Cavanagh & Baran
[2023] FedCFamC1F 1116
•20 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cavanagh & Baran [2023] FedCFamC1F 1116
File number(s): MLC 5719 of 2020 Judgment of: MCNAB J Date of judgment: 20 December 2023 Catchwords: FAMILY LAW – PROPERTY - Where both parties appear as Litigants in Person – Where both parties have the benefit of s102NA orders but waive those rights so as to be able to proceed with the matter – Where both parties require interpreters – Where the parties’ marriage is around 30 years and financial and non-financial contributions are deemed as equal – Where the husband has had a serious illness and requires ongoing treatment – Where there is a 5% adjustment in favour of the husband due to his health. Legislation: Family Law Act 1975 (Cth) ss 75, 79, 102NA
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth))
Cases cited: Babett & Falconer (2015) FLC 98-067
Cavanagh & Baran [2022] FedCFamC2F 1016
Chang and Su (2002) FLC 93-117
Coghlan and Coghlan (2005) FLC 93-220
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (intervener) [2003] FamCA 395; (2003) FLC 93-143
Kildea v Kildea (2007) 38 Fam LR 347
Manolis v Manolis (No 2) [2011] FamCAFC 105
Perrin & Perrin (No 2) [2018] FamCAFC 122
Division: Division 1 First Instance Number of paragraphs: 89 Date of last submission/s: 8 June 2023 Date of hearing: 8 June 2023 Counsel for the Applicant: Litigant in Person Counsel for the Respondent: Litigant in Person ORDERS
MLC 5719 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CAVANAGH
Applicant
AND: MR BARAN
Respondent
ORDER MADE BY:
MCNAB J
DATE OF ORDER:
20 DECEMBER 2023
THE COURT ORDERS THAT:
1.The parties shall do all things and sign all documents as may be required to list the property situated and known as B Street, Suburb C ("the Suburb C Property") for sale and the following conditions shall apply:
(a)the parties do all things and sign all documents to appoint a selling agent as agreed between the parties and failing agreement, at the recommendation of the President from time to time of the Real Estate Institute of Victoria; and
(b)the Suburb C Property shall be listed for sale and be sold on terms and conditions to be agreed between the parties but failing agreement shall be upon the recommendations of the nominated selling agent.
2.The net proceeds of the sale of the Suburb C Property be applied as follows:
(a)first, to pay all costs, commissions and expenses of the sale;
(b)second, to pay the usual rates adjustments;
(c)third, to discharge the mortgage and any other encumbrance affecting the Suburb C property;
(d)fourth, to pay the husband 55% of the proceeds;
(e)fifth, to pay the balance to the wife.
3.Each party indemnify the other and keep the other indemnified from all debts and liabilities held in their sole names, including, but not limited to, any credit card debts, car loans and other debts and liabilities relating to or arising out of any items of property they are to retain pursuant to these Orders.
4.Unless otherwise specified by these orders and save for the purposes of enforcing monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of all others to all other property (including choses-in-action and motor vehicles) in the possession of such party as at the date of this order;
(b)each party hereby foregoes any claim they may have to any employment or superannuation benefits that is belonging to or owned by the other save as provided for in these orders;
(c)insurance policies remain the sole property of the beneficiary named therein;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which the parties are entitled pursuant to this Order; and
(e)any joint tenancy of the parties in any real or personal estate be expressly severed.
5.If either party refuses or neglects to sign or execute and return a document within fourteen (14) days of a written request to do so then the Registrar of the Federal Circuit and Family Court of Australia at Melbourne is hereby appointed under section 106A of the Family Law Act 1975 (Cth) to sign and/or execute such document on behalf of the party in default upon the non-defaulting party’s lodgement of such a document with the Registry and contemporaneously filing an affidavit of a solicitor on behalf of the non‑defaulting party as to the said neglect and/or refusal. The non-defaulting party be at liberty to apply for his or her costs which costs shall be set out by the non-defaulting party in the affidavit to the Registrar with the costs sought to be specified in such affidavit.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cavanagh & Baran has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
McNab J
BACKGROUND OF RELATIONSHIP
The applicant wife was born in 1964 in Country D and is aged 59 years. The respondent husband was born in 1959 in Country D and is aged 64 years.
Both parties moved to Australia in 1987. They met in Melbourne in 1987 through a mutual friend and started cohabitation in 1988 in Melbourne, marrying in 1994. They have two children of the relationship: Mr E born 1998 who is aged 25 years and Ms F born 2000 who is aged 23 years. In 2017 Ms F became unwell and was diagnosed with a chronic illness for which she requires medication, and which can require other treatments and procedures.[1]
[1]Husband’s trial affidavit filed 16 May 2023 at [6 (e)].
Mr E lives with the applicant wife, Ms F lives with the respondent husband. At times throughout their relationship the wife’s and husband’s parents lived with them. They are both the only child of their respective parents.
Parties generally pooled their earnings and shared parenting duties throughout the marriage, with the wife staying at home for some time when the children were born. They owned a business in the service industry which was then sold, and they then conducted businesses selling products and importing these goods from Country D. Subsequently in about 2004 the parties conducted a business products. The husband states at [94] of his trial affidavit that over the years when he was importing products, the purchases were funded by the wife’s parents’ Country D pension, the takings and by borrowing funds from his parents although those funds were not asked to be repaid as they were assisting in paying the children’s education costs.
In 1994 the husband was seriously injured in an accident, and he was paid by insurance over three years, receiving a $235,000 compensation payout in 1997.
In 1998 the parties purchased the property at B Street, Suburb C (“Suburb C property”) with the purchase price of over $250,000, paid for with the husband’s compensation payout and savings – with the husband stating approximately $50,000 of joint savings was used with the remainder paid for by his compensation payout and the wife stating approximately $114,000 of joint savings was used, but in this long marriage it is noted that the parties pooled their resources.
In 2015 the husband was diagnosed with a serious illness. He underwent surgery, but the illness worsened. He notes:
… Everybody thought I was going to die soon; During the last 7 years I had two major surgeries, medical therapy, [other treatment] as well as ongoing [types of] therapy. These treatments saved [his] life but make [him] very sick due to the side effects … also suffering from severe pain continuously and [he] required regular analgesia.[2]
[2]Husband’s affidavit filed 16 May 2023 at [15].
The husband notes this as a time that the parties’ relationship deteriorated from the beginning of 2016, around which time the wife moved out of the bedroom, and they did not subsequently share a bedroom.[3] In 2017 the husband was very upset that the wife would not spend $45,000 when a new symptom appeared and a trial at the G Medical Centre was available. The husband was able to access the trial later in the year once it was approved under PBS and he reports that the illness “stabilized and [was even improving] by the end of 2017.”[4]
[3]Husband’s affidavit filed 16 May 2023 at [17].
Husband’s affidavit filed 16 May 2023 at [22].
The husband describes in his trial affidavit considerable tension between he and the wife between 2018 and February 2019 when the wife moved out of the marital home. There are mutual allegations of family violence leading up to that separation. In mid-2019, the husband obtained a 12-month intervention order against the wife restraining the wife from, amongst other things, committing family violence against the husband and going to or remaining within 200 metres of the marital home. Further orders naming the husband as the protected person were made in mid-2020 and early 2021 for 12-month periods.
BACKGROUND OF PROCEEDINGS
The proceedings began when the wife filed an Initiating Application on 3 June 2020 for distribution of the parties’ assets. There was an issue that the father was alleged to have withdrawn funds from joint funds held in a Westpac Bank Account.
Orders were made on 26 August 2020 by consent which included:
4.That the parties otherwise forthwith do all such acts and things and sign all such documents necessary to jointly instruct Westpac that all joint accounts cannot be dealt with without the prior written agreement or signature of both parties.
5. That forthwith, and no later than 12.00 pm on 27 August 2020, the Husband shall transfer the sum of $100,000 from the Westpac account ending […01] to the Westpac Equity Access Loan Account ending […47] and thereafter the parties be restrained by injunction personally, and by their servants or agents, from withdrawing those funds without further Order or agreement between the parties in writing.
6. That the husband shall retain the sum of $66,321.01 from the Westpac account ending […01] by way of part property settlement.
7. That until further order the Husband be restrained by injunction personally, and by his servants or agents, from withdrawing from any of his superannuation interests before he reaches the preservation age, without first having given the Wife, via her lawyers, at least 28 days’ notice in writing of an intention to do so.
This matter was listed for final hearing before Judge Harland on 27 July 2022. Prior to that hearing the husband had complied with court orders in relation to the trial and had filed a case outline and trial affidavit. He attended a Conciliation Conference on 20 July 2022 before a Judicial Registrar. The wife did not attend the conference and filed a Notice of Discontinuance on 21 July 2022. Notwithstanding that, she attended the hearing before Judge Harland and remained involved in the proceedings after she was informed that orders could be made in her absence. It appears that the parties proceeded as if the Notice of Discontinuance had been retracted and I will proceed similarly as it would be unfair to the wife to now deal with this matter as if she had discontinued when she has been involved in the proceeding since the appearance before and has filed an affidavit once the matter was transferred to this court.
The trial proceeded for one day but there was a dispute as the husband wished to have assets located in Country D, which were held in the name of the wife’s mother, included in the asset pool. The matter was adjourned to allow the husband to make an application for the joinder of the wife’s mother.
At the hearing before Harland J, the husband contended that the wife withdrew $67,000 from the mortgage on 21 July 2022, the same date she filed the Notice of Discontinuance. In reasons recording the adjournment of the proceeding[5] Harland J noted:
17. …The wife said in court that she did withdraw that sum but said that the husband was in breach of the orders because he had not paid the mortgage, and the interest had been deducted from the mortgage account. The difficulty with that submission is that there is no order that requires the husband to pay the mortgage, and the way the order is phrased restrains the parties from dealing with the accounts, but it is not preventing, nor could it prevent, the bank from deducting the interest that it is owed.
18.The husband seeks that that sum be urgently repaid into the mortgage account as, otherwise, the mortgage will be overdrawn. The wife has said that she has spent that money on debts that she owes, which is clearly in breach of the orders that had been made. This adds another layer of complication to the matter so that if the matter does not resolve at the conciliation conference tomorrow, the husband will also need to make an urgent application with respect to the repayment of that sum.
…
21.If an agreement is not reached with respect to the mortgage, the husband may need to file an urgent application requiring the repayment of the funds into the mortgage account. The document the husband has provided today shows that currently the mortgage has a negative balance of approximately $391,000. It will be necessary to provide evidence of the bank statement showing the transfers.[6]
[5]Cavanagh & Baran [2022] FedCFamC2F 1016
[6]Cavanagh & Baran [2022] FedCFamC2F 1016 at [17] – [21].
The husband filed an Application in a Proceeding on 4 August 2022, further to Order 7(b) of the orders made by Judge Harland on 27 July 2022 and sought by way of interlocutory orders (quoting exactly):
1.The applicant wife in the matter, [wife’s name] has to urgently transfer $67,724 back to parties’ Westpac Equity Access Account ending […47]. The wife breeched [sic] item 5 of the consent order that is attached to the court order dated 26 August 2020. Wife transferred $67,724 from the Equity Access Account to her Westpac […] account ending […91] without a court order or parties’ agreement on 21 July 2022.
2.In the event the wife return the fund of $67,724 back to parties’ Equity Access loan account ending […47] regardless she reurn [sic] the fund voluntarily or ordered by the court, the respondent husband [husband’s name] should gets [sic] his reimbursement of all interest paid by him after the wife withdrew all the fund available on 21 July 20222 [sic].
This application was dismissed on 16 September 2022 by a Senior Judicial Registrar however in relation to the withdrawal of funds in the sum of $67,724 it was noted:
O.When the matter proceeds to trial the Wife will need to file and serve an Affidavit setting out how the $67,724 was spent.
The husband also filed an Application in a Proceeding on 12 August 2022 seeking to join the maternal mother Ms H to the proceedings in relation to a City J property (“the City J property”) which may be inherited by the applicant wife.
The matter of the joinder came before me on 21 September 2022 in an Interim Defended Hearing and the application was dismissed. The evidence of the husband as set out in his affidavit of 12 August 2022 did not support a finding that the joinder of Ms H was necessary to determine the issues in this case and the application was dismissed. I noted I would take into consideration the applicant wife having an expectation of inheriting the value of this property when assessing the future needs of the parties, as would be the case for the respondent husband who, as an only child, would be in a likely position to inherit money from his parents in the event that they predecease him. The Court noted the following in orders of 21 September 2022 in relation to cross-examination:
UPON NOTING that the parties intend to cross-examine each other at the trial of the proceedings, and that there is an allegation of family violence between them:
AND UPON FURTHER NOTING that the parties have each been advised by the court:
(a)that pursuant to these orders, neither party may cross-examine the other party personally;
(b)that pursuant to these orders, any cross-examination of either party may only be conducted by a legal practitioner acting on behalf of the other party;
(c)as to the availability of the Commonwealth Family Violence and Cross‑Examination of Parties Scheme and the means by which they may apply to that scheme for the provision of a lawyer; and
(d)that a copy of these orders will be provided by the court to Victoria Legal, which administers the said scheme to both parties.
The parties were referred to a mediation to be conducted before a Senior Judicial Registrar and orders were made by him on 15 March 2023 which contained the notation:
A. That the parties are not pursuing any property in [Country D].
HEARING 8 JUNE 2023
Parties both allege family violence against one another in their trial affidavits and in previous affidavits filed. At the hearing, both parties appeared unrepresented and were assisted by Country D interpreters. Notwithstanding both parties having the benefit of s 102NA orders, once it was explained to them that, because of these orders they were not to cross-examine each other, both stated clearly they did not have an issue with cross-examination as they wanted the matter to proceed on that day.
Orders were made on 16 September 2022 by a Senior Judicial Registrar in which the wife was required to file and serve an affidavit setting out how she had spent the $67,724 which was withdrawn in breach of orders. The wife did not file and serve any such affidavit.
EVIDENCE RELIED UPON
The applicant wife relied on the following documents:
(1)Outline of Case filed 7 June 2023;
(2)Affidavits of 20 April 2023 and 2 March 2023;
(3)Financial statement filed 29 January 2023.
The respondent husband relied on the following documents:
(1)Amended Response to Amended Initiating Application filed 16 May 2023;
(2)Financial statement of 16 May 2023;
(3)Affidavit of 1 August 2022.
ORDERS SOUGHT
The Husband
The husband filed an Amended Response to Amended Initiating Application on 16 May 2023. Although the Amended Initiating Application filed by the wife on 16 March 2022 was dismissed, the husband appeared to rely on this application where he sought, by way of final orders, retention of assets referred to in paragraphs 3, 4, 4(a), 4(b), 4(d), 5, 5(a), 5 (b), 5(d), 5(g) and 9. This corresponds with the Amended Initiating Application filed on 16 March 2022 as follows:
Retention of Assets
3. The Wife otherwise retain all of her right, title and interest to the exclusion of the Husband:
4. the contents of all bank accounts in her sole name;
(a) her [Motor Vehicle 1].
(b)all furniture and personal items in her possession as at the date of these Orders;
…
(d) superannuation entitlements standing to the Wife's credit.
5.The Husband otherwise retain all of his right, title and interest to the exclusion of the Wife in the following:
(a) the contents of all bank accounts in his sole name;
(b) his [Motor Vehicle 2] and [Motor Vehicle 3];
…
(d) all furniture and personal items in his possession as at the date of these Orders;
…
(g)superannuation entitlements standing to the Husband's credit.
9. Such further or other final orders as this Honourable Court deems appropriate.[7]
[7]Wife’s Amended Initiating Application filed 16 March 2022.
He further sought that the parties’ asset pool be characterised as:
1. The Parties’ Total Assets:
a. [Suburb C] property worth $1.48 million;
The Parties’ Total Debits:
b. Westpac Line of Credit Loan Account -$390K in debt;
c. The Parties’ net assets: $1.09 million.
2.The principle of a 50-50 division of the parties’ property is a commonly accepted practice in property settlement.
3.However, in this particular case, I wish the court could take into consideration my current [health] condition and the considerable funds needed to ensure that I can continue with my on going[sic] […] treatment […] for me to survive as a normal person.
4.Nevertheless, I understand that the court must consider all the available evidence and I will accept and respect whatever decision is made.
The Wife
According to the wife’s Application in a Proceeding filed 6 September 2022, she sought orders that the husband pay the mortgage and live in the house or that she pay the mortgage and live in the house. She also set out her calculations in relation to each of their drawings from their loan account and her claim was that the husband owed her $126,052 as a result.
The wife sought the sale of B Street, Suburb C with net proceeds of sale to be divided 75%/25% in her favour. In the course of discussions between the bench and the wife, the wife did state that if all funds that she was claiming should be added back into the asset pool, then 50/50 split of assets was appropriate.
MATTERS IN DISPUTE
The Wife
The wife asserts the following:
(1)an amount of $304,000 was withdrawn by the husband in December 2018 from account ending #...47 and that he owes $126,052 to the account.
(2)the husband has control of an NAB account ending #...05 with an initial deposit of $500, which the wife says was opened by his parents in 2006 when they lived with the parties for some time, which had a balance when they returned to Country D in 2006 of $100 and a balance as at 30 September 2017 of $145,919.06. She states the husband used the account for the family and the family business and that this amount should be part of the property pool.
(3)the husband has an Australian stock trading account in his name with the holder ID ending in #...31 which had a balance of approximately $213,788 as at December 2018 and should be part of the property pool.
(4)the husband needs to provide details about the flow of money in and out of accounts in relation to frequenting casinos.
(5)there is a Paypal account under the parties’ company’s trading name which should be included in the asset pool (the balance of the account was unknown).
The Husband
The husband notes the following issues in dispute:
(1)whether the Country D property valued at $2.8 million should be included in the asset pool.
(2)the wife’s claim that the husband has to add back over $300,000 is explained as follows:
(a)The husband transferred $304,000 from the loan account to his savings account and then transferred $100,000 back, and further withdrew $115,000 which he used to renovate the family home, pay down the mortgage, take care of living expenses and provide some funds towards a holiday to Country K for he and his daughter.
(3)the wife owes $67,724 which she withdrew in breach of orders (although in the course of the hearing it was put by the husband that he had taken that sum from the bank account as had the wife and that they had taken the same amount).
Country D Property
As to the issue of whether the Country D property belonging to the wife’s mother should be included in the property pool, this matter has already been resolved when the issue of joinder of the mother’s wife came before me on 21 September 2022 in an Interim Defended Hearing and the application was dismissed. Furthermore, the Senior Judicial Registrar made orders on 15 March 2023 noting that: “the parties were not pursuing any property in [Country D]” by which I take to mean that they are not pursuing any claim that property in Country D should be included in the asset pool. The property in Country D was not the subject of evidence and will not be considered in this judgment. There is no evidence of the quantum of the property in Country D owned by either of the parties or their respective parents.
EVIDENCE
Both parties did not provide sufficient material in relation to the matters in dispute and this has made the process of determining the asset pool difficult however the value of the major asset - being the family home - was not in dispute.
NAB account ending #...05 – Ownership of Funds
The wife claims the husband has bank accounts in his parents’ name – Ms L and Mr M. According to the wife as outlined in her affidavit of 2 March 2023 at page 3, subpoenaed NAB records showed a balance as at the end of September 2017 as follows:[8]
[8]Wife’s affidavit filed 2 March 2023 labelled ‘MC-3’ from pages 13 – 23.
Bank Account
Value
Account ending #...05
$130,351.54
Savings account ending #...18
$ 139.84
Savings account ending #...42
$ 15,427.68
TOTAL
$145,919.06
The wife claims in her financial statement an entitlement to a 50% share of those funds.
The husband claims that the money is a loan from his parents to buy stock for the business he was then conducting and is not his money to keep. He stated:
It is their money. They just help me to purchase their stock. That’s it and they never say give to you don’t need to pay back they never say that.[9]
[9]Hearing dated 8 June 2023.
He gives evidence:
The account was initially opened by my parents but after three months my mother in-law feels not used to the life here so they returned to [Country D] after three months. At that time in the account not much money. In the later years accumulated $130‑140,000. [b]ecause our families living are going to [Country D] to purchase stock, [products] to sell […], it is [Country D] money. Don't have [Country D] money so my parents help. Each time every year I go there bring back about $100,000 AUD in stock and sell it here for [the] year usually. Every year I go back before Christmas so how can I pay back for my parents so I just used the taking it is not our money it is our taking, it is not our profit it is our taking. The taking put back to my parents’ accounts. She makes complicated. Her mother transferred from my father's account about $400,000 [Country D] money and the total is about $900,000 in her mother. Her mother living with her? [10]
[10]Hearing dated 8 June 2023.
The husband gives evidence that his parents had given him $145,000 – but that it is their money to purchase stock.[11] He gives evidence there is currently $100,000 in the account and that his parents help him to purchase stock with the money and that it is not a joint asset of the parties.
[11]Hearing dated 8 June 2023.
Husband’s Australian Stock Trading Account – Funds Spent/Funds in Account
When asked what documents the wife was presenting by way of proof of the husband’s share trading, she said she would rely on documents attached to her financial statement filed on 29 January 2023. These were:
(a)ANZ CHESS Holding Statement for the period December 2018 with a holding balance noted as 2002 on 27 December 2018.
(b)Commonwealth Bank CHESS Holding Statement for the period December 2018 with a holding balance noted as 500.
When the husband was shown these documents, he gave evidence that these were not a trading balance but a holding statement.
The husband had not provided trading balances in his evidence but was given time during the day to locate these. He gave evidence that the maximum amount he had in shares was $150,000 but that it was now zero because the shares were held over a long period of time, and he had spent the money. He brought up statements showing the balance on his Ipad and I read these as having a zero balance as at May 2018 but with a balance at the end of December 2018 of $72,000, followed by a zero balance in 2019.[12]
[12]Exhibit R1.
The wife put to the husband that she had done the figures and that the shares were worth $250,000 to which the husband noted:
She is looking at the wrong thing, share balance, it is the running balance, one day later, two day later she is adding them together.
The husband stated the wife was getting the amount because she was adding the running balance together, rather than looking at the total remaining amount which is negligible.
Gambling – The Flow of Money
The wife, when cross-examining the husband, put that:
you go to the casino behind my back and spend $300,000 behind my back without my knowledge how are the kids supposed to live?
The husband answered:
Of course a lot of people go to casino a lot of people go just for fun …you can go and eat … I can’t just sit at home waiting to die otherwise I wouldn’t look like this today.
The wife gave evidence that the husband had a Casino rewards platinum card and the bank statements showed multiple withdrawals from the Casino ATM. The wife annexed bank statements to her affidavit filed 3 January 2023 from 2013 and 2015 showing withdrawals at ATMs at the casino from February 2015 to May 2015 in the sum of $2,000 and in August – October 2013 in the sum of $1,500. There was no evidence of recent gambling or withdrawals of cash at ATMs at the casino.
Paypal account under the Parties’ Company’s Trading Name before January 2023
This issue was not canvassed.
Add Backs in the order of $304,000
In her Initiating Application filed 3 June 2020 in relation to interim/procedural orders the wife sought:
That the Respondent forthwith repay the sum of $304,600 withdrawn by him from the parties’ joint Westpac Equity Access Loan account number [ending] … […47] [in] December 2018.[13]
[13]Initiating Application filed 30 June 2020.
The amount of $304,600 was noted in the wife’s trial affidavit filed 20 April 2023 at [5] as a “drawing” which occurred in December 2018 and was listed as part of the marital assets.
The wife claims that whilst she withdrew $111,274 from the loan account, the husband withdrew $237,326 and that therefore the husband needs to pay back $126,052, the difference between $237,326 and $111,274.
The husband states that by October 2018 he had withdrawn $34,000 to the applicant’s $51,847. He claims the applicant owes $4,271 in interest. [14] In his trial affidavit he states:
107. I withdrew remaining credits balance of $304,000, after I found that the wife withdrew over $51,847 in less than 2 months and not paid any bills … From Oct 2018, I paid all the interest charged by the bank. I also transferred $100k back to the line of credit account that [sic] ordered by this Honourable Court.[15]
[14]Husband’s affidavit filed 16 May 2023 at [105] – [106].
[15]Husband’s affidavit filed 16 May 2023 at [105] – [107].
When cross-examined about this, the husband claimed the wife was ‘double counting’:
She is double counting everything. She claimed I took money the reason is that because she is spending money without my knowledge and not putting anything back so I took them all and put back $100,000. Because why? $200,000 and the interest is very small so I used the Westpac share trading account to buy some shares for dividends and hopefully I can make some money and I disclose all of this to her former lawyer and she just count two parts. Ok you took $200,000 and you have this money. It is the same money. You can’t add them together.
Interim Consent Orders made by a Registrar on 26 August 2020 did require the respondent to repay $100,000:
5. That forthwith, and no later than 12.00 pm on 27 August 2020, the Husband shall transfer the sum of $100,000 from the Westpac account ending […01] to the Westpac Equity Access Loan Account ending […47] and thereafter the parties be restrained by injunction personally, and by their servants or agents, from withdrawing those funds without further Order or agreement between the parties in writing.
6. That the husband shall retain the sum of $66,321.01 from the Westpac account ending […01] by way of part property settlement.
The husband gave evidence above at [49] that he transferred the $100,000 back into the account.
He also noted:
I don’t know how much exactly I withdraw that money than you, more than you. Because after I put back $100,000, $200,000 I spend at least $150,000 on renovation, go to [Country K] with my daughter and … day to day expense and the medicine and stuff.[16]
[16]Transcript 6 June 2023.
The husband stated that renovations were undertaken in the downstairs part of the house to fit a bathroom and toilet and that there was some “cleaning up with perhaps a touch of paint upstairs”, that he had been paying the interest on the loan, paying the mortgage, rates and insurance with these funds as well as using them for medicine and everyday living expenses. He did not present any documentary evidence to support those claims; but I accept that he paid for those works and items.
The husband put to the wife that she withdrew the sum of $67,724 in three tranches from April to July 2022 from the Westpac Account ending #...47, and that the wife had breached court orders by doing so. The wife stated she withdrew these funds to pay rent. Orders made on 16 September 2022 by the Senior Judicial Registrar noted in relation to this amount:
O.When the matter proceeds to trial the Wife will need to file and serve an Affidavit setting out how the $67,724 was spent
The Court put to both parties that as the husband had received a partial property settlement in the amount of $66,321.01 and the wife had withdrawn a similar amount, the effect was that each party had received a similar amount. That is the way the court will treat that sum.
The main asset is the Suburb C property which the parties purchased in 1998 for over $250,000 with a $100,000 line of credit taken out through NAB. Both parties want to sell the property, and both are in agreement it is worth approximately $1,480,000. Both parties are also in agreement that there is a liability of the Westpac Line of Credit Loan account which is listed as $389,974.18 in the wife’s Financial Statement.
The parties have agreed to keep their respective superannuation.
I have to determine the asset pool of the parties as at the date of trial. The wife has made a series of allegations about the husband effectively taking joint assets held in bank accounts and then using them for his own purposes, such as gambling, so as to hide those assets from the wife. The difficulty for the Court is that it must act on the evidence before it. As far as the Court can ascertain, there is no up to date evidence in relation to funds held in the NAB accounts. The only evidence available is that the husband has said in his oral evidence that there was about $100,000 in that account at the time the wife sought final orders that the husband make further disclosure. However, given this is a final hearing and the parties have been before the court over an extended period, those matters could and should have been resolved prior to final hearing. The Court will proceed on the basis of evidence before it at final hearing. The wife has not established that the husband has failed to disclose to the extent that the Court should draw inferences against him: see Chang and Su (2002) FLC 93-117. Most of the conduct the wife alleges in relation to joint bank accounts and shareholdings is said by her to have occurred well prior to separation.
When the wife was questioned about how she established the claims that she made regarding the husband’s use of funds or funds in bank accounts, her response was often that the documents were at home.
The wife has not proved that the husband has hidden assets or squandered joint assets such that they should be added back into the asset pool or otherwise taken into account.
The Court proceeds on the basis that the assets of parties to be taken into account is the net value of the former matrimonial home. Each party agreed that the superannuation should not be the subject of orders and that it should remain where it is.
LEGAL PRINCIPLES – PROPERTY
In respect to the parties’ dispute regarding the division of their property these proceedings, s 79 of the Act sets out the following:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In exercising that discretion, the court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), at [35] confirmed that before an order is made adjusting the parties’ property the Court is required to make a determination that it is just and equitable to do so. That determination is to be made, however, not as a discrete or preliminary issue, but requires the Court to consider the matters set out in section 79(4) of the Act.
In the leading case of Hickey and Hickey and the Attorney-General for the Commonwealth of Australia (Intervenor) (2003) FLC 93-143, the Full Court held at [39] that, in considering the matters set out in section 79 (4) of the Act the preferred approach was to adhere to the following four steps:
(a)identify and determine the value of the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(b)identify and assess each of the parties’ financial and other contributions up until the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(c)assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(d)step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
That approach had been endorsed many times: see, for example, Manolis v Manolis (No 2) [2011] FamCAFC 105 at [63] (per Coleman, May and Ainslie-Wallace JJ); Kildea v Kildea (2007) 38 Fam LR 347 at [104] (per Finn, May and Boland JJ); Coghlan and Coghlan (2005) FLC 93-220 at [22] (per Bryant CJ, Finn and Coleman JJ) and [142] (per O’Ryan J). However, as the High Court noted at [35] in Stanford, s 79(2) of the Act provides that the Court shall not make an order altering the interests of the parties to the matrimonial property, “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Accordingly, since Stanford, it has generally been the practice of the court to determine, as an initial issue, whether it is just and equitable to make an adjustment of marital property.
The Full Court in Perrin & Perrin (No 2) [2018] FamCAFC 122 cited at [57]–[58] with approval, the decision in Babett & Falconer (2015) FLC 98-067 at [44]:
Within the family law context, those comments [in respect to the adequacy of reasons] should be seen as reinforced by the fact that the nature of the s 79 inquiry is, in essence, a broad discretionary assessment, which is neither an accounting nor mathematical exercise and which, effectively as a corollary, requires a ‘broad-brush approach’.
(Citations omitted)
ASSET POOL AS DETERMINED BY THE COURT
The Court determines that the asset pool consists of the net value of the B Street Home. There is insufficient evidence in relation to the balance of the matters that the parties sought to be taken into account.
The parties owned several businesses throughout their relationship, but neither party contends that any business interest should be included in the property pool.
The wife asserts that there was $145,919.06 in the NAB accounts in the husband’s parents’ names as at the date of separation and that this account is a joint asset. The husband states it is his parents’ money and that he had used it to purchase equipment for the sales business. The evidence about that account and its present value is unclear although the husband has said that there is about $100,000 in that account. The husband said that it was the parent’s money, and the wife has contended that her parents contributed to that fund and that it was used to pay for business purchases and expenditure and expenses and the children’s school fees and tuition expenses. The evidence about this is entirely unclear and I will not include the sum of NAB accounts whether it be $141,477.74, $145,919.06 or $100,000 in the balance sheet. It seems that the parties were able to access the funds for business purposes when they were conducting businesses. The wife has not established that the husband has retained joint property of the parties.
The court finds that the asset pool is:
Asset
Ownership
Value ($)
B Street, Suburb C
Joint
$1,480,000
Total Non-Superannuation Assets
$1,480,000
Liabilities
Ownership
Value
Westpac Home Loan Account ending #...47
Joint
$390,000
Total Liabilities
$390,000
Net Non-Superannuation Assets
$1,090,000
CONTRIBUTIONS
Prior to the Relationship
At the commencement of the marriage, neither party reported having significant assets.
During the Relationship
This is a long marriage of around 30 years. Both the wife and the husband agree they worked and contributed to the household income and pooled their financial resources over their relationship. Both parties contend they were the primary caregiver for the children and extended family. Both parties looked after the children, with the wife staying at home after the birth of their children for some time; and both parties looked after their respective parents who lived with them at times throughout their relationship. Both children are now adults.
The husband was involved in an accident in 1994 for which he received insurance payments of $600 a week for three years. The husband received an insurance compensation payout in 1997 of $235,000.
The husband has been in ill health at periods throughout the relationship due to a serious accident in 1994 and an illness diagnosis in 2015, for which he continues to take medication.
The main asset the parties acquired was the Suburb C property which is now valued at $1,480,000. The husband asserts he contributed the majority of the funds to buy this property, and both disagree as to the amount of the husband’s insurance payout which was utilised towards payment of the property. This was a long relationship where the parties agreed they pooled their resources, and those resources included the insurance weekly payments and lump sum payment.
The wife seeks a finding that contributions to the property pool be equal, taking into account financial and non-financial contributions. The husband seeks a finding of 55%/45% in relation to contributions in his favour because he says he made the greater financial contribution to the Suburb C property.
This is a long marriage where both parties pooled their resources and looked after the children and supported their respective parents. I find the contribution of the parties to the asset available for distribution to be equal.
Section 75(2) factors
The husband is aged 64 years and is in poor health as he has a serious illness. He requires ongoing and expensive treatment. The husband has presented limited evidence of the cost of the treatment. Annexed to his affidavit sworn 16 May 2023 at MB5 is a report from his treating doctor dated 30 May 2022 who, in response to questions posed to him by the wife’s former solicitors, including about the husband’s treatment and the cost of it, stated:
[The husband] receives […] treatment in [medications]. His other medication includes analgesia for his chronic [illness] related pain …He also takes [other medications] to assist with his sleep …
I have spoken to [N Pharmacy] who have estimated that the monthly cost of [one medication] is approximately $9000 per month. I do not have the exact cost to [Mr Baran]. [Mr Baran] would have additional costs of his medical care, including the other prescriptions, scans and blood tests, his private health insurance and consultation fees and hospital fees. I do not have the exact costs of [the medications].
[One medication] is provided to the husband on the PBS. [Another medication] is not on the PBS ....
In relation to the husband’s life expectancy, the treating oncologist said that it was difficult to make an accurate assessment and that generally people with the condition that he has had (with previous illness) the median survival period was seven months. The husband had survived 14 months as at the date of the report and it was noted that the husband had done well compared to other patients in his situation.
The husband said in evidence that he was buying generic medicines on the internet. Despite efforts by the Court to get an idea of what the husband was spending on medicines per month (whether generic or prescribed medicines) it was not clear, but he did say that he would need about $5,000 per month, which is less than the sum estimated by his treating doctor.
The wife is aged 59 years and in good health.
Both parties have modest incomes with the wife reporting earnings of $428 a week as a shop operator. The husband receives a disability support pension of $532 a week and his financial statement noted that his daughter pays him $72.40 a week to assist with living expenses.
The wife gave evidence that she cannot keep working at the shop for much longer and that her income will reduce.
The husband seeks an adjustment of 5%, stating he needs more funds to pay his medicines and any new treatments that are not under the PBS to keep him alive.
Because of the husband’s medical expenses, his future needs are greater than the wife’s. His prognosis is not good, although his doctor regards his survival as remarkable. I will make an adjustment of 5% in favour of the husband, given the cost of his medical treatment.
Justice and Equity
Both parties agree it is appropriate for orders to be made pursuant to s79(1) of the Act.
Orders will be made reflecting a split of the assets of the parties 55%/45% in favour of the husband, the Court being satisfied that such orders are just and equitable.
I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 20 December 2023
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