WAKELEY & WAKELEY
[2018] FCCA 3707
•18 December 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WAKELEY & WAKELEY | [2018] FCCA 3707 |
| Catchwords: FAMILY LAW – Property – where each party seeks orders for property distribution after the breakdown of their marriage – where the parties previously entered into property adjustment orders by consent in 1998 – where the husband was made bankrupt during the relationship – whether wife gifted half-share in parents’ property during relationship – where wife has five siblings – whether wife purchased siblings’ share of parents’ property – where the Court found the wife had paid all her siblings for their respective shares of parents’ property – where final property adjustment orders made for wife to receive 62% of net asset pool and husband to receive 38%. EVIDENCE – Where witnesses provide Affidavits in substantially identical terms – where party involved in preparation of witness’s Affidavit – whether evidence devalued. FAMILY LAW – Addendum – Correction of the Reasons for Judgment pursuant to r 1.05 of the Federal Circuit Court Rules 2001 (Cth) & r 17.02A of the Family Law Rules 2004 (Cth). |
| Legislation: Family Law Act 1975, ss.75, 79, 79A, 106A, 117 |
| Cases cited: ASIC v Hellicar (2012) 247 CLR 345 |
| Applicant: | MS WAKELEY |
| Respondent: | MR WAKELEY |
| File Number: | SYC 1927 of 2015 |
| Judgment of: | Judge Harper |
| Hearing dates: | 19 & 20 March 2018 |
| Date of Last Submission: | 19 April 2018 |
| Delivered at: | Sydney |
| Delivered on: | 18 December 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dura |
| Solicitors for the Applicant: | Linden Legal |
| Counsel for the Respondent: | Mr Othen |
| Solicitors for the Respondent: | Whitfields Solicitors |
Orders amended pursuant to r 16.05(2)(e),(g) & (h) of the Federal Circuit Court Rules (2001)
ORDERS
That the orders made by the Court in proceedings SY5324 of 1997 in the Family Court of Australia dated 30 January 1998 and made on 14 February 1998 be set aside pursuant to Section 79A(1) of the Family Law Act 1975.
Within 60 days the wife shall pay to the husband the sum of $541,707.
If the wife fails to comply with order 2, the wife shall forthwith:-
(a)take all necessary steps and execute all necessary documents to cause Property A to be sold by public auction with such agent as the wife shall appoint at the earliest convenient date and in any event not later than 10 weeks from the date of the making of these Orders at a reserve price recommended by the agent and the proceeds of the sale shall be distributed as follows by her:
(i)Payment of agent’s commissions and advertising expenses and legal expenses of the sale;
(ii)Payment of any money due and owing to the mortgagee;
(iii)The sum of $541,707 plus interest calculated on a daily basis in accordance with the rate prescribed by the Family Law Rules2004 from the due date under order 2 to the date of payment;
(iv)In the event Property A sells for a price in excess of $1,800,000:
a.38% of the amount by which Croydon sells in excess of $1,800,000 to the husband.
b.The balance to the wife or as she may direct in writing.
(v)In the event that Property A is sold pursuant to these orders, and the sale price is less than $1,800,000, the net proceeds of sale shall be divided so as to cause the wife to receive 62% and the husband 38%.
(b)do all acts and things, including paying all monies, signing all documents necessary, and, if necessary, making any necessary Application to the Supreme Court of New South Wales, to cause the Caveats lodged against the title of Property A by Mr A and Ms B (“the siblings”) to be removed from the said title by no later than the date of settlement of and sale of Property A pursuant to this order.
The wife shall vacate Property A by no later than the date of settlement of the sale of the property pursuant to these orders.
That the parties forthwith do all acts and things and sign all documents necessary to cause the framed [products/collectibles] in the possession of the wife to be sold by public auction for the best price reasonably obtainable by [auctioneer] with no reserve price set, and divide the net proceeds of sale, after any fees and charges of [auctioneer] have been deducted, 62% to the wife and 38% to the husband.
That the parties forthwith do all acts and things and sign all documents necessary to cause the pallets of [products/collectibles] more particularly described in the valuation report of [valuer] dated 29 July 2016 to be sold by public auction for the best price reasonably obtainable by [auctioneer] with no reserve price set and the proceeds of sale after any fees and charges of [auctioneer] have been deducted shall be dealt with as follows:
(a)The company [Company P] Pty Ltd shall receive the proceeds of sale; and
(b)The husband shall pay or cause to be paid to the wife the amount which is 62% of the net proceeds of sale of the said [products/collectibles].
That forthwith the wife shall do all acts and things and sign all documents necessary to tender her resignation as a Director and Secretary of [Company P] Pty Ltd and transfer to the husband her two shares in [Company P] Pty Ltd and do all other things necessary, within seven (7) days of the date of these orders and the wife will indemnify and keep indemnified the husband in respect of all claims she may have in relation to [Company P] Pty Ltd, whenever and however arising, including but not limited any interest, loan account, office or employment in relation to [Company P] Pty Ltd.
That, as between the husband and wife and subject to these orders, the husband and wife shall each respectively retain all interest in and entitlement to:
(a)All personal property now in his/ her respective possession or control;
(b)All shares, debentures, unit in unit trusts, bank, building society or credit union accounts standing in his/ her sole name respectively; and
(c)All interests in life insurance policies and superannuation funds standing in his/ her sole name respectively.
That subject to the above orders:-
(a)The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband or in his name jointly with any other person; and
(b)The wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife or in her name jointly with any other person.
That subject to the above orders, each of the husband and the wife release the other from all actions, proceedings, claims, demands, debts, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
That the respondent and applicant do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
If any party seeks an order for costs, an appropriate application to the Court may be made within 28 days of today’s date (supported by any documentary material) to be filed and served within that time period and a copy forwarded to my Chambers. If no such application is made within the time period specified, no order will be made as to costs.
THE COURT NOTES THAT:
A.Any application as to costs will be dealt with by way of written submissions, unless the parties request to be heard orally.
IT IS NOTED that publication of this judgment under the pseudonym Wakeley & Wakeley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 1927 of 2015
| MS WAKELEY |
Applicant
And
| MR WAKELEY |
Respondent
REASONS FOR JUDGMENT
(Amended pursuant to Rule 1.05 of the Federal Circuit Rules 2001 (Cth) & Rule 17.02A of the Family Law Rules 2004 (Cth))
Introduction
These are property proceedings between the applicant wife, Ms Wakeley (“the wife”) and the respondent husband, Mr Wakeley (“the husband”) whereby each party is seeking orders for property distribution after the breakdown of their marriage.
The parties previously separated in the late-1990’s and on 30 January 1998 entered into property adjustment orders by consent (“the 1998 orders”). I will discuss this further below but note the parties are in agreement for the 1998 orders to be set aside pursuant to s.79A of the Family Law Act 1975 (Cth) (“the Act”) and that it is just and equitable for fresh property adjustment orders to be made under s.79 of the Act.
In relation to the parties’ respective positions, the wife proposes that the parties’ total asset pool, as asserted by her, be divided as between the parties, 80% to the wife and 20% to the husband. The husband alternatively seeks that the total asset pool of the parties as asserted by him be divided as between the parties 53% to the wife and 47% to the husband.
As will become apparent, the wife has five siblings. It will be necessary to mention them throughout these reasons. Intending no disrespect and for the sake of clarity I will refer to each of the by their first names.
Procedural history
The wife filed her Initiating Application seeking final orders only, Affidavit in support and Financial Statement on 27 March 2015.
The matter first came before Judge Kemp in a duty list on 23 June 2015.
The husband filed his Response, Affidavit and Financial Statement on 1 July 2015.
The parties attended a Conciliation Conference with Registrar Hurditch on 6 October 2015 but no agreement was reached.
Thereafter, the parties attended the Law Society of New South Wales Family Law Settlement Service on 7 November 2016 but were unsuccessful in resolving the matter by agreement.
The matter was subsequently transferred to my docket, and on 21 February 2017 was listed for final hearing on 11 & 12 September 2017.
On 11 September 2017, the matter was not reached and was adjourned to 19 & 20 March 2018.
The final hearing took place on 19 & 20 March 2018.
Written submissions were required following final hearing:
a)On 4 April 2018, counsel for the wife provided the wife’s written submissions;
b)On 11 April 2018, counsel for the husband provided the husband’s written submissions; and
c)On 19 April 2018, counsel for the wife provided the wife’s written submissions in reply to the husband’s written submissions.
Material relied upon
The wife relied upon:
a)Case Outline dated 10 September 2017;
b)Her Initiating Application filed 27 March 2015;
c)Her Financial Statement sworn 12 March 2018 and filed 14 March 2018;
d)Her Affidavit sworn 1 August 2017 and filed 4 August 2017 (“trial affidavit”);
e)Affidavit of Ms B sworn 29 July 2017 and filed 4 August 2017; and
f)Affidavit of Mr A sworn 1 August 2017 and filed 4 August 2017.
The wife, Ms B and Mr A were cross-examined.
The husband relied upon:
a)Case Outline dated 6 September 2017;
b)His Response filed 2 July 2015;
c)His Financial Statement sworn 26 August 2017 and filed 28 August 2017; and
d)His Affidavit sworn 26 August 2017 and filed 28 August 2017 (“trial affidavit”).
The husband was cross-examined.
The following documents were tendered and placed into evidence:
Exhibit Label Document Tendered by A Statement of Account, Lighthouse Law Group dated 16 February 2011 addressed to the husband Wife B Letter from Lighthouse Law Group to Ms D, [Real Estate Group], dated 24 May 2006 Wife C Individual Tax Return for the husband for the period 1 July 2016 to 30 June 2017 Wife D Company Tax Return 2017 for Business C Wife E Respondent Financial Statement sworn 22 June 2015 and filed 1 July 2015 Wife F Tax Invoices from Business D dated 30 July 2017, 30 August 2017, 30 September 2017, 30 October 2017 & 30 November 2017 Wife G Response to application for Final Orders filed by the husband in the Family Court of Australia signed 1 August 1997 Wife H Financial Statement of the husband filed in the Family Court of Australia sworn 11 August 1997 Wife I Affidavit of the husband sworn 22 June 2015 Wife J Australian Securities & Investment Commission (“ASIC”) Personal Name Extract in the name of Mr Wakeley extracted 14 March 2018 Wife K Correspondence between Linden Legal and Abrams Turner Wheelan dated 8 April 2015, 10 April 2015 & 13 April 2015 respectively Wife 1 Letter from Whitfields Solicitors to Linden Legal dated 16 March 2018 Husband 2 Last Will & Testament of Ms C dated 14 August 2001 Husband 3 Redbook.com.au Valuation Certificate for Motor vehicle 1 Husband 4 Transaction listing for husband’s Bank 1 account for the period 19 December 2017 to 19 March 2018 Husband 5 Condensed bundle of documents used in Court to be provided to Chambers 21 March 2018 Husband
On 19 March 2018 at 2:15pm, the parties handed up a draft Joint Balance Sheet which was initially marked “MFI 1” and was subsequently marked Exhibit “Court 1”.
Competing proposals
By way of her Initiating Application filed 27 March 2015, the wife sought orders as follows:
(1) That subject to the husband’s compliance with Orders 8 and 9, within 2 calendar months from the date of these Orders, the wife pay to the husband or as he may direct in writing the sum of $40,000, otherwise, Order 10 shall apply in the alternative to this Order;
(2) That within 2 calendar months from the date of the making of these Orders the wife resign all directorships and/or positions and/or offices in Company P (“the Company”) but shall first if called upon to do so vote at any meetings of members and directors thereof in favour of such resolutions as the husband may direct, for the purposes of this order only.
(3) That within 2 calendar months from the date of the making of these Orders the wife execute in favour of the husband or his nominee a transfer of the whole of the wife’s right, title and interest in the wife’s shares in the Company and shall do all other acts and things necessary to give effect thereto and the husband shall cause to be prepare and shall submit to the wife the transfer referred in this order.
(4) That within 2 calendar months from the date of the Orders the wife do all acts and things and execute all documents necessary to assign to the husband or his nominee the whole of the wife’s right, title and interest in any loan account the wife had with the company.
(5) That simultaneously with the wife’s compliance with Orders 2 to 4 above inclusive, the husband indemnify and keep indemnified the wife against all or any manner of actions, suits, causes of action, arbitrations, debts, dues, costs, interests and demands whatsoever both at law and in equity which the husband and the Company now has or may have at any time or times hereafter against the wife or which may arise in respect of any act or thing done or omitted to be done by the wife up to and including the date of the making of these Orders whether by reason of the wife having been an employee and/or director and/or officer of the Company and/or by reason of the wife’s shareholding within the company and/or any loan account in the wife’s name and/or receipt by her of any moneys at any time from the Company or otherwise.
(6) That upon compliance with Orders 2 to 5 inclusive, the husband be otherwise solely entitled to his interest in the Company to the exclusion of the wife including but not limited to its assets, liabilities and resources.
(7) That, subject to the husband’s compliance with Orders 8 and 9 within 2 calendar months from the date of these Orders, the wife shall do all acts and things and execute all documents necessary to transfer to the husband or his nominee at the expenses of the husband the whole of her right title and interest in the motor vehicle 1 and the motor vehicle 2 otherwise Order 10 will apply.
(8) That simultaneously with Order 7, the husband will do all acts and things and sign all documents and pays [sic] all sums of money to discharge the Bank 2 loan and the Business C loan secured over the said vehicle, or refinance the loans and license secured over the motor vehicle into the sole name of the husband or his nominee and indemnify the wife and keep her indemnified in respect of the said loan.
(9) That pending the parties’ compliance with Orders 2 to 8 inclusive:
9.1 The husband will upon receipt of any monies received by him (cash or otherwise) for his Business C using the motor vehicle 1 or any other vehicle forthwith deposit the funds into the business bank account for the Company;
9.2 The wife will pay all registration costs, maintenance, insurance, Bank 2 loan repayments, Business C vehicle instalments and all other associated costs for the motor vehicle as and when they fall due and thereafter pay to the husband the difference between the funds deposited by the husband and the expenses paid;
9.3 In the event there is a shortfall between the funds deposited by the husband and the expenses paid and the wife is required to meet the shortfall, the amount the husband is to receive pursuant to Order 1 shall be reduced by any such shortfall that the wife has paid.
(10) That in the event the husband fails to comply with Orders 8 and 9, the following shall apply:
A. Within 14 days of the husband’s default to comply with Orders 8 and 9, the wife will immediately do all acts and things to sell the motor vehicle 1 and the motor vehicle 2;
B. Upon the sale of the motor vehicle 1 and the motor vehicle 2, the wife will do act and things and pay all sums of money to discharge the loan to Bank 2 and Business C secured over the motor vehicle 1, including applying the proceeds of sale of the said vehicles to discharge the debts;
C. In the event there is a shortfall between the funds received by the sale of the motor vehicle 1 and the motor vehicle 2 and the amounts required to discharge the loan to Bank 2 and Business C, the [sic] will pay the shortfall so as to secure the discharge of the loans and the amount the husband is to receive pursuant to Order1 from the wife will be reduced by the amount of the shortfall paid by the wife.
(11) That the Husband otherwise indemnify and keep indemnified the Wife in relation to all liabilities and debts in his name, including but not limited to any credit card liabilities and personal income tax liabilities.
(12) That the Wife otherwise indemnify and keep indemnified the Husband in relation to all liabilities and debts in her name, including but not limited to any credit card liabilities and personal income tax liabilities.
(13) That other than as is specifically provided for in these Orders, each of the parties are solely entitled to the exclusion of the other to all items of personal and real property in the their respective possession or of which they are the registered proprietor as at the date of these orders, including but not limited to all or any money standing to the credit of each of the parties in any bank or building society, shareholdings, motor vehicles and any present or future expectation under a trust or estate and any superannuation entitlements.
(14) In the event either party refuses or neglects to comply with any of these Orders in relation to the execution of any deed, instrument or document the Court appoints and authorises the Registrar of the Federal Circuit Court of Australia, Sydney Registry, and/or any Registrar or Deputy Registrar thereof to execute such deed, instrument or document in the name of the defaulting party, and further appoints such Registrar or Deputy Registrar to do all acts and things necessary to give validity and operation to the deed, instrument or document.
(15) The husband pays the costs of and incidental to these proceedings.
By way of his Case outline which enclosed a Minute of Orders sought, the husband sought orders as follows:
(1) That the Court set aside the orders made by the Court in proceedings in the Family Court of Australia dated 30 January 1998 and made on 14 February 1998 pursuant to Section 79A(1) of the Family Law Act 1975.
(2) Within 42 days the wife shall pay to the husband the sum of $700,000.
(3) That in default of compliance with Order2 the wife shall forthwith thereafter do all acts and things, pay al monies and sign all documents necessary to cause the caveats lodged against the title of Property A by Mr A and Ms B (“the siblings’) to be removed from the said titled by no later than the date of settlement of the sale of Property A pursuant to order 4.
(4) If the wife fails to comply with order 2 then the wife shall forthwith thereafter take all necessary steps and execute all necessary documents to cause Property A to be sold by public auction with such agent as the wife shall appont at the earliest convenient date and in any event not later than 9 weeks from the date of the making of these Orders at a reserve price recommended by the agent and the proceeds of the sale shall be distributed as follows by her:
A. Payment of agent’s commissions and advertising expenses and legal expenses of the sale;
B. Payment of any money due and owing to the mortgagee;
C. The sum of $700,000 plus interest calculated on a daily basis in accordance with the rate prescribed by the Family Law Rules 2004 from the due date under order 2 to the date of payment;
D. A further sum to the husband, applicable only if the property sells for more than 1.8 million, calculated as follows:
50% of (Sale price - $1.8 million).
E. The balance to the wife or as she may direct in writing.
(5) The wife shall vacate Property A by no later than the date if settlement of the sale of the property.
(6) That the parties forthwith do all acts and things and sign all documents necessary to cause the framed [products/collectibles] in the possession of the wife to be sold by public auction for the best price reasonably obtainable by [auctioneer] with no reserve price set, and divide the proceeds of sale after any fees and charges of [auctioneer] have been deducted equally between them.
(7) That the parties forthwith do all acts and things and sign all documents necessary to cause the pallets of [products/collectibles] more particularly described in the valuation report of [valuer] dated 29 July 2016 to be sold by public auction for the best price reasonably obtainable by [auctioneer] with no reserve price set and the proceeds of sale after any fees and charges of [auctioneer] have been deducted shall be dealt with as follows:
A. The company P shall receive the proceeds of sale; and
B. The husband shall pay or cause to be paid to the wife the sum which is 50% of the net proceeds of sale of the said [products/collectibles].
(8) That forthwith the wife shall do all acts and things and sign all documents necessary to tender her resignation as a Director and Secretary of Company P and transfer to the husband her two shares in Company P and do all other things necessary, within seven (7) days of the date of these orders and the wife will indemnify and keep indemnified the husband in respect of all claims she may have in relation to Company P, whenever and however arising, including but not limited any interest, loan account, office or employment in relation to Company P.
(9) That, as between the husband and wife and subject to these orders, the husband and wife shall each respectively retain all interest in and entitlement to:
A. All personal property now in his/ her respective possession or control;
B. All shares, debentures, unit in unit trusts, bank, building society or credit union accounts standing in his/ her sole name respectively; and
C. All interests in life insurance policies and superannuation funds standing in his/ her sole name respectively.
(10) That subject to the above orders:-
A. The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband or in his name jointly with any other person; and
B. The wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife or in her name jointly with any other person.
(11) That subject to the above orders, each of the husband and the wife release the other from all actions, proceedings, clams, demands, debts, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
(12) That the respondent and applicant do all acts and things and give all consents and execute all documents and writings necessary to give effect to the orders made herein.
(13) That in the event that either party refuses or neglects to execute any deed or instrument, the registrar of the court be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
(14) Costs.
The Law
Part VIII of the Act sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s.79 of the Act which gives the Court power to make such orders for alteration of property interests as it considers appropriate.
Section 79(2) of the Act provides that:
“The court must 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.”
Section 79(4) of the Act set outs the factors to be taken into account in considering what order, if any, should be made (these will be discussed in detail below).
The approach to be taken
Prior to the High Court of Australia’s decision of Stanford & Stanford [2012] HCA 52, parties generally relied upon the “4 step process” set forth in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395; [2003] FLC 93-143 in the determination of an application under s.79, as follows:
1. Identify and value, the parties’ property, liabilities and financial resources at the date of the hearing;
2. Identify and assess the contributions of the parties as referred to in s.79 of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach;
3. Identify and assess the other factors relevant including, the matters referred to in s.75 of the Act and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
4. Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.
The High Court in Stanford (supra) at [38]-[40] highlighted that satisfaction of the just and equitable requirement specified in s.79(2) should not be conflated with an exercise of discretion under s.79(4). The Court articulated three fundamental propositions, which may be summarised as follows:
a)First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The question posed by s.79(2) is thus whether, having regard to those existing interests, the Court is satisfied that it is just and equitable to make a property settlement order.
b)Second, although s.79 confers a broad power on a Court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. A power to make such order with respect to property, is a power which "rests upon the law and not upon judicial discretion". Although the Court is given a wide discretion, it is not 'palm tree justice'. Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. The question presented by s.79 is whether those rights and interests should be altered.
c)Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s.79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down"[28]. To conclude that making an order is "just and equitable" only because of and by reference to various matters in s.79(4), without a separate consideration of s.79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
The High Court made clear in Stanford (supra) at [39], the question whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist”.
The Full Court of the Family Court of Australia in Bevan & Bevan [2013] FamCAFC 116; 49 FamLR 387 at [71]-[72] has held that the decision in Stanford has not overruled the 4 step approach. Rather Stanford serves as a reminder that the 4 step process “merely illuminates the path to the ultimate result” being “no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.”
The Full Court in Bevan (supra) emphasised that although the pre-condition to making any order for property adjustment is a finding that it is just and equitable to do so in accordance with s.79(2) of the Act, such a finding does not form a threshold issue nor must the requirements of s.79 be followed in a particular order.
The Full Court in Bevan (supra) also summarised three “fundamental propositions” laid down by the High Court of Australia to provide “useful guidance to trial judges in approaching the task under s79” as follows:
a) Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
b) The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
c) A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4) and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.[1]
[1] Bevan (supra) at paragraph 73.
The very fact of separation and the termination of the relationship affects assumptions about property during the existence of a marriage or de facto relationship and may lead to the ready satisfaction of just and equitable requirement. In Stanford (supra) at [41]- [42], the High Court said:
[41] Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to "the need to preserve and protect the institution of marriage" identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
[42] In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
In Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592; 51 FamLR 176 the Full Court, when commenting on these passages in Stanford, observed at [21]-[22]:
[21] First, it is “…not possible to chart [the] metes and bounds” of the relevant discretion. Just as importantly, it was recognised specifically that the characteristics of individual marriage unions, in so far as they acquire, hold and deal with property, differ. In “many cases”, the union is underpinned by “…stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of the husband and wife during the continuance of their marriage” (Stanford, at [41]). And, in “many cases”, (but, not all) the “…just and equitable requirement is readily satisfied…” by the fact of separation: “[i]t will be just and equitable to make a property settlement order … because there is not and will not thereafter be the common use of property by the husband and wife” (Stanford at [42]).
[22] “Ready satisfaction” of the s 79(2) requirement “in many cases” by reference to separation and its consequences brings with it a necessary further consequence; in those “many cases” the parameters, breadth and depth of the s 79(2) inquiry will be curtailed accordingly. It is those who lived within the “stated and unstated assumptions” who understand them best. As a result, satisfaction of the s 79(2) requirement can be inferred, at least in part, from the issues joined and, importantly, not joined, between the parties.
Satisfaction of the just and equitable requirement does not have to form an express part of any one step. It can be inferred, as pointed out in Chapman (supra) at [22], above. Thackray CJ, said in Fielding and Nichol [2014] FCWA 77 at [43]:
“While I accept that a finding that it is just and equitable to make an order will always be required, in most cases the court will not need to discuss the s 79(2) issue, because the cases will be conducted on the basis of acceptance by the parties that it is just and equitable to make some form of adjustment. In those cases, matters arising under s 79(4) will require discussion only when determining the way the adjustment is to be effected.”
In Hearne & Hearne [2015] FamCAFC 178; 53 FamLR 454, the Full Court made clear that a positive finding that alteration of property interests is just and equitable is not necessary as a threshold issue nor that it be the subject of an express finding, but can be ascertained “by necessary implication from the totality of the trial judge’s reasons for judgment” (Per Strickland J, at [71], [72], Ryan & Austin JJ agreeing).
Here the parties accept that the termination of the relationship leads to satisfaction of the just and equitable requirement. They accept some form of adjustment should be made.
I will approach the determination of this matter by first identifying the assets and liabilities of the parties, then dealing with s.79(4) factors, including s.75(2).
The parties
The wife did not impress as a reliable witness. Under cross-examination the wife appeared intelligent and capable of a good understanding of money management. However, as I detail later in these reasons, her evidence was prone to exaggeration and she made prejudicial statements about the husband which were said to be derived from documents which were not placed in evidence. Her evidence about lack of knowledge of, and participation in, the business known as Company P, was, as discussed later in these reasons, unconvincing. Her evidence about dealings with her siblings concerning the acquisition of Property A, also discussed later in these reasons, was also unconvincing. I formed the view that the wife’s recollection of events was strongly influenced by her overriding desire to retain Property A. Overall I approach the wife’s evidence with caution.
It necessary here to make some general observations about the evidence of two other witnesses in the wife’s case, as given in the Affidavits of Mr A and Ms B. In many places their evidence is identical. For example, paragraphs [15]-[18] of Mr A’s affidavit are in terms almost identical to paragraphs [4]-[8] of Ms B’s affidavit. Those paragraphs deal with an important issue in this case, concerning the contention of the wife that she owes Mr A and Ms B a total of $360,000 for interests she alleges they have or had in Property A. Moreover Ms B made concessions in cross-examination about the preparation of her evidence. She agreed that her Affidavit was prepared by the wife’s solicitor. She did not tell the solicitor what to write. She agreed the wife arranged for the Affidavit to be prepared and Ms B signed it. These considerations indicate deficiencies in the preparation of this evidence of these two witnesses.
Such problems with Affidavit evidence have been the subject of judicial comment a number of times. In Macquarie Developments Pty Ltd and Anor v Forrester and Anor [2005] NSWSC 674, Palmer J expressed the view that it devalues the evidence of the witnesses involved, even if it may not render it worthless (at [89]-[91]. Palmer J said at [90]:
“affidavit evidence of a witness which is in the same words as affidavit evidence of another witness is highly suggestive either of collusion between the witnesses or that the person drafting the affidavit has not used the actual words of one or both of the deponents. Both possibilities seriously prejudice the value of the evidence and Counsel usually attacks the credit of such witnesses, with good reason."
In Celermajer Holdings Pty Ltd v Kopas [2011] NSWSC 40, Ward J (as she then was) pointed out it is unlikely that two deponents would have a precisely identical recollection, uninfluenced by the recollections of others, of shared experiences, saying at [186]:
"even if there has not been collusion as such between the witnesses, in the sense of changing their evidence to make it fit with that of another, the fact that the affidavits may not contain the actual words of one or other of the deponents devalues their evidence."
In In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233, Black J considered these authorities and at [16] expressed the view that it did not matter whether the identical passages in Affidavit evidence was the result of collusion between the witnesses personally or was the result of one adopting evidence that had been copied from the Affidavit of another, or a witness adopting evidence that had been copied from another’s affidavit, since “each substantially devalues” both witnesses' Affidavit evidence where no explanation has been given of what occurred. Black J said it is not possible for the Court to be satisfied in such a situation, that the witness’s evidence reflects a genuine recollection of events.
These judicial comments are apt for assessing the value of the evidence of Mr A and Ms B. The identical verbiage devalues their evidence significantly.
I approach the evidence of Mr A and Ms B with caution. This is a situation ripe for the application of the statement by Keane JA (as his Honour then was) in Camden & Anor v McKenzie & Ors [2007] QCA 136; [2008] 1 Qd R 39 at [34], where he said:
"[u]sually, the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation."
The husband was not a particularly reliable witness either. As discussed later in these reasons, his disclosure of income in his Financial Statements was inaccurate. At times in cross examination he refused to concede the obvious, such as when he was asked questions about where funding of $100,000 for renovations to Property A in 2002 came from. On the other hand, his affidavit evidence was supported by numerous contemporary documents, and overall I formed the view his recollection of events was reasonably accurate.
Further Relevant Facts
I note here that the wife has five siblings. It will be necessary to refer to them throughout these reasons. For clarity, and intending no disrespect, I will refer to the wife’s siblings by their Christian names.
The husband was born [date] 1951 and is presently 67 years of age.
The wife was born [date] 1958 and is presently 60 years of age.
On [date] 1986, the parties purchased Property B in joint names for $139,950 (Annexure W5, husband’s Trial Affidavit).
The parties married on [date] 1987.
The parties began living with the wife’s parents in 1988.
Both before the marriage and afterwards until 1991 the husband gave evidence, which was undisputed, that he owned a half interest in a Business E at Suburb D (“the Business E”), purchased by the husband with a business partner in 1984 using a property at Property C as security.
In 1988, the parties sold Property B, and received net proceeds of sale of $130,000.
The parties’ first child, Ms M, was born [date] 1988 and is presently 30 years of age.
In mid-1989, the parties purchased Property D. Property D was rented to tenants.
The parties’ second child, Mr N, was born [date] 1991 and is presently 27 years of age.
The Business E was sold in 1991. Thereafter, the husband and business partners purchased Business F.
Between 1991 and 1992 the parties renovated Property D. The funds used came from saved rent and a mortgage from Bank 3 for $100,000. The wife also contends her brother Mr A lent the parties $55,000. I will return to this later in these reasons.
The wife contends the parties initially separated from 1996 to 1998. The husband contends the parties separated in early 1997.
In 1997, the wife commenced property proceedings through the Family Court of Australia and on 1998, the parties entered into final property adjustment orders.
The business of Business F failed in about 1997 and was placed in liquidation.
On [date] 1998 the husband was made bankrupt as a result of the failure of Business F. It is not clear exactly when he was discharged from bankruptcy, but according to the wife, he was discharged in 2002.
Property D was sold in 1998, after enforcement action by the Bank 1 arising from the failure of Business F.
In 1998, the husband and the wife commenced a business acquiring two companies, Company P with the wife as sole director and shareholder. The husband became a director of Company P after his bankruptcy concluded.
In 1998, the wife and the children moved into Property A. At the time, this was the home of the wife’s parents.
The parties reconciled in late-1998. The husband came to live at Property A.
Property A was owned by the wife’s parents as joint tenants. The wife’s father passed away in 2001, whereupon the wife’s mother became the sole proprietor (Exhibit 5, page 82).
According to the wife’s brother, Mr A, and her sister Ms B, the wife’s father expressed the wish prior to his death that the wife should receive his half of Property A so she would have some security.
The wife’s mother executed her last Will and Testament on [date] 2001 (Exhibit 2).
It appears that in about [date] 2002 the wife’s mother transferred a half interest in Property A to the wife. The transfer itself was Annexure “A” to the wife’s trial affidavit. It is undated but the wife paid stamp duty of $6,365 on a dutiable amount of $225,000, and the date of stamping was [date] 2002.
The wife entered into a Deed dated [date] 2002 (“2002 Deed”) with three of her siblings, Ms I, Mr G and Ms T, to pay each of them the amount of $90,000 to purchase their release of any interest in their mother’s estate. A copy of the Deed was Annexure “B” to the wife’s trial affidavit. The wife paid a total of $270,000 to these siblings, by borrowing $250,000 by way of mortgage (Exhibit 5, page 95), and using money from her mother. I will return to the terms of the 2002 Deed later in these reasons.
It is convenient to record at this point that the wife and her mother mortgaged Property A to Bank 3 by mortgage dated [date] 2002, paying stamp duty for a secured amount of $250,000 (Exhibit 5, page 95). The wife’s mother was co-mortgagor no doubt because at that time she was co-owner of Property A with the wife. As I understand the evidence, at the same time Bank 3 established in the name of the wife a home loan account, being account number, and a Deposit Account, being account number, which was an offset account. The wife used the account as a transaction account (Exhibit 5, pages 315-720 generally)
The position of the wife’s remaining two siblings, Mr A and Ms B, in respect of Property A was an issue of some controversy in this case. The wife contends that she has a liability to each of them for a claimed one-sixth share in Property A. I will return to consider this question later in these reasons.
On [date] 2003, the husband purchased a property at Suburb E in Queensland. The purchase price was $335,000, part of which was financed by a mortgage of $272,000 from Bank 4. The husband sold the Suburb E property on [date] 2006. He gave evidence, which was not disputed by the wife, that he made a net profit of $34,000 on the sale.
On about [date] 2004, the husband purchased a third interest in a property at Town 1, with two other individuals. The property was sold on [date] 2006 and the husband gave evidence, again, uncontested by the wife, that he received $7,641.51 net from the sale.
The wife’s mother passed away on [date] 2005. Her Will dated [date] 2001 was admitted to probate on [date] 2006 (Exhibit 5, page 98). Mr A was executor of the mother’s Will. On about [date] 2007, as executor, he transferred the remaining half of Property A to the wife (Exhibit 5, page 98).
During 2007 the parties acquired a motor vehicle 2, using the husband’s superannuation.
On [date] 2007 the wife increased the loan secured against Property A by $100,000 (Exhibit 5, page 502).
In [date] 2013 the husband purchased a motor vehicle 1 using finance and used it as a Business C.
The parties separated for a second and final time on [date] 2014 but remained living separately under the one roof until the husband left the Property A property on 25 August 2014.
In [date] 2015, Mr A and Ms B lodged Caveats in respect of Property A claiming an interest in the property. In each case the claimed interest was said to arise under the Will of their mother.
Assets, liabilities and financial resources at the date of the hearing
As noted above, it is essential to identify the parties’ property, liabilities and financial resources at the date of the hearing. The High Court of Australia made clear in Stanford (supra) at [39], the question whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist”.
The assets of the parties and their value were not in dispute by the end of the trial, as can be seen from Exhibit Court 1.
The area of dispute lay in the existence and value of a number of liabilities. These fell into three categories: amounts said to be owed by the wife to members of her family, a debt said to be owed by the husband to Lighthouse Law Group and post-separation tax debts of each party. It is necessary to make findings about each of these categories.
Tax Debts
I will deal first with the tax liabilities of each party. The husband claimed a liability was owed by him for tax for the financial year ended 30 June 2017 of $10,000. In written submissions the husband reduced this figure to $9,800. There was no Notice of Assessment tendered to support the existence of this liability. However, Exhibit C was a copy of the husband’s 2017 Individual Tax Return, attached to which was a calculation of estimated tax payable of $9,621.95. The wife submitted I should not accept either $10,000 or $9,621.95. I do not accept that submission. No serious challenge was made in cross-examination to the husband’s evidence in this regard. I am satisfied Exhibit C is a sufficiently firm evidentiary basis to accept the figure of $9,621.95. I will include this amount as a liability of the husband.
The wife asserts a tax liability for the financial years 2016 and 2017 of $6,332. The husband did not put this in contention. This amount will be included as a liability of the wife.
Lighthouse Law Group
The wife asserts a liability for legal fees owed to Lighthouse Law Group in the amount of $24,000.
Exhibits A and B demonstrate that Lighthouse Law Group undertook work for both parties at times between 2006 and 2011. There was no dispute that the proprietor of Lighthouse Law Group, Mr F, was a relative of the wife and performed a large amount of work for the husband or his companies. Exhibit B was a letter dealing with the settlement of a sale of a property at Town 1 owned by the husband. Exhibit A was a copy of an invoice dated [date] 2011, addressed to the husband for a total amount of $29,151.68. In cross-examination the husband gave evidence the invoice had been paid, $20,000 by his company P, and the balance, agreed with Mr F at a discounted figure of $6,000, by the wife. In paragraph 48 of his Affidavit the husband gave evidence that he was not “aware” of the debt and had not received any statements from Mr F for legal work undertaken. This evidence sits in some tension with his evidence that he paid $20,000 of the amount owing. He may have meant he was not aware of the debt at the date of deposing the Affidavit. In any event, there is no evidence that either $29,151.68 or $26,000 is presently owing to Lighthouse Law Group. In light of the age of the invoice, any attempt to recover the amount of the invoice may well meet a good limitation defence. On balance, I am not satisfied that any amount owing to Lighthouse Law Group should be included in the liabilities of the parties.
I note here that the wife further submitted that if it was held the debt to Lighthouse Law Group was statute barred, the Court must make an adjustment in favour of the wife when assessing contributions. Since I have found that no such debt has been proven to be owing, rather than assuming it would be statute barred, it provides no basis to make an adjustment in the wife’s favour when assessing contributions.
Amounts Asserted to be owing for Property A.
The wife contends she owes Mr A and Ms B the equivalent of one tenth of the current value of Property A, or $180,000 each, being a total of $360,000. The husband denies this liability.
This is a particularly difficult issue, exacerbated by confusing and contradictory evidence.
The version of relevant events according to the evidence of the wife, Mr A and Ms B is as follows:
a)the wife’s father expressed the wish prior to his death that the wife should receive his half of Property A so she would have some security;
b)The wife, her mother and her siblings agreed to honour the wishes of their father, and in 2002 their mother transferred a half interest in Property A to the wife as a gift;
c)The wife’s mother wished the wife to buy out the interest of her sibling’s in the remaining half, which should be divided between the other five siblings, excluding the wife, that is, each of the other siblings should be paid the equivalent of one tenth of the value of Property A;
d)The wife entered into the 2002 Deed with Ms I, Mr G and Ms T, and paid each of them the amount of $90,000;
e)Both Mr A and Ms B each agreed with the wife that, because she could not pay them immediately they would wait until the house was sold, or in Ms B’s case, when she needed the money for her daughter’s wedding.
It can be seen that on this version the wife was to receive a half interest in Property A as a gift, and neither Mr A nor Ms B have ever received any payment for any interest in Property A, while the wife’s other three siblings have. Also it is important to stress that on this version of events, Mr A and Ms B would be entitled to a one-tenth share, or equivalent value, of Property A.
There are problems with this version of events. Bearing in mind the shortcomings in the evidence of Mr A and Ms B set out earlier in these reasons, I have paid close regard to “any evidence independent of the parties which is apt to cast light on the probabilities of the situation." Camden & Anor v McKenzie & Ors (supra).
Interest of Mr A
I am not satisfied that Mr A holds an interests as claimed by the wife.
First, the available documentary evidence sits in some tension with the wife’s version and the asserted one-tenth interest of Mr A.
The wife’s mother executed her last Will and Testament on [date] 2001 (Exhibit 2) (“the Will”).
a)Clause 4 of the Will seems to have been intended to grant to the wife an option to purchase Property A, at market value, less the equivalent value of two one-sixth shares or one third. Clause 4(a) of the Will states:
“I give to my daughter MS WAKELEY the right to buy from my Trustee my real property known as Property A in the said State (‘the Property’) at the value determined by an independent registered valuer appointed by my Trustee less an amount equivalent to two-sixths share of that valuation.”
b)Clause 4(f) provided that in the event the wife exercised the option the proceeds of sale were to be distributed to Ms B, Ms I, Mr G and Ms T as one quarter each. Mr A was not mentioned.
c)Clause 4(g) provide that in the event the wife did not exercise the option to purchase Property A, then it was gifted, as tenants in common, to Ms B, Ms I, Mr G and Ms T as to a one sixth share each, with two-sixths to go to the wife. Again Mr A was excluded. This clause is consistent with Mr A having already been paid for his one sixth interest, so that the wife was entitled to two sixths under the Will.
d)Clause 4(h) of the Will states:
“I have not given a share in my real estate to my son MR A because he was paid the sum of seventy thousand dollars in [date] 2001 by my daughter MS WAKELEY for his share of the real property in my name.”
It can be seen that in a number of places the terms of the Will assumed that the wife was entitled to a two-sixths share of Property A, while Mr A was not entitled to any share of the property, expressly because he had received $70,000 for his share.
On [date] 2001, the same day the Will was executed, the wife lodged a Caveat in respect of Property A claiming an equitable interest in the property “pursuant to the deed between Ms Wakeley and Mr A dated 14.8.01”. (Exhibit 5, page 92).
The wife denied in cross-examination that any deed was signed with Mr A in 2001. However, the wife swore the statutory declaration supporting the Caveat. She had no explanation for the reference to a deed in the Caveat. She suggested it was a mistake by the solicitor who prepared the Caveat. She denied any payment of $70,000 had been made to Mr A. Mr A gave no evidence of having received $70,000 from the wife in 2001. When asked in cross-examination about the existence of a deed in [date] 2001, Mr A said he had no recollection. No deed was produced in evidence.
The solicitor who witnessed the wife’s statutory declaration in support of her Caveat was Mr F, who, as already observed, was a relative of the wife, and I infer was responsible for the preparation of the Caveat.
The terms of the Will are also significant in this regard. Clauses 4(a), (g) and (h) when read together are consistent with the wife being treated by her mother as entitled to two one-sixth shares in, or a third of, Property A. I infer these two shares were the wife’s one-sixth share plus the one-sixth share for which she paid Mr A $70,000.
The solicitors firm which prepared the wife’s mother’s Will was Paul Solomon & Co.
Thus both the Caveat and Will, though prepared by different solicitors, contained the same factual assertion that Mr A had been paid $70,000 by the wife for his putative share of Property A. The wife, and Mr A, claim this assertion is wrong. But no plausible explanation was given by the wife, or her witnesses, of how two solicitors preparing separate documents for different clients reproduced what is claimed to be the same factual error. One of the solicitors, Mr F, had performed legal work for the wife’s family many times. He was not called to give evidence.
On balance, I am not satisfied that the wife’s contentions in this regard, though supported by Mr A, should be accepted. The contemporaneous documents support a conclusion that Mr A did receive $70,000 from the wife in 2001, as consideration for release of his expected future interest in Property A. I make a finding consistent with that conclusion.
Secondly, even if this conclusion be wrong, it is difficult to see how Mr A has any interest in Property A in any event. The terms of the Will, which was admitted to probate, granted him no interest as a beneficiary in the property or its proceeds of sale, and expressly excluded him from a share. He had a legal interest only as executor and trustee, until such time as he transferred by transmission the mother’s half interest to the wife. His own evidence gives no basis for a conclusion that he ever received an equitable interest or share in the Property A.
I do not ignore the caveat lodged by Mr A in [date] 2015 (Annexure “A” to his affidavit). However, this document was lodged after the proceedings were commenced, it has no contemporaneity with the relevant alleged dealings. Moreover, in the caveat Mr A claims an interest in Property A as a beneficiary of his mother’s estate, an assertion which, for the reasons given in the previous paragraph, was clearly unsustainable. I give this Caveat little weight as evidence.
Thirdly, the contention that Ms I, Mr G and Ms T, were paid $90,000 each for a one tenth share, as opposed to a one sixth share each, of Property A in 2002 pursuant to the 2002 Deed is difficult to accept.
a)If so, this would equate to a value for Property A of $900,000 in 2002. However, as already noted above, on the transfer of the one half interest to her, the wife paid stamp duty of $6,365 on a dutiable value of $225,000 for a one half interest, on [date] 2002. This equates to a value for Property A in 2002 of $450,000.
b)No plausible explanation is proffered by the wife as to why she would have paid $90,000 for a one tenth share in 2002, when $90,000 appears to have been much closer to fair value for a one-sixth share at that time.
c)The terms of the 2002 Deed are inconsistent with the wife’s contention. Under the terms of the Deed the wife was called the “Purchaser” while Ms I, Mr G and Ms T were collectively called the “Vendors”. Recital A recites that each of the Purchasers and the Vendors “are siblings currently entitled to a one-sixth share” of the estate of their mother. Clause 2 of the Deed is in the following terms:
“The Vendor, in consideration of the payment of the Amount [$90,000], releases their interest in the real property in the Mother’s estate and shall act in such a way that their interest in the real property will devolve to the Purchaser, her nominee, assignee, or estate at the time of the Mother’s death and probate being granted to her Executor.”
d)The 2002 Deed was entered into some four months after the transfer of the half interest in Property A to the wife. If that transfer was a gift, as the wife asserts, Recital A was clearly incorrect, because the Vendors would no longer have been entitled to a one-sixth share by the time the 2002 Deed was signed, rather, according to the wife, their prospective share was to be one tenth each. No explanation was given as to why the parties to the 2002 Deed should sign it, if Recital A was couched in terms so plainly incorrect. There was no evidence about who prepared the 2002 Deed.
e)The husband gave evidence that the siblings all met at Property A in 2002. The husband was present in the house but not present in the discussions. Afterwards he says the wife told him the siblings had agreed on a value of $540,000 for Property A and that she would pay each sibling $90,000. This evidence is plausible and consistent with the 2002 Deed. It is not necessarily inconsistent with Mr A being paid earlier since according to the husband the wife said, relevantly, “we came up with a figure of $90,000 per sibling”. This can be understood as a reference to those siblings who had not yet been paid for a one-sixth share.
There was no evidence from any of Ms I, Mr G or Ms T. This raises the question of whether any inference should be drawn from their unexplained failure to give evidence. In Jones v Dunkel (1959) 101 CLR 298 at 321 Windeyer pointed out that where “the nature of the case is such as to admit of explanation or contradiction” an adverse inference can sought to be drawn. (citing R v Burdett [1814-23] All ER 80) from an unexplained failure to call witnesses who could be expected to give evidence on the question in issue. The inference potentially available is that the evidence would not have assisted the wife’s case, not that the evidence would have been positively adverse: ASIC v Hellicar (2012) 247 CLR 345 at [232], per Heydon J. The wife gave evidence that she and her siblings came from a close family. There was no explanation why none of them gave evidence to support her case. In my view, it is appropriate to draw the inference that any evidence of Ms I, Mr G or Ms T would not have assisted the wife’s case.
On balance, I am satisfied that the terms of the 2002 Deed, the terms of the mother’s Will, the size of the payments to each of Ms I, Mr G or Ms T ($90,000) relative to the dutiable value of Property A in 2002, support a finding that the wife paid $90,000 to each of those siblings as consideration for the release by them of any claim under the Will in the nature of a one-sixth interest in Property A, not a one tenth interest.
Accordingly, I accept the husband’s argument that after the wife’s father’s death in 2001, the wife took steps to, and did, pay consideration for the release by four of her five siblings, namely, Mr A, Ms I, Mr G and Ms T, of their claim under their mother’s Will in the nature of a one sixth interest in Property A.
Accordingly, I reject the wife’s assertion that a liability of $180,000 payable to Mr A should be included as a liability of the wife.
Interest of Ms B
That leaves the position of Ms B to consider. This is a particularly difficult question.
Ms B herself gave evidence that she has never been paid for any share. Unlike Mr A, Ms B was to receive a one-sixth share of Property A under the Will.
The parties made no submissions about the proper construction of the Will. The relevant clauses of the Will have been discussed above. It is clear that by the time the wife’s mother had passed away, the wife’s right to purchase option in clause 4(a) of the Will had been substantially overtaken by events. On the evidence available before me, the wife had “bought out” all her siblings except Ms B by the time her mother died, and they had released any claim to an interest under the Will. On any view of the evidence, Ms B had not. The husband did not submit otherwise.
There was no evidence on the question of whether the wife’s mother’s estate has been fully administered. Assuming that the gift in clause 4(g) remained effectual upon the grant of probate, upon final administration of the estate, Ms B was entitled to receive a one-sixth share in Property A under the Will.
Despite this, Mr A as executor transferred the entire one half interest held by the wife’s mother to the wife, as noted above, in 2007.
No submissions were made by either party concerning the consequences of this transfer to the wife in relation to the rights of Ms B under the Will.
The caveat lodged by Ms B in [date] 2015 claims an interest pursuant to the Will, but it also asserts the wife “exercised her right to purchase” Property A from the Estate and that Ms B has an entitlement to receive payment for a one-tenth share. There is no clarity about when the option to purchase was said to be exercised by the wife after the grant of probate.
More to the point, it is difficult to understand how the wife could be said to have actually exercised the right or option to purchase under the Will since she had paid all her siblings except Ms B before the Will came into effect. It may be that the option to purchase remained effectual under the Will in respect of Ms B alone.
The wife seemed to assume she exercised the option to purchase under the Will and therefore that Ms B is owed an amount equivalent to one-tenth share of the current value of Property A. This assumes Ms B’s share was one-tenth. I have already rejected that possibility. The option to purchase under the Will was, in any event, for a one-sixth share.
The wife’s assumption also does not grapple with the difficult question of whether the amount payable for any sized share crystallised at the date of exercise of the option to purchase. Clause 4(a) of the Will is clear that the value was to be set by an independent valuer at the date of exercise of the option. Contrary to this, the argument of the wife assumes the value is set whenever payment is made, that is, at the current market value at the time. That presumably is why she asserts that the value of a one-tenth share at the hearing was $180,000.
No argument was made that the wife exercised the option to purchase Ms B’s share when Mr A made the transfer to her in 2007, which would mean the correct value to apply would be the value of the share in 2007, not its current value.
It can be seen that the position is confused and unclear. The parties’ submissions did not fully engage with these difficult questions. The discussion leads to the perplexing result that Ms B may be entitled to a one-sixth share of Property A, but she only claims a one-tenth share in her evidence in these proceedings. It was however the contention of the husband in submissions that the evidence showed each sibling was entitled to a one-sixth share of Property A. This is consistent with my analysis. I accept that submission.
I will assume the question raised by the manner in which the case was conducted, is whether Ms B was paid for a release of her claim to a one-sixth interest in Property A at some point after probate was granted, and if not, whether it should be concluded that she remains entitled to such a share under the Will.
The husband denied that Ms B had any interest in Property A, because Ms B had been actually paid for her interest in 2007.
There is no argument by the husband that Ms B received any payment from the wife before 2007.
The husband points out that, unlike all the other siblings, no step was taken or document created to protect the interest of Ms B. The husband argues that the Caveat lodged by Ms B in [date] 2015 should be discounted as evidence because it was clearly created for the purposes of these proceedings. The husband further argues that on the balance of probabilities, Ms B was paid for her share of Property A by the wife increasing the mortgage secured against the property by $100,000 in [date] 2007. Exhibit 5, (page 502) is a copy of bank statement for the wife’s Bank 3 account. On [date] 2007 there are three entries, $25,000, $60,000 and $15,000, totalling $100,000, all described as “Loan Top Up”. This amount, so the husband contends, was more than enough to purchase from Ms B her one-sixth share.
There was little independent evidence of how this additional $100,000 was expended. In cross-examination the husband conceded he had no knowledge of how these funds were applied. The three amounts took the debit balance of account # from $242,964.92 to $342,964.92. The wife gave evidence that these additional loan monies were used to pay $15,000 to the wife’s nephew Mr O in accordance with the Will, bring school fees up to date, and the balance was used to redo renovations to Property A which had been badly executed in the past (paragraph 23 of the wife’s trial affidavit).
The husband points out that the nephew was not called to give evidence. However, I do not consider it appropriate to draw any inference by reason of the absence of the nephew as a witness. Unlike Ms I, Mr G or Ms T, the nephew has only a peripheral relevance to the issues in this case. I have no evidentiary basis upon which to form a view about his alignment or otherwise with the wife, so as to conclude she would reasonably have been expected to call the nephew. I accept that the nephew was paid $15,000.
In submissions the wife pointed out that the bank records (Exhibit 5, pp 502-3) show that on [date] 2007, $25,000 was withdrawn from account # and deposited into account #. Although it was not clear, in her Affidavit she appeared to assert this amount, or some of it, was used to pay arrears of school fees (paragraph 23). There is no other evidence supporting this contention, which the husband did not accept. A perusal of the bank statement for account # from [date] 2007 to [date] 2008 (Exhibit 5, pp 502-512) does not disclose any payments from that account which are clearly identifiable as the payment of school fees.
The destination of the remaining amount of $60,000 was not clear on the evidence. The wife gave evidence that it was used to redo underpinning, further repairs, to erect a new front fence and automated gates. No further detail was given for this work, or how it was paid for. In his affidavit, the husband did not challenge the factual assertions of the wife that such work was done, nor was she challenged in cross-examination, except to the extent it was put to her that $75,000 was paid to Ms B.
There was no evidence of the value of a one-sixth share of Property A as at [date] 2007. However, even if it be assumed that the value remained at $90,000, it can be seen that once the nephew was paid $15,000 there was insufficient ($85,000) to make a full payment of $90,000 from the remaining additional loan funds. If $25,000 was spent on school fees only $60,000 would have remained to pay Ms B.
It certainly seems odd that in circumstances in which he says neither he nor Ms B had been paid for either for a one-sixth interest, or, on their version, a one-tenth interest, Mr A nonetheless transferred the mother’s half-interest to the wife in 2007 without any payment to Ms B or him. I accept the evidence would permit the inference that the wife could have paid Ms B at least in 2007 because she borrowed a further $100,000. However, Ms B’s evidence was that she told the wife she would “wait either until the house was sold unless I need the funds before”, for her daughter’s wedding (paragraph 8). It appears that neither of those possibilities had arisen in 2007. On the other hand, as I have already found, Mr A was likely already paid in 2001.
The husband also argued that absence of any documentation, like the 2002 Deed, protecting Ms B’s interest weighed in favour of the conclusion that she was paid in 2007. However, Ms B’s interest was enshrined in the Will. It is not clear why further documentation was necessary. Another problem for the husband’s argument is that there is no obvious reason why Ms B would have accepted $85,000 or $60,000 instead of $90,000 for her share, even assuming that was fair value in 2007.
The husband argued that any factual uncertainty in relation to the question of whether Ms B has received payment for her share, is the fault of the wife’s deliberate obfuscation and deliberate non-disclosure. The deficiencies in the evidence of Mr A and Ms B lend force to this submission. The collusive character of their Affidavit evidence renders their evidence about non-payment to Ms B of little value. The wife’s evidence about the disbursement of the $100,000 borrowed in 2007 is unsatisfactory, and sparse on detail. Resolution of all these factual uncertainties lay peculiarly in the knowledge of the wife, Mr A and Ms B. Despite the conflicting indications in the evidence, on balance I accept the husband’s argument that the factual uncertainties should be resolved in his favour.
On balance, I have formed the view that Ms B is more likely than not to have received a payment for her interest in Property A.
Therefore I do not accept that Ms B is presently entitled to a share in Property A under the Will.
Loan of $55,000
The wife seeks to include in the liabilities of the parties a loan said to have been made by Mr A in 1993. Mr A gave evidence that he lent the parties this amount for the purpose of finishing renovations to Property D. He said he lent the funds, “partly by giving them lump sums, partly by paying for items for the home and partly by giving a weekly sum to Ms Wakeley”.
In written submissions the husband accepted this loan was proved. The evidence supported this concession. The wife had included specific reference to this debt in a statutory declaration sworn on [date] 1998 (Exhibit 5, page 105). The husband acknowledged the existence of this debt in the earlier property proceedings between the parties. Exhibit G was a copy of the husband’s Form 7A Response filed in the earlier proceedings, which sought a specific order that $55,000 be repaid to Mr A. Exhibit H, was a copy of the husband’s Financial Statement sworn in 1997 which included a debt of $55,000 owed to Mr A. The husband accepted these documents were accurate in cross-examination.
I am satisfied that the parties incurred a debt of $55,000 to Mr A in 1993.
However, there is reason to conclude this debt would now be statute barred. There is no evidence of the debt being acknowledged at any time after 1998. In addition, as the husband submitted, so far as the liability was his, it is likely to have been included in his bankruptcy from [date] 1998 and released upon his discharge from bankruptcy. I infer nothing has been done in relation to the debt by any of the parties for about 20 years. In those circumstances I infer there is no realistic prospect that the debt will be enforced by Mr A, even though in his evidence he claimed it was still owing.
The wife submitted that nonetheless, citing Biltoft and Biltoft [1995] FamCA 45; (1995) FLC 92-614, the Court has a discretion in how family debts can be treated, and the debt of $55,000 should be included as a matrimonial liability. In the circumstances of this case I do not consider that to be the appropriate way of treating such an old debt. Rather it should be brought into account in the assessment of contributions, to which I will return.
Loan of $58,000
Mr A also gave evidence that in 1997 he arranged for an unidentified person to lend the husband $50,000 for three months. At the time, according to Mr A, the husband told him he was desperate for money to pay wages and bills for his business called Company P (Mr A’s Affidavit, paragraph 9).
According to Mr A, the husband was unable to make the repayment after three months and Mr A repaid the loan, together with $8,000 interest on the husband’s behalf to the unnamed lender.
The wife gave evidence that the husband registered Company P in her name without telling her and he ran the business (paragraph 27). She also gave evidence that she “set up Company P” at the husband’s request “for him to run his business undertakings”, the husband made her a Director on the one hand because he was bankrupt, and on the other hand because the start-up capital came from funds she received from the sale of Property D (paragraph 21). This evidence is difficult to reconcile. It is hard to understand how the wife could both have “set up” Company P and not have known she was sole director, especially when she provided start-up capital and the husband was bankrupt.
In any event the evidence of the wife is consistent with evidence of Mr A to the extent that the business of Company P was short of money. However, her evidence seems to be directed to the period 2001 to 2002, well after the time Mr A alleges the husband asked him for $50,000. The wife gave no evidence directly about the loan alleged to have been organised by Mr A.
In cross-examination, the husband strongly denied Mr A’s evidence of a conversation asking to borrow $50,000 (paragraph 9). He went so far as to assert Mr A was mendacious. This is on contrast to his concession in cross-examination about the loan by Mr A of $55,000, mentioned above.
On the evidence currently available, in my view recovery of the debt would likely be statute barred. However, on balance, I am not satisfied that the wife has proved the existence of a liability of $58,000 owed to Mr A by the husband in the circumstances described. Again since I have found that no such debt has been proven to be owing, it provides no basis to make an adjustment in the wife’s favour when assessing contributions.
Loan to the Wife of $75,000
The wife gave evidence (paragraphs 36 and 37) that post-separation she borrowed a total of $75,000 to cover some legal fees, mortgage payments, home repairs and living, hospital and medical expenses of $10,000. The wife gave evidence she borrowed $14,790 for a friend called Mr H. This loan was supported by documentary evidence. She also gave evidence that she borrowed $40,000 from her nephew Mr S. The wife and Mr A gave evidence that he repaid these loans for the wife and thus lent her the equivalent amount. The wife and Mr A claim she owes him $75,000. This liability was not the subject of serious challenge by the husband in cross-examination. However, the husband argued that none of the amounts claimed to comprise the loan should be treated as joint matrimonial liabilities. I am not satisfied $75,000 should be included as a post-separation liability of the wife. The living and medical expenses of $10,000 should be excluded. There is no evidence of how much the wife paid in legal fees, so I accept $65,000 as a liability of the wife to Mr A.
The wife argued that her contributions far outweighed those of the husband such that her contribution entitlement should be assessed at 80%.
The central limb of the wife’s argument for a very significant assessment of contributions in her favour relies upon treating Property A as a contribution by her alone, subject to the interests of Mr A and Ms B. The argument depends in part upon findings that she was gifted one half in 2002 by her mother for security, in accordance with her father’s wishes, and that she paid three of her five siblings for a one tenth share of the other half.
I have rejected the wife’s version of the dealings regarding Property A above. I am satisfied that the wife paid each of her siblings except Ms B who was paid an unspecified amount, either $70,000 in the case of Mr A, or $90,000 in the case of the other three siblings, for a one sixth share of Property A. I am not satisfied she received half as a gift.
I take account of the fact that the wife was able to buy out her siblings because the manner in which they agreed to receive payment, at different times and in different amounts. This was itself a contribution.
There is no evidence of how the wife paid Mr A. She provided no evidence about this matter, which would have been peculiarly within her knowledge. I infer on the balance of probabilities that the payment was made from an account of the wife into which the husband’s income had been deposited in accordance with the practice of the parties throughout the marriage. The payment to the other three siblings was made by taking the mortgage loan #. This loan was clearly serviced by deposits from the bank account into which the parties deposited their income, including the $735,000 deposited by the husband between 2004 and separation, as already noted above. The credit balance of the bank account also offset the debit balance in #, thereby reducing the interest accrued on that account.
The evidence about the likely payment to Ms B, discussed above, requires the same conclusions. The servicing of the existing mortgage on Property A, which was likely used in part to pay Ms B, was helped by the deposits from the husband between 2007 and 2014.
The Full Court in Dickons & Dickons (2014) 50 Fam LR 244 at [15] pointed out that a search for a causal link between contributions and particular property “might be seen to come instinctively to the necessary inquiry” in assessing contributions. However, at [16], the Court also emphasised the distinct role of s.79(4)(c):
“While that apparent “causal connection” might be seen in s 79(4)(a) (and (b)), no such connection is apparent from the terms of s 79(4)(c); contributions of that latter type are not linked by the words of the subparagraph to the “acquisition, conservation or improvement of any of the property” or, indeed, to “property” at all.”
The Full Court then continued at [17] – [26], describing the assessment of contributions in the following way:
[17] …Financial contributions can be made to the “acquisition, conservation or improvement” of property “directly or indirectly” (s 79(4)(a), emphasis added). A financial contribution can be made indirectly by, for example, the use by parties of income or assets for purpose A freeing up the use of other income or assets for purpose B. Moreover, a particular financial contribution might have been used wholly in discretionary expenditure which, but for that contribution, would not have been available to the parties or would have required borrowings or a diminution of capital. Such a contribution can also, in that way, be seen, for example, as an indirect contribution to the conservation of property. Indeed, the principles discussed for example in In the Marriage of Kowaliw (1981) FLC 91-092 and In the Marriage of Townsend (1995) FLC 92-569, can be seen as an exception to that general proposition.
[18] Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4).
…
[20] Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “... trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437). In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443).
[21] Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79. That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?
[22] The analysis just referred to might, obviously enough, also involve an examination of when contributions were made and the use made of contributions. But that is quite different to attributing to, or searching for, a necessary causal connection between contributions and the available property as a requirement for a particular contribution having significance in the overall assessment of what is just and equitable.
[23] We wish also to refer to the approach of the Federal Magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
[24] There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s.79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s.79 itself and, in particular, s.79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
[25] Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s.79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
In my view, taking the holistic approach identified in Dickons (supra), and the comments particularly about indirect financial contributions, I am satisfied that the husband’s contributions to the bank account, derived from his personal exertions, assisted the wife to purchase Property A from her siblings. The deposits into the bank account made by the husband enabled the wife to raise and service the borrowings necessary to acquire it. Property A should not therefore be treated as a contribution by the wife alone.
Taking account of all the above considerations, I assess the applicant’s contribution entitlement at 65% and the respondent’s at 35%.
I now turn to the s.75(2) factors.
Section 75(2)
The Act requires me to take into account the matters referred to in s.75(2) of the Act, so far as they are relevant, when considering what orders should be made in these proceedings.
In my view, the relevant matters to be so taken into account on these facts are, as follows:
(a) the age and state of health of each of the parties;
The wife is 60 years of age and deposes to be in good health despite having two bulging discs in her back, for which she currently takes anti-inflammatory medication.
The husband is 67 years of age and deposes to be in good health other than Type 2 Diabetes which is controlled by tablets.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The wife presently works as a [occupation omitted], earning $850 per week gross. I have found she owns Property A and the majority of the other assets of the parties, including some superannuation.
The husband presently works as a [occupation omitted]. He submits work is inconsistent. He further submits that due to legislative changes, as of 2020, [businesses] will become obsolete and this will affect his income.
Both parties have the capacity for gainful employment.
The wife contends the husband has deliberately reduced his income, and the Court cannot rely upon his representations as to income. She made detailed submissions designed to highlight discrepancies between:
a)the income as stated in his Financial Statement filed 22 June 2015 (Exhibit E, p 3), being $700 per week, and the income disclosed in his tax returns for 2014, 2015 and 2016, which showed a range weekly income in those years of between $804 and $1,400 per week; and
b)the income as stated in his Financial Statement filed 26 August 2017 (Exhibit E, p 3), being $985 per week, and the income disclosed in his tax returns for 2017 which showed a weekly income of $1,345.59 per week
The wife also pointed out that the gross income in 2017 for the husband’s Business C, of which he is sole owner, was $127,485.
Consequently, the wife argued, I should conclude the husband has not made full and frank disclosure. The wife did not elaborate on the consequences for assessing contributions which were said to flow from such non-disclosure.
The wife also relied upon Exhibit J which was an historical ASIC search of the husband’s name which showed he had been director of six companies in the past, including Company P. This was said to demonstrate he had undisclosed interests.
I do not accept these submissions. The husband may have been inaccurate in preparation of Financial Statements, and understated his weekly income. Exhibit J disclosed matters of limited historical importance. It shows merely that the husband held directorships, some of which were already known to the wife. However, these matters do not lead to any conclusion that the husband has assets or financial resources of any significance beyond what is included on the balance sheet of assets and liabilities.
I accept the husband has a modest earning capacity.
The husband has no superannuation.
The husband has very little property.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
The parties’ children are adults. Nonetheless, it is worth noting that they presently reside with the wife.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
I refer to my earlier discussion which touched on the commitments of the parties.
If Property A remains unsold, the wife will be obliged to continue to service the mortgage secured against the property.
I take account of the evidence that $137,500 of the mortgage debit balance was caused by the wife’s withdrawals to pay money to the children.
If Property A is sold, on the basis of my findings about the position of Ms B, the wife will need to find alternative accommodation..
The husband rents his accommodation and pays $550 per week in rent.
(e) the responsibilities of either party to support any other person;
On the facts of this case, this factor is not relevant.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
Neither party made any submissions under this heading. On the facts of this case, this factor is not relevant.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
Neither party made any submissions under this heading. On the facts of this case, this factor is not relevant.
(h) the extent to which the earning capacity of a party would increase by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
On the facts of this case, this factor is not relevant.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant;
On the facts of this case, this factor is not relevant.
(j) the extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party;
I refer to my earlier discussion and conclusions concerning the contributions of the parties. I have nothing further to add here.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of a party;
The marriage was of 27 years duration. Neither party submitted it had affected their earning capacity.
(l) the need to protect a party who wishes to continue that party's role as a parent;
On the facts of this case, this factor is not relevant.
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation;
On the facts of this case, this factor is not relevant.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
On the facts of this case, this factor is not relevant.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The evidence regarding the wife’s liability to her sister Ms B has been discussed earlier in these reasons, and not accepted.
The wife’s proposed orders in final submissions did not refine the orders sought in the Initiating Application. However, by the close of the hearing, it was clear many of the orders sought in the Initiating Application had become otiose. For example, issues regarding ownership of motor vehicles were resolved on the balance sheet, and do not require specific attention in the orders of the Court.
Assessment of section 75(2) factors
The wife submitted that the Court would make no adjustment for either party for s.75(2) factors.
The husband submitted there is not much to choose between the parties.
The husband highlighted the modest income of both parties, lack of dependants, the parties’ ages, his contributions over 27 years, his lack of superannuation and limited property beyond what the Court may award him in these proceedings.
On weighing all these considerations, I am satisfied the respondent should receive an adjustment of 3% in his favour. Accordingly, the assets of the parties will be divided 62% to the applicant and 38% to the respondent.
It is necessary to consider the question of how the [products/collectibles], which presently form part of the balance sheet, should be dealt with. The husband submitted they should be sold and the proceeds distributed according the percentage entitlements of the parties. I accept this would be the most appropriate way of dealing with these assets. The total value of [products/collectibles] on the balance sheet is $72,000. For the purposes of assessing the justice and equity of the outcome, I will use this value and assume the wife will receive 62% of $72,000 and the husband 38%.
The net value of the property owned by the parties is $1,558,204.00 inclusive of superannuation, and $72,000 worth of [products/collectibles]. On the basis of a 62/38% division, the applicant would be entitled to receive assets with a value of $966,086 and the respondent assets with a value of $592,118.
The applicant presently has net assets of $1,505,153.00 inclusive of superannuation. Her assets therefore would exceed her entitlement by an amount of $539,067.00.
The respondent presently has net assets of $53,051.00, inclusive of superannuation. He therefore needs an additional amount of $539,067.00 to receive his entitlement.
However, upon a 62/38% division of the [products/collectibles] at a value of $72,000, the wife would receive $44,640 of the value of the [products/collectibles], and the husband would receive $27,360. After allowing for a 62/38 division of the proceeds of sale of the [products/collectibles] (assumed at $72,000) the amount payable to the husband should be $541,707 to enable him to receive assets of assets with a value of $592,118.00.
Are the orders just and equitable?
Section 79(2) of the Act provides that:
The court must 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 Full Court of the Family Court of Australia in Manolis & Manolis(No.2) [2011] FamCAFC 105 considered the relevant provisions of the Act in relation to this fourth step. At paragraphs [65] and [66] the Full Court made the following observations, which I adopt and follow:
It can be seen that power to make orders in regard to property is not exhausted after the third step. It is not until orders are made that the power is exhausted. The exercise of power pursuant to s 79 of the Act remains subject to the overarching requirement of justice and equity imposed by s 79(2) until it is exhausted…The section does however oblige the court to “stand back” from its preliminary determination, and consider its impact. So doing may inform the terms of the orders appropriate to produce a just and equitable outcome in those terms. It may result in a re-consideration of s 79(4) and or s 75(2) factors, and a different outcome. Whatever the scope of s 79(2), the court’s determination with respect to it cannot be dependent upon findings or conclusions which are irreconcilable with those recorded in the context of a consideration of s 79(4) or s 75(2).
The High Court of Australia in Stanford (supra) commented at [36] on the meaning of “just and equitable” as follows:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[2]
[2] Stanford & Stanford [2012] HCA 52 at paragraph 36 .
I also take account of the caution expressed in Stanford (supra) at [40] that to conclude that making an order is "just and equitable" only “because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act”.
The husband submitted that any outcome, after 27 years of marriage and both parties close to or at retirement age, which left either greatly impoverished would not be just and equitable. There is force in this submission.
Having carefully weighed all the contributions and s.75(2) factors, I am satisfied the proposed outcome is just and equitable within s.79(2) of the Act.
On a 62/38 percentage division, the applicant and respondent will have the assets and liabilities, as set out in the below table.
Assets and liabilities to be retained by the applicant
Value ($)
Property A
$1,800,000.00
Bank 3 account
$166.00
Motor vehicle 2
$3,000.00
Home Contents
$3,000.00
62% [products/collectibles]
$44,640.000
Super Fund
$19,995.00
Mortgage Property A
-$291,676.00
Loan by Mr A
-$65,000.00
Tax
-$6,332.00
Payment to Husband
-$541,707.00
Total:
$966,086.00
Assets and liabilities to be retained by the respondent
Value ($)
Bank 1 account
$7,133.00
Bank 1 account
$7.00
Bank account
$9,033.00
Motor vehicle 3
$6,000.00
Motor vehicle 1
$15,000.00
Business C
Nil
Home contents
$2,500.00
38% [products/collectibles]
$27,360.00
[Company P] Pty Ltd
Nil
[Business C] Pty Ltd
Nil
Payment from Wife
$541,707.00
Tax
-$9,622.00
Loan by [name]
-$7,000.00
Total:
$592,118.00
Costs
Section 117 of the Act sets out that each party shall bear his or her own costs, subject to the considerations in s.117(2) of the Act.
Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is naturally something that can only be addressed after judgment has been delivered.
The Court proposes to make the orders and directions in relation to any application for costs that might be made as set forth in the orders at the commencement of these reasons.
I certify that the preceding two hundred and seventy-four (274) paragraphs are a true copy of the reasons for judgment of Judge Harper
Date: 18 December 2018
ADDENDUM
After having delivered the Reasons for Judgment and having made Orders on 18 December 2018 the Court became aware that the Orders contained a clerical error arising from an accidental slip with the result that the Orders did not reflect the intention of the Court. The Orders referred to a percentage division of 62% to the Applicant and 42% to the Respondent, which is mathematically impossible, and did not conform with the Reasons for Judgment at paragraphs [259] to [264]. This clearly constituted an accidental slip.
Of its own motion the Court determined to correct the error pursuant to r.16.05 of the Federal Circuit Court Rules 2001 (Cth) (“FCCR”) so that references to “42%” in the Orders be amended to read “38%”.
The Court also became aware that the Reasons for Judgment had been issued by mistake and also contained a number of mistakes and errors arising from accidental slips or omissions.
These are detailed in the Corrections set out below at the conclusion of this Addendum.
Rule 1.05(2) of the FCCR provides where in a particular case the FCCR are “insufficient or inappropriate, the Court may apply the Family Law Rules”.
Rule 17.02A of the Family Law Rules 2004 (Cth) is in the following terms:
Varying or setting aside reasons for judgment
The court may, at any time:
(a) vary or set aside reasons for judgment if the reasons were issued by mistake; or
(b) correct a clerical mistake in reasons for judgment, or an error arising in reasons for judgment from any accidental slip or omission.
The Court is satisfied that the FCCR are insufficient in this case, and in the exercise of discretion the Court should apply r.17.02A of the Family Law Rules 2004 (Cth).
The power in r.17.02A is broad and may be exercised at any time. One evident purpose of the rule is to provide an administrative avenue to remedy clerical errors in Reasons for Judgment or vary or set aside Reasons for Judgment which have been issued by mistake.
Paragraphs [136] and [137] of the Reasons for Judgment delivered on 18 December 2018 found that the Applicant’s sister Ms B was not presently entitled to an interest in the property at Property A. Paragraphs [123], [214], [242] and [254] did not clearly conform with the findings in paragraphs [136] and [137] or the reasoning leading to those findings, and were issued by mistake. The Court is satisfied paragraphs [123], [214], [242] and [254] of the Reasons for Judgment delivered on 18 December 2018 should be varied in the manner specified in the Corrections listed below, to correct the mistakes.
The Reasons for Judgment delivered on 18 December 2018 also contained a number of other clerical mistakes or accidental slips. These cumulatively also support the conclusion the Reasons for Judgment were issued by mistake on 18 December 2018. They also enliven the power to correct in sub-paragraph (b) of r.17.02A, and the Reasons for Judgment should be corrected in accordance with the Corrections listed below.
The Court is satisfied that the Reasons for Judgment should varied and corrected pursuant to r.17.02A in accordance with the list of Corrections set out below at the conclusion of this Addendum.
THE COURT ORDERS THAT:
The Reasons for Judgment dated 18 December 2018 be varied in accordance with the Corrections.
CORRECTIONS (made on 30 January 2019)
Catchwords – insert “Addendum – Correction of Reasons for Judgment pursuant to r 1.05 of the Federal Circuit Court Rules 2001 (Cth) & r 17.02A of the Family Law Rules 2004 (Cth).”
Orders 3(a)(iv)(a), 3(a)(v) & 10 – Orders amended pursuant to sub-rule 16.05(2)(e), (g) & (h) of the Federal Circuit Court Rules 2001 (Cth).
Paragraph 87 line 7 – insert “of an” after “copy” but before “invoice”.
Paragraph 93 line 4 – insert “Camden & Anor v McKenzie & Ors (supra).”
Paragraph 114 line 4 – insert “of” after “4(a)” and before “the”.
Paragraph 123 line 3 – delete “is” insert “may be”.
Paragraph 129 line 8 – delete “This was in substance a repayment of $15,000. lent by him to the parties for the renovations to Property D.” after “$15,000.”
Paragraph 133 line 11 – delete “in” after “found,” and before “Mr A”.
Paragraph 134 line 1 – delete “that” insert “the”.
10.Paragraph 142 line 4 “delete “2018” after “liability”.
11.Paragraph 152 line 2 – insert letter “d” at end of “include” to read “included”.
12.Paragraph 172 line 5 – delete “assistance” insert “assistant”.
13.Paragraph 188 line 9 – insert “made such payments.” after “marriage”.
14.Paragraph 189 line 2 – delete “to” after “income” and before “for”.
15.Paragraph 194 line 1 – insert “on” after “separated” and before “1”.
16.Paragraph 205 line 2 – delete “the” after “regarding” and before “Property B”.
17.Paragraph 214 line 2-3 – insert “who was paid an unspecified amount,” after “except Ms B” and before “either”.
18.Paragraph 242 line 2-3 – delete “be compelled to pay one-sixth of the value to Ms B, and”, insert “need to” after “will”, delete “fins” insert “find”.
19.Paragraph 254 line 1 – delete “suggests that the timing of any payment to Ms B is indefinite. The wife may not be required to pay Ms B for some time.” insert “has been discussed earlier in these reasons, and not accepted.”
20.Paragraph 263 line 2 – delete “plus a half share of the controlled fund” after “superannuation” and before “. He”
21.Paragraph 269 line 3 – insert “would not be just and equitable” after “impoverished” and before “. There”
22.Paragraph 271 item 5 in table under heading ‘Assets and liabilities to be retained by the applicant’ – delete “60%” insert “62%”.
23.Paragraph 271 item 8 in table under heading ‘Assets and liabilities to be retained by the respondent’ – delete “40%” insert “38%”.
24.Paragraph 271 – after item 8 in table under heading ‘Assets and liabilities to be retained by the respondent’ insert the following items:
[Company P] Pty Ltd Nil [Business C] Pty Ltd Nil
0
14
2