Parsons and Prendergast

[2008] FamCA 259

FAMILY COURT OF AUSTRALIA

PARSONS & PRENDERGAST (NO. 3) [2008] FamCA 259

FAMILY LAW – PROPERTY – Property proceedings were conducted in tandem with welfare proceedings and following the completion of the welfare proceedings were reserved in circumstances where the husband refused to attend – Following separation husband failed/refused to make payments under mortgage over matrimonial home and two investment properties – Issues of wanton wastage and domestic violence – Orders made including husband’s responsibility for all professional fees incurred by mortgagee seeking possession and sale of the investment properties

Family Law Act 1975 (Cth)
Family Law Rules 2004

Waters v Jurek (1995) FLC 92-635 at p. 82,376
Hickey v Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at par 39
Antmann v Antmann (1980) FLC 90-908
Kowaliw v Kowaliw (1981) FLC 91-092
SMB v MFB (2006) FamCA 46

Kennon v Kennon (1997) FLC 92-757 at 84,294

APPLICANT: Ms Parsons

RESPONDENT: Mr Prendergast

FILE NUMBER: DGF 764 of 2004

DATE DELIVERED: 17 April 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: The Honourable Justice Guest

HEARING DATE: 23 January, 26 March 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Eidelson

SOLICITOR FOR THE APPLICANT: Berry Family Law

COUNSEL FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE RESPONDENT: No appearance

COUNSEL FOR THE MORTGAGEE: Mr Manly

SOLICITOR FOR THE MORTGAGEE: Russell Kennedy

Orders

1. That the husband do pay and/or cause to be paid to the wife by way of settlement of property the sum of $144,560 (“the said sum”) AND IT IS DIRECTED that in part settlement of the said sum, Messrs Russell Kennedy as solicitors for Perpetual Limited do forthwith pay to the wife’s solicitors all monies currently held in their trust account in the sum of $118,315.09. 

2. That the husband be and remain responsible to the exclusion of the wife for all costs that have been incurred and may be reasonably assessed in favour of Perpetual Limited arising from necessary enforcement costs and the costs of mortgagee sales in respect of the properties known as and situate at H, N and E.

3. That in the event the husband recovers by way of court order any net sum payable to him following any order, review, taxation or assessment brought by him arising from the process referred to in paragraph 2 hereof, then any net entitlement ordered to be paid in his favour by Perpetual Limited and/or Members Equity Bank Pty Ltd be held in trust by Messrs Russell Kennedy and paid by them for the benefit of the wife in such sum as may be necessary to meet any balance pursuant to paragraph 1 hereof outstanding in favour of the wife.

4. That the husband do forthwith pay to the wife the sum of $10,500 by way of costs that remains outstanding pursuant to orders made by this court on 15 April 2005, 26 June 2005 and by the Full Court of the Family Court of Australia on 2 February 2006.

5. That all applications be otherwise dismissed AND THAT the proceedings be removed from the Active Pending Cases List.

6. That the wife’s costs of and incidental to the proceedings be otherwise reserved.

7. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:

Ms Parsons

Applicant

And

Mr Prendergast

Respondent

REASONS FOR JUDGMENT

Introduction

1. The property proceedings before me are comprised by paragraphs 1 to 6 (inclusive) of the wife’s Form 1A Amended Response filed on 15 January 2007 and paragraphs 1 to 12 (albeit somewhat defective in form) of the husband’s Form 1A Response filed on 5 March 2007.  The passage of time in the conduct of the proceedings and for the reasons set out in a number of my judgments delivered in the course of the hearing, in particular that of 25 September 2007, have overtaken the original position put by each of the parties with the result that the asset and liability base has substantially changed.

2. The hearing commenced before me on 26 March 2007 and at the time principally centred on welfare issues concerning the parties’ daughter T who was born in February 2000.  She is now eight years of age.  It was the subject of consensus between Mr Eidelson, counsel for the wife, Mr Brewer of counsel for the Independent Children’s Lawyer and the husband who appeared in person, that the welfare proceedings be disposed of as an issue of prime importance, albeit that property issues were canvassed in the evidence of both the husband and the wife.

3. In the result, sufficient evidence was before the Court by 21 September 2007 to enable me to deliver my substantive reserved judgment in the welfare proceedings on 19 October 2007.  The orders made are currently subject to appeal.  Early in the proceedings I dealt with an application brought by Mr Eidelson to strike out certain parts of the husband’s affidavit filed in the property proceedings on 5 March 2007 and made orders on 27 March 2007.  An ex tempore judgment delivered that day provides the reasons for the orders made.

4. On 23 January 2008 I ordered that the part-heard property proceedings between the parties be fixed for final hearing and determination on a date to be advised in March 2008.  Albeit that the husband was given notice of the hearing that day he did not appear and my reasons for making the orders are set out in my ex tempore judgment placed on the court file.  I was informed by Mr Byrne, solicitor for the wife, of the status of the three pieces of real estate relevant to the proceedings and was at the time satisfied that there would be a defined position as to the current market value and sale proceeds of those properties together with a statement of debt owing to the mortgagee pursuant to the terms of the mortgage loans. 

5. Furthermore, given that I am shortly to retire from the Court and being part-heard, it was fundamental that I finalise that remaining aspect of the proceedings that commenced before me on 26 March 2007.  On 20 February 2008 all parties were given notice in writing that the hearing would resume on 26 March 2008, which by happenstance was twelve months to the day that the proceedings commenced before me in 2007. 

6. Mr Eidelson continues to appear this day for the wife and the husband, despite being given notice of the hearing has failed to attend, albeit he has forwarded a document to court for my consideration.  On 27 March 2007 and 21 September 2007 Mr Manly of counsel, with leave, appeared on behalf of MEMBERS EQUITY BANK PTY LTD, the mortgage manager of PERPETUAL LIMITED in circumstances described by me in my ex tempore judgment delivered on 25 September 2007 and which I incorporate by way of background in this judgment. 

7. On 25 March 2008, Messrs Russell Kennedy, Solicitors for Perpetual Limited wrote to my Associate providing certain financial information arising from the sale of two investment properties situate at N (“the [N] property”), E (“the [E] property”) and the former matrimonial home at H (“the [H] property”).  In the course of that letter, the author enquired whether any appearance was required by them at the hearing of the property proceedings on 26 and 27 March 2008 (see Exhibit “RK2”).  They were advised that, in the circumstances, it was appropriate to do so.  Accordingly, Mr Manly sought leave to appear on 26 March 2008 and which leave was granted.

background

1. Throughout the proceedings thusfar I have delivered, in addition to the substantive judgment in the welfare proceedings handed down on 17 October 2007, a further 11 judgments.  It will thus be convenient if I incorporate into this judgment those relevant matters of background that I dealt with on 17 October 2007, which are as follows:

   “10.The husband was born in Iraq [in] 1963 and is 43 years of age.  He emigrated to Australia in 1992 and subsequently obtained Australian citizenship.  He clearly worked hard and graduated with a Bachelor of Arts in 1998 together with a Graduate Diploma of Education from […] University.  He is a qualified teacher.  The wife was born in […] in Iraq [in] 1970 and is now 37 years of age. 

   11.The parties first met in Jordan in early 1998.  The husband was visiting Jordan, a country to which the wife and her family had fled as refugees from the turmoil of Iraq.  Following a very short courtship, they married [in] 1998 and after a period of approximately ten days, the husband returned to Australia.  The wife subsequently travelled to Australia in July 1998, having obtained the necessary visa, and obtained Australian citizenship in February 2003.

   12.The parties first lived in Sydney for approximately twelve months then relocated to Melbourne in 1999.  Later, in 2002 they purchased the former matrimonial home at [H] in which the husband remained following their separation in February 2003.  There is one child of their union, namely [T] who was born on […] February 2000.  She is 7 years of age.” 

   [later]

   “16.The husband commenced proceedings in July 2004 seeking various orders in relation to property and child welfare issues.  They were opposed by the wife.  Thereafter, with the passage of time the parties were locked in bitter litigation with the husband, for example, twice instituting proceedings for contravention which were dismissed.  The current orders of the court governing the welfare arrangements for [T] were made by Watt J on 21 January 2005.  It was these orders that I varied however on 21 January 2007.”

proposed orders

1. By her Amended Response filed on 15 January 2007 the wife, in summary, sought the sale of the three properties and that after payment of costs and fees associated with the sale, discharge of the mortgages in favour of Perpetual Limited, the balance then be paid to her.  It was her further claim that the husband be responsible for and indemnify her against any legal costs and the like in favour of Messrs Russell Kennedy, as solicitors for the mortgagee. 

2. The husband’s proposed order set out in his Response filed on 5 March 2007 was somewhat convoluted and in my view, plainly out of touch with reality.  He sought to retain the H property in which the child would live with him and that the wife live nearby in the E property which would remain in his name and that the wife pay rent.  He proposed that the wife be paid 20 per cent of the equity in the properties which he assessed at between $100,000 to $80,000, pointing out however that she would receive (on his assessment) $15,000 to $10,000 if “the banks succeeds in their claims”.

3. Given the long labyrinthine contents of the husband’s document filed on 26 March 2008, it is difficult to clearly define his current proposal.  However, doing the best I can, he appears to be maintaining a claim to 80 per cent of the parties’ equity in the assets but makes no submission as to responsibility for costs incurred by Perpetual Limited.  One can readily assume that he would not see himself responsible for them.

4. The wife’s position changed from that argued by Mr Eidelson on 26 March 2008 to that proposed in his written submissions dated 1 April 2008.  In his oral submissions, Mr Eidelson argued that the pool of assets should be assessed before deduction of legal costs incurred by Perpetual Limited, submitting that whilst the mortgagee had a claim for relief against the husband, that did not mean it could unilaterally abrogate funds in its favour to the detriment of the wife’s entitlement pursuant to the provisions of the Family Law Act (1975) (as amended).

5. Whilst not defined at that time in quantum, I had the clear impression that the wife sought a sum greater than the amount held in trust by the solicitors for Perpetual Limited following the sale of the three properties and payment of its costs.  In the event, I made an order for submissions in writing, particularly given that Mr Eidelson informed me that the wife’s costs of both the welfare and property proceedings, but not including those of 26 March 2008, amounted to $134,500. 

6. In argument on 26 March 2008, this was strongly resisted by Mr Manly who submitted that it would be both unfair and unjust for me to make an order that had the nett effect of prejudicing Perpetual Limited.  Put simply, he sought to maintain the pool of assets available for distribution be assessed after deduction of costs in its favour of $92,186.99 and which, he argued were continuing to accumulate.  The firm of Messrs Russell Kennedy held in trust, he informed me, $118,315.09 having accounted for costs of its client. 

7. I propose to amplify this situation later in the course of my judgment given the final position of the wife argued by Mr Eidelson in his written submissions.

application of the law and findings

1. In considering this matter, I have a broad discretion to make such orders as I consider appropriate, tempered however by the requirement that such orders be just and equitable in the circumstances of the case. In undertaking this task I am required to take into account those matters set out in s 79 of the Family Law Act 1975 (as amended) (“the Act”). The legislation provides me with discretionary power to adjust the property interests of the husband and the wife in a manner that will do justice and equity between them. The discretion that I have is an extensive one.

2. I am not obliged to adopt an excessively mathematical approach in considering those contributions pursuant to s 9(4) of the Act, but rather a broad estimate of the financial contributions and otherwise those matters set out in s 75(2) of the Act.  That is, my task is a matter of authoritative and informed judgment, not of exact computation.  Needless to say, in general considerations of justice and equity as the statute requires, weighing matters where some may be calculated with apparent precision while others cannot be more than a practical assessment, the search for true mathematical precision is a misleading illusion.

3. An established line of authority in this court has made it clear that there are three steps that I must undertake in the determination of the property entitlements of each of the husband and the wife.

4. Firstly, I am required to identify the property of the parties.  This, in the result does not present a difficult task at all given that through the court process, both in this court and proceedings in the Supreme Court of Victoria, each of the three properties has been sold and the mortgage in favour of Perpetual Limited discharged thus revealing the nett equity achieved.  The end result also took into account real estate agents fees and commissions on sale and all outstanding municipal rates, water rates and body corporate fees.  After accounting for professional fees in favour of Messrs Russell Kennedy paid from the nett proceeds of sale and amounting to $92,186.99 (as advised by Mr Manly in argument) there remains in trust and held by Messrs Russell Kennedy a nett amount of $118,315.09. 

5. The remaining assets include, as argued by Mr Eidelson, rental from the two investment properties received by the husband of $38,136, that received by and paid to the wife pursuant to my orders of 3 January 2007 and 25 September 2007 in the sum of $13,970 and the husband’s superannuation which has been assessed at $2,000 and in respect of which no detailed evidence was provided.

6. Thus, I find the assets of the parties for my consideration are as follows:
   
   

   ·    Monies held in trust by Messrs Russell Kennedy  118,315.09

   ·    The husband’s superannuation  2,000.00

   ·    Rental monies received by the husband from the
   two investment properties  38,136.00

   ·    Rental monies received by the wife from the two
   investment properties  13,970.00

   ·    Monies withdrawn by Messrs Russell Kennedy
   by way of their professional fees due from
   Perpetual Limited (subject to dispute)  92,186.99

   $264,608.08

7. Secondly, I am obliged to make an evaluation of what contributions have been made by the parties including direct and indirect contributions of a financial character and non-financial character and contributions to the welfare of the family including contributions as homemaker and parent within s 79(4)(a) to (c) of the Act, inclusive.

8. In undertaking this aspect of the process, I make it clear that I rely upon the affidavits of the wife filed 15 January 2007, 20 March 2008 and her evidence before me in the proceedings.  I also rely upon those admissible paragraphs of the husband’s affidavit filed 5 March 2007, 26 March 2008 and his oral evidence in court.  It is not necessary for me in the whole of the circumstances of these proceedings to comprehensively recite that evidence save to record in summary form the general assertions made by each of them and my consequent findings.

9. In the child welfare proceedings, I made a number of findings as to credit worthiness.  It was left open to me to consider afresh the evidence of each of the parties in the property proceedings.  However, as I have earlier recorded, the husband elected not to attend this hearing and as matters presently stand has left unassailed the case put on behalf of the wife save for some unsupported assertions in his affidavit of 26 March 2008.  The wife was present in court and available for cross examination.  It is in those circumstances that where there is conflict on a material issue, I propose to accept the evidence of the wife.

10. In her first affidavit the wife detailed matters of background together with contributions and other events during the marriage.  I accept her evidence that, at the husband’s request and for the reasons stated the parties travelled to Melbourne from Sydney, the husband having worked for approximately 12 months.  Whilst in Melbourne, the wife secured employment and worked, notwithstanding her pregnancy.  The husband did not, albeit, following the birth of the child he gained some employment as a teacher although, as the wife deposed, it was somewhat sporadic.

11. The wife deposed to the purchase of their first property at E in about 2001 together with its sale and her recollection as to the purchase of the three relevant properties to which I have already referred.  The husband retained control of all family finances.  The wife was the principal carer for the child which she says, was her sole domain to the exclusion of the husband.  I accept that evidence.  Following abuse, the wife deposed that she left the former matrimonial home in February 2003, such being the fact.

12. The wife detailed the violence and abuse perpetrated by the husband upon her following their move to Australia from Jordan.  Considerable attention was given to this issue in the child welfare proceedings.  The evidence given enables me to be quite satisfied that the husband did physically abuse his wife.  He was violent towards her.  I accept the wife’s evidence on this issue.  On one occasion, the violence of the husband was so ferocious it required police intervention with the wife seeking safety in a women’s refuge.  The wife deposed that she returned home under pressure but notwithstanding, the physical and psychological abuse recommenced, yet again.  I accept her evidence that she received a government grant to assist persons suffering domestic violence to relocate.

13. The evidence of the wife in the child welfare proceedings on the issue of the husband’s violent and abusive conduct towards her was most compelling and in the circumstances, I am satisfied that her task as a homemaker and parent was made that much more difficult perforce the husband’s bullying and dictatorial regime. 

14. In her affidavit filed on 15 January 2007 the wife detailed that the husband, along with members of his family had resided in the H property.  She said the husband received board from at least one member of his family which had not been accounted to her in the course of the proceedings.  The husband’s brother lived in the home and, as I recall the evidence, the husband said he paid rent when he was in a position to do so.

1. The wife deposed that despite many requests the husband refused to provide financial arrangements concerning the two investment properties nor account to her for rental received therefrom.  I accept that evidence.  She deposed that her solicitors had sought financial documentation from the husband which was not forthcoming.  I accept that evidence too.  It was only through the process of subpoenae to various financial institutions was the wife able to obtain any meaningful information regarding the husband’s financial affairs.  It is plain to me that the husband has been quite unforthcoming in disclosure of relevant financial material. 

2. The wife deposed that following an inspection of the relevant material obtained under subpoena, it was demonstrated that the husband had made no contribution to any of the mortgages since approximately December 2004/January 2005.  In the result, this transpired to be a fact.  The husband did not provide any relevant and helpful documentation or bank statements demonstrating his dealings in terms of income received from his employment or from rental of the properties.  She further deposed that since the commencement of correspondence between solicitors, the husband consistently failed to provide detailed information regarding his financial affairs.  I accept the wife’s evidence in this regard. 

3. The wife deposed that since separation the husband had made no voluntary payments of child support whatsoever, although he had been employed since around June 2006.  She said the husband’s only payment of child support had been the compulsory payments as deducted from his Centrelink benefits during his period of unemployment.  It is plain to me that the husband has, save for a period of approximately six months in 2006, failed to seek employment of an appropriate type in which to support both himself and his family.  That was his election.  In the course of his evidence, the husband put that he did not work as he had to concentrate on the court proceedings.  The wife deposed on this issue that the husband had said to her on a number of occasions that he was willing to remain unemployed in order to avoid paying child support.  I accept that evidence.

4. The wife further deposed as to those relevant matters pursuant to s 75(2) of the Act detailing her needs for the future.  She resides in rented accommodation with the child and receives rental assistance and Centrelink benefits from the Government.  Her only work since living in Australia has been in a labouring capacity, despite her Iraqi qualifications.  The wife deposed, which evidence I accept, that she intends to remain as a full time carer for the child and will attempt to obtain some part-time employment whilst the child is at school.  In contrast, the husband has a teaching degree and an extensive history of past employment in Australia.  As matters presently stand, the husband is currently the subject of costs orders in favour of the wife in the amount of $10,500. 

5. In her affidavit filed 20 March 2008 the wife addressed issues consequent upon my order of 25 September 2007 that the husband vacate the H property.  Albeit recognising the content as hearsay (par 6), the wife sought to rely upon material which was plainly inadmissible.  In his response, the husband deposed that the allegation was “false”.  In the circumstances, I do not pay any regard to this assertion by the wife.

6. The wife otherwise dealt with circumstances concerning the husband’s departure from the former matrimonial home and which, in the result, was finally effected but outside the time frame ordered by me.  Be that as it may, the wife deposed that the property was left in “… a disgraceful condition, being damaged, neglected and filthy”.  The works required to remedy the damage were detailed in correspondence from Barry Plant, Real Estate Agent, dated 4 November 2007 namely:

   “Work Required:

   ·    New carpets throughout the entire home.

   ·    New curtains throughout the entire home.

   ·    Painting to be (sic) property’s interior and exterior.

   ·    Bathroom requires renovating including replacement of the shower screens, all tiles as well as vanity unit.

   ·    Kitchen requires major repair in fact the kitchen and all appliances need to be replaced.

   ·    There are many doors either broken or off hinges and they will need to be repaired and/or replaced.

   ·    Fences; most fences along with gates need replacing.

   ·    Rubbish removal.”

   The wife caused to be annexed photographs evidencing some aspects of the condition of the property.

7. The husband’s response filed 26 March 2008 reiterates his grievances concerning the welfare issue, casts blameworthiness on others, asserts a conflict of interest insofar as the role of the real estate agent is concerned and denies that asserted by the wife.  He dwells upon matters of history and appears to have missed the point arising from the observation of the real estate agent.  The husband deposed:

   “It is evidence from the letter of the real estate that work required to sell it in a better price, and that shows clearly and consistent to the father statement in the welfare witness box that the property is maintained clean, however it is old, hence the carpets, curtains, painting etc., needs replacement, the fences that is north and west side only two years old, and replaced by the father contribution, and hot water system heater also replaced.

   It confirms that I had sacrificed to live in the old property, when I was offering [the wife] onr of the other two properties of which they are in much newer and in better states, while [the wife] refused to reserve the loss of the properties, by refusing to settle and refusing to life caveat so I can refinance, after an advice by her solicitors, contributing to further negative financial and welfare effect on all the child, mother and father.

   The photo copies of the premises, has many pages of which are basically blank, other photos showing simply the garden with some branches to be collected, as did not have time to do following constant threats to leave in 21 days, and had the rest of photos of normal old house, nevertheless clean.  The only picture that the door needs replacement is the back door of the carport, after being broken.  No picture is taken too many aspects of the good view of the house, examples main door, and main carport door.” 

   (The extract is recorded precisely as set out by the husband).

8. I accept the evidence of the wife that the husband permitted the house to be run down and, in effect, leave it in a derelict condition.  In my view, he had no pride in occupation, no sense of cleanliness but appears to be driven by a desire to make life as difficult as possible for the wife.  In so doing, he permitted serious wastage to take place. 

9. In her second affidavit, the wife otherwise dealt with matters relating to the sale of the properties and which has now been made clear through Mr Manly, on behalf of Perpetual Limited.  The wife also deposed that the husband has continued to decline to make any meaningful payments of child support and has made no payment towards any of the costs orders made against him. 

10. In his affidavit filed 5 March 2007 the husband detailed matters of background, recording for example that in the financial year ended 30 June 1998 he earned a taxable income of $8,098.  No other tax return or associated document has been provided by him.  I accept that prior to the marriage he received a capital sum in the circumstances described by him of which $41,111.08 was deposited into a bank account on 6 January 1998.  I accept that he had substantial funds prior to marriage, some of which were expended by him on his trip overseas to Jordan and otherwise following marriage, including his support as he was not undertaking regular and remunerative employment.  What concerns me is that the husband has failed to provide any updated bank statement or financial document recording his alleged savings from early in the marriage and onwards.

11. Upon the husband’s return to Australia he finalised his tertiary degree thus establishing for himself a capacity to earn an adequate income, albeit he now refuses and/or fails to take up the advantages that his qualifications offer to him. 

12. I do not accept his assertion that the wife did not contribute financially towards the marriage.  I am satisfied that there was considerable tension in the home resulting from the husband’s dictatorial conduct and abusive attitude.  The husband otherwise detailed matters concerning the acquisition of the first matrimonial home, and the three properties to which I have earlier referred.  Insofar as the purchase price is concerned and the security arrangements, I act upon the compelling evidence advanced by Mr Manly on behalf of Perpetual Limited and that obtained from the files subpoenaed by the wife’s solicitors.  The husband conceded, in any event that he maintained payments on the three properties until January 2005. 

13. In the course of his affidavit, the husband had this to say:

    “64.I was forced to defend the properties from deteriation (sic) if they are taken over by the bank, and I had to protect the child interest from abuse in court proceeding, and I had to pay for some of the essential bills to maintain the properties, from insurance to many other bills, and I had to still support my daughter in essential expenses, that was covered by the rental money, that have used the majority of the rental income, and was forced to use the rental money.  Further itemised bills will provide to the court.”

14. I do not accept the husband’s broad statements therein deposed which are in my view, without the provision of detailed financial documents, broad unsubstantiated assertions and in part quite misleading having regard to the evidence I heard in court and findings made by me in various of my judgments thusfar in the proceedings.  In his affidavit of 26 March 2008 the husband too repeats matters that are plainly incorrect and of a broad and unconvincing kind.  The assertions made by him are argumentative and matters of opinion. 

15. Thirdly, I am obliged to consider the matters, so far as they are relevant, referred to in s 75(2) of the Act, picked up by the terms of s 79(4)(e), namely the circumstances which relate to the present and future needs of the parties and to their means, resources and earning capacity, both actual and potential.

16. The provisions of s 75(2) of the Act do not apply automatically but only where and to the extent to which they are relevant. I am mindful of the fact that the various paragraphs of that section of the Act come into play and are to be given appropriate weight when it is considered that they are relevant to making a property order between the parties which is both just and equitable. The same test applies to other paragraphs of s 79(4) of the Act. As the Full Court said in Waters v Jurek (1995) FLC 92-635 at p. 82,376:

    “In the majority of property cases little difficulty is encountered in the contribution step and increasingly, in the general run of cases, the conclusion is likely to be one of equality or thereabouts.  There is no doubt that the centre of gravity in the determination of property cases has, especially in more recent times, moved to the evaluation of the s.75(2) factors and the significance of that has been heightened because of recent Full Court decisions which have emphasised those provisions and indicated that they should be given real, rather than token, weight.” 

    (per Fogarty J)

17. When considering the various paragraphs of s 75(2) I must be satisfied that the particular paragraphs of that sub-section are relevant in arriving at a just and equitable result.  This is a subjective exercise on my part.

18. When considering this section I am mindful of the present financial position of each of the parties.  Given the husband’s attitude to the litigation, I have no updated financial information and note the complaint of the wife that he failed in any event to make full and frank disclosure of documentation sought.  It appears to me that, more likely than not, he is without financial substance and as matters presently stand, is unemployed. 

19. All of that is a product of his own inaction for there was no evidence that he suffered detriment to his health such as to affect his employability.  As I will shortly explain, I propose to direct that the husband be responsible, for such is the fact as matters presently stand, for the legal fees of Messrs Russell Kennedy in the sum of $92,186.99 referred to in this judgment.

20. The two significant factors that weigh in favour of the wife pursuant to any prospective adjustments in her favour are firstly the comparative earning differential between the husband and herself and secondly, the fact that the wife is charged with the onerous ongoing responsibility for the care, nurture and support of the parties’ child.  The evidence satisfies me that the husband is unlikely to undertake appropriate employment and thus contribute to the financial support of his daughter in any or any meaningful way.  His past conduct evidences this finding for he sees the wife as unmeritorious, mentally unstable and utterly inadequate to be the primary carer of the child and a danger to her welfare.  He has an unwavering encapsulated ideation on this issue. 

CONCLUSION

1. For reasons best known to the husband, he has elected not to attend the further hearing of the proceedings. That is his choice and his alone. Earlier in this judgment I referred to the fact that he forwarded by facsimile transmission a document which he described as an affidavit. A consideration of this document reveals that it too offends Rule 15(13) of the Family Law Rules 2004. However, given the husband’s election not to further participate further in the proceedings and having regard to the provisions of s 97(3) of the Act I propose to accept this document in part constituting his final submissions and otherwise in answer to the wife’s further affidavit filed 20 March 2008. There was no objection to this course by either Mr Eidelson nor Mr Manly.

2. I have earlier in this judgment set out the preferred approach of the court in property proceedings such as this. It is now well established that the Full Court has set guidelines as to the approach to be adopted by a trial judge in determining an application under s 79 of the Act. Those guidelines have been re-stated in numerous cases many of which are discussed by the Full Court in Hickey v Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at par 39, where the Full Court re-stated them in the following terms:

   “39.The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s. 79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the nett value of the property for the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s. 79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step 2. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in the circumstances of the case …”

3. The difficulties in this case were compounded by the fact that so far as the wife’s evidence is concerned and which was not challenged by the husband, it was the husband who rigidly controlled all aspects of the family finances without consultation or disclosure to her. Thus, to a certain degree, my task has been a matter of reconstruction and I do not pretend by any measure to have arrived at a conclusion that accords mathematical precision. Nor am I obliged to do so. However, and I make this clear, I have sufficient material before me to arrive at a determination that, in the exercise of my discretion is both just and equitable in the discrete circumstances I have before me and in accordance with the provisions of s 79(2) of the Act.

4. It appears on the evidence before me that it is appropriate to find that at the time of the marriage and return of the parties to reside in Sydney, the husband did have a capital base as evidenced by annexed bank statements to his trial affidavit.  However, it is noteworthy that the last bank statement representing his savings and evidence before the court is dated in February 1998.  Thereafter, no other documents have been tendered or relied upon. 

5. I then turn to the wife’s evidence and her affidavit wherein she deposed that after the parties commenced residence in Sydney the husband worked for approximately one year in a teaching position.  She said that after their move to Melbourne in 1999 she secured employment as a labourer factory notwithstanding that she was pregnant in order to provide the family with some income, aside from government benefits.  The wife deposed that the husband did not secure employment of any kind in 1999 and that “eventually” he did obtain employment following the birth of T at various educational institutions as a teacher.  I accept the wife’s evidence that it was sporadic, but gradually became more consistent with time.  The husband has never challenged the wife’s evidence in court when he had the opportunity to do so by way of cross examination. 

6. In his affidavit filed 5 March 2007 the husband annexed a copy of a tax assessment for the financial year ended 30 June 1998.  He relied upon no other such document.  Otherwise, the husband deposed that after the parties arrived back in Australia he studied to finalise his tertiary qualifications and claimed that he also worked in a customer service job, cleaning job and other labouring jobs.  He deposed that he resigned from his first teaching job in 1999 after having worked as a teacher for some six months. 

7. The wife was present in court on the return date of the property proceedings and was available for cross examination.  The husband failed to attend and contest any evidence of the wife.  He did not put himself in a position thereby to be tested on any other matters that remained outstanding from his evidence given in the welfare proceedings, some of which was directed towards the property matters.  In the circumstances, I accept the evidence of the wife.  This finding, particularly given his non-attendance to contest the property proceedings is underpinned by my findings as to credibility in the welfare proceedings.

8. I accept that the wife worked up to and including her pregnancy.  I am satisfied that she worked very hard indeed and contributed her earnings to the domestic purse.  In the absence of any satisfactory evidence from the husband to the contrary, I accept the wife’s evidence as to the husband’s work ethic (or lack thereof) and do so however without detracting from the fact that he studied hard in gaining his tertiary qualifications so as to enhance his income earning capacity.  He has the capacity, were he of the mind to apply himself, to command a substantial income. 

9. The parties travelled from Sydney to Melbourne in 1999 and purchased their first matrimonial home which, as I understand it, was situate at M for $130,000, which was subject to a mortgage.  This property was registered solely in the husband’s name which is consistent with his attitude that he, and he alone, controlled the family finances. 

10. I accept the wife’s evidence in the circumstances in which this trial has now been conducted, that the husband maintained sole and absolute control of all financial matters.  I accept her evidence that she was not permitted to have any input whatsoever into any decision regarding financial arrangements, their living arrangements or other important decisions during the marriage.  I accept her evidence that the husband would not provide her with any information regarding the various mortgages in relation to the three properties that were purchased by them, the repayment of those mortgages or their financial circumstances with respect to bank accounts and liabilities or any like details. 

1. Although the husband deposed to the fact that the wife had an account in her name, it is plain to me that it was also a repository for the receipt of a government family allowance (Annexure 7 to husband’s affidavit filed 5 March 2007) and from which withdrawals were made in respect of which the husband led no evidence.  Further, he only annexed two of the five pages.  Given the wife’s unchallenged evidence that the husband directed the family finances, there is no evidence one way or the other if the withdrawals as shown in any event were at his direction, let alone their purpose.  There are no bank statements produced by the husband to evidence the mortgage taken out on their first matrimonial home, which surprises me.

2. What is known is that the first property was sold in 2001 for $155,000 thus revealing a capital gain of about $25,000.  However, there has been no disclosure as to expenses such as stamp duty and legal fees (if any) on its acquisition nor any real estate agents’ fees and commission and legal fees (if any) upon sale. 

3. The wife’s evidence and that of the husband also dealt with the acquisition of the two investment properties at N and E.  In the course of the hearing I was helpfully provided with information by way of aide memoire setting out formal particulars relating to the purchase price of the three relevant properties, the date and the mortgage obtained from Perpetual Limited to secure the purchase.  Certain of the information was obtained from subpoenaed files. 

4. The investment property at N was purchased in late 2001.  The wife deposed that the purchase price was $147,000 whilst the husband alleged it was $155,500.  A mortgage was taken out in favour of Perpetual Limited in the sum of $124,406.

5. The investment property at E was purchased in late 2001.  The wife asserted the purchase price was $150,000 whilst the husband claimed it was $152,000.  A mortgage in favour of Perpetual Limited was obtained on that property in the sum of $121,600.  The parties acquired their second matrimonial home at H in late 2001.  It seems common ground that the purchase price was $172,000.  A mortgage was taken out on that property in the sum of $160,000. 

6. The evidence setting out the purchase price of the properties is deposed to by the parties in their respective trial affidavits.  On any view, the differential matters very little for it is clear that the evidence is somewhat sparse and pays little regard to additional expenses such as stamp duty and sundry costs on acquisition.  I would have expected that the husband, who had sole control of the family finances, would have been in a position to produce documents evidencing the financial aspects of the purchases. 

7. Putting aside the issue of those additional costs, it does appear that the parties were at that time in a position to pay an acceptable deposit in each instance.  Insofar as the mortgage details at the time of purchase is concerned, I was informed of those particulars by Mr Eidelson as having been obtained from the subpoenaed files.  In the difficult circumstances in which I find myself, given the failure of the husband to attend the hearing and having regard to s 97(3) of the Act and Rule 1.04 of the Rules, I accept that representation as evidencing the mortgage liabilities at the time of the purchase of the three relevant properties.

8. The parties separated in early 2003 and proceedings were commenced in the Family Court of Australia by the husband on 18 June 2004.  It appears that the husband ceased to make any payments in respect of the three mortgage debts in favour of Perpetual Limited from about December 2004/January 2005.  The position of the respective mortgages at that time was as follows:

   ·The N property   $156,803

   ·The E property   $115,063

   ·The H property   $118,300

   (See Exhibit “W15”)

9. At the time of sale of each of those properties, the mortgage debt had increased substantially as follows:

   ·The N property mortgage increased to $196,434, being an apparent increase of $39,631

   ·The E property mortgage increased to $144,853, being an apparent increase of $29,790

   ·The H property mortgage increased to $150,457, being an apparent increase of $32,157.

10. It thus appears safe for me to conclude on the evidence in respect of which I have been assisted by both Mr Eidelson and Mr Manly that the three mortgage loans increased in total by about $101,578 resulting from the husband’s failure to make payments albeit that he was employed for some time during that period and was in receipt of all nett rentals from the two investment properties.  It is claimed by the wife that he in addition received rental from his brother, a tenant in the H property.  Furthermore, the husband lived in the former matrimonial home without contribution whilst the wife paid rent in the property leased by her.  He also said that at some stage, his brother was unable to contribute any rent due to his financial circumstances.  The husband chose not to otherwise work, explaining that he devoted all his energy to the court proceedings.

11. It is not for me to undertake an investigatory role in piecing together the manner in which the husband apparently financed and adjusted the mortgages over the three properties, particularly given his refusal to attend court.  However, it appears (Exhibit “RK6”) that both the H property and the N property jointly secured mortgage loans No. … and No. … whilst mortgage loan number … was secured alone by the E property.

12. It appears that the husband must have secured some taxation advantage as the mortgage on the former matrimonial home at H was originally $160,000 yet by January 2005 it was reduced to $118,300 whilst that over the N property had increased from $124,406 to $156,803.  However, that is mere surmise on my part and if I am incorrect, then it matters not for the overall picture is quite clear.

13. During the time of his unemployment, which was substantial, the husband paid only the bare minimum by way of child support (accepting that he paid for swimming and music lessons) so that the onerous burden of financially caring for the child fell solely upon the wife.  The impression I have from all the evidence I heard is that the husband was content for the wife to shoulder this substantial commitment notwithstanding his constant and encapsulated ideation that she was mentally disturbed and a constant danger to the child’s welfare.  In my view, nothing could be further from the fact.

14. As I have said, during the period that the husband failed and/or refused to make the payments on any of the three mortgage loans in favour of Perpetual Limited he retained for his own benefit the total nett rentals on the two investment properties until the time of my order on 3 January 2007.  I have little doubt that he may have utilised some of those monies in payment of some outgoings, albeit the evidence on this issue is not altogether clear.  Mr Eidelson assessed that over the relevant period to 3 January 2007, being the date of the order made by me freezing the rental monies paid to the real estate agents, he had the benefit of about $38,000. 

15. This was opened as such by Mr Eidelson at the commencement of the trial and the husband has not led any satisfactory evidence or at all to the contrary.  Following my order of 25 September 2007 the wife received the benefit of nine months of the accumulated rental in the sum of $13,970 which when pro-rated to the period that the husband received the rental monies demonstrates a reasonable basis for Mr Eidelson’s calculation.  This was confirmed in his written submissions.

16. At the time of settlement of the three properties, there were adjustments made reflecting the substantial non-payment of municipal rates, South East Water rates and Body Corporate fees which have been helpfully summarised by Mr Manly (see Exhibit “RK6”).  I also take into account the fact that Perpetual Limited, notwithstanding the husband’s default, did not charge penalty interest (see Exhibit “RK5”).  What that summary reveals is the husband’s failure not only to meet the relevant mortgage commitments, but also certain of the Body Corporate fees and also municipal and water rates.  It is not unfair to comment that it was prima facie by reason of his conduct that the properties were sold thus incurring real estate agents fees and commission together with sundry costs.

17. The summary (Exhibit “RK6”) provided by Mr Manly reveals on the face of it that the firm of Messrs Russell Kennedy hold $124,759.62 (pages 3 and 5 of Exhibit “RK6”) in trust for the parties.  However, following discussion with Mr Manly, he informed me in argument that the precise position is that the nett sum currently held by the firm in respect of the N property is $58,633.12 (being $61,814.69 less “litigation” costs of $3,181.57) and the sum of $59,681.97 (being $62,944.63 less payment of $3,262.96, being additional legal costs) a total of $118,315.09.  This figure was provided to me by Mr Manly, in the course of argument following consultation with his instructing solicitor and which I accept for the purpose of my determination.

18. What is critical in assessing the current nett pool of assets available for distribution between the parties however is that Messrs Russell Kennedy have taken it upon themselves to pay their professional fees of $92,186.99 (Exhibit “RK6”) from the nett proceeds of sale of the three properties.  As I understand it, these fees relate to their acting for Perpetual Limited in proceedings in the Supreme Court of Victoria seeking possession and sale of the two investment properties and their role in the sale as ordered by me of the H property.  They are also involved in VCAT proceedings brought by the husband relating to the Uniform Consumer Credit Code regulated loan in respect of a mortgage over the former matrimonial home in which, it was claimed costs continued to accrue. 

19. I do not assert any impropriety on their part by any measure for, it appears to me, having listened carefully to the oral submissions of Mr Manly that the firm overlooked the fact of the wife’s claim pursuant to the provisions of the Family Law Act (1975) (as amended) to a share of the total nett proceeds of the family assets.

20. Mr Manly specifically pointed out that he acted for Perpetual Limited and Members Equity Bank Pty Ltd and not for Messrs Russell Kennedy, the solicitors for his clients and by whom he was instructed.  In the course of oral argument, I suggested, in the circumstances, that in the event I brought into account by add back the costs abrogated by the firm, then he may well find himself faced with a conflict of interest.  I am sure the point was not lost on him, nor his instructing solicitor. 

21. It is so plainly obvious that the parties separated in a situation of grave disharmony, the circumstances of which I described in my substantive judgment in the welfare proceedings delivered on 17 October 2007.  The husband’s attitude towards his wife for the reasons set out by me has not changed.

22. It was within a very short period of time following the institution of proceedings in the Family Court that the husband ceased making any payments on any of the three mortgages for reasons described by him both in court and in his written material.  That was his decision, which was most unfortunate indeed in my view and it was his sole decision to take the course he did in litigation, both in the Supreme Court of Victoria and in VCAT.  Through his decisions and what I regard as his serious misjudgement, events inexorably led to the situation whereby the three properties were sold.  In my view, he simply wasted the equity the parties had accumulated in the properties and acted wantonly, the overall effect of which was to reduce their value.  See, for example Antmann v Antmann (1980) FLC 90-908, Kowaliw v Kowaliw (1981) FLC 91-092 and SMB v MFB (2006) FamCA 46.

23. To have delayed the matter further would have, it is clear to me, ultimately led to financial disaster.  It is not to be lost in the totality of the evidence that at the commencement of the trial on 26 March 2007 the husband asserted the value of the H property at $190,000, the N property at $200,000 and the E property at $185,000, being $575,000 in all.  Given what could reasonably be estimated to be the debt level in favour of Perpetual Limited at that time, the husband must have realised the equity of the parties was slight and reducing by reason of non-payment.

24. In terms of the total mortgage debt, what is known is that by February 2008 the total mortgage outstanding on the properties was $491,744 (Exhibit “W15”), accepting of course that figure included a further 12 months of unpaid arrears under the mortgages.  I only point this out to demonstrate, that even on the husband’s own case, the parties’ equity in the properties was marginal and which he estimated, in any event, at about $100,000 as at 5 March 2007.  Urgent action was required to preserve such equity as the parties had bearing in mind that the husband claimed that if Perpetual Limited succeeded “in full closer” (sic) (meaning “closure”) there would be “nothing left”. 

25. Whilst Perpetual Limited is entitled to relief against the husband resulting from his arbitrary decisions, his conduct and actions, does this mean it is entitled to have their costs paid in full from assets to the detriment of the wife’s own and independent legal entitlements pursuant to the provisions of the Family Law Act?  I think not.  I have no idea, for example, as to the basis or scale upon which the account for professional services has been rendered by its solicitors.  I am not a taxing officer.  That is a matter of professional costs between Perpetual Limited and its solicitors.

26. There is evidence which I accept that the husband left the H property in a very poor state of repair.  His affidavit in response endeavours to address this issue, but it is far from convincing and he has not attended court to support his allegation in any event.  It appears to me he had little pride in its proper or careful maintenance and let it lapse into a state of unacceptable disrepair.  I am satisfied he set upon a course to marginalise the assets of the parties.  I take that into account in a general way.

27. When I made my orders on 25 September 2007 for the husband to vacate the H property, I did so mindful of the proceedings at VCAT.  In my judgment, I explained my reasons for taking this action which was not, if the husband chose to proceed further with his case at VCAT, to bar him from claiming some benefit, if any, that would enure in his favour if he were successful.  That is of course a matter for him and he may retain the fruits of any such action, were he to be successful and his obligations to the wife pursuant to the orders I propose to make were met.  However, I note that in written submissions provided by Messrs Russell Kennedy and dated 11 April 2006, it is recorded that the VCAT struck out the husband’s application on 1 April 2008. 

28. I understand the husband’s complaint with Perpetual Limited, but given the whole of the surrounding circumstances, urgent action was required to be taken for the equity in each of the three properties was diminishing both rapidly and daily.  Given the long delay, I had little confidence at the time that the VCAT would address the issue with a timely judgment for it had ample time in which to do so.  It was urgent and compelling in the circumstances then prevailing that the order be made.

29. Mr Manly tendered correspondence from Messrs Russell Kennedy to Deputy President McKenzie of the VCAT dated 25 March 2008 reporting that the property at H had been sold and settlement effected.  The Tribunal was further advised by Messrs Russell Kennedy that the balance of funds outstanding by the husband to Perpetual Limited had been recovered.  The author went on to say the following:

    “We have not heard from [the husband] for some time, in connection with this application or any other matters.  He has not notified us of his new address, the last address being [H property].  [The husband’s] conveyance on the [H Property] sale, refused to provide [the husband’s] ongoing contact details.

    Contact can be made with the writer in the event that any further information is required.  However, we note that the loan the subject of this application by [the husband] to VCAT under the Uniform Consumer Credit Code has been repaid in full, on settlement of [the husband’s] sale of the [H] security property”.

30. Mr Manly further tendered a copy of an email communication also dated 25 March 2008 from the Executive Assistant to Deputy President McKenzie of the VCAT to the husband which reveals that a copy of the letter from Messrs Russell Kennedy of 25 March 2008 had been forwarded to him.  The email went on to say:

    “Since that correspondence advises that the only loan which is the subject of your current proceedings before VCAT has been paid out, the Tribunal proposes (subject to any submissions you might make) to strike out the proceeding.  Any submissions you wish to make must be made by 3 April 2008.”

31. I have earlier referred to the fact that the husband has received and retained for his own benefit some $38,000 rental for the two investment properties.  Following my orders of 3 January 2007 I further ordered on 25 September 2007 that the accumulated monies received by the two real estate agents which amounted to $13,970 be paid out to the wife as and by way of a partial settlement of property.

32. It appears to me that in the whole of the circumstances it would be appropriate that I do not add back into the pool of assets the benefit the husband received of $38,000, but rather make an allowance for it in a general way by an adjustment of the percentage entitlements of the parties to the nett asset pool available for distribution.  This is an exercise of my independent discretion.  This appears to me to be the fairer way to approach this issue given that the husband has sought to explain his financial position concerning the period during which he failed and/or refused to make mortgage payments and otherwise his overall situation from January 2005 but which, it is plain, has not been tested in court given his non attendance. 

33. In making my determination I do so upon the basis that I assess the asset pool of the parties at $226,472 upon the following basis:

    ·    Monies held in trust by Messrs Russell Kennedy  118,315.09

    ·    Husband’s superannuation (E)  2,000.00

    ·    Rental monies received by wife by way of part
    settlement of property   13,970.00

    ·    Monies withdrawn by Messrs Russell Kennedy by way of
    professional fees due from Perpetual Limited  92,186.99

    $226,472.08

    say  $226,472.00

34. In assessing contributions, I take account of the following factors:

    93.1The husband’s substantial and significant initial financial contribution. 

    93.2The wife’s financial contribution from her employment in circumstances whereby there was a period of time during which the husband was unemployed.

    93.3The wife’s dominant contribution as a homemaker and parent until the date of separation together with her commanding and superior contribution as a parent following separation to the date of trial.  During that period, she alone bore the onerous responsibility for the support of the child, her care and nurture, save for the minimal financial contribution made by the husband and earlier referred to in this judgment.

    93.4I accept the submission of Mr Eidelson dealing with the impact of domestic violence upon the wife during the course of cohabitation.  See Kennon v Kennon (1997) FLC 92-757 at 84,294. The evidence of the wife in her trial affidavit is compelling and which evidence I accept. I have no doubt that the husband’s conduct towards her was emotionally and physical exhausting, the impact of which upon her contribution as a homemaker and parent was made “significantly more arduous” than it ought to have been.  I take that into account in a general way in the exercise of my discretion.

    93.5I also take into account the husband’s errant conduct in wasting the equity in the two investment properties and the former matrimonial home.  He failed to make the mortgage payments on all the properties from December 2004 (or January 2005) through a serious misjudgement on his part, to make regular payments on all outgoings in respect of those properties to the extent evidenced in the adjustment statements (set out in Exhibit “RK6”) and permitting the former matrimonial home to run down as I have earlier described.  In my view, the husband acted wantonly with respect to the matrimonial assets such as to reduce their value.

    93.6I also take into account in a general way the fact that the husband had the use of all rental monies during the period he ceased to make the mortgage payments and other payments which, save to a modest extent, were applied to his own benefit.  The husband has failed to helpfully or persuasively otherwise explain the use of those monies.

1. In considering the costs in favour of Messrs Russell Kennedy in the sum of $92,186.99, I am quite satisfied that it is the husband’s sole responsibility arising from the folly of his actions and conduct.  That should not be visited upon the wife.  Furthermore, the greater part of it may be met from the husband’s share of the nett assets of the parties as assessed by me. 

2. Accordingly, on the issue of contribution pursuant to s 79(4)(a) to (c) inclusive of the Act, I assess the wife’s entitlement at 55% and that of the husband at 45%. I do so by weighing up all the factors I have addressed by way of summary in paragraphs 93 and 94. This is an exercise of my discretion.

3. On the issue of any prospective adjustments pursuant to the provisions of s 75(2) of the Act, I am satisfied that a further adjustment of 15 per cent should be made in favour of the wife on the basis of the husband’s greater income earning capacity and of the fact that the wife will be unlikely to receive appropriate child support from the husband for the child.  It seems to me that notwithstanding his considerable tertiary qualifications, the husband will not undertake proper employment so that in reality the financial support of the child will fall upon the wife in the future.  This fact is compounded by the husband’s distorted adverse view of the wife, her general mental health and ability to care for the child.  He is unable to apply reason.

4. Given my assessment of the wife’s entitlement to 70 per cent of the matrimonial assets, it is clear that she is entitled to receive $158,530 less the $13,970 already received by way of partial settlement of property.  I propose to order that the wife be paid $144,560.  There is thus a shortfall of $26,245 from the monies held in trust.

5. In the course of his written submissions, Mr Eidelson dealt with the legal costs retained by Messrs Russell Kennedy and the fact that there is only $118,315.09 retained in trust by them.  He headed his submission, in part “Commercial Reality” and had this to say:

   “32.The Husband’s legal costs to Perpetual Ltd are $92,196.99.  The Wife bears no responsibility in relation to these costs, and the same can be said to be totally the responsibility of the Husband.  The costs, having been deducted from the matrimonial asset pool by Perpetual Ltd had reduced the remaining funds being held to $118,315.

   33.There is no commercial viability in the wife pursuing the matter further against Perpetual Ltd whatever may be her legal entitlements.  Prolonging litigation has the inevitable effect of increasing legal costs further, which the Wife cannot sustain. 

   34.Accordingly the Wife forgoes any further claims which may exist in relation to Perpetual Ltd and seeks to obtain 100% of the balance of the funds currently held in the sum of $118,315.  On the basis of the above analysis, she has a significantly greater entitlement as against the husband, however there does not appear to be a fund from which she can claim it, in a commercially viable manner.”

6. In the course of their written submissions dated 11 April 2008 Messrs Russell Kennedy noted that the wife had requested Perpetual Limited not to go to the expense of preparing responding submissions given that her proposed orders did not cause prejudice nor harm to it.  It was noted (by par 34 of the wife’s submissions) that she abandoned any further claims that may exist in relation to Perpetual Limited.  The submissions confirmed that the firm held in trust $118,315.09 being surplus amount held by them after necessary enforcement costs and the costs of both mortgagee sales up to and including mid March 2008.  They made it clear that Perpetual Limited continued to incur further legal costs since that time, but confirmed they would not be seeking to deduct those further and continuing costs from the surplus funds presently held in their trust account.

7. In the event that the husband sought to question the costs or have the costs taxed or assessed, Messrs Russell Kennedy submitted as follows:

   “There was some concern about how the Family Court might deal with that possibility.  As part of any final Orders, our clients respectfully ask that the Family Court address all necessary issues.  For instance, the Family Court might see fit to order and if [the husband] takes issue with any of the enforcement costs recovered and has any net sum payable to him as a result of any order or review or taxation or assessment process, then any such net entitlement ordered to be paid by Perpetual be paid into a Family Court fund for [the wife], to the extent of any unsatisfied financial order that might be heard in her favour in the matrimonial proceedings.”

8. In the circumstances, given the submissions of both Mr Eidelson and those on behalf of Messrs Russell Kennedy, I propose to make the orders in accordance with the evidence and leave it up to the solicitors for the wife and Messrs Russell Kennedy to make whatever arrangement they may deem appropriate to achieve a practical outcome built upon a platform of “commercial reality”.  That is entirely a matter for them. 

9. The orders of the court shall be:

   1.That the husband do pay and/or cause to be paid to the wife by way of settlement of property the sum of $144,560 (“the said sum”) AND IT IS DIRECTED that in part settlement of the said sum, Messrs Russell Kennedy as solicitors for Perpetual Limited do forthwith pay to the wife’s solicitors all monies currently held in their trust account in the sum of $118,315.09. 

   2.That the husband be and remain responsible to the exclusion of the wife for all costs that have been incurred and may be reasonably assessed in favour of Perpetual Limited arising from necessary enforcement costs and the costs of mortgagee sales in respect of the properties known as and situate at H property, N property and E property.

   3.That in the event the husband recovers by way of court order any net sum payable to him following any order, review, taxation or assessment brought by him arising from the process referred to in paragraph 2 hereof, then any net entitlement ordered to be paid in his favour by Perpetual Limited and/or Members Equity Bank Pty Ltd be held in trust by Messrs Russell Kennedy and paid by them for the benefit of the wife in such sum as may be necessary to meet any balance pursuant to paragraph 1 hereof outstanding in favour of the wife.

   4.That the husband do forthwith pay to the wife the sum of $10,500 by way of costs that remains outstanding pursuant to orders made by this court on 15 April 2005, 26 June 2005 and by the Full Court of the Family Court of Australia on 2 February 2006.

   5.That all applications be otherwise dismissed AND THAT the proceedings be removed from the Active Pending Cases List.

   6.That the wife’s costs of and incidental to the proceedings be otherwise reserved.

   7.That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

I certify that the preceding 102 numbered
 paragraphs are a true copy of the
reasons for judgment herein of
The Honourable Justice Guest.



Associate to Guest J