Ainsley and Ainsley

[2013] FCCA 408

FEDERAL CIRCUIT COURT OF AUSTRALIA

AINSLEY & AINSLEY [2013] FCCA 408

Catchwords:
FAMILY LAW – Alteration of property interests – whether contribution to be assessed globally or otherwise – where substantial assets accumulated after separation – where wife’s contribution and needs greater – non-disclosure by the husband.

Legislation:
Family Law Act 1975, ss.66G , 75(2), 79, 111AA, 117

Cases cited:
Bradley v Weber [1998] FamCA 90
Branicki (unreported Full Court 18 May 1990)
NHC & RCH (2004) FLC 93-204
DJM & JLM (1998) FLC 92-816
Farmer & Bramley [2000] FamCA 1615; (2000) FLC 93-060
Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Jones and Jones (1990) FLC 92-143
Norbis v Norbis (1986) 161 CLR 513
Pastrikos and Pastrikos (1980) FLC 90-897
Shaw and Shaw (1989) FLC 92-010
Stanford v Stanford (2012) FLC93-518

Applicant: MS AINSLEY

Respondent: MR AINSLEY

File Number: SYC 6032 of 2011

Judgment of: Judge Altobelli

Hearing date: 8 and 9 April 2013

Date of Last Submission: 9 April 2013

Delivered at: Sydney

Delivered on: 4 June 2013

REPRESENTATION

Counsel for the Applicant: Mr Schonell SC

Solicitors for the Applicant: Diana Perla & Associates

Counsel for the Respondent: Mr Gould

Solicitors for the Respondent: James Antonenas Solicitor & Barrister

ORDERS

1. That the husband forthwith, do all acts and things and sign all documents to pay the proceeds of the (bank omitted) Account number (omitted) in the sum of $100,812 to the wife.

2. That the husband, within 14 days of the date of these Orders, do all acts and things and sign all documents to transfer to the wife the following properties:

3. Property D, being the whole of the land contained in Folio Identifier (omitted).

4. Property S, being the whole of the land contained in Folio Identifier (omitted).

5. Property M, being the whole of the land contained in Folio Identifier (omitted).

6. Simultaneously with the transfers, the husband shall:

7. Do all acts and things and sign all documents to discharge mortgage number (omitted) to the (omitted) Bank, and

8. Pay to the wife the sum of $335,800.

9. That pursuant to paragraph 90(MT)(1)(b) of the Family law Act 1975, whenever the Trustee of (omitted) Superannuation Fund makes a splittable payment from the interest held by Mr Ainsley, the Trustee shall pay to Ms Ainsley or her administrators, executors, beneficiaries, heirs or assigns the amount of $177,733 and there shall be a corresponding reduction in the entitlement Mr Ainsley would have had in (omitted) Superannuation Fund but for these Orders.

10. That within 14 days of the date of these Orders, the husband do all acts and things and sign all documents to cause Qantas Frequent Flyer to transfer 430,000 of his frequent flyer points to the wife’s account.

11. That other than as specifically provided for in these Orders each party is solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the name, possession, ownership and/or control of each of the parties as at the date of these Orders.

12. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Family Court shall be appointed pursuant to Section 106A of the Family Law Act to execute such deed or instrument and do all acts and things necessary to give validity and operation to the said deed or instrument.

CHILD MAINTENANCE

1. Pursuant to Section 66G of the Family Law Act, the husband shall pay to the wife directly child maintenance for the child Y born (omitted) 1995 (“the children”), in the sum of $3,150 per month commencing on the first day of the month following the making of these Orders and continuing until each of the children attains the age of 18 years.

IT IS NOTED that publication of this judgment under the pseudonym Ainsley & Ainsley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYC 6032 of 2011

MS AINSLEY

Applicant

And

MR AINSLEY

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an application for alteration of property interests under s.79 of the Family Law Act 1975 (“the Act”), commonly called a property settlement. In addition, there is a disputed claim to child maintenance under s.66G of the Act. The wife is the applicant. She lives in New South Wales, is 48 years old, and describes herself as a homemaker. The respondent is the husband. He is 46 years old, and currently lives in (country omitted). He describes himself as a (occupation omitted). The parties married in (omitted) 1991. Whilst there is a dispute about separation, the evidence before the Court leads it to conclude that separation took place in about July 2010 when the husband moved to (country omitted) for work purposes. There are three (3) children of the marriage aged 20, 18 and 17, all of whom live with their mother in the former matrimonial home in Sydney. The three (3) children are all very high achievers and may well be destined to careers in the law.

2. The dispute between the parents relates to the assessment of contribution up until the date of the trial, the assessment of s.75(2) consideration, and the quantification of maintenance under s.66G of the Act. An interesting feature of this case is that about one-third of the assets available to the parties for distribution were accumulated by the husband alone, in a relatively short period after separation, when he was able to take advantage of lucrative tax free employment in (country omitted).

Background  

1. It seems relatively uncontentious that at the date of cohabitation each party had assets available to them of equivalent, or nearly equivalent value.  They both worked, the husband full-time, and the wife full-time and part-time until the three (3) children were both born. For most of the children’s lives she has been at home available to care for them, an arrangement that the husband agreed to.  They both worked hard, albeit in different roles.  He was the primary income earner.  She was primarily responsible for parenting and homemaking. 

2. They purchased and sold properties.  The details of this are not directly relevant in this case.  There was some financial assistance from the husband’s father and the nature and extent of this is an issue in this case.   

3. It is common ground that for a period of about three (3) years that the husband and wife separated, although they continued to reside in the family home.  An issue that the Court needs to determine is whether the wife’s contribution was rendered more arduous as a result of this separation and as a result of the husband’s gambling activities, both during this period, and subsequently.  

4. The husband left for (country omitted) in July 2010.  He returned a number of times for the purposes of spending time with his children.  He earned a substantial income in (country omitted) and was able to both purchase property and save money to the extent that out of the pool of approximately $3,000,000.00, about a third is attributable to the assets that he acquired after separation.  The wife contends that she made a substantial contribution to this, of a non-financial kind, and as homemaker and parent.  In the end result the husband conceded that the wife’s contribution as homemaker and parent continued after separation but that in terms of the post-separation asset her contribution should be assessed as seven (7) to eight (8) times smaller than his.     

5. In relation to the s.66G claim, the husband does not dispute that he should pay child maintenance, but does dispute the amount thereof.

The Parties’ Proposals

1. The orders sought by the wife are contained in her amended minute of order dated 8 April 2013, reproduced in the first schedule to these Reasons. In closing submissions, senior counsel appearing for the wife explained the wife’s case on the basis that contribution as at the date of trial should be assessed in her favour as to 60 per cent, and that a further 10 per cent adjustment should be made under s.75(2) of the Act. The extra 10 per cent contribution was based on a combination of her greater contribution during the marriage as a result of their lengthy separation and his gambling, and the continuation of her contribution after the date of separation. In this regard senior counsel for the wife submitted that a global approach ought to be taken as to assessment of contribution. The 10 per cent adjustment under s.75(2) of the Act was based primarily on the significant disparity in the earning capacities of the parties, but also on the contention that the husband had not complied with his duty of full and frank disclosure to the Court.

2. The order sought by the respondent husband is contained in his minute of order dated 8 April 2013, reproduced in the second schedule to these Reasons. He submitted that, as at the date of separation, the different and diverse contributions they both made should be assessed as being equal. The husband denied that the period of separation during the marriage should result in an assessment of contribution more generous to the wife, or that his gambling activities would warrant such an adjustment. He further denied that there was any non-disclosure on his part. In relation to an adjustment in the wife’s favour under s.75(2) of the Act, the husband conceded it should be 10 per cent. The husband submits that the contribution he made after separation must be assessed in a manner quite different to how it is assessed during the marriage, because of the different contributions they made. Ultimately, when pressed by the Court, counsel for the husband submitted that in the post-separation period his contribution should be assessed as seven (7) to eight (8) times greater than that of the wife.

The Evidence and Issues

1. Both parties relied on affidavits and financial statements they had each sworn.  A number of documents were tendered in evidence.  Both parties were cross-examined.  An issue arises about credit, particularly as regards the husband’s evidence, and findings will need to be made in this regard.  There are some minor issues about the balance sheet, and in particular whether, and if so to what extent, there should be added back a payment made to the wife pursuant to orders made by consent on 11 July 2012.  There is also an issue about the division in specie of the husband’s Qantas frequent flyer points. 

Applicable Law

1. The preferred approach to the determination of an application under s.79 of the Act as set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143 at 39.

2. The Full Court states that there are four (4) inter-related steps:

   a)Identify and value the property, liabilities and financial resources of the parties; and

   b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and

   c)Identify and assess the other facts relevant under s.79(4)(d)-(g) of the Act including s.75(2) of the Act and determine the adjustment (if any) to be made to the contribution entitlements at step two; and

   d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.

3. One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.

4. The High Court’s recent decision in Stanford v Stanford (2012) FLC93-518 has little application to the determination of this case. Both parties seek orders for alteration of property interests. The relationship has broken down irretrievably. The legal and equitable interests of the parties will be identified in discussing the balance sheet.

5. Section 66G of the Act provides:

   Court's power to make child maintenance order

   In proceedings for a child maintenance order, the court may, subject to this Division and to section 111AA, make such child maintenance order as it thinks proper.

6. With regard to add-backs the leading authority is the Full Court of the Family Court of Australia’s decision in NHC & RCH (2004) FLC ¶93-204, where the Court in concluding that “the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule” said in relation to legal fees as follows:

   56.In summary … while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.

   57.If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.

   58. If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.

   59. Outstanding legal fees themselves are generally not taken into account as a liability.

   60.If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.

7. The basis for the add-back of legal costs, can be found in an argument that a failure to add-back, would have the effect of defeating the policy underlying s.117 of the Act. See DJM & JLM (1998) FLC ¶92-816. This policy contemplates that each party should pay his or her own costs, unless the Court orders otherwise. If the pool of property otherwise available for distribution, has been reduced by payment out of monies to meet legal costs, those monies should be added back.

Balance Sheet Issue

1. By the conclusion of submissions, the parties presented the following joint balance sheet: 

Ownership		Description	Wife / de facto partner’s value $	Husband / de facto partner’s value $
ASSETS
1.	H	Property D	585,000	585,000
2.	H	Property S	530,000	530,000
3.	H	Property M	255,000	255,000
4.	H	(omitted) Unit, (country omitted)	912,708	912,708
5.	H	(bank omitted) Account	100,812	100,812
6.	H	(omitted) Shares	37,681	37,681
7.	H	(omitted) Bank Account (& 7,8,9,10,11)	533,129	533,219
8.	H	(omitted) Bank Account
9.	H	(omitted) Bank Account
10.	H	(omitted) Bank Account
11.	H	(omitted) Bank Account
12.	H	Long Service Leave	17,000	17,000
13.	H	(omitted) Shares – 3186 shares at $22.92 per share	74,126	74,126
14.	H	MasterCard (positive balance)	538	538
15.	H	(vehicle omitted)	23,605	23,605
16.	H	Holden (omitted)	6,150	6,150
17.	H	(vehicle omitted)	29,750	29,750
18.	H	Household Contents	Nil	Nil
19.	W	(bank omitted)	29,076	29,076
20.	W	(omitted) Superannuation Fund	1	1
21.	W	(omitted) Shares – 600 Shares	2,718	2,718
22.	W	Household Contents	5,000	5,000

Total $3,142,294 $ 3,142,294

ADDBACKS
23.	Payment to the Wife: Orders 11 July 2012	$   145,924

Total $   0 $   145,924

LIABILITIES
24.	H	Mortgage (bank omitted) in (country omitted)	290,060	290,060
25.	H	Mortgage (bank omitted)	111,153	111,153

Total	$   401,213	$   401,213
Net Assets	Assets-Liabilities	$2,741,081	$2,887,005

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
26.	H	(omitted) Superannuation Fund	Accumulation	577,229	577,229
27.	W	(omitted) Superannuation Fund	Accumulation	15,657	15,657

Total $592,886 $   592,886

FINANCIAL RESOURCES
Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
28.	H	Frequent Flyer Points	836,000

Total 836,000 $   0

SUMMARY
Ownership		Description	Wife’s value            $	Husband’s value $
Total		Total net assets + superannuation	$3,333,967	$3,479,891

1. There are only two (2) issues about the balance sheet.  The first issue is item 23 and is whether, and if so to what extent, there should be an add-back in relation to $145,924.00.

2. On 11 July 2012, the parties entered into the following consent interim orders:

   (1)That the Husband shall pay to the Wife by way of child maintenance the sum of $520 per week for each of the children X born (omitted) 1994 and Y born (omitted) 1995 such sum to be paid monthly into the Acct Number (omitted) the first payment to be made 26/7/12 and monthly thereafter.

   (2)That the Husband shall pay to the Wife the sum of $175,000 within 21 days from the date of these Orders with such payment to be characterised at the Trial.

   (3)That the Wife’s Application for spouse maintenance be adjourned to the final hearing. 

3. The sum of $145,924.00 represents, according to the husband, that part of the $175,000.00 that is not already represented in the property pool at item 19, the wife’s account with the (omitted) Bank.  He contends, firstly, that all of the balance should be added back because the wife’s evidence about how she used the moneys ordered to be paid on 11 July 2012 does not establish that her expenditure was either reasonable, or for the benefit of the family.  Alternatively, it was submitted on behalf of the husband that the sum of $45,000.00 must, in any event, be added back given the wife’s evidence that it was spent on legal fees.  The husband’s submission in this regard is that it was a premature distribution of matrimonial asset and that it would be unfair to him not to have this added back in circumstances where the moneys in question were joint fund and where he has paid his legal expenses out of his income.  In this regard senior counsel for the husband submitted that the wife’s evidence of how she spent the money was entirely appropriate, reasonable, and focused on a benefit to the family as well as preservation of assets.  The Court agrees.  The wife’s evidence at paragraph 40 of her affidavit, for example, establishes the reasonableness of this expenditure and its focus on benefiting the family, as well as preserving assets.  The one exception, however, is in relation to legal fees.  The amount of $45,000.00 used for legal fees should be added back. 

4. The next issue about the balance sheet was item 28, the husband’s frequent flyer points.  In cross-examination, the husband confirmed that he believed that his Qantas frequent flyer points as at the date of the hearing totalled 860,000.  More will be said about the frequent flyer points below, but it is quite clear on the evidence that the appropriate figure at item 28 should be 860,000, and not 836,000 points.  There is no issue about the value of these as the parties are agreed that they should be divided in specie.

1. Having regard to the Court’s findings above, the final balance sheet should be as follows: 

Ownership		Description	Value $
ASSETS
1.	H	Property D	585,000
2.	H	Property S	530,000
3.	H	Property M	255,000
4.	H	(country omitted) Unit	912,708
5.	H	(omitted) Bank Account	100,812
6.	H	(omitted) Shares and (omitted) Shares	37,681
7.	H	(omitted) Bank Account (& 7,8,9,10,11)	533,219
8.	H	(omitted) Bank Account
9.	H	(omitted) Bank Account
10.	H	(omitted) Bank Account
11.	H	(omitted) Bank Account
12.	H	Long Service Leave	17,000
13.	H	(omitted) Shares – 3186 shares at $22.92 per share	74,126
14.	H	MasterCard (positive balance)	538
15.	H	(vehicle omitted)	23,605
16.	H	Holden (omitted)	6,150
17.	H	(vehicle omitted)	29,750
18.	H	Household Contents	Nil
19.	W	(Bank omitted)	29,076
20.	W	(omitted) Superannuation Fund	1
21.	W	(omitted) Shares – 600 Shares	2,718
22.	W	Household Contents	5,000

Total $ 3,142,384

ADDBACKS
23.	45,000

Total Add-back legal fees paid by (omitted) $   45,000

LIABILITIES
24.	H	Mortgage (bank omitted) in (country omitted)	290,060
25.	H	Mortgage (bank omitted)	111,153

Total	$   401,213
Net Assets	Assets-Liabilities	$2,786,171

SUPERANNUATION
Member		Name of Fund	Type of Interest	Value $
26.	H	(omitted) Superannuation Fund	Accumulation	577,229
27.	W	(omitted) Superannuation Fund	Accumulation	15,657

Total $   592,886

FINANCIAL RESOURCES
Ownership		Description	Value (Points)
28.	H	Frequent Flyer Points	860,000

Total 860,000

SUMMARY
Ownership	Description
Total	Total net assets + superannuation	$3,379,057

Credit Issues 

1. In closing submissions senior counsel for the wife submitted that the husband gave evidence in a manner that was self serving, unresponsive, and in certain respects untruthful.  As it turns out, and for the reasons articulated below, the Court agrees with these submissions and finds that the husband was less than frank in certain evidence before the Court, and that his evidence about financial matters should not be preferred over that of the wife unless independently corroborated by documents or other evidence.  These findings also lead to the finding that the husband has been less than frank in disclosing to the Court the true extent of his assets and liabilities as a result of which the Court cannot be satisfied that he has disclosed to the Court all of his assets.  These findings are based on six (6) relevant issues.  

2. Firstly, the husband’s evidence about his frequent flyer points was entirely unsatisfactory.  The correspondence between his solicitor and the wife’s solicitor made it plainly obvious that his ownership of frequent flyer points was considered a resource that should be disclosed to the Court, and an item to be divided between the parties.  He represented that he had 836,000 frequent flyer points on his contended version of the balance sheet, and in examination-in-chief.  In cross-examination, however, he agreed that on 27 March 2013, shortly before the final hearing, his Qantas frequent flyer points balance was 1,350,000 points.  Moreover, he explained in cross-examination that on 4 April 2013, the Thursday before the hearing, he used over 500,000 points for the purposes of purchasing tickets for his parents to travel to (country omitted).  In cross-examination, he also disclosed that he had (airline omitted) frequent flyer points.  His disclosure was less than satisfactory.  His disposition of a substantial quantity of points in such proximity to the hearing is breathtaking in circumstances where he was clearly aware of the issue.  

3. The second finding that goes to an adverse credit finding for the husband was his evidence about claiming a negative gearing tax deduction in relation to one of the investment properties in circumstances where he acknowledged that the loan whose interest was to be used to set off against rental income, was not a loan that was used for the purpose of acquisition of the property, or deductible purposes. 

4. The third factor working against the husband was the manner in which he gave evidence in cross-examination.  Senior counsel correctly submitted that his answers, and his manner, was often self serving and unresponsive.  The Court would go further than that and find that at times, and particularly in relation to the evidence that he gave about matters to be discussed presently, he was evasive. 

5. The fourth issue about the husband’s credibility arises out of the evidence that he gave in relation to gambling.  The husband agreed that he did gamble during the marriage, particularly during the period of their separation, but he said it ceased thereafter and that it was for relatively modest amounts.  He agreed in cross-examination that there was a period when he was spending large amounts at Star City Casino.  Over a three (3) to four (4) year period between 1997 and 2001 he would have lost between $10,000.00 and $15,000.00 at the casino.  He insisted, however, that after then he only visited the casino once or twice and lost possibly $1,000.00.  He denied any other form of gambling, or ever having borrowed to gamble, or ever having discussed borrowing money for gambling purposes.  He was then confronted with a business record produced by the (omitted) Bank of 28 December 2008 which states: 

   Assisted with transfer of funds from (omitted) Bank Account to (omitted) Bank Account.  Client advised will be taking $60,000.00 in cash from the branch for gambling and possible car purchase.  Declined information on car insurance.

6. The husband’s evidence in cross-examination was that he had no recollection of this event and had no idea why the event would be recorded as it was.  Indeed, he asserted that it was perhaps the bank officer who said to him that he was going to use the money for gambling, rather than the other way round.  The Court does not accept this.  It is an implausible explanation.  It is inherently unlikely that a bank officer, who in the normal course of his business would make records of discussions with a customer, would invent the reference to $60,000.00 for gambling.  Moreover, his bank records produced on subpoena, and tendered in evidence, contained multiple references to withdrawals at an ATM at Star City Casino in not insubstantial amounts, and during the period many years after the husband asserted that his gambling ended.  In all the circumstances, the Court does not accept the husband’s evidence that his gambling was limited to the period that he contends.  Moreover, the Court does not accept the husband’s contention about how much he gambled, after the reconciliation.  Indeed, the Court prefers the wife’s evidence contained, for example, at paragraph 23 of her affidavit where she says that the husband told her: 

   I’ve burnt a lot of money.  You wouldn’t believe how much I’ve burnt.  On one night, I lost around $25,000.00.

7. The Court finds that the husband has been less than truthful in his disclosure to the Court about the nature, extent and period of his gambling activities.  This adversely reflects on his credit, and is, of course, also relevant to assessment of contributions.

8. The fifth adverse finding against the husband, and possibly the most unsatisfactory part of the husband’s evidence, related to loans, or a loan, from his father and whether, and if so when, it was repaid.  The husband led no evidence whatsoever about this in his affidavit.  He objected to the wife’s evidence about the issue, but during his own counsel’s cross-examination of the wife the husband’s case about the loan changed.  Thus, on day one (1) of the hearing, his case was that $100,000.00 was advanced by his father to him in 2006 to assist them.  He said that the wife was present when this took place and that the moneys went into a bank account.  He said that it was repaid to the father in December 2008 by way of an extension on the parties’ mortgage.  He described the purpose of the loan to be construction of a duplex property.  

9. By day two (2) of the hearing, however, his instructions had changed.  He said that $100,000.00 was advanced by his father, but it was in 2009, and that the amount repaid to his father was $150,000.00, not $100,000.00.  When he was cross-examined, his evidence about this became even more curious and inconsistent.  At one stage he agreed with his wife’s description of what took place during the conversation with his father, and then at a later stage he resiled from that.  When confronted with documentation from banks about the transaction he could not explain obvious inconsistencies about dates and amounts.  When asked to produce a critical document evidencing the repayment to his father, he produced a doctored copy, quite different from the original, in that it did not disclose reference to a bank account, albeit possibly of his father’s rather than his.  When asked to explain why, if a loan of $100,000.00 was obtained, he was repaid $150,000.00, he explained that it was to repay his father for all the help provided by his father.  He changed his evidence about the date when the money was received, and then the date when it was repaid.  In short, the husband’s evidence about the alleged loan transaction was so inconsistent, and so opaque, that the Court simply does not know whether money was provided and if so for how much or for what purpose, and whether money was repaid, and if so in what amount and when.  The onus was, at all relevant times, on the husband to provide this information to the Court.  Again, these findings are relevant both to credit, and non-disclosure.    

10. The last factor that supports these adverse findings against the husband is his counsel’s choice, presumably on instructions, not to re-examine him.  Senior counsel for the wife described this decision as remarkable in that he was the only person who could provide an explanation to the Court about the transaction but chose to leave the Court in the dark.  The Court accepts that there might be many reasons why the husband elected not to re-examine but, in the circumstances of this case, the inference may reasonably be drawn that re-examination would not have assisted the husband’s evidence.

11. Counsel for the husband submitted that his evidence did not amount to evidence of a deliberate attempt to obfuscate, but rather merely demonstrated an inability to answer questions about transactions that took place some time ago.  The Court does not accept this submission.  The totality of the husband’s evidence, as summarised above, indicates that his evidence about financial matters cannot be believed in the absence of independent corroboration, as well as there being a very strong inference that he has failed to disclose to the Court about his assets.

Assessment of Contribution 

1. The Court cannot accept the wife’s contention that a global approach should be used to assessing contribution.  Almost a third of the current net pool of asset was acquired by the husband in the post-separation period.  Moreover, these assets are readily identified as item 4 in the balance sheet, the husband’s unit at (country omitted), and item 7, the husband’s (omitted) Bank accounts.  In circumstances where the wife cannot contend that she made any meaningful financial contribution to these assets, it is just and equitable that the contribution be assessed as regards these assets separately to the assets held at cohabitation.   

2. As at the date of separation the husband contends the contribution should be assessed as being equal thus acknowledging that whilst he made the overwhelming financial contribution, his wife’s contribution as homemaker and parent and in a non-financial capacity should be assessed in the same way as his.  The husband’s submissions does not, however, directly address the wife’s case relating to his gambling, as well as the nearly four (4) year period of separation.  The wife’s case is that these factors result in an assessment of contribution in her favour as to 60:40. 

3. The wife gives quite detailed evidence about their first separation, and the period thereof.  Whilst she continued to occupy the home with the children, he stopped paying the bills in the house and stopped providing money for housekeeping, and spent little time with the children.  She lived off money she had left over from a redundancy payout, as well as the child support that he paid.  She was also dependent on Centrelink benefits.  During this period the husband continued to work full-time, receive all of his income, as well as the rental income from an investment property, out of which he paid the mortgage.  The husband does not challenge this evidence.  Indeed, he says very little about this period. 

4. Coinciding with this period, and as it turns out and for the reasons set out above continuing for several years thereafter, the husband gambled.  Even on his own evidence, there were losses, but accepting as the Court does the wife’s evidence over his on this issue, the losses were substantial.  The basis for a higher assessment of contribution is not just the difficulty the wife experienced in maintaining herself and the children during the period of separation, but also that it coincided with the husband’s gambling.  The gambling cannot be quantified.  The wife does not contend that it should be added back, but rather that the impact on her of having to care for three (3) young children in the circumstances set out in the evidence, as well as the impact on the parties’ finances of the husband’s gambling, should result in a higher assessment of contribution because hers was greater in this period.  The Court accepts this as a general proposition, but the real challenge is in the assessment.  The precise impact of the husband’s gambling activities cannot be measured.  During the period of the separation the husband paid the child support he was assessed to pay, as well as providing a home for the family.  The Court has no doubt that this was a difficult period with arduous contribution by the wife, but in the circumstances a five (5) per cent adjustment is considered just and equitable, particularly bearing in mind that the pool of assets at separation was about $2,000,000.00 net. 

5. The contribution in the post-separation period is an even more difficult exercise. When pressed, counsel for the husband quite properly conceded not only that the wife’s contribution as homemaker and parent and under s.79(4)(c) of the Act continued after separation, but also that hers could be assessed as being inferior to that of the husband’s in the ratio of seven (7) or eight (8) to one (1). The Court interprets this as a submission that the wife’s contribution in the post-separation period should be assessed as being 12.5 per cent. The effect of senior counsel for the wife’s submission would be that it is 50 per cent.

6. Senior counsel for the wife referred the Court to the Full Court’s decision in Best & Best (1993) FLC 92-418, but it is hard to see how that case assists in assessing the wife’s post-separation contribution under s.79(4)(c) of the Act. It was the husband’s earning capacity that created the post-separation wealth. His earning capacity, however, is not an asset to which she has contributed. At page 80283 in Best & Best, the Court expressed no view about the idea that the husband’s increased earning power derived from his professional qualifications and experience was property to which the wife may have made a contribution.  At page 80295 the Full Court also made some observations about the “feminisation of poverty”, but the facts of this case are so different to that in Best & Best that it could not seriously be argued that the wife here is left impoverished.   

7. A more useful decision to consider might have been the Full Court’s decision in Farmer & Bramley [2000] FamCA 1615; (2000) FLC 93-060 where one spouse’s contribution under s.79(4)(c) of the Act was considered in more detail. Thus, for example, Finn J said at paragraph 56-57:

   56.First an issue has arisen in this appeal as to whether an entitlement based on contributions made to the welfare of the family can only be satisfied out of property available to the parties at the time the contribution was made. In my view, there is nothing in s 79(4)(c) or indeed else in the Act, or in the authorities to date, which would justify such a limitation. Again in my view, if such a limitation were to be applied in any particular case, its justification would have to be found in the generally worded limitation in s 79(2) that a court shall not make an order under s 79 ``unless it is satisfied that in all the circumstances it is just and equitable to make the order''.

   57. Secondly, if it was to be determined that a majority of the community considered that one spouse should, as a general rule, have no entitlement to share in property either by good fortune or good management acquired after separation by the other spouse, then the Act would need to be amended to make this clear. As the Act currently stands, the jurisdiction conferred by s 79(1) to alter the interests of spouses in property extends without limitation to all the property which either spouse is entitled ``whether in possession or reversion'' (s 4).

8. Moreover Kay J said at paragraph 65-69:

   65. Guest J, having analysed several relevant cases, reaches a conclusion that there should be no consideration of s 79(4)(a), (b) and (c) issues other than those that post-date the acquisition of the lottery winnings. In my view the passages cited by Guest J from Shaw and Shaw (1989) FLC 92-010, Jones and Jones (1990) FLC 92-143 and Branicki (unreported Full Court 18 May 1990), place beyond doubt the proposition that an assessment of contributions made under s 79(4)(a), (b) and (c) does not have to bear a direct relationship to the assets as they presently exist. The court is asked to determine what is an appropriate and just and equitable order, bearing in mind not only the contributions made directly to the existing assets, but contributions made generally during the course of the relationship between the parties both to the acquisition, conservation and improvement of assets (which may or may not still exist) and to the welfare of the family in the role of homemaker and parent.

   66. This is not to say that the Court should be blind to the circumstances in which any assets were acquired post-separation. Clearly contributions made towards the acquisition of such an asset by one party and the lack of contributions made towards its acquisition by the other party may weigh heavily in the exercise of discretion. However it is quite wrong to say that contributions made under s 79(4)(a), (b) or (c) before an existing asset was acquired could have no bearing on the outcome of the proceedings.

   67. In Bradley v Weber [1998] FamCA 90, coram Baker, Lindenmayer and O'Ryan JJ) the Full Court did not consider Shaw (supra) but commented upon the question of contribution to the Lotto winnings of the husband in that case. The wife's counsel submitted that the fact that the winnings came into the pool after separation made little difference. As to that, the Full Court had this to say:

   5.9 As to the first of those submissions, we think that it is significant that the lotto winnings came into the pool after separation because, as her Honour found, the effect of that (the ticket having also been bought by the husband from his funds after separation) is that those winnings, applied by him towards the acquisition of property brought into account in the proceedings, constituted a direct financial contribution by him to that property. That direct financial contribution was unmatched by any like contribution on the part of the wife. That does not mean, of course, that the wife made no contribution to the property acquired with the lotto winnings, but her contribution was an indirect one, principally through her continuation in the role of homemaker and parent — a contribution under paragraph (c) of s 79(4).

   68. There is nothing said in that passage which detracts from the principles discussed above, namely the Court's task is to evaluate all of the contributions from the time of the commencement of the parties' relationship until the time of the hearing and give such weight to such contributions as the Court thinks is appropriate in the circumstances. All that passage concerned itself with was the contribution that could be measured directly against the lottery winning in a temporal sense. It did not purport to confine the Court from considering the like contribution to the welfare of the family which may have been made over many previous years.

   69. No doubt there are a myriad of examples that can be used to illustrate the principle that all of the contribution history needs to be examined to reach a conclusion as to what distribution should now be allowed when dealing with the ``second step'' identified in Pastrikos and Pastrikos (1980) FLC 90-897 et al. … ''

1. The Court’s present task is clearly to evaluate all of the contributions up until the date of the hearing and to give such weight to those contributions as the Court thinks appropriate in the circumstances.  The wife made little financial contribution to the acquisition of the post-separation assets in question.  True it is, however, that a close examination of the parties’ financial circumstances at the date of separation shows that the husband had work related benefits after separation that accrued as a result of service before separation.  In addition, he had access to some funds which were clearly derived before separation.  In terms of assessing the wife’s non-financial contribution, however, one must compare the financial and personal circumstances of both the husband and wife in the relevant period.  By any definition, the husband enjoyed a comfortable, if not luxurious lifestyle in (country omitted).  He earned so much that he was able to accumulate about a $1,000,000.00 in assets.  His employment benefits included not just a tax free income, but allowances for club memberships, motor vehicles, accommodation, travel, and even mobile telephone.  By contrast, during this period the wife was responsible for the care of children.  Even though two (2) of the boys attained majority the evidence seems to indicate that she provided a standard of care for them that was not just appropriate and reasonable, but that which the husband himself contemplated for them.  It is indeed true that he provided financially for them, but what he provided came out of his abundance.  Out of his more than comfortable lifestyle, the wife and children got by, but were certainly not destitute.      

2. In the circumstances, the Court assesses the wife’s contribution in the post-separation period to the assets acquired post-separation to be 25 per cent.  This figure takes into account the far greater financial contribution that the husband made, but recognises that, at least in part, he was only able to make this because he was freed of the caring responsibilities in relation to his children.

Adjustment Under Section 75(2)

1. In closing submissions counsel for the husband conceded that there should be an adjustment under s.75(2) of the Act in favour of the wife not exceeding 10 per cent, particularly taking into account the fact that his income and earning capacity was superior to that of the wife. Senior counsel for the wife, likewise, submitted that there should be a 10 per cent adjustment under s.75(2) of the Act, for the reasons articulated, but also because of non-disclosure. To be fair, however, the 10 per cent adjustment was contended in circumstances where he submitted the final outcome should be a 70:30 split on global terms. For reasons explained, the global approach does not meet with the Court’s favour, but, nonetheless, consideration must be given to increasing the wife’s s.75(2) claim because the Court has adopted a different approach. Indeed, there is substantial merit in the contention that a 10 per cent adjustment is not enough. The matters raised by counsel for the husband alone, namely, the difference in incomes and earning capacity, would alone justify a 10 per cent adjustment. The husband’s non-disclosure warrants a further five (5) per cent adjustment in her favour in circumstances where the Court simply cannot be satisfied that the husband’s finances are as he asserts. In all the circumstances, therefore, a 15 per cent adjustment under s.75(2) of the Act is warranted. The Court rejects the husband’s contention as to the lack of security of his employment, or of his limited future employment prospects. Quite apart from issues of credit adverse to the husband, there is no evidence to support his contention.

2. Given that the Court has adopted an asset-by-asset approach, and drawn the distinction between assets at separation and afterwards, how should the 15 per cent adjustment be applied?  The 15 per cent adjustment should clearly be applied on top of the finding of contribution (55 per cent) to the assets held at the date of separation.  This means the wife should receive 70 per cent of those assets.  Moreover, there is no conceptual reason why the 15 per cent adjustment should not be added to the 20 per cent contribution for the post-separation assets.  The same reasons for making the adjustment apply to both pools of assets.  This increases the wife’s share of the post-separation pool to 35 per cent.  

The Section 66G Claim

1. This claim arises, of course, because the husband is no longer resident in Australia.  Both orders sought are framed to conclude when the youngest child turns 18.  The only difference is quantum, with the wife seeking $3,150.00 per calendar month, and the husband proposing $2,253.00 per calendar month. 

2. What is abundantly clear from the evidence of the husband’s finances is that he has more than adequate capacity to pay the amount sought by the wife. His counsel was critical of the evidence that the wife adduced about her needs, and accordingly the child’s needs. The Court does not accept that criticism. The combination of the evidence that she sets out in her affidavit about expenditure on the children, together with the evidence in her financial statement, leads the Court to conclude that the amount that she seeks is reasonable in all the circumstances of this case. Indeed, when compared to the lifestyle the husband is enjoying in (country omitted), his son’s needs are moderate indeed. Having regard to all the evidence in this case, I find that the amount that the wife seeks for child maintenance is proper for the purposes of s.66G of the Act and that the husband has the capacity to pay the financial support necessary.

The Orders   

1. Accordingly the wife is assessed to be entitled to 55% contribution and 15% s.75(2) adjustment as regards assets at separation, and 25% contribution and 15% s 75(2) adjustment for assets accumulated after separation.

2. The evidence suggests that in broad terms the assets acquired by the husband after separation comprise:

Item Number in balance sheet	Description	Value
4	(country omitted) unit	$912,708
7	(bank omitted) accounts	$533,219
24	(omitted bank) mortgage	($290,060)
Total		$1,155,867

1. The court will round this down to $1,000,000 to allow for some uncertainty in relation to the precise accounts accumulated in the (bank omitted) accounts post separation.

Pool 1	Pre-separation	$2,379,057
Pool 2	Post-separation	$1,000,000

1. The net asset pool is $3,379,057. This will notionally be divided as follows:

2. The wife’s share of Pool 1 is 70% or $1,665,340.

3. The wife’s share of Pool 2 is 40% or $400,000

4. The wife’s total entitlement is, thus, $2,065,340.

5. The assets the wife has in her name are minimal – items 19-22 of the balance sheet amount to only $36,795 but there must also be an add-back in favour of the wife of $45,000. Thus she holds assets, including notional property, of $81,795. The husband would need to pay her $1,983,545.

6. The orders sought by the wife are reproduced in the schedule to these reasons. The following observations apply to the numbered orders sought:

   (a)Order 1 provides to the wife $100,812. If the balance of this account is more, this will be retained by the husband. If it is less, it is the husband’s responsibility to make up any shortfall.

   (b)Order 2 provides to the wife property to the value of $1,370,000. The court recognises that these properties also provide her an income stream, but that does not detract from the findings made under s 75(2). She will have outgoings to pay on those properties. Her income will still be nothing like the husband’s.

   (c)Order 3 requires the husband to discharge a mortgage presumably secured over one of the properties transferred pursuant to order 2. If this mortgage actually secures a liability it is not noted in the balance sheet. Order 3 also requires a further cash payment of $335,000.

   (d)Once orders 1-3 are implemented, the wife would be receiving $1,805,812 out of an entitlement of $1,983,545.

   (e)Order 4 provides for a superannuation split. The amount in question will need to be $177,733 being the balance required to be paid to her in accordance with these reasons.

   (f)Order 5 refers to the husband’s Qantas Frequent Flyer points. The parties have agreed to split these equally. The wife will therefore receive 430,000 points.

   (g)Orders 6 and 7 are appropriate and need no comment.

   (h)Order 8 relating to s 66A child maintenance will be in the amount sought by the wife.

7. Is this order altering property interests just and equitable as regards the husband? The court believes it is. He is left with assets of $1,313,717 in circumstances where the court is not satisfied that he has provided proper disclosure of his financial affairs, where he earns a substantial income, and where his conditions of employment give him the opportunity to save significant sums of money quickly. He will be left with real estate, superannuation and substantial cash. Both his short term and long term needs are adequately provided for.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:  4 June 2013

SCHEDULE 1

IN THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
AT SYDNEY

No. SYC6032 of 2011

IN THE MARRIAGE OF

MS AINSLEY
(Applicant)

and

MR AINSLEY
(Respondent)

AMENDED MINUTE OF ORDER SOUGHT BY WIFE AT HEARING

8 APRIL 2013

1. That the husband forthwith, do all acts and things and sign all documents to pay the proceeds of the (bank omitted) Account number (omitted) in the sum of $100,812 to the wife.

2. That the husband, within 14 days of the date of these Orders, do all acts and things and sign all documents to transfer to the wife the following properties:

1. Property D, being the whole of the land contained in Folio Identifier (omitted).

2. Property S, being the whole of the land contained in Folio Identifier (omitted).

3. Property M, being the whole of the land contained in Folio Identifier (omitted).

3. Simultaneously with the transfers, the husband shall:

1. do all acts and things and sign all documents to discharge mortgage number (omitted) to the (omitted) Bank, and

2. pay to the wife the sum of $335,800.

4. That pursuant to paragraph 90(MT)(1)(b) of the Family Law Act 1975, whenever the Trustee of (omitted) Superannuation Fund makes a splittable payment from the interest held by Mr Ainsley, the Trustee shall pay to Ms Ainsley or her administrators, executors, beneficiaries, heirs or assigns the amount of $350,000 and there shall be a corresponding reduction in the entitlement Mr Ainsley would have had in (omitted) Superannuation Fund but for these Orders.

5. That within 14 days of the date of these Orders, the husband do all acts and things and sign all documents to cause Qantas Frequent Flyer to transfer 900,000 of his frequent flyer points to the wife’s account.

6. That other than as specifically provided for in these Orders each party is solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the name, possession, ownership and/or control of each of the parties as at the date of these Orders.

7. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Family Court shall be appointed pursuant to Section 106A of the Family Law Act to execute such deed or instrument and do all acts and things necessary to give validity and operation to the said deed or instrument.

CHILD MAINTENANCE

8. Pursuant to Section 66G of the Family Law Act, the husband shall pay to the wife directly child maintenance for the child Y born (omitted) 1995 (“the children”), in the sum of $3,150 per month commencing on the first day of the month following the making of these Orders and continuing until each of the children attains the age of 18 years.

SCHEDULE 2

IN THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
AT SYDNEY

No. SYC6032 of 2011

IN THE MARRIAGE OF

MS AINSLEY
(Applicant)

and

MR AINSLEY
(Respondent)

MINUTE OF ORDER SOUGHT BY HUSBAND AT HEARING

8 APRIL 2013

Property

1. That the husband, within 28 days of the date of these Orders, do all acts and things and sign all documents to transfer to the wife the following properties:

Property D, being the whole of the land contained in Folio Identifier (omitted).a.   

Property S, being the whole of the land contained in Folio Identifier (omitted).b.   

1. Simultaneously with the transfers, the husband shall:

do all acts and things and sign all documents to discharge mortgage number (omitted) to the (omitted) Bank.a.   

1. That pursuant to paragraph 90(MT)(1)(b) of the Family Law Act 1975, whenever the Trustee of (omitted) Superannuation Fund makes a splittable payment from the interest held by Mr Ainsley, the Trustee shall pay to Ms Ainsley or her administrators, executors, beneficiaries, heirs or assigns the amount of $198,000 and there shall be a corresponding reduction in the entitlement Mr Ainsley would have had in (omitted) Superannuation Fund but for these Orders.

1. Order that the Husband do all things and sign all documents necessary to transfer to the Wife the following:

(vehicle omitted) motor vehicle Reg No. (omitted)a.   

Holden (omitted) motor vehicle Reg No. (omitted)b.   

1. That other than as specifically provided for in these Orders each party is solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the name, possession, ownership and/or control of each of the parties as at the date of these Orders.

1. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Family Court shall be appointed pursuant to Section 106A of the Family Law Act to execute such deed or instrument and do all acts and things necessary to give validity and operation to the said deed or instrument.

Child Maintenance

1. Pursuant to Section 66G of the Family Law Act, the husband shall pay to the wife directly child maintenance for the child Y born (omitted) 1995 (“the children”), in the sum of $2,253 per month commencing on the first day of the month following the making of these Orders and continuing until 23 December 2013.