CALLAHAN & CALLAHAN

FEDERAL CIRCUIT COURT OF AUSTRALIA

CALLAHAN & CALLAHAN

[2016] FCCA 160

Catchwords:
FAMILY LAW – Property dispute – parties having no significant assets
at commencement – marriage lasting over 30 years – parties contributions assessed as equal – husband’s substantially greater earning capacity – extent
of wife’s ill-health disputed - case complicated by husband’s defined benefit superannuation entitlements and various related uncertainties – pool to be split 60/40 in favour of the wife – difficulty in crafting orders to reflect property division – parties to be further heard.

Legislation:

Family Law Act 1975, s.75(2)

Evidence Act 1995, s.140

Stanford v Stanford [2012] HCA 52

Applicant:

MS CALLAHAN

Respondent:

MR CALLAHAN

File Number:

MLC 8083 of 2012

Judgment of:

Judge Burchardt

Hearing dates:

1, 5 & 6 October 2015

Date of Last Submission:

15 January 2016

Delivered at:

Melbourne

Delivered on:

12 February 2016

REPRESENTATION

Counsel for the Applicant:

Ms Swart

Solicitors for the Applicant:

Kelly & Associates Family Lawyers

Counsel for the Respondent:

Mr Williams

Solicitors for the Respondent:

Lanham Lawyers Pty Ltd

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 8083 of 2012

MS CALLAHAN

Applicant

And

MR CALLAHAN

Respondent

REASONS FOR JUDGMENT

Introductory

This is a property dispute which regrettably involves very considerable interpersonal bitterness between the two parties. It will not be possible to deal with the issues that the parties have raised without a measure of criticism of each of them.
The husband proposes that there be a 50/50 division of the parties’ property. I had thought the wife’s position was that there should be a 65/35 split in her favour. In written submissions, this has been refined to wife retaining 100 per cent of the real property with the husband retaining all his superannuation. The husband, for reasons derived from his very particular superannuation circumstance, says that his 50 per cent should incorporate 90 per cent of his superannuation. There are a whole series of subsidiary issues between the parties about various extant debts and also about the boat, jointly owned by the parties and which both parties wish to retain.
For the reasons that follow, I am going to make orders that there will be a split of the parties’ property, 60 per cent to the wife and 40 per cent

to the husband.

The first preliminary issue – should there be a property order made altering the property interests of the parties

As the High Court made clear in the case of Stanford v Stanford [2012] HCA 52 the first step in property cases is to determine the legal and equitable interests of the parties and whether there should or should not be any adjustment thereto. This is one of the very many cases that necessarily obtain where the parties have ceased their marriage,

no longer conduct their financial affairs as a unit and both sides want property orders to be made. It is clear that the Court should make property orders in this instance.

Some agreed or relatively uncontroversial facts

For all the bitterness that obtains between the parties a number of facts are uncontroversial. The wife was born on (omitted) 1959 and the husband was born on (omitted) 1957. They met at university and married on (omitted) 1989. The date of separation is in issue. The husband says it was 24 May 2012 when he says the wife effectively evicted him from the former matrimonial home with only minimal belongings (he still wants some of them back and this is now agreed). The wife’s first Affidavit filed 5 September 2012 (in previous proceedings which were abandoned) put the date of separation

at 24 May 2012 but she has subsequently deposed to reconciliation following the abandonment of the first Court proceedings in late 2012. The husband denies that there was any reconciliation. There was clearly discussion about reconciliation, and I suspect that there was some intimacy between the parties at some point post-May 2012, but

it seems more probable than otherwise taking the materials as a whole that separation for all effects and purposes took place in May 2012.
The parties have three children, X born (omitted) 1990, Y born (omitted) 1993 and Z born (omitted) 1995. The two elder children are financially independent but Z is still studying at the University (omitted) and a component of the claim in the case is for adult child maintenance made against the husband by the wife.
Both the parties are avid sailors and in 2002 they bought the boat about which I heard so much during the currency of the case for $95,000. After being turned out of the family home in May 2012 the husband lived for a time with a friend but in January 2013 he decided to live

on the boat. The wife subsequently effectively made the boat uninhabitable and removed a substantial number of fittings from it.

At some point the boat was flooded causing damage. I will return

to this matter later.
The husband is the (occupation omitted) of the (employer omitted) and has a salary in excess of $150,000 per year. There is some question

as to whether he will be offered a further appointment when a current five year term runs out and/or whether he would accept the same in the event that it were offered. I will deal with this matter later.
The wife has been in employment from time to time and indeed had

a salary in excess of over a hundred thousand dollars a year within relatively recent times. The wife’s position is that she is unable

to work through ill health and that is disputed.
At this stage it is appropriate to turn to the property pool.

The property pool

The parties’ present property pool is made up realistically of two properties in Property M1 & M2, the Nissan (omitted) in the possession of the wife and the (omitted) yacht, (“omitted”).
The values attributed to the properties are set out in the final submissions made by the husband as follows:
Existing title boundaries:
·Property M1  $1,050,000
·Property M2  $900,000
·Nissan (omitted) in possession of wife    $4,000
·(omitted) yacht “(omitted)”  $30,000
Total:   $1,984,000
Altered title boundaries:
·15 Property M1         $1,200,000
·17 Property M2  $800,000
·Nissan (omitted) in possession of wife        $4,000
·(omitted) yacht “(omitted)”  $30,000
Total:   $2,034,000
Less costs of changing title (estimate)           $10,000
Resultant Total:        $2,024,000
None of those values are controversial as I understand it save for the value attributed to the boat.
There are a number of liabilities which are set out in the husband’s final submissions as:
·Husband's (omitted) MasterCard                  $15,420
·Home loan Property M1    $132,390
·Investment loans  $347,502
·Council Rates                $21,634
·Water Rates                $3,774
·Land Tax            $5,000
·Marina arrears            $8,981
·(omitted) bank personal loan  $39,617
·(omitted) Overdraft  $14,751
Total:            $589,069
A number of these alleged liabilities are disputed, whether as to their inclusion in the pool and/or as to quantum.
The parties’ superannuation is in no way an agreed issue but it does not seem to be controversial that the wife has cashed in the following:
a)(omitted) Super August 2014  $11,912
b)(omitted) February 2015  $11,657
c)(omitted) April 2015  $33,000
d)(omitted) Super                $6,991
e)(omitted) Super            $49,000
Total:   $112,560
It is the husband’s case that the wife has $37,000 in cash left from the above total and that she has admitted spending $45,000 of it on legal costs. It is submitted that either $82,000 (the $37,000 left and the $45,000 spent on legal costs) or the whole of the superannuation should be added back into the pool.
The husband’s superannuation is one of the more difficult aspects

of the proceeding. He is in a superannuation fund where he may take either a lump sum payment or a pension. One of the things most vividly felt by the wife is the fact that prior to separation she would have had a legitimate expectation that if the husband took a pension

it would, following his death, largely have reverted to her.
It seems to be agreed that as at May 2012 the husband’s superannuation was valued in accordance with the Family Law Regulations as being worth $752,677 or a pension of $49,673. This has since increased

so that as at 16 September 2015 the lump sum would be $874,687

or a pension of $63,131. When the husband reaches 60 in December 2017 he may be entitled to receive a pension of $78,327 per annum and his lump sum superannuation valuation is estimated at $973,908. It is the husband’s position that this is wholly irrelevant and that in any event he has made no election as to which of these two paths he might wish to follow. Indeed it remains uncertain as to whether or not
he would continue to work.
The valuation of the boat, and the reason why is has decreased in value, was the subject of dispute and at this point it is appropriate to turn
to the evidence in the case.

The parties’ Affidavits

I do not propose to traverse the parties’ affidavit materials at all. I have read and re-read the entirety of the file and have regard to all of it. Much of the affidavit material traverses the breakup of the marriage and the mutual allegations of what in effect are either misconduct and/or sloth thereafter.
It is clear from the wife’s material that she had it well in her mind that when the time came the husband would retire on a pension, they would rent out and/or sell their various properties and travel the world on the boat. They are both accomplished sailors. The husband’s position

is that while that was what the wife wanted, it was not necessarily what he wanted and indeed it was his opinion that this was one of the major reasons why the marriage failed.
The reason why the wife thought the marriage failed was the husband’s repeated infidelities. Her affidavit material speaks strongly of the husband’s alleged philandering and it does seem to be the case that

he has had affairs with at least two of the people with whom he has worked from time to time. The wife’s bitterness about this aspect

of the matter is not only clearly present in her affidavits. She returned to the topic on more than one occasion (not responsively to questions put to her) in her evidence in any event.
It does seem reasonably clear to me that the husband is correct when

he says that on 24 May 2012 the wife effectively kicked him out of the matrimonial home. What happened thereafter to the parties finances was predictable. From having one family unit with all such income

as the parties may have been directed to it, they promptly had two and further expenses associated with their daughter Z. Z commenced study in Sydney in 2014 although according to the husband she could have studied in Melbourne. She is resident in college and the fees are $20,000 a year, a substantial sum. The husband in fact purported to guarantee those fees but has not been able to pay them all. This has led to worry and ill health on the part of Z and considerable bitterness on the part of the wife. It is now agreed that the sum of $11,500 should be paid by the husband to the wife to reflect payments made by her on Z’s behalf.
It is sufficient to paint with a reasonably broad brush. The wife’s position is that the husband has wantonly failed to meet his obligations in respect of both the mortgages, the utility payments associated with the two properties they own, Z’s college fees, child support and the like. It is her case that she is unwell and unable to work in any meaningful way and that she will not be able to do so, if at all, until this proceeding is over.
The husband’s countervailing picture, once again painting with a broad brush, is that the wife is not nearly as ill as she says she is (if she is really ill at all), that she is idly sitting by at home refusing to work when she is well able to do so, that he has been borne under by the financial position he has found himself in and the all too numerous obligations he has had to meet.
In particular the husband points to the fact that he took out a personal loan of $50,000 to cover a number of expenses which was the subject of three withdrawals made by the wife without approval in October 2013 in the sum of $25,000.
There is substantial argument between the parties about who ought

to have received the rent from the investment property at Property M2 (“Property M2”). It seems clear that the wife has, for at least some time, had at least half of this. The husband points to the effectively rent free accommodation that the wife has had since separation and points to the amounts that he has paid towards the mortgage and the alleged non-cooperation of the wife in reducing the mortgage to an interest-free loan, something that took quite some time to arrange.
I have painted this material with what I readily concede is a very broad brush. The bickering of the parties over these aspects of their circumstances is not an attractive one and it will be in my opinion sufficient to deal in more detail with the oral evidence given

by the parties.

The evidence of the wife

The wife adopted her Affidavits and Financial Statement as true and correct. In evidence-in-chief she said that she had talked with

a financial advisor and it was her position that the boat should be sold and the funds thus realised used to pay sums the husband had not paid pursuant to Court orders (another matter of ongoing bitterness and controversy between them). She said the boat could be given

to a friend of hers in Sydney to be sold at a price of $95,000. She said that all the fittings removed from the boat were still available.
Under cross-examination by counsel for the husband the wife said that the boat was dear to both of the parties. She denied that it was the case that the husband did all the work on it and said that this was done equally. She said she was a very skilled worker and enjoyed it. She said two hands are needed to sail it. The boat was bought for $95,000 some 10 years ago.
The wife was questioned about the removal of a large number of items from the boat when the husband started to live there. Her answers were in my view incredibly non-responsive and self-serving. She conceded that she did not however consult the husband before removing the items and did not agree to their value. When exhibit R1, a valuation, was put to her she said there was a later valuation. Her evidence about what needed to be done to make the boat saleable at its best value was in my view difficult to construe.
The wife conceded that the relationship between the parties lasted

34-35 years. They met at university. She has a (qualifications omitted) and a (qualifications omitted) from (school omitted). She worked as a (occupation omitted) for the first four years of the relationship. She has worked as a (occupation omitted). She specialised in (employment omitted) and obtained a job as (occupation omitted) at a salary of $108,000 per annum. She then undertook employment for a lesser number of hours in 2010 and said although she could not recall how much she made this was a big drop from previously. After that she had some smaller projects. She was not able to concentrate on work. When it was put to her that the husband left in March 2012 she said she thought it was May 2012. She said he had been in and out so many times. He then moved to his friend.
Thereafter the wife had undertaken a project for the (employer omitted) and worked at home. She was working about 10 hours per week (duties omitted). The project went for a year but was then ceased in September 2013. She has set up a business in (business omitted). She had four to five such projects while X was living with her and one other recently.
She said all of these are small projects and her income over the last three years is modest. She is no longer registered as a (occupation omitted). She needed registration to work at (employer omitted) but is not registered now. She said she had (employment omitted) for four years 20 years ago and would have to retrain (I interpolate that since she was able to obtain registration while at (employer omitted), I think she could reasonably readily obtain it now).
The wife repeated her complaints about the husband’s failure to pay rates, child support and other benefits for the children. She said the husband paid for the yacht but did not assist the family. She did not accept that he had paid some $205,000 to the family since separation.
The wife said that the mortgage on Property M2 was $306,000 in 2012. It is interest only now and is now up to date but was not so when she took over. The bank evicted the tenants so they are a couple of months in arrears. The wife said the rent covered the two loans with the husband topping up and that she received half the rent.
The wife was questioned about the mortgage on Property M1, (“Property M1”) and did not concede that the husband’s contributions had diminished it since separation.
The wife conceded that the husband paid child support for Z until she turned 18. She did not concede however that he paid the mortgage until May 2015. She said that from 30 October 2013 he had not paid and there were no payments on loan number (omitted) for three months. Then there were sporadic payments of interest only. During this time she kept half the rent. She said she was not aware the husband had made a hardship application until she went to Court in mid-2014. She said the first she heard of an application for interest only in respect of Property M1 was at the Court hearing in December 2014 when she wanted to sell it.
The wife said that there were a number of toing and froing’s about moving to interest only but that initially it was impossible because she could not pay off the $18,000 in arrears. She was only able to do this when she had received an inheritance in February 2015. She wanted the arrears refunded to her. She did not accept that the husband had paid substantial amounts.
The wife was cross-examined extensively about a number of holidays she had undertaken. She said her holiday in (omitted) in (omitted) 2012 was free. She had another holiday in (omitted) 2012 at (omitted) to celebrate Z’s VCE. It is perhaps sufficient to say that although the wife said a number of these holidays were either wholly or partly funded by others, she has had extensive travel including a three week holiday to (country omitted) and (country omitted) in (omitted) 2013. I note that she referred to a “family tradition” of a (omitted) holiday every year.
I will return to this matter later, but it is obvious that neither of these parties and perhaps more particularly the wife has adjusted their lifestyle to their new and more straitened circumstances.
The wife was cross-examined about her treatment by Ms K, psychologist. She said she went to Ms K because the husband was unfaithful while her mother and sister were dying. She is still estranged from her Sydney sisters and scarcely able to function. She said the psychologist encourages her to keep sailing.
The wife was taken to photographs of her visit to (omitted) which would suggest at first blush that she was rather better in health than she was admitting. She said nonetheless she has a limited capacity to work and is sometimes overwhelmed. She has litigated against both her sisters and saw Ms K in part about that.
In my view far too much time was spent on the state of the wife’s health. The professional evidence is compelling.

The wife was cross-examined extensively about her relationship with a Mr E. She described him as a good friend but not her partner. She conceded that he is a very close friend.
The wife was extensively cross-examined about her bank and other records in an endeavour to suggest that she was in a more committed relationship to Mr E than she admitted. In my view it is clear from this line of questioning that the wife’s relationship with Mr E is close enough for their financial affairs at times to become intertwined.
The wife was strongly criticised for an alleged failure to produce relevant documents but in this regard at least I found her evidence convincing.
The wife was cross-examined about a deposit for $75,000 she had placed on a property in Property P. The rest is in her solicitor’s trust account and amounts to $130,000.
In respect of the $25,000 removed from the husband’s account

in October 2013, the wife said that the husband told her he had cashed in his long service leave. Their daughter was ill overseas and she needed to assist her.
In my view the detailed trawling through the financial records was not of any particular assistance to the Court.
It did emerge however that the $77,000 received on 31 October 2014 was an inheritance from the wife’s sister.
The completion date for the Property P property was said to be July 2015 and the wife bought it when she obtained money from her sister’s estate. A tree has fallen on it however and the vendor wishes to rescind the contract. The position is scarcely clear. The wife now wants to keep both Property M1 & M2 properties (both of the parties’ positions have changed from time to time).
The wife was cross-examined further about the materials she had removed from the boat. She denied maliciously damaging it and said it was not possible to say who had caused it to be flooded. She said both parties had access to it and it was sunk in 2013. The wife said that

the husband was not supposed to live on the boat because she used

it herself. The boat parts are in storage, some in her house. She said she was happy to return these items to the boat and they were in very good order.
The wife was cross-examined about Z’s health. The wife said it is suspected that Z has irritable bowel syndrome and is due to have a colonoscopy. Stress is a major contributor. The wife complained of the husband’s failure to fulfil his obligations to guarantee her fees. When challenged with an email sent to her by Z the wife’s response was entirely unconvincing.
The wife said that she had a great life because she believed what the husband told her. She had taken out an Intervention Order against him. When it was put to her that he had given her the family car she described this as “the one act of generosity.” It appears that the wife threw the husband’s phone into the ocean.
It should be noted that the above is merely a series of some aspects of the evidence that struck me as being of significance. Much of the cross-examination was of little benefit to the Court and indeed it was for that reason that I limited counsel’s time in cross-examination.

By the time I did so it had become apparent to me that the evidentiary value of what I was hearing was very much a matter of diminishing returns. The wife’s position had in my view become generally entirely clear at that point and what then followed really only confirmed what was already patent.

The evidence of Ms K

Ms K is a Clinical and Counselling Psychologist. She adopted her Affidavits as true and correct.
Under cross-examination by counsel for the husband she confirmed that she first saw the wife in November 2011. There were marital issues and a history of problems with the health of one sister and her mother and difficulties with other siblings as well. Things were getting on top of the wife. Ms K was aware of family litigation which had compounded all these issues.
Ms K conceded that there was a gap from October 2013 until 10 September 2014 during which time the wife had not consulted her.
In October 2013 the wife was seeing the husband off and on but he had a relationship with another woman. There were difficulties with finances and the wife put off legal issues until May 2014. In 2014 the wife restarted seeing Ms K. Ms K had not been given the history of the wife’s holidays. She was aware that she had been employed and was aware of her sailing.
Ms K was taken to the letter she had written to the wife’s General Practitioner (“GP”) in October 2013 (exhibit R13). The two noteworthy aspects of this letter are first that the parties were spending some holidays together and had seen one another intermittently in 2013. The second is that it was the discovery of financial activities on the husband’s part that:
“…galvanised Ms Callahan to decide to book a cheap air fare and go to visit the two daughters who are overseas at the moment.”
Ms K confirmed that the wife blames the husband for all her misfortunes and for everything that is wrong in their lives. Ms K said that the wife struggles with insight.

The evidence of the husband

I have passed over the opening made by counsel for the husband. It should be noted that the matters raised were all addressed in the comprehensive and very helpful final submissions provided.
It should be noted that it is agreed that the husband’s laptop and personal items will be returned to him.
In evidence-in-chief the husband adopted his Affidavits and Financial Statement as true and correct. He also tendered, as R15, a record of the funds he says he has paid to the benefit of the family since separation. It will be noted that the resultant total is in excess of $205,000.
Under cross-examination by counsel for the wife the husband had said he had not paid all his legal fees but had a payment plan with his solicitors. He was paying $300 per fortnight and had been paying this amount for some time. He was unaware of the total outstanding. He still owes money to friends also but cannot say how much. He says there is still approximately $5,000 owed to the University (omitted) and he is paying $1,400 per fortnight. Z is contributing to some of that figure. She has paid $2,200 of the $19,000 total that the husband has paid.
Z wanted to go to the University (omitted) but had a place at (omitted) School. The husband guaranteed her fees and said he would pay $1,000 per term. Z said she could find the balance of funding through (employment omitted) and part-time work. He agreed he had to repay the mother $11,195 that the wife had contributed to Z’s residence.
When pressed as to the date of separation, the husband said that the parties actually separated two months before May 2012. There had been more than one separation. There had been discussion about reconciliation after May 2012 but it never happened. He spent only four nights at the matrimonial home thereafter. This was in about May to June 2013 from a Monday to a Friday following which the wife asked him to leave.
The husband confirmed that the wife visited him once in (omitted) and that they met on the yacht on occasion in 2012 to 2013. They discussed reconciliation but could never resolve the issues. Noteworthily the husband said that in past separations the wife had taken all his money so he made sure he separated his money. He was quite unable to understand why the wife says separation took place in December 2013. It was a very confused time.
The husband was unable to say how much the wife could have worked. He supported her financially. He said the wife had been distressed by the breakup but was building a life. He was aware she ceased work in 2010. He said she will be able to work after this case and could work as a (occupation omitted). There is a national shortage of (occupation omitted).
The husband was cross-examined as to whether he would take a further contract from the 12^th of July 2015 to the 11^th of July 2020. He said he had made a commitment to (employment omitted) next year which was the end of the (omitted) at the (employer omitted). He did not know if he would work until he was 60.
The husband confirmed that he had had a pay rise in the last fortnight such that his salary is now $161,678 per fortnight including superannuation. It appears that after his salary sacrifice into superannuation there is about $125,000 left.
Cross-examination about the way in which payments had been made for Z, in my view, took the matter little further save that the wife had to chip in her $11,000-odd at one stage.
The husband was cross-examined in some detail about exhibit R15

(his estimate of his contribution to the family expenses). He was by no means able to answer all the matters put to him (in my view unsurprisingly given the length of time and the number of payments). The husband was cross-examined about the change of the home loans to interest only. His bitterness in this regard was palpable. He said he had been asking the wife to reduce to interest only since 2012, because this was costing him over $2,000 per month he did not in fact need to pay. He was adamant that an earlier interest only regime could have been put in place. He said:
“If we had gone to interest only we would have had

no problems.”
He said that the wife had taken over the home loans in May 2015 and had done this through her inheritance. He did not accept that he was liable for arrears on Property M1.
The husband was cross-examined about his personal loan for $50,000 which he took out in August 2013. He had no idea how the wife got $25,000 of it. He borrowed to meet needs. He had to pay various matters pursuant to Court orders and he used the sums inter alia to pay credit cards and rates. When it was put to him that rates were matters he had been ordered to pay he agreed but said that the wife took all his money.
The husband did not accept the wife’s account about the anchor of the boat being dropped overboard and it is a measure of how insignificant I regard this matter that I did not deal with it in the wife’s account above.
The husband said he wished to retain the boat but would have to start from scratch all over again. He would not work on the boat to sell it;

it was a labour of love. He conceded he was a bit emotional about

the boat. He said it was better to sell as is and he would bid for it.
As I understand it, it is agreed that there will be a refund of the first valuation in relation to land tax.
When questioned about his overdraft he said this was now about $14,000. He sought to take it into account as at the amount at separation. He could not recall the amount but said it was in his Affidavit. The wife has not worked much since separation but has been keeping rental from Property M2 for the last two and a half years in the total of about $37,000. He intends to keep Property M2.
He said the mother did not go to (country omitted) to assist a child but went to (country omitted) and (country omitted). He assumed this was funded from the personal loan (something I agree with given the letter from Ms K to the GP).
The husband confirmed it was a family tradition to have a winter holiday at (omitted) and to go to the (omitted) also. He said there was a contradiction between the terms of the psychologist’s report and what is happening in the wife’s life. He conceded that delays in bank repayments would have been stressful for the wife.
The husband said that if he took a pension it would be calculated over the average of his last two year’s salary and that his earliest date

of potential retirement was 59 years of age.
The husband confirmed that Z’s fees will cease at the end of this year. He said his pension would currently be $61,000 per annum if he took a full pension but he had lots of debts to repay.
The husband confirmed that he has paid $39,000 to his solicitors although $34,000 of that has been paid by friends whom he will need to repay. He said in all he owes about $122,000 and that counsel’s fees and valuation fees are $18,000 still to be paid on the payment plan.
He conceded that his partner, Ms B, paid $5,000 of the $34,000 paid towards his legal arrangements. He said he had no financial arrangements with Ms B and had not repaid the $5,000. He said when he repays will depend on the outcome of the trial.
His partner, Ms B, works as an (occupation omitted) and probably earns $110,000. She does not work at (employer omitted) and is 49 years old. He has a flexible living arrangement with her. Her son, 14, lives with her half the time and the husband is not usually there when the son is. He stays with her on occasion and she also stays with him but he spends many nights on his own. He has no long term plans with Ms B, who separated in about (omitted) 2012. The relationship between the husband and Ms B started later in 2012.
They have been on holidays together including a six week partly work-related trip to (country omitted). This was partly funded by the (employer omitted) in June/July 2015 and partly by the husband. Ms B paid for herself.
The husband confirmed that he proposes a 90/10 split of superannuation. He confirmed that he can cash in up to 50 per cent of his superannuation.
In re-examination the husband appeared to say that the car driven

by the wife should be transferred to him.

Findings about the credit of the witnesses

The wife, as earlier indicated, was at times incredibly unresponsive to the questions put and demonstrably self-serving in my view in the answers she gave. I will set out shortly my findings as to what actually has occurred but it is sufficient to say that I am unable wholly to accept the evidence that the wife gave.
If I have not said so already I should confirm that Ms K was an excellent witness. She was a professional witness giving evidence within her area of expertise. She was direct and responsive to the questions put to her and in my view possessed a measure of insight markedly absent from the two primary players.
The husband’s evidence at the commencement of his cross-examination was similarly unresponsive and self-serving to that of the wife but as time went on he impressed me as being more readily prepared to make concessions than was the wife. He made concessions when they were properly there to be made.

Findings about the facts

These parties met when they were young and spent over 30 years living together. They produced three children, all of whom seem to have been fairly successful in their, albeit still quite young, lives. The husband and wife plainly did plan to retire and sail the world. This plan had a very real practical chance of coming to fruition if they had stayed together. I accept that the wife saw this as a definite and not conditional outcome to the end of their working lives. Equally however, I accept that the husband did not see it that way. No doubt in part this was because his affection for his wife had diminished to the point where he was prepared to have affairs with other women. It is entirely conformable both with the fact that he did have affairs and that the relationship foundered thereafter, that the husband’s assertion that he regarded this plan to retire and sail the world as far less attractive had a lot to do with the failure of the relationship. Without professing any excessive psychological insight, it would seem entirely probable that the lack of desire to travel was not so much the problem but an exemplar of the problems that made it unattractive to the husband.
The parties separated, it would seem, in 2012 but as I have said earlier there was plainly talk of reconciliation. They spent a certain amount

of time on holiday together, and each visited the other’s premises and they also met on the boat. It seems more probable to me than otherwise that the difference between the parties as to when reconciliation took place arises from the fact that they were still meeting and discussing reconciliation up until a relatively late stage.
The wife’s behaviour at times can be impulsive (the galvanised trip to (country omitted) referred to by Ms K is but an example). It seems clear that in May 2012 she reached a point of irritation with the husband such that she effectively threw him out of the house. She was furious with him then and I think still is now.
The wife’s bitterness about the husband’s affairs not only permeated her Affidavits but her oral evidence as well. It is clear from the evidence of Ms K, given entirely fairly, that the wife blames the husband for everything and lacks insight.
This state of embitteredness has permeated the wife’s life to an extent where she has effectively been unable to work. As I find, the wife ceased full-time work in 2010 and thereafter devoted herself to really what seem to have been part-time projects of a relatively undemanding nature. This was because of course she could see the finish line with the husband’s retirement coming rapidly up over the horizon.
The wife’s bitterness when this, to her, extremely attractive vista disappeared is all too understandable. Indeed while it is plain that

the wife’s bitterness about the husband’s infidelities has achieved an,

in part, almost paralysing control over her capacity to tend to her affairs, I should not wish it to be thought that the remarks I make are intended to be pejorative or even overly critical of her. It is scarcely surprising that this woman, who obviously loved her husband over many years and might reasonably feel that she gave him the best years of her life, should have been so distraught and to an extent vengeful when his conduct led to the end of the relationship.
One area in which I do not accept the wife’s evidence, at least fully,

is the boat. The wife became aware that the husband was living on the boat. This was in fact, as he says a sensible financial option for him given his circumstances. It would have benefited both the parties

had he been able to continue to do so. The wife however either discovered (or alternatively believed in any event) that the husband was seeing other women there. The minute she knew this she disabled the boat by removing various things, albeit that the loss of the anchor overboard was just an accident. What I cannot say is whether the wife deliberately flooded the boat to cause it damage.
Although it is of course entirely consistent with the findings that I have made, that the wife in an extremity of bitterness might have sought

to sink the boat that she well knows the husband loves so dearly,

the evidence does not go far enough for a finding to that effect to be made. It is a matter of such import that one needs to bear in mind s.140 of the Evidence Act 1995. The wife’s evidence suggested that while she may not wish to keep the boat (it requires two people to sail it anyway) she nonetheless had a sentimental attachment to it. While

it seems more probable to me that she was the person who caused

it to be flooded, in my view this is more likely to have been inadvertent than otherwise. As a skilled sailor I suspect that if the wife had really sought to totally scuttle the boat she would have been able to do so.
Following separation each of the parties, in my view, failed to appreciate the new financial circumstances they were in. They continued, for example, to permit Z to attend the University (omitted) at a very much greater cost than was really necessary given the availability of a course in Melbourne. These sorts of adjustments, painful as they are, are the sort of adjustments that are forced on parties who separate. While it is obviously open to them, and laudable in many ways, to give Z the start in life she wants, the old adage about cutting your coat according to your cloth is all too obviously applicable.
Furthermore, the wife clearly delayed, one way or the other and

to whatever extent wittingly is of no moment, the move to interest only payments. Indeed if there is one thing that emerges with startling clarity from the parties’ Affidavits it is their mutual recrimination arising in each instance from a perception that the other would

not accede to their proposals made from time to time to alleviate their circumstances. This has scarcely been helped by the fact that from time to time one or other of them has sought to sell this or that property and even up until final submissions it seemed to me that the parties positions were something of a moving target.

Both of the parties have had extensive holidays and I do not accept the explanations, at least in part, as to how much this must have cost.

Both of them regard a holiday in (omitted) as a family tradition and also it seems a trip to the (omitted). These sorts of holidays are very attractive but whether are really within the financial means of these people in circumstances where they are actively complaining that their properties are going to be re-possessed is open to considerable question.
I have said little thus far about the difficulties faced by the wife

in the early 2010’s. Her mother and one of her sisters became extremely unwell and this would have been, of course, a very difficult time for her. As I understand it she nursed both her mother and her sister through final illnesses. Not only did she have these stresses (which clearly affected her capacity to work as well and perhaps

put the earlier history of part-time work into further context) she then had the misfortune that both her mother and her sister did not properly provide for her in their wills and she had to litigate. She has had

a difficult time of it on any view.
The good news is, however, that she received relatively substantial inheritances in the sense that the two estates settled with her as a result of the litigation that she commenced.
In the ultimate therefore while each of the husband and the wife have to an extent lived beyond their means, it can be shortly stated that

I reject the wife’s criticisms of the husband’s indolence in making payments to support her and most particularly Z. He has provided very substantial amounts of payments since separation and the figures in exhibit R15 in my view are untouched by the wife’s criticisms to the extent there were any advanced.
This brings us to the issue of contribution.

Contribution

The husband submitted that, given the length of the relationship,

the contributions by the parties should be taken as equal. In large part this puts in proper context the bickering and squabbling by the parties over the amounts each has paid or otherwise dealt with since separation. The wife’s position is not, as I understand it, ultimately any different. One can say the same again about her criticisms of the husband’s failure to make payments from time to time.
In the end, this was a relationship in which it is conceded that the parties had no assets of any significance at the commencement of their relationship. They were together for over 30 years and both worked and the wife had the primary child rearing responsibilities. It is instantly apparent that their contributions should be assessed as equal.

Future needs – the s.75(2) factors

Counsel for the husband described the parties as being in the twilight years of their employment. In circumstances where the husband may yet get another five year contract, which would have him working to 63 (my own age at present) the theory that he is in the twilight years of his employment is highly questionable. It is clear from the figures that I have been provided about the way in which his superannuation entitlements accrue, that should he work to the age of 63 (2020)

his superannuation entitlements, whether in terms of cash or pension, will be substantially greater than they are now. He will have until

he ceases work an ongoing income of over $160,000 to enable him

to live and re-establish himself, whether his relationship with Ms B progresses in any more significant way or not.
The husband’s health is unexceptionable and such obligations as may obtain for Z will be at an end at the end of this year.
The wife’s future employment is more difficult. I accept the husband’s assertion that there is a chronic shortage of (occupation omitted) and even if the wife has to re-train or re-qualify herself, there is nothing to suggest that she will not be able to work. The clear picture that emerged to me from her demeanour and from everything that she said, is that her life is on hold until the end of this case. If she chooses to do so, she will be able to work.
The qualification that one has to make to that broad proposition is the wife’s health. I have already said that Ms K was an excellent witness. I do not have any qualifications to offer to that proposition, but I do not entirely accept the force of her observations about the wife. The wife did not apparently need treatment between late 2013 and 2014. The photographs of her in the (omitted), while no doubt showing her on better days, are not the picture of somebody who is totally overborne and utterly unable to conduct her life at all.
The truth, as I find, lies somewhere in-between. There must be times when the wife is totally overborne by her misery. It is consistent with her lack of insight and her obsession with her husband’s infidelities that this be so. On the other hand there are clearly times when she is somewhat better and I think that it is more likely than not that when this case is over and the uncertainties of it all are removed, that she will come, possibly with the assistance of professional help from someone like Ms K, to be able to obtain employment.
Although there has been some reference to the two elder children living with the wife from time to time, the fact is that both they and, from the end of this year, Z should be financially independent and should not be a further burden upon either of their parents although I have no doubt that both parents will continue to help their children as best they may.
Looking at the future needs overall, these are not areas of precision. In all the circumstances there would ordinarily in my view be a 60 to 40 per cent division of the parties’ property including superannuation in favour of the wife. I would include superannuation given that so much of it accrued during the relationship. While it has increased significantly thereafter in money terms, the base which has enabled this increase accrued during the relationship.
The difficulty with such an outcome however is the husband’s superannuation. Accepting as I do that it cannot be said with precision at this stage exactly what his superannuation will be worth, it is clear that it will exfoliate at a significant rate and if, as the husband’s written submissions assert is possible, he continues to work to 65, he will have either a very substantial lump sum or more probably a very significant income available to him. I note that it appears that such income appears to be likely tax free although the materials filed are not perhaps entirely clear.

Subsidiary issues

The husband has sought to keep 90 per cent of his superannuation.

It may well be possible for him to do that but if he wishes to do so he will have to adjust the property settlement accordingly.
Both parties have sought outcomes in which, so to speak, they seek that the Court approach it by reference to giving the parties this or that property or this or that percentage of superannuation.
In my view the position is just not that simple. Either the parties must come to terms in respect of the division of the assets they possess or all of it must be sold and/or realised and the resultant moneys distributed and they get on with their lives.
The car possessed by the wife should be retained by her. It should

be transferred to her name if it is not already registered to her.
As I find the boat is worth $70,000, the sum assessed by the valuation if restored. If the husband wants the boat he can buy it at that price. The wife should return all items associated with the boat to the husband forthwith. As I find the husband’s emotional attachment to the boat is greater than that of the wife, so I am giving him, so to speak, the first option. If he does not want it at that price, then the wife may purchase it instead.
The next issue is the wife’s superannuation. I accept that the notion of add backs is no longer now as certain in the law as it was once thought to be. Nonetheless, bearing in mind the judgment has to deal with the parties assets as at the date of separation, in my view $87,000 of the wife’s superannuation should be included in the notional pool. The balance of the superannuation can reasonably be allotted to subsequent living expenses.
There are agreed adjustments in relation to the moneys paid on behalf of Z by the wife and the return to the husband of certain chattels.
So far as the various debts alleged occurred they should all be taken into account in a global way, that is to say made a responsibility of both of the parties and simply included in the pool accordingly.
I appreciate that the husband has run his case very much on the basis that the wife should pay various arrears of rates and so on because effectively she has abstracted funds to herself and the rent of the properties and otherwise delayed the move to interest only and so on. I am against the husband on these points. The reality is that the wife had to feed herself somehow and had but little money with which to do so until her inheritances came through.
Furthermore the wife has contributed substantial amounts towards

the mortgages and other liabilities in any event.
In the same vein however, I do not accept the wife’s claims that

the husband should be forced to repay to her debts of $79,000-odd referred to in her written submissions. I accept, first, that in a very real sense the orders made in 2012 were overtaken by events. Whether

or not the husband is technically in breach of the orders, the fact is that the parties were contemplating reconciliation although it should be noted that it has always been the husband’s position that separation took place in May 2012. His assertions that he thought the orders were no longer binding is disingenuous.
Nonetheless the fact is the husband has applied himself to paying

the mortgages and endeavouring to assist with the other liabilities

as they have accrued from time to time. The wife submits that this took place during a period where he had a very substantial income,

but the fact is he has had to borrow from various parties’ to make such payments as he has.
Both these parties as I have indicated earlier have failed to an extent

to adjust to their new and more strained circumstances. The wife’s holidays and for that matter those of the husband to (country omitted) for an extended period of time suggests that on occasions they have put their own interests first.
Furthermore, the move to interest only was bedevilled by tactical manoeuvring by both parties and certainly not just by the wife alone.
It is for these reasons that I have arrived at conclusions expressed above that the various debts should all be simply paid by the parties

out of their joint resources and not included in the pool. Of their nature they are debts of them both.
In considering the parties future needs I bear in mind the wife’s inheritances. These are of course wholly post-separation benefits but they do represent of course assets that are in her possession. The practical reality is that these amounts constitute approximately, in hard terms now, about $136,000 (plus the $75,000 deposit for the Property P property – the present availability in respect of the $75,000 is far from clear). It is not appropriate to do a dollar for dollar adjustment and indeed counsel for the husband has not suggested that these sums are included in the pool per se.

Conclusions as to the remaining matters in dispute as to the pool and consideration of how judgment is to be effected

There is still an issue I think as to what should happen to the properties in Property M1 & M2, that is to say whether they should be held as they are or changed to alter the boundaries back to conformity with their registered title. The parties’ positions have been driven by their respective desires from time to time to retain one or both of them. While there is a slightly greater financial gain in adjusting the title boundaries, any move requiring cooperation between the parties is likely only to produce further litigation. Unless the matter otherwise resolves, the properties will remain as they are.
The wife resists the inclusion of the husband’s Mastercard debt of $15,420, his personal loan of $39,617 and his (omitted) overdraft of $14,751. In my view it is clear from exhibit C9 to the husband’s Affidavit filed 24 April 2015 that his (omitted) debt as at the date of separation was $14,461. I accept his Affidavit evidence, not challenged as I recall it in cross-examination that this was spent on family up until that time and accordingly it will be included.
Likewise, the (omitted) Mastercard debt and personal loan are as I find liabilities as at the date of separation. Indeed the objection in the wife’s written submissions is that these should not be included because the husband has commanded significant income post separation and has chosen to direct it to other expenses. In other words it is implicit that these were debts of the marriage arising during the currency of the marriage but that they should be excluded as an adjustment because of the husband’s greater income in the period since separation. This argument is not in my view meritorious. It is consistent with the, in my view, rather overstated basis upon which the wife’s final submissions have been put.
The Yacht Club fees of $8,981 may well be a post separation expense. It is not clear from the materials (there are references to two mooring buoys) whether the husband and the wife benefit from the Yacht Club membership and/or whether this is interrelated with the possession of the boat about which they have both argued in any event. This matter will need to be clarified.
I believe that all other matters of dispute have been dealt with. I note that the parties had differing positions about their legal fees but save to the extent earlier indicated in relation to the wife’s legal fees I am of the view that these should both be regarded as a post separation expense that the parties simply have to wear themselves.
This brings us to what on earth can be done to actually resolve the matter. The husband’s superannuation is now worth a lump sum as at 16 September 2015 of $874,687 (husband’s written submissions at paragraph 2). Although ordinarily it would be taken into consideration as at the date of separation, the reality is as I have earlier indicated that the availability of this amount (which of course will only increase) is a very significant consideration in regard to the capacity of the husband to re-establish his life for the future. I have no idea what quite the practical effect of splitting the superannuation 60/40 in the wife’s favour would be in terms of where it would leave the husband’s capacity to rebuild his superannuation between now and when he retires. There appears to be a suggestion that he might be able to recontribute some or all of such sum as might be diminished by a splitting order made now.
It is important that the proceeding be brought to an end and at the present time what I am minded to do is to take the pool as it presently stands (including the husband’s superannuation) which in the particular circumstances in this case should indeed be assessed as it now stands, and simply add the figures up and divide them 60/40. I do not know if either of the parties’ positions can be accommodated within that methodology. The matter is rendered yet more difficult for some of the figures the parties have put forward are either different (the rates figures) or simply do not readily correlate.
Because of the way in which the case has proceeded and in which the issues have raged over various areas that have been difficult properly to delineate, and because my conclusions do not really fit the case that either said can, I will give the parties an opportunity to consider these reasons. I will hear from them thereafter as to what orders should be made.

I certify that the preceding one hundred and forty-two (142) paragraphs are a true copy of the reasons for judgment of Judge Burchardt.

Date: 12 February 2016

[2016] FCCA 160

12 February 2016

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