COURTNAY & COURTNAY

FEDERAL CIRCUIT COURT OF AUSTRALIA

COURTNAY & COURTNAY

[2013] FCCA 1273

Catchwords:
FAMILY LAW – Property – long marriage – dispute over contributions and usage of joint assets.

Legislation:

Family Law Act 1975, ss.75, 79

Hickey & Hickey (2003) FLC 93-143
Stanford & Stanford [2012] 293 ALR 70
Watson & Ling [2013] FamCA 57
Baglio & Baglio [2013] FamCA 105
Mallet & Mallet (1984) FLC 91-507
Kannis & Kannis (2002) FamCA 1150
Pierce & Pierce [1999] FLC 92-844
Doherty & Doherty [2006] FLC 93-256

Applicant:

MS COURTNAY

Respondent:

MR COURTNAY

File Number:

BRC 8446 of 2011

Judgment of:

Judge Coates

Hearing date:

27 February 2013

Date of Last Submission:

15 April 2013

Delivered at:

Brisbane

Delivered on:

11 September 2013

REPRESENTATION

Counsel for the Applicant:

Mr B Thiele

Solicitors for the Applicant:

McDuff & Daniel Lawyers

Counsel for the Respondent:

Mr G Sara

Solicitors for the Respondent:

Milburn Guttridge Lawyers

ORDERS

That the matrimonial property and superannuation of both parties be divided to effect a sixty-five percent (65%) of same to the wife and thirty-five percent (35%) of same to the husband.
That the net proceeds of sale of TWO HUNDRED AND SEVENTY THOUSAND, SIX HUNDRED AND NINETY SIX DOLLARS AND THREE CENTS ($270,696.03) currently held in the trust account of Milburns Law be divided between the parties so as to achieve the division of the matrimonial property pool set out in Order 1, taking into account the value and distribution of all other items and property.
The wife retain for her sole use and benefit absolutely:
(a)Motor Vehicle 1;
(b)Gold jewellery;
(c)Funds held at bank in the wife’s sole name ; and
(d)Furniture and effects currently in the wife’s possession
That the wife retain all superannuation funds accrued in the wife’s superannuation holding with Super Fund B.
That the husband retain for his sole use and benefit absolutely:
(a)His collection of CD’s and vinyl records;
(b)His collection of model trains;
(c)Electronic equipment for his work;
(d)Furniture and effects currently in the husband’s possession;
(e)Motor Vehicle 2;
(f)Motor Vehicle 3;
(g)Boat, trailer and motor;
(h)Motor Vehicle 4;
(i)Scooter valued at ONE THOUSAND DOLLARS ($1,000);
(j)Canon digital camera;
(k)Small boat, trailer and motor;
(l)2 box trailers;
(m)Investments in the sole name of the husband; and
(n)Any other funds held at bank in the husband’s sole name.
That the husband retain all superannuation funds accrued in the husband’s superannuation holdings with Super Fund C, Super Fund D, and Super Fund E.
That the husband retain all funds accrued in the Courtnay Family Super Fund.
That the husband retain his investment portfolio held with F Investments.
That the husband retain the notional sum of $16,000.
That unless specified otherwise in these Orders:
(a)Each party be solely entitled to the exclusion of the other party to all items of personal effects currently in their respective possession or control;
(b)Each party hereby forgoes claims they may have to any money in any financial institution account held in the other’s sole name;
(c)Each party forgoes any claim they have to any superannuation benefits belonging to or earned by the other;
(d)All insurance policies are declared the sole property of the policy owner named therein; and
(e)Each party to be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
That the parties do all acts and execute all documents and instruments to enable the terms herein to take effect and on the failure or refusal or neglect of either party to do all acts and execute all documents and instruments aforesaid, the Registrar of the Federal Circuit Court of Australia is hereby appointed pursuant to s.106A of the Family Law Act 1975 to execute such documents on behalf of such party.

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BUNDABERG

BRC 8446 of 2011

MS COURTNAY

Applicant

And

MR COURTNAY

Respondent

REASONS FOR JUDGMENT

This is a property application bought by the wife.
She seeks a 65 percent division of the real property and superannuation assets of a long marriage.
That would be achieved by dividing on a percentage basis the net proceeds of sale of the marital home held in trust – $270,696 – and that she retain a Motor Vehicle 1, jewellery, her bank accounts, her goods and chattels and her substantial superannuation holdings with Super Fund B.
The husband would retain on a percentage basis the net proceeds of sale of the marital home held in trust – $270,696 – and the rest of the property, his superannuation accounts and an investment portfolio held with a firm called F Investments.
The husband seeks a division wherein he would receive 48 percent of the marital assets – an amendment made orally at the beginning of the hearing. He originally sought a 55 percent division in his favour.
Under his original 55 percent proposal, he would take the $270,696 held in trust, as well as a payment from the wife of $127,000, 21 percent of the wife’s superannuation by way of a splitting order, his records and CD’s, model toys, electronic work equipment, goods and chattels in his possession, a Motor Vehicle 2, two trailer boats, a motor scooter, investments, bank accounts and superannuation in his name.
His orders would see the wife keep a Motor Vehicle 1, gold jewellery, her bank accounts, her goods and chattels and her long service leave entitlements.
I would assume the change in percentage sought by the husband would be achieved by a change in the splitting order of the wife’s superannuation, although that was never made clear.
There is broad agreement as to retention of goods and chattels, the real cases being directed at the alteration of interests in the $270,696 held in trust and the wife’s superannuation holdings, valued at $611,416. By comparison, the husband has far less in his superannuation holdings. All figures are stated below in the pool schedule.
Property orders under the Family Law Act1975 (the Act) are subject to the provisions of s.79.
In a number of cases courts have made statements to the effect that alteration of property interests do not necessarily follow a set pattern although the majority of property decisions have probably followed the four step process identified in Hickey & Hickey (2003) FLC 93-143, which has been to identify the assets and liabilities, identify the contributions, weigh the factors stated in s.75(2) of the Act as to any further adjustment and then determining the justice and equity.
The High Court decision in Stanford & Stanford [2012] 293 ALR 70 caused Murphy J in Watson & Ling [2013] FamCA 57 to state:
“11. The circumstances of the parties’ relationship (its nature, form and characteristics) is plainly important to the exercise of the s 90SM(3)/s 79(2) discretion. The High Court held in Stanford:
41. Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to "the need to preserve and protect the institution of marriage" identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
42. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
43. By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.
(Italics in original. Footnotes omitted). (See also at [36], [39] and [40]).”
12. Provided the discretion is exercised judicially, it is at large; it is neither possible nor desirable to specify its “metes and bounds” (Stanford at [36]-[40] and [46]). Recognition is given to the fact that the circumstances of individual marriages (their nature, form and characteristics) can and do differ and those differences – the way in the which the parties have organised and lived their marriage/relationship – may be relevant to the exercise of the s 90SM(3)/s 79(2) discretion. Equally, provided that the questions required by s 90SM(3)/s 79(2) and s 90SM(4)/s 79(4) are seen as separate and applied as such, and not conflated, the enumerated factors within s 90SM(4)/s 79(4) can inform the s 90SM(3)/s 79(2) discretion together with any such other considerations as are properly relevant (see, Stanford at [40]).
13. As a result of those matters, the Court’s approach to s 79/s 90SM may be less compartmentalised than what a strict or unthinking adherence to four (or three) “steps” might otherwise reveal. The task is essentially holistic; is it just and equitable in the particular circumstances of the particular relationship or marriage under consideration to make an order and, if so, its terms must similarly meet that criteria. Of course, holistic though the approach is, it must be referenced to what the Act requires and care must be taken to ensure that the Court’s reasons make that clear. (See, for example, Davut & Raif (1994) FLC 92-503 at 81,237).
14. As Stanford makes plain (see, especially at [39]), the breakdown of a marriage (or de facto relationship as defined in the Act) does not bring, as an automatic consequence, an alteration of existing legal and equitable interests. Just as, if an order is to be made, equality is neither to be assumed nor is a starting point (Mallett v Mallett (1984) 156 CLR 605), so too, the making of an order at all is not to be assumed."
In Baglio & Baglio [2013] FamCA 105, Murphy J identified the starting point and that is to establish the legal and equitable interests of the parties:
“First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property”. [Emphasis added.] The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.”
I am satisfied that the parties have acquired jointly legal and equitable interests in property during their 28 years of marriage and cannot reach agreement as to an alteration of their interests, therefore it is just and equitable to make settlement orders.
The next step is to identify the assets.
The pool was agreed – reflected in the schedule below except for a dispute over an amount of money. The schedule also indicates what the parties wish or agree to keep, apart from the cash and the wife’s superannuation.
The wife sought an add back amount from the husband. Various figures were given in submissions and at trial, but I am satisfied the figure is $16,000 and not $18,000 otherwise mentioned.
It seems from the husband’s material, document 39 in a bundle of documents admitted as an exhibit, that the money was paid as his legal fees.
It was conceded early that $13,000 should be added back, although in written submissions that concession seemed to have changed. There was no evidence from the husband by way of explanation of the amount. It may well have gone to his legal fees according to various payments listed on document 39. In my view it is just and equitable to add the whole figure back, $13,000 is conceded and there was no explanation of the rest.
I am going to add the $16,000 back, notionally, because his fees, as for the legal expenditure of the wife, should be met from their respective resources after trial unless there is a costs order – therefore the assets and liabilities will be as stated in the schedule below, with an added line of a notional $16,000.
The pool also reflects an interim distribution to the parties in March 2012 of $50,000 each from the proceeds of the sale of marital home. I will refer later to this amount.
The value of goods and chattels takes into account various individual items not specifically identified, such as model trains and jewellery, as contained in the valuation report.
The pool then is:

Item	Adopted Assets	Amount retained by (w)	Amount retained by (h)
Proceeds of sale of home	$270,696.03	$0.00	$0.00
Proceeds of sale distributed – (w)	$50,000	$50,000	$0.00
Proceeds of sale distributed – (h)	$50,000	$0.00	$50,000
Chattels – G Street	$2,995	$0.00	$2,995
Chattels – residence of (w)	$12,315	$12,315	$0.00
Chattels – H Street	$16,000	$0.00	$16,000

Chattels – J Street	$37,150	$0.00	$37,150
Wife’s Super Fund B	$611,416	$611,416	$0.00
Husband F Investments super	$165,300	$0.00	$165,300
Chee Courtnay SMSF	$38,839	$0.00	$38,839
Carious Various super finds (h)	$1,798	$0.00	$1,798
ADD BAdd back H legal fees	$16,000 (notional)	$16,000
TTotal TOTAL	$1,272,509.03	$673, 731	$598,778.03

Contributions are at issue, the salient contentions seeking to secure interests in the money remaining from the sale of the marital home and superannuation holdings and the mix of distribution.
The husband seeks, as stated, 48 percent with a big cash component and a split of the wife’s superannuation holding in Super Fund B. The wife seeks a 65 percent settlement on the basis that the cash available be distributed in that proportion and that she retain her Super Fund B after taking into account the value and distribution of all items.
The assessment of contributions was examined in Mallet & Mallet (1984) FLC 91-507 where the High Court indicated what may be loosely referred to as a range, when Wilson J at 7,126 stated:
“However, equality will be the measure, other than it being equal, only if equality of the respective contributions of the husband and wife, each adjusted by reference to their sphere, are equal. The quality of the contribution made by a wife as a homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. She may be an admirable housewife in everyway or may fulfil little more than the minimum requirements. Similarly, the contribution of the breadwinner may vary enormously and disserves to be evaluated in comparison with that of the other party. It follows that it cannot be said of every case where the parties reside together that equal value must be attributed to the contribution of each. That will be appropriate only to the extent that the respective contributions of the parties are each made to an equivalent degree…”
Further, at 79,127 Wilson J also said that:-
"The objective of the section is not to equalize the financial strengths of the parties. It is to empower the court, following a dissolution of a marriage, to effect a redistribution of the property of the parties if it be just and equitable to do so ... ."
I will examine various contentions within the framework outlined in Mallet.
The relationship history, briefly, is: The wife is aged 54; the husband is aged 62; they married in 1983; they separated in February 2011. There are three adult children of the relationship.
As to the initial contributions, the husband contributed $18,000 or $19,000 from a property settlement from his first marriage, which had legal fees owing of about $3,000, a van and he said some cash of about $3,000, but I will not rely on his estimates as being precise. He also contributed his working capacity as a public servant and unstated superannuation he said from over 11 years of work. The husband also had child support for three children of his previous marriage, which reduced his contributions to this marriage.
The wife contributed her capacity to work as a public servant. She said she assisted the husband with legal fees with her wages as a public servant.
There was a claim that the husband contributed part of his $19,000 from the previous settlement to the purchase a block of land at K Street, Town L. That was not disputed.
The parties otherwise bought and sold several houses. There is a submission in the wife’s case that until 2004 the contributions were about equal. Despite some submissions which went to the husband’s greater initial contribution and what was called by him as being substantial work on the various houses, I was then met with a submission that a little more weight ought be accorded to his efforts or at least that his initial contributions should be treated as equal. The husband had a greater initial contribution, and some of the cash went to K Street, Town L, however the wife paid $50 a week more than the husband on the mortgage, continued working and raised the children.
However, the husband disputes the wife’s claims as to his contributions after 2004. I would accept that the evidence shows, on weighing all facts, that at least until 2004 the contributions were equal, that is because the husband, while contributing a greater amount initially, also had a reduction in his capacity to contribute because of child support from a prior marriage, which would be a significant impost on this pool. It is not an impost which can be reduced to issues, but it affected his income flow into the family.

For the first six or seven years the couple kept a joint account and the wife said she did not take an interest in it and I considered the community use of monies by the parties as going to the finding that until at least 2004 the contributions were equal. That is despite the wife discovering in about 1990 that the husband was depositing his pay and withdrawing all but about $100 a fortnight.
All loans were paid by mid-2004, with the wife paying for household expenses from then. There is no evidence to properly contradict her claim.
In 2004, the husband received a voluntary redundancy payment and from this date the wife states her contributions, both financially and non-financially, outstripped those of the husband.
Her claim is that while the husband began using the benefits of the redundancy and superannuation, mainly for his own purposes, then being unable to account for all its use, she continued to earn an income to support the children and the family.
This is the key aspect of the contributions analysis in this matter.
The voluntary redundancy payment came after an incident in which the husband was accused of violence towards a student.
The wife’s case did not attempt to have the court determine the husband’s fault in relation to the allegations, so the case is not one where he committed a positive act which decreased his financial contributions.
But the husband claims the incident had an adverse and on-going effect on his health, despite the matter being resolved in his favour, so that he could not engage in employment as a public servant.
The husband’s medical testimony gives no expert diagnostic evidence of the alleged adverse effects on his health caused by the incident, or evidence indicative of other complaints he makes.
Dr M, a general practitioner, recounted that the husband was a public servant until 2004 when he suffered a marriage breakdown, and “then lost all motivation for his job”. That is at odds with the husband’s claim that the violence allegation caused the loss of motivation for his job, an inconsistency which should have been repaired in the husband’s case.
In any case, the doctor provides a list of medical issues affecting the husband and allegedly relevant to this proceeding, being: depression, coronary artery disease for which the husband had received a stent, non-insulin dependent diabetes, androgen deficiency, hypertension, and hypercholesterolemia.
The doctor merely states: “He informed me that he has been unfit for work and unable to hold down any job since he suffered this marriage breakdown”.
That does not amount to a medical statement of the husband’s conditions relevant to an alteration of property interests.
But the doctor states further: “Mr Courtnay I believe is able to work only on a part-time basis; he might function better in a non-strenuous, non-physical and non-emotionally demanding vocation. His depression also affects his job motivation making him unfit for full-time jobs”.
This is a statement in relation to the field of psychology and or occupational therapy from a person who gives no qualification for giving such expert opinion. It is unacceptable in that form, although I accept the husband told the doctor he is unfit for work.
Such an important claim needs to be supported by admissible evidence, that is from an expert who is qualified to give such evidence, especially when the husband is relying on it as going to his assessment for contributions and to the weight to be accorded to such conditions under s.75(2) of the Act.
In any case, after the husband was stood down in 2004, he had been reemployed at another employer and although his wage was reduced, the wage he enjoyed before the incident was reinstated within a month of starting at the new employer.
A short time later he took a redundancy payment.
The husband received about $53,000 from the redundancy and leave entitlements. On retirement, he was entitled to just over $530,000 in superannuation accumulation, some of which accrued before this relationship. He began working in 1972. It is his larger initial contribution which is now of significance.
From a realistic perspective, the wife’s claim is that until 2004 the joint monies were mostly used in community with each other, but from this point she states that there has been no clear identification of the use of all monies.
Apart from the on-going purchases by the husband of boats, model trains, records and other personal and luxury items, all of considerable value as evidenced in the valuation report, a self-managed superannuation fund was created and although the wife’s signature is on documents, it is clear to me on the evidence, and despite the husband’s claims, that she did not control the monies in the fund.
The husband rolled just under $530,000 into the self-managed fund – accrued as superannuation while employed as a public servant.
His case is that he then drew a pension and invested money and the investments, which had a risk factor, failed during and because of the economic conditions referred to as the GFC – the global financial crises.
While drawing his pension and investing money, the husband also sought to work as a handyman and as an artist.
It was put that his withdrawals by way of pension of $108,000 over four years until 2010 was not extravagant, merely a reflection of living expenses.
The husband suggests that risk attends investment and losses cannot be held to be anything other than a failure of an investment to succeed.
This type of submission overlooks the point of the wife’s complaint, which was that in view of continually reducing superannuation, the husband simply refused to work in the area he was trained in –to either restore or offset reductions.
Allied to this claim – her case is also one of lack of disclosure so that the husband’s assertions cannot be tested.
The size of the reduction can be seen in the figures.
Around 2008 when the GFC is identified as beginning, the husband had $633,173 in his self-managed superannuation fund and when funds were transferred to N Fund in 2010, he only had $222,544.
He asks me to treat this as a capital loss from the joint assets.
Against this, the wife produced her taxation returns which show that because the husband did not work full time from late 2004, her financial contributions have been greater. She states her income at paragraph 23 of her affidavit filed 6 November 2012. As well she states she has voluntarily increased her contribution to her superannuation fund and did this from 2004.
Given the number of houses the parties bought and sold, and given the husband’s interests in making money from investments, initially he appeared to be a person capable of managing money.
The husband’s self-managed superannuation fund, with $527,041 rolled into it, began investing in various entities on advice, from time to time, from various firms – O Company, N Investment Fund, P Company, Q Company, F Investments and possibly on the husband’s own views.
The husband also took what are referred to as pension payments, which seem to be $15,000 in the financial year ending 2007, $26,000 in the next year, $31,000 in the next year and $35,000 in the financial year ending 2009.
The husband admits that there was a significant decline from about 2008.
By 2010, the fund had declined to $222,544.
Obviously aware of the reducing amounts, after being with an adviser, a Ms R, he changed to P Company, and then went to a Mr S at F Investments, who finally recommended the self-managed fund be closed and that: “I establish an account based pension being a portfolio focused premium account based pension. The report recommended the acquisition of various assets within that pension”.
He said he did this.
He also said he assumed that all the assets of the self-managed fund was transferred to F Investments, but realised that some assets of the fund had not been transferred, when he read the wife’s affidavit filed in November 2012. He blamed the P Company representative. He blamed his financial adviser at the time for not transferring the money.
The husband’s account of money dealings becomes questionable, not because he seems to have lost money, but because the wife discovered the documents showing the self-managed fund was obviously not closed down and disclosure by the husband has been poor – I will address disclosure later.
And this is the point of the wife’s case, not only was the husband failing to explain money, but he was failing to go out and get work to offset his losses.
The wife, until she discovered documents, had believed the husband’s explanation’s that the self-managed fund was closed. She discovered in 2011 an amount of $1,276 in it and this increased, as at the filing of her affidavit, to $4,775, income from a T Bank Cash Management Account, receipts of which were not disclosed.
Then came the discovery of another $38,000 by the wife, and no mention of it by the husband, in F Investments accounts in 2010.
The wife had stated that she took no interest in the management of the husband’s superannuation funds until these proceedings.
However, the husband was dismissive and argumentative when asked why there was no disclosure, and when asked about having the $38,000 in his self-managed fund, stated:
“And then you had the 38 [thousand dollars] in the Courtnay self-managed fund? Well I didn’t know she – I had that because I asked that fellow to close that down and I thought it was closed down but apparently it wasn’t.
So you probably…? And she found that out because she stole all my documents – all my paperwork.
When you say she, my client? Yes, your client.
So my client found an extra $38,000 for you? Yes, she did. She found it for me. I had no idea it was there because I told that fellow – he comes from City U too – that I didn’t want to be in his fund, he was useless, and I changed to F Investments. Now, at the time, my wife knew the event. She came to a meeting when we went with – we went and saw Mr S and he knew all – he told her all the information. That figure I’m not sure of so don’t quote me.”
His attitude did not improve as the wife’s case was put that he refused to disclose or disclosed information generally so late that no proper investigation could be undertaken.
While the husband claimed that he should not be held to account for investments which simply failed to materialise into a profit – there is evidence that the husband was less than cautious with his money.
In 2005 he paid just over $9,600 for a data software system.
He admitted the expenditure, but has given no account, and this is how he responded to cross-examination on the issue:
“So you bought a data program for approximately $10,000, didn’t you?
---Yes, when I had the money, yes. I had heaps of money.
---All right, where is that in your listed assets and liabilities – your $10,000 data program?
---It doesn’t work ..... if you want it, you can have it.
You said nothing about that in your affidavit, sir.”
He has also operated an online betting account since about 2005. Only one Tatts bet balance account from 17 September has been disclosed, the husband confirming he had not sought a print out of all of his trading transactions.
Gambling as such is not necessarily an activity which would or should be viewed as a waste of money. However, if money has been lost in gambling, the husband has refused to disclose anything about the data program or program work account or accounts, which would show the true state of affairs. He did not deny any accounts existed. For a period the husband also undertook handyman work for people for four months a year. No disclosure has been made of earnings or other particulars which would assist in understanding income and money usage. The wife identified a payment disclosed in the husband’s bank accounts from a Mr V on 21 December 2012 for $1,905. This was from a job.
The husband also ran a home business called “W”, with another business name, “X”.
The wife located his diaries left in the marital home after he vacated, showing some entries for payments and charges. Yet the husband confirmed that he had not disclosed any profit and loss statement. When asked he said “I haven’t had any” which could refer to work, income, profits or losses. There seems though to be little doubt that at some stage he has operated a home business – possibly for up to 10 years – and no profit and loss statements are available, so it is a matter of disclosure. As well as this aspect of the business, the wife claims that he failed to make all his collection, between 5,000 and 7,000 CD’s and some 10,000 vinyl records available for valuation. He confirmed this generally by stating some were damaged – however no particulars were given nor the damaged goods produced.
With these factors the wife’s case was that the husband’s taxation returns from 2005 to 2010, show income which does not correlate with what is in his diaries. For example in 2005, he declared $48,050 and his diaries show $6,000. In some other years tax income is more than that disclosed in his diaries, leading to the allegation he did not record everything. The husband failed to disclose tax returns for the years 2011-2012, stating he had not completed them yet.
The husband said his affidavit reveals all of his financial dealings – however, in the light of the matters I have referred to so far, I find that he has not revealed all of his financial dealings and it is impossible to know what the true state of affairs is.
There are other amounts of money which I conclude remain unexplained.
On another amount of money, the husband agreed he had $70,000 in his N Investment Fund account. Asked what happened to the money, he said it went to shares, however, no share dealings were disclosed to support that assertion. It was put that he was still receiving dividend payments which he said: “---No. I don’t – no. Have you looked at your bank statements?---Only the ones in that thingo, the one I didn’t know existed.” He was referring to the fund of about $38,000 found by the wife.
The wife complains that the husband has only disclosed some documents in relation to superannuation funds with Super Fund C and Super Fund D, but none for the Super Fund E Retirement Fund. His bank statements show two voluntary payments to Super Fund C in June 2011 and June 2012 of $1,000 each, but bank statements show an internet transfer contribution in 2010. The fund had a nil balance as at 2010. The statements show his contributions, but I find without disclosure.
The wife also discovered the husband has a life assurance policy over the life of his former wife Ms Z. She gave a policy number. She also identified another policy number with AA Pty Ltd about which there has been no disclosure.
Perhaps the strongest statement by the authorities about non-disclosure came in Kannis & Kannis (2002) FamCA 1150, that:
“Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.”
Even if I accepted some of his claims and explanations, for example that that an amount of just over $67,000 was withdrawn from his Super Fund B account and $28,000 was used for taxation liability and $15,000 for the wife’s car, it is not an answer to all of the wife’s claims and the claims cannot be simply addressed as a denial. Nor can the submission that: “There may be some minor argument about whether the further $50,000 the husband says he paid the wife came from these monies, but in any event it is again clear that any unexplained discrepancy is only minor”, explain his position. If the husband attended to taxation liability, that is a contribution and also a legal obligation, one which must be disclosed as with all other amounts which have not been explained. The sum of $50,000 is not minor.
While there may be circumstances where accidental non-disclosure is not to be considered in the same terms as wilful non-disclosure, I do not accept the submission that the husband could not account for some monies spent because such occurred at a time when he was not expecting to have to account for it because of later marital property proceedings.
I do not accept that the husband explained his use of funds as I was urged to accept in submissions, when his answers in cross-examination were very evasive and argumentative, as submitted on behalf of the wife.
The legal issue is that there is no explanation, that is no disclosure, as to the usage of all funds. I conclude that he has engaged in non-disclosure of relevant financial information and that his affidavit explaining his version of events has significant holes in it.
On other contributory issues, the wife paid for family private health care from 1987, without assistance from the husband. She needed to utilise the health insurance for the children’s health care from time to time.
She cancelled the health care in 1998 claiming the husband nagged her for years that the returns were not cost effective, however, days after cancelling the husband required urgent heart surgery for insertion of a stent. She was able to reverse the cancellation from the Friday, on the following Monday. The husband’s heart operation cost $7,000 but they only had to pay the gap of $2,000. That was both a financial and a non-financial contribution on the wife’s part.
She said she constantly had trouble obtaining a half contribution from the husband. This was not denied.
As to the March 2012 interim distribution to the parties of $50,000 each the wife has accounted for her $50,000, but, as she stated, the husband’s $50,000 does not appear in any disclosed bank statements.
Part of the husband’s claim for 48 percent of the pool is that the couple planned to retire together. The wife said there was no agreement to retire together and pool superannuation. Given the evidence I have referred to, if there was an agreement it was never a real prospect since at least 2004.
The wife’s records of subsidising the children were not denied by the husband.
As to non-financial contributions, specifically in terms the parties used being homemaker and parent, the husband, despite a number of explanations, states that the wife was the major care provider for the children.
This was not in dispute.
The husband’s statements go to allegations of being sidelined by the wife, that she was dominant, that he had work commitments at crucial times and that he was occupied earning money and responsible for outside jobs, such as lawn and garden care and saving the family money by working on their vehicles. At paragraph192 of his affidavit filed 26 November 2012 he states:
“It was inevitable in these circumstances that Ms Courtnay would spend more time with the children. I refer to paragraph 168 of Ms Courtnay’s affidavit. It is a gross exaggeration to say that I was uninterested in the children and I do not accept that Ms BB and Ms CC’s psychological conditions are a consequence of any neglect on my part. Both girls have had traumatic experiences as teenagers, Ms BB witnessing her teacher dying as a result of a tree falling on her, and Ms CC witnessing a friend fall from a patio to his death. It is unsurprising that these events have had psychological consequences.”
I do not accept that he was sidelined as stated and that he chose to contribute to the welfare of the family minimally.
Both parties accept the girls have psychological issues. The husband’s reference to the cause of the psychological conditions of the girls is inadmissible hearsay as are comments that he was excluded by the wife.

It is as inadmissible as the claim that his son Mr DD, from his first marriage, who does not currently enjoy a good relationship with the husband, is suffering a psychological condition due to him being blocked from promotion within the Employer EE.
It is as inadmissible as the claim that the wife has influenced the children against him, although such a statement is an admission that he does not have a good relationship with them. It is inadmissible because it was not tested in cross-examination, although a measure of contribution to family welfare.
It is clear from his long statements that he accepts the wife provided primary care, and this is measurable in terms of the Act. I do not accept his claim that he drove the children to school or other places to outweigh his admission that the wife provided primary care.
I do not accept such claims to mean that as a whole, his contributions in this area begin to equate with a measure approaching an equal distribution, keeping in mind he seeks 48 percent of the pool.
I have not mentioned the wife’s evidence about her meeting various costs for the children, which were not denied and again provides an understating of the contributions being made by the parties.
Part of the husband’s claim is that the wife wasted money on overseas trips.
Waste is a term sometimes used proceedings of this type. It is a term which has different meaning to different people. A gambling addiction, or using marital assets which depletes the resources, is a form of waste, if one party depletes marital resources without the consent of the other.
The wife has taken nine overseas holidays. The husband says it is an extravagant spending of marital money. Apart from his approval on many occasions, the difference in her case compared with that of the husband is the trips are disclosed in this matter in circumstances where it is clear that from 2004 the husband reduced his earning capacity and his financial contributions to the joint use of the parties and the family. It is no more waste than the husband buying trains and boats and goods sometimes called toys. I do not accept his submission that declared expenditure on travel is ample evidence of extravagance.
After separation, other imposts on the martial pool arose.
The husband occupied the marital home.
He had no costs in relation to the marital home other than the utilities and services. He also had time and despite claiming he got the house ready for repair, the house was left in a state of disrepair and damage.
There were gouges in the yard from vehicles, piles of old furniture and tools in the house and yard. Buyers refused to settle unless repairs were made to the grey water pump and sewerage line, which was flowing into the yard. The wife paid for the repairs.
She also paid for insurance because she had no faith in the husband doing so until settlement.
As well, the state of the house shows his non-financial contributions post-separation are not what ought be considered as making life easy for the wife or made to obtain the best possible price for the house.
The wife stated what remained in the house when she moved in February 2011. This was after orders were made on 7 November 2011 that household furniture was to be divided equally. A shed was locked so a valuer could not enter. Not produced for valuation was a collection of model trains and toy cars, collected by the husband since childhood.
She supplied an inventory and photographs. She gave evidence that on 16 December 2011 a garage sale was advertised in the newspaper and some furniture sold, with no accounting given. She supplied a copy of the advertisement.
Part of the husband’s claim for 48 percent of the pool is that the couple planned to retire together. The wife said there was no agreement to retire together and pool superannuation. Given the evidence I have referred to, if there was an agreement it was never a real prospect since at least 2004.
The assessment of contributions is not mathematical, but there is a range taking into account the contributions, both financial and non-financial.
I have given weight to what I consider are the equal contributions until late in 2004, when the wife’s contributions outstripped those of the husband, in both the financial and non-financial divisions.
The submission on behalf of the husband – that there is a convention that long marriages usually result on court findings of equal contributions – is wrong in law and fact, and is against the statement made in Pierce [1999] FLC 92-844, which the husband’s case referred to, that:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution… There is an obligation on a trial judge not only to identify the relevant contributions but also to assess them. In this case His Honour failed to adequately, or at all, assess these contributions. In our view he failed to properly weigh the greater initial contribution of the husband, with all other relevant contribution, and seems not to have had regard to the use made by the parties of the husband’s greater initial contribution”.
I was urged to find that the husband made the greater initial contribution and this should be given a greater weight, however, I have made my findings which are somewhat different to the submission. The husband brought a little more, however he brought a solicitor’s debt which the wife assisted in paying and a reduced capacity to contribute because he had child support obligations from another relationship. Further, there is just no evidence of what superannuation he accumulated, if any, before the relationship. The statement was too vague to consider.
There was also no evidence, other than the wife attending to sign the self-managed funds forms, that show she made any decisions or indeed was involved in decision-making for the husband’s expenditure of his superannuation.
Non-financially, I do not accept that the husband contributed in the same manner as the wife to the family’s welfare. I accept that he did do work and repair on the marital houses, however, I have also concluded that until late 2004, the contributions were equal. The weight of these equal contributions are then compared with the other factors I have referred to since late 2004.
As to safeguarding his own dwindling resources in his investments, the husband simply slowed his working prospects from 2004, engaging in artist work and handyman work and what appears to be reliance on investment of money, while refusing to entertain to any great extent proper employment within the public service profession when it must have been apparent that his total fund was reducing quickly.
On that basis, contributions until 2004 were equal, but from late 2004 the husband’s contributions are less than that of the wife. She says she should receive 65 percent uplift. I agree.
The next set of considerations is to accord weight to the factors stated in s.75(2).
The husband is aged 62 and is retired, now indulging apparently in part-time artist type work. His financial statement records that he earns $501 a week. His real income, as with his expenditure and assets is not known due to his non-disclosure. He has listed that he $166,500 left in his superannuation fund. He lists liabilities at $2,000.
The wife is aged 55 and may retire. She earns $1,545 a week. She has $611,000 in her superannuation fund. She has purchased a home at Town L and owes $260,000 on that. She owes legal fees of about $35,000. She has some other debt, but she is managing those on her earnings and there seems to be nothing extravagant in her expenditure.
The health of the parties, apart from claims, is that of people of their ages. I have addressed the husband’s health issue earlier and cannot state any more than he has not produced admissible evidence of being as disabled as he claims.
The husband sought orders that related to the wife’s long service leave which would be a resource. The matter was never argued so I will disregard it as being a vague reference.
That I am asked to otherwise take into account his “advanced age”, which I do not accept as a proper description, and the state of the national economy, about which I have no expert evidence other than the husband’s claims, is not to the point. The evidence is that he has not engaged in much public service since 2004, when he could have done so. He said himself he did not like public service. In any case, he seems to be able to earn through his artist work, and there is non-disclosure of monies. I will make a finding based on non-disclosure that he has capacity to earn more than he is stating. I will not make a two percent adjustment in his favour on that basis, as sought.
It was said his employment prospects “are bleak”, a statement I cannot find as a fact except on evidence which I accept being that he acted to put himself in the situation where he disregarded employment as a public servant paying at rates higher than he could earn as an artist or handyman or gambler.
Had the husband produced admissible evidence of his health, the case he ran could possibly have been viewed from a perspective more favourable to him. To make mere claims and to produce the alleged medical evidence that he did is not good enough.
I was referred to cases wherein individually other decisions have accounted for an older spouse getting a capital sum, but the weight of the evidence is that he does not show he cannot work, even at the age of 62. The law was stated to be that as both parties are reaching retirement age, the court will attempt to make an order ensuring each of them have a reasonable degree of financial security.
That is not what the law states and in any case, the husband has shown that he was not concerned about financial security when he knew his superannuation fund was decreasing, by going out and obtaining public service work.
The wife states she will not work until the age of 65.
I was told she is much younger than the husband and can work longer.
She has been industrious, as compared with the husband’s lack of utilisation of his capacity since 2004. She states she will not work much longer, and she considers that she has been careful with her money. I agree.
I am not asked to make an adjustment here in her favour.
I was asked to consider a capital sum for the husband to deal with uncertainties and that his future superannuation will be affected by his age.
This introduces what appears to be a complicating consideration, based on the submission that the court will attempt to make an order ensuring each party “has a reasonable degree of financial security”, as they both approach retirement age.
The Act does not state that to be the law.
Various cases may come to that conclusion, based on the factual matters considered and in their particular matter, but I can only consider the facts as I find them here.
In a sense, it is a submission based on the s.75(2) factors as to the living standard enjoyed by parties, but the living standard is sometimes within the control of a party and in this case closely linked with how each party has looked after the funds they legally acquired.
I refer back to the data program the husband purchased for something over $9,000 – and that was a lifestyle choice, part of the standard of living he adopted – and one which he has not given evidence about wanting to change, so this is not a case on the facts where the court will look to “a reasonable degree of financial security” in the terms sought.
I was not referred to other factors in s.75(2) although I would observe the husband’s case may be based around his standard of living. It seems to me on the evidence his standard of living was fashioned on some claim he would make on the superannuation accrued by the wife – when he would not take a step to safeguard his own.
There is no adjustment to be made under a weighting of the various factors in this section of the Act.
The Stanford case stated the court does not begin at the point that an alteration of property interests will proceed, the court taking into account the legal and equitable ownership of property and then applying the law to the facts.
I have held that the parties cannot proceed without an alteration of interests as a just and equitable decision, because they have jointly accrued monies from the sale of the marital home. I have concluded how the division will be applied on the facts.
Coming within this decision-making process is taking into account the access to the cash resources – the husband stating he needs cash now to buy a house, as well as some of the wife’s superannuation – aware of what was said in Doherty & Doherty [2006] FLC 93-256, that:
“Consideration of the constitution or “mix” of the assets with which each party will be left with as a result of the proposed orders would seem a necessary, if not critical, factor in determining the justice and equity of the proposed orders in each case in which superannuation interests are involved”.
If the husband needs more cash, it is only because he has used his cash resources, or resources he converted to cash, without more than a cursory explanation as to what he has done, associated with significant refusal to disclose all, especially since 2004.
There was really no persuasive evidence in his case that upon his “retirement”, he set out to ensure that his money was used in community with that of the wife – the evidence being that he simply set out to spend as he chose. Evidence must have a source – the best source to explain the husband’s usage was the husband. He failed to do so.
On that basis, it could not be just and equitable to make orders other than in terms the wife seeks.
I do not intend to determine a costs application at this stage even though sought by the wife in her application. Such an application may be made pursuant to the rules if she seeks to pursue the issue.
Finally, I have made the orders as sought by the wife. I note that her draft orders put values on various items, which I have deleted, taking into account the agreed pool and valuations. If in calculating what each party holds, various items were not valued, then no value can be attributed to any such item.

I certify that the preceding one hundred and sixty five (165) paragraphs are a true copy of the reasons for judgment of Judge Coates

Associate:

Date: 11 September 2013

[2013] FCCA 1273

11 September 2013

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Family Law

Equity & Trusts

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