Crest and Oates

[2009] FamCA 310

FAMILY COURT OF AUSTRALIA

CREST & OATES [2009] FamCA 310

FAMILY LAW – PROPERTY SETTLEMENT – obligation of full and substantive disclosure in property proceedings and positive nature of that obligation – not fulfilled by the wife - credit findings against wife – substantial diminution of assets in the control of the wife while property proceedings pending – discussion of add backs to asset list and hazards of doing so in the circumstances of this case – orders for the husband to receive all of the actual available assets except for remainder of wife’s superannuation which she retains

Family Law Act 1975 (Cth)
Evidence Act 1995 (Cth)

Black & Kellner (1992) FLC 92-287
Weir & Weir (1993) FLC 92-338

Kiefer & Kiefer (2008) 40 FLR 295

APPLICANT: Mr Crest

RESPONDENT: Ms Oates

FILE NUMBER: SYF 2939 of 2006

DATE DELIVERED: 28 April 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Moore J

HEARING DATE: 

25, 26, 27 June & 15, 16, 17, 18 December 2008 &

30 January 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Simpson SC with Ms Cleary

SOLICITOR FOR THE APPLICANT: Athena Touriki Solicitors

COUNSEL FOR THE RESPONDENT: Mr Richardson SC with Mr Schonell
[25-27 June 2008]
Ms Mundey
[15-18 December 2008 & 30 January 2009]

SOLICITOR FOR THE RESPONDENT: Aitken Lawyers

Orders

1. The husband and the wife are to do all acts and things necessary to pay to the husband the whole of the net proceeds of sale of the B1 property. 

2. The wife is to forthwith do all things and sign all documents necessary to sell the property at H, Queensland and to pay to the husband on settlement of the sale the whole of the net proceeds of sale after payment of the following:

   (i)the costs, expenses and commission of the real estate agents acting on the sale of the property;

   (ii)the costs, fees and disbursements of the lawyers acting for the parties on the sale of the H property; and

   (iii)the amount owing to the ANZ Bank Loan Account No. ….

3. The husband is entitled to direct the manner and timing of the sale referred to in order 2 here and if the H property is sold by public auction either party may attend at the auction and bid to purchase the property.

4. Unless otherwise specified by these orders each party is entitled to retain absolutely all property owned by that party and presently in the possession of that party. 

5. The wife is to continue to pay to the husband spouse maintenance in the sum of $984 per week until the husband receives in full the proceeds of sale of the B1 property. 

6. If the wife refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made, a Registrar of the Court at Sydney is appointed pursuant to s.106A to execute the deed or instrument in the name of the wife and to do all other acts and things necessary to give validity and operation to the deed or instrument and that the wife pay the costs of the husband on a lawyer/client basis in relation to the obtaining of the Registrar’s signature.

7. The husband is entitled to sole possession of the painting known to the parties as “The [G] Painting”, being a painting by an aboriginal artist and purchased from G on 15 April 1994 and the painting is to be delivered to the husband on or before one month from the date of these orders. 

8. Subject to order 7, the furniture contained in the B1 home at separation is to be divided between the parties by agreement and failing agreement according to this process:

   (i)the wife is to prepare two lists marked A and B comprising all of the items;

   (ii)the lists are to be provided to the husband on or before 30 days from today;

   (iii)the husband will be at liberty to select the items on either list A or B within 7 days of receiving the list and notify the wife accordingly;

   (iv)on selection of the list the parties will each be entitled absolutely to the items on the relevant lists. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2939  of 2006

MR CREST

Applicant

And

MS OATES

Respondent

REASONS FOR JUDGMENT

[To assist editing for anonymity the parties will be referred to for the most part as husband or wife notwithstanding their divorce.]

Proceedings

1. This is the determination of proceedings for settlement of property. 

Background

1. The husband, Mr Crest (81 – dob …/27), and the wife, Ms Oates (67 – dob …/41), met in 1982.  They began living together in April 1985 when the husband was 57 years of age and the wife was 43.  They married shortly afterwards in May 1985.  They separated initially in September 2004 for seven or eight months when the husband withdrew from the home before they reconciled in April 2005 and they remained living together until their final separation, the date of which is in dispute.  It was either February 2006 although they continued to live in the same home until August [husband] or mid-August 2006 which was not preceded by any same roof separation [wife].  They do agree that the husband again left the home in mid-August 2006 and there has been no subsequent reconciliation.  They have no children together. 

2. Both had been previously married.  The husband has two surviving children from an earlier marriage: his son died in an aircraft accident in June 1985; his daughters are now in their 50s.  He also lived in a de facto relationship between 1967 and 1982 and he and his partner had two sons: M [dob …/71] who committed suicide in November 2001 at the age of 30 and C [35 - dob …/73].  They were aged 14 and 12 years when the parties began living together in 1985.  They lived for part of their time in that household until after they completed their secondary schooling – K moved out in 1989 when he began his first year at university and C left in 1991 after completing his year 12 studies in 1990 – and otherwise during those years they lived with their mother.  Generally speaking, that was for half their school holidays and during school terms for two or three weekends out of four and there were occasions of overnight stays mid-week and a couple of block periods of a number of months during 1989 and 1990.  From her former marriage, the wife has two daughters, now in their mid-40s, who never lived with the parties. 

Orders sought

1. Proceedings were instituted by the husband on 11 May 2006.  At the time he sought orders for the sale of the B1 home and an equal distribution of the net proceeds of sale along with an equal distribution of their other assets, including an equal split of the wife’s superannuation.  He also sought $400 per week spouse maintenance until the wife retires or ceases full time employment.  By her response filed 27 June 2006 the wife sought orders for the transfer to her of the B1 home, division of their furniture as agreed or according to the selection made of one of two lists, otherwise they would retain whatever other property they each owned including superannuation and she would pay the husband $350,000. 

2. At the outset of the hearing both amended their earlier positions.  The orders now sought by the husband are to be found in exhibit 3 which, for convenience, is set out in a later schedule.  In short, that proposes the sale of the B1 home [contracts were signed after the hearing concluded] and sale of the property registered in the wife’s name at H, Queensland, and payment to him of the net proceeds of both sales; payment of such further sum as the Court determines; possession of a certain painting; distribution of furniture as agreed or they be sold at auction and the proceeds distributed equally, and spouse maintenance of $984 per week for a limited period until he receives his property entitlement.  Those sought by the wife are to be found in exhibit 4, also set out in a later schedule, proposing a distribution to her of 72.5% of all net assets; division of their furniture as agreed or by the selection of one of two lists; and otherwise they each retain whatever assets they now own, including superannuation.  She opposes continuation of any order for spouse maintenance. 

Approach – property settlement

1. The distribution of their property is governed by s 79 of the Family Law Act 1975 which prohibits the Court making an order altering the interests of parties in property unless it is satisfied in all the circumstances that it is just and equitable to do so. In considering what order to make, if any, various types of contributions are to be taken into account, described more particularly in s 79(4)(a)–(c), the effect of any proposed order on the earning capacity of either party is to be considered, regard is to be had to the matters referred to in s 75(2) so far as they are relevant, and account taken of any other order made under the Act affecting a party. It is well established that this involves a series of sequential steps: (i) the identification of the parties’ property and its’ value; (ii) an evaluation of the parties’ contributions; (iii) an evaluation of any adjustment to that assessment by reason of any relevant matters in s 75(2); and finally (iv) consideration whether the outcome fits the legislative requirement to arrive at a just and equitable outcome.

2. But before that process can be applied, the more material features of the financial history needs to be discussed and any issues resolved. 

Evidence - credit

1. The history comes not only from the evidence of the parties and the tender of documents in their case but also from the evidence of single experts – there is no dispute about the values attributed to various assets - and lay witnesses; more particularly, the husband called evidence from his son, C, and the wife called evidence from two friends, neither of whom was required for cross-examination. 

2. Some of the history is either agreed or it is undisputed but different versions are given of some developments, which come as no surprise since it stretches back over many years.  Obviously the explanations for two people giving different versions of the same history are many, including benign reasons which are no indicator of their veracity or capacity for truth telling.  Errors can be made because recollections have faded, there has been a want of documents to help piece together the unfolding of events long ago, other differences may be seen as the result of some understandable but subjective outlook and mediated without much difficulty, and still others may be largely immaterial to the outcome so choice between one version and the other becomes unnecessary.  This sort of evidence can be distinguished from the sort of unreliability that has as its genesis an intention to mislead through misstatements, obfuscation, distortions or omissions either because of a negligent or reckless approach to the truth or because deliberate lies are told for the purpose of gaining an advantage.  If differences are material, reliability as a reporter of fact comes under the spotlight and so it is here.  But also in this case, the submissions of Senior Counsel for the husband directed to the wife’s credit leave no room for benign explanations and allege there has been deliberate dishonesty.  Those submissions are better able to speak for themselves but what follows is a summary of the more central arguments.

3. The propositions that the wife could not be seen as a reliable witness and the allegation of deliberate dishonesty are said to be highlighted particularly by two areas of the evidence – the first two noted below - although there is support from other aspects of her conduct:

   (a)The first relates to what is alleged to be her deliberate dishonesty in seeking finance from the ANZ Bank in July 2007 as reflected in exhibit 18; in particular, she failed to disclose the husband’s joint ownership with her of the B1 home, she overstated its value by $300,000, she failed to disclose her obligation to pay spouse maintenance imposed by Court order, and she gave a significantly lower figure for her expenditure [$940 per month excluding loan repayments for the facility] than the evidence she gave in a financial statement filed in Court a couple of months earlier on 2 May 2007 or, in the alternative, she gave evidence to the Court of having significantly higher expenditure than was the fact. 

   (b)The second also alleges dishonesty and relates to evidence she gave by affidavit sworn 12 February 2007 where she stated unequivocally that there were no mortgages secured over either of her two properties in Queensland [which includes one at S].  Contrary to this, it emerged that she had granted a mortgage over the S property as recently as several months earlier in October 2006 and had thereby raised $120,000 [exhibit 21].  The proximity of this dealing means the explanation she offered, not being aware she should disclose this mortgage, can be dismissed and she must be taken to have been aware of the need for full disclosure of her financial dealings.  One result of this failure to do so in the affidavit was a failure to alert the husband to any need to restrain her dealing with that property pending conclusion of their property dispute and, as events transpired, a couple of months after she gave that evidence, in April 2007, she transferred the property to her nephew and his wife for a sale price of $235,000 which was markedly less than the appraisal she had been given in June the previous year putting its value between $290,000 and $310,000. 

   (c)The submissions also traverse her evidence about various defamation proceedings she had instigated.  In her affidavit sworn 31 July 2007 [exhibit 19] she provided some information to support the implicit proposition that the money she received as a result represented financial contributions she had made and yet she failed to disclose in any of it that she had instituted Court proceedings against Z Organisation [for trespass and not defamation] which had resulted in financial loss to her of $49,964.  A billing status report from her solicitors [exhibit 24] clearly demonstrates she had been paying fees related to this action between March 2006 and March 2007 and therefore it was activity with a financial consequence that could have been, and should have been, included in her 31 July 2007 affidavit, but it remained undisclosed in any affidavit until she swore an affidavit in November 2008 just prior to the resumption of the adjourned final hearing. 

   (d)Submissions about deficits in disclosure are also directed to her failure to disclose to the husband that she had drawn down funds from her self-managed superannuation on more than one occasion, her failure to disclose this to the Court in proceedings before Watts J, and her failure to adhere to the restraint imposed by order of Watts J against reducing the amount in the fund below a specified amount. 

   (e)It is also submitted that her failure to disclose to the husband her expenditure on the reconstruction of the property at H, where she admitted she intended to retire, resulted in an overcapitalisation and represents an intentional diminution of the parties’ assets or, alternatively, reckless or wanton expenditure.

   (f)The general submission is made that the wife failed in her obligation to make a full and frank disclosure of her financial circumstances. One result was the adjournment of the earlier hearing initially scheduled for June for reasons related to her lack of proper disclosure after she had sought and been granted certificates under s 128 Evidence Act 1995 (Cth) for evidence she had given.  The ‘balance sheet’ is still incomplete about things such as advances she made to her family and whether they are creditors or debtors or neither and there is still no proper accounting for significant sums of money she once retained.  There has been a failure to properly disclose the source of monies used to pay her legal costs and the proposition that they came from her earnings and superannuation fund [per exhibit 8] cannot be accepted since other sources were identified including repayment of debt by her brother and from mortgage advances.  Senior Counsel submits it is not the responsibility of the husband or his legal advisers to have to try to formulate schedules in an effort to identify where money might have gone, which they attempted to do, because it should have been disclosed by the wife but was not. 

4. Counsel for the wife in closing address asserted with some vigour the correctness of the position the wife had taken in the course of her evidence, particularly about the nature of her contributions over many years, and in effect rejected any suggestion of shortcomings in her disclosure of dealings with funds, including the significant drop in assets held in her self-managed superannuation fund post separation.  But the core propositions put for the husband about the wife’s credit were not directly addressed or confronted. 

5. Before dealing with them, the elementary observation can first be made that since these are civil proceedings the standard of proof is the balance of probabilities and, as s140 Evidence Act 1975 (Cth) provides, in deciding whether it is satisfied the case has been proved to that standard the Court is to take into account the nature of the action, the nature of the subject matter of the proceedings, and the gravity of the matters alleged.  That the degree of satisfaction will vary according to the gravity of the fact to be proved applies to the issue of credit, as it does to others, and therefore a finding consistent with the submissions for the husband becomes one of considerable gravity in light of the wife’s professional occupation, which is borne in mind in what follows.

6. Senior Counsel accurately recounted the discrepancies in the representations to the ANZ Bank in July 2007 and the evidence given around that time to this Court.  The wife did state to the Bank that the value of the B1 home was $1.5 million when she had at hand a few months earlier, in April, a valuation of $1.2 million.  She accepted she had signed the document but she explained the disparity by saying she had no recollection of stating the value to be $1.5 million.  Yet there was a further loan application made in January 2008 where again she stated the value to be $1.5 million.  This was followed in June 2008 by her sworn statement filed in Court putting the value at $1.2 million, consistent with the valuation that had been obtained.  Taken to the incorrect statement she made about ownership of the B1 property, her explanation was to the effect that her financial advisers had completed it although she agreed she had signed the document and she agreed she had not corrected it.  As she did on other occasions with respect to other issues, she would not accept her statement was ‘false’ but insisted it was ‘not accurate’.  She was bound to concede her obligation to pay spouse maintenance was not to be found anywhere on the document and nor did she disclose the potential obligation, according to her application then before the Court, to pay the husband $350,000 by way of property settlement. 

7. It is also accurate to say, as Senior Counsel did, that in her affidavit sworn 12 February 2007 she unequivocally stated that there was no mortgage over the properties she owned in Queensland.  In cross-examination she rejected the proposition that this was ‘false’ but when shown the mortgage document and it was put to her again that it was ‘false’ her response was to the effect ‘I wouldn’t say it was false.  I would certainly say it was a lapse of memory’.  Yet it is virtually impossible to accept she had forgotten about it: first, it was a substantial transaction in anyone’s language since she had raised $120,000 on the security of the S property from which she paid $80,000 towards legal fees and used the other $40,000 for her own ends; and, secondly, the transaction occurred only several months beforehand.  Further, while lapse of memory might be seen as a plausible explanation if no mention had been made of mortgages on the Queensland properties at all, it is next to impossible for that to sit comfortably with a positive assertion on oath: ‘There are no mortgages on my two Queensland properties, which are located in [northern Queensland].’  Counsel fairly asked her how she could forget a transaction of that kind within a few months and she responded: ‘…it probably doesn’t happen to men in our world as much as it happens to women…but we actually lead very full lives’ and that she had suffered an extreme amount of stress since being told by her husband in November 2001 she was not blood family [the family did not want her to attend K’s funeral] and she gave an account of her husband’s association with another woman.  It is not to question her obviously very strong feelings about these matters, but it is an improbable explanation for making such a false positive statement. 

1. Apart from this, there were other shortcomings in disclosure related to the S property:

   (a)From the $120,000 she had borrowed against the property she paid $80,000 towards her legal fees and yet she had permitted a document dated 20 June 2008 about payment of her legal fees to identify the source of her paid legal fees as income and then a later document to identify the source as her income and superannuation.  She agreed the money borrowed was not income but she pointed out she was paying the mortgage instalments and she would not concede, as it was put, that it was quite false to say that she had paid costs from her income – ‘incomplete…not false at all…it’s incomplete.’ 

   (b)She agreed she did not disclose in her financial statement sworn on 2 May 2007, the day of interim spouse maintenance proceedings before Watts J, that she had sold the S property.  She agreed she did not disclose the fact of sale until she gave her oral evidence at the hearing – indeed settlement was to take place that very afternoon – and she was bound to agree she had made no disclosure of having entered into a contract for sale some time beforehand.  When it was put to her that her failure to give notice to the husband of an intention to sell he had been effectively denied the opportunity to seek to restrain the sale at $75,000 less than the high end of the range of value she had been given, her response was non-committal - ‘…if that’s how he felt I guess that’s the situation’ - and asked to acknowledge she had an obligation to disclose to him all information relevant to the case in a timely manner, her response: ‘well actually it was in a timely manner when I stated it from the witness box’.  The contrary being put, her response: ‘Well, I suppose definitions of timely might, well any reference to time is very elastic isn’t it…?  Yet no one could reasonably interpret the chronology of her actions as fulfilling the obligation these proceedings imposed to disclose her financial dealings, and it certainly could not be said that she had properly fulfilled that obligation when the sale of this property – at a significantly less price than the valuation she had obtained earlier – is revealed during her evidence in the witness box on the day of settlement in circumstances where she had sworn on that very day a financial statement which said nothing of the property being under contract much less that settlement was scheduled for that day. 

2. Similarly it has to be said there is no satisfactory explanation for the failure to make any reference to Court proceedings which had cost a considerable amount of money for no return at the same time she gave evidence of proceedings which did give her some financial return. In fact when the June hearing was adjourned after the issue of s 128 certificates to documents she had sworn she had the opportunity to provide a more complete history of her litigation with others and she did return to it in her affidavit of November 2008. It is said that a large body of documents had been gone through in the meantime and some of the earlier figures were changed; for example, the net received from X Organisation first said to be $135,000 was substantially reduced to $49,000. There was also now included reference to the actions against Z Organisation and Y Organisation which both resulted in significant financial loss for her of almost $50,000 and over $16,000 respectively. She attributed her failure to mention the Z Organisation proceedings in the earlier affidavit to having no recollection of it at the time. Yet there were several features to this litigation: it was different to the other litigation, being for trespass not defamation; she was instructing lawyers about it over quite some time; and the cost to her in legal fees was significant in anyone’s language. Added to that, the bill of costs from the solicitors demonstrates she was involved in the litigation in March 2007, only a few months before she swore the July 2007 affidavit. She rejected the proposition that she had only put forward the ‘wins’ and not the ‘losses’ and dismissed it as ‘utter rubbish’ but viewed as a whole, these circumstances render failure to recall implausible.  She claims to have had no recollection at all of the Y Organisation proceedings and yet they had cost her over $16,200 in legal fees for an award of only $1,264; again, that has to be seen as implausible.  Despite revisiting the whole topic of litigation with others in her later affidavit, correcting earlier figures and including earlier omissions, there was still in the end no concise or clear account of her dealings with funds involved, either as to the legal fees paid including their source or a proper account of the use made of the awards received. 

3. As for the substantial diminution in her self-managed superannuation over time, and contrary to the orders of Watts J, the response to cross-examination about this was variously unresponsive, combative, or lacking in appreciation of the positive obligation on any party to reveal their financial dealings: for example, she responded at one point by listing the failings of her husband who does not know the ‘meaning of fidelity’; she questioned the meaning of failure to make a full and frank disclosure since that assumes recollection and records of how the money was spent which she does not have; she insisted she had produced documents and that her financial institutions have responded to subpoenas from the husband and ‘…if he wants to know what happened to my money it’s up to him.  I’m not going to run around handing out receipts and cheque butts and so forth to him…..But I have been asked to produce documents for these proceedings and I have produced them.  I have lifted files out of my filing cabinet holus bolus and produced them.’ 

4. Unfortunately this antipathetic attitude demonstrates a failure to recognise that the Court has a responsibility to identify the property of the parties - it is the first step, and an important one, in the whole process of property division which relies to an extent on the honesty and candour of the parties.  If a party in control of substantial funds moves money around between several accounts and uses it for various purposes without the other party’s knowledge let alone agreement, and if the funds once available have been significantly diminished, there is a clear obligation on the party in control of the necessary information not only to produce the documents related to their dealings but to give a comprehensible account of their dealings so they can be verified if necessary.  The obligation of disclosure is a positive one.  Mere passive co-operation with the investigative efforts of the other party by operating from the maxim ‘if you can’t convince them, confuse them’ is not sufficient, the object is not to confuse, and nor is it a pea-and-thimble exercise that requires the other party - and the Court - to do what they can to cobble together what has been done from a mass of source documents in the hope of ultimately identifying the thimble that hides the pea.  And yet that is what has happened here.  Despite the wife’s schedule K annexed to her November 2008 affidavit listing transactions in the self-managed superannuation fund for the period from 31 May 2007 [credit balance $1.089 million] to 13 June 2008 [credit balance $8,977], which accuracy was questioned, that was only one of the accounts she controlled and so schedules were prepared by the husband’s legal representatives trying to analyse spending not only from that account [exhibit 41] but also from her ANZ loan account [exhibit 44] and from her N Credit Union account [exhibit 43] which became the subject of dispute after the hearing and led to the re-listing of the matter on 30 January when a joint schedule was tendered [exhibit 45].  Even those schedules of analysis of her activity does not reveal the full picture; for example, there is over $217,000 in expenditure from the N Credit Union account marked ‘unknown’ and over $145,000 paid to members of the wife’s family without any satisfactory account having been given for the nature of those advances.  Quite apart from the schedules for these separate accounts, there is transfer of funds between these accounts which makes the prospect of double counting through add backs to the asset list a hazardous exercise and in the final analysis there is no simple explanation of what has happened to a very significant sum of money since at least the parties final separation. 

5. Unquestionably Senior Counsel for the husband could accurately submit that all of this not only renders the wife’s evidence unreliable but demonstrates to the requisite standard a failure to fulfil the obligation of proper disclosure of her financial dealings.  While there might have been shortcomings in the evidence of the husband, they were nowhere near the same category, so it can be concluded confidently that where there is a conflict, the husband’s evidence will be preferred unless it is otherwise established to be incorrect, improbable or inherently unbelievable.  This is sufficient to resolve any conflict with the husband’s version of events and sufficient grounding to apply the approach discussed in authorities below on disclosure:

   (a)Black & Kellner (1992) FLC 92-287 [per Nicholson CJ, Ellis, Cohen JJ] at 79,133:

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

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

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

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

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

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

   (b)This was followed by Weir & Weir (1993) FLC 92-338 [per Nicholson CJ, Strauss, Nygh JJ] at 79,593:

   ‘This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black and Kellner (1992) FLC ¶92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti and Giunti (1986) FLC ¶91-759, and Mezzacappa and Mezzacappa (1987) 11 Fam LR 957; (1987) FLC ¶91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.

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

   …

   We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party.  It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.

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

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

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

   (c)More recently the Full Court has discussed the disclosure obligation in Kiefer & Kiefer (2008) 40 FLR 295 [per Bryant CJ, Finn, Mushin JJ] but there was no departure from any of the essentials discussed in those earlier cases.

6. In what follows of the essential history, statements of facts are to be construed as findings of fact and where necessary will have relied on the finding discussed. 

Material history

1. Both parties came to the relationship in 1982 with tertiary qualifications and established careers:

   (a)In 1946 the husband was awarded a Diploma of Education, in 1953 he completed an Arts degree, both from the University of Sydney, in 1962 he completed a Masters in Education, and in 1966 he was awarded a PhD.  When they met in 1982 he was employed in the New South Wales Public Service and when they married he was employed as a Public Service Manager.  His income, according to a document from the S Superannuation Board dated 21 July 1987, was $53,633 per annum and he received a small pension from C, of approximately $65-$70 per week. 

   (b)In 1956, at the age of 15, the wife was awarded a teacher’s scholarship in Queensland and from there she taught in Queensland schools for more than 10 years.  She later obtained a professional qualification and worked with a community organisation, as a teacher and in public service before her appointment as a Public Service Manager which was the position she held at the time the parties met in 1982 and when they married in May 1985.  There is no indication of her earnings at the time but no doubt they were commensurate with her position as a senior public servant. 

2. They both came to the relationship with some property:

   (a)In May 1979 the husband and his former partner jointly purchased a home in W for $141,000, borrowing $75,000 for that purpose.  In June 1994 the husband and his former partner had entered into consent orders in the Supreme Court providing for the husband to retain the W home subject to the mortgage - by then around $72,000 was owing - and to pay his former partner $45,000.  He paid the sum agreed in August 1985 by raising $28,000 by way of second mortgage and the balance of $17,000 came from his own funds.  The evidence given here by a single expert, Mr G, values the property in May 1985 at $325,000.  At the time the husband also had superannuation entitlements with S Fund of some unspecified amount to which he had been contributing since 1978 as well as a small number of shares. 

   (b)In 1982 the wife purchased a home in Sydney for $92,500 with money borrowed from the State Bank of New South Wales and secured by a mortgage stamped to $95,000.  She lived in the Sydney home until she moved to live with the husband in his W home shortly before their marriage.  From that time her two daughters lived rent-free in the Sydney home while she continued to pay the mortgage instalments.  The evidence of a single expert values the home in May 1985 at $120,000 but, as will soon be noted, the wife sold it the following year for $115,000.  She also had a motor vehicle, some furniture and she had been contributing to superannuation with AMP since 1981. 

3. It was not long before their careers took different turns and over subsequent years there were a series of property transactions.  First to their work and earnings history after marriage:

   (a)The wife held her position as a senior public servant until August 1986 when she was appointed a public official.  Initially for the first two or three years she spent more time travelling in country New South Wales than in later years and when she was away she either returned to Sydney at the weekend or the husband accompanied her while his sons went to stay with their mother.  From the time of her appointment she began contributing to the AS Superannuation Scheme.  She continues to hold office as a public official and may do so until retirement in 2013.  Her earnings are currently around $240,000 gross per annum. 

   (b)In July 1987, at age 60, the husband retired from the public service.  At the time he commuted to a lump sum most of his superannuation entitlement and he received $218,685.  He initially retained a pension entitlement of $100 per fortnight but within several months this was also commuted to a lump sum and he received $25,000.  From that point he was no longer in full time employment and he was without any superannuation entitlement.  But he did undertake casual or part time work over subsequent years; in particular, from late 1987 he worked part time as a teacher until 2002.  He earned about $10,000 per annum for the first two years when his workload and therefore income varied.  His gross earnings were: 1990 - $5,542; 1991 - $3,089; 1992 - $4,443; 1993 - $1,374; 1994 - $10,777; 1995 - $8,423; 1996 - $12,493; 1997 - $656; 1998 - $885 which is where his records end.  As well as that work, in 1996 he worked as a consultant overseas where he spent seven months and he received his accommodation and airfares and was paid approximately $60,000.  He also retained his C pension throughout and from time to time he received dividends from shares.  As an indicator of his earnings, he put his gross income for the decade between 1990 and 2000 at $161,882.  Of course after 1987 he had the capital derived from his superannuation and from the sale of shares at times.  Presently his income consists of $80 per week from his C pension, a small Centrelink benefit and spouse maintenance paid by the wife pursuant to Court orders. 

1. Obviously after the husband’s retirement two years into the marriage the wife remained the greater income earner by far.  From that time she paid $1,000 per fortnight to the husband’s account although she later reduced it for a time to $500 per fortnight which the husband dates from January 2001.  He says she paid this money either to his Commonwealth Bank account or to their joint N Credit Union account. 

2. The wife gave evidence to the effect that after retirement the husband never told her what his earnings were, she continued to support the entire household including the expenses for his children, and he used his small income for his own personal use including buying expensive golfing equipment, golf club membership and playing golf, purchasing new tennis racquets, tennis club membership and playing tennis and purchasing new squash rackets and playing squash.  But this is in conflict with the husband’s evidence that he contributed all of his income from his work after retirement towards their day to day living expenses and that is accepted.  The wife’s dealings with her income, particularly in later years, were used in ways she chose, including making contributions to her superannuation to maximise the benefits available from doing so, and for payment of legal fees for litigation she engaged in, but there is no question that as well as what she paid towards their day to day living and entertainment and holidays, she also she paid household bills and she paid mortgage instalments for debt raised after the husband’s retirement.

3. There were also benefits other than income derived from the wife’s employment and there were benefits from her installation in 1994 or thereabouts as the head of E Organisation, for example:

   (a)In 1991 the wife took long service leave for 3½ months and the parties took a camping trip in Australia.  On her case she paid all of their expenses, including the lease of a four-wheel drive vehicle.  But the husband says he contributed towards their day to day expenses from funds he had available and that is accepted. 

   (b)In 1999, as Head of E Organisation, the wife was invited to attend a conference of Organisation heads in Canada and the invitation extended to their spouses.  The Organisation paid for their first class travel around the world and for five-star accommodation in Canada.  During this trip they visited former colleagues of the husband’s, they went to Ireland for sight-seeing and golf and stayed at an Irish Organisation by reason of her E Organisation appointment, and they went to Paris before she returned to Australia for work while the husband extended his travel to Germany and the Greek Islands to visit friends.  It is the wife’s evidence that she paid for all of the expenses not met by E Organisation but the husband claims he contributed towards some of the expenses which is accepted. 

   (c)Through her employment the wife provided both parties with motor vehicles which were renewed every two years or so. 

   (d)Although not related to her employment, it is convenient to mention here that in 2002 the wife received an inheritance of $20,000 from her father’s Estate and she used the money towards a golfing holiday in Spain for her and the husband, flying business class and staying at five-star accommodation before visiting friends in Germany and England.  The husband concedes she paid about 75% of the costs involved in the trip and it is accepted he paid the remainder. 

4. Apart from his earnings and other income outlined, it is accepted that the husband made various other contributions:

   (a)After his retirement he took over the bulk of household duties which included tidying the house daily, vacuuming, and shopping for food and household requirements, usually daily.  He shared the laundry and ironing with the wife and planned menus and prepared meals most days of the week.  They entertained regularly until the last couple of years and he often planned the menu and prepared meals and cleaned up afterwards.  The husband does not dispute people were engaged at times to do cleaning, window cleaning, gardening and handyman tasks, which is not necessarily inconsistent with his evidence about his responsibilities around the household.  The picture the wife gives of him - spending his time playing golf or squash or tennis and relaxing at the weekends while he took holidays overseas without her and travelled in Australia without her to play golf - is not complete and gives no recognition of his contributions around the home.  None of this is to suggest the wife did not also undertake various domestic tasks - she did - and that included gardening, some washing and cooking and the preparations necessary to entertain guests regularly as well as some sewing and tailoring. 

   (b)He took responsibility for arranging concert subscriptions and arranging their entertainment generally. 

   (c)      He accompanied the wife as a partner to official dinners and meetings.

   (d)He accompanied her to functions she attended in her role as Head of E Organisation and as a public official and at times he drove her to work including in the country. 

   (e)After the wife underwent knee surgery in 1994 he assisted her with attendance at hospital and generally with her care and recuperation. 

   (f)He attended Court hearings with her in 2003 and 2004 when she was involved in defamation proceedings and he permitted money to be raised on the security of their home to pay towards the costs she incurred in instigating litigation, but more of that later. 

   (g)He also attended to various tasks associated with renovations to the W home which spanned several years, to be mentioned shortly. 

5. In September 1986, shortly after the wife’s appointment as a public official, she sold the property in Sydney for $115,000.  There had been no reduction in the mortgage debt since their marriage, or at least no meaningful reduction.  The net proceeds of sale after discharge and after payment of selling costs were never specified but, whatever was received, the wife gave inconsistent evidence about what she had done with the money: it had been given to her daughters and then $11,000 had been used to pay out the husband’s credit card debt with the remainder going towards joint expenses.  The husband denies any of it went towards payment of his credit card debt which he paid each month to avoid paying interest and since he was still in full time employment at the time there is no reason to doubt it.  The wife’s counsel said in closing that there is no issue about the money having gone towards household expenses but submissions for the husband differed.  Having said that, whatever the amount involved, it is unlikely to have been sufficient to have any real impact on the outcome here and it can be regarded as contributed by the wife in some way for their common benefit. 

6. As for their dealings with capital, the next major event occurred the following year and that was the husband’s retirement and commutation of his superannuation, mentioned earlier.  He deposited the money received to his account with Macquarie.  It is the wife’s evidence that she was not aware at any time of the amount he received since he had not informed her of it – as he did not inform her during the marriage of the details of his financial circumstances – but the husband denies that information was quarantined from her.  To the contrary, it is accepted they had considerable discussion the year before his retirement when they agreed he would take a lump sum from his superannuation to pay off the mortgage; to do renovations on the house and travel; he would have his remaining fortnightly pension, his C pension and the anticipation of some part time work which, with her salary, would be sufficient for them to live on; and he would be more involved generally around the house. 

7. It is also accepted that the husband used the totality of his superannuation payout – total of $243,685 paid in two lots in 1987 - in one direction or another for their common benefit.  He paid out the mortgages then secured on the W home totalling $100,000 from which point he became the sole owner of that unencumbered property.  He paid for an overseas holiday they took - he gave no figure for the cost but the wife put it at $10,000.  He paid to fix a rising damp problem at the W home of some unspecified amount.  He also used the money invested to pay living expenses as required and otherwise he bought some shares and paid some of the cost of renovating the W home which began in 1989 – both of which were the subject of controversy. 

8. As for the purchase of shares, the wife introduced the topic in her affidavit by outlining a brief exchange between her and the husband prior to receipt of his superannuation payout to the effect that he told her he intended to put it all into stocks and shares and she told him her father had always told her to put her money into property.  She went on to say that he later informed her of some of his share investments and she told him he was ‘simply gambling with your money rather than making considered judgments regarding your investments’. Apart from the proposition implicit in this evidence that he had unwisely ignored her advice and invested all of his money on the stock market, she went on in her affidavit to sheet home to him responsibility for losses he incurred as a result of the October 1987 stock market collapse, again because he ignored her timely advice.  As she relates it, they were in London in early October 1987 on holidays when news came of a market crash on the London Stock Exchange, she told him to contact his stockbroker in Sydney immediately and sell his shares to avoid possible financial disaster, but he passed it off and shortly after their return home the Australian Stock Exchange crashed.  She describes the husband being extremely distressed and telling her he had ‘lost everything’. 

9. It is unsurprising that this sequence of events was the subject of cross-examination, but in any event the husband denies he invested all his money in shares and he denies he ever claimed to have lost everything; he did buy some shares and he did incur some loss in the October 1987 crash although he did not regard it as hugely significant.  On his evidence he invested around $26,000 in shares and he quantified his loss at $22,663.  His calculation is set out in a schedule of his share dealings annexed to his affidavit sworn 8 December 2008 covering the period from his marriage [when he owned a small number of shares] until October 1988.  He also annexes a statement of his account with Macquarie Group demonstrating that as at October 1988 he had a credit balance of $115,572 which is counter to the proposition that he invested all his money in shares and is consistent generally with his evidence of what he did with his superannuation payment to that point.  There is a submission from the wife’s counsel in closing address to the effect that it is not the wife’s case that the husband had invested all of his superannuation in shares but that she believed he had done so because he had misrepresented the situation to her; however, this runs counter to the evidence the wife gave in her November 2008 affidavit and it is highly unlikely in any event that there was any misrepresentation. 

10. As for the renovations to the W home, these were relatively extensive and involved the engagement of an architect, required council approval, and took a great deal of time and generated obvious inconvenience – for example, the work was underway over several years and for three or four months in 1991 they moved out to live in the husband’s brother’s unit where they paid no rent but contributed to outgoings.  They differ about the cost involved; the wife says it was $250,000 whereas the husband says it was about $200,000.  Whatever the case, it is accepted they borrowed a total of $130,000 from the Colonial State Bank for that purpose: $80,000 in January 1990 and $50,000 in February 1991.  There is a bank statement supporting that.  At the time of the first loan the husband transferred to the wife a half interest in the property and from that point they held it as tenant-in-common in equal shares.  On the wife’s evidence this came about because the bank required her to be registered or they would not advance the loan and that may have been so.  But whatever the precise cost of the renovations, it was more than they borrowed in 1990 and 1991, and plainly the gap had to come from somewhere.  The husband identified it as coming from his superannuation payout.  The wife questions this as being somehow incongruent with their borrowing money when they did, but it is entirely plausible and it is accepted that the gap between the total costs over time and what they borrowed came from the capital he had invested. 

11. Once they borrowed the money from the Colonial State Bank the wife’s income was the source for payment of the mortgage instalments, except for the two repayments she identifies the husband paid from his earnings while he was employed overseas in 1996.  Work was undertaken on the project and, contrary to the wife’s view of it, it is accepted that the husband the husband did do the work he outlined in his evidence; in summary, liaising with the council and the builder and the tradesmen as well as with suppliers, shopping for items and organising delivery, digging, constructing bench and storage facilities, some painting and cleaning up after tradesmen. 

12. In 1999 the W home was sold but before coming to that it will be convenient to mention some other developments in the years leading up to that sale – and after – which means a return to the litigation the wife instigated against others, the first action commencing in 1994.  In her affidavit sworn 31 July 2007 she identified ‘approximately 6’ separate defamation actions ‘including […], […], [V Organisation], [U Organisation], [Y Organisation], [X Organisation], and a [X Organisation] appeal matter’ and she gave some evidence about those actions, much of which was repeated in her later November 2008 affidavit, as discussed earlier.  In neither affidavit is there sufficient clarity about what all this meant for the parties’ finances.  For example, if money was borrowed for legal costs, it might be reasonable to expect the award would have been applied first to the discharge of the debt before the surplus was dealt with in some other way – this ‘no debt/surplus cash’ scenario would be complicated only by the litigation losses against Z Organisation and Y Organisation totalling more than $66,000.  So it would be reasonable to think the debt for this activity at the end of the day would have been no more than $66,000.  To come at it from another angle, the wife in paragraph 79 of her affidavit set out in three columns the name of the respondents to her claims, the damages awarded to her and the legal costs she had paid.  Total damages awarded were said to be $535,510 and the total legal costs paid were said to be $394,862 which mathematically gives a net gain of $140,648 which is argued to be a financial contribution from her.  But that assumes all or any debt raised to pay the legal costs was paid out of the awards received.  If the debt was not discharged but was left to be deducted now from their joint assets, not only must the supposed contribution be seen in an entirely different light but that would mean the lingering mortgage debt raised for that purpose has reduced the assets that would otherwise be available for distribution and it would mean the husband is being asked to shoulder part of that debt.  Yet the information about this activity was not provided in a way that could square away these sorts of issues and listing the awards and listing the costs without also listing what debt was raised and discharged is insufficient to show the impact on their finances. 

13. From the wife’s evidence there were two actions initiated before the sale of the W home in August 1999:

    (a)The action against V Organisation began in 1994 and concluded in December 1997.  The award was $90,000 inclusive of legal costs of $24,913 and the wife funded the action ‘entirely out of my own funds’.  She used the money in July 1998 to purchase a property at H in Queensland for $100,000.  If she had paid costs from earnings as the action progressed, presumably she would have been able to retain the whole of the award and that means she would have had to find less money to complete the purchase than if she paid the costs from the award when received.  Either way, she had to find additional funds, greater or lesser, but there is no information about where they came from.  She says she purchased the property to provide security and comfort for her father whose health was deteriorating and he lived there under the care of her sister who was a nurse until he passed away September 1999.  Her sister lived there until January 2007 or thereabouts at which time there were further developments to be noted later.  The husband says he was unaware she had purchased the property until 2003. 

    (b)In 1998 she claimed damages for defamation against U Organisation for which she incurred costs of $548 and she received at some point $3,000 which she says she contributed towards family expenses.

14. In August 1999 they sold the W property for $1.2 million.  The settlement figures [annexure I to husband’s affidavit] are set out below and include a sum invested with the Trust Company pending settlement of the purchase of their next home at B1 for $745,000:

    Discharge of mortgage to Colonial State Bank   102,792
    N Credit Union “to finalise loans”   203,684
    Agents commission   28,737
    Adjustments  310
    Invest The Trust Company pending settlement purchase     864,523
      1,200,046

15. As the settlement figures demonstrate, the mortgage in favour of the Colonial State Bank for renovations had been reduced over the years from $130,000 to $102,792.  There is a submission for the wife that her income made the renovations possible and resulted in a substantial increase in value, the home having sold for $1.2 million from a cost base of $325,000, but that not only entirely overstates the position it also lacks foundation in fact or permissible opinion. 

16. If one turns to the statement for the joint N Credit Union account [annexure K to husband’s affidavit], that shows the deposit of $203,684 on 20 August and on that same day there are transfers of two amounts to loan accounts: one for $73,624 and the other for $118,181.  The purpose of these loans is not apparent.  It may be the former was raised to pay the deposit on the B1 property purchase given the amount involved but that would be to speculate and there is nothing to indicate the purpose of debt amounting to $118,000.  The only other activity leading up to this had been the wife’s defamation litigation and her purchase of the property at H the year before, for which she needed funds to complete as just mentioned, but this is entirely speculative also.  The statements of the account demonstrate that throughout September and early October there were several deposits to the account from the Trust Company [other deposits were the wife’s salary] and from the account there was paid to each of the parties four children the sum of $12,500.  By the time those four cheques had been presented by early November, the credit balance of the account was reduced to $57,523 and by the end of the month there was a credit balance of $32,788.  It all seems to have been spent for one purpose or another. 

17. Having paid cash for the B1 home, they had no debt.  Some work was done to the home but from the description provided it was relatively minor.  The wife takes it up in her affidavit and, without being comprehensive, that includes sanding floors, some carpentry, some electrical rewiring, the installation of an air conditioning system, new automatic sun blind, landscaping and installation of new irrigation system.  They purchased furniture and personal items like golf clubs, sewing machine and outdoor furniture.  No doubt some of the surplus funds from the sale were applied in this direction. 

1. The next significant development was the wife’s action against X Organisation which was instigated in December 1999, some months after the move to B1, and was to run over the next six years and go to the High Court before it came to an end in 2005 or thereabouts.  In her affidavit [paragraph 77] the wife says she applied to N Credit Union to ‘extend our mortgage’ to fund that action; however, there was no mortgage at that time to extend and this is probably a reference to several later extensions to the mortgage to fund this litigation.  As co-owner, the husband was required to consent and he did.  The wife made all of the mortgage repayments.  There is no complete picture of the progress of the mortgage debt over time but there are some markers apparent from annexure L to the husband’s affidavit: for example, as at September 2002 the debt is $110,123 and was increased at that time to $152,983; as at February 2003 the debt was $151,700 and was increased further to $181,700; as at April 2005 the debt was $410,852 and was increased further to $528,481.  I shall come to the increase in April 2005 shortly but two things can be said about this progression of debt over this period: first, the whole of the debt to February 2003 of $181,700 could only have related to the wife’s need for funds for the defamation litigation; secondly, there is a very large leap between then and the debt of $410,852 in April 2005 before the further increase of some $117,000 and no explanation was given for that in the affidavit evidence.  As it happened, it emerged from the wife’s cross-examination that the mortgage on B1 property had been the source to purchase the property at S in her name in 2003.  Apart from that, up until the further advance in April 2005 the debt could only have related to the wife’s litigation. 

2. In November 2000 the wife instigated proceedings for defamation against a journalist and at some later unspecified time she received $80,000 inclusive of legal costs.  She says her legal fees amounted to $15,355 and therefore the net return was $64,644.  The money, she says, was applied to living and household expenses.  But she says nothing about how the action was funded, more particularly if funds were borrowed against the B1 home - by September 2002 the mortgage debt was around $110,000 - and, if it was, whether the debt was repaid from the award or whether the debt was left to be paid off, albeit from her income, and she retained the whole of the award and used it for other purposes.  There was an action against a newspaper earlier in 2000 and that resulted in an apology and payment of her legal expenses of $522. 

3. In June 2001 the wife’s AMP Superannuation fund matured and was retained in AMP on “an accrual basis”. 

4. Then in June 2003 the wife purchased S property in Queensland for $205,000.  On her evidence, two of her nephews and their families moved into the property and paid rent intermittently.  She says the husband was opposed to her purchasing the property but he claims not to have been aware of the purchase until after she had bought it [paragraph 93].  Whatever the case, the wife did not identify in her affidavit the source of funds to buy the property although she agreed in cross-examination the money was borrowed from the N Credit Union [L34 advance] on the security of the B1 home [which is held as tenants-in-common in equal shares] and that the debt of $260,693 referred to in paragraph 83(d) of her affidavit [giving details of disbursement of further funds borrowed in April 2005] was referable to this purchase. 

5. In 2004 the parties separated.  The husband had developed an intimate relationship with another woman and in September he moved out at the wife’s request.  He had his C pension but no other funds and he borrowed $10,000 from his former wife and $3,200 from his daughter to meet his needs.  The wife cancelled the lease on the vehicle he was using and this resulted her paying some $12,000 when the lease was surrendered.  After some months of counselling they reconciled and the husband returned to the home in April 2005 from which time the wife began to deposit $1,000 a fortnight to his account. 

6. In giving evidence of the history of defamation litigation [paragraph 81] the wife observes that the ‘various extensions to our mortgage were not solely for legal costs of the defamation proceedings’ before relating [paragraph 82] a further extension of the mortgage in April 2005 around the time of their reconciliation.  From those further monies she retained around $66,000 for payment of legal costs and $50,000 was given to the husband or paid for his benefit - at his request $16,000 was paid to his son – but she said she was unaware how he used the balance.  In fact he used it to repay debt he had incurred during the months of their separation when he needed funds for living. 

7. A document generated by the N Credit Union gives the detail of the disbursement of funds at the time of this extension - in effect there was a consolidation of existing loans and payments made in various directions.  The wife repeats this information in paragraph 83 of her affidavit which includes repayment of existing loans – 83 (d) loan of $152,652 and 83 (e) loan of $260,639.  Nothing is said of the purpose of these loans although the latter was identified as referable to her purchase of the S property in 2003.  It can be assumed that the other loan represented money used by her for litigation.  For the purpose of the hearing the mortgage debt was agreed at $452,604.  The wife has paid the mortgage instalments from funds she has had available.  

8. In August 2005 the wife established the A Superannuation Fund, a self managed fund.  She and her daughters are members and they are trustees with her and her sister.  Her daughters are beneficiaries along with the wife who says they contribute to the fund.  I shall come back to this later since there has been significant depletion of funds invested since separation. 

9. In late 2005 the New South Wales Court of Appeal delivered judgment on the wife’s appeal in the X Organisation litigation and orders were made providing for her to be paid $175,000, X Organisation to pay her costs at first instance, and the wife to pay 25% of X Organisation’s costs of the appeal.  On her evidence she received [on some unspecified date but obviously late 2005] $331,340 inclusive of legal fees and interest, her costs amounted to $281,775 and therefore the net return amounted to $49,565.  Initially her brother had lent her $40,000 to help fund the action and she repaid him when she was paid her initial costs.  She adds ‘it was in relation to the ongoing costs including the appeals at both NSW Court of Appeal and High Court levels that I needed to raise further funds by extension of the home mortgage’.  There remains an unsatisfactory vagueness about this because there is no picture of the implications for the parties’ finances; more particularly from the amount received what, if anything, was paid in reduction of the mortgage debt or was the gross amount received and applied for purposes of her choosing, leaving the mortgage debt to be paid off by instalments.  If the latter, the payments were certainly coming from her income, a point reiterated by the wife, but that would mean the debt was not reduced and that is a debt her case here seeks to bring to account as a joint debt for the purpose of calculating net assets and therefore entitlements. 

10. 2006 saw the parties’ final separation.  Whether that was in February 2006 or August 2006 was the subject of argument.  For the wife’s part, that rests in part on the proposition that she was still paying money regularly to the husband’s account until August when her payments ceased and it was only after what was referred to as the ‘Sydney theatre incident’ in mid-August did she resolve there was no prospect of a reconciliation with the husband.  Whatever might have been her resolve, however, it is beyond reasonable argument that their separation occurred earlier in the year.  The husband instituted these property proceedings in May 2006 and around that time the wife left Australia for a holiday overseas on her own but on 27 June 2006 she filed a response also seeking orders for property settlement.  It could not be said these documents were exchanged without there being a separation.  They had separated well before the Sydney theatre incident; the husband’s case is accepted. 

11. After some initial temporary accommodation the husband took a lease on a unit at B.  In July he again borrowed money from his former wife to meet his financial needs. 

12. The wife remained living in the B1 home and she paid all the usual charges as well as the mortgage instalments and she has maintained the property.  She has also paid for the installation of a security gate for $11,000, security screens for $9,500 and rebuilding decks for $7,200.  She has purchased household items: rugs custom designed for her, paintings, Indigenous artefacts, beds, sound system, lamps and coffee table.  There was dispute aired in the affidavits about furniture and personal effects but not particularly elaborated in the evidence and the minutes of orders each propose a way of dealing with the issue. 

13. Apart from those matters, the last 2 ½ years or so since the husband left the home have seen developments in several directions. 

14. First, to the S property:

    (a)The wife had engaged an agent to provide a written appraisal of the value of the property and by letter dated 30 June 2006 she was advised it was worth between $290,000 and $310,000.  

    (b)In October 2006 she borrowed $120,000 secured by mortgage over the property – mention was made earlier of false evidence given about this – and she used the funds to pay legal fees of approximately $80,000 and the remaining $40,000 she spent on an overseas holiday travelling Premium Business Class, and gifts and she retained some funds in her bank account although she does not specify what proportion.  It is accepted that she did not discuss this loan with the husband and nor did he receive any benefit from the funds borrowed. 

    (c)On 30 April 2007 she sold the property to her nephew and his wife for $235,000.  The mortgage in favour of the N Credit Union was discharged for just over $120,000.  It will be recalled that this property had been purchased with funds secured over the B1 property but the balance remaining was not applied towards that debt; the wife’s evidence is that the balance was paid into her N Credit Union account which she says she used to pay ‘sundry expenses, including purchase of further furniture’ for the B1 and H properties [paragraph 98].  The amount available in fact was $114,876 which was deposited to her account on 11 May 2007.  A schedule summarising her expenditure from the N Credit Union account so far as that could be identified became exhibit 45. 

    (d)A single expert valued the S property as at March 2007 at $355,000.  This provided the basis of argument for the husband that it had been sold at undervalue of $120,000. 

15. Next, to the development of the H property:

    (a)In January 2007 the wife’s sister vacated the property and the wife arranged for the home to be demolished and a new dwelling constructed.  Her sister then moved back and she continues to live there.  In her affidavit sworn 31 July 2007 she said she was intending to raise a loan on the property to pay for the building and associated costs.  By that time she had applied for the loan from the ANZ Bank discussed earlier [dated 25 July 2007].  The wife’s evidence is that the cost of construction was $470,759 which she borrowed from the ANZ Bank and she also drew money from the A Superannuation Fund.  In her November 2008 affidavit she identified $257,410 as coming from the A Superannuation fund for that purpose and it was also the source of money to purchase furniture for the house at a cost of $7,890. 

    (b)A single expert valued the H property in July 2007 – at a time when the existing dwelling had been demolished but the new home not yet constructed.  That was undertaken on two bases: ‘as is’ [no significant structural improvements] and ‘as if the demolished improvements were still erected’.  The former was valued at between $225,000 and $250,000 and the latter at $305,000.  The current value of the property is agreed at $455,000.  The current debt to the ANZ Bank is $348,643. 

    (c)These various figures are the grounding for the submission for the husband that the property has been overcapitalised. 

16. Next, to other litigation involving the wife:

    (a)At some stage not specified the wife brought proceedings for trespass against Z Organisation which, as already noted, resulted in her incurring legal costs of $49,964 for no return.  The billing status report from her lawyers [exhibit 24] indicates this was running at least between March 2006 and March 2007.  The source from which those costs were paid is not identified. 

    (b)There were also proceedings for an apprehended violence order against the wife, the protected person being the woman with whom the husband had formed a relationship.  After some time and after incurring costs totalling around $121,000 [see exhibit 8] the wife consented on 7 December 2007 to certain restraints being imposed on her for a period of time.  The specific source of funds to pay these costs was not identified in exhibit 8 but in schedule K to her November 2008 affidavit the wife identifies $112,000 or thereabouts as coming from the bank account of the A Superannuation fund. 

17. There have also been interlocutory proceedings in this Court including a claim by the husband for interim spouse maintenance.  Prior to that the wife had paid to the husband or on his behalf [to remove his furniture and personal effects from the home] two payments totalling $30,000.  She proposes this be taken into account as a partial property settlement paid by her but it was agreed the nature of the payment is to be characterised here. 

18. On 2 May 2007 the husband’s application for interim spouse maintenance and restraining orders came on for hearing before Watts J.  The husband identifies this as the day he first learned the wife had rolled over her superannuation benefits into an account she controlled with the Macquarie Bank.  In any event, on 31 May 2007 orders were made by Watts J providing for the wife to pay the husband $107,000 by way of an interim property settlement [later amended under the slip rule to $97,000] and interim spouse maintenance of $984 per week.  Those orders also restrained the wife from dealing with or further encumbering the B1 property and restrained her from dealing with or encumbering her interest in the A Superannuation fund in such a way as to have the effect of reducing the funds invested with Macquarie Investment Management Limited below an amount of $680,000.  Other restraints were imposed on her communication with the husband or coming within 100 metres of an address in B.  The wife appealed the orders and the appeal was dismissed in respect of the maintenance but upheld in respect of the last mentioned restraints and those orders were discharged. 

19. Next, to the wife’s dealings with superannuation:

    (a)Around the time of their separation in 2006 – more particularly at the time the wife swore a financial statement in June 2006 – she had an entitlement to superannuation with the S Superannuation Fund of over $1.062 million and there was $237,476 invested in the A Superannuation fund. 

    (b)In May 2006 she received financial advice from financial planners, I Financial Planners, and in February 2007 she signed a client acknowledgement authority allowing them to implement the financial plan they had earlier provided. 

    (c)On 13 March 2007 she rolled over her S Fund entitlement of $1,138,516 into the A Superannuation Fund [see annexure J to her November 2008 affidavit] bringing the credit balance in the funds account with Macquarie Investment Management Limited to over $1.244 million.  She identifies the combined member entitlements of her daughters to be $65,000 and the balance of the fund represents her entitlement.  In addition to 9% compulsory contribution paid into the A Fund at some point she commenced to pay a further 50% of her income into the fund [this ceased in June 2008] and she became entitled to draw funds as an allocated pension. 

    (d)On her account of it, from 31 May 2007 to early 2008 I Financial Planners conducted the purchase and sale of shares and other investments without recourse to the trustees’ instructions for specific investments and it was only in early 2008 when the stock market started performing badly that they commenced a process of occasionally obtaining instructions from the trustees, particularly when they proposed a significant change to the nature of an investment.

    (e)Whatever the case, in her November 2008 affidavit [paragraph 152] she said the only bank account of A Fund as at 31 May 2007 was the cash management account with Macquarie Bank and she annexed to the affidavit [annexure K] a schedule setting out transactions on that account between 31 May 2007 and 13 June 2008.  The credit balance as at 31 May 2007 was $1.089 million [she says A Fund had no assets other than the cash invested with Macquarie Bank at that time] and the credit balance as at 13 June 2008 was $8,977. Since then there have been some payments of relatively modest sums to the ATO.  In other words, there had been a reduction of over $1.08 million in the balance of that account during that year.  Annexure K identifies a variety of payments in various directions including payment of legal costs, funds towards the construction of the H home, payment of the mortgage instalments, what is identified as living expenses, transfers to her N Credit Union account, and payments to her relatives amongst other expenditure.  It appears also to have been the source of payment of the $97,000 to the husband as well as some periodic spouse maintenance payments.  There are also deposits being salary payments and proceeds from the sale of shares.  She elaborates on annexure K in her affidavit but nothing particular needs to be recorded about that. 

    (f)In the affidavit she swore on 13 June 2008, in addition to the cash management account credit balance of $8,977 her evidence is that the A fund held shares managed by I Financial Planners with a market value of $183,575 and cash accounts conducted by I Financial Planners as at 24 June 2008 with a balance of $112,398 [see annexure N and O] and A Fund had invested in convertible notes with a market value of $16,100 [see annexure P].  The total value of all investments was put at $321,051 before payment of tax foreshadowed of some $18,000.  Bringing that to account and allowing for the interest of the other members she calculated her entitlement to be $213,411.  As at the hearing, this was put at $226,623.  She quantifies losses suffered on share transactions at $247,209 – ie. purchases totalling $771,753, sales of $340,969 but those held worth $183,575. 

    (g)Obviously the fund went well below the amount specified in the orders of Watts J restraining her dealings with the fund beyond that amount.  At one point she said she believed at the time that as long as the fund had assets to the value required by the Court order she was compliant; however, the terms of the order of 31 May 2007 are quite specifically directed to the funds invested with the Macquarie Bank.  In any event, her explanation for this non-compliance is elaborated further in her evidence and that fundamentally relates to inadvertence and it not being at the forefront of her mind. 

20. It remains to say so far as the history is concerned that the costs memorandum provided to the husband [exhibit 7] indicates he has paid costs of $81,923 and the source of payment was the partial property settlement he received from the wife.  He has incurred costs, yet not paid, for considerably in excess of that.  The memorandum provided to the wife [exhibit 8] indicates she has paid costs totalling $381,523 [that does not include the costs of $121,000 included in exhibit 8 related to the AVO proceedings].  That document identifies the source of payment as her income and superannuation but it is apparent from her evidence that there were other sources including the mortgage on the S property which was paid off from the sale proceeds, amongst others.  She has also incurred considerable costs yet to be paid. 

Assets and liabilities

1. Against that background the assets and the liabilities of the parties are to be listed which is not without its hazards in this case, more so given the arguments about what is to be ‘added back’ as an asset in the hands of one or the other.  Before coming to those matters, there can be set out what is agreed.  The B1 home, agreed at the hearing to be worth $1.2 million, has since been sold for $1.18 million and that figure can be adopted although there is no information about the sale costs, including commission, which obviously will be deducted on settlement:

   Assets - joint

   B1 property  1,180,000

   Less:

   Mortgage   452,604

   Net equity before sale costs:   727,396

   Assets - wife

   H property   455,000
              Less:
              ANZ Bank loan   348,643

   106,357
              Assets - husband
              CBA a/c  4,131
              Macquarie a/c  689
              N Credit Union a/c  9,485
              AGL shares      4,828

   Babcock & Brown shares       643

   Fosters shares  1,303
              APA shares       368

   IAG shares       85

   2001 Subaru vehicle  6,850
              Personalty (2 paintings)     400
              Total:     28,782

   Total net assets:   862,535

2. That much can be settled. 

3. It is agreed the balance of the wife’s entitlement in the self managed superannuation fund is $226,623 and that much can be added separately to the asset list:

   Wife’s superannuation

   A Superannuation Fund   226,623

1. As noted earlier the argument about the value of household contents can be resolved by separate orders as proposed in the Minutes.  There is no evidence to support the adoption of one value or the other in any case so the alternatives are limited. 

2. Next, they have each incurred some liabilities since separation which appear to relate to what might be regarded as their own lifestyle choices and since the history suggests that neither should be called upon to contribute to the debt the other has incurred, they can be excluded from the list although of course not ignored in the overall view of their circumstances:

   Liabilities - husband

   Personal loan – Mr and Ms RD   3,200

   Mastercard      773

   3,973

   Liabilities - wife

   N Credit Union personal loan  20,000

3. Of course the legal costs they have incurred and not yet paid will not be introduced as liabilities since they will remain responsible for those debts subject to any order for costs after delivery of judgment. 

4. The core contentions, and the source of hazard, comes from the arguments about add backs.  What I apprehend to be the positions ultimately put in final address is summarised in what follows:

   Add backs to wife’s assets – submissions for husband:

   Legal fees paid [including $120,000 for AVO proceedings]                   502,645

   Undervalue sale of S property            120,000

   [basis outlined earlier]

   N Credit Union loan raised on S property   40,000

   [portion of the $120,000 used by wife for travel and gifts]

   Reduction in superannuation between 27/6/06 and 2/5/07   219,243

   [approx from separation to hearing before Watts J]

   Reduction in superannuation since 2/5/07   449,776

   Overcapitalisation [or wanton expenditure] H property       320,759

   [basis outlined earlier – value prior to work $305,000 plus costs

   of $470,759 less subsequent value $455,000]

   Advance to wife from mortgage increase March 2005      66,000

   Total:    1,718,423

Add backs to husband’s assets – submissions for husband:

Advance to husband from mortgage increase March 2005      32,825

[$48,825 less $16,000 paid for motor vehicle]

Partial property order     83,024
           [component of $97,000 paid]   115,849

1. If this were all to be accepted, therefore, there would be a further increase to the assets to bring them [notionally], including the remaining superannuation, to $2,923,430. 

2. Submissions for the wife rejected the arguments for their inclusion and without going into all that was said, that included the proposition that the legal costs of the AVO proceedings were incurred because the wife had to defend those proceedings to uphold her reputation as a public official, payments to members of her family were by reason of the assistance and support she had received from them, and other items such as the money received from the increase in the mortgage in April 2005 are already reflected in the mortgage debt.  As I apprehend the submissions of the wife’s counsel, it is argued that these items should be added back to the husband’s assets:

Add backs to husband’s assets – submissions for wife

Spouse maintenance paid   77,736
           [this is the total of periodic spouse maintenance paid]

Partial property settlement   27,470

[the two payments in 2006 less what was paid for removal]

Partial property order   97,000

Total:   202,206

1. The essential idea behind add backs is to dispense with the vagaries of having some development brought to account when evaluating contributions by putting it in the hands of a party at a certain price.  A multitude of authorities at appellate level approve of this and plainly the exercise has its proper place in the property exercise [for a classic example see Townsend and Townsend (1995) FLC 92-569 per Nicholson CJ, Fogarty, Jordan JJ].

2. In this case it becomes apparent from the above exercise of looking to the actual assets and then looking to the proposed add backs that if all or even substantial items were to be added back, the ‘balance sheet’ would be an artifice bearing only relative resemblance to the actual more modest position.  Whatever is added back, obviously it is only the actual assets that are able to be distributed. 

3. There are shortcomings in the evidence here which lead to hazards in the add-back exercise and that has caused considerable hesitation to adopt the submissions.  By way of example, I could not say with sufficient confidence that the adding back of paid costs to the wife’s assets would not be in part at least a double count with the add-back of the figures proposed to reflect reductions in superannuation, and adding back what they each received from the April 2005 mortgage advance strikes me as very likely to be a double count of what is already reflected in the mortgage debt.  The more prudent course, in my opinion, is to take the actual assets and apply to them the history as found when considering their respective contributions and any adjustment to that assessment before coming to a view about what would be a just and equitable outcome. 

Evaluation of contributions

1. This is a relationship of around 21 years duration, interrupted by a relatively short separation of some months before their final separation three years ago. 

2. They each brought to the relationship a sound earning capacity and some assets including superannuation entitlements.  But the husband was in the far stronger capital position by reason of his ownership of the W home, despite it being subject to a mortgage, and that served as their home over the next 14 years or so before its sale.  He earned a similar income to the wife for the first two years or so of the marriage and then while the wife continued her career he left full time employment and relinquished his superannuation entitlement by taking it in lump sum payments.  He used the capital received as a result as earlier discussed, including the discharge of the mortgage to render the home unencumbered and to meet some of the costs of the extensive renovations that were ultimately completed by the early 1990’s which undoubtedly improved the property.  Despite his retirement, he earned some income up until 2002, although that was very modest in many years for which the figures are available; nonetheless, it supplemented at least a little other income he had available from other sources such as his C pension.  None of that is to say he did not have a lifestyle in retirement that provided leisure and generated expense, plainly it did, but he also contributed whatever he earned as income to their common benefit and he contributed in other ways in the household as discussed earlier. 

3. The wife had entered the relationship with little or no equity in the home she owned which she maintained for a time to accommodate her daughters rent free.  She continued in her career and from 1987 became by far the stronger income earner.  From her income she paid living expenses not met by the husband – plainly most of them – along with the household bills and she paid the instalments on the debt raised for various purposes including in the early years to pay the balance of the cost of the renovations.  That particular debt had not been reduced a great deal by the time of sale in 1999 but there was some reduction and the loan had been serviced.  She also contributed in other ways by reason of her position, as discussed earlier, they gained some benefits from her university appointment, and she continued to contribute to superannuation. 

4. In the first few years of the marriage the husband’s two sons lived for part of their time as part of the household and it is apparent that the wife sees her financial and non-financial contributions to their well being as an important contribution she made during that time and later. It is not necessary to make a finding about the nature of the relationships between the wife and the boys despite the evidence devoted to it, but there are two more concrete observations that are available. First, the children were not part of the household full time, during the years they were there after she was appointed a public official she was absent at times travelling in the country, at times when their father joined her in the country they also went to stay with their mother, and they moved out in 1989 and 1991 respectively. Secondly, any assistance given by the wife to the discharge of the husband’s responsibilities to maintain his children are appropriately taken into account at the s 75(2) stage of the process under paragraph (o) rather than the assessment of contributions under s 79(a) – (c), according to the authority of the Full Court in Robb and Robb (1995) FLC 92-555. That said, the topic can be put over until then.

5. The sale of the W home saw them receive around $1.1 million after the discharge of the mortgage.  They gave each of their children some money from the sale proceeds and they were able to pay cash for their next residence and do whatever cosmetic work was required there.  By this time the wife had engaged in the defamation litigation that had concluded in 1997 for which she received an award and had incurred costs.  She then purchased in her sole name for $100,000 the house at H. 

6. To this point the evidence reveals a relatively straightforward history although some things are unexplained.  For example, there is no full explanation for the disposition of all of the W property sale proceeds and there seems to have been some relatively significant spending at the time and the wife does not explain where she got the funds, or how much was required, to complete the purchase of the H property. 

7. It was after the purchase of B1 home and over the next seven years until their final separation that complications set in.  The march of the mortgage debt in so far as it is known increased from $110,000 as at September 2002 until it was over $528,000 in April 2005.  In part this increase can be attributed to the wife’s need for funds to pay legal costs for her defamation litigation, part of it can be attributed to the funds necessary in 2003 for her to buy in her sole name the home at S which accommodated relatives who paid rent intermittently.  ‘Cultural considerations’ were said by the wife’s counsel to be involved and while that may be right, the submission has no basis in the evidence and therefore is put aside. 

8. At the point of their reconciliation in April 2005 the husband received from the further mortgage advance at that time $50,000 which he used to pay his expenses related to the time he was out of occupation of the home.  Apart from that, he received none of the funds borrowed from the N Credit Union.  The remainder can be seen as solely referable to the wife.  True it is that she paid the mortgage instalments from her income but it remains the fact that most of the debt was referable to her needs and decisions.  In particular, part of it can be attributed to her need for funds to pay legal fees for litigation she instigated without giving any comprehensible explanation of her dealings with awards vis-a-vis debt raised to meet the costs involved.  While it gains no recognition in the running of her case, the husband’s agreement to the extension of debt for her needs meant he assumed responsibility for liability and therefore took the risk of relatively significant debt being the result of her litigation.  As with other areas of her evidence, the wife gave no proper explanation of the disposal of the award received from X Organisaion some time after 2005.  Part of it can also be attributed to the wife’s purchase of the property at S in her sole name which she later used to raise $120,000 for her own use, thereby diminishing the available equity, only to sell it for a significant undervalue without notice to the husband and none of the sale proceeds seem to have made their way back towards the debt which funded the purchase in the first place. 

9. Significant weight can be given to the fact that the wife was virtually the sole income earner during the years from 1987 to their separation in 2006 which funded not only the vast majority of their living expenses and serviced the debt discussed, along with her other contributions discussed earlier.  But the history also suggests significant weight can be given to the husband’s contributions over those same years, including the assets he introduced at the outset, the provision of his home at Woollahra as their residence for the first 14 years of the marriage, and his contribution of his lump sum superannuation two years into the marriage.  The balance of all things considered tips to a small extent in my assessment in favour of the wife.  Events over the past three years, however, give an entirely different picture. 

10. The husband has received in that time $30,000 paid by the wife after his departure from the home in order to establish himself elsewhere, $97,000 as partial property settlement pursuant to the May 2007 orders; and spouse maintenance amounting to around $78,000 up to the time of the hearing.  Rather than coming from the wife’s income, some of these maintenance payments, it transpires, came from the A superannuation fund as did the partial property payment which reduced the assets that would otherwise have been available for distribution.  He has had the cost of accommodation for over two years without the benefit of occupation of the home. 

11. On the other side of the ledger, the wife has paid the instalments on the debt secured against the home and it has been reduced from the amount owing after the last extension in April 2005.  At the same time she has had the benefit of occupation of the home, albeit she has maintained it and spent some money on fixtures.  However, there have been a series of transactions she has undertaken which have diminished what would otherwise be available for distribution:

    (a)She has incurred debt and spent funds otherwise available in the A fund to demolish the dwelling at H and that expenditure is not reflected in the evidence of values for that property over time and the upshot is little current equity, hardly more than she paid for the property in 1998 despite the construction of a costly residence. 

    (b)As already noted, she used a significant amount of joint funds in 2003 to buy the property at S, the property is gone and there is nothing left to show for it save the debt to buy it.  Any benefit to be had from that property was retained by her. 

    (c)She also incurred expense in further litigation against others including Z Organisation which cost a significant sum of money for no return.

    (d)She spent an enormous amount of money in the AVO proceedings which ultimately resulted in her consenting to orders.  While it is understandable she would want to protect her reputation, agitating those proceedings was unlikely to achieve that goal. 

    (e)Last and by no means least, there has been an enormous diminution of the investment in the A superannuation fund since separation.  The attempt to analyse the destination of funds in the schedule [exhibit 41 and the wife’s schedule in annexure K to her affidavit] does not properly explain the drop and nor has there been any integration of the receipts and expenditure from that account with other accounts she operated. 

12. Senior Counsel for the husband undertook the exercise of comparing the value of property as at May 2007 according to documents filed in Court at that time with the value of property as at December 2008 according to documents filed in Court then.  The result was a diminution in the value of property of over $1.2 million to which the husband had contributed very little.  This is a massive amount of money and, putting to one side what the husband has received, the responsibility for it lies with the wife who was the only one able to provide a comprehensible explanation for this state of affairs but she failed to do so consistent with her responsibilities. 

13. Applied to the remaining assets, the weight of this in the husband’s favour is overwhelming and all consuming.  It is his application to receive the whole of the net proceeds of sale of the B1 home as well as the proceeds of sale of the H property which, when added to the assets he retains, totals $862,535 [which does not taken into account the costs of sale of the B1 property].  It remains to consider whether in the circumstances that would be a just and equitable outcome. 

Section 75(2)

1. The Act imposes an obligation to consider whether any adjustment should be made to the assessment of contributions by reason of any relevant factor in this section, which can be a brief exercise in the circumstances already discussed. 

2. The wife is able to continue working in her current position until 2013 and it can be anticipated that she will continue to earn in the order of $240,000 gross per annum.  The husband, at age 81, has little or no capacity for gainful employment despite the case of the wife to the contrary.  Neither has any commitment to the support of any other person.  The wife has some superannuation entitlement remaining.  As a superannuation contributor she can deploy her income over the remaining years of her career to maximise the benefits available.  All of these considerations, more particularly the disparity of future income, favour the husband and would, in the normal course, call for some adjustment in his favour at least in the first instance.  That would be counter-balanced to some degree, however, by reason of the contribution the wife made to his children’s well being, financially and otherwise, in the first few years of their marriage and there would have to be some recognition of the property the husband would receive here.  Based on what has been said so far, that would be property worth over $862,000. 

3. All things considered, if there had been no diminution of the assets there might not be any cause to adjust the assessment of their contributions. 

Just and equitable

1. The ultimate determinant is whether the outcome is just and equitable.  Giving to the husband property to the value of $862,000 [less costs of sale] in circumstances given the magnitude of the diminution of property in this case is in my assessment a just and equitable result.  Regrettably the wife appears to have had reckless disregard for the entitlements to be assessed in these proceedings which have been pending since May 2006.  It is an appropriate amount for him to receive in any event in recognition of his contributions even if the dissipated property were brought back to account.  Absent argument about the specific painting he sought, the orders will provide for him to have it.  As for furniture, that will be distributed according to lists compiled and selected. 

1. This would leave the wife with what remains of her superannuation fund.  But of course the remainder of her entitlement has already been taken.  The sale of the H property will not be according to her plans for her future, but the absence of assets once available means there is no other way to properly recognise the husband’s entitlement. 

Spouse maintenance

1. This can be disposed of summarily.  The husband asks that the current order for maintenance continue until he receives his property entitlement.  Whether or not the sale of the B1 home has yet settled, the time in contemplation is very limited.  Until he receives at least the funds from the B1 property sale he continues to have the needs already established and the wife continues to have the capacity to pay notwithstanding argument to the contrary.  Therefore the interim order for spouse maintenance will continue for the time being until he is paid the whole of the proceeds of sale of the B1 home.  The sale of the H property can follow in time. 

Schedule of orders sought by husband - exhibit 3

“1.That the husband and wife do all acts and things necessary to instruct the solicitor with the carriage of the sale of the former matrimonial home at [B1] to pay to the solicitors for the husband the whole of the net proceeds of sale of the [B1] property. 

2.1That, under the direction of the husband, the wife without delay cause the property situate and known as [H property] and being the whole of the land contained in Certificate of Title No.  […], Lot […] in Registered Plan […] to be sold and that the wife pay to the husband after payment out of the outgoings referred to in order 2.3 the whole of the net proceeds of sale.

2.2That the husband have the authority to conduct the sale either by public auction or by private treaty (as the husband may determine) and to transfer the [H] property to the purchaser or purchases and to receive and disburse the purchase money.

2.3That the following amounts be deducted from the purchase money and paid out by the wife before the balance of proceeds of sale is paid to the husband pursuant to these orders:-

2.3.1the costs, expenses and commission of the real estate agents acting on the sale of the property;

2.3.2the costs, fees and disbursements of the lawyers acting for the parties on the sale of the [H] property; and

2.3.3the sum of $352,113 owing to ANZ Bank Loan Account No. […].

AND in the event that the amount of the principal and interest outstanding exceeds the agreed amount the wife shall be wholly responsible for payment of the excess amount.

2.4That if the [H] property is sold by public auction pursuant to these orders either party may attend at the auction and bid to purchase the property.

3.That the wife pay to the husband within 28 days of the date of these Orders such further sum as may be determined by the Court.

4.That the wife pay direct to the husband until the wife complies with orders 1 and 2 herein the sum of $984.00 per week spouse maintenance and that the first payment of such maintenance be made 7 days from the date of these orders.

5.That the wife do all acts and things and execute all necessary documents and writings and give all consents necessary to give effect to these orders.

6.If the wife refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made, that a Registrar of the Court at Sydney be appointed pursuant to s.106A to execute the deed or instrument in the name of the wife and to do all other acts and things necessary to give validity and operation to the deed or instrument and that the wife pay the costs of the husband on a lawyer/client basis in relation to the obtaining of the Registrar’s signature.

7.1That the husband be and hereby is declared to be the owner of the painting, known to the parties as “The [G] Painting”, being a painting by an aboriginal artist and purchased from [G] [in] 1994. 

7.2The wife shall deliver The [G] Painting to the husband within 7 days of the date of these orders.

8.That subject to order six (6) herein the parties have until whichever is the earlier of the following:-

(i)       28 days from the date of these orders; or

(ii)14 days from the date of exchange of contracts for sale of the [B1] property

to agree to a division of the furniture and contents of the [B1] property (other than items of personal property.

9.In default of agreement being reached pursuant to order 9 above that the parties to all acts and things, sign all documents and give all consents necessary to cause them to be sold and:

(i)in the absence of agreement as to the method and or date of sale that they be sold by public auction within 42 days of the date of this order;

(ii)      that the husband have the conduct of the sale;

(iii)that the net proceeds of the sale be divided equally between the parties after payment of any costs incurred pertaining to the sale.”

Schedule of orders sought by wife – exhibit 4

“1. That the respondent wife be declared to be entitled to 72.5% of the net matrimonial assets as determined by the court.

2.   That the applicant husband be declared to be entitled to 27.5% of the net matrimonial assets as determined by the court.

3.   That the furniture contained in the former matrimonial home to be divided as agreed between the parties, or in default of agreement for a period of greater than 7 days, upon the basis that the applicant husband prepare an “A” and “B” list comprising of all items of furniture contained within the former matrimonial home, the respondent wife thereafter to select a list within 7 days from the date of preparation of submission of the lists to the respondent wife, and the respondent wife retain all items on the list selected by the applicant husband, and the applicant husband retain all items on the list not selected by the respondent wife. 

4.   That otherwise each party shall be solely entitled to the exclusion of the other to all other chattels of whatsoever nature or kind in the possession of such party as at the dates of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank record thereof, insurance policies (if any) are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the condition of payment of such entitlements and the interest in any motor vehicle is deemed to be in the possession of the party whose names such motor vehicle is registered in.

5. That in the event that either party refuses or neglects to execute a Deed and/or Instrument in compliance with the provision of these orders, the Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute all Deeds and/or Instruments in the name of the defaulting party and do all acts or things necessary to give validity and operation to the Deed and/or Instrument.

I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Moore

Associate: 

Date: