Koca and Koca

FAMILY COURT OF AUSTRALIA

KOCA & KOCA

[2013] FamCA 209

FAMILY LAW – PROPERTY – CHILDREN – Where the parties are self represented – Where parenting proceedings were settled on the second day of the hearing – Where there is a modest property pool – Where the husband is in arrears of child support and where the court orders that this amount be payable to the wife as part of the division of the parties’ property – Where there is insufficient evidence to support that the parties have a liability to the husband’s sister –Whether the contributions of the parties were equal – Where a division of assets of 62 per cent to the wife and 38 per cent to the husband is ordered.

Family Law Act 1975 (Cth) ss 75 & 79

In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Omacini (2005) 33 Fam LR 134
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
In the Marriage of Coghlan (2005) 33 Fam LR 414
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
In the Marriage of Robb (1994) 18 Fam LR 489
In the Marriage of Pierce (1998) 24 Fam LR 377

APPLICANT:

Mr Koca

RESPONDENT:

Ms Koca

INDEPENDENT CHILDREN’S LAWYER:

Ms F Reid

FILE NUMBER:

SYC

6915

2009

DATE DELIVERED:

5 April 2013

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Sydney

JUDGMENT OF:

Loughnan J

HEARING DATE:

4, 5, 6, 7 and 8 March 2013

REPRESENTATION

THE APPLICANT:	In Person
THE RESPONDENT:	In Person
COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:	Ms Boyle

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:

Reid Family Lawyers

Orders

The parties shall forthwith do all acts and sign all documents to authorise Athena Touriki, solicitor, to disburse the funds held on trust by her for the parties as to:
(a) 62 per cent to the wife; and,
(b) The balance to the husband.
The court notes that $17,034.66 of the amount payable to the wife pursuant to 1(a) above, is referable to arrears of child support owed by the husband in respect of B and C.
The wife shall forthwith notify the Child Support Registrar of the terms of these orders and of the receipt by her of the payment pursuant to 1(a).
Other than as is provided in these orders each party shall otherwise retain to the exclusion of the other any real or personal property and superannuation interests standing within the power, possession or control of such party.
In the event that either party fails or neglects to execute any necessary document or to give any necessary authority or consent or any other act or thing necessary to give effect to any of the Orders herein with 14 days of being requested so to do in writing, then, the Registrar, or Deputy Registrar, of the Court shall be appointed pursuant to s 106A Family Law Act1975 (Cth) to execute any such document, authority or give such consent, direction or do any other thing necessary so as to give effect to the Orders herein for and on behalf of such defaulting party.
Leave is granted to either party to apply within 21 days, on notice to the other party to restore the proceedings before Loughnan J in relation to any agreed amendment to these orders or in relation to the wording of these orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Koca & Koca has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6915 of 2009

Mr Koca

Applicant

And

Ms Koca

Respondent

REASONS FOR JUDGMENT

Introduction

The marriage of Mr and Ms Koca involved them living together for nearly eight years. Despite settling the parenting arrangements for their daughters, they have not been able to agree on a property settlement. Although they are divorced I will refer to them as the husband and wife.

Applications

The applicant husband sought orders in accordance with his Case Outline emailed to my chambers on 27 February 2013:
Financial Orders:
(1)That Athena Touriki (the Trustee of the net proceeds of sale of the property known as [N Street, Suburb O]), (The Trust Fund) be ordered to pay to the Applicant's sister [Ms F] the sum of $99,768.00.
(2)That Athena Touriki pay to the Applicant Father the sum of $117,492.
(3)That Athena Touriki pay to the Respondent Mother the sum of $2,740, the balance of the Trust Fund.
(4)That the Applicant Father retain all of his superannuation entitlements and property currently in his possession.
(5)That the Respondent Mother retain all of the shares in public companies held in her name, all of her superannuation entitlements and property currently in her possession.
In relation to property settlement, by her Response filed 5 February 2010 the wife sought:
…
(4)That the property of the parties, after full disclosure has been provided, be divided as to 80% to the wife and 20% to the husband.

Written Evidence

The applicant relied on the following documents:
Affidavit of the husband sworn and filed 18 February 2013
Affidavit of Ms F sworn and filed 18 February 2013
Financial Statement of the husband filed 18 February 2013
The respondent relied on the following documents:
Affidavit of the wife filed 18 February 2013
Financial Statement of the wife filed 23 February 2010
Financial Statement of the wife filed 5 February 2013
Financial questionnaire filed 4 July 2011

The Hearing

The matter was listed for hearing parenting and property settlement proceedings over five days commencing 4 March 2013. By arrangement with the parties the single expert psychologist, Ms G was called first. Following the conclusion of her oral evidence the parties asked for time to discuss the parenting issues. Ultimately the parties settled a set of parenting orders and for reasons given at the time, on 6 March 2013 I made orders in terms of the parties’ agreement.
The ICL and her counsel were excused and the hearing resumed in relation to property settlement at about 12.30 pm on 6 March 2013. Submissions concluded on 8 March 2013 and judgment was reserved.

Short History

The husband was born in 1961 and, as at the date of hearing, he was 51 years of age. The wife was born in 1971 and, as at the date of hearing, she was 42 years of age. The parties commenced living together in June 2001, were married in 2002 and finally separated on 3 May 2009. The parties told me that they were divorced in the Federal Magistrates Court in 2011.

Background Facts

The parties assisted in settling a chronology based on that contained in the wife’s Case Outline. The following facts are either uncontested, agreed or substantially agreed.
The husband migrated with his family to Australia from the Middle East in 1968.
The husband married his first wife in 1989 and they were divorced in 1998. There is one child from that marriage, H who was born in 1993. He is currently 19 years of age. H has mainly lived with the husband and the parties since the breakdown of his parent’s marriage. He lived with the parties from 2001 to 2009, with the husband being his primary care taker.
The parties met in January 2001 and commenced cohabitation in June 2001.
At the commencement of cohabitation the husband was working as an office manager. The wife was working as a manager earning $628 per week.
The husband was residing in a two bedroom apartment at Apartment 1, I Street, Suburb J with H. The husband contends that the apartment had a value of $450,000 and that it secured by mortgage a debt of $285,000. The wife asserted and the husband denied that he also had an unsecured loan of $85,126. The husband contends that he also had a one third share in a business and freehold at Suburb J worth $350,000. He also held 30 per cent of the shares in his employer, K Pty Ltd.
The wife had approximately $24,000 in savings, some superannuation and no liabilities.
From October 2001 the wife commenced depositing her wages into the husband’s bank account.
Between 2001 and 2009 H lived with the parties. The agreed chronology has the husband as H’s primary care taker. That is puzzling as the chronology was drafted by the wife and yet it was my understanding that albeit that there was no admissible evidence on that issue, the wife intended to criticise the husband’s parenting of H.
The wife alleged that between 2001 and 2009 the husband spent $530,000 of the parties’ assets gambling. However, the wife also stated that she was unaware of the amount spent during the marriage.
The wife alleged that in mid 2002 the husband told her to purchase a Put and Call option for Apartment 2, I Street, Suburb J.
In mid 2002 the husband organised a Put and Call option for his sister Ms F, in respect of Apartment 3, I Street, Suburb J.
The parties were married in 2002.
In June 2003 the husband sold Apartment 1, I Street, Suburb J for $490,000 and purchased Apartment 4, I Street, Suburb J for $500,000.
The wife took leave from her place of employ.
B was born in July 2003. Following B’s birth the wife stayed at home full time to care for the child.
In August 2003 the husband sold the wife’s Apartment 2, I Street, Suburb J. The wife asserted that the parties cleared $84,000. The wife purchased Apartment 3, I Street, Suburb J with the husband’s sister (Ms F) for $368,000. The wife asserted that she contributed $84,000 towards the purchase and that the husband’s sister contributed $18,400. The husband’s sister thereafter resided in the property with her two children.
The wife alleged that from August 2003 she made all the monthly mortgage repayments and paid other house costs such as strata levies and water rates. The wife concedes that Ms F paid regular amounts to the husband. It is the husband’s case and the evidence of Ms F that she paid $1,100 per fortnight, in cash to the parties or one of them, for the mortgage payments.
Between 2002 to 2004 the husband completed a business course and received a Business Licence. Between 2003 and 2004 he set up L Pty Ltd. The husband purchased a motor vehicle for the company.
On 19 May 2004 the husband purchased two investment properties in Suburb M with the mortgage over the properties being in the sum of $1,007,000. The loan was cross-collateralised so that the parties’ home was used as additional security.
In mid 2004 the wife was made redundant and she received approximately $10,000 in a redundancy payment.
In July 2004 the husband’s employment was terminated by his employer K Pty Ltd. The husband commenced proceedings in the NSW Supreme Court against his business partner.
Between July 2004 and July 2007 the husband did not have paid employment.
The husband commenced gambling at the Casino and overseas. The husband attended the Casino up to five times per week. The wife alleged that he was playing at least five days a week and often would not see the children for several days at a time.
In March 2005 C was born.
In April 2005 the husband sold Apartment 3, I Street, Suburb J, owned by his sister and the wife for $470,000 and purchased in their joint names Apartment 6, N Street, Suburb O for $468,000. The husband’s sister and her two children then resided in that property.
In May 2005 the husband sold the marital home (Apartment 4, I Street, Suburb J) and purchased Apartment 7, N Street, Suburb O for $540,000.
The wife stated that between 2005 and 2008 the parties lent the husband’s sister approximately $70,000 towards her share of the deposit, stamp duty, mortgage repayments, strata and council rates, utility and credit card bills and the purchase of a new car. The husband does not agree.
All mortgage repayments were made from the wife’s personal bank account each month.
On 20 January 2006 the husband caused a property at P Town to be transferred into the wife’s name. It was unencumbered and was valued at $320,000. The husband sold the P Town property in June 2006 for $340,000. As I understand the husband’s case, the P Town property represented part of the settlement of the Supreme Court proceedings.
In 2007 the husband set up Q Pty Ltd.
In August 2008 the wife recommenced working part time for her previous employer, earning $600 per week.
In August 2008 the wife asserted that the husband told her that he was selling the investment property she owned with his sister as his sister made an agreement under the Bankruptcy Act earlier that year and failed to disclose she owned property. The husband’s solicitor advised him that the property had to be sold. The husband sold the property for $545,000. The wife asserted that the net sale proceeds of $205,000 were disbursed and that she received $50,000. The wife stated that the remaining funds were disbursed to the husband’s friends and business and personal accounts held by him.
In November 2008 the parties separated for one week.
In November 2008 the husband left Australia to gamble overseas for one week.
On 7 March 2009 the parties separated under one roof. The husband moved H out of the former matrimonial home and into his parents’ home.
From 3 to 10 April 2009 the husband left Australia to gamble overseas.
On 3 May 2009 the parties separated when the husband left the former home. He lived at the home of his parents while they were overseas. The wife alleged that H returned to live with her at the former matrimonial home. The husband says that happened later.
On 9 June 2009 the husband acknowledged that the wife and H were “getting along fine” and that “there is no denying that [H] appreciates what you do for him and knows that you truly love him.”
The wife alleged that from July the husband told her that he could no longer afford the mortgage instalments.
On 6 July 2009 the husband removed H from the home for the last time and sent him to live with Ms F at Suburb J. The husband remained at his parents’ home in Suburb R.
On 10 August 2009 the husband told the wife that a Suburb S property could not be sold and so Q Pty Ltd could not be paid for that development.
On 20 August 2009 the husband told the wife that his monthly expenses were $10,000.
On 23 August 2009 the husband told the wife that he was moving into a rental property at Suburb T with his sister, Ms F, her children and H.
Between 21 August and October 2009 the husband received $150,000 in commissions from the Suburb S apartment complex sold by Q Pty Ltd.
On 14 September 2009 the husband moved into the Suburb T property.
In October 2009 the wife asked the husband for an undertaking that he would not disburse the proceeds of the sale of the business and freehold. According to the wife, the husband was to receive $150,000, being one third of the equity. The husband contended that his ultimate share of the equity was about $109,000.
On 16 October 2009 the husband provided the undertaking not to disburse the proceeds of the business and freehold “without the wife’s consent or a court order”.
On 16 November 2009 the husband filed an Initiating Application.
On 2 December 2009 the husband suffered a heart attack resulting in admission to hospital.
On 4 December 2009 the AVO proceedings were stood over until 11 January 2010 as the husband was in hospital.
On 8 December 2009 the husband sold a second investment property at Suburb M. $16,657 of the proceeds were distributed to Mr U. The husband said that Mr U was a silent partner in the property.
On 23 December 2009 the husband’s solicitor, Paul Marsh produced a copy of a Joint Venture (agreement) dated 1 June 2005 between the husband and W Pty Ltd (his friend, Mr U’s family business) as proof that Mr U was a 50 per cent partner). The agreement was prepared by Paul Marsh on 5 October 2009.
On 13 January 2010 the husband told the wife that he was in arrears of mortgage payments and would be instructing the mortgagee to initiate a mortgagee sale.
On 14 January 2010 the husband started to disburse the proceeds of sale of the business and freehold. The wife asserted and the husband denied that he did so without telling her.
On 5 February 2010 the wife filed her Response to the Initiating Application.
On 5 March 2010 Consent Orders were made by FM Scarlett providing for equal shared parental responsibility for long term decisions and sole parental responsibility for day to day decisions while the children are in their respective care. The orders provided for the children to live with the wife and spend time with the husband: alternate weekends from 3.00pm Friday till 3.00pm Sunday and each Wednesday from 3.00pm till 6.30pm. Changeovers were to be at Suburb T outside Woolworths. The orders provided for the children to have their own room (together), for communication between the parties by SMS and email and removal of the children if they are subjected to denigration while in either of the party’s care. Notations acknowledged that the question of the husband’s time during holidays and special days remained unresolved. The husband was to take the children to parties and activities while they are in his care and to notify the wife if he intends to be away overnight.
Between March and October 2010 the wife requested that the Child Support Agency collect payments on her behalf. The husband was assessed at $5,000 per year based on his 2009 tax income of $59,000.
On 19 April 2010 the husband made a $14,000 repayment on one of his credit cards. As at that date the mortgage payments were not made as the husband claimed he had insufficient funds.
On 21 April 2010 FM Scarlett made orders for financial disclosure.
On 17 May 2010 the husband did not produce any documents to evidence a loan agreement with his sister, Ms F. The husband said that there were no such documents.
On 23 June 2010 orders were made by FM Scarlett transferring the matter to this Court.
On 12 October 2010 Johnston J made Interim Property Orders by consent in the following terms:
(1)That the wife be appointed trustee for the sale of the property known as [Apartment 7, N Street, Suburb O] and identified by folio identifier … (“The [Suburb O] property”) and for that purpose the property vest in the wife.
(2)That within three (3) days of the making of these orders the wife list the [Suburb O] property for sale for the best price reasonably obtainable and distribute the sale proceeds in the following manner:
2.1In payment of the costs of and incidental to the sale including but not limited to Real Estate agents commission, selling costs, outstanding rates and strata levies and legal costs associated with the sale;
2.2In payment of the amount required to discharge the St George Bank loan secured by mortgage on the [Suburb O] property including any legal costs incurred by St George Bank referrable to enforcement of payment of the loan.
2.3The balance to be held on trust for the parties by the solicitor acting on the sale and pending further order each party be restrained from making any withdrawals from the trust fund.
(3)That pending the sale of the property pursuant to these orders each party shall be and hereby is by injunction restrained from further encumbering the property or disposing of an interest in the property other than in accordance with these orders.
(4)That the wife shall forthwith provide evidence of the listing of the property to the mortgagee, it’s solicitor and the husband within three (3) days of the making of these orders.
In October 2010 the husband paid child support at the previously assessed rate of $205 per month and not the required rate of $1,271 per month. On 7 October the husband’s annual child support income was assessed at $120,000.
On 27 November 2010 the former marital home was sold for $625,000 with completion occurring on 31 January 2011. The net proceeds of sale in the sum of $213,000 were placed in a trust fund held by solicitor, Athena Touriki.
In January 2011 Mr Y resigned as a director of Q Pty Ltd. Mr X was appointed a director and took a 35 per cent shareholding in the company. The husband increased his shareholding to 65 per cent.

In April 2011 the husband appeared in an article in an on-line magazine “Sold”. He was described as one of the most successful property marketers. In the article the husband said he had just completed sales of projects in a number of suburbs.
In November 2011 the husband and his sister, her two adult children and H move into a rental property at Z Street, Suburb T.
On 20 December 2011 the wife told the husband that she was experiencing hardship due to the costs of the children’s psychologists. The husband was by then in arrears of child support by about $17,000.
On 4 July 2012 Orders were made setting the matter down for hearing and providing trial directions.
In July 2012 the husband entered four gambling tournaments and won $17,822. The wife asserted and the husband does not accept that he paid $3,960 to enter those tournaments.
On 28 December 2012 the husband advised the wife via email that he had moved residence to AA Street, Suburb BB residing alone while H remained residing with his aunt and cousins. It is the husband’s evidence that the Suburb BB property is owned by a friend and client of his, Ms CC, and that she has said that he may remain in the property, without making any financial contribution, for at least 12 months. The husband says that the arrangement with Ms CC involves him overseeing some final work on the property. The property was bought for $1,450,000.
As at the time of the hearing the husband’s child support arrears stood at about $17,034.66. The husband said during his cross-examination that the arrears could be paid out of the parties’ property settlement.

Credibility

The credit of the witnesses assumes particular importance in these proceedings because many of the issues fall to be determined without the benefit of contemporaneous written records, or indeed any written records. The other problem is that the parties’ arrangement during their marriage left much of the financial and business dealings entirely within the control of the husband. It is the wife’s case that she simply does not know much about the financial history and dealings of the marriage. I understand that the husband challenges that contention but there it is.
The husband gave his evidence directly and without affect. On some issues he put his own interpretation on matters. Rather than there being arrears of child support, he would have it that the child support registrar issued a new assessment which thereby created a debt, which he is paying off. Provided the sequence of events is accurate, that is not an unreasonable representation of the facts. The husband was a little coy about matters to his disadvantage. He conceded that he had made unfortunate references to the wife in the presence of the children. He may have called her an idiot. He may have called her a fucking idiot. However he cannot with certainty recall any particular offensive reference or statement. Albeit that the parties have not communicated directly in some years it stretches credulity that the husband cannot recall any particular terms used. Ultimately the evidence in relation to parenting matters was not needed but this reveals that the husband sought to dissemble in testimony about matters to his disadvantage. During her cross-examination of him, the husband was somewhat dismissive of the wife’s questions. That said, I am not required to find that the husband was an unreliable witness.
The husband’s sister Ms F was a poor witness. That arose mainly because she was not involved in the detail of much of financial connection between herself and the parties. She said that she left that to her brother. Therefore she does not have independent knowledge of the significant events and transactions in that connection. She was not very careful in giving her evidence. For example, when pressed by the wife in cross-examination about a particular American Express account into which $19,000 of the proceeds of sale of a property were paid, she agreed that the account was hers. It transpired subsequently that the account in question was that of her brother, the husband.
The wife was a poor witness. Again that mainly arose from the fact that she was not involved in the detail of the family finances. She said that she left much if not all of the finances beyond the day to day household budget, entirely to the husband. The wife was at times argumentative while giving her evidence. It transpired that much of the wife’s case arose because she did not know what happened and assumed the worst. Thus hundreds of thousands of dollars drawn on an ATM at premises licensed for gambling became, in her mind, gambling losses.
The result of those observations is that there are few issues that can be resolved on the basis of credit findings. Where there are no adequate records, it is only the husband who asserts that he is able to give reliable evidence about various transactions. He was not entirely candid but I do not find that he was an unreliable witness.

Property Proceedings

The approach in proceedings under section 79

The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79, involving four inter-related steps. First, I make findings as to the identity and value of the property, liabilities and financial resources of the husband and wife at the date of the hearing. Second, I identify and assess their contributions within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the husband and wife expressed as a percentage of the net value of the matrimonial property. Third, I identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant; and determine the adjustment (if any) that should be made to the contribution based entitlements established at step two. Fourth, I should consider the effect of those findings and determinations and identify orders that are just and equitable in all the circumstances of the case.[1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in
There is no mention of steps in s 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.[2]
[2] In the Marriage of Hickey above.

The Issues

As the proceedings developed, the husband contended for the following assets and liabilities:

Assets and liabilities

Value $

Net proceeds of sale of Apartment 7, N Street, Suburb O $220,045.31[3]

Shares held by the wife in public companies[4] $38,400

Wife’s MLC superannuation $40,000

Husband’s AMP superannuation (approximately) $1,000

Minus the parties’ liability to Ms F -$99,768
[3] During submissions the parties told me that the advice from Ms A was that after fees of $3,024 the fund would stand at $220,045.31.
[4] The husband initially contended that the shares were worth about $123,440. The wife asserted and the husband did not cavil with the fact that under a share consolidation arrangement the wife’s 60,000 shares in DD Pty Ltd had become 4,000 shares. On his calculations that took those shares from $91,200 to $6,160.

The husband argued that contributions favoured him 80 per cent compared to 20 per cent by and on behalf of the wife. He contended that the ultimate distribution of the net pool of assets should favour the wife 60 per cent compared to 40 per cent to him. It follows and he confirmed that there should be an adjustment of the outcome warranted by contributions alone, of

40 per cent in favour of the wife.

The wife contended for the following pool of assets:

Assets and liabilities

Value $

Net proceeds of sale of Apartment 7, N Street, Suburb O $220,045.31

Shares held by the wife in public companies $38,400

Wife’s motor vehicle $1,000

Wife’s MLC superannuation $36,000

Husband’s AMP superannuation (approximately) $1,000

Husband’s motor vehicle A $NK

Husband’s motor vehicle B $25,000

Proceeds of sale of business and freehold not accounted for by the husband $150,000

Proceeds of sale of an investment property paid to Mr U $16,657

Total $488,102.31

The wife argued that contributions to that pool were equal but that the ultimate distribution of the net pool of assets should favour her at 80 per cent compared to 20 per cent to the husband. Therefore she argued that there should be an adjustment of the outcome warranted by contributions alone, of 30 per cent in her favour, largely because the children live mainly with her and therefore she cannot work full-time.

Pool

The parties do not agree about the following matters:
(a)      the value of the wife’s motor vehicle;
(b)      the value of the wife’s MLC superannuation;
(c)      the value of the husband’s AMP superannuation;
(d)the inclusion of the husband’s motor vehicle B and the value of that vehicle;
(e)the inclusion of motor vehicle A as an asset of the husband and the value of that vehicle;
(f)the inclusion of $150,000 in the hands of the husband for the value of his interest in the proceeds of the 2009 sale of the business and freehold;
(g)the inclusion of a notional amount in the hands of the husband for an amount paid to Mr U from the sale of an investment property; and
(h)the existence of a debt owed by the parties to the husband’s sister.

Contributions

The husband argues that his contributions exceeded those of the wife in the proportions 80 per cent compared to 20 per cent by and on behalf of the wife. The wife contends that the contributions were equal. I accept that the parties’ contentions were probably based on the pool of assets they each argue for.

Adjustments

The parties agree that there should be an adjustment to the wife. The husband says there should be a 40 per cent adjustment and the wife says 30 per cent. Again, it is likely that those arguments rely to an important extent on the findings made about the net pool of assets and contributions.

The property of the husband and wife at the date of the hearing

The Court is required to make a finding as to the property of the husband and wife. That involves identifying assets, liabilities and financial resources and their values.
There are circumstances whereby assets can be included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30]To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c)In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.”
Here the wife sought to have added back to the balance sheet, two amounts for which she asserted the husband has not adequately accounted. Those amounts are $150,000 from the sale of the business and premises and about $16,000 paid to a friend of the husband on the sale of an investment property. I will deal with those matters below.
The wife also alleges that between 2001 and 2009 the husband spent $530,000 of the parties’ assets gambling. As the case was finally argued the wife did not seek to add that sum or any sum for gambling losses, into the balance sheet. I suspect that this issue prevented the parties reaching a property settlement during the life of the proceedings. On the evidence presented, the wife would not have been able to make that case. As the wife deposed in her affidavit, she was unaware of the amount spent (on gambling) through the marriage.
There is a level of agreement about the assets. As to the disputed items:

(a) the value of the wife’s motor vehicle;

The wife has a 1990’s model 4WD motor vehicle. There is no formal valuation evidence. The wife has the vehicle at $1,000 in her latest Financial Statement. I will include it in the pool of assets at that value on the basis of her estimate of value.

(b) the value of the wife’s MLC superannuation;

Nothing from the MLC as to the value of the wife’s superannuation was put into evidence. The wife asserted that her interest had a value of $29,433.26. There was no cross-examination about this issue. I understood the husband to say that he thought there had been two funds. I understand from something the wife said that two funds had been consolidated into the one MLC fund she now has. I will include the wife’s superannuation at $29,433.26. I did not understand the husband to object to that course.

(c) the value of the husband’s AMP superannuation;

A statement from AMP dated 1 August 2012[5] had the husband’s interest at $1,104.76. I will include his superannuation at that figure.
[5] Exhibit 4.

(d)the inclusion of the husband’s motor vehicle A and the value of that vehicle;

A used prestige motor vehicle was bought by Q Pty Ltd about six years ago. The wife contends that it should be included in the list of assets at $25,000 on the basis of the husband’s evidence in a Financial Statement earlier in the proceedings. The husband said, without complaint or challenge on behalf of the wife, that the vehicle is still owned by Q Pty Ltd. The husband concedes that he included it in an earlier Financial Statement albeit that it then was the subject of a lease and so there was a balancing debt. The husband contends, apparently on the basis of enquiries he has made, that the car is worth about $8,000. He contends that as he owns 65 per cent of Q Pty Ltd, that the vehicle should be included at $5,000. It is not argued that Q Pty Ltd itself should be included at any particular value. There is no formal valuation evidence in relation to the vehicle.
On the basis of the approach taken above in relation to the wife’s vehicle, I will include this motor vehicle at $5,000 on the basis of the husband’s evidence.

(e)the inclusion of motor vehicle B as an asset of the husband and the value of that vehicle;

It is common ground that in about 2003 the husband set up L Pty Ltd. The company bought a motor vehicle. Without challenge or complaint, the wife asserted that although the business paid the costs associated with the vehicle, since about November 2008, one of the husband’s nieces has had the exclusive use of the vehicle. There is no formal valuation evidence in relation to the vehicle.
There is no evidence that L Pty Ltd has any value. It is the unchallenged evidence of the husband that L Pty Ltd no longer trades. The value of the vehicle agreed for insurance purposes in January 2010 was $12,000.
The facts are suggestive but on balance, I will not include this vehicle in the pool of assets. A step (providing the vehicle to the husband’s niece) was taken during the marriage. The wife could have had input to that decision. Revisiting decisions made during cohabitation is not among the scope or purposes of s 79.

(f)the inclusion of $150,000 in the hands of the husband for the value of his interest in the proceeds of the 2009 sale of a business and freehold premises;

The wife claims that the husband was entitled to $150,000 from the 2009 sale of this business and premises. The evidence relied on to support that contention is the bare representation of the husband in a Financial Statement prior to the sale, that the value minus the associated debt was $450,000 and that therefore his interest had a value of $150,000. In addition, the wife points to the settlement papers[6] drawn by the husband’s solicitor, Paul Marsh. Those papers show that the net sale proceeds going to the owners of the business, Ms EE and Mr FF was $450,281.54.
[6] Annexure 41 to the wife’s affidavit.
It is the husband’s evidence that he had a one third beneficial interest in the business and received $109,393 from the sale. It is his evidence that $123,000 was paid in Capital Gains Tax on the sale. That, he said, accounted for the reduction by the order of $41,000 of his share of the net proceeds. The husband’s St George Bank statement[7] shows a deposit by cheque of $109,393 on 14 January 2010. It transpired from cross-examination of the wife that Ms FF was and remains a friend of the wife. The wife was asked in cross-examination why she had not satisfied her concerns about this issue by asking Ms FF and she said that she did not want to ask Ms FF as she is recovering from cancer. The husband asked the wife why she did not ask Ms FF about the issue before she fell ill and the wife said that she chose not to.
[7] Annexure L to the husband’s affidavit.
On those facts I cannot find that the husband received $150,000 from the 2009 sale of the business.
The wife seeks that $150,000 be added back, not $109,393. However, as to the fate of $109,393, the husband provides a summary[8] of the payment of liabilities over the first four months of 2010. The summary was made by the husband and I was not taken to the source documents. That said, the summary was not objected to. This matter is complicated by the fact that the husband gave an undertaking not to disburse the proceeds of the sale of the business without the consent of the wife or an order. The undertaking was proffered in a letter between solicitors dated 26 October 2009. Albeit apparently given inter partes, it is nevertheless important to note that the husband breached that undertaking. It is clear that the husband sought the wife’s consent to disburse the proceeds. For example, he wrote to the wife’s then solicitors on 24 December 2009.[9] It was wrong and high handed of him to breach the undertaking but in my view that is not the end of the matter. There remains a discretion to exercise.
[8] Annexure M to the husband’s affidavit.
[9] Annexure G to the husband’s affidavit.

For obvious reasons, the task under section 79 is to make an adjustment of property interests that exist on the day of the hearing. Although allowance can be made as is discussed in Omacini above, great care is needed in including in the relevant net pool of assets, property and debts that no longer exist. Funds applied to joint liabilities or normal living costs are not normally added back to a list of assets, as if they had not been expended.
Apart from the vexing circumstance of the breach of undertaking, the wife can do no more than make the allegation. It is the husband’s case that his share of the profit from the sale of the business and premises was $109,393 and that those funds became part of the family finances and were applied long ago to family purposes. His bank statement supports part of that contention. Further, it is common ground that neither of the parties had paid employment for about five years. It is also common ground that mortgage payments were made and outgoings were paid on the former matrimonial home and on two investment properties. It is common ground that H’s private school fees were paid and the living expenses in the joint, and later separate households were met. Those expenses had to be met from somewhere. Finally, it is common ground that the husband had the first of his heart attacks in December 2009.
It falls to the wife to establish that the claimed amount should be included in the list of assets. She is not able to make the case. There will be no such inclusion.

(g)the inclusion of a notional amount in the hands of the husband for an amount paid to Mr U from the sale of an investment property; and

The wife claims that $16,657 paid to Mr U on the sale of an investment property was a diversion of matrimonial funds. There is no evidence to support that contention. It is the husband’s case that his friend Mr U was a silent partner in the project. It is the husband’s evidence that Mr U is the principal of W Pty Ltd. The husband and W Pty Ltd entered into a Joint Venture Agreement[10] on 1 June 2005. The wife said something to the effect that she doubted the bona fides of the Agreement because it was entered into after the initial purchase referred to in the Agreement; the invoice from the solicitor for drawing the agreement was dated some years after the agreement; and in any event the agreement was with W Pty Ltd and there was no evidence that Mr U was the principal of that company. As to the last issue, it is the wife’s own evidence[11] that Mr U is an employee of W Pty Ltd. It is somewhat disingenuous of the wife to question the link between Mr U and W Pty Ltd. The husband was asked about these matters and said that his friend and solicitor (Paul Marsh) invoiced him at various times and often well after the service in question was provided.
[10] Annexure 44 to the wife’s affidavit.
[11] Paragraph 256 of the wife’s affidavit.
It falls to the wife to establish that the claimed amount should be included in the list of assets. She is not able to make the case. In any event these transactions occurred long ago and during the marriage. There will be no such inclusion.

(h)the existence of a debt owed by the parties to the husband’s sister.

The husband and Ms F allege that the parties owe Ms F $99,768. The evidence about the existence of the alleged debt is found in the affidavits of the husband and his sister, Ms F. All three witnesses were cross-examined about this issue.
In summary, Ms F deposed to having $30,000 after a property settlement with her husband. The settlement was effected in Turkey and it is her evidence that she brought $30,000 with her when she returned to Australia with her daughters in 2001. Ms F also deposed that the husband suggested that she invest in an apartment in a development he was working on. It is her evidence that she went with the wife to the offices of GG and Associates solicitors and signed a contract to purchase a two bedroom apartment at Apartment 3, I Street, Suburb J for $368,000. In fact the endorsement of the letter from those solicitors dated 15 August 2003 to the wife and Ms F suggests that Ms F may have signed an agreement giving her an enforceable right to buy the apartment in the future at a certain price (a Put and Call). The thrust of her evidence is that she gave the husband $30,000 but cannot recall whether it was in one or two payments. She said that the husband told her in mid 2003 that the apartment in question was finished and that he could arrange to sell her interest in it. She asked the husband if there was a way she could live in the apartment with her daughters. The husband could not arrange the necessary finance for her so she could buy the property but proposed that he would buy the property with her. The husband would put in $30,000 to match her initial investment. Ms F deposed that she discussed this proposal with the husband and wife. She deposed that it was agreed she would live in the property and pay the mortgage payments and the husband would pay the other costs of the apartment and that on sale, she would receive 50 per cent of the proceeds and the balance would go to the husband and wife. Ms F does not say who she made that agreement with.[12]
[12] Paragraphs 27 and 28 of the affidavit of Ms F.
It is common ground that the apartment was bought by the wife and Ms F. Ms F and her daughters lived in the apartment. It is common ground that Ms F paid money to the husband and that the mortgage instalments and the other outgoings were actually paid from the wife’s bank account or otherwise by the parties. The wife said that she received no money from Ms F but that she knew that her husband did receive money from his sister. The husband and his sister said that she paid $1,100 per fortnight, in cash, to the husband or to the wife.
In April 2005 Ms F and the wife sold the apartment for $470,000 and bought Apartment 6, N Street, Suburb O for $468,000. Ms F deposed that this was at the husband’s suggestion and that the new apartment was in another development associated with the husband. She says that the husband and wife told her that the same arrangement would apply to the new apartment. I understand that to mean that Ms F would live in the apartment; she would pay the mortgage instalments and receive 50 per cent of the net proceeds of sale.
Again Ms F and her daughters lived in the apartment. She says that she continued to pay $1,100 a fortnight towards the mortgage payments.
Apartment 6, N Street, Suburb O was sold in October 2008. The net proceeds of sale were $198,536. The assertion made by the husband and Ms F is that she is entitled to one half of that sum. Ms F deposed that the parties asked her to lend them her half share of the N Street apartment. The husband deposed that he asked his sister to lend him and the wife, her half share of the proceeds of sale of the unit. The husband does not assert that the request was made by or in the presence of the wife.
The husband and Ms F assert and the wife denies the existence of a loan made by Ms F to the parties. The issue became caught up in the parties’ proceedings and the proceeds of sale of the parties’ former matrimonial home, also in N Street, were ordered to be held in a trust account, in part to await the resolution of this claim.
There is no written evidence of the asserted agreements between the parties and Ms F. There are no financial or other formal records evidencing Ms F investing $30,000 in Apartment 3, I Street, Suburb J. There is no evidence to suggest that the financial injections by the parties and Ms F, including the payments towards the mortgage and the other outgoings were such as to warrant an equal division of the net proceeds of the sales of either property. There is no independent evidence to confirm the frequency or amount of payments made by Ms F to the parties or either of them.
In his affidavit the husband does not assert that the wife was a party to the agreements that he says, created the alleged loan. Ms F’s evidence on that issue is vague. She deposed:
(42)At this time, [Mr Koca] and [Ms Koca] asked if I would lend them my ½ share of the profits ($99,768) from the sale of the property in [Suburb O].
It is odd that the evidence of the husband and his sister about who sought the loan, is different. The effect of Ms F’s evidence in cross-examination was that she left any arrangements to her brother.
The wife denies any such agreement. It is the wife’s evidence that in 2003 she agreed to sell Apartment 2, I Street, Suburb J and to purchase Apartment 3, I Street, Suburb J with Ms F. She said that she made that agreement in order to help Ms F. The wife’s contention is that the initial financial contributions were not equal, with her investing $15,000 and $69,000 and Ms F paying only about $18,000. The wife says that she understood that the husband would keep a track of the imbalance of funds invested and the parties would later be reimbursed.
The wife cannot support her contention that she or she and the husband invested $84,000 ($15,000 plus $69,000) in the 2003 purchase of the apartment. The statement of account[13] put into evidence by the wife shows that in relation to the sale and the purchase of the apartments, $407,026.50 was paid out for the purchase and other payments. That was funded as to $338,026.50 by a mortgage advance and by $69,000 for the Assignment Fee. That last reference is presumably why the wife contends that she contributed that sum to the purchase of Apartment 3, I Street, Suburb J. The problem is that not all of the $407,026.50 found its way into this apartment. The same statement of account shows that the $407,026.50 was disbursed as follows:

[13] Annexure 39 to the wife’s affidavit.

Outgoing

Amount

To settle the purchase of the apartment

$335,075.57

Stamp duty

$12,054.00

L.J.Hooker Property Source

$16,236.00

Costs and disbursements

$4,306.39

Amount paid to the wife

$39,354.54

Total

$407,026.50

The settlement sheet[14] for the purchase shows that, ignoring the adjustments on sale, the purchase price was met in the following way:
[14] Also part of Annexure 39 to the wife’s affidavit.

Purchase price

$368,000

Minus Security sum

-$15,000

Minus Deposit paid

-$18,400

Mortgage

$334,600.00

Handwriting on the statement has the wife’s maiden name against the security sum from the first apartment and the former married name of Ms F endorsed against the deposit. The husband said that he made those handwritten endorsements.
On the basis of those documents the funds that made up the shortfall in the purchase price after the mortgage were $15,000 by the parties and $18,400 by Ms F. The wife cannot establish that she contributed $84,000 ($15,000 + $69,000) to the purchase of the apartment. Without further explanation, one would assume that the payment to L.J.Hooker Source of $16,236 related more to the sale of the first than to the purchase of the second. Agent’s commission, if that be what the payment addressed, would arise for a vendor and not a purchaser. There is no indication or suggestion that the $39,354.54 paid to the wife found its way into the new property. At best, the wife could claim that she contributed $15,000 towards the purchase price and paid all of the costs of the purchase – about $16,500 in stamp duty and costs. Even then, although she could not give evidence of how the payment or payments were made up, Ms F was not shaken in her evidence that she gave $30,000 to her brother for the purchase. That could account for both the deposit and the stamp duty paid on the purchase.
On that evidence it is not possible to find for the purposes of these proceedings that the parties owe Ms F $99,768 or any sum. That may not be the end of the matter between the parties and the husband’s sister. For his part, the husband acknowledges a debt and I was given to understand that he feels a moral obligation to his sister. On the evidence presented to me it seems unlikely but if other evidence comes to light then there may be a basis for a claim elsewhere, made directly against the wife.

Child support arrears

It is an agreed fact that the husband is in arrears of child support. As at 4 February 2013 the debt stood at $17,034.66.[15] Of course this debt cannot be included in the liabilities going to make up the net pool of assets for division as to do so would change the character of the obligation. However, the husband agreed to me making provision for settling that debt in the orders made in these proceedings and I shall do so.
[15] See annexure 47 to the wife’s affidavit.
I find that the assets and liabilities are:

Assets and liabilities

Value $

Net proceeds of sale of Apartment 7, N Street, Suburb O $220,045.31

Shares held by the wife in public companies[16] $38,400

Wife’s motor vehicle $1,000

Wife’s MLC superannuation[17] $29,433.26

Husband’s AMP superannuation (approximately) $1,104.76

Total $289,983.33
[16] The husband initially contended that the shares were worth about $123,440. The wife asserted and the husband did not cavil with the fact that under a share consolidation arrangement the wife’s 60,000 shares in DD Pty Ltd had become 4,000 shares. On his calculations that took those shares from $91,200 to $6,160.
[17] Subject to seeing a current balance.

There are no relevant liabilities.

Net assets

The net assets have a value of $289,983.33. Of that, $30,538.02 is in the form of superannuation and the balance is in the form of non-superannuation assets.

Financial Resources

There is no evidence of financial resources.

Contributions

The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets.[18] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties to the marriage in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties.[19]
[18] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1.
[19] In the Marriage of Shewring (1987) l2 Fam LR 139.
As to whether the Court should apply the considerations in s 79(4) to the assets globally or asset by asset, the authorities have it the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See 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.
In the Marriage of Coghlan (2005) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests at [61] that:
… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.
Here the case was argued on a global basis and I will take the same approach.

Section 79(4)(a) Contributions

Financial contributions, both direct and indirect were made by each of the husband and wife.
The wife alleges that between 2001 and 2009 the husband spent $530,000 of the parties’ assets gambling. As the case was finally argued the wife did not seek to argue that the husband wasted money gambling. As I understand it, for her original allegation the wife relied on her own calculation of withdrawals made by the husband at ATMs at premises licensed for gambling. While bank records were annexed to the wife’s affidavit, the wife was not able to introduce into evidence her summary of aspects of those records, nor did she secure the husband’s concession as to her conclusions. The wife acknowledged that she did not consider deposits made to the relevant accounts. Again, it was as perhaps well that the wife did not try to make that case as it was inconsistent with the background facts. To labour the point, each of the parties had no income from paid employment for about four years. Notwithstanding that fact, they met mortgage payments, maintained investment properties, paid school expenses and kept the family, at first in one household and then two. It is not apparent how they could have achieved that feat while also losing a half a million dollars from the families’ wealth through gambling. Even with the sale of properties, it is remarkable that the parties were able to make ends meet.
There is a dispute as to the initial contributions by the husband. There is no evidence other than that the wife came into the marriage with savings of about $24,000 and $18,000 in a superannuation interest. On her own evidence there is a case for arguing that she had more than $24,000 as she contributed to a project and retained about $24,000 in savings after that time. However, she does not seek to make that case and I accept her evidence that she had savings of the order of $24,000 at the commencement of cohabitation.
It is the husband’s case that he came into the marriage with:
·    Apartment 1, I Street, Suburb J which he says had a value of about $350,000 and was encumbered as to $275,000. That property was sold in 2003 and the husband cleared about $200,000.
·    A one third interest (with Ms EE and Ms FF) in a freehold and business in Suburb J which the husband contends had a value of $180,000 (valued at $1,000,000 - a mortgage $450,000 ÷ 3). The sale of the business settled in October 2009. The husband was ultimately paid $109,393 which he paid into his bank on 14 January 2010.
·    An interest in K Pty Ltd which share, the husband estimates, had a value of $300,000 at the commencement of cohabitation. The interest resulted in a settlement of Supreme Court proceedings between the owners of the business under which the husband received a property at P Town, which was sold in 2006 for $340,000; and a payment or a series of payments totalling $120,000. The husband paid $200,000 in legal costs in the course of those Supreme Court proceedings. Thus on his case the net benefit of him bringing his interest in K Pty Ltd to the marriage was ultimately about $260,000.
The wife does not agree with the husband’s representations.
The wife does not agree that the husband had any equity in the property at Apartment 1, I Street, Suburb J. She contends that in addition to the mortgage, the husband also owed $85,000. There is evidence of such a debt two years before but nothing as at the commencement of cohabitation in 2001. On that basis I cannot find that there was such a debt.
As to the husband’s interest in the business and freehold I refer to the discussion and findings earlier in these reasons in relation to the pool of relevant assets. The husband says that he had his interest in the business when the parties met. The wife says she does not know whether that is so or not. I accept the husband on this issue. It probably does not matter because this was a contribution by the husband whether an initial contribution or one made early in the marriage. Ultimately there is no real dispute that the interest resulted in a payment of about $109,000 to the husband.
The wife does not dispute that the P Town property came into the marriage, (probably because it was put in her sole name) but she does not concede that it resulted from or represented the husband’s interest in K Pty Ltd and she does not concede that there were other payments amounting to $120,000. It is the wife’s consistent case that she simply does not know about the financial arrangements for this family. She cannot gainsay the husband’s evidence. There is no doubt that there were proceedings in the NSW Supreme Court between the husband and his partners in K Pty Ltd. There is no doubt that the P Town property was put in the wife’s name, was subsequently sold and the net proceeds paid to the parties. I accept the husband on this issue.

Each of the parties was in paid employment. The wife ceased full time work prior to the birth of B, was paid $10,000 by way of a termination payment and later returned to part time work. The husband was in paid employment, apart from a period between 2004 and 2007.
On those facts the financial contributions by and on behalf of the husband were greater than those of the wife.

Section 79(4)(b) Contributions

This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions. Beyond the husband’s involvement in businesses in which he had an interest, there is no evidence about this type of contribution.

Section 79(4)(c) Contributions

This provision deals with contributions to the family including contributions in the form of homemaker and contributions to children of the marriage.
Although he was clearly a loved and important member of the family, H does not fall within the relevant definition for the purposes of this provision. Therefore contributions to H are excluded from consideration under this provision although the wife’s contributions to him will be dealt with under s 75(2)(o) below.[20]
[20] In the Marriage of Robb (1994) 18 Fam LR 489.
It is an agreed fact that the wife was the primary care giver of the parties’ children. The wife deposed that she “attended to all household and child rearing duties”. The wife left full time work when B was born and was either not in paid employment or only employed on a part-time basis, thereafter. Both girls have been treated by psychologists since separation and the arrangements for those appointments, including paying for the sessions and facilitating the attendance of the girls have fallen to the wife. The girls have displayed quite concerning behaviour including Trichotillomania whereby they suffered a compulsive urge to pull out their hair.
It is the wife’s evidence that the husband was engaged in property development and later was engaged in gambling for money. It is her evidence that the husband was not available or if available, chose not to be involved in the activities of the children.
It is the husband’s evidence that he was actively involved with B and C. Normally the husband had dinner with the family and would bathe the girls while the wife washed up. The family had dinner at the home of the husband’s parents once a week. The husband attended doctors’ appointments for the children, with the wife. The husband made the enrolment arrangements for the girls at the HH School in Suburb II. It is the husband’s evidence that he spent time with the girls after separation when permitted by the wife.
The parties were self represented. Their evidence was largely given in summary form and was generally not challenged by objection or cross-examination. In those circumstances it is not possible to made definitive findings about the parenting and homemaker roles of the parties beyond the agreed position. I find that the wife undertook the main parenting and homemaker roles but that the husband was also involved in a meaningful way.
Lending some support to the husband’s contributions claims, it necessarily follows from the wife’s case that while some bank accounts were in her name, the financial planning and arrangements for the family were exclusively undertaken by the husband.

Conclusion on Contribution

The parties’ marriage involved nearly eight years of cohabitation and contributions were made over a period spanning nearly 12 years.
In the circumstances, the proper finding is that the husband made the greater contribution. It is trite to say that in respect of a net pool of assets of under $290,000, the initial injection by the husband of something of the order of over $560,000 must be of significance. There is no concept of erosion of those 2001 contributions and I am to reflect on the purposes to which the injection of funds was applied. In In the Marriage of Pierce (1998) 24 Fam LR 377, the Full Court was dealing with a challenge to a property settlement judgment in which there was a finding that contributions favoured the husband 55 per cent to

45 per cent by the wife. The Full Court addressed interpretations of previous judgments which were said to give rise to the concept of the erosion of an initial imbalance of contributions. The Full Court said:
28.In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J. at page 10).
29.In the instant case, his Honour identified what he described as the greater initial financial contribution of the husband and his post separation contribution, but, in our view, he failed to properly assess such contributions. The period of cohabitation was ten years. At about the date of the marriage the husband had very significant assets. His Honour found that the husband had assets to the approximate value of $226,000. At the date of the trial, the parties had assets of a net value of $319,190 which included the matrimonial home valued at $260,000 to which the husband had contributed about $200,000 from moneys to which the wife had made no contribution.
30.There is an obligation on a trial judge not only to identify the relevant contributions but also to assess them. In this case his Honour failed to adequately, or at all, assess these contributions. In our view he failed to properly weigh the greater initial contribution of the husband, with all other relevant contributions, and seems not to have had regard to the use made by the parties of the husband’s greater initial contribution.
31. The finding and assessment that the contributions of the parties during cohabitation should be regarded as equal was, in our view, open to the trial judge. Given that assessment, we are of the view that in assessing the totality of the contributions of each of the parties as being 55 per cent by the husband and 45 per cent by the wife, his Honour, notwithstanding the observations of Stephen J in
Gronow v Gronow (1979) 144 CLR 513 at 519, on the facts of this case, failed to attach sufficient weight to the greater initial financial contributions of the husband, and to his contributions post separation in caring for the children.
32.Accordingly, we are of the view that, in assessing the respective contributions of the parties from the commencement of cohabitation to the date of hearing as being 55 per cent by the husband and 45 per cent by the wife, the discretion vested in his Honour miscarried and the appeal should thus be allowed.
The Full Court went on to re-exercise the discretion under s 79 and found that the contributions favoured the husband 70 per cent compared to 30 per cent by and on behalf of the wife.
All cases fall to be determined on their own facts but I note that there are some similarities between the circumstances in this case and those in Pierce. For example, the duration of the marriage, the size of the pool and the relative magnitude of the injection of assets are not dissimilar. As the Full Court found in Pierce, it is likely that a finding in this case of equality of contribution, as is advanced on behalf of the wife, would be outside the permissible range of discretion.
Here, it is possible that but for the assets the husband brought to the marriage, there may have been no property interests to change. A substantial allowance is required for that fact. Otherwise the parties both had paid employment, the husband for greater periods than the wife. There were no relevant non-financial contributions. The wife undertook the main parent and homemaker role. In my view the husband’s contributions represent 65 per cent compared to 35 per cent by the wife.

The other matters in Section 79

Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:

Section 79(4) (d)

Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife.
No submissions were made in relation to this matter. I was not told that either party sought to subsist on invested funds or otherwise earn income from an asset.

Section 79(4)(e) - Section 75(2) Factors

(a) the age and state of health of each of the parties;

The wife is 42 years of age and the husband is 51. The husband suffered his first heart attack in 2009. The Discharge Referral[21] from the hospital of December 2009 indicates that he presented with an “anterior STEMI”. I understand that STEMI is an acronym for ST-Elevation Myocardial Infarction which is a type of heart attack. He is due to have by-pass surgery on … April 2013[22], having deferred an earlier appointed surgery date for this hearing[23]. The husband deposes to being under the care of a cardiologist, Dr JJ. Dr JJ has told the husband that after the operation he will not be able to attend to his work obligations for six to ten weeks.
[21] Annexure F to the husband’s affidavit.
[22] Annexure O to the husband’s affidavit.
[23] Annexure P to the husband’s affidavit in an admission letter for surgery at the Hospital on 4 March 2013.
There is no formal evidence about the health of the wife. Ms G observed her to interpret many neutral or ambiguous concerns in relation to the children in a heightened manner. She observed the wife to be hypervigilant in relation to the children.

(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

According to his Financial Statement the husband’s income is $655 per week through his company Q Pty Ltd. The husband describes his occupation as professional. There are no other income earners in the husband’s household and according to his Financial Statement no one makes payments for his benefit and he makes no payments for the benefit of others, save for the children. That cannot be entirely correct as the husband gave evidence to the effect that he lives with the children in a property at Suburb BB, not only rent free but, without meeting any outgoings associated with the property. The property is owned by Ms CC who is a client of the husband.
The husband’s expenses are:

Expense				Amount
Child support				$305
Other expenses.				$590
Type of expense	Total	Wife	Children
Food	$200	$150	$50
Household supplies	$20	$20	$0
Clothing and shoes	$75	$50	$25
Child activities	$50	$0	$50
Medical dental and optical	$70	$50	$20
Educational expenses and fees	$25	$0	$25
Chemist pharmaceuticals	$100	$80	$20
Dry cleaning	$10	$10	$0
Books and magazines	$10	$0	$10
Gifts	$20	$0	$20
Hairdressing, toiletries	$10	$10	$0
Sub-total	$590.00	$370.00	$220.00
Total				$895.00

In the husband’s Financial Statement his total expenses are put at $605 which seems to be an error of transcription.
There is little evidence as to the husband’s capacity for paid employment save that he will be out of action for a period after his April operation. His income seems modest for the effort he apparently makes. It could be argued that he might be better obtaining a position as an employee if his remuneration is only $655 per week. The lack of income is currently balanced by the happy circumstances of the generous provision of accommodation by Ms CC.
According to her Financial Statement the wife’s income is $1,156 per week made up of $730 by way of salary working part-time, $279 in Family Assistance, $81.50 in a pension, $41 in child support and $25 in child support arrears. There are no other income earners in the wife’s household, no one makes payments for her benefit and she makes no payments for the benefit of others, save for the children. Her expenses are:

Expense				Amount
Income tax				$96
Superannuation – MLC				$75
Rent				$650
Car insurance – NRMA				$15
Car registration				$10
Platinum Visa Card – St George Bank (minimum payment $195)				$49
Other expenses.				$1,072
Type of expense	Total	Wife	Children
Food	$250	$100	$150
Household supplies	$20	$20	$0
Gas	$15	$7.50	$7.50
Electricity	$40	$20	$20
Telephone	$40	$20	$20
Motor vehicle - petrol	$20	$10	$10
Motor vehicle maintenance	$30	$15	$15
Fares car parking	$32	$25	$7
Clothing and shoes	$50	$30	$20
Child activities	$30	$0	$30
Child minding	$30	$0	$30
Medical dental and optical	$60	$15	$45
Entertainment & hobbies	$30	$0	$30
Educational expenses and fees	$150	$0	$150
Chemist pharmaceuticals	$30	$10	$20
Dry cleaning	$5	$5	$0
Books and magazines	$25	$5	$20
Gifts	$5	$0	$5
Hairdressing, toiletries	$40	$20	$20
Clinical Psychologists	$170	$0	$170
Sub-total	$1072.00	$302.50	$769.50
Total				$1,967.00

In the wife’s Financial Statement the living expenses are asserted to be $1012 which seems to be a simple error and the total expenses are put at $2,038 which also does not accord with my arithmetic.
There is no evidence about the wife’s capacity for paid employment. She is employed now, albeit on a part-time basis. It is the wife’s intention not to return to full time paid employment for some years. I understand that it is her preference to wait until the children are further advanced before taking that step.

(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

Under the terms of the orders made on 6 March 2013 the children will mainly live with the wife and will spend alternate weekends, some special days and school holiday block periods of increasing duration with the husband. Under those circumstances as was the case on past performance, it is likely that the wife will bear the greater physical load and financial cost associated with the children.

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

I have set out the evidence in relation to the expenses of the husband and 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;

I have referred to the receipt by the wife of Centrelink benefits.

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

There is little evidence about the standards of living of the parties. The parties enjoyed some overseas travel. H attended a fee paying school. The parties lived in comfortable accommodation and drove comfortable motor vehicles.

(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;

No spousal maintenance is sought. Neither of the parties intends to resume study or training.

(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;

Nothing comes to attention here. I am not able to find that there is a debt to Ms F. If I am wrong about that, the husband has indicated that he will pay his sister. The likely orders in these proceedings would not prevent Ms Koca from pursuing the issue.

(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;

The wife undertook the greater role as parent and homemaker and thereby allowed the husband to concentrate, during the years when he had full time employment, on that employment.

(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;

Although she remains employed by her original employer, the wife left full-time paid employment in 2003 and thereby is likely to have lost the benefits of unbroken service – superannuation, promotion etc.

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

I take it that the wife’s desire to defer her return to the full-time workforce is related to her concerns or B and C. They will be well advanced in their education before their mother works full time.

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

Neither of the parties is living with another adult.

(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

There is a child support assessment and there are or are likely to be proceedings to review the current assessment.

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

Between 2001 and 2009 the husband’s son, H lived with the parties. In 2001 H was nine years of age and attended KK School. As is referred to above, only the contributions of the wife are relevant in relation to him. The agreed chronology has the husband as H’s primary care taker. That is puzzling as the chronology was drafted by the wife and yet it was my understanding that albeit that there was no admissible evidence on the issue, the wife intended to criticise the husband’s parenting of H. For what it is worth, the single expert psychologist, Ms G opined that H expressed affection for the wife. It was telling, however, that Ms G also observed that H was comfortable enough in his relationship with his father to criticise him. Thus there is no evidence to suggest that H retains a fear of his father nor does the evidence support the finding that there was a history of abuse from his father. The wife deposed that she “attended to all household and child rearing duties”. It is the wife’s evidence that the husband was engaged in property development and later was engaged in gambling for money. It is her evidence that the husband was not involved in the activities of the children. But for the agreed fact that would apply to H.
The husband’s expenses are subsidised by his friend and client, Ms CC.
Nothing else comes to attention here.

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

There is no relevant financial agreement.
The relevant matters in Section 75(2) would seem to be paragraphs (a), (b), (c), (d), (j), (k) and (o).

Section 79(4)(f)

I have referred to the other orders made in these proceedings.

Section 79(4)(g)

I have referred to child support above.

Conclusion

It is an agreed fact that there should be an adjustment to the outcome warranted by contribution alone, in favour of the wife for the other factors raised in section 79(4). As I have conceded, albeit no doubt on the basis of the arguments they have made about the net pool of assets and about contribution, those adjustments are proposed at 30 per cent - 40 per cent.
The matters that support an adjustment in favour of the wife are that on a division based on contributions, the husband will receive nearly twice the assets received by the wife. Here that means a difference of about $87,000. Although his income is modest, the husband is currently receiving cost free accommodation. The main physical and financial burden of the children will, on past experience, fall to the wife. Neither of the parties is apparently fully exercising their earning capacity but the wife has nominated a reason. The wife made contributions to H.
Countervailing factors are that the husband is nearly 10 years older than the wife and he has a heart condition.
Without intending to be dismissive of their efforts, the net pool of assets is modest and in such circumstances the Court has made and validated larger rather than smaller adjustments under these provisions.
In my view an appropriate adjustment would be 30 per cent. In the context of this case that represents about $87,000 and will create a difference between the parties of twice that sum.

Just and Equitable

The net assets have a value of $289,983.33. Of that, $30,538.02 is in the form of superannuation and the balance is in the form of non-superannuation assets.
If the net assets are divided in the proportions 65 per cent to the wife and 35 per cent to the husband then they will receive something of the order of $188,489 and $101,494, respectively.
Neither party seeks a splitting order for superannuation. Therefore any adjustments must be made out of non-superannuation assets.
Of the assets and liabilities that make up the net matrimonial pool, the wife has or has had the benefit of, the following assets:

Assets and liabilities

Value $

Shares held by the wife in public companies[24] $38,400

Wife’s vehicle $1,000

Wife’s MLC superannuation[25] $29,433.26

Total $68,833.26
[24] The husband initially contended that the shares were worth about $123,440. The wife asserted and the husband did not cavil with the fact that under a share consolidation arrangement the wife’s 60,000 shares in DD Pty Ltd had become 4,000 shares. On his calculations that took those shares from $91,200 to $6,160.
[25] Subject to seeing a current balance.

If the wife is to receive 65 per cent of the assets she would receive about $119,656 from the funds held on trust.
As is referred to above it is an agreed fact that the husband is in arrears of child support. As at 4 February 2013 the debt stood at $17,034.66.[26] The husband agreed to me making provision for the settling of that debt in the orders made in these proceedings and I shall do so. I will require that the wife notify the Child Support Registrar of the payment in order that the records of the agency can be updated and any consequential adjustments can be made.
[26] See annexure 47 to the wife’s affidavit
Thus the payment to the wife from the fund will be $136,690 and the husband will receive the balance of $83,355.
That would leave the husband with:

Assets and liabilities

Value $

Husband’s AMP superannuation (approximately) $1,104.76

The balance of the funds held on trust $83,355

Total $84,459.76

The parties confirmed the balance of the fund with Ms Touriki but in case there is any error in the calculation I will express the division of the fund in percentage terms – 62 per cent to the wife and 38 per cent to the husband.

Conclusion under Section 79

The parties have worked hard and met many challenges during their marriage and since. They have supported two lovely daughters and maintained a good lifestyle despite several years when neither of them had paid employment. The greatest challenges in the medium term will fall to the wife. In my view the settlement outlined above will meet the requirements of s 79.
I will make provision for the parties to bring the matter back before me in relation to the wording of the orders, should that be necessary.

I certify that the preceding two hundred and eleven (211) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 5 April 2013.

Associate:

Date: 5 April 2013

In the Marriage of Hickey (2003) 30 Fam LR 355 at 370.

[2013] FamCA 209

5 April 2013

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Consent

Procedural Fairness

Jurisdiction

Assets and liabilities	Value $
Net proceeds of sale of Apartment 7, N Street, Suburb O	$220,045.31[3]
Shares held by the wife in public companies[4]	$38,400
Wife’s MLC superannuation	$40,000
Husband’s AMP superannuation (approximately)	$1,000
Minus the parties’ liability to Ms F	-$99,768

Outgoing	Amount
To settle the purchase of the apartment	$335,075.57
Stamp duty	$12,054.00
L.J.Hooker Property Source	$16,236.00
Costs and disbursements	$4,306.39
Amount paid to the wife	$39,354.54
Total	$407,026.50

Purchase price	$368,000
Minus Security sum	-$15,000
Minus Deposit paid	-$18,400
Mortgage	$334,600.00