GANS & ALBERT - [2013] FMCAfam 300

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GANS & ALBERT

[2013] FMCAfam 300

FAMILY LAW – Property dispute – lengthy relationship – husband’s discovery of wife’s extra-martial affair and related financial wastage – extensive disputes about discovery and quantum of add-backs.

Family Law Act 1975, ss.79, 79(2)

Stanford v Stanford [2012] HCA 52
Ogilvie & Adams [1981] VR 1041

Applicant:

MR GANS

Respondent:

MS ALBERT

File Number:

MLC 3033 of 2012

Judgment of:

Burchardt FM

Hearing dates:

19 December 2012, 4 & 5 February 2013

Date of Last Submission:

27 March 2013

Delivered at:

Melbourne

Delivered on:

11 April 2013

REPRESENTATION

Counsel for the Applicant:

Ms Stoikovska

Solicitors for the Applicant:

Berger Kordos Lawyers

Counsel for the Respondent:

Mr Williams

Solicitors for the Respondent:

Pearsons Lawyers Pty Ltd

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLC 3033 of 2012

MR GANS

Applicant

And

MS ALBERT

Respondent

REASONS FOR JUDGMENT

Introductory

This is an embittered property dispute in which the husband seeks that the wife receive up to 57 ½ per cent of the non-superannuation assets of the parties and that the superannuation be split evenly. The wife seeks that she receive 80 to 85 per cent of the pool, inclusive of superannuation, albeit that the husband would in fact get his superannuation and a relatively small amount of money on the wife’s proposal.
For the reasons that follow, I think that the wife should obtain 65 per cent of the non-superannuation asset pool and that the parties’ superannuation should be split evenly, this being in my view a just and equitable resolution of the dispute between them.

Agreed Facts

Although the parties are divorced it will be convenient, as their counsel indeed did, to refer to them as husband and wife.
The husband was born [in] 1968 and although he is qualified [occupation omitted] he works, and has worked for many years, in the [omitted] industry. He was an employee until relatively recently but has since gone out on his own as an independent [omitted], selling his services as a sole practitioner under the business name [U].
The wife was born [in] 1973 and works as a [occupation omitted]. Historically she has worked (since resuming work following the upbringing of the children to whom I shall come shortly) for three days per week but that seems likely to expand to 5 days a week in the near future.
There are three children of the relationship, [X] born [in] 1996, [Y] born [in] 1997 and [Z] born [in] 2000. All three children live with the wife and spend no time whatsoever with their father, from whom they are significantly estranged.
The parties married [in] 1995 and, although there is a minor controversy as to how long they knew one another before that, nothing turns on it. Both parties worked until the children were born, although it is clear from the materials as a whole that throughout the vast majority of their marriage the parties had what Ms S, the Family Report writer, described as a very traditional arrangement. The husband worked and produced the money and did some of the outside work at the home and the wife was the homemaker.
At the commencement of the relationship the husband had bought a block of land for $56,000 upon which the matrimonial home rapidly commenced to be built. He had bought this block it would appear, out of savings of $75,000. At this time he received what was described as a loan from his parents in the sum of $100,000 which was applied towards the building of the matrimonial home on the block in [P]. The wife and children still live there.
The husband has deposed that at the time of the commencement of the relationship he had approximately $7,000 in superannuation and this figure was not challenged.
At the time of the commencement of the relationship the wife owned a property in [L] which she had purchased for $117,000 in 1992, with a small mortgage of no more than $15,000. It was worth $150,000 according to the wife at the start of the relationship.
Despite some quibbling on the part of the husband, it seems clear that the mortgage on the [L] property was paid out relatively quickly by rental received and the property was unencumbered for some time thereafter.
The husband worked as a [omitted] as well as in the [omitted] industry. He had a company which I will refer to as [E], but it is clear from the materials that that company was deregistered in 2011 and has no ongoing income.
As earlier indicated, the husband was retrenched from his previous employment in May 2011 and he continues to work as an independent [omitted] at a salary of $1,800 per week.
The husband had a major heart attack in January 2011, shortly after final separation. It is clear that the final separation came as a great shock to the husband, even though he may well have been aware that the marriage was fairing poorly before that.
The husband’s natural concern at the end of the relationship was grossly exacerbated by the fact that shortly after separation (which occurred when the wife took the children overseas to Fiji for a holiday) he found the wife’s diary. From this diary, it became apparent to him that the wife had for some years been conducting an extramarital affair with a man named Mr K. Worse again, from the husband’s point of view, it was apparent that Mr K had been given (as it seemed to him) very substantial amounts of money by the wife during the currency of the marriage. The husband’s treating medical advisers suggested that the heart attack was brought on by, or at the very least contributed to, by the enormous emotional stress of these discoveries.
At the time of the commencement of the relationship, each of the parties had a car and although values have been ascribed to them there are no valuations. Indeed, these matters are so long ago as in my view to be immaterial, even though one car appears to have been sold for some thousand of dollars and applied to the marital relationship generally.
Following separation the husband paid certain amounts towards the mortgage, although not sufficient to satisfy all the amounts outstanding. The husband has also continued to pay medical insurance for the children, albeit that the wife, as it transpires, has her own medical insurance. This was one of a number of unprofitable areas for squabbling between counsel during the hearing.
The husband paid some of the utilities on the property for a while but eventually ceased to do so. He now pays Child Support as assessed in the sum of $2,200 per month. There was some confusion as to whether there were substantial arrears and, if so, why? But as best I can understand the matter, these arrears are either being paid through a garnishee order or have been paid.
The husband has paid only some $1,600 or so towards the children’s school fees since separation. It is quite clear from Ms S’s report that the children’s perception of the father’s failure to support them post-separation has played a major part in their alienation from him. This alienation has clearly, from Ms S’s report, been contributed to by the mother, even if to an extent unwittingly.
As earlier indicated, the wife has worked since 2005 in her present employment as a [omitted] for 3 days per week. She earns $30 per hour. She will be increasing to 5 days per week shortly to cover an employee who is leaving on maternity leave. The tenor of the wife’s evidence, however, suggested that her increase in work is likely to continue beyond the presumed one-year period of such maternity leave.
The husband charges his employment out at $45 per hour and he works from Monday to Friday. Before his heart attack he worked on Saturdays also. He says he is no longer able to sustain such pressure.
Thus far, the matters I have recorded are either expressly agreed or very straightforward to determine. Indeed, it is appropriate to say a couple of general remarks at this stage about the nature of the materials in the trial and the way it has been conducted.
This case has been fought with an intensity that reflects the distaste of the two parties for each other and which has its origins, quite clearly, in the continuing sense of outrage that the father feels about his former wife’s infidelity. It is regrettable that the lawyers have not been able to bring the parties to a more rational assessment of the strength of their cases. Most of the evidence in the case is in fact relatively straightforward and there are remarkably few matters in significant disagreement, if one puts to one’s side the extent of the moneys advanced to Mr K.
Further, while it is understandable that the husband has a vivid and ongoing suspicion as to exactly how much money have been advanced to Mr K, the unending squabbles over discovery and related issues have been remarkably unproductive.
I should make it clear that while I have had regard to all the materials filed and submissions made, I do not intend to chase, as both counsel did, every rabbit down every burrow. This judgment deals with the matters raised that I regard as relevant and of significance.

The Evidence as given before the Court by the husband

The husband adopted his affidavits and financial statement. He confirmed he is still paid $1,800 per week gross. He dealt in some detail with a time in 2009 when the wife ran up a total of some $5,400 in car hire. As it emerged in cross-examination, the wife’s explanation for this was believable. This is typical of the sort of over-elaborate bickering that characterised the case generally.
The husband was forced, in the ultimate, to concede that the Viridian Line of Credit taken out by the wife on the [L] property had been signed by him, albeit that he had originally said it was forged.
The husband conceded under cross-examination that while he was not aware that the mother had expended funds on her father’s monument, this was in fact the case. He also conceded that the $6,000 that the wife had advanced to her own mother upon the death of her father should not be taken into further consideration.
The husband complained vividly of the failure of the wife to keep him informed about the Viridian Line of Credit. He said he thought it was going to be used to buy an investment property. He further said that the wife had access to all his bank accounts and did Internet banking for his company, [E].
Cross-examination by counsel for the wife concentrated initially upon the husband’s qualifications as a [omitted]. He confirmed that he could still do this work but said, in effect, that the demand for such work is not present at the moment and that in any event, he derives no satisfaction from it. He said that he would make a lot less income in this form of work than he presently does.
He confirmed that his company, [E], was one in which he was the sole director and shareholder. He said, however, that after time [E] went in effect into partnership with [U] Pty Ltd. He gave evidence which I found convincing about the operations of [U] and why it was that that body no longer operates. Contrary to the position adopted by the wife, he was able in my view, entirely satisfactorily, to explain the transactions recorded in exhibit R1 about the sale of the [C] property.
The husband confirmed that when he started work as an independent [omitted], he was working for some months for six days, but that he found this too much. He said that projects had slowed down and that following his heart attack and further heart complications, he could not take the pressure. He said he used to supervise 120 people before his heart attack and associated health issues.
The husband said he thought that the [L] property was unencumbered following separation but the [P] property was mortgaged to the tune of about $200,000, this being debts arising from the operation of [E].
The husband said he had paid $18,000 towards the mortgage of the matrimonial home following separation and had sought an offset for these payments through the Child Support Agency.
The husband confirmed that in his view, payments to Mr K amounted in total to $201,000 and said he was not aware of any moneys paid back by Mr K.
The husband said that the wife’s credit card balance at separation was $15,000 on her own card and a joint card was about $30,000. He said this was paid out by [E].
The husband confirmed that he had contributed only $1,660 towards school fees of the three children since separation and that they are still all enrolled in private schools. He said that he pays Child Support at $2,200 per month and cannot afford to pay anymore.
In relation to the children’s bank accounts, he agreed that the moneys be split evenly for the children and put into trust between him and the wife. He had no objection to the funds being used for their present education.
Subject to further cross-examination, he asserted that some $29,500 (or possibly $23,000) had been received from the sale of a Ford Explorer motor vehicle which was given to the wife.
In summary, the husband asserted that he had paid $35,000 towards the mortgage and utilities since separation, together with medical insurance. He complained about claims made upon his Medibank account until November 2012, at which time he gave the wife a second card.
He accepted that the wife’s expenses from week to week were reasonable. He asserted that he had paid for [X]’s orthodontics in the garnisheed sum of $10,000.
The husband was critical of the wife’s relationship with Mr K but confirmed that separation took place one year before the final end of the relationship. He asserted that while he understood that the wife said separation took place four years earlier, they had continued to share a bedroom until final separation.
The husband confirmed that his solicitor’s costs were some $34,000. He said that he had been loaned the necessary money pursuant to a verbal agreement with his father.
The husband confirmed that therapeutic counselling for the children was likely to cost about $300 per hour but asserted that there was nothing stopping the wife from working 5 days a week and having sufficient funds to pay for such facility.
The husband accepted the sum of $3,750 as the wife’s contribution to her father’s monument, notwithstanding that she had earlier asserted a figure of $50,000 and agreed that this sum should not be added back. As indicated, the husband made a similar concession in relation to the $6,000 advanced to the wife’s mother following her father’s death.

The wife’s evidence

The wife confirmed she was employed as an [omitted] and has been working 24 hours per week until recently. She received $200 per week rent from the [L] property until settlement on 2 November 2012.
The wife confirmed that she is now working full-time and being paid $30 an hour. She anticipates working for 40 hours per week, albeit that she may lose odd hours here and there to orthodontic attendances for the children and the like.
The wife gave evidence about her responses to the specific questions she had been required to answer, provided by the father, and maintained that her answers were adequate. She confirmed that she has spent $70,000 on legal fees, which included trial costs. About $50,000 of this had been advanced by her brother pursuant to a loan verbally agreed and she would discuss this after the proceedings. She said that the remaining $20,000 had been taken as to $13,000 to $15,000 from her credit card and the remainder paid to her in cash by Mr K.
The wife confirmed that her total credit card debt is $28,000.
The wife was unable to say if the loan she presently had was the maximum available to her. She confirmed that she had not looked for other jobs. She said that this was because she had been with the family business that employs her for some eight years and would be entitled to long service after 10 years. She confirmed that she has a degree but no professional qualifications in [omitted].
The wife was cross-examined about medical insurance and confirmed that she was removed from the family insurance. Quite a bit of time was spent on this rather unprofitable area, because it was clear to me from a fairly early stage that the wife had been able to access a number of payments through the husband’s card as a result of details being with the providers that she had consulted, but that she is now using her own card.
The wife produced on the second day of trial a loan application to Westpac, together with settlement statements and CBA MasterCard records.
When cross-examined about exhibit R4, she confirmed that her income was as given on the application to the bank and that she was unable to pay more. She asserted that there was no guarantor for her loans, notwithstanding that ostensibly her salary would not appear enough to justify the loan she was able to take out.
The wife conceded that the sum spent on her credit card for her lawyers was $16,000.
The wife confirmed that Mr K is continuing to make payments on her credit cards and had been doing so for the last two to three months. She asserted that up to $4,000 might have been repaid in this way. She said that Mr K had repaid her $15,000 since separation.
When cross-examined as to the nature of her contact with Mr K, the wife, in my view, was evasive. She confirmed that she is still in a relationship with him, but described him as being peripatetic without any residential address. She said that she telephones him (presumably on a mobile phone). She said that she expects to get further moneys back from Mr K over a period of time.
The wife confirmed that the amount she accepted having been advanced to Mr K was $100,000 net (bearing in mind his repayments). She denied playing “catch me as you can” with counsel during cross-examination.
She asserted that a number of payments in the schedule prepared by counsel for the husband were double-counted. I will deal with these matters in more detail when I come to them directly.
The wife was cross-examined in inordinate length and tedious detail about the various payments said to have been paid to Mr K. This aspect of the case, of course, reflects the underlying dynamic which is the husband’s outrage at the relationship and the moneys expended.

Some observations about the credit of the witnesses

The husband was, in the main, a direct and responsive witness, but he was quite unable to conceal his ongoing tumult and anger about the wife’s infidelity and its financial consequences. This emerged at every step of the way. At one stage he said with some emphasis, “We have been screaming for discovery.” This reflects the ongoing obsession he has, that the wife has in some fashion been able to conceal the full extent of her perfidy in giving moneys to Mr K.
This obsession (upon which he has expended very substantial amounts of money through his lawyers), is as understandable as it has been relatively unproductive, for reasons which will emerge. Nonetheless, I found the husband generally to be a believable witness whose answers were given, albeit angrily, with sincerity.
The wife’s evidence was likewise in the main generally persuasive. She responded reasonably cooperatively with counsel’s often hectoring questions. Nonetheless, there were some aspects I found unpersuasive.
I found the wife’s evidence about the nature of her relationship with

Mr K to be evasive and incomplete. She is still in a relationship with him and is, therefore, clearly in an intimate relationship with him. This being so, her professed lack of understanding as to Mr K’s whereabouts and circumstances is not one I am prepared to accept.
With this exception, however, I do not generally regard the wife as in any way a bad witness. Her demeanour in the witness box was restrained and reasonably dignified, in the circumstances, and I thought her answers were generally properly responsive to the questions put.

In short, subject to the reservation I have expressed above, I think she was an honest and believable witness.

The First Step

Is it just and equitable to make an order adjusting the property interests of the parties having regard to their legal and equitable interests pursuant to s.79(2) of the Family Law Act 1975 (the Act)?
The High Court has made it clear in the decision of Stanford v Stanford [2012] HCA 52, that the Court does not and should not embark upon an exercise pursuant to s.79 of the Act to work out what property settlement between the parties is just and equitable until the antecedent exercise is taken pursuant to s.79(2) as to whether there should, indeed, be any adjustment to property orders at all.
The High Court did, however, make it plain in Stanford that this would, in most marriages, be a relatively straightforward task and this case, in my view, falls squarely within that range. Here, the basis upon which the parties have conducted their affairs during the relationship was radically altered by its termination and it is plainly just and equitable that there should be an adjustment.

The Pool

Despite all the sound and fury that has been expended upon the matter, the assets of the parties to this relationship are not difficult to define. They are set out in the aide-memoire that constitutes document MFI-1:
“Equity in real property at [address omitted], [P]          $322,000;
Telstra Shares  $2364;
…
Furniture and chattels  $5000.”
It was strongly submitted by counsel for the wife that the chattels should be given a nil value and while I accept that there are no formal valuations, I also accept counsel for the husband’s submission that the $5,000 indicated in the wife’s financial statement should be taken as an admission against interest. The fact is that she retained, to all effects and purposes, all the chattels that the parties had previously owned upon separation.

Liabilities and Add-Backs

“The husband’s legal fees paid from the Line of Credit $34,428.”

Superannuation

“Wife’s superannuation $40,675;
Husband’s superannuation $123,159.”

Disputed Liabilities – the $100,000 loan from the husband’s parents

Much debate took place about the Victorian case of Ogilvie & Adams [1981] VR 1041. As with most issues in this case, the parties did not agree with what it meant.
Counsel for the wife submitted that the net effect of Ogilvie & Adams was that the loan being a loan of money simpliciter meant that the debt ran forthwith from the time the moneys were advanced. In this regard, Fullagar J said at page 1043:
“Therefore if A lends money to B, then instantly B is detaining A's money. In order to prevent a cause of action for recovery arising in A instantaneously on paying the money, the parties must expressly contract out of that situation by words clearly inconsistent with that situation. The courts have long since settled it that a mere statement or agreement that the money is repayable on demand (or request or at call) is not sufficient to contract out of that situation where all else that is known of the terms of the contract is that A has paid money to B by way of loan.”
His Honour cited substantial authority for that proposition, to which he returned at various times during his judgment.
At page 1051, Fullagar J continued:
“And the law says (and has said for a very long time) that the description of loan (repayable on demand or repayable on request) is used in contradistinction to loans where something must be done, or must happen, in order to constitute a cause of action in the lender for recovery of the money. In truth, a loan repayable on request (or on demand, or on call) is "a loan simpliciter". It is quite different if the parties choose to say "being a loan upon terms that the money shall be repayable on three days notice" or (which is the same thing) "upon terms that the money shall be repayable three days after demand made". The law is settled that where a loan is said to be of that kind which is recoverable on request, or on demand, it means of that species which is continuously recoverable at all times from the moment of the creation of the relationship of debtor and creditor.”
Here the loan document which is annexure CLA-1 to the affidavit of Mr A filed 24 July 2012, is relevantly in the following terms:
“The Debtor acknowledges that it is a term of the loan that the said debt be repaid within thirty (30) days of notification in writing being given in that regard by the Creditors.”
With the greatest of respect, it is not entirely clear to me that the differentiation identified by Fullagar J in Ogilvie & Adams is as clear as his Honour suggested. To say that money repayable on demand where there is no time for the demand to take effect is utterly different in substance from a situation where the demand requires a particular period of time seems to me to an extent to be a distinction without a difference. The proposition analysed by Fullagar J at page 1051 seems to me to be equally applicable to both allegedly different sorts of loan:
“I can think of no reason why the parties would require the loan to be capable of continuing for 20 or 50 or 200 years and then to be recoverable at once upon demand made.”
The same observation might be said to apply to this sort of loan where the period for repayment is thirty (30) days from the demand.
I note that the husband’s father has deposed that inter alia;
a)he and his wife loaned the husband $100,000 in 1995 to build his family home;
b)they loaned the same amount to their daughter, who has repaid the moneys in full in 2005;
c)“I did not ask for the funds to be repaid until after the separation of [Mr Gans] and the wife as I was always confident that they would repay the loan”;
d)“After separation I thought my loan may have been in jeopardy and that there was a risk I would not be repaid. Accordingly, on 14 February 2012 I instructed my solicitor, Mr A, to demand payment of the unpaid debt;
e)“I am 72 years of age and I am relying on the loan funds to be repaid since my wife and I are now in retirement.”
The witness was not required for cross-examination, and I must, therefore, accept the truthfulness of the evidence given in the sense that I must accept that the deponent was honest when he swore his affidavit.
This does not mean, however, that I am required uncritically to accept his assertions.
The loan was taken out in 1995 and it is quite clear that it was not a loan in the ordinary sense. There was no term as to repayment and no interest. It was a complete indefinite alienation of $100,000 in favour of the husband by his parents.
True it is that his sister received a similar loan and repaid it. Nonetheless, there is no evidence of any sort of demand by the husband’s father until, as is understandable, he became concerned that the husband and wife were separating.
In circumstances where the loan had been permitted to lie dormant for some 17 years, the assertion that, absent separation between the parties, the husband’s parents would have sought their money back seems to me utterly incredible. It flies wholly in the face of the objective evidence about the loan.
Likewise, the assertion that the husband’s father was relying upon the money for his retirement falls to be considered in the light of commonsense. At the age of 72, it is reasonable to suppose that the husband’s father had been retired for some time, and there is no suggestion that he ever contemplated taking the loan back.
In my opinion, on the facts of this case, the $100,000 should not be added back into the pool. It is, of course, however, a significant contribution made to the father’s benefit which calls to be considered under the question of contributions.
In the circumstances, it is not necessary for me to arrive at a conclusion as to the effect and force of Fullagar J’s remarks in Ogilvie & Adams, and despite the doubts I have expressed, I should make it clear that I do not do so.

The amounts involving Mr K

This, of course, is what this case was all really about. Enormous amounts of time were expended in both compiling and answering questions and answers and in the end it boils down to the matters set out in the document I have marked Exhibit MFI-2, helpfully prepared by the husband’s legal advisers, which sets out the various areas of dispute.

Viridian Line of Credit

In my opinion, there is no real dispute that the amount paid out at the settlement of the [L] property was $159,712.52. It seems reasonably clear that all these moneys were paid out by the wife to her own benefit one way or the other, albeit that not all may have been paid to Mr K. I accept that there should be a deduction for the Mercedes motor vehicle in the sum of $23,005.40, leaving a total of $136,707.12.

Commonwealth Bank Line of Credit in the name of [E]

While I accept that the wife had at least some access on the internet to the accounts of [E], I have no doubt, having heard the wife’s evidence, that her answers about this are to be accepted. The amounts totalling $93,641.89 set out in exhibit MFI-2 were all clearly expended from time-to-time on matters to do with the husband and household expenses. True it is that the husband made cheques available to the wife from time-to-time on demand, and true it may also be that the wife could, in theory, have extracted further funds from those amounts made available to her.
However, having seen and heard the wife give her evidence, I believe her answers in this regard. It is clear that she conducted her frolic with Mr K through the avenue of the drawdown on the [L] property and that she left the moneys in the [E] account alone. It is reasonably clear that the husband would have noted any untoward behaviour by the wife in this regard. Clearly, moneys advanced to pay bills, if not applied to that purpose, would have produced problems long ago.

Commonwealth Bank Streamline account in the name of

Ms Albert

The loan to Mr K of $2,500 must be added back. The moneys spent in [omitted] were spent by the wife on herself. She is entitled to spend money on herself to an extent. The pursuit of this trivial sum is typical of the way in which this case has been conducted.

Commonwealth Bank Visa account in the name of Ms Albert

The hire of prestige motor vehicles in March and April 2009 should be reduced by $5,000 to take into account the bond of $5,000, producing a total of $7,230.
I do not propose to traverse each item in the schedule seriatim. The wife took issue with the following payments:
“4 September 2009 in the sum of $237.70;
24 October 2009 for the purchase of alcohol (Mr K does not drink) $83.99;
19 November 2009 Office furniture purchased $524;
19 November 2009 advertisement with Carsales $80;
20 February 2010 hotel expenditure $130;
2 March 2010 hotel expenditure $159.12;
4 March 2010 hotel expenditure $107;
19 July 2010 $6,000 given to the wife’s mother;
September 2010 expenses in Sydney which she said were her own in the total of $1,154.20;
30 September 2010 Kwik Kopy Printing for the children’s homework $66.00.”
This measure of detail is disturbing and alarming and merely reflects the vindictive way in which this case has been conducted by both sides. I do not propose to dignify it by detailed reasons. Having heard and seen the wife give what, to me, were plausible explanations, I accept her denials of those amounts.
I also accept that there is a measure of double-counting insofar as a number of these expenses are also replicated and repeated in the Viridian Line of Credit debt. It is not, however, possible to quantify the double-counting with absolute precision.

Myer Visa credit card account in the name of Ms Albert

The wife continued her opposition to the inclusion of alcohol expenses on 5 February 2010 for $75, but otherwise accepted that all of the total of $14,945.41 was payable in respect of Mr K.

CPA Australia Amex account in the name of Ms Albert

The wife only challenged the stationery payment on 24 May 2010 in the sum of $318.80.
Once again, I uphold the wife’s objections in this regard.

Matters double-counted in the Viridian Line of Credit

I have already referred to the $23,005.40 which is for the Mercedes motor vehicle, which counsel for the husband accepts.
I also accept that the wife spent $3,750 for her father’s monument from this Line of Credit account. (It is not clear where the $6,000 given to the wife’s mother – the other figure conceded by the father not to be added back – came from).
I note that although unable to give definite figures, the wife said that about $85,000 to $90,000 of the $136,707.12 was payable in respect of Mr K, although she put a figure of some $20,000 that has been applicable to interest and bank fees and charges.

Conclusion on the methodology used to assess the add-backs in relation to Mr K

It should be noted that I do not propose to sit down in the same way as the parties have and conduct an exhaustive red ink, calculator-in-hand approach to the add-backs. This is not through a lack of proper application or a failure to appreciate that this is all money that should be added back because the wife has already inappropriately spent it. Rather, it is because it is clear on my view that the evidence is not sufficiently precise to enable this to occur in a fashion that would be just and equitable to both parties.
It is true that the wife has not responded as she should have responded to the various requests for discovery and information. Nonetheless, her demeanour in the witness box did not suggest to me, as counsel so vigorously put it to her, that she was playing “catch-as-catch-can”. While the wife obviously has a degree, she is not a person with any professional qualification. She did not impress me as being as dishonest and manipulative as the husband’s case would put it. I think that she complied as best she felt she was able from time-to-time with requests for information, and if I am wrong, then so be it.
Likewise, it is scarcely surprising that events as long ago as 2009 may not be wholly cross-referenced and clearly indexed. I do not know for certain how much of the Viridian Line of Credit debt is duplicated in the other accounts. I will have to do the best I can.
Taking this approach, I note that the following subamounts of the debt should be included.

Viridian Line of Credit

$133,000 (rounding-off after removing $3,750 for the wife’s father’s monument and the motor vehicle $23,000).
I also remove the $13,000 repaid by Mr K, which produces a total of $120,000.
I note that this figure, if one excludes the figure of some $20,000 of interest and bank fees and charges, is not so very far from the wife’s own assertions as to the amount owing.

[E] account

Nothing should be added back from this account for the reasons already given.

Commonwealth Bank Streamline Access account

$2,500 should be added back from this account.

Commonwealth Bank Visa account in the name of Ms Albert

If one removes the matters disputed by the wife from the total of $43,989.29, which I accept should be deducted (see paragraphs 93-95 above, the total is $8,524.29), the resultant total rounded-off is $35,450. I will return to this matter.

Myer Visa credit card account in the name of Ms Albert

If one takes off the matters denied by the wife, this produces a figure rounded off of $14,900.

Amex account

For the reasons given, only the materials for Tyres Direct should be added in the sum of $2,100.

Conclusion on the total moneys advanced to Mr K

The total of these figures is $174,965. As I have indicated, one of the things I do not know is the extent to which the matters itemised under the Commonwealth Bank Streamline Access account, Commonwealth Bank Visa account in the name of Ms Albert, the Myer Visa credit card account in the name of Ms Albert and the Amex account were in fact replicated in the Viridian Line of Credit.
While doubtless the husband would say that these were matters for the wife to prove bearing in mind that it was she who dispersed these moneys and had control for all relevant purposes over these accounts, I think the matter is more complex than that.
The husband is seeking a dollar for dollar adjustment in the wife’s property settlement in respect of the Mr K add-backs, if I so may describe them. Both parties proceeded on that footing. It is, therefore, not just and equitable that the ultimate amount as it were subtracted from the wife be greater than in fact it was.
As I have indicated earlier in these reasons, it scarcely surprising that the sort of amounts and accounts with which we are dealing cannot be wholly cross-referenced and indexed.
The picture that emerged for me was that the Viridian Line of Credit was the line of credit that the wife used to conduct her affairs and acted, so to speak, as her bank account. Her only other available source of funds were her wages and so far as I recall there is no evidence what the wife did with her none-too-munificent wages. There is certainly no evidence she applied her wages to her credit cards.
The other accounts are in the main credit card accounts. The moneys to pay these accounts must in the main have come from elsewhere and the obvious place to look for them is the Viridian Line of Credit account.
By the same token, however, it is clear that the wife underestimated the amounts that she had spent on Mr K.
Neither side was able to trace the credit card details into the Viridian Line of Credit and this is clearly not a matter for criticism of either party. Payments made on the various credit cards from time-to-time would have been made in lump sums which would not be readily capable of being translated to the individual items in the actual credit card accounts.
In circumstances like this there is a clear factual conclusion, namely that there is more probably than otherwise a very considerable measure of double-counting between the credit card accounts in particular and the Viridian Line of Credit account (I do not make the same assumption in relation to the Commonwealth Bank Streamline Access account because it is not a credit card) but it is impossible to quantify it. The Court, in my view, in order to do justice and equity must take a robust approach.
The difference is between the $120,000 applicable to the Viridian line of Credit and the total with the other accounts taken into consideration of $174,965 (of which $2,500 relates to the Commonwealth Bank Streamline Access account which I do not accept involved any double-counting). In my opinion, the proper conclusion is that the total applicable to the wife should be rounded out at $122,500. This figure reflects the $120,000 (Viridian) and the $2,500. Although it is possible that the amounts reflected in the credit card amounts were not entirely paid from the Viridian Line of Credit, the evidence is not sufficient to say how much, if anything, the amounts were. I can only include amounts I am sufficiently satisfied are proved on the evidence.
It should be noted that although I have not added back the $6,000 advanced to the wife’s mother, I have not subtracted it either. There is no evidence where the funds came from.

Superannuation

I think it is agreed that the husband’s superannuation is worth $123,159, and the wife’s, $40,675.

Contribution

Perhaps unsurprisingly, having wallowed in such detail through the property pool, the contribution issues may now be seen to be relatively straightforward. At the commencement of the relationship the parties’ assets were, really, essentially, roughly equal. The husband was well on his way to building and owning outright the former matrimonial home and the wife already owned another property. The respective values of the two properties at the same time are not the subject of expert evidence, but would appear to be roughly the same. The husband had bought the block for $56,000 and applied the $100,000 from his parents to the matrimonial home. The wife’s property was worth $150,000 and had a small mortgage.

Thereafter, as the Family Report writer, Ms S, records, the parties lived a rather conventional lifestyle in the sense that the husband worked and made the money and the wife looked after the children and the home. She also contributed by way of earnings, both before the birth of the first child and indeed thereafter, when she was eventually able to go back to work.
Including as I do the husband’s parents’ gift of $100,000, it is really quite apparent that looked at over such a long relationship, the contributions of the parties should be taken as equal. It is not, in my view, necessary to say more than this.

Section 75(2) factors – future needs

Here, the husband makes about $90,000 a year and the wife will make less than that on any view. Assuming full-time work for 40 hours per week at $30 per hour, she will earn $1,200 a week, or roughly $60,000 per year.
I roundly reject the unnecessarily uncharitable insinuations that each party makes about the other’s capacity to earn money. It is entirely reasonable that the husband should not return to work as a [omitted], this being work he has not done for a long time, which he does not want to do because it would be unsatisfying for him and which, in any event, according to his unchallenged evidence, is in any event unavailable. Likewise, the assertions that the wife should leave secure and satisfactory employment in pursuit of further earnings in circumstances where she has no professional qualification, even though she has a degree, is similarly uncharitable and inappropriate.
The health of the husband is severely impacted by his heart attack and the attendant stress and problems. To suggest that he should be out earning more, and killing himself by inference by doing so, is an extremely regrettable innuendo and one I am not prepared to give any weight to. Nonetheless, and despite his health problems, the husband will clearly earn about 50 per cent more than the wife on any on-going basis. He will of course pay Child Support at least until 2018.
Likewise, the wife’s health is also poor and she will have the care of the children to at least an extent for some years to come.
In my view, there should be a 10 per cent adjustment in the wife’s favour in this regard.

Just and equitable

In my opinion, the just and equitable disposition of this matter will well and truly be reflected by an order that splits the pool 60 per cent in favour of the wife and the superannuation of the parties in like proportion.
The husband’s position was that I should award up to 57 ½ per cent to the wife and superannuation be split equally whereas the wife’s position was that superannuation not be split at all. Each side clearly wants to maximise their cash position.
In my view, the same considerations that apply in relation to the contribution and future needs matters apply to superannuation as they do to the pool generally. The vast bulk, almost the entirety, of the husband’s superannuation and the wife’s superannuation were earned during the relationship. I have already dealt with the parties contributions and do not need to repeat what I have said.
In terms of future needs both these parties will need superannuation in all probability at about the same time. The husband’s capacity to amass superannuation will be greater than that of the wife as his earnings will be greater and, in my view, it is eminently appropriate that the superannuation be pooled and divided as between the parties as a discrete issue at this stage.
I will give the parties an opportunity to confer and produce orders to give effect to these Reasons for Judgment. I note that it has always been the wife’s position that she should be able to retain the family home. Much will depend upon whether or not this is practicable, although it is clearly desirable if possible.
In the event that the parties are unable to come to agreement (something that would not be surprising given the bitterness with which this litigation has been conducted), I will list the matter for further hearing.

I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Associate:

Date: 11 April 2013

Addendum/Corrigendum

It has been drawn to my attention that the Reasons for Judgment as originally published contained an internal inconsistency.
In paragraph 2, I said that:
“The wife should obtain 65 per cent of the non-superannuation asset pool and that the parties’ superannuation should be split evenly.”
At paragraph 134, I said:
“The just and equitable disposition of this matter will well and truly be reflected by an order that splits the pool 60 per cent in favour of the wife and the superannuation of the parties in like proportion.”
Counsel was correct to draw my attention to this matter, which as I explained in Court arose from an editing error in circumstances where the final editing of the Court took place under considerable pressure of time.
Paragraph 2 should have read:
“For the reasons that follow, I think that the property pool should be divided as to 60 per cent in favour of the wife and the superannuation of the parties in like proportion.”

I certify that the preceding five (5) paragraphs are a true copy of the reasons for judgment of Federal Magistrate Burchardt.

Associate:

Date: 19 April 2013