Kilkenny and Kilkenny and Ors

[2010] FamCA 238

FAMILY COURT OF AUSTRALIA

KILKENNY & KILKENNY AND ORS [2010] FamCA 238

FAMILY LAW – PROPERTY SETTLEMENT – Assets and Liabilities – Payment from third parties/claimed trust – Contributions – initial contributions – Adjustments – Just and equitable

Family Law Act 1975 (Cth) ss 75 & 79

TWN & PAQ [2005] FamCA 67, (2005) FLC 93-230; (2005) 34 Fam LR 190
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Omacini (2005) 33 Fam LR 134
Wilson v Paniani [1996] NZLR 378
Giumelli vGiumelli (1999) 1996 CLR 101
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Ferraro (1992) 16 Fam LR 1
In the Marriage of Shewring (1987) l2 Fam LR 139

APPLICANT: Ms Kilkenny

RESPONDENT: Mr Kilkenny

THIRD PARTIES: Mr and Mrs Howatt

FILE NUMBER: NCC 2489 Of 2008

DATE DELIVERED: 25 March 2010

PLACE DELIVERED: Sydney

JUDGMENT OF: Judicial Registrar Loughnan

PLACE HEARD:  Newcastle

HEARING DATE: 10, 11 & 12 February 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT WIFE:	Ms A. Rees SC
SOLICITOR FOR THE APPLICANT:	Mark Evans Solicitors

RESPONDENT HUSBAND IN PERSON

COUNSEL FOR THE THIRD PARTIES:	Mr P. Cummings
SOLICITOR FOR THE THIRD PARTIES:	Attwaters

Orders

1. The husband and wife shall forthwith sign all documents and do all things necessary to disburse the funds held on their behalf with the Newcastle Permanent Building Society as follows:

   (a)as to 57% to the wife; and

   (b)as to the balance to the husband

2. The husband and wife shall forthwith sign all documents and do all things necessary to authorise Mark Evans to disburse to the wife or at her direction all funds held in the trust account of that solicitor on behalf of the husband and wife.

3. The Court declared that the accounts in the names of C Kilkenny and L Kilkenny with the Newcastle Permanent Building Society contain the funds of C Kilkenny and L Kilkenny, respectively.

4. Otherwise the wife and husband are respectively entitled, to the exclusion of each other, to all property of whatsoever nature and kind in the possession or control of each of them as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank record thereof and superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the condition for payment of such entitlement and each of them is solely liable for and shall indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.

5. Otherwise the Amended Initiating Application of the wife filed 6 March 2009 and the husband’s Response to an Application for Final Orders filed 5 February 2010 are dismissed.

6. In the event that either the wife or husband refuses or neglects to comply with the provision of any order herein a Registrar of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.

7. All parties are at liberty to apply on seven days notice in the event of any difficulty arising out of the implementation and enforcement of these orders.

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

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC 2489 of 2008

MS KILKENNY

Applicant wife

And

MR KILKENNY

Respondent husband

And

MR AND MRS HOWATT

Third parties

REASONS FOR JUDGMENT

1. The cohabitation of Ms and Mr Kilkenny spanned about 9 years. They cannot agree on a settlement of their property. Although they are now divorced, for convenience I will refer to them as the wife and the husband. The husband has made a claim against the wife’s parents. As a result they are parties to the proceedings.

Applications

1. The wife seeks orders in terms of her Amended Initiating Application filed 6 March 2009 as follows:

   That the parties do all such acts and execute all such documents that are necessary to authorise Mark Evans Solicitor to disburse Monies held on behalf of the parties in the Mark Evans Solicitors Trust Account as follows:

   (i)       65% to the Wife

   (ii)      35% to the Husband

2. The husband seeks orders in terms of his Response to an Application For Final Orders filed 5 February 2010 as follows:

   FINANCIAL ORDERS

   Personalty

   B.1.That the Wife set out and particularise an inventories of all of the personal property of the parties as contained in or about the former matrimonial home as at 1 January 2008 in two lists of equal value marked respectively “A” and “B” and provide those two list to the Husband within 7days of the date hereof;

   B.2.That the Husband provide written notice to the Wife's Solicitor with a further 7 days of which list of personal property, either ‘A’ or “B” he chooses to receive and thereupon, within a further 7 days, the Wife shall deliver to the Husband all of the personal property contained within that list in good order and condition.

   B.3That in the event that the same has not been previously ordered, within 30 days of the date of the making of these orders the Third Party pay to the Wife’s solicitor for immediate deposit into the Controlled Monies Account opened in the names of the parties by the Wife’s Solicitor (the “[Kilkenny] Controlled Monies Account”) the sum of $140,000.00 or the amount of the [W Street] Market Value Increase Valuation; whichever is the greater amount.

   B.4That in the event that as at the date being 30 days of the date of the making of these Orders the amount of $140,000.00 or the amount of money equal to the [W Street] Market Value Increase Valuation whichever be the greater amount, has not been paid into the controlled monies account conducted in the name of the parties by the Wife’s legal representative (the “[Kilkenny] Controlled Monies Account”), then such amount be notionally added back into and form party of the assets of the parties available for division between them in these proceedings and be first credited to the Wife in whole or in part satisfaction of any share of the property of the parties to which she is determined to be entitled.

   The Credit Card Debt Discharge

   B.5.That if not previously ordered, the Wife be and is hereby declared solely responsible for the accumulation of so much of the amount required to be paid by the parties to discharge the Credit Card indebtedness in the Husband’s name to Lion Finance Pty Limited, Credit Corp Services Pty Limited and Accounts Control Management Services Pty Limited as shall exceed the sum of Ninety Three Thousand One Hundred and Sixty Nine Dollars ($93,169.00) and, in the event that the parties are obliged to pay an amount exceeding the such sum in order to discharge such debt, then such additional amount shall be notionally added back into the property of the parties and form part of the assets of the parties available for division between them in these proceedings and be first credited to the Wife in whole or in part satisfaction of any share of the property of the parties to which she is determined to be entitled.

   Property Division

   B.6.That the Husband be declared entitled to a Sixty Five Percent (65%) share of the properly of the marriage as herein determined and that the Wife be declared entitled to the balance thereof, subject always to the taking into account of the, notional property referred to previously in these Orders and the distribution of the Wife’s share of the properly of marriage being wholly or partly satisfied by the Wife being first credited with the value of the notional previously referred to in these Orders,

   B.7.Except as otherwise specified in these Orders each, party be solely entitled to the exclusion of the other to all property- and chattels of whatsoever nature and kind, including the contents of the home, in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the condition for payment of such entitlement and that 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 1.0 these Orders.

   B.8.That the parties and the Third Parties shall promptly sign all documents and do all things as may be necessary to give full force and effect to these orders.

   Procedural Orders

   B.9.That in the event that either party refuses or neglects to comply with the provision of any order herein a Registrar of the Court is hereby appointed pursuant to Section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.

   B.10.That either party have liberty to apply on seven days notice in the event of any difficulty arising out of the implementation and enforcement of these orders.

   B.11.That the Interim Application of the Wife filed 8 December 2008 and otherwise be and hereby is hereby dismissed.

   B.12.That the Wife pay the Husband's costs of and incidental to these proceedings.

   B.13That the First and Second Third Parties do all acts necessary to provide to the Applicant and the Respondent an accounting in respect of monies, works and labours contributed by the Applicant and the Respondent for and towards improvements maintenance and renovations of the single storey residence known as “the Manager's Cottage” constructed on the property in certificate of title Folio Identifier […] situate at [W Street] in the State of New South Wales.

   B.14.A declaration that First and Second Third Parties hold the Manager's Cottage in trust for the Applicant and Respondent, in such proportions as reflect the sums of money work and endeavours contributed by the Applicant and respondent to the improvements maintenance and renovations of the Manager's Cottage.

   B.15The monies due and owing to the Applicant and the Respondent pursuant to the said declaration are charged upon title of the said property.

   B.16.That the First and Second Third Parties as trustees for the Applicant and Respondent pay to Account Number […]07 with the Newcastle Permanent Building Society for and on behalf of the Applicant and the Respondent the monies that are due and owing to the Applicant and the Respondent pursuant to the declaration in the preceding order within 14 days of that order, those monies there to be held in that account upon trust for the Applicant and the respondent subject to these orders.

   B.17 In the alternative to Orders 1-4 above, that pursuant to Part VI1IAA of the Family Law Act 1975 (C’th), section 90AE(2)(a) and/or (b) the First and Second Third Parties pay within 14 days of this order to Account Number […]07 with the Newcastle Permanent Building Society for and on behalf of the Applicant and the Respondent the sum of $200,000 or such other sum as this Honourable Court may determine, as reimbursement for the contributions of the Applicant and the Respondent for and towards improvements maintenance and renovations of the single storey residence known as "the Manager's Cottage" constructed on the property in certificate of title Folio Identifier […]954 situate at [W Street] in the State of New South Wales.

3. The Third Parties seek that, insofar as it seeks orders against them, the husband’s application be dismissed.

The hearing

1. In the week prior to the commencement of the hearing the matter came before a registrar on the husband’s application to adjourn or defer the hearing. That application was not granted. At some point thereafter the husband’s lawyers ceased to act for him.

2. I arranged for the proceedings to be mentioned before me on 8 February 2010 to ensure that the matter was able to proceed. Special arrangements had been made to allocate time to the hearing of this matter and I was concerned to ensure that court time would not be wasted. On 8 February 2010 the husband filed two Contravention Applications in respect of interlocutory orders. One application named the wife as respondent and the other, the wife’s parents. Those applications were formally allocated a hearing date in March 2010. The husband renewed his application for an adjournment or deferral of the hearing. That application was dismissed. I told the parties that the contravention applications would be dealt with prior to the property proceedings so as to avoid problems of respondents having a right to silence and to attempt to bring the overall proceedings to an end. Thus I brought the contravention proceedings forward. For the benefit of the husband I explained the procedure that would be followed when the trial commenced.

3. On 10 February 2010 it transpired that the husband had not served the Contravention Application on the wife and it was dismissed. The Contravention Application against the wife’s parents was also dismissed for reasons given on that day. The hearing of the property proceedings then commenced with objections. Such was the state of the husband’s numerous and repetitive documents that the process of objections took until 12.50 pm on the second day of the hearing. The parties agreed that the order of proceedings would involve the wife’s case first, then that of the third parties and last, that of the husband. Given the loss of a day and a half from the time originally allocated for the property hearing, I then settled a trial plan. Senior counsel for the wife and counsel for the wife’s parents said their cross-examination of the husband would take a total of about one hour and twenty minutes. I gave the balance of the time until lunchtime the following day, to the husband. Submissions were made and judgment was reserved.

Documents read

1. The wife relied on the following documents:

Sworn/Affirmed
Affidavit of the wife	12.01.2009
Affidavit of the wife	6.08.2009
Affidavit of the wife	15.12.2009
Financial Statement	19.01.2010
Affidavit of Ms S	4.12.2009

1. The husband relied on the following documents:

Sworn/Affirmed	Filed
Affidavit of the husband	12.01.2009	12.01.2009
Affidavit of the husband	10.08.2009	10.08.2009
Affidavit of the husband	18.08.2009	18.08.2009
Affidavit of the husband	28.08.2009	28.08.2009
Affidavit of the husband	28.08.2009	28.08.2009
Affidavit of the husband	16.11.2009	16.11.2009
Affidavit of the husband	17.11.2009	17.11.2009
Affidavit of the husband	05.02.2010	05.02.2010
Affidavit of the husband	08.02.2010	08.02.2010
Affidavit of the husband	08.02.2010	08.02.2010
Affidavit of Ms M	08.02.2010	08.02.2010
Financial Statement of husband	12.02.2010[1]	05.02.2010

[1] The husband’s Financial Statement was not sworn when it was filed. He swore that the contents were true on 12 February 2010.

1. The third parties relied on the following documents:

Sworn/Affirmed	Filed
Affidavit of Mr Howatt	17.11.2009	17.11.2009
Affidavit of Mr Howatt	18.12.2009	18.12.2009
Affidavit of Ms howatt	18.12.2009	18.12.2009
Affidavit of TA	22.12.2009	23.12.2009

Short history

1. As at the date of the hearing the wife was 37 years of age and the husband was 50. They started to live together in 1998 and were married in September 1999. The wife says that she and the husband separated in January 2007. The husband says that they first separated in May 2007. The husband and the wife’s father say that the husband and the wife finally separated in January 2008. It is not possible to make any more definite finding about separation. The divorce of the husband and wife became final on 11 December 2008.

Children

1. There are two children of the marriage:

   Cwas born in September 2003 and as at the date of the hearing he was 6 years of age; and

   Lwas born in March 2005 and as at the date of the hearing he was 4 years of age.

Issues in dispute

1. It appears that there are the following issues:

   As between the husband and Mr & Mrs Howatt:

   1.the husband’s claim of an interest in the property at W Street.

   As between the husband and wife:

   Pool of assets

   2.the balance of the joint funds held in the Mark Evans Trust account;

   3.NAB term deposit in the name of the wife – husband says $52,000: wife says nil;

   4.NAB cheque account in the name of the wife – husband says $33,192: wife says nil;

   5.Newcastle Permanent Building Society savings in the name of the wife – husband says $2,351: wife says nil;

   6.Newcastle Permanent Building Society cheque account in the name of the wife – husband says $4,749: wife says nil;

   7.Macquarie bank account – husband says $2,333: wife says nil;

   8.W Broker account – husband says $321: wife says nil;

   9.C / L trust accounts – husband says $7,307: wife says they should not be included;

   10.NIB & other shares – husband says $3,000: wife says $2,080 NIB shares only;

   11.Loan to wife’s sister – husband says $7,000: wife says there is no loan;

   12.wife’s furniture and jewellery – husband says $40,000 ($20,000 each): wife says furniture and jewellery as per valuation $6335;

   13.cars –husband says wife’s Toyota vehicle $20,000, his Toyota Camry $5,000: wife says her Toyota vehicle $12,000, husband’s Toyota Camry value not known;

   14.unauthorised credit card payment – husband says $8,000: wife says nil;

   15.taxation refund – husband says $60,000: wife says nil

   16.husband’s Integra superannuation – wife says $19,402: husband says nil;

   17.funds held by husband – wife says not known: husband says nil;

   18.husband’s furniture – wife says not known: husband says $5,000;

   19.(proceeds of?) shares traded by the husband in the account of “Mr Stockmarket” or another name – wife says not known: husband says nil;

   20.(value of) husband’s interest in “C Business”– wife says not known: husband says nil;

   21.interim distribution to the husband - wife says $107,800: husband says $102,800 ($87,800 + $15,000);

   22.NAB visa debt of $17,423 in the name of the wife - wife says it is the husband’s responsibility: husband says wife’s credit cards total $23,000;

   23.wife’s ANZ visa debt – wife says $6,431: husband says wife’s credit cards total $23,000;

   24.wife’s assessed income tax – wife says $1,080: husband says the wife should receive a refund;

   25.wife’s debt to Centrelink of $7,833 – husband says nil;

   26.husband’s credit card debts – wife says not known: husband says $200,000

   Contributions (section 79(4)(a), (b) & (c))

   30.Wife says equal

   Adjustments (section 79(4) (d) – (g) incl.)

   30.Wife says 15% adjustment to her

Background facts

1. In October 1992 the wife’s parents purchased the property at W Street. In 1993 they transported a timber house from another property and relocated it to the W Street property. That house is known as “the Manager’s Cottage” and had been in the family of Mr Howatt for many years. Mr Howatt had lived in the cottage in his youth. The Howatts had the cottage connected to services.

2. In March 1998 R Business opened.

1. In June 1998 R Business was placed in voluntary administration. The husband managed the business on behalf of the administrator.

2. In late 1998 the wife and husband commenced co-habitation. The wife says that she left her employment at a department store to work part-time in R Business. The husband says that she helped in the business from December 1999. The business was jointly owned by the husband and a business partner through a corporate structure. At that time, the business was still in voluntary administration.

3. There were police and Crime Commission enquiries related to the business. In August 1999 the husband received threats. As a result, the wife and husband moved to the W Street property.  They had their furniture moved to the Manager’s Cottage. The wife and husband paid to install a new kitchen. The wife’s father, Mr Howatt, assisted with the installation.

4. Mr Howatt installed a bay window in the Manager’s Cottage and painted the main bedroom. He assisted with additional work on the Manager’s Cottage between 1999 and 2000.

5. The wife and husband were married in September 1999. In December 1999 they returned to Sydney and the husband hired a security guard. The wife asserts that their furniture was removed to Sydney. The husband says it was not. It is neither possible nor necessary to resolve this dispute.

6. In September 2000 the wife and husband bought a unit in a Sydney apartment building, in the wife’s name.

7. The wife says that in 2001 the husband began drinking heavily, that after an incident he started to attend Alcoholics Anonymous meetings and that he did not drink for about a year. The husband denies each of those propositions.

8. The wife says that in June 2003 the husband started drinking again. The husband denies that assertion. From a sarcastic comment during his cross-examination of the wife, I gather that the husband contends that he did not stop drinking for any significant period.

9. The wife asserts that in September 2003 she and the husband moved back to live in the Manager’s Cottage. The husband says that the wife stayed in Newcastle at that time. The wife was then pregnant. The husband stayed for 2 or 3 days at a time. The wife continued to work in the business from W Street. The wife says that the husband commenced share trading in the wife’s name. The husband would say that he commenced share trading in 2005/2006. I cannot resolve that issue.

10. Mr Howatt painted the baby’s room at the Manager’s Cottage.

11. C was born in September 2003.

12. In December 2003 the “R Business” was sold and the husband received a total of $398,540. The wife and husband also sold their apartment. The wife says that they cleared $150,000 on the sale of the apartment. The husband does not agree. I think perhaps the wife and husband were at cross purposes in this regard, the husband talking about whether they made a loss on the sale and the wife dealing with the net proceeds at settlement.

13. The wife says that in January 2004 the wife and husband moved into the Manager’s Cottage at W Street and that they did not pay rent. The husband denies those propositions.

14. On 23 January 2004 the husband arranged for all mail relating to his share trading to be sent to a post office box in T. The wife says that he was the only key holder for that PO Box. The husband denies that assertion. The husband traded on line using a broker, W Broker.

15. The wife says that in mid 2004 there was incident of heavy drinking by the husband. The husband denies that assertion. From the questions he put to the wife during cross-examination I am unsure whether the husband’s case is that he drank heavily throughout the marriage or that the wife exaggerated his drinking.

16. In March 2005 L was born.

17. On 6 December 2005 the wife withdrew $12,000 from her pre-marriage savings at the request of the husband. She says she gave him that money to buy shares. The husband denies that assertion. I am inclined to accept the wife on this issue. The wife was pressed on this issue but was not successfully challenged about her pre marriage savings.

18. On 19 January 2006 the husband left the home and spent 3 days at country races. The wife says that after a conversation with her, the husband then booked into a Drug and Alcohol programme. The husband denies that assertion. I cannot resolve that issue.

19. The wife says she and the husband separated in January 2007. The husband says they first separated in May 2007 and for the last time in January 2008. The wife’s father says that the parties separated in January 2008. The wife and children continued to live in the cottage.

20. The wife says that on separation the parties agreed to divide $50,000 held in a Term Deposit. The husband denies that assertion. The wife says she received $30,000 and the husband $20,000. The husband lived in rented accommodation north of Newcastle. The husband agrees but says he commenced renting there in May 2007. The wife paid the bond and his telephone and Foxtel for some months.

21. On 4 February 2007 the husband withdrew $1,240 from the wife’s credit card. The wife says that between that date and 31 December 2007 the husband withdrew a total of $40,240 from the wife’ credit card. The husband denies that assertion.

22. On 10 January 2008 the wife withdrew $20,000 and gave the husband a cheque for $15,000. The wife says that, at his request, she also gave the husband $5,000 in cash. The husband denies that last assertion. In the same month the husband removed the wife’s access to on-line information about his share trading in her name. The husband says he did that on 27 February 2008. The wife says she then withdrew the Power of Attorney she had granted to him. The husband says she did that on 27 February 2008.

23. On 14 February 2008 the wife delivered financial records to the husband including 15 folders of share trading statements, bank statements and CHESS statements. The husband says that she only delivered some of the CHESS statements.

24. The wife says that on 18 June 2008 she was informed that the husband had credit card debts of $187,645. The husband denies that assertion.

25. The wife says that on 17 February 2008 the husband informed her that she had a tax liability. The husband denies that assertion.

26. On 5 March 2008 the wife withdrew $10,000 from joint funds and gave the husband $5,000.

27. On 18 March 2009 final parenting orders were made in terms agreed between the wife and husband.

28. On 12 May 2008 $125,600 was paid into the trust account of the wife’s solicitor from the sale of Telstra shares. On 15 May 2008 the wife and husband each received $62,800 from that fund.

29. On 4 July 2008, $436,063 was paid into the trust account of the wife’s solicitor from the sale of shares.

30. On 21 August 2008, $47,000 was paid into the trust account of the wife’s solicitor from the sale of Telstra shares.

31. On 21 January 2009 an order was made providing for the wife and husband each to receive $20,000 from the funds held in trust.

32. On 17 November 2009 an order was made providing for the wife and husband to pay $60,193 to the ATO from money held in trust.

33. The divorce of the husband and wife became final on 11 December 2008.

Credit and Submissions

The evidence of the witnesses

1. The only witnesses called for cross-examination were the parties and Ms S. There are many matters in issue that fall to be determined by reference only or in part to the oral testimony of the parties. Unsurprisingly, the witnesses do not have perfect recollection.

2. The wife was not a good witness in that it could not be established that she had reliable knowledge of most of the matters about which she was cross-examined. Much of her written evidence was based on what she was told, largely by the husband, rather than from first hand knowledge. As to the things within her knowledge, the wife had a clearer recollection of some matters than others. The husband did not conduct his cross-examination in a structured or respectful manner. He asked questions that made no sense, rolled up several questions into one and asked the same question in several ways without giving the wife an opportunity to answer any of the versions. He was mocking and sarcastic to the point that it became unclear whether he was challenging the witness or reinforcing an undisputed fact. That did not assist the wife to give her evidence.

3. Ms S was not successfully challenged on any substantive aspect of her evidence.

4. Neither Mr Howatt nor Mrs Howatt were successfully challenged on any substantive aspect of her evidence. They were each careful in giving their evidence and appeared to reflect before answering questions. Their evidence was broadly consistent with that of each other and of their daughter. They were unshaken in the assertion and detail as to the Manager’s Cottage being in a habitable state prior to August 1999 when the husband and wife moved in. There were differences in their evidence– such as the wife and Mr Howatt remembering the husband sleeping in the wife’s bedroom (at least on one occasion) before the wedding whereas Mrs Howatt did not. Mr Howatt remembered being told that the husband threw C at the wife while she held L but Mrs Howatt did not. Rather than casting doubt on their credit, those differences in their evidence suggest that there was no collusion between the witnesses.

5. TA was not required for cross-examination.

6. The husband was a poor witness. A significant proportion of his voluminous affidavit evidence was struck out on objection. Much of it was in the form of submissions. In some of his affidavits, annexed documents were not introduced in any detail in the text of the affidavit. Much of his testimony was based on supposition which the husband says arose because documents, he asserts were in the possession of wife or her parents, were not made available to him. Partly because he confused “discovery” with “production” the husband failed in contravention proceedings against the third parties. Partly for the same reason he failed to make legitimate complaint about being denied records in the possession of the other parties. On occasions the husband answered “no” to questions which he meant to answer “I do not know”.

7. Ms M was not required for cross-examination.

8. A single expert report was commissioned from Mr E, a Certified Practising Valuer. On the objection on behalf of the third parties I excluded the report. I told the parties I would include the reasons for doing so, in the reasons for judgment of the property settlement proceedings. Those reasons are:

9. In In TWN & PAQ [2005] FamCA 677; (2005) FLC 93-230; (2005) 34 Fam LR 190 the Full Court reviewed the law in relation to expert opinion and said:

   101. We turn then to the question of whether Mr Spring’s report should have been received by his Honour into evidence, and the relevance of his evidence determined after cross examination. This required a consideration of the Part 15.5 of the Rules, and the principles enunciated in Makita v Sprowles (2001) 52 NSWLR 705, and cases determined subsequent to that decision relating to admission of expert evidence. Rule 15.59(3)(a) provides that an expert has a duty to the Court to “give an objective and unbiased opinion that is also independent and impartial on matters that are within the expert witness’s knowledge and capability”. Rule 15.59(3)(e)(i) provides that an expert has a further duty to “tell the court…if a particular question or issue falls outside the expert witness’s expertise”.

   102.    In Makita (supra) Heydon JA (as he then was) comprehensively sets out a number of authorities dealing with the question of expert evidence. At 743 his Honour distils the principles relevant to the admissibility of expert evidence as such:

   “In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of ‘specialised knowledge’; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be ‘wholly or substantially based on the witness’s expert knowledge’; so far as the opinion is based on facts ‘observed’ by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on ‘assumed’ or ‘accepted’ facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study or experience’, and on which the opinion is ‘wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight.”

   103. The principles espoused by Heydon JA in Makita (supra) to be upheld by expert witnesses have been adopted with approval in a number of subsequent decisions (see Idaport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 123). However, in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FAFC 157 Branson J referred to the requirements set out by Heydon JA above as “a counsel of perfection”. Her Honour noted that before the trial Judge the parties, who were legally represented, had agreed to an expert report, which became the subject of challenge before the Full Court, being admitted. She noted a trial Judge is normally required to make rulings on admissibility at the commencement of the hearing and that the practice of examining an expert on the voir dire was no longer commonly employed. Her Honour said:

   “As a result the judge is likely to be asked to rule on the admissibility of the affidavit, report or oral evidence of a witness put forward as an expert before the witness is subject to any questioning by opposing counsel. For this reason, it may prove to be the case that evidence ruled admissible as expert opinion will later be found by the trial judge to be without weight for reasons that, strictly speaking, might be thought to go to the issue of admissibility (eg that the witness’s opinion is expressed with respect to a matter outside his or her area of expertise or is not wholly or substantially based on that expertise).” 

   104.    Branson J noted the touchstone for admissibility was the relevance of the evidence, and set out the criteria for admissibility of an expert witness’s evidence.  She departed from Heydon JA’s findings only to the extent that if Heydon JA used the word “sure” in the sense of a trial Judge being subjectively certain about whether an opinion proffered by an expert was based wholly or substantially on that expert’s knowledge she respectfully disagreed.  The other members of the Court, Weinberg and Dowsett JJ held at paragraph 87 and 88 as follows:

   “[87] The use of the phrase ‘strictly speaking’ in the last sentence should not be overlooked. It may well be correct to say that such evidence is not strictly admissible unless it is shown to have all of the qualities discussed by Heydon JA. However many of those qualities involve questions of degree, requiring the exercise of judgment. For this reason it would be very rare indeed for a court at first instance to reach a decision as to whether tendered expert evidence satisfied all of his Honour’s requirements before receiving it as evidence in the proceedings. More commonly, once the witness’s claim to expertise is made out and the relevance and admissibility of opinion evidence demonstrated, such evidence is received. The various qualities described by Heydon JA are then assessed in the course of determining the weight to be given to the evidence. There will be cases in which it would be technically correct to rule, at the end of the trial, that the evidence in question was not admissible because it lacked one or other of those qualities, but there would be little utility in so doing. It would probably lead to further difficulties in the appellate process.

   [88]  We should add one rider to these observations. As Heydon JA pointed out in his reasons at [62], there are difficulties in cross-examining upon a report which does not provide detail as to the way in which particular opinions have been formed. Increasingly, courts seek to facilitate cross-examination by practice directions and other devices designed to ensure that expert evidence is presented in the most effective way, having regard to the purpose for which it is presented. However such procedures are not designed to avoid the testing of expert evidence in cross-examination, nor is it expected that they will obviate the need for evaluation of the evidence, having regard to qualities such as those discussed by Heydon JA. The decisions in Ocean Marine and Henschke take the matter no further.”

   105.    We accept that Heydon JA’s statements in Makita (supra) may be regarded as providing a stringent test for the admissibility of expert evidence.  There is no doubt that courts are attempting by use of appropriate rules to ensure expert evidence is efficiently and effectively used to facilitate timely hearings conducted in a cost effective manner.  This approach is reflected by this Court in Chapter 15 of the Rules.  The Rules, and modern case law, emphasis the duty of the expert to the court, including the duty to provide an export report based on the expert’s personal skill and expertise, and to clearly identify a reliable factual basis for opinions expressed. 

   106.    We agree with the views expressed by Branson J, and also by Weinberg and Dowsett JJ in Sydneywide Distributors (supra) that in the context of trials in courts such as this Court when such evidence must be adduced in accordance with the principles and duties laid down in the Rules, that generally questions of admissibility of expert evidence, based on conclusions in written reports or affidavits, should not be the prime determinant of the admissibility of that evidence, but rather the relevance of the evidence to the issue in dispute, the specialized skill and knowledge of the expert and whether the report is based on such skill and knowledge. 

   …..

   107.    In the circumstances of this case no doubt was cast on the husband’s expert accountant’s expertise to calculate the quantum of CGT likely to be payable on an immediate sale of all the properties, save and except the inherited properties, but no attempt was made to adduce evidence before the trial Judge that this particular witness had the requisite expertise to provide an opinion of the method by which the Deputy Commissioner accepted market value. 

10. On 17 November 2009 I made the following order:

    1.Orders are made in terms of the document titled “Minute of Proposed Orders” marked Exhibit 1 as set out hereunder;

    “1.That forthwith the parties do all such acts and execute all such documents so as to withdraw the sum of $60,193.40 from their Joint account number […]07 with the Newcastle Permanent Building Society and to pay the said sum to the Australian Taxation Office.

    2.That if either party refuses or neglects to sign any document necessary to implement these orders within 7 days of a request to do so, the Registrar of the Newcastle Registry of the Family Court of Australia is appointed under section 106A of the Family law Act to execute such document on behalf of that party.”

    3.That [Mr E] be appointed Single Expert valuer in these proceedings in relation to the claim of the husband in respect of improvements at a property situate and know as [W Street].

    4.That within 14 days from today’s date the husband write to the Single Expert valuer with copies to each of the other parties instructing that valuer to provide valuation evidence in support of his claims.

    IT IS NOTED

    4. (sic)That the husband has been advised today that the Letter of Instruction, which is Exhibit P1 to his affidavit of 18 August 2009 may be inadequate for the purpose of supporting his claim.

    IT IS FURTHER ORDERED

    5.That the wife’s parents provide access to the Single Expert valuer to the property and the premises on the property within 7 days of being requested to do so at a time convenient to them.

    6.That affidavits of lay witnesses relied on by the wife and husband and the wife’s parents be filed and served not later than 18 December 2009 AND unless leave is granted the parties are not permitted to rely on any further affidavit evidence.

    IT IS FURTHER NOTED

    7.That the husband intends to file affidavits by his mother, his sister and [CF].

    IT IS FURTHER ORDERED

    8.That the husband and wife file and serve updated Financial Statements not later than 22 January 2010.

    9.Leave to the husband to issue subpoenas to [AW], Centrelink, Telstra, any financial institution, [CH] and the Australian Taxation Office.

    10.Leave to the wife to issue subpoenas to ANZ Bank, Commonwealth Bank, Westpac Bank and Citi Bank.

    IT IS FURTHER NOTED

    11.The husband has been advised that if subpoenas are drawn too widely there will be an inordinate cost incurred by him in relation to meeting the costs of the addressees of those subpoenas.

    IT IS FURTHER ORDERED

    12.That the solicitor for the wife pay to the Single Expert valuer the amount of his costs associated with the valuation provided for these proceedings forthwith upon production of an invoice from that valuer.

    13.That the solicitors for the parties provide Case Outline documents to Judicial Registrar Loughnan’s associate not later than 29 January 2010 setting out briefly the arguments to be made in relation to the pool of assets, the contributions made by the parties and any adjustments to be made under the other matters in s79(4).

    14.That not later than 10:00 am on 10 February 2010:

    (a)the parties settle an agreed Balance Sheet noting any disputes in relation to the existence of an asset or the valuation of an asset and where the evidence in relation to those issues may be found.

    (b)That the parties settle an agreed list of issues about which findings of fact will be required during the course of the trial.

    (c)Settle, as far as practicable, any objections to evidence in relation to the affidavits; and

    (d)That the parties and settle an agreed Chronology in relation to the proceedings.

    16.Leave to the parties to have photo-copy access to any documents produced pursuant to the orders made today and the Court extended time for compliance with the orders of 10 August 2009 for 14 days AND IT IS NOTED that the purpose of photocopy access to the husband is to allow him to provide copies of documents to KPMG in relation to the wife’s taxation liability.

1. On 8 February 2010 I made the following order:

   1.The proceedings are adjourned to the commencement of the trial at 10:00 am on Wednesday, 10 February 2010.

   2.That by 12:00 noon on Tuesday, 9 February 2010 the Husband notify the solicitor for the Wife and the solicitor for the Third Parties and Judicial Registrar Loughnan’s associate by email or facsimile which of the paragraphs of his affidavit sworn 18 August 2009 he relies on for the purposes referred to in paragraph 23 of his affidavit of 5 February 2010.

   3.The Minute of Orders Proposed by the Third Parties is Exhibit 1 and orders are made in terms of that document.

   1.  The single expert valuer provide to each party or the solicitor for each party:

   1.1.     a copy of every letter of instruction or related document which he received from any party or solicitor in relation to the matters the subject of his report;

   1.2.     a clear, legible copy of every photograph which he received from any party or solicitor for the purpose of his report.

   2.  The single expert valuer be requested to provide his opinion in writing as to the rental value of the property known as the "Manager's Cottage" at [W Street], NSW covering the period from August 1999 to December 2007.

   3.  For the purpose of implementation of orders 1 and 2 hereof, the solicitor for the third parties send a letter of request to the single expert forthwith, copied to each party.

   4.  The time within which the case outline document is to be provided by the Third Parties is extended to 4:00 pm on 9 February 2010.

2. The report is dated 17 December 2009. Although not verified by affidavit, the report includes a declaration to the following effect:

   (i)I have made all the enquiries that I believe are necessary and appropriate and to my knowledge there have not been any significant relevant matters omitted from this report.

   (ii)I believe that the facts within my personal knowledge that are stated in this report are true and the opinions I have expressed are truly held by me.

   (iii)I have read and understood the Family Court practice direction “Guidelines for Expert Witnesses” and agree to be bound by it.

   (iv)I am independent of the engaging party and their legal representative; and

   (v)I have complied with the requirements of the following professional codes of practice or protocols that apply to me.

3. The particular professional codes or protocols referred to in (v) are not identified, let alone set out in the report.

4. An addendum to the report was provided on 9 February 2010 in relation to questions asked of the expert since the main report, including a request for an opinion about the rental value of the Manager’s Cottage.

5. In his report Mr E does not assert that he has undergone specified training or study or that he has relevant experience. The only reference to his qualifications is the recitation in his letterhead of his registration as a valuer and membership of related organisations. Insofar as he reports on the value of “the subdivided curtilage land”, the area on which the cottage stands has not been subdivided. The report reveals that the valuer was asked to assume that a section of land marked on a photograph, could be subdivided. There is no probative evidence that the section of land described as the “curtilage land” in a drawing, apparently sent to the valuer on 17 August 2009, is able to be subdivided or indeed that any part of the property is able to be subdivided. As to the valuation opinion itself, the valuer describes the property and parcels in question; reports on the relevant zoning requirements; describes the current improvements; and gives brief details of sale results for other properties in the area. The expert does not explain how his opinion was arrived at from those facts and observations. Thus there is no demonstration or examination of the scientific or other intellectual basis for the conclusions reached.

6. As to the value of the increase in market value of the overall property as a result of the improvement in the form of the Manager’s Cottage as it was in 1999 and as at 2004, the opinion apparently relies solely on a series of photographs. The husband conceded in cross-examination that the photographs he provided to the valuer on which the opinion was based, did not accurately reflect what he told the valuer they showed. He represented to the valuer that the “before” photographs demonstrated the condition of the property at the time he and the wife moved in and started to make improvements. It is an agreed fact that the photographs depict the cottage at a much earlier time, when the cottage was first delivered to the site and before services were connected and other significant work was done by and at the direction of Mr Howatt.

7. Albeit that the opinion was sought at the application of the third parties, it is conceded in their case that the valuer’s opinion of the rental value of the Cottage expressed in the report of 9 February 2010, is so qualified as to be of no practical benefit.

8. For those reasons the report was excluded.

Submissions

1. The written submissions on behalf of the wife are:

   NOTE:

   The Wife asserts that the Husband’s credit card debts were incurred by him alone for gambling and drinking and were not debts incurred for family purposes. The Husband has not provided any evidence of the debt or the amount of the debt. The Wife has issued subpoenae and obtained statements for the 2 accounts referred to above up to May 2005 and March 2005 respectively. The Wife’s case is that the Husband should bear that liability, if it exists.

SUMMARY OF ARGUMENT

A.        CONTRIBUTION ENTITLEMENT

1.The Wife was the primary home maker and parent and had the primary care of the children.

2.The Wife continues from the date of separation to have the primary care of the children.

3.The Wife had assets at the commencement of co-habitation being savings of about $23,500 and cattle. The Husband had an interest in [R Business] but the business was in voluntary administration. Any interest the Husband may have had in real property was subject to mortgage and of no net value.

4.The Wife’s parents provided the parties (husband and wife) with accommodation rent free from August 1999 until December 1999; from September 2003 until separation in January 2007.

5.The Wife’s parents provided the Wife with rent free accommodation from separation until the present time.

6.From December 1998 (9 months after its commencement) the Wife worked in the business until it was sold in December 2003.

7.The share trading which the Husband pursued was done in the Wife’s name pursuant to a Power of Attorney which she gave him.

B.SECTION 75(2)

1.   The Wife will continue to have the major care of the children who are aged 9 and almost 4.

2.   The Husband makes no financial contribution to the children’s expenses which are born solely by the Wife with the assistance of her parents. There is no evidence to satisfy the Court that this position will change.

3.   The Wife’s capacity for employment is limited by her obligations to the children.

4.   The Wife has worked as a shop assistant and as a book keeper. She does not have capacity for well paid employment.

5.   The Court could not be satisfied on the evidence what the husband’s earnings might be or what his earning capacity might be.

5.   There should an adjustment in favour of the Wife for section 75(2) factors.

C.       THE ASSET POOL

1.        The Husband’s credit card debts

1.1      The Wife’s case is that the Husband should be solely liable for the debts incurred by him.

1.2      In Biltoft (1995) FLC 92-614, the Full Court held:

In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party's potential entitlement under sec. 79 (Kimber and Kimber (1981) FLC ¶91-085; Kowaliw and Kowaliw (1981) FLC ¶91-092; Antmann and Antmann (1980) FLC ¶90-908; Af Petersens (supra)). Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC ¶91-311).

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 (Af Petersens (supra)).''

1.3      The Husband has provided no evidence to satisfy the court how the debt was incurred or what the liability, if it exists, may be.

1.4      In his Financial Statement sworn 12 January 2009 the Husband deposes to credit card debts of $ 23,456.

1.5      The Wife has never been provided with copies of the relevant statements.

1.6      The Wife asserts that the husband withdrew money from credit cards to gamble, attend horse races and pay for alcohol and accommodation at times when she was living at [W Street] and caring for the children.

1.7      The Husband has had distributions of $107,800 which could have been used, at least in part, to discharge his debts.

2.        [C Business]

2.1      The Husband established the business using money he received by way of interim distribution from the sale of shares.

2.2      The Husband deposes in his affidavit sworn 25 August 2009 in Paragraph 58 “This business has now failed and no longer exists”. However documents produced on subpoena establish that the Husband transferred the business to another person for no consideration and that as at May 2009 (about the time of the transfer, the business had a deposit in excess of $40,000.

2.3      The Wife submits that the transfer of the business was an attempt to remove the asset from the property pool and should be dealt with either as waste according to Kowaliw and Kowaliw (1981) FLC 91-092; or by way of add back as in Townsend and Townnsend (1995) FLC 92-569.

3.        Non-disclosure

3.1      The Wife submits that the Husband has made no effort to comply with the rules in relation to financial disclosure.

3.2      His financial statement sworn 12 January 2009 discloses an income from Centrelink of $209 per week. He also claims to be paying rent to the Wife’s parents of $200 per week.

3.3      In His affidavit sworn 28 August 2009 at Paragraph 58 the Husband deposes to paying rent of $320 per week since separation.

3.4      The Court could not be satisfied that the Husband has made proper or any disclosure of his income, his occupation or his assets, including any business interests he may have, or his share trading activities.

3.5      In Black and Kellner (1992) FLC 92-287, the Full Court dealing with the consequences of non-disclosure said:

As senior counsel for the wife pointed out, the first step in proceedings for a property settlement is for the court to ascertain the wealth of the parties and in this regard it is of interest to note the remarks of the Full Court in the case of Giunti and Giunti (1986) FLC ¶91-759, particularly at 75,555 where the court commented:

``It is obviously desirable as a general principle that the Court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs see Briese and Briese (1986) FLC ¶91-713, affirmed by the Full Court in Oriolo and Oriolo (1985) FLC ¶91-653, there is no problem, although there may be disputes as to valuation.

However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this Court, not by outright refusal which would attract sanctions, but by obfuscation and evasion.''

The Full Court in Oriolo and Oriolo (supra) referred with approval to the remarks of Smithers J in the case of Briese and Briese, and it is perhaps worth reiterating portion of his Honour's statement where he said, after referring to the decision of the House of Lords in Livesey v Jenkins (1985) All ER 106:

``I believe that the conclusion of the House of Lords in the case of Livesey v Jenkins... is apposite, namely that in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the Court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.

In my view it is fundamental to the whole operation of the Family Law Act in financial cases, that there is an obligation of the nature to which I have referred.''

Regard also may be had to the decisions of this court in Stein and Stein (1986) FLC ¶91-779 at 75,676 and Mezzacappa and Mezzacappa (1987) FLC ¶91-853.

In the present case a similar situation arose. The assets of the parties could not be ascertained in full because of obvious non-disclosures.

It is apparent that if his income was more substantial than he claimed, then this would be

[79134]

reflected in the value of his practice and in this regard it is perhaps of interest to note that the wife's former husband's practice of a similar nature, was capable of being sold for a figure in 1973 terms which would if reflected in 1991 terms, represent a very substantial asset indeed.

Finally, another part of a judge's obligation in cases of this nature in considering section 75(2) factors is to consider the respective incomes of the parties. Again, through the behaviour of the husband, this was something which the learned trial judge could not do.

It follows from what I have said that I do not believe that his Honour's judgment can be attacked upon the basis relied upon by the husband. I might perhaps add that speaking for myself, although I note that there is no cross-appeal, I would have been disposed to find that the husband was entitled to nothing, and certainly would not have interfered with a decision by his Honour dismissing the husband's claim entirely. Indeed it may well be that he was fortunate to get the award that he did.

1. The written submissions of the husband are:

   OUTLINE OF CASE

   Contributions made by the parties:

   The wife asserts that the husband did very little work, no domestic duties, and never helped with the children. The husband asserts that while he did indeed work, he performed more domestic duties than the wife and helped immensely with the children.

   The wife asserts that the husband wasted the assets of the marriage gambling and excessive drinking. The husband asserts the wife is exploiting the husband's admission of alcoholism and provides copies of cheques of the husband's winnings from gambling at the race track and on TAB.

   The husband would like to draw to the attention of the Court that in the Children's proceedings the wife made substantial allegations regarding the husband's alcohol abuse during which time the wife left the children in the husband's care two nights every week. The documents subpoenaed by the Wife at the Court from the child [C’s] physiologist [Mr WD] detail several alleged incidents the wife reported to DOCs regarding the husband's irresponsibility when the children were in his care. The husband was denied the opportunity to consult Mr [WD] and was never contacted by DOCs. The husband asserts these allegations were fabricated by the wife to deny the husband time with his children.

   The wife asserts on the commencement of co-habitation she had $98,000 in savings from her wins at the Casino and selling […] cattle. The husband asserts the wife was in debt and had no savings. The husband maintains he earned moneys through [R Business] that were paid into the wife's accounts in the wife's name so as to preserve moneys for the parties.

   The wife asserts the husband was looking for work and spending his time drinking alcohol to excess and wasting the party's assets. The husband details the extent of the husband's earnings from share investments and how the parties structured their home arrangements to enable the husband to pursue his occupation as a share investor;

   Credit Cards

   The wife asserts that the husband unbeknownst to her drew on his credit card. The husband asserts that this was the way the parties operated the investment business; and the monies were for the benefit of the family.

   The wife asserts that the husband unbeknownst to her drew on her NAB credit card. The husband asserts that this was the way the parties operated the investment business; and the monies were for the benefit of the family.

   The wife asserts that the husband unbeknownst to her placed personal items to the wife's ANZ Bank credit card. The husband asserts that he never used that particular card and provides evidence of the wife's excessive shopping at the times he has allegedly used that card.

   The wife asserts there was no agreement and endorsement by the wife of the husband's travel to the United Kingdom and to Perth, Western Australia; The husband asserts there was an agreement and endorsement by the wife of the husband's travel to the United Kingdom and to Perth, Western Australia;

   Unauthorized payment on the wife's credit card from the sale of the party's shares

   The wife asserts that she did not take a further $8,000 to pay off her credit card from funds that were released to pay a Telstra call on shares; The husband asserts the wife took a further $8,000 to pay off her credit card from funds that were released to pay a Telstra call on shares and provides evidence.

   The Manager's Cottage.

   The dispute is the actual costs paid by the parties for renovations effected to the property at [W Street] (the Manager's Cottage) since the parties' occupation of it in 1999.

   The [Howatts] have failed to produce any documents at all and in particular, documents relating to renovations that were effected allegedly by Mr [Howatt] or on his behalf to the property being the Managers Cottage at [W Street]. The husband has filed an Aplication Contravention against the [Howatts] evidencing this.

   The wife has all the documents pertaining to the husband and wife's contributions towards the renovations of that property and she has produced some but not all. In addition, the photographs of the works in progress are alleged to be in the wife's possession or the [Howatts’] possession, none of which have been produced especially, photographs pertaining to the kitchen in its unrenovated state in 1999 and as it progressed.

   The husband would like to bring to the Court's attention his affidavit's sworn 18th August 2009 and 5th February 2010.

   The wife's taxation returns and attendant refund -

   The wife asserts that the taxation liability of $60,000 paid out of the party's funds was correct and that the husband should not be permitted to review her taxation assessment The husband asserts that if he could have all the information ordered by the Court and requested by the wife's former accountant KPMG there would be a refund of over $60,000 made available to the parties.

   The wife asserts that the husband incurred unnecessary general interest charges. The husband asserts the wife dithered about paying tax and thus incurred the charges, and wrote to Mark Evans setting out the fact that the wife's failure to lodge the taxation returns would cost her general interest charges.

   The husband would like to bring to the Court's attention his affidavit's sworn 28 August and 16 November 2009 referring to the wife's taxation return and the anticipated refund. The husband discerns an argument run by the wife that because of delays by the husband in relation to payment of taxation the wife incurred unnecessary general interest charges. The evidence from these affidavits is that it is quite the contrary.

   Application Contravention

   The husband would like to bring to the Court's attention Application Contraventions against the [Howatts] and the wife filed 5th February 2010. These documents are vital for the preparation of the husband's case and he would be severely prejudiced without access to these documents.

   The husband has been advised he would need to make a statement of claim against the [Howatts], and this would require the documentation withheld by the wife and the [Howatts].

   The [R Business] book is important because it shows the money distributed from the sale of the [R Business] being $400,000 which essentially went into the accounts of the wife.

   The Husband and the Wife kept a cash book known as the "NK Red Book" that itemized our deposits and expenditure along side cheque numbers that reconciled with the wife's NAB Cheque account and cheque butts. The significance of this book is that it details where the parties deposits originated from, payments made to [W Broker], CMC, and Macquarie bank, payments made on the wife and husbands credit cards, the construction of the Office, the travel and accommodation to share trading and investment seminars, details of training courses, office furniture purchased, computer installation, costs, training, and consultation, and the loan to [the wife’s sister]. [The wife’s] taxation returns could not be completed properly without this book or at very least the cheque butts.

   The husband asserts there is a further $100,000 that has not been disclosed by the wife or deposited to her solicitor's ledger. The husband ascertains the proper accounting and full particulars of how those funds arrived at the Wife's solicitor's trust account have never been provided.

   BALANCE SHEET as at 8/02/2010

   ASSETS:

   1.Former Matrimonial home               $370,000

   2.     NCO term deposit   $406,000 (husband and wife)

   3.      Mark Evans Trust account                43,000 (not known)

   4.     NAB Term deposit                            52,000 (wife)

   5.     NAB Cheque           33,192 (wife)

   6.      NCP Savings       2,351 (wife)

   7.     NCP Cheque            4,749 (wife)

   8.     McQuarie Bank`             2,333

   9.     [W Broker] A/C  321

   10.    [C and L] trust a/c   7,307

   11.    NIB and other shares      3,000

   12.    Loan too [wife’s sister]   7,000

   13.    Furniture                20,000

   14.    Jewelery                 20,000

   15.    Cars             25,000

   16.    Unauthorised c/c payment                    8,000

   TOTAL ASSETS:  $1,004,253

   LIABILITIES:

   Husbands credit cards    $200,000

   Wife's credit cards                    23,000

   TOTAL LIABILITIES   $223,000

   BALANCE SHEET as at 8/02/2010

   ASSETS:

   1Former Matrimonial home                $370,000

   2.NCO term deposit  $346,539 (husband and wife)

   3.Mark Evans Trust account                 43,000 (not known)

   4.NAB Term deposit  52,000 (wife)

   5.NAB Cheque  33,192 (wife)

   6.NCP Savings   2,351 (wife)

   7. NCP Cheque   4,749(wife)

   8.McQuarie Bank   2,333

   9.[W Broker] A/C  321

   10[C and L] trust a/c   7,307

   11NIB and other shares   3,000

   12.Loan too [wife’s sister]   7,000

   13.Furniture  20,000

   14.Jewelery  20,000

   15.Cars  25,000

   16.Unauthorised c/c payment        8,000

   17. Taxation refund  60,000

   TOTAL ASSETS:  1,004.253

   LIABILITIES :

   Husbands credit cards   $200,000

   Wife's credit cards   23,000

   TOTAL LIABILITIES   $223,000

   CHRONOLOGY

   […] 59          birth of husband (50 years)

   […] 72          birth of wife (37 years)

   00 10 89        husband commences operation of [K Business]

   00 00 92husband sells [K Businees] and purchases interest in [M Business]

   00 11 98        parties commence cohabitation

   […] 09 99     parties marry

   promise made to the husband by the wife's father Mr [Howatt] that the property [W Street] known as the managers cottage will be theirs to do with as they liked

   00 11 99parties move t o occupy the manager's cottage at [W Street] and effect renovations and improvements to [W Street] managers cottage with the approval and co-operation of the wife's parents

   […]09 03      birth of [C] (6 years 5 months)

   […]03 05      birth of [L] (4 years 11 months)

   00 05 07parties partially separate husband spend 2-4 nights at former matrimonial home. Ends cohabitation of about 9 years.

   00 12 07husband receives letter from ATO regarding wife's tax returns

   01 01 08        wife excludes husband from former matrimonial home

   27 02 08        wife changes passwords on websites for share trading

   28 04 08        parties agree to sell [W Broker] shares realised $536,000

   25 08 08wife delivers documents to accountant [Mr CH] for preparation of her Taxation Returns

   08 12 08        wife files application for recovery order

   12 12 08        orders made re parenting matters

   21 01 09        orders made by consent

   31 08 09        husband files Application in a Case to join wife's parents

   16 03 09        wife files Amended Application

   08 12 09        Alan Arnold consulted

   06 01 10husband's solicitor writes to the Court to seek urgent relisting for consideration of the Court's vacating the hearing dates

   03 02 10matter listed before Registrar McFadden- Orders made extending time but requiring formal; application for vacation of hearing dates

1. Thus, during school term the children are with the husband four nights a fortnight and otherwise with the wife.

(d)  commitments of each of the parties that are necessary to enable the party to support:

1. himself or herself; and

(ii)  a child or another person that the party has a duty to maintain;

(e)   the responsibilities of either party to support any other person;

1. I have set out the evidence in relation to the expenses of the husband and the wife.

(f)   subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

(i) any law of the Commonwealth, of a State or Territory or of another country; or

(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,

and the rate of any such pension, allowance or benefit being paid to either party;

1. The wife receives Family Assistance and both the husband and wife have modest superannuation interests.

(g)  where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;

1. There is little evidence in relation to the standard of living of the husband and wife during the marriage. They engaged in overseas travel and gambled at casinos and other venues.

(h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

1. There is no probative evidence of either the husband or wife planning further study or intending to set up in a new business. The wife asserts that the husband has an interest in an ongoing enterprise called C Business.

2. The husband asserts that the wife has made enquiries about establishing a salon business. The wife’s sister operates a successful salon business

3. No findings are possible on those issues.

(ha)  the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; 

1. Each of the husband and wife has debts. They will receive some property settlement. It is not practicable to make findings about the ability of creditors to recover. Indeed there is no probative evidence of attempts made to recover moneys lent.

(j)      the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

1. The extent of the earning capacities of the husband and wife is hard to identify. They both have skills suited to paid employment but at the moment neither of them is exercising those skills. In the wife’s case much of her time is taken up with the children. The husband says that he has been focussed on these proceedings.

(k)      the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

1. There is no evidence about this issue.

(l)       the need to protect a party who wishes to continue that party's role as a parent;

1. The children are young but they have a wonderful relationship with their maternal grandparents and the wife has a great deal of support from that quarter.

(m)      if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;

1. But for the children, the wife lives alone. I have referred to the evidence about the husband’s cohabitation with Ms M.

(n)      the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;

(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

1. There is a modest child support assessment because of the husband’s income. The husband intends to take up paid employment. Hopefully that will lead him to be able to make a sensible financial contribution to the children.

(o)      any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. The wife’s parents have a wonderful relationship with the children and both the husband and wife report the contributions made by them to the children. The wife’s evidence about what her mother had done for her, in cross-examination on behalf of the Howatts, was to the effect: “What hasn’t she done? Pretty much everything. She helps me with everything with the kids, she has since they’ve been born.” Mrs Howatt says she helps with the children two days a week.

2. It is an agreed fact that Mr Howatt has a similar relationship with the children. Although not a contribution able to be recognised under section 79(4)(c) the maternal grandparents have greatly contributed to the care of C and L.

(p)      the terms of any financial agreement that is binding on the parties.

1. There was no binding agreement made between the husband and wife.

Section 79(4)(f)

1. I have referred to the parenting orders of 9 July 2009. There are no other relevant orders made under the Family Law Act 1975.

Section 79(4)(g)

1. As I have set out above, there is a nominal child support assessment.

Conclusion

1. There should be an adjustment in favour of the wife. She will have greater responsibility for the children and for the time being will not receive proper child support from the husband. On the other hand the wife will continue to be assisted by her parents. What would otherwise be a greater adjustment will be tempered because of that support. I will make an adjustment of 10% in favour of the wife.

Just and Equitable

1. The net assets (including superannuation) have a value of $580,148.98 ($612,755.36 - $32,606.38).

2. In order to faciliate a division 55% to her and 45% to the husband the net assets would be divided as to $319,082 to the wife and $261,067 to the husband. Of the assets and liabilities the wife has:

Assets	Value
Evans Solicitors Trust Account – wife	$28,928.59
Wife’s Macquarie Bank account	$163.21
NIB Shares – wife	$2,080
Toyota Kluger motor vehicle – wife	$12,000
Furniture and jewellery as valued by H Auctioneers - wife	$6,335
Wife’s Superannuation with ING	$15,967
Add Back interim distributions to wife	$87,800
NAB Visa used by Husband – wife	-$17,423
ANZ Visa used by Wife	-$6,431
Income tax assessed but unpaid- wife	-$1,080
Debt to Centrelink – wife	-$7,672.38
Total	$120,667.42

1. In order to bring the wife to 55% she would receive a further $198,414.58 from the invested funds. Of the assets the husband has the benefit of :

Assets	Value
Husband’s Superannuation with Integra as at 12 January 2009	$19,402
Camry Motor Vehicle – husband	$5,000
Furniture – husband	$740
Add Back interim distributions to husband ($102,800 - $15,000)	$87,800
Total	$112,942.00

1. In order to bring him to 45% he would receive a further $148,125. The invested funds may have been increased by interest since the hearing date. I will order that the balance be divided in the proportions 198,414 : 148,125 which I will round out to 57% to the wife and 43% to the husband.

Conclusion under Section 79

1. Forests were slaughtered in the course of preparation of these proceedings. I have found that the husband and wife have accumulated a modest pool of assets. In the normal course it would be unusual for the final hearing to extend beyond one day. The effective exercise of discretion under section 79 is frustrated if there is real doubt about the facts of the case – particularly about the current assets and liabilities, and the financial history of the acquisition and disposition of assets. Too many issues in this case were “not proven”.

2. Dealing with what I have been able to make findings about - significant contributions were made by each of the husband and wife. They acquired assets and provided a secure home for two children. In the course of a relationship spanning about 9 years and since, they shared the work of the family in different ways. The husband made the greater initial contribution and there needs to be an adjustment in favour of the wife. The orders I propose will effect a just and equitable settlement of their property.

I certify that the preceding one husband and eighty nine (189) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.

Associate: 

Date: 25 March 2010