PAC v RAM[2012] QSC 161

SUPREME COURT OF QUEENSLAND

[1] The applicant wife, C, seeks a property adjustment order under Part 19 of the Property Law Act 1974 (Qld) (the Act).  The applicant was born in September 1942 and the respondent in February 1927.  They began living together as man and wife in 1984 and separated, after 24 years, in June 2008.  They had no children together.  The applicant had four daughters from a previous relationship, three of whom lived with the applicant and respondent as children of the household until they reached the ages of around 16 or 17.  The respondent also had two children from a prior relationship.  His son was older and did not live in the household.  His daughter did come to stay with the couple from time to time when, during her teenage years, she found herself in financial and personal difficulties.

[2] The applicant wife brought no assets of any significant value to the relationship.  The respondent owned his own home outright at the time they took up together.  C performed most domestic tasks other than to mow the lawn.  She performed most of the parenting in respect of her three daughters, and also cared for the respondent’s daughter at the times she lived with them.  As well, she did work in paid employment outside the household at times during the course of the relationship.  The respondent was self-employed throughout the time of the relationship and the applicant worked in various of the businesses he ran, although she does not contend this was more than in the role of an assistant.

[3] The respondent purchased the houses in which the household lived from time to time during the course of the relationship.  The applicant says that each such house was sold for a profit after they both worked to improve the properties.  The applicant contributed by creating gardens at the homes, as well as making curtains and etc.

Credit Finding

[4] The respondent M contemptuously failed to make proper disclosure in this proceeding, notwithstanding several attempts (by way of interlocutory application) by the applicant to have him do so.  In his evidence, and otherwise from the conduct of his case, it was clear that he had determined not to provide financial information because he perceived it would frustrate the applicant’s legitimate rights in this proceeding.  Likewise, in cross-examination he refused to answer questions, and refused to answer questions responsively, when he thought that those questions were directed at ascertaining the true level of his assets.  By the time of the trial the respondent M was an old man and I accept that he has hearing and other health problems.  However, I also formed the definite view that he pretended not to hear, and pretended not to understand, at various times in order to frustrate the attempts of counsel for the applicant, and my own attempts, to elicit relevant information from him.  His insistence that the documents marked for identification A could not be identified by him, and the frank nonsense which he spoke about exhibit 4 (record of commercial bills maturing) stand out as examples of this.  Also telling was his parrying with counsel for the applicant in relation to a trust he asserted over an investment house, culminating in his triumphant assertion that there were no terms of the trust because it was a constructive trust.  If more were needed, he repeatedly insisted that security levies in random and significant amounts were deducted from the amounts which he received from Yellow Cabs for the lease of his taxi licence.  Exhibit 3 shows that the same amount was received by way of lease payments month after month, year after year, between 2002 and 2009.  Further, exhibit 5 is a certificate of conviction on four charges of financial offences against the social security legislation, which convictions he repeatedly denied in his evidence.  Unless it is corroborated in some satisfactory way, I reject the evidence of the respondent M where it conflicts with that of the applicant, or conflicts with her interests.

[5] The applicant says the respondent was controlling and verbally abusive throughout the course of the relationship.  She cites one or two instances of physical abuse over the 24 year period.  Towards the end of the relationship she became fearful of the respondent and obtained a temporary protection order.  At times, the respondent behaved in a belligerent manner towards the applicant and her lawyers during the course of the hearing.  He took the opportunity presented by the presence of the applicant in the courtroom to make snide and insulting remarks to and about her.  As mentioned, throughout the litigation, he has demonstrated a contemptuous attitude towards the Court process.  At times in his evidence he allowed that he had said insulting things to the applicant, but asserted he was only joking.  I accept the general tenor of the applicant’s allegations of the respondent’s behaviour throughout their relationship.  To a limited extent that is relevant to the issues before me (see below).  I also record I find no sensible evidence to support the respondent’s allegations that the applicant tried to poison him during the last part of their relationship.

Applicable Law

[6] In FO v HAF[1] the Court of Appeal explained:

“… the first step in making a property adjustment order is the identification and valuation of the property, resources and liabilities of the parties.  The second step is the identification and assessment of the contributions of the parties to their pool of assets and the determination of their contribution-based entitlements in accordance with s 291 to s 295 of the PLA.  The third step is the identification and assessment of the factors in s 297 to s 309 of the PLA to determine the adjustment to the contribution-based entitlement.  The fourth step in the process is consideration of the result of these earlier steps to determine whether that result is just and equitable in accordance with s 268 of the PLA.”

Identification and Valuation of Property and Liability of the Parties

[7] The precise identification of the assets of the parties has been difficult because the respondent remains in control of them and has, as mentioned, failed to co-operate with Court processes.  At the termination of the relationship the parties were living in a house in which the respondent remains to this day.  The valuation evidence before me is that it was worth around $380,000 in April 2010 but closer to $350,000 at the time of trial. 

[8] The respondent owns a taxi licence valued at $420,000 at April 2010 and $439,000 at the date of trial.  At least from 2002 the respondent has leased his taxi licence to Yellow Cabs and received a regular monthly income from Yellow Cabs in respect of that lease – see exhibits 2 and 3.  In May-August 2008 he received $1,800 each month from Yellow Cabs; in September-December 2008 he received $1,875 per month, as he did in the months of January-March 2009.  It is evident from exhibit 3 that the amount received from Yellow Cabs each month from February 2002 until October 2007 was $1,600 per month.  This is despite the protestations of the respondent many times in his evidence that the amount varied each month.  There is no evidence as to how much the respondent currently receives per month for the licence but I conclude from the pattern of increase since 2002 that that amount is at least $1,875 per month.

[9] The respondent has the car which he and the applicant used when they were together.  The applicant asserts it is worth $20,000.  The respondent initially said it was worth $18,000 (Court Document 7, December 2008).  In July 2011 he swore that it was worth $9,000.  It is a 2006 Ford Futura.  I find it is worth $9,000.

[10] The respondent has a boat which both parties agree is worth around $5,500. 

[11] There is around $3,000 worth of furniture.  The respondent says he has a bank account with around $1,000 credit balance, but there is no documentary evidence of this and I am sceptical that this may be an understatement.  The applicant has very little cash.

[12] The respondent was particularly non-co-operative as to monies he held on investment.

[13] Clearly enough, the respondent had monies on investment with Colonial First State at some stage.  Exhibit 3 shows receipt of $1,100 on 31 January 2006; $1,505 on 3 January 2007; $11,000 on 26 May 2008 and $3,500 on 14 July 2008.  All these payments are marked on the ANZ bank statements as dividends from Colonial First State.  So is the payment of $14,566 on 20 January 2009, also shown in exhibit 3.  The respondent in an affidavit sworn 25 July 2011 [57] says the amount of $14,566 was a pay out of the total capital amount on deposit with Colonial First State, rather than a dividend.  I am inclined to accept this as correct having regard to the earlier smaller amounts paid by way of dividend in January 2006, January 2007 and July 2008.  I wonder if the payment of $11,000 in May 2008 is also a repayment of capital.  The applicant does not assert that the respondent had more than about $14,500 in Colonial First State – Court Document 23 [85].  The respondent says he used the amount paid to him in January 2009 to pay lawyers’ expenses in this action.  On balance, I accept that this was probably so.

[14] There is evidence that the respondent had an amount of $124,280.49 invested in commercial bills which matured on 26 November 2008 – see exhibits 3 and 4.  It appears from those exhibits that the monies were re-invested in commercial bills that same day for a period of 33 days.  There is a further stray document at Court Document 23, exhibit 28, which shows that at 29 May 2009 the respondent had $116,190 invested in commercial bills.[2]  I infer that is the same investment, i.e., there were not two sums in commercial bills – the applicant does not contend that there was more than one amount in commercial bills.

[15] There is no more recent evidence of this investment or of the earnings from it.  The respondent swears (Court Document 6 [47], [72]) that he has not invested in commercial bills since he sold commercial bills to buy a home at Bli Bli.  This was in 1988.  His evidence at trial was that he had never invested in commercial bills.  Clearly both those assertions are false and, I might add, substantially inconsistent with [92] of his affidavit of July 2011.  No disclosure of commercial bills was made in the respondent’s statement of financial position (Court Document 7, December 2008), when the evidence clearly shows that he had commercial bills at that time.

[16] The respondent has, deliberately, refused to provide disclosure relevant to this in the proceeding because he perceived that would assist the applicant’s case.  The Court has no current financial documentation from the respondent.  He has given two demonstrably dishonest explanations about investment in commercial bills and one demonstrably dishonest explanation as to what became of monies held on commercial bills.  He has not given any creditworthy explanation as to what became of these funds.  There is no evidence that they have passed out of his possession or power.  In these circumstances I treat them as an asset of the relationship and as part of the pool of property I divide between the parties – see s 282 and s 309 of the Act.  I refer to the remarks of Applegarth J in WB v GSH[3] and the authorities cited there.

[17] There is a dispute about the proceeds of sale of a house owned by the respondent at Nerang.  In his affidavit sworn July 2011 – [113]-[115] – the respondent explains how he came to purchase this land and have a house built on it.  He explains how later he allowed his daughter to live in the house.  He asserts in an earlier affidavit (Court Document 6 [76]) that the house at Nerang was at all material times held on trust for his daughter.  He produces no evidence whatsoever of this and asserted, when challenged as to the lack of evidence and lack of terms of the trust, that the trust was constructive.  In the affidavit which is Court Document 6, he says that when the house sold, the proceeds of sale ($120,000) were placed in his name, and likewise held on trust for his daughter.  Once again there is no evidence that this fund was held on trust.

[18] From the affidavit which is Court Document 6, and from the July 2011 affidavit, it is clear that the house at Nerang and the sale proceeds have always been in the respondent’s name.  He has made no relevant disclosure in relation to these matters.  I do not believe his assertions as to the existence of a trust.  They are in my view a manifestation of his preparedness to lie in order to advantage his own financial interests, and disadvantage those of the applicant.  It is noteworthy that the account he gives of matters in his July 2011 affidavit is inconsistent with there being trusts, as he asserts a right to, and use in fact of, the proceeds of sale for his own benefit.  I note that the assertion of the trusts is contrary to what the applicant says was the arrangement whereby the respondent’s daughter paid him rent while she lived in the Nerang house (Court Document 23 [61]-[65]).

[19] The Nerang house was apparently sold in 2001, although the evidence is scant as to this.  The applicant contends that these sale proceeds were the monies invested in commercial bills.  The amounts are obviously similar.  I note that the respondent says the sale proceeds were invested through the ANZ Bank, and that the commercial bills were bought and sold through that bank. 

[20] I note the use of the word “trust” in exhibit 4.  It does not persuade me that the amount in commercial bills was in truth held on trust.  It is one piece of evidence in the context of the whole.  It is not conclusive.  It is not relied upon by the respondent who says he never had commercial bills and denied any knowledge of exhibit 4.  There is no evidence that the amount in commercial bills was the amount received from the sale of the Nerang house.  Even if it were, I do not find that the house, or the proceeds of its sale, were held on trust as asserted by the respondent.

[21] In summary I regard the pool of property available for distribution as being worth $922,000.  This brings into account the house at $350,000, the taxi licence at $439,000; the car at $9,000; the boat at $5,000; the furniture at $3,000, and the funds on investment at $116,000.

Current Circumstances

[22] Since the parties split the respondent has lived in the home they shared.  He has paid the rates ($1,640 per year – Court Document 7) and the house insurance ($322 per year – Court Document 7).  He has received all the income from the lease of the taxi licence and has paid a transport licence of $267 and a taxi security levy of $314 per year in respect of it.  He receives a part pension.  He says he has an account which runs at a credit balance of around $1,000.  The respondent leads a simple life and wishes to move to a retirement home where it will be necessary for him to either buy a unit or pay a substantial bond.  He has medical conditions consistent with his age.

[23] The applicant is on a full aged pension.  She has medical conditions of her own.  She has not worked since separation, which occurred when she was 66 years old.  She has suffered a stroke and has high blood pressure.  She has around $600 in a bank account and estimates her fortnightly living expenses to be around $750.

Contributions of the Parties – ss 291-295

[24] During the course of the relationship the respondent did support the applicant and applicant’s three daughters financially; he paid most household expenses.  The applicant relies almost exclusively on her non-financial contributions to the acquisition, conservation and improvement of the property of the de facto partners and to the welfare of the de facto partners and the family constituted by them and the children who lived with them – see ss 291(1) and 292(1) of the Act.  In assessing these matters, regard is had to the relevant family law cases, and contributions which are non-financial, and as a home-maker, are recognised in a substantial way.[4] 

[25] The relationship lasted for 24 years, effectively the middle years of the applicant’s life (from age 42 to 66), and the middle to later years of the respondent’s (from age 57 to 81).  It is a lengthy period. 

[26] At the time the parties began living together as man and wife, they were both of mature years.  By this time of life the respondent’s working life was largely behind him.  He is an engineer by training and he brought to the relationship significant financial assets, including a house which he owned outright.  He owned three taxi licences.  There is no doubt that he is very interested in money and has worked hard throughout his life.  This is not a case where the de facto partners met while young and one has supported the other, making non‑financial contributions while they together built up assets and wealth.  No doubt the applicant’s contributions enabled the respondent to continue working for a longer period, and more intensely, than he otherwise would have done, but it must be recognised as a significant factor in this case that, by the time the relationship began, the respondent was nearing the end of his working life and had accumulated significant assets.  The applicant’s contribution to his continued ability to work, and the acquisition, conservation and improvement of assets must be seen in that light.

[27] For the applicant it is submitted that her contributions as a home‑maker have, in effect deprived her of the ability to work through that time.  That may be so although, due to her having the sole care of three children, her earning capacity must have been substantially impaired for quite some part of that time in any event.  I accept that there was controlling and verbally abusive behaviour by the respondent throughout the course of the relationship and I take into account that that made the applicant’s task of home-making and contributing to the relationship more difficult.[5]

Identification and Assessment of Factors at ss 297-309

[28] Because of their ages and stages in life, the parties’ earning capacities (s 293) and need to support to their children (s 294) are no longer relevant.  I have already mentioned the age and state of health of each of the de facto partners.  Neither is able to work.  The respondent reasonably enough, wishes to buy into a retirement home.  I have also discussed their financial resources at some length.  Both live simple lives.  Neither applicant nor respondent have dependants.  The applicant receives a full pension; the respondent receives a part pension.

[29] The respondent has had the advantage of paying only rates and insurance to provide himself with a home since they split.  Using a figure of $100 a week over four years, that is a benefit of $19,200.  He has paid insurance and rates of almost $2,000 per year, giving a net benefit over four years of $11,200.  The respondent has also had the advantage of rent paid to him by Yellow Cabs each month.  On the basis of $1,875 per month over 48 months, that amounts to a benefit of $90,000.  He has paid an amount of around $600 per year (transport licence and security levy) in respect of this asset, giving a net benefit of around $87,600.  As well, my view is that he probably has had the benefit of income from a sum of around $116,000 invested over four years.  There is no evidence at all as to what this income has been.  Had it been invested at five per cent per annum it would have made around $23,000 per year.  I bear in mind that the respondent has also had the advantage of the car and furniture in the time since separation.  Making a conservative allowance in relation to monies on investment, I consider that an adjustment of around $45,000 in the applicant’s favour is a just accounting for the fact that the respondent has had the use of the property of the relationship since separation.

Time Limitation

[30] The respondent argued that this application was made out of time.  I interpreted this submission as relying on s 288 of the Act which provides that an application under Part 19 of the Act must be made within two years of the end of the de facto relationship.  This application is clearly within time, having been made in September 2008.

Determination

[31] Having regard to all the matters discussed above, I turn to what is a just and equitable result in accordance with s 286 of the Act.  I consider that a property adjustment order in the proportions of 40 per cent to the applicant and 60 per cent to the respondent is just and equitable.  In rejecting the applicant’s submissions that property be adjusted 55:45 in her favour, I rely particularly upon the fact that the relationship began when the respondent had almost finished his working life and had accumulated substantial assets.  While the de facto relationship was lengthy and the applicant’s contributions to it substantial, it was, for each of the parties, a relationship which lasted for only a part of their life.  Forty per cent of $922,000 is $368,000.  Together with the amount of $45,000 referred to at paragraph 29 above, that gives a total of $413,000.  I make orders which will entitle the applicant to property valued at $413,000. 

[32] I have regard to s 337 of the Act which imposes on me a duty to make orders that, as far as practicable, will end the financial relationship between the de facto partners.  The evidence before me is that the sale of the taxi service licence will produce sufficient funds to pay the applicant the amount to which I believe she is entitled.  I make orders for the licence to be sold and the applicant to be paid from the proceeds.  If, contrary to expectation, the sale of the licence does not realise sufficient funds to pay the applicant then I have granted liberty to the parties to apply for further orders.  I realise that there is a possibility that these orders will not finally dispose of the proceeding, but I find that risk preferable to going on to make orders which operate upon the contingency that the sale proceeds from the licence are insufficient.  The form of the order would become complicated, but more importantly, would involve orders for the sale of the house in which the respondent still resides.  Given the respondent’s age and non-co-operative attitude, I do not want to make such an order unless it is absolutely necessary, and if such an order is made, I would prefer that it be made in circumstances where there is certainty as to the amount to which the applicant is entitled from such a sale so that orders can be made in a focused way.  In the meantime the applicant is protected by a caveat.

[33] I make the following orders and directions:

1. Taxi service licence number 0023081 be sold for market value.  Any contract of sale, and any instrument, notice or form of transfer, is to be signed by the Registrar of the Supreme Court (who is hereby so authorised) in lieu of the respondent.

2. The proceeds of the sale referred to in order 1 (less any reasonable expenses of sale) are to be paid to the solicitors for the applicant, Gary Rolfe Solicitors, whose receipt shall be a good discharge to the purchaser.

3. Gary Rolfe is to pay the proceeds of sale referred to at paragraph 2 of this order, in an amount up to $413,000 to the applicant, when those proceeds are received by him.  I further direct that if there remain any such proceeds of sale, after the aforesaid payment to the applicant, he is to pay them to the respondent.

4. Should the amount paid to the applicant referred to in order 3 above be less than $413,000, the applicant has liberty to re-list the matter before me for further orders and directions.

5. The respondent, at his own expense, and within 14 days of this order, is to deliver to the solicitors for the applicant the following items of property situated in the house at 4 Chiltern Place, Sandstone Point in the State of Queensland:

(a)a vintage or antique sewing machine belonging to the applicant;

(b)art books belonging to the applicant;

(c)a painting of the applicant, and

(d)a stone or concrete cat sculpture belonging to the applicant.

6. Each party to these proceedings is to bear that party’s own costs of and incidental to the proceedings.

Costs

[34] I record that I was asked by the applicant to make an order that the respondent pay the applicant’s costs.  I decline to make that order.  Under s 341(1) of the Act the normal position is that a party to proceedings under this part of the Act bears that party’s own costs.  I do have a discretion under s 341(2) of the Act if there are circumstances justifying making a different order.  I have been critical of the respondent and his attitude to this litigation, but I am not persuaded to depart from the ordinary rule.