Belkin & Ming
[2023] FedCFamC2F 1630
•18 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Belkin & Ming [2023] FedCFamC2F 1630
File number(s): PAC 3506 of 2018 Judgment of: JUDGE TURNBULL Date of judgment: 18 December 2023 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – four-year De-Facto relationship – introduction of a property that is the substantial asset of the pool to be divided - global or asset by asset approach – addbacks- assessment of contributions and consideration of other matters including those set out at s75(2).
FAMILY LAW – COSTS – ICL costs.
Legislation: Evidence Act 1995 (Cth) s140
Family Law Act 1975 (Cth) Part VIIIAB, ss 90SF, 90SM (1), (3), (4)(a)-(e), 117
Cases cited:
Beck & Beck (1983) FLC 91—318
Briginshaw v Briginshaw (1938) 60 CLR 336
Clauson & Clauson (1995) FLC 92—595
Gadhavi & Gadhavi [2023] FedCFamC1A 117
Grier & Malphas [2016] FamCAFC 84
Hickey & Hickey [2003] FamCA 305
Hunter & Borman [2020] FamCAFC 250
Hutton & Hutton [2007] FamCA 1701
Jabour & Jabour [2019] FamCAFC 78
Jacobson & Jacobson (1989) FLC 92-003
Kennon & Kennon (1997) FLC 92-757
Kowaliw & Kowaliw (1981) FLC 91-092
Legal Aid ACT & Westwell [2021] FamCAFC 50
Lotta & Lotta [2017] FamCA 50
Mallet & Mallet (1984) 156 CLR 605
Mayne & Mayne [2011] FamCAFC 192
Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195
Parshen & Parshen (1996) FLC 92-720
Phillips & Phillips [2002] FamCA 300
Robb & Robb [1994] FamCA 136
Stanford & Stanford (2012) 247 CLR 108
Teal & Teal [2010] FamCAFC 120
Theodore & Theodore (No. 3) [2021] FamCA 452
Wallis & Manning [2017] FamCAFC 14
Warwick & Cutler [2016] FamCA 934
Division: Division 2 Family Law Number of paragraphs: 152 Date of last submission/s: 12 September 2023 Date of hearing: 9, 10 & 11 November 2022, 30 & 31 March 2023, 24 April 2023, 25 May 2023, 14 August 2023, and 12 September 2023. Place: Parramatta Counsel for the Applicant: Mr Finch Solicitors for the Applicant: Aaron Legal Solicitors Counsel for the Respondent: Ms Kaiti Solicitors for the Respondent: Jacqui Griffin Mobile Solicitor ORDERS
PAC 3506 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BELKIN
Applicant
AND: MR MING
Respondent
ORDER MADE BY:
JUDGE TURNBULL
DATE OF ORDER:
18 DECEMBER 2023
THE COURT ORDERS THAT:
1.
(a)Within seven (7) days of the date of this Order, both parties do all acts and things to transfer to the Respondent the funds, including any interest, held in trust with Aaron Legal, being all the sale proceeds of the property known as Q Street, Town O.
(b)Within sixty (60) days of the making of this Order the Applicant is to pay to the Respondent the sum of $120,256.40.
(c)If the Applicant does not comply with paragraph 1(b) of this Order, the Respondent has the option to have the property situated at and known as R Street, Suburb F in New South Wales (‘the Suburb F property’) — currently registered in the Applicant’s sole name — transferred into his name in accordance with paragraphs 1(d) and 1(e) of this Order.
(d)If the Respondent is entitled to have the Suburb F property transferred to him pursuant to paragraph 1(c) of this Order, then within sixty (60) days of the Applicant not complying with paragraph 1(b) of this Order, the Respondent is to:
(i)Take all steps and do all acts and things necessary to pay all monies owing and discharge of the mortgage registered against the title to the Suburb F property ("the mortgage") and
(ii)Pay to the Applicant the sum of $170,479.60.
(e)Immediately upon paragraph 1(d) having been complied with, the Applicant is to:
(i)Execute all documents necessary to allow the mortgage to be discharged; and
(ii)Execute all documents and do all things necessary to transfer the whole of her right, title and interest in the Suburb F property to the Respondent.
(f)If the Applicant does not comply with paragraph 1(b) of this Order and the Respondent does not comply with paragraph 1(d) of this Order, then the Applicant and the Respondent are to:
(i)Take all immediate necessary steps and execute all necessary documents to cause the Suburb F property to be sold by public auction and in particular:
A.Appoint a firm of solicitors as agreed between the Applicant and the Respondent to prepare the Contract for Sale of Land in respect of the Suburb F property, or failing agreement, with a solicitor as appointed to act for the Applicant in the conveyance of the Suburb F property by the then President of the Law Society of new South Wales;
B.Place the Suburb F property with a licensed real estate agent as agreed between the Applicant and the Respondent, or failing agreement, with a licenced real estate agent as appointed by the then President of the Real Estate Institute of New South Wales (or its equivalent) ("the Agent/Auctioneer") for the sale of the Suburb F property by public auction at the earliest possible date;
C.Execute all documents requested by the Agent/Auctioneer for the sale of the Suburb F property at a reserve price to be agreed between the Applicant and the Respondent, or failing agreement, at a price equivalent to the mean of two valuations by registered valuers, being members of the Australian Institute of Valuers, one obtained by and at the expense of the Applicant and one being obtained by and at the expense of the Respondent, such valuations to be made not more than two weeks apart from each other;
D.Pay equally to the Agent/Auctioneer any sums requested for commission and advertising expenses in relation to the auction;
E.Co-operate in every way with the Agent/Auctioneer in relation to the auction of the Suburb F property; and
F.Attend at the auction sale and negotiate with the highest bidder if the reserve price is not reached and accept the advice of the Agent/Auctioneer as to the acceptance of a price less than the reserve price.
G.In the event that the Suburb F property remains unsold and accept the advice of the Agent/Auctioneer as to the sale price and the method of sale until such time that the Suburb F property is sold.
(g)Upon the settlement of the sale of the Suburb F property both parties' are to do all acts and things necessary to ensure that, the proceeds of sale be paid in the following manner and priority:
(i)In payment of the amount required to discharge the mortgage;
(ii)In payment of any outstanding council and/or utility rates;
(iii)In payment of the Agent/Auctioneer's commission and auction expenses (if any) due on the sale;
(iv)In payment of legal costs on sale; and
(v)In payment of the balance be held in trust to be distributed to the parties in accordance with the method set out in paragraph 1(h) of this Order.
(h)If the Suburb F property is sold and there is a balance to be distributed pursuant to paragraph 1(g)(v) of this Order, then there be a division of all property of the parties in the proportion 70% to the Applicant and 30% to the Respondent, calculated as follows: -
WHERE:
A.= the net assets retained by the Applicant - ($207,561);[1]
[1] Superannuation and monies added back.
B.= the net assets retained by the Respondent - ($41,761);[2]
[2] Monies in trust, superannuation less tax debt.
C.= the net proceeds of the sale of the Suburb F property per sub-paragraph 1(g)(v) of this Order.
D.AND WHERE A+B+C = I;
E.the Applicant shall receive a sum equal to (I x 70%) - A, and
F.the Respondent shall receive a sum equal to (I x 30%) - B.
2.The parties' have liberty to apply in relation to the implementation of this Order, including in relation to the sale of the Suburb F property and calculation of the monies to be paid to each party from the sale proceeds to produce a 70/30% outcome.
3.Pending the payment of monies to the Respondent pursuant to paragraph 1(b) of this Order, or the transfer of the Suburb F property to the Respondent pursuant to paragraph 1(d) of this Order, or the sale of the Suburb F property pursuant to paragraph 1(f) of this Order, the Applicant will have sole and exclusive use and occupation of the Suburb F property and will be entitled to all and any rent received from the Suburb F property and will meet all outgoings relating to the Suburb F property as and when they fall due, including the payment of the mortgage (principal and interest), rates, taxes and utility expenses.
4.Subject to the provisions of this Order, each party will otherwise retain, and where necessary, transfer to the other party, all other real estate, superannuation, long service leave and/or assets of any kind held in their name and/or in their possession, or in which they hold an interest (including any present or future entitlement as a beneficiary to any estate or any chose in action).
5.Subject to the provisions of this Order, with respect to past, present, or future debts and/or liabilities not otherwise referred to in this Order for which either party is or will become liable — neither party will seek contribution from the other with respect to such debts and/or liabilities, and each party must wholly indemnify the other party in relation to the same. Further, if there is a joint debt attached to an asset to be retained by one of the parties, then the party retaining that asset will take all action to wholly release and indemnify the other party from and in relation to such debt.
6.Both parties' do all act and things and sign all necessary documents and instruments so as give full effect to the terms of this Order.
7.In the event of either party refusing or neglecting to sign any documents required to be signed to give full effect to the terms of this Order, including the necessary documents to effect a sale, transfer or assignment of relevant property, within seven days of being requested by a party, then the Registrar of the Court, pursuant to Section 106A(1) of the Family Law Act 1975 (Cth), is hereby appointed and empowered, to execute such documents in the name of the defaulting party and to do all acts and things necessary to give validity and operation to such.
8.Save for this Order, all extant property orders are discharged.
9.All extant property applications are dismissed.
10.Leave is granted for the parties to provide a copy of these orders and Reasons to the Registrar of the Child Support Agency.
The Independent Children’s Lawyers costs
11.The Independent children’s lawyer’s application for costs is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE TURNBULL
Overview
These are property proceedings commenced on 27 November 2018 by Ms Belkin — the Applicant De-facto Wife (‘the Applicant’), against Mr Ming — the Respondent De-facto Husband (‘the Respondent’). The Applicant’s original application for final orders — filed 30 July 2018 — dealt with parenting matters, with the property aspects added later to the proceedings.[3] The litigation history is lengthy with the judgment reserved on 12 September 2023, following a hearing extending over 8 days.
[3] The parenting aspects were dealt with by way of consent orders. See: Order of Judge Turnbull, (Federal Circuit and Family Court of Australia, 12 April 2022, Belkin & Ming PAC3506/2018).
The Applicant is 34 years of age, and the Respondent is 30. Their de facto relationship subsisted for four years.[4] The parties have one child of their relationship, X, born in 2017, who is now six years of age.[5]
[4] Both parties agreed the relationship commenced in 2014 and ended on 11 March 2018. The Respondent said they separated in December 2017, and then reconciled before the final separation in March 18.
[5] The parenting aspects of the litigation were regarding this child X.
The Applicant works as a professional for S Company on a full-time basis.[6] The Respondent is self-employed with his own company, T Pty Ltd, as a tradesman and sole trader.[7] The Applicant has one child from a previous relationship, M, born in 2009.[8] The Respondent has a child, U, born in 2022, after the parties separated.[9]
[6] Affidavit of Ms Belkin, 8 November 2022, [8] (‘Applicant’s affidavit’).
[7] Ibid [9].
[8] Ibid [6].
[9] Affidavit of Mr Ming, 31 October 2022 [6] (‘Respondent affidavit’).
The Applicant initially submitted that an asset-by-asset approach to the asset pool was appropriate and sought to retain a property at R Street, Suburb F (‘the Suburb F property’), together with other assets in her possession and the sale proceeds of a property at Town O, NSW of approximately $16,000.[10]
[10] Case outline of Ms Belkin, 8 November 2022 (‘Applicant’s case outline’).
By final submissions, the Applicant favoured a global approach and, due to her significant financial contributions during a short relationship — particularly the introduction of the Suburb F property, her primary care of X, income disparity and the Respondent’s non-payment of child support — sought an overall division of 80% in her favour. She hoped to retain the Suburb F property with its mortgage and any other property in her possession or under her control. She also proposed that there be no adjustment of the parties' superannuation assets.[11] While accepting that some cash amount may be payable by her to the Respondent, the exact figure was not made clear.
[11] Ibid; Belkin & Ming (Federal Circuit and Family Court of Australia, PAC3506/2018, commenced 9 November 2022): Submissions 30 May 2023. (‘Trial’)
In his Case Summary Document, the Respondent sought a 60/40 division of the parties' net assets in favour of the Applicant,[12] however, by final submissions he sought an equal division. He submitted that he made significant contributions to the acquisition and maintenance of the assets of the relationship — including the Suburb F property — such as performing significant renovations, making mortgage payments and paying outgoings.[13] He also argued that his care and support of M during the relationship, and his ongoing support of X, U and his partner, are matters that should be given considerable weight. He initially sought to retain the Suburb F property with its mortgage, the Town O property sale proceeds, T Pty Ltd, his bank accounts and pay the Applicant the sum of $29,400[14] by way of cash adjustment.[15] At trial the Respondent conceded that the Applicant should have the first option to retain the Suburb F property, provided she can re-finance the mortgage and pay him any ordered amount.[16] Like the Applicant, the Respondent argued that the Court should adopt a one pool approach, inclusive of superannuation.[17]
[12] Respondents Case Summary filed 9 November 2022 [23] (‘Respondent’s case outline’).
[13] Trial (n11): Submissions.
[14] The Respondent’s Counsel submitted that the sum could be as high as $38,000 – the amount stated was set out in the Respondent’s Response filed 8 November 2022 [10] (‘Respondent’s response’) – this resulting in a 50/50 division of the net assets.
[15] Respondent’s Response, (n14).
[16] Trial (n11): Submissions.
[17] Respondent Response (n14): The Respondent initially sought a superannuation splitting order from the Applicant’s fund of an amount reflecting 50% of the superannuation assets. This position shifted at trial to a one pool approach, with no splitting order sought.
Chronology and facts
The parties commenced their relationship around late 2013. At that time the Applicant lived in the Suburb F property, which she had purchased with her then partner in 2012 for $307,000.[18] The loan secured against the property was approximately $289,000 when the parties commenced their relationship.[19] Sometime after this, the Applicant’s former partner’s interest in the Suburb F property was transferred to her by way of property settlement and she assumed responsibility for the mortgage.[20]
[18] Applicant affidavit (n6) [11] – [12]. The applicant provided that a retrospective valuation dated early 2022, which valued the property at $330, 000 as of 1 January 2014.
[19] Ibid [13]. Trial (n11): At trial it was established that at the time of the property settlement with the former Husband, there was approximately $30, 852 in equity on the property, with an amount of $300,148 as a mortgage over the property.
[20] Exhibit H1 – Application for Consent Orders by Ms Belkin & Mr Y, signed by parties 30/04/14; Trial (n11): Cross examination.
The Applicant and Respondent commenced living together in or around early 2014[21] at the Suburb F Property.[22] At that time the Applicant worked on a casual basis, in hospitality and receiving government benefits, earning approximately $800 per week.[23] The Respondent ran T Pty Ltd as a sole trader and was sub-contracted to a company earning approximately $1,200 in cash per week.[24]
[21] Ibid [4]; Respondent affidavit (n7) [4].
[22] Applicant affidavit (n6) [22]: The parties lived at the Suburb F Property until late 2015.
[23] Ibid [17].
[24] Respondent affidavit (n9) [10]: The Applicant claimed it was $500 per week.
Aside from the Suburb F property, neither party brought substantial assets or liabilities into the relationship. The Applicant had a superannuation balance of approximately $12,000[25] and a Motor Vehicle 1, which she said was purchased by her father for $20,000. The Respondent held a superannuation balance of approximately $12,000,[26] a Motor Vehicle 2 worth $5,000, $7,000 in cash and $2,300 in a bank account.[27] The Applicant asserted that the Respondent had a personal loan of $5,000, which he denied.[28]
[25] Applicant affidavit (n6) [14].
[26] Respondent’s case outline (n12) [14].
[27] Ibid [15].
[28] Applicant affidavit (n6) [16].
Soon after cohabitation, the Applicant obtained employment as a professional for a company called ‘V Company’, where she worked full time for 10 months before being made redundant.[29] She then worked as a professional with S Company, on a full-time basis, until going on maternity leave in 2017.[30]
[29] Ibid [18].
[30] Ibid [19].
Rent / Mortgage payments
The Applicant asserted that upon cohabitation the parties agreed that the Respondent would pay her $300 per fortnight as rent and towards the cost of groceries.[31] The Respondent countered that he made contributions to half of the mortgage repayments[32] by way of payment of $1,200 per month ($300 per week), although such payments were often recorded as ‘rent’.[33] Some of these payments were made in cash. The Respondent said this was to demonstrate to the bank that the investment property was tenanted:
23.When we began living together, [Ms Belkin] told me that she was going to divorce her Husband but needed time to make arrangements. One of the arrangements was to remove him from the mortgage and refinance into her own name. In order for [Ms Belkin] to do this she requested that I deposit ‘rent’ payments into her bank account for 6 months so that she could show the bank that the investment property was tenanted. [Ms Belkin] would not have been able to rent the property as she had nowhere else to live at the time because she was estranged from her family. I did this to assist [Ms Belkin] and continued to provide her with around $300—$500 a week in cash for other household and personal expenses which she deposited into her bank account on some occasions. The withdrawals of cash is weekly throughout my transaction statements.
24.I am able to see now that [Ms Belkin] preferred cash and ‘rent’ payments so as to evade flagging Centrelink and note that the ‘rent’ was not disclosed on her taxable income for the 2014 financial year.[34]
[31] Ibid [23]: The Applicant annexed to her affidavit bank statements demonstrating such payments. The amount stated in her affidavit was $300 per week but this was amended at trial to $300 per fortnight.
[32] Respondent’s case outline (n12) [6].
[33] Ibid [16].
[34] Respondent affidavit (n8) [23] – [24].
The Respondent said that the payments were labelled ‘rent’ up until he began paying half of the newly acquired mortgage in the amount of $770 per month in 2015.
The Applicant insisted that the payments from the Respondent were for the payment of rent, and not a contribution towards the Suburb F mortgage, although she did not declare these payments as income in her taxation returns.[35] She also failed to inform Centrelink that she was receiving payments until after late 2014,[36] with the Applicant conceding at trial that the Respondent did contribute towards the Suburb F mortgage from late 2014 onwards.[37] No evidence was produced of a lease agreement to substantiate the Applicant’s position, nor did she declare the ‘rent’ payments in her taxation return. I accept the Respondent’s evidence that the payments labelled as ‘rent’ were in fact contributions to the mortgage and outgoings of the relationship generally. As will be seen, I also accept that the Respondent made generous financial contributions for the benefit of the Applicant, M and of course X — pre and post separation. This included spending his $8,000 inheritance on the family.
[35] Trial (n11): Cross examination. After the issue of s128 EA certificate the Applicant admitted to declaring to Centrelink until 2015, that the money was for the payment of board because she was receiving the Sole Parent Pension.
[36] Cross-examination of the Applicant – this evidence was given under the protection of a s128 certificate.
[37] Ibid: Cross examination.
T Pty Ltd
The Applicant asserted that she assisted the Respondent in setting up and running T Pty Ltd, which was incorporated in late 2018.[38] The Applicant claimed that she attended to administrative tasks including: setting up his accounting system, preparing contracts and documents, paying wages, preparing monthly BAS statements, preparing and issuing invoices, daily reconciling of accounts and receipts and paying bills.[39] The Applicant earned a wage from T Pty Ltd for the administrative duties she was performing.[40]
[38] Respondent’s affidavit (n9) [75].
[39] Applicant affidavit (n6) [21].
[40] Trial (n11): Cross examination: Applicant said this was an agreement between her and the Respondent.
The Respondent, however, denied that the Applicant assisted with starting or running T Pty Ltd, save for processing some pays for his employees on request:
As a sole trader I completed my own administrative duties including bookkeeping, monthly BAS statements, invoicing, paying wages and logistics. I also worked with an accountant and bookkeepers over the years when it was difficult to keep up with the administration task.[41]
[41] Respondent affidavit (n9) [11] – [12].
An issue at trial was whether the Applicant was entitled to receive income from T Pty Ltd. From 2016 – 2018, the Respondent claimed that the Applicant transferred money from T Pty Ltd’s account to her personal account without his knowledge or permission, to pay herself a wage.[42] The Applicant’s claimed that it was agreed that she would be paid for the hours she worked at T Pty Ltd,[43] but that her wage was not recorded ‘on the books’. Closer examination of the bank statements evidences a common coincidence between the amount drawn as a wage and the then repayment of a relationship related expenses. For example, in mid-2017, the Applicant receives $270 as ‘Ms Belkin Wage’ before making payments from this account towards school fees and insurance. In mid-2017, the Applicant receives $570 as ‘Ms Belkin Wage’ then makes payments towards the Town O and Suburb F mortgages on that same day.[44]
[42] Respondents case outline (n12) page 3.
[43] Trial (n11): Cross examination.
[44] Exhibit H13. Commonwealth Bank Statements for Smart Access Account in the name of Ms Belkin. Period of mid-2017.
The Respondent ultimately conceded, under cross-examination, that he knew the Applicant was taking ‘wages’ from the T Pty Ltd account and that she had full authority to use the monies to meet expenses for the family.[45] Whether or not the Applicant took more money than her hours of work justified, the Court is entitled to presume that monies received by her were for the benefit of the relationship, unless and until contrary evidence displaces that presumption.[46]The Respondent bore the evidentiary onus which was ultimately not discharged.[47] The Respondent should not view this finding as a negative for his case. Rather, the Applicant’s unrestricted use of T Pty Ltd’s funds demonstrates the trust that the Respondent had in the Applicant to meet expenses for the family and his willingness to financially contribute towards the same.
[45] Ibid: Cross examination.
[46] Parshen & Parshen (1996) FLC 92-720, 83,670; Polonius & York [2010] FamCAFC 228, [77], cited with approval in Tallowfield & Tallowfield [2018] FamCAFC 172, [59] (Kent J), directly thereafter noting at [60] that ‘the worth of any capital contribution cannot legitimately be “carried forward” mathematically as the sole determinant in assessing contributions under s 79(4) … contributions of all kinds as identified in the subsections of s 79(4), including some incapable of being measured in monetary terms, fall into the holistic assessment of contributions in s 79 property settlement determinations’.
[47] Hutton & Hutton [2007] FamCA 1701, [338] – [330]. There was no compelling evidence adduced, or raised under evidence in chief nor cross-examination, to establish that the Husband’s income, sale proceeds, superannuation, or long service leave entitlements were not placed into one of the parties’ joint accounts to meet necessary expenses of the relationship.
The Respondent also said that he did not make any contributions to his superannuation fund during the relationship. This was because he was a sole trader and that ‘[Ms Belkin] and I discussed the need for this, and we agreed that because she was earning superannuation and we had equity in both of the properties, by the age of retirement we would be financially comfortable.’[48] This resulted in the Applicant receiving the benefit of extra income whilst being able to accumulate her own superannuation, resulting in an unfairness.[49]
[48] Respondent affidavit (n9) [104].
[49] Respondent case outline (n12) [14].
In early 2015, the Respondent said that he financed Motor Vehicle 3 through T Pty Ltd, paying approximately $45,000. The Respondent asserted that he was responsible for the repayments of the loan without assistance from the Applicant.[50]
[50] Respondent’s affidavit (n9) [30]-ultimately the parties' agreed that the company had no valued that should be included in the balance sheet.
The Respondent claimed that T Pty Ltd is now in a large amount of debt with minimal assets.[51] No admissible evidence as to its value was produced during the trial.[52]
[51] Ibid [76].
[52] The company is listed as a financial resource on the balance sheet however, its value was not proved. It is just an income stream for the Respondent.
Town O Property
In late 2015 the parties purchased the property at Q Street, Town O, NSW (‘the Town O property’) for $530,000.[53] The Applicant said that she used the equity in the Suburb F property to obtain a mortgage[54] and secure the deposit of $105,000.[55] The Respondent agreed but added that they were able to re-mortgage the Suburb F property and purchase this other property because of his income.[56]
[53] Applicant affidavit (n6) [25].
[54] Ibid [26].
[55] Applicant case outline (n10).
[56] Respondent affidavit (n9) [29].
At the time the Town O property was purchased, the parties took out three loans — a loan of approximately $105,000, (the deposit for the Town O property), the loan to refinance the Respondent’s car[57] and the mortgage loan of $427,745.[58] The Applicant said that the repayments for the car loan were paid by the Respondent into the shared offset account, until the time of separation. She then paid the car loan until the outstanding balance was paid out.[59]
[57] There is dispute around the amount of the car loan. The Applicant said $51,700 and the Respondent said $45,000.
[58] Respondent affidavit (n9) [40]; Applicant affidavit (n2) [31].
[59] Applicant affidavit (n6) [28].
During the relationship, the Respondent asserted that he renovated and maintained the Town O property. This involved paying for the necessary materials and performing the necessary work:
a.In [early] 2016 I repaired damaged storm water and made purchases from [Z Company] which cost me $560 and 3 days to complete.
b.In [early] 2016 I purchased steel posts to replace the rusted ones on the veranda which cost $230 and took me 3 days to complete.
c.In [mid] 2016 I purchased doors and wardrobes for the main bedroom and installed them which cost me $1,100 and took me 2 days.
d.In [mid] 2016 I purchased and repaired fencing for $350 which took me 4 days to complete.
e.In [mid] 2016 I purchased doors and wardrobes for the two smaller rooms and installed them. The materials cost $1,450 and took me 4 days to complete.
f.In [late] 2016 I had ducted air conditioning installed which I paid for and cost $9,000.00.
g.I purchased all the materials required for the upkeep and renovations to the property due to my occupation and usually labelled these “[Town O]”, “Stock”, “[Mr Ming]”, “Home” or similar to differentiate them from other work I was undertaking.[60]
[60] Respondent’s affidavit (n9) [86(k)] – [86(q)].
The Applicant said that the parties paid equally into the Town O mortgage until the Applicant’s maternity leave pay ended. From that time the Respondent paid all the bills until separation.[61] The Respondent said that the Applicant financially contributed towards groceries, utilities, and the mortgage at the beginning of the relationship but that she gradually reduced these payments in 2015.[62] The Applicant conceded at trial that the Respondent made greater financial contributions to the Town O mortgage post separation.
[61] Applicant affidavit (n6) [32].
[62] Respondent affidavit (n9) [28].
From late 2015 until late 2020, the Applicant rented out the Suburb F property.[63] The Respondent stated that he was responsible for paying the mortgage and insurances on the Town O and Suburb F properties. This included the period after the Suburb F property was tenanted by the Respondent’s Father,[64] because the Applicant told him that her father did not always pay his rent. He clarified that after separation, ‘[Ms Belkin’s] father was paying consistently, and that [Ms Belkin] was using the money for her own personal benefit.’[65] The Applicant initially denied that the Respondent applied any funds towards the Suburb F property before or during the period it was rented.[66] The Respondent’s position was somewhat corroborated by both parties bank statements evidencing payments by the Respondent for the Suburb F property in 2016[67] and 2017.[68]
[63] Applicant affidavit (n4) [29]; Respondent affidavit (n5) [29]: The Respondent’s father was tenant from 2015 until 2018.
[64] Respondent affidavit (n9) [29].
[65] Ibid.
[66] Applicant affidavit (n6) [30]. The Applicant changed position under cross examination.
[67] Exhibit H2.
[68] Exhibit H13.
In late 2016, the Respondent received an inheritance of $8,000 following the death of his grandmother, which he used to contribute to the parties daily living expenses such as groceries, mortgage, and utility costs.[69]
[69] Respondent affidavit (n9) [91].
In 2016 the Respondent purchased Motor Vehicle 4 — selling it in 2019 and paying out the amount owed to AA Company of $56,048.28.[70]
[70] Ibid [74].
X was born in 2017. The Applicant took maternity leave before returning to work at S Company in 2018, increasing her hours as X aged.[71]
[71] Applicant affidavit (n6) [8].
From 2016 – 2017 the Respondent said that he paid for a cleaner for the Town O property,[72] was responsible for the upkeep of the lawns and landscaping on both properties,[73] contributed to M’s school fees and sporting activities[74] and was responsible for paying health insurance until late 2018.[75] At trial, the Applicant conceded that the Respondent made an overall greater contribution towards M’s school fees and towards the Private Health Fund. The Respondent’s financial assistance for M[76] confirmed his willingness to contribute to the relationship generously — somewhat contrary to the case put forward by the Applicant.
[72] Respondent affidavit (n9) [99].
[73] Ibid [100].
[74] Ibid [102].
[75] Ibid [103].
[76] The significance of the Respondents support of M will be considered under s90SF(3)(r)
Renovations of the Suburb F property
The Respondent claimed that during the relationship, he maintained the Suburb F property and completed extensive renovation work:
The Respondent’s contributions included repairs, cosmetic and structural improvements to the [Suburb F] property. Initially the respondent built a [an addition] on the back of the [Suburb F] property. During the relationship he preserved and improved [Suburb F] with [multiple renovations], landscaping of backyard. Garden beds, repairing storm water at the front and back of the house. Hence the Respondent most largely contributed to the increased value of the property with the current value of $720,000 through his workmanship, supply of materials and labour. Such that he made direct financial contributions to the acquisition, conservation and improvement of both properties.[77]
[77] Respondent’s case outline (n12) [19].
The Applicant said that the Respondent’s non-financial contributions of labour, to conduct minor renovations, were not significant.[78] No evidence was produced to establish that the Respondent’s renovation work increased the value of the property as submitted.
[78] Applicant’s case outline (n12) [2].
During the relationship, the Respondent obtained an income taxation debt for T Pty Ltd of $31,102.10, of which $21,838.27 was paid off post separation.[79] The Applicant originally contended that this debt should be apportioned up to the date of separation.[80] Ultimately the parties agreed that $9,063 should be included as a liability in the balance sheet.
[79] Respondent affidavit (n9) [106]: leaving an amount owing of $9,263.83.
[80] Applicant’s case outline (n10) [6].
Separation
The parties separated on a final basis on 11 March 2018 with the Respondent moving out of the Town O property.[81] The Applicant agreed that she did not pay rent to the Respondent after he moved out.
[81] Applicant affidavit (n6) [5].
Upon separation the Respondent stated that he retained some personal belongings, including his Motor Vehicle 5, clothes, and some household items. The rest of the household contents and a significant amount of building materials and tools remained with the Applicant. The Respondent said that he was unable to retrieve these items and that the Applicant sold them on Facebook.[82]
[82] Respondent affidavit (n9) [52]: The Respondent also said that the Applicant denied selling items and has failed to disclose the disposal of joint property.
The Applicant said that the Respondent took some items on separation.[83] She then sold several items of furniture. Some materials were picked up for free and other items were tipped.[84]
[83] Trial (n11): Cross examination.
[84] Ibid: Cross examination.
Neither party maintained regular or adequate mortgage repayments and the Town O property mortgage fell into arrears. The Applicant stated that the Respondent stopped paying the mortgage or any bills after separation, whilst she continued to do so for some time until she could no longer afford the same.[85] The Respondent made a once off payment of $9,200 towards mortgage arrears, with the assistance of his parents, however, $4,600 of this was credited against a child support debt he owed.[86] At trial, the Applicant conceded that the Respondent did make payments towards the mortgage on 1 March, 3 April and 31 August 2018.
[85] Applicant affidavit (n6) [32].
[86] Ibid [33].
The period after separation was tainted by an alleged family violence incident. In mid-2018 the Applicant said that she attended the Respondent parents’ home to retrieve Motor Vehicle 6 and return property belonging to the Respondent. The Applicant said that she was refused entry and, after a phone call with police, returned to the property she began unloading the Respondent’s belongings, when ‘[Mr Ming] walked towards me and grabbed my left wrist yanking me towards him. Mr Ming said to me words to the effect “I should fucking smash your face in”.’ The Applicant was able to separate herself and continue to unload the property. The Respondent then allegedly kicked in the taillight of a vehicle. This was reported to Suburb H Police.[87] She said she did not retrieve Motor Vehicle 6 and both parties claim that it is in the other party’s possession. The location of the motor vehicle continued to be a source of disagreement between the parties at trial.
[87] Applicant affidavit (n6) [36] – [45].
In mid-2018 the Applicant applied for an ADVO (Family Violence Order) which remained in place until mid-2019. The Applicant did not submit that her contributions were made more arduous because of the Respondent’s behaviour.[88]
[88] Kennon & Kennon (1997) FLC 92-757: Reasoning of the Full Court at [68] ‘our view is that where there is a course of violence conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, to put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties respective contributions within s79.’
Sale of Town O Property
The Town O property sold in 2020 for $600,000.[89] The balance of proceeds, after paying expenses and the outstanding loans, were $16,473, which are held in the Applicant’s solicitor’s trust account.[90] The Respondent said that at the time of the sale the mortgage on the Town O property was in arrears of $32,030. Regarding the sale of the Town O property, the Respondent’s position is that:
[Ms Belkin] intentionally wasted the [Town O] property while she diligently preserved the [Suburb F] property because the [Town O] property was in our joint name, I completed substantial works to it and I had expressed to [Ms Belkin] that I wanted to keep the [Town O] property. I made reasonable attempts to negotiate property settlement with her.[91]
[89] Applicant affidavit (n6) [7] & [30].
[90] Ibid [30].
[91] Respondent Affidavit (n9) [45].
Ultimately, during final submissions, the Respondent did not press a ‘waste argument’ in relation to this property.
Suburb F Renovations post separation
The Applicant asserted that she made improvements to the Suburb F property after separation, including renovating the bathroom for $12,000, tiling for $3,000, carpeting of bedrooms for $1,963, roof repairs for $11,700, roof restoration/painting for $2,000 and kitchen replacement for $6,750.[92]
[92] Applicant’s affidavit (n6) [46] – [52].
The Respondent said that the repairs to the bathroom were a ‘direct result of damage (sic) caused to the property by [Ms Belkin] since our separation.’[93] The Respondent alleged that the work completed was of poor quality and evidence of a ‘home job’ allegedly performed by the Applicant or her father. He called no evidence to establish that these works were inadequate but relied on a declined insurance assessment from late 2020,[94] which referred to water damage in the bathroom and the renovations that had occurred in recent years. That report from CC Pty Ltd (‘the CC Pty Ltd report’) did not evidence who carried out the works and whether they were inadequate.[95] It established that the insurance claim was refused because of a failed shower,[96] but whether this was due to inadequate workmanship was not clear. The Respondent claimed to have not known of any renovations until 2020.[97] The Respondent wanted the repair costs of the Suburb F property be added back to the property pool.[98] Having viewed the photographs in the CC Pty Ltd report, some repairs were obviously necessary. Those repair costs came from monies received by the Applicant when she refinanced the mortgage, which I consider next.
[93] Respondent affidavit (n9) [88].
[94] Ibid [90].
[95] Ibid: Annexure M-8.
[96] CC Pty Ltd Report page 1 (‘the CC Pty Ltd report’).
[97] Respondent’s affidavit (n9) [89] – [91].
[98] Ibid [93].
Refinance of Suburb F Property
A significant issue of dispute between the parties was the redrawing of funds from the mortgage by the Applicant. In early 2021, the Applicant refinanced the Suburb F property mortgage with DD Bank. The Applicant borrowed $437,123 to pay out the Suburb F mortgage of approximately $254,348 to ANZ, and a further amount of approximately $182,000 to pay for her legal fees of approximately $125,000, a car deposit of approximately $20,500,[99] and to meet necessary expenses and the cost of repairs.[100] The Respondent sought to have the full amount added back to the asset pool, including the cost of repairs because they were either unnecessary or resulted from the Applicant damaging the property. The Applicant agreed to $145,000 being added back but argued that the balance had been reasonably spent. She maintained that she had not damaged the property and the repairs were necessary.
[99] Trial (n11): Agreed figures for the mortgage on Suburb F and Cross examination of the Applicant.
[100] It is disputed as to whether amounts went to repairs to the house with an add-back argument being made by the Husband for this amount.
Disclosure
Throughout the litigation process, both parties argued that the other had not adequately disclosed information relating to the disposal of assets and general financial disclosure, particularly in relation to income.[101] The Applicant argued that the Respondent had not disclosed his taxation returns and that his income should be determined with reference to child support decisions and assessments.[102] No submission was ultimately made on behalf of either party regarding the impact of alleged non-disclosure.
[101] Respondent affidavit (n9) [45] – [46], [51].
[102] Applicant case outline (n10) [8]
Child Support
The Applicant claimed the Respondent owes her a significant amount of child support. The Respondent accepted that he had a child support debt but challenged the extent of the arrears, which is the subject of an appeal to the Administrative Appeals Tribunal.[103]
[103] Applicant affidavit (n6) [53]: $55, 772. Ultimately the parties' agreed that the arrears were no less than $31,000 and no higher than $63,578.73.
Proceedings
The Applicant filed an Application for Final Order relating to parenting matters on 30 July 2018, amending her application to include the property matters on 27 November 2018. She filed amended Applications for property matters on 16 February 2021 and 7 April 2022. The Respondent filed Amended Responses on 27 April 2021 and 8 November 2022.
On 12 April 2022, final orders were made by consent regarding the parenting aspects of the litigation,[104] save for the question as to whether the parties should contribute to the Independent Children’s Lawyers costs. I will determine that issue later in these Reasons.
[104] See: Order of Judge Turnbull in Belkin & Ming (Federal Circuit and Family Court of Australia, PAC3506/2018, 14 April 2022): Annexure “A”.
On 28 October 2022, an Order was made for the appointment of a Single Expert, Mr EE, to provide an updated valuation of the Suburb F property and in late 2022 a property valuation was conducted by the Single Expert, on the Suburb F property. The current market value was assessed to be $700,000-$720,000. The parties agreed a figure of $710,000.
The trial commenced on 9 November 2022 and continued 10 and 11 November 2022 with the Applicant giving evidence for the first two days. The trial resumed on 30 and 31 March 2023. On 31 March, the Respondent was directed to lodge and file taxation returns for 2020, 2021 and 2022, as well as cause T Pty Ltd to lodge and file its financial returns for the same periods. The Respondent was also required to provide an estimate of superannuation owed to him by T Pty Ltd since its incorporation. The trial resumed by Teams on 24 April 2023 to finalise the evidence. Final submissions commenced by MS Teams on 25 May 2023, but had to adjourn until 14 August 2023, and then to 12 September 2023, to receive information relating to the parties' appeals of the current child support assessment.[105]
[105] The Applicant has applied to increase the assessment for other child related expenses whilst the Respondent has sought to reduce his arrears of child support.
Current Circumstances
The Applicant currently resides with the children M and X[106] at the Suburb F property, and presumably continues to work for S Company.[107]
[106] There is a 5/9 parenting arrangement in place for X with Mother primary carer.
[107] There has been updated details regarding the Applicants circumstances.
The Respondent has re-partnered and currently lives with his partner, Ms FF, in Town GG, NSW. They have one child of this relationship.[108] The Respondent continues to work for T Pty Ltd.
Documents relied upon and evidence
[108] Trial (n11): Cross examination.
Applicant’s evidence
The Applicant relied upon:
·Her 3rd Amended Application filed 7 April 2022;
·Her Affidavit filed 31 October 2022;
·Her Financial Statement filed 7 November 2022;
·Affidavit of Mr EE (Single Expert Witness) filed 4 November 2022;
·Costs Notice filed 4 November 2022;
·Case Summary Document filed 8 November 2022; and
·Documents tendered from her Court book.
The Applicant largely maintained her evidence contained in her affidavit, although made several concessions once faced with information countering her position. For example, she eventually conceded that the Respondent made greater financial contributions to the payment of rates, mortgages, health care and insurance — clarifying that their contributions were equal until she began a year of maternity leave, during which she only made occasional payments. These difficultly drawn concessions added unnecessarily to the length of her cross-examination and evidenced an unwillingness to concede any matter that might advantage the Respondent. Her denial that the Respondent’s cash payments to her — as evidenced by her bank statements[109] in amounts of $150, $300, $400, and $450[110] — were his contribution towards her mortgage was not believable and detracted from the veracity of her evidence. Similarly, her claim that the Respondent did not contribute to the Suburb F property after it was rented was contradicted by both her bank statements and the Respondent’s.[111] Notwithstanding her claim to the contrary in her affidavit[112], she ultimately made this concession under cross-examination. Consequently, I will look to the more objective evidence when making determinations about matters in dispute.
[109] Exhibit W1.
[110] Trial (n11): Cross examination of the Applicant.
[111] Exhibits H2 and 13.
[112] Applicant’s affidavit (n6) [30].
The Respondent’s evidence
The Respondent relied upon:
·His Amended Response filed 8 November 2022;
·His Affidavit and exhibits filed 3 November 2022;
·His Financial Statement filed 25 October 2022;
·Costs Notice filed 24 April 2023;
·Case Summary Document filed 9 November 2022; and
·Documents tendered from his Court Book.
The Respondent’s evidence was also impacted by his inability to make any concession that may have been advantageous to the Applicant. Some of his answers were contradicted by more objective evidence. An example was that relating to Motor Vehicle 6 where both parties claimed that the other retained the same. The Respondent said, in his affidavit, that the Applicant retrieved Motor Vehicle 6 (used by M) around the date of separation — 18 March 2018. This evidence was contradicted by solicitor’s letters and text messages confirming that he still had Motor Vehicle 6 as of mid-2018.[113] He nevertheless maintained that the Applicant held the motor vehicle. His evidence was not believable and detracted from his general credibility. I am satisfied that he continues to hold Motor Vehicle 6 — which I will consider when assessing s90SF factors. I also treat the Respondent’s evidence with some caution and will look to the more objective evidence when making any determinations regarding relevant disputed facts.
[113] Applicants Court Book, pages 914 – 922.
Standard of proof
I note briefly, before continuing, that all facts in issue in these proceedings must be proved on the balance of probabilities. Dixon J, as he then was, remarked upon the standard of proof for civil proceedings in Briginshaw v Briginshaw (1938) 60 CLR 336, which remain relevant and authoritative:
The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.
A fact in issue is 'proved' if I am reasonably satisfied, on the evidence, that it is more likely than not that the fact existed or occurred in the manner ultimately determined.[114]
[114] Evidence Act 1995 (Cth) s140.
Matters agreed.
The parties' agreed upon a joint balance sheet -— exhibit J1[115] — extracted here:
[115] All figures in the document are agreed save for items 3 and 4 – being the amounts received by the Applicant which the Respondent submits should be added back to the pool. The totals as found on J1 have also been altered for the purpose of these Reasons to show an accurate calculation for each ‘total’.
Ownership Description Wife / de facto partner’s value Husband / de facto partner’s value ASSETS 1. J Funds held in trust – Aaron Legal – sale proceeds of Town O 16,474 16,474 2. W Suburb F – As at late 2022 710,000 710,000 Total $ 726,474 $726,474
ADDBACKS 3. W Redraw mortgage ($182,414) in early 2021 Suburb F for Legal Fees ($125,000) to Aaron Legal and the balance on repairs on Suburb F property ($34,490) and deposit for motor vehicle ($20,500) $125,000
20,500$176,754
4. W Disposal of Respondent’s property NIL $8,000 5. Total $ 145,500 $ 184,754
LIABILITIES 6. W Mortgage – ANZ – As at 6.11.22 419,264 419,264 7. 8. H ATO debt — 2014—2018 tax debt $9,063 $9,063 9. Total $428, 327 $428,327
SUPERANNUATION Member Name of Fund Type of Interest Wife / de facto partner’s value Husband / de facto partner’s value 10. W Super Fund 1 – As at 4.11.22 Accumulation $62,061 $62,061 11. H Super Fund 2 $9,916 $9,916 12. H T Pty Ltd $24,434 $24,434 Total $96,411 $96,411
FINANCIAL RESOURCES Ownership Description Wife / de facto partner’s value Husband / de facto partner’s value H T Pty Ltd significant unknown Total $540,058 $579,312
The total net pool is valued at $540,058 or $579,312, (subject to the determination of the add‑back issues).
Preliminary Issues
Preliminary Issue 1: Should the withdrawal from available mortgage funds and the value of items disposed of by the wife be added back to the joint asset pool?
The Respondent initially sought an add-back of $182,414, being monies withdrawn by the Applicant post-separation from the available mortgage funds. This included money for legal fees, repairs on the Suburb F property and a deposit on a motor vehicle. At trial, his position shifted to a reduced amount to $176,754. The Respondent also sought a further amount of $8,000 be added back for the disposal of his personal property.[116] The Respondent argued that the amount of $34,500 — allegedly spent by the Applicant on repairs — was not particularised — apart from $6,250 spent on the kitchen, and approximately $12,000 on the bathroom — with there being no evidence to show where the balance of the money was spent.[117] Alternatively, whilst conceding that the works to the bathroom and kitchen were undertaken, he submitted that they were unnecessary and did not add value to the Suburb F property.
[116] Trial (n11): Submissions.
[117] Ibid.
The Applicant conceded that she withdrew the amount stated but argued that only $145,500 of the funds taken should be added back — those spent on legal fees ($125,000) and a car ($20,500).[118] She claimed that the balance of $31,254 was reasonably spent on necessary repairs and renovations to the Suburb F property. The Applicant referred to paragraphs 47-52 of her affidavit, evidencing expenditure on such works including:
·renovating the bathroom for $12,000;
·Replacement of carpets in bedrooms for $1,200;
·Roof repair and downpipes, facia, gutter and eave replacement for $11,700;
·Roof restoration and painting for $2,000; and
·Replacement of the kitchen for $6,750.[119]
Totalling $33,650 approx
[118] Ibid.
[119] Applicant’s affidavit (n6) [47] – [52].
The Applicant also opposed the adding back of $8,000, being the alleged disposal of the Respondent’s personal property. She submitted that his claim was not adequately particularised and there was no evidence that the property had a value of $8,000 — her position being that the items were of nominal value. Further, even if her actions are found to have created loss, they should be considered in the context of the Respondent’s non-payment of child support.[120]
[120] Trial (n11): Submissions.
Law regarding add-backs
A marriage or de facto relationship is, in countless ways, a shared endeavour. Married or de facto couples ordinarily work together to strengthen their economic position and endure side by side the financial highs and lows of domestic life. In Kowaliw & Kowaliw (1981) FLC 91-092 (Kowaliw), Baker J summarised the Court’s view:
Marriage is for most couples an economic partnership. Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living. The reported decisions in respect of applications for settlement of property under sec. 79 of the Act are unanimous hat both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally.[121]
[121] Kowaliw & Kowaliw (1981) FLC 91-092, 76,643-76,644.
The inverse is also true, parties should generally share the financial losses incurred during their relationship.[122] This statement of general principle is, of course, guided by the overarching requirement of justice and equity in property adjustment orders.
[122] Ibid 76,644.
Where one party has, ‘prematurely and inappropriately obtained the benefit of property of the property settlement in de facto relationship cases prior to it being considered by the Court at final hearing’,[123] it is often inappropriate for the loss, caused by that party’s expenditure, to be shared by both parties. A common example, as given in Mayne & Mayne [2011] FamCAFC 192, is a party withdrawing and using joint funds for their own purposes post-separation.[124]
[123] Warwick & Cutler [2016] FamCA 934, [127] (McClelland J).
[124] Mayne & Mayne [2011] FamCAFC 192, [73] (Faulks DCJ) (‘Mayne’).
A Court faced with an application under ss 79 or 90SM may address any such injustice or inequity in three ways — taking it into account under ss 75(2)(o) / 90SF(30(r), notionally adding back the expenditure, or taking the expenditure into account as a contribution according to Grier & Malphas [2016] FamCAFC 84. Most aggrieved party’s seek that all monies be ‘added back’, so that the dollar for dollar impact of the unauthorised expenditure is borne by the other party.
The circumstances in which it may be inappropriate to share a loss are, as extracted in Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195 (‘Omacini’), below. Their Honours in that case discussed add-backs, but the categories extracted may also be addressed through other means at the Court’s discretion.[125]
[125] Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195 (‘Omacini’) [30]; Mayne (n124) [180] (Strickland J).
30.To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92—816 the Full Court said at 85,262:
11.For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92—569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,704:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the Respondent did was to distribute to himself an asset in which the Applicant had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the Respondent as a matter to which regard should be had under section 75(2). It seems to me that the Respondent has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the Respondent’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91—092 at 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.[126]
[126] Omacini (n 125) [30] (Holden, Warnick and Le Poer Trench JJ).
The remaining disputed amount sought to be added back — for monies taken from the mortgage — is $19,254.[127] Of this amount, the Applicant spent money on roof repairs, carpets, and painting[128] — all of which appears on the face of it to be reasonable, particularised, and necessary. The Applicant conceded that she only revealed that she had withdrawn the monies from the mortgage in her Costs Notice and was somewhat reticent to detail her use of the funds in the witness box. The expenditure was detailed in her affidavit and corroborated with invoices, texts, and bank statements.[129] The repairs may have assisted with the property achieving its ultimate valuation.[130] In the circumstances it is not appropriate to add back the monies spent by the Applicant on these repairs and improvements. This was a premature distribution[131] of matrimonial funds but they have been spent on an asset of the parties. I will not add back the amount of $19,254.
[127] During disclosure Ms Kaiti conceded that the expenditure on the bathroom ($12,000) and the kitchen ($6,750) were reasonable. The asset to be added back was therefore submitted to be approximately $16,000. On my calculation the figure is actually $19,234.
[128] Paragraph 61 of these Reasons.
[129] Applicant’s affidavit (n6) [47] – [52], Annexures.
[130] Valuation from Mr EE shows a value of $720,000 – valuation of Mr EE – annexure B2 to Applicant’s affidavit.
[131] As per Townsend and Townsend (1995) FLC 92—569 Nicholson CJ in Omacini & Omacini; sub nom AJO & GRO (n125).
The other amount sought to be added back by the Respondent was $8,000, being the purported value of his personal property retained and disposed of by the Applicant, post separation. The value of such second-hand items was not proved. As such I cannot find that the figure of $8,000 is the value of the items the Applicant agrees she either sold, gave away or tipped.[132] The Applicant did not explain why she disposed of the Respondent’s items in her affidavit — including the pool table which she said she sent to the tip, but I find was sold for $200-$300.[133] The Applicant accepted that she retained a ‘a hundred dollars’ for the fridge[134] but did not reveal any other amount received for the items sold. The Applicant was unconvincing in relation to her need to dispose of these items, coming across as mean and vengeful, which did not reflect well upon her. It is, however, not possible to attribute a value to the disposed goods without valuation evidence. I will consider the Applicant’s actions in disposing of the Respondent’s personal property — including that she received and retained some monies as a result — when considering s90SF(3)(r).
[132] Trial (n11): The Applicant agreed under cross-examination that she sold items - including the Respondents timber, bench seat, camper chairs, leather chair, outdoor setting, cabinets, freezer – that she tipped some of his items including his pool table and gave away some items including timber.
[133] H14 confirms the fate of the pool table.
[134] Trial (n11) Cross-examination of the applicant.
Consequently, the amount to be added back to the asset pool is $145,500. [135] The Applicant’s sale/disposal of the Respondent’s personal property will be considered under s90SF(3)(r).
Preliminary Issue 2: Should the non-superannuation and superannuation assets be included in the same pool?
[135] $145, 000 in legal fees and car.
The Applicant initially sought an asset-by-asset approach, arguing that the parties' contributions to the Suburb F Property — which she introduced to the relationship — should be considered separately to the other assets. She submitted that all other assets should form part of another pool and that there should be no separate division of superannuation assets as the Respondent did not contribute to his own or her superannuation during the relationship.[136] At trial the Applicant changed her position and sought an 80% division of all assets (including superannuation) as part of one pool, in her favour.
[136] Applicant’s case outline (n10).
The Respondent initially sought to have superannuation assessed in a separate pool[137] and a division of all other assets on a 60/40 basis in the Applicant’s favour. He sought to retain the Suburb F property, the sale proceeds of the Town O property, his interest in T Pty Ltd and to pay the Applicant a cash sum. At trial, however, the Respondent changed his position and sought a single pool approach, inclusive of superannuation, with an equal division of the net assets. To achieve this, he proposed to take over the Suburb F mortgage, receive the sale proceeds of the Town O property and pay the Applicant $29,400 (or such other calculated amount) as an adjustment. He said that he did not make significant superannuation contributions during the relationship as a sole trader and the parties' considered that the Applicant’s superannuation and the equity in the properties would enable them to be financially comfortable in retirement.[138] His position was that the Applicant benefited from this arrangement to his detriment. The Respondent did, however, accept that his company should have been paying him superannuation as its employee and, to that end, he arranged for his accountant to calculate the amount of superannuation owed to him by T Pty Ltd — resulting in $24,434 in superannuation being added to the balance sheet.
[137] Amended Response dated 8 November 2022.
[138] Respondent affidavit (n9) [104].
The Applicant holds superannuation assets valued at $62,061 and the Respondent $34,350.[139] When they commenced their relationship, they both held similarly small amounts. They built their superannuation during the relationship and post separation. The superannuation pool has a value of $96,411. Given the small difference in the value of the parties' superannuation interests and the preferred approach of the parties', I will adopt a one pool approach when determining a just and equitable division of the parties' net assets.
[139] Inclusive of the amount owed to him by T Pty Ltd. Applicant holds 64.37% of superannuation pool. Respondent holds 35.63%.
Conclusion regarding the asset pool
Given my findings regarding the add-backs and a one pool approach, the final asset pool[140] is as follows:
[140] This is a scaled down version of Exhibit J1 with figures as determined in these Reasons.
Assets J Funds held in trust – Aaron Legal – sale proceeds of Town O $16,474 W Suburb F – As at late 2022 $710,000 TOTAL ASSETS $726, 474 Superannuation W Super Fund 1 $62,061 H Super Fund 2 $9,916 H T Pty Ltd $24,434 TOTAL SUPERANNUATION $96,411 Addbacks W Redraw Mortgage $145,500 GROSS POOL $968, 385 Liabilities W Mortgage – ANZ – As at 6/11/22 $419, 264 H ATO Debt – 2018 Tax Debt $9,063 TOTAL LIABILITIES $428,327 TOTAL NET ASSET POOL $540,058
The net pool has a value of $540,058. No evidence was produced regarding the value of T Pty Ltd. As a financial resource, it provides the Respondent with an income which will be relevant to my consideration of certain factors under s 90SM(4)(d)—(g).
Property settlement in de facto cases
Preliminary matters
The parties were in a de facto relationship as characterised by the Act.[141] Their de facto relationship lasted approximately 4 years and produced one child.[142]
[141] Family Law Act 1975 (Cth), s 4AA.
[142] Ibid ss 90SB(b), 90RB.
The evidence plainly established that, at the time of the Applicant’s application, both parties ordinarily resided in Australia. I am therefore satisfied that the parties meet the geographical requirements which empower the Court to make an order with respect to their property interests.[143]
Legal principles — Property proceedings under Parts VIII and VIIIAB and the approach in Hickey and Stanford
[143] Ibid s 90SK.
Parts VIII and VIIIAB of the Act governs the scope of the Court’s power with respect to property and financial matters. The Court’s powers under ss 79(2) and 90SM (3) — regarded as ‘very wide discretion[s]’ — must be exercised according to principled reason,[144] and are constrained by a number of factors to which the Court must direct itself.[145] To this end a typical approach is that set out in Hickey & Hickey [2003] FamCA 305 (‘Hickey’)[146] and Stanford & Stanford (2012) 247 CLR 108 (‘Stanford’) comprising a number of steps:
(1)identify the parties’ existing legal and equitable property interests, liabilities, and financial resources at the time of trial, and then determine whether it is just and equitable to adjust their interests pursuant to s 79(2) or s 90SM(3);[147]
(2)consider the parties’ contributions under s 79(4)(a)-(c) or s 90SM(4)(a)-(c);
(3)consider the factors under s 79(4)(d)-(g) or s 90SM(4)(d)-(g), including, by virtue of s 79(4)(e) or s 90SM(4)(e), the ‘subjective considerations’ under s 75(2) or s 90SF(3) insofar as they are relevant;[148] and then
(4)‘stand-back’ to consider the justice and equity of the actual terms of order proposed to be made.[149]
[144] Stanford & Stanford (2012) 247 CLR 108, 122 [41] (‘Stanford’).
[145] Mallet & Mallet (1984) 156 CLR 605, 608 (Gibbs CJ), noting that the ‘very wide discretion to make such order as [the Court] thinks fit’ is conferred only ‘when [the Court] is satisfied that it is just and equitable that an order should be made’, with his Honour further stating that ‘there are some broad principles to which the Court is required to give effect, and some circumstances which it is required to take into account’ in making an order, and with Dawson J (at 647) referring to the just and equitable requirement as the ‘overriding requirement’.
[146] Hickey & Hickey [2003] FamCA 305, [30] (‘Hickey’), noting the remarks of the Full Court in Norman & Norman [2010] FamCAFC 66, [60], at which their Honours state that ‘[i]t is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result’ and that ‘[f]or all its usefulness and merit [the four-step approach] merely illuminates the path to the ultimate result’. I also note the three ‘fundamental propositions’ set out in Stanford & Stanford (n 125), 120 [36], as alternative guidance for trial judges, ultimately towards the same objective as the approach in Hickey, namely to cover off on all necessary points and criteria in pt VIII.
[147] Stanford (n144), 120 [37], noting the explanatory remarks in Lotta & Lotta [2017] FamCA 50, [283]-[284], importantly that ‘[s]uch a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist’ and that ‘the Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act’.
[148] Lotta & Lotta (n 147) [289].
[149] Teal & Teal [2010] FamCAFC 120, [70], referring to Phillips v Phillips [2002] FamCA 300 in which, at [68], their Honours discuss the importance of considering the ‘real impact’ of an order to assess whether the result is just and equitable.
Subsections 90SM(1), 90SM(3) and 90SM(4) are, like their respective equivalents in ss 79(1), 79(2) and 79(4), subject to the High Court’s approach and interpretation in Stanford.[150]
[150] Hunter & Borman [2020] FamCAFC 250, [31]-[33] (Ryan, Kent and Tree JJ).
The High Court in Stanford insists that interference with legal and equitable interests of parties must adhere to principled reason.[151] The principles to which this Court may have reference include, but are not limited to, ‘those principles which the Act itself lays down’.[152] Justice and equity, with respect to property settlement, does not admit to an exhaustive definition and it is ‘not possible to chart its metes and bounds’.[153]
[151] Stanford (n 144), 122 [41].
[152] Ibid, citing R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 257.
[153] Stanford (n 144) 120 [36].
The principles contained within the Act also accommodate the ‘stated or unstated assumptions and agreements about property interests during the continuance of the marriage’.[154] It is just and equitable, according to Stanford, for a Court to make a property settlement order if such agreements or assumptions with respect to marital property interests during the marriage have been brought to an end, which usually occurs with the end of the marriage.
By reference to the parties’ existing legal and equitable property interests, is it just and equitable to make an order pursuant to s 90SM?
[154] Ibid 122 [41].
As foreshadowed above, the law requires that any interference with legal and equitable interests adheres to principled reason.[155] The High Court in Stanford[156] observed:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the Husband and Wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the Husband and Wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the Court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
[155] Ibid 121 [41].
[156] Ibid [42].
Both parties seek a property settlement order. The significant asset of the relationship is the Suburb F property. There is no longer common use of that property, to which they have both made contributions, and both desires to retain — although the Respondent accepts that the Applicant should have the first opportunity to re-finance and retain the same. The underlying assumptions and agreements as to how the parties' held assets during the relationship ended upon separation. It is just and equitable for a property order to be made.
The parties' positions based on the asset pool as determined.
The parties' net property pool has a value of $540,058. The Applicant sought 80% of the pool — being net assets with a value of $432,056.40. She hopes to retain the Suburb F property with its mortgage, the monies in trust, the amount agreed to be added back and her superannuation[157] and pay a small cash sum to the Respondent — which I calculate (based on the asset pool as determined) to be $82,714.60.
[157] Totalling $514,771.
The Respondent sought an equal division of the pool, resulting in him retaining assets valued at $270,029. He also hopes to retain the Suburb F property and the mortgage, the monies in trust, his superannuation, his tax debt,[158] and pay the Applicant a small cash sum — which I calculate to be $62,467.
Section 90SM(4)(a)-(c) — contributions
[158] Totalling $332,496.
Section 90SM(4)(a) — direct or indirect financial contributions to property
The Full Court in Jabour & Jabour [2019] FamCAFC 78 considered the way in which contributions are to be assessed and, in doing so, considered several case authorities. The Court cited and extracted the following from Wallis & Manning [2017] FamCAFC 14 [110], in which the Applicant appealed a property order on the basis that the primary Judge did not afford her contributions sufficient weight:
The approach adopted by the parties before her Honour is repeated in the supplementary submissions filed on behalf of the respondent; it is there asserted that “the contributions of the parties would be equal aside from gifting by the Respondent’s father of significant parcels of land which remain in existence at the present point in time”. Counsel for the Applicant, in his further submissions, makes no such specific assertion but implicitly does so by relying upon the trial judge’s findings and manner of assessment. For the reasons given earlier, we reject that approach; the gifts by the Respondent’s father should be taken into account as a contribution together with the miscellany of other contributions made by each of the parties over the course of their marriage.[159]
[159] Ibid [59].
The Full Court also noted that Wallis & Manning said, consistently, that:
Yet, that approach must also ensure that the “myriad of other contributions” and the duration over which, and circumstances in which, the miscellany of other s 79(4) contributions were made is not accorded a subsidiary role. The essential s 79(4) task is for “trial judges [to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation.[160]
[160] Jabour & Jabour [2019] FamCAFC 78 [60].
The approach to assessing contributions under ss 79 and 90SM remains complex and rich with possibilities of error. In Jabour, the Full Court noted the ways in which the trial Judge erred in weighing the contributions of the parties:
As can be sees the primary judge weighed the myriad contributions made by the parties against the contribution made by the Respondent in bringing in Property A rather than treating Property A as one of the myriad contributions made.[161]
[161] Wallis & Manning [2017] FamCAFC 14 [20] in Jabour (n133) [73].
Recently, the Full Court in Gadhavi & Gadhavi [2023] FedCFamC1A 117 at [30], confirmed that the Court cannot overlook the use and impact of an asset introduced into the relationship by a party:
30.It was not in dispute that the primary judge applied proper principle in determining that the assessment of the impact of the husband’s initial contributions could only properly occur after she assessed “the totality of the parties’ contribution-based entitlement over the entirety of the marriage and post-separation” (at [210]).
31.In that respect, in Pierce v Pierce (1999) FLC 92-844 (“Pierce”), the Full Court stated at [28]:
…It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. (Emphasis added)
32.To similar effect, in Cabbell & Cabbell [2009] FamCAFC 205, the Full Court stated at [54] that in considering the parties’ contributions, it is necessary to trace the use of those assets and consider the foundation that they laid for the subsequent accumulation of wealth by the parties.
33.That is, in evaluating the parties’ contributions, it was necessary for the primary judge to have regard to the context of the husband’s initial contribution and specifically, to the opportunity that initial contribution created and the impact of that initial contribution on the subsequent wealth of the parties as at the date of the hearing. (Emphasis added)
The Applicant owned the Suburb F property at the commencement of the relationship. Initially, there was a dispute as to the extent of the equity held in the property at that time. The Respondent relied upon the value the Applicant and her former partner had placed in an application for consent orders, to argue that the equity was $29,000. The Respondent, however, conceded in final submissions that the equity in the property was $46,000, which derived from the unchallenged evidence of Mr EE, who provided a retrospective valuation of the property. The report established a value of $330,000[162] and, at the time, the mortgage was $289,000[163]— resulting in equity of $46,000. The unchallenged valuer’s evidence is the best evidence of the value of the Suburb F property in 2015 — with the report referring to several contemporary sales as a basis for his opinion. I accept his evidence and find that the equity the Applicant held in the Suburb F property in 2015 to be $46,000. The Suburb F property was used as security to enable the parties to purchase the Town O property in 2016. The extent of equity used was $105,000 — which suggests its value increased quickly after cohabitation. The property now holds equity of $290,736 (noting that the Applicant increased the mortgage post separation, which has largely been included as an add back on her side of the ledger). This property is the parties’ major asset, comprising 53.8% of the net non-superannuation pool. It was a significant contribution within the context of a short relationship.
[162] Retrospective Value as of early 2014.
[163] Applicant’s affidavit (n6) [13].
During the relationship both parties worked until X was born in 2017. The Applicant’s income was approximately $50,000 per annum,[164] and the Respondent’s $62,400 - $78,000.[165] The Applicant also received approximately $400 per week in rent from her father when he lived at the Suburb F property, after the parties moved to Town O.[166]
[164] Ibid [17]: at beginning of relationship Applicant was earning $800 per week after tax. [18] she then worked for 10 months earning $50,000 per annum. [19] Then the Applicant worked with S Company for approximately $50, 000 per annum until 2017; Respondent affidavit (n9) [16] Respondent says the Applicant was working as a hospitality worker earning approx. $400 - $600 per week and claiming single parent pension and Family Tax Benefit. [19] The Respondent says the applicant changed jobs 4 times during the relationship but continued to earn approximately 400 - $600 per week.
[165] Applicant affidavit (n6) [17]: The Applicant says that early in the relationship, the Respondent was earning approximately $500 per week cash in hand. Respondent affidavit (n9) [10]: the Respondent says that at the commencement of the relationship he ran a business earning approximately $1,200 per week by way of cash. Trial (n11): Respondent declares earnings of $78, 000 for the years 2021 and 2022.
[166] Trial (n11): Cross-examination of the Wife – it was put to her that her Father had paid over $65,000 in rent by late 2018. The father also had missed some payments.
The Applicant also worked in the Respondent’s business. The Applicant said that she paid herself an income for the hours she said she worked. The Respondent disputed the extent of her input and said that he did not authorize her to pay herself a salary or pay expenses of the relationship from the company account. I have already determined that the monies the Applicant received from T Pty Ltd were used for the benefit of the family.[167] I find it unlikely that the purported payments of wages were always commensurate with the hours the Applicant worked in T Pty Ltd, however, I have little doubt that she performed an important task in operating the books for the company and providing the business accountant with relevant information. The strict calculation and payment of BAS during the relationship, which quickly unravelled after separation when the Applicant was not performing that task, somewhat corroborates the importance of the Applicant’s involvement. The Respondent’s complete faith in her to use the company finances to meet business and personal expenses is also compelling evidence in this regard. As stated, there is no evidence to counter the presumption that the monies the Applicant received from T Pty Ltd were used for the benefit of the family.[168] These were however monies produced by T Pty Ltd. The Applicant’s liberal access to these monies to meet expenses for the family demonstrates that the Respondent was content to generously contribute to the family finances.
[167] Paragraph 17 of these Reasons.
[168] Parshen & Parshen (n46) 83,670.
Both parties made payments towards the mortgages on the Suburb F and Town O properties. Exhibit W4 confirmed that the Respondent’s contributions to Town O until late 2018 were $57,164 compared to the Applicant’s payments totalling $19,830. The Applicant’s payments dropped off only after she fell pregnant with X. The Respondent also pointed to his payment of mortgage arrears of $9,000 as a further financial contribution to the Town O property, in circumstances where he was excluded from that property. He was, however, able to credit $4,500 of that payment against his child support arrears. As such, the Applicant effectively contributed equally to the payment of the mortgage arrears. I accept, particularly given the lack of financial support, that the Applicant would have found it difficult to meet the Town O mortgage at that time.
Both parties made important financial contributions to the relationship. Both parties worked but the Respondents income was always slightly higher than the Applicant’s. He also contributed his $8,000 inheritance to the relationship. The Applicant worked up until the time of X’s birth. The Applicant also used money from T Pty Ltd (not necessarily commensurate with the hours she worked there) to meet expenses of the relationship. The Respondent continued to meet some mortgage payments for both properties, post separation.
Of central importance to creation of the asset pool was the Applicant’s introduction of the Suburb F property to the relationship — with some equity. The property quickly increased in value and was utilized to purchase the Town O property. As stated, I accept that the Respondent made financial contributions to the mortgages, the improvements of both properties and their outgoings.
Considering all this evidence, I find that both parties made important financial contributions to the acquisition and maintenance of the parties' assets during their short relationship, but the importance of the Applicant’s introduction of the Suburb F property — the major asset of the pool that is now available to divide — cannot be underestimated.
Section 90SM(4)(b) — direct or indirect non—financial contributions to property
The parties are in dispute regarding the extent of their respective indirect contributions to the renovations on Suburb F and Town O properties.
The Applicant said that she was as equally involved as the Respondent, whilst the Respondent claims the renovations were substantially left to him.[169] Given his skills as a tradesman it is likely that he undertook the significant technical work, however, I accept that the Applicant aided when she was able. Her detailed explanation of her work in the renovations to the laundry, including the laying of the new floor, supports this.[170] Although the Respondent may have naturally contributed more to such renovations — due to his skill base and ability to access materials — the Applicant was not an idle observer.
Section 90SM(4)(c) — contributions to the welfare of the family, including contributions as homemaker or parent
[169] Trial (n11): In final submissions, Ms Kaiti gave the examples of the Respondent building an extension and laying floors.
[170] Applicant’s affidavit (n6) [59].
The parties agree that the Applicant was, and remains, X’s primary carer. The Respondent did not seriously dispute the Applicant’s greater caring homemaking role during the relationship, notwithstanding the parties' engagement of a cleaner each fortnight. The Applicant’s post separation care of X has been greater than the Respondent’s — without adequate financial support.
Conclusion regarding the parties’ contributions
Considering the myriad of contributions of the parties’ pre and post separation, in the context of a short relationship, and particularly noting the importance of the introduction of the Suburb F property (the equity of which constitutes 53.8% of the net non-superannuation pool), the parties incomes and the Applicant’s role as primary carer of X, I conclude that the Applicant made a greater contributions than the Respondent — which I assess at 65/35% in her favour.
As a result of this contribution-based assessment — where the net asset pool is valued at $540,058 — the Applicant is entitled to net assets valued at $351,037.70 and the Respondent $189,020.30 — a differential of $162,017.40.
Section 90SM(4)(d)—(g), including s 90SF(3) — other factors
It is not the task of a Court with jurisdiction under Part VIII to engage in social engineering under s 79(4)(d)–(g) — that is, to serve any ‘moral’ or ‘charitable’ (but non-legal) ends outside the bounds of s 79.[171] The Full Court in Beck & Beck (No 2) (1983) FLC 91-318 explained that
[i]t is the financial consequences of all of the relevant matters that are to be taken into account and the section is so drafted to effect this purpose while excluding matters of conduct in a moral or non-financial sense.[172]
[171] Clauson & Clauson (1995) FLC 92-595, 81,912.
[172] Beck & Beck (No 2) (1983) FLC 91-318 78,167–78,168.
Whether in relation to maintenance or property settlement, the Court cannot assess or account for the s75(2) (or s90SF(3)) factors without satisfying itself that it bears upon a party’s financial circumstances.[173]
[173] Jacobson & Jacobson (1989) FLC 92-003, 77,178, at which Nygh J remarks that there ‘cannot be any doubling up as between the adjustment in capital position of the parties, which is implicit in sec 75(2) factors [in the context of s 79] and making provision for the periodic needs of a party who suffers from an inability to support [themselves] pursuant to sec 72 of the Act’. Both assessments, on his Honour’s remarks, require an assessment of the financial consequences of the factors considered. See also Sigley & Cullen (No 3) [2015] FamCA 825, [42], [105], as an example, in which Cronin J discusses the Applicant ’s health as it affected her academic studies, which in turn may have affected her employment prospects.
The term ‘earning capacity’ is defined as ‘a capacity to obtain income which could be used to provide maintenance … and not merely as current income from personal exertion or from the use of personal skills.’[174]
Section 90SM(4)(d) – the effect of any proposed order upon the earning capacity of either party to the de facto relationship
[174] Beck & Beck (n172) 166.
The Applicant continues to work as a professional for S Company, earning an estimate of $1,050 gross per week.[175] The Applicant also has fulltime care of X, who is only 5 years of age.
[175] Financial Statement of Ms Belkin filed 7 November 2022 (‘Wife’s Financial Statement’).
The Respondent operates his business T Pty Ltd earning at least $1,100 gross per week[176] — noting that the evidence suggests that his income may be higher than he states.[177] There is no evidence that he does not have the capacity to continue to earn a strong income.
[176] Financial Statement of Mr Ming filed 25 October 2022 (‘Husband’s Financial Statement’). As I will find later in these Reasons, there is evidence that the Respondent’s income is higher than set out in his Financial Statement.
[177] The Respondent’s child support income is calculated at $105,000 ($2,019 pw).
Neither of the parties proposed orders, nor my assessment of the parties’ contributions-based entitlements, impacts on either party’s income earning capacity.
Section 90SM(4)(e) – the matters referred to in subsection 90SF(3) so far as they are relevant
Section 90SF(3)(a) — the age and state of health of each of the parties
The Applicant is 34 years of age, and the Respondent is now 36 years. Neither claimed that they suffer from any infirmity preventing them from maintaining gainful employment.
Section 90SF(3)(b) — the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
In Clauson & Clauson (1995) FLC 92—595, the Full Court stated:
It has long been recognised that in most cases the most valuable “asset” which a party can take out of the marriage is a substantial, reliable, income—earning capacity: see Best and Best (1993) FLC 92—418 at 80,305.[178]
[178] Clauson & Clauson (n171).
Their Honours further remarked that:
In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails see Langford (16 January, 1995, Full Court, not reported).[179]
[179] Ibid.
The Applicant continues to work earning $1,050 per week. She said that she will increase her work load as X gets older.[180] She also receives $73.70 in Family Tax benefit and $29.50 in child support.[181] The Respondent stated in his Financial Statement that he earns $1,100 per week.[182] This, however, was at odds with a finding of the Child Support Agency that his income for his child support assessment was $123,000 per annum.[183] During submissions, the Court was informed that the Respondent was recently found to have a child support adjusted income of $105,000 per annum which equates to approximately $2,019 per week.[184]
[180] Applicant’s affidavit (n6) [8].
[181] Wife’s Financial Statement (n175).
[182] Husband’s Financial Statement (n176).
[183] Applicant’s Court Book p964.
[184] This information was provided on 14 August 2023, when updated submissions were made. Exhibit H16: AAT Decision of 22 May 2023 which decided that ‘From 1 July 2023 to 30 June 2024, Mr Ming’s adjusted taxable income is to be set at $105, 919.’
The Respondent said under cross examination that he currently works four days per week[185] and, if he was employed as a tradesman by a firm, he could earn $50-$60 per hour, eight hours per day, 5 days per week. That put his earning capacity at $2,400 per week gross if he earned $60 per hour — or $124,800 per annum. This is similar to his income for child support purposes. I accept that he has an earning capacity in that region, however as a business owner his income may vary from time to time.
Section 90SF(3)(c) — whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years
[185] Cross examination of the Respondent.
The Applicant is the primary carer for X, who currently spends alternate weekends and every second Wednesday night with the Respondent, during school terms. His holiday time with X is increasing and will culminate with half of the holidays from the Christmas School Holidays 2023/24 — as confirmed by a Court Order made 12 April 2023.[186]
Section 90SF(3)(d) — commitments of each of the parties necessary to enable them to support themselves and a child or another person that the party has a duty to maintain
[186] Order of Judge Turnbull, in Belkin & Ming (Federal Circuit and Family Court of Australia, PAC3506/2018, 12 April 2022).
The Applicant is the primary carer for both of her children — X and M. The Respondent pays child support for X, although this is currently in arrears with an outstanding child support debt.[187] The Applicant receives child support for M of $29.50 per week.[188] As stated above, the Applicant continues to work earning $1,050 per week. She also receives $73.70 in Family Tax Benefit.[189] The Respondent stated that he earns $1,100 per week working four days per week, although I have found that his income is likely higher.[190] His partner Ms FF receives no income,[191] and they have their child U to support. I accept that both parties’ incomes are largely eaten up by their necessary financial commitments.
[187] The figure of $63,578.73 is disputed as the information in Exhibit W7 – Child Support Notice to pay money directly to the Child Support Registrar- is being reviewed; Trial (n9): Both parties agree there is a child support debt which is between the amounts of $31, 000 and $63.578.73.
[188] Wife’s Financial Statement (n175) [13].
[189] Ibid.
[190] Husband’s Financial Statement (n176): Noting the differing figures in paragraphs [111] & [112] of these Reasons.
[191] Ibid.
Section 90SF(3)(e) — the responsibilities of either party to support any other person
This section is not relevant.
Section 90SF(3)(f) —the eligibility of either party for a pension, allowance or benefit under any law or superannuation fund, and the rate of any such pension, allowance or benefit being paid to either party
The Applicant receives a small amount from a Family Tax Benefit.
Section 90SF(3)(g) — a standard of living that in all the circumstances is reasonable
Both parties can maintain a reasonable standard of living by virtue of their incomes and their industrious natures.
Section 90SF(3)(h) — the extent to which a party’s earning capacity could be increased by enabling them to undertake a course of education or training or to establish themselves in a business or otherwise to obtain an adequate income
This was a short relationship, and both parties had developed the skills they use in their employment prior to the relationship commencing. Neither requires further training.
Section 90SF(3)(j) — the extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party
Both parties worked hard during the relationship. I have detailed their contributions earlier in these Reasons.
Section 90SF(3)(k) — the duration of the de facto relationship and the extent to which it has affected the earning capacity of each party
This was a short relationship. Even though the Applicant is X’s primary carer, she maintains employment and a reasonable wage. The duration of the relationship has not affected either party’s earning capacity.
Section 90SF(3)(l) — the need to protect a party who wished to continue that party’s role as a parent
Both parties will remain heavily involved in the care of X, although his primary care is with the Applicant. Both parties have other dependants.
Section 90SF(3)(m) — if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
The Respondent currently lives with his partner, Ms FF (aged 31 years), in Town GG, NSW. They have one child of this relationship U, born in 2022. The Respondent reports that Ms FF does not earn an income.[192]
[192] Husband’s Financial Statement (n 176).
There is no information before the court that the Applicant has re-partnered.
Section 90SF(3)(n) — the terms of any order made or proposed to be made under section 90SM in relation to the property of the parties
I have assessed the party’s contribution-based entitlement at 65/35 in the Applicant’s favour. Where the net asset pool is valued at $540,058 — the Applicant is entitled to net assets valued at $351,037.70 and the Respondent $189,020.30 — a substantial differential of $162,017.40.
Section 90SF(3)(o) — the terms of any order or declaration made, or proposed to be made, under this Part in relation to a party (in relation to another de facto relationship), persons in that other de facto relationship, or the property or vested bankruptcy property thereof
This section is not relevant.
Section 90SF(3)(p) — the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to a party, persons in a marriage with the first—mentioned party, or the property or vested bankruptcy property thereof
This section is not relevant.
Section 90SF(3)(q) — any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship
During the proceedings there was an ongoing disagreement as to the extent of child support arrears the Applicant was owed by the Respondent. The Child Support Agency had determined that the Respondent had a child support debt, however, he challenged the extent of that debt via an appeal to the Administrative Appeals Tribunal. This resulted in the proceedings being adjourned while waiting for the outcome of the appeal. Unfortunately, by the time that the matter came back to court on 12 September 2023, the appeal was yet to be determined. At that time a copy of a notice dated 6 August 2023 was tendered,[193] confirming the Respondent’s child support debt had increased to $63,578.73. The figure was, however, still subject to challenge. To enable this Court to reserve its decision, the parties' agreed that the Court could find that the Respondent did have a child support debt in an amount no less than $31,000 and no higher than $63,578.73.
[193] Exhibit W7.
I can, therefore, find that the Respondent’s non-payment of child support has left the Applicant with the responsibility of meeting the lion’s share of the costs associated with X’s care. The Applicant may receive the benefit of a lump sum payment[194] at some point, however, to date the Applicant has not received her full entitlement to child support from the Respondent. This finding also addresses 90SM(4)(g).
Section 90SF(3)(r) — any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
[194] Exhibit W7 included a notice form the Child Support Agency that a s72A notice had been withdrawn. Once the extent of the child support debt has been determined a further notice may issue, which can result in a further notice issuing to require monies held on behalf of the Respondent are paid to the Applicant in reduction of the child support debt.
In Robb & Robb [1994] FamCA 136 Robb the Full Court at stated:
70.In considering whether the justice of a case requires some act done by a party to be taken into account under s.75(2)(o), the Court should, we think, have regard primarily to the existence or otherwise of any legal obligations, as between the parties, in relation to the doing of that act, and also, perhaps, to ordinary notions of justice and equity between the parties.
66.In this case, the Applicant had a legal duty to maintain the children of her prior marriage, which duty had primacy over the duty of any other person, other than the children's Respondent, to so maintain them: ss.66A and 66B of the Act. The Respondent, on the other hand, had no legal duty to maintain these children at any time during the marriage because, by s.66G, a step—parent has such a duty only if he or she is a guardian of the child, or has custody of the child by an order of a Court, or a Court having jurisdiction under Part VII of the Act by order determines that it is proper for the step—parent to have that duty. None of those pre—conditions existed in this case.
67.Accordingly, in contributing to the support of these children the Applicant was merely honouring a legal obligation which she owed to the children, whilst the Respondent, in making his contribution, was acting essentially as a volunteer assisting the Applicant in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the Respondent's contribution to be taken into account under s 75(2)(o), the same cannot be said of the Applicant's contribution. In making that contribution the Applicant was in no way discharging or assisting to discharge any legal obligation of the Respondent.”[195]
[195] Robb & Robb [1994] FamCA 136 [70] – [67] (Lindenmayer, Finn and Joske JJ).
M lived with the parties during the relationship and the Respondent claims there was little financial assistance received from M’s biological father. The Respondent contributed to his living expenses, paid for him to go on holidays and for his health insurance.[196] He also paid $10,300 towards M’s school fees. After separation and until December 2018, the Respondent continued to contribute towards M’s sports lessons. These were important contributions that will be given weight. They also demonstrate that the Respondent was a generous contributor during the relationship and for a period post separation.
[196] Respondent’s affidavit (n9) [94] – [102].
The Applicant also disposed of personal property belonging to the Respondent post-separation, which was mean and unnecessary. She received a small amount of money from the sale of some items. I note, however, that I have found that the Respondent retained Motor Vehicle 6, contrary to his denials.
Other factors in 90SF
Section 90SF(3)(s) — the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship
This section is not relevant.
Section 90SF(3)(t) — the terms of any financial agreement that is binding on a party to the subject de facto relationship
This section is not relevant.
Section 90SM(4)(f) – any order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship
This section is not relevant.
Section 90SM(4)(g) — any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship
This has been dealt with when considering s 90SF(3)(q).
Conclusion regarding the matters referred to in s 90SM(4)(d)—(g)
I have considered all the matters mentioned above including the Applicant’s ongoing role as X’s primary carer — with child support owed to her — and her inferior income earning capacity. I have also had regard to matters favouring the Respondent including his care and support of M and the unjustified disposal of his property. He also has a young child and his partner to support. I assess that there should be a 5% adjustment to the Applicant for 90SM(4) factors.
Conclusion regarding the overall division of the parties' net assets
I have determined that, considering all the matters set out above, that the appropriate division of the parties' net assets is 70/30 in the Applicant’s favour. Based on the net asset pool valued at $540,058, the Applicant is entitled to assets valued at $378,040.60 and the Respondent $162,017.40 — a differential of $216,023.20.
The Applicant will have the first option to keep Suburb F. The Respondent will receive the monies in trust, his superannuation and retain his tax debt. If the Applicant retains the Suburb F property with its mortgage, the monies added back to the pool and her superannuation,[197] she will need to pay the Respondent the sum of $120,256.40.
[197] Totalling $498,297.
If the Applicant is unable to pay the Respondent what he is owed within 60 days of the date of this order, then the Respondent will have the option, within 60 days, to receive Suburb F with its mortgage and retain his superannuation, the monies in trust and his tax debt.[198] He will then need to pay the Applicant $170,479.60.
[198] Totalling $332,497.
If neither party can meet their obligations as set out, then Suburb F will be sold, and the balance proceeds divided to ensure that the overall net assets are divided on a 70/30 basis, in favour of the Applicant.
What is the just and equitable exercise of discretion?
After assessing contributions and other factors this Court must consider whether, considering those assessments and the actual property to be divided, the proposed exercise of the discretion under s 90SM is just and equitable. In Clauson, the Full Court said the following:
… that exercise is not done in isolation; it is done against the background of conclusions already arrived at on contributions, the consequence of which will be in some cases to intrude into the s. 75(2) exercise because of the dimension of the former conclusion and the total pool.
It is largely for that reason that it is ultimately necessary to stand back from the process and reach a conclusion which appears overall to be a just and equitable exercise of the discretion.[199]
[199] Clauson & Clauson (n 171), 81,911—81,912.
Standing back, I am satisfied that a 70/30 division of the available assets in the Applicant’s favour is a just and equitable outcome.
The Independent Children’s Lawyers costs
The parties' settled their parenting proceedings by consent on 12 April 2022. The remaining issue was whether either or both parties should contribute towards the ICL’s cost, calculated to be $10,136.50 or $5,068.25 each.[200]
[200] ICL Costs Notice, filed 12 October 2022.
Foster J considered the law relating to an application by an ICL for costs in Theodore & Theodore (No. 3) [2021] FamCA 452:
5.The law as to costs is well settled. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that, subject to certain qualifications, each party to proceedings shall bear his or her own costs.
6.Section 117(2) provides that if the Court is of the opinion that there are circumstances justifying it in doing so, the Court may make such order as to costs as the Court considers just.
7.The relevant considerations in relation to an order for costs are set out in s 117(2A).
8.The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section. They are the following:
a. The financial circumstances of each of the parties to the proceedings;
b. Whether any party has legal aid and the terms of any grant of aid;
c.The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers, questions, admissions of facts, production of documents and similar matters;
d.Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
e.Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f.Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g. Such other matters as the Court considers relevant.
9. Section 117(3) provides:
3.To avoid doubt, in proceedings in which an independent children’s lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children’s lawyer in respect of the proceedings.
10. Section 117(4) provides:
4.However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
a.a party to the proceedings has received legal aid in respect of the proceedings; or
b.the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
11. Section 117(5) provides:
5.In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children’s lawyer has been appointed, the court must disregard the fact that the independent children’s lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.
12.A question arises as to the actual meaning of the legislative intent for the Court to “disregard the legal aid funding” of the Independent Children’s Lawyer, because that terminology is susceptible to ambiguity.
13.As opined by Austin J in Gahen & Gahen (No 2) [2013] FamCA 936, it could conceivably mean either:
a.The Independent Children's Lawyer should be presumed to be unfunded, so as to generally incline the Court to order the parties’ contribution to the Independent Children's Lawyer’s costs; or
b.The Court should not be swayed by either the presumed ampleness or scarcity of the Independent Children's Lawyer’s legal aid funding when determining whether to order the parties’ contribution to the Independent Children’s Lawyer’s costs.
14.In De Roma & De Roma [2013] FamCA 566 Watts J explained why the former is the preferred connotation, since the purposes of the legislative provision was to protect the public purse.
15.The threshold presumption as to each party bearing their own costs has no application to the Independent Children’s Lawyer, who is not a party.
16.The law is well settled, however, that there is power under the section, subject to other statutory provisions referred to below, to make orders for or against the Independent Children’s Lawyer and the Court may make such order as to costs of the Independent Children’s Lawyer and in such proportions in relation to each of the parties as the Court considers just: (De Roma & De Roma (supra)).[201]
[201] Theodore & Theodore (No. 3) [2021] FamCA 452 [5] – [15].
Both parties accept that the ICL has a right apply for costs and that s117(4)(a) does not apply.[202] They both submitted, however, that they will suffer hardship if they are required to pay any part of the ICL’s costs and that there are no circumstances justifying an order for costs.
[202] It is noted that an order pursuant to s102NA does not meet the exception at s117(4)(a) - Legal Aid ACT & Westwell [2021] FamCAFC 50
The ICL filed written submissions in support of the application.[203] In essence it was submitted, based on the Financial Statements filed by the parties', that there is insufficient evidence to establish that either will suffer hardship if an order for costs is made.[204] The ICL did not wish to make any further submissions in the event that new financial information was revealed after the filing of her written submissions.[205]
[203] ICL Written submissions filed 12 October 2022.
[204] Ibid [2] & [4].
[205] Ibid [9].
The most relevant factor from s117(2A) appears to be the financial circumstances of the parties' — which directly relates to the question of hardship.
Both parties filed updated Financial Statements close to the trial date.[206] The Applicant evidenced that she works with a firm earning $1,153 per week, with expenditure of $1,210. She held savings of $2,337 and is owed a significant amount of child support. The Respondent’s evidenced that he earns $1,100 as the proprietor of T Pty Ltd with expenses of $1,643. His income may however be higher given the evidence of his child support income.[207] He held $4,000 in the bank and owed the Applicant by way of child support. He also financially supports his partner and their child. I am satisfied that both parties incomes are expended to meet the reasonable needs of their families.
[206] Wife’s Financial Statement (n175); Husband’s Financial Statement (n176).
[207] See paragraph 106 of these Reasons.
Both parties' will either receive monies from the other or from the sale of Suburb F. One of them is likely to have a substantial mortgage to pay. I accept that if monies are received by the Respondent from the property settlement, they may, in part, be paid to the Applicant to clear arrears of child support.
Both parties' have incurred legal fees — the Applicant $216,713[208] (with $75,369 unpaid) and the Respondent $13,569.[209]
[208] Costs Notice of Applicant, filed 24 April 2023.
[209] Costs Notice of Respondent, filed 24 April 2023: part of the Respondent’s fees have been covered by the Cross-examination Scheme.
Neither party is in a strong financial position. Given the extent of the Applicant’s legal costs, her circumstances are far more precarious than the Respondent’s. Both parties are hoping to retain Suburb F, but convincing a financial institution to provide sufficient finance will be challenging. There is a benefit to the parties' child if one of them can retain Suburb F and offer a continuity and certainty of housing. An additional payment of $5,068 for either party is likely to financially impact them and their children. Further, if the Respondent is indebted to the Legal Aid Commission, he may be less able to meet all his child support debt. I also note, to their credit, that the parties settled their parenting dispute — with the able assistance of the ICL.
Taking all the relevant matters into account I am satisfied that both the Applicant and the Respondent will suffer hardship if they are required to meet the ICL’s costs. I find, therefore, that it is not just that either party contribute any amount towards the ICL’s costs and I dismiss the ICL’s application.
I certify that the preceding one hundred and fifty-two (152) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull. Associate:
Dated: 18 December 2023
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