K and K

[2009] FCWA 47

[2009] FCWA 47

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	K and K [2009] FCWA 47
CORAM	:	CRISFORD J
HEARD	:	14. 15 & 16 JANUARY 2009
DELIVERED	:	7 MAY 2009
FILE NO/S	:	PT 3934 of 2007
BETWEEN	:	K Applicant/Husband
AND
K Respondent/Wife
Catchwords:

PROPERTY SETTLEMENT - consent orders - leave to extend time within which to appeal - substantial issue to be tried

Legislation:

Family Law Act 1975 - s 79A and s 96

Family Law Rules 2006 - Rule 1.14

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Mr M Berry
Respondent	:	Mr H Moser

[2009] FCWA 47

Solicitors:

Applicant	:	Shann Family Lawyers
Respondent	:	Calverley Johnston

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

Alfasi and The Alfasi Group (2006) FLC 93-271
Gallo v Dawson (1990) 93 ALR 479
McMahon & McMahon (1976) FLC 90-038
Tormsen & Tormsen (1993) FLC 92-392

[2009] FCWA 47

1 On 14 March 2006 Mr WG Tarr SM pronounced orders in chambers in the

Magistrate’s Court of Western Australia held [in the Regional Centre]. [Mr K] and [Mrs K] had jointly sought these orders which purported to settle their property matters.

2 On 17 November 2007 [Mr K] filed an application seeking the orders be set

aside pursuant to s 79A of the Family Law Act 1975. On 6 January 2009 he filed an amended application broadening the basis upon which he sought to set aside the orders. Relevantly he sought an extension of time to appeal the orders under s 96 of the Act. The amendment to his original application was allowed, unopposed, at the trial.

3 Although he also sought an extension of time to review the orders under s 33(8)

of the Family Court Act 1997 it was accepted that this form of relief was not available
in the circumstances of this case.

4 [Mrs K] seeks that the application be dismissed. If he is successful on any of the bases put forward, [Mr K] seeks the current assets be divided equally.

Brief Background

5 Both parties were born in New Zealand. [Mr K] is 44 years of age and [Mrs K] is 51 years of age.

6 The parties met and commenced cohabitation in 1989. [Mrs K] had a child from an earlier relationship, [B], who lived with the parties from 1994 to 2004.

7 In 1991 the parties moved to [the south west] and the following year they

purchased a [residential property]. In August 1992 they established a repair business –
[K’s Repairs].

8 On 27 January 1996 the parties married in Perth. In March of that year they

purchased workshop premises [in the town]. The business was operated from these premises until 2003 when the business itself was sold. The premises were leased to the new owner.

9 In early 2004 the parties moved to live in [the north-west]. [Mr K] was employed at [a mine] and [Mrs K] with [a transport company].

10 By September or October of 2005 the parties were having difficulties in their

marriage. On 22 October 2005 [Mr K] advised [Mrs K] that he wished to separate. Although he changed his mind the following day it appears the parties had a general sense of the inevitable. [Mrs K] did not want the marriage to end but accepted this to be likely.

11 By early 2006 the parties had returned to live in [the south west]. [Mr K]

commuted to work in [the north-west] from there. [Mrs K] finished her work in early December 2005. She then applied for and was successful in obtaining employment with [a mining company] as an executive assistant. This was to start in March 2006.

[2009] FCWA 47

12 On 17 February 2006 [Mrs K] attended a solicitor, [Ms W] [of a local law firm] seeking matrimonial advice.

13 On 27 February 2006 [Mrs K] again attended the offices of [Ms W] to collect

some documentation. At some stage she returned a signed costs agreement paying
$1,000 on account of likely costs.

14 [Mrs K] says the parties separated on 28 February 2006, the day [Mr K] returned from a work stint in [the north-west].

15 On 7 March 2006 the parties attended their accountant, [Mr S] for some taxation

advice in relation to their overall situation and the implications of capital gains tax on
any sale of the [business] property.

16 Early on 8 March 2006 the parties jointly agreed to separate. [Mrs K] attended

[Ms W] that morning in order to have the necessary legal documents prepared and available for signature later that day. The parties attended [Ms W]’s office in the afternoon and executed the consent orders.

17 On 10 March 2006 [Mr K] funded the purchase of a car for [Mrs K] in accordance with their agreement and the orders.

18 On 13 March 2006 the application for consent orders was filed in the Magistrate’s Court in Busselton and the orders were made the following day.

19 In July 2006 [Mr K] commenced a relationship with [Ms H]. In August 2006 the parties completed the transfer documents for [residential property] into [Mrs K]’s sole name, the [business] property having been transferred to [Mr K] earlier. There were problems with the [residential] transfer due to the wrong spelling of [Mrs K]’s name on the transfer. Documents had to be re-executed.

20 In February 2007 [Mr K] and [Ms H] purchased an investment property in [the eastern states] for $540,000.

21 In April 2007 [Mr K] wanted to collect some stereo speakers from [Mrs K] but was told by her they had been given to friends.

22 [Mr K] then contacted the Busselton Court in order to obtain a copy of the

consent orders. He received a copy in May 2007. On 5 July 2007 he telephoned
Shann Family Lawyers and he attended for legal advice on 8 August 2007.

23 In September 2007 [Mr K] sold the [business] property.

24 In October 2007 the transfer of the [residential] property was finalised.

25 In November 2007 [Mr K] arranged for Shann Family Lawyers to file his application for final orders. The application was amended in January 2009.

The applicable law

• s 96 of the Act and an extension of time

[2009] FCWA 47

26 A party to proceedings has 28 days within which to appeal a decision of a

Magistrate of the Family Court of Western Australia sitting outside the metropolitan area.

27 In this case substantial time had elapsed between the making of the order and [Mr K] amending his Court application to extend the time within which to appeal.

28 Rule 1.14 of the Family Law Rules 2006 permits the Court to extend a time fixed under the Rules even though that time has passed.

29 For [Mr K], it was submitted that leave should be granted in order to permit

justice to be done between the parties. In this respect, the Court was referred to the
following passage of McHugh J in Gallo v Dawson (1990) 93 ALR 479 at 480:

“The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 AT 262.”

30 However his Honour went on to further clarify this principle:

“This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872, Hughes, at 263-4; Mitchelson v Mitchelson (1979) 24 ALR 522 at 524.”

31 In Tormsen & Tormsen (1993) FLC 92-392, the Full Court stated that the fundamental issue in an application for an extension of periods of time prescribed by Rules of a court is whether this will enable a court to do justice between the parties. It went on to state that a court must weigh the right which the respondent to the application has to attain the benefit of the judgment and the desirability that there be finality of litigation. A failure to explain the delay adequately can certainly lead to a conclusion that justice demands that the application be dismissed. However, in appropriate cases, the interests of justice may outweigh the absence of an adequate explanation for the delay. In addition, in an application to extend time in which to appeal there must be a substantial issue to be raised on the appeal and no hardship or injustice caused to the respondent which cannot be compensated by orders for costs or otherwise, McMahon & McMahon (1976) FLC 90-038.

[2009] FCWA 47

32 In Alfasi and The Alfasi Group (2006) FLC 93-271, Bryant CJ referred to the principles applicable to an application for leave to appeal out of time as discussed by McHugh J in Gallo v Dawson (1990) 93 ALR 479 at 480-81.

33 The Chief Justice stated:

“Accordingly, the first and most important question to be determined upon such an application as this is whether the applicant has established that there is a substantial issue to be raised on appeal. If not, the application must fail. If so, then other considerations may become relevant to the exercise of the discretion, namely: the extent of the delay and the reasonableness of any explanations offered for it; any hardship or prejudice flowing to the respondent from the applicant’s delay which cannot be compensated for by orders as to costs or otherwise: and the desirability, in the public interest, that there be finality to litigation.”

34 In my opinion, these comments correctly set out the relevant legal principles to be applied in this matter.

35 The effect of extending the time within which an appeal is to be lodged is that

the consent of one of the parties to the orders is withdrawn. Thus, there are no orders and the matter is to be determined afresh by a judicial officer on the evidence before the Court at that time.

Is there a substantial issue to be raised?

36 At trial some considerable time was spent on the circumstances in which the

parties actually came to sign the consent orders. For present purposes it is enough to say that some of the circumstances [Mr K] raises in that respect as being misleading, deceptive and unfair must rest fairly and squarely with him. The Court is to analyse here whether there is a substantial issue to be raised. In this regard it is necessary to consider the effect of the orders made by the Magistrate.

37 There is uncertainty about exactly how instructions for the consent orders were

given. What is certain is that until [Mr K] attended [Ms W]’s office in the afternoon of 8 March 2006 he had not received any legal advice and was unaware that [Mrs K] had previously seen [Ms W], apart from earlier that day.

38 By all accounts some preliminary instructions were given to [Ms W] on

17 February 2006, [Mrs K]’s first attendance for legal advice. She returned to the solicitor’s office the day before [Mr K] returned from [the north-west] in late February 2006. Then, at least on one version she paid some money on account of her costs and received a blank application for consent orders. She accepts that at some stage she completed part of that document.

39 [Ms W] also had a hand in completing the draft application. The evidence

supports that being done on the morning of 8 March 2006 when [Mrs K] attended to ensure matters could be finalised that day. There are some aspects of the form that warrant attention.

[2009] FCWA 47

40 This substantially completed draft application provides the overall proposed

division of the parties’ property at 80% in [Mrs K]’s favour. The final application signed by the parties and forming the basis of the orders made provides the overall proposed division at 70% in [Mrs K]’s favour. Neither of these percentages correlate with the figures provided.

41 [Ms W] explained that the latter 10% adjustment in [Mr K]’s favour represented

an acknowledgement of the disparity in the parties’ ages. The Court cannot
understand this proposition given [Mrs K] is older than [Mr K].

42 Further, the final application asserts that [Mrs K] made contributions of 80% to

the assets of the marriage and where provision is made for additional relevant matters
pursuant to s 75(2) of the Act, despite [Ms W]’s evidence, nothing is noted.

43 When one considers the effect of the property orders sought by the parties,

without any omissions or errors, the division represents a split of around 86% in [Mrs
K]’s favour and not the 70% proposed by the document.

• On what are the consent orders based?

44 The parties were in a relationship of around 16 years. The parties acknowledge that [Mrs K] had greater assets at the time the parties commenced cohabitation.

45 In 1989 I accept that [Mrs K] had a property in [the metropolitan area] which

was sold in 1992. The net proceeds of sale of approximately $60,000 were used to reduce the mortgage on the [residential] property. [Mrs K] also received a redundancy payment of approximately $16,000 in 1990. In turn I accept [Mr K] received an inheritance of $20,000 in 1992. Both used these monies for their joint benefit.

46 The proceeds of sale of [Mrs K]’s property enabled the parties to reduce the

mortgage over [the residential property] and then redraw it for other purposes including for their business venture. Although it was not the foundation for their position in March 2006 it assisted them in reaching that position more quickly than they might otherwise have been able.

47 During the relationship both parties worked hard. [Mrs K] deposes that their incomes were always pooled and expenses met from those incomes.

48 On the basis of the affidavit material filed by the parties and their evidence at

trial, apart from the [metropolitan] property, it would not be difficult to find the contributions of the parties during the course of the relationship to be equal. At the time the consent orders were made the only disparity, in my view, in the contributions of the parties related to [Mrs K]’s initial contribution of the [metropolitan] property. This would warrant some adjustment in her favour.

49 Given, at the time the final consent application was signed, both parties were

earning comparable incomes and both parties had a reasonable working life ahead it is
difficult to see how any adjustment for s 75(2) factors was appropriate.

50 It is not altogether easy to establish just exactly what the parties had at the time

they separated. Both gave evidence that at the time the application for consent orders

[2009] FCWA 47

was signed their main focus was the transfer of the real estate. Scant regard was paid to other matters, save that [Mr K] was to fund the purchase of a car for [Mrs K]. Although [Mr K] disputes some of the values of the assets he accepted in cross- examination that the values were in accordance with advice the parties received at about that time and he had no issue with them.

51 There is uncertainty about the exact value of the furniture and how that was

distributed. I am of the view that apart from the stereo equipment [Mr K] was able to
access and remove the items of furniture that he wanted.

52 I am also left in some doubt about the credit cards and who was responsible for

their payment. Although [Mr K] says he paid the bulk of any outstanding amounts the documents tendered in evidence did not necessarily support his position that [Mrs K] had not paid anything. However, the credit card he used may have had more on it than the final consent application revealed. [Mrs K] accepted that there was over $5,000 owing on the Visa card [Mr K] had to pay off. [Mr K] says it was $7,000 or $8,000.

53 Doing the best I can, I find the assets and liabilities at that time to be,

approximately:

ASSET	VALUE
[Residential property]	$700,000
[Business property]	250,000
[Motor vehicle]	25,000
[Motor vehicle]	35,000
Furniture	20,000
Funds in bank accounts (BankWest)	10,000
Boat	10,000
Assets TOTAL	$1,050,000
Superannuation Assets
AXA (wife)	18,984
Husband (Fund not stated)	24,000
Superannuation Assets TOTAL	$42,984
Assets TOTAL (including Superannuation Assets)	$1,092,984

[2009] FCWA 47

Liabilities

[Residential property] mortgage	103,000
[Business property] mortgage	148,000
Loan [Motor vehicle]	23,000
Loan [Motor vehicle]	27,000
Credit Cards (Visa)	7,000
Credit Cards (Handicard)	1,000
Liabilities TOTAL	$309,000
Net Assets TOTAL	$783,984

54 [Mrs K] received the bulk of the assets. On these calculations she received

about 85%. This is much in accordance with figures put forward on behalf of [Mr K]
at trial.

55 On the basis of the evidence at trial it is likely that this figure would have far

exceeded any outcome after a hearing. It is more likely that [Mrs K] could have retained in the vicinity of about 60% - 65% of the assets – which is a disparity of up to 25% to that actually ordered.

56 [Mr K] is accepting some adjustment would be made for the [metropolitan]

property however, the adjustment of around 35% in [Mrs K]’s favour is simply not
sustainable.

57 Although a Court may adopt a less rigorous approach in the scrutinising and

granting of orders sought by consent, there is still an obligation to ensure that any orders made are within the bounds of fairness. If there are doubts due to errors, miscalculations or perceptions of fairness it is necessary to seek clarification of the position from the parties especially where any inequity appears to fall on a party who is unrepresented and who has not had legal advice. It may well be these checks and balances did not work on this occasion.

58 Without more the Court is of the view there is a substantial issue to be tried. It is

now necessary to consider whether it is appropriate to extend the time within which to
appeal.

Delay

59 On one view a period of almost three years passed between the date of the

making of the consent orders and the filing of the amended application specifically to

[2009] FCWA 47

extend the time within which to appeal those Orders. However, the situation bears
some closer analysis.

60 [Mr K]’s complaint is not what is contained in the orders made but what he sees

as being omitted from them. The main omission appears to be the ability to use the [residential] property as financial security for future projects or investments. He says he only discovered this had not been included in the Orders after he sought [Mrs K]’s assistance some time later and when other oral agreements were allegedly breached.

61 It was approximately a year after the Orders were made that [Mr K] took steps to

obtain a copy of them, carefully read and consider their nature. Then, some months later, he arranged for his own legal advice. In November 2007 an application was made pursuant to s 79A of the Act.

62 Although the first application filed was pursuant to s 79A of the Act I accept such an application was made on legal advice and the aim was to challenge and change the consent orders. [Mrs K] was then on notice of this. The filing of that application was effectively just over one year and eight months from the making of the consent orders.

63 It is simplistic to look at the time from the date of the consent orders to the date

of the amended application in January 2009. There is no doubt there has been a delay but I am satisfied that difficulties, perceived or otherwise, with the orders were not immediately apparent.

64 In any event, the delay, although not to be condoned is not such as to prevent the application being made, given there is a substantial issue to be tried.

Hardship or prejudice to the wife

65 Clearly it is desirable for separated couples to attain finality in their financial

matters. [Mrs K], and indeed [Mr K] have both proceeded on the basis that the orders
were to be complied with.

66 Despite some technical difficulties, [residential property] was transferred into

[Mrs K]’s sole name with [Mr K]’s acquiescence. [The business property] was transferred into [Mr K]’s sole name and he sold that property in September 2007 albeit after he had attended Shann Family Lawyers in relation to his discontent with the orders. Shortly after the orders were made [Mr K] purchased a vehicle for [Mrs K] and has made regular payments in relation to that vehicle since.

67 Life has moved on with the parties going their separate ways. The fortunes of the parties have changed to a certain extent.

68 [Mrs K] will suffer hardship and prejudice with any granting of leave. However,

given her present circumstances I am satisfied that, if appropriate, such hardship and
prejudice can be ameliorated to a certain extent by a costs order.

[2009] FCWA 47

Exercise of discretion

69 Pertinent to the exercise of my discretion is a need to consider what could

loosely be described as [Mr K]’s prospects of success if leave is granted. In this case that translates to being the likely outcome given the present circumstances of the parties once the exercise pursuant to s 79 of the Act has been undertaken.

70 In that regard an accepted four step process needs to be applied. Those steps

are:

• to make findings as to the identity and value of the assets and liabilities of the parties;

• to indentify and assess the contributions made by the parties to the assets;

• to identify and assess the s 75(2) factors which relate mostly to prospective contributions; and

• consider whether the proposed orders are just and equitable.

71 If I am to exercise my discretion the matter proceeds as a hearing de novo. The Court determines the application on its merits having regard to the factors set out in s 79(4) of the Act as they exist presently. In order to assess the prospects of success I will go through that exercise.

72 I find the present asset pool to be:

ASSET	OWNERSHIP	VALUE
Shares	Husband	$20,000
Boat	Husband	8,000
[Motor vehicle]	Husband	25,000
[Eastern states] property	Husband	275,000
Personal property	Husband	1,800
Bank Account	Husband	600
[Residential] Property	Wife	550,000
[Motor vehicle]	Wife	18,000
Bank Account	Wife	5,047
Furniture (including other personal property)	Wife	4,100

[2009] FCWA 47

Assets TOTAL	$907,547
Superannuation Assets

Fund not stated	Husband	31,160
Rio Tinto/AXA	Wife	34,140

Superannuation Assets TOTAL $65,300

Legal expenses paid	Wife	22,500
Legal expenses paid	Husband	47,000

Assets TOTAL (including Superannuation Assets)	$1,042,347
Liabilities

[Motor vehicle] car loan	Husband	12,000
Credit cards – various	Husband	14,800
Mortgage – [Eastern states property]	Husband	282,845
Mortgage –[Residential property]	Wife	140,000

Net Assets TOTAL $592,702

73 On these figures [Mrs K] presently retains approximately 82% of the assets with [Mr K] retaining approximately 18%.

74 There are certain items not included in the schedule but which would be taken

into account in a general sense pursuant to s 75(2) of the Act. It is clear that [Mr K] has not completed his taxation returns for a number of years despite the fact he may well be eligible for a considerable refund given the loss of income on his investment property in [the Eastern states]. [Mrs K]’s counsel estimated this to be between $10,000 and $20,000.

75 [Mr K] has a capital gains tax liability of some $33,000 to $36,000 for the

[business property] sale. This property sold for more than it was valued in March 2006. The parties had accounting advice in this regard. Again like his other taxation matters the amount has not crystallised completely. However, I do take into account [Mr K] has a potential taxation refund but a corresponding liability for capital gains tax.

• Contributions

76 It is necessary to consider the contributions made to the present pool of assets

and also how the composition of the present pool was arrived at. [Mrs K] has suffered a considerable loss in the value of her real estate. The parties are both conscious that

[2009] FCWA 47

the economic downturn has affected them both. In terms of [residential property] the value has reduced by about $150,000. However, [Mrs K] has maintained that property and made all the mortgage and other payments in relation to it. [Mr K] has made no contribution to it at all.

77 [Mr K] sold the [business] property in late 2007. He received $117,000 for the

sale. He said he used about $37,000 to purchase shares in April or May 2008. These shares are now worth $20,000. In his financial statement filed 16 September 2008 he deposes to having savings of some $25,000. He said he subsequently used this money to purchase options. He said he suffered a loss of between $7,000 - $10,000 on those options. He said he paid some legal fees from the proceeds of sale. He also discharged a credit card debt of around $8,000. This accounts for the sale proceeds without there having been any provision for capital gains tax. The shares and options have clearly lost value.

78 [Mr K] and [Ms H] purchased the [Eastern states] property aware that all the

purchase price would be borrowed. Although that property has increased in value slightly [Mr K] and [Ms H] owe more than it is worth. It was bought as an investment and takes into account the benefits of negative gearing. This provides [Mr K] with some tax relief in the short term and possibly a reasonable investment in the long term.

79 Like [Mrs K] the values of some of the other property he retained in March 2006 has reduced in value simply due to the effluxion of time.

80 Both parties have continued to contribute to their own superannuation fund.

81 The single most valuable asset of the parties remains the [residential] property.

Although it has decreased in value, this is related to market forces rather than any actions of the parties or default by [Mrs K].

82 [Mr K] has paid the loan on [Mrs K]’s [motor] vehicle. She has had the costs of

maintaining the vehicle but the costs of the vehicle itself has been borne solely by
[Mr K], as was agreed in March 2006.

• Assessment on contributions

83 The parties have taken quite separate paths in their financial matters since the

orders of March 2006. It is difficult to reduce any assessment to a precise mathematic
calculation.

84 [Mrs K] has made the sole contribution to [the residential property] since that

time. The mortgage has increased. It is the property into which the proceeds of sale of her [metropolitan] property went and although it has not increased in value the property is the cornerstone of their present position.

85 [Mrs K] appears to have adopted a relatively conservative approach to her

finances. She has some modest savings, and she retains her motor vehicle and some
furniture.

86 [Mr K] has adopted a more speculative approach. He has invested his money in

shares, options and an investment property. At the present time none of these are

[2009] FCWA 47

flourishing or showing much, if any, profit. He has not utilised the proceeds of sale of Auger Way to make provision for the capital gains he will inevitably, in some amount, need to pay unless he has other forms of tax relief to offset that debt. Apart from payment by [Mr K] of the [motor vehicle] [Mrs K] has made the overwhelming contribution to the present asset pool.

87 Overall I would assess her contribution at 70%.

• s 75(2) matters

88 The parties both continue to be in employment, although [Mrs K] was made redundant on 5 March 2009. She received a lump sum payment of $42,096. On 30 March 2009 she was able to start a new job as [ office manager] earning $52,000, which is about half her previous wage.

89 [Mr K] earns about twice as much as [Mrs K] each week but he also has more

expenses. He says his employment future is uncertain, however he is currently in a position he has held for some time. Each has modest superannuation. Each has a property which is rented.

90 I am conscious that [Mr K] is to pay capital gains. He has not made any

provision for this. The parties specifically took advice from [Mr S] before they signed the consent orders in March 2006. The only focus they had was the disposition of their real estate. It was accepted and is still accepted that [Mr K] was to take the [business] property and [Mrs K] retain the [residential] property. [Mr K] made a choice not to make provision for the capital gains but appears to have utilised most of that money for shares, options and property investments. Additionally he is likely to get a tax refund when he completes his returns.

91 I am satisfied that on the basis of her reduced earning capacity and with less time remaining in the workforce there would be an adjustment in her favour of 2%.

92 Having completed the majority of the exercise pursuant to s 79 of the Act I am of the view that [Mr K] has some prospects of success. If the same exercise had been conducted in March 2006 it is likely [Mr K] would have fared considerably better than he did at the time. He could have received a payment of over $150,000. However, time nor the parties’ assets have stood still and the payment is now considerably less. The parties must jointly share in the ups and downs of the market and the present economic climate.

93 Given that my view is there is some prospect of success I do intend to extend the

time within which to appeal and exercise my discretion to hear the matter de novo. I intend to make orders on the basis of the foregoing analysis. This being the case, I consider it unnecessary to proceed to consider the alternate claim pursuant to s 79A of the Act.

• Just and Equitable requirement

94 I now turn to the last step in the property settlement exercise.

95 In this case any earlier agreement which the parties may have considered to be fair is something the Court can take into account.

[2009] FCWA 47

96 [Mr K] said he was not dissatisfied with the manner in which the real estate had

been divided in 2006. His main concern was that he was robbed of some benefits he
believed [Mrs K] would extend to him. Those benefits, he says, were fourfold:

• The ability to use [the residential property] as security for borrowings;

• The continuation of joint HBF payments by [Mrs K];

• The equal splitting of credit card debt; and

• An equitable splitting of the parties’ furniture.

97 [Mr K] was quite clear that he had wanted [Mrs K] to have

[the residential property] despite the greater value as long as he was able to use it as security for future endeavours. [Mrs K] accepted this had been discussed and it was something [Mr K] may have expected. She agreed it was something she was prepared to consider on the basis that any proposal would be assessed when it arose. She said that nothing had ever really been put to her.

98 She deposes to [Mr K] asking her in March 2007 whether the [motor vehicle]

loan could be secured against the house. She said she could not do it at the time he asked as the house had not then been transferred into her sole name. She said she had intended to pay out the loan for her car, but for which [Mr K] was responsible, once she was able. This did not happen.

99 [Mr K] said he also wanted [Mrs K] to continue with joint payments she was

making on the parties’ health insurance. Due to the nature of her employment [Mrs K] was in a position to obtain an annual rebate for payments she made whereas, at the time, [Mr K] was not. They would do a reckoning at the end of the year. Both parties accept, due to bank error, [Mr K]’s payments were no longer automatically withdrawn from [Mrs K]’s account from about August 2006 onwards. This was not a deliberate action on [Mrs K]’s part and she notified [Mr K] of the error. She suggested he make his own arrangements given by then he was also in a position to claim the rebate himself. The evidence, which was not really challenged, is that [Mr K] was equivocal about this. He took no steps himself. I am not satisfied there has been any default by [Mrs K] in this regard.

100 [Mr K] says he understood that the credit card debt would be split equally.

[Mrs K] says there was no such agreement at the time although she acknowledges her intention was it be shared equally. Each used a credit card. She accepted at trial that [Mr K]’s debt was far greater than she had been aware of at the time. She only saw his bank statements during the course of disclosure prior to trial. I accept that [Mr K] has had to pay the greater share of credit card debt incurred by the parties prior to separation but I also accept it was not a matter of much discussion in March 2006.

101 [Mr K] also says that furniture was not split equally. Save and except for a

stereo I am satisfied that [Mr K] has had every opportunity to avail himself of the furniture. The manner in which [Mrs K] disposed of the stereo is unfortunate. I

[2009] FCWA 47

accept that it would be uncomfortable and inappropriate for [Mr K] to now seek the
return of that item. It was unilaterally disposed of without consultation.

102 It is apparent to the Court that although not contained in the written agreement

there was a general expectation that credit card debt would be borne equally, there would be an equitable adjustment of furniture including [Mr K] receiving the stereo and that [Mrs K] would seriously consider [Mr K] using [the residential property] as security for future borrowing. I am satisfied that the last matter never really arose and thus it was never tested. I note that [Mrs K] was prepared to take over the car loan or at least arrange for it to be paid out.

103 Given this, I consider [Mrs K] should now be responsible for the [car loan]

which at trial was $12,000. She deposes to an intention to take this loan over as early
as March 2007.

Conclusion

104 The real effect of this is [Mrs K] will retain $481,787 of the net assets and

[Mr K] $110,915 of the net assets. [Mrs K] will thus need to pay [Mr K] $55,042 and take over the car loan. Overall she will retain 72% of the assets and in all the circumstances I consider this just and equitable.

105 [Mrs K] will need to re-organise her finances to pay [Mr K]. Taking into

account the evidence at trial that she has some ability to redraw her mortgage it is highly unlikely she will need to sell [the residential property], something the parties never intended. However, she now has a reduced capacity to repay any mortgage.

106 The orders I intend to make, subject to any submissions from counsel are:

1.	The husband be granted an extension of time within which to appeal the orders of the Magistrates Court of Western Australia sitting at Busselton on 14 March 2006 and the appeal be allowed.
2.	That within 60 days of the date of these orders the wife pay to the husband the amount of $55,042.
3.	The wife do all such things and sign all necessary documents to either re-finance or discharge the BankWest personal loan currently in the husband’s name relating to the [motor vehicle] and to reimburse the husband an amount representing any difference between the balance owing on the loan at the date of these orders and $12,000.
4.	The applications and responses otherwise be dismissed.
5.	Each party have 28 days in which to file any submissions in relation to the issue of costs and 14 days thereafter in which to reply to such submissions.

[2009] FCWA 47

I certify that the preceding [106] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate