Massey & Duval
[2023] FedCFamC2F 115
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Massey & Duval [2023] FedCFamC2F 115
File number: PAC 2369 of 2019 Judgment of: JUDGE TURNBULL Date of judgment: 9 February 2023 Catchwords: FAMILY LAW – PROPERTY- settlement in relation to a marriage – main asset the former matrimonial home - whether it is just and equitable to make a property order – whether contributions made more onerous by family violence – Waste of combined asset pool—Two pool approach to assessing marital assets. Legislation: Family Law Act 1975 (Cth), Part VIII, ss. 75(2), 79(1), 79(4), 79(8), 90SF, 90SM Cases cited: Beck & Beck (1983) FLC 91-318
Benson & Drury [2020] FamCAFC 303
Clauson & Clauson (1995) FLC 92-595
Dickons & Dickons [2012] FamCAFC
Grier & Malphas [2016] FamCAFC 84
Hickey & Hickey [2003] FamCA 395
Jabour& Jabour [2019] FamCAFC 78
Keating & Keating [2019] FamCAFC 46
Kennon & Kennon (1997) FLC 92-757
Koch & Kest [2021] FamCA 408
Kowaliw & Kowaliw (1981) FLC 91-092
Loncar & Loncar [2021] FedCFamC1A 14
Lotta & Lotta [2017] FamCA 50
Mabb & Mabb [2020] FamCAFC 18
Mallet & Mallet (1984) 156 CLR 605
Marando & Marando (1997) FLC 92-754
Mayne & Mayne [2011] FamCAFC 192
NHC & RHC [2004] FamCA 633
Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195
Stanford & Stanford (2012) 247 CLR 108
Teal & Teal [2010] FamCAFC 120
Vass & Vass [2015] FamCAFC 51
Wallis & Manning [2017] FamCAFC 14
Warwick & Cutler [2016] FamCA 934
Division: Division 2 Family Law Number of paragraphs: 154 Date of last submission/s: 27 September 2022 Date of hearing: 3-5 August and 27 September 2022 Place: Parramatta Counsel for the Applicant: Mr Smart Solicitor for the Applicant: Camden Solicitors and Conveyancers Counsel for the Respondent: Mr Ladopoulos Solicitor for the Respondent: Bell Lawyers ORDERS
PAC 2369 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MASSEY
Applicant
AND: MS DUVAL
Respondent
order made by:
JUDGE TURNBULL
DATE OF ORDER:
10 February 2023
THE COURT ORDERS THAT:
1.That within forty-two (42) days of the making of these orders the Wife is to:
(a)Take all steps and do all acts and things and make all payments of principal and interest and costs necessary to obtain the discharge of the mortgage registered number … (“the mortgage”) held by Bank B over the former matrimonial home situated at and known as C Street, Suburb D in the State of New South Wales and being the whole of the land contained in Certificate of Title Folio Identifier … (“the former matrimonial home”) as security for monies advanced under Bank E account number …32; and to remove any caveat registered against the former matrimonial home; and
(b)Pay to the Husband the sum of $177,886.77 by way of adjustment of property settlement.
2.That immediately upon the above order having been complied with, the Husband is to:
(a)Execute all documents necessary to allow the mortgage to be discharged; and
(b)Execute all documents and do all things necessary to transfer the whole of his right, title and interest in the former matrimonial home to the Wife.
3.That in the event that the Wife does not comply with Order 1 above, the Husband and the Wife are to:
(a)Forthwith take all necessary steps and execute all necessary documents to cause the former matrimonial home to be sold by public auction and in particular:
(i)Appoint a firm of solicitors as agreed between the Husband and the Wife to prepare the Contract for Sale of Land in respect of the former matrimonial home, or failing agreement, with a solicitor as appointed to act for the Husband and the Wife in the conveyance of the former matrimonial home by the then President of the Law Society of New South Wales;
(ii)Place the former matrimonial home with a licensed real estate agent as agreed between the Husband and the Wife, or failing agreement, with a licenced real estate agent as appointed by the then President of the Real Estate Institute of New South Wales (“the Agent/Auctioneer”) for the sale of the former matrimonial home by public auction at the earliest possible date;
(iii)Execute all documents requested by the Agent/Auctioneer for the sale of the property at a reserve price to be agreed between the Husband and the Wife, or failing agreement, at a price equivalent to the mean of two valuations by registered valuers, being members of the Australian Institute of Valuers, one obtained by and at the expense of the Husband and one being obtained by and at the expense of the Wife, such valuations to be made not more than two weeks apart from each other;
(iv)Pay to the Agent/Auctioneer any sums requested for commission and advertising expenses in relation to the auction;
(v)Co-operate in every way with the Agent / Auctioneer in relation to the auction of the property; and
(vi)Attend at the auction sale and negotiate with the highest bidder in the event that the reserve price is not reached and accept the advice of the Agent / Auctioneer as to the acceptance of a price less than the reserve price.
(b)Do all acts and things necessary to ensure that, upon the sale of the former matrimonial home, the proceeds of sale be paid in the following manner and priority:
(i)In payment of the amount required to discharge the mortgage;
(ii)In payment of any outstanding council and / or utility rates;
(iii)In payment of the Agent / Auctioneer’s commission and auction expenses (if any) due on the sale;
(iv)In payment of legal costs on sale;
(v)In payment of all monies (including necessary fees) to remove the caveat registered against the title to the former matrimonial home; and
(vi)In payment of the balance be held in trust to be distributed to the parties in accordance with the method set out in paragraph 4 of this order.
4.That in the event that the former matrimonial home is sold and there is a balance to be distributed pursuant to paragraph 3(vi) of this order, then there be a division of all property of the parties (excluding superannuation) in the proportion 59% to the Wife and 41% to the Husband, calculated as follows:-
(a)WHERE:
A.= the net assets retained by the Husband ($7,555);
B.= the net assets retained by the Wife ($6, 895);
C.= the net proceeds of the sale of the former matrimonial home per sub-paragraph 3(b)(vi);
(b)AND WHERE A+B+C= I;
(i)the Wife shall receive a sum equal to (I x 59%) – B, and then less the amount required to remove the caveat as referred to in paragraph 3(v) of this order; and
(ii)the Husband shall receive a sum equal to (I x 41%) – A, and then plus the amount, required to remove the caveat referred to in paragraph 3(v) of this order.
5.That the base amount of $57,359.35 is allocated, as required by s.90XT(1)(a) of the Family Law Act 1975, to MS DUVAL out of the interest held by MR MASSEY in Super Fund 1.
6.That whenever a splitable payment within the meaning of Section 90XE of the Act becomes payable to or on behalf of MR MASSEY from his interest in Super Fund 1, the trustee shall pay MS DUVAL the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, and make a corresponding reduction in the entitlement MR MASSEY would have had but for these Orders.
7.That Order 5 has effect from the operative time.
8.That the operative time is the fourth (4th) business day after the day on which a sealed copy of these Orders is served on the Trustee of the Superannuation Fund, Super Fund 1 by MS DUVAL.
9.That this Order binds the Trustee of Super Fund 1.
10.That except as these order provide to the contrary:
(a)The Husband is solely entitled, as against the Wife, to all other assets and resources presently in his possession or control including any superannuation benefits and any monies held in bank accounts in his name; and
(b)The Wife is solely entitled, as against the Husband, to all other assets and resources presently in her possession or control including any superannuation benefits and any monies held in bank accounts in her name.
11.That in the event that a party refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made herein (“the defaulting party”):
(a)The Registrar of the Court be appointed pursuant to s.106A of the Family Law Act 1975 (Cth) to execute the deed or instrument in the name of the defaulting party and to do all other acts and things necessary to give validity and operation to the deed or instrument; and
(b)The defaulting party shall be liable for and shall indemnify the other party in respect of any costs or expenses incurred as a result of the defaulting party’s refusal or neglecting to execute any deed or instrument necessary to give effect to all or any of the orders made herein.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Massey & Duval has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE TURNBULL
Overview
Mr Massey (‘the Husband’) initiated property proceedings against Ms Duval (‘the Wife’) on 23 May 2019. The parties began cohabitation in 2006, were married in 2008. They separated for the first time in 2010, resumed their relationship in 2012 and separated on a final basis in or about September 2018. Their divorce became absolute on 13 January 2020.
The parties did not have any children together. The Husband has two children from a previous relationship — Ms F and Mr G — both of whom are now adults, although they were between the ages of 8-10 at the time of the parties’ marriage.[1]
[1] Mr Massey, trial affidavit, 14 July 2022 [36] (‘Husband’s trial affidavit’).
In essence, the parties seek that their former family home, located at C Street, Suburb D, NSW (‘the C Street, Suburb D property’), be retained by the Wife (with the Husband to transfer all his right, title, and interest therein) or, failing this, be sold. With respect to the property pool, the Husband seeks a 55/45 division in his favour of the non-superannuation assets and an equal division of the parties' superannuation interests that they held at the date of separation. The Wife seeks a 65/35 division in her favour, of the parties' total assets, including superannuation.
Facts and Chronology
Commencement of relationship
The Husband and Wife commenced cohabitation in 2006 and married in 2008. Initially, they lived together on a rented acreage property at Suburb H in NSW then, 3 years later, at a property at Suburb J, NSW. At the commencement of the relationship, according to the Wife, the parties possessed the following:
The Wife:
(a)Motor Vehicle 1;
(b)Motor Vehicle 2;
(c)2 horse float;
(d)4 horse float;
(e)Fifteen Show and breeding horses;
(f)Saddlery, Horse Rugs and Competition Riding Equipment;
(g)Fully furnished house; and
(h)Company K Shares.[2]
The Husband:
(a)Property at Suburb L, then under renovation and subject to a mortgage — sold in 2006 leaving a balance of less than $20,000[3];
(b)Motor Vehicle 3, under finance;
(c)TV & Sound System;
(d)Motorbike & Race Gear;
(e)Some Furniture;
(f)Tools;[4]
(g)Superannuation totalling $7,603.[5]
[2] Ms Duval, trial affidavit, 13 September 2022 [8] (‘Wife’s trial affidavit’).
[3] Ibid [9].
[4] Ibid.
[5] Mr Massey, case outline, 1 August 2022 (‘Husband’s Case Outline’), Page 5: At the commencement of the relationship, in 2006 had $7, 603 in superannuation and at separation in 2018 had $163, 894 in superannuation.
The Husband states that he owned a Motorcycle M prior to the relationship, which he later sold and purchased a Motorcycle N. He continues to retain this motorcycle.[6]
[6] Husband’s trial affidavit (n1) [25].
Both parties had employment upon cohabitation with the Wife working for Employer O[7] and the Husband owning and operating P Pty Ltd[8]. Both continued to be employed through their early relationship, until their initial separation in 2010. In addition to paid employment, the Wife states that she was also responsible for the joint domestic duties, paying bills and looking after the Husband and his children.[9] The Husband did not accept the Wife’s evidence regarding the care of his children.
[7] Wife’s trial affidavit (n2) [114].
[8] Ibid [125].
[9] Ibid [15].
Initial Separation
In 2010 the parties separated with the Husband renting a property at Suburb Q and the Wife moving in with her sister in Town R. The Wife claims that, at this separation, she became aware that the rent for the Suburb J property was in arrears in an amount of approximately $2,000.[10] She also asserts that all outstanding debts on credit cards and unpaid bills were left for her to manage during the separation.[11] The Wife further alleges that, on reconciliation, the Husband had substantial personal debts including unpaid bills, credit card debts, school fees and a personal loan.[12] At trial, the Husband denied leaving the Wife responsible for outstanding debts after the first separation nor having substantial debt upon the recommencement of the relationship, although he could not recall if he had credit card debt at that time.
[10] Ibid [16].
[11] Ibid [18].
[12] Ibid [23].
C Street, Suburb D Property
After a separation of approximately 18 months, the parties reconciled, and in 2012 they jointly purchased a property situated at C Street, Suburb D, NSW (‘the C Street, Suburb D property’) for $398,000 as tenants in common in equal shares. To fund the purchase the Husband and Wife jointly borrowed $389,265 from Bank S.[13] The Wife paid a deposit of $19,900 from savings accrued during the separation[14] with the Husband saying that both parties contributed $20,000 to the initial purchase of the property, but that his contribution was a loan from his mother, paid back during the relationship.[15]
[13] Wife’s trial affidavit (n2) [21] & Annexure ‘B’.
[14] Ibid [21].
[15] Husband trial affidavit (n1) [104].
Whilst living in the C Street, Suburb D property, the Wife claims she was primarily responsible for the domestic duties including shopping, cleaning, washing, ironing and cooking. The shared domestic tasks, looked after the lawns and gardens with the responsibility of the pool maintenance residing with the Husband.[16] The Husband did not give evidence about his contribution towards domestic chores during the relationship, but confirmed that he carried out all the maintenance on the property including the upkeep of the yard. Under cross-examination the Wife rejected the proposition that the Husband regularly cooked or washed the dishes. The Husband’s Counsel, Mr Smart, conceded that the Wife undertook the greater share of the domestic tasks during the relationship.
[16] Wife’s trial affidavit (n2) [24]; Husband’s trial affidavit (n1) [112].
Both parties' were employed throughout the relationship.[17] The Wife was in paid employment with Employer O, and also received income from buying and re-selling items such as toys, selling horses and supplies and working as an educator.[18] The Husband was working as a subcontracting tradesman when the parties' met, under the trading name P Pty Ltd. The company was liquidated in 2010.[19] In 2012 he was retrained as an educator and established the business ‘Company T. In 2013 he commenced employment at Employer U[20] and has worked there since that time — although the Wife claims he has continued to receive cash amounts for subcontracting works.[21] The Wife concedes that the Husband earned more than her, particularly after 2012,[22] but suggests that the Husband would use part of his money for his own purposes or to meet expenses associated with his children.[23] The Husband also claims that the Wife would spend $500-$600 per month on food for her horses.[24]
[17] Wife’s trial affidavit (n2) [58].
[18] Ibid [116]-[117].
[19] Ibid [125] – [127].
[20] Ibid [132] – [132].
[21] Ibid [139].
[22] Ibid [64], [73]: The Wife says the Husband earned $110,000 plus cash on average and $141,000 in 2015. She says she earned $50,000 plus cash of $10,000.
[23] Ibid [27], [31]: The Wife says that the Husband paid child support and she helped him meet the children’s educational costs; Ibid [60], [66], [93] & [140]. The Wife suggests that the Husband did not contribute all of his income to the relationship; Massey & Duval (Federal Circuit and Family Court of Australia, PAC2369/2019, commended 3 August 2022) ‘Trial 3 August 2022’: The Husband denied this under cross-examination.
[24] Husband trial affidavit (n1) [37].
Renovations
Whilst living in the C Street, Suburb D property, the Husband undertook repair work and renovated a single garage, added a movie room, a new bedroom, a ‘man cave’ and replaced the kitchen.[25] The Husband’s position is that he made significant contributions to the improvement of the C Street, Suburb D property by utilising his skills as a tradesman.[26] The Husband obtained a property valuation, and tendered photographs[27], which he asserts evidences an improvement to the value of the property.
[25] Ibid [110].
[26] Ibid [10], [110]: The Husband was employed as an educator at Employer U NSW.
[27] Husband’s trial affidavit (n1) Annexure “B”; Exhibit “H1”.
The Wife, however, denies a benefit from the renovations and asserts that the Husband has compromised the structural integrity of the property by demolishing parts of it. She obtained an assessment from a Structural Engineer, which confirms that an extensive amount of work is required to repair the house.[28]
[28] Wife’s trial affidavit (n2) [156] – [157].
Separation
The parties separated on a final basis around September 2018. The Wife continued to live in the C Street, Suburb D property and paid towards the mortgage until seeking a hold on mortgage repayments. The Husband claims he continued to pay half of the mortgage repayments for 6 months after moving out, at approximately $1,000 per month.[29] The Wife admits that the Husband did make such payments, but at the reduced amount of $250 per week.[30] Neither party paid the Council rates on the property contributing to the outstanding debt.
[29] Husband trial affidavit (n1) [84].
[30] Wife’s trial affidavit (n2) [164].
At the time of separation the Bank E offset account had a balance of $38,350. The Husband claims the Wife withdrew all of the funds shortly after separation. This included:
(a)11 September 2018 an amount of $10,050 to the Respondent’s GO MasterCard;
(b)11 September 2018 an amount of $8,500 to the Respondent;
(c)12 September 2018 an amount of $9,800 to the Respondent’s Store MasterCard; and
(d)12 September 2018 an amount of $10,000 to the Respondent.[31]
[31] Husband trial affidavit (n1) [86].
The relationship, after separation, was tainted with conflict over personal assets and unwelcome access of the Husband at the C Street, Suburb D property. The parties could not communicate or reach agreement regarding personal property. The Husband returned on several occasions to the C Street, Suburb D Property, removing items, often when the Wife was not present. The Wife asserts that, on one occasion, the items taken were things necessary to set up a new house and other property of strong emotional attachment.[32]
[32] Wife’s trial affidavit (n2) [47] – [55].
The Husband commenced proceedings for final property orders in May 2019. Both parties attended conciliation conferences in January 2020 and August 2021 but were unable to reach agreement at either.
Current circumstances
The Husband has remarried and resides with his wife, Ms V, in a house owned by her. The Husband pays her $300 a week in rent and meets expenses such as food, entertainment, shopping, incidental costs as well as his own medical expenses.[33] The Husband is receiving a reduced income of 80% of his usual wages from Employer U NSW, due to being on WorkCover after a workplace incident. He argues his capacity to work is uncertain as he suffers from anxiety and depression since the workplace incident. He is currently seeing a psychiatrist and psychologist for this condition.[34] The Husband also received an inheritance of $140,000 from his Mother’s estate close to the date of the trial.
[33] Husband trial affidavit (n1) [102].
[34] Ibid [60] – [66].
The Wife continues to reside in the C Street, Suburb D home and supports herself financially. She remains employed with Employer O and works as a factory worker.[35] There is a caveat registered against the title to the C Street, Suburb D Property securing the Wife’s outstanding legal fees of $7,000 and she accepts that she is solely responsible for meeting the cost of removing that caveat. The Wife is undergoing treatment for a cancer diagnosis as well as suffering from chronic medical conditions. She states that her ability to work is affected physically and psychologically from these conditions and will affect her more over time.[36]
[35] Wife’s trial affidavit (n2) [114].
[36] Ibid [144] – [153].
The parties' assets and liabilities
The agreed asset pool of the parties', subject to the determination as to whether certain monies should be added back to the pool, and whether the Wife’s engagement ring should be included, is set out below:[37]
[37] Exhibit J2 – noting that exhibit J2 includes a financial resource of $140,000 being an inheritance received by the Husband post separation. Both parties' agree that the inheritance will not be included in the asset pool for division.
Assets Ownership Description Wife’s Value Husband’s Value Husband CBA Netbank Saver ###...55 $2, 943 $2, 943 Husband CBA Smart Access ###...47 $112 $112 Husband Motorcycle N $4, 500 $4, 500 ? Engagement Ring $11, 000 $11, 000 Wife CBA Bank Account ###...58 $742 $742 Wife CBA Bank Account ###...31 Nil Nil Wife Company K Shares (920 shares @ $4.59) $4, 223 $4, 223 Wife Horse Float Nil Nil Wife Motor Vehicle 4 $4, 000 $4, 000 Wife Toy Collection $2, 000 $2, 000 TOTAL $854, 520 $854, 520
Liabilities Ownership Description Wife’s value Husband’s Value Joint Bank E Home Loan 000704932 $387, 153 $387, 153 Wife Store Mastercard $4, 070 $4, 070 Wife GO MasterCard ###...35 $0 $0 TOTAL $391, 223 $391, 223
The agreed Superannuation pool is:
Superannuation Member Name of Fund Type of Interest Wife’s value Husband’s value Husband Super Fund 1 as at December 2021 Accumulation $245, 810 $245, 810 Wife Super Fund 2 as at 13/7/22 Accumulation $99, 971 $99, 971 TOTAL $345, 781 $345, 781
The Husband seeks division of 55/45 in his favour of the non-superannuation net assets. His position is that he has made a greater financial contribution in the form of mortgage repayments, paying approximately $1,100 per week towards the mortgage, and the contribution of his income generally, whilst a significant part of the Wife’s income was spent on her horses. He also asserts that he improved the value of the C Street, Suburb D property by undertaking renovations. He argues that an amount of $38,800 be added back to the non-superannuation pool, being monies taken by the Wife from the mortgage offset account, post separation. He also argues that the Wife wasted the parties’ resources with expenditure on her horses. The Husband concedes that the Wife’s domestic duties were greater than his in relation to cooking, cleaning and laundry but asserts that he performed some domestic duties including cooking, lawn maintenance and yard work.[38]Further, he seeks an equal division of the parties' superannuation assets that existed at the date of separation with $20,000 added back to that pool — an amount the Wife withdrew from her entitlement post separation. The outcome, he argues, gives proper account to his significant contributions and the uncertainty regarding his ongoing income earning capacity.
[38] Husband’s trial affidavit (n1) [112].
The Wife seeks a division of 65/35 of all assets in her favour. Her position is that the parties' made similar financial contributions to the marriage, even though the Husband received a greater income, as not all of the Husband’s monies were contributed to the relationship. Further, she made greater non-financial contributions to the relationship including the cooking, laundry, cleaning, shopping and caring for the Husband and his children, whilst also contributing to the mortgage and living expenses.[39] Additionally, she contributed $19,900 of her savings as a deposit for the purchase of the C Street, Suburb D property. The outcome reflects her contributions, the impact of the Husband’s family violence upon her, the Husband’s waste of the parties' resources through gambling and poor workmanship on the C Street, Suburb D property and the income and resources disparity between the parties'.
[39] Wife’s trial affidavit (n2) [66].
The parties were able to agree upon a number of the provisions to be included in the eventual property settlement order which was exhibited as “J1”. That document confirmed that the C Street, Suburb D property will be transferred to the Wife and that she will assume responsibility for the mortgage secured against that property to Bank B. In the event the Wife is unable to discharge the Bank B mortgage and pay the Husband his entitlement, the property will be sold. Otherwise the parties' agree that the parties' will retain the assets and liabilities they currently hold. J1 will be completed with the addition of :
(a)The cash amount payable to the Husband if the Wife retains the C Street, Suburb D property;
(b)The percentage amount of the proceeds of sale of the C Street, Suburb D property each party will receive if that property is sold;
(c)The payment to the Wife from the Husband’s superannuation entitlement (if any);
(d)An order, if made, for the Husband to enter the C Street, Suburb D property and complete works on the same.
Evidence
The Husband relied upon his amended initiating application, amended affidavit, amended financial statement — all filed 14 July 2022 — a case outline and written submissions. He also relied upon the residential valuation assessment of the C Street, Suburb D property dated 5 May 2022 and other material tendered and referred to by Mr Smart, Counsel for the Husband including:
•A document titled ‘scope of work’;
•Subpoenaed material from [W Hospital];
•Subpoenaed material from NSW Police concerning [Mr Massey];
•Evidence of subpoenaed material from NSW Police relating to [Ms Duval];
•Photographs of a ring and the Husband’s current Wife’s engagement ring;
•A photograph of a ring on a finger; and
•The Husband’s proposed orders in relation to the remaining issues in dispute[40]
[40] Exhibits ‘H1’ – ‘H7’.
The Wife relied upon her response filed 26 June 2019, her financial questionnaire filed 22 October 2019, her affidavit and financial statement filed 15 July 2022, a case outline and written submissions. Mr Ladopoulos, Counsel for the Wife, also tendered the following documents:
•Pages 36 - 75 inclusive of the Wife’s Tender Bundle;
•Page 12 of the Wife’s Tender Bundle;
•Evidence of a bundle of Commonwealth Bank Statements from the period of April 2016 – 30 September 2016;
•Page 35 of Wife’s Tender Bundle;
•The Wife’s proposed orders in relation to the remaining issues in dispute; and
•The Court Portal record of procedural Court events[41]
[41] Exhibits ‘W1’ – ‘W6’.
The Husband and the Wife were the only witnesses in the proceedings and both were cross-examined. The level of distrust was palpable. An example was the parties' evidence regarding the Wife’s engagement ring. Each claimed that the other party held it in their possession and wanted it included in the asset pool as an asset held by them with a value of $11,000. Both parties denied that they held the ring. The Wife believed that the ring had been given to the Husband’s current wife, referring to a picture of the couple which showed the Husband’s partner with a ring on her finger.[42] The Husband said that this ring had been purchased by him for his current wife and produced a receipt to corroborate the same. He also produced photographs of the new ring to show that it was different to the Wife’s engagement ring, it being a diamond surrounded by smaller diamonds as opposed to the solitaire the Wife had owned. The Wife would not concede that the ring was different, notwithstanding the photographs. The point was only conceded after the Husband’s Wife – Ms V - came to the Court with the ring so that the Wife could inspect the same. Mr Ladopoulos submitted, however, that the Court should still find that the ring is in the Husband’s possession. Mr Smart submitted that there was insufficient evidence available to establish who holds the ring. I agree with that submission. There is no evidence that that enables the Court to make a finding one way or the other to the requisite standard. I will not include the ring in the balance sheet.
[42] Exhibit “H5”.
It is clear that both parties remain impacted by the acrimony existing at the point of separation and each party's evidence was coloured by their negative view of the other.
Standard of proof
I note briefly, before continuing, that all facts in issue in these proceedings must be proved on the balance of probabilities. A fact in issue is 'proved' if I am reasonably satisfied, on the evidence, that it is more likely than not that the fact existed or occurred in the manner ultimately determined.[43]
[43] Evidence Act 1995 (Cth) s 140.
Dixon J, as he then was, also remarked upon the standard of proof for civil proceedings in Briginshaw v Briginshaw (1938) 60 CLR 336, which remain relevant and authoritative:
The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.
I must ground my determination of the facts in dispute on the balance of probabilities.
Issues for determination
Issue 1 - Should the parties' superannuation and non-superannuation assets be included in one pool?
The Husband contends that the Court should adopt a two pool approach to the superannuation and non-superannuation assets, whilst the Wife’s submits that the Court should exercise its discretion to include the parties' superannuation in the same pool as the other assets.[44]. This will assist the Wife to retain the C Street, Suburb D property as she will pay the Husband a smaller cash amount if he retains his greater superannuation interest.[45] The Husband argues that it is just and equitable for the Court to adopt a two pool approach, but for the parties' superannuation interests to be valued at the date of separation because of the significant contributions he made to his superannuation fund following separation.
[44] The Wife’s counsel referred to the decision in Sweet & Sweet [2022] FedCFamC2F 676). In Sweet & Sweet, Deputy Chief Judge McClelland adopted the one pool approach when determining a just and equitable distribution of property [286]. This approach made with reference to the principles intimated by the Full Court in C&C at 79, 646 [63] and Cronin J in Drewett & Drewett [2012] FamCA320 [185]-[188].
[45] The Husband’s interest is valued at $245,810 and the Wife $99,971.
The approach to determining property cases involving superannuation interests and whether a Court should consider the parties' superannuation interests in a separate pool was considered in Semperton & Semperton [2012] FamCAFC 132. In that case, the Full Court adopted and clarified the approach taken in Coghlan & Coghlan [2005] FamCA 429 (‘Coghlan’) at [78]:
After the introduction of the relevant amendments to the Superannuation Regulations in 2001, the first significant case before the Full Court was Coghlan (above). The primary issue for determination in that appeal was whether the trial judge had erred by not including the parties’ superannuation interests in the property pool for division between the parties. The trial judge had assessed and divided the net property of the parties, excluding the superannuation from the pool, and did not make any s 75(2) factor adjustments for superannuation considerations.
The majority (Bryant CJ, Finn and Coleman JJ) considered the content, intent and effect of Part VIIIB of the Superannuation Regulations.
…
Their Honours then commented on the effect of the legislation in practice, finding that there was a discretion as to the way in which superannuation interests may be treated in a particular case, subject to certain steps required to be taken where splitting orders are sought, and prudent to be taken where no splitting order is sought:
Practical implications
61.Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.
62.The parties' contributions to all items on that list (including the superannuation interest) would then be assessed on either a global or an asset by asset basis. It might then be necessary in the s 75(2) context to have regard to the parties' future superannuation entitlements (having regard of course to any division proposed on the basis of their contributions), with consideration then being given to the overall justice and equity of any proposed award or O (including any proposed splitting order). Indeed, this is the approach which the Full Court has used on its re-exercise of the trial Judge's discretion in Ilett and Ilett (2005) FLC 93-221 (which will be delivered contemporaneously with the decision in this case).
…
65.In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a)value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
(b)consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c)consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d)ensure that pursuant to s 79(2) the orders in relation to the parties' property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
66.In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse's present and/or future entitlements under the fund.
The majority emphasised that in circumstances where superannuation interests are dealt with separately from other property, then their “real nature”, as explained by their Honours, can be taken into account at both the adjustment stage and at the just and equitable orders consideration stage.
67.If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s 4(1), but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable.
68.When we refer to “the real nature” of the relevant superannuation interest, we are referring to the fact that notwithstanding that its value according to the Regulations may well be calculated to be a very significant amount, that superannuation interest may be no more than a present or future periodic sum, or perhaps a future lump sum, the value of which at date of receipt is unknown.
(Emphasis added)” [46]
[46] Semperton & Semperton [2012] FamCAFC 132, [78]-[83] (May J).
I will consider this issue once I determine whether it is just and equitable to make a property order.
Issue 2 – Add-backs
The Husband seeks that the amount of $38,800.00 be notionally added back to the asset pool to represent what he says to be a pre-trial distribution of that amount to the Wife. He says that shortly after separation the Wife drew down that amount from their Bank E home loan offset account and did not use those funds to meet the home loan repayments. The Wife agreed under cross-examination that the balance of the offset account was $45,000.00 as of final separation in September 2018. She conceded that she withdrew $10,500.00 and $8,500.00 on 11 September and then $9,800.00 and $10,000.00 on 12 September, totalling $38, 800. The Wife claims that, at the time of refinancing the house, the Husband agreed she could withdraw $10,000 to pay for dental repairs. The Wife withdrew the amount at separation but used it towards living expenses. She also withdrew $10,500 to pay off the GO MasterCard that was said to have been used to purchase furniture and renovation fittings taken by the Husband.[47] The issue is whether the Wife used the redraw funds in a manner which justifies the notional ‘add-back’ of those monies.
[47] Wife’s trial affidavit (n2) [154].
After separation the Wife also withdrew $20,000 from her superannuation fund reducing the amount from approximately $120,000 (at separation) to approximately $100,000. The Husband argues this should be added back to the superannuation asset pool that existed at the time of separation. The Wife offered no explanation for this withdrawal nor any detail as to how the monies were spent.
A marriage or de facto relationship is, in countless ways, a shared endeavour. Married or de facto couples ordinarily work together to strengthen their economic position, and endure side by side the financial highs and lows of domestic life. In Kowaliw & Kowaliw (1981) FLC 91-092 (Kowaliw), Baker J summarised the Court’s view:
Marriage is for most couples an economic partnership. Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living. The reported decisions in respect of applications for settlement of property under sec. 79 of the Act are unanimous hat both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally.[48]
[48] Kowaliw & Kowaliw (1981) FLC 91-092, 76,643-76,644.
The inverse is also true — parties should generally share the financial losses incurred in the course of their relationship.[49] This statement of general principle is, of course, guided by the overarching requirement of justice and equity in property adjustment orders.
[49] Ibid 76,644.
Where one party has ‘prematurely and inappropriately obtained the benefit of property of the relationship prior to it being considered by the Court at final hearing’,[50] it is often inappropriate for the loss, caused by that party’s expenditure, to be shared by both parties. A common example, as given in Mayne & Mayne [2011] FamCAFC 192, is a party withdrawing and using joint funds for their own purposes post-separation.[51]
[50] Warwick & Cutler [2016] FamCA 934, [127] (McClelland J).
[51] Mayne & Mayne [2011] FamCAFC 192, [73] (Faulks DCJ) (‘Mayne’).
A Court faced with an application under ss 79 or 90SM may address any such injustice or inequity in three ways — taking it into account under ss 75(2)(o) / 90SF(30(r), notionally adding back the expenditure, or taking the expenditure into account as a contribution according to Grier & Malphas [2016] FamCAFC 84.
The first option that I will discuss is to take the conduct and loss into account under s 75(2)(o) or s 90SF(3)(r). Baker J said further in Kowaliw:
It does seem to me, however, that if a party has either by deliberate act or by economic recklessness reduced the value of assets available for distribution then the economic consequences which flow therefrom including the resultant burden to the other party are directly relevant to a consideration of the respective contributions of the parties contemplated by sec. 79(4).
If, on the other hand, the decision of the Full Court in Antmann and Antmann (supra) is to be interpreted both literally and restrictively as precluding the Court from a consideration of negative contribution in relation to para. (a) or (b) of sec. 79(4) then I am nevertheless of the opinion that evidence of wantonness or recklessness having economic consequences is clearly a matter which the Court may take into account pursuant to the provisions of sec. 75(2)(o).[52]
[52] Kowaliw (n 48), 76,644-76,645.
The Full Court in Dickons & Dickons [2012] FamCAFC 154, as restated by later authorities, refuted the idea that contributions should be assessed according to their ultimate economic result.[53] Notwithstanding that ‘negative contributions’ cannot be taken into account, Kowaliw is correct in that s 75(2)(o) (and therefore s 90SF(3)(r)) remains applicable to adjust any proposed division in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.[54]
[53] Dickons & Dickons [2012] FamCAFC 154, [14] (Bryant CJ, Faulks DCJ, Murphy J); Jabour & Jabour [2019] FamCAFC 78, [61] (Alstergren CJ, Ryan and Aldridge JJ). See also Dovgan & Dovgan [2021] FamCA 306, [347] (Harper J), which restates the need to holistically assess contributions following the case of Dickons, and that ‘all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder’.
[54] Kowaliw (n 48), 76,644.
The second option is to notionally ‘add-back’ the property of which a party has disposed. The item is added back ‘notionally’ by including its value in the pool, since the exact property item no longer exists as property of one or both of the parties. In simply adding back the value of the item, the absence of that item in the property pool is perhaps most tangibly addressed.
The circumstances in which it may be inappropriate to share a loss are, as extracted in Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195 (‘Omacini’), below. Their Honours in that case discussed add-backs, but the categories extracted may also be addressed through other means at the Court’s discretion.[55]
[55] Omacini & Omacini; sub nom AJO & GRO [2005] FamCA 195 (‘Omacini’) [30]; Mayne (n 51), [180] (Strickland J).
To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
11.For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b)Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the Husband did was to distribute to himself an asset in which the Wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the Husband as a matter to which regard should be had under section 75(2). It seems to me that the Husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the Husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.[56]
[56] Omacini (n 55) [30] (Holden, Warnick and Le Poer Trench JJ) (‘Omacini’).
The Full Court in Mayne also said the following in relation to add-backs and their utility in pursuance of justice and equity at [78] & [79]:
It seems that human experience (and common sense) shows that while parties are together, each might, from time to time and with the consent of the other, either express or implied, apply or appropriate assets or funds to his or her own purposes. When the relationship is good, no-one is likely to care — let alone keep records. Individual amounts may stand out, as is the case here, but many small transactions in combination may exceed, in total value, one large transaction.
It is not the Court's function to conduct an audit of the marriage or of the relationship finances. The parties' remedies for resolving disputes about expenditure while they are together are centred on them and them alone. Choosing one transaction from many prior to separation for different treatments, specifically "to be added-back" or notionally included in the pool of property may make doing justice and equity between the parties difficult.”[57]
[57] Mayne (n 51) [78]-[79] (Faulks DCJ).
The Full Court in Vass & Vass [2015] FamCAFC 51 clarified that neither Stanford nor Bevan & Bevan [2013] FamCAFC 116, had the effect of making add-backs unavailable to first instance judges where they are an appropriate solution.[58] It is, however, ‘beyond doubt’ that notional add-backs are exceptional,[59] and that the Full Court’s remarks in C & C [1998] FamCA 143 at [46] remain authoritative:
Whilst not seeking to place a fetter upon the exercise of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. Providing modest support for their adult children or taking not inappropriate holidays for themselves seems to fit comfortably within that description.[60]
[58] Vass & Vass [2015] FamCAFC 51, [138]-[139] (Strickland, Murphy and Tree JJ). See Bevan & Bevan [2013] FamCAFC 116, [79] at which Bryant CJ and Thackray J in applying Stanford said that ‘“notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them”, and thus is not amenable to alteration under s 79’. The case ultimately did not turn on the issue, with their Honours stating that ‘in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property’.
[59] Mayne (n 51), [185].
[60] C & C [1998] FamCA 143, [46] (Nicholson CJ, Ellis and Kay JJ).
Gill J in Koch & Kest [2021] FamCA 408, in explaining add-backs in the context of legal fees, extracts and cites with approval NHC & RHC [2004] FamCA 633 (‘Chorn & Hopkins’) as authority that outstanding legal fees in themselves are not generally added back as a liability.[61] The Full Court in Chorn & Hopkins also stated the following with respect to legal fees at [56] – [58]:
In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.[62]
[61] Koch & Kest [2021] FamCA 408, [21].
[62] NHC & RCH [2004] FamCA 633, [56]-[58] (Finn, Kay and May JJ).
The third option is to, where appropriate, treat the expenditure as a contribution of the other party as discussed by their Honours in Grier & Malphas.[63] Bryant CJ remarked at [57]:
In my view there is merit in Ground 4(b). I would not necessarily wish to be seen as endorsing the effect of receipt of these funds as “add backs” to the balance sheet, something which her Honour eschewed. However the receipt of these funds by the Husband requires expression in some form, either as a matter to be taken into account under s 75(2)(o), or, as the Wife later argues, in relation to contributions. But however expressed, failure to properly account for it leads to the conclusion that the result reached by her Honour was “plainly wrong” (see Norbis & Norbis (1986) 161 CLR 513 per Brennan J at 539).
[63] Grier & Malphas [2016] FamCAFC 84, [57] (Bryant CJ), [141] (Murphy and Kent JJ).
Murphy and Kent JJ remarked further at [141] that:
When the parties to a relationship earn income and derive capital through corporate/trust structures established primarily to lawfully minimise taxation, the indirect contribution of a party who is not involved in the day-to-day operation of those structures is sometimes overlooked. Yet, the “non-active” party can, in truth, be a significant contributor. This Court said more than 30 years ago in Lee Steere and Lee Steere, “it cannot be denied that the splitting of income tax is a direct and immediate financial benefit to the Husband and to that extent a direct financial contribution on the part of the Wife”. So, too, “the issue of the Wife’s personal liability as a director of the companies … is a matter of increasing relevance in recent times … the ‘days of the sleeping, or passive, director are well and truly over.
While a loss purposefully or recklessly incurred may not be properly treated as a negative contribution, it may nonetheless be treated as a contribution of the party who has not experienced the benefit of that expenditure.
The case of Grier & Malphas[64] concerned the unexplained use of significant funds by the Husband post-separation, and considered how the same is to be taken into account if not treated as an add-back. The first instance decision avoided adding back these amounts, but without taking them into account under s 75(2)(o) or as a contribution of the Wife. Bryant CJ stated that the Husband’s receipt of the funds ‘require[d] expression in some form’, noting that the Wife’s submission to take it into account as a contribution was unclear at trial.[65] In their Honours’ reasons, Murphy and Kent JJ remark that the power under s 79 (and s 90SM) is discretionary. While ‘authority eschews “overly pernickety analysis” and s 90SM demands neither an audit nor an exercise in accounting’, the trial judge must in their discretion take it into account in the appropriate manner.[66]
[64] Grier & Malphas (n63).
[65] Ibid, [57]-[58].
[66] Ibid [129], [131].
I will consider whether there should be any add-back to the asset pool(s) when determining the final makeup of the net asset pool(s) for division at paragraph 84 of these Reasons.
Issue 3 - Waste
The Husband argues that the Wife was a horse enthusiast who used money from the mortgage offset account to pay for agistment, feed and associated costs for up to 15 horses and that he did not benefit from the presence or expense of the horses.[67] The Husband also provided bank statements showing the Wife spent $500 - $600 per month on food for the horses drawing money from her account.[68] Additionally, the rent money paid by Mr G was, according to the Husband, used by the Wife for her horses and not for general use for both parties.[69] The Wife argues that most of the horses she brought into the relationship were sold and some monies were obtained for them and, as such, should not be regarded as a wasted asset. Further, the Husband was aware that she owned horses when he entered the relationship and her expenditure on the horses was a lifestyle choice and not excessive.
[67] Husband’s Case Outline (n5).
[68] Husband trial affidavit (n1) [37].
[69] Ibid [37] – [38].
The Wife alleged that the Husband played poker machines and black jack on a regular basis and was observed by the Wife to spend ‘several thousand dollars in each session.’[70] She also claimed he took large amounts of cash from the house and ATM’s located in pubs and clubs.[71] She was, however, unaware of the extent of his gambling and could not provide corroborating evidence on this issue. The Husband denied that he was a gambler and drinker, or that he would spend several thousand dollars in each session, or withdraw large amounts of money from either ATM’s or from the house. He admitted to participating in sports gambling on rare occasions.[72]
[70] Wife’s trial affidavit (n2) [112].
[71] Ibid [113].
[72] Trial 3 August 2022 (n23): Admitting during examination in chief.
The Wife also claims that the Husband reduced the value of the marital home through his actions of renovating the C Street, Suburb D property. The renovations, she alleges, left the property in an unsafe condition requiring significant repairs.[73] The Wife continues to live in that house, and says she has paid for work to be done, but has not completed all which must be done to repair the property.
[73] Wife’s trial affidavit (n2) [23].
The Wife sought an assessment from a Structural Engineer whose report concluded that the alterations work is incomplete and has resulted in the need for two emergency props to retain a safe floor above.[74] The report did highlight the fact that the structural engineer only considered the matters raised by the Wife, as per her instructions, and that the report should not take the place of a thorough building inspection.[75] The Wife also obtained a quote from Z Pty Ltd for completion of the intended renovations showing a cost of $96,250. The Husband argues that, since separation, he has been restricted by the Wife from accessing the property to complete the works or to access his tools.[76] The significance of this is that the Husband is of the belief that he could have continued to make repairs and contribute to an improvement in the value of the property. He denies that his workmanship has devalued the property. Further, he seeks an order to be allowed to attend the property so that he can finish the required works — which the Wife opposes.
[74] Ibid [156] – [157] & Annexure ‘L’.
[75] Ibid & Annexure ‘L’.
[76] Husband’s Case Outline (n5).
The Wife seeks that the Husband’s gambling, drinking and poor workmanship to the property be taken into account under s 75(2)(o). The Husband submits that the Wife’s expenditure on horses be taken into account in the same way. In Marlowe-Dawson v Dawson (No2) [2014] FamCA 599[77] Kent J observed after referring to Baker J’s statement in Kowaliw as follows:
It may be accepted that the above statement by Baker J in Kowaliw (supra) and subsequent cases which have considered and applied it (see, for example, In the Marriage of Omacini (2005) 33 Fam LR 134; (2005) FLC 93-218; [2005] FamCA 195; In the Marriage of DJM and JLM[1998] FamCA 97; (1998) 23 Fam LR 396; (1998) FLC 92-816; In the Marriage of A D and A C Townsend[1994] FamCA 144; (1994) 18 Fam LR 505; (1995) FLC 92-569; Browne v Green[1999] FamCA 1483; (1999) FLC 92-873; Chorn & Hopkins[2004] FamCA 633; (2004) FLC 93-204; Cerini & Cerini[1998] FamCA 143 (Cerini & Cerini); SMB & MFB [2006] FamCA 46; Polonius & York[2010] FamCAFC 228) establish guidelines for the exercise of the s 79 discretion as distinct from requiring the application of a fixed legal rule to the facts on which the operation of the rule depends. (Lovine & Connor(2012) FLC 93-515; [2012] FamCAFC 168 at [101]–[103]).
However it appears clear from those authorities that in the context of a claim of reckless, negligent or wanton conduct, as advanced here, at least two elements must be fulfilled for the guidelines to have application. First, that the conduct can be so characterised and, second that there exists a direct causal connection between the conduct so characterised and the loss or reduction of value so caused.
[77] Marlowe-Dawson v Dawson (No2) [2014] FamCA 599, [106]-[107].
I will consider whether either party has wasted the parties' resources when I consider s 75(2)(o).
Issue 4 – How should the Wife’s failure to pay the mortgage and rates be considered when assessing parties contributions?[78]
[78] Mityukov & Mityukov [2019] FamCAFC 199. A Court makes a balancing exercise when assessing the contributions of parties to a lengthy marriage including mortgage repayments and arrears after separation. Per Ainslie-Wallace J at [25] ‘The amount of the mortgage arrears fell within his Honour’s consideration of the parties’ contributions over a lengthy marriage and was taken into account alongside the Husband’s receive and use for personal expenditure of $51 000 from the sale of some of the business assets. It was, as his Honour correctly observed a balancing exercise and no error in his Honour’s approach has been demonstrated.’
The Husband argues that the Wife, to his exclusion, occupied the marital home then failed to pay the rates and mortgage repayments. Consequently, a significant mortgage debt has accrued which is to be paid by the parties. The Wife made arrangements for a hold on mortgage repayments with the provider, under a hardship agreement. The Husband’s position is that the Wife has had the benefit of living in the house without having to meet the mortgage for the last 15 months nor pay the rates.[79] The Wife argues that she could not afford to meet the mortgage payments or the other outgoings.[80] As per the approach in Grier & Malphas I will determine this issue when considering the parties' contributions pursuant to s 79(4).
Issue 5 - The impact on the property adjustment (if any) of the Wife’s care of the Husbands children during the marriage
[79] Husband’s trial affidavit (n1) [90].
[80] Wife’s trial affidavit (n2) [160], [161], [165].
The Wife contends that she assisted with the care and financial support of Ms F and Mr G during the relationship.[81] The Husband disputes the extent of the Wife’s purported care of his children. In 2012, Mr G moved into the C Street, Suburb D property during which time the Wife stated that she provided all domestic duties for Mr G and continued to do so until their final separation.[82] Whilst living with them, Mr G paid $120 per week as rent[83] which the Husband says was used by the Wife on expenses relating to the horses and was not for general use by both parties.[84]
[81] Ibid [28] - [32].
[82] Ibid [32].
[83] Trial 3 August 2022 (n23): Confirmed by Wife during cross examination.
[84] Husband’s trial affidavit (n1) [37] – [38].
The care of a partner’s children is a matter that can be taken into account under s 75(2)(o) and I will determine the issue when I consider that section.[85]
Issue 6 – Whether the Court should regard the Wife’s contributions as having been made more arduous due to her experiences of family violence from the Husband
[85] Zaruba & Zaruba [2017] FamCAFC 91 [53] confirms such matters should be considered under s75(2)(o) and not s79(4)(e).
Both parties allege incidents of family violence during their relationship. A source of conflict between the parties was the expense and effort of housing and caring for the Wife’s horses. The Husband alleges an incident where an argument over building horse shelters escalated into violence. The Wife allegedly verbally abused the Husband before stabbing him in the arm with a fork.[86] The Husband attended hospital and reported the incident to police yet no family violence orders were made and no further action was taken.[87] At trial, the Wife denied stabbing the Husband but states he chased her and subsequently ran into the fork she was holding. She claims she was unaware of him going to hospital after the incident, or the police contacting her about it. The Husband stated in his trial affidavit that, after the stabbing incident, he was unable to maintain his workload, only working sporadically for the 12 months afterwards.[88] Ultimately, the Husband did not pursue an argument that his contributions were made more arduous as a result of this alleged assault, conceding that the ‘fork-stabbing incident’ did not affect his ability to work.[89]
[86] Husband trial affidavit (n1) [40].
[87] Ibid [52] – [57].
[88] Ibid [68] – [69].
[89] Trial 3 August 2022 (n23): Denied by Husband in giving evidence.
The Wife also alleges that throughout the relationship she was subjected to family violence in the form of financial control, control of her movements and intimidation.[90] She claims the Husband pulled her hair, pulled at her clothes,[91] bit her,[92] controlled her finances and spending, insisted on cash payments to him and failed to disclose his financial position.[93] After separation, she alleges she was subject to his threats, intimidation, stalking, verbal abuse, break and enter and theft. An Apprehended Domestic Violence Order was ordered against the Husband in June 2019.[94] The Husband denied all accusations of family violence put to him during the trial.[95] Mr Ladopulos conceded during submissions that there was no evidence to corroborate the Wife’s allegations but that the Court could accept the Wife’s evidence regarding these matters and draw an inference that her contributions were made more arduous as a result of the alleged violence.
[90] Wife’s trial affidavit (n2) [106], [74].
[91] Ibid [87].
[92] Ibid [88].
[93] Ibid [90] - [96].
[94] Ibid [107] – [108].
[95] Trial 3 August 2022 (n23): Denied by Husband when giving evidence.
It is relevant to the assessment under s 79 or 90SM that a party, by their conduct, caused the contributions of the other party to their relationship to be more onerous than they otherwise would have been. The decision of Kennon & Kennon (1997) FLC 92-757 gave rise to this principle applicable within the assessments under ss 79 and 90SM of the Act. The Full Court made the following remarks:
The actions in question are variously referred to in discussions as ‘conduct’, ‘misconduct’, or ‘fault’. Those terms seem to be used interchangeably. As a matter of convenience, we will use the term ‘conduct’.
The question of what is encompassed by the term ‘domestic violence’ in this sense has so far received little attention (but see the definition in s 60D for Pt VII purposes).
Although in this discussion reference is made exclusively to domestic violence, it is not intended to be confined to that issue. We do not consider that domestic violence is an exclusive category. It is the most obvious example of a wider and more general category of conduct which may be relevant within s 79.
This issue only really arises in a discretionary system of property settlement law. In non-discretionary systems the relevant issues and steps are generally spelt out in a way which is intended to be exclusive.[96]
…
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of ‘negative contributions’ which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that.[97]
…
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).[98]
[96] Kennon & Kennon (1997) FLC 92-757, [84 - 290] (‘Kennon’).
[97] Ibid [84 – 294].
[98] Ibid [84 – 295].
Subsequent authorities on the Kennon principle which have elucidated its operation are Keating & Keating [2019] FamCAFC 46 (‘Keating’) and Loncar & Loncar [2021] FedCFamC1A 14 (‘Loncar’).[99] In Keating, the Full Court confirmed that Kennon is not to be expressed as a set of ‘elements’ or as a multi-step process like that in Hickey & Hickey [2003] FamCA 395 (‘Hickey’). Instead, it is to be remembered that, in the wide discretion of power afforded to the Court, and in the holistic assessment to be undertaken towards that discretion, it is crucial that any Kennon finding identify cause and effect. Their Honours said:
Perhaps the use of the word “quantification” is infelicitous and has unintentionally added a gloss to the ratio in Kennon when, in truth, the Court in Spagnardi was merely reinforcing the need for there to be an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make relevant contributions. And, depending upon the nature of the violence established, in the absence of express evidence about the effect that violence had on the victim spouse’s contributions, how difficult it might be for the Court to draw inferences which would establish the evidentiary nexus[100]
[99] See also Benson & Drury [2020] FamCAFC 303, [37], at which their Honour’s discuss use of ‘claim’ and ‘adjustment’ to refer to the Kennon principle: ‘[a]lthough the use of the short-hand descriptor of a “Kennon claim” is not of itself erroneous, it is liable to induce error because the issue is not a stand-alone claim, but is rather integral to the entire process …Nor is it helpful to refer to the issue as a “Kennon adjustment” because that epithet invites treatment of the issue as an isolated claim for an additional share of the available property.’
[100] Keating & Keating [2019] FamCAFC 46, 39.
Loncar confirms that the Kennon principle sits within, not outside, the assessment to be undertaken in determining what, if any, order should be made under s 79(1) or 90SM(1). That case is authority for the proposition that any percentage distribution on the basis of a Kennon finding is not to be placed in ‘quarantine’ when the Court assesses the other factors in ss 79(4) or 90SM(4).[101] Both Keating and Loncar reflect Gee J’s expression of how the Kennon principle applied to the case of Marando & Marando (1997) FLC 92-754 before him. His Honour, applying Kennon and awarding 55% to the Wife and 45% to the Husband on the basis of the ‘special factors’ established on the evidence by the Wife, said that parenting and homemaking contributions were:
made especially hard by the Husband’s abuse and denigration of her and the children … as well as by his attitude to ‘women’s work’ and by his drinking which necessitated the Wife working especially hard and harder than would be usual in normal situations as homemaker, parent and as the prime navigator of the welfare of this family through the many seas of problems and difficulties which confronted them over the years.[102]
[101] Loncar & Loncar [2021] FedCFamC1A 14, [61] – [63].
[102] Marando & Marando (1997) FLC 92-754, [84],[168-84],[169].
In line with the authorities I will address the Wife’s Kennon argument when I consider the parties' contributions.
Issue 7 – should the Husband be able to enter the C Street, Suburb D property and undertake works to that property?
The Husband claims that he has the ability to undertake repairs to the C Street, Suburb D property that will add value in the event that property needs to be sold. The Wife opposes the Husband attending the property and says that the property should be sold ‘as is’ in the event that it needs to be sold. I will determine this question when I consider what orders (if any) are ultimately just and equitable in this case.
Property proceedings under Part VIII and the approach in Hickey and Stanford
Part VIII of the Act governs the scope of the Court’s power with respect to property and financial matters. The Court’s powers under ss 79(1) and 79(8)(b) — regarded as ‘very wide discretion[s]’ — must be exercised according to principled reason,[103] and are constrained by a number of factors to which the Court must direct itself.[104] To this end a typical approach is that set out in Hickey[105] and Stanford comprising four steps:
(1)identify the parties’ existing legal and equitable property interests, liabilities, and financial resources at the time of trial, and then determine whether it is just and equitable to adjust their interests pursuant to s 79(1);[106]
(2)consider the parties’ contributions under s 79(4)(a)-(c);
(3)consider the factors under s 79(4)(d)-(g) including, by virtue of s 79(4)(e), the ‘subjective considerations’ under s 75(2) insofar as they are relevant;[107] and then
(4)‘stand-back’ to consider the justice and equity of the actual terms of order proposed to be made.[108]
[103] Stanford & Stanford (2012) 247 CLR 108, 122 [41] (‘Stanford’).
[104] Mallet & Mallet (1984) 156 CLR 605, 608 (Gibbs CJ), noting that the ‘very wide discretion to make such order as [the Court] thinks fit’ is conferred only ‘when [the Court] is satisfied that it is just and equitable that an order should be made’, with his Honour further stating that ‘there are some broad principles to which the Court is required to give effect, and some circumstances which it is required to take into account’ in making an order, and with Dawson J (at 647) referring to the just and equitable requirement as the ‘overriding requirement’.
[105] Hickey & Hickey [2003] FamCA 395, [39] (‘Hickey’), noting the remarks of the Full Court in Norman & Norman [2010] FamCAFC 66, [60], at which their Honours state that ‘[i]t is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result’ and that ‘[f]or all its usefulness and merit [the four-step approach] merely illuminates the path to the ultimate result’. I also note the three ‘fundamental propositions’ set out in Stanford & Stanford (n 103), 120 [36], as alternative guidance for trial judges, ultimately towards the same objective as the approach in Hickey, namely to cover off on all necessary points and criteria in pt VIII.
[106] Stanford (n103), 120 [37], noting the explanatory remarks in Lotta & Lotta [2017] FamCA 50, [283]-[284], importantly that ‘[s]uch a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist’ and that ‘the Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act’.
[107] Lotta & Lotta (n 106) [289].
[108] Teal & Teal [2010] FamCAFC 120, [70], referring to Phillips v Phillips [2002] FamCA 350 in which, at [68], their Honours discuss the importance of considering the ‘real impact’ of an order to assess whether the result is just and equitable.
The High Court in Stanford insists that interference with legal and equitable interests of parties must adhere to principled reason.[109] The principles to which this Court may have reference include, but are not limited to, ‘those principles which the Act itself lays down’.[110] Justice and equity, with respect to property settlement, does not admit to an exhaustive definition and it is ‘not possible to chart its metes and bounds’.[111]
[109] Stanford (n 103), 122 [41].
[110] Ibid, citing R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 257.
[111] Stanford (n 103) 120 [36].
The principles contained within the Act also accommodate ‘stated or unstated assumptions and agreements about property interests during the continuance of the marriage’.[112] It is just and equitable, according to Stanford, for a Court to make a property settlement order if such agreements or assumptions with respect to marital property interests during the marriage have been brought to an end, which usually occurs with the end of the marriage.
[112] Ibid 122 [41].
The parties’ existing legal and equitable property interests
The process of ‘identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property’ is foundational to the entire inquiry under s 79.[113]
[113] Ibid 120 [37].
As stated, the parties' largely agreed the makeup of the balance sheet as set out at paragraph 19 of these Reasons. I have already determined that the Wife’s engagement ring will not be included.[114] The remaining question is whether there should be an add-back of $38,800 to the pool, being monies withdrawn by the Wife from the offset account and the amount of $20,000 she withdrew from her superannuation entitlement.
[114] Paragraph 26 of these reasons.
As stated earlier,[115] the Wife admits that she withdrew the sums from the mortgage account but claims she had little choice as she had insufficient funds available to her to meet her necessary expenses. Although there was no clear statement by her, I assume that the Wife makes the same claim in relation to the monies withdrawn from her superannuation.
[115] Paragraph 35 of these reasons.
In Omacini at 195, the Full Court confirmed that it is necessary to examine the use of monies prematurely withdrawn by a party:
Her Honour seems to be saying that the mere fact that a party has expended money realised from the disposition of assets that existed as at the date of separation, will result in that expenditure being added back “in the usual way” as a premature distribution of assets with nothing more. If that is what her Honour is saying, in our view, she is being unduly simplistic. In our opinion, it was a necessary requirement for her Honour to examine and make some assessment of the reasonableness or otherwise of the expenditure.
Similarly in GVC v HPC (1998) FamCA 143 at [46] the Full Court stated:
Whilst not seeking to place a fetter upon the exercise of discretion of a Trial Judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool, ought be the exception rather than the rule. The parties are are entitled to reasonably conduct their affairs post separation in a manner that is consistent with properly getting on with their lives.
In Marker v Marker, (1998) FamCA 42 the Full Court observed;
There seems to be no appropriate basis for notionally adding back monies that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law requires that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the Trial Judge.
The Wife explains her use of the monies in her affidavit:
In 2018 I was part way through having major dental work done when [Mr Massey] and I separated.
My cancer treatment has made my dental condition much worse and the likely cost of it will be$10,000.00. [Mr Massey] had agreed that I could take the money from the house account to have the work done when we did the refinance in 2018. I removed the funds that had been set aside for some dental work at separation. However, after we separated I prioritised paying that money towards paying living expenses and was not able to apply it towards the dental work. At the same time that I withdrew money for the dental work I also withdrew an additional redraw of $10,500.00 to pay off the Go Mastercard that had been used to purchase the furniture and renovation fittings, most of which had been taken by [Mr Massey]. Therefore the dental work remains outstanding.[116]
[116] Wife’s trial affidavit (n2) [154].
The Husband says that he carried out extensive works to the C Street, Suburb D property, using his skills, adding value to the property.[159] The Wife complains that the Husband’s works damaged the C Street, Suburb D property, and a significant amount of money will need to be spent to remedy the problems the Husband has created.[160] The Husband denied, under cross-examination, that he had damaged the building or reduced its value due to poor workmanship. He said that there were a number of works that he would like to complete, including much of that listed in the Wife’s affidavit.[161]
[159] Husband’s trial affidavit (n1) [110].
[160] Wife’s trial affidavit (n2) [155] – [159].
[161] Trial 3 August 2022 (n23): The Husband under cross examination stated he could quickly complete the works set out in the Wife’s trial affidavit [157(a)(h)(j)(l)(s).
The Wife’s affidavit annexes a Structural Engineers report[162] and a quote from Company AB to undertake the works, at a cost of $96,250.[163] The authors of the report and the quote were not called as witnesses. It is clear from both documents that the building requires significant works for it to be completed. Whether the remedial works result from poor workmanship is unclear. The Wife claims that she assisted the Husband with the renovations,[164] so presumably she shoulders some of the blame if that is the case. The evidence does not support a finding that the Husband (with or without the assistance of the Wife) has added value to the property with the works he has carried out. Nor does the evidence support the Wife’s claim that the Husband has damaged the property with poor workmanship. Given the Husband’s skills as a tradesman he is likely to have undertaken the lion’s share of the work that has been completed, even if he assisted other tradespeople. I accept that the Wife assisted where she could, and no doubt undertook other tasks, including domestic work, when the Husband was engaged in the renovation.
Section 79(4)(c) — contributions to the welfare of the family, including contributions as homemaker or parent
[162] Wife’s trial affidavit (n2) Annexure “L”.
[163] Ibid. Annexure “M”.
[164] Wife’s trial affidavit (n2) [159].
As stated earlier in paragraph 9 of these Reasons, the Husband concedes that the Wife carried out the majority of the domestic duties, although he carried out maintenance on the property including upkeep of the yard.[165]
[165] Ibid (n2) [2]; Husband’s trial affidavit (n1) [112].
The Wife’s homemaking contributions should not be given token weight. In valuing a home maker’s contribution Courts must recognise that this may be given weight under s 79(4)(c) and s 79(4)(b). In Dawes & Dawes [1989] FamCA 71 (‘Dawes’), the Full Court stated at [73]:
Although it is difficult, as it always is in such cases, to put one's finger squarely on what led his Honour to so undervalue the Wife's contribution, we think that one significant matter which did so was that he failed to give any weight to the fact that the Wife's performance of her role as homemaker and parent during the 30 years of cohabitation was not just a contribution under s.79(4)(c) (which he subsequently recognized to some degree) but was also a significant contribution under s.79(4)(b). That point was made by the Full Court (Nicholson, C.J., Murray and Buckley, JJ.) in In the Marriage of Napthali (1988) 13 Fam LR 146 at p 151, where their Honours said:-
“Turning now to the second ground of appeal, (which was that 'the Court erred in law in failing to take into account contributions made by the Wife during the marriage as homemaker and parent') it is apparent that nowhere in her Honour's judgment does she consider the contribution of the Wife to the business assets as a home-maker and parent. It is clear that the Wife did perform this role and nowhere in the evidence or in the submissions was any criticism directed at her capacities in this regard. It is to be noted that in Mallet v. Mallet [1984] HCA 21; (1984) 9 Fam LR 449; (1984) FLC 91-507, the High Court whilst rejecting the proposition of a presumption of equality, approved statements by this Court that the purpose of s 79(4)(b) is to give recognition to the position of the house wife who by her attention to the home and the children frees her Husband to earn income and acquire assets and also approved the proposition that the contribution made by the Wife as a home-maker and parent should be recognised not in a token way but in a substantial way: see Gibbs C.J. at Fam LR 451; FLC 79,111; Mason J. at Fam LR 461-2; FLC 119-20.”[166]
[166] Dawes & Dawes [1989] FamCA 71, [73] (Lindenmayer, Strauss and Cohen JJ).
The Wife’s predominant role as the homemaker was an important contribution during the parties’ marriage, and I weigh it according to its importance and the remarks in Dawes above.
I also accept that the Husband undertook some domestic tasks, particularly maintaining the outside areas of the properties the parties' lived in, including cleaning the pool at the C Street, Suburb D property. He also cooked, undertook some of the cleaning and assisted with shopping.
As detailed at Paragraph 63 of these Reason’s, the Wife claims that all of her contributions were made more arduous because of the Husband’s family violence. The Husband denied all of the Wife’s allegations and maintained that it was he who was the victim of family violence, evidenced by the Wife’s assault on him when she stabbed him with a fork.[167] The Husband argued that the Wife has an aggressive nature, referring to her prior convictions, exhibited as “H3”. That document shows that the Wife has convictions in 1993 for malicious damage, offensive conduct, assaulting police, and resist police — all resulting in her being fined. I do not accept, however, that one incident occurring 30 years ago is corroborative of the Husband’s claim that the Wife has an aggressive nature.
[167] Husband’s trial affidavit (n1) [38] – [57].
The Wife’s allegations, as set out in her affidavit, are detailed, but uncorroborated. McEvoy J considered approach to evaluating such evidence in Stamatou & Stamatou [2022] FedCFamC1F 241 at 180 & 181:
Before turning to the Wife’s evidence in this respect, it is desirable to say something about the corroboration of family violence. It is well settled that a party does not require their evidence of family violence to be corroborated before such evidence can be accepted. Given the tendency of domestic violence to occur in circumstances where there are no witnesses other than the parties to the marriage and perhaps their children, this must necessarily be so: see Keating & Keating [2019] FamCAFC 46; (2019) FLC 93-894 at [42] (Ainslie-Wallace and Ryan JJ) (“Keating”); Hendy & Penningh [2018] FamCAFC 257; (2018) FLC 93-879 at [72] (Ainslie-Wallace, Ryan & Austin JJ); Amador & Amador [2009] FamCAFC 196; (2009) 43 Fam LR 268 at [79] (May, Coleman & Le Poer Trench JJ) (“Amador”).
Whilst as a general principle it is important to identify a core consistency in the evidence of an alleged victim of family violence rather than concentrating on supposed inconsistencies in the evidence, this does not permit a Court to ignore or otherwise dismiss inconsistencies in that evidence: Keating at [62] (Austin J); Zuen & Lhao [2020] FamCAFC 84 at [22]- [24] (Ryan, Aldridge and Stevenson JJ) (“Zuen & Lhao”). However the reference to the importance of identifying a core consistency, while important in cases involving family violence, must not obscure the reality that there cannot be a finding of family violence otherwise than in accordance with s 140 of the Evidence Act and having regard to all relevant matters: see Amador at [86]-[93]. Where allegations of family violence are made it is necessary for the Court to make findings where the evidence enables that to be done: see Zuen & Lhao at [24].
If there is a core consistency in the evidence, it is that the parties have a very poor view of each other and that their relationship was often volatile, as demonstrated by the stabbing incident. Although the parties' poor relationship would have increasingly weighed each of them down, there is insufficient evidence for me to be satisfied that either parties' contributions were made more arduous by the others conduct.
Conclusion regarding the parties’ contributions to the non-superannuation assets
Both parties made significant financial and non-financial contributions during a long relationship. Unfortunately, neither was able to give full recognition to the others hard work. The Husband brought debt into the relationship in 2012 and the Wife added to the parties' debt when she failed to meet the mortgage payments and council rates post separation. The Wife paid the deposit on the C Street, Suburb D property, whilst the Husband borrowed money to do so, with that money paid back during the relationship. The Husband earned more than the Wife but the Wife undertook most of the domestic work. Both parties' were engaged in the renovation of the C Street, Suburb D property, but the Husband has the necessary skills to undertake the greater part of that work. Adopting a broad-brush approach, I consider that the Husband made slightly greater contributions during the ten years the parties' actually lived together. I assess those contributions 51/49% in the Husband’s favour to a net pool valued at $452,297. In dollar terms, at this stage of my deliberation, the parties' entitlements to the net non-superannuation pool is $230,671.47 in favour of the Husband and $221,625.53 to the Wife. That is a differential of $9,045.94. I will now consider whether there should be any adjustment to this outcome by virtue of matters set out in s 79(4)(d)-(g).
Section 79(4)(d)-(g), including s 75(2) — other factors
Section 79(4)(d) – the effect of any proposed order upon the earning capacity of either party to the marriage
The Full Court in Beck & Beck (1983) FLC 91-318 defined ‘earning capacity’ for the purposes of s 75(2)(k), and applicable to the Act generally, as: ‘a capacity to obtain income which could be used to provide maintenance … and not merely as current income from personal exertion or from the use of personal skills.’[168]
[168] Beck & Beck (1983) FLC 91-318, 78,166.
Neither party's earning capacity will be impacted by any order made.
Section 79(4)(e) – the matters referred to in subsection 75(2) so far as they are relevant
Section 75(2)(a) — the age and state of health of each of the parties
The Husband is aged 52 and the Wife is 48. As stated earlier in these Reasons at paragraphs 17 and 18, both claim that they have medical conditions that may impact their ability to continue earning their current incomes.
The Wife states that her current conditions will increase as she ages over time. The Wife annexed documentation[169] evidencing her osteoporosis in 2021 and cancer surgery in 2019 and asserts that she takes strong pain killers, corticosteroids, anti-nausea medication and antidepressants[170]. The Wife raises concerns in her affidavit about the identification of a medical condition which may be caused by either a return of the cancer or worsening of the osteoporosis.[171] This uncertainty around the Wife’s health and potential deterioration over time, although not documented, may affect her earning capacity in the future. Unfortunately, neither party produced any relevant medical evidence to confirm their fears that their ability to continue earning their current income may be reduced in the future. The Wife must have a level of optimism regarding her ability to earn income, as she proposes that she retain the C Street, Suburb D property with its mortgage, together with other credit card debt. The Husband continues to receive 80% of his income while on sick leave and there is no clear evidence that such payments will cease. I find that both parties' will continue to work and receive their current incomes, although the evidence of the Wife’s previous poor health suggests that her working future is less certain than the Husband’s.
Section 75(2)(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
[169] Wife’s trial affidavit (n2) annexure “I” & “J”.
[170] Ibid [150].
[171] Ibid [153].
In Clauson & Clauson (1995) FLC 92-595, the Full Court stated: ‘It has long been recognised that in most cases the most valuable “asset” which a party can take out of the marriage is a substantial, reliable, income-earning capacity: see Best and Best (1993) FLC 92-418 at 80,295.’[172] Their Honours further remarked that:
In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails: see Langford (16 January, 1995, Full Court, not reported).[173]
[172] Clauson & Clauson (1995) FLC 92-595, 81,911.
[173] Ibid.
As stated, I am satisfied that each party will continue to receive their current incomes. The Husband’s income is twice that of the Wife’s, even at 80% of his true wage.[174] The Wife says her weekly expenditure far exceeds her income whilst the Husband has a surplus of over $600 per week.[175] The Husband also claims that he pays his current Wife $300 per week in rent — whether it is truly a rent or his contribution to their outgoings is unclear. The Husband has also a significant financial resource in the inheritance of $140,000 recently received from his grandmother’s estate.
[174] Mr Massey, Amended Financial statement dated 14 July 2022 (‘Husband’s financial statement’): states that the Husband’s total average weekly income is $1639.50; Ms Duval, Financial Statement dated 15 July 2022 (‘Wife’s financial statement’): states that the Wife’s average weekly income is $827.
[175] Husband’s financial statement (n174): Husband’s total personal expenditure is 4992.93 per week. Wife’s financial statement (n174): The Wife’s total expenditure is $1, 790 per week which she states ‘is higher than usual because of my recent use of my credit card.’
The Husband is in a financially superior position compared to that of the Wife.
Section 75(2)(c) — whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
This is not a relevant factor.
Section 75(2)(d) — commitments of each of the parties necessary to enable them to support themselves and a child or another person that the party has a duty to maintain
As stated the Husband’s income exceeds his expenses, whilst the Wife’s expenses currently exceed her income.
Section 75(2)(e) — the responsibilities of either party to support any other person
Neither party has a responsibility to support any other person.
Section 75(2)(f) —the eligibility of either party for a pension, allowance or benefit under any law or superannuation fund, and the rate of any such pension, allowance or benefit being paid to either party
This is not a relevant consideration.
Section 75(2)(g) — a standard of living that in all the circumstances is reasonable
The Wife claims that she has had difficulty meeting her expenses from her income post separation. She says that this led her to withdraw monies from the parties' joint funds, withdraw monies from her superannuation and miss regular mortgage and rate payments. The Wife maintains, however, that she hopes to refinance the mortgage and keep the C Street, Suburb D property. She also hopes that her expenses will, in time, become more manageable.[176] Both parties should be able to maintain a reasonable standard of living as a result of any orders made.
Section 75(2)(h) — the extent to which a party’s earning capacity could be increased by enabling them to undertake a course of education or training or to establish themselves in a business or otherwise to obtain an adequate income
[176] Wife’s financial statement (n174) 9.
This is not a relevant consideration.
Section 75(2)(j) — the extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party
I have already detailed the extensive contributions of both parties' to the acquisition and maintenance of the assets set out in “J1”. Both parties' contributions, over the relationship, have benefited each of them.
Section 75(2)(k) — the duration of the marriage and the extent to which it has affected the earning capacity of each party
There is no evidence that the duration of the relationship has impacted the earning capacity of either party.
Section 75(2)(l) — the need to protect a party who wished to continue that party’s role as a parent
This is not a relevant consideration.
Section 75(2)(m) — if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
The Wife has not re-partnered. The Husband has remarried and is living in his Wife’s home. He says that he pays his Wife a rent each week of $300. The Husband’s evidence is that he has surplus funds available to him after meeting his reasonable expenses whilst the Wife is in deficit.
Section 75(2)(n) — the terms of any order made or proposed to be made under section 79 in relation to the property of the parties
I have already found that the parties made substantial contributions to the acquisition and maintenance of the non-superannuation assets of their relationship. I have determined that the Husbands’ contributions were slightly greater than the Wife’s, and that he is entitled to net assets valued at $230,671.47 and the Wife to assets valued at $221,625.53 — a differential of $9,045.94.
Section 75(2)(o) — any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account
Both parties' argue that there are a number of matters that I should take into account under this section.
During the marriage, the Husband’s youngest child Mr G, lived both with the parties at the C Street, Suburb D property and with his mother. Ms F lived with her mother and grandmother but spent time with the Husband and Wife.[177]
[177] Wife’s trial affidavit (n2) [75]: ‘In about 2011 or 2012 Ms F moved in with her grandmother rather than living with her mother or father.’
Robb & Robb [1994] FamCA 136 contains the following remarks from the Full Court at [64] – [68]:
… just as the Husband's contribution to the welfare (including the financial support) of the Wife's children of her former marriage, for the reasons given by his Honour in the passage from his judgment last quoted (with which we agree), could not be taken into account as a contribution by him under s.79(4)(c), so too the Wife's contribution to the welfare of those children could not be taken into account on that basis. However, as his Honour did (in our view correctly) take the Husband's contribution to those children into account under s.75(2)(o), the question arises whether he should have taken the Wife's contribution to the welfare of those children into account also, under that paragraph of s.75(2). This raises the question whether the fact that a party to a marriage contributes during that marriage to the welfare of his or her own children of a prior marriage is a fact or circumstance which the justice of the case requires to be taken into account in that party's favour, at least, in circumstances where the other party's contribution to that welfare has been taken into account as a fact or circumstance in that party's favour.
In considering whether the justice of a case requires some act done by a party to be taken into account under s.75(2)(o), the Court should, we think, have regard primarily to the existence or otherwise of any legal obligations, as between the parties, in relation to the doing of that act, and also, perhaps, to ordinary notions of justice and equity between the parties.
In this case, the Wife had a legal duty to maintain the children of her prior marriage, which duty had primacy over the duty of any other person, other than the children's father, to so maintain them: ss.66A and 66B of the Act. The Husband, on the other hand, had no legal duty to maintain these children at any time during the marriage because, by s.66G, a step-parent has such a duty only if he or she is a guardian of the child, or has custody of the child by an order of a Court, or a Court having jurisdiction under Part VII of the Act by order determines that it is proper for the step-parent to have that duty. None of those pre-conditions existed in this case.
Accordingly, in contributing to the support of these children the Wife was merely honouring a legal obligation which she owed to the children, whilst the Husband, in making his contribution, was acting essentially as a volunteer assisting the Wife in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the Husband's contribution to be taken into account under s 75(2)(o), the same cannot be said of the Wife's contribution. In making that contribution the Wife was in no way discharging or assisting to discharge any legal obligation of the Husband.
Turning, then, to ordinary notions of justice and equity, we are of the view that such notions do not call for any allowance to be made in the Wife's favour, in the property proceedings between the Husband and Wife, because she honoured her legal obligation to maintain her own children of a prior marriage. We believe that a failure to make such an allowance would not offend the ordinary reasonable man or woman's notions of justice.[178]
[178] Robb & Robb [1994] FamCA 136, [64]-[68].
The Wife did not have a legal duty to care for Ms F or Mr G at any time during the marriage. She says that the children were aged 8 and 9 when she met the Husband,[179] and that she contributed to the children’s care, particularly via domestic duties, paying for dinners, clothing, necessities and school fees.[180] She says that she continued to contribute to Mr G’s care when he came to live with the parties, but the Husband states that Mr G paid her board directly. The Husband did not deny the Wife’s role in caring and providing for his children during the relationship, but disputed the extent of that care. The children were very young when the relationship started and I accept that the Wife provided direct and indirect financial support, assistance and care for Ms F and Mr G.
[179] Wife’s trial affidavit (n2) [7].
[180] Ibid [28] – [32].
The Wife also argues that the Husband’s gambling and drinking should be taken into account under this section. The Husband denies excessive gambling or drinking. The Wife claims that the Husband ‘regularly withdrew large amounts of cash from ATM’s located inside clubs and pubs’,[181] but she did not produce evidence of such withdrawals and the issue was not greatly explored during cross-examination. The evidence does not establish to the requisite standard that the Husband engaged in excessive gambling or drinking resulting in the parties' resources being wasted.
[181] Ibid [113].
The Husband argues that the Wife’s expenditure on her horses should be regarded as waste. I do not accept that argument. The Wife accepts that she spent monies each month to feed her horses but her horses were an asset she brought into the relationship. The Husband may not have been happy with the Wife’s horse-hobby, but he cannot claim that he was unaware of the Wife’s passion in this regard when he commenced the relationship. Indeed, he built pergolas and assisted the Wife, albeit reluctantly, from time to time.[182] The Wife also sold some horses and I presume those funds injected into the relationship.[183] The Wife’s expenditure of $500-$600 per month on horse feed was not excessive in the circumstances of the parties' relationship.[184]
[182] Husband’s trial affidavit (n1) [30].
[183] Wife’s affidavit (n2) [116].
[184] Husband’s trial affidavit (n1) [37]: Stated the Wife spent $500 - $600 per month on feed for the horses.
I have will, however, under this section, have regard to the fact that the Wife withdrew and spent $38,800, from the mortgage offset account. I accept that the Wife’s financial circumstances were challenging at that time, and that a proportion of the funds may have been spent reasonably, but not all of the funds were accounted for and the Wife did not fully explain their use. They were joint funds, unilaterally spent, and I will take their retention by the Wife into account.
Section 79(4)(f) – any order made under this Act affecting a party to the marriage or a child of the marriage
This is not a relevant consideration.
Section 79(4)(g) – 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
This is not a relevant consideration.
Conclusion regarding the matters referred to in s 79(4)(d)-(g)
Taking all of these matters into account and in particular the disparity in the parties' incomes and resources, I consider there should be an adjustment in the Wife’s favour of 10% of the parties' non-superannuation assets.
Conclusion regarding the parties' non-superannuation assets
I have determined that the Wife will receive 59% of the non-superannuation assets and the Husband 41%. This results in the Wife retaining assets valued at $266,855.23 and the Husband $185.441.77 — a differential of $81,413.46.
The Wife has in her possession assets with a net value of $6,895. The Husband has assets valued at $7,555. The Wife hopes to retain the C Street, Suburb D property and re-finance its mortgage. The Wife will need to pay the Husband the sum of $177,886.77 in order to achieve this outcome. In the event that the Wife cannot refinance the mortgage and pay the Husband the amount he is due, the C Street, Suburb D property will be sold, with the proceeds divided to create a 59/41 division of the non-superannuation assets.
The parties' superannuation assets
The parties' superannuation assets are jointly valued at $345,781. The Husband’s fund is valued at $245,810 and the Wife’s at $99,971. The Wife seeks 65% of this pool resulting in her receiving superannuation worth $224,758. To achieve this outcome she will need to receive a payment of $124,786.65 from the Husband’s entitlement.
The Husband seeks an equal division of the parties' superannuation interests they held at the date of separation. I have already determined that I will consider the parties' interests as at the date of trial.[185] This will result in each party receiving superannuation of $172,890.50. To achieve this there will be a payment to the Wife from his entitlement of $72, 919.50.
[185] See paragraph 85 of these reasons.
Both parties' seek a split to the Wife of an amount from the Husband’s superannuation entitlement.[186] The Husband has a larger superannuation entitlement than the Wife, which is largely the result of his higher income received during the relationship, to which both parties' made significant contributions. It is just and equitable for there to be a property order in relation to the parties' superannuation interests.
[186] This was the alternative position of the Wife.
Section 79(4)(a)-(c) — contributions
The Husband held $7,603 in superannuation at the commencement of the relationship. There is no evidence of the Wife’s entitlement at that time. The parties' contributed to their superannuation funds throughout their relationship and the Husband made significant contributions to his superannuation post separation. As found, both parties' made significant financial and non-financial contributions during the relationship and I note the Wife’s greater homemaking contributions.
Given the Husband’s significant post separation contributions, I find that the Husband’s contributions to the parties' superannuation assets were greater than the Wife’s. I assess their contributions to be 62/38% favouring the Husband — resulting in the Wife having an entitlement to $131,396.78 of the parties' superannuation assets and the Husband $214,384.22 — a differential of $82,987.44
Section 79(4)(d)-(g), including s 75(2) — other factors
I repeat my findings at paragraphs 115 - 141 of these Reasons, so far as they are relevant to the parties' superannuation assets. I note the Husband’s more secure financial circumstances including his greater ability to build his superannuation entitlement over time because of his greater income. I also take into account, pursuant to Section 75(2)(j), that the Wife did not contribute to the Husband’s accumulation of superannuation following separation, nor did she build her own. I also take into account the Wife’s unexplained withdrawal of $20,000 from her superannuation fund in 2020. I assess that there should be 7.5% adjustment in favour of the Wife for these factors.
Conclusion regarding the parties' superannuation assets
I have determined that the Husband should receive 54.5% of the parties' superannuation assets and the Wife 45.5%. This results in the Husband being entitled to $188,450.65 of the superannuation assets and the Wife $ 157,330.35— a differential of $31,120.29. This requires a split from the Husband’s fund to the Wife’s fund of $57,359.35. I note that the trustee of the Husband’s superannuation fund has been provided with notice of the Husband’s proposed splitting order, and there is no objection to the form of the order set out at the commencement of these Reasons.
What is the just and equitable exercise of discretion?
After assessing contributions and other factors this Court must consider whether, in light of those assessments and the actual property to be divided, the proposed exercise of the discretion under s 79 is just and equitable. In Clauson, the Full Court said the following:
… that exercise is not done in isolation; it is done against the background of conclusions already arrived at on contributions, the consequence of which will be in some cases to intrude into the s. 75(2) exercise because of the dimension of the former conclusion and the total pool.
It is largely for that reason that it is ultimately necessary to stand back from the process and reach a conclusion which appears overall to be a just and equitable exercise of the discretion.[187]
[187] Clauson & Clauson (n 171), 81,911-81,912.
The Wife is entitled to receive net non-superannuation assets valued at $266,855.23 and the Husband $185.441.77 — a differential of $81,413.46. The Husband will receive $31,120.30 more than the Wife of the parties' superannuation assets. Standing back, I am satisfied that my determination as to the division of the parties' assets, results in a just and equitable outcome.
The remaining question is whether the Court should allow the Husband to complete works on the C Street, Suburb D property. I have viewed the photographs of the Husband’s previous work.[188] I have no expertise to determine if those photographs demonstrate good work or otherwise. The Structural Engineers report annexed to the Wife’s affidavit highlights that further work needs to be completed on the property. Given the uncertain state of the evidence regarding the quality of the Husband’s previous work on the property, and the potential for the Husband’s presence at the property to cause conflict, I am not prepared to allow the Husband to complete works as he requests. If the Wife retains the property she can undertake those works at her own cost. If the property has to be sold, the parties' may be able to agree upon the Husband, or some other person, completing works prior to sale as recommended by the selling agent. That may be a sensible approach, potentially saving the parties' a significant amount as well as improving the presentation of the property for sale. There will, however, need to be agreement and given the poor state of the parties' relationship, I fear that such agreement will not be possible.
[188] Exhibit “H4”.
As stated, the results of my determinations will be incorporated into the Joint Minutes of Orders Sought by the parties.[189] I have made some amendments to the paragraphs relating to the sale of the C Street, Suburb D property, to confirm the net assets that each party will retain in order to calculate the percentage division of the sale proceeds for each party. Additionally, the order will state that the Wife will be solely responsible for the costs associated with withdrawing the caveat currently registered against the title of the C Street, Suburb D property.
[189] Exhibit ‘J1’.
I certify that the preceding one hundred and fifty-four (154) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull. Associate:
Dated: 9 February 2023
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