Scanu and Scanu - [2004] FMCAfam 136

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SCANU & SCANU

[2004] FMCAfam 136

FAMILY LAW – PROPERTY – Contributions – loans – wife has asthma attack and suffers major brain damage – thereafter husband responsible for home, children, wife and earning an income – future needs – wife will never have paid employment – spousal maintenance – wife establishes need but fails to demonstrate husband has capacity to pay – alternate application for lump sum spouse maintenance – application for spouse maintenance dismissed.

Family Law Act 1975, ss.44(4)(b), 72, 74, 75, 79, 81
Child Support (Assessment) Act 1989
Evidence Act 1995 (Cth)

Lee Steere (1985) FLC 91-626
Ferraro (1993) FLC 92-335
Clauson (1995) FLC 92-593
Russell (1999) FLC 92-877
Bevan (1995) FLC 92-600
Townsend (1995) FLC 92-569
Jones v Dunkel (1959) 101 CLR
Ghazal v GIO (NSW) (1992) NSWLR 336
Scott and Scott (1994) FLC 92-477
Ellis v. Wallsend District Hospital (1989) Aust. Torts Reports 80-289
Biltoft (1995) FLC 92-614
Pierce (1999) FLC 92-844
Rainbird (1997) FLC 90-256
Gosper (1987) FLC 91-818
Kessey (1994) FLC 92-495
Pellegrino (1997) FLC 92-789
Tomassetti (2002) FLC 93-032

Applicant:

MAUREEN LEONIE SCANU

Respondent:

MARIOLINO SCANU

File No:

SYM2441 of 2000

Delivered on:

3 June 2004

Delivered at:

Wollongong

Hearing date:

30 October 2002 and 19 March 2004

Judgment of:

Ryan FM

REPRESENTATION

Counsel for the Applicant:

Mr J Miller

Solicitors for the Applicant:

Charles K Tsalidis

Counsel for the Respondent:

Mr W. Moss

Solicitors for the Respondent:

Verekers

ORDERS

Within eight weeks of the date of these orders the husband pay to the wife the sum of One hundred ninety one thousand nine hundred and thirty nine dollars ($191,939).
At the same time as the husband complies with order (1), he shall give the wife a discharge of any mortgage secured against the former matrimonial home in which the wife is jointly liable.
In the event the husband fails to comply with orders (1) or (2) the parties do all such acts and execute all such documents as may be required to effect a sale of the former matrimonial home situate and known as 17 Robinson Street, Wollongong in the State of New South Wales to be sold by private treaty at a price agreed upon between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee.
Upon the completion of the sale proceeds of the sale be applied as follows:
(a)To pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the matrimonial home.
(b)In discharge of any mortgage secured against the matrimonial home.
(c)Thirty five per cent of the balance to the wife.
(d)Balance then remaining to the husband from which he shall pay the wife an adjusting amount of $85,539.
In the event that the matrimonial home has not been sold by or before a date five (5) months from the date of these orders then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and pay all monies equally necessary to procure a sale by public auction of the matrimonial home upon the following terms:
(a)The auctioneer shall be a real estate agent;
(b)The reserve price shall, unless agreed upon by the parties, be as proposed by the auctioneer.
(c)That auction will take place within six (6) months of the husband failing to comply with order (1).
Each party has the right to bid at the auction.
In the event that either party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, then pursuant to section 106A, a Registrar or Deputy Registrar of the Federal Magistrates Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.
In the event that either party seeks to make an application for costs, the application must be listed within twenty-eight (28) days by arrangement with my associate.
All exhibits tendered in these proceedings shall be returned at the expiration of one calender month unless an appeal is lodged.
The solicitor who issued any subpoena collects that subpoenaed material and returns it to the owner within seven (7) days.
All outstanding applications are dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
WOLLONGONG

SYM2441 of 2000

MAUREEN LEONIE SCANU

Applicant

And

MARIOLINO SCANU

Respondent

REASONS FOR JUDGMENT

The proceedings

These are proceedings for the adjustment of property pursuant to s.79 of the Family Law Act 1975.

The application

Maureen Leonie Scanu (“the wife”) started the proceedings when she filed an application for final orders in the Family Court of Australia at Sydney on 29 June 1999. After the parties’ finalised parenting proceedings the matter remained in the Family Court of Australia and was called on for hearing on a number of occasions. In spite of numerous directions aimed at ensuring a timely disposition of the wife’s application for property orders and spousal maintenance, the wife did not prepare her case for hearing. Eventually, on 5 November 2001 the proceedings were transferred to the Federal Magistrates Court at Wollongong. Regrettably, the pattern of non-compliance with the court’s directions continued. Finally, Federal Magistrate Brewster ordered that there would be no further adjournments of the hearing granted to the wife. Nonetheless, when the matter was called on for hearing on 30 October 2002, the wife’s solicitor made yet another application to adjourn the hearing. This was to enable the wife to file updated material. The wife had filed nothing subsequent to 25 June 2000. Also, so that she could obtain valuations of the former matrimonial home and commercial premises in which the husband had an interest. The adjournment application was refused. Thus, on 30 October 2002 the court took evidence from the parties, the husband’s brother, Leo Scanu and his valuer Mr Bartlett. At the conclusion of Mr Bartlett’s evidence the wife’s solicitor made a further application to adjourn the hearing. Because Mr Bartlett’s opinion was partly based upon out-of-date land valuation information, this adjournment application succeeded. The wife’s solicitor was ordered to pay the respondent husband’s costs of $4,095 within eight weeks.
There then ensued a tortuous process of obtaining valuations and having the valuers confer pursuant to Part 15 Rule 9 of the Federal Magistrate Court Rules 2001. Because I did not want to run the risk that the court reconvene, but not be in a position to complete the evidence, I declined to allocate further hearing dates until the valuers had conferred. Thus, the matter resumed and was completed on 19 March 2004. At the resumed hearing, the wife was represented by counsel.
During his closing address the wife’s counsel submitted that the court should adjust the assets 40 per cent to the wife and the balance to the husband. In relation to the wife’s application for periodic spouse maintenance, he submitted that whilst his client had established a need for spouse maintenance the evidence did not demonstrate that the husband had the capacity to pay it. For the first time in the life of the proceedings, the wife’s case was presented in the alternative: that is if she could not succeed on her application for periodic spouse maintenance then the court would either order a lump sum payment or adjourn her application. The rationale for adjourning and not finalising the spouse maintenance claim was to preserve the wife’s entitlement to bring a further application for spouse maintenance. In relation to the alternate application for lump sum spouse maintenance, counsel was unable to quantify in what sum such an order was sought.
Mariolino Scanu (“the husband”) filed his response on 21 September 1999. During closing addresses his counsel indicated that he sought an outcome that gave him 70 per cent of the nett matrimonial assets and the wife 30 per cent. Any adjustment should be by way of an order that the husband pays the wife the monies to which she is entitled and the sale of the home ordered as a last resort.
In relation to the wife’s application for lump sum spouse maintenance the husband’s counsel submitted that it should be refused. As to the notion of preserving the wife’s entitlement to spouse maintenance it was submitted that for so long as the wife received Social Security s.44(4)(b) enabled her to bring this type of application as of right.

The evidence

The husband relied upon the following evidence:-
·His affidavit sworn 22 October 2002 and his oral testimony;
·His financial statement sworn 22 October 2002;
·Affidavit of Leo Scanu sworn 11 July 2000 and his oral testimony;
·Affidavit of William Bartlett sworn 23 October 2002 and his oral testimony.
The wife relied on the following evidence:-
·Her affidavit sworn 25 June 2000 and her oral testimony;
·Her financial statement sworn 9 June 2000.
During the adjournment the wife filed an affidavit by Hugo Zweep, a registered valuer who valued the former matrimonial home at 17 Robinson Street, Wollongong and commercial premises at 209 Berkeley Road, Unanderra. The husband filed an affidavit from John Dignan a real estate valuer who valued the same properties. When the hearing resumed the court was advised that the valuers had reached agreement as to the value of both properties.[1] Both parties accepted their valuer’s revised opinion and thus neither valuer gave evidence.
[1] Exhibit G
Both parties tendered documents that became exhibits.

The principal issues raised in the proceedings

The principal issues raised in the proceedings were these:
·Whether monies advanced by the husband’s father when the husband purchased the former matrimonial home were a loan or gift?
·Whether periodic payments totalling $57,000 advanced by the husband’s father were a loan or gift?
·If a loan, whether demand for its repayment was likely.
·The extent of the husband’s interest in F.M.Scanu Engineering Pty Limited.
·Whether it is likely that the wife will work again.

Short history

The husband was born on 1 August 1963 and is 40 years old.
The wife was born on 20 July 1964 and is nearly 40 years old.
The parties married on 2 November 1985. They did not cohabit prior to their marriage.
There are three children of the marriage. On 11 February 1986 their daughter Christina Eva Scanu was born. Christina is 18 years old. On 5 February 1988 their daughter Samantha Barbara Maria Scanu was born. Samantha is 16 years old. Their only son Francesco (Frank) Michael Scanu was born on 5 May 1989. Frank is 14 years old.
On 20 June 1990 the wife suffered a major asthma attack during which she was deprived of oxygen for between 4 and 5 minutes. As a consequence she suffered major brain damage. From the time of the attack until 14 January 1991 the wife was an in-patient in Wollongong Hospital.
On 14 January 1991 the wife was transferred from Wollongong Hospital to Coledale Hospital where she commenced intensive rehabilitation preparatory to returning home. Confined to a wheelchair the wife was finally discharged into her husband’s care in mid 1991.
In 1996 Homecare, which was provided primarily to assist the wife, ceased.
On 15 January 1999 the parties separated. Since then the children have lived with the father.
On 13 July 2000 a residence order was made in the husband’s favour.
On 20 December 2000 this court ordered a Decree Nisi, which decree became absolute 21 January 2001.

Chronology of relevant events

At the time of their marriage the wife was 21 years old and the husband was 22 years old.
At the commencement of cohabitation the wife owned a 1980 Mitsubishi Gallant worth approximately $3,000, she had savings of about $300 and household items worth about $1,000.
A few months prior to their marriage, the husband purchased 17 Robinson Street, Wollongong (“the former matrimonial home”) for $55,000. His parents gave him $10,000 towards the purchase of the home and his father loaned him an additional $10,000. He borrowed the balance of the purchase price from the State Bank at Warrawong. The husband owned two motor vehicles, a 1975 Mazda RX3 worth about $3,000 and a 1979 Holden Gemini worth approximately $2,500. The husband had a bedroom suite given to him by his parents which was worth about $1,000.
At the time of their marriage, the wife worked part time as a shop assistant at David Jones in Warrawong. The husband worked full time in his father’s business. He was also studying, and completed a mechanical engineering certificate in 1987.
Pregnant with Christina, the wife stopped work in October 1985. When Christina was six months old the wife returned to the paid work force. The wife worked from August 1986 until November 1987 at F M Scanu Engineering Pty Limited. She worked in the office between about 10.00 am and 4.00 pm five days per week. Whilst she was at work the husband’s mother, who lived above the industrial premises, cared for Christina.
In 1987 the husband’s parents made him a partner in F M Scanu Engineering P/L. He did not pay them any money in order to secure his interest in the partnership. The husband’s parents started their business in about 1979 in the Port Kembla inner harbour area. His parent’s purchased land at 209 Berkeley Road, Unanderra upon which they built industrial premises with a home upstairs. They contributed all funds used in the purchase. In 1991 the husband’s brothers Ugo and Leo joined the family business as equal partners. There are no other partners.
Between November 1987 and August 1988 the wife remained at home, during which time she cared for Christina and after February 1988, also Samantha. Once again she returned to work at F M Scanu Engineering, resuming work there in August 1988 which continued until February 1989. During this period the husband’s mother cared for Christina and Samantha.
From the age of 3 years the children attended pre-school three days a week.
Pregnant with Frank in February 1989 the wife stopped paid employment. The evidence is unclear whether the wife returned to work or thereafter was fully responsible for the children and the home.
Both parties agree that from the commencement of cohabitation until 21 June 1990 the wife was predominantly responsible for the care of the children and housework. When the wife was at work the husband’s mother was responsible for their care
On 21 June 1990 the wife suffered a severe spontaneous asthma attack. It is likely that during the attack she collapsed and struck her head on the ground. From that time and until 14 January 1991 she was an in patient at Wollongong Hospital. Initially in a coma, she required a tracheotomy to breathe. Upon regaining consciousness, the wife could not talk, had neither short nor long term memory, was unable to walk and unable to recognise the children. The wife worked hard with her treating neurologist, Dr Serisier, to regain her health. It appears that as she slowly became aware of the extent of her brain damage the wife became temperamental and angry with the children as well as others.
Between 14 January 1991 and July 1991 the wife was a patient at Coledale Hospital where she undertook intensive rehabilitation. Whilst a patient at Coledale Hospital she was allowed to return home during the day. When she went home she was always accompanied by at least one rehabilitation nurse. During this period the wife could not fully control her limbs and had poor balance.
When the wife was finally discharged from hospital she was in a wheelchair. During the twelve weeks prior to her final discharge the husband extended the home by adding an extra bedroom and increasing the size of the kitchen. The extensions enabled wheelchair access to the home and the wife to move about it in her wheelchair. For the two weeks immediately after the wife came home, her sister Danielle lived in. Homecare sent representatives daily for between 6-8 hours in order to care for the wife while the husband was at work to prepare meals and assist around the house. The husband continued work as best he could. He placed the two girls into childcare five days a week and often took the wife with him to the factory. When the husband took the wife to work his mother took care of her. Over the next two to three years the wife’s health improved and she was eventually able to take care of her own physical needs. Sadly she was never able to resume her role as home maker and parent to any real extent. From the time she was discharged from hospital and until separation the husband was overwhelmingly responsible for the care of the home, wife and children.
During 1992 and 1993 Homecare slowly reduced their assistance. By late 1993 rehabilitation nurses stopped attending the home. The wife tried valiantly to assume some responsibility for the household and childcare. Her mother Barbara Hazell came to the home each Saturday from 9.30 am until 4.30 pm to help the wife with the children. Homecare stopped coming altogether in February 1996.
Although she had tried as hard as she possibly could to resume her role as home maker and parent, the wife did not recover sufficiently to adequately care for the children. When Homecare stopped coming the husband arranged for friends, Marco Napoleoni and Michelle Miosge, to move into the home to assist him with the children. They lived in the former matrimonial home between about February and June 1996. After they moved out they continued to help the husband with the care of the children and would collect them after school as well as helping him by, for example, taking the children to doctors and other routine childcare. During the day the wife was at home alone. Her parents and sister came most days to keep her company and see that she was safe.
In 1996 the husband became involved in a project to build a self- generating power system. Together with other partners they purchased a shelf company Nusca Pty Ltd, which was used to promote the venture. The husband used F.M. Scanu Engineering P/L to design and engineer the prototype. As well as his original share in the company the husband paid $20,000 for an additional five per cent interest and transferred a partly restored Ferrari to acquire an additional interest. The husband contends that he contributed somewhere between $200,000 and $300,000 of F.M. Scanu Engineering P/L assets towards the venture. When the prototype failed the Nusca partners agreed that they could not afford the manufacture of a different prototype. Although he still hopes that he may be able to promote the venture, the husband accepts that the project has failed.
The husband contended that as a consequence of the failed venture he relinquished his interest in F.M. Scanu Engineering P/L and the Berkeley Road property. He is a registered proprietor of the Berkeley Road property. Mr Bartlett explained that the husband was participating in the partnership profits until the end of 30 June 1998. Thereafter, his capital account reflected his equity in the net assets of the partnership. From that date he has taken no drawings nor received profit distributions. The partners paid him as an employee of F.M. Scanu Engineering P/L. Although the husband made a different claim, his valuer made it clear that the husband remains a partner in partnership assets. The husband counsel conceded this point.
Since 1997 the husband’s father has paid the mortgage at $225 per week, in effect paying interest only.
From May 1998 the wife had no responsibility for the children’s care or the home.

The parties separated on 15 January 1999. At separation the husband and children moved to a friend’s home at Blackbutt. The wife returned to live with her parents at which point the husband and children returned to the family home. From this time the husband’s father has paid him $180 each week towards the children’s school fees and expenses.
Since separation the children have lived with the husband and had contact with the wife. The husband has supported the children without financial assistance from the wife. He continues to work at F.M. Scanu Engineering P/L.
Since April 2000 the husband has cohabited with Sharon Smith and her two children, Brittany aged 11 years and Blake aged 9 years.
The wife receives a disability pension and has not worked since separation.

Relevant law

The approach to the determination of an application under s.79 is well established by authority: See In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-593. The process involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in s.79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. The court must then evaluate the matters contained in s.75(2) insofar as they are relevant; any other order made under the Act affecting a party or child; and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide or might be liable to provide in the future for a child to the marriage.
In determining what order should be made under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so: s.79(2). It is the justice and equity of the actual orders that the court must consider: See Russell v Russell (1999) FLC 92-877. In relation to parenting orders, the court must make an order that will promote the best interests of the particular child.
The wife makes an application for spouse maintenance. In Bevan and Bevan (1995) FLC 92-600 the Full Court of the Family Court identified the process for assessing a claim for spouse maintenance. This requires:
"1. a threshold finding under s.72;
2. consideration of s.74 and s.75(2);
3. no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
4. discretion exercised in accordance with the provisions of s.74, with reasonableness in the circumstances" as the guiding principle."
A claim for spouse maintenance that is heard at the same time as an application for property adjustment adds an extra step to the process. The sequence of determining the applications is important and the property application must be determined before the spouse maintenance claim is considered. This is to ensure that the terms of any order made in the property claim are considered in the spouse maintenance application.

Assets and liabilities as at the date of hearing.

The parties reached agreement as to the value of most assets, liabilities and financial resources.
I find the assets, liabilities and financial resources of the parties as at the date of hearing are as identified in the following table:

Assets as at the date of hearing	$
17 Robinson Street, Wollongong (H) (Agreed)	450,000
Westpac account (H)	3,000
Jewellery (H)	200
Furniture (H)	3,000
Furniture (W)	300
Personal property (W)	3,000
Shareholding in Nusca Pty Limited (H)	Nil
Shareholding in FM Scanu Engineering P/L (H) (Agreed)	256,112
Keycard account (W)	1,500
Colonial Super Easy (H)	NK
TOTAL ASSETS	717,112
Liabilities as at the date of hearing
Colonial State Bank mortgage (Agreed)	146,000
Visa card (H)	9,000
TOTAL LIABILITIES	155,000
NETT ASSETS	562,112

Unless stated differently, the figures in the above table are taken from the parties’ financial statements or are agreed. Although the values are somewhat out of date no attempt was made to bring these up to date. I infer that those values that were not updated they have remained constant.
In her financial statement sworn in 1999 the wife said that she had personal property worth about $8,000. This comprises personal belongings removed at separation. There is no dispute that at separation the husband retained the vast majority of the furniture and possessions held at the home. His furniture is said to be worth about $3000, in which case the wife’s assertion appears inherently improbable. Doing the best that I can with the evidence I will treat the wife as belongings worth the same as the husband’s.
At separation the husband had a share portfolio, primarily CBA and PBL, worth about $40,000. This was acquired during the marriage. Anticipating that he would soon need to pay the wife her share of the matrimonial assets the husband sold the shares so that he had a fund he could draw on. When settlement did not eventuate the husband used the funds to renovate the home. He installed new carpets, had the home painted, renewed the kitchen and bathroom and bought the children new beds. There is no claim that the court would treat this as a premature disposition of matrimonial assets and apply the Townsend (1995) FLC 92-569 principles and notionally add back the share proceeds. As the monies have been applied improving the home I agree with this approach. The husband has adequately accounted for his use of the funds.
One of the most troubling aspects of this matter concerns the husbands alleged $57,000 debt due to his father. Having recounted the advances made by his father the husband says, “The agreement with my father is that I will repay him if I can.”[2] The wife’s counsel submitted that examination of the entirety of the circumstances surrounding these transactions will result in the husband’s assertion being rejected. The husband did not call any evidence from his father concerning the loan. The loan is not documented nor is the evidence sufficiently precise to enable the court to understand how it is calculated. The lack of particulars about the terms and conditions of the loan. That is the length of the loan and when it was to be repaid. The husband’s father has made no demand that the loan be repaid. As a consequence the wife’s counsel submitted the court would apply the rule in Jones v Dunkel (1959) 101 CLR 298 to the failure to call him. In Ghazal v GIO (NSW) (1992) NSWLR 336 Kirby P, with whom Mahoney and Clarke JJA agreed, explained (at 343) the rule in Jones and Dunkel thus:-“The rule in Jones v Dunkel is one of commonsense reasoning. It provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the case of the party who might be expected to call the witness. It is important to note that this is a facility. It is not an obligation in the reasoning of the decision-maker.” Despite the passing of the Evidence Act 1995 (Cth) a Jones v Dunkel inference may still be drawn. See Australian Securities Commission v AS Nominees (1995) 133 ALR 1 at 12.
[2] Paragraph 37
In Scott and Scott (1994) FLC 92-477 the Full Court said, at 80,729:“There is, in Australia, no rule of law that a Judge must accept evidence which is unchallenged: Cross on Evidence, 3rd Australian ed. (1986) - footnote 483 para.9.66 at 440; and Ellis v. Wallsend District Hospital (1989) Aust. Torts Reports 80-289 at 69,090; (1989) 17 NSWLR 553 at 588 (per Samuels, JA).” The wife has no knowledge of these transactions. The husband was therefore obliged to give an accurate, detailed and complete account of the loan, how it was established and its terms. A party’s obligation to give full and frank disclosure involves giving a detailed account of facts solely within their knowledge or control. Where significant transactions are undertaken they need to prove the asserted facts, corroborating their own testimony to the clearest extent possible.
The husband was asked in 2002 why his father did not give evidence. Because the wife had no knowledge of the transactions her solicitor could not put that these were not loans and could do little more than ask questions as to whether there was any prospect that the loan would be repaid and lay the groundwork for a Jones and Dunkel submission. If not beforehand at least from that time the husband ought to have reflected upon the wisdom of not calling his father. When the hearing resumed there was no attempt to reopen the husbands case. Thus I satisfied that the husband’s father’s evidence would not have assisted his case vis establishing a repayable debt. The husband father has been generous to all of his children and particularly to the husband. Monies advanced over many years have never been repaid. None of the advances are secured. The entire circumstances persuade me that that the court should not take into account the $57,000 debt because it is unlikely that the husband’s father will ever enforce it. See Biltoft (1995) FLC 92-614. The payments made are, however, clearly relevant as a contribution made on the husband’s behalf.
The husband started contributing to a superannuation scheme, Colonial Super Easy on 1 July 1997. There is no evidence of its value as at the date of hearing. Because his income has been modest it is unlikely that the fund has any real value.

Assessment of contributions and other factors.

Section 79(4) requires that the court looks at the entirety of contributions, both financial and non-financial. For the welfare of the family as well as the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conversation or improvement of particular assets and are to be taken into account generally as contributions in a total sense.
An important issue in this matter is the assessment of the weight that should be attached to the husband’s initial contribution. In Pierce v Pierce (1999) FLC 92-844 the Full Court of the Family Court held: “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 weight 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”.
I have already made findings about the assets held by each party at the commencement of cohabitation. The husband made a significantly greater contribution than the wife, the central feature of which is his ownership of 17 Robinson Street, Wollongong. As the property was purchased immediately prior to the parties’ marriage, I am satisfied that at the commencement of cohabitation its value is reflected in the purchase price less the liabilities. The husband’s father advanced $20,000 to enable the purchase of Robinson Street, $10,000 by way a gift and $10,000 by way of a loan. The loan is not secured and although the husband recalled that he might have signed a loan document, no such document was produced. There is no interest payable on the loan. Nearly twenty years after the husband’s father loaned the $10,000 he has made no demand for its repayment. The husband’s father did not intervene in the proceedings nor give evidence. There is no claim by him to this court that any part of the $10,000 is repayable. Thus, I am satisfied that the husband’s father has forgiven repayment of the loan. Hence, although at the commencement of cohabitation the husband had $10,000 equity in the home, when his father later forgave the loan, the actual equity was effectively $20,000. The husband’s ownership of Robinson Street was pivotal to the parties’ capacity to make their money work for them from the earliest days in their marriage. They were able to avoid losing money paying rent and had a capital asset that they were able to improve and which increased in value far in excess of the monies spent improving it. But for the husband’s ownership of Robinson Street, it is unlikely that the parties would have acquired sufficient savings to enable the acquisition of their own home prior to the wife’s accident. The probability is that they would have waited years before entering the property market and when doing so would have borrowed substantially more than was secured against the family home.
The husband claims contributions based upon gifts and advances made by his father. In the Marriage ofRainbird (1997) FLC 90-256 at 76, 376 the Full Court of the Family Court makes it clear that the, “contributor” of a gift is determined by the original intention of the donor. It is apparent from Gosper (1987) FLC 91-818 that the donor’s intention is not necessarily the determining factor. In Kessey (1994) FLC 92-495 the Full Court explained Gosper by saying that as a general approach a parental gift is to be treated as a financial contribution made on behalf of the child of the donor parent. Where the intention of the donor of a gift is not clear the court can look to any special relationship between the donor and one of the spouses and regard the gift as having been contributed by that party. See Kessey at page 81,149.
The issue of gifts and advances is further discussed in Pellegrino (1997) FLC 92-789. In that case Chisholm J sagely acknowledges that parents do not usually have an intention as to whom they intend to benefit when they make gifts to their married children. In this case he held that the parents intended to benefit their daughter by the gift, notwithstanding the fact the husband derived direct and indirect benefit from it. Essentially, if the motivating circumstance leading to the gift was the parent/child relationship, the gift may be regarded as the contribution of the son or daughter; and not also of his or her spouse.
Applying the above principles I am satisfied that the husband’s parents gave the husband his interest in the shareholding in F.M.Scanu Engineering P/L. The principal asset of F.M.Scanu Engineering P/L is the land and buildings valued at $1,050,000 at Berkeley Road. The husband’s parents made equivalent advances to each of his brothers and have indicated by their actions as clearly as one possibly could, that they intended to benefit each of their children equally. The motivating circumstances behind the gift were clearly the parent/child relationship. As a consequence the gifts made by the husband’s parents of his interest in FM Scanu Engineering P/L is a contribution made on behalf of the husband alone. Not only did the gift provide a valuable capital asset, but also until 1998 the husband shared in profit distributions and since then has been paid a salary. This contribution is a significant factor that carries considerable weight. Similarly the husband’s parents contributed n his behalf the advance made upon the acquisition of the former matrimonial home and the regular mortgage and periodic payments made after 1997. This contribution is a significant factor that carries considerable weight.
Upon their marriage and thereafter, I am satisfied that the husband contributed all monies earned and received by him for joint matrimonial purposes. Throughout the marriage he worked full time in the family business. Since separation he has continued to work in the family business, albeit on salary rather than profit sharing. His income is modest and all spent on matrimonial purposes. That is supporting the home and children.
I have already made findings about the wife’s employment. I am satisfied that the wife contributed all income she earned to matrimonial purposes. When she worked in F.M.Scanu Engineering P/L the wife was paid a salary, which money she contributed to the family. In total, the wife worked about four years, compared to the husband’s nineteen years. Comparatively, the husband made a vastly greater direct and indirect financial contribution to the marriage.
The husband made significant improvements made to Robinson Street immediately before the wife was discharged from hospital and after separation using the share proceeds. Contractors and tradesmen predominantly undertook this work.
Prior to her injury in 1990 the wife was overwhelmingly responsible for maintaining the interior of the property and the gardens. After mid 1990 she made a small contribution maintaining the interior of the home and the grounds. After the wife’s injury the husband was overwhelmingly responsible for maintaining the interior of the property as well as the grounds. Since separation he has been exclusively responsible for these functions. The husband made a greater non-financial contribution to the conservation, maintenance and improvement of the property than the wife.
Both parties made a significant contribution to the welfare of the family, including the care of the children. They agree that until her injury in mid-1990, the wife was predominantly responsible for the children’s care and running the home. When he was at home, the husband shared the care of the children, but his involvement was nowhere near as substantial as the wife’s was. When the wife was injured in 1990 the children were aged 4, 2 and 1 years. The younger children were not yet in school and the husband immediately assumed full responsibility for their care. The demands upon him of caring for the children, running the home and supporting the family financially were enormous. Since that time, the husband has been overwhelmingly responsible for the children’s care and running the home. This includes significant contribution to the welfare of the family, caring for the wife when she was discharged from hospital. Whilst home care 6-8 hours a day enabled the husband to work there remained 16-18 hours a day when he was responsible for the wife’s care, the home and children.
As the wife’s health improved and the children got older, she tried to do her best as a home maker and parent. Eventually, she was able to walk the children to school and collect them in the afternoons. She performed basic tasks around the house with varying degrees of skill. While all encompassing from her perspective, the sad reality is that after her injury her contribution as a home maker and parent was modest and the contribution made by the husband far greater.
Since separation the children have lived with the husband and he has been overwhelmingly responsible for their care. He has however had exclusive use of all the valuable matrimonial assets. The wife’s acquiescence to his continued occupation of the family home is an important contribution by her to the welfare of the family. However, overall the husband’s contribution to the welfare of the family during the marriage and since separation substantially exceeds the contribution made by the wife. His contribution must be given significant weight. See Ferraro (supra).
The orders I propose will not affect the earning capacity of either party.
The wife does not pay child support and is unlikely to ever be required to do so.
I find therefore that the parties’ total contribution should be assessed as being 75 per cent by the husband and 25 per cent by the wife.

Section 75(2) factors

Subsection (a). As at the date of hearing the husband was 40 years old and the wife 39 years old. The husband is in good health. The wife suffered a major brain damage in 1990. The long-term consequences of her brain injury include loss of short term memory, moderate speech impediment, an ongoing balance disability and an inability to attend to tasks at speed. It is unlikely that the wife will be able to make any further health gains. I make an adjustment pursuant to the subsection in her favour.

Subsection (b). I have already made findings concerning the parties’ property and financial resources and do not repeat them. The wife is in receipt of a disability pension. She has worked hard for thirteen years to acquire sufficient living skills that enable her to live independently. She has learned to walk and talk and is able to cook her own meals and care for herself. Her efforts have been enormous. The husband’s counsel submitted that she might be able to obtain work in a factory. This is mere speculation. I am satisfied that because of her brain injury, the wife does not have the capacity for paid work in the future. The wife’s social security income is about $215 per week, $180 being her disability pension and $35 rental assistance. The wife will forever be dependent on social security payments and does not have the physical or mental capacity to increase her income through paid employment. The husband has secure employment in the family business. He has many years’ experience in engineering and earns on average about $490 per week salary as well provision of a recent model car. The husband’s income will forever be greater than the wife’s social security payments. I am satisfied that the husband will continue in paid employment until he reaches retirement age. Overall, I am satisfied the husband will continue to earn a greater income than the wife will. The disparity such that I make an adjustment pursuant to the subsection in her favour.
Subsection (c). The children are 18, 16 and 14 years old. Within four years all three children will be adults. In Clauson (supra) the Full Court said, “in addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment opportunity and the restriction upon an independent lifestyle which the obligation to care for the children usually entails.” These principles are applicable to the circumstances of this case. I am satisfied that as a consequence of his care of the children, that there should be an adjustment in the husband’s favour pursuant to subsection (c).
Subsection (d). This subsection focuses on the financial needs of the parties, including their financial commitments supporting their children. The wife lives frugally and her income is fully expended on day to day necessary expenses. The husband supports the children and all of his income is exhausted on necessary day to day expenses. He is not wasteful or extravagant. Neither party has any income left after they meet their day to day necessary expenses. In those circumstances I make no adjustment pursuant to subsection (d).
Subsection (e). The husband has re-partnered. Although the court did not receive evidence from his partner, I accept the husband’s evidence that he supports her and to an extent also her children. The husband uses all of his income supporting his family unit, a factor I have already taken into account pursuant to subsection (d). I make no adjustment pursuant to the subsection.
Subsection (f). The wife receives a disability pension. It is almost certain that she will forever be entitled to her benefit. The husband receives $260 per week family allowance. Other than these payments neither party currently receives a pension, allowance or benefit from any superannuation fund to scheme. I have already taken the wife’s income into account pursuant to subsection (b). I make no adjustment pursuant to the subsection.
Subsection (g). The wife has suffered a reduction in her standard of living post-separation in the sense that she lives with her parents and no longer has the amenity of her own home. The husband remains in the family home and his standard of living is comparable to that enjoyed by the parties after 1990 and prior to separation. Comparatively, the wife lives in more limited circumstances than the husband and it is appropriate to make an adjustment in her favour pursuant to the subsection.
Subsections (h) – (k). These subsections do not arise.
Subsection (l). I have already taken into account the wife’s lack of future employment prospects. In about four years, the husband may be able to increase his income because he will no longer have responsibility for children under the age of 18 years. Whether greater involvement in the family business will generate additional income is uncertain. In the circumstances I make no adjustment pursuant to the subsection.
Subsection (m). The husband has re-partnered. His partner is financially dependent upon him, apparently having no income other than modest child support and family allowance and no assets of her own. The wife has not re-partnered. I make no adjustment pursuant to the subsection.
Subsection (n). Section 75(2)(n) achieves a cross-referencing between s.75(2) and s.79(4). The outcome of the assessment of contributions and other factors has resulted in the husband having 65 per cent of the assets compared to the wife’s 35 per cent. Neither party seeks a split of superannuation. These factors do not warrant an adjustment pursuant to the subsection.
Subsection (na). The wife has not paid child support to date and is unlikely to in the future. I make no adjustment pursuant to the subsection.
Subsection (o). The husband’s mother cared for the children after the wife returned to work and later cared for her when she was too unwell to be left on her own. The wife’s parents and sister cared for the wife and helped the husband care for her and the children after the wife’s accident. The assistance offered to the family by the husband’s family and the wife’s family was substantial. Prior to the wife’s injury the husband’s mother’s assistance was substantial. His family assisted the parties over a longer period than the wife’s family. As a consequence, I make an adjustment in the husband’s favour pursuant to the subsection.
Subsection (p). This issue does not arise.
Having regard to all of the s.75(2) factors I find that it is appropriate that there should be an adjustment in the wife’s favour of 10 per cent. This outcome reflects the cumulative outcome of the findings I have made pursuant to s.75(2). See Tomassetti (2002) FLC 93-032. Any lesser adjustment given the size of the asset pool would be notional.

Section 79(2) is this outcome just and equitable

Because the court must consider the actual orders, not just the percentage distribution under s.79(2) justice and equity in cases like this requires that the court stands back and looks carefully at the outcome of the s.79(4) and s.75(2) process.
I will not repeat the findings made thus far. There are key findings that lead to my comfortable satisfaction that an outcome favourable to the husband 65 per cent compared to the wife’s outcome of 35 per cent is just and equitable. Simply put, these include that the husband made a greater initial contribution, which, as it comprised the family home, must be given significant weight. The husband’s parents made a vital contribution on his behalf when they gave him his interest in FM Scanu Engineering P/L. After mid-1990 the husband made an overwhelmingly greater contribution as a home maker and parent, which contribution must also be given significant weight. By taking responsibility for the home, wife and children, the husband enabled the wife to devote her energy to regaining her health so that she is now in a position to live independently. The husband worked hard in order to provide for the family financially and balancing the demands upon him after mid-1990 was arduous. Prior to mid-1990 the wife was overwhelmingly responsible for the children’s care and the home. She contributed all of the money earned to joint matrimonial purposes. Tragically, the brain injury robbed her of the opportunity to continue to contribute as a home maker and parent to the extent that she desired. She contributed as best she could, but her contribution was limited because of her injury. The wife will never work again in the paid work force and there is virtually no prospect that she will acquire superannuation or other assets as a consequence of earned income. Her only opportunity to acquire assets in her own right is from the adjustment of matrimonial property in these proceedings. The husband will have financial responsibility for the younger two children, the youngest of whom will be dependent upon him for another four years. However, the time will come when he will be freed of their financial dependency from which time he will have the benefit of his career. Although freed from financial responsibility for the children the wife is destined to live in parlous circumstances, dependent upon social security income. The disparity in the parties’ future circumstances must be recognised in the outcome of these proceedings.
The effect of the orders means that the wife will have assets the total value of which is $4800. Thirty five per cent of the nett assets is $196,739. Hence, the husband must pay the wife $191,939. By way of cross check the husband is entitled to assets worth $365,373. He has nett assets of $557,312 which means he must pay the wife $191,939. At settlement the husband must give the wife a release from the mortgagor for a discharge of any mortgage for which the wife is a joint borrower or guarantor. It would be inconsistent with s.81 and the clean break principle to leave the parties unnecessarily financially connected.
The husband will have two months within which to pay the wife the monies to which she is entitled. This is sufficient time to enable him to make arrangements to re-finance the mortgage and borrow extra funds if such an outcome is possible. In the event that the husband fails to pay the monies orders and/or provide the necessary releases then the home will be sold. Although it has an agreed value, the nett proceeds cannot be known. The total assets, excluding the home, are $267,112 and the total liabilities, excluding the mortgages, is $9000. On this basis, excluding the home and the mortgage, the nett assets are $258,112. On this basis, the wife is entitled to $90,339 of the remaining assets. Therefore, on the sale of the home when the wife receives her 35 per cent of the nett share, there would have to be an adjustment in her favour paid from the husband’s 65 per cent. The adjusting figure is the amount need to ensure that the wife receives 35 per cent of the net assets, which is $85,539. The husband is entitled to 65 per cent of $258,112, which is $167,773. He has net assets worth $253,312. When $85,539 is deducted from $253,312 the balance is $167,773.
Pending settlement, the husband must maintain the property and pay rates, taxes and mortgage instalments as and when they fall due. If he defaults the default must be paid out of his proceeds.

Spouse maintenance

The wife brings an application under s.74 and s.72 for the payment of spouse maintenance. The husband opposes her application, alleging that he is not reasonably able to pay periodic or lump sum maintenance. I have already found that the wife will forever be dependent upon social security income. The husband agrees that because of her ill health, the wife is unable to support herself and thus establish a threshold entitlement to spouse maintenance.
At the end of the proceedings, the wife’s counsel conceded that the husband does not have the capacity to pay periodic spouse maintenance. Thus it was contended that the court would stand over the wife’s application for spouse maintenance and preserve to her liberty to restore it should the husband’s circumstances change. The wife’s approach is inconsistent with s.81 and the clean break principle. The court must determine an application based on the evidence at the time of hearing. The husband uses all of his income on necessary day to day expenses for himself, his partner and the children. His assets are modest and insufficient to warrant a sale of all or part in order to contribute to the wife’s support. Although this has been a long marriage the asset pool is small and the financial burden the husband carries supporting the children is onerous.
During closing submissions the wife’s counsel submitted that in the alternative the court would award lump sum spouse maintenance. Although raised for the first time at the end of the hearing the court has jurisdiction to order an award of maintenance by way of periodic payment or lump sum or both. In Vautin (1996) FLC 92-827 the Full Court said, “It has been pointed out on a number of occasions in this Court that in the exercise of the power to order lump sum maintenance caution is usually appropriate because of the apparent finality of lump sum orders and the difficulties in making predictions into the future. However, it is a power, the exercise of which may be appropriate in particular cases. It may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay. It is not confined to cases of the capitalisation of periodic maintenance and/or where periodic maintenance is unlikely to be paid because of concerns about the capacity or willingness of the liable parent to pay (as passages in the judgment in Clauson (1995) FLC 92-575 at pp.81,907 and 8 may suggest) or to cases where the need for or the capacity to pay periodic maintenance is demonstrated. It is clear that in exercising the power under s.72 the trial Judge is not confined to one only of the categories of order referred to in s.80(1). In an appropriate case the Court may make orders which encompass several of those options.”
Respectfully, the wife’s counsel struggled when trying to formulate a proper basis for ordering lump sum spouse maintenance. In this case I am strongly satisfied that the husband requires all of his income and assets in order to meet his and the children’s necessary expenses. Indeed without his father’s continuing financial support he is unable to maintain a home or keep the children in their private schools.
The wife’s application for spouse maintenance, including her application that it be adjourned is refused.
For these reasons I make the orders set out at the start of these reasons.

I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate: S. Mashman

Date: 3 June 2004