MS MANATOS AND MR MANATOS

[2003] FamCA 227

FAMILY LAW ACT 1975
FAMILY COURT OF AUSTRALIA

AT SYDNEY  FILE NO:SYF 2467 of 2001

BETWEEN	MS MANATOS (Applicant)
AND	MR MANATOS (Respondent)

DATE OF HEARING:	12, 13 December 2002, 20 February 2003
DATE OF JUDGMENT:	26 March 2003

JUDGMENT OF THE HONOURABLE JUSTICE BOLAND

APPEARANCES:	Mr Serisier of Counsel instructed by Walker Kissane & Plummer, DX 8593 Burwood, appeared on behalf of the Applicant.
Mr Gould of Counsel instructed by Karras Partners, DX 3622 Double Bay, appeared on behalf of the Respondent.

APPLICATION

1. This is a dispute about how the property of Mr and Ms Manatos should be divided following the breakdown of their five year cohabitation.  Identification of the parties’ assets and liabilities is relatively straight forward.  Those assets include a unit and the parties’ matrimonial home.  The parties agree those two properties, which are both located in the Sydney suburb of Suburb C, have a total value of $660,000.  They also agree on the sum they are indebted in respect of mortgages over those properties.  The parties are not in agreement about how a common law damages award received by the husband in early 2002 should be valued for these proceedings.  They are in dispute about how their respective contributions from the commencement of their marriage to the date of the hearing should be assessed.  That dispute involves principally three areas of contention:

·     the weight to be given to initial contributions;

·     whether the common law damages award was wasted or diminished negligently by gambling activities;

·     contributions by the parties’ families particularly to renovations and costs, including mortgage repayments, in respect of the matrimonial home.

1. The parties are also in dispute about the appropriate adjustment to be made under s.75(2) of The Family Law Act 1975(Cth)(“the Act”).  The issues relevant to that sub-section are the health of the husband, his likelihood of employment, and the wife’s care and substantial financial support of the parties’ young son.

1. The formal applications before me are the Application of Ms Manatos (“the wife”) filed 12 February 2001 as amended on 17 April 2001, 5 July 2002 and as further amended in the Minutes of Order sought in the wife’s summary of argument document.

1. Mr Manatos (“the husband”) in his Response filed 6 June 2001, and Amended Responses filed 29 November 2001 and 23 September 2002 opposes the orders sought by the wife, including orders that the only child of the marriage X born 1999 live with her.

1. On the first day of the hearing before me the parties reached agreement about parenting issues and I made consent orders which provided essentially that X live with the wife, and have regular weekly contact with the husband increasing to overnight and school holiday contact once he commences school.

1. In her Minute of Order the wife seeks that the husband transfer to her, free from encumbrance, his interest in the property B Street, Suburb C (“the matrimonial home”).  This order requires the husband to discharge the mortgage which the parties agree presently stands at $86,583, that each party keep certain furniture, and that they each retain property in that party’s name.  The effect of this order, if made, is that the wife will retain the property D Street, Suburb C (“the unit”) and be solely responsible for the mortgage secured on it.  The husband will retain the balance of his damages award, his motor vehicle and personal possessions.  Each party would retain their own present small superannuation entitlement.

1. By contrast the husband proposes in his Further Amended Response filed 23 September 2002 that he pay he pay to the wife the sum of $126,257 and that on payment of that sum the wife transfer to him her interest in the matrimonial home, and otherwise each party retain their personal property.  Implicit in the husband’s proposal is that he will indemnify the wife in respect of the mortgage secured over the matrimonial home. 

1. Each party’s counsel approached the assessment of the parties’ contributions on a different basis.  The wife’s counsel, Mr Serisier, submitted that the correct approach in this matter is a “global” approach, and the husband’s counsel Mr Gould submitted that the parties’ contributions should be assessed on an “asset by asset” basis.  I return to these submissions later in my judgment.    

SHORT HISTORY

1. The husband was born 1968.  He is accordingly aged 34 years.  The wife was born 1968.  She is accordingly aged 34 years.  The parties were married in 1995.  They separated on 28 December 2000.  A Decree Nisi of Dissolution of their marriage became absolute in mid-2002.  X is the only child of the marriage.  He is presently aged 4 years.

ISSUES

1. There is no dispute between the parties in respect of the identification of and value of their property except the sum to be included in the parties' list of assets and liabilities to represent the husband's common law damages award.  The wife seeks to include the whole of the award received by the husband and the husband seeks to include only what he asserts to be the remaining balance.  In issue in so far as the parties' respective contributions are concerned is the weight to be given to the wife's initial contribution of the unit, the contributions by each party's family, particularly their respective fathers, to renovations to the matrimonial home and provision of funds.  In issue so far as the wife is concerned is the husband's use of his damages award post separation, and failure to pay child support. 

1. The relevant matters for consideration under s.75(2) which are in dispute between the parties is the appropriate adjustment to be made having regard to the husband’s health and his inability to obtain any social security for the next 6 to 7 years, the fact that X lives with the wife, the low level of child support payable by the husband, and the husband’s use of his settlement monies.

BACKGROUND HISTORY

1. In about 1993 the wife purchased the unit for a purchase price of $180,000.  The wife alleges she had at that time accumulated savings of $40,000 and her parents gifted her the sum of $20,000, which she applied to the purchase price.  The wife initially borrowed $120,000 from the National Australia Bank (“NAB”) to complete the purchase.  The borrowings were later refinanced with E Trustees Limited.  The unit is leased and the income received from the unit covers the outgoings.  The wife’s father paid the legal costs and Stamp Duty associated with the purchase.

1. In late 1995 the parties married and commenced cohabitation in a flat above the wife’s father’s business.

1. The wife asserts at the date of the marriage she owned the unit and that she had cash savings, furniture and furnishings and a superannuation entitlement.  Additionally she says the parties received cash wedding gifts. 

1. The husband asserts at the time of the marriage he had proceeds of sale of a motor vehicle worth $19,000, joint savings with the wife and one half of the cash wedding gifts. 

1. The wife asserts at the commencement of cohabitation the husband was not employed. 

1. The wife asserts she was employed throughout the marriage by her father and she remained in this employment until shortly prior to the birth of X.  She says after X’s birth she worked for her father on a part time basis until late 2000 working approximately 16 hours per week, and after separation ceased working until mid-2001 when she says she commenced working on a part time basis six hours per week.

1. The wife says after the marriage the husband had various periods of employment including employment with F Company, G Company, and H Company.  The wife says between 1996 and 1997 the husband had periods of employment with J Pty Ltd, K Pty Ltd and finally at L Company, Suburb M. 

1. In mid-1997 the parties purchased the matrimonial home for a purchase price of $200,000.  The wife asserts the parties funded the purchase from a deposit of $50,000 from their joint savings and borrowings from the NAB of $151,000.  In her affidavit the wife asserted her father paid the legal costs associated with the purchase and Stamp Duty.  She conceded during the hearing that her father had not paid the Stamp Duty.  The Stamp Duty was paid by the husband’s father.  The wife asserts that the deposit was funded from savings from her bank account of $8,000, the proceeds of sale of the husband’s motor vehicle of $19,000, cash wedding gifts of approximately $10,000, the parties’ joint savings of $6,000 and a first home buyers’ allowance of $7,000.  The husband does not dispute the wife’s assertions.

1. In early 1998 the husband was injured in the course of his employment with L Company. 

1. A short time later, the husband underwent surgery as a result of his accident.  After the husband’s accident he received workers’ compensation payments and ultimately filed a common law claim in the Supreme Court of NSW. 

1. Following the purchase of the matrimonial home the parties, with the assistance of family members, carried out extensive renovations to the home.  The wife asserts that her father paid the sum of $27,787 towards renovation expenses and also engaged in work at the home. 

1. In May 1998 the husband asserts that his father paid the wife’s father $6,600 to reimburse him for half of the building materials purchased for the matrimonial home. 

1. In late 1998 the husband asserts he made an application to the NAB for mortgage payments to be met pursuant to a mortgage protection insurance policy. 

1. The parties’ only child, X, was born 1999.  Shortly prior to X’s birth the parties moved into the matrimonial home and the wife ceased working at her father’s business.

1. In early1999 the insurer declined to indemnify the parties under the mortgage protection insurance policy.

1. In early 1999 the husband’s employment was terminated and he thereafter received weekly payments of workers compensation from N Limited. 

1. From early 1999 the husband’s father made payments due pursuant to the mortgage on the parties’ behalf in a total sum of $13,300.  These payments remain due and outstanding to the husband’s father. 

1. In late 1999 the parties commenced receiving mortgage payments pursuant to the insurance policy including a lump sum payment of $30,648 which was applied in reduction of the mortgage. 

1. In about late 2000 the wife commenced working on a part time basis in her father’s business. 

1. On 28 December 2000 the parties separated and the wife left the matrimonial home and took up residence with X in her parent’s home. 

1. In early 2001 the husband, after an application by the wife to the Child Support Agency, was assessed to pay child support in the sum of $21.67 per month.

1. In early 2002 the husband received a net personal injury damages award in settlement of his common law claim.  The common law claim was settled on the basis of a verdict in favour of the husband as plaintiff and that the defendant pay the husband’s costs.  The husband received the sum of $382,261.97 (“the first payment”) in early 2002 which he caused to be deposited into an account operated by his brother in law, Mr O.

1. In early 2002 the husband alleges he commenced gambling.

1. In about early 2002 the husband asserts that he received the balance of his common law settlement monies which was the sum due after reimbursement to the Health Insurance Commission.  He says he spent the sum on living expenses and gambling.

1. The husband says in the period from the receipt of his settlement funds until about mid-2002 he gambled approximately $180,000 - $200,000 at P Limited.  He says at that time he realised he had a problem and had himself barred from P Limited. 

1. The husband says thereafter Mr O transferred $137,000 of the settlement funds to his own account to hold for the husband and that he gave a further $30,000 to his father.  The husband asserts that his father has advanced sums of about $350 per week to him for his living expenses. 

1. The husband asserts that since separation he has paid council rates, water rates and insurance in respect of the matrimonial home. 

1. The wife asserts that following X’s birth and the husband’s injury that she was the primary caregiver of X and primary homemaker.  The husband asserts from the date of the marriage until January 1998 both he and the wife performed household tasks and that he assisted with shopping, cooking, some washing and general household and yard maintenance. 

1. The wife does not dispute that the husband prior to his injury carried out renovation work to the matrimonial home and that after his injury he assisted to a limited degree with the care of X with his mother’s assistance when she returned to work two days per week.

1. At the commencement of the hearing the husband asserted that he intended to establish a business and that he was in a stable de facto relationship with Ms Q.  By the date of the resumed hearing the husband alleged that his relationship with Ms Q had ceased. 

1. In July 2002 the husband made a payment to the wife’s bank account of arrears of child support.

1. During the period from the commencement of the hearing in December 2002 until the adjourned hearing date in February 2003 the husband conceded he had not paid payments of child support.

RELEVANT LAW

1. The approach to the determination of an application under s.79 is well established by authority (see In the Marriage ofLe Steere & Le Steere(1985) FLC 91-626; In theMarriage ofFerraro(1993) FLC 92-335; In the Marriage of Davuat &Raif(1994) FLC 92-503; In the Marriage ofPrpic (1995) FLC 92-574; In the Marriage of Clauson(1995) FLC 92-595; In the Marriage ofWhiteley & Whiteley (1996) FLC 92-684).

1. s.79(2) provides:

“(Just and equitable requirement) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”.

1. I am required, in considering what Order, if any, I should make, to take into account the respective contributions of the parties referred to in paragraphs (a), (b) and (c) of s.79(4), the effect of any proposed Order upon the earning capacity of either party to the marriage (see s.79(4)(d) and the matters referred to in sub-section 75(2) so far as they are relevant; and any other Order made under the Act affecting a party to the marriage or a child of the marriage and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child of the marriage.

1. The first step to be undertaken by me is to determine the extent and value of the property, liabilities and financial resources of the parties at the time of the hearing (see In theMarriage of Townsend (1995) FLC 92-569 and In the Marriage ofBiltoft (1995) FLC 92-614).

DOCUMENTS RELIED ON

1. The wife relied on:

·     Her amended Application filed 5 July 2002 (as amended by Minute of Order sought);

·     Affidavit of wife sworn 18 July 2002;

·     Affidavit of Mr R sworn 19 July 2002;

·     Further amended Statement of Financial Circumstances sworn 21 November 2002;

1. The husband relied on:

·     Amended Response filed 29 November 2001;

·     Further Amended Response filed 5 July 2002;

·     Amended Response filed 23 September 2002;

·     Affidavit of husband filed 23 September 2002;

·     Affidavit of Mr S sworn 13 February 2003;

·     Affidavit of Dr T sworn 10 December 2002;

·     Affidavit of Mr U sworn 20 September 2002;

·     Affidavit of Mr O sworn 20 September 2002;

·     Affidavit of Ms V sworn 11 February 2003;

·     Statement of Financial Circumstances of the husband sworn 23 September 2002.

1. Mr S, Dr T and Ms V were not required for cross-examination.

ASSETS AT THE DATE OF MARRIAGE

1. At the commencement of the marriage the wife owned the unit subject to a mortgage.  Additionally she had her own separate savings, joint savings with the husband, furniture and a superannuation entitlement.  The husband asserts the wife had cash savings and superannuation totalling $12,000 at the date of the marriage in addition to their joint savings and monies received for wedding gifts.  The parties jointly received cash gifts at the time of their wedding.

1. The husband sold a motor vehicle owned by him and had the proceeds of sale of about $19,000.  Additionally he had a share of the parties’ joint savings and wedding gifts. 

1. There is no doubt that the wife’s assets at the date of the marriage substantially outweighed those of the husband by reason of her ownership of the unit.

1. Both parties conducted their respective cases on the basis that the wife’s unit should be “quarantined” on the basis that it was acquired pre-marriage, and the husband conceded he made no contribution at all to the unit throughout the parties’ cohabitation or after separation.

1. I find, save and except for the unit, the husband’s assets at the commencement of the marriage exceeded those of the wife by about $7,000.

ASSETS AT THE DATE OF HEARING

(a)   Agreed Assets

1. By the commencement of the hearing the parties agreed the value of the matrimonial home, the investment unit and their respective superannuation entitlements.  They were in dispute about the sum to be included in their list of assets and liabilities to represent the husband’s common law verdict.  They were also in dispute about an alleged debt to the husband’s father of $51,087.38. I dealt with each of the disputed assets below.  The wife alleges the husband did not made a full, frank and complete disclose of his financial position after commencement of proceedings and continues to be in breach of his obligations under Order 17 Rule 3.  The husband also alleges the wife failed to make a full and complete disclosure of her bank accounts.

RELEVANT LAW FULL FRANK AND COMPLETE DISCLOSURE

1. Order 17 Rule 3 of the Family Court rules provides that each party must in his or her financial statement make a full and frank disclosure.

1. The law in relation to this obligation on parties before the Court is very clear.

1. In the Marriage of Briese & Briese (1986) FLC 91-713, Smithers J said:

"I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner.  The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty.  They are not intended as the outer limits of the obligations of financial disclosure, but as providing avenues towards disclosure.  The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance.  Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue to struggle for information and understanding … 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 the rules of Court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties" (See also Oriolo & Oriolo (1985) FLC 91-653; Black & Kellner (1992) FLC 92-287 and In the Marriage of Weir (1993) FLC 92-338).

(b)  The Husband’s Common Law Verdict

1. There is no dispute that the husband received a common law verdict following settlement of proceedings commenced by him in the Supreme Court of New South Wales.  Exhibit “A”, being a copy of terms of settlement filed in the Supreme Court of New South Wales, reveals the husband received a verdict in the sum of $… plus costs without deduction by the defendant for Workers’ Compensation payments received by the husband.  The husband received net settlement monies in two cheques, the first payment of $383,271.22 being received early 2002.

1. He received the balance of his settlement funds after compliance with the provisions of the Health and Other Services (Compensation Act) Act 1995 (Cth) in mid-2002 resulting in the receipt by him of total net funds of $….  

1. The husband claims, at the date of the hearing, the total sum remaining from the settlement monies is $140,000.  He alleges that he gambled and lost the sum of $180,000 to $200,000 between early 2002 and mid-2002 from the first payment.  He also claims that he spent the whole of the second payment on living expenses and gambling.  He provides no accounting for the balance of the settlement monies, except for the sum of $30,000, which says he gave to his father, Mr U. He says his father advances weekly sums to him and that he made a payment of $20,000 to his present solicitor for legal costs associated with these proceedings. 

1. Mr U says that he became aware the husband was gambling in about mid-2002 and at about this time the husband gave him $30,000 to hold for him. 

1. The husband in his Affidavit of evidence in chief says that in order to protect the monies his brother in law, Mr O transferred $137,000 “to his own accounts to hold for me”. 

1. Mr O in his affidavit says he deposited the first payment into his trust account on instructions from the husband, and that during early 2002 he was contacted by the husband, and that the husband received about $50,000 per week from him. 

1. Mr O in his Affidavit says that he was contacted by Mr U in mid-2002 and was informed the husband was gambling.  He alleges he then contacted the husband who asked him “to hold that money safe for me”.  Mr O says he then asked the husband if he could borrow the money and the husband agreed to his proposal saying “Yeah, that’s fine.  You can pay be back whenever”.  Mr O says that in mid-2002 he utilised funds in the following manner:

·     NAB –Flexi mortgage $96,000;

·     NAB – credit card $8,000;

·     Private purposes $33,000;

·     $10,000 to husband.

1. It is clear from correspondence between the husband’s former solicitors and the wife’s solicitors that requests for information about the husband’s common law proceedings were not answered, and information about the proceedings was only available after searches conducted by the wife’s solicitors revealed the existence of the Supreme Court file.

1. In his oral evidence the husband conceded he had deposited the first payment into Mr O’s account so that the wife would not be able to trace the receipt of funds, but said he had only done so until he had time to think about it.   He said he could not hide a cheque, although cash could be hidden.  He said he was “stalling for time” .  The husband gave evidence that he could only recollect receiving instalments of cash of $25,000 twice per week from the account.  The husband alleges he used the cash to pay his credit card and debts and used the cash for “a shopping spree”.  He provided not corroborative evidence of this assertion.

1. The husband gave further oral evidence that Mr O told him shortly after February, 2002 he had withdrawn $33,000 from the account.  He conceded Mr O had removed these funds without his authorisation.  When asked had this sum been repaid he said so far as he knew it had and that Mr O could have given him this sum in cash but he was not sure.

1. In answer to questions in cross-examination, the husband said the second payment had been deposited into his ANZ account.  He conceded that he did not disclose that account in his Statement of Financial Circumstances sworn in these proceedings. He said the account was now closed. 

1. During the period from January 2002 to February 2002 withdrawals alleged to be cash withdrawals totalling approximately $233,420 were made from Mr O’s account including the sum of $33,000 in February 2002.  In February 2002 the account balance stood at $124,413.72.  It remained at around that figure with minimal activity until May 2002 when there were three transactions of $8,000, $96,000 and $10,000 leaving an account balance of $9,851.22.

1. The husband also said in answers to cross-examination that he had kept cash at home under his pillow and used this cash for gambling.  

1. By the time the hearing resumed on 20 February 2003 the husband’s ANZ bank records had been produced and he was cross-examined about those records.  He conceded that he had received $45,767 in February 2002 and that in May 2002 the account had a credit balance of $31,000.  He conceded he made two withdrawals each of $5,000 in June 2003 and said that he used these funds for gambling.  In respect of the final withdrawal from the account he said he had used the whole of the proceeds of the account on the day of withdrawal for gambling.

1. When cross-examined about the $30,000 given to Mr U, the husband said he was not sure of the source of such funds.  Although he said the funds must have come from a bank account, he conceded the source of funds was not the ANZ account.  When questioned about the bank statements annexed to Mr O’s affidavit the husband then said the source of funds must have been from his cash withdrawals in February 2002.

1. Pursuant to leave granted by me, Mr U gave oral evidence.  He said of the $25,000 of the husband’s funds which he retained in late 2002 he had paid $20,000 to the husband’s solicitors for these proceedings and also paid some creditors of the husband and his former solicitors’ account.  He said he provided a further $8,500 of his own funds to the husband’s solicitors in payment of legal fees. In cross-examination he said he had found gambling chips in the husband’s pockets, and that the husband’s then de facto spouse, Ms Q, told him of the husband’s gambling problem.  His evidence in cross-examination is that on the same day that Ms Q told him about the husband’s gambling problem he went to P Limited with his wife, the husband and Ms Q and had the banning order (Exhibit “3”) made.  That occurred in mid-2002.  His evidence is that the sum of $30,000 was given to him by the husband in cash.

1. Mr O, in answer to questions in cross-examination, said that the account into which he deposited the husband’s first payment is his trust account.  He said his financial services business involved hundreds of clients and that he regularly received refunds from the Australian Taxation Office which were paid into his trust account and thereafter paid to his clients.  He conceded in January 2002 he knew the husband had separated and that there were proceedings before the Court.  He said when the husband asked him to keep the money in January 2002 he asked him to keep it safe.  He said he advised the husband he would not earn interest on the funds in his trust account.  He said he was unable to recall to whom the cheque for the first payment was payable.  However, he conceded he was aware that the receipt of the settlement monies precluded the husband from obtaining social security until 2009.  Mr O said he asked the husband prior to using the $33,000.  This sum was withdrawn in February 2002. 

1. Mr O said, contrary to Mr U’s evidence, that he thought Mr U was aware he was holding the husband’s first payment.  He confirmed that he had a conversation with Mr U about the husband’s gambling in mid-2002.

1. The records from P Limited reveal a banning order in respect of the husband was made in mid-2002.  The P Limited records produced under subpoena show the husband became registered with the P Limited in 1998 and losses are record in 1998.  The husband denied gambling prior to receipt of the first payment.  The records further disclose total cash used for gambling of $163,930 in 2002 and “actual winnings” of $63,679.  The records disclose the husband gambled regularly from early 2002 and he had regular and frequent transactions over the next few months, concluding in mid-2002.  The husband’s evidence is that he gambled for about four to six weeks before he commenced using his P Limited card and he expended $20,000 to $30,000 during this period.  The husband relies on the affidavit of Mr S, a Manager, which was filed for the adjourned hearing.  Mr S confirms that the husband “handed over” cash of $163,930 in over 100 transactions.  He says the sum of $63,679 represents actual winnings made by P Limited and this sum is a loss to the husband.  He deposed to the fact the husband may have made cash bets and had losses (or presumably “wins”) which are not recorded because he did not use his card.

1. I accept that the husband did gamble at P Limited and that he had a substantial gambling problem by May 2002.  I accept he may not have used his card for transactions in early February 2002.  I do not accept his evidence that he had not gambled prior to 2002.  It is inconsistent with the P Limited records.  I find the frequency of his recorded gambling and the obvious benefits by way of inclusion in draws for a car etc demonstrate that it was highly unlikely that he gambled without the use of his card.  Whilst I find he had a serious gambling addiction by mid-2002 I do not accept that he lost $180,000 to $200,000 on gambling.  This assertion is not supported by the P Limited records which I accept and prefer rather than the evidence of the husband.

1. I find the evidence of the husband and Mr O generally to be unreliable and inherently unbelievable. There are obviously discrepancies in their evidence about the withdrawal of $33,000 including when the husband authorised such withdrawal.  Mr O’s affidavit is clearly misleading in that he seeks to give the impression that the $33,000 was withdrawn at the time of the other withdrawals in mid-2002 rather than in early 2002.

1. I do not accept that the bank account into which Mr O banked the first payment is his general trust account.  He gives evidence of a busy financial services business involving over 100 clients.  It is inherently unbelievable that there would not be a significant number of other transactions in and out of this account during the relevant period.  I find discrepancies in his evidence as to when the husband asked him to “keep the funds safe”.  I find it unbelievable that a prudent finance professional knowing, as Mr O did, of the restriction on the husband to apply for social security benefits until 2009, would condone his brother in law initially placing funds in an account earning no interest, making large and regular cash withdrawals, and lending funds to him.  Further I find it irresponsible that he was permitted to take the husband’s so called remaining funds in mid-2002 and apply them to payment of his own mortgage and credit card debts without interest to the husband or any time frame for repayment.  The husband’s credit card statements shortly after this period disclose the husband taking cash advances and paying premium interest rates on those cash advances.   I find the husband’s actions were designed, in concert with Mr O, to defeat in part any claim by the wife to the husband’s settlement monies.

1. I find discrepancies in the evidence of Mr U, Mr O and the husband.  I do not accept the husband’s evidence about the payment of $30,000 to his father.  That sum was not withdrawn from Mr O’s trust account in mid-2002, nor was it withdrawn from the ANZ bank account.  If the husband’s evidence about his gambling is accepted, he would not have retained $30,000 cash to give to his father in mid-2002.   I am unable to make a conclusive finding about when Mr U became aware of the husband’s gambling problem because of the inconsistencies in the evidence, although his oral evidence about becoming aware of the husband’s gambling when alerted by Ms Q and going to P Limited with his wife and the husband the same day to obtain the banning order appears the most likely explanation.  Such explanation is at odds with Mr O’s and Mr U’s affidavit evidence.

1. Mr Serisier submits that the whole of the husband’s common law verdict monies should be added back to the parties’ list of assets and liabilities and available for division between the parties on a global basis.  His submission is made on the basis that the husband has negligently, wantonly or recklessly used those funds and had the benefit of them (see In the Marriage of Kowalski (1993) FLC 92-342; In the Marriage of Townsend (1995) FLC 92-569). He further submits that the husband has failed to make a full, frank and complete disclosure and in these circumstances it is appropriate to include the whole of the settlement sum in the parties’ list of assets and liabilities. Mr Gould submits that the sum of $140,000, being the husband’s alleged remaining funds, should be included in the pool and dealt with on an asset by asset basis. He submits the wife has no entitlement to any part of the husband’s settlement monies.

1. The issues to be determined are:

·     should the parties entitlements be determined on a global or asset by asset basis (I discuss this below);

·     should the funds be included at the full value of the settlement monies because the husband has failed to make a full frank and proper disclosure of his financial position;

·     should the funds used by the husband be regarded as an advance distributions to him;

·     should the sum to be included in the parties list of assets and liabilities be increased because of the use to which the husband applied the funds;

·     having identified the value to be attributed to the settlement monies, what contributions did the parties make to those settlement monies;

·     does the husband’s failure to make a full frank and complete disclosure impede the proper assessment of the parties’ contributions under s.75(2). 

(a)Should the funds be used at the full value of the settlement monies because the husband has failed to make a full frank and complete disclosure of his financial position.

1. The authorities make it very clear that the necessity to make a full frank and complete financial disclosure is at the heart of adjudication of cases under s.79 of the Act.  In In the Marriage Weir (1992-1993) 16 Fam LR 154 at 158 the Full Court held:

“It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from His Honour’s findings in this case, 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.”

1. I am satisfied the husband did not voluntarily and frankly disclose the Terms of Settlement in his common law claim.  It is clear that evidence only came to the fore by the persistence of the wife’s solicitors.  I find the course of conduct engaged in by the husband and Mr O was designed to disguise the majority of the common law verdict monies from the wife. 

1. I accept that Mr O has a liability to repay the husband the sum of approximately $140,000. 

1. I accept that the husband did use substantial sums of money for gambling and that his gambling pattern by mid-2002 disclosed a gambling addiction.  Whilst there is no psychological or other evidence before me about the husband’s gambling addiction, I accept his evidence that his gambling was out of control in mid-2002.  This is corroborated by the P Limited records.  I also accept that he used part of the funds received by him for day to day living expenses.  I find I am unable to ascertain with precision exactly how much of the husband’s cash settlement over and above the sum of $140,000 is in existence or has been otherwise disposed of by the husband. 

1. I accept some discount should be made to the settlement sum to take into account the husband’s gambling addiction and his use of funds for day to day living expenses. 

1. The husband has included the sum of $43,450 for legal costs paid in the parties’ asset pool.  The source of these funds appears to be from the settlement monies, save and except the sum of $8,500 paid by Mr U.  I accept to include this sum and the full value of the settlement sum in the parties’ list of assets and liabilities would involve double counting.  Allowing a discount from the settlement sum of $34,950, representing the husband’s legal costs paid, an allowance of approximately $20,000 for the husband’s living expenses (noting that the mortgage payments in respect of the matrimonial home have been covered by mortgage protection insurance) and a further sum of approximately $78,000 being lost by the husband for gambling whilst addicted, I find prima facie that the sum to be included in the parties’ list of assets and liabilities representing the settlement sum is the sum of $295,000.  I have assessed the husband’s betting losses having regard to the P Limited records, and taking into account the husband’s evidence that he had losses in February 2002.

(b)       Should the sum to be included in the parties’ list of assets and liabilities be increased because of the use to which the husband applied the funds. 

1. At first blush this matter appears to be a case where the husband’s conduct in gambling should be regarded as negligent, wanton or reckless and the total amount added back to the pool of assets.  However I have regard to the fact that prior to the release of his settlement monies the husband had suffered a serious accident, undergone surgery and had been dismissed from his employment.  I do accept his evidence that he was bored and depressed and this no doubt contributed to his gambling which appears to have become addictive by mid-2002.  In these circumstances I do not find all the funds which the husband gambled, and which I cannot ascertain with precision should be added back to the property settlement.  I do have regard to the fact the husband has had the use and benefit of these funds, his conduct in respect of remaining funds and lack of proper financial disclosure in my assessment of relevant s.75(2) factors. 

(c)Having identified the value to be attributed to the sum of monies, what contributions did the parties make to those settlement monies?

1. Mr Gould submits that the wife should not receive anything by way of contribution based entitlements to the settlement monies.  I reject that submission.  I accept the wife’s evidence that after the husband’s accident that she drove the husband to and from physiotherapy appointments, that by reason of his injury that she made a larger contribution to the maintenance of the home including gardening and painting of the home.  I also accept that she performed domestic duties for the benefit of the family including the husband, and that she was principally involved in the day to day care of the family, comprising herself, the husband and X.

1. It is clear in prosecuting his claim in the Supreme Court of NSW that the husband relied on the provision of domestic services provided by the wife from the date of the accident (early 1998) until separation on 28 December 2000.  In his Part 33 Rule 8 Statement the husband claimed “he has required significant levels of assistance with household cleaning activities and with general maintenance activities and claims the cost of five hours per week of such assistance provided to him on a voluntary basis up to the present day by his wife and/or friends.”  He also made a claim for the cost of car washing carried out on a voluntary basis, and past wage loss as well as out of pocket expenses.

1. Whilst I find it is unreliable to place any significant weight on the husband’s Part 33 Rule 8 Statement as the claim did not proceed to a defended hearing, it does give a general indication of the claim made by the husband for domestic services. 

1. I do not find it is appropriate to transpose the statutory assessment of damages under a common law negligence or nature and conditions of employment claim to an assessment of contributions under s.79(4).  Such latter assessment is not purely a mathematical calculation (see Mahoney v Mahoney (unreported 24 November 2000); Ashton (1986) FLC 91-777; Shaw (Valuation of Assets) (1989) FLC 92-010). This reasoning is analogous with that of McGovern J in O’Brien v O’Brien (1983) FLC 91-316. In that case His Honour was dealing with an award of damages received by a husband following a motor vehicle accident, the damages award being managed pursuant to the provisions of the Aged and Infirm Property Person Act 1940 (SA).

1. His Honour rejected that he should use the amount awarded for provision of domestic services as assessment of contribution and held:

“I do not think this approach is open to me in proceedings for property settlement in this court. In determining the issue of adjustment of property interests one has to have regard to the criteria provided by sec. 79(4) of the Family Law Act and, in so far as they are relevant, those in sec.75(2). Whilst, therefore, it might be of interest to know the allowance that would be made by the Supreme Court for voluntary services in the circumstances of the husband’s case, the information could do little to assist one in deciding the issue at hand. Moreover, there is nothing before me to indicate how the Supreme Court might have exercised its discretion in respect to this element of damages in the present case”.

1. It was submitted to McGovern J that the wife’s entitlement could be limited to certain areas of the damages award.  His Honour noted the personal nature of a damages award as traditionally awarded for actions in negligence.  He found however:

"it would seem to me, however that these reflections may have little validity when it comes to considering the relevance of property in proceedings for settlement of property in the family law jurisdiction.  In the present case the wife’s interests are, inextricably bound up with everything to do with the husband’s accident and I do not think the fact that the damages were awarded with certain criteria relevant to that issue in mind has any particular bearing on the question of the property that must be brought into issue in proceedings between the parties here which case would however, be viewed in the light of its own facts”.  (see also Williams v Williams (1984) FLC 91-541).

1. I am cognisant that the wife’s contributions to the common law settlement monies were substantially limited to the period from date of accident to the date of separation.  However, I find she continued to make a contribution by having substantial responsibility for the care of X without the provision of any substantial child support from the husband post separation to the date of the hearing.  I am satisfied, having regard to these factors, that the wife’s contribution to the husband’s common law settlement should be assessed at 12% of the settlement monies.  I find such sum should be assessed in respect of the total settlement claim, not the discounted amount included in the parties’ list of assets and liabilities.

(d)      The wife’s failure to make a full frank and complete disclosure.  

1. The wife was cross-examined about her failure to disclose the sums retained by her in bank accounts.  On the first day of the hearing the wife conceded in cross-examination that she had failed to disclose one account held by her with the NAB.  She disclosed the balance in her bank account at $200.  She conceded in cross-examination she had not disclosed her second account which contained the sum of $5,803.  She also conceded that she had withdrawn the funds from an account held in trust for X.  She gave evidence she had withdrawn approximately $6,000 from the account held in trust for X to purchase clothing, furniture and presents.

1. The wife subsequently produced receipts for some furniture purchased for X.  I found her evidence on this issue to be vague and somewhat unsatisfactory.  I do not however find a serious failure on her part to make a full and proper financial disclosure of her financial position, but rather a regrettable lack of care in completing her Statement of Financial Circumstances.

(e)       Loan to Mr U. 

1. The husband asserted that the parties owe the sum of $51,087.38 to the husband’s father for mortgage instalments paid, and for cost of repairs and renovations to the matrimonial home.  The wife conceded that Mr U had made mortgage payments in the sum of $13,300 on the parties’ behalf when their mortgage protection insurer declined liability under the policy.  When a back payment was received by the parties from their insurer the whole of that sum was paid in reduction of the mortgage rather than in repayment to Mr U.  The wife acknowledged he should receive repayment of $13,300.  I accept it is proper he should do so. 

1. The basis of the balance of Mr U’s claim appears to me to be founded on the premise that he maintained receipts for sums paid on behalf of the parties whereas the husband’s father was unable to produce receipts for contributions made by him by or on behalf of the wife.  I discuss the wife’s father’s contributions under s.79(4).  The husband in his oral evidence asserted that the funds advanced by his father were originally by way of gift but had become a loan.  He conceded that he would not have to repay funds to his father until he was able to do so. 

1. This court has regularly dealt with the question of gifts, advances or loans made to parties to a marriage by members of their family (see In the Marriage of Gosper 11 Fam LR 601 at 611 and 612 and In the Marriage of Kessey 16 Fam LR 149. In the latter case Baker, Finn and McCall JJ held:

“It was submitted by counsel for the appellant husband that Gosper is distinguishable from the present case because Gosper was concerned with the matter of gifts and in the present case there is no evidence of a gift.  In our opinion the application of the principles enunciated in Gosper should not be so limited.  Rather, those principles should be regarded as being applicable in all cases where there has been an advance of money or property by a parent (or perhaps even by some other relative) of one of the parties, to one or both of the parties (or to their property), and the circumstances of the advance cannot be categorised as a loan, or as any other recognised commercial transaction.”

1. I am satisfied that the funds advanced to the parties were a gift by Mr U and were not lent to the parties, save and except for the sum of $13,300.  Consequently I do not accept a debt of $51,087.38 should be included in the parties list of assets and liabilities, but only the sum of $13,300.  I accept Mr U’s gifts to the parties as a contribution on behalf of the husband.

ASSETS, LIABILITIES AND FINANCIAL RESOURCES AT THE DATE OF THE HEARING

1. I find the parties assets, liabilities and financial resources at the date of the hearing to be:

ASSETS
B Street, Suburb C	$340,000.00
D Street, Suburb C	$320,000.00
Husband's damages award (Common Law)	$295,000.00
Motor Vehicle 1	$1,000.00
Jewellery (Husband)	$1,500.00
Jewellery (Wife)	$1,500.00
Home contents (Husband)	$8,000.00
ANZ account	$439.00
NAB account	$6,886.00
Legal costs paid (Husband)	$43,450.00
Legal costs paid (Wife)	$5,000.00
Superannuation Fund 1 (Husband)	$9,426.00
Superannuation Fund 2 (Wife)	$8,760.00
Total Assets	$1,040,961.00
LIABILITIES
NAB Home Mortgage	$86,583.00
E Trustees Limited Mortgage	$120,000.00
Amount owed to husband's father	$13,300.00
Amount owed to husband's father - Legal Fees	$8,500.00
Total Liabilities	$228,383.00
Total Assets less Liabilities	$812,578.00

ASSET BY ASSET VS GLOBAL APPROACH

1. I have, in endeavouring to arrive at a just and equitable division of the parties’ property, found in the particular circumstances of this case it is appropriate to deal with the parties’ assets on an asset by asset approach rather than a global basis (see Norbis v Norbis (1986) FLC 91-712). I do so because of the relatively short term of the marriage, the parties’ concession that the unit should be excluded from their pool of assets, and the circumstances surrounding the receipt and use/disposal by the husband of the settlement monies.

1. In Norbis (supra), Mason and Dean JJ said:-

"Although it is natural to assess financial contributions under sec. 79(4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as homemaker and parent either by reference to the whole of parties property or to some part of that property.  For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, ie, on a global, or alternatively on ‘asset by asset’ basis.  Which of the two approaches is more convenient will depend on the circumstances of the particular case.  However, there is much to be said for the view that in most cases the global approach is the more convenient".

1. Their Honours also said:

"What the Full Court asserts is that the global approach is the only ‘realistic’, that is, convenient, means of arriving at the entitlements of the parties.  Again, it seems to us that it will depend on the circumstances of the particular case, though in the majority of cases the global approach will be the more convenient and for this reason the Full Court is entitled to prescribe its adoption as a guideline in the majority of cases.  The Family Court has rightly criticised the practice of giving over-zealous attention to the ascertainment of the parties' contributions, and we take this opportunity of expressing our unqualified agreement with that criticism noting at the same time that the ascertainment of the parties' financial contributions necessarily entails reference to the particular assets in the manner already indicated".

1. I am satisfied this is an appropriate case for assessment on an asset by asset basis.

CONTRIBUTIONS (s.79(4))

1. I have already set out my findings about the parties’ initial contributions.  It is not disputed that the husband made no direct or indirect contribution to the investment unit. 

1. I turn then to the parties’ respective contributions to the matrimonial home.  I have already set out my findings about their initial contributions to that property.  I accept the husband’s initial cash contribution to the home exceeded the wife’s cash contribution by about $11,000.

1. I accept the wife’s evidence that the parties lived on a rent free basis in accommodation provided by her parents prior to the acquisition and during the renovation of the matrimonial home.  Following the husband’s accident the parties lived with the husband’s parents for a period of approximately nine months due, it appears, to the husband’s inability to negotiate the stairs at the flat above the wife’s parent’s business.  Shortly prior to their occupation of the matrimonial home they moved back into the wife’s parent’s flat.  I accept that the contribution on behalf of the wife’s parents exceeded that of the husband’s parents in respect of the provision of accommodation to the parties.  The provision of this accommodation enabled the parties to acquire savings to purchase the matrimonial home and provided rent free accommodation for them during the period of the renovations.  I find this contribution offsets the husband’s initial superior cash contribution.

1. I am satisfied that each of the parties’ parents contributed both by the provision of building materials, the payment of labour, contribution of the Stamp Duty costs by Mr U and legal costs by the husband’s father to the acquisition and improvement of the matrimonial home. 

1. I find that members of both families made a substantial physical contributions to the improvements to the property.  I am satisfied that the contributions made by each party’s family were approximately equal, save and except for the mortgage payments, made by Mr U, which find the parties should repay. 

1. I accept that the wife contributed her earnings from her regular employment to the welfare of the family until shortly prior to X’s birth and that she thereafter contributed her part time earnings to the welfare of the family.  I accept the wife’s evidence that the husband was employed by a number of employers and that he contributed his earnings in employment to the welfare of the family.  I accept that the husband received payments by way of salary for approximately 12 months after his accident thereafter was in receipt of workers compensation.  I accept that part of the settlement monies received by the husband included a component to reimburse him for past wage loss and out of pocket expenses. 

1. The wife was criticised for her evidence in relation to her domestic contributions and failing to give appropriate recognition to contributions made by the husband after his accident.  I accept the wife sought to downplay the husband’s domestic contributions.  I accept that up until his accident the husband was engaged in carrying out renovations and repairs to the matrimonial home.  I find the wife was also involved in these activities and providing food for the workmen.

1. I am satisfied by reason of the husband’s accident that the wife took on a larger role than she would otherwise have done in respect of the maintenance of the matrimonial home and garden and care of X in addition to her part time work.  I accept that the husband did assist by taking responsibility for the parties’ financial affairs, assisting with shopping and some care of X.  However I find the wife’s contributions post early 1998 until the date of separation exceeded those of the husband.  Post separation the husband had the exclusive use of the matrimonial home.  I find that mortgage payments were made by the mortgage protection insurer and that these payments should be regarded as payments on behalf of both parties as joint mortgagors of the matrimonial home, the mortgage protection insurance being of and incidental to the mortgage.  By contrast, the wife has received a contribution by her parents who have provided her with accommodation post separation.

1. The husband was assessed to pay the minimum amount of child support, namely $21.67 per month.  Until he retained the services of his present solicitor he did not pay that sum to the wife.  He gave evidence he did not do so because he was being stubborn.  Regardless of his motivation I find the wife was responsible for not only the majority of the physical care of X but also for his financial welfare.  In this respect I find that the wife’s contributions substantially exceeded those of the husband post separation.

1. Having regard to those contributions and assessing them vis a vis the parties’ interest in the matrimonial home, I find their contributions should be regarded as 65% by the wife and 35% by the husband. 

1. I have already set out my assessment of the parties’ contribution based entitlements to the husband’s settlement monies.

1. There is no evidence before me as to how the parties acquired Motor Vehicle 1.  I find no reason to depart from a finding of equality of contribution in respect of this motor vehicle, the parties’ jewellery or their furniture. 

1. Given my findings about the husband’s lack of payment of child support to the wife and the quantum of that child support I find it is appropriate that the wife should retain 100% of her existing bank accounts. 

1. I have already touched on the husband’s legal costs paid in my assessment of the parties’ contribution to the husband’s common law verdict.  I do not find any further adjustment should be made having assessed the wife’s contribution by reference to the totality of the settlement monies. 

1. I make a similar finding about the wife’s legal costs paid and do not find any contribution to those costs by or on behalf of the husband. 

1. There is no substantial difference between the parties’ superannuation entitlements.  I find each party contributed to their own superannuation entitlements and each should retain 100% of those entitlements. 

1. There is no dispute between the parties as to the outstanding balance on the mortgage secured over the matrimonial home or the investment property.  Similarly both parties concede that the wife’s father is owed a sum of $13,300 for payments made by him in respect of their mortgage. 

1. I have included the husband’s liability to his father for legal fees paid.  I accept that Mr U shortly prior to the hearing provided the husband’s solicitors with the sum of $8,500 for payment of legal costs.  Accordingly I find the wife’s contributions to the assets and liabilities of the parties assessed on an asset by asset basis to be:

ASSETS	WIFE'S SHARE
B Street, Suburb C	$340,000.00	65%	$221,000.00
D Street. Suburb C	$320,000.00	100%	$320,000.00
Husband's damages award (Common Law) *	$295,000.00	12%	$51,511.00
Motor Vehicle 1	$1,000.00	50%	$500.00
Jewellery (Husband)	$1,500.00	0%	0
Jewellery (Wife)	$1,500.00	100%	$1,500.00
Home contents (Husband)	$8,000.00	50%	$4,000.00
ANZ account	$439.00	100%	$439.00
NAB account	$6,886.00	100%	$6,886.00
Legal costs paid (Husband)	$43,450.00	0%	0
Legal costs paid (Wife)	$5,000.00	100%	$5,000.00
Superannuation Fund 1 (Husband)	$9,426.00	0%	0
Superannuation Fund 2 (Wife)	$8,760.00	100%	$8,760.00
Total Assets	$1,040,961.00	$619,596.00
LIABILITIES
NAB Home Mortgage	$86,583.00	65%	$56,279.00
E Trustees Limited Mortgage	$120,000.00	100%	$120,000.00
Amount owed to husband's father	$13,300.00	50%	$6,650.00
Amount owed to husband's father - Legal Fees	$8,500.00	0%	0
Total Liabilities	$228,383.00	$182,929.00
Total Assets less Liabilities	$812,578.00	54%	$436,667.00
Adjustment pursuant to s.75(2) (see following)	10%	$81,258.00
Total Wife's Entitlement	64%	$517,925.00
Total Husband's Entitlement	36%	$294,653.00

* calculated on the total settlement award

1. I find that the wife’s contribution based entitlement is $436,667 or approximately 54% of the parties’ net assets and liabilities. 

S.75(2) FACTORS

(a)    the age and state of health of each of the parties; 

1. The husband is presently aged 34 years.  He relies on the affidavit of Dr T, surgeon.  Dr T provided a report for the husband’s personal injury lawyers in mid-2000 noting that the husband was injured whilst working.  A subsequent CT scan confirmed the injury.  In early 1998 the husband underwent surgery.  Dr T provided a history of the husband continuing to report pain post operatively and when seen in mid-1999 he was noted to have “some subtle instability” which Dr T opined was not unusual after the surgery.  He thereafter referred the husband for pain management and noted in mid-2000 he has not seen the husband since that date.  At that time he assessed the husband as having a 20% permanent impairment. 

1. Dr T reported, it appears, to the husband’s general practitioner in early 2001 having been consulted by the husband on that day.  Having conducted further x-rays Dr T opined “I believe he has an obvious instability due to […] damage”.  He noted the only likely treatment for the husband was further surgery but did not recommend treatment at that stage.

1. The husband again attended on Dr T in late 2002 for the purposes of a medico legal report.  Dr T noted that the husband had ceased all forms of conservative treatment some two years previously including cessation of anti inflammatory and analgesic medications.  He was noted to use an occasional panadol.  He noted “Mr Manatos continues to suffer with […] pain due to instability […].”  He noted that the husband’s surgery was uncomplicated.  He expressed a guarded prognosis opining that he did not believe the husband would return to his former job.  Whilst discounting the possibility of full time work, he expressed the view the husband could do some short term casual work on an ad hoc basis.  He noted discussing possible further surgery with the husband and concluded “at present such surgery is not contemplated as he finds his symptoms are manageable, albeit troublesome.” 

1. The husband conceded he did not tell Dr T of his plans to open a business at the time of seeking a medical report.  The husband also conceded he had not sought medical treatment for a period in excess of two years. 

1. I accept Dr T’s unchallenged evidence that the husband suffered a significant injury in 1998 and that post operatively he has experienced instability.  I accept that his injuries preclude his employment in his previous type of work.  I accept that this is the area in which the husband has employment qualifications.

1. The wife is also aged 34 years.  She is in good health. 

1. I find the husband’s health is a relevant factor requiring adjustment in his favour. 

(b)   the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; 

1. I have already set out my difficulties in assessing the property of the husband due to his unsatisfactory evidence about his financial position. 

1. I am satisfied that the husband is unable to resume his employment.  I accept that he has had experience in running a business and has the requisite skills to obtain leased premises and employ other workers and to supervise such a business.  I find it is significant that the husband did not tell Dr T of his plans for such a business venture.  His failure to do so lessens the weight that I would otherwise give to Dr T’s report. 

1. The wife has, for a number of years, engaged in full time and part time employment in the business operated by her father.  I accept that her responsibilities as X’s residence parent will inhibit the wife’s ability to work on a full time basis for some time.  Overall, I am satisfied at the present time both parties only have the capacity to work on a part-time basis.  I find the husband should be able to commence a business, but such a venture would require a period of establishment before the husband could expect to derive profits.

(c)    whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; 

1. Pursuant to consent orders the parties have agreed that X shall live with the wife.  I find that the wife has the ongoing responsibility to provide for X’s day to day needs including housing.  This factor requires a significant adjustment in the wife’s favour.

(d)commitments of each of the parties that are necessary to enable the party to support:

(i)himself or herself; and

(ii)       a child or another person that the party has a duty to maintain; 

1. Not relevant.

(e)    the responsibilities of either party to support any other person; 

1. Not relevant.

(f)subject to subsection (3)  the eligibility of either party for a pension, allowance or benefit under:

(i) any law of the Commonwealth, of a State or Territory or of another country; or

(ii)      any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party; 

1. The husband is prima facie precluded from obtaining social security benefits prior to 2009 by reason of the sum of the settlement monies.  However this fact was well known to the husband when he received his settlement monies.

(g)    where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable; 

1. I am satisfied that both parties will be able to maintain a reasonable standard of living at the conclusion of these proceedings.

(h)   the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; 

1. Not relevant.

1. the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; 

1. Not relevant.

(j)     the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; 

1. Not relevant.

(k)   the need to protect a party who wishes to continue that party's role as a parent; 

1. The wife wishes to continue part time work in order to provide appropriate parenting for X.

(l)   if either party is cohabiting with another person  the financial circumstances relating to the cohabitation; 

1. The husband was cohabiting with Ms Q at the commencement of the hearing.  The husband said the relationship was a stable one of 11 months duration.  By the resumption of the hearing the husband said his relationship with Ms Q had come to an end.

1. The wife is presently living with her parents and has been since separation.  She is not cohabiting with another person.

(m) the terms of any order made or proposed to be made under section 79  in relation to the property of the parties; 

1. The husband seeks an order that the wife transfer her interest in the matrimonial home to him.  He asserts that he should maintain the matrimonial home, firstly, because he has lived in the home since separation and secondly, because while he is regarded by the mortgage protection insurers as disabled, those insurers are making mortgage payments on his behalf.  The husband gave evidence of his intention to redraw on the mortgage to pay to the wife part of her property entitlements.  He asserted that this would not affect the liability of the mortgage insurer to indemnify him in respect of the mortgage payments.  There is no evidence to verify this assertion of the husband.  Further, I am satisfied that the husband does not have sufficient remaining funds to pay the wife her proper property entitlements.  I do not find the basis of the husband’s contentions he should retain the matrimonial home are well founded, nor do I find he has the ability to retain that home.  I find he will need his share of the settlement sum to commence a business and/or to supplement part time earnings.

1. The wife seeks to retain the matrimonial home.  She is presently living with her parents.  I find that whilst she has no immediate need for accommodation, it would appear that the matrimonial home will provide suitable accommodation for her and X.  The home is located within reasonable proximity to her father’s business which should facilitate her engagement in increased part time work once X commences school.

(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

1. The husband is assessed to pay the minimum amount of child support.  He did not pay the amount due to the wife pursuant to her statutory assessment until the engagement of his present lawyers.  The husband conceded that he had not paid child support for the two month period during the adjourned hearing.  He offered no reason for his failure to pay such child support.  I found his lack of reasoning to lack parental responsibility.  I find he has been prepared to allow Mr O to have indefinite access to funds of approximately $140,000 on an interest free basis but has failed to pay the very minimal amount due pursuant to the child support assessment.  I have no confidence that he will meet his child support obligations in the future and I find this factor requires a substantial adjustment in the wife’s favour.

(n)   any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and 

1. The husband’s assertion is that he used a total of approximately $226,000 of his settlement monies for gambling purposes.  I have already set out my findings in relation to the husband’s gambling activities.  I find the husband’s failure to make a full frank and complete disclosure of the whereabouts of his funds has made it impossible for me to properly assess relevant factors under s.75(2).  Further I find his actions in placing his funds with Mr O and failing to invest those funds prudently, particularly allowing Mr O to have the continued use of the funds without interest while he has obtained cash advances on his credit card are all factors which require a further adjustment in the wife’s favour. 

(o)the terms of any financial agreement that is binding on the parties.

1. Not relevant.

1. Balancing each of the relevant s.75(2) factors, although I take into account the seriousness of the husband’s injuries as a result of his accident, I find that the factors favouring the wife and in particular (c) and (n) are such that a further adjustment should be made in the wife’s favour of an additional 10% or $81,258.

JUST AND EQUITABLE REQUIREMENT

1. Having made my assessment of the husband and wife’s contributions and considered factors under s.75(2) requiring further adjustment in the wife’s favour, I must stand back and look at the overall result of those findings to ensure the result achieved is just and equitable (see DDF v JEL(2001) FLC 93-075).

1. In this unusual case I have found it appropriate to assess the parties’ contribution based entitlements on an asset by asset basis.  The husband’s failure to make a full frank and complete disclosure of his financial position, and his use of his settlement monies have had a significant impact on my assessment of the parties’ contributions and relevant factors under s.75(2).  The wife will retain 64 % or $517,925 of parties’ assets and liabilities as found by me and the husband will retain 36% of those assets or $294,653.  I am satisfied that it is appropriate for the husband to transfer his interest in the matrimonial home to the wife and to pay the wife $41,923 which the wife can apply to the discharge of the mortgage on the matrimonial home.  He can also assume responsibility for the repayment to Mr U.  In all of the circumstances I am satisfied that this represents a just and equitable division of the parties’ assets and liabilities.

HUSBAND WILL RETAIN
ASSETS
Husband's damages award (Common Law)	$295,000.00
Motor Vehicle 1	$1,000.00
Jewellery (Husband)	$1,500.00
Home contents (Husband)	$8,000.00
Legal costs paid (Husband)	$43,450.00
Superannuation Fund 1 (Husband)	$9,426.00
Total Assets	$358,376.00
LIABILITIES
Amount owed to husband's father	$13,300.00
Amount owed to husband's father - Legal Fees	$8,500.00
Total Liabilities	$21,800.00
Total Assets less Liabilities	$336,576.00
Adjustment to wife	$41,923.00
Total Husband's Entitlement	$294,653.00

WIFE WILL RETAIN
ASSETS
B Street, Suburb C	$340,000.00
D Street. Suburb C	$320,000.00
Jewellery (Wife)	$1,500.00
ANZ account	$439.00
NAB account	$6,886.00
Legal costs paid (Wife)	$5,000.00
Superannuation Fund 2 (Wife)	$8,760.00
Total Assets	$682,585.00
LIABILITIES
E Trustees Limited Mortgage	$120,000.00
NAB Mortgage	$86,538.00
Total Liabilities	$206,538.00
Total Assets less Liabilities	$476,047.00
Adjustment from Husband	$41,923.00
Total Wife's Entitlement	$517,925.00

1. For convenience, I have rounded up the sum payable by the husband to the wife to $42,000.  The effect of this adjustment is the husband will retain the responsibility for the debt of $13,300 to Mr U, and the wife will be solely responsible for the mortgage secured over the matrimonial home.

CONCLUSIONS

1. The parties’ cohabitation was a relatively short period of five years.  At the commencement of the hearing the parties agreed on appropriate parenting orders for their only child, X.  In this unusual case the issues centred on the husband's receipt of a substantial personal injury settlement which has been dissipated in part by the husband's gambling activities, and a most unusual arrangement in which he has agreed to the balance of his funds being lent for an indefinite period on an interest free basis to his brother in law.  The husband and his witnesses' evidence raise issues of credit, and I am unable to accept much of the their evidence unless it is corroborated by documents.  Even with such corroboration I am satisfied that there was a failure on the husband's behalf to make a full frank and complete disclosure of his financial position.  The wife also failed to make a careful disclosure of relatively minor aspects of her financial circumstances.  In these circumstances I find it appropriate to add back to the parties’ pool of assets and liabilities part of the settlement monies alleged by the husband to have been spent on gambling or otherwise in respect of which there is no satisfactory accounting.  Following assessment of the parties’ contribution based entitlements on an asset by asset basis I find their contributions to the adjusted pool of assets and liabilities to be 54% by the wife and 46% by the husband.  Having regard to relevant section 75(2) factors I find that a further adjustment in should be made in the wife's favour such that the parties' assets and liabilities are divided as to 64% to the wife and 36% to the husband.

ORDERS

1. I propose the following orders:

1. That within 42 days of the date of these orders the husband do all acts and things and sign all documents necessary to transfer to the wife, subject to the encumbrance to the National Australia Bank, the whole of his right title and interest in the property known as B Street, Suburb C ("the matrimonial home") being the whole of the land comprised in Folio Identifier ….

1. That within 42 days of the date of these orders the husband pay to the wife or as she may direct by cash or bank cheque the sum of $42,000. 

1. In order to facilitate compliance with the husband's obligations pursuant to Order 3, the husband shall within 7 days of the date of these orders give notice in writing to Mr O authorising him to pay from the monies he holds on trust for the husband the sum of $42,000 to the wife or as she may in writing direct.

1. That upon payment by the husband as provided in Order 2 of these orders, the wife shall indemnify and keep indemnified the husband in respect any claims, suits or demands brought against the husband in respect of the mortgage secured over the title of the matrimonial home.

1. That the husband indemnify and keep indemnified the wife in respect of any claims, suits or demands brought against the wife by Mr U in respect of any monies said to be owing to him by the parties including but not limited to any monies said to be owing by either the husband or the wife to Mr U.

1. In order to facilitate compliance with Order 1, the solicitor for the wife shall prepare and forward to the solicitor for the husband a Real Property Act Memorandum of Transfer in respect of the husband's interest in the matrimonial home, and the husband shall execute such Real Property Act Memorandum of Transfer and any such other documents as shall be required to give effect to Order 1.

1. That within 42 days of the date of these orders the husband shall vacate the matrimonial home and the wife shall be entitled to exclusive occupation thereof.

1. That within fourteen (14) days of the date of this order the husband do all acts and things necessary to prepare two lists of the furniture which was contained within the matrimonial home and that the furniture contained in each list be approximate in value to that contained in the other list.

1. That the husband transfer to the wife his interest in the items contained in whichever of the said two lists the wife shall so choose and that the wife do all acts and things necessary to transfer to the husband her interests contained in the other such list.

1. That the husband make available for collection by the wife or any person nominated by her all of those items contained in whichever of the said two lists the wife chooses pursuant to the above Order 9 hereof at any reasonable time requested by the wife and that pending collection of the items by the wife the husband shall properly store and maintain such items.

1. That each of the parties be declared the sole legal and beneficial owner of all items of personalty including monies, shares, motor vehicles and personal effects presently in the possession or control of each of them respectively otherwise than provided for by these Orders.

1. That in the event that either party shall default in signing a document or documents required pursuant to these orders the Registrar or Deputy Registrar of the Family Court of Australia at Sydney shall be empowered pursuant to s.106A of the Act to sign such document or documents instead of the defaulting party.

1. The Court notes that each party will retain their own superannuation entitlement.

1. That each party have liberty to apply on 7 days notice in relation to the interpretation or implementation of these orders.

1. That after 28 days all exhibits be returned.

1. That all documents produced on subpoena be collected by the solicitor who issued the subpoena and returned to the owner thereof as soon as possible.

1. That all applications are finalised.

I certify that the preceding 160 paragraphs are a true copy of the reason for judgment herein of Her Honour Justice Boland.

Associate