Mayne and Mayne
[2009] FMCAfam 559
•5 June 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MAYNE & MAYNE | [2009] FMCAfam 559 |
| FAMILY LAW – Property – long marriage – contributions - non-disclosure – waste – just and equitable order. |
| Family Law Act 1975, ss.75(2), (2)(b), (k), (o), 79 |
| Barker v Barker (2007) Fam LR 650 In the Marriage of Black & Kellner (1992) 15 Fam LR 343 In the Marriage of Bonnici (1991) 105 FLR 102 In the Marriage of Briese (1985) 10 Fam LR 642 In the Marriage of Burke (1992) 16 Fam LR 324 In the Marriage of Chang & Su (2002) 29 Fam LR 406 Ferrero and Ferrero (1993) FLC¶92-335 In the Marriage of Figgins (2002) 29 Fam LR 544 Foda v Foda (1997) FLC ¶92-753 Gould & Gould (2007) FLC ¶93-333 Hickey and Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143 Jenkins v Livesey [1985] AC 424 (also Livesey v Jenkins [1985] 1All ER 665) Kannis & Kannis (2003) FLC ¶93-135 Kennon & Kennon (1997) FLC ¶92-757 Kowaliw & Kowaliw (1981) FLC ¶91-092 Leggero v Jagger (2008) 38 Fam LR 561 Luciano & Luciano [2000] FamCA 401 Mezzacappa & Mezzacappa (1987) FLC ¶91-853 Mitchell & Mitchell (1995) FLC ¶92-601 AJO v GRO (2005) 33 Fam LR 134 Pierce v Pierce (1999) FLC ¶92-844 Powell v Supresencia (2003) 30 Fam LR 463 PS & MA [2005] FMCAfam 486 Russell v Russell (1999) FLC ¶92-877 Schirmer v Sharpe (2005) 32 Fam LR 575 SDJ v FWR [2008] QSC 256 (24th October 2008) Townsend & Townsend (1995) FLC ¶92-569 In the Marriage of Weir (1992) 16 Fam LR 154 Woollams & Woollams (2004) FLC ¶93-195 Worsnop v Worsnop (No 2) (2008) 39 Fam LR 202 Zyk & Zyk (1995) FLC ¶92-644 |
| Applicant: | MS MAYNE |
| Respondent: | MR MAYNE |
| File Number: | CAC 114 of 2007 |
| Judgment of: | Neville FM |
| Hearing dates: | 13 & 14 October 2008 |
| Date of Last Submission: | 27 May 2009 |
| Delivered at: | Canberra |
| Delivered on: | 5 June 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Watkins |
| Solicitors for the Applicant: | Strong Law Pty Ltd (formerly Lessli Strong & Associates) |
| Counsel for the Respondent: | Mr Nash |
| Solicitors for the Respondent: | Farrar Gesini & Dunn |
ORDERS
The Wife pay to the Husband the sum of $230,369.26 (“The Payment”) within 60 days of the date of these Orders (“The Due Date”).
If the whole of the Payment has not been made by the Due Date:-
(a)The Wife do such things necessary to transfer to the Husband at the expense of the Husband a portion of her interest in the Property known as “Property A” at Property A, New South Wales being the whole of the land contained in the Certificate of Title Lots [omitted] Deposited Plan [omitted] and Lot [omitted] Deposited Plan [omitted] (“Property A”).
(i)That the portion referred to in Order (2)(a) be equivalent in value to the Payment as referred to in Order (1).
(ii)In the event that there is a dispute as to the value of the portion that Colin Davies & Associates be appointed as a joint valuer.
If the Wife has not transferred a portion of her interest in “Property A” within 42 days of Order 2 coming into effect:-
(a)The Wife shall, in addition to the Payment, pay to the Husband interest on the payment or the amount outstanding from time to time at the rate prescribed by the Family Law Rules to be calculated from the Due Date to the date of Payment.
(b)The Wife shall do all things necessary to effect the sale of the Properties known as “Property A” situated at and known as Property A in the state of New South Wales and “Property S” situated at and known as Property S in the state of New South Wales.
(c)That the Husband and Wife do all things necessary to cause the proceeds of the sale of the Property to be distributed as follows:-
(i)To pay all costs, commissions and expenses of the sale.
(ii)To pay all the usual rates adjustments.
(iii)To pay the amount required to discharge any encumbrances secured over the property.
(iv)To pay so much of the Payment as is then outstanding together with interest in accordance with Order (3)(a) to the Husband.
(v)To pay the balance to the Wife.
(d)Liberty be reserved to either party to apply to the Court on seven days’ notice to the other with respect to the terms and conditions of the sale.
If either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Family Court at Canberra be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such document in the name of such party.
The furniture and chattels in the home situated on the “Property S” property and the farm machinery, tools and stock situated on that property or the “Property A” property be divided by agreement between the parties or, in default of agreement, either party have liberty to apply on 7 days notice to the other about a method of dividing those furniture and chattels.
Unless otherwise specified in these Orders, each party will be the sole legal and beneficial owner of the following:-
(a)Their superannuation entitlements;
(b)All bank accounts or accounts with other financial institutions in their own name;
(c)Insurance policies in which they are named the beneficiary; and
(d)All other property (including choses-in-action) in the possession of such party at the date of these Orders.
Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
Pursuant to rule 21.02 of the Federal Magistrates Court Rules 2001, the parties may make an application for an order for costs within 28 days of the date of these Orders.
Subject to any application made pursuant to Order 8:-
(a)the Wife pay the Husband’s costs, either agreed or taxed, in relation to the following Court events:-
(i)22nd November 2007;
(ii)5th March 2008;
(iii)25th March 2008; and
(iv)30th April 2008.
(b)The Wife pay $500.00 in relation to the Husband’s costs of the application to re-open.
(c)Otherwise, each party pay their own costs.
IT IS NOTED that publication of this judgment under the pseudonym Mayne & Mayne is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 114 of 2007
| MS MAYNE |
Applicant
And
| MR MAYNE |
Respondent
REASONS FOR JUDGMENT
A. Introduction
The parties to these property proceedings were married in June 1984 and were divorced – after contested proceedings – in July 2007. There are two adult children of this 23 year marriage, the eldest of whom will be 25 this year and who is in the final years of an [omitted] degree. His sister is 22 years’ old. The parties are seemingly in good health; certainly no health issue was raised in the course of the proceedings.
The Applicant wife is aged 49 years, and the Respondent husband,
50 years. Ms Mayne describes her occupation as “retail assistant”, while Mr Mayne works as an administration officer in the NSW public service. He has previously worked as a [omitted].
As already stated, this was a long marriage. Subject to what is said below, sensibly, but not without some difficulty, in the course of the trial the parties agreed on the constitution of the asset pool.
The determination of what is the “just and equitable” distribution of the property of the parties under s.79 of the Family Law Act 1975 (“the Act”) revolves around a number of particular, related issues. They are: (i) contribution; (ii) the adequacy of Ms Mayne’s disclosure of documents and the consequences thereof; and (iii) Ms Mayne’s failure adequately and fully to account for the use of significant funds that she acquired via inheritances during the course of the marriage. In this regard, there needs to be consideration of whether her actions (outlined later in these reasons) constitute in some shape or form “waste” as judicially understood in cases that traditionally begin with the comments of Baker J in Kowaliw & Kowaliw.[1]
[1] (1981) FLC¶91-092.
Even at this early stage it should be noted that the issues of disclosure and accountability in relation to the inheritance funds on Ms Mayne’s part occupied significant time during the hearing. Disclosure itself also occupied almost all of the many pre-trial court events and orders made on those occasions, beginning in November 2007, until the trial itself.
Application to Re-open: “Disclosure” was also at the heart of a very recent application by Mr Mayne to re-open. I granted the application: both parties filed written submissions.
Stated briefly, the application concerned Mr Mayne discovering that Ms Mayne was now working at [Government Agency omitted] in [C]. In the course of the application to re-open, Ms Mayne’s short-term contract of employment was tendered. It is a contract only for six months. There is and can be no guarantee that it will be extended.
The respective arguments on that latest development can be summarised as follows. For Ms Mayne’s part, she contends that because the length of the contract is so short, and because there is no guarantee that it will be renewed or extended, its relevance and import to the final result is marginal, at best, and otherwise should be discounted.
For his part, Mr Mayne argues that until final judgment, there remains a duty of full and frank disclosure. That is an unarguable proposition. Secondly, in his view, it also shows not only that Ms Mayne is earning more income than she was at the time of the trial in late 2008, but also that she has the capacity to continue to do so now and in the future. For these reasons, Mr Mayne submitted that a greater adjustment in his favour should be made.[2]
[2] Unsurprisingly, Mr Mayne also sought costs of the application to re-open. He did so because (a) of Ms Mayne’s [continuing] breach of her duty of disclosure, and (b) Mr Mayne’s offer, before the application was filed, for both parties to provide the contract of employment in question together with any written submissions. In such circumstances, in my view, some order for costs should be made in Mr Mayne’s favour. This is reflected in the orders.
In my view, the non-disclosure is of a piece with other similar non-disclosures detailed later in these reasons. However, while material in updating the employment situation of Ms Mayne, I do not think that its weight or impact greatly or significantly affects the ultimate result.
As already mentioned, in addition to the specific issues, the other more usually encountered matter of particular relevance to these proceedings relates to the competing claims regarding contributions (financial and non-financial). In a number of respects, the reality here is not too far removed from the Full Court’s description in Ferrero and Ferrero:
The task of evaluating and comparing the parties’ respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a “level playing field.”[3]
In this case, there is no dispute that the applicant wife, Ms Mayne, was the `homemaker’, and that Mr Mayne was the `bread-winner.’
[3] (1993) FLC¶92-335 at p.79,572.
Another issue raised, but which does not require a large amount of judicial attention, relates to allegations of “violence” against Mr Mayne and hence whether any “Kennon-type”[4] considerations arise. As Counsel for Ms Mayne rightly submitted, in this respect – as with almost all others – the evidence here was a case of “she said – he said.” In the absence of any credible evidence to support her claims, I do not consider there to be any basis for the Court to make any findings, let alone any orders, in relation to any `Kennon – type’ considerations in this matter.
[4] See Kennon & Kennon (1997) FLC ¶92-757.
After setting out the competing orders sought by each of the parties, I will deal – in order – with (a) the evidence, (b) the issues of
Ms Mayne’s [in]adequate disclosure and her accountability for use of inheritance funds during the course of the marriage and afterwards, and finally (c) a consideration and application of the “four steps.”[5]
[5] The “four steps” are set out in many places, perhaps most readily in Hickey and Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC ¶93-143 at p.78,386. See also AJO v GRO (2005) 33 Fam LR 134 at p.147 [46]. Also reported in (2005) FLC ¶93-218 at p.79,619.
B. Orders sought
Orders Sought by the Applicant Wife: Ms Mayne seeks the following orders be made by way of final property settlement:-
a)That she be declared the owner of and the Husband to have no claim upon the properties at “Property S” situated at Property S west of [C], being Lots [omitted] in DP[omitted]; and “Property A” at Property A, via [C], being Lots 2[omitted] in DP[omitted] and Lot [omitted] in DP[omitted] (the “properties”).
b)That the Husband forthwith sign all documents and do all things to remove, at the Husband’s cost, the caveats lodged on the said properties.
c)That In accordance with section 90MT(1)(a) of the Family Law Act 1975 (the Act), whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of Mr Mayne from his interest in the SAS Trustee Corporation (the SAS), Ms Mayne is entitled to be paid (by the Trustee of the SAS) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $60,000.00 and there is a corresponding reduction in the entitlement Mr Mayne would have had but for these Orders.
d)The operative time for Order 3 is four business days after the service of the final orders on the Trustee.
e)That pursuant to section 90MZD of the Act the Trustee of SAS Trustee Corporation be accorded procedural fairness and have liberty to relist within 28 days of receiving these Orders if it wishes to object to Orders 3 and 4.
f)That the Wife be declared the owner of and the Husband to have no claim upon:
i)All other items of personal property, chattels and motor vehicles possessed by her;
ii)All deposits in bank accounts and financial institutions registered in her name including but not limited to superannuation funds;
iii)All items of personal possession possessed by the Wife.
g)That the Husband be declared the owner of and the Wife to have no claim upon:
i)All other items of personal property, chattels and motor vehicles possessed by him;
ii)All deposits in bank accounts and financial institutions registered in her name including but not limited to superannuation funds, with the exception of the Husband’s superannuation in State Super as set out above;
iii)All items of personal possession possessed by the Husband.
Orders sought by the Respondent Husband: Mr Mayne seeks the following property orders:-
a)That the Wife pay to the Husband the sum of $325,000 (“The Payment”) within 42 days of the date of these Orders (“The Due Date”).
b)That if the whole of the Payment has not been made by the Due Date:
i)The Wife shall, in addition to the payment, pay to the Husband interest on the payment or the amount outstanding from time to time at the rate prescribed by the Family Law Rules to be calculated from the Due Date to the date of Payment.
ii)The Wife do all things necessary to effect the sale of the Properties known as “Property A” situated at and known as Property A in the state of New South Wales and “Property S” situated at and known as Property S in the state of New South Wales.
c)That the Husband and Wife do all things necessary to cause the proceeds of the sale of the Property to be distributed as follows:-
i)To pay all costs, commissions and expenses of the sale.
ii)To pay all the usual rates adjustments.
iii)To pay the amount required to discharge any encumbrances secured over the property.
iv)To pay so much of the Payment as is then outstanding together with interest in accordance with Order b) i) to the Husband.
v)To pay the balance to the Wife.
d)That liberty be reserved to either party to apply to the Court on seven days’ notice to the other with respect to the terms and conditions of the sale.
e)That if either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Family Court at Canberra be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such document in the name of such party.
f)That the furniture and chattels in the home situated on the “Property S” property and the farm machinery, tools and stock situated on that property or the “Property A” property be divided by agreement between the parties or, in default of agreement, either party have liberty to apply on 7 days notice to the other about a method of dividing those furniture and chattels.
g)That the Husband be as against the Wife the sole legal and beneficial owner of:-
i)His State Super Fund entitlements.
ii)All bank accounts or accounts with other financial institutions in his name.
h)That unless otherwise specified in these orders:-
i)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party at the date of these orders.
ii)Moneys standing to the credit of the parties in any joint bank accounts are to become the property of the Husband.
iii)Each party forego any claims he or she may have to any superannuation benefits belonging to or earned by the other.
iv)Insurance policies remain the sole property of the beneficiary named therein.
v)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
And in the alternative, the Husband seeks the following:-
a)The Wife do such things necessary to transfer to the Husband at the expense of the Husband a portion of her interest in the Property known as “Property A”, New South Wales being the whole of the land contained in the Certificate of Title Lot [omitted] Deposited Plan [omitted]; Lot [omitted] Deposited Plan [omitted]; Lot [omitted] Deposited Plan [omitted]; Lot [omitted] Deposited Plan [omitted]; Lot [omitted] Deposited Plan [omitted] (“Property A”).
b)That the portion referred to in Order 4 be equivalent in value to the Payment as referred to in Order 1.
c)In the event that there is a dispute as to the value of the portion that Colin Davies & Associates be appointed as a joint valuer.
C. The evidence
Ms Mayne’s Evidence
: Ms Mayne’s evidence revolved around four issues: (a) her acknowledgment of, and somewhat limited explanations for, the extensive attempts to have her disclose documents in support of her application; (b) her extended, and in quite a number of instances, very late explanations of her expenditure of her inheritances, usually but not always in the context of her financial contributions to the marriage; (c) her acknowledgment that she had kept in her possession, and in large measure had prevented Mr Mayne accessing, a very large number of documents belonging to him; (d) her evidence that
Mr Mayne’s financial and non-financial contributions to matrimonial property were quite minimal during the course of the marriage. I will deal with each of these matters as summarily as possible in the order they are listed here under the following headings: Disclosure, Accountability, Mr Mayne’s Documents, and Contributions.
One further factual matter needs to be outlined here before dealing with Ms Mayne’s evidence. It concerns her inheritances. The first inheritance followed the death of Ms Mayne’s Mother. She inherited some assets: their identity and value are unknown. The second inheritance – more immediately identifiable and quantifiable – followed the death of Ms Mayne’s Father in February 1997. Ms Mayne inherited the two family properties: “Property S” and “Property A.” Their values have been agreed.[6] These properties are a modest distance from [C] in southern country New South Wales.
[6] Formal valuations were obtained. The valuer, Mr Davies, filed an affidavit, dated 22nd September 2008, with his valuations attached. He was not required for cross examination. The value of the properties is dealt with later in these reasons when addressing the “four steps.”
The third inheritance arose when Ms Mayne inherited the whole of her Aunt [D]’s estate in September 1999. That comprised a property in [C] (Property B) as well as “shares and investments” details of which were not provided. Apart from the rural properties mentioned, for all practical purposes the combined amount that was realised from the inheritances totalled (in round figures) $376,742. In relation to this figure, approximately $188,171 was received shortly after Aunt [D]’s death in 1999. Ms Mayne received approximately $188,571 in 2004 being the net proceeds of sale of the property at Property B. Thus all moneys from Aunt [D]’s estate were received during the course of the marriage – in 1999 and 2004 - and, according to Ms Mayne’s evidence (noted below), she spent the entirety of those funds, albeit that she cannot account for a significant portion of that expenditure.
In her evidence at trial, Ms Mayne confirmed that the entire net proceeds of sale, of over $188,000, received in 2004, had been disposed of. In answer to the following question from Mr Nash – “… how much do you say is presently remaining in any form or wherever it may be of the $376,000-odd of the balance of Aunt [D]’ estate being the cash and the sale of proceeds of the house?” – Ms Mayne replied: “Zero.”[7]
[7] Transcript (13th October 2008) p.21.
Disclosure: Here I confine my remarks to matters of fact. I will deal with legal principles that are relevant in later sections of this judgment.
A large part of Ms Mayne’s cross-examination focussed on a series of documents that had been produced only the day before the trial commenced pursuant to a Notice to Produce issued by Mr Mayne’s solicitors. More often than not Ms Mayne responded to questions regarding disclosure to the effect that she did not know the details of documents produced, such as the most recent date of any rate notices, because she had simply provided a boxful of documents to her solicitor.
Clearly her expectation if not hope was that in producing, albeit in no systematic way, a large quantity of documents to her solicitors she would have complied with or at least gone close to satisfying the insistent demands for her to disclose relevant information and to produce supporting documentation in aid of the orders she seeks.[8]
[8] See, for example, Transcript (13th October 2008) p.11.
Indeed, early on in her cross-examination she acknowledged that there had been extended attempts to have her disclose documents, such as bank accounts and the like.[9] Those attempts should be noted in more detail.
[9] See, for example, her evidence at Transcript (13th October 2008) pp.11-14.
The first orders requiring Ms Mayne to produce basic information were made by a Registrar of this Court in November 2007. Further orders for specific discovery were made in 5th March 2008, while leave to issue further subpoenæ was granted on 25th March. I made both of those orders. There were further Court attendances on 9th and 30th April, and again on 2nd July and 13th August, most of which related, in some way, to the delays in and inadequacies of discovery and disclosure more generally.
It has already been noted that a significant number of documents were only produced the day before the trial commenced and some others only on the first day of the trial. In the course of cross-examination
Ms Mayne made clear that she had produced these most recent documents only after she had been “bullied” by her legal representatives to do so.[10]
[10] Transcript (13th October 2008) p.42. Ms Mayne used the word “bullied.”
Ms Mayne stated that litigation “terrified” her and that it was “spinning her out”.[11] Such experiences are, of course, not uncommon and are perfectly understandable reactions from many litigants. That said, she was and is the Applicant in these proceedings. She is the person who initiated these proceedings. As documented, Ms Mayne had many opportunities to order her affairs, including securing and ordering her documents for the benefit of her own case through her legal advisers. The orderly and thorough attention to disclosure of documents, particularly in property proceedings, is a formal requirement to which I refer in more detail below. Failure to disclose all relevant documents impedes all parties as well as the Court in the proper conduct of litigation. Indeed, in answer to questions from Mr Nash, Ms Mayne confirmed that she understood and took seriously her obligation to `fully and frankly disclose’ her financial affairs to the Court.[12] Unfortunately, her actions over a long period of time did not match her agreement with the principle of `full and frank’ disclosure. And clearly, speed or despatch in making disclosure was not high on her agenda either.
[11] Transcript (13th October 2008) p.12.
[12] Transcript (13th October 2008) p.22.
Ms Mayne said that her documents, and certainly all of her former husband’s documents, were stored in another dwelling on the property on which she lives.
Ms Mayne was scared of going to the dwelling in which she had deposited the documents for a number of reasons. First, she said that she heard noises, seemingly mostly from animals. To overcome or help her deal with those noises she played “heavy metal” music, which was turned up very loud, while searching through the documents. She also took a shotgun with her.[13] Her second reason for being scared and taking a shotgun to this dwelling was because she said she feared her husband [generally] and that she was concerned that he would go out to the property. On a number of occasions in the course of her evidence she maintained that Mr Mayne went to the property but immediately conceded that she had no evidence that he had done so.
[13] See Transcript (13th October 2008) pp.15 & 42.
I should note here that Mr Mayne did not go to the property in the first instance because Ms Mayne took out an AVO against him in
May 2006. That AVO was dismissed, but immediately following it,
Ms Mayne wrote to her husband advising him not to approach the properties (details of which are given later) otherwise proceedings for trespass and `break and entering’ would be instituted against him. A copy of that letter, dated 23rd October 2006, is annexure “J” to
Mr Mayne’s affidavit of 14th September 2008.
Ms Mayne produced no evidence of any kind to support her fears concerning Mr Mayne. I accept that she may well be anxious or concerned about being in the presence of or otherwise near her former husband. It is quite another thing however to make accusations about him, such as throwing furniture or making threats of one kind or another and not produce any evidence, such as a report to the police or other outside body, that might substantiate any of these claims that she makes. Indeed, in the context of this case, in many if not most respects it was very much a situation of “she said” – “he said”. As noted below, Mr Mayne said that his former wife had no reason to be fearful of him. He denied accusations regarding throwing furniture.
For my part, given (a) her own admission that she was distressed by the proceedings themselves, (b) there was credible evidence that
Mr Mayne did not wish the marriage to end (e.g. the contested divorce proceedings as well as his own evidence to this effect[14]) and therefore both parties would be feeling perhaps an even greater level of pressure than some other litigants, and (c) at different times in the course of her evidence, Ms Mayne presented in the witness box as an anxious person but also someone who was not without some element of guile (I do not intend to be hypercritical in commenting thus), my impression was that her “fear” about Mr Mayne was not as strong, and certainly was not as well founded, as she would wish the Court to believe. In all likelihood, it will dissipate as the litigation and its aftermath recedes into history. Ms Mayne often struck me as a defensive witness, sometimes even bordering on the furtive. In her circumstances, and the various grounds upon which her own actions left her case open to serious challenge, this was understandable and not completely surprising.
[14] See Transcript (13th October 2008) p.71.
It is not inapt to state at this early juncture that for the same reasons just articulated, where there is a direct inconsistency between the accounts of the parties I prefer the evidence of Mr Mayne to that of
Ms Mayne. This is not to say that I accept everything deposed to or stated by Mr Mayne. I will come to his evidence soon enough.
To state the obvious, and as I have already mentioned, Ms Mayne did her case no good at all by the persistent failure to disclose documents. In doing so she failed to obey the orders of the Court over a long period of time. Her on-going failures to disclose documents and or otherwise to provide relevant materials to support her various contentions has also made the calculation of various important and significant amounts even more difficult and problematic than usual. Other consequences, in the light of long-standing judicial authority, are noted below.
Accountability: Given the poverty, or at least the disarray and incompleteness, of her documentation, it ineluctably followed that there proved to be a number of serious and significant lacunæ in the various calculations and claims in relation to the asset pool and in relation to liabilities. A few instances will suffice.
Early on in her cross-examination, Ms Mayne stated that Schedules 1 & 2 to her affidavit of 15th August 2008 were not based on supporting documents but rather they had been prepared “out of her head.”[15] Schedule 1 purports to be a list of “family expenses included with other large expenses paid by me [out of the inheritance funds].” Schedule 2 “sets out some smaller individual expenses paid by me for the family including funds spent from the inheritance.”[16]
[15] Transcript (13th October 2008) p.16.
[16] These descriptions are taken from the affidavit referred to at pars.60 and 61 respectively.
Secondly, after a wide range of questions about various claimed expenditures, Ms Mayne conceded that there was a significant shortfall between what she inherited and what she was able to account for in the course of her evidence – documentary and other.[17]
[17] Transcript (13th October 2008) p.37. Earlier problems in reconciling financial records (in part because of the lack of information and supporting documentation) are found at Transcript (13th October 2008) pp.19, 23-24, 27-28, 30, 35 & 36.
Thirdly, Ms Mayne claimed expenditure that was paid out of her inheritances in relation to matters, such as her son’s school fees, which were incurred before the testatrix (her Aunt [D]) had actually died. More generally, she claimed various expenses, for example items numbered “ii) – pp)” in Schedule 1 of her affidavit of 15th August 2008, “across ten years.” These amounts alone amounted to $85,200. According to Ms Mayne, they referred to “electrical repairs to house”, “plumbing repairs to house”, “for purchase of water”, “rates for [C]”, “rates for [S] Shire Council”, “rural lands protection board rates”, “Department of Lands costs” and “for business insurance on property and house”. All of these items are stated to be for an unspecified period “across ten years.” Unfortunately, the generality of these claims was typical of the information made available to the Court (and to
Mr Mayne).
I can generally accept that expenditure on the properties would be reflected – also generally speaking – in the agreed valuations. But again, the lack of particularity from Ms Mayne was a constant problem.
Mr Watkins, Counsel for Ms Mayne, submitted (in many respects, in my view, valiantly so) that even for those items that were actually incurred before Aunt [D] died, those debts were left to stand and were not paid until Ms Mayne had inherited the funds from her Aunt’s estate. In such circumstances, he submitted that it was accurate to describe them as set out in the Schedules to Ms Mayne’s affidavit of 15th August 2008.
Whether that submission be accepted or not, it remains the case that
Ms Mayne did not account satisfactorily for significant funds that were inherited during the course of her marriage to Mr Mayne. As Mr Nash, Counsel for Mr Mayne, argued in his written submissions (par.35), “… even if the wife’s assertions of expenditure were accepted in full, there is still a shortfall of approximately $140,000 between the total estate received of $376,000 and the wife’s claim in schedule 1 of having spent $236,000.” I will come back to these submissions presently.
Ms Mayne explained that the inheritance funds were fully expended on (a) her half siblings,[18] and (b) to various nieces and nephews, of amounts ranging from $500 to $1000 or perhaps more.[19] These funds were given, inter alia, to help buy a piano for a nephew, or for some medical expenses for another relative. In her affidavit of 15th August 2008, Ms Mayne said (at par.51) that she gave these moneys at a time when she was heavily in debt trying to maintain the two properties of Property S and Property A. She agreed that, notwithstanding a number of earlier requests from Mr Mayne’s solicitors to explain and or to provide documentation in relation to the destination of the inheritance funds, until her affidavit of 15th August 2008 she had not previously mentioned any gifts of the kinds just noted.[20]
[18] Transcript (13th October 2008) p.21. Ms Mayne agreed that this expenditure was not documented in any way and was mentioned for the first time during cross-examination. See Transcript (13th October 2008) p.23. Ms Mayne said that she felt somewhat guilty about inheriting the whole of her Aunt’s estate while her half-siblings got nothing.
[19] See Transcript (13th October 2008) pp.23-24 & p.26. The various relatives were never previously mentioned by Ms Mayne.
[20] Transcript (13th October 2008) p.23.
Ms Mayne further contended that monies were spent in repaying her estranged brother the sum of $22,000. Unfortunately, there was no corroborative evidence of such a payment. Certainly she could not recall if there was a cheque or other bank record to substantiate this payment.[21]
[21] Transcript (13th October 2008) p.30.
Next Mr Nash took Ms Mayne through various claimed debts in relation to her Father’s estate. Those debts totalled $50,800. With those debts taken out (and paid for out of the funds inherited from Aunt [D]’s estate), there remained a very significant shortfall between what is set out in Ms Mayne’s Schedule 1 of her affidavit of 15th August and the total sum inherited.
By way of further explanation, Ms Mayne stated that she did a number of courses interstate (in Sydney and Melbourne) (e.g. in various forms of “healing” such as using “crystals” and “thought field therapy” to help her overcome some form of phobia). Ms Mayne described herself as a “professional healer” and as a “Reiki Master.”[22] She stated candidly that she did not think that she would be required to account for every cent she has spent over the years since receiving Aunt [D]’s inheritance. She also agreed that expenditure on these matters, which included holidays also, were essentially for her benefit solely. In answer to questions from the Bench, she also confirmed that she could not put even an approximate figure on this expenditure.[23]
[22] Transcript (13th October 2008) p.38.
[23] Transcript (13th October 2008) p.38.
Ms Mayne confirmed that she spent a significant amount on various cameras and cassette players for various family members. She agreed with the suggestion that these items were largely discretionary expenditure.[24] These items amounted, as best one can glean from
Ms Mayne’s evidence – and again it should be noted that these items were never previously disclosed – to $4341 (in rounded figures).
[24] Transcript (13th October 2008) p.48-50.
In an Annexure [1] to his written submissions, Mr Nash detailed the various matters in relation to which there was no documentation to support the expenditure claimed. That amounted to $169,500. If one then adds the discretionary spending referred to in the previous paragraph, the unexplained expenditure totals $173,841. Mr Nash submitted that this amount should be “added back” into the asset pool on the basis of the principles espoused in Kowaliw. I will deal with this submission in the next section. I move to consider the situation regarding access to Mr Mayne’s documents.
Possession of Mr Mayne’s Documents
: I have already detailed much that is relevant to this aspect of the case. By way of summary,
Ms Mayne had control of her husband’s documents. She packed them and removed them to another part of the property on which she lives. She took out an AVO against him, and after it was dismissed she threatened him with legal proceedings should he attempt to gain access to the property.
For all of her anxieties she should have facilitated either Mr Mayne or someone on his behalf to have access to them well before the trial. She did not do so. According to her evidence, she was only working part-time, and therefore, would presumably have had a more than a reasonable range of opportunities to make provision for access to
Mr Mayne’s documents in some shape or form. Among many courses available to her was simply to arrange for someone to enter the property during daylight hours to remove Mr Mayne’s documents. Such was not, and should not have been, a hugely difficult exercise. Her failure in this regard is of a piece with others already listed that have significantly impeded the efficient conduct of these proceedings. It clearly detrimentally affected Mr Mayne’s capacity to prepare properly for the trial of these proceedings that were initiated by
Ms Mayne as well as to his capacity to meet the various factual matters, and limited range of long-requested documents, that emerged shortly before and during the trial.
Contributions: Ms Mayne conceded that Mr Mayne’s income essentially supported the family.[25] This was one of the few concessions Ms Mayne made in relation to Mr Mayne. She contended (for the first time in cross-examination) that Mr Mayne spent large amounts of time on the computer and thereby did not contribute – or did so to only a minimal degree – indirectly to the maintenance of the properties.[26] Indeed she claimed that Mr Mayne never helped at home; his non-financial contribution, she said, was minimal.[27]
[25] Transcript (13th October 2008) p.55.
[26] Transcript (13th October 2008) p.44 & 47.
[27] Transcript (13th October 2008) p.59.
Conclusion re Ms Mayne’s Evidence: The final matter to note here is that until 1994, Ms Mayne did not work outside the matrimonial home because she assisted with book-keeping on the family properties, even though she conceded to Mr Nash that financial matters were not her forte.[28] The juxtaposition of and inconsistency between these assertions was never explained.
[28] Transcript (13th October 2008) p.38. Her exact words were: “My accountant skills are not the best.”
The difficulty with this evidence about her work for her parents on the properties as a book-keeper and her later statement that `accounting was not her strong suit,’ poses another difficulty. Ms Mayne stated in her affidavit of 15th August 2008 (par.51) that at the time of inheriting from Aunt [D] in 1999 she was “already heavily in debt.” Together with other evidence (notably in Schedule 1 and its reference to debts incurred `across a ten year period’ which includes some years before Aunt [D] died) her evidence suggests strongly that her financial management and accountability has never been good. Thus it might be inferred that, from at least 1998 (and likely earlier) her book-keeping and financial management skills, for which she was paid by her parents, were of a less than competent quality. Certainly, in the light of the state of her financial records that were on display during the course of these proceedings, unless there has been a radical change in her practices, such an inference is almost inescapable.
Mr Watkins prudently left these matters well alone. Later Ms Mayne worked at the [C] Visitor’s Centre. She confirmed that she left there following some disagreements with staff, as well as the fact that there were difficulties in her own life that were causing her various stresses.
Finally, I should say that I did not take Ms Mayne to be engaged in a deliberate exercise to mislead the Court over the state of her financial affairs. As best she could, but with the reservations previously noted, I thought her to be a reasonably truthful witness. Whatever the reason for her antipathy towards Mr Mayne, it still clouds her capacity to deal with him and anything associated with him.
As well, her prodigal approach to Aunt [D]’s inheritance was clearly not matched by much prudential judgment. Doubtless she would see her expenditure as being acts of generosity. Doubtless in many respects they were. But the evidence more than strongly suggests that it was never tempered either by prudence or by justice. As I have previously recorded, Ms Mayne volunteered that she made many gifts at a time when she was “heavily in debt.”
In my view, as I note in more detail below in the light of authority, her unrestrained if not in many respects profligate actions in relation to the inheritance funds, in my view, comes within the description of Baker J in Kowaliw where his Honour referred to acting “…recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.”[29]
[29] Kowaliw v Kowaliw (1981) FLC ¶91-092 at p.76,645.
Mr Mayne’s Evidence: Much less time was spent on Mr Mayne’s evidence compared to Ms Mayne.
Since 2006 when his relationship with Ms Mayne ended, Mr Mayne has lived rent-free with his Mother. He has contributed to some outgoings at his Mother’s residence.
Mr Mayne confirmed that he continued to pay for one telephone line at the property on which his former wife lives. He understands, and it was his intention, that it be for internet use.
He acknowledged Ms Mayne’s contribution as full-time Mother of the two children of the marriage.[30] I accept his explanation that by stating that Ms Mayne was not working he did not intend to belittle her contribution as homemaker and Mother.
[30] Transcript (13th October 2008) pp.69-70.
Mr Mayne also acknowledged that he and his wife lived rent-free on the two properties that his wife eventually inherited from her Father. The couple lived in this accommodation, on one or other of the properties, from 1986 until the end of the relationship in 2006.[31]
[31] According to the valuation of Mr Davies to which I have previously referred, the state of repair of the property of Property S (the most recent matrimonial residence) is “average.”
Mr Mayne contended that he asked his wife not to be extravagant in her spending in relation to household needs during the course of the marriage,[32] whereas Ms Mayne had contended that in fact Mr Mayne would not eat so-called lesser brands of food.
[32] Transcript (14th October 2008) p.95.
There was a genuine dispute during the marriage over what school the children should attend, notably in relation to their son. Ms Mayne wanted him to attend a [private] Catholic school, while Mr Mayne wanted him to attend the local state-run school. In the event, their son attended the local Catholic school until year 10 and then went to the local high school. This is relevant because Mr Mayne contended that the school fees paid for their son’s education should be added back into the asset pool.[33] For my part, I do not see how such a proposition could be sustained.
[33] See Transcript (13th October 2008) pp.89-90.
The only other matter to note that was canvassed during his short cross-examination related to fees that Mr Mayne had incurred to kennel some farm dogs. He wanted them to be kept on the farm, but
Ms Mayne had refused. I need not retail the history of them being set loose by Ms Mayne, as alleged by Mr Mayne. For my part I do not see that the fees of approximately $11,000 expended in kennelling the dogs comes into any of the recognised categories of add-backs. They were funds expended by Mr Mayne after separation out of his own pocket.
Summary of Submissions: In the light of the evidence the submissions of both parties may be summarised as follows.
On the part of Ms Mayne, the emphasis was on her substantial contribution courtesy of the rent-free accommodation that the parties to the marriage enjoyed for the bulk of their married life, firstly when the properties were owned by Ms Mayne’s Father, and after his death, courtesy of Ms Mayne’s inheritance of them.
Counsel for Ms Mayne also accented the greater earning capacity of Mr Mayne over that of his client, and the fact that since separation,
Mr Mayne has been living rent-free with his Mother. In this latter regard it was acknowledged that Mr Mayne’s Mother would soon be selling her property in [C] and moving away from that city, following which Mr Mayne would be required to find alternative accommodation. Mr Watkins also emphasised the significant contribution of Ms Mayne as homemaker and Mother.
For his part, Mr Mayne structured his case around the lack of disclosure by Ms Mayne, the fact that his larger superannuation entitlement will not vest for another 10 years or thereabouts, his financial contribution via his salary, and his non-financial contributions. Mr Nash also emphasised that a “just and equitable” order had to take into account the reality of how significant – as to time and extent - Ms Mayne’s non-disclosure was and that she should not be entitled to profit from her own extensive default at the expense of
Mr Mayne especially where she has significant real estate assets and he has none.
D. Legal considerations
In this section I consider the relevant authorities that deal with (i) inheritances, (ii) disclosure and (iii) “waste” in the light of the evidence.
Inheritances
With very modest refinement, it is well settled that inheritances generally and bequests in particular constitute “property” within s.79 of the Act. There is significant authority to this effect.
For example, the Full Court (Nicholson CJ, Nygh & Tolcon JJ) discussed a number of matters in relation to inheritances in Bonnici.[34] For current purposes, it is sufficient to note the following. First, after discussing the distinction between “property” and “resource” under the Act, the Court observed that it was a difficult issue whether the same distinction should apply to “other types of property in which the parties have an interest.”[35]
[34] In the Marriage of Bonnici (1991) 105 FLR 102.
[35] Ibid at p.108.
Rather more relevantly to the current discussion are the following comments (also at p.108):
A property does not fall into a protected category merely because it is an inheritance. On the other hand, if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as an entitlement.
… The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances.
I emphasise here that the funds inherited by Ms Mayne could not be categorised as “recently acquired.” The funds in question here came to Ms Mayne courtesy of Aunt [D]’s estate, which she inherited in 1999.
Somewhat more recently, a differently constituted Full Court (Nicholson CJ & Buckley J: Ellis J did not comment on the matter) in Figgins said:[36]
It is apparent … that being the fortunate recipient of an inheritance does not amount to a contribution characterised by special skills. Indeed, in a strictly financial sense, the inheritance was something of a windfall …
[36] In the Marriage of Figgins (2002) 29 Fam LR 544 at p.557 [58]. See also their Honours’ further discussion of inheritances, including in the light of House of Lord’s authority to which I need not refer, at pp.557-558 [59] – [66].
In my view, the Full Court’s characterisation of inheritances as a “windfall” is more than apt. In this instance in particular, while the inheritances must be taken into account, it is important, as the Full Court emphasised, not to place them into some special or privileged category.
The most recent consideration of “inheritances” by superior Courts has been by Young J in Leggero v Jagger,[37] and by the Queensland Supreme Court (Mullins J) in SDJ v FWR.[38] In both instances, the Court simply followed the Full Court decision in Bonnici.
[37] (2008) 38 Fam LR 561.
[38] SDJ v FWR [2008] QSC 256 (24th October 2008).
Disclosure
The authorities regarding the duty of parties in property settlement proceedings to make full and frank disclosure of their financial circumstances are significant and well known. As briefly as possible, the following observations may be made.
Although later cases refer to them, I do not need to refer to the earlier authorities of Mezzacappa and Black & Kellner.[39] Relevant statements from those decisions are quoted in later authorities to which I now refer, largely in chronological order.
[39] Mezzacappa & Mezzacappa (1987) FLC ¶91-853 & In the Marriage of Black & Kellner (1992) 15 Fam LR 343.
In Weir’s case,[40] the Full Court (Nicholson CJ, Strauss & Nygh JJ) said: “This court has pointed out in a line of cases leading up to the recent decision of the Full Court in … Black & Kellner … that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs.”
[40] In the Marriage of Weir (1992) 16 Fam LR 154 at p.158.
The Full Court continued in Weir:[41]
… once it has been established that there has been a deliberate non-disclosure … then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
[41] Ibid., at p.158. See also the later Full Court citation of Weir in Foda v Foda (1997) FLC ¶92-753 at pp.84,156 – 84,157.
In 2002, in Chang v Su,[42] the Full Court (Finn J [agreeing generally with], Kay & Dawe JJ) considered and endorsed the earlier judgments in Mezzacappa, Black & Kellner and Weir. Among other things, the Full Court quoted Black & Kellner’s reliance on remarks by Smithers J in Briese’s case and his Honour’s observations in the light of the House of Lords decision in Livesey v Jenkins, more correctly cited as Jenkins v Livesey.[43] Smithers J said:[44]
… in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case [of Jenkins v Livesey] it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of a discretion. This is quite different from common law litigation between strangers, in which such a general duty does not exist, and obligations would only exist in so far as statute or court rules required.
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.
[42] In the Marriage of Chang & Su (2002) 29 Fam LR 406.
[43] In both the Family Law Reports (Fam LR), at [69], and in the Family Law Cases (1992) FLC ¶92-287, at p.79,133, both reports of this judgment give the citation of this House of Lords judgment as [1985] All ER 106. It is clearly an incomplete citation. It should be [1985] 1 All ER 106. Moreover, in the authorised reports, the correct citation is Jenkins v Livesey [1985] AC 424. And to be utterly pedantic: (a) the original judgment from which both Full Court’s – Black & Kellner and Chang v Su – were quoting was the decision of Smithers J in In the Marriage of Briese (1985) 10 Fam LR 642, in which his Honour cited Livesey v Jenkins correctly (although perhaps understandably only from the unauthorised reports); (b) the leading judgment in Jenkins v Livesey was that of Lord Brandon [1985] AC at p.430, with which Lords Hailsham, Scarman, Keith and Bridge concurred.
[44] 10 Fam LR at p.662. As already indicated, with some small editing, the same passage is quoted by the Full Court in Chang v Su at 29 Fam LR at p.423 [69].
I need only refer to two other recent decisions, both of which repeat the principles laid down in earlier decisions to which I have already referred, but with an additional helpful comment or two.
First, in Gould & Gould,[45] the Full Court (Bryant CJ, Finn & Boland JJ) dealt with the issue of “non-disclosure” beginning at [19]. The Court considered all of the cases to which I have referred – plus a few others along the way. The only matter I wish to note here is the Court’s quotation of comments by Callinan J in the special leave to appeal application in Chang v Su. In the course of argument, his Honour said: “It does not matter what the principle might be said to be, a court has to do the best it can, having regard to the evidence that is adduced and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings the court can make.” This quote is cited by the Full Court in Gould at [49].
[45] Gould & Gould (2007) FLC ¶93-333.
The context of Callinan J’s remarks is in response to Counsel’s submission on Mezzacappa, which I have cited earlier. And for the sake of completeness – because it is not in the Full Court’s judgment – the citation for the High Court’s special leave hearing is found in the accompanying footnote.[46]
[46] Chang v Su [2002] HCATrans 549 (5th November 2002).
The Full Court went on to say, at [27]:
… the appropriate approach for his Honour to have adopted in this case would have been to have increased the asset pool to take account of non-disclosure by the husband, and indeed his Honour had already done this to some extent in accepting the schedule of assets prepared by the wife’s counsel (see also paragraphs 12 and 14 of his Honour’s reasons). Alternatively, or even in addition, had his Honour been persuaded that on the balance of probabilities there existed assets other than those contained in the asset pool contained in his reasons, his Honour could have made some adjustment in favour of the wife on account of the husband’s non-disclosure pursuant to the provisions of s 75(2)(o)….
The Full Court in Gould, at [25], also quoted part of an earlier Full Court (Nicholson CJ, Buckley & Kay JJ) decision in Kannis & Kannis, where the Court said, at [51]:[47]
Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour. This is the course the trial Judge adopted. It was a course clearly open to him and one that does not merit appellate interference.
[47] Kannis & Kannis (2003) FLC ¶93-135. Unfortunately, this report gives only an abbreviated judgment, limited to the removal of the Next Friend.
The final case to note here is the decision of Ryan J in PS & MA,[48] when her Honour was a member of this lowly Court. The judgment is not only typically useful for what Ryan J says but also because of her Honour’s quotation of O’Ryan J’s summary of principles in Luciano.
[48] PS & MA [2005] FMCAfam 486.
In that case, O’Ryan J provided the following summary, at [373], of principles from the non-disclosure cases, thus:[49]
In proceedings in the Family Court [and doubtless other Courts too] in relation to financial matters there is an obligation of each party to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto;
The obligation arises because of the necessity for the court in such proceedings to consider all aspects of the financial circumstances of each party;
The obligation is not created by the rules or practice of the court and the rules simply set out the procedure by which that obligation may be fulfilled;
If there is a deficiency in the practice adopted for the purpose of making such a disclosure mere compliance with the requirements of the relevant rule, if deficient, is not enough;
If there is non-disclosure, in the relevant sense, then the failure to disclosure [sic] undermines the whole process of adjudication of the proceedings in relation to financial matters;
A finding of non-disclosure may, in appropriate cases, depending upon the circumstances, result in the other party being granted, without more, the relief sought.
[49] Luciano & Luciano [2000] FamCA 401. See also In the Marriage of Hickey (2003) 30 Fam LR 355 at p.370 [40] where the Full Court said: “… each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto.” Emphasis added.
I respectfully adopt his Honour’s helpful summary. However, before making any formal determination as to the consequences of Ms Mayne’s non-disclosure – less of assets and more of her failure to provide relevant supporting documentation - it is important to consider the next area of significance in this case, which concerns “waste.”
Waste
Mercifully, I can be relatively brief here. In Kowaliw & Kowaliw, Baker J stated very precisely the following:[50]
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.
[50] (1981) FLC ¶91-092 at p.76,644.
His Honour’s clear articulation of principle has been regularly cited and endorsed. For example, defining the “three categories” of “add-backs” in AJO v GRO, the Full Court (Holden, Warnick & Le Poer Trench JJ) said:[51]
[51] In AJO v GRO (2005) 33 Fam LR 134 at pp.144-145 [30].
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...
(b) Where there has been a premature distribution of matrimonial assets… [and]
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw.
On the facts of this case, in my view, it is very clear that the actions of Ms Mayne fit readily into Baker J’s statement in Kowaliw cited above. By her actions, she “has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.” Accordingly, given the amount of Aunt [D]’s estate for which there is no accounting, or in relation to which there has been inappropriate expenditure, namely $173,841, that sum should be added back into the asset pool.
Moreover, in the light of the authorities earlier discussed regarding non-disclosure, the cases there considered make plain the unfortunate reality that the precision with which calculations in property cases should and would normally be conducted is impossible. Such is the legacy of Ms Mayne’s conduct here. As Callinan J said in the special leave application in Chang v Su (cited by the Full Court in Gould) “…if the parties are not frank then naturally there is going to be a measure of imprecision about any findings the court can make.” And as the Full Court said in Kannis, (also quoted earlier) “…[i]n those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour.” In the result, it may reasonably be argued that, given the length and extent of Ms Mayne’s non-disclosure, and her failure/inability to account for a large sum of inheritance funds, the orders in this matter are in fact quite generous to her. In any event, the orders proposed, in my view, are just and equitable in all the circumstances.
It is time at last to turn to the “four steps.”
E. The four steps
Identify & Value the Property: A very convenient and simple description of the “four steps” is found in the Full Court decision in AJO v GRO.[52] The Full Court said that the first step was “to identify and value the net property of the parties (usually as at the date of the trial).”
[52] (2005) 33 Fam LR 134 at p.147 [46].
Here, subject to the add-back of $173,841 to which I have referred, the asset pool has been agreed. As set out in Mr Watkins’ written submissions that were filed on 13th November 2008, the net value of the asset pool is $1,158,066. Mr Nash confirmed his agreement with this amount in his written submissions that were filed on 1st December 2008 (par.6).
When account is taken of the “add-back”, the asset pool (including superannuation of $284,774) is $1,331,907. The detail of the pool is set out in the table below as taken from Mr Watkins’ submissions.
Assets
| Description | Value |
| Real Estate: Property A (W) | 400,000 |
| Real Estate property: Property S (W) | 430,000 |
| Commonwealth Bank account (W) | 707 |
| 1999 Mitsubishi Triton ute (W) | 10,500 |
| Household Contents (W) | 20,000 |
| Superannuation (W) | 25,300 |
| Commonwealth Bank account (H) | 390 |
| State Government Employees Reliance Credit Union (H) | 1,630 |
| IAG shares (H) | 3,055 |
| Telstra shares (H) | 510 |
| 1994 Nissan Pathfinder (H) | 6,500 |
| Superannuation (H) | 259,474 |
| TOTAL | 1,158,066 |
Contributions under s.79(4): The matters here to address may be summarised as follows. First, it is not in dispute that Ms Mayne inherited real estate from her Father in 1997, and approximately $376,000 from her Aunt [D] in 1999. That sum came in two tranches: the first in 1999 of $188,171 (apparently from cash, shares and perhaps other investments), and the second sum, of $188,571 (following the sale of the Property B property – part of Aunt [D]’s estate), in 2004.
I am mindful of the Full Court’s observation in relation to inheritances in Figgins (cited above) that they are, in a strictly financial sense, “windfalls.” I take their Honours to be acknowledging that in many instances, inheritances are windfalls because, in perhaps the great majority of cases, they are not formally the product of a person’s labour. It is the fortunate situation of a relative or friend, in their benevolence (and doubtless usually much more), bestowing utterly gratuitously, some benefaction on another. This seems to have been the case here. This is also to say – and it is said in no way critically – that the inheritances were not the product of Ms Mayne’s labour. Indeed, as I have noted, Ms Mayne said that she felt guilty about inheriting all of Aunt [D]’s estate. Her gifts to relatives were intended, in some way, to assuage her guilt in this regard. Nevertheless, according to authority, they should and do appear on her side of the ledger.
I am also mindful of long-standing authority, such as in Zyk where, after citing a number of earlier authorities, the Full Court (Nicholson CJ, Fogarty & Baker JJ) said a significant disparity in contributions at the beginning of the marriage (a) should ordinarily be reflected in the orders at the end of the relationship, and (b) may be eroded over time by the contributions of the parties during the course of the marriage.[53]
[53] Zyk & Zyk (1995) FLC ¶92-644 at p.82,517. Emphasis added.
The couple also had rent free accommodation courtesy of Ms Mayne’s parents from approximately 1986. Thus here, the Court has to consider a disparity of contribution, at least in relation to accommodation/real estate, for almost the entire length of the marriage. But also, it must be borne in mind that both parties benefited from the rent-free accommodation; it was not a benefit for Mr Mayne alone.
On the husband’s side of the ledger, it was acknowledged that
Mr Mayne supported the family from his salary essentially for the duration of the marriage.
Another significant contribution on Ms Mayne’s side is her role as home-maker and Mother. Again, there is little or no dispute about that. That role also allowed Mr Mayne to accumulate a not insignificant amount of superannuation, which now stands at $259,000. Ms Mayne’s superannuation is very much more modest - $25,300.
There is significant dispute about Mr Mayne’s non-financial contribution during the course of the marriage.
At its highest, in the light of the limited evidence available, it seems to me that the best the Court can do is draw inferences, albeit that in the net result, not a great deal turns on them. First, while not impossible, I consider it very difficult to contemplate that Ms Mayne would have stayed in the relationship for as long as she did if the kinds of difficulty to which she referred (noted earlier in these reasons) had occurred either with any frequency and or over any prolonged period.
Secondly, having heard and watched both parties closely during the course of the trial, I also find it very difficult to contemplate that
Ms Mayne would have permitted the relationship to continue if
Mr Mayne had not contributed both financially and, to a reasonable degree at least, non-financially.
In relation to contributions, Mr Watkins’ seeks a finding that his client should be entitled to 90%. For his part, Mr Nash seeks a split of 35% to his client and 65% to Ms Mayne. Generally speaking, and it is hardly a novel position to assume, I take the submissions by both Counsel as putting the highest possible claim on behalf of their respective clients.
In my view, while there is no doubt that Ms Mayne’s financial contributions – courtesy of her family (accommodation and inheritances) – significantly outweigh Mr Mayne’s, a finding of 90% as sought by Mr Watkins does not, in my view, account sufficiently for Mr Mayne’s financial support throughout the long marital relationship, nor the very significant length of the marriage itself.
Moreover, I am required to consider not only the contributions of the parties and any “erosion” of them over time, but also the weight that should be attached to them, especially to the initial contributions.[54] I have indicated often enough already that Ms Mayne’s contributions did not come from her own labour, and she also benefited from them equally with Mr Mayne in relation to accommodation, and exclusively in relation to the inheritance from Aunt [D].
[54] See the comments of the Full Court in this regard in Pierce v Pierce (1999) FLC ¶92-844 at p.85,881.
Taking account the financial and non-financial contributions of both parties, in my view, on a combined basis they would favour Ms Mayne 81% and 19% to Mr Mayne.
Consideration of the s.75(2) Factors
: The only matters raised here by Mr Watkins, on behalf of Ms Mayne, were that while she clearly has the greater share of the property pool – a genuine understatement –
Mr Mayne has the superior income earning capacity. He put it in the order of Mr Mayne earning approximately $50,000 per year, while
Ms Mayne earns approximately $17,000 per annum. Based on her most recent employment, her salary for this financial year would be approximately $27,000. These figures I take to be largely not in dispute.
In the light of the few s.75(2) matters in play, and on the basis of a 90% contribution in favour of his client and that his client has the greater share of the property pool, he submitted that there should be an adjustment of 10% in favour of Mr Mayne.
For his part, in relation to this `third step ‘Mr Nash submitted that (a) because Ms Mayne had the only real estate in the pool and from which she could, over time, earn further income from agistment (a matter concerning which there was little evidence, and such that there was suggested that while-ever the drought continued, and or the property remained in its apparently `average’ condition, the prospects of significant income from agistment would seem to be modest), and (b) because Mr Mayne’s superannuation would not vest until another
10 years, it would be inequitable not to make a more substantial adjustment in his client’s favour.
In support of his arguments for a greater assessment in favour of
Mr Mayne, Counsel made three other arguments. First, he relied upon the comments of Thackray J in Woollams, where his Honour said:[55]
It would be an unfortunate interpretation of legislation expressly designed to do justice and equity if the process is not sufficiently flexible to allow a further adjustment to be made to compensate a party who is left holding all or most of his settlement in the form of superannuation that will not be available for years to come.
[55] Woollams & Woollams (2004) FLC ¶93-195 at p.79,243. This is a decision of the Family Court of Western Australia.
Secondly, Mr Nash argued that Mr Mayne was in his superannuation fund for 5 years before the relationship commenced and 2 years after it ended.
Thirdly, Counsel submitted that because Mr Mayne’s Mother was moving to the coast, Mr Mayne would have the cost of finding, and obviously paying for, accommodation. This is an expense that he does not currently have.
For my part, while not totally discounting the second and third lines of argument, I think the reliance on the remarks of Thackray J has perhaps the greatest weight. And in any event, I am bound by his Honour’s remarks.
By virtue of these matters, Mr Nash submitted that his client was entitled to a further adjustment of between 3-5%.[56] On these figures (taking the highest number), in percentage terms, this would give
Mr Mayne an adjusted figure of 40% of the asset pool.
[56] In later submissions in relation to the application to re-open, Mr Mayne submitted that the adjustment in his favour should be 5-8%.
As I said in relation to the competing submissions in relation to contributions, so too here: the respective claims err too heavily on the positive side for both parties. Mr Nash’s submission of 3% in favour of his client on s.75(2) factors might be closer to the mark than
Mr Watkins’ submission that there should be an adjustment in
Mr Mayne’s favour, but only on the basis that his client secured an order for 90% in relation to contribution.
For my part, I think there should be an adjustment in favour of
Mr Mayne of 3% under s.75(2). In making this adjustment, I am conscious of the impact of the orders, for both parties, on the matters detailed in s.75(2)(b) & (k). And has been patent throughout these reasons, I consider Ms Mayne’s failure to disclose, failure to abide by consistent orders of the Court to disclose (and to account), and her waste of assets over which she had, in effect, sole control, are very significant matters within the scope of s.75(2)(o).
Step Four: The Just and Equitable the Order: In Russell v Russell the Full Court stated clearly that it was the order to be made which must be considered, in the Court’s exercise of its broad discretion, as “just and equitable”, and not just any underlying percentage division of the net value of the parties’ assets.[57]
[57] Russell v Russell (1999) FLC ¶92-877 at p.86,439.
Having regard to all the facts and circumstances in these somewhat prolonged proceedings, in my view, a just and equitable order would take the following form.
First, both parties should keep their superannuation untouched by the other party. And it should be excluded from the asset pool for the purposes of calculating the distribution of the net pool.
Secondly, excluding both amounts of superannuation from the pool, and adding back the unaccounted sum from Aunt [D]’s estate to which regular reference has been made, I calculate the net asset pool to be $1,047,133.
Thirdly, both in terms of percentage and in “dollar terms”, the just and equitable order is that, with each party retaining their respective superannuation entitlements, Mr Mayne should receive 22% of the net asset pool of $1,047,133. That would result in him receiving $230,369.26. This would mean that Ms Mayne would receive 78% of that pool. It is in the first instance, a matter for Ms Mayne as to how she orders her affairs to satisfy this award: that is, whether she can raise the funds perhaps by mortgaging one or more of the properties, whether one or more of them is sold, or even whether she would accede (however unlikely) to transferring the properties (or part thereof) to Mr Mayne.
Fourthly, I also make orders, slightly amended, as sought by Mr Mayne in the event that Ms Mayne is unable to satisfy the award to Mr Mayne.
Fifthly, unless there is a specific application in relation to costs within 28 days, I propose to make the following further orders:
i)Ms Mayne is to pay Mr Mayne’s costs, either agreed or taxed, in relation to the court events that related specifically to her non-disclosure: 22nd November 2007, 5th and 25th March 2008, 30th April 2008.
ii)Ms Mayne is to pay $500.00 in relation to Mr Mayne’s costs of the application to re-open.
iii)Otherwise, each party is to pay their own costs.
I certify that the preceding one hundred and twenty-six (126) paragraphs are a true copy of the reasons for judgment of Neville FM
Associate: Renee Davidson
Date: 5 June 2009
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