DENTON & DENTON
[2010] FMCAfam 1282
•6 October 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DENTON & DENTON | [2010] FMCAfam 1282 |
| FAMILY LAW – Property adjustment – asset pool – failure to disclose – contributions – costs. |
| Family Law Act 1975, ss.4, 75(2), 78, 79, 79(4), 117 (2)(a), (b), (c), (d), (e), (f), 106A EvidenceAct1995 (Cth), s.131 Federal Magistrates Act1999 (Cth) |
| Jones & Dunkel [1959] HCA 8 Brown & Dunn (1893) 6 R 67 (HL) Weir & Weir [1993] FLC 92-338 Black & Kellner [1992] FLC 92-287 Calderbank & Calderbank [1976] Fam 93 Kennon & Kennon [1997] FamCA 27 Boyce & Boyce [2007] FamCA 1165 Bingham & Bingham [2009] FMCAfam 99 Whelan & Whelan [2010] FamCA 530 Rosati & Rosati [1998] FamCA 38 Guinti & Guinti [1986] FLC 91-759 Brease & Brease (1998) FLC 92-793; 22 FamLR 518 Oriolo & Oriolo [1985] FLC 91-653 Livesey & Jenkins [1985] All ER 106 D & D [2003] FamCA 473 Kucera & Kucera [2009] FMCAfam 1032 M & M [2006] FMCAfam 424 Kennon & Kennon (1997) FLC 92-757 Fisher (1986) 91-767 Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 |
| Applicant: | MS DENTON |
| Respondent: | MR DENTON |
| File Number: | PAC2788 of 2009 |
| Judgment of: | Harman FM |
| Hearing dates: | 30 September, 1 & 6 October 2010 |
| Date of Last Submission: | 6 October 2010 |
| Delivered at: | Parramatta |
| Delivered on: | 6 October 2010 |
REPRESENTATION
| Counsel for the Applicant: | Ms Druitt |
| Solicitors for the Applicant: | Watson Stafford Zipkis |
| Counsel for the Respondent: | Ms Friedlander |
| Solicitors for the Respondent: | Harb Lawyers |
ORDERS
That within 28 days the husband is to arrange for the removal from the premises at Property K, at his own expense, all items of plant, equipment or property upon the grounds of that home including but not limited to an above ground pool shell. And upon such uplift and removal the husband should be declared the sole and absolute owner at law and in equity, as against the wife, of those items.
In the event that the above items are not removed within 28 days of these orders, then the wife is to obtain a quote for removal of those items and is at liberty to then cause the removal and/or sale of disposal, and if sold is to account to the husband for any net balance that arises after deduction of removal costs. And if a net loss results, such amount is to be deducted from the sum to be paid by the wife to the husband pursuant to these orders.
By 21 January 2011 the wife shall:
(a)Discharge the mortgage over the property at Property K, being all that parcel and certificate of title, folio identifier [omitted]; and
(b)Pay to the husband, subject to order 4 hereof, the sum of $142,828 representing 20 per cent of the net equity in the home.
That from the sum of $142,828 to be paid by the wife to the husband, the wife shall deduct there from and simultaneously attend to payment of:
(a)The debt recorded by writ on title of the property, being an unquantified debt, to [Ms T] Physiotherapy and Sports Injury Centre; and
(b)Any net loss arising from the removal and disposal of items in accordance with order 2 hereof.
That upon the wife’s compliance with order 4 hereof, that the husband shall forthwith and contemporaneous there with do all things, sign all documents and give all consents and authorities necessary to transfer to the wife, or as the wife may direct in writing prior to settlement, all of the husband’s right, title and interest in the Property K property.
In the event that the wife should fail, neglect or refuse to comply with order 4 hereof by 21 January 2011, then the property shall be listed for sale and sold by private treaty using a real estate agent or agents and a solicitor or conveyancer agreed between the parties and at a listing and ultimate sale price agreed between the parties or otherwise as provided for by these orders.
I make orders in accordance with paragraph 9 of the wife’s amended initiating application filed 21 January 2010 regarding the mechanics of the sale of the property if required.
Upon completion of any sale of the matrimonial home each of the parties shall do all things, sign all documents and give all consents and authorities as may be necessary to cause the net proceeds of sale of the home to be distributed in the following manner and priority:
(a)In payment of all costs and expenses of sale including legal costs on sale and discharge of mortgage and agents commission.
(b)In discharge of the mortgage encumbering the property.
(c)In payment of all outstanding council and water rates.
(d)In payment to the wife of an amount equal to 80 per cent of the net proceeds then remaining.
(e)In payment out of the debt referred to above to Ms T.
(f)In payment or reimbursement to the wife of any net loss incurred with respect to the sale and/or removal of items in accordance with this order.
(g)As to the balance then remaining to the husband.
That pursuant to section 78, that each of the husband and the wife shall, as against the other, be declared the sole owner at law and in equity of:
(a)All items of furniture, furnishings, chattels and personalty in their respective possession, custody or control. And for the purpose of this order, the contents of the Property K property shall be taken to be in the wife’s possession.
(b)Any motor vehicle or motor vehicles in their respective possession.
(c)All funds held by them, whether in cash or on deposit with any financial institution.
(d)All contributions to or benefits and entitlements arising from membership of any fund of insurance or superannuation.
Make section 106A order in the usual form authorising a registrar to sign documents in the place of any party who defaults.
I dismiss all outstanding applications and responses.
I make an order for the return of subpoenaed material upon the expiration of the appeal period on the usual terms.
Accordingly, I make the following further orders:
That the husband shall pay the wife’s costs of these proceedings from 4 September 2009 to conclusion, such costs assessed and fixed in the sum of $26,000.
The sum of $26,000 to be paid by the husband shall be and is hereby a charge upon the husband’s right, entitlement, and interest pursuant to property adjustment orders made by me this day.
The wife shall be and is hereby authorised to deduct from any moneys to be paid by her to the husband pursuant to the substantive property adjustment orders made today, and to retain those funds for application towards payment of her legal fees, and or in the event that the sale of the property proceeds, such funds to be deducted from the husband’s entitlement on distribution and paid instead to the wife.
IT IS NOTED that publication of this judgment under the pseudonym Denton & Denton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC2788 of 2009
| MS DENTON |
Applicant
And
| MR DENTON |
Respondent
REASONS FOR JUDGMENT
These are proceedings involving competing applications for property adjustment between a husband and wife.
The applicant in the proceedings is the wife, Ms Denton and the husband is the respondent, being Mr Denton. As is often the case, although thankfully not always the case, at the commencement of the evidence in the matter there was little, if any, agreement between the parties, other than what would appear to be, and not only between the parties but also a number of their support witnesses, a degree of mutual dislike.
There is very little agreed fact in the case, but at least some agreed fact, particularly in relation to the early portions of the relationship between these parties, which relationship was, indeed, lengthy.
The issues in dispute between the parties are more substantial. Many of them turn on legal and procedural issues, but they also involve and manifestly contain issues of fact.
The issues in dispute, as far as one can ascertain them, would appear to be as follows:
a)what assets should be included in the asset pool
b)contest as to the value of the matrimonial home and that value is one of three - whether the property is worth $825,000 or $900,000, as alleged by the husband or $730,000, as alleged by the wife
c)the existence and value of a number of motor vehicles
d)whether a sum of up to $30,000 in cash alleged to be held by the husband should be found to exist
e)the quantum of the sale proceeds and sale price of a property that had been owned by the parties until 2006 in Queensland, and how those funds have been applied
f)the existence and value, if any, of a worker’s compensation claim of Mr Denton, which only came to light during the course of evidence at the trial
g)has there been a failure by either of the parties to disclose and account for assets and, accordingly, should there be inferences or treatment of this case following authority such as Jones & Dunkel [1959] HCA 8, Weir & Weir [1993] FLC 92-338 and Black & Kellner [1992] FLC 92-287.
h)when did the parties separate?
i)What debts exist at present, and what debts should be taken into account, it being clear that there are at least three debts spoken of in the proceedings, leaving aside the parties’ respective legal fees, being:
i)a writ on title of the matrimonial home secured against the husband’s interest in the property and relating to a debt, the value of which is not known;
ii)an alleged loan by Mr Denton’s sister and brother‑in‑law to him; and
iii)a further loan alleged by Mr Denton from a friend.
j)whether the wife has engaged in gambling and, if so, the impact of that and whether it constitutes wastage
k)whether the husband has engaged in behaviour that would give rise to an adjustment of contribution, whether based on the line of authorities commencing with Kennon or otherwise
l)the contributions of the parties generally; and,
m)what adjustment, if any, should occur with respect to section 75(2) factors.
The parties’ proposals
These proceedings, as I have indicated, were commenced by the wife by an application filed in June 2009. An amended application was subsequently filed 21 January 2009, and which sought orders that the wife pay to the husband within 42 days or six weeks the sum of $85,000, which purported to represent somewhere in the order of
10 per cent of the value of that property. And a further order was then sought with respect to a splitting of superannuation entitlements, an adjustment with respect to the value of the husband’s business and motor vehicles retained by the husband, together with any shareholdings, of which there is no evidence of any existing, and section 78 declarations regarding the balance of property in each party’s possession.
The husband’s response, which is somewhat departed from in submissions at the closing of this case, was filed on 14 August 2009, and sought a sale of the matrimonial home and a 60/40 per cent division of the proceeds of sale in his favour. The balance of orders sought, other than the absence of any claim for adjustment with respect to the value of any other assets, were not dissimilar to those initially proposed by the wife.
At the closing of submissions, the wife’s case remained very much where it was and, in accordance both with those submissions orally and in a case outline, proposed, in effect, an 80 to 90 per cent adjustment in the wife’s favour of the known pool of assets, a phrase which has some moment as regards the wife’s case, whereas the husband’s case ultimately proposed an equal division of the value of the matrimonial home, either by payment to him or by its sale, and the value of the matrimonial home by that time being asserted to be $900,000, an issue to which I will return.
Approach
The legal framework for these proceedings as property adjustment proceedings has been clearly established by the Full Court over quite some time and involves, in effect, a four‑step approach. The court commences with an assessment and determination of the asset pool, both as to what is comprised within in as to assets, liabilities, and financial resources, and to ascribe and attribute values to each of those. The second step is to assess contributions, as set out in section 79(4) and other provisions of the Act. The third step is to determine what adjustments, if any, should be made, having regard to factors that may exist in relation to section 75(2). And the fourth step, which is the step of some importance in this court, is an assessment of whether the outcome is just and equitable, it being remembered that the Federal Magistrates Court is constituted under its own enabling legislation, the Federal Magistrates Act1999, which constitutes this court as a court of law and equity, whereas the Family Court operates, whilst the Act refers to principles of justice and equity, as a court of law.
The steps, whilst I have described them as a four‑step approach, are not, in reality, however, individual steps. The same evidence goes to each of those steps, for want of a better description, and informs each of them and, indeed, each of those four relevant considerations impacts upon and informs each of the others. In that sense, it is, and has been referred to in a number of authorities, not a mathematical process or, indeed, a linear exercise, but a weighing of competing considerations based upon all of the available evidence to achieve a division of property between these parties which appropriately adjusts their interests to achieve a just and equitable outcome, and having regard to the significant list of factors as set out above.
That is no small exercise in this case, although, to the credit of the parties and by extending sitting hours of the court, the matter has very nearly been contained within the two days that were set aside for its hearing and spilled over only into a third day for submissions and judgment.
The evidence
The wife in her case has called five witnesses, including herself. The other witnesses are Ms D, who is an adult child of the parties, together with Mr D, who is also an adult child of the parties. The wife has called her employer, Mr L, and has also produced evidence from a valuer, Mr A.
The husband’s case contained six witness, including himself. Other than the husband, there is evidence from Ms J, who is the husband’s sister, Ms C,. who is also the husband’s sister, a private investigator,
Mr R, Mr Denton’s mother, Ms S, and a valuer, Mr S.
All of the witnesses, save Mr R, were cross‑examined as well as giving evidence by affidavit. There have also been a volume of documents coming into evidence through tender, and there are in total in the wife’s case some 14 exhibits and, in the husband’s case, five. They go to various issues in the proceedings that I will refer to in the course of these reasons. Ordinarily, in a case such as this or any case before the court, issues of credit are not matters which would be the first starting point for the court if it can be avoided.
The nature of the proceedings arising out of a marital relationship and, in this case, witnesses being members of extended family and children of the parties, it is often seen as being something to be avoided if at all possible, based on either evidence that is conflicting not going to relevant and germane issues, or there being agreement between the parties. In this case, regrettably, matters of credit must be addressed, and I propose to do so by dealing with the evidence of each of the parties in turn, albeit briefly.
The wife, as the applicant, commenced evidence and was cross‑examined at some length. The wife was also recalled following the husband’s case to put further matters to her. The wife’s evidence, I generally accept.
There were a number of matters that are put to the wife which it is asserted would suggest that she is not a witness of truth or credit. I do not accept that submission.
There are certainly a number of matters with respect to the wife’s evidence which fall short of perhaps being as clear and concise as they could be. Neither of the parties has had the use or assistance of an interpreter, and indeed, each of the parties has been present in Australia since a relatively young age and speaks English perfectly well. However, there might be some element of language barrier for both of the parties, and indeed, a number of the other witnesses. Language was a very substantial barrier with respect to Ms S, whose evidence I will deal with in turn.
The major attacks upon the wife were, firstly, that it is suggested that she had engaged in a course of substantial gambling and wastage, particularly relating to transactions that had occurred at the [omitted] Club using both an ATM at that club for cash withdrawals and using what would appear to be something akin to a Frequent Flyer points card for gamblers. Much was made of those issues in cross-examination and, in particular, of a document which purported to have been produced by the [omitted] Club showing a history of use in relation to poker machines by Ms Denton.
That document has not ultimately come into evidence, and there may be a number of reasons for that. It would certainly appear that a subpoena was issued, in this husband’s case, addressed to that [omitted] club. However, no documents are ever recorded by this court as having been received and no leave has ever been granted to inspect any documents produced, no doubt on the basis that, according to the case track records and the file and a check of the exhibits section of the Court, no documents have ever been produced.
What would appear to have occurred is that documents were produced to the office of the solicitor who had issued the subpoena, although it is to be remembered, of course, that a subpoena is issued by the Court, albeit prepared by and delivered to the Court to be processed and issued, but it is the Court’s subpoena, and accordingly, any document produced in response to it must, and should, be addressed to the Court. That is one possibility. But in any event, the document is not before me, and accordingly, much of the cross-examination that turns upon it cannot have any great weight in these proceedings.
The other aspect of the wife’s evidence that was largely attacked related to the wife’s assertions of violence, abuse and other courses of conduct that would fall generally within an accepted community or social science based definition of domestic violence, but which might fall outside of the constrained objective section 4 definition within the Act. The wife’s evidence in that regard was not substantially shaken.
The wife’s evidence was that verbal abuse had commenced about two years into the relationship, or in or about 1983, and that physical abuse had commenced shortly after, in or about 1985. Criticisms were put of Ms Denton that she had not reported these complaints to the police, had not presented any medical evidence suggesting presentation to medical services, and had indeed not left the home. A number of explanations were given for this by Ms Denton, including that the children, or various of them at different times, had intervened, and, in particular, that Mr D and Ms D, who were both called as witnesses, had intervened and had dissuaded Ms Denton from taking further action, so as to not break up the family.
There was also some criticism of Ms Denton regarding an understatement of her work hours and an alleged non-disclosure or lack of frankness and candour in her evidence as regards a number of things, but particularly her work hours and her income resulting therefrom. That is what the evidence of Mr R, the private investigator, goes to.
Ms Denton’s evidence in that regard is that, during a period of some weeks to months in or about 2008 when her brother was terminally ill and dying, that she had had periods of time away from work but still been paid and later made up hours. Her evidence went further than that and also connected in with her allegations regarding the state of dysfunction in the relationship between her an Mr Denton in the matrimonial home and that she would, whether because she had no vehicle at the time or simply to be away from the home, would go to work early and come back late, and if she was there, would help out if work was available to be done and needed to be done. That evidence, in its context, and it being remembered that context is fundamentally important to the evidence of any party, was plausible.
The criticism was also put that Ms Denton’s income tax returns were not produced, although notices of assessment were produced. They came into evidence and were exhibit F2. The notices of assessment, it is asserted, indicate an income greater than that disclosed by
Ms Denton from work, but as is pointed out in submissions, any amount received by way of Newstart would also have been included in taxable income for the purpose of assessment, which may explain some slight difference between the amount that is suggested to be earnt and the amount disclosed in the assessments.
The other aspect of context in relation to that evidence is that
Ms Denton is not a person who earns any significant income. Her evidence is that she works on a part-time basis for about 15 hours a week as a [omitted]. That is not put to be in any way critical of
Ms Denton for undertaking that employment, or elitist, or snobbish in relation to it. It is the work that she has been able to find and undertake, but as a consequence of that work, she earns an income of about $18 an hour, and accordingly, whether she works 15 hours a week or 21 or 41 does not produce any dramatic income that comes into her hands, particularly in the context of her living within a household which at present comprises herself and the six children of the relationship, albeit that five of them are adults and the majority of those adults, if not all, are earning income and no doubt making some contribution in some fashion within the household and/or to their own maintenance and upkeep.
Mr L attended and was cross-examined. Mr L’s evidence I accept, although he was, at portions of cross-examination, less than willing to answer questions. But again, that is in the context that he was being asked questions with respect to his business and, at portions of the cross-examination, evidence with respect to matters that would impinge on things such as turnover and receipts. He was also cross-examined, and it was put to him, which, no doubt, I accept Mr L would have interpreted as an attack upon his character, that he was prepared to have Ms Denton, as a single mother with an number of children, at the [business] and working even for times when she was not being paid. I do not find that that fundamentally undermines his evidence.
In relation to Ms D and Mr D, they each attended and were cross-examined. It is always regrettable when children of parties in dispute are present as witnesses before the Court, and it is for that good reason that there are provisions within the Act which preclude, other than with the Court’s leave, such evidence being adduced by children under 18. But, of course, these children are adults and can make their own decisions. In relation to Mr D, his evidence was set out in an affidavit sworn or affirmed on 21 January 2010. He gave evidence about a number of matters which were not challenged. This included evidence at paragraph 6:
On many occasions whilst I was growing up, my father was verbally abusive to me, and on occasions would strike me for no apparent reason and without justification.
Paragraph 7:
On many occasions, I observed my father swear at my mother, abuse her, and occasionally strike her with his hand or drag her across the kitchen by the hair. These events usually took place after my mother had asked for money for groceries or to pay other bills, or after she’d asked my father to remove rubbish from the property. My father often brought material or equipment home and left it in the yard area to be covered by long grass. The grass on the back yard of the property was not cut for many years.
Mr D also gave evidence that was not challenged regarding conversations which were alleged, wherein he asserts that his father had referred to owning property in [S]; evidence to the effect that
Ms Denton had been responsible for all household duties within the home, albeit, on his evidence, as each of the children grew older, assisting their mother, and not recalling observing his father undertake any duties within the home.
Further evidence is given, which was not challenged, by Mr D, in relation to arguments, physical abuse, physical assaults by his father upon his mother, which corroborate a number of the allegations made by Ms Denton in her case and which includes striking her; slapping her; kicking her; dragging her by her hair; throwing items at her, including a bunch of keys; striking both Ms Denton and children with instruments such as wooden sticks, belts, shoes or thongs. I accept his evidence.
The challenge that was put to him is that, indeed, he was motivated by spite or some anger with his father relating to incidents arising out of a motor vehicle that it would appear on the evidence, there was no dispute, was purchased for him by his father, but which was then involved in a number of accidents whilst uninsured. I do not accept that that motivation would detract from his evidence if indeed it existed.
Ms D was also cross-examined in relation to her affidavit material.
Ms D is a young woman who has recently commenced [occupation omitted]. She had sworn an affidavit on 19 January 2010, and portions of her evidence which go to germane issues and which were unchallenged and unshaken are as follows. Paragraph 8:
On many occasions, my father would request that we all sit around the table to discuss family issues. The issues at hand were always concerning finances. He would often say, ‘You all have to help pay the bills.’ We had no option but to assist. Otherwise, we were told to leave the family home. I offered to pay the water bill. My older brother, [X], would pay for the phone and internet bill, and my younger brother, Mr D, would assist with finances when he could. I am aware that my mother would pay for the school fees, groceries, and assist in all other finances where she could. I observed my mother pay for any birthday parties, children’s clothing and medicine in the absence of the respondent’s financial assistance. If my mother had requested financial assistance, an argument would usually follow, whether it was verbal, physical or both.
At paragraph 9:
I would observe the respondent physically and verbally abuse my mother. He would, on many occasions, strike my mother with both open and closed fist in the face, drag her by the hair from room to room, and throw objects at her, whether it be wooden sticks, belts, shoes, thongs, keys and other objects that were in near vicinity. On many of these occasions, I would get between the respondent and my mother and do everything in my power to stop the violence. I do recall on one occasion ensuing from an argument between the respondent and I, I observed my mother walk into her former bedroom where she kept her clothing. I then observed the respondent walking at high speed after her in the bedroom. I observed him throw her on the bed, get on top of her, and start striking her on her face. I ran into the room and pulled him off her with the assistance of my younger brother. I recall seeing my mother bruised and bleeding from the face. Either my mother or I would attempt to contact the police, following an episode of violence, however were prevented by my brothers from doing so. Not only was the respondent abusive to my mother, but the respondent, on many occasions, would be physically, emotionally, and verbally abusive towards me and my siblings. The respondent would often say to me, ‘You are the cause of all the shit that happens in this family.’
And it was conceded by Mr Denton in cross-examination that at least that part of the evidence was correct on at least one occasion. The evidence goes on to deal with similar issues of conduct within the house, and I don’t refer to it as ‘conduct’ to be euphemistic or dismissive of it, but simply because I don’t seek to categorise it purely as violence. It may well go beyond that. It may demonstrate a degree of pathology, certainly a degree of control, and by any definition, inappropriate.
There is also evidence which is unchallenged regarding corroboration of a number of other conversations regarding, in this case, conversations regarding ownership of two blocks of land in Queensland by the husband and the involvement of the parties, and in particular, Ms Denton in operating a [business] earlier in the relationship. I accept Ms D’s evidence and Mr D’s evidence and on the basis that the above portions of their evidence are not challenged at all or addressed in any fashion in cross examination Brown & Dunn (1893) 6 R 67 (HL allows me to do so.
Also in the proceedings, evidence was given by Mr A, and I will return to that expert evidence in relation to valuation shortly.
Mr Denton has sworn two affidavits in the proceedings, and was also cross-examined at quite some length. That evidence included a number of concessions, and a number of other elements which are of significance to the case.
In relation to child support, it was conceded by Mr Denton eventually that he owed arrears of around $4,000, but it was indicated that payments were not being made, nor the arrears attended to, as there is a process in train through child support contesting the assessment, it would appear on a number of grounds, not the least of which is an allegation by Mr Denton that he is not the father of the subject child who is 17 years of age.
There is no evidence before me as to the assessment or the assessments that have been in place at various periods of time, although there is evidence in one of the exhibits before me that there have been at least two payments made, although they are modest, being one payment slightly under $100, and one slightly over, $97.13 and $116.94 respectively.
The balance of evidence could be categorised as being vague, changeable, grandiose as to Mr Denton’s efforts and contributions, dismissive of Mr Denton’s contributions, tangential, and rarely responding to the question put, and overall, unimpressive, and I find unreliable.
The evidence generally that flowed in the cross-examination was largely focused upon issues with respect to disclosure. And in particular, disclosure of income. Much time was taken in discussing that issue at the commencement of the trial, and in particular, notices to produce, issued by each attorney to the other’s client. Few documents were produced by either party. Certainly, the documents that were produced by Mr Denton, whilst being low on volume, were also low on quality.
Bank statements were produced and were admitted into evidence together with a summary of transactions which occurred, with respect, to that account, for a period from 5 December 2008 to 25 May 2009, being Exhibit N4, which suggests that the account, and it being
Mr Denton’s evidence that he was a sole trader and that all income for the business went into that account, received deposits of some $47,837.88 during that period of about 5 months.
What is unfortunate with respect to that is that Mr Denton’s tax return for the financial year to which that period related disclosed gross receipts of $36,400 or, exactly, $700 per week. The fact that it is such a neat, precise, round figure causes some suspicion, but this court does not make decisions based on suspicion, but on the basis of evidence which proves on the balance of probabilities that something is more likely to be the case than not.
Certainly based on the evidence contained within exhibits N4 and N5, I’m left with no explanation as to the difference, and no other finding that could possibly flow, other than the gross receipts for the business for that period were in fact $47,837, representing a portion of the financial year, and accordingly, the income for the business, assuming for one moment that all income is in fact deposited to the account, was more likely in the order of 70 to 80 thousand dollars per annum. That of course is Ms Denton’s assertion as to the income that was earned by Mr Denton during the relationship.
It is also coincidentally the level of income that Mr Denton would appear to have suggested when he approached a bank in October 2009 and advised what he was earning, being Exhibit N2. At that time,
Mr Denton had inquired for a loan of $250,000, and it is there that the reference to $30,000 in cash held by Mr Denton arises, saying that he was interested in purchasing a property with a $30,000 deposit.
Mr Denton’s explanations with respect to that document and that approach fall within the same category as explanation of all matters financial, being unsatisfactory.
A number of other documents were produced and have come in as exhibits which would suggest that indeed, quite a quantity of material within the returns that had been lodged with the Australian Tax Office is inaccurate. A s.128 certificate was issued to Mr Denton during the course of the proceedings, so that cross-examination could continue. Mr Denton was clearly warned that he need not answer questions if he did not wish to.
It is suggested, certainly by Mr Denton’s evidence, I think inescapably, that Mr Denton’s income outweighs by a factor of at least 100 per cent the income that is in fact disclosed, which of course has a flow on not only to income, but to child support, is also a matter that causes some concern as regards to credit and credibility.
The other issue that arose during Mr Denton’s evidence related to the worker’s compensation claim. It appeared to be at least investigated, if not pursued through Adriano and Associates solicitors at Fairfield, different solicitors to those acting for Mr Denton in these proceedings. That would appear to relate to an injury to one or both of Mr Denton’s shoulders. An operation was undertaken earlier in these proceedings. Indeed both that claim and the injury that has given rise to it and the surgery, have arisen during the course of this matter being before the court, and yet, day one of the trial is the first that anyone hears of it.
The only document produced with respect to that, Exhibit N7, is a letter from the instructed solicitors attaching a copy of the report prepared by what would appear to be the plaintiff’s medical expert which asserts that there is a 19 per cent whole person impairment as a consequence of the injuries, and that the surgery has not been successful in fixing a number of problems. But there is nothing else to indicate the cause of action, where it is up to in terms of being pursued, and any suggestion of a likely verdict or amount of compensation.
That is consistent with a number of other elements of the evidence, including matters such as the sale of the property in Queensland as to which no document is produced save a listing agreement appointing an agent for the sale, that document being Exhibit in the proceedings F5. Mr Denton’s evidence asserts that the property was sold for about $110,000, that about $90,000 was paid off a mortgage. The evidence would suggest, at least in Exhibit F5, that a commission of about $3,500, including GST, would have been payable on the completion of the sale, but there is nothing to account for the actual sale or the proceeds that were in fact received or how they were expended.
I am not in a position from that evidence to make any finding with respect to those matters, but that is an issue to which I will return.
Needless to say from the above comments, where there is any dispute between Mr Denton’s evidence and that of Ms Denton, I prefer the evidence of Ms Denton.
There is also evidence tangentially in Mr Denton’s case regarding two liabilities. One, being a liability to his sister and brother-in-law, being the – Ms C and Mr M and another, a liability to a person referred to as a friend of [name omitted]. In relation to each of those alleged debts, the evidence is scant. There is no real reference to it of any substance in Mr Denton’s affidavit material but it is referred to in his financial statements as a debt of $62,000 to family members and friends.
The two documents to which I have referred – exhibits M5 and M9 – relate respectively to the alleged loans to Mr Denton’s sister and brother-and-law and friend. The first document comprises two pages. One is not dated, although it is signed by all three concerned, Mr M and Ms M and by Mr Denton. The second is a document purporting to be completed and signed by Mr Denton which whilst not dated indicates a number of dates for advances, being 12 January 2004, 8 April 2004, 22 April 2004, 24 February 2005 and 18 March 2005. Those advances total $43,400 and are described in the first page of the document as being:
For the legal matters which he has to pay his barristers and he will pay back this amount in full as soon as possible.
The second document is dated 24 November 2005 and asserts that an amount of $34,000 was borrowed “over three years period and he will return the money when things gets better” – whatever that may mean. That gentleman was not called.
The other aspect of the evidence that is unsatisfactory in relation to the loans is that neither of those documents were produced prior to the trial, or so it would appear. No reference was made to it in Mr Denton’s evidence other than in his financial statement and then to give a figure that was not quite accurate. And perhaps more importantly, but indeed, whilst Ms M – one of the joint lenders of $43,400 – was on affidavit and called to give evidence – had made no mention of the loan before.
The balance of witnesses called in Mr Denton’s case also caused me some concern. Whilst Mr R - the private investigator was not called to be cross-examined, and his affidavit, subject to one paragraph that was struck out, admitted - it does not assist a great deal other than to account his observations over a period of a week or more of the time that Ms Denton was actually at her place of employment. What causes me more concern with respect to that evidence rather than the hours that this woman is physically present at her workplace - there being nothing to indicate whether she is paid or otherwise, or whether it is consistent with both her and her employer’s evidence making up time for which she had already been paid - is that Mr Denton indicated that he expended a sum in excess of $4,000 in meeting fees for the private investigator. This is at a time when he was not paying child support, alleges that he was earning an income of $700 per week and indeed has expended an amount greater than his entire child support liability, as evidenced by the arrears that he concedes, for the purpose of seeking to gain some forensic advantage in the proceedings.
Ms J attended for cross-examination. It would be fair to say that the dislike she exhibits towards her former sister-in-law, Ms Denton, is palpable. At one point in her evidence she pointed and referred to “that woman there”, meaning Ms Denton. There was some discussion in cross-examination with Ms J regarding the allegation of ownership of land in [S]. She had indicated that there had been land but it was taken over by an uncle and it was asserted in accordance with what I presume is customary law in that area that it is now his. I do not know whether that is so. There is no evidence before me about it. It was also suggested that she held something of a grudge towards her sister-in-law of whom she expressed the view:
She thinks we’re no good. That’s what they told us.
When asked:
Is there anything good to say about her?
Meaning Ms Denton - the response was in the negative.
Ms M had a similar attitude towards her former sister-in-law. That is perhaps understandable, albeit regrettable, but her evidence was of a similar vein, that there had been land in [S] at some stage but it no longer was possessed and made comments being highly critical of
Ms Denton for having raised the issue suggesting that she was opportunistic and seeking to be a profiteer in some fashion.
As I have indicated, the concerning aspect of Ms M’s evidence is that notwithstanding that it is now asserted that there is a very substantial loan - $43,400 –Ms M’s evidence is that it was all advanced in cash from her husband’s workers compensation claim and withdrawals on their mortgage – had not previously seen fit to raise it.
Ms S, an elderly woman who quite clearly has substantial difficulties with the English language – and conceded through a telephone interpreter that she does not read it – attended for cross-examination. Ultimately, her affidavit was struck out. The affidavit contains no jurat to indicate it has ever been read to her in any language, and clearly her evidence was that she cannot read English and the document is printed in English. She did not recognise the document, did not recall signing it, although Ms S’s evidence similarly resulted in something that could be fairly described as an attack on Ms Denton’s motives for wanting to raise any issue regarding alleged land in [S].
Turning to the expert evidence and the valuers who were called in this case, Mr A and Mr S. The issue as to value has broadened during the course of the case. At the outset of the case there were two valuers, one in Ms Denton’s case – Mr A who asserted a value of $730,000 for the property as at 25 September 2010, ie, a week prior to the hearing. Mr S asserted a value of $825,000 as of 19 March 2010. During the course of the hearing and in accordance with an annexure to one of the first affidavit of Mr Denton, it was asserted that an offer of purchase had been made at a time when the home had been listed for sale – although the circumstances by which it came to be listed were unclear and the offer made had been to purchase the property for $900,000. That offer was rejected by Ms Denton and the property subsequently withdrawn from sale. In closing submissions that was the value relied upon by Mr Denton being $900,000.
As regards the evidence of each of the valuers, I prefer the evidence of Mr A. His evidence is more recent. He gave his evidence in a far more balanced, non-emotional way. He gave clear and cogent explanations for each of the factors he had considered.
In considering a map, topographical and normal of the property, it was clear that this particular property, whilst a large property amongst other semi-rural properties, had a number of difficulties and restrictions. The majority of the property is flood-affected, albeit – and I accept Mr S’s evidence - to varying degrees. The consequence of the flood affect of the property, it bordering a creek, is that only a very small portion of the property is able to be built upon. The property is also affected by two easements which further impact upon the usage of the property.
The comparable sales that were used by each of the valuers are also of some assistance. It transpired that indeed this property is on one side of a gentle ridge which then flows on the other side of the ridge down to another creek. The properties that abut the creek on the other side would appear, both on the common evidence of the valuers and each of them and from common sense, to be more comparable – if one can use that grammatical mis-expression – than other properties that either of the valuers refer to, and certainly Mr A had relied far more heavily upon those comparable properties than properties within the same general region but of a very different nature, particularly a number of properties with much greater value which were not flood-affected at all.
The other aspect of the evidence which was of some concern is that each of the valuers indicated if the property went to forced sale rather than being retained that the amount that might actually be received on a sale could well be less than the $730,000 asserted, and indeed may be in the mid to high $600,000s. Mr A had also prepared two reports in the matter and they had been somewhat consistent, being seven hundred and twenty to seven hundred and thirty thousand dollars.
As would be clear from the above comments, in relation to issues of credit I generally prefer the evidence of Ms Denton, and in particular the two adult children of the relationship, Ms D and Mr D, to the extent that their evidence is at odds with that of other witnesses in the proceedings.
Overall, there are some aspects of the evidence, notwithstanding the above, which are actually agreed. Then turning to the agreed chronological history of the parties, I observe the following, most of which is non-contentious.
Ms Denton was born [in] 1959 and is accordingly now aged 51.
Mr Denton was born [in] 1960 and is accordingly now aged 50 years.
The parties married and commenced cohabitation [in] 1981. It is asserted, and not seriously disputed by Mr Denton, that at time she had savings of about $9,000 and that Mr Denton had a motor vehicle of modest value.
From the time of marriage until 1982 the parties lived with
Mr Denton’s mother and sisters.
In 1982 the parties purchased a property at [B] for $49,000. A loan was obtained of somewhere between 30 to $40,000, depending on whose evidence was accepted, but it is certainly agreed that $40,000 was borrowed in total and the deposit provided from the resources of the parties, and I don’t consider it particularly relevant to determine whether it came from the husband, the wife or both. In any event, that property was purchased for a figure that one can no longer begin to contemplate purchasing a property in Sydney.
Shortly after the purchase of that property, [in] 1983, the first child of the relationship, [X], was born. The remaining children of the relationship, being six in total, were born from that time until the birth of the youngest child of the relationship, [Z], [in] 1993. [Z] presently being 17 years of age. And as I have indicated in the recent child support action – the details of which are not known to the court – there is now some issue as to his paternity, apparently.
In 1985 Ms Denton received a workers compensation payment of $17,000. During cross-examination it was put to Ms Denton that
Mr Denton had also received a workers compensation payment. There is no evidence regarding that before the court.
In 1989 the parties purchased a property in Queensland. The parties appear in agreement – or to the extent that they are not – it is asserted by Ms Denton that that was paid for in cash from the parties’ joint savings. Mr Denton was silent on the issue of the source of funds.
In 1991 the parties’ property at [B] was sold for somewhere between $140,000 and $149,000. At the time of its sale it had been rendered unencumbered.
The parties then purchased a block of land at Property K, for $120,000 or $125,000, depending on whose evidence is preferred. Nothing much turns on it.
The parties then also purchased an old house for a very modest sum of about $2,000 and relocated it, at a cost about ten times more than the purchase price, to their block of land at Property K. Subsequently, and over a period of some years, some renovations were undertaken to the property primarily causing the fibro home to be over brick to render it into a brick veneer property. From that time that had been the home of the parties.
Separation
Ms Denton asserts that in late 1998 the parties separated and remained separated for about two years. That is denied by Mr Denton, although in cross-examination he did refer to having left the home for various periods around that time, and there would be less dispute about it at the conclusion of cross-examination than at the beginning.
Also, during that time, a business that had been operated by the parties at [omitted] – and which had been their main source of income, and in which both of the parents had worked and their children had attended, for various periods of time from their birth onwards – was sold. The amount for which it was sold is unclear. And that would appear to arise, at least in part, from whether it was sold for an all inclusive figure or a figure that separated and delineated between goodwill and stock, but in any event, it was sold and the proceeds applied towards the parties’ benefit.
Part of that was to build a pool at the home. There is dispute between the parties as to who paid what towards it, but in any event, the proceeds of sale of the business were putt in.
In 2001, shortly after the parties had reconciled, they entered into a business venture with a Mr K, operating a business, [F]. Funds to buy in were borrowed by mortgage against the home. The business failed and accordingly the parties were left with an outstanding loan of $150,000, or $165,000 depending on whose evidence is preferred. The parties had received some return from the investment which had reduced the liability from inception.
Following the sale of the Queensland property, a lump sum payment – on Mr Denton’s evidence – of $90,000 was paid towards that loan and it would appear common ground that until about May of 2009,
Mr Denton was responsible for meeting the payments on the mortgage.
The parties again separated – on Ms Denton’s evidence – in 2002. And since that time – on Ms Denton’s evidence – the wife ceased to perform any domestic duties for Mr Denton, and began to sleep – if not immediately at that time, shortly thereafter – with her daughter, Ms D, in her room. Certainly, the relationship between the parties did not improve.
It is asserted – in Mr Denton’s case – that the parties did not separate until 2008, at which time, it would appear Mr Denton left the home at Property K following an apprehended domestic violence complaint made by Ms Denton or by the police on her behalf. It is unclear whether that order is still in force, or what the terms of the order were at the time.
Since the sale of the [omitted] business Mr Denton has been primarily engaged as a self-employed [omitted]. Ms Denton had come into the relationship with some training and employment, but following the birth of a number of children and being out of that employment for quite some years, has returned to her present work –as I have referred to – working as a [omitted] on a part-time basis, receiving some Centrelink assistance, and at this point in time, also receiving some assistance from one or more of the six children who continue to live in the home with Ms Denton.
Beyond that chronological address of the matter there is little agreed fact between the parties.
Valuation issues generally
As I have indicated above I prefer the evidence of Mr A than that of
Mr S and, accordingly, on the basis of that evidence and the dispute between them, would prefer the evidence that the property has a value of $730,000 as opposed to $825,000.
However, in submissions, issue has arisen regarding the alleged offer to purchase the property that had been made earlier in the piece. That arises from an annexure to the husband’s second affidavit filed 22 April 2010. Annexure C to the affidavit, is a letter dated 14 October 2009 from [omitted] Real Estate Agent under the hand of a Mr D. It reads as follows:
We are writing to inform you that we have an offer of $900,000 for your property. We are negotiating with the prospective purchaser for a minimum sale price of $950,000. This purchaser is genuine. Has recently sold their house and is ready to purchase a new property. Please inform us if you are happy with the $900,000 offer or if you wish us to continue negotiations for a minimum of $950,000.
Annexure D is then an email from the parties’ adult daughter, Ms D to the agent dated 7 January 2010, advising:
As previously discussed, the property situate and known as Property K, in the state of New South Wales, is to be removed from your sale listing.
There was no dispute in Ms Denton cross-examination that she had been contacted by the agent, at least by phone, with the offer, and had indicated that she was not interested in selling the property at that time, having nowhere else to move. I note, otherwise, that there is a gap of some two months between the letter and the email referred to.
In submissions it was put that the offer at settlement would represent, both at law and contract, a matter of some real significance, and that it should be accepted as the value used for this property, at least as a loss of chance.
The Full Court has dealt with the issue on a number of occasions, and most recently in the matter of Boyce & Boyce [2007] FamCA 1165. In that instance, the Full Bench comprising Finn, Coleman and May JJ, dealt with the issue at some length and in very similar circumstances. In that case, a property in Brisbane had been the subject of a trial before Buckley J of the Family Court, and findings had been made based on competing valuations, as in this case, that the property had a value of $1.65 million.
The wife, in that case, asserted that there had been an offer to purchase the property, and there was no issue in that case at all that it was a genuine offer, made and intended to be followed through with, for
$2 million prior to the hearing of the matter, which had been rejected by the husband on the basis that the property, which was a commercial property, represented his source of income from rent, and that until the property proceedings were dealt with, he did not wish to sell the property. It is referred to in that judgment that:
He had indicated he refused to accept the offer inter alia because the property was not on the market, and that the rental income which he receives is his primary source of income.
Finn J undertook a detailed summary, as indeed had Buckley J, of relevant case law of both the Full Court of the Family Court, the Full Court of the Federal Court, and on one occasion, the High Court, of the very issue the subject of this case. Finn J had gone on to indicate:
Notwithstanding that there was apparently no challenge to the genuineness of the offer, I am not persuaded, given the observations of the Full Court of the Federal Court in Cordelia, that Buckley J was wrong in law when he relied on the decision of the Full Court of this court in Smith, which in turn had relied on the decision of the High Court in MacDonald. And, accordingly, he had rejected the offer as being evidence.
In a joint judgment of Coleman and May JJ, different reasoning was applied, but the same outcome reached. With some confidence in relying upon the authority of far more learned judicial officers than myself, I am not inclined to accept $900,000 as the value of the property as there would appear to be no real evidence, save annexure C that I’ve referred to, that the offer was made at all, was genuine, if it was genuine, the circumstances upon which it was not proceeded with, although Ms Denton was clear in her evidence that she had said no. But I return to and accept the evidence of Mr A and find the property has a value of $730,000.
Having dealt with that issue, it is perhaps germane to deal with a number of other general issues that will inform a number of aspects of decision making in this matter.
What is the nature of marriage?
This case involves substantial evidence with respect to conduct or alleged conduct of Mr Denton and, indeed, of both parties, as regards the allegations in relation to Mr Denton’s gambling. The nature of marriage has some particular relevance, in my mind, to arguments such as those mounted in the wife’s case, relying upon authorities such as Kennon & Kennon [1997] FLC 92-757 as they do.
The nature of marriage and the nature of allegations and the rationale of decisions such as Kennon & Kennon are germane in that the two, again, like all other aspects of this court’s exercise of discretion, link together. Recently, Brewster FM has delivered judgment in a case reported last week, wherein he refused to accept or follow the Full Court’s reasoning in Kennon & Kennon. I do not propose to cavil with the Full Court’s decisions. The nature of marriage, as indicated in a number of secular academic forums, is a more expansive relationship than, perhaps, flows from our Marriage Act, or from considerations by this court of the nature of marriage, which by and large, are limited to legal requirements rather than the socioeconomic aspects of marriage.
Research undertaken by Ohio State University for the purpose of evaluating the relevance, impact, and benefit of marriage guidance counselling refers to a number of specific elements of marriage as including:
Fostering good communication, resolving conflict in a positive way, having realistic expectations of each other and of the relationship, paying attention to the details of your partner’s lives, experiencing positive interactions, and more positive interactions than negative ones, building trust between the parties, spending time together, sharing values and objects, sharing responsibilities and adapting to changes within the relationship.
It is trite to say that from the evidence of the parties, none of those elements of what would generally be seen from that review as characterising marriage, or at least a healthy marriage, are present.
The University of Maryland has similarly undertaken far more recent research, in fact, earlier this year, but refers to a similar list as a summary of social science regarding the nature and makeup of a healthy marriage, as identify in the following:
i)Share a healthy philosophy of life with clear ideals.
ii)Grow in friendship and respect for each other.
iii)Share interests and activities together.
iv)Enjoy each other’s company.
v)Trust each other and be trustworthy.
vi)Be interdependent with each other.
vii)Proud of each other’s achievements.
viii)Interested with respect to each other’s lives.
ix)Share decision making.
x)Share and make monotonous housework interesting, such as household chores.
xi)Have realistic hopes.
It continues on for nearly 40 different elements that would suggest the very nature of a marriage.
Similarly, research undertaken and released by the US Department of Health and Human Services earlier this year and as a consequence of funding initiatives that had commenced in 2002, referred to the eight essential characteristics of a healthy marriage, arising largely from research by Lewis and Gossett as being:
Both partners participate in the definition of the relationship; a strong marital bond characterised by levels of closeness; spouses are interested in each other’s thoughts and feelings; the expression of feelings is encouraged; the inevitable conflicts that do occur do not escalate or lead to despair; problem solving skills are well developed; most basic values are shared, and; the ability to deal with change and stress is well developed.
Again, the evidence in this case would suggest none of those elements are present, or have been present, in the marriage between Mr and
Ms Denton for some little time.
The nature of domestic violence
I previously referred to the definition contained without our Act, section 4, of family violence. Family violence has, regrettably, a very narrow objective definition. Indeed, far more narrow than the definition and description of family violence contained within the court’s Family Violence Committee strategy plan, which indicates as follows:
Family violence covers a broad range of controlling behaviours, commonly of a physical, sexual, and or psychological nature, which typically involve fear, harm, intimidation and emotional deprivation. It occurs within a variety of close interpersonal relationships, such as between spouses, partners, parents and children, siblings, and in other relationships where significant others are not part of the physical household but are part of the family, and or are fulfilling the function of family. Common forms of violence in families include: spouse/partner abuse, child abuse or neglect, parental abuse, sibling abuse.
It goes on to divide family violence into four main categories of physical abuse, verbal abuse, social abuse, and economic abuse. The latter two, social and economic abuse, refer to:
Public denigration or humiliation, denying time alone, denying contact with others who may be support figures.
Economic abuse includes:
Unrealistic expectations over the handling of finances, and deprivation of any control over finances.
They are all elements that are complained of by Ms Denton in the history of her marriage from 1983 to date. The legal considerations, as well as the social considerations of domestic violence, perhaps give some insight into the context of these parties’ relationship and the evidence that is given, particularly by Ms Denton and her adult children who have attended in this case.
Sachs J, sitting on the South African Constitutional Court, gave this insight into the nature of domestic violence:
All crime has harsh effects on society. What distinguishes domestic violence is its hidden, repetitive character, and it’s immeasurable ripple effects on our society and, in particular, on family life. It cuts across class, race, culture and geography, and is all the more pernicious because it is so often concealed and so frequently goes unpunished.
The Law Commission of South Africa, supporting the need for appropriate legislation to reduce and prevent family violence, invoked the following quotation from a document drafted by the US National Council of Juvenile and Family Court judges:
Domestic and family violence is a pervasive and frequently lethal problem that challenges society at every level. Violence in families is often hidden from view, and devastates its victims physically, emotionally, spiritually, and financially. It threatens the stability of the family and negatively impacts on all family members, especially the children who learn from it that violence is an acceptable way to cope with stress or problems, or to gain control over another person. It violates our community’s safety, health, welfare, and economies by draining billions annually in social costs.
The judgment goes on to give a number of other examples and cites a number of other studies and reports from the United States and Europe. It also reflects upon the private versus public and civil versus criminal nature of domestic violence and legislation which deals with it. And Sax J indicates as follows:
I turn now to the complex private public character of domestic violence, which inevitably influences the combination of civil and criminal remedies provided, and helps explain the manner in which they must be interpreted. As Jennifer Nedelsky points out, although women cherish personal autonomy, in practice, the concept of autonomy has been used to protect the abusive husband from the actions of the State, but not the abused wife from the actions of the husband. Similarly, despite the high values set on the privacy of the home and the centrality attributed to intimate relationships, all too often the privacy and intimacy end up providing both the opportunity for violence and the justification for non-interference.
Certainly, the evidence that is given in this case, particularly by Ms D would resonate with those comments. But what is the linkage between them? The nature of marriage and the nature of domestic violence. Perhaps they flow from the comments in the research referred to by Sachs J that the betrayal of trust by being unsafe and unfulfilled within the marriage-like relationship, whether secular or religious in its definition, to meet exactly those ends, is perhaps analogous to the non-relationship based crime of home invasion, where one would expect to feel safe and secure and the king of one’s domain within one’s own property, only to find that, indeed, that is a place that causes great upset, distrust and lack of safety.
The available pool
Turning to the pool and its makeup, as I’ve indicated, the major asset of the parties is their home, and I accept the evidence of Mr A that it has the value of $730,000. The property is encumbered by a mortgage with a present value of $15,860 leaving then a net equity available to divide between the parties at $714,140.
There are a number of smaller assets of the parties, the evidence with respect to which is perhaps unsatisfactory, but doing the best I can, will deal with them based on the admissions against interests made by each of the parties and their respective documents.
The husband has or had a number of motor vehicles which, in his first financial statement, he referred to as being a Hino truck with a value of $7,000, two BMWs and a land cruiser which collectively were worth $12,000. The husband’s second financial statement refers to the BMWs having been disposed of for $1,000 each, although there are no documents to corroborate that in any fashion, the husband’s evidence being that he signed the transfer of registration, handed it over to the purchasers in return for $1,000 cash each. However, I’m inclined to accept those figures and find that the husband had vehicles with a total value of $19,000.
The wife has a Corolla which she has asserted in her two financial statements as being worth $7,000 and $3,500 respectively. In submissions, an admission against interests to treat the vehicle as being worth $7,000 was made, and I do so.
There are also contents of the home, the value of which is largely unknown. I intend to deal with those assets by offsetting them against each other, and each party will retain the vehicles, proceeds of sale for them and the items in their possession, subject to a number of large items of plant and equipment and a swimming pool that are at the home, which I propose to make the property of Mr Denton.
Neither of these parties has any substantial or significant superannuation. Mr Denton refers to having some superannuation of very modest value, although I’m not in a position to make any finding as to its value other than what is alleged which is a few hundred dollars. Mr Denton has a fund with [omitted] with a balance, in accordance with Exhibit M11, of $3,973.50. Accordingly, it is unsplittable. Those matters are negligible, and I don’t intend to include them.
Financial proceedings often involve a consideration of whether paid legal fees should be added back to the pool. I’m not urged to do so in this case, and indeed, I’m told from the bar table that neither party has yet attended the payment of their legal fees. I’m told that Ms Denton’s unpaid legal fees are in the order of $40,000, and Mr Denton’s, $20,000. That would, if accepted, reflect perhaps some greater effort and undertaking of a forensic nature that has been undertaken by
Ms Denton in the case thus far, including issuing subpoenas and the like. But in any event, they’re unpaid, and I don’t propose to include them.
There are then also a number of Black & Kellner issues raised in the case. And in that regard, I turn to a number of decisions that are of some interest and importance in dealing with those matters. Black & Kellner itself, a decision of the Full Court some substantial time ago, in fact, over 18 years ago now, dealt with what could well be described as a growing body of case law at that time, which had begun with the Full Court’s decision in Weir & Weir. It also to a large extent, finds its roots in Jones & Dunkel, and the inference that is to be drawn when evidence that is clearly available or could be made available is not called. In that case it is germane to quote a number of passages from the Full Court including.
“The husband originally swore, when questioned, that his income tax returns and receipt books were a complete and accurate record of the income of his practice. It later appeared, from the evidence before his Honour, that the husband was caught in what amounted to little more than a blatant lie in this regard”
I note that without using such intemperate language, certainly those facts are analogous to this case. And I am not concerned to seek to attribute any value to the enterprise operated by Mr Denton, and being a self-employed [omitted], experience would suggest that it is a business that is unlikely to have any asset beyond its values, and there is no evidence of any fixed contract that could be transferred. However, I have already made a finding and I’m satisfied that the husband’s income is substantially understated, both to the Court and to the Australian Tax Office.
The Full Court went on to quote a number of then-recent Full Court decisions of Guinti & Guinti [1986] FLC 91-759, Oriolo & Oriolo [1985] FLC 91-653 and Brease& Brease (1998) FLC 92-793; 22FamLR 518 as well as turning to a House of Lords decision of Livesey & Jenkins [1985] ALL ER 106, and that was quoted in the Full Court authorities to which I’ve referred. It goes on to indicate as follows:
“I believe that the conclusion of the House of Lords in the case of Livesey & Jenkins is apposite, namely that in financial proceedings between spouses, each party must make a full and frank disclosure of all material facts. In this case, it was made clear that full and frank disclosure was required as a matter of principle in light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist insofar as statute or court rules required. In my view, it is fundamental to the whole operation of the Family Law Act, in financial cases, that there is an obligation of the nature to which I have referred”.
It goes on to indicate:
“In the present case, a similar situation arose. The assets of the parties could not be ascertained in full, because of obvious nondisclosure”.
That at least applies in part to the issues I’ve referred to above as to:
a)whether Mr Denton has or did have at the time of his loan inquiry $30,000 in cash,
b)what amount was received from the sale of the Queensland property, and what happened to those proceeds,
c)whether Mr Denton does or does not have some proprietary interest in land in [S], and
d)whether the husband has a worker’s compensation claim being a chose in action that has value.
I’m not in a position, based on the evidence before me, to make any findings of fact in relation to those matters, because the evidence is so unsatisfactory. However, the Full Court went on to say:
“It is apparent that if his income was more substantial than he claimed, then this would be reflected in the value of his practice, and in this regard, it is perhaps of interest to note that the wife’s former husband’s practice of a similar nature of capable of being sold for a figure in 1973 terms which would have, reflected in 1991 terms, represent a very substantial asset indeed. Finally, another part of the judge’s obligation encroaches cases of this nature in considering section 75(2) factors is to consider the respective income of the parties. Again, through the behaviour of the husband, this was something which the learned trial judge could not do. Indeed, I am satisfied in this case, it’s something I cannot do”
Brown FM, in a more recent decision of M & M [2006] FMCAfam 424 took pause to review a fairly substantial history of Weir & Weir and Black & Kellner like decisions, and in particular, referred to a Full Court decision of 2003 in D & D [2003] FamCA 473, which read as follows:
“The task of the court in proceedings under section 79 is not akin to an accounting exercise. The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions. By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degrees of the buffer may depend on how much individual sailing they do without consultation, or indeed, contrary to the wishes of the other”.
That passage I quote in particular, as it provides a neat segue, in my mind, to the issues to which I’ve previously referred, the interconnectedness of the nature of marriage, the nature of domestic violence, and in this case, adding a third limb to that, the obligation to provide full and frank disclosure, which the Full Court in Weir & Weir had commented on as follows:
“The failure to disclose undermines the whole process of adjudication and proceedings for a settlement of property, and that the court is unable to identify the property of the parties to properly assess contributions, ought to properly assess section 75(2) factors. I will do the best I can by reference to the evidence that I’ve already given”
Another important element of the case law usually referred to as a Black & Kellner argument arises from the equitable principle that “he who comes to equity must have clean hands” and, as was referred to both in that case and the present, I have some concerns as to how clean Mr Denton’s hands are, at least, in regards to disclosure with respect to the above matters. But, as I’m not in a position to make any finding as to the existence of those assets, the best I can do is to balance and assess contributions having regard to that which I do know.
In that regard, I, also, need to turn to the basic elements of that which is referred to in the wife’s case, as a Kennon argument. That authority, now of some vintage – some 13 years – arose from a decision of Coleman J, a Judge of the Family Court in this registry. His Honour had referred to a number of particular aspects of the evidence and, in that case, decided in the halcyon days of cross-vesting legislation, His Honour being asked to deal with inter alia adjustments for contribution, particularly arising out of what we described as demonstratable medical conditions arising out of stress and conduct.
The Full Court, in dealing with the appeal, referred to, and undertook, a substantial review of case law to that date which dealt with such matters and, in particular, referred to a case of Manna (unreported), also, decided by Coleman J and which, in turn, referred to a decision of Cooke J in Fisher. Cooke J had said:
“If a party is subjected to a situation within a marriage relationship where they do endure, if one might use that expression, or are subject to some repeated discomfort, violent ill-treatment, matters of that kind, by the other party and, nevertheless, they continue to perform the role of home-maker, then, it is difficult to see that those matters can be left out of consideration by the Court. Indeed, in particular circumstances, it might be quite clear that rather special consideration has to be given to the efforts made by one, or other, of the parties, or even both parties, if they have mutual claims of ill-treatment against the other, either psychological or physical, that this role of home-maker must be given special weighting, or consideration in the case”
It also went on to quote Chisholm J in Rosati & Rosati [1998] FamCA 38 who said:
“It is sufficient to say that, in my view, the authority of Doherty and, arguably, Mallet, precludes judges, at first instance, from holding that there are categories of matters such as conduct that cannot, as a matter of law, be taken into account in proceedings under section 79”
The Full Court, then, went to, quite clearly, state as follows:
“Put shortly, our view is that, where there is a course of conduct conducted by one party towards the other, during the marriage, which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage or, put the other way, to have made his or her contribution, significantly, more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within section 79. We prefer this approach to the concept of negative contributions which is, sometimes, referred to in the discussion. In the above formulation, we’ve referred, only, to domestic violence for the reasons which we indicated earlier, but its application is not limited to that”
And, indeed, in this case, I am satisfied that its application would not be limited to the conduct that is described in the evidence of
Ms Denton, as well as each of her adult children who have given evidence, and which I find and accept constitutes domestic violence or more correctly violence. The issue of contribution, and of making
Ms Denton’s contributions more onerous is one matter, but I, also, have to consider and weigh Mr Denton’s contributions which, if I accept the evidence, particularly, of the two adult Denton children, are negligible or non-existent as a home-make and parent, and I will return to consider to that, briefly.
More recent decisions have, also, addressed the issue. Altobelli FM, in a matter of Kucera & Kucera [2009] FMCAfam 1032, again, undertook an extensive assessment of the subsequent case law arising out Kennon arguments and leading up to two cases decided by His Honour of Bingham& Bingham [2009] FMCAfam 99 and Kucera & Kucera, and dealt, again, with fact scenarios commencing at paragraph 101 of that decision to 110, not dissimilar to this case.
His Honour, also, canvassed the criticisms and critiques of the Kennon line of authorities, particularly, by academics Dewar and Parkinson and, in large part, and rejecting those arguments, found that an adjustment of 15 per cent in the wife’s favour, in that case, was warranted. That being a case as I’ve indicated of not dissimilar facts in that the evidence suggested the family violence had commenced early in the relationship, and continued for a lengthy period in a long relationship.
Even more recently, in June of this year, Watts J in the Family Court in Sydney in cases reported under the pseudonym Whelan & Whelan [2010] FamCA 530, has undertaken, again, an extensive consideration of, not only the line of Kennon authorities, but the standard of proof that might apply in such cases. And, in that circumstance, canvassed both arguments for and against Kennon arguments. His Honour, ultimately, went on to indicate as follows – paragraph 177:
“I accept the evidence from the wife and the witnesses who corroborate her allegations of a history of violence and abusive conduct by the husband towards the wife during the time that they were together. The evidence substantiates a pattern of behaviour that commenced at the beginning of the marriage and was a feature of the relationship between the husband and the wife throughout their many years together. There is some direct evidence of the practical and emotional effect of the husband’s conduct has had on the wife”
I am, in the context of this case, prepared to infer that the proven history of the husband’s violence, in fact, meant that the contributions the wife made (and, in this case, there is little if any concession by
Mr Denton, or his family members, that the wife made such home-maker and parent contributions), were made in circumstances where they were, significantly, more arduous and, as a result of the husband’s conduct, than, they would have, otherwise, been if he had not behaved in the way he did.
I am comfortably satisfied that the increased contributions by the wife entitle her to an adjustment with respect to contribution.
Whelan also, dealt with issues of gambling. As I have indicated in the absence of any documentary proof, or concession, by the wife, I am not prepared to infer that there is an issue of wastage by gambling on the wife’s part. It is put, in submissions, that material that has been tendered comprising the whole of documents produced on subpoena with respect to the wife’s St George bank account for the period mid ’02 to mid ’09, a period of some seven years, evidenced withdrawals of $106,630, primarily, from clubs and, particularly, from the [omitted] club.
There are a number of important aspects to the context of that evidence. Firstly, Ms Denton was somewhat unshakeable in her evidence that the ATM at the [omitted] club was the closest ATM to her and that she used it regularly to make cash withdrawals to purchase items. The fact that some of those withdrawals would appear, from the bank’s records, and, more importantly, from the document which
Ms Denton was cross-examined with respect to which is not before, occurred at late hours does not dissuade me from accepting that evidence.
Further, that evidence, in itself, would suggest that withdrawals of about $15,000 per annum had been made by Ms Denton from ATMs at clubs, etcetera, as well as, of course, ATMs from other places. But I don’t feel that there is the causal nexus to draw an inference because transactions have occurred at that place that they must, of necessity, have, then, been applied towards gambling. And, indeed, on the basis of the concessions that would appear to be made by Mr Denton, in his evidence and, certainly, in closing submissions, that, whilst he attended to payment of the mortgage and a number of other expenses with respect to the home, none of which, for the duration for the period in which they were paid by the husband, are in dispute, that he did not fund the remainder of household expenditure.
There would not appear to be any real controversy that Ms Denton met the family’s day-to-day expenses, such as putting food on the table and buying clothes. There is some real dispute as to who paid school fees. Ms D indicates, clearly, in her evidence, her mother paid them and that her mother provided her with an envelope with cash so that she could take it to the school office and pay it. Mr Denton seized upon that to claim that, whilst Ms Denton may have handed the envelope to Ms D, it was his money. But that, of course, wasn’t his evidence in his affidavit.
Having regard to all those aspects of the evidence, I am satisfied and find that Ms Denton was subjected to a course of conduct by Mr Denton, not only by the violence and abuse that has been referred to and which is unchallenged in the evidence of the two adult children, but, also, that the contributions that Ms Denton made as home-maker and parent were: (a) made more arduous as a consequence of that conduct; (b) performed almost entirely, if not, solely, by Ms Denton and, later, by some or all of the children of the relationship; and (c) that the overall contribution made by Mr Denton, as a home-maker and parent, was negative.
That is not to decry the Full Court’s preference for dealing with conduct as a matter which impacts upon the onerous nature of a positive contribution by its victim, but to accept that the course of conduct engaged upon by Mr Denton did not just impact upon, and make more arduous Ms Denton’s contributions, but impacted on the entire family and the nature in which the family was run, ie, separate finances, separate duties to be performed and, as was put in submissions, Mr Denton, to some extent, coming and going, is a contribution on Mr Denton’s part that does him no credit and, I find, is negative and has impacted, negatively, on his family.
That has, also, had the effect that these six children are completely estranged from their paternal family. They would appear to have little, if anything, to do with their father, and each of the father’s sisters, who were called to give evidence and made very clear that they have and want nothing to do with them and, certainly, nothing to do with their children. That is an impact that will follow for these children for the rest of their lives, whereas Mr Denton can walk away from it.
In turning more broadly to contribution, I am satisfied that the parties would appear by the time of submissions, not significantly in dispute, that whilst Mr Denton has for the majority of the time since the mortgage was obtained met the mortgage payment and has certainly for a period post separation in 2002 and up to the time that he left the home attended to payment of other expenses which have provided some benefit to the family, including rates and insurances, etcetera; that Mr Denton has made an equal contribution but for the adjustments which I propose to make having regard to the matters which I have commented upon.
Overall and having regard to all of that evidence, I find contribution favours Ms Denton in the nature of 70 per cent.
I then need to turn to section 75(2) factors. Counsel for Ms Denton walked me through the factors individually and I will adopt that approach.
A: The age and state of health of the parties: The parties are the same age and there is no evidence before me of a medical nature to suggest that either party cannot continue to participate in paid employment, now or into the future. There is certainly some suggestion in
Mr Denton’s evidence, at least in cross-examination, that he has an injury to one or both of his shoulders and may require further operative treatment. He is receiving Workers Compensation payments on his evidence, which is part of his income and which, indeed, is of a level that is very proximate to the amount that is disclosed to the Tax Office before any other earning from employment. But I have no evidence of a medical nature that suggests any impact for either party. I have no evidence as to the extent of Workers Compensation payments, because they weren’t disclosed other than to be referred to in cross-examination and I have no evidence as to the value of the claim, if any. That is a resource, whether it is as a guarantee of future ongoing medical treatment, medical treatment expense payments or ongoing payments to Mr Denton, that has not been disclosed and which I cannot quantify but find exists.
B: The income, property and financial resources of each of the parties and their physical and mental capacity for gainful employment. The above matters probably feed more directly into that. Neither party has any incapacity that is evidenced that would preclude them participating in paid employment, although clearly Ms Denton’s income-earning ability is limited. I accept that Mr Denton’s income and his earning capacity is greater by, at least, 100 per cent or a factor of two than he has disclosed both to this court and the Tax Office.
C: Whether either party has the care and control of a child of the marriage who has not attained 18 years. The youngest child of the relationship, [Z], is under 18. The five elder children also live with
Ms Denton. I accept that they make some financial contribution to the household, but that is all it is, a contribution and that they provide support for each other and, no doubt, find support in each as a consequence of the trauma that they have experienced in their childhoods and that Ms Denton has also experienced.
D: Commitments of each party necessary to enable them to support themselves. Ms Denton may not have a legal duty to support her elder children, although one of them is still at university, but that is a duty that she continues with and provides assistance and support emotionally as well as by putting a roof over their heads.
E: The responsibility of either party to support any other person.
Ms Denton is not in a relationship. It would appear from Mr Denton’s evidence that he is in a relationship. Whether that is a full-time residential de-facto relationship or not is unclear, although his evidence suggests that for some months this year he has been living seven days a week with his partner. That’s at odds with the evidence given by each of his sisters. There is no evidence at all of this woman’s income, property or otherwise, other than it is asserted by Mr Denton that she had the wherewithal to pay for the airfares and majority of expenses for both parties to undertake a trip to the Philippines in the last 12 months and that she owns three properties in the Philippines, the values of which are not known. She is a resource. She is not on evidence and a Jones v Dunkel inference is entitled to be drawn that she provides some support and succour to Mr Denton.
F: The eligibility of either party to a pension or allowance and the rate at which it is paid. Ms Denton receives some Commonwealth assistance through a Newstart allowance which is taxable and I accept is disclosed in her assessments. Mr Denton is not presently in receipt of income-tested pensions as far as the court is aware, but he is engaged in active employment as well as receiving Workers Comp payments. I accept that Mr Denton’s income is not fully disclosed either to this court or the Tax Office.
G: Where the parties have separated a standard of living that is reasonable. Mr Denton has had the benefit of two overseas holidays; has had the ability to fund $4000 to $5000 of expenses to pay a private investigator to follow Ms Denton. He is presently living with his partner. Whether that is in the sense of a relationship or simply being provided with accommodation at little or no cost he is not contributing at all financially to the support or maintenance of the one child under the age of 18 years or, as best as I can discern, any of the adult children and I would be incredibly surprised if, given the evidence given by
Ms D and Mr D, that their father has indicated they will never get anything further from him, is not correct. That factor favours
Ms Denton who clearly is in limited employment and has limited earning capacity.
H: The extent to which payment of maintenance would assist in education or training is not relevant.
H(a): The effect of any proposed order on the ability of a creditor to recover a creditor’s debt. There are three debts that would be relevant for that purpose. There are the two debts to which I’ve referred to, being debts that the husband alleges to his family and a friend and I’m asked to accept that they were, in fact, moneys that were advanced used by the husband for joint purposes and which should be repayable from the pool of assets. I do not accept that that is so. Having found that the parties separated on the wife’s allegation in 2002 the two loans advanced to the husband were advanced post separation and no evidence was produced to support or corroborate the debts.
The evidence at to what they were provided for or how they were applied is unclear. No document has been produced that corroborates a single transaction that gives rise to these loans. The documents that have been produced with respect to the loans would appear to have been produced post advance, if indeed the advances occurred. The other debt that remains, which arose during the course of evidence by each of the valuers, is a debt owed by the husband to a bona-fide, I presume, third party.
That arises from a consideration of the certificate of title for the home of the parties, which indicates that there is a writ recorded by Ms T, Physiotherapy and Sports Injury Centre, as regards the interests of the husband and arising from a judgment from the local court Liverpool issued, it would appear, on 3 April 2002, some eight and a half years ago. That was not referred to in the evidence and, accordingly, there is nothing to quantify the debt. But I intend to take it into account and ensure that it is paid as the Act requires me to do in protecting the interests of third parties and to ensure that any transfer of the house or, indeed, its sale and distribution of proceeds can proceed unhindered.
J: The extent to which a party whose maintenance is under consideration has contributed to the income-earning capacity, property and financial resources of the other. It’s difficult to gauge that issue, although quite clearly funds from the jointly owned Queensland property have come into Mr Denton’s hands and I don’t know what’s happened to them beyond the mortgage reduction. There’s no real suggestion that either party has contributed to the other’s income or earning capacity other than the business operated by Mr Denton in a number of different guises at different times when the relationship subsists and he will retain that income-earning ability.
K: The duration of their marriage and the extent to which it has affected each party’s earning capacity. These parties have had a long marriage. They have been together, from the date of marriage to the present, not quite 30 years. During that time, and as I will return to in the consideration of subsection (O), both the wife and the six children of the parties have suffered a degree of unhappiness, to put it at its very mildest, which was entirely unnecessary. It was suggested in the evidence of one of the husband’s support witnesses, one of his sisters, that the husband’s behaviour in his marriage – at least part of the behaviour as asserted by Ms Denton - was culturally appropriate.
There’s no evidence before me to indicate whether that is so or not. And to the extent that this court generally considers culture as a significant issue, particularly in parenting proceedings but also to give a context to any decision, I would not accept that behaviour of the type that is described and complained of, particularly by Ms D and Mr D, has any cultural justification. Further I do not accept that in any secular approach towards the conduct of parties or the faith that these parties subscribe to would, in any way, justify or represent other than a significant departure from accepted cultural and moral mores.
The earning capacity of Ms Denton has been affected. She came into the relationship with some qualification; has had substantial periods out of the workforce when she has either not been in paid employment, has been in part-time employment or has been working in the parties’ joint mixed business. As a consequence of that her earning capacity is reduced to her present level of income and earning. And, again, I’m not critical of her for that employment; simply to acknowledge the fact that she earns an income that could best be described as subsistence level and would not ever rise her, but for her assets, above the poverty line. Mr Denton has a much greater income-earning capacity and much greater than has been disclosed.
L: The need to protect a party who wishes to continue that role as a parent. It’s not a matter of great significance as the one child of the relationship under 18 is 17.
M: If either party is cohabitating the financial circumstances of the cohabitation. I accept that, at least, based on Mr Denton’s evidence as to the last few months of his residence, he is living in the same household with his “girlfriend”, if not, in fact, in a committed relationship with her. She is not before the court and there is no evidence as to her circumstances and a Jones & Dunkel inference again applies.
N The terms of any order to be made and the way it will impact on others including the parties, any partner or trustee in bankruptcy, I do not consider is particularly relevant.
NA Any child support assessment or child support paid. The only evidence I have of child support is that there is little or none paid and hasn’t been since these parties separated. Indeed, during the relationship, the evidence would appear to support the fact that
Ms Denton has been on her own financially to run the house, whilst
Mr Denton’s income has been used by him for a number of purposes, but including those which benefit the parties, such as having serviced the mortgage from the failed business venture and that is how that debt arose, not from the acquisition of the property itself.
I also note in that regard the two holidays that Mr Denton has undertaken whilst accumulating $4000 of arrears of Child Support on his own admission; the fact that he doesn’t pay at all at the moment because it is being reviewed and he is challenging paternity of a 17 year old child. During the relationship a similar pattern had continued. Mr Denton had undertaken a substantial trip overseas when there were three small children left for Ms Denton to care for.
O: Other facts or circumstances. In that regard I again return to the matters to which I have referred, particularly regarding the Kennon argument and also the Black & Kellner arguments. It is impossible for me to accurately determine what financial resources exist, whether in the nature of a partner, the workers comp claim, the ability to borrow or have financial assistance or intermingling of funds between
Mr Denton and his family or other matters. I am also satisfied that the property in which these parties live is in substantial disrepair.
Certainly, Ms Friedlander is quite accurate in asserting that the property has been valued in its present state and accordingly there can and should be no adjustment for that. However, the subsistence existence that is being led by Ms Denton and her six children, who have all gone on, it would appear, to do well to varying extents, as is no doubt consistent with their parent’s expectations, and particularly
Ms Denton’s, that they would achieve better and that they would have things such as an education ahead of material wealth and benefits to Ms Denton or the household in general, is clear.
It is a credit to those children that they have done so well in the circumstances from which they have come. But all of those circumstances, weighed up with the other factors to which I have referred, suggest to me that it would be appropriate for a further adjustment of 10 per cent to be made, having regard to section 75(2) factors.
Justice and Equity. The court is also always required to turn at the end of the matter to consider issues of justice and equity and to determine whether the outcome that is to be arrived at, based on the above findings, is just and equitable. The difficulty I have as flows from Black & Kellner, Weir & Weir, and the other cases to which I have referred is that I have no real idea what may exist for division between these parties or what real income is in fact earned by Mr Denton or capable of being earned by him.
I don’t have any idea of those things because I haven’t been told. I am aware the proceedings had been listed in February and were adjourned for a variety of reasons, including a desire by Mr Denton to answer
Ms Denton’s case. A number of the allegations raised in Ms Denton’s case, notwithstanding that adjournment and the cost which the parties have been put to as a consequence, have not been answered nor has there been full or proper disclosure.
In some circumstances documents which should have been before the court, having been generated at the very least in response to a subpoena still have not come before the court. They are matters of some concern, but I am satisfied that doing the best I can to ascertain the income, present positions, present resources and present assets of the parties that an 80/20 division of the equity in the home is appropriate and accordingly I make the following orders and we will get them to you as quickly as we can, probably by the end of the week.
ORDERS DELIVERED
Following the conclusion of these proceedings and the delivery of reasons for judgment and the making of orders which conclude the substantive proceedings, an application for costs is made by counsel on behalf of the wife. It has been canvassed whether those costs should be ordered in a sum certain by reference to the court’s indicative scale in schedule 1 of the Rules or otherwise, whether they should be indemnity costs pursuant to Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225 and whether they should be costs in the cause to be agreed, or taxed.
The latter cause would not conclude issues between these parties, and in common experience, would result in a protracted and costly process for both which would not do anything for either of them, as regards the very limited and fragile ability they have to deal with each other into the future. I am satisfied that indemnity costs would not be appropriate, although in fairness to the wife’s counsel, it’s not being seriously pressed. Whilst, certainly, there are a number of criteria to consider under section 117, the requisite test in Colgate –Palmolive v Cussons Pty Ltd, in my mind, hasn’t been met in that it could not be said that defence, for want of a better description, by the husband of the wife’s claim and its resistance was futile from the outset.
Turning, then, to the relevant s.117(2)(a) considerations, I am required to consider the financial circumstances of each of the parties. Neither of the parties has put any evidence before the court that would suggest that either is in a substantial income position, although by reference to the reasons I have just delivered, I have some serious belief that the husband’s financial position is far better than he deposes. The wife’s financial position is modest, to say the least.
Neither party, it would appear, is in receipt of Legal Aid and, indeed, both are outside of the Commission’s guidelines.
The conduct of the proceedings under subsection (c) is a relevant consideration, including within the terms of that section:
The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the forgoing, the conduct of the parties in relation to pleadings, particular discovery, inspection, directions to answer questions, admission of fact, production of documents, and similar matters.
They are matters that loom large in these proceedings. There is a significant issue regarding Weir & Weir and Black & Kellner that has arisen, and I have accepted, at least in large part, arguments in that regard. Further, the proceedings had been listed for trial in February of 2002, and at that time adjourned on the husband’s applicant to enable him to respond to the wife’s case which, whilst it, at least in part, had been put on late, had been put on. That created some degree of cost, at least on that occasion, but that has been remedied and the matter has now proceeded.
Subsection (d): whether the proceedings were necessitated by the failure of a party to comply with the previous orders other than procedural directions which remain, nonetheless, orders of the court, there is no serious suggestion that there has been a failure to comply with orders of the court. The issues with respect to discovery, perhaps, pertain more to subsection (c) than (d).
Subsection (e) deals with whether any party has been wholly unsuccessful. The historical connotation of that provision has referred to the success of the party rather than the lack of success. In its present framing, it could fairly be described that Mr Denton has been wholly unsuccessful in obtaining the relief that he has sought from the court, noting that his response had sought orders for a 60/40 division of the property in his favour.
The real gravamen of the application turns on subsection (f), whether either party to the proceedings made an offer in writing to settle the proceedings in the terms of the offer. I have before me, as exhibit M13, two letters, being one letter dated 4 September 2009 from the wife’s attorneys to the husband’s, and a letter 8 September 2009 from the husband’s attorneys to the wife. They refer to an offer that had been put by the husband and from the timing of the correspondence, one would presume that that arises out of a proposal put during the conciliation conference between the parties, which had occurred two days earlier than the first letter, on 2 September 2009, but the terms of that offer are not known.
The letter 4 September 2009 from the wife’s attorneys proposes a sale of the Property K property, and after payment out of the mortgage, a division of the proceedings on a 60/40 per cent basis in the wife’s favour, and as a consequence, Mr Denton would have received 40 per cent of the proceeds rather than the 20 per cent which is now being awarded. That would have doubled the amount which would have been received by Mr Denton to around $280,000 as opposed to about $140,000. It also did not make any adjustment or allowance with respect to the two other items that have been deal with in my orders, being a writ recorded against title as regards Mr Denton’s interest, and cost of removal of items, if indeed there is to be a cost on a net basis after sale of such items as can be sold.
That offer is expressed, on its face, to be without prejudice, save as to costs. Certainly, section 131 of the Evidence Act1995 (Cth) would allow it in irrespective of such suggestion, and it is indicated quite clearly that it is made under the principles in Calderbank & Calderbank [1976] Fam 93, which would and should have clearly put Mr Denton and his attorneys on notice that it would be relied upon in the proceedings with respect to an application for costs from the date of the offer, and that is, indeed, what is sought: an order for costs with respect to the proceedings from 4 September 2009 to conclusion.
In relation to a sum certain, there is no preclusion to the court being guided by the schedule 1 scale, it being nothing more than an indicative scale of costs by reference to rules 21 and 44. The indicative scale is intended to guide and give certainty of outcome rather than engaging in the process that had, until recently, applied under the Family Court’s Rules 2004 of taxation, and or in the State system of assessment. That is a system that would cost the parties further money, further delay, and in circumstances where they have already been engaged in proceedings, now for well in excess of 12 months.
Accordingly, I propose to use the indicative scale, at least to the extent of formulating or giving some relevance to a lump sum. These proceedings were listed for a two day hearing, but have ultimately run for three days. The scale in stage 5, then, refers for preparation of $4650 for a two day hearing, plus $995 for any subsequent days. Accordingly, the preparation element under the scale would be $5645. The hearing itself: Ms Druitt has appeared for three days at a fee of $3300 per day, or $9900, and Ms Druitt’s instructing solicitor was present for the first two days of the hearing, at the daily hearing fee of $1760, or $3520.
The matter had also been listed for hearing, as I have indicated, in February of this year, at which time the matter was adjourned, although the wife was present to pursue her case, and the orders made on that day by Dunkley FM noted that. Accordingly, those costs would also be incurred, which would be, again, $3300 plus $1760, or equating to $5060. In relation to disbursements, I am advised that an estimate of the costs incurred in obtaining valuations from a valuer, Mr A, and in his attendance to give evidence and be cross-examined, which evidence I accepted, are in the order of $1700.
And, in addition to that, there would be some other inter-office disbursements, if I could refer to them as that, in the nature of fax, photocopying, noting that a number of subpoena had been issued, and conduct money would have no doubt been paid with respect to those and, accordingly, some further adjustment would and should be made in that regard.
Having reference to that scale and the amounts that I have referred to, I propose to make an order for costs using that scale and making some addition with respect to the unquantified disbursements to which I have referred and order costs in the sum of $26,000 in total, which would represent each of the indicative scale amounts that I have referred to, and valuer’s fees, which total $25,825, plus some very modest allowance with respect to disbursements.
I certify that the preceding one hundred and ninety-four (194) paragraphs are a true copy of the reasons for judgment of Harman FM
Date: 22 November 2010
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