PAILING & GILBERT - [2015] FCCA 2533

FEDERAL CIRCUIT COURT OF AUSTRALIA

PAILING & GILBERT

[2015] FCCA 2533

Catchwords:
FAMILY LAW – Property proceedings – relationship and subsequent marriage of approximately eighteen years in duration – relationship produced two children – assessment of contributions – assessment of initial contributions – add backs – negative contributions/waste – treatment of legal fees – post separation contributions – earning capacity – section 75(2) factors – factors arising under section 75(2)(m) – legal fees – unassessed capital gains tax – just and equitable.

Legislation:

Family Law Act 1975, ss.79(1); 79(2);79(4); 75(2)

Evidence Act1995 (Cth) s.140

Gilbert & Gilbert [2013] FCCA 667
Fox v Percy (2003) 214 CLR 118
Briginshaw v Briginshaw (1938) 60 CLR 336
Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Bevan & Bevan [2013] FamCAFC 116
Stanford v Stanford [2012] HCA 52
Watson & Ling [2013] FamCA 57
In the Marriage of AJO & GRO (2005) 33 Fam LR 134
In the Marriage of DJM and JLM (1998) 23 Fam LR 396
In the Marriage of Townsend (1994) 18 Fam LR 505
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of Browne & Green (1999) 25 Fam LR 482
Rushton & Rushton [2011] FMCAfam 1259
NHC & RCH (2004) FLC 93-204
In the Marriage of Spiteri (2004) 33 Fam LR 109
Ferraro & Ferraro (1992) 16 FamLR 1
Robb & Robb(1995) FLC 92-555
Waters & Jurek (1995) FLC 92-635
D & D [2003] FamCA 473
In re: Watson: ex parte Armstrong (1976) FLC 90-059
Mallett & Mallett (1984) FLC 91-507
Pierce v Pierce (1999) FLC 92-844
Rosati v Rosati (1998) FLC 92-804
Norbis v Norbis (1986) FLC 91-712
C & C (2005) FLC93-220
Clauson & Clauson (1995) FLC 92-595
L & L [2003] FamCA 40
Ferguson & Ferguson (1978) FLC 90-500
Robb and Robb (1995) FLC 92-555
Steinbrenner & Steinbrenner [2008] FamCAFC 193

Applicant:

MS PAILING

Respondent:

MR GILBERT

File Number:

ADC 1244 of 2013

Judgment of:

Judge Brown

Hearing dates:

20, 21 & 22 April 2015

Date of Last Submission:

22 April 2015

Delivered at:

Adelaide

Delivered on:

24 September 2015

REPRESENTATION

The Applicant:

In person

The Respondent:

In person

ORDERS

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

The husband shall retain for his sole use and benefit, absolutely free from any further claim or demand of the wife, the following items of property, which if currently in the possession or control of the wife are to be delivered to the husband, as he directs and at his expense, within twenty-eight (28) days of the date of these orders:
(a)The (omitted) boat;
(b)The Prado motor vehicle;
(c)The proceeds of sale of the minibike;
(d)The (omitted) shares;
(e)The proceeds of the claim in respect of the Yaris motor vehicle;
(f)One half of the (omitted) shares;
(g)The Property J apartment;
(h)All other furniture, furnishings, motor vehicles and personal effects and savings currently in his possession and or control not otherwise specifically dealt with by these orders, including superannuation other than the superannuation specified in orders (8), (9) & (10) hereof.
The wife shall retain for her sole use and benefit absolutely free from any further claim or demand of the husband, the following:
(a)The (business omitted) equipment;
(b)Her interest in the Property D property;
(c)All other furniture, furnishings, motor vehicles and personal effects and savings currently in her possession not otherwise specifically dealt with by these orders, including superannuation other than the superannuation specified in orders (8), (9) & (10) hereof.
Upon settlement of the sale of the former family home located at Property C and the (omitted) studio located at Property G, the proceeds of sale be distributed as follows:
(a)In payment of the commission due to the selling agent;
(b)In payment of all legal costs relating to the sale;
(c)To discharge all moneys secured, by way of mortgage, against the titles of both properties in favour of the (omitted) Bank;
(d)To pay all taxes, rates and other outgoings accrued in respect of each property;
(e)The sum of $50,000.00 to be paid into an interest bearing account in the parties’ joint names to be distributed pursuant to the provisions of order (4);
(f)As to any balance remaining:
(i)Sixty percent (60%) to the wife;
(ii)Forty percent (40%) to the husband.
Concurrently with the payment ordered in order (3)(e) the husband pay to the wife the sum of $65,133.00.
The wife do release the husband in respect of any liability arising in respect of the (omitted) Bank business loan relating to her (omitted) business and the purchase of the equipment utilised therein and thereafter indemnify and keep indemnified the husband against any liability arising in respect of such loan.
The wife take all necessary steps and complete all necessary documents, including completing her relevant taxation return, within 28 days of the date of these orders, in order to ascertain her liability in respect of any capital gains tax arising from the sale of the property located at Property B, previously registered in her sole name.
Upon issue of an assessment in respect of the capital gains tax referred to in order (6) hereof the husband and wife cause such capital gains tax to be satisfied from the moneys retained from the sale of the properties ordered in order (3)(d) hereof with any remaining balance after such payment has been in full to be divided between the parties so that the wife receives 60% of same and the husband 40%.
Pursuant to section 90MT(1)(a) of the Family Law Act, 1975 there be a splitting order in respect of the husband’s (omitted) Super Trust – (omitted) Super Fund (omitted) (plan) employer number (omitted) and pursuant to section 90MT(4) of the Act, a base amount in the sum of $150,000.00 be allocated to the wife out of the husband’s interest in such sum.
The wife serve a copy of these orders on the trustee of the (omitted) Super Trust – (omitted) Super Fund ((omitted)) (plan) employer number (omitted) by 2 October 2015 and thereafter the aforesaid trustee has liberty to relist the matter in the event that the trustee is unable to comply with order (8) hereof but otherwise the operative time for the aforesaid splitting order shall be 16 October 2015.
The trustee of the Super Trust – (omitted) Super Fund ((omitted)) (plan) employer number (omitted), the husband and the wife in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all necessary documents as are required to calculate the payment entitlements of the wife in accordance with order (8) hereof.
Liberty granted to re-list in respect of any consequential orders arising.
All applications be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Pailing & Gilbert is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 1244 of 2013

MS PAILING

Applicant

And

MR GILBERT

Respondent

REASONS FOR JUDGMENT

Introduction

These proceedings relate to the final settlement of matrimonial property proceedings. They have been on foot since April of 2013.
Ms Pailing “the wife” and Mr Gilbert “the husband” commenced a de facto relationship in 1994. They married on (omitted) 2002. They finally separated on 27 August 2012. They are now divorced.
The parties are the parents of X born (omitted) 1995 and Y born (omitted) 1997. X is on his “gap” year prior to starting university in Queensland. Y is in her final year of secondary school at (omitted) School ((omitted) School).
At present, the children live with the wife, in rented accommodation in inner suburban Adelaide. However, it is anticipated that X will shortly move to take up his studies at (omitted) University. He has some income from employment but remains significantly dependent upon his parents’ income.
Y was granted a half scholarship at (omitted). However, notwithstanding the scholarship, her fees and other expenses remain a significant financial burden on the parties. It is anticipated that she will proceed to tertiary education in due course.
The wife has a child from an earlier marriage. She is Z, who was born on (omitted) 1992. Z also lives with the wife. She is studying at university and supports herself by doing (omitted) work, mainly at night.
Z was two years of age when the parties began their relationship. As such, the husband played a significant role in parenting her. However, at present, Z and the husband are estranged from one another.
There can be no doubt that the circumstances surrounding the parties’ separation, and what has happened in the period since, have been extremely traumatic for all concerned, including Z, X and Y.
At present, X and Y spend limited time with their father. Mr Gilbert is critical of Ms Pailing for not supporting his relationship with the children and allowing them to become aligned with her, in the acrimonious circumstances, which have built up since mid-2012.
Mr Gilbert has been assessed to pay child support for Y. Currently the weekly rate is $524.85.[1] In addition Mr Gilbert has asserted that he remains committed to providing one half of Y’s school fees and supporting X, whilst he is attending (omitted) University.
[1] See exhibit Q
The husband is an (occupation omitted) employed by (employer omitted). (Employer omitted) is an (country omitted) company engaged in (business omitted). Mr Gilbert has been with the company for around fourteen years and anticipates that he will see out his career with it.
Mr Gilbert has just turned 50, having been born on (omitted) 1965. He is a PAYG tax payer. Accordingly, his income is readily ascertainable. At present his base salary is $158,870.00 per annum, which includes a merit increase. He is likely to receive a bonus of around $5,000.00.
Ms Pailing was born on (omitted) 1966. Considerable controversy surrounds her level of income. She is a (occupation omitted), who operates her own business (omitted business). In addition, from time to time she has provided her services, on a casual basis, for a business known as (omitted), where she is treated as a PAYG tax payer.
Although the wife characterises herself as being very competent at what she does, providing (omitted), at her (business omitted) in Property G, it is Ms Pailing’s position that her business is not particularly remunerative.
She asserts that she has to compete for clients with (omitted), who provide similar services to her. However, it is her experience that many potential clients prefer to utilise (omitted) because of the professional cachet, which they enjoy and which she does not. As such, it is her position that her income is significantly less than that enjoyed by her former husband.
Mr Gilbert does not accept that this is so. It is his position that Ms Pailing is able to earn a comfortable income from her occupation as a (omitted) but, as a consequence of her self-employment, particularly the potential which it allows her to seek and receive payment for services in cash, she is able to conceal her true level of income.
In this context, Mr Gilbert asserts that Ms Pailing keeps two sets of accounts – one to be made available to the Australian Tax Office and for child support purposes; the other set representing her true level of cash receipts and exact details of appointments, which she maintains for her own secret information.
Ms Pailing vehemently refutes that this is the case. She acknowledges that her bookkeeping and other record maintenance have frequently been chaotic. However, it is her positon that there is nothing inherently sinister in this, rather it reflects her lack of aptitude for the business and accounting side of her (business omitted).
There have been earlier and related proceedings between the parties, regarding child support issues, in the Social Security Appeals Tribunal. The issue of Ms Pailing allegedly having two sets of accounts was an issue examined in these proceedings. She alleges that Mr Gilbert has stolen some of her accounting records and he should not be allowed to benefit from his illegal action in these proceedings.
This is not the end of the controversy between the parties. At an earlier stage of proceedings, I delivered judgment in respect of an interim application brought by the wife in respect of an application for interim spousal maintenance and to require the husband to pay mortgage payments due in respect of the parties’ former family home, situated at Property C “the Property C property”, and a more recently purchased property (now sold) at Property S “the Property S property”.
At the time of this application (24 June 2013) it was common ground between the parties that they had very little, if any, actual equity in the Property S property. The wife, at this stage, wished to retain the Property S property, which, by then, was her and the children’s place of residence. It was her position that she could not meet the required mortgage payments, which the husband was withholding out of spite.
Following separation, the husband continued to live at the Property C property. This was used as security for the mortgage secured against the Property R property. There was also a mortgage secured against the Property C property.
In extensive reasons delivered at the time,[2] I reached the conclusion that the husband did not have capacity to pay child support payments, for X and Y; mortgage repayments on two properties; and the children’s school fees; as well as spousal maintenance.
[2] See Gilbert & Gilbert [2013] FCCA 667
I formed the provisional views that the parties’ were considerably over-stretched and the decision to purchase the Property R property was almost certainly an imprudent one, given that the parties had now separated and were required to maintain separate households.
At this early stage, I endeavoured to construct a rough mud map of the parties’ financial circumstances, through an examination of their respective financial statement filed at the time. I appreciated, at the time, that there were no independent or agreed valuations of relevant pieces of property and the exercise arose at an early stage. However, it seemed to me that it was likely to be helpful to them, if the parties focussed on the limits of the issues in dispute between them.
In extremely rough and ready terms, I calculated that the parties’ gross assets to come to a sum of around $2.2 million and their liabilities to be somewhere around $1.6 million. In all the circumstances, it seemed to me to be largely axiomatic that there were great perils for the parties in proceeding with what seemed to me to be potentially extremely vitriolic property proceedings, given the extent of the property available and the likely costs.
As a consequence, I invited the parties to consider how they could most effectively realise their various assets and reduce their debt, in an orderly fashion, so as to realise the maximum amount possible for division between them, as well as avoiding the worst consequences of emotionally fraught proceedings, such as these.
At the time, I wrote as follows:
“… [I]t behoves the parties to consider closely how much of their scarce funds they are prepared to commit to litigation. Considerations of prudence dictate that there should be some level of objective proportionality between what each is likely to derive from the proceedings and what each will spend in achieving it. Such considerations are particularly germane in the period prior to the parties embarking upon the formal court inaugurated conciliation process.
Although it might appear both trite and condescending for me to point it out, the parties are currently confronting a serious mutual problem. It is their problem, not the court’s problem. In such circumstances, it is often useful for the parties concerned and their lawyers to approach the case arising as a problem solving exercise. From my perspective, very often, matrimonial property proceedings are an exercise in financial harm minimisation.”[3]
[3] Ibid at [76]-[77]
Regrettably, Cassandra-like, I perceive that my admonitions have gone unheeded. The parties were each unrepresented at final hearing. In the husband’s case, he has incurred legal fees of approximately $42,000.00,[4] whilst the wife has incurred legal costs of approximately $74,000.00.[5]
[4] See Exhibit U
[5] See Exhibit U
It is the wife’s case that the husband has pigheadedly ignored the financial crisis unfolding around the parties and left her to do her best to clean up the mess, to which he has abandoned her. It is her position that she attended to the sale of the Property R property and was able to secure a good price for it, without any assistance from the husband.
In addition she sold another property, located at Property B “the Property B property”, in order to assuage the parties’ financier, again, she asserts, without any assistance or cooperation from the husband.
More significantly, it is her case that, in November 2013, Mr Gilbert vacated the Property C property, leaving it in a deplorable condition, which renders it problematic to sell. In addition, she is embittered that the husband stopped making the necessary mortgage repayments, in respect of the property, which she asserts was another act of financial bastardry, which has penalised not only the husband, but also her.
In these circumstances, it is Ms Pailing’s position that she has made the necessary payments to preserve the Property C property, whilst Mr Gilbert’s actions can only be regarded as having diminished or wasted the property’s value and he should be held to account for his actions, in dollar terms, in the context of the finalisation of these proceedings.
The parties also own another property, located at Property G, “the (business omitted) studio”. It is from these premises that the wife conducts her business. It too is subject to a mortgage in favour of the (omitted) Bank.
There have been irregularities in respect of the payment of the required mortgage repayments relating to both the Property C property and the (business omitted) studio. As a consequence, the mortgagee concerned has issued default notices. As at the date of trial, approximately $105,000.00 was owed in respect of the Property C property and approximately $170,000.00 in respect of the (business omitted) studio. [6]
[6] See Exhibit L
It is the wife’s position that, in the months prior to these trial proceedings commencing, she has been in constant negotiation with (omitted) Bank and persuaded it not to seize the properties concerned and sell them in a fire sale, which would be mutually detrimental to her and the husband.
Again, she asserts that this is a matter to her credit. She is also critical of the husband for removing floor boards, from the Property C property, which she asserts have significant value. She estimates that she has spent in excess of $5,000.00 in preserving both properties, whilst the husband’s behaviour has only caused the parties to lose equity in the properties concerned.[7]
[7] See Exhibit T
Neither party now seeks to retain either the Property C property or the (business omitted) studio. As a consequence, a consent order was made on 22 April 2015, by which it was agreed that both properties would be placed on the market for sale, at a price to be agreed between the parties. I have not been advised as to the progress of either such sale.
The wife owns equipment, which she uses in the (omitted) business. It has been formally valued at $8,825.00.[8] The equipment is now somewhat old, but the wife needs it to continue in business. It is however, subject to a business loan in the sum of around $41,000.00.[9]
[8] See Exhibit K
[9] See Exhibit H

It is the wife’s position that she has always paid the recurrent loan repayments in respect of the equipment. It is also her position that the loan should be regarded as a joint matrimonial liability. The husband does not agree. However it is clear that the wife derives taxation benefits from depreciating the items of equipment.
The parties became involved with one another in (omitted), Victoria, where both have family connections. They lived together for a number of years, prior to their marriage. In this context, controversy arises in respect of precisely when their financial relationship began. This has implications in regards to how the proceeds of sale of the Property B property are to be treated in these proceedings.
The Property B property was registered in the wife’s sole name. It was purchased on (omitted) 1994 for the sum of $69,500.00.[10] The required deposit was $3,475.00. It seems more likely than not that this sum came from the wife’s savings. She also received a First Homebuyers Grant of approximately $7,000.00.
[10] See Annexure F to the husband’s affidavit filed 15 April 2015
It is the wife’s position that the property was purchased prior to the parties commencing their relationship and she also significantly improved it, through renovations, which she both organised and paid for. As such, it is her case that she is entitled to credit, when the parties’ respective financial contributions are assessed, for making a significant initial contribution of capital. The husband does not agree.
There is no doubt that the Property B property became the parties’ family home. They were living as a couple prior to X’s birth, in late 1995. It is the wife’s position that she contributed a further sum of $20,000.00, which was used to renovate the property, following its purchase, which is a contribution solely attributable to her. The husband also rejects this contention.
It is the husband’s position that he and his family, who have a (omitted) business in (omitted), made significant direct contributions to the various renovations at the Property B property. The husband himself has some building skills. He asserts that he was involved with sanding and coating timber floors, renovating the bathroom and performing other structural repairs. In addition, he asserts that he co-ordinated various subcontractors, including the plumber, electrician and joiner, who worked on the property.
In addition, Mr Gilbert deposes that the parties were able to buy materials, at a discount, through his parent’s business. He further asserts that, whilst the Property B property was being renovated, he and the wife were able to live rent free, at a property owned by his parents nearby to the Property B property.
Mr Gilbert accepts that Ms Pailing contributed her own labour and paid for materials and work done. However, it is his position that the wife has attempted to whiteout his substantial contributions made towards improving Property B, in order to advantage her own position.
For her part, the wife asserts that the husband has grossly exaggerated what he did at Property B and the reality of the parties’ situation is that Mr Gilbert brought assets of no value into the relationship and contributed very little to Property B.
The parties moved to Adelaide in 2001. Thereafter the Property B property was tenanted. Following the parties’ separation in 2012, and as a consequence of the financial crisis which it precipitated, the wife elected to sell the Property B property. It was sold in October of 2013 for the sum of $385,000.00.[11] The selling costs were approximately $11,000.
[11] See Exhibit C
I have not been provided with a settlement statement in respect of the sale of the Property B property. It remained subject to mortgage. In addition, I have not been provided with any documentary evidence to indicate what sum was advanced, from the sale price, to discharge this mortgage. The wife estimates the amount owing as being somewhere in the vicinity of $95,000.00.[12]
[12] See wife’s affidavit filed 11 April 2013 at para 17(i)
The Property S property was purchased in 2011, which was a difficult year for the parties concerned. Their marriage was under pressure and X had changed schools from one in Property G to (omitted) College, which is in inner Adelaide. It was impracticable for X to commute daily from Property G.
It was against this background that the Property S property was purchased in early 2012. The wife and children needed somewhere to live in Adelaide. It was unclear whether the husband would join the wife and children at Property S later and, if so, whether the Property C property would be sold.
The purchase price of the Property S property was almost entirely borrowed. I have not been provided with a settlement statement in respect of the transaction. With the parties’ separation, in September of 2012, it became apparent that Mr Gilbert would not be moving into the Property S property. At this stage, it also became readily apparent, at least to any objective by-stander that the parties were gravely over committed financially.
This was the background to the first judgment delivered 27 June 2013.[13] At this stage, it was the wife’s position that the husband should continue to pay the recurrent mortgage payments required in respect of the Property S property, in an amount of $1,100.00 per week, which she asserted he had previously agreed to do. It was the husband’s position that he had no capacity to make such payments.
[13] See Gilbert & Gilbert [2013] FCCA 667
Ultimately, I accepted the husband’s position. This financial crisis was the background to the sale of the Property B property, all of the proceeds of which were paid into the mortgage account relating to the Property S property. Without wishing to labour the point, again I reiterate I have not been advised in precise terms what this amount was. However, the amount was sufficient to dissuade the mortgagee of the Property S property ((omitted) Bank) from taking foreclosure proceedings.
It is the wife’s position that the proceeds of sale of the Property B property will attract capital gains tax. Given that the property has been tenanted for well over a decade, this appears undoubtedly to be the case. It is the wife’s further position that she will be legally liable for this capital gain, which should be taken into account, in these proceedings and distributed equitably between the parties.
No formal assessment of the capital gains liability has as yet issued. The wife estimates the liability as being somewhere in the vicinity of $45,000.00. In the absence of certainty regarding the level of the liability, the husband resists the debt being taken into account in strict arithmetical terms.
Once again, financial necessity and pressure from the mortgagee concerned dictated that the Property S property be sold. Again, it is the wife’s position that she was the person who took responsibility for this action, whilst the husband was paralysed. As previously indicated, it is the wife’s position that she is entitled to credit for her actions in this regard.
The Property S property was sold, at a profit, in mid-February 2014, for the sum of $900,000.00. After the payment of expenses and other adjustments, an amount of $875,071.98 was advanced to the (omitted) Bank.[14] Some of this sum represented the net proceeds of sale of the Property B property.
[14] See Annexure P to the husband’s affidavit filed 15 April 2015
The parties agree that some of the net proceeds of sale were utilised to discharge their joint credit card debts, with other sums utilised to reduce the respective mortgages on the Property C property and the (business omitted) studio. Bank records tendered by the wife indicate that $94,511.96 was paid into the Property C mortgage on 18 February 2014; with $71,405.88 being paid into the (business omitted) studio mortgage, on the same date.[15]
[15] See Exhibit I and Exhibit H respectively
The proceedings are also concerned with two other pieces of real property. They are an apartment at Property J, “the Property J apartment”; and a property located at Property D, “the Property D property”.
The Property J apartment is registered in the husband’s name, with another person. The husband has had his interest for many years and acquired it prior to the parties’ relationship. It is agreed, in general terms, that the husband’s 50% interest in the property is worth approximately $77,500.00, which is almost equal to the mortgage secured against it. The property is tenanted and the husband gains some tax advantage, through negative gearing. He wishes to retain the property.
The Property D property is more problematic. The property was purchased in 1995 by the wife and her brother to provide accommodation for their elderly father, who was then in poor health. The wife’s case is that her sister-in-law currently also has an equitable interest in the property, which she acquired when the wife’s father died in 2009. This is disputed by the husband.
It is unclear to me (and indeed to the parties themselves) what the precise history is of the Property D property. The relevant parcel of land is apparently quite large and it was selected so that a demountable home might be placed on it, in order to secure some form of income for the wife’s father. He provided funds in order to purchase the property and also renovate the main house on the land.
It is the husband’s position that he played a major role in this enterprise, particularly through securing council approval for the demountable to be placed on the land and providing labour to renovate the main house. It is also his case that his parents funded several of the required renovation and construction works, through their building business.
Recently, the Property D property has been formerly valued at $375,000.00.[16] It is the wife’s case that she has a 1/3 interest in the property because of the agreement between her brother and sister-in-law. The husband asserts that she has a 1/2 share, in which he has some form of equitable interest, as a consequence of the improvements, which he facilitated there.
[16] See Exhibit A
The Property D property is also subject to a mortgage. I have not been provided with any formal documents, which evidence the exact sum owing in respect of the mortgage and who are the legal mortgagors concerned. It seems that the mortgagee is the (omitted) Bank. The husband is critical of the wife for not disclosing what is the amount of the mortgage, so that the wife’s net interest in the property may be determined.
In her most recent statement of financial circumstances, the wife asserts that she receives $225.00 per week by way of rent from the property and is responsible for a weekly mortgage payment of $85.00. It is her case that the Property D property should not loom large in these proceedings, because like Property J, it has been largely quarantined from the parties’ recurrent financial affairs. As such, she should retain her interest in it.
Other controversies exist between the parties regarding various chattels, particularly a (omitted) boat and some motor vehicles, particularly a Toyota Prado; a Toyota (omitted); a Toyota (omitted); and a Toyota Yaris, which was utilised by X and Y, but was written off in an accident, which occurred in October 2013, when X was driving.
The (omitted) boat has been recently professionally valued at $22,000.00.[17] Both parties wish to retain it. It is not precisely certain why this is so. In particular I have not been provided with any evidence as to the precise nautical skills or interests of the parties. The wife does however concede that the husband was the spouse who wished to purchase the vehicle, against her better judgement, as she considered it an unnecessary extravagance.
[17] See Exhibit K
The wife asserts that the boat was purchased, in 2009, for the sum of approximately $35,000.00, which was financed by an inheritance of $70,000.00, which she received from the Estate of her late father. The wife also asserts that the boat has been neglected by the husband and he should be held responsible for its wastage.
The Yaris motor vehicle was insured. It is the wife’s case that Mr Gilbert received the insurance payout of $7,600.00, which should be added back into the parties’ pool of assets. The Toyota (omitted) vehicle was purchased for $2,500.00, as a replacement for the Yaris. It is currently being used by Y.
The parties agree that the Prado motor vehicle is worth $22,500.00. It is currently in the wife’s possession, as she removed it from the husband, as she alleges he was intent on reducing its value by excessive use and maintenance neglect in order to prejudice her interests. Like the (omitted) boat, the Prado is emblematic of the vitriolic dispute between the parties. Again both parties apparently wish to retain it.
The Toyota (omitted) is in the husband’s possession. He purchased the vehicle in (omitted) 2012 for $34,500.00, including registration and other expenses, including GST. It is his position that the vehicle is leased and he has no equity in it.[18] The wife is critical of the husband for purchasing what she sees as an expensive and inappropriate motor vehicle for himself, which she categorises as a “toy”.
[18] See Exhibit S
The wife is currently driving a VW motor vehicle. She estimates its value at $28,000.00. It is her position that this vehicle is also fully leased and she has no equity in it. She is critical that she was forced to purchase the vehicle because the husband would not assist her with obtaining another vehicle.
Although it need not be said given the history recounted thus far, the proceedings have been marked by an extreme level of acerbity and mistrust. Each party presents as being the victim of the other’s lack of co-operation and selective memory.
In this context, both the husband and wife wish liabilities, which have been discharged earlier, as well as monies, which have already been spent, to be notionally added back into the parties’ pool of property, so each may obtain some form of credit for those sums.
In the wife’s case, the most significant items are the husband’s tax refunds totalling some $37,157.00, to which she asserts she has some entitlement because of negative gearing allowances and the manner in which the parties’ finances have been organised. Essentially the parties own the (business omitted) studio jointly. It is subject to a mortgage but the rent nominally paid by the wife does not satisfy the mortgage, leading to a tax credit.
From the husband’s perspective, the sums are long since spent, on general living expenses, as well as his legal expenses and cannot now be fairly identified in the manner proposed by the wife. He does however concede that a significant portion of the tax return should be included in the parties’ pool of assets to ensure overall fairness between the parties. However, it is his position that the portion of the tax return which relates to the period after the parties separated should not be so included.
In addition, the wife asserts that she spent significant sums in preparing the Property B property for sale. The most significant expenses being a plumbing bill of $749.00; and a rubbish removal charge of $900.00. As previously indicated, she also seeks credit for various expenses relating to the Property C property and the (business omitted) studio, which she has paid.
The husband sold a mini bike, for the sum of $2,500.00. He also received a medicare refund, in an amount of $8,048.00, in respect of a surgical procedure he had undergone, which had originally been funded from joint family income. The wife asserts both such sums should be added back and credited to the husband’s side of the ledger.
X and Y both have laptops. The wife purchased these computers, by means of a credit card, which remains indebted in a sum of $5,751.00, which again Ms Pailing asserts needs to be taken into account in how the court calculates the parties’ pool of assets.
It is the husband’s case that, when the parties finally separated in mid-2012, which coincided with the purchase of the Property S property, it was orally agreed between the parties that the wife would pay him the sum of $550.00 per week, from her income and, in exchange, he would service the Property S mortgage. In addition, he asserts that it was agreed that the parties would share equally the cost of the children’s school fees.
It is Mr Gilbert’s position that the wife soon reneged on this arrangement and that he has made significant direct financial contributions towards the support of the children, including paying their school fees and financing school trips for them.
However, more significantly, he asserts that the wife withdrew approximately $17,000.00 from an account standing in his name, asserting that she would use the monies to discharge credit card debts jointly held. He asserts that she did not do what she agreed. Rather she converted this sum to her own use without explanation. As such, the husband asserts that this sum needs to be added back into the asset pool.
As previously indicated, although each party is now unrepresented, each has a remaining liability for outstanding legal fees. In the wife’s case, she has incurred legal fees of around $74,000.00, of which she has paid $12,500.00 and owes $61,354.14.
The husband’s legal fees are less than this amount, but still remain significant. He has paid approximately $27,500.00 of his costs of around $42,000.00. He has been able to pay his legal expenses as a consequence of his superior salary.
It is the wife’s position that the current situation in respect of legal fees is grossly unfair to her. As such, she seeks an outcome from the court, which would see her current liability for legal fees neutralised, so that she faces a liability of a similar magnitude to that of the husband.
The husband was a member of the (employer omitted) from 1984 until 1994. As a consequence, he has an entitlement to (employer omitted) superannuation. In addition, he has acquired superannuation as a consequence of his employment with (employer omitted).
The parties agree that the husband has superannuation entitlements worth $311,259.88 as at 30 June 2014.[19] On the other hand, the wife has modest superannuation entitlements worth approximately $4,000.00.
[19] See Annexure R and Annexure S to the husband’s affidavit filed 15 April 2015
To their credit, the parties agree that the court should make an order, which would affect an equalisation of the parties’ superannuation holdings. From the husband’s perspective, he recognises the length of the parties’ relationship with one another and their tacit understanding that his superannuation would support them both in retirement.
Other minor controversies remain between the parties, which the court is likely to have difficulty in resolving, but which assume some significance for the parties concerned. These centre on such things as Qantas Frequent Flyer points and a number of potted ornamental (omitted) plants, which the husband removed from the Property C property, when he vacated it.
During the course of the hearing, the husband indicated that he would liaise with Qantas and endeavour to see if half of the frequent flyer points, currently standing in his name, could be transferred to an account in the wife’s name. In addition, he indicated that he was willing to divide the (omitted) plants equally with the wife, in recognition of the importance, which these plants have for her. I will take the husband at his word in respect of these two issues.
The proceedings between the parties have been on foot since April 2013. I have no doubt that they have taken a heavy emotional and financial toil on both parties, as well as on Z, X and Y. The parties both presented as being exhausted in every sense of that word.

As such, it has been extremely difficult for each of them to present their case before the court and cross-examine their former partner. Neither has any great legal or financial acumen and each struggled, from time to time, to come to terms with the legal principles, which must be applied and more significantly concentrate on what was important in the case rather than on what continued to irk each of them.
In this context, there remains some lack of clarity about the parties’ complex financial history with one another and what is the exact value of items of property. In this regard, the greatest area of uncertainty surrounds the value of the Property C property and the (business omitted) studio. In addition, there is a lack of clarity regarding the value of some boating equipment, relating to the (omitted) vessel and the husband’s tools.
An earlier hearing, which was scheduled for August 2014, was vacated, on the application of the husband’s then solicitor, because significant items of property had still not been valued and, on the husband’s case, he had not been provided with full discovery of documents from the wife, particularly regarding the income derived from her (omitted) business.
When the case returned for further hearing in late April of 2015, by which stage both parties had become unrepresented, I was of the view that there was no point in further adjourning the case, notwithstanding the deficits in the evidence.
I was satisfied that I was duty bound to proceed with the case and do my best to resolve it fairly, regardless of the likely deficiency in the evidence. In this context, given that the parties acknowledged that both the Property C property and the (business omitted) studio needed to be sold, I was satisfied that the market would provide a fair value for these two properties.
In addition, to their mutual credit, as the case unfolded, both parties were able to obtain various documents, as I directed them. In addition, at a late stage, formal valuations were obtained in respect of the Property D property and the (omitted) boat. The valuation of other items of property were largely agreed.
Notwithstanding the parties’ co-operation with one another, in the trial process, they remain deadlocked as to an appropriate resolution. I have no doubt that this is a legacy of the significant bitterness, which the financial crisis precipitated by their difficult separation engendered. In addition, from my perspective, it is difficult to ascertain with certainty, what precise orders the wife seeks from the court.
As best I can glean, it is her position that, after the various items of property, as specified by her, have been added back, she should receive 65% of that pool. From her perspective, this weighting recognises her significantly more modest salary than that of the husband and is reflective of the fact that X and Y will remain financially dependent upon her for the foreseeable future.
On the other hand, it is the husband’s position that the parties face a not dissimilar financial future and made approximately equal, although disparate, contributions to the acquisition of their various assets. He categorises Ms Pailing as a capable person, who has readily saleable skills in (business omitted). As such, it is his position that the wife will be able to support herself comfortably into the future and, as such, the parties’ various assets should be divided equally.
These proceedings are intended to resolve the various disputes between the parties and, as far as is possible, finalise their financial relationship with one another, so that each may move on with the remainder of their lives.

The issues

I am conscious that it has taken some eighteen pages to detail the events and controversies, which bring the parties and the court to this point. At this point, it is useful to summarise the factual and level issues in dispute between the parties as follows:
·What is the discrepancy in income and earning capacity between the parties;
·If there is a marked discrepancy, in this respect, what is its relevance of it for the division of the parties’ pool of assets;
·What are the consequences, if any, of the state of the Property C property, when Mr Gilbert left it;
·What have been the parties’ various contributions, in both a financial and homemaking sense, during the 18 years of their relationships;
·In particular, was there a marked discrepancy in asset backing, at the start of their relationship;
·In this context, what is the position regarding contributions made in the form of the Property B property;
·How do each of the parties provide financial support, for X and Y, and what is the relevance of this support, in the context of these proceedings, for the division of the parties’ marital assets;
·Given Mr Gilbert and Z are not biologically related, is there any relevance to the support the husband provided for Z during the years of the parties’ relationship;
·What have been the parties’ respective contributions, in the approximately three years, which have elapsed, since their separation;
·How should these post separation contributions be recognised;
·In particular, should debts paid or items of property disposed of be notionally added back into the parties’ pool of assets, as calculated by the court, even if those items or the monies paid are no-longer accessible by the parties;
·How should the parties’ legal costs be approached, particularly in respect of fees still outstanding;
·How should the issue of the wife’s capital gains tax liability for the Property B property be approached, given the uncertainty surrounding how much the tax will be;
·How should the asset pool be calculated;
·In particular, how should the Property J and the Property D property be recognised; and
·Above all, what is a just and equitable division of the parties’ property.

The evidence

In these reasons for judgment, findings of fact are made on the balance of probabilities, from my observation of the demeanour of each of the witnesses concerned.[20] I have tried to reach my conclusions on credibility and reliability on the basis of contemporary materials, objectively established facts and importantly, on the apparent logic of events.[21]
[20] See Evidence Act1995 (Cth) at s.140
[21] See Fox v Percy (2003) 214 CLR 118 at 129 [31] per Gleeson CJ, Gummow and Kirby JJ
In addition, I bear in mind s.140(2) of the Evidence Act, which indicates that in applying this standard of proof, I am entitled to consider the nature of the subject-matter of the proceedings and the gravity of the matters alleged.
These criteria reflect the well-known comments of Dixon J, in the case of Briginshaw v Briginshaw[22] as follows:
“The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the Tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”
[22] Briginshaw v Briginshaw (1938) 60 CLR 336 at 362
In this particular case, the husband has alleged that the wife has compiled fraudulent accounts and kept a bogus diary, over many years, in respect of her business. The motive for this conduct is said to be a desire to conceal her true level of income from the Taxation Office.
It is a significant allegation of dishonesty to make. It is also the case that, by necessary implication, the husband was aware of this practice, whilst the parties were married and went along with it, when it suited him.
In these circumstances, it seems likely that the husband realised that his allegations would gain little traction, in the current proceedings and those before the SSAT, in the absence of corroborative documentary evidence.
He acknowledges that he obtained what he characterises as the wife’s real working documents, particularly her diary, when he entered the Property S property, after the parties had separated and removed them, whilst Ms Pailing was out, without her consent or knowledge. These documents have been presented to the court, in the face of the wife’s vehement objection.
In these circumstances, although she does not express it as such, the wife contends that it would be contrary to public policy for Mr Gilbert to seek to rely on evidence, which he has illegally obtained. In any event, regardless of this objection, it is her position that she is an incompetent record keeper and the diaries do not establish anything in particular. It is her case that she has a laissez faire attitude to business and there is nothing sinister in the fact that she keeps multiple records of her appointment times.
I will return to this issue, in more detail, later in these reasons for judgment. In my view, the issue is emblematic of the bitterness of the dispute between the parties. Regrettably the dispute has become unduly prolonged and, as such, it has not been objectively in either party’s overall interests for it to proceed to final adjudication.
During the hearing, both the husband and wife presented as being the victim of the other’s poor behaviour and financial irresponsibility, in the period following their separation. Undoubtedly, the past three years have been extremely difficult and traumatic for both Ms Pailing and Mr Gilbert, and they each have much unfinished emotional business, with one another, as a consequence.
In these circumstances, it is hardly surprising that they have not been able to resolve the proceedings and begin the process of moving on. The parties have my sympathy for the difficult situation, in which they have been placed, as a consequence of the end of their marriage and the resulting need to disentangle their somewhat convoluted financial relationship with one another.
As the introduction to these reasons for judgment indicates, the parties’ financial affairs are complicated. However, this is a reflection of their highly geared circumstances and the fact that they needed to remain in a relationship together to keep their financial affairs afloat. In addition, the parties seem to have enjoyed a high standard of living, during their marriage, which required them both to work hard.
Regardless of the acerbic nature of the proceedings, I do not consider that this is a case, which turns on credit. Neither was a particularly good financial historian or to have a clear understanding of what information was needed to resolve the matter appropriately. However, notwithstanding these problems, both parties seemed to me to be generally honest in their evidence and to want to assist me, as much as possible, to resolve their case efficiently and fairly.
This tendency was more pronounced in Mr Gilbert than Ms Pailing. He was willing to make concessions, against his interests, particularly in respect of how he left the Property C property, which he agreed left a lot to be desired, but which he rationalised on the basis of the angst from which he was suffering at the time.
The parties are both intelligent and enterprising people. The wife in particular, is a person of energy, focus and resolve. As her work history demonstrates, she has a great capacity to reinvent herself and take on new challenges in her life, particularly so far as employment is concerned.
However, neither party seemed to have any great financial acumen. The records which they have kept are incomplete and have been presented to me in a haphazard manner. Accordingly, the irony of the case is that the parties have wanted me to conduct some form of forensic accounting exercise, in respect of their financial affairs, but have not provided the documents, which could make such an exercise possible, even if I was qualified to undertake such an exercise and thought it appropriate to do so.
Much of the case of each party was based on innuendo or suggestion. This is particular so in regards to the issue of assets alleged to have been wasted by the other. It is difficult, if not impossible, for me to chase every financial rabbit down each financial hole and achieve some ideal reconciliation of every dollar, which has passed through the parties’ respective hands since their separation approximately three years ago.
As such, although neither party is to be regarded as scheming or disingenuous in their evidence, nor can they be regarded as being completely objective in their presentation. Both parties have an axe to grind and both, for obvious reasons, want to maximise their respective entitlements at the end of the court’s deliberations.
At the end of the day, the parties continue to view each other through a distorting prism of hostility. As such, each has adopted the natural tendency, in proceedings such as these, to emphasis their own personal contributions and strengths, to the detriment of the others. Accordingly, neither party is to be regarded as completely objective or reliable in their evidence.
It is also highly regrettable that when the parties really needed legal representation – at the stage of proceedings when their balance sheet needed to be constructed – No lawyers were available to help them focus on what was important in the case. I did my best to assemble as much documentary evidence, as I could, as the trial progressed, but necessarily this was an ad hoc affair. It is not my role to conduct an inquisitorial examination of the parties’ finances.
As a consequence both party’s case lacked focus and rigour. They were easily distracted by things of no moment – frequent flyer points and potted plants, spring to mind. Each party, but particularly the wife, seemed fixated by the siren call of add backs. I have tried to do the best I can but fear that what is important may have not been advanced or lost in an imbroglio of controversy about petty detail.

The Legal Principles Applicable

Part VIII of the Family Law Act is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of the Act.
Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in section 4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to section 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant.
Paragraphs (a); (b); and (c); categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, Paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled, as it required the application of a preferred approach. This approach entailed a four step process, described by the Full Court as follows:
· identification and valuation of the property of the parties;
· identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 79(4) (a) to (c);
· identification and assessment of the various matters in section 79(4)(d) to (g) including to the extent they are relevant, the matters in section 75(2) – the prospective needs phase;
· considerations of justice and equity.[23]
[23] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]
The general applicability of this four step process has been recast, to some extent, in the light of what has been said recently by the High Court in the matter of Stanford v Stanford.[24] In the case, the majority stated that:
“It will be recalled that s 79(2) provides that "[t]he 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". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression "just and equitable" 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.” [25]
[24] Stanford v Stanford [2012] HCA 52
[25] Ibid at [35] – [36]
In Stanton the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of section 79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation. The majority said as follows:
“In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying section 79(4).” [26]
[26] Ibid at [42]
In Bevan the Full Court noted that the above paragraph was likely to encapsulate the vast majority of cases coming before courts, such as this one, namely that the circumstances of the parties concerned, following the end of the marriage between them, made it readily apparent that it was just and equitable to make a property order and therefore it would be open to the court concerned to adopt the multi-stepped process endorsed by cases such as Hickey.

To his great credit, Mr Gilbert did volunteer to provide financial support for Z, without demur, during the many years of the parties’ relationship and subsequent marriage. He did so because he loved Z’s mother and cared for Z herself. He did not differentiate between her and X and Y. It was not a burden to Mr Gilbert to support Z because she was an indistinguishable member of the family.
The parties created a blended family together. This was part of the joint compact between them. In all these circumstances, I do not consider that ordinary notions of justice and equity require Mr Gilbert’s obviously significant contributions made towards Z’s welfare and support need to be given additional significance in these proceedings because of the lack of biological relationship between the two. It would offend the sensibilities of both parties if such a distinction was made.
The question of legal fees is a vexed one. Between them, the parties have incurred legal fees of around $116,000.00, when I have calculated their net pool of tangible assets to be around $315,000.00. Accordingly, approximately 36% of the parties’ current net worth has been consumed in legal fees. This is particularly galling to me given my early admonitions to the parties and the absence of legal representation at the stage it was most needed, namely the final hearing.
In this context, it is hardly surprising that there have been frenzied attempts, by both parties, to find items to add back into the pool so as to dilute the full impact of the financial folly and catastrophe of the case. I cannot help but think that the system has let the parties down. However, be that as it may, the parties must also assume some responsibility for this doleful outcome.
Due to his superior income, the husband has been able to defray more of the burden of his legal fees as he has gone along. His fees have also been significantly less than those of the wife, although ironically he has been represented longer. He has a relatively manageable outstanding debt of around $27,000.00.
The wife’s remaining debt, for legal fees, is $61,000.00. This amount will have to be paid and the only source of the funds can be the monies to be received by the wife from the sale of the (business omitted) studio and the Property C property. In these circumstances, the court must be cautious about the potential for the effect of any lump sum payment, made her favour, to be diminished because it will eaten away by legal costs.
The same considerations apply to the uncertain amount of capital gains tax relating to the sale of the Property B property. No calculation has been made as to what the precise sum will be. The sum will be influenced by such things as the wife’s rate of marginal tax in the year when the tax is assessed; and the value of the property when it was first rented.
Given the uncertainty of the amount in question, I was not prepared to add back the sum, into the asset pool, because of the risk of unfairness and distortion. However, I am also concerned that it would be unjust to approach the issue on the basis of percentages alone, given the smallness of the asset pool and the significant quantum of the tax in comparison, if the wife’s estimate of $46,000.00 is proximate to the amount to be assessed.
In these circumstances, the only realistic and fair approach seems to me to be to quarantine a significant proportion of the proceeds of sale of the Property C property and the (business omitted) studio and order that these proceeds be retained, in some form of interest bearing account, pending the resolution of the capital gains tax issue. Thereafter, after the tax has been assessed and paid from the amount so quarantined, order that any remainder be divided in accordance with the percentages determined to be just and equitable in the proceedings overall.
As I am at pains to point out, the net assets available to be divided between the parties are modest. The wife, for obvious reasons, must retain the (business omitted) equipment, which have no utility for the husband. However, that equipment has a modest value, when compared to the debt attached to it. The wife will retain this debt, which she is likely to struggle to discharge over time.
Accordingly, the wife will leave these proceedings encumbered by a significant level of debt in the form of her business loan and the monies owed for her legal fees. The husband’s level of debt is much more manageable and he also has a superior and more secure level of income.
However, set against this situation, is the fact the wife will retain her interest in the Property D property. This gives her some limited measure of security and provides her with a modest level of income. In my view, this offsets, to some degree, the insecurity arising from her on-going debt burden.

Conclusions on section 75(2) factors

After considering the various factors arising under section 75(2) I have come to the conclusion that a further adjustment, in favour of the wife, is warranted, in respect of how the parties’ actual property is to be divided. In my view, this adjustment should not be a significant one given that there is not a vast disparity in the parties’ prospects. In my view, it should be in the range of about 10%, which should apply to the parties’ non-superannuation assets, excluding the Property D and Property J properties.
With the equal apportionment of superannuation, the parties are currently equally equipped for retirement. However, due to his employment situation, the husband’s position, in this regard, is likely to ameliorate at far quicker rate than that of the wife. In the circumstances of this case I do not consider that any further allowance should be made in the wife’s favour.
The most significant differential however, between the parties, is the husband’s superior income and the security pertaining to it. The wife has significant employment prospects, but they cannot be regarded as being as secure as those of the husband. It is for this reason, in what can only be regarded as a case relating to a modest asset pool, that this allowance is made in the wife’s favour.
Accordingly at the end of the third step, I am of the view that the parties’ pool of property should be divided 60/40% in the wife’s favour and the same approach should be taken in respect of the liability for capital gains tax arising from the sale of the Property B property.

The form of orders

I am satisfied that in all the circumstances of this case, it is just and equitable to make orders pursuant to section 79(2) of the Act. The marriage between the parties has clearly ended and the financial relationship between them must be brought to an end. The next issue is what form those orders should take and where individual items of property should lie.
In Steinbrenner & Steinbrenner,[62] Coleman J observed as follows:
“Given the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case…”
[62] See Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234]
This is the point at which the court must make the metaphorical leap from words to figures or from abstractions to what is concrete. After all, it is all well and good to talk in percentages, so far as orders and outcomes are concerned. But what matters to the parties is what the orders mean to them in dollars and cents and what affect they have on their long term plans and aspirations.
This leap from abstraction to the concrete must be undertaken in terms of what is just and equitable to each of the parties concerned. It will also envisage what is the overall mix of assets, debts and superannuation, given the respective situations of each of the parties concerned. It is a particularly difficult task given the small extent of the property pool.
The husband wishes to retain the (omitted) shares ($2,440.00); he also should be deemed to have retained the proceeds of his tax returns ($29,373.00); the proceeds of sale of the minibike ($2,500.00); and the Yaris motor vehicle claim ($7,600.00). It is appropriate that the (omitted) shares remain divided ($2,000.00).
The wife must retain the (business omitted) equipment ($8,825.00) and the debt related to it (-$41,038.00) together with her (omitted) shares ($2,000.00); leaving her currently in deficit to the tune of -$30,213.00.
Both parties wish to retain the (omitted) boat ($22,000.00) and the Prado motor vehicle ($22,500.00). Why the wife wishes to retain the boat is not clear to me, given that the husband was the instigating force behind its acquisition, of which she disapproved. There is no specific evidence to indicate that she has any particular enthusiasm for boating.
The same is true of the Prado. Currently both parties are leasing other vehicles. At the present time, the wife’s greater need would appear to be to have liquid assets rather than chattels, given her level of debt and desire to purchase some form of alternative accommodation for herself.
In my view, this is the fairest way to approach the disposition of the boat and the Prado. I will accede to the husband’s position that he should retain these items. Accordingly, on my calculations, Mr Gilbert will retain property to the value of $88,413.00; whilst Ms Pailing will be in deficit to the tune of - $30,213.00.
Accordingly, on my calculations the net value of the parties’ non real property is $58,200.00, of which the husband will retain the greater proportion. In order to bring about a 60/40 division of the pool, including apportioning of the debt, relating to the (business omitted) equipment, between the parties in these proportions, it will be necessary for the husband to pay to the wife the additional sum of $65,133.00.
I will order that this sum be paid currently with settlement of the sale of the parties’ remaining real properties, the proceeds of which are also to be divided 60/40 in the wife’s favour.
Assuming the two real properties sell for their assessed value, there will be a sum of approximately $305,000.00 remaining, after payment of the mortgages secured against the property. 40% of this sum is represented by the figure of around $122,000.00; 60% by the figure of around $183,000.00.
I propose quarantining the sum of $50,000.00 from this sum to satisfy the capital gains tax arising from the sale of the Property B property, with any balance remaining to be divided so that the husband receives 40% and the wife receives 60%.
I appreciate that this is a somewhat convoluted exercise. At its end the husband will have assets, but modest cash. I calculate about $40,000.00. He will however be debt free. The wife will have more cash. I calculate around $110,000.00, if she chooses to pay off the debt relating to her (business omitted) equipment, immediately.
The major call on this sum will be the payment of her outstanding legal costs. However she can anticipate having some monies remaining to utilise as a deposit on accommodation for herself and the children. She also has the capital represented by the Property D property, which provides her with a modest income stream.
I will order that there be a split of $150,000.00 out of the husband’s (omitted) superannuation to bring about an approximate equalisation in the parties’ superannuation holdings.
At the conclusion of this number crunching I am left with a doleful feeling. Neither party leaves their long marriage with any significant level of asset backing. At best, each will have some cash which will enable them, possibly, to put together a deposit to buy some form of accommodation.
However, on the bright side, both Mr Gilbert and Ms Pailing are intelligent and resourceful persons, who are in work and thus have both the energy and the facilities to put this financial disaster behind them. They are currently equally well prepared for retirement. All in all, it seems to me to be a reasonably just outcome, in what are unfortunate circumstances.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.

I certify that the preceding three hundred and ninety-four (394) paragraphs are a true copy of the reasons for judgment of Judge Brown

Associate:

Date: 24 September 2015

[28] Watson & Ling [2013] FamCA 57 at [13]