Mesic & Lazar
[2024] FedCFamC2F 1225
•9 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Mesic & Lazar [2024] FedCFamC2F 1225
File number(s): DGC 3357 of 2020 Judgment of: JUDGE JENKINS Date of judgment: 9 September 2024 Catchwords: FAMILY LAW – property proceedings – length of relationship – short de facto relationship – initial contributions – inheritance – loans – post-separation contributions – impact of short relationship on earning capacity – unreliable witness Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 4AA, 90SM
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r. 8.15
Cases cited: AJO & GRO [2005] FamCA 195
Aleksovski & Aleksovski (1996) FLC 92 705
Anson & Meek [2017] FamCAFC 257
Bevan & Bevan [2013] FamCAFC 116
Bonnici & Bonnici [1991] FamCA 86
Clauson & Clauson [1995] FamCA 10
D & D [2003] FamCA 473
Dickons & Dickons [2012] FamCAFC 154
Dovgan & Dovgan [2021] FamCA 306
Fairbairn v Radecki [2022] HCA 18
Figgins & Figgins [2002] FamCA 688
Flanagan v Sobek(Deceased) [2014] FamCA 696
Harris & Harris [1993] FamCA 49
Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395
Jabour v Jabour [2019] FamCAFC 78
Jones v Dunkel (1959) 101 CLR 298
Lee Steere & Lee Steere [1985] FamCA 57
Martin & Newton [2011] FamCAFC 233
Primrose Meadows Pty Ltd v River View Pty Ltd [2019] VSC 263
Robb & Robb [1994] FamCA 136
Rosati & Rosati [1998] FamCA 38
Stanford v Stanford [2012] HCA 52
Walpole & Secretary, Department of Communities and Justice [2020] FamCAFC 65
Whisprun Pty Ltd v Dixon [2003] HCA 48
Division: Division 2 Family Law Number of paragraphs: 132 Date of last submission/s: 27 June 2024 Date of hearing: 5, 26 & 27 June 2024 Place: Dandenong Counsel for the Applicant: Mr Howe Solicitor for the Applicant: Elvin Lawyers Counsel for the Respondent: Ms Marshall Solicitor for the Respondent: Altona Legal ORDERS
DGC 3357 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MESIC
Applicant
AND: MS LAZAR
Respondent
ORDER MADE BY:
JUDGE JENKINS
DATE OF ORDER:
9 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.It is declared that the parties were in a de-facto relationship pursuant to section 4AA of the Family Law Act 1975 (Cth) from December 2012 until May 2020.
2.Within 120 days (“the date”) the Applicant husband (“the husband”) pay to the Respondent wife (“the wife”) $571,476.25 (“the payment”).
3.If the payment is not paid by the date, the property at B Street, Suburb C, be sold altogether out of Court by the Applicant (“the sale”) and the proceeds of sale be distributed:
(a)Firstly, to pay costs and commission of sale;
(b)Secondly, to discharge any encumbrances on the property;
(c)Thirdly to pay any Capital Gains Tax and/or Goods and Services Tax arising from the sale;
(d)The balance be divided as follows:
(i)So as to effect a 75 percent division of the total non-superannuation asset pool to the husband; and
(ii)25 percent division of the total non-superannuation asset pool to the wife.
4.Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses in action) owned by or in the possession of such party as at the date of these orders.
(b)Each party forego any further claims they may have to any other superannuation benefits belonging to or earned by the other.
(c)Insurance policies remain the sole property of the owner named therein.
(d)Cash in any joint accounts is to be divided equally between the parties.
(e)Any monies or liabilities held in any bank or credit accounts remain the sole property of the owner named in whose name the accounts are held.
(f)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.
(g)Each party remain responsible for any debts in that party’s name.
(h)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE JENKINS:
This is a property matter concerning de facto partners, the applicant de facto husband, Mr Mesic and the respondent de facto wife, Ms Lazar. For the purposes of this judgment, I shall refer to the applicant as the husband and the respondent as the wife.
The parties are in dispute about the both the date of the commencement of the relationship and the date of separation. Although they largely agree on the pool, there is a dispute over whether the husband’s inheritance should be included, as well as a loan from his brother, and whether the pool should include capital gains tax (“CGT”) and goods and services tax (“GST”) relating to one of the properties.
The parties are also in dispute over the percentage division of the assets with the husband seeking a significant adjustment of the non-superannuation pool, of 80 to 90 per cent in his favour due to his initial contributions, his inheritance, and because of his post-separation contributions to the mortgages.
The wife concedes that contributions favour the husband but says they are partially offset by her future needs, given she is on a disability pension, and that he should receive 60 per cent of the non-superannuation pool.
BRIEF BACKGROUND
The husband is 66 years old.
The wife is 50 years old.
The husband and wife have no children together however they each have children from former relationships. In 2012, the wife’s children were aged eight and 14 years and spent time with the wife every second weekend and for a midweek dinner. The husband’s children were 12 and 16 years of age and lived with him on a week about basis. I understand that one of the husband’s children may have moved out shortly after the parties’ commenced living together although for reasons that I will go into nothing ultimately turns on this.
The wife says she began working for the husband’s business D Pty Ltd in 2011 and commenced a sexual relationship with the husband shortly thereafter. She says the parties began a committed relationship in mid-2011, when she moved into her rental property in Suburb F. She says that when the parties did not have their respective children in their care, that they would divide their time between her Suburb F property and the husband’s property at E Street, Suburb G. The wife says that in late 2012, she gave up her lease and moved into the Suburb G property at which point she considered the parties were in a de facto relationship.
The husband agrees the wife and her children moved into the Suburb G property in late 2012, but says she was simply a boarder. However, it was not possible to ascertain with any certainty when the husband says they met, when they commenced a sexual relationship and when he considers they commenced a de facto relationship. I shall return to this shortly.
In regard to separation, albeit the amended application relied upon by the husband at trial stated the date of separation was May 2020, the husband gave evidence at trial that the parties separated under the one roof in 2018. The wife says the parties were in a committed relationship until he moved out in May 2020.
During the relationship, the husband was a self-employed tradesperson and the wife continued to work for D Pty Ltd. Whilst the wife says she made a substantial contribution to the company, which enabled it to provide an income to the parties during the relationship, the husband says she performed only basic administrative work “on a very small scale”.
In 2014, the wife fostered a child, H who lived with the parties for the remainder of the time they lived under the one roof and in the wife’s care thereafter until mid-2021.
At the commencement of the trial, the only joint asset of the parties was a self- managed super fund (“the SMSF”). Otherwise, the majority of assets were in the husband’s name.
THE ISSUES IN THE CASE
·The date of the commencement of the de facto relationship;
·The date of separation;
·The parties’ initial contributions;
·The parties’ contributions during the relationship;
·The husband’s post-separation contribution by way of payment of the mortgages; and
·Whether the wife’s actions impacted the husband’s ability to work as a tradesperson; and
·Whether the wife’s capacity to work has been impacted as a result of the relationship.
DOCUMENTS RELIED UPON
The husband relied upon the following documents:
·his case outline filed 29 May 2024;
·his amended initiating application filed 3 May 2022;
·his trial affidavit filed 29 May 2024;
·his financial statement filed 29 May 2024; and
·the affidavit of Mr K, the husband’s brother, filed 20 June 2024.
The wife relied upon the following documents:
·her case outline filed 2 June 2024;
·her amended response to initiating application filed 3 June 2024;
·her trial affidavit filed 2 June 2024; and
·her financial statement filed 2 June 2024.
In addition, the following exhibits were tendered in this matter:
·W1 – consent orders of the wife and her former husband dated 12 September 2012;
·W2 – loan accounts of the husband and his former wife dated 1 January 2023 to 30 December 2023;
·W3 – loan accounts of the husband showing withdrawal to J Group on 18 June 2012 and 5 July 2012;
·W4 – loan accounts of the husband showing payment of $201,404 to the Deputy Commissioner of Taxation on 15 January 2013;
·W5 – loan accounts of the husband showing payment of $641,019.30 on 7 November 2013;
·W6 – L Unit Trust trading statement for the year ended 30 June 2015;
·W7 – M Bank statements in the wife’s name for the period of 14 August 2011 to 13 September 2011;
·H1 – valuations of the properties situated at N Street, Town O and B Street, Suburb C;
·H2 – loan agreement between the husband and Mr K;
·Joint exhibit J1 – proposed final minute dated 27 June 2024; and
·Joint exhibit J2 – updated joint table of assets and liabilities dated 27 June 2024.
THE EVIDENCE
The final hearing of this matter commenced on 26 June 2024 and concluded on 27 June 2024.
I have had regard to the contents of each of the affidavits filed by the parties, save for any parts which were determined to be objectionable. I have not had regard to the contents of any annexures to affidavits[1] or read any subpoenaed material, information provided by agencies such as the Department of Families, Fairness and Housing (“the DFFH”) or documents in tender bundles, court books or otherwise emailed to the court, which were not separately tendered into evidence as exhibits. As the court observed in Walpole & Secretary, Department of Communities and Justice [2020] FamCAFC 65:
The Full Court has said more than once that a judge cannot be expected to rummage through a large volume of documents on the off chance that the facts might emerge.[2]
[1] See Rule 8.15 (3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021(Cth).
[2] Walpole & Secretary, Department of Communities and Justice [2020] FamCAFC 65 at [53].
It has not been possible to include every aspect of each of the parties’ evidence. However, I have taken all of the evidence into account. Just because I have not mentioned something in these reasons does not mean that I have not considered it. As per the High Court in Whisprun Pty Ltd v Dixon [2003] HCA 48:
A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.[3]
[3] Whisprun Pty Ltd v Dixon [2003] HCA 48 at [62].
Section 140 of the Evidence Act 1995 (Cth) sets out that the standard of proof in these proceedings is to a balance of probabilities.
In this matter, the only witnesses called were the parties themselves and the father’s brother, Mr K.
This was a rare case where I found it almost impossible to follow the husband’s evidence as he repeatedly contradicted himself including the following evidence:
When the husband says he met the wife
The husband initially said under cross-examination that he first met the wife at his friend ‘Ms P’s’ business when he went to collect some items which “could have been” in 2011,[4] but did not see her again until in or around 2012, again at Ms P’s house.[5]
[4] Transcript 26 June 2024, p.18 line 10
[5] Transcript 26 June 2024, p.18 line 30.
He later said that he “quite possibly” took the wife to visit his brother-in-law in late 2011 and they “probably” shared a bed.[6]
[6] Transcript 26 June 2024, p.21 line 45.
He also said that in or about late 2011, the wife “possibly” did visit his father who had a medical condition but she “took herself” to visit him albeit it appears he was also there.[7]
[7] Transcript 26 June 2024, p.28 line 40.
The husband said as well that during 2011, he told the wife “time and time again” he did not want a financial future with her.[8]
[8] Transcript 26 June 2024, p.31 lines 30 & 45.
The wife’s employment by D Pty Ltd
In his trial affidavit, the husband says that at the commencement of the relationship the wife was unemployed.[9]
[9] The husband’s trial affidavit filed 29 May 2024 (“Husband’s trial affidavit”) at [21].
However, when it was put to him under cross-examination that she began working for D Pty Ltd in 2021 he said he did not know when and in what circumstances the wife came to be employed by D Pty Ltd as he said his son hired her.[10]
[10] Transcript 26 June 2024, p.35 lines 5 & 10.
However, under cross-examination the husband also said the wife was paid to do work with a project at approximately the beginning of 2012.[11]
[11] Transcript 26 June 2024, p. 34 line 45.
The commencement of the parties’ sexual relationship
Under cross examination the husband said he was “definitely not” in a sexual relationship with the wife in 2011.[12]
[12] Transcript 26 June 2024, p.24 line 1.
Further the husband said that when the wife lived in Suburb F (which was established to be between mid-2011 and late 2012), he would stay the night but “not necessarily with her.”[13]
[13] Transcript 26 June 2024, p.19 line 5.
Later under cross-examination the husband said he “possibly” had had sex with the wife prior to late 2011 although he could not remember because “sex was not a large part of our relationship.”[14]
[14] Transcript 26 June 2024, p.23 line 15.
In 2012 he says he had broken up with the wife for approximately six months and “had three other girlfriends.”[15]
[15] Transcript 26 June 2024, p.19 lines 5–10.
Later in his evidence, the husband said that the wife ended up in his room “periodically” in late 2012.[16]
[16] Transcript 26 June 2024, p.39 line 5.
However, the husband also maintained that at the Suburb G property, the wife slept in a room with her son, although he also gave evidence the wife and her son slept on the couch or on the floor, but also that her son shared a bedroom with his son.[17]
[17] Transcript 26 June 2024, p.39 line 35.
In his trial affidavit the husband said, “[Ms Lazar] and I began sleeping periodically with each other sometime in 2013.”[18]
[18] Husband’s trial affidavit”) at [6].
When the husband considered the parties were in a committed relationship and why
Under cross examination the husband said he was unable to commit to a relationship with the wife whilst he was “navigating the end of his relationship with [Ms Q],”[19] which he said in his trial material, ended in late 2013.[20]
[19] Husband’s trial affidavit at [20d].
[20] Husband’s trial affidavit at [20a].
Under cross-examination he said he repeatedly told the wife he “never” wanted to be in a committed relationship with her but changed his mind when he saw her looking after H (H came to live with them in early 2014).[21] However later on in his evidence said he considered himself in a committed relationship in 2015.[22]
[21] Transcript 26 June 2024 at p.37 lines 20-25.
[22] Transcript 26 June 2024 at p.62 lines 15-30.
In his trial affidavit he said he says the relationship was approximately 5 years and ended in 2020 again suggesting it commenced in 2015.[23]
[23] Husband’s trial affidavit at [8].
The date of separation
In his amended application, on which the husband sought to rely, he puts the date of separation as May 2020.[24]
[24] The husband’s amended application filed 3 May 2022 at [27].
In his trial affidavit he mentions periods of separation under the one roof but does not nominate a date for final separation, save for when he says he moved out in May 2020.[25]
[25] Husband’s trial affidavit at [8].
Under cross-examination, the husband said the parties separated under the one roof in 2018 when they moved into R Street.[26] He said this occurred at the same time they purchased a property at S Street, Suburb T (“the Suburb T property”) which was mid-2018.
[26] Transcript 26 June 2024, p.42 lines 25–35.
The finalisation of the husband’s property matter with ex-wife, Ms Q
In his trial affidavit, he said that in late 2013 he reached a property agreement with his ex-wife Ms Q,[27] yet whilst under cross-examination, he said he did not settle financial matters “fully” with his ex-wife until 2015.[28]
[27] Husband’s trial affidavit at [20a].
[28] Transcript 26 June 2024, p.56 lines 30–36.
In his trial affidavit, he says that from the settlement with Ms Q, he retained N Street, Town O (“the Town O property”) and B Street, Suburb C (“the Suburb C property”) and the Suburb G property, as well as his superannuation,[29] and yet under cross-examination, the husband gave evidence he could not recall exactly what happened with the settlement. He said his ex-wife’s girlfriend was a finance worker and managed all the money,[30] and that there was “that much money coming and going.”[31];
[29] Husband’s trial affidavit at [20c].
[30] Transcript 26 June 2024, p.51 line 15.
[31] Transcript 26 June 2024, p.51 line 5.
Under cross-examination he stated that he believed he was left with only $100,000 in debt at the end of the settlement.[32]
[32] Transcript 26 June 2024, p.55 lines 10 – 15; p.56 line 15.
He gave evidence that signed a binding financial agreement with Ms Q (which neither he or Ms Q or the lawyers had retained a copy of) and yet also maintained their agreement had been informal and that he had continued to give her money.[33]
[33] Transcript 26 June 2024, p.47 line 30.
The reliability of the parties evidence
As a result of the countless inconsistencies, I am unable to rely on the husband’s evidence where it is in dispute and not otherwise corroborated by other reliable evidence.
The wife on the other hand, gave her evidence in a relatively straightforward manner. Whilst there were some inconsistencies in her affidavit material, for example when she commenced working for D Pty Ltd,[34] these were the exception rather than the rule.
[34] See the wife’s trial affidavit filed 2 June 2024 at [16] where she says January 2013 which she amended in evidence in chief to read January 2011, whereas during cross examination she says December 2012.
Furthermore, for the most part she was a forthright witness who gave evidence with a degree of particularity that lent it an air of credibility. For example, the wife gave evidence about the husband frequenting her Suburb F rental home from mid-2011, where he assisted her with setting up beds for the children and plumbing in a bath and where they spent time together when they did not have their children in their care.[35] The wife also gave detailed evidence about her role at D Pty Ltd which I shall return to later in this judgment.
[35] Transcript 27 June 2024, p.17 lines 20–30.
I found that her evidence was not overly affected by emotion, and she made concessions where appropriate. For this reason, where the evidence comes down to that of the wife versus that of the husband, I prefer the evidence of the wife unless it is inherently unreliable or otherwise refuted by other evidence.
I find it somewhat unusual there were no witnesses called by either party to support the public nature of their relationship. The husband says the onus falls on the wife to establish a genuine domestic relationship, and therefore, for her to call any such witnesses. In reliance on the rule in Jones v Dunkel (1959) 101 CLR 298 (“Jones v Dunkel”), the husband asks the court to draw the inference that had the wife called witnesses, they would not have supported her case.[36]
[36] Jones v Dunkel (1959) 101 CLR 298 at [320].
However, I note that pursuant to authorities such as in Primrose Meadows Pty Ltd v River View Pty Ltd [2019] VSC 263, the rule in Jones v Dunkel does not require a party to call witnesses ‘to give merely cumulative evidence’ in support of the party’s case.[37] In my view, the wife has otherwise produced sufficient evidence by way of corroboration so that no such inference should be drawn.
[37] Primrose Meadows Pty Ltd v River View Pty Ltd [2019] VSC 263 at [23].
THE LENGTH OF THE RELATIONSHIP
Section 4AA (1)(c) of the Family Law Act 1975 (Cth) (“the Act”) defines a de-facto relationship as follows:
De facto relationships
Meaning of de facto relationship
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
(emphasis added)
In Fairbairn v Radecki [2022] HCA 18 (11 May 2022) the High Court (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ) heard an appeal from a decision of the Full Court of the Family Court of Australia in Radecki & Fairbairn [2020] FamCAFC 307. The High Court held:
The Act contains no exhaustive definition of the term ‘breakdown’, save that s 4 of the Act relevantly provides that in relation to a de facto relationship, it ‘does not include a breakdown of the relationship by reason of death’ …
…
…The primary judge found that the respondent’s conduct during the demise of the appellant’s mental capacity was inconsistent with a ‘fundamental premise’ of their relationship, namely the strict separation of their assets. That inconsistent conduct, all of which occurred while the appellant was ‘labouring under an incapacity’, comprised: the entry into a new enduring power of attorney that ‘favoured [the respondent’s] rights over hers’; the respondent instructing solicitors to prepare an updated will ‘on terms vastly more favourable to him’; the respondent’s ‘unwillingness to cooperate’ with the appellant’s children in the administration of her affairs; the respondent’s ‘persistent’ refusal to permit the Trustee to sell the home … while ‘neglecting to pay any of the [appellant’s] care costs’, thus depleting her estate; the respondent’s proposal that the appellant’s ‘super be used in the first instance to meet her costs’, and then his subsequent proposal that ‘he pay the … fees in the first instance and be reimbursed by the [appellant’s] estate’; and the respondent’s ‘ongoing and deliberate frustration’ of the Trustee’s lawful administration of the appellant’s financial affairs. The primary judge found that this conduct was ‘unequivocally indicative of and consistent only with … the cessation of the de facto relationship as it previously existed’.…
…
The Full Court reviewed the conduct identified by the primary judge. None of the conduct was found to be fundamentally inconsistent with a continuing de facto relationship …
The High Court continued:
… cohabitation of a residence or residences is not a necessary feature of ‘living together’. That phrase must be construed to take account of the many various ways in which two people may share their lives together in the modern world. Two people, for any number of reasons, may not reside in the same residence, but nonetheless be in a de facto relationship in the sense required by s 4AA.
…
The language of s 4AA of the Act and its reference to ‘living together’ requires no different approach to determining whether a relationship exists of the kind defined. ‘Living together’ … should be construed as meaning sharing life as a couple. Section 4AA does not prescribe any way by which a couple may share life together. Its language is sufficiently broad to accommodate the great variety of ways a de facto relationship may exist.…[38]
[38] Fairbairn & Radecki [2022] HCA 18 at [6], [21], [23], [33], [39].
The wife considers the de-facto relationship commenced in December 2012. She says from that time the parties lived together as a couple, cared for each other’s children, had Christmas together, holidayed together and that she worked in the husband’s business for a low wage as there was a mutual understanding she would ultimately benefit from it being profitable. She says that in 2018, the parties purchased a property together on which they intended to build their forever home and in 2019, purchased a property within their SMSF. The wife says that the parties were intimate throughout this period and the relationship only came to an end when the husband moved out of the home in May 2020.
I note that the wife’s timeline regarding the relationship was supported by her bank statements which showed that whilst living in Suburb F, she had spent time in Suburb G (some approx. 25 kms away) in late 2011 and Town O in late 2011 and early 2012, where the husband has a property. The husband’s explanation for this was to the effect that he often had large gatherings of people, with lots of drinking, at both the Suburb G property and the Town O property, and the wife could have been there without him knowing. Apart from the husband’s evidence being inherently unreliable, it is common ground that upon the wife moving into the Suburb G property that the myriad of other persons who lived there, of which there appeared to be numerous all moved out.[39] This supports the wife’s argument they were living together as a couple, rather than the wife being yet another boarder as asserted by the husband.
[39] See transcript 26 June 2024 at p. 21 lines 10-25 and p.38 line 45.
The wife also provided particulars about the parties celebrating Christmas together, which she believed was from 2012. The manner in which the wife gave evidence and the detail she provided leant credibility to her evidence on this topic.
It is also common ground the parties commenced L Pty Ltd (“L Pty Ltd”) together in 2013. The husband says it was “to allow her [the wife]to demonstrate her business acumen that she insisted she had.”[40] However, I simply do not accept the husband would enter into a business with the wife, with whom he says he was not in a committed relationship, when his evidence under cross-examination was “the wife is not the sort of person you talk to in a logical sense,” she “goes out and calls whales and dolphins,” and that one “does not discuss serious business with someone like that.”[41]
[40] Husband’s trial affidavit at [13].
[41] Transcript 26 June 2024 at p.35 line 25.
It is likewise highly unlikely the husband would choose to enter into a project to build an investment property with the wife in 2018, if the parties had indeed separated. According to the husband the wife had no industry experience, business acumen or indeed any significant income. Further to this, he said he did not need her to get the loan. Furthermore, it does not make any sense, that he would choose to purchase a property with the wife in a SMSF after separation – noting this occurred in 2019.
I also do not accept the husband’s evidence that he only remained living in the home to protect the children, in particular to protect H. It was evident that the husband moved out in May 2020, leaving H in the sole care of the wife and did not see H nor make any complaint to authorities for another 15 months.
Furthermore, if I accept the husband’s date of separation that he would require leave out of time to bring his property application which was filed in October 2020. At no time has the husband sought leave of this court to do so, despite being the applicant.
For all of the aforementioned reasons, I accept the evidence of the wife and find the parties lived in a genuine domestic relationship from December 2012 until May 2020.
THE LAW
The relevant legal principles governing any application for a de facto property settlement are set out in Part VIIIAB of the Act. Section 90SM(1) of the Act authorises the court to make such orders between the parties as it considers appropriate. Section 90SM(3) makes it clear that the court cannot make an order for a property settlement unless it is just and equitable to do so.
Earlier Full Court authorities have identified a four-step process that can assist the court in reaching a just and equitable decision: see Lee Steere & Lee Steere [1985] FamCA 57; Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395; and AJO & GRO [2005] FamCA 195. Although these authorities relate to marital relationships, the process is equally applicable to an application for a de facto property adjustment.
The first step for the court is to identify the parties’ existing legal and equitable interests in the assets arising from their relationship, together with their liabilities. The court should then assess each party’s contributions during the relationship in accordance with sections 90SM(4)(a), 90SM(4)(b) and 90SM(4)(c). The third step requires the court to consider the range of factors set out in sections 90SM(4)(d), 90SM(4)(e), 90SM(4)(f) and 90SM(4)(g), including the factors identified in s 90SF(3). The court should then consider those findings and if satisfied that it is just and equitable to do so, make orders adjusting the parties’ property interests.
The Full Court in Bevan & Bevan [2013] FamCAFC 116 (“Bevan”) at [62] refer to the joint judgment of Bryant CJ and Thackray J in Martin & Newton [2011] FamCAFC 233, where they reminded trial judges that the “four step process” is not legislatively mandated.[42] Rather, it provides a structured process towards the ultimate requirement, which is to ensure that a property settlement order is only made when the court is satisfied that it is just and equitable to do so, and that the terms of the order itself are also just and equitable.
[42] Bevan & Bevan [2013] FamCAFC 116 at [62].
THE ASSET POOL
At the conclusion of the proceedings, the parties handed up a balance sheet setting out the agreed assets and liabilities and those in dispute (“the balance sheet”) as follows:[43]
[43] Joint exhibit J2.
Joint Table of Assets and Liabilities Assets Owner Agreed Values N Street, Town O Husband $920,000 B Street, Suburb C Husband $1,590,000 Motor Vehicle 1 Husband $10,600 Vehicle 2 and tools Husband $14,000 Motor Vehicle 3 Wife $5,000 Total: $2,539,600 Liabilities Owner Agreed Values Debt owed to U Company Husband $6,068 Debt owed to V Company Husband $26,609 CC #...90 (D Pty Ltd) Husband $282 Mortgage Town O NAB #...17 Husband $111,775 W Company mortgage Suburb C Husband $41,905 CBA CC #...84 Husband $24,333 CBA #...40 Husband $1,927 CC Husband $2,776 Personal loan (Mr K) Husband $111,822 (disputed) Outstanding rates Town O Husband $6,611 Outstanding rates Suburb C Husband $9,919 Inheritance Husband $200,000 (disputed) CGT - Suburb C Husband $308,000 (to be calculated) GST - Suburb C Husband $150,000 (applicable on sale) Water rates Husband $1490 Total: $345,517 Net asset value: $2,194,083 Superannuation Super Fund 1 Joint $345,000 agreed subject to payment of compliance costs Superannuation Wife $17,493 The Superannuation
At the conclusion of the trial, the parties asked the court to make orders by consent providing for an equalisation of the parties’ superannuation in circumstances where they had contributed equally to the superannuation pool, and they wished to commenced winding up the SMSF.
Although the Full Court has made it clear that it is ordinarily in the interests of the parties for there to be just one final property order,[44] having heard all of the evidence in this case, I was satisfied this would not compromise the parties’ final property claims.
[44] See Harris & Harris [1993] FamCA 49
Having made that order the asset pool will be adjusted accordingly.
Otherwise the three matters in dispute were:
·The inheritance;
·The loan from the husband’s brother, Mr K; and
·The CGT and GST with respect to the Suburb C property.
The Inheritance
It is common ground that in 2019, the husband inherited approximately $200,000 in cash plus about $5,000 worth of stock and other equipment from his late father. In his trial affidavit, the husband says he “contributed a significant amount” of the inheritance into his company L Pty Ltd, although he could not “say for certain as to the exact amount.”[45]
[45] Husband’s trial affidavit at [31].
Under cross-examination the husband said he put “some of the funds”[46] into that company and some into the superannuation fund, but again stressed that he was “a [trade] manager not a financial manager.”[47] Doing the best I can with the evidence, it appears that $130,000 may have been put into L Pty Ltd and the remainder applied to bills and the superannuation fund.[48]
[46] Transcript 26 June 2024 p.63 lines 5-15.
[47] Transcript 26 June 2024 p.65 line 1.
[48] Transcript 26 June 2024 p.80 lines 30-34.
Nonetheless, the husband’s counsel submitted the court should find the inherited funds still existed in the pool and because they were received post-separation (on the husband’s case), and that they should be quarantined from the pool and retained by the husband. Counsel relied upon the cases of Bonnici & Bonnici [1991] FamCA 86 and Figgins & Figgins [2002] FamCA 688 in support of this assertion. However, Counsel also conceded that subsequent to these cases, that authorities, such as the case of Flanagan & Sobek (Deceased) [2014] FamCA 696, have since held that although the court may choose to quarantine an inheritance, it is not required to do so.[49]
[49] Flanagan & Sobek (Deceased) [2014] FamCA 696.
Regardless, I do not accept that the funds remain in the pool, save for the superannuation which has already been divided. Any funds injected into L Pty Ltd from the inheritance appear to have been long since spent on the running of the business and/or funding the parties’ lifestyle. I note the husband’s evidence that “the company garnered no real profits and was ultimately place [sic] into involuntary liquidation in 2021.”[50] Consistent with this, no reference is made to L Pty Ltd in the balance sheet.
[50] Husband’s trial affidavit at [12].
In such circumstances, I do not propose to quarantine the husband’s inheritance. However, it is a matter that I shall return to under section 90SM(4).
The loan from Mr K
The husband asserts that he owes his brother, Mr K, $118,822. Mr K filed an affidavit in support of the husband and was also cross-examined during the proceedings. Mr K’s evidence is that he transferred to the husband a number of payments totalling $90,000 between 31 May 2021 and 18 August 2023.[51] The husband relied upon a signed but undated loan agreement between himself and Mr K.[52] Mr K annexed a copy of the same loan agreement to his affidavit but this one was signed and dated 15 February 2024.[53] Mr K’s evidence was that he signed this agreement on that date but that husband had trouble with his pdf signature and therefore did not actually sign it until June 2024. I note this occurred after the original listing of the trial and that the date was not amended on the agreement itself.
[51] Affidavit of Mr K filed 20 June 2024 at [4].
[52] Husband’s exhibit H2.
[53] Affidavit of Mr K filed 20 June 2024, annexure “MRK-1.”
Whilst I accept Mr K transferred $90,000 to the husband between May 2021 and August 2023, I am not satisfied that the brothers had any formal loan agreement in place when the funds were transferred. Furthermore, although there may have been an understanding that the husband pay his brother back at some stage, I do not accept that the husband was required to pay interest on the monies. Not only was the 10 percent interest rate seemingly high for a loan between family members, Mr K gave evidence that it was actually the husband, not himself, who proposed the rate. It appears that at some time after the first funds were transferred, possibly in November 2021 being the date typed into the alleged loan agreement, the brothers decided to formalise the agreement although neither signed the agreement at the time.
However, even if the loan agreement were enforceable, there is no dispute that the alleged loan occurred post-separation and that the wife was not a party to it. Furthermore, the husband’s evidence about how the funds were applied was again inconsistent and unclear. In his trial affidavit he says he applied $50,000 towards legal fees,[54] whilst under cross-examination he said he spent $30,000. Otherwise, the husband said the remainder was spent on credit card debts, rates and mortgages.
[54] Husband’s trial affidavit at [54].
If some of the funds were applied to the mortgages and rates then the wife may have benefited from same, however given the husband does not quantify the amount or provide any documentary proof, I cannot be satisfied this was the case. I am also mindful that given a significant proportion of those funds may have been applied on legal fees, that if the loan were included in the pool, it would be akin to the wife paying some of the husband’s legal fees.
In such circumstances, I do not propose to include the alleged loan from Mr K, or any part thereof, in the pool.
The CGT and GST
Authorities such as Rosati & Rosati [1998] FamCA 38 and Dovgan & Dovgan [2021] FamCA 306 make it clear that liabilities such as CGT and GST should only be included in an asset pool if it is reasonably foreseeable that they will be incurred.[55] In this case, it is not known if the husband will have to sell the Suburb C property to payout the wife but he expressed concerns that he may have to, and in my view, such a sale is reasonably likely.
[55] Rosati & Rosati [1998] FamCA 38; Dovgan & Dovgan [2021] FamCA 306.
In such circumstances, it is appropriate that any CGT and/or GST (if applicable) be paid out of the proceeds of any such sale before the balance is divided.
DETERMINATION AS TO THE ASSET POOL
Having dealt with the disputed assets, I find the asset pool for division between the parties to be as follows:
Joint Table of Assets and Liabilities Assets Owner Agreed Values N Street, Town O Husband $920,000 B Street, Suburb C Husband $1,590,000 Motor Vehicle 1 Husband $10,600 Vehicle 2 and tools Husband $14,000 Motor Vehicle 3 Wife $5,000 Total: $2,539,600 Liabilities Owner Agreed Values Debt owed to U Company Husband $6,068 Debt owed to V Company Husband $26,609 CC #...90 (D Pty Ltd) Husband $282 Mortgage Town O NAB #...17 Husband $111,775 W Company mortgage Suburb C Husband $41,905 CBA CC #...84 Husband $24,333 CBA #...40 Husband $1,927 CC Husband $2,776 Outstanding rates Town O Husband $6,611 Outstanding rates Suburb C Husband $9,919 Water rates Husband $1490 Total: $233,695 Net asset value: $2,305,905 Superannuation Super Fund 1 Joint $181,246 less compliance costs Superannuation Wife $181,246 less compliance costs IS IT JUST AND EQUITABLE THAT AN ORDER BE MADE?
Having identified the parties’ assets and liabilities, and prior to making any order pursuant to section 90SM of the Act, I must first be satisfied that it is just and equitable that any order be made pursuant to s 90SM(3) of the Act, as per the High Court decision of Stanford v Stanford [2012] HCA 52 (“Stanford”). There is no presumption that the parties’ entitlements in the existing asset pool should be altered, or that one party has the right to have the property of the parties divided between them. In these proceedings, although both of the parties urge the court that it is just and equitable that orders be made to alter their interests in their property, the existence of such an agreement is not sufficient, the court must still be satisfied that such orders are indeed just and equitable in all the circumstances of the case.
In Stanford, their Honours, in the joint judgment of French CJ, Hayne, Kiefel and Bell JJ, considered the expression “just and equitable” and noted that it:
… is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.[56]
[56] Stanford v Stanford [2012] HCA 52 at [36].
Furthermore, although the court must not conflate the determination pursuant to section 90SM(3) of the Act with its determination pursuant to section 90SM(4) of the Act, the court made it clear in Bevan at [86] that the just and equitable requirement is not a threshold issue, “but rather one permeating the entire process.”[57]
[57] Bevan & Bevan [2013] FamCAFC 116 at [86].
Accordingly, I shall return to this at the conclusion of the judgment.
CONTRIBUTIONS – SECTION 90SM(4)
In determining what orders are to be made pursuant to section 90SM of the Act, the leading cases predominantly concern section 79 of the Act, which covers parties who are married; however, the principles are applicable to both sections.
The approach of the court when assessing contributions was set out in Aleksovski & Aleksovski [1996] FamCA 111 (“Aleksovski”) in which it was stated the court must:
…weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.[58]
[58] Aleksovski & Aleksovski (1996) FLC 92 705 (“Aleksovski”) at [83,437].
In Aleksovski His Honour Kay J said:
The Judge must weigh up various areas of contribution. In a short marriage, significant weight might be given to a large capital contribution. In a long marriage, other factors often assume great significance and ought not be left almost unseen by eyes dazzled by the magnitude of recently acquired capital… What is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship.[59]
(emphasis added)
[59] Aleksovski at [83,443].
Those observations were quoted with approval by the Full Court in Dickons & Dickons [2012] FamCAFC 154 (“Dickons”). In Dickons, their Honours, Bryant CJ, Faulks and Murphy JJ said that “…the requirements of the section are met by approaching the assessment of contributions holistically…”, by analysing the contributions of all types, and by reference to the particular circumstances of that particular relationship.[60]
[60] Dickons & Dickons [2012] FamCAFC 154 (“Dickons”) at [21].
In determining any application for property settlement, the court is not embarking upon an arithmetical exercise but rather an examination of all the relevant factors set out in section 90SM(4). As noted by the Full Court in D & D [2003] FamCA 473:
… the task of the court in proceedings under s 79 is not akin to an accounting exercise. The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions.[61]
[61] D & D [2003] FamCA 473 at [49].
Initial Contributions
It is not in dispute that the husband brought into the relationship the Suburb C property and the Town O property, which remain in the asset pool and are largely unchanged. It is conceded that any increase in value is largely due to market forces. The parties are, however, in dispute about the net equity the husband had in those properties at the commencement of the relationship.
The husband confirmed under cross-examination that the assets he brought into the relationship were contained in paragraph 19 of his trial affidavit. However, this paragraph, like much of the husband’s other evidence, contained obvious errors including that he brought in L Pty Ltd and X Company, when he later says he and the wife established those companies together.[62] Furthermore, it is not clear from that paragraph which date he is referring to as the “start” of the relationship.
[62] Husband’s trial affidavit at [13].
Nonetheless, the husband relied upon retrospective valuations for the Suburb C and Town O properties as at early 2013, which were tendered into evidence by consent. This showed the value for the Suburb C property as at early 2013 to be $415,000 and the Town O property to be $500,000.[63] Given I have found the relationship commenced in December 2012, I accept those figures to be the market value of the properties at the commencement of the relationship. However, it is still not possible on the husband’s evidence to determine what equity the husband had in those properties at that time given he may not have finalised his property settlement with Ms Q. Such a settlement may have involved the husband increasing those mortgages or obtaining other finance to pay out his ex-wife. Even if I was prepared to accept the husband’s final version of events, that he was left with only $100,000 in debt after that settlement, I am still unclear what point in time he is referring to.
[63] Husband’s exhibit H1.
I note however that the wife says in her trial affidavit the following:
13. [Mr Mesic] and his former Wife resolved their family law matters in 2013. I understand that settlement involved [Mr Mesic] receiving the following:
a.He retained the [Suburb C] property and borrowed $250,000 against that property to pay out his former Wife;
b.He also retained the [Town O] property which was subject to a mortgage of $200,000.
c.He also retained [Suburb G] which was fully encumbered.
d.He also retained [D Pty Ltd].[64]
(As per original)
[64] The wife’s trial affidavit filed 2 June 2024 (“Wife’s trial affidavit”) at [13].
Although for reasons already stated I prefer the evidence of the wife to that of the husband, I am still unclear when exactly the settlement with Ms Q occurred. Therefore, when the wife asserts that the husband paid out a debt to the Australian Tax Office in January 2013 in the sum of $201,404,[65] I do not know if this predated the settlement or not. Furthermore, whilst the wife says the husband had also borrowed funds from J Group in late 2012,[66] it was unclear if he still owed those amounts at the commencement of the relationship, and the wife says that subpoenas to the group did not furnish any records.
[65] Wife’s trial affidavit at [15].
[66] Wife’s trial affidavit at [11].
Consequently, I cannot say with any certainty what equity the husband had in his properties at the commencement of the relationship. However, I note the mortgages are now fairly low and given the husband’s business did not appear to be particularly profitable, it is unlikely he was able to make substantial additional contributions to the mortgages during the relationship. I am prepared to infer from this that they were relatively low to begin with. I therefore find that the husband made a significant contribution by way of those properties.
In regard to the wife’s initial contribution, her evidence is that in late 2012, she settled her property matter with her former partner and received $130,510 by way of a $100,000 upfront payment and monthly payments of $1695 for 19 months, and $70,000 by way of superannuation.[67] The wife’s evidence is that at the commencement of the relationship she had received $83,203.39 of the cash plus $70,000 by way of superannuation.[68] The wife says she used these funds for the benefit of both parties, including a holiday which they both attended.
[67] Wife’s trial affidavit at [7].
[68] Case Outline filed by the wife 2 June 2024 at p.5.
The husband accepts the wife received those amounts but denies they were used for the benefit of the parties. He says the cash was spent on the wife’s business debts, legal fees, holidays on her own, and for a failed business. The wife’s bank statements as to her spending do not take this any further, however for reasons already stated, I accept the evidence of the wife and find she contributed $83,203.39 at the commencement of the relationship and that these funds were applied for the benefit of both parties.
As the parties agree they contributed equally to their superannuation and it has been divided accordingly I do not take into account the superannuation either party had at the commencement of the relationship.
Contributions during the relationship
The husband maintained in his evidence that the wife’s involvement in L Pty Ltd, was “extremely limited due to her lack of experience in the building industry,”[69] and that was why she was paid a low income. However, if I accept this, it is hard to understand why he made the wife a co-director of the company in 2016.
[69] Husband’s trial affidavit at [22].
Conversely, the wife’s evidence is that she worked long hours in the business, for very low wages, because the parties otherwise lived off the profits of the business.
Under cross-examination the wife’s evidence was that she was able to draw on her previous experience in hospitality work to do the following tasks:
·organising trades;
·overseeing construction schedules;
·coordinating construction flow on site;
·paying bills;
·organising subcontractors; and
·ensuring deliveries were on time.
I found the wife’s evidence in this regard particularly persuasive and for reasons already stated, I prefer the evidence of the wife.
I also note that the husband minimises the wife’s involvement in the business but also asserts the business began to fail because she was no longer applying her energies to it. The husband said in his evidence:
And at that time I was [working] for [L Pty Ltd] and [Ms Lazar] was putting no effort into it all. Which, to her credit, she was trying to save the child from being taken back. And so consequently the companies just fail. They just – you couldn’t do it on your own. You’re trying to build and order things. You need office staff and someone good in the office, and you need to be on site. That’s the only way to run a solid building company.[70]
[70] Transcript 26 June 2024, p. 45 lines [10] – [15].
This suggests that not only was the wife making a substantial contribution to the business, but that the business was dependent on her contribution to be viable. The husband also gave evidence that “when she was not drinking, she was quite good at doing what she does.”[71]
[71] Transcript 26 June 2024, p.78 line 46.
I therefore do not accept the husband’s evidence that he “met all outgoings and expenses during our short relationship,”[72] or that the wife made “nominal financial contributions during the relationship.”[73]
[72] Husband’s trial affidavit at [22].
[73] Husband’s trial affidavit at [23].
Furthermore, it appears common ground that for a period of 18 months, the wife received regular payments of $1,695 per week as part of her property settlement with her ex-husband. She says these funds were used for the parties’ mutual benefit. The husband says the wife applied these monies for her sole benefit. I again prefer the evidence of the wife.
In terms of the husband’s inheritance, I have found that it is probable that $130,000 was injected into the business and some additional funds spent on bills. As such I find it is also likely the funds assisted in keeping the business afloat which in turn provided income to the parties when they may otherwise have had to dispose of assets still in the pool. However, for reasons already explained I have not considered any funds contributed to the SMSF from his inheritance as a contribution by him.
In terms of the parties’ non-financial contributions, it appears they both contributed to the household to the best of their abilities. Whilst each party took issue with the other’s contribution to the housework and care of the children, I do not find it necessary to delve into the detail of the tasks each completed save to say they appear to have divided their task along traditional lines with the wife doing most of the cooking and the husband the garden and house maintenance.
Furthermore, whilst two of the husband’s children may have spent greater time in the household than the wife’s two children, the wife’s foster child H lived full time with the parties from about early 2014. Factoring all of this in, the circumstances do not call for any further adjustment pursuant to authorities such as Robb & Robb [1994] FamCA 136 and indeed neither party asked me to do so.
Post separation contributions
It was submitted on behalf of the husband that he had paid all of the mortgages post separation and should receive a further adjustment on this basis. However, under cross-examination he conceded that he had not been paying the mortgage on the Town O property,[74] and that it had increased from $90,000 to $111,000.[75] This was in circumstances where the property had either been rented out and he had been receiving rent or he otherwise had the sole benefit of using that property.[76] Indeed, it would have been arguable that the rent be added back to the pool, although this was not raised.
[74] Transcript 26 June, p.65 line 45.
[75] Transcript 26 June, p. 65 lines 40 – 45.
[76] Transcript 26 June, p.66 line 1.
Likewise, the husband had the sole benefit of the Suburb C property and should not receive any credit for making mortgage payments on same noting that in the same period the wife had to pay rent. Whilst the husband later denied living at the Suburb C property, claiming to be couch surfing, he gave it as his address when called to give evidence and presumably benefited from using it as a business premises or if not could have rented it out.
FACTORS PURSUANT TO 90SF (FUTURE NEEDS)
The husband’s case is that he is unable to work as a tradesperson because of the actions of the wife, who he says caused him to lose his licence, and that his work is now limited to unqualified work.
The husband’s argument, as best as I understand it, is that he lost his licence because L Pty Ltd was trading insolvent. He says the reason for that was because the wife refused to agree to borrow any more funds to complete the Suburb T property, or to pay out a judgment debt ordered against the company in the Victorian Civil and Administrative Tribunal (“VCAT”).
The wife denies being put on notice that the business was trading insolvent or that the husband was likely to lose his licence. She also says there was no need to borrow any more funds, as the original loan obtained to build the Suburb T property was more than sufficient to finish the build, and that because the husband had not fully accounted for the funds already borrowed, she was not prepared to get into any further debt. Furthermore, the wife says the VCAT order provided that the husband either fix the defects or pay the sum to the purchaser, and that the husband was more than capable of repairing the defects.
The husband conceded under cross-examination that they may have overrun the project, and that some of the funds may have “gone sideways” into the company.[77] Nonetheless, the husband’s evidence is that his brother, Mr K, was prepared to lend him the additional funds if the wife agreed to sell the property at the conclusion of the build and presumably pay him back, but as she would not agree the funds were not provided. This is despite the evidence that Mr K did in fact lend him funds for other purposes, without such a guarantee, at around that time.
[77] Transcript 26 June, p.67 line 15.
I again accept the wife’s evidence that the parties originally borrowed sufficient funds to complete the Suburb T build and that the husband did not properly account to her for the funds he says he diverted into the business. In such circumstances it was not unreasonable for the wife to resist going into further debt but that in any event his brother was prepared and indeed did lend the husband money without the wife’s agreement to an immediate sale of Suburb T on completion.
I also accept her evidence that the husband could have rectified the defects that lead to the VCAT judgment without further borrowings. Consequently, I find that if the husband lost his licence as a result of the business trading insolvent, it was due to matters entirely within the husband’s control and not the responsibility of the wife. There is also no evidence to corroborate the husband’s assertion that is unable to have his trades licence reinstated.[78]
[78] The husband’s trial affidavit filed 29 May 2024 at [49].
In any event, it is evident the husband is able to continue to work whilst the wife is living off a disability pension. Although there was no medical evidence provided by the wife, I am of the view I can take judicial notice that the wife provided sufficient evidence to the government as to her disability.
The wife’s evidence is that she is on a disability pension for psychological reasons resulting from the removal of the child H from her care. She says this came about because the husband reported her to the DFFH in mid-2021 and that he did so because of her refusal to agree to borrow the aforementioned funds. She says the husband’s actions triggered the DFFH, with whom she had had an ongoing dispute, to take action against her. She gave evidence that DFFH had previously alleged that she was attempting to use H to defraud the National Disability Insurance Scheme but that she was ultimately vindicated in the Federal Court. The wife says that as a result of this complicated history, that when the husband reported her to DFFH, they were quick to act on removing H from her care.
As I have already stated, I do not accept the husband’s evidence that he was fearful for H’s safety, given he left her in the wife’s sole care for over fifteen months. It also seems that the Suburb T property was sold some time before the husband’s report to DFFH which supports the wife’s evidence.
Having heard the wife give evidence and seen how emotional she was in regard to this topic, it seems highly possible that the husband’s actions did indeed lead to her psychological deterioration. However, without medical evidence I am not prepared to make a finding as to the actual cause of that deterioration and whether this is the reason for the wife now being on the disability pension.
DETERMINATION
The husband initially argued that the court should take an asset-by-asset approach pursuant to Anson & Meek [2017] FamCAFC 257 to assess contributions however in final submissions conceded that a global approach was more appropriate.
In taking such an approach, I accept that this was a relatively short relationship and that the husband made a significant initial contribution. However, I would fall into error if I were to endeavour to weigh up that contribution against the other contributions in this case.[79] Rather, I must assess the husband’s initial contribution amongst the myriad of contributions identified in this judgment. Having done so, I find that the husband should receive an adjustment in his favour of thirty per cent based on contributions.
[79] Jabour & Jabour [2019] FamCAFC 78.
Nonetheless, in terms of future needs, I find that the husband has a greater earning capacity than the wife. Even without a trades licence, the husband is able to earn money, albeit of a modest nature, whilst the wife is on a disability pension. Whilst this was a relatively short relationship and I cannot directly attribute the wife’s current capacity to earn a living to that relationship, I note that other than superannuation and her car, the wife has no property or financial resources.
In all of the circumstances, I determine the wife should receive a 5 per cent adjustment in her favour for her “future needs”. This would result in an overall adjustment in the husband’s favour of 25 per cent. However, in Clauson & Clauson [1995] FamCA 10, the Full Court said that the court must stand back and consider the division in monetary terms when assessing whether the adjustment is just and equitable.[80] 25 per cent of the asset pool would result in the wife retaining her car and receiving a payment of $571,476.25 dollars whilst the husband would retain equity in his assets of $1,729,429. In all of the circumstances of this case, I find that such a division is just and equitable.
[80] Clauson & Clauson [1995] FamCA 10 p.33.
The parties otherwise agreed on the form of orders including that the husband have 120 days to make the payment to the wife before the Suburb C property has to be sold.
As discussed, in the event of a sale I will order that any CGT and/or GST be paid out of the proceeds.
For all the aforementioned reasons, I make the orders as set out at the commencement of these reasons.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Jenkins. Associate:
Dated: 9 September 2024
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