Kwon & Reece
[2022] FedCFamC1F 203
•31 March 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kwon & Reece [2022] FedCFamC1F 203
File number(s): MLC 4678 of 2020 Judgment of: BENNETT J Date of judgment: 31 March 2022 Catchwords: FAMILY LAW Legislation: Family Law Act 1975 (Cth) Cases cited: Bevan & Bevan (2013) FLC 93-545
Browne v Green (1999) FLC 92-873
Cerini [1998] FamCA 143
Chorn v Hopkins (2004) FLC 93-204
GVC v HPC (1998) FamCA 143
Jabour & Jabour [2019] FamCAFC 78
Marker v Marker, (1998) FamCA 42
Omacini and Omacini (2005) FLC 92-218
Trevi & Trevi [2018] FamCAFC 173
Williams & Williams [2007] FamCA 313
Division: Division 1 First Instance Number of paragraphs: 226 Date of hearing: 7, 8 & 9 March 2022 Place: Melbourne Counsel for the Applicant: Mr Williams Solicitor for the Applicant: Coote Family Lawyers Counsel for the Respondent: Mr Bartfeld QC Solicitor for the Respondent: Hargreaves Family Lawyers ORDERS
MLC 4678 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KWON
Applicant
AND: MR REECE
Respondent
ORDER MADE BY:
BENNETT J
DATE OF ORDER:
31 MARCH 2022
THE COURT ORDERS THAT:
1.The Court declares that pursuant to s. 90SM(3) that it is satisfied that in all the circumstances it is just and equitable to make an Order under s. 90SM(1).
2.Within 90 days (“the date”), the Applicant pay to the Respondent the sum of $963,815 (“the payment”).
3.That all extant maintenance orders be and are hereby discharged from the date of the payment.
4.In the event the whole of the payment has not been made by the date, the Applicant, at the Applicant’s expense, do all such things and sign all documents necessary to effect sale of the real property situate at and known as C Street, Suburb J (“the Suburb J property”) (“the sale”), with the proceeds of the sale distributed as follows:
(a)First, to pay all costs, commissions and expenses of the sale;
(b)Second, to discharge the mortgage or any encumbrance secured against the Suburb J property;
(c)Third, the payment to the Respondent, plus interest calculated on a daily basis in accordance with Rule 10.17 of the Federal Circuit And Family Court Of Australia (Family Law) Rules 2021(Cth); and
(d)Finally, the balance to the Applicant.
5.The Applicant forthwith do all acts and things and sign all documents necessary to transfer registration of the Motor Vehicle 1 (…) to the Respondent, at the Respondent’s expense.
6.Paragraphs 7 to 11 of these Orders are binding on Super Fund 1 (“the Trustee”), being the trustee of Super Fund 1 (“the Fund”).
7.The base amount to be allocated to the Respondent out of the interest of the Applicant in the Fund (member number: …28) is $212,979 (“the base amount”).
8.In accordance with s 90XT(1)(a) of the Family Law Act 1975:
(a)The Respondent is entitled to be paid from the Applicant’s interest in the Fund, an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount specified in Order 7 above; and
(b)The Applicant’s entitlement in the Fund is correspondingly reduced.
9.Paragraphs 10 and 11 have effect from the operative time and the operative time is four business days from the date of service of a sealed copy of these Orders on the Trustee.
10.The Trustee shall do all such acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975, the entitlement created in Order 7 of these Orders; and
(b)Pay the entitlements whenever a splittable payment becomes payable from the Applicant’s interest.
11.After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS Regulations”), the Applicant and Respondent shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Respondent’s request in accordance with the SIS Regulations, for the rollover or transfer of the non-member spouse interest to a complying superannuation fund of the Respondent’s choosing in accordance with the SIS Regulations.
12.The Applicant otherwise retain, to the exclusion of the Respondent, all of her right title and interest in the following:
(a)All savings in her name;
(b)Her Motor Vehicle 5;
(c)Her superannuation entitlements, save as otherwise provided for in these Orders; and
(d)Her personal belongings and chattels.
13.The Respondent otherwise retain, to the exclusion of the Applicant, all of his right title and interest in the following:
(a)All savings in his name;
(b)His superannuation entitlements with Super Fund 2; and
(c)His personal belongings and chattels.
14.The Applicant pay and indemnify and keep the Respondent indemnified with respect to:
(a)The B Bank home loan (#...01);
(b)The B Bank portfolio loan (#...33);
(c)The property dispute liability and any legal fees associated with those proceedings; and
(d)Her B Bank credit card.
15.The Respondent pay and indemnify and keep the Applicant indemnified with respect to:
(a)His NAB credit card (#...44);
(b)The funds loaned to him from his mother, Ms E; and
(c)Any and all other liabilities held in his name, now or in the future.
16.That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)Each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Order;
(b)Any money standing to the credit of the parties in a bank account in their own name are to be retained by that party;
(c)Each party shall be solely liable for all debts (including credit card and any taxation liabilities) and personal loans in their own name;
(d)Each party foregoes any claims they may have to any superannuation or other employment benefits belonging to or earned by the other;
(e)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
17.Pursuant to Rule 12.28 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, I will certify that it was reasonable for each party to retain Counsel, including Queen’s Counsel for the husband, to attend and to appear on their behalf.
18.Any party wishing to make an application in relation to costs notify the other party of the amount of costs claimed and notify my Chambers in writing that an application for costs is to be made. Upon being notified of a costs application, I will make directions in Chambers for filing of written submissions in advance of oral argument AND IT IS DIRECTED that my Chambers allocate a date for hearing (estimated to take 1 hour) which, as far as practicable, accommodates the availability of Counsel.
19.That all applications and responses be otherwise dismissed and the matter be removed from the docket of the Honourable Justice Bennett.
THE COURT NOTES THAT:
A.Pursuant to section 90ST of the Family Law Act 1975 (Cth) the parties agree that these orders shall as far as practicable finalise their financial relationship and avoid any further proceedings between them.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kwon & Reece has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BENNETT J:
INTRODUCTION
These proceedings are between the applicant Ms Kwon and the respondent Mr Reece for a final alteration of property interests following the breakdown of their relationship. Given that there was no dispute about the existence of the de facto relationship I will refer to the applicant as the wife and to the respondent as the husband.
THE PARTIES AND THE RELATIONSHIP
The wife is 46 years of age having been born in Country F in 1975. She arrived in Australia in 1986 and became an Australian citizen in 1988. She is a medical professional. The wife deposes that her gross income for the 2021 financial year was approximately $365,000 from her public and private practices with some ability to salary sacrifice. The wife deposes to being in good health.
The husband is 46 years old having been born in New Zealand in 1975. He is also an Australian citizen. He has not been in paid employment since 2012 save for a short period in Country AA in early 2013. He is about to commence studies for a Certificate IV in the trades industry. The husband has been diagnosed with anxiety to which is prescribed medication. The husband has been diagnosed with Autism Spectrum Disorder (ASD) Level 1.
The parties met in December 2012. They commenced a relationship in February 2013 when the wife discovered that she was pregnant for the first time. They lived in a genuine domestic relationship from February 2013 until January 2020.
There is a child of their relationship, X, born in 2018. Final parenting orders were made by Justice Macmillan, by consent, on 1 March 2022 following a judicial settlement conference. X is the only child of either party.
In April 2020 the husband moved out of the family home and into rented accommodation a few streets away. X currently spends time with the husband for four out of fourteen nights plus one whole day. Upon X turning five years old in 2023, her time with the father will increase to five out of fourteen nights. There is provision for special days and school holidays. There is no assessment or formal agreement in relation to child support.
Neither party has repartnered.
THE HEARING
The hearing was of three days duration. Mr Williams of counsel appeared on behalf of the wife and Mr Bartfeld QC appeared on behalf of the husband.
The hearing was conducted face to face in the Melbourne Registry.
APPLICATIONS AND EVDIENCE RELIED UPON
The parties prepared an electronic court book which was relied upon for the hearing.
The wife seeks a division of non-superannuation property interests in the proportion of 80% to herself and 20% to the husband.
The wife relies on her Amended Outline of Case dated 6 March 2022.[1]
[1] Exhibit “W1”.
The husband seeks a division of non-superannuation property interests in the proportion of 32.5% to himself and 67.5% to the wife.
The husband relies on his Amended Outline of Case dated 6 March 2022[2] which was further amended on the second day of the hearing to include paragraphs 136 to 160 of the husband’s trial affidavit sworn on 9 November 2021 in response to an affidavit of the parties’ nanny which was belatedly relied upon by the wife. In his closing address, Mr Bartfeld QC for the husband sought to rely on the affidavit of Dr G sworn or affirmed on 14 October 2021 and filed on behalf of the wife. That affidavit was included in the electronic court book under the heading “Trial Evidence - Wife” but not referred to in the wife’s amended case outline as a document to be relied upon. By correspondence dated 10 March 2022 (Exhibit “C3”), the wife’s practitioners confirmed that the wife does not oppose the affidavit being put into evidence. Accordingly, I have regard to it.
[2] Exhibit “W2”.
As part of the husband’s entitlement to an alteration of non-superannuation assets, both parties propose a transfer by the wife to the husband of the Motor Vehicle 1 which he currently drives and that the husband retain all other property of which he stands possessed including $16,500 which he has in the bank being the unused balance of an interim payment made to the husband on 15 July 2021 pursuant to an Order made on 14 July 2021. There is also agreement that the husband’s legal costs for these proceedings, already paid to his solicitors, should be added to the property divisible between the parties.
Each party has a superannuation interest. During the hearing the parties agreed on a superannuation split by the wife in favour of the husband. I will make an order in that regard in the terms sought by them.
OUTCOME
I am satisfied that it is just and equitable to make orders altering the interests of the parties in superannuation interests and in their non-superannuation property.
I have found the non-superannuation property interests of the parties to be valued at $3,675,961 and have determined that a division in the proportions of 70% to the wife and 30% to the husband is appropriate. I am satisfied it is appropriate to make orders splitting the wife’s superannuation interest as agreed.
In relation to the husband’s application for spousal maintenance, I am not prepared to make any order for ongoing spousal maintenance.
RELEVANT FACTUAL HISTORY
The parties commenced cohabitation in February 2013 and separated under the one roof in January 2020.
In December 2009 the wife had purchased an investment property at H Street in Suburb BB for $765,000 with mortgage finance.
In December 2011, the wife purchased a property in C Street, Suburb J (“the former family home”) for $2,180,000 plus stamp duty and costs. The wife undertook renovations to the property in mid-2012, prior to meeting the husband. The wife describes renovations to all bedrooms, repainting of interior walls and having the property rewired. This was the property in which the wife was living when she met the husband.
The husband returned to Australia in June 2012 after closing his business, K Company, in Country CC. The husband lived with his mother. Once in Australia, the husband found his 15 years of experience did not translate to the Australian job market and that he lacked the necessary formal qualifications. He spent six months seeking employment by making applications, placing calls and attending interviews without success.
The parties met in December 2012. The wife described:
HER HONOUR: Where did you meet him?‑‑‑I met him on the internet.
All right. Any particular part of the internet?‑‑‑It was called DD Online.
All right. And tell me how you got together?‑‑‑I saw his profile online, and he lived locally. We communicated, met up and very early on in the relationship, I thought he was a breath of fresh air. He was fun. He was charming. He was very attentive.
Well, it wasn’t as if he had work to distract him?‑‑‑And he – he was taking calls for various meetings and interviews, and he was – he seemed to be working or setting up something at the time.
And you were in Australia at this point?‑‑‑This was – yes, and I was living in Suburb J, and he was living with his mother in Suburb EE, and there was an – there was an early unexpected pregnancy.
Which, unfortunately, didn’t proceed, and is that when you decided to stay together?‑‑‑By that stage, it was a bit complicated. He had been offered a trial job in Country AA and he left, and then because of the pregnancy he came back, and I miscarried, and then he just stayed on.
The wife’s evidence was “I did clarify that I wanted to have a family and I wanted to have a baby. That’s why I bought a family home. […] I didn’t buy a four bedroom house of that I could live in it on my own.”
In January 2013 the husband was offered employment in Country AA as manager of a local company. The husband said that it was not a trial job and was, more accurately, employment with a usual probationary period. The husband resigned within a month and returned to Melbourne upon discovering the wife was pregnant and an agreement between them that he should return to Australia. The pregnancy later resulted in a miscarriage.
In 2014 the husband enrolled in a course at N University. The wife paid for the course. He did this at the suggestion of a friend who is a recruiter. It did not result in employment.
In November 2014 the husband began attending upon a Clinical Psychologist, Mr O in regards to the parties’ relationship difficulties and stress relating to his state of employment.
In April 2015 the husband was diagnosed with depression and prescribed anti-depressant medication which he continues to take.
In 2016 the husband proposed marriage to the wife who accepted. The parties were never legally married. The wife describes “I had multiple miscarriages since 2013. I wanted to start a family, but Mr Reece was reluctant. We finally agreed to commence IVF in May 2017. I underwent egg collection in June 2017. […] I fell pregnant with X on our second cycle in late 2017. I was 42 years of age at the time.” The wife was a medical professional with a taxable income from all sources of $408,308. The husband, also born in 1975, would have been 42 years old. He had been out of the workforce for five years.
The wife was placed on bedrest in May 2018 due to complications with her pregnancy. The wife was on maternity leave for 5 months following the birth of X in 2018. The husband commenced sleeping in another room after X was born because the wife wanted to co-sleep with X in the main bedroom and the husband thought that co-sleeping with two parents could be dangerous. The parties remained sleeping in separate bedrooms until the husband vacated the former family home.
The parties had a long running, expensive and unsuccessful property dispute with their neighbours. The husband was responsible for conduct of that dispute until just before the hearing commenced when the wife took over conduct of the dispute. The parties lost and there is a liability in respect to legal costs.
The parties attended couples counselling with a clinical psychologist, Ms Q, from 2015 to November 2019.
In January 2019 the parties hired a nanny, Ms R to assist the husband in the care of the child while the wife worked. The wife returned to work for 3 days a week in February 2019.
The father deposes, and the mother does not deny, that the wife “consulted an Obstetrician, a specialist in women with cervical insufficiency, to discuss a second pregnancy without talking to me.”
The husband had been seeing a psychologist from 2014. In 2019, the wife suggested to the husband that he ask his psychologist if he (the husband) might have a personality disorder. The husband’s psychologist told the husband that he did not consider that the husband had a personality disorder but that he would test the husband for Autism Spectrum Disorder. In June 2019 the husband was diagnosed with Autism Spectrum Disorder Level 1.
On November 2019 the parties agreed to a trial separation.
In December 2019 the husband inadvertently overheard the nanny speaking disparagingly about him to the wife including inciting the wife in relation to their separation. The husband heard the wife respond “This is war! This is war!”. The nanny told the wife that she had invited the husband to celebrate Christmas day with her family in the belief that he would not accept the invitation and was surprised when he did accept the invitation. The husband confronted the nanny, she was abusive and he asked her to resign and leave the house immediately which she did. The wife has maintained a friendship with the nanny. The wife’s evidence in this regard was that, “in December 2019, Mr Reece reviewed CCTV footage and heard Ms R speaking about him. He became very angry and started an argument with her. He then fired her and refused to hire another nanny. Mr Reece would not agree for X to be in child care. I had no choice but to leave X in Mr Reece’s care when I went to work. Since Ms R left, I have re-negotiated my work hours so that I am available to care for X.”
The parties agreed to separate finally in January 2020.
In February 2020 the husband secured a rental property at FF Street, Suburb J located nearby the former matrimonial home. The parties co-signed the lease and pre-paid the rent for 12 months.
After agreeing to separate, the parties holidayed together in Country GG with the child from late February 2020 to early March 2020. The husband’s evidence is that the parties got along well and that he believed there was a possibility of reconciliation. The mother’s evidence is that she travelled to Country GG with the intention that it would be their “last family holiday”.
The husband moved out of the former matrimonial home and into his rented accommodation on 17 April 2020.
Since April 2020 the wife has worked reduced hours of 20 hours per week and sometimes works shifts each Saturday until Monday.
In March 2021 the parties attended a mediation with Ms S to discuss parenting arrangements for X.
The wife commenced proceedings on 11 May 2021. The proceedings were transferred to Division 1 of this Court by Order of Registrar Hayward on 30 July 2020. Senior Judicial Registrar Hoult made interim parenting orders on 28 September 2020 which were in place until such time the parties were able to agree to final parenting orders in a Judicial Mediation before Macmillan J on 1 March 2022.
THE LAW
There are a number of jurisdictional facts of which the Court must be satisfied in orders to alter property interests under s 90SM of the Family Law Act 1975 (Cth) (“the Act”) upon the breakdown of a relationship in which the parties have resided together on a genuine domestic basis. None represent an obstacle in this case.
First, there must be a de facto relationship. That is conceded in this case. Second, the de facto relationship must have broken down. This is in contradistinction to parties who were legally married and who can apply for an alteration of property interests during the subsistence of the relationship. The distinction comes about because the definition of de facto financial cause in s 4 of the Act includes the phrase “after the breakdown of the de facto relationship” in each descriptor. In any event, there is no dispute that the parties’ relationship has broken down, although there was a dispute about when that breakdown occurred. Third, the relationship must have ended after 1 March 2009 when the de facto property provisions of the Act commenced operation. That is so in this case.
Fourth, s 39A(2) of the Act provides that, to institute proceedings one of the parties must be an Australian citizen, ordinarily resident or present in Australia on the day on which the application was filed. I am satisfied this requirement is met, inter alia, by virtue of the parties being Australian citizens.
Fifth, s 90SK of the Act imposes a geographical requirement for declarations and alterations of property interests. Section 90SK(1) provides that either or both parties to the de facto relationship must be ordinarily resident in a participating jurisdiction when the application is filed. That is so. Sixth, s 44(5)(a) of the Act requires, unexceptionally, that the institution of a de facto financial cause must be within two years of the end of the de facto relationship or the parties to the relationship consent to the application. The wife’s application was filed on 11 May 2021, well within time.
Once jurisdiction is established, as is the case here, s 90SM of the Act confers a broad power on the Court to make a property settlement order. There are sequential steps to the exercise of the Court’s power to alter interests in the property of the parties or either of them.
I am required to identify the existing legal and equitable interests of the parties (or either of them) in property. In this case, the parties agree on the ownership and value of property they stand possessed but they disagree over how money which has ceased to be money to which either or both are entitled is to be treated.
I have to determine whether it is just and equitable to make an order altering the parties’ interest in property. In this case I am satisfied that, as a result of the choices made by the husband and wife to end their de facto relationship, their common use of property, which is essentially property held by the wife to the exclusion of the husband, is no longer practicable. Independently of me being satisfied (as I am) that the requirement under s 90SM(3) is met, both parties have sought an alteration of property interests and neither contended that it was not just and equitable for the Court to make such an order.
I am required to assess the financial, non-financial and homemaker contributions to property (including property no longer owned by the parties) in accordance with s 90SM(4) (a), (b) and (c) of the Act. A feature of this case is that it is not contended that the husband made any direct financial contributions.
I must consider the effect upon the earning capacity of any proposed order on the earning capacity of either party (s 90SM(4)(d)).
Under s90SM(4)(e), I must take into account the maintenance component which attracts the terms of s90SF(3). The applicant wife contends that the relevant matters to be taken into account would result in an adjustment to the husband’s contribution based entitlement of a further 10% of the property to be divided. The husband contends that the adjustment should be 12.5%
Pursuant to s.90SM(4)(f) and (g) I am required to take into account any other order made under the Act affecting either of the parties or the child, X and any child support under the Child Support (Assessment) Act 1989 that a husband and/or the wife has provided, is to provide or might be liable to provide to the other in the future for X.
Finally, I need to be satisfied that the order which I propose to make is appropriate within the meaning of s 90SM(1) of the Act.
Once I have determined the entitlements of the parties to an alteration in property interests, I will consider the husband’s application for ongoing spousal maintenance. He seeks a continuation of the payments of $500 per week for two years. The wife opposes any order for ongoing spousal maintenance.
ISSUES FOR DETERMINATION
The following are issues which require determination:
(a)Assessment of financial under s 90SM(3)(a) to (c);
(b)Assessment of the adjustive factors under s 90SF(3) with particular regard to:
(i)the husband’s income earing capacity;
(ii)add backs.
(c)The husband’s claim for periodic spousal maintenance.
Add backs were a contentious issue in this trial. By placing the issue of add backs under my consideration of s 90SF(3) matters, I recognise that it is also legitimate to determine add backs at the earliest step of identifying the interests of each party in real and personal property. When that approach is adopted, the add backs which are then included in the table of assets and liabilities (sometimes called “the balance sheet”) are add backs which are allowed on a dollar for dollar basis on par with the value of current assets. When approached in this way there is, usually and advisedly, an explanation as to why doing so does not offend binding authority, such as Stanford v Stanford (2012) 247 CLR 108, to the effect that a consideration of whether it is just and equitable to make a property settlement order begins by “identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property”.[3] The legitimacy of determining add backs at the first step is discussed by Murphy J. in the decision of the Full Court in Trevi & Trevi [2018] FamCAFC 173 at [46] and [47]. Our Chief Justice and Kent J. agreed with Murphy J.’s reasons. In that process, add backs which are contended for but not allowed will not be included in the balance sheet. Disallowed add backs can be ignored or they may be taken up, via s 90SM(4)(e), as a matter relevant under s 90SF(3) of the Act.
[3] Stanford at 120 [37] (emphasis in original) (French CJ, Hayne, Kiefel and Bell JJ).
Section 90SF(3)(r) requires the court considering the alteration of property interests to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account. In this case, counsel for both parties pressed for a dollar for dollar allowance for add backs. The court’s discretion under s 90SF(3)(r) is wide enough to permit a dollar for dollar adjustment against a party who has had use of funds. I made my determination of the add backs under s 90SF(3)(r) and provided a “balance sheet”, which includes any amount added back, towards the end of the reasons (at step three) rather than up the front in the discussion referrable to the first step (identification of interests in property). The balance sheet is intended to convey in a single image my identification of the interests of the parties in existing property as well as the funds, which the parties no longer have, but which I am satisfied must be added back on a dollar for dollar basis and be attributed to the party who benefited from the funds.
ALTERNATIVE DISPUTE RESOLUTION
Section 90SM(9) provides, inter alia, that a court must not make an order under that section in property settlement proceedings unless the parties have attended a conference with a Registrar. Such a conference was convened by the Registrar on 7 February 2022. As indicated, Justice Macmillan held a Judicial Settlement Conference in the week prior to the hearing at which parenting issues were resolved.
ONUS OF PROOF AND FINDINGS OF FACT
Section 140 of the Evidence Act 1995 (Cth) provides the relevant test for the Court’s assessment of evidence in this matter: the facts in issue are to be proved by the party with the persuasive onus on the balance of probabilities.
A statement of fact, including the aforementioned jurisdictional facts, is a finding of fact.
These reasons identify my factual findings and the matters which inform the exercise of my discretion according to the statutory framework.
CREDIT AND IMPRESSION OF WITNESSES
Generally
Witnesses give evidence of what they recall. Recollections are usually a matter of perspective or at least tainted by personal perspective. Witness’ perspectives are formed by the impact on the witness of the experiences about which they give evidence. That impact can wax or wane in the time between when it occurred and when the witness gives evidence. It is hardly surprising that documentary or impartial evidence is preferred.
On a number of occasions, Mr Williams put to the husband that he was lying. However, the husband did not impress me as being dishonest. Mr Bartfeld submitted that the wife had tailored her case and that I should be “cautious” about the evidence of the nanny. However, Mr Bartfeld said specifically that there was nothing in the evidence of either the wife or the nanny that should attract an adverse credit finding.
I do not regard any witness in this case to have given evidence dishonestly or with an intention to mislead. It is more a question of accuracy. When looking at accuracy, in various parts, the content of the wife’s evidence was probably more accurate than the content of the husband’s evidence but the wife was more selective in relation to what she gave evidence about. The husband is confused with dates. I accept Mr Bartfeld’s submission that there was an element of the wife shaping her evidence to suit her case whilst ignoring other evidence that would not assist her. That said, the husband was tripped up in cross examination a number of times and was demonstrated to be mistaken or incorrect albeit, in my assessment, not necessarily dishonest.
Wife
The wife presented as an open, intelligent witness. She appreciates nuance and has a sense of humour. The wife is a strategic thinker.
In some respects her affidavit evidence could have been clearer or more accurate. For instance, at paragraph [46] of her affidavit sworn 14 October 2021, the wife deposed “In 2015, Mr Reece renovated the Suburb BB property, prior to sale. I gave the net proceeds of sale from the Suburb BB property to Mr Reece, being approximately $110,000, so that he could start his own business. He used the money elsewhere.” In cross examination of the wife, it became apparent that the husband had applied $15,000 of the $110,000 received by him to purchase an engagement ring for the wife, of her choice and which, by agreement, is not included in property divisible between the parties. Other disbursements made by the husband from the $110,000 were $66,000 towards improvement costs to the family home and the property dispute and $30,000 was spent on living expenses and a road bike for himself. The cost of the road bike was $8,000. The husband’s evidence was that, based on the successful renovation and sale of the Suburb BB property, he and the wife discussed purchasing, renovating and turning over other properties. The wife denied these discussions but does not identify what business she thought the husband would start with the $110,000. The statement by the wife that she gave the husband $110,000 so that he could start his own business but that he used the money elsewhere is an example of the wife being selective in her evidence. Apart from the husband’s road bike ($8,000) and the wife’s engagement ring ($15,000), the money was applied by the husband to maintain or improve property owned by the wife.
The wife was cross examined about payments totalling $2,500 by the wife to the husband as remuneration for painting her new office premises whilst she was in hospital. The wife agreed that she treated the $2,500 as a tax deductable business expense. In this context, the wife gave evidence about the husband’s use of money for his personal expenses including the following interchange:
MR BARTFELD: So this payment of two and a half thousand dollars isn’t really unusual in the context where all the money is essentially coming from you?‑‑‑This is on top of the regular payments that he has been receiving from me, as well as the free use of my credit card and the payment of all of the other household expenses. So this was me trying to find him some sort of employment ‑ ‑ ‑
Well ‑ ‑ ‑?‑‑‑ ‑ ‑ ‑ and also to help me because I was in hospital and I had my – I needed to have my ‑ ‑ ‑ […]
[MS KWON]: I was on bedrest in hospital for quite some time, and that was an unexpected event, and I planned to move offices, so I needed to have those offices painted before the furniture went in.
Right?‑‑‑But that was when ‑ ‑ ‑
MR BARTFELD: But that ‑ ‑ [..]‑ ‑ that provided you – not only did it provide him with money to use for family purposes, but it provided you with a tax deduction, did it not?‑‑‑I did tax deduct this amount, but ‑ ‑ ‑
Yes?‑‑‑ ‑ ‑ ‑ he – I – the money that goes to him
[MS KWON]: [..] .. the money that goes to him doesn’t come back to the family; it goes to him. He spends it on his personal expenses.
Okay?‑‑‑So all the household costs, electricity, gas, water, everything was paid back ‑ ‑ ‑
[…]
MR BARTFELD: I’m sorry. I didn’t mean to interrupt you?‑‑‑No, no, no. I – I – all I’m saying is I’ve paid all the bills and kept up with household expenses.
HER HONOUR: When you say “personal expenses”, what do you mean?‑‑‑Whatever he wants to do with his money.
Well, what do you think?‑‑‑He pays his phone bills. He buys things. He buys his clothes. He buys equipment.
Equipment for what?‑‑‑For his sports, gyms, that he set up in the garage.
For personal fitness?‑‑‑So – yes, so this is money that he uses.
Nothing out of ordinary day-to-day expenses?‑‑‑No. He doesn’t go out and gamble or anything. No.
Consistently with the above, the wife’s evidence does not allege that the husband was profligate or wasteful in his spending. The wife’s comment that the transactional payment of $2,500 “was me trying to find him some sort of employment” is an example of the wife doing what Mr Bartfeld referred to as “tailoring her case”.
Husband
The husband presented as a little inflexible at times but was not resistant to answering questions. He lacks a sense of nuance and was not as personable as the wife. He lacked insight. This is a financial case in which counsel for the husband concedes that the husband made no financial contributions over the entirety of the relationship. In cross examination, there was the following interchange between counsel for the wife and the husband:
MR WILLIAMS: You’re unemployed; correct? For the whole period that the nanny was employed, you were unemployed?‑‑‑Yes. That is correct.
Right. So your child, [X], mother works, why did you need a nanny?‑‑‑We needed a nanny because there were significant challenges around [X]’s care. I was a new parent. We had limited extended family support.
Yes. You couldn’t cope. That’s the answer, isn’t it? You couldn’t cope?‑‑‑I don’t think that’s an accurate characterisation but we certainly could have done with the assistance of the nanny and that was why we employed her.
Yes?‑‑‑And she provided extensive guidance.
Well, during that year, just to put it bluntly, your wife paid $12,000 or thereabouts – a little bit more because that spreadsheet is not complete – in excess of $12,000 during the course of that year for a nanny to look after your child; correct?‑‑‑That’s not actually correct. My mother sent money to pay for the nanny because she felt that she was too old to come and provide the assistance that we required at a difficult time.
Okay. Was it ever suggested to my client – and I haven’t seen any material whereby you suggest that the wife in this case was not responsible for the payment of the nanny?‑‑‑Could I have the question again please?
Yes. I’m just putting to you that what you’ve just said, that your mother paid for the nanny, is not in your material.
[…]
HER HONOUR: Yes. How much did she send?‑‑‑I believe approximately $10,000.
MR WILLIAMS: Have you got some proof of that
HER HONOUR: Well, why don’t you get some instructions?
MR WILLIAMS: Well, the point I make, your Honour, is that the assertion is not in the material but I will get some instructions. My client is unaware that that payment has been made.
HER HONOUR: And where did your mother make the payment to?‑‑‑She would have made a wire transfer to my ‑ ‑ ‑
Not she would have. What did she do?‑‑‑She made a wire transfer to my account. Yes
All right. Which account was that?‑‑‑A National Australia Bank account. My savings account, I recall.
After the luncheon adjournment the husband produced bank statements. There was no payment of $10,000. There were a number of payments, totalling $5,000, one payment was deposited by his mother and the rest appear in the statement as cash deposits. The wife had already given evidence that all funds paid by her to the husband were by bank transfer and the husband had no other income. The timing of the deposits demonstrated that the $5,000 was put towards the nanny’s wages. A natural reaction would have been for the husband to apologise and adopt the $5,000 figure but the husband was slow to do so and, thereby, deflected Mr William’s brusque questioning. Moreover, it appears that the husband had not told his legal representatives about the contribution from his mother and he did not seek that the $5,000 be taken into account.
Counsel for the wife cross examined the husband extensively in relation to his employment prior to cohabitation. Counsel was critical of the husband’s evidence including that the husband failed to produce his curriculum vitae. The husband produced a summary of his profile on HH Online which he had written (Exhibit “W7”). The husband described the document as similar to an advertisement and said that it was not his curriculum vitae.
In the HH Online profile, the husband described his top skills. The “Summary” reads:
A highly experienced [professional], specialist in […] programs which leverage […] relationships to deliver [client] outcomes […], across a range of sectors, jurisdictions and organisational types.
With a decade of experience in Asia, [Mr Reece] founded [his business] in 2008, leveraging a team of highly experienced [professionals] to define and execute programs critical to the interests of its […] clients. He has held [both] senior […] positions in [Country JJ, Country AA and Country CC], including [roles] with [KK Company and L Company], and advised leading multinational clients […]. Prior to commencing his career […], [Mr Reece] served in the Australian Defence Force, before studying […] at [M University].
In cross examination, the husband clarified that his Defence Force Service was for one year which he completed and through which he received financial support for tertiary studies. His reference to “studying […]” was a reference to his attendance at M University for two and a bit years of a four year course in which he did not pass some subjects and left university without completing the course.
Counsel for the wife cross examined the husband extensively about his 15 years of employment in Asia. The husband was questioned about each position he held, his title, his responsibilities and his remuneration. It is fair to say that the husband gave every appearance of trying to answer questions but not having much to say.
Counsel for the wife took the husband to his profile on HH Online. There was the following interchange between Mr Williams and the husband:
MR WILLIAMS: You regard yourself as a precise person, accurate person?‑‑‑As much as I can possibly can.
Yes. You see, the comment I’m going to make to her Honour at the end of this case is that in giving this history that I have taken you through, you are very vague about your accomplishments. You’re vague about your income. You’re vague about the roles that you partake in each of those jobs. What do you say to that?‑‑‑I have no intention of telling anything other than the whole truth. I sometimes have trouble recollecting with accuracy details. I’m ‑ ‑ ‑
HER HONOUR: Has that always been the case?‑‑‑It has always been the case. I always rely on papers. And much of my work has focused on document preparation.
[…]
MR WILLAMS: [showing the husband his [HH Online] profile] That’s current, isn’t it?‑‑‑That’s correct.
Yes. So this is what you currently portray to the world as your history, your work experience, and your qualifications; is that correct?‑‑‑That’s correct.
And I suggest to you, sir, that that link profile is in stark contrast to the evidence that you’ve given in this case about your history?‑‑‑Is that a question?
Yes. I put it to you that there is a difference?‑‑‑Is there?
Yes. Have a look at it?‑‑‑I’m looking at it.
MR WILLIAMS: It’s very precise. Do you remember me cross-examining you about roles in relation to […] what you were doing. [Manager] of your company. [Manager] at [KK Company]. I asked you what your role was. You didn’t describe your role as [Manager] for [KK Company], did you? You didn’t describe yourself as the [Manager] for [MM Company]. You didn’t describe yourself as the [Manager] at [L Company]. You see, the reason I asked you all of those questions, sir, was to see whether you would be honest in giving an accurate description about what your roles were and what you did.
HER HONOUR: Is that a question?
MR WILLIAMS: Yes. No, it’s a ‑ ‑ ‑
HER HONOUR: Where is the question bit?
MR WILLIAMS: I will put the question.
What I’m putting to you, sir, is this, that you have deliberately in the witness box understated your work experience, because you believe that will benefit the way in which you present this case to the court?‑‑‑Is that a question?
Yes. I have said to you have deliberately lied to the court when you’ve answered my questions this morning when I’ve taken you through your experience, and you have not accurately described what you have been doing, because it is in stark contrast to what your profile says on [HH Online], which is totally current?‑‑‑I don’t believe that I’ve misled the court at all.
Yes. And I put to you, sir, that if somebody read that [HH Online] history that you’ve got, there’s [M University], and what it says is “[Bachelor Degree], [M University]”. Now, is that you representing that you have completed that degree?‑‑‑That is not.
That’s not?‑‑‑It’s a limitation of the – it is a limitation of the software platform that you’re looking at, which otherwise ‑ ‑ ‑
[…]
MR WILLIAMS: And do you accept the fact that that document was accurate in relation to your history?‑‑‑I do, yes, and current.
So you were the [Manager] for [KK Company]; is that correct?‑‑‑Yes, that’s correct.
You were [a Manager] of [MM Company]?‑‑‑Yes.
You were a [Manager] with [L Company] ‑ ‑ ‑?‑‑‑Yes, that’s correct.
‑ ‑ ‑ is that right?‑‑‑Yes, that is correct.
And it’s incorrect to represent that you’ve got [a university] degree; is that correct?‑‑‑As I explained, there’s a limitation in the software. If you look, you will see that it says ’95 to ’97. In CVs that I present to potential employers, I acknowledge in the document that I did not graduate, but there needs to be an explanation for the two years between my time in the Defence Force and the role in [Country JJ], which is actually on here as well.
Yes, thank you. Now, your Honour, my learned friend, pursuant to the call, has produced to me a CV of the witness, and I call for the production of that and a copy to go to your Honour, which my learned friend has.
Are the contents of that CV true and correct?‑‑‑Yes, that is correct.
Where is the explanation in that document that you just referred to a moment ago in giving your evidence that precludes the reader from believing that you have a university degree on page 3 of 3?‑‑‑I can explain. This is a ‑ ‑ ‑
No, sir. I asked you ‑ ‑ ‑?‑‑‑What’s the question?
You said, “My CV explains that I don’t have a [university] degree”?‑‑‑Yes.
And I’m asking you to identify where on this document that is?‑‑‑If I could just clarify that these documents are both exactly the same documents. It’s just that I printed this document because I have access to my profile, and this document you printed from the public access to [HH Online]. This is not a document I’ve provided to an employer. This is simply a printout of the document that exists on the internet.
So it’s not your CV?‑‑‑That’s not my CV.
But you were asked to produce your CV.
[…]
Is that what you refer to as your CV?‑‑‑It’s not a – I’ve not – I wouldn’t present that to an employer. I didn’t ‑ ‑ ‑
When I asked you ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ “Do you have a CV” ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ and you said yes, or when Mr Williams might have asked you, “Do you have a CV,” and you said yes, what were you thinking of?‑‑‑I was thinking of – I have not put together a CV for some time. The CV – I do have another CV which I printed for – which I prepared for a particular role for a job with [NN Company]. I’ve prepared particularly CVs for different employers that highlight different skills and experience.
So when you said you would get one over lunch, and you would come back after lunch with one, what were you thinking you would come back with?‑‑‑I can come back with ‑ ‑ ‑
Sir, what were you thinking – when you sat there and said, “Yes, I can do that, and I will come back with it after lunch” ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ what were you going to come back with?‑‑‑A copy of a previous CV that I put forward to an employer.
Which isn’t either of these documents?‑‑‑Which is not either of these documents, your Honour.
Okay. Do you have – what you were thinking of ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ do you have access to it now?‑‑‑Yes. Yes, your Honour.
Right. And ‑ ‑ ‑?‑‑‑I didn’t put these ones forward, did I?
Well, I don’t ‑ ‑ ‑?‑‑‑I mean, this – these are – what I mean is this is a profile on the internet.
Right?‑‑‑Yes.
MR WILLIAMS: Do you know the difference between a profile on the internet and a CV? You do, don’t you?‑‑‑Yes, I do.
Yes. And you were asked by her Honour to produce your CV, not your internet profile. And so when I’ve called for your CV, I’m given exactly what I got off the [HH Online]. Exactly?‑‑‑I apologise to the court. That was not my intention.
Yes. But whichever way you print it out – it doesn’t matter. It’s a comment. I will make the comment at an appropriate time. Your Honour, I will tender, even though it’s the same document, what he has produced pursuant to a call and pursuant to your Honour’s request for a CV in relation to the husband.
In re-examination, the husband provided the following clarifications about HH Online:
MR REECE: I think it’s a social platform that might be compared in some respects to [PP Online] […] your Honour.
In relation to your education, you were asked ‑ ‑ ‑
HER HONOUR: Just on that point.
MR BARTFELD: Sorry.
HER HONOUR: When you join, do you warrant the accuracy of everything you put up?‑‑‑Well, I do, your Honour. But I – I ‑ ‑ ‑
Is it a requirement?‑‑‑I don’t think so, your Honour. My understanding is, for instance, that the – for instance, in the – in the instance of the employment applications that I made, the – I spoke with the recruiters about the specifics of the – of my profile and otherwise. I imagine – I mean, I would possibly compare it to an advertisement that provided some information, but an employer or a recruiter acting on their behalf would obviously deep dive into the particular materials to – am I answering your question?
Thank you.
The husband’s actual curriculum vitae was not called for again or tendered. However, the husband’s HH Online profile (Exhibit “W7”) is revealing. It is in language redolent of 1980’s marketing parlance before the plain speaking era. It is expressed in a grandiloquent, high-sounding manner which is artfully opaque. The husband concentrates on titles rather than describing the content of his jobs and his skills. There is little or no indication of his duties and responsibilities. For instance, his one year position with QQ Company from February 1998 – January 1999 is described by the husband as:
Supported the Project Managers responsible for two major [client projects], including those of [D Company] and [RR Company], requiring assistance in the definition of clear and attainable project objectives, the building of project requirements, and managing the triple constraint for projects of cost, time and scope.
Under cross examination, the husband explained that he was struggling with his university studies and his father invited him to work in his business, QQ Company, in Country JJ. There was the following interchange:
MR WILLIAMS: And how long did you work for your father for [at [QQ Company]?]‑‑‑Approximately two years.
Yes. And what were you paid?‑‑‑The equivalent of an entry level salary. I don’t recall the exact figures, I’m afraid.
What’s the equivalent of an entry level salary mean?‑‑‑I’m just thinking for a moment. I was paid a very moderate wage. It was an opportunity. It was work experience.
Okay. So just tell us about what you were doing in that job [at [QQ Company]]. What was your role and what were you doing?‑‑‑I was working under one of the other project managers. I was learning about the business. I executed tasks as directed and reported back. My father made himself available from time to time in the evenings to provide further guidance.
No, that hasn’t answered the question. What did you do? You said you were given a task. What tasks were you given and what tasks did you complete at your father’s direction [at [QQ Company]?] ‑‑‑Well, the project manager that I was working for, I did ‑ ‑ ‑
Okay. What was the project you were working on?‑‑‑I worked on a – following the merger of two [companies] – businesses, the – they were taking new offices together so it was a [project] for approximately 500 staff and I took on – a number of years since I did that particular work but ‑ ‑ ‑
[…]
HER HONOUR: What were your daily tasks? Daily tasks
An example of? An example of. Well, the first thing they do is ask you to – they need to [estimate staff requirements] and then they can start to work out how to put the design together and, so
Yes. So that’s what they did but what did you do? I conducted – I mean, it was document preparation. Significant passage of time.
So can you just tell me about one day at work? Working on spreadsheets with calculations of […] requirements
MR WILLIAMS: What, were you designing things? I was not designing things, no.
No. Okay. Well, we’ve eliminated design. Were you going to the site with the tool bag on with tools or were you assisting people who were physically working on the site?
HER HONOUR: One question at a time. You can have the tool question.
MR WILLIAMS: Okay. I will have the tool question first. Yes? We didn’t have tools beyond a tape measure. I certainly went out and did […] site measurements and other checks on site.
This job went for two years you were working for your father? This was so this is just one job, I assume, and there would have been other jobs? Yes. That is correct.
Right. So what – what skillsets did you use, what things did you do over that two year period in relation to the [property] industry? Working with your father? Went to a site with a tape measure, checked some measurements, yes, what else did you do? Worked on spreadsheets with the necessary
HER HONOUR: Who did you take direction from? The project manager and my father also.
MR WILLIAMS: Yes. Okay. So after two years of doing what you have done your best to describe to her Honour, you left that job; is that right? Yes. That’s correct.
And why did you leave that job? I left that job because my father was moving back from [Country JJ] to [Country CC] and
HER HONOUR: So did it sort of leave you? I beg your pardon, your Honour?
Did the job sort of leave you rather than you left the job? If you mean
Did the job evaporate when your father left? That’s correct. My father said we’re – I’m going back to [Country CC]. You can come with me and – but you will need to find other employment so I sought – I began a job search and found a role with [L Company], I think, as I recall.
I will discuss the husband’s employment with L Company below in the context of s 90SF(3)(a).
In my assessment the HH Online profile is trumpery and so lacking in specifics that it is immediately suspect. It gave me the impression of having been written by someone who is on the fringe of an industry and has lifted phrases from various corporate mission statements. I don’t find that the husband intended to write deceptively. However, his expression betrays a lack of substance. It demonstrates a high degree of naiveté if the composition was, as he testified, intended to attract the interest of members of HH Online who could be potential employers.
Mr Bartfeld referred to the expression as material with which he had “a language difficulty”. Mr Williams described it as “management jargon”. In closing addresses, Mr Williams submitted that:
[…] his credibility about work and his attitude to work is tarnished because, in my submission, he was not a credible witness in the witness box. He wasn’t able to give concise, precise answers to questions. He prevaricated, wouldn't answer questions directly and just kept telling stories that he thought might suit himself, which were non-responsive, and, in my submission, your Honour can't be satisfied that on the key issues in the case, he's a witness of truth.
HER HONOUR: What’s an example of a story that he was telling.
MR WILLIAMS: I beg your pardon?
HER HONOUR: What's an example of a story that he told?
MR WILLIAMS: Look, let’s look at his attempts to describe in jargon, management jargon, what he was actually doing employed for all of these various organisations. His incapacity to articulate clearly a defined logical explanation as to what he did, he would waft off and tell a story about something that he was involved in in management jargon that no one could understand would answer that question.
In sum, I do not make an adverse credit finding about husband’s description of himself on HH Online. However, the profile which the husband composed and his oral evidence leaves me with serious doubts about the husband having any marketable skillset in the industries in which he was previously employed let alone the categories under which his HH Online profile seems to be indexed.
The husband has said that he thinks that he is more employable in locations where English is not the first language so, I suppose, he does have a degree of self-awareness in that regard. Whereas I have included my impressions of this evidence as relevant to the reliability of the husband and wife as witnesses, my comments about the husband’s HH Online profile and efforts to obtain employment are pertinent to the husband’s income earning capacity under ss.90SF(3)(a) and (b) and should be read accordingly.
The husband gave evidence that demonstrated empathy. For instance, in the course of cross examination he described surprising the wife with the Motor Vehicle 5:
HUSBAND: The truth of the matter is that [Ms Kwon] purchased the car and was going to drive it as a replacement for the [Motor Vehicle 2] that we were advised to sell because it had so many issues and [Ms Kwo]n decided that she – after a month or two of driving the [Motor Vehicle 1] […], that she didn’t like driving it. The reason that we disposed of the [Motor Vehicle 3] was because we – on the driveway, we would have the [Motor Vehicle 3] and the [Motor Vehicle 2] and [Ms Kwon] would get up to go to [work] at 2 o’clock in the morning and she would sometimes get into the [Motor Vehicle 3] and sometimes into the [Motor Vehicle 2] and the controls are all different and I was concerned about her driving late at night, extremely tired, to her stressful job and we decided to get two cars with the same controls so we initially purchased the – well, [Ms Kwon] purchased the [Motor Vehicle 1] and was going to drive that. She decided that she didn’t like it and she went out and bought [Motor Vehicle 4] and she drove that and we had some problems with it and disposed of that vehicle I knew that [Ms Kwon] loved her old [Motor Vehicle 2] that she had got rid of and so I topped up and one day told her to look out the window and there was her car.
MR WILLAIMS: Yes. You – she paid for ‑ ‑ ‑?‑‑‑Yes. She paid for it.
‑ ‑ ‑ all of the cars. Yes. Thank you. Now, earlier this morning I asked you about the ‑ ‑ ‑
HER HONOUR: Sorry. You chose the [Motor Vehicle 5]?‑‑‑I – I chose the [Motor Vehicle 5]. She missed her old car and ‑ ‑ ‑
Okay. So did she indicate she liked it?‑‑‑Yes. She loved it.
MR WILLIAMS: And whatever way you look at it, all of these cars were financed and paid for by her?‑‑‑They were financed by [Ms Kwon].
Nanny, Ms R
The wife relied on the evidence of former nanny for X, Ms R who swore a second affidavit in these proceedings on 14 October 2021. It is upon that affidavit that the wife relies. Ms R deposes to being employed as a nanny between February 2019 until 14 January 2020 between three and five days per week, primarily to look after X and usually when the wife was at work. Ms R deposed in her affidavit to have “closely observed [the husband’s] interactions, attitudes and actions towards both X and Ms Kwon”. The husband fired Ms R in January 2021 after he heard Ms R speaking disparagingly about him to the wife. The wife has retained Ms R as a friend and Ms R sees X on an ongoing basis.
In oral evidence she stated that she kept a diary in which she habitually recorded incidents on a daily basis. In cross examination, Ms R stated that she did not discuss with the wife what evidence she (the nanny) would give in this proceeding. Ms R testified that she did not have recourse to her diary when providing information for her affidavit to the wife’s solicitor. This is unusual given that she refers to which refers to incidents which occurred the by month and sometimes by date.
Ms R gives detailed observations which lead her to conclude that the husband did not interact or play with X when Ms R was caring for X. She observed that the husband “did not seem to enjoy engaging in age appropriate games with X”, that “his expectations of X were sometimes not age appropriate” and that “Mr Reece would obsessively research these [expected developmental] standards online and would become angry and blame Ms Kwon or me if X was not meeting those stages with precision. Mr Reece become fixated on X meeting these developmental milestones and did not seem to appreciate or except that developmental milestones could occur at different times”.
Ms R stated that she observed incidents which she thought “concerning” and in which the husband was “not child-focused”. She deposes to three or four occasions when the father “was entirely consumed by his stress or business to the point that he was manic and I thought, unable to focus on X at all during those times.” To the extent that the wife relies on Ms R’s evidence to establish the husband’s shortcomings as a parent, I do not lose sight of the fact that Ms R’s exposure to the family was limited to a number of hours over three to five days a week for 11 months. Furthermore, the husband and the wife have recently resolved the parenting proceedings on the basis of X spending four out of fourteen nights and one long day in the husband’s sole care and, in 2023, that time will increase to five out of fourteen nights. The amount of time to which the husband is entitled to X, who is only 3 years old, indicated that either the husband could not have been too bad a father or he is substantially improved and now performing well.
Ms R deposed that the husband frequently made disparaging remarks about the wife as a mother and personally. She stated that “I observed on many occasions Mr Reece making very cruel and unnecessary remarks to Ms Kwon.” The nanny states “[the husband] frequently complained to me about [the wife] and gave me the impression that in his view, anything that went wrong was Ms Kwon’s fault. Even if something happened whilst Ms Kwon was at work, Mr Reece would say words to the effect of, “she probably planned this before work, of course she did.” Over time, I increasingly had to defend Ms Kwon in her absence and tell Mr Reece that I thought it was very unfair of him to blame Ms Kwon for things that clearly were not her responsibility or within her control.”
Ms R deposed that “[over] the course of my employment, I felt more and more sympathetic towards Ms Kwon who was quietly putting up with Mr Reece’s difficult behaviour and put-downs. Between February and November 2019, Ms Kwon did not, on any occasion, complain to me about Mr Reece. Towards the end of November 2019, Ms Kwon mentioned to me that she and Mr Reece had been talking about a separation. It was at that stage that I said to Ms Kwon that I felt for her and could see everything she had been through. It was only then that Ms Kwon opened up to me about how difficult living with Mr Reece had been for her.” The nanny makes a good point in her evidence. Indisputably the nanny came into the family at a difficult time. They were new parents and the father was totally inexperienced in the care of children and their marital relationship was disintegrating.
Under cross examination, Ms R stated that the husband attended to the shopping. He did not do housework in her presence and:
[MS R]: […] I don’t dislike [Mr Reece]. [Mr Reece] and I actually got along very well.
Yes. And he was attending to things when you were there. It didn’t take two to look after a baby?‑‑‑No, of course not.
No. And he wasn’t just sitting there watching television, for example?‑‑‑No.
He was doing other things?‑‑‑That’s right. Yes.
Further:
MR BARTFELD: And he was looking to you for guidance about how one looks after a baby, wasn’t he?‑‑‑No, he wasn’t.
No?‑‑‑No.
So he was able to look after the baby without your input and intervention by himself as far as you’re concerned?‑‑‑I think he could have, yes.
[…]
MR BARTFELD: And you say he was doing the shopping for the family while you looked after the baby?‑‑‑That’s correct.
And after breakfast, the baby would mostly go down for a little sleep?‑‑‑That’s right. Yes.
Yes. So given that you were there for breakfast, there wasn’t much that two people could do to look after the baby?‑‑‑That’s right.
And it was a good time for him to be away to do whatever he needed to do?‑‑‑Yes.
The husband responded to Ms R’s evidence extensively in his affidavit of evidence in chief sworn 9 November 2021 and denied many of her allegations in a comprehensive and plausible manner. However, these denials and the husband’s version of events were not put to Ms R in cross examination. As indicated, Ms R’s evidence is of her observations over a fraction of the parties’ married life and when the parties’ relationship was disintegrating or they had resolved to separate. I take Ms R’s evidence into account in relation to contribution and as corroborative of some of the wife’s evidence about the husband’s treatment of the wife in the last year of cohabitation.
LEGAL AND EQUITABLE INTERESTS OF THE PARTIES OR EITHER OF THEM
Interests in non-superannuation property
There is a home in Suburb J with an agreed market value of $3,850,000, there is a mortgage offset account with an agreed balance of $361,007 and two smaller accounts totalling $15,990. The wife drives a Motor Vehicle 5 with an agreed value of $37,000. The husband drives a Motor Vehicle 1 which has an agreed value of $40,000. The wife owns all of the property.
The total liabilities, by way of loans secured by mortgage over the family home, a judgement debt and the wife’s assessed liability for income taxation are agreed in the total sum of $703,009.
The net value of the non-superannuation property is, therefore, $3,600,898 being the total assets of $4,303,997 less the liabilities of $703,009.
Superannuation interests
It is agreed that the wife’s superannuation interest is worth $665,393 and the husband’s is worth $4,849 which is a total of superannuation interests of $670,242. The parties have already agreed that there will be a superannuation splitting order in favour of the husband in the sum of $212,979. Accordingly, the superannuation interest of the husband is $217,828 and the wife’s superannuation interest is $452,414. The parties seek no further adjustment in relation to superannuation interests.
CONTRIBUTIONS
Section 90SM (4) provides that in considering what (if any) orders should be made in property settlement proceedings, the Court must take into account contributions made by the parties. These contributions include financial contributions (s 90SM(4)(a)) and non-financial contributions (s 90SM(4)(b)) made by or on behalf of a party to the de facto relationship to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them. They also include the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship, including any contribution made in the capacity of homemaker or parent (s 90SM(4)(c)).
The wife contends that contributions should be assessed in the proportions of 90% to her and 10% to the husband whereas the husband contends that the wife’s contributions should be assessed at 80% and his ought be assessed at 20%.
The task for the Court is to weigh and assess the contributions of all kinds from all sources made by each of the parties throughout their period of cohabitation, and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment. It is important “to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship”.[4] The assessment of contributions is not a mathematical exercise. It involves the identification and assessment of the parties’ respective contributions in all capacities across the course of the relationship and in the post separation to the point of assessment in a holistic way[5]. In this case the myriad of financial and non-financial contributions and contributions to the welfare of the family, which was initially constituted by the husband in the wife and then by the husband, wife and X, spanned a little more than seven years.
Direct and indirect financial contributions[6]
[4] Dickons (2002) FamCA 154.
[5] Horrigan & Horrigan [2020] FamFC 25 [35] in which the Full Court, comprising Strickland, Kent and Tree JJ referred to various authorities including Jabour & Jabour (2019) FLC 93-898.
[6] Family Law Act1975 (Cth) s 90SM(4)(a).
The wife was the income earner and introduced all of the property into the relationship by way of initial financial contribution. It is agreed that the wife’s direct financial contributions of non-superannuation property at the commencement of habitation was approximately $1.6 million. In specie, at the commencement of cohabitation, in 2013, the wife had the following property:
(a)The property at C Street, Suburb J. The former family home. The property has been retrospectively valued at the commencement of cohabitation in 2013 at $2,100,000. At the time of cohabitation the mortgages secured to ANZ Bank secured borrowings of $1,404,457, including a portfolio loan, and the balance in the wife’s ANZ offset account was $692,392. This property was the family home and is still occupied by the wife and X. It has appreciated so that it now has an agreed market value of $3,850,000. It is subject to mortgages totalling $632,330 and the wife has $361,007 in mortgage offset account.
(b)The investment property at Suburb BB. This was extensively renovated by the husband and the wife and sold in 2016 for $1,100,000. There was $810,000 owing on the mortgages and the disposition produced a $75,000 liability for capital gains tax. The wife paid $110,000 to the husband, which I have discussed above in the context of the accuracy of the wife’s evidence. The wife retained the balance of the proceeds of sale which included a reimbursement for the cost of the renovations and holding costs when the property was untenanted. None of the proceeds remain.
(c)£20,000 in a TT Bank account, which equated to AUD$35,000. These funds have been used be wife as spending money for family holidays taken overseas.
(d)Motor Vehicle 2 which she had purchased for $120,000 ($90,000 cash and $30,000 trade in on her Motor Vehicle 6). The wife estimates the motor vehicle would have been worth approximately $75,000 at the time of cohabitation. It was subsequently sold for $40,000.
(e)Her superannuation interest which the wife says was worth $130,764.
The husband was not employed outside the home during the relationship and generated no income in his own right for the duration of the relationship. The husband did not receive any windfall, inheritances or bequests during the relationship. There is evidence of his mother making payments totalling up to $5,000 to assist with child care expenses but the evidence is imprecise as to donor’s intent and was not introduced until after the wife’s case was closed. My impression is that it was likely to have been a gift to the parties. It is spent. I do not credit the husband with making a direct financial contribution in that sum. Accordingly the direct financial contributions of the husband over the relationship is ‘nil’.
It is not necessary to be too precise about the wife’s contributions at the commencement of cohabitation because, as stated above, the wife brought everything into the relationship. Regard must be had to the use to which the parties put the capital introduced by the wife at the commencement of cohabitation rather that the notional value of its component parts when the parties ceased to reside together on a genuine domestic basis. In this case it would be artificial and inequitable to look at the current net value of non-superannuation property at $3,600,898 and recognise the wife’s direct financial contribution at a mere $1.6 million. As the Full Court comprising Kay, Coleman and Stevenson JJ observed in Williams & Williams [2007] FamCA 313 (and cited by Alstergren, CJ and Ryan and Aldridge JJ in Jabour & Jabour [2019] FamCAFC 78):
26.We think that there is a force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties. Thus with a pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result market, it is appropriate to give recognition to its value at the time of hearing or at the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions at each of the parties has made during the course of the relationship.
I find that the wife made all of the direct and indirect financial contributions to the acquisition, conservation or improvement of her property interests. The husband made no such contributions. Furthermore, the wife’s pre-cohabitations must be looked at in a certain way. For instance, the former family home was worth $2,100,000 at the commencement of cohabitation and has a current market value for the purpose of this trial of $3,850,000. The increase in capital, of $1.75 million, is the result of the home having been held by the wife at the start of the relationship and the increased demand for property in Melbourne rather than being referrable to contributions made by either or both of the parties during cohabitation. The wife’s contribution of the Suburb BB property is different inasmuch as, when the Suburb BB property was sold, the parties agree that the husband’s efforts (non-financial contributions) had increased the market value by some indeterminate sum.
Non-financial contributions[7]
[7] Family Law Act1975 (Cth) s 90SM(4)(b).
The husband made non-financial contributions towards the improvement and eventual sale of the Suburb BB property by arranging and/or supervising tradespeople and completing some works himself to renovate to the wife’s real properties being the Suburb BB property and the family home.
Renovations to the Suburb BB property
It is common ground that the wife purchased the Suburb BB property for $765,000 in 2009 for the purposes of an investment. The husband claims that in 2015 the wife suggested he renovate the Suburb BB property and upon sale retain the net profits. The wife admits to encouraging the husband to renovate the Suburb BB property in the hope it would “assist him to find meaningful employment”. The husband claims that prior to his involvement the property was “run down”. Works to the property started on 9 December 2015 and concluded on 9 February 2016. The husband was in charge of the works and performed some himself. I do not regard the start and conclusion dates as bookends of his involvement. Clearly there would have been planning and organisation prior to the works commencing. There is no suggestion that the husband did anything other than a good job.
The husband claims that he was involved in the improvements to the property to the extent he “managed the renovation and sale from end to end”. The husband deposed to his role in managing the renovations to include[8]:
[8] Trial Affidavit of Mr Reece affirmed 9 November 2021, p. 10.
a.documenting and securing relevant local permits;
b. identification, selection, appointment, and management of tradesmen. The tradesmen were hired to render the façade; repolish hardwood flooring and stairs; re- carpet the bedroom and landing; and install new blinds.
c. I completed work myself, including:
i. Repairing and repainting wooden paling fence and gate;
ii. Landscaping including removal of trees and shrubs, planting standard roses and box hedge, installation of automatic sprinkler system, and pouring new concrete path and step;
iii. Repairs to building façade and veranda; including (high-pressure) removal of paint from bluestone footings, re-hanging veranda roof and replacing guttering; installing new flashing; extensive repairs to brickwork (in preparation for rendering); repainting roof, door and window frames, veranda and path; sourcing and installation of period feature light; stripping and refinishing front door; removal of hardware and sourcing and installation of new brass hardware (knocker, handle, street numbers and locks);
iv. exterior of building (front and rear) repairs to brickwork and render, and repainting top to bottom;
v. repairs to interior walls, including extensive repairs to plasterwork, removal of broken plaster and cornicework, repairs and refixing skirting boards, and repainting top to bottom;
vi. removal of fireplace covers and existing tiling, sourcing, customisation and installation of period mantlepieces and fireplace inserts and preparation of base for polished concrete finish;
vii. pressure cleaning bathroom and kitchen and sourcing and installation of new bathroom mirror, cupboards, shelving, and fixtures (shower head and toilet roll holder);
viii. sourcing and installation of full height mirrors for cupboard (sliding) doors in bedroom.
The wife describes his role in the renovations to the Suburb BB property as “extensive”[9].
[9] Trial Affidavit of Ms Kwon sealed 25 November 2021, p. 4.
The investment property was sold in March 2016 for $1,110,000 for a net profit of $197,416. The husband claims that the net proceeds of sale were distributed in proportions of $79,062 to the wife and $188,354 to him. The wife’s evidence is that she gave the net proceeds of sale to the husband, being approximately $110,000, with the intention that he would use the funds to launch his own business. The parties both concede that the funds were applied elsewhere.
Renovations to the former family home
The husband deposes to being responsible for “decorating (furnishing), maintaining and renovating” the former matrimonial home in so far as he “selected appointed and managed tradesmen and completed work [himself]”. The husband claims that the tradesman he hired undertook the following works on the former matrimonial home:
a. plumbing – replace downpipes, remove disused pipes from south wall, replace electric wall oven, gas hot plates and range hood, repair damaged stormwater drains;
b. roof plumbing – clean gutters and roof tiles and repoint roof;
c. heating and cooling – replace broken heating and cooling with hydronic panels (ground floor); and split system (first floor);
d. painting – repair and paint exterior including doorframes, windows and eaves;
e. flooring – repolish and stain hardwood flooring;
f. internal blinds – install new sheer and drape curtains in living and bedrooms;
g. external blinds – install new weather blinds;
h. garage door – electrification of garage door;
i. fencing – replace chain wire boundary fence with paling fence at south boundary, and replace paling fence at west boundary;
j. attic ladder – install attic ladder;
k. engineering – inspection and specifications for new attic; and Signature of person making this affidavit (deponent)
l. electrical – electrical repairs, inspection, and compliance.
The wife accepts that the husband would liaise with tradesman but only on the basis that he was home and she was not. The wife recalls the husband’s working relationship with certain tradespeople turning sour. In particular the wife recalls the husband fighting with the roof plumber, berating a curtain maker and the painter walking off the job as he could no longer work with the husband. I am unable to say whether the position taken by the husband was not justified and there was no attempt by the wife to quantify the implications of tradespeople walking off the job in money terms.
The husband claims to have completed the following renovation works himself:
a.Landscaping (soft) - including returfing (front two terraces and nature strip lawns), raise retaining wall at rear south boundary, install 9 cubic metres of soil, level and returf back garden, removal of numerous large and small trees (and stumps), hedges and shrubs, and replant with new trees (silver birch and pear), hedges (box) and shrubs including around 50 standard roses;
b. Landscaping (hard) – diamond polish and seal concrete driveway, re-edge driveway with concrete saw and install brick edging to widen driveway, high-pressure wash and seal sandstone patio and front porch, trellis (and re-trellis) north and west to two stories and train wisteria, run conduit for façade up-lighting, install agricultural drains, install sprinkler system, remove 10 square metres of concrete pavers from south boundary, paint paling and brick fences (north, west and south), remove trellis (south boundary), remove 10 square metres of concrete path and cinderblock retaining wall and correctly re-establish south boundary (per land survey) with timber retaining wall, and 9 cubic metres of soil backfill, respray outdoor dining setting, demolish fence behind garage, install two 5 square metre raised garden beds, and install retractable hoses (front, rear and side);
c. Garage – repair leaking roof and gutter, remove water tank, diamond polish and seal concrete floor, install rubber tiles, repair and repaint, install mounting hooks for tools, and install wall mounted squat and bumper plate racks;
d. House (external) – install 17 lights (floodlights, pendants and oysters), repaint front door, replace hardware (brass deadlock, antique knocker, knob and doorbell), repair extensive damage to eaves (including installation of required scaffolding to 10 metres), remove redundant television antenna, install (and setup) […] CCTV security camera system (including in-roof wiring, hard drive and monitors), source and replace galvanised brick vents with matching terracotta vents;
e. House (internal): removal of wall mounted candle-lights in dining, drawing and piano rooms, repair, paint and repaint all rooms (including selection and testing of 10 different colours across the house) and repairs following house movement, install extensive collection of art, prints and photos in all rooms, install hidden in-floor safe, install under-floor wiring for hi fi (dining, drawing, piano and living rooms), LAN and WIFI (dining, drawing, piano, living rooms and upstairs and downstairs study)
f. Attic installation – decommission and remove split system air conditioning, remove cross bracing to create room and add additional bracing and structural support, remove redundant pipes and wiring, seal roof with rigid insulation (screw fixed and taped), and install 64 square metres of structural flooring over battens, and install new lighting.
Mr Bartfeld submits that the $268,000 should be treated:
(a)As to $142,473 which was paid by the husband on account of his legal fees in this proceeding as a dollar for dollar add back to the current value of the property divisible between the parties.
(b)As to the balance of $125,527:
(i)The $109,027, which the husband says he has expended on accommodation, the acquisition of furniture, household appliances and furnishings for his current rental property and the cost of a mediator, that amount should not be added back.
(ii)The $16,500, which had not been used by the husband at the start of the trial, is to be treated as funds at bank and included as property divisible between the parties.
I accept the husband’s contention that the $109,027 falls outside three categories identified in Omacini’s case (supra) - being paid legal costs, premature distribution of property or wanton and reckless expenditure. It is clear that the husband did not “unilaterally dispose” of the funds in the sense referred to by the Full Court in Bevan & Bevan (supra) in relation to premature distributions of property. The wife’s description of the payments made 7 January 2020 ($25,000), 9 February 2020 ($34,000), 26 January 2021 ($16,000) and 15 July 2021 ($18,000) was that they were funds applied to accommodation costs, including rental and setting up a new home. Those were funds which enabled the husband to establish an independent residence from the wife, which the wife clearly wanted, and to effect the physical separation of the parties. The alternative would have been for the husband and wife to live separately under the one roof which I am satisfied would have been unpleasant to the point of untenable. The amenity of setting up an independent dwelling was for the benefit of the family and certainly as much for the wife’s benefit as the husband’s benefit.
Without prejudice to his broader contention, Mr Williams submitted that the $25,000 (7 January 2020) which was applied to the acquisition of furniture and household goods should be added back against the husband because he has retained all of the acquired items. I do not accept that argument. On the facts of this case, the appropriate treatment of what was acquired with the $25,000 would be to have regard to the current market value of those household goods and chattels at the time of the trial. However, there was no valuation of those items nor any agreement as to valuation. Given that the wife has a furnished four bedroom home in respect of which there is also no valuation of household goods and chattels, the failure to value the household chattels in the husband’s possession is unlikely to have been inadvertent. I assume that the parties are content to each retain the household effects of which each respectively stand possessed without any adjustment. I feel fortified in making this assumption because the husband’s household goods were not pursued by counsel for the wife in final addresses and the minute of order drawn by the parties contains the usual catch all clause that, save where specified, each party retains what personal property is in his/her possession.
I am satisfied that the husband did not spend the $109,027 on anything other than necessary living expenses let alone that he applied the money wantonly and recklessly. As the Full Court articulated in Cerini’s case (supra) and the other authorities referred to above make clear, add backs are the exception rather than the rule. I am not satisfied that the $109,027 ought to be added back against the husband in the circumstances of this case. I am aware that the wife was seeking an add back of $125,527 which was the total amount of the payments to the husband less husband’s legal costs. The hundred and $25,527 includes the $109,027 which I have just dealt with. I am not allowing that add back the reasons which I have expressed
The husband acknowledges that his paid legal costs ($142,473) should be added back and be treated as received by him.
The husband also agrees that the $16,500 which is at bank in an unused portion of some of the six payments from the wife which totalled $268,000. He agrees that ought to be added back and attributed to him.
For the avoidance of doubt I note that the wife of that amount $142,473 was paid by the husband in legal costs. The husband contends that only $16,500 of the $125,527, should be added back. The $16,500 is the balance of the $268,000 received by the husband but not used.
Third, the wife has paid $116,000 in legal costs. The husband contends that the $116,000 ought to be added to the value of the property available to be divided between himself and the wife. Mr Williams submits that the $116,000 ought not be added back against the wife because it represents legal costs paid by her from income generated after separation. Mr Bartfeld submitted, correctly that there was no direct evidence from the wife as to where the $116,000 was sourced. Therefore, there is no basis upon which Mr Williams can submit that costs were paid from income generated post separation. There is however, indication in other documents that the $116,000 was not income. The wife filed a notification as to costs on 4 March 2022 in which the $116,423 appears as the total of costs paid to date ($112,584) and costs outstanding at $3,838. There are funds in the trust accounts of the solicitors of $5,500 from which the $3,838 will presumably be taken which will leave the total amount of costs paid by the wife at $116,423. The final entry on the costs notification relates to the source of funds and reads “the source of funds for costs paid and to be paid is your personal resources”. The wife’s amended Outline of Case for Final Hearing (Exhibit “W1”) refers at item E to the $268,000 paid to the husband by the wife. It is stated “the funds for these payments have been made from the savings held in the Applicant’s accounts”.
I do not accept Mr William’s submission that costs paid from post separation income should not be added back against the wife. It remains a matter of what is just and equitable in the circumstances. As was stated by Murphy J in Trevi’s case, with which Alstergren DCJ (as he then was) and Kent J agreed:
36. Paid legal fees occupy a particular position in the consideration of addbacks by reason of s 117(1) of the Act; a matter not relevant to any other form of expenditure or dissipation of property the subject of an addback claim.
37. An order failing to addback legal costs is a pre-emptive decision about one party paying the other’s legal costs. The statutorily prescribed default position is that neither party pays all or some of the other party’s costs.
38. If, contrary to the demands of that section, there is to be a payment of costs, the award is dependent upon a finding of justifying circumstances which, in turn, is dependent upon (non-exhaustive) considerations all of which are informed by antecedent events - for example, whether one party has been “wholly unsuccessful” and “the conduct of the parties to the proceedings”. An award of the costs of trial, if any, is in the usual run of events made after the respective entitlements of the parties to a settlement of property have been assessed and, importantly, any awarded costs are paid from the assessed entitlement to property received by the paying party.
39. As has been said, legitimate guidelines “guide the exercise of a discretion”; they do not replace it. Guidelines, must “[preserve], so far as it is possible to do so, the capacity … to do justice according to the needs of the individual case”. The decision to addback or not addback paid legal fees remains a matter of discretion. But, a finding that it is just and equitable to not addback an amount of legal fees so paid is a finding that it is just and equitable for the other party to contribute to the costs of the first party in that proportion as part of an overall assessment of the justice and equity governing their property division.
40. The considerations just referred to are plainly always important and central to the exercise of that discretion in respect of paid legal fees.
41. The passages from Chorn, quoted above, draw a distinction between legal costs met from property that would otherwise be available at trial and legal costs met from funds “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)”. The proposition there advanced, that such expenditure “would generally not be added back”, also needs to be seen as a guideline informing the relevant discretion rather than determining it. A further distinction is suggested in Chorn between funds generated in that manner and “[f]unds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement”.
42. The latter suggestion recognises the discretion inherent in the task and also, perhaps, that in the particular circumstances of a case, adding back sums generated post-separation in the different manners suggested might create injustice as much as it might cure it.
(footnotes omitted)
I accept Mr Bartfeld’s submission that payment of legal fees flows from section 117 and, unless there are circumstances within that section which justify one party paying the costs of another party, each party should bear their own costs. That is the effect of an add back in the circumstances of this case, particularly where all money emanates from one source, namely the wife. There is no justification for drawing a distinction between post separation income and funds which are invested or held at bank. I conclude that the $116,000 paid by the wife should be added back and form part of the property interests to be divided between the parties.
In my review of the evidence I note that I was not addressed as to any other legal costs paid by or on behalf of the parties. It is common ground that the parties saw collaborative lawyers. Necessarily, they must have been lawyers other than those now retained in these proceedings. Fees would have been payable to those lawyers which I do not take into account because I was not asked to do so nor were they quantified by both parties. I also notice some disbursements were paid by the wife, in particular for expert evidence. She did not seek an adjustment in that respect either.
Table of property interests
Having regard to my findings in relation to add backs, I now set out a statement of assets as I have found them to be either by agreement or after considering the submissions of the parties on the relevant evidence.
Description Ownership Value 1 C Street, Suburb J Wife $3,850,000 2 B Bank offset (#...81) Wife $361,007 3 CBA business transaction account (#...40) Wife $12,168 4 TT Bank account (held in the UK) Wife $3,822 5 Wife's Motor Vehicle 5 Wife $37,000 6 Husband’s Motor Vehicle 1 Wife $40,000 7 Husband’s paid legal fees (as at 1 March 2022) Husband $142,473 8 Husband’s part property settlement payments of $175,000. Husband $0 9 Unused portion of $268,000 which husband received from the wife. Husband $16,500 10 Wife’s legal fees (as at 1 March 2022) Wife $116,000 Assets subtotal $4,578,970 11 B Bank home loan (#...01) Wife $300,000 12 B Bank portfolio loan (#...33) Wife $332,330 13 Property Dispute liability Wife $44,136 14 Wife’s Tax Liability (income period 1.7.20 to 30.6.21 payable May 2022) Wife $26,543 Liabilities subtotal $703,009 Total non-superannuation property $3,875,961 Name of Fund Type of interest Member Value 15 Wife's Super Fund 1 Wife-Accumulation is currently $665,393 but is subject to a split and will become $452,414 16 Husband's Super Fund 2 Husband- Defined benefit is currently $4,849 but will be augmented by a split and will become $217,828 Superannuation interests* $670,242 TOTAL (assets – liabilities) $4,546,203 Conclusion on adjustive matters pursuant to s 90SF (3)
The adjustive factors in s 90SF(3) work both ways in this case. There is a disparity in the parties’ respective financial positions. That is justified on the basis of my findings as to contributions. The wife has security by way of her tertiary qualifications and being a regular income earner. She also has the ongoing primary care role for the child. It is unlikely the husband will be paying much, if anything by way of child support. Indeed, child support might be accessed as payable by the mother to the father. I take into account that the husband has significant and substantial care of X going forward and which will increase. The husband’s employment prospects are far inferior to those of the wife and have not been enhanced by the duration of the relationship. The husband should be able to retrain himself in to feasible employment. Having regard to all of the above matters discussed in the preceding paragraphs, I conclude that the adjustive factors favour the husband.
At paragraph [152] above I assessed the contribution based entitlement at 82.5% to the wife and 17.5% to the husband in relation to non-superannuation property. The total value of non-superannuation property is $3,875,961. That would result in the following property entitlement:
·Wife: non-superannuation assets of $3,197,668 and superannuation interests of $452,414 being total assets of $3,650,082.
·Husband: non-superannuation assets of $678,293 and superannuation interests of $217,828 being total assets of $896,121.
In my view the adjustive factors pursuant to s 90SF(3) favour the husband. Having regard to all of the factors I assess an appropriate adjustment at 12.5%. The effect of this adjustment is to decrease the wife’s entitlement on an alteration of property interests to 70% of non-superannuation assets and to increase the husband’s entitlement to 30% of the non-superannuation assets. In money terms it is a positive adjustment of $484,495 to the husband’s contribution based entitlement (with a corresponding negative to the wife).
The final alteration of property interests becomes:
·Wife at 70% of non-superannuation assets at $2,713,172 plus her post-split superannuation interest of $452,414 being a total of $3,165,586.
·Husband at 30% of non-superannuation assets at $1,162,788 plus his post-split superannuation interest of $217,828 being a total of $1,380,616.
JUST AND EQUITABLE
From the husband’s entitlement to a cash payment on account of non-superannuation property, being $1,162,788, there must be deducted the sum of $198,973 on account of monies added back against the husband and property he has retained. That is $40,000 for his car (which the wife is to transfer to him), $142,473 which he has paid in legal fees and $16,500 which the husband had in the bank at the time of the hearing. That results in the husband receiving $963,815 plus his car and his cash at bank.
The result for the wife is that she retains the balance of the non-superannuation interests. This is considerably more than the $1.6 million dollars which it was agreed she introduced into the relationship. I am mindful, however, that the increase in the value of property during the relationship is largely referrable to market forces. The value of the family home went from $2.1 million to $3.85 million and there was a corresponding increase in the value of the wife’s contribution. There is currently $632,330 secured on mortgages over the family home and the mother must find nearly another $1 million dollars to pay out the husband. I do not regard this as an easy result for the wife but I am satisfied that it is just and equitable in all of the circumstances.
SPOUSAL MAINTENANCE
Finally, the husband sought periodic spousal maintenance of $500 per week for two years. Against the background of my decision about a final property order, and taking into account the matters referred to in s 90SF(3), the husband must demonstrate that the wife “is reasonably able” to maintain the husband within the meaning of s.90SF(1)(a) of the Act and that the husband is “unable to support himself .. adequately” within the meaning of s 90SF(1)(b) of the Act. Mr Bartfeld conceded that, in the event that the husband’s entitlement pursuant to s 90SM exceeded $1 million, he could not sustain the contention that the husband was unable to support himself. The husband now receives less than $1 million dollars in cash but I regard the amount of $963,815 as close enough. The adjustment of 12.5% pursuant to s 90SF provides adequately in my view for the husband to pursue his retraining with a view to employment. He also has a significant superannuation interest for later in life. The husband will in the short term have to live on his earning as a casual worker at $22 an hour but he will also have capital to which he can have recourse (hopefully conservatively).
Independently of the concession made by Mr Bartfeld (the circumstances of which did not come to pass), I have looked at the parties Financial Statements. Neither party was challenged on their expenses. Notably, the wife has a large composite figure which includes an unspecified amount for legal costs for these proceedings allowed on a weekly basis. I do not know the amount attributed by the wife for those costs but the costs notification filed by her solicitors indicated that only the costs for running the trial would be outstanding. I am broadly satisfied that the wife has the capacity to make some payment to the husband for his support. However, I am satisfied that, upon the husband receiving $963,815, he will have capacity to support himself adequately albeit probably in rental accommodation. Similarly, the husband has not made out a case that he cannot support himself by reason of physical or mental incapacity. In the context of ongoing spousal maintenance, I consider that unskilled employment is “appropriate gainful employment” within the meaning of S 90SF(1).
I will not make a periodic maintenance order as sought by the husband. However, the maintenance to which he is entitled under interim orders should continue until the wife makes the necessary payment to the husband.
FORM OF ORDERS
Counsel for the parties submitted a draft form of order[22] into which they said I have only to insert the amount payable by the wife to the husband to effect the final alteration of property interests and the quantum and duration of any periodic spousal maintenance.
[22] Exhibit “C2”.
I have determined that there will be no periodic spousal maintenance. The form of orders submitted by counsel, if made, would have the effect of immediately discharging the interim maintenance order of $500 per week. Whilst I am not ordering any spousal maintenance ongoing after the alteration of property interests is implemented, I consider it is appropriate, in all the circumstances, for the husband to continue receive interim maintenance until he receives his final property settlement.
I note that the practitioners have drawn a default clause which provides for a sale of the family home and distribution of proceeds of sale so that, on default, the husband would receive a sum certain plus interest. An alternative would have been a proportional adjustment which would allow for him to share in the actual proceeds of sale as opposed to the notional agreed value. However, I assume that was intentional on the part of counsel so I make no alteration.
Pursuant to rule 12.28 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, I will certify that it was reasonable for each party to retain Counsel, including Queen’s Counsel for the husband, to attend and to appear on their behalf.
I certify that the preceding two hundred and twenty-six (226) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett. Associate:
Dated: 31 March 2022
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