Carevetta and Carevetta

[2007] FamCA 667

FAMILY COURT OF AUSTRALIA

CAREVETTA & CAREVETTA [2007] FamCA 667

FAMILY LAW - CHILDREN - With whom a child shall live
FAMILY LAW - PROPERTY - Settlement in relation to marriage - Disclosure

Family Law Act 1975 (Cth)

Reserved Judgment

Applicant: Mr Carevetta

Respondent: Mrs Carevetta

File Number: MLF 1033 of 2005

Date Delivered: 18 May 2007

Place delivered: Melbourne

Judgment of: Carter J

Hearing Date: 19 & 20 February 2007 with
written submissions concluding 23/3/2007.  Further mention 20/4/2007

Representation

Counsel for the Applicant Mr Glover

Solicitor for the Applicant: McCarthy & Associates

Counsel for the Respondent: Ms Shiff

Solicitor for the Respondent: Lennon Settle Mazzeo

Orders

Children’s Orders

By Consent It Is Ordered:

1. That the children J born in July 1989, E born in March 1991 and C born in December 1992 (“the children”) live with the wife.

2. That the wife be solely responsible for the day-to-day care, welfare and development of the children.

3. That the question of the time the children are to spend with the husband and communicate with him be reserved.

Property Orders

It is Further Ordered

1. That within seven days of this day McCarthy Legal Trust pay to the Child Support Registrar from the moneys and interest accrued thereon which are held in Trust pursuant to orders of this Court made 4 July 2005:

   (4.1)the sum of $33,177.17 if the balance of moneys held in trust exceeds that amount;  or

   (4.2)the balance of moneys held in trust if such balance is equal to or less than the sum of $33,177.17.

2. That within sixty days from this day the wife pay the husband an amount calculated by deducting the payment referred to in par 4 hereof from the sum of $275,000.

3. Contemporaneously with the payment of the sum referred to in par (5) hereof the husband sign all documents and do all things necessary to transfer to the wife free of all encumbrances all his right, title and interest in the former matrimonial home situate at and known as T property, being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the Home”).

4. That without limiting par (6) hereof the husband shall, at his expense, cause the removal of any caveat lodged pursuant to a charge provided by the husband over the Certificate of Title of the Home.

5. If the moneys referred to in par (5) hereof are not paid within the time stipulated or such further time as may be agreed the Home is to be forthwith offered for sale by a method and at a price agreed, and if not agreed, then by public auction without undue delay at a reserve price to be set by the auctioneer and the proceeds of sale are to be disbursed so as:

   (8.1)to pay all costs related to the sale and commission on sale;

   (8.2)to pay 23 per cent of the balance remaining to the husband provided that from the husband’s share there be deducted the payment referred to in par (4) hereof and the amount of any liability for any charge provided by the husband over the Certificate of Title of the Home and any costs and expense to cause the removal of any caveat lodged pursuant thereto;  and

   (8.3)to pay the balance remaining to the wife.

6. That the wife forthwith make available for collection by the husband the “[F] Clock”, the “Antique credenza”, the “ceramic vase” and the “[C]” picture.

7. Subject to par (9) hereof, that the husband transfer to the wife at the expense of the wife all his right, title and interest in:

   (10.l)  the chattels situated at the Home;

   (10.2) the Mercedes Benz motor vehicle registration No. … ;  and

   (10.3) the unregistered Mazda 323 motor vehicle.

8. That the husband retain for his own use and benefit his interest (if any) in:

   (11.1)the Porsche motor vehicle Registration No. … ;

   (11.2)the property situate at V being the whole of the land more particularly described in Certificate of Title Volume … Folio … ;

   (11.3)P Pty Ltd;

   (11.4)A Q Pty Ltd;

   (11.5)GQ Pty Ltd;

   (11.6)L Pty Ltd;

   (11.7)PE Pty Ltd;

   (11.8)S Pty Ltd;

   (11.9)A Pty Ltd;

   (11.10)G Pty Ltd;

   (11.11)such other business entity of whatsoever nature and kind in which the husband has an interest.

9. That the husband be liable for and indemnify the wife against all payments in respect of all liabilities of whatsoever nature and kind and whensoever arising in respect of any entity which the husband owns or in which he has an interest or any asset retained by him pursuant to these orders.

10. That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent order.

    (13.1)each party be solely entitled to exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these orders, the furniture, personal possessions and like chattels in the Home (save for the items referred to in par (9) hereof) being deemed to be in the possession of the wife);

    (13.2)each party forego any claim they may have to any superannuation benefit belonging to or earned by the other;

    (13.3)insurance policies remain the sole property of the sole beneficiary named therein;

    (13.4)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;

    (13.5)any joint tenancy of the parties in any real or personal estate is hereby expressly severed;

    (13.6)that the parties hold their interest in any real or personal property upon trust pursuant to these orders.

11. That the parties have liberty to apply for machinery orders with respect to the sale of the Home.

12. That all documents produced on subpoena be returned at the expiration of 35 days from this day to the person or institution providing the same.

13. That all documents tendered be returned to the solicitor for the party tendering the same on condition that they be returned to the Court, if required.\

14. That save for any applications for costs, all applications be otherwise dismissed and the matter removed from the list of cases awaiting determination.

IT IS CERTIFIED

1. That pursuant to r 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

The Court Notes

Subsequent to the hearing the wife agreed to provide to the husband all four items requested by him.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 1033  of 2005

MR CAREVETTA

Applicant

and

MRS CAREVETTA

Respondent

REASONS FOR JUDGMENT

(Reserved)

1. This is the determination of competing applications for alteration of interests in property consequent upon the breakdown of the marriage of the parties.  That marriage has now been dissolved but it will be convenient, nonetheless, to continue to refer to the parties as “the husband” and “the wife”.  There were also children’s issues which were the subject of agreement.

Short History

1. The husband was born in Italy in April 1945 and was aged 61 at the date of the trial.  The wife was born at W in Victoria in August 1958 and was aged 48 at the time of the trial.

2. The parties married on 25 April 1982.  This was the first marriage for the wife.  The husband had been previously married and had two sons of his earlier marriage.  According to the Case Summary document filed on behalf of the husband, his older son as born in 1973 and his younger son was born in 1974.

3. There were three children born of the parties.  J is 17, having been born in July 1989.  E was aged 15 at the time of the trial, having been born in March 1991, C is 13, having been born in December 1992.

4. According to the wife’s evidence the parties separated in mid-1995 and were divorced, on her application, on 11 April 2006.  The husband’s evidence was that the parties separated in about the middle of 1996.  However, it is also his evidence that the marriage was dissolved by decree nisi made on 11 April 2006.  All three children remained living with the wife at separation (whenever it occurred) and have continued to do so.

5. J had been attending S School in G but left that school at the end of 2004.  She completed Year 11 at C School in 2006 and at the time of trial was working on a part-time basis with a food outlet.  She was proposing to undertake a TAFE course in July in the sales area.  She had applied for work with a car manufacturer and apparently had had a successful interview and was waiting for an opening with that company.  At the time of the trial E and C were both students at S School at G, E being in Year 11 and C being in Year 9.

6. At the time of separation the wife and children remained living in the former matrimonial home.  The wife has not repartnered.

7. As from 1993 or 1994 the husband has had various business interests in Queensland which he continued following separation.  He lived in Queensland for most of the time, although he did visit the wife and the children in Victoria at the former matrimonial home from time to time.  He returned to live in Melbourne towards the end of 2006 and at the time of the trial was living at the home of his parents in B.  The husband has not repartnered.

Proceedings

1. The wife commenced these proceedings on 7 March 2005 when she filed an application for final orders.  The husband responded on 29 April 2005.

2. On 3 June 2005 the wife filed a Form 2 Application in a Case.  She sought orders in relation to the children but also sought orders relating to financial matters.  She sought that the husband be restrained until further order from transferring, gifting, mortgaging, encumbering, alienating or otherwise dealing with any assets registered in his name, or assets within his power and control.  The wife also sought that the husband pay or cause her to be paid a sum of $50,000 by way of litigation funding, and to enable her solicitors to engage a forensic accountant.  An order for urgent spousal maintenance of $600 per week was also sought.  The wife also sought orders under the Child Support (Assessment) Act 1989.

3. On 24 June 2005 the husband filed a Form 2A Response.  One of the orders that he sought was for the sale of a property at N (“the [N] property”), with an ancillary order that the nett proceeds of sale be divided between the husband and the wife as the Court thought appropriate.

4. Those applications came before me on 4 July 2005.  Interim orders were made in respect of the children.  It was ordered by consent that the husband do all that might be necessary to enable the N property, which was registered in the name of P Pty Ltd to be sold, with the nett proceeds to be paid into an interest-bearing trust account to be held by the wife’s solicitors in the name of the parties pending further order of the Court.  It is convenient to note here that the sale was effected in about January 2006.

5. The husband and the wife were ordered to file and serve affidavits of discovery within 28 days.  The order for discovery included an additional requirement so far as the husband was concerned, namely that the affidavit of discovery was to be in compliance with his obligations pursuant to the Rules to provide a full and frank disclosure of his true financial position.  The parts of the wife’s application which related to spousal maintenance and child support were adjourned to 25 October 2005.  An order was made for the appointment of a single expert to value the former matrimonial home.  Interim orders were made restraining the husband from disposing of, dealing with, or encumbering his interest (other than as was provided in the orders) in seven named corporate entities with further restraints being placed on the husband in respect of any other entity in which he had an interest, as well as any other asset or financial resource held by, or on behalf of the husband or his nominee, of whatsoever nature and kind and wheresoever situate.  The restraining orders were specified to be until further order and did not restrict the husband from dealings in the ordinary course of business.

6. The matter came before Judicial Registrar Ramsden on 25 October 2005 and by consent, he adjourned the question of spousal maintenance to the Registrars Defended List for a half day hearing on 30 November 2005.  The wife was granted leave to withdraw her application for litigation funding and in respect of child support matters, by consent, and with liberty to make such further or other interim applications as she might be advised.  The time for filing the wife’s affidavit of discovery was extended to 2 September 2005.

7. There were further orders made as to discovery requiring the husband to comply with r 4.15 of the Family Law Rules on the adjourned date as well as for him to comply with r 13.04, and without limiting the provisions of that rule, certain documents were specified. Time was also extended for the filing by the husband of his affidavit of discovery until 24 October 2005.

8. The proceedings came before Senior Registrar FitzGibbon on 30 November 2005.  Evidence was given by both the husband and the wife and they were also cross-examined.  The matter was not able to be completed on that day and the wife’s application for spousal maintenance was adjourned part-heard to 25 January 2006.  Both parties were ordered to make certain documents available for inspection at the offices of their respective solicitors within 21 days, the husband’s documents being listed in List A and the wife’s documents being listed in List B.  Each party was granted leave to photocopy the documents at his or her respective expense.

9. On 25 January 2006 the Senior Registrar dismissed the wife’s interim applications for spousal maintenance and reserved the costs of both the husband and the wife.  He also made an order that the husband comply with the earlier order requiring production of documents at the office of his solicitors “and/or written answers to the questions contained in the letter dated 12 January 2006 to his solicitors” by 23 March 2006.  Senior Registrar FitzGibbon gave Reasons for Judgment which remain on the Court file.

10. A Trial Notice hearing took place on 8 September 2006.  Orders were made for the filing of documents and generally for the preparation of trial, and a Pre-Trial Conference was appointed for 21 November 2006.

11. The wife, as required, filed her trial affidavit on 15 November 2006, and she also filed a Financial Statement on 21 November 2006. 

12. The husband did not comply with the Trial Notice directions which would usually have resulted in the Pre-Trial Conference being cancelled and the matter being placed in the Defaulters List.  However, at the time a more relaxed approach was in place, given that the Court was embarking upon a “Blitz” to take place in February and March 2007 and, accordingly, the Pre-Trial Conference took place before Registrar Lethbridge on 21 November 2006.  Both parties were legally represented at that Pre-Trial Conference and the bench sheet notes that the husband attended as well. 

13. The case was listed for callover on 25 January 2007, with the trial to be heard on a date to be appointed in February 2007.  Various case management orders were made.  In particular, the wife was to file and serve by 5pm on 28 November 2006 an Amended Application for Final Orders, together with a Financial Statement and Undertaking as to Disclosure.  She was also to file by 21 December 2006 an affidavit by Mr S, Valuer, as single expert witness with respect to the value of the former matrimonial home.

14. The husband was to file and serve by 5pm on 21 December 2006 an amended response;  a Financial Statement;  an affidavit of evidence-in-chief, and affidavits of three other witnesses (inter alia).  There was an order that if the husband failed to file those affidavits and other documents in accordance with the orders, then he would be excluded from filing or producing any evidence-in-chief at the trial and be limited to the right of cross-examination of the witnesses of the wife and to make submissions, subject to any contrary order by the trial judge.

15. The restraining orders which were included in the orders I made on 4 July 2006 were varied so as to enable the husband to sell or cause to be sold, a Porsche motor vehicle with the purchase price to be applied in discharge of the sum outstanding to the financier and the balance to be paid to his solicitors on account of an interim property settlement in favour of the husband.  This was subject to the husband providing details of the name and address of the purchaser, the purchase price and the details of the encumbrance, including the name and address of the financier, when finance arose and payment details.  The husband was also permitted pursuant to the variation of the order, to authorise and instruct his solicitors to charge all his interest (if any) in a property situate at V, and to permit his solicitors to lodge a caveat over that property.

16. There is a notation to the orders, all of which were expressed to have been made by consent, that the husband wished to issue a Form 2 application regarding litigation funding for his costs, which had been resolved by the consent orders which had been made at the Pre-Trial Conference.  It was further noted that if funding was not available or was inadequate, the husband’s solicitor might withdraw.  If this happened the husband’s solicitors would file and serve a Notice of Ceasing to Act by 5pm on 5 December 2006.  

17. The three affidavits which were to be filed by the husband were referred to in the trial information.  One of the witnesses was identified as “[P]”, who was said to have made an offer to purchase the former matrimonial home.  Another was said to be one Mr L, the husband’s accountant.  The third witness was one Mr C, a real estate agent, who was to give evidence with respect to improvements to the N property.  It was noted that all three witnesses were required to be made available for cross-examination.

18. The wife’s Amended Application for Final Orders was filed on 29 November 2006, one day later than had been directed. 

19. On 1 December 2006 the husband’s solicitors filed a Notice of Ceasing to Act, specifying that the husband’s last known residential address was “Y property, Queensland”.  A mobile phone number for the husband was also provided. 

20. The husband did not file any of the documents which had been ordered at the Pre-Trial Conference.

21. The matter came before me at a callover conducted on 25 January 2007.  The wife was represented by her solicitor and the husband appeared in person.  After hearing from, or on behalf of both parties, I effectively granted the husband further time to file his material, albeit not as long as the husband had requested.  The husband was required to make file and serve all affidavits upon which he sought leave to rely by no later than 4pm on Wednesday, 14 February 2007 and in the event that he failed to comply with that order, I directed the matter proceed on an undefended basis.  In that event, the husband was to be precluded from filing or calling any evidence but was to be entitled to cross-examine the wife and any witnesses that she might call.  The substantive applications were listed for hearing before me, subject to part-heard cases only, not before 19 February 2007, with an estimated time of two days.  Both parties were ordered to file and serve a Case Summary document and a Summary of Argument no later than 4pm on Friday, 16 February 2007, such document to include a “Minute of Orders Sought” setting out with particularity the orders to be sought at trial.  A copy of those documents were directed to be forwarded to my Associate by email, at or around the time that they were filed.

22. On 9 February 2007 a Notice of Address for Service was filed on behalf of the husband.  That Notice specified that Mr Nick Mazzeo, Solicitor, of the firm Lennon, Settle and Mazzeo was acting for the husband.  It is convenient to note here that Mr Mazzeo had been representing the husband from 31 March 2005 when a Notice of Address for Service was filed, until he ceased acting, as already recorded, when Notice of Ceasing to Act was filed on 1 December 2006. 

1. On 14 February 2007 the husband caused to be filed his Form 1A Amended Response, his undertaking as to disclosure, his Form 13 Financial Statement, and his trial affidavit.  There were no other affidavits filed in support of the husband’s case.

Documents Relied Upon

1. The wife relied upon the following:

   32.1her amended Form 1 application filed 29 November 2006;

   32.2her affidavit of evidence-in-chief filed 15 November 2006;

   32.3her Form 13 Financial Statement filed 21 November 2006;  and

   32.4the affidavit of the single expert, Mr S, which was filed on 15 December 2006.  That valuation was as to the former matrimonial home at T, and was as at 19 December 2005.  I was also informed that an updated valuation was to be provided.   During the course of the hearing an updated valuation was indeed provided by Mr S, as at 13 February 2007.

2. It is convenient to note here that there was one modest amendment to the wife’s trial affidavit.  The amendment was as to par 19 and involved the deletion of part of the second sentence, which, with the consent of the parties, I noted at the time.

3. I was also provided with a Case Outline and Summary of Argument on behalf of the wife, which incorporated the orders which she sought.  I will return to the latter in due course.  In accordance with the directions, the husband had provided a Case Summary Document, Summary of Argument, and a proposed Minute of Orders Sought.  The Case Summary Document was subsequently revised and the relevant document was provided to me during the course of the husband’s case.

4. The Case Summary Document noted that the following had been filed on behalf of the husband:

   “1.       19.04.2005 Form 13 Financial Statement;

   2.24.06.2005 Affidavit filed by husband;

   3.14.02.2007 Trial Affidavit filed by husband;

   4.14.02.2007 Form 13 Financial Statement filed by husband;

   5.14.02.2007 Amended Response to an Application for Final Orders.”

5. When the husband’s case commenced his counsel took him to his second Financial Statement and a number of matters were corrected.  They were relatively minor.  However, there were a significant number of corrections to the husband’s trial affidavit and counsel on behalf of the husband had detailed the same in a document which was tendered and became Exhibit “H1”.  Subject to those corrections the husband confirmed that his trial affidavit was true and correct.  The husband did not rely on the documents filed in 2005 although there was cross-examination about parts of the affidavit filed in June 2005.

6. It is convenient to note here that the husband’s trial affidavit was, to put it mildly, somewhat confusing and counsel for the husband kindly prepared and tendered a document setting out a chronology of the husband’s Financial Statement derived from his affidavit.  That document was received in evidence as Exhibit “H3”.

7. During the course of the hearing a number of other documents were tendered and received in evidence.

Orders Sought

1. In broad terms the wife sought that the husband transfer to her all his interest, free of encumbrances in the former matrimonial home;  that she be paid the balance of moneys held on trust on behalf of the parties deriving from the sale of N property;  that the husband transfer to her all his right title and interest in the chattels situate at the former matrimonial home and two Mercedes Benz motor vehicles.  Again in broad terms, the wife sought that the husband should retain the Porsche motor vehicle;  a property situate at V;  and various named corporate entities and any other business entities in which the husband had an interest;  and that the husband be liable for and indemnify the wife in respect of any such entity.

2. The husband’s position, in broad terms, was that the former matrimonial home should be sold and the nett proceeds divided between the parties in the proportions of 60 per cent to the wife and 40 per cent to the husband;  that the nett proceeds of sale of the N property be divided equally between the parties and that he retain his interest in the property at V.  The husband also sought that the wife make available four items of personal property.  It is convenient to note here that the wife agreed that the husband should have one of those items, namely, the “[F] designer clock”, however, disputed that he should receive the other items.

Relevant Legal Provisions

1. Section 79(4) of the Family Law Act 1975 (“the Act”) requires a four-step exercise:

   41.1firstly, the identification of the property of the parties, their assets, liabilities and financial resources;  

   41.2secondly, the evaluation of the parties’ contributions, whether financial or non-financial, direct or indirect, including contributions to the welfare of the family in the capacity of homemaker or parent;

   41.3thirdly, the evaluation of the matters referred to in s 75(2);  and

   41.4finally, a determination of whether the result is just and equitable, noting that it is the real impact in money terms which is ultimately the crucial issue.  (See JEL v DDF (2001) FLC ¶ 93-075.)

2. Section 79(4)(d) requires the Court to take into account the effect of any proposed order upon either party’s earning capacity. Sub-section (f) requires the Court to take into account any other order made under the Act which affects a party to the marriage or a child of the marriage, and sub-s (g) requires the Court to take into account any child support under the Child Support (Assessment) Act 1989 that a party to a marriage has provided, is to provide or might be liable to provide for a child of the marriage.

Standard of Proof

1. The standard of proof I have applied is the civil standard, namely, the balance of probabilities having regard to the particularity and gravity of the matter. (See s 140 of the Evidence Act 1995 (Cth) and Briginshaw (1938) 60 CLR 336.) Throughout this Judgment statements of fact constitute findings of fact made on the basis of the application of that standard of proof, together with my assessment and observations of the witnesses.

The Hearing

1. Mr Glover of counsel appeared on behalf of the wife and Ms Shiff of counsel appeared on behalf of the husband.  Both parties gave some limited viva voce evidence, otherwise their evidence was given by way of affidavit.  Both parties were cross-examined.

2. Because of time constraints I directed the parties to file and serve written submissions. I arranged to have the matter relisted on 20 April 2007 to clarify some matters arising from the submissions. On that occasion I was also advised that the Child Support Agency had forwarded a s 72A Notice to “The Public Office, McCarthy Legal Trust”. The relevant Notice was received in evidence as Exhibit “Z1”.

3. All submissions have been carefully considered.  They remain on the Court file and form part of the Court record.  Where necessary, they will be referred to, however, it must not be assumed that failure to refer to each and every submission does not mean that any such submission has not been considered.  As I have said, I have carefully considered all the submissions.

Credit

1. I have had the benefit of observing both parties when they gave evidence and were cross-examined.  This can be of considerable assistance (see Government Insurance Office of New South Wales v Bailey 27 NSWLR 304 per Kirby J at 313). However, it is appropriate to be cautious in drawing inferences from the demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the court room (see State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) and Others (1999) 160 ALR 588 commencing at 617).

2. It is important in the present case to recall that many of the events in question took place some twenty years ago, although some of course were much more recent than that.  It is also important to recall that the wife had, as I find, no real appreciation of the husband’s various business activities.  This was compounded by the fact that the business interests of the husband, certainly following separation, were conducted in Queensland.

3. It must be said that the wife’s evidence as to her financial contributions was, at times, confusing.  As will be seen, on some occasions she was simply incorrect.  I accept however that the limited knowledge which the wife had about the husband’s business activities only came about after these proceedings commenced.  Notwithstanding that, the wife impressed as an honest witness who did her best to answer questions and to provide the Court with all the information that she had.

4. It was submitted on behalf of the wife that:

   “… The Husband’s evidence at best could only be described as unreliable and inconsistent, and, it is respectfully submitted, open to the Court to conclude on the balance of probabilities at the very least, deliberately so and intended to hide the truth and mislead the Court for the purposes of concealing the Husband’s true financial position.”

5. Submissions to the contrary were made on behalf of the husband.

6. I have absolutely no hesitation in concluding that the husband’s evidence was, more often than not, unreliable and inconsistent.  A few examples will demonstrate this.  He was inconsistent in a number of areas concerning matters to which he had deposed in his affidavit filed 24 June 2005 and his trial affidavit filed 14 February 2007 and, in some instances, in his viva voce evidence at trial.  It should be noted that I confine this observation to those parts of the earlier affidavit about which the husband was cross-examined.  I will make further reference to this in due course.

7. Further, the husband was all too ready, in my mind, to depart from factual matters to which he had sworn in his trial affidavit in favour of the amendments to that affidavit prepared by counsel and adopted by the husband about one week later (see Exhibit “H1”).  There was no explanation given as to the circumstances which led the husband to realise that his earlier evidence was incorrect and the probability is that this was a matter of good advocacy rather than a matter of a witness belatedly realising that he had been in error.  In any event, the changes were quite substantial and it is difficult to regard the husband as a reliable historian when his evidence changed over such a short period of time.

8. Perhaps the kindest description of the husband is that he had what I would describe as a laissez-faire attitude towards telling the truth.  An example of this was his attitude during cross-examination when it was pointed out to him that the evidence he had given was inconsistent with an answer given only a short while earlier.  As was submitted on behalf of the wife and not disputed in the husband’s submissions, his response was words to the effect “that would be right, if you asked me the same question tomorrow I will give you a different answer.”

9. In similar vein, the husband sought to excuse his inability to explain various matters by saying that he merely did what his Accountant advised him to do.  The husband did not call his Accountant to give any evidence and this is notwithstanding the fact that he proposed to do so at the Pre-Trial Conference conducted on 21 November 2006.  The husband’s explanation for this was that he did not have the time.  I have to say that I regard that as a nonsense, given that the Pre-Trial Conference was conducted some three months prior to the trial commencing.

10. At the Pre-Trial Conference it was also noted that the husband intended to call a witness known as “[P]” who was said to have made an offer to purchase the former matrimonial home.  This witness was required to be made available for cross-examination.  Additionally, the husband gave notice that he intended to call one Mr C, a real estate agent, to give evidence with respect to improvements to the N property.  Again, it was noted that the witness was to be available for cross-examination.  As was the case with the Accountant, neither of the other witnesses filed affidavits or gave evidence in the proceedings.  The husband’s excuse was again lack of time and again, I reject it.

11. In most instances the husband’s businesses were conducted through corporate entities.  Real estate, with the notable exception of the former matrimonial home, was also generally purchased in the name of corporate entities.

12. One of the companies was GQ Pty Ltd (“[GQ]”), and this entity was put into voluntary liquidation in or about the middle of 2006.  This followed proceedings taken by the Deputy Commissioner of Taxation in the Federal Court in Queensland in or about May 2006 to have the company wound up for alleged taxation debts of almost $190,000.  Part of Exhibit “E” to the husband’s trial affidavit was a letter from the liquidators to W & K Pty Ltd, Business Advisers and Accountants, who acted for the husband.  The letter is dated 7 July 2006 and inter alia in that letter it was sought that all Financial Statements, Tax Returns, Business Activities Statements and Depreciation Schedules relating to GQ be made available.  The husband was challenged during cross-examination about the whereabouts of books of account of GQ Pty Ltd and his explanation was that they were in the possession of the Liquidator.  However, it was pointed out to him that the Liquidator in his response to the subpoena had stated that he had not been provided with books of account.  The husband stated that the Liquidator was lying.  I have to say I found that totally unconvincing.

13. It was submitted on behalf of the wife that the husband had never provided discovery of the books of account of GQ, either in his affidavit of documents or elsewhere.  In similar vein, the husband did not depose that he had had, but no longer had, the books of account for this company.  The husband’s Affidavit of Discovery was sworn or affirmed on 21 October 2005, before the company was placed into liquidation.  This was, in my view, a significant omission, all the more so, because the husband’s accountant was not called.

14. The husband did produce, and was cross-examined, about Profit and Loss Statements and Balance Sheets for GQ for the financial years 2002 to 2005 (see Exhibit “W3” and Exhibit W4”).

15. It is convenient to note here that the written submissions filed on behalf of both the husband and the wife made reference to part of par 23(b) of the husband’s affidavit filed 24 June 2005.  It is in the following terms:

    “I further say that save for the payment of rental in relation to my residence in Queensland from [GQ] Pty Ltd I do not receive any income from the company.  As far as I am aware all other payments made to me or on my behalf by the company are in reduction of my loan account.”

16. Whilst there was no cross-examination about this, it was common ground when the matter was relisted on 20 April 2007 that this part of the earlier affidavit was to be relied upon.

17. It was pointed out in the wife’s written submissions, and correctly so, that these documents demonstrate that the husband’s credit balance in his loan account increased over those financial years, growing from $49,520 in the 2002 financial year to $580,098 in the 2005 financial year.  Again, I agree with the submissions on behalf of the wife that the husband should have been in a position to explain this, either personally or through his Accountant.  He could not do so, and as seen, his Accountant was not called.

18. The husband was also cross-examined about undeposited funds referred to in the Balance Sheet of GQ Pty Ltd.  Relevantly, as at the 2005 financial year there were undeposited funds in the sum of $214,992.  I agree with counsel’s submissions that the husband should have been in a position to explain this, either personally or through his Accountant.  He did not do so.

19. It was submitted on behalf of the wife that the Court should draw an adverse inference against the husband for the failure to call his Accountant and I agree.  The husband’s submissions were silent on this point.

20. The foregoing matters are just some examples of the husband’s lack of concern for the truth and general disregard for the need for accurate and complete disclosure.  Further instances are discussed elsewhere.

21. I acknowledge that the husband’s evidence was to the effect that he was “not good” with dates.  I take that into account.  I also acknowledge the inherent difficulty in recalling events which occurred many years ago.  If for no other reason than unreliability, I would not be prepared to accept the husband’s evidence except in circumstances where it is not disputed or alternatively, where there is corroboration from external sources.  However, the matter does not end there.  To my mind, the husband was evasive and obfuscatory, at worst, and the best that could be said about him is that his attitude towards the truth was cavalier.

Full and Frank Disclosure

1. In proceedings under the Family Law Act 1975 parties are required to make a full and frank disclosure of all material facts.

2. The Family Law Rules 2004 recognise this. The relevant Rules are set out in Ch 13, which was described in the Explanatory Statement in the following terms:

   “The Chapter codifies the concept of a duty of disclosure, requires parties to certify that they are aware of the duty and have complied with it, and it confirms that there are significant consequences for failure to comply.  To keep in mind the aim of proportionality and the need to concentrate on the issues in dispute and proving only those, it requires the parties to concentrate on the disclosure of relevance only to those issues.”

3. The chapter deals with:

   ·    General duty of disclosure (Div 13.1.1)

   ·    Disclosure between parties (Pt 13.1, 13.2 and 13.3)  and

   ·    Disclosure of documents (Div 13.2.1)

4. The duty of disclosure in financial cases, such as the present case, is set out commencing at r 13.02.

5. In the Explanatory Statement to which I have already referred criticisms of the process which preceded the new Rules were noted to include:

   ·    Parties are largely in their opponents hands as to the adequacy of discovery;

   ·    The costs and delay associated with discovery …

6. It is obvious that there can be problems if a party does not discharge his or her obligation to make a full and frank disclosure.

7. Earlier authorities were conveniently summarised and restated in Chang and Su (2002) FLC ¶ 93-117. The Full Court had this to say:

   “[67.]  The law to be applied and the approach that may be adopted in cases where, through the lack of a full and frank disclosure, the Court is unable to fully ascertain the extent of a party's wealth, is well settled (see Stein and Stein (1986) FLC ¶ 91-779; 11 Fam LR 353 ; Mezzacappa and Mezzacappa (1987) FLC ¶ 91-853; 11 Fam LR 957 ; Black and Kellner (1992) FLC ¶ 92-287; 15 Fam LR 343 and Weir and Weir (1993) FLC ¶ 92-338; 16 Fam LR 154).

   [68.]  In Black and Kellner (supra) the appellant had submitted that, absent findings as to the extent of his wealth, the order made by the trial Judge was plainly unjust. The key finding of the trial Judge was:

   ‘ ... the failure on the part of the [husband] to disclose his financial position to the court and his attempts to conceal this matter from the court, which has left the court in the position of not knowing what the [husband's] financial position is, except that he deliberately underestimated it.’

   [69.]  Chief Justice Nicholson (with whom Ellis and Cohen JJ agreed), said in dismissing the appeal:

   ‘As senior counsel for the wife pointed out, the first step in proceedings for a property settlement is for the court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of Giunti and Giunti (1986) FLC ¶ 91-759, particularly at 75,555 where the court commented:

   “It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs - see Briese and Briese (1986) FLC ¶ 91-713, affirmed by the Full Court in Oriolo and Oriolo (1985) FLC ¶ 91-653, there is no problem, although there may be disputes as to valuation.

   However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require?  It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.”

   The Full Court in Oriolo and Oriolo, supra, referred with approval to the remarks of Smithers J in Briese and Briese, and it is perhaps worth reiterating a portion of his Honour’s statement at 75,181 where he said, after referring to the decision of the House of Lords in Livesey v Jenkins (1985) All ER 106:

   “ ... I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins  ... is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.

   In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred.”

   Regard also may be had to the decisions of this court in Stein and Stein (1986) FLC ¶ 91-779 at 75,676 and Mezzacappa and Mezzacappa (1987) FLC ¶ 91-853.

   In the present case a similar situation arose.  The assets of the parties could not be ascertained in full because of obvious non-disclosures.

   It is apparent that if his income was more substantial than he claimed, then this would be reflected in the value of his practice and in this regard it is perhaps of interest to note that the wife’s former husband’s practice of a similar nature, was capable of being sold for a figure in 1973 terms which would if reflected in 1991 terms, represent a very substantial asset indeed.

   Finally, another part of a judge’s obligation in cases of this nature in considering section 75(2) factors is to consider the respective incomes of the parties.  Again, through the behaviour of the husband, this was something which the learned trial judge could not do.

   It follows from what I have said that I do not believe that his Honour's judgment can be attacked upon the basis relied upon by the husband.

   [70.]  In Weir and Weir (1993) FLC ¶ 92-338; 16 Fam LR 154 the Full Court (Nicholson CJ, Strauss and Nygh JJ) dealt with an appeal against the refusal by the trial Judge to make orders in respect of unascertained property because he could not quantify it. The Court said at FLC ¶ 79,593:

   ‘This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC ¶ 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC ¶ 91-759, and Mezzacappa and Mezzacappa (1987) FLC ¶91-853. It is clear enough from his Honour’s findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.

   It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party.  To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.’

   It is true that in the case of Monte and Monte (1986) FLC ¶ 91-757, the Full Court said that to found jurisdiction under s 79 in relation to property other than that which had been identified, the trial judge was obliged to make a finding as to the existence and value of other undisclosed property, even thought the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms, both as to identity and value.

   We confess to some difficulty with this proposition.  We should have thought that the Court’s jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets. 

   The difficulty then arises as to what order should be made.  However, we are troubled by the proposition which seems to arise from Monte and Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a court making a finding as to the amount that has not been disclosed, then the other party fails.  We do not believe this to be the law and in so far as the decision in Monte and Monte supports such a proposition, we do not believe that it should be followed.”

1. The High Court dismissed an application by Mr Chang seeking special leave to appeal from the Full Court’s decision on 5 November 2002.  Callinan J observed during the course of argument:

   “It does not matter what the principle might be said to be, a court has to do the best it can.  It does the best it can, having regard to the evidence that is adduced and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings that the Court can make.”

2. These cases were also discussed and cited by the Full Court in Kannis (Appeal Nos WA6L of 2000 and WA9 of 2002 – Judgment delivered 24 December 2002). This judgment is reported at 2003 FLC ¶ 93-155, but on the “Next Friend” issue, not in relation to disclosure. The Full Court said:

   “50.(Counsel submitted) that the cases discussed above were authority for the proposition that where there was a finding of deliberate disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it.  We do not see that the principle should be so confined.

   51.Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or non-feasance, is beside the point.  The duty to disclose is absolute.  Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated.  In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise to be seen to be disadvantaged by the lack of complete candour.  This is the course the trial judge adopted.  It was a course clearly open to him and one that does not merit appellate interference.”

3. In the present case the wife seeks a larger than “usual” share of the known asset pool.  The submission on her behalf is effectively that this will provide a just and equitable result, given that the assets, if properly disclosed, would be greater.

4. It can therefore be seen how important this issue is and it is one to which I will return later.

Chronology

1. When the parties met the wife was 17 and the husband was 31.  The wife was employed as a small business worker, having left school at 15 to commence studies.  When they met the wife was working for the respondent’s brother.  Her evidence was, and I accept, that her parents did not approve of the relationship and in order to bring it to an end took the wife with them to live in Italy.  I am unaware of the date that this occurred.  Subsequently, the wife’s family relented and the wife and her family returned to Melbourne.  She was aged 20 at this time and commenced to work for the husband’s brother at the latter’s [business] in [B].  It was her case that she was able to accumulate savings and purchased a car from the husband for $6,000.

2. It was the husband’s case that he sold the vehicle to her for about $3,000 even though it was worth $6,000 by way of a trade-in.  According to the husband’s evidence this took place at or about the time of the marriage. 

3. The wife was cross-examined about her assets at the time of the marriage and she was adamant that she had saved and accumulated funds from employment since she was 15.

4. In her trial affidavit the wife deposed that after she had completed her studies she wanted to open her own business.  The husband was opposed to this and he was also opposed to the wife’s desire to move to a more recognised business than that which was operated by the respondent’s brother.  The wife went on to say that she continued working for the husband’s brother, saving her wages.  She then decided she would purchase a unit in B.  Again, the husband did not want her to do this and persuaded her not to.  The wife’s evidence about her savings was somewhat confusing.  As I understand it, she had some $10,000 after she had purchased the motor car, to which reference has already been made.  The notion of opening her own business, or alternatively purchasing a unit, gives rise to an inference that her savings were not insubstantial. 

5. I note that in his trial affidavit the husband deposed that the wife had “little or nothing” at the time of the marriage.  He went on to say that he disputed that “she had $40,000 as alleged”.  I do not know where or when that allegation was made.

6. On the evidence I am satisfied that the wife had a motor vehicle and savings of at least $10,000.  I am also satisfied that whatever savings the wife had, she gave those savings, together with other income she accumulated during marriage to the husband (see par 20 wife’s trial affidavit).

7. For his part the husband was, and remains, the registered joint proprietor, together with his first wife, of a block of land in V.  He estimated that this property would be not worth more than $40,000.  He further deposed that the land was unencumbered and that neither party made any contributions whatsoever to that land which was retained for the benefit of the children of his first marriage.  It is convenient to note here that the wife does not list that land in the list of assets set out in the written submissions at p 17.

8. The husband also swore and the wife did not deny, that at the time of marriage, he owned a Mercedes Benz motor car which was unencumbered and worth approximately $60,000.

9. The husband’s evidence was also that he had owned a business in B which he sold not long before marriage to his brother for $35,000.  The wife did not dispute this. 

C Unit

1. In par 13 of his trial affidavit the husband deposed that at the time of the marriage he was the owner of a unit in C, which was unencumbered and worth approximately $30,000.  He gave no evidence about when that property was purchased.

2. In par 15 of the wife’s trial affidavit she said that they occupied this flat following their Honeymoon.  It will be recalled that the marriage was on 25 April 1982.  The wife’s affidavit was of course filed before the husband’s affidavit.  In her affidavit, she referred to an earlier affidavit by the husband filed 24 June 2005, saying that it was not her understanding that he owned the flat unencumbered at the time of the marriage.  She swore that the flat was purchased by X Pty Ltd (a company controlled by the husband) in 1983 and that this entity became the registered proprietor of the unit on 27 September 1983.  Furthermore, in par 27 of her trial affidavit the wife said that the company mortgaged the flat in March 1983.  It may be that the company did mortgage the flat in March 1983 but the wife’s evidence is otherwise clearly incorrect.  I repeat, the marriage was in 1982, and it was common ground that the parties lived in this flat following the marriage.  It could therefore not have been purchased in 1983. 

3. It is common ground that the C unit was sold in October 1986 for $85,000 and at that stage the property was encumbered, the mortgage standing at about $75,471.

4. It was the wife’s case that at the relevant time of these transactions she was unaware of their financial situation, however, accepted, from what the husband told her, that they were heavily in debt.

5. The husband has given differing versions of the reasons why the C unit was mortgaged.

6. In par 13 of his trial affidavit he said it was used as security for funds to invest in a venue.  As will be seen, this venue was purchased at or around the time of the marriage and the husband said in his trial affidavit that when he purchased it he did not have enough money and accordingly borrowed “a further $60,000”, using the unit as security.

7. However, in par 25 of his trial affidavit the husband deposed that the loan, said to have been from the ANZ Bank, was raised in order to assist in the improvements that were carried out to the business.  The venue in question was originally called L Pty Ltd, but this name was later changed to O Company and later still changed to R Company.  I will return to this venue in due course.

WH

1. In par 12 of his trial affidavit the husband said that at the time of the marriage he also owned a business called WH that he had purchased in or about 1976.  Over the years part or parts of this business were sold to various people and at the time of the marriage he had a 55 per cent interest in it, which was sold just prior to the marriage for approximately $75,000.  However, in par 7 of his June 2005 affidavit the husband said at the time of the marriage he owned a business in I called WH which was sold shortly after the marriage for approximately $100,000.  He was cross-examined about the difference in the two affidavits.  His response was somewhat confusing but in any event unconvincing.

2. Annexure “EC1” to the wife’s trial affidavit is a copy of an undated statement signed by the husband setting out his business experience inter alia.  The context makes it clear that the document was prepared in or about April 1993.  In that statement the husband says that he purchased a business in 1978 in I, for $22,000 which he changed into the WH business.  He operated and expanded the business over a four-year period and resold the business (i.e. in or about 1982) for $1.3 million.

3. I am unable to understand why these three documents are so different.

L Pty Ltd / O Company / R Company

1. In any event the husband’s next business venture was L Pty Ltd. The negotiations for the purchase were conducted prior to marriage, although according to the husband, L Pty Ltd was purchased at or about the time of marriage (see par 12 husband’s trial affidavit).

2. In that same paragraph the husband said he utilised the sale proceeds of WH business as well as the proceeds of sale of his business to purchase L Pty Ltd for $155,000.  If the evidence in his June affidavit was correct, there would have been a shortfall of $20,000.  If the evidence in his trial affidavit is correct there would have been a shortfall of $45,000.  If the information in Annexure “EC1” is correct there would clearly not have been any shortfall whatsoever.

3. In cross-examination Mr Glover asked the husband about the source of the balance of purchase price and his response was “Natwest Finance”.  When it was put to him that his affidavit did not say this, his response was that he needed to renovate and borrowed $100,000.  He said that he was the sole owner of L Pty Ltd which he bought through a company, L Pty Ltd, which he controlled.  It was pointed out to him that there was no reference to Natwest Finance in either of his affidavits, that is to say his trial affidavit or the June 2005 affidavit.

4. It will be recalled that the husband’s evidence in par 13 was that he had borrowed $60,000 to complete the purchase of this business, using the C property as security.  It will further be recalled in par 25 of his affidavit, the husband referred to a mortgage which had been raised with the ANZ Bank in order to assist in improvements that were carried out for this business.  As was put to the husband during cross-examination there was no mention whatsoever of Natwest Finance.

5. Mr Glover then took the husband to what he had deposed in par 8 of his affidavit filed in June 2005 and the husband responded by saying words to the effect “that’s what happened”.  In par 8 of that affidavit the husband had deposed to having settled the purchase of L Pty Ltd in 1982, after the parties’ Honeymoon.  He said that the cost was $155,000, and further that, shortly after settlement the name was changed to O Company and renovations were undertaken at a cost of approximately $70,000.  No mention was made of any borrowings for the purchase or, for that matter, for the renovations.  There was also a difference between the dates of the subsequent change of name to R Company in the accounts given in par 8 of the June 2005 affidavit and par 12 of the husband’s trial affidavit, however, not a great deal turns on this.

6. The husband’s statement in Annexure “EC1” to the wife’s trial affidavit sets out that after he sold WH business he decided to buy L Pty Ltd in 1982 for $155,000 and changed the name to O Company (inter alia).

7. On balance, I am satisfied that the husband settled the purchase of L Pty Ltd following the parties return from their Honeymoon.  I am satisfied that he negotiated that purchase prior to the marriage and that the purchase price was $155,000.  Given the conflicting evidence I cannot determine whether the C unit was used as security for the purchase of this business or for the purposes of renovations.  Nor can I determine whether the husband borrowed moneys from Natwest Finance for the purpose of the purchase of this business as the husband first alleged during his cross-examination or whether he subsequently borrowed $100,000 for renovations.  Nor can I be certain whether WH business was sold for $100,000 or $75,000, or whether the version given in Annexure “EC1” to the wife’s trial affidavit, that is to say, that it was sold for $1.3 million is correct.

8. Following the marriage the wife worked on a full-time basis as a small business operator until about a year before she became pregnant and she then worked on a part-time basis.  She did not work in paid employment after the birth of the parties’ eldest child, until she started work a matter of months ago, performing six hours of housework each week.

9. It was put to the husband in cross-examination that in his affidavit filed in June 2005 he had deposed the wife had worked full time as a small business operator following the marriage.  That was not the husband’s position at the hearing.  The reason he gave for the change was to the effect that the more he talked and/or thought about the matter, he was convinced she was not working full time.  I found that explanation unconvincing and, as would be understood, have preferred the wife’s evidence.

10. During the marriage the wife acknowledged that she spent some of her earnings on herself, however, she was consistent in her evidence which was to the effect that her earnings were almost exclusively given to the husband or applied to household expenditure.

11. At some stage the husband borrowed money from the wife’s father and brother.  The total amount was $41,000 and the loans were subsequently repaid.  Additionally, the wife, at that time, gave to the husband all savings that she had accumulated (see par 20 wife’s trial affidavit).  The amount of those savings was not specified, nor was the date.  I accept the wife’s evidence even though I note the husband’s denial.

12. The husband continued to operate the business.  The wife said in her affidavit that the situation was one where she would arrive home from work and the husband would go to his employment.  When she was going to work in the morning, the husband would be returning.  She said that she was feeling lonely, isolated and disenchanted.  Nonetheless, it can be safely inferred that the husband was working hard, and indeed that both parties were working to the extent of their capacity. 

13. The wife’s undisputed evidence was that in 1984 the husband bought a boat and a 500 S L Sports motor vehicle for himself.  Not only was her evidence unchallenged, it also had the ring of truth, given that she went on to depose in her trial affidavit, and presumably by way of contrast, that she continued working as a small business operator, driving a 1978 Cortina.

Purchase of N property

1. In par 18 of his trial affidavit the husband deposed that the business was performing extremely well, because of the many hours he put into it to make it work.  Within a short time in approximately December 1984, “our company P Pty Ltd purchased N property, for $135,000.”

2. The wife referred to the N property in her trial affidavit in par 21, saying that it was purchased in October 1984 for $135,000.  She has annexed a copy of the Contract Note in respect of the purchase (“EC2”).  The Contract Note confirms the purchase price of $135,000, with a deposit of $13,500 and the balance, $121,500 being due on 9 December 1984.

3. Exhibit “H4” is the title search in respect of this property.  It shows that X Pty Ltd was registered as the proprietor on 27 March 1985, on which date there was also registered a mortgage to the ANZ Bank.  I will refer to this in more detail subsequently, however, it is convenient to note here that this mortgage was discharged on 5 January 1988 and another mortgage to the ANZ Bank was registered on the same day.  The dealing number noted on the title was … .  On 8 December 2001 a mortgage and change of name to P Pty Ltd was registered.  The mortgage was again to the ANZ Bank and it was Dealing Number … .

4. It was put to the wife by Ms Shiff during cross-examination that the N property was purchased “off the plans”.  The wife denied this saying that she and the husband had seen it together and bought it together.  I note that the husband confirmed during his cross-examination that the property was not purchased “off the plans” and further that he said he was unaware why this had been put to the wife.  The wife also confirmed that the property had been purchased in the name of a company.  She was unaware of the financial arrangement in respect of the mortgage or its financing.

5. It would seem probable that the purchase price of the N property was provided by the ANZ Bank, save for the moneys paid by way of deposit.

The Greyhound

1. It was common ground that the husband and the wife purchased a greyhound in or about October 1985 for $30,000.  The wife said she contributed $10,000 towards the purchase price, however, the husband said that the wife contributed only $5,000.  According to the wife’s trial affidavit (par 23) the dog went on to be a champion, winning more than $80,000.  It won a prestigious race which included a car in the first prize.  The car was given to the wife.  She sold the Cortina which she had hitherto been using.  The wife’s evidence was that at the end of the dog’s racing career it was sold for $70,000 but she did not know what the husband did with either the prize money or the proceeds of sale.  She was not cross-examined about this.

2. The husband referred to this matter in par 19 of his trial affidavit.  Part of that paragraph was amended (see Exhibit “H1”).  The husband had originally said that the prize for winning the prestigious race included a first prize of some $80,000 and a motor vehicle.  That was amended, to read “some $10,000 and a motor vehicle”.  The husband agreed in this paragraph that the dog was sold for $70,000 and that the wife retained the motor vehicle.  He went on to say that the prize money from winning the prestigious race was divided equally with the trainer, and there were a number of expenses that had to be paid for feeding, training and maintaining the dog.  He did not specify the amount of those expenses.  He went on to say that from the prize money that was received the wife was given $35,000.  This is notwithstanding that he had amended the affidavit, saying that the prize money was only $10,000.

3. It was never suggested to the wife during cross-examination that she had received $35,000 from the husband.  I do not recall that the husband was confronted with the absurdity of the evidence in this paragraph following the amendment to it.  As I have already noted there was no explanation given to me as to how the husband had made the mistakes in his trial affidavit which needed to be, and which were the subject of amendment.  This particular matter stands to illustrate how readily the husband was prepared to change his evidence, notwithstanding the absurdity of the consequential amendment.

4. Accordingly I prefer the wife’s evidence and conclude that the wife contributed $10,000 towards the purchase price of the dog.  The dog was later sold for $70,000, having won more than $80,000 in its career.  The wife received the motor car which was included in the price for the prestigious race.  As is the case with the wife, I am unable to determine what the husband did with the prize money or the proceeds of sale.

J Company

1. The husband confirmed during cross-examination, and indeed has said in his written material that J Company was a successful business.  When asked by Mr Glover whether he took out cash money, his words were to the effect that of course he did.  He would be lying if he said he did not take cash money out of it.

1. The husband’s evidence was that, together with four other investors, he purchased a company named J Company in 1985.  The name of this company was later changed to HJ.  He and the other four investors each had a 20 per cent interest in this hotel.  It was his recollection that each partner invested $50,000 and approximately $500,000 was borrowed from the ANZ Bank to carry out improvements and renovations.  (See par 20 husband’s trial affidavit.)

2. During cross-examination the husband said however that in 1985 the Bank was owed perhaps $3 million.  He was not certain if that date was correct.  He said words to the effect that his memory for dates was not good, however, that this amount of money was owing after the business was opened.  It was suggested to him that by the time he and his partners bought the hotel no money was owed and his response was to the effect that he knew at one stage about $3 million was owed to the ANZ Bank.  No reference to this was made in his trial affidavit.

3. The husband went on to say in par 20 of his trial affidavit that it became “too much” for him to run the hotel as well as the business and accordingly the hotel was sold in or about 1986.  He had referred earlier in that paragraph, as seen, to borrowings of about $500,000 for improvements and renovations and it was his evidence that by the time the banks, trade creditors and other debts were paid, he and his partners “barely had returned to (them)” their original investments of $50,000. 

4. In Annexure “EC1” to the wife’s trial affidavit, the signed statement of the husband in this regard is as follows:

   “Three years later, in 1986, whilst still running this [business] (that is to say [O Company]) I purchased the business ‘[J], for $300,000 and closed the business for six months to renovate and spent an extra $750,000 and re-opened as “[HJ]” (sic).  I employed 70 staff seven days and seven nights per week.  Fifteen months later I sold for $1,500,000.”

5. On balance, I would accept that the husband and the other partners each invested $50,000 or thereabouts.  I would also accept, on balance, that about $500,000 was borrowed from the ANZ Bank to carry out improvements and renovations.  Given the inconsistency in the husband’s evidence as to the amount allegedly owed to the Bank, I am not prepared to accept the husband’s evidence as to the eventual distribution to the partners following the sale of the hotel.

Sale of Shares in L Pty Ltd / O Company / R Company

1. The husband was cross-examined about par 9 of his June 2005 affidavit.  He said there that in 1984 he sold a 25 per cent share in the business to a Mr W and in 1986 a further partner was appointed to the business, leaving the shareholding as follows:

   ·L Pty Ltd (the husband’s company) – 34 per cent

   ·Mr W “or Entity” – 33 per cent

   ·Mr G “or Entity” – 33 per cent

2. However, in par 21 of his trial affidavit the husband said he sold the business in or about 1989.  He said that he gained two partners, who each agreed that for their one-third share they would pay him $600,000.  They agreed that they would all borrow $2 million from the Bank out of which he would be paid the $600,000 that was owed to him, and the remaining $1.4 million was used to pay for extensive renovations and improvements for the business.  The name was then changed from O Company to R Company.  Accordingly, he received $600,000 and retained a 34 per cent share in the business.  He said that he applied those funds towards the purchase of his Porsche motor car, and the wife’s Mercedes motor car and that he also discharged the $300,000 mortgage on the former matrimonial home.

3. When cross-examined about this the husband said that the first version (that is, in his June 2005 affidavit) was correct.  He was asked why he had given a different version in his trial affidavit and did not offer any meaningful reply.  When asked how much Mr W had paid in 1984 he said that he received “under $100,000”, and further that an amount of $2 million was borrowed in 1989.  He did say at some stage that Mr W had originally had a 25 per cent interest which was changed to a 33 per cent interest and went on to say words to the effect that he “still got $600,000 in (his) pocket”.  When Mr Glover asked the husband when the name of the business changed to R Company, his response was “in the 1990s”.  When reminded that in par 8 of the June 2005 affidavit, namely that the business became known as R Company approximately three years after its purchase (i.e. about 1985) he said that the date was wrong.

4. At no stage did the husband explain what he had done with the money received from Mr W.

5. The husband’s statement in Annexure “EC1” to the wife’s trial affidavit sets out that after he sold WH Company he decided to buy L Pty Ltd in 1982 for $155,000 and changed the name to O Company.  Takings were $3,000 per week and after 12 months he increased the takings to $30,000.  In 1988 he closed O Company for six months and leased the property next door and expanded the business to three times the size.  He changed the name to “[R Company]”.  The renovations cost $2 million.  He had operated the club over the past five years (i.e. to 1993).  He opened five nights per week, employed 80 staff and turned over 7,000 patrons per week.

6. Given the inconsistency in the husband’s evidence as set out in par 21 of his trial affidavit and that evidence given in par 9 of his June 2005 affidavit, and noting that the husband’s evidence was that the version given in the earlier affidavit was correct, I cannot accept the balance of par 21 of the husband’s trial affidavit in which he deposed to having received $600,000, from which he purchased the Porsche motor vehicle, the wife’s 190E Mercedes and discharged the mortgage of $300,000 secured on the former matrimonial home.  I also note that Exhibit “H2”, the title in respect of the former matrimonial home, demonstrates that the registration of the ANZ Mortgage was not discharged until 25 October 1993, and on the same day a mortgage to National Australia Bank was registered.  It is difficult to reconcile that with the husband’s evidence.

The Former Matrimonial Home

1. It is common ground that the parties purchased a property at T in 1986.  This property became their matrimonial home. 

2. Exhibit “H2” is the title search for this property.  It shows that the husband and the wife were registered as joint proprietors on 3 June 1986 on which date a mortgage to the ANZ Bank was also registered.

3. The husband’s evidence was that the purchase price was $450,000 with a further $25,000 being paid for furniture in the property, making a total of $475,000.  The wife had said in her trial affidavit that the purchase price of $450,000 included all the furniture.  However, during cross-examination the wife told Ms Shiff that the parties paid an extra $25,000 for the furniture.  It was common ground that the ANZ Bank lent $300,000 for the purchase and the balance and costs of stamp duty and the like accordingly came from the parties’ savings.  I was not told the precise amount which the parties contributed from their own resources.  Clearly it could not have included any moneys from the sale of the C property, given the evidence that this property was not sold until later in 1986.  I further note the husband’s evidence in par 25 of his trial affidavit that there was only a small amount available after discharge of the mortgage and payment of the agent’s costs.  What balance there was, according to the husband, was used for household and general living expenses.

4. I accept the wife’s evidence that the parties had been house hunting, probably from later 1985.  I further accept that she was involved in the purchase although she did not know the detail as to how the property was financed.  She was quite clear that both she and the husband had contributed towards the purchase of the house, saying that her contribution was derived from moneys which she had earnt through her employment.  The husband had said in par 24 that the balance of purchase price came from the parties’ savings. 

5. The parties' savings would therefore have been at least $175,000, not taking into account any costs for stamp duty and the like.

Sale of C property

1. In October 1986 the C property was sold.  It was common ground that the sale price was $85,000 and the balance of the mortgage at the time was $75,471.87.  I accept that there would only have been a small amount available after payment of costs associated with the sale, and I also accept the husband’s evidence in par 25 of his trial affidavit that the money was used for household and general living expenses.

The Husband’s Porsche

1. At some stage after the purchase of the former matrimonial home the husband purchased a Porsche motor vehicle.  I refer here to par 29 of the wife’s trial affidavit in which she deposed to this purchase, drawing the contrast between it and what she had been led to believe about  the parties’ “debt situation”.  I accept her evidence that the purchase price was $250,000 and that the husband paid for this from the cheque account.

Children of the Marriage

1. In July 1989 the parties’ daughter, J, was born.  The wife has described the difficulties leading up to and surrounding this birth in her trial affidavit. 

2. In March 1991 the parties’ second daughter, E, was born and in December 1992 their third daughter, C, was born.  I accept the wife’s evidence that J was cared for by the wife’s parents whilst she was in hospital at the time of E’s birth and that both the elder two girls were also cared for by her parents at the time of C’s birth.

Renovations

1. It was the husband’s evidence that extensive improvements and renovations to the former matrimonial home as well as to the N property were carried out throughout the years 1992 and 1993.  The total cost for renovations to both properties was said to be $300,000 or thereabouts.  The wife concurred that there had been renovations and improvements carried out.  It was her evidence that the improvements to the former matrimonial home were carried out in 1991.  It was put to her that the cost of these improvements was $150,000, however, the wife’s evidence was she was not aware of the cost.  It was her evidence that the renovations to the N property were carried out earlier than the husband had deposed and she did not agree with the proposition that these improvements had cost $150,000.  The parties differed in their evidence as to the work which was done, particularly as to the N property.  As already recorded the husband had, through his solicitor, advised that a real estate agent was to give evidence with respect to improvements to the N property, this information having been given at the Pre-Trial Conference.  As is also recorded, there was no such evidence.  It was the husband’s evidence that the N property was used as security for the renovations to both properties.  I note that the original mortgage to the ANZ Bank which was registered at the same time X Pty Ltd was registered as the proprietor was discharged on 5 January 1988 when another mortgage was registered, also in favour of the ANZ Bank.  That would not seem to have any relation to further borrowings being made some four to five years later.

2. I accept that extensions and renovations were carried out to both properties.  I am unable on the evidence to determine the date and cost of those extensions and renovations.  On balance, I would accept that the cost was substantial.  It would be unusual in my view, for the costs of improvements for both properties to be equal as Ms Shiff put to the wife, however, and as seen, I cannot make any final determination about this.

3. I heard no explanation as to why the mortgage to the ANZ Bank which had been registered at the time of purchase of the N property was discharged and replaced with a further mortgage on 5 January 1988.  I do not have any evidence as to what was owing under this mortgage when the renovations were carried out.  I would also anticipate that the value of the N property may well have increased since it was purchased, however, I have to say that a loan of $300,000, even if the original mortgage had been paid out, represents a high level of borrowings on a property which cost $135,000 on its purchase some seven or eight years later.  Again, however, I am not able to make any concluded finding about this.

Commencement of Queensland Businesses

1. In par 30 of his trial affidavit the husband deposed that he and the wife had discussions in or about 1993 about the possibility of opening up a business in Queensland.  It was his case that the wife was excited about this prospect.  The wife however said she was shocked when the husband told her in early 1993 that he was purchasing another business in Queensland.

2. It appears to be common ground that the husband moved up to Queensland on his own but would come back to Melbourne every two or three weeks.  It is also common ground that the family were together in Queensland for a holiday in Christmas of 1993 and at some stage in 1994 the wife and children moved to Queensland where the family all lived for some seven months or so.  After that the wife and children moved back to Melbourne.

3. The parties differ in their description of their understanding of their relationship at this time and, as has already been noted, also differ as to when the marriage was at an end.  However, it is common ground that the husband continued to pay for all household expenses at this time, and further, from time to time he would come to Melbourne, staying at the former matrimonial home, albeit sleeping in a separate room, from certainly no later than the middle of 1996.

F Company

1. The background to the husband’s business decision in respect of Queensland was described by him in par 35 of his trial affidavit.  There are some differences from what he had said earlier in his affidavit as to the timeframe.  In par 35 the husband deposed that his partner, Mr W, who was originally from Queensland, suggested to him in or about 1993 or 1994 that they should open a business in Queensland.  He went on to say that they agreed to do so some six months to a year later.  On that scenario the decision would have been made some time between 1993 and 1995.  In any event, according to the husband’s trial affidavit, Mr W obtained a 25 per cent share;  an architect who had presumably done some work for them obtained a 10 per cent share;  the husband’s cousin, “[K]”, obtained a five per cent share and a Mr G obtained a 10 per cent share.  According to the husband this left him with a 55 per cent ownership of the business in question.  As a matter of simple arithmetic that cannot be correct, the percentages adding up to 105 per cent. 

2. The business in question was known as “[F Company]”.

3. It was the husband’s recollection that the partners paid $500,000, his share being $200,000.  This was funded by borrowing $150,000 from the National Australia Bank, using the former matrimonial home as security.  Additionally, the husband had $50,000 in savings.

4. There is corroboration in Exhibit “H2” of a mortgage to the National Australia Bank, secured over the former matrimonial home, with registration effected on 25 October 1993.  There is no evidence or information as to the amount of that mortgage.

5. The husband’s further evidence was that the balance of purchase money was borrowed by way of extending the overdraft with the ANZ Bank, utilising another $100,000 approximately.  If the husband’s evidence as to the percentages of the other partners shares was correct, a further $100,000 would indeed have been necessary to complete the purchase at a cost of $500,000.

Failure of The Melbourne business

1. The business in Melbourne was still being operated and the husband said in par 22 of his trial affidavit that this business was not “doing so well” and accordingly, “for months at a time” he would come to Melbourne to try to “resurrect” the business, whilst Mr W would go to Queensland.  Ultimately, according to the husband’s evidence he was unsuccessful and in or about 1998 the business in Melbourne went into receivership, with no moneys being received from that receivership.  He said that “we lost everything”.

2. He gave a slightly different version in par 37 of the same affidavit, saying that in or about 1997 the Melbourne business went into liquidation.  He went on to say that he did not receive any money, after all the debts and liabilities were paid “as between (himself) and his former partners in that business”.  He said that those partners were not running the business properly and he had to concentrate on the Queensland business.

F Company is Sold and U Company is Purchased

1. The F Company was sold in 1997 or 1998, according to what the husband said in par 22 of his trial affidavit.  His further evidence was that he received about $350,000 and the balance of $250,000 was received by the other partners.  His evidence was that he applied his $350,000 by discharging the loan to the National Australia Bank of $150,000 and using the balance of $200,000 towards the acquisition of the U Company which he opened up on different premises using another business entity, namely G Pty Ltd.  I note here that registration of the National Australia Bank mortgage over the former matrimonial home was not discharged until 18 September 2002 (see Exhibit “H2”).

2. According to the husband’s trial affidavit the purchase price for the U Company was $350,000, and as well as applying $200,000 from the proceeds of F Company, the husband borrowed a further $200,000 from the ANZ Bank which was also utilised, he deposed, for the purpose of improvements and renovations.  U Company later changed its name to “[F]” and to distinguish it from the first company of the same name, the second business in Queensland will be referred to as F (No. 2).

3. A different version was provided by the husband in par 36 of his trial affidavit.  In that paragraph he said that the ANZ Bank advanced funds of about $375,000 which was needed to purchase the business and to pay for renovations.  There is an annexure referred to in par 36 which in fact does not relate to the matters deposed to in that paragraph.

4. It can be seen that in different paragraphs of the same affidavit the husband has put forward quite different evidence as to the funding for U Company and improvements and renovations to it.  If what he said in par 22 is correct the cost of the purchase and renovations was $400,000 funded by his investment of $200,000 from the proceeds of F Company and a further $200,000 borrowed from the ANZ Bank.  If as he said he discharged the loan to the National Australia Bank of $150,000 he clearly did not insist on the mortgage being discharged at that time.  There may be a very good reason why this was not done, however, the husband did not explain it.

5. If, on the other hand, par 36 of his trial affidavit is correct, the total cost of the purchase and renovations was about $375,000, all advanced by the ANZ Bank.  On that scenario the husband has not accounted for the proceeds of sale of F Company.  I cannot reconcile these very different versions.

F Company (No. 2) and ME Company

1. In par 22 of his trial affidavit the husband said that he conducted F Company (No. 2) for about a year, which would have been until 1998 or 1999 on the basis of other information provided in that paragraph.  He then decided that the premises should be divided into two separate businesses, one business remained F Company (No. 2) and the other became ME Company.  To do this he said he had to borrow $50,000 from a company known as JN Pty Ltd.

2. However, in par 38 of his trial affidavit the husband deposed that in 1997 or 1998 he opened a new business on the same premises as F Company (No. 2) called “[ME Company]”.  He needed funds and borrowed $50,000 from JN Pty Ltd and also had to raise $80,000 on the security of his Porsche.  That is at odds with par 31 of his trial affidavit, where the husband deposed that he needed funds either to inject into a business venture or to pay debts “about six years ago”.  That would have been about 2001.  He went on to say that he had no security other than his Porsche and arranged for Esanda to advance $80,000 which was used to inject into “the [F Company] in Queensland”.

1. At the time of the trial the husband was aged 61 and the wife was aged 48, some 13 years younger.  There has been no suggestion that the husband is otherwise than in good health.  The wife’s evidence was that she suffered depression.  She had sought medical advice but was not taking any medication.  She said she was “trying to do it on her own”.  There was no medical evidence as to her health or as to the depression from which she said she suffered.  I can therefore give no weight to this submission.

Income, Property and Financial Resources

1. Based on contributions the wife would receive 55 per cent of the nett assets as I have determined them and the husband would receive 45 per cent.  On that basis the wife’s entitlement would be $686,400 and the husband’s entitlement would be $561,600.  There is a differential of ten per cent or $124,800.

2. The wife would retain the contents of the former matrimonial home and the two motor cars earlier referred to, none of which have been valued but which the wife assessed as being worth $28,500.  She would also retain savings noted in her Financial Statement as being about $16,650.  She would retain jewellery of an unknown value.  The wife would remain liable for her credit card liabilities of $5,145 and her legal costs.  She does not have any superannuation.

3. The husband has superannuation of $37,000 which he will retain.  He would retain his Porsche motor vehicle which he assessed as being worth $45,000 and the Capri motor vehicle worth, on his evidence, $2,500 or on the basis of submissions made by his counsel, $10,000.  The husband would also retain his interest in the V land.  The husband would remain responsible for credit card liabilities of $33,000 and his legal costs.  The Porsche is subject to a liability of $18,000 for which the husband will remain responsible.  The husband owes his brother $50,000 of which $40,000 has been applied to legal expenses.  He claims a liability for income tax of $16,000 and owes the Commonwealth just over $33,100 for arrears of child support.

4. Both parties should be responsible for the outstanding school fees.

5. The wife’s chattels on her estimate when coupled with her savings are roughly equivalent to the “value” of the husband’s Porsche.  The husband has greater liabilities than does the wife but he also has the benefit of superannuation.

6. The wife’s income is derived from Social Security Benefits.  She set out in par 95 of her trial affidavit that her average income from a Centrelink pension and Family Allowance was $469.46 per week.  She also earns $90 per week from part-time domestic cleaning.

7. In his Financial Statement the husband claimed that he receives no income whatsoever, his living and accommodation expenses of $150 per week being paid for by his parents. 

Capacity for Appropriate Gainful Employment

1. In CKC & RRC (2006) FLC ¶ 93-299 at par 32 the Full Court accepted that:

   “… in so far as earning capacity of a party is a relevant s 75(2) factor, it is a concept comprised of two aspects:

   ·    capabilities and/or qualifications possessed by the parties;

   ·    the availability of opportunity to exercise those capacitiies in the work force for predictable reward, at least within a range.”

2. At par 33 their Honours continued:

   “In Mitchell and Mitchell (1995) FLC ¶ 92-601 the Full Court of the Family Court said:

   ‘Importantly, and particularly in more recent times, there is the notorious circumstance that there is a significant gap between theory and reality for employment …’.”

3. In CKS & RRC the trial judge had found that the wife’s earning capacity was greater than the amount she was earning at trial, based on an equivalent salary the wife had received in previous employment at a bank.  The trial judge had found that the wife had the “physical and mental capacity” to undertake that or similar work.  The Full Court however concluded that in the absence of evidence about the work place, it was not open to the judge at first instance to conclude that the wife in that case would exercise whatever capacity she had to earn the salary that she had previously been receiving.

4. Their Honours went on to note:

   “35.We think the correct position in relation to the comparative earning capacities of the parties was that the husband had a capacity that he was exercising.  In that sense he was more secure than the wife, who had a capacity in the sense of qualifications, capabilities and experience to earn as much as the husband, but was not in fact exercising that capacity.

   36.However, we also think that the prospect of the wife exercising her capacity to its fullest was an available inference.  That is to say that, while a trial Judge may not be able to find on the balance of probabilities that capacities will be exercised or exercisable to the fullest, it may be a finding relevant to s 75(2) factors that, on the balance of probabilities, a realistic prospect exists that that capacity will be exercised.

   37.In summary on this point, we think that his Honour erred in finding that the wife had a capacity to earn $1,000 a week or more, in so far as that finding involved the inference that jobs were or would be available to enable her to receive that amount.”

5. In the present case the wife has qualifications as a business manager, but has not been employed in that capacity for very many years.  She had investigated the possibilities of doing a refresher course, however, said in cross-examination words to the effect that her mind was not “ready” for her to take on such a course.  She also said in cross-examination that she made contact every two months with Job Search and received assistance such as how to prepare a resumé.  She was happy, she said, at the moment doing what she was doing given what she described as her “state of mind”.

6. There was no evidence put before the Court as to the work place or opportunities for the wife to work.  There was no evidence as to the income she might earn.

7. The wife’s capacity for employment must be looked at in light of the fact that she has been out of the work place since J was born, almost 18 years ago.  An additional limiting factor is the need for her to care for E, who is now aged 16 and C who is aged 13.  Given that the girls are teenagers, the limitation on the wife’s capacity to work is clearly not as great as would apply if they were significantly younger, however, nonetheless it is a limitation.  The wife’s own age is also a limiting factor.

8. To my mind the only finding which I can safely make in respect of the wife is that she has a capacity to work which she is presently exercising to a limited degree.

9. So far as the husband is concerned I have to say that I find it impossible to determine what his income-earning capacity may be.  I am unaware as to whether he has any formal qualifications.  He certainly has experience over many years in business.  Not all his business ventures have been successful.  Given that he has not lodged any income tax returns for five or six years, I do not know what level of income he previously earned.  There is also no evidence as to opportunities for him to work.  Past history demonstrates that the husband has been self-employed, certainly since the time of the marriage and he has always utilised corporate structures.  Certainly in the last few years at least, he has had and exercised a capacity to intermingle his personal and company financial affairs.

10. His evidence, as set out in his trial affidavit, was to the effect that he has not worked since about June 2006.  He remained in Queensland for some three to four months “believing” that he might find some employment but when this did not eventuate he returned to Melbourne.  He claims to have no job prospects and no skills. 

11. It is curious in those circumstances that it appears he has not registered with Centrelink;  that he does not receive unemployment benefits;  or a Newstart allowance.  However, he was not cross-examined about this.

12. Certainly it is the case on the evidence that the husband has not made any efforts to obtain employment.  I accept that his age would make employment difficult, but not so difficult if he was to be self-employed.  However, it is the case that the husband has given no evidence whatsoever of any attempts to secure any employment.

13. I accept that the husband would, as I have said, given his age, experience difficulty in securing employment in the same way as I accept that the wife would face difficulty in obtaining employment in light of her long period of unemployment and the full-time care of the children.  But the fact remains that there is no evidence of the husband’s incapacity to work save for the husband’s own and, as I find it, self-serving evidence.

14. To my mind both parties have the capacity to obtain employment.  I have no evidence as to the availability of, or the opportunity for, either of them to exercise those capacities in the work force.  The wife’s capacity is limited by the fact of her age;  the fact that she has been out of the work force for some 18 years;  and because of the fact that she is solely responsible for the care of the three children, and in particular, the younger children.  As I have said, however, their ages mean that this is not given as much weight as would be the case of children who are younger. She is exercising this capacity to a degree.

15. The husband’s capacity to work is limited by his age.  The lack of evidence as to any attempts to obtain employment of any sort, as well as the fact that the husband is not in any employment, satisfies me that the husband is not exercising his capacity for employment.

Care and Control of a Child of the Marriage under the Age of 18 Years

1. As I have already noted the wife has the care and control of all three children and they are all under the age of 18 years.  I have taken that into account in the sense that it limits the wife’s capacity for employment. 

Commitments of the Parties to Support Themselves and Children

1. The wife provided information in this regard in her Financial Statement about which she was not cross-examined.  She noted her average weekly expenses were $217 and the children’s expenses totalled $678.00 per week.  In addition to that the wife had fixed expenses of registration of her motor vehicle and minimum credit card weekly payments.  The total of this expenditure was $51 per week.

2. In his Financial Statement the husband noted total personal expenditure of $580 per week.  This comprised motor vehicle registration ($10), loan repayments in respect of the Porsche ($470) and minimum credit card payments of $100 per week.  As seen, the husband also noted that he had living and accommodation expenses of $150 per week which he said were paid for by his parents. 

3. I cannot take this matter any further save to say that the parties of course, have a duty to maintain their children.  The husband is not presently fulfilling his obligations in this regard.

The Responsibility to Support any other Person

1. This is not relevant in the circumstances of this case.

Eligibility for a Pension, Allowance or Benefit

1. I have already noted that the wife is in receipt of social service benefits.  There is no evidence as to the husband’s eligibility for any such allowance, although, as noted earlier, it is somewhat curious that he does not receive any such benefit.

Standard of Living

1. The standard of living that these parties enjoyed during their marriage can be gleaned from the husband’s description of the children’s lives during the time they were growing up, as set out in par 5 of his trial affidavit.  He said there that the children had available to them a comfortable home, which was fully furnished with “the best and most comfortable furniture”.  They attended private kindergarten and schools throughout their lives and were also involved in very many extra curricular activities, such as piano lessons, swimming lessons, tennis lessons, Italian lessons and ballet lessons.

2. Following the breakdown of the marriage the earlier standard of living is often not able to be maintained.  The important factor to my mind, is that if there is a drop in standard of living, it should not be borne disproportionately by one party.

The Effect of any Proposed Order on the Ability of a Creditor of a Party to Recover the Creditor’s Debt so Far as that Effect is Relevant

1. As I have already recorded the husband has a debt to the Commonwealth in respect of child support.  I propose to bear this in mind when I come to make orders.

The Extent to Which a Party has Contributed to the Income, Earning-Capacity, Property and Financial Resources of the Other Party,  and

The Duration of the Marriage and the Extent to Which it has Affected Earning Capacity

1. As I have already recorded the wife was a small business operator at the time of marriage.  She ceased that employment when J was born and has not been in employment thereafter until very recently.  The wife’s endeavours were directed towards the welfare of the family and in particular, the parties’ children and enabled the husband to conduct his business endeavours. 

2. This was a long marriage and the roles which the parties agreed they each should undertake during it, have to my mind affected the wife’s earning capacity. 

The Need to Protect a Party who Wishes to Continue That Party’s Role as a Parent

1. The wife wishes to continue in her parenting role.  The financial consequences of that have already been considered.  I note that the authorities make it clear that this sub-paragraph does not give a parent an absolute right of choice in his or her role (see Heeks (1980) FLC ¶ 90-804). However, it is not an unreasonable wish, particularly given C’s age. It is of course just one of the factors to be taken into account.

Child Support under the Child Support (Assessment) Act 1969

1. The wife deposed in her Financial Statement that the husband was required to pay $522 per week child support for the children.  As I have recorded elsewhere there are substantial arrears in this regard.  There is no evidence that the assessment will be, or may be, altered.  Given the husband’s recent history however, I have very little confidence that the child support will be paid.

Discussion

1. It is convenient to pause here and consider the matters which I have identified as being relevant under s 75(2) before I consider the implications of s 75(2)(o).

2. The wife’s obligations in respect of the two younger children will impact upon her earning capacity as I have already noted.  In addition, she has the on-going care of the children which involves the myriad of matters necessary in respect of teenage children, their nurture, their upbringing, and their activities.  In addition to that, it is the wife who will have the capital commitment of providing accommodation for the children.  Both parties have thought it appropriate for their children to be educated at private schools and it is quite clear that the wife will be responsible for this, provided that it is within her capacity.  In any event, the cost of education of the children, whether at private schools or public schools will continue to fall upon the wife.

3. It is likely, as I have said, that there will be little, if any, input from the husband which means that the wife will probably have the complete responsibility for the children’s expenses.  It is relevant that I remind myself of the husband’s attitude towards payment of the arrears of child support.  There is no mention in the husband’s proposals as set out in the written submissions filed on his behalf that he would pay these arrears.  When asked in cross-examination whether he would do so there was quite a pause before he said, and to my mind very carefully, words to the effect that if he has the money he will pay the arrears.  

4. It must be recalled that the husband was able to fund an overseas trip in early January 2006 which cost three to four thousand dollars whilst not being able or choosing perhaps to pay child support.

5. The financial care of the children both capital and periodic and the impact of the care of the children upon the wife’s ability to work are to my mind, weighty considerations which tip the scale in the wife’s favour and call for a further adjustment of five per cent in her favour making her entitlement at this stage of my evaluation sixty per cent of the nett pool of assets as I have determined them.

6. That would increase the wife’s entitlement to $748,800 with a consequential reduction to the husband’s entitlement, leaving him with $499,200.  The differential therefore rises to $249,600.

Section 75(2)(o)

1. As I have already recorded I am completely satisfied that the whole truth has not come out in respect of the husband’s financial circumstances and in respect of his business transactions.  Nor am I in a position where I can identify or quantify the funds for which the husband has not accounted although I am satisfied that the amounts in question were probably substantial. 

2. For those reasons, my findings as to contributions have been based on what could be described as a limited asset pool.  I entirely agree with Mr Glover’s submission which was to the effect that the Court was not in a position to determine the total assets, financial resources and liabilities of the parties because the husband failed to provide full and frank disclosure.

3. I also agree that the husband has, since separation, had the use and benefit of substantial assets and financial resources controlled by him and borrowings well in excess of what would otherwise be his expected entitlement had he made full and frank disclosure. 

4. The authorities make it clear that I am entitled to take a robust approach to this matter and further that it does not matter whether the husband’s lack of disclosure is wilful or accidental or whether it is a result of misfeasance, malfeasance or non-feasance.  I have to do the best I can, having regard to the evidence that is adduced which may well lead to a measure of imprecision about the findings which I can make.  However, the husband’s lack of candour should not be visited upon the wife to her disadvantage.

5. I find myself considerably attracted to the submissions on behalf of the wife which effectively would result in my awarding her all that she seeks.  However, to my mind this would not do justice to the husband.  This subsection is not punitive – its intent is to ensure that justice is done to both parties.

6. That said, however, it is appropriate pursuant to s 75(2)(o) for a further allowance to be made in the wife’s favour, which in my view should be 15 per cent.

Other Matters

1. I am required to take into account other matters under s 79(4). The orders which I propose to make will not have any effect upon the earning capacity of either party. I take into account the fact that interim orders were made pursuant to which the children reside with the wife and further that both parties proposed that these orders should be made final. Finally, I note that I have already dealt with the question of child support under the Child Support (Assessment) Act 1989.

Is the Result Just and Equitable?

1. In my view the answer to this question is resoundingly in the affirmative.

2. The effect of the orders which I propose will be that the wife will be entitled to an apportionment of $936,000, representing 75 per cent of the nett asset pool as I have determined it. The husband will be entitled to 25 per cent of this pool, namely $312,000, which includes his superannuation. The differential between the parties’ entitlements is $624,000 based on the calculations I have made. I am aware that this is a very significant difference. It results, however, from what I am satisfied is a proper evaluation of all the relevant matters under s 79(4) including the matters picked up in s 75(2). It also comes about and significantly so because of the husband’s lack of disclosure, which in turn means that the pool of assets has been limited to the “known” assets.

3. I note that the wife will remain liable to pay the school fees and if she is to retain the former matrimonial home as she wishes, she will have to pay the husband $275,000.  That takes into account the husband’s superannuation. 

1. Both parties otherwise will retain the personal property which I have detailed elsewhere and will also retain liability for the respective debts which have also been detailed.

Form of Orders

1. I have not forgotten the husband’s liability to the Commonwealth for arrears of child support and I will structure the orders so as to enable the wife to meet the payment required of her in part by the funds held in trust by the wife’s solicitors on behalf of both parties. In turn, and in particular, noting that there is a notice to pay money to the Child Support Registrar pursuant to s 72A of the Child Support (Registration and Collection) Act 1988, I will require the wife’s solicitors to pay those funds to the Child Support Registrar on account of those arrears.  That should come close to extinguishing the husband’s liability in that regard.

2. The orders will provide that the husband do all that is necessary to remove the caveat over the former matrimonial home which was registered when he refinanced his Porsche.  If necessary, the amount owing in respect of this liability can be deducted from the payment otherwise due to the husband.

3. The wife should be permitted some time to arrange finance in order to make the necessary payment to the husband and, subject to submissions, I would propose to allow a period of three months.

4. If the wife cannot arrange the necessary funding the former matrimonial home will have to be sold and the nett proceeds divided between the parties in a manner compatible with these Reasons.

5. As seen, after taking into account the husband’s superannuation, the payment due to the husband is $275,000.  Expressed as a percentage of the value of former matrimonial home, the husband’s entitlement would be 22.9 per cent, which I would round up to 23 per cent.  From that would be deducted the money (and accrued interest) held in trust in the wife’s solicitors’ account.

6. Liberty to apply will be given in respect of machinery orders for the sale, in the event that the parties with their solicitors’ assistance are unable to reach agreement.  This may well, of course, bring with it additional costs.

Children’s Matters

1. In the written submissions made on behalf of the husband it was sought that final children’s orders should be made in terms of the interim children’s orders which were made by consent on 4 July 2005.  This was not a matter which had been raised at the hearing, although it is fair to say that the matter was still “live”.  I raised this on 20 April 2007 when the matter came back to Court and it was common ground that such an order should be made.  The proposed order reflects the current arrangements for the children.  More to the point, however, I am satisfied that it is in their best interests and promotes their welfare.

I certify that the preceding four hundred and nineteen (419) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.

Associate:           

Date:                    18 May 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as CAREVETTA & CAREVETTA