Galvan and Galvan and Ors

[2015] FamCA 1092

FAMILY COURT OF AUSTRALIA

GALVAN & GALVAN AND ORS [2015] FamCA 1092

FAMILY LAW – PROPERTY – where the property of the parties was difficult to determine – where determining who owned what property depended on onus of proof – where property includes trust property – where distributions from a discretionary trust were made - where property is held by third parties – where the equities are imprecise – where the presumption of advancement may apply – where resulting trusts were found.
FAMILY LAW – PROPERTY – where unsecured liabilities exceed the value of assets – where one party to proceedings was held to be solely responsible for liabilities.

Family Law Act 1975 (Cth) ss 75(2)(o), 79, 79(2), 85A, 90AE, 90AE(1), 90AE(2), 90MT(1), 106B

Baumgartner v Baumgartner (1987) 164 CLR 137
Biltoft and Biltoft [1995] FamCA 45
Chorn and Hopkins [2004] FamCA 633
Coghlan and Coghlan [2005] FamCA 429
Cohen v Sellar [1926] 1 KB 236
Commissioner of Taxation and Worsnop and Anor (2009) FamCAFC 4
Damiani & Damiani [2012] FamCA 535
Davies v Messner [1975] 12 SASR 333
Kennon & Kennon [1997] FamCA 27
Kennon v Spry [2008] FLC 93-388
McGuire & McGuire (No 2) [2012] FamCAFC 90
Muschinski v Dodds (1985) 160 CLR 583
Stanford & Stanford [2012] FamCAFC 1
Weir & Weir [1993] FLC 92-338

APPLICANT: Mr Galvan Snr

RESPONDENT:	Ms Galvan Snr
SECOND AND THIRD RESPONDENTS	Ms Galvan Jnr and Mr Galvan Jnr
FILE NUMBER:	CAC	31	of		2010

DATE DELIVERED: 9 December 2015

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: 14-16 November 2011, 27-29 August 2012, 20-24 February 2012, 7 December 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kumar

COUNSEL FOR THE RESPONDENT: Mr Howard

SOLICITOR FOR THE RESPONDENT:		Dobinson Davey Clifford Simpson
COUNSEL FOR THE SECOND AND THIRD RESPONDENTS:		Mr de Robillard

Orders

1. Pursuant to s 106B of the Family Law Act 1975 the distributions made by Galvan Pty Limited as Trustee for the G Family Trust in respect of the sale proceeds of F Street, Suburb H in the Australian Capital Territory are set aside. 

2. That within 60 days the Applicant pay to the Respondent the sum of $105,000.

3. That pursuant to section 90MT(1)(a) whenever a splittable payment becomes payable in respect of the interest of Mr Galvan Snr in the Public Sector Superannuation Scheme (member no: …)

   (a)       Ms Galvan Snr is entitled to be paid $37,000;

   (b)There is a corresponding reduction in the entitlement of Mr Galvan Snr.

4. (a)      That the operative time for Order 2 is four (4) days after service of a copy of the final Orders on the Trustee.

   (b)Noting that due to the circumstances of this matter the Trustee of the Public Sector Superannuation Scheme has not been accorded procedural fairness in accordance with s 90MZD, the Trustee has liberty to apply on short notice in relation to this matter once these orders have been served. 

5. That unless otherwise specified in these Orders, each party be and is solely entitled as against the other party to all property (including choses in action) and superannuation in possession or control of such party as the date of these Orders.

6. All reserved applications for costs other than the costs of these proceedings are dismissed. 

7. All material produced subpoena which did not become the subject of exhibits will be returned by the Court to the persons producing it as soon as practicable.

8. Any material produced subpoena which became an exhibit will be returned by the Court at the expiration of the appeal period to the person producing it.  Any material produced by a party which became the subject of an exhibit will be returned by the Court to the party at the expiration of the appeal period.

9. That the matter be removed from the pending cases list.

It is declared that:

1. The Second Respondent, Ms Galvan Jnr, holds such interest as she may have in the property known as I Street, Suburb J (“Suburb J”) as trustee for the Applicant, Mr Galvan Snr, in the sum of $24,036 and otherwise for herself. 

2. The Third Respondent, Mr Galvan Jnr, holds such interest as he may have in the property known as K Street, Suburb L (“K Street”) as trustee for the Applicant, Mr Galvan Snr, in the sum of $23,399 and otherwise for himself. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Galvan & Galvan and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 31 of 2010

Mr Galvan Snr

Applicant

And

Ms Galvan Snr

Respondent

And

Ms Galvan Jnr
Second Respondent

And

Mr Galvan Jnr
Third Respondent

REASONS FOR JUDGMENT

Introductory remarks

1. May I begin by tendering my sincere apologies to the parties in this matter for the time it has taken me to deliver my reasons for judgment. 

2. This is a matter which has caused me much frustration and a high degree of sadness.  The frustration has been mostly brought about by the massive volume of material that has been put before the Court when only part of it has found its way ultimately into the submissions of the parties or properly into the evidence before the Court.  It is obvious that the parties have expended a large amount of money in legal fees but in the end as will appear from the judgment which follows, the property of the parties is within very narrow compass, the debts at least of Mr Galvan are quite substantial and the animosity between the Applicant and the First Respondent has fuelled a conflict which in the end was futile. 

3. As will be seen later in these reasons, the credibility of the parties has been a matter which has affected the outcome to some extent.  My reasons about this issue are set out more fully hereafter.

4. In property matters before this Court, in many cases, there is little disagreement about the nature and extent of the property to be divided between the parties. There are disagreements about the proportions in which the properties should be divided in all matters. This has been no exception. However, in this case the most significant difficulty has been in ascertaining what is within the terms of s 79(1) of the Family Law Act1975 (Cth) (“The Act”) “the property of the parties to the marriage or either of them”. 

5. Accordingly, this judgment begins with a consideration of what might be the property of the parties, including the interests that either, and in particular the Applicant (Mr Galvan), might have in a number of properties and in relation to the Galvan Family Trust.

6. The sad fact of the matter is that although Mr Galvan puts himself forward as an entrepreneur and a person who is skilled and skilful in investment in property, the proceeds of his endeavours have been negligible. This is particularly so when his liabilities for taxation - at the time of the trial unpaid - are taken into account. 

7. The Applicant has been deeply resentful of the First Respondent.  It is obvious that he was determined to make provision for his two children from his previous marriage.  As I comment later, there is nothing wrong with that as such.  However, I am satisfied that in pursuit of that objective he set out to and did, apply property which might have been applied for the benefit of both him and the First Respondent in ways which were designed to remove her opportunity to make any claims upon it.  He sought advice from his accountant about that and his dealings after that point followed a pattern which was consistent with the desire to achieve that objective. 

8. It has to be said at the same time however, that the First Respondent either could not, or would not, stand beside the Applicant in his endeavours.  In my opinion, it was a bit of both.  It is obvious from the evidence of all of the parties that it was entirely reasonable for the First Respondent to feel that both the Applicant and the Second and Third Respondents were in some ways in league against her.  At the very least they were in league together and she was excluded from that league. I acknowledge that the husband claimed that he had offered participation to the wife.  He may even have said the words.  However, the reality was different and accordingly in my opinion the First Respondent’s capacity to participate in the entrepreneurial activities was limited.

9. In this matter as appears hereafter, in determining what were the interests of Mr Galvan, senior, in various properties, there was an intersection of the law of equity, property law, (potentially) tax law and of course family law.  It is hard in some of the transactions to determine whether the Applicant was tricky and devious or simply naȉve. Shares in the properties were (or may have been) adjusted in some cases down to one per cent in favour of Mr Galvan.  It is hard to imagine that this was done other than to attempt to remove property from the purview of this Court. In addition, the husband’s record keeping and attention to detail was, to put it at its most kindly, vague and sporadic.  He was keen to blame the First Respondent for retaining from him some of the records of the various transactions.  This was a hollow complaint.  The Applicant did have access to a relevant filing cabinet, perhaps not as soon as he liked, and perhaps not when he first demanded it. But nevertheless access was afforded but not in my opinion, significantly utilised by him. 

10. In the end, the submissions by his counsel were replete with assertions rather than summaries of evidence; and denials in many cases without giving reasons for the denials. 

11. Again, to be fair, it should be said that the very carefully prepared submissions of Mr Howard, on behalf of the First Respondent, also contained a number of assertions as opposed to statements of evidence. 

12. In the context of assertion and counter-assertion, equity and counter-claim for equity, a paper trail of meagre and insubstantial proportions and the outright omission of evidence which in some cases could be vital (for example to establish a presumption of advancement), definitive determinations have been difficult to reach. 

13. In the end, I have done the best I can - with what I have.  What I have, reveals a limited amount of property and substantial debt which in the circumstances I have determined should remain with Mr Galvan for the reasons set out hereafter.

14. The sad and frustrating result of these extensive (and expensive) proceedings will mean that potentially the lawyers get paid and little else occurs.  That in my opinion, is a tragedy.

Procedural History

1. This is a matter concerning the division of property between parties who were married for about nine years from 2000 to June 2009. It was a second marriage for both parties, and both had children from their previous relationships. The three children are now adults, and the husband’s two children are the Second and Third Respondents in this matter. The husband commenced proceedings in the Federal Magistrates Court (as it then was) on 11 January 2010 seeking a division of property.

The setting for consideration of the property dispute between the parties. 

1. Section 79(2) of the Act states that “The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.”

2. Section 79(4) of the Act provides what factors are to be considered if an order, if any, is to be made. This incorporates, (s 79(4)(e)) the matters referred to in s 75(2) so far as they are relevant. The factors set out in s 75(2) include a number of matters relating to the physical and financial circumstances of the parties.

3. The first step to be undertaken by a Judge in considering the division of property between parties and resolving matters with third parties is to determine what the property of the parties (and of each of them) might be and / or, the interests of either party in any other property whether owned at law by either of them or in which they might have an equitable (beneficial) interest with the other party - or any other person. 

4. Notwithstanding the time taken during the trial of this matter and the substantial quantities of documents produced by each of the parties (including the children of Mr Galvan’s first marriage) much of the financial history of the parties remains uncertain and the resolution of the uncertainty has been made more difficult by the unsatisfactory nature of some of the evidence from each of the principal parties about a number of matters. 

Credibility

1. It is not my custom to make general findings about the credibility of parties.  I accept that on occasion some parties may either exaggerate or even give inaccurate evidence.  They may also, notwithstanding that, give accurate evidence about other matters.  An example of that in this case is that while I accept generally that the wife has been straightforward in the evidence that she has given, the evidence she gave about her participation in the post office business of Mr Galvan (or his company) was in my opinion vague and inaccurate and I do not accept that her involvement was as extensive as she has made out. 

2. On the other hand, I found the evidence of the husband unsatisfactory at almost every level.  I find that his credibility was such that without independent corroboration I would not rely upon his sworn testimony on any important issue.  This comes about (as will appear subsequently) from the evasive and unsatisfactory nature of some of his answers but also because of his demeanour and his failure to provide evidence about certain key matters which he might have been expected to have dealt with.

3. My task in concluding what property is available for distribution has been made much more difficult because of the unsatisfactory nature of the husband’s evidence and also a failure on his part, and to some extent on the part of his two children who were parties to these proceedings, to provide accurate evidence about a number of the transactions and the intentions of the parties involved in them. 

Preliminary comment on disclosure

1. I digress to indicate that I do not accept the argument advanced by the husband and his counsel that the wife had access to all the relevant papers and that this then in some way relieved the husband from his obligation to make a full and frank disclosure.  I accept that the wife provided access to the husband to the filing cabinet in which all the relevant documents were kept and in any event it was not the documents alone which were necessary for full disclosure.  Information that the husband had or ought to have had was not revealed and is reflected in answers such as “I will have to take that on notice”. 

What the husband intended

1. I accept, in general terms, that relatively early in the course of the relationship, the husband decided to seek professional advice about how he might protect “his” assets from the wife.  He asserts that he did not carry out the advice he received but I accept, on the basis of all of the evidence, that he did embark upon a campaign which was designed to exclude the wife from his activities which were (again I accept) designed to benefit his children from his first marriage.  That is not to say that there was anything wrong with his having such an objective so far as his children were concerned.  However, although he denied that his activities were designed to exclude his wife, it is hard to avoid the conclusion that was a consequence which he accepted would occur even if it was not the primary intended consequence. 

2. Ironically, it would seem as a result of either poor instructions from the husband to his lawyers or alternatively poor drafting on the part of the lawyers, the family trust which he set up (in my opinion, to exclude the wife) in fact included her because of the drafting of various definitions.  It would appear that even at a late stage in the proceedings, the husband’s current advisers were of the opinion that the wife was not a beneficiary of the trust.  This would tend to corroborate the position that it was intended that she would not be a beneficiary of the trust.  It appears from a careful examination of the material tendered and the submissions made, that the husband engaged in a series of property transactions either alone or through the trust, or with the cooperation of his children, essentially to provide financial benefit to the children or himself to the exclusion of the wife. 

The property of the parties

1. As the date for delivery of judgment approached I invited the parties to reopen or to provide further information about values if they wanted to do so.

2. Each of the Second and Third Respondents filed valuation material and the Applicant filed a further affidavit which dealt with the V apartment, the distribution of the proceeds of the sale of the D Street property, and his tax debt. The parties were offered the opportunity of cross-examining on any of the new material or of addressing me about it. Some cross-examination did take place and further addresses were made.  Taking account of these matters, together with all of the evidence I now move to set out the various matters in relation to the properties of the parties or their respective interests in them. 

The G family trust

1. One of the factors raised in the course of submissions related to the G Family Trust.  This Trust came into existence on 10 August 2006.  The Trust was caused to be set up by the husband.  A settlor – Mr M utilised Galvan Pty Limited as the Trustee of the Trust. 

Beneficiaries of the Trust

1. The provisions of the Trust Deed are somewhat convoluted but the schedule to the Deed of Settlement provides for two categories of Beneficiaries.  Under paragraph 6 of the Schedule, the Specified Beneficiaries were the husband and his two children by his previous marriage, Mr Galvan Jnr and Ms Galvan Jnr.

2. In paragraph 7 of the Schedule there is a category referred to as “The Additional Members of the Class of General Beneficiaries” which sets out a number of people who might be added to the list of Beneficiaries in different ways.  These include any Corporation or Trust of which any specified Beneficiary is a Shareholder or in which any Specified Beneficiary has an interest.  There is also a peculiar provision which provides that any person who has made a donation to any one or more of the Specified Beneficiaries may become a General Beneficiary and finally, any person who with the consent in writing of the Guardian, whom the Trustee may at any time nominate, may become an additional member. 

3. However, in the Settlement Deed itself, clause 1.11 defines General Beneficiaries in these terms

   … shall mean and include;

   1.11.1 The Specified Beneficiary or the Specified Beneficiaries…

   1.11.2 The parents grandparents brothers sisters spouses widows widowers children grandchildren uncles aunts and cousins of the Specified Beneficiary…

   1.11.3 The lineal descendants of the grandparents of the Specified Beneficiaries…

   1.11.4 [Trustees and Corporations Charities etc.]

4. The word ‘spouse’ is defined in clause 1.21 as follows

   “Spouse” in relation to a Beneficiary includes another person of a different or the same gender who, although not legally married to the Beneficiary, lives or formally lived with the Beneficiary on a bono fide domestic basis as a spouse or partner of the Beneficiary and the person does not cease being a “spouse” by a virtue of a change in his or her marital or social status. 

5. From the definition of spouse, it appears that notwithstanding the apparent purpose of the Trust - which I find was designed to shield the husband and his property from the wife - the wife was a General Beneficiary as a consequence of the application of clauses 1.21 and 1.11 of the General Trust deed.  The fact that the husband had obtained an order of divorce which was “stayed” and which has now become final does not affect her status as spouse within the definition of clause 1.21. 

Clawing back distributions

1. One submission made on behalf of the wife involved what amounted to the clawing back of distributions that had been made by the Trust in respect of the settlement of the purchase of N Street, Suburb O which occurred on 8 October 2007. 

2. The property, while initially purchased in the name of the husband’s father, was transferred before settlement to Galvan Pty Limited. 

3. The property was sold in 2009 with settlement occurring on 31 July 2009.  The balance payable after deduction of all expenses was $130,464.  At settlement this sum was paid to the husband’s son Mr Galvan Jnr. 

4. A unit was also bought at F Street, Suburb H in the Australian Capital Territory and contracts were exchanged on 6 November 2006.  This property was purchased in the name of Galvan Pty Limited as Trustee for the G Family Trust.  That property was sold without any prior notice to the wife on 23 May 2012 and subsequent to the settlement the husband purported to distribute the net proceeds to each of his two children Mr Galvan Jnr and Ms Galvan Jnr in the sums of $34,625 each and a sum of $33,625.47 to himself.  In all, an aggregate sum of $102,875.47.  They each received an equal share of the deposit adding another $31,500 to the total received. 

5. Those distributions might be queried on a number of bases.  First it was asserted during submissions by the wife’s counsel that there was impropriety on the part of the husband in the conduct of the affairs of the Trust.  In particular he failed as sole Guardian Appointer and Director of the Trustee Company[1] to consider the wife on the question of distribution. She was entitled to due consideration in the administration of the Trust. The information about the administration of the Trust (and the Trustee) were matters within (if not exclusively within) the knowledge of the husband.

   [1] It is noted that Mr Galvan Jnr Galvan became a Director and Shareholder of the company on 23 November 2005 and later ceased to be a Director on 10 August 2007.  Mr Galvan Jnr had ceased to be a Director prior to the time that either distribution in question occurred.

6. Submissions 63, 64, 65 and 66 on behalf of the husband make it clear that, from the husband’s point of view, he did not consider the wife was a beneficiary. Given that, it would appear that he thought that the Trust had effectively excluded her from any consideration or from any benefit in relation to the Trust Property. 

7. It is the assertion of counsel for the wife that the husband failed to take into account the possibility of a distribution to her.  Notwithstanding that it is difficult ordinarily for a party to assert that the other party failed to consider the interests of the first party in a distribution, because “consideration” is to some extent a subjective thing, in this matter I cannot but conclude that no consideration was given by the Applicant as Director of the Trustee Company to whether or not any distribution should be made in favour of the First Respondent.  It seems to be more likely than not that the Applicant did not understand that the First Respondent was a beneficiary of the Trust.  His duty as a Director and even more because he was Director of a Trustee Company was to understand who the Beneficiaries were and properly to give consideration to a distribution in favour of them.  His failure to get the appropriate advice and to have the appropriate understanding led to his failure to give due consideration. Although it has been said[2] that in effect the right to a due consideration is in fact in itself property.  It is for all practical purposes property without value.  Nevertheless, in the context of this matter the failure to give due consideration was an impropriety which could to be remedied in equity by the setting aside of the distributions. 

   [2] Kennon v Spry [2008] FLC 93-388

8. Two questions flow from that:

   1.Should such setting aside be done in respect of distributions that have already been made? 

   2.Are there any other factors in this matter which would suggest that one lot of distributions might be set aside rather than both. 

9. Whatever equitable remedy may exist in theory, in practice the remedies may be confined to those that are available under the FamilyLaw Act and I now turn to a consideration of those matters. 

Section 106B

1. One possibility in this regard is s 106B.

   (1)In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

2. The language in this section is somewhat difficult to interpret.  There are proceedings under this Act – which are the current proceedings – and what is being sought is that the disposition that had been made prior to the commencement of these proceedings by or on behalf of or by direction of Mr Galvan be set aside.   It depends a little on the interpretation to be afforded to the words “which is made or proposed to be made to defeat an existing or anticipated order in those proceedings”. 

3. There was no existing order at the time that the dispositions were made by the Trustee and there were no proceedings when the first distribution was made to Mr Galvan Jnr.  The subsequent distribution of $106,000 (approximately) occurred after the proceedings were commenced.  At the time when the second distribution was made, there was no nominated order sought in relation to the family trust and therefore on a narrow construction of the words “anticipated order” it might be said that the disposition did not defeat such an order.  Indeed the same might be said in relation to the second half of the section which reads “is likely to defeat any such order”.  Nevertheless, such an interpretation would imply too narrow a restriction in relation to what was designed as a remedial section of the Act.

4. In my opinion the first disposition cannot be caught by s 106B as there were no proceedings pending at the time and even if the proceedings might have been “anticipated” (perhaps “expected to occur”) there was no order which at that point had been articulated. The second disposition occurred after the proceedings commenced and while the disposition was not directly in contravention of any particular order that had been sought at the time, it is open to the Court to set aside that disposition if it were considered to be appropriate to do so because such an action might properly be categorised as having effect to defeat a reasonably foreseeable order in the proceedings.

5. The setting aside of the distribution to the two Galvan children and to Mr Galvan, if it occurred, by my order, would generate a debt by each of them to the Trust.

6. Even so, even if I were to take that step, it then remains an open question about whether I could, and then, whether I should, make an order requiring the husband to act in his capacity as Director of the Trustee Company to make a distribution under the Trust in favour of the wife of some or all of the amount that may then be generated in the Trust property.

7. The two sections which may provide a basis for making such an order under the Act are s 90AE and s 85A.

Section 90AE

1. First, under Part VIIIAA of the Act, s 90AE, on the assumption that ss 90AE(1) and 90AE(2) are disjunctive there would appear to be a power under s 90AE(2)

   In proceedings under section 79… [to make an order that]:

   (b) alters the rights, liabilities or property interests of a third party in relation to the marriage.

2. In this regard if I were to consider making such an order it would be necessary to afford procedural fairness (in accordance with the section) to the Third Party.  Given the almost total coincidence between Mr Galvan and the Trustee Company and his governing roles in relation to the Trust it would be unreasonable to require the further delay in these proceedings to give formal notice of the proposed orders to the Company as Trustee.

3. Additionally, arguably as the transactions would affect the two children as well, in respect of the second disposition, the children as “Third Parties” might be required to be given notice.  Although they are Third Parties to the marriage they are actually parties to the proceedings and in such circumstances it would be an unreasonable burden to require again further notice of this transaction given that they were present or represented in relation to the evidence given before the Court. 

4. Before dealing specifically with any matter under s 79 it seems to me that it would not be just and equitable to make an order (based on the premise set out above that the money has been repaid to the Trust) that the whole of such money be paid to the wife. While I am not prepared to make an order that the wife made no contribution to the acquisition, conservation and maintenance of the husband’s property for reasons which I will set out in more detail in due course, it would not be fair to pay to her the whole of the money that would be repaid to the Trust. It is common ground that none of the money that went into the acquisition of the property referred to came from the wife and the interests of the children, both arising from their payment of funds and their continuing payment of money need to be taken into account.

5. In the context of this matter, although the pool of property is limited, I would not be prepared to exercise a sequence of discretions such as is outlined above on the proposition that I might make such a distribution from the Trust in favour of the wife. The exercise requires consideration and balancing of competing interests. While I have sympathy for the wife’s position, I am obliged also to take into account the proper interests of the Second and Third Respondents.

Section 85A

1. The other section that I might otherwise rely upon if the money were repaid, as a basis for making an order for payment out to the wife is s 85A of the Act.

   Ante-nuptial and post-nuptial settlements

   (1) The court may, in proceedings under this Act, make such order as the court considers just and equitable with respect to the application, for the benefit of all or any of the parties to, and the children of, the marriage, of the whole or part of property dealt with by ante-nuptial or post-nuptial settlements made in relation to the marriage.

   (2) In considering what order (if any) should be made under subsection (1), the court shall take into account the matters referred to in subsection 79(4) so far as they are relevant.

   (3) A court cannot make an order under this section in respect of matters that are included in a financial agreement.

2. This section may well provide a basis for interference with the Trust if it were considered to be appropriate to do so.[3] However, nothing in that section would persuade me that the conclusion that I have reached above in relation to the application of normal principles of trust law would be in any way different if I had instead proceeded pursuant to s 85A.

   [3] See the judgment of Justice Keifel J in Kennon v Spry and the commentary in this judgment hereafter.

3. I am still required only to make orders that are just and equitable.  For the reasons set out above, some of the orders I might make would not be just and equitable.

4. I am obliged to take into account the same matters as I might in relation to an order under s 79(4) of the Family Law Act 1975.

5. As Chief Justice French explained in Kennon v Spry[4] it appears that s 85A was inserted into the Act to enable a Court to interfere with a trust which might not otherwise have constituted property.

   [4] [2008] FLC 93-388, 83,035 [82].

6. For the reasons advanced by his Honour in Kennon v Spry as with Dr O in that matter, so with Mr Galvan in this, the ability to control the trust coupled with an ability to make a distribution as trustee in favour exclusively of himself would constitute a sufficient basis for deeming Mr Galvan’s interest as being property or perhaps more particularly constituting that interest as being “the property of the parties or either of them”. 

7. It would of course have been open to the husband to have made a distribution in favour only of himself (or for that matter in favour of the wife although that was far from his thoughts it seems) and to the extent that the Second and Third Respondents each has as a consequence of the distribution some $35,000 that may have put that money out of the immediate reach of the wife in these proceedings. 

8. The Trust’s funds may have been the husband’s property for these purposes but the distribution of part of it, if legitimate, is not necessarily invalidated by s 85A. The section may be evoked but its application in my opinion would, in the circumstances of this matter, not warrant the setting aside of the distributions to the children.

Sham Trust

1. I am not prepared on the evidence to hold that the Trust was sham although I accept that for all practical purposes the husband was happy to deal with it as if it were his own property. 

Kennon & Spry

1. It is probably apposite in this context to add a word or two about the decision of the High Court in Kennon v Spry[5].

   [5] (2008) FLC 93-388.

2. This is a most difficult decision.  There were four primary judgments.  These were from Chief Justice French, Justices Gummow and Hayne, Justice Hayden and Justice Keifel.

3. Contrary to what might have been thought to be the case before this decision and certainly contrary to the submissions made on behalf of Dr O, himself an author of texts on equity, the Chief Justice and Justices Gummow and Hayne held in effect that if an appointer under a general power of appointment or more relevantly a trustee in respect of a discretionary trust, had the unqualified power to distribute property to himself or to his spouse then this in itself constituted property within the terms of s 79 of the Family Law Act. 

4. The situation in Kennon & Spry was complicated by the fact that the original trust was a parol trust which was subsequently signed in a written form.  There were then variations to the trust effected by Dr O (who was in control of the trustee) to remove himself as a beneficiary and subsequently his then, (but at the time of the hearing former,) wife.  It would seem to be agreed by the three Justices referred to that after the second variation which removed both Dr O and his wife as potential beneficiaries Dr O’s interest in the trust was not then property.  

5. A variation to that theme related to the question of whether he might be reinstated to the trust and that was the subject of some controversy. 

6. Justice Hayden took what might be reasonably described as a traditional view about trusts and found that the combination of factors involved did not allow Dr O’s power to be described in the circumstances as property. 

7. Justice Hayden also dealt with the issue of the possible application of s 85A which has been the subject of some consideration in these reasons above. Justice Hayden decided that the words “ante-nuptial settlement” and “post-nuptial settlement” had not only a temporal factor that is “before” and “after” marriage but rather in the case of an ante-nuptial settlement would need to bear some reference to the marriage rather than a marriage.  In this case, (as his Honour took the view that there were not a sequence of trusts established but rather one continuous trust,) that although the trust was before the marriage of the Os it did not have the necessary connexion with the marriage so as to constitute the trust an ante-nuptial settlement. 

8. In the present case there is no question but that the Trust was created post-nuptially and within the terms of the section for the benefit of one of the parties at least.

9. In contrast, her Honour Justice Keifel in her judgment did not seem to place the same emphasis on the concept that the settlement would have to have some particular nuptial quality.  For example, as appears in paragraph 210 of the judgment, her Honour says:

   The form that a settlement takes has not been regarded as of importance; rather it is necessary that it provide for the financial benefit of one or either of the spouses.  [emphasis added]

10. Her Honour referred for authority for that proposition to Prinsep & Prinsep[6] “… beyond these characteristics, no definition of a settlement is possible.”[7]

    [6] [1929] P 225 at 232 per Hill J.

    [7] Ibid.

11. Her Honour, contrary to the position expressed by his Honour Justice Hayden said in paragraph 227

    It does not require that a settlement made prior to the marriage be directed to the particular marriage at the point it is made. It is sufficient for the purposes of the section that the association of which it speaks … be present when the Court comes to determine the application of the property settled under s 85A(1).

12. In this matter, it seems that in accordance with the arguably narrower definition of the concept of property adopted by the majority of the members of the Court, Mr Galvan had property which was of a value equal to the assets of the trust because of his position of control and his ability to distribute to himself or perhaps unbeknown to him to the wife exclusively. 

13. In addition, the Court would have power to interfere with the terms of that trust on the basis that this was a post-nuptial settlement (whatever may be the result of the realisation of the differences between his Honour Justice Hayden an her Honour Justice Keifel) and subject to the other provisions in s 85A the Court would have the power to (but not be mandated to) intervene and change dispositions that had already been made or might be made. My deliberations on these matters in relation to the dispositions and distributions made through the trust are set out above and concentrate on the requirement common to s 79 and to s 85A that any orders made should be just and equitable and take into account the rights of third parties.

14. Taking all of these factors into account, accepting that there was impropriety in the administration of the Trust and accepting that there would be power to set aside at least the second of the distributions (s 106B) my final determination about the issue is that the first distribution made before proceedings commenced (from N Street) should not be set aside.  Even if due consideration had been given it was open to the Trustee to have made the distributions he did.  In my opinion, it would now be unjust and inequitable to set aside those dispositions particularly in favour of third parties.  The disposition in favour of the Applicant remains as his property. 

15. So far as the second distribution in respect of F Street is concerned, for the reasons that I have outlined above it seems to me that s 106B could have application and in this regard should have application.  I am to some extent persuaded in this regard by the fact that orders were made by me quarantining the distributions in this case at an earlier point. 

16. As will appear from my conclusions at the end of these Reasons for Judgment the order that I make about the amount that is to be paid to the First Respondent will not require the husband in the exercise of his capacity as Trustee (assuming that the Trustee Company is still in existence) attempt to recover money from his two children, the Second and Third Respondents.  As Trustee it would be his obligation to do so in the light of my finding in this matter.  However, it would not be necessary for him to do so on the basis of the property that appears to be in existence in his own hands to satisfy the orders that I propose to make. 

17. Although the decision of the High Court of Australia in Kennon v Spry[8] adds substance to some of the reasons set out above there is nothing in their Honour’s several or collective reasons for judgment which would cause me to modify the outcome that I have indicated above.  In the end it is necessary to balance the interests of those who had the benefit of distributions from the Trust in what could have been a valid distribution and which from their point of view may well have been considered by them to be a valid distribution against the broader interests of the First Respondent in ensuring the property of the parties was available for consideration by this Court. 

    [8] [2008] FLC 93-388.

Add-backs

1. Although I was urged during the course of the written submissions from Mr Howard, on behalf of the wife, and from Mr Kumar on behalf of the husband to make a number of “add-backs”, in my opinion such an approach is not open to me. The Act prescribes and Stanford & Stanford[9] confirms that the obligation of the Court in matters relating to the division of property is to divide the property of the parties. There may be some basis for compensating for depredation of property through the agency of s 75(2)(o). But for reasons I have expressed previously[10] it seems to me, that the task I have to perform is to make such orders about the property of the parties as at the date of trial as would in the circumstances be just and equitable. The fact that a party prior to the trial has expended or alienated property of one or both of the parties so that that property is no longer in existence or available at the date of the hearing is potentially a factor to be taken into account under s 75(2)(o) of the Family Law Act 1975 but should not form part of the “balance sheet”. 

   [9] Stanford & Stanford [2012] FamCAFC 1.

   [10] McGuire & McGuire (No 2) [2012] FamCAFC 90.

The V apartment

1. The contract was signed in relation to this property in June 2010 and a deposit of $23,915 paid.  It appears that this property, assuming that the contract was completed, was to be in the name of the husband only.  It appears from the most recent evidence of the husband that this sale did not proceed and as a consequence he is now being sued in relation to it. The deposit therefor should be regarded as lost and is not property available. The potential debt (if any) from the litigation is inchoate at this time. In any event the property and any debt associated with it or arising from the aborted transaction should remain with the husband.  The wife did not contribute to and was not in any way involved with the transaction or should be responsible for the debts or prospective debt.

D Street

1. The former family home was sold and the net amount held in trust.  This was at the date of the trial $17,658. I am now informed that that amount was divided equally between the husband and the wife. This eminently sensible arrangement removes the remaining proceeds from the pool of property for division. It constituted a pre-emptive division. It should not be added back.  The difference between the equal division and the amount which should have been paid to each in accordance with the deliberations set out hereafter is not such as to provoke any change to the division of property.

2. In relation to this property the wife had argued that the husband had extended the mortgage on the property without her consent.  Notwithstanding the most diligent searching of the material filed on behalf of the husband (and for that matter on behalf of his children) it is difficult to discern precisely where this amount went.  The obligation to explain this absence was substantially the responsibility of the husband.  The diminution of the asset by his effectively drawing for his own purposes that sum of money is a factor properly to be taken into account under s 75(2) but does not diminish the fact that the asset at trial was only worth the balance in the Trust account.

F Street

1. The proceeds of F Street were the subject of a distribution from the G Family Trust.  The sums were approximately one third to each of the husband and to Ms Galvan Jnr and Mr Galvan Jnr.  Those sums are currently the subject of a restraining order pending the determination of these proceedings. 

2. The husband is, and was at the relevant time, the sole Director of the Trustee Company and had all other relevant powers under the trust deed as Appointor and as Guardian.  He and Ms Galvan Jnr and Mr Galvan Jnr were potential Beneficiaries of the Trust and distributions might have been made in favour of each of them. 

3. Apart from the fact that the husband’s records in relation to the Trust were grievously deficient, and no minutes of any meeting at which a determination was made for such a distribution, there is no evidence which suggests that the distribution was not otherwise valid. There can be no doubt that the distribution of the funds referred to would necessarily diminish the assets of the Trust or perhaps more precisely the company Galvan Pty Limited as Trustee for the G Family Trust. This, it may be argued, may have diminished the property available to the Court to distribute in favour of the wife if the Trust were to be regarded as the husband’s property. 

4. There is no doubt that the husband effectively controlled all operations of the Trust and I accept the submission[11] of Mr Howard that on occasions when it suited him, the husband would refer to the assets of the Trust as “his” assets.  Nevertheless, it seems to me that the Trustee validly held property on behalf of the Trust and accordingly, the Trust Deed and the operation of it were not of themselves indicative of a sham or some inappropriate action. 

   [11] Submission number 39 – Submissions on behalf of the Respondent wife filed 21 September 2012.

5. For the reasons set out above it seems to me to be appropriate (consistent with the orders made by the judge at first instance in Kennon v Spry and with the reasons that I have set out above) for these distributions to be set aside pursuant to s 106B of the Family Law Act 1975.  That order having been made the proceeds of the sale of F Street would, for the purposes of these proceedings, become the property of the Applicant (again consistently with the decision of the majority in Kennon v Spry) and from a practical point of view the Second and Third Respondent would owe to the Trustee of the Family Trust the money that they received by way of distribution.  Whether the Trustee chooses to collect that sum is of course a different matter. 

Q Property

1. This property was owned by the husband and his sister.  Again the provenance of the transaction was the subject of some question but none of the evidence satisfactorily displaced the proposition that the property was owned as it appears to be - by the husband and his sister.  From the sale of the property the husband received $41,000 and it is reasonable that that sum should be added into the pool.  I am not satisfied that there are any grounds upon which the transaction in so far as it provided a distribution to the sister of Mr Galvan could be set aside and in any event there would be some difficulty with my undertaking such an action given that no procedural fairness has been afforded to the husband’s sister.

The marriage pendant

1. One specific item was the subject of an impassioned plea from the Applicant.  The Applicant sought the return of a pendant which was given to the First Respondent, his wife, at the time of their marriage.  He maintained that as the marriage had broken down it was both appropriate and customary for the pendant to be returned.  It is perhaps typical of the Applicant’s case that no evidence was adduced (even from him personally,) as to the nature, extent, conditions relating to what is claimed to be a traditional gift.  He demands its return on the basis that as the marriage is ended the First Respondent has no right to keep it.

2. Apart from his vague assertions in this regard, however, no evidence was tended as to the tradition and indeed his own evidence about it was not sufficiently clear to distinguish his desire from what might be tradition.  It was for him to provide the evidence, and he did not. 

3. In some ways, the gift is analogous to the gift of an engagement ring.  Engagement rings in Western culture have been the subject of litigation over the years including Davies v Messner[12], Cohen v Sellar[13] and Muschinski v Dodds[14] and more recently in Damiani & Damiani[15].  In short, if the marriage had not proceeded it may have been appropriate for the return of the gift.  On the other hand, the marriage did proceed - and persisted.  In such circumstances, in my opinion, absent the acceptance by both parties of the traditional qualifications on the gift, the pendant remains the property of the wife.  It is property which is property of the parties and hence could be the subject of an order of this Court.  However, given the personal nature of the gift, if the wife chooses not to return it then that is her prerogative.  Unfortunately, effectively no monetary value has been placed on the pendant and while the wife will retain it, it is therefore impossible to make any accurate adjustment in value terms in favour of the husband. 

   [12] [1975] 12 SASR 333.

   [13] [1926] 1 KB 236.

   [14] (1985) 160 CLR 583.

   [15] [2012] FamCA 535.

Other property

1. That then leaves the properties owned by Ms Galvan Jnr and Mr Galvan Jnr at Suburb J and K Street respectively.  These properties are asserted by the wife to be held in trust for the husband.  For their part the Second and Third Respondents assert that the properties are theirs.  They acknowledge that they were purchased with the assistance of the husband but that the money he had contributed to their properties was a gift and that such a gift did not create a resulting trust in favour of the husband because of the presumption of advancement, but also because each of the children contributed to the property in his or her own way. 

2. Ms Galvan Jnr submits (and I use the word because evidence is difficult to find in this matter) that her and her partner’s contributions had been $80,964 and at the time of the trial this meant on an equity of $105,000 (value of the properties $625,000, mortgage $520,000) the husband’s interest in the property at a maximum she would argue was $24,036.  This was the amount that he, she said, had contributed one way or the other and to the extent that there were equities to be found on behalf of the father that represented the high point.  Ms Galvan filed a “new” valuation which came in at the same figure set out above.  The mortgage balance was unchanged.  She asserted that what had been outlaid since November 2011 amounted to $123,446.05.  What she did not set out was the effect that such negative gearing had had on her net income and the net benefit to her (or loss).  In the circumstances I believe that (consistently with the principles enunciated in Baumgartner v Baumgartner[16] the husband’s equitable interest should be fixed at his contributions.  There is no suggestion that the property would be sold at present.  The final value to Ms Galvan would be determined by the market if it is sold.  Capital gains tax (if any), the arrangement of Ms Galvan’s income and the extent of other investments and their effect on her income tax liability and of course the expenses of sale would all affect the return to her.  Her situation may improve or decline. Hence in my opinion the determination of the husband’s equity is uncertain except by reference to his conceded contributions. I find accordingly.

   [16](1987) 164 CLR 137.

3. Similarly, Mr Galvan Jnr submitted that his and his partner’s contributions had been $88,361.  The property was worth $455,000, the mortgage $343,240 leaving an equity of $111,760 from which it was then extrapolated that the husband’s maximum interest was $23,399.  The valuation filed on his behalf on 30 November 2015 appears to indicate a diminution of the value of the property.  Applying the mathematical reasoning set out above this would diminish the “equity” of the husband.  However the reasons expressed in relation to Ms Galvan’s property set out in the preceding paragraph are equally applicable to Mr Galvan (junior) and I make a finding in relation to his property as I did for his sister’s.

4. I had indicated earlier that the husband’s evidence was far from satisfactory and his credibility doubtful.  I accept in the general tenor of the evidence of the husband that his purpose in acquiring various properties was to benefit his children.  That necessarily had the consequence of there being no benefit to his wife.  I am not satisfied however, particularly given the various changes that occurred in the percentage interests in the properties from time to time that the husband had surrendered his equitable interests in the properties.  It may have been the case that he had simply “parked” his interest in the property pending the resolution of the proceedings in this Court.  It may also have been the case that he did intend to provide the money to his children as a gift and as an advancement and that hence he had no equitable interest in the properties.

5. It was for him to convince me about this matter.  I am not convinced that his intention was to forego any interest whatsoever in the properties.  Accordingly, there is a resulting or constructive trust in his favour in relation at least to the contributions he made.  There is no evidence that there should be any higher interest than his contributions although it is clear in many respects that his involvement was a sine qua non for the transactions to occur because of the age of the Second and Third Respondent at the relevant time. 

6. I reiterate the onus of proving intent in this case lies practically and sensibly with the husband.  He has not discharged that onus and accordingly the appropriate construction of an equitable interest in his favour should occur.  This means that I accept that he has an equitable interest in respect of each of the Suburb J and Avenue properties in the sum of $24,036 and $23,399 respectively. 

7. Accordingly, the revised list of property, for the purposes of my determination is as follows.  It is noted that at the time of trial both parties indicated that they had some money in bank accounts and some motor vehicles, and the husband possessed some Telstra shares.  Given the lack of updated values for these, these items should remain the property of the person who currently holds them.

Husband	Wife
Property	Value	Property	Value
Proceeds: F St (distribution to husband)	$33,625.47 (restraint on disposal)	Superannuation	$19,700
Proceeds: F St (distribution to Second Respondent)	$34,625 (restraint on disposal)
Proceeds: F St (distribution to Third Respondent)	$34,625 (restraint on disposal)
Proceeds: Q Property	$41,000 (restraint on disposal)
Suburb J property	$24,036
The Avenue property	$23,399
Superannuation	$184,476

Liabilities

Tax debt

1. Submissions on behalf of Mr Galvan outlined that he had a debt of $361,754, being money owing to the Australian Taxation Office for unpaid taxes and associated penalties. Counsel for Mr Galvan argued in submissions that the tax liability should be deducted from the overall asset pool:

   the monies [sic] that should have been paid to the Commissioner was [sic]channelled in ways that the First Respondent and Applicants [sic] are beneficiaries. The monies [sic] that the husband had was [sic] used to pay mortgage [sic] for the matrimonial home instead of payment to the Commissioner. … The liabilities are simply attached to the income and / or profit earning activities on the part of the husband and thus the tax liabilities has [sic] to be taken into account. The liabilities could not be separated out. The First Respondent, it is submitted, could not thus contend on the one hand to be entitled to all the assets that constitute the pool but not tax or other liabilities.”

2. In contrast, counsel for the wife submitted that how the Court deals with tax and other liabilities in relation to the property pool is “a matter of discretion, guided by what is just and equitable in the particular circumstances of the case.” In this matter, as was the case in Worsnop,[17] the inclusion of the liabilities would mean that in effect there would be no net property left to divide, and Counsel for the wife contended that the wife was “an entirely innocent party and was not put into a position to make a choice or to influence the husband’s actions especially in circumstances where she was not aware of the husband’s default.”

   [17] Commissioner of Taxation and Worsnop and Anor (2009) FamCAFC 4.

3. The husband asserted[18] that the wife always knew that he had not prepared the tax returns. His evidence on that point was unconvincing and even if it were true, falls far short of demonstrating that she knew tax had not been paid let alone the extent of the debt.

   [18] Transcript 21 February 2012, p142.

4. There is no rule of priority as between an unsecured creditor and a spouse in family law proceedings, but the rights of a creditor should be taken into account and balanced with the claims and rights of the spouse.[19]

   [19] Biltoft and Biltoft [1995] FamCA 45, [63].

5. In Worsnop the majority held that the argument as to whether a party to the marriage who has, whether knowingly or not, had the benefit of money or property available only as a consequence of their partner’s failure to pay the debt should share equally the burden of the debt “might carry more weight in respect to a debt for prime tax, than in relation to interest and penalties.”

6. In this matter, some of the tax owed is Mr Galvan’s personal tax debt, but some of it is in relation to the income of R Pty Ltd and Galvan Pty Ltd, entities in which the wife had no interest or involvement.  Much of the outstanding debt is comprised of interest and penalties and although the evidence in relation to the breakdown of the tax debt is scant, it appears at least some of the debt is in relation to financial years following separation.

7. In circumstances where the evidence is that the husband used his income to invest in properties in the name of the family trust and his children, where the wife did not receive any benefit from these properties, and where the husband has failed to demonstrate that the wife had received any particular benefit from his failure to pay tax, there remains only the benefit she may have derived from the payment of the mortgage on the matrimonial home.  Upon the sale of the matrimonial home the net proceeds were only $17,658.  This was the result of both the husband ceasing to pay the mortgage on this property, and it is the wife’s evidence, which I accept, that the husband drew down almost $100,000 from the mortgage on this property between 29 November 2008 and 23 February 2009.  Any benefit the wife may have received is limited at best.

8. When I advised the parties that delivery of the reasons for judgment was imminent, the Applicant filed an additional affidavit in which he asserted that the tax debt is now $138,631.08. Although a document concerning the tax was annexed, the circumstances in which liabilities arose or apparently in some way were reduced, an explanation as to why the liability should be in some way off set against the assets of the parties and what arrangements, if any, Mr Galvan has made for payment of the tax remain unknown. The cross-examination of Mr Galvan and the failure by way of re-examination or evidence-in-chief to a adduce any evidence about the other tax debts for which he accepted a degree of personal responsibility in the course of the main trial in this matter leads me to find that the only relevant liability that is current and to be taken into account under s 75(2)(o) if nowhere else, is $138,631.08 – together with such accruing interest and penalties as may flow from it. It would seem an extraordinary decision for the Applicant to make not to give evidence about other liabilities for tax given that he had the opportunity to reopen his evidence and did so particularly in circumstances where he was represented by experienced counsel. 

9. I find the husband is solely responsible for the entirety of the tax debt either as originally stipulated or as seems more likely as appears to be the case in a lesser amount at this time.  This is to be his liability and not to be considered as a liability to be debited against the property of the parties. 

Other liabilities

1. In his affidavit filed on 4 January 2012, the Applicant husband claimed the following liabilities.  During the course of the written submissions from the Applicant filed on 21 September 2012 the following liabilities were noted:

Affidavit sworn 6 November 2011		Written submissions filed on 21 September 2012
Liabilites	Value	Value
Mortgage – D Street	804 700
G Family Trust	347 251
Mortgage – Q Property	204 691
Unpaid taxes (excluding interest)	292 030	361 754
Master Card	10 117	12 631
Visa card	14 990	20 309
CBFC – hire purchase	22 016	15 918
Centrelink	12 617	12 617
ACT Government – ACTIA	33 600	33 600
Mr S – loan	46 240	40 840
Ms T Galvan	35 000	40 840
Loan from Mr Galvan Jnr	10 000	10 000
U	45 000	45 000
U purchase V	7 000	7 000
W Homes	28 800	28 800
General rates and water – D	7 022
General rates and water – Q Property	4 330
Stamp Duty Assessment – V Apartments	18 514

1. By the time of trial D Street had been sold hence the mortgage debt was no longer relevant. 

2. The reference to the G Family Trust was not the subject of effective explanation and I have no evidence from Mr Galvan (at least any satisfactory evidence) as to how the debt arose; why he should only be responsible for one half of it; and why it would be just and equitable for that debt (assuming that it exists) to be shared with the First Respondent in any way.  It is reasonable to say that absent any effective cross-examination about the matter, I should accept that a sworn statement that a debt exists is evidence that the debt exists.  That however, is somewhat less than establishing that it has a reference to the activities of the parties and should in effect be shared in some way.  The onus of proving that lay with the Applicant.  The onus was not discharged. 

3. The mortgage on the Q Property no longer exists because the property has been sold. 

4. Master Card and Visa Card – In submissions, Mr Galvan claimed outstanding debts on two credit cards: a Visa card (outstanding balance $20,309) and a MasterCard (outstanding balance $12,631).  These balances are presumed to be as at the date the submissions were received, this being 21 September 2012.  Annexed to his affidavit sworn on 6 November 2011, Mr Galvan provided his Visa card statements from June 2007 to August 2010, and his MasterCard statements from September 2007 to July 2010.

5. The opening balance on the Visa as at 15 June 2007 was $14,968.72.  The limit on this card was $15,000, and from August 2007 this limit was exceeded.  While payments were made regularly off this card, and it appears that the husband attempted to pay off the card each month approximately the amount of the new charges to the card, the interest rate charged on purchases varied over this period from 18.99 per cent per annum to 20.49 per cent, which resulted in approximately $230 to $270 per month being charged in interest.  It appears this card was typically used to pay other bills, such as those for telephone, internet, insurance, and fuel.  The last statement balance as at August 2010 was $15,191.09.  It appears from submissions that the debt had increased further by September 2012, but no additional statements have been provided evidencing this.

6. The opening balance on the Mastercard as at 20 September 2007 was $10,148.85.  The limit on this card was $10,000, and for much of the time since 2007 this limit was exceeded.  It appears this card was seldom used from September 2007 to December 2008.  As with the Visa card, regular payments were made, but the interest rate charged on purchases varied over this period from 19.15 per cent per annum to 20.74 per cent, which resulted in approximately $145 to $190 per month being charged in interest.  In December 2008 the balance this card was paid off in its entirety.  However, by May 2009 the limit had again been reached due primarily to the purchase of furniture and fixtures.  While this was substantially paid off again the following month, the balance again reached its limit with the payment of telephone and insurance bills, and incidentals.  The last statement balance as at July 2010 was $10,122.29.  As with the Visa, it appears that the debt owing on the MasterCard had also increased by September 2012.  Again, no additional statements have been provided evidencing this.

7. The husband has not, in his affidavits nor in oral testimony, provided evidence regarding expenses paid by credit card prior to mid to late 2007, noting that the parties separated in June 2009.  In addition, the Applicant has not demonstrated in any way that the debt that was incurred was expended on the family or even on what might be described as “reasonable day to day expenses”.[20]  Indeed the cross-examination of the husband revealed that much of the expenditure was for furniture for investment properties not for the matrimonial home.  Again, the Applicant has failed to discharge his onus and the debt should lie where it falls.

   [20] See for example Chorn and Hopkins [2004] FamCA 633.

8. CBFC – hire purchase - this has diminished between affidavit and submissions by some $6,000.  This debt is in relation to the hire purchase of a German motor vehicle from June 2008.  As will be discussed later in this judgment, this vehicle is to remain the property of the husband, and the debt in relation to it should also remain his sole responsibility.

9. Centrelink –this amount which appears in the submissions and in the affidavit is unexplained and the onus of proof is undischarged.  It remains, if it still exists, with the husband. 

10. ACT Government – ACTIA, $33,600. There is some documentation about this annexed to the husband’s trial affidavit. The ACT Default Insurance Fund is a fund established under s 166 of the Worker’s Compensation Act 1951 administered by the ACT Insurance Authority (ACTIA).  This debt arises out of the husband’s role as an employer, and again no reason why it should be a shared expense was provided. In the end the onus is undischarged, and the debt should not, in justice, be in any way attributed to the Respondent. 

11. Mr S – this loan has diminished by some $6,000.  Although it was mentioned from time to time, very little was said substantively about when the money was lent and what it was applied for.  The husband supplied bank statements which demonstrated sums going in which he nominated as being from Mr S.  There was no further supporting evidence and his handwriting “identifying” the figure as a loan does not necessarily make it so.  (That is not to say of course, that it is not.)  Again, there was a failure to discharge an onus to explain the circumstances of the loan or its application.  Again, I accept that there is a loan because that was un-contradicted in evidence.  However, the existence of the loan and the purpose for its application and the justice and equity in sharing the loan with the wife are matters which were not addressed and that onus remains undischarged. 

12. Ms T Galvan – this debt has gone up.  This relates to his mother.  It may be legal fees or it may be something else, it was for Mr Galvan to explain it.  He did not do so satisfactorily.  The debt remains where it falls.

13. The loan from Mr Galvan Jnr – again the proof of this is an assertion that an entry on a bank statement identified by handwriting is the loan from the Second Respondent.  Whether this was a loan as claimed by the husband or a pre-emptive distribution from the trust was never satisfactorily resolved. The onus is undischarged. 

14. Mr U – It appears that the $7,000 concerns a loan from the husband’s father to the husband to assist with the payment of the deposit on the V apartment post separation.  I cannot recall any evidence about how the other $45,000 debt arose or the circumstances in which it should in some way be attributable to the wife.  In default of an adequate explanation and disclosure, the onus of demonstrating on an evidentiary basis that this was for some joint or family purpose remains undischarged and justice and equity would not allow me to make an order which brought about the sharing of that liability. 

15. W Homes – An invoice from W Homes dated 19 July 2009 for $28,000 was annexed to the husband’s trial affidavit.  It states that the invoice is for “extra works for your home at Block …, Section …, [Suburb O].”  This relates to the investment property at N Street in Suburb O held by Galvan Pty Ltd, and I have no evidence as to why the First Respondent should share in this debt.  The onus is again undischarged. 

16. General rates and water relating to D Street relate to a property that has been sold and presumably the rates paid.  Similarly, rates in relation to Q Property would also have been adjusted on settlement. 

17. Also included in the list in submissions were legal fees.  Both parties have incurred legal fees, there is no particular reason why the husband’s should be shared with the wife. 

18. Stamp duty in respect of the V apartment – this was to have been purchased long after separation and it approaches the outrageous to suggest that the liability should in some way be shared by the Respondent who had no part in the matter and who presumably if she had had any opportunity to do so, would have opposed the purchase.  From the husband’s most recent affidavit, it would appear the purchase did not proceed and that he is being sued in relation to it.  The First Respondent should not have to bear any liability for the purchase or the suit.  They were/are post-separation.  The First Respondent was not involved in the purchase or its failure.  The potential debt (inchoate at his point) is a factor to be taken into account in relation to the husband’s financial circumstances under s 75(2).

19. In summary, expenses incurred in the running of the business or in relation to a household would ordinarily be something that should be shared between the parties.  The parties should share not only the good times but also the bad.  However, for the reasons I have set out above there does not appear to me to be any basis in equity or in justice, or even to put it plainly, in fairness to ascribe any responsibility for any of the debts mentioned above to the wife. 

Contributions

1. The marriage was of about nine years duration.  The properties that are the subject of the list of assets set out above were substantially acquired by the husband.  He submits strongly that the wife made no contributions and should have no part of it.  This is not true in relation to the former family home at least but is not true, generally, either.  During the period the parties were together it was not suggested that the wife had otherwise than conducted herself appropriately as a parent and homemaker.  For part of that period that included the children of the husband from his first marriage.  That period was relatively short and I acknowledge that the wife’s child from a previous relationship was also part of the household and supported by the family funds. 

2. I had indicated above that I do not accept the evidence of the wife about the amount of work she put into the post office business.  I do accept however that her funds have been expended in large measure on matters relating to the overall household. 

3. In broad terms I believe her contributions were in the order of, for property other than superannuation, of 35 per cent.  Arriving at that figure is not a matter of precision because the evidence from each of the parties is both difficult to follow, missing vital steps from time to time and particularly in the case of the husband beset by his inability or unwillingness to be frank and open about the transactions referred to.  Nevertheless it would be unjust not to acknowledge the non-financial contributions of the wife in a meaningful way.  This is so particularly where this issue (with the exception about the post office business noted above) I prefer the wife’s evidence to the husband’s.

4. The husband had some initial assets as a contribution but that was, and is, somewhat difficult to value.  A consideration of what was his equity at time of the marriage suggests a relatively small amount.  The equity on sale of the property during the marriage appears to be higher but what happened to the proceeds is not explained satisfactorily by the person who could so explain – the husband.  There is also the question of what happened to some of the assets of the husband or of the husband and wife (not that this should be regarded as a “negative” contribution.  It simply reflects the unsatisfactory nature of the husband’s evidence).  Overall I think that the allocated proportions of contributions is right given the paucity of satisfactory evidence from the husband about matters he had unique knowledge of.

5. At the time of the substantive trial the husband was not in employment and the wife was.  However, the husband successfully negotiated a number of businesses.  He claimed in his Facebook page that he would obtain employment or reveal his employment (perhaps more accurately) once the Court proceedings were over.  Notwithstanding his protestations to the contrary, I am satisfied that the husband can earn a reasonable living in his own right and moreover, I am satisfied that he is now in employment as a manager and an accountant (from his most recent evidence).

Superannuation

1. I accept the husband had some superannuation before the relationship with the wife.  That should be reflected in part in the orders that I make.  The wife’s superannuation entitlements were minor, amounting to some $19,739 as at June 2009. Neither party sought to adduce any other valuations of their superannuation entitlements and I am satisfied in such circumstances in the interests of justice that I should find the value relevantly for the purpose of these proceedings to be in the case of the husband $184,476 and in the case of the wife $19,739. 

2. Bearing in mind the assistance offered by the Full Court in Coghlan and Coghlan[21] superannuation in this matter should not be dealt with as if it were simply part of the property.  Taking account of the parties separate contributions, the wife should receive approximately one third of the superannuation pool, constituted by her superannuation entitlements and those of Mr Galvan.  Although, it must amount to an approximation, given the lack of information and evidence I have about the matter it seems that she should receive something in the order of $37,000 of Mr Galvan’s declared value of approximately $184,476. 

   [21] [2005] FamCA 429.

3. There is no doubt that Mr Galvan’s superannuation may well have increased in value since the valuations set out above have been calculated.  Nevertheless it would be reasonable to say that any increase in that amount by reference to his own contributions would not have in any way represented any direct or indirect contribution from Ms Galvan.  There would be a compounding effect on the amount in the fund previously but in the circumstances this should remain with him and not be otherwise disturbed.  This is in part because of the difficulty in separating that component from contributions and the fact that Ms Galvan did not seek to call any evidence on this point.

4. The fact that the husband owned some of his superannuation before the parties came together in my opinion would suggest that it would be unjust and inequitable to give the wife a 35 per cent share based only on contributions.

Section 75(2) Factors

1. I have determined above that the taxation liability should rest solely with the husband.  That is not a “negative contribution” but in my opinion it is nevertheless properly a factor to be taken into under s 75(2) as one of the liabilities or debts of the husband. 

2. Although I have found his earning capacity might be more than that of the wife, the debt he has to the Taxation Department and his other debts offset that to an extent. 

3. So far as the superannuation is concerned, the husband is to receive a higher proportion of the total superannuation pool.  Again this is a factor which can properly be regarded as an adjusting factor in favour of the wife. 

4. The husband withdrew $100,000 or thereabouts from the equity in the D Street property by increasing the amount due under the mortgage and hence decreasing the equity of the parties in the property. I have indicated I could not be satisfied that this was in any significant way applied for the mutual benefit of the husband and the wife. That is a factor to be taken into account under s 75(2)(o) in favour of the wife.

5. Further, as a result of the findings I have made previously in relation to the N Street property the husband received, without the benefit of any formal resolution apparently, part of the proceeds.  This originally began as loans to him but was subsequently converted into distributions.  As indicated above, this was done without due consideration of the entitlement of the First Respondent to be considered as a person to whom distributions might be made.  By my determinations in this matter the Second and Third Respondents will retain whatever money they received by way of distributions from this sale even though potentially those distributions might have been otherwise set aside.  Leaving the children’s distributions out of calculation there still remains the proposition that the husband has received money to which the wife had no access and this is a factor properly to be taken into account as well under s 75(2).  This predicates a further adjustment in favour of the wife. 

6. The husband will finish up with little extant property (although he will have had the benefit of the mortgage draw-down from the D Street property and his “distribution” from the N Street property).  He has significant debts.  In the end the balancing of the matters is a matter of judgment. 

7. In summary, the factors pursuant to s 75(2) are in favour of the wife.  I believe that the appropriate adjustment between the parties should be that the wife receives an adjustment in her favour of 20 per cent (40 per cent differential) of the property other than superannuation and that she should receive.  This means that the wife is to receive 55 per cent of the total property pool.  Given the value of the pool, this means that the husband is to pay the wife the sum of $105,220.75 which I round down to $105,000.

Submissions

1. During the course of the Reasons for Judgment in this matter I have dealt indirectly, if not directly, with many of the submissions raised by each of the parties in these proceedings.  The submissions made were extensive; and in many cases discursive; and in some cases unhelpful.  Nevertheless, to confirm that a number of specific submissions which may not appear to have received a direct response during the course of the Reasons set out above have in fact been taken into account I list below the numbers of various submissions accompanied by the date on which they were made and some brief comments in relation thereto.

Applicant’s outline of submissions filed 21 September 2012

Submission (S) 4 – the husband’s equity at commencement of the relationship

1. I accept and indeed there was no contest that the husband had a property at the time the parties were married.  The assertion that it had equity of $250,000 is not established by the evidence.  It is improbable that such an equity existed.  However, even assuming that it did, no compelling evidence has been produced as to the application of the funds.  The equities remaining in the real estate acquired by the husband in whatever capacity during the course of the relationship do not reflect such a massive injection of funds.  It is fair to acknowledge that the husband’s initial contribution was greater than the wife’s. 

S 13 – relates to a property bought in the name of X

1. This property does not appear in any of the schedules in relation to property.  Its status, although a source of suspicion for the wife, has never been accurately determined.  It is not part of the property pool.

S 24 – the comparison and contributions made by the husband and the wife

1. The simplistic comparison set out in S 24 fails to take account of the fact that the parties arrangement between themselves was such that each accepted that the other made contributions.  The weight and value to be attributed to the different contributions is ultimately a matter for the Court.  The nature of the contributions made in the capacity of homemaker and parent are not capable of precise financial evaluation.  The submission, except to point out that there may have been a discrepancy between the contributions made by the parties, is rejected. 

S 44 – the alleged motive of the First Respondent in entering into the marriage

1. This submission is repeated and in even more scandalous detail in other submissions.  There is no evidence before me which would credibly support this submission.  It is an unworthy submission and is rejected. 

SS 55 and 53 – continue the inappropriate submissions about the wife’s motives for the marriage

S 59 – the effect of contributions by the Second and Third Respondent to the Trust

1. It is not reasonable to assert that no contributions were made by the Second and Third Respondents to the Trust.  The motive is irrelevant.  The feeding of the Trust is for the purposes of these proceedings irrelevant as well.  As Kennon v Spry[22] demonstrates in the judgments of French CJ and Gummow and Hayne JJ, in circumstances where the party has the ability to control distributions and that ability extends to being able to make a distribution or an appointment in favour of himself alone then that constitutes property within the terms of s 79 of the Family Law Act 1975.

   [22] [2008] HCA 56.

S 62 – control of the G Family Trust

1. As in so many cases in this matter the evidence was unsatisfactory.  It does appear however from what evidence is available that the husband at least for most of the time, if not all of it, was the sole Guardian, Appointor and Director of the Trustee Company.  As noted above, Mr Galvan Jnr was a Director for a period of something less than two years.  He had ceased to be a Director long before any distributions occurred.  The husband did control the Trust. 

S 105 - Add-backs

1. In essence this submission amounts to the proposition that, if the husband expended money in relation to the family home while it was occupied by the wife, that the wife should in fact add that money back into the pool.  This included mortgage interest and other factors.  The total, including money expended, it is asserted, on particularly the First Respondent’s daughter but also on other amounts out of her account, should be reimbursed in some way by her to the pool or essentially to Mr Galvan.  He claims a total of $301,939.  These sums do not constitute money that was in existence at separation which has been expended otherwise than on the day to day expenses of the parties.  This is some form of compensatory claim relating to the expenses the husband asserts he incurred in relation to the wife’s occupation of the house. Her occupation of the house was by Court order. The amounts expended by the wife, from her account whether in support of her daughter Ms Y or otherwise were not demonstrated as being other than proper expenses in the ordinary course of events. In default of there being any evidence to support such a contention, even their being taken into account under s 75(2)(o) it is not appropriate.

S 148 and following

1. I have previously indicated in my Reasons for Judgment my findings as to the credibility of the parties.  I do not propose to further expand upon that. 

S 161 and following

1. In the course of these submissions about Ms Z, learned counsel appears to have failed to recall that in the end, the evidence of the Facebook communications was admitted with the objection made being withdrawn.  In addition, the Applicant acknowledged that they were his communications.  He also acknowledged that Ms Z was his girlfriend.  The suggestion that in some way this was a “made-up person” (S 163) if made without instructions is disgraceful.  If made with instructions, it is contrary to the evidence.  It reflects no credit at all upon the Applicant.  In fact, it further damages his credibility. 

S 182 – orders sought

1. The orders sought in this document, which is somewhat at variance with earlier orders sought by the husband which in effect sought to attribute responsibility at least in part for the outstanding tax debt to the wife, seek that the proceeds of the sale of the family home be applied in reduction of that tax debt but otherwise that each of the parties keep what he or she has apart from certain religious or items of sentimental value set out in paragraph 8.

2. In addition, the Applicant seeks the First Respondent pay maintenance for him in the range of $150 per week.  This proposal did not feature strongly in the course of the evidence, if at all.  There is no basis for an order for maintenance to be paid by the First Respondent to the Applicant and no evidence from him supports such an application.

Submissions on behalf of the Respondent wife - 21 September 2012

S 17 and following

1. During the course of my Reasons for Judgment I have made findings about credit which in many cases have been adverse to the husband.  However, while I note the submissions made by Mr Howard in this regard I do not necessarily endorse the breadth of his criticisms of the husband.  The extent of my findings is contained in my Reasons for Judgment.

S 27

1. This submission relates to the broad proposition that the husband carried out his various transactions with a view to protecting his assets from the wife.  Even assuming that this submission was correct, it does not significantly affect the outcome of these proceedings.  In the course of my Reasons for Judgment I have set out at some length the course of various transactions and in the end in my opinion all relevant properties have been brought into account in one way or the other. 

S 29

1. The asserted withdrawal by the husband of $100,000 was in a period of three months, 2008-2009.  The withdrawal had the effect of increasing the mortgage on the family home.  The submission urges that this sum should be added-back. 

2. It was a large sum of money withdrawn shortly before separation.  It does appear to be suspicious.  But suspicion is not evidence and there is no satisfactory evidence which establishes what the sum withdrawn or the sums withdrawn were applied to.  For example, it cannot be asserted that on the evidence, there is a sum that has been set aside in a different person’s name or in a different account in the name of the husband.  

3. It is the case that his withdrawal of this sum has had the effect so far as the wife is concerned, that any equity she had in the property has been reduced or virtually eliminated.  

S 37 – the proceeds of N Street, Suburb O

1. This, in the context of this matter is a substantial sum - $130,000.  There is no doubt that what is asserted in S 37 happened - that is, that the sum was paid after separation into the account of Mr Galvan’s son. 

2. However, at the end, there is no fund that can be identified as representing that money and the obligation of the Court is to divide the property of the parties or each of them.  In default of there being any demonstrated misapplication of the funds or waste, while the First Respondent may continue to feel aggrieved this Court has no power to make any order which would deal with that which no longer appears, at least on the evidence, to exist. 

S 39

1. I accept this submission.  The nomination by the husband of assets which were in fact Trust assets as his assets is corroborative of the proposition otherwise contended for and accepted by me, that for all practical purposes, he was the person in control of the assets of the Trust.

S 69

1. This relates to the proposition that the husband has deliberately not disclosed matters to the Court and that in accordance with the determination in Weir & Weir[23] the Court should “not be unduly cautious about making findings in favour of the innocent party”.  The submission appears not to take into account the limitations of the application of the doctrine referred to above.  It is only in circumstances where it can be demonstrated that there is property upon which orders might be made that the deliberate non-disclosure by a party can give rise to an order in favour of the other party. Such an application of funds can only occur as a result of the application of s 75(2)(o) and does not constitute a matter to be taken into account otherwise under s 79(4). Any order made pursuant to the so called doctrine in Weir & Weir must occur in the division of the property of the parties or each of them.  It is not possible for an order to be made in vaccuo. 

   [23] [1993] FLC 92-338.

S 78

1. The asserted failure on the part of the Second and Third Respondents to make a full and frank disclosure is centred on the proposition that the husband’s deceptive conduct and failure to disclose has been in some way colluded in by the Second and Third Respondents.  It is difficult to recall an instance where when being asked to do so the Second and Third Respondents did not provide the appropriate information.  In the end, for the reasons given above, although they have an obligation to make a full and frank disclosure, (aliter the submission of the Applicant’s counsel) in the end it has not affected the determinations I have to make in this matter.

S 97

1. Although the trouble taken to produce the schedule referred to is appreciated, ultimately this is a similar sort of assertion to that made by the husband that the wife had expended money on her adult daughter.  In each case no evidence has been produced to demonstrate that the funds were not legitimately applied.  Even assuming that were not so, and the money had in fact been misapplied, it is still necessary for the Court to determine what orders should be made in relation to the property of the parties as at the date of the hearing not as at some earlier point when other money might have been available. 

S 106

1. I do not know that I would go so far as to accept the conclusion reached in this submission that the husband must have resources available to him which are not otherwise known to the Court.  Nevertheless I have determined that he should be responsible for the taxation debt and this in part is on the basis of the attitude referred to in submission 106 and my sharing Mr Galvan’s confidence that he has the capacity to earn sufficient money to meet the obligation.  It is noted that in the submission made on the husband’s behalf to which a previous reference has been made, there is no order sought seeking to have the tax debt shared with the wife.  It might be added that such an order could not properly be made as the requirement is for the Court to divide property, not to make orders about debts.

S 110 and following

1. These relate to the failed investment in AA Pty Ltd.  In relation to this the response to the submissions is simply that in situations such as this, each of the parties takes the good with the bad.  It is clear the investment was not a success, and to that extent the wife’s interest in the assets of the husband has been diminished.  I am not satisfied that there is anything untoward in the investment apart from its ill-advised nature. 

S 135

1. The declaration sought has been dealt with elsewhere in my Reasons for Judgment.  It is clear from my earlier reasons that I do not agree that the property should be sold. 

S 244

1. It would be difficult in the absence of any direct evidence to make a finding as sought however in the overall scheme of things in my Reasons for Judgment that debt has been left with the husband.  It may well be that it will never be called upon for repayment. 

S 249 and following and in particular 256 - cars of the husband and the Second and Third Respondent

1. The circumstances relating to the expenditure on the cars is yet again another unsatisfactory part of the evidence.  There is no evidence that if the cars were ordered to be sold (and it appears that they are under lease in any event) that they would produce the amount set out in S 256.  It is an unsatisfactory part of the process but not one that can be reflected in an order. 

S 257 – 259 – BB apartments

1. This was part of the fall-out from the Facebook disclosures.  The husband has no one but himself to blame for the suspicion excited in the wife by his reference to it as his property.  His evidence was that he merely acted as an intermediary and was not in any way beneficially entitled to the property.  He did provide the deposit cheque but asserted that he was repaid for it.  There is no evidence to cause me to accept that the husband’s story was not correct in relation to these apartments.  That is of course other than his direct lie that he was involved in it and it was his beneficially.  When asked directly by me whether he was lying to his girlfriend or to the Court he responded he was lying to his girlfriend.  While this exchange does not elicit much confidence in his word or his ability to accurately record the transaction, on balance I accept that he had no beneficial interest in the BB property. 

S 261(h)

1. I have indicated previously that I regard the suggestion that the wife had engaged in the marriage as some ploy or plot to obtain Australian citizenship as misplaced, malicious and unreasonable. 

S 262

1. This detailed analysis of the initial contribution by the husband to the Palmerston property would suggest, if it were accurate, that his equity at the time of the transfer to him was in the vicinity of $34,000.  I am not certain that the objective evidence supports this proposition. But in any event, the figures set out in submission 262 represent about the fourth version of the potential value of the initial contribution.  It is enough that there was an initial contribution.  Whatever it was at the date of the commencement of the relationship it obviously increased over the course of the next few years until it was worth more at the time when the property was sold. The precise amount of the proceeds of sale, their application and the weight to be given to this contribution are factors I have taken into account generally in my consideration of contributions.

Submissions of the Second and Third Respondent filed 19 October 2012

S 92 and following

1. There was a dispute on the evidence about the nature of the care that the wife (First Respondent) gave to the Second and Third Respondents.  Having listened to the evidence of all the parties I have no doubt that the Second and Third Respondents did make life somewhat difficult for the First Respondent.  I am prepared to accept that the First Respondent did provide care for the Second and Third Respondents, in addition to her own daughter Ms Y.  I am not prepared to find that the quality of that care to the Second and Third Respondents was so diminished as not to constitute a proper contribution for the purposes of the Family Law Act.

S 108

1. The nature of the Trust arrangements between the Applicant and the Second and Third Respondents have been examined in some detail during the course of my Reasons for Judgment.  I do not propose to amplify those reasons further.

Submissions by the Applicant in response to the wife’s submissions dated 19 October 2012

S 12

1. I have already indicated my view about the Facebook evidence.  Counsel for the husband’s continued insistence about the fact that this evidence should be disregarded is inappropriate, inaccurate and unhelpful. 

S 11

1. Although the parties are at odds about whether or not the husband forged the wife’s signature little depends upon it in the course of these matters.  I have made it clear that I do not accept that the wife entered into the marriage as some arrangement for the purposes of acquiring citizenship.

S 20

1. This has been dealt with in other places and but further extends counsel for the husband’s terrier-like concern about the assertion of the wife’s motivation in entering into the marriage. 

S 85

1. This submission constitutes whether knowingly or not an admission on the part of the husband’s counsel that the funds retained by the non-payment of tax were applied for purposes other than the payment of the mortgage. 

Submissions in reply on behalf of the First Respondent wife filed on 19 October 2012

S 16d

1. To the extent that it would be appropriate for me to do so, I accept the wife’s evidence that the husband assaulted her at or about the time of separation.  However, no Kennon & Kennon[24] argument was raised in these proceedings and while it remains an issue of credit as between the parties it does not otherwise bear upon the distribution of property.

   [24] [1997] FamCA 27.

S 31

1. The reference by the husband’s counsel which is replied to in this submission as to the CC Trust is irrelevant.  I have dealt with the contributions made by the children generally and the injection of this complication is unnecessary. 

S 60

1. The failure to call Mr S as a witness occupied a number of submissions by both parties.  Given the husband’s admission in cross-examination that he was in employment (the Facebook submission) it was unnecessary for the wife’s counsel to call any further evidence to support that contention.  It was open to the husband to call Mr S to corroborate his denial of the fact that he was employed by him.  In the end, it is difficult to assert other than that the husband’s evidence was unsatisfactory at many levels.  His uncorroborated word about anything is generally not reasonably acceptable.  In this case, his evidence on Facebook was that he was employed.  He did not call in evidence-in-chief Mr S to comment on that matter or to otherwise corroborate the fact that he was not employed.  The evidence is unsatisfactory and I cannot make any firm determination about whether or not he was employed.  I have otherwise found he has a capacity to be employed.

S 69

1. This submission but further emphasises the complications in determining the interest between the parties. 

S 71

1. I do not agree with the submission but because I have dealt with the matter in a different way during the course of my Reasons for Judgment it is unnecessary for me to further comment.

S 74

1. The contributions made were almost certainly made in the circumstances referred to by counsel for the First Respondent.  Nevertheless, the nature and quality of any contributions made by the Second and Third Respondent have been considered elsewhere in my Reasons for Judgment and my comments about that are unmodified as a result of that submission. 

Costs

1. During the course of the trial and interlocutory proceedings there have been a number of applications of decisions about costs. 

2. Dealing first with those prior to the costs of this hearing, I draw attention to the provisions of s 117 of the Family Law Act 1975 which mandate a primary position that each party to proceedings will pay his or her own costs. 

3. Without examining each of the instances in detail, it is fair to say that in many cases the applications for costs have been prompted by what was perceived to be the failure on the part of the other party to comply with directions or alternatively to make a full and frank disclosure.  Each has from time to time asserted the other has failed to properly comply with his or her duties to the Court.

4. Under s 117(2) the Court may make an order as to costs if it considers it to be appropriate to do so. A number of factors are to be taken into account (s 117(2A)) if an order is to be made.

5. Given the result of these proceedings, the inadequacy of the parties’ funds to support even their own debts (particularly in the case of Mr Galvan) and the lack of property, leave me to conclude that the primary prescription should apply. 

6. In relation to all of the applications for costs which were reserved during the course of the proceedings other than the primary proceedings themselves each party will bear his or her own costs. 

7. So far as the costs of these proceedings are concerned I am conscious that the parties have not at this point had an opportunity to make submissions.  No party may seek an order for costs.  Such a decision would be sensible. 

8. Leaving aside the comments that I have made above about the primary prescription under s 117(1), in this matter while the conduct of the Applicant may be seized upon by the First Respondent to suggest that there should be an order for costs in her favour, I would also take notice of the respective financial circumstances of the parties and in particular the debts that Mr Galvan will be left with as a result of the orders that I have made.

1. It may be that neither party seeks an order for costs.  If either does I will provide the opportunity for both parties or their lawyers to address me on the issue. 

2. It is of course the parties’ right and privilege to make an application if either chooses to do so but it may be the case that the parties spend what little money they have left in making whatever limited provision they may for their future. 

Conclusion

1. At the end of my Reasons for Judgment in this matter I feel a deep sense of frustration at the lack of available evidence to enable me to make findings about many of the matters in issue between the parties. 

2. My sense of frustration is compounded by the fact that in the end the result will do very little to assist any of the parties in getting on with their lives at the end of their intra-relationship dealings.  I am sorry that my delay in the delivery of this decision may have added to the grief of the parties but as will be seen from my foregoing Reasons the task I faced was a complicated one. 

I certify that the preceding two hundred (200) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 9 December 2015.

Associate:

Date:  9 December 2015