Scalia & Antarus
[2022] FedCFamC2F 1496
Federal Circuit and Family Court of Australia
(DIVISION 2)
Scalia & Antarus [2022] FedCFamC2F 1496
File number(s): MLC 14125 of 2019 Judgment of: JUDGE O'SHANNESSY Date of judgment: 4 November 2022 Catchwords: FAMILY LAW – six day final hearing-property orders – addbacks – alleged waste – unreliable evidence of financial position – allegations of “make stuff up” – weight to initial contributions – Husband’s finances bound up with paternal family – court not satisfied Husband made full and frank disclosure of his financial affairs – no superannuation payment split. Legislation: Evidence Act 1995 (Cth), s 140
Family Law Act 1975 (Cth), ss 75(2), 79(2), 79(4), 79(8)
Cases cited: Blass & Blass [2022] FedCFamC1A 63
Browne v Green (1999) FLC 92-873
Candle & Falkner (2021) FLC 94-069
NHC & RCH (2004) FLC 93-204
Halinan & Witynski [1999] FamCA 1127
Hickey and Hickey and the Attorney-General [2003] FamCA 395
Fox v Percy (2003) CLR 118
Kennon v Kennon [1997] FamCA 27
Keskin & Keskin and Anor [2019] FamCAFC 236
Kessey & Kessey (1994) FLC 92-495
Kowaliw and Kowaliw (1981) FLC 91-092
Mabb & Mabb (2020) FLC 93-947
Marker [1998] FamCA 42
AJO & GRO (2005) FLC 93-218
Parshen & Parshen (1996) FLC 92-720
Robb & Robb (1995) FLC 92-555
Stanford v Stanford [2012] HCA 52
Trevi & Trevi (2018) FLC 93-858
Division: Division 2 Family Law Number of paragraphs: 278 Date of last submission/s: 2 August 2021 Date of hearing: 3-4 December 2020, 4-5 March 2021, 16 March 2021, 2 June 2021 Place: Melbourne Counsel for the Applicant: Ms B Tulloch Solicitor for the Applicant: Lennon Lawyers Counsel for the Respondent: Mr P Marchetti Solicitor for the Respondent: Anderson Family Lawyers ORDERS
MLC 14125 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR SCALIA
Applicant
AND: MS ANTARUS
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
4 November 2022
THE COURT ORDERS THAT:
1.Within seven days of these Orders, the funds currently held in trust by Lennon Lawyers for the benefit of the parties be split as follows:
(a)46.63% to the Wife; and
(b)Subject to Order 2 herein, the balance then remaining, 53.37%, to the Husband.
2.Contemporaneously with, or before, the payment to the Husband pursuant to Order 1(b) herein the Husband, at his sole expense, withdraw, and provide evidence of the withdrawal, of any caveat lodged by or on his behalf over the real property known and situate at B Street, Suburb C.
3.The Wife retain to the exclusion of the Husband all real and personal property in her name and possession, including but not limited to the following:
(a)Her right, title and interest in the real property at B Street, Suburb C;
(b)The benefit part property settlements from the sale proceeds of the Former Matrimonial Home;
(c)Her Motor Vehicle 1;
(d)Her Motor Vehicle 2;
(e)The benefit of funds in any account in the name of the Wife;
(f)The personal effects and chattels in her possession as at the date of these Orders.
4.The Husband retain to the exclusion of the Wife all real and personal property in his name and possession, including but not limited to the following:
(a)His right, title and interest in the real property at D Street, Suburb C;
(b)The benefit of part property settlements from the sale proceeds of the Former Matrimonial Home;
(c)The benefit of any monies lent to E Pty Ltd (or any other related entity) by the parties;
(d)His Motor Vehicle 3;
(e)The benefit of the funds in any account in the name of the Husband;
(f)The personal effects and chattels in his possession as at the date of these Orders.
5.The parties do all acts and things required to close the existing joint ANZ #...79 bank account.
6.Unless otherwise specified in these Orders, the Husband:
(a)Be solely liable for and indemnify the Wife against any liability encumbering any item of property to which he is entitled; and
(b)Retain sole liability for, and indemnify the Wife with respect to, any loan from F Pty Ltd or any other related entity and/or Mr G, and any credit card or other liability held or registered in the Husband’s name, including any personal taxation liability of or as arising from his involvement or connection with E Pty Ltd, F Pty Ltd or any related entity.
7.Unless otherwise specified in these Orders, the Wife:
(a)Be solely liable for and indemnify the Husband against any liability encumbering any item of property to which she is entitled; and
(b)Retain sole liability for and indemnify the Husband with respect to any loan, credit card or other liability held or registered in her name.
8.Unless otherwise specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other party all other property (including choses-in-action) in the possession of such party as at the date of these Orders;
(b)Monies standing to the credit of the parties in any bank account are to be retained by the party named on the bank account;
(c)Monies standing to the credit of the parties in any joint bank account are to be divided equally between the parties and the account/s forthwith closed;
(d)Save as provided herein, each party forego any claims they may have to any superannuation, long service leave, redundancy, retirement, retrenchment and like benefits belonging to or earned by the other save for where expressly provided for herein;
(e)Insurance policies and income protection policies remain the sole property of the beneficiary named therein;
(f)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(g)Any joint tenancy of the parties in any real or personal property is hereby expressly severed.
9.All extant applications are otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Scalia & Antarus has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
Introduction
The question I must answer in these proceedings is how to deal with the property of the parties pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’). The parties have already distributed the bulk of their property by agreement, but how those distributions should be treated in final orders remains in dispute. This dispute is between Mr Scalia (‘the Husband’) and Ms Antarus (‘the Wife’). The parties met in 2005 in Country A. The parties were married in 2007, separated on 11 June 2019 and divorced on 12 December 2019. There are two children of the relationship, born in 2002 and 2008 (‘the children’).
This account and these reasons do not recite every event and every financial event or controversy in these parties lives but deal with the most significant matters.
In these reasons ‘TP#’ refers to the page number of the transcript of the Final hearing.
The parties give different accounts of most things including when they commenced to live together. In her first solicitors’ letter after separation (annexure 3 of affidavit filed 26 November 2021, page 22 of 81) the Wife asserted cohabitation commenced in country A in 2005 but in her affidavit of evidence-in-chief filed 26 November 2020 at [5] asserted:
[The Husband] and I met in 2005 in [country A] whilst [the Husband] was visiting for business. We commenced cohabitation in 2006 in Melbourne, when I moved to Melbourne, Australia….
The Husband’s initiating application and affidavit evidence did not refer to cohabitation at all save that in an amended initiating application filed 26 November 2020, he put a cross in the box relating to period of cohabitation as “Not Applicable”. Hence the inference I draw is that he was asserting in documents, but faintly, that cohabitation commenced at marriage in 2007. In cross-examination (TP127) the Husband conceded that cohabitation commenced in 2006. I find and accept the Wife’s account of commencement of the relationship, cohabitation and marriage was as set out above by her at [5] for reasons stated later, but little turns on it.
When the matter is pared back, before consideration of notional assets or ‘add backs’ (discussed later), there remains $144,610.76 of non-superannuation assets (in a solicitors trust account) that has not already been dealt with by the parties, as well is a total of $521,500 in superannuation.
proceedings & Final hearing
The Husband initiated proceedings on 11 December 2019 seeking both financial and parenting orders. On 8 July 2020, parenting matters were finalised by consent orders, which provide that the children live with the Wife and spend 4 nights per fortnight with the Husband, changing to 6 nights per fortnight after the Husband completes a Men’s Behavioural Change Program. On that same day, the financial matters were set down for Final hearing on 3 December 2020 with an estimated hearing length of two days.
Despite those estimates of time, given in good faith, the matter was heard over 6 days plus written final address submissions: 3 & 4 December 2020, 4 & 5 March 2021 and 16 March 2021 and 2 June 2022. On 2 June 2022 the parties did not leave enough time for final addresses which were then ordered to be made in writing with the last submission on 2 August 2022. The hearing was heard in part electronically and in part in person in the courtroom. In my docket, cases are allocated the number of estimated days on an over listed basis. If a hearing takes longer than estimated, space must be found among other already listed cases or, on days allocated to write judgments or the small amount of time set aside for the, meant to be rare, instance of a case exceeding the estimate by a day or two.
A judgment in a six-day-case takes longer to write than a judgment in a two-day case. Time must be found to write such a judgment and to do justice to the parties’ evidence and submissions. Cases of the length of this one are expected to be transferred to Division 1 of this Court where longer cases can be accommodated.
However, the delay between the last submission and this judgment well exceeds this courts own guideline of no more than three months. I apologise to the parties and their practitioners for that delay which is not due to the parties. I have carefully looked at the evidence and the submissions and read the transcript of the six days to ensure that my decision takes account of all of the evidence and the parties’ submissions. I have a clear recollection of the evidence, the rhythm of the trial and the demeanour of the witnesses.
Due to the COVID-19 pandemic, the 3 and 4 December 2020 days were conducted electronically via Microsoft Teams. Further hearing days were held face to face on 4 and 5 March 2021, 16 March 2021 and then the final day was held on 2 June 2021 via Microsoft Teams due to a snap COVID-19 lockdown in Melbourne. On that day, I made orders for the parties to file closing written submissions by 2 August 2021. The matter exceeded well beyond its estimated two days.
Ms Tulloch of counsel appeared on behalf of the Husband and Mr Marchetti of counsel appeared on behalf of the Wife.
On day 3 of the trial, 4 March 2021, the Court became aware that some parts of the proceedings were not recorded on day 1 of the trial, 3 December 2020. The missing parts were when this matter was heard from 2.25pm to 2.52pm and 3.58pm to 4.30pm (other matters were also dealt with on that day). The Husband’s evidence-in-chief on day one was interrupted so that overnight the Wife’s counsel could be informed of the matters that were proposed to be led in oral evidence-in-chief and have the opportunity to examine the documents proposed to be tendered and have the opportunity to object. The matter then resumed at 9:40am the following morning (4 December 2020) and the Husband’s evidence-in-chief resumed 10:32am wherein exhibit H1 was adopted as evidence-in-chief and continued. Cross-examination of the Husband commenced at 10:40am on day two (4 December 2020) of the trial.
When the failure of the recording process was ascertained on day three, 4 March 2021, I had a discussion with counsel about this, and after a brief break for the parties to consider the ramifications and counsel to obtain instructions. Counsel agreed that the matter should proceed rather than the hearing be vacated and recommence.
I accepted that joint position of the parties and the hearing proceeded.
Background
At the time of the last day of the in person hearing on 2 June 2021, the Husband was 50 years old and worked as Chief Executive Officer at his father’s company (‘the Company’), earning approximately, he says, $70,000 per year. The Husband’s financial affairs are bound up with the financial relationships he has with his parents and the Company. He has one older child of a previous marriage, born in 2004. The Husband has re-partnered since separation.
At the time of the 2 June 2021 hearing, the Wife was 48 years old and worked in middle management for a large corporation, earning approximately $230,000 per year. She was born in Country A, and is a dual citizen of Country A and Australia, as are the children. She moved to Australia in 2006 for the purpose of the relationship with the Husband.
The Wife characterises the relationship as beset by family violence, accusing the Husband of controlling behaviour, financial control, undermining, making false accusations of infidelity, privacy-invasion and verbal abuse. However a Kennon v Kennon (1997) FLC 92-757; [1997] FamCA 27 (‘Kennon’) claim was not pursued. Those parts of the Wife’s evidence that would have been relevant to a Kennon claim remained in evidence but were not agitated by the parties. Accordingly, I only place weight on the financial aspects of that part of the Wife’s evidence, that is evidence about salary earned and paid into the parties’ bank accounts and the Husband’s application of the parties’ resources to the Company.
The major asset of the relationship was the former matrimonial home (‘the FMH’), a townhouse in Melbourne. The parties purchased the FM in 2009 for $755,000, and it was sold on 2 December 2019 for $1,305,000, that is, $550,000 more than they paid for it. At the time of settlement the property was encumbered by a substantial mortgage that included a line of credit facility drawn to more than $200,000. In addition, the Wife had the proceeds of sale of some Company H shares that when liquidated (discussed later) provided her about $213,000. The parties have had the benefit of agreed distributions of most of the proceeds of sale, agreed to be treated as part property settlements. Had those distributions not been agreed as part property settlements it is likely, subject to submissions on the evidence, that I would have determined them to be part property settlements.
One aspect of the case is that each accuses the other of barefaced lies to the court and the other party.
Documents relied upon
The Husband relied upon the following documents:
·Amended Initiating Application filed 26 November 2020
·Affidavit of the Husband filed 11 December 2019
·Financial Statement of the Husband filed 11 December 2019
·Affidavit of the Husband filed 26 November 2022
·Financial statement of the Husband filed 27 November 2022
·Affidavit of Mr Z filed 2 March 2021
·Affidavit of the Husband’s father filed second of March 2021
·Outline of case filed 2 December 2020
·Addendum re: Distribution of proceeds from FMH filed 26 July 2021
·Amended written closing submissions and amended orders sought filed on 26 July 2021.
The Husband’s Amended Written Closing Submissions sought permission, within the document, to rely on that document, rather than the Written Submission filed on 14 July 2021 and for the length of the document to exceed the ordered limit of 10 pages. I will accept the later amended document as the Husband’s closing submission. In that document he also sought permission to file the Wife’s tax returns from her country of origin. The inclusion was objected to and, although the Wife was questioned about the documents, I will not grant leave for those documents to be tendered into evidence because;
(a)The interpretation of a foreign country tax document and the tax law of a foreign country must be given by expert evidence rather than the inexpert opinion of a party or to just leave it to the Judge to sort out;
(b)I do not understand how those returns would assist me resolve a relevant dispute; and
(c)In a case said to be of two days, after six days of evidence and written submissions, for documents to be tendered by the Husband, in written closing address is oppressive to the Wife and maybe prejudicial to her.
The Husband’s outline of case also purported to the rely upon the following documents but the Husband’s counsel sensibly did not pursue such reliance, and I did not read or have regard to the following documents.
·Notice of Risk filed on 11 December 2019
·Interim Order dated 8 July 2020
·Mediation Position Paper dated 20 August 2020
The Wife relied upon the following documents:
·Amended Response filed 26 November 2020
·Financial statement filed 26 November 2020
·Affidavit of the Wife filed 26 November 2020
·Outline of case filed 26 November 2020
·Written submissions of final address dated 23 June 2021
·Written submissions in reply to Husband’s written submissions and orders sought documents both filed on 2 August 2021.
I also, with notice to the parties and without objection (TP 251), had regard to the Wife’s earlier affidavit to ascertain how early in the proceedings the Wife raised the issue of the parties funds being paid to the Company and the extent to which that was responded to, or dealt with in evidence.
Exhibits tendered
The exhibits tendered during the hearing were as follows:
Exhibit No: Description: 3 & 4 December 2020 H1 Further evidence 4 December 2020 H2 Separation Credit Cards H3 [Bank1] Statements x 2 (referred to in [8] of submissions) H4 Current balance Credit cards (referred to at [9] of submissions) H5 Statement of legal fees H6 Correspondence (2 June 2021) is part of this bundle H7 Red Book searches H8 Ledger of funds held in trust W1 [Bank 2] Line of Credit 29/10/18 to 29/11/18 W2 [Bank3] Statements 4 & 5 March 2021 W3 [Bank 4] Bank Statements W4 [Bank 4] Bank Statements showing $700 direct credits H9 Formal loan agreement – ‘the Other Company’ H10 The better copy of exhibit H9 W5 [Bank 3] Bank statements from period 9 August 18 – 9 November 18 16 March 2021 H11 Document shown to Wife that she does not recall H12 Bundle of financial statements of ‘the Other Company’ H13 Bank J Account Summary Wednesday 19 May 2021 (Subpoena Hearing) H14 Applicant Husband’s written submissions W6 Respondent Wife’s written submissions including index Wednesday 2 June 2021 W7 Pages 104/5 – 108/9 loan application 2008 W8 Photos only of the pieces of jewellery W9 Pages 66/7 – 103/4 Company K subpoena W10 Pages 161/2 - 183/4 [Bank 5] Credit Card Statements (overlaps with H2) W11 Pages 16/17 – 19/20 [Bank 6] loan application W12 Pages 20/1 – 27/8 [Bank 7] Home loan W13 Pages 42 – 49 [Bank 2] W14 Pages 50 – 52 26 April 2021 matrimonial home settlement statements W15 Pages 61 & 62 [Bank 8] account April and May 2021. H15 Husband Asset Pool – shown to Wife in cross examination. W16 Tender bundle of documents provided by Wife pursuant to 26 July 2021 orders.
Applicable law
Stanford v Stanford
In the High Court of Australia case of Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518 (‘Stanford’) the majority stated some fundamental propositions about section 79 Family Law Act proceedings.
In Stanford the essential issue was whether it was just and equitable to make any property order at all, in circumstances where the consortium vitae or marriage relationship had not broken down by way of a separation. The parties had become physically separated due to the ill-health of one of them with that party being in residential care and the other remaining in the matrimonial home. The proceedings for the party in ill-health were conducted by a case guardian who was also the beneficiary under the will of that party.
The Family Court of Western Australia had made an order for a property settlement that would have necessitated the sale of the former matrimonial home where the Husband continued to reside. For 37 years prior to the Wife moving to a nursing home, the parties had made their matrimonial home in that house registered in the Husband's name.
The Wife’s expenses in accommodation were being met and she had the benefit of a sum set aside in the event she needed anything further. It was the second marriage for both of the parties. The Wife's case guardian was a daughter from her previous marriage. The Husband appealed to the Full Court of the Family Court of Australia and before the conclusion of that appeal the Wife died.
The High Court dismissed the argument that there was no power, in the circumstances, to make a property settlement order. The case turned on whether, considering section 79(2) of the Act, it was just and equitable to make a property settlement order at all, and whether section 79(8) of the Act, which relates to the continuation of proceedings after the death of the parties, had been complied with.
The High Court varied the order of the Full Court and found that in the circumstances it was not just and equitable that a property settlement or property alteration order be made at all (and also that section 79(8) of the Act had not been complied with). This was so despite 37 years of marriage and contributions by the Wife. Section 79(4) contributions, even 37 years of it, was not to be conflated with the section 79(2) “just and equitable” requirement but should be considered separately and first. The result of the High Court's order was that the property settlement order as originally made was dismissed with costs.
Apart from the general observations about section 79 the High Court also observed that it should not be concluded that the making of an order is just and equitable only because of, or by reference to, the matters in section 79 without a separate consideration of section 79(2).
The majority observed at [37]:
[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... 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.
The majority continued at [41-42]:
[41]...The fundamental propositions that have been identified require a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interest during the continuance of the marriage.
[42]In many cases where an application is made for property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice by made by one or both of the parties, the Husband and Wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the Husband and the Wife...
In this case, it is common ground that the parties no longer have the common use of the major asset of the parties, the jointly owned FMH.
In addition to those considerations, each party here contends that it is just and equitable that I make section 79(4) property alteration orders. Because the parties no longer have the common use of property, as they did during the marriage, and because each contends for section 79 orders, I find that it is just and equitable to make property alteration orders in this case.
In Stanford the High Court did not go on to comment upon how section 79(4) should be applied where it was just and equitable that a property alteration or settlement order be made. Stanford was not concerned with the nuts and bolts of how section 79(4) was to be applied in the ordinary run of cases, to the extent there is such a thing.
In Stanford nondisclosure or false evidence of a parties financial circumstances was not an issue. Stanford does not touch upon whether it is just and equitable to alter property interests in favour of the non-disclosing party or a party giving false evidence of his or her financial position.
The Preferred Approach
In Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932 (‘Keskin’) the Full Court, Strickland, Kent & Austin JJ, at [44] approved what was the age old and pre-Stanford “preferred approach” as to the how the nuts and bolts of section 79(4) fitted together:
[44]In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) [2003] FamCA 395; (2003) FLC 93-143 at [39] the Full Court, in setting out what the case law revealed as the “preferred approach” to the determination of an application under s 79 of the Act, referred to four inter-related steps, including that “the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties”. The Full Court did not purport to elevate the preferred approach as being mandatory, as was observed by a later Full Court in Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 at [61]- [63], [72]. However, adoption of that preferred approach is a means by which many of the mandatory factors in s 75(2) of the Act, in particular paragraph (b) – the income, property and financial resources of each of the parties; paragraph (ha) – ability of a creditor to recover debt; paragraph (n) – the terms of any proposed order under s 79 of the Act; can be considered, as these must be considered, in determining any adjustment pursuant to s 75(2) of the Act. Conversely, if the preferred approach is not adopted there must be a means discernible from the reasons to identify that these relevant mandatory s 75(2) factors have been considered, and how they have been brought into account, in the making of any s 75(2) adjustment...
That preferred approach set out at [39] of Hickey and Hickey and the Attorney-General [2003] FamCA 395; (2003) FLC 93-143 (‘Hickey’) is as follows (citations omitted):
[39]The case law reveals that there is a preferred approach to the determination of an application pursuant to the provisions of section 79. That approach involves four interrelated steps. Firstly, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of hearing. Secondly the court should identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b) & (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly the court should identify and assess the relevant matters referred to in section 79(4) (d), (e), (f) & (g) (“the other factors”) including, because of section 79(4), the matters referred to in section 75(2) so far as they are relevant and determine the adjustment study (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
[Citations omitted]
Lest it be said there is a conflict between the High Court’s disavowal of “entitlement” to a section 79 order by mere separation and/or section 79(4) contribution on the one hand, and the use of the word “entitlements” in the Hickey passage cited above. I regard the use of that word in the above context as synonymous with “assessment.” I will have regard to what I find to be the contribution based “assessment” rather than “entitlement”.
Legislative provisions
In this case I am to apply sections 79(2), 79(4) and 75(2) of the Act. Those sections are as follows:
S 79 Alteration of property interests
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
S 75 Matters to be taken into consideration in relation to spousal maintenance
…
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and\
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
Standard of proof and burden of proof
In these reasons, statements of fact are findings of fact. Findings are made on the balance of probabilities. I apply section 140 of the Evidence Act 1995 (Cth) ('the Evidence Act') which states as follows:
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.
The burden of proof rests on the party alleging the particular fact in issue.
Witnesses: credit & reliability
Fox v Percy (2003) 214 CLR 118 (‘Fox v Percy’) is a High Court case concerning the skid marks of a Kombi van on the correct side of the road. The skid marks of some 50 metres were incontrovertibly and indisputably in evidence before the trial judge and they demonstrated that at all material times, the Kombi van had been on its correct side of the road, not the wrong side as found at first instance by reliance upon the credit of witnesses.
When discussing the drawing of conclusions about truthfulness and reliability solely or mainly from the appearance of the witnesses, the plurality observed:
[31]In recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events…
[Citations omitted]
In this judgment, I apply the advice of the High Court of that part of Fox v Percy.
The Husband and the Wife were both cross-examined. The hearing also included cross-examination of Mr Z (the Husband’s accountant) and the Husband’s father.
That part of the hearing heard by electronic means did not interfere with my ability to observe witnesses and their demeanour. In this case, it is more appropriate to deal with credibility of witnesses after describing significant events.
chronology of some significant events
The parties commenced cohabitation, I find, in 2006 when the Wife moved from overseas to Melbourne. The Wife then owned a dwelling overseas and some Company H shares held by a broker or share trading facility. At all material times the Husband was employed by or in the company or business owned by his father and will be referred to in these reasons as ‘the Company’. At all material times the Wife was in paid employment save for short periods approximate to the birth of the children.
The Husband’s son from his first relationship (‘child X’) was about two years old when the parties commenced cohabitation in 2006. It was not disputed that in her role as homemaker, the Wife played a significant role in the care of Child X when that child spent time with the Husband.
The parties married, on the rare common ground date, in 2007.
The other loan
The Husband finalised the financial relationship with child X’s mother some time in 2006, 2007 or 2008. The evidence is very vague. The Husband retained a dwelling in that arrangement or settlement, but was required to make a payment to his former partner and also incurred legal fees that were paid. At the time of that settlement the Husband received assistance from his parents or at least his father, but there is only little evidence before me as to the extent of that assistance. It is not clear on the evidence whether the assistance was for the purpose of the payment to the former partner or for the payment of legal fees or both. There was no mention of this loan in the Husband’s evidence-in-chief or his father’s.
The Husband’s evidence about this other loan arose in cross-examination when he was challenged that the alleged $400,000 he said he contributed to the FMH must have been reduced because of the need to payout his former partner, the mother of child X. In that context his evidence was as follows on day two 4 December 2020 (TP169):
MR MARCHETTI: You see, the truth is, though, that your financial statement is not to accurate, is it?---Why?
Well, you haven’t set out the loans that you – your father provided to you in relation to your first wife. Correct?---No. No.
Well, you haven’t. So that’s not accurate?---That was a forgotten situation and I’ve spoken to my father since, who says that it’s .....
So sorry, you’ve spoken to your father? What? Today?---I spoke to my father. Am I not allowed - - -
HIS HONOUR: Today? No, the question was, “have you spoken to your father today”?--- - - - Yes, I did.
MR MARCHETTI: About your evidence?---No.
Well, it has to be about your evidence?---No. About the loan.
That’s your evidence, isn’t it, sir?---Yes, it is.
Yes. What other helpful suggestions did your father give you?
HIS HONOUR: I think you’ve got to ask him the question without the comment within it, Mr Marchetti.
MR MARCHETTI: Sorry. I will ask .....
So what did you specifically say to your father?---When I separated from [previous partner] and he leaved me the money to pay for the – what do you call it? The legal fees and the balance to pay her out, is that something that you would want back? And he said no.
So it’s a gift, back then?---Well, no. It’s the – on his case it’s not a gift; it’s forgiving a loan.
The Husband’s father’s evidence about that other loan on 5 March 2021 was as follows:
MR MARCHETI: You have also assisted your son when he had to pay out his first wife in her settlement, didn’t you?---I don’t recall. I can’t recall that.
Well, his evidence is that you provided money - - -?---.....
- - - certainly for legal fees?---Possibly.
And possibly to pay out or to top up whatever payment was due to his first wife?---Possibly. I – I can’t recall.
At about 2006/2007/2008, the Husband sold the dwelling he had retained following the finalisation of the financial aspect of his previous relationship and at about this time the parties purchased the FMH in joint names.
It is not disputed that around the time of the purchase of the FMH the Wife sold her dwelling that she owned overseas but it is disputed whether she had any equity in the property. The Wife asserts she contributed about $60,000 to the purchase and the Husband asserts she contributed no capital at all. The Husband asserts he contributed $400,000 from his pre-relationship dwelling proceeds of sale to the purchase of the FMH. The Wife asserts that she recalls at the time that the Husband contributed $250,000 not $400,000. The parties borrowed substantial funds to assist with the purchase of the FMH.
The parties applied for mortgage finance to purchase the FMH on about 6 February 2008, and a “Loan Application Form” dated 6 February 2008 became exhibit W7. This pro forma document has some information in the Wife’s handwriting and most typed in. The thrust of the Wife’s evidence about the document was that the Husband was responsible for arranging finance and the completion of the document. That assertion was not in dispute. The Wife asserted that when asked to sign the document by the Husband she did so without checking all of the information in it. The Husband relies upon the document to corroborate his assertions:
(a) That he brought in about $400,000 of equity and/or “sale proceeds” (exhibit W7 page 106) in his former property; and
(b) That the Wife did not bring in any equity from her property in country A.
The Loan Application is an interesting document. The Husband’s father is the witness to the parties’ signatures. It does not describe or refer to the Wife’s property in country A at all in the table of assets and liabilities. It asserts that both the Husband and Wife had resided in their then current address in a Melbourne suburb for four years (typed in), i.e. since early 2004. This cannot be correct as the Wife moved to Australia and commenced cohabitation with the Husband in 2006. The Husband, by inference, asserted cohabitation from marriage in 2007. The document asserts that both parties worked “Full-Time” for the company, the Husband for 12 years and the Wife for 1 ½ years. This information was not correct. Neither party suggested that the Wife ever worked for the company and the Wife’s account of her employment did not include working for the company, ever or at all, and was not challenged.
The contact phone number for the employer’s contact (employer of both parties) was given as the Husband’s father. Notwithstanding he witnessed the document there is no evidence he read or knew of the contents save for the inference, if that was his phone number, that he would have known of the incorrect statement about the Wife’s employment as the purpose of the document was that the Husband’s father would confirm, if required, employment details. This was not put to any witness and so I do not draw that inference. But the document (exhibit W7) contains at least some incorrect information that would have been known to be incorrect to the Husband and, if she read it, the Wife. This reduces the confidence I have in the reliability of the document.
The parties’ eldest L was born shortly after the loan application and purchase of the FMH, in 2008.
From when the Husband’s child X was five years old, hence from about 2009, he lived week about between his parents. It was not disputed that the Wife played a significant role as homemaker and caregiver for child X, and in particular during the Husband’s frequent travel overseas. That caregiving role continued until the middle of 2019, about 10 years later.
It is not disputed that the Wife always applied her salary or wages to the parties’ joint account, and that the Husband paid or applied part of his salary or wages to the parties’ joint account, at least at times. In 2012 the Wife was made redundant, receiving $20,000 that she paid to the joint account on 5 May 2012.
Also in 2012 the parties’ second child M was born.
According to the Husband and his father, when cross-examined, it was in 2015 (TP 226-227 & TP 233) that the Husband commenced to receive the regular payments of $1,312, usually weekly, from his father and/or the Company. It was asserted that these payments were not income from his employment with the Company but were a “loan”. The Husband’s father, in cross-examination (TP317) agreed that the $1,312 had been paid to the Husband “on and off but mostly on” since 2015. In 2015 the parties’ children were then 8 and 5 and child X was about 11. There is no evidence as to the terms of the loan or the amounts paid in any year save for a snapshot of 39 weeks over 2018/9 (exhibit W5). The fact of usually weekly payments from 2015 was not challenged once evidence of the time such payments commenced was given in cross-examination. I accept that those payments commenced in 2015 as the Husband and his father asserted in oral evidence.
The Husband’s father’s evidence about the $1,312 usually weekly, when cross-examined, included the following:
MR MARCHETTI: That you have provided weekly sums to him since 2015?---Not all – not all the way, no. Sometimes when money was available to me - - -
Okay?--- - - - I did. When it wasn’t, I didn’t.
Certainly in the currency of since January last year, January of 2020, you have provided a sum of $1312.31 into [the Husband’s] account?---I’m not sure of the exact amount. The accountant does that. But I’ve told them to pay whatever sum they had available at the time, pay it. I said, “Just give it to him.”
Well, each and every week on there there seems to be the sum of $1312.31 deposited into that account?---Yes.
Does that mean that you are aware each and every week of that sum being available?---I’m aware that they are paying him some money and that - - -
That sum?---That is in the – in the ledger of what is loaned to him by me. Because the company owes me money that I’ve lent the company time and time again. Company owes me money. So that money, instead of coming to me, it has gone to [the Husband]. But it’s – it’s repaying my debt. The company is repaying my debt. Before I can loan the money to [the Husband] or [Husband’s sister] or whoever I see fit.
So am I understanding this correctly. It’s a capital repayment then to you?---What?
It’s a repayment to you of debts?---The company is repaying debt to me.
Yes. And you’re passing it on to [the Husband]?---And I’m loaning it to [the Husband].
After some period of this transfer of $1,312 usually weekly, The husband asserts that on or about 19 December 2015 the Husband and Wife and the Husband’s parents executed a loan agreement, in the presence of the Husband’s father and sister, which asserted that $80,000 was lent to the Husband and Wife to be repaid on demand. This was corroborated by his father who was a witness on affidavit and also cross-examined. A document purporting to be that loan agreement was tendered into evidence and a copy was exhibited to the Husband’s Trial affidavit. The Wife denied ever signing the document. No handwriting analysis was in evidence by any expert witness. The Wife acknowledged that $80,000 was paid to the mortgage account of the Husband and her but asserts that the $80,000 was a gift.
On 29 December 2015, $80,000 was banked to the account of the Husband and Wife and was described in the bank statement as “Repayment” (annexure 10 of affidavit filed 26 November 2021, page 52 of 81). It is common ground that this loan or gift, or loan that will not be called in, or whatever it was, was never mentioned again until shortly after separation when referred to in an email from the Husband’s father dated 22 November 2019 when repayment of the $80,000 was demanded (annexure -1 of affidavit filed 2 March 2021, page 4 of 16). There was no evidence about why a deposit of funds from a loan was described at the time as “Repayment”.
In 2016 the Wife’s redundancy payment from Employer N of $38,000 was applied to the parties’ joint purposes. Also in 2016 the Husband told the Wife that the parties needed to refinance their mortgage and arrange, or rearrange, a line of credit over the FMH and it was common ground that occurred.
Transfers to the Company from 2016
The Wife’s evidence, which on this aspect was not contested, alleges that the Husband frequently accessed the parties’ line of credit account secured on the FMH and credit cards and paid Company business expenses or transferred substantial sums of money to the Company, and not for any personal purpose of the parties. It was not contested that the credit cards were then repaid from the parties’ joint account into which the Wife paid her salary.
The earliest such transactions identified in evidence are in 2016 where $4,136 was paid from the Husband’s credit cards on Company travel expense. The same occurred in 2017 in the sum of $9,708 (annexure 11 of affidavit filed 26 November 2021, page 54 of 81). The Husband’s credit card was reimbursed from the parties’ joint account/s. It was not disputed that those transactions occurred.
The 2018 advances
On 9 and 17 July 2018 the sums of $4,500 and $15,774.90 were transferred from the line of credit account for Company business expenses (annexure 12 of affidavit filed 26 November 2021, page 60 of 81). It was not contested those transactions occurred.
The earliest very large transaction transferring substantial sums to the Company or for Company purposes from the parties’ line of credit (secured on the FMH) identified and accounted for by the Husband, is six weeks later, on 27 August 2018 in the sum of $120,028. The Husband alleges that in a very general way, in August 2018, the Wife was informed that such transactions would or could occur and relies on the evidence of his friend Mr Z to corroborate that general assertion. The Wife asserts she only became aware of the practise of the Husband so paying Company expenses or transferring funds to the Company in April 2019, that is, shortly before separation.
The 20 August 2020 reconciliation of money due from the Company
In the course of and for the purpose of this litigation, on 20 August 2020 (and only four months prior to the first day of the Final hearing), the Husband, not the Company, produced and disclosed a document that purported to show the transactions back and forth between the parties’ line of credit and credit cards and the Company and headed “Loans to E Pty Ltd” from August 2018. The earliest transaction identified in that document (annexure 13 of affidavit filed 26 November 2021, page 62 of 81) is the 27 August 2018, $120,028 transaction (see above). That reconciliation did not refer to the two earlier transfers that occurred six weeks earlier. That reconciliation did not refer to the transactions described in the -11 summary and at [44] and [46] of the Wife’s affidavit of evidence-in-chief.
Mr Z asserts he heard, and can remember, a conversation between the Husband and Wife about the Company’s need for money in August 2018, i.e. just before the date of the first transaction identified by the Husband in -13 on 20 August 2018, the $120,028. I will deal with Mr Z’s evidence later.
It is not contested that while all these transactions are occurring the Husband in still receiving, from 2015, usually weekly, the sum of $1,312. It is apparent that stream of payments is not declared as income by the Husband for taxation or child support purposes. That is consistent with the advances being a loan not income. The Husband alleges that these payments are a loan to him, not income. No table or reconciliation of these “loan” funds and the other funds paid on behalf of, of direct to, the Company was put in evidence by the Husband. The interaction of the $1,312 usually weekly stream of payments from 2015, to the Husband from the Company or his father, with the payments from the parties’ line of credit and/or credit cards, if any, was never explained or exposed in evidence despite the Husband being cross examined about the $1,312.
The end result of the 22 transactions back and forth described in the Husband’s document -13 “Loans to E Pty Ltd” is that as at 10 December 2019 the Company owes the parties at least $117,362. The Husband’s father in his affidavit filed on 2 March 2021 (that is after the first two days of the Final hearing) and at [9] asserts that between August 2018 and May 2019 the parties lent the company the sum of $145,000 but does not provide details. I will deal with his evidence later.
I do not accept, on the balance of probabilities, that the -13 “Loans to E Pty Ltd” document is a full and accurate account of the extent of funds from the parties’ resources paid to or on behalf of the Company. But as at 10 December 2019, the last date in -13, I accept the Company owed the parties no less than $117,362.
The Company H Shares saga: late 2018 to August 2019
At all material times the Wife’s sharebroker in country A (‘A Trader’) held the Wife’s Company H shares. On 6 October 2018 A Trader emailed the Wife (exhibit W9 page 97) and advised:
We want to let you know that we no longer offer brokerage services to clients located in certain foreign countries. Our records indicate that you reside or have citizenship in one of those identified foreign countries.
Unfortunately, this means that we’ve had to close your account ending in […]01, except for liquidating (closing) transactions. You will no longer have online access to your account, so you will have to make these transactions by calling us to speak with a (A Trader) Associate. You will not be able to purchase new securities or make deposits into the account any opening orders (orders to establish new positions) will be cancelled.
If the address currently listed on your account is correct:
You will need to take action on your account by (5 December 2018). You can either:
-Transfer your account to another firm…
OR
-liquidate your account… by calling (A Trader)
Important: If you have not initiated the account transfer or liquidation process by 5 December 2018, we will need to liquidate your account for you, then mail a check for your account balance to your address of record.
…
The Wife did not respond to that email. I am not satisfied that she was aware of it at the time it was sent. It appears that as identified in the email A Trader went ahead and liquidated the Wife’s shares without further notice to her. I infer from the apparent logic of events, and it appears not to be in dispute, that on about 5 December 2019 A Trader did “liquidate” the Wife’s Company Hs shares.
Having liquidated the Wife’s shares without her consent, A Trader did not send any further communication to the Wife until 18 December 2018 when, and apparently unaware of the irony of the jargon of corporate speak stated (exhibit W9 page 75) as follows:
Thank you for choosing (A Trader) to serve your brokerage and investment needs. To reinforce our commitment to providing an exceptional brokerage experience, (‘A Trader’) is dedicated to ensuring all aspects of your trading experience are within the scope of our business model. This means addressing specific concerns when necessary. The use of your a Trader accounts does not appear to fall within the expected range of activity for a brokerage account. In order to gain a better understanding of your account activity, please respond to this letter providing the following information at your earliest convenience:
- State the country you are in. If you’re in a foreign country, please state the reason for the visit and the length of stay
It is essential that we receive this information as soon as possible.
Thank you for your cooperation with this matter.
Sincerely,
[D]
Client Account Services
…
We’re Here to Help
…
(Punctuation as in original)
On 21 January 2020 the Wife emailed A Trader (exhibit W9) and acknowledged her account had been liquidated in December 2018 and sought information as to how many shares she held in May 2007 and in October 2018 and the share price at those times and requested dividend statements.
On 11 February 2019 the Wife emailed A Trader and stated (exhibit W9 page 72) as follows:
Hi,
Thanks social team for responding. My account number is #[…]1.
I changed my address to Australian address a few months ago with a very friendly team member over the phone. I had [no] idea the repercussions that I would face - having my account immediately liquidated without my consent.
I have had this account for over 20 years - this is my [retirement]. I am in no position to pay tax and have faced subsequent losses given the [fluctuation] of the stock price of [the [Company H] shares].
I would like my stock reinstated as I NEVER consented nor was I made aware of any policy stating that A Trader had the right to act on my behalf.
I have considered taking this to the [Authority] however .. my first course of action is to get this rectified with [A Trader]. I have heard of this happening to other [country A] citizens living abroad after only 6 months and I find this action [reprehensible].
Please let me know the next course of action.
Thank you,
[Wife]
On 14 February 2019 Wife emailed A Trader and her email (exhibit W9 page 78) included the following:
… I have spoken [with] an associate last weekend who was to pass my case over to a [manager]. I am after [legislation], policy, documentation that confirms your process of liquidating a customer’s stocks without consent then mailing a paper check not even [by] registered mail. I would ideally like my stock reinstated. Thank you and I look forward to speaking soon…
A Trader replied that it would only deal with her by telephone because she was making inquiries of a closed account. The time zones between country A and the East Coast of Australia made connecting by telephone problematic. On 20 February 2019 following a telephone conversation at request by the Wife, the letter originally emailed on 5 October 2018 was re-sent. It is unlikely the Wife requested that the email be re-sent to her if she had already received it back on or about 5 October 2018.
The Wife’s request for reinstatement of shares was not specifically responded to. On 13 March 2019 the Wife emailed A Trader again (exhibit W9 page 86) as follows:
Hi…,
As you can imagine, I have been quite distressed by the sale of my [[Company H]] shares.
I would like to cancel the cheque if possible and have the funds moved across into an account.
I need to set this account up and I am not sure how long this may take as I need to find a resource to help with this process.
My question is, how long can I keep the money in the account or is this even an option? Also, how long is the cheque valid for if the first option is not valid?
The Husband alleges that prior to separation he became aware of the liquidation by the broker in country A of the Wife’s Company H shares. He asserts, without reference to which particular conversation or what was actually said, that he demanded the Wife reinstate the shares. The Wife denies there was any such demand and I am not satisfied, on the balance of probabilities, that the Husband did make any such demand. Whether or not he did makes little difference to my determination of the Company H shares controversy.
There is no suggestion the Wife’s statements or requests to A Trader were other than genuine.
By 19 August 2019 the Wife had abandoned her attempt to have the shares reinstated. At her request on or about that day A Trader paid the proceeds of the liquidation of the Wife’s shares to an account of her parents in country A in the currency of that country and it is common ground that sum should be regarded as $213,415.
Payments to the Company continue
[10] Numbering from Husband’s asset and liability table in amended written final address
[11] To “equalise” superannuation a payment split of $32,750 would be required.
Step Two: Contribution
I must take into account all of the parties disparate contributions.
I am satisfied that during the relationship the Wife applied the whole of her income to the joint account and/or the purposes of the relationship. The Wife’s Kennon claim was not pursued.
The Husband’s child X was born in 2004, and from 2009 when child X was about five years old, for the next 10 years lived in an equal shared care regime. The Wife played a significant role as homemaker and carer for child X, and that must be regarded as a contribution by the Wife and the contribution by the Husband to his own child is not counted: see Robb & Robb (1995) FLC 92-555.
I take into account the statement or guideline in Parshen & Parshen (1996) FLC 92-720 at 83,665 where the Full Court observed:
… In our view, in the absence of evidence to the contrary, it should be inferred in proceedings pursuant to the provisions of s 79 that moneys howsoever received by a party during the course of the parties' cohabitation, are used by that party for the benefit of the family unit. Such moneys, in those circumstances, thus constitute a financial contribution by the party who received the moneys.
Parshen was approved by the Full Court at [29] of Harrington (2007) FLC 93-317 and by the Full Court at [51] in Halinan & Witynski [1999] FamCA 1127. In Mabb & Mabb (2020) FLC 93-947, the Full Court described the presumed intention of the donor in a Kessey gift or inheritance case as an “evidentiary device” and that such assumption can be rebutted by evidence of actual intention. I regard the statement in Parshen as the equivalent of a Kessey type “evidentiary device”.
In regard to the Husband’s contribution as income earner, homemaker and parent, the evidence rebuts, and rebuts convincingly, the Parshen inference that the Husband applied the whole of his income for the purposes of the relationship or marriage. To an unknown extent, the Husband’s efforts and skill as CEO of the Company was applied, by that part of his income applied to the relationship, to the purposes of the marriage relationship.
In this regard the Wife made a greater contribution than he did. This was not because she earned more, although she may have, or she may not have, but because the whole of her income was applied to the purposes of the relationship via the joint account.
Although usually working in full-time employment, the Wife undertook a greater role in homemaking and care of the children because of the extent to which the Husband travelled overseas for his employment. The family also and the assistance of an au pair.
The Husband made an initial contribution by bringing in some part of the equity that he had in his former dwelling to the purchase of the FMH. He asserts that it was $400,000. I am unable to accept the Husband’s evidence. The Wife asserts that it was $250,000, but I am not satisfied that her assertion of this amount, apparently from memory, is sufficiently reliable for me to make that finding on the balance of probabilities. Hence I find, because of the boundaries of the parties dispute on this point, that the Husband contributed somewhere between $400,000 and $250,000 from the sale proceeds of his former dwelling.
I accept the Wife’s evidence that she made a contribution from the sale proceeds of her former dwelling in country A. However, I am not satisfied on the balance of probabilities that the Wife made an initial contribution of $60,000 in that manner.
In the end I am satisfied that the Husband made a greater initial contribution from the equity in his previously owned dwelling than the Wife did from the equity in her previously owned dwelling.
I am satisfied that the Husband has made the further contribution of his parents, or the Other Company transferring $80,000 to the parties in December 2015. I am unable to give that fact and deposit the weight that it might otherwise have because I am not satisfied, on the balance of probabilities, of what the Husband’s actual financial relationship and standing with the Company or with the Other Company was at any point with the moneys going back and forth.
When weighing all of the contributions of the Husband, that shipload of disparate contributions runs aground on, or collides with, the sandbar or iceberg of the opacity of the Husband’s financial relationship with his father and the Company. In the circumstances where I will regard the sum of $117,362 as a debt due from the Company to the parties, care must be taken to ensure that the Husband’s contributions are given due regard notwithstanding the opacity of that relationship.
However, I am not satisfied on the balance of probabilities that that sum, being a balance of debits and credits, is the total amount of funds to the Company, not repaid, from the parties’ resources. In particular I have taken into account the line of credit and the parties’ credit cards, that went to the Company from the parties resources while at the same time, the Wife worked hard in paid and unpaid employment in the home, including caring for the Husband’s child X, and applying all of her substantial income to the purpose of the relationship. I am not satisfied that the Husband applied the whole of his income from his employment with the Company for the purposes of the relationship the parties.
The Wife brought in the Company H shares and I did not have any reliable evidence as to the value and number of those shares as at the commencement of cohabitation. They ultimately brought in about $213,000 when liquidated, and smaller amounts from time to time when the Wife sold small parcels of shares to fund holidays and expenditure in country A.
I also find that the Husband brought in greater superannuation than the Wife did. This is a consequence of his more years of working in Australia than the Wife. He asserted that he brought in $69,628 of superannuation. This was not challenged and is consistent with the logic of events. The Husband’s evidence as to superannuation is reliable when compared to his evidence about non-superannuation assets.
In the end I am satisfied that both parties made a substantial contribution over many years.
The Wife submits that I should divide the known assets of her asset pool, largely as I have found it, in the proportions of 55/45 of non-superannuation assets in the Husband’s favour and a 50/50 adjustment on superannuation, or 47/53 overall. How that percentage was arrived at by reference to the preferred 4 step approach was not described. I infer that this approach concedes a greater initial contribution by the Husband and does not contend for a section 75(2) adjustment in his favour. Implicit in this is that the Husband should be regarded as contributing about 20% (10/45) more than the Wife, or as contributing the first 10% overall with the balance equally.
In the Wife’s outline of case, the Wife sought an equalisation of the parties’ superannuation and in final address sought a superannuation payment split of about $17,250.
As requested, I have had regard to the assertions, really expressions of opinion, in the Husband’s affidavit filed 26 November 2021 at [37] & [38]. At [7] the Husband’s closing submissions the Husband submitted thus:
The wife has persistently failed to disclose documents requested by the husband or been selective in the documents provided. See paragraphs 37 and 38 of the husband’s trial affidavit filed on 26 November 2021. The husband was not challenged on this evidence. The obligation to make disclosure is a positive obligation and selective or “forgotten disclosure” is non-disclosure. The husband should be compensated for the wife’s failure to make full and frank disclosure:
a. What is meant by “full and frank disclosure” is set out at Rule 13.04 of the Family Law Rules 2004. It includes inter alia any “vested or contingent interest in property” and any “financial resource”.
b. It is submitted that the obligation to make full and frank disclosure places a positive obligation on the disclosing party and “not denying” fails to meet that obligation.
c. See Sewin & Cheals [2020] FamCA 820 (28 September 2020) at paragraph 74 for a useful summary of the Full Court decision in Tate & Tate (2000) FLC 93-047:
i. “discovery is a continuing process” (see Brambles Holdings Ltd v Trade Practices Commission (1983) 47 ALR 69)
ii. The Full Court in Oriolo v Oriolo (1985) FLC 91-653 (“Oriolo”) cited the decision of Lord Brandon in Livessey v Jenkins (1985) 1 All ER 106 at page 114: “….. unless a court is provided with correct, complete and up to date information on the matter to which …. it is required to have regard, it cannot lawfully or properly exercise its discretion …..”
iii. In Oriolo the Full Court also approved the statement of Smithers J in Briese and Briese (1986) FLC 91-713 at 75,180:
“I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner”…. “The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, …” (emphasis added)
d. It is submitted that by failing to fully disclosure her financial circumstances the wife did mislead the court and this may impede the ability of the court to properly exercise it’s discretion.
e. In Kannis & Kannis (2002) FLC 93-135 the trial judge made an adjustment of 10% to the ascertained pool to allow for findings in relation to undisclosed assets. In Morrison & Morrison (1995) FLC 92-463 it was held by the Full Court that wilful non-disclosure by the husband amounted to a miscarriage of justice. In Weir & Weir (1993) FLC 92-338 the wife successfully appealed in relation to no costs order being made in her favour despite the husband’s deliberate non-disclosure.
I accept those broad statements of the law as to the duty of disclosure and the consequences of a breach of that duty. The Husband’s final submissions say that these principles apply to the Wife because she has not disclosed her financial position. I do not accept that submission. I find that those principles apply to the Husband and I am not satisfied, on the balance of probabilities, that the Husband has made a full and frank disclosure of the reality of his financial position and his financial contributions along the way. Because of this, I am unable to make a firm finding or assessment as to the parties’ contribution in percentage terms at the end of the second step of the preferred approach as is usually made. However, I do find that both parties have made a substantial contribution over many years and overall, on the balance of probabilities, I do not find that either party has made a significantly greater contribution than the other. I do accept the Wife’s position of the Husband contributing some more overall as correct and as just and equitable.
Step Three: Section 75(2) factors
The parties have the shared care of their two children, although the Wife cares for the children for a little longer time than the Husband.
Both parties are engaged in and qualified for remunerative employment. The Wife’s taxable income is greater than the Husband’s, but I am unable to find on the balance of probabilities what the Husband’s real income is. I do not accept, on the balance of probabilities, that the $700 per week and the $1,312 per week are not income from the Husband’s employment. I am also unable to find, on the balance of probabilities, that those sums are or should be regarded as taxable income of the Husband, and if so whether that should be regarded as gross or net of tax income.
The Wife has some jewellery of value. The Husband has a ring and watch or watches of some value.
In the circumstances of the limited factual findings I am able to make as to the Husband’s income, I do not find that it is appropriate or just and equitable to make any adjustment on account of the usual section 75(2) suspects or factors, that is (a) to (n), excepting (o).
I have considered whether, pursuant to the authorities about nondisclosure and section 75(2)(o), I should make an adjustment in the Wife’s favour. I take into account, pursuant to section 75(2)(o), that I am unable to find that the Husband has made a full and frank disclosure of his financial circumstances and that those circumstances are by the end of the trial still opaque, but that the Wife did apply the whole of her income and financial endeavours during the relationship to the purposes of the marriage. I have determined that I should and will do so but to a modest degree and not to any precise percentage as is the usual practice at this step three of the preferred approach.
Step Four: Conclusion, calculations and just and equitable order
I proceed on the basis that the Husband did bring in more superannuation than the Wife, $69,638 compared to nil. I also take account of the parties contributions pursuant to section 79(4) (a), (b) & (c) of the Act to the extent that I’m able to, and all of the evidence. In all the circumstances I do not find that it is just and equitable to make orders for a superannuation payment split to the effect of the $17,250 split of superannuation sought by the Wife in final address. This is a lessor sum than an “equalisation”.
The Wife’s case concluded on the basis of the non-superannuation assets as asserted by her should be divided in proportions of 45/55 in the Husband’s favour. The Wife in outline of case at the start of the case, sought what was in effect, a more generous distribution to her.
I conclude that in the end result the effect of the orders sought by the Wife (and after correcting arithmetic error) are just and equitable save for the superannuation payment split order will not be made.
Hence as to the non-superannuation assets the pool to the extent I can ascertain it is as follows:.
Total assets yet to be divided (in trust) 144,610 Total net assets & liabilities to be retained by Husband 345,362 Total net assets & liabilities to be retained by Wife 278,276 NET NON-SUPER ASSET POOL INCLUDING ADD BACKS 768,248 Husband’s Super Fund AE 293,500 Wife’s Super Fund AE 228,000 TOTAL SUPERANNUATION 521,500
Hence, to answer the question posed at the start of these reasons, the division of the parties’ assets and liabilities will be as follows.
·The Husband will receive and retain 55% of $768,248. That is, $422,536 less than the Husband’s ‘Keep’ of $345,362, and he should receive $77,174 or 53.37% of the remaining funds in trust.
·The Wife will receive and retain 45% of $768,248. That is, $345,711 less the Wife’s ‘Keep’ of $278,276, meaning she should receive $67,435 or 46.63 %, or the remaining funds in trust.
·Interest earned on those remaining funds should be regarded as received in those proportions.
I had contemplated making a superannuation payment split and asked the parties to advise of whether procedural fairness had been accorded to the Trustee. The Wife’s lawyer then emailed documents (that will be made exhibit W16) that showed procedural fairness had been provided back in 2020. But I have determined that to leave the parties superannuation in the existing proportions of roughly 44/56 is just and equitable. In the circumstances of the more reliable evidence as to the superannuation and the greater initial contribution of the Husband, I am not satisfied it is just and equitable to make a payment split order in the amount pressed ($17,250) or to line up superannuation with roughly the same percentage split of 45/44 of the known non-superannuation assets and liabilities ($6,450).
The orders will be released in draft as the orders pressed sought that both parties retain any joint bank account and I will hear from them as to that.
I certify that the preceding two hundred and seventy-eight (278) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 4 November 2022
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