Rose and Briggs

FEDERAL CIRCUIT COURT OF AUSTRALIA

ROSE & BRIGGS

[2019] FCCA 783

Catchwords:
FAMILY LAW – Application for property adjustment orders – assessment of contributions – orders made.

Legislation:

Family Law Act 1975 (Cth), ss.75, 79

Cases cited:

Kowali & Kowali [1981] FamCA 70

Applicant:

MR ROSE

Respondent:

MS BRIGGS

File Number:

PAC 569 of 2016

Judgment of:

Judge Newbrun

Hearing dates:

18, 19, 20 March 2019

Date of Last Submission:

20 March 2019

Delivered at:

Parramatta

Delivered on:

29 March 2019

REPRESENTATION

Solicitors for the Applicant:

Mr Brown of Browns the Family Lawyers

Counsel for the Respondent:

Mr Dura

Solicitors for the Respondent:

Horton Rhodes Legal

ORDERS

That within two calendar months after the date of these Orders the husband, should he wish to retain the property situate at and known as Property A, shall pay to the wife the sum of $236,697.
That in the event that the husband fails to comply with the above Order within two calendar months after the date of these Orders then the husband and wife shall do all things as may be necessary to list the Property A property for sale by auction with a real estate agent agreed and failing agreement with a real estate agent nominated by the President for the time being of the Real Estate Institute of New South Wales or his nominee.
The auction shall take place within six weeks after the date two calendar months after the date of these orders or as soon as practicable, whichever is the later.
The reserve price shall be as agreed between the parties and in default of agreement for a period in excess of fourteen (14) days at a price fixed to be a fair market value of Property A by a valuer jointly appointed by the parties or in default of agreement by them, appointed on application by either of them by the President or other senior office bearer for the time being of the New South Wales Division of the Australian Property Institute or its successors acting as an expert and not as an arbitrator.
That upon the Property A property being sold at auction the parties shall distribute the proceeds of such sale as follows:
(a)In payment of real estate agent’s commission, legal and other costs on the sale;
(b)In payment of the balance then remaining to the parties as follows:
(i)To the wife, a sum representing 55% of the said balance, plus a cash payment of $13,947;
(ii)To the husband, the balance remaining.
That subject to the above Orders, the husband shall retain all interest in and entitlement to:
(a)His superannuation entitlement with Super Fund B;
(b)All funds held by him in financial institutions;
(c)His furnishings, home contents and personalty;
(d)His boat.
That subject to the above Orders, the wife shall retain all interest in and entitlement to:
(a)The money in controlled monies account Legal First (proceeds of matrimonial home);
(b)Her superannuation entitlements;
(c)All funds held by her in financial institutions;
(d)Her furnishings, home contents, personalty and jewellery.
That in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act to execute such deed, document or instrument in the name of said party and do all acts and things necessary to give validity to the operation of such deed or instrument.
Leave to the parties to relist the proceedings on seven days’ notice in relation to any difficulty facilitating the Court’s Orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 569 of 2016

MR ROSE

Applicant

And

MS BRIGGS

Respondent

REASONS FOR JUDGMENT

Introduction

This was the final hearing of property proceedings between Mr Rose (“the husband”) and Ms Briggs (“the wife”).
On 18 March 2019, the first day of the trial, the Court made final parenting Orders by consent, inter alia, providing for the two children of the relationship (a daughter aged almost fourteen years, and a son aged twelve years) to spend some four days each fortnight with the mother, during school term times, and some ten days each fortnight with the father, with the children to spend time with each parent in their school holidays and on other special occasions.

Material relied upon

The husband relied upon the following documents:
a)Initiating Application filed 10 February 2016;
b)Affidavit of Mr Rose filed 26 February 2019;
c)Financial Statement filed 26 February 2019.
The wife relied upon the following documents:
a)Affidavit of Ms Briggs filed 1 March 2019;
b)Financial Statement filed 27 February 2019;
The following exhibits were relied upon:
a)Minute of Parenting Orders (Exhibit A);
b)Wife’s tender bundle (Exhibit B);
c)Husband’s tender bundle (Exhibit C);
d)CBA, ANZ and AF schedules (Exhibit D);
e)Email from husband’s solicitor to wife’s solicitor dated 4 October 2018 (Exhibit E);
f)Letter from St George Bank to Business C dated 27 October 2015 (Exhibit F);
g)Email from husband’s solicitor to wife’s solicitor dated 3 October 2018 and attached bank transaction listings (Exhibit G);
h)Paragraph 64 of the Family Report (Exhibit H);
i)Updated collaborative balance sheet dated 20 March 2019 (Exhibit I);
j)Financial statements of Business C for years ending 30 June 2015 and 30 June 2016 (Exhibit J);
k)Tabbed pages in subpoenaed material from Australian Financial (Sleeve 28) (Exhibit K);

Context

At trial date the wife was aged 37 years, and the husband 38 years.
The parties married and commenced cohabitation in … 2003.
They separated on a final basis in February 2015.
The parties’ daughter was born on … 2005, and their son was born on … 2007. Again, the children will live substantially with the husband.

At cohabitation

At the time of commencement of cohabitation the parties had the following assets:
a)Wife:
i)A motor vehicle
ii)“Some superannuation entitlements”, however there is no evidence as to their value as at this time. The Court observes that at cohabitation the wife was only aged 22 years.
b)Husband:
i)Real estate property at Town D. This property had been purchased by the husband in 2001 for $220,000 with the assistance of a mortgage loan, however details of the extent of the mortgage loan has not been revealed in evidence. It was sold in 2006 for $248,000 with a mortgage being discharged. The court finds that the sum of $90,000 was deposited from the proceeds of sale into the mortgage loan account of Australian Financial in … 2006.
ii)Half interest in real estate at Town E (owned jointly with the husband’s stepfather). This property was purchased for $149,000 in about 1997. This property was sold in about … 2009 for $311,000. The Court finds that this property was appropriated by the Crime Commission, following criminal convictions of the husband’s stepfather, and the husband obtained no monies representing his half interest in the property.
iii)Real estate property at Property F, which had been purchased on about … 2003 for $380,000, with the assistance of a mortgage loan from Adelaide Bank, and a deposit of about $38,000 from the husband’s savings.
iv)A motor vehicle.
There is no evidence as to the value or otherwise of the parties assets at the commencement of cohabitation.
Following commencement of cohabitation, the wife continued working in retail until the daughter’s birth in 2005. She did not return to paid employment until after separation. During the relationship she carried out the majority of administrative tasks for the company Business C Pty Ltd, being the company through which the husband carried out his self-employed business. Following separation, the wife returned to paid employment in late 2015.

Aspects of the parties’ financial history

The Property A property was purchased in the husband’s name in about June 2014 with the assistance of a mortgage loan. That mortgage loan was discharged following the sale of the Property F property in about October 2016.The husband solely received the benefit of the rental income from that property from about October 2016 to date of trial.
The Property F property was sold in late 2016 and the sale proceeds were used to pay the mortgage on that property and also for the loan sum owing on the Property A mortgage. Thereafter the sum of about $105,000 was held in the trust account of Legal First. Then various payments were made from such funds in the trust account, including interim partial property settlements of $25,000 to each party in September 2018, such that the sum of $29,437 remains.

Credit issues and financial disclosure

Whilst the Court found the husband to be an honest witness, the Court had some reservations about the reliability of his evidence.
It was readily apparent from the husband’s oral evidence that he at times struggled with his recollection of the detail of certain events. However, the Court assessed the husband on these occasions as being honest in his lack of recall.
The Court is not critical of him for having changed aspects of his evidence, including oral evidence, relating to historical financial issues. For example, the Court accepts his oral evidence on the second day of the trial that he caused to be deposited $90,000 from the proceeds of sale of the Town D property in 2006 into the line of credit account with Australian Financial; the Court observes in this context that this evidence was supported by the documentary records in evidence.
Further, whilst, and as discussed further below, the husband’s disclosure and production of financial material to the wife’s solicitors had been the subject of delay, and there were some documents not produced (such as certain income tax returns of the husband) ultimately the Court was not persuaded that the husband’s delay and limited non-disclosure amounted to material financial non-disclosure.
On the other hand, the husband’s Financial Statement was shown to be unreliable in that the husband’s recent spending on gambling activities was not reflected in his stated expenses in that Statement and the husband’s reference to Home mortgage of $350 was clearly incorrect.
Whilst the Court found the wife to be an honest witness, it had some concerns with the reliability of her evidence.
For example, the Court found the wife’s evidence relating to the dates of renovations to the family home to be unreliable.
Another example related to the wife having stated in her Affidavit that she generally used the bank account held by Business C with CBA on an ongoing basis to pay household bills. Yet, in cross examination, the wife conceded that she may have made withdrawals at pubs and clubs for dining expenses, in respect of the CBA cheque account.
Another example was the wife’s firm oral evidence in chief that she never made withdrawals from the Australian Financial line of credit facility; yet Exhibit K (account statements of the Australian Financial account showing withdrawals) revealed daytime withdrawals during the working week, and on weekends, from retail outlets such as …, the Court observing that the wife was the primary homemaker and parent.
Further, there were occasions in cross examination when the wife was reluctant to make concessions in the face of objective documentary material (for example, the deposit of $90,000 from the sale of the Town D property into the Australian Financial line of credit account on 13 October 2006 coinciding with the sale of the Town D property at about that time, such sale date being confirmed in the wife’s own trial Affidavit). She struck the Court at times as an overly confident witness (and at times somewhat combative in cross-examination) determined to present her case in its best light.
Accordingly, the Court has proceeded particularly cautiously in relation to both parties’ evidence, and where there is reliable documentary evidence it prefers such evidence to any contrary evidence by the parties.
Again, the wife asserts that the husband has failed to make adequate financial disclosure, in various respects. The husband disputes this assertion.
The wife is critical of the husband for failing to have produced any documents supporting his assertion that he received no funds from the proceeds of sale of the property at Town E, sold in … 2009. The Court refers to its finding above that this property was appropriated and sold by the Crime Commission. The Court accepts the husband’s evidence that he was sixteen or seventeen at the time of this property’s purchase and that he did not make any substantial financial contribution towards the purchase of this property or towards reduction of any mortgage on this property. The Court accepts the husband’s evidence that he obtained no monies from the sale of the Town E property.
The Court observes that in April 2017 the wife’s solicitors were requesting the husband, through his solicitors, to provide copies of all mortgage loan statements relating to the Property F property from the date of cohabitation until September 2016, having stated that “it will be less costly for your client to obtain these statements that for my client to issue a subpoena for them”.
There were Orders of the Court of 21 May 2018 and 21 September 2018 for the husband to produce specific financial disclosure documents.
The husband’s solicitor’s letter of 20 September 2018 acknowledges the delay of the husband in complying with the Court’s Order of 21 May 2018, and sets out certain documents shortly to be provided to the wife’s solicitors, together with an outline of the husband’s efforts to date in seeking to obtain the requested financial records sought by the wife.
The Court observes that the wife caused to be issued subpoenas for production of documents to ANZ, Adelaide Bank, Westpac bank, Australian Financial, and CBA between 4 February 2019 and 20 February 2019.
Paragraph 14 of the wife’s Affidavit purports to set out the documents that the husband was yet to provide pursuant to the above Court Orders, as at the date of that Affidavit, being 27 February 2019.
Prior to trial, the husband provided the bank statements (for example see Exhibit G).
The wife conceded in cross examination that prior to making her trial affidavit the husband had provided most of his bank statements, and that otherwise the husband had provided everything he had.
The husband acknowledged that he had not produced his 2015 and 2016 income tax returns. The Court observes that Exhibit C contains copies of his Notices of Assessment for the financial years 2013 to 2015. Exhibit J, being the 2015 and 2016 financial statements for the company Business C Pty Ltd, refer, inter alia, to the wages of the husband, being expenses of the company. The Court further observes that the husband’s Financial Statement filed 26 February 2019 refers to his occupation as a tradesman working full-time for Employer, and that he had been employed at that place for two years and eight months.
The wife asserts that the husband failed to adequately disclose facts relating to the sale of a truck and motor vehicle post separation. However, the Court is satisfied, on the material before it, including the husband’s oral evidence and Exhibits E and F, that this assertion is not made out, and that the details of the sale, including proceeds of sale, have been adequately explained. The Court has not overlooked the absence of reference to these vehicles in the husband’s company’s financial statements for the years 2015 and 2016. However, it is relevant in this context that Exhibit F, being a letter dated 27 October 2015 to the company from St George Finance Limited, clearly indicates that the Motor Vehicle G is the subject of a payout figure to that finance company in the sum of over $17,000, with the relevant account name being “Business C Pty Ltd”. Further, the Court finds that the husband did not profit from the sale of these vehicles, with vehicle finance having to be repaid.
The Court is not satisfied that there has been any material nondisclosure by the husband in relation to income received by him from the Property A property purchased in mid-2014, noting in particular the wife’s concessions in relation to having seen relevant bank statements.
The Court does not accept the wife’s contentions that there has been any material nondisclosure by the husband relating to the sale of the Town D property in 2006 or the sale of the Town E property sold in 2009, taking into account in particular the historical nature of the sale of these properties, and accepting the husband’s evidence in this context.
Criticism was made by the wife of the husband in relation to the husband’s failure to produce documents relating to the refinance of the mortgage loan over the Property F property in about … 2010, when Perpetual Trustees provided a refinancing loan to pay out the Australian Financial line of credit. Perpetual Trustees had provided a refinancing loan of $360,000 to pay out the Australian Financial Debt of $315,000; the wife contended that the husband had failed to disclose how the sum of $45,000, representing the difference between $360,000 and $315,000 was utilised.
In cross examination, the husband honestly stated that the $45,000 was used jointly but he did not know for what purpose; the Court observes that such refinancing transaction was over eight years ago, in December 2010. The Court further observes that there was evidence before the Court as to the parties’ significant joint expenditure post 2010. For example, both parties referred to a family trip to Country H for about six weeks in about 2011/2012, with the parties estimating that about $20,000 was spent for such trip. The Court does not accept that this $45,000 or any significant part of it was spent by the husband on gambling or other reckless activities, nor that he has secreted such funds out of reach of the wife.
It was common ground between the parties that the husband’s employment contract had been provided to the wife, albeit during the course of the trial. The Court accepts the husband’s evidence that his tools and construction equipment used in his work through the company had no value and that he had disposed of them accordingly.
Ultimately the Court had before it in evidence significant and relevant historical financial material relating to, inter alia, the financial history of the parties’ relationship, including the husband’s bank accounts.
There was no evidence adduced by the wife to suggest that the husband had specific undeclared funds or assets.
There was no relevant evidence before the Court indicating that the husband had specific documents in his possession, custody or control.
The Court has carefully considered the evidence and competing submissions of the parties in relation to the wife’s contentions that the husband has failed to provide adequate financial disclosure. The Court is not persuaded, having considered the documentary exhibits, the husband’s evidence including his trial Affidavit, the bank statements and other financial material in evidence, the wife’s cross-examination and her affidavit evidence in relation to financial disclosure, including the matters discussed above under “Credit issues and financial disclosure”, that there has been material financial non-disclosure by the husband.
On the material before the Court, the Court is not satisfied that there has been any material nondisclosure by the wife in relation to her relationship with Mr J.

Legal principles

In Lotta & Lotta [2017] FamCA 50 Foster J stated:
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or defacto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property and the husband contends that there should be no such adjustment.
It is thus important to ascertain the present property and resources of the parties so as to facilitate a consideration of the s 79(2) question.
In some circumstances it is not possible to determine whether it is just and equitable to make adjustment orders as to the parties present property rights without a consideration of s 79 (4) matters.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g) in particular the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell [1999] FamCA 1875; (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.

Balance sheet

The parties provided an updated collaborative balance sheet which was marked Exhibit I and the Court sets out that document as tendered:

Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
ASSETS
1.	J	Money in controlled monies account Legal First (proceeds of matrimonial home)	$ 29,437	$ 29,437
2.	H	Property A	$ 405,000	$ 405,000
3.	H	Boat	$ 20,000	$ 10,000

Total

$454,437

$444,437

ADDBACKS
4.	W	Partial property settlement 20/9/2018	$ 25,000	$ 25,000
5.	H	Partial property settlement 20/9/2018	$ 25,000	$ 25,000
Total		$ 50,000	$ 50,000

LIABILITIES
6.	H	Workers compensation arrears Business C PL	$ NIL	$ 25,077

Total

$ NIL

$ 25,077

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
7.	H	Super Fund B	Accumulation	$ 50,270	$ 50,270
8.	W	Super Fund K	Accumulation	$ 18,787	$ 18,787
Total		$69,057	$ 69,057

Total asset pool

$ 573,494

$ 538,417

There were only two items in dispute in relation to Exhibit I.
The husband’s boat had a contended value of $20,000, according to the wife, and $10,000, according to the husband. The husband had asserted $10,000 as the relevant value of the boat in his Financial Statement filed 26 February 2019. The wife did not adduce independent evidence of the boat’s value, rather she contended that her solicitors had sent an email letter to the husband’s solicitors on 18 February 2019, some four weeks prior to the trial of these proceedings, requesting the husband’s solicitors’ advice as to whether or not the husband agreed to the wife’s contended value for the boat of $20,000, failing which “a single expert will be required to value the items prior to the hearing” and requesting the names and fee estimates of three single experts (for the wife’s selection).
The final hearing of these proceedings was appointed on 12 November 2018. The wife’s request on 18 February 2019 to the husband’s solicitors, as above, came particularly late in the proceedings relative to the appointed trial date.
The husband’s admission against interest in the sum of $10,000 for the boat should go into the balance sheet.
The other item in dispute was the husband’s contended liability of $25,077 for alleged workers compensation arrears owing by Business C Pty Ltd. The only evidence pertaining to this alleged liability was a letter of demand from a firm of solicitors representing the Workers Compensation Nominal Insurer to the above company for the contended liability amount. Such letter of demand does not prove the alleged liability on the balance of probabilities. The contended liability shall be removed from the balance sheet.
The Court finds that the assets and liabilities, superannuation, and other relevant items to be included in the trial balance sheet of the parties are as follows:

Ownership		Description	Value
ASSETS
9.	J	Money in controlled monies account Legal First (proceeds of matrimonial home)	$ 29,437
10.	H	Property A	$ 405,000
11.	H	Boat	$ 10,000

Total

$444,437

ADDBACKS
12.	W	Partial property settlement 20/9/2018	$ 25,000
13.	H	Partial property settlement 20/9/2018	$ 25,000
Total		$ 50,000

LIABILITIES

Total

$ NIL

SUPERANNUATION
Member		Name of Fund	Type of Interest	Value
14.	H	Super Fund B	Accumulation	$ 50,270
15.	W	Super Fund K	Accumulation	$ 18,787
Total		$ 69,057

Total asset pool

$ 563,494

Section 79 (2) of the Act

The Court is satisfied that it is just and equitable in this case to alter the property interests of the parties in light of the breakdown of their relationship, the fact that they will no longer have the joint use and enjoyment of the property (see the final balance sheet), and the fact that the continuance of the current legal ownership of the property would not afford them justice and equity. The parties join in seeking Orders for property adjustment.

Contributions

The Court observes that the parties’ relationship spanned the period from about 2003 to February 2015, a period of over eleven years.
The husband brought the Town D property into the relationship; however, the evidence does not disclose the husband’s equity in this property as at commencement of cohabitation. The Court takes into account the fact that $90,000 from the proceeds of sale of this property was paid into the line of credit loan facility with Australian Financial in October 2006, but set against that contribution, the Court also takes into account the husband’s gambling of funds from such line of credit loan facility and from the husband’s company’s CBA cheque account thereafter (as to the extent of the husband’s such gambling, see the Court’s discussion below, under section 75(2)).
The husband brought the Property F property into the relationship, which had been purchased on about … 2003 for $380,000 with the assistance of a mortgage loan from Adelaide Bank, and a deposit of about $38,000 from the husband’s savings, which is taken into account. (The Court should state that it accepts the husband’s evidence that he unsuccessfully sought to obtain relevant documents from this bank’s successor).
The Court takes into account the husband’s financial contributions towards repayment of the mortgage loans on the properties through his work as self-employed tradesman and later employee.
The Court takes into account the husband’s contribution as parent post separation, and recognises that he assisted the wife during the parties’ relationship with care of the children.
The Court takes into account the husband’s financial contributions post separation towards the mortgage loan on Property F, which was sold in about October 2016, whilst noting that there were not insignificant mortgage arrears as at about August 2016, with the wife paying only some $600 towards the mortgage loan. The Court takes into account the fact that the wife resided in the Property F property post separation with the children until its sale in October 2016, noting however that she was in paid employment only from about late 2015, and recognising that the husband’s payment of child support to the wife was in arrears for a period.
The Court takes into account the wife’s indirect financial contributions towards the property of the parties through the utilisation of her employment income in the early years of the parties’ relationship, including her work in the husband’s company through which the business was conducted.
The Court takes into account the wife’s contribution as primary home maker and parent throughout the parties’ relationship and post separation. This was a contribution of significance.
The Court takes into account the wife’s contribution towards the payment of school fees for the years 2015 to 2018.
The Court takes into account the parties’ respective work and efforts in relation to the properties.
The husband’s superannuation at trial date is about $50,000. The wife’s superannuation at trial date is about $19,000. There is a paucity of evidence relating to the parties’ accumulation of superannuation. There is no evidence quantifying their superannuation entitlements as at cohabitation or separation. Nevertheless, it would appear that the wife, by reference to the length of the relationship compared to the much lesser period post separation to trial date, probably indirectly contributed to the husband’s accumulation of superannuation whilst the wife was the primary homemaker and parent. The Court observes that the wife was in paid employment from commencement of cohabitation in … 2003 up until the eldest child’s birth in … 2005, with the parties probably indirectly contributing to each other’s accumulation of superannuation during this period. No party submitted that superannuation should be dealt with by the Court in a separate pool.
The husband contended that the Court’s contribution assessment at trial date should result in a finding of the parties having made equal contributions.
The wife contended that the Court’s contribution assessment at trial date should be assessed at 55% in favour of the wife and 45% to the husband, but taking into account, inter alia, the husband’s wastage through gambling, his failure to explain the extent of sale proceeds from the sale of the Town D property, and his failure to explain how $45,000 was utilised following the refinancing of the Property F mortgage loan with Perpetual Trustees in about … 2010.
Take into account the above matters relating to the parties’ contributions, and viewing the parties’ overall contributions holistically, the Court assesses the parties’ contributions to both non-superannuation and superannuation assets as at trial date to be approximately equal.

Section 75 (2) of the Act

It is appropriate to consider at this point the wife’s contention that the husband committed relevant wastage of the parties’ property by reason of his gambling activities during the relationship, under section 75(2)(o) of the Act. The Court refers to relevant legal principle in Kowali & Kowali [1981] FamCA 70 relating to alleged wastage.
Exhibit D, admitted into evidence at the outset of the hearing, contains summaries of withdrawal transactions from three financial institutions at pubs and clubs during the period from 2009 to 2016 (CBA), 2007 to 2010 (Australian Financial), and 2016 to 2019 (ANZ).
As submitted by the husband, the ANZ transactions post separation are not relevant.
As to the CBA transactions, the post separation transactions from February 2015 to 2016 are not relevant as being post separation transactions.
The CBA transactions from 2009 up to … 2015 are about $28,000, and averaged over about six years plus to about $4,700 per year.
The Australian Financial transactions from 2007 to 2010 total some $23,420, or averaged over four years, about $5,855 per year. The Court observes that the husband had a line of credit with Australian Financial with an associated mortgage over the Property F property.
Accordingly, the total withdrawals from pubs and clubs through the CBA and Australian Financial accounts, pre-separation, amount to some $51,420.
In her trial Affidavit, the wife stated that she never withdrew funds from the Property F home loan at pubs and clubs.
The wife states that she frequented the … Club and … Club to eat meals with the husband, the children and their extended families from time to time. The Court observes that there are some withdrawal transactions at these particular venues from the CBA and Australian Financial accounts pre-separation.
The wife stated in her Affidavit that she generally used the bank accounts held by Business C with CBA on an ongoing basis to pay household bills. Yet in cross examination, the wife stated that she may have made withdrawals at pubs and clubs for dining, in relation to the CBA cheque account.
During cross-examination in relation to cash withdrawals at pubs and clubs in 2019, the husband stated that where there were multiple cash withdrawals on the same day, he might spend a quarter to sometimes one half of such sums for gambling. The Court observes that the husband’s cash withdrawals at this time (in 2019) were quite significant. The husband acknowledged that he had engaged in gambling activities in as early as 2006.
The Court is not satisfied that the increase in the Australian Financial line of credit from about $222,000 in about … 2006 (the sum of $90,000 having been deposited to that line of credit following the sale of the Town D property at about this time) to the line of credit’s limit of $312,000 thereafter up to … 2008 was totally due to gambling activities by the husband.
The Court observes that there are numerous transactions during this period on the line of credit which appear to relate to the parties’ domestic expenses and, again, the Court observes that the wife was the primary homemaker and parent (see the Court’s discussion above under “Credit issues and financial disclosure”). The Court should state at this point that there was quite limited cross-examination of the parties in relation to the individual withdrawal entries in Exhibit K during the period from … 2006 to … 2008 or otherwise.
The Court finds that the wife did have access to the Australian Financial line of credit and was able to and probably did make some withdrawals for domestic items from that line of credit. Further, the Court finds that the debit transaction of $7,000 on … 2008 on that line of credit was likely a domestic expense of the parties (unrelated to gambling).
The Court observes, in relation to both the CBA and Australian Financial cash withdrawal entries in Exhibit D, that pre-separation, there are numerous cash withdrawals on the one day often from the one venue, which might suggest cash withdrawals were not confined to non-gambling purposes.
There was quite limited cross-examination by the parties in relation to the detailed cash withdrawals summarised in Exhibit D.
The Court finds that the husband probably gambled, through utilisation of the Australian Financial line of credit, the majority of some $23,420 over four years from 2007 to 2010 (see Exhibit D); on the evidence before the Court it is unable to be more precise. The Court observes that the husband’s taxable income much later in the 2013 financial year was only some $29,345, suggesting that this gambling was more than a mere recreational activity. The Court takes into account the fact that the husband’s gambling through this line of credit effectively increased the mortgage debt accordingly.
The Court finds that the husband probably gambled, through utilisation of the CBA cheque account facility of Business C Pty Ltd, the majority of some $28,000 over six years from 2009 to … 2015; again, on the evidence before the Court it is unable to be more precise. The Court takes into account the fact that the husband’s gambling through this cheque account probably reduced the value of the company accordingly.
However, as discussed above, in the Court’s discussion in relation to “Contributions”, such gambling, as the Court has found, when set against the husband’s contribution of some $90,000 to the Australian Financial line of credit in … 2006, should not be found to constitute wastage. Even if the Court is wrong in its findings as to the extent of the husband’s gambling (that is, it should have found that the husband probably spent the total cash withdrawals from CBA and Australian Financial pre-separation, such cash withdrawals being referred to in Exhibit D, a total amount of over $51,000), it would still not find wastage committed, when set against the husband’s above contribution of $90,000 (and not overlooking the fact that the Town D sale occurred some three years into the parties’ relationship).
The Court takes into account the fact that the husband solely received the benefit of the rental income from the Property A property from about October 2016 to date, that property having been purchased in about August 2014, being about $230 per week.
As to general considerations under section 75(2) of the Act which are relevant, the Court takes into account the fact that pursuant to the Court’s final parenting Orders, the husband will have the substantial care of the children, who are presently aged almost fourteen years and twelve years.
The Court takes into account, by reason of the wife’s kidney condition, the fact that at least for the next months, and for at least three months after the wife’s kidney transplant (it being uncertain when that will occur, noting the contents of Dr L’s report and the wife’s evidence that her sister-in-law is being assessed as a possible kidney donor) the wife will be unable to pay the husband child support.
However, the Court takes into account the significant income earning disparity between the husband and the wife, noting their respective ages, and this fact is taken into account in favour of the wife. The husband’s Financial Statement indicates that his gross total average weekly income, per annum, is about $102,284. The wife is presently unemployed due to ill health (her kidney condition). There is a significant prospect that the wife will return to work after a period of about twelve months (see the medical report of Dr L attached to his Affidavit). The wife’s historical income indicates that for the 2018 financial year her total income was some $58,000, being significantly less than the husband’s income.

The Court takes into account the wife’s significantly lesser superannuation entitlement, compared to the husband’s.
The Court takes into account the wife’s indirect contribution towards the development of the husband’s earning capacity by reason of her significant primary care of the children during the relationship and post separation for a period. The Court takes into account the fact that the mother’s earning capacity may have been detrimentally affected by reason of her periods out of the workforce while she had the primary care of the children.
In relation to the wife’s kidney condition, the Court takes into account the wife’s out-of-pocket expenses for psychological treatment (the Court infers that this condition would contribute to the stress upon the wife) and other items. The Court also takes into account the fact that the wife’s earning capacity may well not be assisted by being further out of the workforce by reason of her kidney condition.
The Court acknowledges the parties’ significant asserted liabilities (particularly legal fees) referred to in their Financial Statements, which did not enter the balance sheet.
The wife is now living with her parents. She will pay them board when she begins to receive Centrelink benefits. The husband is presently in rental premises.
The husband sought an 18% adjustment in favour of the husband under section 75(2).
The wife sought an adjustment of not less than 20%.
Taking into account the above matters, there should be an adjustment of 5% in favour of the wife, noting that this produces a differential of 10%.

Justice and equity

There shall be in favour of the wife a 55/45% division of the net assets including superannuation, whilst taking into account the fact that each party has already received $25,000 by way of partial property settlement.
The wife’s 55% of the net assets including superannuation ($563,494) is $309,921 less $25,000 is $284,921. The husband’s 45% of $563,494 is $253,572 less $25,000 is $228,572.
In relation to the net assets including superannuation, should the husband retain:
a)the Property A property, $405,000
b)the boat, $10,000
c)his superannuation, $50,270
amounting to a total of $465,270, with the wife retaining:
d)money in controlled monies account Legal First (proceeds of the matrimonial home), $29,437
e)her superannuation, $18,787
amounting to a total of $48,224,
then the husband will be required to make a cash payment to the wife of $236,697. He should have two months to make this payment, otherwise the Property A property should be sold.
In the event that the property at Property A is sold, then the net proceeds of sale of the property shall be divided between the parties as to 55% to the wife, together with a cash payment of $13,947 (see the paragraphs immediately below), with the balance remaining to the husband.
The Court now summarises its calculations relating to the above cash payment of $13,947.
Assuming that the husband retains the boat and his superannuation, a total of $60,270, and the wife retains the monies in the controlled monies account, and her superannuation, a total of $48,224, then the husband should pay the wife additionally a cash sum of $13,947.
In relation to the value of the boat, the parties’ superannuation, the monies in the controlled monies account, and the partial property settlements, assets totalling $158,494, the wife should at the outset receive 55% of $158,494, $87,171 less $25,000 having already been received by way of partial property settlement, leaving $62,171. Because she only holds $48,224, the husband should pay the wife a cash sum of $13,947, to make up a total of $62,171.
Of the wife’s $284,921, when one takes out the wife’s superannuation of $18,787, she can utilise the balance of $266,134, at least in part, to pay off debt (debt that did not enter the balance sheet) and will be left with a modest capital sum. She remains living with her parents and intends to pay them board on beginning to receive Centrelink payments.
Of the husband’s $228,572, when one takes out the husband’s superannuation of $50,270, he can utilise the balance of $178,302 to pay off his debt (debt that did not enter the balance sheet). He will not be left with a significant capital sum after payment of such debt. However, he is relatively young and has a reasonable earning capacity.
The Court is of the view that its proposed property adjustment Orders will represent a just and equitable property settlement between the parties.

I certify that the preceding one hundred and ten (110) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Date: 29 March 2019

[2019] FCCA 783

29 March 2019

Key Legal Topics

Areas of Law

Family Law

Property Law

Civil Procedure

Legal Concepts

Remedies

Costs

Jurisdiction

Procedural Fairness

Injunction