Ettridge and Somers (No. 2)

FAMILY COURT OF AUSTRALIA

ETTRIDGE & SOMERS (NO. 2)

[2018] FamCA 863

FAMILY LAW – PROPERTY SETTLEMENT – where the court was required to assess contributions – orders made

Family Law Act 1975 (Cth)

NHC & RCH [2004] FamCA 633
Ettridge & Somers [2017] FamCA 1173

APPLICANT:

Ms Ettridge

RESPONDENT:

Mr Somers

FILE NUMBER:

MLC

11262

2015

DATE DELIVERED:

29 October 2018

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

23 – 25 October 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Williams

SOLICITOR FOR THE APPLICANT:

Carew Counsel

THE RESPONDENT:

In Person

Orders

Forthwith, the respondent do all things necessary to put the real property at 25 B Street, Suburb C (“Suburb C”) on the market for sale by public auction with an agent to be nominated by the applicant.
The respondent is to instruct the agent that, albeit he is the legal owner of Suburb C, the agent is to take instructions from both the applicant and the respondent in relation to:
(a)       The date of the auction;
(b)       The reserve price;
(c)       The terms of any contract with a purchaser;
(d)       The advertising and sale preparation expenses; and
(e)       The agents’ commission.
If there is any disagreement between the applicant and the respondent about paragraph 2 (a) to (e) of these orders or either party asserts non-compliance with that paragraph, the aggrieved party may apply, by application and affidavit to the Honourable Justice Cronin for determination of such disputed issues including for orders (if necessary) for the exclusion from participation in the said sale of any party not complying with these orders, and the matter be listed as a matter of urgency by the Court.
That the applicant forthwith nominate, and the parties jointly appoint, a legal practitioner or conveyancing company, to undertake the relevant conveyancing in accordance with these orders.
If Suburb C does not sell at auction and the parties do not agree as to how it is to be sold thereafter, they shall have liberty to apply.
Upon the settlement of the sale of Suburb C, the proceeds of sale shall be applied by the conveyancing practitioners as follows:
(a)       First, to pay any expenses of the sale, agents’ commissions, conveyancing fees and any adjustments for outstanding rates and taxes arising therefrom;
(b)       Secondly, to discharge the following liabilities to F Bank:
(i)The home loan numbered …; and
(ii)The F Bank line of credit numbered …;
(c)       Thirdly, to hold the balance thereafter on trust for the parties according to paragraph 7 hereof.
From the net proceeds of the sale of Suburb C remaining after paragraph 6 is satisfied, the balance be divided between the applicant and the respondent as follows:
(a) To the applicant, 58 per cent of the gross sale price after deducting the items in paragraph 6 (a) and (b)(ii) but with a further $440 being added for the respondent’s share of the Mr H valuation; and
(b) To the respondent, 42 per cent of the gross sale price after deducting the items in paragraph 6 (a) and (b)(ii) and from that share shall be further deducted:
(i)The amount referred to in paragraph 6 (b)(i); and
(ii)$440 being his share of the Mr H valuation.
Should any party desire to seek an order for costs arising from these orders, they may do so by written submission filed and served by 4 pm on 9 November 2018 and any reply thereto shall be filed and served by no later than 4 pm on 16 November 2018 and such matters be determined on those submissions in chambers.
Any order for costs arising out of the determination referred to in paragraph 8 shall be also adjusted within the terms of paragraphs 7 (a) and (b) hereof and a copy of any costs order shall be sufficient warrant for the conveyancer to make the necessary adjustments.
Pending the completion of the sale of Suburb C, the respondent shall be responsible for maintaining the property in good order and condition.
For the avoidance of doubt, paragraphs 1 to 3 of the orders of the Honourable Justice Johns made on 7 September 2018 continue until the completion of the settlement of the sale referred to in these orders.
Pursuant to s 90SL(1) of the Family Law Act 1975 (Cth) (“the Act”) THE COURT DECLARES that MS ETTRIDGE and MR SOMERS are the trustees of the G self-managed superannuation fund with all of the rights and responsibilities as trustees to determine matters as required by the deed of trust.
That notwithstanding paragraph 12 of these orders and notwithstanding anything to the contrary in the deed of trust, MS ETTRIDGE is authorised but in her capacity as trustee to the exclusion of any other trustee, to:
(a)       Instruct an accountant to prepare financial statements and appropriate taxation returns for the said superannuation fund such that the fund becomes compliant;
(b)       Arrange for the audit of the said superannuation fund;
(c)       Authorise payment of the necessary expenses of the accountant and of any audit;
(d)       Authorise the payment of any taxation including penalties and capital gains tax on the disposal of any of the assets of the said fund;
(e)       Sell the fund’s gold bullion to Company L, Melbourne; and
(f)       Give effect to paragraph 14 of these orders.
Upon the completion of the compliance requirements in paragraph 12, the applicant and respondent in their capacities as trustees, do all things expeditiously to enable the applicant to roll out her member account to her fund of her choice.
If the respondent desires to roll his member account out of the said fund and to terminate the trust, both the applicant and the respondent do all things required to give effect to that course of action at their joint expense.
THE COURT DECLARES that pursuant to s 90SL(1) of the Act, and save for the implementation of the terms of these orders, each party is the owner of the property in their respective possessions to the exclusion of the other party as of this date.
That save as to issues of costs, and the continuation of all injunctive orders until the completion of the settlement of all orders hereunder, all extant applications are otherwise dismissed.
It is certified that it was appropriate for the applicant to be represented by counsel.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ettridge & Somers (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11262 of 2015

Ms Ettridge

Applicant

And

Mr Somers

Respondent

REASONS FOR JUDGMENT

On 15 September 2017, Thornton J declared pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) that a de facto relationship existed between Ms Ettridge (“the applicant”) and Mr Somers (“the respondent”) between January 2007 and 2 January 2015 (save for one month in 2008). That declaration gave rise to this Court having jurisdiction to determine a claim by the applicant against the respondent under Part VIIIAB of the Act.
Section 90RE of the Act reads:
(1)A section 90RD declaration has effect as a judgment of the court.
(2)For the purposes of this Act (other than Part VII), a section 90RD declaration has effect according to its terms.
Section 90RH of the Act provides that such a declaration applies unless the Court is satisfied that a fact or circumstance has arisen not previously disclosed to the Court involving a person affected as a party to the proceedings when the application for the declaration was made, and those facts or circumstances were not within the affected persons knowledge at the time. Nothing in the evidence of the respondent, who made clear he did not agree with the views of Thornton J, would indicate there is a basis to apply s 90RH of the Act.
Further, no appeal was lodged against her Honour’s orders albeit that the respondent said in discussion with the Court he might do so now.
I am satisfied therefore that the Court has jurisdiction to determine the applicant’s property settlement application.
Section 90SM of the Act provides that the Court may make such order as it considers appropriate altering the interests of the parties in the property.
Section 90SM(3) of the Act says:
The court must 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.
Section 90SM(4) of the Act provides that in considering what order should be made, the Court must take into account, relevantly, the following:
…
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant
The reference to s 90SF(3) of the Act is a reference to the economic future of each party and it sets out a large number of factors that the Court is to take into account. I refer to those later in these reasons.
It is important to begin by saying that the applicant was represented by counsel and solicitor whilst the respondent represented himself, a position that was the same as in the hearing before Thornton J. It was necessary to explain to him the relevant practical process of the hearing but he confirmed that he had read (and did not require the Court to provide him with) a copy of ss 90SM and 90SF of the Act.
On 7 June 2018, Johns J ordered the various extant applications be listed before Baumann J on 23 October 2018.
The case was listed before Baumann J but his Honour was not blessed with sufficient time to hear it but I was. In an interlocutory application before Baumann J, the respondent applied for an adjournment and also that the applicant’s application be not permitted to proceed because she had not complied with the Orders of 7 June 2018 (“the Trial Directions Orders”). It appears the adjournment application was based on the respondent’s perception that he was suffering post-traumatic stress disorder and was unable to proceed. Baumann J rejected his application.
Whilst mentioning interlocutory matters, the Trial Directions Orders also required each party to file an amended document to set out what orders were to be sought with precision. In addition, each was to serve all affidavits of evidence in chief by set dates keeping in mind the evidence in chief of all witnesses was to be given by affidavit.
Each of the applicant and the respondent filed an affidavit in time but the respondent complained that the applicant did not file her subsequent material within the timeframe of the Trial Directions Orders. Even a cursory examination will show that the subsequent material of the applicant was by way of reply and the Trial Directions Orders provided for her to do so by 15 August 2018. Although the respondent complained about that, I consider no issue can be taken with that point. Affidavits of the applicant’s doctor, father and close friend were all admissible as answering material because the respondent raised issues in his substantive affidavit challenging the applicant’s physical capacity for reasons to which I later return.
The applicant filed her amended application for orders on 4 July 2018 but clarified her proposed orders in her outline of case document. In effect, she sought that:
a)the property at B Street, Suburb C be sold and upon the sale, the proceeds payout to a F Bank loan, various expenses but essentially, she be given 65 per cent of the net proceeds and the respondent 35 per cent and from his share, he pay the F Bank mortgage;
b)neither party encumber the Suburb C property without permission of the other;
c)the parties self-managed superannuation fund be made legislation-compliant and that she have her member account interest, or alternatively 65 per cent of the fund, after the various costs of compliance were paid;
d)the parties’ assets otherwise lie where they fell; and
e)the respondent pay the applicant’s costs on an indemnity basis.
The respondent filed a response but his final orders were set out in his outline of case document. He sought:
(1)that orders made by this honourable court (sic) settle the property dispute by way of cash settlement (Superannuation Split) between the parties within 60 days of final orders being made, or in the alternative, a time period determined by the court.
(2)that the respondent in these proceedings retains 100 per cent ownership of his property located at [B Street, Suburb C] VIC ...
(3)that a superannuation splitting order be made by the court under part VIIIB of the Family Law Act 1975 (Cth) currently with any property settlement orders.
(4)that the trustee of the self-managed superannuation fund do whatever is necessary to comply with properly served superannuation splitting orders, obtain “review and sign off” from a qualified SMSF accountant and registered auditor for the financial years 2015, 2016, 2017 and 2018 and the various expenses associated with those tasks be paid by the fund.
(5)that each party otherwise retain the property of which they were the legal owners
When I pressed the respondent to tell me what all that meant, bearing in mind the Trial Directions Orders required precision, he prevaricated. Eventually when I told him if he did not become responsive, I would presume he did not want to be heard on the precise nature of the orders that should be made. He said initially that he wanted the applicant to take all of the “super” and leave him with the house. Later, he varied that to wanting the rectification of the superannuation fund and then it be liquidated and otherwise, as the house would have to be sold, the proceeds be split equally. As I mention below, he changed that again in his final submissions.

the parties as witnesses

The applicant appeared thoughtful and responsive. Taking into account that she had to grapple with long-winded questions, some of which had various components, I found she was able to answer comprehensively.
On the second day of the hearing, the respondent brought a series of documents which he put to the applicant ostensibly to show her previous answers were not true. The documents did not support his assertions. Therefore, nothing in the applicant’s evidence seemed implausible. Most significantly, the applicant was not challenged about a very large portion of her factual assertions contained in the affidavit all of which were directed to ss 90 SM and 90 SF of the Act.
In case it is thought that the respondent was not aware of the need to challenge the evidence of the applicant, I explained to him the cross-examination process. Despite that, he did nothing more than challenge the applicant’s work history and present working capacity. He put a variety of questions to her directed to her veracity; she remained unshaken.
When I pointed out the Trial Directions Orders and that his affidavit did not address the applicant’s assertions, the respondent’s answer was that he had done the best he could and in any event, he thought he would be “given the opportunity” if what he had provided was “not good enough”.
The respondent is an experienced litigant having represented himself before Thornton J over five days in 2017. He completed written submissions relating to the applicant’s costs application before Thornton J. He appeared before Johns J on 7 June 2018 opposed to experienced counsel. It is clear from her Honour’s orders that there was a valuation dispute looming over the Suburb C property because her Honour dealt with that. Despite those orders, the valuation issue did not resolve the impasse and further litigation ensued. The respondent appeared again before Johns J on 7 September 2018 whereupon her Honour made injunctive orders against him relating to the encumbering or disposal of the Suburb C property. As to the valuation impasse, her Honour had to order (albeit by consent) that the respondent allow the valuer access to the house. Her Honour reserved the applicant’s costs of that day.
Listening to the respondent, whom I would describe as loquacious, unresponsive and argumentative, one might conclude that he was the victim of the applicant’s ire. His mantra was that he had tried unsuccessfully for four years to settle the dispute and the applicant (and by overt accusation, her lawyers) had prolonged the matter.
The reality of the position must however be seen in the very documents he filed and served on 20 July 2018 and 16 September 2018, each of which indicated his view about what was an appropriate outcome. As will be apparent from the Orders I now make, he could not come to grips with what I consider was a simple dispute which needed to recognise the respective contributions of each of the parties.
I have described the respondent as loquacious, but he was also blunt. He said several times that he was struggling with post-traumatic stress disorder despite there being no medical evidence at all. His response, when that was put to him, was that the Trial Directions Orders did not provide for medical evidence. I consider that response disingenuous.
I found the respondent anything but giving the appearance of a person stressed or fatigued. He began the hearing by maintaining that he knew he was being (or about to be) “shafted”, by which I understood him to be referring to the fact that he did not get a fair hearing before Thornton J as he was “up against” a team of lawyers and therefore had little chance. I reject all of that.
The respondent had ample opportunity to get legal advice and indeed, could have applied to use the real property as a form of security. Indeed, as the orders of Johns J in September show, her Honour permitted him to borrow up to $50,000 to get the legal advice he said he was being denied. His response when I raised that order was that he could not borrow that because the mortgagee would not lend it to him. That would have left him with the solution of seeking to sell the house but as he said, that was not appropriate. As his original proposed orders would indicate, he did not want to prejudice what he saw as his financial interest in that property. Yet, he told the Court he was able to borrow from friends because of the absence of any regular income.

I reject any suggestion that the respondent did not get an opportunity to comprehensively cross-examine the applicant. I reminded him that he had not cross-examined the applicant about the salient features of her affidavit and he remarked that he was not going to waste time and dispute facts; indeed he did not.
Thus, much of the critical evidence about what the applicant did in this relationship was not contested. My observation is that she provided a fair picture of what the respondent did as well.
At one point in the hearing, the respondent acknowledged the restrictions of the Trial Directions Orders in relation to evidence and said he had set out all these factual assertions in an affidavit much earlier in the proceedings. Having regard to how far this case had come, I was not prepared to allow him to distract attention from what I considered was largely an undisputed factual case.

A challenge to the evidence?

In these reasons, I shall distinguish between what the respondent did not challenge and his curious challenges to a small number of issues where his perception of what occurred (even if it was somewhat irrelevant to the determination) did not match the reality.

background

The background facts of this case can be taken from the judgment of Thornton J. In Ettridge & Somers [2017] FamCA 1173, Her Honour said, and she was speaking here of the evidence of the applicant:
[18] She deposed that after dating the respondent for a couple of months that he asked her to move in and live with him in the Suburb C property which he owned. The applicant deposed to living with the respondent in a de facto relationship in January 2007 when she moved into the Suburb C property.
…
[20]She deposed that when she moved into the Suburb C property that she was employed … at [Company M] in [Suburb N] where she was earning approximately $115,000 gross per annum.
…
[28]The applicant deposed that she had an argument with the respondent in or about December 2007 and that the parties temporarily separated. She deposed that she moved out of the [Suburb C] property on 4 January 2008 and rented a unit in [Suburb O]. She deposed to reconciling with the respondent by late January/early February 2008 and resuming the personal intimate relationship. She deposed to the respondent regularly staying overnight with her at the [Suburb O] property (on average six or seven nights per week) and to the respondent keeping a number of personal effects and belongings at the [Suburb O] property including clothing. She deposed to continuing to be in a romantic relationship together and sleeping in the same bed and having sexual relations with each other. She deposed to cooking for him each night and buying groceries and household supplies at the [Suburb O] property whilst the respondent used the [Suburb C] property primarily as his office for his business during this period.
…
[37]The applicant deposed in her trial affidavit that on 18 January 2009 she was hit (as a pedestrian) by a car while returning from a trip to [P Town] with the respondent. She deposed that she was in hospital for 9 weeks and immediately after the accident the respondent visited her 2-3 times a week and they talked on the phone daily.
[38] The applicant deposed in her trial affidavit that following hospitalisation she returned to the [Suburb C] property on or about 19 March 2009 where she stayed until separation on 2 January 2015. The applicant described a long recovery from the surgery and deposed that her last surgery was in or about December 2012.
Much of that material was taken by her Honour from the applicant’s affidavits but at paragraph [212], her Honour said:
I accept generally and prefer the evidence of the applicant whose evidence was supported by her witnesses and documentary evidence.
Her Honour went on to make a number of findings which the applicant now relies upon, but as her evidence was largely undisputed, those findings are unnecessary for me to detail.

Disclosure

There is no dispute about what assets there are save that I am not confident that the respondent has provided all his financial information. He maintained he had provided it to the applicant’s solicitors but that was disputed by them. Ironically, the judgment of Thornton J provides some assistance here. Her Honour said:
[166]When cross-examined about the profit and loss statement for [KPL] in the financial years 2007 and 2008 the respondent ultimately accepted that the financial statements reflected that there were accumulated losses for both years.
[167]During cross-examination the respondent conceded that from the end of the financial year in 2008 and each following year until 2015 that the financial records of the trust revealed accumulated losses and that his personal income tax return for the financial year ending June 2008, if it had been provided, would indicate a zero income. The respondent maintained that he had provided his personal income tax returns to the solicitors for the applicant but was unable to provide any documentary evidence to that effect. Exhibit C was a letter from the respondent to the solicitors for the applicant about the documents he provided. Despite the fact that this letter did not refer to the personal income tax returns being provided to the solicitors for the applicant, the respondent continued to maintain that it did.
The same issues arose in this hearing and the respondent’s position seemed the same. I do not have a clear picture of what his financial position currently is and because of his lack of corroborative material (which he said no one had asked him to bring to Court) I would not accept his list of assets and liabilities in his outline of Case document as accurate.
The respondent’s financial statement had a page missing and I am not satisfied he has provided all the documents he maintained he had. When challenged, the respondent said it was not he, but the applicant, who had not been transparent in discovery. No cross-examination of that nature was undertaken by him of the applicant.
In my view the only finding open is that the respondent has not been honest even if, by inference, the missing financial documents as to his banking accounts and his tax returns would only disclose modest amounts of money involved anyway.

the contentious issues

Disclosure

Having just mentioned that I do not accept the respondent has been full and frank, he began his cross-examination of the applicant by referring her to the fact that he hired a storage facility and had placed six or seven DVDs or CDs there with all of the information in relation to the superannuation fund. The applicant said that was not until April 2015 but in any event, not all of the material was there. The problem of the superannuation fund was compounded by the fact that the solicitors for the applicant issued a subpoena to the relevant bank who failed to respond. I made an order requiring them to provide the details by email and I understand that has occurred. However, the intrigue surrounding the superannuation fund arises from the fact that the respondent not only did not provide documents, but also had not completed the relevant taxation returns such that the fund was non-compliant.

The respondent removes the applicant as a trustee

The evidence indicates that both parties were the members of the superannuation fund. The respondent, as a financial advisor, set it up (he seemed to indicate that he had some expertise). Somehow, at least as far as the respondent was concerned, he “removed” the applicant as a trustee and replaced her with one of his friends.
In his cross-examination of the applicant, the respondent persisted in asserting that she had changed the address of the trustee to her own address after the parties’ relationship came to an end or somehow diverted the control of the fund to her and that justified his removal of her as a trustee.
Try as he might, the respondent only received answers from the applicant that she had contacted the Australian Taxation Office and asked them to send correspondence to her so that she knew what was going on within the fund. On the second day of the hearing, the respondent produced a letter addressed to the fund at the applicant’s address which he had obtained from the Freedom of Information system. He also obtained a log of the involvement of the Australian Taxation Office which included summaries of telephone calls about the superannuation fund. This document was produced in an endeavour to prove that this attempt to change the control of the fund to the applicant had taken place. Having examined the documents and heard the applicant’s evidence, I am satisfied that no such endeavour was undertaken by her. Quite the contrary, what she was endeavouring to do was to get copies of correspondence to see what he was doing.
When the respondent was cross-examined about how the removal of the applicant as trustee occurred, he prevaricated. He justified his position on the basis that the applicant had been “dishonest”. When I pressed him as to what that meant, the best answer I received was that he had asked her to comply with obligations (although he did not say what) and he then spoke to the Australian Taxation Office to get the returns done because they had not been completed and he was given advice to remove the applicant. No evidence supports his assertion.
When I pressed him again to indicate how it was that he justified removing the duly appointed trustee who was a member, he said that the terms of the trust deed permitted him to do it in circumstances of dishonesty. I pointed him to the relevant sections of the trust deed which say that only the trustees could remove a person in such an office and clearly, the applicant had not participated in her own removal.
No minutes of any meeting of the trustees were produced to show that a decision of the applicant and the respondent as trustees had taken place to remove the applicant. The respondent said that he had sent the applicant correspondence inviting her to attend meetings and she had declined to do so. Nothing in the trust deed that I can find indicates that that gave him the power to make a removal, but in any event, I am satisfied there is no evidence of a formal removal within the requirements of the trust deed. As such, I am satisfied that the applicant is still a trustee of the relevant fund with the respondent. I propose to make that clear by a declaration.

A loan to pay legal fees and living expenses

In her financial evidence, the applicant referred to the fact that she had borrowed $60,000 from a company. This was said to be for the purpose of paying her legal fees for this trial but also for living expenses. It was not paid in one sum, but rather as and when the amounts were required.
The respondent cross-examined the applicant along the lines that this company was indeed run by a friend of hers. The relevance of that escapes me. He asked her to produce her credit card records to establish that the loan had in fact been made available and drawn down and the applicant complied. This particular issue of disclosure arose because the respondent asserted that the applicant had not provided discovery of her credit card statement subsequent to the end of September 2018. Bearing in mind his lack of disclosure as I have found, the question was hypocritical. In any event, the document was provided and the respondent took the matter no further.

Gold bullion and an assertion of stealing

One of the contentious issues in the mind of the respondent was that the applicant had accused him of stealing the superannuation fund investment in gold bullion that underpinned the superannuation fund value. It seems that both parties had a key to the vault but the respondent lost his. He invited the applicant to attend with him and she did. The visit arose because she doubted whether or not he had done something with the gold bullion. The respondent in his cross-examination was at pains to point out to the applicant that he had gone with her to the vault and had spoken to some receptionist staff, all of which was directed to show that he had not touched the relevant investment. The applicant conceded all of that but indicated that she had some doubts beforehand and that gave rise to her concerns.
To the extent that the word “stealing” was used by the applicant, it was in the context of her concerns about the behaviour of the respondent and in hindsight, I would not be critical of her, knowing how he has dealt with assets.
In my view, nothing turns on the question of any hurt feelings of the respondent relating to concerns expressed by the applicant.

Accounting qualifications

The applicant has experience in accounting and throughout the parties relationship had completed business financial statements and the like. A constant mantra from the respondent was that the applicant had done these documents incorrectly. When I pressed him to say how, he said that he had been told by other accountants but there was no such evidence. As to exactly what the error or mistake was, I am unable to say because the respondent would not tell me. At one stage, he made reference to a depreciation schedule but in one of the documents tendered in evidence, I can see that the amount of depreciation is minimal.
Doing the best I can, it seems that the respondent was concerned about how the applicant treated the income and expenses of a trust which he had set up to distribute income from the trustee company through which the respondent conducted a business which could best be described as a training business.
Nothing in the evidence indicates to me that the applicant did anything wrong at all. This became an issue when the respondent was cross-examined about his own earning capacity.

The respondent’s earnings

Whether the trust was correctly accounted for or not, the respondent was clearly the face of the business. It undertook various management projects, but an examination of what it earned over the years and what the respondent earned, showed that only in one year during the parties’ relationship did it ever return a profit. In the one year, it would seem that the profit was somewhere between $30,000 and $40,000 but the rest of the respondent’s taxable income was negligible.
The assertions in cross-examination put to the respondent provoked an angry response that all of this related to the applicant’s poor accounting, but at no stage did the respondent indicate what the correct answer was and how, if at all, he earned any income. If money was shown as revenue within the trust incorrectly, presumably, it would have otherwise been in the trading company (I understand this was not a trading company but rather a trust company) alternatively, in the hands of the respondent. He did not produce his tax returns to the Court. He said he had produced them to the solicitors but they refused to accept that to be the case. I note that Thornton J was concerned about the absence of those same documents.
If the respondent was complaining about the way in which the applicant treated the expenses, presumably, they would have otherwise been shown in his tax return. Either way, there was virtually no income earned from the business activities during the relationship even if the respondent maintained that the amounts received from projects could be seen in bank accounts. The bank accounts simply show the vehicle through which money was received and spent, but it is the balance sheets, profit and loss statements and cash flow statements that indicate the value of these business activities to the owner.
I am satisfied that the respondent earned nothing of substance during the period of time that the relationship was extant.

The applicant’s capacity to work

Another contentious issue in this case is the applicant’s capacity to work arising from the motor vehicle accident which is referred to earlier in these reasons. Although the applicant’s evidence was challenged about her activities subsequent to her rehabilitation, I accept her medical evidence and her own statements about her limited capacity to be engaged in the sort of activities that were anticipated by both applicant and respondent for their future together from the very early days of their relationship and certainly prior to the accident.
The respondent cross-examined the applicant on the first day of hearing about her activities for the Q Shire Council, and on the second day, the respondent produced correspondence from that Council. Neither his cross-examination, nor the document he produced indicated that the applicant was any more than either an employee or subcontractor who certainly was to have had a role in that particular contract. I fail to see how it is of any significance to her current capacity to work in a similar way in the future having regard to the medical evidence. Below, I shall turn to the issues of what I accept is her current capacity to earn an income.
Nothing therefore in the evidence relating to the contentious matters detracts from the evidence of the applicant in relation to the matters requiring consideration under section 90 SM and 90 SF of the act.
I turn to those issues now.

The capacity of the respective parties for gainful employment

A controversial issue between the parties concerned each of their capacities for employment. In respect of the applicant, the respondent maintained that while she claimed an incapacity for the future, she could have worked productively and supported herself. A finding in respect of this goes to the question of whether the money she spent from her accident compensation should be quarantined as living expenses as somehow “added back” into the assets to be divided. From the applicant’s perspective, the respondent had not worked productively for a number of years as was evident by his income, but importantly, subsequent to separation in 2015, the respondent has lived on a drawdown of the mortgage encumbering the Suburb C home. He maintained that was predominantly for living expenses albeit, over $17,000 was also spent on legal fees. He maintained he was unable to work because of his inability to get these proceedings settled and what he considered to be the vexatious actions of the applicant and her lawyers. That issue too is critical in respect of how the Court treats the mortgage encumbering the Suburb C property in this settlement.
The applicant is 52 years of age and holds a bachelor of business and accounting and has the equivalent of a graduate certificate in project management. Indicative of her skills and qualifications, when the parties commenced their relationship, she was engaged by Company M on a high income. When subsequently retrenched, she was offered contract work by them. All that ceased when she was injured in a motor vehicle accident.
The respondent is 55 years of age and has university qualifications and a graduate diploma. At the time that the parties met and for some period shortly thereafter, he was operating a business. When the applicant was injured in the motor vehicle accident, he ceased those activities, to undertake what he said was the care of her. However, the evidence shows that she was active again once the rehabilitation program was completed, yet the respondent did little to obtain gainful employment. If he did, there is no evidence of it.
Apart from some periodic contract work, which the respondent described “coaching”, there is no evidence of what endeavours he has made to obtain income from employment, not only during the relationship subsequent to the applicant’s accident but more importantly, since separation during which time, he has lived on the drawdown from the mortgage.
It was the applicant’s case that there was no basis for the respondent not to be in work. Right throughout the proceedings, the respondent referred to suffering from post-traumatic stress disorder and back problems as a handicap for his return to work. I reject that.

The respondent’s unchallenged evidence was that in February 2013, he broke his right clavicle. Remarkably, he said no more about the impact of that and any inconvenience to him. In March 2013, he said that an MRI disclosed disc damage and spinal cord encroachment. This was a subject that he put to the applicant in cross-examination but she was unable to assist as to the details of what he had been told by his doctors. What he had been told, and what happened thereafter, are two different things and there is no evidence to indicate that these problems prevented him from working. He said that in March 2014, he was having difficulty walking at all and sought physiotherapist treatment. The unchallenged evidence of the applicant was that in 2013, the parties drove to Adelaide to pick up some motorcycle parts that the respondent had purchased, and in 2014 had a number of trips including a road trip for about 10 days. All that seems inconsistent with someone with a severe disability. Nothing was put to the applicant to indicate that during the period of time prior to the ending of their relationship the respondent was debilitated by the problems to which he referred.
The respondent said that as at August 2018, he had not been able to walk for 22 of the last 38 months. None of that provided any assistance to the Court in working out why he had not been gainfully employed or what the cause was for his inability to walk. In the courtroom, he showed no incapacity
As I have also mentioned, the respondent said throughout the proceedings that he suffered from post-traumatic stress disorder. However that appears to have been something of his own diagnosis, because although he had received assistance from a forensic psychologist, he said that his disorder was a result of what he had to deal with in respect of the applicant’s injury which was “compounded by the applicant’s behaviour and conduct post her accident”. The absence of evidence bearing in mind that the respondent had plenty of opportunity to call some expert, means that the Court does not have any evidence to explain his living off the drawdown of the mortgage, and why he was not employed.
The respondent was asked why, if he was unable to continue running his business, he had not sought paid employment. His response was that he had been trying to get a job but again there was no evidence of that. He explained his inability to work was also due to the fact that he had just “defended” a trademark dispute and he was trying to “survive” the present litigation dispute with the applicant. He thought that if he could get the business going, he could earn more than $100,000, but if he did not, he could probably earn between $80,000 and $100,000 but he felt he had to factor in that he was already 55 years of age.
In summary, there is no satisfactory explanation as to why the respondent has not been in gainful employment, not only through the latter part of the relationship but also since 2015. In the circumstances, there is no basis for me to say that the applicant should be responsible for the drawdown of the mortgage used by the respondent alone subsequent to the ending of the relationship.

the applicant’s capacity to work

The applicant relied upon the affidavit of Mr R. Mr R is an orthopaedic surgeon. His affidavit was filed on 4 July 2018 and he was not required for cross examination.
Mr R set out the circumstances of the accident as he understood it and the medical history of the applicant. He described her present disabilities including her physical restrictions and then turned his attention to her capacity for gainful employment. He said that looking at the daily routine and the work that she used to do prior to the accident, which was predominantly project management, he was of the opinion that she did not have the capacity to do that management work at this time.
Mr R said that the applicant had not worked since the accident and as he understood project management, and it was not the subject of dispute from the respondent, she would have to walk, teach, travel overseas and interstate as well as meet clients and climb stairs. In Mr R’s view, it would be better for the applicant to change vocation and retrain.
In respect of her incapacitation, he thought that any job which required her to kneel, squat, walk long distances and endure long-term pain in the foot and knee because of restrictive movements, would be a problem. He also made the observation that reduced sensation in the lower limb could lead to the applicant being easily hurt because there were no protective mechanisms.
The horrific nature of the injuries and the subsequent hospitalisation and rehabilitation work, combined with the evidence of Mr R makes clear that the applicant cannot do the sort of work that was originally anticipated she would be able to do when the parties commenced their relationship. Subsequent to her rehabilitation being completed, a number of things were undertaken including the travelling to which I have already referred. However, the respondent did not put to the applicant anything in relation to the activities that he said she could do that might give rise to her having gainful employment.
In her affidavit, and unchallenged by the respondent, the applicant said that subsequent to the accident, she was involved in renovation of the Suburb C property including painting, taking out the old vanity in the downstairs bathroom and replacing it, and doing all of the plumbing work herself. She said that in 2013, she painted the beams in the sunroom. In that same year, she sanded and painted all the kitchen cupboards and drawers. She then set out a long list of things that she had undertaken of a labouring nature. None of those was challenged. However, in terms of her capacity for employment, the very nature of the evidence of Mr R would indicate that she cannot do those sorts of activities for long periods of time.
In her affidavit and about which I asked her questions, consistent with the evidence of Mr R, the applicant said:
[92]Accordingly, I believe it will be necessary for me to retrain and re-skill so I can work in another career/vocation, which will take considerable time.
I asked the applicant what that meant and she said she was unable to be more precise because she had so far been unable to find an alternative occupation, but she certainly intended to try and get back into the workforce in the foreseeable future, bearing in mind the disability restrictions that Mr R referred to.
At the present time, the applicant does not have any form of income because she was paid out by the Transport Accident Commission (“the TAC”). Obtaining employment therefore is going to be critical. She is currently residing in rental accommodation and has a desire to acquire a residence. Without a stream of income, she could only buy a modest home, because presumably, she would not be able to borrow any significant sum.
I am satisfied that the future for the applicant is much more bleak than that portrayed of her by the respondent but I am also satisfied that there is no basis to find that the respondent cannot return to the sort of activities that he was involved in when the relationship began.

What are the assets and how did the parties gain them?

The parties commenced their relationship in January 2007 and regardless of the views of the respondent, I am bound by the declaration of Thornton J.
In January 2007, the respondent owned the property at Suburb C, which has been retrospectively valued at $430,000. Encumbering that property was a mortgage to F Bank of $206,000. Respondent also had some vehicles and chattels.
Around the same time, the applicant had an interest with her then husband in a home. In the middle of 2007 it was sold and after payment out of the mortgage and the division of the proceeds with her husband, the applicant ultimately received $115,000. She also said that she had cash in the bank of $20,000.
When the relationship began, the applicant was in full-time employment and earning about $115,000 per year. On the evidence before the Court, that was certainly more than what the respondent was earning. He had credit card liabilities of about $13,000 and the unchallenged evidence of the applicant is that she paid out those credit cards by the obtaining of a line of credit with F Bank.
In November 2007, the applicant guaranteed the respondent’s line of credit of $100,000 with F Bank. The purpose of the exercise was to “revamp” the respondent’s business activities. The availability of those funds then paid out the credit card and not long later, the applicant received a redundancy payment of $38,000. Despite being made redundant, she then returned to Company M on a contractual basis and earned a reasonable income there.
If a snapshot was taken of the parties financial positions around the time of the first year of the relationship, one can see that from a financial perspective, the respondent had greater equity in assets then did the applicant. It is inappropriate to divide up contributions according to specific time periods, unless there is a good reason to do so, because of the myriad of activities that constantly change and affect the weight to which many contributions should be accorded.
Having said that, there is little doubt that to the extent that the respondent’s contribution was greater than the applicant, her earnings outweighed his thereafter. To the extent that he disputes that, he produced no evidence. He certainly blamed the applicant for her accounting practices as I have described, but has not filed any amended returns that might give some better insight as to what his earnings were.
Regardless of those matters, in January 2009, the applicant was involved in the motor vehicle accident to which I had earlier referred and was hospitalised for two months. Between 2009 and 2014, she obtained payments from the TAC. In 2009, 2010 and 2011, she was paid approximately $50,000 per year, and whilst that would seem to be a reflection of what she was earning in the training business with the respondent, it again indicates that she was earning more than what he was.
The respondent’s view was that he was horrified by the accident and became her carer, but little or no evidence supports that assertion. The evidence about her non-financial activities and her roles within the home undertaking domestic chores, would all indicate that even if he was her carer, it was a relatively modest if not insignificant role.
A number of witnesses of the applicant were called for cross-examination including the applicant’s father but none of them advanced the matter very far at all. Ms S, who was a close friend of the applicant, told the Court that the person who was mainly caring for the applicant after the accident was the respondent. That makes sense bearing in mind that the parties were together in the home but the evidence is silent on the question of what specific roles the respondent played.
I find in the circumstances that certainly for the years 2009 through until 2012, the primary source of income for the support of the couple was that received by the applicant.
In 2009, the applicant received a gift of $3,000 from a relative and that money went into replacing a hot water service. In 2013, she received a $15,000 inheritance and used that for living expenses at a time when the parties were entirely dependent upon her TAC money.
In April 2014, the TAC settled the compensation claim of the applicant paying her $672,000. Her lawyers had all been paid prior to that payment being received.
I accept the unchallenged evidence of the applicant that the $672,000 was used to pay $100,000 towards the line of credit, leaving it then available to be redrawn. At that particular time, the house mortgage was $164,000. This is the mortgage that had encumbered the home since the relationship began. That debt was paid out and the property was basically unencumbered. The balance of the money received by the applicant was retained in an account in her name. In my view, it is significant that she chose to keep the money separate rather than put it into any form of joint account as it indicates her intention not to see the funds as joint property. Nothing in the evidence indicates the respondent complained. It is also significant, that in making the payments, the TAC did not define what was loss of earnings and what was for pain and suffering but having regard to the fact that she had been paid on a regular basis in the previous years, I can conclude that it was designed predominantly as pain and suffering and future economic loss.
Also from the money she received, the applicant provided funds to enable the respondent to buy motorcycles.
At the point at which the relationship came to an end therefore, if one took the home (then unencumbered), the money in the applicant’s bank accounts and the chattels and so forth that had been acquired, one would have to conclude that the contributions of a financial nature made by the applicant were overwhelmingly greater than those of the respondent.
On a number of occasions throughout the hearing, the respondent observed that he had been the applicant’s primary carer, but he did not challenge the evidence of the non-financial contributions that she made. Having regard to the nature of those laborious activities, not to mention the role within the home that she fulfilled and which he did not challenge, the Court must conclude that, at best, their non-financial contributions were much the same, or indeed, those of the applicant outweighed those of the respondent.

Separation occurs

The separation between the parties was unpleasant. The $100,000 line of credit was available because the TAC money had paid out the fully drawn debt. The mortgage on the home was down to almost nothing after the applicant’s money paid out the debt. The applicant said that the respondent began to draw money on the line of credit, so she took $96,000 out and put it into her bank account. Having done so, interest obligations arose to the F Bank. She paid those obligations.
Whilst the respondent complained about the applicant taking the $96,000, no action was taken but he thereafter began to draw money against the mortgage loan. It is now about $127,000.
Tracing back the line of credit, it will be remembered that in late 2007, the applicant guaranteed that facility and the respondent used it for his business. Presumably, that guarantee could have only been given, and the creditor was interested, on the basis of the income that the applicant was then earning. The line of credit went out to the $100,000 limit, but it was the applicant’s funds that paid that out. As a consequence of her drawing down the $96,000, one must conclude that this was a joint liability.
The applicant walked away from the relationship with over $300,000 in her bank account but also the $96,000 that she had taken from the line of credit. Of all of those monies, her unchallenged evidence is that she paid $148,600 towards legal fees, and the remainder has been used on living expenses including the purchase of her motorcar. As she did not retain the majority of the household furniture and effects, she had to acquire new items.
The respondent retained the parties’ motor vehicle when the applicant left. He retained the majority of the household furniture and effects. I conclude therefore that the money that the applicant spent on those replacement expenses was justified.
In respect of legal fees, I have contemplated whether some “adding back into the mix” should be undertaken in regard to the Full Court decision in NHC & RCH [2004] FamCA 633.
However, all of this money spent by the applicant can be directly seen to be related to her personal pain and suffering or her future income stream. In those circumstances, the legal costs that she has incurred has come out of her own money to which the respondent is not entitled. I am satisfied on her evidence, that the money she now retains is nominal and for the same reason just articulated, there is nothing I can see in the evidence that would justify a conclusion that the respondent made any contribution to that money at all.
Similarly, in respect of the mortgage, the applicant’s evidence is that the debt now stands at approximately $125,000, whereas the respondent was of the view that it was closer to $127,000. All that is directly attributable to the respondent, on the basis that I am satisfied that he has not given any plausible reason for not obtaining gainful employment. As I previously mentioned, there is no medical evidence, nor corroborative evidence of the endeavours that he has made to support himself. Running up the mortgage, as he has done, is not something for which the applicant can be seen to be responsible.

Assessment

Earlier I set out the factors to be taken into consideration in assessing the parties’ respective contributions. It is not controversial here that each party seeks orders so I have concluded that it is just and equitable to make an order.
I propose to leave aside the questions that arise out of s 90SF(3) of the Act for the moment.
As the facts set out above show, when the relationship began, the respondent had made a greater financial contribution but that was quickly overtaken by the income earned by the applicant, including during the years when she was in receipt of the TAC payments. She made significant contributions towards the business activities of the respondent at that stage, by guaranteeing the line of credit, and ultimately paying that line of credit out when she received her money. Again, that money is directly attributable to her loss of earnings and pain and suffering. By the time the relationship came to an end, with the receipt of the capital sum from the TAC, I find that the applicant’s contribution was overwhelmingly greater than that of the respondent, both in respect of capital contribution and also income. I am satisfied that the non-financial contributions of the applicant also exceeded those of the respondent and that to the extent that he maintains that his role as a carer was significant, the evidence does not support a conclusion that it was of such significance that it should be given any weight.

What are the assets?

The applicant provided a table with columns showing values but also what was described as “details”. Counsel for the applicant conceded that I should ignore those “details”.
I accept that the Suburb C property is valued at $920,000. The mortgage commitment is around $127,000, but there is also a line of credit of $100,000 that has to be paid out. Technically therefore, the net equity of the parties in the home is approximately $693,000. However, as I have already set out, I do not see any justifiable reason to attribute the mortgage to the applicant, and accordingly, will treat the value of the Suburb C home as $920,000, less $100,000 being the line of credit which the applicant acknowledges is a joint liability, and the mortgage facility which will have to be paid out at settlement will be adjusted against the ultimate entitlement of the respondent.
The applicant then set out various monies which were effectively the balance of her savings. In my view as they have come directly from the TAC money, they are either her savings to which the respondent made no contribution, or alternatively, a future capitalised stream of income to which the respondent can also claim no contribution.
The applicant also set out that she had lent her brother $50,000 in September 2015 from the funds that she then held. There is now $22,367 outstanding. As this money was also taken from the TAC money, it should not be added into the list of assets to be divided as between the applicant and the respondent, but 1 will take it into account that when I come to s 90SF of the Act, that she has that as a resource and may resort to it if she needs money.
The applicant also set out a list of motor vehicles, none of which had been valued. When I asked the respondent about that, he said I could ignore them all. Importantly, one of those vehicles is the one currently owned by the applicant. She also acquired that from the TAC money and after separation.

There is no evidence as to the value of jewellery or household contents and, as counsel suggested, they should be ignored and I agree. They are of modest value in any event, and each party has chattels and the like. During the relationship, the applicant used, and had the benefit of, those chattels within the home and the respondent now has that benefit. The applicant on the other hand has had to acquire items from her own resources. In my view they should all be ignored.
The applicant then set out a list of money under the respondent’s control, but I have no sense of how he obtained those monies other than the descriptions he gave. He told the Court that he had borrowed money from friends to live on and he has the occasional “coaching” position for which is presumably paid. There is no indication of any regular form of income, but he is otherwise living off the drawn down mortgage. As I have taken the drawn down mortgage into account as part of the adjustment against his ultimate entitlement, I propose to ignore the funds that he has, on the basis that I might otherwise be “double dipping”.
In the applicant’s list, she referred to the sale by the respondent of the Company T shares. There is no evidence of how they were acquired or when. The respondent’s position was that they were sold to pay living expenses, even though I have accepted that he could have been in gainful employment. There is no indication as to where that money has otherwise gone. I propose to treat that as a premature distribution to himself but the reality is that there is not sufficient evidence for me to say that the applicant has made any substantial contribution in any event to that particular asset. I make clear that it is not necessary for a party to show contribution towards a specific asset, but in this case, the evidence does not enable me to find one way or the other how the shares came into existence.
Part of this dispute has revolved around a corporate entity known as the K Pty Ltd (“KPL”), which was directed and controlled by the respondent. The applicant has taken the view that it is of no value and I accept that assertion, on the basis that certainly for some years now, the respondent has not been in any serious employment.
A similar approach should be taken in respect of such things as “bike parts” held by the respondent. The evidence would suggest that the parties managed to acquire those but that was at a time after the applicant’s accident when she was the only one with any income. Whilst she has been therefore indirectly the source of the acquisition, I find in the circumstances that it would be unjust to give those “bike parts” any value when there is no evidence to support it.
When all of those matters are taken into account, the reality here is that the appropriate amount of the assets to be divided (excluding superannuation) amounts to the net equity in Suburb C but ignoring the mortgage. In the circumstances, I find that the parties’ legal and equitable interest in properties for the purposes of the division is $820,000 which is the gross value but after taking into account the line of credit of $100,000.
In respect of liabilities, I shall take into account in the ultimate assessment that the respondent will be responsible for the mortgage debt. The F Bank line of credit which is just under $100,000 will be paid out of the sale before the parties receive any distributions, so effectively each of them will be paying one half. I propose also to ignore the applicant’s credit card on the basis that it has a balance that has arisen subsequent to the separation and therefore should not be taken into account in any shared obligation sense.
A contentious subject related to a loan of $60,000 which I earlier mentioned. The applicant owes U Pty Ltd that sum. As it was only recently borrowed for the purposes of assisting with her living expenses and her legal fees, I propose to ignore that on the basis that it is a personal liability of hers alone.
In summary form therefore, I am dividing up as between the applicant and the respondent $820,000.

superannuation

During the relationship, the parties set up their own self-managed superannuation fund. From her four funds, the applicant deposited into this fund $122,000 and from his one fund, the respondent put in $75,000.
As the returns for the last few years have not been done and certainly not since the relationship ended, it is critical that that situation is rectified. In his final address, the respondent, who had resisted the course of action that the applicant wanted undertaken, agreed that she could organise the accountant and the auditor and distribute the income on the basis of what had happened in the past. History shows that when the last return was lodged and income was declared, after the costs and the tax paid, the member accounts received the profit according to the capital balances. Here, to avoid a dispute arising (bearing in mind that I have found that the applicant is still a trustee with the respondent), as each return is completed and income declared, the member account should be adjusted according to the proportions of capital in each of those years.
Having regard to the disparity, the superannuation of the parties is hardly controversial. As I observed, the superannuation should not be included with the non-superannuation assets, on the basis that superannuation is a different species of asset. Normally, the Court is obliged to consider the contributions and the factors set out in s 90SF of the Act. Here, it seems to be common ground that upon the rectification of the non-compliance issue, the member accounts will be declared and at least in respect of the applicant, she should be able to draw her member account and set up her own fund elsewhere. Because I have no confidence that the trustee issue will not be the subject of further dispute, I propose to formally order that, of the applicant and the respondent in their capacities as trustees of the relevant fund, the applicant be responsible for the determinations like those that the respondent agreed upon and to the extent that after her member account is transferred out of the self-managed superannuation fund, if the respondent requires her assistance in executing the necessary minutes of meetings and transfers to enable a fund to be liquidated, that can occur, but he should do that at his expense. That is because he has shown little interest up until now in rectifying the situation, even though he protests otherwise. There is no evidence of what attempts he has made to fix the problem, and at best, his flawed approach of removing the applicant indicates a lack of thoughtful due process.
Having decided that the parties’ member accounts are to be rectified, part of the dilemma will be that the balance of the fund is held in both cash and gold bullion. I propose to give the applicant the responsibility of converting that bullion into cash so that the necessary distribution can occur quickly. It seems that the applicant considers that it will not be difficult to make the fund compliant because the interest component will be readily seen in the books of accounts of the bank. The sale of the bullion might be more problematic if the parties cannot reach agreement, and under those circumstances, I propose to give the applicant that responsibility to dispose of them as well.
In making orders relating to the superannuation fund, I am conscious that the applicant will also have a greater entitlement to superannuation in the future than will the respondent and each of them will have the opportunity to contribute to their own respective superannuation interests. However, I anticipate that the respondent will earn more than the applicant in the future having regard to the disabilities that I accept she has, and on that basis, it should not be all that long before the respondent catches up with the balances held by the applicant.

Section 90 SF of the Act

Section 90 SM(4)(e) of the Act requires the Court to consider the matters set out in s 90SF(3) of the Act so far as they are relevant.
Section 90SF(3) of the Act requires the Court to consider a number of matters, and I make the following findings.
The parties are both of an age where employment prospects may be difficult but I accept that the respondent has a greater chance of employment having regard to his espoused expertise. I am very concerned about what prospect the applicant has, because, as her medical expert advised the Court, she should be looking for a different vocation than that which was originally intended by both parties when the relationship commenced. There is therefore no doubt that the evidence supports a conclusion that the health of the applicant is worse than that of the respondent for the future and that affects her economic circumstances more than those that affect the respondent.
I find also that the respondent has a better chance of earning an income once these proceedings are concluded and even as an employee, he can earn at least $80,000 per year.
There are no children to support and no commitments that each has to support any other person. In respect of both parties, it would seem that neither is eligible for any Commonwealth benefits.
The Court is obliged to take into account the standard of living that in all circumstances is reasonable. There is little the Court can do here to affect the futures of the parties having regard to the limited amount of assets that are available for distribution.
I take into account that neither party appears to have commenced another relationship from which there are financial circumstances relating to cohabitation.
The Court must also take into account the terms of any order and it is at this point that I reiterate my earlier observations about the fact that I will take into account that the respondent retained the Company T shares money and the applicant retained the money from the TAC but also has the capacity to recall the debt owed by her brother. None of those resources is of any major significance in this case. In the case of the TAC money, I accept it has been spent
The two main issues that come out of s 90F(3) of the Act are the future prospects of the applicant and the fact that any adjustment of the proceeds of the sale of the home in her favour needs to be balanced against what the respondent retains from that home. Percentages in a case such as this can be very misleading and it is important to look at the underlying values of whatever percentage determination is made. I find in the circumstances that there is a justification for a modest adjustment in favour of the applicant because of her future employment circumstances, but those have to be offset by the fact that she will be receiving substantially more cash from the sale of the home than will the respondent.

The proposals of the parties

I have already set out what the parties propose and how difficult it was to get the respondent to address precisely what he saw as the just and equitable outcome.
Both parties accepted the superannuation should be divided on the basis of the member accounts once they are rectified. That must too factor into the matters that I just mentioned in relation to the disparity that each party will have as a result of the orders, but it does not carry an enormous amount of weight because there are many years ahead of each party before they can draw on those superannuation funds.
As indicated earlier, it was the applicant’s view that there should be a division of the assets has to 65 per cent to her and 35 per cent to the respondent, but when one looks at what the net assets really means, I am only dividing up $820,000. To divide that on the 65 per cent basis to the applicant but also expect the respondent to carry all the mortgage, in my view would not be just and equitable. It would also mean that the applicant was getting well over double what the respondent was getting, and in my view, that would not be just and equitable.
Notwithstanding the position portrayed earlier in these reasons as the position of the respondent, it was remarkable that in the final submission, he said that he ultimately agreed that the house had to be sold and that all expenses should be paid “50/50”. He wanted a reserve price fixed in line with what the valuer had assessed Suburb C to be worth about “plus or minus five per cent or so”. In effect what he was suggesting however, was that all costs and all liabilities should be taken off the top before any division. He then said when that occurred, the balance should be divided as to 40 per cent to the applicant and 60 per cent to him. When I pressed him as to why that was so, he said that it was on the basis that no one else was caring for the applicant and he had spent a huge amount over the years getting to this point. He then launched into a criticism of the applicant and her lawyers, again saying that she had spent money and was vexatious over the 25 Court appearances that have taken place. In my view that is not a basis to explain why there should be a division in those terms.

What is a just and equitable outcome?

Based on contributions, which in my view, substantially favour the applicant, I have taken into account what that disparity means in underlying value terms to the applicant by comparison with what would be received by the respondent. I have made a modest adjustment for the applicant’s future employment difficulties which I suspect will not be of great duration. I consider an appropriate adjustment in this case is that of the $820,000 value, there should be a division as to 58 per cent to the applicant and 42 per cent to the respondent.
That division would mean that of the $820,000, the applicant should receive $475,600 and the respondent $344,400. However, the mortgage of approximately $120,000 has to be taken off the respondent’s share so he will receive approximately $217,400. That analysis would mean that whilst the division looks like 58 per cent to the applicant and 42 per cent to the respondent, in real terms it is much closer to an overall settlement of approximately 70 per cent of the applicant and 30 per cent to the respondent. In my view having regard to the way in which the respondent conducted himself after the relationship came to an end and the unilateral action in using the mortgage in circumstances where he should have been endeavouring to support himself adequately, that is an appropriate outcome.
In the circumstances, the house should be sold and after the expenses associated with the agents and conveyancing fees, the net proceeds should be divided as to 58 per cent to the applicant and 42 per cent to the respondent and from his 42 per cent, the mortgage should be paid. The line of credit which is just under $100,000 should be paid before any such division takes place.

procedural orders

As I have no confidence in any agreement being reached having regard to the way in which the parties had to conduct this litigation, I propose to make specific orders that will give ultimate control of a lot of these decisions to the applicant who has a greater interest in getting those matters resolved quickly. The respondent’s position was that he needed time. He suggested 90 days, but at that point he added that he wanted to have the property not put on the auction market but sold by private sale. In my view, all of those matters indicate that the respondent is stalling for time. After four years of constant litigation, and indeed an unresolved dispute, the parties need to get on with their lives and in particular, the applicant is entitled to her money. She has little, if any, money at the moment and still has expenses to pay, including her lawyers. Accordingly, I consider that 90 days is unreasonable, and the property should go on the market in 30 days, on the basis that there has been no suggestion by the respondent that he intends to buy out the applicant’s interest based on those calculations.

Costs

Whilst I invited both parties to address the issue of costs, it is conceivable that an approach may be taken by either of the parties as to the issue of costs based on the way the litigation was conducted and also offers of settlement. Both of those matters are affected not only findings that I have made but also the question of whether the litigation was conducted in a sensible and reasonable manner. In the circumstances, I will provide orders for the parties to file written submissions which will be required very quickly so that this matter can be resolved without further delay.

The applicant’s proposed minutes of orders

For sake of completeness, I make the following observations about the form of the proposed orders presented by the applicant.
It will now be apparent that whilst the general tenor of the orders has been accepted, I have not followed the draft presented.
I do not accept that it is appropriate to delegate to the “president of the Real Estate Institute in Victoria” the tasks of nominating an estate agent. If, as I fear, there is a real probability of a disagreement, it is more appropriate for one party to make that decision and I have decided that the person most likely to be efficacious in respect of that task here is the applicant. I also do not accept that there is power to delegate to that same unnamed person (albeit there is a clear position) the responsibility of fixing a price. The parties either agree or the Court must intervene.
I do not accept that it is appropriate to make an order that regulates what might happen on a sale. If the auction is unsuccessful here, the Court is best placed to work out a machinery clause that will finalise matters. I appreciate that such a course and the one about fixing the price is likely to involve further costs and stress for the parties but in this case, any party who thwarts the clear intention of the orders faces the prospect of an order for costs.
I do not accept that a court can make an order blithely ordering costs (see draft 1(c)), the substantive power for which lies in s 117 of the Act where circumstances have to be shown to exist to depart from the principle there stated, for an anticipated costs order following upon a breach. In my view, that is beyond power.
Although the applicant simply sought a declaration in relation to the trustees of the superannuation fund, the wording of the Act is restrictive. In my view, the power is to declare rights and as trustee, I consider the applicant has not been removed and accordingly, still has not just rights but also responsibilities in respect of the property of the trust. I have drawn the orders accordingly.
The applicant also sought an order under s 106A of the Act for a “Registrar of the Federal Circuit Court” to be appointed. I am unclear whether such a person exists and in any event, there is no clear indication of how the registrar would decide whether or not to execute the document. It would not be appropriate for that registrar to decide without some form of evidence. In addition, there must be some indication of why the orders as made by the Court would not be implemented bearing in mind that they are final orders. Again, and accepting the costs concern, the appropriate order is for the matter to be returned for further enforcement. Here, the parties should be under no misapprehension, having determined as I have, I shall list any enforcement question expeditiously if raised.
Paragraph 22 of the draft seeks what may be described as a “catch all” but the power lies in the declaratory power unless the order alters interests in property. No such assertion was made here so I have concluded that the applicant is seeking a declaration and it should be made. However, there is no evidence of property in which the parties have any joint tenancy so I am not sure why that clause is there and I have ignored it accordingly.

I certify that the preceding one hundred and fifty-three (153) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 29 October 2018.

Acting Associate:

Date: 29 October 2018

[2018] FamCA 863

29 October 2018

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Civil Procedure

Legal Concepts

Injunction

Costs

Remedies

Procedural Fairness

Res Judicata