Friedrich and Harvey

[2016] FCCA 123

FEDERAL CIRCUIT COURT OF AUSTRALIA

FRIEDRICH & HARVEY [2016] FCCA 123

Catchwords:
FAMILY LAW – Property – de facto relationship.

Legislation:

Family Law Act 1975, ss.90SF(3), 90SM

Bevan & Bevan [2013] FamCAFC 116
Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395
Stanford & Stanford [2012] HCA 52
Vass & Vass [2015] FamCAFC 51

Applicant: MR FRIEDRICH

Respondent: MS HARVEY

File Number: WOC 569 of 2014

Judgment of: Judge Altobelli

Hearing date: 12 November 2015

Date of Last Submission: 23 December 2015

Delivered at: Wollongong

Delivered on: 24 March 2016

REPRESENTATION

Counsel for the Applicant: Ms Humphreys

Solicitors for the Applicant: Natalia Goozeff Solicitors

Counsel for the Respondent: Ms Doosey

Solicitors for the Respondent: McNamara & Associates

ORDERS

(1)The parties do all acts and things and sign all necessary documents to enable the amount of $68,374 to be paid to the Wife from the monies held on trust by RMB Lawyers for the parties, with the balance of said monies to be paid to the Husband.

(2)The Husband and Wife each retain the household and other items they currently have in their possession or control.

(3)Any application for costs is proceed by way of written submissions not exceeding 500 words, to be filed and served within 14 days.

(4)Any written submissions in response not exceeding 500 words are to be filed and served within 14 days thereafter.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 569 of 2014

MR FRIEDRICH (by his case guardian)

Applicant

And

MS HARVEY

Respondent

REASONS FOR JUDGMENT

Introduction

1.These reasons for judgment explain the Orders made in a financial dispute between a de facto couple who lived together for about 10 years.  The Applicant, who will be called “the Husband” in this case, is 74 years old.  The Respondent, who will be called “the Wife”, is 61 years old.  The intensity with which this dispute was litigated, and the legal costs incurred, is totally disproportionate to the issues. 

Background

2.Most of the background facts are uncontentious, or relatively uncontentious.  Where there are differences in the evidence about the date of cohabitation or date of separation, nothing turns on it.  The parties appear to have met in 2002, a relationship formed towards the end of the year, and cohabitation started in mid-2003.  The relationship appears to have started deteriorating in 2012.  On 21 July 2013, the Applicant suffered a severe stroke and was eventually placed into high-level care.  Separation took place in about August 2013. 

3.At the time of cohabitation the Husband had purchased land in Property E together with a business partner, with the intent to develop the property for profit.  He was also a partner in a real estate agency.  The land was acquired and successfully developed and, as a result of this, the Husband retained one of the two villas in a complex, for his own use. The Husband and the Wife started living there.  The property was sold for $475,000.  By the end of 2003, the parties moved to (omitted) and early in 2004 the Husband purchased a property at Property C in Queensland in his name.  Initially, the property was tenanted, but the parties then moved in in September 2004. 

4.In October 2009 the title to the Property C property was converted to a joint tenancy between the parties.  The circumstances of this are in contention, but this is not pertinent to the determination of the case.  In 2010, the Husband changed his Will to include the Wife, as well as appointing her his attorney and enduring guardian.  The Property C property was sold in December 2010 for $460,000, a profit above the purchase price, which was $305,000.  All the money went into the Husband’s bank account.  The parties decided to relocate to (omitted).  In March 2011, the parties purchased a home in Property N for $380,000 as joint tenants. 

5.After the Husband suffered his severe stroke in July 2013, he went into a care facility in Property N. However, after separation from the Wife, the Husband’s son, Mr C, moved him into a high care facility at (omitted) Nursing Home in Queensland.  The Husband’s son and his family lived nearby. 

6.There are a number of uncontentious facts relevant to the decision.  At all relevant times the Husband was the Wife’s carer for Centrelink purposes.  This was as a result of illness that she suffered.  The Husband’s stroke in July 2013 left him with severe weakness in his right upper and lower limbs and made him globally aphasic, which means that his speech is limited to “yes” and “no” and he relies upon gestures and body language to communicate.  Because of his disability, the Husband’s son, Mr C, was appointed as his Case Guardian.  The Husband remains in high-level care.  The Wife is in rented accommodation. 

7.During the course of the proceedings, on 25 September 2014, the parties agreed by consent that the Property N property be listed for sale.  This in fact took place.  On 15 December 2014 they further agreed, by consent, that $260,000 be released to the Husband by way of interim property distribution, the purpose of which was to fund his high-level care placement.  It appears that this did not in fact happen until August 2015, when there was a further consent order that the sale proceeds of the Property N property, then held in trust by RMB Lawyers, be released as to $280,000 to the Husband for the stated purpose. 

8.At about the time of separation the Wife withdrew about $47,000 from the Husband’s bank account and she agrees that, for all practical purposes but subject only to some issues of adjustment, she should be treated as still having those funds.  Thus, apart from the monies that the Wife holds and the money paid to secure the Husband’s bed at a high-level care facility, the only other substantial funds comprise just under $100,000 held by RMB Lawyers, being the rest of the sale proceeds. 

9.At the hearing, the Husband sought Orders that would result in an adjustment in his favour of assets of up to 90 per cent.  It was contended on his behalf that 85 per cent represents contribution, and 5 per cent is future needs. 

10.On behalf of the Wife, however, she contended that she should receive about 30 per cent of the net assets of the relationship. 

11.The pool of assets is relatively small.  The parties’ proposals are polarised.  The evidence suggests that by the end of the hearing the Husband had incurred legal fees totalling about $80,000, whereas the Wife had only spent or incurred liability for about $40,000.

12.The issues for the Court to determine are focused on the constitution of the balance sheet, and in particular whether legal fees ought to be added back, the valuation of some assets, and to a lesser extent, how liabilities should be treated.  There were issues about assessment of contribution and of future needs.  As it turns out, there were also substantial issues relating to assessment of the weight to be given to the evidence adduced on behalf of the Husband by his case guardian, and also pertaining to the Wife. 

The evidence

13.In the Husband’s case, reliance was placed on a Financial Statement of the Husband, filed 23 October 2015, and the Affidavit of his son, Mr C, filed 23 October 2015. 

14.In the Wife’s case, reliance was placed on her Financial Statement of 6 November 2015 and her Affidavit of the same date.  Various documents were tendered in evidence, and where relevant they will be referred to. 

The applicable law

15.This is an application under s.90SM of the Family Law Act 1975 which relevantly provides:

Alteration of property interests

(1)  In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:

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

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

including:

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

(d)  an order requiring:

(i)  either or both of the parties to the de facto relationship; or

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

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

Note 1:       The geographical requirement in section 90SK must be satisfied.

Note 2:       The court must be satisfied of at least one of the matters in section 90SB.

Note 3:       For child of a de facto relationship , see section 90RB.

(2)  If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.

(3)  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.

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

(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; and

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

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

16.Section 90SM(4) incorporates the provisions contained in s.90SF(3) of the Act, which states:

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

(a)  the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and

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

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

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

(i)  himself or herself; and

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

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

(f)  subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:

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

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

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

(g)  a standard of living that in all the circumstances is reasonable; and

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

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

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

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

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

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

(n)  the terms of any order made or proposed to be made under section 90SM in relation to:

(i)  the property of the parties; or

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

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

(i)  a party to the subject de facto relationship (in relation to another de facto relationship); or

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

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

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

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

(i)  a party to the subject de facto relationship; or

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

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

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

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

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

(s)  the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and

(t)  the terms of any financial agreement that is binding on a party to the subject de facto relationship.

17.In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how s.90SM was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395, but on the basis that it is a shorthand distillation of the words of s.90SM, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:

1.Identify and value the property, liabilities and financial resources of the parties; and

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

3.Identify and assess the other facts relevant under s.90SM(4)(d)-(g) including s.90SF(3) and determine the adjustment (if any) to be made to the contribution entitlements at step two;

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

18.The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of s.90SM(4), independent of the s.90SF(3) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under s.90SM of the Act), indicated that they themselves consider it just and equitable that some order be made under s.90SM adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.

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

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

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

Assessing the evidence and credibility issues

21.The evidence in this case was, in many respects, quite unsatisfactory.  It certainly did not assist the Court in its fundamental role of making just and equitable Orders.

22.From the moment that a Case Guardian was appointed for the Applicant, those representing him should have known that the Husband faced considerable factual difficulties in establishing those parts of his case that were in contention, or which could not be established through independent evidence.  The Case Guardian, or perhaps those representing him, may have lost sight of this.  Within the parameters set out above, therefore, the weight to be given to the Case Guardian’s evidence is limited.  Large parts of his Affidavit are hearsay.  Even where objection was not formally taken, the Court must still be conscious of the inherent unreliability of some of the assertions made by the Case Guardian. 

23.The significance of these issues in the Husband’s case became apparent very early in the cross-examination of the Case Guardian.  He predicated the evidence that he gave in his Affidavit as being, in effect, based on a comprehensive and first-hand knowledge of his father’s affairs.  On probing this proposition, however, it transpires that what the Case Guardian intended to convey was that he did extensive inquiry based on a paper trail that he contended gave him “extensive knowledge”.  He also contended, and this is not disputed, that he spent a lot of time with his father.  The Case Guardian eventually conceded that his knowledge was not “first hand”.  He agreed that he was not personally present for any significant period of time during the relationship.  Whilst he agreed that the relationship between his father and the Wife was a significant one, it was patently obvious in his evidence that he had little time for his father’s partner, and included evidence in his Affidavit that had the effect of ridiculing her, even if it was not his intention.

24.Thus, the opening problem with the Case Guardian’s evidence is that it is not “first hand”, as he contends, and the extent to which it is “comprehensive” depends upon the nature and extent of the inquiries that he made and the paper trail that was available.  Moreover, the Case Guardian’s evidence is no less partisan than his father’s evidence would have been. 

25.To the extent that the Case Guardian asserted that his father was in control of decisions made in the litigation, and thus, that the evidence led and the litigation strategy pursued was, in effect, on his father’s instructions, the Court has significant reservations about this.  It must be remembered, it is the Husband’s case that emphasised that he is globally aphasic, meaning that his speech is limited to “yes” and “no” and relies on gestures and body language to communicate.  It is hard to understand how some of the litigation decisions made (an example of which will be given below) could possibly have been made on the basis contended for by the Case Guardian, given the obvious limitations in the Husband’s ability to communicate.  If the only answer to a question is “yes” or “no”, the focus turns to the question asked, not the answer given.  No evidence was adduced by the Case Guardian about the questions he asked, though the Court obviously recognises the problems that would have been encountered with the hearsay rule in any event.  But this merely demonstrates the problems inherent in the Husband’s case, which appears not to have been the subject of any detailed consideration or reality testing until very late in the proceedings, and probably only when Counsel was briefed.

26.Of concern to the Court is a representation made in the Husband’s case that the Case Guardian had spoken to him on the morning of the hearing.  The Husband participated in the hearing by telephone from his high-care facility.  In cross-examination the Case Guardian explained that what in fact happened is not that he spoke to his father on the telephone, but that he spoke to his wife, who was with his father.  Given the communication issues with the Husband, this did very little to reassure the Court about the Case Guardian’s evidence.  It also adds further doubt about the Case Guardian’s assertion that, somehow, despite his father’s disability, his father was “still calling the shots”.  This was in response to a series of questions as to how and why the Husband had spent, or was committed to spend, $80,000 in legal fees, in circumstances where, in the Husband’s case, it was contended he had unmet needs which could not be funded.  Indeed, it was put to the Case Guardian, in effect, that he would rather spend money on lawyers than pay money to the Wife.  The Case Guardian responded to the effect, “my father made the final decision.”  When confronted with the contradiction in his case that his father needed money, for example, for medicals and therapy, but was spending it on legal bills, the Case Guardian’s response was, in effect, “we were forced.” 

27.Regrettably, quite apart from the issues of the weight to be given to the Case Guardian’s evidence on contentious matters, the Court believes there is reason to be concerned about whether the Case Guardian has his own agenda in these proceedings.  It is hard to accept that, in the circumstances of this case, a dispute about $100,000 could be allowed to consume $80,000 in legal fees on the Husband’s part alone. 

28.But there were further concerns about the Case Guardian’s evidence.  The Court does not accept that he gave a satisfactory explanation as to why funds that were ordered, by consent, to be released in July and paid to the Husband’s high care facility, was not in fact paid until 10 November 2015, the day before the final hearing.  The concern is accentuated when one considers that the Orders in relation to the $280,000 in question were made in circumstances of urgency and need contended on behalf of the Husband.

29.One important issue that the Court needed to know about was the precise financial detail of the arrangements for the Husband’s high-care accommodation.  It was incumbent on the Case Guardian to present this information clearly and objectively.  He has not done so.  His Affidavit was insufficient in this regard.  It was only in cross-examination, and the tender of the relevant contractual documents with (omitted) Nursing Home, that the actual situation became clearer.

30.The Court reluctantly concludes, therefore, that the Case Guardian’s evidence needs to be very carefully scrutinised where it is put in contention by the Wife, and where it cannot otherwise be corroborated by other documents. 

31.The difficulty for the Court does not end there, however.  Whilst the Wife did not, and indeed could not, put in contention the major financial transactions that are referred to in the background facts, and whilst the Wife, to her credit, acknowledges that the overwhelming financial contribution was made by the Husband, the rest of her evidence is, regrettably, highly problematic.  She was often evasive in cross-examination.  She was often unresponsive.  She changed her evidence when it seemed to have occurred to her that she had said something different on an earlier occasion, or where it was apparent that her evidence was plainly incorrect.  She came across as an unconvincing opportunist at times, seeking to maximise the financial benefit that she could derive from the relationship.  The Court will set out a number of examples from the Wife’s evidence to explain why it has, regrettably, formed this view about the Wife’s evidence, though it must be recognised that the list is by no means comprehensive. 

32.There is an inconsistency between the Wife’s Affidavit of 2 September 2014 and her trial Affidavit of 6 November 2015 about the rental she was paying at the time of cohabitation.  The issue was significant because it went to whether the Wife had capacity to make financial contributions in the early stages of the relationship, when her only income was a Centrelink pension, which, on her initial evidence, would be almost wholly consumed by rental.  The inference that the Court draws is that the Wife, having read the Husband’s evidence denying her assertions about financial contributions at that time, changed her evidence accordingly. 

33.Whilst the Court has already noted that nothing really turns on the precise date when cohabitation commenced, it is still an element in the Court’s concerns about the Wife’s credibility.  Her trial Affidavit contains the assertion that she met the Husband in 2002 and started a relationship towards the end of 2002.  The obvious problem with this assertion is that it cut across her contention that she contributed to the Husband’s property at a time when they were only seeing each other and not living together.  When confronted with this problem in cross-examination, she changed her evidence to say that she in fact met the Husband in 2001.  Again, the emphasis is not on the relevant dates, but rather, on the fluidity of the Wife’s evidence.

34.The Wife contended that she purchased the blinds for the property that the Husband developed, paying $4,011.  She relied on an invoice evidencing the payment.  The only problem is that the invoice was in the Husband’s name, not hers.  The Husband had contended that she did not have, and indeed at no relevant time had, the financial capacity to make any such payment.  Moreover, the cross-examination of the Wife on her only savings account passbook was plainly inconsistent with the assertion that she had paid this invoice.  She then changed her evidence to say that in fact the blinds had been purchased by the Husband on his Visa card and that she then gave him cash amounts to repay him.The Court does not accept this evidence.

35.In her evidence, the Wife relies on a summary of withdrawals from her bank account that were given to the Husband in cash.  To be fair, the document is not intended to be any more than an aide-mémoire, but it clearly represents the Wife’s contention about these transactions.  The difficulty with the document is that even minimalist cross-examination, based on a comparison to the passbook, showed it to be quite clearly incorrect. 

36.A major issue in cross-examination was the Wife’s withdrawal of $47,425.  She says that the withdrawal was made with the consent of the Husband following a conversation at the care facility that he was initially placed in, in Property N.  There are a number of problems with this evidence.  There seems little doubt that, as a result of his stroke the Husband could not speak, so one wonders what sort of conversation occurred with him?  In any event, the facts are that the funds were withdrawn on 27 August 2014 when the Husband was in hospital, not at the care facility.  The Wife, in cross-examination, contended that the purpose of the withdrawal was to fund renovations to the home.  However, she agreed that at that time she knew that, as a result of the Husband’s stroke, he would not be coming home.  In all likelihood, the real purpose of the withdrawal is in fact adverted to at paragraph 93 of her Affidavit, and that is that she sought advice about her likely entitlement on breakdown of the relationship, and then, in effect, conducted a pre-emptive strike. 

37.The cross-examination of the Wife as to her medical records with the (omitted) Medical Centre reflected very poorly on her.  Having regard to the chronology of her attendances, she was inconsistent in her representation to others about the state of her relationship with the Husband, which representations were inconsistent with her sworn evidence in this case, and also inconsistent with the evidence she gave in cross-examination. 

38.The totality of these issues, and indeed other matters not specifically articulated, leave the Court to have quite serious concerns about the Wife’s evidence in relation to contentious matters.  Fortunately, the contentious matters remain of relatively narrow ambit and the Court can navigate through the shoals of uncertainty in the evidence on both the Husband and the Wife’s case by focusing on the uncontested facts. 

Balance sheet issues

39.During the second day of the hearing the following joint balance sheet was prepared and provided to the court:

Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
ASSETS
1.	J	RMB Trust monies	$     98,765.39	$     98,765.39
2.	H	Ford falcon (omitted) -unregistered	$        1,000	$          500.00
3.	J	Household furniture and appliances	$         5,000	$     25,000.00
4.	H	(omitted) bank (omitted)	$         308.23	$          308.23
5.	H	(omitted) savings account	$       1,498.61	$       1,498.61
6.	H	Retirement bond – (omitted)	$     271,134.12	$     271,134.12
7.	W	(omitted) Bank (omitted)	$    6,873	$         6,873
8.	W	Safety Deposit box	$    40,000	$        40,000

Total $     424,579.35 $     444,079.35

ADDBACKS
9.	W	Legal Fees Paid	$     24,644	$     24,644
10.	H	Legal Fee Paid	$    42,219.75	$        42,219.75
11.	W	Total funds received by respondent for personal expenses	$	$       9,748.39
12.	W	Bank cheque	$    47,275.00	$     47,275.00

Total	$     123,414.00	$     133,162.39
TOTAL	Assets and Addbacks	$

LIABILITIES
13.	H	Outstanding legal fees- Solicitors	$     36,592.60	$     36,592.60
14.	H	Anticipated trial legal fees- Counsel and Solicitor	$     15,950.00	$     15,950.00
15.	W	Outstanding Legal Fees owing to Solicitor	$       7,884.81	$        7884.81
16.	W	Anticipated trial fees for Counsel and Solicitor	$       9,800.00	$       9,800.00
17.	H	Outstanding (omitted) Nursing Home	$       6,299.88	$      6,299.88

Total $     76,527.29 $     76,527.29

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
18.	$	$
19.	$	$
20.	$	$
21.	$	$
22.	$	$

Total $                  0 $                  0

FINANCIAL RESOURCES
Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
23.	$	$
24.	$	$

Total $                  0 $                  0

40.There are a number of issues in respect of which adjudication is required. 

41.Item 2 is the Husband’s Ford Falcon.  There was no expert evidence about this, notwithstanding directions specifically made about the determination of valuation disputes.  The Husband’s figure of $500 will be accepted as an admission against interest. 

42.Item 3 represents the purported value of joint household furniture and appliances.  There is a significant disparity between the figures.  The Husband’s contended figure appears to be loosely based on purchase price and thus could not possibly be reflective of current market value.  The Wife’s figure appears to be an estimate.  Moreover, it is not clear what precisely is contemplated by the terminology, ‘household furniture and appliances’.  It is also not clear who has what.  In many ways this is unsatisfactory.  All the Court can do in the circumstances is to treat these items as having an unknown value, and leave the items where they are, that is, in the possession or control of whoever happens to have them at the present time.  It was incumbent on the parties to adduce better and further evidence about this.  They have failed to do so. 

43.In relation to items 7 and 8, on the Wife’s behalf the concession was made in relation to item 8 only that the $40,000 in her possession or control is what remains from the $47,250 that she withdrew from the Husband’s bank account.  Thus, item 7, her own savings, are funds quite properly included in the asset pool in circumstances where the Court finds that during this relationship the Wife managed to save a substantial part of her Centrelink benefits, whilst in effect living off the Husband’s Centrelink benefits. 

44.In relation to items 9 and 10, both parties seek to add back legal fees they have actually paid.  Of concern to the Court is the obvious disproportion (a matter in respect of which observation has already been made) and the unfair impact of adding back legal fees in circumstances where there is such a disproportion.  On behalf of the Husband, the contention is that the fees were reasonably incurred.  That is a highly subjective judgment and one not necessarily shared by this Court.  The question of the reasonableness of legal fees may well be left to be determined during any subsequent costs application.  For the Wife, it is contended that there is no principled reason why she should be compelled to contribute “to the folly of those legal costs”, as Counsel submitted.  The Court agrees.  Any adjustment in respect of legal costs is best left for any subsequent application in this regard.  Items 9 and 10 should read nil. 

45.Item 11 appears to relate to monies ($9,748.39) that the Wife used, forming part of the $47,275 withdrawal, and which was used in Guardianship Tribunal proceedings between the Wife and the Case Guardian.  Whilst the Wife agrees that monies were in fact used to fund the Guardianship Tribunal proceedings, she does not agree that it was the sum of $9,748.39.  She agrees, in closing submissions, that she in fact spent $5,447.81 in representation for those proceedings.  The Court considers the Wife’s expenditure of $5,447.81 firstly, to be part of the $47,275 she withdrew from the Husband’s account and, secondly, to be a premature distribution of joint assets.  Any proceedings between the Wife and the Case Guardian relating to guardianship matters of the Husband are, in this Court’s view, unrelated to the present proceedings.  The Guardianship Tribunal proceedings may well help to understand the enmity that exists between the Case Guardian and the Wife, but it is no basis for a finding that it was somehow reasonably incurred.  Item 11 should be treated as an add-back received by the Wife in the sum of $5,447.81, but it already forms part of items 7 and 8.  Item 11 should read nil. 

46.Item 12 is the $47,275 withdrawal.  Having regard to the Court’s findings in relation to items 8 and 11, it will be duplication to leave this in the balance sheet.  Item 12 should read nil.

47.In closing submissions, Counsel agreed that items 13 to 16 inclusive ought not appear on the balance sheet for adjustment purposes.  The amounts in question have not been paid to date, so assets have not been depleted.  Items 13 to 16 inclusive are for noting by the Court only.  Items 13 to 16 in the final balance sheet, however, will read nil, as the presence of these figures might otherwise distort the ultimate assessment.

48.Item 17 is in dispute.  There is no dispute that (omitted), the Husband’s high-care accommodation provider, has issued an invoice.  The Case Guardian submits that it relates to the cost of care for the Husband, thus is a debt due by him and it ought, in the circumstances, be taken into account in the property adjustment.  The Wife’s difficulty is the lack of clarity in relation to what, precisely, the Husband’s high-care arrangements are, and the risk that it detracts from item 6, being the retirement bond he in fact paid.  The Court chooses not to include this liability in the balance sheet because it is clearly a post-separation personal liability of the Husband.  Exhibit A1, the (omitted) invoice, indicates that it includes, for example, an accommodation charge for November 2015, as well as a basic daily fee for that period.  Whilst recognising that the matter is certainly not free from doubt, the impression formed from the Case Guardian’s own evidence is that the care facility’s ongoing daily costs (as opposed to, for example, medication, therapy, etc.) is paid from the Husband’s Centrelink benefits.  In those circumstances, therefore, it would be no more appropriate to include this post-separation liability on the balance sheet than it would be to, for example, include any rental arrears that the Wife may have accrued in the post-separation period.  Accordingly, item 17 will read nil. 

49.Accordingly, the Court finds the balance sheet to be as follows:

Ownership		Description	Value
ASSETS
1.	J	RMB trust monies	$ 98,765.39
2.	H	Ford Falcon	$ 500.00
4.	H	(omitted) Bank acc. (omitted)	$ 308.23
5.	H	(omitted) savings account	$ 1,498.61
6.	H	Retirement Bond (omitted)  acc.(omitted)	$ 271, 134.12
7.	W	(omitted) Bank acc (omitted)	$ 6,873.00
8.	W	Safety Deposit Box	$ 40,000.00
Total		$ 419 079.35

Ownership		Description	Value
ADDBACKS
9.	W	Legal fees paid	$             NIL
10.	H	Legal fees paid	$             NIL
11.	W	Total funds received by respondent for personal expenses	$              NIL
12.	W	Bank cheque	$              NIL
Total		$               NIL

Ownership		Description	Value
LIABILITIES
13.	H	Outstanding legal fees	$             NIL
14.	H	Anticipated trial legal fees	$             NIL
15.	W	Outstanding legal fees	$             NIL
16.	W	Anticipated trial fees	$             NIL
17.	H	Outstanding (omitted) Nursing Home	$             NIL
Total		$             NIL

Assessment of contribution

50.The Wife quite properly concedes that the Husband made the major financial contribution to the parties’ property.  That is unquestionably the case.  Whatever the Husband’s precise financial interest was in the joint venture with his former partner, the fact is that, within two to three years, the villa was sold for $475,000.  What is not clear, however, is whether the property was encumbered.  In any event, shortly thereafter the Husband purchased the Property C property for $305,000.  There is no suggestion that this property was encumbered.  It was then sold, after it had been transferred into a joint tenancy, for $460,000, creating a substantial profit.  The Property N property was then purchased for $380,000 and eventually sold.  What happened to the difference between the sale proceeds of the Property C property and the purchase price of the Property N property is unknown.

51.At all relevant times the Wife’s income was Centrelink benefits.  Her capacity to make financial contributions was limited.  Nonetheless, the strong impression formed from the evidence is that the Wife was able to save such Centrelink benefits as she in fact received.  The only evidence of the Wife’s financial contribution that the Court is prepared to accept, based on concessions made by the Husband through his case guardian, is that there were substantial periods of time when the Wife paid a contribution of $50 per week towards “board and lodging” (terminology the Case Guardian uses, and not the Court’s choice of words) and a further sum of $6,200 in July 2013. 

52.The Court does not accept, however, the Wife’s evidence that she made any, or any significant contribution in a financial sense, to the acquisition of the properties or to their improvement.  She was simply not in a position to do so.  Her own financial records are inconsistent with this assertion.  The Court does not accept the Wife’s Counsel’s contention that the profit made on the sale of the Property C property “likely reflected the joint renovation efforts of the parties”.  To the extent that the Wife asserts that in her evidence, the Court rejects the same.  Quite apart from the Wife being an unreliable historian, the nature and extent of her disabilities makes her claim quite implausible. 

53.However, during the relationship, there probably was a pooling of financial resources in the sense that, more likely than not, they spent and lived off his income and managed to save her income, albeit both from Centrelink benefits.  Despite the very unhappy end of this relationship, theirs was quite a normal relationship in other respects.  There was a pooling of income, even though the income was not necessarily co-mingled, and expenses were paid.

54.The Husband and the Wife in almost every respect give evidence of living as any other couple and providing mutual support to the other, financially and non-financially, direct and indirect, and as homemakers.  They both had serious health issues.  The Husband spent times in hospital.  The Wife had her own medical issues.  It is probably the case that the Wife did most of the domestic tasks, though the Court cannot rule out the Wife’s evidence in this regard being exaggerated.

55.When it comes down to the task of assessing contributions, however, it is hard to escape the conclusion, in global terms, that the Wife’s financial contribution was minimal.  Her non-financial contribution was, however, significant. 

56.Doing the best the Court can in circumstances where such difficulties exist in relation to the evidence, the Court assesses the Wife’s contribution, direct and indirect, financial and non-financial, and as homemaker at 25 per cent.

Assessment of future needs

57.Both Counsel conceded that in a case like this one where the pool of property is small, matters relating to the prospective needs of the parties concerned are very important.  This is more acutely the case having regard to the ages of the Husband and the Wife. 

58.The Husband contended for an adjustment in his favour of 5 per cent.  It was not clear from the Wife’s case what she contended the adjustment to be. 

59.He is 74, she is 61.  Neither will ever work again.  Both have been dependent on Centrelink benefits for a substantial period, and will remain so for the rest of their lives. 

60.The Husband’s disability has been referred to in these reasons several times.  He is in high-level, full-time care.  No one contended that this might change for the better in the future.

61.Whilst the Wife’s health issues certainly prevent her from working again, her greatest need seems to be to find suitable accommodation and a measure of financial security in her older years.  The Husband did not dispute that the Wife suffers chronic fatigue syndrome and osteoarthritis.  The Wife’s contention about whether she suffers from Lupus is by no means clear on the evidence. 

62.The significant difference between the parties in this case, however, in terms of their future needs is this: whereas the Wife has nothing in place to secure the provision of her future accommodation, and the meeting of such health needs as she might have into the future, the Husband does.

63.What evidence there is about the arrangement that the Husband has with (omitted) suggests that the cash deposit already paid to them, whatever it might properly be called, secures his accommodation.  Whether he pays anything on top of that, for example, a basic daily fee or accommodation charge, appears not to matter.  In the Husband’s Counsel’s written submissions, the concession was made that the Case Guardian’s evidence was that the Husband’s income was sufficient to meet his current expenses.

64.In short, and whatever the precise details of his arrangement with his high-care accommodation provider, whilst the Husband’s needs are greater, at least in a financial sense, they are being met.  Indeed, the reasonable inference to be drawn from the evidence is that the arrangement that he has in place now will subsist for the rest of his life. 

65.The situation for the Wife is precisely the opposite.  She is Centrelink dependent.  All she will have to provide for her financial future is what she receives out of these proceedings.

66.In all the circumstances a 2.5 per cent adjustment in her favour is appropriate.

Just and equitable

67.Having regard to the assessment set out above, the Wife would be entitled to 27.5 per cent of the asset pool (the asset pool being $419,079.35, rounded up to $419,080), as found by the Court.  This amounts to $115,247.  The Husband would be entitled to 72.5 per cent, or $303,833. 

68.In establishing the precise amount that the Wife is entitled to, regard must be had to those items that she already has, or is deemed to have.  These items consist of items 7 and 8 of the balance sheet, which totals $46,873, thus, the difference payable to her is $68,374. 

69.Of course, the only source of payment is the moneys held in the RMB trust account, so in effect, the order will be that she receives $68,374 from that account, that the balance be paid to the Husband and each otherwise retain those items which they have in their possession or control.

70.The Court does not ignore the reality that both parties, but particularly the Husband, have substantial legal fees unpaid.  The Court does not ignore this, but simply declines to take it into account on the basis that, to do so, would reward litigious behaviour.  Both parties have the right to apply for costs.  Indeed, if any costs application is to be made, it should proceed by way of written submissions.  The applicant for costs should file written submissions not exceeding 500 words within 14 days of the date of these reasons.  The party opposing costs then has 14 days to respond.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:     24 March 2016