PARADISO and WANGMAYUM

[2016] FCWAM 5

JURISDICTION : MAGISTRATES COURT OF WESTERN AUSTRALIA – 150 TERRACE ROAD

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: PARADISO and WANGMAYUM [2016] FCWAM 5

CORAM: KAESER M

HEARD: 19 AUGUST 2015

DELIVERED : 11 JANUARY 2016

FILE NO/S: PTW 3658 of 2013

BETWEEN: MS PARADISO

Applicant

AND

MR WANGMAYUM
Respondent

Catchwords:

Property Settlement; undefended; discussion of Stanford principles; orders sought by wife just and equitable.

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant: Self represented litigant

Respondent: There was no appearance by the Respondent

Solicitors:

Applicant: Self Represented Litigant

Respondent: Not Represented

Case(s) referred to in judgment(s):

Amero & Croft [2010] FamCAFC 118

Beneke v Beneke (1996) FLC 92-698

Bevan & Bevan [2013] FamCAFC 116

Duff & Duff (1977) FLC 90-217

Ferguson & Ferguson (1978) FLC 90-500

Hickey & Hickey [2003] FamCA 395; (2003) FLC 93-143

Jones v Skinner (1836) 5 LJ Ch 85

Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605

Manolis & Manolis (No 2) [2011] FamCAFC 105

Martin & Newton [2011] FamCAFC 233; (2011) FLC 93-490

McLay & McLay (1996) FLC 92-667

N and N, unreported, 10 June 1992

Norman & Norman [2010] FamCAFC 66

Re S by her Case Guardian R and S by his Case Guardian S [2010] FCWAM 26

Rogers & Rogers (1980) FLC 90-874

Stanford & Stanford [2012] FamCAFC 1; (2012) FLC 93-495

Stanford v Stanford (2012) 247 CLR 108

Teal v Teal [2010] FamCAFC 120

Trustee of the property of Lemnos, A Bankrupt & Lemnos (2009) FLC 93-394

Waters & Jurek (1995) FLC 92-635

Woodcock v Woodcock (1997) FLC 92-739

Woollams & Woollams [2004] FCWA 32; (2004) FLC 93-195

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

Background

1The husband in these proceedings was born [in] 1979 and the wife was born [in] 1983.

2The parties started living together in December 2005. They were married [in] 2008 and separated on 1 October 2011. They therefore cohabited for a period of just under six years. They were divorced on 1 October 2013.

3The wife’s application for property settlement orders proceeded on an undefended basis pursuant to orders made on 18 November 2014. There was, unsurprisingly, no appearance by the respondent husband at the trial. He also did not attend the Conciliation Conference listed for 8 April 2015.

Wife’s evidence and submissions

4The wife relied upon her affidavit filed on 3 October 2014 and her Form 13 financial statement filed the same date. Her Form 1 application set out the orders that were still sought by her at trial. She clarified her position at the hearing in that she no longer sought to amend her final orders and effectively sought orders for:

1.That the husband pay to the wife the sum of $31,158 within 12 months; and

2.That each party retain the motor vehicles and furniture and household contents presently in their possession or control.

5The wife also filed Papers for the Judge which included a detailed chronology and submission in relation to the various factors set out in the Family Law Act 1975.

The husband’s financial circumstances

6The wife is unaware of the husband’s current financial circumstances, but seems to think that he is working. She could however provide no details as to where or in what capacity.

7In those circumstances I made the wife aware of the procedural difficulties that might arise in the event I made an order that the husband was to pay an amount to the wife. There are potential enforcement issues regarding any orders, given her lack of knowledge as to his whereabouts (to effect service) and his ability to actually pay any amount ordered (in relation to the discretion the Court has to enforce orders).

8The husband worked as a [barman] and as a [computer technician] during the course of the parties’ cohabitation and marriage. The wife says that she was never aware of his income throughout the marriage given that they maintained separate bank accounts.

9She accepted that he worked only part time and about 10 hours per week as a computer technician. He was also studying during the course of the marriage and should have completed his studies by the time of the trial [emphasis added].

Principles of law

10Section 79(1) of the Family Law Act 1975 provides that the Court must make such orders as it considers appropriate. Section 79(2) provides that:

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.

11Traditionally that has meant that the Court followed a four-stage process.

12That process was as follows:

(a) identify the value of the assets and liabilities of the parties;

(b) assess the contributions made by each party to the assets;

(c) assess the factors set out in s 79(4)(e) and s 75(2); and

(d) consider whether the proposed orders are just and equitable between the parties.

13The fourth step of this process was seen to be the check required pursuant to s 79(2) to only make an order if it was just and equitable to do so.

14The High Court examined these provisions firstly in Stanford v Stanford (2012) 247 CLR 108.

15The High Court noted at [36-40] that when exercising the property settlement power, three fundamental propositions must not be obscured:

(a) One must first identify, according to common law and equitable principles, the existing legal and equitable interests of the parties in the property [emphasis added];

(b) The Court’s power must be exercised in accordance with legal principles; and

(c) To conclude that making an order is “just and equitable” only because of reference to the various matters set out in s 79(4), without separately considering s 79(2), would be to “conflate the statutory requirements and ignore the principles laid down by the Act”.

16The power under s 79 is to alter a party’s interest in property, which is why the High Court considered it is essential to begin with an examination of what interests in property the parties have. It may or may not be necessary to alter any such interests.

17In the event that the Court decides that s 79 demands that an order be made, then the Court must make such orders as it considers appropriate. It must also take into account the provisions of s 79(4) and s 75(2).

18In this case therefore, one must first look to the existing assets. I have set out my determination of the existing assets (and the parties’ existing interests in them) in the table below.

Wife
Value at separation	Value at trial
Assets
Household items	1,000	1,000
Savings account	8,641	200
Liabilities
Personal loan	33,295	28,145
Credit card	11,000	6,000
Hecs debt	30,000	12,000
Financial resources
TOTAL	-$64,654	‑$44,945

Husband
Value at separation	Value at trial
Assets
Liabilities
Financial resources
TOTAL

19The Court must be very careful, as set out above, not to “conflate the statutory requirements”. This potential confusion was highlighted in Bevan & Bevan [2013] FamCAFC 116 where there was some similarities on the evidence. In Bevan (supra) the husband left the country in 1994 and gave the wife a power of attorney over his assets in Australia. The wife relied on promises by the husband that she could deal with the assets in Australia as she saw fit. The parties were not divorced until 2010 and the husband commenced property settlement proceedings the following year.

20The Full Court set out relevant parts of the Trial Judge’s reasons at [47]:

49.The supplementary and perhaps more important consideration relates to what should flow from my findings in relation to the husband’s representations; that is what are the legal consequences, if any, which arise from those statements.

50.It is clear that whatever the husband has said and thought in the past, he has now changed his mind. He has brought an application for property settlement, as he was entitled to do. Once there is before the Court proceedings for property settlement, they must be determined according to law. The jurisdiction of the Court can only be extinguished by an order of the Court or by agreement between the parties properly documented upon strict terms and conditions.

51.Once proceedings are before the Court they must be determined in accordance with the provisions of Part VII [sic] of the Act. Essentially the entitlement of the parties is to be determined by having regard to the provisions of section 79, including those relating to the contributions of the parties and their current circumstances and future needs and obligations.

52.There is no requirement to consider what representations the parties may have made during the marriage or subsequent to separation. The essential inquiry is not what the parties thought or said from time to time, but what is their entitlement at law.

53.In my view, what the husband said has no direct bearing upon what he is entitled to. There are, however, some potentially significant considerations to emerge. Of a practical significance is the question of the way the Court should view the wife’s conduct in terms of her dealings with the property of the parties in the face of representations and any related questions of what property should now be brought to account and whether there should be any so‑called “add-backs”.

54.It appeared on the husband’s material that he was mounting a case of wastage in relation to the wife’s borrowings and losses on investments and in relation to surplus funds from the [litigation] settlement.

55.It would be a difficult proposition to argue that having, vested in the wife authority to deal with the Australian property as she saw fit, to then retrospectively ask her to bear any adverse consequences flowing from her decisions to do as she was invited to do. In the end result, the husband pressed no such argument.

56.The further possible relevance of the representations brings into focus some submissions made by counsel appearing for the wife, Mr Dowding, Senior Counsel. Mr Dowding argues that the representations made by the husband and what resulted from them, whilst not preventing the husband from bringing his application for property settlement, might justify a determination by the Court that it should not make the orders sought by him.

57.In relation to those submissions, Mr Dowding refers in part to a recent decision of the High Court in Stanford v Stanford (2012) HCA 52, a decision handed down on 15 November 2012. He contends that that case is authority for the proposition that section 79(2) considerations stand on their own and require the Court to determine whether it is, in all the circumstances, just and equitable to make such an order for property settlement. He contends that, in appropriate circumstances, it might be considered as something of a threshold question to be considered prior to the Court embarking upon the more traditional deliberations described earlier by me in the so-called four part process.

58.A review of that case makes it clear that the Court is obliged to properly consider the provisions of section 79(2) in their own right. In my view, in order to properly consider such matters, it is however necessary to also consider what the husband’s entitlement might otherwise have been in order to determine whether it is just and equitable to contemplate making an order which will alter the wife’s interests in the [M town] property in the context of considering the consequences for each of the parties in making or refusing to make such an order.

59.I believe the following extract from the Judgment requires the Court to undertake that exercise ...

21At [53] to [55] the Full Court referred to the passages where it found a Trial Judge led himself into error:

53.Having outlined what he would do, his Honour said (emphasis added):

81. For the purposes of my deliberations in terms of what might be the husband’s entitlement under the provisions of the Act, I therefore remove the $162,000 from the earlier identified property pool. For the purposes of any evaluation process if undertaken, I proceed on the basis that the net value of the remainder of the property of the parties to be brought to account is some $907,000.

54.His Honour then made findings about the contributions made by the parties. In doing so, he said, inter alia:

86. At the same time, however, it must be observed that the wife enjoyed the almost exclusive benefit of the substantial Australian property and investments which remained. In many ways the husband was indeed left to start from scratch in his endeavours without the benefit of the fruits of what the parties had acquired over the previous 22 years.

87. It is also appropriate to note that, notwithstanding the changed circumstances after 1994 the husband did continue to make periodic financial contributions generally and other contributions in the form of improvement to the [M town] property after that time. It is also clear that he has not preserved to himself any separate acquisitions of significance over the period since 1994.

55.The precise language his Honour used in setting out his conclusions in this part of his reasons is important and we have therefore emphasised some words he used in the following three paragraphs:

93. In my view, an adjustment which finds an appropriate balance based on that overriding foundation, but takes account of the subsequent events, would result in an adjustment to the wife’s advantage of 10 per cent and produce a settlement between the parties of 60 per cent to the wife and 40 per cent to the husband.

94. On the basis of such an estate, the extent of the husband’s entitlement so evaluated would be of the order of $363,000 after the stage one and two evaluation process.

95. The third stage would require me to consider whether there needs to be any adjustment between the parties on account of the so-called section 75(2) factors. In my view, there is no case for an adjustment under this head ...

[Emphasis in original.]

22The Full Court’s discussion on the case of Stanford (supra) is illuminating and is set out in full at [57] to [75]:

57.The primary focus of Grounds 1, 3 and 4 is on s 79(2) of the Act, which was carefully analysed in Stanford. Before considering the submissions relating to these grounds, it will be instructive to discuss the High Court’s decision, to the extent it has relevance to this appeal.

58.The facts in Stanford were quite different to those here, and indeed to the factual circumstances in most cases. Nevertheless, as all property settlement applications are considered within the same statutory framework, this rare pronouncement by the ultimate court of appeal warrants careful examination.

59.Prior to Stanford, property applications were commonly dealt with by reference to what the trial Judge called [and to what I have referred to] “a four stage process”. This process was described at [31] and [32] of his Honour’s reasons. The jurisprudential basis for the process was well established – see the line of cases cited in Hickey & Hickey [2003] FamCA 395; (2003) FLC 93-143 at [39].

60.The four stage (or step) process involves:

oidentification and valuation of the property of the parties;

oidentification and evaluation of contributions to the property (including property no longer owned by the parties);

oidentification and assessment of the various matters in s 79(4)(d) to (g) including, to the extent they are relevant, the matters in s 75(2);

oconsideration of matters of justice and equity.

61.Although the four step process has been regularly applied, the Full Court has stressed it is no more than a means to an end, since the statutory obligation is to alter existing interests only if it is just and equitable to do so. Thus, in Norman & Norman[2010] FamCAFC 66 at [60], the Full Court (Finn, May and Murphy JJ) said:

It is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result. For all its usefulness and merit as a “disciplined approach” or a “structured process of reasoning” (per Fogarty, Lindenmayer, McCall JJ, N and N, unreported, 10 June 1992), the “three-step” or “four-step” approach merely illuminates the path to the ultimate result.

62.To like effect, in discussing the four step approach in our joint judgment in Martin & Newton [2011] FamCAFC 233; (2011) FLC 93-490, we said (original emphasis):

305. ... that approach is not legislatively mandated, and as the Full Court [in Hickey] said, is simply the preferred approach. This is because it will be sufficient, in most cases, to have regard to the overall justice and equity of the orders after determination of the asset pool, consideration of contributions and assessment of the relevant s 75(2) matters.

306. But in our view, there is no requirement that the justice and equity of the order, as prescribed by s 79(2), must only be considered at the fourth (and last) stage. In our view, the requirement to make an order that is just and equitable permeates the entire decision making process, and it is not impermissible to consider it at an earlier point if the particular case requires it. We consider this is such a case.

63.See also Waters & Jurek(1995) FLC 92-635 per Fogarty J at 82,375 and 82,378, Beneke v Beneke(1996) FLC 92-698 per Fogarty and Finn JJ at 83,360 and per Kay J at 83,369; McLay & McLay (1996) FLC 92-667; Trustee of the property of Lemnos, A Bankrupt & Lemnos(2009) FLC 93-394 per Coleman J at [93]; Amero & Croft [2010] FamCAFC 118 per Boland J at [77] and Manolis & Manolis (No 2) [2011] FamCAFC 105 per Coleman, May and Ainslie‑Wallace JJ at [65].

64.The Magistrate who gave the primary judgment in Stanford clearly set out and applied the “four step process”: Re S by her Case Guardian R and S by his Case Guardian S [2010] FCWAM 26 at [45]. The Full Court also accepted there was a “settled approach” in property matters: Stanford & Stanford[2012] FamCAFC 1; (2012) FLC 93-495 at [51]. The High Court had before it both judgments, but made no comment about the “four step process” or the “settled approach”.

65.Although the High Court did not disapprove the four step process, we accept it was not approved either. Given the way the matter was resolved, there was no requirement for a pronouncement either way. However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.

66.This obligation was previously described in the High Court as the “overriding requirement”: Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605 at 647 per Dawson J. In the same case at 608, Gibbs CJ aptly described s 79 as conferring on a court “a very wide discretion to make such order as it thinks fit when it is satisfied that it is just and equitable that an order should be made ...” (emphasis added).

67.This understanding of the role of s 79(2) resonates with authority developed in the early years of operation of the Act. Thus, in Rogers & Rogers (1980) FLC 90-874 at 75,539 the Full Court cited with approval this view expressed by Strauss J in Ferguson & Ferguson (1978) FLC 90‑500 at 77,615:

It seems to me, that the main purpose of sec. 79(2) is to ensure that the Court will not alter the property rights of the parties, unless it is satisfied that cogent considerations of justice require it to do so, and that if the Court decides that it is requisite to make any order under the section, the Court must be satisfied that the alterations so ordered, will go no further than the justice of the matter demands.

68.Notwithstanding this clear exposition of the law, again approved in Beneke and Beneke (supra), perusal of the law reports reveals that it has only rarely been argued that a court is precluded by considerations of justice from exercising the discretion conferred by s 79(1). It appears to have been routinely assumed by litigants, certainly in more recent times, that justice requires the court to assess their claims by reference to s 79(4), even if one contends that the outcome of that assessment will be an order leaving existing property interests intact.

69.The reason for this is likely to be found in this passage from Stanford (original emphasis):

42. 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 a 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 ...

70.In our experience, the circumstances described in the paragraph above encapsulate the vast majority of cases. Hence, the reminder in Stanford of the pivotal role of s 79(2) is unlikely to have any impact in most cases, although it will serve as a reminder to trial judges that the precondition to making any order is a finding that it is just and equitable to do so.

71.Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.

72.It follows that judges would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.

73.The High Court in Stanford has laid down three “fundamental propositions” which will provide useful guidance to trial judges in approaching the task under s 79. These were recited above, and could be summarised thus:

1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);

2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;

3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.

74. The first “fundamental proposition”, which requires identification of existing legal and equitable interests in property, is nothing new, since “property” has always been understood as incorporating equitable, as well as legal, interests.

75. Thus, in Duff & Duff(1977) FLC 90-217 at 76,133, the Full Court agreed with Langdale MR in Jones v Skinner (1836) 5 LJ Ch 85 that:

Property is the most comprehensive of all terms which can be used inasmuch as it is indicative and descriptive of every possible interest which the party can have.

23The Full Court then discussed the term “just and equitable” at [84] to [89]:

84. Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).

85. This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation. [Emphasis in original.]

86. We do not consider it helpful, and indeed it is misleading, to describe this separate enquiry as a “threshold” issue. We say this for two reasons. First, as was emphasised in Stanford, the initial enquiry is to determine the existing legal and equitable interests of the parties. Secondly, although s 79(2) is cast in the negative and amounts to a prohibition against making any order unless it is just and equitable to do so, the corollary is that if the court does make an order, such order itself must be just and equitable: Woollams & Woollams Error! Hyperlink reference not valid.; (2004) FLC 93-195 per Thackray J at [53] and Teal v Teal[2010] FamCAFC 120 per Finn, Boland and Dawe JJ at [70]. The just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.

87. It will be seen from this discussion that while the s 79(2) and s 79(4) issues must not be conflated, they are intertwined because the text of the Act links them. This was recognised in Ferguson & Ferguson where Strauss J said that s 79(2) “is directed to both the questions whether an order should be made at all, and what the order should be, if one is made” (supra at 77,615).

88. This understanding of the interplay between ss 79(2) and 79(4) accords with the analysis of Martin Bartfeld QC in his paper entitled “Stanford and Stanford – Lots of Questions – Very Few Answers”. In that paper, which we drew to the attention of counsel, Mr Bartfeld opined that:

49. ... there is scope for taking into account the factors under s 79(4) in the exercise of the [s 79(2)] discretion. This can be accomplished, it is submitted, by treating the contribution factors and the factors under s 75(2) as having two simultaneous characteristics;

a.A discretionary characteristic, which is used to identify those matters which are relevant to enliven the exercise of the discretion. Thus the fact that a party has made substantial contributions, over a long period of time, which are not reflected in their asset holdings but which are reflected in the other party’s assets may found a basis for finding that it is just and equitable for an order to be made; and

b.An evaluative characteristic, which is used to measure the weight or to quantify the effect of a particular contribution.

50. The problem of conflation can easily be overcome by clearly identifying the use to which a factor is being put.

89. In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order. [Emphasis in original.] Ultimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues.

24The Full Court concluded that his Honour had fallen into that error and the following passage is of assistance.

104. The primary thrust of the appeal is that the trial Judge impermissibly conflated the issues arising under s 79(2) and s 79(4). In dealing with that submission, it is important to observe at the outset that his Honour was keenly aware of the requirement not to conflate the issues and attempted to keep them separate.

105. This appears from the following paragraphs of the reasons (emphasis added):

oat [58] where his Honour said that Stanford “makes it clear that the Court is obliged to properly consider the provisions of section 79(2) in their own right”;

oat [77] where his Honour discussed how he would treat an item of property “in the event I am persuaded to make an order for property settlement”;

oat [81] where his Honour found what the value of the assets would be “for the purposes of any evaluation process if undertaken”;

ofrom [93] to [95] where his Honour was at pains to make clear that in assessing the parties’ entitlements by reference to s 79(4), he was doing so only with a view to determining what the result “would be” if the matter was determined by reference to that provision; and

oat [108] where his Honour concluded it was “in all the circumstances just and equitable to proceed to make an order for property settlement ...”

106. Nevertheless, there are parts of the reasons which could be seen as suggesting his Honour did proceed on the basis that some order altering property interests was inevitable, and that the entitlements of the parties were to be calculated solely by reference to s 79(4).

107. This includes his remarks at [50] and [51], which for convenience we repeat:

oIt is clear that whatever the husband has said and thought in the past, he has now changed his mind. He has brought an application for property settlement, as he was entitled to do. Once there is before the Court proceedings for property settlement, they must be determined according to law. The jurisdiction of the Court can only be extinguished by an order of the Court or by agreement between the parties properly documented upon strict terms and conditions.

oOnce proceedings are before the Court they must be determined in accordance with the provisions of Part VII [sic] of the Act. Essentially the entitlement of the parties is to be determined by having regard to the provisions of section 79, including those relating to the contributions of the parties and their current circumstances and future needs and obligations.

108. Although we accept that the court’s jurisdiction can be extinguished only when its power is exhausted by the making of final orders or by a binding financial agreement, the proper exercise of the jurisdiction can include the dismissal of an application because it is not just and equitable to make any order. Furthermore, a decision to dismiss can be made for reasons not referable to s 79(4) since, as the High Court said in Stanford at [40] (original emphasis):

To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.

109. Nevertheless, read alone, [50] and [51] of the reasons do not reveal error, since it is correct to say that the parties’ entitlements are “to be determined by having regard to the provisions of section 79”, because that would include s 79(2).

110. However, it will be remembered his Honour went on to say:

52.There is no requirement to consider what representations the parties may have made during the marriage or subsequent to separation. The essential inquiry is not what the parties thought or said from time to time, but what is their entitlement at law.

53.In my view, what the husband said has no direct bearing upon what he is entitled to ...

111. It is true the trial Judge later accepted that the husband’s representations should have an indirect bearing upon his entitlement – because he considered them when deciding what assets should be taken into account. Nevertheless, we consider his Honour erred in saying there was “no requirement to consider what representations the parties may have made during the marriage or subsequent to separation”. In our view, such representations clearly could be relevant in determining whether it was just and equitable to make an order adjusting existing interests.

112. Furthermore, in saying that “the essential inquiry is not what the parties thought or said from time to time, but what is their entitlement at law”, it seems to us that his Honour considered the parties’ “entitlement at law” was their entitlement measured only by reference to s 79(4).

113. Further evidence of conflation of the two distinct enquiries can also be seen at [58], where his Honour commenced by accurately stating that s 79(2) had to be considered separately, but then went on to explain how he proposed to do that in the present matter. For ease of reference we set out that paragraph again:

58.A review of [Stanford] makes it clear that the Court is obliged to properly consider the provisions of section 79(2) in their own right. In my view, in order to properly consider such matters, it is however necessary to also consider what the husband’s entitlement might otherwise have been in order to determine whether it is just and equitable to contemplate making an order which will alter the wife’s interests in the [M town] property in the context of considering the consequences for each of the parties in making or refusing to make such an order.

114. The fact the trial Judge placed weight on “what the husband’s entitlement might otherwise have been” and the consequences of refusing to make an order conferring that entitlement can be seen at [100] where his Honour said:

To refuse the husband’s application would be to deny him the opportunity to secure an alteration of the interests and a payment of the type indicated ...

115. This is clearly a matter his Honour took into account when, at [105], he gave what might be seen as grudging acceptance of the proposition in Stanford that the court does have a discretion to decline to make any order [emphasis in original].

116. In our view, while his Honour purported to undertake a separate consideration of s 79(2), he did so having already made findings which prevented him from taking account of all relevant factors. In particular, his Honour had found that he was not obliged to consider “representations the parties may have made during the marriage or subsequent to separation”. It is true that, at [100], the trial Judge said that in deciding “any threshold question” he had taken account of the husband’s representations, but that proposition is inconsistent with his earlier unambiguous finding. This inconsistency, at the very least, leads to an inference that insufficient weight was placed on this factor [emphasis in original].

117. We also consider his Honour erred when, at [106], he took into account, against the interests of the wife, the fact that the “informal arrangements” between the parties were not formalised at any time during the 18 years in which they lived largely separate lives. In our view, that was not a material factor in this matter where the wife had disposed of all the substantial assets in which the parties had any joint interest and thereafter acquired property in her name, in relation to which the husband never asserted any equitable interest. At the very least, his Honour gave the absence of formality more weight than it deserved.

118. The trial Judge’s approach also seems to us incompatible with the following remarks made in Stanford concerning the three “fundamental propositions” (footnote omitted, original emphasis):

41 ... if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact ... These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage [emphasis added].

119. In our view, if the three “fundamental propositions” can truly accommodate any consideration the parties gave to how their property interests should be arranged during the continuance of their marriage, they must also accommodate express consideration given to how those interests should be arranged after separation. Indeed, the argument for doing so is stronger, given that any mutual understanding is less likely to have been affected by extraneous influences that would be at work whilst their relationship was intact.

120. This is not to suggest that any understanding between spouses would be conclusive of any later dispute, since an agreement can only be conclusive when the s 90G(1) formalities are satisfied or when a s 90G(1B) declaration is made. Long experience in this jurisdiction teaches that there will be cases in which other factors will be present that would make it just and equitable to make an order inconsistent with a previous understanding, even one reached after separation. But the reasoning in Stanford makes clear that such an understanding would have to be a factor to be taken into account in deciding whether it would be just and equitable to make orders altering existing interests [emphasis added]. This reasoning is entirely consistent with what was said by the Full Court in Woodcock v Woodcock (1997) FLC 92-739 at 83,968 to 83,969.

121. Once it is accepted that a prior agreement or representation is relevant to the justice and equity of the outcome, we consider that the period of time a party has allowed to elapse before making a claim inconsistent with that agreement or representation must also be a material factor. The trial Judge did, at one point, take this into account when he said he was:

satisfied that for a period of at least 16 years the husband has, by his words and by his conduct, induced the wife to believe that he did not wish to make any claim against the property in Australia and that she was entitled to use that property as she saw fit for her benefit and that of the boys.

122. However, we accept the wife’s submission that his Honour appears to have placed weight on the passage of those 16 years only as a shield against an argument the husband ultimately did not run.

123. …

124. The trial Judge properly described this case as “unique”. In our view, the unusual facts demanded consideration of the justice and equity of making any order, quite independent of consideration of what the husband would have received had he pursued his claim earlier and not led the wife to believe he would not pursue a claim at all. With great respect to his Honour, we are not satisfied these matters received the independent consideration they required.

125. For the reasons given, we find there is merit in these grounds.

25Therefore, referring back to this matter, the Court accepts the wife’s evidence that there were agreements to repay the various amounts set out in these reasons. Those agreements were made by the parties during the course of their intact relationship. None of those agreements were supported by documentary evidence as one might expect with related parties. The parties however maintained separate bank accounts and the husband very clearly kept his financial affairs to himself throughout the course of the marriage. This in itself might be a reason why the wife appears to have insisted on providing advances of money to the husband only if he promised to repay those funds when able. It is clear from the above passages that those agreements to advance money and to repay money are relevant factors to take into account in determining whether it is just and equitable to make a property settlement order at all in this case. It is unlikely that the wife could enforce any such agreements outside of the jurisdiction of this Court.

26The wife is in a negative asset position because she has incurred numerous debts, some of which were incurred on behalf of the husband and have not been repaid. She has significant personal loan and credit card debts, together with her own HECS debt. She has reduced those debts since separation by way of regular payments. As can be seen from the table, the wife has no idea as to the husband’s financial circumstances and the Court can therefore make no findings about an essential element of its jurisdiction; that is, to make findings about the husband’s existing interests in property.

27As I mentioned briefly above, a significant part of the wife’s case is that she agreed to lend certain amounts to the husband. In each example, she says that the husband agreed to repay those amounts. All of these loans took place during the period of cohabitation. It does seem unusual that parties who were living together and later married entered a series of commercial transactions where the wife lent money to the husband for various purposes and the husband agreed to repay each amount. I made it clear to the wife during submissions that this Court did not assess such matters on a “commercial basis”, for example by making findings that there was some kind of contract and then deciding whether to enforce. This Court deals, instead, with the vicissitudes of family life and generally people enter relationships with a view to the long term and do so in the context of a loving relationship. Part of that relationship approach is that they help each other out with little expectation (in a commercial sense) of repayment of any such financial assistance. In contract law terms this is referred to as a transaction made out of “natural love and affection” and under the general provisions of contract law is usually unenforceable.

28So the Court must decide not whether there was an agreement that should be enforced but, given the overall history, including the numerous payments made by the wife for the husband’s benefit; given promises to repay and taking into account the overall circumstances of the parties’ marriage, should a property settlement order be made that will have the effect of adjusting parties’ rights in existing property.

29The amounts lent by the wife, taken separately, are relatively inconsequential, but together they add up to a reasonable amount in the circumstances where the wife has very little by way of assets in her name. Taking the question again – is it fair (that is, just and equitable) to make a property settlement order that will reduce the husband’s current asset position or increase the wife’s current asset position given the benefit that the husband has received from the wife’s payments to him (together with other contributions made by the parties).

30In this case, the wife made the following payments all of which the husband promised to repay.

Date	Money lent amount	Reason
March 2006	Not known (the wife gave no evidence of this precise amount)	2006 Semester 1 fees for husband
9 June 2006	800	2006 Semester 2 fees for the husband
26 September 2006	800	Husband’s mother’s business venture in [Country S]
7 February 2007	700	2007 Semester 1 tuition fees for the husband
13 April 2007	1,695	Laptop for husband’s study
6 July 2007	480	2007 Semester 2 tuition fees for the husband
16 July 2007	3,000	Purchase of a motor vehicle for the husband (registered in his name)
14 September 2007	233.30	For husband’s family in [Country S] to help his mother with her business
14 November 2007	289.15	To the husband’s brother to support him while studying
January 2008	449	Part payment to immigration services to enable husband to become an Australian permanent resident
7 January 2008	810	Tickets for flights to [Country S] for the parties to meet the husband’s family
14 August 2008	1,300	2008 Semester 2 tuition fees for the husband
2 March 2009	1,500	2009 Semester 1 tuition fees for the husband
15 July 2009	12,000	2009 Semester 2 tuition fees for the husband and for his permanent residency application (amount obtained by the wife obtaining a loan for that amount)
2 August 2010	12,000	2010 Semester 2 tuition fees for the husband (obtained by the wife by a loan of $15,239.23)
6 January 2011	12,000	2011 Semester 1 tuition fees for the husband (obtained by a third loan obtained by the wife this time for $15,208.27)
25 February 2011	2,900	2011 tuition fees
18 August 2011	3,000	2011 Semester 2 tuition fees for the husband (received by using the wife’s tax refund)
Total amounts	$53,956.45

31In relation to the $12,000 loan referred to above, the parties agreed that from 30 July 2009 the husband would start paying $80 per fortnight to help cover the interest repayments on the loan. Those repayments covered less than half of the monthly interest charges.

32The Court has some confusion in relation to one aspect of the wife’s evidence. She says that on 6 January 2011 she transferred $12,000 into the husband’s account for his 2011 tuition fees. She says at [90] that in February 2011 “the respondent (husband) needed to pay for his Semester 1 full-time 2011 tuition fees.” She then says at [91] that the respondent:

instructed me to increase my credit card limit in order to help fund his tuition fees. On 22 January, my credit card limit was increased from $9,100 to $12,300.

33At [92] she says that on 25 February 2011:

I agreed to charge $2,900 on my credit card to help pay the respondent’s tuition fees.

34What is not explained is why these extra payments were required given that one month earlier on 6 January 2011 she transferred $12,000 into his account for the express purpose of paying those tuition fees. There is no explanation as to what happened to the $12,000 or whether they were actually applied to tuition fees. Perhaps the answer is that the wife did not know. It does, however, seem unusual that she simply agreed to increase her debt again one month after arranging for $12,000 to go to the husband when the further increases were for exactly the same purpose; that is, the 2011 tuition fees. She does not say in her affidavit evidence how much those tuition fees were. Again, perhaps she did not know.

35The wife says that after separation she became stressed as he suspected the husband would stop making the personal loan repayments to the Commonwealth Bank of Australia. She then says that she went to her father for assistance and he provided her with a private loan to pay off the accumulated debt at the Commonwealth Bank of Australia. This included the credit card debt and the personal loan. At that stage the amount was $42,980.52. The wife accepts that after separation the husband continued to make loan repayments ranging between $100 to $275 each fortnight. He did however (as she suspected) stop making loan repayments from 18 October 2012. He then effectively ignored any further request to continue loan repayments at all. He also refused to attend mediation prior to the commencement of these proceedings.

Other contributions made by the parties during the marriage

36Both parties worked during the course of the marriage. There is no evidence of any other substantial contributions to property during that time.

Conclusions regarding whether it is just and equitable to make a property settlement order

37The wife now has existing debts of $44,945. She did not have debts to that extent at the commencement of the cohabitation of the parties. I have not taken into account any amounts she says she used for travel. So the figure I therefore take into account is the abovementioned figure less the amount set out for travel of $810; the revised figure is therefore $53,146.45.

38The wife has clearly provided substantial financial assistance to the husband during the course of their marriage. Through her efforts he has received tuition fees for numerous years of study. He has promised to repay each and every amount and has failed to do so. The wife is now left with significant debts, and in order to alleviate her position she has received a personal loan from her father which has otherwise relieved her of the payment of significant interest amounts by way of the loan to the bank. She is still however left in the invidious position of entering into a relationship with the husband and having no substantial debt to leaving the relationship and having substantial debt to repay. I accept the husband agreed to repay these amounts in the unusual circumstances of this marriage given the level of separation of their financial affairs.

39In all the circumstances therefore, I am satisfied that it is just and equitable to make orders for property settlement. The proposed orders will have the effect of decreasing the wife’s current indebtedness. There is no doubt that debts are property for the purposes of the Family Law Act 1975. The wife has an interest in the debt owed to her father. That debt arose because of the payments that she made to the husband during the course of the marriage. The husband has received a substantial benefit from those amounts that were paid primarily to ensure that he was able to continue his study and become a permanent resident of Australia. The husband promised to repay those amounts and has failed to do so. It is therefore just and equitable to make orders that will ensure that there is some degree of payment by the husband to the wife taking into account not only the payments made and the promises to repay, but also the overall contributions and other factors to take into account. That is where the Court will consider the extent of any order that is made. For the purposes of this current part of these reasons, I am satisfied it is just and equitable to make a property settlement order. The Court must then move on to what order is appropriate given the circumstances and all the factors set out in s 79(2) and s 79(4).

Section 75(2) factors

40The wife is currently receiving Austudy and is a casual relief [dental nurse]. The husband’s financial circumstances are not known. The husband has had the benefit of years of study supported by the wife. The Court infers, given that he should have finished his study by now, that he has a reasonable earning capacity. The parties do not have any children.

Conclusions

41The wife says that contribution up to the date of separation should be assessed as 5% to the husband and 95% to the wife. She also says that contribution from separation to trial should be assessed as 60% to the husband and 40% to the wife.

42In relation to s 75(2) factors, the wife makes no precise calculation of what adjustment, if any, should be made.

43Given the undefended nature of these proceedings and the orders sought by the wife, it is abundantly clear that the orders sought by her are appropriate and just and equitable. They involve the husband repaying $31,158 to her. The debts of the wife at separation which related to loans to the husband for his education and support amounted to $44,295. The husband has received the entire benefit of those advances. The payment sought by the wife equates to 70% of that figure. In my view, it is not necessary to make findings regarding overall contributions and any adjustment by way of s 75(2) factors. An order that the husband pay the amount sought to the wife is just and equitable in all the circumstances.

44The Form 1 application seeks an order that the payment by the husband be made within 12 months. The application was filed 3 October 2014. I intend to allow a much shorter period of time for the husband to arrange the necessary finance and make the payment, given the time these proceedings have taken.

Orders

1.Within a period of 3 months from the date of service of these orders upon the husband, the husband pay to the wife the amount of $31,158.

2.Each party otherwise retain the motor vehicles, furniture and household contents presently in their possession or control.

3.The parties each otherwise indemnify the other in relation to any debts in their respective names.

4.The proceedings otherwise be dismissed.

I certify that the preceding [44] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Secretary
Delivered 11 January 2016