Masland and Eaton (No.2) - [2012] FMCAfam 407

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MASLAND & EATON (No.2)

[2012] FMCAfam 407

FAMILY LAW – Property – undefended proceedings – conduct of proceedings to date – failure to conduct proceedings with due diligence – small asset pool – non-disclosure – assessment of contributions – weight to be given to initial contributions – special recognition – waste – assessment of section 75(2) factors – just and equitable.

Family Law Act 1975, ss.72, 74, 75(2), 79(4)

Masland & Eaton [2012] FMCAfam 373
Taylor v Taylor (1979) 143 CLR 1
Briese & Briese (1986) FLC 91-713
Black & Kellner (1992) FLC 92-287
Weir & Weir (1993) FLC 92-338
Luciano & Luciano (2000) FamCA 701
Lee Steere v Lee Steere (1998) FLC 91-626
Ferraro v Ferraro (1993) FLC 92-335
Clauson v Clauson (1995) FLC 92-595
Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143
Wardman & Hudson (1978) FLC 90-466
Biltoft & Biltoft (1995) FLC 92-614
Russell v Russell (1999) FamCA 187
Bevan & Bevan (1995) FLC 92-600
Pierce & Pierce (1999) FLC 92-844

Applicant:

MR MASLAND

Respondent:

MS EATON

File Number:

ADC 4675 of 2009

Judgment of:

Brown FM

Hearing dates:

18, 19 and 20 April 2012

Date of Last Submission:

20 April 2012

Delivered at:

Adelaide

Delivered on:

7 May 2012

REPRESENTATION

Counsel for the Applicant:

Mr Berman SC

Solicitors for the Applicant:

Mark Esau

Counsel for the Respondent:

In person

ORDERS

In full and final settlement of all claims for the settlement of matrimonial property:

That the moneys held in the joint account of the parties with Bank SA (account number (omitted)) be divided equally between the parties and the account closed.
That the moneys held in the trust account of (omitted) of, (omitted), South Australia, in the sum of $51,392.00 being the proceeds of sale of the property located at Property A, be declared to be the sole property of the husband.
In order to give effect to order (2) hereof the wife sign, execute and deliver al necessary deeds, instruments or documents to authorise the appropriate officer at (omitted) to transfer to the husband the monies held by (omitted), being the proceeds of sale of the property located at Property A, in whatever manner the husband or his solicitor directs.
Pursuant to section 90MT(1)(a) of the Family Law Act 1975 there be a splitting order in respect of the husband’s AMP Life Limited Superannuation (account number (omitted) and pursuant to section 90MT(4) of the Act a base amount in the sum of $15,200.00 be allocated to the wife out of the husband’s interest in such sum.
The solicitor for the husband serve a copy of these orders on the Trustee of the AMP Life Limited Superannuation by (omitted) and thereafter the aforesaid Trustee has liberty to relist the matter in the event that the trustee is unable to comply with order (4) hereof but otherwise the operative time for the aforesaid splitting order shall be 25 May 2012.
The Trustee of the AMP Life Limited Superannuation, the husband and the wife in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all necessary documents as are required to calculate the payment entitlements of the wife in accordance with order (4) hereof.
That as and from the date of this order, each party shall retain all assets which each now has when so ever or how so ever required; including but without limiting the effect hereto the husband shall retain for his sole use and benefit absolutely free from any further claim or demand of the wife:
(a)furniture and effects in his possession, power and control.
(b)any motor vehicle in his possession.
(c)any savings and investments in his sole name.
(d)any superannuation entitlement, long service leave, annual leave or other work related benefits.
(e)his personal effects.
(f)any other real and/or personal property and/or financial resources of the husband in the husband’s name and/or possession not otherwise specified herein.
Including but without limiting the effect hereof, the wife shall retain for her sole use and benefit absolutely free from any further claim or demand of the husband:
(a)the furniture and furnishings in her possession, power and control.
(b)any motor vehicle in her possession.
(c)savings, shares and investments in her name.
(d)any superannuation entitlement, long service leave, annual leave or other work related benefits.
(e)personal effects.
(f)her interest in her Property C and Property T properties.
(g)any other real and/or personal property and/or financial resources of the wife or in the wife’s name and/or possession not otherwise specified herein.
That hereafter each party is restrained and an injunction granted restraining each of them from pledging the credit of the other.
That hereafter each party shall discharge without calling upon the other to contribute thereto their several debts contracted by or for them.
That each party shall do all such things and acts and sign all such necessary documents to give effect to the terms of this order.
Pursuant to section 106A of the Family Law Act 1975 the Registrar of the Family Court at Adelaide is appointed to execute any necessary deeds or instrument required to be completed to give effect to these orders in event either party refuses or neglects to comply with order (11) hereof.
A copy of this judgment and the orders made today and a copy of the judgment and orders made on 20 April 2012 are to be served on the respondent by pre-paid post at her last known address and also on her electronically at her last known email address.
All applications be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Masland & Eaton (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT ADELAIDE

ADC 4675 of 2009

MR MASLAND

Applicant

And

MS EATON

Respondent

REASONS FOR JUDGMENT

Introduction

These reasons for judgment relate to the final settlement of matrimonial property issues. The parties to these proceedings are Mr Masland “the husband” and Ms Eaton (formerly Masland) “the wife”.
For reasons already delivered, I have determined that the matter should be determined without any further input from the wife.[1] Essentially, the husband’s application is being determined as if it was undefended.
[1] See reasons Masland & Eaton [2012] FMCAfam 373
It is a significant thing for proceedings to be determined in the absence of one of the parties. The court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings.
Before a person can be adversely affected by judicial order, he or she must be afforded an adequate opportunity to be heard.[2] I am satisfied that Ms Eaton has been given an adequate opportunity to appear in these proceedings and put her position before the court. On 20 April 2012, I provided oral reasons, in Ms Eaton’s absence, as to why I had formed this view.
[2] See Taylor v Taylor (1979) 143 CLR 1
In formulating the current reasons for judgment, which are directed towards the appropriate mechanisms for the division of the parties’ property and the justice and equity of such a division, it will be necessary to revisit the procedural history of the matter to date.
This history puts into context Ms Eaton’s actions during the earlier hearing of the matter and is to be taken into account as part of the rationale for my decision to deal with Mr Masland’s application on an undefended basis.
As will become clear, these proceedings have been on foot for a significant period of time. The delay in their finalisation is in no way due to any act or omission attributable to Mr Masland. Mr Masland is entitled to have his application for property settlement determined within a reasonable period of time pursuant to the applicable principles of law.
As such, Mr Masland needs neither Ms Eaton’s formal imprimatur nor her cooperation to have his application determined. Rather there is an obligation, on Ms Eaton’s part, if she wishes to be involved in the proceedings, for her to attend at court as required and pursue any application put by her or on her behalf with due diligence.
The Federal Magistrates Court is a court of private law. It determines disputes between parties according to law. In this case, according to the provisions of the Family Law Act 1975, which relate to the division of property following martial breakdown.
The court cannot compel a respondent to engage with litigation. It is however obliged to give a respondent the opportunity to put evidence before the court and if he or she wishes to contest any evidence relied on by the applicant.
However, a respondent, whether by intransigence, disinterest or manipulation, cannot succeed in denying an applicant a just resolution, according to law, to his or her application, by choosing not to take part in proceedings because they do not proceed in the manner of his or her preference.
I am satisfied, on the basis of the evidence available to me, that Ms Eaton has behaved capriciously and manipulatively throughout these proceedings. Ultimately there comes a time when this behaviour reaches a point where the court concludes that the interests of justice, including Mr Masland’s entitlement to have his case finally determined, outweigh Ms Eaton’s entitlement to put material before the court.

The history of the proceedings to date

The husband commenced these proceedings on 16 March 2010, which obviously is over two years ago now. It is a period which far exceeds the normal timeframe for the disposal of matters of this type.
At the time of his application, the husband wished his application to be dealt with urgently by the court because of issues arising from a significant joint debt, which the parties owed to the Australian Taxation Office, following a failed business venture, operated as a partnership by them, under the name (omitted).
In his application, Mr Masland sought the removal of a caveat lodged by Ms Eaton on a piece of real property owned by him at Property A, This was a property the husband had owned prior to the commencement of the relationship between the parties.
Documents provided by Mr Masland, at the time, indicated that the Deputy Commissioner of Taxation had obtained a judgment against both parties in the sum of $108,652.98. Mr Masland further deposed that he had been served with a bankruptcy notice arising from the judgement. Interest was accruing on the judgment debt.
In his application, Mr Masland sought the removal of the wife’s caveat as a matter of urgency. On a final basis, he proposed the sale of Property A and, after payment of the moneys due to the Taxation Office and to clear any mortgage secured against the property, whatever proceeds remained be paid to him.
Given the situation of the judgement debt, it was apparent that there was a degree of urgency about the matter. Accordingly, the case was listed on 24 March 2010. Both parties were legally represented on this occasion and orders were made by consent for the caveat to be removed and the Property A property sold.
Accordingly it cannot be said that this order was made in the face of formal opposition by the wife. Ostensibly at least, she acknowledged that the sale of the property was unavoidable. More recently, she has expressed a sense of grievance that her caveat was so removed.
On 22 April 2010, the matter was listed again before the court. By this time, the Property A property had been sold and orders were made directing the conveyancer concerned to direct a portion of the proceeds towards the settlement of the tax debt, no doubt with the intention of temporarily mollifying the Australian Taxation Office.
The parties had also been earlier referred to a financial mediation conference scheduled for 5 July 2010. The purpose of this conference was to give the parties an opportunity to resolve the issues between them through a process of conciliation conducted by a registrar of the court.
On 1 July 2010 the wife filed the necessary responding documents to the husband’s application. On a final basis, she sought generic property orders that the parties’ matrimonial property and superannuation be divided 80/20 percent in her favour. She also sought an order that the husband pay her spousal maintenance in the sum of $150.00 per week.
The conciliation conference did not assist the parties to resolve the issues between them. In those circumstances, the matter returned to court on 20 July 2010, on which occasion it was fixed for final hearing on 17 and 18 February 2011.
The wife was legally represented on this occasion, but not by her usual solicitor, who had instructed an agent to appear on her behalf. This agent had not been fully apprised of all the circumstances pertaining to the matter, particularly the fact that Ms Eaton was pursuing an application for spousal maintenance, not only on a final basis but also in the interim.
On 4 August 2010 Ms Eaton’s former solicitor wrote to the court requesting that the matter be re-listed because of this apparent oversight. Mr Masland had not formally responded to the interim spousal maintenance claim up to this stage. In these circumstances, the matter was re-listed before the court on 16 August 2010 for further mention.
At this stage, the husband’s solicitor indicated to me his client’s position that Mr Masland was not in a position to make any payment whatsoever of spousal maintenance. It had further been indicated to the court, by the Registrar who had conducted the conciliation conference of 5 July 2010, that a further conference might be useful, if the parties completed a more exhaustive process of discovery or exchange of relevant financial documents.
It was also apparent to me, at this stage, that the pool of assets potentially available to be divided between the parties was a small one. In the circumstances, it was agreed that there should be a further conciliation conference and comprehensive orders were made requiring each party to provide specified documents to the other. The date scheduled for the second conciliation conference was 10 November 2010.
In her affidavit in response to the husband’s application, the wife indicated that, following the parties’ separation, she had inherited a real property in (omitted) owned by her late mother. She further deposed that she had used this property as collateral to purchase a property at Property C, where she was living with her daughter. This affidavit had been professionally prepared on Ms Eaton’s behalf.
As a result of this disclosure, by Ms Eaton, on 16 August 2010, it was ordered by the court that the wife provide appraisals of these two properties, which were located at Property C and Property T respectively.
On 13 August 2010, the solicitors who had represented Ms Eaton up to this stage, formally withdrew. The solicitor concerned did however attend court on 16 August as a courtesy to all concerned. Ms Eaton did not attend the conciliation conference on 10 November 2010. It was said that she was too ill to attend.
The matter returned to court on 12 November 2010. Ms Eaton appeared on her own behalf. She did not personally attend at court but was given leave to appear via a telephone link to her home. The interim spousal maintenance aspect of her case was allocated a hearing date on 1 December 2010, notwithstanding that the fact that the final hearing was imminent.
Ms Eaton did not attend at the time scheduled for the interim hearing. Mr Masland and his solicitor appeared at the time appointed. Mr Masland had earlier filed an affidavit in response to the wife’s application for spousal maintenance.
He deposed that his wage was in the vicinity of $550.00 per week and his recurrent weekly expenses, including taxation, amounted to approximately the same sum. In these circumstances, it was his position that he had no capacity to satisfy the wife’s claim for spousal maintenance.
The wife’s statement of financial circumstances, filed on 1 July 2010, indicated that she was receiving rent from the Property T property in an amount of $240.00 per week. She did not indicate what was the payment required to service the mortgage on the Property C property, which she occupied with her two adult children.[3]
[3] See wife’s statement of financial circumstances filed on 1 July 2010 at item 21
Given the circumstances arising from the wife’s non-appearance at the interim spousal maintenance hearing and the financial circumstances of his client, Mr Esau, the solicitor for the husband, sought the dismissal of the wife’s application for interim spousal maintenance.
Given that the final hearing date was imminent, I acceded to this application. Prior to the date and time scheduled for the interim spousal maintenance hearing, Ms Eaton had not indicated to the court that she would be delayed.
On 1 December 2010, Mr Esau complained that the wife had not cooperated in respect of providing any independent appraisal regarding the valuation of either her Property C or Property T properties. By this time, it was also clear that the taxation debt had been paid in full and there were some modest proceeds from the sale of the Property A, property in the sum of around $50,000.00.
Given my concerns about the modest extent of the pool of assets available to be divided between the parties, when coupled with the fact that Ms Eaton was unrepresented, it seemed to me that, notwithstanding the failure of the earlier conciliation conferences, there was some utility in providing to the parties another opportunity to attempt a consensual resolution of the proceedings.
For this reason, a further conciliation conference was appointed for 22 December 2010. Otherwise, the final hearing dates of 17 & 18 February 2011 were confirmed.
On the day scheduled for the further conciliation conference, Ms Eaton telephoned the court to advise that she was too ill to attend. Later she provided a medical certificate, which certified that she had “a medical condition and will be unfit for work from 20 December 2010 to 24 December 2010 inclusive.”
On 20 January 2011, in anticipation of the final hearing, Mr Masland filed an updated affidavit concerning his financial circumstances and an affidavit of his evidence for trial. The wife did not comply with the court’s orders in respect of the filing of trial documents.
At the instigation of the husband’s solicitors, the case was listed for mention on 10 February 2011. Mr Esau was concerned that the matter might not be ready to proceed. He was particularly concerned at the lack of disclosure, on the wife’s part, in respect of the value of her two real properties. Ms Eaton was allowed to attend the mention listing by telephone from her home.
On this occasion, it was the wife’s position that she was not in a position to proceed with the matter due to ill health. Up to this stage, she had not provided any independent or extensive medical evidence in regards to the state of her health.
However, in her affidavit filed 1 July 2010, Ms Eaton had indicated that she had suffered Type 2 Diabetes for several years. She in fact complained that the husband had caused her health to deteriorate by compelling her to eat an unhealthy diet.
She further deposed that she had injured her left foot, at a supermarket, when it had come into contact with a shopping trolley. The wound so caused by the accident had subsequently become gangrenous and this had resulted in the amputation of her leg three inches below her knee. She further deposed that she had been prescribed pethidine to manage the pain involved in her condition and had so become dependant on this medication.

In these circumstances, Ms Eaton asserted that she was unable to properly instruct counsel. Mr Berman, counsel for the husband, opposed the reallocation of the trial, particularly given the absence of any independent material to support Ms Eaton’s assertions regarding her health.
On 10 February 2011, I adjourned the proceedings to 14 February 2011 to allow Ms Eaton to provide a formal report, from her current medical practitioner, as to whether or not she was fit to attend the hearing.
No such extensive medical report was provided. What was provided, via facsimile, was a medical certificate that indicated the wife had a “medical condition” and would be unfit for work for 7 February until 18 February inclusively.
Ms Eaton, once again appearing before the court via the telephone, vigorously protested that she was unable to proceed with the matter. In those circumstances, I vacated the trial. However, in order to allow the court to oversee the matter further, it was listed for further mention on 25 March 2011.
I was concerned at the import of the matters raised by Ms Eaton, both in court and in her earlier affidavit. I was also concerned at her presentation in court, albeit that I was not able to see her, but was only able to converse with her via the telephone.
In particular, I was concerned that it might be the case that Ms Eaton would be unable to provide instructions to a legal practitioner for the indefinite future. I also had concerns that she herself might not be able to conduct the proceedings in person.
For that reason, the order of 14 February 2011 indicated that, if Ms Eaton remained unrepresented, consideration would be given to the appointment of a litigation guardian to oversee the litigation on her behalf.
On 25 March 2011, Ms Eaton again appeared in court by telephone. She informed that she was in the process of obtaining legal advice and representation for herself. As a consequence of this information, the solicitor for the husband pressed for the allocation of a further trial listing, given the delays in the matter to that stage. On this basis, the matter was re-listed for hearing on 22 & 23 August 2011 and listed for trial directions on 17 May 2011.
On the adjourned date, Ms M., a solicitor, appeared for the wife. In answer to queries from me, Ms M. indicated that she was of the view that she would be able to obtain clear instructions from Ms Eaton given the nature of the interchanges between the two during the course of their recently inaugurated professional relationship. On that basis, Ms M. indicated that it would be unnecessary for a litigation guardian to be appointed for Ms Eaton. Mr Esau agreed and I did not demur to their agreement.
On 17 August 2011, Ms M. filed an application to vacate the August trial date. The application was supported by an affidavit deposed by Ms M. herself. A legal secretary in Ms M.’s employ also deposed in an affidavit that she had obtained a discharge summary in respect of the wife from the (omitted) Centre dated 10 August 2011.[4] I will return to this document later in these reasons for judgement.
[4] See affidavit of Ms H filed 22 August 2011
In her affidavit, Ms M. deposed that she had not been able to confer with her client in order to prepare Ms Eaton’s trial affidavits. Ms M. deposed that Ms Eaton had cancelled a number of appointments to confer with her. Attached to Ms M.’s affidavit was a medical report from Dr H., dated 10 August 2011, which indicated that Ms Eaton was suffering from severe pain in her right leg due to an infection and was being treated with high doses of pain killers.
Given this state of affairs, it seemed inevitable that the final hearing should be vacated. An order to this effect was made on 22 August 2011. On this occasion, the proceedings were adjourned to 2 September 2011 to enable inquiries to be made as to the appointment of a litigation guardian for the trial.
On 2 September 2011, Ms M. indicated that she believed she would be able to complete her client’s documents for trial shortly. She indicated that her recent experience of Ms Eaton was that she had put her difficulties behind her and was on the mend both physically and psychologically. Again, Ms M. reiterated her view that it was not necessary for a litigation guardian to be appointed for Ms Eaton. I accepted these assurances.
However, given that Ms Eaton had still not filed her trial material, I was not prepared to allocate a further hearing date until she had done so. On this basis, the proceedings were adjourned to 21 October 2011 and Ms Eaton was ordered to file her trial material, together with an updated statement of her financial circumstances, no later than 30 September 2011, otherwise the matter would be dealt with as an undefended matter.
Ms Eaton filed an affidavit and a statement of her financial circumstances on 30 September 2011. Given her compliance with my earlier order, I fixed the matter for a further final hearing on 18 & 19 April 2012. I also ordered that the wife obtain appraisals of the Property T and Property C properties owned by her and if the parties were unable to agree on the value of those properties, in the light of such appraisals, they were directed to appoint a valuer jointly to value both properties, at their joint expense, no later than 29 February 2012.
On 1 March 2012, Mr Esau, Mr Masland’s solicitor filed an application seeking that the costs of the valuations of the two properties concerned be met from the proceeds of sale of the Property A property. On 13 March 2012, Ms M. withdrew from the proceedings. Ms Eaton did not instruct any further counsel.
Mr Esau subsequently discontinued his application and in lieu thereof, commenced proceedings on 29 March 2012 seeking orders which would facilitate the valuation of the properties concerned by means of a specified person being nominated to undertake them.
In an affidavit filed in support of the application, Mr Esau deposed that Ms Eaton had indicated to him, in no uncertain manner, that she would not permit any person to attend upon her premises for the purposes of obtaining any such valuation.
The application came before the court, at short notice, on 3 April 2012. Ms Eaton appeared by telephone. Over her objections, I directed that the two properties be valued, as sought by Mr Esau, no later than 6 April 2012.
On 4 April 2012, Ms Eaton filed her own application seeking that I recuse myself from any further dealing with the matter. She also complained that Mr Masland had not provided adequate discovery of financial documents, particularly in respect of the business previously conducted by the parties. In conjunction with this application, she sought the adjournment of the imminent trial.
Ms Eaton’s affidavit is a reasonably lengthy document. I did not find it particularly easy to follow. She complains about Mr Masland’s behaviour towards her during the parties' marriage. These complaints are similar to complaints she has made about Mr Masland’s conduct in her earlier affidavit material.
Also attached to the affidavit is a letter from a firm of solicitors in Adelaide, which is dated 19 January 2011. This letter indicates that the solicitors concerned act for the Commonwealth Bank and that Ms Eaton is indebted to the Bank in the sum of $171,484.92 in respect of a mortgage lodged over her Property C property.
Also annexed, is a further letter from the Commonwealth Bank, dated 19 March 2012, which indicates that the Bank obtained a judgement against Ms Eaton, in the Supreme Court of South Australia, on 14 December 2011, which had resulted in an order for possession, in favour of the bank, in respect of both the Property C and Property T properties.
On the basis of this information, it also seemed to be Ms Eaton’s position that the court should make an interim order requiring what remained of the proceeds of sale of the Property A property be transferred to her in order to satisfy a part of the Bank’s claim against her.
It has been Ms Eaton’s position that Mr Masland has behaved in a fraudulent manner towards her during their marriage. In particular, she asserts that he has dishonestly expropriated funds from their business venture and also dispossessed her of her interest in a property which she leased from the (omitted) at the time the parties began their relationship.
For reasons already provided, I declined to disqualify myself from the further hearing of the matter. I also declined to adjourn the proceedings further. It seemed to me to be in everyone’s interest, including Ms Eaton, that the matter be finalised as soon as was possible, particularly given the involvement of the Commonwealth Bank.
Notwithstanding Ms Eaton’s assertion that it was impossible for the Property C and Property T properties to be valued, valuations of each of these properties were obtained on 2 and 11 April 2012 respectively. In respect of the Property T property, it was necessary for the valuer concerned to obtain an order from the court to secure a forced entry to the property.
Mr Berman, counsel for the husband, complained that Ms Eaton had not disclosed any details of the extent of the mortgages secured against the Property C and Property T properties until her affidavit of 4 April 2012 and the material disclosed, at this stage, was far from complete.
For his part, Mr Masland denied that he had not provided full discovery to Ms Eaton. In particular, he said that he had provided her with a number of file boxes, containing the records of (omitted), in the period following their separation.
Following my decision not to either disqualify myself from the proceedings or adjourn them further, the matter proceeded to trial on 18 April 2012. Much of the first day was taken up with Ms Eaton’s cross-examination of Mr Masland.
It also seems to be the case that Ms Eaton provided some further documents to Mr Berman, which she had regarding her involvement with the Commonwealth Bank, during the court’s periods of adjournment.
I have already set out, in my earlier ex tempore judgment, dealing with my decision to complete the proceedings on an undefended basis, what happened on 18 & 19 April 2012. Having revisited the history of the proceedings, up to this stage, in some detail, I am fortified in my view that it is in the interests of justice, particularly in regards to what is fair to Mr Masland, that these proceedings be concluded.
Although Ms Eaton did not complete her cross-examination of Mr Masland, I did have the opportunity to observe Mr Masland at some length, whilst he was under oath. I found his evidence, in its affidavit form, to be logical and rational. His presentation in the witness box was of an honest person, who was wearied and perplexed by his former wife’s behaviour.
However my impression of him is that he is not a sophisticated person in terms of financial arrangements. As such, I do not accept that he is the Machiavellian financial schemer portrayed by Ms Eaton. To the contrary he is a simple and trusting person.
Ms Eaton is an unusual person. I have not seen her, on oath, being subject to the rigours of cross-examination. I have however had the opportunity to question her about contradictions arising from things she has said to me as to why the case should be adjourned. In these circumstances, I doubt that such a process would cause me to change my preliminary assessment of her credit.
I accept that Ms Eaton is beset by all manner of problems and difficulties. However, in my assessment, she is a highly manipulative and difficult person, who has limited insight into the consequences of her own behaviour and actions. Given this lack of insight, she is prone to find scapegoats for and attribute fault for problems of her own making.
Her case is a series of inchoate complaints about Mr Masland’s behaviour towards her during the course of their marriage. She accused him of violence; sexual abuse towards her daughter; waste of money through gambling; and fraud. None of these complaints is supported by any form of independent evidence.
It has been Ms Eaton’s consistent position that she is not ready to proceed with the application, but will be shortly. It is my finding that she has been obstructive and difficult in respect of the process of the valuation of her two real properties.
It is also my finding that she has not been candid in respect of her level of indebtedness to the Commonwealth Bank. In these circumstances, I have concerns that there may be other financial records, pertinent to her situation, which she has not revealed.
Ms Eaton has asserted that the issue of subpoenae will reveal documentary evidence that will prove Mr Masland has wasted matrimonial property. As far as the court file indicates, she has taken no steps to have such subpoenae issued. Ms Eaton has consistently missed court events. In all these circumstances, I doubt that she will ever be ready to proceed with her application.

The orders sought by the parties

During the course of his submissions Mr Berman, counsel for the husband, provided a minute of the orders which he sought on behalf of his client. This document was prepared in the light of the recent material obtained from the wife regarding her level of indebtedness to the Commonwealth Bank.
The orders which Mr Masland seeks are as follows:
“1.That in full and final settlement of all claims between the parties for settlement of property under Part VIII of the Family Law Act 1975 as amended:
1.1That the wife transfer her interest in the monies in the trust account of (omitted) of Property U to the husband and that (omitted) shall transfer the said monies to the trust account of Mark Esau solicitor.
1.2That the wife transfer her interest in monies held in the joint account of the parties with Bank SA (no (omitted)) to the husband and that Bank SA cause the said account to be closed and the said monies be paid to the trust account of Mark Esau solicitor.
1.3That as and from the date of this order, each party shall retain all assets which each now has when so ever or how so ever required; including but without limiting the effect hereto the husband shall retain for his sole use and benefit absolutely free from any further claim or demand of the wife:
1.3.1     furniture and effects in his possession, power and control.
1.3.2     any motor vehicle in his possession.
1.3.3     any savings and investments in his sole name.
1.3.4     any superannuation entitlement, long service leave, annual leave or other work related benefits.
1.3.5     his personal effects.
1.3.6     any other real and/or personal property and/or financial resources of the husband in the husband’s name and/or possession not otherwise specified herein.
1.4Including but without limiting the effect hereof, the wife shall retain for her sole use and benefit absolutely free from any further claim or demand of the husband:
1.4.1     the furniture and furnishings in her possession, power and control.
1.4.2     any motor vehicle in her possession.
1.4.3     savings, shares and investments in her name.
1.4.4     any superannuation entitlement, long service leave, annual leave or other work related benefits.
1.4.5     personal effects.
1.4.6     her interest in her Property C property.
1.4.7     any other real and/or personal property and/or financial resources of the wife or in the wife’s name and/or possession not otherwise specified herein.
1.5That hereafter each party is restrained and an injunction granted restraining each of them from pledging the credit of the other.
1.6That hereafter each party shall discharge without calling upon the other to contribute thereto their several debts contracted by or for them.
1.7That each party shall do all such things and acts and sign all such necessary documents to give effect to the terms of this order.
2.     Liberty to apply as to consequential orders.”
The wife’s position seems to be that she should receive the bulk of the parties’ assets and all of the proceeds of sale of the Property A, property. In addition, she seeks the payment of spousal maintenance in the sum of $150.00 per week, for an indefinite period into the future.

The legal principles applicable

Rule 13.1A of the Federal Magistrates Court Rules deals with the court’s authority to enter judgment against a respondent if that respondent defaults in complying with a court order or fails to prosecute any proceedings with due diligence. I am satisfied that Ms Eaton has failed to prosecute these proceedings with due diligence.
The husband is not entitled, as of right, to the orders which he seeks. Rather, the onus remains on him to establish to the court that the orders which he seeks are just and equitable according to law.
Essentially, Mr Masland must lead sufficient evidence to establish his case to the court and persuade it that the result he proposes is a just and equitable one. Otherwise, the court should impose the result in the case it considers fair according to law and the evidence available to it.
The court’s pre-eminent responsibility is to ensure a just result between the parties, notwithstanding the failure of Ms Eaton to properly participate in the proceedings. However, in the absence of satisfactory rebutting evidence, the husband’s affidavit material is to be accepted by the court, unless it appears inherently unreliable or otherwise unsatisfactory.
The formal affidavit material, on which Mr Masland relies is as follows:
a)His affidavit filed 19 January 2011; and
b)A statement of his financial circumstances filed 19 January 2011.
As previously indicated, these are orderly and well prepared documents. I have no reason to doubt their veracity.
The parties to property proceedings, brought under the Family Law Act 1975, in this court, are under a duty to make a “full and frank disclosure” of their financial circumstances.[5] This duty has been described as being “fundamental to the whole operation of the Family Law Act in financial cases…”.[6]
[5] See Federal Magistrates Court Rules at Rule 24.03
[6] Per Smither J in Briese & Briese (1986) FLC 91-713 cited with approval by the Full Court in Black & Kellner (1992) FLC 92-287 at 79,133
In Weir & Weir the Full Court of the Family Court said as follows:
“…the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contributions, or to properly assess section 75(2) factors.”[7]
[7] Weir & Weir (1993) FLC 92-338
Accordingly, the duty to make a full and frank disclosure, in financial matters brought under the Family Law Act 1975, does not arise merely by virtue of the rules or practice of the court but rather is a fundamental rule of law, which arises because of the necessity for the court, in each property proceeding arising before it, to consider all aspects of the financial circumstances of the parties concerned.[8]
[8] See Luciano & Luciano (unreported) Family Court (O’Ryan J delivered 8 May 2000) at paragraph 373
In appropriate cases, there may be adverse consequences for a party, if it can be shown that he or she has deliberately failed to make a proper disclosure of some material financial fact. Such a non-disclosure may result in the court drawing an adverse inference against the party, who has not made a proper disclosure.
In Weir & Weir[9] the Full Court said as follows:
“It seems to us that once it has been established that there has been a deliberate non-disclosure…then the court should not be unduly cautious about making findings in the favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…We should have thought that the courts jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.”
[9] See Weir & Weir (supra) at 79,593

In the present case, I am satisfied that the wife has failed to make a full disclosure of her financial situation, particularly so far as the mortgages secured against the Property C and Property T properties. In addition, I am satisfied that the wife has both, actively and passively, made it as difficult as possible for the court to deal with Mr Masland’s application.
In these circumstances, I am not inclined to be “unduly cautious” about finalising the proceedings, in the absence of material from the wife, given my view that it would be unfair to the husband to allow the wife to dictate to both him and the court how the proceedings are to be managed because of her unacceptable behaviour to date.
The process to be followed for the division of the parties’ property is well established by law.[10] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[10] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[11] This is because there is only one exercise by the court of the power conferred on it by section 79 to make a matrimonial property order.
[11] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
The second step involves the court ascertaining the contributions which party each has made towards the assets identified following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[12]
[12] See Family Law Act s79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the court is entitled 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”.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[13]
[13] See Russell v Russell (1999) FamCA 187
Pursuant to section 74 of the Family Law Act 1975, the court may make such order as it considers “proper” for the provision of maintenance to the wife in accordance with the provisions of Part VIII of the Act.
In particular, section 72 deals with the right of a spouse to maintenance and reads as follows:
“S.72(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).”
Pursuant to s.75(3) of the Act, the court is directed to disregard any entitlement of a party to the proceedings to an income tested pension, allowance or benefit. Accordingly, the fact that the wife is receiving a Centrelink benefit is not a relevant consideration in this matter so far as the assessment of any potential award of spousal maintenance for Ms Eaton.
The Full Court of the Family Court in Bevan & Bevan[14] determined that the approach to be taken in respect of applications for spousal maintenance involved a four step process as follows:
·a threshold finding under s.72;
·consideration of s.74 and s.75(2);
·no fettering principle that a pre-separation standard of living must automatically be awarded where the respondent’s means permit;
·the discretion exercised in accordance with the provisions of s.74 with “reasonableness in the circumstances” as the guiding principle.
[14] Bevan & Bevan (1995) FLC 92-600 at 81,981-2

Background

The husband was born on (omitted). He left school at 16, when he commenced an (omitted) apprenticeship. He became a fully qualified (omitted) in (omitted).
The bulk of his working life was spent working at (omitted). He is also a qualified (omitted), which enables him to work with (omitted).
The wife was born on (omitted). She has qualifications as a (omitted). She injured her back, whilst working at the (omitted), in the mid-1990s. She received a WorkCover payout.
Both parties have been previously married. The wife has two living children, X aged 32 and Y aged 30. Both children have special needs. The husband was married between 1986 and August 1998. Whilst he was married to his first wife, he purchased the property at Property A, in 1986. He brought this property into the marriage.
The parties met one another in either 1999 or 2000. At the time, the wife was an undischarged bankrupt. The husband was working as a (omitted) with a company called (omitted).
The husband was living in the Property A property, which was subject to a mortgage to the (omitted) Bank in the sum of around $40,000.00. Mr Masland believes the property was worth $250,000.00 at the time.
Mr Masland had left his employment with (omitted) in 1995. He received a termination payment of $63,000.00, which he used to reduce the mortgage on the Property A property. He had purchased his first wife’s interest in the property, on their separation, in 1998.
At the time the parties began their relationship, the wife was living in a property at (omitted)., which she rented from the (omitted). She asserts that she had significantly improved the value of this property by renovating and improving it, during the course of her tenancy. The husband disputes this assertion.
At the time, the (omitted) offered its tenants, subject to some conditions, the opportunity to purchase properties occupied by them. It is common ground between the parties that Ms Eaton brought into the marriage an option to purchase the (omitted) property through this scheme.
The parties married on (omitted). Ms Eaton had moved into the Property A property in September of 2000. There can be no doubt that this property was the most significant item of property, which the parties had at the commencement of their relationship.
It seems clear that the wife did not herself have extensive superannuation resources. The husband had a fund with (omitted), which held $93,444.28, as at 31 December 1999.[15]
[15] See exhibit D
The wife asserts that she owned several antique items of property, which she had inherited from members of her family. She has not provided any formal proof of the value of these various items and their whereabouts is uncertain. It being the wife’s position that the husband has wilfully destroyed them, an allegation which he denies.
Notwithstanding this divergence in the evidence, it is incontrovertible that, at the commencement of the parties’ relationship, the husband brought in significantly more capital than the wife, who was bankrupt as a result of financial travails arising from her previous marriage.
The husband has equity in the Property A property of around $200,000.00 and superannuation approaching $100,000.00 in value. At best, the wife had a final option to purchase her home in (omitted) This option could not be transferred for valuable consideration.
In 2002, the parties began the business (omitted). This business was conducted as a partnership. It was engaged in cleaning and repairing telephones, primarily at commercial premises. The husband attended to the technical side of the business, whilst the wife did the actual cleaning of the telephones concerned and some administrative tasks.
The wife asserts she owned 80% of the partnership. No documentary evidence has been provided to support this contention. In addition, and more importantly, no evidence has been provided by either party as to any formal capitalisation of the business. In any event, the wife had no capital to provide.
The husband has not completed a tax return since 2006. It is his position that he finds it difficult to manage his taxation affairs and relies on others to do it for him. It also seems clear that (omitted) was reasonably successful but that, during its operation, no provision was made to earmark monies for its taxation liabilities.
This failure to put aside moneys for tax and deal with the Australian Taxation Office promptly and professionally created a debt for the business, which continually compounded and provided a burden from which the business could never escape and which ultimately led to (omitted) financial demise. It is not an uncommon scenario, so far as small scale family businesses are concerned.
Apart from Ms Eaton’s assertion of financial impropriety, she has not provided any compelling evidence to support her assertion that Mr Masland has ever secreted funds from the business for his own benefit. Certainly she has provided no expert accounting evidence to support this assertion.
One issue which Ms Eaton did canvas with Mr Masland, during her attendance at court on the first day of the hearing, was her assertion that he had concealed documents concerning (omitted) from her. I accept Mr Masland’s evidence that he did provide to Ms Eaton the business’ records shortly after the parties separated.
In support of her application for an adjournment of the proceedings, Ms Eaton asserted that her home had been burgled the previous weekend and some of these documents had been stolen by the intruder concerned.
The clear implication of the wife’s evidence was that the only person who could have performed the illegal entry and theft was the husband. This seems extraordinary. Ms Eaton did not provide any evidence to support this claim, such as a police incident report. As previously indicated, I reject any suggestion that Mr Masland is a sinister or dishonest person. He is an (omitted) with a not particularly good head for figures or accounting.
The evidence indicates that the Australian Taxation Office took proceedings against both parties in late 2008 and obtained a judgement on 22 April 2009 for $115,465.01. Both parties must share responsibility for this omission, which led to the failure of the business. I reject the wife’s contention that the business failed because Mr Masland siphoned money from it.
During the first day of the hearing, Ms Eaton cross-examined Mr Masland about the withdrawal of $15,000.00 from (omitted)’s account into an account, which he controlled, designated as the “Parking Account”. Mr Masland acknowledged the withdrawal. His evidence was that the transaction was made to ensure that the business’ other trade creditors would be paid what was due them.
I accept this evidence. I further accept that Mr Masland feared that if he did not attempt to quarantine funds from Ms Eaton, she would waste them. There is no evidence to indicate that Mr Masland has lived a lifestyle, in the period since the parties separated, which is not commensurate with his modest income and straitened financial circumstances.
Ultimately the taxation debt was settled by the sale of the Property A property, which was sold for $320,000.00 on 23 April 2010. At settlement the following sums were disbursed:
·$118,460.90 to discharge the mortgage secured on the property;
·$136,551.33 to the Deputy Commissioner of Taxation;
·The balance of $50,392.85 was retained and held in trust pending the outcome of the current proceedings.
Much controversy arises in respect of the property at (omitted).. Undoubtedly, due to her occupation of the property, the wife had an entitlement to purchase the property from the Housing Trust. The property was indeed purchased by Ms Eaton on 28 July 2000 for the sum of $72,157.00. However, on the same day, I accept Mr Masland bought the property from her for the same sum.
At the time, Ms Eaton was an undischarged bankrupt. She had no access to funds in her own name and no ability to borrow moneys. In these circumstances, the husband financed the purchase of the property by extending his mortgage on the Property A property.
In my view, there was nothing sinister in this transaction, which occurred with the wife’s full knowledge and consent. No doubt, the property represented an opportunity, which the wife in her straitened financial circumstances, was precluded from taking up alone.
The property sold around two years later for $140,000.00. The proceeds of sale were referred in total to the mortgage on the Property A property. I do not accept that this increase in value, in the property, is attributable to any specific action of the wife. The property was tenanted following its purchase by the husband.
The wife asserts that the husband wasted matrimonial assets during the parties' marriage, through his gambling addiction. In her affidavit material, she has asserted that she would provide documentary evidence to support her allegation, in due course, through subpoenae directed to the TAB. No such evidence has been forthcoming. In these circumstances, I reject the wife’s assertion.
It is also the wife’s assertion that Mr Masland assaulted her frequently during the parties’ relationship. She also asserts that Mr Masland sexually abused her disabled daughter X. Mr Masland denies both these allegations, which are unsupported by any independent or documentary evidence. In these circumstances, I am unable to make any findings in regards to these issues. I am also troubled as to their overall relevance.
The parties separated on (omitted) 2008. They divorced on (omitted) 2010, on the husband’s application. There are no children of the marriage between the parties. I do not consider that the parties’ circumstances, during their marriage, indicate any unusual or exceptional non-financial contributions on either of their parts.
The wife’s mother died in May of 2008, around two months after the parties had finally separated. The wife’s mother left the wife her unencumbered property in Property T. Ms Eaton used this property as collateral to purchase the Property C property. It seems that the necessary moneys for this purchase were advanced by the Commonwealth Bank.
Ms Eaton has not worked since the parties separated. She has lived at the Property C property, with her daughter, since its purchase. Ms Eaton receives a carer’s pension and her daughter receives a disability pension. It would appear that, at least up until September 2011, the Property T property was rented yielding an income of $240.00 per week.

Step One – the pool of assets

After some significant difficulty, occasioned by the conduct of Ms Eaton, the properties at Property C and Property T respectively have been valued. In addition, there can be no controversy about what remains from the sale of the Property A property.
The husband has provided documentary evidence of his current superannuation holdings. The parties also have the remnants of the joint bank account, which relates to the operation of (omitted).
These are the only items of any significant value to be divided between the parties. The husband also has a number of modest debts, which I accept are relevant to the calculation of the parties’ net pool of assets.
It has been far more problematic to ascertain what is the wife’s level of indebtedness, given her lack of prompt and complete disclosure. There is also an oblique reference, in correspondence addressed to her by the Commonwealth Bank, regarding funds held on Ms Eaton’s behalf by the Public Trustee.[16] Ms Eaton has not provided any details about this reference nor been cross-examined about it.
[16] See exhibit C
However, this correspondence from the Commonwealth Bank, dated 14 February 2012 indicates, as at that date, Ms Eaton was indebted to the bank in a sum of $514,426.90. This is nearly equivalent to the sum attributable to the properties obtained through the recently obtained valuations.
Accordingly, I find that the assets available to be divided between the parties are as follows:

Bank SA (joint account) $13,600.00

Proceeds of sale of Property A, $51,392.00

Husband’s motor vehicle $2,000.00

Husband’s superannuation[17] $129,781.12

Husband’s tools $1,000.00

Husband’s furniture and affects $3,000.00

6 Property C[18] $274,500.00

8 Property T[19] $242,500.00

Total Assets $717,773.12

Liabilities

(omitted) (husband) $7,000.00

(omitted) (husband) $2,500.00

Mortgage on Property C property $329,582.03

Line of credit on Property T property $184,844.87

Total liabilities $523,926.90

Net Assets $193,846.22
[17] See exhibit D
[18] See exhibit B
[19] See exhibit A

Step Two – assessment of contributions – section 79(4)(a) – (c)

I now turn to the second of the steps in the exercise under section 79, namely an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). These provisions are as follows:
“Section 79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of home maker or parent.”
Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation and improvement of any particular asset and maybe taken into account generally as contributions in a total sense.
The marriage between the parties was approximately eight years in duration. It produced no children, but the wife asserts that she provided homemaking duties for her own children, who have significant special needs. She concedes that her health deteriorated during the parties’ relationship, particularly in its later stages.

Apart from the wife’s assertion that the husband caused her health to deteriorate by compelling her to eat a substandard diet, there is no evidence to support this contention. In such circumstances I decline to make any finding that the husband in someway made some form of negative contribution, which led to the wife’s illness. In any event, it would seem to me that the wife must take some personal responsibility for these matters.
The husband seems to have been closely involved in the (omitted) business. He provided quotes and wrote invoices for the business done and seems to have done most of its work. At least in the initial stages, the wife kept the business’ accounts, although later a friend of the husband’s was engaged to do this. This seems to have been the subject of significant disputation between the parties.
For reasons already provided, I am not in a position to attribute fault as to why the business failed. It seems to me however that the husband discharged his responsibilities, in the business, to the best of his abilities. The wife also contributed from time to time but was unable to prevent the business’ demise. Otherwise, there seems to be nothing extraordinary in any of the other contributions made by the parties during their unhappy marriage.
In these circumstances, in my view, the respective initial contributions of the parties, at the outset of their marriage, become crucial. In this regard, I accept that the husband brought into the marriage, in the form of his real property and superannuation, well in advance of $300,000.00, being represented primarily by his equity in Property A, in an amount of $210,000.00 and his accrued superannuation being valued at around $93,000.00.
The available pool to be divided is now around two thirds of this figure. The husband’s superannuation representing around 66% of this sum. I accept the husband’s evidence that he made no direct contributions to this fund during the parties’ marriage. The increase in this fund being due to interest accruing on it.
The only asset, in the loose sense of the expression, which has increased in value during the marriage, is the husband’s superannuation. Given the circumstances of this case, it is difficult to see that the wife has made any contribution to its modest increase.
The Property A property was the only available source of funds to satisfy the parties’ jointly incurred debt to the Australian Taxation Office. I am not persuaded that the debt can either be legally or morally attributed to the husband, as his debt alone to discharge. It must be regarded as the parties’ joint liability.
On the other hand, the wife brought property into the marriage, which has not been properly valued and which, in any event, seems to have had modest value. I am fortified in this view by the fact that she was an undischarged bankrupt, who lived in rented accommodation, when the parties met.
In all these circumstances, it seems clear that assets brought into the marriage, in the form of the Property A property, by the husband, have been utilised to satisfy the parties’ joint liability arising from the failure of (omitted).
In Pierce & Pierce[20] the Full Court of the Family Court discussed how court’s are to deal with matters involving disparate initial contributions of capital and how such contributions are to be assessed against other contributions, which arise during the course of the marriage between the parties concerned.
[20] See Pierce & Pierce (1999) FLC 92-844 at 85,811
In this context, as has previously been pointed out, the section 79(4) exercise invariably involves the assessment of contributions which are essentially different in quality. This is particularly so when financial and non-financial contributions have to be weighed against each other.
The Full Court said as follows:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight should be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions both of the husband and the wife. In considering the weight to be attached to the initial contribution, in this case the husband, regard must be had to the use made by the parties of that contribution.”
“…there is no principle that the length of the marriage leads to a likelihood that other contributions will outweigh or weigh equally with ‘a particular contribution’. It is a matter of assessing the contributions of all relevant kinds in each case to arrive at an outcome, which is both appropriate and just and equitable. In some cases particular contributions may be outweighed or equalled by other ones. In other cases particular contributions may be so disproportionate to other contributions as to merit special recognition.”
In this case, I am satisfied that Mr Masland’s initial contribution is one of such magnitude, in the overall context of this case, that it indeed does warrant special recognition. From his point of view, the marriage has been a financial disaster, notwithstanding his efforts in (omitted). In this case, I am of the view that any just and equitable assessment of the parties’ various contributions, at the end of the second stage, overwhelmingly favours the husband.
I acknowledge that the wife left the marriage with very little. This was also the situation which confronted the husband, who was forced to move into rented accommodation. The wife was buttressed to some degree by her inheritance.
This inheritance provided her with a modest income stream and the ability to purchase accommodation for herself. Whether it was financially prudent for Ms Eaton to purchase the Property C property is not an issue which I need to determine.
However, I think I can conclude, in an overall sense, that she has behaved imprudently in respect of her inheritance and has essentially dissipated it. This state of affairs is not attributable to any fault or omission on the husband’s part.
Accordingly, the wife’s contributions, in the post separation period, have resulted in the worsening of her personal financial situation. In 2008, she had a modest margin of financial leeway, which she alone seems to have eroded. In my view, it would be unjust to apportion this loss, in some way, between the parties.

Step Three – section 75(2) factors – the prospective needs of the parties

I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of either party.
Given the nature of the hearing before me, it is difficult to assess the various section 75(2) factors applicable. These factors are as follows:
(a)   the age and state of health of each of the parties;
(b)   the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)    whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)   commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(e)    the responsibilities of either party to support any other person;
(f)    subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under -
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)   any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
(g)   where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)   the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)    the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any other fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
The husband is forty-nine years of age. No evidence has been provided to indicate anything other than that he currently enjoys good health and is likely to continue to do so for the foreseeable future. Mr Masland has qualifications as an (omitted). He has part-time employment in these fields.
The evidence is that Mr Masland has not filed a tax return since 2006. At first blush, this seems to be an irregular and suspicious course of conduct on his part. However, it would also appear to be the case that, notwithstanding this omission on his part, the Australian Taxation Office has been able to pursue him (and indeed Ms Eaton) for tax owed by him.
More suspicious, to my mind, is the fact that Mr Masland is apparently not exercising his technical skills in order to maximise his income earning capacity. Group certificates provided for him, for the financial years ending 30 June 2010 and 2011, indicate an income in the vicinity of around $29,000 per annum. On any view, this is a modest sum.
During her cross-examination of him, Ms Eaton asserted that a qualified (omitted), with Mr Masland’s experience, was likely to be able to secure a far greater level of remuneration than this. This does not seem to be a far fetched proposition but, in a formal sense, no evidence has been provided to me regarding the employment prospects of (omitted) in the Adelaide area, nor what salaries they can command.
However, due to Ms Eaton’s conduct in the proceedings, it has not been possible for these issues to be examined in more depth. I do however accept that Mr Masland is currently a modest income earner. There is no evidence available to me to establish that his income is not as he says it is. As such, I accept that he lives in frugal circumstances, renting modest accommodation for himself, which he shares with his adult daughter, with his regular expenses equating to his recurrent income.
It is clearly Ms Eaton’s position that she suffers from a number of debilitating injuries. Certainly, her presentation in court indicates that she will never enter the paid workforce again. Although I accept that Ms Eaton does not enjoy good health, she herself has not provided extensive evidence regarding her medical condition.
The longest report is that of Dr H., dated 10 August 2011, to which reference has already been made. This report indicates that Ms Eaton suffers from the following medical conditions:
·Diabetes
·Diabetic ulcers – right foot
·Left lower limb trans-tibial amputation
·Chronic pain in right hip, lower hip and right shoulder
Dr H. indicated that it was difficult to provide a prognosis of Ms Eaton due to her diabetes. Concern was expressed in respect of the risk posed to her right foot by its ulceration.
The discharge summary, from the (omitted) Centre, dated 10 August 2011, confirms these conditions and lists other diagnostic complications, which include behavioural issues and medication compliance. In this context, concerns have been raised regarding her behaviour to medical staff at the (omitted) Centre. This documentary evidence, albeit brief in nature, confirms my view that Ms Eaton faces an uncertain financial future.
Both parties are at an age when they must start to consider their financial security in retirement. In this area, both parties face an uncertain future, but particularly Ms Eaton. Mr Masland has a reasonable level of superannuation. Ms Eaton apparently has almost no superannuation.
In these circumstances, it would seem inevitable that Ms Eaton’s sole source of income in future will be social security. Mr Masland has a significant level of skills and a proven ability to earn an income, albeit one which is currently modest.
However his skills and his on-going employment are matters of some significance in these proceedings. The most valuable “asset”, which a party can take out of a marriage, is a substantial and reliable income earning capacity.[21] Mr Masland’s current level of income is not substantial but it does seem to be reliable.
[21] See Clauson & Clauson (1995) FLC 92-598 at 81, 911
In the period after the parties separated, the wife was more financially secure than she is now. She had inherited a property, albeit one of modest value, which was apparently located in a place where she did not wish to live.
However, the property was capable of being rented and so could provide her with a regular stream of income to subsidise her accommodation in the preferred place of residence. This property also provided the collateral, which ultimately enabled her to purchase a home for herself, albeit one which was subject to a significant mortgage.
Given the manner in which Ms Eaton has chosen to conduct these proceedings, it is unclear to me why her financial situation has deteriorated too such a marked degree since her inheritance of the Property T property and the subsequent purchase of her home in Property C.
I accept that she has had to renovate her home to make it suitable for wheelchair access. I also accept that her income from the Property T property has been modest but it seems an extraordinary exercise of imprudence, on her part, to allow her apparent level of indebtedness to reach the anticipated value of the properties themselves.
This situation seems to render inevitable the Commonwealth Bank’s seizure of the two properties and their resultant sale. Given the level of indebtedness and the value of the properties themselves, it seems unlikely that there will be anything remaining for Ms Eaton, other than the possibility of some vestigial level of indebtedness. Again, the period from 2008 onwards seems to mark a period of financial disaster for Ms Eaton.
It is Ms Eaton’s position that she should receive all of the liquid assets currently available to be distributed between the parties. It is her position that the provision of this sum will potentially save the Property C and Property T properties from the attentions of the Commonwealth Bank and provide her with some level of security in future.
I am fearful that such an outcome will not have any practical consequences for the wife but will merely be a case of throwing good money after bad and would be a grossly inequitable outcome, so far as Mr Masland is concerned, notwithstanding Ms Eaton’s current parlous financial position.
In short, both parties are likely to face an uncertain future, marked by a high degree of financial insecurity. However, on balance, Mr Masland has a far greater capacity than Ms Eaton to re-group following the financial disaster of the marriage and make provision for himself both before and after retirement.
On any view, even in the abstract, the section 75(2) factors greatly favour Ms Eaton. However, the pool of assets is small – the liquid assets being only somewhere in the vicinity of $65,000.00 – as such the assets available are woefully insufficient to meet the future needs of both parties, particularly the wife.
In addition, I have considerable misgivings that the overall effect of any transference of assets – either liquid or contingent – to Ms Eaton will make little, if any, difference to her financial circumstances both now and in the foreseeable future.
Although I have not heard any detailed evidence from her, it seems difficult to envisage the preservation of either the Property C or Property T properties. As such, it seems probable that, in future, Ms Eaton will return to living in subsidised state owned housing and her only source of income will be social security payments.
Given the manner in which this case has followed, I am not in a position to resolve the unclear and tangential reference to moneys said to be available to Ms Eaton in a public trustee account. As such, I must determine the financial issues arising in this case on the basis of the evidence available to me.
As a consequence, I find that the wife commenced the marriage with very few items of property and leaves it in the same position. It also seems to be the case that she had limited employment opportunities in 2002 and has none whatsoever in 2012.

Spousal maintenance application

In all the circumstances of this case, I do not consider it proper to make any award of spousal maintenance in Ms Eaton’s favour. I accept that she is currently suffering a significant degree of physical and mental incapacity, which prevents her from obtaining gainful employment.
However, the guiding principle to be applied to the making of any spousal maintenance order is what is reasonable in all the circumstances. Although Ms Eaton’s financial needs are great, I find that Mr Masland has no current capacity to supply those needs.
I accept that currently he has a limited income somewhere in the vicinity of $500.00 per week, which is necessary to meet his necessary living expenses. In addition, it seems probable that a significant component of Ms Eaton’s current financial predicament is attributable to her own conduct. For these reasons, the wife’s application for spousal maintenance is declined.

Conclusions

The manner in which this matter has proceeded has been both unsatisfactory and unfortunate. The case has been on foot for over two years. The delay is in no way attributable to any conduct originating with Mr Masland. The interests of justice demand that the case be finalised.
If I had not acceded to Mr Masland’s application to deal with the case on an undefended basis, I have grave reservations that the matter would ever have been concluded. Up to this point, it has been fixed for final hearing three times. There have been three financial mediation conferences. Certainly, the case should not be determined at the time of Ms Eaton’s dictation.
Mr Masland has been represented throughout. He has been ready to proceed at each time the matter has been listed for hearing. He is entitled to an end to the stress inherent in the proceedings. In addition, the interests of justice demand that the gradual erosion of the already modest pool of assets, which must occur because of the prolongation of the case, be halted.
I am satisfied that Ms Eaton has consistently obstructed and delayed these proceedings, most recently by her actions in court during the hearing itself and by her failure to cooperate with the valuation process of the Property C and Property T properties.
In addition, she has consistently failed to attend court events. I am also satisfied that she has failed to be properly candid about her financial circumstances during these proceedings.

As a result of this conduct, I am satisfied that Ms Eaton’s actions have added significantly to the costs of these proceedings, so far as Mr Masland is concerned. Again, considerations of justice and equity dictate that the case should be concluded, notwithstanding Ms Eaton’s likely perception of unfairness to her.
Notwithstanding the state of affairs arising from Ms Eaton’s lack of participation in the final hearing, Mr Masland is not entitled to the orders sought by him as a matter of course. The court’s responsibility remains to fashion an outcome, which is a just and equitable one.
Unfortunately, the pool of assets available to be divided between the parties is small and, as such, incapable of satisfying both Mr Masland’s and Ms Eaton’s immediate and future financial needs. In addition, it is my view that Ms Eaton’s behaviour has intensified rather than diminished the parties’ parlous financial circumstances, following their separation.
In determining what is the proper outcome, in the difficult circumstances arising from Ms Eaton’s lack of involvement in them, the relevant considerations seem to be as follows:
·Ms Eaton brought no property of any significant worth into the relationship;
·Her contributions during the marriage appear to have been unexceptional;
·Given his superior initial financial contribution, Mr Masland has borne the greater level of burden arising from the financial disaster of (omitted);
·Ms Eaton’s behaviour in the period post-separation appears to be marked by financial irresponsibility, leading to the diminution rather than the preservation of assets;
·Ms Eaton has not been cooperative with the court’s processes and therefore the court itself should not be unduly cautious about reaching an outcome which ostensibly favours Mr Masland.
Accordingly, at the end of the second stage, which is the assessment of overall contribution in the case, I have come to the conclusion that it would be just and equitable for Mr Masland to retain the entire proceeds arising from the sale of the Property A property. The sum arising from the sale is markedly less than the property’s value at the commencement of the parties’ relationship.
At the end of the day, Mr Masland brought in the Property A property. Its capital was used to discharge the parties’ joint taxation debt. Considerations of justice and equity dictate that he should retain what capital remains from it. If Ms Eaton had been more prudent with her inheritance, it is likely she would be more financially secure than she currently appears to be.
I have also come to the view that it would be appropriate for the moneys remaining from (omitted) to be divided equally between the parties. Such an apportionment, in my view, is an appropriate recognition of Ms Eaton’s modest contributions, during the course of the parties' marriage, which was not a relationship marked by any accumulation of capital whatsoever.
As I have already observed, I have concerns that an outcome which provides for Ms Eaton to receive any liquid sum will have no practical implications for her financial security, given what has occurred in respect of the Property C and Property T properties. However, at the end of the day, this remains a matter for her and her creditors.
There is no doubt that Ms Eaton faces an uncertain financial future. She is in poor health and has no marketable skills. On the other hand, Mr Masland has a trade and a secure, if modest, level of income.
For obvious reasons, the section 75(2) factors favour the wife. However, for many reasons, this is an unusual case. In my view, it would be neither just nor equitable, in all the circumstances pertaining, that considerations relating to Ms Eaton’s prospective needs be allowed to negate Mr Masland’s overwhelming superior financial contributions during the marriage, particularly in the context of a small and diminishing property pool.
In these circumstances, bearing in mind that Mr Masland accumulated the majority of his superannuation prior to the parties' marriage, it seems to me to be just and equitable if a split from this superannuation is made in Ms Eaton’s favour to reflect her prospective financial needs, particularly her lack of financial security in her later years.
To secure this end, in all the circumstances of this case, I propose a split in the sum of $15,000.00 being made in Ms Eaton’s favour, which represents approximately half of the increase in Mr Masland’s superannuation, during the parties' marriage.
If it is accepted that the equity available to the wife in the two properties owned by her is nil, the result envisaged by me, will see her taking superannuation and assets to the value of $22,000.00, from a pool of around $190,000.00. This equates to a distribution in her favour of around 11.5%.
In all the circumstances of this unfortunate matter, I consider that this represents a just and equitable outcome. It will see Ms Eaton receiving a small sum of cash to deal with her current financial predicament and will give her some superannuation to assist with her retirement.
However, the sad fact remains that Ms Eaton essentially leaves the marriage in the same position in which she began it with no assets of significant value.
On the other hand, although Mr Masland leaves the marriage with far more assets than his former wife, the fact remains that his level of financial security has markedly eroded during the course of the parties’ relationship. As such, from both parties’ perspectives, their relationship has been a financial disaster.
For reasons already provided, it is not proper to make any award of spousal maintenance in the case.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding two hundred and twenty-five (225) paragraphs are a true copy of the reasons for judgment of Brown FM

Date: 7 May 2012

and Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143

Bank SA (joint account)	$13,600.00
Proceeds of sale of Property A,	$51,392.00
Husband’s motor vehicle	$2,000.00
Husband’s superannuation[17]	$129,781.12
Husband’s tools	$1,000.00
Husband’s furniture and affects	$3,000.00
6 Property C[18]	$274,500.00
8 Property T[19]	$242,500.00
Total Assets	$717,773.12
Liabilities
(omitted) (husband)	$7,000.00
(omitted) (husband)	$2,500.00
Mortgage on Property C property	$329,582.03
Line of credit on Property T property	$184,844.87
Total liabilities	$523,926.90
Net Assets	$193,846.22