Deane and Deane

[2017] FCCA 1120

FEDERAL CIRCUIT COURT OF AUSTRALIA

DEANE & DEANE [2017] FCCA 1120

Catchwords:
FAMILY LAW – Alteration of property interests – where both parties unrepresented – where the pool of known assets is very small – where significant concerns about non-disclosure by the Husband – assessment of contribution and future needs – a just and equitable order.

Legislation:

Family Law Act 1975, ss.75, 79, 90MT, 106A

Cases cited:

Bevan & Bevan [2013] FamCAFC 116

Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395

Kowaliw & Kowaliw (1981) FLC 91-092

Stanford & Stanford [2012] HCA 52

Williams & Williams [2007] FamCA 313
Weir & Weir (1993) FLC 92-338
Vass & Vass [2015] FamCAFC 51

Applicant: MS DEANE

Respondent: MR DEANE

File Number: WOC 590 of 2011

Judgment of: Judge Altobelli

Hearing date: 30 March 2017

Date of Last Submission: 30 March 2017

Delivered at: Wollongong

Delivered on: 6 June 2017

REPRESENTATION

The Applicant appeared in person

The Respondent appeared in person

ORDERS

1. Orders (a) to (c) below have effect from the operative time:

   (a)In accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, wherever a splittable payment becomes payable in respect of the Husband’s interest in his (omitted) Superannuation, the Wife is entitled to a base amount in the sum of $86,000 and there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for these Orders.

   (b)Having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of (omitted) Super.

   (c)The operative time for this Order is four (4) business days after the date of service of the Orders on the Trustee.

2. The Husband and the Wife forthwith do all things necessary to cause to be paid to the Wife the entire sale proceeds of any moneys held by them jointly or on their behalf with the (omitted) Bank.

3. In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to s.106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

4. Unless otherwise specified in these Orders:

   (a)Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the banks’ record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof and superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.

   (b)Each party 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.

   (c)Except as provided for in these Orders, each party be and is solely liable for any debt or debts standing in their name to the exclusion of the other party, as at the date of the making of these Orders.

5. Liberty is granted to the parties to re-list the matter on 7 days’ notice by joint application to the Court in Chambers in relation to the implementation and enforcement of these Orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 590 of 2011

MS DEANE

Applicant

And

MR DEANE

Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons for judgment explain the orders the Court has made in the property settlement proceedings between the Applicant Wife and the Respondent Husband. 

Background

1. The Applicant Wife is currently 45 years old, and describes herself as being Centrelink dependent.  The Respondent Husband is 47 years old, and describes himself as unemployed.  They commenced cohabitation in 1992, married in 1996 and separated in 2010, after a period of cohabitation of about 18 years.  The parties have four children aged 20, 16, 13 and 12.  The children live with the Applicant Wife and she claims that the children are dependent on her. 

2. A divorce order was made on 12 October 2011.  This became effective on 13 November 2011.  The Applicant Wife brought the present proceedings on 12 November 2012, shortly before the expiration of the statutory date for the commencement of proceedings. 

3. The proceedings have had a very long genesis.  Until last year, the focus was on the parenting proceeding which was an exceedingly difficult case, but which was ultimately resolved on the basis of Orders made on 7 December 2015.  In these Orders, W and X were to live with their Mother, and she was to have sole parental responsibility in relation to them.  Y was to live with his Father, and the Father have sole parental responsibility in relation to him.  No Order was made in relation to Z, because of his age. 

4. The Order provided that the children spend time with each other as agreed between the parents and as requested by the children from time to time.  The most that could be said about that Order was that it was the closest approximation the Court could achieve to being an Order in the best interests of the children.  For many years, where the children lived seemed to be a moveable feast.  The children experienced developmental challenges, and there were real doubts about the capacity of each parent to provide for these children, though it was not a case where the Department of Family and Community Services was prepared to intervene. 

5. In any event, and whatever the Orders say, the fact is that all the children live with their Mother and, indeed, she has a new child, A, who is two years old, to a subsequent relationship. 

6. The parenting proceedings clearly demonstrated to the Court that the relationship was one characterised by high conflict, non-existent communication, and deeply entrenched mistrust.  Those features permeated the property case. 

7. Both parties represented themselves in the property proceedings, though relied on documents that had been filed by their previous solicitors. The Court must acknowledge that these reasons for judgment represent the best that it could do in the rather difficult circumstances where neither party knew what evidence to adduce in property proceedings, or what to seek to achieve in cross-examination. The Court had no choice but to adopt a quasi-investigative approach and seek to lead the evidence from each party that was relevant to making an order under section 79.

8. Doing the best it can, it seems that the following background facts are relatively uncontentious.  When the parties met in 1992, they had no significant assets.  The Wife was living in rented premises and owned household furniture and appliances.  The Husband was living with his parents.  At the time, he was working for (employer omitted) as a (occupation omitted) and, based on the evidence that he told the Court during the present hearing, it seems as if his contribution to superannuation started at that time. 

9. In any event, during the course of their relationship, and expressed in general terms, the parties seemed to pool their incomes and use it to acquire both personal and real property, and pay the mortgage and usual household expenses.  Whilst the Wife worked from time to time, her predominant role in terms of time was as homemaker and parent. 

10. In 1994, the Wife was injured at work and was awarded compensation of just under $80,000, but, because of applicable thresholds at the time, was ordered to pay legal costs of $120,000.  In any event, by 1996, the parties appeared to have saved $10,000, which they used as the deposit towards the purchase of a house and land package at Property H. 

11. In 1998, they purchased for the Husband to use a Commodore motor vehicle, using lease finance.  In 1999, they sold the Property H property, netting about $40,000, and this was used to purchase property at Property L as tenants in common with the Wife’s parents.  Between 1998 and 2001, the Wife appears to have conducted a (omitted) business which was eventually sold, netting $35,000.  The parties used this to purchase for the Husband a custom-built (omitted) motorbike in kit form for him. 

12. In 2001-2003, the Wife worked for (employer omitted).  In 2002, they purchased a prime mover, which was repaired over time.  In 2003, they sold the Property L property and eventually received $80,000, which, in 2003, was used to buy a motor vehicle, motorbike, and pay out a car loan and other household expenses that they had accumulated by then.  Very little of that money appeared to go into the purchase of a property at Property C, which was the home they owned as at the time of separation.  The house was purchased in the Husband’s name alone, presumably because of the Wife’s bankruptcy.  Over time, they made improvements to the property which was funded through their savings and income. 

13. In all this period, the Husband continued to work as a (occupation omitted).  The Wife performed homemaking, parenting, and part-time work.  In 2004, they purchased a (omitted) model motorcycle for the Husband.  In 2006, a second hand motorcycle was purchased for the children.  In 2008, the Wife was declared bankrupt.  She was discharged, however, in August 2011. 

14. The parties separated in June 2010.  The Wife ceased work.  The Husband continued working.  In 2013, the Wife discovered that the Property C property was on the market for sale.  It was, in fact, eventually sold and what is left of the sale proceeds is kept in a (omitted) Bank controlled moneys account for the benefit of the parties. 

15. By way of further background, between the date of separation and the date that the final orders were made the parenting issues between the parties assumed a great significance.  Child support issues also became significant, particularly from the Wife’s perspective.  In June 2010, the Husband had been assessed to pay $687 per week child support.  In 2011, this was reassessed at $557 per week.  At no time did the Husband pay before January 2012 when he was, in fact, paying $150 per week. 

16. Within a few short months, however, this had diminished to almost nothing and, indeed, it seems common ground that since 2013, the Husband has not been paying any child support whatsoever.  He says that this is because he has not been working and that, in any event, his non-payment of child support has absolutely nothing to do with the fact that he has not seen the children. 

The Orders sought

1. What was abundantly clear to the Court by the time the matter came on for hearing of the property matter on 30 March 2017 is that the respective Applications and Responses filed by the parties bore no resemblance to what they actually wanted.  For that matter, their sworn Financial Statement bore little resemblance to their current reality. 

2. As will be seen, all that seems certain is that the Husband has a superannuation entitlement of about $100,000 of which the Husband says the Wife should receive $20,000.  There is money held at the (omitted) Bank on behalf of the parties in the sum of about $40,000.  The Husband says the Wife should get nothing of that, because it is what he owes on account of his legal fees. 

3. The Wife says that she should receive at least half of the superannuation, all of the moneys in the (omitted) Bank account, and considerably more to account for property that she asserts the Husband had but no longer has (or asserts he no longer has).  She also sought an order that took into account the substantial unpaid child support, as well as an amount to recognise that, in all likelihood, the Husband would never pay child support. 

4. As foreshadowed in these reasons for judgment, deciding this case was certainly not without its challenges.  All the Court can ascertain for certain is that the Husband only wants the Wife to receive $20,000 out of his super, and the Wife wants as much as she can get and certainly no less than all the moneys in the (omitted) Bank account, and at least half of the Husband’s superannuation.  The Court will, under the circumstances, have no alternative but to proceed on that basis. 

The evidence before the Court

1. The material relied in the Wife’s case consisted of:

   a)Amended Initiating Application filed 21 August 2013;

   b)Affidavit of Ms Deane sworn and filed 23 March 2017;

   c)Financial Statement sworn and filed 16 August 2013;

   d)Affidavit of Ms Deane sworn and filed 22 February 2016;

   e)Affidavit of Ms Deane sworn and filed 16 October 2014;

   f)Affidavit of Ms Deane sworn and filed 16 August 2013;

   g)Affidavit of Ms Deane sworn and filed 9 November 2011. 

   h)Case Outline filed 2 September 2013; and

   i)Case Outline filed 4 June 2013.

2. The material relied on by the Husband in his case consisted of the following:

   a)Amended Response to Initiating Application filed 30 January 2013;

   b)Affidavit of Mr Deane sworn 29 January 2013;

   c)Financial Statement sworn 29 January 2013; and

   d)Affidavit of Mr Deane sworn and filed 2 September 2013.

3. The following document was tendered in evidence:

   a)Bundle of documents tendered by the Husband containing copies of:

   i)Orthodontic Treatment Proposal for the child X;

   ii)Emails dated 16 October 2016 between the parties;

   iii)Letter dated 7 August 2013 from Family Conveyancing Practice to the Husband;

   iv)Affidavit of Mr Deane sworn and filed 2 September 2013;

   v)My Credit File of Mr Deane dated 4 October 2011; and

   vi)Copies of bank statements from (omitted) Bank account.

4. Both the Husband and the Wife were sworn in at the commencement of the proceedings.  The Court asked each of them questions to update their respective financial circumstances, as well as to ascertain precisely what they sought and the basis of that.  They were each given the opportunity to ask questions of the other, and to make closing submissions. 

The Applicable Law

1. This is an application under s.79 of the Family Law Act 1975 which relevantly provides:

   Alteration of property interests

   (1)  In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)  in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or

   (b)  in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

   including:

   (c)  an order for a settlement of property in substitution for any interest in the property; and

   (d)  an order requiring:

   (i)  either or both of the parties to the marriage; or

   (ii)  the relevant bankruptcy trustee (if any);

   to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

   (2)    The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

   (4)    In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (a)  the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (b)  the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (c)  the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)  the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)  the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)  any other order made under this Act affecting a party to the marriage or a child of the marriage; and

   (g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

2. Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:

   (2)  The matters to be so taken into account are:

   (a)  the age and state of health of each of the parties; and

   (b)  the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c)  whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

   (d)  commitments of each of the parties that are necessary to enable the party to support:

   (i)  himself or herself; and

   (ii)  a child or another person that the party has a duty to maintain; and

   (e)  the responsibilities of either party to support any other person; and

   (f)  subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)  any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)  any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g)  where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

   (h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (ha)  the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j)  the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k)  the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l)  the need to protect a party who wishes to continue that party's role as a parent; and

   (m)  if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (n)  the terms of any order made or proposed to be made under section 79 in relation to:

   (i)  the property of the parties; or

   (ii)  vested bankruptcy property in relation to a bankrupt party; and

   (naa)  the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

   (i)  a party to the marriage; or

   (ii)  a person who is a party to a de facto relationship with a party to the marriage; or

   (iii)  the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)  vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)  any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (p)   the terms of any financial agreement that is binding on the parties to the marriage; and

   (q)  the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

1. In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395, but on the basis that it is a shorthand distillation of the words of s.79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:

   a)Identify and value the property, liabilities and financial resources of the parties; and

   b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and

   c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and

   d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.

2. The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.79(2), independent of the s.79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.79 of the Act), indicated that they themselves consider it just and equitable that some order be made under s.79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.

3. Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.  This is not inconsistent with step one in Hickey. 

4. A problem that commonly arises, and indeed does arise in this case, relates to property that once existed but no longer does.  This disposed of property may still be significant, however.  As the Full Court said in Bevan, such disposals must be dealt with carefully.  In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it.  It would seem that notionally adding back such property may still be appropriate in some cases.  In Vass & Vass [2015] FamCAFC 51, the Full Court said at [138]:

   There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 – or, more particularly, the decision of the High Court in Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108 – is authority for any necessary contrary solution.

5. A significant issue in this matter was the alleged non-disclosure of the Husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:

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

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

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

The Pool of Assets

1. The challenges of establishing the pool of assets in this matter are formidable.  As it turns out, neither party is a reliable historian.  Perhaps the safest approach for the Court to adopt is to look at the case outline documents that had been filed by the parties, when they were represented, at either interim events, hearings that did not proceed, or submitted for the purposes of the conciliation conference.  The difficulty, of course, is that these documents are almost four years old.

2. In any event, the major asset at the time of separation was the former matrimonial home at Property C.  All that can be said with certainty is that the remaining sale proceeds of that property are presently found in a (omitted) Bank controlled moneys account which has a balance, the Court believes, of about $40,000.  The home was sold for about $415,000 and it seems common ground that the mortgage of about $250,000.  It is not clear, however, what happened to the remaining sale proceeds.  In evidence the Husband, who the Court found generally unreliable in financial matters, explained that household debts were paid.  It is unclear, however, what these debts allegedly were, given that the chronology provided above suggests that the major debts, other than the mortgage, and already been paid by then.  To the extent that the Wife raised as an issue precisely what happened to the sale proceeds other than those presently held by (omitted) Bank, she was well entitled to. 

3. In the Husband’s affidavit of 29 January 2013 he sets out a balance sheet that includes the following other items of property:

   ·Holden Commodore, $1500;

   ·(omitted) Motorbike, $15,000;

   ·home-built motorbike, $5000; and

   ·Kia (omitted), $8000.

4. These are, therefore, items of personal property that the Husband concedes was owned at that time. 

5. In the Wife’s case outline document of 2 September 2013, she valued the Holden Commodore at $10,000, the (omitted) Motorbike at $17,100, the home-built motorbike at $29,000 and the Kia (omitted) at $4,000.  The difference in attributed values is unsurprising and, realistically, the issue cannot be resolved on the state of the evidence. 

6. Moreover, the Wife asserted the existence of other assets, including a Holden, $1,500, a (omitted) prime mover, $14,000 as well as some other bikes of lesser value.  Again, the evidence does not enable the Court to establish what happened to these items.

7. The matters contained in the Husband’s affidavit of 29 January 2013 can be treated as admission against interest.  At the very least, therefore, at that date, the Husband agreed that he had a Holden Commodore, a (omitted) Motorbike, and a home-built motorbike, having a value of $21,500 in total.  Using the same rationale, the Wife had a Kia (omitted) with a value of $4,000. 

8. Did the Husband have other assets attributed to him by the Wife?  The Court believes so.  This is based on general adverse findings of credit relating to the Husband, the basis of which will be discussed below.

9. What is abundantly clear to the Court, however, is that whatever the parties may have held in 2013, all the Court knows that presently exists and which can be made the subject of an order under section 79 is the superannuation and the moneys in the (omitted) Bank trust account.

10. What happened to the rest? The Wife explained that after the head gasket blew on the Kia (omitted), it was sold off as parts for which she received $500.  There is no reason not to accept the Wife’s evidence in this regard. 

11. The Husband explained, on oath, that he still retained the Holden Commodore, that it was now 20 years old, and might be worth $500.  The car would be 20 years old, and so the Husband’s explanation is plausible.  In relation to the (omitted) motorbike, he gave evidence on oath that he sold it for parts, as it was damaged.  He explained this took place three or four years ago, at a time when he had financial trouble.  He says that it was sold for “a few thousand dollars” which was used to pay household bills.  He did not explain what happened to the home-built motorbike.  He later explained to the Court that he had a gambling problem.

12. Initially, he said that the problem existed after separation, but the more evidence he gave, the more it became apparent that it existed before separation.  Indeed, after hearing the Husband’s evidence, examining the various bank statements that were tendered in evidence, studying the affidavits filed in the case by both parties, and forming an adverse view about the Husband’s credit, the Court believes that is it far more likely than not that one of two things has occurred.  Firstly, that the Husband’s gambling activities represents the most likely explanation for the dissipation of assets since the date of separation.  The second alternative, however, is that the Husband in fact retains many of these items that he claims no longer exist or are valueless, with the inference to be drawn that he considered this nondisclosure as something that would assist him in the proceedings. 

13. Whilst this discussion of the balance sheet has digressed into findings about credit, this merely exemplifies the difficulties the Court has in establishing what the pool of assets is for present purposes.  All the Court can safely conclude is that it includes the Husband’s superannuation entitlement of about $100,000, and $40,000 in a (omitted) Bank account that represents what is left of the sale proceeds of the former matrimonial home. 

14. Of course, liabilities need to be discussed.  The Wife asserts that she has a range of liabilities that either pertained to the children, or to her household, but all of them seemed to have been accumulated in the post-separation period.  This is unsurprising given that she has had almost sole care of these children and the date of separation is such a long time ago.  There are no relevant liabilities to be included in the balance sheet, from her perspective.  The Husband asserted in his sworn evidence before the Court that the $40,000 in the (omitted) Bank account is earmarked to pay his legal fees of the present proceedings.

15. A substantial difficulty for the Husband, however, is the fact that he has been unrepresented since 2014.  His financial statement, sworn with his then legal advisor on 29 January 2013 discloses no liability for legal costs.  Even putting aside the grave reservations the Court has about the Husband’s credibility, it is implausible that he accumulated these costs after the date of his sworn financial statement. 

16. In any event, the Wife deposes to have an outstanding liability of legal costs in the sum of about $40,000, but she is not asserting that should, somehow, be added to the balance sheet and taken into account for adjustment purposes.  All of these considerations lead the Court to conclude that there is no substance in the Husband’s claim that, somehow, his legal costs ought to be taken into account and that, somehow, the money in the (omitted) bank account should be earmarked for this purpose.

17. Accordingly, the assets for present purposes will remain as the superannuation and funds in the (omitted) Bank account as set about above. 

Assessing contribution

1. The Husband made some outlandish claims about the Wife’s irresponsible financial management of their matrimonial affairs.  When his claims were tested, they were shown to be fallacious.  What the Husband asserted, at one stage for example, was that irregularities in the parties finances before separation ought to be taken into account in their property settlement explanation.  The Wife’s explanation of these financial transactions is, in any event, far more plausible than his.  Indeed, the more the Court questioned both parties about this supposed issue, the more it became apparent to the Court that if there was some level of financial irregularity during the course of their relationship, it probably had far more to do with the Husband’s gambling, than anything else.  The evidence does not, however, support a finding of waste or negative contribution.

2. The overall impression created by all the material before the Court, as well as what both parties told the Court at the hearing, is that for many years they lived beyond their means and, in particular, indulged in the purchase of expensive bikes and motor vehicles that rapidly depreciated in value and created an unmanageable debt burden for them.  The Wife’s bankruptcy was undoubtedly a setback for them, but the very nature of bankruptcy contra-indicates the Wife being a financial burden on the marriage.

3. In reality, the strong impression is formed from the totality of the evidence, and the aggregated material before the Court, that whilst the contributions that each made during the course of their relationship was different, with his focusing on the production of income and hers focusing on homemaker and parenting, though not to the exclusion of some income generation, at the end of the long relationship their contributions should be assessed as being equal, even though different.

4. Contribution will, therefore, be assessed as being equal as at separation.

5. The Wife was representing herself, of course, and would not have appreciated that her circumstances warranted at least an argument that her contribution should be assessed as being greater in the post-separation period. The Court is, nonetheless, bound to do justice and equity in accordance with section 79. Rather than attribute to the Wife a submission she did not make, or even hint at, no prejudice would be caused to her by focussing on future needs under section 75(2) of the Act, and looking at the post-separation period in that regard. What was certainly implicit in the Wife’s case was that there should be a substantial adjustment in her favour based on future needs. The Court believes that is the correct approach to adopt, rather than to seek to artificially attribute to a post-separation contribution argument.

An adjustment under section 75(2) of the Act

1. The Wife did not disclose any significant health issues that were relevant to the present exercise.  The Husband asserted that he suffered from a number of issues, but advanced no corroborative evidence.  In any event, what he did complain about was plainly inconsistent with the evidence that he gave that within the period of one month before the hearing, he had been working a 17 hour day as a (occupation omitted), earning $24 an hour.  The Court must record that whatever reservation it had about the Husband’s credit, this reservation is particularly grave in terms of what he said about his work, and working capacity.  The Court formed the most distinct impression that the Husband was working far more often than he was prepared to concede to the Court and earning far more than he originally told the Court when asked to update his financial statement (telling the Court he had a nil income). 

2. Even if the Husband is only working casually as a (occupation omitted) earning $24 per hour, he certainly has an income greater than that which he admitted to and certainly has a greater income than that of the Wife, who is entirely Centrelink-dependent.  The Husband’s evidence both about his state of health and his income was plainly unreliable. 

3. The Court has already foreshadowed concerns about the reliability of the Husband’s evidence about what property and financial resources he has available to him.  It is more likely than not that he has far more than what he is prepared to concede or has disclosed.  Moreover, he has a capacity for appropriate gainful employment, which again he has failed to property disclose before the Court.  In the circumstances and particularly having regard to the need to care for the children, the Court accepts that it is more likely than not that the Wife is not working. 

4. In relation to the children, what is clear to the Court is that the Wife has raised these children since separation almost entirely on her own, with little or no consistent support for the Husband.  The Court acknowledges there have been periods of time when the children have spent time with their Father, but viewed in the overall scheme of things, this has been comparatively minor.

5. The Wife’s commitments are focussed on her need to survive, as well as to meet the needs of the children.  It is possible that her explanation of the nature of financial support provided by her current partner was not fulsome.  Even if that were the case, however, it would be implausible to infer that A's Father does much more than provide support to A and to A's Mother, because he is A's Father.  In other words – it would not be proper to infer that the measure of his generosity extends to the other children.  The Husband swore to the Court that he was entirely dependent on the income of his present Wife, who only earned $500 per week.  Quite apart from the fact that he subsequently swore to earning income that he had not disclosed, the clear impression is formed that he was very selective in terms of disclosing not just his financial circumstances to the Court but that of his present Wife. 

6. The Husband has no responsibility to support any other person than his children, but he has failed to do so.  If the Wife had sought lump-sum child support and if there had been assets available against which to levy such an order, this would have been a very strong case.  The Husband’s failure to meet his responsibilities towards his children is a significant feature in this case. 

7. The Wife is in receipt of Centrelink benefits.  Her children are dependent on her.

8. Another relevant factor is that of the Husband’s nondisclosure.  The Court’s concerns in this regard have already been recorded earlier in these reasons.

9. Having regard to these matters, how are section 75(2) factors to be assessed?

10. It is significant that the known pool of assets is such a small one.  The most that the Wife can receive is about $40,000 in cash, a modest amount even before future needs are considered.  Even if she received all or almost all of the Husband’s superannuation entitlements, that may not necessarily meet her present needs but is at least some provision for the future.  The Court has every confidence that the Husband will continue to work and may indeed regain a more fulsome capacity to work on conclusion of these proceedings.  Hence, the provision of both his short-term and long-term needs is taken care of. 

11. The section 75(2) factors overwhelmingly favour the Wife in this case because of the fact that she has cared for the children since separation and because X and W are both so young. Given the modest size of the known asset pool, anything less than a 40 per cent adjustment in her favour would not do justice and equity on the facts of this case.

1. Accordingly, doing the best the Court can on the evidence and having regard to the matters discussed above, it believes that the section 75(2) adjustment in favour of the Wife should be 40 per cent.

A just and equitable order?

1. The result of the Court’s assessment of both contribution and future need is to give to the Wife 90 per cent of the known assets, including both superannuation and non-superannuation.  Assuming the total pool of assets is $140,000, this gives her $126,000.  Given her circumstances, she should receive the entire proceeds of the (omitted) Bank account, which the Court will assume to be $40,000.  The remaining $86,000 should be by way of super split of the Husband’s superannuation entitlement. 

2. The Court acknowledges that this leaves the Husband with very little super, and in theory at least, it leaves him with a supposed debt for legal fees of about $40,000.  This is nonetheless just and equitable in the Court’s estimation.  It is by no means clear that the Husband in fact owes legal fees, something which becomes remoter every day which passes.  The Court’s reservations about the Husband’s true asset and income position have been stated above.  In the circumstances, the Court does believe that this is a just and equitable Order, and it so orders.

I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:  6 June 2017