BAKER and DARZI
[2013] FCWA 16
•20 FEBRUARY 2013
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
CHILD SUPPORT (ASSESSMENT) ACT 1989
LOCATION: PERTH
CITATION: BAKER and DARZI [2013] FCWA 16
CORAM: MARTIN J
WALTERS J
HEARD: 28, 29 & 30 JUNE, 6 JULY 2010
DELIVERED : 20 FEBRUARY 2013
FILE NO/S: PTW 5453 of 2008
BETWEEN: KELLY BAKER
Applicant
AND
SALVADOR DARZI
RespondentAND
ADRIANA DARZI
Third Party
Catchwords:
FAMILY LAW – alteration of property interests – where husband asserted that he had borrowed significant moneys from his parents to assist with the purchase of the former matrimonial home – whether loan existed – where husband repaid alleged loan to his parents from proceeds of sale of former matrimonial home – whether moneys paid purportedly in repayment of the loan should be added back into the pool of property available for distribution between the parties – where the parties enjoyed a very high standard of living – where each party alleged that the other party had wasted moneys – where the husband failed to make full and frank disclosure of his financial position – husband's conduct as a litigant – where the husband waged the forensic and procedural equivalent of "guerrilla warfare" against the wife during the course of the proceedings – consideration of the High Court's decision in Stanford [2012] HCA 52; (2012) 87 ALJR 74
Legislation:
Family Law Act 1975 (Cth), s 75(2), s 79,
Child Support (Assessment) Act 1989 (Cth), s 117
Category: Not Reportable
Representation:
Counsel:
Applicant: Self Represented Litigant
Respondent: Self Represented Litigant
Third Party : Self Represented Litigant
Solicitors:
Applicant: Self Represented Litigant
Respondent: Self Represented Litigant
Third Party :
Case(s) referred to in judgment(s):
B & B [2006] FamCA 883
Bagala & Bagala [2009] FMCAfam 953
Bonacci & Bonacci [2012] FamCAFC 15
Chang v Su (2002) FLC 93-117
Dobbs & Bryson (2007) FLC 93-346
G & G (2004) FamCA 1179
Gollings & Scott (2007) FLC 93-319
Hale & Hale [2012] FMCAfam 684
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
In the marriage of Black & Kellner (1992) FLC 92-287
In the marriage of Bremner & Bremner (1995) FLC 92-560
In the marriage of Briese & Briese (1986) FLC 91-713
In the marriage of Clauson & Clauson (1995) FLC 92-595
In the marriage of Ferguson and Ferguson (1978) FLC 90-500
In the marriage of Ferraro & Ferraro (1993) FLC 92-335
In the marriage of Giunti & Giunti (1986) FLC 91‑759
In the marriage of Gyselman & Gyselman (1992) FLC 92-279
In the marriage of Lee Steere & Lee Steere (1985) FLC 91-626
In the marriage of McMahon & McMahon (1995) FLC 92-606
In the marriage of Mezzacappa & Mezzacappa (1987) FLC 91‑853
In the marriage of Money & Money (1994) FLC 92-485
In the marriage of Oriolo & Oriolo (1985) FLC 91-653
In the marriage of Pastrikos & Pastrikos (1978) 31 FLR 524
In the marriage of Pastrikos & Pastrikos (1980) FLC 90-897
In the marriage of Ross v McDermott (1998) 23 Fam LR 613
In the marriage of Townsend & Townsend (1995) FLC 92-569
In the marriage of W and W (1980) FLC 90‑872
In the marriage of Waters & Jurek (1995) FLC 92-635
In the marriage of Way & Way (1996) FLC 92‑702
In the marriage of Weir & Weir (1993) FLC 92-338
In the marriage of White & White (1995) FLC 92-648
In the marriage of Whitely & Whitely (1996) FLC 92-684
K & K (2002) FamCA 1150 (reported as (2003) FLC 93-135)
Kennon v Kennon (1997) FLC 92-757
Kouper & Kouper (No 3) [2009] FamCA 1080
Kowaliw & Kowaliw (1981) FLC 91-092
LGM & CAM (2011) FLC 93-481
Mayne & Mayne (2011) FLC 93-479
Norbis v Norbis (1986) 161 CLR 513
Norman & Norman [2010] FamCAFC 66
Omacini & Omacini (2005) FLC 93-218
OSF & OJK (2004) FLC 93-191
Pierce v Pierce (1999) FLC 92-844
Polonius & York [2010] FamCAFC 228
Re Chemaisse; Federal Commissioner of Taxation (Intervener) (1990) FLC 92-133
Reichstein & Reichstein (2006) FamCA 1422
Russell v Russell (1999) FLC 92-877
Shimizu & Tanner [2011] FamCA 271
Stanford v Stanford [2012] HCA 52; (2012) 87 ALJR 74
Wales & Falls & Anor (SSAT Appeal) [2010] FMCAfam 116
Williams & Williams (2007) FamCA 313
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
Preamble
1In these Reasons, and unless otherwise indicated:
(a)all statements of fact comprise findings of fact; and
(b)I have not drawn a distinction between proceedings or events in the Magistrates Court, 150 Terrace Road, Perth and proceedings or events in the Family Court of Western Australia (given that the two Courts operate “in tandem” and exercise similar jurisdiction).
Background and relevant chronology
2The husband was born [in] 1960. The wife was born [in] 1971. They commenced living together [in] 2001, and married [in] 2002. They separated on or about 14 October 2008. It follows that their relationship lasted approximately seven years. It appears that they are not yet divorced.
3There are three children of the marriage – [Mark] (born [in] 2003), [Angela] (born [in] 2005) and [Luke] (born [in] 2008). The children live with the wife and spend no, or almost no, time with the husband.
4All three children were born as a result of IVF treatment.
5The parties were both born in Australia.
6The marriage in [in] 2002 was the wife’s first marriage. It was the husband’s second marriage: he had married his first wife in 1988, but they separated in 1996 and were divorced in 2001.
7The husband is a chartered accountant (although he has not practised in that role for many years). He has held the positions of CEO and CFO, and other senior positions, in various publicly listed companies. He has a very significant business background.[1] Although in the past he was paid something in the order of $250,000 per annum (if not more),[2] his present income is unclear. His 2010 tax return reveals income from two public companies totalling approximately $60,000;[3] his taxable income for the 2011 financial year was approximately $129,500.[4]
[1] See, for example, annexures A to I of the wife’s trial affidavit.
[2] See, for example, annexure Z to the wife’s trial affidavit.
[3] Although the husband claims a deduction of approximately $32,675 – relating to rental losses – against this income.
[4] According to the Child Support Assessment issued 9 March 2012 (relating to the period 1 October 2011 to 31 December 2012).
8The wife’s case is that the husband is an alcoholic, and that his alcoholism and irresponsible behaviour have adversely affected not only his income and earning capacity, but also his relationship with her and the children.
9The wife is studying law at [University]. She commenced the course in February 2009, and is enrolled on a part-time basis. She is likely to complete her degree at the end of 2013. When not studying, and given that the children live with her (and spend no or virtually no time with the husband), she is fully occupied with homemaking and parenting responsibilities.
10Although the wife obtained a Bachelor of Arts in or around 1992, she did not use her degree to obtain employment. She has never been employed in a full-time capacity.
[G Fashion]
11In mid-2000, the wife and her sister Christine (known as Anne) commenced a retail fashion business called “[G Fashion]”. The business was located in [P Suburb]. The wife’s then partner, Mr Kerr, provided $200,000 by way of “seed capital” for the business. Ultimately, the business was unsuccessful, and closed in mid-2003. The funds provided by Mr Kerr were lost, as were some additional funds.
12According to the wife, she and her sister relied upon the husband for financial advice regarding the running of G Fashion. Their reliance became increasingly heavy over the trading life of the business. The wife said that the husband “was of great assistance in the running of the business” and that she and her sister “were grateful for his ongoing accounting and financial advice”.[5]
[5] See page 38 of the wife’s trial affidavit.
13Between the commencement of G Fashion in mid-2000 and its closure in mid‑2003, the wife ended her relationship with Mr Kerr and commenced her relationship with the husband. To the extent that it may be relevant, there was an overlap between the commencement of the wife’s relationship with the husband and the termination of her relationship with Mr Kerr.
Property at the commencement of cohabitation
14The wife commenced living with the husband in his home in [Property A] (“Property A”) on 3 June 2001. At that time (which was, in effect, the commencement of the parties’ relationship for the purposes of these proceedings), the wife had the following assets:
(a)[Property B] . The unit had been purchased for $300,000 and was encumbered by a mortgage (in respect of which approximately $236,000 was owing). The unit was sold in May 2002. The net proceeds of sale were approximately $94,000. According to the wife, she offered to provide the husband with the whole of the net proceeds of sale, but he elected not to take the money – saying that, having regard to his high income, the parties did not need it. Having been rebuffed by the husband, the wife then gave the $94,000 to her sister, [Anne]. Alternatively, the wife used approximately $10,000 from the net proceeds of sale to pay various expenses in relation to the husband’s Mercedes motor vehicle and then deposited the remainder (being $84,000) into a fixed deposit at the ANZ bank in the name of her mother. It was from this fixed deposit that an amount of $60,000 was paid to [Anne]. According to the wife, [Anne] and her partner needed the money because they wished to buy a home. The wife said that the payment to her sister comprised a gift and was “never intended as a loan”.[6] Given the state of the wife’s financial affairs at the time, however, her version of the manner in which the $94,000 (or, alternatively, $60,000) came to be paid to her sister seems less than plausible. After all, and on her own evidence, [G Fashion] was doing poorly, she had very recently ended her relationship with Mr [Kerr] (who had provided $200,000 by way of “seed capital” for the business, which moneys were never repaid), she had been compelled to sell [Property B] because she “could not afford to make the mortgage payments” and, approximately 6 months later, she used some $8,800 from her share of the sale of the Property F (see below) to pay certain liabilities associated with the fashion business.[7] As well, and again on her own evidence, the wife’s parents eventually paid $85,000 (on behalf of the wife and her sister) to discharge debts associated with the winding up of [G Fashion] , with the intention that those moneys would be repaid when the wife and [Anne] had sufficient funds to enable them to do so. The wife added that the husband repaid her parents $20,000 of the $85,000 (leaving $65,000 remaining owing by the wife and her sister to their parents). For the wife to give her sister $94,000 (or, alternatively, $60,000) in such circumstances, and when she perceived herself to be in financial difficulty at or around the time of the alleged gift, seems inexplicable.
(b)A property in [Property F] (which the wife owned with her mother). The property had been purchased for $193,600 and was encumbered by a mortgage (in respect of which approximately $160,000 was owing). It seems that the Property F was sold in November 2002, and that the net proceeds of sale were approximately $17,500 – to which the wife was entitled to one half. She used her one half share to pay some of the liabilities associated with [G Fashion].
(c)Some personal chattels and effects.
(d)Her interest in [G Fashion] (which had commenced in the previous year). As indicated above, the business was unsuccessful and closed in mid-2003.
[6] See page 39 of the wife’s trial affidavit.
[7] See page 39 of the wife’s trial affidavit.
15Excluding the wife’s interest in G Fashion , and doing the best that I can with the evidence available to me, it is likely that the net value of the wife’s assets at the date of commencement of cohabitation was approximately $90,000. When regard is had to G Fashion, however, it is likely that the net value of the wife’s property at the date of commencement of cohabitation was more likely to have been approximately $30,000 to $40,000 – at the most.
16The husband had the following property at the commencement of cohabitation:
(a)Property A (which was to become the parties’ matrimonial home). The husband purchased Property A in January 1999 for approximately $730,000. At the time of commencement of cohabitation, Property A was encumbered by a mortgage in respect of which approximately $468,000 was owing. The husband asserted that he had borrowed moneys from his parents in order to complete the purchase of Property A. The amount that the husband allegedly borrowed from them was the subject of a dispute between the parties at trial, as was a payment of approximately $410,000 made to the husband’s parents when Property A was sold. The $410,000 was purportedly in repayment of the moneys allegedly borrowed by the husband when he purchased Property A. I have dealt with this subject in more detail below, under the heading Property A – moneys allegedly owing to the husband’s parents.
(b)Shares in various public companies.
(c)A part interest in a residential property at [Property C] (“[Property C]”). During the course of the wife’s evidence, it became clear that Property C was a single house that has been “divided in two”.[8] The registered proprietors of Property C comprised the husband’s parents (as to one half, as joint tenants) and the husband (as to one half, as a tenant in common). In other words, the husband’s parents owned a one half share as joint tenants, and the husband owned the other half share as a tenant in common. As Martin J described it, the property was “an unofficial duplex”.[9] The two halves of the “unofficial duplex” (known as Unit A and Unit B) were rented separately, but they could not be sold separately. In broad terms, the husband was responsible for and received the benefit of the rental from Unit A and his parents were responsible for and received the benefit of the rental from Unit B. Property C had been purchased in August 1985 for $69,000, at which time it was encumbered by a mortgage in respect of which $29,000 was owing. According to the wife, Unit A was valued at approximately $80,000 at the date of commencement of cohabitation. It follows that Property C (as a whole) was likely to have been worth approximately $160,000 at the date of commencement of cohabitation.
(d)A property at [Property D]. This property had been purchased in March 1996 for $123,000 and was encumbered by a mortgage in respect of which approximately $105,000 was owing. According to the wife, the property was sold in October 2002 for $232,500. According to the husband, the property had been sold before he met the wife.[10]
(e)A Valiant motor vehicle (valued at approximately $2,500).
(f)Personal chattels and effects.
[8] 29 June 2010 transcript at 48-49.
[9] See annexure A to the wife’s affidavit sworn 18 February 2011.
[10] See paragraph 46 of the husband’s affidavit sworn 22 December 2008.
17Doing the best that I can with the evidence available to me, it is likely that the net value of the property owned by the husband at the commencement of cohabitation was not less than approximately $390,000, excluding the value of the shares that he then owned. The figure of $390,000 comprises:
(a)approximately $180,000 in respect of the husband’s interest in Property A – after taking into account approximately $80,000 that his parents are likely to have provided at the time of its purchase (being a contribution of $50,000 to the deposit and approximately $30,000 in respect of stamp duty);
(b)approximately $80,000 in respect of the husband’s interest in Property C ; and
(c)approximately $130,000 in respect of the husband’s interest in the Property D and his car.
G Fashion debts
18According to the wife, the “net liability” owed by her sister and herself subsequent to the winding up of G Fashion was $184,000. The wife’s share was $92,000. She said that her parents paid $85,000 to enable their daughters to discharge that debt. The wife added:[11]
The intention was that those moneys would be repaid, when [Anne] and I [had] funds adequate to enable us to repay those moneys. [The husband] repaid $20,000 of the $85,000, and $65,000 remains owing by [Anne] and I to my parents.
[11] See page 39 of the wife’s trial affidavit.
19According to the husband, he contributed at least $40,000 towards legal fees associated with a lease dispute arising out of the failed fashion business. He said that this contribution was in addition to the $20,000 referred to in the previous paragraph.[12]
The family’s financial position deteriorates
[12] See page 11 of the husband’s trial affidavit.
20Also according to the husband, the family’s position of financial security began to deteriorate in or around 2005. The husband said that he lost his position at an entity known as [Company A] around that time. Until then, he had been earning approximately $250,000 per annum from that source alone. When cross-examining the wife, the husband suggested that his income from director’s fees fell to around $60,000 to $65,000 per annum. Notwithstanding the decrease in income, the husband suggested that he endeavoured to maintain the family’s standard of living and that, in doing so, its debt position worsened significantly. He also suggested that he became stressed because of the family’s deteriorating financial position. For her part, the wife said that she did not notice a deterioration in the family’s living standard. She then added:[13]
I didn’t know that you were stressed. You never told me that you were stressed. You did get a lot nastier towards me in that period, which when you look back in hindsight may be … how you dealt with your stress, by being abusive towards me … I’d probably say your abuse did get worse around that period.
[13] 29 June 2010 transcript at 64.
21At about the same time, the husband sold [Property A] that he had purchased in or about 2003. I am unaware of the precise purchase price for the penthouse but, according to the husband, he had borrowed approximately $1,100,000 in order to complete the purchase (which amount was secured by a mortgage). He sold the penthouse in or around 2006 – at a significant capital loss, it seems – because of his incapacity to meet the mortgage payments. When the husband put the predicament in which he found himself at that time to the wife in cross-examination, she was wholly unsympathetic. She said that the purchase of the penthouse had been “totally self‑indulgent” on the husband’s part, and that the parties had hardly ever gone there. For the majority of the time that it was owned, the penthouse was unoccupied. She denied that the husband ever told her that he was obliged to sell the penthouse because he was in financial difficulty.[14]
Separation
[14] 29 June 2010 transcript at 64-65.
22The wife obtained an interim violence restraining order against the husband on 10 November 2008 (after which the husband left the former matrimonial home). On 15 December 2008, and on the basis of various mutual undertakings, the wife’s application for a violence restraining order was dismissed.
23The wife continued to reside in Property A until mid-October 2009. She then obtained rental accommodation for herself and the children.
24At the time of separation (being mid October 2008), three real properties were of particular relevance:
(a)A residential property at [Property E] (“[Property E]”). Property E had been purchased in January 2005 for $500,000, subject to a mortgage of approximately $350,000. It was registered in the joint names of the parties. Because of the wife’s potential exposure to certain liabilities associated with her involvement in G Fashion, the wife had signed a statutory declaration – either at the time of the purchase of Property E in January 2005, or in or about April 2007 – acknowledging that she had no beneficial interest in the property and that her legal half interest was held on a constructive trust for the husband. According to a writ issued in the Supreme Court of WA on 30 March 2009 between Pepper Finance Corporation Ltd as plaintiff and the husband and the wife as defendants, however, the husband and the wife borrowed just under $555,000 from Pepper Finance in August 2006 – some of which (no doubt) was used to discharge the mortgage registered against Property E at the time of its purchase. The later borrowing was secured by a mortgage over Property E registered in September 2006. The term of the borrowing was two years. In other words, the husband and the wife were obliged by the terms of the mortgage to repay the loan to Pepper Finance in August 2008. The writ alleged that the husband and the wife failed to repay the loan at the expiration of the loan period and that, in mid September 2008, Pepper Finance changed the loan arrangements to require monthly payments over a 24 year loan term. The husband and the wife defaulted on these arrangements as well.
(b)Property A. Property A had been purchased – by the husband, in his sole name – in January 1999. At separation, it remained registered in the husband’s sole name.
(c)Property C. The somewhat unusual ownership arrangements relating to Property C have been described above.
25Other property owned by the parties at the date of separation included:
(a)two motor vehicles – a Mercedes-Benz and a Range Rover;
(b)furniture and household effects; and
(c)jewellery and watches.
26After separation, the husband stopped making payments to the finance company in respect of the Range Rover. It was ultimately repossessed and sold, leaving a significant debt. I am not aware of the fate of the Mercedes-Benz.
The wife commences Family Court proceedings
27The wife commenced proceedings in this Court on 5 November 2008. At that time, she filed ex parte applications seeking “a raft of orders by way of spousal maintenance including lump sum payment of $50,000, together with cash payments of $2,500 per week … (and) there were also orders seeking payment of other outgoings including mortgages and also exclusive occupation of (Property A )”. This description is contained in the Reasons for Decision of Mr R G Fleming M, dated 30 March 2009 (which I shall call “the Fleming Reasons”).
28On 18 November 2008, the wife applied to the Child Support Agency (“CSA”) for assessment of child support. The parties’ dealings with the CSA (and, ultimately, with the Social Security Appeals Tribunal (“SSAT”)) ran parallel to their proceedings in the Family Court. I have summarised the history of the child support proceedings later in these Reasons.
29According to the Fleming Reasons, on the first return date of the wife’s initiating application, being 19 November 2008, orders were made “of a holding nature which prevented the husband from dealing with various assets and required him to file answering documentation”. The orders made on 19 November 2008 are important. I shall refer to them as “the 2008 Injunctions”. Relevantly, the 2008 Injunctions provide as follows:
Until further order [the husband] be restrained and an injunction is hereby granted restraining him from dealing with, transferring, encumbering, leasing, offering for sale, mortgaging or in any way dealing with any of the following:
•[[ Property E] ];
•[[Property A] ];
•[[Property C] ];
•any interest [the husband] may have in [a number of public companies];
•any interest [the husband] may have in any other shares, whether held in any public or proprietary limited company …;
•any bank accounts, savings accounts, investment accounts in the name of [the husband];
•any assets of the [Beau Geste] Trust …
save and except with the written consent of [the wife].
30It is also important to note that the 2008 Injunctions have remained in effect since they were made.
31According to the husband, no mortgage payments for Property E and Property A “could be made or were made subsequent to October 2008”. Further, he asserted that all his credit cards were cancelled (by the providers) in November 2008, and “no transactions occurred on credit cards” after that time.[15]
[15] See pages 3-4 of the husband’s affidavit sworn 12 October 2009; see also Exhibit 6.
32At the next hearing (on 15 December 2008), the wife was granted exclusive occupation of Property A. The time within which the husband was required to file his responding material was extended by 14 days, and the proceedings were otherwise adjourned to 6 January 2009.
33The husband’s responding material was filed on 24 December 2008. As recorded in the Fleming Reasons, the husband’s material “presents a radically different picture of the parties’ affairs” to that presented by the wife. In short, the husband asserted that, as a result of the then current economic downturn his earning capacity had been greatly reduced and his income had virtually “disappeared overnight”. According to the Fleming Reasons, the husband “[blamed] their current plight on the wife’s extravagant lifestyle and [stated] that between 2004 and October 2008 she spent over $474,000 on her Amex Platinum card alone”.
34In his affidavit sworn 22 December 2008, the husband used adjectives such as exorbitant, irresponsible and irrational to describe the wife’s expenditure. He did not stop there. He said that “the wife at best could be described as ignorant of financial affairs or fiscal responsibility”.[16]
January to June 2009
[16] See paragraph 22 of the husband’s affidavit sworn 22 December 2008.
35At the hearing on 6 January 2009, the parties agreed to Property A being placed on the market for sale, and for the wife to reside there until settlement of the sale. Orders were made accordingly. Other orders were made to the effect that the husband’s shares in two corporate entities be sold, with the proceeds of sale to be paid to the wife “with such amounts subject to characterisation by the trial judge”. A conciliation conference was fixed for 26 March 2009.
36At about the same time, the husband began directing rental payments from Property C (Unit A) and director’s fees from “[MXX]” (presumably Company M ) into a CBA account in the name of “[Atlas] Pty Ltd in trust for [Beau Geste] Superannuation Fund”. I shall refer to the superannuation fund as “BGSF”. His reasons for doing so are incomprehensible. For example, in his affidavit sworn 12 October 2009 he deposed as follows:[17]
With all credit card and bank accounts cancelled and not operational the only option for me to survive was a defunct superannuation account with the Commonwealth Bank. Accordingly the rental from ([Property C] Unit A) and my MXX director’s fees over the last 10 months have been credited to this account.[18]
[17] See page 6, and annexure D, to the husband’s affidavit sworn 12 October 2009.
[18] In paragraph 14 of the husband’s affidavit sworn 14 October 2009 (and paragraph 7 of his affidavit of 7 December 2009), the husband expands upon this statement as follows: “With all credit card and bank accounts cancelled and not operational the only option for me to survive was a defunct superannuation account with the Commonwealth Bank and borrowing from family and friends from time to time. …” This version is no less incomprehensible than the version in the husband’s affidavit sworn 12 October 2009.
37Not only is the husband’s purported explanation for redirecting payments to the account incomprehensible, but so also is his description of the manner in which the account came to be established. On page 7 of his affidavit sworn 7 December 2009, the husband deposed as follows:
… I do not have an active superannuation fund. A previous contractor established the (BGSF) bank account at the CBA [Branch B]. The fund was to operate as a self managed (DIY) super fund. This never eventuated. …
38On page 5 of his trial affidavit, the husband deposed as follows:
I do not have an active legal superannuation fund. The self managed (BGSF) was never established in the correct manner and there is not a valid superannuation fund in existence …
39The husband’s purported explanations ignore his own role in the establishment and conduct of BGSF and the account. They also ignore the existence of the corporate trustee of BGSF.
40During cross-examination, the husband’s purported explanation for using the BGSF bank account was no more lucid:[19]
I had no choice (but to use the BGSF account), it is the only money I’ve got … Where’s my money coming from? … I’ve got no other money, I’ve got that and my director’s fees get banked into one account …
[19] 30 June 2010 transcript at 27.
41When asked whether he could have established a separate bank account into which his director’s fees could have been deposited, the husband replied: “I could have but why would I? Why would I?”[20] Notwithstanding the husband’s evidence in this regard, he then conceded that he opened a new bank account with the Commonwealth Bank on 30 October 2009, into which he deposited the sum of approximately $49,000 paid to him upon settlement of the sale of Property A. It is arguable that the husband’s actions in depositing this amount in an account in his name was in breach of pre-existing orders of the Court, and in particular the 2008 Injunctions. Like so much of the husband’s oral evidence, his purported explanation for dealing with the amount of approximately $49,000 in the manner that he did was incomprehensible;[21] indeed, the husband seemed incapable of giving any reasoned explanation beyond his repetition of the fact that the moneys eventually found their way into the (correct) joint CBA account – although in order for them to do so it was necessary for the wife to obtain an order to compel the husband to disgorge the funds. The husband’s attitude to this issue (and to others – such as the production of “comfort letters” to lenders referred to elsewhere in these Reasons) was clearly that the end justifies the means – or, perhaps more accurately, that an ending which is ultimately satisfactory should serve to expunge wholly unsatisfactory conduct specifically intended or designed to prevent that satisfactory ending being achieved.
[20] 30 June 2010 transcript at 27.
[21] 30 June 2010 transcript at 27-29.
42It is noteworthy that the husband did not disclose particulars relating to the redirected payments described in the preceding paragraphs until some 10 months had passed, and until the wife had filed an application in a case on 5 October 2009 seeking leave to proceed on an undefended basis. Her application in that regard was made as a consequence of the husband’s failure to produce documents as ordered, and his refusal to make full and frank disclosure of his financial position.
43When cross-examined by the wife at trial, the husband’s evidence regarding BGSF was vague and unconvincing. He sought to curtail the wife’s questioning by repeating: “It’s an illegal fund.”[22] He also conceded that he had used his employers’ superannuation contributions as income over the years, and that to have done so was illegal.[23] At a later stage in his evidence, the husband gave a garbled explanation regarding the provenance of the corporate trustee of BGSF, Atlas Pty Ltd. He said that it was –
a joint venture company between (X) and myself. It was actually established by me … initially to be trustee of the trust and the super fund (but) those two entities never happened. … (X) owned 50% of it. (It is still in existence, but (X)) owns it. … I transferred my shares in 2006.
[22] 29 June 2010 transcript at 92.
[23] For example, 29 June 20 with 10 transcript at 95.
44The ASIC Personal Name Extract (being annexure A to the husband’s trial affidavit) reveals that the husband was appointed a “member” of Atlas Pty Ltd in April 2001. He ceased to be a “member” in November 2006.
45Further procedural orders were made on 10 February 2009. The proceedings were otherwise adjourned to 23 February 2009.
46By the time of the hearing on 23 February 2009, the husband’s shares in the two corporate entities referred to in the orders of 6 January 2009 had been sold. The net proceeds of sale totalled less than $4,700. It seems that the parties had anticipated that the proceeds would have been significantly greater than that amount.
47According to the Fleming Reasons, “another attempt was made on 23 February 2009 to realise an asset by the transfer of a Valiant motor vehicle to the wife”, but the husband’s estimate for the value of the car (being between $7,000 and $10,000) appeared to be inflated. The wife’s evidence was that it was worth approximately $3,000.
48Other orders were made on 23 February 2009, dealing with the disclosure of various financial documents and production of the husband’s passport.
49On the night of 25 March 2009 (being the night before the conciliation conference), the husband left at least eight extremely offensive and belittling messages on the wife’s answering machine. The coarseness and vulgarity of the husband’s language is striking; indeed, it is unsettling. The extraordinary disrespect for the wife and arguably misogynistic attitude displayed in the messages reveal a very ugly side to the husband’s character.[24]
[24] See annexure O to the wife’s affidavit sworn 22 June 2010; a tape of the messages was played in Court before Martin J (29 June 2010 transcript at page 11).
50The conciliation conference took place on 26 March 2009. Certain “mechanical” matters were agreed and the husband was ordered to make full disclosure of financial documents for the past two years – such disclosure to occur within 28 days. The conciliation conference was otherwise adjourned to mid June 2009.
51On the same day as the conciliation conference (namely, 26 March 2009), the wife obtained a (second) interim violence restraining order against the husband (presumably arising out of the husband’s behaviour on the evening of 25 March 2009). She also obtained an interim violence restraining order against the husband’s father. Both interim violence restraining orders were listed for hearing on 12 June 2009.
52On the night of 27 March 2009, the husband left a further three extremely offensive and belittling messages on the wife’s answering machine. The messages were similar to those left by the husband on the night of 25 March 2009.[25]
[25] See annexure O to the wife’s affidavit sworn 22 June 2010; a tape of the messages was played in Court before Martin J (29 June 2010 transcript at page 11).
53On the same night (being 27 March 2009), an incident occurred at Property A. According to the wife, the husband and his friend, Ms Wilson came to the property late in the evening. The husband “shouted filthy abuse and kicked and attempted to smash down the front door”. He also damaged a car that the wife had borrowed from friends, “occasioning damage in excess of $7000”.[26]
[26] See page 19 of the wife’s trial affidavit.
54As indicated above, the Fleming Reasons were published on 30 March 2009. They contain the following summary under the heading “The Present Position”:
Three things are patently clear in this case:
•the wife and children do have an urgent need for financial assistance; and
•the parties are in a difficult financial position and unless assets are sold and sold quickly their position is dire; and
•the husband’s past ability to maintain the payment of the outgoings is no longer in play due to the marked reduction in his income and employability.
The real issue in this case is to ascertain whether, in fact, there are funds available to the husband that could be utilised in the wife’s financial support.
Realistically, in considering the evidence that has been presented in this case, and given the degree of financial default of the husband, unless he is hell-bent on financial ruin what he is putting to the Court would appear to be the true position.
55Among the findings contained in the Fleming Reasons is the following:
I … accept that the parties’ only salvation financially is by way of an ordered sale of assets to avoid bankruptcy. I also accept the husband’s evidence in relation to the reduction in his director’s fees and also his inability to earn the substantial income earned in the past.
56In accordance with the Fleming Reasons, his Honour made orders on 30 March 2009 to the effect that:
(a)the husband was to do everything within his power to obtain moneys owing to him from two corporate entities with which he was associated, and to pay those moneys into an account in the wife’s name;
(b)the husband was required to pay the rental income received from Property C Unit A into the account in the wife’s name;
(c)the moneys in the account in the wife’s name were to be utilised for certain expenses itemised by the wife; and
(d)the payments made in accordance with (a) and (b) above were to be characterised by the trial Judge.
57On 27 May 2009, the Land Rover previously used by the wife was sold by a finance company (the parties having defaulted on the relevant purchase or lease payments). The sale price was approximately $49,500, leaving a deficiency of approximately $55,650 – for which the wife was advised that she would be responsible.[27]
[27] See annexure KAD6 to the wife’s affidavit sworn 24 June 2009.
58On 11 June 2009, the wife filed an urgent application seeking interim orders in relation to the sale of Property E and Property A . She also sought an order that $50,000 be paid to her from the proceeds of sale by way of litigation funding. In her affidavit sworn 9 June 2009, the wife described in detail how the husband had failed or refused to comply with many of the earlier orders. Among other things, she alleged that he had not authorised the agents responsible for the marketing of Property A to liaise with her, that he had not arranged for rental moneys from Property C Unit A to be paid to her and that he was effectively “sitting on his hands” (to use a colloquialism) in relation to the sale of Property E. Further, she alleged that the husband had not done everything within his power to obtain moneys to which he had said he was entitled from the two corporate entities referred to in the orders made by Magistrate Fleming on 30 March 2009 (and that he had not paid the relevant moneys into an account in her name, as he was required to do).
59The wife’s urgent interim application was listed for hearing on 24 June 2009.
60On or about 12 June 2009, the interim violence restraining order which the wife obtained against the husband on 26 March 2009 was confirmed. An additional interim violence restraining order which the wife had obtained against the husband’s father appears to have been withdrawn or dismissed.
61The conciliation conference was reconvened on 17 June 2009. Detailed procedural orders were made, and the matter was included in the Defended List for trial.
62On 24 June 2009, the proceedings were adjourned to 29 June 2009 for further hearing. The orders made on that day reveal that the husband filed a response to an application in a case (being a response to the wife’s application in a case filed 11 June 2009) on 22 June 2009. The wife’s affidavit sworn 24 June 2009 reveals that the husband filed an affidavit in support of his Form 2A response,[28] but the original of the husband’s affidavit is missing from the Court file.
[28] See annexure KAD1 to the wife’s affidavit sworn 24 June 2009.
63On 29 June 2009, mechanical orders were made relating to the sale of Property E and Property A. Orders were also made to the effect that the husband authorise the relevant real estate agents to keep the wife informed of any offers made on the properties, and any other information relating to the sale or marketing of the two properties.
July to December 2009
64A further conciliation conference was held on 24 August 2009. Again, mechanical matters were dealt with.
65On 5 October 2009, the wife filed an application in a case seeking, among other things, leave to proceed on an undefended basis. In her affidavit sworn 2 October 2009 filed in support of the application (being one of two affidavits sworn by the wife on that day), the wife detailed a number of failures on the part of the husband to produce documents and make full and frank disclosure of his financial position.
66In her second affidavit sworn on 2 October 2009, the wife summarised the husband’s post-separation behaviour as follows:
Since our separation, [the husband] has failed to:
•maintain any of the mortgage payments over either [Property A] or Property E, and which he paid prior to our separation;
•maintain any of the payments with respect to the Range Rover motor vehicle in my possession as a result of which it has been repossessed. The net liability subsequent to the repossession is [approximately $55,600], but [the finance company has offered to accept $42,000 in full satisfaction of the debt];
•make any payment of child support. He is now in arrears with respect to his assessed child support in the sum of $11,868.66;
•make any payments of … rates with respect to either property to my knowledge;
•make payment of health insurance for myself and the children ….
On 30 March 2009, [the husband] was ordered to do all things necessary to ensure that the rental income received from [[Property C] Unit A] be paid in totality into an interest bearing account in my name.
Those payments did not commence until 26 May 2009, notwithstanding the existence of the order.
Of the three payments received, only one … represented the full amount of rental received ordinarily by [the husband], who previously received all of the rental from [[Property C] Unit A] to into his own account.
Without notice to me, [the husband] ceased the payments of rental on 24 July 2009. No payments have been made since that time.
67Property E had been placed on the market for sale in October or November 2008, prior to the commencement of proceedings in this Court. It was eventually sold in early October 2009. The sale price was $775,000, but the net proceeds of sale amounted to approximately $127,000.[29]
[29] See annexure C to the wife’s affidavit sworn 2 October 2009.
68On 16 October 2009, orders were made to the effect that the arrears due under paragraph 2 of the orders made on 30 March 2009 (relating to the rental payments from Property C Unit A) be paid to the wife from the proceeds of sale of Property E . The proceedings were otherwise adjourned to 27 October 2009.
69Pursuant to orders made on 27 October 2009, the net proceeds of the sale of Property E were distributed as follows:
(a)$4,000 in part satisfaction of paragraph 2 of the orders made on 30 March 2009 (relating to the rental payments for Property C Unit A); and
(b)$20,000 to the wife by way of lump sum spousal maintenance.
70The remainder of the net proceeds of the sale of Property E were to be held in a CBA account in the name of the parties (“the joint CBA account”).
71The sale of Property A settled shortly after the hearing on 27 October 2009. As described below (under the heading “Sale of Property A”) the settlement statement records that the property was sold for $2,100,000. Leaving aside agents fees, adjustment of rates and taxes and various costs and disbursements, the most significant debit items were as follows:
(a)discharge of [Money Lending] Pty Ltd mortgage: $1,537,731.17;
(b)payment to the husband’s parents (upon the withdrawal of a caveat that they had lodged against the title to Property A): $409,800;
(c)moneys held in trust (relating to electrical work) $30,000; and
(d)balance payable to the husband at settlement: $49,007.72.
72The wife immediately queried the payment of just under $410,000 to the husband’s parents and the retention by the husband of approximately $49,000.[30]
[30] See the wife’s affidavit sworn 13 November 2009.
73On 28 October 2009, the wife applied for and obtained (another) interim violence restraining order against the husband’s father. She alleged that, among other things, he had made threats against her at Property A on 16 October 2009.
74On 17 November 2009, the Court ordered the husband to pay that part of the purchase price for Property A that he had received at settlement (in other words, the amount of approximately $49,000) into the joint CBA account. It also ordered the parties to pay approximately $47,300 from the joint CBA account in full satisfaction of the (much larger) amount outstanding in respect of the acquisition of or lease relating to the Range Rover.
75After the payment into the joint CBA account of the net proceeds of sale of Property E (totalling approximately $127,000) and the net proceeds of sale of Property A (totalling approximately $49,000), the balance in the account was approximately $176,000. Pursuant to the orders referred to above, a total of $24,000 was paid to the wife, and $47,345 was paid to the relevant finance company in relation to the Range Rover – leaving a balance in the account of approximately $104,660 as at the beginning of December 2009.
76On 10 December 2009, orders were made to the following effect:
(a)the wife was at liberty to withdraw $10,000 from the joint CBA account (such sum to be characterised by the trial Judge in due course);
(b)“by way of security for costs [for the wife], an amount of $30,000 be accessed from [the joint CBA account]”;
(c)the husband was required to make further disclosure of documents;
(d)the husband was ordered to cause the managing agent of Property C Unit A to pay to the wife “all net rental proceeds derived from the rental from [Property C Unit A]”; and
(e)the proceedings were otherwise programmed to trial.
77On 12 December 2009, the CSA paid the wife approximately $4,870 in respect of child support. According to the wife, this payment comprised the only funds that she had received by way of child support since separation in October 2008. She said that it had been garnisheed from the husband’s 2009 tax refund.
January 2010 to the commencement of the trial
78Further programming orders were made on 1 February and 9 April 2010.
79On 14 April 2010 the wife filed an application in a case, and on 23 April 2010 she filed a contravention application. On 5 May 2010, the application in a case was adjourned to 26 May 2010 and the contravention application was adjourned to 28 June 2010. On the same day, orders were made to the effect that the wife be at liberty to withdraw $25,000 from the joint CBA account “as and by way of spousal maintenance”.
80After payment of the $25,000 referred to in the preceding paragraph, the balance in the joint CBA account was approximately $40,000.
81Further procedural orders were made on 26 May 2010. On the same day, other orders were made providing for the balance of the moneys in the joint CBA account to be divided equally between the husband and the wife – the relevant payments to be characterised by the trial Judge.
The trial (first phase)
82The trial commenced on 28 June 2010, and continued on 29 and 30 June 2010. I shall refer to these sitting dates as “the trial”.
83At the commencement of the trial, the wife’s case was based on her re-amended application for final orders filed 17 May 2010[31]. In broad terms, she was seeking orders for alteration of property interests (including an order to the effect that the husband’s parents should pay her the amount of just under $410,000 which they had received – directly or indirectly via the husband – from the sale of Property A). She also sought orders in relation to child support, and costs against the husband’s parents. The amount she was seeking by way of child support was significant: $250 per week per child (or, alternatively, lump sum child support in the sum of $500,000), plus the payment of school fees and additional expenses for the children to enable their attendance at private schools throughout their secondary education.
[31] The wife’s initiating application was filed on 5 November 2008; an amended application was filed on 18 November 2009.
84In her trial affidavit, the wife alleged that the husband had failed to comply (or failed to fully comply) with a large number of orders made between November 2008 and December 2009.[32] Many of the allegations related to the husband’s failure or refusal to disclose documents and information relating to his financial position and his financial dealings, and to his failure to make payments that he had been ordered to make.
[32] See pages 16 -27 of the wife’s trial affidavit.
85The wife also alleged that, as a result of the husband’s actions (or refusal to act, or meet payments for which he was responsible), she was obliged to obtain financial assistance from her parents. At the time of the trial, she asserted that she owed $46,658 to her mother “being the moneys that she has advanced to enable me to purchase food, clothing and meet the cost of utilities and various bills for myself and the children”.[33] Indeed, the wife asserted that she has received significantly more than this amount – in cash or in kind – from her parents since the separation.
[33] See pages 27-28 of the wife’s trial affidavit.
86The first phase of the trial ended on 30 June 2010, with the proceedings being adjourned to 6 July 2010. Martin J requested the parties to either file supplementary affidavits or to restructure their current affidavits to make them easier to read and understand. Her Honour also suggested that further evidence would be required in relation to the following:
(a)furniture, chattels and effects;
(b)medical tests for the purpose of determining whether the husband had genital herpes;
(c)evidence from the husband’s mother in relation to the alleged loan for the purchase of Property A; and
(d)the production of the Court file relating to family law proceedings between the husband and his previous wife.
87The only order made by Martin J on 30 June 2010 (apart from the order adjourning the proceedings to 6 July 2010 – with an estimated hearing time of two hours) was an order to the effect that the parties have leave to inspect the Family Court file of the husband and his former wife.
The trial resumes on 6 July 2010
88The trial resumed on 6 July 2010. Between 30 June 2010 and 6 July 2010, the husband sent a number of documents to the Court. One of the documents comprises a letter dated 2 July 2010 – purportedly from the husband’s parents. It is signed by the husband’s mother. The letter asserts that “funds totalling $157,236.03 were loaned to (the husband) to assist him to purchase (Property A)”.
89The husband also sent documents purporting to explain why his parents would be unable to give evidence on 6 July 2010. As explained elsewhere in these Reasons, I accept that the husband’s father was unable to give evidence at that time, but I am not satisfied (without appropriate evidence on oath) that the husband’s mother could not have given evidence.
90At the completion of the hearing on 6 July 2010, Martin J reserved her decision.
Events subsequent to the completion of the trial on 6 July 2010 (and until April 2011)
91The husband’s father died on 15 July 2010. It appears that he died intestate.
92On 18 February 2011, the wife filed an application in a case seeking various orders, including an order that Property C be transferred to her, an order for the delivery up of a painting (by Giles Hohnen) held by the husband, an order for interim spousal maintenance (at the rate of $200 per week) and an order for disclosure of financial documents and information. Her affidavit in support outlined her financial position at that time. She said that she was finding it increasingly difficult to make ends meet and that she did not “even have enough money to meet … daily expenses”. She blamed the husband’s alleged contravention of orders and “failure to disclose his true financial position” for the position in which she and the children found themselves.
93The wife’s application in a case filed 18 February 2011 came on for hearing before Martin J on 21 February 2011, at which time it was adjourned to 4 March 2011. No substantive orders were made, although the wife was given leave to issue a subpoena to [T Law Firm] regarding the estate of the husband’s late father, and the parties were ordered to attend a child dispute conference to discuss children’s issues.
94On 22 February 2011, the wife filed an amended application in a case – adding, in effect, a s 106A order (being an order appointing an officer of the Court to execute relevant documents in the husband’s name) to the orders sought in her application in a case filed 18 February 2011.
95The husband filed a response to the wife’s application in a case on 28 February 2011. He sought orders to the effect that the wife make an (unspecified) contribution to his alleged “credit card debt of $250,000” and an unparticularised order to the effect that “G Fashion expenses … be reimbursed”.
96In his affidavit in support of the response, the husband said (among other things) as follows:
(a)Property C Unit A was vacated on 14 December 2009 and has not been rented since that time.
(b)A caveat (presumably over Property C) was allegedly lodged by his parents on 31 December 2008, to secure an alleged loan made to the husband in 1986. The amount of the alleged loan was $45,000. I note that this appears to be the first time that the husband has ever mentioned this alleged loan – which, with interest, he asserts has now metamorphosed into a debt of “in excess of $500,000”.
(c)The “only income [he has] had to survive on” comprised his [Company M] director’s fees (being $2,200 per month net) and his [Company B] director’s fees (being $2,200 net per month – of which approximately $1,000 per month was allegedly being paid to the CSA).
(d)He had not seen the children for two years.
(e)The husband gave the following summary of the genesis of the parties’ financial difficulties:
•In 2005 my listed company [Company A] was subjected to an “unofficial” takeover. I was removed from the board. I was the major shareholder. I had spent seven years of my life plus my own capital to build the business.
•To survive this financial hit and survive large interest bills on two mortgages, refinancing was required. This ensured our lifestyle for a temporary period.
•[The wife] continued to spend an average of $10,000 per month on my credit cards plus driving a leased Mercedes‑Benz and then a Range Rover.
•The global financial crisis hit. All businesses suffered as did share values and property values. This would impact any party with debt exposure and no income.
•I was self-employed, trying to rebuild asset value and get my company back plus create new businesses.
•[The wife] continued to spend with no regard for financial conservatism; ferocious credit card expenditure and destroying my credit rating, plus being on medication.
•The owners of [Company A] … ended up driving the business into administration. The business was sold … My shareholding value was at this stage destroyed and the company placed into receivership.
97The proceedings came on for further hearing on 4 March 2011. On that day, the wife handed up a draft affidavit in response to the husband’s affidavit supporting his response to the application in a case. The wife did little more than join issue with the husband. She asserted that the alleged loan supporting the recently lodged caveat over Property C was a sham, similar in nature to the alleged loan relating to the acquisition of Property A.
98During the hearing on 4 March 2011, Martin J advised the parties that the husband’s mother would have to become involved in the proceedings. The husband’s response was: [34]
Absolutely. She’s happy to. … She wants to be.
[34] 4 March 2011 transcript at 7-8.
99The only order made on 4 March 2011 was to the effect that the husband’s mother file and serve an affidavit “in relation to her current position” within 14 days. The proceedings were otherwise adjourned to 1 April 2011.
100By letter dated 20 March 2011, the husband wrote to the Court advising, among other things, that:
(a)his mother “has decided to seek legal advice on this matter and needs time for fair and reasonable advice”;
(b)“[his mother’s] lawyer will lodge the documents [being the affidavit required to be filed pursuant to the orders of 4 March 2011] with due care and attention to all relevant matters”;
(c)documents relating to the history of the acquisition of Property C “will be provided by the advocate”; and
(d)his mother “will in due course come to the Family Law Court with documents and legal representation, and only with full legal advice”.
101At the hearing on 1 April 2011, Martin J advised the parties that she had “concluded that [[Property C]] has to be sold”.[35] Her Honour was clearly satisfied that the husband’s mother was well aware of the substantive proceedings, and well aware of the effect of the orders sought by the wife. On the basis of the comments made by the husband, her Honour could not realistically have come to any other conclusion.
[35] 1 April 2011 transcript at 5.
102The only substantive order made on 1 April 2011 was an order to the effect that the joint CBA account be closed and that the remaining balance of funds in the account be paid to the wife. The wife advised Martin J that approximately $900 remained in the account. The proceedings were otherwise adjourned to 8 April 2011.
103I note that the order made on 1 April 2011 to the effect that the joint CBA account be closed (with the balance in the account to be paid to the wife) appears to contradict the order made on 26 May 2010 to the effect that the balance in the joint CBA account be divided equally between the parties. It does seem apparent, however, that less than $1,000 remained in the account at the later date.
104In relation to the subject of legal representation for the husband’s mother, the husband advised Martin J on 1 April 2011 that his mother was seeking legal advice and that her counsel, Mr [Daniel Mobey] , was in Melbourne at the time, but would be arriving in Perth that evening. The husband said clearly that [Mr Mobey] “will be [his mother’s] counsel”.[36] I shall return to the subject of Mrs Darzi ’s legal representation a little later in these Reasons.
[36] 1 April 2011 transcript at 2.
105A child dispute conference was held on 4 April 2011. Among other things, a proposal to change the children’s surname was discussed. It is of significance that the conference memorandum contains the following observations:
[The husband] disputed that he is currently an alcoholic and admitted that in the past he has drunk too much due to financial pressure, Family Court proceedings, the illness and death of his father and not seeing his child. [The husband] reported he was on medication for alcohol misuse under the care of Dr Kent at General Practitioners City Medical Practitioners. [The husband] volunteered to provide information from the doctor regarding his treatment.
At the time of the conference, the family consultant confronted [the husband] regarding a noticeable smell of alcohol. [The husband] admitted having a glass of wine at lunch and gave the impression that he did not consider it unreasonable to have wine with meals.
… During the conference [the husband’s] responses at times left the impression that he was unable to regulate his emotions.
… Further information is needed from [the husband’s] treating physician as [the husband] in the conference reported he was taking medication as part of his treatment, however, at the conference he appeared under the influence of alcohol. (Emphasis added)
106Under the heading “Areas of Agreement”, the family consultant wrote (among other things):
Following the completion [of a post separation parenting course and an anger management program] the father agreed to contact the family consultant to negotiate arrangements to spend time with the children. The mother proposed supervised visits following the completion of the programs and the father agreed.
409In my opinion, the most significant of the s 75(2) factors are as follows:
(a)the husband’s income earning capacity is significantly greater than that of the wife (although it is likely that her earnings will increase when she enters the legal profession as a qualified legal practitioner – but the husband’s earning capacity is likely to remain higher than that of the wife for some years to come);
(b)the wife will continue to be primarily responsible for caring for, supervising and supporting the children, probably without any significant assistance from the husband;
(c)although the husband has met his child support obligations to June 2013, the likelihood is that, after that date, the wife will continue to struggle to obtain a realistic contribution from the husband towards the cost of maintaining the children in the form of child support; and
(d)the husband has dissipated very significant funds since the date of separation (as described above) – which funds could have and should have been available for the benefit of the family.
410When I have regard to the above matters, together with all the other matters discussed under the general heading of the s 75(2) factors, I conclude that an appropriate adjustment of the parties’ entitlements on the basis of contribution alone is to increase the wife’s entitlement by 7.5 per cent.
411It follows that the overall distribution of the property between the parties should be on the basis of 65 per cent to the wife (being 57.5 per cent for contribution plus 7.5 per cent to take account of the s 75(2) factors), and 35 per cent to the husband.
412In G & G (2004) FamCA 1179, the Full Court said (in relation to an exercise of judicial discretion such as that which I have performed in the previous paragraphs):
73.…[W]ords will often (perhaps always) fall frustratingly short of an incontestable explanation for any particular exercise of discretion – or, for that matter, for a finding by an appellate court that a particular exercise was wrong. All the relevant factors can be described, with modifiers in abundance, but still the analysis will beg the question, “Yes, but why that figure and not another?” or “Why was that the range rather than some other parameters?”
74.The deficiency is unavoidable. When there are a number of “right” results available, the explanation for the choice of one over others can never be incontestable. Nor can the reasons for saying that a result is outside a range be beyond challenge. The very nature of a discretionary exercise that ascribes mathematical consequences to a batch of actions and events amenable only to descriptive evaluation, means that it is impossible to place beyond argument the explanation for all the steps to the ultimate selection of result. ...
81.…[I]n respect of virtually every exercise of discretion, by definition, it will not be possible to deliver a judgment which excludes reasoned argument that another result was available.
413For what it is worth, I concur with the Full Court’s view as expressed in the passage from G & G quoted above. The “balancing exercise” that the Court must perform is rarely an easy or non-contentious one.
Just and equitable?
414In this case, the husband and the wife had separated well before the commencement of property settlement proceedings. It is arguable, therefore, that the express and implicit assumptions that underpinned the property arrangements that they had made during their cohabitation had been “brought to an end by the voluntary severance of the mutuality of the marital relationship”. It follows that it can be considered just and equitable that the Court make a property settlement order (which order is to be determined by applying s 79(4), including the s 75(2) factors).
415In any event, I propose to (metaphorically) step back and consider whether the outcome achieved by my consideration of the parties’ contributions and the s 75(2) factors has brought about a just and equitable result.
416The Full Court has cautioned against assessing the s 75(2) factors in percentage terms, without considering the real impact of any proposed adjustment. In other words, the real impact in money terms is “the critical issue”.[150]
[150] See Clauson (1995) FLC 92-596.
417If the wife is entitled to 65 per cent of the property pool, then she is entitled to property to the value of $799,990. The net value of property currently in her possession or under her control (including the amount of $490,000 that she received by way of partial property settlement) is $514,865.
418In the present case, the s 75(2) adjustment equates to $92,307 (being 7.5 per cent of $1,230,754). I am satisfied that such an adjustment is proper. Indeed, I am also satisfied that the adjustment is proper when regard is had to the differential between the wife’s overall entitlement (being 65 per cent) and the husband’s overall entitlement (being 35 per cent), which differential equates to 30 per cent of the property pool (or $369,226).
419To a large extent, however, the precise figures set out above are irrelevant. As was made clear at the directions hearing on 2 November 2012, the wife does not seek to have paid to her more than the $100,000 currently held in trust. Thus, if the wife is awarded the whole of the $100,000 currently held in trust, the total net value of the property contained in the property schedule that is retained by the wife amounts to $614,865, or almost exactly 50% of the total pool. This amount is well below what I have concluded is a just and equitable result from the wife’s point of view – but it is what she is prepared to accept.
420I would add that, even if I am substantially incorrect in my assessment of the parties’ respective contributions, or substantially incorrect in my assessment of the appropriate adjustment to be made taking into account the s 75(2) factors, the overall result would still entail the wife receiving the whole $100,000 presently held in trust. This is so because I would have had to find that the wife is entitled to less than 50% of the property pool before I could have considered awarding the husband any of the moneys presently held in trust.
Effect of the orders to be made
421The effect of the orders that I propose to make is as follows:
(a)The wife will retain (or retain the benefit of) –
(i)the moneys she received (by way of partial property settlement) from the sale of Property C Street: $490,000;
(ii)the moneys from the sale of Property C currently held in trust: $100,000;
(iii)the moneys in her two CBA accounts: $5,175;
(iv)the furniture, artwork, chattels and effects (including jewellery) presently in her possession: value unknown;
(v)the moneys she received pursuant to previous orders (excluding the primary orders): $68,690;
(vi)net amount of legal fees paid (add back): $3000; and
(vii)the debt to her parents: $52,000,
or net property to the value of $614,865.
(b)The husband will retain (or retain the benefit of) –
(i)the moneys paid to the husband’s parents from the net proceeds of sale of Property A : $309,800 (less the $100,000 currently held in trust);
(ii)the moneys in his CBA account: $100;
(iii)the furniture, artwork, chattels and effects (including jewellery) presently in his possession: value unknown;
(iv)the moneys he received pursuant to previous orders (excluding the primary orders): $19,990;
(v)the undisclosed funds which I have found to be in his possession or under his control: $500,000;
(vi)legal fees paid, including costs and disbursements (add back): $12,250; and
(vii)credit card liabilities: $226,251,
or net property to the value of $615,889.
422In percentage terms, and notwithstanding the conclusions that I have reached in relation to what should be an appropriate, just and equitable division of the property between the parties, the wife will be retaining approximately 50% of the pool and the husband will be retaining approximately 50% of the pool.
Orders
423The orders that I propose to make are as follows:
(a)The husband and the wife must forthwith sign all such documents (“the Payment Documents”) and do all such acts and things as shall be necessary to cause the sum of $100,000 currently held in trust pursuant to paragraph 3 of the orders of 19 September 2012 (varying paragraph 5 of the orders of 13 August 2012) to be paid to the wife, together with all interest accrued thereupon.
(b)Notwithstanding the provisions of the preceding paragraph, and the Court considering it necessary to exercise the powers of the Court under Section 106A(1) of the Family Law Act 1975 (Cth) as amended, the Principal Registrar or a Registrar of the Family Court of Western Australia be forthwith appointed to execute the Transfer Documents in the name of the husband and do all acts and things necessary to give validity and operation to the payment and the Payment Documents.
(c)The husband indemnify and keep indemnified the wife from all debts, liabilities and obligations of the wife relating to or arising out of:
(i)all loans or other advances of moneys of any nature whatsoever from the husband’s parents or either of them, including but not limited to advances on other payments in relation to Property A , Property E , Property C or any other property, business, enterprise or entity, and
(ii)all the husband’s American Express or other credit cards,
and from all actions, proceedings, costs, claims and expenses in respect thereof.
(d)Notwithstanding paragraph 4 of the orders made on 16 April 2012 and unless otherwise specified in these orders (and save for the purposes of any moneys due under these or any subsequent orders):
(i)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) in the possession of such party as at the date of these orders, and, for the sake of clarification, the husband be solely entitled to the exclusion of the wife to such furniture, artwork, chattels and effects as shall be in storage at Ezi Storage, Osborne Park at the date of these orders;
(ii)insurance policies (if any) remain the sole property of the owner named therein; and
(iii)each party indemnify and keep indemnified the other party from all debts, liabilities and obligations of the other party relating to or arising out of any item of property to which that party is entitled pursuant to these orders, and from all actions, proceedings, costs, claims and expenses in respect thereof.
(e)All extant applications for property settlement otherwise be dismissed.
(f)All extant contravention applications be struck out.
(g)Subject to the following paragraph below:
(i)the wife must file and serve any application for costs (in the form of an application in a case) and a single supporting affidavit by not later than 4.00 pm on Friday 5 April 2013 – and not otherwise;
(ii)the husband and the third party must file and serve any response to such an application (in which the husband may seek an order for costs against the wife if either is minded to do so), together with a single supporting affidavit by not later than 4.00 pm on Friday 26 April 2013 – and not otherwise; and
(iii)the wife must file any reply to the husband’s response and supporting material of the husband and/or the third party by not later than 4.00 pm on Monday 6 May 2013 – and not otherwise.
(h)Each affidavit referred to in the preceding paragraph must –
(i)deal with the issue of costs, and only with the issue of costs;
(ii)be able to be read as a “stand alone” document, in that it must not require the reader to refer to previous affidavits sworn by the party by affirming or adopting such previous affidavits and relevant passages from previous affidavits must be reproduced in the fresh affidavit;
(iii)be typed, using 1.5 line spacing, minimum 12 point font, have consecutively numbered pages and paragraphs; and have all pages securely fastened; and
(iv)contain annexures (if any) which are clearly indexed, paginated, tabbed and identified in the body of the affidavit.
(i)The issue of costs otherwise be adjourned to be listed on a date to be fixed.
(j)The listing of this matter on 25 February 2013 be vacated.
I certify that the preceding [423] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
[70] The second step being to ascertain whether it is just and equitable to make an order altering the interests of the parties in their property – bearing in mind that, in most cases, the fact that the parties have separated and are no longer living in a marital relationship should be sufficient to cause this question to be answered in the affirmative.
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