AUSTIN & HONG

FAMILY COURT OF AUSTRALIA

AUSTIN & HONG

[2015] FamCA 1119

FAMILY LAW – PROPERTY – modest pool of assets and relatively short marriage – long period between final separation and property trial – where the husband has borrowed money from his family post-separation – debt secured over husband’s house property – where the wife will have sole care of the parties’ child – where the husband has mental health issues – where the husband is in receipt of a disability support pension – just and equitable.

Family Law Act 1975 (Cth)
Marriage Act 1961 (Cth)
Property Law Act 1974 (Qld)

Commissioner of Taxation v Worsnop (2009) FLC 93-392
Biltoft and Biltoft (1995) FLC 92-614
Petersens and Petersens (1981) FLC 91-095
Prince and Prince (1984) FLC 91-501
Mains v Redden (2011) FLC 93-478
Stanford & Stanford (2012) 247 CLR 108
Zalewski v Zalewski (2005) FLC 93-241.

APPLICANT:

Mr Austin

RESPONDENT:

Ms Hong

FILE NUMBER:

BRC

484

2008

DATE DELIVERED:

11 December 2015

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Kent J

HEARING DATE:

14 March 2013, 4 August 2015 and 11 September 2015

REPRESENTATION

FOR THE APPLICANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr Carter

SOLICITOR FOR THE RESPONDENT:

Legal Aid, Queensland

Orders

it is ordered that:

The Husband pay to the Wife the sum of $20,000 within ninety (90) days of the date of these Orders, the Wife contemporaneously shall upon receipt of $20,000 do all acts and things necessary to release the caveat on the real property at B Street, Suburb A, Queensland, more particularly described as Title Reference – …, Lot …, …, County of C, Parish of D.
That if the said sum in paragraph 1 hereof is not paid in full within the period specified, the Husband is to pay the Wife interest on the said sum or so much of it as remains outstanding calculated from the due date on so much as is from time to time outstanding, in accordance with s 117B of the Family Law Act 1975 (Cth).
In the event that the Husband fails, omits, or neglects to comply with paragraph 1 of these Orders, that pursuant to s 80(1)(e) and/or s 80(1)(k) of the Family Law Act 1975 (Cth), that a trustee be appointed for the sale of the property situated at B Street, Suburb A, Queensland more particularly described as Title Reference – …, Lot …, …, County of C, Parish of D, that the said property vest in the trustee for the purposes of sale.
The Wife provide to the Husband within seven (7) days a list of three (3) solicitors to act as trustee for the sale of the property, the Husband within seven (7) days to provide notice by registered mail to the Wife of the solicitor selected as trustee, in the event the Husband does not provide such notice, the Wife shall appoint a solicitor as trustee from the panel.
If the Husband shall refuse or neglect to sign any document or do any such thing as may be reasonably required to give effect to these Orders within fourteen (14) days of the service of the demand upon him to execute such document or do such thing, the Registrar of the Family Court of Australia, Brisbane Registry is appointed to sign such document and to do all acts and things necessary to give validity and operation to the documents.
Upon completion of the sale the proceeds of sale to be applied as follows:
(a) The net balance of the proceeds of sale be paid into the trust account of the trustee, to be held in the joint names of the parties, the trustee then to pay:
(i)Firstly to pay all costs, commissions and expenses of the sale and
pay any rates and water levies outstanding on the property;
(ii)Discharge of the registered mortgage affecting the real property;
(iii)The Wife is to be paid $20,000 plus all interest accrued until the
settlement date; and
(iv)The balance to the Husband.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Austin & Hong has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 484 of 2008

Mr Austin

Applicant

And

Ms Hong

Respondent

REASONS FOR JUDGMENT

Mr Austin (“the husband”) is aged 46 years having been born in 1969.
Ms Hong (“the wife”) is aged 43 years having been born in 1972.
The parties’ relatively short relationship, in terms of the period of cohabitation and marriage, subsisted only for about seven years and ended in late 2006/early 2007.
The parties first met when the wife came to Australia from Country E, her country of origin, on a working holiday visa in December 1998. The wife was then looking for shared accommodation and answered an advertisement placed by the husband for a boarder in the home the husband already owned at B Street, Suburb A (the “Suburb A property”), a property he still owns.
I interpolate here that at the outset; the husband’s home was occupied by three boarders (other than the wife) who were paying rental to the husband. That home provided the place of cohabitation of the parties throughout the relationship and there were other boarders paying rental for their occupation up until about 2002.
Initially the parties’ relationship was thus that of landlord/tenant. Whilst the wife refers to undertaking cleaning work and assisting with rental collections from the outset, it is not suggested that, at least at the initial stages, this is to be taken to be some relevant contribution outside of any commercial arrangement.
The wife contends that the parties’ intimate personal relationship commenced in about mid-1999. The husband has contended that such a characterisation of their relationship commenced in February 2002 when he says the parties travelled together to Country E for a holiday.[1]
[1] See, for example, the husband’s submissions filed on 22 March 2013 at paragraph 4.
Whilst the difference in dates is not of any particular significance, the wife advances evidence, which I accept, that the parties underwent a ceremony of marriage in Country E in 2000 and their marriage was registered in Country E on 2 February 2000. The wife acknowledges that the husband met their flight expenses of $2,500 to facilitate this travel. It would thus seem that an intimate relationship between the parties probably had formed, as the wife says, in about mid-1999.
The husband acted as the wife’s sponsor for immigration purposes. Subsequent to their marriage, the parties returned to Australia with the intention of living here permanently with the wife having obtained a spouse visa with the husband’s sponsorship. The wife subsequently attained Australian citizenship.
In 2005 the only child of the relationship, F, was born.
The wife contends that final separation occurred on 7 March 2007.[2] The husband has contended that the parties finally separated on 19 November 2006. He seeks to corroborate that date by documented protection order proceedings recording events of that date, and statements of the wife to the police recorded in those documents recording that the wife then had the intention to separate from the husband and indeed to return to Country E.
[2] Wife’s affidavit filed on 5 October 2012 at paragraph 14.
It would seem that there was some kind of an attempt at reconciliation

post-19 November 2006 but it is equally clear that the relationship was in serious difficulties. Again, even if it be accepted that final separation occurred on 7 March 2007, it can be seen that the relationship subsisted for only about seven years and ended in early 2007.

Proceedings and orders

Obviously enough, the child of the relationship was little over 12 months of age when the parties finally separated.
On 18 January 2008 the husband filed an Initiating Application in the then Federal Magistrates Court seeking parenting orders with respect to the child.
On 18 February 2008 the wife filed her Response to the husband’s Initiating Application. By her Response the wife not only sought orders in relation to parenting but she also sought orders for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The proceedings progressed through a number of interim stages and hearings in the Federal Magistrates Court before reaching a trial before Federal Magistrate Demack (as her Honour then was). That trial was heard over a number of instalments. It was heard initially on 27, 28 and 29 January 2010. The trial resumed and was heard on 5, 6, 30 and 31 August 2010 and 1 September 2010. The last submission following that trial was made on 9 September 2010.[3]
[3] Reasons for Judgment of Demack FM delivered on 18 November 2011.
Demack FM made final parenting orders and delivered Reasons for Judgment on 18 November 2011. Those Reasons are read before me and are referred to in submissions.
Taken from the evidence of both parties, cross-referenced to those Reasons for Judgment, whilst Demack FM may have embarked on the trial of both the parenting and property applications, in the end result her Honour determined only the parenting proceedings and not the property applications. At [11] of the Reasons for Judgment delivered on 18 November 2011 Demack FM records, under the heading “The property proceedings”:
11.The priority for this trial was attending to the parenting matter, to that end the evidence was not concluded with respect to property proceedings. The property trial was adjourned to a date to be fixed. It is clear from the father’s written submissions that he has a view with respect to my continuing in the matter. It also seems to me that taking into account the father’s mental health and how that manifests in his representation of his own case that, notwithstanding the limited pool, the litigation is complex, and I will be transferring the property proceedings to the Family Court of Australia.
The wife, by way of her Response to Initiating Application filed on 18 February 2008 sought final property orders for the former matrimonial home owned by the husband to be sold and for the whole of the matrimonial property, inclusive of superannuation, to be apportioned as to 70 per cent to the wife and 30 per cent to the husband.
By way of her Amended Response to Initiating Application filed on 9 August 2012, the wife sought orders that the husband and wife each retain the property in their respective possession, and that the husband pay to the wife the sum of $100,000. The wife seeks orders for the former matrimonial home to be sold to effect such payment, if necessary.
As the husband’s Initiating Application dealt only with parenting matters, by his Reply filed in the Federal Magistrates Court on 24 June 2008, he sought orders in relation to property. Specifically, the husband sought orders that, “if the Family Court of Australia is to have jurisdiction in respect of these proceedings”, the net equity of the property pool be split 90/10 in the husband’s favour. The husband has, since then, filed limited material setting out the final property orders which he seeks. While he set out in written submissions filed on 12 March 2013 the alleged economic loss which he says he has suffered as a result of the parenting proceedings, these submissions do not provide any orders sought in respect of the property pool, as identified in the course of the trial.
At paragraph 37 of his written submissions received by the Court on 22 March 2013, the husband states that he “… accepts to pay $20,000 after 6 months due to his parents having some monies paid to them, in monthly installments [sic] of $3,333.33 for a period of 6 months.”
Following the transfer of the property proceedings to this Court a series of case management directions were made. Most notably, on 24 July 2012 directions were made by Registrar Stoneham with respect to the trial of the property proceedings. On 30 October 2012, Registrar Stoneham made further directions pursuant to which the wife was given leave to rely upon an affidavit of Mr G (valuer) filed on 4 August 2010 with respect to the value of the husband’s real property at B Street, Suburb A. Further, both parties were to file and serve trial material by 9 November 2012 with respect to the property proceedings.
On 12 November 2012 the trial was set down to commence on 14 March 2013.
In the event, the matter came before me on 14 February 2013. On that occasion the husband sought, and was granted, orders for provision to him of a copy of all audio recordings of proceedings in the Federal Magistrates Court. Moreover, on that occasion in circumstances where the husband had apparently not complied with trial directions for the filing of material, it was explained to the husband that the property proceedings may proceed to be heard and determined on an undefended basis, and what that meant.
On 14 March 2013 the wife applied to have the hearing and determination of the property orders sought in her Amended Response filed on 9 August 2012 proceed on an undefended basis. That application was essentially predicated upon the husband’s non-compliance with previous trial directions that had been made as earlier referred to.
On 12 March 2013, only two days before the trial, the husband had filed and served an affidavit by himself which also annexed voluminous material. Within those annexures were a number of affidavits sworn or affirmed by other deponents.
At the hearing on 14 March 2013 the husband, who represented himself in these proceedings and in the previous parenting proceedings since early 2010, acknowledged that he would consent to an order in favour of the wife for costs if the matter was adjourned for the short period foreshadowed by the Court to enable the wife to deal with his late-filed material.[4] The wife had the advantage of legal representation funded by Legal Aid, Queensland (“Legal Aid”).
[4] Transcript of Proceedings of 14 March 2013 at page 14, line 35.
In the event that the Court did not accede to the wife’s primary application to proceed on an undefended basis; the wife sought to proceed in any event rather than having the matter adjourned, even with a costs order in her favour.
More will be discussed below about the husband’s mental health issues but suffice to note here that those issues are significant. That and the fact that the husband was self-represented; the fact that he was prepared to consent to an order for costs in the wife’s favour if a short adjournment were granted; and, fundamentally, that it is a serious step to deprive a party of the opportunity to defend an application, militated against proceeding on an undefended basis, and the Court refused the wife’s application in that respect.
It is relevant to note in passing that both parties had obviously embarked on the previous trial process before Demack FM expecting both parenting and financial issues to be resolved at that trial. Unfortunately, that could not be achieved but it is to be noted that it would seem the husband had proceeded on the basis that financial issues would be determined in the trial in the Federal Magistrates Court.
On 14 March 2013, the wife’s counsel did not require any of the husband’s witnesses for cross-examination, other than the husband himself. It would seem that the affidavits the husband sought to rely upon of each of Mr H; Ms I; Ms J; Ms K and Ms L were directed primarily to parenting issues and the husband’s capacity historically in relation to parenting save and except that in some cases, and to some limited extent, they addressed issues potentially relevant to the credit or credibility of the wife.
The exception to this is the affidavit of the husband’s own mother Ms M Austin, which evidence was primarily directed to loans Ms M Austin had made historically and her mortgage loan over the husband’s real property, an issue which will be further discussed. Her evidence included a detailed calculation of loans she had made and interest.
Ms M Austin was not required for cross-examination by counsel for the wife. Indeed, the husband was the only witness cross-examined by counsel for the wife. The husband also undertook cross-examination of the wife she being the only witness in her case, other than the expert valuer.
I interpolate here that it was difficult throughout attempting to have the husband focus upon property/financial issues. He was fixated upon the parenting proceedings and apparently consumed by thoughts or feelings to the effect that he had, in those proceedings, been victimised by each of, at least, the wife; Dr N, the single expert in those proceedings; and Demack FM.
The parties were afforded the opportunity to provide written submissions at the conclusion of the hearing. The wife’s submissions were provided on 18 March 2013 and those of the husband on 22 March 2013. My own delay thereafter reached the point that it was necessary, before delivering a Judgment, to afford to each party the opportunity to apply to re-open the evidence, if necessary. On 4 August 2015 orders were made for, inter alia, either party seeking to re-open the evidence to file such an application by 25 August 2015.
In the event, at a further hearing on 11 September 2015 at which the husband attended (he did not attend the August 2015 listed date) it was confirmed by both parties that neither sought to re-open the evidence. At that hearing it was confirmed, inter alia, that the husband continued to rely upon a disability support pension by reason of his mental health issues; and that the wife continued in her Government employment. It was also confirmed that as the husband had not undertaken the steps or preconditions set out in Demack FM’s parenting orders, he had not been spending time or communicating with the child of the marriage.

Husband’s mental health issues

In these property settlement proceedings the husband’s mental health issues are relevant mainly to:
a)As earlier discussed, the wife’s application to have her applications for property settlement determined on an undefended basis and the Court’s refusal to so proceed;
b)
The assessment of each party’s contributions, particularly in the

post-separation period;
c)The s 75(2) factors and the prospects of the husband deriving income from employment/self-employment, an issue agitated on behalf of the wife.
It is obvious that throughout the parenting proceedings and particularly also following the Reasons for Judgment delivered by Demack FM, the husband has been utterly unaccepting of the opinions of Dr N, psychiatrist, who examined the husband and provided evidence in the parenting proceedings; and the findings of Demack FM.
However, there was no appeal from the final orders of Demack FM and her Reasons for Judgment are read and relied upon before me. Demack FM recorded a number of findings about the husband’s mental health issues which provide a useful starting point in discussing this topic.
At [4] and [5] of her Reasons for Judgment Demack FM noted:
4.In this very difficult parenting matter, the father’s mental health has been a central feature: both in terms of matters of substance and matters to do with the orderly progress of the litigation.
5.The psychiatric opinion provided to the Court is that the father’s presentation appears to have worsened as the litigation has continued. The father has a personality disorder, with significant narcissistic traits. Further his delusional beliefs are now considered to be psychotic in nature. The nature of the father’s condition is such that it is to be expected that the father would not have insight into his condition or presentation.
As is recorded in [6] of the Reasons immediately following the above, the husband maintained denials of him experiencing the psychiatric symptoms or conditions diagnosed by Dr N.
At [58] to [68] of those Reasons for Judgment Demack FM again addresses her findings in relation to the husband’s mental health issues. That discussion, by reference to the opinions of Dr N which Demack FM accepted, confirms findings then that the husband was found to have a personality disorder with significant narcissistic traits; had a paranoid disorder and a paranoid personality; was demonstrating grandiosity; and that his delusional beliefs were psychotic beliefs.

A reading of those Reasons for Judgment as a whole leads to the conclusion that Demack FM determined that the husband required intensive therapy with respect to his mental health and this aspect was at the forefront of the outcome concerning the parenting orders Demack FM made. In summary, Demack FM ordered that the husband commence a course of psychiatric therapy as a precondition to the husband commencing to spend supervised time with the child. As earlier noted, that did not occur.
The husband confirmed before me on 11 September 2015 that he has not undertaken the psychiatric therapy as envisaged by the orders of Demack FM and that, in summary, the parenting proceedings of themselves; and their outcome; have caused him significant mental health issues, which he identified as depression.
Whilst I do not profess to have any medical qualifications, it was obvious from the husband’s presentation on 14 March 2013 that he was not a well person. He was accompanied to Court on that occasion and assisted by his paid carer whom he wished to have participate on his behalf as his McKenzie Friend, as occurred.[5] As already noted, the husband was in receipt of a disability support pension by reason of his mental health issues.
[5] Transcript of Proceedings of 14 March 2013 at page 2.
Attached to his affidavit material earlier referred to were a number of medical reports and medical documents, although none were particularly current. Annexure “G” to his affidavit comprises these documents:
a)A document under the hand of Mr O a psychologist which is entitled “Psychological Progress Report” and which is addressed to the husband’s then treating general medical practitioner Dr P and is dated 22 September 2011;
b)A Centrelink form or record entitled “Medical Report – Disability Support Pension” dated 4 October 2011;
c)A further letter from Mr O to the general medical practitioner dated 2 March 2012;
d)A letter from Ms Q, a clinical psychologist, to Dr P dated 13 July 2012.
It was submitted on behalf of the wife that where the Court has not had the benefit of cross-examination of medical experts, the Court “can draw only what appear to be the safest inferences” from those reports. The decision of Coleman J in Mains v Redden (2011) FLC 93-478 is cited in support of that submission which can be accepted.
However, objection was not taken to the Court receiving this material nor was there any application made on behalf of the wife that these witnesses or any of them be made available for cross-examination. That was understandable in the circumstances in which the wife sought to finalise the hearing of these proceedings; and the subject material was filed late and proximate to the hearing; but it must be recognised that the material was received in evidence without objection in the circumstances referred to.
Review of the material referred to, in general, confirms that the husband has been diagnosed with chronic depression and chronic symptoms of anxiety; it is plain from the Reasons of Demack FM that one obvious difficulty in terms of the husband obtaining successful treatment is his non-recognition of the specific conditions for which he requires treatment.
Associated with that is the dynamic that the husband has particular views as to the causation of his condition or any mental health issues which he suffers which in itself may, on the evidence referred to, be a product or dynamic of the condition itself. In short, the husband identifies what occurred in relation to many aspects of the parenting proceedings as causative of his depression.
The essential challenge made on behalf of the wife with respect to the husband’s mental health issues was that the husband himself may be effectively prolonging his disability by his failure to seek treatment. There was an associated contention to the effect that the husband may well be capable of addressing his mental health issues and thus be able to return to meaningful employment rather than remaining, in the long-term, on the disability support pension.
On the evidence before me, the husband suffers from mental health issues including depression, anxiety and has also been diagnosed with having symptoms of Post-Traumatic Stress Disorder. The husband attributes these issues to the stress of the parenting proceedings and due to the breakdown of his relationship. During these proceedings it was necessary to reiterate to the husband that these proceedings were purely in relation to financial matters as the parenting proceedings had been finalised. Much of the husband’s filed material has also been irrelevant to these property proceedings, as the material was directed to parenting issues or the parenting proceedings historically.
As already noted, it is now clear that for a long time now the husband has been in receipt of the disability support pension and as at the hearing in September 2015 the husband confirmed that he remained on that pension. His mental health issues have obviously now been of longstanding and in circumstances where the husband continues to receive the disability support pension on the basis of his mental health issues, it would seem more likely than not, and I find, that the husband will probably not resume meaningful employment or self-employment, in the foreseeable future.

The Court’s jurisdiction to hear these proceedings

Whilst it seemed that the husband did not ultimately persist in the challenge he had initially made to jurisdiction, I will deal with that issue in order to remove any doubt about the Court’s jurisdiction. The husband challenged the jurisdiction of this Court to hear the matter at a preliminary stage. He contended that the parties were not parties to a marriage recognised under the Marriage Act 1961 (Cth) (the “Marriage Act”). Accordingly, he contended that the Act does not apply and that, instead, Division 19 of the Property Law Act 1974 (Qld) applied to these proceedings.
Section 88F of the Marriage Act provides that, notwithstanding any other law, the question whether a marriage solemnised in a foreign country is to be recognised in Australia as valid shall be determined in accordance with the provisions of Part VA of the Marriage Act. Section 88D(1) provides that subject to the remainder of s 88D (which does not apply), a marriage to which Part VA applies shall be recognised in Australia as valid. Section 88C(1) provides relevantly that Part VA applies to “every marriage solemnised, whether before or after the commencement of this Part, in a foreign country where…under the local law, the marriage was, at the time when it was solemnised, recognised as valid”. Accordingly, a marriage solemnised in a foreign country, and recognised as valid under the law of that foreign country, will be recognised as valid in Australia.
Section 88G(1) of the Marriage Act provides:
(1)      A document purporting to be either the original or a certified      copy of a certificate, entry or record of a marriage alleged to have been solemnised in, or under the law of, a foreign country and          purporting to have been issued by:
(a)in the case of a marriage alleged to have been solemnised in a foreign country--an authority of that country or of that part of the country in which the marriage was allegedly solemnised; or
(b)      in the case of a marriage alleged to have been solemnised                    under the law of a foreign country--an authority of that   country;
is, for all purposes, prima facie evidence of the facts stated in               the document and of the validity of the marriage to which the   document relates.
The wife adduced into evidence copies of the original and translated extract from the family register in Country E, which documents were issued by the R District Civil Office in Country E on 6 April 2000.[6] This document records the wife’s “marriage to [Mr Austin] (nationality: Australian)”. Accordingly, pursuant to s 88G(1), there is prima facie evidence that the marriage between the wife and the husband was valid. The husband has not adduced any cogent evidence capable of rebutting that prima facie evidence.
[6] Exhibit “EH1” to the wife’s affidavit filed on 5 October 2012.
I find that the husband and the wife entered into a valid marriage. I further find that, pursuant to Part VA of the Marriage Act, that marriage is to be recognised as valid in Australia. Accordingly, the Act applies in the present matter and this Court has jurisdiction to determine property adjustment orders.

Parameters of dispute

As appears from her Amended Response earlier referred to the wife seeks an order that the husband pay her the sum of $100,000 within 45 days of orders by way of property settlement and, inter alia, in default of that payment being made that the husband’s property at B Street, Suburb A be sold to facilitate that payment.
The wife also sought an order for costs in her favour, but I do not intend to entertain any application for costs until both parties have had the opportunity to consider these Reasons, and frame any application for costs or defence to such an application by reference to them.
At the outset of the trial, the husband contended that he had already made an agreement in relation to property settlement whereby he “conditionally accepted” that he would pay the wife $20,000 to finalise property settlement.[7]
[7] Transcript of Proceedings of 14 March 2013 at page 3, line 30 to page 4, line 30.
The conditions relating to the husband’s purported acceptance was that he be permitted to ask 10 questions of the wife that she would respond to an affidavit “under the penalty of perjury”.
The wife did not accept that condition and it was explained to the husband by the Court that his “conditional acceptance” in fact amounted to a counter-offer which had been rejected by the wife.
Nevertheless, the husband confirmed at trial that the order he sought was that as and by way of property settlement he would pay the wife $20,000 but by instalments commencing six months hence. That is, that because he would be borrowing the money from his parents, that he have six months to commence making payments and that the payments be made over a six month period thereafter.[8] As earlier noted this position of the husband was reiterated in his written submissions as earlier referred to.
[8] Transcript of Proceedings of 14 March 2013 at pages 3 and 4.
Whilst on the face of it the parameters of the dispute thus seemed to have become relatively confined in monetary terms, underlying the parties’ respective positions are significant differences as to the available property interests that ought be considered or determined by the Court; issues of contribution; and as already noted the relevant s 75(2) factors. As will also be discussed the wife contended for an “asset-by-asset” approach to the determination of property orders given the fact that the parties finally separated, on her case, in March 2007.

Background

Throughout the course of the parties’ relationship, a modest property pool was acquired. At the commencement of the marriage, the husband owned the former matrimonial home at B Street, Suburb A in the State of Queensland which he had purchased in 1993, some six years prior to the parties’ marriage. In the wife’s affidavit filed on 5 October 2012, she deposes that at the time of the marriage, the property was valued at approximately $205,000, and was encumbered by a mortgage in favour of the National Australia Bank (“NAB”). The balance owing to the NAB under the loan, she says, was “over $100,000”. The title and loan in relation to the husband’s property have always remained in the husband’s name. The husband also had a small amount of superannuation, a rather old motor vehicle, and furnishings in the home which were of nominal value.
There was no expert evidence corroborating the wife’s assertion as to the value of the property; nor was there any other evidence as to the mortgage balance. However, the husband did not appear to challenge the figures suggested by the wife.
The wife brought limited assets to the marriage apart from minimal savings from Country E. As a requirement of the wife’s spousal visa, she had to provide evidence that she was able to support herself financially while in Australia. As this was not within the husband’s financial means to do so, the wife made arrangements to have access to a loan of $20,000 from her family if required.
During the course of the marriage, the parties replaced furniture in the Suburb A property and purchased various motor vehicles and office equipment for the company which they were to establish in 2002. I accept Ms M Austin’s evidence as to the significant financial support she provided to the husband which is essentially to be treated as the husband’s contribution.
As the wife sets out in her affidavit of 5 October 2012, the wife assisted with the running of the boarding house from 1999 until the husband and wife ceased to have boarders in the house in 2002. In approximately late 2000/early 2001, the wife worked as a receptionist in a computer shop for a short period of two months, earning approximately $350 per fortnight.
At the start of the relationship, the husband was, in addition to running the boarding house, working at the business S Pty Ltd.
In 2002, the husband and wife started the business, T Pty Ltd with $10,000 of the husband’s savings. The husband managed the business. When the business was starting up, it was run out of the Suburb A property. Eventually, three offices were set up, one in Brisbane, BB Town and CC Town. The Brisbane office, situated at Suburb U, was set up in 2004.
As deposed by the wife in her affidavit filed on 5 October 2012, she began working at the business in September 2002. The wife managed the accounts, did the bookkeeping, and tended to various other administrative tasks on a

full-time basis. After approximately three months, the husband started remunerating her for her work. Then, after approximately one and a half years, the amount which the husband was paying her decreased. The wife was also only paid superannuation for one year. These features were reflective of the poor trading performance of the business, as will be further discussed.
At the time the only child of the marriage was born in 2005, the wife took some six months off work. However, in her affidavit filed on 5 October 2012, she notes that she still worked from home during this time, undertaking administrative tasks. After the six months, the wife returned to work for four days a week.
In late 2006, as the business was not performing well, the husband commenced working for the St George Bank. He was soon laid-off from this employment, owing to the stress of the relationship breakdown, amongst other things.
The parties temporarily separated in November 2006 and finally separated on 7 March 2007. Initially, as deposed by the wife in her affidavit filed on 5 October 2012, the wife went to a women’s refuge and the husband remained living in the Suburb A property. The wife commenced receiving social security payments shortly thereafter. The wife and the child lived in rental accommodation and were paying $405 per week in rent.
As already noted, the husband commenced parenting proceedings in the Federal Magistrates Court in respect of parenting matters on 18 January 2008.
On 7 February 2008, the husband entered into a loan agreement with his mother, Ms M Austin, and under the terms of that agreement the husband was to repay $193,000 to Ms M Austin together with interest. The Loan Agreement is marked as Annexure “EH4” to the wife’s affidavit filed on 5 October 2012. It is also annexed to Ms M Austin’s affidavit.
On 28 February 2008 the husband provided a mortgage over the Suburb A property in favour of Ms M Austin as the mortgagee. On 3 December 2008, the wife lodged a caveat over the property.
By reference to the wife’s affidavit filed on 5 October 2012, the first of two conciliation conferences was held on 23 October 2008 at which no agreement was reached between the husband and the wife in respect of the property proceedings. The second conciliation conference was held on 12 June 2009 but the husband did not attend the conference.
By reference to her affidavit filed on 5 October 2012; on 26 October 2011 the wife entered into a contract for the purchase of a house and land. For this, she paid a deposit of $2,500 and has since made further payments towards the mortgage amount of $265,995. The wife and child live in this property. The wife is employed full-time by the Queensland Government.
The husband continues to live in the Suburb A property and receives a disability support pension from Centrelink in the amount of $222 per week at trial.
Subsequent to separation and in about 2009, the wife commenced full-time employment as an administrative officer in the public service.

Identification and valuation of existing property interests

B Street, Suburb A

In his Financial Statement filed on 24 June 2008, the husband lists the value of the Suburb A property as being $350,000. Later, in the husband’s Financial Statement dated “ /3/2013”, marked as Annexure “BC” of his affidavit filed on 12 March 2013, the husband lists the value of the property as being $340,000. There is no expert evidence before me to support either of these values.
As appears from the affidavit of Mr G, valuer, he first undertook a valuation of this property on 12 September 2008 pursuant to an order made by Federal Magistrate Cassidy (as her Honour then was) on 24 July 2008.
However, on 30 July 2010 Legal Aid on behalf of the wife requested that Mr G undertake an updated valuation for the purpose of the trial in the Federal Magistrates Court in August 2010. The request by Legal Aid addressed to Mr G was copied to the husband who was then acting for himself.
On 24 July 2012 Registrar Stoneham had made trial directions requiring that the parties further engage Mr G to provide an updated assessment of the value of the Suburb A property.
In Registrar Stoneham’s orders dated 30 October 2012 there is a Notation as follows:
…
B.The representative for the wife informed the court that an updated valuation of the property situated at Suburb A had been unable to be obtained in accord with the Trial Directions made 24 July 2012 as the husband, who is in possession of the property, did not respond to requests for inspections.
Thus it was that on 30 October 2012 Registrar Stoneham made an order granting leave to the wife to rely upon the affidavit of Mr G dated 4 August 2010 to which is attached the valuation undertaken by Mr G.
Mr G’s affidavit was filed in the Federal Magistrates Court proceedings on 4 August 2010 and as earlier noted leave was given to the wife to rely upon that affidavit for the purpose of these proceedings.
Mr G expresses the opinion in his updated report for a valuation date of 2 August 2010 that the subject property has a value of $375,000, and it is that report and valuation which the wife relies upon for a finding that this property is to be taken at that value.
The husband contended for a valuation figure of $340,000 for this property but that contention was only supported by the husband making reference to some other, perhaps earlier, valuation and was not otherwise supported by any admissible evidence.
I accept then that the admissible, and unchallenged, expert evidence before the Court relevant to the determination of the value of the Suburb A property is the opinion of Mr G that it has a value of $375,000. That value is accepted.

Household contents

The wife acknowledged her household contents to have a value of $5,000.
The written submissions on behalf of the wife prepared for trial adopted a value of household contents of the husband at $10,000, presumably by reference to an earlier Financial Statement. In his Financial Statement filed as part of the material filed on 12 March 2013 the husband deposes to his household contents having a value of $5,000.

As there was no valuation evidence obtained and the husband was not challenged as to his figure for this item in cross-examination, it seems to me that the Court ought accept that the household contents of each party is to be taken in at a value of $5,000 for each.
Also taken from his Financial Statement attached as part of his affidavit filed on 12 March 2013, and his evidence otherwise, the husband does not have or own any motor vehicle and he does not have any relevant bank deposits. These were items which were incomplete in the wife’s written submissions for trial, obviously because these were unknowns at the time those submissions were prepared.

Husband’s debt owing to Ms M Austin (his mother) – mortgage debt

On 7 February 2008 a Loan Agreement was entered into between the husband as “Borrower” and his mother Ms M Austin as “Lender” (“the Loan Agreement”).
The Loan Agreement relevantly provides:
IN CONSIDERATION OF The Lender loaning certain monies (“the loan”) to the Borrower, and the Borrower repaying the Loan to the Lender, both parties agree to keep, perform and fulfil the promises and conditions set out in this agreement:
Loan amount and interest
1.The Lender promises to loan one hundred and twenty-three thousand ($123 000) AUD, to the Borrower and the Borrower promises to repay this principal amount plus the outstanding loan amount of seventy thousand dollars ($70000)AUD being for :personal loan($10000), loan for printer($13000), loan for [Japanese motor vehicle] ( $15000), Rates ($5000), Home loan repayments ($5000), renovations ($10000), new kitchen ($12000) to the Lender, at such address as may be supplied in writing within interest payable on the unpaid principal at the variable interest rate according to the [V Credit Union] variable home loan interest rate at the time of repayment, (currently 8.57% pa). The total loan amount of one hundred and ninety-three ($193000)AUD to be paid in full on sale of property at [W Street Suburb A] Queensland ...
2.The Borrower agrees to pay the Lender the amount of one hundred and ninety-three thousand ($193000)AUD in full on the sale of his property at [W Street Suburb A] ...
3.The Borrower leaves as security the deeds of the property at [W Street Suburb A], Queensland … with the Lender until such time as the loan is repaid.
4.The Borrower agrees that if he/she should default, the Lender may sell the property to procure the balance of the loan.
(errors and omissions in original)
On 25 February 2008 a mortgage was registered over the husband’s Suburb A property in favour of Ms M Austin as mortgagee pursuant to the Loan Agreement.
The loan consisted of two loans, one being for the amount of $123,000, and the other being for an outstanding amount of $70,000 which was for the following:
a)Personal loan - $10,000;
b)Loan for printer - $13,000;
c)Loan for [Japanese] motor vehicle - $15,000;
d)Rates - $5,000;
e)Home loan repayments - $5,000;
f)Renovations - $10,000; and
g)New kitchen - $12,000.
In respect of the outstanding amount of $70,000, in her affidavit of 5 October 2012 at sub-paragraph 28(c), the wife deposes that at the time of cohabitation the husband “… never mentioned that he owed any money to his family.”
By way of his written submissions, the husband submits that the Loan Agreement now totals $283,257.20. In support of this, he relies on the affidavit of his mother, sworn and dated 4 March 2013.
While I accept that the additional amounts listed in the schedule, marked as “Annexure I” of Ms M Austin’s affidavit dated 4 March 2013, are liabilities and are owed to Ms M Austin by the husband, at least some of them do not form part of the Loan Agreement secured by mortgage. They are unsecured liabilities of the husband and are discussed below.
In written submissions on behalf of the wife it is acknowledged that the Court must have due regard to the encumbrance to the property, and determine its value, according to the approach in Biltoft and Biltoft (“Biltoft”)[9] “… by deducting the amount of the secured liability from the gross value of the asset”. On that basis the wife contends that the value of the property is to be taken in at $375,000 less the mortgage liability of $193,000 to arrive at the net figure of $182,000.
[9] (1995) FLC 92-614.
However, the further submission is made on behalf of the wife that the liability of the husband to his mother, to the extent that it exceeds the $70,000 of the debt which is attributable to the discharge of the mortgage that was held over the subject property by the NAB (paid from the loan made by the mother) when paid “should be disregarded for the purposes of determining the proper order to be made under s 79.”[10]
[10] Paragraph 42 of the wife’s written submissions.
The basis of this submission, as set out in the wife’s written submissions, is that it is contended that the husband entered into the Loan Agreement in deliberate or reckless disregard of the wife’s potential entitlement under s 79.
A number of cases are referred to in the wife’s written submissions relied upon as authority for the proposition that the Court may legitimately disregard the liability, in excess of $70,000, in the manner contended for on behalf of the wife.[11]
[11] Commissioner of Taxation v Worsnop (2009) FLC 93-392 at [59]; Biltoft (supra); Petersens and Petersens (1981) FLC 91-095; Prince and Prince (1984) FLC 91-501 and Zalewski v Zalewski (2005) FLC 91-501.
The first point to be noted about the wife’s contentions in this respect is that as recognised in Biltoft, there is a fundamental difference between the assessment involved where the debt is secured over property and an unsecured debt/creditor. As was emphasised by the High Court in Stanford v Stanford:[12]
… it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
(original emphasis)
[12] (2012) 247 CLR 108.
In this case there was no application pursuant to s 106B of the Act to set aside the Loan Agreement or the mortgage over the Suburb A property securing the debt owing by the husband to his mother. There was no application pursuant to Part VIIIAA involving Ms M Austin. Either of such applications would have required the wife to join Ms M Austin as a party to the proceedings and no such application was pursued and Ms M Austin is not a party.
Counsel for the wife did not put to the husband in the course of

cross-examination that in entering into the Loan Agreement and the mortgage, the husband had acted in deliberate or reckless disregard of the wife’s potential interest.
Ms M Austin, the husband’s mother, was not required for cross-examination.
In my judgment there cannot be any doubt on the evidence that the husband’s interest in the Suburb A property is subject to the capital amount owing to his mother under the Loan Agreement as secured by the mortgage over the property for that secured debt.
Aside from the capital sum of $193,000, there is also the provision in the Loan Agreement with respect to interest being payable at the time of repayment in accordance with the prevailing variable home loan interest rate of the V Credit Union.
Ms M Austin sets out in the schedule to her affidavit not only calculations of interest payable on the secured capital amount of $193,000, but also details further payments made either to the husband or on his behalf by way of loans, subsequent to the date of the Loan Agreement.
It can be seen from the terms of the mortgage (clause 5) as to the description of debt or liability secured, that it is the capital amount of the loan of $193,000 that is secured by the mortgage.
That is, whilst the Loan Agreement also has a provision for interest on the capital sum, it would not seem that anything beyond the actual capital sum is secured under the terms of the mortgage itself.
Thus, Ms M Austin is an unsecured creditor with respect to the interest component payable under the Loan Agreement.
Moreover, it is not under the terms of the Loan Agreement that Ms M Austin has made further advances. That is, the Loan Agreement does not have any provision with respect to any further advances made and these can be seen as being separate to the terms of the Loan Agreement and the mortgage.
I accept that the subjective intention of the husband and his mother at the time the Loan Agreement was made must have been for the applicable interest rate to be that which Ms M Austin herself would have to pay, being the variable rate from time to time, given that she was borrowing herself the funds on her mortgage offset account.
On that basis, I accept that the interest calculations performed by Ms M Austin as set out in her attached schedule accurately reflect the amount of interest payable.
I also accept Ms M Austin’s evidence as to the further amounts or advances she has made to the husband since the Loan Agreement was made. These also appear in the schedule referred to.
Thus it is that Ms M Austin holds security via mortgage over the Suburb A property to secure the debt of $193,000; and she is also an unsecured creditor of the husband with respect to the balance of the debt amount comprising interest and other components totalling, as per the schedule referred to, $90,257.20.
Turning then to the contentions on behalf of the wife that the relevant transactions were entered into by the husband in deliberate or reckless disregard of the wife’s potential interest, it is necessary to consider the circumstances that were prevailing in the post-separation period and particularly at the point at which the Loan Agreement and mortgage were entered into.
What is clear on the evidence is that as at separation, and in the aftermath of the separation, the husband was in significant financial difficulties not simply because of his mental health issues, but essentially because of the consequences of the poor trading performance of his business T Pty Ltd.
Annexure “H” to Ms M Austin’s affidavit establishes that over a period of years the business T Pty Ltd operated by the husband traded at significant losses. Notably, in the tax year ended 30 June 2007 a loss of $329,369 was incurred and total losses reported in the husband’s income tax returns over the period between 30 June 2003 and 30 June 2009 amounted to $372,703.
The husband plainly did not have the financial capacity to continue meeting the mortgage payments due to the then mortgagee the NAB; nor did he have the capacity to meet outstanding taxation liabilities to the Australian Taxation Office, consequent upon the trading performance of his business and matters such as outstanding payments for GST and superannuation due to employees. I accept Ms M Austin’s evidence that both the NAB and the Australian Taxation Office were foreshadowing actions that would result in the sale of the Suburb A property, to recover outstanding payments.
I accept the evidence of Ms M Austin that but for her intervention in assisting the husband financially, it is more probable than not that the Suburb A property would have had to be sold at that time, that is, in 2008.
I accept the evidence of Ms M Austin that by her personally borrowing from the V Credit Union on her mortgage offset account; she provided significant financial assistance to the husband at that time. That assistance included the following:
a)Repayment of the NAB mortgage loan in the amount of $67,176.97;
b)Payment to the Australian Taxation Office of outstanding taxation liabilities of the husband/his business in the amount of $37,145.43;
c)Payment of outstanding rates due with respect to the Suburb A property in the amount of $2,107.59;
d)Payment to the Australian Taxation Office of outstanding superannuation liabilities for the business in the amount of $12,046.98.
For her part Ms M Austin provides evidence to the effect that she was conscious at the time of treating all of her children equally in terms of the interests they would ultimately derive from her, and this provides an understandable and credible context, which I accept, for Ms M Austin being willing to advance further funds to the husband only if the loan arrangements were formalised in the manner in which that occurred. I repeat that Ms M Austin was not challenged in cross-examination about her motives in entering into the formal loan and mortgage arrangements referred to.
In my judgment the contention that the husband thus entered into the Loan Agreement and mortgage in deliberate or reckless disregard of the wife’s potential claim ignores the reality of the husband’s perilous financial position following separation and its aftermath; and the fact that the subject funds were applied to liabilities consequent upon the trading performance of the business conducted during the relationship.
Plainly, for a long period given the trading losses reported, the business of T Pty Ltd not only did not have the capacity to provide the husband with the means to meet a range of liabilities, the position was reached, as referred to, that the husband’s financial position became so perilous that it was likely that the mortgagee bank would force a sale of the Suburb A property.
It bears repeating that Ms M Austin had to borrow on her own mortgage offset account she held with the V Credit Union to be able to provide the husband with the funding he needed to remain viable, without having to sell the Suburb A property.
It is relevant to note on Ms M Austin’s evidence, which I accept, that on 15 August 2012 a further payment to meet outstanding superannuation requirements had to be made totalling $15,708.62.
Moreover, it can be seen from the schedule that over the period between 15 February 2008 and 15 March 2013, Ms M Austin has drawn funds from her own mortgage offset account in excess of $10,000 in order to meet payments of rates and utilities for the Suburb A property.
Thus it is that aside from the capital amount of the loan of $193,000 as secured by the mortgage over the Suburb A property; Ms M Austin is a significant unsecured creditor of the husband in respect of the other debts outlined in the schedule, which I accept are debts owing by the husband to his mother, which she expects to be repaid.
As can be seen from the schedule, with the inclusion of interest calculated at prevailing rates from time to time together with the other payments or loans Ms M Austin has made to the husband over the period referred to, Ms M Austin claims a debt owing as at 15 March 2013 of $283,257.20.
Ms M Austin is obviously an unsecured creditor with respect to further funds she has advanced to the husband as noted. Her schedule reflects payments of amounts such as $1,200 being made to the husband from time to time, and I have already referred to the fact that she has paid in excess of $10,000 towards the rates and outgoings on the Suburb A property over the period between February 2008 and March 2013, as well as the superannuation amount.
I find that Ms M Austin is a secured creditor of the husband and that the husband’s Suburb A property is encumbered by a mortgage debt of $193,000.
I also find that Ms M Austin is an unsecured creditor of the husband to the extent of the balance amount owing to her, over and above the mortgage debt referred to, which amounts to $90,257.20.
For the reasons discussed, I do not accept that the husband’s entry into the Loan Agreement or the mortgage can be characterised in the manner contended for on behalf of the wife.
Moreover, it is clear that Ms M Austin has herself borrowed funds in order to provide the financial assistance which she has provided to the husband and which must be taken into account. That is, in the circumstances in which Ms M Austin made the borrowings and provision of finance which she did, there would be no legitimate basis to disregard those liabilities or to prioritise the wife’s claim over and above Ms M Austin, in terms of Ms M Austin being able to recover her debt ultimately even if that recovery is via her estate in protection of the interests of her other children.
I find that the husband’s liability to his mother in respect of the unsecured portion of the debt is not vague or uncertain nor has it been unreasonably incurred. On Ms M Austin’s evidence she expects to be repaid upon any sale of the subject property.[13]
[13] Biltoft (supra).
Translating the above discussion by cross-reference to the schedule of assets and liabilities contained in the written submissions on behalf of the wife, I find the following to be the parties’ existing legal and equitable interests, many of which were not the subject of dispute or challenge:

Item	ASSETS - WIFE	Value
1.	Property – X Street, Suburb Y	$292,830.00
2.	Motor Vehicle 2–	$ 13,000.00
3.	Suncorp Bank Account (…)	$ 37.11
4.	Suncorp Bank Account (…)	$ 3,318.00
5.	Suncorp Bank Account (…)	$ Nil
6.	Suncorp Bank Account (…)	$ 1,428.19
7.	Suncorp Bank Account (…)	$ 362.06
8.	ANZ Bank Account (…)	$ 6,795.52
9.	Country E Bank Account	$ 1,100.00
10.	Household Contents	$ 5,000.00
11.	QSuper Superannuation	$ 27,201.15
TOTAL		$ 351,072.03
Item	LIABILITIES - WIFE
12.	Suncorp Bank Account (…)	$265,995.25
13.	Suncorp Credit Card	$ 1,066.74
TOTAL		$267,061.99
NET ASSETS INCLUDING SUPERANNUATION TOTAL		$ 84,010.04
Item	ASSETS – HUSBAND
1.	Property – B Street, Suburb A	$375,000.00
2.	Household Contents	$ 5,000.00
TOTAL		$380,000.00
Item	LIABILITIES – HUSBAND
3.	Mortgage to Husband’s Mother – capital amount	$193,000.00
4.	Unsecured debt to Husband’s Mother	$ 90,257.20
TOTAL	$283,257.20
NET ASSETS TOTAL	$ 96,742.80

On my findings the wife holds modest property interests (inclusive of superannuation) having a total value of $84,000 approximately. The husband’s net interests are likewise modest, with a total worth of about $97,000.
In percentage terms, the wife has about 46 per cent of the parties’ combined worth, and the husband holds 54 per cent.

Assessment of contributions

Initial contribution

The evidence of the husband and of his mother establishes that the husband acquired the Suburb A property on 25 October 1993, some six years prior to the commencement of the parties’ relationship.
On the evidence which I accept, he did so by selling land or real property he previously owned at Z Town and drawing down from his public service entitlements consequent upon his work as a public servant. It would seem that these two sources provided the husband with capital of about $61,000 in 1993 contributed to the Suburb A property with the balance purchase price being funded by mortgage.
As already referred to, whilst there is no formal valuation evidence as to the value of the Suburb A property at the outset, the wife refers in her evidence to it being worth $205,000 and with a mortgage of “over” $100,000. The wife also acknowledges that the husband held $8,000 in superannuation; and owned a motor vehicle and modest furniture.
It would seem that on the wife’s evidence, imprecise as it is, the husband must have had initial capital worth at least about $100,000 at the outset.
Moreover, that capital included the Suburb A property the husband had acquired some six years before the relationship commenced and which, at its value for trial, had grown to be worth $375,000. In a relationship as short as this one the significance of the husband’s initial capital, and that it included the Suburb A property now included at a gross value of $375,000, is obvious.
At paragraph 26 of her affidavit the wife acknowledges that at the commencement of cohabitation she had “very little assets”. She suggests that she had minimal savings from Country E of approximately AUD $20,000.

However, it would seem from the cross-examination of the wife at trial that she had effectively used up any savings she had in the period whilst she was in Country E and whilst the parties were attempting to fulfil the requirements for the wife’s immigration. The wife gave evidence to the effect that she essentially utilised her savings for her own living expenses whilst in Country E.[14]
[14] Transcript of Proceedings of 14 March 2013 at page 38, line 40 to page 39, line 5 and page 40, line 10 to page 41, line 35.
It would seem that the only real financial resource the wife had as at the time of cohabitation was the ability to borrow $20,000 from her parents, if needed, to fulfil immigration requirements. There is no evidence that the wife actually received this sum or retained it.
It would thus seem that, overwhelmingly, the husband provided the initial capital at the time cohabitation commenced.
Moreover, it is significant that that initial capital comprised the Suburb A property which provided a home for the parties throughout their relationship and a home for their child upon her birth and whilst the relationship subsisted.
As already noted, the Suburb A property was income producing in the sense of other boarders paying rent in the initial period and the property being used when the business was first established. It is to be noted that notwithstanding the business performance of T Pty Ltd already referred to, it would seem that the mortgage debt on the Suburb A property was reduced to some extent over the period from the commencement of cohabitation until the parties’ relationship ended.
Each of the parties undertook some external employment for some time or periods during the relationship but in the main over that period they applied themselves to the business of T Pty Ltd. Unfortunately, as already discussed, that business operation was not financially successful.
I accept the husband’s evidence and that of his mother to the effect that the business was ultimately taken over by one Mr AA for no net return to the husband, and the evidence in that respect is corroborated by the Australian Taxation Office records annexed to Ms M Austin’s affidavit as to the reported returns of the husband over the years referred to.
This is therefore not a case where the application by each party to a business during the relationship was financially productive in the sense of their now existing assets against which their contributions fall to be assessed, or which provides a point of reference.
It cannot be doubted that on and from the birth of the child of the marriage the wife’s contribution included her primary care of the child. That contribution continued post-separation and relevantly it is the fact that subsequent to the parenting orders made by Demack FM the wife has undertaken essentially a sole caring role for the child with very limited financial assistance, at the minimum level of child support payments, being made by the husband.
The business of T Pty Ltd commenced in about 2002. The husband had accumulated sufficient savings from his earlier external employment in order to establish this business. The business grew to having three offices, one in Brisbane, one in BB Town and one in CC Town.
I have earlier noted that the business was not financially successful, but it can nevertheless be accepted that each of the parties contributed in the form of engaging in this business and I accept the wife’s evidence that even after the birth of the child she contributed in this respect.
Whilst the husband retained the business at separation, I have earlier recorded my findings in relation to it not having any net worth and indeed the husband had to address significant financial fallout from the poor trading performance consequent upon the years in which it incurred trading losses, and this combined with the adverse health situation of the husband, meant that there was no financial return to the husband from the business. I do not accept the wife’s evidence or inferences to the effect that there were assets net of liabilities which the husband exclusively retained. In cross-examination the wife acknowledged the existence of substantial outstanding liabilities for taxation and unpaid superannuation entitlements of employees.[15]
[15] Transcript of Proceedings of 14 March 2013 at page 60, line 30 to page 61, line 20 and page 72, line 20.
As at separation, the wife retained a motor vehicle which she says was worth approximately $3,800; she had accumulated some superannuation in an amount of approximately $4,000 and she removed cash savings of about $5,000. The wife confirms using these funds for living expenses as well as setting up her new home with some basic furnishing.[16]
[16] Transcript of Proceedings of 14 March 2013 at page 42, line 30 to page 43, line 10.
In the post-separation period the wife secured her current Government employment. Beyond the minimal funds and other items referred to at separation, it does not seem the wife received any significant financial assistance from the husband post-separation and for the reasons already discussed, it would seem the husband had little or no capacity in financial terms to provide any such assistance.
On 26 October 2011 the wife purchased her current property using accumulated savings and borrowings. The total purchase price was $292,830 with the home constructed on the property being completed in about November 2012. The wife obtained an initial loan from Suncorp Bank in the amount of $265,995.25 on 16 March 2012 to secure this purchase. Thereafter the wife has been meeting mortgage repayments.
The wife obtained a Government sponsored first homebuyers’ grant of $7,000 and a Government sponsored “building boost” grant of $10,000 to apply to this purchase.
The motor vehicle that the wife retained at separation was involved in a car accident and the insurance payout in respect of that accident was used by the wife to purchase a vehicle subsequently exchanged for another vehicle purchased with financial assistance from the wife’s parents. The wife’s current vehicle was initially financed through Suncorp Bank but has since been paid off.
The husband was initially during the relationship in an employed position until about 2002 when the business of T Pty Ltd was established. As earlier noted, the husband accumulated savings from his employment in order to establish the business.
In late 2006 the husband commenced working for the St George Bank essentially because the T Pty Ltd business was in financial difficulty.
The wife acknowledges that during the relationship significant financial assistance was provided by the husband’s mother and I have accepted Ms M Austin’s evidence as to the extent of financial assistance she provided. Where there is a difference between her version and that of the wife, I prefer the evidence of Ms M Austin as it was unchallenged.
Other than working at T Pty Ltd, the wife worked for about two months as a receptionist earning a modest income and I have referred to the feature that the husband was in external employment up until 2002 and again returned to external employment with the St George Bank for a period in late 2006.
I accept the wife’s evidence that during the relationship she attended to tasks such as cooking and cleaning and general homemaking tasks, albeit that the wife acknowledges that when she was working there was an employed cleaner in the house.
Whilst I have recorded that the wife undertook a primary caring role with the child, the wife herself acknowledges that the husband participated to some extent in that care.
Some six years elapsed between the parties’ final separation and the property trial of the proceedings. That is obviously significant in any case but particularly so when the parties’ cohabitation and marriage was itself only of about seven years duration.
Obviously enough most of the assets that the wife has accumulated have been accumulated by her in that post-separation period. Beyond the amount of about $4,000 in superannuation; the cash of $5,000 used to acquire household contents, not much in the way of direct financial contribution can be pointed to by the husband with respect to the assets held by the wife, but that does not take account of the substantial liabilities that existed as at separation that the husband was left with.
Conversely, in real terms having regard to the time/cost of money, the husband was probably in an inferior overall financial position as at trial than he was at the time cohabitation commenced, largely because of the poor trading performance of the business but also because of his health limitations.
As has earlier been discussed, but for the financial assistance of Ms M Austin, the husband would plainly not have retained even the assets he currently has or the equity he currently has in the Suburb A property, albeit that that is in itself a modest total.
In my judgment, whether an asset-by-asset approach is adopted or a global approach is taken, it would not be legitimate to adjust the interests of either party in the property each currently holds in favour of the other, as a legitimate assessment of the parties’ contributions-based entitlements.
As earlier noted, effectively the wife had no assets at the commencement of cohabitation, whilst relative to the modest “pool” of property interests of both parties under consideration, the husband initially had significant capital, and the use of that capital was to the parties’ mutual benefit.
I have earlier referred to the feature that viewed globally the wife currently holds 46 per cent of the combined property interests of the parties whilst the husband holds 54 per cent. Obviously the most significant factor offsetting the husband’s initial capital contribution is the contribution the wife has made to the welfare of the family represented by her care of the child of the marriage which, as already noted, has essentially been on a sole caring basis since the final parenting orders were made.

Section 75(2) matters

The wife is 43 years of age and enjoys good health. The husband is 46 years of age and does not enjoy good health as earlier discussed.
As at trial the wife was earning $1,600 per fortnight or $800 net per week by way of salary in what appears to be secure Government employment.[17] It was confirmed at the hearing in September 2015 that the wife remains in this employment, albeit at a slightly increased salary.
[17] Paragraph 91 of the wife’s affidavit filed on 5 October 2012.
There is no reason to suppose that the wife does not have the physical and mental capacity for such gainful employment until she reaches retirement age. In such employment the wife has the benefit of employer contributions to her superannuation.
In stark contrast, the husband remains on the disability support pension and has been receiving that pension for a very significant period. It was confirmed at the hearing in September 2015 that the husband remains on the disability support pension.
The present value of the wife’s capacity to earn net weekly income of not less than $800 per week for the balance of her notional working life to retirement is obvious. Added to that the wife has the benefit of employer contributions to superannuation. In comparison to the husband’s position on a disability support pension the wife’s position is vastly superior.
Obviously an offsetting factor is the obligation the wife has met and will continue to meet with respect to the financial support of the child of the marriage without any meaningful financial assistance from the husband.
That noted, it is the fact that even with that obligation for support, the wife accumulated in the five years post-separation the assets she holds as referred to.
The wife continues to have the care and control of the child of the marriage and will it seems be effectively solely responsible for that care and control for the foreseeable future. Her commitments for support not only of herself but of the child are significant, as set out in her Financial Statement.
The husband has been contributing only the minimal and nominal payment for assessable child support that his receipt of a disability support pension dictates. That will probably continue for the foreseeable future, if not indefinitely.
In addition to her net fortnightly income of $1,600 the wife receives Family Tax Benefits.
Balancing the competing considerations it seems to me that review of the relevant s 75(2) matters overall favours there being an adjustment in favour of the wife, but obviously regard must be had to the modest assets under consideration whether they are considered in a combined “pool” on a global approach or considered in the individual ownership of each party on an “asset-by-asset” approach.

Resolution – just and equitable orders

In circumstances where the parties chose to separate and bring an end to any common assumptions and common use of property that applied during the marriage, it would be just and equitable within the meaning of s 79(2) to make an order adjusting property interests.
In terms of a just and equitable outcome and orders which are appropriate within the meaning of s 79, I consider that an order in the quantum sought by the wife would not be just and equitable in all the circumstances and would indeed exceed the husband’s total net worth.
On his present financial position the only means by which the husband can pay the wife anything without losing his Suburb A property is if he is able to again borrow from his family or, alternatively, he will have to sell the home he has owned since 1993.
Obviously enough sale of the home would involve additional costs of sale.
In any event, it would not be just and equitable to order the payment of such a lump sum as sought by the wife given that it would effectively consume all of the remaining equity in property that the husband has.
In my judgment, the husband’s proposed payment of $20,000 is in the circumstances of this case just and equitable to both parties.
If the wife receives $20,000 she will have or retain property worth about $104,000 whilst the husband will have or retain property worth about $77,000. On a global approach the wife will retain or have about 57 per cent of the parties’ combined worth and the husband 43 per cent. Viewed on an

asset-by-asset basis, $20,000 equates to about 20 per cent of the husband’s net asset position.
The husband sought a period of six months from orders to pay and then payment by monthly instalments over six months. In my judgment that would not be appropriate in terms of the wife receiving her proper entitlement but balanced against that is the desirability of the husband retaining his home, if that is possible.
The husband ought be given some time to pay the lump sum via, presumably, borrowing from his mother or family members, but it would not be reasonable to make the payment on the terms and by the instalments contended for by the husband.
In my judgment, the husband should have 90 days from the date of these orders to make payment of the sum of $20,000 to the wife in a lump sum. In default of making that payment it will unfortunately be necessary for orders by way of enforcement as sought by the wife to take effect such that sale of the husband’s home be effected if that be necessary.
For these reasons I make the orders set out at the commencement of them.

I certify that the preceding two hundred and five (205) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 11 December 2015.

Associate:

Date: 11 December 2015

[2015] FamCA 1119

11 December 2015

Key Legal Topics

Areas of Law

Family Law

Property Law

Contract Law

Legal Concepts

Appeal

Remedies

Contract Formation

Breach

Damages

Injunction