Coulbeck and Pins

FAMILY COURT OF AUSTRALIA

COULBECK & PINS

[2018] FamCA 156

FAMILY LAW – PROPERTY SETTLEMENT – De facto relationship – length of relationship – add-backs – nature of contributions.

Family Law Act 1975 (Cth) ss 4AA, 90SF

Dickons & Dickons (2012) 50 Fam LR 244
Jonah v White (2012) 48 Fam LR 562

APPLICANT:

Ms Coulbeck

RESPONDENT:

Mr Pins

FILE NUMBER:

AYC

329

2014

DATE DELIVERED:

15 March 2018

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Gill J

HEARING DATE:

31 May 2017 and 1 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Harper

SOLICITOR FOR THE APPLICANT:

Creaghe Lisle

COUNSEL FOR THE RESPONDENT:

Mr McKeown

SOLICITOR FOR THE RESPONDENT:

Joseph Tallarita

Orders

That the Respondent, Mr Pins, pay to the Applicant, Ms Coulbeck, the sum of $65,000 within 60 days of the date of these Orders.
(a) Should the Respondent fail to pay the full amount owing under Order 1 within the specified time, interest shall accrue on the outstanding amount at the prescribed rate of interest under the Family Law Rules 2004 (being 7.50 per cent at the time of these Orders).
That the Respondent pay to the Applicant the sum of $84,048 within four months of the date of these Orders.
(a) Should the Respondent fail to pay the full amount owing under Order 2 within the specified time, interest shall accrue on the outstanding amount at the prescribed rate of interest under the Family Law Rules 2004 (being 7.50 per cent at the time of these Orders).

note: The form of the order is subject to the entry of the order in the Court’s records.

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

note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: AYC 329 of 2014

Ms Coulbeck

Applicant

And

Mr Pins

Respondent

REASONS FOR JUDGMENT

Background

The parties to this matter are Ms Coulbeck, the Applicant, and Mr Pins, the Respondent. The proceedings concern an application to adjust their property interests following the breakdown of their de facto relationship, in which they had two children. They are in dispute about the duration of the relationship, their relative contributions, and the proper determination of the pool of property. While the assets are agreed, there is disagreement regarding debts and proposed add-backs. It may be observed that the evidence as to the debts leaves a number of loose ends.
By way of her closing submissions the Applicant seeks 30 per cent of a particularly constituted pool of property.
By way of his Amended Response the Respondent seeks that he pay to the Applicant the sum of $65,000.00 within sixty days of the date of orders.
The Applicant relies upon the following:
a)Application for Final Orders dated 7 December 2016;
b)Affidavit dated 28 September 2016; and
c)Financial Statement dated 28 September 2016.
The Respondent relies upon the following:
a)Amended Response dated 1 November 2016;
b)Affidavit dated 1 November 2016; and
c)Financial Statement dated 1 May 2016.

The Relationship

While there is no dispute between the parties that they separated on 18 July 2013, there is significant dispute about when the de facto relationship commenced. The Applicant asserts that it commenced in B Town on 1 January 2009, whilst the Respondent says that it did not commence until the end of 2011 when the parties moved in to a residence in C Town

Section 4AA De facto relationships

Section 4AA of the Family Law Act 1975 provides as follows in relation to de facto relationships:
Meaning of de facto relationship
(1)A person is in a de facto relationship with another person if:
(a)     the persons are not legally married to each other; and
(b)    the persons are not related by family (see subsection (6)); and
(c)     having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2)    Those circumstances may include any or all of the following:
(a)     the duration of the relationship;
(b)    the nature and extent of their common residence;
(c)     whether a sexual relationship exists;
(d)    the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e)     the ownership, use and acquisition of their property;
(f)     the degree of mutual commitment to a shared life;
(g)     whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h)    the care and support of children;
(i)     the reputation and public aspects of the relationship.
(3)no particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4)A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
It is necessary to consider the combination of the individual characteristics of the relationship between the parties and at what points during the relevant period various characteristics came into, or remained, in existence.
In Jonah v White (2012) 48 Fam LR 562 the Full Court approved the analysis at first instance of Murphy J, agreeing that “the proper focus of … determination was the nature and quality of the asserted relationship.” That proper focus was expanded by Murphy J at [60] as follows:
In my opinion, the key to that definition [de facto relationship] is the manifestation of a relationship where “the parties have so merged their lives that they were, for all practical purposes, 'living together' as a couple on a genuine domestic basis.” It is the manifestation of “coupledom”, which involves the merger of two lives as just described, that is the core of a de facto relationship as defined and to which each of the statutory factors (and others that might apply to a particular relationship) are directed.
And further at [66]:
The issue, as it seems to me, is the nature of the union rather than how it manifests itself in quantities of joint time. It is the nature of the union -- the merger of two individual lives into life as a couple -- that lies at the heart of the statutory considerations and the non-exhaustive nature of them and, in turn, a finding that there is a “de facto relationship.”
Here the determination of when the de facto relationship was on foot is factually enmeshed with a consideration of how the parties interacted and how they supported each other and their family in a financial and non-financial sense.
In asserting that the relationship commenced in January 2009, the Applicant says that she purchased a home in D Street, B Town and then lived there for six weeks before moving to C Town. She says that the Respondent lived with her during that six week period. He redirected his mail to her address on 13 January 2009. She concedes that he also lived at quarters at the B Town Hospital at the same time and so lived in two places at once. She asserted that he was living at her home because he brought some clothes there and constructed a bench and kept his tools there. He accepted that he erected the work bench and kept some of his belongings there.
The Respondent agreed that the parties were seeing each other although, he says, casually in December 2008. They had a sexual relationship at that time. They would stay with each other even when the Applicant’s children were with her. He accepts that the Applicant may have thought that they were in a relationship at that stage, although he says that he told her that they were not. The Respondent says that he knew that the Applicant wanted a relationship. He says that he was not prepared to make that commitment until later.
At that stage he characterised the relationship as friends who were having sex.
In February 2009 the Applicant moved to E Street in C Town. The Applicant said that the Respondent moved belongings into that home. The Respondent denied that he moved any items into those premises, and denied that he left any clothing at the premises. The Respondent worked at the B Town Hospital.
In May 2009 the Respondent took the Applicant to Adelaide to attend a family wedding together. At this time he also started travelling for various employment positions, and took another woman, Ms F, away on a trip to G Town for a week. The Applicant, he says, was suspicious and asked about the trip. He told her that they were just friends and says that he denied that he was in a committed relationship with Ms F. Perhaps inconsistently, he says that he did not hide having sex with Ms F from the Applicant.
The Respondent’s position was that the Applicant knew that he was sleeping with other women, based on undisclosed conversations he says occurred previously with the Applicant. He says that such conversations may have occurred in early December 2008 and then January 2009, so that no illusions might have been created.
The Applicant asserts that in 2008 she and the Respondent agreed to see each other exclusively. She says that she did not discover that the Respondent was in relationships with other women until later. She thought that he had broken up with his previous girlfriend prior to their relationship.
The Applicant was asked about a ‘get out of gaol free’ card that she had given to the Respondent, presumably to indicate that the Respondent would be able to have a liaison with another person despite their relationship. The Applicant explained that this had been given to the Respondent in July 2008 prior to him attending a resort in H Town. It was not clear that this had happened during the period that the Applicant expressed to be exclusive. The Respondent asserted that there were two such cards, and that one was given later in the relationship.
The Applicant accepts that both the J Street and E Street homes that she lived in prior to moving into C Town, which she says were shared with the Respondent, were leased in her name alone. She paid the bonds. The utilities were in her name. However some correspondence from the real estate agent was addressed to both the Applicant and the Respondent. During the same period of time the Respondent worked in a number of positions which followed on from one another. While he asserted that he did not live at the Applicant’s addresses, he identified no other home. A significant number of the positions were back-to-back. The Applicant accepted that the Respondent had various positions in G Town, K Town, H Town, L Town and M Town. He would return for a couple of days or a week between jobs before travelling to the next one. The Respondent accepted that the Applicant visited him at some of the places that he was working. The conclusion to be drawn is that the Respondent was using the Applicant’s home as his home base. I accept that he must have moved belongings there.
In December 2009 the Respondent travelled to New Zealand to meet up with the Applicant and the children. The Respondent spent Christmas with the Applicant and her family. At that stage the Applicant was heavily pregnant with their child and the Respondent agrees that he gave the impression that they were in a relationship.
When N was born (2010) the Respondent was working in O Town, Queensland. He flew back for the birth, staying with the Applicant. The Respondent gave a ring to the Applicant. He said that it was a thank you for bringing “this beautiful child into the world” and that the Applicant knew that the ring represented this sentiment, rather than being a symbol of commitment. He did not depose to any conversation where he made this clear. The ring was valued at $2,400. The Applicant ceased work for nine months, returning to work part time in November 2010, then full time in November 2011.
Exhibit F8 was a copy of N’s birth certificate. That birth certificate recorded Ms Coulbeck as the mother and Mr Pins as the father. Ms Coulbeck was recorded as having an address of E Street, C Town, with Mr Pins having the address of P Street, Q Town in South Australia. The Applicant accepted that she was the person who had submitted the birth registration documents. On her case this was submitted at a time in which the parties were in a genuine domestic relationship.
On 15 March 2010 the Applicant moved to J Street, C Town. She says that this was with the Respondent, albeit under circumstances where he was still travelling and working in the healthcare industry.
Exhibit F7 was correspondence from the Australian Government Family Assistance Office to the Applicant dated 26 March 2010 in relation to her family assistance payments. The payments were in relation to N. On the front page of the document under the heading “Information used for calculating your regular payment” is an entry for FTB Part A combined income, with an amount of $76,557 recorded. While the Applicant thought that this amount might reflect the combined incomes of herself and the Respondent, exhibit F1, being the Child Support Assessment of 21 June 2010, shows the Applicant’s adjusted taxable income as $55,594 and the Respondent’s as $100,687. The amount recorded corresponds neither to the Applicant’s income as seen in the child support notice, nor the combination of the Applicant’s and Respondent’s incomes. It is unclear what this combined income figure relates to, save that it does not reflect the combined income of the Respondent and the Applicant. The Respondent alleged that the Applicant was paid a single mother’s pension. She says that is false and that what she received was Family Tax Benefit and a childcare rebate.
The Applicant denied that the Respondent was paying any costs whatsoever towards N, despite her assertion that they were in a de facto relationship. She said that she had raised the issue with the Respondent, but that this did not resolve the issue.
From 21 May 2010 the Applicant obtained an assessment from the Child Support Agency in relation to child support that the Respondent would be liable to pay. It is not suggested that the Child Support Agency ever collected payments from the Respondent, but merely made assessments.
In her oral evidence her explanation for doing this was that she asserted that the Respondent was financially abusive. There is no description of any such financial abuse recorded in her affidavit material, and this explanation should not be accepted.
The assertion that the Respondent was not contributing to the care of N was contrasted with annexure K of the Applicant’s affidavit where she set out a number of payments that were made by the Respondent. In the lead up to N’s birth in February 2010, he paid an amount of $1,120 in December 2009, and continued with payments immediately after her birth in February through to October of that year in the sum of $8,819.11. The Applicant said that she put in the application in order to formalise the arrangements, despite the payments made by the Respondent.
The Respondent said that the payments were made because he wanted to do the right thing. He said that his aim was to pay amounts close to the amount assessed by the Agency.
Assessments continued to be provided in June 2010, July 2011 and October 2011. The Applicant says that she told the Agency that she did not want payments in 2010 on the basis that she and the Respondent were in a relationship at that stage. She says that she told the Child Support Agency this early in 2010, and that the continuing assessments were a consequence of the way the Child Support Agency manages its records, leading to the termination advice in June 2012. The Child Support Agency, on 22 June 2012, wrote to the Applicant terminating the assessments for N. The Applicant told the Agency at this stage that the Respondent was supporting her. This is at a date after the Respondent says that the de facto relationship had commenced, being post-December 2011.
The notable matters that arise from this evidence are that the termination of the assessments did not occur until a point in time after the Respondent accepts that he and the Applicant were living together (approximately six months after they commenced living at C Town together). Further, the application for assessment for Child Support, with the continuing assessments over a period of years, sits uncomfortably, although not necessarily inconsistently, with the assertion that the parties were living in a genuine domestic relationship.
In early 2010 the Respondent took the Applicant and N to Adelaide to spend time with his family there.
During the 2010 the Respondent worked at H Town. The Applicant visited him for a number of weekends with the children, staying with the Respondent.
The Applicant asserts that she paid a sum of $6,000 for the repair of the Respondent’s car in 2010. On her version this was a matter that occurred during the relationship. She asserts that she sought no repayment from the Respondent in relation to this amount. It was put to her, and she accepted, that this vehicle was the family car, that was, despite being owned by the Respondent, available to her for use while she was away. If this use equated to the time at which the gear box was repaired, then it was a use extended to her prior to when the Respondent says that they were in a relationship but during the time that she says that they were in a relationship.
In November 2010 the Applicant travelled to be with her dying mother in new Zealand. The Respondent also flew there to support the Applicant. At this time he did not class himself as committed, rather being very good friends. By this stage he had been moving from position to position since about July 2009, each away from where the Applicant was living. He returned from this trip to further work in R Town NSW.
The Applicant visited Adelaide with the Respondent at Christmas 2010.
Exhibit F9 was the 2008/2009 and 2009/2010 tax returns prepared by the Applicant. Exhibit F10 was the 2011/2012 tax return prepared by the Applicant. Each of these comprised an electronically completed form. The 2012 tax return was prepared following the parties moving in together at C Town. That return described the Respondent as the spouse of the Applicant. The 2009 and 2010 tax returns did not contain the same assertion. The field for “spouse” does not appear at all on the printout. When questioned about the matter the Applicant was unable to recall why the Respondent was not recorded as a spouse in either the 2009 or 2010 tax returns.
The Respondent says that he started to stay on and off at C Town (which he says he purchased in August 2010, the Applicant says in December 2010) in early 2011. The Respondent used funds borrowed against his South Australian property at Q Town to purchase C Town. The Applicant says that he stayed with her rather than at C Town, although the Respondent says that he stayed in both places as he worked on the property.
The Respondent said that in addition to the payments to support N, the Applicant would come to him with her own needs. By mid-2011 he said that he was paying about $1,500 per month by agreement.
The Applicant, in September 2011, deposited $40,000 into the Respondent’s account, he says for him to invest on her behalf. The Applicant says that it was on the Respondent’s request for monies to assist in the purchase of a holiday house. The purchase did not go ahead and she says that he retained the money, as he thought she would spend it and it would be an “investment” in the relationship. He says that he repaid $20,000 of that sum to her on 19 October 2011. The Respondent used $20,000 after the deposit to buy shares in Company S, which were disposed of post-separation. The proceeds were used by the Respondent for his own purposes. The Respondent says that this was the only mingling of their finances.

The Respondent says that they both moved into C Town in December 2011, which he says marked the start of their cohabitation “on a domestic basis.” He further says that between June 2012 and July 2013 he spent $110,000 on work on the property. They each assert significant involvement in the renovation of the premises. The Respondent denies the involvement asserted by the Applicant. However, it is notable that he was away for much of the period of the renovation on various positions. I accept significant involvement by the Applicant. She further details approximately $27,000 of expenditure by her on the renovation.[1]
[1] At Annexure J of the Affidavit of Ms Coulbeck affirmed 28 September 2016.
The Applicant accepts that the Respondent paid for groceries and eating out for herself and the children while they lived at C Town. He further paid for holidays for herself and the children to T Town and to Asia before the parties moved into C Town. These holidays and expenditure included the Applicant’s children from her previous relationship when they were staying with her.
During the time that the Applicant lived at C Town, a friend of hers, Ms U, boarded at C Town. This board was at the rate of $100 per week and the Applicant received those sums rather than the Respondent. This corresponds to a time that both said they were in a relationship.
The Respondent ceased to pay child support in June 2012, with the Agency verifying the conclusion of the obligation to pay Child Support at that time.
Exhibit F12 was a document entitled acknowledgment of debt. It appeared to have been produced in 2012 and detailed acknowledgment by the Respondent that he owed a debt of $60,000 to the Applicant. The Applicant explained that this related to a sum of $40,000 that she says that she had loaned to him for the purchase of a holiday house. The balance was said to relate to payments that she had made for the renovation of C Town. To the extent that this document was said to undermine the proposition that the parties were in a genuine relationship, the document is unable to do that. Its time of preparation corresponds with the period where both parties agree that they were in a relationship together. That is, the request was made in the context of a relationship. This means that the inference is not available that it represented the view of the wife that they were not in a relationship, and hence she required additional security in respect of the debt owed to her by the Respondent. It supports the Applicant’s case of the advance of the $40,000 and of the payment of monies to renovate C Town.
In 2012 the parties’ second child V was born. The Applicant returned to work part time in August 2013 post-separation, two days per week.
The parties disagreed about their respective contributions while living at C Town. While the Respondent said that he looked after the children in the mornings, arranging his shifts in order to avoid childcare, the Applicant asserted that she would drop the children at childcare.
On 4 December 2012 the Respondent purchased the property next door to C Town for $201,000, using funds secured against the Respondent’s property in South Australia.
On 18 July 2013 the parties separated. The Applicant obtained a child support assessment. The Respondent continued to pay the mortgage and expenses for C Town. The Applicant and children moved out on 9 December 2013. Post-separation the Respondent continued to pay an account at the local IGA supermarket that the Applicant was able to use. At that stage he was working away in H Town.
In November 2013 the Applicant received a $50,000 inheritance from her mother’s estate which she says she used to pay for living expenses. This corresponds to about the time that she and the children moved out from C Town.
Until June 2016 the children lived with the Respondent four days each fortnight. They now live with the parties on a week about basis.

When were the parties in a de facto relationship?

The parties dispute when their relationship became a de facto relationship. The Applicant says that it was from February 2009 when the Respondent moved some of his belongings into her home in B Town, while the Respondent says that it commenced when they moved into C Town together. It may be readily seen that by the stage the parties moved into C Town, they were in a de facto relationship. The question that arises is whether the de facto relationship commenced some time before this.
A number of the matters outlined above point toward a mutual commitment to a shared life, or “coupledom”. The public appearance of being in a relationship on the trip to new Zealand when the Applicant was pregnant with their first child; the presentation of a ring to the Applicant; the Respondent travelling with the Applicant to new Zealand when her mother was dying; the Respondent’s use of the Applicant’s house as a home base as he travelled to his various positions; their having a child together.
Against this there are a number of matters that point away from them being in a de facto relationship. The Applicant records them as of different addresses on the birth certificate; the application for a child support assessment by the Applicant; the lack of the description of the Respondent as her spouse in her tax returns prior to the 2012 year; the Respondent not living with the Applicant as he travelled to back-to-back positions (although failure to co reside is not fatal to the idea a de facto relationship was in existence).
The matter that removes the ambiguity from the situation is the point at which the Respondent commenced to significantly financially support the Applicant, which was by mid-2011, before they moved into C Town together. Although there is no specific date allocated to this event, it is around this time that they may be considered to be living together on a genuine domestic basis. The de facto relationship commenced in approximately June 2011.
The parties further agree that they ended their de facto relationship on 18 July 2013. While they were in a relationship from January 2009, the de facto relationship was only in existence for approximately two years.

Financial contributions

The Respondent said that he had little real idea as to his financial situation. He said that he would “just pay the accountant and let it be done.” This was despite the Respondent using MYOB to keep his financial records. He did not provide the MYOB files to the Applicant. He used the MYOB records to provide a tally of expenses through 1 December 2011 through to 18 July 2013, including the expenditure of $15,229 on eating out and takeaway food. Paragraph 62 of his trial affidavit sets out in detail the precise amounts of expenditures he said took place during the relationship, itemising expenditures such as groceries, rates, clothes for the Applicant, a cleaner, child expenses and the like. It should not be accepted that his knowledge of his finances is as naïve as he has represented. Some caution should be exercised where his assertions are unsupported.
In 2008, following the end of her previous relationship, the Applicant received a payment in settlement of property of that relationship of $250,000. She used $95,000 of this to purchase property at D Street in B Town for $325,000. She used $25,000 to refurnish her home and pay for various other items including an amount of approximately $11,000 for jewellery, leaving a balance of about $130,000 which was placed into her bank account.
The Applicant says that she retained $100,000 of this amount in a term deposit as at the point that she says the relationship commenced (January 2009).
The house at D Street was rented out for almost the entirety of her ownership of the home (save for the first six weeks) with the rent meeting the interest payments.
D Street was sold by her on 30 June 2011 for $315,000, and the net amount she received was $106,000, after payment out of the mortgage (in the sum of $194,000). The Applicant accepted that this meant that she had paid approximately $35,000 off the mortgage during the period that she owned the property (presumably taking into account sale expenses).
This means that at the start of the relationship the Applicant had $106,000 along with whatever may have been retained of her term deposit, which is unknown. It is unclear how the $130,000 (which included the term deposit) left over from the original purchase of the property was used, or whether it was in existence at this stage.
The Applicant says that the $106,000 was used to pay for her period on maternity leave, for family and living expenses, for the payment of rent and for the payment of family holidays.
At the parties moving into C Town the Respondent says he had the following items:

Respondent’s assets at the start of parties both living at C Town

Description

Value
$

a

Motor vehicle 1

3,000

b

Motor vehicle 2

24,000

c

W Street, C Town

220,000

e

P Street, Q Town SA

325,000

f

Shares

133,397[2]

g

Furniture

5,000

h

Boat

25,000

i

Aircraft

30,000

j

Superannuation

70,000

Total

835,397

[2] The Respondent conceded that he held shares to the value of approximately $75,000 as at July 2013. At [51] of the Respondent’s affidavit, he stated the amount as $133,397 at the start of the relationship.

On 6 August 2010 the Respondent drew down a $220,000 loan from W Limited.[3] This was used to purchase C Town. By 30 April 2011 the loan balance was approximately $126,000, at which point a further draw down of $60,000 was made by the Respondent.
[3] Exhibit M1.
This means that at the start of the relationship the net worth of the Respondent was approximately $649,000.
A further draw of $31,000 was made in September 2011. The loan was reduced, including by a single deposit of $130,000 in December 2011, so that by 30 November 2012 the balance was approximately $8,000. In December 2012 a further draw down of $206,000 was made. This corresponded to the timing of the purchase of the property next door to C Town.
At the date of separation (18 July 2013) the outstanding balance on the loan was $213,000.
This means that by the end of the relationship the pool of assets included the property at 2 W Street, C Town ($220,000) along with increased debt of $213,000. Further, the Respondent said that the value of the shares held by the Respondent had also reduced to $75,000 (through disposal). The aircraft had been damaged, reducing its value to $15,000, there were credit card debts of approximately $17,000 and the superannuation increased by approximately $58,000, leaving a net pool of assets of approximately $808,000.
This conflicted, although not greatly, with the Respondent’s assertion as to the position at separation:

Respondent’s assets following separation

Description	Value $
a	Shares	12,159[4]
b	2 W Street, C Town	220,000
c	W Street, C Town	220,000
d	Motor vehicle 2	25,000
e	Motor vehicle 1	3,000
f	Aircraft (sold in 2015 following a forced landing)	15,000
g	Boat	25,000
h	Furniture	5,000
i	Q Town property	325,000
j	Superannuation	128,284
Total	978,443[5]

[4] This amount conflicted with the Respondent’s oral evidence which put the amount at $75,000. His oral evidence should be preferred.

[5] Respondent’s affidavit filed 3 November 2016 shows the total as $1,003,443.

Respondent’s liabilities

Description	Value $
a	Home mortgage	(203,889)
b	Unpaid income tax	(25,876)
c	Loan X Bank	(9,116)
d	ANZ Bank Visa	(7,994)
e	Liabilities for ongoing training	(20,000)
Total	266,875

The Applicant asserted a tax debt of approximately $73,000 at separation. There is no evidence to support this amount. The Respondent said that he had at separation, and continued to have, unpaid income tax in the sum of approximately $26,000. This assertion conflicted with other evidence. The notice of assessment for 30 June 2015[6] showed the Respondent in credit at approximately $24,000 and for 30 June 2014 a credit of approximately $28,000. no relevant tax debt was shown for the Pins Family Trust in the itemised account from the ATO spanning 2012 to 2017.[7] neither asserted tax debt should be taken into account.
[6] Exhibit M5.
[7] Exhibit F17.

The position following separation

There is also an absence of evidence regarding the “liabilities for ongoing training.” The lack of evidence establishing either these debts, or to whom they are owed, or on what basis, or as to what “training” they are in respect of, means that they will not be taken into account as deducted from the pool.
The parties agreed as to the current assets forming the pool and superannuation as follows:

Balance sheet

Ownership	Description	Applicant’s value $	Respondent’s value $
ASSETS
R	W Street C Town	220,000	220,000
R	2 W Street C Town	220,000	220,000
R	P Street Q Town	325,000	325,000
Motor vehicle 2	17,000	17,000
R	Motor vehicle 1	3,000	3,000
R	Boat	20,000	20,000
R	Shares	13,182	13,182
R	Plane	30,000	30,000
R	Hangar	40,000	40,000
A	Jewellery	20,000	20,000
Total	908,182	908,182

SUPERANNUATION
Applicant – First State Super	37,202	37,202
Respondent – Hesta	128,385	128,385
Total	165,587	165,587

The parties were in a position where they accepted the value and content of the assets contained within the pool at the time of trial. What was not agreed was the treatment of debts and whether certain items should be notionally added back into the pool. The disputed add-backs and liabilities were as follows:

ADDBACKS
R	Sale proceeds of Aircraft	15,000
R	Share sale proceeds	60,665
R	Cash in X Bank A/C …83 at DOS	7,172
R	Cash in X Bank A/C …99 at DOS	37,488
Total	120,325
LIABILITIES
R	Home Mortgage	169,7000	308,112
R	Other Mortgage	121,120
R	ANZ Platinum Credit Card as at DOS	2,066
R	ATO debt at separation	72,990
R	ANZ Visa	24,997
R	X Bank Visa	17,335
R	Company Y	19,575[8]
R	Company Z	17,205
R	Ongoing training	10,194

[8] The Respondent says that this amount was paid out, resulting in the increase in the business loan (ANZ) of a corresponding amount.

The Applicant accepted the mortgage as a liability to be taken into account, but not the balance. In relation to the size of the debt that should be taken into account, the Applicant pointed to the April 2015 financial statement of the Respondent. At that stage the mortgage stood at $169,000, which she said was a better representation of the debts as at separation. It was, however, significantly less than at separation. The increase in debt since separation was then said to be for his purposes and in relation to assets under his control, for example, in relation to the crashing and repair of his aircraft. To the extent that expenditure relates to the repair of the aircraft, it contributes to maintaining the value of the pool. The Respondent also said that he spent a little less than $150,000 on the renovation of the two properties, although it is not clear when this occurred. If this is correct, then given the values attributed by the parties to the two properties, the expenditure has had marginal impact, but has still been a significant contribution.
The Applicant’s position was that the Respondent had increased his debt by $120,000 since October 2016. This was said by her not to be referrable to the relationship. The credit card debts had increased from $17,000 to $42,000. It is not identified what this was for. There was an additional debt to Company Z of $17,000.
Dealing firstly with the contended add-backs, it should firstly be noted that add-backs constitute the exception rather than the rule. Parties are entitled to continue with their lives without holding their finances in stasis. Add-backs should only be used where they are a means of working out a just and equitable adjustment, for example, in order to reflect a preliminary distribution. An example of where an add-back is generally appropriate is where the assets have been disposed of in order to fund a party’s legal expenses. In this case the Applicant has retained her legal representatives on a deferred payment basis. The Respondent has sourced approximately $100,000 for legal fees from the sale of shares and from further drawing down on a loan. In order to fund the litigation, which he reckoned at costing in excess of $100,000, the Respondent said that he had disposed of shares and extended the loan on the house. He said he had previously held shares of $133,397 at the start of the relationship, but at separation this had been reduced to $75,000 in shares. now what remains is worth $13,000. Some of the difference, he said, was the result of losses while some was the result of sale of the shares. He thought that he had realised between $50,000 and $55,000. It is unclear what portion of which loan was directed toward the legal fees. It is appropriate that this amount be notionally added back. Adding back this amount incorporates the proceeds of the share sales post-separation, meaning that no further add-back should be made in relation to them to avoid double counting.
There is a lack of evidence in relation to the cash in the X Bank accounts and the debts related to X Bank and the credit cards. It is not established why an amount should be notionally added back. Absent a justification, such a course should not be taken. Similarly, there is an absence of justification for an add-back in relation to the proceeds received from the damaged aircraft.

Conflicting financial information

There is significant uncertainty surrounding the true nature of the Respondent’s liabilities. In the Respondent’s financial statement filed 3 November 2016 he asserted a ‘home’ mortgage of E$309,000 and an ‘other’ mortgage of E$75,000. However, in his affidavit filed the same date he identified only a single ‘home’ mortgage of $203,889.
By way of his financial statement filed 5 May 2017 the Respondent identified a ‘home’ mortgage of $308,112, whilst he said that the ‘other’ mortgage had increased to $121,120.
In his oral evidence the Respondent characterised this E$300,000 loan as the “mortgage on my home” that he had drawn upon to pay legal fees.
Further, in his oral evidence the Respondent says that he obtained this loan facility with the ANZ bank. This appears to be listed as a ‘home’ mortgage in his 5 May 2017 financial statement. However, he characterised this as a business loan, against which he presented invoices to the ANZ and they either approved and paid them or rejected them as inappropriate for the business loan (making it unclear how family law litigation expenses could be drawn against it). It is not shown when the loan facility was established. The loan balance as at March 2017 was approximately $307,000.[9] Part of this balance, he said, incorporated $20,000 which he had previously recorded as owed to Company Y (and so should not be double counted).
[9] Exhibit M2.
The progression of the Respondent’s loans from separation appears to be as follows. At separation he had a mortgage of approximately $213,000. Following separation the Respondent’s home loan was again reduced so that by November 2014 the balance was approximately $159,000. In November 2014 a further draw of $10,000 was made, with another draw of $26,000 in May 2015. Payments were still made against the loan such that by 4 September 2015 the outstanding balance was approximately $192,000. From his November trial affidavit the assertion was approximately $204,000. From his November financial statement two values were provided, of E$309,181 and E$74,698, totalling approximately $384,000. In his financial statement filed 5 May 2017 he asserted two amounts of $308,112 and $121,120. He asserts by his balance sheet that he now owes, by way of mortgages, $429,232. The $308,000 appears to be the ANZ loan and has support from exhibit M2. It is unclear where the other sum comes from. It is not substantiated by supporting evidence, but nor was it challenged under cross-examination.

The Applicant’s criticism was that the Respondent’s indebtedness had increased by $120,000 post-separation and that this should not be referrable to the relationship. The increase in indebtedness appears closer to an approximate figure of $200,000.
The value of the pool as at the trial should be calculated to include the accepted assets, at $908,000, plus the accepted value of superannuation at $165,000, plus $100,000 in respect of the Respondent’s legal fees. This gives a pool of assets at $1,173,000.
The loan amount of the mortgage (at $121,120) should be deducted from this. Of the balance of the loan of $308,000, $50,000 appears to relate to the legal fees not paid for by sale of share, which is already accounted for above. The amount referable to the Company Y account ($20,000) should be recognised and the portion of the business loan that appears referrable to the hangar ($40,000).
This leaves $198,000 without clear explanation. At the same time, it should be recognised that the Respondent reduced the mortgage by approximately $92,000 (from $213,000 at the date of separation). Allowing for the reduction in this debt against the increase in the other loan, $106,000 remains unexplained, other than perhaps partially being referable to the expenditure on the renovation of the two C Town properties. This unexplained amount should not be deducted from the pool for distribution. The Respondent and the Applicant were each entitled to spend their income, or to increase their debt after the end of the relationship, without reference to the other. The responsibility for the additional debt, unexplained by reference to the pool, should not fall to the Applicant. Even if the amounts are referrable to the pool by virtue of the renovations to the C Town properties, they are to remain in the hands of the Respondent, along with whatever intangible improvements were gained by the renovations meaning that, again, a recognition of that portion of the debt is not required in order to reach a just and equitable result.
By trial the Respondent claimed debts to Company Z of $17,205 and an increase in the credit card debt from $8,000 at the date of separation to $42,000. The debt to Company Z relates to the aircraft and should be recognised. The added credit card debt is without explanation. Again, each party was entitled to spend on credit cards without reference to the other. Absent some explanation on the part of the Respondent, the Applicant should not bear the burden of this increase in debt.
This leaves a total debt to be weighed against the assets as the mortgage of approximately $121,000, the aspects of the ANZ loan referrable to Company Y ($20,000), the hangar ($40,000), the decrease in the mortgage ($92,000), $50,000 referable to legal fees and added back into the pool, Company Z at approximately $17,000 and the credit card debt at separation of approximately $8,000. These total $348,000.
This leaves a net pool of $1,173,000, less $348,000 being $825,000.
The consequence of these findings is that the progression of the net pool has moved from the Applicant having approximately $150,000 at the start of the relationship (being the jewellery and the proceeds of the sale of D Street), and the Respondent $649,000 (equating at that stage to the Applicant having an approximately 19 per cent interest in the pool). At the end of the relationship, the Applicant retained $20,000 in jewellery (perhaps plus superannuation at an unknown value), the Respondent $808,000. By the time of the hearing the Applicant retained her $20,000 in jewellery, superannuation at $37,000, the Respondent a net amount, disregarding part of the debt and notionally returning his legal fees, of $868,000 (the Applicant’s ownership of the pool approximating 7 per cent).
The Respondent says that a number of assets are held by the Pins Family Trust, being C Town and the former bank next door (1 and 2 W Street C Town). These are recorded as fixed assets in the Pins Family Trust balance sheet as at June 2016. In addition the balance sheet records other fixed assets of property plant and equipment of approximately $180,000. The balance sheet also records liabilities in the form of beneficiaries current accounts of approximately $295,000, and loans by him to the trust of approximately $460,000. However, the parties did not run the case or identify the assets of the parties in this manner, being content to agree on them as set out above.
That trust was created on 22 February 2007 (prior to the relationship) and the Respondent is the trustee, the appointor and the only person involved in the trust. He is the primary beneficiary (although he says that the two children may also be beneficiaries). He accepts that the two W Street properties are held in his name and is unable to say whether that is expressed to be subject to the trust. He was unsure whether there was other property on the balance sheet held by the trust, for example the lease of the land on which the hangar is placed.
To the extent that the property may be the subject of the trust, it remains amenable to orders for the division of property.

Discussion

The various contributions made by the parties during and after the relationship have resulted in a decrease of the net property rather than an increase in the property of the parties, although they have seen a change in the nature of the property and by whom it is held.
That is, the various contributions made by the parties both during and following the relationship have not resulted in an increase in the property pool, despite the financial contributions made by each to the property or to the family. That is not to say that they have not made financial contributions to the acquisition, preservation and maintenance of the property of each of them, but merely that they have not resulted in a net increase in value.
This does not deprive the contributions of significance. On the issue of assessment of contributions, the Full Court in Dickons & Dickons (2012) 50 Fam LR 244 at [14] stated:
As is plain from earlier decisions of this Court, regard must be had to the use made of contributions of various types so as to compare the contributions made by each of the parties during the course of, and over the length of, their relationship (see, for example, In the Marriage of Pierce (1998) FLC 92-844) But that is an entirely different proposition to, as it were, causally linking contributions with their asserted financial “product” or “value”. The former recognises that the nature, form and extent of contributions made by each of the parties might differ; the latter suggests that the absence of a causal link counts as no contribution at all.
Within that context, then, it is self-evident that financial contributions (whether direct or indirect) can be made to a relationship that have an effect on the property of the parties without those financial contributions finding their way directly into, or being directly linked to, specific property or, indeed, directly to the totality of the property available for distribution at the time of trial. Financial contributions can be made to the “…acquisition, conservation or improvement…” of property “…directly or indirectly…” (s 79(4)(a). Emphasis added)…. Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4).
In this case the fact that the significant contributions made by each of the parties have not resulted in a net increase of the value of their combined property does not equate to a failure to make contributions. Each of the parties made strong financial contributions during the relationship that together changed and shaped their combined property and contributed to the welfare of the family and the children of the family. The Applicant dispersed the proceeds of the sale of her property at D Street enabling, amongst other effects, her to access and provide additional financial support during the periods that she was at home with the children. The Respondent contributed to the financial support of the Applicant and brought significant property into the relationship. He was able, through his income stream, to pay down loans (although they were subsequently redrawn against to improve and acquire property and for other purposes). Each made non-financial contributions to the improvement of C Town (even if that did not result in a marked increase in the value of that property). The Applicant made strong non-financial contributions, in particular to the care of the children of the relationship, particularly while the Respondent worked away after the end of the relationship. The Respondent made financial contributions to the support of the children of the Applicant’s previous relationship.
It may be readily observed that the contributions made by the Applicant did not result in property being held in her name, while the differing forms of property were, by the end of the relationship, all held in the Respondent’s name but for the jewellery and the Applicant’s superannuation.
Although the length of the relationship was relatively short, the contributions made by each during that relationship were qualitatively strong.
Each of the parties says that there ought be an adjustment of the property of the parties, although they differ as to the extent. The Applicant seeks an adjustment based on contribution at 25 per cent, and on the balance of considerations, a further 5 per cent. The Respondent says the Applicant should receive a payment of $65,000 (which, on the pool as set out above, with the Applicant retaining her superannuation and jewellery equates to her receiving approximately 13 per cent of the net pool). That both parties accept that there ought to be an adjustment speaks strongly in favour of it being just and equitable to make an adjustment. This is further supported by the observation that there was a melding of finances (as seen by the shift in ownership of the property across the relationship) such that, on the ending of the coupledom it is just and equitable to make an adjustment.
Although an adjustment based on contribution is often expressed as a percentage it is, at its heart, a qualitative assessment of contributions that incorporates the quantitative contributions of the parties as one of its aspects. The expression of the percentage adjustment is the quantitative expression of a qualitative assessment.
In this case, on the issue of contributions, bearing in mind the short duration of the relationship, the relative contributions of the parties at the commencement of the relationship, their combined efforts during the relationship and their post separation efforts, an adjustment such that the Applicant receives 20 per cent of the pool is appropriate.
Until shortly before the commencement of the final hearing, the Applicant worked between AA Town and the C Town. She had a .3 load in C Town (the equivalent of three days per fortnight) and a .6 load in AA Town (equating to six days per fortnight). She has recently ceased the C Town position although remains on their casual roster. She does this because she asserts that she found it too difficult to care for the children, study and work the number of shifts. She is currently studying to improve her qualifications, in particular to allow her to work in a more technical area. Her prospects to improve her income appear good.
The Respondent works in the healthcare industry. Through the relationship he was able to make significant payments to reduce indebtedness (although there were further redraws to improve or acquire property). This identifies the strength of his capacity to derive an income.
The Respondent sought a 5 per cent adjustment recognising the matters contained at s 90SF(3). These matters, in particular limitations faced by the Applicant in deriving income as she improves her qualifications, and the care of the children, a matter not echoed by the Respondent despite shared care, justify such an adjustment.

Conclusion

Orders will be made requiring the Respondent to pay to the Applicant a sum equal to 25 per cent of the net pool, less the value of jewellery conceded by the Applicant and less her superannuation. Twenty-five per cent of $825,000 is $206,250. Deducting the value of the jewellery and superannuation leaves an amount of $149,048 to be paid.
The Respondent’s position was that the sum of $65,000 could be paid within 60 days of the orders. Such a sum should be paid within that time frame, with the balance to be paid within four months of the orders. Should the balance not be paid within four months of the orders, interest shall accrue on the outstanding amount.

I certify that the preceding one hundred and nine (109) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 15 March 2018.

Associate:

Date: 15 March 2018

[2018] FamCA 156

15 March 2018

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