Ashcroft & Rosen
[2024] FedCFamC2F 1428
•17 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Ashcroft & Rosen [2024] FedCFamC2F 1428
File number(s): DGC 1473 of 2023 Judgment of: JUDGE JENKINS Date of judgment: 17 October 2024 Catchwords: FAMILY LAW – PROPERTY – De facto relationship – non-compliance with trial directions – complete non-disclosure by respondent – failure to file or challenge evidence. Legislation: Family Law Act 1975 (Cth) ss 90SM(1), 90SM(3), 90SM(4) Cases cited: Aleksovski & Aleksovski [1996] FamCA 111
Bevan & Bevan [2013] FamCAFC 116
Clauson & Clauson (1995) FLC 92-595
Commissioner of Taxation v Worsnop (2009) FLC 93-392
Dickons & Dickons [2012] FamCAFC 154
Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FLC 93 143
Lee Steere & Lee Steere (1985) FLC 91-626
Mallet v Mallet (1984) 156 CLR 605
Omacini & Omacini [2005] FamCA 195
Re F: Litigants in person guidelines (2001) FLC 93-072
Stanford and Stanford [2012] HCA 52
Weir & Weir [1992] FamCA 69
Division: Division 2 Family Law Number of paragraphs: 72 Date of hearing: 3 October 2024 Place: Dandenong Counsel for the Applicant: Ms Theoharopoulou Solicitor for the Applicant: Malkin Lawyers Representative for the Respondent: Self-represented ORDERS
DGC 1473 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ASHCROFT
Applicant
AND: MR ROSEN
Respondent
ORDER MADE BY:
JUDGE JENKINS
DATE OF ORDER:
17 OCTOBER 2024
IT IS ORDERED BY THE COURT THAT:
1.The net proceeds of sale of B Street, Suburb C, in the state of Victoria, after the payments provided for in orders 3 (a) to (d) of the interim orders of this court dated 3 October 2024 be divided as follows:
(a)To effect a 70 per cent division of the total asset pool to the applicant; and
(b)The balance to the respondent.
2.For the purposes of order 1 the asset pool is set out in annexure A to these orders.
The Respondent’s Corporate Entities
3.In relation to the corporate entities namely, D Pty Ltd (formerly E Pty Ltd), F Pty Ltd, G Pty Ltd, Rosen Superannuation Fund, and H Pty Ltd to be (“collectively called the Respondent’s Corporate Entities”) the following shall apply:
(a)Except as otherwise provided in these Orders, the Applicant shall have no claim or right to claim any right, title or interest, in or income or payment from the Respondent’s Corporate Entities; and
(b)The Respondent shall pay and indemnify the Applicant and keep her indemnified against any and all liabilities of or in relation the Respondent’s Corporate Entities, of whatsoever nature or kind and howsoever and whensoever arising (past, present and future) including but not limited to any debt personally guaranteed by the Applicant and any unpaid tax (including capital gains), penalties, fines and interest assessed, or hereinafter assessed, against the Applicant with respect to income derived, distributed or otherwise received or deemed to have been received by the Respondent and/or the Applicant from any of the Respondent’s Corporate Entities, or any amount owed by the Applicant to any or all of the Respondent’s Corporate Entities and from all actions, proceedings, costs, claims and demands in respect thereof.
Superannuation Orders – Rosen Super Fund
4.The Respondent retain all of his entitlement in the Rosen Super Fund (SMSF).
5.Within 14 days of these Orders, the Applicant do all such acts and things and sign all such documents necessary, at the expense of the SMSF, to:
(a)Resign as a Trustee;
(b)Resign as a member of the Fund; and
(c)Renounce all claim against the Trustee and/or the Fund.
6.The Respondent be solely liable for, pay, and indemnify the Applicant against any and all liabilities of or in relation to the Trustee and/or the SMSF including but not limited to any unpaid tax (including capital gains), penalties, fines and interest assessed or hereinafter assessed with respect to income derived, distributed or otherwise received by the Trustee and/or the Fund or in relation to the Fund’s non-compliance with the Superannuation Industry (Supervision) Act 1993 (Cth) and associated Regulations.
Property to be retained
7.The Applicant shall retain as her property to the exclusion of the Respondent:
(a)Her motor vehicle;
(b)Her savings and bank accounts;
(c)Her cryptocurrency;
(d)All the household furniture and chattels in her possession and or in the Suburb C property; and
(e)Her Superannuation entitlements.
8.The Respondent retain as his property to the exclusion of the Applicant:
(a)His Corporate Entities;
(b)His savings and bank accounts;
(c)His shares;
(d)Motor Vehicle 1;
(e)Vehicle 2;
(f)All his personal items in his possession; and
(g)His Superannuation entitlements in the SMSF.
Liabilities
9.The Respondent shall be solely liable for and indemnify the Applicant absolutely against all payments and liability whatsoever in respect to any debts, loans, credit cards or property in his name or in which he has a liability.
10.The Applicant shall be solely liable for and indemnify the Respondent absolutely against all payments and liability whatsoever in respect to any debts, loans, credit cards or property in his name or in which he has a liability.
Omnibus
11.Unless otherwise specified in these Orders and except for the purposes of enforcing any compliance with these Orders:
(a)each party be solely entitled to the exclusion of the other to all property in the possession of such party as at the date of these Orders; and
(b)monies standing to the credit of the parties in any bank account in their joint names is to be divided equally between the parties and the joint bank(s) and the parties shall do acts and things necessary to sign all documents to close such account/s; and
(c)each party hereby foregoes any claim they may have to any superannuation benefits or other employment related benefits belonging to or earned by the other; and
(d)all insurance policies to become the sole property of the owner named in the policy; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and
(f)each party is solely liable for and indemnify the other in relation to;
(g)any liability encumbering any item of property to which they are entitled pursuant to these Orders; and
(h)any and all liabilities in their sole name, including any personal credit card or taxation liability.
12.All applications be otherwise dismissed save as to costs.
Costs
13.Within 28 days the Applicant make, file and serve any written submissions with respect to costs including the calculation of any quantum.
14.Within 28 days of Order 13 herein, the Respondent make, file and serve any written submissions in response.
15.Costs shall thereafter be determined in chambers.
NOTATION:
A.Pursuant to Section 90ST of the Family Law Act 1975 (Cth) the parties intend these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE JENKINS:
This matter concerns an application for a de facto property division brought by the applicant Ms Ashcroft (“the applicant”). The respondent is Mr Rosen (“the respondent”).
The parties were in dispute about the date of separation, with the applicant asserting they separated in 2021 whilst the respondent claimed separation occurred in 2007. This was determined at a threshold hearing on 3 June 2024, at which the respondent failed to attend, and a declaration was made that final separation occurred in 2021.
The applicant sought a division of the non-superannuation pool in her favour of 70 per cent and to otherwise retain her superannuation in full. The respondent had not filed an amended response since the threshold determination but submitted that the division should be “50/50”.
In addition, the respondent had failed to comply with trial directions to file a trial affidavit and, accordingly, had no evidence before the court at the final hearing. He sought an adjournment which was refused.
BRIEF BACKGROUND
The applicant is 48 years of age, and the respondent is 55 years of age.
The parties commenced their relationship in or about 1998.
The applicant was, for the most part, a stay-at-home mother and homemaker. The respondent worked as a tradesperson and operated various companies.
The parties have four adult children, the youngest of which is 18 years of age. Three of the parties adult children reside with the applicant although they all appear to be financially independent.
At the threshold hearing it was declared the parties separated in December 2007, but resumed their relationship in August 2009, and that they separated on a final basis in September 2021.
DOCUMENTS RELIED UPON
The applicant relied upon the following documents:
·her initiating application filed 10 May 2023;
·her financial statement filed 10 May 2023;
·her genuine steps certificate filed 10 May 2023;
·the affidavit of Mr K, certified practicing valuer, annexing valuation report of B Street, Suburb C (“the Suburb C property”), filed 19 August 2024;
·her trial affidavit filed 5 September 2024; and
·her case outline filed 30 September 2024.
In addition, the applicant relied upon the following exhibits which were tendered in this matter:
·A1 – the applicant’s proposed orders as amended 3 October 2024;
·A2 – the applicant’s pay slips from her employer;
·A3 – the applicant’s snapshot of her financial resource statements;
·A4 – the applicant’s Super Fund 1 annual statement for financial year ending 30 June 2024;
·A5 – the applicant’s income tax return estimate for 2024;
·A6 – the Rosen superfund portfolio statement from L Company as at August 2024;
·A7 – the Rosen superfund bank statement for business transactions account 1 April to 30 June 2024;
·A8 – the respondent’s M Bank bank statement 19 April to 30 June 2024;
·A9 – last page of M Bank statement dated 30 June 2024 for the respondent and Ms N;
·A10 – the respondent’s bank account 1 October 2023 to 31 March 2024;
·A11 – portfolio statement for E Pty Ltd from L Company as at August 2024;
·A12 – investment home loan summary statement for account ending #...00 for 1 July 2021 to 31 December 2021;
·A13 – bank statement for account ending #...00 for 6 May – 31 May 2024 and 1 June – 30 June 2024;
·A14 – bank statement of respondent’s CommBank credit card May – June 2024;
·A15 – bank statement of smart access CommBank account 31 May to 30 June 2024;
·A16 – notice of assessment for financial year ended 30 June 2021 for the respondent;
·A17 – letter from the respondent to the applicant’s solicitor dated 9 September 2024; and
·A18 – bank statements relating to the respondent’s company’s bank account.
The respondent did not file any trial material.
THE EVIDENCE
Orders were made on 3 June 2024 for the parties to file their trial material no later than 28 days before the final hearing, with a limited reply no later than 14 days before.
The respondent was not present at court on 3 June 2024 but acknowledged that he had been sent a copy of those orders by the applicant pursuant to those orders.
The respondent’s reason for not complying with the trial directions made 3 June 2024 was that he “just didn’t get to do it.”
On the first day of this final hearing the respondent sought to adjourn the matter for 12-weeks to obtain counsel. That adjournment was refused for reasons provided at the time but in short, because the court could have no faith the respondent would obtain counsel and/or file any documents if the matter were adjourned.
The respondent was present for the compliance and readiness hearing on 9 November 2023 before Her Honour Judge Howe when the matter was listed for a threshold hearing with orders for filing of material. He did not file any material or attend that hearing but rather emailed the court seeking an adjournment. When asked at this hearing his reason for not filing material for the threshold hearing he likewise said, “I haven’t got around to doing it.”
Pursuant to Re F: Litigants in person guidelines (2001) FLC 93-072 the process was explained to the respondent including that, albeit he had no evidence before the court, that he would be permitted to cross-examine the applicant and indeed ought to put any contrary propositions to her, as well as make submissions.
The respondent was also provided with a copy of the key sections of the Family Law Act 1975 (Cth) (“the Act”) relating to de facto property division and, given he had only received the specific orders sought by the applicant three days before trial, and those orders were amended to include more specific machinery provisions on the morning of trial, the matter was stood down so the respondent could make sure he understood the orders.
When the matter was recalled, the respondent stated he did not need any more time.
The respondent was also invited to speak to the Duty Lawyer but declined to do so.
The matter ran with the applicant adopting her affidavit material and tendering various exhibits. Despite repeatedly being warned of the consequences, the respondent did not cross-examine the applicant. The applicant’s evidence was therefore completely unchallenged. In addition, it was corroborated to a large degree by documentary evidence obtained by way of subpoena.
THE LAW
The relevant legal principles governing any application for de facto property settlement are set out in Part VIIIAB of the Act. Section 90SM(1) of the Act authorises the court to make such orders between the parties as it considers appropriate. Section 90SM(3) makes it clear that the court cannot make an order for a property settlement unless it is just and equitable to do so.
There is no presumption that the parties’ entitlements in the existing asset pool should be altered, or that one party has the right to have the property of the parties divided between them.
If the court determines it is just and equitable to make an adjustment at all, earlier Full Court authorities have identified a four-step process that can assist the court in reaching a just and equitable decision: see Lee Steere & Lee Steere (1985) FLC 91-626; Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FLC 93 143; and Omacini & Omacini [2005] FamCA 195. Although these relate to marital relationships the process is equally applicable to an application to de facto property adjustment.
The first step for the court is to identify the parties' existing legal and equitable interests in the assets arising from their relationship, together with their liabilities. The court should then assess each party's contributions during the relationship in accordance with sections 90SM(4)(a), 90SM(4)(b) and 90SM(4)(c). The third step requires the court to consider the range of factors set out in sections 90SM(4)(d), 90SM4(e), 90SM4(f) and 90SM4(g), including the factors identified in s 90SF(3). The court should then consider its findings and, if the court is satisfied that it is just and equitable to do so, make orders adjusting the parties' property interests.
The Full Court in Bevan & Bevan [2013] FamCAFC 116 (“Bevan”) at [86], in the joint judgment of Bryant CJ and Thackray J, reminded trial judges that the “four step process” is not legislatively mandated. Rather, it provides a structured process towards the ultimate requirement, which is to ensure that a property settlement order is only made when the court is satisfied that it is just and equitable to do so, and that the terms of the order itself are also just and equitable.
In Stanford and Stanford [2012] HCA 52 (“Stanford”), their Honours, in the joint judgment of French CJ, Hayne, Kiefel and Bell JJ, considered the expression “just and equitable” at [36] and noted that it:
… is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
THE ASSET POOL
The applicant’s evidence was that she had been largely unaware of the parties’ finances during the relationship and that most if not all of the assets were in the respondent’s name.
Furthermore, as the respondent had failed to provide any discovery in the matter, despite repeated requests, the applicant had to do her best to construct the pool based on documents that she did have access to and by issuing multiple subpoenas. In addition, as she had no access to the respondent’s real property, the applicant had to rely on other evidence such as council rates notices and loan applications for values.
The applicant asserts pursuant to her outline of case that the asset pool is as follows:
Description Ownership Applicant’s value 1 B Street, Suburb C Respondent $1,700,000 2 1 O Street, Suburb P (Company) Respondent $660,000 3 2 O Street, Suburb P (Company) Respondent $21,000 4 3 O Street, Suburb P (Company) Respondent $1,525,000 5 Savings Respondent $31,961 6 Financial resource Applicant $1,559 7 Shares (Company) Respondent $16,620 8 Shares (Company) Respondent $40 9 Motor Vehicle 1 Respondent $28,000 10 L Company loan credit balance Respondent $164 11 Vehicle 2 Respondent $53,000 12 Household furniture and chattels Applicant $10,000 Asset subtotal $4,047,344
13 Mortgage of B Street, Suburb C (Commonwealth bank) Respondent $537,855 14 Council Rates – Suburb C Respondent $28,517 15 Water Rates – Suburb C Respondent $7,814 16 Q Pty Ltd (loan) Respondent $4,465 17 Mortgage of 1, 2 and 3 O Street, Suburb P (Commonwealth bank) Respondent $2,009,642 18 CBA Credit Card #...85 Respondent $29,548 19 CBA Smart Access #...00 arrears Respondent $5,074 Liabilities subtotal $2,622,915
Name & Type of interest Member Applicant’s value 20 Rosen super fund – SMSF (accumulation) Respondent $4,147 21 Super Fund 1 – accumulation Applicant $37,752 Superannuation subtotal $41,899 TOTAL – (assets – liabilities) $1,424,429 TOTAL – (assets – liabilities + superannuation) $1,466,328
It is not known whether the respondent takes issue with the aforementioned table as he did not cross-examine the applicant on the contents of those assets or make any submissions in that regard.
I am therefore left with the unchallenged evidence of the applicant in support of those values, which was to a large extent corroborated by the documentary evidence tendered by way of exhibits.
I also note that in some instances the values ascribed by the applicant may be lower than they would have been if the respondent had cooperated with having items valued. For example, in relation to the three properties in O Street, Suburb P, the applicant relied upon values in council rates notices which may have been conservative and/or out of date. The pool may also not represent the entirety of the asset pool because the applicant was limited to what she was able to ascertain by way of subpoena. However, this is a matter I shall return to under section 90SF(3)(r) of the Act.
I further note the applicant does not include in her asset pool a number of liabilities which she says are not attributable to the relationship and ought to be the responsibility of the respondent which include the following:
(a)Fines Victoria (D Pty Ltd) $54,826
(b)Unpaid Land tax of 1 O Street (D Pty Ltd) $35,412
(c)Unpaid Land tax of 3 O Street (D Pty Ltd) $40,015
(d)Unpaid Land tax of 2 O Street (D Pty Ltd) $12,593
(e)Water rates of 1 O Street (D Pty Ltd) $8,203
(f)Water rates of 3 O Street (D Pty Ltd) $9,486
(g)Council rates of 1 O Street (D Pty Ltd) $21,220
(h)Council rates of 2 O Street (D Pty Ltd) $34,594
(i)Council rates of 2 O Street (D Pty Ltd) $5,455
(j)Credit card (G Pty Ltd) $7,905
(k)CBA overdrawn account (D Pty Ltd) $63,366
(l)R Company (Rosen Superfund) $1,430
(m)ATO Tax Liability (Rosen Superfund) $5,311
The applicant’s evidence is that these liabilities were accumulated by the respondent post separation and that she had no knowledge of same. In this regard I note the authority of Commissioner of Taxation v Worsnop (2009) FLC 93-392.
The applicant’s unchallenged evidence is that the Fines Victoria liability relates to a vehicle owned by the respondent’s company, the D Pty Ltd and driven by the respondent. Accordingly, this is not a liability attributable to the relationship.
The land tax, water rates and council rates all concern properties owned by D Pty Ltd and within the respondents’ control. The respondent has provided no evidence as to why those liabilities have not been paid. Given the respondent had the sole benefit of the properties, including any rental, those liabilities should be his sole responsibility.
Likewise, the credit card and overdrawn accounts are also in the names of companies controlled by the respondent and according to the applicant incurred post-separation. The respondent has otherwise provided no evidence as to how they arose and why they should be attributable to the relationship. Accordingly, they should also be the sole responsibility of the respondent.
The respondent, who managed the self-managed super fund, has also not provided any explanation as to why the fund, of which he had effective control, has not paid its debt to the Australian Taxation Office or to R Company. In any event it is not in dispute that the respondent is to retain the entirety of that fund and in keeping with this, he should be responsible for its outstanding debts.
Finally, the applicant was gifted a motor vehicle by her parents in 2024. This was for her sole benefit, three years after separation and the respondent does not claim to have made any contribution to same. It shall also be excluded from the pool.
Accordingly, I find that the asset pool to be as proposed by the applicant.
CONTRUBUTIONS
Section 90SM(4) of the Act
In determining what orders are to be made pursuant to section 90SM of the Act, the leading cases predominantly concern section 90SM of the Act, which covers parties who are married; however, the principles are equally applicable to de facto relationships.
The approach of the court when assessing contributions was set out in Aleksovski & Aleksovski [1996] FamCA 111 (“Aleksovski”) at [83,437] in which it was stated the court must:
…weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.
Pursuant to the High Court case of Mallet v Mallet (1984) 156 CLR 605 there is no presumption of equality of division of property, not even in a long relationship, and in each case the contributions of each party must be assessed on their own facts.
In Aleksovski at [83,443] his Honour Kay J said:
The Judge must weigh up various areas of contribution. In a short marriage, significant weight might be given to a large capital contribution. In a long marriage, other factors often assume great significance and ought not be left almost unseen by eyes dazzled by the magnitude of recently acquired capital… What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship.
(Emphasis added)
Those observations were quoted with approval by the Full Court in Dickons & Dickons [2012] FamCAFC 154 (“Dickons”). In that case, at [21], their Honours, Bryant CJ, Faulks and Murphy JJ said that “…the requirements of the section are met by approaching the assessment of contributions holistically…”, by analysing the contributions of all types, and by reference to the particular circumstances of that particular relationship. The assessment of contributions does not require “over-zealous” attention to the ascertainment of contributions, and the process of the court as required by section 90SM of the Act “…is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise” as set out in Dickons at [25].
Initial contributions
The applicant’s evidence is that she had nominal assets at the commencement of the relationship including a car and superannuation.
She says that although the respondent had a house and a car, she has no knowledge of the equity of his total equity in those assets. As the respondent did not cross-examine the applicant, he forewent the opportunity to put any alternate proposition to her in this regard. Therefore, although he endeavoured to make submissions about what he owned at the commencement of the relationship, there was no evidence to support his assertions.
Contributions during the relationship
Section 90SM(4)(a): the financial contribution made directly or indirectly by or on behalf of a party to the acquisition, conservation, or improvement of any of the property
The applicant, to her credit, acknowledged the respondent’s “substantial” financial contributions to the property by way of his “business activities” which she accepts were “critical” to the parties acquiring the property they have today.
Section 90SM(4)(b): the contribution (other than a financial contribution) made directly or indirectly by a party to the acquisition, conservation or improvement of any of the property
The applicant’s evidence is that her role in caring for the children and as the primary home maker enabled the respondent to work the hours he did, and that in this way she made a “significant” indirect contribution to the property of the parties.
In addition, she submits that she contributed by way of the upkeep of the parties’ property.
Section 90SM(4)(c): the contribution made by a party to the welfare of the family constituted by them and any children in the de facto relationship
The applicant’s evidence is that as primary carer for the children, she made the greater contribution to the welfare of the family.
Post separation contributions
The applicant’s evidence is that the respondent has failed to pay the mortgage for a number of years, and it has therefore increased by $46,226.01. She says this is a negative contribution to the pool. However, given the applicant lived in that property and had the benefit of it, it would be reasonable to expect that the applicant would contribute to paying this mortgage in some capacity. The parties agreed at the conclusion of the trial to interim orders that the mortgage be paid out from the sale proceeds of the Suburb C property. This is akin to the parties sharing equally in the mortgage increase which seems appropriate in all of the circumstances.
Accordingly, I do not propose to otherwise factor this issue into my determination.
ANALYSIS
The applicant’s case is that the parties both contributed to the best of their abilities and that their contributions should be seen as equal. Although the respondent sought to emphasise his “sweat” contributions to the parties asset pool, in terms of his physical labour, he ultimately seemed to accept this (as he proposed an equal division with no adjustment for future needs).
Accordingly, I find that in assessing the myriad of contributions in this long relationship that the parties contributions were equal.
SECTION 90SF(3) OF THE ACT – “FUTURE NEEDS”
The applicant is 48 years of age, and her unchallenged evidence is that she is in poor health, due to arthritis and disc issues in her back.
The respondent is 55 years of age, and the applicant says that he is in good health.
The applicant possesses no formal trades or qualifications having dedicated her time to the family and children. The applicant is employed on a part-time basis earning a net amount of $492.65 per week. The applicant is limited to part-time employment of 15-20 hours per week because of her health issues and has no assets of significant value registered in her name.
The respondent is a tradesperson. He is the sole director and shareholder of D Pty Ltd that owns the Suburb P properties. In 2019, those properties were receiving rental income of in excess of $300,000. Although the applicant’s evidence is that the properties owned by D Pty Ltd are in default on their mortgages and may be subject to a mortgagee sale, the respondent has provided no evidence as to why this situation has occurred and why it could not be avoided. In addition, the respondent has failed to provide any evidence of his current income and has not filed a tax return since 2021, the year of separation. However, the evidence is that prior to that in 2020 he earned $71,949, in 2019, $81,825 and in 2018, $82,988.
There are no children under 18 years of age and the adult children who reside with the applicant are all in some form of employment.
DETERMINATION
I find that the respondent has a significantly higher earning capacity than the applicant and that he has the ability to manage that income in a tax efficient way due to being self-employed. As the respondent may continue to work for another ten years this would constitute a significant benefit to the respondent. As was noted by the Full Court in Clauson & Clauson (1995) FLC 92-595 (“Clauson & Clauson”) at [81,911]:
It has long been recognized that in most cases the most valuable ''asset'' which a party can take out of the marriage is a substantial, reliable, income-earning capacity: see Best and Best (1993)…
(Citation omitted)
Furthermore, due to the respondent’s failure to file any evidence or to provide any financial disclosure this case falls squarely into the kinds of cases anticipated by the full court in the matter of Weir & Weir [1992] FamCA 69. In that case the Full Court stated:
It seems to us that once it has been established that there has been a deliberate non‑disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
(Emphasis added)
The respondent acknowledged that he had failed to provide any disclosure and freely told the court this was because he was fronted at being accused of family violence. This belligerent attitude of the respondent put the applicant, who had little to no knowledge of the parties’ financial situation, to significant time, effort, and cost in endeavouring to piece together the evidence in this case. Furthermore, she is left with the uncertainty of whether there are other assets she is yet to discover and whether the values she has ascribed to the known assets are indeed accurate. In such circumstances it is more than appropriate that the court not be unduly cautious in making findings in favour of the applicant in this case.
Taking into account all of the aforementioned matters, a 20 percent adjustment to the applicant for her future needs would appear to be appropriate.
I also see no reason why that percentage ought not be applied to both the superannuation and non-superannuation pools. The parties agree they made equal contributions during the relationship, and I presume from this, because the applicant’s superannuation is higher, that the respondent was otherwise applying his income to the benefit of the family. The applicant is also likely to still have higher future needs in retirement, given the respondent’s greater earning capacity and therefore capacity to accumulate financial resources.
However pursuant to the authority of Clauson & Clauson, I must consider the real effect of such a division in dollar terms.
On the applicant’s asset pool, with a total net pool of $1,466,328, a 70 per cent adjustment to the applicant would mean she would receive $1,026,429.60 of the pool, if the Suburb C property sells for $1,700,000. This would result in an $439,898.40 differential between the parties. Given the orders are proposed in percentage terms and the liabilities are coming off the top of the sale, there should not be a substantial deviation in this differential.
In all of the circumstances, in particular the respondent’s likely earning capacity, I find that this is a just and equitable outcome.
Finally, as the respondent did not take issue with the applicant’s form of orders, I shall otherwise make orders in those terms, noting that for completion I find the form of orders to also be just and equitable for the parties.
For all of the aforementioned reasons I make the orders set out at the commencement of this judgment.
I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Jenkins. Associate:
Dated: 17 October 2024
ANNEXURE A
Description Ownership Applicant’s value 1 B Street, Suburb C Respondent $1,700,000 2 1 O Street, Suburb P (Company) Respondent $660,000 3 2 O Street, Suburb P (Company) Respondent $21,000 4 3 O Street, Suburb P (Company) Respondent $1,525,000 5 Savings Respondent $31,961 6 Financial resource Applicant $1,559 7 Shares (Company) Respondent $16,620 8 Shares (Company) Respondent $40 9 Motor Vehicle 1 Respondent $28,000 10 L Company loan credit balance Respondent $164 11 Vehicle 2 Respondent $53,000 12 Household furniture and chattels Applicant $10,000 Asset subtotal $4,047,344
13 Mortgage of B Street, Suburb C (Commonwealth bank) Respondent $537,855 14 Council Rates – Suburb C Respondent $28,517 15 Water Rates – Suburb C Respondent $7,814 16 Q Pty Ltd (loan) Respondent $4,465 17 Mortgage of 1, 2 and 3 O Street, Suburb P (Commonwealth bank) Respondent $2,009,642 18 CBA Credit Card #...85 Respondent $29,548 19 CBA Smart Access #...00 arrears Respondent $5,074 Liabilities subtotal $2,622,915
Name & Type of interest Member Applicant’s value 20 Rosen super fund – SMSF (accumulation) Respondent $4,147 21 Super Fund 1 – accumulation Applicant $37,752 Superannuation subtotal $41,899 TOTAL – (assets – liabilities) $1,424,429 TOTAL – (assets – liabilities + superannuation) $1,466,328
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