Dekker & Dekker
[2014] FCWA 61
•15 SEPTEMBER 2014
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: DEKKER and DEKKER [2014] FCWA 61
CORAM: WALTERS J
HEARD: 1-10 MAY 2013
DELIVERED : 15 SEPTEMBER 2014
FILE NO/S: PTW 1698 of 2007
BETWEEN: MS DEKKER
Applicant
AND
MR DEKKER
RespondentPIM DEKKER
Intervener
Catchwords:
FAMILY LAW – PROPERTY – alteration of property interests under the Family Law Act (1975) (Cth) – where husband is aged 79 and wife is aged 70 – where husband was a widower and wife was separated from her first husband at commencement of cohabitation – where husband had significant assets and wife had very modest assets at commencement of cohabitation – consideration of parties’ respective contributions – where husband asserts that he owes his adult son significant moneys – where son intervenes – where son asserts husband held shares in company conducting family business for him pursuant to his mother's will – where son also asserts husband held other shares in company conducting family business for him pursuant to an express trust or, alternatively, pursuant to a constructive trust – where son further asserts husband disposed of shares held on trust for him and now holds the financial value of those shares on trust for him – where there is significant confusion surrounding the shareholding in company conducting family business and no or no sufficient evidence of the quantum of the alleged debt – husband's conduct as a litigant – son's conduct as a litigant – were wife receives significant funds by way of inheritance – whether funds received by wife should be "added back" – consideration of High Court’s decision in Stanford & Stanford (2012) 87 ALJR 74 and Full Court's decisions in Bevan & Bevan [2013] FamCAFC 116, Bevan & Bevan [2014] FamCAFC 19 and Chapman & Chapman [2014] FamCAFC 91
Legislation:
Family Law Act 1975 (Cth), s 75(2), s 79(2), s 79(4)
Property Law Act 1969 (WA), s 34(1)Category: Not Reportable
Representation:
Counsel:
Applicant: Mr F Castiglione QC
Respondent: Mr M Nicholls QC
Intervener: Mr H Moser
Solicitors:
Applicant: Elizabeth Wiese & Associates
Respondent: Lewis Blyth & Hooper
Intervener: Oldfield Legal
Case(s) referred to in judgment(s):
Adamson v Hayes (1973) 130 CLR 276
B & B [2006] FamCA 883
Baker and Darzi [2013] FCWA 16
Baloglow v Konstantinidis & Ors [2001] NSWCA 451
Bevan & Bevan [2013] FamCAFC 116
Bevan & Bevan [2014] FamCAFC 19
Bolger & Headon [2014] FamCAFC 27
Bonacci & Bonacci [2012] FamCAFC 15
Bremner& Bremner (1995) FLC 92-560
C & C (1998) 23 Fam LR 291
C & C (2005) FLC 93-220
Cerini & Cerini [1998] FamCA 143
Chapman & Chapman [2014] FamCAFC 91
Chemaisse & The Commission of Taxation & Ors (1990) FLC 92-133
Clauson & Clauson (1995) FLC 92-596
Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614
Crandall & Crandall [2009] FamCAFC 120
Dickons & Dickons [2012] FamCAFC 154
Elias and Elias (1977) FLC 90‑267
Erdem & Ozsoy [2012] FMCAfam 1323
Farmer & Bramley (2000) 27 Fam LR 316
Fencott v Muller (1983) 152 CLR 570
G & G (1984) 9 Fam LR 969
G & G [2004] FamCA 1179
Gollings & Scott (2007) FLC 93-319
Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd (2012) 294 ALR 550
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Hunter v Moss [1994] 3 All ER 215
In the Marriage of Aleksovski (1996) 20 Fam LR 894
In the Marriage of Brandt (1997) 22 Fam LR 97
In the Marriage of Collins (1990) 14 Fam LR 563
In the Marriage of Dickson (1999) 24 Fam LR 460
In the Marriage of Prestwich (1984) 9 Fam LR 1069 at 1072
Inland Revenue Commissioners v Muller Ltd (1901) AC 217
Kowaliw & Kowaliw (1981) FLC 91-092
Lloyd v Tedesco (2002) 25 WAR 360
Mayne & Mayne (2011) FLC 93-479
McMahon & McMahon (1995) FLC 92-606
Money & Money (1994) FLC 92-485
Muschinski v Dodds (1985) 160 CLR 583 at 615
Nelson v Nelson (1985) 132 ALR 133
Noll & Noll and Anor [2013] FamCAFC 24
Norbis v Norbis (1986) 161 CLR 513
OSF & OJK (2004) FLC 93-191
Pierce & Pierce (1998) 24 FamLR 377
Russell v Russell (1999) FLC 92-877
Stanford v Stanford (2012) 87 ALJR 74
Townsend & Townsend (1995) FLC 92-569
Vandervell v Inland Revenue Commission [1967] 2 AC 291
VJ & CJ (1997) 22 Fam LR 166
Waters & Jurek (1995) FLC 92-635
Way & Way (1996) FLC 92-702
Williams & Williams [2007] FamCA 313
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL
JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEENCHANGED
Preamble
1These proceedings relate to competing applications for property settlement. The parties are no longer young: the husband is now nearly 79 years of age, and the wife is 70. This was the second marriage for each of them. It lasted some 13 or 14 years, from 1993 to 2006.
2The husband was a widower when he and the wife met in 1991 or thereabouts; the wife had separated from her first husband in 1985.
3The husband and his first wife, [Angela], had eight children. The wife had two children from her first marriage. There were no children of the marriage of the husband and the wife.
4One of the husband's sons, [Pim], has intervened in the proceedings between the husband and the wife. He has done so because he and the husband assert that the husband owes him $530,000. In practical terms, Pim’s original application pressed for him to be paid that amount before the Court proceeds to deal with any division of the parties' property between them.
5According to Pim and the husband, the husband held shares in the family business on trust for Pim . The identification of the shares that the husband allegedly held for Pim was not a simple matter. It was made more complicated by the fact that the company operating the family business was deregistered during the course of these proceedings. The case as presented by Pim and the husband was to the effect that the husband's obligation to Pim changed when the company ceased to operate and was later deregistered. Instead of Pim being entitled to shares, it was asserted that he became entitled to a proportion of the proceeds of sale of the business (or, perhaps more accurately, the leasehold of the premises from which the business was formerly operated).
6The family business itself ceased to operate after the commencement of these proceedings. It had been in existence, in one form or another, for many years before the husband and the wife met and later married.
7The circumstances in which the family business ceased to operate were controversial, and formed the subject of much evidence during the course of the trial.
8The wife's case is that the husband does not owe anything to Pim and that the net value of the property available for distribution between the husband and wife should not be diminished by the $530,000 claimed by Pim . In very broad terms, the wife asserted that the value of the available property, including the $530,000 claimed by Pim , is approximately $3.1 million; the husband asserted that, after deducting he moneys claimed by Pim , the available property has a value of approximately $2.5 million.
9The wife accepts that the husband is entitled to a greater share of the available property than she is, but it is clear that a finding to the effect that Pim is owed $530,000 would significantly diminish the monetary value of the wife's entitlement. Irrespective of whether the $530,000 is found to be owing to Pim, the husband's case is that the wife is entitled to a much smaller proportion of the available assets than she has claimed.
10The parties also disagree about a number of other matters. For example, they disagree about the manner in which the Court should treat the various contributions that they each made during the course of their relationship, and about the question of whether the family business was disposed of for less than its true value.
11The trial took place in May 2013. Mr Castiglione QC appeared for the wife. Mr Nicholls QC appeared for the husband. Mr Moser appeared for Pim.
Background and financial history
12In these Reasons, and unless otherwise indicated:
a)all statements of fact comprise findings of fact;
b)I have referred to the parties as the wife, the husband and Pim (and I mean them no disrespect by doing so) – because it is less confusing than referring to them as the applicant, the respondent and the intervener;
c)I have referred to the husband's first wife as Angela (and, again, I mean no disrespect by doing so) – because it is less confusing than referring to her in some other way;
d)I have referred to the husband's other son, Pim’s brother, as [Hans] junior; once again, I mean him no respect by doing so;
e)I have not drawn a distinction between proceedings or events before a family law magistrate and proceedings or events in the Family Court of Western Australia; and
f)I have referred to all affidavits filed by or on behalf of the parties as being "sworn", even if they were affirmed by their deponents (and I note that, in a slightly different context, s 5 of the Interpretation Act 1984 (WA) provides among other things that "to swear" includes "to affirm").
13The husband was born [in] 1935 and is now nearly 79 years of age. The wife was born [in] 1944 and is now 70 years of age. They commenced living together in or about January 1992 and married [in] 1993. They separated in November 2006. It is clear, however, that there had been difficulties in the marriage since at least early 2006.
14There are no children of the marriage.
15Both of the parties had been married previously. The husband and his first wife, Angela, married in 1955. They had eight children, born between 1955 and 1969. Angela died on 18 March 1990. At the time of the trial, the husband had 24 grandchildren and six great-grandchildren.
16The wife separated from her first husband in 1985. She and her first husband had two children, who were born [in] 1974 and [in] 1975 respectively.
17The husband was born in [an EU country]. After leaving school in 1949, he commenced a [tradesman] apprenticeship. He emigrated to Australia, with his parents, in June 1955. He was then 19.
18After he arrived in Australia, the husband married Angela (who was then in an EU country) by proxy. She arrived in Australia, with the couple's first child, Hans junior, in December 1956.
19Pim is the husband's sixth child. He was born [in] 1965. Apart from Hans junior and Pim, all the children of the husband and Angela are female.
20The husband worked for various engineering firms after he arrived in Australia. He then had a milk round for a number of years, and later worked in a variety of jobs.
21In 1963, the husband started working for a business known as [Company S] and in 1968 he and others commenced a business known as [Company P]. In 1974, he left the successor to Company P and commenced a shipbuilding and maintenance business known as [Company M].
22In 1976, a family trust was established (known as the [Dekker Family Trust]). I shall refer to the Dekker Family Trust as "the family trust". [Dekker Holdings Pty Ltd] ("[Dekker Holdings]") was incorporated to serve as the trustee of the family trust. The directors and shareholders of Dekker Holdings were the husband and Angela. They held one share each.
23The husband and Angela were the joint appointors and guardians of the family trust.
24Dekker Holdings (as trustee for the family trust) later established [Company D]. According to the husband, Company D was registered as a [truck repair and maintenance] business. It commenced operations [in] 1986.
25I shall discuss Company D in more detail later in these Reasons.
26Angela’s last will was made on 6 July 1989. She died [in] March 1990.
27At the time of Angela’s death, the husband was still involved in Company D. Hans junior and Pim worked with the husband at Company D at that time, as did the husband's son-in-law, [Phillip Parish] (who was married to one of the daughters of the husband and Angela, [Wilhelmina]). The husband and Angela also owned a five-acre property at [Suburb A], upon which they had constructed a house. I shall refer to this property as "[Property A]".
28The house [at] Property A had been built by the husband and Angela between 1987 and 1989. Angela was diagnosed with cancer around the time that they moved into the house. She died some four months later.
29Probate of Angela’s will was granted on 31 July 1991. Administration of Angela’s estate was granted to the husband, who was the executor named in the will. I shall refer to a particular provision of Angela’s will later in these Reasons.
30Between the date of Angela’s death and the date upon which Probate of her will was granted, a significant restructure of the shareholding in Dekker Holdings was effected. A further 18 shares were issued, bringing the total number of issued shares to 20. The interests of the husband and Angela (or, more accurately, Angela’s estate) in the company were significantly diluted as a result of the restructure. They had each previously held a 50 percent interest in Dekker Holdings (in that they had each held one of the two issued shares). After the restructure, they each held three of the 20 issued shares. In other words, they each held a 15 percent interest in the company after the restructure. I shall discuss the effect of the restructure of Dekker Holdings at this time later in these Reasons.
31In or about 1993, Phillip and Wilhelmina Parish ceased their involvement with Company D, after a falling out between Phillip Parish and the husband. The shares previously held by them in the company operating Company D were transferred to the husband.
32The wife was born and educated in Western Australia. She trained as a nurse at Royal Perth Hospital and was employed in that capacity until approximately 1981. Thereafter, she and her first husband were involved in a [furniture] business which was ultimately unsuccessful.
33As indicated above, wife and her first husband separated in 1985.
34The wife had very modest assets at the time she met the husband. Indeed, she had recently entered into a personal insolvency agreement with her creditors under Pt X of the Bankruptcy Act 1966, and her liabilities exceeded the value of her assets. She and her children had been living in rented accommodation in [Suburb B].
35The wife moved in to Property A in or about January 1992. Her children (boys then aged 17 and 16) remained living in the Suburb B property with family friends.
36The wife's father commenced to live with the parties in 1993. He remained living with them until March 2004, when he moved out of Property A to a retirement home. During the time he lived with the parties, he did some work on the property: clearing bush, gardening and being a general handyman. He paid modest board to the parties while he lived at Property A.
37The husband clearly liked the wife's father, and got on well with him. He was very much a part of the family and was called "[Poppa]" by the husband's grandchildren. He was self-sufficient and, although the board he paid was modest, he sometimes paid for meals for the husband and the wife at restaurants and made some small lump sum contributions for various purposes: see husband's affidavit sworn 16 April 2009 at [134]-[140].
38In 1999, the wife received an inheritance from her late mother's estate. She received cash of approximately $100,000 (from the sale of her late mother's home) and a share portfolio valued at approximately $630,000. By the date of the trial in May 2013, very little remained of the inheritance. I shall discuss the fate of the wife's inheritance later in these Reasons.
39In 2000, the husband paid out the mortgage encumbering Property A. He used part of his superannuation entitlements for this purpose.
40In 2002, various difficulties arose in Company D. A meeting of those involved in Company D was held on 7 October 2002 ("the 2002 meeting"). The 2002 meeting is important because the husband said at the meeting that "his 60 percent shareholding was in fact only 30 percent with 30 percent belonging to his son [Pim]": see annexure A to Pim’s affidavit sworn 18 August 2011. Again, I shall discuss the meaning and effect of this statement later in these Reasons.
41In October 2002, the wife lent Company D $10,000. Company D repaid this amount in March 2005.
42In late 2004 or early 2005, the wife inherited approximately $41,000 from her father. She gave her son [Kyle] $20,000 and her son [Jason], $5000. The vast bulk of the remaining moneys (totalling $15,000) was used to reduce the amount owing in respect of a loan secured against the wife's share portfolio. The wife had acquired her share portfolio directly or indirectly from her mother's estate.
43The parties' relationship deteriorated during 2006. They separated at the end of that year, although they both continued to live at Property A.
44During 2006, the wife (directly or indirectly) used funds sourced from her inheritance to purchase a residential property for each of her sons. Over $410,000 was used for this purpose.
45The wife commenced proceedings in this Court on 4 April 2007.
46In November 2007, Company D sold the lease over the premises from which it had operated at [Coastal Town M] for $2.1 million. The leasehold was sold to a purchaser who wanted the facilities at [the Coastal Town M property], but not the business.
47The husband "retired" in March 2008. On 31 March 2008, Company D ceased business and its Coastal Town M premises were vacated. On the following day, a business known as [Company W] commenced operation from premises in [Suburb C]. The principals of Company W are the husband's sons, Hans Junior and Pim and [Mr Welsh]. According to the wife, the new entity is "largely a reincarnation of [Company D]": see wife's affidavit sworn 12 December 2008 at paragraph 126. I agree with her assessment in that regard. I find that the rising of Company W from the ashes of Company D had little to do with commercial practicality or prudence and everything to do with the extant proceedings between the husband and the wife.
48The goodwill previously adhering to Company D was transferred to or otherwise absorbed by Company W. A dispute arose in these proceedings as to the value of the goodwill. The wife's argument was that the husband had effectively "given away" Company A’s goodwill to Company W and that, if the transaction had been conducted in a commercially sound and responsible fashion, Company D would have received valuable consideration for the goodwill – a proportion of which should have been available for distribution between the husband and the wife. In other words, the wife sought to "add back" the husband’s share of the goodwill that should properly have been paid to Company W by Company D. I shall discuss this subject elsewhere in these Reasons.
49On 4 December 2009, consent orders were made enabling the husband to receive pension payments in a tax-effective manner. The relevant orders are as follows:
[2]The husband be at liberty to transfer his share of the settlement funds from the sale of [the Coastal Town M property] ("the funds") from an interest-bearing account in his sole name to the [Dekker Superannuation Fund] ("the Fund") to be set aside to fund an account-based pension ("the pension").
[3]From the pension the husband be entitled to be paid $1000 per week until further order.
[4]Upon the transfer referred to in [2] above, the husband be restrained by injunction … from dealing with or disposing of the funds save and except for the pension referred to in [3] above pending further order of the court or the written permission of the wife.
50I shall refer to the above orders as "the superannuation injunctions".
51During cross-examination, the husband conceded that he had drawn from his superannuation entitlements significantly more than the $1000 per week provided for in the superannuation injunctions. He also admitted that he had spent approximately $30,000 on renovations to the kitchen at Property A. He conceded that he had not obtained a further order permitting him to do so, and that he had also failed to seek the wife's permission. His explanation was that he "must have forgotten" about the terms of the superannuation injunctions.
52Ultimately, the husband conceded that the assets of the superannuation fund had been reduced contrary to the provisions of the superannuation injunctions. Exhibit W13 purports to be a schedule tracing the husband's drawdown of moneys from the Dekker Superannuation Fund from the granting of the superannuation injunctions to the end of December 2012. As I shall explain below, approximately $50,000 was utilised by the husband otherwise than in accordance with the terms of the superannuation injunctions and, in effect, remains unaccounted for. The husband's explanation in cross-examination was that "when I needed money, I just used it".
53Of considerable importance is the fact that a significant amount of the money dealt with by the husband in breach of the superannuation injunctions was paid to his solicitors. The husband paid his solicitors some $177,000 in respect of their fees after the date of the superannuation injunctions. Their fees were in relation to these proceedings and were paid, it seems, from funds directly affected by the superannuation injunctions. The husband's solicitors were acting for him at the time the superannuation injunctions were made. It follows that they were aware that the husband was restrained by injunction from dealing with or disposing of his share of the net proceeds of sale of the Coastal Town M property – save for his entitlement to draw $1000 per week for his own purposes. The husband's solicitors are, of course, officers of the Court. If they knowingly or negligently caused or permitted the husband to breach the terms of the injunction to which the husband had consented, then their behaviour fell far short of the professional standards expected of legal practitioners in this or, indeed, any other jurisdiction. If they behaved in this manner, than the fact that they received a very substantial financial benefit from the husband's actions amounts to an aggravating circumstance. I raised this issue with senior counsel for the husband during his closing address, but he was not instructed to respond. I make no finding, therefore, regarding the professional conduct of the husband's solicitors, but it is fair to say that the ramifications of that conduct have caused the Court grave discomfort. It is true that the legal fees paid by the husband have been “added back” in the sense that they now form part of the property available for distribution between the parties, but if the husband's solicitors were aware that their fees were being paid from funds that were subject to the superannuation injunctions, there can be no doubt that they should have taken steps to remedy the situation and to ensure that it did not continue.
54In February 2010, the wife was involved in motor vehicle accident. Her car was written off for insurance purposes, and she received a payout of $8400. She purchased a replacement vehicle (a second-hand [Subaru]) in March 2010. The purchase price was approximately $14,500. In order to meet the purchase price, the wife used the payout that she had received in respect of her previous car together with approximately $6000 from her superannuation fund.
55On 7 May 2010, Pim lodged a caveat over Property A: see exhibit 7. The caveat was lodged "as security for the repayment of a loan made by [the husband] to [Pim] on or about November 2008". In a statutory declaration made on 5 May 2010 in support of the caveat, Pim made certain assertions. Relevantly, he asserted that he had an entitlement to a 30 percent interest in Dekker Holdings – which interest was held by the husband on his behalf. He also asserted that his "30 percent share in the winding up of [Dekker Holdings] was $530,000” and that he and the husband had agreed that he would "loan [the husband] the $530,000 … so that he could invest that sum and live off the interest in his retirement
56I shall discuss Pim’s caveat later in these Reasons.
57The proceedings came on for trial before Crooks J in May 2010. On the first day of the trial (19 May 2010), an application was made to adduce expert evidence from Mr Napoli. The trial did not proceed on that day and was ultimately returned to the Callover.
58In mid-September 2010, the husband moved the wife's possessions out of Property A. At the same time, he provided her with $50,000 "by way of partial property settlement". The wife later returned to Property A, but the husband (assisted by his daughters [Marion] and [Melissa]) prevented her from entering the property.
59The wife then applied to this Court for orders permitting her to continue to live at Property A. On 8 October 2010, the husband was ordered to allow the wife entry to the property and to provide her with a full set of keys. The husband was also restrained by injunction from excluding the wife from Property A in the future, and from interfering with her use and enjoyment of the property.
60In spite of the orders of 8 October 2010, the living arrangements at Property A became intolerable for the wife. After an incident at the property involving an attack on her son's dog by larger dogs owned by the husband's daughters Melissa and Marion – in which the wife was bitten and her son's dog was injured – the wife resolved to move out. She left Property A on 15 December 2010 and moved to rented premises in [Suburb K].
61The wife deposited the $50,000 received from the husband in September 2010 in an ANZ bank account. Funds from the account were used "for rent and towards the cost of removalists, a locksmith, security guard, storage and car hire and some living expenses": see wife's affidavit sworn 27 November 2012 at paragraph 32. At the beginning of July 2011, the balance in the account was just over $7000.
62On 12 October 2010, minutes of a meeting of the directors of Dekker Holdings were signed, which minutes reveal that it was resolved to wind up the company voluntarily on that date. On 29 October 2010, the husband filed an application for voluntary deregistration of the company: see exhibit I5. The company was deregistered on 5 January 2011. At the time of deregistration, the issued capital of Dekker Holdings comprised 20 ordinary shares. [Mr Sansone] held two shares, Hans junior held six shares and the husband held 12 shares: see exhibit I4.
63I note that the application for voluntary deregistration relating to Dekker Holdings (see exhibit I5) contains a declaration made by the husband on 12 October 2010 that "all members of the company agree to the deregistration" and that "the company has no outstanding liabilities".
64At all relevant times, Dekker Holdings was the trustee of the family trust. As explained elsewhere in these Reasons, it is arguable that three of the 20 issued shares in the company at the time of its deregistration were held by the husband as administrator of Angela’s estate. No evidence was presented to the Court regarding the winding up of Angela’s estate. It seems that the husband simply dealt with these three shares as if he were beneficially entitled to them.
65Because no evidence was presented to the Court regarding the winding up of Angela’s estate, no evidence was presented regarding any potential taxation or other liabilities arising from the failure of the husband to wind up (or, indeed, to properly administer) the estate.
66The proceedings in this Court continued in an acrimonious fashion throughout 2011. On 7 June 2011, the husband filed an application in a case seeking leave to rely upon affidavits sworn by Pim, Hans junior and himself. The application came before Crooks J on 27 June 2011: see exhibit J3.
67On 8 September 2011, Pim was granted leave to intervene.
68Clearly, Dekker Holdings was deregistered after Pim had lodged the caveat over Property A asserting that he was owed $530,000 and before he intervened in these proceedings. In a statutory declaration made in support of the caveat (which was lodged in May 2010), and as indicated above, Pim said that the decision to wind up Dekker Holdings had been made in 2008 and that:
My 30% share in the winding up of [Dekker Holdings] was $530,000.
69After further interlocutory skirmishes, the trial was held in May 2013. It commenced on 1 May 2013 and continued on 2, 3, 6 (although only briefly on that day), 7, 8, 9 and 10 May 2013.
70To the extent that it is relevant, both the husband and the wife took various holidays after separation (or when separation was imminent). The wife travelled to Europe in April 2009 for 18 days, and to South Australia in September 2010 for one week. The husband travelled to Europe for two months in 2006, and again in 2009 for four months. In 2008 he travelled to Hong Kong and Taiwan for one month. In 2010 he travelled to the north-west of Western Australia for five weeks and in 2011 he travelled extensively – to Europe for approximately 3 months, to Africa for two or three months and to Vietnam and Cambodia for approximately 3 weeks.
71Both parties paid very significant legal and other associated fees from the date of separation to the date of the trial. The husband paid a total of just under $315,000. The wife paid a total of approximately $227,000.
Orders sought
72The orders sought by the husband and the wife are set out in a joint minute of orders sought: see exhibit J1. The joint minute records various orders that are to be made by consent, as well as orders sought by the parties that are opposed.
73The wife sought orders to the following effect:
a)The net assets of the husband and the wife, including their superannuation and financial resources (but excluding any alleged debt to Pim) be divided on the basis of 45 percent to the wife and 55 percent to the husband.
b)In the event that the husband pays the amount sought by the wife, he is to retain Property A.
c)Pim’s claim is to be dismissed (with costs).
d)The husband pay the wife's costs.
74The husband sought orders to the following effect:
a)A declaration pursuant to s 78 of the Family Law Act 1975 to the effect that the husband holds 30 percent of the proceeds of sale of Company D on trust for Pim.
b)The $50,000 paid to the wife on September 2012 be categorised as partial property settlement.
c)Each party otherwise retain the property presently in his/her possession or control.
d)The wife pay certain costs associated with interim or interlocutory proceedings.
75Pim sought the following orders:
a)A declaration that the husband and the wife or either of them owe [Pim] the sum of $530,000.
b)An order that the husband and the wife or either of them pay to [Pim] the sum of $530,000.
c)An order that the wife pay [Pim’s] costs.
76The orders sought in Pim’s response filed 14 February 2013 included a claim for interest. That claim was abandoned upon the filing of Pim’s papers for the judge.
77Pim had also sought an order that the amount of $530,000 be paid by the husband and the wife (or either of them) forthwith. The word "forthwith" was struck from the proposed order on 7 May 2013 (during the course of the trial). It was struck from the proposed order at the request of Mr Moser, because it was clearly inconsistent with Pim’s own evidence.
78An additional order had also been sought in Pim’s papers for the judge. The order proposed that Pim be appointed as trustee of the Dekker Family Trust. The purpose of the order was less than clear, and I acceded to senior counsel for the wife's submission to the effect that the inclusion of an additional order sought immediately before trial should not be permitted.
79By the conclusion of the trial, the orders sought by the parties had been modified or refined to some degree:
a)The husband sought an order that he be obliged to pay Pim $530,000. He continued to seek that the $50,000 paid to the wife on September 2010 be characterised as partial property settlement. He otherwise sought that the property of the parties be divided between them on the basis that the wife receive a minimum of 20 percent and a maximum of 27.5 percent (with the husband to retain the balance).
b)The wife continued to seek orders to the effect that Pim’s claim be dismissed. She otherwise sought that the property of the parties be divided between them on the basis that she receive a minimum of 40 percent and a maximum of 45 percent (with the husband to retain the balance).
c)Pim had acknowledged that the wife did not owe him any moneys. He continued to seek an order that the husband (alone) pay him $530,000. He had abandoned his claim for this sum to be paid "forthwith".
80I advised the parties at the commencement of the trial that the issue of costs (including costs relating to interim or interlocutory proceedings) would only be dealt with after judgment is delivered.
Case Guardian for the husband?
81The question of whether the husband might need a case guardian was raised during the course of the trial.
82I had stood the proceedings down at approximately 1.00 pm on 3 May 2013. The husband was being cross-examined by senior counsel for the wife, and had been in the witness box since the previous day. His evidence at that time was less than satisfactory.
83At the request of all counsel, the proceedings did not resume on that day (which was a Friday).
84On Monday 6 May 2013, senior counsel for the husband suggested that the husband may have problems with his memory and that he may not be able to give instructions. The possibility of the appointment of a case Guardian was raised.
85Senior counsel for the husband advised the Court that the husband had been seen by a General Practitioner, [Dr N].
86After hearing submissions, I stood the proceedings down until the following day (Tuesday 7 May 2013) to enable the husband's legal advisers to give further consideration as to how they might be minded to proceed. I made the following orders:
[1][Dr N] do forthwith make available to the solicitors for the parties for inspection all medical records in his care and control relating to the husband, including all correspondence and communication from or to the husband's solicitors … For the last 12 months.
[2]The proceedings otherwise be adjourned to 10 AM on Tuesday, 7 May 2013.
87The orders contained the following notation:
Counsel for the husband has raised the issue of whether the husband might need a case Guardian. The matter has been adjourned for a short time to enable an application in a case to be filed, if such application is deemed appropriate.
88When the proceedings resumed on 7 May 2013, senior counsel for the husband advised the Court that Dr N’s records had been produced, as had a letter from a Geriatrician. A relatively short time later, and after the legal representatives for the parties had conferred, senior counsel for the husband advised the Court that all counsel were of the view that it was "safe to proceed" with the case. He confirmed that no application for the appointment of a case Guardian would be made. Senior counsel for the wife's cross-examination of the husband then continued.
General observations
89I am painfully aware of the very lengthy delay between the completion of the trial and the delivery of these Reasons. In Rollings & Rollings [2009] FamCAFC 87, the Full Court said at [67]
The authorities … establish that if there is a delay between the conclusion of the hearing and judgment, presumably with contemporaneity of reasons, the delay is not in itself a ground of appeal and it is not … a denial of a fair trial and/or a miscarriage of justice. However the delay does mean that on appeal there has to be greater scrutiny of the findings made by the trial judge. As Giles JA said in Monie v the Commonwealth (2005) 63 NSWLR 729 at [3]: “extensive delay may cause an appellate court to take a more stringent approach in determining whether error has been demonstrated in the trial judge’s findings or whether the trial judge’s reasons are adequate”.
90Similarly, the Full Court in Herridge & Handerson [2011] FamCAFC 156 said that the "real issue" may be –
… whether material findings of fact made by the trial Judge, and/or conclusions reached by him in reliance upon them, could be unsafe by virtue of the time which elapsed between the conclusion of the evidence and the delivery of judgment. That in turn is more referable to a consideration of contested findings or conclusions, and the evidence upon which they were, or could be based, or its absence. If those challenges were made out, the fact that the trial Judge’s delay in delivery of judgment may have caused, or contributed to his error(s) is irrelevant. If they are not, it is difficult to see how his delay could change anything.
91Their Honours added at [22]-[23]:
If … findings of fact made by the trial Judge were not reasonably open to him, it does not matter whether that occurred because of the time his Honour took to deliver his judgment or for some other reason. That is also the case if such findings are shown to have been “unsafe”... If it is demonstrated that his Honour’s discretion was exercised in reliance upon material errors of fact, appellate intervention is likely to be enlivened. …
What we have said ought not be misconstrued, however. It is regrettable that judgment was not delivered more expeditiously than it was in this case. In a case where impressions of parties and witnesses clearly assumed considerable significance, a delay of eight months had the potential to diminish the clarity of the trial Judge’s recollection of their evidence, and his assessment of its reliability. We shall subject the trial Judge’s judgment to closer than usual scrutiny …
92The delay between the conclusion of the trial and judgment in this case is over double the delay with which the Full Court was concerned in Herridge & Handerson. The parties, let alone the Full Court, are perfectly entitled to subject these Reasons to "closer than usual scrutiny". Having said that, I would record the following:
a)The delay in the delivery of these Reasons arises from workload issues affecting the trial judge. It is not the fault of the parties or their legal advisers, who have taken appropriate steps to inquire as to the progress of the judgment.
b)Notwithstanding the lengthy delay that has occurred since the completion of the trial, none of the parties has applied to reopen; nor has any party applied for interim or interlocutory orders.
c)My recollection of the parties' evidence (and that of their witnesses) has not been affected by the delay for two reasons: firstly, I made full notes of all relevant evidence and submissions during the course of the trial; and secondly, I have had the opportunity to listen to the audio recording of the parties' evidence, the evidence of other witnesses where clarification was required, and closing submissions.
Documents relied upon
93The wife relied upon the following documents:
a)her application initiating proceedings filed 4 April 2007, as amended on 27 August 2007 and 27 November 2012;
b)her affidavits sworn 12 December 2008 and 27 November 2012;
c)her financial statements sworn 9 April 2009 and 27 November 2012;
d)affidavits of Mr Napoli sworn 13 May 2010 and 27 November 2012; and
e)affidavit of [Mr Ilic] sworn 3 May 2013.
94The wife's papers for the judge were provided to the Court on 23 April 2013.
95The husband relied upon the following documents:
a)his amended response to the wife's application initiating proceedings, filed 21 December 2012;
b)his affidavits sworn 16 April 2009, 14 May 2010, 15 April 2011 and 22 November 2012;
c)his financial statement sworn 22 November 2012;
d)affidavit of [Ms Thatcher] sworn 21 April 2009;
e)affidavit of his son, Hans junior, sworn 23 March 2011;
f)affidavit of his daughter, [Melissa Horn] sworn 17 April 2009;
g)affidavit of his daughter, [Marion Gilbert] sworn 21 April 2009;
h)affidavit of his daughter, in [Edith Judd] sworn 23 April 2009; and
i)affidavit of Mr Thompson sworn 16 December 2010.
96Various documents comprising the husband's papers for the judge were provided to the Court on 23 and 24 April 2013.
97Pim relied upon the following documents:
a)his response filed 14 February 2013;
b)his affidavits sworn 23 March 2011 (originally filed in support of the husband's case, and prior to Pim intervening in the proceedings) and 18 August 2011; and
c)affidavit of [Mr Taggart] sworn 1 May 2013.
98Pim’s papers for the judge were provided to the court on 26 April 2013.
99Mr Ilic, Ms Thatcher, Hans junior, Ms Horn, Ms Gilbert, Mr Thompson and Mr Taggart were not required for cross-examination.
100Mr Sansone gave evidence during the course of the proceedings. He did not swear an affidavit and was subpoenaed to attend the hearing.
Property settlement: the law
Approach prior to the decision of the High Court in Stanford v Stanford (2012) 87 ALJR 74
101The following generic summary of the law relating to property settlement is substantially reproduced from my decisions in Erdem & Ozsoy [2012] FMCAfam 1323 and Baker and Darzi [2013] FCWA 16.
102Subject to what I have written below regarding the effect of the recent decisions of the High Court in Stanford v Stanford (2012) 87 ALJR 74 and the Full Court in Bevan & Bevan [2013] FamCAFC 116, it is fair to say that, until the publication of those decisions, the Full Court had consistently ruled that the general approach that should be adopted in relation to a property settlement application was settled. The first "step" or "stage" was for the court to identify the property of the parties. It was then required to attribute a value to each item of property – usually as at the date of the hearing. Thereafter, it assessed the extent of each party’s contributions under the various sub-headings described in s 79(4) of the Family Law Act 1975 (Cth) ("FLA"). Finally, the Court considered the financial resources, means and needs of the parties, and the other matters set out in s 75(2) so far as they were relevant. An adjustment of the amount due to each party by way of contribution was then made by reference to the s 75(2) factors. It was not essential, however, that such an adjustment take place. Generally speaking, an adjustment was made because one party had greater needs and the other had stronger means.
103In relation to the contributions of the parties under s 79(4) generally, it had been held that a “global” approach would usually be more convenient than an “asset by asset” approach – although the application of an asset by asset approach does not (of itself) amount to an error of law: see Norbis v Norbis (1986) 161 CLR 513.
104The s 75(2) factors were considered to be directly or indirectly related to the process of arriving at a just and equitable result. It followed that there could be circumstances in which the justice and equity of the case, and the specific provisions of s 75(2), supported an adjustment in a party’s favour for matters which could not be described comfortably as being of financial or economic significance: see McMahon & McMahon (1995) FLC 92-606 at page 82,043.
105It had also been held that, under s 79(2), the Court was required to be satisfied that the property settlement orders that it proposed to make were just and equitable – and not simply that the underlying percentage division of the net value of the parties’ property was appropriate. In other words, in the consideration of whether the overall result of property settlement proceedings was just and equitable, it was the justice and equity of the actual orders, and not of the percentage distribution, which had to be considered: see Russell v Russell (1999) FLC 92-877.
106The overall process to be applied in property settlement cases was summarised by the Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, where their Honours said at [39]:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, 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. Secondly, the court should identify and assess the contributions of the parties within the meaning of ss.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. Thirdly, the court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), including, because of s.79(4)(e), the matters referred to in section 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. Fourthly, 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…
107My view was that the testing of any proposed orders by reference to s 79(2) was never a fourth substantive step (properly so called) in the property settlement exercise: see OSF & OJK (2004) FLC 93-191; see also B & B [2006] FamCA 883 at [105] and [106] and Bonacci & Bonacci [2012] FamCAFC 15, where the Full Court said at [61]:
…[The] Full Court has said on a number of occasions the so-called fourth step is not an opportunity to make a further adjustment; it is an opportunity for the judicial officer to determine finally how, in reality, a just and equitable order might be achieved based on the circumstances of the case before him or her ... (References omitted).
108At the end of the day, though, and in the majority of cases, the precise nature of the final “step” or “stage” in the property settlement exercise may not have been of any real significance. It is enough to record that the process involved the Court metaphorically “stepping back” to consider whether the proposed orders (arrived at after the application of the first three steps described in Hickey) were just and equitable.
Stanford v Stanford (2012) 87 ALJR 74
109That the above analysis represented the approach that should be adopted by the Family Law Courts had been recognised by the Full Court of the Family Court for many years. In Stanford, however, the High Court challenged the validity of that approach.
110The High Court emphasised that the provisions of FLA s 79 empower the Court to make orders “altering the interests of the parties to the marriage in [their] property” (although the proceedings are described as relating to “property settlement”). As a result, it is essential 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 available for distribution between them]”: see Stanford at [37].
111Of particular importance are [35] to [46] of the plurality decision in Stanford (under the heading The operation of section 79), in which it was emphasised that:
... the requirements of [FLA s 79(2) and s 79(4)] are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
112The plurality then spoke of “three fundamental propositions” that adhere to the power to make property orders under FLA s 79:
a)The first "step" (as was previously the case) is to identify “... according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.” The interest of parties in property cannot be altered unless their existing legal and equitable interests in the property can be identified.
b)Although the court has a very broad power to make orders in relation to property, “it is not a power that is to be exercised according to an unguided judicial discretion”. The judicial discretion must be exercised in accordance with legal principles – including the principles which appear within the [FLA] itself. Further, “because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is ‘just and equitable’ to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist”. Put another way (see Stanford at [39]):
c)The question presented by s 79 is whether those rights and interests should be altered. (Emphasis added).
113The consideration of the various factors in s 79(4) (including the parties’ contributions in all their various guises) does not give rise automatically to a right on the part of one or other of the parties to have the property divided between them by reference to those factors. The just and equitable requirement in s 79(2) must also be considered and applied. Thus: “to conclude that making an order is ‘just and equitable’ only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the [FLA]”.
114I note that the third of the above propositions endorses indirectly pre-existing dicta to the effect that a party to a marriage does not effectively build up an interest in the patrimony of the parties over the duration of the marriage, such that the party may be regarded as having “a presently vested interest of an ‘inchoate’ kind which exists prior to the institution of proceedings under s 79 or the making of an order under that section”: see Chemaisse & The Commission of Taxation & Ors (1990) FLC 92-133 at 77,915. The law in Australia is to the effect that rights arising under s 79 “come into existence when an order is made under that section” and that neither s 79 nor the other provisions of the [FLA] “establish rights, however described, in a party to a marriage over the property of the other spouse either arising from the existence of the marriage or the activities of the parties during that marriage or the institution of proceedings under s 79, where those rights do not otherwise exist under the laws in Australia”: see Chemaisse; at 77,915.
115After referring to the above three propositions, the plurality in Stanford explained at [42] that – in the vast majority of cases – the requirements of s 79(2) are fairly easily satisfied:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4).
116Assuming a "step" or "stage" based approach to the determination of an application brought pursuant to the provisions of FLA s 79 is still appropriate, and subject to my discussion of the Full Court' s decision in Bevan & Bevan [2013] FamCAFC 116 (see below) it is arguable that the effect of the High Court’s decision in Stanford is as follows:
a)The first “step” in the property settlement exercise is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in their property.
b)The second “step” involves ascertaining whether it is just and equitable to make an order altering the interests of the parties in their property. In most cases – relevantly, where the parties have separated and are no longer living in a marital relationship – the underlying assumptions that the parties had to the effect that the existing property ownership arrangements were functional (or perhaps irrelevant) and could be varied by agreement between them, no longer apply. That fact alone should ordinarily persuade the court that it is just and equitable to make orders altering the parties’ interests in their property. It is only after the Court has concluded that it is just and equitable to make such orders that it should proceed to take what might be regarded as the third and fourth "steps".
c)In the third “step”, the court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution-based entitlements of the parties.
d)In the fourth “step”, the court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), 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 as a consequence of the previous step.
e)Finally, the court should consider the effect of the various findings and assessments it has made and make such orders as it considers are just and equitable in all the circumstances. As I have recorded above, my view is that this process does not amount to an opportunity to make a further adjustment; it is an opportunity for the judicial officer to determine finally how, in reality, just and equitable orders might be achieved having regard to all the circumstances of the case.
Bevan & Bevan [2013] FamCAFC 116
117In Bevan & Bevan [2013] FamCAFC 116, ("Bevan #1") the Full Court took the opportunity to discuss the decision in Stanford and what had previously been described as "the four step process" (or, perhaps, "the three step process").
118The plurality in Bevan #1 (Bryant CJ and Thackray J) emphasised that what has been described as "the four step process" is "no more than a means to an end, since the statutory obligation is to alter the existing interests [of the parties in their property] only if it is just and equitable to do so": see [61]. Their Honours added that "any further restatement of ["the four step process"] should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order": see [71].
119The plurality also said, at [72]:
... [Judges] would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.
120The plurality continued (references omitted):
84.Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).
85.This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. ...
86.We do not consider it helpful, and indeed it is misleading, to describe this separate enquiry as a “threshold” issue. We say this for two reasons. First, as was emphasised in Stanford, the initial enquiry is to determine the existing legal and equitable interests of the parties. Secondly, although s 79(2) is cast in the negative and amounts to a prohibition against making any order unless it is just and equitable to do so, the corollary is that if the court does make an order, such order itself must be just and equitable: ... The just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.
87.It will be seen from this discussion that while the s 79(2) and s 79(4) issues must not be conflated, they are intertwined because the text of the [FLA] links them. ... (Emphasis added.)
121In endeavouring to explain how the provisions of s 79(4) might be taken into account in considering the s 79(2) "issue", the plurality referred (seemingly with approval) to a paper by Martin Bartfeld QC entitled Stanford and Stanford – Lots of Questions – Very Few Answers, in which it was suggested that "the contribution factors and the factors under s 75(2) [can be treated as] having two simultaneous characteristics", namely "a discretionary characteristic" and "an evaluative characteristic". Mr Bartfeld argued that "the problem of conflation can easily be overcome by clearly identifying the use to which a factor is being put".
122In a separate judgment in Bevan #1, Finn J said:
171.For my part, and with respect to those who may take a contrary view, I do not consider that much assistance will be provided to the ordinary person, who has to understand the operation of s 79, by the introduction of concepts such as “discretionary characteristics” and/or “evaluative characteristics” in relation to the factors in s 79(4).
172.I am concerned that the use of the expression “discretionary” may be misleading or confusing because the entire exercise of the jurisdiction under s 79 is discretionary, save, of course, when initially identifying the existing legal and equitable interests of the parties. So far as the term “evaluative” or “evaluation” is concerned, it can mean no more, in my view, than the calculation of what alteration is required to one party’s property interest or interests, to take account of matters such as the contributions or the present or future position of the other party.
123I agree with Finn J's comments. In my opinion, the approach proposed by Mr Bartfeld is unhelpful.
124At [89], the plurality in Bevan #1 said:
In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order. Ultimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues.
125Regrettably, the Full Court in Bevan #1 did not discuss directly the clear statement in the final sentence of [42] of Stanford which – as I have indicated above – confirms that the considerations in s 79(4) should be considered after the court has concluded that it is just and equitable to make a property settlement order. Indeed, the plurality quoted [42] of Stanford in [69] of the judgment in Bevan #1 but (intentionally, it would seem) omitted the final sentence of that paragraph. For ease of reference, it is appropriate to repeat [42] of Stanford:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4). (Emphasis added.)
126There is no hint in this paragraph (or elsewhere in Stanford) that the matters referred to in s 79(4) should be taken into account in determining whether it is just and equitable to make an order altering property interests: see, for example, Stanford at [39] and [40]. As is made clear in the final sentence of [42] of Stanford, the relevance of s 79(4) is in relation to what order (if any) should be made.
127The position is made even clearer in Stanford at [51]:
Section 79(4)(a)-(c) required that the contributions which the wife made to the marriage should be taken into account in "considering what order (if any) should be made" under s 79. It may readily be assumed that the length of the parties' marriage directly affected the extent of the contributions of the wife had made. But, as already noted, the inquiries required by s 79(4) are separate from the "just and equitable" question presented by s 79(2). The two inquiries are not to be merged. ... (Emphasis added.)
128In my opinion, the words "if any" (in Stanford at [42], and in s 79(4) itself) do not open the door to the s 79(4) factors or considerations being taken into account when considering the "just and equitable requirement". Indeed, the contrary is the case: the words "if any" mean that the consideration of the "just and equitable requirement" might result in the court being satisfied that no property settlement order is appropriate – and that, as a result, it is unnecessary to proceed to give consideration to the factors contained in s 79(4). Further, the words "if any" recognise that, because the requirements of s 79(2) and s 79(4) are not to be conflated, the court might be minded – after having considered the s 79(4) factors – not to make an order altering the interests of the parties in their property. Such a result is possible, of course, because the "just and equitable requirement" in s 79(2) is based on different criteria or considerations to those set out in s 79(4). Thus, notwithstanding that (for example) "the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship", proper consideration and evaluation of the contribution and s 75(2) factors – in other words, consideration of all the relevant factors contained in s 79(4) – could conceivably lead to the court reaching a conclusion to the effect that the ownership of the parties' property should lie where it has fallen.
129In his paper entitled Stanford and Stanford – Lots of Questions – Very Few Answers, Mr Bartfeld QC suggested that "the fact that a party has made substantial contributions, over a long period of time, which are not reflected in their asset holdings but which are reflected in the other party's assets may found a basis for finding that it is just and equitable for an order to be made". Although this passage was cited by the plurality of the Full Court in Bevan #1, it seems to conflate impermissibly the requirements of ss 79(2) and 79(4): see Stanford at [42] and [51].
130The reality is that it is not necessary to rely on s 79(4) considerations in determining whether the making of a property settlement order is just and equitable within the meaning and contemplation of s 79(2). The matters referred to in [42] of Stanford more than cover the example given by Mr Bartfeld. In other words, the fact that a party has made substantial contributions over a long period of time – which contributions are not reflected in his or her asset holdings (but which are reflected in the other party's assets) – clearly indicates that, upon the ending of the relationship, the "express or implicit assumptions" that the parties made during their relationship to the effect that existing arrangements of marital property interests were sufficient or appropriate no longer apply, and that it can no longer be assumed that any adjustment to those interests can be effected consensually as needed or desired. It is the termination of these "express and implicit assumptions" (on the basis of which one party was content to make substantial contributions over an extended period of time, notwithstanding that those contributions were primarily reflected in the other party's asset holdings) that makes it just and equitable to make a property settlement order, not the unrecognised contributions in themselves.
Bevan & Bevan [2014] FamCAFC 19
131In Bevan & Bevan [2014] FamCAFC 19 ("Bevan #2"), the plurality (again, Bryant CJ and Thackray J) revisited their discussion of Stanford in Bevan #1. Finn J did not refer to either case in her separate judgment, although her Honour said that she agreed generally with the plurality's reasons.
132In Bevan #2, Bryant CJ and Thackray J said:
[42] We also expressed the view, at [84] of [Bevan #1], that, in determining whether it would be just and equitable to make any order altering existing property interests, it would be necessary to have some regard to the matters mentioned in s 79(4), since it was accepted that it may not be considered just and equitable for the husband to be denied any entitlement in circumstances where it is accepted he made a significant contribution to property that may be seen as having provided the base from which the wife built the assets she now holds. However, such a contribution is but one matter to be considered in the exercise of the discretion conferred by s 79.
…
[44]In recognising that contributions can be considered when determining whether it is just and equitable to make any order interfering with existing interests, and in saying that we would give different weight to contributions made at different times, we have in mind this observation made in Stanford (footnote omitted):
36.The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds …
[45]Their Honours there are describing the classic judicial discretion, where no one consideration, and no combination of considerations, is necessarily determinative of the result. Instead, the decision maker is allowed latitude as to the choice of decision to be made …
Chapman & Chapman [2014] FamCAFC 91
133The Full Court's judgment in Chapman & Chapman [2014] FamCAFC 91 was delivered approximately 3 months after the judgment in Bevan #2. The Full Court comprised Bryant CJ, Strickland and Murphy JJ.
134In their joint judgment, Strickland and Murphy JJ supported much of what had been written in Bevan #1. In relation to the possible interplay between s 79(2) and (4), however, their Honours clearly had discomfort with the earlier Full Court's approach. Their Honours said:
[24]…[Mention] should also be made of what the plurality said in [Bevan #1] at [84] and [85]. The opening to the latter paragraph and its reference to a “…requirement to consider the s 79(4) matters…” (emphasis added) in answering the s 79(2) question suggests that those factors must mandatorily considered. Their Honours support that conclusion in [84] by reference to the words used in s 79(4):
…it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, “..such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection.
(Bold emphasis in original).
[25]If the plurality intended that a consideration of the s 79(4) matters is mandatory in answering the s 79(2) question, we respectfully disagree.
[26]The judgment in Stanford points, in our view, to the opposite conclusion. In particular:
•The “…range of potentially competing considerations” and the consequent impossibility of charting the “metes and bounds” of what is just and equitable (at [36]);
•The ready satisfaction of the s 79(2) requirement in “many cases” by the fact of separation (at [42]);
•The statement that “it will be just and equitable” to make an order in “many cases” by reason of the “…choice made by one or both of the parties…” to end the marriage (at [42]);
•Equally, the statement that “it will be just and equitable” to make an order “in many cases” because “…there is not and will not thereafter be the common use of property by the husband and wife” (at [42], emphasis in original);
•The reiteration that: “…nothing in these reasons should be understood as attempting to chart the metes and bounds of what is ‘just and equitable’ (at [46]); and,
•The further reiteration that nothing in their Honours’ reasons is “…intended to deny the importance of considering any countervailing factors which may bear upon what, in all the circumstances of the particular case, is just and equitable” (at [46]).
[28]Further, and crucially, in “applying s 79 in this case” the Justices of the High Court did not themselves take into account the matters in s 79(4). Indeed [51] of the judgment suggests they eschewed those s 79(4) matters relating to contribution. If, as the plurality held in [Bevan #1], it is a “…requirement to consider the s 79(4) matters…” (emphasis added) in determining if, pursuant to s 79(2), it is just and equitable to make any order it is, respectfully, inconceivable that their Honours in Stanford would not have done so.
135In my opinion, their Honours could have added the passages from Stanford at [42] and [51] that I have highlighted above.
136Bryant CJ (who was also a member of the Full Court in Bevan #1 and Bevan #2) commented on the passages from the joint judgment of Strickland and Murphy JJ to which I have referred. Her Honour agreed that "it could not be a requirement that in considering whether in the application of s 79(2) it is just and equitable to make any order at all, s 79(4) must be taken into account", but considered that the reasons in Bevan #1, when read as a whole, did not contradict that proposition. Her Honour accepted at [4], however, that "there may have been some infelicity of expression" in Bevan #1 at [84] and [85].
137Her Honour continued in Chapman as follows:
[5] The point being made by the plurality at [84] is that it would be inappropriate to limit the wide discretion conferred by s 79(2) by requiring the Court to ignore the matters referred to in s 79(4). This is so because the matters referred to in subparagraphs (a) to (c) of s 79(4) in particular, would be likely to embrace much of the factual substratum on which any exercise of discretion would be based.
[6] The infelicity of expression to which I have referred appears in the opening words of [85], which I accept can be read as requiring the Court to consider, in every case, the matters in s 79(4) when determining whether the requirements of s 79(2) have been met. This was not the intention. Rather, the paragraph was designed to highlight the potential for conflation of the two separate issues as a result of the appearance of the words “(if any)” in the opening sentence of s 79(4).
(Emphasis in original.)
138At [9], the Chief Justice concluded:
Whatever differences may exist as to the meaning of [84] and [85] of [Bevan #1], I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2), along with all other relevant considerations …
139For what it is worth, I agree with the conclusions reached by Strickland and Murphy JJ in the passages I have cited from Chapman. For the reasons discussed above, any attempt to consider the s 79(4) matters in answering the s 79(2) question does not simply provide "fertile ground for potential conflation of the two different issues" (which the High Court has warned against); it makes it almost inevitable that a trial judge who embarks upon the exercise will get lost in the luxuriant undergrowth which is certain to sprout from that fertile ground.
140Having recorded the above, I recognise that the Full Court has ruled that:
a)it would be a "fundamental misunderstanding" to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in determining whether it is just and equitable to make an order altering property interests;
b)on the other hand, a consideration of the s 79(4) matters is not mandatory in answering the s 79(2) question;
c)the just and equitable requirement is not "a threshold issue, but rather one permeating the entire process"; and
d)while the s 79(2) and s 79(4) issues must not be conflated, "they are intertwined because the text of the [FLA] links them".
141In the present case, it is unnecessary to have regard to any of the considerations referred to in s 79(4) in order to determine whether it is just and equitable to make an order altering the parties' interests in their property. The parties separated before the commencement of property settlement proceedings, and it is readily apparent that the express and implicit assumptions that underpinned the property arrangements they had made during their cohabitation have been brought to an end by "the severance of the mutuality of the marital relationship". As well, any assumption that the parties may have had to the effect that they could change or adjust their property arrangements consensually (as each may need or desire) no longer applies. As I have indicated below, my view is that it is just and equitable within the meaning of s 79(2) to alter the existing interests held by the parties in their property.
Property A
142Property A was purchased by the husband and Angela in or around 1987. The property comprised approximately five-acres. The purchase price was between $50,000 and $55,000.
143Soon after the purchase of Property A, a large, four-bedroom home was constructed on it. The cost of building the house was approximately $260,000. A block of land that the husband and Angela had owned in [Suburb F] was sold to help pay for the construction of the house. In order to further assist with the costs associated with the construction of the house, an additional amount of between $30,000 and $40,000 was borrowed. This borrowing was secured by a mortgage over Property A.
144It is not in dispute that Property A had been purchased and the house on it constructed before the husband and the wife met and commenced their relationship. Nor is it in dispute that the husband and Angela moved into the house in late 1989. As I have said, Angela died a few months later (in March 1990).
145When the husband and the wife commenced their relationship, the gardens on Property A were barely established. Even before the parties commenced living together in early 1992, the wife travelled to Property A on weekends and worked hard to clean the house, plant trees and do gardening.
146The gardens on Property A were still not well established when the wife moved in to the property. Over the next few years, the husband and the wife acquired and planted approximately 1000 native trees on Property A. They worked hard in this endeavour, which took considerable time over many weekends and years.
147The wife, who had been a keen gardener before meeting the husband, took on the primary responsibility for establishing and maintaining the gardens and other trees planted on Property A. The wife said, and I accept, that she brought with her to Property A two truckloads of plants when she moved there. The wife also said, and again I accept, that she put much time, and considerable effort, into improving and beautifying the garden, as well as maintaining it. The husband mowed the lawns and kept them tidy.
148The husband and the wife also extended a shade house on the property and constructed an aviary.
149According to the husband, the lawns and paths at Property A had been established prior to the wife commencing to live there. Similarly, large numbers of trees (including fruit trees) had been planted and a rose garden had been established. I accept that some work had been done to make Property A more attractive prior to the wife's arrival. I find, however, that the wife's descriptions of the state of the property when she arrived and the work that she did thereafter are accurate. Her evidence in this regard is corroborated by the photographs of the property attached to the parties' affidavits, and the husband conceded that she made a contribution to the conservation and improvement of the house and garden: see husband's affidavit sworn 16 April 2009 at [94].
442Irrespective of the characterisation of the payment, the Court has a discretion as to how it should be dealt with in the property proceedings. I am satisfied that it was utilised by the wife to maintain herself and that it should not be taken into account in these proceedings – save to acknowledge that the husband did indeed provide these funds to the wife and that they appear to have come from the proceeds of the sale of Dekker Holdings' leasehold interest in Company D’s former business premises at D Street, Coastal Town M.
Preliminary considerations
443Before proceeding further with what might be perceived as the next relevant steps in the property settlement "exercise", it is pertinent to record that I do not propose to proceed with that exercise by applying a general assumption to the effect that the parties' rights to or interests in their property should be different from those that now exist. I reject that assumption. In other words, I recognise that the core issue for determination in these proceedings is whether the parties' rights to and interests in the property contained in the property schedule should be altered: see my discussion of the High Court's decision in Stanford above.
444Is also pertinent to record that consideration of the various factors in s 79(4) – including the parties' contributions in all their various guises – does not automatically give rise to a right on the part of either of the parties to have the property contained in the property schedule divided between them by reference to those factors. The "just and equitable" requirement in FLA s 79(2) must be (separately) considered and applied. I am conscious of the need not to conflate the requirements or considerations contained in s 79(2) on the one hand, and s 79(4) on the other.
445As explained above, however, the parties in this case separated well before the commencement of property settlement proceedings. It is readily apparent that the express and implicit assumptions that underpinned the property arrangements they had made during their cohabitation have been brought to an end by the "severance of the mutuality of the marital relationship". Further, any assumption that the parties may have had to the effect that they could change or adjust their property arrangements consensually (as each may need or desire) no longer applies. It follows that it can be considered just and equitable that the Court should make a property settlement order (which order is to be determined by applying FLA s 79(4), including the s 75(2) factors): see my discussion of the High Court's decision in Stanford above. Indeed, I find that, in the circumstances of the case now before me, it is just and equitable within the meaning of FLA s 79(2) to alter the existing interests held by the parties in their property.
Concession regarding approach to assessing the parties' contributions
446During his closing address, senior counsel for the husband conceded that the issue of contributions should be approached on a "global" basis, as opposed to an "asset by asset" approach. This is a case in which the wife's contributions were predominantly as homemaker. Given the length of the relationship and the overall circumstances of the case, it is not practicable – nor indeed is it appropriate – to endeavour to "audit" the receipt and application of most of the moneys utilised by the parties during the course of their relationship.
Contribution
447Having identified the pool of property available for distribution between the parties, I now turn to consider the next "step" of the property settlement exercise – namely, the identification and assessment of the parties' contributions in all their various guises.
448As senior counsel for the husband submitted, the parties married comparatively later in life. The husband already had Property A and his (then 50 percent) interest in Company D. For her part, the wife had recently entered into a personal insolvency agreement with her creditors under Pt X of the Bankruptcy Act 1966, and her liabilities exceeded the value of her assets. She had very modest assets indeed.
449I have described the acquisition of Property A elsewhere in these Reasons. Although there was a small mortgage over the property at the time the parties commenced cohabitation, it was later paid out from moneys derived from the husband's superannuation entitlements.
450The wife made no financial contribution to the acquisition of Property A, or, indeed, to the establishment of Company D. She made no, or almost no, financial contribution to the maintenance and improvement of Property A. Nor did she make any financial contribution to the running of Company D (although she did some work for the business from time to time – for which she was paid – and loan to small amount of money to the business which was soon repaid). In broad terms, the wife kept her savings and any other moneys to which she became entitled separate from what might perceived to be the parties' joint funds (which, almost without exception, were provided by the husband).
451The husband's case was that the wife kept her finances strictly separate from their "joint" finances. Mr Nicholls pointed to the manner in which the wife had managed the shares and funds inherited from her mother and numerous comparatively small (and at times inexplicable) actions on the part of the wife illustrating her attitude in that regard. For example, on 29 June 2006, the wife withdrew $5000 from the parties' joint ANZ account. She transferred the money into an account controlled by her. In cross-examination, she said that the transfer comprised a "repayment" to her father of moneys that the husband had borrowed from him in the past (being two amounts of $2000 and one amount of $1000): see exhibit H3. The fact of the matter is, however, that the wife's father had died in the previous year.
452On the other hand, the wife said that "some of my moneys" went in to the joint account. For example, she said that her income from Company D was deposited into the joint account and that her tax refund (amounting to approximately $6700) was deposited into the account in April 1997.
453This was a "traditional" marriage, in the sense that the husband was and was acknowledged to be the breadwinner and the wife was and was acknowledged to be the homemaker.
454The wife described in great detail the non-financial contributions that she made to the maintenance and improvement of Property A. She worked long hours on the property and in establishing and maintaining its extensive gardens. The husband also worked in these activities, but to a lesser extent than did the wife. Other family members also assisted.
455Some of the work done by the wife was heavy, such as planting trees, burning off, fertilising and pruning and spraying the trees. The wife emphasised that she brought two truckloads of plants with her when she moved to Property A, including a large variety of palms and ferns and other exotic plants. She also helped the husband to extend the shade house, to construct an aviary, to construct a gazebo and a large enclosed steel chicken coop, and also to put in steel trestles for grapevines. The wife also painted most of these structures.
456The husband also did heavy work about the property, and his family members also assisted.
457The husband did not dispute that the wife made a significant contribution to the conservation and improvement of Property A (comprising the house and gardens). Similarly, in his affidavit sworn 16 April 2009 at [98]-[99] he said that the wife –
… did the work to keep the household running. She did all the shopping for food and household supplies, she did the laundry, the cleaning and tidying of the house.
Over the last 10 years of the marriage (about 1996 to 2006) we employed a cleaning lady who came once a fortnight and did the dusting and the floors. After this time, the wife did not have to do so much heavy work in the house, but she still continued as the main homemaker.
458He added at [106]:
The wife was welcomed into my family, and got on well with all of my children. She was also a grandmother to my children's children. We had many happy family celebrations during the marriage, involving my children and grandchildren. We also had an annual Christmas lunch every year at [[Property A]]. The wife prepared and cooked the meals for these occasions, with the help of several of my daughters.
459Again, the husband said:
[130]The wife did all the cooking of the evening meals. I occasionally made soup in the winter. We did our own breakfast. I had lunch at work. I worked on Saturdays until later on. She usually cooked the evening meal. She is a good cook. She did all the grocery shopping and buying the household supplies from our joint account.
[131]The wife did the day-to-day cleaning of the dishes, tidying up, wiping the benches, all of the day to day tasks and making the bed. She continued to do this right up until separation.
460The evidence reveals that the parties also received a "stream" (to use senior counsel for the wife's expression) of visitors from overseas and elsewhere. They accommodated the visitors (sometimes for extended periods) and provided them with appropriate hospitality. Both parties played their role in this regard, but it is likely that the wife's role was more significant because she was the "homemaker" and the husband had work commitments.
461The wife catered and cooked for many parties and family gatherings for the husband's large family. It is fair to say, however, that she did not (or did not usually) undertake these tasks alone. The husband's daughters "pitched in" and assisted her.
462In his affidavit material, the husband seemed to suggest that at times the wife had failed to provide him with as much support and assistance as he had expected or (it would appear) as might have been considered reasonable: see, for example, husband's affidavit sworn 16 April 2009 at [124] and [125]. I reject the husband's evidence or suggestion in this regard and find that the wife was highly supportive of the husband at all times prior to separation, and that she assisted him as much as she was able. In relation to the husband's rather petty and somewhat spiteful assertion that the wife was "really upset" about him coming home from hospital after he broke his leg in 2002, I accept the wife's evidence to the effect that she was surprised, but not upset, that he had come home. His leg was in a splint and he could not walk. The wife had no notice that he was about to come home and was caught unawares. She had to make arrangements at short notice to manage the husband's invalidity.
463For about five years early in the relationship, the wife worked on a part-time basis at Company D. She assisted with some bookkeeping and helped, to some extent, with the running of the office. She also organised staff barbecues which occurred every six or so weeks. She occasionally assisted at Company D after that time.
464The wife was involved in some business meetings associated with Company D. Relevantly, she was involved in such meetings in or about 2002 when Company D was encountering financial difficulties and was experiencing internal and external pressures.
465There can be no doubt, however, that the wife's contributions were predominantly made in the role of homemaker. Mr Castiglione did not suggest otherwise. Those contributions were significant and must be given appropriate weight.
466I have read the affidavits of the husband's daughters, Melissa Horn and Marion Gilbert. They are unnecessarily lengthy affidavits which, in my opinion, are unfairly critical of the wife. As well as much that is irrelevant, they contain a number of inconsequential and churlish observations. For example, the allegations that the wife may have misused funds were not pursued at trial and senior counsel for the husband did not cross examine the wife about them. I note, as well, that the wife's evidence (which I accept) spoke of the witnesses' role in excluding her from her home in September 2010 – well after these proceedings began in April 2008. The witnesses' affidavits were sworn in April 2009 and were obviously not updated after this Court made orders on 8 October 2010 permitting the wife to return to Property A. The behaviour of Ms Horn and Ms Gilbert during the period leading up to and immediately after the exclusion of the wife from her home in September 2010 was reprehensible. I accept, however, that members of the husband's family assisted him over the years in many different ways. I also accept that much work was done at Property A to improve the property before the commencement of the wife's relationship with the husband.
467There can also be no doubt that the husband's direct and indirect financial contributions to the acquisition, conservation and improvement of the property now available for distribution between the parties vastly outweighed those of the wife. He (and Angela) had established Company D well before he met the wife, and Hans junior and Pim were already working in the business. As the years passed, and after Phillips Parish left the business, Hans junior and Pim continued to play a very important role in Company D. Those of the husband's children who swore affidavits in these proceedings spoke of the business as being regarded as that of the husband, Hans junior and Pim, and that is how it no doubt appeared to them. After separation, the husband retired, Company D transformed into Company W and Hans junior and Pim (with a new "partner") continued to do much the same work as they had done at Company D.
468It is inappropriate and unhelpful to over-analyse the parties' respective contributions. In particular, it is inappropriate and unhelpful to endeavour to attribute percentage-type splits between the parties on the basis of their respective contributions at different times in the relationship. To do so is to risk losing sight of the wood for the trees, as it were. There are, however, three broad areas of the evidence that bear revisiting in the context of assessing the parties respective contributions. These comprise the matters discussed under the general headings of Pim’s claim, the husband's superannuation entitlements and the wife's inheritance.
469In my opinion, it cannot be ignored that Pim has made a significant contribution to that part of the husband's property now in existence which reflects his prior interest in Company D. I have rejected Pim’s claim to be paid $530,000 for the reasons already given, but I have accepted that the husband has an amorphous or moral obligation to pay Pim some moneys to reflect his ill-defined "interest" in Company D. The actual amount that the husband should have to pay Pim is incapable of quantification in these proceedings. It is offset, to some extent, by the fact that the husband effectively gave his share of the goodwill in Company D to Pim upon the commencement of Company W.
470Similarly, the facts surrounding the wife's inheritance and the manner in which she dealt with it cannot be ignored. As discussed above, the evidence reveals that the wife had available to her very substantial sums of money both prior to and after separation. Leaving aside the margin calls and the catastrophic loss of her investments, the fact of the matter is that the wife saw fit to use the funds from her mother's investment to benefit her sons in preference to benefiting the parties or, indeed, to providing for her own future. That was her right, of course, but they were not decisions in relation to which the husband was consulted or allowed any (or any significant) input. I do not regard the manner in which the wife dealt with her inheritance as some form of "negative" contribution – indeed, the moneys were never contributed to the "patrimony" of the parties at all. In my opinion, however, the manner in which she dealt with the inheritance adds greater weight to the contributions made by the husband than might otherwise have been the case.
471As discussed above, the husband utilised significant amounts of money between May 2010 and the date of trial for purposes that are largely unexplained. I concluded that something in the order of $50,000, if not more, falls within this category. It is clearly inappropriate to "add back" moneys used by the husband in this way, and I have not done so. It seems to me to be appropriate to treat these moneys in a similar manner to the approach that I have taken with the wife's inheritance. The husband used the moneys for his own purposes during the course of the proceedings. Had he not done so, it is arguable that they would have been available for distribution between the parties. The wife was not consulted in relation to the husband's expenditure in this manner. Just as the manner in which the wife dealt with her inheritance adds greater weight to the contributions made by the husband than might otherwise have been the case, so the use of these funds by the husband adds greater weight to contributions made by the wife than might otherwise have been the case. I accept, however, that the amount involved is relatively modest – particularly when regard is had to the fact that the husband spent it over a period of approximately 3 years. In my opinion, it does little more than offset, to some extent, the effect of the manner in which the wife dealt with her inheritance.
472An alternative way to deal with the wife's inheritance and the husband's use of the funds referred to above would be to deal with those subjects when considering the s 75(2) factors. They could, for example, be relevant under s 75(2)(b) or (o). In my opinion, they are better dealt with under the general heading of Contributions, but if I am wrong in that regard, I have no doubt that the final result would be little different. In other words, and by way of example only, if the percentage split on the basis of contribution were to be higher from the wife's point of view (by ignoring the manner in which she dealt with her inheritance), then any adjustment under s 75(2) would be lower (to take account of the inheritance). One way or the other, the end point is likely to be the same.
473In Bremner& Bremner (1995) FLC 92-560 (at 81,588) and Way & Way (1996) FLC 92-702, the Full Court cited with approval a passage from the judgment of Fogarty J in Money & Money (1994) FLC 92-485 (at 81,054), as follows:
… an initial contribution by one party may be “eroded” to a greater or lesser extent by the later contributions of the other party, even though those later contributions do not necessarily at any particular point outstrip those of the other party.
474In Pierce & Pierce (1998) 24 FamLR 377 (at paragraph 27), the Full Court sought to put Fogarty J’s quotation “in its correct context”. After referring to an expanded passage from Fogarty J’s judgment in Money (Supra)– in which his Honour said that: “… the respective contributions of the parties over a long period of marriage ‘offset’ the significance which might otherwise be attached to a greater initial contribution by one party” – the Full Court said (at paragraph 28):
In our opinion, it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution … regard must be had to the use made by the parties of that contribution.
475The relevance of initial contributions has been discussed more recently in Williams & Williams [2007] FamCA 313 . Before referring to dicta from Money (Supra) and Pierce (Supra), the Full Court said (at paragraph 26):
We think that there is force in the proposition that a reference to the value of an item as at the date of commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties. Thus, where the pool of assets available for distribution between the parties consists of, say, an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But, in so doing, it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.
476In my opinion, the "myriad of other contributions" made by each of the parties during the course of their relationship has served to offset, dilute or erode – to some extent – the significance of the initial financial contributions made by the husband.
Conclusion in relation to contribution
477The reality is that an assessment of the parties' respective contributions (particularly after a relationship lasting approximately 14 years, and a separation of some seven or eight years) is not a strict mathematical or accounting exercise. It is not always possible to balance 'like with like', in that the parties' different forms of contribution can have very different characteristics and may carry very different weight. Similarly, the timing of the forms of contribution can be telling. In a very broad sense, the exercise is what might be considered an imprecise, macrocosmic one – as opposed to a detailed, microcosmic analysis of the source and destination of each dollar passing through the parties' hands and their every action, inaction or reaction (however small or insignificant). Put another way, "the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of [a] particular relationship": see Dickons & Dickons [2012] FamCAFC 154 at [24]; see also Bolger & Headon [2014] FamCAFC 27 at [23] to [28]
478In all the circumstances (including the comparatively lengthy period of cohabitation and the period between separation and the date of trial), I conclude that between 25 percent and 27.5 percent of the overall property pool should be awarded to the wife on the basis of her contributions from the commencement of cohabitation to the date of trial, and the balance to the husband on the same basis. It would be intellectually dishonest of me to choose either of those two percentages. I propose, therefore, to adopt the midpoint of the two, being 26.25 percent.
Section 75(2) factors
479So far, in considering the question of property settlement, I have dealt with the identification of the parties' property and related issues. The Court has power to make an adjustment to a party's property settlement entitlement based on such contributions in order to take account of, among other things, both parties' respective means and needs. The Full Court has been critical of shorthand terms being used to describe this step in the property settlement exercise, preferring to refer to it simply as “the section 75(2) factors”: see Clauson & Clauson (supra). In essence, section 75(2) is concerned with the process of arriving at a just and equitable result: see, in that regard, Waters & Jurek (1995) FLC 92-635.
480Both Mr Castiglione and Mr Nicholls conceded that the vast majority of the section 75(2) factors are not relevant in the context of these proceedings. As indicated earlier, the parties are no longer young. Each has health problems and neither has any (or any significant) earning capacity. Clearly, each is entitled to a reasonable standard living in the circumstances.
481It was conceded that the only factor which could warrant an adjustment take account of the section 75(2) factors as that which relates to "capital disparity".
482Section 75(2)(o) requires the Court to consider “any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account”. In my opinion, the disparity in the capital position of the parties reached as a result of the preliminary “split” of the property pool on the basis of contribution alone is such a factor. Alternatively, it is relevant when regard is had to s 75(2)(b) or s 75(2)(g).
483There have been many cases over the years in which the Family Court has seen fit to make an adjustment to a party’s entitlement on the basis of contribution alone to take account of a relevant capital disparity. See, for example, G & G (1984) 9 Fam LR 969 at 981, In the Marriage ofPrestwich (1984) 9 Fam LR 1069 at 1072, In the Marriage of Aleksovski (1996) 20 Fam LR 894 at 904 and 909, In the Marriage of Brandt (1997) 22 Fam LR 97 at 110, VJ & CJ (1997) 22 Fam LR 166 at 201, C & C (1998) 23 Fam LR 291 at 518 and In the Marriage of Dickson (1999) 24 Fam LR 460 at 473-4, and In the Marriage of Collins (1990) 14 Fam LR 563 at 565-70. See also the judgment of Kay J in Farmer & Bramley (2000) 27 Fam LR 316 at 330-341
Conclusion as to Section 75(2) Factors
484Having regard to all the evidence before me, I am persuaded that it is appropriate to make an adjustment on the basis of the s 75(2) factors. I am so persuaded because the purpose of the s 75(2) adjustment is to assist the Court in the process of arriving at a just and equitable result. To refuse to make an adjustment in the present proceedings would be to run the risk of making orders which are neither just nor equitable.
485In my opinion, the only significant s 75(2) factor is the enormous disparity in the capital position of the parties reached as a result of the distribution on the basis of their respective contributions.
486I am very conscious of concepts such as those that were described by Nygh J, in early cases, as “palm tree justice” or “a soup kitchen approach” (in relation to subjects such as the s 75(2) adjustment). Nevertheless, the cases referred to above make it clear that the Court is entitled to give appropriate weight to capital disparity where it is relevant. In the present circumstances, it seems to me that a comparatively modest adjustment to take account of this consideration is fair and reasonable.
487When I have regard to the above, together with the other matters discussed under the general heading of the section 75(2) factors, I conclude that an appropriate adjustment of the parties' entitlements on the basis of contribution alone is to increase the wife's entitlement by 7.5 percent.
488It follows that the overall distribution of the property between the parties should be on the basis of 33.75 percent to the wife (being 26.25 percent for contribution plus 7.5 percent to take account of the section 75(2) factors) and the balance (being 66.25 percent) to the husband.
489In G & G [2004] FamCA 1179, the Full Court said (in relation to an exercise of judicial discretion such as that which I have performed in the previous paragraph):
[73]Words will often (perhaps always) fall frustratingly short of an incontestable explanation for any particular exercise of discretion – or, for that matter, for a finding by an appellate court that a particular exercise was wrong. All the relevant factors can be described, with modifiers in abundance, but still the analysis will beg the question, “Yes, but why that figure and not another?” or “Why was that the range rather than some other parameters?”
[74]The deficiency is unavoidable. When there are a number of “right” results available, the explanation for the choice of one over others can never be incontestable. Nor can the reasons for saying that a result is outside a range be beyond challenge. The very nature of a discretionary exercise that ascribes mathematical consequences to a batch of actions and events amenable only to descriptive evaluation, means that it is impossible to place beyond argument the explanation for all the steps to the ultimate selection of result. ...
[81]…(In) respect of virtually every exercise of discretion, by definition, it will not be possible to deliver a judgment which excludes reasoned argument that another result was available.
490For what it is worth, I concur with the Full Court’s view as expressed in the passage from G & G (supra) quoted above. The “balancing exercise” that the court must perform is rarely an easy or non-contentious one.
Just and equitable?
491As indicated above, the High Court in Stanford explained that the consideration of the various factors in s 79(4) – which includes reference to s 75(2) factors – does not automatically give rise to a right on the part of one or other of the parties to have the property divided between them by reference to those factors. The requirement contained in s 79(2) must be considered and applied.
492In this case, the husband and the wife had separated before the commencement of property settlement proceedings. It is arguable, therefore, that the express and implicit assumptions that underpinned the property arrangements that they had made during their cohabitation had been "brought to an end by the voluntary severance of the mutuality of the marital relationship". It follows that it can be considered just and equitable that the court make a property settlement order (which order is to be determined by applying s 79(4))
493In any event, I propose to (metaphorically) step back and consider whether the outcome achieved by my consideration of the parties' contributions and the s 75(2) factors has brought about a just and equitable result.
494The Full Court has cautioned against assessing the s 75(2) factors in age terms, without considering the real impact of any proposed adjustment. In other words, the real impact in money terms is "the critical issue": see Clauson & Clauson (1995) FLC 92-596.
495If the wife is entitled to 33.75 percent of the property pool, then she is entitled to property to the value of $911,603 (being 33.75 percent of $2,701,047). The net value of property currently in her possession or under her control (including the amount of $227,318 "added back" in respect of legal fees) is $397,488.
496In the present case, the s 75(2) adjustment equates to approximately $202,580 (being 7.5 percent of $2,701,047). I am satisfied that such an adjustment is proper. Indeed, I am also satisfied that the adjustment is proper when regard is had to the differential between the wife's overall entitlement (being 33.75 percent) and the husband's overall entitlement (being 66.25 percent), which differential equates to 32.5 percent of the property pool (or approximately $877,840). In very broad terms, the husband will receive approximately double what the wife is to receive by way of property settlement. In my opinion, such a result is just and equitable.
497I am very conscious that justice and equity must be done to both parties, and I am satisfied that the split that I have proposed achieves that result.
498It follows that the wife will receive property to the value of $911,603 (being 33.75 percent of $2,701,047) and the husband will receive property to the value of $1,789,443 (being 66.25 percent of $2,701,047).
Orders
499It is apparent from the property schedule that the wife is to retain the following:
a)JBW Goldman Sachs investment;
b)JBW share portfolio cash trust;
c)ANZ progress saver;
d)ANZ access account (opened in November 2012);
e)Subaru motor vehicle;
f)her furniture, chattels and effects;
g)her artwork, stamps and jewellery;
h)her superannuation entitlements; and
i)as an "add back", her paid legal fees.
500The total value of the above items is $397,488. Thus, if the wife is to receive property to the value of $911,603, the husband will be required to pay to her the sum of $514,115.
501It is also apparent from the property schedule that the husband proposes to retain the following:
a)Property A;
b)his "interest" in the goodwill of Company D (as discussed above);
c)his NAB account;
d)his Nissan Patrol motor vehicle;
e)his caravan;
f)his furniture, chattels and effects;
g)his artwork and plate collection;
h)his superannuation entitlements; and
i)as an "add back", his paid legal fees.
502The total value of the above items is $2,303,559. As explained above, however, he will be required to pay to the wife the sum of $514,115.
503The parties agreed that the following orders should be made by consent (see exhibit J1):
a)The husband transfer to the wife all his right, title and interest in the following:
i)wife's Subaru motor vehicle;
ii)the furniture and chattels and the artworks and jewellery which she has in her possession;
iii)the wife's BT Super Wrap Superannuation Fund;
iv)the wife's JB Were Share Portfolio Cash Trust Account; and
v)the wife's ANZ Progress Saver account.
b)The wife transfer to the husband all her right, title and interest in the following:
i)the husband's Nissan Patrol motor vehicle;
ii)the husband's caravan;
iii)the furniture and chattels and the artwork and plate collection in the husband's possession;
iv)the wife's interest in the husband's share portfolio; and
v)the wife's interest in the husband's ING Masterfund Superannuation Fund.
504I otherwise propose to make orders to the following effect:
a)The applications by the husband and/or Pim for a declaration pursuant to s 78 to the effect that the husband, the wife or both of them owe Pim the sum of $530,000 be dismissed.
b)The applications by the husband and/or Pim for a declaration pursuant to s 78 to the effect that the husband holds 30 percent of the proceeds of sale of Company D on trust for Pim be dismissed.
c)The applications by the husband and/or Pim for an order to the effect that the husband, the wife or both of them pay Pim the sum of $530,000 be dismissed.
505I propose to hear counsel in relation to the precise orders necessary to give effect to these Reasons. I also propose to hear counsel in relation to –
a)the manner in which the orders for partial property settlement made on 10 May 2013 (pursuant to which the parties received or were permitted to receive $100,000 each by way of partial property settlement) should be reflected in the final orders made pursuant to these Reasons; and
b)all issues in relation to costs.
I certify that the preceding [505] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable CourtAssociate
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