Pulukuri and Pulukuri

[2013] FamCA 132

FAMILY COURT OF AUSTRALIA

PULUKURI & PULUKURI [2013] FamCA 132

FAMILY LAW – PROPERTY – Hearing complicated by both parties being self-represented and some of the property being in Europe

Family Law Act 1975 (Cth)

Coghlan [2005] FamCA 429
In the Marriage of Browne and Green [1999] FamCA 1483
In the Marriage of Kowaliw (1981) FLC 91-092
Mallet v Mallet (1984) 156 CLR 605
Neil v Nott [1994] HCA 23; (1994) 121 ALR 148
Pezos v Police (2005) SASC 500
Re F:Litigants in Person Guidelines [2001] FamCA 348
Stanford v Stanford [2012] HCA 52
Tomasevic v Travaglini [2007] VSC 337

APPLICANT: Ms Pulukuri

RESPONDENT: Mr Pulukuri

FILE NUMBER: MLC 8738 of 2010

DATE DELIVERED: 4 March 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 15 & 18 February 2013

REPRESENTATION

THE APPLICANT: In person

THE RESPONDENT: In person

Orders

1. That the husband forthwith pay to the wife $151,000.

2. That the husband pay to F Real Estate, the sum of $3,000 and indemnify the wife accordingly.

3. That upon the request of the wife and the presentation by her of a transfer of land in registrable form and at her expense, the husband sign all such documents as may be required to transfer to the wife all of his interest in the real property at B Street, Suburb A.

4. That upon the presentation by the husband of the transfer of land referred to in paragraph 3 hereof, the wife as soon as practicable thereafter, provide to the husband a discharge of any obligation he may have under the mortgage to National Australia Bank encumbering the said real property.

5. That upon the request of the wife and the presentation by her of a transfer in appropriate form and at her expense, the husband sign all such documents as may be required to transfer to the wife all of his interest in the timeshare known as C Group including Company D credits.

6. That upon the request of the husband and the presentation by him of a transfer of land in registrable form and at his expense, the wife sign all such documents as may be required to transfer to the husband all of her interest in the real property known as Property E in European Country K.

7. That if the wife fails to comply with paragraph 4 hereof, the husband have leave to seek to enforce the order by making an application for the sale of the said real property.

8. That pursuant to s 90MT(1)(a) of the Family Law Act 1975, the amount of $49,378.00 is allocated as the base amount to be deducted from the interest of the husband in the Equipsuper Superannuation Fund and whenever a splittable payment becomes payable out of the interest of the husband in the said superannuation fund, the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and there shall be a corresponding reduction in the entitlement of the husband to whom the splittable payment would have been made but for these orders.

9. These orders have effect from the fourth business day after the day upon which a sealed copy of these orders is served upon the trustee.

10. That after the service of a payment split notice pursuant to regulation 7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the wife shall do all such things required for the creation of a new interest in her name in the superannuation fund.

11. That the value of the transferable benefits to be so transferred from the husband’s entitlements to the wife’s entitlement shall be calculated by the trustee in accordance with regulation 7A.11 of the said regulations and pursuant to regulation 14F of the Family Law (Superannuation) Regulations 2001, any payments made from the husband’s interest in the superannuation fund after the trustee has created the new interest for the wife are not splittable payments.

12. That a copy of these orders be served upon the trustee of the said superannuation fund as soon as practicable.

13. That upon the request of the husband and the presentation by him of any necessary documents in registrable form, and at his expense, the wife sign all such documents as may be required to transfer to the husband any interest she may have in the Pulukuri Family Trust and thereby relinquish any position of trusteeship therein.

14. That forthwith and hereafter, the husband indemnify the wife in relation to all liabilities of any nature recorded in the said trust save that the encumbrance to the National Australia Bank referred to in paragraph 4 hereof, shall not be deemed a liability of that trust.

15. That each party otherwise retain and the other relinquish any interest in, any asset including superannuation in the possession of that party as at the date of these orders.

16. That any joint tenancy of the parties in any assets is forthwith, by these orders, severed.

17. That all extant applications be otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Pulukuri & Pulukuri has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8738  of 2010

Ms Pulukuri

Applicant

And

Mr Pulukuri

Respondent

REASONS FOR JUDGMENT

1. Mr Pulukuri (“the husband”) married Ms Pulukuri (“the wife”) in 1985. They have three children who are now aged 16, 14 and 9 years of age.  They separated in November 2007 and were divorced in December 2010.  Their dispute concerns the alteration of their respective property interests.

Unrepresented litigants

1. Each party represented themselves making the Court’s task difficult because of the presentation of the case and the parties’ understanding of the rules of evidence that govern the determination.

2. At a preliminary hearing in November 2012, when each party was also self-represented, I explained the court process, the requirement to prove assertions and the need to present admissible evidence. 

3. Each party, and particularly the husband, indicated that they knew what they were doing.  I suggested each obtain legal advice at least in relation to the evidence because there were arguments about property interests in European Country K, (“Country K”) and there were problems about values and indeed, problems of hearsay evidence.  The husband’s affidavit was already filed and despite my suggestion he might like to reconsider his position, he declined and desired to proceed with the material he had. I ordered he file an updated financial statement by 7 December 2012 but he did not do so.

4. Each party seems to have had legal advice at various stages. The husband’s trial affidavit was endorsed as having been prepared by a lawyer. It had admissibility problems.

5. When the case was about to begin, the husband wanted to file a handwritten financial statement there and then despite the order mentioned above.  He wanted to file it without the wife even seeing a copy beforehand.  The document was unsigned and uncopied and when ultimately the wife consented to its use (I suspect out of frustration at the prospect that the hearing might be adjourned), the husband acknowledged that he needed to alter it because the figures were wrong anyway. 

6. The trial affidavit of the husband had annexures including documents from Country K in that country’s language which were not only hearsay but also untranslated.  In respect of at least one document, the wife was prepared to acknowledge that an attached translation was accurate even though it was prepared by the husband.  It did not assist the husband very much.

7. Also as the hearing began, the wife complained that just days before, the husband had taken $150,000 out of the drawdown of the mortgage account.  When he gave evidence, he was asked what he had done with it but he was unresponsive simply saying that he no longer had it or that it was in a safe place.  Upon being warned that he faced contempt proceedings, he eventually admitted that his companion with whom he apparently sometimes lived, had the money in a filing cabinet.  The implausibility of that evidence became apparent when it transpired that this companion was overseas and had been at the time the husband took the money. The wife did not seek to set aside that transaction but the money was and is, in the control of the husband. He did not indicate any indebtedness to this other person.

8. The husband cross-examined the wife and complained about my intervention saying that it was depriving him of his “democratic rights”.  I reject that.  It is the function of a court to control its process and to ensure that any matter arising in cross-examination is relevant to the ultimate determination.

9. It is unusual in superior courts to see two unrepresented litigants and more so, in financial proceedings in this Court. That provides a challenge but the principles of conducting a trial remain the same.

10. In Neil v Nott [1994] HCA 23; (1994) 121 ALR 148, the High Court of Australia observed that a frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy. That was certainly the case here with the husband's view that the wife's financial entitlements were significantly affected (if not removed) by:

    a)      their divorce;

    b)     the fact that he considered his financial obligation limited to paying child support; and

    c)      his payments of his earnings into a joint mortgage drawdown account which the wife used over many months; his view was that despite this being with his knowledge, she had used his money.

11. As I have indicated, the parties had a dispute about the values of various assets but also about who owned them. These problems made the parties’ advocacy unusually difficult.

12. It was observed in Pezos v Police (2005) SASC 500 that a trial judge must act impartially as an independent arbiter, preserving the balance between the parties. Debelle J said:

    The appearance of justice may be adversely affected if one of the parties especially the losing party, believes that the judicial officer has become too close to the other party and has not approached the issues in the case with detachment and objectivity.

    The frustration of the parties was obvious where a ruling on evidence was made on the grounds of relevance or inadmissibility. The rejection of evidence or the refusal to allow the cross-examiner to continue an irrelevant line of cross-examination or to make speeches rather than test the evidence, can give rise to a belief that the judge is favouring the other litigant. The husband’s observation about his "democratic rights" being denied was an example.

13. Every litigant has the right to represent themselves. Where one party is represented and the other is not, the advice and assistance the unrepresented person receives should be limited to ensure that any disadvantage in not having a lawyer is overcome particularly in an adversarial environment. However, the court in that situation cannot extend its duty to create a positive advantage to the unrepresented over the represented. It is more difficult where there is no legal representation and the court is expected to be able to explain and determine a case in an adversarial procedure.

14. Having two unrepresented litigants does not mean the court environment can be used as a bargaining centre or mediation service; it remains a court obliged to determine the controversy according to law. An example of that arose where the parties began to bargain between themselves about how to compromise a property value. Ironically, that resolved the difficulty but it was inappropriate particularly where there was an assertion of a power imbalance in the bargaining process. In this case, the wife had made allegations against the husband of threatening behaviour. They were denied by the husband yet each had to face and cross-examine the other.

15. In most civil litigation there is usually little personal attachment between parties. In family law proceedings, there is often an underlying, if not overt, unhappiness arising from just the broken relationship. An examination of the transcript will show that the husband was courteous and not threatening. The husband was polite and the wife was articulate, well-prepared and focused. It was the wife who concentrated on relevant issues in a more targeted way whereas the husband persisted with his own agenda about the use to which his money had been put. He produced charts yet none of this material had been put properly before the Court or served upon the wife.

16. The rules of court apply to all parties and it is not for the judge to give legal advice about how litigants run their cases. If the trial process is to be fair, a judge should advise the family law litigant about how the law set out the way in which a determination of issues is undertaken but also what the parties’ rights are so that the unrepresented litigant can determine how to conduct the case.

17. As Bell J observed in Tomasevic v Travaglini [2007] VSC 337, the judge cannot become the advocate of the self-represented litigant. The judge must maintain the reality and appearance of neutrality. Once the process is explained, it is appropriate that parties be confined to it. The husband here observed that if the Court wanted more evidence, he "could get information". This court does not have the luxury of continually adjourning proceedings. In Tomasevic, Bell J observed that the Family Court of Australia has "enunciated useful guidelines" on the performance of the judicial duty. That reference was to Re F:Litigants in Person Guidelines [2001] FamCA 348. There, the Full Court examined the various principles I have described above and then said:

    10.A judge should ensure as far as is possible that procedural fairness is afforded to all parties whether represented or appearing in person in order to ensure a fair trial;

    11.A judge should inform the litigant in person of the manner in which the trial is to proceed, the order of calling witnesses and the right which he or she has to cross examine the witnesses;

    12.A judge should explain to the litigant in person any procedures relevant to the litigation;

    13.A judge should generally assist the litigant in person by taking basic information from witnesses called, such as name, address and occupation;

    14.If a change in the normal procedure is requested by the other parties such as the calling of witnesses out of turn the judge may, if he/she considers that there is any serious possibility of such a change causing any injustice to a litigant in person, explain to the unrepresented party the effect and perhaps the undesirability of the interposition of witnesses and his or her right to object to that course;

    15.A judge may provide general advice to a litigant in person that he or she has the right to object to inadmissible evidence, and to inquire whether he or she so objects.  A judge is not obliged to provide advice on each occasion that particular questions or documents arise;

    16.If a question is asked, or evidence is sought to be tendered in respect of which the litigant in person has a possible claim of privilege, to inform the litigant of his or her rights;

    17.A judge should attempt to clarify the substance of the submissions of the litigant in person, especially in cases where, because of garrulous or misconceived advocacy, the substantive issues are either ignored, given little attention or obfuscated. (Neil v Nott (1994) 121 ALR 148 at 150);

    18.Where the interests of justice and the circumstances of the case require it, a judge may:

    ·    draw attention to the law applied by the Court in determining issues before it;

    ·    question witnesses;

    ·    identify applications or submissions which ought to be put to the Court;

    ·    suggest procedural steps that may be taken by a party;

    ·    clarify the particulars of the orders sought by a litigant in person or the bases for such orders

18. Consistent with the Melbourne Registry practice, the parties were allocated a first day hearing at which the issues, as well as the process, were canvassed and at some length. The case was set down for final hearing and each was advised about what was needed. The husband chose not to file a further affidavit. The wife chose to file further material but during her final address, referred to other material that may be somewhere in the Court’s voluminous file.

19. That first day hearing was intended to enable the parties to understand the process and if they were litigating, to seek professional advice, draw documents and then proceed expeditiously. Thus, each had a fair trial even if each might disagree. In my view, I was able to discern sufficient evidence to undertake the ss 79 and 72 determinations.

20. The husband came armed with numerous folders setting out what he wanted to prove yet many of these documents did little to assist him.  It is not the Court’s function to make a case for an unresponsive litigant.  This is not a case of an impecunious litigant.  There are assets including some interests overseas and the husband is fully employed.

The onus of proof and the standard of proof

1. The onus of proof lies with the person making the allegation, the standard of proof is the balance of probabilities. I have determined the matter on what I have read where that evidence is of probative value and most importantly, have made findings about what probably happened.

The applications

1. By her amended application filed 21 May 2012, the wife sought orders that:

   ·The husband pay to the wife $70,000;

   ·The husband transfer to the wife B Street, Suburb A;

   ·The wife indemnify the husband in relation to rates and outgoings and discharge the mortgage in respect of the Suburb A property;

   ·The wife transfer to the husband a property described as Property E in Country K;

   ·The wife retain an Audi motor car and the husband retain the Ford motor car;

   ·From the husband’s superannuation, a splitting order favour the wife to the extent of $49,378;

   ·The husband retain an apartment in Country K;

   ·The husband transfer to the wife the timeshare interest;

   ·The parties windup a family trust;

   ·The parties equally share a real estate agent debt of $3000;

   ·The husband pay to the wife $200 per week by way of spousal maintenance for three years or a lump sum of $20,000 in the alternative; and

   ·Each party otherwise keep what they have.

2. By his amended response filed 16 November 2012 which responded to the wife’s earlier application and did not address her amended application, the husband sought the following orders:

   ·The parties windup their superannuation fund;

   ·The wife transfer to the husband Property E in Country K;

   ·The B Street, Suburb A property be sold and the proceeds pay out the mortgage, and after payment of $178,000 to the husband, the balance be paid to the wife; and

   ·The husband pay to the wife $40,000.

3. Ironically, each party sought orders under s 106A of the Family Law Act 1975 (Cth) (“the Act”) and neither explained why that was necessary.

The affidavit evidence

1. The wife told the Court she relied on affidavits filed on 22 November 2012 and a financial statement filed the same date together with an affidavit filed 13 February 2013.  In final address, she made reference to the fact that there was some other affidavit in the Court file but I have not (and should not have) taken that into account.

2. The husband told the Court that he relied upon the affidavit filed 16 November 2012 and the unsworn financial statement to which I have earlier referred.

3. The wife began her evidence by noting the mortgage was now $287,000 because of the $150,000 that the husband withdrew on 7 February 2013.

4. The wife is a full-time student but currently relies on Centrelink and child support payments from the husband.  She is otherwise engaged in home duties for the three children.  Child support is paid at various times and more recently, although the husband had not paid according to the required monthly timeframes, he had paid cash just prior to the hearing to bring matters up to date.  The wife now says she will have the Child Support Agency make the collections in the future.  It would appear the irregularity of payment arose because the husband was of the view that the wife had taken money from the joint mortgage drawdown facility.

1. It would seem that there are three children of the marriage who are now living with the wife and the husband sees them sporadically. That was not disputed.

2. Although there was a dispute about the value of the home, at the hearing in November 2012, agreement was reached that the correct amount to be used for the purposes of these proceedings was $465,000. 

3. The wife said the husband had an apartment in Country K worth $68,000 and there was a cottage in Country K worth $161,000.  Each of the parties had possession of a motor car and the values of those were agreed upon.

4. The wife also said that the husband had a trailer worth $500 and she had a piano worth $1800.  Chattels, according to the wife, had been distributed by agreement but there was also $10,000 worth of antiques in Country K in the husband’s possession.  There was no evidence of value or ownership and the husband did not agree with some of the wife’s assertions nor did the wife agree with some of his assertions. Again, in the running of the proceeding, bargaining took place. 

5. The wife maintained that the husband had a bank account in Country K with an estimate of $6300.  The husband acknowledged that he had not looked at the balance for a while but he thought that it was about €1000. The wife did not know any better and had not sought discovery. The best I can do is accept the husband’s admission against interest and presume that he has savings in Country K of A$1,300.

6. The wife also alleged, but this time the husband agreed, there was some Country G currency worth $5063 and it was in his possession.

7. The parties had each divided “music gear” but just what this was, I am unable to say. It would seem on the evidence that each was content to leave those things where they were.

8. The parties agreed there was a timeshare which had credits of $12,000.  It was also common ground that the wife was to retain that.

9. There is a family trust which was settled for the purposes of trading shares and in which the wife said there was an account currently holding $10,300.  That was not challenged by the husband.  The wife thought the trust had a significant debt but as best I can discern, that is part of the mortgage encumbering the home because their joint mortgage was used as the source of the share trading activities.

10. There are superannuation interests in three entities.  The husband had $61,500 in an account in his name, the wife had $9800 in hers and there was a joint self-managed superannuation fund with $17,700.  In a quaint discussion, the husband asked the wife about the self-managed superannuation fund and departing from the formal question and answer process, they each acknowledged that there was no dispute about what was to happen there. The husband quickly acknowledged that he agreed with the orders sought by the wife concerning their superannuation.

11. In relation to liabilities, the wife said over and above the mortgage there was a real estate debt of $3000 to which I shall return.

12. It was the wife’s evidence that both parties came into the marriage with nominal funds.  She undertook the homemaker and parenting role with part-time jobs and the husband was the main financial provider.  After separation, the wife assisted by making payments on the mortgage until January 2012 when she stopped because she could no longer afford it.  The husband continued to make payments until October 2012 when he also ceased.  There is no evidence before me about how the payments and obligations will now be affected by the husband’s withdrawal of the $150,000.

13. In relation to her occupation of the house, the wife said that she paid the insurance and the rates. Just what pocket they came out of, I am unable to say because it seems that until 2012, there was an unofficial pooling arrangement being used.

14. The husband’s evidence was that he was the main income earner and as can be seen, the wife agreed.  He set out his employment record and the income he had earned.

The Suburb A home

1. In 2002, the husband and wife purchased the B Street land from their savings which had principally come from the sale of previous properties they owned and built over the course of the relationship.  They borrowed from the National Australia Bank and built the current home.  The husband was the owner/builder and it took four years to complete.  The previous properties were ultimately sold and the husband thought that the total financial gains in doing so were approximately $150,000. I do not find any significance should be placed on that because it was clearly an estimate and more importantly, it came about from their joint efforts in their various forms.  The wife’s evidence was that she was caring for the family whilst the husband was providing most of the income.

2. In about 1989, the husband borrowed 280,000 of Country K currency from his mother.  The evidence is entirely unsatisfactory and I am unclear as to what happened to that money and that debt. 

The apartment in Country K

1. The husband’s evidence was that in about 1998, he agreed (presumably with his mother) to buy the mother’s apartment in Country K for 181,000 of Country K currency. He said and it was agreed by the wife that the debt was to be paid off within four years.  The husband paid the stamp duty.  He was then made the registered proprietor and remains so.  The wife said she recalled this apartment being sold to the husband at “the most minimal price” by his mother.  To that extent, the parties agree on what occurred and I can conclude it may not have been sold to the husband at market price.

2. The husband said that in 2002, this property “became an inheritance” because it was given to him by his mother.  In his affidavit, he referred to it being 2001 but nothing turns on that.  He produced a paper without a proper translation but which the wife accepted to be accurate, under which the transaction was formalised by the signing of a piece of paper in front of a police officer.  The original document was drawn on an informal basis and in words which have different meanings to different people.  On my interpretation, it contains at least one condition about the inheritance requiring the death of the husband’s mother first before he became eligible to own it.  The wife could not recall this property being dealt with as an inheritance but said she would not dispute “the validity of that claim”.  The concern I have is the duration of time from purchase to gift was only four years.  On the husband’s evidence, some money was paid towards the registration of the property.  Indeed, in cross-examination, when asked by the husband whether she put any money into this, the wife said a “substantial amount” came from “our house”.  The husband did not pursue the matter any further.

3. There are no documents and there is no admissible evidence to assist me to work out exactly what happened.  It is clear that the property is in the husband’s name and he receives rental from it.  I conclude he is the legal title holder to the property.

4. The relevant issue is whether it is just and equitable to alter the husband’s interest in that property. Having regard to the other assets, I find it is not. However, in ultimately turning to an issue of contribution below, I am left with the conflicting versions of whether money was put into that property by the family, the husband and/or the wife. As I found the wife generally a more reliable witness, I would accept that money did go towards it from the parties’ resources in one form or another but it is impossible to discern the amount or extent. The husband certainly seemed to be of the view that this was an inheritance and therefore of little significance in this case but as I pointed out, s 79 of the Act refers to the alteration of interests of either party in property.

The cottage in Country K

1. The husband also referred to a property in Country K described as a cottage.  This interest was acquired in about 1998.  It had apparently been owned by the husband’s mother and another relative.  The husband, the wife and their oldest daughter then and still a minor, acquired a one-third interest.  The wife’s evidence was that it was a half interest rather than one-third but that seems to have come about because in 2002, the other relative holding an interest sold to the husband and wife his one-half interest.  To acquire that, the parties agreed they had borrowed money.

2. The husband claimed that his mother’s intention, as evidenced by a document in the language of Country K, was clear.  No translation of that document was provided.  He also set out the conversation that he had with his mother when the transaction occurred.  None of that was admissible or helpful and the wife did not agree with his version.

3. The husband said that despite having purchased the interest, his mother made a gift to him and I have inferred that it was in the form of a waiver of the debt.  In any event, it was the wife’s evidence that the parties paid a price even if it was nominal.  Subsequent to the purchase, the parties paid the expenses on the loan used to acquire the relative’s interest.  The husband said the loan was paid off in 2008 when he received a further gift from his mother.  That gift was to him and the three children.  The wife claimed that this gift from the husband’s mother had also been to her but the money went into the husband’s bank account because she did not have one in Country K.  In addition, she said the entitlement of the three daughters to the gift was still in their accounts.  That being so she argued, the payment out of the mortgage that gave rise to the purchase of the relative’s interest, could not have occurred the way the husband described it.  Whilst the evidence of the husband and the wife is in conflict, I find the wife’s evidence plausible and I accept it.

4. When the wife was being cross-examined, the husband put to her that she owned 25 per cent, he owned 25 per cent and his mother owned 50 per cent. The wife disagreed.  Whilst I appreciate that the parties are not lawyers, I do not know that the ownership is equivalent to what is understood in Australian terms as a tenancy in common or indeed joint tenants.  I propose to treat the ownership as an undivided interest on the basis that even the husband acknowledged that the wife had an interest.

5. In their evidence, nothing more was said about the interest of the parties’ daughter.  On the wife’s evidence, this child under 18 years had a one-third interest of the initial interest.

6. I find the ownership of the property is as the wife described it.  That is, one-half of it is owned by the husband, wife and their oldest daughter but the remaining one-half is owned by the husband and wife.  The contribution to the acquisition of those various interests is more difficult to determine.

7. I find the husband’s mother and the other relative sold the property to the parties.  I find the mortgage was discharged from money at least in part, provided to the husband and the wife by the husband’s mother.  Normally, a court might treat that gift as a contribution by the husband but here, the evidence particularly of the wife, supports the conclusion that the husband’s mother was close with the wife. It was the wife who cared for her when she was ill.  I find therefore that this property interest was acquired by both husband and wife equally even though the husband portrayed the picture of him being the greater contributor because of his bigger earnings.

8. I propose therefore to treat that property as unencumbered but I must take into account that the daughter still has some form of interest.

9. The husband also sought to say that the cottage was affected by what he called a covenant.  The wife denied it still existed saying it had but when she was in Country K, there was only one year left on it. If it existed and contained some legal right, it entitled the holder the access to the property. There were two disputes here. First, the wife alleged that the covenant no longer existed having expired by the effluxion of time but secondly, the parties disagreed about the effect of the covenant on the value of the property.

10. The husband attached a “formal evaluation” as he described it, by a Country K bank prepared in November 2012 but as with other documents relied upon by the husband, there was no formal translation nor was there any affidavit by the person who claimed to have such rights under the covenant.  The wife did not accept the bank’s “evaluation” and the husband filed no affidavit about it from the bank.  The wife also disputed the covenant existed.

11. The husband was aware of the wife’s denial of his assertion regardless of what impact it may have had on the value or indeed the potential transfer of the property.  He chose not to call proper evidence bearing in mind my November warning about the need to prepare admissible evidence for the trial.  I therefore accept that the wife’s evidence is correct that there is no longer any covenant.

12. The second issue relating to the value of the cottage was similarly contentious because there was some form of valuation.  The husband explained that the difference between his view and that of the wife was because of the covenant which he claimed was not taken into account by the wife’s valuer.  That statement was a conclusion by him unsupported by any evidence and I reject it.  Absent that issue, the value seems to be about €130,000.  The interest of the husband and wife seems therefore to be about €108,000 (taking into account the daughter’s interest). 

13. The wife sought an order that she transfer the cottage to the husband.  I propose to make that order but I am conscious of the problems that the husband may have in registering the transfer because of the daughter’s interests.  That daughter is still a child but there is no doubt that he can sort that out with her when she attains her majority.

Share trading activities

1. The parties had a significant dispute over share trading activity.  This was all directed to the question of what appears to have been a substantial loss.  The wife’s claim was that she had wanted nothing to do with the share trading activities whilst the husband’s position was that the wife had signed documents and had access to the various bank accounts. 

2. The parties were very much at odds over who was in control and who made decisions.  The wife said no discussions occurred but she acknowledged that the husband tried to inform and involve her but she refused to be involved.  This was not just something that happened in the dying stages of their relationship but rather, over a number of years.

3. The wife conceded she did some initial banking for the share trading activities until the internet banking was used.  

4. I find it most likely that the husband did things his own way and generally ignored the wife.  That however, is not the end of the matter. Whilst the husband may have been the prime mover in this hapless venture, to the extent that the wife was of the view that this was entirely the husband’s responsibility, I do not make such a finding.  Her involvement was nominal but she could have stopped it because of her position as a trustee of the trust which controlled the share trading activity.  This exercise involved an accountant and the filing of taxation returns.

5. In In the Marriage of Kowaliw (1981) FLC 91-092 Baker J and later the Full Court in In the Marriage of Browne and Green [1999] FamCA 1483, said that the parties to a marriage share, although not necessarily equally, the fruits of their efforts to increase assets and conversely, losses incurred by such efforts. The principle is that a departure from that should occur only where there has been reckless, negligent or wanton use of the matrimonial assets, or where the assets have been dissipated with the intention of minimising their value or worth. Despite the recent view that the approach to the alteration of property interests may have changed as a result of the decision of the High Court of Australia to which I shall turn below, this principle still seems to me to be sound.

6. There is no evidence that the husband embarked on his trading career with the intention of diminishing the parties’ finances and it was acknowledged by both that the share market had dropped markedly. There is no evidence that the losses occurred because of reckless, negligent or wanton use of the assets by the husband.

7. The wife submitted that the losses incurred were directly attributable to the initiative and actions of the husband because she had explicitly disapproved of his participation. She may not have been a ‘willing participant’ as in Browne but she produced no evidence of pernicious behaviour on the part of the husband.

8. The wife must now share in the burden of the losses.

Family Trust

1. For the purposes of those share trading activities, the parties set up and settled a family trust after receiving accounting advice.  They were the trustees and appointors.  Whilst the wife did it “begrudgingly”, there is no suggestion of wantonness or any domination of her by the husband in respect of those activities.  If she was reluctant, she painted a different picture to the outside world.

The $3000 estate debt

1. In May 2011, the parties agreed to sell their house and they signed an agency agreement with a real estate agent.  They incurred $3000 in advertising costs.  At a time when there were interested buyers, the wife changed her mind and the property was withdrawn from sale.  The husband argued that there was $3000 still to be paid and it should be paid by the wife.  The wife agreed to contribute towards the $3000.  I propose to treat that debt as a joint liability even though the husband was critical of the actions of the wife.  Her explanation which I accept was that the children had decided that they wanted to stay in the house and accordingly, she changed her mind.  I find that reasonable and plausible in the circumstances and for the same reasons that I have attributed to the joint responsibility for the share trading losses, both parties should be responsible for this liability. In my view, the payment should be made by the husband, he having a greater access to cash resources than the wife and I will take it into account in the ultimate division when I calculate the division.

The mortgage account

1. Since separation, the mortgage account encumbering the home has varied in amount.  It was $197,900 in November 2007 and in October 2012, it was $105,000.

2. The husband deposited his wages into that account until October 2012. In addition, between January 2007 and the middle of 2009, he received $79,000 or thereabouts from Country K. The wife agreed that she thought this money came from the husband’s mother’s pension. Again, the problem can be seen where there is inadequate disclosure that hampered not only this Court in trying to work out what happened but also the other litigant. It was for that reason that Rule 13.14 of the Family Law Rules 2004 was put in place. In this case, the husband ignored it. I do not intend therefore to simply accept what the husband says. I am unsure why his mother would provide her pension. I am unsure whether that was a gift to both parties or just the husband. I am conscious that at some later period of the marriage, it was the wife who was the carer of the husband’s mother. The evidence therefore does not enable me to make a finding whether this was specific contribution by either party.

3. From the mortgage account, the husband drew $155,000 for his living expenses.  He said that he paid his child support into that account for the benefit of the wife and the children but how he did that bearing in mind that all of his wages were deposited, remains unclear.  The wife said that her child support had been paid but whether it was from wages or the drawdown on the mortgage also remains unclear.  I am prepared to find that it came from the husband’s wages.  Thus, he paid his wages into the account and then drew out the various payments and gave them back to the wife in the form of child support.

1. The husband also paid for solar panels on the house and some car repairs.  To the extent that those improved or conserved the values of the items, they are reflected in the current values and I need not deal with them further other than to address the issue of whether the husband had some obligation to the wife because of her entitlement to spousal maintenance.

2. From the separation until October 2010, the husband also lived in the property in what was described as a granny flat.  The wife placed her Centrelink entitlements into the drawdown account and then she withdrew her living expenses as she needed them.  The husband had significant charts prepared but as I indicated earlier, they had not been provided to the wife before she went into the witness box. Thus, his calculations could not be verified by her on the spot and it was a grossly unfair way of dealing with that sort of question.  More importantly, the financial contribution of the husband has to be offset in some way by the fact that he was living there as well as his obligation to support the wife.  I shall return to the spousal maintenance below.

Financial contributions

1. In respect of the financial contributions, I find the husband’s income was a significant contribution by him in the same way that the wife’s Centrelink payments were a contribution by her. The fact that the mortgage was reduced by the husband paying in more than the necessary payments means that the mortgage debt was reduced. That full reduction cannot be simply credited to the husband however because he lived in the property. If he had only paid what was necessary (whatever that may have been) he would have retained the excess in his savings. I cannot estimate that on the evidence of the parties. But even if it was in the vicinity of the amount that the husband claimed was more than his obligation, he would presumably have had about $150,000 or thereabouts in savings and it would be that sum of savings that the Court would have to contemplate dividing when the s 79(2) consideration was undertaken. As it is, that is exactly what the husband has done by withdrawing the $150,000 and (so he thought) putting it beyond the powers of the Court. I am satisfied that he has $150,000 in his control.

Non-financial contributions

1. The husband described his role as owner/builder of the five dwellings that were constructed during the relationship.  He did a lot of work. The wife did not challenge the fact that he spent the majority of his weekends and some week nights doing this work. In her responding affidavit, the wife said and the husband did not challenge her about it, she and other extended family members assisted him.  Each party descended into detail about the tasks that they fulfilled even to the extent of the percentage that they thought could be attributed to their respective roles.  All of that is entirely speculative and irrelevant.  Each party brought to the relationship different tasks and different skills.  Whilst the husband was spending long hours at work and on the parties’ homes, the wife was caring for the family.  The husband did not dispute that.  Nothing I have read on the affidavit material or heard from the parties themselves would suggest their contributions (financial or non-financial) were exceptional or indeed unusual.

The wife’s interest in property in Country K

1. The husband alleged that the wife had an interest in a property in Country K.  The wife agreed that her parents had put a property in her name and two siblings as an inheritance but the property was to be renovated by her father.  His ill health changed that and they decided to sell the property about three years ago.  The wife proffered that it should have been in her financial statement but in any event it was only worth $9000.  It is an interest in which she has a nominal value and I propose to include it as one of her assets. On any view however, this property had nothing to do with either party.

Conclusion

1. Thus, doing the best I can, the financial position appears to be as follows including taking into account the concessions of the parties made in November 2012 which were noted on the court orders that day. 

The husband’s financial position

1. The husband has the following interests:

   ·    An interest with the wife as a joint proprietor in B Street, Suburb A.  The whole property is worth $465,000 and is subject to a mortgage of $287,000;

   ·    There is an interest in the cottage in Country K worth about $125,000 but it would seem that the parties’ interest taking into account the daughter’s entitlement, is $104,000;

   ·    The husband has a car and trailer worth $7,000;

   ·    The husband has an interest in the apartment in Country K $68,000;

   ·    The husband has $150,000 in cash currently being held by his companion;

   ·    The husband has some Country G money worth $5063;

   ·    The husband has a bank account in Country K with $1,300 in it;

   ·    The husband has an interest with the wife as a joint proprietor of the timeshare with $12,000 worth of credits;

   ·    The husband with the wife as joint trustees and joint appointors has control over the family trust interest which the wife asserts was worth approximately $11,000.

The wife’s position  

1. The wife’s interests seem to be as follows:

   ·The interest with the husband in B Street, Suburb A subject to the mortgage;

   ·The interest with her sisters in a property in Country K $9000;

   ·A car $12,000 which seems to have been substantially recently repaired and for which some of the mortgage account drawdown was used;

   ·A piano about which there was disagreement as to value and for which I am not prepared to simply accept the wife’s guess and the husband’s assertion as an admission against interest by either of them.

Superannuation

1. The parties’ superannuation was:

   ·    The husband $61,500;

   ·    The wife $9800;

   ·    An unquantifiable joint interest of $17,700.

2. I have not ignored nor forgotten the $3,000 estate agent debt.

3. I have referred to the joint self-managed superannuation fund interest as joint because I do not know what the member accounts contain. I have accepted that neither party disputes that value.

4. The parties agreed that there should be a splitting order in the wife’s favour of $49,378 and thus she will retain that from the husband’s superannuation interest as well as her own $9800.

The approach to division of property 

1. The High Court of Australia in Stanford v Stanford [2012] HCA 52 outlined three fundamental principles to be applied when exercising the power under s 79 of the Act. First, the court must identify the existing legal and equitable interests of the parties and their respective financial resources. I have done that below based upon the best evidence available to me.

2. Secondly, the court must consider under s 79(2) whether in all the circumstances it would be just and equitable to make an order. In Stanford, the High Court emphasised that the starting point should not be a presumption that any alteration must occur. In this case, the threshold  is satisfied because of a number of things:

   ·the parties both seek an order for the alteration of their respective property interests thereby indicating that neither currently sees the interests they hold as being a just and equitable outcome;

   ·the husband has been excluded from the use of his entitlement to a joint interest in the home and the wife intends that exclusion to be permanent;

   ·some of the interests particularly in Country K may be in the husband’s name but the wife claims an equitable interest by virtue of her contribution in other senses than just a financial contribution to that property;

   ·Importantly, to leave the interests as they are in the Suburb A home would be unfair to the husband because he does not have the use of that legal interest and at the moment, he has a legal obligation to the mortgagee.

   ·in respect of some of their assets such as vehicles, they have an interest which is undefined but from which they have each been excluded.

   Thus it is just and equitable here to make an order to alter the existing interests.

3. Thirdly, the application of ss 79(2) and 79(4) must not be conflated. Thus, once the court is satisfied under s 79(2) that it is just and equitable to make an order, the next step is to consider what order should be made by examining 79(4).

4. The assessment of these various contributions including those of homemaker and parent can be undertaken on either an asset by asset basis or globally.  Here, even though there have been assets acquired in Country K which might make an asset by asset approach attractive, I am not at all confident that I can say that those assets have been isolated or even separated from the various other assets of the parties. Indeed, the wife referred to the husband’s mother giving her money albeit in the husband’s name and there is the evidence of money borrowed and payments being made to various debts associated with those Country K assets.

5. The modest number and type of assets along with the significant homemaker and parent role of the wife makes a global assessment fairer. In Mallet v Mallet (1984) 156 CLR 605, the High Court made clear that the court is not bound by strict formulae in making this assessment and said that s 79 confers a wide, although not unfettered, discretion in that assessment (see Wilson J at 636).

6. Having decided that it is just and equitable to make an order and generally setting out how those assessments can be viewed, I turn to the finer detail.

Discussion

1. The parties have described things such as motor cars and a trailer and also the Country G funds as property that they have in their possession but in reality, they came out of the joint resources during the time that the parties were together even if the husband physically paid for them.  The husband paid for the wife’s car and it was registered in her name.  It would not be just and equitable to simply leave the cars where they were without some adjustment having regard to the fact that although registered in the individual’s names, the property actually was jointly owned.

2. I turn then to s 79(4) to look at the various considerations.

3. All of the evidence points to the fact that the husband was the major financial contributor and the wife the major non-financial contributor in terms of the welfare of the family.  The evidence shows that the husband also contributed significantly towards the building of properties but then so did the wife and other members of the family.

4. Undoubtedly, the parties ended up with assets as a result of the largesse of their respective extended families.  The extent to which those contributions can be seen as contributions by the parties themselves is blurred by the fact that family resources were used to acquire and to maintain those assets but on the evidence, it is impossible for me to be precise and I can only make the assessment in a general way.

5. For the reasons above, I find the following:

   ·the financial contribution by the husband to the acquisition, conservation or improvement of all of the property of the parties was greater than that of the wife;

   ·the contributions of the parties other than the financial contribution to that same property has been indistinguishably equal. Whilst the husband was building houses, the wife was involved even if not to the same physical extent but she was doing other things which involved the conservation of that property;

   ·the wife by her homemaker and parent role made a greater contribution than did the husband towards the welfare of the family including towards the physical support of the children subsequent to separation . The husband’s view seemed to be that he contributed to that role by the payment of child support but the homemaker and parent role is much more than that. The unchallenged evidence is that the wife undertook most of those tasks;

   ·Neither party’s earning capacity will be affected by the orders I propose because no income-generating asset of value is being altered such as to affect the parties’ income;

   ·In relation to s 79(4)(e) and by reference, s 75(2) so far as they are relevant:

   (a)There are no health or age considerations here that would affect the respective parties’ financial positions;   

   (b)Each of the parties has capacity for gainful employment;       

   (c)The husband has consistency of employment and regularity of income;           

   (d)The wife has a course to complete which may entitle her to income but I am satisfied that it will not be as great as that currently earned by the husband;       

   (e)The wife has the control of the three children of the marriage and will have so for years to come with little assistance of a physical nature from the husband;

   (f)The husband’s attitude towards the payment of child support was mystifying but I am satisfied that on the orders that I propose to make, the wife will now rectify the inconsistency of payment and have the Child Support Agency collect the payments;     

   (g)Neither party has the responsibility to support any other person other than the children and although it would appear that the husband has some relationship with another person, it was not suggested that I should treat that as a responsibility;

   (h)The wife is reliant upon government benefits and therefore the tax payers are contributing significantly towards the support of this family;

   (i)The Court cannot replicate the standard of living they enjoyed when working as a functional family but the wife continues her parenting role and will do so for some years yet. It is important that she have a house in which to live thus being able to properly fulfil her obligation to the children. I know little about the husband’s living circumstances but it was not suggested that he does not have sufficient resources to be able to afford accommodation. In the circumstances, the parties’ living circumstances are reasonable;      

   (j)This is a long marriage with three children and its duration has affected the wife’s capacity to get into the workforce because of her obligations;           

   (k)The wife has sought (indirectly) that she be entitled to continue her role as a parent and having regard to the ages of the children, that is not unreasonable;

   (l)I do not know the financial circumstances of any person with whom the husband is living and the wife is only residing with the children;

   (m)The orders that I propose to make will require the wife to reconsider her capabilities of keeping a house for the sake of the children but that is a matter that she will no doubt consider when she reads the outcome;           

   (n)Child support is being paid by the husband as I have indicated above.

6. Two of the matters that are required to be considered by the Court in s 75(2) are the extent to which the payment of maintenance will increase that person’s earning capacity by enabling them to undertake a course of educational training so as to otherwise obtain an adequate income.  A second factor is the extent to which that party has contributed to the income, earning capacity, property and financial resources of the other party.

7. Those two factors are important in this case.  The husband’s position was clear in relation to the fact that the wife should be able to return to employment.  The wife’s position was that she was affected by her responsibilities to the children and now, having regard to her age, her return to study is not unreasonable.  She proposes to have employment arising out of that study.  She has contributed significantly to the assets of the parties as a result of the fact that she was caring for the children whilst the husband was earning an income and contributing to the assets by his efforts as he described them.  In the circumstances, those are significant features which will be taken into account in any adjustment.

8. The s 79(4)(e) factors largely look at the economic issues relevant to the future of each party. In my view, the wife is economically worse off than the husband.

9. I do not propose to make any adjustment for the fact that there had been losses by the parties as a result of the share trading activities.  I have given reasons for this above. 

10. I do not propose to make any adjustment for the fact that the husband paid his wages into the household account having regard to the various activities that occurred during that period of time and the obligations that the husband had (as I have found below ) to pay spousal maintenance.  In addition, the evidence is that the wife has been the major carer of the children subsequent to separation and that the husband’s time with them has been sporadic.  That is a contribution by the wife which would significantly offset the claim by the husband for his greater financial contribution.

11. In my view, no adjustment is called for in relation to the husband’s income contribution.

12. Having regard to the state of the evidence, in my view, I can find that the contributions of the parties were equal.

13. I find that it is just and equitable to make a further adjustment because of s 79(4)(e) and to the extent that it is necessary to quantify that in percentage terms, I would assess that extra as 15 per cent.

14. A just and equitable outcome for these parties is therefore that the total assets of them should be divided as to 65 per cent to the wife and 35 per cent to the husband.

The necessary adjustment

1. The parties did not dispute who should take what assets and there are few adjustments to be made to the legal interests. The division however overall requires the wife to have more assets given to her than she currently has. On the percentage approach to which I referred, the wife must be given a further $151,000. The husband has not only that sum but other assets against which he could make some adjustments to meet that demand. Notwithstanding the detail of the wife’s application which was filed in May 2012 at which time, the husband had not taken the $150,000, in my view, on the basis that she keeps the home, takes over the mortgage, retains the time share and her vehicle and chattels, a payment of an extra $151,000 by the husband is a just and equitable outcome to both. This is not intended to be a precise mathematical calculation and in the circumstances, I find it just and equitable for the reasons earlier outlined that the husband should pay and indemnify the wife in relation to the estate agency debt of $3,000. In my view, by the adjustment I have done, the wife is indirectly contributing to that debt but the husband should now pay it.

Superannuation

1. Although the parties agreed upon how it should be treated, I think it is important to also acknowledge that superannuation in a case such as this is not to be treated like the other assets.  As was described in Coghlan [2005] FamCA 429, superannuation is another species of property. It is important to acknowledge that both the direct and indirect contributions to the parties’ respective superannuation entitlements would follow the same contribution pathway as have the other assets. It would not be appropriate in the circumstances to make a further adjustment. Having regard to the way in which the parties have decided to resolve that issue as between themselves, in my view it is a just and equitable outcome to leave the superannuation split the way the parties thought it should be. That is that from the husband’s superannuation fund, there should be split the sum of $49,378 into a fund of the wife.

2. I am satisfied that the outcome reflected by the division is just and equitable to both parties.

Spousal maintenance

1. In relation to spousal maintenance, the wife said in evidence that she had been studying full-time.  She said she attempted to find employment “several years ago” and with little available to accommodate the wishes of the children for her to be home when they arrived from school, she did not work.  She took on studies accordingly and anticipated that she would have obtained a paid position at the conclusion of her course.  The husband’s only comment was that the wife had the physical and mental capacity to seek employment but he did not challenge the wife’s evidence.

1. It was the husband’s case (initially reticently put but then more clearly) because he and the wife had divorced and he paid child support, he no longer had any financial obligation to her. I explained that he was not correct in that view.

2. Section 72(1) of the Act provides that, relevantly, if the wife as the claimant is unable to adequately support herself, the husband is liable to maintain her as far as he is reasonably able to do so. The court must take into consideration the matters in 75(2)(a-q) and I have done that generally above. The jurisdiction to make an order was enlivened appropriately when the application was filed and the wife’s application had always been unresolved and outstanding.

3. I find that the wife did qualify during the post-separation period for spousal maintenance and I am satisfied that the husband had the capacity to pay that sum having regard to his own living requirements. He has done so in some ways by contributing his income to the joint account of the parties. His complaint about the wife spending his earnings therefore falls away as he would have been obliged to support her anyway. It was not suggested that the wife frittered the money away but it would seem on the wife’s evidence, she spent it on the family.

4. Because of the property orders I propose to make, I would find that once the alteration of property interests occurs, the wife will have a home, a small mortgage, regular child support and the capacity in the reasonable future to have paid employment. She is therefore able to adequately support herself and will no longer be entitled to maintenance.

I certify that the preceding One Hundred and Fifteen (115) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 4 March 2013.

Associate: 

Date:  4 March 2013