A and A

[2011] FCWA 98

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT : FAMILY LAW ACT 1975

LOCATION : PERTH

CITATION : A and A [2011] FCWA 98

CORAM : THACKRAY CJ

HEARD : 23 & 24 MAY 2011

DELIVERED : 14 NOVEMBER 2011

FILE NO/S : PTW 4647 of 2003

BETWEEN : Ms A

Applicant Wife

AND Mr A

Respondent Husband

AND

F Pty Ltd

Intervener

Catchwords:

PROPERTY - Settlement in relation to a long and volatile relationship - Where the wife became bankrupt on her own petition several years after separation - The parties' contributions were of roughly equivalent value had it not been for the husband's violence - The wife's contribution during the marriage were made far more difficult because of the conduct of the husband - The s 75(2) factors do not favour either party - Wife to receive a lump sum from the proceeds of the sale of the matrimonial home after certain liabilities discharged - The remaining funds from the sale of the matrimonial home to be distributed equally between the parties

Legislation:

Family Law Act 1975 (Cth), s 75(2), s 79(1)(b), s 79(4), s 79(12)

Category: Reportable

Representation:

Counsel:

Applicant : Self Represented Litigant Respondent : Self Represented Litigant Intervener : Ms Pivac

Solicitors:

Applicant : Self Represented Litigant Respondent : Self Represented Litigant Intervener :

Case(s) referred to in judgment(s):

Kennon v Kennon (1997) FLC 92-757

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1I am required to determine a property settlement dispute between [Ms A] and [Mr A] arising out of their long and volatile relationship. The parties separated more than seven years ago. The proceedings commenced more than six years ago. The case was never properly ready for trial. By the time it did reach trial, both parties were self-represented, the wife having been bankrupted by costs incurred in the litigation.

Brief background

2The husband was born in December 1945 and is therefore 65 years of age. He describes himself as a pensioner. He has been married twice before and has four adult children from those marriages.

3The wife was born in April 1950 and is therefore 61 years of age. She has also been married before, and has three adult children. She is employed as a property manager.

4The husband and wife commenced cohabitation in 1986 when the wife went to work in the hotel the husband was operating in [the country town N]. From then, until their final separation in July 2004, the parties were involved in an “on-again, off- again” relationship, which, according to the wife, was characterised by the husband’s violence and infidelity.

5The wife changed her surname to the husband’s name soon after they commenced their relationship, however, they did not marry until July 1996. I accept the wife’s evidence that she changed her name because the husband was not free to remarry at the time, and he felt it would be better for business if they appeared to be married.

6The husband claimed that the wife left the relationship on at least 25 occasions between the commencement of cohabitation and final separation. The wife estimated they had separated, on average, about twice a year. It is impossible to determine which estimate is the more accurate – and ultimately it does not matter. The longest separation was for two years, but there were many other periods lasting many months.

7There are no children of the marriage. The wife’s youngest child from her previous marriage was aged about 14 at the commencement of cohabitation, but he left school in about 1987, and was thereafter largely self supporting.

8During the relationship, the parties were involved in owning or running two hotels in the country town N, another in [the country town L] and a tavern in [a metropolitan suburb T]. Their involvement in all of these businesses ended in disputation between the husband and others involved in the enterprise, whether co- owners or landlords. Each business was financially unsuccessful, save for the income, including “cash money” that was generated by the businesses whilst operating.

9The only residential real estate the parties acquired during their relationship was the former matrimonial home in [a metropolitan suburb E], which is also the only jointly owned asset, and in which the husband has lived since the separation. This dispute largely revolves around what is to become of that property, the title to which is subject to many encumbrances.

The litigation loan

10 The wife filed her application for property settlement on 22 September 2005. In September 2006, she obtained a litigation loan from [I Limited] (now known as [F Pty Ltd]). The wife gave I Limited an equitable mortgage over her interest in the former matrimonial home and agreed to meet the high rate of interest required. The total amount drawn on the facility was $50,000.

11 The wife became bankrupt on her own petition on 21 May 2010. At the time of her bankruptcy, the wife owed $85,000 on the litigation loan. F Pty Ltd obtained leave to intervene in the proceedings by orders made on 22 December 2010.

The effect of the wife’s bankruptcy

12 By operation of s 79(1)(b) of the Family Law Act 1975 (“Cth”) (“the Act”) , the Court is permitted to make such orders as it considers appropriate altering interests in property vested in the wife’s trustee in bankruptcy, as well as dealing with property in the name of the husband.

13 The wife’s bankruptcy trustee was given notice of the proceedings, but advised that he did not intend to participate and would abide the Court’s decision. Accordingly, because the wife’s trustee in bankruptcy is not a party, s 79(12) of the Act has no application. The wife was therefore permitted to take part in the trial as if she were not bankrupt. She is aware that her assets have vested in her trustee and the trustee will be entitled to the fruits of her claim, albeit she would be entitled to any surplus in her bankrupt estate.

Orders sought

14 The wife’s Application did not specify the orders she sought; however, she advised the Court at trial that she wanted to receive her half interest in the former matrimonial home. She otherwise proposed that she retain the modest assets in her possession and have no responsibility for any debts, except those proven in her bankruptcy.

15 The husband’s Response also did not specify the relief he sought, but he filed a Minute shortly prior to trial setting out the orders he proposed. He wanted to retain the former matrimonial home, on the basis that he would assume liability for the mortgage and remain responsible for the debts, other than those in the wife’s name. He also wanted the wife to return to him a dining room suite, gold nuggets, gold bars and diamonds.

16 Just before trial, the husband filed an application designed to set aside the equitable mortgage in favour of F Pty Ltd. Ultimately, there was no dispute about this issue. F Pty Ltd accepted that its claim would be restricted to the remainder of the wife’s interest in the home after adjudication of the husband’s entitlement.

17 Counsel appearing for F Pty Ltd was assured at the commencement of the trial that whatever the Court might think about the litigation funding arrangement, the orders ultimately made would ensure its interests were protected. Notwithstanding this assurance, counsel advised she had been instructed to remain to observe the entire trial.

Credibility and disclosure

18 Notwithstanding his lack of success in accumulating personal wealth, I found the husband to be a fairly astute businessman. I consider he had a better knowledge and understanding in the first place, and therefore a better recollection, than the wife of many of the details relating to financial transactions during their marriage.

19 Otherwise, I found him to be an unreliable witness whose sanctimonious affidavit evidence amounted to little more than a self-serving reconstruction of the relationship. His oral evidence was partly directed at propping up this reconstruction, but otherwise was largely aimed at heaping scorn on the wife.

20 The wife’s evidence was suspect in relation to some of the financial transactions, especially about who had paid the mortgage on the matrimonial home; however, I consider that her evidence concerning the husband’s violence toward her was reliable, albeit I accept that in some peripheral respects her evidence may have been exaggerated. I also consider that the wife was inclined to underestimate the extent of her gambling.

21 I accept the wife did not provide an adequate explanation why amounts totalling nearly $22,000 had found their way into her personal bank account in [the town J]. However, the transactions occurred more than 10 years ago and it is not surprising the wife was unable to recall details of all that had occurred during the turbulent relationship.

22 Both parties complained about the failure of the other to provide disclosure of relevant documents. I accept each of them probably had good reason to complain; however, I am not persuaded that the failure to make proper disclosure was the result of any deliberate attempt to conceal information. They were involved in many businesses, and just as many disputes, all of which would have led to the creation of many documents. Neither party gave the impression of being “well organised”, and I accept it would have been difficult for them to provide an adequate disclosure. I consider it noteworthy, however, that while the husband was adept at pointing to the wife’s failure to disclose documents, when given the opportunity to issue subpoenas to obtain what he claimed were important documents, he chose not to do so.

Property settlement approach

23 There is a well recognised, four step, process involved in dealing with applications for property settlement. These are:

• identify and value the assets and liabilities of the parties;

• assess each party’s contributions to the assets;

• assess a range of factors set out in s 79(4)(d) to (g) of the Act; and

• consider whether the proposed orders are just and equitable.

24 Before embarking on this process, it will be convenient to record my findings in relation to the more significant transactions in which the parties were involved.

C Hotel, in the country town N

25 At the commencement of cohabitation the husband had recently acquired the [C Hotel] in the country town N. He had paid $120,000 to acquire the leasehold, including stock, on what was meant to be a 10 year lease. The husband’s affidavit contained no information concerning the manner in which acquisition of the business had been funded, but the husband claimed in his oral evidence that he had used his own funds, rather than borrowing money. I consider it likely that his evidence on this point was correct.

26 The husband endeavoured to dispose of the leasehold of the C Hotel in September 1988, but the owner of the freehold refused to agree to the assignment, which then led to litigation. The husband finally vacated the premises in August 1991, but not before ripping out of the property every item that could be removed, including toilets, wash basins and mantelpieces, which he then placed in storage. Hence, whatever equity the husband had in the leasehold of the C Hotel at the commencement of cohabitation was lost over time, save for the items he removed from the hotel and which he kept.

P Hotel

27 In mid-1987, the parties acquired the lease and, in December 1987, the freehold of the [P Hotel]. At that time, they were therefore operating the two licensed premises in the country town N. The freehold cost $310,000, plus $11,500 for stock. Stamp duty and costs amounted to about $10,000. The property was acquired in the husband’s name. All of the funds required to complete the purchase were borrowed from the Commonwealth Bank, save for about $10,700 (see Exhibit 2). The borrowing was later refinanced with a private mortgage.

28 The husband claims the hotel was put in his name on his accountant’s advice, “due to the fact that I did not know nor did anyone else if and when [the wife] would take off again, as she had done before”. The wife understood they were going to acquire the property jointly. In any event, the parties sometimes ran the business

themselves, sometimes had it under management and sometimes leased it to third parties.

29 When the time came to refinance the borrowing on the hotel, the husband was unable to secure a further facility, for which he blames the wife and his business partner from another venture, as both had placed caveats over the property. The hotel was sold on instructions of the mortgagee in about August 2006. The wife’s evidence was that there was a shortfall of $26,808. The husband’s evidence about the extent of unpaid liabilities was only vaguely described in his affidavit.

D Hotel

30 In June 1998, the husband and wife moved to the country town L here the husband and a third party ([Mr M]) had together acquired the leasehold of the [D Hotel]. The wife was opposed to the venture because of her concerns about Mr M, but she nevertheless gave up her job in Perth, where they were living at the time, and moved to the country town L to assist the husband. The work was particularly hard, as the hotel operated over very long hours to service the local mining community. Ultimately, there was a serious falling out between the husband and Mr M, which led to litigation. A judgment was obtained against the husband by a company controlled by Mr M. The amount owing in August 2003 was $25,305. The wife said she did not know what the husband now owes in relation to this debt as she claims the husband had not provided disclosure. Mr M has lodged a caveat against the title to the matrimonial property to secure his entitlement against the husband.

31 A judgment was also obtained against the husband by [A Pty Ltd] arising out of the operation of the D Hotel. The amount owing in October 2003 was $45,009. A land seizure notice was issued and a caveat lodged against the husband’s interest in the matrimonial property. The wife claimed the husband had also not provided disclosure in relation to this liability.

T Tavern

32 The husband was employed as a hotel broker during portion of the relationship.

In the course of his work, he formed an association with third parties interested in acquiring the leasehold of the [T Tavern]. The [T Tavern Unit Trust] (“the Unit Trust”) took over the tavern in June 1996. The husband’s quarter interest in the Unit Trust was held by a Family Trust, of which he was the appointer. The trustee of the Family Trust was a company of which the husband and wife were originally both directors and shareholders. The wife’s understanding was that the Family Trust borrowed the $75,000 needed to acquire its interest in the Tavern.

33 The husband had a falling out with the other owners of the leasehold and was excluded from the operation of the tavern, while retaining his interest through the Unit Trust. In November 2010 the tavern closed, owing hundreds of thousands of dollars. The husband’s evidence indicated that he had made arrangements to ensure he was “safe” from any liability.

34 The husband claimed that actions taken by the wife in these proceedings in 2005 had resulted in him losing the chance to sell the Family Trust’s interest in the T Tavern for $120,000 in 2006. The allegation was unsupported by any particulars (and tended to be contradicted by what the husband himself said in paragraph 61 of his trial affidavit). I regard the assertion as simply part of the husband’s self serving reconstruction of the history of the relationship, which was designed to blame the wife for their failure to accumulate wealth.

The matrimonial property

35 The matrimonial home was purchased in 1994 for $171,000; however, with stamp duty and other costs, the husband and wife paid $176,750 to acquire the property. The husband claims he paid the deposit, but said he “put the property in both names hoping that this would fix all our problems and get on with our lives, how wrong was I”. The settlement statement indicates that a deposit of $11,000 was paid, and that the parties had to find a further $5,750 prior to settlement, as the amount borrowed was only $160,000. No reliable evidence was given of the source of these funds.

Assets and liabilities at date of trial

36 The table below sets out what the parties claimed were their assets and liabilities at the date of trial (treating for this purpose the assets vested in the wife’s bankruptcy trustee as being hers).

Asset	Husband $	Wife $
Matrimonial home	250,000	250,000
NAB Bank account	15,000
Shares	2,800
Mercedes	6,000
Personal property	2,000
Household contents	5,000	5,000
Credit union accounts	678
Hyundai	7,500
Jewellery	3,000

Superannuation	40,000
Total Assets	280,800	306,178
Liabilities
Mortgage (inclusive of arrears of $7,750)	41,106	41,106
BankWest overdraft	29,937
Credit cards	45,000
Mr M’s debt (secured by caveat)	38,000
[C United] (unsecured and not the subject of a judgment)	7,000
A Pty Ltd (secured by caveat)	56,000
[O family] liability (unsecured and not the subject of a judgment)	96,500
Arrears of council and water rates on matrimonial home	4,000
Bankruptcy Trustee’s fees (anticipated)	15,000
F Pty Ltd	85,000
[P solicitors]	27,678
NAB	2,941
GE Money	6,427
Total liabilities	317,543	178,152
Net assets	(36,743)	128,026

37 My findings concerning the entries in this table are set out below.

Matrimonial home

38 Although the value of the home was agreed at $500,000, the circumstances in which this agreement was reached gave me little confidence that the figure was accurate. In any event, my orders will involve the sale of the home, and the market will therefore set the value.

NAB Bank account

39 The wife accepted that the husband had $15,000 in the bank, but noted it was surprising he had this much in savings, whilst at the same time being in arrears with the mortgage to the extent of $7,750.

Cash money

40 The husband gave no evidence of having any cash money, notwithstanding references in his evidence to having large amounts of cash at times during the marriage. Although the husband was not cross-examined about this issue, I consider that, just as he had no compunction about concealing his true income from the taxation authorities, he would have no concerns about failing to reveal his true position to the Court. Nevertheless, given the absence of cross-examination, I do not intend to proceed on the basis that the husband has any undisclosed assets.

The husband’s shares

41 I have included the husband’s shares at $2,800 because they were included in his sworn Financial Statement at that figure. Although he volunteered in his oral evidence that these “tiny speculative shares” were worth nothing and “going down every day”, he provided no evidence to support this assertion.

Chattels

42 There was no dispute about the value of the motor vehicles, nor the values given in the husband’s Financial Statement for his furniture and personal property.

43 The husband did not accept the wife’s estimates of the value of her furniture and jewellery. He alleged she had removed valuable furniture, as well as two gold bars, gold nuggets, and some small diamonds. He said the diamonds cost $6,240 in 1992 and the gold $2,500 in 1998. It was not clear what the husband considered these items would be worth now, but he did say when cross-examining the wife that he knew it was “not a lot of money”.

44 The wife acknowledged she had taken furniture from the home following the separation, and that the gold nuggets and diamonds were in her jewellery box, which she had also removed. She denied taking any gold bars. I was not persuaded the wife removed the gold bars. The wife claimed that the nuggets and diamonds had been stolen when she was burgled whilst renting in [a metropolitan suburb B] and that she had made a claim on her insurance. No evidence was given of the amount she received from the insurance claim. Nor was any admissible evidence given of the value of the furniture in the wife’s possession, or of her jewellery. In the absence of

any evidence, I am not prepared to proceed on the basis that the chattel property in the wife’s possession is of any greater value than she conceded.

45 I was also not persuaded that the wife took $15,000 in cash from the home as the husband alleged. She did, in 2003, receive $4,500 in cash from one of the co-owners of the T Tavern, but I consider it likely that the husband received a similar amount from this source at around the same time, and that on other occasions he received other “cash” payments from the T Tavern. It is impossible to determine how much.

Superannuation

46 The wife has had many jobs from which she has accumulated superannuation.

The nature of the husband’s work has been such that he has not accumulated any superannuation.

Mortgage

47 The mortgage balance was not in dispute but, as already noted, it was unclear why the payments were in arrears – given the husband has $15,000 in a bank account.

BankWest overdraft

48 The balance owing on the overdraft was agreed. As I understand the evidence, the wife guaranteed the husband’s obligation for this liability. The evidence does not make clear the purpose for which the debt was originally incurred.

Husband’s credit cards

49 The husband claims he owes $45,000 on three credit cards, and acknowledged that this amount had increased since the final separation. He said he believed he owed only about $25,000 before the separation. He provided no explanation why these liabilities had been included in his Financial Statement, but had not been included in the schedule of assets and liabilities he handed up in the early part of the trial. No detail was provided concerning the purpose for which these liabilities had been incurred, although it is noted that the husband has incurred costs associated with a number of “business” trips to China, for which he says he has not received remuneration. The wife said she did not know whether the husband owed $45,000 on his credit cards, but I am prepared to accept he does.

Mr M’s debt

50 This liability relates to the husband’s involvement with Mr M in the D Hotel.

Mr M sued the husband and obtained a judgment against him. The debt is secured by a caveat against the husband’s interest in the matrimonial home. The wife said in her affidavit there was $25,305 owing under the judgment in August 2003. The husband asserted, in unsworn information provided at trial, that the debt was $38,000. Although the husband’s comments suggested this figure was not inclusive of interest, if the wife’s evidence concerning the amount of the original debt was correct (and it was not challenged in cross-examination) the figure claimed by the husband would have to be inclusive of interest.

C United liability

51 The husband claimed in his oral evidence there was $7,000 owing to C United.

This appears to have been related to the D Hotel. The husband acknowledged that C United did not have a judgment against him, nor had he received an invoice from them for some time. As the husband has funds available to meet the liability, but has failed to do so, I consider he has no intention of settling the debt unless he is successfully sued. I am not persuaded this is likely to occur, given the amount involved and the absence of evidence of any enforcement action to date.

A Pty Ltd liability

52 The wife’s evidence was that A Pty Ltd had obtained a judgment against the husband and that the amount owing in October 2003 was $45,009. The husband’s recollection, in his unsworn statement at trial, was that this liability was $55,000 or

$56,000. Again, his comments suggested this figure did not include interest, but he did not challenge the wife’s evidence that the debt was originally only $45,008. He produced no documents in court to verify the higher figure. In any event, A Pty Ltd has lodged a caveat over the husband’s interest in the matrimonial property to secure its entitlement.

53 The liability relates to the D Hotel, which the husband operated with Mr M. The husband said in his unsworn statement at trial that this debt “is definitely in dispute with [Mr M]”. Nothing the husband said persuaded me that it was likely he would ever secure any reimbursement from Mr M for any contribution he is required to make to discharge the liability to A Pty Ltd. There is, however, always the possibility that A Pty Ltd has obtained satisfaction of its entire debt from Mr M, but has not withdrawn its caveat. Whether this is so will probably not become known until the parties attempt to obtain the discharge of the caveat when they come to sell the matrimonial property.

O family liability

54 In his unsworn statement concerning the extent of his liabilities, the husband claimed to owe $96,500 to the O family, who provided finance for the P Hotel. This amount allegedly included not only the shortfall the O family suffered upon sale, but also legal costs of $30,000 the O family claimed to have incurred to obtain the discharge of the caveat apparently registered against the title to secure Mr M’s claim against the husband.

55 The husband was unsure whether the O family had obtained a judgment, but I note there was no evidence that any part of the alleged liability was secured over the matrimonial property. Given the absence of any evidence of recovery proceedings taken by the O family, and given the debt has now been outstanding for many years, I am not persuaded the liability will be called up.

Conclusion on the asset pool

56 I find that the parties’ assets and liabilities at trial were as set out in the table above, save that I am not persuaded the husband will be required to meet the alleged

liabilities to C United and the O family. The amounts owing to Mr M and A Pty Ltd may be different from the amounts stated in the table, but the debts will crystallise only when attempts are made to have the caveats removed.

Contributions

57 I propose to consider the contributions of the parties in three parts – initial contributions; contributions during the relationship; and contributions following separation.

Initial contributions

58 As previously noted, the husband owned the leasehold of the C Hotel in the country town N at the commencement of cohabitation, but ultimately received nothing from the hotel, other than the items he removed and kept. The husband had no other assets at the commencement of cohabitation, apart from an old Volvo and an old Chrysler utility.

59 The husband claimed, in his unsworn Papers for the Judge, that he entered the “so called relationship” with funds from his late father’s estate of $43,244. There was no mention of these funds in his affidavit, but in his oral evidence he claimed he used the money to pay a substantial tax debt relating to the P Hotel. The husband further claimed that the wife was not living with him at the time. The husband’s evidence about this inheritance was unsatisfactory and he gave no indication as to why he had allowed such a large tax liability to accrue, and whether this had occurred whilst the wife was living with him or whilst he was operating the business on his own (and receiving the income).

60 The wife had no assets of substance at the commencement of cohabitation, possessing only a second hand motor vehicle and a little furniture. She had been involved in a hotel in [the country town P] with her former husband, but that business had failed. I find that the husband in these proceedings assisted her to negotiate a compromise with her creditors which involved the payment by the husband on her behalf of about $1,000 (as she remembered), or about $3,000 (as he remembered). Although I am inclined to consider the husband’s recollection to be more accurate, the difference between the two figures is of minor consequence. Furthermore, I accept that at the time the husband advanced the funds the wife was not being paid for working in the husband’s hotel.

Contributions during the relationship

61 It is impossible to make detailed findings concerning the history of the parties’ relationship and their various contributions. The evidence they each provided was sketchy, and their lives were chaotic, given their many separations. The wife admitted her recall for dates was not good, and she appeared to have few documents on which to construct a useful chronology. The husband’s evidence was largely self-serving and unreliable. The best I can do is to attempt to paint a broad brush picture of what seemed to emerge from the evidence.

62 During those times when the husband and wife were operating licensed premises together, the wife worked extraordinarily hard, over long hours. Even the husband acknowledged the value of her efforts. The extent of the husband’s work in the businesses was more difficult to ascertain, but it is apparent he also made significant efforts, including what he described as “PR”, which would appear to have involved drinking with, and thus entertaining, customers. He acted, from time to time, as the “bouncer” and also did some of the bookwork.

63 There were occasions when one or other of the parties was left to look after the premises in the absence of the other party. This was primarily during times when the wife had left the relationship and had gone off to live elsewhere. During those periods the husband made a contribution to the extent that he kept the businesses operating, albeit greatly missing the assistance of the wife. The husband made no contribution to the support of the wife during the times that she was away, as on each occasion she obtained work and looked after herself financially.

64 There were other occasions, seemingly of greater number but of far shorter duration, when the husband absented himself from the businesses, leaving the wife in charge. When the parties were operating the hotels in the country town N, the husband would routinely go to the town J and stay there for a day or two. Similarly, when they were operating the hotel in the country town L, the husband would go to [the town K] where he would remain for a couple of days. It is unclear what the husband was doing in these times, other than that he appeared to be away for longer than was necessary to undertake the banking and other business.

65 It will be seen from my earlier findings that no capital growth was achieved as a result of the involvement of the parties in the various licensed premises. On the contrary, the parties have been left exposed to liabilities incurred in relation to the D Hotel, which have been secured against the husband’s interest in the former matrimonial home.

66 It is entirely unclear how much money the parties drew from the various businesses whilst they were being operated. According to the wife, the standard practice was for two sets of books to be kept and for monies to be regularly drawn as “cash”, on which tax was never paid. I accept her evidence and, indeed, I consider the husband’s own evidence corroborated the assertion that there was a practice of taking “cash”, notwithstanding his claim that the cash taken as “dividends” was declared for tax purposes.

67 Both parties had employment from time to time, other than the work they did in the businesses which they operated. The wife always found work to maintain herself when she left the husband. Sometimes, during periods of reconciliation, she would continue to work for wages for others. The husband’s main employment away from their businesses was as a hotel broker. The evidence concerning the periods he worked in this capacity, and the income he actually earned (as opposed to how much the firm for which he worked told potential lenders he earned), was far from specific. I accept, however, that the husband did a lot of work as a hotel broker, and from time to time he earned a very good income from this source. It seems that the wife sometimes worked for the same firm of brokers, but there is no suggestion she ever earned as much as the husband did from this source.

68 I am unable to make a clear finding about how the parties funded the deposit on the matrimonial property. However, even if the husband paid the deposit from funds held by him, I see no reason to conclude that those funds should be regarded as being his contribution in circumstances where the husband and wife were engaged in a joint endeavour during the times they were living together. In this regard, I note that the husband’s evidence is unclear concerning when and how he saved the money he claims to have used to pay the deposit.

69 The husband also claimed that up until separation, and thereafter, he paid all of the mortgage payments and outgoings on the matrimonial property. The wife originally claimed she had paid all of the mortgage payments, but in her oral evidence she said she had paid only from the time of acquisition of the home until the first time she and the husband separated after they acquired the property. She says that when she returned to the home on subsequent occasions, the husband paid the mortgage but she met other expenses. In many respects it does not matter which of the parties actually made the mortgage payments, as both of them were working in the businesses and/or earning income from other sources. The fact the husband’s income may have been applied to payment of the mortgage payments rather than to other necessary expenses does not mean he should be given some advantage in the assessment of contributions.

70 The husband claims that in 2004 he had a discussion with the wife in which he laid down conditions about her moving back into the matrimonial property. He said the wife agreed that neither she nor her children would have any claim against the property. It is possible such a conversation took place; however, such an agreement would not be binding and would need to be considered in the context of the violence in the relationship.

71 The husband did not deny the wife’s allegation that at one stage in 2000 they let the matrimonial property for six months whilst the husband stayed in a unit the wife was renting. I accept her evidence that the husband paid nothing toward that unit except the bond.

72 There is no evidence of the husband having undertaken any domestic duties that were of any support or assistance to the wife, whereas the wife’s evidence established to my satisfaction that she undertook substantial domestic duties for the benefit of the husband.

73 Overall, I was satisfied that throughout their relationship the husband and wife both worked hard and their contributions, albeit made in different ways and in different spheres, were of equivalent value.

Contributions after separation

74 The wife has continued to work in the many years since the final separation.

She has maintained herself, without assistance from the husband. She has not incurred significant debt, save for liabilities associated with these proceedings.

75 The extent of the husband’s employment and income since separation is not clear. He has had sufficient funds available to pay most of the mortgage payments and

outgoings on the matrimonial home, although there are arrears. The mortgage payments have been relatively modest (in the region of $671 to $720 per fortnight) and the husband has had the benefit of living in the property, whereas the wife has had to rent. The husband has incurred debt on his credit cards, part of which presumably funded some of the expenses associated with his many trips to China.

Assessment of contributions overall

76 Although the husband had more than the wife when they commenced living together, that factor stands to be assessed in light of the fact that the parties ultimately received little of value from the husband’s initial contribution. The evidence also did not establish that the parties would have been any worse off if, instead of working very hard in the husband’s hotel, they had performed similar work for wages. I have already noted the husband’s evidence about his inheritance was vague and unsatisfactory. The parties’ contributions during the lengthy relationship were of similar value. I am not persuaded either made any greater contribution than the other after separation.

77 Overall, were it not for one factor, I would have been inclined to consider the parties’ contributions as having been of roughly equal value. The one, but very important factor, pointing strongly to a different outcome relates to the husband’s history of violent conduct towards the wife throughout their relationship. I will return to that issue after I have referred to the matters relevant under s 75(2) of the Act.

Section 75(2) factors

78 The husband is nearly 66 years of age, and hence is five years older than the wife, who is 61 years of age.

79 The husband claims to have health problems. I am not persuaded his difficulties with his health would prevent him from engaging in some employment. I note that he said in his Papers for the Judge that he had “still not given away the idea of never [sic] returning to gainful employment sometime in the future”.

80 The wife describes her health as only “fair”, but I find she is likely to be able to continue working in her current capacity for at least some years.

81 The husband gave evidence of making efforts over a number of years to develop an income source from training students in China to work in the hospitality industry. He has been to China on six or seven occasions to assist in this venture, but claims never to have earned any income for doing so. He claims his trips were self funded, save that his accommodation in China was provided. I am not entirely persuaded the husband has made an accurate disclosure of the extent of his past, and likely future, involvement in this enterprise.

82 The husband also has considerable experience as a hotel broker, and has previously been registered as a real estate agent and business consultant. He acknowledged that he has “been very successful at making lots of money for everyone else” and gave evidence this his former clients “today still ask for my assistance from

time to time, thank God for that…”. I am not persuaded the husband is unable to earn any income from working as a hotel broker or consultant, or in some other capacity in the hotel industry.

83 The wife has a good income earning capacity as she has been in regular paid employment since separation and is currently earning around $1,300 a week. She also has a real estate agent’s licence and has considerable experience in property management.

84 Neither party has any commitment to support any other person.

85 The husband is eligible for a pension, but has no superannuation entitlements.

The wife does not receive any pension entitlements, but has $40,000 in superannuation.

86 Notwithstanding having worked throughout their lives, neither party is likely to be able to enjoy anything other than a very modest standard of living.

87 The wife is not cohabiting with any other person. The husband has a “girl” living in his home “from time to time”, but denies he has anything other than a “friendship” with her. She allegedly makes no contribution other than to look after the home when the husband is away. The husband’s lack of credibility is such that I am not persuaded I have been given an accurate impression of the nature of their association.

88 There is no evidence to suggest the marriage has had any impact on the earning capacity of either party.

89 The parties have not entered into a binding financial agreement.

90 Save for the fact that the wife is younger than the husband, and has a clearly established earning capacity, I am not satisfied the s 75(2) factors I have discussed favour either party. The wife is likely to be coming toward the end of her working life, and in any event her ability at present to earn an income needs to be considered in light of my finding that the husband does have some earning capacity.

91 I am also required, by s 75(2)(ha), to take into the account the effect (insofar as the effect is relevant) of any proposed order on the ability of the parties’ creditors to recover their debts. In the event I was to make the orders sought by the wife, she would be able to satisfy her creditors in full. Similarly, if the husband obtained the orders he is seeking he would have sufficient assets to meet all of his liabilities. Obviously, the making of other orders may leave one or other of the parties in a position where they would not be able to meet their liabilities. In particular, if the husband succeeded in obtaining the orders he proposes, the wife would have no means of satisfying the debts proved in her bankruptcy.

92 I do not consider there is any need to place weight on the fact that the wife has substantial unpaid legal costs. It is, of course, most unfortunate she found herself in the position of having to resort to a litigation lender to ensure her ongoing legal representation, and ended up owing the lender much more than the amount drawn on the facility. However, the lender knew there was a contest between the parties as to

their respective entitlements. The risks associated with funding litigation are no doubt taken into account when setting the very high rates of interest charged for such facilities. The lawyers to whom the wife also owes money directly were also no doubt aware of the risks associated with “carrying” a client who is unable to afford to meet the costs of litigation, although the Court might wish there were more such lawyers.

93 For these reasons, the fact the wife has such high legal costs is no reason to give her some advantage in the distribution of the available property. On the other hand, the fact the wife will lose a considerable portion of her settlement in payment of legal costs is no reason to reduce her entitlement. If the wife receives what she is seeking she will be in a position to discharge her creditors in full and thereby secure her discharge from bankruptcy, which she described as the “biggest disgrace” of her life.

94 The other liabilities secured over the former matrimonial home may be seen as falling into a different category to the wife’s litigation expenses. The mortgage is an undisputed liability for which both parties should be responsible. In any event the mortgagee is fully secured. The overdraft appears most likely to relate to expenditure from which both parties have benefited. The liabilities accrued on the credit cards were, at least in part incurred prior to the parties’ final separation. The two caveats relate to liabilities incurred in a business in which both parties were involved, even if, as I accept, the wife was reluctant for the husband to enter into the venture which gave rise to these debts. I consider it appropriate that orders be made which will ensure that all of these liabilities are met.

Significance of the husband’s violence

95 I turn now to the wife’s claims that the husband engaged in repeated acts of violence and abuse, leading to her leaving the relationship on so many occasions. If proven, such allegations could be relevant to the outcome because it is well accepted that the court can take into account:

…a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been… Kennon v Kennon (1997) FLC 92-757 at 84,294.

96 I have already recorded my finding that the wife’s evidence of the husband’s violent behaviour was reliable, save for some possible exaggeration on peripheral issues. In summary, I find that the husband assaulted the wife on many occasions. Following particularly violent attacks the wife would leave the husband, only to return some months or years later, when he begged her to do so.

97 The first assault occurred in about early 1987, not long after the relationship commenced. The wife said that, until then, she had been happier than she had ever been in her life, and the husband had treated her “like a princess”. At the time of this first attack the husband and wife were living (at least part of the time) in a rental home at [Q], a seaside town about 23 kilometres from the country town N. The husband had

suggested to the wife that she leave the C Hotel and return to Q to cook dinner, but he then did not return home until after midnight.

98 Upon his arrival at the Q home, the husband ordered the wife and her 14 year old son to get out of the house. They did not have transport and began walking into the country town N in their pyjamas, until they were given a lift by a local farmer. On arrival at the C Hotel, the wife and her son went to bed in rooms in the hotel. The husband arrived later and bashed down the door of the wife’s room. The next thing the wife remembered was waking in the local hospital, badly bruised. She was unable to walk for three days. The husband said in evidence that he certainly remembered the occasion and “taking the door off its hinges”, but he had no recollection of assaulting the wife, although he remembered her going to hospital once because she had a “sore neck”.

99 The wife was also hospitalised in 2004 following another assault by the husband.

The husband admitted that he had pulled the wife out of bed (claiming to have been “seriously provoked”), but I accept the wife’s evidence that he also punched her, threw her on the floor and proceeded to kick her all over her body (with his shoes on), whilst abusing her in disgusting terms. He then proceeded to smash things in the kitchen. The wife went to a friend’s home overnight. On the following morning, she was stopped in her car by the police, as she was speeding. Her injuries from the assault on the previous day were apparently so evident that the police called an ambulance to take her to hospital. The wife spent about two weeks off work recovering.

100 The husband was charged and pleaded guilty to a charge of assault occasioning bodily harm arising out of this incident. He says the assault could not have been as serious as the wife alleged because his fine was only $500, which he said was at “the lower end of the scale”. On this, and at least one other occasion in giving evidence, the husband referred to the fact he was twice the size of the wife and he observed that, notwithstanding her allegations, the wife was still alive.

101 The wife gave evidence that the husband had also been convicted of another assault on her. The husband admitted he had been convicted, but said this was for an attack on a third party outside the [R Hotel]. The husband again pleaded guilty. I consider it more probable that this conviction related to an assault on a third party, not on the wife.

102 On another occasion in 1987, when the parties were staying together in [the metropolitan suburb J], the husband started to push the wife around. She threw a pot plant at him, which missed. He then told the wife and her young son to get out of the house, and he pushed the wife into the street. The wife had just come out of the bathroom and was naked. The police were called, but the incident was “resolved”, and the wife returned to the home.

103 The wife also gave evidence of another occasion at the C Hotel, when the husband pulled her out of bed late at night and threw her into a wall. This occurred because the wife had refused to get out of bed to make snacks for friends with whom the husband was drinking after the hotel had closed. Having been attacked, the wife complied with the husband’s demands.

104 The wife gave evidence of another assault by the husband in 1993, which occurred whilst they were separated. On this occasion, the husband came into the wife’s unit in [a metropolitan suburb S] without invitation. The husband said he wanted to reconcile, but he ended up attacking the wife, causing her to fall and hit her head on the stove. Although the wife was lying on the floor, unable to get up, the husband left the house and rendered no assistance. The husband admitted only that the wife had “slipped” and fell, hitting her head.

105 The wife described another incident which occurred when the parties were together at the D Hotel in 1998. A riot had broken out in the hotel, during which the husband had been involved in what the wife described as a “full-on brawl” with a customer. After calm was restored, the husband, unprovoked, hit the wife in the face whilst he was holding a bunch of keys, cutting her face, before then locking her out of their room in the hotel. The wife left the country town L the next day.

106 Under cross-examination by the wife, the husband acknowledged he had, on occasions, drunk too much, and he speculated this may have led “to what you say was violence”. He made a point, however, of telling the wife under cross-examination, “it could have been much worse” because of the differences in their sizes. He also sought to excuse his own actions by saying, “you could fight too, you know”.

107 Apart from the husband’s assaults on the wife, which occurred at least every few months, I find that he often abused her in foul terms, such as calling her a “fucking cunt of a thing”. The fact that his abuse and assaults seem often to have been precipitated by the husband’s anger and frustration with other people did nothing to ameliorate the wife’s pain, upset and humiliation. I accept also that the wife was greatly embarrassed by having to take time off work, or to wear make up and longer clothing, to hide her injuries.

108 The manner in which the wife gave her evidence concerning the husband’s violence was convincing. Her demeanour whilst cross-examining, and whilst under cross-examination by the husband, was consistent with someone who has been severely traumatised and who remains in fear of a violent former partner. At least as compelling in persuading me of the accuracy of the wife’s evidence was the husband’s demeanour when cross-examining the wife. The transcript is unlikely to reveal the full extent of the quiet menace evident in the husband’s strongly controlled presentation. His demeanour during the trial was entirely different from what I observed on the only occasion I had encountered him prior to trial, which was at an interlocutory hearing, listed on short notice. The wife attended that hearing only by telephone. In the absence of the wife, the husband presented as a pleasant and urbane man. The same could not be said when the wife was in the same room as him.

109 I find that the reason for the wife’s many departures from the parties’ homes was the husband’s violent and abusive conduct. The wife presented as a sensible and mature woman who would not have repeatedly left what should have been the security and comfort of her home unless for some very good reason. The fact she so often returned is not inconsistent with her claims of violence. On the contrary, the “cycle of violence” which sees victims repeatedly returning to the person who has assaulted them is well known. The husband is a very presentable man, well spoken and capable of great charm. I accept that he was quite capable of persuading the wife to give him

yet another chance, or make her feel that she was needed. In this regard it is worth recording that when the husband asked the wife why she had returned to him on

38 occasions if he had been so violent, she said “because I thought I loved you - in fact I did – I subjected myself to this for 20 years because I loved you – I was told to seek help because I loved you.”

110 I find that the wife’s contributions during the marriage were made far more difficult because of the husband’s behaviour. At least as importantly, had the husband not behaved in the way he did, the wife’s contributions would not have been wasted on renting homes for herself, when she had her own home in which she could have been living. Even more significantly, the wife would have been able to continue to assist with the hotels. This would have been of considerable advantage to both parties because of the extraordinary effort the wife made in their businesses when they were together – which even the husband acknowledged, notwithstanding his otherwise contemptuous attitude towards her. In this context it is significant to record the husband’s submission at trial that had it not been for the wife leaving the home so often, they would have more assets than they now have, and that both of them would be leading a comfortable life in retirement. The husband expressed similar sentiments in paragraph 66 of his trial affidavit.

111 Although I accept the wife engaged in a considerable amount of gambling at the casino, I am not satisfied she lost anywhere near the amount the husband claimed, which is not to suggest that I was persuaded that her gambling was anywhere near as successful as she claimed. (The wife and her sister did win $30,000 on one occasion but this was quickly frittered away). Overall, I consider the wife’s gambling to be a matter of far less economic significance than the consequences of the husband’s violent conduct.

112 Given the significance I intend to place on the husband’s violent behaviour, I should record there was no suggestion in the evidence that the wife would take any proceedings against the husband for damages arising out of his various assaults on her. She has never pursued such a claim in the past, and I am satisfied she would not seek to do so in the future (even assuming that such claims are not statute barred).

113 I should also record that, in making my findings about the husband’s violence, I have not taken into account the fact that the husband faced a judge and jury in the [the town J Court] relating to an alleged assault (and other offences) involving [Ms T], a woman with whom the husband was involved in an intimate relationship during part of the parties’ relationship. The wife’s evidence about this was hearsay and the husband was acquitted. I do note, however, that when the husband needed someone to bail him after he was charged with these offences, he telephoned the wife, telling her he had never needed her more in his life than he did then. The wife was working at [a country town W] at the time, but drove 10 hours to the town J to assist the husband, notwithstanding she was engaged to someone else at the time.

114 I also do not take into account the wife’s hearsay evidence that the husband was involved in a physical altercation with her first lawyer in these proceedings, prior to the lawyer arranging for the file to be taken over by the wife’s second lawyer.

Just and equitable?

115 My assessment of the contributions and consideration of the s 75(2) factors would have pointed toward an outcome involving an equal, or close to equal, division of the net assets after this lengthy relationship – were it not for the issues discussed concerning the husband’s violence. The difficulty with which I am faced is how to take account, in a principled way, the husband’s behaviour, which has not only made the wife’s contributions more difficult, but has led to the pool of assets being significantly smaller than they would otherwise have been.

116 There is no evidence (nor could there have been) of even the approximate impact on the parties’ finances flowing from the husband’s violent and abusive behaviour. The absence of such evidence would not make it right, however, to proceed as if the behaviour had never occurred. That could not lead to a just and equitable outcome as it would ignore the economic impact of the husband’s conduct. Nor would it be appropriate to proceed as if the Court were being asked to assess the damages to which the wife might have been entitled had she taken civil proceedings against the husband. Similarly, the division of property should not proceed on the basis of the Court’s disgust with the husband’s behaviour.

117 Ultimately the Act confers on the Court a wide discretion. In exercising the discretion, the Court cannot overlook the fact that the husband did make significant contributions and has future needs. However, the wife made similar contributions and she too has future needs. The pool is too small to provide anything other than a means of allowing each of them to clear their debts and possibly provide them with a small fund from which to meet some of the necessities of life.

118 It is my assessment that to achieve a just and equitable outcome the home should be sold and the funds divided so the following debts will be discharged:

•the mortgage balance (but not the arrears of mortgage payments, including the arrears accrued at the time of trial, which I propose will come from the husband’s share, since he has been living in the home and has had money in the bank sufficient to meet them);

•the overdraft (but with any amount exceeding $29,937 to come from the husband’s share);

•any amount still owing pursuant to the judgment debts to Mr M and A Pty Ltd (with payments of such debts to be made to Mr M and A Pty Ltd direct, rather than the husband merely accepting responsibility for such debts);

•the husband’s credit card debts (to a maximum of $40,000, with the payment to be made directly to the relevant banks in discharge of the debts rather than the husband merely accepting responsibility for such debts);

•the arrears of rates and taxes on the property (with the husband to meet any amount in excess of $4,000 from his share of the proceeds of sale).

119 On the basis of my findings concerning the asset pool, and assuming the matrimonial property sold for $500,000, this would leave $252,601 available for distribution (less the costs of sale). The wife will receive the first $60,000 of this amount, as well as retaining her superannuation and other modest assets, and remain

responsible for the debts proven in her bankruptcy. The balance of the proceeds will then be divided equally between the husband and the wife (subject to any orders for costs that might be made in the event there is an application for costs following delivery of these reasons).

Orders

120 Subject to hearing from the parties and counsel for F Pty Ltd, I propose to make the following orders:

1.The husband and wife be appointed as joint trustees for sale of [the matrimonial property] (“the property”).

2.Within seven days of the date of these orders, the wife shall provide to the husband a list of three real estate agents working in the [area of the matrimonial home] who she proposes should market the property. Within seven days of receipt of the list the husband shall nominate one of the agents to conduct the sale, and the parties shall jointly instruct that agent to place the property on the market for sale.

3.The net proceeds of sale of the property shall be disbursed as follows:

(a) in payment of the costs of sale;

(b) in payment of outstanding rates and taxes relating to the property, provided that any arrears exceeding $4,000 shall be paid from the husband’s share of the proceeds of sale;

(c) in discharge of the mortgage registered against the title to the property (save and except for any arrears at the date of settlement, which arrears shall be paid from the husband’s share of the proceeds of sale of the property);

(d) in payment direct to [A Pty Ltd] of the debt secured by caveat against the title to the property;

(e) in payment direct to [Mr M’s company] of the debt secured by caveat against the title to the property;

(f) in payment direct to BankWest of the amount outstanding on the overdraft (in the name of the husband and guaranteed by the wife) to a limit of $29,937, with any amount above that limit to be paid by the husband from his share of the proceeds of sale of the property;

(g) in payment direct to the relevant banks of the amount outstanding on the husband’s three credit card liabilities to a maximum of $45,000;

(h) in payment to the wife of $60,000;

(i) in payment of the balance then remaining to the husband and wife in equal shares.

4. The husband shall retain:

(a) the funds standing to his credit in the National Australia

Bank account;

(b) the husband’s shares;

(c) the husband’s motor vehicle;

(d) the household contents and other chattel property in the husband’s possession.

5. The wife shall retain:

(a) her superannuation entitlements;

(b) her household contents and other chattels in her possession;

(c) the funds standing to her credit in her Credit Union account;

(d) her motor vehicle.

6.The funds to which the wife is entitled pursuant to the terms of these orders shall be paid direct at settlement to the wife’s trustee in bankruptcy for disbursement by him in discharge of the debts proven in the wife’s bankruptcy.

7.[F Pty Ltd] shall discharge (at its own expense) its caveat registered against the title to the property at the time of settlement of the sale.

8.The wife shall ensure that any caveat registered against the title to the property to secure payment of her legal costs (save for the caveat protecting the interests of [F Pty Ltd]) is discharged at the time of settlement of the sale.

9.Pending the sale and settlement of the property the husband shall have sole occupation of the property and shall pay as and when they fall due for payment all mortgage payments and other outgoings in relation to the said property.

10.Pending the sale and settlement of the property the husband shall ensure that the condition of the property does not deteriorate any further than it had at the date of trial and shall comply with all reasonable requests of the real estate agent conducting the sale of

the property in relation to making the property available for inspection and home opens.

11.The husband and wife shall each have liberty to apply to the Court for further orders in relation to the terms and conditions of sale of the property.

12.The wife shall have liberty to apply for an order for the husband to vacate the property pending sale and settlement in the event he does not comply with the paragraphs 9 and 10 of these orders.

13.In the event that the question of liability for, and assessment of, the costs of these proceedings has not been determined by the time of settlement of sale of the property, the husband and wife shall each have liberty to apply for an order restraining the distribution of all or part of the proceeds pending resolution of such issues.

14.In the event any party proposes to seek an order for costs of the proceedings they shall, within 21 days of the date of these orders, file and serve an affidavit setting out any facts and submissions on which they rely in support of their application for costs.

15.In the event of such an affidavit being filed and served the other parties to the proceedings shall have 21 days in which to file and serve an affidavit setting out any facts and submissions on which they intend to rely in opposing the application for costs and/or in support of any cross-application for costs they intend to make.

16.The party filing the first affidavit in support of an application for costs shall have 21 days in which to file and serve an affidavit in reply to any affidavit in response to the application for costs.

17. The application and response be otherwise dismissed.

I certify that the preceding [120] paragraphs are a true copy of the reasons for judgment delivered by this Honourable Court

Associate