Cutter and Cutter

[2008] FamCA 942

FAMILY COURT OF AUSTRALIA

CUTTER & CUTTER [2008] FamCA 942

FAMILY LAW – PROPERTY – Property settlement

APPLICANT: Mr Cutter

RESPONDENT: Ms Cutter

FILE NUMBER: SYF 3562 of 2004

DATE DELIVERED: 6 November 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cohen J

HEARING DATE: 13,14 and 15 March 2007

WRITTEN SUBMISSIONS COMPLETED: 30 May 2007

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Torok of ANDREW A TOROK

COUNSEL FOR THE RESPONDENT: Ms Christie

SOLICITOR FOR THE RESPONDENT: WATTS MCCRAY LAWYERS

Orders

1. That within one month the wife is to do all things or execute all documents necessary to transfer and shall transfer to the husband all her right title and interest at law and in Equity in the real property known as and situated at R in the State of New South Wales.

2. It is hereby declared that each party is as against the other except for the property subject of order 1. wholly beneficially entitled to such real and personal property and rights to superannuation that are possessed by, held in the name of or controlled by that party and that neither party is liable for any debt or part of a debt of the other.

3. Costs are reserved for one month.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3562  of 2004

MR CUTTER

Applicant

And

MS CUTTER

Respondent

REASONS FOR JUDGMENT

1. In these property proceedings the husband, who is the applicant, seeks the transfer of the wife’s interest in the former matrimonial home at R to him and otherwise that the parties keep the property which is in their respective names or controlled by them. The wife, in response, seeks the sale of the home and division of the net proceeds of sale equally between them but that they be able to keep all the other property they respectively hold or control. The home is agreed to be worth $650,000.00, so the dispute is essentially over $325,000.00, although other matters in dispute will affect the Court’s findings on the total and net amounts available for division between them. 

2. At the hearing the parties provided the Court with a joint schedule of assets, and liabilities including superannuation. Its effect is as follows:

   R property  (owned by the husband and wife)   $650,000

   Wife’s ½ interest in D property   $170,000

   Wife’s interest in L property   $380,000

   Wife’s furniture etc     $5000

   Wife’s savings   $528

   Husband’s savings        $7300

   Husband’s cars  $1600

   Husband’s furniture etc      $5000

   Wife’s superannuation  $727,097

   Husband’s superannuation      $4567

   Total            $1,965,497

   Wife’s mortgage D property    $55,004

   Wife’s mortgage L property              $345,829

   Wife’s personal loan    $18,000

   Husband’s bank loan    $16,000

   Husband’s credit cards              $28,000

   Total                 $426,833

   Net assets     $1,502,659

3. Before dealing with the more mundane facts and issues, there are some major issues which need to be resolved. One is over the husband’s superannuation. Another is over the husband’s allegation, which the wife denies, that the wife is living in a domestic marriage like relationship with a Ms B and, therefore, Ms B’s level of financial support of the wife and financial circumstances must be taken into account.

4. The wife submits that I cannot find that the wife is likely to continue to live with Ms B after her retirement because the husband’s solicitor did not put that prospect specifically to her or Ms B. This submission is based on a misinterpretation of the rule in Browne v Dunn 1893 6 R 67 as laid down by that case and those which have followed it. The rule, as I understand it, does not require something which must obviously be part of the cross-examiner’s case to be put to a witness for an opposing party. The rule only exists to ensure fairness. It was not unfair in these proceedings to fail to put to the wife and Ms B that they would continue to live together in a mutually supportive relationship after the wife’s retirement. It was obvious to all that the husband was alleging this as an incident of their claimed homosexual relationship.

5. In dealing with the superannuation issue it is necessary to appreciate, for reasons which will be made apparent at a later stage, that the parties separated in December 1992. The wife alleges that this is the date of separation. Although the husband makes no specific allegation and claims that they maintained some level of relationship for some years after this, he says that in December 1992 the wife commenced living with Ms B in a homosexual relationship.

6. The wife submits that the husband’s superannuation at the time of the cessation of his employment was worth $153,227.00 gross, but that if he had not withdrawn it, it would have been worth $197,191.00 before tax by the time he turned 65 years old in 2010 because he would have been entitled to a pension of $19,719.00 p.a. before tax, or about $380.00 per week before tax. Thus, she asserts, I should either value his superannuation notionally at $153,227.00 or $19,719.00 p.a. because he has neither adequately explained the disappearance of the actual superannuation cash he received nor justified taking it against the wife’s interest, in view of the greater value attributed to it when compared with his actual receipt    

7. Until 15 October 2004 the husband had been working for the Department of Human Services for many years. His employment was terminated on that date. He received $40,322.00 in cash on taking superannuation at that time. He was only entitled to take whatever he had personally contributed plus interest and was bound to leave the amount representing his employer’s contribution plus interest on it. He was entitled to take the latter amount when he turned 60 in March 2005. He actually received this, being $91,339.00, in July 2005. Altogether, $12,432.00 in tax was deducted, so his pre-tax receipts were, in all, $144,100.00; not so much different from $153,227.00.

8. The argument relating to the $153,227.00 valuation which the wife seeks to rely on has, in my opinion, a fatal flaw. The $153,227.00 is the value which would have been attributed to the husband’s superannuation at the time he ended his employment if he had retained it and if 15 October 2004 had been the date of the hearing. It is no more than a theoretical value calculated in accordance with the Family Law (Superannuation) Regulations 2001 which is to be applied to calculate untaken superannuation at the date of the hearing. When, as here, the superannuation has been taken, it is not necessary to make a theoretic estimate of value, the value is known; it is what was actually received, here about $144,000.00 after $12,432.00 in tax was deducted.

9. The claim that the husband should not have taken any superannuation and that his pension should be valued at $197,191.00, does not suffer from all the same faults that the $153,227.00 claim suffers from. The $197,191.00 valuation is calculated upon its actual pre tax value on 15 October 2004, which was $139,807.00. However, it is undermined by equally fatal flaws. The first is obvious: the $197,191.00 is its value, not now but as at 31 March 2010.  I am required to value it at the date of hearing, not at some future date when it would be worth more because of additional compound interest and, possibly, assumed contributions. An even worse flaw for the purpose of doing justice in these proceedings is the fact that had the husband allowed his superannuation to remain undrawn until he reaches 65 years, he would not receive any of it but instead would receive a lifetime pension at the rate already mentioned. The correct way to value his entitlement to it is, not by attributing to it a cash value which could be taken the instant before he turned 65 i.e. $197,190.00 before tax, but to attribute a present value to $380.00 per week gross to commence on 15 March 2010 and continue for the rest of the husband’s life, less the value of the aged pension rights he has lost each week during the same period by having the superannuation pension. I do not know the value but accept that in all the circumstances it is highly unlikely that the husband would have been better off by failing to cash his superannuation in order to receive the superannuation pension in its place, assuming he would have not have wasted any part of either. The issue of the disappearance of the funds the husband did receive and of how this should be treated is one which is quite separate from the issue I have already discussed. It will be dealt with as I review the facts.

10. Nevertheless, it is appropriate to point out at this stage what I regard as a somewhat bizarre anomaly in the wife’s counsel’s approach to the parties’ superannuation. She claims that the wife’s superannuation should be separated out of the property and rather than being considered as part of a global approach, it with the husband’s current superannuation should only be regarded as part of a separate pool to which each party should be entitled to share, according to the monetary value of their current superannuation rights. The wife’s current superannuation is worth $727,097.00 and the husband’s is worth $4,567.00. As a no splitting order is sought, each should receive the value of their own superannuation, according to the wife. In pre-trial written submissions, the wife said this was because the parties separated in 1992 and, since then, her superannuation has grown from $25,000.00 at about the time of separation to its current value. This is quite inconsistent with her approach to the husband’s superannuation, which grew from $2011.00 at about the time of separation, to amounts she relied on and are mentioned above.

11. In my opinion, it is proper to consider all the parties’ contributions, both monetary and in kind, from the commencement of cohabitation to the date of the hearing in a global manner. This is, in my experience, the method most likely to avoid errors based upon double counting, the ignoring or giving of less weight than appropriate to contributions which are not the subject of maintained records or easy calculation, the need to make allowances for changes in the value of money, inflation and the fact that contributions are to be seen as comparative as well as absolute and, most importantly, the fact that a contribution by one party often allows the other party to make other contributions. In weighing the various elements of contribution the global approach allows the Court to compare unlike contributions by use of its discretion and judgment to greater effect than is otherwise the case. An example which illustrates the situation clearly by reducing the alternative to absurdity is warranted. Assuming each party has brought home $100,000.00 p.a. adjusted for inflation for twenty years and spent it all on living but one party, by contributions to a superannuation scheme, also accumulated $500,000.00 on separation, while the other party accumulated $250,000.00 because he or she had been required to make only half the personal contributions of the other party. On a global basis the direct contributions of the parties would be $2.5m compared with $2.25m i.e .52.6% to 47.4% of the $750,000.00 pool, whereas if there were to be a two pool approach if would be 50% of nothing in one pool and contributions would be 66.6% to 33.3% to the other pool; that containing the $750,000.00. The former method of viewing contributions result in a better reflection of actual comparative contributions than the latter.

12. The wife asserted that she intended, as she was entitled to do, to take a pension when she retired in January 2008. Her superannuation entitlement was valued on that basis by agreement. She could have decided to take her superannuation wholly in cash rather than partly as a pension and partly as a lump sum. Because of the agreement that the pension is worth $727,000.00 and because that valuation is made on the assumption that the wife will take most of her superannuation as a periodic pension lasting the balance of her life, it would be grossly unfair to assume other than that the parties have agreed that she intends to take the periodic pension and, therefore, that there is a possibility that she might have taken a lump sum as all of her superannuation entitlement when she retired. If she had intended the latter possibility, her superannuation rights would be valued at a lesser amount. I should, in fairness, for the purposes of s.75(2) of the Act not lose sight of the fact that although the wife will not be able to use the $727,000.00 to purchase accommodation for herself, it is worth $727,000.00 because most of it is in the form of an income producing investment for the balance of the wife’s life.

13. An issue which could affect the amount to be divided between the parties, is that over whether or not paid legal fees should be notionally regarded as part of the parties’ property available for distribution which, because it has been spent, were advanced to the party who spent them. There is little doubt here that the legal fees each has paid were largely accumulated as a result of post separation earnings. They have been separated for many years. The husband has paid $28,050.00 to his solicitor. The wife has paid her solicitor $46,443.00. Probably only a relatively small part of the fees the husband has paid his lawyers came from his superannuation payout. As this payout largely accumulated after separation I do not think that the fact that it came from superannuation is of great moment.

14. I have discretion whether or not to add back paid legal costs. It is more appropriate to exercise it in favour of not adding these back if the moneys used were contributions which were made after separation by comparison to refusal to add back such payments made from moneys accumulated from pre-separation contributions. However, I think it is much more appropriate than not to add back legal costs payments irrespective of when the fund for them was accumulated. This is because of the approach I take to all contributions. I simply take account of all contributions made from the commencement of cohabitation until the date of hearing. These, less the ordinary costs of living, not including wasted funds, make up what is available for division according to the proportional contributions, as adjusted for s.75(2) factors. In the event that there is no adding back for paid costs; paid because they have been taken as an advance to the payor on his or her share of the value of property, the non-paying party is, in reality, subsidising the other party’s payment of his or her debt for legal costs. Section 117 of the Act, provides that each party should bear his or her own costs unless the Court thinks there are circumstances justifying a costs order. One can only be properly made after considering the matters specified in s.117. This prevents the Court from allowing a situation to arise where it makes orders which result in one party bearing part of the costs of the other party without applying s.117.Yet that is the effect of a failure to add back paid legal costs. I shall act accordingly.

15. There is another sum which should also be included in the assets of the parties to be divided. It is the sum of $14,230.00 which is held in the trust account of the wife’s solicitor in anticipation of her further costs liabilities.

16. The wife contends that the husband’s credit card debts should not be included in the pool available for division. The ground for this submission is that the wife’s debts are claimed to have all been incurred to acquire assets which are still held. The wife concedes that the husband’s loan which amounts to $16,000.00 is in the same situation as the wife’s debts which were accumulated in the course of acquisition of assets but that his other debts were simply incurred “well after separation” and have given the wife no benefit and for which the husband gave no adequate explanation.

17. I do not accept the wife’s submission about the husband’s debts. Provided the money or goods acquired in incurring them has not been wasted they must be regarded as having been acquired as part of the husband’s ordinary living expenses as he said they were. To the extent that liabilities can be established on balance to be the result of ordinary living expenses they should be part of the liability by which the value of the pool to be divided is ascertained. To the extent that they are the result of waste, using the technical meaning of that word in s.79 proceedings, they should not be included as a deduction from the pool value, just as the value of waste which has not resulted in debt may be notionally added back and regarded as a notional advance of entitlement under s.79 to the wastrel. I shall deal with the various instances where each party has alleged the other has committed waste as the occasion arises.

18. The parties commenced living together when they married in July 1970. They have one child, a son, who was born in April 1971. By the time they had separated he had been an adult for more than two years. At the time of the marriage neither party had significant assets or liabilities. Neither party had at that time any tertiary qualifications. The wife was working as a waitress and the husband was a clerk with a public service department. They were earning about $2,000.00 p.a and $3,000.00 p.a. respectively, amounts which were lower than the average wage at the time.

19. The husband continued with the same employer until 1989 when he resigned. His salary had increased each year as a result of promotion and inflation. Until he resigned he always earned more than the wife. On resignation, he cashed in his superannuation which the wife says she later discovered amounted to $37,000.00. He did not inform in the wife of his resignation or of his superannuation cash. Ordinarily one would regard his superannuation as part of his contributions to the current family assets. However, the husband had been a gambler, at least since 1984, and has not explained with much detail how he used the money. He said he used the money to pay debts, to live on and to make mortgage payments. He also said he paid the money into a joint account; a strange thing to do or allege if it is true, as I believe it is, that the husband kept it from the wife that he had ended his employment. He explained, however, that he was unemployed from September 1989 to mid February 1990, about five months, and that he acted as though he was still employed. To be able to do this, he used some of his superannuation for living expenses as though he was still being paid his ordinary salary and borrowed $3000.00 from his brother-in-law but gambled the $30,000.00 of the $37,000.00. At the time the wife was probably earning about $30,000.00 p.a. as an information management worker, so it is highly likely that the husband was spending at a rate which used up the whole $7,000.00 on ordinary living. I shall regard the husband as having contributed about $7,000.00 from the superannuation and the balance as having been wasted and therefore as not being part of any contribution the husband has made. I shall not now regard the lost $30,000.00 or $33,000.00 as an advance on the husband’s entitlement because to do so in addition to disregarding it as a contribution would amount to double counting.

20. In February 1990 the husband obtained a one year contract with the Department of Works. This was at much the same rate of pay as he had previously been earning. When that contact expired in February 1991 he did casual work until May, then rejoined what had become the Department of Human Services in June 1991 at a salary of about $20,000.00 p.a. which was supplemented by a second job the husband had in a bottle shop. He earned about $10,000.00 p.a. for this work. I do not know how long the husband maintained his second job. It was probably not held for an extended time after 1992 because his principal income increased significantly in 1991 and 1992 to about $28,000.00 p.a.

1. The husband continued to work for the same department, despite a change of name, until 2004 when he resigned. By this time his salary had increased to about $43,800.00 p.a. After he ceased working in his long term job, in early March 2005, he obtained a contract as a driver. The situation he was in changed in December 2005 when it was converted to employment. He still has that employment. His income is now based on the number of hours he works and the kilometres he travels. He earns about $420.00 per week clear of tax (about $22,000.00 p.a.). He was unemployed between October 2004 and 2 March 2005.

2. The wife has very helpfully tabulated most of the essential details of her work history. From the time of marriage until 1974 she worked six evenings each week as a waitress. She worked 36 hours per week, a little fewer than average hours. She took only a short time off when she had the parties’ child. In about 1973, she commenced drinking heavily and by 1975 had ceased working. She was, at 27, a chronic alcoholic.

3. In August of 1975 she decided to do something to redeem herself. She admitted herself to the L Clinic for a few weeks, joined Alcoholics Anonymous and commenced attending meetings, which the husband believed were nightly. She was absent from home until late on most nights up to the end of 1976. She claims in her affidavit to have attended Alcoholics Anonymous for the first 100 evenings after she was discharged from the L Clinic and says that thereafter she attended meetings “at least once a week from 8:30pm to 9:30pm” for “several years”, but that she also went to additional meetings when she needed to. She still attends occasionally. The husband claims she used to attend meetings with a male friend and would return home much later than would be expected if she were to have come home directly from the meetings. 2-3am was common. The wife explained that she was also doing a secretarial course at the time and this would also explain why she was frequently not at home. Whatever the cause of her absences from home, I think they were more extensive than she admits. I regard the husband as a more credible witness than the wife. I accept that she spent little time at home in the evenings, at least for some time after 1976.

4. In 1976 the wife obtained employment as an assistant information management officer. She retained this job until 1981. In 1976 she commenced studying for a BA part time during the evenings and school vacations. She continued this course until she completed it in 1981. In 1982 she enrolled in a MA course after she had, in 1981, become an information management officer at Organisation A. She completed her master’s degree in 1989 and continued as an information management officer until 1991 when she moved to Organisation B as a senior information management officer earning about $35,000.00 p.a. While the wife was studying for her Master’s she says, and I accept, that she was able to do most of the study she needed during her work hours. Nevertheless, the husband says and their son supports him in this claim, the wife always spent little time at home in the evenings. I accept that this was the situation.

5. The parties separated when the wife moved to regional New South Wales to take up a position she had been offered as a senior information management officer. Her wages increased to $48,848.00 p.a. with her accession to her new position. She kept this job until 1994 when she became an information management officer at Organisation C at a salary of $73,137.00 p.a. She retained that position until 2000 when she was promoted to manager. She held that position at the time of hearing and was earning about $160,000.00 p.a. gross or $3080.00 per week gross. She planned to retire when she reached 60 years in January 2008.

6. It is probable that, until separation, the wife did not earn as much as the husband until she became attained her qualifications and was promoted to the position of information management officer at Organisation A in 1985. Thereafter, it is probable that the parties had similar earnings until 1991. The wife’s income became higher than that of the husband at this time. She was earning $35,000.00 p.a. in 1991, whereas his income, although it increased to over the years, by the time they separated was about $5,000.00 p.a. less. After separation the wife’s income increased relatively rapidly compared to the husband’s earnings.

7. The wife was not the only member of the family to be plagued by an addictive personality. The husband has been a habitual, obsessive and unsuccessful gambler from the time of the marriage until a little while before or right up to the hearing. A difficulty in determining the extent of the husband’s gambling has been created by the fact that the husband, to a large extent, kept his relevant habits from the wife. Uncommunicativeness is a characteristic of each party and of their relationship. Each is likely to have deliberately concealed from the other some quite significant matters in these proceedings. Other matters were not so much concealed as not communicated because of the way they conducted their lives. Apart from the use of part of his superannuation to meet his gambling habit which I have already mentioned, there is very little specific evidence upon which the Court can rely. The wife says that she discovered he was gambling to an extent which could be regarded as more than merely acceptable entertainment even before they married. I can only take his gambling into account from the date of marriage which was when cohabitation commenced.

8. In her affidavit, the wife says that in 1984 she noticed that the parties’ home mortgage had increased because of the husband’s gambling but she has failed to say to what extent. According to the husband, he started gambling badly in 1988. In 1994 the wife was confronted by a bailiff because the husband had not repaid the $3,000.00 he had borrowed from this brother-in-law to pay gambling debts. Although I regard this $3000.00 as waste, I shall only take account of it by setting it off against the waste the wife must have committed by her spending on alcohol. The husband admitted to her that he had been spending money on poker machines for years but that his gambling was now “out of control”. He joined Gamblers Anonymous. It is likely that he either ceased or curbed his gambling a short time later. He says he has not gambled since he had the counselling which resulted from bringing his problems into the open in 1994. I do not accept that this is the situation.

9. The wife also relies on the general financial situation to prove the husband wasted a substantial amount on gambling. She claims that although both parties had good incomes their financial situation was not as good as it should have been. She said she did not understand why, but now realises that it was due to the husband’s gambling. There is something strange about this claim because the wife knew he gambled even before the parties married. Even then she worried that he could be irresponsible with money and that funds which were intended for a specific use would be expended by the husband without explanation. She also knew, soon after marriage, that the husband seemed to have an unusual need for money without showing anything for its expenditure. Nevertheless, these matters clearly support the wife’s claim that the husband was losing more than he should on gambling.

10. The husband received funds which I regard as amounting to contributions to the parties’ assets on his behalf. In May 2000 he received $222,000.00 from his parent’s estate. Of this, he gave $50,000.00 to the wife so she could discharge a debt she had from purchasing her home in regional New South Wales. He paid a further $43,000.00 to discharge the mortgage over his home in R and paid off a personal loan he had taken in the sum of $19,000.00. The need for this loan had been incurred by his gambling. Over the next three years he spent $30,000.00 assisting the parties’ son, travelled around the world and had his car repaired. In 2004 he used this fund to pay his lawyers part of the costs of these proceedings and to pay them for Industrial proceedings he instituted over the termination of his employment. His lawyer’s costs memorandum indicates he paid them $11,774.00 on 17 May 2005 for the family law action and $16,275.00 on 31 August 2006. He provided further financial support to his son which, by inference from his other evidence, seems to have amounted to about $20,000.00. Because he had become unemployed, he used the balance for living. He has specified spending $190,000.00, leaving a balance of $32,000.00, enough of which seems to me to have been explained to account for the whole $222,000.00.

11. Nevertheless, I do not regard all his expenditure from 2000 to 2006 to have been explained as ordinary living costs. He claims to have also spent the $144,000.00 from superannuation on living when he was unemployed in 2004. He admitted during his oral evidence that in 2004 he had made withdrawals from automatic teller machines at clubs, but says he had only gone to these for a drink rather than to gamble and that some of the withdrawals were so he could give money to his son as part of his effort to assist him. However, after 2004 he was not likely to be earning enough as a driver to fully meet his ordinary living costs.

12. It can be seen that it is not likely that he has spent as much as the wife suggests on gambling. The $19,000.00 personal loan which he paid off was the result of gambling debts, but I am not satisfied that much of the balance of his inheritance and his superannuation can be said to have been wasted, given that he was entitled to have the choice of the forms of entertainment and pleasure which met his needs, provided what he spent on them was reasonable in the light of the situation he was in. Overall it is my estimate that his waste probably did not exceed $40,000.00 from both his inheritance and superannuation given that he was entitled to spend some funds on gambling without these being characterised as waste and that he had discharged his debts and had ready cash available. Is it noteworthy that the wife did not attempt to tender bank records which might show that he had been drawing substantial funds from club ATM’s over a prolonged period while being in a position to tender, as Exhibit ‘C’, one bank statement for the period 16 November 2004 to 15 December 2004 which showed cash card withdrawals amounting to $3360.00, some of which were not made at clubs in circumstances where the husband must have needed cash to live on. The easiest manner of accounting for the extent of waste on gambling at this time which I am satisfied occurred, is to deduct it from his inheritance and regard the contribution from that inheritance as $182,000.00 ($222,000.00-$40,000.00) rather than $222,000.00.

13. There were, nevertheless, gambling losses during other periods. The husband says that, in all over the years after the marriage and before his parents died, they gave him about $50,000.00 to meet gambling debts. They did not expect repayment. After they died he offered to repay their estate $50,000.00 but the executors declined that offer. The result is neutral on the issue of contribution. What was contributed to the parties’ funds on behalf of the husband’s parents is set off by the waste of that contribution by the husband. It is for practical purposes, as though the contribution has not been made, I shall not include the $50,000.00, as I otherwise would have, as a contribution made on behalf of the husband.

14. The husband conceded in cross-examination that in addition to the $30,000.00 of the $37,000.00 he obtained from his original superannuation payout, the $19,000.00 personal loan he paid from the inheritance, the $50,000.00 he obtained from his parents and the $3000.00 he borrowed which resulted in the visit from the bailiff he incurred about $100,000.00 in personal debts as a result of gambling and, because of loss of interest, lost a further $10,000.00-$20,000.00 (say $15,000.00) in the period since his marriage. I accept that, an additional $115,000.00 was used on gambling. This must include all but $19,000.00 of the $40,000 which I have already found to have been wasted between about 2000 and 2006 inclusive.

15. The whole amount the husband wasted from the time of marriage, $217,000.00 does not, in my assessment, amount to the whole sum wasted on gambling. Some of his gambling was a justifiable entertainment expense and therefore not more wasteful than say, the cost of theatre tickets and restaurants. In his position, I assess his justifiable and his non-wasteful gambling to be, on average over the years since the parties married, at the rate of $2500 per year or $50.00 per week. This assessment takes into account the change in the value of money and the fact that as the years passed his losses probably grew at about the rate of inflation and his wage increases. If his losses are not regarded as more than he otherwise would be justified on spending on alternative entertainment and other interests, pastimes, outings and food; on what could be regarded as a more opulent lifestyle than he actually had he would have spent about $92,000.00. Even if it is assumed that, at times, his gambling losses were comparatively worse than at other times, as I accept that it would have been reasonable for him to spend $92,000.00 and he actually spent $217,000.00 ($30,000.00 + $19,000.00 + $50,000.00 and $3,000.00 + $115,000.00). I find he has wasted $125,000.00.

16. I have already accounted for $123,000.00 of this ($50,000.00 + $40,000.00 + $30,000.00 + $3,000.00). Because the balance involved is so small, $2,000.00, this too should be accounted for by setting it off against the wife’s likely expenditure in excessive alcohol consumption.

17. The husband’s evidence contains many instances where he claims to have made financial contributions to property by payment he made from his income. The most obvious example is his claims that he made mortgage payments. As I shall be counting as contributions so much of his inheritance and income as remained in the family pool after deducting waste, it would be double counting to also include as contributions payments the husband has made from these sources. I shall not make the error of double counting of contributions. The wife has made similar claims. They too, for the same reasons, must be treated in the same way. In any event, the fact that some payments were made by one party simply released funds which the other party had for use as contributions or for some other living expense or aspect of their financial relationship which resulted in the accumulation of assets. Despite the parties having separated many years ago, it is still more appropriate than not to approach their contributions globally, particularly because some of the contributions of each are reflected in assets still held by the other.

18. The husband has claimed to have made contributions to the parties’ property by helping the wife to do things such as move or make house repairs. To a much lesser extent the wife has also made such claims. Over the 37 years since marriage, only a relatively few days have been involved; too few to be so significant that they should be individually mentioned. I shall take note of these matters without specifying them and take them into account in determining contributions. 

19. The first significant asset the parties obtained was a home in T which they purchased jointly for $13,000.00 plus costs. The parties contributed $2000.00 and borrowed $10000.00 from a credit union. The wife’s mother provided about $2000.00 and secured the loan by mortgage of her home. Her contributions are assumed to have been made on behalf of the wife in the absence of evidence to the contrary. Before that, the parties had rented or lived with the wife’s mother. They paid for their accommodation with her by meeting a third of her mortgage instalments and rates and taxes, but as the wife’s mother repaid them some years later when she sold her home, the provision of accommodation for the parties is to be regarded as a further contribution. This contribution occurred from the date of marriage in mid 1970 until late 1971; about 18 months and, again, is to be assumed to have been made on the wife’s behalf. The parties renovated the T home by painting and decorating it as well as by fitting a new kitchen and bathroom. The parties did some of the work involved to an equal extent and the wife’s mother and husband’s brother also helped.

20. In 1984 the home in which the husband still lives was acquired for $84,000.00. $65,000.00 of this was provided as the net proceeds of sale of the T property and $40,000.00 was borrowed. The excess over the cost of purchase was borrowed so the parties could renovate. Again, they installed a new kitchen and bathroom and painted and decorated the home. Each party did some of the manual work involved. In 1992 the original mortgage loan was discharged and a new loan for $63,000.00 was taken through a credit union. The reason was to pay for some new renovations and to meet personal debts of the husband, no doubt mostly incurred as a result of his gambling.

21. When the wife moved to regional New South Wales in December 1992, Ms B had been living in rented premises. The wife and Ms B then purchased a home there in January 1993. The wife’s half share cost $53,000.00. She borrowed $60,000.00. $6,000.00 of the borrowed fund was used for renovations. The property was purchased in both names as tenants in common. The wife and Ms B contributed equally to the mortgage instalments.

22. By some time in 1995 both the wife and Ms B had changed their home and employment to Sydney. Thereafter they rented the regional property for an undisclosed amount and, for a while rented accommodation in the north-western suburbs. In October 2000 the wife purchased the property at D for $208,000.00 with an additional $7000.00 in costs associated with that purchase. Also in 2000, the wife used $28,823.00 of the $50,000.00 the husband gave her to discharge what remained of her mortgage liability for the house in regional New South Wales. She used the balance of the $50,000.00 to assist the parties’ son and to establish an investment account to be held in trust for the parties’ granddaughter. It is not suggested that the use by the wife of the funds to assist her son and granddaughter was other than an unexceptional use of funds for a family purpose which was legitimate in the context of s.79 proceedings. It could not be regarded as waste. Presumably, the funds expended by the husband on his son are to be regarded in the same light.

23. In 2000 the husband used $43,494.00 of his inheritance to discharge the balance of the mortgage on R property. The wife and Ms B ceased letting the regional New South Wales home in October 2002 and sold it for $88,000.00. The wife cleared $36,150.00 and used $30,000.00 of this to reduce the mortgage on D property.

24. Although D property is registered in the wife’s sole name, Ms B holds a 50% equitable interest in it. However, the wife solely owns another property. This is a flat at L which she purchased in November 2006 for $380,000.00. The deposit was $19,000.00 which she obtained by borrowing from a friend. This was to be repaid in $100.00 p.a. instalments and the balance in January 2008 when the wife was to retire. The balance of the purchase price together with $16,000.00 for costs associated with the purchase and $14,000.00 which was used to put her solicitors in funds for these proceedings was borrowed from her Credit Union. The property it rented for $360.00 per week gross.

25. There is an issue of sorts surrounding a Mr G, although I am not quite sure what it is or why it was raised. The suggestion by the wife is that he provided income by way of board for the husband. This does not seem to help the wife’s case.

26. Not long after the parties separated Mr G moved into the husband’s home at R. Originally, this was intended to be for a few weeks because Mr G needed emergency temporary accommodation after separating from his defacto wife. However, he stayed for about 10years. I accept that he did not pay regular rent but did contribute to ordinary living costs. I can discern no significance in s.79 proceedings in the part he played in the lives of the parties because the evidence suggests that he merely covered the expenses he incurred.

1. The husband says the wife has wasted the parties’ funds because she has spent an inordinate amount in travelling to Burma and in supporting a family there. She first visited Burma in 1985. In about 1987 she met a Burmese family and started to help them by contributing small sums for their living costs in Burma. She had little disposable income until 2000 but provided between $7000.00 and $10,000.00 (say $8500.00) to the family. In 2002 a family member needed hospitalisation and the wife contributed about $20,000.00 in that year. Thereafter, until 2004, she provided about $300.00 per week but since 2004 has been reducing her contributions so it is now continuing at about $150.00 per week. She has made many trips to Burma. Her stays cost very little as she is accommodated by the family she assists, but she estimates she has spent about $36,000.00 in all on those trips, mainly on air fares.  

2. Thus, it is likely that the wife’s contributions to the family and costs of travel to Burma have been about:

2000$8,500.00

2002 $20,000.00

2003$15,000.00

2004-2006 at an average of say $200 per week   $30,000.00

to 15 March 07 (10 weeks at $150.00 per week)    $1500.00

Travel$36,000.00   

$111,000.00 

1. It is likely, if one makes some allowance for what was contributed from 1987 to 1999 that at least $115,000.00 was spent. This amounts to $210.00 per week from the start of 1987 to the time of hearing, a weekly sum which I regard is reasonable in view of the wife’s income and position as well as the fact that the wife’s expense was over what was, on average, a later period than that of the husband and was for a more altruistic purpose. The wife’s contributions to the Burmese family should be treated similarly to the husband’s acceptable gambling losses. Both fulfilled their needs in a manner which suited them without the explicit consent of the other. One spent the money in a manner which is more socially creditable. The question must be to what extent was it reasonable for her to fulfil her needs by travelling to Burma and making charitable gifts to the Burmese family. Overall, the wife’s income was bigger than that of the husband during the 1987-2007 period, but the husband earned more than the wife during the period up to 1987 when he was gambling and the wife was not expending her income on the Burmese family. She currently has debts which would be lower if she had not expended the money on travel to Burma and the family there. I am satisfied that she has been justified in spending at the rate she has without being regarded as having committed waste. After all, over the 37 years since marriage she spent about $60.00 per week on average, but part of this would be for holiday travel which is no less acceptable than the husband’s spending on holiday travel.

2. As a result of the matters referred to above the net pool available for distribution between the parties should be adjusted in value as follows:

   Agreed net $1,502,659.00

   Costs paid by the wife $46,443.00

   Fund in wife’s solicitors account   $14,230.00

   Costs paid by the husband  $28,050.00

   Total                 $1,591,382.00  

3. Each party claims to have contributed to a higher degree than the other will concede to homemaking and parenting.

4. The wife says that, once she returned to the paid workforce only four weeks after the birth of the party’s son, she was his primary carer and main homemaker until separation despite her fulltime job. She says she prepared most meals, purchased the day-to-day household needs until 1988, did the washing, drying and ironing (the husband did his own ironing from 1981), cleaned and maintained the family home, looked after family pets and did the other things which need attention from time to time. She also asserts that she attended to their son’s medical, dental and other life needs.

5. She says that their son was a fretful and difficult child so she only breast fed him for a short while. As she commenced working 6 nights each week soon after his birth the husband cared for him at night. She cared for him during the day. When he was of pre-school age she would take him to and collect him from preschool which was around twenty minutes away. Later he attended a local Kindergarten and primary school, so the burden of transporting him was lessened. When he was in year 3 he commenced attending a private school around four suburbs away which involved more time in transporting him to and from school. Presumably, by the time he was about 12 years he did not need to be driven to and from school, however the wife helped with his homework and school projects and did some voluntary work to support this school and the one to which he transferred when he was in year 8. He continued at school until the end of year 12.

6. Whereas the wife claims in relation to parenting are quite general, those of the husband are more specific. He says that when the child was born the parties were living with the wife’s mother, and that the wife’s mother became involved with the child’s care in order to assist the wife. Her involvement was a contribution on the wife’s behalf. Nevertheless, the husband, too, became more involved in the child’s care because the wife had difficulty coping. He says, and I accept, that the wife went back to work in a daytime clerical job in June 1971 and both he and the wife left for work at the same time each morning. The wife’s mother cared for the child throughout the rest of the day. When the child was about 6months old the parties moved, with the child, out of the wife’s mother’s home. The wife then left her day job and recommenced night work as a waitress. The routine was that the husband would wake at 4am to feed and care for the child, get ready to go to work and would wake the wife as he was about to leave. The wife would care for the child during the day until the husband returned from work at 5:30pm. He would then prepare the child for his dinner and a bath and soak, wash and dry his nappies. This routine continued for about six months until the family moved to R.         

7. By the time the child was a year old the husband realised that the wife was drinking too much and tended to be neglectful in homemaking and parenting but the established routine of parenting still continued. The wife’s mother moved to be nearer to the parties in 1973 at about the time the child started preschool. The wife’s mother became more involved in the child’s care when the husband was not available. By this time, the wife’s alcoholism significantly undermined her contribution as a parent and homemaker. Her mother’s help appears by this time to have been likely to have been to assist both parties rather than the wife alone, so became neutral as between the parties. The contributions of both were added to by it.

8. It is likely that by about 1974 the wife was doing little homemaking and not much more parenting. Not only would she not be at home during her working hours, she would fail to return home in the evening and usually arrived home between 2am and 3am. On weekends she slept much of the time. As a result, the husband was doing almost all of the child’s washing, ironing, food preparation and general care. In 1975 she gave up her night time waitressing job. She then spent most of her time at home drinking or affected by alcohol. She admitted in her oral examination in chief that she was not an emotionally supportive mother, that she would let the housework build up and that she would often fail to collect the child from school. She says her mother took her place rather than the husband, but I think the husband’s burden of caring for the child was increased. Her mother became too ill to help in 1979 and died in 1981.

9. The burden on the husband in both homemaking and parenting reach a peak when the wife was admitted to the L Clinic for about two weeks in August 1975 and commenced attending Alcoholics Anonymous meetings. She spent nearly every night at these or in the company of her boyfriend, Mr Y. However after she commenced attending Alcoholics Anonymous she stopped drinking to excess and probably commenced to pay more attention to the child when she was at home. However, she continued to spend many nights away from home or immersed in study. The main responsibility for the child’s care was with the husband while he was at home in the early morning and after working in the evening, but she probably improved the attention she gave to the child during those other parts of the day when he was not at kindergarten or school. It is noteworthy that it is the child’s view from his first childhood memories in 1975 or 1976 when he was four of five (He was born in April 1970 not, as the wife seems to believe, in April 1972) that the husband was more devoted to and at home to provide for his care than the wife. When he was a little older this was also manifested by the husband being the parent who supported him in a practical manner in his extra-curricular activities such as sport. He even used to spend each Saturday accompanying the husband while the husband did the supermarket shopping. As he said in his affidavit:

   “My memory of these years [about 1977] was my father was always at home looking after me while my mother was at meetings or studying.

   ………

   My mother was working [as an information management officer] [in1978, after the child commenced at … College, to 1981] and she was still attending university and AA meetings, so was not home much.

   ………   

   In the years 1984 to 1989 my father continued to take me to sports training and matches. My mother attended on few occasions. She was still studying and attending meetings.

   ………

   After moving to [R] [1984] I changed schools from [… College]……my father got me ready for school and often drove me there and picked me up after football training. My father would always take me to my football matches on weekends.

   ……….

   As a teenager [1983-1988]…..my father was always there to assist me with transport, financially and any other requirements. My mother only occasionally helped me.”

   I accept the evidence of the parties’ son and its tenor. It is of importance not only because it proves that the husband’s parenting contribution was much greater than that of the wife, it establishes to my satisfaction that by providing the bulk of child care the husband enabled the wife to improve herself, establish a career, advance in it and create the earning capacity and assets she had until the hearing and therefore the financial contributions she has made to the parties’ assets. For the purpose of s.75(2), it must also be recognised that her income earning capacity and pension rights are partially the result of the husband’s contributions to the advancement of the wife’s career.

10. After weighing all the matters mention above, I am of the opinion that the husband’s overall contribution to the assets now available for distribution equals that of the wife. The waste involved in the husband’s gambling, the wife’s latterly greater earnings and the value of her superannuation rights, the husband’s earlier superior income, his greater contribution to parenting,  his equal contribution to homemaking, his inheritance, his contributions to the wife’s earning capacity, the wife’s waste on alcohol and the husband’s second receipt of superannuation and the other considerations I have mentioned balance equally.

11. There are some major issues involved in determining what, if any, adjustment should be made for the parties’ needs etc (s.75(2) factors). Each party claims to be living and to intend to continue to live without the benefit of a domestic relationship sharing expenses or reducing costs due to the assets of the other party to the relationship.

12. The husband’s situation seems to me to be quite clear and simple to resolve. He admits he has what he terms “a personal romantic relationship” with Ms S. He says he does not live with her although she often stays overnight with him and has left some of her clothing and personal possessions at his home. This situation is said to have continued since about 2003. He claims to have discussed living with her but has not decided if he wishes to do so. He likes the idea.

13. Ms S has known the husband since the 1970’s when they worked together. In December 2001 she was transferred to the branch of the Department of Human Services where the husband worked and in December 2003 they went on their first date. She too says they are not living together although they spend time at each other’s home. In her affidavit of December 2005 she swore that they maintain separate living arrangements and that she intends to continue to do so. She was renting a home at C for herself and her two children who were then 19 and 20. She also says, and I believe, that she and the husband have kept their finances quite separate. In her affidavit she said that the husband and she “have no intentions of marriage or living together as husband and wife”. Since then, she agreed, they have discussed living together and to her, as it is to the husband, the idea is appealing. She maintained that she does not think of the husband’s home as “home”. She said, in cross-examination, she did not regard the husband’s home as “home” in April 2004. Yet at that time she wrote a note to the police about an incident which occurred between the wife and herself on 10 April 2004 at the R premises in which she referred to the premises as “home” more than once. A reference in the note to “my home” cannot be said on the evidence before me to refer to the R property. It might refer to Ms S’s home in C. However, she mentions “our neighbour […], from [next door to the R property]”. Curiously, Ms S’s complaint to the police accuses the wife of behaviour which indicates that the wife resents Ms S’s relationship with the husband.

14. I am satisfied that Ms S is mainly a credible witness and does regard her home at C as her principal home, i.e. where she lives with her children. I think she spends a great deal of time at the husband’s home and sees it as a second home. She appears to be devoted to her children. They are of an age when they are attaining independence and are likely to leave home soon. I regard it as highly likely that the husband and Ms S will commence to live together in a defacto or marital relationship in the very near future. They seemed to me to be fond of one another. The practicalities of their situation make living together good sense. Thus, Ms S’s financial situation is relevant as is the benefit the husband will soon gain from their financial interdependence.

15. In March 2007 Ms S was 53 years of age and continued to be employed by the Department of Human Services. She earns about $700.00 per week after tax. She has been employed in the Commonwealth Public Service since 1972, with a break from 1989 to 1997 when she worked in the State Public Service. Her overall superannuation rights are worth about $100,000.00. Her assets which consist of small cash savings, a little jewellery and very modest household contents add up to only $6,000.00 or a little less. Her cedit card debts are $22,000.00. She referred to these as “huge’, which to me tends to indicate that I should, and do, accept that her circumstances are as modest as she claims. Her rent currently eats up half her income, so her debts are quite understandable. These tend to show that the husband and she really do keep their finances separate. Nevertheless, her situation also tends to emphasise that to move into a defacto marriage or marriage with the husband would be in her best interests and is not likely to undermine her children’s rights. The husband is likely in the near future to be able to benefit from the sharing of income and expenses which is an attribute of living together.

16. The wife said in oral evidence that although she lives at D with Ms B she only lives there because it is convenient to her workplace and that when she was to retire in January she would move to L property and live there alone. The L property is a one and a half bedroom flat which she claims to have purchased specifically with a retirement move in mind. She claims to have already informed Ms B that she intends to sell D property so that she can put the proceeds towards the mortgage debt over L property.

17. The purchase of L property appears superficially to give support to the wife’s claims. One feels constrained to ask why else she would buy it. Yet her rental income is $360.00 per week and her L property mortgage costs $541.00 per week. She pays $200.00 per week towards D property. This leaves her with outgoings of about $380.00 per week. If she moves to L property her rental income will disappear but she will not need to pay instalments on D property and her mortgage is likely to be reduced by more than $100,000.00. Her mortgage payments will probably then be about the same as her current outgoings; about $384.00 per week ((245000x541)÷345000). To have both D property and L property puts her in a situation where she could have the advantage of some forced savings from the capital part of the $541.00 in mortgage instalments plus the prospect of capital gain. Thus, closer examination of any assumption that she would have no reason to purchase L property other for the purpose she has stated undermines that assumption.

18. The husband says the wife is in a domestic homosexual relationship with Ms B and submits that the facts I should accept leave the Court with no alternative but to find this to be the situation. As against the wife’s and Ms B’s blanket denial of this allegation, he relies on the wife’s conduct over many years. It must be acknowledged that when an allegation of this nature is made it is very difficult, if it is not true, for one wishing to refute it to provide evidence in support of the denial. Supportive but concrete evidence of this nature is either difficult to obtain or non-existent or easy to fabricate. I accept that the wife, if she is telling the truth, is unlikely to have been able to produce much substantial supportive evidence other than the denials of herself and Ms B.

19. Ms B and the wife met in the early 1980’s because they were both working at Organisation A. She became a family friend in 1990 after she met the husband. It is strange that the husband, who I accept as a more, although not wholly, credible witness than the wife or Ms B, said that the family friendship started in 1990. The wife intimates that it began much earlier. Ms B clearly states in her affidavit that after she met the husband the friendship was in the nature of a friendship between families. On a superficial reading of her affidavit, it appears to infer that the family friendship started not long after she met the wife. A more careful reading shows that what Ms B claims is ambiguous and may eliminate this inference. If I accept what the husband says, there may have been a surreptitious element in the friendship between the women because it may have existed for years and was well developed by 1990.    

20. According to the husband, sometimes Ms B would drive the wife home. It must have been from work or after visits by the wife to Ms B. Once, when Ms B drove the wife home, the husband saw them embrace and kiss on the mouth. He deduced from this and the fact that they were obviously very close that they had a homosexual relationship. He and the wife had ceased sexual relations in 1975. There is no suggestion that either have had another partner after the wife and Ms B met. The wife and Ms B deny the kissing and embracing incident the husband claims to have witnessed. I prefer his evidence of this incident to their denials. Although I do not regard him as a wholly reliable witness, I regard him as more reliable than the wife and Ms B. I have had the benefit of seeing all three witnesses giving oral evidence. Ms B, in particular, impressed me with her lack of credit.

21. Ordinarily, I need not be concerned about the sexual element of a marriage between parties. Here I regard it as relevant to the husband’s allegation about the nature of the relationship between the wife and Ms B. The nature of the relationship between the wife and Ms B is relevant to determination of the level of financial support and living circumstances the wife is likely to be in after these proceedings have concluded.

1. In early 1992 Ms B obtained a position in the regional New South Wales town. After she had lived there for about six months and near the end of the year the wife moved to that regional New South Wales town. She and Ms B purchased a home together after discussing the matter with the husband. The husband helped the wife move and subsequently visited them twice. He noticed nothing objective and was told nothing to suggest they were living as a same sex couple, but he assumed they were and noticed and heard nothing to suggest the opposite.

2. Ms B said that she and the wife lived separately in this home. The wife said she went to regional New South Wales because she was requested to apply for a job there and, as relations between her and the husband were strained, she took the offer because both she and the husband wanted time apart.

3. It stretches ones imagination too far to believe that Ms B played no part in the offer of the position in regional New South Wales. The husband, who I believe, said the wife went to regional New South Wales “without warning” rather than because there was any explicit or tacit agreement to separate. The wife and Ms B have usually lived together since December 1992 despite a number of moves.

4. In 1994 the wife accepted a job at Organisation C in the north-western suburbs and rented a home nearby. During that year the wife asked the husband to accompany her to a social function when senior Organisation staff would be present. She told the husband she wanted to bolster her image by appearing to be married, which they still were. I find it difficult to believe that she might think that in the Organisation’s society, if she was correctly perceived as separated, it would hinder her career as an information management officer. I find it much easier to accept that she might believe that to be regarded as a lesbian could, even in the Organisation’s circles, undermine her prospects. However, this incident also demonstrates that she is inclined to attempt to portray herself as something she is not for the sake of gain.

5. Ms B says that about a year after the wife moved to Organisation C, Ms B was also offered a position there. She said she was “headhunted”. The inference to me is that the wife was instrumental in the offer being made to her. Without this inference the degree of coincidence is too great. When she arrived from regional New South Wales the wife vacated her rented flat and both women moved into a bigger home in the same suburb which had a suitable yard for Ms B’s dog.

6. At some time in 1995 the wife again asked the husband to attend an Organisation function with her so she could pass herself off as being in an unexceptional marital relationship for the purpose of advancing her career.

7. The husband says that in 1997 the wife and Ms B again moved but continued to live together. The husband may be confused about this move. If he is not, Ms B’s evidence may not be accurate. I do not think either party’s case is advanced or undermined by any determination of the reality and shall not attempt to do so because I am not confident I could come to a reliable conclusion. I am satisfied the wife and Ms B continued to reside together at the relevant time.

8. In 2000 the wife bought the D property. D is quite close to K. It is likely that by this time the wife had commenced working at the new facilities which had been built on the K site of Organisation C. Ms B said she originally did not intend to purchase a share in D property. The husband claims that the wife informed him before the purchase that she and Ms B were buying another house and asked that he assist them in doing so. There is no doubt that this home was purchased in the wife’s sole name. However, according to Ms B, she and the wife discussed the matter after the purchase – I do not know how long after – and Ms B changed her mind and decided to contribute half of what the wife had already paid to purchase it. She claims that they did not take steps to amend the title to recognise her interest because of the stamp duty implications, suggesting that because their relationship was not a defacto one, amendment of the title would have been attended by the need to pay stamp duty, the suggestion being that if the wife and Ms B had been in a defacto same sex relationship they would not have been liable for stamp duty on amendment of the title to show the real situation. On my understanding of the Duties Act 1997 (NSW) as it stood from 2000 to 2003, there is an exemption from stamp duty where there is a transfer to a person from somebody in a defacto relationship with that person. Under the Property (Relationships) Act 1984 (NSW), as amended in 1999, a defacto relationship includes a same sex relationship. There is also another possible explanation why the wife did not transfer the half interest to Ms B at law. To do so, and claim the concession, would have been an admission of a relationship which they wished to deny. However, this does not explain why it was not originally put in the names of both women. The most likely explanation is that Ms B continued to work at the north-western suburban site of Organisation C after the wife moved to the K site, but because of their relationship the inconvenience to her of travelling to the north-western suburbs from D property was not as compelling as her need to live with the wife. Ms B and the wife sold the regional New South Wales home in 2002. They each used the proceeds as they chose.

9. There is some evidence which, in contrast with the oral evidence of Ms B, is enlightening because it highlights something she said in her affidavit. Ms B swore “we have always lived separate lives as we are not and never have been a couple. I go on holidays alone, as does she. We each have our own social lives”. As must already be clear from the above recitation of the facts, it is far from true that the wife and Ms B led separate lives. Since 1992, nearly 15 years, despite numerous moves they have managed to live together for most of the time. Even in their social lives there is some evidence to indicate they have not been as independent as Ms B’s statement infers. When Ms B was in London in the early 1990’s the wife visited her there and spent about a month touring Britain with her. In a few instances in around 2002 the husband took both women, rather than the wife, out to dinner and to the theatre. He says, and I accept despite the contrary suggestion by Ms B, that she and the wife attended conferences and had paid holidays together. He knows because he slept over at their home in order to care for their dogs while they were away. The women also have a common interest in and a love of dogs. The husband continued to accompany the wife to social functions and maintain the façade of their continuing marriage.

10. The wife purchased the home unit in L in November 2006. It is probably not suitable for keeping a large dog. The evidence suggests that the wife has a large dog which needs a secure fenced yard. Ms B and she have both taken into account the need for an appropriate yard for dogs in deciding where to live. Yet the wife claims that on her retirement she will leave D property which has such a yard and move into the L property flat and live there alone. Ms B says she will remain at D property and will try to buy the wife’s share from her.

11. For the whole time the wife and Ms B have lived together, they have shared expenses equally. This must have resulted in considerable savings for each. The proverb to the effect that two can live more cheaply than one is undoubtedly accurate in most instances. It applies here. In effect, each has provided considerable support for the other. Over 15 years both have had significant incomes and could afford to own what were or were in effect investment properties and could have lived separately if they had wished. Instead, they made what must have been disruptive moves, particularly to their social lives, to continue to live together. They probably initiated the opportunities to undertake the job changes which allowed some of the moves.

12. It is much more probable then not that the wife and Ms B will continue to live together into the foreseeable future after the wife’s retirement. By doing so they will not only save expenses, they will probably each be able to earn more income. The wife will be free to let L property. Ms B will either be able to keep a property she currently owns in E and will not have to borrow the amount needed, which is substantial, to purchase the wife’s interest in D property or a replacement home. Although I think it is more probable than not that the relationship between the wife and Ms B is a same sex defacto one and therefore, is more likely to be enduring than might otherwise be the case, I am satisfied that even if I am in error in my finding about the nature of the relationship, the wife and Ms B will continue to live together. The wife will thereby have the benefit of enduring support from Ms B of the type which has been in existence for most of the last 15 years. Thus it does not really matter for the determination of these proceedings whether there is a romantic or sexual element in the relationship between Ms B and the wife. What matters is that their interdependence is likely to continue into the foreseeable future.  

13. Thus, it is of relevance to appreciate Ms B’s finances. Apart from her net interest in D property, which is the same value as the wife’s net interest, she admitted to ownership of real property in E where she lived before moving to regional New South Wales, which she said is worth $350,000.00 and her share of the contents of the D property home which she said are worth $55,000.00. Her debts, excluding her mortgage debt for D property, amount to about $26,000.00. She earns $1250.00 per week net. I do not know how old she is, but she does not appear to me to be much different in age to the wife. It is likely that she will reach retirement in the not too distant future. She is likely to have significant superannuation rights having worked in the information management field for as long or longer than the wife.

14. The wife was aged 59 at the time of the hearing. I accept that she will have retired in January 2008 at age 60 and will now be receiving a pension. I regard aspects of her pension rights to be matters which must be considered under s.75(2). Firstly she is likely to have received a cash payment. It is likely to have been about $70,000.00 in January 2008. It is not in addition to the already stated value of her pension, it is simply a part of it which with the other part makes up its overall value of $727,097.00. Her income, which is the other element of that value, is likely to be $3,000.00 per fortnight or $1,500.00 per week gross.

15. At the time of hearing, her income slightly exceeded her outgoings, including outgoings on everyday living and $150.00 per week to support the family in Burma. The level of assistance she will derive from Ms B will not alter her situation from what it was at the time of the hearing because it has been provided for many years. The wife could increase the amount of money she will have for saving or use when the need arises by selling the L property. If she does, she will be roughly $300.00 per week better off in available cash. Her forced savings would then be diminished, her tax would increase a little and she would not benefit from capital gains which she would otherwise have expected. Generally speaking, if little changes, she will be in a reasonably secure financial situation even though some of the benefits of her employment will have disappeared on her retirement, notably the $153.00 p.a. in motor car allowance she has as a consequence of her job. Although the wife’s income will have reduced on retirement to $1860.00 ($1500 + $360) per week gross, her outgoings will also have reduced. She will no longer have to meet superannuation payments of $658.00 per week and her tax will be reduced from $1055.00 per week on $3439.00 gross to about $520.00 per week on $1860.00 and her weekly income will be reduced from about $1716.00 net plus car allowance to $1340.00 net plus anything she earns on cash holdings. Alternatively, and it is more likely, she will reduce her mortgage payments by more than $200.00 per week, because she will extinguish the D property debt. Accordingly, the wife’s position will involve little more hardship on her retirement than it did when she was employed full time. In reality, she will be free to organise her finances by reducing her property and debts so that she will be able to live comfortably on her significant retirement income.   

16. The wife will have notionally become, on retirement, the possessor of superannuation rights worth $727,097.00. She will not have that fund to use but she will hold an entitlement of that cash value. Not only is she assumed to be able to use it, it will have provided a cash fund of $70,195.00 and an income for life. The value attributed to her rights may be thought to be reduced or increased by the fact that she will not hold it as a lump sum. The $727,097.00 valuation includes the $70,195.00. If it were to be valued by determining its value on 18 January 2008 to the wife on the assumption that she would receive about $1500.00 per week before tax for the rest of her life; 25.8 years on the latest edition of the Australia life tables, it would be worth, in addition to the $70,195.00 in cash, more than $1.4m. That is the sum which would need to be invested at a 3% to give $1500.00 per week for 25.8 years with nothing left on payment of the final $1500.00 at the end of that period. Thus, it is quite fair to the wife to regard the superannuation as having a value of $727,097.00 even if it cannot be spent. It is in fact the value of the wife’s investment in superannuation. It is fair to the husband to regard the superannuation as having the same value because all of it except the $70,195.00 cannot be used as the wife might use cash.

17. The wife is not in good health. She has had bouts of depression and suffers from eye, neck, back and shoulder pain which can be severe, loss of mobility, poor vision and loss of kidney and liver function. She takes a variety of medication for her condition. In most areas her health is likely to deteriorate rather than improve. She may have to resort to surgery to relieve some of her problems. However, as she plans to retire in any event, her health problems will have little effect on her earnings or earning capacity. She does not suggest that after she intends to retire in January 2008 she would like to undertake other income earning activities. Her health problems are not likely to cause her a great deal of extra expense compared to her current level of expense on them.

18. The husband currently holds employment. It is not very remunerative. He does not have the benefit of significant superannuation rights. He was aged 62 at the time of the hearing but there is no suggestion that he is not in good health. He is likely to continue to have the benefit of being able to share his living expenses with Ms S. Because of the nature of the work he does, the long hours needed and the low rate of return, he is not likely to continue working for very long. Ms S still works as a public servant. She has been employed in the Commonwealth public service for many years. She is likely to continue earning at much the same rate as she has been earning; about $48,000.00 p.a. gross leaving about $700.00 per week after tax, and will probably work for some years. When she retires her superannuation rights, which are not great at present, are likely to be moderate.

19. Despite Ms S’s affidavit evidence that she is neither contemplating marriage nor contemplating living with the husband full time, I think their relationship will soon evolve into a defacto marriage or marriage and will endure. Practical necessity makes this highly likely. As a result, the husband, if he is able to keep the R home or, if he is not, buy a cheaper home and discharge his debts, should be able to keep his expenditure at a level that he can afford because of the assistance he will receive by living with Ms S. This is despite the fact that he currently spends about $250.00 per week more than he earns. Nevertheless, his situation will not be as secure as that of the wife.

20. The parties have been separated for many years. They have remained friends and have been involved with one another’s lives more than is usual. Their financial affairs have continued to some extent to be intermingled. Yet they have, by and large, lived separate lives and kept their finances separate and their financial arrangements to themselves for a long time. In the circumstances, for the orders of this Court to be just and equitable, the life they have built and lived while separated for so long must play a very significant part in the making of the orders.

21. A consideration which cannot be ignored is the effect of the parties’ liability for their legal costs. As all paid legal costs have been added back notionally, I must assume that all their paid and unpaid costs will be met from the property received under s.79. In the wife’s case, she is likely to be faced with actual costs of $21,012.00 and notional costs of $46,444.00, a total of $67,456.00. The husband has paid $28,050.00 and is likely to have to pay an additional $8000.00 in costs, making up a real and notional liability of $36,050.00 for his legal costs.

22. There is significant difficulty with taking costs into account as a s.75(2) factor. I have already adverted to it when discussing whether to add paid costs to the amount to be divided as a notional advance. If costs are afforded any weight under s.75(2), this will result in imposing on the party who is not liable for them a part of the burden of the other party’s costs inconsistently with the requirements of s.117 of the Act. I shall, so far as I am able, take into account each party’s liability for costs while attempting to minimise the imposition on one party of any obligation which might involve that party in meeting the costs of the other party.       

23. The situation of each party at the time of hearing is:

    Wife:1/3 interest R property   $325,000

    1/2 interest D property            $170,000            

    L property $380,000                 

    Furniture etc     $5000

    Savings $528

    Superannuation  $727,097

    Paid legal costs    $46,443

    Funds in solicitors Trust A/C  $14,230

    Mortgage D property  ($55,004)

    Mortgage L property   ($345,829)

    Personal Loan  ($18,000)

    Total $1,249,456  

Husband:1/2 interest R property         $325,000

Savings$7,300

Cars$1,600

Furniture etc    $5,000   

Superannuation   $4567

Paid legal costs   $28,050

Bank loan($16,000)

Credit Cards       ($28,000)

Total$327,517

Joint total$1,576,982

1. The wife’s case is that property should not be altered from the situation at the hearing because of the husband’s gambling, his failure to be frank about the disappearance of his funds, especially his superannuation and inheritance, and the time the parties have led separate lives. I do not accept that there has been any significant failure to disclose. Even if there has, I do not think it has resulted in any funds being secreted by the husband. The wife’s case would mean that the wife would receive 79.23% of the net assets and the husband 20.77%. This would be grossly unfair to the husband given their respective contributions to them, the way they have been living since separation, particularly the husband’s continuing residence in the former matrimonial home and the relative hardship he would be subjected to if the orders the wife seek were to be made.

2. The husband seeks that the wife’s interest in the former matrimonial home be transferred to him and that, otherwise, the parties maintain the status quo. If this is done, the husband would receive 41.37% of the assets and the wife 58.63%. Their respective net worths would be $652,517.00 and $924,456.00. The husband has not asked for more. He has, I think correctly, recognised that although his contributions have been as large as those of the wife, it would be unfair because of the way both have independently conducted their lives since separation and the very long period of separation to fail to recognise this. This is notwithstanding the notable exceptions of the $50,000.00 gift to the wife by the husband, his pre-separation contribution to the wife’s earnings after separation including superannuation of his care for the parties’ child which he was a full time employees and his continuing occupation of the R home. It is particularly fair to transfer the wife’s interest in R property to the husband because of his occupation of it post separation and the likely hardship he will suffer if this is not done. He should now be able to continue to live in it or use it as he sees fit, if justice is to be done.

1. The gift of the $50,000.00 may not have been made if he had not been allowed to live in the home. It would be fallacious to think that because the wife permitted the husband to use the home she has relevantly improved his situation. Use of the home saved the husband the cost of purchasing or renting a home. Its sale would probably have allowed the wife to avoid much of her interest costs. But overall the net property available for distribution would not have been much different and the adjustment for s.75(2) in favour of the husband simply would have had to be greater.

2. If the Court makes the orders the husband seeks, both parties will be able to live their lives much as they have in the years leading to the hearing. I regard orders which provide for this, in all the circumstances, to be those which result in the highest degree of justice and equity. Neither will suffer hardship and each will be able to live relatively comfortably if they choose to use the assets they have in the most appropriate way. To do this the husband may have to sell the home and purchase something more modest, but I regard the position he is in to be of his own choosing and essentially fair. The wife, too, may find it necessary to rearrange her affairs, but will be in a position to choose. This is fair to her.

3. I shall make orders which reflect the above conclusions. The orders I shall make are:

   1. That within one month the wife is to do all things or execute all documents necessary to transfer and shall transfer to the husband all her    right title and interest at law and in Equity in the real property known as and situated at R in the State of New South Wales.

   2. It is hereby declared that each party is as against the other except for the property subject of order 1. wholly beneficially entitled to such real and personal property and rights to superannuation that are possessed by, held in the name of or controlled by that party and that neither party is liable for any debt or part of a debt of the other.

   3. Costs are reserved for one month.

I certify that the preceding ninety six (96) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen.

Associate: 

Date:  6 November 2008