Pippos & Pippos and Anor

[2008] FamCA 542

FAMILY COURT OF AUSTRALIA

PIPPOS & PIPPOS AND ANOR [2008] FamCA 542

FAMILY LAW – PROPERTY SETTLEMENT – Bankruptcy of party – proceedings between wife and Official Trustee in Bankruptcy – husband did not seek leave to make submissions pursuant to s 79(12) of Family Law Act 1975 (Cth) – division 65%/35% in wife’s favour appropriate on account of contributions of parties – adjustment of 5% in wife’s favour due to s 75(2) factors – effect of s 75(2)(ha) and (n) on adjustment in favour of wife due to husband’s bankruptcy – husband’s superannuation cannot be accessed by Trustee – wife to receive 70% of asset pool.

FAMILY LAW – PROPERTY SETTLEMENT – just and equitable – whether orders pursuant to s 79 must be just and equitable between parties to marriage or between parties to proceedings – obligation to do justice and equity between parties to proceedings – husband lost standing in proceedings due to bankruptcy – outcome just and equitable as between wife and Trustee.

Family Law Act 1975 (Cth) ss 75(2), 79, 79(2) & 79(12)

APPLICANT: Ms Pippos

FIRST RESPONDENT: Mr Pippos

SECOND RESPONDENT: Official Trustee in Bankruptcy

FILE NUMBER: ADF 53 of 2006

DATE DELIVERED: 29 February 2008

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Burr J

HEARING DATE: 13 February 2008

REPRESENTATION

FOR THE APPLICANT: In person

COUNSEL FOR THE 

SECOND RESPONDENT:

Mr David Berman

SOLICITOR FOR THE

SECOND RESPONDENT:

Gretsas & Associates

Orders

1. That in full and final settlement of all issues of property settlement between the Applicant, the First Respondent and the Second Respondent:-

   (a)    The Applicant do pay to the trust account of Gretsas & Associates for and on behalf of the Second  Respondent within ninety [90] days of the date hereof the sum of THIRTY NINE THOUSAND SEVEN HUNDRED AND FORTY ONE DOLLARS ($39,741).

   (b)    Contemporaneously with the payment of that amount by the Applicant pursuant to paragraph 1(a) of these Orders, the Second Respondent as the Trustee of the property of the First Respondent (a bankrupt) is hereby directed to transfer to the Applicant forthwith at the Applicant’s expense in all respects all that his right, title, estate and interest both at law and in equity in the property situated at H in the State of South Australia (“the [H] property”) being the whole of the land comprised and described in Certificate of Title Register Book Volume … Folio … PROVIDED THAT if the Second Respondent shall refuse or neglect to execute a Memorandum of Transfer in properly registrable form of his right, title, estate and interest in the said land to the Applicant within seven [7] days after the same shall have been tendered to him by or on behalf of the Applicant for that purpose then and in such case a Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary so to do to settle the same and to do all such other acts and things and to execute such other documents as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.

   (c)    The First Respondent do forthwith make arrangements to remove Caveat number …51 registered on the title to the H property PROVIDED THAT if the First Respondent shall refuse or neglect to execute a Withdrawal of Caveat in properly registrable form within seven [7] days after the same shall have been tendered to him by or on behalf of the Applicant for that purpose then and in such case a Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary so to do to settle the same and to do all such other acts and things and to execute such other documents as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.

   (d)    The Applicant do hereafter duly pay and discharge to the exoneration of the First Respondent and the Second Respondent all mortgage instalments (Westpac Banking Corporation mortgage number …), rates, taxes and other outgoings in relation to the H property and do indemnify the First Respondent and the Second Respondent against any liability in relation to any such payments.

   (e)    The First Respondent do hereafter duly pay and discharge to the exoneration of the Applicant the Austudy debt in the sum of $15,000 and do indemnify the Applicant against any liability in relation thereto.

   (f)     Save and except as otherwise specified in these Orders, each party do keep for their sole use and enjoyment absolutely all other property and resources in their respective possession or control free from any claim or demand of the other.

   (g)    Save and except with respect to the debts due and payable as dealt with in paragraphs 1(d) and 1(e) of these Orders, henceforth each party shall discharge without calling upon the other to contribute thereto the debts and liabilities contracted by them and henceforth each party is restrained and an injunction is hereby granted restraining the parties and each of them from pledging the credit of the other.

   (h)    If the Applicant do make default in payment of the sum or any part thereof mentioned in paragraph 1(a) of these Orders then and in such event the Applicant do pay to the Second Respondent interest thereon at the rate prescribed at the time by the Family Law Rules AND FURTHER that the H property be sold and the net proceeds of sale applied in the manner following:-

   (i)     To the Second Respondent the sum of $39,741 or such balance as then remains due and outstanding together with interest thereon at the aforesaid rate calculated from the said due date for payment to the date of payment to the Second Respondent of the said sum or such balance as at that time shall remain due and outstanding to the Second Respondent; and

   (ii)    To the Applicant the balance thereof.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 53 of 2006

MS PIPPOS

Applicant

And

MR PIPPOS 

First Respondent

And

OFFICIAL TRUSTEE IN BANKRUPTCY
Second Respondent

REASONS FOR JUDGMENT

The applications

1. At the commencement of trial proceedings before me, children’s issues and matters of property settlement required my determination. 

2. There is one child of the relationship between the Applicant and the First Respondent namely a daughter (“the child”) who was born in April 1996.  Very early in the trial proceedings children’s issues were resolved partly on a default basis and partly by consent.  Those Orders were made by me on 13 February 2008 thereby disposing of all children’s issues.  The child lives with the mother and no order was made for her to spend time with the father.

3. Property settlement issues remain for my determination.  Those proceedings are between the Applicant wife and the Second Respondent Official Trustee in Bankruptcy (“the Trustee”).

4. The wife instituted her proceedings on 18 January 2006.  At that time the husband had already been declared bankrupt on his own petition, that event having occurred on 5 October 2004.  By consent, on 31 January 2006, the Trustee for the estate of the bankrupt husband, was joined as a party to the proceedings.

5. Pursuant to Section 79(12) of the Family Law Act 1975 as amended, the husband thereafter became disentitled to make any submission to the Court in connection with the property vested in the Trustee unless he secured the leave of the Court. No such leave has been sought nor granted.

6. Thus the proceedings on the issue of property settlement for my determination are as between the Applicant wife and the Trustee of the husband’s bankrupt estate.

Background

1. The husband and the wife formed a friendly and exclusive relationship in mid-1994 after separating from their respective previous spouses.  There was a period of cohabitation for about a month in March 1995 but I am satisfied that permanent cohabitation between the parties did not commence until their marriage in March 1996 when they assumed occupation of rented accommodation in H.

2. The one child of the relationship between the husband and the wife was born shortly after the parties’ marriage, namely in April 1996.  From that time there were six children residing with the parties.  The five children of the Applicant wife’s former marriage were members of that household.

3. At the commencement of the parties’ cohabitation the husband was working in his own business.  The wife and two of the elder children assisted on a casual basis with some of that work.  The husband and the wife shared responsibilities with respect to the book work for the business.  To supplement the family income the husband also undertook repairs. When the business contract expired in early 1997 the husband shortly thereafter secured work as a shop assistant in H.  That job continued until January 1998 when the husband commenced full time study with W College.  The husband and the wife described it as a religious study college.  He was there for 3 years.  During that time the parties lived on Austudy payments from Centrelink and part of the proceeds of the property settlement received by the wife from her former husband.  That settlement sum was received by the wife in October 1999.  The gross settlement sum paid to her was an amount of $156,163.  After the payment of legal fees and other costs associated with her property settlement proceedings, and the subsequent recovery of some legal costs, the net amount received by the wife was $135,166.  In addition the husband secured two loans from Austudy to supplement the parties’ financial position.  Those loans were $12,000 in total but with interest the amount still owing is agreed at $15,000. 

4. In 1999 / 2000 the parties made what proved to be an ill-advised investment of $41,000 in G Organisation at H.  In December 2000 G Organisation entered insolvency and from their original investment an amount of $1,792 only was recovered by the wife in November 2004.

5. After his graduation from the College the husband worked in the transport industry for about 4 months from December 2000.  In 2000 and 2001 the wife secured work on a casual basis with two different companies demonstrating products in local supermarkets. Centrelink payments continued. From April 2001 until June 2003 the husband worked at V Shop receiving $767 net per fortnight.  In June 2003 the husband secured employment with P Company, a job in which he was still engaged at the date of the parties’ separation on 2 November 2003.  He is presently employed with T Company and has been for some 3 to 3 ½ years.  It is a full time job earning him $57,000 per annum gross.

6. After the wife had received her property settlement proceeds she used part of them to purchase for the parties a block of land at H in October 1999.  She paid $29,350 for that block.  In January 2002 the parties borrowed an amount of $115,000 from the Westpac Banking Corporation to build a house on the aforesaid block.  A further $20,000 was subsequently borrowed to complete some extra work on the property.  The house was completed on 25 November 2002 and the parties assumed occupation of it together until their separation some 11 months later after having cohabited in total for some 7 ½ years.

7. Subsequent to the separation the wife continued in occupation of the former matrimonial home premises and continued to pay all instalments on the mortgage and all utilities, rates and taxes.

   After separation the husband incurred a number of credit card debts and borrowed moneys from the Westpac Banking Corporation.  He was unable to meet those debts and on 5 October 2004 became bankrupt on his own petition.  In her affidavit filed on 22 February 2007, the Acting Deputy Official Receiver, deposed that the proofs of debt admitted to rank for dividend purposes totalled $28,577.

The evidence

1. The wife gave evidence in support of her application.  The Trustee called evidence from the husband and relied upon affidavits filed on 21 March 2006 and 22 February 2007.

Orders sought

1. The major asset, the subject of the dispute, is the former matrimonial home property.  The wife seeks a transfer to her of the half interest vested in the Trustee and proposes a payment by her to the Trustee of $20,000.  She will assume responsibility for the Westpac mortgage.

2. The Trustee is opposed to her application and suggests that an appropriate division of the total net property pool between the wife and the Trustee would be 60 / 40 in favour of the wife.

3. The wife also seeks an order for the discharge of the Caveat registered by the husband on the title to the former matrimonial home property. 

Assets, financial resources and liabilities

1. The wife and the Trustee were able to agree all assets, financial resources and liabilities as follows:-

   Assets

   18.1.Former matrimonial home property at H held as

   tenants in common by the wife and the Trustee                  $307,500.00

   18.2.Husband’s superannuation (Statewide, TWU and AON

   Master Trust)(total)  $17,000.00

   18.3.Wife’s ANZ superannuation fund  $423.00

   18.4.Wife’s Host Plus superannuation fund  $214.00

   Sub-total  $325,137.00

   Less Liabilities

   18.5.Westpac mortgage  $121,000.00

   18.6.Husband’s Austudy debt  $15,000.00          $136,000.00

   Total net pool  $189,137.00

2. It is appropriate that I treat the superannuation of the husband and the wife as part of the one asset pool and apply my findings as to contributions, Section 75(2) factors and what is just and equitable to that one pool.  There is no value in this matter in adopting a two stage process.  The superannuation totals are minor and do not distort the asset pool and the manner in which I should approach it.

3. As I stated earlier, proofs of debt have been admitted by the Trustee in a total sum of $28,577.  The Trustee acknowledges that these debts were incurred subsequent to the separation of the parties and ought not to be debts that should be considered as a liability in determining the property pool.  They should not be debts for which the wife is in any way considered to be liable.

4. In addition to the aforementioned admitted debts of $28,577, the Trustee has incurred costs of $31,500.

5. Of the assets detailed above, the husband’s superannuation benefits of $17,000 do not vest in the Trustee (Section 116 of the Bankruptcy Act 1966).

6. Conversely, the husband’s Austudy debt of some $15,000 will remain his to discharge.

Contributions

1. At the commencement of cohabitation the husband effectively owned nothing.  He had some modest items of household furniture and effects.

2. The wife though contributed a significant amount to the relationship.  At marriage she had:-

   25.1.A one-half interest in a farming property with her former husband;

   25.2.A 1988 Ford Fairmont station wagon valued at $8,000;

   25.3.Household furniture and effects valued at $1,000;

   25.4.Household appliances valued at $500;

   25.5.15 registered breeding dogs and puppies valued at $4,500.

3. Subsequent to marriage, but soon after marriage namely in 1999, the wife received the proceeds of her property settlement entitlement from her former marriage, an amount previously identified by me as a net figure of $135,166 (paragraph 9 above).

4. The wife’s property settlement proceeds of $135,166 were by far and away the most significant financial contribution made by either of the husband or the wife during their marriage relationship.  Those property settlement funds made up all of the financial shortfalls accumulated and incurred by the family during the marriage as a consequence of the husband having no income for a period of more than 3 years and very modest income for the balance of the time.  There is no dispute that those funds were used as follows:-

   27.1.To purchase in October 1999 for $29,350 the block of land upon which the former matrimonial home property at H was built;

   27.2.To purchase in October 1999 a Holden Commodore motor vehicle for $19,790.  The wife also contributed her Ford Fairmont motor vehicle owned prior to marriage as a trade-in.  The amount of the trade-in was $2,790.

   27.3.To purchase two motor vehicles for the wife’s two eldest daughters from her previous relationship, being a total amount of $13,200;

   27.4.To purchase a motor vehicle for the daughter of a friend of the wife for $4,000;

   27.5.For a holiday to Cambodia in November 1999 for the husband, the wife and their child costing $7,500;

   27.6.For a family holiday in July 2000 to the Gold Coast and Queensland costing $6,500;

   27.7.$1,000 for a new dining suite and other furniture;

   27.8.$1,000 for a computer;

   27.9.$5,000 to pay off a credit card debt in the husband’s name;

   27.10.$1,500 for wood working tools;

   27.11.$41,000 for the failed investment in G Organisation (an amount of $1,792 subsequently being recovered by the wife after separation);

   27.12.Investments of $1,000 each for four of their children, also in the G Organisation.

5. The wife further undertook casual employment for a couple of years to supplement the family income, particularly whilst the husband was studying.

6. The husband’s financial contribution to the relationship, by comparison to that of the wife, was modest.  He ran a business for about a year after the parties marriage.  For a further 9 months he worked for a shop at H and then embarked upon a 3 year course of study.  After graduating from W College, he worked in the transport industry on a casual basis for some 4 months until securing employment at V Shop earning $767 net per fortnight until he finished there in June 2003.  Thereafter and until separation in November 2003, he was employed with P Company.

7. Further, not only did the husband not earn any money during the 3 years that he was studying full time at W College, but he also incurred an Austudy debt agreed by the parties as still due and owing in the figure of $15,000.  It was the wife’s evidence, which I accept, that she was opposed to the husband undertaking his studies at W College.  It was her evidence that they simply could not afford for him to undertake those studies and that she had preferred him to keep working and undertake such studies as a night course.  The husband’s attendance at W College and his ultimate graduation from it, did not lead to any improved employability for the husband.  It did not increase his capacity to earn income nor provide additional income for the family.  The wife produced a copy of the husband’s taxation assessment for the 1998 / 1999 financial year which was at a modest figure of $7,738.

8. Prior to and in the early stages of the parties’ marriage the husband had accumulated some superannuation funds but in July 1998 he withdrew those funds and used the major proportion of those funds to travel to Cambodia as part of a humanitarian aid trip organised through his church.  Such an activity and such expenditure did not benefit the parties or their family. 

9. The husband made a financial contribution to the family in readily welcoming into the household the wife’s five children of her previous marriage and thus contributed to their support, although the wife was receiving child support from her former husband for two of her children.

10. The husband’s only capital contribution during the marriage relationship was $7,000 provided by the Federal Government in the form of a First Home Owner’s Grant.  The wife too contributed her $7,000 from that source.

11. The wife’s contribution to the financial circumstances of the parties and to the net asset pool identified above, continued after separation.  For over four years now since their separation on 2 November 2003, the wife alone has met all mortgage payments due and payable to Westpac, being a total payment of some $50,000.  In doing so she has reduced the principal owing on the mortgage by approximately $13,000, another significant contribution.

1. Further, she has paid all utilities, rates and taxes and some improvements to fixtures and fittings in the form of curtains ($800) and light fittings ($650).  Further she met credit card payments due on the husband’s credit card in the sum of $1,275.

2. Whilst the husband contributed by welcoming the wife’s five children of her previous marriage into the parties’ relationship, the wife undertook most of the household tasks and domestic duties.  Since separation over 4 years ago, she has been the sole carer for the parties’ child although the husband has consistently paid child support for her.  He presently pays child support of $146 per week plus an amount of $21 per week to reduce arrears of $600.

3. I am satisfied that each of the husband and the wife contributed equally to the various tasks associated with the maintenance and improvement of the former matrimonial home property prior to separation.  For the last four years, the contribution in that regard has been solely by the wife.

Conclusion on contributions

1. Of all of the contributions made by each of the parties during their relationship, I am satisfied that the overwhelming contribution has been made by the wife, in the nature of her financial contribution of her property settlement funds, the significant financial contribution she has made since separation in the nature of discharging mortgage payments when due, in her housekeeping, parenting and domestic roles during the period of the parties’ cohabitation, and her sole contribution in that regard to the child’s care and welfare since separation.

2. In all, I believe an appropriate distribution of the parties’ asset pool after consideration of matters of contribution would be reflected by a 65 / 35 division in the wife’s favour.

Section 75(2) factors

1. I turn now, as I am obliged to do by Section 79(4)(3), to the factors enumerated in Section 75(2).

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

1. The husband is 51 years of age and in good health.  The wife is 58 years of age and also enjoys good health.

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

1. The husband earns $57,000 per annum gross and aside from his child support commitments, has only himself to support. Apart from his superannuation entitlements of $17,000, which the Trustee cannot touch, he has no assets and financial resources.  As a bankrupt his interest in the former matrimonial home property has vested in the Trustee.

2. Apart from her interest in the former matrimonial home property, the wife has even less by way of assets, being her combined superannuation funds of some $640.

3. At the age of 51 years the husband has the capacity to continue to earn a good income for a number of years hence.  The wife is some 7 years older than the husband and has a far more limited capacity to earn income as a consequence.  In any event, I am satisfied that consistent with her parenting duties to the child, she is maximising her earning capacity which is restricted to a modest $340 per week from her employment in H and her contract work as a representative for S Company Pty Ltd.  Most of her total income disclosed in her Financial Statement filed on 23 October 2007 of a little over $800 per week comes from Centrelink payments and child support paid by the husband.

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

1. The wife is the sole carer for the parties’ child who is almost 12 years of age.  Thus her financial and emotional responsibilities for the child will last for many years hence, particularly if the child pursues any tertiary or post-secondary education or training.

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

(i)himself or herself; and

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

and

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

1. Nothing of relevance emerges for my consideration pursuant to these sub-sections.

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

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

(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid to either party;

1. As stated earlier, the husband has only a modest superannuation entitlement of $17,000 which remains out of the reach of the Trustee.  The wife’s superannuation benefits and entitlements are almost non-existent at a figure of some $640.

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

and 

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

1. These sub-sections are not relevant for my determination.

(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;

1. The proved amounts owing to the identified and admitted creditors of the husband amount to $28,577.  There is further an amount of costs due and owing to the Trustee in the order of $31,500.  There is thus a total debt due in those respects of approximately $60,000.  Of the total net pool of assets of $189,137, an amount of $17,000 represented by the husband’s superannuation benefits and entitlements, cannot come into the hands of the Trustee for distribution to creditors.

2. Given the effect of my determination that after consideration of matters of contribution the wife ought to receive 65% of the net asset pool and the Trustee standing in the place of the husband, some 35%, the amount that the Trustee would recover would be represented by a sum of $66,198 less the untouchable superannuation of $17,000, being a net figure of $49,198.

3. Quite clearly that would mean that the return to the husband’s creditors, after payment of the costs due to the Trustee, would represent a total figure of $17,698 or some 62 cents in the dollar.  By contrast, if the Trustee recovered the full amount of the claim of some $60,000 and the husband retained his superannuation benefits of $17,000, then the total settlement to the Trustee and to the husband would be $77,000.  That figure would represent almost 41% of the total net pool.

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

and

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

and

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

1. No additional matters of relevance emerge for my consideration pursuant to these sub-sections.

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

1. Neither party has re-partnered or is cohabiting with any other person.

(n)the terms of any order made or proposed to be made under section 79 in relation to:

(i)the property of the parties; or

(ii)vested bankruptcy property in relation to a bankrupt party;

1. If the wife was to receive 65% of the net asset pool, she would receive property represented by a value of $122,939. The wife would retain her modest superannuation benefits of $640.  Due to her then to provide a settlement of 65% would be other assets or payment to the value of $122,299.  To achieve her 65% entitlement, given that $17,000 of that pool being represented by the husband’s superannuation entitlements, cannot vest in the Trustee, she would need to make a payment to the Trustee of some $49,198.  The husband would be left with the Austudy debt of $15,000.

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

1. As stated, the husband has consistently paid child support since separation.  His current obligation pursuant to a child support assessment is in the amount of $146 per week.  To discharge arrears totalling $600, he is also presently paying a further amount of $21.00 per week.

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

1. It was the wife’s evidence that she has the capacity to borrow a further $20,000 to pay to the Trustee in full settlement.  It was her evidence, which I accept, that she would need to look to alternative lenders but should be able to borrow a total of $140,000 against the security of the former matrimonial home property.

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

1. No additional matters of relevance emerge for my consideration pursuant to these sub-sections.

Finding on Section 75(2) factors

1. In my view, it is appropriate to award to the wife a further net 5% on account of these factors.  The husband has a significantly greater earning capacity than the wife and the wife’s obligations to continue as the child’s primary carer, despite the husband’s child support contributions, will be ongoing for at least another six years before she attains her majority.

2. In fact I am satisfied that those factors relevant only to the husband and the wife alone justify an adjustment in the wife’s favour of 10%.  However, those factors are partially balanced by those which favour the Trustee pursuant to Section 75(2) (ha) and (n) and the regard I must have to the husband’s creditor’s ability to recover their debts.  That was the position adopted by Counsel for the Trustee.

Just and equitable

1. Section 79(2) is couched in the following terms:-

2. The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. The section provides no guidance as to whether or not the order must be just and equitable as between the parties to the marriage or as between the parties to the proceedings.  It could be argued that it is appropriate only to consider matters of justice and equity as between the parties to the proceedings, namely the wife and the Trustee, and not in terms of how the orders may impact upon someone who is not a party to the proceedings, namely the husband.  The exercise entailed in evaluating the Section 75(2) factors, necessarily involves consideration of matters which impact upon the parties to the proceedings and the husband.

4. On balance it is my view that the obligation upon me is to do justice and equity as between the parties to the proceedings, namely the wife and the Trustee.  The husband has lost his standing in these proceedings by dint of his bankruptcy.  Whilst it is necessary in the journey towards a result in property settlement proceedings between the wife and the Trustee to consider relevant matters which emerged from the marriage relationship, the rights of the husband’s creditors and considerations which must apply to the husband’s creditors represented by the Trustee mean that ultimately the orders I make on the issue of property settlement are as between the wife and the Trustee and hence it is to them that the justice and equity of my orders must apply.

5. My determination that the wife should receive an additional 5% of the asset pool after consideration of Section 75(2) factors, would bring her to a total of 70% of that pool.  That would be represented by a figure of $131,756.  The balance of 30% of the asset pool is represented by a figure of $56,741.  The retention by the husband of his superannuation benefits of $17,000 which cannot be accessed by the Trustee and which will therefore remain with the husband, means that a balance of payment is due by the wife to the Trustee of $39,741.

6. Whilst that is an amount of some $20,000 more than the wife has indicated that she has the capacity to borrow and pay to the Trustee, I am nonetheless satisfied that it represents a just and equitable outcome in the circumstances of the matter.  It recognises the wife’s significant contributions made during the marriage and the Section 75(2) factors which favour her position overall, but also recognises the entitlement of the creditors to recover a proportion of their debts.  As it is, after deduction of the Trustees costs of $31,500, the creditors will be recovering only an amount of $8,241 of the total due to them of $28,577, or a return of some 29 cents in the dollar.

7. The debts which led to the husband’s bankruptcy were all incurred subsequent to the separation between the husband and the wife.  The wife was in no sense responsible for any of that debt.  The consequences for her though, as a result of the provisions of Section 75(2) (ha) and (n) is to the effect that she will indeed be in part sharing responsibility for payment of some of the debt due to the husband’s creditors.

8. In my view that though remains a just and equitable outcome as between the wife and the Trustee.  The justice and equity of the result is though further assured by giving the wife a little extra time to try and access the funds she needs to borrow to pay the ordered amount to the Trustee.

Orders

1. The orders which I make and which are recorded at the commencement of these reasons, arise from the provisions of Section 79(1)(b) and (d).  Any orders that I make need to be addressed to the wife and to the Trustee.

I certify that the preceding sixty seven (67) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Burr.

Associate: 

Date:  29 February 2008