Husband fails in property settlement bid for his parents

Husband fails in property settlement bid for his parents

Kappas & Kappas


  1. On 30 January 2017, the property dispute between the parties proceeded initially on an undefended basis. The matter was listed for hearing at 10.00am and the husband did not attend Court until 2:15pm. The husband was fortunate that the wife’s counsel returned to Court at 2.15pm to hand up an amended minute of order. When asked, the husband said his father was ill. I am not satisfied about the husband’s explanation. He made no attempt to contact the Court or the wife’s lawyer until the afternoon. His behaviour needs to be seen in the context of his serial non-compliance with Court orders and his failure to attend Court events.

History of Proceeding

  1. Before turning to the property issues in dispute between the parties it is necessary to refer to the history of the proceedings before me.
  2. The wife filed her initiating application seeking property adjustment orders on 7 August 2015. The wife filed an affidavit of service on 27 August 2015. The husband signed the acknowledgement of service annexed to the affidavits acknowledging that he was served with the documents on 17 August 2015. The husband appeared in person on the first return date on 5 October 2015. Despite this the husband had not filed any material by that date. The Court directed the husband file a response affidavit and financial statement by 4.00pm on 2 November 2015. I also made directions for joint valuation of the two pieces of real estate as well as procedural orders listing the matter for a conciliation conference and a final hearing.
  3. The husband failed to comply with the Court’s directions to file material and also failed to attend the conciliation conference on 15 February 2016 due to the husband’s non-compliance and failure to appear at the conciliation conference. The wife’s solicitor appeared before me that day in open Court and I made further directions extending the time for the husband filed material to 1 April 2016 and ordering that the husband pay the wife’s costs of the conciliation conference. I adjourned the matter for an undefended hearing in the event the husband failed to comply with the orders. I otherwise delivered short reasons for decision in Kappas & Kappas [2016] FCCA 420 on that day which clearly put the husband on notice of what he needed to do if he wished to be heard.
  4. Lawyers for the husband filed a notice of address for service on 29 March 2016 and prepared a response affidavit and financial statement which were filed on one April 2016. Those lawyers were given leave to withdraw from the proceedings when the matter was next in Court on 19 April 2016 and the husband appeared for himself.
  5. I listed the matter for a further conciliation conference and made further directions. Significantly, order 5 required the husband to serve his response and affidavit on his parents in order 6 gave his parents liberty to make file and serve any application and affidavit they wished to make before 19 June 2016. This is significant because of the claim made by the husband and his parents that the parents hold 50% of the interest in in the property Property H1 (“Property H1”). The husband’s parents had the opportunity to agitate their claim by seeking to be joined to the proceedings.
  6. The matter was listed for a second conciliation conference before the Registrar. The conference could not proceed because of the husband’s failure to provide discovery. Detailed orders were made when the husband was in Court with respect to disclosure by both parties on 19 April 2016.
  1. It is significant that the husband failed to make any serious attempts to comply with those orders. The aim of those orders was to provide evidence that would support the husband’s contentions, particularly with respect to contribution arguments, with respect to the two pieces of real estate the parties own as well as the husband’s share trading.
  2. The Registrar requested that the matter be mentioned in Court before me that day. Unusually she appeared in Court and explained that the conference could not proceed as the husband was extremely agitated. That was apparent from the husband’s presentation. The husband did not provide any documents in compliance with the orders. When appearing before me he said that the documents were joint accounts that the wife could just as easily obtained. As will be apparent from those orders they went well beyond joint accounts. I explained to the husband and that if at a final hearing I was satisfied there was deliberate nondisclosure and it may have an impact on the case. I also warned him that if he did not participate in the proceedings in a meaningful way the hearing would proceed on an undefended basis. I made it clear to him that if he wants to make an argument about contributions it is incumbent on him to provide the evidence in support of his case. I also warned him that he would not be permitted to simply rely on documents not previously disclosed if he attended the final hearing with a bundle of documents. Throughout that appearance husband was belligerent and disruptive. Due to his behaviour it was necessary for me to take an adjournment and security were called. The husband’s disruptive conduct continued whilst I delivered all reasons and made further orders, and the husband had to be escorted from the Court room.
  3. In many respects the husband’s ill temperate and disruptive behaviour acts against his own best interests.
  4. If the husband still had any doubts about what his obligations were, the reasons for judgement delivered on 14 July 2016 made it very clear including the consequences of failing to meet his disclosure obligations. One of the husband’s repeated refrains advanced was he wanted his day in Court. Parties of course have the right to agitate the case but they also have obligations, including complying with Court orders and not disrupting Court proceedings. Litigants have the right to the opportunity to be heard. I ordered that the husband pay the wife’s costs of the second failed conciliation conference and also made further orders the husband comply with his disclosure obligations as set out in orders 1 to 3 of the orders made on 14 July 2016. Again the husband failed to comply with those orders. Whilst he filed an affidavit on 4 August 2016 it fell well short of what orders 1 and 2 of the orders made on 14 July 2016 required.
  5. At the first scheduled final hearing on the 7 September 2016 the husband was represented by counsel and also an instructing solicitor. The husband filed affidavits by his parents the day before which were woefully inadequate. His parents were not available for cross-examination. His solicitor filed a notice of address for service the day before the hearing. It was clear that the solicitors had no involvement in the drafting of the affidavits and in fact had no knowledge of them.
  6. The husband’s counsel informed the Court that his client had complied with the previous costs orders. The husband’s counsel also conceded that the husband had failed to provide disclosure and that if his parents were not available for cross-examination then their affidavits would not be able to be relied on. The importance of husband’s disclosure obligations were again emphasised to him.
  7. The matter was not reached because of a parenting trial on that occasion. This was to the husband’s benefit given the state of his case preparation. Unfortunately, they did not utilise it. Whilst it was of assistance to him to have instructed solicitors and counsel it was apparent this was done shortly before the final hearing such that they were not in position to prepare documents on his behalf. His second solicitor filed a notice of ceasing to act on 21 October 2016.
  8. It has also been necessary to have security in attendance at future Court events. My impression is that the presence of security in the Court room had some effect on the husband’s behaviour during the final hearing but it was still necessary to warn him repeatedly not to approach the wife’s counsel, not to pace up and down the Court room and not to stare at the wife. He frequently shouted. Due to the husband’s behaviour the Court sat late in order to complete the hearing in one day.

Agreed facts

  1. The husband was born on (omitted) 1967. He says he is in good health.
  2. The wife was born on (omitted) 1965. She is in good health.
  3. The parties married on (omitted) 1992. They did not live together before they were married. They separated under the one roof in July 2015. The wife moved out of Property H1 in October 2015.
  4. The parties purchased Property H1 in 1991. The husband remains living in Property H1.
  5. They purchased Property H2 in 2011.
  6. The parties have two children, Ms M aged 20 and X aged 17. Ms M lives independently of the parties. X is in his final year of school. He lives in an equal shared care arrangement.

The husband’s evidence

  1. I permitted the husband to rely on all of his affidavits as he was self-represented. The wife’s counsel did not object to this course.

The husband’s affidavit sworn and filed on 1 April 2016

  1. The husband said that for about a year before the parties got married they were looking for a property to purchase. He says they had discussions with his parents about the possibility of them joining the parties to purchase a property.
  2. The parties purchased the property at Property H1 for $120,500. The husband says that he and the wife contributed $62,000 towards the purchase from savings, and he says his parents contributed the other $62,000. He says his parents borrowed $50,000 from the (omitted) Bank to finance their share of the purchase and that the rest came from their savings. He says that it was agreed that his parents would fund 50% of the property but the title was only registered in his and the wife’s name. It is not evidence that they accepted the loan offer.
  3. The husband says he and the wife did not borrow any money to fund their share of the purchase and says after contributions towards purchase of the house, their wedding expenses and their honeymoon he had $33,692.93 in his (omitted) Bank cash management account as at 31 January 1992. The husband annexes that bank statement and provides no other bank statements for that account. When cross-examined the wife said her savings went into that account so that some of that sum represents her contributions. There are no documents to support this. The husband also annexed a loan offer to his parents dated 11 November 1991. The letter of offer does not refer to what real property the loan relates. It is evidence that his parents applied for a loan, nothing more.
  4. The husband says that in November 1994 they demolished the home at Property H1 and over a period of two and a half years built a new home. He agreed and evidenced at the hearing that he and the wife lived with the wife’s parents for three years whilst the home was being demolished and rebuilt.
  5. The husband makes a general statement that he was responsible for designing and building the home as an owner builder.
  6. He says that when the parties lived in the home they paid rent to his parents. He says that the rent was proportional to the interest in the property but that it was significantly discounted as his parents were generous. He says that he continues to pay rent to his parents although it is paid on an ad hoc basis rather than weekly or monthly and sometimes he paid a bill for them in lieu.
  7. The parties purchased the property Property H2 in 2011 for $840,500. They used savings and a loan from (omitted) Bank to purchase the property. The husband refers to himself as being a property developer and Property H2 being his property development project.
  8. The husband claims that the assets of the parties are a 25% interest each in Property H1, a 50% interest each in Property H2, the wife’s jewellery, the contents in the home, and savings in the offset account of approximately $70,000. He also says that he has superannuation of approximately $150,000.
  9. The husband says that the parties have been able to accumulate assets during the relationship as result of their joint endeavours. His oral evidence was different. In his oral evidence he said that he made greater contributions than the wife.
  10. He filed a financial statement on the same day. He deposes to paying his parents $70 a week in rent. Again his oral evidence was different.
  11. In his response filed on the same day he seeks a declaration that the parties hold 50% of the property at Property H1 on trust for his parents and seeks 50% of the ownership be transferred to his parents. He otherwise sought orders that the remaining assets of the parties be divided equally between the parties. The husband sought to retain the two properties.

Husband’s Affidavit filed 4 August 2016

  1. This affidavit contains no paragraphs at all but annexes several documents. The first a letter addressed to the Court from his parents stating that they confirm that they have a 50% interest in the property at Property H1.
  2. The second Annexure is a letter dated 28 June 2016 from the parties’ son, X, addressed to the Court. He states that he asked his mother about what his father had put in writing about his grandparents involvement in the property Property H1. He says the paternal grandparents loaned his parents $20,000 which they repaid. It is surprising that the letter appears on an affidavit filed by the husband, as it does not assist the case. It is concerning that the parties have involved their 17 year old son in their dispute.
  3. The third annexure is a loan enquiry form with the parties’ names and address of Property H1 on it. It states that the loan for $90,000 was issued on 22 March 1996. It is not apparent from the document itself which bank it comes from. The husband placed great weight on this document and insists that the document proves that this is the first home loan the parties took out. The document does not prove one way or another that this was the first loan the parties took out. The wife does not dispute that the parties borrowed $90,000 from the (omitted) bank in 1996.

Husband’s affidavit filed 12 August 2016

  1. In this affidavit, the husband says that he pays for the children’s expenses on an ad hoc basis when required as does the wife.
  2. Throughout the marriage, the husband says he earned almost twice the wife’s salary.
  3. His last employed role was in a (employment omitted) role for (employer omitted) from 2012-2014. He says his base salary was approximately $136,000 per annum plus commission.
  4. Currently he is self employed as a property developer and options trader. He says that Property H2 is the second project and his livelihood. He describes his first project as being Property H1.
  5. The first planning permit for Property H2 was rejected and a further planning application is under way. The husband says that the planning permit application expenses have been approximately $30,000. Despite being ordered to provide documentary evidence he has not done so.
  6. The husband denies that the wife objected to his option trading activity. He says that contrary to the wife’s evidence there were no injunctions made by the Court on 5 October 2015. That is correct. The wife does not assert in her affidavit sworn on 5 August 2016 that the Court made injunctions. She says at [26(b)] that her solicitor told the Court that the wife would be informing the (omitted) bank that she would not consent to any further withdrawals from the account without her specific authority. She goes on to say that the husband attended the bank that day and withdrew $20,000.
  7. The husband claims that he has made significant profits through share trading.
  8. The husband annexes Australian Taxation Office notice of income tax assessments and other tax documents showing his taxable in the as well as the wife’s tax returns in support of his contention that he earned more than the wife during the relationship. I accept that that is the case.
  9. The husband refers to the funds he had in his bank account in January 1992 and says that it has a net present value of over $200,000. There is no evidence of this and in any event it is wrong at law.

Husband’s Affidavit filed 19 August 2016

  1. Husband filed a further affidavit on 19 August 2016 annexing further documents. The first Annexure is a copy of the auction advertisement for Property H1 indicating that the option was due to take place on 21 September. It does not indicate the year but it is agreed that it was 1991. The second Annexure is a hand written undated and unsigned document apparently written by the husband “entitled proposed structure of deal to purchase a home”.
  2. The document refers to initially dividing the capital required to purchase the property equally between the parties and the husband’s parents. It states that the parties would move in and live rent free for two years and that his parents would be compensated by the additional value which would be added to the property through the parties working on the property using their money. After a period of approximately 6 to 18 months the parties would build a new home.
  3. The document then says that when the rent free period lapses the parties have a number of options open to them being:
    1. Selling the property and dividing the money;
    2. Beginning to pay the husband’s parents’ share of the rent to them at market value;
    1. Buying his parents out;
    1. Moving out of the property and renting it out;
    2. Borrowing against the parties’ share of the property to buy a new house. I note here that the parties did in 1996 take out a home loan to purchase a property was not however a home loan taken out on a 50% share of Property H1. I will address this further later in these reasons.
  4. At the bottom of the page there are some calculations in percentages. It is clear that these are proposals rather than a fixed agreement. It refers to 1991 and the parties and the husband’s parents providing $55,000 each to purchase a house of $110,000. It also refers to 1993 with the parties providing a further $60,000 for new work on the property and then has an arrow referring to 67.65% and 32.35% that appears to indicate that the husband’s parents’ interest in the property would decrease from 50% to 32.35%. It also notes “1993 paying rent” and says” we pay 32.35% of it.”
  5. The second paged is headed “Benefits”. It then has two sections headed “Us” and “Parents”.
  6. The following points made under the heading “Us”:
    1. “Debt not necessary;
    2. Small initial investment;
    1. Living property worth more than investment reflects;
    1. Get into property before increase:
    2. Shared risk;
    3. Flexibility in choice at any point in time.”
  7. The following points are made under the heading “parents”:
    1. “ Small initial investment;
    2. Investment guided by more knowledgeable minds (us);
    1. Shared risk;
    1. No administrative responsibility;
    2. Capital appreciation and/or revenue after 1993.”
  8. The last Annexure to the affidavit is a copy of the sale receipt issued by (omitted) Real Estate dated 21 September 1991 showing the parties paid the deposit by cheque in the sum of $12,050. I observe that the husband has not provided any bank statements other than the single page annexed to his affidavit. This falls a long way short of his disclosure obligations and what he was ordered to produce.

The husband’s affidavit filed on 1 September 2016

  1. This affidavit refers to his outline of case filed separately on the same day. It also lists other documents which are in fact annexed to his case outline rather than the affidavit. As the husband represented himself, I am prepared to treat those documents as the annexures to his affidavit.
  2. He annexes a document entitled “account records account activity” dated of 1 September 2016. The husband claims he made significant financial contributions though share trading. He says that this is his e-trade account activity record. Looking at the document in reverse chronological order, the last page begins with an entry dated to March 2011 and has several other entries throughout the year of 2011. There are some entries for 2012 and 2013 but not to the same extent. The only activity in 2012 through to 7 June 2013 is a credit interest payment of one cent. There are limited entries in 2013 ending on 9 December 2013. There are no entries at all until 6 July 2015. There are then entries throughout 2015. It is apparent from the list of transactions 2015 is the most active year in terms of transactions made. From 29 February 2016 until 1 September 2016 there are only minimal interest payments and no other transactions. The printout shows activity. It does not show profits made or loss made, and there is no explanation given in the body of the husband’s affidavit as to how this document should be interpreted. It is apparent that husband did stop trading well before separation then started again after separation. The lack of activity from February 2016 is consistent with the husband’s evidence that the wife approached the bank to freeze the accounts. The document does not support contributions argument on the basis of share trading.
  3. The husband places great significance on the second Annexure. The original was tendered as an exhibit. It is a letter from (omitted) Conveyancing Services dated 15 November 1991 setting out the cheques required for settlement of the purchase of Property H1 on 20 November 1991. On the reverse side of the letter in handwriting, which appears to be the husband’s handwriting, there are several calculations, including the calculations with respect to disbursements as shown in the conveyancing letter. It refers to the figures setting out amounts with the heading “Mr Kappas” and “Ms Kappas” (being the parties) in another column headed “mum and dad”. The husband says it sets out the calculations of what he and the wife paid and what his parents paid.
  4. There is another heading further down the page entitled “Mr Kappas’ dad” with some hand written numbers and commentary.
  5. There are two further documents which are headed “(omitted)” which appear to be file notes of that company. On both pages there are several handwritten numbers including percentages and a description for some of them saying “mine” and then other figures which have the word “Dad” next to them some with ticks and some with crosses.
  6. The next Annexure is a largely illegible letter from (omitted) bank, being a home loan offer in the sum of $50,000 dated 11 November 1991 addressed to the father’s parents. It is not evidence that the parents took out a home loan. It is not evidence that the husband’s parents took out a home loan in order to purchase an interest in Property H1. I have referred to this document earlier.
  7. The last annexure is a one page document entitled “Particulars of Sale with respect to the purchase of Property H1”.

Husband’s affidavit filed 18 January 2017

  1. The body of this affidavit refers to attachments, being car valuations and property valuation statements. Despite this no documents are attached. Much of the content of the affidavit is argument and not evidence. It is critical of a letter the wife’s solicitor sent to his parents in September 2016. There was nothing inappropriate in that letter. In fact the letter was a constructive attempt to obtain further particulars about his parents’ claims to any interest in Property H1 given the woefully inadequate detail in the affidavits they filed.
  2. The husband complains that the wife froze all their accounts making it impossible for him to earn a living from options trading since October 2016. He also complains about the wife withdrawing $900 a month since November 2016 for half the rent for Property H1. Up until October 2016 the husband retained all of the rent of approximately $1800 a month. The husband complains that the wife was aware that the property was vacant in December but she deducted funds anyway. He also complains that there were various work and costs needed which she did not contribute to. He provides no particulars and did not provide evidence in that respect. He referred to a letter provided by the real estate agent but does not annex it. The husband complains that he was paying the utility bills for both properties and that the wife was obliged to contribute as well. In circumstances where he had the benefit of occupation of Property H1 to the exclusion of the wife, and up until October 2016 was retaining the whole of the rental proceeds from Property H2 is simply not reasonable to expect the wife to contribute to those costs and is properly a matter for him.
  3. The husband goes on to make complaints about the wife being malicious and deliberately putting the (omitted) Bank account into overdraft by withdrawing $10,000 in September 2016 and refusing to permit him access to the $22,000 in the trading account which was frozen by her. He talks about copying the children into correspondence, exhibit A, which is a vile email addressed to the wife’s solicitor. He was unrepentant about copying the children into that email.
  4. Again the husband complains about various expenses he has had to make without providing any documents with respect to them, despite him being on notice of his obligations to do so for many months. The husband goes on to complain about the wife’s seeking further personal items from the home and says that he understood that the wife had collected them but went on to list particular items. He said that they would be provided to the wife shortly before the hearing. He took a completely different position at the hearing.
  5. He goes on to complain about the denial of his parents’ interest in Property H1 and says his parents are in the process of giving him a power of attorney and wish him to “exercise [his] judgement over their interest in Property H1”. He then goes on to respond to some points in the wife’s affidavits which she was also cross-examined about.
  6. The husband complains about the valuation of the property and purports to give evidence about what he thinks the properties are actually worth. He is not a valuer and is not able to give that expert evidence. The wife obtained updated valuations just prior to the hearing and was granted leave to file in Court an affidavit by the valuer annexing those valuations as at 24 January 2017, Property H1 was valued at $1,350,000 and Property H2 was valued at $1,200,000. Both amounts are higher than the earlier valuations. The husband’s complaint was that the valuations were too low. If the wife were to accept his values the husband would be substantially worse off. The Court explained to the husband that if he wanted to challenge the valuations he would need to cross examine the valuer and that should he wish to do so he would have that opportunity. He declined that invitation. The husband’s position at the hearing also changed in that he now agreed that Property H1 should be sold. As that is the case the market will determine the value of the property.

Husband’s affidavit filed on 27 January 2017 and case outline

  1. The husband filed a further affidavit which simply refers to an updated case outline which he filed separately on the same day. The case outline makes further assertions about what he thinks should be the financial adjustments including a claim that the wife has $25,000 in jewellery. He asked no questions about jewellery and there is no evidence about the wife’s jewellery, let alone it having a value of $25,000. The husband also refers to costs associated with Property H2 which again he has provided no evidence for and cannot be taken into account in those circumstances.

Affidavits by the husband’s parents

      1. The husband filed one affidavit by each of his parents on 7 September 2016. They are in identical terms and say the following in its entirely:
        Please be advised as per our letter previously submitted by our son in affidavit that we confirm we have a 50% interest in Property H1, entrusted through and maintained by our son Mr Kappas since it was purchased in 1991, in a verbal agreement made at the time.


We borrowed $50k from the (omitted) Bank and together with our cash savings we handed over to Mr Kappas the total required for a share which he then completed the settlement of the property in 1991.


Our son advised us we did not need to go on title as we trusted each other. When we envisaged the property being sold we would receive a 50% share back, whether our son and his wife would buy our share out or whether the house was sold on the market.

Cross examination of the husband

  1. The husband wished to place emphasis on the fact that he has originals of documents from 1991 and said that fingerprints could be used to verify the authenticity of those documents, Exhibit D. That is somewhat missing the point. The real issue is what does the content of the document prove?
  2. The husband was unable to say when this document was written. He says it stands to reason that it was prepared prior to settlement of the purchase of the property because it has some calculations with respect to the settlement. He said after 25 years he could not be sure. He then said that his parents took out a loan to make up the difference to their equity in cash. He was then asked if he was making his parents available to give evidence and replied in the negative.
  3. The wife’s counsel put to the husband that he would be making a submission to the Court that the husband’s failure to call his parents was because his parents could not give any evidence that would assist his case. The husband replied that they could not say anything more than what is in their affidavits. Their affidavits contain bare assertions and no evidence. They provide no detail as to their circumstances and how the alleged agreement came about.
  4. It was put to the husband that handwriting on the back of the conveyancing letter must have occurred after it was received. This is a matter of logic.
  5. The husband was cross-examined about the (omitted) Bank loan application document. It shows the husband as the principal borrower and the wife as the additional borrower. In answer to the question who filled out the documents, the husband said he remembered it vividly and says the bank failed to provide the documents to them in a timely matter and they could not have the opportunity to review them. He said they both had to sign the document on the day they received the document, about a week before settlement. The husband was very keen to give that answer before being asked about the content of document.
  6. The husband said that the bank was primarily dealing with him and received the information from him. The document states that the parties started living in Property H1 in January 1992. Again before being asked the question he said “if you’re suggesting that my parents aren’t noted on this I can concede that”. Despite being warned by me that he needed to listen to the whole of the question before jumping in and answering, he continued to interrupted mid-question and give evidence he wanted to give.
  7. He agreed that the document refers to him and the wife owning the property outright. He says that both he and the wife represented to the bank that they owned the whole of the property and did not refer to his parent’s ownership.
  8. The husband says that he paid his parents rent. He then said that he did not want to disclose that to the bank. He went on to say that they both lied to the bank. I do not accept his evidence on this point. I find that on the balance of probabilities the loan application is accurate. It does not refer to his parents because they do not have an interest in the property.
  9. The husband agreed that they lived in Property H1 for about two years before moving out to demolish it and that during that period they lived with the wife’s mother for about three years. The husband denied that during that period he used that opportunity to save money. He then said he was saving money but he was not relying on this he had earned had significant money earned “in a number of ways previously”. He agreed that they took out a loan about halfway through construction which is consistent with the $90,000 loan the parties took out in 1996.
  10. It was put to the husband that it is just not credible that he only had a single page of a bank statement from 1991. Despite having opportunity he gave no explanation whatsoever as to how he has that one page and not any other instead he was argumentative and unresponsive. My impression is that the husband was determined throughout the proceedings to only provide documents that he thought persisted his case and with respect to any other document that was requested of him including for example his superannuation statements he simply failed to comply with orders. His bank statement from February 1992 shows that he has about $33,000 in the account. He says he used those funds to invest into (omitted) shares. He then said he used about $20,000.
  11. The husband’s evidence with respect to his financial position in the purchase of Property H1 leaves the Court with more questions than answers. The husband was unable to give evidence as to how much the build of the house cost. This is curious given his ready ability to give evidence about various other figures around the same time and earlier.
  12. The husband agreed that during this period the wife was working hard to save money as was the husband. It was put to him that the wife says she was working hard to repay the loan to his parents. The husband replied that that was farcical but then went on to say that “we were making payments for the equity my parents had in the home”. He then went on to say that the payments were for rent to the equity they did not hold. He could not say what the amount was. Nor could he say how much income he was earning. He says they paid his parents back on an ad hoc basis. He said that they did not pay rent whilst they were not living in the house but he could not be sure. He then gave a flippant answer referring to “Mr Trump” and “alternative facts”.
  13. The husband agreed that he was ordered to provide documents with respect to his superannuation and that the wife’s lawyer had written to him requesting that. He again rather flippantly said that he has lost super and was not interested in it.
  14. The husband said that he has not been in paid employment since the parties separated and said he has applied for a few jobs with an income ranging from $70,000 to $350,000 a year. He said he had applied for five jobs in the last seven months. He agreed that he is qualified to engage in (omitted) jobs, in which he was previously earning $100,000 plus a year.
  15. The husband conceded that there were no funds in the (omitted) Bank manager account when the parties separated.
  16. The husband was then cross-examined about the withdrawals from the parties’ bank accounts. The husband does not dispute that he made withdrawals totalling $103,000 post separation and the wife withdrew $20,000. As a result of this concession it is not necessary to set out the transactions.
  17. My impression of the husband’s oral evidence overall is that he was most concerned with repeating his version of events rather than listening and answering the questions he was asked. He was argumentative and unresponsive. I am mindful that the husband found the hearing stressful and was self represented. Nevertheless I did not find him to be a credible witness.
  18. The husband was then cross-examined about the rent received from Property H2. The husband says that the rent does not go directly to pay the loan but is deposited into the access account. It is clear from his own evidence that the rent has not been used to pay the mortgage since separation. Rather the offset account has been used to pay the mortgage. As no payments have been made into the offset account the parties indebtedness to the bank has been increasing since the parties separated.
  19. From September 2015 until September 2016 the husband has received the whole of the rent and used that for his expenses without paying the mortgage. Since September 2016 the wife has taken half of the rent.
  20. The husband complains that the wife withdrew the last $10,000 putting the account into default. It is not clear which account he is referring to. He went on to claim that since September 2016 he has been depositing funds into the offset account. He has not provided any bank statements of his showing this. He then said he has been making cash deposits.
  21. At [14] of the wife’s affidavit sworn on 16 January 2017 she agrees that the husband has made three deposits since the parties separated as follows:
    1. $3,000 on 18 October 2016;
    2. $2,600 on 11 November 2016; and
    1. $2,860 on 16 December 2016.
  22. The bank statements that the wife tendered show these deposits. There have been no other deposits to that account since separation.
  23. The husband claims that he used the cashed he withdrew from the bank to pay the architect, town planner, and traffic engineer, on VCAT fees and council fees, to purchase a car, and on living expenses. His answers were somewhat confused as he gave contradictory answers. His evidence is that he took the amounts totalling $103,000 in cash. He claims he has a little left. When pressed he said “might be $5,000.” The husband has failed to produce a single document with respect to his alleged expenditure

The wife’s evidence

  1. The wife has filed three affidavits in these proceedings.

Wife’s affidavit filed 7 August 2015

  1. The wife filed a brief affidavit with her initiating application. She did not rely on it during final hearing. The husband listed it as a document he relied on and he cross-examined the wife about paragraph 4 where she says that at the time of the marriage neither party had any significant assets. This is inconsistent with her subsequent affidavit.

Wife’s affidavit sworn and filed 5 August 2016

  1. The wife refers to expenses she is paying for their son. To the extent of the parties’ dispute what they are paying for their son is a child support issue. In any event it is apparent from both their evidence that that each are making some contributions towards his expenses and the son is living with each of them in an equal shared arrangement. I will not comment on this further.
  2. She says that she continues to pay private health insurance for the family which includes the husband. The husband did not challenge that evidence.
  3. The wife continues to be in employment at a (employer omitted) and refers to her hours and income. She says the husband has not been in paid employment since April 2014 that when he was working she estimates that his income was between $100,000 and $120,000.
  4. At [19] the wife says that the husband told her he has resumed share trading on 5 July 2015. Prior to that he had not been actively share trading since 2011. In the following paragraph she says he used the (omitted) Bank accounts including the Equity Manager Credit facilities without telling her.
  5. At [26] she sets out the withdrawals the husband made and annexes bank account statements showing the increasing indebtedness.

Wife’s affidavit filed and sworn on 16 January 2017

  1. In her third affidavit the wife annexes several documents including the loan application the parties made to (omitted) Bank for the purchase of Property H2, a Redbook valuation for her Toyota (omitted) and her superannuation statement showing the value of her superannuation entitlements as at 14 January 2017.
  2. In addition she annexes correspondence between her lawyer and the husband. Annexure K6 is an email from the husband to her solicitor dated 16 June 2016. The husband complains about not receiving documents. He refers to his parents’ interest and after using highly offensive language he says that apart from the issue of his parents’ interests there is hardly anything else in dispute.
  3. Annexure K7 is a letter from the wife’s solicitor to the husband’s parents 8 September 2016. In that letter her solicitor refers to the affidavits prepared by them handed up at Court. He asks them to provide documents supporting their claim and notes that the value of their claim is $600,000 given the valuation of Property H1. He also refers to the construction carried out and the fact that the parties borrowed money to fund that. He makes it clear that the wife does not accept their claim.
  4. Annexure K8 is an email response which says it is from the husband’s parents but is sent from the husband’s email address. Most unfortunately the children are copied in. The email is dated 22 December 2016. They say their son speaks for them and they use his email address. Their email does not advance matters but simply repeats what they have said earlier. They provide no further detail and no document. They call the wife a liar and a thief.
  5. Finally the wife annexes a list of personal items she says she wants to collect from Property H2. She says that since she moved out in October 2015 she has made several attempts to gain access to the home to retrieve her belongings but the husband has refused her access.

Cross-examination of the wife

  1. The husband cross-examined the wife about the inconsistencies in her first two affidavits with respect to the assets she had at the beginning of the relationship. In her first affidavit at [4] she says neither of them had any assets of any significance at the beginning of the relationship. In her second affidavit at [35] she says they had about $40,000. She says she had about $30,000 and the husband had about $10,000. When asked to explain the inconsistencies she said “the second one is correct, only because the first one was a vague answer”. That is not a satisfactory explanation for what is a significant inconsistency in her evidence. I do not accept that she had the greater savings than the husband at the commencement of their relationship.
  2. The wife was cross-examined about the funds the husband had in his (omitted) bank account in February 1992 the sum of approximately $33,000. She says he had that sum after she transferred her funds into the bank account.
  3. In the course of his cross-examination of the wife the husband claimed that he attended the bank and obtained title search which showed the parties did not have a loan in 1991. He has failed to produce this document which is surprising (if it exists) given the fact that the only documents he has disclosed are documents which he thinks support his case.
  4. The wife does not dispute that the parties borrowed money from the (omitted) bank in 1996. The husband relies on a printout with respect to loan. The document itself also is not identified as being from the (omitted) bank, however it refers to the amount the parties agree that they borrowed. What the document does not prove, despite the husband’s insistence to the contrary, is that it was the first mortgage the parties took out.
  5. The wife says that she does not know how much they borrowed in 1991. She says they borrowed $20,000 from his parents because that is what the husband wanted to do. The wife said that at the time of the husband’s bank account statements showing $33,000 the parties had not yet set up joint accounts.
  6. The husband then attempted to cross-examine the wife about his parents’ financial circumstances in 1991. That of course is one of the very matters on which his parents would have given direct evidence and could have been cross-examined. It was inappropriate in those circumstances the husband cross-examine the wife about the very issues that he was on notice of and that his parents could have given if they chose to do so. The wife disagrees that the husband’s parents provided half of the funds for the cost of Property H1.
  7. The husband cross-examined the wife about the loan offer document offering his parents a $50,000 loan. Again the husband failed to appreciate that all this document can prove is that his parents were offered a loan. The document says “we are pleased to advise that your application for a loan to purchase your home…”. When reading out that sentence the husband then said that the document is false because they owned their home. As pointed out to him that he was the one relying on this document and now was saying it was in error. The husband again attempted to cross-examine the wife about whether or not his parents and he spent money to improve their home since 1991. Again it was not proper for him to seek to cross-examine the wife about his parents’ financial circumstances given that he had the opportunity to have his parents give evidence in Court and put on affidavits that actually gave that evidence. As has been indicated above, he was well aware of that and the consequences if he did not do so.

The parties’ credibility

  1. I am mindful that as the husband appeared without legal representation he did not have a filter and that his belligerent disrespect is not a factor that should influence the outcome of the property proceedings nor has it. I make this statement for his benefit.
  2. When assessing the credibility of the parties in the witness box I find that generally the wife was more credible than the husband. At several points during the husband’s evidence he was non-responsive.

Conclusions with respect to husband’s parents

  1. The husband has failed to make out his case. When the case was before me on 7 September 2016 the husband was legally represented. The final hearing not reached in that occasion.
  2. The husband had filed affidavits by his parents the day before. The husband was present in Court. His counsel conceded that if the husband sought to rely on those affidavits his parents would need to be available for cross examination.
  3. The issue of non-disclosure was also raised and the paucity of the documents the husband had provided with respect to his parent’s interest in Property H1.
  4. The husband was in Court when the issues were discussed and had the benefit of legal advice. It is likely that he made no real attempt to cure the problem.
  5. As noted in [6] of these reasons, the parents were given the opportunity to seek to join the proceeding and agitate their claim. They have chosen not to do so and have also chosen not to make themselves available for cross-examination.
  6. The wife’s counsel referred to the decisions of Vadisanis & Vadisanis & Anor [2014] FamCAFC 97 (“Vadisanis”) and Atuk & Atuk & Anor [2016] FamCA 179 (“Atuk”). In the first case the intervening party was the mother of the husband. She sought a declaration that the parties were indebted to her. In that case there was agreement that she advanced money to parties. The issue was the characterisation of those advances and the legal and equitable effects of them.
  7. In Vadisanis, the Full Court considered the presumption of advancement. The presumption applies to a relationship between parent and child. Is it that something to a child is presumed that the parents of the child beneficial interest in that. The presumption can be rebutted. The Full Court observed that the intervener had with respect to but the presumption and that beneficial interest is determined at the time of acquisition. Both Vadisanis and Atuk discuss the well-known High Court decision of Calverly v Green [1984] HCA 81; (1984) 155 CLR 242 and the comments made by Gibbs CJ with respect to the presumption of advancement.
  8. In Atuk Foster J said at [83]:
    As a consequence of the relationship of mother and son the presumption of advancement arises and as there is no evidence to displace such presumption any presumed resulting trust is displaced in favour of the husband holding the legal and equitable title to the property.
  9. Foster J also referred to the case of West v Mead [2003] NSWSC 161 and set out the following at [87]:

In West v Mead [2003] NSWSC 161 Campbell J considered what was to be established before such a trust could be imposed:
First, it is necessary that there be both a joint relationship and endeavour, in which expenditure is shared for the common benefit in the course of and for the purposes of which an asset is acquired. The scope of the joint venture in which the parties were engaging may be of relevance and as Deane J in Muschinski considered, may change from time to time.
Secondly, the substratum of that joint relationship or endeavour must have been removed or the joint endeavour prematurely terminated “without attributable blame”.
Thirdly, there must be the requisite element of unconscionability – it would be unconscionable for the benefit of those monetary and non-monetary contributions to be retained by the other party to the joint endeavour.

  1. The circumstances in Atuk were similar to Vadisanis. In Atuk the husband’s parents contributed to purchase Property H1. At [67] the Court referred to the fact that at the time the house was purchased the husband represented to the mortgagee that he was buying the house for him and his parents to live in. He did not suggest that he had any intention that his parents had in beneficial interest in the house. The Court discussed the law with respect equitable trusts.
  2. Discussing the case of Atuk counsel drew attention to [80] with respect to the reference to the principle advancement, the presumption is that the equitable title to the property is the same as the legal title unless that presumption is rebutted. In some circumstances it has been found that the legal title holder holds the whole or part of the title on trust for another party as a result of a resulting trust or a constructive trust.
  3. The fact that the husband had $33,000 in his account after the settlement of the purchase of Property H1 is not consistent with needing his parents to purchase half of the property.
  4. The loan offer addressed to the husband is nothing more than that – an offer. It does not prove that his parent’s borrowed $50,000. It certainly does not prove that they borrowed $50,000 to purchase a half share of Property H1. The offer itself is not a complete document. It does not say anything about what representations were made to the bank about what the loan was for and what the financial circumstances of the husband’s parents were.
  5. It seems unlikely that the husband’s parents would take out a mortgage, presumably secured over their own property, to assist their son purchase a property without their son having to take out a mortgage himself.
  6. The evidence does not support a finding that there was any such joint endeavour between the husband and his parents. At its highest the evidence shows that consideration was given by the husband to various options for the parents investing in the property.
  7. In reliance on the principles set out in that Jones v Dunkel (1959) 101 CLR 298 the wife’s counsel asks the Court to draw an adverse inference against the husband with respect to his failure to cause his parents to give evidence being that he failed to call his parents as witnesses to give evidence because the evidence would not have assisted his case. He referred to recent decisions of Owen & Owen [2016] FCCA 2130 and [100] of Judd & Cornell-Judd [2016] FamCA 390 at [100] which apply the principle. I am satisfied then considered the whole of the evidence that it is appropriate to draw such an adverse inference here as well.
  8. I accept the wife’s counsel’s submissions that it is significant that the husband represented to financial lending institutions that he and the wife were the sole titleholders of Property H2 and the sole purchasers of Property H1. He goes on to submit that the Court will never be in a position to know whether the funds were borrowed or advanced by the husband’s parents because the husband and his parents have chosen not to provide any evidence.


Related articles

Your passionate team of family lawyers

Let’s work out your next steps together. Book your free consultation to start the process.