Reza & Reza - [2023] FedCFamC2F 179

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Reza & Reza [2023] FedCFamC2F 179

File number(s): SYC 677 of 2020

Judgment of: JUDGE MORLEY

Date of judgment: 24 February 2023

Catchwords:
FAMILY LAW – property – application for property order under section 79 – only asset to be considered in application being proceeds of sale of former matrimonial home – contributions prior to and during marriage equivalent between spouse parties – contributions post-separation significantly favour Wife – further adjustment appropriate in Wife’s favour.

FAMILY LAW – property – Husband a discharged bankrupt – trustee of the Husband’s bankrupt estate not a party to the proceedings as at time of final hearing – former trustee of the Husband’s bankrupt estate a party to the proceedings at time of final hearing – matrimonial asset pool only comprised of the proceeds of sale of the former matrimonial home – former trustee expended sums from the net proceeds of sale for costs and disbursements – Court finds that such expenditure was unacceptable and sum added back.

FAMILY LAW – property – previous undefended bankruptcy proceedings in Adelaide – bankrupt person resident in NSW – bankrupt estate comprised of assets in NSW – Federal Circuit Court of Australia sitting Adelaide – orders made pursuant to Law of Property Act 1936 (SA).

Legislation:
Bankruptcy Act 1966 (Cth) ss 58, 149, 153, 160.

Bankruptcy Amendment Act 1999 (Cth) s 27.

Conveyancing Act 1919 (NSW) s 66G.

Family Law Act 1975 (Cth) ss 75, 79, 79A, 90AB, 90AE, 106A, 117.

Federal Circuit Court of Australia Act 1999 (Cth) s 16.

Judiciary Act 1903 (Cth) s 79.

Law of Property Act 1936 (SA) ss 69, 70.

Victims Rights and Support Act 2013 (NSW)

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13.

Cases cited:
Dickons & Dickons [2012] FamCAFC 154

Fontana & Fontana [2018] FamCAFC 63

Grier & Malphas (2017) 55 Fam LR 107

Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395

In the Marriage of Harris (1991) 104 FLR 458

Jabour & Jabour [2019] FamCAFC 78

Kennon & Kennon (1997) 139 FLR 118

Needham & Trustees of the Bankrupt Estate of Needham [2017] FamCAFC 94

Stanford & Stanford (2012) 247 CLR 108

Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor [2009] FamCAFC 20

Division: Division 2 Family Law

Number of paragraphs: 226

Date of last submissions: 6 June 2022

Date of hearing: 15 July 2021, 11 March 2022

Place: Sydney

Counsel for the Applicant: Ms Haughton

Solicitor for the Applicant: Avondale Lawyers

Solicitor for the First Respondent: The First Respondent did not appear

Counsel for the Second Respondent: Mr O’Brien

Solicitor for the Second Respondent: Birtsos Legal Pty Ltd
ORDERS

SYC 677 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
MS REZA

Applicant

AND:
MR REZA

First Respondent

MR VINNEY AS TRUSTEE OF THE BANKRUPT ESTATE OF MR REZA

Second Respondent

order made by:

JUDGE MORLEY

DATE OF ORDER:

24 February 2023

THE COURT ORDERS THAT:
1.Pursuant to section 79 of the Family Law Act 1975 (Cth):
(a)Birtsos Legal are directed to distribute the net proceeds of sale of the property located at B Street, Suburb CNSW and being the whole of the land more particularly described in Certificate of Title Folio Identifier Lot … in Deposited Plan … as follows:
(i)The sum of $245,573.23, as well as 80% of any interest having accrued on the net proceeds of sale to the Applicant Wife.
(ii)The sum of $67,643.31, plus 20% of any interest having accrued on the net proceeds of sale to the Husband’s trustee in bankruptcy

by no later than 4:00PM on 3 March 2023.
(b)The Applicant Wife is the sole owner in law and in equity as between herself and the Respondent Husband and his trustee in bankruptcy of all real property, personal property, financial assets, and financial resources currently in her power, possession, or control other than as dealt with specifically elsewhere in this order, including but not limited to any superannuation entitlements and furniture, personal possessions, chattels, and items of personalty.
(c)The Respondent Husband is the sole owner in law and in equity as between himself and the Applicant Wife of all real property, personal property, financial assets, and financial resources currently in his power, possession, or control that is not property in the Husband’s bankrupt estate, other than as dealt with specifically elsewhere in this order, including but not limited to any superannuation entitlements and furniture, personal possessions, chattels, and items of personalty.

2.That in the event either party refuses, fails or neglects to execute any document necessary to put these orders into effect five (5) business days after being requested to do so, and any such refusal, failure, or neglect is proved by affidavit/s filed and served by or on behalf of the party alleging this, pursuant to section 106A of the Family Law Act 1975 (Cth) the Court appoints a Registrar to execute all deeds and documents on behalf of the party or parties refusing, failing, or neglecting to execute the document and to do all things necessary to give validity and operation to all such deeds so as to effect these orders.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Reza & Reza has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MORLEY:
INTRODUCTION

These Reasons relate to property settlement proceedings under section 79 of the Family Law Act 1975 (Cth) (‘the Act’) between the Applicant Wife, Ms Reza (‘the Wife’), the Respondent Husband, Mr Reza (‘the Husband’), and the Second Respondent, Mr Vinney as Trustee of the Bankrupt Estate of Mr Reza (‘the former trustee’).
The Husband and the Wife commenced their cohabitation at the time of their marriage in late 1994. They separated under the same roof in 2013.
There are six children of the parties’ marriage, four of whom were still minors at the time the final hearing ended:
(1)W born 2005 (17 years)
(2)X born 2006 (16 years)
(3)Y born 2007 (15 years)
(4)Z born 2008 (14 years).
The older children are Mr D born 1997 (26 years) and Mr E born 1998 (24 years).
The Husband was made bankrupt by a sequestration order made on a creditor’s petition presented by J Pty Ltd in early 2010. The proceedings were commenced by the Wife on 3 February 2020, at which time I presume (but do not specifically know from the evidence) the Husband was still an undischarged bankrupt, only having filed his Statement of Affairs on 1 May 2018.
The former trustee was appointed as the Husband’s trustee in bankruptcy by a Certificate of Appointment issued by the Australian Financial Security Authority (under statute, the Official Trustee in Bankruptcy) (‘AFSA’) in 2018. Prior to that appointment, AFSA had been the Husband’s trustee in bankruptcy. The nomenclature of ‘former trustee’ is used in this judgment as at the time of the final hearing, the former trustee was no longer trustee of the of the Husband’s bankrupt estate, and there had been no application by AFSA in its guise as the Official Trustee to be substituted as a party as the then-trustee of the Husband’s bankrupt estate.
The former trustee ceased to be registered as a trustee in bankruptcy in early 2021 and thereafter, by force of section 160 of the Bankruptcy Act 1966 (Cth) (‘the Bankruptcy Act’), the Official Trustee (AFSA) once again became trustee of the Husband’s bankrupt estate.
The Husband took no part in the proceedings at any time. He filed no documents and he did not appear on any occasion the matter was before the Court. There was no great point to his participating in the proceedings in any case, as there was no relevant property owned in law or in equity by the Husband – his interest in the matrimonial home, the only asset of any real value, had vested in his trustee in bankruptcy pursuant to section 58 of the Bankruptcy Act at the time he became a bankrupt.
The final hearing took place on 15 July 2021 and 11 March 2022, with written submissions being filed pursuant to orders thereafter, and judgment reserved by order on 9 May 2022. In her affidavit sworn 9 July 2021 and filed 11 July 2021, Maria Birtsos, solicitor, who was the solicitor on record for the former trustee from the commencement of the proceedings, gave evidence that on 4 March 2021 she was instructed by the former trustee that:
… the file had been referred to the Official Trustee and to contact AFSA for further instructions in relation to the Estate.
She deposes that:
On 17 March 2021, I received instructions from AFSA to continue to act on behalf of the Official Trustee until final orders had been made.
Mr O’Brien of counsel appeared for the former trustee instructed by Ms Birtsos. On both the case outline document filed 15 July 2021 and the written submissions filed 2 May 2022 prepared by counsel, the Second Respondent was named as “Australian Financial Security Authority as Trustee for the Bankrupt Estate of [Mr Reza]”.
The clear meaning of both the oral and written submissions made for the ‘Second Respondent’ is that they are made for the former trustee. Ms Birtsos asserted that she was acting for AFSA at the time of the final hearing, but AFSA was not and is not a party to the proceedings, whilst the former trustee remains a party to the proceedings, but entitled only to pursue a case protecting its third-party interest as a creditor of the Wife of a costs order made on 18 June 2019 and not as a creditor of the Husband’s bankrupt estate in relation to any statutory right of the former trustee to be paid its costs and disbursements for acting as trustee of the Husband’s bankrupt estate between its appointment on 14 June 2018 and ceasing on 23 February 2021. That is a matter between the former trustee and the Official Trustee as trustee of the Husband’s bankrupt estate and governed by applicable legislation and regulations.
At no time was any order made removing the former trustee as a party and adding ‘Australian Financial Security Authority as Trustee of the Bankrupt Estate of [Mr Reza]’ as a party to the proceedings. At no time was any application made on behalf of any of the three parties for such an order. There was no reason for the Wife to make any such application – in fact, it would be contrary to her interest in the proceedings to do so, as without the trustee of the Husband’s bankrupt estate being a party to the proceedings at final hearing, the matter was undefended as between the Wife and the trustee of the Husband’s bankrupt estate (the former trustee, as an interested third-party entitled only to protect his own interests and not to advocate on behalf of the creditors of the Husband’s bankrupt estate).
The first question asked of Ms Birtsos, solicitor during her cross examination by Ms Haughton was as to who instructed Ms Birtsos in the proceedings. Ms Birtsos responded:
I have a contact at AFSA.
Ms Haughton then asked:
So it’s not Mr Vinney?
to which Ms Birtsos replied
It’s not, no.
Ms Haughton then put to Ms Birtsos:
So you represent a person not a party to these proceedings?
Ms Birtsos responded:
Correct.
While it is my usual practice to detail the course of proceedings in a judgment under a separate heading early in my Reasons, the course of events in this case will be made clearer if that detail is included with the overview of the evidence generally.
At the final hearing, the Wife was represented by Ms Haughton of counsel. The former trustee was represented by Mr O’Brien of counsel. There was no appearance by or on behalf of the Husband.
THE MATERIALS RELIED UPON BY THE PARTIES.
The Wife relied upon the following material:
(1)Her Case Outline document;
(2)Her Further Amended Initiating Application filed 14 April 2021;
(3)Her affidavit affirmed 31 January 2020 and filed 3 February 2020 (the Wife’s first affidavit);
(4)Her affidavit affirmed and filed 13 March 2020 (the Wife’s second affidavit);
(5)Her Financial Statement sworn or affirmed and filed 9 July 2021;
(6)Her written submissions filed 28 March 2022; and
(7)Her written submissions in reply filed 3 June 2022.
The Wife relied upon the following exhibits:
(1)Exhibit A1 – NSW Police Force COPS reports relating to the Husband from mid- 2015 to mid- 2020 (paginated in bold in the top right as pages 505 to 522);
(2)Exhibit A2 – Past Medical History relating to the Wife from late 2019 to early 2021 (paginated in bold in the top right as pages 524 to 526;
(3)Exhibit A3 – letter dated mid- 2020 from Dr F of H Health Service addressed “To Whom It May Concern” in relation to the Wife;
(4)Exhibit A4 – letter dated mid- 2020 from Ms G, registered psychologist, to Dr F in relation to the Wife;
(5)Exhibit A5 – Certificate of Injury under the Victims Rights and Support Act 2013 (NSW) in relation to the Wife dated mid-2020;
(6)Exhibit A6 – bundle of correspondence between the parties’ solicitors (paginated in bold in the top right as pages 535 to 552);
(7)Exhibit A7 – email of 18 August 2021 from the solicitors for the former trustee to the solicitors for the Wife, and copy letter of 17 November 2020 from Marsden’s Law Group to the Wife’s solicitors; and
(8)Exhibit A8 – an extract of the transcript of the proceedings on 15 July 2021 from 3:11PM until 5:05PM.
The former trustee relied upon the following materials:
(1)Case Outline document prepared by counsel dated 14 July 2021 and filed 15 July 2021;
(2)Response document filed 3 March 2020;
(3)Affidavit of Mr K sworn and filed 2 March 2020;
(4)Affidavit of Maria Birtsos sworn 2 March 2020 and filed 3 March 2020;
(5)Second affidavit of Maria Birtsos sworn 2021; and
(6)Written submissions filed 2 May 2022.
The former trustee also relied upon Exhibit R1 being:
(1)A Trust Ledger with ANZ for Birtsos Legal Law Practice Trust Account for the client Q Services as at 14 July 2021 (2 pages); and
(2)Email correspondence between Birtsos Legal and the former trustee on 18 and 19 February 2021 (3 pages).
The Wife was cross examined by counsel for the former trustee and re-examined by counsel for the Wife. Ms Birtsos and Mr K were both cross examined by counsel for the Wife, and Ms Birtsos was re-examined by counsel for the former trustee. I have reviewed the oral evidence including on sound recording for preparation of these Reasons.
Both oral and written submissions were made by counsel on behalf of the Wife and counsel for the former trustee.
THE COMPETING PROPOSALS OF THE PARTIES.
The Wife sought the following orders in her Further Amended Initiating Application filed 14 April 2021:
(1)An order pursuant to rule 10.13(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), that orders 1, 2, 10(d), 10(e) and 11 of the orders made on 18 June 2019 in the Federal Circuit Court of Australia, Adelaide Registry in proceedings AG 115/2019 (‘the Adelaide proceedings’) be set aside.
Rule 10.13(1)(a) provides:
(1) The Court may at any time vary or set aside an order, if:
(a) It was made in the absence of a party; or …
(2)An order that the Wife receive 100% of the net proceeds of sale (after payment of sale expenses) from the sale of the property located at B Street, Suburb C in the State of New South Wales and being the whole of the land more particularly described Certificate of Title folio identifier Lot … in Deposited Plan …;
(3)That the Wife and the Husband be solely entitled to the exclusion of each other and the former trustee all property in their possession as at the date of these orders (the furniture, personal possessions, and alike chattels) in the “real property” [sic] being deemed to be in the possession of the Wife and the Husband “respectfully” [sic];
(4)“Superannuation remain the sole property of the named member.”
(5)“Insurance policies remain the sole property of the Owner/Beneficiary named in the policies.”
(6)“Each party be solely liable for and indemnify the other against any liability encumbering any item of the property to which that party is entitled pursuant to these Orders, unless otherwise specified in these Orders.”
(7)That the former trustee pay the costs of and incidental to this application on an indemnity basis or such other basis as the Court determines.
The Wife also sought the usual order under section 106A of the Act.
There is no evidence of any superannuation entitlements of either spouse party. There is no evidence of any insurance policies owned in any manner by any of the parties that would be in the nature of property within the meaning of that term in the Act.
The Husband sought no orders in the proceedings.
The former trustee sought the orders in the Response filed 3 March 2020 and the case outline document filed 15 July 2021, that the Wife’s application be dismissed and that the Wife pay the costs of the former trustee.
However, in the written submissions on behalf of “the trustee in bankruptcy” filed 2 May 2022, counsel and instructing solicitor for the former trustee submitted that by way of orders, the Wife should pay to the former trustee:
(1)$6,568.40 as one half of the former trustees legal costs pursuant to the “reasonable costs” order made on 18 June 2019 in proceedings between the former trustee as Applicant and the Husband and Wife as respondents in the Adelaide proceedings (in circumstances detailed later in these Reasons);[1] and
(2)Half of the legal costs incurred by the former trustee in obtaining and enforcing a Warrant of Possession in the Adelaide proceedings, being $16,322.65.[2]
[1] Written submissions [40(a)].
[2] Written submissions [40(b)].
No costs order was made in relation to these latter costs (the circumstances of the matter also being detailed later in these Reasons).
THE EVIDENCE
The Wife was born in 1973 in Australia and was 48 years of age at the time of final hearing. The Husband was born in 1972 and was 49 years of age at the time of the final hearing.
The spouse parties were married and commenced their cohabitation in 1994 in Country M and returned to Australia to live in 1995. They separated in 2013 but continued living under the same roof, with the Husband either living in the lounge room of the matrimonial home at Suburb C and the Wife continuing in the main bedroom as the Wife proposes in her first affidavit, or the Husband converting the garage of the property into his bedroom and living separate from the house as the Wife deposed in her second affidavit.
There are six children of the marriage, four of whom were still minors at the time of the final hearing, as detailed in the introduction to these Reasons.
At the time of hearing, all six children continued to reside with the Wife.
When the parties returned to Australia from Country M in 1995, they lived with the Wife’s parents for approximately one year. Then, in 1996, the parties moved into a rented house in L Street, Suburb N NSW.

In 1997, the parties purchased the former matrimonial home at B Street, Suburb C NSW (‘the Suburb C property’) for about $235,000. The deposit was either borrowed from or gifted to the parties by a friend, Mr U, and the parties borrowed the balance of purchase price on a loan account with O Bank, secured by registered mortgage on the property.
The parties and each of the children when born lived in the Suburb C property, continuing through separation of the parties in 2013, until they were removed from the property by the Sheriff in early 2020 following the making of orders for vacant possession of the property to be delivered up to the Husband’s trustee in bankruptcy, consequent upon the Husband’s bankruptcy detailed below.
From 1998 until about 2017, the Husband worked as a tradesperson and from his earnings paid the required payments on the loan account secured by mortgage on the Suburb C property. In about 2017, a pre-existing injury suffered by the Husband in 1972 deteriorated to a state where he was no longer able to work as a tradesperson or any seek employment. From that time forward, the Husband was in receipt of a Newstart allowance.
Throughout the parties’ marriage and continuing up to the time of hearing, the Wife was not in paid employment and was the homemaker for the family unit and primarily responsible for the parenting of each of the children.
At some time in about 2018, it came to the Wife’s attention that the Husband had ceased making the required payments on the loan account secured by mortgage. At that time, the required payments were about $1,900 per month, but the Wife was able to enter into an arrangement with O Bank on a hardship plan to pay $1607 for seven months, on income at that time and continuing up to the hearing being the Family Tax Benefit of $897 per fortnight.
The Husband has not paid child support at any time. The Court does not have the benefit of any financial information from the Husband as he has filed no Financial Statement in the proceedings. The Wife deposes in paragraph 26 of her first affidavit that:
[The] Husband’s current Newstart allowance is $549 per fortnight.
No evidence was given on hearing as to why the Wife, as a mother and day-to-day carer for four minor children, and carer for a severely disabled adult child, Mr E, receives income only by way of the Family Tax Benefit and not by way of any form of pension, such as the Parenting Pension and/or Carers Pension.
At the commencement of the parties’ cohabitation, the Wife held no assets and had no liabilities. The Husband held no assets other than a motor vehicle that was “ultimately repossessed”.
The Wife deposes in paragraph 31 of her first affidavit that:
During the marriage I paid the electricity and household bills including land rates.
Whilst there was no direct evidence to the point, I must assume that the Wife made those payments from Centrelink benefits such as the Family Tax Benefit received by her as carer for the children, as she was at no relevant time in paid employment.
Family violence
Tragically for the family, the Husband gambled (impliedly most unsuccessfully), abused alcohol, and used illicit drugs. The Husband commenced using illicit drugs prior to ceasing employment in 2017. After the parties separated in late 2013, the Husband would still enter the house in an intoxicated condition and subjected the Wife to physical family violence in 2015, 2016, and 2017, including an assault on the Wife which lead to the Husband being imprisoned.
In relation to the family violence perpetrated by the Husband on the Wife, it was submitted by counsel for the Wife that the Wife’s contributions argument included consideration of the principles set out by the Full Court of the Family Court of Australia in Kennon v Kennon (1997) 139 FLR 118, where at page 24, their Honours Fogarty and Lindenmayer JJ said:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79. We prefer this approach to the concept of ``negative contributions’’ which is sometimes referred to in this discussion.
…
However, it is important to consider the ‘floodgates’ argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters – a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.
However, in our view, s 79 should encompass the exceptional cases which we described above. It would not be appropriate to exclude them as a matter of policy because of this risk. It is a matter of commonsense for the lawyers involved and, where that may not be sufficient, it is a matter for a firm hand by the Court at an early stage when a case appears to raise those issues.
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions). Similarly, in Killick v Killick (1997) 21 Fam LR 331 at 341, in proceedings under the De Facto Relationship Act 1984 (NSW), the Court of Appeal rejected the argument for the male partner that incidents of infidelity during the relationship by the female partner should be taken into account as diminishing her contribution as homemaker or parent.
At page 67, Baker J said:
The incidence of domestic violence in a marriage would generally be a relevant factor when a court comes to assess contributions for the reason that the contributions made by a party who has suffered domestic violence at the hands of the other party may be all the more onerous because of that violence and therefore attract additional weight.
The evidence of the Wife in relation to domestic violence perpetrated upon him by the Husband is as follows:
•There have been periods of domestic violence during the marriage. No violence has been addressed towards children.[3]
•In or about the period of 2017 Husband assaulted me and was charged with the assault he was sentenced to jail in [a] correctional facility […].[4]
•… [Mr Reza] would be aggressive and violent towards me.[5]
•There have been periods of domestic violence even after separation and police were called on many occasions due to domestic violence towards me in 2015, 2016 and 2017, which included an assault on me […] which caused [Mr Reza] to be sent to gaol.[6]
[3] First affidavit, paragraph 22.
[4] First affidavit, paragraph 24.
[5] Second affidavit, paragraph 8.
[6] Second affidavit, paragraph 12.
The Wife relies on Exhibit A1 being COPS entries produced by NSW Police Force on subpoena relating to the Husband for incidents between mid-2015 and mid-2020.
The COPS entry for mid-2015 relates to an incident at the family home during which the Husband was alleged by the Wife to be affected by alcohol and drugs, and during an argument to have pushed the Wife. One of the children was awoken by the sound of the arguing and came to his mother’s assistance and was also pushed by the Husband. The Husband then obtained a plastic petrol container from his car and a “lighter” and threatened to harm himself by burning. When police attended they found him in the house in possession of the container of petrol and the “lighter” and he was arrested, then conveyed to hospital, sectioned, and retained as an inpatient for several weeks. A provisional apprehended domestic violence order was issued by an authorised police officer in mid-2015 for the protection of the Wife. An interim order was made in late 2015 and a final order in early 2016 at Suburb P Local Court.
The COPS entry for late 2015 details an incident occurring the previous day during which the Husband confronted the Wife in the lounge room of the family home whilst he was holding a weapon, which he used to threaten the Wife, saying:
If I find out you’ve called the police, I’ll kill you.
After saying these words, the Husband put the weapon down and went into the backyard of the property. One of the children saw and heard the whole incident. The Husband then returned to where he had been some hours beforehand, and yelled out to the Wife:
That’s it, I’m gonna go.
The Wife took this as an indication by the Husband that he intended to commit suicide there and then. Police were called and when they attended the Husband:
… jumped out a front window of the address and fled on foot.
He was apprehended, conveyed to hospital, and scheduled. The Husband was charged, though the particular charge matters and outcome is not listed in the exhibit. He remained an inpatient in a mental health ward for some time.
The COPS entry for late 2015 details an incident at the family home at that time 2015 when the Husband was on “gate” leave from the mental health unit at the hospital. The Husband slapped the Wife’s face causing her to fall and occurred in the presence of several of the children. The eldest child, Mr D, who was at that time 18 years of age, went to his mother’s assistance, and the Husband then left the property. Police were called, and the Husband returned to the mental health unit. When questioned by police, the Husband admitted assaulting the Wife:
… by pushing her on the chest with both hands, then as he raised his hands, his hand touched her nose.
The Husband was again charged, though the outcome is not in evidence.
The COPS entry for a short time later in 2015 details a statement made by the Husband the Wife at the time that amounted to a threat to kill their eldest child, Mr D. The Husband was charged with intimidation and driving whilst suspended.
The COPS entry for early 2016 details an incident at the family home on at that time during which the Husband made a comment to the Wife that she, in my view reasonably, interpreted as a threat of physical harm to her. The Husband was charged with a breach of AVO.
The COPS entry for late 2015 states that at that time the Wife was offered the opportunity to ask the court to add an order to the AVO to prevent the Husband returning the family home and she strongly denied that request.
Bankruptcy
As outlined previously, a sequestration order was made against the Husband on the petition of J Pty Ltd in early 2010 and AFSA as the Official Receiver was appointed as the Husband’s trustee in bankruptcy. In evidence is a file note dated 9 February 2018 of a telephone conversation between an officer of AFSA and the Wife, initiated by the Wife, making plain that she was aware of the Husband’s bankruptcy. There is an inference in the evidence that the relevant sequestration order was not conveyed by the petitioner to AFSA until early 2018, and that upon receipt of such order, officers of AFSA began a correspondence with the Husband that resulted in the Husband filing his Statement of Affairs in mid-2018. On the evidence, nothing further happened until the former trustee was appointed as trustee of the Husband’s bankrupt estate by a Certificate of Appointment completed by an appropriate officer of AFSA.
Between June 2018 and November 2018, correspondence and telephone conversations occurred between an employee of the former trustee and each of the Husband and the Wife in relation to whether or not the Wife could and would purchase the Husband’s bankruptcy trustee’s interest in the Suburb C property, or if the property would be sold in the course of administration of the Husband’s bankrupt estate. A letter of 6 November 2018 was sent by the former trustee to the Wife proposing that she purchase the equity available to the Husband’s bankrupt estate – asserted in that letter to be a 40% share in equity, for reasons never explained in the evidence – for $439,720. No reply was received by the former trustee to that offer and on 21 December 2018, the former trustee instructed Birtsos Legal to seek orders in the Federal Circuit Court of Australia for possession of the Suburb C property.
It is noteworthy that the former trustee traded as Q Services in Adelaide, South Australia, whilst the only relevant property of the bankrupt estate, the Suburb C property, was in New South Wales, with the Husband living at that property in mid-2018. Birtsos Legal was at that time, and at all relevant times, a practice located at Suburb R in South Australia.
On 2 April 2019, Birtsos Legal acted upon the instructions of the former trustee and commenced proceedings by filing an application in the Federal Circuit Court of Australia at the Adelaide Registry, seeking:
(1)A declaration of the former trustee’s equitable interest in the Suburb C property;
(2)An order pursuant to either section 70 or section 69 (2) of the Law of Property Act 1936 (SA) for a sale of the Suburb C property and distribution of the proceeds of sale; and
(3)For the Husband and Wife to deliver up to the former trustee vacant possession of the Suburb C property and all keys.
The application also sought a Warrant of Possession in relation to the Suburb C property and orders in relation to removal by the Husband and the Wife of all personal property from the Suburb C property. The full text of the orders sought in the application can be read in the terms of the orders made in the proceedings that are set out fully below, those orders having been made wholly in accordance with those orders sought.
I am satisfied on the evidence that both the Husband and the Wife were served personally with the relevant application and supporting documents on 28 April 2019, despite the denials of the Wife in her evidence in chief and during cross examination. I find that such denials by the Wife are consequent upon her inadequate memory of the events and understanding of the concepts involved.
The application came before the Court in Adelaide on both 21 and 24 May 2019 and on each occasion was adjourned to give the Husband and Wife opportunity to appear and be represented. It was the Wife’s case on hearing that she was not represented before the Court on either occasion, or on the day on which orders were ultimately made (18 June 2019) because she had no knowledge of the application. I have already found that she had knowledge of the application through being served personally. I also find on all of the evidence that she was at the relevant time reliant upon the Husband for advice as to what should be done about the matter, and that she was not in a position financially or otherwise to herself appear before the court at the Adelaide Registry or to engage a legal representative to appear on her behalf.
On 18 June 2019 orders were made by the court in terms of the orders sought in the application, as follows:
1. Under section 16 of the Federal Circuit Court of Australia Act 1999 and pursuant to section 58 of the Bankruptcy Act 1966 (Cth), the Applicants [sic] equitable interest the land [sic] described in Certificate of Title Search Folio […] situated at and known as [B Street], [Suburb C] in the State of New South Wales (‘Property’) is 50% of the equity in that property.
2. Pursuant to section 70, or alternatively section 69 (2), of the Law of Property Act 1936 (SA), the Court directs a sale of the Property and distribution of the proceeds.
3. The Respondents deliver up to the Applicant vacant possession of the property within 42 days from the date of this Order.
4. The Respondents deliver up the keys for all buildings and improvements on the property to the Applicants [sic] within 42 days from the date of this Order.
5. The Respondents remove from the property all personal property, being vehicles, rubbish and other chattels which does not vest in the Applicants [sic] (‘the personal property’) within 42 days from the date of this Order.
6. In the event that the Respondents fail to remove the personal property in accordance with Order 5 above, the Applicants [sic] are empowered to remove and dispose of the personal property as they [sic] see [sic] fit.
7. The Applicant is at liberty to decide whether the property is to be sold by auction or private treaty, and if by auction, whether to set a reserve price (and if so, what price).
8. The Applicants [sic] are [sic] empowered to sign any contract of sale, discharge of mortgage authority, transfer of land and any other documents on behalf of the Respondents necessary to give effect to the sale and settlement of the property, in the event that the Respondents are required to but fail or refuse to sign such documents within such time as required by the Applicants’ [sic] solicitors.
9. The Respondents do all things as may be reasonably required of them by the Applicant, their selling agent or solicitors for the purpose of achieving a sale of the property, including but not limited to, providing access to buildings on the property for the purpose of valuation and viewing by potential purchasers.
10. The net proceeds of sale of the property to be paid in the following priority:
a. the first mortgagee’s mortgage;
b. any monies due to any encumbrancer/encumbrances and/or government entity
c. according to their priorities [sic];
d. the cost of these proceedings; and
e. the remaining monies be divided as ordered by the court in Order 1 of these orders and paid to the Second Respondent and the Applicants [sic] in their [sic] capacity as trustees of the First Respondent’s bankrupt estate.
11. The Respondents pay the Applicants’ [sic] reasonable costs of these proceedings (including reserved costs), along with all other costs, charges and expenses of the sale of the property.
12. Further consideration of the matter is adjourned to 31 July 2019 and 9:30 AM in relation to the potential application for a warrant of possession.
It is plain that orders 11(b) and 11(c) should be the one subparagraph reading:
any monies due to any encumbrancer/encumbrances and/or government entity according to their priorities
The exact same error is found in the application as filed, though the other errors noted in the form of order are not.
Why an order was sought, and made, that the Husband and Wife pay “all other costs, charges and expenses of the sale of the property” is unexplained in the evidence, given that the normal circumstances of a sale of real property under a Court order would have such costs, charges and expenses paid in the relevant proportions by the co-owners of the property, in this case the Wife as to 50% thereof and the trustee of the Husband’s bankrupt estate as to 50% thereof.
A copy of the orders made on 18 June 2019 was served on the Husband and the Wife by being affixed to the door of the Suburb C property by a process server in mid-2019.
On 31 July 2019 the solicitors for the former trustee again attended before the Federal Circuit Court of Australia at Adelaide and obtained a Warrant of Possession for the Suburb C property. No costs order was made.
In early 2020 the former trustee entered into possession of the Suburb C property, and on a number of occasions during that month, the Wife was able to re-enter the Suburb C property to remove personal property with the cooperation of the former trustee.
On the evidence, at no time have the former trustee’s “reasonable costs of these proceedings (including reserved costs)” as described in the orders of 18 June 2019 been assessed or agreed, nor is it clear what “reasonable costs” are – certainly not, I find, indemnity costs.

Another question of interest is whether the order made by the Federal Circuit Court of Australia on 18 June 2019 under sections 69(2) or 70 of the Law of Property Act 1936 (SA), a South Australian Act relating only to real property within that state, can properly apply to the Suburb C property situated in the state of New South Wales. Certainly, the Federal Circuit Court of Australia sitting at Adelaide in South Australia can pick up state legislation under section 79 of the Judiciary Act 1903 (Cth) where not in conflict with the Constitution or the laws of the Commonwealth, but I query whether a state law so picked up can have wider application than when applied by a Court exercising that state’s jurisdiction.
Enticing though the legal point may be, I do not need to pursue it, let alone decided it, as, validly made or not, the order for sale of the Suburb C property was actioned and the Suburb C property was sold in 2020.
A further question of interest is as to why the Husband was made a party to the sale and possession proceedings in the Court at Adelaide given that he was not at that time an interested person in the Suburb C property within the meaning of the term “interested” defined in the Law of Property Act 1936 (SA), as at that time he had no legal or equitable interest in the Suburb C property.
The Suburb C property was sold in 2020 for $705,000, and settled in 2021 with a net amount to the vendors of $262,064.34 on settlement. The deposit on exchange was $70,500. The agent’s fees totalled $17,877, and accordingly $52,623 from the deposit on exchange was added to the net proceeds of sale on settlement to give a net amount received to the vendors of $314,687.34. Those net proceeds of sale were paid into, and the balance remaining remains in, the trust account of Birtsos Legal, as confirmed by the Trust Account statement for the matter from Birtsos Legal that is Exhibit R1.
In evidence is a copy of an invoice dated 27 January 2020 issued by Birtsos Legal to the former trustee for work between 4 February 2019 and 31 July 2019 for $13,136.80 costs and disbursements, inclusive of GST (‘the first invoice’), and a copy of an invoice dated 17 February 2021 from Birtsos Legal to the former trustee for the period 2 August 2019 to 17 February 2021 for costs and disbursements totalling $34,300.88 inclusive of GST (‘the second invoice’).
The second invoice included the solicitor and client costs between the former trustee and Birtsos Legal for these proceedings for the period from their inception by the Wife on 3 February 2020 until 17 February 2021, including an interim hearing Altobelli J on 16 March 2020 (including counsel’s fees). The first invoice for $13,136.80 was paid to Birtsos Legal from the net proceeds of sale by transfer from their Trust Account to Office Account on 25 February 2021 (Exhibit R1). An amount of $32,645.29 remains outstanding to Birtsos Legal, owed by the former trustee, on the second invoice (referred to as “PROTECTED FUNDS” on page 2 of Exhibit R1).
Family law proceedings
The Initiating Application filed by the Wife on 3 February 2020 in the Family Court of Australia sought, amongst other final and interim orders, interim orders that the former trustee be joined as a party and that the Warrant of Possession issued from the Adelaide registry of the Court on 31 July 2019 be stayed, and that pending further order the Wife be granted sole occupancy of the Suburb C property and the former trustee be restrained from dealing in any way with the Suburb C property and from declaring or distributing assets vested in the former trustee.
The Wife sought final orders that the former trustee transfer the Suburb C property to her and that she refinance the loan account with O Bank secured by first registered mortgage on the Suburb C property so as to relieve the Husband’s bankrupt estate of liability.
The interim orders sought by the Wife were repeated in an Application in a Case filed by her on 11 February 2020, and then on 6 March 2020 the Wife filed an amended Initiating Application seeking interim orders staying the Warrant of Possession, that she be granted sole occupancy of the Suburb C property, and that the former trustee be restrained from dealing with the Suburb C property and from declaring or distributing assets vested in the former trustee.
On 20 February 2020, the proceedings were transferred by a Registrar to the Federal Circuit Court of Australia and listed before his Honour Judge Altobelli (as his Honour then was) on 16 March 2020.
On 24 February 2020, on the Court’s own motion, the former trustee was added as a party.
On 16 March 2020 the Wife’s application for interim orders was heard by his Honour Judge Altobelli and judgment was reserved. On 15 April 2020, his Honour delivered judgment and made orders dismissing the Wife’s interim application of 6 March 2020 and ordered that:
The Second Respondent’s costs are reserved.
It is not clear on what basis the former trustee’s costs of defending the Wife’s interim application were paid. Those costs were paid in the sum of $13,136.80, as set out in the second invoice, and were paid in full on 25 February 2021 from the net proceeds of sale of the Suburb C property, being monies at law held half thereof for the Wife and half thereof for the former trustee as trustee of the bankrupt estate of the Husband.
The evidence of Ms Birtsos of Birtsos Legal in her affidavit sworn 9 July 2021 is that:
The balance of $266,705.66 remains unaccounted for in trust.
‘The balance’ referred to is, of course, from the net proceeds of sale of the Suburb C property.
From the net proceeds of sale after settlement, the following was paid:
(1)The first invoice was paid ($13,136.80);[7]
(2)Two “additional invoices … as part of the estate administration” in a sum of $350 and in a sum of $1,120.80;[8]
(3)A further sum of $728.88 was paid out on 25 February 2021 as “Payment of outstanding invoice as directed by [Mr Vinney]”, and is the exact amount of the disbursements stated on the second Birtsos Legal invoice.[9]
[7] Affidavit of Maria Birtsos filed 11 July 2021, [7.1].
[8] Affidavit of Maria Birtsos filed 11 July 2021, [9.1, 9.2].
[9] Exhibit R1.
The sum remaining from the net proceeds of sale should be, and is, $299,350.86, not the figure stated by Ms Birtsos in paragraph 10 of her affidavit as remaining “unaccounted for in trust” of $266,705.57, the discrepancy being explained by Ms Birtsos during her cross-examination as being the “PROTECTED FUNDS” of $32,645.29 and adverted to on the second page of Exhibit R1.
The matter was initially set down for a final hearing on 16 April 2021, but that date was later vacated and the matter listed for final hearing on 15 July 2021.
The final hearing occurred on 15 July 2021 and 11 March 2022, with judgment being reserved following the filing of written submissions, on 9 May 2022.
In paragraph 10 of her affidavit of 9 July 2021, Ms Birtsos gives evidence that the former trustee:
[10] … seeks reimbursement of $30,787.56 for costs paid directly by the trustee in the course of the administration of the estate …
The calculation of those costs is then set out.
The list of costs so set out includes some expenses related to these proceedings, such as:
Federal Circuit Court filing fee $881.40
…
[Ms S] Counsel Fees $3300
It also includes an amount for “Birtsos Legal disbursement invoice 5282 - $8,311.48”. That invoice and what it relates to is not in evidence.
The said amount for which the former trustee “seeks reimbursement” also includes at least two amounts that appear on the Birtsos Legal invoice of 17 February 2021 and which have therefore been paid:
POL commercial services $198.63
…
POL field call $175.25
Annexure MB-23 to the affidavit of Ms Birtsos of 9 July 2021 is a “work in progress report” for the former trustee for the period 2 April 2019 to 12 February 2021 for a total amount of $117,260 inclusive of GST.
Annexure MB-22 to that affidavit is a Further Report to Creditors issued by AFSA, as the trustee of the Husband’s bankrupt estate pursuant to section 160 of the Bankruptcy Act, in early 2021. It does not refer to these proceedings. However, Ms Birtsos gives evidence in that affidavit that in early 2021 she was instructed by the former trustee that the file relating to the Husband’s bankrupt estate:
[14] … had been referred to the Official Trustee and to contact AFSA for further instructions in relation to the Estate.
[15] [In early] 2021, I received instructions from AFSA to continue to act on behalf of the Official Trustee until final orders had been made.
This makes it plain on that evidence that the Official Trustee (AFSA) was aware of the proceedings.
During oral submissions and in written submissions, the former trustee made it plain that the former trustee (the Official Receiver never having become a party to proceedings) sought that:
(1)The only asset of any value available for distribution in these proceedings, the sum of $299,350.86 remaining of the net proceeds of sale of the Suburb C property, be divided equally between the Wife and the Husband’s bankrupt estate;
(2)The former trustee receive from the Wife’s share an amount equal to such of the “work in progress ledger” expenses as relate to the former trustee obtaining and selling the Suburb C property (amount not specified);
(3)The amount of $30,787.56 “paid upfront by the Trustee in Bankruptcy by way of ‘out‑of-pocket expenses’ to issue proceedings, prepare the property for sale and have the property sold” – the amount referred to in paragraph 10 of the affidavit of Ms Birtsos of 9 July 2021 as referred to above;
(4)The amount of $13,136.80 “in legal fees relating to the application for partition and sale, obtaining the Orders sought and obtaining the Warrant of Possession” in the Adelaide proceedings “paid from the sale proceeds” – the first invoice of 27 January 2020;
(5)An amount of $32,645.29 “in respect of legal fees in opposing the application by the Wife to restrain the sale of the former matrimonial home (which was unsuccessful and costs reserved) and legal work associated with the sale of the former matrimonial home. These are out-of-pocket expenses paid by the trustee” – a reference to the second invoice of 17 February 2021, though in the amount of $32,645.29 referred to as “PROTECTED FUNDS” in Exhibit R1; and
(6)The amounts of $350 and $1120.80 for final yard maintenance on the Suburb C property prior to sale and for ensuring that property, as paid out from the net proceeds of sale already (affidavit of Ms Birtsos of 9 July 2021 paragraph 9 and Exhibit R1).
In effect, the former trustee is seeking from the Wife’s share:
(1)The full costs on the indemnity basis of the Adelaide proceedings;
(2)The full costs on the indemnity basis of the interim hearing before Judge Altobelli in these proceedings;
(3)The legal costs incurred by the former trustee in these proceedings up to 17 February 2021 on the indemnity basis; and
(4)All of the “work in progress” of the former trustee relating to both the Adelaide proceedings and these proceedings, which is what I understand by “the expenses relate largely to the Trustees selling of the former matrimonial home.”
As already stated, what part of the sum of $117,260 is claimed is not in evidence or specified in any application or submissions.
Much of the cross examination of the Wife for the former trustee related to her interactions with the former trustee and his employees and her knowledge of and failure of engagement in the Adelaide proceedings. The Wife was also cross examined in relation to her evidence in her Financial Statement of 9 July 2021 and affidavit of 13 March 2020 in relation to her income and expenses and as to any knowledge she had of the Husband’s financial circumstances after 2017.
It would seem on the evidence that the Wife was never invited to sign the listing agreement with the sale agent for the Suburb C property, the contract of sale, or the transfer, despite the terms of the orders made in the Adelaide proceedings on 18 June 2019. During cross examination, Ms Birtsos gave evidence that the contract for sale was signed by the listing agent at the auction.
THE LAW
The law relating to the alteration of property interests between two parties to a marriage is governed by section 79 of the Act.[10] Relevant in this case, section 79(1) vests the Court with power to alter the interests of the parties in property,[11] and also with the power to alter the interests of a bankrupt parties and crêpes he trustee invested bankruptcy property,[12] and the power to make orders providing for the settlement or transfer of property, as determined by the Court.[13]
[10] Family Law Act 1975 (Cth) s 79.
[11] Family Law Act 1975 (Cth) s 79(1)(a).
[12] Family Law Act 1975 (Cth) s 79(1)(b).
[13] Family Law Act 1975 (Cth) s 79(1)(d).
The law relating to property settlements under section 79 of the Act consequent upon the Husband’s bankruptcy will be dealt with after the following short précis on the general law applicable to section 79 property settlements.
The Court must not make an order under section 79 unless the Court is satisfied that, in all of the circumstances, it is just and equitable to do so.[14] The legislative process required by section 79 was considered by the High Court in Stanford & Stanford (2012) 247 CLR 108.
[14] Family Law Act 1975 (Cth) s 79(2).
In that decision, the High Court held that section 79(2) requires that at the outset of the Court’s decision-making process the Court must consider whether or not, in all the circumstances, it is just and equitable to make an order under section 79(1) altering the interests of the parties to the marriage in property.
In considering the proposition posed by this first step, a Court should start by identifying items under the following categories:
(1)The existing legal and equitable interests of the parties in property, according to ordinary common law and equitable principles;
(2)The existing liabilities of the parties, according to ordinary common law and equitable principles and under legislation; and
(3)The rights of the parties, if any, according to ordinary common law and equitable principles and under legislation, in relation to any asserted resources of the parties that may, if it is considered just and equitable to proceed with the property settlement, be taken into account in the Court’s consideration of the matters referred to in section 75(2) of the Act, to which section 79(4)(e) directs the Court’s attention.[15]
[15] Stanford & Stanford (2012) 247 CLR 108; see, especially, [37].
That the interests as described above are ‘existing’ is of importance, as the Court noted, because the text of the section gives reference to ‘altering’ the interests.[16]
[16] Stanford & Stanford (2012) 247 CLR 108, [37].
I further note the comments of the High Court in Stanford at paragraph 42 which I reproduce in full here:
[42] In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the Husband and Wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the Husband and Wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).[17]
[17] Stanford & Stanford (2012) 247 CLR 108, [42].
I will examine the matrimonial asset pool and the existing interests of the parties, before determining whether it is just and equitable to make a property adjustment order.
If the Court determines that it is just and equitable to make an order under section 79, the Court must then consider what orders are appropriate to be made. In doing so, I will follow the four‑step process set out in Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395.[18]
[18] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (‘Hickey’) [2003] FamCA 395, [39].
In Hickey, the Full Court of the Family Court set out a process of four inter-related steps that must be taken by a court when determining a property application:
(1)First, “the Court should make findings as to the identity and value of the property, liabilities, and financial resources of the parties at the date of the hearing”;[19]
(2)Second, “the Court should identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b), and (c), and determine the contribution-based entitlements of the parties expressed as a percentage of the net value of the property of the parties”; [20]
(3)Third, “the Court should identify and assess the relevant matters … (‘the other factors’) including…the matters referred to in section 75(2) so far as they are relevant…”;[21]
(4)Fourth, “the Court should … resolve what order is just and equitable in all the circumstances of the case”.[22]
[19] Hickey [2003] FamCA 395, [39].
[20] Hickey [2003] FamCA 395, [39]. See also Family Law Act 1975 (Cth) s 79(4)(a)-(c).
[21] Hickey [2003] FamCA 395, [39].
[22] Hickey [2003] FamCA 395, [39].
The Full Court pointed out in Hickey that pursuant to the wording of section 79, there can only be one property settlement order at any one time, and that the one property settlement order is final, subject only to anything that may be properly done pursuant to section 79A of the Act.[23]
[23] Hickey [2003] FamCA 395, [47].
The Full Court held in Fontana & Fontana [2018] FamCAFC 63:[24]
… Indeed, the authorities are consistent in finding that assessing contributions is not an accounting exercise but a holistic one (Brandt & Brandt (1997) FLC 92-758; Norbis & Norbis (1986) 161 CLR 513).[25]
[24] Fontana & Fontana [2018] FamCAFC 63.
[25] Fontana & Fontana [2018] FamCAFC 63, [27].
The Court is required to consider the parties’ contributions made on and from the commencement of their relationship, during their relationship, and following separation.[26]
[26] See, eg, Jabour & Jabour [2019] FamCAFC 78.
The approach to determining the appropriate percentage of the net value of property in relation to the contributions of the parties, at step two of the four-step process, requires an assessment of contributions by, or on behalf of, each of the parties in a holistic manner, rather than attaching specific contributions to a specific item of property and making a determination upon that basis. To do the latter would be to disregard the whole of the contributions made during the whole of the relevant period of the relationship by or on behalf of each of the parties.
As the Full Court said in Dickons & Dickons [2012] FamCAFC 154 at paragraphs 14 to 16:
[14] As is plain from earlier decisions of this Court, regard must be had to the use made of contributions of various types so as to compare the contributions made by each of the parties during the course of, and over the length of, their relationship (see, for example, In the Marriage of Pierce (1998) FLC 92-844) But that is an entirely different proposition to, as it were, causally linking contributions with their asserted financial “product” or “value”. The former recognises that the nature, form and extent of contributions made by each of the parties might differ; the latter suggests that the absence of a causal link counts as no contribution at all.
[15] The search for a causal link might be seen to come instinctively to the necessary inquiry and all the more so when regard is had to s 79(4)(a) which refers to financial contributions made “...directly or indirectly...” “...to the acquisition, conservation or improvement of any of the property ...” and goes on to also refer to the financial contribution made “...otherwise in relation to any of that last-mentioned property...” The terms of that sub-paragraph might, naturally enough, be seen to suggest a causal link between those contributions and the “financial product” which those contributions of that type are said to have produced. That same requirement might also be seen to suggest that relevant contributions of that type can be seen to be quantifiable – or, at least, conceptualised – in monetary terms, in contradistinction to contributions made pursuant to s 79(4)(c).
[16] While that apparent “causal connection” might be seen in s 79(4)(a) (and (b)), no such connection is apparent from the terms of s 79(4)(c); contributions of that latter type are not linked by the words of the sub-paragraph to the “...acquisition, conservation or improvement of any of the property...” or, indeed, to “property” at all. This is not a legislative oversight; the 1983 amendments to the Act which inserted the current s 79(4)(c) were specifically intended, relevantly, to remove any suggestion that there needed to be a causal link between contributions of that type and any particular asset or property. The Explanatory Memorandum to the Family Law Act Amendment Bill 1983 provides, at Clause 36, that a specific purpose of the re-casting of s 79(4) was, relevantly, to:
... revise sub-section 79(4) to remove the possibility of an interpretation of the sub-section requiring that there be a nexus between a spouse’s contribution and a specific item of property in section 79 proceedings ...[27]
[27] Dickons & Dickons [2012] FamCAFC 154, [14]-[16].

The Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind.[28] The principle was expressed succinctly by the Full Court in the joint judgment of Bryant CJ and Ainslie-Wallace J in Fields & Smith[29] at paragraph 168:
...the task is to consider the contributions holistically over the whole period from the commencement of cohabitation to trial, and the analysis requires the Court to weight all of the contributions of all types prescribed by section 79(4) made by both parties across the entirety of the relationship until the time of Hearing, including the post-separation period.[30]
[28] In the Marriage of Harris (1991) 104 FLR 458, 464.
[29] Fields & Smith [2015] FamCAFC 57.
[30] Fields & Smith [2015] FamCAFC 57, [168].
The Full Court has been repeatedly clear that the approach to property settlement under section 79 of the Act is not an accounting exercise. Here, I note the comments of the Full Court in Grier & Malphas (2017) 55 Fam LR 107 at paragraph 129, where Murphy and Kent JJ said:
As the Chief Justice points out, with those principles in mind, the trial judge adopted a broad-brush approach to the parties’ respective expenditure. Nowhere error is established by reason alone of that approach; authority eschews “overly pernickety analysis” and section 79 demands neither an audit nor an exercise in accounting. However, when significant sums of money are said by one party or the other to have been “wasted” or to amount to a unilateral “premature distribution of property” and the evidence is suggestive of either or both, an analysis of the relevant sums and their use is needed.[31]
[31] Grier & Malphas (2017) 55 Fam LR 107, [129].
Upon the Husband becoming bankrupt, his property (within the meaning of that term in the Bankruptcy Act) vested in the Official Trustee and then (on his appointment) in the former trustee, pursuant to section 58 of the Bankruptcy Act. Whatever else may have been the relevant property of the Husband at the time his bankruptcy, certainly his interest in the Suburb C property vested in his trustee in bankruptcy. Prior to the Husband’s bankruptcy, the Husband and Wife owned the Suburb C property as joint tenants:
Once property is vested in the trustee pursuant to the Bankruptcy Act, the trustee’s powers are extensively granted in s134 and in sections 139ZJ to 139ZT of that Act. In the present context, there is a power to “sell all or any part of the property of the bankrupt” in s134(1)(a). The trustee’s power when matrimonial property is owned just by the bankrupt is quite clear. Bankruptcy severs joint tenancies so that the trustee and the non-bankrupt spouse become tenants-in-common (Re Butler’s Trusts (1880) 38 Ch.D: Re Holland; Ex parte Official Trustee (1985) 5 FCR 165). However, where property is jointly owned, the trustee’s rights are no greater than those of the bankrupt as regards compelling a sale of the property. Despite the armoury of weapons available to the trustee under the [Bankruptcy] Act, in order to compel a sale or partition of a jointly owned property, the trustee must either rely on common law or statutes other than the Bankruptcy Act. In New South Wales, the trustee will rely on s66G of the Conveyancing Act 1919 (NSW) ...[32]
[32] Tom Altobelli, ‘Protecting the Family Home From the Claims of Secured and Unsecured Creditors – The Family Home in Australian Law’ (SJD Thesis, The University of Technology Sydney, 2000), 208.
Under section 149(4) of the Bankruptcy Act, the Husband (having become a bankrupt on 9 April 2010 after the commencement of section 27 of the Bankruptcy Amendment Act 1991 (Cth)) was due to be discharged at the end of a period of three years from the date on which he filed his Statement of Affairs. He filed on 1 May 2018 and so was due for discharge by 1 May 2021. There is no evidence of any objection under Part VII of the Bankruptcy Act to the Husband being released from bankruptcy.
Without having any direct evidence in the hearing that the Husband has been discharged from his bankruptcy, the Court will presume that section 149(4) of the Bankruptcy Act has applied and he was discharged from his bankruptcy as of about 1 May 2021, and that therefore pursuant to section 153 of the Bankruptcy Act:
… the discharge operates to release him from all debts (including secured debts) provable in the bankruptcy, …
This will become relevant in relation to submissions made on behalf of the former trustee.
Prior to the 2005 amendments to the Act, there was some difficulties and conflicting authorities relating to the standing of a bankrupt spouse in property settlement proceedings under the Act and in relation to the property available to the non-bankrupt spouse in orders under section 79. The 2005 amendments clarified the situation.
In Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor [2009] FamCAFC 20, the Full Court constituted by their Honours Coleman, Thackray and Ryan JJ held that the effect of the 2005 amendments to the Act and the Bankruptcy Act is that the interests of unsecured creditors do not automatically prevail over the interests of the non-bankrupt spouse; that the legislation requires the Court to balance the competing claims in the exercise of the wide discretion conferred by section 79, and that the term “property” includes property vested in the trustee of a bankrupt spouse and so the Court has jurisdiction to make orders which have an adverse impact upon unsecured creditors.
In Needham & Trustees of the Bankrupt Estate of Needham [2017] FamCAFC 94, the Full Court constituted by their Honours May, Strickland and Cronan JJ said at paragraph 42:
[42] His Honour correctly stated the position of the Trustees [in bankruptcy]’s and the power of the court:
[48] A point of distinction, in circumstances where a party to the marriage has become bankrupt, is the fact that the sub – section 79(1)(b) empowers the Court to make an order altering the interests of the Official Trustee in Bankruptcy “… In the vested bankruptcy property.” This is in contrast to the Court’s general power, where bankruptcy is not an issue, to alter the interests of the parties in the property of the marriage. The jurisdiction granted by the 2005 Amendment Act therefore enables a Trustee to join proceedings for the purpose of resisting claims by a non-bankrupt spouse to vested bankruptcy property. The legislation does not, however, empower the Respondent Trustees to utilise the provisions of the [Family Law Act] to enlarge the vested bankruptcy property available to the bankrupt spouses creditors.
THE MATRIMONIAL ASSET POOL
As stated by the High Court in Stanford, the first step in the consideration of whether it is just and equitable to make a property settlement order is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
The only assets revealed in the evidence on hearing are:
(1)The remaining net proceeds of sale of the Suburb C property, which bring with them in the issue as to whether any sums expended therefrom should be added back to the pool;
(2)An estimated $11 held by the Wife in her Commonwealth Bank of Australia account; and
(3)An estimated $300 worth of household contents in the possession of the Wife.
These last two items are taken from the evidence of the Wife in her Financial Statement of 9 July 2021. I have disregarded the assertion of the value of the Wife’s contents contained in the Wife’s case outline document. As an exercise of discretion, I disregard the estimated $11 savings and the estimated $300 worth of household contents in the possession of the Wife from consideration of the property.
The remaining net proceeds of sale of the Suburb C property are held in the trust account of Birtsos Legal in a sum of $299,350.86 (Exhibit R1). The Wife is the owner in law and equity of half of that sum and the Official Trustee (not a party to these proceedings) is the owner in law and equity of the other half of that sum.
The costs order made in the Federal Circuit Court of Australia at Adelaide on 18 June 2019 was that:
The Respondents [the Husband and the Wife] pay the Applicants’[sic] reasonable costs of these proceedings (including reserved costs), along with all other costs, charges and expenses of the sale of the property.
Whether or not that costs order was a valid costs order at all is open to question on the basis that the power purported to be exercised by the Court causing sale of the Suburb C property was pursuant to the South Australian Law of Property Act 1936 (SA), picked up by a Court exercising Federal jurisdiction pursuant to section 79 of the Judiciary Act 1903 (Cth).
In circumstances where the power under the Law of Property Act 1936 (SA) if exercised as a state Act by a Court exercising only South Australian state jurisdiction was confined to dealing with land or other property in South Australia, then the power exercised by the Court exercising Federal jurisdiction relied on that act providing a power throughout the Commonwealth of Australia. I have to doubt that it was a valid exercise of power under that act.
A further question in relation to that costs order arises from the question as to why the Husband was a party to those proceedings at all, as referred to earlier in these Reasons. He had no interest whatsoever in the Suburb C property itself and there is no evidence before this Court that any of the “personal property, being vehicles, rubbish and other chattels which does not vest in the Applicant’s [sic]” at the Suburb C property where the property in law or in equity of the Husband as being exempted property in his bankruptcy.
Certainly, the order referring to “reasonable costs of these proceedings (including reserved costs)” does not on its terms equate to an order for indemnity costs in favour of the former trustee. Those costs have never been quantified. For whatever “along with all other costs, charges and expenses of the sale of the property” may actually mean, having been taken by the Court in Adelaide from the wording of the application before the Court, they have never been quantified.
Certainly, if “all other costs, charges and expenses of the sale of property” are to be found mixed into the first invoice and the second invoice of Birtsos Legal and in the “work in progress” schedule of the former trustee, it is not a matter for the Court to pick through and, without any adequate evidence to go on, attempt to ascertain what is in and what is out in composing a quantum.
There was no right for the solicitors for the former trustee in the Adelaide proceedings to satisfy either their first or the second invoice from the net proceeds of sale of the Suburb C property. Their doing so in relation to the first invoice in the sum of $13,136.80, when there had been no quantification whatsoever under that costs order, cannot stand and that sum will be added back to the net proceeds of sale of the Suburb C property forming the only asset in the matrimonial asset pool.
The same must apply to the sum of $728.88 withdrawn from the net proceeds of sale on 25 February 2021 as the disbursements set out in the second invoice of Birtsos Legal.
As the sum of $350.04 for yard maintenance at the Suburb C property prior to sale and the sum of $1120.80 for building insurance paid in relation to the Suburb C property prior to sale were both paid from the net proceeds of sale and are reasonably associated with the costs of selling the property and keeping it safe as to value pending sale, I will not add those sums back.
Accordingly, I find that the asset value of the matrimonial asset pool before any liabilities are considered is $313,216.54.
Counsel for the former trustee advised during oral submissions that the aim of “the trustee” was to:
(1)retain the Husband’s bankrupt estate’s 50% interest in the net proceeds of sale of the Suburb C property;
(2)deduct from the Wife’s 50% interest in the net proceeds of sale of the Suburb C property the amount required to satisfy the costs order made in the Federal Circuit Court proceedings in Adelaide;
(3)further deduct from the Wife’s share of the sale proceeds the “expenses incurred in selling the property”; and
(4)further deduct from the Wife’s share of the sale proceeds the former trustee’s costs of the proceedings before Judge Altobelli in which the Wife sought to restrain the sale of the property.
The costs order made in the FCC proceedings in Adelaide, being the former trustees “reasonable costs of those proceedings (including reserved costs), along with all other costs, charges and expenses of the sale of the property”, have never been quantified. The order was made against the Husband and the Wife on 18 June 2019. At that time, the Husband was still a bankrupt, three years from the date of filing his Statement of Affairs not occurring until 30 April 2021.
If the words “all other costs, charges and expenses of the sale of the property” in the costs order meant literally any costs, charges, and expenses incurred of any nature relating to the sale of the Suburb C property, then the Husband the Wife would be responsible for the agents’ commission, the legal costs of sale, and, perhaps, monies payable by the vendors on adjustment of rates on settlement.
The validity of the order must be in question if the order for sale was outside jurisdiction. This would be completely out of keeping with usual orders made following orders for partition or sale in litigation by one or more co-owners against the other co-owner, or co-owners under sections 69 or 70 of the Law of Property Act 1936 (SA). To bring it within more familiar territory within the state in which the court is sitting in these proceedings, the appointment of a trustee for sale of co-owned property under section 66G of the Conveyancing Act 1919 (NSW).
I cannot accept that that was the meaning of the order. On the evidence in these proceedings, I do not know what “all other costs, charges and expenses of the sale of the property” means or amounts to.
To consider together those peculiar terms of the costs order and the submission made by counsel for the former trustee, I note that the written submissions at paragraph 14 assert that “the Trustee” incurred expenses “in the selling of the former matrimonial home … claimed in their totality” on top of the former trustee’s “work in progress” in the amount of amount of $117,260, being:
(1)The second Birtsos invoice amount of $30,787.56
(2)The first Birtsos invoice amount of $13,136.80
(3)$32,645.29 for legal fees in opposing the application by the Wife to restrain the sale of the Suburb C property, in relation to which costs were reserved, but no costs order was made
(4)$350 “in final yard maintenance for the property in readiness for sale which has been paid from the sale proceeds”
(5)$1,120.80 “in insuring the property which has been paid by the sale proceeds.”
Counsel for the former trustee’s written submissions also detail the debts proved in the Husband’s bankrupt estate. Those debts are not liabilities to be considered as debts of the Husband or the Wife in these proceedings; as the Husband is a discharged bankrupt, he is no longer liable in relation to those debts. They are not debts of either party.[33] I will not list the debts proved in the Husband’s bankrupt estate as liabilities in these section 79 property alteration proceedings.
[33] Bankruptcy Act 1966 (Cth) s 153.
It is necessary to address several of the submissions made by counsel for the former trustee on behalf of the former trustee in bankruptcy, and in doing so to consider those submissions’ effect if the Official Trustee had come into the matter as a party as the trustee of the bankrupt estate of the Husband at the time of the hearing. For that purpose I will refer to “the Trustee” as encompassing both the former trustee and the Official Trustee.
Counsel submitted that as the Trustee:
… is a third party and represents the interests of third parties to the marriage
he submitted that accordingly section 90AE of the Act was enlivened.
This is not the case. The rights of the creditors who proved in the Husband’s bankrupt estate were subsumed by the Trustee who has the right of appearance.[34] They are not third parties within the meaning of section 90AE, despite being “not a party to the marriage” as referred to in the definition of “third-party” in section 90AB, as they no longer have the character of being a creditor of a party to the marriage.
[34] Family Law Act 1975 (Cth) s 79(10A).
Even if they were, and even if the proved debts were within the meaning of “a debt of a party to the marriage” in section 90AE(3)(b), no order that can be made in these proceedings would result in the debt of any such creditor being paid in full because the maximum funds that could fall into the Husband’s bankrupt estate in this matter could never see the creditors who are proven in his bankrupt estate “paid in full” – the costs and expenses of the various trustees in bankruptcy of the Husband’s estate would consume that sum, according to the evidence presented on the Trustee’s behalf in the hearing.
But I repeat that the references to “a creditor of the parties to the marriage”, or to “a creditor of one party to a marriage”, or to “a debt of the parties’ marriage” in section 90AE do not include the creditors proved in the Husband’s bankrupt estate. Section 90AE does not have application in this matter.
In paragraph 38 of his written submissions, counsel for the former trustee asserts that to disregard the unsecured creditors of the Husband who proved in his bankrupt estate:
… would be to empower the court to ignore unsecured creditors in contrast to the long-established principles in Biltoft v Biltoft (1995) FLC 92-614; Murray & Murray (2020) FLC 94-000 at [41] … the connection between the matrimonial pool and the unsecured creditors is found in that these are debts of one of the parties to the marriage …
As already indicated, they were previously debts of one of the parties to the marriage – the Husband – but were no longer so at the time of the hearing.
In Lemnos, at [94] to [99], his Honour Coleman J said :
[97] … In cases where there is “property” of the parties to the marriage or either of them, the effect of the 2005 amendments [to the Family Law act 1975 and to the Bankruptcy Act 1966] is that the court has jurisdiction to make orders which have an adverse impact upon unsecured creditors. In this regard the term “property” includes property vested in the trustee of a bankrupt spouse.
[98] Although not so expressed, implicit in the submission of Counsel for the trustee that there could be no property with respect to which an order could be made in favour of the Wife in this case is the reality that, if correct, such approach potentially and significantly enhances the position of an unsecured creditor. Rather than having to “take its chances” on being paid, the unsecured creditor would be paid after the entitlements to secured creditors were satisfied, and without regard to the rights of the non-bankrupt spouse. That would be a fundamental change in the law. The fortuitous breakdown of the marriage of the debt or would, on that scenario, result in the unsecured creditor potentially being able to recover more than would have been possible had the debtor remained married. There is no apparent legislative foundation for such propositions. As counsel for the trustee fairly outlined to this court, by the Insolvency (Tax Priorities) Legislation Amendment Act the priority previously enjoyed by the ATO has been removed and now ranks equally alongside other unsecured creditors.
[99] It follows that I agree with the alternative proposition made on behalf of the trustee which I have earlier set out, namely that the effect of the insertion of s 79(1)(b) in the FLA is that the interests of unsecured creditors do not automatically “trump” the interests of the non-bankrupt spouse and that the legislation requires the court to balance the competing claims in the exercise of the wide discretion conferred upon the court by s 79.

Their Honours Thackray and Ryan JJ said at [202]:
[202] In particular, we agree that the court may make orders in favour of a non-bankrupt spouse, even though the combined liabilities exceed the total value of the property (including any property vested in the trustee). For the reasons Coleman J as expressed, we do not accept the trustee’s contention that the trial judge was obliged to conclude there could be no property with respect to which any order could be made in favour of the Wife.
At [262] to [274]:
[262] We consider the submissions made on behalf of the trustee concerning the application of the pari passu principle to be misconceived. We can see no warrant in the words of the legislation, or in any of the other materials to which we were referred, for treating the entitlement of the wife under the FLA in the same way as the entitlement of an unsecured creditor of the husband.
[263] Proven liabilities of an unsecured creditor are admitted in the administration of the bankrupt estate at full value. The entitlement of a non‑bankrupt spouse under the provisions of the FLA are assessed only after proper regard has been paid to s 75(2)(ha) of the FLA which requires the Court to consider “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”.
[264] Although it will not always necessarily be so, it would seem that in many cases the application of s 75(2)(ha) will result in the assessment of the FLA entitlement of the non‑bankrupt spouse at an amount less than he or she would otherwise have been entitled to receive. To then treat the resulting entitlement as if it were of the same character as the entitlement of an unsecured creditor would not, in fact, result in the “equal treatment” proposed by the counsel for the trustee. The entitlement of the unsecured creditor would be admitted at full value, whereas the entitlement of the non–bankrupt spouse may already have been heavily discounted as a consequence of the application of s 75(2)(ha).
[265] We do not consider that the principles laid down by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (supra) advance the trustee’s argument. Those principles concern the task faced by judicial officers when dealing with “conflicting statutory provisions”. On this issue, we do not discern any conflict between the provisions of the FLA and the BA.
[266] Section 82 of the BA relevantly provides:
(1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy.
(1A) Without limiting subsection (1), debts referred to in that subsection include a debt consisting of all or part of a sum that became payable by the bankrupt under a maintenance agreement or maintenance order before the date of the bankruptcy...
[267] Section 108 of the BA provides:
Except as otherwise provided by this Act, all debts proved in a bankruptcy rank equally and, if the proceeds of the property of the bankrupt are insufficient to meet them in full, they shall be paid proportionately. [our emphasis added]
[268] Section 116(1) of the BA sets out the property divisible amongst the creditors but s 116(2)(q) specifically excludes from the list “any property that, under an order under Part VIII of the Family Law Act 1975, the trustee is required to transfer to the spouse of the bankrupt”.
[269] A potential “entitlement” to a settlement pursuant to s 79 of the FLA is not properly characterised as a “present or future, certain or contingent” debt or liability, nor is it a debt or liability to which the bankrupt spouse “may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy” for the purposes of s 82(1) of the BA.
[270] That this is so follows from authorities such as Fisher v Fisher (1986) 161 CLR 438 at 453 where Mason and Deane JJ said:
True it is that orders made under s. 79 do not give effect to antecedent rights arising in virtue of the marital relationship. Instead they perform a dual function by creating and enforcing rights in one blow, so to speak…
[271] It follows that any potential entitlement to make a claim under s 79 of the FLA and any entitlement arising under an order made pursuant to s 79 after the date of the bankruptcy are not a debt or liability provable in bankruptcy. The pari passu principle embodied in s 108 therefore has no application to such entitlements.
[272] Had Parliament intended to treat the entitlement of the non–bankrupt spouse as if it were a debt provable in the bankruptcy, it could have so provided when enacting the 2005 amendments, for example by expanding the scope of s 82(1A) of the BA to include obligations pursuant to orders made after the date of bankruptcy in proceedings under the FLA between the trustee in bankruptcy and the non–bankrupt spouse. Parliament instead elected to enact s 116(2)(q) of the BA, which removes from the property available for distribution between creditors any property that the trustee is required to transfer to the spouse of the bankrupt under s 79 of the FLA. In so doing, Parliament ensured that there was no inconsistency between the operation of the FLA and the BA.
[273] Accordingly there is no merit in Ground 13 since there was no obligation upon his Honour to have regard to “the principles of bankruptcy law that … the proceeds of a bankrupt’s property be distributed pro rata amongst unsecured creditors” for the simple reason that the wife is not an unsecured creditor and any property to which she is entitled pursuant to an order made pursuant to s 79 would not be divisible amongst the unsecured creditors.
[274] Similarly, to the extent that Ground 15 relies on the pari passu principle to suggest there was any obligation upon his Honour to treat the wife and the husband’s creditors equally, it too has no merit.
The Full Court’s decision in Lemnos came five years after the insertion of Part VIIIAA, including section 90AE, into the Act, and that section was referred to in the judgment.
Counsel for the former trustee submits that:
The second set of debts which fall within the purvey [sic] or [sic] s 90AE are those expenses incurred by the Trustee in Bankruptcy in the exercise of its statutory duties.
In this regard, counsel refers to the work in progress costs of the former trustee in a sum of $117,260, together with the various legal costs associated with the Adelaide proceedings and the proceedings before Judge Altobelli, and to “prepare the property for sale and have the property sold” (all referred to above) totalling $78,040.45.
There is an argument to be made that the costs order made by his Honour Judge Heffernan in the Adelaide proceedings is an irrelevant debt. Though unquantified under that costs order, the amount claimed in the former trustee’s case is an indemnity costs amount.
Beyond that, no costs order has been made in relation to the proceedings before Judge Altobelli or in relation to the balance of these proceedings. The first and the second Birtsos invoices contain an admixture of work relating to proceedings and work not relating to proceedings.
The “work in progress” amount claimed by the former trustee of $117,260 inclusive of GST is payable from the Husband’s bankrupt estate so far as there are funds available in the Husband’s bankrupt estate, not by any contribution from the Wife, and not, on the clear authorities, by increasing the property available in the Husband bankrupt estate at the expense of the Wife’s share of the matrimonial property pool prior to any alteration order under section 79.
The costs of the proceedings before Judge Altobelli and of the balance of the proceedings are not the subject of any costs order, nor will they be in this judgment. The issue of the costs of the application before Judge Altobelli was not raised in the final hearing and there is no evidence as to quantum or submissions in relation to the relevant considerations under section 117 of the Act.
Costs of the balance of the proceedings, including the final hearing, are not the consideration until after the result has been determined under section 79 and final orders made.
In the absence of a specific order to that effect, and as I have already said I do not regard the words in the order of 18 June 2019 “along with all other costs, charges and expenses of the sale of the property” as being such, I do not find that any order should be made imposing upon the matrimonial property pool some extra liability composed of costs and expenses associated with the selling of the unit or a property, the agents’ commission, and the legal costs of such sale for the legal practitioners acting on the sale for the vendors, having already been satisfied from the proceeds of sale.
Submissions were made by counsel for the former trustee that the order for the sale of the Suburb C property made on 18 June 2019 in the Adelaide proceedings was in the nature of the appointment of a trustee for sale. Leaving aside the jurisdiction and power question of applying the South Australian Act to New South Wales real property in a federal court, that is not the terms of the Act to which reference is made.
Counsel submitted that:
The orders made on 18 June 2018 do not provide for the parties to jointly sell the property.
I do not accept that submission, as I indicated during an exchange between Bench and Bar Table during the hearing. I note that order 8 of those orders empowered “The Applicant’s” [sic] to sign documents relating to the sale only in the event that “the Respondents are required to but fail refused to sign such documents within such time as required by the Applicants’ [sic] solicitors”.
Of course, at the relevant time, the Husband had no interest in the Suburb C property, though he was made a respondent to the Adelaide proceedings. On the evidence at final hearing, the trustee and the trustee’s solicitors ignored the full terms of order 8 and purported to execute documents to effect a sale without those documents being submitted to the Wife for signature in any way (not including the contract for sale, which was executed by the real estate agent at the auction).
I find that on the terms of the 18 June 2018 orders, the sale was by the former trustee and the Wife as vendors.
Within the terms of the 18 June 2018 orders, the former trustee incurred costs in making arrangements for the Wife to attend the Suburb C property and remove items of personalty. However, it is not up to the Court to pick out those costs from the schedules of costs annexed to the Second Respondent’s evidence in chief on final hearing, nor is it clear that they are entitled to those costs when one has regard to order 5.
I do not take into account as a liability relevant in identifying the matrimonial asset pool the “work in progress” claimed by the former trustee in the sum of $117,260. The former trustee must look to the Husband’s bankrupt estate for satisfaction of that claim.
I do not accept that the first Birtsos invoice and the second Birtsos invoice represent the former trustee’s reasonable costs of the Adelaide proceedings or “all other costs, charges and expenses of the sale of the property”. I have no assessment of those costs from those proceedings, only the former trustee’s indemnity costs figures.
It is not open to me to “perfect” that costs order by asserting the amount of costs payable by the Husband and the Wife as respondents in those proceedings (leaving aside that I cannot see how the Husband was an appropriate respondent and all), but nevertheless the costs order was made against the Wife, legitimate if only in relation to the making of the declaration in order 1.
In exercise of my discretion under section 79 in ascertaining the composition of the matrimonial asset pool and liabilities affecting the matrimonial asset pool, I find that there is a debt owed by the Wife to the trustee of the bankrupt estate of the Husband (whether the former trustee or the Official Trustee) in a sum of $5000. Any amount in excess of that that may have been assessed as payable by the Wife under that costs order is disregarded in terms of this exercise.
Accordingly, I find that the only asset for consideration in the matrimonial asset pool is the net proceeds of sale remaining from the sale of the Suburb C property in the sum of $313,216.54 composed of monies in the trust account of Birtsos Legal and the add-back previously referred to.
I find that the existing legal and equitable interests of the parties in the property, according to ordinary common law and equitable principles, is that the Wife is entitled to half of that sum and the Official Trustee as the trustee of the bankrupt estate of the Husband is entitled to the other half of that sum as vested bankruptcy property.
I find that the only liability to be taken into account in identifying a net value of the matrimonial asset pool is the sum of $5,000 that I have determined is the appropriate amount payable by the Wife in consequence of the Adelaide proceedings, payable to the Husband’s bankrupt estate.
I may be in error in determining a set sum as the liability of the Wife in consequence of those proceedings, but in that event, I would not set any sum as a liability to be taken into account in calculating the net matrimonial asset pool as the relevant costs order has never been quantified.
IS IT JUST AND EQUITABLE IN ALL CIRCUMSTANCES TO MAKE AN ORDER ALTERING THE INTERESTS OF THE PARTIES TO THE MARRIAGE IN THE PROPERTY AND/OR ALTERING THE INTERESTS OF THE BANKRUPTCY TRUSTEE IN THE VESTED BANKRUPTCY PROPERTY?
The parties separated in 2013, though to some extent under the same roof in a main home/granny flat arrangement until just before the sale of the Suburb C property. The only asset in relation to which the interests of the parties and the Husband’s trustee in bankruptcy may be altered under section 79 is the proceeds of sale of the Suburb C property.
The parties’ interests in the proceeds of sale are as to half by the Wife and the other half by the trustee of the Husband’s bankrupt estate. The Husband has no legal or equitable interest in the proceeds of sale.
I find that in this matter I am satisfied that in all the circumstances it is just and equitable to make an order under section 79 altering the interests of the parties in the property.
Contributions considerations
From the time of the parties’ marriage in 1994 until separation in 2013, the Husband was the principal financial provider for the family whilst the Wife was the principal if not sole contributor by way of homemaker and in relation to parenting of the parties’ six children, including Mr E who suffers from an intellectual disability.
At the time of the parties’ separation in 2013, all six of the parties’ children were still under 18 years of age, the eldest, Mr D, being 15 years of age and the youngest, Z, being 4 years of age.
From separation until the parties were removed from the Suburb C property in early 2020, the Wife was still principally responsible as between the Husband and the Wife for the day-to-day care and control of the children the marriage and was also contributing to their financial support by her Social Security entitlements.
Possibly before separation and certainly after separation, whilst the parties still resided at the Suburb C property, the Wife was the victim of family violence perpetrated against her by the Husband. While there is some evidence that this was at least in part the result of the Husband’s mental health issues, it is nevertheless the case that the Wife was a victim.
The evidence of the impact the family violence had on the Wife’s capacity to make contributions to the marriage is slim. There may have been some basis to find that the family violence by the Husband toward the Wife had such effect on her role as homemaker and parent for the children as to render those contributions more onerous than they would otherwise have been without the family violence, however the evidence of the Wife’s insistence on occasions that the Husband be allowed to remain at the property, even when opportunity was clearly presented to her to have him excluded from the property by court order mitigates against finding to that extent.
Accordingly, I do not find that the Wife’s contributions have, as an element, the considerations enunciated in Kennon & Kennon (1997) 139 FLR 118 and I must reject counsel for the Wife’s submissions to the contrary.
On the basis of the evidence reviewed by me earlier in these Reasons, I find that the contributions of the parties during cohabitation up to their separation were equal.
I find that the contributions of the Wife post-separation were significantly in excess of the contributions of the Husband in that period, by reason of the Wife’s ongoing day-to-day care and control of the children of the marriage and her role as homemaker for those children, while still ensuring (despite opportunities to the contrary) that the Husband had a safe place to live at the Suburb C property until the parties were removed from the property in January 2020.
The Wife’s contribution post-separation in relation to the children of the marriage continued up to the conclusion of the final hearing.
I find that consideration of contributions favours the Wife over that Husband as to 70% by the Wife and 30% by the Husband.
I do not find that any proposed order has any effect upon the earning capacity of either of the parties to the marriage.
ANY ADJUSTMENT UNDER THE CONSIDERATIONS SET OUT IN SECTION 75(2) - SECTION 79(4)(E)
The consideration of the matters in section 75(2) and assessment of whether there should be any adjustment between the parties in consequence of those considerations must be made in circumstances where there is no evidence before the Court by or on behalf of the Husband.
In this matter, where the competition in relation to any order altering the interests in the matrimonial asset pool of the Wife on the one hand and the trustee of the Husband’s bankrupt estate on the other, it is important to ensure that proper consideration is given to section 75(2)(ha), the effect of any proposed order on the ability of a creditor of a party to recover the creditors debt, so far as that effect is relevant (though strictly speaking, the creditors of the Husband’s bankrupt estate are not creditors of “a party” following the Husband’s discharge as a bankrupt), and section 75(2)(n), the terms of any order proposed to be made under section 79 in relation to vested bankruptcy property in relation to the Husband’s bankrupt estate.
At final hearing, the Wife was 48 years of age and the Husband 49 years of age. There is no evidence of the Wife having any adverse health circumstances. I have no evidence from the Husband as to his state of health.
The Wife’s financial circumstances are as set out in her Financial Statement completed and filed 9 July 2021. Even taking into account the cross examination of the Wife by counsel for the former trustee in relation to matters relating to her financial circumstances and her Financial Statement, I find that the Wife is in poor financial circumstances being reliant upon payments by way of income and being responsible for the financial support of the four minor children, W, X, Y, and Z, and also for her disabled adult son, Mr E.
There is no evidence as to the Husband’s financial circumstances.
The Wife has not been in paid employment since the time of the marriage in 1994. She gives evidence in her trial affidavit that she had previous training in the retail industry and has some hopes of seeking work by applying for work “and if needed go[ing] store to store with my resume asking for a job.” In that regard, the Wife is physically and mentally capable of engaging appropriate gainful employment, but her lack of work experience presents limitations on the range of employments she can seek and obtain.

There is no relevant evidence in relation to the Husband.
The Wife has ongoing parental control of the four children of the marriage who are under 18 years of age and is, on the evidence, solely responsible for their financial support. The commitments of the Wife necessary to enable her to support herself and the minor children of the marriage and her disabled adult son Mr E are in some part set out in her Financial Statement, but given the paucity of information in that statement, it cannot be a comprehensive statement of those commitments.
There is no evidence as to whether or not the Husband is responsible for the support of any other person other than his statutory obligation to financially support his minor children, and there is only the evidence of the Wife in Part D of her Financial Statement, item 13, indicating that she does not receive any child support payments.
The Wife is eligible for and receives the Family Tax Benefit, as deposed to in her Financial Statement, and also receives the Single Parent Pension as admitted by her during her cross examination, though the amount thereof is not in evidence. There is no evidence as to whether or not the Husband receives or is eligible for any pension, allowance or benefit under the laws of the Commonwealth, of a State or Territory or another country or to any superannuation fund or scheme.
Patently, on the evidence, the Wife must struggle to maintain a standard of living reasonable in the circumstances as a mother bringing up four minor children and with ongoing responsibility for her disabled adult child, on limited income, and without the evidence disclosing what assistance, if any, she receives from the Husband.
As I have stressed above, in giving attention to the considerations in section 75(2)(ha) and (n) relating to the creditors who proved debts in the bankrupt state of the Husband, I must consider the effect of any proposed order on the ability of a creditor of the Husband to recover the creditor’s debt. I must consider that matter in relation to the creditors who proved even though they do not come within the words “a creditor of a party”[35] in relation to the Husband, as they are creditors of the Husband’s bankrupt estate, the current trustee of which (the Official Trustee) is not a party to the proceedings.
[35] Emphasis added.
If the bankrupt estate of the Husband was left with half of the net proceeds of sale of the Suburb C property, that would be an amount of $156,608.27. The amounts that the former trustee, on the evidence, will claim from the bankrupt estate of the Husband for work in progress and monies expended in relation to the legal proceedings and the sale of the Suburb C property are significantly in excess of $156,608.27. The amounts the former trustee sets out in the evidence of Ms Birtsos as work in progress and expenditure, including on legal fees, are not subject to assessment on a party/party basis, but are, in effect, solicitor and client costs so far as they relate to expenditure on legal fees.
Accordingly, no order that may be made under section 79 that provides for the Wife to have only her half interest in the matrimonial asset pool or that alters that interest by adding to the Wife’s share from the interest of the bankrupt estate of the Husband will have any effect on the ability of the creditors who proved in the Husband’s bankrupt estate to recover their debts, as on the evidence, even half of the net matrimonial asset pool if left to the bankrupt estate of the Husband would be inadequate to satisfy the claims of the former trustee and any claims of the Official Trustee as trustee of that bankrupt estate before and after the former trustee, leaving nothing for the creditors who proved in the estate.
The extent to which the duration of the marriage has affected the earning capacity of the Wife has been referred to above.
The Wife continues her role as a parent of the parties’ minor children and is in need of as much capital financial resource as can properly be found appropriate under section 79 to protect her ability to continue in that role.
The Wife is not cohabiting with any other person and there is no evidence in relation to the Husband’s circumstances in that regard.
Any final order made under section 79 that alters in the Wife’s favour any part of the net proceeds of sale of the Suburb C property that, prior to orders, formed part of the vested bankrupt property of the Husband reduces the funds available in the Husband’s bankrupt estate to satisfy creditors who proved and statutory entitlements of trustees. The claims of the latter come before the former and often, as in this case, have the effect of leaving little or nothing for those creditors.
Even seeing the former trustee and the Official Trustee as in the nature of creditors of the bankrupt estate of the Husband, I find that a proper exercise of discretion when considering the position of such trustees (and the creditors who have been proved in the estate) as against the position of the Wife favours alteration in favour of the Wife from bankrupt estate of the Husband.
I find that there is no basis for any adjustment in favour of the Husband. I find that it is appropriate that there be an adjustment in favour of the Wife, at the expense of the bankrupt estate of the Husband, of 10%.
I find that there is no consideration relating to any other order made under the Act affecting the Husband or Wife or child of the marriage (there are no such orders) or in relation to child support that has an effect upon a determination of the appropriate order altering the interests of the parties in the property or of the bankruptcy trustee in the vested bankruptcy property.
CONCLUSION
The matrimonial asset pool, being the net proceeds of sale of the Suburb C property after the add-back of the monies withdrawn from that sum by Birtsos legal for satisfaction of the first Birtsos invoice is $313,216.54.
I have found it just and equitable to make a section 79 order adjusting the interests of the parties in the net proceeds of sale as to 80% to the Wife and 20% to the bankrupt estate of the Husband. That is equivalent to a sum of $250,573.23 going to the Wife and $62,643.31 to the bankrupt estate of the Husband.
I will then account for the ‘adjustment’ of the costs order made in the Adelaide proceedings that I have found to be in the amount of $5,000.
Accordingly, from the funds currently held in trust, the sum of $245,573.23 is to be paid out to the Wife or as she directs and the remainder ($67,643.31) is to be paid into the bankrupt estate of the Husband through the Official Trustee.
An order will be made that except as otherwise dealt with in the orders, the Wife is the sole owner of all personal property, financial assets and financial resources currently in her power possession or control and that the Husband is, subject to vested bankruptcy property of his bankrupt estate, the sole owner in law and in equity of all personal property, financial assets and financial resources currently in his power possession or control.
In relation to costs of these proceedings, a direction will be made that any application in relation to costs of these proceedings must be filed and served together with supporting evidence by way of affidavit or affidavits within 21 days of the making of final orders.

I certify that the preceding two hundred and twenty-six (226) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley.
Associate:
Dated: 24 February 2023

File number(s):	SYC 677 of 2020
Judgment of:	JUDGE MORLEY
Date of judgment:	24 February 2023
Catchwords:	FAMILY LAW – property – application for property order under section 79 – only asset to be considered in application being proceeds of sale of former matrimonial home – contributions prior to and during marriage equivalent between spouse parties – contributions post-separation significantly favour Wife – further adjustment appropriate in Wife’s favour. FAMILY LAW – property – Husband a discharged bankrupt – trustee of the Husband’s bankrupt estate not a party to the proceedings as at time of final hearing – former trustee of the Husband’s bankrupt estate a party to the proceedings at time of final hearing – matrimonial asset pool only comprised of the proceeds of sale of the former matrimonial home – former trustee expended sums from the net proceeds of sale for costs and disbursements – Court finds that such expenditure was unacceptable and sum added back. FAMILY LAW – property – previous undefended bankruptcy proceedings in Adelaide – bankrupt person resident in NSW – bankrupt estate comprised of assets in NSW – Federal Circuit Court of Australia sitting Adelaide – orders made pursuant to Law of Property Act 1936 (SA).
Legislation:	Bankruptcy Act 1966 (Cth) ss 58, 149, 153, 160. Bankruptcy Amendment Act 1999 (Cth) s 27. Conveyancing Act 1919 (NSW) s 66G. Family Law Act 1975 (Cth) ss 75, 79, 79A, 90AB, 90AE, 106A, 117. Federal Circuit Court of Australia Act 1999 (Cth) s 16. Judiciary Act 1903 (Cth) s 79. Law of Property Act 1936 (SA) ss 69, 70. Victims Rights and Support Act 2013 (NSW) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13.
Cases cited:	Dickons & Dickons [2012] FamCAFC 154 Fontana & Fontana [2018] FamCAFC 63 Grier & Malphas (2017) 55 Fam LR 107 Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395 In the Marriage of Harris (1991) 104 FLR 458 Jabour & Jabour [2019] FamCAFC 78 Kennon & Kennon (1997) 139 FLR 118 Needham & Trustees of the Bankrupt Estate of Needham [2017] FamCAFC 94 Stanford & Stanford (2012) 247 CLR 108 Trustee of the Property of G Lemnos, a Bankrupt & Lemnos and Anor [2009] FamCAFC 20
Division:	Division 2 Family Law
Number of paragraphs:	226
Date of last submissions:	6 June 2022
Date of hearing:	15 July 2021, 11 March 2022
Place:	Sydney
Counsel for the Applicant:	Ms Haughton
Solicitor for the Applicant:	Avondale Lawyers
Solicitor for the First Respondent:	The First Respondent did not appear
Counsel for the Second Respondent:	Mr O’Brien
Solicitor for the Second Respondent:	Birtsos Legal Pty Ltd

SYC 677 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	MS REZA Applicant
AND:	MR REZA First Respondent MR VINNEY AS TRUSTEE OF THE BANKRUPT ESTATE OF MR REZA Second Respondent

order made by:	JUDGE MORLEY
DATE OF ORDER:	24 February 2023