CHESTER and CHESTER

[2019] FCWA 242

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: BUNBURY

CITATION: CHESTER and CHESTER [2019] FCWA 242

CORAM: SUTHERLAND CJ

HEARD: 14 & 15 OCTOBER 2019

DELIVERED : 15 NOVEMBER 2019

FILE NO/S: PTW 5789 of 2018

BETWEEN: MR CHESTER

Applicant

AND

MRS CHESTER

Respondent

Catchwords:

PROPERTY - Value of property - Assessment of contributions and future needs - Case turns on its own facts

SPOUSAL MAINTENANCE - Wife's claim not formed, developed or pursued by her during trial - Wife did not establish that the husband was reasonably able to maintain the wife - Application dismissed

Legislation:

Family Law Act 1975 (Cth)

Representation:

Counsel:

Applicant	:	Mr Meredith
Respondent	:	Self Represented Litigant

Solicitors:

Applicant	:	WLM Legal
Respondent	:	Self Represented Litigant

Case(s) referred to in decision(s):

Anson & Meek (2017) FLC 93-816

Chorn and Hopkins (2004) FLC 93-204

Hart and Hart [2013] FCWA 110

Holland & Holland (2017) FLC 93-798

Keating & Keating (2019) FLC 93-894

Kennon & Kennon (1997) FLC 92-757

Khademollah and Khademollah (2000) FLC 93-050

Re F Litigants in Person Guidelines (2001) FLC 93-072

Stanford v Stanford (2012) 247 CLR 108

Yeates (as executor for Mr Yeates) & Yeates [2013] FCWA 117

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Chester & Chester has been approved by the Chief Judge pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

INTRODUCTION:

1[Mr Chester] (“the husband”) and [Mrs Chester] (“the wife”) were unable to reach agreement in relation to financial issues, following the end of their long marriage. In closing submissions, the husband sought a 55 per cent division of the parties’ net property and superannuation entitlements in his favour.[1] In particular, he sought that the former matrimonial home in [Town A] be sold and the net proceeds be divided as to 75 per cent to the wife and 25 per cent to him, and on the basis that, save for some minor items, each party otherwise retain the assets, liabilities and superannuation entitlements in their respective possession.

[1] This is despite the husband’s Schedule of Assets and Liabilities provided to the court on 8 October 2019 ostensibly proposing a 55 / 45 per cent division in the wife’s favour, having regard to the proposed division of assets sought by the husband in his Minute of Proposed Orders filed on 29 March 2019.

2Leading up to the trial, the wife sought orders in the terms of Minute filed by her on 5 June 2019. In that Minute, the wife sought orders that, in effect, bore no relationship to the actual property of the parties or the factors that the court was required to consider in determining a just and equitable outcome. For example, the wife sought in one order that the husband pay her the sum of $10,163,811: being the figure which she considered represented 65 per cent of the husband’s savings brought into the marriage, his earnings from a business he commenced prior to the marriage and cash withdrawals that he had made from his bank account over the long years of the marriage, plus compound interest thereon.[2] This was in the context that: (1) the wife’s position during the trial was that, inter alia, the husband had substantial funds hidden in overseas bank accounts; and (2) that during the trial, I found that the total property of the parties was less than $600,000 and there was simply no cogent evidence that the husband had undisclosed funds in overseas bank accounts.

[2] Refer to paragraph 12 of the wife’s Minute filed 5 June 2019.

3During the trial, the wife amended her position considerably. She instead sought that: (1) she retain the former matrimonial home; (2) the husband be required to discharge the unpaid shire and water rates in relation to the property, as well as her debt to Legal Aid Western Australia secured against the title; and (3) she receive a superannuation splitting payment from the husband of not less than 50 per cent of his total entitlements, but the precise amount which she was unable to specify. Save for some specific items, she otherwise generally agreed with the husband’s proposals as to the remainder of their assets and liabilities. The wife also sought that the husband pay her lump sum spousal maintenance: in the amount of $10,000 for the period from 5 February 2018 until 20 August 2019, together with the further amount of $192,900.

THE EVIDENCE:

4The husband was represented by solicitors throughout the proceedings, including at trial. The wife was represented by solicitors at various times, but for the most part, was self-represented, including at the trial.

5The husband relied upon his trial affidavit and financial statement, both filed on 29 March 2019. The wife relied upon her trial affidavit and financial statement filed on 5 June 2019, together with her updating affidavit filed 9 October 2019. In addition, both parties relied, to a greater or lesser extent, on the evidence of [Mr C], the jointly appointed expert who valued the former matrimonial home of the parties.

6As is usual in trials involving a self-represented litigant, I provided specific procedural information to the wife in accordance with the guidelines set out by the Full Court in Re: F: Litigants in Person Guidelines (2001) FLC 93-072 In addition, given the nature of some of the allegations made by each party in relation to family violence and social security fraud, I also provided specific information in relation to the issuing of certificates pursuant to s 11 of the Evidence Act 1905 (WA).

7Each party was cross-examined. In addition, both parties cross‑examined Mr C. In particular: (1) the husband’s counsel cross-examined the wife extensively, including in relation to the parties’ work employment history, their respective contributions during the relationship, and the wife’s current income earning capacity; and (2) the wife cross-examined the husband extensively about various (largely historic) issues. However, she did not cross-examine the husband about a number of current issues, including his income, income earning capacity and his financial arrangements with his partner.

8Neither the wife nor the husband impressed as being accurate or reliable historians when giving their evidence. In particular, I considered that to a greater or lesser extent, both parties tended to exaggerate the positive aspects and minimise the negative aspects of their respective cases.

9I considered that the reliability of the wife’s evidence was significantly detrimentally impacted by her negative and suspicious attitude towards the husband. The wife often appeared wedded to her own narrative of events. This was notwithstanding that there was often either no cogent evidence in support of her narrative or clear evidence to the contrary. As one small example, the wife maintained in her oral evidence that the only property she could say with any certainty was ever owned by both parties was the former matrimonial home. However, the wife annexed to her own trial affidavit documents evidencing that both parties owned the properties at [B Road, Town B] and at [Town C].[3]

[3] Wife’s trial affidavit filed on 5 June 2019, pages 592 and 629.

10The husband regularly responded to questions that he could not remember. The husband conceded during his oral evidence that he did not have a good memory. Nevertheless, I was satisfied that particularly in relation to major financial events and transactions, the husband’s evidence was more reliable than the wife’s evidence. This was because the husband regularly corroborated his evidence by reference to key relevant third party documents: for example, records of title, bank mortgage documents and statements for bank accounts. However, there were some aspects of the husband’s evidence that I considered were entirely unsatisfactory. For example, during his cross-examination, the husband was asked about some specific large cash withdrawals from his bank account in and/or after January 2019. The husband initially maintained that he used all the funds to pay his lawyer’s fees, by making cash payments. The husband subsequently changed his evidence to say that he did not use all of the cash to pay his lawyer and rather, repaid $6,000 of the cash back into his bank account at a later stage. The husband was required to produce all his invoices and receipts for payment in relation to his legal fees from 1 January 2019 onwards. The documents, which were subsequently produced,[4] contradicted the husband’s evidence. The documents revealed that all the relevant payments made by the husband to his lawyer were by electronic funds transfer, not by cash.

[4] Exhibit A12.

11During his oral evidence, the husband applied for and I was satisfied he should be granted a s 11 certificate in relation to questions put to him regarding alleged incidents of family violence. During her oral evidence, the wife effectively declined to answer a question relating to the receipt by her of various Centrelink entitlements. However, as the husband’s counsel did not seek that the wife be required to answer the question, I was not required to consider the issue of a s 11 certificate for the wife.

12Mr C has worked as a licensed property valuer with his present employer for the last 28 years. He estimated that he had undertaken over 28,000 property valuations in that time, including valuations of properties in the greater Town A area on a regular basis. Mr C undertook a valuation of the former matrimonial home as at 8 May 2019.[5] The parties chose not to update the valuation prior to the trial. I accept Mr C’s evidence that: (1) he did not consider that he was pressured by the wife to adopt a lower value or recommend that a structural report of the property be done; (2) he conducted an appropriate inspection of the property and took into account not only the general condition of the house and other improvements, but also the land value. In this case, the redevelopment potential of the land (as a result of its zoning) was a relevant factor in considering the value of the property overall; (3) as a licensed property valuer, he was not required to satisfy himself and/or certify that household appliances (such as the oven) were functioning or that the pool fence was compliant with local council requirements; and (4) given that more than three months had elapsed since he had conducted his valuation, Mr C was unable to offer an opinion as to whether the property was still valued at $435,000 as at the time of the trial. Nevertheless, he was unaware of any factors that would suggest there had been a significant change in the value of the property as at the date of the trial. I considered that Mr C was very professional, considered and helpful in giving his evidence and I had no hesitation in accepting his evidence.

LEGAL PRINCIPLES:

[5] Affidavit of Mr C Filed on 5 August 2019, annexure BC-02.

13These proceedings are determined pursuant to Part VIII of the Family Law Act 1975 (Cth) ("the Act"). I must firstly determine whether it is just and equitable to make an order,[6] having regard to the parties’ rights and interests in their existing property.[7] If I so determine, then I must consider the factors set out in the legislation.[8] In this case both parties maintained and I am satisfied that having regard to their property interests, it was just and equitable to make an order by way of alteration of property interests. I am satisfied that the parties separated on a final basis in March 2010 and have subsequently been divorced. Both parties sought to sever their financial relationship with each other.

FACTUAL BACKGROUND:

Introduction:

[6] Refer to section 79(2) of the Act.

[7] Stanford v Stanford (2012) 247 CLR 108.

[8] Refer to section 79(4) of the Act.

14The husband was born in Perth in 1957. The wife was born in United Kingdom in 1957. The wife and her family immigrated to Perth when she was 12 years old. The parties first met in 1978 and dated for about two years before going their separate ways. In October 1987, the parties renewed their relationship and were married [in early] 1988. There are three (now adult) children of the marriage, namely [Child A] (26), [Child B] (25) and [Child C] (20).

15I am satisfied that the parties’ marriage was volatile and marred by ongoing arguments, confrontations and periods of separation between them. I am satisfied that the husband would regularly leave the family home for days or weeks at a time and stay with friends, particularly after a major argument or confrontation between the parties. The parties also had a lengthy period of separation between 2004 and 2006, before reconciling. I am also satisfied that at times during their marriage, each party behaved inappropriately towards the other and/or in a manner which constituted family violence. For example:

a)The husband acknowledged that during or after one confrontation between the parties, he smashed the headlight of the wife’s motor vehicle.

b)The wife acknowledged that at times during their confrontations she “laid hands” on the husband, albeit she maintained in self-defence.

c)I am satisfied that at times during the period when the parties were separated between 2004 and 2006, the wife harassed the husband, for example: by attending at his home uninvited (on one occasion, leading to her being arrested by the police) and by telephoning the husband and/or his former employer at work to such an extent that the husband was dismissed from his employment.

16However, I am not satisfied on the available evidence that the wife established to the requisite standard that the husband subjected her to a course of violent conduct and/or family violence during and after their relationship, as contended by her, or that the effect of the violence was to make her contributions more onerous or arduous.[9]

Financial arrangements in 1987 and during the marriage:

[9] Kennon & Kennon (1997) FLC 92-757; Keating & Keating (2019) FLC 93-894.

17At the commencement of cohabitation in 1987, the husband was running his own [contracting] business and the wife had some [business] qualifications but was working at the time as [an] [administrator]. The parties had no significant assets or liabilities. During their marriage, the husband was the primary income earner. For most of the parties’ marriage, he worked as a [contractor] for various employers. The wife was the primary homemaker and parent. I am also satisfied that:

a)The wife worked to a limited extent at various times during the marriage […] and she contributed her earnings for the benefit of the family. The wife also received various Centrelink entitlements, including “child endowment” payments for the children and a disability/carer’s allowance for Child B, who suffers from a [medical condition].

b)The husband made some contributions as a parent and homemaker.

c)Both parties made some contributions in relation to improving and maintaining their various properties over the years, including mowing lawns and tending to gardens. However, I consider that both parties exaggerated the extent of their own contributions whilst minimising the extent of the other party’s contributions in this regard. During the trial considerable attention was devoted to the issue of various alleged improvements the husband made to the former matrimonial home and whether the wife was required to get contractors into the property afterwards to correct the husband’s alleged faulty and dangerous workmanship and render the property safe. Having regard to the unsatisfactory nature of both parties’ evidence, I am not satisfied that: (1) the husband’s work to the property actually “improved” the property; or (2) that the husband’s “improvements” were dangerous or unsafe. However I am satisfied that after the husband vacated the property, the wife incurred expense in having further work done to the husband’s “improvements”.

18During the marriage, the husband occasionally experienced periods of unemployment or under-employment. The parties maintained separate bank accounts and, except for various loans that were in joint names, did not establish any joint bank accounts. Generally the husband used his modest income to meet the major expenses for the family, including the mortgage payments, rates and taxes on the parties’ properties, utilities bills, insurance bills for the parties’ properties and motor vehicles, school fees and other major expenses in relation to the children’s education. The wife generally used her very modest income to meet other household expenses, including purchasing clothing for herself and the children and gifts for the family and friends. Both parties contributed to the purchase of food and household supplies for the family.

19Given the parties’ very modest financial circumstances, I am satisfied that the family’s budget was “tight” and the parties were generally unable to accumulate any significant savings. In particular, I am not satisfied that there was any cogent evidence from which I could find that the husband established overseas bank accounts or secreted money overseas. I considered that the wife’s assertions in this regard were entirely speculative and without any real or proper foundation.

Significant financial events:

20In late 1987, the parties purchased a residence in [Suburb B]. The parties were able to raise a small deposit and borrowed the balance by way of a mortgage. The parties sold the Suburb B property in 1991 for $95,000.[10]

[10] Exhibit A1, page 26 (noting that Exhibit A1 is actually a book of the documents referred to in the husband’s trial affidavit, but not annexed to that document. The book of documents was paginated to continue from the last page of the husband’s trial affidavit, and hence the first page of Exhibit A1 is numbered 26).

21In 1991, the parties moved to Town B. They jointly purchased their next residence in B Road, Town B for $72,000.[11] To complete the purchase, the parties used the net proceeds of sale of the Perth property and obtained a mortgage from Bank [A] of approximately $20,000.[12] In October 1995, the parties purchased an investment property located in [Y Street], Town B for $60,000.[13] I accept the husband’s evidence that the parties financed the purchase by way of a loan secured by mortgages over both the Y Street and B Road properties.[14]

[11] Exhibit A1, pages 27 and 28.

[12] Husband’s trial affidavit filed on 29 March 2019, [31].

[13] Exhibit A1, page 29.

[14] Husband’s trial affidavit filed on 29 March 2019, [36].

22Sometime after the parties moved to Town B, the wife became concerned that the B Road property was being damaged by [activity on a neighbouring property]. Thereafter, the wife effectively commenced a “campaign” against the [neighbour], including lobbying politicians and gathering information to support a future legal action against the [the neighbour]. In 1997, the parties instructed solicitors to commence an action in the Supreme Court of Western Australia against the [neighbour]. In 1998, the parties’ claim was settled, in summary, on the basis that the parties transferred their interest in the B Road property to the [neighbour] on payment of $90,000; and the [neighbour] paid the parties the further sum of $80,000, including to assist with their relocation costs.[15]

[15] Wife’s trial affidavit filed on 5 June 2019, pages 592 to 602; Exhibit A1, page 30.

23The husband conceded that the wife was primarily responsible for pursuing the legal action against the [neighbour], albeit he assisted to a limited extent by paying some telephone bills and equipment hire costs. I am satisfied that the wife was the driving force behind the litigation, and that over the years she devoted significant time and effort, for example, to gather the necessary information to build a successful case. Her efforts in this regard significantly improved the overall financial position of the parties.

24The parties used the settlement payout primarily to:

a)Repay the remaining home loans on the B Road property;[16]

b)Pay the amount of $15,588 in reduction of the mortgage over the Y Street property;[17]

c)Purchase their new residence in Town C for $135,000,[18] unencumbered; and

d)Meet their moving costs.[19]

[16] Exhibit A1, page 31.

[17] Exhibit A1, page 31.

[18] Exhibit A1, page 32.

[19] Husband’s trial affidavit filed on 29 March 2019, [47].

25In March 2001, the parties sold the Y Street property for $68,000 and after paying off the sale costs and balance owing on the mortgage, received net proceeds of $14,901.71.[20] Although there was some dispute as to whether it was the wife or the husband who ultimately received the funds into her/his bank account, I am satisfied that the funds were most likely subsequently spent on meeting the family’s ongoing living costs.

[20] Exhibit A1, pages 29 and 33.

26In 2003, the parties purchased two properties in the [greater] Town A area: the former matrimonial home for $225,000;[21] and a residential investment property in [Suburb D] for $145,000.[22] The former matrimonial home was purchased in the joint names of the parties. In relation to the Suburb D property, the parties originally made an offer to jointly purchase the property, which was accepted. Subsequently, a further offer was made to purchase the property in the husband’s sole name, which was also accepted. The Suburb D property was ultimately registered in the sole name of the husband. Although the wife maintained that the circumstances that led to the Suburb D property being registered in the husband’s sole name were highly suspicious, I am not satisfied that this was the case. I considered that the husband’s explanation (that the second contract was entered into after the parties received accounting advice that it was more tax effective for the property to be purchased in his sole name, given that he was the primary income earner, rather than in the joint names of the parties) was plausible.

[21] Exhibit A1, page 34.

[22] Exhibit A1, page 35.

27In order to fund the purchases of the former matrimonial home and the Suburb D property, the parties borrowed the full amounts required from Bank [B], secured against the properties and with the Town C property also used as collateral security.[23] In February 2004, the parties then sold the Town C property for $165,000.[24] The net proceeds of $164,157.22 were paid to the Bank B in reduction of the home loan over the former matrimonial home.[25]

[23] Wife’s trial affidavit filed on 5 June 2019, pages 635-649.

[24] Exhibit A1, page 32.

[25] Exhibit A1, page 36.

28The parties separated in 2004 for a period of approximately two years. The wife and children remained living in the former matrimonial home and the husband moved into the Suburb D property. The parties reconciled in 2006 and the husband moved back into the former matrimonial home.

29In 2009, the husband sold the Suburb D property for $310,000.[26] After fully discharging the mortgages over the Suburb D property and the former matrimonial home, the husband received the remaining net proceeds of $66,722.64 into his bank account.[27] I am satisfied that over time (both before and after the parties’ final separation in March 2010), the husband used the funds to meet various family related expenses, including but not limited to: approximately $10,000 to pay a private hospital bill for the wife’s hysterectomy, approximately $10,000 for a contractor to install solar panels at the former matrimonial home, significant dental / orthodontic costs for the children and general living costs for the family.[28]

[26] Exhibit A1, page 35.

[27] Exhibit R3; the wife’s trial affidavit filed on 5 June 2019, page 618.

[28] Husband’s trial affidavit filed on 29 March 2019, [68] and [69].

30In or about 2009, the wife sued a former employer. In February 2010, the wife was awarded damages and penalties totalling $39,219.34 for unpaid income and other benefits.[29] There was little or no evidence as to how the wife dealt with the net funds, after payment of any legal costs. However, I consider it most likely she used the funds over time to meet various household expenses for herself and the family.

Final separation and relevant financial events after separation:

[29] Exhibit A1, pages 63-82. The wife received approximately $36,300 in damages for unpaid wages and penalties, and the balance to her superannuation fund in damages for unpaid superannuation contributions and loss of earnings thereon.

31I accept the husband’s evidence that in March 2010, the wife informed him that their marriage was over and he accepted that was the case. I am satisfied that the parties thereafter lived separately and apart under the one roof until February 2018, when the husband moved out of the former matrimonial home. For the purposes of the trial, the wife appeared to initially maintain that the parties continued in their marriage and did not finally separate until February 2018. However, her evidence about the issue was confused, inconsistent and ultimately not persuasive. For example, the wife could not explain why she did not instruct her solicitor at the time to dispute the husband’s divorce application, which specified that the parties finally separated in March 2010, and instead, allowed the divorce application to proceed on that basis.

32After their separation in March 2010, the husband continued to work on a contractual / casual basis as a contractor for various employers and earned a modest income. He was also unemployed at various times. The wife continued to receive various Centrelink entitlements.

33After March 2010, I am satisfied that the husband continued to meet some of the outgoings in relation to the former matrimonial home,[30] including but not limited to the majority of the utilities bills and some of the weekly household shopping. The husband also continued to pay the major medical and dental expenses for the family. Each party otherwise largely financially maintained themselves. Neither the husband nor the wife paid the shire rates for the former matrimonial home after approximately March 2010 (or the water rates after approximately 2013), resulting in large arrears building up over time.

[30] Exhibit A1, pages 42-54.

34In or about 2014, the wife commenced a small [retail] business from home known as “[Business A]”. She also continued to receive various Centrelink payments.[31]

[31] For example, as at February 2014 the wife received various pension entitlements totalling $1,267.80 per fortnight – refer to the wife’s trial affidavit filed on 5 June 2019, pages 408-411.

35In October 2014, the husband received an inheritance of $97,734.50 from his late mother’s estate. I am satisfied that the husband applied the funds to purchase the [Vehicle A] motor vehicle, purchase a guitar and amplifier, paid for holidays [overseas],[32] paid further dental / orthodontic and other costs for the children and over time, deposited the amount of approximately $48,000 in a [P Trust] share investment account.

[32] The husband paid for the wife and two of the children to also travel with him to [overseas]. The husband paid for the wife to also travel with him […] to attend a family wedding: see paragraphs [75]-[77] of the husband’s trial affidavit filed on 29 March 2019.

36On 4 February 2018, the husband transferred the amount of $5,000 to the wife’s bank account.[33] I accept the wife’s evidence that she had requested the husband to provide her with some additional funds so that she could take the children on a holiday and he then agreed to transfer $5,000 into her account for this purpose. I am not satisfied that there was any agreement between the parties that the funds would be treated as an advance on the wife’s property settlement entitlements. Shortly afterwards, the husband moved out of the former matrimonial home.

[33] Refer to Exhibit A1, page 55.

37The husband commenced these property proceedings in July 2018. Procedural orders were made by the Court on 13 September 2018, including for the parties to attend a Conciliation Conference. On 10 October 2018 the wife filed her responding documents.[34]

[34] It appears the wife initially attempted to file her responding documents in the Magistrates Court at Town A on about 10 September 2018. Those documents were then ultimately filed in the Family Court of Western Australia on 10 October 2018.

38The parties attended the Conciliation Conference on 16 January 2019,[35] by which time the wife was self-represented. No agreement was reached. Trial directions were then made by the Registrar, and the matter was ultimately listed for a trial before me in the judicial circuit in Town A in the week commencing 14 October 2019.

[35] I note the Conciliation Conference file note incorrectly records the date as 16 January 2018.

39At the time of the trial, the wife continued to live in the former matrimonial home in Town A. She ran her online retail business, from which she earned minimal income, and otherwise did not engage in gainful employment. She was in receipt of the Newstart allowance from Centrelink. [Two of the parties’ three children] continued to live at home with the wife. The husband lived in rental accommodation in Perth with his new partner. He worked on a casual basis as a [contractor].

EXISTING INTERESTS IN PROPERTY:

40I am satisfied that the property interests of the parties is as set out in the following Schedule:

Assets	$ Value[36]
1	Former matrimonial home	$435,000
2	Husband’s [Bank Account A]	$12
3	Husband’s [Bank Account B]	$12,780
4	Husband’s [Bank Account C]	$11,805
5	Wife’s [Bank Account A]	$92
6	Wife’s [Bank Account B]	$58
7	Wife’s [Bank Account C]	$0
8	Wife’s [Bank Account D]	$1
9	Husband’s [Vehicle A]	$8,000
10	Wife’s [Vehicle B]	$500
11	Wife’s online business	$0
12	Husband’s [P Trust] Managed Share Portfolio	$23,807
13	Wife's household furniture, jewellery & personal effects	$4,000
14	Wife's [Chattels A]	$200
15	[Chattel B]	$0
16	Husband's tools of the Trade & Musical Instruments	$5,000
17	$5000 payment to Wife in early 2018	$0
18	[Chattels C]	$500
19	Husband's paid legal fees	$0
20	Wife's paid legal fees	$0
Liabilities
21	Debt to Legal Aid WA - Wife	-$2,201
22	Outstanding shire rates	-$11,915
23	Outstanding Water Corporation rates	-$5,239
24	Wife’s [plumbing] accounts	$0
25	Wife's loan from her father ($17,392)	$0
26	Wife’s loan from [Child A] ($467)	$0
Superannuation interests
27	Husband's superannuation	$102,747
TOTAL	$585,147

[36] Rounded up or down to the nearest $.

41Save for the following items, the parties either agreed or did not dispute the Schedule.

42 Item 1: The wife did not accept Mr C’s valuation of the former matrimonial home at $435,000. However, for the reasons identified by me in paragraph 12 of these reasons, I accept Mr C’s evidence in this regard. In the absence of an updated valuation, I intend to accept that the value of the former matrimonial home is $435,000.

43 Items 9, 10, 11, 13, 14, 15, 16 and 18: The parties did not agree the values of their respective motor vehicles, furniture, tools, other personal effects and the wife’s hobby business. Little, if any, attention was given to these issues in the lead up to or during the trial, including either party requesting the other to obtain valuations of the disputed items. In Khademollah and Khademollah [37] Finn J observed:

There is a view in this Court that in property settlement proceedings, the Court should not concern itself unduly with issues relating to chattels. I do not necessarily share that view, particularly in cases where the chattels are valuable or have significance to the parties. However, the onus lies on the party who is concerned about the disposition of chattels, or at least concerned to see that an adjustment be made for the value of the chattels in the overall property settlement, to put evidence before the Court of the value of the chattels in order that the Court may satisfy itself that it is not devoting its scarce resources to the resolution of disputes about assets of no or relatively minimal value. There was apparently no such evidence in this case.

[37] Khademollah and Khademollah (2000) FLC 93-050, [32] (per Finn J).

44In Yeates (as executor for Mr Yeates) & Yeates[38] Thackray CJ cited the above comment with approval and said:

I have consistently applied Finn J’s remarks as a practical and principled means of dealing with [disputes regarding chattels]. Absent refusal on the part of the party in possession to make the item available for valuation, I consider the party who asserts the higher value should bear the onus of proving it. Without such proof, the matter can only be resolved on the basis of the admission against interest made by the party who asserts (without proof) the lower value.

[38] Yeates (as executor for Mr Yeates) & Yeates [2013] FCWA 117, [92].

45I agree with the observations of both Finn J and Thackray CJ. I intend to adopt the husband's admissions against interest in relation to the values of his items and the wife's admissions against interest in relation to the values of her items.

46 Item 12: The husband used approximately $48,000 of his inheritance to invest in the P investment. As at June 2018, the value of the P investment had increased to approximately $83,000. After that time and up until the trial, the husband withdrew various amounts totalling approximately $50,000 from the P investment, including to pay his litigation costs. The parties agreed that at the time of the trial, the value of the fund was $23,807.08.

47The husband maintained that I should exclude the current value of the P investment from Schedule and instead, treat it as a financial resource of the husband. The approach of excluding existing property interests from the asset pool, or otherwise treating such interests as financial resources, has recently been criticised by the Full Court as leading to error.[39] I am satisfied that the P investment should be included in the Schedule in the amount of $23,807.

[39] Holland & Holland (2017) FLC 93-798, 77,590; Anson & Meek (2017) FLC 93-816, 77,884 (per Murphy J).

48 Item 17: The husband maintained that the $5,000 he paid to the wife in or about February 2018 should be treated as an interim property settlement payment to her. However, I am not persuaded that I should do so. I am satisfied that the husband gave the funds to the wife, at her request, so that she could pay for a holiday for herself and the children. The funds were subsequently spent by the wife. There was no evidence to suggest that the parties discussed and/or agreed that the funds were to be paid to the wife as and by way of an advance on the wife’s eventual property settlement entitlements.

49 Items 19, 20, 25 and 26: The wife maintained that: (1) the husband had spent the amount of approximately $55,000 on his litigation costs, by drawing down on the P investment, and (2) the funds should also be “added back” into the Schedule. I am not satisfied on the available evidence that the husband did spend $55,000 on his litigation costs. The husband’s solicitor’s costs notification letter recorded that up to and including 14 October 2019, the husband had paid $43,600 in litigation costs.[40] (In addition, the husband will incur further litigation costs in relation to the trial). Although the husband’s solicitor’s cost notification letter recorded that the source of the funds for payment was from “personal exertion”, the husband conceded during his oral evidence that the funds derived from the P investment.

[40] Exhibit A7.

50Over the course of the proceedings, the wife instructed three different lawyers to act on her behalf. The wife’s paid litigation costs totalled $18,156.34. I am satisfied that: (1) the wife’s father lent her the amount of $16,892 to pay her first lawyer; (2) […] Child A lent her the amount of $467 to pay some subpoena costs; and (3) the wife paid her second lawyer from her income over time. In addition, the wife still owes a third lawyer the amount of $1,337.60. I accept the wife’s evidence that she still owes her father and Child A the amounts set out above, she is expected to repay the debts and the funds were not gifts to her. Although the wife maintained that she owed her father an additional $500 in relation to her litigation costs, I am not satisfied on the available evidence that this was the case.

51The Court has a wide discretion conferred by the Act to deal with the question of legal fees in a way that is just and equitable.[41] In this case, I am not satisfied it is appropriate to add back the paid litigation costs (or the loans in relation thereto). In my view, the most appropriate way to take this matter into account is in my assessment of the s 75(2) factors.

[41] See for example Chorn and Hopkins (2004) FLC 93-204; Hart and Hart [2013] FCWA 110.

52 Item 24: The wife maintained that two small outstanding accounts should be included in the Schedule. The accounts appeared to relate to a water account and a plumbing account for the former matrimonial home. Little, if any, attention was given to the issue during the trial. In the circumstances where the wife has been in sole occupation of the former matrimonial home since February 2018 and the accounts appear to have arisen as incidental to her occupation of the property, I am not satisfied it is appropriate to include such liabilities in the Schedule.

SECTION 79(4) (a), (b) (c) FACTORS:

53The husband maintained that having regard to the facts that: (1) he was the primary breadwinner during the marriage; (2) he maintained the parties’ properties during the marriage; and (3) he received an inheritance of nearly $100,000 in 2014, part of which was used for the benefit of the family and part of which was used to acquire assets which are reflected in the parties’ existing property, the Court should assess contributions as to 65 per cent to him and 35 per cent to the wife. The wife disputed the husband’s submission, maintaining that he significantly undervalued her contributions. I concur with the wife’s assessment in this regard.

54In my view, contributions should be assessed as being equal, having regard to the following factors:

a)Neither the husband nor the wife had any significant assets or liabilities at the commencement of their relationship.

b)During their long marriage, each party made significant contributions in their respective spheres. The husband was the primary income earner and earned a modest income. He also assisted with the care of the children and the homemaking duties to some extent: when he was not otherwise at work or staying away from the family home for days, weeks or years at a time. On the other hand, the wife was the primary homemaker and parent to the three children, including Child B who suffers from a [medical condition] and in relation to whom the wife received a disability / carer’s pension. She also worked to a limited extent and contributed her very modest income to the family’s expenses.

c)After the parties’ final separation under the one roof in March 2010, until February 2018 when the husband moved out of the former matrimonial home, both parties continued to financially support the household to some extent from their respective resources.

d)The husband made a significant financial contribution through the receipt of his inheritance after the parties' separation. This included acquiring assets (such as the Vehicle A motor vehicle and the P investment) and meeting various family expenses. However, the wife also made a significant financial contribution through her work over many years to build a successful legal case against the [neighbour] in Town B. The wife’s efforts in this regard significantly improved the overall financial position of the parties. As the husband conceded, the settlement allowed the parties to purchase a home, mortgage free, for the first time.

SECTION 79(4)(e) / SECTION 75(2) FACTORS:

55I will now consider the relevant factors as required by the legislation. If I do not refer to a factor, it is because I consider the matter is not relevant in this case.

56The husband is currently 62 years old. He has worked as a contractor for many years. The husband’s evidence at trial about his current working arrangements and his current income was unsatisfactory. In his trial affidavit, the husband deposed that he was unemployed and was reliant upon his savings to support himself. At the trial, the husband did not update his evidence in relation to his employment when given the opportunity to do so.[42] It only became apparent after the husband’s case had closed that he had obtained further employment at some time prior to the trial. Nevertheless, it was not in dispute that as a contractor, the husband was able to earn a modest income of between $50,000 and $60,000 per annum at best.

[42] The wife also did not cross-examine the husband about his income earning capacity: including what attempts the husband had made to obtain employment, whether he was in employment and if so, what was his current income.

57The husband maintained that he suffered some aches and pains that he managed by doing physio exercises at home. The husband also maintained that he (1) had been diagnosed with a heart arrhythmia resulting in occasional dizzy spells and shortness of breath;[43] (2) experienced occurrences of feeling faint;[44] and (3) experienced intermittent numbness down his left leg and lower back pain on occasion.[45] Despite this list of ailments, some of which I am satisfied the husband has suffered for many years, there was no evidence that the husband was unable to continue to exercise his income earning capacity as a contractor through to retirement age. The husband estimated that he had “at best 5 years working life left”, and I am satisfied that this is likely the case.

[43] Paragraphs 184 and 185 of the husband’s trial affidavit.

[44] Paragraph 186 of the husband’s trial affidavit.

[45] Paragraph 187 of the husband’s trial affidavit.

58The wife is currently 62 years old. The wife maintained that she was diagnosed with Post Traumatic Stress Disorder in 2018, and continues to suffer from that condition. However, the husband did not accept the wife’s evidence in this respect and the wife did not lead any expert medical evidence in relation to the matter. Historically, the wife worked in a number of different [professions]. Although the husband submitted that the wife could obtain full-time employment and earn a reasonable income, I am not persuaded that this is the case for the following reasons. Firstly, I accept the wife’s evidence that a number of her qualifications are out of date and that she would have to effectively re‑train before being able to seek such work again. Secondly, I am satisfied that the reality is that throughout the parties’ long marriage and after their separation, the wife only engaged in paid employment to a very limited extent and was otherwise primarily engaged as a homemaker and parent. Thirdly, I accept the wife’s evidence that she has been primarily financially dependent on Centrelink entitlements for many years and that in recent times, she has been excused from her “job search” obligations due to her ongoing health issues. The wife did concede that she may be able to increase her income somewhat by building up her retail business over time. I am satisfied that the wife has a very limited capacity for gainful employment and that any income she is able to generate is limited, compared with that of the husband.

59The husband lives with his partner in rental accommodation in Perth. The husband’s partner earns about $1,250 per week.[46] As noted earlier, there was little (if any) evidence before the court as to how the husband and his current partner had arranged their finances. On the other hand, the wife lives with the parties’ two [children], Child A and Child B, in the former matrimonial home. Child A and Child B each earn about $500 per week and “both [Child A and Child B] contribute to paying utility payments/accounts”.[47]

[46] Husband’s financial statement filed on 29 March 2019, item 17.

[47] Wife’s financial statement filed on 5 June 2019, item 17.

60Although I am satisfied that the husband paid a total of $43,600 in litigation costs up to 14 October 2019 from funds that ultimately derived from the P investment, I do not accept the husband’s evidence that he paid his legal invoices in 2019 by using the specified large cash withdrawals from his bank account in and/or after January 2019. I am unable to make any findings on the evidence as to how the husband dealt with this cash. The value of the P investment has been significantly depleted by the husband, including to pay his litigation costs, and accordingly, the available property pool for division between the parties has also been depleted. I consider that this is a significant factor.

61The husband’s position was that the Court should make whatever adjustment was required for s 75(2) factors to enable him to receive a 55 per cent division of the property of the parties overall. Given the findings I have already made in relation to contributions, this would mean that I would also have to find that there should be a further five per cent adjustment for s 75(2) factors in the husband’s favour. On the other hand, the wife’s position was that s 75(2) factors should weigh heavily in her favour. Weighing the various factors identified by me I am satisfied that there should be 10 per cent adjustment in favour of the wife, to take into account: (1) the husband’s greater income earning capacity than that of the wife (albeit for a very limited number of years, given the husband’s age and likely retirement date); and (2) his depletion of the P investment, including to meet his litigation costs.

SECTION 79(4)(d),(f) & (g) FACTORS:

62The orders proposed by the husband and the wife have no impact on the earning capacity of either party. I have already dealt with the remaining factors, in so far as they are relevant.

DISCUSSION AND CONCLUSIONS:

63I intend to order that the property interests of the parties be divided as to 60 per cent to the wife and 40 per cent to the husband. The wife conceded that she would be unable to raise any sum to pay out the husband his entitlements so that she could retain the former matrimonial home. Accordingly, I am satisfied that the property should be sold and from the proceeds of sale the parties should pay the costs of sale, including agent’s commission, and the adjustment of the rates and taxes (including the arrears). Both parties should bear the liability for the outstanding rates and taxes (to be deducted from the proceeds of sale of the property). Both were living in the property over the majority of the time that the debts accrued. Both had their own separate income sources and could have made arrangements to pay part or all of the liabilities during this time, but did not.

64The exact net proceeds of sale available for division between the parties will only be known on the settlement of the sale of the property. However, assuming that: (1) the property sells for $435,000; (2) the estimated sale costs are $15,000 to $18,000; and (3) the arrears in council and water rates are paid, then the estimated net proceeds of sale will be in the region of $400,000. Having regard to the other assets, liabilities and superannuation entitlements of the parties, this means that the husband would receive approximately $62,000 of the net sale proceeds and the wife would receive approximately $338,000 of the net sale proceeds to achieve an overall division of the net asset pool on a 60 / 40 per cent basis in the wife’s favour.

65I am not satisfied that the husband should be solely or partly responsible for the wife’s debt to Legal Aid Western Australia, which is secured by caveat over the former matrimonial home. It was common ground that this debt related to the wife’s legal fees incurred by her during the parties’ separation between 2004 and 2006. There was no suggestion that the husband was ordered to pay the wife’s costs of those proceedings. The wife should be solely responsible for the liability and repay it from her share of the net proceeds of sale.

66The wife agreed that the husband should receive the Chattels C collection which remained in her possession. Although the husband sought that the wife also deliver up to him some other minor items, including Chattel B, I am not persuaded on the available evidence that she should be required do so. I am satisfied that during the marriage, it was the wife who was actively engaged in acquiring antique furniture and other collectables. I am satisfied that she should retain them. Aside from the net proceeds of sale of the former matrimonial home and the payment by the wife of her debt to Legal Aid Western Australia from her share thereof, the parties will otherwise receive / retain the assets and superannuation entitlements as set out in the following table:

Husband	$ Value[48]	Wife	$ Value[49]
Bank Account A	$12	Bank Account A	$92
Bank Account B	$12,780	Bank Account B	$58
Bank Account C	$11,805	Bank Account C	$0
Vehicle A	$8,000	Bank Account D	$1
P investment	$23,807	Vehicle B	$500
Tools of the Trade & Musical Instruments	$5,000	Wife’s online business	$0
Chattels C	$500	Household furniture, jewellery & personal effects	$4,000
Husband's superannuation	$102,747	Chattels A	$200
Chattel B	$0
TOTAL	$164,651	TOTAL	$4,851

[48] Rounded up or down to the nearest $.

[49] Rounded up or down to the nearest $.

67Pursuant to the settlement, the wife will receive the vast majority of the net proceeds of sale of the former matrimonial home. She will be required to discharge her debt to Legal Aid Western Australia and repay the debts to her father and Child A. She will then have a lump sum of approximately $300,000 with which to re-accommodate herself. She will otherwise retain her very modest assets. On the other hand, the husband will receive a small lump sum from the net proceeds of sale of the former matrimonial home. He will also retain his savings, investments, superannuation, which together with his other modest assets, total nearly $165,000. In the circumstances, I am satisfied that the proposed financial division is just and equitable and otherwise proper.

SPOUSAL MAINTENANCE:

68An application for spousal maintenance is made pursuant to s 74 and s 72 of the Act. Section 72 of the Act has two pre requisites; firstly that the applicant is unable to support himself/herself adequately, whether by reason of having the care and control of a child of the marriage under 18 years, by reason of age or physical or mental incapacity for appropriate gainful employment or for any other adequate reason; and secondly that the respondent is reasonably able to maintain the applicant. Section 74 of the Act enables the court to make such order as it considers proper and the court must have regard to the provisions of s 75(2) of the Act.[50]

[50] Bevan & Bevan (1995) FLC 92-600, 81,979.

69I am not satisfied that it is appropriate to make any order in relation to spousal maintenance and propose to dismiss the wife’s application, in short, for the following reasons:

a)The wife’s application was effectively not formed, developed or pursued by her during the trial. For example, throughout the trial, the wife was unable to specify how the actual order sought by her was calculated. Aside from referring to the issue in very general terms in her opening address and in her closing submission, the wife otherwise did not explore the issue at all during the trial, including during her cross-examination of the husband.

b)I am not satisfied on the available evidence that the wife satisfied the second of the prerequisites required by s 72: that is, that the husband is reasonably able to maintain the wife.

ORDERS:

70I propose to issue these reasons from chambers in order to give the parties an opportunity to consider them and my proposed orders. During the trial, little time or attention was given to the issue of what specific orders should be made in relation to the marketing and sale of the former matrimonial home. I am not satisfied that the orders sought by the husband in this respect were appropriate, for example, as being unduly prescriptive and/or likely to lead the parties into further dispute.[51] I am also not satisfied that the short timeframes proposed by the husband were reasonable, particularly given that some works may be required to be done to the property to ready it for sale and the closeness to the Christmas festive period. Subject to the parties having liberty to make further submissions in relation to the terms and conditions of sale and settlement of the property, I propose to make the following orders:

[51] For example, I did not consider it appropriate to make an order as sought by the husband that the listing agent have the ability to effectively force the parties to accept a particular offer (in the event of disagreement between the parties in this regard), given that the listing agent also has a commercial interest in the matter, through his entitlement to receive a selling fee.

1.Within 60 days of these orders being made, the parties do all acts and things and sign all documents necessary to jointly list for sale the property located [in Town A] (the “[Town A Property]”) upon such terms and conditions as the parties jointly agree, including but not limited to the completion of any reasonable improvements and/or repairs required to the [Town A Property] to render it ready for sale; and failing agreement, the parties have liberty to apply to the court in relation thereto.

2.Upon settlement of the [Town A Property], the net proceeds of sale be disbursed as follows:

a)in payment of the costs of sale, including agents’ commission;

b)in adjustment of the rates and taxes in relation to the property, including payment of any arrears;

c)in payment of the balance remaining, so as to effect an 60 per cent division of the property of the parties to the wife and a 40 per cent division of the property of the parties to the husband, having regard to the value of the items of property to be retained by each party as set out in paragraph 66 of the reasons for judgment; and

d)from the wife’s share of the proceeds to be received by her pursuant to the immediately preceding sub‑paragraph, the wife do discharge the debt owing by her to Legal Aid Western Australia, secured by caveat against the title to the [Town A Property].

3.Within seven days the Respondent shall advise the Applicant in writing of a date (falling within the next 28 days) and time (between 9:00am and 6:00pm) for the Applicant and/or the Applicant’s nominated agent to collect from the [Town A Property], the [Chattels C].

4.Unless otherwise specified in these orders:

a)each party shall be solely entitled to the exclusion of the other party to all other property of whatsoever nature and kind in the possession and control of such party as at the date of these orders; and

b)each party shall be solely liable for and indemnify the other party against any liability for any liabilities in the name of such party and/or encumbering any item of property to which such party is entitled pursuant to these orders.

5.All documents produced by named persons pursuant to subpoena be returned or destroyed in accordance with the request from the named person on the expiration of 42 days from this order.

6.In relation to material tendered as an exhibit into evidence in these proceedings:

a)all parties must collect the exhibits tendered by them (“their exhibits”), from the Chambers of the Honourable Chief Judge Sutherland, at least 28 days, and no later than 42 days, from today’s date;

b)all parties must contact the Chambers of Honourable Chief Judge Sutherland to arrange the collection of their exhibits; and

c)in default of compliance with subparagraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the court without notice to the parties.

7.In the event of an appeal being lodged prior to the expiration period of 42 days, paragraphs 5 and 6 above do not apply.

8.The matter be removed from the Judge’s Defended List.

9.All outstanding proceedings be and are hereby dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

KV
Associate

15 NOVEMBER 2019