Piat & Mertens
[2024] FedCFamC1F 668
•20 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Piat & Mertens [2024] FedCFamC1F 668
File number(s): CAC 1314 of 2023 Judgment of: CURRAN J Date of judgment: 20 November 2024 Catchwords: FAMILY LAW – PROPERTY – Property adjustment pursuant to s 79 of the Family Law Act 1975 (Cth) – Where wife seeks a 55/45 division in her favour – Where wife seeks equalisation of superannuation –Non-compliance with filing directions – Non-disclosure – Where two pools approach applied – Where myriad of contributions assessed as equal – Consideration of s 75(2) factors – Where husband is 20 years older than wife – Where husband has retired and wife has an income – Where wife has ongoing care of the children of the marriage – Where husband’s financial position is unknown due to non-disclosure – Where 5 per cent adjustment made in favour of wife under s 75(2) – Where 55/45 division of non-superannuation pool in favour of wife is just and equitable – Consideration of the nature, form and characteristics of the respective superannuation interests – Where equalisation of superannuation is just and equitable
FAMILY LAW – PRACTICE & PROCEDURE – Husband’s unopposed application to appear by audio visual link granted – Application by the wife to proceed on an undefended basis – Where husband did not file any response material or evidence in the proceedings – Where husband was warned the matter is likely to proceed on an undefended basis if he does not comply with filing directions – Where husband is unrepresented – Consideration of Re F: Litigants in Person Guidelines (2001) FLC 93-072 – Procedural fairness – Application to proceed undefended refused – Husband granted leave to cross-examine, tender documents, and make submissions
Legislation: Family Law Act 1975 (Cth) ss 75, 79, 90XT, 90XZD, 106A
Federal Circuit and Family Court of Australia (FamilyLaw) Rules2021 (Cth) rr 1.33, 1.34, 6.06, 10.26, 10.27
Cases cited: Black and Kellner (1992) FLC 92-287
Briese and Briese (1986) FLC 91-713
Bulow & Bulow [2019] FamCAFC 3
Coghlan and Coghlan (2005) FLC 93-220
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577
Dickons & Dickons (2012) 50 Fam LR 244
G and G (1984) FLC 91-582
Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006
Kannis & Kannis [2002] FamCA 1150
Kioa v West (1985) 159 CLR 550
Kowaliw and Kowaliw (1981) FLC 91-092
Morgan & Valverde (2022) FLC 94-100
Norbis & Norbis (1986) 161 CLR 513
Omacini and Omacini (2005) FLC 93-218
Perrin & Perrin (No 2) [2018] FamCAFC 122
Re F: Litigants in Person Guidelines (2001) FLC 93-072
Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128
Singerson & Joans [2014] FamCAFC 238
Stanford v Stanford (2012) 247 CLR 108
Townsend and Townsend (1995) FLC 92-569
Trevi & Trevi (2018) FLC 93-858
Weir and Weir (1993) FLC 92-338
Y & Y [2004] FamCA 799
Division: Division 1 First Instance Number of paragraphs: 203 Date of hearing: 19 September 2024 Place: Canberra Counsel for the Applicant: Ms Van Oosterom Solicitor for the Applicant: Parker Coles Curtis The Respondent: Litigant in person ORDERS
CAC 1314 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PIAT
Applicant
AND: MR MERTENS
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
20 NOVEMBER 2024
THE COURT ORDERS THAT:
The Suburb B Property
1.Contemporaneously and within 42 days from the date of these Orders (“the Settlement date”):
(a)The Respondent Husband shall pay to the Applicant Wife the sum of $1,205,212.41(“the Settlement Payment”).
(b)The Applicant Wife and Respondent Husband shall do all acts and things and sign all documents as are necessary to transfer to the Respondent Husband, at the expense of the Respondent Husband, all of the Applicant Wife’s interest in the property situated at D Street, Suburb B, more particularly described as the property contained within Volume .. Folio …., Suburb B Section .. Block .. on Deposited Land … (“the Suburb B property”).
(c)The Respondent Husband shall do all acts and things and sign all documents as may be necessary to repay to NAB, at the Respondent Husband’s sole expense incorporating any PEXA fees which may be payable by the applicant Wife, any amount outstanding on the Settlement Date, including any arrears, for the loan held in the parties’ joint names secured by a Registered Mortgage in favour of NAB and wholly discharge the mortgage or refinance the mortgage (“the Suburb B mortgage”) and associated loan into his sole name.
Default provisions
2.In the event that the whole of the Settlement Payment has not been paid to the Applicant Wife by the Respondent Husband on or before the Settlement Date:
(a)The Respondent Husband shall pay to the Applicant Wife, in addition to the Settlement Payment, interest on the payment or the amount outstanding from time to time at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, to be calculated from the Settlement Date until the date of payment; and
(b)Within 42 days of the Settlement Date the Applicant Wife and the Respondent Husband shall do all acts and things and sign all documents necessary to effect the sale of the Suburb B Property.
3.For the purposes of Order 2(b) the following is to occur:
(a)The Respondent Husband shall vacate the Suburb B property within 21 days of his non-compliance with Order 1 and for the purposes of this Order the Respondent Husband shall ensure that the Suburb B property is in a clean and neat condition upon his departure. In the event that the property is not in a presentable state for sale, and the Applicant Wife pays any or all of the expenses to restore the Suburb B property to a clean and neat condition for sale, then the Applicant Wife will be reimbursed from the proceeds of sale of the Suburb B Property in respect of such payments pursuant to this Order before any division of the proceeds of sale of the Suburb B Property between the parties.
(b)The Applicant Wife is hereby appointed as the sole trustee for the purposes of the sale of the Suburb B property.
(c)The Applicant Wife and Respondent Husband shall agree upon a selling agent (“the Agent”) and a conveyancing solicitor (“the Conveyancer”) in writing but, failing agreement, within 14 days of the Respondent Husband’s non-compliance with Order 1, the Agent and the Conveyancer shall be as nominated by the Applicant Wife.
(d)Within 14 days of the Respondent Husband’s non-compliance with Order 1, the Applicant Wife and Respondent Husband shall agree to the price for which the Suburb B property shall be listed for sale (“the Listing Price”), and failing agreement, the Agent shall determine the Listing Price and the Suburb B property shall be listed for sale by private treaty forthwith.
(e)The Applicant Wife and Respondent Husband shall sell the Suburb B property by private treaty for the best price obtainable, but for an amount no less than 95 per cent of the Listing Price unless otherwise agreed between the Applicant Wife and the Respondent Husband in writing.
4.In the event that the Suburb B property is not sold within 3 months of listing pursuant to Order 3 or if the property is sold and the sale does not subsequently proceed to completion, then the following shall apply:
(a)The Applicant Wife and the Respondent Husband will do all such things to offer the Suburb B property for sale at a public auction (“Auction”) by the Agent, within 14 days of Order 4 applying or on a date as recommended by the Agent.
(b)The reserve price for the Suburb B property for the purposes of the Auction shall be agreed between the parties in writing no later than 7 days prior to the Auction occurring and failing agreement, the reserve price shall be determined by the Agent (“the Reserve Price”).
(c)The Applicant Wife and the Respondent Husband (or their nominated agents) shall attend the Auction.
(d)In the event that the bidding at the Auction does not reach the Reserve Price, the parties shall negotiate with the highest bidder at the Auction or any other interested party to effect the sale of the Suburb B property, provided that the Suburb B property is not sold for a price which is less than 90 per cent of the Reserve Price.
(e)Regardless of Order 4(d), if the Suburb B property does not sell at the Auction or following the Auction, the Applicant Wife and the Respondent Husband shall immediately list the Suburb B property for Auction again on a date nominated by the Agent at a new Reserve Price nominated by the Agent.
5.For the purposes of Orders 3 and 4 the Applicant Wife and the Respondent Husband shall co-operate in every way with the Agent including (and without limiting the generality of the foregoing):
(a)The marketing of the Suburb B property for sale.
(b)Making the keys for the Suburb B property readily available.
(c)Allowing inspection of the Suburb B property at all times reasonably requested by the Agent.
(d)Ensuring the Suburb B property is clean, neat and in good order at the time of inspection by any prospective buyer.
(e)Doing or saying nothing to hinder or prevent the sale of the Suburb B property being effected.
(f)Signing all documents requested by the Agent or the Conveyancer for the sale of the Suburb B property, including a Contract for Sale.
6.The Respondent Husband shall pay to the Agent any sums requested for advertising or auction expenses, and in the event that the Applicant Wife pays any or all of the advertising and auction expenses requested by the agent, then the Applicant Wife will be reimbursed from the proceeds of sale of the Suburb B Property in respect of such payments pursuant to this Order before any division of the proceeds of sale of the Suburb B Property between the parties.
7.The Applicant Wife and Respondent Husband shall do all things necessary to cause the proceeds of the sale of the Suburb B property to be distributed in the following order and priority:
(a)Firstly, to pay all costs, commissions and expenses of the sale including but not limited to the reasonable costs of the Agent and the Conveyancer and to reimburse the Applicant Wife for any costs she may have incurred pursuant to Orders 3(a) and 6.
(b)Secondly, to pay the usual rates and adjustments.
(c)Thirdly, the Applicant Wife and the Respondent Husband shall do all acts and things and sign all documents necessary to repay to NAB the amount outstanding for the joint loan in the parties’ joint names and to discharge the mortgage securing that loan.
(d)As to the Net Proceeds:
(i)Payment to the Applicant Wife in the sum of the Settlement Payment, or the amount then outstanding on the Settlement Payment, together with interest pursuant to Order 2(a); and
(ii)The balance to be paid to the Respondent Husband.
8.From the date of these Orders, up until the Settlement Date or the sale of the Suburb B property (as the case may be), the Respondent Husband:
(a)Shall be permitted to have the sole right to occupy the Suburb B property.
(b)Shall be solely responsible for all loan repayments, rates payments, and any other outgoings in respect of the Suburb B property.
9.Neither party shall mortgage or further encumber or otherwise offer the Suburb B property for security other than for the purposes of making the Settlement Payment.
Superannuation
10.The parties do all acts and things and sign all documents necessary to cause an equalisation of the parties’ respective superannuation entitlements.
11.Pursuant to s 90XZD of the Family Law Act 1975 (Cth), the following orders bind the Trustee of the Superannuation Fund to observe the Trustee obligations set out under the said Act and the Family Law (Superannuation) Regulations 2001.
(a)Super Fund 1 is the Trustee of the Super Fund 1 Superannuation Fund and for the purpose of these orders is referred to as the Trustee.
(b)The Respondent’s member number in the Fund is … and the Applicant’s member number in the Fund is ….
(c)Pursuant to s 90XT(1)(b) of the Act, whenever the Trustee makes a splittable payment from the Respondent's interest in the Fund within the meaning of s 90XE, the Trustee shall pay to the Applicant 50 per cent of the splittable payment and there be a corresponding reduction in the entitlement the Respondent would have had in the Fund but for this order.
(d)The operative time for compliance with these orders is four business days from the date that a sealed copy of the orders is served on the Trustee.
(e)Pending compliance with these orders, the Respondent is restrained by injunction from:
(i)Taking any steps or making any elections the effect of which would convert his present entitlement in the Fund to an entitlement whereby he would receive only a pension or annuity in lieu of a lump sum; and
(ii)Receiving, disposing of, encumbering or otherwise dealing with his superannuation entitlements with the Fund save as specified in these orders.
(f)The Applicant immediately cause a copy of these orders to be served upon the Trustee of the Fund and request the Trustee to note the Orders and act in relation to any payment in accordance with the Applicant’s and Respondent’s obligations.
12.Each party and the Trustee has liberty to apply on not less than three (3) business days’ notice, in respect to the implementation of the super splitting orders.
Other property and indemnities
13.Except as otherwise provided in these Orders, the Applicant Wife be as against the Respondent Husband, the sole legal and beneficial owner of:
(a)Any and all funds held in any and all bank accounts in her sole name including but not limited to the funds held in the:
(i)C Bank account ending #87.
(ii)C Bank account ending #53.
(iii)C Bank account ending #84.
(iv)C Bank account ending #39.
(v)C Bank account ending #57.
(vi)CBA account ending #69.
(vii)E Bank account ending #24.
(b)Motor Vehicle 1 registered in her sole name;
(c)Her interest in any superannuation fund in her name, including her interest in Super Fund 1; and
(d)All other personal items in her name, or where there is no legal title, her possession or control.
14.The Applicant Wife will pay and otherwise be solely liable for any and all liabilities held in her sole name and will indemnify the Respondent Husband and keep him indemnified with respect to same.
15.Except as otherwise provided in these Orders, the Respondent Husband be as against the Applicant Wife, the sole legal and beneficial owner of:
(a)Any and all funds held in bank accounts in his sole name including the funds held in the:
(i)NAB account ended #48.
(ii)NAB account ended #69.
(iii)NAB account ended #32.
(iv)CBA account ended #94.
(v)CBA account ended #44.
(b)Motor Vehicle 2 registered in his name;
(c)The F Company shares registered in his sole name;
(d)The G Company shares registered in his sole name;
(e)The H Company shares registered in his sole name;
(f)The J Company shares registered in his sole name;
(g)The K Company shares registered in his sole name;
(h)The T Company shares registered in his sole name;
(i)The L Company shares registered in his sole name;
(j)The M Company shares registered in his sole name;
(k)The O Company shares registered in his sole name;
(l)The N Company shares registered in his sole name;
(m)The U Company shares registered in his sole name;
(n)The P Company shares registered in his sole name;
(o)His interest in Super Fund 1; and
(p)All other personal items in his name, or where there is no legal title, in his possession or control.
16.The Respondent Husband will otherwise be solely responsible for any and all liabilities held in his sole name and will indemnify the Applicant Wife and keep her indemnified with respect to same.
17.Both the Applicant Wife and the Respondent Husband, as against the other, hereby release the other from all actions (including choses-in-action), proceedings, claims, demands, costs, and expenses of whatsoever nature, whensoever and howsoever arising which either of them had or may have or may have had against the other for or by reason of or in respect to any act, cause, matter, or thing.
Section 106A
18.If either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by Affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Federal Circuit and Family Court be and is hereby appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such document in the name of such party.
Other
19.Within 28 days of the date of these orders, the parties shall file and serve any application for costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Piat & Mertens has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CURRAN J:
INTRODUCTION
These are property proceedings between the applicant wife, Ms Piat, and the respondent husband, Mr Mertens. The wife’s application is for property adjustment orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
MATERIAL RELIED UPON
The applicant wife relied upon the following documents:
(a)Amended Initiating Application filed 29 July 2024;
(b)Her affidavit of Ms Piat filed 25 July 2024;
(c)Financial Statement filed 25 July 2024;
(d)Single Expert Report regarding D Street, Suburb B dated 7 April 2024;
(e)Case Outline Document filed 17 September 2024; and
(f)Balance sheet annexed to the Case Outline Document filed 17 September 2024.
The husband failed to file any material at all in compliance with the directions made as set out at [21]-[33] below.
ORDERS SOUGHT
The wife
The applicant wife seeks that the husband pay her a cash sum equivalent to effect a 55 per cent division of the net property pool, excluding superannuation and that she transfer all her interest in the property at D Street, Suburb B (“the property”) to the husband. She seeks a default provision for the sale of the property in the event that the settlement sum is not paid within 42 days of the settlement date.
The wife seeks an order for the equalisation of the parties’ respective superannuation entitlements.
The husband
In final submissions, when asked for his response to the application of the wife, the husband contended that a division of the property pool that would be just and equitable would be a 25 to 30 per cent division to the wife and 70 to 75 percent division to the husband, with no adjustment of the parties’ respective superannuation entitlement.
In addition, he made submissions that he retain the entirety of an inheritance he said he received from his late mother approximately two years ago (and post-separation). He contended he received something in the order of $600,000. He made no proper disclosure prior to this point of the detail of the inheritance.
THE LAW
Property adjustment
The parties’ competing property applications are to be determined in accordance with the provisions of Part VIII of the Family Law Act 1975 (Cth) (“the Act”). The High Court considered the approach to be adopted in the determination of proceedings pursuant to s 79 of the Act in the decision of Stanford v Stanford (2012) 247 CLR 108 (“Stanford”). Section 79(2) of the Act provides that a court should not make an order for property settlement unless it is satisfied that it is just and equitable to do so.
No submission was made in relation to the ratio arising from the decision of Stanford. The wife’s application contended it was just and equitable to alter their financial interests. The husband in submissions contended that a 25-30 per cent adjustment of the assets excluding superannuation was an order that would be just and equitable.
Orders altering the property interests of the parties may only be made if the court is satisfied it is just and equitable to make such orders pursuant to s 79(2). The parties’ financial interests remain entangled with the most significant asset of the parties identified, being the former matrimonial home. Making an order altering their property interests is necessary.
The approach to be adopted in a financial adjustment case pursuant to s 79 of the Act is to follow the four-step process.
It is necessary to first identify the legal and equitable interests of the husband and the wife, consider what (if any) liabilities each of them has, and consider any superannuation and financial resources in the names of the husband, the wife, or either of them, at the date of the hearing.
It is necessary to then assess the contributions of the parties and determine a contributions-based entitlement having regard to the matters set out in s 79(4) of the Act insofar as they are relevant to the facts in this case. The assessment of contributions is usually approached in a holistic fashion.
The third step is to identify and consider relevant matters under s 75(2) of the Act to determine such adjustment as is necessary to the contributions-based entitlement.
The final step requires the court to consider the effect of the findings and determine whether the orders are just and equitable in all of the circumstances.
The treatment of notional property
It is necessary to have regard to the guiding principles which emerge from the decisions of Omacini and Omacini (2005) FLC 93-218, Kowaliw and Kowaliw (1981) FLC 91-092, and Townsend and Townsend (1995) FLC 92-569 about the three “clear” categories of addbacks where, exceptionally, the justice and equity of the case requires it. These are: where the parties have expended money on legal fees, where there has been a premature distribution of matrimonial assets, and where there has been “waste.” It is appropriate in cases that fall outside the exceptional that justice and equity is achieved in relation to notional assets by taking them into consideration under s 75(2), as opined by the Full Court in Trevi & Trevi (2018) FLC 93‑858.
The duty to make full and frank disclosure
It is well established as adumbrated in Black and Kellner (1992) FLC 92-287 and Weir and Weir (1993) FLC 92-338 (“Weir”) that in circumstances where there has been non-disclosure, “the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature” (Weir at 79,593). This statement has long been cited as the salient principle on what follows from the failure of a party to make full and frank disclosure, as was applied by the Full Court in Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006 at [87]–[88].
Upon the establishment that there has been non-disclosure, the Court is empowered to make adverse findings against the party who failed to make adequate disclosure, and such findings include that an asset pool is greater than demonstrated, as set out in Weir at 79,593:
The court’s jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
Further, in Kannis & Kannis [2002] FamCA 1150, the Full Court said at [51]:
51.Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour.
Parties have a duty to make full and frank disclosure of their financial circumstances pursuant to r 6.06 of Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Rules”), which is, per the decision of Briese and Briese (1986) FLC 91-713 at 75,180, “at the very heart of cases concerning property and maintenance”. The consequences of failing to make full and frank disclosure are significant, on account of the significant disadvantage that it places upon both the innocent party and the Court by hindering the achievement of a just and equitable property settlement.
The husband’s non-disclosure and decision not to file evidence
The husband failed to comply with directions and Orders to file any response material or evidence. The wife contends that the husband failed to meet his financial disclosure obligations. Arising from this failure, the wife has by necessity incurred expense in issuing subpoena in order to understand the parties’ asset pool. The husband was aware of his obligations of disclosure. He had attended each court event (except 19 March 2024) and was aware of the orders that have been made. He had access to the court portal.
The husband has not complied with orders of Judicial Registrar Hiles dated 13 December 2023 which stated:
7. That within 28 days from the date of Orders the parties shall comply with Rule 6.1.1 and 6.06 of the Federal Court and Family Court of Australia Law Rules 2021 (‘the FCFCOA Rules 2021’) with respect to full and frank disclosure of their financial circumstances.
Orders made by consent on 28 February 2024 extended the time for compliance with Order 7 of the orders of 13 December 2023 to no later than 6 March 2024. An order was made for each party to file an Undertaking as to Disclosure no later than 21 March 2024. These orders were not complied with.
Trial directions were made by Judge Hughes on 16 April 2024, with the husband appearing on his own behalf. Relevant notations were made as follows:
F. The husband has filed no material in the proceedings.
G.The husband has been warned if he does not file any material it is like[sic] the matter will be heard on and undefended basis on 19 September 2024.
The wife’s undisputed evidence is that she provided her disclosure to the husband, but she did not receive disclosure other than several screenshots referred to below, from the husband. I accept her evidence in this regard.
The husband failed to conduct this matter with any diligence and failed to make disclosure. I agree with the wife’s submission that in the circumstances I should not be unduly cautious in making the finding that there are likely undisclosed assets and resources that remain unknown.
The wife’s evidence was that other than screenshots of the husband’s share portfolio and bank balance received on 6 March 2024, the husband has not disclosed his financial position in accordance with the Rules.
The wife has done the best she can to identify the assets, but due to the husband’s non‑disclosure, is uncertain of the true assets of the parties. She says she still does not know the extent or character of the husband’s assets, liabilities and financial resources.
The wife said that the failure of the husband to make the required disclosure is wilful and accordingly sought that the Court, consistent with authority, not be unduly cautious in finding that there are likely other non-disclosed assets and resources.
The husband contended in oral submissions that his failure “to submit things”, which I infer is evidence and disclosure, was because he suffers from mental health problems which he said become particularly bad when he is under stress.
The husband did not file any evidence. He provided no evidence regarding his mental health or any other matter, despite numerous orders and directions over a significant period of time, to do so. He failed to engage in a meaningful way with the proceedings, although, he was before the court on many occasions where directions were made for him to file the evidence upon which he relied.
The husband contended that my refusal to accept his assertion as to his poor mental health without any evidence was discrimination against a person with mental health problems. Given the multiple orders and directions made in this matter directing the filing of evidence and compliance with disclosure, plus the warnings given in the event of non-compliance, together with the fact that he was at least for a period legally represented, I do not accept the submission. The husband had opportunity to put before the court in a proper way evidence that was relevant to the court’s task of determining the Application filed by the wife. That he did not do so was entirely within his power and control.
To complain at the trial that his assertions as to his mental health (made without evidence) were not being considered is without merit where the husband was on notice of the wife’s application and of his opportunity to file his evidence. The husband must be afforded an opportunity to respond to the wife’s application to alter the parties’ property interests. The husband was afforded numerous such opportunities which he failed to take up. Litigants must be provided with a timely determination of their applications. The wife was entitled to have her case heard and determined notwithstanding the husband’s conduct.
Superannuation
It is open in the exercise of the discretion conferred by the Act, to divide the assets of the parties into two pools for the purposes of an assessment, otherwise referred to as an “asset by asset basis” as opposed to the “global approach” using one pool of property. This approach has been validated by the High Court in the decision of Norbis & Norbis (1986) 161 CLR 513 at 524. The Full Court in the decision of Y & Y [2004] FamCA 799 at [43] said “both approaches are legitimate and choosing one over the other can never in itself amount to an error of law” unless the result is manifestly unjust.
It is a matter of discretion as to the approach I take in assessing the assets of the parties. In relation to adopting a two pools approach, Nygh J in the decision of G and G (1984) FLC 91‑582 at 79,697 noted that:
…those who favour the global approach heed the warning that the origin and nature of the different assets ought to be considered, and those who favour the more precise approach do not add up the individual items without standing back at the end to review the overall result in the light of the needs of the parties.
The proper pathway for doing so can be discerned from the decision of Coghlan and Coghlan (2005) FLC 93-220 (“Coghlan”) at [65]-[67]:
65.… If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a) value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a),(b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f), and (g); and
(d)ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
66. In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of cohabitation (if applicable), at separation and at the date of the hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.
67.If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s 4(1), but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable.
In the present case, the wife seeks a lower percentage adjustment of superannuation (of equalisation) than she seeks as an adjustment of the balance of the non-superannuation pool (of 55 per cent). The husband contended that no adjustment of the respective superannuation entitlements should be made. Both parties therefore seek that matter be dealt with, in effect, adopting a two pools approach. I agree it is appropriate to deal with the superannuation in a separate pool and adopt such an approach.
The parties’ respective superannuation entitlements have an agreed value. The orders that are just an equitable in respect of superannuation and the consideration of both contributions and future needs are considered below.
THE PROPERTY POOL
In the balance sheet annexed to the wife’s Case Outline Document dated 17 September 2024, the wife set out her contention as to the property pool as follows:
Property interests, superannuation and financial resources Description Ownership Applicant’s value Respondent’s value ASSETS 1 Marital Home – D Street, Suburb B Joint 1,770,000 2 Shares - F Company; G Company; H Company; J Company; K Company; T Company; L Company; M Company; O Company; N Company; U Company; P Company (as of 3.49pm 6 Mar 2024) Respondent 372,789.47 3 NAB (48, 69, 32) (as of 31 Jan 2024) Respondent 135,155 4 CBA (94, 44) (as of 31 Jan 2024) Respondent 66,967 5 C Bank (87, 53, 84, 39, 57) Applicant 11,973.11 6 CBA (69) Applicant 93.72 7 E Bank Applicant 177.64 8 Motor Vehicle 1 Applicant 11,000 9 Motor Vehicle 2 Respondent 16,000 16,000 10 Home contents Applicant 10,000 11 Home contents Respondent 10,000 12 Assets subtotal 2,404,156 LIABILITIES 13 Mortgage - D Street, Suburb B Joint 132,126.28 14 15 16 17 18 Liabilities subtotal 132,126.28 SUPERANNUATION Name of Fund Type of interest Member Applicant’s value Respondent’s value 19 Super Fund 1 Accumulation Respondent 1,120,000 20 Super Fund 1 Accumulation Applicant 391,325.03 21 22 23 Superannuation subtotal 1,511,325.03 TOTAL (assets – liabilities) 2,272,029.66 TOTAL (assets – liabilities + superannuation) 3,783,354.69 FINANCIAL RESOURCES Description Ownership Applicant’s value Respondent’s value 24 25 Financial resources subtotal OTHER Description Ownership Applicant’s value Respondent’s value 26 27 Other subtotal TOTAL (assets – liabilities + superannuation + financial resources + other) 3,783,354.69
The wife annexed to her affidavit filed 25 July 2024 an earlier version of her balance sheet which became part of Exhibit 2.
Aside from the wife’s C Bank accounts at line item 5, the differences between the two balance sheets are de minimis. Where there are inconsistencies between the balance sheet annexed to her affidavit, and the balance sheet annexed to the wife’s Case Outline Document filed 17 September 2024, I have taken the wife’s case to be relying on the balance sheet annexed to her Case Outline because it was later in time.
The Case Outline Document relied on by the wife contained a number of values that were inconsistent with the wife’s financial statement filed on 25 July 2024. As set out below, doing the best that I could with the evidence that has been filed, I have made findings as to value based on sworn evidence and not mere assertion from what would otherwise be considered an aide memoir in the form of the contended balance sheet contained in the wife’s Case Outline Document.
The husband called no evidence contesting the value of any of the assets or liabilities asserted by the wife.
In respect of the contentions as to the assets and liabilities of the parties I make the findings that follow.
Line item 1: What is the value of the Suburb B property?
Q Business opined that the value of the Suburb B property was $1,770,000. The valuation was obtained after an order was made for a single expert valuer to be appointed. The husband said that the value “might be lower” by around $100,000 due to the need for roof repairs to be carried out. The valuation was silent as to necessary repairs for the roof, but noted the internal condition of the property to be “Poor” and the external condition to be “Average”. The report stated, with regard to repairs, that:
While we confirm we have superficially inspected the building improvements, we advise we did not perform a structural survey, nor test any of the services or facilities, and therefore are unable to state that these are free from defect. We further advise that we did not inspect unexposed or inaccessible portions of the building, and are therefore unable to state that these are free from rot, infestation, or hazardous materials. Upon inspection, we note the property had no observable essential repairs on the date of inspection, and appeared in good condition for its age.
It went on to say:
* AN ALLOWANCE to prepare subject for sale as comparable property sales have, i.e. the cost and risk of minor repairs, some painting, waterproof the roof, rectify water damage to ceilings in multiply locations and general site cleaning are estimated to be between approximately $15,000-$25,000 subject to standard of finish adopted, say $20,000, which has been taken into consideration in our final valuation figure.
The report states that costs to “waterproof the roof” and “rectify water damage to ceilings” have been taken into consideration in the final valuation figure. No party sought to ask clarifying questions of the valuer. The husband failed to call any evidence to dispute the opinion.
I accept the value of the Suburb B property is $1,770,000.
Line item 2: What is the value of the husband’s shares (F Company; G Company; H Company; J Company; K Company; T Company ; L Company; M Company; O Company; N Company; U Company; P Company)?
In early 2024 the husband sent a screenshot to the wife disclosing he held shares with a value of $372,789.47.
The trial of this matter occurred on 19 September 2024. The husband has not provided an updated value of the shares. The best that can be done is to determine that, in early 2024 the value of the shares was $372,789.47, and to adopt that value in the balance sheet.
Line items 3 and 4: What are the values of the husband’s bank accounts?
The husband’s bank balances adopted by the wife were the values in early 2024. It was necessary for the wife to subpoena banks where she believed the husband may have held bank accounts due to his non-disclosure. She issued subpoenas to Westpac Banking Corporation; National Australia Bank; Commonwealth Bank of Australia, and Australia and New Zealand Banking Group.
The most recent balances available from the subpoenaed records were from early 2024. I accept these balances as it is the only evidence available. The husband could have filed evidence including current bank balances in compliance with the orders made by Judge Hughes. He failed to do so. Up to date evidence in relation to the husband’s bank balances is not before the court entirely as a consequence of the husband refusing to comply with his obligation of full and frank disclosure and his choice not to file any evidence.
Accordingly, I find that the value of the husband’s NAB accounts ending in #48, #69 and #32 is $135,155; and the value of the husband’s CBA accounts ending in #94 and #44 is $66,967.
Line item 5: What is the value of the wife’s C Bank accounts ending #87, #53, #84, #39 and #57?
There were inconsistencies between the values set out in the wife’s sworn financial statement filed 25 July 2024 and her affidavit on the same date, and the balance sheet annexed to the wife’s Case Outline filed 17 September 2024.
In the balance sheet annexed to the wife’s affidavit filed 25 July 2024, she deposed her C Bank account had a value in 2024 of $33,781.07. The wife’s evidence was that this sum was what remained from the $50,000 transferred from the husband as interim partial property settlement received in 2024, pursuant to court orders of 28 February 2024. The wife’s sworn financial statement filed 25 July 2024, deposed that the balance of her C Bank accounts was $33,781.
In the balance sheet annexed to the Case Outline Document relied upon at trial, the wife contended the value was $11,973.11. There was no evidence as to the use made by the wife of the funds or why it had reduced from $33,781 to $11,973.
The only sworn evidence I have before me is the value contended in the wife’s sworn financial statement filed 25 July 2024. Therefore, I adopt the evidence as to the value as deposed by the wife in her sworn financial statement of $33,781.
Line item 6: What is the value of the wife’s CBA account ending #69?
In the balance sheet annexed to the wife’s affidavit filed 25 July 2024, the wife contended this account had a value in 2024 of $183. In the balance sheet annexed to the wife’s Case Outline Document filed 17 September 2024, the wife contended a value of $93.72.
The sworn financial statement filed 25 July 2024 states that the wife’s CBA Account ending in #85 has a current balance of $14.
The difference is de minimis but I adopt the sworn evidence from the wife as set out in her financial statement of $14.
Line item 7: What is the value of the wife’s E Bank account ending #24?
In the balance sheet annexed to the wife’s affidavit filed 25 July 2024, the wife contended this account had a value in 2024 of $14.42. In the balance sheet annexed to the wife’s Case Outline Document filed 17 September 2024, the wife contended a value of $177.64. In her sworn financial statement, she deposes to the value being $183.
These differences are de minimis, however, where there is no other evidence, I find the value of the E Bank account is as set out in the wife’s financial statement at $183.
Line item 8: What is the value of Motor Vehicle 1?
In the balance sheet annexed to the wife’s affidavit filed 25 July 2024, the wife contended Motor Vehicle 1 had a value of $11,990, which she says she obtained from accessing a relevant website in 2024. In the balance sheet annexed to the wife’s Case Outline Document filed 17 September 2024, the wife contended a value of $11,000. This was without any evidence.
In the wife’s sworn financial statement filed 25 July 2024, the wife deposed the car had a value of $11,660. The husband did not cross examine the wife as to this value.
There is no explanation as to the differences between the respective figures. In the absence of other evidence I accept as the value the figure contained in the wife’s sworn financial statement filed 25 July 2024 because the evidence was not disputed by the husband. In this case, Motor Vehicle 1 is included at $11,660.
Line item 9: What is the value of Motor Vehicle 2?
The wife contended that the value of Motor Vehicle 2 was $16,000 in the balance sheet annexed to her Case Outline Document filed 17 September 2024. In the balance sheet annexed to her affidavit filed 25 July 2024, the husband’s car was noted as Motor Vehicle 3, valued at $13,090, being a value ascertained from a relevant website dated 2024.
The husband did not call any evidence as to the value of any assets including Motor Vehicle 2. He asserted in submissions that the car had a value $15,500. The wife did not call any valuation evidence to support her contention of its value at $16,000. In the circumstances, I adopt the husband’s lower valuation of $15,500 because of the absence of evidence from either party, and the de minimis difference of $500 between their respective estimates.
Line item 10 and 11: What is the value of the respective home contents of the wife and the husband?
No evidence was called in relation to the home contents of either party. There is no basis to make a finding in respect of value.
I will exclude home contents from the balance sheet.
Line item 13: What is the value of the joint liability of the mortgage
In her financial statement, the wife deposed that the value of the mortgage was $131,776.
The husband did not call any evidence as to the balance of the mortgage.
I accept the sworn evidence of the wife as to the value at $131,776.
Line item 19: What is the value of the husband’s superannuation?
The wife contends a value of the husband’s superannuation entitlement with Super Fund 1 of $1,120,000 in the balance sheet annexed to her Case Outline Document filed 17 September 2024.
The husband agreed and adopted the value of his superannuation interest as being $1,120,000 accordingly I find the superannuation of the husband is valued at $1,120,000 as agreed.
Line item 20: What is the value of the wife’s superannuation?
The wife contends that the value of her superannuation entitlement with Super Fund 1 is $391,325.03 in the balance sheet annexed to her Case Outline Document filed 17 September 2024.
The husband agreed in court that the value of the wife’s superannuation entitlement is $391,325.03. Therefore, the superannuation entitlement of the wife is valued at $391,325.03 as agreed.
Treatment of alleged notional assets or “addbacks”
The wife did not include any notional assets or “addbacks” in either balance sheet. However, at [58] of her affidavit, the wife states that she seeks an addback of $23,000, which is 50 per cent of the alleged $46,000 the husband withdrew from the joint account discussed below.
Addbacks are the exception rather than the rule, and an addback does not necessarily occur whenever a “party has expended money realised from the disposition of assets that existed as at the date of separation” (Omacini at [39]). The proposition that any money expended would be added back is “unduly simplistic”.
The wife states that in 2020, the husband withdrew $40,000 from the joint account, following which she herself withdrew $40,000 from the joint account. She then transferred $300,000 from the joint offset account into the loan repayment account, and requested the bank revoke the redraw facility to preserve those funds. The husband then withdrew a further $40,000 from the joint account, following which she transferred the remaining $16,000 from the joint account into the loan offset account.
The wife said that in 2020, the parties agreed to sending $5,000 each into the joint offset account. The wife transferred the $5,000 and a further $1,000 but gave evidence that the husband did not deposit any money into the joint account. Her evidence was not disputed by the husband.
The wife claims, and I accept, that overall, the husband’s net withdrawals from the joint account post separation totalled $80,000 to the husband and $40,000 to the wife of which she then transferred $6,000 into the joint account.
There was no evidence from the husband as to the use made by him of the $80,000. The wife gave evidence that the husband ceased employment in late-2017 and ceased receiving an income at that time. Although she contended the husband had the capacity to draw from his superannuation, no evidence was before the court that the husband had drawn from his superannuation. The superannuation balances were agreed.
The wife continues to earn an income, as she deposed, of $3,162 before tax per week.
As set out above, addbacks are the exception and not the rule. Given the uncontentious factual position that the husband did not have any income or employment at the time of separation and noting the transfers of $80,000 to him and $40,000 to the wife, I infer that he required some funds to meet his day to day living expenses.
There was no evidence from the wife that at that time the husband had any other capacity to meet his reasonable expenses. I accept the husband’s failure to make full and frank disclosure is a factor that impedes the wife’s and the court’s capacity to make findings as to the use made of the funds. However, his failure to disclose is something that I take into account when I consider s 75(2)(o).
In the circumstances where it is agreed the husband did not have an income stream at the time, I infer that the husband used the additional funds to meet his necessary living expenses. I am not satisfied in the circumstances that it is appropriate to notionally add funds back where it is reasonable to infer based on the agreed facts as to the parties’ respective earnings at the time, that the husband otherwise had limited capacity to meet his necessary expenses.
I decline to add back the $23,000 as sought by the wife.
DETERMINATION OF PROPERTY
Having made determinations and noting my findings as to the assets and liabilities of the parties as set out above, the superannuation and non-superannuation property of the parties is as follows:
Property interests, superannuation and financial resources Description Ownership VALUE ($) ASSETS 1 Marital Home – D Street, Suburb B Joint 1,770,000 2 Shares – F Company G Company; H Company; J Company; K Company; T Company; L Company; M Company; O Company; N Company; U Company; P Company Husband 372,789.47 3 NAB (48, 69, 32) Husband 135,155 4 CBA (94, 44) (as of 31 Jan 2024) Husband 66,967 5 C Bank (87, 53, 84, 39, 57) Wife 33,781 6 CBA (69) Wife 14 7 E Bank Wife 183 8 Motor Vehicle 1 Wife 11,660 9 Motor Vehicle 2 Husband 15,500 Assets subtotal 2,406,049.47 LIABILITIES 13 Mortgage - D Street, Suburb B Joint 131,776 Liabilities subtotal 131,776 TOTAL (assets – liabilities) 2,274,273.47 SUPERANNUATION Name of Fund Type of interest Member VALUE ($) 19 Super Fund 1 Accumulation Husband 1,120,000 20 Super Fund 1 Accumulation Wife 391,325.03 Total Superannuation 1,511,325.03 TOTAL (assets – liabilities + superannuation) 3,785,598.50 SECTION 79(4) CONTRIBUTIONS
The wife submits that her financial and non-financial contributions are significant and are greater than those of the husband.
The task of assessing the myriad of contributions requires a holistic approach.
In Dickons & Dickons (2012) 50 Fam LR 244 the Full Court said:
23We wish also to refer to the approach of the federal magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
24There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
25Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “…giving over-zealous attention to the ascertainment of the parties’ contributions…” (Norbis v Norbis (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
26The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
The Full Court in Singerson & Joans [2014] FamCAFC 238 said:
66.Section 79(4) of the Act is clear. There is nothing to suggest that any category of contributions needs to be quarantined and applied solely to particular assets. The court is mandated to look at the totality of what the parties have contributed in a financial and non-financial sense, including contributions to the welfare of the family and to the acquisition, conservation and improvement of assets. The court is required to evaluate the significance of all the various contributions to the property, notwithstanding there may be different categories of that property.
(bold added for emphasis)
What were the parties’ initial contributions?
The parties commenced cohabitation in 2010, when they moved into the husband’s apartment at R Street, Suburb S (“the Suburb S property”). There was no evidence as to value of the property at that time, nor the equity in the property.
The wife accepted that the husband also came into the relationship with some shares. The wife states she came into the relationship with savings and a car. There was no evidence as to the identification or the value of the husband’s shares or the wife’s savings and car at the commencement of the relationship.
I find that the husband made a superior initial contribution.
What were the parties’ contributions during the relationship?
The parties commenced cohabitation in 2010, married the same year, and separated on a final basis on 25 February 2020.
There are two children of marriage, namely, X, aged 13, and Y aged 11. The wife was the primary carer for these children. The husband has two children from a previous relationship born in 1996 and 1998 respectively, whom the parties cared for from time to time between 2010 and 2015.
The wife says she was the primary carer and homemaker of the parties’ two children. The wife took 12 months maternity leave for each birth and thereafter returned to work part time, working three days a week. The wife has remained in full time employment since mid-2015.
When the parties began cohabitation, they were both in full time employment. They purchased the family home at D Street, Suburb B as joint tenants for $885,000 in 2011 and moved in 2012.
The wife contributed $88,500 from her savings to the purchase of this property. She says that they took out a home loan in their joint names for $560,000 from the National Australia Bank. The wife’s evidence was the husband sold shares in 2012 for approximately $130,000. The shortfall for the purchase price was at least $236,500 plus stamp duty and expenses to purchase. The wife could not recall the amount contributed by the husband, but agreed with the husband’s proposition that the balance may have come from his savings. I accept her evidence that she contributed $88,500 and infer that the husband contributed the rest. I find that the contribution of at least $236,500 to the initial purchase price likely came from savings but am unable on the evidence to make a finding as to what amount, if any, accumulated prior to the relationship.
When taking out the joint home loan, the parties opened a joint offset account in which they both deposited their salaries to reduce the interest payable on the mortgage. All bills and living expenses were paid from this account. In 2013, the husband sold the Suburb S property, a property he had owned prior to the relationship commencing. It sold for $435,000. The net sale proceeds were paid into the parties’ joint offset account. I find that this contribution was made primarily by the husband, although the extent of the contribution is not clear on the evidence, as the equity and value at the time of the commencement of the relationship was not before me.
The wife states that she contributed to the care and upbringing of the husband’s two children from a previous relationship from 2010 to 2015 during periods they lived with the parties. There was little evidence in respect of the nature and extent of the care of the husband’s children, but the husband did not dispute that his children spent time at their home and that he paid child support for these children.
I accept the wife’s evidence that she was the primary caregiver of the children since they were born. The wife took 12 months maternity leave after the birth of each of the children. She did not return to full time work until 2015. The husband continued to work full time until his retirement in 2017.
The wife agreed that the husband was offered an early retirement package of 1.7 years tax free salary from his employer in late-2017 and received $173,000 which was paid into the offset account. Her evidence was that following his retirement the husband undertook other engagements in the hope he could derive income from those efforts, but that he did not earn further income.
The wife continued working following the husband’s retirement, earning a salary of $102,621 per annum in a managerial role, and thereafter working for an education provider earning $125,039 per annum. She continued to deposit her salary into the joint offset account for living expenses and mortgage repayments.
The wife gave evidence that the husband engaged in alcohol and prescription drug abuse in late-2017 and from that time was not able to assist with the care of the children in a safe manner. This was disputed by the husband, however, in cross examination the wife maintained her evidence.
In response to a question from the husband about how she could support the proposition that he abused a prescription drug, the wife gave oral evidence:
Because that was [the medication] that you were prescribed. It was a hundred in a bottle. You were - I think the scheduled dose was - I forgot what the number was per day, and you would get a bottle every two weeks with an X amount that was meant to be spare pills, and you would quite routinely be running, be overdosing on that and consuming the entire bottle within 10 days, and you would have maybe four days - two to four days where there will be a gap before you could get the next bottle. So on that basis I made that statement, and you would very often be using alcohol to be bridging that gap.
I accept the wife’s evidence that the husband displayed some deficits in parenting at times.
The wife accepted that, at times, the husband did assist with the care of the children, with delivering and collecting the children from school, and with gardening and some other tasks around the house, including laundry, although the extent of his contribution was in dispute.
The wife said that after his retirement, the husband’s health declined, and that she was not only caring for the children, but also for him. The husband challenged her evidence in this regard. She gave limited evidence of his health decline including detail of an occasion where the husband had a medical problem. She also gave evidence that he was intoxicated on numerous occasions where she felt he was unsafe to care for the children. I am not satisfied on the balance of probabilities that the wife was caring for the husband as contended, because the evidence is limited and non-specific in this regard. There was no independent evidence by subpoena or otherwise in respect of the husband’s claimed alcohol and drug misuse issues.
What were the parties’ post-separation contributions?
The parties separated on 25 February 2020, when the wife left the Suburb B property with the children. An interim Family Violence Order (“FVO”) was granted to the wife in 2020, and a final order was granted later in 2020, which was extended in 2022 for a 12-month period.
After separation, the husband had the benefit of $80,000 he unilaterally withdrew from the parties’ offset account while he remained living in the former matrimonial home. The mortgage was modest. In 2022, the available redraw was $333,403.74. The available redraw amount was $280,756.62 in 2023. The redraw balance has reduced in the time that the husband has remained residing in the home.
The wife accepted that the husband paid the rates and outgoings on the home since he has lived there. Given the reduction in the redraw amount, I find that the husband has had the benefit of living in the former matrimonial home without financially contributing to the mortgage over that period.
The wife stopped depositing her salary into the joint offset account around the time of separation when she had to obtain rental accommodation for herself and the children. She says she has spent over $130,000 in rent since separation and has received no child support. The wife had the benefit of $40,000 from the offset account, however, paid $6,000 into a joint credit card such that she had the benefit of $34,000 compared to the $80,000 the husband had available to him.
The wife’s evidence is that she spent the majority of the funds she had available to her on fees for X’s education. On 13 December 2023 the parties agreed that the husband would pay half of the medical treatment and half of the school fees for X. It was agreed that the husband has contributed financially to the payment of half of X’s school fees and medical work, but otherwise has not contributed financially to support the children.
Since separation, the husband has remained in sole occupation of the former matrimonial home, while the wife pays for a rental property for herself and the children of $635 per week. She has been financially supporting herself and the children using her income and savings, with limited financial assistance from the husband. The mortgage was being paid from the parties’ joint offset account.
The wife has had full time care of the children since separation. The husband said and it was agreed that he has requested a more significant caring role with the children. The wife agreed that the husband had sought to spend more time with the children, but gave evidence of her concerns about the children in the husband’s care. She elaborated on why she would not agree to the children spending more time with their father, identifying that the husband’s consumption of alcohol and his levels of intoxication meant she would personally check he was sober before leaving the children and would not leave them overnight. In cross examination she said :
I have repeatedly tried encouraging the children, notwithstanding the fact that there were multiple occasions where you were extremely drunk, needing to be taken by ambulance to the hospital on multiple occasions, and I put forth that is over - well over 10 times; a dozen times or perhaps more, and it's due to that instability, I think, that might have triggered the feelings of the children.
…there were also some occasions where you were in fact reeking of alcohol but claiming that you had not been drinking.
The wife has provided for the children’s living expenses since separation with very little assistance from the husband. I accept that the evidence establishes that over the four and a half years since separation, the wife’s parenting contributions and her financial support of the children is far superior to that of the husband.
The husband’s inheritance
The husband in submissions said that he received around $600,000 post separation by way of inheritance. The husband made no timely disclosure of the amount of the inheritance, the timing of it, the will or probate documents, nor did he provide evidence as to the use made of the inheritance as required by the Rules or as ordered.
Counsel for the wife accepted that the source of funds for the purchase of the share portfolio of $372,789.47 was from the husband’s post separation inheritance, or a source of funds not known to the wife.
In cross examination, the wife accepted that she had become aware of an inheritance as the husband had mentioned an inheritance in text communication with her. Various bank statements obtained by subpoena establish that the husband had received numerous tranches of $20,000 with the description “inheritance” and show deposits of $140,000. I accept that the wife had some knowledge that the husband had received an inheritance but was not provided with proper details. However, she did not know, and still does not know, the extent of the inheritance, because of the non-disclosure of the husband.
Due to the husband’s non-disclosure it is simply not possible to know the extent of the husband’s inheritance or the use he has made of those funds, or any remaining balance. This lack of evidence is entirely as a consequence of his failure to provide disclosure.
The only findings available on the evidence are that the husband received an inheritance; that a number of payments of $20,000 were made to his account with the description “inheritance”; the extent of the inheritance is unknown; but, as agreed, a share portfolio with an agreed value of $372,789.47 was purchased from this post separation which was a contribution of the husband.
Assessment of contributions
The wife submits that her financial and non-financial contributions are significant and are greater than those of the husband. The wife invites the court to consider the myriad of contributions that each has made during the relationship in a holistic manner.
The husband submitted that his financial contributions were significant and superior to those of the wife.
I am satisfied that the husband’s financial contributions initially were superior to that of the wife. However, I am satisfied that over the period of the relationship and since separation, the financial and non-financial contributions of the wife and her direct contributions in providing care for the children of the marriage, together with providing almost all of the financial support for the children, including the cost of their housing over the years since separation, are also significant.
I am unable to assess the full extent of the post separation contribution of the husband by way of the inheritance, as the full extent of that contribution is simply not known. I accept that the husband made a post separation contribution, as agreed, of the share portfolio. Whether there are additional savings or other investments are simply not known due to his non-engagement with the litigation and his ongoing non-disclosure. Given the husband’s non-disclosure, I adopt the approach of not being unduly cautious, however, I cannot ignore the substantial post separation shares pool that is a contribution that has solely come from the husband.
Utilising a holistic approach, I assess financial and non-financial, direct and indirect contributions as equal overall, and find that the contributions-based assessment is 50 per cent in favour of the wife and 50 per cent in favour of the husband.
SECTION 75(2) CONSIDERATIONS
The age and state of health of each of the parties
The wife is presently 44 years of age and is in good health.
The husband is presently 64 years of age. It is not in dispute that the husband has had periods of poor health. The wife states that he has previously told her he has had a health condition since 1996, autistic disorder since 2001, Post-Traumatic Stress Disorder since 2006, and another health condition in 2020 with recurrence. The husband agreed with the wife’s contentions as to his health but suggested to the wife that he was diagnosed with ADHD rather than autism. There was no medical evidence upon which I can make findings as to his current health or future prognosis, however, the parties agree the husband has a history of health complaints, the particulars of which and prognosis for which are opaque. This is, again, due to the husband’s choice not to file evidence in response to the wife’s application for property orders.
The wife’s counsel contended that the husband did not put in cross examination to the wife anything in relation to his current health status, other than his medication, that would result in the court making a finding that his health is so poor that it would warrant an adjustment in his favour.
I do not accept that submission in circumstances where it was accepted by the wife that the husband had health issues and she gave evidence as to the impact of some of those issues including her observations of his frequent intoxication and of a medical problem. I have no evidence of current health issues, treatment or prognosis.
I find that the husband suffered from various health issues during the marriage, the details of which remain unclear. I take into account that he is 20 years older than the wife.
The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The wife is now employed on a full-time basis as a public servant. She is earning $3,162 per week before tax.
The husband is retired and not in paid employment. The husband failed to file a financial statement in these proceedings so his income sources and assets are not known.
The wife accepts that there is likely an ongoing disparity in income derived from employment and that this would be a relevant factor for the court to consider in determining whether there should be an adjustment at the third step. The wife says she does not know if the husband has any other income source.
Given the husband has not been in employment since his redundancy in 2017 and that his bank records did not disclose any regular salary or other payments (other than the inheritance deposits referred to at [121] of these reasons), I am satisfied that the husband does not have capacity for employment. Due to non disclosure the extent of the husband’s income and financial resources is not known.
Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The wife submits, and I accept, that she continues to be the primary carer of the children, and that the husband contributes little to the care or expenses of the children.
The wife has incurred significant costs in raising both children over the past four and a half years. The costs are expected to increase as the children grow older. I find this is an expense she will likely continue to meet solely.
The wife accepted that the husband had made a number of proposals for the children to spend significantly more time with him than they currently do. She accepted that she refused to agree and explained why this was so, as discussed above. The arrangements that have been in place for the last four and a half years that, on balance, are likely to remain into the future, are that the wife will retain the lion’s share of the care of the children, if not the sole care of them. I find that the wife will continue to meet the vast majority of the costs of the children.
It is agreed that in 2023 the husband paid for half of X’s medical treatment. Aside from that contribution, and the agreed position that he pays half of X’s school fees, the wife’s evidence is that the husband does not otherwise financially contribute to the care of these children.
Any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account
Non-disclosure of the husband
As referred to in these reasons, the husband has failed to meaningfully engage in the proceedings despite attending court events. He failed to file evidence or a response and failed to provide full and frank disclosure. He was represented for a period of time. He was advised of his obligation to make full and frank disclosure. He was warned by Judge Hughes when the matter was before that court of the consequences of non-compliance with orders, as reflected in the notation to order dated 16 April 2024 as set out above.
The cause of his non-disclosure remains opaque. The duty however is absolute.
Assessment of s 75(2) factors
This is a finely balanced matter in terms of the s 75(2) factors.
Each party contends that they should be assessed as having greater future needs than the other.
The husband is 20 years older than the wife. He is no longer in paid employment. It is not in dispute that he had the health issues as were deposed by the wife. He will have a shorter life expectancy that the wife by reason of his age. I can make limited findings in respect of his health given the absence of any current evidence. I find that the husband’s age and historical health issues as reported by the wife are also factors that are relevant to the assessment of the s 75(2) factors in considering the husband’s future needs.
I accept the submission and find that the husband may have undisclosed assets or financial resources arising from the inheritance.
The wife is 20 years younger and has full time and secure employment in the public service. She states that she is earning $3,162 per week before in her sworn financial statement filed 25 July 2024. This is not an insignificant income. However, the wife has almost 100 per cent care and almost all of the financial responsibility for the two young children of the parties’ marriage and will continue to have that responsibility until they reach 18 years of age. She will likely never receive any child support from the husband, other than his agreed contribution to half of X’s school fees. In the over four and a half years since separation the only ongoing contribution the husband agreed to make was in respect of school fees.
I find on the balance of probabilities there is an income disparity given the wife continues to be in paid employment in a secure and senior role in the public service, but the extent of any income differential is unknown as the extent and use of the husband’s inheritance is not known.
I find that the wife will continue to have the ongoing care of the children and it is unlikely any form of financial support will be forthcoming. I find that the wife will continue to meet the majority of the caring responsibilities for the children although note their ages and the level of increased independence that comes with children as they grow.
Each of these factors are relevant and the assessment is one that is finely balanced. On balance, I am satisfied that an adjustment of 5 per cent to the wife is necessary in respect of the s 75(2) factors, particularly given the young ages of the children and the significant period of time that the wife will continue to have the financial and non-financial responsibility for them, together with the lack of evidence of the husband’s financial position due to his non-disclosure.
SUPERANNUATION POOL
The wife seeks that there be an equalisation of the parties' respective superannuation entitlements to the current date.
Both parties’ have superannuation with Super Fund 1. It is agreed that the husband's superannuation is valued at $1,120,000 and the wife's is valued at $391,325.03.
The husband said that he sees no justice in any of his superannuation being transferred to the wife, given the age difference and his state of retirement, noting that she has a well-paid job.
The wife submits that a superannuation splitting order equalising the parties’ superannuation is just and equitable after considering the contributions and future needs of the parties.
The husband contended that no adjustment of the parties’ respective superannuation should be ordered. I infer his contention is that to leave the balances as they are, would be just and equitable after considering the contributions and future needs of the parties amounting to an outcome of 26 per cent to the wife and 74 per cent to the husband.
The Full Court in Bulow & Bulow [2019] FamCAFC 3 set out at [25] that:
25.The nature, form and characteristics of the interests held by each of the parties consequent upon the proposed splitting order; the future benefits for each party upon vesting; when the respective interests might vest and the form in which any benefits might (or must) be taken at that time, are all likely to be relevant in assessing the s 75(2) factors...
Their Honours go on to state at [35]:
35.… the warrant for appellate intervention arises because the single most significant consideration in seeking to achieve justice and equity in an alteration of the parties’ superannuation interests and, in turn, s 79 orders as a whole, is the nature, form and characteristics of the particular interests involved and what consequences and effects flow from the same. The relevance of those matters is measured by the fact that a decision about justice and equity cannot be made without a consideration of them.
(bold added for emphasis)
In determining orders that are just an equitable regarding the alteration of the parties’ superannuation interests, I must considered the nature, form and characteristics of the parties’ respective superannuation interests.
There was extremely limited evidence in respect of the parties’ superannuation entitlements other than what was contained on the superannuation statements at Exhibit 2. The only evidence about the husband’s superannuation interest was that in 2024 he had no preserved component and at that time he had a member balance of $1,086,923.63.
There was no cross examination or submissions made as to the benefits available to either party, or the nature and form of their respective interests. I have considered that the husband has retired from employment and the wife is still contributing to her superannuation which is in accumulation stage.
Contributions
As set out in Perrin & Perrin (No 2) [2018] FamCAFC 122 at [47]-[49]:
47.Paragraphs 79(4)(b) and (c) of the Act required the primary judge to consider both direct and indirect contributions by the parties to the superannuation interest. Specifically, the primary judge was obliged to consider and conclude whether the wife made any indirect contribution to the husband’s superannuation interest but did not do so.
48.Nowhere in the reasons is there an examination of the nature, form and characteristics of the husband’s superannuation interest. An examination of the characteristics of the husband’s superannuation interest would have led the primary judge to consider the wife’s non-financial contributions as possible indirect contributions to the husband’s salary.
49.The absence of any consideration as to whether the wife made indirect contributions to the husband’s superannuation interest represents a failure to take into account a material consideration and so is a miscarriage of the primary judge’s discretion. This constitutes an appealable error: House v The King (1936) 55 CLR 499 at 504 – 505.
(bold added for emphasis)
The wife says as she took significant time off work to raise the parties' two children. The wife says that between 2010 to 2015, there was 24 months in which she was not working but on maternity leave. Her evidence was that during the other periods during their relationship she was working part time and caring for the children. The wife contended that her reduced wages over these years of the relationship is reflected in the vast difference in the parties’ superannuation. She contends that her (lower) superannuation balance is as a result of her non‑financial contributions and being the primary homemaker, while the husband could work. She says that she made indirect contributions to the husband’s superannuation in this way and also sacrificed to her career to look after the children which is reflected in her superannuation balance. I accept that submission.
There was no evidence from either party as to the their respective superannuation balances at the commencement of the relationship. I have no evidence as to whether there was a property settlement with the husband's first wife or whether it involved any superannuation adjustment. The opportunity for the husband to put evidence before the court to assess the superannuation contributions was not taken up by him.
There was limited evidence as to the extent to which the wife's superannuation has increased since the parties have separated over the past four and a half years. From Exhibit 2, the wife’s opening balance in 2021 was $255,211.40 and her closing balance in 2023 was $314,594.37. The agreed value is now $391,325.03. The wife has continued to be employed in the public service since separation at a senior level, she has made post separation contributions to her superannuation balance, to which the husband has not contributed.
Section 75(2) factors
The husband submitted that as he wants to retain the former matrimonial home to provide accommodation for his children, he will need to make a very large cash withdrawal on his superannuation, which would leave him with almost no superannuation.
This is not a factor that I give weight to. The husband's decision in respect of retaining or selling the Suburb B property is entirely a matter for him.
He submitted, with reference to the wife's superannuation statements annexed at page 427 of the wife's affidavit, that she would have a projected account balance of $1,350,000 at the age of 67 based on her income. This projection is more than 20 years into the future.
I give little weight to the wife's projected superannuation balance. I must consider the value of the parties' assets and resources now for the purposes of making a just and equitable division of the property pool. Future investments that the parties may make after orders have been made finalising their property, and projections as to likely superannuation balances or likely values of other assets, are not matters that I give weight to. I can make no finding as to the parties' circumstances in 20 years, it could only be mere speculation.
I do take into account however that the wife does have, and is likely to continue to have, an income stream until her retirement from which to meet her needs and that the husband may need to access his superannuation in order to meet his reasonable living expenses. I also take into account that the wife and her employer will continue to contribute to her superannuation while she remains employed.
The difficulty is that I am entirely in the dark as to the husband’s future needs, what expenses he might reasonably incur, and what other assets and income is at his disposal, due to his failure to provide any evidence. As set above, “the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature” (Weir at 79,593). There is limited evidence before me as to the funds that the husband has available to him, the extent of the inheritance he has received, or any other sources of income or asset he may have. This difficulty falls at the feet of the husband as he chose not to engage in the process by filing any evidence and because he failed to meet his obligation of full and frank disclosure.
What is just and equitable in the circumstances regarding superannuation?
I have carefully considered the available evidence in respect of the nature, form and characteristics of the parties' superannuation entitlements. I have considered the direct and indirect contributions each party made. I accept the wife is continuing to contribute to her fund while she remains employed and that she continues to receive an income stream while the husband has retired. I have also carefully considered the age differential of 20 years in respect of the parties’ likely future needs, and that the wife will likely continue to be employed.
There are significant limitations in respect of the findings that I can make on the evidence before me.
As I say above, there was no evidence at all in respect of both parties' contributions to their superannuation balances prior to their relationship. I have no evidence as to their respective contributions since separation. I cannot infer anything about the balances prior to their relationship. I find that the parties made equal financial and non-financial contributions to their respective superannuation balances during the relationship. I find that the husband has made no contribution to the wife’s superannuation since separation, but I am unable to make any finding as to the increase in value of her superannuation. I find that each party has made contributions to their superannuation and to each other's during their relationship both directly and indirectly.
I note that the husband can access his superannuation now if he were to so choose. I note that the wife has continued to make contributions to her superannuation post separation, to which the husband has made no direct or indirect contribution, as the wife has done so while having the care and financial responsibility of the children. I have carefully considered the fact that the wife has an income stream that is ongoing, and the husband does not.
On balance and doing the best I can with the evidence before me, having considered the contributions holistically and the future needs as addressed throughout these reasons, I am satisfied that an order equalising the superannuation balances as sought by the wife is just and equitable. In reaching this conclusion I have considered the values of the funds, the contributions made to the funds, the parties future needs an the effect of such an order equalising the parties’ superannuation balances.
Accordingly, I make orders in accordance with the wife’s application for an equalisation of the parties’ superannuation. The trustee has been afforded procedural fairness.
WHAT ADJUSTMENT OF EACH POOL IS JUST AND EQUITABLE IN THE CIRCUMSTANCES?
The wife seeks an adjustment of the non-superannuation property pool of 55 per cent to the wife and 45 per cent to the husband and an equalisation of the superannuation pool due to the myriad of contributions made by the parties, the husband’s non-disclosure, and the superior future needs she says she has for the ongoing care of the children.
The husband contended in final submissions, in response to the wife’s application, that an adjustment of the parties’ property interests so as to effect a 25 to 30 per cent division to the wife and 70 to 75 percent division to the husband of the non-superannuation pool, with no adjustment of the parties respective superannuation entitlement, would be just and equitable.
For the reasons outlined above, I am satisfied that the adjustment as sought by the wife is just and equitable. I have considered the actual value of the percentage adjustment by reference to my findings in respect of the pool of assets and in respect of the superannuation balances. The husband will have the opportunity to pay out the wife a cash sum so he may retain the former matrimonial home, as he desires.
I have considered the adjustment both in terms of the differential in what the parties will in fact receive and its reality in monetary terms. This amount accounts for each of the factors referred to above, but also takes into account the size of property pool and the actual financial reality of the order I make.
PROPERTY POOL DIVISION
Based on my findings above, the non-superannuation property pool, valued at $2,274,273.47, is to be divided as follows:
Property interests, superannuation and financial resources Description Applicant wife ($) Respondent husband ($) ASSETS 1 Marital Home - D Street, Suburb B 1,770,000 2 Shares - F Company; G Company; H Company; J Company; K Company; T Company; L Company; M Company; O Company; N Company; U Company; P Company 372,789.47 3 NAB (48, 69, 32) 135,155 4 CBA (94, 44) 66,967 5 C Bank (87, 53, 84, 39, 57) 33,781 6 CBA (69) 14 7 E Bank 183 8 Motor Vehicle 1 11,660 9 Motor Vehicle 2 15,500 Assets subtotal 45,638 2,360,411.47 LIABILITIES 13 Mortgage - D Street, Suburb B 131,776 Liabilities subtotal 0 131,776 TOTAL (assets – liabilities) 45,638 2,228,635.47
As stated above, both parties seek that matter be dealt with, in effect, as two pools. I agree it is appropriate to deal with the superannuation in a separate pool. I have found that an equalisation of the parties’ superannuation as sought by the wife is just and equitable for the reasons set out above.
Based on my findings as to the property pool, not including superannuation, having a total value of $2,274,273.47, a 5 per cent adjustment to the wife amounts to her receiving $1,250,850.41 of the pool. The husband will retain $1,023,423.06.
The differential provides her, in monetary terms, $227,427.35 more by way of adjustment than the husband.
Noting that the wife is to retain assets totalling $45,638, in order to effect the division, the husband is to pay the wife the sum of $1,205,212.41.
Noting that the superannuation values were agreed as set out in the balance sheet above, I order the equalisation of the parties’ respective superannuation interests.
Having considered all of the evidence I am satisfied that the adjustment is both just and equitable in the circumstances of this case and I so order.
COSTS
It is appropriate to order that any costs applications are to be filed within 28 days of the date of these orders.
CONCLUSION ON PROPERTY ORDERS
For the reasons set out above I am satisfied that the orders set out herein are just and equitable.
APPLICATIONS DURING THE HEARING
Oral application of the husband to attend the hearing by AVL
At 9.45am on the first day of the hearing, the husband sent an email to chambers and to the other party requesting to attend by audio visual link. He did not file an Application in a Proceeding, nor provide any evidence as to why he was not able to attend in person. He was forwarded a Microsoft Teams link to attend and made an oral application to attend the trial by audio visual link.
The wife did not oppose the oral application. Given he was unrepresented, the matter had been listed for final trial, counsel had been briefed to appear for the wife, and that there was no opposition to the application, I granted the application for the husband to appear via audio visual link.
Application to proceed on an undefended basis
The husband had not filed a response or any evidence. He had not filed a Case Outline as directed. The wife sought for the matter to proceed undefended. That application was refused for the reasons that follow.
The question of procedural fairness goes to the integrity of the trial process itself (Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128). Although the husband had not filed any evidence, he was present and wished to be heard in relation to the application for final property orders that had been listed for determination.
Rule 10.26(2) sets out the circumstances in which a husband is in default. Rule 10.27 identifies what the court may do when a party is in default. The husband was in default of orders made and failed to engage in the proceedings with due diligence. The husband could not have any reasonable complaint about the trial progressing without any evidence, given his protracted failure to file and serve any evidence-in-chief upon which he relied, his failure to file a Response, and his lack of compliance with orders and directions of which he was aware. Orders were made on multiple occasions to file any evidence on which he relied. He was not merely late in filing evidence; he did not file any evidence at all, even though he was on notice that the matter would likely proceed undefended if he failed to engage.
He failed to comply with the relevant rules.
In dealing with the application to proceed undefended, he was taken to the relevant rules, rr 1.33, 10.26 and 10.27, and was provided with an opportunity to consider how they should be applied.
Options other than proceeding undefended
The courses considered as to how to proceed were consistent with r 1.34(2), of which proceeding on an undefended basis was but one option. See the discussion in Morgan & Valverde (2022) FLC 94-100 (“Morgan & Valverde”) at [19]–[30] as to the various possibilities under r 10.27 of the Rules which covers similar grounds to r 1.33.
As Austin J explained in Morgan & Valverde, there are a number of options available where the participation of a party is to be limited by reason of a default with procedural orders and normally that would involve allowing the defaulting party to cross-examine (albeit in the limited manner described in Morgan & Valverde), possibly to tender documents and to make submissions.
It is significant that the husband was acting for himself. The application of the principle set out in Re F: Litigants in Person Guidelines (2001) FLC 93-072, required the options available under r 1.33 explained to the husband, which they were.
It is well-established that procedural fairness requires a party to be given a reasonable opportunity to present their case. In this instance, the husband sought to participate in the trial thus taking up the opportunity despite his failure to take up the opportunity he had to present evidence or file a Case Outline (Kioa v West (1985) 159 CLR 550).
Despite his failure to file evidence, the husband was present and wished to be heard in response to the wife’s application. As a matter of procedural fairness, it was appropriate that he be permitted to do so. Accordingly, the wife’s application to proceed on an undefended basis as against the husband was refused.
Accordingly, the husband was permitted to cross examine the wife and to make submissions.
I certify that the preceding two hundred and three (203) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 20 November 2024
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