Jewel v Jewel

[2013] FCWA 81

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: JEWEL and JEWEL [2013] FCWA 81

CORAM: WALTERS J

HEARD: 18 & 19 JULY 2013

DELIVERED : 9 AUGUST 2013

FILE NO/S: PTW 5193 of 2011

BETWEEN: CATHERINE JEWEL

Applicant

AND

CARL JEWEL
Respondent

Catchwords:

FAMILY LAW – PROPERTY – alteration of property interests under the Family Law Act (1975) (Cth) – consideration of the parties’ respective contributions – where the husband failed to make full and frank disclosure of his financial position – where the husband has significant tax liabilities – where no weight given to current tax penalties and accounting costs incurred – consideration of the High Court's decision in Stanford (2012) 87 ALJR 74

Legislation:

Family Law Act 1975(Cth), s 72(1), s 79, s 79(2), s 79(4)

Category: Not Reportable

Representation:

Counsel:

Applicant: Ms G Anderson

Respondent: Self Represented Litigant

Solicitors:

Applicant: David Mizen

Respondent: Self Represented Litigant

Case(s) referred to in judgment(s):

B & B [2006] FamCA 883
Baker and Darzi [2013] FCWA 16
Bevan & Bevan [2013] FamCAFC 116
Biltoft & Biltoft (1995) FLC 92-614
Black & Kellner (1992) FLC 92-287
Bonacci & Bonacci [2012] FamCAFC 15
Bremner& Bremner (1995) FLC 92-560
Briese & Briese (1986) FLC 91-713
C & C (2005) FLC 93-220
Cerini & Cerini (1998) FamCA 143
Chang v Su (2002) FLC 93-117
Clauson & Clauson (1995) FLC 92-595
Erdem & Ozsoy [2012] FMCAfam 1323
Ferguson and Ferguson (1978) FLC 90-500
Ferraro & Ferraro (1993) FLC 92-335
G & G [2004] FamCA 1179
Giunti & Gianti (1986) FLC 91-759
Gould & Gould & Gould (2007) FLC 93-333
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
K & K [2002] FamCA 1150
Kowaliw & Kowaliw (1981) FLC 91-092
Lee Steere & Lee Steere (1985) FLC 91-626
Marello & Marello [2013] FamCA 254
McMahon & McMahon (1995) FLC 92-606
Mezzacappa & Mezzacappa (1987) FLC 91-853
Money & Money (1994) FLC 92-485
Nemeth & Nemeth (1987) FLC 91-844
Norbis v Norbis (1986) 161 CLR 513
Oriolo & Oriolo (1985) FLC 91‑653
OSF & OJK (2004) FLC 93-191
Pastrikos & Pastrikos (1980) FLC 90-897
Pierce & Pierce (1998) 24 FamLR 377
Re Chemaisse; Federal Commissioner of Taxation (Intervener) (1990) FLC 92-133
Re F

Litigants in Person Guidelines (2001) FLC 93-072

Russell v Russell (1999) FLC 92-877
Saxena & Saxena (2006) FLC 93-268
Schopp & Schopp [2013] FCCA 4
Stanford v Stanford (2012) 87 ALJR 74
Townsend & Townsend (1994) FLC 92-569
W and W (1980) FLC 90‑872
Waters & Jurek (1995) FLC 92-635
Way & Way (1996) FLC 92-702
Weir & Weir (1993) FLC 92‑338
Whitely & Whitely (1996) FLC 92-684
Williams & Williams (2007) FamCA 313

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

Preamble

1In these Reasons, and unless otherwise indicated:

a)all statements of fact comprise findings of fact;

b)I have referred to the parties as the husband and the wife (and I mean them no disrespect by doing so) – because it is less confusing than referring to them as the applicant and the respondent; and

c)I have not drawn a distinction between proceedings or events before a family law magistrate and proceedings or events in the Family Court of Western Australia.

Background and brief procedural chronology

2The husband was born [in] 1963. The wife was born [in] 1965. They commenced living together in 1988, and married [in] 1993. They separated in late December 2007. It follows that their relationship lasted approximately 19 years. They are not yet divorced.

3There is one child of the marriage – [Andrea] (who was born [in] 1992). Andrea is now an adult and lives independently.

4Both parties have children from previous relationships. The husband has a son, who was born in 1986. The wife has a son and a daughter, who were born in 1984 and 1986 respectively.

5The husband [is self-employed], although he describes himself as having been "employed" by [Company D] for approximately 8 ½ years: see Part C of the husband's financial statement sworn 4 June 2013. The wife is [a] security officer. She has been employed in this capacity for approximately 7 years. Her employer is [Company I]

6The wife filed an initiating application on 21 September 2011. She sought orders by way of property settlement only. The husband filed a document which purported to be a response to the wife's initiating application on 9 November 2011. On 10 February 2012, he filed what is effectively an amended response. He also sought orders by way of property settlement only.

7The wife was represented by solicitors at all relevant times. The husband was self represented. His approach to the litigation – until trial – was confrontational and obstructive. He made no attempt to comply with his obligations regarding full and frank disclosure of his financial position. He clearly resented the wife's attempts to persuade him to participate constructively in the proceedings in this Court. His attitude in this regard was immature and irresponsible. It was also inexplicable – and, indeed, he made no attempt to explain it during the course of the trial.

8On the first return date of the wife's initiating application (being 19 October 2011), the husband was ordered to file and serve a response and financial statement by 9 November 2011. A conciliation conference was fixed for 26 March 2012.

9On 30 November 2011, the husband was given until 10 February 2012 to file and serve an amended response setting out (with precision) the orders that he sought.

10The conciliation conference was held on 26 March 2012. It was unsuccessful. Various orders and directions were made sending the matter for trial. Among them was an order to the effect that the parties were to "file and exchange with each other" their trial affidavits, affidavits of relevant witnesses and updated financial statements. This was to occur "not later than 21 days prior to the date fixed for the Readiness Hearing".

11On 8 May 2013, the time within which the husband was to file and serve his trial affidavit, updated financial statement and any supporting affidavits was extended to 4 June 2013. Other procedural orders were also made on that day.

12The wife's trial affidavit was filed on 29 April 2013. Her updated financial statement was filed on 6 May 2013. The husband's trial affidavit and updated financial statement were both filed on 4 June 2013. The husband filed a further affidavit on 9 July 2013, very shortly before the commencement of the trial.

13The trial commenced on 18 July 2013. It occupied one and a half days.

Relevant financial and other history

14As indicated above, the parties commenced cohabitation in 1988 – after both had been in previous relationships. The husband had one child; the wife had two children.

15At the commencement of cohabitation, the husband had some household items and a motor vehicle, but little else. The wife also had household items (although more of them than the husband had) and a motor vehicle. She also had an interest in a residential property in [Suburb H].

16The Suburb H property was registered in the name of the wife and her previous de facto husband (Mr [B]) in April 1987. The wife and Mr B sold the property in October 1988 – after the husband and the wife commenced their relationship. It was sold for $72,000. The wife and Mr B each received $11,000 after the discharge of the mortgage encumbering the property.

17The wife said that the amount of $11,000 received from the sale of Property H was "put into the relationship" (being the relationship between the husband and the wife). The husband did not challenge her assertion in this regard – although in his trial affidavit he said that she used the $11,000 to purchase a motor vehicle (seemingly because the vehicle in her possession at the commencement of cohabitation belonged to her father).

18The parties' daughter, Andrea, was born [in] 1992.

19A few months later (in August 1992), the parties purchased a residential property in [Suburb B]. The Suburb B property became the parties' matrimonial home. It was registered in the names of the husband and the wife as joint tenants.

20The parties married [in] 1993.

21It appears that the wife's two children from her relationship with Mr B lived with the parties in the Suburb B property.

22The wife worked in paid employment for the vast majority of the time after the parties commenced cohabitation. She was unable to work from August 2001 to February 2004, as a result of a workplace injury and complications arising from osteoporosis (which the wife developed during the same period).

23Annexure CJ13 to the wife's trial affidavit reveals that the wife arranged for up to $4500 to be released from her [Superannuation Fund] in mid 2004. According to the letter dated 22 July 2004 from Australian Prudential Regulation Authority to the wife, the early release of this sum was –

... required to enable you to make a payment on a loan, to prevent:

·foreclosure of a mortgage on your principal place of residence; or

·exercise by the mortgagee of a power of sale of your principal place of residence, and you do not have the financial capacity to meet that expense.

24According to the wife, the amount that she actually withdrew from her Superannuation Fund in mid 2004 was approximately $1120 – which sum was significantly less than the amount of approximately $4500 which had been approved for release.

25In paragraph 15 of her trial affidavit, the wife deposed as follows:

... In 2005 I had a severe bout of depression which resulted in me attempting to commit suicide ... I was treated with 150 mg Prozac. I required counselling.

26In 2005, 2006 and 2007, the parties purchased and in some cases sold (or traded in) motor vehicles, a boat and trailer, quad bikes and motorcycles. The sources of the funds utilised for the various purchases are unclear.

27The wife asserted that the husband "never helped with house work or cooking and rarely with gardening", and that he "was always stopping at the pub and mates' houses after work, sometimes for many hours and overnight". In paragraphs 10 and 11 of his trial affidavit, however, the husband said:

[The wife] and I equally contributed to the financial obligations of the house. [The wife] contributed very little to building the patio, floor tiles, brick paving, fencing as I was the one who installed them.

[The wife] did the majority of the house work and cooking and gardening. I helped out when I could. I did all of the maintenance and building to both of the properties.

28As explained above, the parties separated in late December 2007. The husband continued to live in the Suburb B property; the wife left the property and stayed elsewhere. In February 2008, the parties purchased a second residential property in [Suburb W]. The wife then moved into the Suburb W property. The Suburb W property was registered in the names of the husband and the wife as joint tenants. The wife continues to live there.

29It appears that the purchase price of the Suburb W property was $378,000. In order to facilitate the purchase, the parties borrowed just over $400,000. According to a schedule headed "Applicant's income and mortgage payments" – which was handed up by Ms Anderson (counsel for the wife) on 18 July 2013 – the "opening balance" owing in respect of the mortgage as at 28 February 2008 was $401,307. The schedule reveals that the wife made monthly payments of $3088 towards the mortgage for a period of approximately 9 months. During the 2009 calendar year, she made monthly payments of $3200 towards the mortgage. During the 2010 calendar year, she made fortnightly payments of $1279.50 towards the mortgage. Her payment schedule from that time is unclear, although the schedule reveals that the wife paid a total of $33,958.50 towards the mortgage in 2011, $28,843.40 in 2012 and $16,888.75 in 2013. The schedule also reveals that the total amount the wife has paid towards the mortgage encumbering the Suburb W property – since it was purchased in February 2008 – is $179,136.65.

30According to the wife, she had "minimal furniture" when she commenced living in the Suburb W property (because the parties' furniture was left in the Suburb B property). As a result, she purchased furniture and chattels – using her credit card – in order to furnish the Suburb W property. According to the husband, the wife was permitted to take whatever items she chose from the Suburb B property, and did so.

31At the date of separation, the wife's superannuation entitlements had a value of approximately $23,250: see exhibit W3.

32There was some disagreement between the parties regarding a flat screen television. The wife asserted that the husband had not permitted her to remove it from the Suburb B property. The husband said that he had made the television available for the wife when she requested it, but she had not seen fit to collect it. Nothing turns on the disagreement, and the parties have agreed that the wife is to retain the television – which remains available for her to collect.

33According to the wife, both parties "got involved with new relationships" shortly after separation. Both relationships were unsuccessful. In 2009, the wife commenced a relationship with [Mr N]. They "maintain separate residences" and are "each responsible for (their) owned properties and expenses" (see paragraph 22 of the wife's trial affidavit).

34The husband later commenced a relationship with [Ms M], with whom he now lives in the Suburb B property. The husband and Ms M are engaged. They have a son, who is aged approximately 14 months. Ms M's three children from previous relationships (aged 17, 14 and 13) also live in the Suburb B property. Ms M receives child support for the three children from their fathers. She also receives Government allowances or benefits, but has no income from paid employment.

35At the commencement of the parties' relationship the wife's income was relatively modest, but it increased gradually as her work responsibilities grew. By 2006, she was earning "up to $800 per week including allowances". During 2006, she "took night classes to obtain TAFE certificates" to enable her to work in the security industry. She has worked in the security industry since that time. Over the past five years, her annual earnings have varied between approximately $48,500 and approximately $74,500.

36The husband was employed in a variety of positions "earning between $300-$1200 per week mostly cash in hand". His main employment was as a [sub contractor]. It is unclear whether the husband earned more than the wife during the relationship.

37According to exhibit W1 and the evidence of Mr [P] (who is a director of corporate entities associated with Company D), the husband was "employed" by [Company D] in April 2005 as a [sub contractor]". He was "employed" on the basis of being "an all in Contractor". Thus, he was to provide his own workers compensation insurance, superannuation, long service leave and motor vehicle.

38According to exhibit W2, Company D "employed" the husband "as a subcontractor". Exclusive of GST, the husband was paid approximately –

a) $61,750 in the 2010 financial year;

b) $51,850 in the 2011 financial year;

c) $62,000 in the 2012 financial year; and

d)$41,000 in the 2013 financial year.

39During the course of his evidence, Mr P said that the husband works approximately 40 hours per week and that he could currently invoice Company D at the rate of approximately $40 to $45 per hour (exclusive of GST). He has been provided with a fully maintained motor vehicle for at least the past year or two (and probably much longer). As a result, he invoices Company D at a lower rate – being something in the order of $35 to $40 per hour. It follows that the provision of a fully maintained motor vehicle "costs" the husband approximately $200 to $400 per week.

40According to the husband's financial statement sworn 4 June 2013, his "total salary or wages before tax" – presumably, his gross income – is approximately $1350 per week. He has no superannuation entitlements.

41Exhibit W6 comprises a copy of a Commonwealth Bank home loan/investment home loan application form. The application form relates to the loan obtained for the purpose of purchasing the Suburb W property in early 2008. It records that the amount of the loan is $400,450. It seems that the parties had just under $5000 in another account. As indicated above, the parties agreed that the purchase price of the Suburb W property was approximately $378,000. In other words, the entirety of the purchase price of the Suburb W property was borrowed from the Commonwealth Bank.

42It is apparent from exhibit W6 that the parties advised the bank that:

a) the husband's annual income was $79,900;

b) the wife's annual income was $39,234;

c)the husband had been employed by Company B (a company associated with Company D) for 11 years 5 months;

d) the wife had been employed by Company I for 6 years 10 months;

e)they owned a Toyota vehicle valued at approximately $12,500 and [another] vehicle valued at approximately $18,000; and

f)they had minimal savings.

43After separation, the husband (who was effectively self-employed) continued to work and earn income, but failed to lodge Business Activity Statements and income tax returns. As a result, he failed to remit GST and failed to pay income tax. When he was asked – during the course of his evidence – why he ignored his responsibilities in relation to income tax and GST, he said that he did not file the relevant statements or returns because he "didn't care". Since the commencement of these proceedings, however, the husband has taken steps to put his taxation affairs in order. This subject is discussed elsewhere in these Reasons.

The husband was self represented

44As indicated above, the husband was self-represented. As a result, I was very conscious of the obligation upon the Court to provide a fair trial – for both parties. I am aware of the guidelines regarding the manner in which a judicial officer should deal with unrepresented litigants, and the associated discussion contained in Re F: Litigants in Person Guidelines (2001) FLC 93-072 (and, in particular, paragraphs 209-253 of that decision). I applied those guidelines during the course of the proceedings, and am comfortable that the trial was fair. In summary:

a) Procedural fairness was afforded to both parties.

b)The “mechanics” of the trial, and the right of the husband to cross-examine the wife, were explained to him.

c) Other relevant procedures were explained to the husband as they arose.

d)I explained to the husband that he had the right to object to inadmissible evidence, and explained to him – in very broad terms – the types of evidence that might be considered inadmissible.

e)Where appropriate, I attempted to clarify the substance of the husband’s submissions.

f)Where appropriate, I took steps as authorised by the Full Court in Guideline #9 in paragraph 253 of the decision in Re F: Litigants in Person Guidelines.

45In Saxena & Saxena (2006) FLC 93-268 at [36] and [37], Coleman J emphasised that the guidelines referred to in the previous paragraph “were no more than the name implies” and that they “derive from the broader considerations of natural justice, implicit in which is the recognition that for a litigant in person to be afforded natural justice and procedural fairness, that litigant must have some appreciation of just what is going on”. His Honour added that the Court must be concerned with “the spirit rather than the strict letter of the guidelines”.

46In the present case, the husband participated in the trial process as fully as he could. I have no doubt that he understood exactly ‘what was going on’ at all times. I also have no doubt that he fully understood the contents of all documents relied upon during the course of the proceedings.

Documents relied upon

47The wife relied upon her initiating application filed 21 September 2011, her trial affidavit sworn 26 April 2013 and her financial statement sworn 4 May 2013. Her Papers for the Judge were filed on 10 July 2013.

48The husband relied on his amended response filed 10 February 2012, his trial affidavit sworn 4 June 2013, a subsequent affidavit sworn 9 July 2013 and his financial statement sworn 4 June 2013. His Papers for the Judge were filed on 9 July 2013 (although a chronology had been filed on 4 June 2013).

Orders sought

49In broad terms, the wife sought orders to the effect that the property available for distribution between the parties be divided on the basis of 65 percent to her and 35 percent to the husband. She proposed that the husband retain the residential property in which he is currently living (the Suburb B property), and that she retain the residential property in which she is currently living (the Suburb W property).

50There is no need to reproduce the orders sought by the wife in these Reasons. They are set out in her Papers for the Judge.

51It is important to note, however, that the wife included certain items in the list of property available for distribution between the parties which (I have concluded) should be excluded from the list. Similarly, the wife made no allowance for moneys owed to the Australian Taxation Office by the husband.

52The husband proposed that the property available for distribution between the parties be divided equally between them. He agreed that the wife should retain the Suburb W property and that he should retain the Suburb B property. He also agreed that each party should become solely responsible for (and indemnify the other party in relation to) the mortgage encumbering the property that he/she is to retain.

53In his Papers for the Judge, the husband proposed that the wife pay 50 percent of her superannuation entitlements to him, together with an amount of $5500. The effect of this proposal, I assume, was to achieve an equal division of the parties' property.

54It was agreed that the wife should retain the 50 inch Palsonic flat screen television (which is currently in the husband's possession).

Property settlement – the law

55The following generic summary of the law relating to property settlement is substantially reproduced from my decisions in Erdem & Ozsoy [2012] FMCAfam 1323 and Baker and Darzi [2013] FCWA 16.

56Subject to what I have written below regarding the effect of the recent decision of the High Court in Stanford v Stanford (2012) 87 ALJR 74, it is fair to say that the Full Court of the Family Court has consistently ruled that the general approach that should be adopted in relation to a property settlement application is settled.[1] The Court must first identify the property of the parties. It must then attribute a value to each item of property – usually as at the date of the hearing. Thereafter, it must assess the extent of each party’s contributions under the various sub-headings described in s 79(4) of the Family Law Act 1975 (Cth) ("FLA"). Finally, the Court must consider the financial resources, means and needs of the parties, and the other matters set out in s 75(2) so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the s 75(2) factors. It is not essential, however, that such an adjustment take place. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means.

[1] See, for example, Pastrikos & Pastrikos (1980) FLC 90-897, Lee Steere &Lee Steere (1985) FLC 91-626; Ferraro & Ferraro (1993) FLC 92-335; Clauson &Clauson (1995) FLC 92-595; and Whitely & Whitely (1996) FLC 92-684.

57In relation to the contributions of the parties under s 79(4) generally, it has been held that a “global” approach will usually be more convenient than an “asset by asset” approach – although the application of an asset by asset approach does not (of itself) amount to an error of law: see Norbis v Norbis (1986) 161 CLR 513.

58The s 75(2) factors are directly or indirectly related to the process of arriving at a just and equitable result. It follows that there may be circumstances in which the justice and equity of the case, and the specific provisions of s 75(2), support an adjustment in a party’s favour for matters which cannot comfortably be described as being of financial or economic significance: see McMahon & McMahon (1995) FLC 92-606 at page 82,043.

59Under s 79(2), the Court is required to be satisfied that the property settlement orders that it proposes to make are just and equitable – and not simply that the underlying percentage division of the net value of the parties’ property is appropriate. In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered: see Russell v Russell (1999) FLC 92-877.

60The overall process to be applied in property settlement cases was summarised by the Full Court in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, where their Honours said at [39]:

The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), including, because of s.79(4)(e), the matters referred to in section 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…

61My view is that the testing of any proposed orders by reference to s 79(2) was never a fourth substantive step (properly so called) in the property settlement exercise: see OSF & OJK (2004) FLC 93-191.

62In B & B [2006] FamCA 883, Faulks DCJ said at [105] and [106]:

If a Judge has properly carried out his or her functions in determining the factors under section 79(4) (including those applicable factors under section 75(2)) the result overall should be just and equitable within the terms of the [FLA]. Accordingly if a Judge on reviewing his or her deliberations in relation to the first three stages concludes that the result does not appear to accord with justice and equity, then it is likely that the earlier adjustments were wrong. This fourth stage is really a description of a judicial thought process rather than a third discretionary phase. I do not accept the proposition that there is a third discretionary phase unassociated with contributions and or the financial circumstances of the parties [or the other matters under section 79(4)] which somehow permits a judge in accordance with his or her conception of justice and equity to vary determinations otherwise properly made in accordance with the first two discretionary assessments.

I accept that in some cases there may be a minor adjustment required for example to enable a cash-poor litigant to retain some real estate when he or she has no capacity to make any payment to the other party. For my part, it seems to me that even that sort of adjustment is more appropriately incorporated into the first two discretionary phases.

63For the reasons that I set out in OSF & OJK (2004) FLC 93-191 (and, in particular, at [26] - [28] thereof), I agree with the analysis of Faulks DCJ in B & B.

64In more recent times, the Deputy Chief Justice’s approach to the implementation of the so-called “fourth step” has been endorsed by the Family Court in its appellate jurisdiction. For example, in Bonacci & Bonacci [2012] FamCAFC 15, the Full Court said at [61]:

…[The] Full Court has said on a number of occasions the so-called fourth step is not an opportunity to make a further adjustment; it is an opportunity for the judicial officer to determine finally how, in reality, a just and equitable order might be achieved based on the circumstances of the case before him or her ... (References omitted).

65At the end of the day, though, the precise nature of the final “step” or “stage” in the property settlement exercise may not be of any real significance in the present case. It is enough to record that the process involves the Court metaphorically “stepping back” to consider whether the proposed orders (arrived at after the application of the first three steps described in Hickey) are just and equitable.

66That the above analysis represented the approach that should be adopted by the Family Law Courts has been recognised by the Full Court of the Family Court for many years. In the very recent decision of Stanford, however, the High Court commented upon the operation of FLA s 79(2) – among other things.

67The High Court emphasised that the provisions of FLA s 79 empower the Court to make orders “altering the interests of the parties to the marriage” (although the proceedings are described as relating to “property settlement”). As a result, it is essential to begin consideration of whether it is just and equitable to make a property settlement order “by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in [the property available for distribution between them]”: see Stanford at [37].

68Of particular importance are paragraphs 35 to 46 of the majority judgment in Stanford (under the heading The operation of section 79). The majority emphasised that:

... the requirements of [FLA s 79(2) and s 79(4)] are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

69The majority then spoke of “three fundamental propositions” that adhere to the power to make property orders under FLA s 79:

a)The first step (as is currently the case) is to identify “... according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.” The interest of parties in property cannot be altered unless their existing legal and equitable interests in the property can be identified.

b)Although the court has a very broad power to make orders in relation to property, “it is not a power that is to be exercised according to an unguided judicial discretion”. The judicial discretion must be exercised in accordance with legal principles – including the principles which appear within the [FLA] itself. Further, “because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is ‘just and equitable’ to make the order is not to be answered by assuming that the parties’ rights to all interests in marital property are or should be different from those that then exist”. Put another way (see Stanford at [39]):

The question presented by s 79 is whether those rights and interests should be altered. (Emphasis added).

c)The consideration of the various factors in s 79(4) (including the parties’ contributions in all their various guises) does not automatically give rise to a right on the part of one or other of the parties to have the property divided between them by reference to those factors. The just and equitable requirement in s 79(2) must also be considered and applied. Thus: “to conclude that making an order is ‘just and equitable’ only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the [FLA]”.

70I note that the third of the above propositions indirectly endorses pre-existing dicta to the effect that a party to a marriage does not effectively build up an interest in the patrimony of the parties over the duration of the marriage, such that the party may be regarded as having “a presently vested interest of an ‘inchoate’ kind which exists prior to the institution of proceedings under s 79 or the making of an order under that section”: see Re Chemaisse; Federal Commissioner of Taxation (Intervener) (1990) FLC 92-133 at 77,915. The law in Australia is to the effect that rights arising under s 79 “come into existence when an order is made under that section” and that neither s 79 nor the other provisions of the [FLA] “establish rights, however described, in a party to a marriage over the property of the other spouse either arising from the existence of the marriage or the activities of the parties during that marriage or the institution of proceedings under s 79, where those rights do not otherwise exist under the laws in Australia”: see Re Chemaisse; at 77,915.

71After referring to the above three propositions, the plurality in Stanford at [42] explained that – in the vast majority of cases – the requirements of s 79(2) are fairly easily satisfied:

In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4).

72Assuming a step-based approach to the determination of an application brought pursuant to the provisions of FLA s 79 is still appropriate, it is arguable that the effect of the High Court’s decision in Stanford is as follows:

a)The first “step” in the property settlement exercise is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in their property.

b)The second “step” involves ascertaining whether it is just and equitable to make an order altering the interests of the parties in their property. In most cases – relevantly, where the parties have separated and are no longer living in a marital relationship – the underlying assumptions that the parties had to the effect that the existing property ownership arrangements were functional (or perhaps irrelevant) and could be varied by agreement between them, no longer apply. That fact alone should ordinarily persuade the court that it is just and equitable to make orders altering the parties’ interests in their property. It is only after the Court has concluded that it is just and equitable to make such orders that it should proceed to take what might be regarded as the third and fourth steps.

c)In the third “step”, the court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties.

d)In the fourth “step”, the court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established as a consequence of the previous step.

e)Finally, the court should consider the effect of the various findings and assessments it has made and make such orders as it considers are just and equitable in all the circumstances. As I have recorded above, my view is that this process does not amount to an opportunity to make a further adjustment; it is an opportunity for the judicial officer to determine finally how, in reality, just and equitable orders might be achieved having regard to all the circumstances of the case.

73In a recent paper by the Honourable Stephen O'Ryan QC and Paul Doolan entitled Property settlement after Stanford v Stanford (dated 5 February 2013), the authors endorse the approach that I have suggested in the preceding paragraph at [75] of the paper. After referring to passages from the judgments of Strauss J in Ferguson and Ferguson (1978) FLC 90-500 and Nygh J in W and W (1980) FLC 90‑872, the authors also wrote at [80]:

On one view, the just and equitable criterion does not apply to consideration of the matters in section 79(4) and nor does it apply to the determination of what order is appropriate. It only applies to the inquiry pursuant to section 79(2) as to whether or not an order should be made. Notwithstanding the terminology in section 79(2) of just and equitable to make the order the contention is that the words the order are referring to whether it is just and equitable to make an order. It remains to be resolved if this view is correct and what, if any, practical consequences it may have. If this view is correct then in so far as there may be a protraction of the debate as to whether the final step is only concerned with the form of the order, or also permits a further adjustment, it may be resolved in favour of the former view. (Footnotes omitted.)

74It is not necessary for me to express a concluded view in relation to whether the view described by the authors is correct. I have already expressed my opinion, however, to the effect that if FLA s 79(2) can be regarded as having any role beyond that associated with what I have described as the likely second step in the property settlement exercise after the High Court's decision in Stanford ,[2] then that role involves nothing more than empowering the court to adjust the form, structure or balance (for want of a better description) of the orders that it is minded to make to give effect to its conclusion as to the parties' respective entitlements after –

a)assessing the contribution based entitlements of the parties (normally expressed as a percentage of the net value of the parties' property); and

b)thereafter considering the financial resources, means and needs of the parties and the other matters set out in section 75(2) so far as they are relevant, and determining the adjustment (if any) that should be made to the contribution based entitlements referred to in (a) above.

[2] The second step being to ascertain whether it is just and equitable to make an order altering the interests of the parties in their property – bearing in mind that, in most cases, the fact that the parties have separated and are no longer living in a marital relationship should be sufficient to cause this question to be answered in the affirmative.

75My attention has been drawn to the recent decision of Judge Riley of the Federal Circuit Court of Australia in Schopp & Schopp [2013] FCCA 4, and, relevantly, to her Honour's discussion of a suitable approach to applications under FLA s 79 in the light of the High Court's decision in Stanford. At [20] of the judgment, Judge Riley suggested that the approach I described in Erdem & Ozsoy [2012] FMCAfam 1323, and have substantially restated in these Reasons, is "plainly wrong". Perhaps not surprisingly, I do not agree.

76Regrettably, her Honour did not explain why she formed the view that that she did.

77With respect to her Honour, the discussion in Schopp of what might be considered to be a suitable approach to applications under FLA s 79 is difficult to understand. Her Honour appears to have either overlooked or misunderstood the High Court's discussion of the just and equitable requirement in paragraph 42 of Stanford (quoted above) and, most importantly, the final sentence of that paragraph – which clearly confirms that the considerations in s 79(4) should only be considered after the court has concluded that it is just and equitable to make a property settlement order.

78In paragraphs 17 and 18 of Schopp, her Honour wrote:

17. Stanford requires the following matters to be determined in applications brought under s.79 of the Act:

·whether the parties have separated;

·the assets and liabilities of each party;

·the contributions of each party;

·the future needs of each party;

·bearing in mind all of the foregoing matters, whether it is just and equitable to make any orders altering the interests of the parties in their property; and

·what orders, if any, are just and equitable in all the circumstances of the case.

18. Stanford does not require these matters to be addressed in any particular order. In most cases, it would seem rational to consider them in the order set out above. It does not seem to me to possible to determine whether it is just and equitable to make an order altering the parties’ interests in their property without the other matters mentioned above having been previously determined. ...

79In my opinion, the approach described in these paragraphs is misguided, and not consistent with the dicta in Stanford. Further, her Honour's statement to the effect that "it does not seem to me to be possible to determine whether it is just and equitable to make an order altering the parties' interests in their property without the other matters mentioned above (at [17] of Schopp) having been previously determined" (emphasis added) implies that the requirements of FLA s 79(2) and s 79(4) are indeed to be conflated. The High Court has said that this is impermissible.

80In Marello & Marello [2013] FamCA 254, for example, Murphy J made a clear finding to the effect that, in the circumstances of the case then before him, it was just and equitable within the meaning of FLA s 79(2) to alter the existing interests in property held by each of the parties before proceeding to consider the matters set out in s 79(4) at [16]. I concur with his Honour's approach in this regard.

81I note that Judge Riley also referred to FLA s 72(1) (dealing with spousal maintenance) in paragraphs 15 and 16 of Schopp – seemingly in support of her Honour's suggested approach to the property settlement exercise in the light of Stanford. In my view, her Honour's reference to s 72(1) is unhelpful. The High Court did not mention s 72(1) in Stanford, although the plurality spoke of the need to consider orders for maintenance – as opposed to orders for property settlement – where, for example, the marital relationship has not been brought to an end (as was the case in Stanford).

82As recently as yesterday (8 August 2013), the Full Court delivered its Reasons for Judgment in Bevan & Bevan [2013] FamCAFC 116. The Full Court took the opportunity to discuss the decision in Stanford and "the four step process".

83The plurality in Bevan (Bryant CJ and Thackray J) emphasised that what has been described as "the four step process" is "no more than a means to an end, since the statutory obligation is to alter the existing interests only if it is just and equitable to do so": see [61]. Their Honours added that "any further restatement of ["the four step process"] should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order": see [71].

84The plurality also said, at [72]:

... [Judges] would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.

85The plurality continued (references omitted):

84. Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).

85. This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. ...

86. We do not consider it helpful, and indeed it is misleading, to describe this separate enquiry as a “threshold” issue. We say this for two reasons. First, as was emphasised in Stanford, the initial enquiry is to determine the existing legal and equitable interests of the parties. Secondly, although s 79(2) is cast in the negative and amounts to a prohibition against making any order unless it is just and equitable to do so, the corollary is that if the court does make an order, such order itself must be just and equitable: ... The just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.

87. It will be seen from this discussion that while the s 79(2) and s 79(4) issues must not be conflated, they are intertwined because the text of the Act links them. ...

86In endeavouring to explain how the provisions of s 79(4) might be taken into account in considering the s 79(2) "issue", the plurality referred (seemingly with approval) to an paper by Martin Bartfeld QC entitled ‘Stanford and Stanford – Lots of Questions – Very Few Answers’, in which it was suggested that "the contribution factors and the factors under s 75(2) [can be treated as] having two simultaneous characteristics", namely "a discretionary characteristic" and "an evaluative characteristic". Mr Bartfeld argued that "the problem of conflation can easily be overcome by clearly identifying the use to which a factor is being put".

87In a separate judgment in Bevan, Finn J said:

171. For my part, and with respect to those who may take a contrary view, I do not consider that much assistance will be provided to the ordinary person, who has to understand the operation of s 79, by the introduction of concepts such as “discretionary characteristics” and/or “evaluative characteristics” in relation to the factors in s 79(4).

172. I am concerned that the use of the expression “discretionary” may be misleading or confusing because the entire exercise of the jurisdiction under s 79 is discretionary, save, of course, when initially identifying the existing legal and equitable interests of the parties. So far as the term “evaluative” or “evaluation” is concerned, it can mean no more, in my view, than the calculation of what alteration is required to one party’s property interest or interests, to take account of matters such as the contributions or the present or future position of the other party.

88I agree with Finn J's comments. In my opinion, the approach proposed by Mr Bartfeld is unhelpful.

89At [89], the plurality said:

In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order. Ultimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues.

90Regrettably, the Full Court in Bevan did not discuss directly the clear statement in the final sentence of [42] of Stanford which – as I have indicated above – confirms that the considerations in s 79(4) should be considered after the Court has concluded that it is just and equitable to make a property settlement order. Indeed, the plurality quoted [42] of Stanford in [69] of the judgment in Bevan but (intentionally, it would seem) omitted the final sentence of that paragraph.

91In the present case, as in many cases, it is clearly unnecessary to have regard to any of the considerations referred to in s 79(4) in order to determine whether it is just and equitable to make an order altering the parties' interests in their property. The parties separated well before the commencement of property settlement proceedings, and it is readily apparent that the express and implicit assumptions that underpinned the property arrangements they had made during their cohabitation have been brought to an end by "the severance of the mutuality of the marital relationship". As well, any assumption that the parties may have had to the effect that they could change or adjust their property arrangements consensually (as each may need or desire) no longer applies. As I have indicated below, my view is that it is just and equitable within the meaning of s 79(2) to alter the existing interests held by the parties in their property.

Full and frank disclosure

92There can be no doubt that both parties have a clear obligation to make full and frank disclosure of their financial circumstances in a timely manner.

93The duty to make full and frank disclosure of one’s financial position has been reinforced in a number of cases determined by the Full Court over the years. Those cases were summarised in Chang v Su (2002) FLC 93-117. Full and frank disclosure is required as a matter of principle in proceedings between spouses or former spouses under the FLA (see, for example, Oriolo & Oriolo (1985) FLC 91‑653, Briese & Briese (1986) FLC 91-713 and Giunti & Gianti (1986) FLC 91-759. Where the court cannot be satisfied as to the extent of a party’s property, it can be less cautious than might otherwise be the case when making relevant orders (see Mezzacappa & Mezzacappa (1987) FLC 91-853, Black & Kellner (1992) FLC 92-287 and Weir & Weir (1993) FLC 92‑338).

94The authorities referred to above reveal that a judicial officer is entitled to take a “robust view” in relation to findings regarding a party’s financial position (including a party’s capacity to meet any proposed order) where that party has failed to make full and frank disclosure of his/her financial position: see Chang v Su at [71] and [72].

95In November 2002, the High Court dismissed an application by the husband in Chang v Su seeking special leave to appeal from the Full Court’s decision. In the course of argument, Callinan J observed (from transcript dated 5 November 2002):

It does not matter what the principle might be seen to be, a court has to do the best it can. It does the best it can, having regard to the evidence that is adduced, and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings that the court can make.

96In K & K [2002] FamCA 1150 (reported in (2003) FLC 93-135 – but not as to this issue), the Full Court said at [50] and [51]:

[It was submitted that certain cases discussed in the judgment] were authority for the proposition that where there was a finding of deliberate non-disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it. We do not see that the principle should be so confined.

Whether the non-disclosure is wilful or accidental, or is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied that the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances, it may be appropriate to err on the side of generosity to the party who might otherwise be seen to be disadvantaged by the lack of complete candour…

97Of particular relevance to the circumstances of this case is the following passage from the Full Court's decision in Nemeth & Nemeth (1987) FLC 91-844 at 76,384 and 76,385:

(The trial judge) summarised the husband's attitude in the litigation as being one of saying to the wife:

"Go and find out for yourself.''

Because of this attitude the wife was obliged to engage expert professional persons to make extensive investigations, and, in the light of the great complexities of the husband's affairs, the resultant cost to her was substantial. ...

... (It) is fundamental to the operation of the [FLA] in financial cases that there should be this obligation to make a full and frank disclosure of all matters relevant to the ascertainment of the financial position of each party, over and above mere compliance with the rules. There is a positive obligation on a party to set out at an early stage his financial position in a clear and comprehensive manner. This includes evidence as to the value of his assets and not merely a recital as to what they are. It is not enough to argue, as the appellant did in this case, that he had disclosed his assets (which he did eventually), and that it was for the wife to provide valuations as to them. In particular this is not appropriate in the light of the complications attached to the ascertainment of values. The [FLA] demonstrates by its terms that it is aimed at early resolution of disputes, where this is possible. Inadequate disclosure almost inevitably prevents there being a properly based approach to the question of settlement. Where the case goes to trial inadequate disclosure may lead to delays, sometimes requiring adjournment; invariably it leads to more protracted and costly proceedings. The failure of a party to be completely open and forthcoming as to his or her financial position, should always place that party at risk in relation to an order for costs. (Emphasis added and references omitted.)

98In cases of non-disclosure by a party of his/her true financial position or previous financial dealings, the usual approach is to notionally increase the property pool to take account of the non-disclosure. Alternatively, or even in addition, if the court is persuaded that, on the balance of probabilities, there exists other property beyond that which has been disclosed, then the court can make some adjustment in favour of the other party pursuant to the provisions of s 75(2)(o) of the FLA: see Gould & Gould & Gould (2007) FLC 93-333 at [26] and [27].

99As indicated above, the husband's approach to the litigation was confrontational and obstructive, and he made little attempt to comply with his obligations regarding full and frank disclosure of his financial position. For example, in a letter to the wife's solicitors in response to a request for copies of his recent pay slips and income tax returns (and other financial information), the husband wrote that:

a) the letter from the wife's solicitors "provided great amusement";

b)the request for recent pay slips "is a frivolous and vexatious request which amounts to an abuse of court processes"; and

c)any suggestion by the wife that he had not made full and frank disclosure of his financial position "can only be drug induced by (the wife)".

100In the same letter (which comprises part of exhibit W4), the husband wrote that an (overly broad) request for copy bank statements was "vexatious" and "churlish". During cross examination, the husband admitted that he did not know the meaning of the word "churlish" and said that "a friend" had prepared the letter for him. He appeared to accept that his response to the requests from the wife's solicitors was inappropriate and unhelpful.

101In a subsequent letter to the wife's solicitors (see exhibit W5), the husband wrote that the wife's claim for property settlement comprised "a conjured up list of preposterous demands" and a "vexatious and contrived claim". He added that the documents relied upon by the wife were "manifestly factually fraudulent".

102During the course of the trial, and in spite of his bluster – and what appears to be an attempt to bully the wife (through her solicitors) into abandoning her application for property settlement – the husband made no attempt to challenge the wife's evidence in any significant respect.

Property and liabilities as at the date of trial

103The first step in the property settlement exercise relates to the identification and valuation of the property of the parties at trial. It includes the identification, according to ordinary common law and equitable principles, of the existing legal and equitable interests of the parties in their property.

104Subject to comments to be made later in these Reasons, I find that the parties' property and liabilities are as follows:

1.	[Suburb W] property	$409,000
Less: mortgage	($396,169)	$12,831
2.	[Suburb B] property	$445,000
Less: mortgage	($267,622)	$177,378
3.	Wife's [motor vehicle]	$12,500
4.	Husband's [motor vehicle]	$3500
5.	Husband's [motorcycle]	$4500
6.	Husband's furniture, chattels and effects	$5000
7.	Wife's furniture, chattels and effects	$5000
8.	Wife's cash at bank	$1082
9.	Husband's cash at bank	$1189
10.	Wife's superannuation entitlements	$55,363
11.	Husband's Citibank credit card	($2500)
12.	Husband's Radio Rentals account	($4000)
13.	Wife's MasterCard	($8957)
14.	Husband's outstanding income tax liability (see exhibit H2)	($34,377)
Total:			$228,509

105It can be seen from the above schedule (which I shall call "the property schedule") that the total net value of the parties' property is $228,509 – of which $55,363 comprises the current value of the wife's superannuation entitlements.

106It was not in dispute that the wife's superannuation entitlements should be included in the overall "pool" of property available for distribution between the parties. In other words, neither party suggested that superannuation should be included in a separate list (see C & C (2005) FLC 93-220, at [63]), to be treated differently from the remaining items of property.

107Although most of the items contained in the property schedule were agreed, some were not:

a) Quad Bike (omitted from the property schedule)

The wife's case was that the parties owned a quad bike at the date of separation, that it is presently worth approximately $8000 and that the husband has not disclosed its whereabouts. The wife presented no admissible evidence as to the value of the quad bike. In his trial affidavit, the husband said that he sold the quad bike for $5000 "which went to labour and repairs to the [his motor vehicle]". The husband was not cross examined in relation to any aspect of his evidence regarding the quad bike. In the circumstances, I accept that the quad bike has been sold for $5000 and that the proceeds of sale were used for repairs to his motor vehicle (which is included in the property schedule at an agreed value). Clearly, the husband did not consult the wife before selling the quad bike. In the circumstances, I propose to take the sale price of the quad bike into account as a financial contribution made by both parties to the conservation or improvement of an asset presently in the husband's possession.

b) Trail Bike, and Boat and Trailer (omitted from the property schedule)

The wife's case was that the parties owned a trail bike and a boat and trailer at the date of separation, which items were worth $800 and $5000 respectively. Again, the wife presented no admissible evidence as to the value of either of these items. In his financial statement sworn 4 November 2011 (see annexure CJ21 to the wife's trial affidavit), the husband deposed to giving the trail bike to the parties' daughter, Andrea and giving the boat and trailer to his father. In his trial affidavit, the husband said that the trail bike had been purchased for Andrea. He also said that the boat and trailer were purchased for $1200, but were given to his father (presumably after separation) because "the boat never ran and the trailer was unregistered". The husband was not cross examined in relation to any aspect of his evidence regarding these items. In the circumstances, I accept that the trail bike has been given to Andrea (if she did not own it already) and that the boat and trailer have been given to the husband's father. Clearly, the husband did not consult the wife before dealing with these items in the manner described. Given that the value of the trail bike is minimal and that parties are entitled to make modest gifts to their children (see Cerini & Cerini (1998) FamCA 143) I propose to ignore this item. I propose to regard the husband as having received approximately $1200 for the boat and trailer (given that I have no other admissible evidence as to the value of the items). If the husband chose to give the items to his father, then that is a matter for him, but the wife should not be financially disadvantaged as a result of his decision. In broad terms therefore, I propose to treat one half of the value of the boat and trailer (being $600) as being a financial contribution made by the wife to the conservation or improvement of assets presently in the husband's possession.

c) Trailer for Quad Bike and Trail Bike (omitted from the property schedule)

The wife's case was that the parties owned a trailer for the quad bike and trail bike at the date of separation. She asserted that the trailer was worth approximately $3500. Again, the wife presented no admissible evidence as to the value of the item. In his trial affidavit, the husband said that the trailer had been sold for $300. The husband was not cross examined in relation to any aspect of his evidence regarding this item. In the circumstances, I accept that the trailer was sold for $300 and that the husband retained the proceeds. Clearly, the husband did not consult the wife before selling the trailer. Although the value of the item is minimal, I propose to treat one half of the sale price of the trailer (being $150) as being a financial contribution made by the wife to the conservation or improvement of assets presently in the husband's possession.

d) Parties' furniture, chattels and effects

i)The wife's schedule of assets, liabilities and resources contained in her Papers for the Judge included an item described as "home contents". The value of the item was $10,000. According to the wife, the item was "jointly held" and was to be divided equally between the parties (or, alternatively, the home contents had already been divided equally between the parties).

ii)In his financial statement sworn 6 June 2013, the husband deposed to owning household contents valued at $5000. In her financial statement sworn 4 May 2013, the wife deposed to owning household contents valued at $6000.

iii)There was a dispute between the parties as to the manner in which the furniture, chattels and effects in existence at the date of separation were divided. I am unable to resolve the dispute on the basis the evidence available to me. It is clear, however, that the wife is to retain the television to which I have referred elsewhere in these Reasons.

iv)In all the circumstances, and given that the wife included a total figure of $10,000 for "home contents" in the notice to admit facts filed on her behalf on 24 May 2013, I have decided to ignore the value of the television (in relation to which there was no evidence) and to regard each party as being the owner of furniture (and in possession of), chattels and effects to the value of $5000.

e) Husband's Tax Liabilities

i)Generally speaking, the court must accept the parties' financial position as it finds it. The court cannot and should not ignore genuine liabilities unless there are adequate reasons for doing so. In other words, and as indicated above, the court should include all items of property, and all liabilities, in existence at the date of trial.

ii)In Biltoft & Biltoft (1995) FLC 92-614, the Full Court said at 82,124 (references omitted):

A general practice has developed over the years that, in relation to applications pursuant to the provisions of s. 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. In the case of encumbered assets, the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset. ... [The] Court ''must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it''. Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors, the court ascertains the value of their property by deducting from the value of their assets the value of their total liabilities, including the unsecured liabilities.

iii) The Full Court continued at 82,127 and 82,128:

Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred…

There is no requirement that the rights of an unsecured creditor or a claim by a third party must be considered and dealt with prior to the Court making an order under s. 79, nor is there a rule of priority as between a creditor claimant and a spouse. Those rights, however, cannot be ignored. They must be recognised, taken into account and balanced against the rights of the spouse…

iv)In a similar context, the question of how to deal with liabilities which have been "unreasonably incurred", or the loss of assets by a party prior to the trial in circumstances which can be regarded as reckless or unreasonable, usually leads to consideration of cases such as Kowaliw & Kowaliw (1981) FLC 91-092 and Townsend & Townsend (1994) FLC 92-569. It is not necessary to revisit those cases, or the line of cases relying upon or discussing them, in these proceedings.

v)Exhibit H2 contains income tax assessments issued to the husband for the tax years 2007, 2008 and 2009. It also contains an income tax account statement of account issued on 15 July 2013. The statement of account reveals that the husband owed $34,377.12 to the Australian Taxation Office as at 10 July 2013 – which amount includes the income tax assessed for the 2007, 2008 and 2009 financial years, together with interest.

vi)Exhibit H2 also contains a notice dated 9 July 2013 from the Australian Taxation Office to the husband, headed "Penalty for Failure to Lodge Activity Statement on Time". The notice reveals that the husband owes a total of $6050 in respect of penalties for non-lodgement of activity statements for the period December 2009 to June 2012.

vii)Attached to the husband's affidavit sworn 9 July 2013 are estimates of his income tax payable for the financial years from 2006 to 2012 inclusive. The estimates total approximately $61,500. A comparison of the estimates for the financial years 2007, 2008 and 2009 with the actual assessments for those years reveals, however, that the estimates are inaccurate. Thus, the estimated tax payable for the 2007 financial year was $4270.35, but the tax assessed was $2462.35. The estimated tax payable for the 2008 financial year was $9067.95, but the tax assessed was $7821.85. The estimated tax payable for the 2009 financial year was $14,558.20, but the tax assessed was $12,898.20. In part, the discrepancy between the estimates and the assessments is accounted for by the fact that the husband had paid certain PAYG instalments which were not reflected in the estimates.

viii)Annexure 2 to the husband's affidavit sworn 9 July 2013 comprises printouts of activity statements from the tax portal of the husband's accountants. The activity statements relating to the financial years 2007 to 2012 inclusive. They indicate that the husband owes various amounts in respect of (unpaid) GST and PAYG income tax instalments. The interrelationship between the activity statements from the tax portal and the assessments and statement of account contained in exhibit H2 is unexplained. It appears, however, that the husband owes a total of approximately $35,880 in respect of unpaid GST instalments over the five year period. It also appears that the husband owes approximately $4860 to his accountants for work associated with the preparation and lodgement of his income tax returns and BAS statements for the same five year period.

ix)Given the husband's failure to make full and frank disclosure of his financial position until what might be considered the 11th hour, the wife's legal advisers were not reasonably able to investigate the husband's indebtedness to the Australian Taxation Office; nor were they reasonably able to effectively "audit" the figures contained in the income tax estimates and activity statements attached to the husband's affidavit sworn 9 July 2013.

x)It was the husband's obligation to maintain proper business records, to file BAS statements and income tax returns and to pay instalments of GST and other tax payments as and when they fell due. The reality is that the husband has had the benefit of retaining and using moneys that should have been remitted to the Australian Taxation Office (in respect of GST and income tax) over an extended period of time. The full amount of his current indebtedness is unclear.

xi)Conversely, it was not the wife's obligation to maintain the husband's business records and ensure that GST and income tax were paid. The husband gave no adequate explanation for his failure to maintain proper business records and to comply with his obligations in relation to the payment of GST and income tax.

xii)In the circumstances, I am prepared to accept that the husband owes $34,377.12 to the Australian Taxation Office in respect of income tax for the financial years 2007, 2008 and 2009. That figure is neither vague or uncertain; nor is it unlikely to be enforced.

xiii)I am not prepared to accept that the husband owes approximately $35,880 in respect of unpaid GST instalments. I regard that figure as uncertain. I accept, however, that the husband owes moneys in respect of unpaid GST instalments, and that the amount he owes is not insignificant.

xiv)I am not prepared to take into account the penalties that the husband has incurred. In my opinion, they were unreasonably incurred and should be ignored for the purposes of the current proceedings.

xv)Similarly, I am not prepared to take into account the amount that the husband owes to his accountants. It is likely that the work they were obliged to do was significantly more complex than would have been the case if the husband had complied with his obligations under the law, and paid income tax and GST instalments as and when they fell due. On the basis of the evidence before me, I am unable to determine what proportion of the husband's accounting costs were reasonably incurred.

xvi)In all the circumstances, I have included the amount of $34,377 as a liability in the property schedule. I propose to take into account the fact that the husband owes moneys in respect of unpaid GST instalments when considering the s 75(2) factors.

108All of the items in the property schedule are owned by the husband and wife jointly, save for:

a)the wife's [motor] vehicle, her cash at bank, her superannuation and her MasterCard debt – which are the wife's sole property; and

b)the husband's [motor] vehicle and [motorcycle], his cash at bank and his Citibank credit card, Radio Rentals and taxation debts – which are the husband's sole property.

109There is no reason for the court to find that the parties' (current) legal and equitable interests in the property contained in the property schedule are other than as indicated in the preceding paragraph.

Preliminary considerations

110Before proceeding further with what might be perceived as the next relevant steps in the property settlement "exercise", it is pertinent to record that I do not propose to proceed with that exercise by applying a general assumption to the effect that the parties' rights to or interests in their property should be different from those that now exist. I reject that assumption. In other words, I recognise that the core issue for determination in these proceedings is whether the parties' rights to and interests in the property contained in the property schedule should be altered: see my discussion of the High Court's decision in Stanford above.

111Is also pertinent to record that consideration of the various factors in s 79(4) – including the parties' contributions in all their various guises – does not automatically give rise to a right on the part of either of the parties to have the property contained in the property schedule divided between them by reference to those factors. The "just and equitable" requirement in FLA s 79(2) must be (separately) considered and applied. I am conscious of the need not to conflate the requirements or considerations contained in s 79(2) on the one hand, and s 79(4) on the other.

112As explained above, however, the parties in this case separated well before the commencement of property settlement proceedings. It is readily apparent that the express and implicit assumptions that underpinned the property arrangements they had made during their cohabitation have been brought to an end by the "severance of the mutuality of the marital relationship". Further, any assumption that the parties may have had to the effect that they could change or adjust their property arrangements consensually (as each may need or desire) no longer applies. It follows that it can be considered just and equitable that the Court should make a property settlement order (which order is to be determined by applying FLA s 79(4), including the s 75(2) factors): see my discussion of the High Court's decision in Stanford above. Indeed, I find that, in the circumstances of the case now before me, it is just and equitable within the meaning of FLA s 79(2) to alter the existing interests held by the parties in their property. I note, in particular, that the parties have agreed that the husband is to retain the Suburb B property and the wife is to retain the Suburb W property, and that both properties are currently jointly owned.

Contributions

113Having identified the pool of property available for distribution between the parties, I now turn to consider the next "step" of the property settlement exercise – namely, the identification and assessment of the parties' contributions in all their various guises.

114It is apparent that the parties "went their separate ways" after separation. Both repartnered within a relatively short period of time (although new relationships did not last). They are now in different relationships. The husband assumed responsibility for the mortgage encumbering the Suburb B property; the wife assumed responsibility for the mortgage encumbering the Suburb W property. There appears to have been no, or almost no, intermingling of the parties financial affairs after separation – save, it would seem, on one occasion. In November/December 2009, the borrowings secured by the mortgage over the Suburb B property were refinanced, because both parties "wanted funds". A further $45,730 was borrowed at that time, of which approximately $18,500 was utilised as an early repayment arrangement in respect of the pre-existing borrowing, leaving some $27,230 available to be used by the parties. It was not in dispute that the wife received the benefit of approximately $21,000 (or perhaps $22,000) of these funds, and that the husband received the benefit of the balance (being approximately $5000 or $6000). From the funds received by the wife, she purchased a motorcycle and discharged a credit card account. Although the evidence is unclear, it seems that the motorcycle was later used as a trade in when the wife purchased her present (Mazda) vehicle.

115In the circumstances, it is convenient to consider the parties' contributions (in all their various guises) prior to separation separately from their contributions after separation.

116Ms Anderson argued that the parties' contributions relating to the period prior to separation should be treated as approximately equal, save that the wife should receive a "loading" to take account of her initial contribution of approximately $11,000. The husband's case was that the parties' contributions should be treated as equal from the commencement of cohabitation to the date of separation: see the last sentence on the second page of the husband's Papers for the Judge.

117Both parties worked and earned income prior to the date of separation, as discussed above. It is not possible to make any clear finding to the effect that one party earned more than the other party during this period.

118In relation to non-financial contributions to assets, the wife asserted in her Papers for the Judge that she "organised home improvements". The husband asserted in his Papers for the Judge that he "made non-financial contributions to the family home including pergolas, brick paving and tiling".

119The wife asserted in her Papers for the Judge that she was the principal homemaker and that her contributions to the welfare of the family were substantially greater than those of the husband. The husband asserted in his Papers for the Judge that "both parties cared for our children and shared home duties equally". In his trial affidavit, however, the husband said that the wife "did the majority of the house work and cooking and gardening" and that he "helped out when (he) could".

120The parties' affidavits provided minimal information in relation to the parties' non-financial contributions and contributions to the welfare of the family. The court is not aware, for example, of the living arrangements that adhered for the wife's two children from a previous relationship. Neither party was cross examined about these (and many other) matters.

121Doing the best that I can with the very limited evidence available to me, and bearing in mind that the parties lived together for approximately 19 years, I find that their contributions (in all their various guises) were approximately equal from the commencement of cohabitation to the date of separation, but that a modest allowance should be made – in the wife's favour – to take account of her initial contribution of some $11,000.

122In Bremner& Bremner (1995) FLC 92-560 at 81,588 and Way & Way (1996) FLC 92-702, at 83,403 the Full Court cited with approval a passage from the judgment of Fogarty J in Money & Money (1994) FLC 92-485 at 81,054, as follows:

… an initial contribution by one party may be “eroded” to a greater or lesser extent by the later contributions of the other party, even though those later contributions do not necessarily at any particular point outstrip those of the other party.

123In Pierce & Pierce (1998) 24 FamLR 377 at [27], the Full Court sought to put Fogarty J’s quotation “in its correct context”. After referring to an expanded passage from Fogarty J’s judgment in Money – in which his Honour said that: “… the respective contributions of the parties over a long period of marriage ‘offset’ the significance which might otherwise be attached to a greater initial contribution by one party” – the Full Court said at [28]:

In our opinion, it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution … regard must be had to the use made by the parties of that contribution.

124The relevance of initial contributions has been discussed more recently in Williams & Williams (2007) FamCA 313. Before referring to dicta from Money and Pierce, the Full Court said at [26]:

We think that there is force in the proposition that a reference to the value of an item as at the date of commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties. Thus, where the pool of assets available for distribution between the parties consists of, say, an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing or the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But, in so doing, it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.

125In my opinion, the "myriad of other contributions" made by each of the parties during the course of their relationship has served to offset, dilute or erode the significance of the initial financial contributions made by the wife – although not completely. Thus, and again doing the best that I can with the evidence available to me, I find that an appropriate division of the parties' property at separation - taking into account the parties' various contributions (in all their various guises) up to the date of separation (but ignoring the s 75(2) factors as at that date) – would have been approximately 52.5 percent to the wife and 47.5 percent to the husband.

126After separation, however, the parties' contributions changed significantly. The wife behaved responsibly, in a financial sense: she continued to work and earn income, and her superannuation entitlements increased as a result. Taxation was deducted from her income. She continued to meet the payments in respect of the mortgage encumbering the Suburb W property, which were at least 50 percent greater than the payments in respect of the mortgage encumbering the Suburb B property. Both mortgages (and both properties) remained in the parties' joint names. It is the case, however, that the wife "refinanced (her) mortgage to interest only" in approximately mid 2012, purportedly because she was unable to work the same hours that she had previously worked. For the last 12 months or so, therefore, the mortgage payments have been similar to those of the husband.

127Between the date of separation and the date of trial, the value of the wife's superannuation entitlements increased by in excess of $30,000. The husband made no appreciable contribution (in any relevant sense) to this increase.

128Ms Anderson argued that the effect of the transactions that occurred in November/December 2009 when the mortgage encumbering the Suburb B property was refinanced causing the wife to receive a benefit of approximately $21,000-$22,000 and the husband to receive a benefit of approximately $5000-$6000 had no appreciable effect upon the parties' respective contributions. I agree with that submission. The relevant assessment (at this stage) is of the parties' various contributions to the property currently comprising the assets (and liabilities) available for distribution between them. Both parties were jointly liable for both mortgages. Further, the benefit that the wife derived from the refinancing of the mortgage over the Suburb B property is reflected in the existence of other assets (on the one hand) and by the removal or reduction of her then existing credit card debt.

129Although the wife behaved responsibly in a financial sense, the husband did not. He failed or refused to comply with his obligations under the law to lodge BAS statements and income tax returns. He did not pay GST, and he did not pay income tax (or appropriate income tax). As a result, and although he was able (arguably) to live beyond his means, he incurred significant penalties and, no doubt, greater accounting fees than would otherwise have been the case. As indicated above, however, I give no weight to the existence of the penalties and to the existence of the outstanding accounting fees.

130I accept, however, that if the husband had filed income tax returns and paid GST during the period since separation, less moneys (or, perhaps more accurately, property of lesser value) would now be available for distribution between the parties – even taking into account the husband's income tax liability included in the property schedule. I have found that the husband is likely to have additional tax liabilities, including penalties, but that they are unquantifiable on the basis of the evidence currently before me. I propose to take those matters into account when regard is had to the s 75(2) factors (although, as indicated above, I do not propose to give weight to the husband's current liability for penalties arising from his non-payment of income tax or GST).

131I have not forgotten the minor adjustments that I indicated I would make to take account of the quad bike, the trail bike and the boat and trailer and the trailer for the quad bike and trail bike. They warrant a very minor adjustment in the wife's favour.

132Neither party suggested that he/she made any significant contributions after separation in a non-financial sense; nor did either party suggest that he/she made any significant contributions to the welfare of the family after separation. There is no evidence before me dealing with such contributions. The evidence regarding post-separation contributions relates wholly (or almost wholly) to financial contributions.

Conclusion in relation to contribution

133The reality is that an assessment of the parties' respective contributions (particularly after a relationship lasting 19 years or more, and a separation of some five years) is not a strict mathematical or accounting exercise. It is not always possible to balance 'like with like', in that the different forms of contribution can have very different characteristics and carry very different weight. Similarly, the timing of the forms of contribution can be telling. In a very broad sense, the exercise is what might be considered an imprecise, macrocosmic one – as opposed to a detailed, microcosmic analysis of the source and destination of each dollar passing through the parties' hands and their every action, inaction or reaction (however small or insignificant).

134In all the circumstances (including the length of the period of cohabitation and the extended period between separation and the present time), and not overlooking the minor adjustments to which I referred earlier (relating to the quad bike, trail bike and the like), I conclude that something between 60 percent and 62.5 percent of the overall property pool should be awarded to the wife on the basis of her contributions from the commencement of cohabitation to the present date, and the balance to the husband on the same basis. As it would be intellectually dishonest of me to choose either the higher or lower figure within the range that I have specified, I shall fix the midpoint as being the appropriate allowance. It follows that 61.25 percent should be awarded to the wife and 38.75 percent should be awarded to the husband to take account of contribution factors. In other words, the wife's "allowance" to take account of contribution factors effectively grew by 8.75 percent (from 52.5 percent to 61.25 percent) from the date of separation to the present date. The husband's "allowance" decreased by the same amount.

Section 75(2) factors

135So far, in considering the question of property settlement I have dealt with the identification of the parties' property and the question of their respective contributions. The Court has power to make an adjustment to a party's property settlement entitlement based on such contributions in order to take account of, among other things, both parties' respective means and needs. The Full Court has been critical of shorthand terms being used to describe this step in the property settlement exercise, preferring to refer to it simply as “the section 75(2) factors”: see Clauson & Clauson (1995) FLC 92-595. In essence, section 75(2) is concerned with the process of arriving at a just and equitable result: see, in that regard, Waters & Jurek (1995) FLC 92-635.

Age and state of health

136The husband is 50; the wife is 47 (nearly 48).

137The husband appears to be in good health. The wife suggested that her earning capacity may be affected by certain health problems. In paragraph 24 of her trial affidavit, she deposed as follows:

As a result of the extended shiftwork that I was undertaking my health deteriorated. I was diagnosed with vertigo and I now work day shifts only, I have not suffered a recurrence of the condition. As a result I have lost the relevant penalty rates that were paid for the shiftwork. As a result I refinanced my mortgage to interest only. As I am unable to work shifts I have commenced retraining so that I can move out of the industry. Produced and shown to me now and marked CJ15 and annexed to this affidavit is correspondence from my doctor regarding my condition.

138Annexure CJ15 to the wife's trial affidavit comprises a letter dated 19 March 2013 from the [T Medical]. It is signed by Dr [G] (who is, I assume, a general practitioner). The letter contains the following:

... [On] 18 June 2012, [the wife] complained of a 3 year history of tiredness and an inability to sleep. She also complained of a 9 week history of dizziness and vertigo, with the vertigo worsening in the past 5 days. She [said] she worked alternate days and nights and was currently going through a stressful divorce. Her clinical examination was normal and I prescribed Prochlorperazine for her – a drug used to treat some forms of vertigo. At her request I wrote a letter to her work (Company I) suggesting that dayshift only may be beneficial to her at the moment while she was under investigation for dizziness and vertigo. ... [On] 25 June 2012 she [said] her vertigo had improved in the daytime, but was the same at night. She [said] she had been moved to dayshift only. I asked her to continue the Prochlorperazine for a further two weeks and to have her liver function retested and returned for review in two weeks.

... I ran a number of investigative blood tests which were normal, excepting for mildly deranged liver function tests. The working diagnosis was vertigo of unknown origin. In many cases vertigo can resolve spontaneously. According to [the records of T Medical, the wife] did not have the repeat liver function tests, nor return for review. She has not been seen at this practice since ... 25 June 2012.

... At the time I believed a cessation of shiftwork (day shifts only) would be beneficial to her health. As she did not return to our practice for review or referral I cannot comment on her current condition.

... It would be judicious for [the wife] to have follow-up of her condition if her vertigo is still ongoing. Once again I cannot comment on her current condition as I have not seen her since June 2012 and she has not attended this practice for the follow up.

139Leaving aside obvious issues relating to the admissibility of Dr G's letter and the wife's opinion evidence contained in paragraph 24 of her trial affidavit, it is clear that there is no clear, relevant or admissible evidence to support the wife's assertion that any vertigo she may have suffered was caused by shiftwork (whether extended or otherwise); nor is there any clear, relevant or admissible evidence to support her assertion that she is currently unable to work shifts. Her failure to return to the medical practice for follow up or review was unexplained.

140It follows that I am unable to conclude that the wife is in other than good health. Similarly, I am unable to conclude that she is not capable of undertaking shiftwork.

Income, property and financial resources, earning capacity and capacity for employment

141I have already dealt with the property and liabilities of the parties as at the date of trial. The net "pool" is $228,509. The "pool" includes the wife's superannuation entitlements, totalling $55,363.

142As indicated above, I accept that the husband has a significant liability in respect of unpaid GST and that he is likely to have to pay penalties in respect of unpaid income tax. He is also likely to have to pay his accountants' fees (if he has not done so already). It is likely that the husband also has an additional liability in respect of unpaid income tax, although he has not yet received the relevant assessments. As I have explained above, I give no weight to the penalties that the husband has incurred or is likely to incur in the future is a result of his failure to file relevant returns and statements and pay appropriate tax from the date of separation to the date of trial. Similarly, I give no weight to the husband's liability to his accountants (for reasons already expressed).

143As Ms Anderson submitted, the evidence reveals that the husband has been provided with a fully maintained vehicle for the last three or four years. The evidence also reveals, however, that the husband's income has been reduced to take into account the provision of the vehicle.

144I am satisfied that the husband has a greater income, and a greater income earning capacity, than the wife. As indicated above, however, I am not satisfied that the wife is exercising her earning capacity to the full, given that she did not follow through with the further assessment or assessments recommended by her general practitioner.

Children under 18

145This is not a relevant factor. Neither party has the care of a child of the marriage under the age of 18.

Financial commitments

146There is no evidence to suggest that this is a relevant factor. It did not feature in the submissions of either party.

Responsibilities to support any other person

147There is no evidence to suggest that the wife has an obligation to support anyone other than herself.

148The husband has a responsibility to support his partner (to the extent that she is not able to support herself) and their very young child.

Eligibility for pension, allowance or benefit

149This does not appear to be relevant consideration.

150The wife has superannuation entitlements to which I have referred elsewhere in these Reasons.

Reasonable standard of living

151I accept that both parties are entitled to a reasonable standard of living. They have agreed that, if possible, the wife should retain the Suburb W property and the husband should retain the Suburb B property.

152Having regard to their respective earning capacities and the orders that I propose to make in these proceedings, I anticipate that each will enjoy a reasonable standard of living. On the basis of the evidence currently before me, the husband will have to negotiate an arrangement with the Australian Taxation Office to allow him to repay his significant taxation debts over an extended period of time. As I understand the husband's evidence, such negotiations are currently underway.

Maintenance in the context of education or retraining

153This does not appear to be a relevant consideration, and neither party suggests that it is.

Effect of orders on creditors

154This does not appear to be a relevant consideration, and neither party suggests that it is. As indicated above, however, I accept that the husband has a substantial debt to the Australian Taxation Office. As I understand the husband's evidence, however, he is confident that he will be able to negotiate appropriate repayment arrangements.

Contribution factors

155I have dealt with the issue of contribution elsewhere in these Reasons. It does not appear to be relevant to the section 75(2) factors, and neither party suggests that it is.

Duration of marriage and its effect on earning capacity

156This does not appear to be a relevant consideration, and neither party suggests that it is.

Need to protect party's role as parent

157This does not appear to be a relevant consideration, and neither party suggests that it is.

Cohabitation with another person

158The wife is in a relationship with Mr N, but they maintain separate residences and their financial arrangements are not intertwined. The husband is in a relationship with Ms M, and they have a very young child. The financial circumstances relating to the husband's current relationship do not appear to be directly relevant to the issues currently before me. Neither party seems to suggest that they are relevant (or relevant to the outcome of the proceedings), and neither Ms Anderson nor the husband addressed me in relation to them.

159I have already recorded that the husband has a responsibility to support Ms M and their young son.

Bankruptcy provisions

160These factors do not appear to be relevant, and neither party suggested that they are.

Conclusion in relation to s 75(2) factors

161Although I accept that the husband's income and income earning capacity are greater than those of the wife, the extent to which they are greater is not significant. The husband has a fiancée and a young child. He also has a very significant liability to the Australian Taxation Office, as I have discussed elsewhere in these Reasons. And although the fault is his own, he has no superannuation entitlements.

162On the other hand, I recognise that a significant proportion of the property currently owned by the wife comprises her superannuation entitlements and that, save in exceptional circumstances, she will not be able to gain access to those entitlements until she retires. Even so, they comprise a significant benefit from her point of view (and, as I have said, the husband has no equivalent benefit).

163Having regard to the above matters, together with all the other matters discussed under the general heading of the s 75(2) factors, I conclude that it is inappropriate to make any adjustment to the parties' contribution-based entitlements. In my opinion, to make such an adjustment in the circumstances of this case would be to run the risk of making orders which are neither just nor equitable.

164It follows that the overall distribution of the property between the parties should be on the basis of 61.25 percent to the wife and 38.75 percent to the husband.

165In G & G [2004] FamCA 1179, the Full Court said (in relation to an exercise of judicial discretion such as that which I have performed in the previous paragraphs):

…[Words] will often (perhaps always) fall frustratingly short of an incontestable explanation for any particular exercise of discretion – or, for that matter, for a finding by an appellate court that a particular exercise was wrong. All the relevant factors can be described, with modifiers in abundance, but still the analysis will beg the question, “Yes, but why that figure and not another?” or “Why was that the range rather than some other parameters?”

The deficiency is unavoidable. When there are a number of “right” results available, the explanation for the choice of one over others can never be incontestable. Nor can the reasons for saying that a result is outside a range be beyond challenge. The very nature of a discretionary exercise that ascribes mathematical consequences to a batch of actions and events amenable only to descriptive evaluation, means that it is impossible to place beyond argument the explanation for all the steps to the ultimate selection of result. ...

[In] respect of virtually every exercise of discretion, by definition, it will not be possible to deliver a judgment which excludes reasoned argument that another result was available.

166For what it is worth, I concur with the Full Court’s view as expressed in the passage from G & G quoted above. The “balancing exercise” that the Court must perform is rarely an easy or non-contentious one.

Just and equitable - overview

167In this case, the husband and the wife had separated well before the commencement of property settlement proceedings. The husband was living in the Suburb B property, which was the former matrimonial home. The wife was living in the Suburb W property. Both properties are owned by the parties as joint tenants. Both parties are joint borrowers in respect of the loans secured by the mortgages encumbering the two properties. Both parties now seek orders altering their property interests, and both recognise that whatever assumptions previously supported or adhered to the property arrangements that they had made prior to separation no longer apply. Both parties have requested the Court to make orders finally determining the financial relationships between them.

168It follows from the above that it is just and equitable for the Court to make property settlement orders: see the discussion of the High Court's decision in Stanford above. The actual orders to be made have been determined by applying s 79(4) (including a consideration of the s 75(2) factors).

169I now propose to step back (metaphorically) and consider whether the outcome achieved by my consideration of the parties' contributions and the s 75(2) factors has brought about a just and equitable result.

170If the wife is entitled to 61.25 percent of the property pool, then she is entitled to property to the value of $139,962 (being 61.25 percent of $228,509). The net value of the property currently in her possession or under her control is $77,819 (comprising the net value of the Suburb W property, her motor vehicle, her furniture, chattels and effects, her cash at bank and her superannuation entitlements, together with the debt associated with her MasterCard). The difference between the amount which the wife is entitled (being $139,962) and the net value of the property currently in her possession (being $77,819) is $62,143.

171Thus, in order to achieve a 61.25/38.75 overall split in the wife's favour, the wife should retain the items from the property schedule to which I have referred and, in addition, the husband should pay to her the sum of $62,143.

172From the husband's point of view, the effect of these Reasons is that he should receive 38.75 percent of the property available for distribution between the parties, or net property to the value of $88,547. The net value of the property currently in his possession or under his control is $150,690 (comprising the net value of the Suburb B property, his motor vehicle and motorcycle, his furniture, chattels and effects and his cash at bank, together with his liabilities to Citibank, Radio Rentals and the Australian Taxation Office). On that basis, of course, he is obliged to pay the wife $62,143.

173There is a 22.5 percent difference between the proportion of the property to be retained by the wife (being 61.25 percent) and the portion to be retained by the husband (being 38.75 percent). In this case, the 22.5 percent difference amounts to $51,415 (being 22.5 percent of $228,509). I am satisfied that such a difference is proper, having regard to the provisions of s 79(4). Further, and bearing in mind that justice and equity must be done to both parties, I am satisfied that the split that I have proposed achieves that result.

Summary of proposed orders

174It is clear from these Reasons that there should be orders to the following effect:

a)The husband is to pay to the wife the sum of $62,143 ("the Principal Sum") within 60 days.

b)Upon receipt of the Principal Sum, both parties must forthwith sign all such documents and do all such acts and things as shall be necessary to cause –

i)the wife's right, title and interest in the Suburb B property to be transferred to the husband;

ii)the husband's right, title and interest in the Suburb W property to be transferred to the wife;

iii)subject to subparagraph (c) below, the mortgage presently encumbering the Suburb B property to be refinanced into the husband's sole name (or otherwise refinanced in such a manner as to cause the wife to be released from any obligations she may have pursuant to the mortgage); and

iv)subject to subparagraph (d) below, the mortgage presently encumbering the Suburb B property to be refinanced into the wife's sole name (or otherwise refinanced in such a manner as to cause the husband to be released from any obligations he may have pursuant to the mortgage).

c)If, in spite of the parties using their best endeavours to cause the mortgage presently encumbering the Suburb B property to be refinanced in accordance with subparagraph (b)(iii) above, the parties are genuinely unable to refinance the said mortgage, then the husband must indemnify the wife and keep her indemnified from all debts, liabilities and obligations of the wife relating to or arising out of the said mortgage.

d)If, in spite of the parties using their best endeavours to cause the mortgage presently encumbering the Suburb W property to be refinanced in accordance with subparagraph (b)(iv) above, the parties are genuinely unable to refinance the said mortgage, then the wife must indemnify the husband and keep him indemnified from all debts, liabilities and obligations of the husband relating to or arising out of the said mortgage.

e)In the event that the husband fails, refuses or neglects to pay the Principal Sum to the wife strictly in accordance with subparagraph (a) above:

i)The parties must forthwith sign all such documents and do all such acts and things as shall be necessary to effect a sale of the Suburb B property as soon as practicable ("the Sale").

ii)Both parties have liberty to apply at short notice for directions relating to or associated with the Sale, including (but not limited to) the identity of the agent, the method of sale and the price for which the Suburb B property is to be sold.

iii)On settlement of the Sale, the proceeds of sale be paid in the following manner and priority:

iv)all costs and expenses of sale, including legal costs and disbursements, agent's commission, valuers' fees and option expenses (including repayment of any such expenses as have been paid by either or both of the parties);

v)the amount required to discharge the mortgage encumbering the Suburb B property;

vi)the amounts required to pay all outstanding municipal and water rates relating to the Suburb B property;

vii)the Principal Sum to the wife, together with interest on the Principal Sum at the rate of 8.75% from the date of default until the date of payment; and

viii) the balance to the husband.

f)The husband must forthwith deliver up to the wife the 50 inch Palsonic flat screen television presently in his possession ("the Television"), and must ensure that the Television is in good condition and in working order.

g)The husband must forthwith transfer and assign to the wife all his share and interest (if any) in the following:

i)the wife's motor vehicle;

ii)the Television;

iii)the furniture, chattels and effects presently in the wife's possession;

iv)all moneys standing to the credit of the wife in any account in any bank, building society or other financial institution; and

v)the wife's superannuation entitlements.

h)The wife must forthwith transfer and assign to the husband all her share and interest (if any) in the following:

i)the husband's motor vehicle;

ii)the husband's motorcycle;

iii)the furniture, chattels and effects presently in the husband's possession (save for the Television); and

iv)all moneys standing to the credit of the husband in any account in any bank, building society or other financial institution.

i)The husband indemnify and keep indemnified the wife from all debts, liabilities and obligations of the wife (if any) relating to or arising out of:

i)the husband's Radio Rentals account;

ii)the husband's CitiBank credit card; and

iii)the husband's taxation liabilities (including income tax and GST, and all penalties and interest not yet paid outstanding liabilities),

and from all actions, proceedings, costs, claims and expenses in respect thereof.

j)The wife indemnify and keep indemnified the husband from all debts, liabilities and obligations of the husband (if any) relating to or arising out of the wife's MasterCard credit card, and from all actions, proceedings, costs, claims and expenses in respect thereof.

175I will now hear the parties in relation to the precise orders necessary to give effect to these Reasons.

I certify that the preceding [175] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate