Daeger & Daeger (No 4)
[2023] FedCFamC1F 837
•26 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Daeger & Daeger (No 4) [2023] FedCFamC1F 837
File number(s): WOC 484 of 2019 Judgment of: CURRAN J Date of judgment: 26 October 2023 Catchwords: FAMILY LAW – PROPERTY – final hearing – where there has been a long marriage – adjustment of parties’ property interests between applicant wife and respondent husband – where the date of separation is in contest – where the dates of cohabitation are in contest – where there were several periods of separation – where the personal property of the parties has not been valued – sale of former matrimonial home – where legal fees paid are sought as an addback – where there is a history of family violence between the parties – where each party has primary care of a child – where it is agreed that contributions are equal – whether just and equitable for parties’ property interests to be adjusted – adjustment is warranted Legislation: Family Law Act 1975 (Cth) ss 75, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.06
Cases cited: Bevan & Bevan (2013) FLC 93-545
Chorn & Hopkins (2004) FLC 93-204
Clauson & Clauson (1995) FLC 92-595
Daeger & Daeger (No 2) [2023] FedCFamC1F 19
Daeger & Daeger (No 3) [2023] FedCFamC1F 437
DJM v JLM (1998) FLC 92-816
Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) 30 Fam LR 355
Kowaliw & Kowaliw (1981) FLC 91-092
Omacini & Omacini (2005) 33 Fam LR 134
Stanford & Stanford (2012) 247 CLR 108
Townsend & Townsend (1995) FLC 92-569
Trevi & Trevi (2018) FLC 93-858
Division: Division 1 First Instance Number of paragraphs: 191 Date of last submission/s: 10 August 2023 Date of hearing: 22 & 24 – 26 May 2023 Place: Sydney Counsel for the Applicant: Ms Beck Solicitor for the Applicant: Caldwell Martin Cox Counsel for the Respondent: Ms Vogel Solicitor for the Respondent: Shiels Lawyers Pty Ltd ORDERS
WOC 484 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS DAEGER
Applicant
AND: MR DAEGER
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
26 OCTOBER 2023
THE COURT ORDERS THAT:
Property adjustment
1.The net property of the parties be divided such as to effect a division of 52.5% to the husband and 47.5% to the wife as set out in orders 11 and 13 below.
Sale of former matrimonial home
2.Within 7 days of the date of these orders, the husband shall do all such acts and things and shall execute all deeds, documents and instruments as may be necessary to list for sale and sell the former matrimonial home situated at and known as SS Street, Town TT in the State of New South Wales being the whole of the land comprised in Certificate of Title Folio … (the “Town TT property”).
3.The parties shall engage an agent as agreed between the parties with respect to the sale.
4.In the event that the parties are unable to agree on an agent within 7 days of these orders, then:
(a)Within 14 days of the date of these orders, the wife shall forward to the husband a list of three agents; and
(b)Within a further 7 days upon receipt of the list referred to in order 4(a) herein, the husband shall select one agent from the list; and
(c)Within a further 7 days the parties shall jointly appoint the agent selected by the husband to be the agent with respect to the sale; and
(d)In the event that the husband does not comply with order 4(b), the wife shall select one agent from the list and notify the husband and within a further 7 days the parties shall jointly appoint the agent selected by the wife to be the agent with respect of the sale.
5.The parties shall engage a conveyancer as agreed between the parties with respect to the sale.
6.In the event that the parties are unable to agree on a conveyancer within 7 days of these orders, then:
(a)Within 14 days of the date of these orders, the wife shall forward to the husband a list of three conveyancers; and
(b)Within a further 7 days upon receipt of the list referred to in order 6(a) herein, the husband shall select one conveyancer from the list; and
(c)Within a further 7 days the parties shall jointly appoint the conveyancer selected by the husband to be the conveyancer with respect to the sale; and
(d)In the event that the husband does not comply with order 6(b), the wife shall select one conveyancer from the list and notify the husband and within a further 7 days, the parties shall jointly appoint the conveyancer selected by the wife to be the agent with respect of the sale.
7.For the purposes of order 2 the following shall apply:
(a)The husband shall do all acts and things as may be necessary to appoint the agent as agreed pursuant to orders 3 and 4 to market and sell the Town TT property;
(b)The husband shall grant authority to the agent to provide information to the wife or her solicitor as and when requested, including such information as the marketing plan, copies of the photographs taken of the property, details of any open house inspections and all offers made on the property;
(c)The husband shall do all acts and things as may be necessary to appoint the agreed conveyancer to act as the conveyancer as agreed pursuant to order 5 and 6 on the sale of the property and to forthwith engage such conveyancer and shall sign all documents necessary to list for sale and sell the property;
(d)The husband shall sign the agency agreement with the chosen agent within 7 days of receipt of the same from the nominated agent;
(e)If the parties do not agree on a listing price, the parties shall be guided by the valuation of the property by Mr ZZ dated 23 May 2023, and the listing price shall be as per that valuation;
(f)The husband must accept any offer that is the same as or higher than the valued price of the property; and
(g)Either party may purchase the property at any time during the sale process on the basis that the purchase price is the same as or higher than the valuation referred to in (e) above AND is higher than any other offer made by prospective purchasers.
8.In the event that the Town TT property has not sold within 12 weeks of being listed for sale by private treaty in accordance with order 2 above, the husband shall do all such acts and things and sign all such deeds, documents and instruments as may be necessary to cause the said property to be sold by the same agent by way of public auction on the following terms:
(a)That such auction take place within 6 weeks from the date of placing the property for sale by public auction or as soon as practicable thereafter;
(b)That the reserve price for such auction shall be as agreed between the parties or, failing agreement for more than seven days, as determined by the selling agent;
(c)That the husband shall pay all auction expenses as requested by the selling agent as and when they fall due;
(d)That the husband shall do all such acts and things as may be necessary or recommended by the selling agent to properly present the property for sale and to make it available for inspection by prospective purchasers;
(e)That either party shall be at liberty to bid for the purchase of the property at auction; and
(f)That the husband shall attend the auction and if necessary negotiate with the highest bidder at auction if the reserve price is not reached.
9.Upon completion of the sale of the property in accordance with these orders, the husband shall distribute the sale proceeds in the following order and priority:
(a)In discharge of the mortgage secured over the property to ANZ Bank;
(b)In payment of the parties’ liability secured over the property to Westpac bank;
(c)In payment of the ANZ personal loan in the sole name of the wife;
(d)In payment of legal costs, real estate agent’s commission, auction expenses and GST upon the said sale; and
(e)The balance to be distributed as to the husband and wife in accordance with these orders such as to effect an overall distribution of the net pool of 52.5% to the husband and 47.5% to the wife.
10.The net pool is to be calculated as:
(a)the net sale proceeds from the sale of the Town TT property in accordance with order 9 above;
(b)plus the total superannuation of the husband being $30,252.00;
(c)plus the total superannuation of the wife being $775.00.
11.The 52.5% of the net pool as defined in order 10 above, less the sum of $30,252.00 (the total of the husband’s superannuation entitlement), is to be paid into the trust account of the husband’s solicitor.
12.Forthwith upon the husband’s solicitor receiving the sum referred to in order 11 above, the husband is to do all things necessary to authorise and direct his lawyers to pay the following sums as directed:
(a)the sum of $4,397.10 to the wife in compliance with the Costs Order of the Federal Circuit and Family Court of Australia of 22 September 2021;
(b)and the sum of $7,500.00 to the wife in compliance with the Costs Order of the Federal Circuit and Family Court of Australia of 22 May 2023; and
(c)the sum of $8,185.00 to AB Council being the outstanding council rates for the Town TT property.
13.The 47.5% of the net pool as defined in order 10 above less the wife’s superannuation amount of $775.00 is to be paid to the trust account of the wife’s solicitor.
Trustee for sale
14.In the event that the husband refuses or neglects to comply with orders 2 to 6 above within 6 weeks of the date of these orders, the wife shall forthwith thereafter be appointed Trustee of the husband’s interest in the property situated at and known as SS Street, Town TT in the State of New South Wales being the whole of the land comprised in Certificate of Title Folio … with all of the powers of a Trustee for the sale of the property and the distribution of the sale proceeds in accordance with these orders.
15.The wife shall forthwith thereafter do all things necessary to cause the property to be listed for sale and sold in accordance with these orders and shall distribute the sale proceeds in the same order and priority.
Indemnities and restraints
16.Pending completion of the sale:
(a)the husband have the sole right to occupy the Town TT property;
(b)the husband pay all instalments pursuant to the mortgage and all rates, taxes and outgoings of the Town TT property as they fall due; and
(c)the husband is restrained from further encumbering the Town TT property without the consent of the wife or order of this Court.
Other property
17.Subject to orders 11 to 13 above, the wife shall be declared to be the sole legal and beneficial owner of all her right, title and interest in and to:
(a)all cash at bank and moneys invested by her in her sole name;
(b)all furniture and personal effects in her possession;
(c)Motor Vehicle 1 in her possession;
(d)Motor Vehicle 2; and
(e)any superannuation entitlements received by the wife and invested by her or on her behalf.
18.Subject to order 11 to 13 above, the husband shall be declared to be the sole legal and beneficial owner of all his right, title and interest in and to:
(a)all cash at bank and moneys invested by him in his sole name;
(b)all furniture and personal effects in his possession; and
(c)Motor Vehicle 3;
(d)the trailer; and
(e)any superannuation entitlements received by the husband and invested by him or on his behalf.
19.Within 7 days of the date of these orders the husband is to deliver to the wife’s legal representatives any photo albums held in the Town TT property for the purpose of making copies of such photos. Within 21 days thereafter, the husband shall collect the photo albums from the wife’s legal representative and he shall retain them.
Personal property – possession to denote ownership
20.Other than is specifically provided for in these orders the parties are solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of each of the parties as at the date of the making of these orders.
21.Unless otherwise specified in these Orders, and except for the purpose of enforcing the payment of any money due under these or any subsequent Orders:
(a)each party shall be solely entitled to the exclusion of the other in both law and in equity to:
(i)all property (including choses-in-action) in the possession of such party as at the date of this agreement;
(ii)all insurance policies in relation to which they are the Life Insured.
(b)each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
22.In the event that either party fails to sign any necessary documents or instruments or to do any acts required or contemplated by these Orders to be done, with such failure continuing for 14 days, then the Registrar of the Family Court of Australia shall pursuant to section 106A of the Family Law Act 1975 (Cth), have the power to execute any documents or instruments in the name of the person who has refused or neglected to sign any necessary document or instrument or to do any act required or contemplated by these Orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Daeger & Daeger has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CURRAN J:
INTRODUCTION
This matter involves competing applications for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) between Ms Daeger (“the wife”) and Mr Daeger (“the husband”). Final parenting orders were made by consent on the first day of the trial such that: the youngest child Y, who is 13 years old, will remain living with his father; and X, who is 15 years old, will remain living with his mother. Both boys have special needs.
BACKGROUND
The wife’s case is that the parties were married in 1998 and they separated on 20 January 2019. There are five children of the marriage: Mr I born 1999, currently age 23; Mr J born 2000, currently age 22; Ms W born 2001, currently age 21; X born 2007, currently age 15; and Y born 2010, currently age 13.
The husband’s case is the parties were married in 1998, but they separated in 2006. His evidence was that the two youngest children who were conceived through In Vitro Fertilisation (“IVF”) were conceived without his consent, and he maintained the date of separation was 2006.
There were allegations against each party of a history of serious family violence. The adult sons had aligned with, and gave evidence in support of, the husband. The adult daughter had aligned with, and gave evidence in support of, the wife.
Several Apprehended Violence Orders (“AVO”) were in force at different times, and it was the wife’s contention that although there were periods of separation at those and other times, the parties reconciled and the relationship continued until final separation in 2019.
LITIGATION HISTORY
The wife commenced proceedings on 6 May 2019 seeking parenting and property orders including that the property at SS Street, Town TT (“the Town TT property”) be sold and that $20,000 from the proceeds of sale be paid to each party by way of interim property distribution pending further order of the court.
A factual summary of the parenting proceedings is helpfully set out in the previous judgment of Altobelli J in this matter dated 25 January 2023, Daeger & Daeger (No 2) [2023] FedCFamC1F 19. For the purposes of these reasons pertaining to financial proceedings it is unnecessary to detail the facts and procedural history of the parenting proceedings.
On 3 March 2021, orders were made by Alstergren CJ that a valuer be appointed for the valuation of the Town TT property as soon as possible. On this day it was listed for final hearing for 7 days on a date to be fixed.
On 4 November 2021, the matter was listed for final hearing on 14 March 2022 and trial directions were made by Altobelli J.
On 11 February 2022, Altobelli J made orders to vacate the final hearing dates in March 2022 and the final hearing was re-listed for 4 July 2022.
On 17 March 2022, Altobelli J made orders to vacate the adjourned hearing dates in July 2022.
On 18 May 2022, Altobelli J listed the matter for final hearing to start on 23 January 2023.
On 25 August 2022, the January 2023 hearing dates were vacated by Altobelli J.
On 19 January 2023, Altobelli J made trial directions and listed the matter for mention before me on 27 April 2023 to confirm readiness. Readiness for the final hearing commencing 22 May 2023 was confirmed by me on 27 April 2023.
On 10 May 2023, the husband filed an Application in a Proceeding seeking financial disclosure from the wife.
On 11 May 2023, the husband’s Application in a Proceeding was heard. During the course of the hearing, the wife’s legal representative complained of incomplete disclosure by the husband. Orders were made for specific disclosure by both parties, as well as orders for the provision of a joint balance sheet and that a joint letter for valuation of the Town TT property be sent to the proposed valuer that afternoon.
On the first day of this final hearing, being 22 May 2023, final orders were made by consent as to the parenting proceedings.
The final hearing was heard on 22 & 24 – 26 May 2023. On the final day, orders were made by consent that the respondent solely pay all repayments of principal, interest, fees and charges, including arrears if any, and was restrained from further encumbering, the property in any manner. Thereafter, final judgment was reserved.
Judgment delivery was listed to be delivered on 9 June 2023.
On 6 June 2023, the husband filed an Application in a Proceeding seeking leave to urgently relist the matter before me seeking orders for a second mortgage with Westpac, taken out in 2017 to assist the parties’ adult son Mr I purchase a home, to be paid out from the sales proceeds of Town TT.
The husband filed an Application in a Proceeding on 23 June 2023 seeking leave to re-open to call further evidence in respect of the Westpac mortgage. The wife consented to the matter being reopened. The matter was re-opened and further evidence was filed in respect of the Westpac mortgage. The wife’s Response to Application in a Proceeding dated 7 July 2023 contained an application for the joinder of the parties’ adult son, Mr I. The application of the wife for a joinder of Mr I and third-party orders against him was dismissed (See Daeger & Daeger (No 3) [2023] FedCFamC1F 437). The application of the husband for an order that the full amount of the Westpac mortgage be paid out from the Town TT sale proceeds was not determined as part of the Application in a Proceeding and will be appropriately considered herein.
ORDERS SOUGHT BY THE PARTIES
Applicant Wife
At final hearing, the applicant wife sought that:
(a)The husband pay the wife within 4 weeks of the date of the orders;
(i)$696,300.00 by way of property adjustment;
(ii)$4,397.10 pursuant to costs order made 22 September 2021; and
(iii)$7,500.00 pursuant to costs order made 22 May 2023;
(b)The husband solely bear all repayments in relation to the home loan secured over the Town TT property;
(c)In the event of failure to pay the wife, the Town TT property be sold;
(d)The husband deliver the wife’s photo albums stored in Mr I’s bedroom to her solicitors office; and
(e)Each party retains all right, title and interest to items in their sole name and possession, including superannuation.
Respondent Husband
In his Amended Response to Final Orders, the husband sought that he retain the Town TT property and each party retains all right, title and interest to items in their sole name and possession including superannuation. During final submissions, however, counsel for the husband sought a property adjustment of 60 per cent in favour of the husband.
MATERIAL RELIED UPON
Applicant Wife
The applicant wife relied on the following documents:
(a)Further Amended Initiating Application filed 17 April 2023;
(b)Affidavit of Ms Daeger filed 26 April 2023;
(c)Affidavit of Ms W filed 5 May 2023.
(d)Financial Statement filed 26 April 2023;
(e)Outline of Case Document marked as Exhibit A;
(f)Response to Application in a Proceeding filed 7 July 2023;
(g)Affidavit of Ms Daeger filed 10 July 2023;
(h)Written submissions filed 10 July 2023; and
(i)Statement of Contentions filed 25 August 2023.
Respondent Husband
The respondent husband relied on the following documents:
(a)Amended Response filed 2 May 2023;
(b)Affidavit of Mr Daeger filed 5 May 2023;
(c)Affidavit of Ms A filed 4 May 2023;
(d)Affidavit of Mr I filed 2 May 2023;
(e)Affidavit of Mr J filed 2 May 2023;
(f)Financial Statement filed 2 May 2023;
(g)Outline of Case Document marked as Exhibit B;
(h)Application in a Proceeding filed 7 June 2023;
(i)Affidavit of Mr Daeger filed 6 June 2023;
(j)Affidavit of Mr I filed 6 June 2023;
(k)Application in a Proceeding filed 23 June 2023;
(l)Affidavit of Mr I filed 23 June 2023; and
(m)Affidavit of Ms E filed 23 June 2023.
UNCONTESTED FACTS
The parties provided a statement of agreed facts. They are:
•That cohabitation commenced in 1997.
•That, at cohabitation, the Husband had shares worth approximately $50,000.
•For a period of approximately 18 months, the family unit lived at the maternal grandmother’s residence rent free. The Wife says that both parties lived there whereas the Husband says that only the Wife and children lived there.
•The Husband inherited $500,000 in 2011, however stopped working for a period of around 18 months. He also purchased [two vehicles]. By the time the [SS Street] property was purchased in 2012, only $140,000 remained of that inheritance, $125,000 of which was applied to that purchase.
•The Wife received an inheritance of around $178,000 in mid-2018.
•The Wife obtained a personal loan of $50,000 and she has had the sole liability for repayments on the $50,000 loan, which has now reduced to a balance of $30,220.
•Post separation, the Husband has had the benefit of living at the [SS Street] property and from January 2019 to the present, the mortgage on that property has risen by some $29,000.
•Both parties assess contributions at 50/50.
THE LAW
It is necessary to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Having assessed the property available for adjustment between the parties it is then necessary to have regard to the matters set out in s 79(4) and s 75(2) of the Act insofar as they are relevant to the facts of this case.
Prior to the High Court of Australia's decision of Stanford & Stanford (2012) 247 CLR 108 ("Stanford"), parties generally relied upon the "four step process" set forth in Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) 30 Fam LR 355 ("Hickey") in the determination of an application under s 79 of the Act. This is as follows:
First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.
Second, the court should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.
Third, the court should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.
Fourth, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.[1]
[1] Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) 30 Fam LR 355 at [39].
In Stanford, the High Court made clear at paragraph 37 that:
it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
The Full Court of the Family Court of Australia in Bevan & Bevan (2013) FLC 93-545 at paragraphs 72 and 73 has held that the decision in Stanford has not overruled the four-step approach.
In weighing the parties' respective contributions, I am required to take into consideration all of the myriad contributions, including both parties’ initial contributions, in a holistic fashion. All contributions must be weighed collectively rather than segmented or compartmentalised.
In undertaking the task of assessing the parties' future needs, the Full Court has cautioned against a tendency "to assess s. 75(2) factors in percentage terms without considering its real impact" and that it "is the real impact in money terms which is ultimately the critical issue.”[2]
[2] Clauson & Clauson (1995) FLC 92-595 at [81].
In undertaking the fourth stage, referred to in Hickey, it is necessary to conclude that the outcome overall is just and equitable.
It is to be appreciated that the exercise of the broad discretion inevitably involves “value judgements and matters of impression”[3] and accordingly, it cannot be treated as “a mathematical exercise.”[4]
[3] Lovine & Connor and Anor (2012) FLC 93-515 at paragraph 40.
[4] Lovine & Connor and Anor (2012) FLC 93-515 at paragraph 41.
In this case it is also necessary to have regard to the guiding principles which are set out in the decisions of Chorn & Hopkins (2004) FLC 93-204 ("Chorn") and Trevi & Trevi (2018) FLC 93-858 ("Trevi") about the treatment of notional property in this case in respect of monies applied to the payment of legal fees.
SECTION 79(2)
Both parties contended an adjustment of their property interests was warranted but disagreed about the nature of the adjustment.
All of the assets of the parties other than Motor Vehicle 1 are owned by or in the possession of the husband. The most significant asset is the Town TT property, which is in the sole name of the husband, who has had sole occupation since separation in 2019.
Both parties are seeking orders for the adjustment of their property upon the breakdown of their relationship.
The parties’ relationship was from 1997 until January 2019, noting periods of separation referred to below, and produced five children. The only significant asset of the relationship is the Town TT property held in the husband’s sole name. In my view it is just and equitable that there should be a property adjustment.
Each party sought that the Court make such a property adjustment with the wife seeking 55 per cent adjustment in her favour, and the husband, in final submissions, sought a 60 per cent adjustment in his favour.
THE PROPERTY POOL
The first step is to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. In identifying the parties’ asset pool, the value of the most significant asset, the Town TT property, was ultimately agreed by adopting the joint valuation which was filed on the last day of the trial, with an agreed value of $1,750,000.00.
It was agreed that there was a joint liability with the ANZ bank in the name of the wife in the sum of $30,220.00 at the date of trial. It was also agreed that there were outstanding rates to AB Council in the sum of $8,185.00. The total of both parties’ superannuation $31,027.00 was also agreed. No other values were agreed.
There were several items of property where value remained in dispute, being those items set out at paragraph 48. Unhelpfully, there was no evidence as to value of the items in dispute. In those circumstances, I have ordered that the chattels each party held, where the value was de minimis, be retained by that party.
There were several alleged debts claimed by the husband which were also disputed. Unhelpfully there was no corroborative evidence other than assertions of loans.
It was agreed that the Town TT property had a value of $1,750,000.00 and a mortgage to the ANZ bank of $484,008.00. After the matter was re-opened, evidence was received that established that a second mortgage and guarantee had been taken out over the Town TT property to assist Mr I with his own property purchase in late 2017. The fact of the liability has been established on that evidence, but the extent of the liability is still not clear to me even after the matter had been reopened for further evidence (as discussed below).
I find, as discussed below, that the second mortgage and guarantee is a joint liability. It was agreed that the parties’ other joint liabilities were an ANZ Personal Loan of $30,220.00, and the outstanding AB Council rates of $8,185.00.00 which the wife sought the husband pay.
The husband has superannuation of $30,252.00 and the wife has superannuation of $775.00. Neither party sought a splitting order and accordingly each party will retain the superannuation in their respective names.
There was no agreement as to the treatment and value of the following assets and liabilities:
(a)The alleged loan to Mr I of $32,687.00;
(b)The alleged loan to Mr J of $61,825.00;
(c)The second mortgage and guarantee over Town TT;
(d)The liability of agreed outstanding AB Council rates;
(e)The value of the furniture, chattels and farm equipment at the Town TT property;
(f)The value (and ownership) of Motor Vehicle 2;
(g)The value of the husband’s Motor Vehicle 3;
(h)The value of the wife’s Motor Vehicle 1; and
(i)The treatment of the legal fees paid by the husband of $49,000.00.
It is necessary to present admissible, probative evidence before the court as to the value of any asset and evidence of any liability if it is in dispute. The practical difficulty arose here in circumstances where there was no evidence of the values of the items that remained in dispute. I address each of those disputed items below in order to determine their identity and value as required.
Alleged Liabilities
Loans alleged by Mr I ($32,687.00) and Mr J ($61,825.00)
In relation to the assertion of loans made by Mr I and Mr J, I am not satisfied on the balance of probabilities as to the existence of the loans as asserted. The husband produced a folder with what was described as “1000 pages of bank records” on the second day of trial; apparently in support of a finding of the existence of the loans. Disclosure of the documents had not been provided to the wife prior to the production of the folder during the trial.
Despite the late disclosure and potential prejudice to the wife, I granted counsel for the husband leave to call further oral evidence referencing the folder of material produced and indicated that she would be permitted to identify and tender the individual documents that she sought to rely upon in support of the contention that the loans existed. Counsel for the husband elected not to undertake that course. That was entirely a matter for her and her instructions, however, the result was, other than the assertion made of the loans, there was no corroborative evidence from any source of the alleged loans.
In giving evidence, Mr J stated that his Aunt Ms E (the husband’s sister), had helped him to “calculate” the figures from his bank records that he claimed was owed to him. There was no explanation as to how or why his aunt would know what the figures were that were being claimed as monies owed and Ms E did not give evidence of her role in this regard in her own affidavit. I put little weight on the uncorroborated claims of money being owed for the reasons that follow.
There was no evidence about when the alleged loans were made. There were broad assertions of a total figure borrowed each year over a period of four years set out in the affidavit evidence of both sons. There was no evidence about when the funds were received; how they were used; if it was a loan at the time of the advance; what conditions attached to it; and whether it was documented in any manner. The vague and imprecise manner of this evidence causes me serious reservation as to its accuracy.
Both Mr I and Mr J were cross examined about the alleged loans. The evidence they each gave was confusing and vague. Mr I asserted that he did not need to record the figures as he “would not forget”, which I infer means there were no records of the transactions kept by him.
Neither Mr I, nor Mr J, were able to give any specific evidence as to the dates and circumstances of the alleged transfers. The highest the evidence came to was that it was “usually” cash, although sometimes a cash deposit made at a bank and sometimes a direct deposit. There were no bank records admitted into evidence to verify the claims.
Direct deposits from the account of either Mr I or Mr J to their father’s mortgage or savings account would be a simple matter to prove. That evidence, if it existed, was not tendered and this lack of corroborative evidence also causes me to have doubts as to the evidence of the alleged loans.
It is necessary for the husband to put the best evidence to explain or establish the relevant facts. He failed to do so. Given the absence of any corroborative evidence I am not satisfied as to the existence of the alleged loans, and I do not accept, on the balance of probabilities, the existence of the alleged loans from his sons.
Second mortgage and guarantee over Town TT for the benefit of Mr I
At the time of the final hearing, the husband asserted that Mr I’s property at AC Street, Town UU (“the Town UU property”) was mortgaged to the Town TT property to the amount of $125,000.00. There was no further evidence of this available at that time. The evidence of the wife was that she and the husband were guarantors of a loan taken out by Mr I at the time he purchased his property at Town UU in around 2017, and that the guarantee was at that time for the sum of $80,000.00.
On 6 June 2023, the husband filed an Application in a Proceeding seeking that the proceeds of sale of the Town TT property be applied to the discharge of the mortgage to Westpac Banking Corporation, being the mortgage secured against the Town TT property to finance Mr I’s purchase of his property at Town UU.
This Application was followed by a further Application in a Proceeding on 23 June 2023 seeking leave to reopen the final hearing and admit evidence relevant to the second mortgage.
The proceedings were re-opened. Evidence was admitted from Mr I, the husband, and the paternal aunt providing evidence of a mortgage and guarantee being taken out in late 2017 with the consent of the parties, to assist Mr I to purchase his Town UU property, and of the current liability and arrears of Mr I.
The wife’s evidence was that the husband agreed to be a guarantor for Mr I’s loan to assist him to purchase the Town UU property and that the guarantee was limited to the amount of $126,300.00.
No party provided evidence to enable me to make a finding as to the extent of the current liability. It would appear the liability is most likely to be $126,300.00, as that is the extent of the guarantee that both the husband and wife contended to be the liability. It is possible that it may be as much as the whole mortgage which was $446,614.17 at 1 May 2023 as asserted by Mr I. There was no evidence of any agreements or conversations at the time of the assistance being provided by way of a gift or a loan or that it was intended to be characterised in any particular way.
No party provided evidence from the bank as to the extent of the liability that would crystalise upon the sale of the Town TT property when they had an opportunity to do so. No evidence was before me as to the extent of the liability and the evidence unhelpfully did not include a payout figure. +
Whatever the liability, I find that the parties' joint intention in 2017 was to assist their son in the purchase of his property and to do so they offered the Town TT property as security. To that extent I find on the balance of probabilities it is a joint liability of the parties that was incurred by them during their relationship.
AB Council Rates
The husband has resided in the Town TT property since January 2019. He has had sole use and occupation of the home since that time. The husband has had the obligation of maintenance and upkeep of the property but also has had the benefit of the use of the property. His adult sons have stayed with him there from time to time and store their own heavy machinery there. In circumstances where it was an uncontested fact that the mortgage has not decreased in that time, the husband should not have the use and benefit of the property without meeting relevant expenses. It would be not be just and equitable for the wife to meet these costs in these circumstances. Accordingly, the husband will meet the outstanding council rates of $8,185.00 and I order that sum be met by the husband from his share of the net sale proceeds.
Alleged Assets
Farm equipment and contents of the shed; furniture and chattels at Town TT property
There was no evidence as to the identification of the farm equipment or contents of the shed at the Town TT property. Equally there was no evidence as to the contents of the Town TT property. The husband’s evidence was that the farm equipment outside the shed belonged to Mr I. The husband gave evidence that he did not even have a ride-on mower, but rather that he used a push mower.
In the absence of any evidence as to the existence of or identification of equipment it is not possible to make findings about unidentified property or to meaningfully order the division of such items.
The evidence that was before me is as follows:
(a)The wife’s affidavit evidence states only that there is a “significant” amount of tools and farm equipment to be valued and/or sold;
(b)The husband’s financial statement is silent as to farm equipment or machinery, as is his balance sheet;
(c)The wife’s financial statement values 50% of the farm equipment at the Town TT property to be $15,000.00; and
(d)In cross-examination the husband stated that he owned only a push mower and that any other machinery was owned by Mr I.
Despite asserting the existence of machinery and tools the wife provided no evidence of the identity or value of the alleged equipment or machinery other than her estimate of its value of $30,000.00. In the absence of any evidence, I am unable to find on the balance of probabilities that the husband has assets in his possession by way of farm equipment, or machinery, or indeed ascribe to any such property any value. There simply is no evidence to support the contention and I propose to exclude the item of machinery, tools and equipment from the balance sheet.
The wife seeks an order that the wife's photo albums stored in Mr I's bedroom be delivered to her solicitor's office. There was no evidence called by the husband in response to the order she sought nor was it put to the wife that the photo albums were not stored as she alleged. Accordingly, I order the husband deliver the albums to the wife's legal representative within 7 days for the purpose of making copies, following which they may be collected by the husband for him to retain.
Motor Vehicle 3, trailer, Motor Vehicle 1 and Motor Vehicle 2
The husband gave evidence in cross examination that Motor Vehicle 3 is currently not roadworthy and that he is in dispute with the insurance company about whether it is a write off. There was no evidence as to the insured value or any residual value. It was not referred to in any evidence before the court other than in his financial statement where he deposed it had a “nil” value. The trailer remains at the Town TT property in the husband’s possession. I have no evidence of value and can make no finding. In the circumstances I will order that the parties do all things to transfer Motor Vehicle 3 to the husband, as it remains in his possession and appears to be of nominal value.
Similarly, there is no evidence as to the value of Motor Vehicle 1 other than the wife’s financial statement where she deposes to a value of estimate $500.00. I will order that the wife is to retain Motor Vehicle 1 in her possession. There was no evidence as to the location of or the value of Motor Vehicle 2, which also was not referred to in either party’s financial statements. In final submissions it was contended by the husband’s counsel that it was registered to the wife and the husband did not seek to retain it. In the circumstances I order that the parties sign all documents and do all things necessary to forthwith transfer Motor Vehicle 2 to the wife.
Each party was legally represented. They had the opportunity to put admissible evidence as to value before the court. They failed to do so. I propose the exclude both vehicles from the balance sheet.
The value of the assets, as sworn by the parties in their financial statements (as distinct from the figures asserted in the case outline or balance sheet), were as follows:
ASSET WIFE VALUE – FINANCIAL STATEMENT HUSBAND VALUE – FINANCIAL STATEMENT Motor Vehicle 2 N/A Nil Motor Vehicle 1 $500.00 N/A Household contents $1,000.00 Nil Farm equipment $30,000.00 Nil Motor Vehicle 3 N/A N/A Trailer N/A N/A TOTAL $31,500.00 NK
I note that no evidence as to value was relied upon other than as deposed in the filed financial statements.
The wife asserted a value of farm equipment with no valuation or identification of the equipment that was said to exist. The husband disputed the existence of equipment. I cannot be satisfied given the absence of any evidence as to the existence, identity or value of the equipment.
Doing the best I can with assets of a de minimis value, I order that the assets be retained by the party who has possession of them currently and I propose to exclude them from the balance sheet. The order sees the parties retain the items that have had in their possession since separation in 2019. It is in the interests of these parties that orders are made that finalise the dispute. It is in the interests of other litigants that these proceedings are not protracted and do not take up further court time.[5] In the absence of evidence, this is the best that can be done.
[5] Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [114].
Treatment of paid legal fees
The wife claimed that the husband’s legal costs of $49,000.00 should be added back as a notional asset of the parties.
In Omacini & Omacini (2005) 33 Fam LR 134 at paragraph 30, the Full Court identified three categories that have emerged where the Court has determined that it is appropriate to notionally add back an item of expenditure:
(a)“Where the parties have expended money on legal fees: see DJM v JLM (1998) FLC 92-816 at 85,262”;
(b)“Where there has been a premature distribution of matrimonial assets: see Townsend & Townsend (1995) FLC 92-569 at 81,654”; and
(c)Citing Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644:
(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
The fact that the husband has had the capacity to meet and pay a significant proportion of his legal fees is something that the wife contends should require an addback of those funds. In some circumstances paid legal fees may, depending on the facts, require those funds to be added back. In the decision of Trevi, it is accepted that if a party is paying legal fees from joint assets, it means the other party is contributing to those legal fees. Such a contribution to legal fees is inconsistent with the starting point created by s 117(1) that each party should meet their own costs.
In the decision of Chorn, the Full Court, in the well-known guidelines, said:
56. In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57. If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58. If funds used to pay legal fees have been generated by a party post separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post separation income or acquisitions.
In Trevi, the Full Court at paragraphs 41 and 42 referred to these passages from Chorn and the potential injustice and inequities that can occur by a strict adherence to the "source of funds" distinction as a guideline informing the discretion rather than determining it. Those paragraphs state:
41.The passages from Chorn, quoted above, draw a distinction between legal costs met from property that would otherwise be available at trial and legal costs met from funds "generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance)". The proposition there advanced, that such expenditure "would generally not be added back", also needs to be seen as a guideline informing the relevant discretion rather than determining it. A further distinction is suggested in Chorn between funds generated in that manner and "[f]unds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement".
42.The latter suggestion recognises the discretion inherent in the task and also, perhaps, that in the particular circumstances of a case, adding back sums generated post-separation in the different manners suggested might create injustice as much as it might cure it.
The Costs Notice filed by the husband was unhelpful in that it did not identify a loan or indicate the source of the funds, and merely says “privately funded.” The husband has had the capacity to meet $49,000.00 of fees. There is no evidence from him as to payment of fees although there is evidence, in the affidavit of his son Mr J filed 2 May 2023, of lending his father money because there were “so many legal fees that the mortgage was getting behind.”
There is no evidence before me of any savings that the parties had prior to separation or any other asset that has been disposed of by the husband to meet his legal costs that would otherwise be in the asset pool.
I note that the husband’s paid legal costs were as set out in the Costs Notice of approximately $49,000.00 prior to the first day of trial. The wife’s costs were $223,278.48, of which, $730.00 had been paid.
As is clear from the authorities, when considering whether or not to add back paid legal fees, “source of funds” should be subservient to the overall discretionary consideration of the interests of justice in the circumstances of a particular case.
There was no evidence before me of the existence of assets or disposition of assets of the parties by the husband to meet legal costs and there was no cross examination of the husband as to the source of funds that were paid to his lawyers.
Apart from statements in the parties’ Cost Notices which were admitted without objection, the husband did not provide any admissible evidence as to the source of funds for payment of the $49,000.00 paid by him for legal fees. There was no evidence that the funds used to pay legal costs were generated from assets or a business to which the wife had made a significant contribution or has an actual legal entitlement.
Rule 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) provides that each party to a case in financial proceedings has a duty to the court, and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner, and this would include banking documents relevant to the transfer of funds for the payment of legal costs.
Whilst the onus to make full and frank disclosure does not move from the party who is responsible to make it, where there is no agreement to add back paid legal fees, and in circumstances where no documents are provided to establish the source of funds for the payment of legal fees, a request for disclosure of those sums could have been made.
Each party asserted the other’s disclosure had been inadequate and there had been an Application in a Proceeding filed by the husband on 10 May 2023 which sought disclosure. However, no party sought orders specifically about the source of funds for the other party’s legal costs.
Accordingly, as became a theme in this matter, I am faced with a lack of evidence from which I can discern a clear picture of where the funds used to pay the husband’s lawyer were from. There was no contention made and there was no evidence that assets had been disposed of or savings used. The husband’s evidence was that he had been working, although he no longer is. It is open for me to infer that his income was used to meet his legal costs.
The difficulty is, without evidence, I am unable to undertake any examination that would permit me to find on the balance of probabilities that the legal fees were paid from a source that would otherwise be available for division between the parties, or from any other source that may be relevant to exercising a discretion to add back the sums expended.
I accept that the amount of $49,000.00 is not an insignificant sum. However, in the circumstances of this asset pool, I find that it is a sum that is not so significant that it could cause an injustice in not adding it back to the pool.
The wife was not able to work due to her period of incarceration. Her fees have been deferred. It is not in contest that the wife ceased employment and thereby had an incapacity to meet her legal costs from income, in circumstances where she was incarcerated for the serious criminal matter she pleaded guilty to.
For these reasons I decline to add back the legal costs as a notional asset.
FINDINGS AS TO THE PARTIES’ ASSETS AND LIABILITIES
At the conclusion of the trial, the parties agreed to rely on a joint valuation of Mr ZZ which was admitted into evidence. In reality, the only asset of significance was the Town TT property with an agreed value of $1,750,000.00 subject to an agreed mortgage of $484,008.00 with the ANZ bank and an ANZ personal loan with an agreed balance of $30,220.00. The net value of the property is $1,235,772.00 plus the agreed superannuation total of $31,027.00, being a total pool of $1,266,799.00 less the joint liability arising from the second mortgage, which both parties submitted was likely to be $126,300.00 but may be a higher amount.
The areas of dispute that remained were the value of several motor vehicles, unspecified farm equipment, unspecified shed contents, contents of the Town TT property, disputed unsecured alleged liabilities owed to Mr I and Mr J and an add back for legal fees. For the reasons articulated above I cannot be satisfied on the evidence as to the value of the assets or liabilities in dispute.
It follows from the above findings that the pool of assets, liabilities and superannuation that I am able to identify and value that are available for adjustment is as follows:
Ownership Description Value ASSETS 1. Husband SS Street Town TT $1,750,000.00 2. Husband Motor Vehicle 3 and trailer Nominal 3. Wife Volvo Nominal Total: $1,750,000 LIABILITIES 4. Husband ANZ mortgage $484,008.00 5. Wife ANZ personal loan $30,220.00 6. Joint Mortgage and guarantee Westpac $126,300.00E Total: $640,528.00 SUPERANNUATION 7. Husband Superannuation Fund 1 $22,037.00 8. Husband Superannuation Fund 2 $4,000.00 9. Husband Superannuation Fund 3 $4,215.00 10. Wife Superannuation Fund 4 $775.00 Total: $31,027.00 Net Assets: $1,140,499.00
The net assets are to be calculated, including superannuation, but excluding the rates to be paid by the husband, less any joint obligation arising from the ANZ mortgage, ANZ personal loan and Westpac mortgage and guarantee.
There are several unknown figures of the sale price, sales costs and extent of the additional liability arising from the guarantee and second mortgage with Westpac. The liability arising from the ANZ mortgage and personal loan are known to the parties being approximately $514,228.00. If the extent of the joint liability is limited to $126,300.00 the net pool will be approximately $1.1 million dollars. If the extent of the joint liability is as high as asserted by Mr I to be almost $450,000.00 the net pool will be approximately $815,000.00. In making the orders for property adjustment I have taken into consideration the uncertainty as to the extent of the additional liability, and the possibility the net pool may be as low as $815,000.00.
CONTRIBUTIONS
Having concluded it would be just and equitable to adjust the parties' property interests, it is necessary to now consider their respective contributions, as required by the Act.
The parties agreed that contributions assessment in the circumstances of this case were equal. This finding is supported on the evidence, and I make that finding for the reasons set out herein.
This is a long marriage with five children, two of whom are children, are under the age of 18 and have special needs. Both parties worked from time to time and bought and sold properties, and at other times rented properties in which they resided. It is an agreed fact that the husband had $50,000.00 at the commencement of the relationship, part of which was used toward a deposit on the first property the parties bought, being AD Street, Town TT (“the AD Street property”), which was later sold to pay for legal fees for criminal proceedings.
The wife sets out her evidence, which is not in contest, that the parties commenced a relationship when she was age 17 and the husband was age 29, and at that time the parties were both employed.
The parties ultimately had five children, the youngest two of whom have special needs. The wife gave evidence, which was not challenged and I accept, that she arranged for and co‑ordinated the NDIS and other assistance for the younger boys, and that, while she was incarcerated in 2022 and 2023, their sister Ms W took on this role. The youngest child, Y, has lived with his father since December 2022 and, pursuant to the consent orders made in respect of parenting, will continue to live with his father in accordance with his wishes. The second youngest child, X, continues to live with his mother.
The wife accepted that the husband had $50,000.00 of shares at commencement of their relationship which were sold and used toward the purchase of the AD Street property and the purchase of a vehicle. There was no challenge to the wife’s evidence about the purchase of the Suburb AE property in 2002 and its sale. It was also not contested that of the $500,000.00 inheritance received by the husband that $125,000.00 was used to purchase the Town TT property in 2012.
The wife’s evidence was that she received an inheritance of $178,752.59 in mid-2018.
In those circumstances the agreed finding of equal contributions is supported on the evidence, and I so find.
SECTION 75(2) FACTORS
The husband is 55 years of age and is 12 years older than the wife. He has previously worked as a transport worker and holds a relevant licence and other qualifications. He gave evidence that he cannot earn as much as he previously did, due to a change in demand for his skill. He gave evidence that he could, as a transport worker, earn $800.00 per week. I find that the husband can earn at least that amount. I find that the husband, being 12 years older than the wife, has a period of time where he can continue to earn, that is not as long as the wife. This is a relevant consideration.
The husband has the primary, and likely sole care, of the parties’ youngest child Y who is 13 years of age and who has special needs. Y receives some assistance through NDIS. The obligation to care for Y, who is only 13 years of age, is also a relevant consideration to which I give weight.
The husband’s contention is that he has some health issues that impact his future earning capacity. There was no evidence filed or relied upon as to the nature or extent of his alleged health issues. I accept that there was some information that the day prior to the first day of trial, the husband’s counsel advised the Court that the husband had been admitted and then discharged from the emergency department at AF Hospital. No medical certificate or report was produced to the court.
The husband’s counsel referred, in submissions, to a psychologist report which did not form part of the evidence before me. Counsel also referred to a previously filed affidavit in the interim proceedings which she contended referred to the husband’s health. These matters were not before me. Counsel did not seek to re-open the hearing to call evidence as to health issues. Directions had been made for the filing of evidence relied upon in these proceedings. An extension of time for the filing of evidence was granted. No evidence relevant to the husband’s health was filed and accordingly I give no weight to the submission about the health of the husband as a relevant s 75(2) factor in the absence of any admissible, relevant, and probative evidence.
The husband did not contend that, other than the matters identified above, there were any other factors that would be relevant to adjustment. It was his counsel’s submission that an appropriate adjustment in the circumstances of this case, by reference to the relevant factors was 60 per cent in his favour.
The wife is 42 years of age and is 12 years younger than the husband. She has previously worked as a transport worker. Since separation she held various employed positions until she was imprisoned. I find that she has an earning capacity, as she herself deposed in her evidence. The wife contended that I should find on the evidence that the husband has a superior earning capacity than the wife. I am not satisfied on the balance of probabilities that is the case. The husband had, in the past, earnings as set out in his tax returns that were Exhibits 31 – 33. However, he gave evidence that the opportunities to earn such income, due to overtime that then applied, no longer existed. I accept this evidence. He is not currently employed.
The wife has a longer earning future than the husband by reason of her younger age. This is a relevant consideration.
The wife has the primary care of the parties’ second youngest child X who is 15 years of age and who has special needs. X receives some assistance through NDIS. The obligation to care for X, is also a relevant consideration to which I give some weight.
The wife gave evidence that she had a period of hospitalisation in the AG Hospital mental health unit from mid-2021. Following her admission and follow-up counselling, the wife’s evidence is that she has not experienced another mental health episode. Following the wife’s incarceration (referred to below), she continues to access counselling services through Corrective Services.
The wife was convicted of an offence, with the victim being the husband. I accept this is a very serious and concerning matter that reflects badly on the wife and her attitude to the husband, but do not consider this a relevant factor. She pleaded guilty and was sentenced to a period in custody. She was released in early 2023.
The wife’s evidence is she suffers from a mental health condition and social anxiety and takes one anti‑anxiety tablet per day and has done so since mid-2021. She did not file any evidence from any treatment providers as to what, if any, impact her mental health condition and social anxiety has on her earning capacity. Accordingly, I make no finding in relation to this matter insofar as it relates to earning capacity and give little weight to it. I note, however, the existence of the wife’s health issues as deposed by her.
The wife’s evidence was that pre-separation she had been employed as a transport worker but due to trauma she detailed in her affidavit, she is unable to return to this role. Since separation she held various employed positions in the fields mentioned above, until she was imprisoned. Her income from these endeavours was not in evidence, however, from the husband’s tax records, the wife’s income from 2016-2018 was less than the husband. It is also notable that at that time she had the care of her two youngest children who were still of primary school age. Her evidence is that she did not seek employment following her release due to this trial but that she intends to find employment after the hearing. I accept her evidence that she is capable of employment and will seek to find employment as indicated.
I do not find on the evidence on the balance of probabilities that either party has a superior earning capacity. I find on the evidence of the parties that each has a capacity for employment should they wish to exercise it. I also note the wife’s evidence in her Financial Statement that she resides with her partner, Mr AH, and that he assists her with living expenses each week and that he had bought a laptop computer for X.
ADJUSTMENT
In assessing all of the factors referred to above, I am satisfied that it is appropriate for a modest adjustment in favour of the husband of 52.5 per cent of the pool arising from the factors contained in s 79(4)(d)–(g) of the Act.
Neither party sought a superannuation splitting order and accordingly I will order that each party retain their superannuation interests and that the pool is dealt with as one pool.
In assessing that outcome, I note that the net pool as referred to above will comprise of the net sales proceeds and a modest amount of superannuation. The adjustment of 47.5 per cent to the wife will amount to her retaining her superannuation in the sum of $775.00 and payment of the balance as cash. The husband will receive his superannuation and the balance to achieve an overall result of 52.5 per cent. Whether the second mortgage is $126,300.00 or $446,614.17 or some figure in between is unknown, however the real impact of the differential as between the parties on either figure, is one that I consider to be just and equitable in the circumstances of this case.
In addition, the husband is required to pay the wife the sums of $4,397.10 and $7,500.00 pursuant to costs orders made in this matter and the husband will indemnify the wife in relation to the arrears of rates owed to AB Council.
There is no evidence that either party is currently employed or has capacity to refinance and retain the Town TT property, accordingly I order that the property be sold.
I am satisfied that in all of the circumstances of this case that the outcome is just and equitable.
CREDIT
The date of separation is in dispute, the wife contending that the parties separated in 2019 and the husband contending that the parties separated in 2006. As such, it is necessary to address the assertions of the parties as to the events that occurred during their relationship and after separation, particularly to examine each parties’ credit. I find that the parties relationship continued, albeit with periods of separation as contended by the wife, until their final separation in 2019, for the reasons that follow.
The allegations of family violence
The wife gave specific evidence in relation to family violence. At paragraph 47 of her affidavit filed 26 April 2023 she gave evidence of the following instances of family violence:
(a)In 2001 when she was pregnant with Ms W and the husband dragged her through broken glass by her hair;
(b)In 2003 an incident involving holding a weapon to the side of her head and resulted in a police siege and criminal charges;
(c)In 2017 an incident of assault involving a wooden coat hanger in 2017;
(d)In 2018 where the family’s pet, was deliberately killed when hit by the vehicle being driven by the husband; and
(e)In 2018 where wife alleges the husband put his hand around her throat and said he needed to kill something and proceeded to kill several animals owned by the family.
The husband denies the incidents involving the animals in 2018. His evidence is silent as to the other allegations made by the wife.
Ms W gave evidence in support of the wife that the husband would spend the evenings, outside the children’s rooms, in the children’s rooms, or walking up and down the hallways “taunting everyone.” She also gave evidence of an incident where the husband assaulted her by shoving her into a television. I accept her evidence.
Police were called on a number of occasions and it is the mother’s evidence that Apprehended Domestic Violence Orders were taken out at various times, protecting the parties from each other.
The evidence supports, and I find, there were incidents of family violence between the parties as deposed.
The date of separation
The husband asserted the date of final separation was 2006. The Town TT property was purchased in 2012. There was no dispute that it was purchased in the sole name of the husband.
At paragraph 2 of the husband’s affidavit filed 5 May 2023 he deposes “There are five children to our union. Three were born whilst we were married and two were born after separation.”
Other than his assertion, there is very little independent evidence to support the husband’s contention as to the date of separation. He relied upon the Child Support records he produced to support his contention as to the date of separation, which as referred to below do not assist his case. He also relied on evidence from his adult sons and the wife’s sister.
Both adult sons, Mr I and Mr J, gave evidence that their mother did not live with them at the Town TT property.
Mr I gave evidence of an absent mother who, after 2011, did not live with the family but “would visit” other than when she moved into the granny flat in late2018 “while she was waiting for her property to be built” and that she lived at the Town TT property “from time to time” before late 2018. He also said the wife was not really living at the property although he knew she was “renting with us” in the granny flat at the end of 2016.
In cross examination Mr I’s evidence was challenged. For example, he was challenged about the fact of the mother living at Town TT and driving him to his workplace prior to him being licenced, which he accepted happened for a short time. I found his evidence to be confusing and inconsistent. He would go off on tangents and not answer questions directly. I place little weight on his evidence.
Mr J’s evidence during cross-examination was that the wife did not ever live at the Town TT property, apart from a period of 6 months when she was “renting” in 2013. Mr J’s affidavit evidence was inconsistent with his oral evidence about the period of time the wife was living at the Town TT property. He gave evidence that she had not lived there apart from a few months from late 2018, but in oral evidence he said she had not lived there at all and only stayed in 2016. I place little weight on this evidence.
The wife’s sister’s evidence was vague and confusing. I did not find her to be a good historian and put little weight on her evidence.
The wife’s evidence was that there were specific periods of separation during the relationship, following incidents of family violence. Specifically, those periods were;
(a)In 2001 while pregnant with Ms W for 6 months, during which time she received parenting payment from Centrelink;[6]
(b)In 2007 following an assault on the wife by the husband where he was charged and moved out of the home owned by Mr AJ for a period of 3 months;[7] and
(c)In 2010 following an assault on Ms W where the wife and five children moved into wife’s grandmother’s home in Town AK and several months later parties reconciled and the husband moved into that property.[8]
[6] Affidavit of Ms Daeger filed 26 April 2023 at paragraph 165.
[7] Affidavit of Ms Daeger filed 26 April 2023 at paragraph 166.
[8] Affidavit of Ms Daeger filed 26 April 2023 at paragraph 167.
The wife’s evidence was that there were other similar separations during periods when AVOs were in force, during which the husband would reside with family members and would stop paying the mortgage and other outgoings.[9] Ms W gave evidence that “all seven” of the family would live together “for the majority of the time”, but not for the periods where there was an AVO.
[9] Affidavit of Ms Daeger filed 26 April 2023 at paragraph 169 – 170.
Ms W gave evidence of many incidents of family violence that occurred when she was a child and gave evidence that she left the home after an incident of family violence between her and her father in 2018. She said that she lived with her mother and brothers after separation. She gives no specific evidence in relation to periods of separation.
The alleged criminal history, NSW Police records and AVO applications were not in evidence before me and accordingly there were no contemporaneous records which may have corroborated either parties’ versions as to separation dates.
Other independent evidence
The independent evidence is supportive of the wife’s narrative as to the date of separation.
X’s birth certificate was tendered in evidence at Exhibit 38. It showed both the parents as the informants and that they resided AL Street, Town AM, which is the address the wife says the parties lived at from early 2007 until the end of 2008 whilst the husband was working on the property.[10] The wife’s evidence, not in contest, was that the husband attended the birth.
[10] Affidavit of Ms Daeger filed 26 April 2023 at paragraph 14.
Y’s birth certificate was also tendered in evidence. It also shows both parents as informants. The address listed was AN Street, Town AK. This address is where the wife says the parties lived from around late 2008 until mid-2011.[11]
[11] Affidavit of Ms Daeger filed 26 April 2023 at paragraph 16.
The details support the wife’s contention that the parties were still in a relationship after 2006, in both 2007 and 2010.
The taxation records of the husband were marked as Exhibits 31, 32 and 33. These records show that in 2016, 2017 and 2018 the husband declared his spouse’s details as the wife, and included the wife’s income details each year. It follows that, if the parties were not in a relationship, these details would not have been provided by the parties and would not have been included by the parties’ accountant. This evidence is persuasive and I give it significant weight in relation to the fact of a relationship between the parties at that time.
The wife also relied on various items of mail addressed to the wife being sent to the Town TT property as evidence they were living there together. The documents relied upon were:
(a)Electricity bill for 24 May 2016 – 16 August 2016, Exhibit 14;
(b)Quotation from AP Company dated 20 December 2016, Exhibit 15;
(c)Customer Order from BC Company dated 19 December 2016, Exhibit 16;
(d)AQ Company tax invoice dated 9 December 2016, Exhibit 17;
(e)AR Company tax invoice/quotation dated 21 December 2016, Exhibit 18;
(f)AS Company tax invoice dated 23 January 2017, Exhibit 19;
(g)AT Company tax invoice dated 19 January 2017, Exhibit 20;
(h)Letter from Mastercard dated 8 January 2017, Exhibit 21;
(i)AU Company tax invoice dated 23 January 2017, Exhibit 22;
(j)Booking confirmation AV Hotel dated 3 January 2017, Exhibit 23;
(k)Reservation confirmation AW Venue dated 30 November 2016, Exhibit 24;
(l)AX Company invoice dated 15 August 2018, Exhibit 25;
(m)AY Finance statement for 23 July 2018 to 22 August 2018, Exhibit 26;
(n)Mastercard statement for 6 December 2017 to 5 January 2018, Exhibit 27;
(o)AZ Company tax invoice dated 31 July 2018, Exhibit 29;
(p)BA Company contract of sale and receipt dated 15 August 2018, Exhibit 30;
(q)NDIS letter dated 25 September 2018, Exhibit 35;
(r)NDIS letter dated 22 October 2018, Exhibit 36; and
(s)Medicare letter dated 3 August 2018, Exhibit 37.
These documents are all addressed either to the wife, Ms Daeger, or to both the husband and the wife, as Mr and Ms Daeger. The postal address on all of these documents is listed as SS Street, Town TT. Where applicable, the site or delivery address contained within these documents is listed as SS Street, Town TT.
As referred to above, the husband relied upon the records of Child Support Agency (“CSA”) correspondence to support his contention that the parties separated in 2006. Those records, at Exhibit 13, were:
(a)Letter to the husband from Child Support Regional Registrar dated 23 June 2005;
(b)Letter to the husband ‘Child Support Assessment Application Acceptance’ dated 9 July 2007;
(c)Letter to the wife ‘New Income Amount’ dated 6 March 2012;
(d)Letter to the husband ‘Change to your Child Support records’ dated 26 August 2014;
(e)Letter to the husband ‘New Child Support Period’ dated 2 August 2015; and
(f)Letter to the husband ‘New Income Amount’ dated 25 August 2016.
This evidence supports a finding that the parties had periods of separation and during those times child support was sought by the wife. The letter dated 6 March 2012 records “Your case is currently registered as private collect. This means [Mr Daeger] is to make the payments directly to you.” The letters dated 26 August 2014 and 2 August 2015 both sent to the husband at a PO Box in Town U, detail care percentage. For example, in the 2015 letter it details that for the five children, “[Ms Daeger’s] care percentage is 100% and her cost percentage is 100%” and for the five children “[Mr Daeger’s] care percentage is 0% and his cost percentage is 0%.” That same letter directs “To ensure that your child support assessment reflects your current situation, you need to tell CSA within 14 days of any changes in your circumstances, such as care arrangements.”
These assessments are not consistent with the husband’s narrative that the children lived with him or Mr I’s narrative that they lived with the parties half of the time. They are consistent with the wife’s evidence that the children lived with her during periods of separation following incidents of family violence. I accept her evidence.
The CSA records are consistent with, and I find, that during periods of separation when the children lived with their mother, she sought child support from the father. It is not supported on the evidence that the children lived with the father without the mother (as he, Mr I and Mr J contended) and that the father paid child support to the mother as he contended. The CSA records are consistent with the fact that there were a number of periods of separation, including periods between 2014 and 2016.
The wife’s evidence was that she applied for child support at the times of the various separations. She also gave evidence that the husband had not paid any child support until after the 2019 separation. Her evidence was the husband has arrears of $27,487.00 and that until recently he has not paid child support, even when it was assessed.
The husband contended that he had paid child support since 2002. In answer to a call for the records he stated he had to support his contention, the documents produced were screenshots of the payments of $52.77 per fortnight from 14 June 2022, 27 June 2022, 11 July 2022, 26 July 2022, 8 August 2022 and 3 October 2022. This evidence supports the wife’s narrative as to non-payment of child support until very recently.
It is an agreed fact that the wife received an inheritance of $178,752.59 in 2018. The wife contends that she used those funds to renovate the Town TT property. In support of that contention, various quotes, invoices, and receipts were tendered into evidence. Curiously the wife did not submit any of her bank statements showing transfers or withdrawals in payment of the renovations. There is no evidence that she used the entirety of those funds on the renovations.
The husband suggested in cross examination of the wife that she had expended the funds on cosmetic and other surgery. The wife agreed in cross examination that she had undergone surgery. There was no evidence as to the costs she expended on the surgery.
The evidence of renovation expenditure from the wife included:
(a)A quote for services from AP Company in December 2016 in the amount of $3,355.00 (Exhibit 15);
(b)A customer order from BC Company, paid in full, dated December 2016 in the amount of $5,907.71 (Exhibit 16);
(c)An invoice from AQ Company for goods dated December 2016 (Exhibit 17);
(d)An invoice from AR Company for goods dated December 2016 in the amount of $5,190.00 (Exhibit 18);
(e)An invoice from AS Company for the supply and install of a ducted air conditioning system dated January 2017 in the amount of $9,170.00 (Exhibit 19);
(f)An invoice from AT Company for goods dated January 2017 in the amount of $5,110.00 (Exhibit 20);
(g)An invoice from AU Company for goods and services dated January 2017 in the amount of $3,401.20 (Exhibit 22), and receipts from AU Company for $500.00 each labelled ‘part payment renovation’ dated in late 2017 (Exhibit 34); and
(h)An invoice from AX Company for unspecified ‘construction’ dated August 2018 in the amount of $805.00 (Exhibit 25).
It was not disputed that the wife’s uncle undertook renovations at the home. There were receipts for payments paid by the wife to AU Company tendered into evidence at Exhibit 34 dated 29 July 2017 for $500.00, 2 September 2017 for $500.00, 21 October (year not identified) and 17 November 2017 for $500.00 each and all labelled with words to the effect of “part payment renovation”.
The fact of the renovations taking place is also supported by the valuation provided and tendered into evidence as Exhibit D. The valuation notes improvements of the house being; “new bathroom with enclosed shower, vanity and drawers missing” and “ducted air conditioning”.
The husband in cross examination gave evidence that there was no air conditioning at the Town TT property. He then gave evidence that there was ducting but no motor and that he would have to “find out where the motor was.” The valuation carried out during the trial records ducted air conditioning as an improvement. The invoice at Exhibit 19 dated January 2017 is for the supply and install of ducted air conditioning and cost $9,170.00. The husband has lived at that property since the parties separated in 2019. I do not accept the husband’s evidence that there was no air-conditioning unit in light of the independent evidence of installation and of the valuer’s record of the ducted air conditioning as an improvement.
There is no evidence as to the amount from the wife’s inheritance that was utilised on the renovations. However, the evidence supports a finding on the balance of probabilities that the wife was involved in the purchase of various items for the purpose of home renovations and made part payments for renovations carried out at Town TT and I so find.
The husband contended that the items purchased by the wife were purchased to renovate Mr I’s home. The invoices and receipts evidence that the majority of the quotes and purchases took place throughout December 2016 and January 2017. Mr I’s home, on his evidence, was purchased in early 2018, or at the very earliest after his 18th birthday, so after 2017. Given the timing of the purchases and the timing of the purchase of Mr I’s property, I do not accept the husband’s evidence that the purchases were for Mr I’s home renovations. I accept that the wife made purchases and ordered items for the renovation of the Town TT property.
The totality of the evidence does not support the husband’s contention as to separation in 2006. The independent source documents corroborate the wife’s evidence that the parties were in a relationship, although had periods of separation after which they reconciled. The child support records also support the wife’s contention that there were periods of separation following which she sought child support but during such periods that the children resided with her.
Based on the evidence as outlined above, I do not accept the husband’s evidence that the parties separated in 2006. It is implausible and incredible that the husband contends that, although separated in 2006, the wife would spend time ordering items, obtaining quotations and making part payments towards the renovations from her inheritance, or renovating a house in which, on his evidence, she did not live.
I find, based on the evidence, that the parties had multiple periods of separation, but that they reconciled and resumed their relationship until the final separation in January 2019.
The granny flat
The husband gave evidence that the wife left the home in 2006 but that he allowed her to return to stay in the granny flat in 2018 for several months while she was purchasing a property in City WW NSW. No evidence was called in support of his assertion that she purchased a property in City WW NSW. The husband did not subpoena the solicitor he contended acted for the wife on the purchase. He tendered into evidence, marked as Exhibit 2, a photograph of what was described by him as the granny flat. The photograph was described by the wife as the machinery shed. Her evidence is that there was never a granny flat but a shed.
The husband gave evidence that the granny flat was demolished to provide space for equipment he had arranged for a party. The husband’s evidence was that the granny flat was removed prior to the party. The wife left in January 2019. The husband’s evidence at paragraph 5 of his affidavit was that “I let her come back in [late] 2018 temporarily. The AM was staying in the granny flat.” His evidence in cross examination was that the granny flat was demolished to allow more room for the backyard, and that “when we got closer to the [party] we went full steam ahead and got rid of all of it”. Mr I gave evidence the granny flat was demolished around the time of the party and agreed it was demolished in 2018.
Mr I gave evidence that his mother lived in the “top shed” but then said it was “a shed/granny flat” and described it as “half and half.”
Mr J also gave evidence that there was a granny flat on the property. He also gave evidence that the wife did not live at the property at all although she “rented there” for 6 months during 2013 and that the granny flat was demolished in 2016. His evidence was inconsistent with the evidence of the husband, and his brother, Mr I.
Ms A, the wife’s sister, gave evidence of the existence of the granny flat being at least 8 metres away from the main house on the property up an embankment, which looked like a shed.
The wife gave evidence that the building that appears in the aerial Google maps image of the property next to the house was a “machinery shed.” When it was put to her by the husband’s counsel that she slept in that building, the wife’s evidence was that she “never slept in there at all…it had dirt floors, broken up concrete in it, not insulated at all, nobody could even live in it.”
I do not accept the evidence of the husband or his witnesses that the wife lived in the granny flat or shed. The timing of the wife allegedly staying there is at odds with his own evidence and that of Mr I, as to the demolition of the granny flat/shed in anticipation of the party in 2018.
The renovations undertaken at SS Street, Town TT.
It is agreed that renovations were undertaken on the Town TT property. Both parties, and Mr I and Mr J, gave evidence about the renovations. The valuation also refers to renovations undertaken.
I find that there is evidence that the wife spent some funds on renovations. The independent evidence supports a finding that she was involved in the ordering, purchase of and deliveries of goods, appliances and services. The receipts and invoices speak for themselves. They are dated during the relevant period. At times they are made out to both the parties. The receipts and invoices, together with the oral evidence of all of the parties, is overwhelmingly in support of a finding that renovations were undertaken in the period from 2016 until 2018 and that the wife was involved in the renovations.
I accept that it is implausible that the wife would have received $178,000.00 from an inheritance in 2018, borrowed a further $50,000.00 and would have spent some of those funds on renovations in circumstances where she was not living in the home. Although, I note there is no evidence of bank records which particularised how the inheritance or loan funds were spent, I am satisfied based on the evidence before me that some contribution was made by her in this regard.
The husband gave evidence that he paid for the renovations with cash. I accept the husband also paid for some of the renovations. I note however, there is no evidence by way of bank records from either party in support of their contentions by way of receipts or bank balances, invoices, quotes or other evidence. I do not accept that either party paid for the renovations to the exclusion of the other, given the evidence referred to above.
I find that both parties contributed to the renovations to the Town TT property and that they mostly occurred between 2016 and 2018.
The AVOs and letters to police seeking to withdraw charges
The wife’s evidence is there were periods of separation and periods where AVOs were in place. The husband says, and I accept, that the parties reconciled at times when AVOs were in place.[12] This must objectively be correct as letters the wife wrote (she says under duress from the husband) to drop the charges were written during such periods and where the parties had obviously, and on her evidence, reconciled.
[12] Affidavit of Mr Daeger filed 5 May 2023 at paragraph 9.
That a victim of family violence resiles from the prosecution, particularly when young children are involved, is not uncommon. I make no adverse finding in relation to the wife’s credit in this regard.
The IVF
The wife gave evidence that the parties jointly decided to undergo IVF treatment. Her evidence was that following the finalisation of criminal law “issues” in 2006, the parties decided to have another child through IVF. As a result, X was born in 2007. It is the evidence of both parties that they decided to undergo IVF treatment again to allow X to have a sibling close in age, and Y was born in 2010.[13] The wife in her affidavit gives evidence of the process, of the signing of consents and of the cost of both treatments. The wife gave evidence that the husband was present at the birth of both boys.
[13] Affidavit of Mr Daeger filed 5 May 2023 at paragraph 38; Affidavit of Ms Daeger filed 26 April 2023 at paragraphs 34 and 35.
The husband asserted that he did not provide his consent to the IVF and that the wife’s motivation was to use her pregnancy to keep her out of jail. The assertion that the IVF clinic created an embryo using the husband’s sperm without his consent is unsupported by any evidence and, in the absence of any evidence, is implausible. The contention is unlikely in circumstances where a further child, Y, was born to IVF in 2010, and although the husband asserted a lack of consent in cross examination, his evidence appeared to accept the wife’s contention that the parties did not want X growing up without a near age sibling.
Counsel for the husband contended that the fact of the IVF births was evidence in support of a finding of separation in 2006. I do not accept that submission. The fact of the IVF treatment and births of Y and X supports the wife’s case that the parties remained in a relationship at these times.
CONCLUSION
I have concluded that the parties’ assets and superannuation should be split in such a way as to ensure that the husband receive 52.5 per cent of the total pool (which includes both assets and superannuation). I have also ordered that each party retain their respective superannuation entitlements.
In making the orders for sale and division of the net proceeds I have expressed the amounts to be received in percentage terms to take into account the reality that whatever the single expert opined as to the value of the Town TT property, the actual figure will likely be different due to the unknowns of sales costs and actual sale price. There is also some uncertainty in respect of the final joint liability arising from the second mortgage. If in fact it is a higher liability as contended by Mr I, rather than the $126,300.00 as deposed by the parties, the proceeds for division will be reduced by a further amount of approximately $320,000.00. I have taken into account this possibility and am still of the view that the division proposed and the ultimate outcome is just and equitable, on either scenario.
I will order that the Town TT property be sold and the husband and wife receive amounts necessary to effect the overall percentage adjustment.
I certify that the preceding one hundred and ninety-one (191) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 26 October 2023
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