Scaletta & Scaletta
[2023] FedCFamC2F 1290
•12 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Scaletta & Scaletta [2023] FedCFamC2F 1290
File number(s): SYC 6504 of 2021 Judgment of: JUDGE ELDERSHAW Date of judgment: 12 October 2023 Catchwords: FAMILY LAW – PROPERTY – FINAL ORDERS – Where initial contributions favour the husband – Where the wife made contributions to the home and husband’s business – Where the husband’s financial disclosure is inadequate – Consideration of Kennon & Kennon – Consideration of Robb & Robb Legislation: Family Law Act 1975 (Cth) ss 75, 79, 121 Cases cited: Benson & Drury (2020) FLC 93-998; [2020] FamCAFC 303
Black & Kellner (1992) FLC 92-287
In the Marriage of Kowaliw (1981) FLC 91-092
In the Marriage of Weir (1993) FLC 92-338
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Kennon & Kennon (1997) FLC 92-757
Martell & Martell (2023) 66 Fam LR 650; [2023] FedCFamC1A 71
Perrin & Perrin (No 2) [2018] FamCAFC 122
Pierce & Pierce (1998) FLC 92-844; [1998] FamCA 74
Robb & Robb (1995) FLC 92- 555
Stanford v Stanford (2012) 247 CLR 108
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Willis & Willis [2007] FamCA 819
Division: Division 2 Family Law Number of paragraphs: 178 Date of hearing: 5-7 September 2023 Place: Sydney Counsel for the Applicant: Mr Jackson Solicitor for the Applicant: Marano Family Lawyers Counsel for the Respondent: Mr Barham Solicitor for the Respondent: V L Macri Lawyers ORDERS
SYC 6504 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SCALETTA
Applicant
AND: MR SCALETTA
Respondent
ORDER MADE BY:
JUDGE ELDERSHAW
DATE OF ORDER:
12 OCTOBER 2023
ON A FINAL BASIS, THE COURT ORDERS THAT:
1.All prior Orders in these proceedings be discharged.
2.By no later than 4.00 pm on 8 December 2023, the wife shall do all acts and things to transfer the property known and situated at B Street, Suburb C in the State of New South Wales, being the whole of the land in Folio Identifier … (“Suburb C property”) to the husband.
3.Simultaneous with Order 2, the husband shall:
(a)Do all acts and things to discharge any existing loan account secured by the Suburb C property and refinance such loans in his own name; and
(b)Pay the wife’s solicitor’s trust account the sum of $1,811,187.
4.If the husband fails to comply with Order 2 herein, the wife may do all acts and things to enter into an agency agreement with a registered real estate agent to sell the Suburb C property for the best price reasonably obtainable.
5.The selection of a real estate agent and conveyancer, and all matters related to the conduct of the sale shall be as agreed between the parties but failing agreement, the provisions of Order 7 herein shall apply to the extent of any disagreement.
6.Upon completion of the sale of the Suburb C property, the sale proceeds shall be distributed in the following manner and priority:
(a)In payment of such sum as is required to discharge any liability secured by the property;
(b)In payment of the agent’s fees and commissions and costs of sale;
(c)In payment of any adjustments as to council and/or water rates; and
(d)As to the balance:
(i)58.3 per cent to the wife; and
(ii)41.7 per cent to the husband.
7.If the parties cannot agree on the selection of a real estate agent and conveyancer or any other matter related to the conduct of the sale of the Suburb C property, the following shall apply to the extent of any disagreement:
(a)The parties shall appoint a real estate agent as agreed, but failing agreement, the wife shall nominate three real estate agents and the husband shall, within seven days of receipt of the nominations, select one and such selection shall bind the parties (“the Agent”). If the husband fails to make a nomination in the prescribed time, the wife shall make the nomination from one of the three named agents and that nomination shall bind the parties;
(b)The parties shall appoint a solicitor to act on the sale as agreed, but failing agreement, the wife shall nominate three suitably qualified solicitors or conveyancers to the husband and the husband shall make a selection within seven days of receiving the nominations and such nomination shall bind the parties. If the husband fails to make a nomination in the prescribed time, the wife shall make the nomination and that nomination shall bind the parties;
(c)Except as otherwise agreed in writing, the property is to be sold “as is”;
(d)If the parties cannot agree to the terms of the Contract of Sale, the completion period shall be 42 days after exchange;
(e)If the parties cannot agree on the listing price or price guide, the guide shall be as recommended by the Agent;
(f)The method of sale, whether by private treaty, public auction or otherwise, shall be as recommended by the Agent;
(g)The reserve price for any auction shall be as recommended by the agent or $3,600,000 whichever is the lower;
(h)If the property is passed in at auction, the parties may negotiate with the highest bidder and, provided that the bidder agrees to pay a sum which is not more than 5 per cent below the reserve, the parties shall sell the property for that price;
(i)If the property remains unsold seven days after an auction, the parties will do all acts and things and sign all documents necessary to re-list the property for sale by private treaty; and
(j)The parties shall co-operate in every way with the Agent including making the key available to the agent, signing all documents requested by the Agent to sell the property, executing a Contract for Sale in the form prepared by the solicitors having the conduct of the sale at the sale price, allowing inspections of the property at all reasonable times as requested by the Agent and not doing or saying anything to hinder or prevent a sale being effected.
8.Pending the completion of Order 3(b) or Order 6(d)(i) herein:
(a)The husband shall pay as and when they fall due all council rates, water rates and home building insurance for the Suburb C property;
(b)The husband shall have exclusive occupation of the Suburb C property; and
(c)Neither party may further encumber the Suburb C property other than with the written consent of the other party.
Joint Property
9.By no later than 4.00 pm on 10 November 2023, the parties shall do all acts and things to close the D Bank Account in the joint names of the parties ending …44 (“Joint Account”) with the whole of the balance to be paid to the wife.
10.By this Order, the wife may immediately withdraw or transfer the whole of the balance of the Joint Account without the consent of the husband.
11.By no later than 4.00 pm on 8 December 2023, the husband shall do all acts and things to:
(a)Transfer the property known and situated in Country E to the wife; and
(b)Close any bank account in the parties’ joint names in Country E with the whole of the balance to be paid to the wife.
12.By this Order, the wife may immediately withdraw or transfer the whole of the balance of any Country E Account without the consent of the husband.
General Orders
13.Except as otherwise provided by these Orders, the wife shall retain, to the exclusion of the husband, all her shareholdings, bank accounts, superannuation entitlements, vehicles, personal effects and household contents of which she is the account holder, named member or interest holder, registered owner or is otherwise in possession.
14.Except as otherwise provided by these Orders, the husband shall retain, to the exclusion of the wife, all his corporate interests and shareholdings including in F Pty Ltd, G Pty Ltd, H Pty Ltd (In liquidation), J Pty Ltd, bank accounts, superannuation entitlements, vehicles, personal effects and household contents of which he is the account holder, named member or interest holder, registered owner or is otherwise in possession.
15.Except as otherwise provided by these Orders, the wife shall be solely liable for any credit card, taxation or other debt howsoever incurred or arising and standing in her name at the time of the making of these Orders AND this Order may be relied on by the husband as a defence against any claim for the whole or any part of the said debt by a third party creditor, and against any claim against him for contribution or apportionment of such debt.
16.Except as otherwise provided by these Orders, the husband whether in his personal capacity or as a current or former director of F Pty Ltd, G Pty Ltd, H Pty Ltd (In liquidation) and J Pty Ltd shall be solely liable for any credit card, taxation or other debt howsoever incurred or arising and standing in her name at the time of the making of these Orders AND this Order may be relied on by the wife as a defence against any claim for the whole or any part of the said debt by a third party creditor, and against any claim against her for contribution or apportionment of such debt.
17.Pursuant to s 121 of the Family Law Act 1975 (Cth) (“the Act”), each party may provide a copy of these Orders to:
(a)D Bank;
(b)Any other Australian or overseas bank or lending facility or brokerage;
(c)New South Wales Land Registry Services;
(d)Any agency of Country E for the purpose of giving effect to Orders 11 and 12 herein;
(e)Any real estate agent or solicitor or conveyancer acting on the sale of the Suburb C property;
(f)Any overseas attorney or suitably qualified person acting on the transfer of the Country E property; and
(g)Any accountant or tax agent retained by a party to administer that party’s financial and/or taxation affairs.
18.Each party must do all acts and things and sign all documents as may be necessary to give effect to these Orders.
19.In the event either party refuses or neglects to execute any deed or instrument within 14 days of being requested to do so, then a Registrar of the Federal Circuit and Family Court of Australia be appointed pursuant to s 106A of the Act to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation of the deed or instrument.
Procedural Orders
20.All outstanding applications are otherwise dismissed and the proceedings are removed from the list of matters awaiting finalisation.
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 ELDERSHAW:
INTRODUCTION
These proceedings concern financial proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The Applicant wife is Ms Scaletta born in 1980 (“the wife”). The Respondent husband is Mr Scaletta born in 1952 (“the husband”).
The parties commenced their relationship in 2010, were married in 2011 and separated on 22 November 2020. There are no children of the relationship.
These proceedings were commenced by the wife’s Initiating Application filed 6 September 2021 to which the husband joined issue by his Response filed 28 January 2022.
Documents
The wife relies on her Initiating Application filed 6 September 2021, her affidavit and Financial Statement all filed 5 June 2023, her Case Outline Document filed 21 August 2023 and Exhibits W-1 to W-9.
The husband relies on his Response filed 28 January 2022, his affidavit, Financial Statement and Undertaking as to Disclosure all filed 1 September 2023, his Case Outline Document filed 4 September 2023 and Exhibits H-2 to H-5.
The Court was assisted by the Single Expert report of Mr K filed 23 August 2023 as to the value of real property at L Street, Suburb M and the former matrimonial home at B Street, Suburb C.
Applications
Based on counsel for the wife’s closing submissions, the wife seeks a distribution of 42.5 per cent of the net assets in her favour. The wife proposes that the Suburb C property be sold, from which she would retain such funds as to give effect to this distribution.
The husband seeks to retain 85 per cent of the net assets. He seeks that the wife transfer the Suburb C property to him.
Of the jointly owned property, there is no dispute that the wife will retain the Country E properties, joint bank accounts and assets in her name.
LAY WITNESSES
Both parties gave evidence in the proceedings. I observed them closely and listened carefully to their evidence.
The husband was aged 71 years at the time of the hearing. The husband deposes that, due to his declining health and age, his memory is not as good at it once was. The husband has difficulty reading despite wearing glasses. He is hard of hearing but does not have a hearing aid. The husband said he does not read documents and needs to have documents read to him.
At paragraph 97 of his affidavit, the husband deposes:
The preparation, execution and filing of this affidavit, my financial statement, my balance sheet and other documents has been delayed mainly by my inability, directly relating to my deteriorating health, to provide my current lawyers and barrister with information and documents they have requested to finalise the documents. I have spent the majority of the last 4 days at my Lawyers office providing instructions and obtaining information to ensure that the contents of this affidavit, my financial statement and the balance sheet are as accurate as possible. The whole process has left me completely exhausted and at times I would fall asleep sitting in the chair in my Lawyers office. As I am not computer literate and do not have at home, or if I do I can not find, any of the source documents required, my Lawyers have had to contact other parties and/or undertake searches to ensure the financial and factual information I have set out in this affidavit is accurate. By way of example I attended upon [D Bank] which is located one block from my Lawyers office. I walked to and from the branch with the assistance of my cane. The walk to and from the branch took me approximately 40 minutes in total whereas a person in good health could walk to and from the branch from my Lawyers office in 10 minutes. I lost my cane prior to arriving at my Solicitors office. A secretarial member of staff drove me to the entry of [a shopping centre] and I slowly walked back. Both those simple tasks of attending at the [D Bank] branch left me completely exhausted. In addition, my eyesight has deteriorated to the point that even with reading glasses I have difficulty in reading any documents.
At the start of his oral evidence, the husband told the Court that he trained as a professional and has been very good at his work throughout his life. It is common ground that the husband had a stroke in 2014, although the particulars of the effect of the stroke do not form part of the evidence. It was obvious that the husband feels frustrated and humiliated by his cognitive and physical decline.
The Court clarified with counsel for the husband on two occasions during the hearing whether a litigation guardian was required. Counsel, in the presence of his instructing solicitor, assured the Court that the husband could give instructions and a guardian was not required.
Aspects of the husband’s oral evidence were confusing and suggested that he may not have understood questions. For example, the husband was shown his Financial Statement filed in January 2022. He did not remember swearing the document and asked, “Can someone explain?” He was unable to identify the Financial Statement as his own. When asked about an estimated liability in 2010 of $695,000, to which he had deposed, the husband said, “I don’t know.” When taken to paragraph 11 of his affidavit in which he deposed to meeting his second wife in 1999, he said “I don’t know.” When taken to his current and previous Financial Statements, which described different superannuation funds, the husband said, “I don’t know.” At paragraph 57 of his affidavit, the husband deposes that, in late 2014, the Australian Taxation Office (“ATO”) audited his “business.” In his oral evidence, the husband did not know which business was audited or the outcome of the audit.
At one point during cross-examination, the husband became upset and refused to answer questions posed by counsel for the wife because he could not hear what was being said. I harbour some doubt as to whether the husband’s many answers that he “did not know” were due to poor memory, or not hearing and so deflecting the question, or because he otherwise did not know. I make no criticism of the husband. He was obviously frail and found the process of giving evidence difficult. I did not form the view that he was evasive. That said, I found his evidence difficult, and I have done the best I can with it.
I was not so troubled by the wife’s evidence.
In the foregoing, I do not place weight on the husband’s evidence where it is not corroborated or otherwise states an uncontroversial fact. Where there is factual dispute that requires determination and there is no other corroboration, or rational process to assist me, I prefer the wife’s evidence.
CORPORATE ENTITIES
G Pty Ltd
According to a current ASIC search, in 1970, G Pty Ltd was established. That document records that the husband was appointed as a director in 2019. There is no evidence as to the historic directorship. The search records that the current share structure was established in early 2018. That share structure comprise A to E class shares, of which the husband owns all A and B Class shares and 80 of 100 C, D, and E class shares. The husband’s children are the other C, D and E class shareholders. There is no evidence as to the voting or other rights of each class of shares.
H Pty Ltd (in liquidation)
H Pty Ltd was established prior to the parties’ relationship and the husband was its sole director and shareholder. H Pty Ltd is in, or has been, liquidated. According to an undated Deed of Settlement and Release between H Pty Ltd (in liquidation), the Liquidator of H Pty Ltd, the husband, G Pty Ltd and F Pty Ltd:
(a)In mid-2018, a Liquidator was first appointed to H Pty Ltd;
(b)In mid-2021, the Liquidator filed a Statement of Claim in the District Court seeking relief against the husband and G Pty Ltd for, inter alia, insolvent trading and uncommercial transactions;
(c)In mid-2022, the Liquidator sent a letter to F Pty Ltd asking F Pty Ltd and the husband to provide an explanation regarding certain payments towards F Pty Ltd’s mortgage by H Pty Ltd;
(d)The husband and G Pty Ltd denied that the Liquidator was entitled to the relief sought;
(e)F Pty Ltd denies any obligation to reimburse H Pty Ltd in respect of the mortgage payments; and
(f)The parties to the Deed settled the dispute on a without admissions basis, with the settlement sum of $135,000.
The finalisation of the District Court proceedings occurred in late 2022, noting that the husband’s solicitor’s invoice dated 28 October 2022 (within Exhibit H-3) refers to attending on the execution of the Deed on the same date. The husband’s solicitors charged a final invoice of $7,469.
F Pty Ltd
According to a current ASIC search, in 2005, F Pty Ltd was established. That document records that the husband was appointed a director in 2007. The husband holds all ordinary shares, and five of 25 B Class shares. The current share structure was established by 2007. There is no evidence as to the voting or other rights of each class of shares.
At all relevant times, F Pty Ltd has owned commercial premises at Suburb M.
Suburb M was operated as a business. It is unclear whether the operating entity was G Pty Ltd or H Pty Ltd and nothing turns on this detail.
BACKGROUND
The wife was born in 1980. The husband was born in 1952.
In about 1973, the husband trained as a professional. The husband married his first wife in 1975, with whom he had three children. The husband and his first wife were married for about 16 years. During that time, the husband acquired the Suburb C property on which he constructed a home.
In about 1999, the husband formed a de facto relationship with his second partner, Ms N, with whom he had a son, Mr O born in 2000.
Initial contributions
The wife deposes that she arrived in Australia from Country E in 2010 with about AUD $2,500 of savings. The husband says that the wife arrived in early 2010.
There is no dispute that, in 2010, the husband owned the Suburb C property; a 50 per cent interest in P Street, Suburb Q with his sister; F Pty Ltd; and H Pty Ltd.
In 2010, the husband owned R Street, Town S. He deposes that he purchased the Town S property “in 2004 for the sum of $1,325,000 purchased with the sale of [T Street, Suburb U] …”.
The husband deposes that, in 2010, he was a director and 50 per cent shareholder in V Pty Ltd, which “had owned” Suburb U. The wife deposes that Suburb U was sold in 2015. Both parties say that Suburb U was sold for about $2 million. The sale of Suburb U is addressed at paragraph 80 to 82 below.
The wife deposes that the husband owned a property at W Street, Suburb U with his sister and that she sold this in 2013 or 2014. I infer that the husband owned W Street at the time of cohabitation. The husband says that he applied his share of the sale proceeds in payment of his second wife in their family law matter. Nothing turns on the W Street Property.
Mid-2010
The wife deposes that from mid-2010, she worked at the business. This included encoding invoices and bank statements for H Pty Ltd, F Pty Ltd, G Pty Ltd, serving customers, sweeping and mopping the floor, and clearing and packing stock.
Counsel for the husband put to the wife that she worked at a local company for three months from early 2010, and then started working at the business. The wife deposes that, from mid‑2010, she worked from 5.00am to midday at the business and then from shortly after midday to 7.00pm. She says she ceased working at the business in 2014 after the husband had a stroke. The husband deposes that the wife worked from 10.00 am to 5.00 pm five days per week at the business although also refers to her working from 7.00 am to 5.00pm. The husband conceded in his oral evidence that the wife did a wonderful job managing the business. On any view, the wife worked full-time from the time she arrived in Australia and applied her energy and effort to the matrimonial enterprise.
Neither of the parties received a formal wage or salary from the business. Both accessed cash from the till.
The parties married in 2011.
The wife gave unchallenged evidence that the husband became ill in 2011 and required hospitalisation. She visited him in hospital, took him food and washed his clothes.
The parties spent some weekends at the Town S property. The husband deposes that the parties both attended to cleaning and maintenance of the Town S property. In her oral evidence, the wife resisted the proposition that the parties holidayed at Town S, saying “I don’t call it a break. We went to clean. We didn’t have holiday time as working in the business.” I accept that the principal reason for the parties’ attendance at the Town S property was to clean and maintain it. Such is consistent with the long hours they both say they worked at the business, and the wife’s evidence which I consider to be reliable.
March 2014: Transfer of Suburb C Property to Wife
In March 2014, the husband transferred the Suburb C property to the wife. The existing loan was refinanced. The Suburb C property secured the new loan. The wife deposes that the new loan was in her name whereas the husband deposes that the loan was in joint names. Nothing turns on this. In March 2014, X Company provided a home loan in the sum of $1,210,000.
There is no dispute that the Suburb C loan was repaid from rental income from Suburb Q and earnings from the business.
The husband suffered a stroke in 2014, after which the wife cared for him. The husband deposes that the wife did the administrative work at the business due to his being unwell.
The wife deposes that, in mid-2014, she resigned from the business and worked full time. The husband deposes that the wife had already resigned from her other job in 2010. It is common ground that the husband slept during the day at the business and that he sometimes left the premises while the wife continued to work in the business.
In 2014, the parties travelled to the Country E. The wife deposes that the parties shared the cost of the trip. The wife said in her oral evidence that she saved $20 each week from her work at the business and applied this to the trip. The husband denies that the wife paid for trip and said that he is not aware of what the wife did with her earnings from the business but asserted that the earnings were not used for the holiday. The proposition that the husband does not know what the wife did with her earnings does not support the assertion that she did not use the money to meet holiday expenses and he offers no other evidence to demonstrate its disposition. I accept the wife’s evidence.
Town S Incident
The wife deposes that in 2014, the parties were travelling from Town S to Sydney by car, with the husband driving. She says that he was speeding and she told him to slow down. The wife deposes:
…[the husband]: “Shut up. You’re sounding like my ex [Ms N] [”]. He then violently stopped the car and shouted at me “Get out, get out of the car”. I was afraid. I tried to calm him down. He then drove us to [Suburb C]. When we arrived at [Suburb C], [the husband] argued with me. He pushed me in the kitchen and hit me with his hands across my face. I cried. He hurt me. Some hours later, [the husband] said “I’m sorry.”
In her oral evidence, the wife could not recall where the Town S incident occurred but recalled it was the kerb, that the husband pulled over quickly and told her to get out. The wife said that she got out of the car and the husband drove off, then stopped and reversed back to get her. The wife said that the parties travelled back to Sydney and the husband was still very upset when they arrived home. The wife confirmed in her affidavit evidence that the parties argued as she wanted him to slow down and the husband told her she sounded “like his bitch wife.” The wife said that she told the husband, “I am not. I am trying to tell you to be careful and he hit me.” The wife demonstrated the use of the back of the husband’s hand and his fingers against her jaw. When counsel for the husband identified that the wife had deposed to “hands,” the wife said, “That’s maybe my language. I can’t say ‘he or she’ accurately.”
The husband denies the totality of the wife’s account about the Town S incident. There is no other evidence to which I can refer to assist me in determining whether the Town S incident occurred. Having regard to the findings at paragraphs 10 to 18 of these Reasons, I prefer the wife’s account and find accordingly.
The Town S property was transferred to the mortgagee under power of sale in early 2015.
The husband travelled to Country E in 2015. The wife gave unchallenged evidence that she remained in Australia working at the business and that, while the husband was overseas, he was hospitalised. The wife says that her mother and sister visited the husband in hospital until she arrived, and that she assisted the husband to return to Australia when he was well enough to travel.
In 2015, the husband purchased a property in Country E.
In 2018, the Federal Court of Australia appointed a liquidator to H Pty Ltd.
Home Loan Refinancing
In 2018, the home loans secured by the Suburb C property were refinanced with D Bank. The Loan Agreement Offer discharged an X Company loan in the sum of $1,119,489 and a loan from Y Pty Ltd in the sum of $550,000 i.e. $1,669,489. The wife contends that she “assumed responsibility for the [Suburb C] mortgage.” I understand her to be saying this because the loan was secured by Suburb C and she, as the sole registered proprietor, was the sole mortgagor.
On examination, the loan offer from D Bank was addressed to both parties and both parties are described as the “borrowers.” In my view, it is an oversimplification for the wife to contend that she “assumed responsibility” for the mortgage. Although the mortgage instrument and detailed terms of the loan are not in evidence, experience permits me to infer that the borrowers were jointly and severally liable for the loan. Liability for the loan repayments and the underlying security are not necessarily the same given liability pertains to the borrowers’ obligation to repay the loan, whereas the mortgage provides security for the purposes of enforcement.
Gun Incident
The wife deposes:
38.[In] 2019 whilst in the kitchen upstairs in [Suburb C] I asked [the husband] for money to buy food for the New Year Celebrations. He said to me words to the effect of:
“You already bought food at Christmas. You are asking for money again. I gave you money at Christmas. You are a spender bitch like my ex [Ms N].”
I said words to the effect:
“But I have worked for you for no money all these years.”
[The husband] replied in words to the effect:
“Get out. I want you out of here. Leave now!”
I left [the husband] and went downstairs to the loungeroom.
I then heard [the husband] telephone his friend [Mr Z]. I went to the stairs and I heard speak to his friend [Mr Z] words to the effect:
“You know [Mr Z], after the new year I will transfer my assets and the house to my kids so [Ms Scaletta] can't get anything when we separate”.
39.I then went back upstairs to the kitchen where [the husband] was seated near the kitchen. I saw a shocked look on [the husband’s] face. I said to him words to the effect:
“I heard what you told [Mr Z]. I am very disappointed with you. I never thought you would do this to me.” [The husband] said to me “I did not say that to [Mr Z].” I went to the bedroom.
40.I was sitting on the bed crying and [the husband] walked in with a gun. He pointed the gun at my face. [The husband] said to me “You see this, you see this” whilst pointing the gun in my face. I was very frightened and shaking. I froze. [The husband] then started to walk away and as he was walking away [the husband] said “I will shoot myself.” I closed the bedroom door. I called life line RESPECT. They told me to leave the house and to call the Police. I did not call the Police as I was scared. I left [Suburb C] and went to my sister [Ms AA]’s house in [Suburb BB]. I lived with my sister for [several] months. During this period I found a job with the [CC Company]. I also sought assistance from a psychologist as I was traumatized from the gun incident.
41.Whilst living at my sister's home, [the husband] tried to reconcile with me although I was reluctant to do so. I returned to live at [Suburb C] with [the husband]. Initially he was apologetic for the way he had treated me but then he became abusive toward me again and shouted abuse at me from time to time and would make me scared.
42.Prior to our separation I moved into the spare bedroom for some week until I left the marriage with only my clothes in [late] 2020 and when [the husband] kicked me out during another argument. [The husband] said to me words to the effect of “You stupid bitch get out.” I sought treatment from my psychologist for a number of weeks. I remain traumatized by the gun incident.
43.After we separated I moved in with my sister, [Ms DD] and my brother-in-law [Mr EE] in their home at [Suburb BB] until I could find a place to live that I could afford. As well as moving in with them I sought help from a psychologist [Ms FF] for about 3 sessions. I continued working [at] “[CC Company]”.
The husband deposes:
65.In relation to paragraph 38, I deny the conversation took place. I recall that I had given [the wife] approximately $500 to buy food and did not understand why she needed further money. I recall a conversation as follows:
[The husband]: “…what did you do with the money I already gave you “
[The wife]: “I spent it”
[The husband]: “On what? “
[The wife]: “Food”
[The husband]: “That was $500, why do you need more money? “
66.I was unaware as to what [the wife] had done with monies I had given her, she had never accounted to me or provided receipts or details as to what had been purchased and except for conversation like that set out above, I did not ask her. It was not that kind of relationship. I deny that I ever said to her words concerning spending too much money or that the [the wife] said words to the effect that she had worked for me for no money all these years or that I told her to get out of the house. I do remember the argument and I do remember being very upset. I went to the [business] and drank excessively. Later that day [the wife] came to the [business] because I could not unlock the car and I rang her up. She came to unlock the car. I do remember I was very drunk that night. I do not recall whether or not I had a conversation with [Mr Z] on that day concerning separation or transfer of assets. However, the house was then and still is in the name of [the wife] and could not be transferred without [the wife’s] consent. The next morning, I was taken to hospital. [The wife] rang the ambulance to take me there.
67.I refer to paragraph 40. This happened on the same day, that is the day before I went to hospital. I did have a gun which I had had from [previous employment]. I did not point the gun at [the wife]. I did say that I would shoot myself. I then left the house, never having pointed the gun at the [the wife]. I drove to [Suburb GG] with the idea of shooting myself. I did not do so. I drove home. I put the gun in the glovebox of the car. I locked the car and left. I later discovered that the gun, a pistol, was missing from the glovebox and I presumed that [the wife] had removed it. I asked her, “Where is the gun?” and she said, “I took it”. I repeat I never pointed the gun at her or threatened her with it. The threat was about myself.
68.Further with respect to paragraph 40, I have never pointed a gun at [the wife], I have never taken a firearm and used it to scare, harass or intimidate any person. [The wife] was becoming more and more anxious at that time and explosive in her communication. It was becoming difficult to talk to her as she would scream or make some sort of allegation about my conduct which was fabrication. I recall when an incident of this nature occurred, I would go to the bedroom and a conversation would take place to the following effect:
[The husband]: “…we need to think about this relationship. Maybe we need some time apart. We need to change how you feel. You know I have been incredibly ill”
[The wife]:“I can’t cope anymore; I don 'I know why. I just can't. I'm going to stay with my sister for a while.”
In her oral evidence, the wife adhered to the account in her affidavit. She agreed that she knew that the Suburb C property was in her name and that she could have asked the husband to leave. She said, “Yes, but morally I respect him.” The wife did not know if the husband went to hospital the next day. She said that when she called “1300 RESPECT,” she was advised to leave the house. She moved out the same day.
The wife held up her hands in the witness box to indicate that the gun was about 20 centimetres in length. The wife said in her oral evidence that, after she heard the husband say on the phone, “This time I think we’re going to separate,” she went to him and said, “I heard everything you said and it breaks my heart that is how you think of me.” The wife said, “I went to bedroom and he came with gun pointing in my face… He said, ‘You see this, you see this?’” The wife said, “I froze. I scared.” Counsel for the husband put to the wife: “If someone threatened you with a gun, you would have called police” to which the wife answered: “I was scared that if I called police he might go to gaol.” The wife resisted the proposition that the gun was in a holster. The wife agreed that the husband said he was going to commit suicide and that he left the house.
In her oral evidence, the wife clarified that she stayed with her sister for about three months. During this time, the wife attended on a psychologist on about three occasions in respect of the gun incident. She denied that she saw the psychologist because the marriage was over and tearfully explained her attendance as follows:
No.... I’m scared because I can’t sleep. I’m always crying, and I want to ask for help… I always hear the news the people that die, and there’s a gun in my place, and that’s what’s always in my head. I’m seeing it when I close my eyes.
The wife agreed that after she returned to the home three months later, she took the gun and put it somewhere “to stop him hurting himself” but did not remove it from the house.
In his oral evidence, the husband said he did not remember much as he was “very drunk” having consumed three bottles of wine.
The husband said that there was an argument, that he went to the bedroom and that he saw the wife on his side of the bed. He showed the wife the gun in the holster and said, “I’m going to shoot myself.” He said he went to Suburb GG and contemplated shooting himself but changed his mind. He said he put the gun in the glovebox of his car “where it always stayed,” returned to the Suburb C property, changed his clothes and went to work. The husband denied removing the gun from the holster.
The husband accepted that the incident might have been intimidating for the wife. He said, “Maybe I said the wrong words. I never intended to hurt her.”
On any view, there was an incident in the context of an argument in which the husband had a gun in the presence of the wife and threatened to kill himself. Of itself, that would have been terrifying for her. The wife says that the husband pointed the gun at her and that the gun was not in its holster. The husband denies these particulars.
I accept the wife’s account of the gun incident including that the gun was pointed at her and was out of its holster and find accordingly. The fact that the wife was concerned about the husband going to gaol, and so did not call police, does not reduce the reliability of her evidence. To consider otherwise is likely to fail to acknowledge the contours of family violence where the perpetrator of the violence and its subject are in an intimate relationship. The husband, by his own evidence, was drunk after consuming three bottles of wine; and was in a heightened emotional state and threatening suicide. These features diminish the reliability of his recollection. The reliability of the husband’s evidence is otherwise generally in doubt as explained at paragraphs 10 to 18 of these Reasons.
The wife returned to the Suburb C property in about early 2020. At this time, she commenced working at her employer in the afternoons and continued to work at the business in the mornings. The wife gave unchallenged evidence that she applied her income from her employer to groceries and other living expenses for the parties.
The parties separated on a final basis in November 2020, when the wife left the Suburb C property.
Lease of Business
Commencing September 2021, F Pty Ltd leased Suburb M to a third party (“Lessee”). A copy of the lease is located in Exhibit H-3. The rent is $104,000 per annum plus GST. The lease is for a five year term with two options each of five years. The Lessee received a rent-free period of six weeks from the commencement of the “Lessee’s Works.”
“Lessee’s Works” are set out in Clause 37, which provides:
(a)As consideration for the Lessor's execution of this Lease, the Lessee agrees at its sole cost and expense to:
i.diligently, properly and in a good and workmanlike manner perform any work required, engage certified and licenced contractors and seek any consent required from any public authorities to ensure the structural components in the Premises is compliant with any and all codes, laws, and regulations relevant to the operation of a [business], including but not limited to purchasing, refurbishing and installing [fittings], dispensers and above and below ground [fittings];
ii.prior to the commencement of any construction of any of the Lessee's Work, submit to the Lessor for approval a complete plan and specifications of the Lessee's Works; and
iii.refurbish, repair, maintain all structural components of the Premises in a good and workmanlike manner every 10 years after the lease commencing date to keep the Premises in a good and operational condition and [the] [H Pty Ltd business].
(b)The Lessee agrees and acknowledges that any costs incurred by the Lessee under this clause is consideration for the Lessor's entering into this Lease and not a set off or deduction from any of the Lessee's obligations to pay rent, outgoings or any other payments required under this Lease.
(c)This clause is an essential clause of the Lease
Pursuant to clause 9, the Lessee has a right of quiet enjoyment.
Late 2021: Sale of Suburb Q
In 2021, the husband and his sister sold the Suburb Q property for $2,825,000. Settlement occurred in late 2021. The husband received $1,702,957 as $650,000 (“Cheque No 1”) and $1,052,957 paid to F Pty Ltd and administered by the husband (“Cheque No 2”).
The husband’s affidavit evidence as to the sale of the Suburb Q property is:
47.I refer to paragraph 25(d), relating to [Suburb Q]. It was only a proportion of the rent which was used to pay the mortgage at [Suburb C]. My sister received the other half of the rent. The 50% of the rent was paid into the account of [F Pty Ltd].
[…]
76.Further with respect to paragraph 47, after [Suburb Q] was sold which settled in September 2021, I refurbished the [business] for the sum of approximately $386,000.00. I refer to Annexure “A” to the Applicant’s Affidavit which my solicitors provided to [the wife’s] solicitors. On settlement of [Suburb Q], I was given two cheques, one in the amount of $650,000.00 and the second was in the amount of $1,052,957.04. When I received those two cheques I cashed the smaller cheque in the sum of $650,000.00. I paid approximately $386,000.00 in respect of renovations to the [business]. That left an amount of approximately $264,000.00. I kept that money for a while and made monthly payments to [D Bank] in respect of the mortgage on [Suburb C] as well using some on living and other expenses. The bigger cheque I paid into a Commonwealth Bank term deposit account in the name of [F Pty Ltd]. The documents showing the payments received were provided to [the wife’s] solicitors by VL Macri Lawyers.
[…]
91.After [Suburb Q] settled, the settlement cheque of $ 1,052,957.04 was put into a term deposit in [F Pty Ltd’s] name with Commonwealth Bank. On maturity I transferred those proceeds to [D Bank] where the joint home loan was held. There were three sub-accounts – a home loan and two other sub-accounts. [In] or about [mid] 2022, I used approximately $308,521.78 to pay off one sub account and [D Bank] opened up an account for the balance of the term deposit. [In October] 2022 I paid out the second sub-account in the sum of $296,555.42. The balance of the home loan amount is approximately that stated in the applicant’s balance sheet of $500,465.42. The [D Bank] receipts which I had, have been provided to [the wife’s] solicitors. I attended at [D Bank] [Suburb HH] and [Suburb U] branches [in late] 2023 and was able to ascertain that there are three accounts held by [D Bank] obtained a bank statement true copies of which are annexed hereto and marked “E”.
Cheque No 1
The husband deposes that he cashed Cheque No 1 and applied $386,000 to the cost of refurbishing the business. Of the balance of $264,000, he deposes that he:
…kept that money for a while and made monthly payments to [D Bank] in respect of the mortgage on [Suburb C] as well as using some on living and other expenses….
In his oral evidence, the husband said the refurbishment work was “all done for cash” and there were no invoices or receipts. The wife conceded in her oral evidence that she had seen works being undertaken at the site including new fittings and she saw construction fencing. She did not know if new pipework had been installed.
I accept that improvement works have occurred at the business since separation. However, I am not convinced that the works was at the husband’s cost and expense in circumstances where:
(a)There are no invoices or receipts;
(b)The Lessee entered into possession of L Street in late 2021 with a right of quiet enjoyment, two weeks before the husband received Cheque No 1; and
(c)Clause 37 of the lease provides that the Lessee, at its sole cost and expense, would do the types of work that the husband says he undertook including:
(i)Purchasing, refurbishing and installing new fittings and storage tanks; and
(ii)Ensuring regulatory compliance of all structural components relevant to the operation of a business.
The husband says that he used $264,000 for personal expenses and paid the Suburb C mortgage with it. As to the disposition of the funds for personal expenses, the husband’s Financial Statement discloses nil personal expenditure, other than the home loan. As to the proposition that a portion of the cash was applied to the home loans, the bank statements for the sub account ending:
(a)“00” for the period between the time the husband received Cheque No 1 in October 2021 and the discharge of that sub account in July 2022 record that one payment of $1,416 was made in October 2021; and
(b)“01” for the period in October 2021 and the discharge of that sub account in October 2022 record that payments were made to the account in October 2021 of $1,346, February 2022 of $1,209, August 2022 of $1,486, September 2022 of $1,576 and October 2022 of $1,669.
The amounts in the preceding paragraph add to $8,702. The wife does not claim to have made such payments and so I accept that the husband caused $8,702 to be paid to sub-accounts 00 and 01 after October 2021 and prior to the final payment on the loan accounts. That said, I am not satisfied that the source of funds were necessarily the proceeds of Cheque No 1. The narrations on the statement associated with each payment is “LOAN REPAYMENT.” By contrast, a D Bank Statement for the parties’ joint account contained within Annexure E of the husband’s affidavit describes “CASH DEPOSIT” as to clarify the nature of the deposit.
The husband’s evidence as to the disposition of the whole of the proceeds of Cheque No 1 other than possibly $8,702 is unsatisfactory. I find that he has not made proper disclosure as to it.
Cheque No 2
In October 2021, Cheque No 2 was invested in a term deposit with the Commonwealth Bank of Australia for six months. The husband deposes that on maturity, he transferred those funds to the D Bank. The husband deposes that, in July 2022, he paid $308,521 to discharge the “00” sub-accounts and opened a D Bank account for the balance. The payment of $308,521 to account ending “00” is recorded in the bank statement contained within the wife’s affidavit.
The bank statements for the account in the husband’s name contained within his affidavit records:
(a)An opening balance in July 2023 of $800,00. The sum of $308,521 and $800,000 is $1,108,521. This is more than Cheque 2, suggesting an accumulation of interest in the term deposit;
(b)That in October 2022, $296,555 was transferred from the account. There is no dispute that this discharged the “01” sub account;
(c)In November 2022, $142,469 was transferred from the account. This is the sum of $135,000 paid to the Liquidator pursuant to the Deed and the husband’s legal fees of $7,469 relating to the District Court proceedings, as recorded in Exhibit H-3. After this transfer, the balance of the account was $362,870; and
(d)The balance of the account as at August 2023 was $361,441, with the difference since November 2022 represented by withholding tax and credit interest.
Having regard to the bank statements for the account, cross referenced to the District Court documents contained in Exhibit H-3, I am satisfied that there is a satisfactory account of the disposition of Cheque No 2.
Sale of Suburb U
The wife deposes that the husband sold Suburb U in 2015 for $2,250,413.34 and that she does not know what he did with his 50 per cent interest.
The husband deposes that he sold Suburb U for about $2 million at or about the time he purchased the Town S property in 2004, that is, that he applied his share of the sale proceeds of Suburb U to the Town S property. In his oral evidence, the husband said that he did not remember when Suburb U was sold and that its proceeds have now gone because the Town S property was sold and there were no surplus funds.
There is no other evidence to which I can refer to assist me in determining when Suburb U was sold. Having regard to the findings at paragraphs 10 to 18 of these Reasons, I prefer the wife’s account and find that Suburb U was sold in 2015. I will return to the disposition of the whole of the sale proceeds at paragraphs 87 to 89 below.
Cash
The wife deposes that, in mid-2019, she saw the husband in the garage opening a plastic pipe and taking cash out of it. The wife deposes that the husband said to her:
If I put all the cash in the bank, I will have to pay a lot of tax. I have about $300,000 cash in the tube here.
The husband deposes that he kept cash earnings from the business at the home and sometimes deposited it in the bank. The husband deposes:
…During a conversation in about 2019, I did say words to the effect “we’ve now got $60,000 to $80,000 in there.” That money was used to pay expenses relating to the [business] from time to time and we would also use it for personal expenses or use it for the purpose of paying creditors… I deny the conversation claimed by the wife. I have never has $300,000 cash at home other than the $650,000 in respect of the sale proceeds of [Suburb Q] …
On 29 January 2021, the parties exchanged text messages:
[The wife]:…I know its tough but I cannot understand you. We both know you have that nearly 300 thousand hidden away but didn’t pay bills that are important to make your everyday living worry less
[The husband]: Where do you think the last 12/15 months house payments came from
[The wife]:…We both know and the statement will show its coming from the rent and the remaining money from the sale of the flat.
You have kept most of the cash of the [business] and only uses some from it sometimes you will not finished 300 that quick.
(Emphasis added)
There is no dispute that the husband kept cash at the home. On the husband’s account, he had $60,000 to $80,000 in 2019 and then $650,000 from part of the Suburb Q sale proceeds on and after October 2021. The wife’s reliance on “$300,000” is based on what the husband told her. It is her case that the husband ought not be believed. Counsel for the wife recognised this defect in the basis of the wife’s belief as to the quantum of cash asserted by her.
The wife’s reply that mortgage payments were “coming from the rent and the remaining money from the sale of the flat” warrant consideration in view of her complaint that the husband has not disclosed the disposition of the sale proceeds of Suburb U.
Firstly, I infer that “the rent” is a reference to Suburb Q in view of the common evidence that such rent paid the mortgage; and the “remaining money from the sale of the flat” means the sale proceeds of Suburb U. That is because the only property that is said to have been sold since 2010, other than the Town S property which was repossessed by the mortgagee and W Street which was sold and the proceeds paid to the husband’s second wife, is Suburb U.
Secondly, the wife deposes that she does not know what the husband did with his interest in the sale proceeds of Suburb U while also telling the husband in 2021 that the money to pay the Suburb C mortgage “is coming” from the “remaining money from the sale of the flat”. While this may not account for the whole of the Suburb U proceeds, it causes me to doubt the wife’s assertion that she does not know how the husband applied any of his share of the Suburb U sale proceeds.
Husband’s Inheritance
Exhibit H-5 comprises a bundle of documents concerned with the estate of the husband’s late mother. These documents were disclosed to the wife under a cover of email dated late 2023, that is, the eve of the final hearing. Exhibit H-5 records:
(a)The husband’s mother died in 2022;
(b)The husband and his sister are the Executors of the Estate and its beneficiaries in equal shares;
(c)The application for probate was publicised on the Supreme Court of New South Wales website in 2023;
(d)In mid-2023, the husband and his sister deposed to an Affidavit of Executors;
(e)The gross value of the Estate was $920,000 with no creditors. The Estate comprises a residential property with a stated value of $750,000, cash funds of $40,000 and shares in a public company with a stated value of $4,000; and
(f)In mid-2023, the Supreme Court of New South Wales granted probate.
A letter from the lawyers acting on the Estate dated late 2023 records that no distributions have been made.
The husband does not refer to his 50 per cent entitlement to the Estate of his late mother in his affidavit or Financial Statement.
Mr O
The wife deposes that, in 2010, the husband’s youngest child Mr O was 11 years of age. She deposes that Mr O stayed with the parties every second “week” which she clarified to mean alternate weekends although there were weekends that he did not come. The wife said in her oral evidence without further challenge that Mr O came to the business each afternoon after school and stayed there until his mother collected him.
The husband deposes that Mr O stayed overnight up to fortnightly weekends until he was 11 or 12 years of age but then stopped coming as regularly.
Family Violence
The wife deposes:
[The husband] was often violent towards me in the marriage. He often picked on me. I tried to calm the situation by not responding and keeping out of his way when he was angry.
The husband deposes that he has never been violent towards the wife but has only ever been “cranky” and attempted to hold her to account for making errors when invoicing customers. The husband deposes that the parties would have a “robust discussion” about these mistakes because they may have resulted in a loss of customers, and then return to normal. In his oral evidence, the husband agreed that he was abrupt and rude to the wife at these times.
I have previously outlined, and made findings about, the Town S incident in 2014 and the Gun incident in 2019 and incorporate paragraphs 44 to 46 and 53 to 63 of these reasons without need of repetition.
The wife was challenged about the veracity of her evidence concerning family violence by reference to an offer she made to the husband in May 2023 to walk with him to the train and take him home after a court event. The wife said she works in the carer industry, has compassion and saw him walking with a walking stick. She said “I’m still [have] compassion …and I’m with my sister.” In circumstances where the parties had been separated for two and a half years; the interaction was to occur in a public place and in the company of the wife’s sister; and the husband was obviously frail, the wife’s offer displayed kindness not a lack of veracity.
Current Circumstances
The wife is currently 43 years of age. The wife gave unchallenged evidence that she was diagnosed with a medical condition, and that she takes time off work when the pain is intolerable. She adduces no medical evidence. The wife works as a casual employee in the care sector and earns $1,135 per week gross. She rents a room in a private residence for $250 per week. The wife has living expenses of about $319 after payment of tax and rent.
The husband is 71 years of age. He asserts that he is in poor health but adduces no medical evidence. F Pty Ltd receives rental income from Suburb M of about $9,200 per month. This is a resource to the husband as the sole director and shareholder of that entity. The husband resides at the Suburb C property.
CONTENTIONS
The wife contends that:
(a)Her contributions should be assessed as 30 per cent based on a ten-year relationship during which she worked in the husband’s business, “assumed responsibility for the mortgage” of the Suburb C property, made greater homemaker contributions, cared for Mr O per Robb & Robb (1995) FLC 92- 555; and to account for family violence per Kennon & Kennon (1997) FLC 92-757 (“Kennon”); and
(b)There should be a further 12.5 per cent adjustment in her favour pursuant to s 75(2) of the Act having regard to the parties’ respective ages in that the husband’s life expectancy is less than the wife’s, her medical condition, disparity of income and financial resources, and the husband’s non-disclosure.
As I have understood the husband’s case as set out at paragraphs 36 to 50 of his Case Outline Document and in oral submissions, the husband contends that:
(a)His contributions should be assessed at 80 per cent having regard to his initial contributions but acknowledging that the wife made homemaker contributions and worked in the business. He contends that the wife’s care of Mr O was neither frequent nor of long duration. He resists any adjustment based on the principles in Kennon; and
(b)There should be a further five per cent adjustment in his favour pursuant to s 75(2) of the Act having regard to:
(i)The parties’ respective ages in that the wife is younger than the husband;
(ii)The husband is in a “poor state of health” whereas the wife is “generally in good health” although she had a medical condition. Counsel for the husband ventures in his Case Outline Document to assert that the “husband will likely require care at some stage in the not too distant future”;
(iii)The husband will never work again and has no opportunity to accumulate further assets whereas the wife has time to accumulate assets and has qualifications in that regard; and
(iv)The disparity of income and financial resources, and the husband’s non-disclosure.
That said, the husband’s counsel submitted at paragraph 51 of his Case Outline Document:
As a result of the above, there should be a 5% adjustment in favour of the husband, such that the net division, not of all assets, but of an adjusted asset pool, taking into account the change in the parties’ positions between the commencement of cohabitation and the conclusion of cohabitation. If in fact the asset pool has gone backwards over that time, then it is recognised that there would need to be an adjustment in favour of the wife to some extent, given the ten year relationship and the contributions which it is acknowledged that she did make. It is anticipated that this would equate to 10% of the combined asset pool. That is, combined assets of $5,333,642, less the [D Bank] liability of approximately $500,000 leaving approximately $4,833,177, of which 15% equates to $724,976, with superannuation effectively cancelling itself out, given the relative equality of interests in superannuation.
Counsel for the husband did not make any oral submissions about an “adjusted asset pool” to account for the pool having “gone backwards” over time, as to result in an assessment that “would equate to 10 per cent of the combined asset pool.” Given the concepts advanced in paragraph 51 were not the subject of submission, I have treated those concepts and arguments as having been abandoned.
LEGAL FRAMEWORK
Section 79 of the Act relevantly provides:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property;
[…]
(2) The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
[…]
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage, or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage, or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
[…]
Before an order is made adjusting the parties’ property, the Court must be satisfied that it is just and equitable to do so: Stanford v Stanford (2012) 247 CLR 108 (“Stanford”). As explained in Stanford:
36. The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not “to be exercised in accordance with fixed rules”, nevertheless, three fundamental propositions must not be obscured.
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(A) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
The judge called upon to decide proceedings of that kind is not entitled to do what has been described as ‘palm tree justice’. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down.
[…]
40. Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
When making a decision pursuant to s 79 of the Act, the “broad brush” approach, as opposed to a mathematical approach, is well established: Perrin & Perrin (No 2) [2018] FamCAFC 122 at [57]–[58].
In Pierce & Pierce (1998) FLC 92-844, the Full Court held at [28]:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J. at page 10).
The Court is to have regard to the myriad of contributions in a marriage: Jabour & Jabour (2019) FLC 93-898. The weight to be applied to such contributions depends on the facts of the case.
I need to have regard to the effect of the contributions based analysis when considering the need for an adjustment pursuant to s 75(2): Willis & Willis [2007] FamCA 819.
Both parties have formulated the percentage distribution based on a one pool approach for which reason I will do the same.
What are the assets, liabilities and financial resources of the parties or either of them?
The final version of the Balance Sheet is Exhibit CT-2 subject to an oral amendment by counsel for the husband as to the financial resources, who stated a value of $375,500. The assets and liabilities for division comprise:
Owner Assets Wife Husband Finding 1 Wife Suburb C property 3,600,000 2,900,000 3,600,000 2 Joint Country E property 106,919 106,919 106,919 3 Husband F Pty Ltd 1,837,478 1,837,478 1,837,478 4 Wife CBA Account ending …44 4,833 4,833 4,833 5 Joint D Bank Account ending …31 1,380 1,380 1,380 6 Husband Household contents 15,000 15,000 15,000 7 Husband G Pty Ltd 73,368 73,368 73,368 8 Husband D Bank account ending …53 360,000 360,000 360,000 9 Husband D Bank “Retirement” account ending …50 13,945 13,945 13,945 10 Husband CBA “F Pty Ltd” account ending …13 27,000 27,000 27,000 10 Joint Country E bank account 9,100 9,100 9,100 11 Wife Jewellery and household contents 5,500 5,500 5,500 Total assets: 6,054,523 Addback/s 75(2)(o) 12 Monies received by husband as cash 300,000 Nil Remove 13 Unexplained sale proceeds of sale of Suburb Q 1,097,880 Nil s 75(2)(o) Liabilities 14 Wife Suburb C home loan 500,465 500,465 500,465 Total liabilities: 500,465 Superannuation Owner Description 15 Wife Super Fund 1 17,326 17,246 17,326 16 Husband Super Fund 2 13,945 13,945 13,945 Total superannuation: 31,271 Resources 17 Husband’s inheritance from late mother’s estate E500,000 375,500 452,393 Item 1: Suburb C property
Mr K valued the Suburb C property at $3,600,000. The husband challenged this on the basis that Mr K did not account for or adequately account for:
(a)The position of the property on a main road;
(b)Damage to the ceiling and tiles; and
(c)Comparable sales and rental evidence.
Mr K did not agree that the property’s position on a main road necessarily impacted the value of an acreage. He said land size is the main factor when valuing in large lots, which differs from valuing residential properties.
When challenged about his comment that the home was in a satisfactory state of repair, noting the damage to an internal ceiling and floor tiles, Mr K said that “all considered” it is a large and sturdy home with some cosmetic issues. He was not advised of structural issues and did not assume there to be structural issues. Mr K agreed that the husband was present during the inspection but there were no relevant discussions between them.
Mr K saw the hole in the ceiling and section of missing tiles from the kitchen floor. He did not know the cause of the lifted tiles but thought it unlikely to have come from the ceiling given the distance between the two points. Mr K omitted to include photographs in the report and viewed the roof from the front of the house.
Mr K did not agree that the damage would devalue the house in the eyes of potential purchaser. He opined that, having regard to the entire property and the size of the dwelling, a savvy purchaser would factor in the damage when rationalising the value. Mr K said that although the kitchen flooring was not satisfactory, the kitchen itself is dated but satisfactory.
Mr K said he spoke to three local agents including two who specialise in acreage. He said his own specialisation is acreage. Mr K did not speak to Mr KK, an agent at Suburb LL because Mr KK does not specialise in acreage.
Mr K defended his selection of comparable sales evidence. Mr K explained that he used a secondary method in the form of rental properties. This included a property at Suburb MM. He did not use the Suburb MM property as a comparable sale because there were better examples. Mr K said he used the Suburb MM property because there was limited rental data. He noted that the Suburb MM property is zoned “R2” and may be subdivisible, whereas the Suburb C property cannot be subdivided. Mr K opined that a purchaser of acreage pays for lifestyle, whereas an investor considers yield.
Counsel for the husband submitted that Mr K was an “advocate” for his own opinion and was rigid in his evidence. No application was made to discharge Mr K on the basis that he had not fulfilled his duty. No application was made for the appointment of an adversarial expert. No different comparable sales or rental examples were put to Mr K nor any different value suggested. The husband does not wish to sell the Suburb C property so that the value may be determined by the market. Mr K’s evidence has been explained and is undisturbed, for which reason it is accepted.
Item 12: Addback of $300,000
During closing submissions, counsel for the wife conceded that his client could not press the $300,000 addback.
Item 13: Addback of Suburb Q sale proceeds
The sum claimed by the wife in Item 13 represents the whole of the sum received by the husband i.e. $1,702,957 less $605,076 paid to discharge sub-accounts 00 and 01.
For the reasons set out at paragraphs 71 to 76 of these Reasons, I am not satisfied that the husband has disclosed the disposition of Cheque No 1. Counsel for the wife submits that such funds should be added-back. In Trevi & Trevi (2018) FLC 93-858 at [27] to [30], the Full Court of the Family Court of Australia (“the Full Court”) held:
27. The Full Court held in Omacini and Omacini that addbacks fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
28.However, the Full Court also made it clear that an addback does not necessarily occur whenever “a party has expended money realised from the disposition of assets that existed as at the date of separation”, the Full Court describing such a proposition as “unduly simplistic”. An earlier Full Court made the same point, saying that adding back is “the exception rather than the rule”.
29.The fundamental precept that addbacks are exceptional, reflected in the decisions just referred to, also mirrors what has been said in earlier decisions of the Full Court that, for example, “the Family Court must take the property of a party to the marriage as it finds it” at trial. An important parallel proposition is that the parties do not “go into a state of suspended economic animation” after separation. Thus, reasonably incurred expenditure does not usually come within accepted categories of addback.
30.Two fundamental premises emerge from Omacini and the authorities preceding it. First, “adding back” is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion – usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
Counsel for the wife invited me to add back Cheque No 1 in the sum of $650,000 on the basis that the funds have been used by the husband without proper account. As I have previously analysed, this includes the $386,000 which the husband says was used to refurbish the business, but Clause 37 of the lease imposes the obligation to do that work on the Lessee at the Lessee’s sole cost. For the reasons already given, there is no adequate explanation for the alleged expenditure of $386,000 from the proceeds of Cheque No 1.
The disposition of the other portion of Cheque No 1, being about $264,000, is not satisfactorily established on the evidence. The husband asserts that he applied some of these funds to living expenses and the home mortgage. For the reasons earlier outlined, $8,702 may have been applied to sub accounts 00 and 01 from the proceeds of Cheque No 1. The husband’s Financial Statement asserts nil personal expenditure other than the home loan to support or give context to his assertion that he applied funds to meet his living expenses.
The wife relies on the husband’s failure to disclose his financial position to seek an adjustment pursuant to s 75(2)(o) of the Act. I cannot both addback a sum and take it into account in s.75(2)(o) as to do so would be to double-count. I have a discretion in this regard. In my view, it is more convenient and less prone to error to consider the whole of the proceeds of Cheque No 1 in the context of s 75(2)(o) than to dissect and differentially characterise the sum.
For the reasons set out at 77 to 79 of these Reasons, I am satisfied that account has been made for the disposition of Cheque No 2.
As a component of Cheque No 2’s funds, counsel for the wife argued that the payment to the liquidator of $135,000 and related legal fees should be regarded as “waste: In the Marriage of Kowaliw (1981) FLC 91-092. I do not accept that analysis because:
(a)The necessary propositions were not put to the husband in cross-examination;
(b)The fact that the wife was not involved in the District Court proceedings does not mean that the decisions made by the husband in relation to its conduct and compromise constituted waste; and
(c)The compromise of litigation on a without admissions basis does not constitute waste where such compromise avoids further legal fees and the risk of litigation itself, including the risk of an assessment of liability greater than that which has been compromised and an order for costs.
Item 15: Wife’s superannuation
Despite Exhibit CT-2 recording a variance to the value of the wife’s superannuation, counsel for the husband conceded the wife’s value during the hearing.
Item 17: Inheritance
The inventory of the estate records assets valued at $904,786, to which the husband is entitled to half, that is, $452,393.
Finding as to the Balance Sheet
In the circumstances, I find that the sum of the parties’ super and non-super assets are $6,085,794 with liabilities of $500,465, providing a net position of $5,585,329. The husband also has a resource of $452,393.
Section 79(4)(a): Direct and indirect financial contributions
The evidence establishes that the wife made negligible initial contributions whereas the husband introduced all major assets. The husband’s initial contribution of the business provided the mainstay of income during the relationship and the Suburb C property was the parties’ home. These contributions were used by the parties for the remainder of the relationship.
The wife worked in external employment from 2010 to 2014 and applied her income to the costs of the parties.
Section 79(4)(b): Non-financial contributions
Both parties worked at the business for no formal salary. The parties also travelled to Town S to clean and maintain it.
Section 79(4)(c): Contributions to welfare of the family, including homemaking and parenting
There is no dispute that the wife undertook most of the homemaking activities including cooking, cleaning, laundry, folding and putting away, watering the plants. The wife cooked meals for the husband during the day and in the evenings. Both parties cut the grass at the Suburb C property.
The evidence establishes that the wife cared for the husband when he was ill in 2011, after his stroke in 2014 and when he was hospitalised in the Country E in 2015.
Conduct
The wife contends that her contributions were made more arduous due to family violence. The husband resists the proposition. The wife’s case is framed by reference to the jurisprudence developed in Kennon & Kennon (1997) FLC 92-757 (“Kennon”). The substance of the proposition as framed by their Honours in Kennon, together with an analysis of the law and policy since that time, is conveniently captured by Aldridge J in Martell & Martell (2023) 66 Fam LR 650 (“Martell”) delivered on 15 May 2023. It is useful to reproduce those passages:
18.In Kennon v Kennon (1997) FLC 92-757 (“Kennon”), Fogarty and Lindenmayer JJ outlined principles to be taken into account when assessing findings of the occurrence of family violence in property settlement proceedings. As their Honours identified, they did so because the “pervasiveness and destructiveness of domestic violence” had in recent times become to be acknowledged and that there had “been a marked and long overdue change in those attitudes” so that ‘the law, and society more generally, have begun to explore legal remedies which may be appropriate to prevent such behaviour or address its consequences” (at 84, 290–84,291).
19.It is safe to say that such awareness and disapproval has continued to increase since then. Importantly, this increase in understanding directly led to changes in the Act. A new definition of family violence, which is in probably broader terms than would have been envisaged in 1997, was inserted into the Act in 2011 in the form of s 4AB.
20.Although widely quoted and followed, the principle stated in Kennon cannot be treated as if they were those of a statute – immutable and unvarying. At the least, those words must be read in the light of the Act as it speaks now.
21.Justices Fogarty and Lindenmayer were concerned about the opening of “floodgates” saying at 84,294–84,295:
That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters – a circumstance which proved so debilitating in the past. In addition there is the risk of substantial additional time and cost.
…
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect…
22.It has to be said, that their Honours terms “exceptional” and “narrow” lose much of their force if cases involving significant violence are to be the subject of the application of the principles. Such cases might have been regarded as exceptional at the time Kennon was decided but they cannot today be so regarded. Unfortunately the prevalence of family violence is wide and artificial barriers to its recognition, such as trying to limit its recognition in property cases to exceptional or narrow cases, has no basis in principle. As I shall endeavour to explain shortly, the focus of the majority’s reasoning was on the nature and quality of the contributions themselves which were not limited by such qualifying adjectives.
23. In Kennon, the principle was identified as follows:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79.
24.For the reasons given, the words “significantly” and “more arduous” are not to be read as coterminous with “exceptional”. Rather, they arise from the basis of the principle itself which focuses on contributions. If the nature and extent of a person’s contributions are made more difficult or harder so that they should be accorded greater weight, such that they should be taken into account in the determining of the outcome, they have therefore been “significantly impacted” or made “more arduous”. The focus is not on the conduct per se, but on its effects on contributions.
25.The threshold for recognition is therefore met by conduct which has a discernible effect on the contributions of the other party such that it should be recognised in determining the respective contributions of the parties.
26.That, in my view, should be the focus and terms such as “exceptional” or “narrow”, or indeed, “onerous” add an unnecessary and unacceptable gloss suggesting that a rare and high level of impact is required and that the violence or its impact must be exceptional. That is not however, what their Honours said. All that was required was a “significant adverse impact” upon a party’s contributions. The word “significant” was used, in my opinion, as describing that the effect must be sufficient to warrant recognition but not imparting some artificial threshold. The effect of the conduct must be such that a greater weight should be given to the contributions.
27.More recent cases have softened some of the harshness of the original application of the principles identified in Kennon. For example, it is now the position that the adverse effect of the violence on the contributions of a party can be inferred from the lay evidence of the parties and that there is no need to call evidence to “quantify” that effect (Maine & Maine (2016) 56 Fam LR 500 at [47]–[52] (“Maine”); Britt & Britt (2017) FLC 93-764 at [74]–[75]; Keating & Keating (2019) FLC 93-894 at [27]–[43], [52]–[67]; Benson & Drury (2020) FLC 93-998 (“Benson & Drury”) at [47]–[50]).
28.It seems to me that regarding Kennon claims as “special” or “exceptional” is apt to mislead. In reality, all the majority said in that case was that a person’s contributions are to be assessed in the light of all of the circumstances and where those circumstances have the effect of making the contributions more difficult, onerous or arduous, that should be recognised in the assessment of contributions. That, of course, takes place in a holistic manner (Dickons v Dickons (2012) 50 Fam LR 244; Jabour & Jabour (2019) FLC 93-898).
29.The primary judge did not use those words. Rather, her Honour said “the wife’s non-financial contributions were impacted and made more difficult and distressing” (at [46]) and “more arduous” (at [126]). They were found to be of such a nature so as to require consideration.
30.I would not take that to be an incorrect application of the principles set out in Kennon.
31.The difficulty that arises in this matter is, however, that the primary judge did not explain how the acts of violence of the husband led to the non-financial contributions of the wife being made difficult, distressing and more arduous. The reasons are silent on the issue.
32.In Maine, the Court held that the application of the principle in Kennon “required of his Honour findings in respect of evidence that addressed specifically… the impact that the violence had upon the wife’s contributions” (at [52]).
33.The requisite finding could, as discussed, be inferred as explained in Benson & Drury at [50].
34.The husband submits that the absence of this discussion indicates that her Honour did not understand and did not correctly apply the principles set out in Kennon (Ground 2(a)). Alternatively, it is said that the failure itself is an error (Ground 1(c), Ground 2(b) and Ground 3).
35.I incline to the latter view, but either way, error has been demonstrated. Whilst the events described by the wife were no doubt distressing, the evidence and the findings did not deal with the magnitude and extent of its effect. Whilst matters can certainly be inferred, that inference must be properly based on the evidence before the court.
In Benson & Drury (2020) FLC 93-998, the Full Court of the Family Court of Australia held at [50]:
Here, the primary judge found the appellant perpetrated family violence upon the respondent and drew an inference that such violence did have an effect upon the respondent’s contributions, making them “all the more arduous” (at [162]). An inference is an assent to the existence of a fact which is based on the proven existence of some other fact or facts, drawn as part of the fact finding process as an exercise of ordinary powers of deduction and reason in the light of human experience, unaffected by any rule of law (G v H (1994) 181 CLR 387 at [4]). Obviously, the strength of the subject inference depends upon the quality of the underlying evidence. It must be reasonable to draw the inference from primary facts. Mere conjecture will not suffice (Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275–278 per Spigelman CJ; Carr v Baker (1936) 36 SR (NSW) 301 at 306–307 per Jordan CJ). Importantly, the evaluation of the evidence from which the subject inference is sought to be drawn should be thorough and balanced. In the context of a Kennon argument, any factual controversies over the alleged misconduct of one spouse and its alleged deleterious consequential effects upon the other spouse should be resolved by familiar forensic techniques. Disputed but untested allegations, are not facts (Keating at [55]–[66]).
Is there an incidence of family violence?
In turning to the evidentiary requirements of a Kennon-style claim, it must first be determined whether there is an incidence of family violence. The general allegations of the husband being cranky and rude are generalised and are not matters to which I attribute weight.
I incorporate without need of repetition the evidence and related findings concerning the Town S incident and the gun incident, at paragraphs 44 to 46, 53 to 63 and 98 of these reasons, upon which the first limb of the test is answered in the affirmative.
Should the conduct be recognised in determining contributions?
Having found that there was family violence, I turn to whether the “conduct [had] a discernible effect on the contributions of the wife such that it should be recognised in determining the respective contributions of the parties.”
As to the Town S incident, the wife gave convincing evidence that the husband told her to get out of the car on the side of the road outside of Sydney, drove away and then returned to collect her. I infer that the act of driving away would cause the wife to feel that she had been abandoned by him and that she would have to find her own way home. When the parties arrived home, the husband continued to accuse her of being like his “bitch wife” and struck her face with the back of his hand. These are acts of verbal abuse and physical violence. I infer that such violence is likely to have had a destabilising effect on the wife, which would have made activities such as work and domestic duties more arduous for her. Counsel for the husband submitted that the wife is a “soft” person as though to imply that she was unusually susceptible to the husband’s manner. In my view, her softness operates to confirm the extent to which the wife is likely to have felt destabilised by the husband’s conduct.
The gun incident was a terrifying and egregious act. The fact of a person, in the context of an argument, holding a gun and threatening self-harm requires no further elaboration. I accept that the wife’s contributions after the gun incident were more arduous. She was living at a property where a gun that was ordinarily kept in the glove box of the husband’s car and with the husband who had, at the very least held a gun in her presence, while threatening to kill himself. I have no difficulty understanding and accepting the wife’s experience of fear relating to the gun, namely:
I was scared because I can’t sleep. I’m always crying, and I want to ask for help… I always hear the news the people that die, and there’s a gun in my place, and that’s what’s always in my head. I’m seeing it when I close my eyes.
For these reasons, I am satisfied that husband’s conduct in the context of the Town S incident and the gun incident had a discernible effect on the contributions of the wife such that it should be recognised in determining the parties’ respective contributions.
Section 79(4)(d): The effect of any proposed order upon the earning capacity of either party to the marriage
No submission was made about this factor.
Section 79(4)(e): The matters referred to in subsection 75(2) of the Act so far as they are relevant
Section 75(2)(a)
There is no probative evidence concerning either party’s health. There is no evidence that the husband will soon require care at some stage in the not-too-distant future.”
As to s 75(2)(a) of the Act, the wife is 43 years of age and the husband is 71 years of age.
Counsel for the husband’s contention is that, by reason of age and health, the husband has no opportunity to accumulate further assets whereas the wife has time to accumulate assets. That is a difficult submission in circumstances where the husband is entitled to receive half of his mother’s Estate and has not instructed the lawyers acting on the Estate to distribute the assets. I accept, however, that the husband is past the age of retirement and will not work in the future.
Section 75(2)(b) and (o)
The wife works casually as a care worker. She earns $1,135 per week gross.
The husband’s disclosure, other than his affidavit and Financial Statement of 1 September 2023, is located in Exhibit H-3. I note that the husband distanced himself from documents filed in the proceedings prior to 1 September 2023 on the grounds of inaccuracy. On 1 September 2023, the husband deposed that he is unaware of there being anything else to produce and filed an Undertaking as to Disclosure.
The husband has not made proper disclosure as to the disposition of Cheque No 1 in the sum of $650,000, from the sale proceeds of the Suburb Q property.
The husband’s Financial Statement states that he has no income and no expenses other than the home loan. In addition to a joint account, the husband discloses two “superannuation” and “bank” accounts with D Bank in his name, and a Commonwealth Bank of Australia account in the name of F Pty Ltd ending …13. The husband discloses no financial resources in Part L; and no disposal of property in the 12 months prior to and since separation (i.e. since November 2019) in Part M. Part L and Part M are plainly unreliable having regard to his inheritance and sale of Suburb Q respectively, neither of which are described.
F Pty Ltd receives rental income of $104,000 per annum plus GST. That income, considering property management expenses, holding costs and income tax, is available to the husband via the company. The ownership ledger from the managing agent records the debit and credits to the property for the period 2 January 2022 to 1 September 2023. The ledger was produced in September 2023. Net rent after management and administration fees is remitted to F Pty Ltd’s bank account ending …44 in the sum of about $9,200 per month. This is not the same bank account for F Pty Ltd as described at Item 37 of the husband’s Financial Statement, which ends …13. According to the ledger, F Pty Ltd’s bank account ending …44 has received about $192,804 since 2 January 2022.
The husband’s disclosure prior to the filing of his affidavit and Financial Statement is contained in Exhibit H-3.
Date Documents Late 2022 Deed of Settlement and release regarding District Court proceedings and related documents
Copy of CBA term deposit advice dated October 2021 (re “Cheque No 2”)
Lease dated September 2021 re L Street1 March 2023 Bank records and statements for sub-account ending 00 for the period 5 July 2021 to 9 July 2022
Bank statements for sub-account ending 01 for the period 5 July 2021 to 15 October 2022
A market appraisal for the Suburb C property
Front page of the contract of sale of the Suburb Q property, settlement figures and related documents2 March 2023 Market appraisal of the Suburb C property 3 March 2023 Bank statements of G Pty Ltd for the period 1 October 2017 to 30 June 2022
CBA statements for account ending …13 in name of F Pty Ltd for the period 1 October 2016 to 30 March 2021
Husband’s individual tax return for the financial year ending 30 June 2017
With respect to the valuation of G Pty Ltd and F Pty Ltd, the husband said he did not recall that Mr NN was asked to value the entities. The husband said he did not know that he was required to provide Mr NN with documents. The husband did not disclose the constitution of G Pty Ltd and F Pty Ltd. Such information would have revealed the voting or other rights attached to each class of shares and may have, for example, enabled Mr NN to ascertain whether a control premium or other adjustment ought be made to one class of shares compared to another.
Of the bank accounts in the husband’s sole name, the husband adduces through his affidavit Statement No 4 of his superannuation account for the period 13 April 2023 to 15 July 2023 and a balance as at 30 August 2023 but not Statements 1 to 3.
Correspondence from the husband’s solicitor dated 4 September 2023 confirms that the husband filed a personal income tax return for the financial year ending 30 June 2017 but none for 2012 to 2016 nor 2018 to date. Correspondence in March 2023 describes the companies’ and husband’s tax affairs as being in a state of disarray. It is the husband’s responsibility to properly administer his personal and company tax and financial affairs. Whether this is the result of infirmity, oversight or is purposeful makes no difference to the fact that the information ought to have been made available, including steps taken by him in the course of the family law proceedings to cause such documents to be prepared, and then disclosed.
The wife contends that the husband has not made proper financial disclosure. The evidence establishes that she is correct.
Where the evidence establishes non-disclosure, I need not be overly cautious in making an adjustment I favour of the innocent party: In the Marriage of Weir (1993) FLC 92-338; Black & Kellner (1992) FLC 92-287.
Section 75(2)(o): Robb & Robb
The evidence establishes that the wife undertook cooking and domestic chores for the benefit of Mr O when he stayed some weekends and was at the business after school each afternoon. This sounds as an adjustment in favour of the wife: Robb & Robb (1995) FLC 92- 555.
There are no other relevant factors pursuant to s 75(2) of the Act.
Section 79(4)(f): Any order made under the Family Law Act affecting a party to the marriage or a child of the marriage; Section 79(4)(g): Any child support under the Child Support (Assessment) Act 1989 etc.
These matters are not relevant.
CONCLUSION
There is no dispute that the husband introduced the Suburb C property, F Pty Ltd / L Street, his share of Suburb Q, his share of Suburb U, and the business. Initial contributions, although not specifically valued, overwhelmingly favour the husband.
I accept that during the relationship of 10 years, both parties applied themselves to the endeavours of work and their domestic enterprise.
Nothing turns on the fact that the wife was not paid a formal wage as an employee of the business given neither party received a wage and both accessed cash from the till to meet their expenses.
The husband was engaged in conducting the business although was impacted by a stroke in 2014.
The wife was the primary homemaker, attended to the welfare needs of the husband during and after periods of illness, repatriated the husband to Australia after he was ill and hospitalised in the Country E in 2015, and worked full-time between the business and third party employment.
The wife’s care of Mr O is addressed in the context of s 75(2)(o) of the Act.
I accept that the Town S incident and the gun incident had a discernible impact on the wife’s contributions and should be recognised in the overall assessment of contributions.
Having regard to the myriad of contributions over time, and taking account of the initial contributions by the husband, I assess the wife’ contributions as 27.5 per cent and 72.5 per cent to the husband.
The effect of the contributions-based assessment is that the wife would retain total value of $1,535,965 and the husband would retain $4,049,363. The differential of 45 per cent represents $2,513,398.
I am of the view that it is appropriate to proceed to make a 7.5 per cent adjustment in favour of the wife for future needs to account for the husband’s greater income and financial resources, his non-disclosure and her care of Mr O. In so doing, I have accounted for the husband’s age and the fact he is past the age of retirement.
I am satisfied that it is just and equitable to make order for the wife to retain 35 per cent of the overall assets and for the husband to retain 65 per cent.
The husband has long resided at the Suburb C property and wishes to remain in his home. It is appropriate that he have the opportunity to pay the wife the sum required to meet her entitlement failing which the property will be sold.
The wife will retain overall value of $1,954,865. Of this, she will retain superannuation and non-super assets valued at $145,058. The wife will receive $1,809,807 as a cash adjustment. In default of payment, the Suburb C property will be sold and the wife will receive 58.3 per cent of the proceeds, which is intended to be commensurate with $1,809,807 as a portion of the current equity.
The husband will retain overall value of $3,630,464 including the Suburb C property, F Pty Ltd, G Pty Ltd, cash savings and his inheritance.
In order to bring an end to the parties’ financial relationship so far as reasonably possible and to give better effect to the orders, I will make mutual releases and an order pursuant to s 121 of the Act.
For the Reasons given, I make the following Orders.
I certify that the preceding one hundred and seventy-eight (178) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Eldershaw. Associate:
Dated: 12 October 2023
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