Durham & Durham
[2022] FedCFamC1F 511
Federal Circuit and Family Court of Australia
(DIVISION 1)
Durham & Durham [2022] FedCFamC1F 511
File number: SYC 9 of 2016 Judgment of: MCGUIRE J Date of judgment: 11 August 2022 Catchwords: FAMILY LAW – PROPERTY – Section 79A Order by consent where the parties separated between 1992 and 1996 and entered into consent property orders – application by the husband filed January 2016 for orders under s 79A and s 79 of the Family Law Act 1975 (Cth) – contributions – holistic approach – one pool –“Kennon” argument where wife alleges family violence during the relationship – issue of date of separation - identification of the property pool – s 75(2) factors - net property pool divided 65 per cent to the wife and 35 per cent to the husband – wife’s spousal maintenance application out of time – requirement for leave pursuant to s 44(3) – considerations of hardship and exercise of discretion – application for leave refused Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 44(3), 44(4), 75(2), 79 and 79A
Cases cited: Bevan & Bevan (2013) FLC 93 – 545
Briginshaw & Briginshaw (1938) 60 CLR 336
Clauson & Clauson (1995) FLC 92-595
Fielding & Nichol [2014] FCWA 77
Fox v Percy (2003) 214 CLR 118
Galea & Galea (1990) 19 NSWLR 263
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143
In the marriage of Good v Good (1982) FLC 91-249
In the marriage of Woolley v Woolley (No.2) (1981) FLC 91-011
Keating & Keating (2019) FLC 93-894
Kennon v Kennon (1997) FLC 92-757
R v Watson; Ex parte Armstrong (1976) 136 CLR 248
Stanford & Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 159 Date of last submission/s: 21 April 2022 Date of hearing: 14 and 15 October 2021 and 14 April 2022 Place: Hobart Delivered Melbourne Counsel for the Applicant: Mr Hogg Solicitor for the Applicant: Orman Solicitors Counsel for the Respondent: Mr Fowler Solicitor for the Respondent: Russell C Byrnes Solicitor ORDERS
SYC 9 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR DURHAM
Applicant
AND: MS DURHAM
Respondent
order made by:
MCGUIRE J
DATE OF ORDER:
11 August 2022
THE COURT ORDERS THAT:
1.By consent pursuant to s 79A of the Family Law Act 1975 (Cth) the consent property orders made between the parties in the Family Court of Australia at Adelaide on 29 November 1994 be set aside.
2.The net property pool of the parties be distributed as to 65 per cent to the wife, Ms Durham, and 35 per cent to the husband, Mr Durham, in accordance with these Orders.
3.Within 14 days from the date of these Orders the parties do all acts and things and sign all documents required to simultaneously authorise and release the balance of the monies in the sum of $172,927 held upon trust for the parties by Orman Solicitors to the wife.
4.Within 60 days from the date of these Orders the wife’s solicitors notify the husband’s solicitors of her election as to whether she wishes to retain the property situate at 1 D Street, City E in New South Wales and upon the wife’s election to retain that property the husband shall within 21 days of receipt of notification transfer all his rights, title and interest in that property to the wife and in order to effect such a transfer, the wife shall provide to the husband, at her expense, a Discharge of Mortgage/s executed by the National Australia Bank and securing the property at 1 D Street releasing the husband from his obligations thereunder.
5.Until the transfer of property in accordance with Order 4 herein the husband will continue to pay and indemnify the wife from payment of all liabilities falling due in relation to the 1 D Street, including but not limited to mortgage repayments, rates, land tax, water charges and levies.
6.The wife, from the date of the transfer of 1 D Street in accordance with Order 4 herein, pay and indemnify the husband from payment of all liabilities now or hereinafter falling due in relation to 1 D Street including but not limited to mortgage repayments, rates, land tax, water charges and levies.
7.In the event that the wife elects not to retain the property at 1 D Street or is unable to refinance the mortgage of 1 D Street on or before the date provided for in Order 4 herein the husband shall retain the said property at value attributed in the Reasons herein.
8.THAT contemporaneously with either the transfer of the property at 1 D Street to the wife or within twenty one (21) days of notification by the wife to the husband that she does not wish to retain the property at 1 D Street the husband shall:
(a)Transfer and/or vest all his right title and interest in the following to the wife absolutely:
(i)the Motor Vehicle 1 registration number …;
(ii)the proceeds of any bank account or like investments in the name of or to the benefit of the wife as at the date of these Orders;
(iii)all personalty and chattels in the possession or control of the wife as at the date of these Orders; and
(iv)any superannuation policy or entitlement of the wife.
(b)Be solely responsible for and indemnify the wife in respect of:
(i)any and all liabilities attaching to any asset retained by the husband pursuant to these orders and if such liability is secured by mortgage then to provide a release of the wife’s liability by discharge or otherwise; and
(ii)any and all liabilities incurred by the husband since separation in joint names or in his name alone.
(c)Pay to the wife a lump sum cash amount so as to give effect to a 65 per cent distribution of the net property pool determined by the Reasons herein and dependent upon the election of the wife at Order 4 herein.
9.THAT contemporaneously with the payment to the wife at Order 8(c) herein the wife shall:
(a)Transfer and/or vest all her right, title and interest in the following to the husband absolutely:
(i)the property situate at 1 D Street but dependent upon the election to be nominated by the wife pursuant to Order 4 herein:
(ii)the property situate at 1 D Street, City E in New South Wales and the F Company business situate thereon;
(iii)H Pty Ltd;
(iv)G Pty Ltd;
(v)the balance of any bank account or like investment including of the F Company business, in the sole name of or to the benefit of the husband as of the date of these Orders;
(vi)all personalty, chattels, plant/equipment, livestock, or motor vehicles, in the possession or control of the husband as at the date of these Orders; and
(vii)any superannuation policy or entitlement of the husband.
(b)Be solely responsible for and indemnify the husband in respect of:
(i)the wife’s HECs debt;
(ii)the wife’s debt to Mr J and Ms J;
(iii)any and all liabilities attaching to any asset retained by the wife pursuant to these Orders or if such liability is secured by mortgage then to provide a release of the husband’s liability by discharge or otherwise; and
(iv)any or all liabilities incurred by the wife since separation in either joint names, or in her name alone.
10.THAT the parties each have liberty to apply in respect of the execution or operation of these Orders.
11.THAT the wife’s application for leave to bring an application for spousal maintenance be refused and the application for spousal maintenance be dismissed.
IT IS FURTHER ORDERED THAT
12.Within 28 days from the date of these Orders the husband shall make available to the wife, or her nominated representative, the wife’s personal items stored in the shipping containers at F Company, upon the wife’s request at a mutually convenient time to be agreed in writing and the wife be at liberty to arrange a third-party to collect her household furniture and effects stored in the shipping container at F Company, with the husband to permit access to the third-party for the purposes of collecting the items at a mutually convenient time agreed in writing.
13.Should the wife have not arranged for the collection of her belongings within 6 months from the date of these Orders, the husband be at liberty to retain, sell or destroy any items remaining on the property without further notice to the wife.
14.Pursuant to s 81 of the Family Law Act 1975 (Cth) the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym of Durham & Durham has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCGUIRE J
APPLICATIONS
The husband, Mr Durham, initiated these proceedings on 4 January 2016 in an application seeking final orders for both parenting and property issues. Parenting matters are no longer live. The husband relies on an amended initiating application for orders pursuant to s 79 of the Family Law Act 1975, (Cth) ('the Act') filed 28 September 2021. In his pre-trial case outline the husband seeks 65 per cent of the net property pool inclusive of superannuation. He proposes a 15 per cent loading to him on account of contributions with no adjustments for matters under s 79(4)(e)–(g) including s 75(2)factors. It is implicit in his application that he asks the Court to deal with the matter on a one-pool basis given the minimal superannuation interests.
The wife, Ms Durham, asks for orders giving her 75 per cent of the net property pool as it currently sits (although she would ask for 70 per cent of that pool should the Court accept her submission that a debt owed by the husband to the BB Bank in a quantum of $248,772 be quarantined from the property pool where she says that the loan was obtained unilaterally by the husband and arguably post separation). She argues generally for a loading of 10 per cent of the property pool in her favour on account of contributions and consequently somewhere between 10 – 15 per cent adjustment to her on account of s 75(2) factors.
The wife in a later amended Response seeks orders for spouse maintenance in a quantum of $800 per week from 4 January 2016, being the date of commencement of the property proceedings, until the husband’s 65th birthday in 2026, but where circumstantially she asks for such an order to have the practical effect of allowing her to retain a property at 1 D Street, City E so as to re-establish her business and thereby provide her with an income. To this end she proposes either lump sum payment of “arrears” of maintenance for the six and a half years since January 2016 and/or an order under s 77A of the Act giving her the property unencumbered.
The husband is opposed to any spousal maintenance order arguing initially that an order under s 44(3) of the Act for leave is required where the wife does not raise the issue of spousal maintenance until her amended response of 16 October 2020 and where the parties have been divorced since 13 July 2015, and separated finally in any of 2008, 2012 or 2015. If leave be required then the wife is considerably out of time in bringing her applications.
The substantive applications are themselves premised on the fact that the parties had previously separated and entered into consent property orders made by a Registrar of the Family Court on 29 November 1994 and hence raising necessary consideration of s 79A of the Act. In their final submissions, counsel for each party confirmed their consent to an order under S 79A discharging the previous final property orders and in circumstances where the parties effectively agree that their previous period of separation occurred between 1992 and 1996; that they reconciled and resumed cohabitation for a number of years from 1996 albeit in circumstances which remain disputed; that they had three children together being Mr X (born in 1995), Mr Y (born in 1996) and Ms Z (born in 1998); where they bought and sold real property during the period of cohabitation and intermingled their finances; and significantly where each of the parties now seeks to invoke the jurisdiction of the Court under s 79 of the Act.
I will make the requisite s 79A order by consent.
BACKGROUND
The husband was born in 1961 and is now aged 60 years. The wife was born in 1963 and is now aged 58 years.
The parties first commenced cohabitation in about 1983 or 1985. Nothing of significance turns on this dispute.
In 1986 the parties moved to City DD where the husband had obtained employment in real estate.
In May 1987 the parties purchased a property at K Street, City DD for $71,000 borrowing $60,000 by way of mortgage and paying the balance from their joint savings.
In 1988 the wife worked for approximately a year in Western Australia in hospitality and during such time she claims to have saved approximately $60,000. The wife returned to City DD in 1989.
In 1989 the husband moved to South Australia to further his career in real estate. The wife left her then employment and joined him after three months.
The parties were married in 1989.
In April 1992 the parties purchased a property at M Street, City DD for $115,000 with the property being tenanted.
The parties separated in 1992.
In 1993 the wife says that she purchased a Motor Vehicle 3 for $30,000 from her savings and in 1994 purchased a motor home for $16,000.
In late 1994 the parties were intimate albeit with the wife saying not by consent. The parties’ first child, Mr X, was conceived.
On 29 November 1994 property orders were made by consent between the parties in the Family Court at Adelaide. Those orders provided inter alia for the wife to transfer her interest in the M Street, City DD property to the husband and the husband to transfer his interest in the K Street, City DD property to the wife. The implication in the evidence is that the parties benefited equally in the settlement.
In December 1994 the wife purchased a property at Q Street, Suburb N, South Australia for $78,000 using part savings and part mortgage loan. In 1995 the child Mr X was born with the parties remaining separated at the time.
In late 1995 the parties were again intimate during an encounter at EE Town with the wife again claiming no consent. The child Mr Y was conceived.
The parties resumed cohabitation in late 1996 with the wife then moving to EE Town to live near the husband's parents so as to obtain assistance in caring for Mr X and Mr Y. The wife rented out her house at Suburb N.
In June 1997 a property was purchased at P Street, EE Town for $135,000 assisted by a mortgage loan of $115,000.
In 1998 the husband obtained rented accommodation at FF Town.
In July 1998 the wife sold the property at K Street, City DD for $110,000.
In 1998 the child Ms Z was born.
In 1999 the parties purchased land at Suburb O, Victoria for E$86,000.
In June 2000 the husband sold the property at M Street, City DD for $105,000.
In 2001 the parties purchased a property at L Street, FF Town for $57,000.
In early 2001 the wife sold her property at Suburb N, South Australia for $141,500 putting net proceeds of $80,000 – $90,000 towards the loan on the property at P Street, EE Town.
In March 2003 the parties borrowed $367,000 secured by the P Street property and purchased land adjacent to the husband's parents property at EE Town at a purchase price of $350,000 ('Property R'). The property was registered in the sole name of the husband.
In 2004 the P Street, EE Town property was sold for $320,000 and presumably the ‘Property R' was hence mortgaged on its own security.
In October 2004 the parties purchased land and a business at 2 D Street, City E for $660,000. The parties and the children moved to live at the business and the wife assumed operation of the business with the husband working away from home for at least a number of days each week.
In late 2004 the wife was a recipient of a Police Family Violence Order taken out against the husband for her protection with ultimately a one year ADVO being made against the husband.
In 2007 the parties purchased 1 D Street, City E (adjacent to the business) for $425,000 with the assistance of a mortgage loan from Westpac Bank of $150,000 and where the wife says that she contributed $17,000 from her savings towards the purchase.
In 2008 the husband alleges that the parties separated under the one roof.
In 2010 the wife alleges that she was assaulted by the husband at the business causing a fracture to her lower right leg and where she was hospitalised.
In January 2010 the husband says that he left the matrimonial home and took up residence in a granny flat on the property at 2 D Street. The wife, however, says that the husband moved from the matrimonial home in January 2012.
In mid-2012 a further Police Family Violence Order was made against the husband for the protection of the wife.
In late 2012 the husband sold Property R for $391,000 and the water rights separately for $240,000.
On 29 October 2012 the wife alleges that the husband rammed her car, grabbed her around the throat, and took her car keys.
In 2013 the husband says that he repartnered with Ms B.
In October 2014, a year after the husband says that he had repartnered, the wife gave the husband E$330,000 which she says was savings accumulated by her and with a request that the husband invest it for her. These monies eventually found their way into a S Company account. The husband became a co-signatory.
In late 2014 the husband asserts that he was assaulted by the wife. The wife says that the husband arrived at the business in a drunken state and told her that he had taken an overdose of antidepressant medication. The wife called an ambulance and the husband was taken to hospital.
In early 2015 the wife drove the child Ms Z to Sydney International Airport for Ms Z to fly to Country GG. The wife says that this was the final date of separation. She says that she returned to F Company the following day to find that the husband had removed the business computer and financial records of the business together with diverting the business phone number to the his own phone and had removed the maintenance equipment for the business being a tractor and slasher. She says that he had locked her out of the F Company bank accounts. The husband disputes the wife's version of events. He says that the wife had effectively left the business and that he assumed the management of the business from that date. A Police Family Violence Order was obtained against the wife on behalf of the husband.
On 22 January 2015 the wife withdrew $25,000 from a Visa card linked to the husband's account. On 23 January 2015 the husband withdrew $25,000 from the S Company account and transferred the balance of $303,558 from the S Company account to Orman Solicitors trust account in circumstances where the husband was or became the signatory to those trust accounts and where Orman Solicitors have represented him in these proceedings.
During 2015 the husband and Ms B assumed management of F Company and the wife was excluded.
In early 2015 a final AVO was made for the protection of the husband and the husband’s partner (Ms B) against the wife.
On 12 June 2015 a divorce order was made in the Federal Circuit Court at Canberra on the husband's application. That order became absolute on 13 July 2015. There is no evidence before me that the wife contested the husband’s declaration as to the date of separation, although in these proceedings she has suggested 2015 as a separation date.
In November 2015 the wife left City E and ultimately moved to Queensland. The wife says that she was denied entry to the property at City E where she had apparently attempted to continue a management role in the business but without access to the financial facilities.
In late 2015 the wife was charged with breaching the AVO.
On 4 January 2016 the husband commenced these proceedings in an application filed in the Federal Circuit Court.
Since January 2016 the wife has lived variously with her mother in Queensland, in a women's shelter, or in other transient accommodation. The husband and Ms B remain in occupation and management of F Company.
In mid-2016 the wife's charges of breaching an AVO were heard and dismissed with the AVO being revoked and costs awarded to the wife.
The husband married Ms B in 2019.
The wife has since lived in south-east Queensland. She has been self-employed or obtained job seeker benefits. She has had a problematic relationship with her own mother and brother.
The husband has remained in occupation of the two properties at City E and F Company which is managed by Ms B whilst the husband continues his employment with an income of approximately $173,000 per annum gross over and above the benefits of the business.
ISSUES
Where the parties generally agree the balance sheet, there are two remaining issues as to the property pool. Firstly, the husband argues for the inclusion of a liability by him to C Bank of $248,772. The wife says that this is not properly a debt of the marriage. Secondly, the wife claims a liability to a Mr T of $12,000 being a personal loan. The husband disputes the fact of and the proper inclusion of this as a matrimonial liability.
There is generally an issue as to the ultimate date of separation of the parties and where there is relevance in respect of the determination of the property pool and issues of contribution. The husband has variously asserted separation to have occurred in 2008 under the one roof, 2012 when he left the former matrimonial home, or 2015 when it is abundantly clear that any financial relationship between these parties ended. The wife seems to prefer the 2015 date although notably the parties were divorced on the husband's application on 12 June 2015 becoming absolute or final on 13 July 2015.
There is a broad issue between the parties as to whether and who should receive a loading for superior contributions where each of the parties asks for a 10 per cent loading in his or her favour. The wife asserts superior specific financial contributions both during and pre–the relationship. She argues a greater role as homemaker and parent. Specifically, the wife argues for a consideration under what is colloquially known as a “Kennon claim” where she says that she was subjected to violent, abusive and financially negative conduct by the husband during the relationship all of which made her contributions more onerous. The husband says that he made greater financial contributions during the marriage than did the wife and that he has made superior post–separation contributions in meeting all of the business expenses and maintenance and improvement to assets as well as servicing of joint debt. He also claims a post–separation contribution to the care of the child Ms Z.
The wife argues for an adjustment to her on account of matters under s 79(4)(d) – (g) and, in particular, relevant s 75(2) factors including a current and potential disparity in income. The husband says there should be no adjustment.
The wife seeks spousal maintenance such to be capitalised in the payment of arrears and/or consideration under s 77A of the Act. The husband argues that the wife should be precluded at the stage of being refused leave to bring the application out of time.
THE RELEVANT LAW
Section 79 of the Act provides for alteration of the parties’ interests in property where subsection (1) gives the Court a broad discretion within the statutory limitations. In R v Watson; Ex parte Armstrong[1] the High Court observed:
…The judge called upon to decide proceedings of that kind is not entitled to do what has been described as “palm tree justice”. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down…
[1] (1976) 136 CLR 248 at 257.
Section 79(2) significantly provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Prior to the decision of the High Court in Stanford & Stanford[2] there had evolved a relatively strict process for trial judges involving a structured “four step basis”[3] of determination, effectively being to determine the property pool at value, then to consider and assess the contributions to that pool, thirdly to make any appropriate adjustments pursuant to s 79(4)(d) – (g), and then finally to “stand back” and consider whether the proposed orders emanating from the preceding three steps be just and equitable. However, the High Court in Stanford emphasised s 79(2) mandating an independent determination on the particular circumstances of each case as to whether it be just and equitable to making any orders at all altering the property interests of the parties with a warning that the consideration is not one to be simply conflated with the considerations of contributions and other factors at s 79(4). The High Court assisted by setting out three fundamental propositions that should not be obscured:
[37]First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing (emphasis added) legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (original emphasis). The question posed by s 79(2) is thus whether, having regard to those existing (emphasis added) interests, the court is satisfied that it is just and equitable to make a property settlement order.
[38]Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. …
…
[40]Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”.[4] To conclude that making an order is “just and equitable”only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
[2] (2012) 247 CLR 108.
[3] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143.
[4] Footnote omitted.
There has followed some judicial consideration in respect of the warning against conflating of s 79(4) considerations in the s 79(2) question.[5] In Fielding & Nichol[6] at [33] Thackray CJ sitting at first instance opined that a trial judge in addressing the s 79(2) question may consider matters arising under s 79(4) but where such considerations are not of themselves determinative as to the “just and equitable” test at s 79(2).
[5] Bevan & Bevan (2013) FLC 93 – 545.
[6] [2014] FCWA 77.
I am of the view, therefore, that the previous “stage” approach may still be applicable although with more flexibility and not so strictly as may have formerly been thought. Firstly, the Court is to identify the existing legal and equitable interests in the property of the parties or either of them and then to attribute value to the elements of the property pool and hence the pool itself. It is usually considered appropriate that the date of the trial is to be the date for this exercise. “Property” includes both assets and liabilities of the parties and superannuation is “to be treated as property” although usually not capable of being immediately crystallised as an asset.
Then the Court is to make a consideration and determination pursuant to the question at s 79(2) being whether it is just and equitable to make any orders altering the property of the parties. Again, broad consideration of contributions may be relevant here but are neither determinative nor obligatory.
The Court is to identify and assess the contributions of the parties or on behalf of each towards the acquisition, maintenance and improvement of the elements of the property pool. Contributions may be of a direct or indirect financial type or non – financial contributions including as homemaker and parent.
The Court is to identify and assess any relevant considerations under s 79(4)(d) – (g) including any of the factors set out in s 75(2) of the Act and consider whether any further adjustment to either party is just and equitable.
The Court can “stand back” and consider the justice and equity of its proposed orders but where such justice and equity permeates the entire process.
THE EVIDENCE
The task for the Court to is to make findings of disputed fact involving issues of credit between the parties. To this end, s 140 of the Evidence Act 1995 (Cth) provides the standard of proof in civil proceedings as follows:
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.
Section 140 of the Evidence Act reflects the previous common law position being as to whether the Court is satisfied that an asserted fact is “more probable than not”. Dixon J in the well-known decision in Briginshaw v Briginshaw[7] stated:
…when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of mere mechanical comparison of probabilities independently of any belief in its reality. … it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.
[7] (1938) 60 CLR 336 at 361 – 362.
The onus of proof of a fact sits with the party making the assertion of fact. That is, there is no onus on a party to prove a negative or to disapprove an assertion or allegation against him/her.
In the matter now before me there are a multitude of disputed facts and issues of credit between the parties. As is common in this jurisdiction, each party seems keen to criticise the other but often without sufficient supporting or corroborative evidence with references being made to potential witnesses but where they have not been called or provided affidavits. As a result, of course, the prosecution of the case for each of the parties by their barristers is made more difficult and I should comment that each counsel in this matter provided admirable representation and advocacy for their respective clients. Without such corroborative evidence the issues of credit between the parties themselves assumes a greater importance in the fact - finding process but often being “word on word”. I do, however, have the distinct advantage of being able to see and hear each of the parties give their evidence together with any witnesses required for cross-examination. In Galea & Galea[8] Kirby ACJ considered the advantages available to a trial judge including the following:
(a)The hearing of the evidence in its entirety.
(b)Hearing and seeing all evidence in context, chronologically and logically advanced.
(c)Having time during adjournments and during the running of the case to reflect upon the evidence and to weigh such evidence against all other evidence whilst fresh to the mind.
(d)Hearing and seeing interruptions, hesitations and delays in the giving of testimony.
(e)Observing body language sometimes important for interpreting communication.
[8] (1990) 19 NSWLR 263.
It is a crucial function of the judicial process to assess the veracity of the evidence, assertions and allegations of parties and their witnesses and in this sense in these courts the judge assumes the role of juror as determiner of fact. Judges are, however, always cognisant of the pitfalls of giving too much credence solely to demeanour when considering the evidence of a witness. The Court should take into account that parties and witnesses are likely to be nervous and in an unfamiliar environment when giving evidence specifically, as is the case in the matter now before me, a party’s evidence and recollection may be hindered by extraneous matters such as mental health or emotional conditions.
SECTION 79(2) – JUST AND EQUITABLE
In this matter the parties endured a lengthy relationship from 1983 albeit with at least one lengthy period of separation. They have been finally separated since at least 2015 and, on the husband's unchallenged divorce application, for considerably longer. There were assets, including real property, purchased by the parties together during the relationship and separately. There are three children of the marriage all now adult. Each of the parties claims contributions to the assets. The content of the property pool as it now sits rests mainly in the hands of the husband including significant parcels of real property. The parties are divorced and the husband has remarried. In all of these circumstances I am easily satisfied that it is just and equitable to enter into the consideration of altering the parties’ interests in the contents of the property pool.
THE DATE OF SEPARATION
The date of separation seems not agreed between the parties despite the husband's divorce application not being challenged. The parties were divorced in June 2015 with the order becoming final in July 2015. A separation period of one year is generally a requirement of irretrievable breakdown.
The husband's evidence is vague, uncertain and ambiguous as to the date of separation. As best as I can fathom, he claims that the parties separated under the one roof in 2008. In his evidence in court he disclosed that he left the joint matrimonial residence in 2012. He agrees that the parties “separated” in no longer having any intertwined financial interests as of January 2015. His divorce application is however, perhaps his best indication of his state of mind but the tenor of his evidence in court was towards he believing that the parties were separated from 2008.
In considering the evidence as a whole, I am able to find on the balance of probabilities that the parties separated, albeit under the one roof, as long ago as 2008. Whilst some existing assets continued to be jointly owned and managed, there is evidence of the husband making significant unilateral financial decisions and transactions after that date. Consequently, and unlike the divorce application, a date certain for separation is not necessarily important where I might consider the nature and quality of contributions of the parties up until the date of the trial.
The husband
The husband gave his evidence in a straightforward manner. He was generally brief, to the point, and consistent in his response and neither elaborated nor retreated in cross-examination. He was at times prepared to make admissions against interest such as his late admission as to the sale of water rights from “Property R” for $240,000. His historical recollection, however, was not always sound or complete. His tendency was to be critical of the wife personally and as to her claimed contributions. His denials of family violence were bald and without any attempts to elaborate. He gave his evidence in a confident and concise manner consistent with my observations of his personality, at times coming across as entitled in broad statements but reluctant to enter into detail.
The wife
The wife was neither as forceful nor as confident in her evidence as was the husband and consistent with the diagnosis attributed to her by the psychologists, Ms U and Ms V. The wife presented as having a timid personality but where my observations were of a witness of the truth albeit with difficulties in historical recollection, again in accordance with her diagnosis of dissociative disorder. Notably, however, her affidavit does contain some precise detail and she withstood cross-examination in these respects including as to issues of asserted family violence.
Ms B
The husband’s current wife, Ms B, provided an affidavit sworn 24 September 2021 and was cross-examined. She was a forthright and assertive witness, who provided some corroboration for assertions made by the husband in particular as to their own financial transactions, but one understandably partisan to the husband. Ms B gave evidence as to various loans and advancements made to the husband made entirely post the separation of the parties, but was surprisingly silent as to revelations in cross-examination that similarly advancements or contributions had been made by the husband to her and her children. In this sense I find her evidence to be selective and of little assistance.
Ms U
Ms U is a psychologist who has provided a mental health report for the wife under affidavit of 13 October 2021. She was not required for cross-examination. She observes or diagnoses in the wife issues of disassociation, stress management, anxiety, together with Post Traumatic Stress Disorder symptoms.
Ms V
Ms V is a psychologist engaged by the husband to assess the wife’s mental health following receipt of Ms U’s report on the wife. Her affidavit containing a report and assessment is dated 13 April 2022. She was briefly cross-examined. Ms V concedes that her assessment may have been compromised by the wife agreeing only to participate by telephone. Further, the wife refused to undertake a PAI assessment which Ms V describes as a ‘essential requirement’ of the assessment process. As such, it appears that Ms V’s assessment is reliant on the self-reporting of the wife and Ms U’s report. Ms V does assist, however, with professional explanation as to dissociative disorders and the probity of her report is best summed up at [88] – [89] as follows:
[88]From a review of the preceding transcripts, [the wife] makes assertions which are vehemently denied by [the husband]. If in the event [the wife] suffers from a Dissociative Disorder, then [the wife] may have confabulated these false memories in the absence of an intention of deception. [The wife] further may have no recognition that the information she is relaying to others is at all fabricated. An example of this may be where [the wife] claims she was sexually assaulted by [the husband] on numerous occasions. Another example of this may be where [the wife] claims [the husband] has been intoxicated and aggressive towards her on numerous occasions.
[89]In general, I would support PTSD, anxiety and depression diagnosis (as outlined in the material provided) and noting the limitations already outlined I would conclude that [the wife] is also suffering from a Dissociative Disorder.
Ms V had the advantage of copious material from the background of this matter including a referral for the wife due to anxiety and depression and historical medical material noting the same together with a diagnoses of anxiety and where Ms V states as [92] – [93]:
[92][The wife’s] relationship with her estranged husband appears to have been complex and stressful for the length of the entire relationship. The current Court matter is also understandably stressful, in addition to her father’s recent death, homelessness, conflict with her mother, and further Court battles.
[93]Having regard to the nature and difficult association with conducting the current assessment process I am satisfied that [the wife] diagnoses is (sic) not inconsistent with that of [Ms U], her treating psychologist.
Although the probity of Ms V’s evidence is limited by the constraints of the assessment, her report assists me with issues of credit between the parties where the wife’s memory is not always good but also by the comments made by Ms V in respect of the parties’ relationship [92].
THE PROPERTY POOL ISSUES
The husband argues for the inclusion of his debt to the C Bank in a quantum of $248,772 as a debt of the marriage. The wife maintains the contrary.
The husband is the sole director of a company H Pty Ltd. In mid-2007 H Pty Ltd obtained an initial loan of $100,000 from C Bank. The loan was secured and guaranteed then by the husband's parents. The loan was variously extended up to a limit of $280,000 and now remains outstanding in a sum of $248,772. Significantly, the husband's current wife, Ms B, is now a guarantor. The husband says that the initial loan was taken to establish a farming/livestock business. He deposes the loan later to be used more as a general overdraft facility for all living and business expenses.
I am comfortably satisfied on the evidence that the parties’ emotional relationship ended in 2008 in accordance with the husband's evidence. They continued to hold and operate assets together such as F Company. I am satisfied, however, that new transactions were entered into unilaterally by the husband after that date including the extended borrowings. The question for the Court, therefore, and as argued by counsel for the wife, is why the current debt remains unsatisfied?
H Pty Ltd operated a farming/livestock business on “Property R” which was purchased in mid-2003 for $350,000 and sold by the husband in 2012 for $380,000. I am satisfied that there was little if any remaining equity following the sale and satisfaction of the mortgage.
I am generally satisfied that the husband conducted the farming enterprise at Property R from at least 2008 without consultation with the wife and including the refinancing.
There is evidence that the husband also sold, in addition to the property, the water rights to Property R in about September 2012 and, on his admission, for $240,000. The husband's evidence and admissions in respect of the sale of the water rights was vague, uncertain and received only late in the trial process. Under cross-examination, the husband asserted that the proceeds of sale of the water rights were “put to mortgage liabilities”. Like counsel for the wife, I have difficulty accepting the husband's assertion on the evidence before me where the earliest financial statements provided by the husband, and now in evidence being for the financial year ending 30 June 2011, show that H Pty Ltd’s financial position then as the C Bank debt sitting at $157,570 but with assets exceeding liabilities by $37,069.
Similarly, the financial statements for the years ended 2012, 2013 and 2014 each show a value of assets exceeding liabilities including the C Bank loan.
The husband did not provide financial statements for H Pty Ltd for the financial years 2015, 2016, 2017 and 2018.
H Pty Ltd’s financial statements for year ending 2019 show the C Bank debt having increased to $247,557 but with no value for livestock and total liabilities now exceeding assets by $204,826.
On the basis, therefore, of my finding that the husband effectively acted unilaterally in a financial sense following separation in 2008, the C Bank loan has increased from $157,570 as of June 2011 to a current $248,772. The rationale for the loan increase is vague, uncertain and uncorroborated. The husband claims that the loan facility was taken out for farming/livestock purposes. The financial statements show that H Pty Ltd owned no livestock as at June 2019. I have no evidence as to the disposal of that livestock or as to the proceeds of sale.
It was only during the husband’s cross-examination that a document was provided showing the sale of the water rights for $240,000 on 28 August 2008. I do not accept the husband's broad assertion that the proceeds of $240,000 were put to extant mortgages. The husband's certified loan application on behalf of H Pty Ltd in May 2007 discloses the husband owning three properties as at that date being “[Property R, 2 D Street (F Company), and 1 D Street (HH Company)]”. The husband disclosed liabilities as follows:
(i)business loan (interest only) $480,000;
(ii)business loan $110,000;
(iii)home mortgage $325,000; and
(iv)overdraft debt $22,000.
The husband says that Property R was sold in late 2012 and I accept that mortgage was discharged (being the above-mentioned “home mortgage – $325,000”).
At that time (2007) the remaining liabilities totalled $612,000. Those liabilities now total $691,100. Without further explanation, it cannot be that the sale proceeds of $240,000 reduced the existing mortgage liabilities upon the sale of the water rights. If I am wrong in these simple mathematics then the husband has given no explanation for the increase of the overdraft and liabilities back to the current quantum and obviously occurring post his claimed separation date of 2008.
In all of those circumstances, it is not just and equitable to include the loan liability of $248,772 or in any quantum in the matrimonial pool of assets. Frankly, the husband's own evidence suggests firstly that he acted unilaterally in respect of these matters following 2008. Secondly, the liabilities claimed by the husband in 2007 (accepting the discharge of the “Property R” mortgage) remain effectively intact as to quantum. Thirdly, there is no particularised evidence of the wife or the family receiving any substantial benefit from the loan facility and/or, alternatively, the husband therefore gives no satisfactory explanation as to the dissipation of the $240,000 from the sale of the water rights.
Secondly, the wife claims a liability of the marriage by way of personal loan from a Mr T in a quantum of $12,000. The husband disputes the existence of such a loan or, alternatively, if there be a loan then it is not properly a debt of the marriage such obtained unilaterally by the wife post separation.
The wife's trial affidavit references Mr T but strangely not the asserted loan. Mr T did not give evidence. A call was made of the wife during cross-examination to produce bank statements to evidence the loan. The call was not met. Consequently, where the husband challenges the fact of the loan and where the wife leads no evidence particularising details of the loan, no explanation, and no corroborative evidence, I cannot include the loan as a debt of the marriage.
The property pool is otherwise agreed between the parties as is its value. Superannuation interests of the husband are relatively minimal and the submissions of counsel for each of the parties suggests, quite properly, that the Court adopt a one–pool approach as the appropriate course. The property pool constitutes the following:
Description 2 D Street, City E including F Company (husband) – agreed value $750,000 1 D Street, City E (husband) - agreed value $720,000 G Pty Ltd (husband) - agreed value $0 H Pty Ltd (husband) - agreed value $0 Plant and equipment (husband) - agreed value $28,600 Household contents (husband) - agreed value $10,000 Motor Vehicle 1 (wife) - agreed value $19,000 W Bank Account (wife) - agreed value $172,927 G Pty Ltd Bank Account NAB (husband) - agreed value $16 F Company Bank Account #...48 (husband) - agreed value $7,848 NAB account # …14 (husband) - agreed value $5,275 Westpac Accounts (wife) - agreed value $1,046 NAB Accounts (wife) - agreed value $651 Total $1,715,363
ADD-BACKS Interim Distribution from trust funds (husband) - agreed value $50,000 Interim Distribution from trust funds (wife) - agreed value $64,264 Total $114,264
SUPERANNUATION Super Fund 1 – Accumulation (husband) – agreed value $41,518 Super Fund 1 (wife) –agreed value $0 Total $41,518
LIABILITIES NAB mortgage (husband) - agreed value $445,255 NAB mortgage (husband) - agreed value $245,845 Aust Government HECS Debt (wife) - agreed value $5,475 Mr J and Ms J (wife) - agreed value $10,968 Total $707,543
Subtotal of property including superannuation $1,871,145 Less Liabilities ($707,543) Net total property pool $1,163,602 CONTRIBUTIONS
It is the husband's position that neither party had any significant assets as at the date of commencement of cohabitation in 1983. There is agreement that consent orders were made during the first period separation from about 1992 to 1996 dividing their then assets on an equal or near equal basis. Reconciliation and cohabitation continued at least until 2008 and the parties remained financially intertwined to a degree until January 2015. Three children were born to the parties after the previous property settlement.
The wife in her trial affidavit at [7] deposes:
When [the husband] and I first lived together we lived in a caravan at [EE Town]. I was working full – time [in hospitality] at the [CC Venue] and [the husband] was working part – time as a labourer […] for his father. I was then earning $440 per week and [the husband] was earning about $180 per week net. I had some savings in my account that I had started whilst at school, and I purchased a car for $500. He had a car that his father given to him, but no other assets or savings.
The wife does not further particularise the quantum of her savings as at the commencement of cohabitation, but notably a consent property settlement has since intervened.
The parties agree that in about 2014 the wife had accrued savings of $330,000 which she then gave to the husband to invest. Those monies now sit in the agreed pool of assets at $172,927 after interim distributions to both of the parties and payment of some outgoings. The wife argues that she should receive consideration for her contribution which she asserts was accrued before and during the relationship (and perhaps post the separation of 2008). The wife references her savings at [190] and following of her trial affidavit. She says that she has saved since she was at school and all of her working life. She said she never smoked, gambled or “hardly ever purchased alcohol”. Generally the wife claims to have been frugal with her earnings and expenditure. She says that her father made gifts to her of $8,000 per year for most of her adult life until 2014. She particularised other sources of income including the breeding and sale of household pets. In particular, the wife particularises the purchase of a property at Suburb N, South Australia during the period of separation in the 1990s. The property was purchased with the assistance of a mortgage. It was sold in about 2000 – 2001. The wife says that she saved an amount of $50,000 from the proceeds of sale on term deposit but “did not pay off my loan balance.” It seems that the term deposit operated as a security for the outstanding and remaining loan. Where the property was sold some five or so years after reconciliation and payments towards the outstanding loan were made during this period then it is difficult, therefore, to establish what, if any, real equity the wife retained in the Suburb N home upon its sale and if the $50,000 blends into the wife’s “savings”.
The wife's evidence, in this respect as with many others, suffers through her difficulties with recollection as to detail. Whilst I generally accept that the wife was frugal and productive in her enterprises and contributions, it is equally clear, on her own concessions, that much of the savings accrued during the course of this lengthy relationship together with injections of funds from child endowment and similar government benefits. Relatively, the husband was by far the superior earner during the relationship which may have in turn allowed the wife to save from her own enterprises. This was a lengthy relationship. There were many and varied contributions by each of the parties. There were delegations of responsibilities. There were purchases and sales of real estate. An holistic approach to the consideration of contributions is therefore appropriate.
The wife's affidavit material and cross-examination of the husband by her counsel suggests a form of asset – by – asset consideration in respect of the contributions of the parties. Much was made of the husband working away for his employment. Again, however, I generally prefer the husband's recollections in respect of the nature of the relationship where he concedes that his employment took him away often during weekdays but he would generally return to the matrimonial home during weekends and sometimes for parts of weeks. I generally accept his evidence as to his contributions to the F Company business although the wife was in constant involvement. He contributed his greater income. The wife contributed by management of the business. The wife worked away too being somewhere in Western Australia and she was able to save but this occurred during the parties relationship.
In all of these circumstances I am unable to find any superior contribution by the wife by reason of her savings of $330,000 either initially or during the course of the relationship. It is conceded that she accrued this sum. Even she says this included some “child endowment” and similar. She may have had “savings” at the commencement of cohabitation in 1982/1985. This is not particularised with evidence only of a $500 car purchase but where the sources of these savings seem many and varied and accrued at least in part during the relationship where the husband was by far the superior earner.
The wife makes some assertions as to the husband “wasting” money on gambling and alcohol. He denies the assertion. The wife's evidence is unparticularised and generally uncorroborated. Where the wife carries the onus of proof of the assertion I cannot make findings accordingly.
The evidence is clear this was a lengthy marriage. It was a little unusual in that the husband's employment took him away for days on end. He was, however, the superior earner during the relationship. The wife contributed disproportionately as a home maker and parent. She also contributed to F Company and other businesses but I accept the husband's evidence as to his own contributions to these enterprises. She managed to accrue savings consistent with her prudent financial tendencies. She was able to do so, however because of the husband’s income.
The parties purchased and sold various parcels of real estate during the relationship or at least until 2007.
I find that the parties' contributions were equal during this lengthy relationship when considered and taken as an holistic or global approach. Those contributions were many and varied and represented the delegation of responsibilities between the parties during the relationship. Their wealth is manifest from their various efforts and contributions.
The husband argues for an adjustment to him on the consideration of post - separation contributions. He says that he has “managed and maintained” the matrimonial assets since 2015 being a period of some seven years. He alludes to contributions by his current wife, Ms B, towards Ms Z's school fees and to payment of F Company expenses. I do not accept this argument. Firstly, the husband has had the use and income from the joint business enterprise since January 2015. The evidence is suggestive of him taking possession of the business to the exclusion of the wife by attrition and stealth. The financial benefits to he and Ms B are both direct and indirect. Ms B has been paid a wage from the business. Further, if as suggested by his counsel, the husband received “loans” from Ms B then he did so after the parties' separation and the wife should do not bear responsibility for these loans. If they are “loans” then they are not strictly contributions. In any event, I am not satisfied that it was necessary for the husband to obtain “loans” from his current wife in circumstances where his income has been in the region of $170,000 per year from his employment plus the income from F Company. Similarly, cross-examination exposed that the husband has also made “contributions” to the school fees and expenses for Ms B's children. In other respects claims that Ms B has paid off the husband's credit cards or “business expenses” are not particularised and again do not sit comfortably with the husband retaining the business as well as his substantial income. I am not satisfied that it would be just and equitable for the husband to receive any loading or adjustment on account of post - separation contributions.
KENNON ARGUMENT
The wife claims superior contributions by reason of what is known as a “Kennon claim” where against a general theme of the Act being a no – fault piece of legislation, the Full Court in Kennon v Kennon[9] held that conduct could be relevant, particularly family violence, where it affected a party’s contributions in making the same more onerous or arduous. Family violence, which itself takes many recognised forms, is not an exclusive definition of this category of “relevant conduct” potentially impacting on the determination generally of contributions of the parties.
[9] (1997) FLC 92-757.
Accordingly Kennon seems to limit such relevance, however, to where a party could demonstrate a nexus of significant adverse impact between the conduct asserted and the contribution, and in this sense it is arguable that the Court perhaps recognised its judgment as only applicable in exceptional cases. Nevertheless, that narrow view has been broadened by subsequent Full Court authority such that an inference might be drawn as to conduct impacting adversely on contributions thereby diminishing to a degree the onus previously placed on a party where later Full Courts have recognised relevantly the nature of family violence itself as, for example, not always being easily corroborated or not necessarily reasonably capable of contemporaneous public complaint.[10] In this matter the wife makes assertions of fact and therefore carries an onus of proof according to the requisite standard. I do, however, in my consideration take into account the nature of family violence generally as often being “behind closed doors” with consequent difficulties in corroboration.
[10] Keating & Keating (2019) FLC 93-894.
The husband here denies the allegations generally in each of the particulars alleged against him. He does not carry an onus to prove his innocence as to encumber him accordingly would be to ask him to prove a negative which may well be a logical impossibility.
Although not a requirement, it is a fact that the wife does not adduce any formal corroboration save and except her recent reporting to her own psychologist, Ms U, and to the psychologist engaged by the husband, Ms V. Such evidence is arguably, self-serving and with limited probative value, but where the psychologists seem not to dispute the depression, anxiety, disassociation and perhaps post-traumatic stress disorder suffered by the wife. Ms V reports, at least, and perhaps accepts these conditions having a nexus to the relationship between the parties.
The wife references “family violence” in her trial affidavit at [174] – [187]. There is some particularisation including as to historical dates and injuries suffered as well as accusations of a more generalised type. Many of the allegations are aged such as from 1987 or 1994. I again note generally my own observations as to the wife's difficulties in her evidence with recollection of any specificity. I note the comments of the psychologists Ms U and Ms V that the wife has suffered from a disassociated mental health condition where Ms V[11] assists as follows:
[46]Dissociative disorders are characterised by a disruption of and/or discontinuity in the normal integration of consciousness, memory, identity, emotion, perception, body representation, motor control, and behaviour. …
[11] Affidavit filed 13 April 2022.
The condition can cause an inability to recall important autobiographical information of a traumatic and stressful nature with localised amnesia and a failure to recall events during a circumscribed period of time stop. The period might not be one single traumatic event but my span over many months or years.
Similarly, where the wife apparently argues some “negative contribution” by the husband the wife's evidence is generalised, vague and uncertain in respect of her allegations that the husband spent money on alcohol and gambling. Again, there is no corroboration where bank statements or witnesses may have been available in respect of this allegation.
There does exist, however, some corroboration of the wife's assertions where, for example, I am comfortably satisfied that the husband assumed possession of F Company from January 2015 by stealth or attrition where the wife had previously enjoyed management of the business. I accept the wife’s evidence that the husband unilaterally assumed financial control. This shows, in my view, a tendency towards a power imbalance in the relationship and hence provides some corroboration of the wife's assertions if only in a general sense. The wife’s contributions and attempted contributions to her historical management of F Company over the next months of 2015 were impacted accordingly.
The husband in his affidavit denies the allegations with bland denials and withstood cross-examination in respect of these matters, but did not deny the wife’s evidence as to her injuries suffered and some particularised evidence resulting in Apprehended Violence Orders in favour of the wife.[12] Where there is dispute, I accept the wife’s evidence given its relatively high degree of particularity as to injury, time and cause.
[12] See the wife’s trial affidavit of 12 October 2021 at [179], [180], [183] – [184] and [185].
Consequently, the Court is left in a situation of “word on word”, but accepting the difficulties of corroboration and/or contemporaneous complaint, I accept the wife’s evidence of particularised incidents of violence on the balance of probabilities. In particular I am assisted by my findings of power imbalance evidenced by the husband assuming control of the business. I also accept the wife’s evidence of the husband gaining control of the $330,000 she asked him to invest for her in 2014 by becoming a signatory to her trust account. I consider these factors as corroboration of a tendency towards financial control/abuse. I had the advantage of seeing and hearing the parties give their evidence in respect of these issues. I am satisfied, therefore, that the wife was the victim of family violence during the relationship perpetrated by the husband. The wife was delegated certain business and parenting obligations. There is an inference and nexus easily available to me to conclude that the wife’s responsibilities and hence her contributions were made more arduous by reason of such violence which took the forms of physical as well as coercive and financial types. The relationship was a long one. There were three children. The wife’s responsibilities were broad across parenting and asset management. The violence was over time and not an aberration or circumstantially/situationally limited. The impact on the wife’s contributions was therefore present over that lengthy period (and continuing). I am of the view, therefore, that an adjustment to the wife on account of contributions is just and equitable and that a five per cent adjustment would be appropriate and reflect the reality of the contributions and the extent and nature of the property pool.
In conclusion, and considering the duration of this relationship together with the many and varied contributions of the parties, both financial and non – financial, and including the circumstances since separation where the husband has effectively retained all of the tangible assets of parties, but where I find it just and equitable to make an adjustment to the wife on account of Kennon contributions, I find that the property should be adjusted as to 55 per cent to the wife and 45 per cent to the husband.
Section 79(4)(d) – (g) and Section 75(2) factors
The husband in his case summary argues that there should be no adjustment to either party by reason of the s 75(2) factors. It is difficult to understand the husband's rationale.
The wife asks for an adjustment in her favour of 10 per cent of the net property pool in circumstances where I have excluded the husband's liability to C Bank from that pool.
The husband is 60 years of age. The wife is 51 years. The husband has re-partnered with Ms B who does or has received recent income from F Company. The husband remains in employment with an income of E$170,000 per annum from his employment but where I am comfortably satisfied that he also benefits directly and indirectly financially from F Company which he will retain by my Orders. The husband (and Ms B) have retained the assets of this relationship to the exclusion of the wife and where I have previously found on the balance of probabilities that the wife was excluded from F Company unilaterally by the husband.
There is no indication that the husband is other than in good health.
The wife lives in transitional public housing. She has no significant assets or savings in her possession. She receives income from jobseeker/Centrelink including a rental allowance. She works on occasions as a contractor where the evidence suggests that at most she might gross E$29,000 per annum but subject to tax and other costs. There is no evidence for any significant optimism in her current circumstances improving in the near future. She has drawn down her superannuation and borrowed from a friend in order to purchase equipment to operate as a contractor. The wife is in poor health. She suffers some physical and emotional ailments as well as deteriorating eyesight with macular degeneration. She incurs ongoing medical expenses accordingly.
The wife’s psychologist, Ms U[13], deposes that the wife suffers diagnoses of post-traumatic stress disorder, anxiety and depression. There is evidence of a dissociative disorder and again apparent to the Court when giving her evidence.
[13] Affidavit filed 13 October 2021.
In all of those circumstances, I am satisfied that it is entirely appropriate that there be an adjustment to the wife on account of the relevant factors under s 75(2).
The net property pool has a value of $1,163,602. The Full Court in Clauson & Clauson[14] made it clear that the Court should bring a sense of reality to its consideration of adjustments under s 75(2) of the Act with reference to the quantity of the property pool. In circumstances where the wife seeks only a 10 per cent adjustment then I am prepared to make an order accordingly but where I consider such an adjustment to be far to the conservative end of my discretion.
[14] (1995) FLC 92-595.
I therefore determine to alter the net property pool of the parties as to 65 per cent to the wife and 35 per cent to the husband.
SPOUSAL MAINTENANCE
The wife seeks an order for $800 per week spousal maintenance to be paid by the husband to her from 4 January 2016 being the date of the husband's initiating application for orders under s 79 until 13 December 2026 being the date that the husband reaches 65 years. The wife asked that the payments of “arrears”, which over six and a half years I calculate to be approximately $270,000, to be paid within 28 days. Alternatively, where the wife’s ambition is clearly to retain the property at 1 D Street, she proposes a transfer to her by the husband of the property unencumbered by applying s 77A of the Act.
However, and before the wife's entitlement to spousal maintenance is to be considered together with the appropriateness of a lump sum s 77A order, the husband opposes the wife being granted leave to bring such an application. Although there was no specific argument made before me, it is proper to consider whether or not the wife requires leave pursuant to s 44(3) of the Act where the parties were divorced on 13 July 2015. The husband commenced these proceedings seeking orders only as to property settlement pursuant to s 79 of the Act in an Application filed 4 January 2016 and therefore within time. The wife filed a Response 1 April 2016. She did not then raise an issue of spousal maintenance. The matter proceeded through a conciliation conference and various procedural/interim/interlocutory applications. The wife was variously represented by solicitors. On 28 February 2020 Henderson J listed the husband's application for an undefended final hearing on 19 May 2020 such ultimately vacated on the wife's application. She had not by then raised an issue of spousal maintenance.
The wife filed a further Response on 29 September 2020. She did not there raise the issue of spousal maintenance.
The wife filed yet a further Amended Response on 16 October 2020 being the first time that she asks for spousal maintenance. In that document she pursues spousal maintenance in the sum of $800 per week. She does not ask for the payments to be crystallised into a lump sum or for arrears. There is no evidence before the Court or on the Court file of any affidavit accompanying the wife's Amended Response. The wife has filed a sworn financial statement. Her trial affidavit does not specifically reference spousal maintenance but does generally set out her circumstances. My reading of the court file shows no application amended prior to the trial asking for arrears of maintenance or s 77A consideration.
Section 44(3) of the Act provides:
Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c)in a case referred to in paragraph (a)—the date on which the divorce order took effect; or
(d) …
The court may grant such leave at any time, even if the proceedings have already been instituted.
Section 44(4) of the Act provides:
The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a)that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b)in the case of proceedings in relation to the maintenance of a party to a marriage—that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The divorce being made final on 13 July 2015, it follows that the parties had until the 13 July 2016 to raise issues before these Courts of property and/or spousal maintenance. The husband's application was clearly within those limits. The wife's cross–application for spousal maintenance was therefore over four years out of time.
The wife is not relieved of her obligations under the time limitations by reason of being a respondent to the husband's initiating application and where the time limit cannot be avoided by a subsequent amended response to include the claim for maintenance since maintenance and property fall under different paragraphs of “matrimonial cause” and she therefore seeks a different relief to that sought by the husband.[15] The wife, therefore, requires leave of the Court before she can prosecute her application for spousal maintenance.
[15] In the marriage of Woolley v Woolley (No.2) (1981) FLC 91-011; In the marriage of Good v Good (1982) FLC 91-249.
As the husband's counsel submits in his final submissions, the wife has not actually sought leave to bring such an application and where I now determine that leave is required. Further, she provides no specific affidavit in respect of spousal maintenance and no evidence, other than generalities, as to her financial position at of 13 July 2016 which delineates the limitation period.
An application for leave (which has technically not been made) under s 44(4) requires a two – step process with the onus being on the applicant. Firstly, the applicant must establish that hardship would be caused to himself/herself or a child of the relationship if leave were not granted. If such hardship is not established then this is the end of the matter and the application will be dismissed. If, however, the Court is satisfied as to hardship then a discretion is enlivened to consider whether relief should be granted. The Court may have regard to factors such as the applicant's explanation for delay and the relative prejudice to the parties of granting or not granting leave.
It is well-established that the Court need not enter into a minute investigation of the applicant’s substantive case in determining the question of hardship which in this case may be inferred from the wife’s current circumstances although there is a requirement for the wife pursuant to s 44(4)(b) to give evidence of her circumstances “at the end of the period within which the proceedings could have been instituted without the leave of the court…”.
The wife's trial affidavit at [103] and following references the period “post separation” and her circumstances. I am satisfied that she was removed from management of the business. She retained the Motor Vehicle 2. She had by this stage enlisted the trust of the husband himself to invest the $330,000 savings which may not have been available to her by reason of the husband making himself a signatory to the account. She was excluded from the business accounts. She claims to have been “destitute” [124]. She explains the use of $25,000 withdrawn by her from a Visa card account where the tangible assets of the relationship were in the name and possession of the husband. Her income since has been limited and her accommodation has been transient. Consequently, and by the inference available to me, I can infer that the wife would suffer hardship if not being able to prosecute her application and where prima facie a claim for spousal maintenance might in this sense be seen in a different light than an application for property orders under s 79 in that inferences of hardship may be more readily available.
Nevertheless, and now moving to the exercise of my discretion, the wife's application suffers evidentiary difficulties in that she is does not give any explanation for the delay in bringing an application for spousal maintenance. Again, she was on notice as to time limits by reason of the divorce application and perhaps the husband's own application filed as long ago as January 2016. This is not then a situation where both parties simply sat dormant in respect of the recourses available under the Act. The wife was represented at various times during these proceedings. Her affidavit is completely silent as to the rationale for the delay. Inferences are not readily available to me in this respect. The wife's counsel in his comprehensive and otherwise helpful written and oral final submissions gives no assistance in respect of the question of leave and specifically as to delay in bringing the application.
Similarly, questions of relative prejudice are not addressed in the wife's evidence or in the submissions of counsel. The husband has a right to be informed of and address an application against him. It is difficult for him to give and adduce evidence in response to an application which is presented in such vague and uncertain terms. Specifically where the husband commences proceedings in January 2016 he is prima facie entitled to the benefit of the time limits which apply. The wife filed a number of Responses without referencing spousal maintenance. The one Response that does seek spousal maintenance does not ask for leave pursuant to the Act. The orders sought at trial differ significantly than those sought in that Response. As such, the husband might understandably be entitled to assume that he can get on with his own life financially after the expiration of the limitation period without anticipation of a spousal maintenance application or one that seems only to be particularised shortly before the trial in seeking arrears and/or s 77A considerations. The time period is relatively long being in excess of four years compounded by proceedings of a different kind being on foot.
In all of these circumstances, I am not persuaded that I should exercise my discretion in favour of granting leave to the wife. That is, in summary she provides no reasonable explanation for the delay in bringing her application and where there is manifest prejudice to the husband.
Leave to bring the application for spousal maintenance is refused and the application is dismissed.
CONCLUSION
In respect of the s 79 alteration of property considerations I therefore intend to divide the value of the property pool as to 65 per cent to the wife and 35 per cent to the husband. The property pool has a net value of $1,163,602. I calculate, therefore, that the wife would receive value of $756,341. It is agreed that the wife will receive the balance of the “Orman” account at $172,927. From the balance sheet it is clear that the wife retains only the following:
Motor Vehicle 1 $19,000 Orman account $172,927 Westpac account $1,046 NAB account $651 Interim distribution from trust fund $64,264 HECS Debt ($5,475) Mr J and Ms J - Debt ($10,968) Total Net property $241,445
The wife is entitled to a further adjustment of $514,896
The wife's ambition is to retain the property at 1 D Street (“HH Company”). This property has an agreed value of $720,000. It is subject to a mortgage. In his trial affidavit at [25] the husband deposes:
On 10 May 2007, “[HH Company]” at [1 D Street, City E] was purchased for $425,000. A mortgage was taken out with NAB to finance the purchase. I have only paid interest on the mortgage since its purchase in 2007. To the best of my knowledge, [the wife] did not contribute to the purchase.
From the joint balance sheet, therefore, I infer that “HH Company” at 1 D Street is currently subject to a mortgage of $445,255. It may be that there are cross mortgages secured by both properties. The evidence is unclear in this respect.
Inherent in the wife's argument to retain “HH Company” is her application that she be awarded spousal maintenance including “arrears”. As these Reasons disclose she has been unsuccessful in that application. Consequently, if the wife was to retain HH Company at $720,000 then she would also retain the mortgage liability ($445,255) giving her equity in the property at $274,745. She would therefore be retaining net $516,190 from the asset pool assuming she was to retain the total of the $172,927 held in trust. I calculate then a cash adjustment from the husband to the wife of $240,151. She may then, of course, be able to immediately reduce the mortgage liability by way of the amount held in trust coming to her in the sum of $172,927 plus cash adjustment of $240,151 leaving, on my calculations, a relatively small mortgage liability. I have no specific evidence of the wife’s borrowing capacity if any and/or whether she would still want to retain 1 D Street given that I have dismissed her spousal maintenance application. I proceed therefore on the basis that she does which to retain it.
The husband argues against the wife retaining 1 D Street. He apparently does so on the basis of convenience and perhaps privacy where it is anticipated that he will retain the business at 2 D Street. This is not a persuasive argument against the wife being able to retain an asset of real property and one which might provide her with some small income from resurrecting the business previously operated primarily by her from that property. The husband’s proposed orders would leave him retaining 1 D Street. The evidence however, does not assist in it being productively utilised by him currently. I can find no evidence of any income to the husband from that property. Consequently, where both parties may wish to retain that property but where the husband will in any event be retaining one piece of income producing real property namely F Company, I am of the view that the wife should have first option on 1 D Street.
I will give the wife 60 days in which to make an election and all necessary enquiries if she wishes to achieve that ambition. The property will otherwise remain in the hands of the husband as it is his wish.
Given the inherent uncertainties from various elections to be left in my orders, the parties will have liberty to apply in respect of the execution of the Orders towards the 65/35 per cent distribution of the net property pool.
I certify that the preceding one hundred and fifty-nine (159) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McGuire. Associate:
Dated: 11 August 2022
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