 the husband suffered some illnesses and attempted suicide. It is agreed that the wife then took on the primary responsibility for management of the (omitted) farm business whereupon the husband spent the majority of his time at the property at Property A.
The Property D property was sold in 2016 for $1 million (gross).
The parties separated in about November 2016. The husband says that he was ejected from the Property A property. In any event, he took up rental accommodation in Launceston. The wife remained in residence in the Property A property.
In late 2016 the wife was diagnosed with (illness omitted). She passed away on (omitted) 2017.
An acquaintance of both parties and a former business partner of the husband, Mr A, financial adviser of Queensland, had been appointed Case Guardian for the respondent wife. After the wife's death, Mr A effectively continued in that role under the auspices of the personal legal representatives of the wife pursuant to orders made by Justice Benjamin in the Family Court on 11 April, 2017 and then by myself, after the wife's death, on 23 May 2017.
The husband continues to live at Property A. He is retired. His financial statement discloses an income from the aged pension together with some income from a marina berth in Queensland and an irregular (omitted) business from his Property A home.
The Evidence
The husband relied on his affidavit and financial statement both sworn 14 December 2017. He was cross-examined.
Mr Truman presented as an honest witness. He was, however, and from my observations, limited to a large degree by the financial complexities of this matter. The primary affidavits for the respondent being those of Mr A who is a financial and property adviser and Mr H who is a chartered accountant and company director were both resplendent in financial detail and forensic tracing of the history of this marriage. Each of those affidavits had attached copious financial documents. Mr Truman was, not surprisingly, at times overwhelmed by the detail and expertise of Mr A's evidence, in particular. He did not choose to cross-examine Mr H.
The respondent also relied on affidavit of the late wife's son, Mr T. Mr Truman did not seek to cross-examine Mr T whose evidence essentially corroborates the detailed evidence of Mr A and Mr H. In respect of one contentious issue, Mr T deposes at [25] and this evidence is unchallenged:
Between 18 and 20 January, 2017 my mother transferred $125,824.38 to me which I placed on a mortgage offset account to hold for my mother's needs and directions. Annexed hereto and marked with the letters ‘T-2’ is a true copy of a statement page from my mother’s (omitted) Bank Account from January 2017 showing the transfer of these funds to me in three transactions.
Since my receipt of these funds I have used some of them for legal expenses incurred in relation to this matter, however apart from that the balance of the monies transferred to me by my mother remain untouched.
The respondent also relies on affidavit of Mr P sworn 21 December 2017. Mr Truman did not cross-examine Mr P.
Mr P gives evidence consistent with the detailed evidence of Mr A. Mr P’s unchallenged evidence at [6] is:
Towards the end of 1995 Mr Truman contacted to see if he could stay with my wife, Ms S, and me. He told me that he had been having financial difficulties with his businesses and that he and Ms R had had to sell their houses at (omitted), and that Ms R had left him and he had no money and nowhere to go.
My wife and I allowed Mr Truman to move in with us and he stayed with us free of any rent for a period of around six weeks while he worked out what to do next.. By then, I think he had disposed of the (omitted) businesses was trying to develop a land subdivision at (omitted), north of Brisbane, but the market was bad, and it wasn't going well, and he had no spare money.
Mr P asserts that he advanced a sum of $75,000 by way of loan to Mr Truman in mid-1996. He also confirms a loan to Mr Truman from a Mr D.
At [21-22] of his affidavit Mr P’s unchallenged evidence is:
After that I didn't call him for a while, but by about 2001 I needed the money myself, so I started calling him again. Then at some point in 2002 he did return the sum of $50,000 to me. I now understand that the property was actually sold in June 2002 and I think Mr Truman's payment of the $50,000 would have been after this.
I understand from sales records information provided to me recently that the Property C property was purchased by (omitted) at $1.05 million in 1996 and sold for $1.10 million in 2002. The land was vacant so there was no income from it, however Mr Truman had undertaken that (omitted) would pay all interest and outgoings on the property pending development or sale. Therefore, according to my calculations, even after allowing costs of sale, there ought to have been enough surplus left on the sale to repay both my investment and that of Mr D in full. However, as I've said, I received only $50,000 after repeatedly pressing Mr Truman, and Mr D later told me that he had received nothing from the sale and when I last spoke with him a couple of years ago he told me that he had still received nothing.
Mr H’s affidavit of 5 January 2018 is unchallenged by Mr Truman. Mr H deposes that he was instructed by the respondent to complete a financial review and prepare a report of the net financial position of the parties as at 30 September 2013 and 30 June 2016. His report is comprehensive and detailed. He provides corroborative and explanatory documents supporting his calculations and conclusions. It is clear that Mr H's evidence grounds the respondent’s view and argument as to the property pool for this Court’s consideration.
Mr A was an impressive witness. In cross-examination by Mr Truman, Mr A impressed as non-partisan and sympathetically understanding of the difficult role he has assumed in this matter where he has clearly been an acquaintance, adviser and, at times, business associate of the parties. I detected only objectivity in Mr A’s evidence and in his responses to Mr Truman’s cross-examination. At times Mr A was able to make appropriate concessions during cross-examination and his presentation was more in line of that of an independent expert witness than of an interested party. Generally, I accept Mr A's evidence and, where in conflict with that of Mr Truman, I prefer Mr A's evidence by reason of its detail at informed nature supported, as it is, by copious corroborating documents.
Relevant Law
Matters involving property settlement are provided for in the Family Law Act 1975 (‘the Act’) at section 79.
Section 79 (2) provides that the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The High Court in Stanford & Stanford[3] confirmed that trial judges are to make this determination separately from and not conflated with the contribution considerations in s.79(4). In this matter, however, the parties retain jointly owned assets of significant value. The separation of the parties well before the death of the respondent satisfies me that the relationship was at an end. Consequently, I am easily persuaded that it is just and equitable to alter their property interests on a full and final basis.
[3] (2012) 247 CLR 108
The process for the Court is firstly that of establishing the property pool. “Property” comprises of assets, liabilities and financial resources of the parties and each of them. It is generally seen to do justice and equity in attributing value to the property pool as at the date of the trial.
The Court is then to consider the contributions of the parties to the acquisition, conservation or improvement of any of the elements of the property pool. The relative initial contributions of the parties should be determined and weight attributed. Contributions during the relationship might involve direct or indirect financial contributions and contributions of a non-financial kind including as homemaker or parent. Any contributions made post-separation are also to be considered.
After considering the contributions, the Court will then determine whether any further adjustment between the parties is just and equitable on a consideration of the factors set out in section 79 (d)-(g) and any of the relevant factors in s.75 (2) of the Act, including but not limited to matters such as the ages, needs and earning capacities of the parties. Obviously, the demise of the respondent in this matter would not give rise to any such considerations on her case.
Underpinning the entire process is one of justice and equity with the Court being required to 'stand back' and then consider whether the proposed orders do justice and equity between that the parties[4].
[4] Russell v Russell (1976) 134 CLR 495
Issues of disputed fact and credit not unusually highlight the dispute now before this Court. It follows that the Court is charged with making findings of fact and credit and to do so on a standard of proof of “on the balance of probabilities”.[5] The Court is assisted in making these findings by having the benefit of seeing and hearing the parties and witnesses give their evidence and be cross-examined. It remains, however, that a party making an assertion of fact carries an onus to prove that assertion on the balance of probabilities. A party carries no onus to disprove an assertion or allegation.
[5] Evidence Act 1996 (Cth), s.140
The Property Pool
By the time of the trial in this matter the extent and value of the property pool was substantially agreed between the parties. There do, however, remain some issues in dispute as follows: –
i)The husband's share portfolio.
These proceedings were commenced on the husband's application in December 2016. At that time his sworn financial statement disclosed a share portfolio with a value of E$160,000. Later enquiries in the process attributed a precise value of $184,599.
At [60-61] of his affidavit of 14 December 2017 the applicant deposes:
On the 22 April, 2016 the sale of the property at Property D, in Queensland was completed. The property was sold for sale price of $1,000,000. After payment of the amount required to discharge the (omitted) Bank mortgage loans secured on the title to the property I received a cheque for the sum of $121,976.87 and a further cheque from the solicitors acting on my behalf in respect of the sale, namely Shand Taylor Lawyers for the sum of $58,995.69. Both sums were paid to the credit of my (omitted) Bank account no. (omitted).
I have subsequently used to those funds to meet my reasonable living expenses and also to acquire shares in publicly listed companies. I have also sold shares. Unfortunately I purchased shares in an investment in (country omitted) utilising funds in the sum of approximately $140,000. It would appear that that investment has been lost. I have made appropriate enquiries with ASIC and with the Police in (country omitted). As yet it is unclear whether or not I will be successful in realising my investment.
The respondent passed away in (omitted) 2017. These proceedings were commenced in December 2016. The evidence suggests that some time between February and September of 2017 the applicant unilaterally realised his then share portfolio and purchased shares through a (country omitted) broker in (country omitted) stocks. The investment was lost and the applicant claims to have been the victim of a scam. I accept that evidence.
It is clear and conceded that he acted unilaterally without notice to the respondent and did so during the course of Family Law proceedings being on foot.
The applicant says that he acted in good faith and with an obvious intention of maximising the return on his share investment. I do not doubt his intentions or ambitions.
The respondent relies on the well-known judgment of Baker J in Kowaliw & Kowaliw[6] where his Honour said at [10-11]:
I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets;
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised of their value.
Conduct of this kind referred to in para. (a) and (b) above having economic consequences is clearly, in my view, relevant under sec 75 (2)(o) to applications for settlement of property instituted under the provisions of sec, 79.
[6] (1981) FLC 91-092
Despite his Honour’s reference to such matters being considered, if appropriate, under s.75 (2) (o) of the Act, Counsel in the matter now before me urges me to make an “add-back” of the monies lost by Mr Truman. There has been much judicial debate as to the appropriateness of “add-backs”. A detailed exposition of that debate is set out in my own recent judgement in Newbold & Chadwick[7]. Suffice to say that I am comfortably satisfied that either option remains within my discretion if, of course, I consider the husband to have acted negligently, recklessly or wantonly in the sense considered by Baker J in Kowaliw.
[7] [2018] FCCA 273 @ [19-27]
It is a well-established practice (if not principle) that once litigation is commenced in respect of financial matters then the parties have an obligation to preserve the property pool or, more particularly, not to unilaterally deal with that property pool without the consent of the other party. It is agreed in this matter that the husband acted at a time that the litigation had been commenced and was proceeding through its interlocutory stages. The husband was represented at this time and presumably was able to obtain appropriate advice if he intended to act in any way in respect of the contents of the property pool. I am not told whether or not he consulted even his own solicitor about his intentions to crystalize the asset and reinvest it but I am comfortably able to assume that he did not. I am satisfied that Mr Truman did not consult his wife or her solicitors.
Whilst I might not doubt the positive intentions of the husband, I am satisfied his behaviour was generally speculative. Further, and whilst the respondent would undoubtedly have claimed the benefit of any profits made by the husband, it is the husband's behaviour itself which is under consideration. The husband acted unilaterally. He did so during the course of litigation. He crystallised a secure and agreed asset and converted it into a speculative prospect and which ultimately failed. I am comfortably satisfied, therefore, that the husband acted 'recklessly' in losing the entire value of the asset namely the share portfolio which in about mid 2017 had a value of $184,599.
To my mind, whether or not my discretion is exercised by way of an “add-back” or consideration under s.75 (2) (o) matters little. This is not a matter, however, with relative considerations to contributions in respect of a discreet act by the husband. This is not a situation of any consideration of expenditure being for “necessary” or “reasonable support”[8]. Consequently, I think it 'cleaner' to simply add-back the sum of $184,599 to the pool, which, of course, will be deemed to be an asset in the hands of the husband although no longer technically in existence.
[8] Omacini & Omacini (2005) FLC 93-218
ii) Monies allegedly retained by the wife.
The husband claims that the wife had retained monies of approximately $790,000 for her own benefit and secreted them away from the Courts consideration. He says that she obtained these monies during a period that she operated the parties’ (omitted) business and from the sale of assets.
Mindful of the husband not being represented and apparently not having qualifications in accounting, it remains that he has made this assertion without any probative evidentiary support. His trial affidavit discloses the following:
[53] In or about 2013 I became unwell. I was severely depressed and I attempted to take my own life. I subsequently was hospitalised for a short period and received treatment.
[54] Subsequently in or about mid 2015 Ms Truman who was then at the Farm telephoned me to say that she had located a purchaser of an aircraft for $50,000. The aircraft was sold for that sum but I am unaware as to what Ms Truman did with the proceeds of sale.
[55] From in or about mid 2014 and during the subsequent years until its sale Ms Truman insisted that she would 'run the farm' whilst I was residing at the Property. Ms Truman had never been involved in the operation of the Farm in any hands-on way nor had she any direct financial control the Farm. Ms Truman excluded me from the day-to-day operations or financial decisions of the Farm during that time.
[56] Ms Truman was quite insistent that I not return to the Farm while she was “in charge” and she relied upon the Case Guardian Mr A for advice for the running of the Farm and its ultimate sale on the 29th of June 2015. The sale price was $7,250,000. I am unaware of what were the balance proceeds of sale of the Farm but I accept the bulk of the proceeds of sale would have been required to discharge the liability to the (omitted) Bank
[57] Ms Truman was in charge of the sale in consultation with Mr A. I had agreed to Ms Truman being an alternate director or (sic) (omitted) Pty Ltd and she remains such a director. I am the other director of the Company.
[58] Ms Truman would not agree to me travelling to Queensland to help her move out of the Farm and the residence.
[59] Ms Truman told me that on her vacating the Farm she disposed of all our financial records which I had stored at the Farm, such records including records of my financial affairs from prior to the commencement of our relationship up to and including the sale date of the Farm
[60] On 22nd of April 2016 the sale of the property at Property D, in Queensland was completed. The property was sold for a sale price of $1,000,000…
[62] Discovery documentation provided by the Respondent reveals that the sum of $414,207.64 was deposited to the credit of Ms Truman's (omitted) Bank Account No.. (omitted). I have no idea where those funds come from.
[63] On the 1st of November 2016 the sum of $270,000 was transferred from the above account to Ms Truman's (omitted) Bank Account No. (omitted)…
[64] On the 3rd of January 2017 the sum of $140,490 was transferred to the credit of Ms Truman's (omitted) Bank Account No.. (omitted). I have no idea where those funds came from.
The husband “being unaware” of the use of proceeds of sale does not constitute proof of the wife’s inappropriate dealing with these monies.
Mr H, chartered accountant, provided an affidavit. Mr Truman chose not to cross-examine Mr H. Mr H's affidavit has no less than 341 pages of annexures being, in my view, a comprehensive audit of the parties’ finances. Specifically, Mr H sets out in detail the disbursement of the proceeds of sale of assets. Mr Truman did not choose to challenge Mr H’s financial accounting of the parties finances.
The Case Guardian, Mr A, also provided a lengthy and comprehensive affidavit. His document contains some 344 pages of annexures. He confirms at [59]:
Ms Truman assumed control of the Property B farm operations in August 2013 following Mr Truman’s attempted suicide and abandonment of the farm. At this time, and for at least a year after, Mr Truman was severely depressed and unable to cope with anything to do with the farm or any business matters.
…
In the context of financial decisions, (omitted) business was at this time being kept afloat only by the goodwill of (omitted) Bank. (omitted)’s approved overdraft facility limit with (omitted) Bank was $300,000. By 29 June 2012 the amount drawn (without approval) had increased to $440,000. By 29 June 2013 this and increased further to $689,000 and by 28 March 2014 to $1,000,008. From August 2013 when Ms Truman took over management of the farm with my assistance, trust and goodwill was gradually rebuilt through Ms Truman's openness and determination to turn the financial position around and meet all commitments. Excluding Mr A from any involvement with (omitted) Bank was essential to maintaining this positive relationship.
At [71] of his affidavit Mr A deposes:
I dispute the assertions in paragraph 48 that any funds passing through Ms Truman's hands between 2013 – 2016 were or could have been used or applied by her for her own personal benefit. In the early days following Ms Truman's assumption of control of the farm business (August–December 2013) it was uncertain whether (omitted) Bank would agree to the debt standstill and work-out arrangement I was formulating. It was impossible to (omitted) Bank accounts since (on advice of the responsible bank offices) any funds deposited to those accounts will automatically be applied to reduction of debt …
Put simply, the applicant, Mr Truman, makes an assertion of fact that his wife retained some $790,000. I am not satisfied that he has proven this assertion on the balance of probabilities. I am satisfied generally that Mr A and Mr H provide explanations supported by documents contrary to that assertion posed by Mr Truman. Further, it is clear that Mr Truman himself was absent from the farm and suffering depression and suicidal ideation at the relevant time when the wife took over management of a financially troubled enterprise and with the assistance of Mr A. On the balance of probabilities, therefore, I cannot make a finding in the terms of the husband's assertions.
(iii)The parties’ jewellery.
I have no inventory of jewellery. I have no valuation. As such, I cannot include any item for 'jewellery’ in a property pool.
(iv)Balance of husband’s (omitted) Bank account.
There is a further minor dispute between the parties being as to the balance of the husband's (omitted) Bank account. Strangely, the husband provides a higher value of $57,957. The respondent offers a value of $41,504. On the basis of the respondent having more detailed financial documents, I accept that valuation (which would not seem to disadvantage the husband).
(v)Loan to Mr T.
There is no dispute that the wife advanced the sum of $125,824 to her son, Mr T. His evidence concedes the advancement. He says that a part of those monies have been put to legal costs of the respondent. The authorities consistently agree that such expenditure should be “added back” to the pool. Mr T retains the balance. It is proper, therefore, to include the total advancement of $125, 824 in the pool.
Consequently, given other agreement as the property pool, I find the pool to comprise the following:
Property A
625,000
Marina berths, (omitted) Queensland
65,000
(motor vehicle)
18,000
(motor vehicle)
9,500
(motor vehicle)
7,000
Mercedes (omitted)
10,000
Mercedes (omitted)
14,000
(omitted) van
6,000
(omitted) motorcycle
14,000
(omitted) motorcycle
7,000
(omitted) motorcycle
8,000
(omitted) Trailer
13,000
(omitted) Bank account (H)
41,504
(omitted) Bank account (W)
238,403
Share portfolio (add-back)
184,599
Chattels, Property A home
32,470
Storage items (furniture & paintings)
2,000
Collectors registration plates
15,000
Loan to Mr T
125,824
TOTAL
1,436,300
There are no superannuation entitlements.
Contributions
The major issue here is the husband's argument as to an initial contribution by him of $2.4 million. The respondent says that the initial contributions were closer to equal at around $300,000 each.
The husband's says in his trial affidavit at [30]:
At the date of cohabitation the Company and/or I had the following:
Assets:
(a) Property B, Queensland (‘the Farm').
(b)Property C, Queensland, having a value no more than its purchase price of $1,050,000.00.
(c)Proceeds of a (omitted) loan No. (omitted) which had initially been borrowed to assist with the subdivision and at the date of separation were approximately $173,458.00.
(d) Plant and equipment, total value not known.
(e)Holden utility motor vehicle, value approximately $20,000.00.
(f)Bobcat, value approximately $30,000.00 which was subject to finance.
Liabilities:
(a)(omitted) Bank Loan No. (omitted), with respect to Property C, $660,000.00.
(b) Loan from Mr D, $90,000.00.
(c) Loan from Mr P, $70,000.00.
(d)Subdivision loan from (omitted), being loan No. (omitted), $200,000.00.
(e)(omitted) loan in respect of the cost of construction of (omitted) sheds and other infrastructure, being Loan No. (omitted), $710,000.00.
(f)(omitted) Loan for the cost further infrastructure for setting up the (omitted) farm on the F, being Loan No. (omitted), $219,000.00.
The parties now agree that the loan from Mr D was $120,000 and the loan from Mr P was $75,000. Whilst Mr Truman was candid in him agreeing in cross-examination as to these errors in his affidavit, they do demonstrate a lack of detailed recall by him of particular financial matters.
Mr Truman asserts that he brought a net $2.4 million into the relationship. On his own evidence of assets of value $1,273,458 (not including Property B) and liabilities of $1,949,000, I calculate that the Property B property listed above and to which Mr Truman does not attribute a value, must have been valued at approximately $3.1M He produces no corroborative evidence. I accept, however, as asserted at [24) of Mr Truman's affidavit:
This property (Property B) was part of a larger block of land purchased by the Company in or about 1994. That larger parcel constituted approximately 1,000 acres a significant part of which was sold by direction on the date of settlement to neighbouring farmers and the remaining about 240 acres was the subject of a subdivision undertaken by the Company.
I accept that a subdivision took place and blocks were sold. I also accept that improvements were made on that portion of the retained land and known as the (‘the Farm’).
The respondent in the affidavit of Mr A asserts at [7] that after the demise of his first marriage, Mr Truman:
… Mr Truman had very limited capital to my knowledge and had nowhere to live. He has not disclosed evidence of his capital at this time or details of a property settlement to show his financial position after settlement. I am aware that at this time, he approached another friend of mine, Mr P (who I had introduced to Mr Truman some years before), and arranged to move in with Mr P and his wife Ms S for several weeks in late 1995. I note Mr P has filed an affidavit in these proceedings.
Between 1996 and 2000 I stayed in touch with Mr Truman, although I did not see him as frequently as before. He would sometimes come to my office in Brisbane City and talk through plans and numbers on projects he was looking at, to bounce them off me and get my input. I know from what he told me at that time that he had lost a lot of money in his ventures and in the divorce with Ms R, and that he was trying hard to rebuild his financial position.
… I spoke on Mr Truman’s behalf to an associate,… a major Queensland landowner, who had holdings in the region near (omitted) where Mr Truman was searching for a suitable farm location. Mr E agreed to enter into an agreement with Mr Truman to sell him a property he owned at Property B … Subject to approval to subdivide the Property B property and transfer of the (omitted) farming licence from Property C.
Mr Truman showed me the proposal he intended to take to (omitted) Bank for financing the subdivision of the Property B property and the development of one of the parcels for a new (omitted) farm. In meetings at my office at (omitted), Brisbane, he ran through all the numbers with men sought my advice and his plan. Although the scheme seemed ambitious, and despite Mr Truman’s lack of capital and experience in this field, I saw Mr Truman as a hard worker and an imaginative entrepreneur I knew he was highly motivated to regain the financial position he had lost, so I helped him where I could in the presentation of his numbers and in the end he was successful in getting the finance he required for the project.…
During this period (2000) Mr Truman’s earnings and distributions from the Property B farm were very modest as evidenced by (omitted)’s tax returns for the period 1999-2001. Annexed hereto and marked with the letters “A-2a; 2b; 2c” are true copies of (omitted)’s tax returns for 1999, 2000 and 2001.
Importantly, at [44] of his affidavit Mr A deposes:
I accept the contents of paragraph 23 (of the husband's affidavit) save that they are not entirely correct. At the time Mr Truman and Ms Truman commenced their relationship, (omitted) business was also the registered owner of Property B, They had been part of the subdivision referred to in the discussion of paragraph 24.T they were sold in in 1 August 1999, 21 March 2000 and 15 January 2001, respectively. This information has been obtained by searches. I understand from my discussions and dealings with Mr Truman at the time that these properties were fully encumbered under a loan facility with (omitted) Bank. Annexed hereto and marked with the letters A – 15 is a true copy of a historical search of Queensland property transactions registered to (omitted)’s name.
On consideration of all of the evidence available to me, I am unable to find that Mr Truman simply brought an asset into this relationship presumably with a value of in excess of $3.1M. I do accept, however, that he purchased Property B in about 1996 and prior to the commencement of the relationship with the respondent wife. I note, however, Mr Truman’s disclosed high debt situation as at the commencement of the relationship. I accept that this property was later partially subdivided and blocks sold. I accept that the property was substantially improved. I accept that the property provided a venue for the operation of the parties’ (omitted) business which was, for some time at least, a financially successful enterprise. It seems clear, however, that the successful business and the improvements occurred, at least in large part, during the course of the relationship. Nevertheless, I am satisfied that Mr Truman pre-cohabitation ownership of the Property B property provided at an impetus for the financial success of these parties at times during their relationship, although I am not able to quantify with any precision its net value as at the date of commencement of cohabitation. I am, however, comfortably persuaded that the Property B property represented some real value to the parties although I cannot find that Mr Truman entered this relationship with nett assets of $2.4M or $2.1M more than the wife. I accept, nevertheless, that in broad terms, Mr Truman bought in assets of a greater value than did the wife. I also take into account that this relationship commenced some nineteen years ago and that there have been many and varied contributions by these parties in the subsequent years including the improvements to Property B. I am satisfied therefore, that Mr Truman should be given some credit for this initial contribution.
I am satisfied otherwise that the parties both worked hard for their mutual benefit throughout the relationship. At times they each enjoyed the considerable material benefits from their labours and investments. The wife also made a contribution, and arguably a superior one, during a time when the husband was incapacitated by mental illness, and when she took over the onerous running of the (omitted) farm. The evidence of Mr A is that the wife's financial aptitude caused some ultimate benefit to both parties.
Taking all matters of contributions into account but with some emphasis on what I find to be the ‘trigger value' of the Property B property owned by the husband prior to cohabitation, I would adjust the parties’ property interests as to 55% to the husband and 45% to the respondent on the basis of contributions.
Section 75 (2) Factors
Mr Truman is now 79 years of age. He lives in the unencumbered Property A home. His sworn financial statement discloses an income which meets his weekly expenses. He has no ongoing substantial liabilities. Put simply, his needs are met by his income and assets.
No argument can be mounted for any adjustment to the respondent by reason of s.75 (2) of the Act.
There is one further matter which I think properly dealt with under s.75(2) (o) of the Family Law Act being “other circumstances”. The husband asserts at [68] of his trial affidavit as follows:
In or about February 2016 Ms Truman told me that she had gifted her daughter Ms B approximately $125,000.00 which Ms B had used to reduce the mortgage loan secured on the title to her home at (omitted), in Queensland.
Neither party bought Ms B to Court. I have before me no bank statements which can unequivocally support such an assertion of advancement to Ms B. However, at [76] of his affidavit, Mr A deposes:
I dispute the assertions in paragraph 68. Both Ms Truman and Mr Truman told me at various times that they had loaned Ms Truman’s daughter, Ms B, $60,000 to help her buy a house at (omitted). I understand from property records that Ms B and her partner Mr M acquired the property at (omitted), on 18 September 2009. Ms Truman advised me that Ms B repaid this money to her sometime in 2013. At the time Ms Truman came to Brisbane to try and save the farm in August 2013 she had $45,000 in her personal bank account which she advised she was prepared to commit to trying to turn the situation around. When I asked her where these funds came from she advised me that they were what was left of the loan Ms B had repaid to her a few months before.
Consequently, I am unable to determine the exact quantum of any monies advanced to Ms B and given that the applicant himself varies in his assertions between $125,000 – $160,000. I am not assisted in that neither party saw fit to bring Ms B to Court to establish the quantum of the monies advanced; whether the monies were a loan or a gift; and the extent and timing of repayment. At best, therefore, I can be satisfied only that some monies were advanced to the wife's daughter from joint funds. Given my general preference for the precision of Mr A’s evidence over that of Mr Truman by reason of his better recollection and informed corroboration, I accept his evidence as to the repayment of the loan.
On consideration of all the matters under s.75(2) of the Act, I do not intend to make any further adjustment to either party after my findings on the basis of contributions.
Conclusion
Consequently, I am satisfied that it would be just and equitable to alter the parties’ property pool are set out above as to 55% to the husband and 45% to the wife's estate. I calculate the pool having a value of $1,436,300. 55% would give the husband a dollar value of $789,965. Mr Truman wishes to retain the Property A property in its entirety. If he did so then he would be retaining all of the assets listed above save and except the wife's (omitted) Bank account ($238,403) and the wife's loan to Mr T ($125,824). He would therefore be retaining assets of $1,072,073 and hence requiring a cash adjustment by him on the respondent of $282,108. I propose to give Mr Truman the opportunity to make this payment and thereby retain the title to Property A. I have some doubt, however, as to whether a bank will accommodate him at his age and limited income. If, therefore, he is unable to commit to such a payment within 42 days of the date of these orders then I see no option other than to make orders in the terms of those sought by the respondent which would provide:
i)That Mr Truman have sole use and occupation of the Property A property;
ii)That he pay all rates, utilities and household building and contents insurances as they fall due and keep the property in a tidy, clean and proper state of repair;
iii)That upon the husband's death or, alternatively, agreement between the parties for the property to be sold then it be sold with the net proceeds of sale to be distributed in accordance with these orders generally.
That is, given his age and circumstances, the husband can benefit by continued occupation in the home. However, if wishes, prior to his own death, to move from the home then there will be provision for its sale and distribution of proceeds.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Date: 8 March 2018
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