Koch & Kest

[2021] FamCA 408

FAMILY COURT OF AUSTRALIA

Koch & Kest [2021] FamCA 408

File number(s):

SYC 8089 of 2018

Judgment of:

GILL J

Date of judgment:

21 June 2021

Catchwords:

FAMILY LAW – PROPERTY – de facto relationship – property adjustment – Kennon adjustment – contributions of wife made more arduous by family violence – adjustment for post separation contributions – spousal maintenance.

Legislation:

Family Law Act 1975 (Cth) ss 90SF, 90SM

Cases cited:

Benson & Drury (2020) FLC 93-998

Bevan & Bevan (2013) FLC 93-545

Chorn & Hopkins (2004) FLC 93-204

Jabour & Jabour (2019) FLC 93-898

Keating & Keating (2019) FLC 93-894

Kennon & Kennon (1997) FLC 92-757

Omacini & Omacini (2005) FLC 93-218

Stanford v Stanford (2012) 247 CLR 108

Number of paragraphs:

172

Date of last submission/s:

8 September 2020

Date of hearing:

7–8 September 2020

Place:

Canberra

Counsel for the Applicant:

Mr Rosic

Solicitor for the Applicant:

Diana Perla & Associates

Counsel for the Respondent:

Mr Brown

Solicitor for the Respondent:

Browns the Family Lawyers

ORDERS

SYC 8089 of 2018
BETWEEN:	MS KOCH Applicant
AND:	MR KEST Respondent

ORDER MADE BY:	GILL J
DATE OF ORDER:	21 JUNE 2021

THE COURT ORDERS THAT:

1.Within 42 days of the date of these Orders, the husband pay $264,000 to the wife.

2.Simultaneously with Order 1, the husband do all acts and things and sign all documents to transfer to the wife all of his right, title and interest in the property at ... M Street, Suburb G, New South Wales (Folio Identifier ...) (“the Suburb G property”);

3.Simultaneously with Order 1 and 2 above, the wife discharge the K Bank mortgage BSB ...18 and K Bank Line of Credit BSB ... 29 being registered mortgage ... (“the K Bank mortgage”).

4.The husband shall be declared the sole owner to the exclusion of the wife of his interest in L Street Suburb H New South Wales (Folio Identifier ...) ("the Suburb H property").

5.The husband shall indemnify the wife and keep indemnified in relation to any loan secured by way of mortgage over the Suburb H property.

6.The husband shall be declared the sole owner, to the exclusion of the wife, of Business C ACN: ... and shall indemnify the wife and keep her indemnified in relation to any liability of or relating to Business C.

7.The husband indemnify the wife and keep her indemnified in relation to any Loan Accounts in her name to the company, Business C or any liability in relation to her having been an officer or employee of Business C.

8.Within 42 days of the date of these Orders, the parties do all acts and things to close their joint savings bank accounts, with the wife to retain the balance of funds in each of those accounts.

9.The husband pay to the wife spousal maintenance in the sum of $800 per week commencing seven days from the making of these Orders and every week thereafter until 1 September 2023.

10.That in the event that the husband fails to comply with Order 1 then:

(a)The husband immediately vacate the Suburb H property; and

(b)The wife be appointed as his Trustee to sell the Suburb H property including but not limited to signing all documents necessary on his behalf, with the wife to have sole control of all aspects of the sale, including appointing the conveyancing solicitor, real estate agent, marketing the property and sale price but to keep the husband’s solicitor informed of all steps taken.

(c)The proceeds from the sale of the Suburb H property be disbursed as follows:

(i)Payment of legal, selling and marketing costs related to the sale;

(ii)Payment of Strata Levies, Council and Water rates outstanding at the time of settlement;

(iii)Payment of the J Bank Home Loan BSB ...70 (“J Bank Loan”);

(iv)Payment of $264,000 to the wife plus interest in accordance with the Family Law Rules from 42 days after the date of these Orders to date of payments.

(v)Payment of any remaining balance to the husband.

11.In the event that the total net proceeds received from the sale of the Suburb H property, in Order 10.3.4. above, is less than $264,000, then:

(a)The wife be appointed as the husband’s Trustee to sell the company, Business C, including but not limited to signing all documents necessary on his behalf, with the wife to have sole control of all aspects of the sale, including appointing the solicitor, selling agent, marketing the business and sale price but to keep the husband’s solicitor informed of all steps taken;

(b)The proceeds from the sale of Business C be disbursed as follows:

(i)Payment of legal, selling and marketing costs related to the sale of business;

(ii)Payment to the wife of the amount, being the difference between $264,000 plus interest in accordance with the Family to date of payments, less the amount received by the wife in accordance with Order 10.3.4 above; and

(iii)Any remaining balance to be paid to the husband.

12.Pending the husband complying with these Orders, the husband be restrained:

(a)from drawing down on the J Bank Loan (the Suburb H loan) unless to effect compliance with these orders to make the payment in order 1 to the wife;

(b)from drawing down on the loans associated with the Suburb G property; and

(c)from dealing in any way with his shareholding in Business C unless to effect compliance with these orders to make the payment in order 1 to the wife.

13.Otherwise each party be solely entitled to the exclusion of the other, to all other property currently registered in his/her name, either individually or jointly with another person, or in his/her current possession or control at the date of these Orders, including but not limited to real property, bank accounts, businesses, money, superannuation and leave entitlements, shares, jewellery and personal effects, presently in his/her possession.

14.In the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

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

REASONS FOR JUDGMENT

GILL J:

INTRODUCTION  

1. This matter concerns property proceedings between the applicant wife, Ms Koch, and the respondent husband, Mr Kest. Although the parties were previously married, these proceedings are in relation to a de-facto property adjustment between them, as they previously divorced in 2009 before recommencing their relationship on a de-facto basis from 2010 until June or perhaps September 2018. They agree that there is no jurisdictional impediment to the making of a property adjustment pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”).

2. They were also agreed that they previously filed for bankruptcy in 2005, and were discharged from bankruptcy in 2008 prior to recommencing their relationship in 2010.  2010 marked a clean slate for the acquisition of property by either, and also in their joint efforts. 

3. The parties have three children who live with the wife, being Ms B who is currently 22 years old, Ms D who is now 19 years old, and X who is three years old.

4. In pursuing her claim for property adjustment, the wife, shortly prior to the commencement of the final hearing, advised that she would pursue a Kennon argument,[1] being that her contributions, as taken into account pursuant to s 90SM(4) of the Act, were rendered more onerous due to family violence perpetrated by the husband. The wife also pursued a claim for maintenance.

   [1] Kennon & Kennon (1997) FLC 92-757 (“Kennon”).

   ORDERS SOUGHT 

5. The Orders sought by the parties appear at Annexure A.  In general terms, the wife sought that the husband pay her $275,000 and transfer the M Street property to her.  She would be required to discharge the mortgage on that property.  This arrangement would permit her to retain the property, on borrowing $200,000.  She asserted that if this was not the outcome that she would be unable to retain the property. 

6. The wife also sought that the husband pay her $800 per week by way of spousal maintenance until 1 September 2023. 

7. The husband sought that the wife discharge the mortgage on the M Street property and receive that property.  He sought to retain the Suburb H property, along with Business C.  The wife did not oppose his retention of Business C. 

8. He opposed the spousal maintenance order. 

9. Hence, aside from the spousal maintenance issue, the major difference between the parties related to the proposed cash payment to the wife. 

   DOCUMENTS RELIED UPON 

10. The wife relied upon the following documents:[2] 

    (a)Further Amended Initiating Application filed 21 August 2020; 

    (b)Financial Statement of Ms Koch filed 21 August 2020; 

    (c)Affidavit of Ms Koch filed 21 August 2020;

    (d)Exhibits to the Affidavit of Ms Koch emailed to the Associate 25 August 2020; and

    (e)Applicant’s Tender Bundle.

    [2] Applicant wife’s case summary document filed 3 September 2020, p. 4.

11. The husband relied upon the following documents:[3] 

    (a)Amended Response to Initiating Application filed 12 April 2019; 

    (b)Affidavit of Mr Kest sworn and filed 21 August 2020; 

    (c)Financial Statement of the husband sworn and filed 21 August 2020; and 

    (d)Affidavit of Mr Kest sworn 31 August 2020. 

    [3] Respondent husband’s case summary document filed 26 August 2020, p. 2.

12. A joint tender bundle was also provided by the parties which, with the exception of A15 (being an entry into a police database), became Exhibit C1. 

13. The parties further provided a collaborative balance sheet which became Exhibit C3, and is set out later in the judgment. 

    PRINCIPLES IN RELATION TO THE ADJUSTMENT OF PROPERTY INTERESTS 

14. The key to the exercise of jurisdiction in relation to the property of the parties is that it must be just and equitable, both to adjust the property interests at all[4] and to adjust them in a particular manner.[5] This requirement is one that permeates the whole of the decision-making process. 

    [4] Stanford v Stanford (2012) 247 CLR 108, 120 [35] (French CJ, Hayne, Kiefel and Bell JJ) (“Stanford”).

    [5] Bevan & Bevan (2013) FLC 93-545, [86] (Bryant CJ and Thackery J).

15. The necessary first step in consideration of whether it is just and equitable to make an order is to identify “according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property”.[6]

    [6] Stanford (n 4) 120 [37] (French CJ, Hayne, Kiefel and Bell JJ) (emphasis in original).

16. In this case there was little dispute as to the existing legal and equitable interests of the parties, as revealed in their balance sheet set out below. 

17. There was, however, significant dispute in relation to notional add backs to the pool of property based on the manner in which the parties have dealt with property following the end of their relationship. 

18. The Full Court in Omacini & Omacini (“Omacini”),[7] Trevi & Trevi[8] and Kowaliw & Kowaliw[9] identified the potential to notionally add back into the pool of property funds expended by the parties.  Those cases emphasised such a step as being the exception rather than the rule.  Between them they identified three general categories justifying a notional add back, as set out in Omacini at [30]: 

    [7] (2005) FLC 93-218.

    [8] (2018) FLC 93-858.

    [9] (1981) FLC 91-092.

    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 DJM v JLM (1998) FLC 92-816 the Full Court said at 85,262:

    ... 

    (b) Where there has been a premature distribution of matrimonial assets. In Townsend v Townsend (1995) Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 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)…” 

    (c) In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 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.” 

19. Otherwise, it was held, parties should generally share in the economic highs and lows of their relationship, being both the “economic fruits” and financial losses.   

20. On the same issue of adding back, in Chorn & Hopkins[10]the Full Court dealt with the discretionary treatment of expenditures on legal fees at [57]–[58]: 

    In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial judge, in determining how to exercise that discretion, regard should be had to the source of the funds. 

    If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them. 

    If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions. 

    [10] (2004) FLC 93-204 (Finn, Kay and May JJ).

21. Outstanding legal fees themselves are generally not taken into account as a liability. 

22. The court is then to consider, in accordance with s 90SM, the various contributions made by the parties.

23. As was identified by the Full Court in Jabour & Jabour,[11]the assessment of contributions is the assessment of the myriad of contributions made throughout the relationship, in the light of their nature, form, context and circumstances, and the holistic evaluation of their significance. 

    [11] (2019) FLC 93-898.

24. In this case, the husband asserts that the parties’ contributions should be taken as equal.  The wife asserts that, but for conduct of the husband that rendered her contributions more onerous, their contributions during the relationship should be taken to be equal.  She asserts that she has made additional contributions since the end of the relationship. 

25. The principles invoked by the wife in relation to the assessment of her contributions in the light of her allegations of family violence are set out in Kennon and Keating & Keating (“Keating”).[12]It was highlighted in Keating that imposing a circumstance of family violence upon a party to the relationship may lead to contributions being “significantly more arduous” and cause a “discernible impact” on the parties’ contributions.[13]   

    [12] (2019) FLC 93-894.

    [13] Ibid [35]–[36].

26. However, the assessment of such an impact should not be undertaken in a compartmentalised manner.  In Benson & Drury,[14] the Full Court (Strickland, Watts & Austin JJ) said at [35] and following: 

    The central question raised by this appeal is how a judge takes into account the contributions of one party, found to have been made significantly more arduous by the conduct of the other, when assessing contributions under ss 79(4)(a)–(c) or ss 90SM(4)(a)–(c) of the Act. The answer is the primary judge must take a holistic approach. The contributions which have been made significantly more arduous have to be weighed along with all other contributions by each of the parties, whether financial or non-financial, direct or indirect to the acquisition, conservation and improvement of property and in the role of homemaker and parent. All contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder (citations omitted).

    …   

    Although the use of the short-hand descriptor of a ‘Kennon claim’ is not of itself erroneous, it is liable to induce error because the issue is not a stand-alone claim, but is rather integral to the entire process … Nor is it helpful to refer to the issue as a ‘Kennon adjustment’ because that epithet invites treatment of the issue as an isolated claim for an additional share of the available property.  

    …

    The error of segmentation and the comparative analysis of one feature of the evidence against all others befell her Honour in this instance. 

    [14] (2020) FLC 93-998.

27. It is necessary, in support of the contention that the contributions were rendered more arduous, to establish the incidence and effect of family violence and, as was said in Keating at [39], “an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make the relevant contributions”.

28. As to the nexus, in Benson & Drury the Full Court said at [49]:

    [I]t should now be clear that the required nexus between proven family violence and the significant adverse effect upon the contributions of the victim is capable of being inferred from the lay evidence of the parties...

29. The court is then required to examine the matters set out at s 90SF(3) as to whether those matters point to an adjustment of the property.

30. Finally, the court is again to examine whether the result arrived at constitutes a just and equitable settlement of the property. 

    HOW THE PARTIES PUT THEIR CASES 

31. The wife asserted a pool towards which, absent consideration of Kennon, she accepted the parties could be assessed as having contributed equally to during the relationship.   

32. The husband asserted that the parties’ contributions should be assessed as equal. 

33. The wife asserted that the contributions should be reassessed in the light of family violence making her contributions more arduous, such that the respective contributions should be assessed as 60-40 per cent in the wife’s favour.  The wife identified a number of events within what she described in submissions as a “long history of family violence”.  These were identified in the summary of argument as follows: 

    (a)Intervention in incidents involving the husband and their daughter Ms D; 

    (b)Being required to work in the family business whilst heavily pregnant; 

    (c)Providing ongoing care for Ms D, being care necessitated by Ms D’s exposure to the husband’s family violence; 

    (d)Threats by the husband in relation to exclusion of the wife from the family home, being made in a context where the husband knows that the wife is afraid of him; 

    (e)The removal of financial support from the wife; 

    (f)The father’s suicide attempt; and 

    (g)The husband’s use of camera surveillance in the family home after his departure from that home. 

1. The impact was identified as being the “impact of being exposed to continuing acts of violence being perpetrated upon her and the children” at a time when the wife was caring for X.[15]  Impact was also said to arise from the consequences of their child Ms D being exposed to family violence as being causally related to Ms D’s struggles with mental health, and the need for the mother to provide additional support for Ms D.  The impact was said to have continued post separation.  For example, while caring for the children the wife remained the subject of surveillance by the husband. 

   [15] Transcript 8 September 2020, p. 174 lines 22–23.

2. The husband asserted that there is a lack of evidence to demonstrate a relevant impact flowing from family violence, submitting that the court would be required to make assumptions as to impact, as opposed to drawing inferences.  He pointed to the need to show a discernible impact of the family violence. 

3. The wife asserted a further adjustment to 65-35 in her favour to take into account contributions that the wife has made since separation and the s 90SF(3) factors.

4. The wife and husband also pursued a number of add backs, which are set out later in the judgment.

5. The legal costs paid by the parties were identified in their cost disclosure notices exhibited at H2 and W2, which showed that the wife had paid $66,725 and the husband had paid $48,120. 

6. The parties accepted that the paid legal fees should form an add back. 

7. On the issue of spousal maintenance, the wife asserted that she is not in a position, in the short-term, to engage in employment given the care necessary for the children, including her adult daughter Ms D.  She further pointed to the husband having excess capacity, according to his financial statement, even if all of his asserted expenses are characterised as appropriate. 

8. The husband disputes the incapacity of the wife to work, noting that, contrary to her assertion that she must constantly watch one of their daughters from fear of her harming herself, that daughter holds down part-time employment.  The husband observes that the wife was able to undertake part-time work until 2016, and that X is in childcare at present for two days per week. 

   THE POOL OF PROPERTY 

9. The parties formulated a combined balance sheet (Exhibit C3) that showed that they were agreed in respect of their current property, other than in respect of the value of particular chattels, agreed over their liabilities, and agreed over their superannuation.  The major area of disagreement related to add backs that each contended for.  The second major area of disagreement involved a potential insurance payout to be received by the husband.   

10. The table is set out below. 

    Balance Sheet 

BALANCE SHEET
Ownership		Description	Value (W)	Value (H)
Assets
1.	H	M Street, Suburb G, NSW	$1,000,000	$1,000,000
2.	H	L Street, Suburb H, NSW	$675,000	$675,000
3.	H	Business C	$200,000	$200,000
4.	H	Funds in J Bank Account #...92	$5,828	$5,828
5.	H	Funds in CBA Bank Account #...27	$3	$3
6.	H	Funds in CBA Bank Account #...60	$4	$4
7.	W	Funds in Westpac Bank Account #...70	$20,251	$20,251
8.	J	Funds in K Bank Account #…18	$5	$5
9.	J	Funds in K Bank Account #...30	$1	$1
10.	W	Motor Vehicle 1	$E20,000	$20,000
11.	H	Motor Vehicle 2	$E2,000	$2,000
12.	W	Furniture	$E5,000	$5,000
13.	H	Furniture	$E50,000	$10,000
14.	W	Jewellery	$E2,000	$30,000
15.	H	Watch 1and Watch 2	$E7,000	$1,500
Total Assets		$ 1,987,092	$ 1,969,592

BALANCE SHEET
Ownership		Description			Value (W)		Value (H)
ADD BACKS (Disputed)
16.	H	Monies withdrawn by husband and spent from joint savings K Bank Account #...18			$149,000		$0
17.	H	Monies drawn by husband from N Bank			$26,000		$0
18.	H	Interest charged on K Bank Loan #...07 from 31/07/2019 to 15/11/2019, as a result of husband’s breach of Orders of 12/07/2019. (Suburb F property sold and settled on 15/11/2019)			$20,830		$0
19.	H	Interest accrued on K Bank Mortgage #...18 from 31/07/2019 to 31/7/2020, as a result of husband’s breach of Orders of 12/07/2019			$19,060		$0
20.	H	Interest accrued on K Bank Line of Credit #...29 from 31/07/2019 to 31/7/2020, as a result of husband’s breach of Orders of 12/07/2019			$13,650		0
21.	H	Monies withdrawn by husband from his Superannuation on 27/05/2020.			$6,431		$
22.	H	Monies received by husband during financial years 2019 to 2020 in accordance with Division 7A Loan			$36,279
23.	W	Monies withdrawn by wife and spent from joint savings K Bank Account #...18			$0		$150,000
Total Add backs		$ 271,250		$ 150,000
Liabilities
24.	J	K Bank Mortgage #...18 (Suburb G property)			$407,701		$407,701
25.	J	K Bank Line of Credit #...29 (Suburb G property)			$270,771		$270,771
26.	H	J Bank #...70 (Suburb H property)			$458,588		$458,588
Total Liabilities		$1,137,060		$1,137,060
Superannuation
Member		Name of Fund	Type of Interest	Applicant’s   Value		Respondent’s value
27.	W	ANZ - P1 Insurance	$58,535		$58,535
28.	H	P2 Insurance	$7,645		$7,645
Total Superannuation				$ 66, 180		$ 66, 180
Financial Resource
29.	H	Husband’s Lump sum payout of TPD claim – P2 Insurance		$2,205,000

1. The disputed chattels at Items 13, 14 and 15 are resolved as follows. 

2. For Item 13, the furniture acquired by the husband for the Suburb Q property, the evidence established that $50,000 was spent by the husband.  The furniture is no longer new.  The husband conceded a value of $10,000.  His admission should be taken as the best evidence of the value of the furniture.

3. The wife who holds the disputed value jewellery (Item 14) admits a value of $2,000 which, absent contradictory evidence, forms the best evidence of value.  Similarly, the husband’s admission in respect of his two watches (Item 15) at $1,500 also forms the best evidence of value.  

   ADD BACKS 

4. Shortly after separation, on 23 October 2018, the wife withdrew $150,000 from the parties’ joint K Bank account.  She provided no explanation in her affidavit of her use of these funds, explaining that deficit on the basis that she “didn’t know I had to put it in”.  Such an explanation rang hollow given the criticisms by the wife of the husband’s dealing with the property post separation. 

5. The circumstances of the withdrawal were that until 21 October 2018 the wife was employed in the husband’s business and received approximately $1,152[16] per week in income.[17]  The wife also worked at various times as a receptionist in a medical practice. 

   [16] Wife’s affidavit filed 21 August 2020, paragraph 26.

   [17] Wife’s case summary document filed 3 September 2020, paragraph 10.

6. Shortly after the husband returned from an overseas trip, on about 23 October 2018, he ceased these payments and messaged the wife “R u pay for the house or do I call bank to surrender the house?”  A number of abusive messages were sent by the husband in relation to the financial circumstances and support of the wife, including assertions that she should move into a housing commission property, where “junkies and criminals hang out.”  Abuse and threats from the husband continued, including to call the police on the wife, and to threaten to move into ‘his’ house with his new partner.  The husband explained that his actions and abuse were founded on him forming the view that the wife had re-partnered.  He asserted that the wife was spending money on the beauty salon that her new partner should have been funding.  He was upset that there was a new man in the house and that the wife and children had been hiding it from him.  The husband had, at the time, already re-partnered. 

7. The circumstances are set out more fulsomely in the discussion in relation to family violence. 

8. In the context of those circumstances the wife said that she withdrew $150,000 from the joint K Bank account to meet living expenses for herself and the children after the husband had told her that he would no longer be supporting her.[18]  The circumstances rendered it reasonable for the wife to conclude that this was to be the case.  The wife accepted that she was the first of the two to withdraw money from the K Bank account.[19] 

   [18] Wife’s case summary document filed 3 September 2020, paragraph 10.

   [19] Transcript 7 September 2020, p. 44 lines 15–16.

9. Having failed to set out in her affidavit the use put to these funds, the wife explained in her oral evidence the disposal of the funds as set out below.  

10. The wife said that she transferred $42,000 to her daughter Ms B for her university tuition.[20]  The wife said that Ms B has repaid her $20,000 but that the wife gifted her the remainder of the funds.[21]  

    [20] Ibid p. 48 lines 30–35.

    [21] Ibid p. 48 lines 30–35, p. 49 lines 30–32.

11. The wife said that she has spent $48,925.20 in legal fees, with a further $17,800 held in trust (totalling $66,725), as provided in her costs notice dated 4 September 2020.[22]  She accepted that these amounts should be notionally added back.

    [22] Ibid p. 49 lines 5–8; Exhibit W2.

12. The wife said that she bought a family car for $27,000.[23]  This item is listed in the balance sheet.  Although at one point the husband asserted that he had bought the car for the wife, he ultimately accepted that he arranged the purchase, but that she paid for the car. 

    [23] Ibid p. 50 lines 13–16.

13. This left, from the $150,000 removed from the K Bank account, an amount of approximately $34,000 without specific explanation other than by general assertion that it has been used by the wife to support herself and the children, in circumstances where the wife was forced to have resort to Centrelink payments.   

14. Despite the late explanation by the wife, and the sparse detail that accompanied it, under the circumstances confronting the wife in supporting herself and caring for the children in the context of the end of the relationship, including that on 2 November 2018 the husband cancelled the credit cards which the wife also had access to (secondary card holder) and on 13 December 2018 cancelled the family’s private health insurance,[24]  I accept that, as the wife asserts, the balance was used in relation to living expenses. 

    [24] Wife’s case summary document filed 3 September 2020, paragraph 10.

15. Under those circumstances, the use of part for the car is accounted for in the balance sheet, and the balance (other than legal expenses) is for the legitimate support of the wife and the family, in particular the daughter’s education.  It is not appropriate to notionally add back the $150,000 withdrawn and used by the wife, save insofar as it relates to her legal expenses of $66,725. 

    Monies removed by the husband 

16. Although a number of transactions, including the drawing down of significant sums from the parties’ credit facilities by the husband were traversed during the trial, the significance of a number of these fell away during the trial, as identified by the ultimate cases pursued by each of the parties set out above, such that they do not warrant recital in this judgment.  In short, they involved the use of funds for the purchase of real estate, and the payment of taxation liabilities in a manner that the parties no longer pursued as significant to the division of property. 

17. Ultimately the total of add backs pursued by the wife relates to monies she asserts are unexplained, being $133,000 (from the husband’s initial withdrawal of $149,000), a withdrawal of $29,000 from AA Bank accounts in the control of the husband, and various interest charges for which the husband was responsible by virtue of orders made by Henderson J.[25]  These are set out with greater precision below. 

    [25] Transcript 8 September 2020, p. 180–3.

18. It was accepted by the husband that, in total, he removed $648,000 of the funds of the parties.  Part of this was on 23 October 2018 when the husband withdrew $149,000 from the parties’ joint K Bank account, such withdrawal closely following the wife’s withdrawal of $150,000 from that same account. 

19. Of the total sum, $202,500 went to the purchase of a property at L Street Suburb H (being the gap between the total purchase price for that property of $675,000 and the borrowing from J Bank by the husband of $472,500). 

20. A further amount was restrained by injunction on 12 July 2019 by Henderson J.  

21. The husband asserts that the balance of monies used by him was approximately $134,000, being the $675,000 less the explained amounts of $202,500 for the purchase of Suburb H and the monies dealt with by injunction.  This closely reflects the amount of $133,000 that the wife claims requires explanation.[26]  This amount should replace the amount of $149,000 set out at Item 16 of the balance sheet.

    [26] Ibid p. 181 lines 10–20.

22. The wife also pursues an add back at Item 17 (there set out as $26,000, but asserted to in fact be $29,000) being amounts contained in AA Bank accounts that were not disclosed by the husband. 

23. The wife pursues add backs at Items 18, 19 and 20 in respect of interest that was not paid by the husband in the face of orders made by Henderson J compelling him to do so. 

24. Item 21 was no longer pursued as an add back. 

25. Item 22 relates to an increase in the Division 7A loans relating to the Business C, being an increase between 2018 and 2019 of $36,279.  Whatever these might relate to they are at the control of the husband and absent knowledge of the wife.  It was ultimately accepted that, as the husband is to receive the Business C, then provided he indemnifies the wife, the Division 7A loans are effectively cancelled out, as his debt to Business C is an asset of Business C, and both will stand to his account. 

26. Returning then to the issue of the contested $133,000, the husband accepted that he paid approximately $48,000 in legal fees from this amount that should be the subject of an add back.  The rest of his explanation is set out below.  However, it remained controversial as to whether the husband’s explanation as to the use of the money should be accepted.  This was not on the basis that it was seriously contested that he had made such expenditure, but rather on whether the source for such expenditure was the withdrawn sum or otherwise from his significant and ongoing income and other financial support, as described elsewhere in the judgment. 

27. The husband explains his use of (a portion of) those funds in the following manner: 

    (h)Credit card bills from pre separation; 

    (i)Sponsoring of his then wife Ms R from Country S at $7,254; 

    (j)Payment of eye surgery for Ms R at $5,200; 

    (k)Purchase of a dog at $3,000; 

    (l)Payment of legal fees at $15,700; and

    (m)$50,000 purchase of contents and furniture for his apartment.

28. At about the time that he took and then retained the $149,000, the husband received (and continues to receive) income protection from P3 Insurance in excess of $15,000 per month (gross).  He currently receives $180,000 annually.  The husband accepted that this meant that, in addition to the monies taken from the account, he had income of approximately $360,000 across the two-year period to the trial.[27]  Including, then, the money taken from the account, the husband received about $500,000 across the two years.  This did not include various benefits that he also received from Business C.  From the monies received he said that he paid about $100,000 in tax.[28]  He says that he now has an outstanding tax liability for 2019, which he estimates at a further $30,000.[29]

    [27] Ibid p. 125–6 lines 41–45, 1–5.

    [28] Ibid p. 129 lines 5–7.

    [29] Ibid p. 133 lines 19–21.

29. Although the husband repeatedly asserted that the insurance payments that he received went into the mutual pool of assets, those payments went into an account controlled by him alone.  It is by no means established that the funds were then expended for the mutual benefit of the parties, aside from in the sense that he then made payments (accumulating arrears) on the mortgage for Suburb H where he lives.  There is further discussion of the husband’s financial circumstances under the heading of spousal maintenance, which gives further colour to the husband’s lavish lifestyle.

30. The husband’s evidence in relation to his financial circumstances was highly unsatisfactory.  He was combative, which may in part be explained by his facing of difficult questioning.  However, he also appeared evasive, and would avoid answering questions (under the guise of asserting that he did not wish to lie) until shown evidence demonstrating the position, at which point he would have no option but to concede.  His evidence was internally inconsistent (for example in relation to his cash holdings), and inconsistent with other documents provided by him (such as those conceding that he had held bank accounts that he had not previously disclosed).  I do not regard the husband as a reliable witness, and where his assertions lack other support, consider that considerable caution should be exercised before accepting that he has established those assertions. 

31. In respect of the $133,000, that leaves the position that I do not accept his explanation of the use of the funds for proper living expenses.  He described that post separation he has lived a lavish lifestyle (although not quite to the standard that he previously enjoyed), that has, in combination with the identified expenses that he has described, consumed his insurance income, benefits from Business C, and the $133,000.

32. It is true that parties should be in a position to get on with their lives post separation, and that their finances do not need to be held in stasis, and that an add back is not justified where a party has incurred proper living expenses that are funded by the use of marital assets.

33. However, despite the purchase of the legitimate items identified by the husband, in the context of his access to other funds, it appears that in truth the use of marital property was to fund what he concedes was a lavish lifestyle, in a manner that equates to a premature distribution of the assets of the relationship.

34. Under those circumstances it is appropriate to characterise the husband’s use of the $133,000 as a premature distribution of the parties’ property, and to be treated as a notional add back. 

35. As described above the wife also sought a notional add back related to the non-payment of mortgages by the husband, in the face of orders made by Henderson J on 12 July 2019 requiring that he do so.  Those orders provided in respect of the mortgages as follows: 

    5. Any mortgages with K Bank are to be signed by both parties jointly and neither is able to deal with any mortgages solely. 

    6. The husband is to pay all interest instalments of the mortgages in respect of the properties at Suburb F, being Account number: …07 and Suburb G, being Account number: …18 and the Line of Credit …29. 

36. The husband accepted that he did not comply with the orders.  

37. It may be accepted, as was contended for by the husband, that adding back cannot be used simply as a back door mechanism for punishment of a defaulting party.  That is not to say that the circumstance that the conduct breaching the orders is necessarily irrelevant to the issue of adding back.  

38. It is necessary to examine the circumstances of the accruing of interest.  

39. From separation in June 2018 the wife and children remained in the Suburb F property, until it was sold in November 2019.  The outstanding interest on the Suburb F property was paid on the sale of that property.  The wife identified that $20,830 interest was deducted from the net sale proceeds of the Suburb F property.[30] 

    [30] Wife’s case summary document filed 3 September 2020, paragraph 15.

1. Since the sale of Suburb F, the wife and children have occupied the Suburb G property.  The wife accepted that, as at the end of the 2020 financial year, the outstanding interests on the property had decreased from what it was at the time of the making of the orders by Henderson J. 

2. While the wife paid outgoings on the Suburb F property from separation until moving out, this did not include making mortgage payments.  The wife explained that this was due to a lack of finances on her part, being reliant on savings (presumably the money drawn from the K Bank account) along with payments from Centrelink.  

3. In his submissions the husband accepted that there had been an increase in the loans the subject of orders by Henderson J.  By the time of the trial the husband accepted that the Suburb G mortgage (where the wife and children reside) has increased by about $1,000, the Suburb H mortgage (where he resides) by about $8,000. 

4. It is difficult to reconcile these figures (other than Suburb F) with those claimed by the wife per the balance sheet.  However, even if the wife is correct in the amounts asserted, it should be observed that the interest would accrue on the mortgage regardless of whether it was paid by the husband.

5. This means that what is identified in the balance sheet is not additional interest accrued as a result of the husband’s non-compliance, but rather the interest accumulated is unpaid by virtue of the non-compliance.  The interest would accrue (in large part) whether or not the husband complied with the orders of Henderson J (save as to any compounding effect of interest or penalties on unpaid interest). 

6. As a consequence of non-compliance in respect of Suburb F, the interest was paid from the joint pool of the parties.  Any additional contribution that may have been claimable by the husband  if he had complied with Henderson J’s orders by virtue of his payment of the whole mortgage while the property was occupied by the mother and children (potentially offsetting part of the wife’s post separation contributions) vanished at this point.  Rather than dealing with the matter by virtue of an add back (where such are recognised as the exception) it is better to account for this in assessing contributions. 

7. The relevant amounts of accumulated interest in respect of Suburb G and Suburb H are amounts that are included, as far as I can reckon, in the outstanding loans.  Again, these are matters that, in the context that add backs are the exception, are better taken into account in assessing contributions. 

8. In January of 2019 the husband caused a further amount of approximately $24,000 to be deposited into a AA Bank account, then transferred what remained of it in March 2019 into another AA Bank account, then withdrew and disposed of the balance.  He did not explain what became of those monies, but asserted that they had come from a stamp duty refund (presumably in relation to the Suburb H purchase).  In a financial statement filed two days after he had withdrawn the balance, he failed to identify either the holding or disposal of the monies.  He then asserted that he had held the remaining balance as cash in his home, denying that he was trying to hide the monies.

9. The accounts were not disclosed by the husband until late in the proceedings, he having closed them in March 2019. 

10. Accepting that this was a stamp duty refund, as asserted by the husband, it was properly to be characterised as the property of the relationship.  As part of the purchase of Suburb H using the funds of the parties, there was nothing about the sum that would justify an add back.  Once refunded, however, it has been disposed of by the husband in an unexplained manner, inferentially in a similar fashion to the $133,000 analysed above.  While it was criticised that adding back the refund would constitute a double counting, it does not, as it does not form a part of the value of the Suburb H property, nor ultimately its purchase price, and in any event, the purchase price for Suburb H has not (and could not have) attracted an add back.

11. A notional add back as sought in Item 17, but in the sum of $23,885 as identified at page 11 of the Tender Bundle, will be made.

    CONTRIBUTIONS

12. The parties each gave evidence of a wide range of contributions, with the wife working in various family businesses, and engaging in part-time work outside of the family businesses, as well as being primarily responsible for the care of the children.  The husband’s contributions were centred around the family businesses.  Each recognised the significant contributions made by the other during the relationship, advocating, but for two characteristics of the contributions advanced by the wife, that their contributions be assessed as equal.

13. The facts pertaining to one aspect of the differential identified by the wife were largely uncontroversial.  She has had the primary care of the young child of the parties, X, since separation, caring for him in the broader context of caring for the parties’ now adult daughters, one of whom was still a child at the time of separation.

14. The second characteristic identified by the wife is that her contributions have been rendered significantly more arduous by the family violence perpetrated upon her by the husband.  While the wife identified a discrete percentage adjustment to be attributed to this effect, this issue needs to be assessed, as identified above, as part of the myriad of factors affecting the contributions made by the parties rather than discretely by itself.  It is a matter, however, that requires a consideration of the factual assertions of violence, along with a qualitative assessment of their impact.  It will be necessary to examine the evidence of family violence to determine whether individually, collectively, or in combination with other evidence it is relevant to the qualitative assessment of the wife’s contributions. 

15. The evidence of family violence was admitted provisionally, it being asserted that, absent evidence sufficient to demonstrate that it has rendered contributions more arduous in the Kennon sense, evidence of the family violence becomes irrelevant.  That is, its relevance is contingent on further evidence. 

16. The pivotal evidence in relation to family violence is set out below.  Although the wife also set out instances of alleged family violence from the first phase of their relationship, prior to their divorce and recommencement of their relationship, this at best formed background to the issues of family violence that arose during the de-facto relationship, adding cogency to the description of fear that the wife was subjected to.

17. The wife alleged an incident in 2008 of the husband threatening to burn their home.  The police records (reproduced by the husband at Annexure C of his 31 August 2020 affidavit) contained no reference to a threat to start a fire. 

18. The records produced by the husband did show an attendance by the police on 10 August 2008 recording the husband as telling the police that he “wanted to hang himself on the balcony”.  The husband was taken for assessment at the hospital, but absconded.  The husband denied having absconded. 

19. Somewhat cryptically, in response to questioning about a threat to start a fire,[31] the husband asserted that he did “not recall threatening to start a fire”, but accepted that he had called the police “in a high state of distress” and that he was taken to hospital for assessment, but released.  

    [31] Husband’s affidavit filed 31 August 2020, response to paragraph 81.

20. The wife also asserted that she attended the Suburb T police station in 2009.  She alleges that on this attendance she had bruises on her arms and shoulders.[32]  The wife said that the husband accompanied her to the Suburb T police station on the 2009 occasion, along with Ms B.  Although the wife was challenged in relation to this incident, the husband, in his evidence, agreed that there had been such an attendance at the police station, the wife crying in a room in front of Ms B, the husband attending with Ms D, and the police recommending that the parties should separate. 

    [32] Wife’s affidavit filed 21 August 2020, paragraph 80.

21. The wife further alleged that, following the recommencement of the relationship in 2011 the husband strangled her in the bedroom whilst the children were in another room.[33]  The wife presented a photograph of her neck which bore marks.[34]  There was no challenge to there being marks on the wife’s neck, although she was questioned as to what was depicted as being a rash caused by a chain worn by the wife.  Given the difficulties with the husband’s credibility, I accept the wife’s description of the incident as causing her injuries over his explanation.

    [33] Ibid paragraph 78.

    [34] Ibid exhibit K23; Exhibit C2 (Joint Tender Bundle), p. 132.

22. The wife also described that the husband would slap her during arguments through the relationship.

23. The wife describes that the husband slapped Ms B across the face in 2014 (when Ms B was 14 or 15 years old), and flipped a table and vase over, and was admitted to hospital after his arm was cut in the process.[35]  

    [35] Wife’s affidavit filed 21 August 2020, paragraph 82.

24. The wife deposed to Ms B’s jaw commencing clicking following the incident.  She said that the husband threatened to kick her out of the house if she went to the police. 

25. The husband’s evidence in relation to this incident varied considerably, and in a manner that further detracted from his credibility.  He had previously provided a statement to his solicitors for use in proceedings in the Suburb V Local Court in relation to an application for an Apprehended Violence Order by the wife.  In that statement he asserted that he had tripped and his arm connected with a crystal vase, causing a deep laceration to his arm.  He said in his oral evidence that this was not right, saying that he did not wish to blame the wife for pushing him as he did not want to “expose her to no good in court; sorry for being a gentleman”.  He asserted that he had swung his arm and broken the vase.  Although he denied that he had been in a rage, he had, however, described to his psychologist that he had exploded in a rage at the wife and broken the vase.  He further told the psychologist that the wife was scared of him and did not understand him, saying further that he liked to be dominant and in charge.[36] 

    [36] Exhibit C2 (Joint Tender Bundle), Exhibit A20 p. 120–4; Transcript 8 September 2020, p. 116 lines 40–2.

26. Given the undisputed fact that the incident resulted in a laceration to his arm, coupled with the variability in the husband’s explanations, the wife’s evidence as to this event is preferred.

27. The wife further alleged that in June-July 2017 she observed the husband slap Ms B across her face.[37]  Despite in her affidavit saying that she saw the husband slap Ms B, the wife accepted that she did not see the slap, then described seeing it, but not the contact with the face, and having heard it and seen the husband and Ms B struggling and then seen a mark on Ms B’s face.  The central consistency of the wife’s evidence regarding this event, despite the variability in whether she actually saw the blow struck, is sufficient in the context of the husband’s poor credibility to find that the husband did slap Ms B.  The inconsistency as to whether she saw the slap make contact, as opposed to merely hearing it and seeing the aftermath does not sufficiently undermine her testimony such as to cause me to reject it.

    [37] Wife’s affidavit filed 21 August 2020, paragraph 83.

28. The wife also describes in her affidavit at [84] that on 13 January 2018, a number of months prior to separation, the husband attempted suicide in a State Forest.  He informed Ms B of his intention to end his life, and she and Ms D were able to inform the Police and Ambulance of his location with the result that the husband was found and taken to hospital.  Following the husband’s discharge from hospital, the wife described that Ms D’s mental health has significantly declined.[38]  However, while the wife is convinced that this is the source of Ms D’s mental health issues, this was a matter that requires expert opinion to sustain such a conclusion.  While it is apparent that Ms D has suffered ongoing impact from this incident, there was insufficient evidence available for the court to draw the same conclusion as to causation of mental health issues as the wife.

    [38] Ibid paragraphs 84–85.

29. On 15 May 2018, shortly prior to separation, the husband reported to a psychiatrist that the family was suffering due to his agitation and outbursts.[39] 

    [39] Exhibit C1 (Joint Tender Bundle), Exhibit A21 p. 125–8; Transcript 8 September 2020, p. 119 lines 4–10.

30. Shortly following separation, on 27 November 2018 the parties sent a number of nasty and abusive text messages to each other, contained at Exhibit W1 as follows: 

    F: R u pay for the house of do I call bank to surrender the house? 

    M: Call the bank 

    F: Wanna go halfs? 

    M: I am already paying for your kids you supposed to take care of 

    No call the bank 

    F: First you’re paying our money I earned and you stole out of joint account, so I'm paying for it. You can’t pay for jack shit.  

    I don’t have kids!!! Use your brain while packing your bags out of the house!!!! 

    … to the housing commission where you belong!!!! 

    M: I took money from joint account that I was in title of to support my kids!!!! 

    F: Place junkies and criminals hang out 

    M: Not to fuck around and travel around the world and support Ms R! 

    Watch what you’re saying  

    You belong in forest!!!! 

    F: You are braindead. I could have supported Kids as well as Ms R!!! If only you had brain and decency 

    M: Fuck off from our life!!! 

    F: I’m not going to forest, life is too without you 

    Lowlife 

    M: … 

    F: … 

    Go pack your bags 

    Housing commission with other lowlifes

    Right where you belong 

    M: …

    F: Fucking lowlife wish me dead 

    Fucking lowlifes!!!!!! 

    M: Fuck off 

    F: Pack your fucking bags, off to fucking housing commission!!!!!! 

    M: I’ve got good friends who will take care if us not like Biological father! … 

    …

    F: I’m entitled to live in the house too. Vacate my bedroom, I’m coming in with police to live there with Ms R. No one can tell me to leave!!!! I’m paying for my house!!!! Fun times starts!!!! I’ll show you wishing dead, you lowlife!!!! Watch the fuck out. Moving back in under same roof!!!! No … 

    … gonna live in my house!!!! 

    M: You’ll come close to the house you’ll be taking ny police we already reported you. So try 

    F: Let’s have fun, idiot! It’s my house 

    M: They will send you to court 

    F: For staying in my house???? 

    Get a life!!!! 

    Pack your bags if you don’t that idea 

    Number for police 000. 

    Hurry up!!! 

    You think I’m gonna sleep on the floor and take your shit!!!!???? 

    M: I guess you don’t know the law! 

    F: Just spoke to the lawyer!!! I’m just entitled to live in the house as you!!! Just notified police that I’m coming in. They coming with me!!! 

    Vacate my bedroom 

    I want my cameras uncovered now!!!! I’m paying for this. I want it my way 

    This is my paying you back for wishing me dead in the forest, for calling my woman a prostitute and everything you’ve done!!!! I’m make this shit follow you forever!!!! I don’t forgive 

    You take responsibility for your words and action!!!! 

    House is being watched!!!! 

    You want to be left alone, apologise!!!! 

    None of this is about money!!!! It’s all about your attitude and behaviour towards me!!!! … (legally) … 

    All within the law!!! It’s gonna be very hard for you for what you did! Wish I died in the forest!!!!!! You gonna live with this for the rest of your life!!!!!!  

    You deserve all the shit I’m gonna through at you!!! 

    Suburb T police. As expected!!! 

    Been the before with you 

    Last time you took Ms B with you. What a day it was! 

    9 years later here we go again!!!! How long do you expect a piece of string to be???? 

    Look at you, after 9 years you’ve not learnt anything or matured!!!! 

    For YOUR kids health I’m keeping W Insurance. You can’t even provide health cover for them. 

    Let me know when my … 

31. Some observations may immediately be made about this exchange.  While there should be no expectation that a victim or survivor of family violence need meekly respond to abuse in order to be characterised as the subject of such, the above exchange evidences an equality of arms in the abuse stakes immediately post separation with each (successfully) attempting to hurt, harass and wound the other.  Even taking this into account, the wife faced the prospect of the husband interfering with her home, by forcing her out, or (perhaps with the same effect) by threatening to move in with his then new wife.  This he did while the wife exercised primary care of both X and Ms D.

32. The wife further alleged that the husband installed security cameras at the back and front of the family home.  She subsequently accepted that they were actually installed by the builder, but that the husband “hooked them up”.[40]  The wife says that post separation the husband would call and tell her if she did not put the cameras on he would cancel her credit card or health insurance.  The wife accepted that she did not record such conversations in her affidavit.  However, this appeared to be uncontroversial in the sense that the husband accepted that he had messaged the wife: 

    I want my cameras uncovered now!!!! I’m paying for this. I want it my way.

    [40] Transcript 7 September 2020, p. 84 lines 21–23.

33. She described placing tape over the cameras so that she could not be monitored by the husband.  She said that she formed the view that she was being watched on the basis that the husband would call her and describe what she was doing. 

34. The husband accepted that he would access the cameras (remotely) as  

    every now and then I would get to it.  And when I found out that there’s somebody living in the house and no one is, you know, confirming that, I would like to get a confirmation.[41]   

    [41] Transcript 8 September 2020, p. 106 lines 39–41.

35. He did not see any wrong in watching his wife and daughters through the security cameras.  He said that he was being lied to (in relation to the wife’s relationship with Mr X) and was very disappointed.  He further messaged the wife: 

    This is my paying you back for wishing me dead in the forest,  for calling my woman a prostitute and everything you’ve done!!!!  I’m make this shit follow you forever!!!!  I don’t forgive 

    House is being watched!!!! 

36. On 3 December 2018 the husband attended the family home with the police.  The wife accepted that she and the husband did not interact on this occasion.  The police record the husband demanding that the wife to provide the hard drive for the CCTV.  He would not leave until the hard drive was produced.  The husband’s fiancée recorded the interactions with the police.  The wife also said that she told the police that the husband had messaged her from outside, calling her an “idiot” and asserting that he and his new wife would be moving into the home.[42]  This statement by the wife was not contained in the police incident report. 

    [42] Wife’s affidavit filed 21 August 2020, paragraph 90; Transcript 7 September 2020, p. 86 lines 14–24.

37. The husband messaged the wife to the effect “Gonna live in my house,” to which the wife replied to the effect “You come close to the house, you’ll be taken by the police.  We already reported you so try.”  The exchange continued in hostile terms.  The husband said that he had sent the messages as he had found out about Mr X, who was, he said, provoking a fight with the husband.  The husband said that he was emotional and angry.  Whatever the detail of the interaction, the wife was subjected to the husband’s rage, with his attendance at the home, in circumstances where she was the one looking after X and Ms D.

38. Shortly after this attendance the wife applied for an Apprehended Violence Order. 

39. There can be little doubt that the husband engaged in serious family violence, involving physical violence, behaving in a threatening manner toward the wife, threatening to have her removed from her home, watching her in the family home through cameras, threatening her support, suddenly removing finances from the wife, exhibiting anger at the wife’s commencement of a new relationship and seeking to punish her in relation to that relationship, assaulting their daughter Ms B and, while in a state of anger, damaging property in the presence of the family.  This he did in circumstances where he knew the wife to be afraid of him, and where he wished to be “dominant” and “in charge”.[43] 

    [43] Transcript 8 September 2020, p. 116 lines 40–43.

1. It may also be accepted that the wife responded, on occasion, abusively, messaging the husband in a hostile, hurtful and provocative manner.  Such responses from the wife do not negate the fear held by her of the husband.  Further, her resistance does not negate the pressure of the control the husband sought to impose on her in seeking to, and in fact monitoring her through the cameras post separation as she provided primary care for the children of the relationship. 

2. However, while the wife sought to attribute to the husband responsibility for mental health issues now experienced by their daughter, she did not bring evidence sufficient to do so.  In order to make good this causal link the wife would have needed to call appropriate expert evidence, which she did not do.  The email from school staff at K25 of the wife’s affidavit did not demonstrate adequate expertise to link mental health issues to the acts of the husband, although what was described there was consistent with what the wife described of the husband's acts. 

3. It might be considered that the circumstances established by the wife, where she was subjected to violence, where she dealt with the husband’s violence to their daughter, where she conducted the post separation parenting of the children under threat of surveillance, and threat of eviction by the husband, would constitute the sort of circumstances that could support a finding that her contributions were made significantly more arduous in a qualitative sense by the conduct of the husband.  The difficult issue is that there is little evidence of the subjective impact upon the wife, even from the wife in her evidence.  It is that subjective impact that leads to the contributions being rendered significantly more arduous.  While it is true to say that there is no necessity to lead expert evidence as to impact (although in an appropriate case such evidence could be a powerful consideration), there is a necessity to lead not only the evidence of the adverse incidents, but also of their subjective adverse impact, even if that evidence is sourced from the wife herself.

4. It is in this respect that the wife’s case as to significant impact is weakest.

5. However, her case as to impact is not completely bare.  Against the fertile ground of abuse and violence that the wife has established, the evidence of impact falls from the husband’s own representations.  Those representations concede that he well understood the deleterious impact that his conduct had on the wife and family.  The husband reported to his psychiatrist that he recognised that the wife was scared of him.[44]  This recognition of the wife’s fear was connected with his assertion that he liked to be “dominant” and “in charge”.[45]  Further to this he told his psychiatrist that the family was suffering due to his agitation and outbursts.[46] 

   [44] Exhibit C2 (Joint Tender Bundle), Exhibit A20 p. 120–4.

   [45] Ibid p. 121.

   [46] Exhibit C2 (Joint Tender Bundle), Exhibit A21 p. 127.

6. It may then be concluded that the wife’s many and varied contributions to the family and the property of the parties took place in the context of fear and suffering caused by the conduct of the husband.  In terms of a qualitative assessment of those contributions it may be concluded that they were rendered significantly more arduous, by the circumstances created by the husband, being contributions effected by the wife while bearing a burden of fear and suffering that the husband’s conduct caused her to carry.

7. It may be observed that, against the background of the previous relationship between the parties, the wife made a myriad of different contributions against a spectre of physical abuse of herself and the children, under a condition of fear, and known to the husband to be so.  It was not only known by the husband to be so, but was connected to his desire to be dominant and in charge.  By this means the wife was called on to carry an additional load as she engaged in her various contributions.

   DISCUSSION 

8. Each of the parties seeks an adjustment of the property interests that would involve the settlement of property onto the wife, although in different terms.  In the context of a relationship where together they have accumulated significant property, it is just and equitable to adjust the interests, particularly where both tacitly concede that it is necessary to do so.

9. The pool of property may be reckoned as follows.

10. Total assets stand at $1,941,592, with debts of $1,137,060, and add backs of $114,845 in legal costs, and other add backs of $156,885.

11. The net non-superannuation pool is therefore assets, including notional add backs, of $2,213,322, less debts of $1,137,060, totaling $1,076,262.

12. The parties also hold combined superannuation interests of $66,180, although they sought no adjustment of such, a position that favors the wife.

13. Although a financial resource was nominated relating to the husband’s possible total and permanent disability claim against his insurance, the evidence did not establish that there is any likelihood of the receipt of such monies by the husband.

14. The contributions made by each of the parties during the relationship may be reckoned as favouring the wife, 55-45, when the impact of the husband’s conduct upon the myriad of contributions made by the wife is taken into account, as described above. 

15. Further, the wife has had the care of X post separation, along with the care of Ms D until she turned 18.  Whatever the source of the difficulties faced by Ms D, the wife’s experience in providing support for her has been to shoulder a particularly heavy burden.  Those contributions have taken place in the context of continued harassment by the husband, as seen in his insistence on monitoring the wife and the goings on in the household, and in his threats to either move into the home or to force her out of the home.  Her post separation contributions further shift this to 60-40 in her favour.

16. In terms of s 90SF(3), the husband is currently in receipt of a significant income and other benefits that, between what he receives from his business, and what he receives by means of insurance payments, equates to approximately $200,000 per year. Further, he has an intention to return to his work, noting his evidence that he has taken steps to expand and benefit the business. It may be taken that his prospects show no sign of weakening.

17. The wife may also return to employment, but not, it seems, of the nature to secure the lavish lifestyle that the husband describes that they previously enjoyed, nor the lavish lifestyle that he describes he currently enjoys.  It may be thought that she may shortly be able to return to at least part-time employment of the nature that she has previously engaged in, as X is soon to start school.  However, the nature of her previous employment, as it informs her prospects for employment, likely consigns her to a future that not only fails to reflect the parties’ position during the relationship, but also does not approach the husband's current lifestyle.

18. These factors together warrant a further adjustment, in her favour of 65 to 35.

19. The effect of such an adjustment, when considering the add backs in respect of legal fees, and that she would receive the Suburb G property with the equity held in that property, is that she would receive an asset of $322,000, along with other chattels, bank accounts and the notional add back of approximately $114,000.  Without any cash adjustment, this totals $436,000.

20. 65 per cent of the net pool equates to approximately $700,000. 

21. To bring the adjustment to 65 to 35, a cash payment of $264,000 is necessary, falling a little short of the $275,000 sought by the wife.

22. Taking a global view of the effects of such an adjustment, it is a just and equitable resolution of the parties’ property interests, in the context of their relationship and aftermath. It reflects their contributions, along with the s 90SF(2) matters. The final result of the assessment of those matters does not work an outcome that is other than just and equitable.

    SPOUSAL MAINTENANCE 

23. The wife asserts that she is unable to support herself and seeks that the husband pay spousal maintenance at $800 per week until 1 September 2023 (by which time it may be expected that X will be at school).

24. The power to order spousal maintenance pursuant to s 90SE is conditioned upon the order being “proper”, on the spouse being unable to adequately self-support, and where the other spouse is reasonably able to provide that support. These matters are to be considered through the considerations set out at s 90SF(3).¹⁵   

25. Of the many considerations set out at s 90SF(3), a number emerged as of greater importance.

26. The wife is in receipt of a means tested Centrelink payment. Section 90SF(4) of the Act provides that such payments are not to be counted as part of assessing a party’s financial circumstances:

    In exercising its jurisdiction under s 90SE, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit. 

27. In relation to her capacity to derive an income (other than a means tested government payment), the wife said that she has not engaged in paid employment since 2016, although for the 10 years prior to that she worked as a medical receptionist.  The wife accepted that she has not recently made an attempt to find employment.  

28. The wife also asserted that she has demanding care requirements for their then 18 (now 19) year old daughter.  The wife said that she frequently has to drive their daughter, Ms D, to appointments and that the daughter cannot be left at home alone, for fear of her engaging in self-harm.  

29. The wife asserted during her oral evidence that she has a particular need to care for Ms D: 

    I have to look after Ms D as her doctor advised me she needs to be under watch.  I have to get rid of medication and sharp objects.  She said you just can’t leave her alone by herself.  Even when I go to shopping Ms D doesn’t stay at home by herself.  She does get anxiety attacks, panic attacks.  She is always next to me.[47] 

    [47] Transcript 7 September 2020, p. 59 lines 13–17.

30. The wife said that by virtue of Ms D’s current condition it would not be open for her to engage in even the part-time two days per week that she had previously engaged in as a medical receptionist.  

31. However, the wife said that both of her daughters have part-time employment outside of the house.  Ms B (then aged 21) is currently earning $300 per week at Y Company, Ms D (then aged 18) an estimated $250 per week at Z Company. 

32. Further to that, as Ms D and Ms B are now both adults, they do not fall either within s 90SF(3)(c) as children of the relationship who have not yet attained 18 years of age, nor as persons whom the wife now has a duty to maintain, or to continue to support.

33. The wife does, however, have the primary care of X, now three years old.  X is in childcare some time each week, and it has not been established by the wife that her care of X, or other matters, prevent her from returning to the sort of part-time work arrangements that she previously engaged in.  The wife is seeking a defined period for support.  It may be thought that as X grows older the mother’s prospects for being able to engage in employment are likely to increase, reflecting her position that the period should be limited.

34. The wife was questioned about whether she is in a relationship of a nature that bore upon her need for spousal maintenance (pursuant to s 90SF(3)(m)). She accepted that she had formed an intimate relationship with Mr X in about September 2018. She says that although the intimate aspect of the relationship did not endure beyond March 2019, a friendship did. This included him staying at the wife’s home after surgery in April 2019, while he recovered. She says that as thanks for this, he offered to paint the wife’s townhouse. This relationship does not bear upon any issue in relation to spousal maintenance.

35. The husband will, it may be expected, be subject to a child support obligation in respect of X.  While the evidence suggested that he has previously accrued arrears, as best as can be determined this did not appear to be other than an error with the Australian Taxation Office that has been corrected by the husband.

36. It is also necessary to consider the property adjustment order that is being made in this case.  It is an order that will require the husband to raise funds, presumably increasing the debt that he will be required to service, or to potentially rehouse.  Given his level of income and benefits (described previously and further below), even with such an added burden it could not be thought that he will lack the capacity to provide maintenance to the wife.

37. It may also be observed that the property settlement will give the wife some assistance in housing herself, although it will leave her in a position where she still has to fund the difference between the property received and the outstanding mortgage on the property that she will receive.  Her position, in this sense, is that her housing costs will be greater than those that she has incurred pending the trial of the matter, when she did not have responsibility for a mortgage.  She will however, be in receipt of property interests greater than she currently holds, although she should not be expected to deplete such in order to support herself.[48]

    [48] See Bevan & Bevan (n 5).

38. In relation to s 90SF(3)(g), it was uncontroversial that the parties enjoyed a lavish lifestyle during the currency of their relationship, an arrangement that has persisted so far as the husband is concerned since the end of their relationship. The husband explained that he had a lavish lifestyle when with the wife, and continued a lavish lifestyle, although not to the standard he had previously enjoyed. There is no indication that the application made by the wife approaches the lavish lifestyle that she may have previously enjoyed.

39. The wife’s application was challenged by the husband, particularly in relation to the expenses asserted by the wife.  The largest component of the expenses set out by the wife in her financial statement were those drawn from Part N, relating to ‘other expenses’.  

40. Although the wife set out a number of household expenses in this part of her financial statement, under cross-examination she accepted that a number of those expenses should be apportioned with the parties’ children, including their two adult daughters.   

41. In relation to capacity, the husband is now in receipt, whilst he remains unfit for work, of an income protection insurance benefit, which pays him a gross amount of approximately $31,000 each two months.  While a component of this is the reimbursement of the premiums that remain payable in respect of that policy, those premiums are currently paid by the husband’s company.  He says that this is a loan, or else an amount that he will ultimately have to pay tax on (presumably as income).  At the same time the husband still receives significant benefits from the business.  Although he attributes these to business expenses as the business is expanded and kept viable, he receives benefits from them, including the provision of a Motor Vehicle 3 and Motorcycle 1, along with fuel expenses, insurance, and internet expenses.  This sees him receiving benefits from his company and the insurance of approximately $200,000 per year (gross). 

42. The husband accepted that he paid for most of his expenses by credit card, but that he also withdrew amounts of cash.  It was put to him that he had withdrawn in excess of $50,000 in cash between 2 November 2018 and 7 June 2020.  He was unable to answer whether this was the case.  He was then asked the maximum amount of cash that he had held at home during this period.  Initially, he was unable to answer.  Subsequently, after being asked about travel that he had undertaken during this period (and failing repeatedly to comprehensively answer that query) he eventually accepted that he had travelled to Asia, spending $10,000 in cash, and to Queensland, spending $10,000 in cash.  Accordingly, he then conceded that he had held amounts of up to $10,000 in cash at the home. 

43. The husband was also questioned in a more global sense about his expenditure post separation to explain the disposal of his insurance receipts and benefits and his drawing down of the parties’ line of credit.  Opaquely the husband asserted that monies he had received were put into the “mutual pool of assets”.  He was, as identified above, unable to explain in full how he had disposed of the amount taken form the joint line of credit.  There should not be a conclusion drawn that somehow the husband’s funds were expended for the mutual benefit or support of the family. 

44. Given the extent of the husband’s income from the insurance, and company benefits, coupled with his concessions in respect of cash holdings and lavish lifestyle, it can be comfortably concluded that, despite a lack of precise understanding of his finances, in the context of his somewhat evasive evidence, that he has capacity in excess of the amount sought by the wife by way of spousal maintenance. 

45. The question that arises is the extent to which it is proper to order the wife’s maintenance.

46. The wife, by her financial statement, attests to a shortfall in income of approximately $1,200 per week (when her predicted post settlement borrowings are factored in).  The shortfall does not factor in any part-time income that she may be able to derive, noting that she described previously working two to three days per week, for about 8 hours per day, earning $27 per hour.

47. It is by no means clear what work may, in the short-term, be able to be obtained by the wife, but she has also demonstrated the capacity to derive an income that would ameliorate the shortfall.

48. The shortfall is further ameliorated by her acknowledgement that some of the expenses should be shared with her now adult daughters who live with her, although these were established to a minor level.

49. It may be observed that the wife does not seek to make the entire indicated shortfall up through maintenance, seeking $800 per week, where the shortfall is identified at $1,200 per week.  Given the matters identified above, it was appropriate that the claim be less than the total shortfall, to take into account possible future income and the sharing of expenses with the adult daughters.  Of those expenses that should be shared with the adult daughters, the wife accepted that there should be a division in respect of food, supplies, repairs, gas, electricity, some petrol, clothing, medical, and chemist expenses.  The wife did not accept that a portion of the mortgage payments and housing expenses should be paid by the daughters.

50. If, as she generally accepted, half of the “children” column should be the responsibility of Ms D, then that reduces the wife’s expenses by approximately $270 per week.  Even allowing a portion of the housing expenses to be met by the daughters does not bring the expense level down to that claimed by the wife.  It should be recognised that if the wife is able to obtain some employment, her position will be further improved.

51. Under those circumstances, where the wife has not yet secured employment, where there is uncertainty as to her employment in the short-term, where even if she does obtain employment she does not share the prospects or lifestyle enjoyed by the husband (and previously herself), and where she has the primary care of X, the total amount sought by the wife (for the limited period for which it is sought) falls within the description of proper in s 90SF(2), and orders should be made accordingly.

I certify that the preceding one hundred and seventy-two (172) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

Associate:

Dated:       21 June 2021

ANNEXURE A

Final orders sought by the applicant wife 

1. That within 42 days of the date of these Orders, the Husband pay $275,000 to the Wife. 

2. That simultaneously with Order 1, the Husband do all acts and things and sign all documents to transfer to the Wife all of his right, title and interest in the property at ... M Street, Suburb G, New South Wales, more fully described as Folio Identifier ... (“the Suburb G property”); 

3. That simultaneously with Order 1 and 2 above, the Wife discharge the K Bank mortgage BSB ... and K Bank Line of Credit BSB ... being registered mortgage ... (“the K Bank mortgage”). 

4. That within 42 days of the date of these Orders, the parties do all acts and things to close their joint savings bank accounts, with the Wife to retain the balance of funds in each of those accounts. 

5. That the Husband pay to the Wife spouse maintenance in the sum of $800 per week commencing 7 days from the making of these Orders and every week thereafter until 1 September 2023. 

6. That in the event that the Husband fails to comply with Order 1 then: 

6.1. The Husband immediately vacate the property located at L Street, Suburb H NSW (Folio Identifier ...) (“the Suburb H property”); and 

6.2. The Wife be appointed as his Trustee to sell the Suburb H property including but not limited to signing all documents necessary on his behalf, with the Wife to have sole control of all aspects of the sale, including appointing the conveyancing solicitor, real estate agent, marketing the property and sale price but to keep the Husband’s solicitor informed of all steps taken. 

6.3. That the proceeds from the sale of the Suburb H property be disbursed as follows: 

6.3.1. Payment of legal, selling and marketing costs related to the sale; 

6.3.2. Payment of Strata Levies, Council and Water rates outstanding at the time of settlement; 

6.3.3. Payment of the J Bank Home Loan BSB ... (“J Bank Loan”); 

6.3.4. Payment of $275,000 to the Wife plus interest in accordance with the Family Law Rules from 42 days after the date of these Orders to date of payments.

6.3.5. Payment of any remainining balance to the Husband. 

7. In the event that the total net proceeds received from the sale of the Suburb H property, in Order 6.3.4. above, is less than $275,000, then: 

7.1. The Wife be appointed as the Husband’s Trustee to sell the Company, Business C Pty Limited, ACN: ... including but not limited to signing all documents necessary on his behalf, with the Wife to have sole control of all aspects of the sale, including appointing the solicitor, selling agent, marketing the business and sale price but to keep the Husband’s solicitor informed of all steps taken; 

7.2. That the proceeds from the sale of Business C Pty Limited, ACN: ... be disbursed as follows: 

7.2.1. Payment of legal, selling and marketing costs related to the sale of business; 

7.2.2. Payment to the Wife of the amount, being the difference between $275,000 plus interest in accordance with the Family to date of payments, less the amount received by the Wife in accordance with Order 6.3.4 above; and 

7.2.3. Any remaining balance to be paid to the Husband. 

8. That pending the Husband complying with these Orders, that the Husband be restrained: 

8.1. from drawing down on the J Bank Loan or the K Bank mortgage; and 

8.2. dealing in any way with his shareholding in Business C, ACN: .... 

9. That the Husband indemnify the Wife and keep her indemnified in relation to any Loan Accounts in her name to the Company, Business C ACN: ... or any liability in relation to her having been an officer or employee of Business C ACN: .... 

10. That otherwise each party be solely entitled to the exclusion of the other, to all other property currently registered in his/her name, either individually or jointly with another person, or in his/her current possession or control at the date of these Orders, including but not limited to real property, bank accounts, businesses, money, superannuation and leave entitlements, shares, jewellery and personal effects, presently in his/her possession. 

11. That in the event that either party refuses or neglects to execute any deed or instrument, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.

12. That the Husband pay the Wife’s costs of and incidental to this Application. 

Final orders sought by the respondent husband 

1. That the wife shall do all acts and things to cause any mortgage or mortgages (including mortgage to K Bank) secured on M Street Suburb G New South Wales (“Suburb G”) shall be discharged within 3 months hereof (“the time”) 

2. That simultaneously with the wife discharging any mortgage or mortgages secured upon Suburb G in accordance with the preceding paragraph the husband shall cause the whole of his right title and interest in Suburb G to be transferred to the wife. 

3. That should the wife fail to discharge any mortgage secured upon Suburb G within the time then the parties shall do all such things and sign all deeds, documents and instruments as may be necessary to list for sale and sell Suburb G at a price as agreed between the parties and in default of agreement for a period in excess of fourteen (14) days at a price fixed to be a fair market value of Suburb G by a valuer jointly appointed by the parties or in default of agreement by them, appointed on application by either of them by the President or other senior office bearer for the time being of the New South Wales Division of the Australian Property Institute or its successors acting as an expert and not as an arbitrator. Upon completion, the parties shall, after adjustment for Municipal Council rates and Metropolitan Water Sewerage and Drainage Board rates, distribute the proceeds of sale as follows:- 

i) In discharge of any mortgage secured upon Suburb G 

ii) In payment of real estate agent's commission, legal and other costs on sale. 

iii) In payment to the wife of the remaining balance of the proceeds of sale. 

4. That the husband shall be declared the sole owner to the exclusion of the wife of his interest in L Street Suburb H New South Wales ("Suburb H") 

5. That the husband shall indemnify the wife and keep indemnified in relation to any loan secured by way of mortgage over Suburb H 

6. That the husband shall be declared the sole owner, to the exclusion of the wife of Business C and shall indemnify the wife and keep her indemnified in relation to any liability of or relating to Business C. 

7. That except as otherwise specified herein each party shall retain sole right title and benefit to all items of property and financial resources presently in their name, possession or control respectively. 

8. That should either party fail refused to do any act or thing or sign any document necessary to give effect to these orders then the registrar of this court is authorised to do such act or thing or sign such document pursuant to section 106A of the act

9. That the application for spouse maintenance shall be dismissed 

10. That all outstanding applications be otherwise dismissed