MAAS & HALLS

FAMILY COURT OF AUSTRALIA

MAAS & HALLS

[2014] FamCA 685

FAMILY LAW – PROPERTY – where the husband ceased participating in the proceedings during the hearing – where the matter proceeded undefended – where the property of the parties or both of them amounted to a net debt - where the wife made the substantial financial and non-financial contributions during and after the relationship – where the husband made limited financial contributions at the commencement of the relationship and during the relationship– where the wife brought significant assets into the relationship.

Family Law Act 1975 s79, 75

Baglio & Baglio [2013] FamCA 105
Bevan & Bevan [2013] FamCAFC 116
Clauson and Clauson (1995) FLC 92-595
Ferraro & Ferraro (1993) FLC 92-335
Hickey & Hickey (2003) FLC 93-143
Harper & Harper [2013] FamCA 528
Lee Steere & Lee Steere (1985) FLC 91-626
Lovine & Connor and Anor (2012) FLC 93-515
Mallet v Mallet (1984) 156 CLR 605
Pastrikos & Pastrikos (1980) FLC 90-897
Robb and Robb (1995) FLC 92– 555
Stanford and Stanford (2012) 247 CLR 108
Waters & Jurek (1995) FLC 92-635
Watson & Ling [2013] FamCA 57

APPLICANT:

Ms Maas

RESPONDENT:

Mr Halls

FILE NUMBER:

BRC

3460

2012

DATE DELIVERED:

22 August 2014

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Hogan J

HEARING DATE:

1 July 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Seaholme

SOLICITOR FOR THE APPLICANT:

Dale & Fallu Solicitors

THE RESPONDENT:

In person before departing shortly after Court resumed after lunch

ORDERS

IT IS ORDERED BY WAY OF FINAL ORDER THAT

The Respondent transfer to the Applicant all his right title and interest in the property situated at 1 B Street, D Town more particularly described as Lot … on … Parish of D Town, County of E and 2 B Street, D Town more particularly described as Lot … on RP … Parish of D Town, County of E in the State of Queensland within thirty (30) days of the date hereof.
The parties do all necessary acts and sign all necessary documents to refinance the mortgage debt due and owing to the National Australia Bank and or the Bank of Queensland in respect of the properties referred to in clause (1) above so that the Respondent is released from all liability in respect of such mortgage debt within thirty (30) days of the date hereof.
In the event that the properties are unable to be refinanced in order to release the Respondent from liability under the existing mortgages in accordance with clause (2) above, then the property situated at 1 B Street, D Town in the State of Queensland be sold by private treaty with such agent or agents selected by the Applicant and at such price determined by the Applicant and, after deducting the costs of sale, including agent’s commission and fees, any net proceeds be paid to the Applicant.
The livestock owned by the parties are to be sold by F Pty Ltd and, after deducting the costs of transport and agent’s fees, the net proceeds are to be distributed by the Applicant at her discretion in repayment of the parties’ debts due and owing to the National Australia Bank, Capital Finance or AGCO.
The Respondent retain as his own absolute property his share of the proceeds of the sale of H Town Street, H Town in the State of Queensland, the net proceeds received from his personal injuries claim, his entitlement to superannuation, any insurance entitlements and benefits and all other property in his possession or under his control including motor vehicles, bank accounts, any shareholdings, boat and accessories, furniture and chattels, plant, equipment and contents owned by I Pty Ltd.
The Applicant retain as her own absolute property her entitlement to superannuation, any insurance entitlements and benefits and all other property in her possession or under her control including motor vehicles, bank accounts, her shareholding in J Pty Ltd, furniture and chattels, plant and equipment currently in her possession or located on the property situated at 1 B Street, D Town in the State of Queensland.
The Applicant transfer to the Respondent, within a period of thirty (30) days, all her interest and shareholding in I Pty Ltd.
The Applicant retain as her own absolute property the 20 foot container and the cattle and pig brands.
Each party sign all relevant documents and do all necessary things to give effect or to transfer property to the entitled party in accordance with this Order within seven (7) days of a written request to do so.
Should either party fail to sign any documents necessary to implement this Order, a Registrar of the Court is appointed pursuant to s106A(1) of the Family Law Act 1975 (Cth) to sign any such document in lieu of the non-signing party.
All extant Applications are dismissed.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3460 of 2012

Ms Maas

Applicant

And

Mr Halls

Respondent

REASONS FOR JUDGMENT

The parties commenced cohabitation in about September 1997, married in 2007 and separated finally in October 2010. There are no children of their relationship.
Their voluntary separation has meant that they no longer enjoy the common use of property and superannuation in which they have existing legal and equitable interests. Their separation, at the end of about 13 years of cohabitation, has also brought to an end any “assumption that any adjustment to those interests could be effected consensually as needed or desired”.[1]
[1] Stanford and Stanford (2012) 247 CLR 108, [42].
I consider, in the circumstances, that it is just and equitable within the meaning of s 79(2) of the Family Law Act 1975 (Cth) (“the Act”) that, pursuant to s 79(1) of the Act, an order altering the interests in property owned by each of them is made.[2] So much is implicitly accepted by each party given the orders each seeks.
[2] Ibid at [42].
However, as is so often the case, the parties are in dispute about the terms of orders which are appropriate to reflect properly those matters which, by s 79(4) of the Act, the Court must consider.

The competing proposals

The wife seeks, in essence, that :
a)she receive the whole right, title and interest in real property situated at 1 B Street and 2 B Street;
b)the parties do all necessary things and sign all documents necessary to refinance the mortgage debt due and owing to National Australia Bank and/or Bank of Queensland in respect of the properties mentioned in (a) to release the husband from liability in respect of the same;
c)in the event she cannot refinance the debt secured over the real property, the real property located at 1 B Street is sold (at a price agreed between the parties or, failing agreement, at a price nominated by the president of REIQ) and, after paying any loan secured over the property, she receive any net sale proceeds;
d)any livestock owned by the parties is sold and she receive the net sale proceeds of the same, to be used by her, at her discretion, to repay debt owing by the parties to National Australia Bank, Capital Finance or AGCO;
e)the husband retain his share of the proceeds of sale of H Town Street, his personal injuries claim and all other property in his possession, including superannuation interests and whatever equipment owned by I Pty Ltd currently in his possession;
f)she retain her own superannuation, motor vehicles, bank accounts, her shareholding in J Pty Ltd, and any property or chattels located at 1 B Street;
g)she transfer to the husband all her interest and shareholding in I Pty Ltd;
h)she retain the 20ft container and the cattle and pig brands;
i)in the event of non-compliance with the terms of the Order, a Registrar is appointed pursuant to s 106B of the Family Law Act 1975 (Cth) to execute documents in the place of the husband.
Whilst it may appear that an order in such terms would see the Applicant receive “everything”, the debt of the parties is so significant that such a conclusion would be inaccurate.
The husband did not file a Response to the wife’s Further Amended Initiating Application or to any other Amended Initiating Application which has been filed on her behalf since the commencement of the proceedings.
In essence, the husband seeks that:
a)he receive all the right, title and interest in the real property situated at 1 B Street;
b)the remaining real property owned by the parties is sold by separate real estate agents as an open listing only;
c)the parties’ livestock is sold by K Pty Ltd with the net proceeds of sale to be divided so that he receive 80 per cent of the same and the wife receive 20 per cent of the same;
d)he receive 80 per cent of the total value of: the net sale proceeds of the real property other than 1 B Street, the wife’s superannuation entitlement, plant and equipment, chattels and motor vehicles currently in her possession or situated at 1 B Street – and the wife receive the remaining 20 per cent of the same;
e)he retain, as his absolute property, his share of the proceeds of sale of H Town Street, the payout of his personal injuries claim, the boat, the trailer and furniture and chattels in his control;
f)the property of the parties (as valued by L Valuers in August 2012) after deducting all liabilities excluding legal fees, is “divided” 80 per cent in his favour and 20 per cent in favour of the wife;
g)the wife pay him 80 per cent of the value of the chattels, plant and equipment listed in his affidavit filed 20 March 2013;
h)the wife pay him a cash adjustment of $130,000.00 said to represent the value of the ‘discount’ alleged to have been provided to Ms C Maas in the sale to her of land situated at the back of 1 B Street;
i)the wife provide him with a Utility vehicle equal to the age and value of the vehicle given to him for his birthday – a vehicle repossessed when the wife failed to meet the repayments due in respect of it;
j)the wife pay all outstanding telephone, electricity and rates bills;
k)the wife return the portable saw mill to him as it was given to him as a wedding gift;
l)the wife reimburse him the sum of $17,000.00 which he asserts was paid from his bank account to cover a debt incurred by I Pty Ltd;
m)he transfer to the wife his entitlement in I Pty Ltd with the consequence that she is to be responsible for all outstanding debts in relation to this entity;
n)the wife be solely liable for and indemnify him in respect of all loans (including loans to I Pty Ltd) and debts that relate to any assets retained by either party under the terms of the Order;
o)by way of spousal maintenance, the wife pay to him the sum of $600.00 per week to assist with education costs and also pay 80 per cent of the cost of his university fees.
The parties do not dispute their existing legal interests in the property and superannuation interests. Whilst the husband asserts an equitable interest in real property situated at M Street, N Town, the wife does not seek to include such asserted equitable interest in the property to be considered during these proceedings. Rather, she contends that the Court should, as part of the requirement to make orders which are just and equitable and appropriate, take into account that the husband received a compensation payment of about $88,000.00 after separation – for an injury incurred during cohabitation- and that he has already had the benefit of half of the net sale proceeds of a piece of real property sold by the parties after separation.
More about these issues will follow.
Save for the above, neither party asserted the existence of any other equitable interest in property.

The husband’s departure from the proceedings

A perusal of the Transcript of the proceedings will clearly establish that the husband ceased to participate in the hearing shortly after Court resumed after the lunch adjournment. However, only listening to the audio recording of the husband’s exchange with both the Court and the wife – who was then being cross-examined by him – will enable a proper appreciation of the manner in which the husband demonstrated his clear intention to cease his participation.
As outlined at the time, I had no hesitation in concluding the husband was aware, before he left the courtroom, that the proceedings would continue in his absence. I am well satisfied he has been accorded both procedural fairness and natural justice.
The husband had not been cross-examined at the time he chose to leave the courtroom. Whilst the contents of his affidavit material challenges some aspects of the wife’s evidence, the husband’s departure from the proceedings means that not only was the wife deprived of the opportunity and right to have Counsel cross-examine him on her behalf about such matters, the Court is deprived of the opportunity to assess the husband’s veracity or to determine what of his sworn assertions withstood the challenge of cross-examination.
I accept the wife’s evidence – as given in her affidavit material and in her answers to questions asked of her by the husband before he ended his participation in the proceedings – and prefer it to that given by the husband where the two conflict unless such evidence appears objectively inherently unlikely.

Discussion

The manner in which the Court is to approach proceedings for property settlement is well known.[3]
[3]See, for example : Pastrikos & Pastrikos (1980) FLC 90-897; Lee Steere & Lee Steere (1985) FLC 91-626; Ferraro & Ferraro (1993) FLC 92-335; Waters & Jurek (1995) FLC 92-635; Clauson and Clauson (1995) FLC 92-595 and Hickey & Hickey (2003) FLC 93-143.

Asserted add-backs

Whilst the wife initially sought that the Court notionally add back:
a)the husband’s share of the net sale proceeds of H Town in an amount of $114,340.00; and
b)an amount of $88,000.00 which arose from the husband’s post separation receipt of compensation monies relating to an injury incurred pre-separation,
she did not ultimately pursue this position at the hearing.
In any event, the Full Court of the Family Court said, in Lovine & Connor and Anor (2012) FLC 93-515[4] at [101]–[103]:
101. The judicial act here was the determination of just and equitable property Orders in the exercise of the discretionary jurisdiction conferred by s 79. Within the exercise of that overall discretion, when an issue of financial conduct conveniently described generically as a notional add-back arises, it is not determined by the application of fixed legal rules. Guidelines have been formulated over time in a number of well-known authorities concerning issues surrounding notional add-backs (see, for example, Omacini & Omacini (2005) FLC 93-218; DJM & JLM (1998) FLC 92-816; Townsend & Townsend (1995) FLC 92-569; Kowaliw & Kowaliw (1981) FLC 91-092; Browne & Green (1999) FLC 92-873; Chorn & Hopkins (2004) FLC 93-204; Cerini & Cerini [1998] FamCA 143; Polonius & York (supra)).
102. Undoubtedly such guidelines promote uniformity of approach and diminish the risks of inconsistency and capricious and arbitrary adjudication, but as the High Court made clear in Norbis & Norbis (1986) FLC 91-712 (“Norbis”), such guidelines do not constitute binding rules of law. Mason and Deane JJ said in Norbis at 75,166:
The nature of the issues which arise under sec 79 is such that there is either little or no scope for giving guidance in the form of binding rules of law.
103. Understood in this context, disposition of an issue concerning a potential notional add-back does not involve the application of a fixed rule to the facts on which its operation depends. Rather, the exercise is one of discretion within a discretion. That is, a discretion as to the manner in which the issue of notional add-back is to be treated within the overarching discretion of determining just and equitable orders under s 79.
[4] Delivered 24 October 2012 – pre Stanford.
I have had regard to Watson & Ling [2013] FamCA 57[5] (per Murphy J) at [29] – [35], Bevan & Bevan [2013] FamCAFC 116 per the plurality[6] at [79] and per Finn J at [160], Baglio & Baglio[7] per Murphy J at [186] and Harper & Harper [2013] FamCA 528 per Macmillan J at [63] and [64].
[5] Delivered 12 February 2013.
[6] Bryant CJ & Thackray J; delivered 8 August 2013
[7] [2013] FamCA 105, delivered 27 February 2013.
I consider that the “overarching discretion” of determining just and equitable orders between the parties can best be met by declining to add-back notionally the husband’s share of the net sale proceeds of the H Town property and his compensation payment. Consistent with what I consider to be the underlying theme of the decisions referred to above, with which I agree, I intend to consider these issues when considering other relevant s 75(2) matters.

Sale of real property to the wife’s daughter at an asserted under value

The husband seeks that the Court notionally add an amount of $130,000.00 to the property amenable to orders made pursuant to s 79 of the Act because of a sale of real property at an asserted undervalue to the wife’s daughter. However, there is no admissible evidence to support this contention and, consequently, I do not intend to accede to the husband’s request.

The property of the parties

I have outlined, in the table below, the parties’ respective contentions about the property and its value.
Doing the best that I can on the material before me, I conclude that the property of the parties – and its value - as at the date of trial is as set out in the column headed “Findings” below:

Ownership	Description	Wife’s Value as Originally Asserted	Husband’s Asserted Value	Wife’s updated material	Findings
Assets
1 B Street	$455,000.00	$455,000.00	$455,000.00	$455,000.00 Security for parties interest in 2
4 Lots H Town	$900,000.00	$1,240,000.00	Were in mortgagee possession and subject of sale by mortgagees[8]	These have subsequently been sold and the proceeds of sale used to discharge debts owed to NAB – some debt still remains (see below)
2 Lots H Town Street – both the subject of sale by National Australia Bank
O Street	$150,000.00 /$250,000.00	$250,000.00
Husband and Wife	2 B Street 50 per cent interest owned as joint tenants	$175,500.00	$175,000.00	$175,500.00	$175,500.00 Mortgaged to BOQ
Cattle (partnership assets)	$20,000.00 /$15,000.00	$25,000.00	$15,000.00	$15,000.00
Bendigo Bank	$11,900.00 /$11,700.00	$11,900.00	$11,700.00	$11,700.00
20ft container	No value	No value
Farming assets	$12,000.00	$12,000.00
Husband – purchased post separation	Utility vehicle	$5,000.00	$5,000.00
Husband	Boat trailer	$3,000.00
Wife	4x4 Vehicle	$9,000.00
Total	$1,861,900.00	$2,289,050.00	$686,200.00
Liabilities
NAB Mortgage on Land	$765,567.00 /$611,371.30 (2 August 2013)	$765,567.00	$537,284.00	$232,000.00 (reduced by sale of H Town Road properties
NAB Loan Multi Saw	$61,112.00	No longer exists – assets repossessed
NAB Loan Lucas Mills	$25,331.00	No longer exists – assets repossessed
NAB personal loan	$7,504.00	$7,504.00
BOQ mortgage over 2	$172,906.00
Capital Finance arrears	$66,644.00	$66,644.00	$72,000.00 $77,184.00	$77,184.00
AGCO	$88,123.00	$88,123.00	$96,000.00 $96,101.67	$96,101.67
Outstanding rates	$11,500.00	$11,500.00	$16,809.00	$16,809.00
Credit Cards (various institutions)	$78,500.00	$78,500.00	$78,500.00	$76,500.00
Wife’s tax debt	$103,000.00 + interest and penalties	$103,000.00
Totals	$1,083,191.00	$1,197,962.00	$782,004.67
Superannuation
Wife	Vehicle 1	$35,531.80	$37,052.00	$37,052.00
Vehicle 2	$1,788.50	$1,478.00	$1,478.00
ING	$3,278.00	Nil (rolled over)
Totals	$37,320.30	$38,530.00

[8] Wife’s affidavit filed 7 March 2014.

I have not included the chattels in the parties’ respective possession in the table above. I have determined that this is warranted given:
a)there is no expert evidence to establish the value of the same; and
b)the “value” asserted by each party as to the same is widely divergent: the wife originally asserted that the chattels should be regarded as having a value of $30,000.00 but later asserted they should be accorded no value – although her Counsel ultimately submitted I should be persuaded that the chattels in the wife’s possession have a value of $2,000.00 and the chattels in the husband’s possession have accorded a value of $5,000.00 – whilst the husband asserted they should be accorded a value of $132,150.00.
I also consider it appropriate to exclude from the table the 15 per cent shareholding in J Pty Ltd which is the registered proprietor of real property situated at P Street, P Town.
I do so because:
a)there is no evidence to establish the value of either the 15 per cent interest in J Pty Ltd or the real property owned by it;
b)the real property has been listed for sale for a number of years without success.
In the circumstances, the best that can be done is to regard the 15 per cent shareholding as a financial resource – albeit of an unknown (if any) value which may be productive of some financial benefit at an indeterminate time in the future – available to the wife.
I have also determined not to include in the table any chattels owned by I Pty Ltd which are said to be in the husband’s possession. I do so because there is no expert evidence before me to establish the value of the same.
I record that the husband asserts that such chattels have been stolen. Whilst I have already explained that I prefer the wife’s evidence to that of the husband, the absence of expert evidence prevents me from accepting her lay opinion or assertion as to the value of the same.
I have also excluded from consideration the debt owing to National Australia Bank by I Pty Ltd. In her initial affidavit, the wife asserted this debt amounted to $72,857.00 and was $142,232.44 as at 2 August 2013[9]; but in her most recent affidavit the wife asserted it was in an amount of $143,000.00. The husband asserted it was in an amount of $72,557.00. Further, Counsel for the wife submitted that the debt stood at $91,759.00.
[9] Wife’s affidavit filed 7 August 2013, paragraph 41(b).
Given the disparity in amounts, I am unable to determine with any particularity the actual amount of debt for which I Pty Ltd remains liable. What is however, clear on all of the evidence is that, as it is no longer operating the business previously operated by it, has had many of the chattels leased by it repossessed as a result of non-payment and has no identifiable assets from which sale the liabilities can be met, whatever liabilities remain are unlikely to be able to be extinguished by it.
I also decline to include $9,700.00 as a liability. This amount represents the totality of loan repayments which will become due and payable by the wife in respect of her motor vehicle over time. I consider it more appropriate to consider the wife’s obligation to meet the loan payments as and when they fall due during a consideration of the parties’ relative financial position pursuant to s 75(2).
I decline to include as a liability of the parties the $18,768.00 alleged to be payable to Q Pty Ltd because the evidence suggests this debt has been paid and is no longer outstanding. There is nothing in the evidence to persuade me that the wife should have to “repay” this amount to the husband even if he in fact caused it to be paid on behalf of I Pty Ltd. Given my findings about the wife’s overwhelming financial contributions to the reduction of joint debt after separation, the husband’s discharge of this debt – in whatever amount – pales in comparison.
In considering the relevant matters mandated by s 79 of the Act, it must be remembered that:
a)“community of ownership arising from marriage has no place in the common law”[10]; and
b)there is no presumption of equality of contribution between parties to a marriage, irrespective of the length of their union;[11] and
c)the exercise of the discretion conferred must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity.[12]
[10]Stanford and Stanford (2012) 247 CLR 108, [39] citing Hepworth v Hepworth (1963) 110 CLR 309, 317 per Windeyer J.
[11] Mallet v Mallet (1984) 156 CLR 605.
[12] Bevan & Bevan [2013] FamCAFC 116, [73].
I do not propose, in undertaking the consideration and assessment of the matters prescribed by s 79(4) and s 75(2) of the Act to summarise my conclusions using percentages. Whilst I acknowledge that this departs somewhat from the “usual” course, it cannot be forgotten that the use of “percentages” is but one means by which the Court explains its assessment of contributions and other relevant s 79(4) matters.
In this case, where the parties are left with significant debt, I consider the use of “percentages” to describe my assessment of their respective contributions and the relevant s 75(2) factors as meaningless. It is much clearer for me simply to set out my findings in respect of these matters and then outline the basis on which I have been persuaded that it is just and equitable to make the order ultimately made.

The contributions made by the parties

The evidence clearly establishes that the wife made the overwhelming financial contributions at the commencement the parties’ relationship. Whilst there is no expert evidence of the retrospective value of the real property she owned at that time, I am satisfied that her ownership of it and her significantly superior income during the relationship provided both the springboard for the parties’ later real property acquisitions and the means by which they were able to obtain the borrowed funds used for such acquisitions.
Whilst the husband challenged the wife’s account of the asserted value of a particular piece of real property during the cross-examination he undertook prior to leaving the proceedings, I accept the wife’s evidence in this respect. I do not accept the husband’s contention - apparent from his questioning of the wife – that the amount her former partner accepted from her to transfer his interest is the value of the property at the time: as was pointed out to the husband before he departed, all that this evidence establishes is that the wife’s former partner was prepared to accept the amount the wife paid him for his interest.
I accept that, in addition to the real property she owned at the commencement of the relationship, the wife owned a motor vehicle (said to be valued at about $30,000.00), furniture and contents (said to be valued at about $10,000.00) and had an entitlement to superannuation (then valued at about $23,000.00).
I accept the wife’s evidence that, at the commencement of their relationship, the husband had only some personal effects and an entitlement to superannuation then valued at about $20,000.00.
The wife worked as a medical practitioner during the period of cohabitation. Whilst there were periods of time during which, through ill-health, she was unable to work for remuneration, she continued to receive income as a consequence of an income protection policy. I accept her evidence that, from whatever source, her gross annual income throughout the relationship normally exceeded $100,000.00. I also accept that she applied her income – net of tax – for the support and benefit of the parties, whether to meet day to day expenses or the repayments associated with monies borrowed to acquire real property.
I accept that, during the relationship, the wife paid all loan repayments to the National Australia Bank in relation to the parties’ indebtedness in respect of real property owned by them.
I accept that, when he was working as a real estate agent, the husband’s annual income fluctuated. I accept the husband earned no less than about $19,000.00 per annum and that, for periods, he earned up to about $34,000.00 per annum. I also accept, however, that in the period between 2003 and 2008, the husband earned a total of about $30,000.00. I accept the monies earned by the husband were applied for the joint benefit of the parties.
About three years after the parties started living together, the husband received a personal injury payment of approximately $50,000.00. I accept he applied about $30,000.00 of these funds to the installation of a swimming pool, the purchase of an aluminium boat and trailer and in a payment of about $14,000.00 toward the wife’s taxation liability to the Australian Taxation Office.
The parties commenced a partnership in 2000. I accept it derived little income. It currently runs cattle, said to be valued at about $15,000.00. Whilst the partnership acquired various chattels, plant and equipment, virtually all of these have been repossessed as a consequence of the parties’ inability to meet the necessary repayments.
I accept the wife’s evidence that during the cohabitation, money she earned was used to pay for swimming and violin lessons for the husband’s children from a previous relationship as well as meeting some of his assessed child-support payments.
I accept the wife met virtually all of the household expenditure and all of the mortgage payments in relation to mortgages secured over real property owned by the parties. I also accept she paid the parties’ private medical insurance premiums and met the cost of rates and utility payments. I also accept the wife paid the private health insurance premiums for the husband’s former wife and his three children of that relationship.
I accept the wife’s evidence about the various property transactions in which the parties were involved during the relationship. It is clear that, at least for some time, the purchases resulted in relatively significant positive returns on investment. I accept that whatever positive return was achieved was applied to the support of the parties, the reduction of joint debt or the acquisition of other real property.
Unfortunately for the parties, the evidence also reveals that, after some initial success and profitability, the acquisition, subdivision and resale of property failed to provide the no doubt hoped for return. This had the consequence that the parties have been - and remain significantly - indebted to commercial lenders who have subsequently acted to sell real property which provided security for their advancement of funds to the parties.
As the table included earlier in these Reasons clearly shows, the parties currently owe about $405,000.00 on real property valued at $630,000.00. Whilst this results in a positive equity of about $225,000.00, none of this remains once the debts to Capital Finance ($77,184.00) AGCO ($96,101.67), rates ($16,809.00) and credit card debt ($76,500.00) is taken into account.
I accept the wife’s evidence that, since it was purchased in about April 2009, she has been responsible for meeting the repayments associated with the parties’ 50 per cent interest in real property located at 2 B Street, D Town. I accept she has met these repayments, in an amount of about $1,000.00 per month, both before and after the parties’ separation.
In about January 2008, the parties started a business on the real properties owned by them (“the business”). The business was initially operated via a partnership between the wife and the husband. However, in about October 2008, I Pty Ltd (“the company”) was established and, thereafter, the business was conducted by the company. The parties are equal shareholders in the company. The husband is the sole director of the company. I accept the wife applied funds from the sale of real property to the establishment and operation of the business.
I accept that the husband applied funds of about $24,000.00 received by him as a consequence of ‘cashing in’ his entitlement to superannuation to the acquisition of plant and equipment used by the business and to the establishment of the company.
I also accept the wife made significant financial contribution to the establishment of the business. Further significant sums were borrowed from Capital Finance, AGCO and National Australia Bank and at least some of these liabilities remain.
I accept the husband was responsible for the day to day working activities of the business and the company. Until separation, the business generated sufficient income to meet, at least partially, the lease and chattel mortgage repayments relating to its equipment.
I accept the wife’s evidence that, after separation in October 2010, the husband caused the company to stop meeting loan repayments in relation to the various chattel mortgages and chattel leases for plant and equipment. I accept she met these outgoings, by payment of about $7,000.00 per month, until about March 2011 when she was unable to continue to afford to do so. In about December 2012, Capital Finance obtained judgment against the company for in excess of $66,000.00.
I accept the husband made no financial contribution at all to the company after separation – he simply walked away from the business and company, leaving the wife to deal with the consequences of the failure and cessation of the business.
I accept that, after separation, the parties sold real property at H Town and divided the net sale proceeds of the same equally. This saw each receive about $114,300.00. I accept the wife applied “her” share of the sale proceeds in this amount to the reduction of joint debt, meeting lease repayments incurred during the relationship, paying amounts due under chattel mortgages taken up during the relationship and meeting other debts incurred: both personal and those associated with the company.
I accept that, after separation, the wife continued to make all mortgage repayments in relation to the real property owned by the parties: for example, from separation until about March 2011, she paid about $1,330.00 per week.
I also accept the wife has been left solely responsible for meeting credit card repayments and other debts- incurred during the period of cohabitation – in an amount of about $80,000.00. I accept that, since separation, she has paid about $75,330.00 toward meeting these liabilities.
Whilst the husband asserts that he too met liabilities after separation – by paying the Q Pty Ltd monies owing by the company - his evidence as to the amount paid differs. For example, in his Financial Questionnaire he asserts he paid $18,767.94 whilst in his affidavit filed 22 March 2013, he asserts he paid $17,230.20.
In the absence of any evidence from the husband that he used “his” share of the sale proceeds in a similar manner, I am persuaded that, in contrast to the manner in which the wife applied her monies, it is more likely than not that he applied his $114,300.00 for his own benefit.
The wife’s use of her share of the net sale proceeds of the H Town property in the manner outlined above represents another very significant financial contribution by her. It is one in respect of which there can be no countervailing contribution of a non-financial nature by the husband given the fact of separation and the absence of children.
It is clear that the husband’s direct financial contributions during the relationship were minimal. In fact, there is no real contest between the parties about this - for example, in his affidavit, the husband says, after listing the properties the parties purchased “jointly” during cohabitation: “[Ms Maas] purchased these properties and gave me a half and equal share in each. At no time was she coerced to do so.”
I accept the wife’s evidence that the husband assisted by supervising various works to the real property at 2 P Street - for example, the construction of a driveway, an extension to the house, the planting of gardens and landscaping, the painting of the house, the installation of a fireplace and the renovation of the living area, kitchen and master bedroom and the clearing of much of the 17 acre block. I also accept her evidence that the parties were assisted in such endeavours by both paid tradespeople and family members.
Whilst I accept that at some time shortly after the parties started their relationship, the husband assisted the wife by selling a piece of real property for her on a ‘no commission’ basis, this contribution pales into insignificance when compared to the wife’s overwhelming financial support of the parties during their relationship and her application, after separation, of ‘her’ share of the H Town sale proceeds to meeting joint debt.
Whilst the husband may well have been responsible for organising the move of a house from property at P Street to the property at 1 B Street and for organising tradespeople to perform tasks such as the provision of underground water, power and phone services to the property, the erection of fences and the installation of water tanks, such tasks were only possible because of the wife’s ability to pay for the same. In addition, whilst I am prepared to proceed on the basis that the husband was engaged in farming for at least some part of the parties’ cohabitation, such venture was unproductive of any significant financial return to the parties.
As noted above, there are no children of the relationship. Whilst I accept that the wife cleaned the home on a weekly basis, prepared most meals in the evenings and carried out most of the household chores, I also accept that the husband assisted her in some of these tasks from time to time. I accept the husband assisted the wife on occasion by caring for her, to some extent, during some periods of ill-health.
I note that, whilst the injury in respect of which the husband received a compensation payment happened in August 2005, the wife does not suggest she was required to make more significant contributions to the operation of the household as a consequence of injury suffered by the husband at that time.
I am well persuaded that the wife made the overwhelming financial and non-financial contributions during the parties’ 13 year cohabitation and in the more than three and half years since separation. She has been left to bear the burden of the parties’ significant financial difficulties without any support from the husband – he has proceeded to apply both his ‘share’ of the net sale proceeds of the H Town property and the $88,000.00 compensation payment received by him for his own benefit. She has been left to bear not only the financial burden, but also an emotional one, of dealing with creditors unassisted by the husband.
None of the orders proposed by either party will have any effect on the earning capacity of either party.
The wife is 55 years of age. She is a medical practitioner earning approximately $130,000.00 per annum before tax. While she asserts the existence of a number of health issues, she remains capable of continuing in this employment. The evidence reveals she has a significant liability to the Australian Taxation Office.
The husband is 58 years of age. Whilst he received compensation as a consequence of a work injury, he has been able to engage in paid employment since separation.
In the absence of evidence to the contrary, I accept that, by virtue of his past experience, the husband is capable of paid employment. In addition, he has post-separation experience working and, on his evidence, is currently studying for a degree. According to his financial statement,[13] until January 2013, he earned approximately $700.00 per week gross and had expenses of about $730.00 per week.
[13] Filed 22 March 2013.
I accept the husband applied compensation proceeds – in an amount of about $88,000.00 – toward the purchase of real property situated at M Street, N Town. Whilst this property is apparently owned in the name of the husband’s former partner Ms R, the husband asserts an equitable interest in the same. As I understand it, there are property settlement proceedings on foot between the husband and Ms R.

In his affidavit filed 22 March 2013, the husband asserted that:
In May 2011 I received $88,000.00 as a compensation payment. This money has been used to support me as well.
In his affidavit filed 27 November 2013 – after the wife’s affidavit had exhibited information from his previous partner showing the deposit of funds into a bank account in her name – the husband asserted that:
[Ms R] suggested I put my money into her account which I did and transferred the boat and trailer into her name. The money I transferred into her name was the balance of my half of the sale proceeds from the sale of [H Town].
When I received a payout for my knee some $88,000.00 this was also deposited into the same account owned by [Ms R].
The existence of the legal proceedings between the husband and Ms R means that I am unable to form a clear picture about the husband’s likely future financial position. His abandonment of the proceeding further added to this reality. Doing the best that I can, it seems to me that I can comfortably conclude he has been able to re-join the paid workforce since separation and is in the process of undertaking further study to improve his employability. He has had the entire benefit of the $114,300.00 received after the sale of the H Town property and the $88,000.00 received by way of compensation payment – at least until he decided to deposit funds into Ms R’s account, an action which I am comfortable in concluding for the purpose of this proceeding, was likely done in an attempt to “quarantine” the same from consideration in these proceedings.
As noted above, he has left the wife alone to deal with the significant financial liabilities incurred during the relationship.
The wife has two children, now adult, from a previous relationship. The husband has four children, now adult, from a previous relationship. It is necessary to consider the support provided by each party for the children of the other from previous relationships.[14] I accept the wife’s evidence that the husband’s son, Mr S, now aged about 19 years, lived with the parties from about October 2007 to October 2010 (that is, for three years before separation). I accept that, during this period, the wife was responsible for his financial support. He continues to live with her family.
[14] Robb and Robb (1995) FLC 92– 555 at p. 81, 547.
The wife’s children from a previous relationship were about 11 and 9 years of age when the parties commenced cohabitation. There is no evidence to establish the nature of those children’s care arrangements during the cohabitation and in the absence of the same I am unable to reach any conclusion about the extent to which – if at all – they were supported by the husband.

Justice and equity of the proposed orders

The orders sought by the wife will enable her to have the opportunity to manage the repayment of liabilities incurred during the relationship. If they are made she will receive the real property currently jointly owned by the parties. She will assume sole responsibility for the repayment of the liabilities secured over the same. As noted above, without fully appreciating the level of indebtedness which the wife will continue to be responsible for, it may have been thought that “her” orders would see her receive “everything” and the husband “nothing”. However, once proper regard is paid to the extent of the joint liabilities for which the wife will continue to be liable and the fact that the husband has already had the benefit of about $202,000.00 – none of which has been applied to the reduction of matrimonial debt – I am easily persuaded that orders in the terms sought by the wife are just and equitable and appropriate.
The wife’s financial position will be dire but she retains her income earning capacity which is significantly greater than that of the husband’s.
In the circumstances of this case, on the evidence before me, I am satisfied that an order in the terms sought by the wife is just and equitable and appropriate.

Husband’s Spousal maintenance claim

The husband seeks an order that the wife pay him $600.00 per week spouse maintenance. He does so against the following background:
a)in June 2012, he obtained a Certificate from TAFE;
b)in July 2012, he was accepted as a full-time student, studying for a Bachelor degree;
c)he worked in casual paid employment, earning approximately $700.00 (gross) per week, until about January 2013 at which time he asserted that his studying commitments allegedly prevented him from engaging in paid employment.
I am not persuaded the husband has established that he is unable to support himself adequately: s.72(1) of the Act. He has previously demonstrated the ability to do so, including whilst engaged in studying. Like many other students, he may well have to work on weekends and at night in order to support himself while he improves his qualifications.
I dismiss the husband’s application for the payment of spousal maintenance.

I certify that the preceding seventy-five (75) paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan delivered on 22 August 2014.

Associate: KV

Date: 22 August 2014

[2014] FamCA 685

22 August 2014

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