Roswell & Roswell
[2023] FedCFamC2F 579
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Roswell & Roswell [2023] FedCFamC2F 579
File number(s): ADC 5529 of 2020 Judgment of: JUDGE BROWN Date of judgment: 23 May 2023 Catchwords: FAMILY LAW – Property settlement – marriage of 20 years duration – marriage produced three children – parties engaged in business – where husband attended to physical aspects for the business and the wife was charged with the administrative aspects – husband asserts that the wife expropriated assets during the marriage – parties acquired real properties throughout marriage – wife asserts she properly administered the family’s financial affairs through a trust and corporate trustee – children estranged from their father – consideration of s 75(2) of the Family Law Act 1975 (Cth) – treatment of add backs – assessment of contributions – just and equitable Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) Pt VIII, VIIIB, ss 75(2), 79, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Ch 12, r 12.17
Cases cited: Bevan & Bevan [2013] FamCAFC 116
Biltoft & Biltoft (1995) 19 Fam LR 82
Chorn & Hopkins (2004) 32 Fam LR 518
Clauson v Clauson (1995) 18 Fam LR 693
Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Collins & Collins (1990) FLC 92-149
Ferguson & Ferguson (1978) FLC 90-500
Ferraro v Ferraro (1992) 16 Fam LR 1
Fox v Percy (2003) 214 CLR 118
Hickey & Hickey (2003) 30 Fam LR 355
In the Marriage of Browne & Green (1999) 25 Fam LR 482
In the Marriage of DJM and JLM (1998) 23 Fam LR 396
In the Marriage of Kohan (1992) 16 Fam LR 245
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of Omacini (2005) 33 Fam LR 134
In the Marriage of Townsend (1994) 18 Fam LR 505
Jones v Dunkel (1959) 101 CLR 298
L & L [2003] FamCA 40
Laskari & Laskari and Ors [2014] FamCA 1183
Pierce v Pierce (1999) FLC 92-844
Robb and Robb (1994) 18 Fam LR 489
Rodgers & Rodgers (No 2) [2016] FamCAFC 104
Rushton & Rushton [2011] FMCAfam 1259
Russell & Russell (1999) 25 Fam LR 629
Stanford v Stanford (2012) 247 CLR 108
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Trevi & Trevi [2018] FamCAFC 173
Waters & Jurek (1995) 20 Fam LR 190
Watson & Ling [2013] FamCA 57
Division: Division 2 Family Law Number of paragraphs: 303 Date of hearing: 1 & 2 March 2023 Place: Adelaide Applicant: Appeared in person Counsel for the Respondent: Mr Dillon Solicitor for the Respondent: Shorter Legal Pty Ltd ORDERS
ADC 5529 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ROSWELL
Applicant
AND: MS ROSWELL
Respondent
order made by:
JUDGE BROWN
DATE OF ORDER:
23 May 2023
THE COURT ORDERS THAT:
1.Including but without limiting the effect hereof, the applicant, Mr Roswell (herein after referred to as ‘the husband’) shall retain for his sole use and benefit absolutely free from any further claim or demand of the respondent, Ms Roswell (herein after referred to as ‘the wife’):
(a)C Street, Town D being the whole of the land comprised and described in Certificate of Title Folio Identifier … (‘the Town D property’);
(b)1 E Street, Suburb F being the whole of the land comprised and described in Certificate of Title Folio Identifier … (‘the 1 E Street property’);
(c)Motor Vehicle 1;
(d)Recreational Vehicle 2;
(e)Trailer;
(f)All superannuation entitlements in the husband’s name; and
(g)Any other real and/or personal property and/or financial resources of the husband or in the husband’s name and/or possession not otherwise specified herein.
2.Including but without limiting the effect hereof, the wife, retain for her sole use and benefit absolutely free from any further claim or demand of the husband:
(a)G Street, Suburb H; (‘the Suburb H property’)
(b)Proceeds of sale held in J Conveyancing from the sale of K Street, Suburb L;
(c)Proceeds of sale held in J Conveyancing from the sale of 2 E Street, Suburb F;
(d)Motor Vehicle 2;
(e)Recreational Vehicle 3;
(f)Commercial vehicle;
(g)Cage trailer;
(h)Ms M gift monies of $64,616.00;
(i)All superannuation entitlements in the wife’s name; and
(j)Any other real and/or personal property and/or financial resources of the wife or in the wife’s name and/or possession not otherwise specified herein.
3.The husband pay to the wife the sum of one hundred and fifty five thousand dollars, four hundred and twenty three dollars and ninety one cents ($155,423.91) within sixty (60) days of the date of these orders NOTING this sum is inclusive of the payment of liabilities referred to herein at paragraph (4).
4.The wife be liable with discharging the following joint liabilities of the marriage:
(a)Overpayment of Family Tax Benefit of four thousand, three hundred and twenty eight dollars ($4,328.00);
(b)Australian Tax Office debt attributed to the wife of twenty thousand, seven hundred and forty dollars ($20,740.00); and
(c)Equipment debt to Ms M of five thousand and nine hundred dollars ($5,900.00)
5.In the event paragraph (3) is not complied with the parties shall do all acts and things and sign all necessary documents to list for sale by private treaty the Town D property on such terms as the parties may agree and in default of agreement as follows:
(a)With such real estate agent as agreed between the parties and failing agreement as nominated by the Secretary of the Real Estate Institute of South Australia;
(b)The list price of the Town D property shall be such amount as agreed between the parties and failing agreement within 14 days the list price will be as nominated by the real estate agent;
(c)The parties are to co-operate in every way with the real estate agent in relation to the marketing of the Town D property for sale including making the key readily available, allowing inspection of the Town D property at all times reasonably requested by the agent and ensuring that the Town D property is clean, neat and in good order at the time of inspection by any prospective buyer;
(d)The parties shall each pay to the estate agent one half of any sums requested for advertising or sale expenses and if one of the parties pays all of the expenses, that party shall be reimbursed from the proceeds of sale in respect of one half of such payments before any division between the parties;
(e)The Contract of Sale shall provide for completion within 30 days after the date of the contract or any other time period as agreed by the parties;
(f)The proceeds of sale of the Town D property shall be paid in the following manner and priority:
A.Any encumbrance affecting the property including rates, taxes and other reasonable expenses;
B.To meet all reasonable costs of sale, including payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;
C.Payment of the conveyancing costs and outlays relating to the sale, including reimbursement to a party for any advertising or sale expenses as contemplated in these Orders (if applicable);
D.The sum of one hundred and fifty five thousand dollars, five hundred and twenty three dollars and ninety one cents ($155,423.91) to the wife; and
E.The balance of funds to the husband.
6.Should the husband fail to place the Town D property on the market for sale, or fails to sign any documents necessary to place the Town D property on the market for sale within 14 days of any request in writing from the wife, the wife be at liberty to apply to the Court for enforcement orders on short notice.
7.The husband do, at his sole expense, all things and sign all documents necessary to remove the Caveat lodged over the Suburb H Property, the 1 E Street Property and the Town D Property.
8.The parties shall do all acts and things and sign all necessary documents for the following to occur within sixty (60) days of the date of these orders:
(a)For the transfer to the husband at the sole expense of the husband, all the wife’s right, title and interest in the 1 E Street property and the Town D property.
9.From the date of these orders, the applicant shall pay or cause to be paid outgoings relation to the 1 E Street property and the Town D property and the husband keep the wife forever indemnified in respect of all outgoings and expensed including and not limited to:
(a)Emergency Services Levies and Land Taxes;
(b)Council rates;
(c)Mortgage repayments (if any);
(d)Insurances; and
(e)Utilities
10.The parties are equally responsible for any capital gains tax liability issued arising from the sale of any properties sold.
11.The company N Pty Ltd be wound up and the Roswell Family Trust vests.
12.The parties do all such acts and things and sign all such document within fourteen (14) days from the date of these Orders to attend to:
(a)The transfer of any net funds in equal shares, to an account nominated by each party and thereafter within a further (14) days, do all such acts and things and sign all documents to effect the closing of the joint ANZ Bank Accounts numbered …85 and …05;
(b)Those funds jointly held in ANZ Bank Account …01 be transferred to an account nominated by the wife.
13.That the parties do all such acts and things and sign all such documents necessary to give effect to these Orders.
14.That pursuant to section 106A of the Family Law Act 1975 (Cth) that in the event that either party refuses or neglects to comply with the provisions of these orders, the Registrar of the Federal Circuit and Family Court of Australia is hereby appointed to execute all deeds and documents in the name of the defaulting party.
15.All extant applications are hereby dismissed.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These reason for judgment arise in the context of controversies between the parties concerned regarding the division of marital property, following a relationship and subsequent marriage of approximately twenty years in duration, which produced three children.
The parties to the proceedings are Mr Roswell “the husband” and Ms Roswell “the wife”.[1] Their children are twins, X and Y born 2007 and Z born 2008. The children currently live with the wife and do not engage with the husband.
[1] Although Ms Roswell has reverted to her maiden name, I will refer to her as “Ms Roswell” or “the wife” in these proceedings. I mean her no disrespect in this regard. This was the practice utilised by the parties and the wife’s counsel in the proceedings.
The proceedings were commenced by the husband on 13 November 2020. As will become apparent in due course, the proceedings have been significantly delayed. Notwithstanding the fact that it was the husband who commenced the proceedings, in my assessment, after having heard all the relevant evidence, the reasons for the delay must be attributed to the husband and the manner in which he has elected to approach the matter.
Mr Roswell is a tradesperson. In particular, he is an experienced in a specific trade. He and Ms Roswell met in 1999 and began to live together at the end of that year, in a property owned by the wife located at P Street, Suburb Q. Ms Roswell has also been involved in the trades industry, in various capacities, during her working career, including as a supervisor. At the date of hearing she was aged 51; whilst Mr Roswell was aged 58.[2]
[2] The husband’s date of birth is in 1965; the wife’s date of birth is in 1971.
The parties married in 2001 and separated in difficult and conflicted circumstances on 9 February 2020. It is the wife’s position that the husband behaved violently and it is for this reason that the children are estranged from him. It is a significant aspect of her case that the children remain traumatised and she has been left to provide for their needs with no financial assistance from the husband.
When the parties met, Mr Roswell was recently separated from his first wife. He has two children from this earlier marriage – Ms R and Mr S, both now adults. Mr Roswell accepts that he brought property of little significant value into the marriage with Ms Roswell.[3] She had the P Street property.
[3] See trial affidavit of Mr Roswell filed 12 July 2022 at [12]. Hereinafter referred to as the husband’s trial affidavit.
In early 2000, the parties went into business together. In 2001, the business was incorporated as N Pty Ltd. It traded as T Company and income was distributed pursuant to a related family trust – the Roswell Family Trust. There is no doubt that both the husband and wife worked very hard in the business and it prospered. At one stage, it employed 20 staff and utilised other sub-contractors to complete the projects for which it had been retained.
As a consequence of its success, T Company, between 2005 and 2020, albeit on a diminishing basis, was invoiced significant sums of money by its major supplier of materials, U Company. The largest sum being about $1.2m (inclusive of GST).[4] In this context, it is common ground between the parties that they elected to invest what profits were available to them in a portfolio of real property, augmented by motor vehicles.
[4] See affidavit of Mr Roswell filed 17 August 2022.
It is also clear that both the husband and wife were significantly involved in the running of their business but in different, albeit complementary capacities. The husband was engaged in the actual hard physical labour and working with contractors and employees; whilst the wife managed staff and administration, including managing its accounts, banking and ensuring taxation compliance.
In this role she engaged with the parties’ accountant and was instrumental in determining what should be the business’ structure and how the parties would achieve their long term financial and personal gains, which centred on an early retirement and a self-sustaining lifestyle at their former family home, which was a rural property located at G Street, Suburb H, on which they constructed a house in 2009, after purchasing the land in 2004.
The Suburb H property is registered in Ms Roswell’s sole name. It was valued at $910,000.00 at as June 2022. There is some controversy surrounding this valuation, as Mr Roswell asserts it is worth $1,000,560.00 on the basis that improvement relating to two sheds and a pool had not been included.
The wife and the parties’ children currently live in the property and Ms Roswell wishes to retain it.[5] It is unencumbered. The wife concedes that the husband worked hard on building the home at Suburb H and utilised his construction skills on it.
[5] See trial affidavit of Ms Roswell filed 13 February 2023 at [60 MR-12]. Hereinafter referred to as the wife’s trial affidavit.
During the course of the marriage, several properties were purchased and renovated. Other properties were purchased as investments and negatively geared. In particular, land at E Street, Suburb F was purchased in 2003 and registered in the wife’s sole name, on the advice of the parties’ accountant, for taxation purposes. Thereafter the wife took out a loan secured against the property, in 2006, so the land could be sub-divided and two dwellings constructed – Numbers 1 & 2 E Street.
At times, whilst the house at Suburb H was being constructed, the parties lived at 1 E Street and operated their business from 2 E Street. After the family moved to Suburb H, the two properties were rented out. At separation, Mr Roswell moved initially into 2 E Street and then into 1 E Street, which he still occupies. He wishes to retain this property, as he continues to live in it. It has been valued at $390,000.00 and is also unencumbered.
2 E Street was sold in 2022 for over $400,000.00. After the discharge of the mortgage and payment of expenses a sum of $13,733.73 was recouped, which remains in a trust account pending the resolution of this matter. The wife wishes to retain this sum.
Other properties relevant to these proceedings are located at K Street, Suburb L and C Street, Town D, a town in Region B. The latter was the family’s holiday home. It was again purchased in the wife’s sole name in 2012 for $270,000.00. The mortgage associated with the Town D property has since been repaid.
The property has been valued at $390,000.00, as at June 2022.[6] This valuation is also controversial given issues related to improvement done on the property and whether they do or do not have council approval. It is Ms Roswell’s position that the improvements have been approved and therefore an appropriate value is $445,000.00. Mr Roswell personally did much work to renovate the property, which is currently vacant. Mr Roswell would like to retain this property also.
[6] See wife’s trial affidavit filed 13 February 2023 at [57.3].
It is Mr Roswell’s current position that due to his compromised health, particularly a condition requiring surgery, and generalised anxiety resulting from the proceedings, and the stresses relating to separation, he has been unable to work in the arduous area of his trade, which requires physical activity.
As such, he does not believe it is likely that he will be able to return the full time workforce given his skills and injury. In these circumstances, he would like to utilise the Town D property as a short term holiday rental, which will provide him with an income stream.
The Suburb L property was purchased by the Roswell Family Trust in late 2012. The parties are the joint trustees of the trust and they are each the primary beneficiaries.[7] It was originally vacant land but a house was constructed on it using borrowed money. The property was tenanted. The property was sold in 2022 for $350,000.00. The mortgage associated with the property was approximately $87,000.00. Its sale attracted capital gains tax, which has been estimated to be $3,762.48 for each of them.[8]
[7] See wife’s trial affidavit filed 13 February 2023 at MR-17.
[8] See wife’s trial affidavit filed 13 February 2023 at MR-8.
Although there remain issues about other properties brought into the parties’ relationship and other properties bought and sold during the period the marriage was on foot in the context of both financial and non-financial contributions, these properties – the former family home at Suburb H; the holiday home at Town D; 2 E Street; and the proceeds of sale of Suburb L; remain the most significant items of property subject to these proceedings.
Otherwise the relevant pool of property consists of sundry items of personal property such as motor vehicles; recreational vehicles; and other items. It seems apparent that N Pty Ltd has no value, though the family trust related to it does have a liability to pay the parties’ children unpaid distributions made to them.
So far as superannuation is concerned each party has accumulated a roughly similar amount in the same accumulation fund – the husband $249,488.00; the wife $268,306.00. Given the parties’ respective ages, it seems to be the case that neither of them is currently well placed for retirement.
In this context, the parties have different views as to their respective prospective needs, within the parameters of section 75(2) of the Family Law Act 1975 (Cth).[9]As indicated above, it is the husband’s position that he faces a challenging financial future because of his age; the nature of his occupational skills, which are based on him being fit and strong; and his compromised health.
[9] Hereinafter referred to as ‘the Act’.
The wife does not accept the truth of these assertions. It is her view that Mr Roswell retains a significant level of capacity to earn an income, either through his own efforts or by employing others to work at his direction. She believes that Mr Roswell has been working surreptitiously in the period since the parties separated.
At present Ms Roswell is not engaged in the paid workforce. As previously indicated, she has been the sole provider of care for the parties’ children since separation. She is currently undertaking a course. Ms Roswell receives a family tax benefit but no child support from Mr Roswell for X, Y and Z.
Regrettably X has been diagnosed with a mental illness, which has further restricted the wife’s capacity to work and led to her incurring additional expense in obtaining psychiatric support for X. It is also Ms Roswell’s case that Y and Z are also psychologically vulnerable, in a large part to the circumstances surrounding the parties’ separation and afterwards. In these circumstances, she deposes as follows:
I have been unable to seek work outside of the home due the unpredictable needs of the children, their current mental health struggles, and [X’s] ongoing recovery from [her mental illness] which has been slow and exacerbated by delays in this matter. When the needs of the children permit, I hope to complete my […] studies and find part-time employment.[10]
[10] See wife’s trial affidavit filed 13 February 2023 at [155].
It is the effect of Ms Roswell’s evidence that she has a significant level of debt to the Australian Taxation Office; to her credit card for expenses related to the care of the children; and for her legal fees. As will be detailed further shortly, it is Ms Roswell’s position that these proceedings have been significantly delayed by the husband’s unreasonable conduct, leading to her legal fees being greatly increased.
In these circumstances, she seeks an order that the husband be assessed to pay her costs in a fixed amount of $75,000.00[11] or that what she regards as the husband’s unconscionable behaviour be taken into account, by the court, in a general manner, pursuant to the provisions of section 75(2)(o). It is also her case that he has not complied with his obligation to make a frank level of disclosure and has been deceptive about central issues in the case, leading to delay and unnecessary court appearances and ultimately expense.
[11] See wife’s trial affidavit filed 13 February 2023 at [294].
Although issues remain as to the exact construction of the asset pool, including in respect of what assets and liabilities should or should not be added back, in general terms, it would appear to be the case that it is valued somewhere in excess of $2m with liabilities of under $200,000.00.
Interestingly, in their recently amended application and response documents, the parties agree that in net terms the pool should be divided 65/35% in the wife’s favour. As indicated above, the husband wishes to retain 2 E Street and Town D.
The wife has no difficulty with this other than in practical terms, she does not regard it as probable that the husband can afford such an outcome, which would require the payment of a sum of money to her by him, given he does not seem to have any apparent borrowing capacity.
It is also noteworthy to point out that, although the parties disagree about the composition of items in their pool of assets, they are not greatly divergent in respect of values – the husband values net assets at $2.4m;[12] the wife at $2.3m.[13] The chief difference being monies standing in a joint account, in an amount of $125,000.00, which the wife asserts has been significantly reduced by her living and legal expenses and is, in any event, the product of a number of gifts from her aunt, Ms M.
[12] See husband’s trial affidavit filed 12 July 2022 at [298].
[13] See wife’s affidavit filed 13 February 2023 at [80].
Given the agreement between the parties regarding percentage allocations, the relatively confined issues regarding the construction of the asset pool, it might have been assumed that this would be a case that, with some assistance, would have been relatively easy to manage to a compromise, which would have avoided each party incurring significant legal expenses.
Regrettably such an assumption would have been misplaced. It is my impression that the powerful emotions unleashed by the parties’ difficult and acrimonious separation have prevented each of them, but particularly the husband, from being able to approach the case in an objective and rational fashion. As such, in my view, there has been a fundamental disconnect in the manner in which the parties have approached the case.
I mean Mr Roswell no disrespect. No doubt, he is a highly skilled tradesperson but he is not particularly adept at administration and finance. Ms Roswell, by dint of her past experience, had such skills. As such, when the parties began their marriage and formed N Pty Ltd, their skills were complementary and each trusted the other to perform their respective duties, in the business to their mutual advantage and to secure their joint aspirations.
With the end of their marriage, this trust has evaporated. In these circumstances, in my view, Mr Roswell has attempted retrospectively to reconstruct what happened, in financial terms, during the parties’ long marriage. Essentially, it is his view that due to the extent of his labours and what he now apprehends was the turnover of the business and its success, he and Ms Roswell must have a more significant level of asset backing than that which Ms Roswell has currently disclosed.
In these circumstances, he has drawn the conclusion that the only logical explanation for what he regards as an inadequate asset pool is that Ms Roswell has in some way salted away assets or money beyond his scrutiny and that of the court, which she will access, at some unspecified time in the future.
Although Mr Roswell has had professional assistance, from a number of solicitors and barristers, since he commenced these proceedings, he elected to appear on his own behalf when the case belatedly came on for hearing in March of 2023. This meant that he was charged with putting his allegations of impropriety both to the court and Ms Roswell in cross-examination.
Mr Roswell views Ms Roswell as some sort of financial wizard, who has moved funds around, made arrangement for loans and mortgages to be taken out in her sole name, to which joint funds have then been allocated to secure her clandestine aim to his long term detriment. Essentially, it is his case that he has been taken advantage of and his trust in Ms Roswell was misplaced.
In Mr Roswell’s own words, the business was making massive profits. As such, he was intent on pursing Ms Roswell to ensure that justice was accorded and the missing profits found. In this context, he asserted that he had provided fourteen volumes of documents to the Australian Taxation Office, which was, in his evidence currently investigating a significant criminal tax fraud involving Ms Roswell.
These allegations are not new but were raised in Mr Roswell’s first affidavit filed on 13 November 2020, when he deposed as follows:
I have always left the financial records and banking to my wife. Since our separation, I have had the opportunity to read some of our bank accounts and mortgage loan statements. I have a serious concern that there are a number of transactions and money transfers which I did not know about and I now want the opportunity to check all our records.[14]
[14] See affidavit of Mr Roswell filed 13 November 2020 at [57].
The wife strenuously denies that she is guilty of any financial impropriety. It is her case that the husband was informed in respect of significant decisions regarding how the business would be structured and was able to confer with the parties’ accountant. However, he did not regularly do so; had no head for what was happening; and, accordingly left all the practical arrangements to her, which she discharged diligently and honestly. It is her position that the relevant accounts are an open book and it is absurd to suggest that she has hidden a pot of gold somewhere.
It is her case that she acted on the advice of the accountant, particularly in respect of the most tax effective way of structuring purchases of both real property and various motor vehicles. She has deposed that rent received from the rental properties was applied to mortgages but was shifted around to minimise tax, but this was done within legal parameters.
The effect of her evidence is that there was a level of complexity to the parties’ financial affairs but not unduly so. She acted entirely appropriately at all times and on the basis of the professional advice which had been provided to her, which the husband was free to access whenever he wished.
She does not dispute that Mr Roswell worked very hard, as indeed did she. She also agrees that their business was profitable. In this context, she points to what she regards as a not insignificant asset pool. By necessary implication, it is her case that the other income generated by their mutual efforts has been spent in shared living expenses.
As a consequence of this controversy, each party has supplied copious documents to the court which occupy many volumes. Some of these documents are bank statements. The parties’ accountant was not called as a witness and did not produce an affidavit.
More significantly, despite Mr Roswell’s assertion that he would engage a forensic accountant to analyse these various records, no forensic accountant report has been forthcoming from him. In addition, he has not been able to supply any evidence or documents to indicate that the ATO is currently investigating his and Ms Roswell’s financial affairs or inclined to bring a criminal prosecution for a massive tax fraud. Even more significantly, Mr Roswell cannot point to any place or asset where the wife’s ill-gotten gains have been secreted, other than asserting that they must be somewhere.
As I will detail in more detail, when I come to set out the legal principles to be applied in the case, it is not the court’s function to conduct its own audit of the financial records of the parties. In addition, it is impracticable for the court to analyse every financial transaction, in which the parties were involved over their lengthy marriage, during which they operated multiple bank accounts and adopted accounting strategies to minimise tax exposure.
In general terms, for reasons I will expand upon in due course, it is my finding that Ms Roswell understood these mechanisms and managed the movements of funds required to operate them effectively; whilst Mr Roswell had no grasp of them.
ORDERS SOUGHT BY THE PARTIES
The husband, in his further amended application filed on 22 February 2023 seeks orders in the following terms:
·The parties’ net assets be divided 65/35% in the wife’s favour;
·The wife transfer her interest in 1 E Street and Town D to him;
·The wife retain the former family home at Suburb H;
·The wife retain the net proceeds of sale of K Street, Suburb L and 2 E Street;
·The husband pay the wife the further sum of $102,000.00;
·There be a split of the parties’ total superannuation to bring about a 65/35% division of superannuation in the wife’s favour;
·Each party retain the assets in their respective control and the liabilities associated with them; and
·N Pty Ltd be wound up and the Roswell Family Trust vest.
The wife, in her further amended response filed on 13 February 2023 seeks orders in the following terms:
·Net non-superannuation assets be divided 65/35% in her favour;
·K Street, Suburb L and Town D be sold and the following occur in respect of the proceeds:
·Costs of sale and monies secured be disbursed first;
·Her aunt Ms M be paid $5,900.00;
·Monies owed by her for HECS, Capital Gains Tax, overpayment of family tax benefits, and to Mr S be paid;
·Her credit card be paid;
·The balance 65/35% in her favour be paid to the parties.
·The wife receive the balance of proceeds of sale of 2 E Street, Suburb F;
·The wife transfer her interest in 1 E Street, Suburb F to the husband;
·The Roswell Family Trust distribute Motor Vehicle 1 to the husband and Motor Vehicle 3 to the wife;
·After lodging any tax returns required, the Trust be wound up;
·The wife retain the balance of monies gifted to her by her Ms M;
·N Pty Ltd transfer a cage trailer, commercial vehicle and a trailer to the wife and any other assets of the company be divided equally between the parties; and
·The parties retain the items of property distributed to them by the orders and other items in their respective control. Thus no superannuation split be made.
THE CONDUCT OF THE PROCEEDINGS
It is necessary to outline the various twists and turns, which brought the parties to trial in March of 2023, after the commencement of the proceedings in November of 2020. This is necessary as a consequence of the wife’s application for costs and to negate any suggestion that the husband has not been given sufficient opportunity to put his case and explore his central contention that the wife has engineered some form of occult and premature distribution of the parties’ wealth in her favour.
The husband was represented by a skilled and experienced family lawyer, when he commenced the proceedings. His application for final orders was unparticularised, which was explicable given the interim orders which he sought. These were as follows:
·The husband have the sole use and occupancy of 2 E Street, Suburb F;
·The husband be able to draw funds from the line of credit secured against the parties’ family home to meet his reasonable day to day living expenses and legal fees; and
·The wife provide to the husband any documents requested by him for submission to a forensic accountant to be nominated by him.
The wife responded to the application promptly on 12 January 2021. She too was represented by an experienced solicitor. She proposed that the husband retain 2 E Street and the Town D property; whilst she retained the former family home at Suburb H. She further proposed the sale of the parties’ other properties and a rationalisation of debt. On her calculations, the orders as specified, would have resulted in a 60/40% division of the parties’ pool of assets in her favour.
In her responding affidavit, Ms Roswell conceded that N Pty Ltd had been highly successful, in the past, employing a significant level of staff and sub-contractors. She deposed that in the 2015 financial year, it had had a turnover of more than $1,300,000.00. However, she challenged the husband’s assertion regarding the extent of its net operating profit. Essentially, she pointed out that turnover was not necessarily indicative of profit.
It was also the effect of her evidence that the latter stages of the parties’ marriage had been far from happy. In this context, she alleged that the husband had subjected her to physical and verbal abuse, including in the presence of the children, in the years leading up to separation. She also asserted that from 2015 onwards, the parties had decided to wind down their business because of the impact its workload was having on them and their children.
In his oral evidence, Mr Roswell does not necessarily disagree that the parties changed their focus to how they would be able to retire earlier than anticipated to the Suburb H property and be essentially self-supporting. This seems to have been a shared aspiration, which their acrimonious separation has destroyed.
It was the effect of the wife’s evidence that the circumstances surrounding the parties’ final separation, in early-2020 and afterwards, were extremely traumatic for her and the children as a consequence of the husband’s abusive and, in her view, increasingly irrational behaviour.
She alleges that he sent her rambling text messages alleging various degrees of impropriety against her, which forced her to engage the police, although she does not seem to have followed through with a formalised restraining order. She was also concerned that the husband had removed significant sums of money from the parties’ joint funds in the period following separation.
In response to the husband’s allegations that she had engaged in financial irregularities, during the marriage, and his demand that there be a forensic investigation of the parties’ financial affairs, Ms Roswell deposed as follows:
The applicant has made repeated demands that I provide him with 20 years of bank statements and threatens that he will have a full forensic investigation of our accounts over this period. He has made vague and unspecified allegations that he now mistrusts my management of our finances in the marriage. I have provided both the applicant and his solicitor large quantities of documents and historical financial paperwork but he still continues to demand more. I received a further request from the applicant’s solicitor on 10 December 2020 for additional historical documents (including those the applicant himself has access to) and further aggressive texts from the applicant.[15]
[15] See affidavit of Ms Roswell filed 12 January 2021 at [56].
The first mention of the matter occurred on 9 February 2021, on which occasion the parties agreed that Mr Roswell would have the sole use of 2 E Street; whilst Ms Roswell would occupy the Suburb H property. The parties were referred to mediation which, after an apparently convoluted process of discovery, involving the husband’s legal representative issuing a number of subpoenae to various financial institutions, occurred in October of 2021. Axiomatically, it was unsuccessful.
At relevant times, the court’s rules forbade any party in proceedings before it, issuing any more than five subpoenae, without the court’s leave.[16] In these circumstances, in the period leading up to the mediation, those advising Mr Roswell sought the court’s authority to issue such additional subpoenae. In an affidavit filed on 5 November 2021, Mr Roswell deposed as follows:
I have been undertaking a great deal of research into various transactions that occurred during our marriage, in order to endeavour to trace various amounts of money, in circumstances where I believe that my wife, who managed all our finances during our marriage, has removed significant funds from our joint enterprise and has not accounted for those funds.
I believe that obtaining the documents that I require from [V Bank] will enable me to prove that funds provided by that loan were not applied for the purchase of a motor vehicle, as was alleged at the time, and that those funds have been applied elsewhere.
I have engaged [Mr W], a Chartered Accountant, to assist me with enquiries.[17]
[16] See Federal Circuit and Family Court of Australia (Family Law) Rules 2021, r 6.27.
[17] See affidavit of Mr Roswell filed 5 October 2021 at [2] and [4]-[5].
Shortly after the abortive mediation, Mr Roswell began to act on his own behalf. Ms Roswell became frustrated at the slow progress of the matter, which had been on foot for approximately a year. In these circumstances, on 4 November 2021, she filed an interlocutory application seeking the sale of 1 E Street and the release of funds, from the line of credit, in order to provide for her and the children’s support. By this stage, she too was acting on her own behalf.
At this stage, the wife characterised the husband as being fixated on his allegations of her financial misconduct and intent on utilising the court process to inflict financial punishment on her. She further deposed that she had cooperated with Mr Roswell’s demands for excessive disclosure dating back over 20 years and noted that his engagement of a forensic accountant had yielded no proof of any wrongdoing on her part. This remains the case. As indicted at the outset, Mr Roswell has not provided any forensic accounting report, certainly not from Mr W.
At this stage, it was her position that the husband had utilised a far greater proportion of the parties’ liquid assets, whilst he occupied the E Street and Town D properties, which she maintained due to their registration in her sole name. It was also her position that it was apparent from the husband’s conduct in the case to date that he had no intention of engaging with her, in any productive fashion, in order to bring about an expeditious and rational resolution of the issues between them.
In the lead up to the date allocated for the hearing of the wife’s interim application, the husband instructed the firm of solicitors, which has intermittently represented him in the period since. In a response filed on his behalf, the husband indicated his opposition to the sale of 1 E Street. At this stage, Mr Roswell indicated that he had incurred legal costs of approximately $60,000.00. Ms Roswell indicated that she had incurred a sum of approximately $45,000.00 in her previous legal costs.
At the interim hearing of 10 February 2022, the husband was represented by very experienced counsel, whilst Ms Roswell appeared on her own behalf. At this stage, I was assured by Mr Roswell’s counsel, that with his assistance, Mr Roswell was now going to adopt a more considered approach to the litigation. In this context, the parties were able to agree on a raft of orders by way of partial property settlement.
Essentially, the parties agreed on the following:
·Mr Roswell would retain Recreational Vehicle 1, at an agreed valuation of $62,000.00; Recreational Vehicle 2, at an agreed value of $7,500.00; and Motor Vehicle 1, at an agreed value of $47,000.00.
·Ms Roswell would retain Motor Vehicle 2, at an agreed value of $77,000.00; and Recreational Vehicle 3, at an agreed value of $40,000.00.
It is the wife’s position that all of these items need to be factored into the parties’ pool of assets, at their designated values, in order to finalise the current proceedings. The husband does not appear to argue against this course.
In addition, the parties agreed that Mr Roswell would continue to reside at 2 E Street, whilst it was prepared for sale and then move into the residence at 1 E Street. It was also agreed that K Street, Suburb L, should also be sold. In addition, each of the parties was authorised to withdraw a sum of $50,000.00 from the line of credit account.
In these more positive circumstances, I decided to fix the parties’ competing applications for final hearing on 8 – 10 August 2022 but indicated that, if they wished, I would make an order for a further mediation or other informal alternative dispute resolution process.
Regrettably, it is my impression that any spirit of cooperation, reflected in these consent orders, did not last. Thereafter, the parties apparently fell into conflict as to the appropriate real estate agent to conduct the sale of the two properties concerned. In these circumstances, on 25 March 2022, Ms Roswell filed a further interlocutory application, in which she sought the court’s authority to have sole responsibility for organising the relevant sales.
In particular, she asserted that the husband had refused to discuss the appointment of a real estate agent with her and had not facilitated the re-painting of number 2 E Street. She also asserted that he had reneged on earlier agreements to return some items of personal property to her. Her application was listed later in April, at which stage, the issue regarding the identity of the appropriate real estate agent to conduct the sale had been resolved.
Formal trial directions were made by the court on 6 June in confirmation of the trial scheduled in August of 2022. These directions were made in the presence of Mr Roswell’s counsel. As directed, each party filed their respective trial affidavits together with amended applications. In anticipation of the trial, Ms Roswell had engaged a solicitor. All these documents were professionally prepared.
In his trial affidavit, Mr Roswell reiterated his allegation that Ms Roswell has misappropriated joint funds during the course of their marriage. He deposed as follows:
I have formed the view that the respondent has, over a long period of time, removed very substantial sums of money for our various accounts, and I believe that she has not fully disclosed funds which she has hidden from me.[18]
The source of this belief was said to be based on his examination of Ms Roswell’s financial disclosure in the case.
[18] See husband’s trial affidavit filed 12 July 2022 at [221].
The only actual transaction on which this allegation was based occurred in mid-June of 2005 and related to two cheques in sums of $11,866.10 and $27,851.51 respectively, which were banked in the business account and reversed two days later with the sums not reappearing in another account.
Otherwise, his assertion is based on his analysis of the company balance sheets, trading statements, profit and loss statements and notes thereon and what he agrees are a number of assumptions made by him. He has taken what he has characterised as the company’s declared revenue, from each annual financial statement and extrapolated from that what he asserts is number of days worked by each employee; what he asserts was the average cost of materials at relevant times.
As a consequence of these matter, Mr Roswell has estimated that:
For financial years ended 30 June 2002 to 30 June 2008 inclusive, there is a shortfall in the reported turnover of the company in each said financial year by approximately $800,000.00 totalling $5,600.00 for the said financial years.[19]
In this context, he asserts that Ms Roswell appears to have cash loaded credit cards in her name.
[19] See husband’s trial affidavit filed 12 July 2022 at [235].
A number of things needed to be pointed out in respect of this evidence at this juncture, which can be summarised as follows:
·The alleged irregularities relate to a much earlier stage of the parties’ marriage;
·The documents on which he has based his allegations of financial irregularity have been voluntarily disclosed;
·He apparently signed off on the various records, in question, as the director of N Pty Ltd;
·The accountant who prepared the returns has not been called in these proceedings;
·No other accountant, forensic or otherwise, has been called to comment on the records or the validity of the assumptions made by Mr Roswell and his conclusions about the existence or otherwise of missing monies;
·Mr Roswell has exhibited the bank statements of N Pty Ltd from November 2001 onwards and presumably therefore he has examined them;
·Mr Roswell has exhibited Ms Roswell’s credit card statement from July 2013 until July 2014;
·Ms Roswell herself has disclosed other of her credit card statements and other records of accounts in her sole name;
·Mr Roswell has not asserted, in any of his affidavit material, that Ms Roswell has been living a life, marked by an obvious level of consumption or luxury, which is not in keeping with her other apparent circumstances.
In general terms, Ms Roswell has provided some 1008 pages of exhibited documents, in three folders; whilst Mr Roswell has provided some 1278 documents in four bound volumes. I have no doubt that Mr Roswell has subjected all these documents to a high degree of scrutiny and in the search for some form of smoking gun. The onus is on him to find it.
It is not my role or function to conduct an analogous examination of the documents in question or formulate my own theories as to what the company document do or do not mean to those conducted by Mr Roswell or anyone else. I am not a forensic accountant and the hearing before me is not an exercise in forensic accountancy.
On 1 August 2022, approximately a week prior to the date scheduled for the final hearing, Mr Roswell filed a notice of address for service reflecting his own residential address. The solicitor who had prepared his trial documents did not formally withdraw.
When the case came on for trial on 8 August 2022, Ms Roswell duly appeared with her counsel Mr Dillon. Neither Mr Roswell nor any lawyer instructed by him appeared. In these circumstances, the court, of its own volition telephoned Mr Roswell, who informed me that he had mistaken the day. As I recall I indicated to Mr Roswell that he was required to be in court as soon as possible and he attended shortly after lunch on that day.
At this stage, the parties indicated to me that they believed the matter was capable of resolution. In these circumstances, at short notice, I arranged for the parties to attend upon an experienced Judicial Registrar of the Court to engage in a financial conciliation conference. When the parties returned to court, late in the afternoon, I was advised by each of them that the case had been resolved consensually. However, some time was required to put the agreement into writing. As a consequence, the following notation and orders were made:
UPON NOTING the parties have reached and in-principle agreement with the assistance of [the] Judicial Registrar […] and require further time to finalise a consent minute of order and to allow procedural fairness to be afforded
THE COURT ORDERS THAT:
Further consideration of the matter is adjourned to 18 August 2022 at 2.15pm for consideration of consent orders to be made finalising the matter NOTING the proceedings will be conducted face to face at Court.
No such consent order was ever forthcoming. On 16 August 2022, Mr Roswell re-engaged the solicitors who had previously acted on his behalf. A short time later, an application was made, on Mr Roswell’s behalf, to issue a further subpoena directed to the Westpac Bank, in addition to an earlier one which had been issued to that bank on 26 February 2021.
Mr Roswell asserted that the initial subpoena had only covered bank records for the period from 1 July 2013 to 31 December 2020 and information recently available to him indicated financial irregularities for the period between 2007 and 2011.
Ms Roswell filed a lengthy affidavit, in which she detailed why she opposed the issue of the relevant subpoena to Westpac. The wife conceded that she was the primary card holder in respect of a credit card issued by the bank. She further deposed that the husband had been a subsidiary card holder, which had been used for company and family expenses, including by Mr Roswell himself. In these circumstances she alleged that Mr Roswell had deliberately lied when he said he had not known of the existence of the card.
In these circumstances the application was opposed by Ms Roswell. She complained that Mr Roswell had not revealed any of the details of the source and quantum of fees paid by him to Mr W for the forensic accounting report, which had not been released. She contended that the husband was conducting some form of witch hunt against her, which would not produce any conducive evidence that she had done anything wrong because she had not done so.
In these circumstances, she had asserted that the husband’s actions were directed not to any legitimate forensic purpose but only to delaying the proceedings and causing her the most possible degree of financial detriment. It was also her position that the delay was causing her and the children a significant degree of psychological distress and harm.
I was not persuaded that the issue of the further subpoena would serve any forensic purpose in the absence of any legitimate accounting evidence. Given the number of subpoenae already issued, including to the same bank, I viewed it as a fishing exercise. In these circumstances, as a consequence of the abortive conciliation conference, the matter was re-fixed for final hearing on 1, 2 & 3 March 2023. The costs of the wasted hearing were reserved to the trial.
In the period between September 2022 and the date allocated for the final hearing in March 2023 each party filed an amended application – the irony of these applications, in the light of what had hitherto transpired that each party sought essentially the same orders. In addition to his own trial affidavit(s), Mr Roswell relies on the following affidavits:
·An affidavit of his brother Mr AA who deposed that he had loaned the husband $5,000.00 in July 2022. He was not required for cross-examination.
·An affidavit of Mr BB, an engineer, who provided a quote to perform some works the former family home. He was cross-examined.
Ms Roswell relied only on the affidavit material, which she had personally deposed and filed.
The lead up to the March trial was marked by the same sequence of events as had led up to the August 2022 trial. A few days prior to the hearing, Mr Roswell filed a Notice of Address for Service referrable to his home at 1 E Street, Suburb F. His solicitor, who had hitherto prepared documents on his behalf did not formally withdraw.
However, Mr Roswell did appear at the correct time scheduled for the trial to commence. He sought some time to negotiate with those advising Ms Roswell. They were not willing to enter into any such discussions.
Accordingly, the matter proceeded, somewhat to Mr Roswell’s chagrin. I was satisfied that the parties had had more than enough time to discuss potential settlement prospects and Mr Roswell personally had had plenty of time to prepare his case and put whatever matters he wished to do so to Ms Roswell.
THE EVIDENCE
It is necessary for me to indicate the evidentiary standards which apply to these proceedings and provide my overall impressions of each of the parties. In these reasons for judgment, findings of fact are made on the balance of probabilities, from my observation of the demeanour of each of the witnesses concerned.[20] I have tried to reach my conclusions on credibility and reliability on the basis of contemporary materials, objectively established facts and importantly, on the apparent logic of events.[21]
[20] See Evidence Act1995 (Cth) s 140.
[21] See Fox v Percy (2003) 214 CLR 118, 129 [31] (Gleeson CJ, Gummow and Kirby JJ).
The wife’s case and the documents supporting it has, in my view, been thoroughly and honestly prepared. In addition, in my assessment, she presented in the witness box as a pleasant and transparently sincere witness, who told the truth under cross-examination. She was, however, not under cross-examination for very long, notwithstanding the fact that I was under pains to explain to Mr Roswell that this was his opportunity to put any and all the allegation of financial impropriety which he wished to level against Ms Roswell and it was improbable that he would get another such opportunity in these proceedings.
These proceedings have been on foot for a significant period of time. As is evident from the history set out above, it has been Mr Roswell’s position from the outset that Ms Roswell has stolen from the family to his current financial disadvantage. In my view, there is no evidence to indicate anything other than Ms Roswell has abided by her legal obligation in these proceedings to make full and frank disclosure of her financial circumstances.
It cannot be said, in my view, that she has deprived Mr Roswell of the opportunity to examine the financial records of the family and of N Pty Ltd, including the ability to commission his own independent audit of them. His wish in this regard has been articulated throughout the proceedings. Whether such an examination was undertaken and what were its results is unknown to me as Mr Roswell elected not to enlighten either me or Ms Roswell about the issue.
In her affidavit material, Ms Roswell provided a comprehensive rebuttal of the allegations made against her and demonstrated that she had a superior knowledge of the parties’ finances derived from the fact that she was largely responsible for them, with Mr Roswell’s acquiescence. The same was true of how she presented in cross-examination.
She impressed as a person who was on top of the parties’ financial affairs during their lengthy marriage and who moved funds around between accounts, including mortgages relating to investment properties and in respect of motor vehicles purchased via credit, in a manner which was directed towards tax minimisation, particularly in respect of negative gearing. I suspect that Mr Roswell either did not understand such issues or chose not to consider them. He himself concedes that he left such matters to his wife. It seems to me to improbable in the extreme that Ms Roswell was engaged in scheme to salt away funds from him in the first decade of the parties’ twenty year marriage.
Most significantly, Mr Roswell was not able to put to Ms Roswell the location of her ill-gotten gains or cross-examine her to establish that she was current living or had lived in a manner which reflected some hidden source of income, garnered during that twenty year marriage. In my finding his case is based on innuendo and suspicion.
Mr Roswell presented as a bluff and self-confident person. However, this proved not to be the case in practice when push came to shove. He asserted that he had presented some fourteen folders to the ATO which would reveal the extent of Ms Roswell’s malfeasance. As previously indicated, nothing has come of this intervention and Mr Roswell himself is not in a position to indicate what steps, if any, the ATO is considering. Certainly, he has provided this court with no documents to indicate that the ATO were taking any specific action.
In this context, when he actually came to cross-examine Ms Roswell, it was something of an anti-climax. He put two issues to her regarding the reversal of two bank cheques and monies said to have paid to a family friend – both transactions now of a significant age, having arisen in June 2005. Ms Roswell was able to respond coherently and rationally to the assertion that the transactions were in any way sinister, indicating her view that the reversal related to an obvious bank error.
Thereafter Mr Roswell indicated that he felt out of his depth and the task which he had set for himself was harder than he had expected. I reiterated to him that he would only have the one opportunity to cross-examine Ms Roswell and it was not my role to subject her to any form of oral examination by the court in his stead because he could not.
Notwithstanding this stricture, Mr Roswell elected to let his cross-examination rest. He did not cross-examine the wife about what he had asserted, in his affidavit evidence, were irregularities in her use of a visa card issued to him. More significantly, he did not put to Ms Roswell his allegation, centred on his analysis of the business arising from its turnover, payroll and the costs of materials, that she had made substantial taking from the business.
In these circumstances, in my assessment, Ms Roswell’s overall credibility in the case is unassailed and Mr Roswell’s case remained one of unfounded speculation and innuendo. Essentially, Mr Roswell believes that because he worked so hard, for such a lengthy period of time, during which many properties and motor vehicles were purchased, the parties must be better off now and therefore the only explanation that they are not is that someone has stolen from him. In my view, although I do not doubt the strong emotional attachment of Mr Roswell to his theory, he has provided no concrete evidence to support it.
In this context, it should be noted that in her trial affidavit,[22] Ms Roswell has deposed as to the use of credit cards by each of the parties during their marriage. The account was in her name, with Mr Roswell holding a subsidiary card. One of the strategies adopted by Ms Roswell was to use the card for both business and personal/family expenses to maximise reward incentives.
[22] See wife’s trial affidavit filed 13 February 2023 at [250] – [257].
In particular, she deposed as follows:
Although the Visa was a personal account, as it was also used for Company expenses, I accounted for all transactions made on it in the Company books, with those credits and debits of a personal nature for the Husband, myself, and the children, such as food, education costs and medical expenses, recorded against Director's loan account […00] in MYOB. Lump sum payments paying down the Visa account from our personal accounts were recorded as a credit on the […00] account. Company expenses included fuel, insurances, and licensing to name a few, in addition to those trade supplier payments, such as [U Company], were allocated to their relevant expense accounts.
Transactions for the director's loan […00] account for the period 1/7/2008 to 30/6/2020 were disclosed on 2 March 2021for the Husband's forensic accountant.
[CC Company] paid us via cheque on a weekly basis, whereas company suppliers, such as [U Company], provided payment terms to us of 30 days after the end of month.
As funds received from [CC Company] were not required until end of month to pay accounts, in the interim, and to maximise the benefit of being in receipt of said funds, I would transfer lump sums out of the [N Pty Ltd] company account, that weren't required at the time, into the [Town D] offset account, to reduce interest accruing on that loan for benefit of the parties. The Husband was aware of this. I would then transfer into either the company account or Visa credit card account, as required to pay bill.
Whilst I acknowledge that I moved funds between accounts, neither the Husband, nor his forensic accountant [Mr W] has provided any evidence of wrongdoing.[23]
[23] See wife’s trial affidavit filed 13 February 2023 at [252] – [256].
The husband did not seek to challenge the wife, in cross-examination, in respect of any of these matters. More significantly, notwithstanding his allegations of irregularities and the fact that subpoenae were issued to various banks to secure bank records and a forensic accountant was said to have been retained, Mr Roswell did not seek to call with Mr W or any other accounting expert. In these circumstances, I consider that it is open to me to conclude that Mr Roswell did not have available to him evidence from such a source to advance his case and more specifically, Mr W’s evidence was of no assistance to him.[24]
[24] See Jones v Dunkel (1959) 101 CLR 298.
Apart from the issue of Ms Roswell’s alleged and unsubstantiated misappropriation of monies, there were few other major issues in dispute between the parties. However, Mr Roswell is obviously not well-disposed towards Ms Roswell and, as a consequence, on occasions, it is my view he skewed his evidence so that it favoured him, at Ms Roswell’s expense. The most obvious example of this was his attempt to inflate the value of the former family home; whilst deflating the value of the Town D property, which he wishes to retain.
In addition, it is abundantly clear to me that Mr Roswell has been resistant to the expeditious resolution of these proceedings. The most rational explanation, certainly that proffered by Ms Roswell, for this conduct has been that he wishes to inflict financial damage on Ms Roswell. However, whether Mr Roswell is motivated by some such explicable form of motivation or is just, in some other way, stuck and so unable to move on in a manner which is of assistance not only to him but his former partners, is impossible for me to say.
All that has to be said, at this juncture, is that Ms Roswell was by far the more reliable witness in the proceedings and she has clearly done all that was in her power to bring them to a conclusion. The same cannot be said of Mr Roswell, whose case has been characterised by delay; withdrawal and then re-appointment of his legal advice; apparent settlement, which is subsequently repudiated; fruitless attempts to subpoena documents, which are then not relied upon; and most significantly inchoate and subsequently unsubstantiated claims of financial impropriety.
In addition, when one looks at his amended application and the asset pool identified by him, in his own affidavit, the practical differences, in the outcomes proposed by each party in dollar terms, are not significant. In these circumstances it is perplexing that the case has consumed such a large sum of money and amount of time.
THE LEGAL PRINCIPLES APPLICABLE
Part VIII of the Act deals with financial matters relating to parties who are or have been married to one another. In particular, section 79(1) authorises the court to alter the property interests of the parties to a marriage. In addition, Part VIIIB provides specific provisions enabling the splitting of superannuation between spouses.
The process to be followed for the division of the parties’ property is well-established by law.[25] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Act. I am required to follow a number of specific steps.
[25] See Ferraro v Ferraro (1992) 16 Fam LR 1; Clauson v Clauson (1995) 18 Fam LR 693; Hickey & Hickey (2003) 30 Fam LR 355.
In the first step, I must ascertain what are the parties’ assets and liabilities available to be divided between them. The general rule is that those assets are to be determined as at the date of trial.[26]
[26] See Biltoft & Biltoft (1995) 19 Fam LR 82.
The controversy relating to the first step, which the court must resolve, concern the following:
·The value of the former family home at Suburb H;
·The value of the holiday home at Town D;
·Ms Roswell asserts that monies relating to the sale of Recreational Vehicle 1 by Mr Roswell should be included. Whilst initially not agreed, the husband now seems to concede the amount concerned;
·What debts should be factored into the pool, particularly those relating to loans advanced by family members to Ms Roswell to fund her legal fees;
·Ms Roswell also asserts that a credit card debt, in her name, acquired after separation, in an amount of $25,000.00 should be included as a joint debt of the parties as it relates to educational and other expenses of the parties’ children;
·Should a debt owed to Ms Roswell’s aunt for the installation of equipment at Town D, in an amount of $5,900.00 be included;
·How should capital gains tax on the sale of 1 E Street and K Street be approached and the wife’s HECS debt, which may crystallise in the current financial year be approached;
·Should monies due to the parties’ children, noted as loans from the family trust be included as a joint debt of the parties. The relevant amount is $21,909.00;
·In addition, it would appear to be the case that each child has an account which reflects monies actually distributed. The sum in question is $50,047.00. Ms Roswell proposes that this be referenced as a financial resource;
·Other issues arise as to the specific amount of cash, in bank accounts, each party should be allocated; and
·Should monies withdrawn from the line of credit by each party, post-separation, and utilised to pay legal fees be notionally added back into the pool.
In the second step, I must ascertain the contributions, which each party has made towards the matrimonial pool of assets, as I find them, following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, 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.[27]
[27] See Family Law Act1975 (Cth) s 79(4)(c).
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
At this second stage, the task set for me requires the balance and comparison of a multiplicity of contributions, many of which are necessarily different in nature, within the framework of a marriage.
Many contributions in a marriage, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value in absolute dollar terms. In contrast, the monies contributed by a wage earner are easier to quantify. However these difficulties do not absolve the court of its obligation to undertake the required assessment of contributions.
The court’s discretion is a wide one but must be exercised judicially. The task conferred is to weigh and assess contributions, which are necessarily disparate in nature. In summary, contributions, within the framework of a marriage, which are different in quality and nature must be compared, in order to achieve a just and equitable division of property. It has been referred to as a holistic exercise.[28] Certainly, it is not to be approached as a simple accounting or arithmetical exercise.
[28] See Watson & Ling [2013] FamCA 57 at [13] (Murphy J).
In my assessment, there are not many controversies which arise at the second stage. As previously indicated, it is my view that, during their lengthy marriage, each party worked extremely hard in their business and to advance the interests and security of their family. What controversies arise can be summarised as follows:
·Ms Roswell points to the fact that she played a significant role in caring for Mr Roswell’s two children, Ms R and Mr S, from his earlier marriage. They lived with the parties between 1999 and 2005/2008 for 50% of the time;
·It is Ms Roswell’s case that her aunt, Ms M made significant cash advances, to an amount approximating $120,000.00, which need to be accounted as a direct financial contribution attributable to her;
·It is Ms Roswell’s case that in the period post separation, she has discharged all of the parenting and homemaking responsibilities for the parties’ three children with no financial support from Mr Roswell;
·In particular, it is she who has paid the children’s significant private school fees and ancillary expenses;
·She has managed the parties’ family trust. She has allocated the rent received for the negatively geared properties and has met the shortfall required to maintain the various mortgages;
·The parties each acknowledge having made withdrawals from a line of credit associated with the parties’ financial arrangements. They disagree as to how these withdrawals should be regarded by the court;
·Ms Roswell brought her property at P Street, Suburb Q into the relationship. Its purchase price, in 1992, was $90,000.00 the bulk of which was borrowed. It was sold for over $120,000.00 in 2001. The property was renovated extensively. The husband asserts that much of the work was done by him; the wife does not agree. It is also her case that contributions attributable to her resulted in the property being rendered debt free;
·Ms Roswell had long-service entitlements relating to her employment and inheritance, which were realised during the parties’ relationship which were utilised for joint purposes;
·During the parties’ marriage, they purchased a number of properties, which included a piece of vacant land at DD Street, Suburb F; a house at EE Street, Suburb FF; and a house at GG Street, Suburb HH.
·The first property purchased was financed by monies received by Mr Roswell from a property settlement with his first wife in an amount of $23,500.00, in addition to a loan from V Bank.[29] The parties hired a builder to build a home on it. It was the parties’ home at times. Mr Roswell did much work on the building, a fact which Ms Roswell does not dispute. It was sold in 2008 for over $380,000.00, realising a significant profit;
·The second property was purchased in 2000 for $90,000.00, most of it borrowed. It too was renovated, again by Mr Roswell, although the parties disagree about the extent of the work. It was sold in 2002 for $140,000.00 realising a profit of around $53,000.00, again a significant profit;
·The third property was purchased in 2015, by the parties in their capacity as the trustees of the Roswell Family Trust for $120,000.00. It was sold in early 2017 for $140,000.00;
·It is Mr Roswell’s case that it was his efforts which got N Pty Ltd up and running and kept it going, when Ms Roswell was engaged in parenting the parties’ children from 2007 onwards. He further asserts that he did help with the twin’s care and other home duties on a regular basis;
·Mr Roswell concedes that Ms M made monetary advances to the parties from 2012 onward. However, it is his position that these were gifts made to the parties jointly;
·It is Mr Roswell’s case that he made very significant improvements to the Town D property transforming it from a basic shack to a modern home. He installed the septic system and the garage. He estimates the costs of materials used to upgrade the property, which he provided at an amount of approximately $60,000.00; and
·However, Mr Roswell’s major contention, which has already received significant attention is that Ms Roswell has made what must be approached as an overall negative contribution in respect of the acquisition of marital assets as a consequence of her financial dishonesty.
[29] See Exhibit MR-3 to wife’s trial affidavit filed 13 February 2023.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Act. Pursuant to section 75(2)(o), the court is entitled to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.
Again, the various controversies arising at the third stage can be relatively easily summarised in the following terms:
·It is Mr Roswell’s evidence that he and Ms Roswell decided to wind back their business from 2015 onwards in order to concentrate on their plans to have a self-sustaining retirement at the Suburb H property.
·In large part this was motivated by his declining health relating to the physically demanding nature of his work as a tradesperson, occasioned by a need for constant kneeling/squatting and climbing ladders;
·In addition, Mr Roswell has provided what is entitled a patient health summary from his general medical practitioner in Town JJ, Dr KK.[30] It is dated 25 January 2023 and is as it is entitled a brief summary largely of Mr Roswell’s current medications and his active past history, which includes joint dislocation/reconstruction; chronic pain; anxiety; and other medical conditions;
[30] See Exhibit C.
·It is Mr Roswell’s evidence that he requires surgery and is constant pain as a result of arthritic damage. However, he is unaware as to when the surgery will occur;
·Given these factors, it is the effect of Mr Roswell’s evidence that his compromised physical and mental health preclude him from returning to the workforce, particularly in the physically demanding sphere in which he works, which is a most marketable skill, although he has expertise in another profession;
·Ms Roswell does not agree. It is her case that Mr Roswell has overstated the level of incapacity to work and has elected to let his occupational licence lapse. She asserts that he is working for cash, including assisting neighbours at Town D with building jobs;
·In addition, even if Mr Roswell does suffer some physical incapacity, Ms Roswell asserts that he could work as a supervisor, trade trainer or in another profession. In this context, she asserts that he has a capacity to earn an annual salary of between $95,000.00 and $115,000.00;
·It is the wife’s case that the fact that she personally has been allocated capital gains tax relating to the sale of parties that are equitably jointly owned has implications for her eligibility for a school card concession to enable her to defray some of the children’s private school fees and related expenses, which is a factor which favours her. These expenses are around $17,000.00;
·She will be responsible for the children’s medical expenses, particularly for X and Y’s psychological treatment;
·She will be responsible for the cost of the children’s extramural activities and, in time, driving lessons;
·She receives no or limited child support from Mr Roswell;
·At the present time, Ms Roswell is enrolled in a course but, as yet, she has completed only one unit of the seventeen required to qualify;
·Given her parenting responsibilities, particularly related to X’s protracted recovery from a mental illness, it is her case that she is precluded from engaging in the paid workforce;
·In essence, each party asserts that other has a greater future capacity to earn; and
·Finally, it would appear to be Ms Roswell’s case that the fact that Mr Roswell has caused the proceedings to become unnecessarily protracted and put her to considerable additional expense, is a factor which can be taken into account pursuant to the provisions of section 75(2)(o) as are other issues relating to the various add backs identified by her, including monies borrowed for legal fees, if the court elects not to include them on a dollar for dollar basis.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[31]
[31] See Russell & Russell (1999) 25 Fam LR 629, 644 [80] (Ellis, Finn and Mushin JJ).
At the end of this process, the court must apply its various assessments to the assets it has identified. This is invariably done in percentage terms. However percentages can be misleading. As Coleman J put it in In Steinbrenner & Steinbrenner (‘Steinbrenner’): [32]
Given the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case…
[32] See Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234].
As noted at the outset, notwithstanding the various controversies arising between the parties, ostensibly at least, they agree that the overall division of whatever is determined to be their pool of property should be allocated, in percentage terms, 65/35 in Ms Roswell’s favour.
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a process of social engineering,[33] nor is it one of equalisation of assets or financial resources between former spouses.
[33] See Waters & Jurek (1995) 20 Fam LR 190, 196 (Baker J).
In these circumstances, I can understand why each party feels disgruntled that the trial had to go ahead – the husband because he thought there would be negotiations; the wife because she did not trust any offer to settle made by the husband.
Section 117(1) of the Family LawAct 1975 abolishes for the purpose of family law proceedings, the general rule that, in civil proceedings, costs follow the event. It provides that each party should bear his or her own costs in such proceedings.
However, pursuant to section 117(2), if the court is of the opinion that there are circumstances that justify it in doing so, it may, subject to a number of stipulated considerations, make such order as to costs as it considers just.
The relevant considerations are set out in section 117(2A) of the Act and are as follows:
•The financial circumstances of each of the parties to the proceedings;
•Whether any party to the proceedings is in receipt of legal aid;
•The conduct of the parties to the proceedings, including in respect of issues of discovery and production of documents;
•Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court;
•Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
•Whether any party has made an offer in writing to settle the proceedings and the terms of any such offer;
•Such other matters as the court considers relevant.[64]
[64] Family Law Act 1975 (Cth) s 117(2A).
Given the inter-relation between subsections (1) and (2) and the nature of family law proceedings generally, orders for indemnity costs are extraordinary or exceptional in nature. The Full Court of the Family Court noted Inthe Marriage of Kohan that an order for indemnity costs as being a very great departure from the normal standard.[65] In this context, the Full Court said as follows:
The court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind.[66]
[65] See In the Marriage of Kohan (1992) 16 Fam LR 245, 254 (Strauss, Lindenmayer and Bulley JJ).
[66] See In the Marriage of Kohan (1992) 16 Fam LR 245, 258.
It is frequently the case that litigants in family law proceedings have no personal experience of the court system or in dealing with legal professionals. A case involving division of marital property or arrangements for children may be the first time they have ever even entered a courtroom. Necessarily such cases are replete with emotion and, as such, do not enable the individuals concerned to exercise dispassionate judgment about the issues raised, and the cost, both in emotional and financial terms, of pursing their preferred outcome.
It is even more difficult to be dispassionate if one is representing oneself, and so does not have the guidance and steadying influence of an experienced lawyer. However, it is not the function of the court to protect such individuals from themselves. In addition, a person should not be penalised because they have taken the prudent step of securing legal representation, often at great personal expense, whilst the other party has not elected to do so.
Regrettably, it is not unknown for parties to be motivated by malice in how they approach litigation, particularly if they are not burdened by having to pay for representation. Every case has its idiosyncratic features, which must be balanced against each other in order to ensure that whatever order for costs is made, it is a just and fair one.
There is no closed category of cases in which indemnity costs may appropriately be awarded. However, in Colgate Palmolive Co v Cussons Pty Ltd,[67] the Full Court of the Federal Court indicated that the kinds of situation in which indemnity costs might be considered included those in which a litigant had:
•Commenced or continued an action knowing it to have no chance of success;
•Made false or irrelevant allegations of fraud;
•Made groundless allegations, which prolonged the case concerned; and
•Imprudently refused an offer to compromise.[68]
[67] See Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225.
[68] See Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 231-233 (Sheppard J).
The calculation of cost is governed by the provisions of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), which came into force on 1 September 2021. Chapter 12 thereof deals with costs.
If the court determines to make an order for costs, it has a wide discretion as to the calculation of such costs. Pursuant to rule 12.17, it may order costs in a specific amount or to be assessed on a particular basis, including in respect of indemnity costs.[69] It may also direct that costs be calculated pursuant to a methodology prescribed in schedules to the Rules.
[69] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17.
STEP ONE – THE POOL OF ASSETS AND LIABILITIES
The wife and husband have provided a balance sheet in their respective trial affidavits. For the reasons provided above, in my view, the fairest way to approach the pool of assets is for the court to focus on the parties’ tangible assets and liabilities. It being my view, that it is difficult, if not impossible for the court to identify all their respective incidents of financial expenditure and sheet them home.
In these circumstances, I find the parties asset and liabilities to be as follows:
Assets Value ($) Former Family Home at Suburb H 910,000.00 Town D property 445,000.00 Proceeds of sale of K Street, Suburb L 250,907.46 Proceeds of sale of 2 E Street, Suburb F 13,733.37 1 E Street, Suburb F 390,000.00 Recreational Vehicle 1 (husband) 60,000.00 Recreational Vehicle 2 (husband) 7,500.00 Trailer (husband) 7,000.00 Motor Vehicle 1 (husband) 47,000.00 Motor Vehicle 2 (wife) 77,000.00 Recreational Vehicle 3 (wife) 40,000.00 Commercial vehicle (wife) 4,000.00 Cage trailer (wife) 3,000.00 Ms M money (wife) 64,616.00 Total Assets $2,319,756.83 Liabilities Value ($) Wife’s current ATO liability 20,740.00 Overpayment of Centrelink Benefits 4,328.00 Equipment (Ms M) 5,900.00 Total Liabilities $30,968.00 Net Assets $2,288,788.83 STEP TWO – ASSESSMENT OF CONTRIBUTIONS
Neither party has provided me with a case outline which delineates how contributions are to be approached in percentage terms. In his closing submissions, counsel for the wife, Mr Dillon proposed that contributions should be assessed as being 42.5/57.5% in his client’s favour.
The marriage between the parties was one of significant length – being over twenty years in duration. It produced three children and during a large proportion of the marriage, the family also included the husband’s two children from his earlier relationship.
The parties seem to have been energetic and resourceful individuals, whose various talents compliment the others. Clearly, they each worked very hard during their marriage in a variety of capacities. As a consequence, by dint of their hard work, they built up a large portfolio of real property. They also built their former family home and acquired and renovated their holiday home at Town D.
The husband clearly laboured hard in the practical aspects of the business, which I accept was onerous and physically debilitating work. I also accept the wife was essential, in an administrative sense, to the success of the business. There is no compelling evidence to indicate that the wife’s administration, in any way, sabotaged the business or that she has salted away its profits for own use.
In addition, the evidence indicates that Ms Roswell was an exemplary parent and homemaker, roles she has continued post-separation, without assistance from Mr Roswell. I accept that it has been challenging for Ms Roswell to parent Z and the twins, given their respective psychological and health needs, given her limited income and the absence of child support. Ms Roswell has also maintained the parties’ asset base, as best she can, in the post-separation period, in very difficult circumstances, again without the support of Mr Roswell.
Although each party brought assets into the marriage, the evidence indicates that Ms Roswell brought in a significantly greater amount, in dollar terms, in the form of her home, which also provided accommodation for Mr Roswell, in the early years of their relationship. Thereafter the parties embarked on a shared strategic planning of acquiring, renovating and renting properties, in which each played an integral role.
The structure chosen to do this and operate their business arrived through a process of professional advice, in which both were involved. I can find nothing illegitimate in what was done. Certainly, in my view, there is nothing to indicate that the wife tricked the husband in any way.
In all these circumstances, particularly in respect of issues to do with post separation contributions, over the last three years, I accept that the assessment of contributions favours the wife in the proportions proposed by Mr Dillon.
STEP THREE – THE PROSPECTIVE NEEDS OF THE PARTIES
I am now required to consider the various matters set out in section 75(2) of the Act and in particular to consider whether any further adjustment should be made in favour of either party. The section 75(2) factors are mainly, but not only, prospective in nature. Specifically, they are as follows:
(a) the age and state of health of each of the parties;
(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;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
(f)subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under –
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(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 adequate income;
(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; and
(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;
(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;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(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; and
(o)any other fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties.
Paragraph (a) – The husband is aged 58 years. The wife is aged 51 years. The husband has not provided a great deal of expert medical evidence regarding his current state of health. His personal view is that his health is poor due to his medical condition, which is the result of a lifetime of physical activity.
Mr Roswell has provided some medical records from his general medical practitioner, which includes a list of his current medication and post-medical history, which confirms a condition in 1991 and 2000 and some psychological issues. He has also suffered other health issues and chronic pain. In these circumstances, I accept that his health is far from ideal.
He was referred to a surgeon in respect of his condition in mid-2021 to whom he described pain resulting in problems with walking. X-rays indicated moderate to advanced issues. However, it would appear to be the case that Mr Roswell has not followed up with treatment due to lack of private health insurance.[70]
[70] See Exhibit C.
Ms Roswell recently had an injury but seems to have recovered well. There is no evidence to indicate that her health is currently compromised. Certainly, she presented in court as a fit and focussed person.
Paragraph (b) – The matters which fall for consideration under this heading are at the heart of the controversy between the parties. It is Ms Roswell’s position that Mr Roswell has both over-stated his medical difficulties and also failed to provide any sufficiently compelling evidence to support his assertion that he is currently unable to work and will remain so for the indefinite future.
In contrast, Mr Roswell has deposed that he has not worked since late 2020 due to his health problems, particularly in respect of his pain. The wife does not accept that the husband has not worked in this period. It is her position that he has done jobs for neighbours in Town D and has engaged in his hitherto active lifestyle involving outdoor recreation.
She has provided social media posting to support her assertions. She also believes that Mr Roswell has purchased material which indicate that he is working. She has also obtained video footage, from a private investigator showing Mr Roswell working in his yard without apparent discomfort.[71] None of these matters were specifically put to Mr Roswell.
[71] See Exhibits MR-46 – 48 of the wife’s trial affidavit filed 13 February 2023.
The ill-will and mistrust between the parties was palpable during the hearing. In these circumstances, I am not in a position to dismiss Ms Roswell’s assertion that Mr Roswell has withdrawn from the workforce for tactical reasons relating to these proceedings or out of malice for her. As I indicated at the outset of these reasons, this is a case with a very significant emotional quotient, which is not necessarily conducive to the parties’ concerned acting in a manner which is consistent with their longer term interests.
Ms Roswell characterises Mr Roswell in the following terms:
The husband also has less non-physical, high paying work options available to him including as a […] supervisor, trade trainer and [in another profession].[72]
This may be an overstatement. However, on balance, it seems to me to be improbable that the entirety of Mr Roswell’s capacity to earn an income entirely disappeared in the months following separation during which period he is likely to be at his most emotionally labile.
[72] See wife’s trial affidavit filed 13 February 2023 at [175].
I would anticipate that, with the conclusion of these proceedings, it is more likely than not, Mr Roswell will be able to pick himself up and return to some form of paid endeavour. I accept the wife’s characterisation of him as a person of quite diverse skills, who is to be regarded as being attractive to potential employers, particularly in a supervisory role or on a part-time basis.
Ms Roswell presented as a resourceful, intelligent and focussed individual. She has prior experience and qualifications as a supervisor. At present, she is studying in another field. I accept that she has made slow progress with her course because of the demands of the children and these proceedings.
As with Mr Roswell, I anticipate that when these proceedings are concluded, she will be able to focus on gaining some form of employment for herself, perhaps on a part-time basis, whilst continuing with her studies. However, given her parenting responsibilities, she will have less flexibility than the husband.
It has been said, by the Full Court, that the most valuable asset a party can take out of a marriage is a substantial, reliable income-earning capacity.[73] In the current matter, I do not consider that either party can be said to axiomatically have such a capacity but nor is it the case either is not without the innate skills which enabled them to acquire property to a significant value. Each struck me as having something of an entrepreneurial bent. Certainly they each have a capacity to be self-reliant.
[73] See Clauson & Clauson (1995) 18 Fam LR 693, 710 (Barblett DCJ, Fogarty and Mushin JJ).
Paragraph (c) – It is Ms Roswell’s contention that the factors arising under this consideration greatly favour her. I agree. She has been parenting the parties’ three children, currently aged 16 and 14 since separation in early 2020. Mr Roswell pays her no child support. He had filed only one statement of his financial affairs, when he commenced the proceedings in November of 2020
This document indicates his income to be nil. He has not applied for social security. As a consequence, it would appear to be the case that Centrelink are unable to deduct even the statutory minimum of child support from any benefits to which he is entitled. In these circumstances, the burden of providing financial support for X, Y and Z falls exclusively upon Ms Roswell.
Ms Roswell has filed numerous statements of her financial circumstances. The most recent of which indicates that Ms Roswell estimates the cost of supporting the three children to be in the vicinity of $1,500.00 per week.
Regrettably, it is my view, that Mr Roswell has an ulterior motive for keeping his financial circumstances shrouded in secrecy, whilst he has mounted a campaign, in these proceedings, against Ms Roswell for allegedly doing the same. In addition, the evidence indicates that he has abrogated his financial responsibility for the children.
Until the parties separated, it would appear to be the case that the children enjoyed a well‑resourced lifestyle. They each attended private schools. To her credit, Ms Roswell has been able to ensure that this has continued, as best she can, in extremely challenging circumstances.
On 2 February 2021, Ms Roswell formally wrote to Mr Roswell’s solicitor detailing the extent of the children’s educational expenses, which involved music lessons for Y and X; laptops for X and Z; and shoes and textbooks for all three; together with school fees.[74] In these circumstances, Ms Roswell had little option other than to utilise what monies were available to her, which in turn has implications for her entitlement to be allocated a school card to defray some of the children’s school fees.
[74] See Exhibit MR-26 to wife’s trial affidavit filed 13 February 2023.
In addition, as previously indicated, X in particular has been seriously unwell and required hospitalisation. I accept that Y has also experienced some psychological difficulties. In these extraordinarily challenging circumstances, all three children have become estranged from their father, which has resulted in the entire responsibility of parenting them falling on Ms Roswell alone. This situation is not likely to change in the foreseeable future.
As a consequence, it will be the wife who will be charged with liaising with school authorities about the children’s progress at school; arranging and attending medical appointments; doing the shopping and cooking. If any of the children are ill, it will be she who will have to stay home to tend to their needs. These responsibilities, relating to a child’s health, education, socialisation and general well-being have been described as myriad.[75]
[75] See Collins & Collins (1990) FLC 92-149 at 78,043-8.
I appreciate that the children concerned in this case are teenagers and so capable of a significant degree of autonomy and self-care. However, inevitably, these responsibilities will impact on the number of hours of paid work, per week, the wife can take on. They may affect her prospect of promotion. Such responsibilities must also have implications for the flexibility of her employment arrangements and so must impact upon her financial bottom-line.
Although I have characterised Ms Roswell as a resourceful and motivated person, with the sort of skills likely to be attractive to an employer and whilst noting that she is in her early fifties, her responsibilities in regards to providing care for the three children must have implications for her on-going financial security. This is a factor which strongly favours Ms Roswell.
Paragraphs (d) & (e) – These are not relevant considerations in the case.
Paragraphs (f) - Each party is some years from permanent retirement from the workforce. As such, in theoretical terms, both have some time in which to make financial provision for their old age. On any view, neither is well prepared in this regard in respect of their current levels of superannuation. However, the reality is that they will each leave these proceedings comparatively well-resourced in respect of real estate, which seems to have been their shared plan for retirement, prior to separation.
In these circumstances, the wife’s proposal that each party retain their current holdings of superannuation appears to me to be an attractive one.
Paragraph (g) – The end of the marriage has been a financial disaster for each of the parties. This consideration recognises that one of the inevitable consequences of the end of the majority of marriages is a drop in living standards for the individuals concerned. This is particularly so if the marriage concerned has been a lengthy one and involves issues regarding the accumulation of property intended to provide for a couple in retirement, which is the case here.
It is trite, but true nonetheless, that two households cannot live as economically efficiently as one. What is important is that any drop in living standards should not be borne disproportionately by one party more than the other.
In these circumstances, I can appreciate why Mr Roswell would want to retain the Town D property, which he can rent out for holiday makers, thus providing him with a regular income stream. In addition, I can understand why Ms Roswell would want to retain the former family home, as a source of stability and continuity for her and the children.
Paragraphs (h) (j) (k) & (l) – The considerations arising under these paragraphs relate, in general terms to maintenance and the impediments to a party being able to re-train if he or she has familial responsibilities. I have considered these factors already to some degree. Ms Roswell wishes to re-train in a new profession. This will involve time and commitment on her part and the incurring of some level of debt in the form of HECS.
In the longer term, such a qualification will provide her with some degree of protection from financial uncertainty. On the other hand, although he is currently electing not to use his trade qualifications, Mr Roswell does have qualifications to fall back on. These are considerations which favour Ms Roswell.
Paragraphs (ha) (m) (naa) (p) & (q) – These paragraphs are not relevant to this particular case.
Paragraph (n) – The parties have already gone through a process of rationalisation of their property portfolio and related debt with the sale of K Street, Suburb L and 2 E Street, leaving them largely debt free, apart from likely CGT to be levied on any capital profit, which will attach to each of their incomes for the relevant tax year.
Mr Roswell wishes to retain two of the three remaining properties in the portfolio, which will be debt free. Ms Roswell wishes to retain the former family home together with the parties’ liquid assets resulting from the sale of their other properties. Thus she, but not necessarily Mr Roswell, will have the protection of some form of nest egg to protect her from unforeseen financial exigencies.
Paragraph (na) – As previously indicated, the wife’s responsibility to parent the parties’ children, who are still at school, will place a heavy financial burden on her shoulders. She, of course, is not legally subject to this burden alone, as Mr Roswell, regardless of his degree of interaction with them, is still legally obligated to provide financial support for his children in accordance with his financial means through an assessment of child support.
One of the striking but sad features of this case is the acrimony between the parties, which stems from the very difficult circumstances surrounding their separation. Mr Roswell is not likely to be inclined to do anything to assist Ms Roswell in future. As previously indicated, his only statement of financial circumstances indicates that he pays no child support.
Accordingly the evidence indicates that Mr Roswell is not inclined to be reliable in respect of his payment of child support and is likely, if at all possible, to conduct his affairs in such a way as to avoid his liability in future. I accept that there is a real likelihood that Mr Roswell will elect to work under the radar, if he does decide to return to work and will chose not be a person employed on a PAYG basis, with an employer paying the recurrent tax as it is incurred on income, which makes such employment readily amenable to be assessed for child support.
In Clauson & Clauson[76] the Full Court said as follows:
The weight to be attached to a child support assessment will vary with the circumstances of each case, including the amount of the assessment, the financial circumstances of the parties, the needs of the children, whether the assessment is being paid regularly, and whether it is likely that it will continue to be paid at a regular and adequate rate in the future.
[76] See Clauson & Clauson (1995) 18 Fam LR 693 at 710.
In this case, there is currently no child support assessment; if there was one, there is uncertainty that it would be honoured; and finally, any such assessment is unlikely to contribute significantly to the satisfaction of the children’s on-going financial needs. Accordingly, this is a factor which greatly favours Ms Roswell.
Paragraph (o) – In Ferguson & Ferguson[77] the Full Court of the Family Court held that section 75(2)(o) was to be read ejusdem generis with the other matters listed in the section 75(2) which enabled the court to bring into account conduct which has an economic significance in the parties’ dealing with each other or the property in dispute.
[77] See Ferguson & Ferguson (1978) FLC 90-500 at 77,607.
These proceedings have been significantly protracted and highly controversial. As a consequence each of the parties concerned has incurred very significant legal costs, the full extent of which remain inchoate. What is clear is that they have been largely sourced from the parties’ joint funds.
In Ms Roswell’s case, she would characterise some of the monies used to pay her legal fees as being loans - $10,000.00 to Mr S; $10,000.00 to Z; and approximately $45,000.00 in effect borrowed from herself in the form of the money gifted to her by Ms M. For reasons already provided, I do not consider that it would be just and equitable to regard these as joint debts given Mr Roswell has also incurred significant legal fees.
In addition, although it is likely to be the case that Ms Roswell has utilised more of the parties’ joint funds, post separation, chiefly because she was in control of the assets controlled by the family trust, it is clear to me that she had by far the greater level of financial need. In addition, her efforts have resulted in the preservation of assets, which has benefitted Mr Roswell.
More significantly, I am satisfied that the manner in which Mr Roswell elected to approach the proceedings has led to their marked protraction. This in turn has resulted in Ms Roswell incurring more expense. In my assessment, in general terms, these are factors which must be taken into account as favouring Ms Roswell.
Paragraphs (p) & (q) – These are not relevant considerations in the present matter.
SUMMARY OF SECTION 75(2) FACTORS
In my assessment, in their totality, the cumulative effect of the various factors to be considered arising under section 75(2) favour the wife to a significant degree. In summary, she is responsible for the care of the parties’ three children, which she has done and will most probably continue to do without any financial assistance from the husband.
I accept that as a person in his late fifties, who has worked hard in physically demanding roles for most of his working life, Mr Roswell has an entitlement to start winding down from being a tradesperson. The evidence, limited though it is, indicates that he has problems with his joints in particular and climbing ladders and kneeling is likely to be physically challenging for him.
However, I do not accept, having considered other aspects of the evidence, that Mr Roswell’s capacity to provide financial support for himself through some form of paid work abruptly evaporated when the parties separated. I accept that the separation was difficult for him, as it was for Ms Roswell and the children.
However, as indicated above, with the end of these vitriolic proceedings, it seems more likely than not that each of the parties will be able to re-group financially, which will involve some form of employment for each of them. Notwithstanding the age discrepancy between them, I consider the husband has a greater potential, in this regard than the wife, by dint of his considerable vocational experience.
In theoretical terms, I would allocate her a further 7.5% of the parties’ non-superannuation assets on the assessment of section 75(2) factors, which at the end of the third phase leads to a distribution of 65%/35% favouring Ms Roswell, which is the split each party formally advocates in their recently amended applications to the court.
Given the modest levels of superannuation held by each of the parties and their approximate equality in value, I do not propose to derogate from the position adopted by the wife that each should retain their respective superannuation.
CONCLUSIONS
I am satisfied that in all the circumstances of this case, it is just and equitable to make orders pursuant to section 79(2) of the Act. The marriage between the parties has clearly ended and the financial relationship between them must be brought to an end. The next issue is what form those orders should take and where individual items of property should lie and to determine if items of property, particularly the Town D holiday home needs to be realised.
This is the most difficult aspect of the property aspect of the proceedings. It is the point at which abstract notions of justice and equity must become concrete. As Coleman J had it in Steinbrenner, it is all very well to talk in percentages but what is important to the parties themselves is what that means in dollars and cents. It is also incumbent for the court to scrutinise the outcome through the demanding lens of justice and equity. Essentially, it this a fair outcome, given the evidence in the case.
The sorts of issues to be considered in determining how to allocate actual assets and cash, in proceedings such as these, was considered by Moore J in L & L,[78] her Honour considered that the relevant factors were as follows:
·the purchase price of appropriate accommodation and re-housing costs for both parties, as appropriate;
·the need for a financial buffer for ordinary exigencies of independent living;
·the current level of the parties’ superannuation;
·the probability of the parties being able to acquire appropriate superannuation benefits from their own future income; and
·the parties’ respective earning capacities, level of financial backing and so their ability to borrow and what conditions or rates are likely to attach to such borrowings.
[78] See L & L [2003] FamCA 40.
As I have calculated the parties’ net assets ($2,288,788.83) 65% is represented by the sum of $1,487,712.74 and 35% by the sum of $801,076.09.
If the wife retains the following assets and remains responsible for discharging the following liabilities, her net position is as follows:
Family home $910,000.00
Proceeds of sale $264,640.83
Motor car and other chattels $124,000.00
Ms M money $ 64,616.00
Total $1,363,256.83
Less 65% of total joint liabilities $ 20,129.20
Current asset position $1,343,127.63
On the other hand, the husband’s current position is as follows:
Town D $445,000.00
1 E Street $390,000.00
Motor car, recreational vehicle etc. $121,500.00
Total $956,500.00
Less 35% of total joint liabilities $ 10,838.80
Current asset position $945,661.20
Accordingly, to bring about the outcome I have envisaged, after following the stepped process engaged by Part VIII of the Act, it will be necessary for Mr Roswell to pay Ms Roswell a sum just short $145,000.00.
How Mr Roswell would realise such a sum was not the subject of any detailed examination during the trial other than he made a passing comment that one of his relatives was both well‑resourced financially and inclined to assist him. Whether this is so or not is impossible for me to determine.
However, more significantly, the outcome, which I propose is significantly in line with that proposed by Mr Roswell himself, in his further amended initiating application filed on 22 February 2023, other than the amount, which he proposed to pay Ms Roswell, in the context of him retaining both 1 E Street and Town D was $102,000.00.
This amended application is both recent and prepared in anticipation of the trial. It was also prepared by Mr Roswell’s former solicitor, who has had a significant involvement in the case. In these circumstances, I have no reason to think anything other than that it represented his considered position as to what was a just and equitable outcome of the proceedings from his perspective.
This outcome will leave Ms Roswell with the security of the unencumbered former family home in which to live with the parties’ children. It will also leave her with a significant amount of cash to support herself and the children, whilst they transition through the last years of secondary education to either the paid workforce or some form of vocational or tertiary study and whilst she herself completes her diploma course.
From Mr Roswell’s perspective, he too will have the security of a roof over his head and potentially a regular income stream from Town D. However, if he cannot raise the required sum to pay Ms Roswell within 60 days of the date of these orders the property will have to be sold so that the financial relationship, between the parties, can be brought to an end. I will also make the orders required to wind up N Pty Ltd and vest the parties’ family trust and transfer the assets which it controls to each of them, as they have agreed.
I will direct that, the husband pay the wife the settlement sum of $144,585.11. I will also direct that the wife be responsible for discharging the joint liabilities of the parties, this will require the husband to forward his portion of the joint debts to the wife in addition to the settlement sum. In these circumstances, the total sum of monies to be forwarded to the wife is totalled to $155,423.91.
For the reasons given above, I have not directly accounted for CGT due in respect of the proceeds of sale of K Street, Suburb L. The wife retains the proceeds but, when the property was sold, given each was a trustee and beneficiary of the family trust, in my view, each should be liable for the CGT arising. I assume the ATO will approach the issue in this way but I will direct that the parties be equally responsible for any CGT arising from its sale and similarly in respect of Town D, if its sale becomes necessary.
On balance, I consider the outcome, which I propose, to be a just and equitable one in all the circumstances. For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding three hundred and three (303) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 23 May 2023
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