Rimac & Rimac
[2021] FedCFamC1F 333
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Rimac & Rimac [2021] FedCFamC1F 333
File number(s): SYC 1540 of 2014 Judgment of: MCCLELLAND DCJ Date of judgment: 21 December 2021 Catchwords: FAMILY LAW – PROPERTY – Settlement in relation to a marriage – Where the parties received significant damages settlements as a result of a motor vehicle accident – Where damages settlements formed part of the matrimonial asset pool – Husband’s financial affairs managed by NSW Trustee & Guardian – Where the wife was engaged as the husband’s full time carer – Where the husband has failed to make full and frank disclosure of assets and liabilities – Husband’s provision of a significant loan to his nephew – Add backs – Husband acted recklessly, negligently and wantonly with matrimonial assets – Where it is just and equitable for a property adjustment to be made – Property adjustment made in wife’s favour with respect to s 75(2) factors Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(2), 79(4)
Evidence Act 1995 (Cth) s 140(2)
Cases cited: Briese and Briese (1986) FLC 91-713
Briginshaw v Briginshaw (1938) 60 CLR 336
Carroll, Robyn and Hugh PK Kopsen, “The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure” (2017) 45 Federal Law Review 97
Coghlan and Coghlan (2005) FLC 93-220
DJM v JLM (1998) FLC 92-816
Efthimiadis & Efthimiadis (1993) FLC 92-361
Goddard Elliott v Fritsch [2012] VSC 87
Graf-Salzmann & Graf [2015] FCWA 68
Griffiths v Kerkemeyer 139 CLR 161
Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143
Kildea v Kildea (2007) 38 Fam LR 347
Kowaliw & Kowaliw (1981) FLC 91-092
Livesey v Jenkins (1985) 1 All ER 106
Manolis v Manolis (No 2) [2011] FamCAFC 105
McKenzie v McKenzie [1970] 3 All ER 1034
Omacini and Omacini (2005) FLC 93-218
Petruski v Balewa (2013) 49 Fam LR 116
Rimac & Rimac [2020] FamCA 675
Rimac & Rimac (No. 2) [2020] FamCA 919
Re R [..] NSWSC
Stanford v Stanford (2012) 247 CLR 108
Townsend & Townsend (1995) FLC 92-569
Trevi & Trevi (2018) FLC 93-858
Division: Division 1 First Instance Number of paragraphs: 201 Date of hearing: 3–5 May 2021 Place: Sydney (via videolink) Counsel for the Applicant: Mr Livingstone Solicitor for the Applicant: Hughes & Taylor The Respondent: Self-represented litigant with Mr C Rimac (McKenzie friend) ORDERS
SYC 1540 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS RIMAC
Applicant
AND: MR RIMAC
Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
21 DECEMBER 2021
THE COURT ORDERS THAT:
1.Within 28 days of the date of these Orders, the Husband shall do all acts and sign all documents necessary to transfer to the Wife the whole of his right, title and interest in the property situated at D Street, Suburb B, being the property contained in Folio Identifier …, at the expense of the Wife.
2.The Husband forthwith deliver up to the Wife's solicitor the original Certificate of Title for Folio Identifier ….
3.Except as any provision of these Orders provides to the contrary, the Wife is declared the sole legal and beneficial owner, to the exclusion of the husband the following assets:
3.1. P Street, Town M NSW.
3.2. Q Street, Town E NSW.
3.3. The proceeds of all bank accounts in her name.
3.4. Her jewellery, together with all furniture and house effects in her possession, custody or control.
3.5. Her R Company Shareholding.
3.6. Her Motor Vehicle 1.
4.Except as any provision of these Orders provides to the contrary, the Husband is declared the sole legal and beneficial owner, to the exclusion of the wife the following assets:
4.1. His Motor Vehicle 2.
4.2. The proceeds of all bank accounts held in his name.
4.3. Any remaining superannuation entitlements in his name.
4.4. Any other property chose in action or security held by the Husband in respect of any loans he has made and any funds he has advanced to his nephew, Mr O Rimac, or any other person.
5.5.1 Except as specifically provided for by any Order contained herein to the contrary, as against the Husband, the Wife is to be the sole owner of the assets named in Order (3) above and the Husband shall have no interest in all other personal property of whatsoever nature and kind in the possession, custody and control of the Wife as at the date of the making of this Order.
5.2 Except as specifically provided for by any Order contained herein to the contrary, as against the Wife, the Husband is to be the sole owner of the assets named in Order (4) above and the Wife shall have no interest in all other personal property of whatsoever nature and kind in the possession, custody and control of the Husband as at the date of the making of this Order.
6.Except as specifically provided for by these Orders to the contrary, each of the Husband and the Wife releases the other from all debts owing from one to the other.
7.The Husband and the Wife each shall do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders.
8.In the event that either the Husband and or the Wife refuses or neglects to execute any deed or instrument necessary to give effect to these orders, then a Registrar of the Court is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
9.Pending compliance with Orders (1) and (2) above, the Wife shall be entitled, to the exclusion of the Husband, to all rental incomes generated by the properties at D Street, Suburb B and/or P Street, Town M.
10.Notwithstanding s 121 of the Family Law Act 1975, the wife has liberty to provide a copy of these reasons for judgment to the husband’s daughters.
11.Within 14 days, the parties are to make such submissions as to costs that they deem appropriate, providing that those submissions do not exceed 3 pages.
12.Within 7 days after receipt of the parties’ submissions referred to in Order (11) above, the parties may file a brief submission in reply in respect to the issue of costs not exceeding 2 pages.
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 Rimac & Rimac is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
This matter concerns an Application for final orders filed on 29 May 2015 for the adjustment of the property interests of Ms Rimac (“the wife”) and Mr Rimac (“the husband”). I will shortly set out the unfortunate history to this litigation.
The parties were in a relationship for a period of 11 years and have been litigating this matter for six years. At cohabitation, the wife owned a house at D Street, Suburb B (“the D Street property”). I have found that she arranged to build a new home on the land without assistance from the husband. At the time the parties met, the husband was unemployed and in receipt of Social Security and the wife worked at a school.
Shortly after the commencement of their relationship, the parties established a business, which they operated together until they were involved in a serious motor vehicle accident in 2004. Both parties sustained serious injuries, with the husband receiving significant head injuries.
For a period of approximately four years from the commencement of the parties’ relationship, the husband’s daughter lived primarily with the parties.
The parties were, unfortunately, unable to continue working as a result of the injuries they sustained in the 2004 motor vehicle accident. Both parties were successful in damages actions relating to those injuries; the settlement for the husband was for $3,750,000 plus fund management costs of $639,860 and agreed costs of $150,000. The NSW Trustee & Guardian was appointed to manage the financial affairs of the husband. The wife was paid an allowance by the NSW Trustee & Guardian in respect to the caring responsibility she undertook to assist the husband.
It is not disputed that the damages received by the parties are respectively contributions that they each made to the parties’ marital property.
While there is dispute between the parties as to the extent of care provided by the wife to the husband in the period subsequent to the motor vehicle accident, I am satisfied that, with some assistance from medical professionals such as occupational therapists and some respite care, the wife provided significant care and assistance to the husband in the period subsequent to the accident until the husband commenced living with his brother, Mr C Rimac (“Mr C Rimac”), in March 2011.
Subsequent to the husband moving to live with his brother, a successful application was made by the husband to the Supreme Court of New South Wales to set aside the management of his financial affairs by the NSW Trustee & Guardian. The presiding judge found that the husband was capable of managing his own affairs, including in respect to matters of finance and this litigation.
Since the husband moved into accommodation with his brother’s family, there has been a significant reduction of funds in the possession of the husband. In these proceedings, it was conceded on behalf of the husband that the husband has provided significant funds to his nephew, the son of Mr C Rimac. Mr C Rimac has appeared, as a lay advocate, on behalf of the husband in these proceedings. For reasons which I will explain, I am satisfied that a significant portion of funds disbursed by the husband, including to his nephew and his brother, should be notionally added back into the matrimonial property pool.
In terms of an adjustment pursuant to s 79 of the Family Law Act1975 (Cth) (‘the Act’), I have found that, as a result of the substantially superior initial contributions of the wife, in the period from the commencement of their relationship until the parties were involved in the motor vehicle accident, the wife’s contributions exceeded those of the husband. However, as a result of the contribution in the form of the substantial damages settlement received by the husband, I have assessed that the husband’s contributions were superior to those of the wife in the period between 2004 and March 2011, when he commenced living with his brother. I have assessed the husband’s contribution in the period subsequent to the parties’ separation to also be superior to that of the wife as a result of the contribution of a lump sum superannuation payment that he received.
Having regard to the totality of the parties’ contributions over the course of their relationship and in the period subsequent to their separation, I have determined that, primarily having regard to the contributions made by the husband in the form of his damages settlement and the lump sum superannuation, an adjustment of 62.5 per cent in his favour is justified. In so determining, it is significant that I have included as notional add backs those funds which I have found to have been disbursed by the husband to his nephew and Mr C Rimac.
I have found that the wife is, however, entitled to an adjustment of 6 per cent pursuant to s 75(2) of the Act primarily as a result of the contribution she made to assist in caring for the husband’s daughter in the four years that she resided with the parties during their 11 year relationship, and also as a result of non-disclosure by the husband of rental income from a property which is owned by him.
Accordingly, I have determined that the final adjustment of the parties’ property should be 43.5 per cent to the wife and 56.5 per cent in favour of the husband.
The wife’s amended claim, however, as set out in Exhibit 3 of her proposed orders, is that the only property adjustment she seeks is for the husband’s interest in the D Street property to be transferred to her. As that property falls within the adjustment that I have determined to be just and reasonable, I have made an order in the terms sought by the wife. The wife otherwise seeks orders for the parties’ respective property and liabilities to remain in the respective parties’ own hands, I accept that such orders are appropriate.
APPLICATIONS
The wife seeks that orders be made in accordance with her Minute of Order, marked Exhibit 3 in the proceedings, as follows:
THE COURT orders:
1. That within 28 days of the date of these Orders the Husband shall do all acts and sign all documents necessary to transfer to the Wife the whole of his right, title and interest in the property situate [sic] at D Street, Suburb B, being the property contained in Folio Identifier …, at the expense of the Wife.
2. That the Husband forthwith deliver up to the Wife's Solicitor the original Certificate of Title for Folio Identifier ….
3. That except as any provision of these Orders provides to the contrary, the Wife is declared the sole legal and beneficial owner, to the exclusion of the husband the following assets:
3.1. P Street, Town M.
3.2. Q Street, Town E.
3.3. The proceeds of all bank accounts in her name.
3.4. Her jewellery together with all furniture and house effects in her possession, custody or control.
3.5. Her R Company Shareholding.
3.6. Her Motor Vehicle 1.
4. That except as any provision of these Orders provides to the contrary, the Husband is declared the sole legal and beneficial owner, to the exclusion of the wife the following assets:
4.1. His Motor Vehicle 2.
4.2. The proceeds of all bank accounts held in his name.
4.3. Any remaining superannuation entitlements in his name.
4.4. Any other property chose in action or security held by the Husband in respect of any loans he has made to his nephew Mr O Rimac or any other person.
5. 5.1 That except as specifically provided for by any Order contained herein to the contrary, as against the Husband, the Wife is to be the sole owner of and the Husband shall have no interest in all other personal property of whatsoever nature and kind in the possession custody and control of the Wife as at the date of the making of this Order.
5.2 That except as specifically provided for by any Order contained herein to the contrary, as against the Wife, the Husband is to be the sole owner of and the Wife shall have no interest in all other personal property of whatsoever nature and kind in the possession custody and control of the Husband as at the date of the making of this Order.
6. That except as specifically provided for by these Orders to the contrary each of the Husband and the Wife releases the other from all debts owing from one to the other.
7. That the Husband and the Wife each shall do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders.
8. That in the event that either the Husband and or the Wife refuses or neglects to execute any deed or instrument necessary to give effect to these orders, then a Registrar of the Court is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
9. That pending compliance with Orders 1 and 2 above the Wife shall be entitled to the exclusion of the Husband of all rental incomes generated by the properties at D Street, Suburb B and or P Street, Town M.
Although having many opportunities to file a response document or a Minute of Order, or put forward to the Court on the first day of hearing on 3 May 2021 the orders that he is seeking, the husband only expressed his opposition to the orders sought by the wife and articulated a desire to retain the D Street property.
EVIDENCE
The wife relies upon the following documents:
(a)Affidavit of the wife filed 21 April 2021;
(b)Affidavit of Mr S filed 21 April 2021; and
(c)Financial Statement of the wife filed 21 April 2021.
The husband relies upon the following documents:
(a)Response to Initiating Application filed 22 September 2015;
(b)Affidavit of the husband filed 24 September 2020 (marked ‘Exhibit 10’);
(c)Affidavit of the husband filed 9 September 2020 (marked ‘Exhibit 9’);
(d)Affidavit of Mr C Rimac filed 29 April 2021 (marked ‘Exhibit 8’);
(e)Financial Statement of the husband filed 29 April 2021 (marked ‘Exhibit 7’); and
(f)Financial Statement of the husband filed 24 September 2020 (marked ‘Exhibit 6’).
The following further exhibits were relied upon:
(g)Annexures to the Affidavit of Mr S filed 21 April 2021 (‘Exhibit 1’);
(h)Annexures to the Affidavit of the wife filed 21 April 2021 (‘Exhibit 2’);
(i)Minute of Order sought by the wife (‘Exhibit 3’);
(j)Excerpt of a bank statement of the wife for account ending #...47 (‘Exhibit 4’);
(k)Excerpt of a bank statement of the husband for account ending #...95 (‘Exhibit 5’);
(l)Financial Statement of the husband filed 5 October 2018 (‘Exhibit 11’);
(m)Excerpt of a bank statement of the husband for account ending #...28 (‘Exhibit 12’);
(n)Notice of Address for Service of the husband filed 14 April 2021 (‘Exhibit 13’);
(o)Excerpt of a bank statement of the husband for account ending #...28 (‘Exhibit 14’);
(p)Income Tax Return of the husband for the 2001 financial year (‘Exhibit 15’);
(q)Letter to Centrelink from the husband dated 1 March 2002 (‘Exhibit 16’);
(r)Medical Certificate of the husband dated 4 May 2021 (‘Exhibit 17’);
(s)Transfer documents of security property executed by the husband’s nephew (‘Exhibit 18’);
(t)Excerpts of bank statements of the husband for account ending in #...28 (‘Exhibit 19’);
(u)Excerpt of a bank statement of the wife for account ending #...47 (‘Exhibit 20’);
(v)Bundle of documents in respect to the husband’s account ending #...95 (‘Exhibit 21’);
(w)Amended balance sheet of the wife dated 12 August 2020 (‘MFI 2’).
PROCEDURAL HISTORY
To understand how these proceedings have been conducted, it is necessary to appreciate the background to the unfortunate history of litigation in this matter which, it must be noted, is due to no fault on the part of the wife and why, ultimately, I acceded to the husband’s request to be represented by his brother, acting as a McKenzie friend.[1]
[1] Being a reference to the decision of the English Court of Appeal in McKenzie v McKenzie [1970] 3 All ER 1034.
On 29 May 2015, the wife filed an Initiating Application in the Family Court of Australia.
In 2015 and 2016, a Registrar of the Court made a number of case management orders, many of which were ignored or only partially complied with by the husband. This resulted in several costs orders being awarded against him.
The matter was first allocated to the pool of matters awaiting allocation of a hearing date on 25 August 2016.
The husband has engaged a number of different firms of solicitors to act on his behalf, however, on 5 November 2018, he filed a Notice of Address for Service in which he provided an email address and a residential address at Suburb M in New South Wales.
On 19 February 2020, the solicitor for the wife emailed to the husband the notice of callover at the email address recorded on the husband’s Notice of Address for Service and also forwarded the callover notice to his postal address in Suburb M.
On 2 March 2020, the matter came before me in a callover and, on that occasion, the husband did not appear. I consequently made orders adjourning the matter for a period of five weeks, to 9 April 2020, for the purpose of the Court hearing from the husband as to the reason for his non-attendance. The husband was given notice, in the orders on 2 March 2020, that the Court would consider the matter proceeding on an undefended basis if he did not appear on the next occasion.
The orders of the Court made on 2 March 2020 were, on 4 March 2020, sent to the husband by way of email and letter addressed in accordance with the husband’s Notice of Address for Service as filed by him on 5 November 2018.
On 9 April 2020, following a further non-attendance by the husband, the matter was set down for an undefended hearing over two days commencing on 12 August 2020.
On 12 August 2020, the husband appeared before the Court by telephone and sought that the matter be adjourned. I acceded to the husband’s application by adjourning the proceedings for mention, for a period of six weeks to 24 September 2020, and I set the matter down for a defended hearing commencing on 24 November 2020 over four days. I delivered my reasons for judgment in respect to this issue on 18 August 2020.[2]
[2] Rimac & Rimac [2020] FamCA 675.
On 24 September 2020, the matter came before me for mention. On that occasion, I adjourned the proceedings for a further three weeks to enable to the husband to proceed in person.
On 16 October 2020, I heard the husband’s Application in a Case seeking various orders including, inter alia, an application for an adjournment of the final hearing in November.
On 2 November 2020, I delivered my decision in respect to the husband’s Application in a Case and made orders for the matter to be adjourned for a period of six months, and set down for a final hearing over five days commencing on 3 May 2021 at 10 am. The reasons for judgment delivered on that date noted that, in granting the adjournment for 6 months, I had considered the advice of the husband’s treating general practitioner that the husband would be unable to properly conduct legal proceedings for that period of time.[3]
[3] Rimac & Rimac (No. 2) [2020] FamCA 919.
On 21 April 2020, just over a week prior to the final hearing, the husband sent an email to my chambers which essentially sought to make an Application for a further adjournment of the May 2021 final hearing dates. The matter was subsequently listed for further mention on Monday, 26 April 2021.
On 26 April 2021, the matter was listed at 9.15 am and called. There was no appearance by the husband, despite the matter being called three times outside the body of the Court. At approximately 9.40 am, the husband arrived with his brother, Mr C Rimac. His brother indicated, at that time, that the husband was in a position to proceed with the hearing commencing on 3 May 2021, on the basis that the husband would be represented by Mr C Rimac. The solicitor for the wife consented to that arrangement.
On 4 May 2021, being the second day of the final hearing, a further Application was made for adjournment of the proceedings by Mr C Rimac on behalf of the husband. Mr C Rimac advised the Court that the adjournment was sought as a result of the husband being admitted to K Hospital the previous evening. Mr C Rimac advised the Court that the husband had been admitted due to stress, however no medical evidence was provided to the Court confirming that admission or setting out the state of the husband’s health.
By ex tempore reasons for judgment delivered on that day I explained my reasons for rejecting the adjournment application. At [3] of that decision I stated:
In determining and identifying what was an appropriate period of time for an adjournment of the final hearing of these proceedings, I made allowance for the fact that it would be necessary for the husband to retain legal advisers. It is clear that he only took steps to engage legal advisors very close to the impending hearing date and that such representation was not practicable.
At [5] of that decision I noted as follows:
In circumstances where I have set out the steps that this Court has taken to accommodate the husband, and in circumstances where the Supreme Court has determined that he is capable of managing his own affairs (see Re R […] NSWSC […]), and that the husband has repeatedly stated that he is capable of managing his own affairs and does not require the appointment of a litigation guardian, there is, in my view, no reason that has been presented to this Court as to why the hearing of this matter should not be finalised this week.
No further adjournments were granted during the proceedings however, at the conclusion of the proceedings, Mr C Rimac requested time to respond to submissions of the wife and leave was granted for the husband to provide written submissions. By directions made on 5 May 2021, I gave the husband leave to provide written submissions by 4 pm on 5 June 2021 and the wife was given leave to file written submissions in reply within 14 days of receipt of the husband’s written submissions. The parties filed their written submissions in accordance with that timetable.
BACKGROUND FACTS
The following summary of background facts is substantially based upon the affidavit evidence and oral evidence of the wife. I found the wife to be an impressive witness who answered questions in a direct, forthright and dignified manner. She generally had a sound recall of relevant facts and, where possible, was able to support her assertions with appropriate documentary evidence. The husband was not available for cross examination on his affidavits. Mr C Rimac, who gave evidence on behalf of his brother, was an unimpressive witness who continued to attempt his poor advocacy in the witness box and gave numerous inconsistent answers to direct questions, accepting the reality of specific facts only when they were clearly set out in documents presented to him by counsel for the mother. Where the evidence of the wife is inconsistent with that of the husband and Mr C Rimac, I have preferred the evidence of the wife.
In 1946, the wife was born in Country N. The wife goes by the name Ms Rimac, however, was born Ms L.
In 1956, the husband was born in Country N.
In 1959, the wife relocated to Australia and, in 1970, the wife became an Australian citizen.
The wife has three adult children born of a previous relationship. The husband also has three adult children born of a previous relationship.
On 8 June 1998, the wife purchased the D Street property for $280,000. The wife demolished the existing dwelling on the property and constructed a new house for the sum of $163,000.
On 17 August 1999, the wife constructed a new dwelling on the D Street property for a cost of $173,870.
In late 1999, the parties met.
In 2000, the parties commenced cohabitation at the D Street property. At the time of cohabitation, the wife was employed in hospitality and the husband was in receipt of a disability pension.
On 5 January 2001, the parties established a business registered as “T Company” and operated this business from the D Street property until December 2003. I am satisfied that the husband undertook the manual trade-related work associated with that business and that the wife also contributed to the business, primarily by way of undertaking office administration associated with the business.
In 2001, the parties married.
On 8 August 2001, the wife transferred half of her interest in the D Street property to the husband for the consideration of $1. Comparatively, the husband contends that he provided a sum of $100,000 to the wife at the commencement of their cohabitation at the D Street property in January 2000 and, from that time to August 2001, contends that he provided a further $150,000 to the wife. Aside from this mere assertion, no evidence has been presented in these proceedings that satisfies me that $250,000 was provided to the wife by the husband during this time period. In circumstances where I prefer the evidence of the wife, I do not accept that such payments were made by the husband to the wife.
In August 2001, the husband and wife obtained a mortgage from the Commonwealth Bank of Australia over the D Street property in the sum of $113,000. This mortgage discharged the wife’s previous loans in respect to the property and repayment of funds borrowed for improvements made to the property.
On 27 October 2003, the parties purchased a property at U Street, Town J (“the U Street property”), as tenants in common in equal shares, for the purchase price of $280,000. The purchase of the U Street property was financed by a loan from the V Bank in the sum of $350,000. The remaining portion of the V Bank loan was used to discharge the mortgage over the D Street property.
In early 2004, the parties were involved in a motor vehicle accident in W Town. The husband was severely injured in the accident and acquired a traumatic brain injury and other injuries. The wife was also injured and sustained injuries that were relatively less severe. The husband spent the following six month period in hospital. Both parties were unable to continue employment following this incident.
In June 2004, the wife received a gift of $83,000 from her father.
On 27 April 2006, the wife received $301,264 by way of settlement of her claim for personal injuries arising from the motor vehicle accident. This amount was the amount the wife received clear to herself, exclusive of litigation costs and expenses. The wife attests to gifting to the husband’s daughter and her three children $20,000 each from the lump sum she received in this personal injury settlement.. I accept her evidence.
On 23 June 2006, terms of settlement were filed in the District Court of New South Wales in respect to proceedings No. 2149 of 2005, awarding the husband compensation in the sum of $3,750,000, plus fund management costs of $639,860 and costs agreed of $150,000 (together, “the settlement monies”). The settlement monies were paid into an account held by NSW Trustee & Guardian. The husband received a regular allowance from the settlement monies invested on his behalf by the NSW Trustee & Guardian.
In July 2006, the Protective Commissioner, as they were then known (now NSW Trustee & Guardian), was appointed as the husband’s financial manager.
In late 2006, the wife was formally engaged by the Protective Commissioner as the husband’s full time carer and was paid a carer’s allowance from this time up until March 2011 in the sum of $1,200 per fortnight. There is a dispute between the parties regarding the level of care provided by the wife to the husband. However, I accept the wife’s evidence that, aside from periods where the husband received respite care, the wife cared for the husband on a full-time basis from about June 2004 up until their separation in March 2011. I further accept, that, during this period, the husband also received some assistance from health professionals, including occupational therapists.
In November 2006, the husband, with the assistance of the NSW Trustee & Guardian, purchased a property at X Street, Town J (“the X Street property”), in his sole name for the purchase price of $635,000. The monies were paid from the settlement monies. The wife contends that this property was rented, however, the husband has not disclosed any rental income. In the absence of the husband providing proper disclosure and in circumstances where the wife was a truthful witness and her evidence is plausible, I accept that the husband received rental income from the X Street property which has not been disclosed.
In 2007, the Protective Commissioner discharged the mortgage over the U Street property using the settlement monies.
In May 2007, the wife purchased a property at Y Street, Town M (“the Y Street property”) for the purchase price of $240,000. A mortgage over the property was obtained in the sum of $35,000. The wife contends that no money from the husband’s settlement monies was applied to this purchase. I accept her evidence in that respect.
In July 2007, the wife purchased a property at P Street, Town M (“the P Street property”), in her sole name, for the purchase price of $225,000. The wife contends that the remaining funds she received from her settlement in respect to the motor vehicle accident, as well as $50,000 gifted to her by her father, were applied to the purchase of the property and a mortgage was obtained in the sum of $140,000 for the remainder. The wife attests that none of the husband’s settlement monies were applied to the purchase of this property and I accept that evidence.
On 10 December 2009, the wife purchased a property at Z Street, Town J (“the Z Street property”), in her sole name, for the purchase price of $320,000. A mortgage over the property was obtained in the sum of $321,000. Again, I accept the wife’s evidence that none of the husband’s settlement monies were applied to this purchase.
On 2 April 2010, the wife’s father passed away. The wife’s father’s estate was inherited by the wife’s step mother. The wife and her three siblings received $30,000 each by way of an early release of their inheritance of the wife’s step mother’s estate in circumstances where the wife’s father’s estate had passed to her step mother.
In July 2010, the wife sold the Y Street property for the sum of $226,000 and applied $200,000 of the proceeds of sale to the mortgage over the Z Street property.
On 10 February 2011, the husband suffered a seizure and was taken to the Emergency Department at K Hospital. He has had several admissions since that time.
On 30 March 2011, the parties separated on a final basis and, in 2014, the parties divorced. The husband has resided with his brother, Mr C Rimac, and his family since separation.
On 6 April 2011, the husband applied for an Apprehended Personal Violence Order (‘AVO’) at Suburb AA Local Court. The order was sought against the wife. That application was later withdrawn following the wife giving undertakings on a without admissions basis. The husband relies upon the fact that the AVO was made as corroborative evidence of his assertions that he was mistreated by the wife during the period of their relationship including, most relevantly, in the period subsequent to the parties’ motor vehicle accident in 2004 and prior to 2011. I do not, however, accept that submission. No credible evidence has been presented that the husband was in any way been mistreated by the wife. To the contrary, the evidence satisfies me that, in the period prior to the parties’ separation, the wife provided extensive care and support for the husband.
On 26 May 2011, the wife received $11,512 from Super Fund 1 and applied $10,000 of those monies to one of the mortgage liabilities held in her name.
On 23 December 2014, the Supreme Court of NSW revoked the financial management order that the Protective Commissioner manage the husband’s financial affairs. His Honour’s decision was delivered on 19 December 2014 (“the Supreme Court decision”).[4]
[4] Re R […] NSWSC ….
Relevantly, the Supreme Court decision noted the following;
·Pursuant to the settlement of his personal injury claim, the husband received $3,750,000 plus fund management costs quantified at $710,204, additional treatment and other out-of-pocket expenses as well as a contribution to legal costs.
·On 14 July 2006, the then Protective Commissioner received $4,388,488.05 as a result of the settlement.
·The wife had received a carer’s allowance for her role in caring for the husband in the sum of $1,320 per fortnight prior to the parties’ separation.
·On 27 May 2011, the NSW Trustee & Guardian received a request for payment from Mr C Rimac for payments of $2,600 per week, consisting of a carer’s allowance of $800 per week, accommodation, board and lodging of $600 per week, living expenses of $700 per week and additional personal income of $500 per week. In response to that application, the NSW Trustee & Guardian ultimately approved payments totalling $1,950 per week consisting of a carer’s allowance of $800 per week to be paid to Mr C Rimac, a further $400 per week to be paid to Mr C Rimac for providing the husband with accommodation and food, and $50 per week for petrol on production of receipts. The husband was provided with a personal allowance of $700 per week, which, it was noted, was the same amount that had been provided to the husband during the period that he was under the care of the wife.
·On 9 November 2011, the NSW Trustee & Guardian wrote to the husband expressing concern regarding the rate of depletion of his managed funds and noted a decision to reduce the husband’s weekly allowance from $700 to $500 per week effective from 25 November 2011. However, the allowance was subsequently reinstated to $700 per week.
It is not disputed that at [104] of the Supreme Court decision;
… concluded that the plaintiff is capable of managing his affairs and the financial management order should be revoked. There should be an order that the NSW Trustee do what is necessary to transfer control of the plaintiff’s assets to the plaintiff or as he might direct in writing.
By notice provided to the husband, the NSW Trustee & Guardian advised that, as at 4 May 2011, the husband had assets to the total value of $4,241,210.55. The assets included an assessment that the husband had a 50 per cent interest in the D Street property. The date of the assessment of the husband’s assets is significant because it was approximately six weeks after the parties separated and the wife had ceased to have any involvement in caring for the husband or managing his financial affairs. As will be set out in this decision, the husband’s assets have been significantly depleted in the period subsequent to that assessment.
On 25 August 2016, by consent, orders were made for the U Street property to be rented out and the rental income to be disbursed to the husband and wife in equal shares. The wife has not received any rental income from the property. As noted, particulars of rental income received have not been provided by the husband.
In April 2018, the wife sold the Z Street property for the sum of $416,000. She received $371,135 in sale proceeds and purchased a property at Q Street, Town E (“the Q Street property”) for the purchase price of $450,000. The balance of the purchase price of the Q Street property was financed by a mortgage from the Commonwealth Bank of Australia in the sum of $110,000.
By way of financial statement dated 5 October 2018, marked Exhibit 11 in the proceedings, the husband stated as follows:
·That he held property to the value of $1,275,000, which was identified in attachment A as being a 1/2 share in the D Street Property and a 1/2 share in the U Street property.
·That, as at 10 August 2018, he had funds of $140,862 with Commonwealth Bank.
·That he had paid $20,000 into a lawyer’s trust account.
·That he owned a Motor Vehicle 2 with a value of $10,000.
·That he had the financial resource in the form of a loan to his nephew, the son of Mr C Rimac, in the sum of $2,245,000. The particulars of that loan are provided in a notation to that financial statement, which relevantly stated that the loan was to be for the purpose of purchasing land with a view to building a block of units on the land. The statement attests that the amount of the loan provided on 29 April 2015 was initially $1,500,000, however, as at 10 August 2018 that loan had increased to $2,245,000.
The significance of the husband attesting that the value of the loan to his nephew as at 10 August 2018 was $2,245,000 is important because, as I will set out below, subsequent to that period, the husband had sold both the U Street property and the X Street property and has not disclosed how the net proceeds of those property sales have been disbursed. The three sums, that is, the loan to his nephew, the receipt of net proceeds from the U Street property sale and the sale proceeds from the X Street property become relevant to the assessment that I make that an amount equivalent to the combined total of those three sums should be notionally added back to the matrimonial property pool. For reasons which I subsequently explain, I have also included, as a notional add back, superannuation funds which have been received by the husband, the disposal of which has not been disclosed by the husband, as well as an amount to unexplained payments made to Mr C Rimac.
In that respect, at paragraph 103 of his affidavit dated 28 April 2021, Mr C Rimac in his capacity as the lay advocate for the husband, attests that “the X Street property was sold in about 2019 for approximately $540,000.00 (estimated)”. In circumstances where documents relating to the sale have not been disclosed, I accept that the X Street property was sold for a net amount of $540,000 in circumstances where the evidence establishes that it had been acquired without an overdraft. I accept that higher sum, in the circumstances of nondisclosure, as opposed to that which was asserted to be the case by Mr C Rimac in giving oral evidence, where he attested that the property had been sold for $450,000 (Transcript 5 May 2021, p.151 line 5). As noted, in the absence of disclosure as to how those funds have been applied, it has been included in the amount notionally added back to the parties’ property pool.
Additionally, at paragraph 104 of that same affidavit, Mr C Rimac states that “Mr Rimac is cashing in his Super Fund 2 entitlements to cover his living expenses.” During the course of giving oral evidence, Mr C Rimac attested that the husband had, as at the date of his evidence, meaning 5 May 2021, received his superannuation entitlement which Mr C Rimac stated was “around $300,000” (Transcript 5 May 2021, p.151 line 10). In circumstances where the husband has not disclosed documentation relating to the receipt of that superannuation payment, I accept the wife’s contention that the Court should infer that the superannuation payment was at the amount as noted by the NSW Trustee & Guardian on 23 April 2010, being the sum of $428,568.98 (Transcript 5 May 2021, p.151 line 41). In circumstances where the payment to the husband of that superannuation has occurred, and in the absence of nondisclosure as to how those funds have been applied, I will also add that amount as notional property to the balance sheet.
In March 2020, the U Street property was sold for a sale price of $380,000. The settlement statement from the conveyancing agent, annexure “R – 27” to the wife’s affidavit, states that from the sale proceeds the sum of $299,662.39 was paid to “Mr O Rimac.” At paragraph 117 of her trial affidavit, the wife stated that it is her understanding that the reference to “Mr O Rimac” is a reference to the husband’s nephew Mr O Rimac. In the absence of adequate disclosure by the husband and in light of subsequent financial statements filed by the husband to which I refer immediately below, I accept and agree with the inference that the funds were in fact paid to Mr O Rimac. It is to be noted that the date that those funds were so paid to the husband’s nephew post-dated the date that the husband attested that he had already lent the sum of $2,245,000 to Mr O Rimac.
In his financial statement dated 21 September 2020 and filed on 24 September 2020, the husband stated that the property he owned included the following;
·a 1/2 share in the D Street property, which he valued at $1,500,000
·a 1/2 share interest in the P Street property, which he valued to be $175,000
·a 1/2 share in the Q Street property, which he valued to be $225,000
·Funds in bank, estimated at $1,400,000
Significantly, the husband did not identify the loan which he had provided to his nephew in the sum of $2,245,000 but, by way of a note to paragraph 37 of the financial statement, the husband relevantly states as follows:
Because of my health I have given my money to my nephew Mr O Rimac and I told him that he can do with it as he wishes and that he will take care of me for the rest of my life and all my weekly needs.
I have done this from my own free will and Mr O Rimac is like a son to me he helps me and protects me every day with whatever I need in my life. This was my decision unlike all the decisions made for me by Ms Rimac and the ones who supported her.
In his financial statement filed on 29 April 2021, the husband relevantly stated that the rent he was paying his brother had increased to $650 per week and, in addition, he was paying rates and unit levies to an estimated amount of $200 per week. During the course of these proceedings, Mr C Rimac attested that the husband is currently paying him, via payments being made through the husband’s nephew, the sum of $1000 per week for caring expenses together with rent of $650 per week.
In that financial statement, filed on 29 April 2021, the husband asserted that his property was as follows:
·the half share interest in the D Street property, which he claimed had the value of $1,500,000
·the half share interest in the P Street property, which he estimated to be worth $175,000
·A one half share interest in the Q Street property, which he estimated to be worth $225,000
·Funds in bank account ending #...28, estimated at $1,227,800
Again, significantly, the husband did not identify the loan which he had provided to his nephew in the sum of $2,245,000 and included the same notation to paragraph 37 as was set out in his earlier financial statement dated 21 September 2020 in respect to giving his money to his nephew.
The D Street property is currently rented and the wife uses the rent as her primary source of income.
In his voluminous affidavit material, including the affidavit of Mr C Rimac and, also, in the written submissions filed on behalf of the husband after the conclusion of evidence in these proceedings, assertions were made that the husband was mistreated by the wife during the course of the parties’ relationship including, most relevantly, after he sustained his injuries in the serious motor vehicle accident in 2004 to which I have earlier referred. The evidence presented by the husband has failed to satisfy me that any such abuse or mistreatment occurred and, as I have made clear, the evidence presented by the wife, who was an impressive witness, satisfies me to the contrary. That is, I am satisfied that the wife provided extensive care and assistance to the husband during the course of their relationship.
The husband has also sought to establish, in the evidence he has presented, including that to which I have referred above, that the wife improperly accessed funds of the husband to which she was not entitled. Again, the evidence presented by the husband has failed to satisfy me that this has occurred. The high point of the evidence against the wife to that effect were questions put to the wife by Mr C Rimac that she had improperly withdrawn the sum of $78,000 from an account of the husband (Transcript 3 May 2021, p.28 line 8 to p.30 line 13). The evidence establishes that the amount of $78,000 was actually paid to the wife by the NSW Trustee & Guardian with a notation marked “GVK” (Exhibit 5 and Transcript 5 May 2021, p.190 line 10 to p.191 line 14). I accept that it can reasonably be inferred, in the context where the husband had received a substantial damages settlement as a result of the injuries which he received and in circumstances where his financial affairs were being managed by the NSW Trustee & Guardian, that the reference to “GVK” was a reference to the well-known decision of the High Court of Australia in Griffiths v Kerkemeyer 139 CLR 161, which recognised that an appropriate component of compensation for injury resulting from tortious conduct may include a component representing the cost of voluntary services provided by a friend or relative of the injured person.
In summary, the husband has failed to satisfy me that the wife has, in any way, misapplied funds received by the husband by way of his damages settlement or, for that matter, any other funds in the hands of the husband. This is confirmed by the actuality. The evidence to which I have earlier referred establishes that, as at the date of separation of the parties, the husband had significant assets available to him. This was in circumstances where the husband’s injuries had occurred some seven years earlier. Comparatively, in the period subsequent to separation, the assets available to the husband have been depleted to the point where the evidence set out in his most recent financial statement attests that he has $15,000 left in a bank account.
Inadequate disclosure
In this matter, the husband has failed to provide adequate disclosure. As a result, I have inferred that the husband has in his possession or control the substantial portion of settlement monies he received arising from his personal injury action following the 2004 motor vehicle accident to which I have referred.
An important aspect of family law proceedings is a party’s obligation to comply with the rules of disclosure. That obligation exists both at common law and pursuant to statute. In Briese and Briese (1986) FLC 91-713 at 75,181, Smithers J applied the House of Lords decision in Livesey v Jenkins (1985) 1 All ER 106 in determining that:
… in financial proceedings between spouses each party must make a full and frank disclosure of all material facts. In that case it was made clear that full and frank disclosure was required as a matter of principle in the light of the fact that it was the duty of the court, taking into account a number of designated criteria, to make a decision which basically involved the exercise of a discretion.
(Emphasis added)
His Honour further stated at 75,181:
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.
(Emphasis added)
In terms of the parties’ statutory obligation of disclosure, the following rules of the then applicable Family Law Rules 2004 (“the Rules”) are relevant. Rule 13.01(1) of the Rules relevantly provided that:
Subject to subrule (3), each party to a case has a duty to the court and to each other party to give full and frank disclosure of all information relevant to the case, in a timely manner.
Further, Rule 13.04(1)(a) provided that “[a] party to a financial case must make full and frank disclosure of the party's financial circumstances.”
Clause 1 of Part 1 of Schedule 1 of the Rules relevantly provided that:
(1)Each prospective party to a case in the Family Court of Australia is required to make a genuine effort to resolve the dispute before starting a case by:
…
(c) complying, as far as practicable, with the duty of disclosure.
Further, clause 6 of Part 1 of Schedule 1 of the Rules relevantly provided that:
(6) At all stages during the pre-action negotiations and, if a case is started, during the conduct of the case itself, the parties must have regard to:
…
(i) the duty to make full and frank disclosure of all material facts, documents and other information relevant to the dispute.
Note: The duty of disclosure extends to the requirement to disclose any significant changes (see clause 4 of this Part).
(Emphasis added)
The fact that the obligation of disclosure exists as a duty to the Court, as well as to the other party, is significant. It is also significant that the obligation is in respect to the disclosure of “information relevant to the dispute”, not simply one that attaches to the production of documents.
Of significance in the context of these proceedings is that the obligation of disclosure included an obligation to disclose “any disposal of property” that may “affect, defeat or deplete a claim”: Rule 13.04(1)(g).
In this matter, as a result of the inadequacy of the husband’s disclosure, I infer that he retains possession and control of the substantial portion of settlement monies he received from the litigation he commenced in respect to personal injuries he sustained a motor vehicle accident. In so inferring, I note that the authorities confirm that there can be evidentiary findings made as a result of a party’s failure to comply with their obligations of disclosure. Robyn Carroll and Hugh PK Kopsen, “The Importance of Full and Frank Disclosure in Family Law Financial Proceedings and the Many Consequences of Non-Disclosure” (2017) 45 Federal Law Review 97, usefully summarised some of the relevant authorities dealing with that issue at pages 109–110, as follows:
As a consequence of the rule, the Full Court of the Family Court has found that the failure by a party to disclose relevant financial information may lead the court to draw adverse inferences against that party, provided there was material upon which such an inference could be based. Many instances exist where such inferences have been drawn by the court. In Hall v Hall, for instance, an adverse inference was drawn from the failure of a wife to lead evidence to explain why she had not received financial support once she was aware it was available to her at the discretion of the executor of her late father’s will.
(Footnotes omitted)
In this matter the husband has, in his financial statements, stated that he has provided funds to his nephew who he anticipates will take care of his daily needs from those funds and, further, Mr C Rimac has stated that the husband’s nephew is holding between $1.5 million to $3 million on behalf of the husband.
In Graf-Salzmann & Graf [2015] FCWA 68 at [287], Walters J noted:
… a judge is entitled to take a “robust view” in relation to findings regarding a party’s financial position (including a party’s capacity to meet any proposed order) where that party has failed to make full and frank disclosure of his/her financial position: see Chang v Su (2002) FLC 93-117 at [71] and [72].
In Efthimiadis & Efthimiadis (1993) FLC 92-361 at 79,804, the Full Court said:
So far as the wife is concerned, there is no doubt that she should be treated as substantially understating her income… The circumstance that the wife had a significantly greater income that she deposed to was very damaging to her on issues of credit overall and virtually ensured that she was put out of Court so far as s75(2) factors were concerned.
As noted in Goddard Elliott v Fritsch [2012] VSC 87 at [894]–[895] by Bell J:
When it comes to making findings on the evidence, the non-disclosure of a party, and the appropriation by a party of matrimonial property for themselves, may be taken into account when making findings on the evidence. The applicable principle was enunciated in In the Marriage of Weir:
This court has pointed out in a line of cases leading up to the recent decision of the Full Court, … that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs.… It is clear enough from his Honour’s findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour’s findings in this case, then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
It can be seen that the non-disclosure, like an adverse finding as to credit, is a reason “not to be unduly cautious” about making findings in favour of the innocent party. But it is not a basis, upon its own, for deciding an application against the non-disclosing party. There must be “an underlying body of evidence from which such conclusions can be drawn”.
In cases of non-disclosure, the court must still do the best it can, even if the findings have to be imprecise; further, the court may “err on the side of generosity to the party who might be otherwise be [sic] seen to be disadvantaged by the lack of complete candour”.
(Footnotes omitted)
In this matter, at paragraphs 103 to 110 of the wife’s affidavit filed on 21 April 2021, she provides evidence, which I accept, of the husband’s nondisclosure. Further, I have earlier detailed the father’s nondisclosure in respect to his application of the proceeds of sale of two parcels of real estate, together with receipt of his superannuation entitlement.
I will also subsequently refer to payments made by the husband to Mr C Rimac, which have not been disclosed.
I have therefore taken the husband’s nondisclosure into consideration in my decision to include a number of items as notional add back of property on the balance sheet of the parties’ assets and liabilities.
CONDUCT OF THE HUSBAND’S BROTHER AND NEPHEW
During the course of these proceedings, counsel for the wife, justifiably in my view, expressed serious concern regarding the conduct of the husband’s brother and his nephew, who was available but was not called by the husband to give evidence in these proceedings.
In the assessment of potentially improper conduct I am bound by s 140(2) of the Evidence Act 1995 (Cth) (“the Evidence Act”) to take into account “the gravity of the matters alleged.” The allegations made by the wife in the course of litigation that both Mr C Rimac and the husband’s nephew have exploited the husband to their own advantage are very serious.
Further, where inference involves “grave moral delinquency”, the standard of proof remains on the balance of probabilities but the application of that standard, as s 140(2) of the Evidence Act reflects, recognises that “exactness of proof” is required: Briginshaw v Briginshaw (1938) 60 CLR 336 at [362]–[363].
As a result of accepting the evidence set out in the husband’s financial statement filed on 29 April 2021 that substantial funds are being held on his behalf by his nephew, which are being applied for his benefit, and that evidence was confirmed by Mr C Rimac, the husband’s brother, I have not found that either or both Mr C Rimac or the husband’s nephew to have engaged in what counsel for the wife contended was fraudulent conduct to remove the husband’s property from him.
If I am wrong in that finding and it is in fact the case that Mr C Rimac and the husband’s nephew have deprived the husband of access to his funds, then I respectfully agree that it is a serious matter that warrants criminal investigation.
While it would be unreasonable to expect the wife to take the initiative of reporting a possible offence, I will make an order enabling the wife to provide a copy of these reasons for judgment to the husband’s children so that they can individually, or collectively, make a determination as to whether further investigation is warranted.
As noted, however, this decision is based on the acceptance of the evidence that the funds, to which I refer as representing the balance of a substantial damages settlement which the husband received in 2006, are being held by the husband’s nephew on the husband’s behalf and that those funds will be applied for the benefit of the husband in the future.
THE LAW – CONCEPTS AND PRINCIPLES
Insofar as is relevant in these proceedings, s 79 of the Act sets out the following:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In exercising that discretion, the court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Since the decision of the High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), there has been some debate as to the approach that should be taken by the courts in the exercise of its discretion pursuant to s 79 of the Act.
Prior to Stanford, the Family Court had established principles for determining what kind of order is just and equitable under s 79(2) of the Act. In the leading case of Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143, the Full Court held at [39] that the preferred approach was to adhere to the following four steps:
(a)Identify and determine the value of the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(b)Identify and assess each of the parties’ financial and other contributions up until the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(c)Assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(d)Step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
That approach had been endorsed many times: see, for example, Manolis v Manolis (No 2) [2011] FamCAFC 105 at [63] (per Coleman, May and Ainslie-Wallace JJ); Kildea v Kildea (2007) 38 Fam LR 347 at [104] (per Finn, May and Boland JJ); Coghlan and Coghlan (2005) FLC 93-220 at [22] (per Bryant CJ, Finn and Coleman JJ) and [142] (per O’Ryan J). However, as the High Court noted at [35] in Stanford, s 79(2) of the Act provides that the Court shall not make an order altering the interests of the parties to the matrimonial property, “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Accordingly, since Stanford, it has generally been the practice of the Court to determine, as an initial issue, whether it is just and equitable to make an adjustment of marital property.
More generally, in Petruski v Balewa (2013) 49 Fam LR 116, the Full Court stated at [49]:
The task of assessing contributions under s 79 of the Act is an holistic one; what is required is to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship: Dickons v Dickons [2012] FamCAFC 154 (Dickons). As was also said by the Full Court in Lovine v Connor [2012] FamCAFC 168 at [40] and [41] (Lovine) such an evaluation “inevitably involves value judgments and matters of impression”, and accordingly it cannot be treated as “a mathematical exercise.”
CONSIDERATION
Is it just and equitable to make a property adjustment?
The wife has sought an adjustment of the parties’ property interests pursuant to s 79 of the Act. In that regard, in Stanford, the High Court said at [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).
In circumstances where the parties have not resided together since March 2011 and desire to sever their financial relationship with each other, I am comfortably satisfied that this case falls within the category of cases identified by the High Court in Stanford where it is just and equitable to make an order adjusting the parties’ property pursuant to s 79 of the Act.
Balance sheet
The husband, unfortunately, failed to engage with the wife in assisting the Court to identify the respective assets and liabilities of the parties.
The wife contended that the assets and liabilities of the parties, including notional add backs, were, as set out in the amended balance sheet marked MFI 2, as follows:
124 Ownership
Description
Wife’s value
Husband’s value
ASSETS 1. W Q Street Town E $ 450,000 E $ 2. W P Street Town M $ 295,000 E $ 3. W ANZ Account …47 as at 20.07.2020 $ 1,433 E $ 4. W CBA Pensioner Security Account …96 as at 20.07.2020 $ 5,800 E $ 5. W R Company Shares (840) as at 20.07.2020 $ 5,325 E $ 6. W Motor Vehicle 1 $ 8,500 E $ 7. W Jewellery $ 3,000 E $ 8. H& W Furniture furnishings and household effects $ 2,000 E $ 9. H& W D Street, Suburb B $ 1,950,000 E $ 10. H Motor Vehicle 2 $ 5,000 E $ 11. H Loan to Mr O Rimac (nephew of Husband) $ 2,245,000 E $ 12. H Bank account Commonwealth Bank a/c…28 as at 23.03.2020 $ 1,081 E $ Total $ 4,972,139 E $
ADDBACKS 13. H Monies disposed of since December 2014 by the Respondent and not accounted for other than ordinary living expenses $ 1,044,599 E $ 14. H Net proceeds of sale of X Street, Town J sold by Husband September 2016 for
$520,000.00
$ 501,095 E 15. H Net proceeds of sale of U Street, Town J, paid to Mr O Rimac – March 2020 $ 326,233 E Total $ 1,871,927 E $
LIABILITIES 16. W Home Mortgage to CBA (Q Street Town E) $ 98,000 E $ 17. W Mortgage to CBA (PAvenue Town M) $ 32,000 E $ 18. W ANZ Visa Card as at 20.07.2020 $ 1,400 E $ 19. H Outstanding Cost Orders Family Court of Australia 8 October 2018, 15 July 2016, 24
March 2016
$ 4,895 E 20. H Outstanding Cost Order Full Court of the Family Court 21 March 2019 $ 4,800 E Total $ 141,095 E $ SUPERANNUATION Member
Name of Fund
Type of Interest
Wife / de facto partner’s value
Husband / de facto
partner’s value
21. W Not Applicable NIL 22. H Not Known NK NK Total FINANCIAL RESOURCES Ownership
Description
Wife / de facto partner’s value
Husband / de facto
partner’s value
23. W Not Applicable NIL 24. H Not Known NK Total $ 0 $ 0
Further to amounts included in that balance sheet, at question 37 of his most recent financial statement, the husband stated that he had funds at bank of $15,000.
The husband also declared ownership of a Motor Vehicle 2, the value of which he states to be $5,000. I therefore include that value as an admission against interest.
In support of the value of the major asset set out in the balance sheet, the D Street property, the wife relies upon an affidavit of a valuer, Mr S, filed on 21 April 2021. No issue was taken as to the validity of that valuation by Mr S, nor was he required for cross examination by the husband. On the basis of that valuation, I accept that the value of the D Street property as at the date of the hearing was $1,950,000.
In circumstances where the husband has not constructively engaged in these proceedings, including for the purpose of identifying the value of the assets of the parties, in determining a just and equitable adjustment of the parties’ property I have included the values of the Q Street Property and the P Street property to be that set out in market appraisals obtained by the wife. In so doing, I note that the values stated by the wife are not significantly different to those identified by the husband. The wife contends that the value of the Q Street property is $450,000. In paragraph 36 of his financial statement filed on 29 April 2021, the husband estimates the value of that same property to be $500,000. For reasons which I have explained, I accept the wife’s estimate of the value of the Q Street property.
The wife contends that the value of the P Street property is $295,000. Again, the wife was not challenged on that estimate. At paragraph 36 of his financial statement filed on 29 April 2021, the husband estimates the value of that property to be $350,000. For reasons which I have explained, I accept the wife’s estimate of the value of the P Street property.
The wife was not challenged on her evidence that she has funds in a pensioner security account in the sum of $5,800, nor was the wife challenged on her evidence that she owns R Company shares valued at $5,325 as at 20 July 2020.
There was no valuation provided in respect to the wife’s motor vehicle, which she estimates to be valued at $8,500. Nevertheless, I respectfully agree with the submission of counsel for the mother that the wife’s inclusion of that amount is an admission against interest because, in considering the apportionment of the parties’ property, that amount will be regarded as property already in the hands of the wife.
Similarly, I accept the wife’s valuation of jewellery at $3,000 as being an admission against interest, as is the wife’s acknowledgement of owning furniture and household effects to the value of $2,000.
I have included the amount of $15,000 identified by the husband as funds in a bank account as well as, as noted, the value of the Motor Vehicle 2 in the sum of $5,000.
For reasons which I discuss immediately below, I have included the amount that the husband has previously declared as a loan to his nephew as a notional add back. This is in circumstances where, in his more recent financial statements, the husband has failed to formally acknowledge the existence of that arrangement as representing one whereby his nephew has a legal obligation to repay monies advanced to him by the husband. Nevertheless, I am satisfied that funds at least in that amount have been disbursed to the nephew such that, if there is no accounting for that disbursement, they will have been unfairly removed from the jurisdiction of the Court in determining what is a just and equitable adjustment of the parties’ property. `
Addbacks
In Omacini and Omacini (2005) FLC 93-218 at 79,617, the Full Court identified three categories where it may be appropriate to notionally add back an item of expenditure, as follows:
(1)Where the parties have expended money on legal fees: see DJM v JLM (1998) FLC 92-816 at 85,262;
(2)Where there has been a premature distribution of matrimonial assets: see Townsend & Townsend (1995) FLC 92-569 at 81,654; and
(3)In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644, including:
(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
In this case, I am satisfied that the husband has acted “recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value”.[5] In those circumstances, I am satisfied that this case falls into the exceptional category as identified in Trevi & Trevi (2018) FLC 93-858 at 78,454, where justice and equity requires funds distributed by the husband to his brother Mr C Rimac and his nephew to be added back to the matrimonial asset pool. To fail to so exercise my discretion would be to accept conduct on the part of the husband which would otherwise have removed a significant amount of funds from the jurisdiction of the Court, such that the Court would be unable to make an adjustment of the parties’ property that is appropriate, just and equitable as required by s 79(2) of the Act.
[5] Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644.
In that context, it is to be noted that proceedings in this matter were commenced in 2015 and a substantial portion of the husband’s property has been advanced to his nephew and Mr C Rimac since that time.
As I have set out in my findings in respect to background facts in this matter, in the period subsequent to the commencement of these proceedings, the husband has disbursed to his nephew the following amounts:
·The amount initially identified by the husband in his financial statements as being a loan from the husband to his nephew in the sum of $2,245,000; and
·The net proceeds of sale of the U Street property in the sum of $299,662.
Accordingly, in the exercise of my discretion, I have determined to notionally include those amounts on the balance sheet in calculating a just and equitable adjustment of the parties’ property.
Further, the husband has not provided disclosure of how he has applied the following funds:
·Net proceeds of the sale of the X Street property in the sum of $540,000
·Receipt of superannuation payout funds which, for reasons I have set out above, I have assessed to be $428,568.
As I have explained, the obligation of disclosure, which rests upon a party to litigation before this Court, requires disclosure not only of property but also the disposition of property. The husband has failed to provide disclosure firstly as to the precise amount he has received in respect of the sale of the X Street property. He has also failed to disclose the precise amount he has received by way of his superannuation payout. Equally as significantly, the husband has failed to disclose how he has applied those funds.
In the absence of that disclosure, I infer that those funds are available for the husband. Indeed, during the course of these proceedings, Mr C Rimac acknowledged in his capacity as the lay advocate nominated by the husband that funds are being held on behalf of the husband by his son, that is, the husband’s nephew. Specifically, Mr C Rimac, stated that his son is holding, on behalf of the husband, an amount “from 1.5 to approximately $3 million.” (Transcript 5 May 21, p.155 line 2). As noted in the authorities to which I have earlier referred, the Court is not required to take a conservative approach in the absence of disclosure and I find that, rather than the nephew holding funds from between $1.5 to approximately $3 million on behalf of the husband, the nephew in fact holds funds totalling $3,513,230 on behalf of the husband. In that respect I note at Note 4 (Paragraph 37) of his financial statement filed on 21 April 2021, the husband attests that, in exercising his “own free will”, he has “given [his] money to [his] nephew Mr O Rimac” on the understanding that his nephew continues to provide him “with whatever I need in my life”, “for the rest of my life.”
Additionally, the husband has failed to provide details of a series of lump sum payments made to his brother, Mr C Rimac. Those which were presented to Mr C Rimac in cross examination by counsel for the wife were as follows:
·Transfer on 6 October 2016 of $13,021.40 (Transcript 4 May 2021, p.97–98)
·Transfer on 19 October 2016 of $150,000 (Transcript 4 May 2021, p.98)
·Transfer on 23 January 2017 of $4,000 (Transcript 4 May 2021, p.106 lines 34–45)
Total amounts paid by the husband to Mr C Rimac $167,021.40
Accordingly, I intend to include as notional add backs on the balance sheet the following:
·Funds initially identified by the husband as a loan to his nephew: $2,245,000
·Net proceeds of the sale of the U Street property: $299,662
·Net proceeds of the sale of the X Street property: $540,000
·Superannuation payout: $428,568.98
·Funds paid by the husband to Mr C Rimac: $167,021.40
Liabilities
The wife was not challenged on her evidence that, as at the date of the hearing, she had the following liabilities:
·Home mortgage in respect to the Q Street property: $98,000
·Home mortgage in respect to the P Street property: $32,000
·ANZ Visa card: $1,400
Accordingly, those amounts will be included in the calculation of the parties’ net property pool.
I do not, however, include the amounts specified in items 19 and 20 of the wife’s draft balance sheet, being costs payable by the husband in respect of previous litigation. That remains an issue for enforcement by the wife against the husband separately from these proceedings. Including those items in the balance sheet would effectively result in the husband having a legal obligation to pay those costs, whilst also effectively sharing a portion of those costs in accordance with the property adjustment that I determine to be appropriate in these proceedings, insofar as the inclusion of those amounts on the balance sheet would result in the lessening of funds available for distribution between the parties.
Superannuation
The wife has attested to having received a payout of her superannuation entitlement and was not challenged on that evidence. As I have earlier set out, Mr C Rimac, the lay advocate on behalf of the husband, has also attested that the husband has been paid out his superannuation entitlement. Accordingly, there will be no entries on the balance sheet in that respect.
Findings in respect to the balance sheet
I find that the balance sheet representing funds available for distribution between the parties is as follows:
Assets in wife’s name
·Q Street, Town E: $450,000
·P Street, Town M: $295,000
·ANZ Account …47 as at 20 July 2020: $1,433
·CBA Pensioner Security Account: $5,800
·R Company shares (840) as at 20 July 2020: $5,325
·Motor Vehicle 1: $8,500
·Jewellery: $3,000
·Furniture furnishings and household effects: $2,000
·D Street, Suburb B: $1,950,000
Assets in husband’s name
·Funds at bank: $15,000
·Motor Vehicle 2: $5,000
Total assets: $2,741,058
Add backs
·Funds provided by the husband to his nephew initially identified as a loan: $2,245,000
·Net proceeds of the sale of the U Street property: $299,662
·Net proceeds of the sale of the X Street property: $540,000
·Proceeds of superannuation payout: $428,568
·Funds provided by the husband to Mr C Rimac: $167,021.40
Total add backs: $3,680,251.40
TOTAL ASSETS AND ADD BACKS: $6,421,309.40
Liabilities
·Home mortgage on the Q Street property: $98,000
·Home mortgage on the P Street property: $32,000
Total Liabilities: $130,000
NET PROPERTY AVAILABLE FOR DISTRIBUTION (including notional add backs): $6,291,309.40
Contributions
The Court is required to make an assessment of the nature and quality of the totality of the parties’ contributions throughout the entirety of their relationship, being 11 years and three months, together with their contributions in the period subsequent to their separation.
Initial contributions
At the commencement of cohabitation, the wife’s property included:
·The D Street property
·Superannuation of approximately $31,000
·Furniture and household effects of unknown value
·A Motor Vehicle 1 of unknown value.
The wife’s liabilities at the time of commencement of cohabitation were:
·Mortgage on the D Street property of approximately $43,000
·Personal loan to ex-husband Ms Rimac of about $55,000
·Personal loan from Mr and Ms BB of approximately $14,000.
I have not accepted the husband’s evidence that he contributed to the purchase of D Street property at the commencement of cohabitation. The best evidence of his assets at the beginning of cohabitation is the assessment made by Centrelink in that he held assets of $41,600. The husband has not provided evidence of his liabilities at that time.
Contributions during the course of the parties’ relationship
Shortly after commencement of cohabitation, the parties operated a business known as T Company. I have found that the husband undertook trade related work and the wife undertook administrative tasks in respect to the business. Unfortunately the parties were unable to continue with the business after sustaining severe injuries in a motor vehicle accident which occurred in 2004.
In the period from the commencement of cohabitation until January 2004, the wife also worked in paid employment as a part time function organiser.
I am satisfied that both parties applied their income towards the support of each other and the husband’s daughter from his previous marriage until she moved to stay primarily with her mother in 2004. The support of the husband’s daughter will, however, be considered under s 75(2) of the Act.
In October 2003, the husband and wife purchased the U Street property for a purchase price of $280,000. That purchase was financed by a joint loan from the V Bank in the sum of $350,000, with the borrowed funds being applied to the purchase of the U Street property, as well as discharging the loan secured on the D Street property.
As noted, on 2 January 2004, the husband and wife were involved in a serious motor vehicle accident and, unfortunately, both sustained serious injuries, with the husband’s injuries including a significant brain injury requiring extensive rehabilitation until June 2004.
Both parties received a financial settlement in respect to the injuries they sustained in the accident. In or about April 2006, the wife received a settlement of approximately $301,000 and, on 23 June 2006, the husband received an amount of $3,750,000 plus fund management costs of $639,860 and professional costs of $150,000. The funds placed under the administration of the NSW Trustee & Guardian and Guardian on behalf of the husband totalled $4,388,488. The wife appropriately acknowledged that this was a significant contribution by the husband.
During the period of the parties’ relationship, the wife received a gift of $83,000 from her father, which she applied to the parties’ living expenses.
Between June 2004 and March 2011, the wife provided care for the husband, although I accept that she did receive some respite assistance from late 2004 until the parties moved to the X Street property in November 2006. The wife was in receipt of a carer’s allowance from the NSW Trustee & Guardian from late 2006 to March 2011 whilst caring for the husband.
From late 2006, the wife’s daughter and granddaughter lived rent free in the U Street property for a period of 18 months. Otherwise, during the parties’ relationship, the property was tenanted.
From the husband’s compensation payout, the following assets were purchased:
·The X Street property, purchased in November 2006
·The husband’s Motor Vehicle 2.
From the wife’s compensation payout, together with supplementary funds, the following assets were purchased:
·The Y Street property, purchased in May 2007
·The P Street property, purchased in July 2007.
Further, in December 2009, the wife purchased the Z Street property, a purchase that was funded by a mortgage from Commonwealth Bank. The property was rented, and the rental income applied to the mortgage and outgoings on the property.
From late 2009, the D Street property has been tenanted on a fulltime basis. The rental income had been received by the wife. That rental income had been applied towards the outgoings on the property and otherwise has been a source of income for the wife.
Post separation contributions
In 2011, the wife received $11,512.64 from her Super Fund 2 payout, which was applied to paying down mortgage debt.
Additionally, in February 2020, the wife paid land tax liability in the joint names of the husband and the wife in the sum of $11,124.
In assessing the parties’ contributions, I have assessed the wife’s initial contributions to have been superior to those of the husband.
I have assessed the parties’ contribution in respect to the period subsequent to the parties’ involvement in the serious motor vehicle accident in 2004 to be approximately equal. In that context, I have not considered the fact that the wife provided care for the husband’s daughter, but will consider that matter below in terms of s 75(2)(o).
I have considered the father’s contributions in the period between 2004 and the parties’ separation to be superior to those of the wife as a result of the contribution of his significant damages settlement.
I have also considered the husband’s contribution in the period subsequent to the parties’ separation to be superior as a result of the receipt of his superannuation payment noting, however, that the wife also received superannuation and made the taxation payments to which I have earlier referred.
Having regard to the totality of the parties’ contributions, I have considered that the husband is entitled to an adjustment of 62.5 per cent in his favour. This is primarily as a result of the significant damages settlement which he received, together with the amount received by way of lump sum superannuation.
Relevant s 75(2) factors pursuant to s 79(4)(e)
Subsection (2)(a) – the age and state of health of each of the parties
The wife is currently aged 74 years and the husband is currently aged 63 years.
Neither the husband nor wife are currently in any paid employment and both suffer from continuing ongoing disabilities.
Subsection (2)(b) – the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The wife has two properties which generate an income, being the D Street property and P Street property.
The husband has failed to provide effective disclosure and, as a result, I have included the amounts to which I have earlier referred as notional add backs to the parties’ property pool. I do not, therefore, double count the funds that the husband stated are being held on his behalf by his nephew as a financial resource or otherwise as a s 75(2) factor.
Subsection (2)(c) – whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
Neither party has the care of a child.
Subsections (2)(d) and (e) – commitments of each of the parties that are necessary to enable the party to support himself or herself, and a child or another person that the party has a duty to maintain; and the responsibilities of either party to support any other person
Neither party is responsible for supporting another party.
Subsection (2)(f) – the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth, of a State or Territory or of another country; or any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party
Both parties are self-funded retirees, with the wife receiving rental income and the husband having the benefit of his damages settlement.
Subsection (2)(g) – where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The wife lives a relatively frugal lifestyle. In April 2018, she sold the Z Street property and purchased the Q Street property, as it is on one level and easier to maintain.
It is difficult to know the quality of the lifestyle of the husband, other than to the extent that he asserts that he is being well looked after by his brother and his nephew, who supply him with all his daily needs including providing funds to purchase cigarettes.
Subsection (2)(h) – the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income
Both parties mutually supported each other during the brief period that they operated their business.
Subsection (2)(ha) – the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant
This consideration is not relevant.
Subsection (2)(j) – the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party
I have earlier referred to both parties’ involvement in their business.
Subsection (2)(k) – the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The most significant impact on the parties’ earning capacity was the effect of the significant injuries they each sustained in 2004. That issue has already been considered in terms of the damages each party received and will not be further considered as a s 75(2) issue.
Subsection (2)(l) – the need to protect a party who wishes to continue that party’s role as a parent
Given that neither party currently has parental responsibility of a child, this consideration is not relevant.
Subsection (2)(m) – if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
The husband is living with his brother and his brother’s family. The evidence is not such, however, that the Court is in a position to make a determination of this issue.
Subsection (2)(n) – the terms of any order made or proposed to be made under section 79 in relation to the property of the parties; or vested bankruptcy property in relation to a bankrupt party
I have earlier set out the adjustment that I have determined to be appropriate pursuant to s 79 of the Act.
Subsection (2)(naa) – the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to a party to the marriage; or a person who is a party to a de facto relationship with a party to the marriage; or the property of or vested bankruptcy property in relation to a person covered by the categories aforementioned
This consideration is not relevant.
Subsection (2)(na) – any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
This consideration is not relevant.
Subsection (2)(o) – any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
Pursuant to the principles adumbrated in Robb & Robb (1995) FLC 92-555 (“Robb & Robb”), the wife is entitled to recognition for the care she contributed to the daughter of the husband from his first marriage when she lived with the parties during the first four years of the parties’ 11 year relationship.
Of further relevance, in relation to s 75(2)(o), is that the husband has failed to disclose income that has been received from renting out the U Street property or, if it has not been rented, the opportunity cost of his failure to do so.
Subsections (2)(p) and (q) – the terms of any financial agreement and any Part VIIIAB financial agreement that is binding on the parties to the marriage
This consideration is not relevant.
Evaluation of s 75(2) factors
As a result of the s 75(2) factors to which I have referred being, most relevantly, the Robb & Robb consideration and the undisclosed rental income of the husband, I have determined that an adjustment of 6 per cent in favour of the wife is appropriate.
OVERALL EVALUATION
I have determined that an appropriate adjustment of the parties’ property is one that results in an adjustment whereby the wife should receive 43.5 per cent of the property. I have identified the property of the parties, including notional add backs, as totalling $6,291,309.40. I have noted that the wife currently has in her possession property totalling $1,746,058 (allowing for her 50 per cent interest in the D Street property). This represents 27.75 per cent of the property, including the notional property that I have assessed. The wife is therefore entitled to receive an adjustment of an additional 15.75 per cent of the parties’ property, which is equivalent to the amount of $990,881.
That amount exceeds the distribution that the wife has sought which, as noted, is an order requiring the husband to transfer to the wife his interest in the D Street property which I have assessed to be valued at $975,000. I will accordingly make an order in the terms sought by the wife. I have determined that the parties should otherwise retain property in their own hands, as well as any chose in action that the husband may have as a result of funds that he has provided to his nephew. I have also determined that the parties should otherwise be responsible for liabilities in their own names.
This will leave the wife with a property to live in, together with two properties from which she draws a rental income, such that she can sustain herself in a relatively frugal lifestyle as a self-funded retiree.
Comparatively, the husband has attested that his interests are being well looked after by his brother and his nephew, who is holding funds on his behalf and applying those funds for the benefit of the husband and, specifically, to provide for his day to day needs, which he has attested to being to his satisfaction.
CONCLUSION
For all these reasons, I make orders as sought by the wife.
I will invite the parties to make such written submissions as to costs as they deem appropriate.
I certify that the preceding two hundred and one (201) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Deputy Chief Justice McClelland. Associate:
Dated: 21 December 2021
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