KAFER & KAFER
[2019] FCCA 2255
•19 August 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KAFER & KAFER | [2019] FCCA 2255 |
| Catchwords: FAMILY LAW – Property – distribution of matrimonial property – future needs – allegations of family violence – whether family violence impacted the Wife’s financial contributions to the marriage – allegations of non-disclosure – previous judgment debt – whether judgment debt should be treated as a joint liability – joint liability. |
| Legislation: Evidence Act 1995 (Cth), s.140(2) Family Law Act 1975 (Cth), Pt. VIII, ss. 75(2), 79, 79(2), 79(4), 90XT(1)(a) Family Law (Superannuation) Regulations 2001 (Cth), Pt. 6 Federal Circuit Court Rules 2011 (Cth) |
| Cases cited: Antmann and Antmann [1980] FamCA 64 Biltoft and Biltoft [1995] FamCA 45 |
| Applicant: | MS KAFER |
| Respondent: | MR KAFER |
| File Number: | MLC 29 of 2016 |
| Judgment of: | Judge Carter |
| Hearing dates: | 28 & 29 May 2019 |
| Date of Last Submission: | 29 May 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 19 August 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Felkel |
| Solicitors for the Applicant: | My Legal Crunch VIC |
| Counsel for the Respondent: | Ms Bryan |
| Solicitors for the Respondent: | Amicus Lawyers |
ORDERS
The parties forthwith do all such acts and things as may be necessary to place on the market for sale the real property situated at and known as Street A, Suburb B in the State of Victoria (“the Street A, Suburb B property”) and for the purposes of the sale:-
(a)the real estate agent be as agreed within 14 days and failing agreement as nominated by the President of the Real Estate Institute of Victoria or their nominee; and
(b)the sale be conducted on such terms and on such conditions as agreed upon by the parties at the direction of the real estate agent, and failing agreement, the parties have liberty to apply to the Court.
The proceeds of sale of the Street A, Suburb B property be applied as follows:-
(a)firstly to pay all costs, commissions and expenses of sale;
(b)secondly, to discharge the mortgage and any other encumbrance secured over the property;
(c)thirdly, to pay any water rates and council rates outstanding as at the date of sale;
(d)fourthly, to pay such amount as is outstanding to C Pty Ltd, with the Husband to provide to the solicitors for the Wife documentary evidence of the precise amount owing, along with confirmation that such sum has been paid;
(e)fifthly, to pay to the Wife the sum of:-
A + $9,000 x 60% - $2,000
where A is the proceeds of sale after the payments pursuant to paragraphs (2) (a)-(d) inclusive; and
(f)lastly, the balance then remaining to the Husband, SAVE THAT the Husband shall pay the additional sum of $1,081 (being the costs ordered on 21 July 2016) to the Wife from his share.
Pursuant to section 90XT(l )(a) of the Family Law Act1975 (“Cth”), whenever Super Fund S ("the Trustee") of Super Fund S ("the fund") make a splittable payment from the interest held by the Husband, Member number … in the fund the trustee shall:-
(a)pay to the Wife or her administrators or executors and beneficiaries, heirs or assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth); and
(b)make a corresponding reduction in the entitlement that the Husband would have had in the fund but for these Orders.
The base amount allocated to the Wife out of the interest held by the Husband in Super Fund T - Super Plan is $14,000.
The following Order has effect from the operative time and the operative time of these Orders is five (5) business days after the date these Orders are served upon the Trustee.
The Trustee of the fund shall do all such acts and things and sign all such documents as may be necessary, such that the trustee in accordance with the obligations set out in the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 (Cth) can calculate the entitlements of and make payments to the Wife in accordance with paragraph 5 of these Orders.
This order binds the Trustee of Super Fund S.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:-
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the Wife);
(b)monies standing to the credit of the parties in any joint bank account are to be divided equally between the party and thereafter any such account be closed;
(c)insurance policies remain the sole property of the owner named thereon;
(d)each party retain for their sole use and benefit their superannuation entitlements;
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
All extant applications are dismissed and the matter removed from the list of pending cases maintained by the Court.
AND THE COURT NOTES THAT:
A.The letters from Super Fund S dated 10 November 2016 and 7 August 2019 confirms that the Trustee has no objection to the Superannuation Splitting Order contained in these orders.
IT IS NOTED that publication of this judgment under the pseudonym Kafer & Kafer is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 29 of 2016
| MS KAFER |
Applicant
And
| MR KAFER |
Respondent
REASONS FOR JUDGMENT
Introduction
The Court has been asked to determine the parties’ property dispute under section 79 of the Family Law Act (“the Act”).
In summary, the Wife seeks to retain the property at Street A, Suburb B (“the former matrimonial home”), paying the Husband an amount equal to 20% of the equity, and that the Husband retain his superannuation and a debt of $39,000 to C Pty Ltd (“C Pty Ltd”).
Conversely, the Husband proposes a division of the pool, inclusive of the debt to C Pty Ltd, of 60% to the Wife and 40% to him.
The parties agree the settlement should include a split to the wife of around $14,000 from the Husband’s superannuation entitlements.
Although the asset pool is modest, this matter required careful consideration as a result of the assertions made by the Wife regarding family violence and non-disclosure.
Background
The Husband was born on … 1963 in Country U and is aged 56. The Wife was born on … 1968 in Country U and is aged 51. The parties met in 1994 following the Wife migrating to Australia. They began living together in 1995 and married on … 2003.
The parties have four children, Mr V born on … 1996 now aged 22, Ms W born on … 1998 now aged 21 and twins X and Y born on … 2002 and now aged 17. Mr V is studying at D College and Ms W is working as a customer service officer. The younger children are currently completing their year 12 studies at Suburb Z High School.
On … 2001, the parties purchased the former matrimonial home in Street A, Suburb B. The Wife says this was purchased for $164,250, and was subject to a mortgage. The property was registered in the Husband’s sole name. The Wife asserts this was at the Husband’s insistence, and that he misled her as to the law in Australia about property ownership. The Husband denies any nefarious motivation on his behalf.
The Wife was studying at the commencement of the relationship. She worked part time between 2002 and 2009, although she says she primarily stopped work in 2007. The Wife was otherwise providing care for the children.
The Husband was previously employed as a tradesman. In around 2006, he suffered a workplace injury in which he sustained spinal and brain injuries. He was hospitalised for 5 days and remains on a Disability Support Pension.
The parties refinanced the mortgage encumbering the former matrimonial home in 2006. The parties borrowed $250,000. At that time, the bank valued the property at $350,000.
The Wife asserts the Husband became depressed, aggressive and threatening following the workplace injury. She deposes to being subjected to ongoing verbal and physical abuse, which I shall consider later in these reasons.
In 2007, the Wife says she was subjected to workplace bullying. She says that incident, together with the ongoing abuse she says was perpetrated by the Husband, caused her to develop “a psychiatric illness”. There were several attempts made to return her to work until 2009 but she was unable to do so. In September 2010, the Wife was granted the Disability Support Pension.
In late 2009, the Husband set up a business called E Pty Ltd (“E Pty Ltd”). He leased factory premises at Street F, Suburb G (“the factory”) from a Mr H (“Mr H”), pursuant to which he was to pay rent in the sum of around $3,000 per month. It is the Husband’s case that this business was not profitable and that it ceased trading in 2013.
In the course of running E Pty Ltd, the Husband incurred a liability to C Pty Ltd. In 2010/2011, C Pty Ltd took legal action to recover that debt and there is a judgement debt and amount owing against the Husband of approximately $39,000.
There is some dispute about when the parties separated, and the evidence was confusing and unclear. The Wife initially said the parties separated on 16 January 2013, when she obtained an Intervention Order which did not exclude the Husband from the former matrimonial home. In her oral evidence she said she had hoped the marriage was salvageable, until she obtained a full Intervention Order on 10 February 2014. At that time the Husband was excluded from the former matrimonial home for a period.
The Husband was then in a car accident in late 2014. The Wife varied the Intervention Order to enable him to return to the former matrimonial home. He remained at the former matrimonial home between December 2014 and 24 March 2015, when the Wife obtained a further Intervention Order excluding him from the former matrimonial home once again. The Husband said the parties did not separate until 24 March 2015. He has not returned to live at the former matrimonial home since that time.
It is common ground that the children remained living with the Wife in the former matrimonial home after the Husband moved out in February 2014 and following him leaving again in March 2015.
The Husband moved into the factory in March 2015. He says the business was no longer trading, but he had not terminated the lease. He now lives with his sister.
Neither of the parties are engaged in paid employment, and both are in receipt of the Disability Support Pension.
Procedural history and events after the institution of proceedings
The Wife commenced these proceedings on 4 January 2016. At that time, she sought orders regarding property and parenting matters.
Orders were made on 29 March 2016, pursuant to which the Wife was granted sole use and occupation of the former matrimonial home, and the Husband was to file his responding material. There were additional orders for discovery and valuations. The parties were given a Conciliation Conference date in July 2016 and a Final Hearing in November 2016, although that trial did not proceed at that time.
The Husband failed to file his material, which resulted in an aborted Conciliation Conference and a subsequent costs order in the sum of $1.081 being made against the Husband on 21 July 2016. He proposes that be paid to the Wife from his final property entitlement.
On 28 September 2016, the Wife filed an Application in a Case in which she sought, inter alia, discovery from the Husband and the payment of water rates.
The Husband filed his responding material on 18 October, 2016, which he then amended on 4 November 2017. He seeks substantially the same orders at trial as he sought in his Amended Response.
Consent orders were made on 4 November 2016 which resolved parenting issues. Those orders provide that the parties have equal shared parental responsibility for the twins, they live with the Wife, and spend time with the Husband as agreed between the parties in accordance with the children’s wishes. Orders were also made to enable the former matrimonial home to be valued, as the parties had been unable to agree as to who should conduct that valuation.
When the Husband’s solicitors wrote the Wife in November 2016, regarding sending a valuer to value the former matrimonial home, the Wife refused to agree, saying that this would be a breach of the Intervention Order. The Wife said she would report the Husband’s solicitors to the police, that “you do not have right to upset me and anyone send. You all worked against me… forget value”.
Further interim orders were made by consent on 22 March 2017 which provided for the Wife to renegotiate the mortgage repayments on the former matrimonial home, to reduce them from $900 per fortnight to $1,050 per month. The final property proceedings were otherwise adjourned pending the outcome of the Wife’s WorkCover proceedings (“the WorkCover claim”) for damages in the County Court of Victoria (“the County Court”). Neither Counsel for the Husband nor Counsel for the Wife were able to advise me when those proceedings were commenced by the Wife. The County Court orders note that the Wife was seeking $750,000 in damages as part of her WorkCover claim.
At that time, the Wife’s solicitors ceased to act.
In June and July 2017 the Wife filed Applications in a Case. The first of those was adjourned to a date to be fixed and has apparently not been dealt with. The second application was misconceived and was dismissed on 17 July 2017, with the Husband’s costs being reserved. An additional order was made for the Wife to provide a copy of the letter she received from her Motor Vehicle AA insurer following her car being “written off”.
According to the report of Dr J, psychiatrist (“Dr J”) the County Court delivered its Reasons for Judgment in relation to the WorkCover claim on 20 April 2018. Her application was dismissed.
On 4 May 2018, the parties had still not been able to appoint a joint valuer and additional orders were made for the Wife to nominate a list of three valuers from which the Husband could choose. Orders were again made for the Husband to provide discovery.
On 22 October 2018 the Wife filed a further Application in a Case. Orders were made on 25 October 2018 which gave leave to the Wife to issue more than five subpoenas and liberty to obtain a psychiatric assessment of herself. The psychiatric assessment was to address questions of whether the Wife required a litigation guardian, her current and historical psychiatric conditions, and the cause and effect of her psychiatric conditions.
The Wife then attended upon Dr J on 8 January 2019. He prepared a report dated 24 March 2019 which was filed on 3 April 2019. Dr J was not required for cross-examination.
The evidence
In these reasons, any findings of fact are made on the balance of probabilities. I have read the material carefully, and had the benefit of observing the demeanour of each of the witnesses. I also bear in mind section 140(2) of the Evidence Act 1995 (Cth) and the comments made by Dixon J in Briginshaw v Briginshaw [1938] HCA 34, pursuant to which I am entitled to take into account the nature of the subject matter of the proceedings, and the gravity of the matters alleged in applying that standard of proof. As his Honour said:-
The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the Tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.
In this case, the Wife asserts the Husband has:-
a)subjected her to ongoing physical, emotional, verbal and financial abuse, which has impacted on her capacity to make contributions; and
b)hidden assets and income from her, both during the marriage, and post-separation.
These are significant allegations to make.
The Wife
The Wife wishes to retain the former matrimonial home. She also proposes that:-
a)the Husband retain his superannuation entitlements;
b)the parties equally pay the outstanding council and water rates and arrears of rates;
c)the Husband alone should bear the responsibility for the judgment debt in favour of C Pty Ltd; and
d)she retain responsibility for her legal fees to Mr Mayka of approximately $13,000.
During closing submissions, Counsel for the Wife proposed that the Wife retain 80% of the equity in the former matrimonial home. She did not alter her position in relation to the judgment debt.
There are three main limbs to the Wife’s case:-
a)firstly, that the Wife’s family have provided substantial financial contributions both during the marriage and post separation, and that these contributions need to be taken into account;
b)secondly, that the Wife’s ability to make contributions were made more arduous by the Husband’s ongoing abuse of her; and
c)thirdly, that E Pty Ltd made substantial profits, and has plant and equipment, all of which have been hidden by the Husband and either used or retained by him for his sole benefit. She says further that the Husband is working, or is able to do so, and is hiding his income. She asserts the Husband has significantly failed to comply with his obligations as to disclosure. She asserts that the Court should draw adverse inferences from his failure to produce discoverable documents.
The Wife gave evidence in accordance with her affidavit filed on 6 May 2019. She elected to give her evidence through an interpreter, although her Court documents were signed by her without the assistance of an interpreter. I do not draw any adverse inference from this, as it is clear that English is not the Wife’s first language, and whilst she was comfortable to swear her affidavit material without the need for an interpreter, it is understandable that she required the assistance of an interpreter at Court.
At times, the Wife’s evidence was confused and confusing and contradicted her sworn evidence. At times, when cross-examined about an inconsistency or error in her material, the Wife said she had “told my solicitors everything”, and suggested that any errors were the fault of her solicitors. At times, she suggested that a Magistrate and the Husband’s criminal barrister had colluded against her and that she needed protection from the police. There appeared to be no evidence to support those allegations. Whilst I am careful to factor in to my assessment of the Wife’s evidence her mental health and language issues, I find she was at times evasive, contradictory, and confused in her evidence and allegations, and I treat her evidence with caution.
The Husband
The Husband’s application, broadly, is that the pool be divided 60% to the Wife and 40% to him, which should include a superannuation split to the Wife of $14,000. He further proposes that the Wife retain liability for her previous lawyer’s fees, and he will pay the Wife the sum of $1,081 from his 40% share of the pool, being a costs order made against him on 21 July 2016 as a result of the wasted Conciliation Conference.
In summary, he argues that the parties enjoyed a lengthy marriage, and that they each contributed as best as they could. He acknowledges the Wife continues to have the primary care of the parties’ 17 year old twins as she has since separation. That is effectively the basis upon which he proposes there should be a 5% adjustment in the Wife’s favour. He denies the Wife’s allegations of abuse, control and violence. He says neither party is able to work due to ill health. It is his case that the Wife’s circumstances and post separation contributions should result in a further 5% adjustment in her favour.
The Husband further denies her allegations that he has not made full and frank disclosure or that he has hidden assets or income.
Neither party was particularly impressive in terms of historical accuracy, particularly in relation to the sequence of events surrounding the various Intervention Order proceedings. However, I generally preferred the evidence of the Husband to that of the Wife’s where they conflicted. He endeavoured to be responsive, gave his evidence in a straightforward manner and made reasonable concessions.
Dr J
Dr J produced a psychiatric assessment of the Wife dated 24 March 2019. As part of that assessment he met with the Wife on 8 January 2019.
The Wife told him the Husband began “putting [her] down in 2007” and that the relationship “was bad from 2013”. Dr J summarised a number of psychiatric and other medical records regarding the Wife. The Wife has suffered from depression, anxiety and panic attacks, along with periods of being tearful and having poor sleep. She has been assessed on multiple occasions by different professionals, who have variously diagnosed her as suffering from, inter alia, panic disorder, agoraphobia, adjustment disorder with mixed anxiety and depressed mood, major depressive disorder and paranoid personality disorder.
Dr J also reported that the Wife told him her two previous family lawyers had colluded with the Husband’s lawyers to resolve the matter in his favour and that they had assisted the Husband to hide his finances from her. I should say there was no evidence before me to support that allegation.
Dr J assessed the Wife as suffering from a panic disorder with agoraphobia in addition to a major depressive disorder. He rejected a diagnosis of a paranoid personality disorder. He said in trying to make sense of legal outcomes, she has made paranoid interpretations and said she may adopt a “paranoid position if she perceives that the proceedings are not going her way”.
Dr J concluded that the “workplace and marital situations are important factors in the origin of her symptoms”.
He further concluded that her disorders currently impede her ability to be able to work. However, he assessed her as being able to give instructions and that she did not require a litigation guardian.
In terms of the concerns about the Wife’s paranoid interpretations, I note her evidence before me included that:-
a)the Husband’s barrister had assaulted her at Court on a previous occasion;
b)the Husband’s barrister had forced her adult children to lie in Court in support of the Husband;
c)the Husband was conspiring and plotting against her, including in 2013 when he allowed the mortgage to fall into arrears in a deliberate attempt to leave her homeless;
d)a Magistrate at some point conspired against her; and
e)she needs protection from the police.
As will be plain in these reasons, I do not accept those allegations. Other than the Wife’s bald assertions, there was no evidence to support her statements.
Legal Principles
This application is brought pursuant to Part VIII of the Act. Both parties seek that I adjust their interests in their assets, liabilities and financial resources.
Pursuant to section 79(2) of the Act, before making any order altering the interests of the parties to a marriage in relevant property, I must be satisfied it is just and equitable for me to do so. In Stanford v Stanford [2012] HCA 52 (“Stanford”), the High Court of Australia said that in order to consider whether it is just and equitable to make an order, I must first identify the existing legal and equitable interests of the parties.
If I am satisfied it is just and equitable for an order to be made, I am then empowered to make such order as I consider appropriate taking into account a number of factors as set out in sections 79(4) and 75(2) of the Act, insofar as they are relevant.
Assets, liabilities and financial resources as at the date of Final Hearing
The parties currently have the following legal and equitable interests:-
ASSETS
VALUE
The former matrimonial home at Street A, Suburb B (in Husband’s sole name)
$775,000
Husband’s Motor Vehicle K
$5,000
Husband’s Motor Vehicle L
$Not known
Husband’s Motor Vehicle M
$Not known
Chattels in the Wife’s home
$2,000
LIABILITIES
VALUE
Mortgage encumbering the former matrimonial home at Street A, Suburb B
$186,000
Judgment debt including incidentals
$38,958.95
Outstanding council rates
$14,434
Outstanding water rates
$15,250
Wife’s legal fees owing to her former solicitor
$13,000
The parties do not agree as to the following assets and liabilities:-
a)the value, if any, of E Pty Ltd, including plant and equipment. The Wife asserts this business continues to have value. She asserts the Husband has failed to provide full and frank disclosure in relation to this entity, and that I should draw adverse inferences from his failure to disclose. The Husband asserts he has $1,000 worth of tools and that E Pty Ltd ceased operating in 2013 and has no value;
b)the Wife asserted the Husband has $34,000 in superannuation in her documents, although it was conceded by Counsel for the Wife that he has a little less than $30,000. The Husband puts a figure of $28,000 in his Financial Statement. That was not challenged by the Wife;
c)the Husband proposed there be a notional add back of $3,700, being the superannuation the Wife withdrew and used for her legal fees in relation to her failed WorkCover claim County Court action; and
d)in terms of the liabilities, the parties do not agree as to how the judgment debt to C Pty Ltd should be treated. The Husband says this should be treated as a joint liability. The Wife says this should be the Husband’s sole liability.
In relation to the motor vehicles:-
a)I have no evidence as to the value of either of the Motor Vehicle L vehicle registered in the Husband’s name; and
b)I have included the Husband’s Motor Vehicle K motor vehicle in the pool at $5,000. That is the only vehicle the Husband refers to in his material. The Wife makes no reference to that vehicle.
The Wife asserts she owed $13,000 to her former solicitors. It is agreed the Wife shall bear that liability.
Evidence in relation to the disputed assets & liabilities
E Pty Ltd
E Pty Ltd was registered on … 2009 and commenced operating in 2010. The Husband leased the factory from which he operated that business, and into which he subsequently moved when the marriage ended.
It is the Wife’s case that E Pty Ltd was a lucrative business, and that the Husband continued to operate it until October 2016. She does not accept his evidence that he made very little money from the business, and says he only stopped running the business to assist him in these proceedings.
In support of her assertion that the business was thriving, the Wife says when she visited the factory prior to separation, the business appeared to be busy. She saw work being undertaken, packs of product, metal frames being joined, power tools and equipment. She says the Husband has not provided any information about the whereabouts of that plant and equipment.
The Wife relied on other circumstances in support of her assertion that the business was profitable and the Husband has access to funds, including:-
a)the business leased premises for $3,000 per month;
b)the Husband purchased a number of motor vehicles from N Car Auctions since 2015 which she says totals approximately $94,000; and
c)the Husband paid for $27,000 worth of dental work in 2013.
I will shortly turn to the evidence that relates to each of those assertions.
The Husband says the business was never profitable. It was deregistered on … 2013, less than four years after it commenced. The Husband asserts this was because it could not pay its debts. He says that E Pty Ltd owned no plant and very little equipment. He says in his affidavit that the total value of the second-hand tools he still owns would be less than $1,000 and that the only major piece of machinery he used was a crane, which he would either hire or it would be supplied by the client. He says he never owned a truck with a crane. I note the Husband refers to the value of tools “that I still own”. That suggests he had other tools at some stage. The Husband was not cross-examined on this point.
The business was not valued. It does not appear that the Wife ever sought that it be valued.
The Debt to C Pty Ltd
Shortly after commencing E Pty Ltd, the Husband entered into a credit agreement with C Pty Ltd, pursuant to which C Pty Ltd would provide him with $30,000 worth of product on credit. The Husband, who was personal guarantor for the debt, said the Wife knew of the agreement, and of the risks involved as he discussed it with her. The Wife says she did not know about it.
The product was delivered, pre-cut and engineered for a particular client. For some reason, it was not used or paid for by the client. The Husband says the product remains at the factory, unused and unpaid for. He said it cannot be sold to another client, as it was prefabricated for a specific job.
On … 2010, C Pty Ltd issued a claim in the Magistrates’ Court of Queensland to recover those monies. On … 2011 C Pty Ltd obtained a default judgment for the sum of $32,662.78 plus $1,558.45 in costs. E Pty Ltd and the Husband were the defendants in that action. I was not advised whether the Husband participated in those proceedings.
On … 2012, C Pty Ltd issued a Creditor’s Statutory Demand for Payment of Debt seeking payment of the default judgment.
Whilst I was not provided with any documentary evidence showing the precise amount currently owing to C Pty Ltd, I accept the Wife’s evidence as set out in her trial affidavit that C Pty Ltd have now obtained a summary judgment for the debt from the Magistrates’ Court of Victoria, for $38,289.55. She says C Pty Ltd has lodged a caveat over the former matrimonial home and require payment of the debt, together with costs for removing the caveat and legal fees of an additional $669.40. This totals $38,958.95 (“the C Pty Ltd judgment debt”).
The rental invoices
The Wife says the fact that the Husband entered into and maintained a lease with Mr H to pay $3,000 per month for the factory supports her assertion that E Pty Ltd was making a profit. She obtained and exhibited several invoices from Mr H for the period of September 2015 to July 2016.
The Husband disputes the authenticity of the invoices upon which the Wife relies. He says he never received those invoices, and they have not been paid.
The Wife’s evidence as to how she obtained the invoices was confusing. She initially said she found some documents at home, and some documents were provided to her by Mr H. When it was pointed out to her that the invoices pertained to the period of time that the Husband was not living in the former matrimonial home, and accordingly it would be highly unlikely she would have found them there, she changed her evidence, and said they all came from Mr H.
The Wife’s evidence was she understood that rental monies were owing to Mr H, but that Mr H had obtained legal advice and was not intending to take action against the Husband to recover any monies.
The Husband’s evidence was that he never paid $3,000 a month in rent for the factory. He said Mr H later let him sleep in the premises, and pay what he could for a period after separation, in circumstances where the Husband had nowhere else to go.
Mr H was not called to give evidence and the Wife did not rely on the affidavit that he had previously sworn on her behalf.
Motor vehicles
The Wife asserts that both during the marriage and post-separation, the Husband purchased vehicles at auctions, which he repairs and sells. She says he has not disclosed the income this generates throughout the course of these proceedings. She says he has not provided any evidence as to how those purchases have been funded and the Husband therefore must be working to earn the monies to fund those purchases.
The Husband says he does not make an income from what he describes as a hobby of buying and selling cars. He says he buys heavily discounted used and damaged vehicles from time to time. He admits he has purchased around 24 vehicles since 2015. Some he says he works on to restore. The most badly damaged ones he uses to salvage parts. He said that on a number of occasions, friends have provided him with funds to effect a purchase on their behalf but he makes no profit from this.
It is common ground that the Husband provided motor vehicles to Mr V and Ms W. The Wife asserts the car for Mr V is worth $10,000 and the car for Ms W is worth $6,000. I have no professional evidence as to what those vehicles are actually worth. The Husband says he bought them as “scrap cars” and repaired them in his spare time. He said Mr V’s car cost about $10,000 to purchase and repair to make the vehicle driveable and that Mr V provided some funds as well. He said Ms W’s car was purchased as a “repairable write off” for $3,000. He did some panel beating himself, and spent a total of $5,000 on the vehicle.
The Wife asserts she has seen “multiple” motor vehicles at the Husband’s residence. She does not give any particulars in relation to that assertion. She says she has evidence of fines for vehicles in his name. Leaving aside the propriety of her having apparently opened the Husband’s mail, the documents she produced reveal only two separate vehicles:-
a)a Motor Vehicle L, registration number …. The Husband did not include this vehicle in his Financial Statement. There is no valuation of the vehicle. The Husband’s relied on documents from VicRoads which show he purchased that vehicle in … 2016 for $4,000. The registration expired on … 2017. He says the vehicle has broken down, and he does not have the funds to repair it. The Husband did not offer any explanation as to why the vehicle was not included in his Financial Statement; and
b)a Motor Vehicle M registration number …. This vehicle was registered in the Husband’s name from … 2016 to … 2016. I do not know what amount, if any, the Husband received nor when, or if, he disposed of the vehicle.
The vehicle the Husband includes in his Financial Statement is a 2010 Motor Vehicle K, registration number …. He values that at $5,000. There was no evidence the Wife required that vehicle to be valued.
The Wife previously had a Motor Vehicle AA. She was involved in an accident in 2017, and subsequently received the sum of $9,204 from the insurer. She acknowledged in her oral evidence that she used the funds to meet her own legal fees, other bills and to repay an undisclosed amount to her father.
Dental work
The Wife said the Husband had sufficient funds to meet the costs of $27,000 worth of dental work.
Attached to the Wife’s affidavit were documents containing quotes to the Husband for various options of dental work ranging between $13,000 and $27,000. The actual invoice rendered by the dentist on 11 October 2013 was for $13,800. I accept the invoice was reflective of the work actually done.
The Husband’s evidence was that the total amount payable amounted to $13,800 and he paid that off over time. I note that the sum of $800 is paid to the dentist, Mr O, from the E Pty Ltd account on 21 January 2014. He said he has repaid the amount in full, and he used some funds from his sister to make all the repayments.
Council Rates and Water Arrears
The sum of $14,434 is owed by way of unpaid council rates and the sum of $15,250 is owed by way of unpaid water rates at the time of trial. The Wife asserts these should be treated as joint liabilities, notwithstanding she has had sole occupation of the former matrimonial home since March 2015.
The Husband says the bulk of arrears accumulated after he stopped paying the outgoings upon him vacating the former matrimonial home in March 2015.
In February 2014, when the Husband first vacated the former matrimonial home the amount owing on the water rates was $4,098. When the Husband returned to the former matrimonial home in December 2014, the amount owing was $6,601. By March 2015 when he vacated the former matrimonial home for the final time, the amount owing was $7,433.
Since the Wife has been in sole occupation, the water arrears have increased to $15,250 for the water rates. I have no evidence as to what the council rates were when the Husband finally vacated the former matrimonial home in March 2015.
The Wife said she had attempted to negotiate payment of those charges, but the Council and P Water were unable to assist her as the property is registered in the Husband’s name. It appears to me implausible that either entity refused to speak with her about making payments.
Superannuation
The Husband has superannuation entitlements of approximately $28,000.
The Wife did have $3,700 but withdrew those funds to meet legal fees she incurred in relation to the WorkCover claim. She now has no superannuation.
The Husband seeks that sum be notionally added back into the pool as the Wife used those funds for legal fees.
The Wife’s allegations of non-disclosure
Pursuant to the Federal Circuit Court Rules 2001 (Cth) (“the Rules”), both parties are required to make full and frank disclosure of their financial circumstances. It is part of the Wife’s case that the Husband has failed to meet those obligations under the Rules. In particular, she complains that he has provided almost no documentation regarding E Pty Ltd, including no provision of business records, bank statements, profit and loss statements, and the like. She has made multiple requests for the production of those documents.
The Full Court of the Family Court said in Weir & Weir (1992) FLC 92-338, said:-
…once it has been established that there has been a deliberate non-disclosure…the court should not be unduly cautious about making findings in favour of the innocent party…
The case law makes it clear that in the event of one party deliberately failing to meet their obligations of disclosure, the Court may then draw adverse inferences against that party, “if there is material upon which the inferences can be based”, as observed by the majority of the Full Court in Stein and Stein [1986] FamCA 27.
Firstly then, I must consider whether the Husband has deliberately failed to meet his obligations in relation to disclosure. If so, I can take a robust approach and draw such adverse inferences from that non-disclosure as can be supported by the evidence before me.
The Wife says that she has on many occasions sought the production of the Husband’s tax returns and bank statements, as well as those of E Pty Ltd. She says the Husband has not provided the bulk of the requested material. In addition, on 13 October 2016 the Wife subpoenaed E Pty Ltd to produce documents, which she asserts has not been complied with. The Wife also subpoenaed Westpac, National Australia Bank (“NAB”), Commonwealth Bank of Australia and BB Bank directly on that date.
The Husband denies hiding money, assets or documents. He says he has made full and frank disclosure to the best of his ability. He has not produced tax returns, bank statements, profit and loss statements and the like. His explanation for that includes that:-
a)many of the documents sought to be produced are not in his power, possession or control. For instance, the Wife has sought production of documents dating back in excess of 7 years. He said he was told banks did not retain records dating back that far;
b)many of the documents sought do not exist, and were never created. He says he never completed tax returns for the business, nor personal tax returns, as the business never really operated properly. His said he kept Centrelink apprised with respect to the business, and that at all times he remained in receipt of his Disability Support Pension; and
c)he said such documents that he did have were left by him at the former matrimonial home when he vacated in March 2015. He says at that time, he took almost no belongings at all from the former matrimonial home, as he was required to leave immediately when the Wife obtained an Intervention Order.
Findings as to disclosure
In relation to the production of bank statements, the Husband’s oral evidence was that he gave the Wife all the documents he could. He said he provided her with the bank account statements he was able to access, as well as the home loan statements and his Westpac account statements. He was not challenged on this point.
I accept that some of the documents sought to be produced would no longer be in existence. I accept that many of the Husband’s financial documents were left at the former matrimonial home, given the circumstances in which the Husband left. He was not challenged about his evidence in this regard.
I also accept his evidence that the business generated only limited income and for only a short period of time. The Husband made a genuine attempt in running the business. It was unfortunately not successful. I also accept the Husband’s evidence that he did not complete company returns, although he should have done so. The Husband is not obliged to produce documents that do not exist.
The Husband should have provided the documents in relation to his Family Trust, and could have obtained a copy of those relevant documents from his nephew. However, although that entity may have been established, it has never operated. There was no evidence from which I could draw any inference that there are, or ever were, assets or income available through that trust.
The Husband also should have provided information regarding the motor vehicles. It is unhelpful that there is no evidence before me in this regard. I note, however, that they are both old and unregistered vehicles. I do not anticipate either are of significant value.
Findings in relation to the parties’ disputed assets and liabilities
In the event I was satisfied that the Husband had deliberately not complied with his obligations as to disclosure, I would be able to draw such adverse inferences as could be supported by the evidence before me. In my view, there is little evidence that the Husband has access to funds outside the Disability Support Pension, and there is little evidence that could support an inference being drawn that E Pty Ltd was ever profitable or owned plant and equipment.
The Husband lives with his sister. He does not own any other property.
Beyond buying used and damaged cars at auctions, and having some dental work done in 2013, there was nothing in the Husband’s lifestyle to which the Wife could point in support of her allegations that he earned or had access to substantial sums. In relation to what was alleged by the Wife:-
a)the dental work he had completed almost six years ago totalled $13,800. I accept his evidence that this was paid off over time and that his sister assisted him in making those payments. That was supported by evidence of an $800 payment being made in January 2014; and
b)I accept the Husband’s evidence that the used cars he buys and repairs are not for profit but are a hobby. The two vehicles the Husband owns are old vehicles. I also accept his evidence that he assisted his friends to choose and purchase cars at auction, for which they pay for.
There were very few bank statements before me at the Final Hearing. The E Pty Ltd statements exhibited to the Wife’s affidavit filed on 7 May 2019 covered the periods:-
a)21 September 2013 to 20 December 2013;
b)21 December 2013 to 21 March 2014; and
c)22 March 2014 to 14 May 2014.
There are very few transactions on each of those statements. There is a deposit of $3,000 on 4 October 2013 and a deposit of $1,110 on 15 January 2014.
The Wife also subpoenaed the banks directly for the Husband’s and the business’ bank statements. The Husband was not cross-examined in relation to any additional statements. I am confident that Counsel for the Wife would have raised any transactions in any other statement that would have supported the Wife’s assertion that the Husband earned income or lived a lifestyle inconsistent with a person in receipt of a pension.
In relation to the rent payable for the factory supporting an inference that the Husband had or has access to funds, I reject that position. The Wife’s own evidence was to the effect that Mr H was not pursuing the unpaid rent as he did not believe it was recoverable. There was no evidence put before me to confirm how much rent was ever actually paid. The bank statements that were tendered before me do not show any rental monies being paid. The Wife says that is because E Pty Ltd was a “cash” business. Mr H had filed an affidavit earlier in these proceedings. That was not relied upon by the Wife and Mr H was not called to give evidence. I draw from that an inference that Mr H’s evidence would not have assisted the Wife.
In relation to the Wife’s assertion that the Husband has plant and equipment he has not disclosed, there is little upon which that assertion is based beyond suspicion and speculation. I accept the Husband’s evidence that E Pty Ltd did not own significant plant and equipment, and that he currently has modest tools. I also note that C Pty Ltd did not pursue recovery against E Pty Ltd, notwithstanding E Pty Ltd is named as a defendant in those proceedings. That is consistent with C Pty Ltd forming a view that there was little to be gained from pursuing the debt against E Pty Ltd.
I am not satisfied that E Pty Ltd has any value, nor that the Husband has hidden monies. I do not draw the inferences that Counsel for the Wife urged me to do.
On the basis of the evidence before me, I find the parties’ assets, liabilities and financial resources are, exclusive of superannuation:-
ASSETS
VALUE
The former matrimonial home at Street A, Suburb B (in Husband’s sole name)
$775,000
Husband’s Motor Vehicle K motor vehicle
$5,000
Husband’s 2000 Motor Vehicle L
$minimal
Husband’s 2002 Motor Vehicle M
$minimal
Husband’s Superannuation
$28,000
E Pty Ltd
$Nil
Chattels in the Husband’s home
$1,000
Husband’s tools
$1,000
Chattels in the Wife’s home
$2,000
LIABILITIES
VALUE
Mortgage encumbering the former matrimonial home at Street A, Suburb B
$186,000
Judgment debt including incidentals
$38,958.95
Outstanding council rates
$14,434
Outstanding water rates
$15,250
Wife’s legal fees
$13,000
Leaving aside the former matrimonial home, the mortgage and rates and the C Pty Ltd judgment debt, the Husband therefore has chattels of $7,000 and the Wife has chattels of $2,000. I note the Wife will retain sole responsibility for her legal fees.
Is it just and equitable to make an order?
In these proceedings, both of the parties urge the Court that it is just and equitable that orders be made to alter their interests in their property. It is not sufficient that the parties simply agree that there should be an order made pursuant to section 79 of the Act. I must be satisfied myself that such orders are appropriate.
The High Court in Stanford made it clear that I cannot conflate my determination pursuant to section 79(2) of the Act with my determination pursuant to section 79(4) of the Act. These are separate enquiries and I must not start with an assumption that one party or the other has the right to have the property divided between them.
The former matrimonial home is registered solely in the Husband’s name. The parties are no longer living together in that property and their relationship has come to an end. It is clear that both parties contributed to that property over the course of a lengthy marriage which produced four children, notwithstanding that the property is only registered in the Husband’s name. If no orders were made, the Husband would retain almost the entire asset pool of the parties. The Wife would be left without any funds to house herself and the children and without any superannuation to assist her later in life.
In my view, this is one of the “vast majority of cases” referred to by the plurality in Stanford, in which the requirements of section 79(2) of the Act are fairly readily satisfied. It is plainly just and equitable to make an order pursuant to section 79 of the Act in these proceedings.
Accordingly, I now turn to the considerations in section 79(4) of the Act to determine what orders I should therefore make.
Section 79(4) of the Act
Neither party suggested I adopt an asset-by-asset approach in considering the question of contributions, save that the Wife asserted the Husband’s debt to C Pty Ltd should be shouldered entirely by him. I therefore take a global approach in assessing the parties’ respective contributions, and I take them into account in an overall sense. I note the authorities set out that a broad approach, rather than a precise arithmetical approach, is preferred.
The legislation requires that I take into account financial and non-financial, direct or indirect contributions, made by or on behalf of the parties to the acquisition, conservation or improvement of any of the property. I must also take into account the contributions they each made to the welfare of the family as homemaker or parent. Contributions of this type must be given appropriate weight, and are no less valuable than financial contributions. I must also take into account the parties’ respective future needs. I am also permitted to take into account any other fact or circumstances which I consider that the justice of the case requires that I consider.
Initial contributions
At the commencement of the relationship, the Wife asserts the deposit of $16,425 for the acquisition of the former matrimonial home came substantially from monies invested on behalf of the parties’ two children at that time, with the “balance” from the Wife’s parents. The Wife does not depose to any particular figure that was allegedly advance by her parents. She does not produce any documents or anything from her family to support that assertion.
The Husband asserts that he contributed $20,000 when the parties purchased the former matrimonial home. He has similarly not produced any evidence to support that assertion.
The parties had been living together for six years prior to the purchase of the former matrimonial home. There is no evidence that either party had savings that pre-dated the relationship. There is no corroborative evidence that the Wife’s family advanced any monies on her behalf in 2001. There is no evidence that any monies invested on behalf of the parties’ children came other than from the parties themselves.
I do not find that either party made a greater contribution than the other at the commencement of their cohabitation.
Contributions during the marriage
The Wife asserts that when she was working, she applied the whole of her income to the family’s living costs. The Husband says his income too was applied to the household. I accept the evidence of both parties in this respect.
The Husband deposes that the former matrimonial home was previously a public housing property, which was severely damaged and required substantial work. He deposes that in 2005 the parties redrew a further $50,000 to extend the former matrimonial home by a further 50 square metres.
The Wife asserts, somewhat vaguely, that the Husband extended the mortgage “on several occasions” on the basis that the parties were going to renovate the former matrimonial home. However, she says “I do not believe that all monies were utilised for the purposes of the limited renovations that he undertook at the property”. I have been provided with very little particulars. The Wife has not deposed as to when the mortgage was allegedly extended, or the quantum of the extension/s. She has not deposed as to what renovations were actually undertaken. She has not deposed to any facts or circumstances that form the basis for her assertion that not all monies loaned were applied to those renovations. The Wife does not depose as to what she believes the Husband did with those funds if they were not applied to the renovations. There is no real basis articulated for her belief, and accordingly I put no weight on that assertion.
The Wife’s position in her material was that the Husband did not assist around the house or with the care of the children. She deposed that the Husband expected her to complete all of those duties. Under cross-examination however, the Wife conceded the Husband had attended to housework and parenting duties at least when she was unwell in 2007. She made this concession only after it was put to her that this had been her evidence to the County Court as party of the WorkCover claim. She also conceded that during the course of the WorkCover claim she had described the Husband as being supportive, on occasions.
The Husband acknowledges that the Wife was the primary carer for the children, but says he played an important role in caring for them and was an engaged and involved parent. He also conceded that prior to his injury he was employed in two jobs, and accordingly provided limited assistance in relation to homemaker and parent contributions at that time.
Contributions by the Wife’s family during the marriage
The Wife says that when she was not earning an income, her family “assisted her with some payment”. She does not provide any information as to dates when funds were provided, how often this occurred, the alleged quantum of such funds prior to November 2013 or the specific circumstances in which the monies were advanced. The Wife did not call any evidence from her brother or her father to corroborate her assertions. I do not accept the Wife’s evidence in this regard.
The Wife also asserts at an unspecified time her brother Mr CC supplied and installed a kitchen in the former matrimonial home and the agreement was the Husband would pay for materials and labour. She says the Husband did not make any payments, and Mr CC then gifted the kitchen for the benefit of her and the children.
The Husband agrees that Mr CC installed the kitchen. He says the parties paid for the materials and the Husband assisted Mr CC by working for him on approximately 10 to 15 occasions in his business. In addition, the Husband said he assisted Mr CC in his own renovations. The Husband was not challenged in relation to this evidence.
The Wife did not call evidence from her brother regarding the Husband’s assertions that the materials were paid for, and that the Husband had assisted Mr CC in his business. She did concede in her oral evidence that the Husband assisted her brother in his business. I prefer the Husband’s evidence over the Wife’s in relation to this issue.
The Wife also asserts that towards the end of 2012, the Husband told her he would take over the mortgage repayments. She says despite him assuring her he would do so, he did not. Indeed the Wife’s evidence was that the Husband was plotting against her, and deliberately let the mortgage fall into arrears, so that she would be left without a home.
The NAB issued a mortgage default notice on 22 August, 2013. The Wife says she contacted the NAB, and made arrangements for payments to be made with the assistance of her brother Mr CC and her father. On 18 November 2013 the Wife says her brother provided her with the sum of $17,951.75 which was used to pay the mortgage arrears. It is apparent from the mortgage statement exhibited to her affidavit filed on 7 May 2019 that those monies were paid that day.
The Husband denies he stopped contributing to the mortgage in 2013. He says he was “almost solely responsible” for the mortgage payments and other outgoings until he left the former matrimonial home in March 2015. He does not depose at all as to how the mortgage came to fall into arrears in 2013.
The Husband said he was unsure whether the Wife’s family provided funds in 2013. However, lump sum payments were clearly made. There was no suggestion by the Husband that he sourced the funds or generated the monies to make those lump sum payments.
I accept the Wife’s evidence that the mortgage fell into arrears, and she arranged for her family to pay $17,951 to pay those arrears. I do not however accept that this was a deliberate plot by the Husband to leave the Wife homeless. He too was living in the former matrimonial home at that time. I note that by September 2013, E Pty Ltd was deregistered. The parties were obviously in significant financial difficulties at this time.
Contributions post-separation
Following the Husband leaving the former matrimonial home in 2015, the Wife remained living there and commenced making payments on the mortgage.
The Wife’s evidence is that since the end of the marriage, she has been wholly responsible for the care of the children and for their financial support. It is however common ground that the Husband has at all times paid child support as assessed, albeit that this amount is very modest. The Wife also conceded that the children had spent some time with the Husband after he left the former matrimonial home, but she was unable to particularise how much time. Her evidence was that there had been no overnight time, to her knowledge, between the Husband and the children X and Y in the last few months.
The Husband acknowledges that the Wife has continued to be the primary carer for the children post-separation. However, he asserts that he has continued to be actively involved in their care and said he sees the twins at least weekly.
The Husband pays child support as assessed. As he is in receipt of the Disability Support Pension the assessed amount is just $7.82 per week, per child.
Accordingly, whilst the Husband pays as he has been assessed to pay, the overwhelming burden of providing financially for the children falls on the Wife.
Contributions by the Wife’s family post-separation
The Wife asserts she paid the mortgage, utilities, insurances, and general maintenance expenses for the former matrimonial home from 2013 onward. The Husband asserts that he continued to provide funds until he finally left the former matrimonial home on 24 March 2015.
The Husband did not produce any bank statements or documents to support his assertions that he continued to make payments towards the household and the mortgage until March 2015. I note that the water rates began accumulating from December 2012. By the time the Husband finally left the former matrimonial home on 24 March 2015, the arrears were at $7,433. This does not support the Husband’s evidence that he continued to make payments towards the household bills. Similarly, the council rates were not being paid.
Subsequent to the Husband vacating the former matrimonial home for the final time on 24 March 2015, the Wife deposes that her family gifted her a further $16,200 between 2 April 2015 and 27 November 2015. She said this was done by making 18 payments towards the mortgage of $900 per fortnight which is reflected in the mortgage statements. I accept the Wife’s evidence in this regard.
On 22 March 2017, orders were made by consent for the parties to reduce the mortgage repayments from $900 per fortnight to $1,050 per month. I understand the Wife has continued to ensure that those payments are made.
Monies the Wife has accessed post-separation
The Wife withdrew a total of $5,769 from the mortgage in 2016. She withdrew $3,000 on 29 August 2016, $1,869 on 3 October 2016 and a further $900 on 17 October 2016. The Wife acknowledged she withdrew these funds and said she used them for her legal fees.
The Wife has also had access to her superannuation of $3,700 and the further sum of $9,204, being the insurance payout for the Wife’s Motor Vehicle AA following her car accident. She said she used her superannuation to fund the WorkCover claim. She said she used the Motor Vehicle AA monies to pay bills, her lawyers and to repay an undisclosed amount to her father.
Accordingly, the Wife has had the post-separation benefit of $18,673, together with the significant benefit of living in the former matrimonial home.
The C Pty Ltd judgment debt
It is the Wife’s case that the Husband should bear the entire responsibility for the C Pty Ltd judgment debt and additional costs arising from the caveat. She asserts she was not aware of the liability at the time. Counsel for the Wife said that additionally, the Husband has not taken steps to mitigate that liability, for instance, by selling the products or attempting to negotiate a reduced debt.
The Husband says the product is not able to be sold to another purchaser as it was prefabricated for a specific client.
In Biltoft and Biltof [1995] FamCA 45 the Full Court said at paragraph 52 in relation to liabilities:-
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.
Their Honours observed that there is no strictly mathematical or accountancy approach to be adopted uniformly in all cases. Their Honours said that, for instance, in some cases the Court may determine that the circumstances in which the liability was incurred requires in justice and equity that it be wholly or partly disregarded when determining what order should be made pursuant to section 79 of the Act. Their Honours said such circumstances could include where a party has incurred a liability recklessly.
Their Honours then referred to cases including Kowaliw and Kowaliw [1980] FamCA 48 and Antmann and Antmann [1980] FamCA 64, and continued:
Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect “contribute” to the liability by having that spouse's fair share in the parties' property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under sec. 79. …
In the case of Watson & Ling [2013] FamCA 57, Murphy J said similarly that in some cases, where there is clear evidence that the conduct of one party has significantly reduced the legal and equitable interests of a party or the parties, then justice and equity may require the orders to recognise that.
I do not accept the circumstances surrounding the judgment debt are such that the Husband should be left with the burden of paying it. The liability was substantially incurred during the time the marriage was intact. There is no evidence the Husband behaved recklessly or wantonly in incurring that liability. I accept he was using his best endeavours to start a business, which he hoped and intended would be profitable, for the benefit of the parties and their children. Unfortunately for the family it was not. If the business had increased in value, the Wife would be entitled to her share of the fruits of that endeavour. Similarly, the fact that the business was not successful should also be borne by them both. In the circumstances, my view is that the interests of justice and equity do not require that the Husband alone bear that liability. I find there are no circumstances that would support the liability being other than shared equally.
Relevant section 79(4)(e) considerations
The Husband is 56 years of age. The Wife is 50.
Both of the parties are in receipt of a Disability Support Pension. The Wife’s income is higher than the Husband’s partially because she has the benefit of a modest income protection payment, and partially because she receives additional benefits as the carer for two of the parties’ children.
The Husband pays the Wife $17 per week in child support.
It is common ground that the Wife is not able to engage in employment for the foreseeable future.
The Wife says there is no evidence that the Husband cannot work. The Husband did not provide independent medical evidence as to his current state of health. However, he is in receipt of a Disability Support Pension. In order to be eligible for that pension, certain criteria must be met, including that he has a diagnosed and permanent disability or medical condition that impacts his capacity to work. I accept that he is also unable to engage in employment in the foreseeable future.
As already noted, the Wife has the primary care of the parties’ 17 year old twins. Given the Husband’s income, the amount he is assessed to pay by way of child support is very modest. In the circumstances, the Wife bears the majority of the costs of the support of the children. They will soon be 18 years of age.
C Pty Ltd is a creditor of the Husband. The orders I propose to make will enable that debt to be recovered.
In terms of any effect on the earning capacity of a party, the Wife ceased working following an incident of workplace bullying. She says she has been unable to return to work in any meaningful way since that time.
Family violence
Part of the Wife’s case is that she was subjected to significant family violence by the Husband during the relationship and post-separation, which made her ability to make contributions more arduous.
The Husband denies all the allegations of violence, abuse and control in their entirety. The only matter he admits is in relation to him attending the former matrimonial home in 2016 in breach of an Intervention Order to help the parties’ son jump start his car.
I have carefully considered the Wife’s evidence regarding family violence, which is as follows:-
a)the Wife deposes generally that she was “exposed to serious family violence including physical assaults, abusive language, derogatory slurs, serious psychological abuse, physical assaults and threats of death”. She says she was yelled at, belittled, spat at and on by the Husband, threatened and intimidated by him, and subjected to physical assaults including being punched with a closed fist in her face and locked out of the house;
b)the Wife says that after the Husband suffered his work place injury, he went through a period of depression, and became irritable, aggressive and threatening;
c)she says in 2012 he would call her crazy after she was diagnosed with depression, belittled her, was not supportive of her and threatened to have her committed;
d)she says in 2013 he “became more abusive”, told her she should be hospitalised and tried to scare her that he would have her committed;
e)she says in 2013 he shouted and “abused” her and spat at her after she came home from lunch with a female friend. She said this occurred in front of the children;
f)she says in 2013 he punched her in face and head several times when she confronted him about being unfaithful to her. She reported this to the police who assisted her to obtain the first Intervention Order. She said Y was present during that assault;
g)she says in March 2015 he “came around” to the former matrimonial home. When he asked her to withdraw the Intervention Order and she refused, he “abused” her in front of the children and then slapped her face;
h)she says the Husband breached the Intervention Order in 2016 by coming inside the former matrimonial home. In her oral evidence she said she saw him in the house, as did Y. She said the police were called and spoke with Y who confirmed the Husband had been inside the house. The Husband was not charged with breaching the Intervention Order;
i)she says “towards the end of the relationship” the Husband made continuous threats to have her killed or “disappeared”;
j)she says he made threats that people dressed as paramedics would pick her up in an ambulance, inject a needle in her leg and she would never be seen again; and
k)she says he has continued to breach the Intervention Order by regularly driving past the house “over the years”, which scares and intimidates her.
The Wife says that some of the incidents occurred in the presence of the children, and that at times Ms W had to intervene and physically restrain the Husband to prevent him from hurting the Wife.
In addition, the Wife asserts the Husband has subjected her to ongoing financial abuse. She says:-
a)the Husband did not discuss finances with her during the marriage, that he hid his wallet from her, and that he did not advise her as to his income;
b)the Husband would tell her he did not have any money when she asked for some, and only occasionally he gave her “some cash”;
c)she had to put her money towards the family expenses and he only rarely gave her money towards household expenses;
d)the Husband told her she could not go on title when they purchased the former matrimonial home; and
e)the Husband told her he would take over the mortgage payments towards the end of 2012, but he did not do so, and the bank issued a mortgage default notice.
The Wife asserts she was awarded financial assistance through the Victims of Crime Assistance Tribunal in recognition of her experience as a victim of violent crime and to promote her recovery from that. The Wife says in her affidavit it was a “recent” grant and it was for counselling to help her “cope with the long history of family violence”. The date of the letter she annexed to her affidavit filed on 7 May 2019 is unclear. I do not know any other details about the grant nor what incident or incidents the grant was in relation to.
I note there is an extensive history of Intervention Order proceedings. The parties’ evidence was unhelpful in understanding the chronology of events. I was provided with an aide-memoir during closing submissions, after Counsel had perused the police records, that sets out the history of the Intervention Orders and charges as follows:-
a)the first application was made by the Wife on 15 January 2013. That was a “limited” Intervention Order and did not require the Husband to vacate the former matrimonial home. The police records state that photographs were taken but there were no signs of injury. The Husband was not charged in relation to the assault the Wife alleges occurred on that day;
b)that application was finalised by consent and without admission on 16 January 2013, with a limited order being made for 12 months to expire on 15 January 2014;
c)the Wife then sought to extend that Intervention Order on 13 January 2014. That application was granted ex parte on an interim basis until 6 March 2014. In the application, the grounds are set out as being that the Husband continued to occasionally verbally abuse and swear at the Wife;
d)on 10 February 2014, the police obtained a variation to the Intervention Order on behalf of the Wife. A “full” Intervention Order was made that day, excluding the Husband from the former matrimonial home. The Husband left the former matrimonial home at that time;
e)on 3 March 2014, the interim Intervention Order was extended, not by consent. The matter was adjourned to 26 June 2014;
f)on 26 June 2014 the Husband consented to a final Intervention Order for 12 months without admission;
g)on 24 December 2014, an application was made and granted on an ex parte basis to vary the Intervention Order, enabling the Husband to return to the former matrimonial home. This was following the Husband being involved in a car accident. The matter was adjourned to 15 January 2015;
h)on 15 January 2015, the application to vary the Intervention Order was again extended by consent. The matter was adjourned to 24 March 2015 for mention;
i)on 24 March 2015, an ex parte Intervention Order was granted, which excluded the Husband from the former matrimonial home. The matter was adjourned to 16 June 2015. The Husband was charged with breach of the Intervention Order and with assault in which it was asserted he had slapped the Wife. Those charges were dealt with on 30 August 2016 as set out below. That complaint was not tendered in these proceedings;
j)on 16 June 2015 the Husband was not present at Court. An Intervention Order was made for two years, to expire on 15 June 2017;
k)on 30 August 2016, the Magistrates’ Court of Victoria (“the Magistrates’ Court”) dealt with the criminal charges against the Husband in relation to breaching the Intervention Order and the assault charge arising out of the incident in March 2015. The Husband was found not guilty in relation to both charges. A costs order was made in the Husband’s favour against the police of $1,650. During the Wife’s evidence before me, she said the parties’ two older children gave evidence in favour of the Husband at that hearing. That is, they did not support her evidence that the Husband had assaulted her. The Wife said the children were coached to give evidence against her at that hearing. She also said the children told the Court things that were not true, and that the Husband’s barrister assaulted her and made the children testify against her;
l)on 21 November 2016, the Wife sought to vary the Intervention Order to include the children X and Y as protected persons. It appears that application was not successful;
m)on 15 June 2017, there was a further application to extend the Intervention Order. That was granted, not by consent, and the matter adjourned to 12 September 2017. I have no evidence as to what caused the Wife to seek that extension;
n)on 12 September 2017, a final Intervention Order was made for a further 12 months, with an exception that enabled the Husband to attend at the former matrimonial home for Mr V’s birthday that year;
o)on 18 January 2018, there was a further hearing in relation to a charge of breaching the Intervention Order. That breach was in relation to the Husband attending at the former matrimonial home in 2016. He pleaded guilty to having breached the Intervention Order. The particulars were that he stepped on to the driveway of the property to help the parties’ son jump-start his car. The Husband was fined $200 without conviction. No finding was made that he had entered the former matrimonial home;
p)on 10 September 2018, the Wife obtained a further extension of the Intervention Order. The matter was adjourned to 29 October 2018. I have no evidence as to what caused the Wife to seek that extension; and
q)on 20 October 2018, a final Intervention Order was made in the Husband’s absence, to last until 2020.
The case law makes it clear that I must be firstly satisfied that the Husband engaged in a course of violent conduct, and secondly, that the violence had an impact on the Wife’s capacity to contribute; Kennon & Kennon [1997] FamCA 27 and Keating & Keating [2019] FamCAFC 46. As already set out, when serious allegations are made, the Court should be cautious about relying on inexact proofs, indirect references and indefinite testimony.
It is clear from reading the Wife’s material that many of the allegations are not particularised and lack detail and specificity. I do not, for instance, know what the “derogatory comments” she says he made were, or what much of the “verbal abuse” or “threats” comprised. These are conclusions, and not evidence of actual events. In relation to many of the allegations, the Wife does not even give rough dates, the frequency of the alleged abuse or what actually occurred. The failure to provide the Court with the actual content of those alleged threats, abuse or behaviour makes it difficult to assess that evidence.
The Wife does give particulars and a rough time frame for some specific events, the earliest of which is in 2012. She says at that time, the Husband called her crazy and said she could not cope. I do not know how often he is alleged to have said that or how frequently.
The only time frame pre-dating that allegation is the assertion that following the Husband’s injury in about 2006 he went through a period of depression, when he was “difficult to interact with”, would “snap” and could be “very aggressive and threatening”. I do not know what behaviour she is describing by saying he could be “very aggressive and threatening”.
There are three specific physical assaults to which she deposes, that:-
a)he spat at her in 2013;
b)he punched her in the head in January 2013; and
c)he slapped her in the face in March 2015.
In relation to the allegation that he punched her in 2013, the police records note there were no injuries observed, and no charges were laid. In the first affidavit filed by the Wife on 4 January 2016, the Wife makes no specific reference to the Husband allegedly punching her. This earlier material is inconsistent with the Wife’s trial affidavit filed on 7 May 2019, in which she says the Husband allegedly punched her. The Wife was unable to explain why that specific allegation was not made in her earlier material. This is a significant omission.
The Wife allowed the Husband to return to the former matrimonial home in December 2014 and attended at the Magistrates’ Court to vary the Intervention Order to enable him to do so. Her evidence was that the children wanted her to let him recover at home following his car accident and she agreed he could do so. It is difficult to see why she would allow him to return to the house, given her allegation that he had made her fear for her life. There was no suggestion by the Wife that she was under any compulsion to allow him to return or under any pressure to vary the Intervention Order to enable him to do so.
The Wife’s evidence in relation to the alleged assault, and breach of the Intervention Order, in March 2015 was that the Husband “came around” to the house that day. It is clear from the evidence that the Husband was living in the property at that time. Accordingly, the Wife’s reference to him “coming around” to the house is curious. The Wife also said that assault occurred in the presence of the children. They were not called to give evidence in support of the Wife, and indeed, their sons gave evidence that did not support her version when the matter was before the Magistrates’ Court. The Husband was found not guilty of that assault, and not guilty of breaching the Intervention Order, although I note that the Magistrates’ Court applies a different standard of proof than the applicable standard in this Court.
The Husband did plead guilty in relation to attending the former matrimonial home on one occasion in breach of the Intervention Order. He assisted the parties’ son to jump start his car. He did not approach the Wife, and he is not alleged to have said or done anything to her. He otherwise denied her allegations that he drives past her house repeatedly. Save as set out in these reasons, the Husband has not been charged with, nor found guilty of any other breaches.
There was no contemporaneous medical evidence advanced to support the Wife’s allegations of assault in any meaningful way. At its highest, the report of Dr Q that was tendered sets out that the Wife reported unparticularised “abuse” to her general practitioner at an appointment in 2005, one in 2006 and one in 2013. The Wife did not subpoena her medical records.
There was some evidence and cross-examination about the genesis of the Wife’s mental health issues. In the Wife’s trial affidavit filed on 7 May 2019, she deposes that the abuse she was subjected to was the “primary cause of her psychiatric illness”. At a later part in her affidavit, the Wife asserts that she “either developed a psychiatric illness or an existing psychiatric illness was exacerbated” due to the workplace bullying she suffered in 2007 and the family violence perpetrated upon her.
During the WorkCover claim in the County Court, the Wife relied on expert evidence by a Dr Q and by a Dr R, who both assessed her psychiatric issues as being entirely or predominantly caused by her workplace experiences. According to the information provided to Dr Q, the Wife had historically described her Husband as supportive, although she had reported some incidents of unspecified “abuse”. Whilst I do not rely on Dr Q’s report as being accurate in terms of its conclusions, and I understand the County Court did not accept that evidence, it is notable that the Wife ran a case in another court in which she relied on a very different version of history. I also note that when cross-examined about this inconsistency, the Wife said her solicitors wrote her affidavit.
Counsel for the Wife submitted that in relation to Dr J’s comment that the “workplace and marital situations are important factors in the origin of her symptoms”, the psychiatrist was referring to the Husband’s violence as alleged by the Wife. The phrase “marital situations” is vague, and I am unable to agree with Counsel for the Wife’s interpretation of the meaning of it. Had Dr J meant the Husband’s violence, it would be reasonable to expect him to articulate that accurately. He may have been referring to general marital unhappiness. Dr J was not called to give evidence to clarify what he was referring to.
I accept that there was some shouting on occasion by the Husband. He conceded that on occasion there were raised voices. I also accept that the parties would have had disagreements from time to time. However, having carefully examined all the evidence before me and having had the opportunity to see both parties give evidence and be cross-examined, I do not accept the Wife’s evidence that the Husband subjected her to a course of violent conduct, including physical and verbal abuse, threats or financial control. Accordingly, I do not need to consider what impact it had on the Wife’s capacity to contribute.
Assessment of contributions and prospective needs
Having determined it is just and equitable that an order adjusting the parties’ entitlements be made, I must now carefully assess and weigh all the contributions and prospective needs of the parties, to make an order that I consider appropriate to do what is just and equitable in the circumstances of this particular case. This is an holistic task, not a strictly mathematical one.
I am satisfied that notwithstanding the significant issues they each faced with their health, the parties both contributed to the best of their abilities during the relationship.
For the reasons already set out, I am not satisfied that the Husband subjected the Wife to family violence that impacted upon her capacity to contribute. Further, I am not satisfied that he has hidden assets or financial resources.
I am satisfied that the Wife’s family provided financial assistance in 2013 by paying the arrears of mortgage at that time. Additionally, post-separation, the Wife has made greater contributions by way of homemaker and parent. The Wife has also continued to make contributions towards the mortgage encumbering the former matrimonial home, with funds at times from her family. Of course, she has also had the benefit of housing herself in that home, to the exclusion of the Husband, which I also factor in to my consideration.
I also take into consideration the funds withdrawn by the Wife from the mortgage in 2016 which she said she used for legal fees. Similarly, I note the Wife did not pay water rates during her period of exclusive occupation, and these, along with the council rates, have continued to accumulate. By paying these from the proceeds of the sale of the former matrimonial home, the Husband is sharing in those liabilities, notwithstanding they are partially attributable to a period of time in which the Wife was in exclusive occupation of the former matrimonial home. The Wife also had the sole benefit of the insurance payout following her motor vehicle accident in the sum of $9,204, as well as the use of her $3,700 superannuation entitlements to fund the WorkCover claim. I am not adding these amounts back into the pool, but I take them into account as a relevant fact in assessing the parties’ overall contributions.
I also note the Husband did not provide evidence regarding the motor vehicles. Whilst these are likely to be of modest value, I still take this into account.
I assess the parties’ contributions to the current non-superannuation pool to be 55% to the Wife and 45% to the Husband.
The Wife has the benefit of a modest income protection payment. The parties otherwise have limited incomes. I do not accept that the Husband has the ability to earn a significant income. Neither party appears likely to recommence employment at this stage of their lives. Both parties have health issues that affect their capacity to work.
The Wife continues to be the primary carer for the parties’ 17 year old twins. She bears the vast majority of their expenses, receiving very modest child support from the Husband.
The Husband concedes the section 75(2) factors do favour the Wife. He asserts overall there should be an adjustment in favour of the Wife such that she receives assets totalling 60% of the pool, and he receives 40%.
Upon weighing all the factors, I am satisfied that a further 5% adjustment in the Wife’s favour is appropriate.
Accordingly, the non-superannuation assets of the parties will be divided 60% to the Wife and 40% to the Husband.
Superannuation
It was the Wife’s proposal that the Husband would retain his superannuation entitlements and there be no splitting order in her favour. That was opposed by the Husband who sought a splitting order. The Husband sought that the pool include a $3,700 notional add back on the basis that the Wife had already had the benefit of her superannuation to fund her ultimately unsuccessful WorkCover claim. I do not notionally add back into the pool the superannuation withdrawn and used by the Wife, however, I have taken that into account when assessing the parties’ contributions.
In relation to superannuation, given my findings as to the parties’ contributions and needs, it is appropriate there be an order that divides the parties’ current superannuation entitlements equally. Neither party is likely to be able to contribute more to their superannuation in the foreseeable future.
For all of the foregoing reasons, I make the orders as are set out.
I certify that the preceding two hundred and four (204) paragraphs are a true copy of the reasons for judgment of Judge Carter
Date: 6 December 2019
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Costs
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Jurisdiction
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Statutory Construction
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