Sofous and Cethenes and Ors

FAMILY COURT OF AUSTRALIA

SOFOUS & CETHENES AND ORS

[2012] FamCA 188

FAMILY LAW – PROPERTY – where the husband and wife were married for 8 years – where the marriage was highly volatile – where the wife suffers from paranoid schizophrenia – where the husband suffers from depression – where the husband made an initial contribution of a commercial property which provided the primary source of income during the marriage – where a property was purchased during the marriage and the wife was registered as the sole proprietor – where the nature of the wife’s interest in that property is in dispute – where the wife’s parents have contributed significant sums of money to the reduction of the mortgage over that property – where the wife’s parents claim the wife holds the property on trust for herself and her sister, subject to a life interest in their favour – whether the wife holds the property on trust or subject to some other interest of her sister and/or parents – where there is insufficient reliable evidence to find that the property is held on trust – where the wife and her parents executed a loan agreement soon after the purchase of the property – where wife’s parents found to be creditors of the wife pursuant to that loan agreement – where the evidence strongly suggests the wife’s parents will not seek repayment of the loan – where property included as an asset of the wife – where distribution of property in the proportion of approximately 63:37 per cent just and equitable in all of the circumstances.

Family Law Act 1975 (Cth)
Evidence Act 1995 (Cth)

Baumgartner v Baumgartner (1987) 164 CLR 137
Biltoft & Biltoft (1995) FLC 92-614
Bloch v Bloch (1981) 180 CLR 390
Brown v Brown (1993) 31 NSWLR 582
Calverley v Green (1984) 155 CLR 242
Cerini & Cerini [1998] FamCA 143
Chorn & Hopkins (2004) FLC 93-204
Coghlan & Coghlan (2005) FLC 93-220
Devries v Australian National Railways Commission (1993) 177 CLR 472
Gollings & Scott (2007) FLC 93-319
Ho v Powell (2001) 51 NSWLR 572
In the Marriage of Af Petersens (1981) FLC 91-095
In the Marriage of Brandt (1997) FLC 92-758
In the Marriage of Clauson (1995) 18 Fam LR 693
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Lee Steere (1985) FLC 91-626
Manolis & Manolis (No 2) [2011] FamCAFC 105
Muschinski v Dodds (1985) 160 CLR 583
Norbis v Norbis (1986) 161 CLR 513
Norman & Norman [2010] FamCAFC 66
Omacini & Omacini (2005) FLC 93-218
Pearson v Pearson [1961] VR 693
Pierce & Pierce (1999) FLC 92-844
Shepherd v Doolan and Ors [2005] NSWSC 42
Steinbrenner & Steinbrenner [2008] FamCAFC 193
In the Marriage of Townsend (1995) FLC 92-569
Turner v Dunne [1996] QCA 272

APPLICANT:

Mr Sofous

RESPONDENT:

Ms Cethenes

2^nd RESPONDENT:

Mr Cethenes Senior

3^rd RESPONDENT:

Ms Cethenes Senior

FILE NUMBER:

SYC

3049

2009

DATE DELIVERED:

29 March 2012

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Melbourne

JUDGMENT OF:

Murphy J

HEARING DATE:

6 – 8 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Steggall

SOLICITOR FOR THE APPLICANT:

Rosanna Tyler Solicitor

COUNSEL FOR THE RESPONDENT:

Mr Robinson

SOLICITOR FOR THE RESPONDENT:

S Kourkoulis & Associates

COUNSEL FOR THE 2^ND & 3^RD RESPONDENTS:

Mr Panayi

SOLICITOR FOR THE 2^ND & 3^RD RESPONDENTS:

Barbayannis Lawyers

Orders

As and by way of settlement of property:

The husband shall, by not later than 28 days from the date of these Orders:
(a)Do all such things and sign all such documents as shall be necessary to transfer to the wife any right, title claim or interest he has or may have in respect of the real property situated at … in C.
(b)Forthwith abandon any right, title, claim or interest he has or may have in respect of the said property.
The wife shall, by not later than 28 days from the date of these Orders:
(a)Do all such things and sign all such documents as shall be necessary to transfer to the husband any right, title, claim or interest she has or may have in respect of the real property situated at … in T.
(b)Forthwith abandon any right, title, claim or interest she has or may have in respect of the said property.
The husband and/or the wife, as the case may be, shall do all such things and sign all such authorities or other documents as might be required to cause and direct the account holder of the “Rosanna Tyler Solicitor” Trust Account to distribute equally to the husband and the wife the funds held in that account on behalf of the husband and/or wife.
The husband and/or the wife, as the case may be, shall do all such things and sign all such authorities or other documents as might be required to cause and direct the account holder of the “L” Trust Account to distribute equally to the husband and the wife the funds held in that account on behalf of the husband and/or wife.
The wife is declared to have no right, title, interest or claim in any superannuation interest in any superannuation fund in the name of the husband.
The applications, including the oral application made during and at the conclusion of the trial of these proceedings for orders by the Second and Third Respondents are dismissed.

IT IS NOTED that publication of this judgment under the Sofous & Cethenes and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: SYC3049/2009

Mr Sofous

Applicant

And

Ms Cethenes

Respondent

Mr Cethenes Senior

Second Respondent

Ms Cethenes Senior

Third Respondent

REASONS FOR JUDGMENT

The husband and wife were married in May 2001 and separated in early 2009. Both parties acknowledge their marriage was highly volatile and was marred by frequent disputes and altercations, occurring within the context of a dysfunctional extended family.
Against that background, the husband and wife seek orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The property of the husband and wife or either of them is effectively agreed save for an issue which dominates these proceedings. The wife’s parents, the second and third respondents (“Mr and Ms Cethenes Senior”), claim that real property at C in Victoria and registered in the wife’s sole name is held on trust for the wife and her sister (subject to a life interest in Mr and Ms Cethenes Senior’s favour), or, alternatively, is held on trust for them, or, alternatively, that there is a significant liability owing to them arising from their payment of a significant proportion of the purchase price and the mortgage payments.
Apart from that dominant issue, the parties also dispute their respective asserted entitlements.
The claim in respect of the C property is the subject of proceedings in the Supreme Court of Victoria. It seems that those proceedings have not been formally abandoned. But, each of the parties seek, effectively, declarations pursuant to the Act within the context of assessing the property of the parties to this marriage pursuant to s 79.
It is necessary to consider the various assertions made by each of the wife and Mr and Ms Cethenes Senior as to the interests each claim to have in the C property; their claims in these proceedings cannot be considered except against that background. Equally, their claims – and, more broadly, the claims of each of the parties to these proceedings – must be seen against the significant misgivings I have about the credibility and reliability of the evidence of each of them and factors which impinge upon that assessment.

Interests in the C Property?

The statements by the High Court pertaining to the intervention of equity not being justified by reference to “abstract notions of fairness and justice” are well known. In seeking to underscore those principles, Macrossan CJ held in Turner v Dunne [1996] QCA 272, that “…[i]f it were otherwise, it might have to be concluded that ordinary categories of legal ownership could be not much more than provisional in all domestic relationships …”. Those words are, with respect, apposite to the moveable feast of claims and counter claims in respect of the C property in this case.
Each of Mr and Ms Cethenes Senior and the wife must be taken to contend that the presumption of advancement has been rebutted; each of the alternatives contended for by Mr and Ms Cethenes Senior are consistent with an asserted intention wholly inconsistent with a gift to their daughter. Equally, the interests for which the wife herself contends are dependant upon the establishment of an intention wholly inconsistent with the presumption.
The husband’s position with respect to the varying contentions in respect of the C property can be simply expressed: he says the wife’s parents intended to gift the funds advanced by them to the wife. He specifically deposes that the wife’s parents said in his presence at the time of the settlement of the C property, “this is our gift to you”. This should be contrasted with his evidence in the witness box where he said that he could not recall the wife’s parents saying to the wife at the time of settlement that the money was a gift.
In oral evidence, the husband said that it was his understanding that the funds were provided to the wife to prevent Mr and Ms Cethenes Senior’s other children from “getting anything”. It was said that this understanding stemmed from conversations with the wife and Mr and Ms Cethenes at the C property.
That evidence ought be seen against other evidence given by the husband – which he was, as it seems to me, at some pains to emphasise and which evidence I consider had the ring of truth about it – that he “just didn’t get involved”; that he “didn’t want an interest”. It was a matter, he suggested, that was between the wife and her parents.
The great difficulty in this case is knowing just what (if anything) the wife and her parents discussed, agreed, or sought to implement.

What is the Evidence Surrounding The Purchase Of The C Property?

Ms Cethenes Senior’s Evidence

Ms Cethenes Senior deposes to having instructed the “conveyancer handling” the purchase of the C property “to register the property in the names of [the wife] and [Ms M] and that our two daughters would hold the property as joint proprietors subject to a life interest in favour of my husband and me or on trust for my husband and me”.
During cross-examination, Ms Cethenes Senior stated that she and the wife had attended upon a lawyer, Mr D, prior to the purchase of the C property and had discussed with him the manner in which the house would be bought, including who would be named as purchaser(s). Ms Cethenes Senior also said that she was present during a conversation between the wife and Mr D, and whilst she did not understand all of what was being said, she recalled hearing Mr D use the word “trust”.
Notwithstanding Ms Cethenes Senior’s oral and affidavit evidence, she said that she did not check with either Mr D or the wife that both the wife’s and Ms M’s names appeared on the purchase contract as the purchasers or that any trust was in any manner formalised or recorded.

The Wife’s Evidence

According to the wife, she and Ms Cethenes Senior saw Mr D one month after the purchase of the C property at which time they instructed him to draw up both a trust deed and a loan agreement to reflect Mr and Ms Cethenes Senior’s, the wife’s and Ms M’s alleged respective interests. She makes no mention of any such consultation prior to purchase.
Also, according to the wife, the mother did not say anything to Mr D at this meeting; it was she who instructed him to draw up the documents reflecting, she says, the fact that she held the property on trust for Ms M and that her parents had a “life interest” such that she “could not throw them out”.
The wife stated that, whilst she had received a copy of a trust deed, she did not sign it. According to the wife, she disagreed with her parents regarding when Ms M should receive her interest and that is why she did not sign the deed. The wife claims that the deed was subsequently “stolen” by the husband.

Documents at the Time of Purchase or Shortly Thereafter

At the time of the purchase, the husband and wife applied for and were approved for a loan of $335,000. Those funds were applied towards the purchase of the property, and Mr and Ms Cethenes Senior provided the outstanding amount. The wife was registered as the sole registered proprietor of the C property and, on 22 August 2005, a mortgage was registered in favour of the Westpac Bank with the wife and husband as joint mortgagors. (As will be discussed below, that liability was significantly reduced by a later additional capital injection by Mr and Ms Cethenes Senior).
A loan agreement was tendered by consent as Exhibit R21 and is dated 1 September 2005. It is signed by the wife (witnessed by Mr D) and each of Mr and Ms Cethenes Senior. Mr and Ms Cethenes Senior’s signatures were witnessed separately – as one would expect – by Ms G and a stamp accompanying her signatures states “A current practitioner within the meaning of the Legal Practice Act 1996…”.
The loan agreement provides:
2.The Lenders [defined as Mr and Ms Cethenes Senior] have loaned the Principal Sum [defined as $300,000] to the Borrower [defined as the wife] and the Borrower has borrowed the Principal Sum from the Lenders on the terms and conditions contained herein.
…
6.To better secure the Lenders, the Borrower hereby charges the Land and if required to do so by the Lenders shall at the cost of the Borrower give to the Lenders a registered mortgage in his favour over the [C property] or over any other land which the Borrower may be the owner of.
On 9 December 2005, the wife executed a will, witnessed by Mr D. The will states:
4.I GIVE DEVISE AND BEQUEATH to my Trustee [being Ms Cethenes Senior and Ms M or, should they both predecease the wife, Mr Cethenes Senior] all of my right title and interest in [the C property] (or if I do not own this property at my death such property as is my principal residence at my death) upon trust for sale with power to postpone such sale to permit my Husband to personally occupy the same (together with such of my Mother, Father and [Ms M] as wish to reside in the residence)…

Other Events Post-Purchase

Each of the husband, wife, Mr and Ms Cethenes Senior and Ms M lived in the house together until February 2008 when the wife’s parents and sister moved out of the C property as a result of an Intervention Order taken out against them by the husband.
Mr and Ms Cethenes Senior and Ms M recommenced living in the C property in September 2008 after an Intervention Order had been made against the husband, in favour of Ms Cethenes Senior and Ms M. The wife, having initially left the C property with the husband in September 2008, returned to live with her parents and Ms M in early 2009.

Summary of Evidence Surrounding the Purchase of the C Property

The inconsistencies in the accounts of each of the protagonists and how those accounts sit with the documentary and other evidence can be summarised as follows:
§The wife is the registered sole proprietor of the C property. She says that she alone provided instructions to Mr D at the time of purchase;
§Ms Cethenes Senior says she provided relevant instructions to Mr D at the time of purchase;
§Ms Cethenes Senior alleges that Mr D was instructed by her to register the wife and her sister Ms M on the title. She offers no explanation as to why that didn’t occur or why Mr D’s failure to do so was not raised with him;
§Ms Cethenes Senior appears to suggest that the registration of the wife and her sister was as trustees either in respect of a life interest to Mr and Ms Cethenes Senior or simply on trust for them absolutely. Ms Cethenes Senior offers no explanation as to how instructions in respect of those different interests can sit together;
§Ms Cethenes Senior offers no explanation as to why, when the alleged trust interest/s were unrecognised on the title (or otherwise) she did not pursue either the wife or Mr D;
§In contrast to her mother’s evidence, the wife deposes that about a month after purchase, instructions were given by her (with her mother present) to establish a trust deed in respect of the property. The wife’s evidence is that she would be trustee of the property for her sister Ms M as beneficiary but subject to a life interest to her parents;
§Despite the evidence of each of the wife and Ms Cethenes Senior, it is known that less than a fortnight after the wife was registered as the sole proprietor of the property and about a fortnight earlier than the time at which the wife alleges that instructions were given to draw a trust, a deed of loan was prepared by Mr D and signed by the wife and Mr and Ms Cethenes Senior;
§Ms Cethenes Senior does not explain how it is that this document – prepared by the same lawyer – defines rights incidental to the property purchase but no document evidencing an alleged trust exists;
§The wife, on the other hand, says there was a trust document but she did not sign it as a result of a dispute with her parents (who do not refer to the trust deed). That unsigned trust deed was, the wife says, stolen by the husband;
§Some four months after purchase, (and despite an alleged trust interest existing at or about the time of purchase) the wife executed a will drawn and witnessed by Mr D – the lawyer who, on the evidence of each of the wife and Ms Cethenes Senior not only knew of the asserted trust interest, but received instructions to perfect same. That lawyer witnessed (and presumably drew) a will which is consistent with the wife being the sole registered proprietor of the property (and having both the legal and equitable title to the property), and which also permits of a right to occupy the property for such of her parents, Ms M and the husband as may wish to do so.

Events in 2008 – Caveats, Supreme Court Proceedings and a Trust Deed

As has been seen, the respondents entered a loan agreement dated 1 September 2005. However, Mr and Ms Cethenes Senior also contend that they hold a beneficial interest in the property pursuant to a trust and, elsewhere, that they and Ms M hold beneficial interests in the property.

The Caveats

Early in 2008 relations between the husband and wife and Mr and Ms Cethenes Senior were at a particularly low ebb, ultimately resulting in Mr and Ms Cethenes Senior and Ms M vacating the C property as the result of an Intervention Order at the suit of the husband to which reference has been made. On 17 January 2008, two caveats were lodged against the C property.
One of the caveats claims an interest as chargee on behalf of each of Mr and Ms Cethenes Senior. The source of the interest is said to be “pursuant to an agreement between the caveators and [the wife] dated 1^st September 2005” (that is, the loan agreement).
The second caveat claims an estate in fee simple on behalf of Ms M. That claim is made as a result of an alleged “equitable interest pursuant to a constructive/implied trust where the land is held for and on behalf of [Ms M].”

The Supreme Court Proceedings

On 19 December 2008, Ms M and Mr and Ms Cethenes Senior filed a writ in the Supreme Court of Victoria. It is important to set out the relevant terms of the Statement of Claim:
5.At the time the [C] property was purchased, it was the common intention of [Mr and Ms Cethenes Senior] and the [wife] that the [wife] would take and hold the property on trust for [Mr and Ms Cethenes Senior] during their lifetime with remainer to [Ms M] and [the wife].
PARTICULARS
The common intention is evidenced by conversations occurring between [Mr and Ms Cethenes Senior] and the [wife] at or about the time [Mr and Ms Cethenes Senior] provided funds to purchase the property when [Mr and Ms Cethenes Senior] told the [wife] that their financial contributions were paid to enable the purchase of the property on trust for [them] during their lifetime with the remainder to [Ms M] and the [wife].
6.Alternatively to paragraph 5, at all times it was the intention of [Mr and Ms Cethenes Senior] and the [wife] that the [wife] would take and hold the property on trust for [her parents] during their lifetime with remainder to [Ms M] and the [wife].
…
7.The property…was purchased for $460,000.00, of which [Mr and Ms Cethenes Senior] contributed $300,000 to purchase the property, and the balance of approximately $135,000.00 (which also covered duty on the transfer) was loaned by the Westpac Banking Corporation…The [wife] contributed $46,000.00 towards the deposit for the property.
8.By a transfer dated 28 June 2005, the property was transferred into the [wife’s] name in accordance with [Mr and Ms Cethenes Senior’s] agreement and, with [Mr and Ms Cethenes Senior’s] concurrence, the [wife] was registered as the registered proprietor of the property on 22 August 2005.
…
10.[Mr Cethenes Senior, Ms Cethenes Senior and the wife] made the repayments of capital and payments of inters to the Westpac Banking Corporation of approximately $2,154.00 a month under the terms of the mortgage.
11.By reason of the matters set out above, the [wife] holds the property on an express or alternatively, a resulting, trust for herself and [Mr and Ms Cethenes Senior].
12.Alternatively, [Mr and Ms Cethenes Senior] are entitled to and claim a declaration that the [wife] holds the property on a resulting trust for [Mr and Ms Cethenes Senior] and the [wife] in shares which are proportionate to their respective contributions to the purchase price and repayment of the mortgage or, alternatively, in such shares as this Honourable Court shall determine.
…
16.Further or alternatively, [Mr and Ms Cethenes Senior] lent the sum of $300,000.00 to the [wife].
17.By a deed dated 1 September 2005 executed by the [wife] and [Mr and Ms Cethenes Senior], the [wife] agreed to repay the sum of $300,000.00 on the terms and conditions contained herein.
…
20.On or about 25 February 2008 [Mr and Ms Cethenes Senior] demanded that the [wife] repay the sum of $300,000.00 and interest thereon.
PARTICULARS
The demand was in writing and was contained in a letter dated 25 February 2008 from [Mr and Ms Cethenes Senior’s] former solicitors to the [wife]...
21.By virtue of clauses 1 and 4 of the deed, the sum of $300,000.00 and interest thereon became due and payable on or about 27 September 2008.
22. On 28 September 2008 the [husband and wife] abandoned the property and [Mr and Ms Cethenes Senior] entered into possession of the property.

Orders were made by consent on 30 July 2009 in the Supreme Court of Victoria restraining the husband and wife from withdrawing any further funds from the loan account held in their joint names in relation to the C property. The “further hearing” of the claim was “adjourned to a date to be fixed”. It appears that the matter has never been relisted in the two-and-a-half years since.

The Discovery of a Trust Deed

On the second day of the trial, counsel for Mr and Ms Cethenes Senior informed the Court that a trust deed, ostensibly relating to the C property, had been located on his instructor’s file.
When Court convened the following morning, counsel informed the Court that the newly-located trust, whilst pertaining to the C property, was not the trust deed alleged to have been drafted by Mr D in 2005 (and, as the wife contends, subsequently stolen by the husband). Rather, the newly-located trust deed had been created by Mr and Ms Cethenes Senior’s then solicitor, Ms V & Associates, in connection with the Supreme Court proceedings in 2008 to which reference has just been made. Counsel said to the Court:
…that document was prepared by [Ms V & Associates] for [Mr and Ms Cethenes Senior] at the time of the Supreme Court proceedings. My instructor contacted [Ms V] who advised that she had prepared … the Declaration of Trust on the instructions of [Mr and Ms Cethenes Senior] who had advised her that a document in similar terms had apparently been prepared by [solicitors] who were acting on behalf of the wife at the time of the acquisition of the [C property]. [Ms V] advised that she had contacted [those solicitors] to obtain a copy of the Trust Deed and was advised that they did not have a copy and [Ms V] recalls that this document, the Declaration of Trust, was annexed to an affidavit in the Supreme Court proceedings but … Ms Steggall tells me that’s not the case… In any event, it is not the document, on closer inspection, that relates to the deed that went missing. It was a document that was created at the time of the Supreme Court proceedings…
It should be observed that, in the Supreme Court proceedings just referred to, no express written trust was pleaded as sustaining any beneficial interests there contended for. It should also be observed that, in the affidavits relied upon by Mr Cethenes Senior and Ms Cethenes Senior no reference is made to any such express trust. Indeed, no part of the case for either Mr and Ms Cethenes Senior or the wife was based upon any such express written trust. Even more curiously, the ultimate submissions made by each of those parties did not contend that the interests of the parties were referable to that trust deed. Rather, constructive and resulting trust (or loan in the alternative) was asserted.
The relevant terms of this trust deed, which is undated, should be outlined:
4.[The wife] has agreed with [Ms M, Mr Cethenes Senior and Ms Cethenes Senior] that she will hold the property on trust for [Ms M, Mr Cethenes Senior and Ms Cethenes Senior] in accordance with the following provisions.
…
6.Declaration of trust. [The wife] declares that as from the date of this deed she will hold the property on trust for [Ms M, Mr Cethenes Senior and Ms Cethenes Senior] in the following shares:
(a)38 of 100 equal undivided parts or shares on trust for [Ms M]; and
(b)the remaining 62 of the 100 equal undivided parts or shares on trust for [Mr Cethenes Senior and Ms Cethenes Senior] as tenants in common.
…
9.Transfer to [Mr Cethenes Senior and Ms Cethenes Senior]. If requested by [Mr Cethenes Senior or Ms Cethenes Senior], [the wife] shall, at the expense of [Mr Cethenes Senior and Ms Cethenes Senior], execute a transfer transferring 62 of the 100 equal undivided parts or shares in the property to [Mr Cethenes Senior and Ms Cethenes Senior] as tenants in common.
10.Transfer to [Ms M]. After [Ms M] attains the age of 18 years, if requested by [Ms M], [the wife] shall, at the expense of [Ms M], execute a transfer transferring the remaining 38 of the 100 equal undivided parts or shares in the property to [Ms M]. [Bold in original]

What Are The Parties’ Respective Claims in These Proceedings?

Proceedings were commenced in this Court by way of Initiating Application filed on behalf of the husband on 25 May 2009 (the husband lodged a caveat over the C property the following day). That Application sought orders that would see each of the parties retain their respective properties to the exclusion of the other, in addition to an order discharging the husband from the mortgage over the C property.
The husband now seeks orders that would see him receive 60 per cent of real property situated at T in New South Wales and 35 per cent of the C property.
Initially, the wife responded to the husband’s application by seeking orders that: the husband’s Application be dismissed; the wife retain the C property and indemnify the husband against the mortgage; the T property be sold and the proceeds of sale be distributed equally between the husband and wife; the accumulated rental proceeds from the T property be distributed equally between the parties; and, the husband pay spousal maintenance in the sum of $400.00 per week.
No mention was made at that time of any interest alleged to be held by her parents (or Ms M) in either property.
At trial, the nature of the relief sought by the wife had changed. She seeks orders that: 88 per cent of her interest in the C property be transferred to Mr and Ms Cethenes Senior; the husband retain the T property upon paying $80,000 to the wife; and, the husband’s superannuation be split equally between the parties.
Counsel for the wife submitted that the respective interests contended for arose as a result of a “common intention constructive trust” (see Muschinksi v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137; and, e.g., Shepherd v Doolan and Ors [2005] NSWSC 42 at [31]). Counsel argued in the alternative that the interests arose by reason of a resulting trust. (See, e.g., Bloch v Bloch (1981) 180 CLR 390 at 397 per Wilson J (Mason, Murphy JJ agreeing); Calverley v Green (1984) 155 CLR 242 at 246). Of course, in either case, the submission is that the presumption of advancement has been rebutted. (See, Calverley at 251; and, with respect to the applicability of the presumption to either gender, Brown v Brown (1993) 31 NSWLR 582 at 598 – 599 per Kirby J).
In the further alternative, counsel for the wife argues that, if the Court rejects the contention of a trust interest, there will be a finding that Mr and Ms Cethenes Senior are creditors of the wife and are owed either the principal sum ($300,000) or, alternatively, the principal sum plus interest at a rate of 6 per cent per annum since 2005.
Mr and Ms Cethenes Senior were given leave to intervene and, on 22 March 2010, filed a Response to the husband’s Initiating Application. That Response sought: a declaration that the wife holds the C property on trust for them; a declaration that the husband and wife “hold such portion of the [T] property…on trust for and on behalf of [them]” as the Court determines; and an order that the husband pay “damages” suffered as a result of Mr and Ms Cethenes Senior being “forcibly removed” from the C property in February 2008 (including, the costs of rent incurred as a result of their having to find alternate accommodation).
More than 18 months later, in the lead up to the trial, Mr and Ms Cethenes Senior filed a Case Outline on 10 October 2011; the same substantive orders were being sought in respect of the C property and a claim continued to be made for an equitable interest in the T property.
At the conclusion of the trial, the nature of the interest claimed by Mr and Ms Cethenes Senior had undergone a significant change.
In lieu of a claim that the wife held her legal interest in C on trust for them, they seek a declaration that the property is held subject to a life interest to them with a remainder interest to the wife and her sister Ms M “in such shares as the Family Court deems appropriate”. As has been mentioned, Ms M is not a party to these proceedings.
Mr and Ms Cethenes Senior also seek an order that they be permitted to register their life interest and “[t]hat as a term of the trust, should either [the wife] or [Ms M] … die, then the deceased’s share to pass to the survivor.” Also, at the commencement of the trial, counsel for Mr and Ms Cethenes Senior indicated that their claim for a trust with respect to the T property is abandoned.
The husband disputes the existence of either a trust in favour of, or a loan owing to, Mr and Ms Cethenes Senior (or any trust interest in favour of the wife’s sister, Ms M). The husband contends that the “[C property] should form part of the asset pool of the marriage. Contributions by [Mr and Ms Cethenes Senior] should be considered contributions on behalf of the wife”.
The husband also submits that the Court should consider the T and C properties, and the parties’ contributions to each, separately (see e.g. Norbis v Norbis (1986) 161 CLR 513). The husband’s ultimate contention remains that he should receive 60 per cent of the T property and 35 per cent of the C property.

Comparison of the Parties’ Current Position With Previous Contentions

The final positions of each of the wife and her parents – at least as far as these proceedings are concerned – can be seen to be part of a moveable feast of assertions as to their respective interests in the property (noting that, from time to time, a beneficial interest for Ms M has also been claimed).
It is difficult to escape the conclusion that the assertion of those interests, and the evidence said to support them, have changed to suit the prevailing circumstances.

Mr and Ms Cethenes Senior

Mr and Ms Cethenes Senior now, apparently, assert that the wife holds the C property on trust for herself and her sister subject to a life interest to them. In so far as their intentions with respect to the C property are concerned and the interests asserted in respect of the property, they have previously asserted (expressed chronologically by reference to the evidence in these proceedings) that:
§The wife and Ms M were to own C jointly subject to a life interest to them;
§The wife and Ms M were to own C jointly on trust for them;
§The wife held the legal and beneficial interest in C, but owed them $300,000 plus interest (noting that neither Ms M nor the husband are alleged to be debtors);
§That their interests in the property were as “chargees” in respect of that owed sum (noting that the nature of the charge is not specified);
§They and the wife formed a joint intention with respect to the property that the wife would hold the legal interest in the property but on trust for the wife and Ms M subject to a life interest to them;
§By reason of their contribution to the purchase price and mortgage repayments, the wife held the property on resulting trust for them (with, it might be noted, no beneficial interest to the wife or Ms M);
§By reason of their contribution to the purchase price and mortgage repayments, the wife held the property on resulting trust for them and the wife in interests proportionate to their respective contributions (again noting that no beneficial interest to Ms M is claimed);
§That the wife holds the property pursuant to an express written trust in the proportion 38 per cent to Ms M and 62 per cent to them (noting that no life interest to them is asserted and no beneficial interest is attributed to the wife).

The Wife

The wife now asserts in respect of the property that it is held by her on trust for her and her parents in the respective proportions 12:88 per cent. That position can be compared to earlier assertions that:
§She holds the legal and equitable interests in the property such that she can dispose of it by will upon her death as she might choose;
§She holds the property on an express trust for herself and Ms M with a life interest to her parents;
§She has acknowledged in a loan agreement owing her parents $300,000 plus interest.
Ms M has made no direct assertions in these proceedings as to any interest she might have in the property. However, she is a co-plaintiff with her parents in the Supreme Court proceedings (in which, it might be noted, some of the alternative claims do not see her having any interest in the property) and she is a caveator. That caveat claims that she holds the sole beneficial interest in the property of which, it is asserted, the wife is the trustee.

Veracity and Reliability of Evidence

It is important to observe that the confused and confusing picture thus presented is made no better by the generally unfavourable view I take of the evidence of each and all of the parties.
In some cases, I consider that evidence is false and has been manufactured ex post facto so as to justify the result sought in these proceedings. By the time this matter came to trial in this Court, proceedings had occurred in the Supreme Court of Victoria at the suit of Mr and Ms Cethenes Senior against the husband and wife as first and second defendants respectively. I have little doubt that the evidence of each of the parties is coloured by an understanding, however imperfect, that their answers have the potential to have legal consequences within these proceedings. Their evidence is, in my view, coloured by the desire to achieve particular outcomes by means of that evidence.
The evidence of the parties is also affected by idiosyncratic factors. English is not the first language of either Mr or Ms Cethenes Senior. Care must be taken to ensure that proper regard is had to misunderstanding of English as an explanation for aspects of the evidence that are on their face troubling. I have given due regard to that, particularly in assessing the evidence of Ms Cethenes Senior who was cross-examined at some length. Paying full regard to that factor, I am nevertheless left with considerable disquiet as to both the veracity and reliability of her evidence.
The wife has a longstanding history of mental illness currently diagnosed as paranoid schizophrenia that has, in the past, manifested itself in “persecutory delusions” and “auditory hallucinations”. That condition has resulted in some recalcitrance in compliance with procedural directions. The mother was, I hasten to add, on her account, on the account of the legal practitioners representing her, and, to my observation, wholly fit to give instructions and to participate in the trial.
There were oddities in the wife’s demeanour and expression that I felt may have been attributable to her illness. Again, however, I consider that not all of the concerns I have about the veracity and reliability of the wife’s evidence can be laid at the feet of her obviously serious mental health issues.
Each of those issues become significantly exacerbated by reference to the antipathy toward the husband manifested by Mr and Ms Cethenes Senior that takes the form of barely concealed hatred. Further in that context, they have an apparently longstanding view that the relationship between the husband and wife was detrimental to the wife (and, I infer, her mental health issues). To that is added the evident significant hostility between the parties. These factors, too, impact upon the veracity and reliability of the evidence of all concerned.
The husband was permitted by an earlier order of Loughnan J to give evidence by video link from Sydney. It seems that, in addition to being unable to afford flights to and accommodation in Melbourne for the trial, entry into Victoria may subject him to criminal prosecution in respect of alleged breaches of Protection Orders. Video does not permit of the same examination of demeanour as is the case if a litigant can be observed in person in the witness box (and elsewhere in the courtroom). (I note in that respect, the comments made by Deane and Dawson JJ in Devries v Australian National Railways Commission (1993) 177 CLR 472 at 480).
The husband has suffered from significant depression. It is not easy to determine the extent that this impacted upon the husband’s veracity or reliability, but I have concerns about each. What occurred during the trial in relation to Exhibit 19 is a good illustration.
Included in a bundle of documents tendered by consent by counsel for Mr and Ms Cethenes Senior at the outset of the trial were several handwritten documents said to have been written by the husband (Exhibit R19). On the final day of proceedings counsel for the husband objected to Exhibit R19 being relied upon on the basis that the husband denied having authored the documents.
I subsequently gave leave to recall the husband to facilitate cross-examination about Exhibit R19. Once recalled, the husband was asked “if any of [the documents forming Exhibit R19] were by [his] hand” to which the husband responded “some are, some aren’t”. The husband was subsequently taken to each individual page of Exhibit R19 and asked to identify whether or not the handwriting was his. The husband conceded that he had written the first document and that his signature was on the second document. The husband was then taken to a second document, comprising two handwritten pages. Having stated that he had written at least the first page of that document, the husband subsequently claimed to be unable to recall whether or not he had written the following page. The husband similarly maintained he was unable to recall whether or not he had written any of the other documents which formed Exhibit R19.
Thus, the husband’s evidence is that, but for the first page and a signature on the second, he could not recall whether or not he had written the documents contained in Exhibit R19. This is despite the husband’s clear denial set out in paragraph 74 of his affidavit which he reiterated to counsel immediately prior to his being recalled.
I was similarly unimpressed with the contradictory evidence provided by Mr and Ms Cethenes Senior regarding their alleged intentions with respect to the C property and how those assertions sit with their actions (and inactions) at the time. This evidence will be addressed further below.
In summary, I have significant reservations about the reliability of the evidence of each of the husband and wife and Ms Cethenes Senior (noting that Mr Cethenes Senior was cross-examined only briefly and that Ms Cethenes Senior was clearly the major protagonist in advancing their case).
In those circumstances, recourse might be had to documentary evidence and what it might say about, for example, the parties’ intentions and the interests, if any, created in the C property. Yet, as has been seen, the documentary evidence is also not without its own contradictions and difficulties.

The Failure to Call Mr D

Mr D and his file/s can be seen to be a source of very significant evidence in and about how the intentions of the parties manifested themselves in discussions with him, instructions given to him, and documents drawn and/or witnessed by him. Neither the wife nor her parents called Mr D as a witness. Neither did either of them issue a subpoena in respect of his files. No explanation is offered for either omission. I am aware that, at least as far as the purchase is concerned, the passage of time might have seen documents destroyed or memories fade. Yet, nothing before the Court suggests that either was explored.
The “rule in Jones v Dunkel” relates to the potential for an adverse inference to be drawn in circumstances where evidence presented in a case raises an inference against a party and that party is in a position to give or call evidence to refute it and does not do so. But, the “rule in Jones v Dunkel” can be seen as “a particular application” of “the rule in Blatch v Archer”. (See Ho v Powell (2001) 51 NSWLR 572 at [15] – [16] per Hodgson JA, Beazley JA agreeing).

The latter “... applies where a person bearing the onus of proof does not give or call evidence which that person is plainly in a position to give or call; and unless some explanation is given of that failure, the tribunal of fact is entitled to infer that this evidence would not have assisted that person’s case …” (Ho v Powell at [16]). The principle in Blatch v Archer can be seen as wider than the “rule in Jones v Dunkel” “because it is also available against the person bearing the onus of proof where that person does not adduce evidence that he or she was plainly in a position to adduce”. (See Australian Securities and Investments Commission v Rich [2009] NSWSC 1229 at [439] per Austin J).
Further, the:
… failure of a party who bears an onus of proof to call an available witness who could cast light on some matter in dispute can be taken into account in deciding whether that onus is discharged, in circumstances where such evidence as has been called does not itself clearly discharge the onus. This is an application of [the rule in Blatch v Archer] …
(ASIC v Rich at [440] citing Shalhoub v Buchanan [2004] NSWSC 99 at [71] per Campbell J).
In cases of the type under consideration, it can be said that there is no single onus of proof; rather, “the burden of proof upon the different issues may be variously distributed between the parties …” (LexisNexis Butterworths, Cross on Evidence, online edition, [7005]). Secondly, where an inference can fairly be drawn from evidence against the interests of a party, if findings against that party’s interests are not to be made, an “evidential burden” or “burden of adducing evidence” arises (Cross on Evidence, [7015]).
Those broad principles have particular application in this Court. Each of the parties is required to put before the Court all such evidence as each is willing and able to bring in support of the findings contended for and, in this Court, that is done primarily by exchange of affidavits ahead of the trial. The discussion of evidentiary burdens rendered operative by the establishment of a prima facie case in courts where evidence is given viva voce and not disclosed prior to the trial (see, e.g. Cross, above) becomes almost moot; such findings as each party contends for have (or should have) their evidentiary bases in evidence sworn ahead of the trial.
It seems to me that, by reason of the processes of this Court, the “rule in Blatch v Archer” might have some importance in cases such as the present where there is contradictory evidence and where reservations attend the veracity and reliability of that contested evidence.
The principles that might govern the application of that principle (see e.g. Ho v Powell cited in ASIC v Rich at [438]) can be seen to have parallels in the three conditions that must be met for the “rule in Jones v Dunkel” to apply: the “missing witness [or evidence] would be expected to be called by one party rather than the other (which implies that the witness must be available to give evidence)”; the “evidence would elucidate a particular matter, which is a live matter at the trial” and “the absence [of the evidence] is unexplained”. (ASIC v Rich at [449]).
The “rule in Jones v Dunkel” “… permits evidence to be given greater weight and an inference or inferences to be more readily drawn when the other party who might have called evidence to the contrary has chosen not to do so”. (Ho v Powell at [76] per Davies A-JA). The “rule in Blatch v Archer” is of “wider application”:
[14]… in deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material which the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision …
[15]In considering the second question, it is important to have regard to the ability of the parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent ot which they have in fact done so …
[16]The case of Jones v Dunkel … is a particular application of this principle …In my opinion a similar principle applies where a person bearing the onus of proof does not give or call evidence which that person is plainly in a position to give or call; and unless some explanation is given of this failure, the tribunal of fact is entitled to infer that this evidence would not have assisted that person’s case: cf Commercial Union Assurance Co. of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389.
(Ho v Powell).
In ASIC v Rich, above, Austin J held:
[440]There is another respect in which Jones v Dunkel is a particular application of Blatch v Archer, again indicating that the latter has a wider operation. Whereas Jones v Dunkel reinforces an inference drawn against the party who has not called evidence, to the effect that the evidence would not have assisted that party’s case, Blatch v Archer leads either to the drawing of such an inference, or to some other assessment of the weight of evidence, unfavourable to the party against whom the principle is applied. In Shalhoub v Buchanan [2004] NSWSC 99 at [71], Campbell J explained the point as follows:
Failure to call all those witnesses still has a consequence, even though I do not go through the process of drawing any Jones v Dunkel inferences concerning them … I shall assume that all of these witnesses … were available to be called by either party. Even making that assumption, failure of a party who bears an onus of proof to call an available witness who could cast light on some matter in dispute can be taken into account in deciding whether that onus is discharged, in circumstances where such evidence as has been called does not itself clearly discharge the onus…
It is for the wife or Mr and Ms Cethenes Senior as the case may be to discharge an onus associated with persuading the Court that interests different from those presumed to arise from the certificate of title to the C property should be found to exist.
The circumstances and what was said, or not said, by whom in and about the intentions of the parties at the time of the C property purchase, including what was, or was not, said about trust interests, are all highly relevant to (at least significant components of) the cases/s sought to be made out by the wife and her parents. Those issues have plainly been live for some time and arise squarely on the material relied upon by each of the parties.
I propose to take account of the failure to seek or adduce evidence, (either orally from Mr D or from his files) in assessing the evidence relevant to the issues to which it might pertain. In saying that, I am aware that the application of the “rule in Jones v Dunkel”, permits, but does not require, an inference to be drawn that the evidence would not have assisted the party against whom the inference is drawn. Also, the application of the rule cannot be used to “fill gaps” in the evidence.

C Property - Findings

I reject the evidence of the wife that there was an express written trust at or about the time of the purchase of the C property. That evidence is inconsistent with the evidence of Ms Cethenes Senior. The document has never been produced nor is there any evidence of any attempts to obtain it from Mr D. There is no other evidence from Mr D which supports its existence. I reject the wife’s evidence that any such document was stolen by the husband.
I also reject the (in any event vague) evidence of Ms Cethenes Senior that a trust was discussed – in any form – with Mr D at or about the time of purchase. Again, the absence of evidence from Mr D is relevant. In its absence, and in the absence of other evidence, I consider it inherently unlikely that something as important as the creation of a trust interest in land would have been discussed with a lawyer acting in and about the purchase only to see those discussions resulting in a failure to perfect that trust interest (or otherwise leave any such instructions from a client unresolved).
I also consider it inherently unlikely that if there was an intention to create an express trust, that the issue would not have been followed up by either the wife or Ms Cethenes Senior. There is not only no evidence that either did so, but there is also no evidence to suggest that either turned their mind to it at all until about 2008 when the parents were forced to leave the property for a period of some months. In that respect, it is also of some importance that the parties were all living in the home. If there was an intention to create an express trust at the time I think it highly unlikely that it would not have been pursued formally during this time, particularly as intra-familial relationships were marked by friction. By way of corollary, what was formalised (as is not in disputed) was a loan.
As I have earlier said, neither the wife, nor Mr and Ms Cethenes Senior could contend that the presumption of advancement can sit with their (various) contentions as to intention/s.
The Deed of Loan might, together with the wife’s will (and, of course, the title to the property), be seen to be the best evidence of the intentions of the wife and Mr and Ms Cethenes Senior at the time of the purchase of the property. Each is consistent with the wife having the sole legal and beneficial entitlement to the property and with the interests of the parents being as creditors as opposed to the holders of equitable interests or entitlements.
The reliability of those documents is consistent with the fact that each was undertaken by a legal practitioner at or shortly after the purchase of the property. The relative coincidence of the documents with the conveyance is in my view an important pointer to the intentions of the parties at that time.
Equally, those documents in those circumstances are a pointer against either an express trust or the common intention said to found a constructive trust. Moreover, those same documents and the intentions which in my view they embody, weigh against a finding that the monetary contribution by Mr and Ms Cethenes Senior to the purchase price and any reduction in the capital amount of the mortgage ought result in the imposition of a resulting trust. (e.g., Calverley v Green at 246-247).
In that respect, it is important to understand that whatever may be the assertions and statements made in the period subsequent to purchase (and, particularly, for example, in and around the removal of Mr and Ms Cethenes Senior from the property in 2008 and the events subsequent to that), it is the intentions of Mr and Ms Cethenes Senior which are important (Pearson v Pearson [1961] VR 693 at 697) and it is those intentions at or about the time of the provision of the money that are important (e.g., Calverley v Green at 251).
I have already referred to the curiosity that, despite a trust deed being uncovered during the course of the trial, neither Mr and Ms Cethenes Senior (or the wife) rely upon it as determinative of any interests that each might have in the C property.
No suggestion was made to the wife (who is the putative settlor of that express trust) that the document was a sham or otherwise was not genuine. Yet, axiomatically, that deed could only create a valid trust in its expressed terms if the wife was the holder of the legal and beneficial interests in the C property at the time of that declaration of the trust. But, the parties on whose file the express trust deed was apparently discovered are alleging that there was an existing trust in respect of the property. If the property was the subject of an existing trust (as they themselves had alleged in their affidavit material and in the proceedings before me), the deed could not create the trust which it purports to create.
No evidence addresses these issues nor otherwise addresses the circumstances in which the trust deed is alleged to be “…a document that was created at the time of the Supreme Court proceedings” (whatever that might mean).
Other issues attend the creation (and apparent signing) of that trust deed. First, it is by no means clear why it was on Mr and Ms Cethenes Senior’s solicitor’s file; it is the wife as registered proprietor who needed to give instructions to create the trust. Secondly, it is by no means clear whether the wife had capacity to give those instructions and to execute the deed at that time.
In that respect, the chequered procedural history of this matter and the mother’s role in it should be mentioned. I permitted an adjournment of the trial in October. In ex tempore reasons given on 10 October 2011, I said:
7.… the chronology which, in this respect at least, as I understand it, is uncontroversial shows proceedings resulting in what might conveniently be described as “procedural orders” dating back more than two years to about the middle of 2009.
8.Since that time there have been 13 appearances insofar as I can make it out at which various procedural orders have been made.
9.It is, I think, not unfair to the wife to suggest that a significant number of those procedural hearings have been occasioned by her non-appearance or non-participation in the proceedings in one form or another.
10.During those hearings the husband has been, as I understand it, represented at all times and it can therefore plainly be understood that his counsel would submit, as she did, that a further application is an unwarranted impost both financially and emotionally on her client. All the more so, Ms Steggle [sic] submits, in light of the procedural history to which I have referred much of which it is fair to say, I think, can be laid at the feet of the wife.
11.As against that, however, is my very significant disquiet at the fact that the self-represented wife has a significant psychiatric history. There is before me a lack of precise evidence about that psychiatric history but it seems that there have been suggestions made that the illness or illnesses from which she suffers have been significant. For example, at least, reference is made to a psychotic illness.
For all of those reasons, and not least because, apparently, the wife and Mr and Ms Cethenes Senior seek to specifically eschew reliance upon the deed as creating an interest for which they contend, I do not propose to place reliance upon it as evidence of that which it contains.
I attach little weight to the evidence of the wife and Ms Cethenes Senior. I consider each of them to be very unreliable witnesses who have likely tailored their evidence to suit the outcomes they seek to achieve. The inconsistencies in their positions is manifest. I consider the wife is currently significantly influenced by her parents, and most particularly her mother, in seeking to achieve for her parents an outcome in these proceedings consistent with their desires. I consider it unsafe to arrive at conclusions based upon what each of the wife and her mother contend about issues central to the C property.
It will be plain from what I have earlier said that, although I have real reservations about the veracity and reliability of the husband’s evidence, in respect of this issue, his evidence is, on his own admission, of little moment; the effect of it is that the issues as between members of his wife’s family in respect of the C property were their concern and not a matter for him.
In my judgment, the preponderance of the reliable evidence points to their being no trust interests in the C property. I consider there is no reliable evidentiary foundation for a finding of a “joint relationship or endeavour” (Muschinski v Dodds (1985) 160 CLR 583 at 618). I can discern no commonality of intention.
Whilst it is plain that Mr and Ms Cethenes Senior have provided the vast bulk of the purchase price and met mortgage payments, the resulting trust presumed to arise is rebutted by what the parties themselves have variously asserted to be intentions inconsistent with such a trust.
The preponderance of the reliable evidence is to the effect that Mr and Ms Cethenes Senior are creditors of the wife pursuant to the deed of loan.

Settlement of Property

The statutory mandate is to not make an order pursuant to s 79 of the Act unless, in all of the circumstances, it is just and equitable to do so.
The process by which the discretion is exercised is circumscribed by s 79 and by long-standing authority (see e.g., In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; and Coghlan & Coghlan (2005) FLC 93-220).
The process has been described as having three (or four) steps (see e.g., In the Marriage of Ferraro at 79,560; Omacini & Omacini (2005) FLC 93-218 at 79,609; and, more recently, Manolis & Manolis (No 2) [2011] FamCAFC 105), but noting the comments of the Full Court in Norman & Norman [2010] FamCAFC 66 at [54] to [61]).

The Property of the Parties or Either of Them

The Agreed “Pool”

Sensibly, counsel for the husband and wife were (subject to the issue in relation to the C property just discussed) able to predominantly agree the property of the parties or either of them. In that respect:
a)The values of the T and C properties are agreed;
b)The husband’s claim in respect of tools and the wife’s motor vehicle is not pressed in the sense that each shall lie where it falls with no value being attributed to either;
c)It is agreed that the amount ascribed to the “[L Trust]” is an accumulation of rental proceeds from the T property;
d)The husband originally claimed $2350 which is a building insurance payment. It seems that this amount was necessary to be paid because the wife had removed rental monies. However, it would appear that when the rental monies so removed were paid back, there was, in effect, a repayment of the insurance monies. I propose to remove it as a liability.
e)The (very modest) superannuation interests of the husband should be included as part of the one “pool” (See Coghlan).
An issue in relation to addbacks was, as I apprehended it, faintly opposed by the wife. Orders made during the course of these proceedings have resulted in the wife receiving $27,000 and the husband receiving $23,000 from the L trust account for legal fees. There is, it seems, little doubt that the source of these funds was rental proceeds from the T property. The sums should be added back as against the respective entitlements of the parties. (See Chorn & Hopkins (2004) FLC 93-204).
To the matters outlined above should be added the findings earlier made in respect of the C property. The assets of the parties and the agreed liabilities are, then:

Property - description

Value

C property

$710,000.00

T property

$365,000.00

Trust (R. Tyler)

$390.78

Trust (L) – rent moneys

$2,030.85

Husband’s superannuation

$16,492.59

Total

$1,093,914.22

Liabilities

Mortgage – Commonwealth Bank of Australia over C property

($48,799.30)

Add-backs

Distribution from rent moneys for legal fees

$50,165.06

Net

1,095,280

Alleged Parental Liabilities

The husband claims to have received a loan from his parents of approximately $50,000 to cover “living” expenses and a trip overseas. (This amount is exclusive of moneys advanced to the husband by his parents to assist in the purchase of the T property which will be referred to below when dealing with contributions).
The evidence in respect of this loan is vague. No evidence before me specifies the amount allegedly owed, the terms of any such borrowing, including very significantly, any term relating to repayment or, indeed, if repayment of the alleged or any amount will ever be called in. I do not propose to include it as a liability of the parties. (See Biltoft & Biltoft (1995) FLC 92-614; In the Marriage of Af Petersens (1981) FLC 91-095).
I have earlier concluded that no trust interest is established in respect of the C property but, rather, the evidence points to Mr and Ms Cethenes Senior advancing money for the purchase of that property by way of loan. As the two Full Court authorities to which I have just made reference establish, however, it does not necessarily follow that any such liability should be brought to account as between the husband and the wife. If, for example, parents are unlikely to call in all or part of a loan as against their child, it would be unjust and inequitable for the marriage partners to share equally in that liability.

It is accepted that Mr and Ms Cethenes Senior met the mortgage repayments over the C property. Yet, they and Ms M lived in the property apart from the period of a few months in 2008 earlier referred to. Significantly, they (and the wife) have continued to live there since the husband and wife separated and do so now. Despite the fact that the wife owns the property, the evidence suggests that it is extremely unlikely that the current position will change.
I consider it unjust and inequitable as against the husband if the repayments of the mortgage are in any way taken up as a liability to Mr and Ms Cethenes Senior in which he shared.
The picture with respect to the moneys used to fund the purchase is more complicated. The deed of loan is evidence of some “commerciality” attaching to it. Yet, it is a loan that has, from time to time, been eschewed in favour of a claim for a beneficial interest in the property. The wife said in cross-examination that a letter of demand seeking repayment of $300,000 had been sent to her in 2008. It seems that this may have occurred when her parents had been removed from the property. It certainly occurred during the currency of Supreme Court proceedings in which the loan was one of a number of alternative claims made by, relevantly, the parents as against the husband and wife.
There is no evidence of any other demand. There is no evidence of any repayment of any amount by the wife. The evidence suggests that the wife is unlikely to work remuneratively in any significant way in the future. The parents and Ms M continue to live in the C property. I am convinced on the whole of the evidence before me that Mr and Ms Cethenes Senior will not seek to recover the whole or any of the moneys advanced for so long as they are permitted to live in the C property. As I have said, I think it extremely likely, now that the husband and wife are no longer married or otherwise financially connected, that the parents will continue to live in the property for so long as they wish.
It may be that, upon their death, a dispute arises in which Ms M might seek to claim some interest in the property. But, she has not sought to intervene in these proceedings and there is no evidence to suggest any such future action save the Supreme Court proceedings which have been quiescent for some years. Thus, while a possible future contingency might impact upon the wife solely, the evidence does not suggest a possibility of such magnitude that I am persuaded that I should take it into account.
I do not propose to take account of the liability of the wife to her parents in respect of the deed of loan in arriving at the net property of the parties or either of them. (Needless to say, that finding must have an impact upon the contributions made by the wife through her parents to which I shall return below).

Add-back of wife’s expenditure?

The written submissions on behalf of the husband seek to have $12,000 “in addition to regular small withdrawals from the joint [C property] loan account” withdrawn by the wife, notionally added back to the pool. During oral submissions, counsel for the husband altered that sum to $9981.
The basis is that the wife had withdrawn those funds from a joint account (other than the loan facility) following separation and that such withdrawals constituted “premature distribution” (per In the Marriage of Townsend (1995) FLC 92-569). It ought to be noted that, whilst counsel referred to “paragraph 4” of her written submissions in making the claim for $9981 to be added-back, that paragraph refers to tools. The reference to add-backs in counsel’s written submissions pertains to the claim for $12,000 withdrawn from the parties’ loan account; there is no mention of the $9981 nor the basis upon which I would be persuaded it ought be added back.
Adding back to the pool is the exception, not the rule (Cerini & Cerini [1998] FamCA 143 at [46]. See also Gollings & Scott (2007) FLC 93-319). The Full Court in Omacini rejected the notion that “the mere fact that a party has expended money realised from the disposition of assets that existed as at the date of separation, will result in that expenditure being added back…as a premature distribution of assets…” as being “unduly simplistic” (at 79,619). The adding back of a specific sum is a mathematical or accounting exercise within the exercise of a broad discretion that, fundamentally, is not a mathematical or accounting exercise. It seeks to attribute against one party, in this case in 2011 dollars, expenditure incurred in a different, earlier context and in dollars with an earlier value. Difficulties arise immediately.
The husband annexes to his affidavit filed 18 June 2010 a copy of a bank statement which he claims evidences the wife’s “premature distribution”. That statement reveals numerous transactions between 9 February 2009 and 3 August 2009. As counsel for the wife submitted, there was “nothing remarkable” about the vast majority of those transactions; they were, as counsel submitted, “small amounts” which appear to have been applied predominantly to food, clothing and petrol. It is agreed that the wife, unlike the husband, has not been in any form of consistent employment since separation; she lives with her parents and is dependant upon them financially. The amount sought by the husband to be added-back is modest.
I am not persuaded that the expenditure could be described as a “premature distribution” as that expression is used within the authorities (or, indeed, is “waste”). Justice and equity does not point to it being added back.

Conclusions as to Net Property

As a result of the findings just referred to, the property of the parties or either of them and the liabilities I propose to take into account in respect of each and both of them is represented by the table earlier set out.

Evidence as to Contributions

The Issue of Violence

Plainly enough, all allegations of family violence are important and serious. This Court has repeatedly signalled its repugnance to any such conduct. In so far as any such conduct has relevance to proceedings for settlement of property and orders effecting same, it is however important to bear in mind the parameters of the “narrow band of cases” within which that occurs and the necessity for there to be a nexus between the conduct and contributions. (See Kennon & Kennon (1997) FLC 92-757 at 84,295). And, the course of violent conduct must be established as alleged, by reference to the standard of proof which must attend it (s 140(1), Evidence Act 1995 (Cth)). In that latter respect, the allegations by the wife here are serious and the findings potentially very serious.
The wife makes serious allegations of violence perpetrated upon her by both the husband and his father during the marriage. The wife claims in her affidavit filed 7 September 2011 that “[a]t one time we were cleaning up [the T property] [the husband] against my will locked me in the work station and raped me repeatedly after spiking my drink and would not allow me to leave the premises”. On another occasion, the wife alleges that “throughout the course of the marriage [the husband] would slip drugs into my food or drink causing me to become unwell and lethargic…”.
More generally, the wife claims that “throughout the marriage I was physically abused on a number of occasions which has traumatized me mentally”. The wife goes on to describe an event at the T property during which, she says, her father-in-law “attempted to strangle me” and as a result, the police were called. According to the wife “the history of the marriage was one being abused, unknowingly drugged and raped and based and my only form of escape was to separate from [the husband] and move as far away as possible”. The wife attributes her “mental state currently” to the violence said to have been perpetrated upon her by the husband and his father.
The husband denies all allegations of violence by the wife against both himself and his father. The husband alleges that on several occasions he saw Mr Cethenes Senior physically assault the wife. The husband claims that he saw Mr Cethenes Senior:
… hit [the wife] until she fell over, and then he kicked her while she lay on the ground. When she fell her head almost hit the door track on the sliding door and I was afraid that she had suffered a severe blow to the head. I saw her father kick her in the groin. The wife was in bed for several days after that because of the severe beating.
The wife denies being assaulted by her father and Mr Cethenes Senior “absolutely den[ies]” the husband’s allegations.
I repeat, in this context, my serious reservations about the veracity and reliability of the evidence emanating from all parties. In the case of the wife, her evidence and its reliability must be seen in the context of the nature and extent of her mental illness. The wife has been diagnosed with paranoid schizophrenia. She is currently a community-based, involuntary patient.
The nature of the mother’s illness is important in respect of the reliability of her evidence. Her treating psychiatrist, Dr F, in a report dated 17 October 2011, annexed to an affidavit filed by leave on 6 December 2011, describes two admissions by the wife to the mental health unit of a hospital in 2009 and 2010 when, on each occasion, the wife presented with “persecutory delusions and auditory hallucinations”. The wife continues to be treated with anti-psychotic medication.
Despite, it seems, the relatively frequent intervention of the police, there is no evidence before the Court to suggest that the husband has ever been charged with assaulting the wife at any time during the marriage. Whilst an Intervention Order was made against the husband on 26 September 2008, the Order named Ms Cethenes Senior and Ms M, not the wife, as the “Aggrieved Family Member[s]”. It will be recalled that earlier that year proceedings were instituted by those same parties in the Supreme Court against both the husband and wife.
There is no evidence other than that of the wife and Mr and Ms Cethenes Senior to support the allegations made by the wife. I am not prepared to act on that evidence, either in respect of what each individual deposes to nor on the combined effect of their evidence. The barely concealed contempt for the husband shown by Mr and Ms Cethenes Senior colours significantly their evidence.
In my view the evidence in this case falls a long way short of persuading me to the requisite standard that I should make findings of violence as alleged. That being the case, there is no foundation for a submission that any such conduct should sound in the assessment of contributions.

Initial Contributions

The husband brought to the marriage the T property which he had purchased about four years prior to cohabitation in May 1997 for $265,000.
That property provided the primary source of income (by way of rental proceeds) for the parties during their marriage.
The husband asserts direct financial contributions to the T property by his parents, including about $30,000 towards the purchase price and an additional $6245.96 between April 1998 and May 2001. I accept that each occurred. However, if, as I have found should occur, the husband receives the “credit” for the contribution of the whole of the equity in the T property at the commencement of cohabitation in 2001, he receives no “additional credit” in the assessment of contributions for the fact that his parents helped bring that about by their prior direct financial contributions; to do so would be to “double dip”.
The introduction of the equity in a piece of real property where that real property provides the predominant (passive) form of income for the parties in a not quite eight year relationship and where the current value of the property can be seen to represent about 33 per cent of the “pool” is, plainly, an important contribution. (See, e.g., Pierce & Pierce (1999) FLC 92-844).
The wife does not depose to, nor did she give any oral evidence regarding, the property in her possession at the commencement of the marriage. (Other evidence points to her having savings as I will refer to below).

During the relationship

It is undisputed that the C property was bought in about 2005, about half way through the parties relationship, for $460,000.
It is also undisputed that the wife contributed $46,000 from her savings by way of deposit. It would appear that at least part of this sum came from the payout she received as a result of a motor vehicle accident prior to the marriage. It seems to me a reasonable inference that the wife had the majority of that sum prior to cohabitation.
It is also not disputed that Mr and Ms Cethenes Senior paid approximately $100,000 towards the purchase price. The husband and wife had otherwise obtained a loan and were joint mortgagors but Mr and Ms Cethenes Senior subsequently paid $200,000 towards that loan. Thus, it is not in dispute that Mr and Ms Cethenes Senior made a direct financial contribution of $300,000 to the acquisition, and maintenance, of the C property.
I have found that, all else being equal, it is highly unlikely that Mr and Ms Cethenes Senior will seek repayment of that amount or any part of it (or interest) pursuant to the loan agreement.
As earlier observed, Mr and Ms Cethenes Senior assert that they alone, have met all of the repayments on the mortgage over the C property. Neither the husband nor the wife dispute this: the husband states in his affidavit filed 18 June 2010 that such repayments were “in lieu of rent as [Mr and Ms Cethenes Senior] were residing in the property with their other daughter”. Mr and Ms Cethenes Senior contend that, in addition to the mortgage repayments, they have paid the rates, electricity, water and telephone bills associated with the C property. A multitude of receipts, referable to that assertion, were tendered (Exhibits R46 –R50).
The husband states in his affidavit filed 18 June 2010 that prior to his leaving the C property in September 2008 “I used my salary to pay household expenses for me and the wife, as well as her parents and sister, including food, bills and outgoings such as council and water rates, electricity and telephone charges”. However, the husband conceded during oral evidence that he did not pay any electricity or water bills associated with the C property nor did he pay any council rates. I accept the evidence of Mr and Ms Cethenes Senior (supported by the copious receipts contained in Exhibits R46 – R50) that they were primarily responsible for the payment of utilities and mortgage repayments with respect to the C property.
The wife and each of Mr and Ms Cethenes Senior all allege that the husband caused significant damage to the C property prior to his leaving in September 2008. According to Mr and Ms Cethenes Senior, the husband damaged, inter alia: the laundry; electrical wiring; plumbing; the bathroom; doors; cupboards; and various appliances. The husband denies causing the alleged damage and instead claims he is a “handyman” and “made substantial contributions to the repair and conservation of the [C property]”.
In his affidavit filed 18 June 2010, the husband details the work he claims to have completed on the property (see eg, [49]). Plainly, what the husband describes as “renovations”, Mr and Ms Cethenes Senior describe as “damage”. I think it highly likely that the truth is located somewhere between the two versions. Without further evidence, and in light of the issues regarding credibility discussed earlier in these Reasons, I am not prepared to make a finding that the husband damaged the property in the manner alleged by Mr and Ms Cethenes Senior.
In August 2001, shortly after cohabitation commenced, the husband transferred half of his interest in the T property to the wife who continues to hold her half share as tenant-in-common with the husband. The husband claims his decision to transfer to the wife an interest in the T property stemmed from the fact that he was “very much influenced” by Ms Cethenes Senior who “repeatedly” said to him “[i]f you love [the wife] you will transfer half of your property to her”. According to the husband “[t]he wife did not provide any funds on that transfer. I discharged the existing mortgage and we obtained a new mortgage of $165,000 in joint names…I was working as a [tradesman] but the wife was unemployed”.
The wife says she “contributed the sum of approximately $15,000.00 from my own personal monies towards the property and I am aware that my parents on my behalf also made a contribution to the property and the exact amount I do not know…”.
The wife deposes to having “cleaned up” the T property, “with the assistance of [her] family” when “the property was vacant for a period of approximately fourteen (14) months” prior to it being leased. According to the wife:
9. … when my relationship with the [husband] commenced I made considerable contributions both financially and non financially towards the maintenance, conservation and improvement of the property at [T]. In fact after the [husband] closed down his business on or about March 2000 it was as a result of enormous efforts on my part that the property was cleaned up and thereafter made available for lease. I was actively involved in the preparation of the property and also the marketing of the property for lease…As a result of my effort the rental that was being commanded by the property was $600.00 per week which was far in excess of what was initially thought was the market rental. This was entirely through my initiative.
The wife also deposes that “I contributed monies towards the [T] property which monies were applied towards discharging the liabilities on the loan secured by the title. In addition monies were advanced by me to cover the recurring outgoings including insurance or other outgoings with respect to the property which monies were advanced prior to the marriage”.
Mr and Ms Cethenes Senior also claim to have contributed both financially and non-financially to the T property. According to Ms Cethenes Senior:
27.…In April 2001, my husband and I attended the [T] property and removed old cars, cleaned the property and generally made the property tenantable. The works took about a month and then my husband I assisted the [husband] to locate a tenant for the property. [T] was not leased until May, 2001 and between August 2000 and May 2001, our daughter [the wife] and my husband and I provided money to the [husband] to make the loan repayments for [T]. The husband signed receipts for those moneys which are set out herein as follows: …
Ms Cethenes Senior sets out $6700 in contributions by the wife towards the T property and $13,000 from herself and her husband, in addition to “the labour input of [Mr Cethenes Senior] and me towards [T] to enable the same to be rented which was significant”. In addition to these contributions, Ms Cethenes Senior states that, on 28 June 2002, “my husband and I provided $10,000.00 to the…husband towards the [T] property and [the wife] also provided $10,000.00 to the husband towards [T]” and “in April 2002…the husband again was short of money for [T]. My husband and I provided the husband with a further $1,000.00…”.
The husband denies that the wife and/or her parents contributed any funds to the T property. The husband also denies “that the wife was actively working to clean the property” and whilst the husband accepts the wife “may have assisted my parents and I from time to time” such assistance was “not frequent…as [the wife] often could not get out bed [sic] during the day and stayed in her room”.
I do not accept the evidence of either the wife, or Mr and Ms Cethenes Senior with respect to their alleged financial contributions to the T property. Despite asserting that the husband had “signed receipts” for the moneys allegedly paid, no such receipts are in evidence. This is so despite the fact that Mr and Ms Cethenes Senior have tendered, as part of the bundle, voluminous receipts evidencing their payment of various bills relating to the C property.

Similarly with respect to the wife’s alleged financial contributions, the evidence before me does not persuade me that I should make a finding that the wife contributed $15,000 to the T property.
During oral evidence, the husband stated that he and the wife “shared duties” around the home.
The husband claims that, aside from infrequent commission payments, the wife did not work remuneratively during their relationship; the wife claims “that during the marriage I was working in [a business] field doing contract work and my income went towards costs incurred during the marriage including where necessary costs towards repaying the mortgage if there was a shortfall or insufficient funds” (presumably, the reference by the wife to “the mortgage” pertains to the mortgage over the T property as it is the wife’s evidence that her parents made the mortgage repayments with respect to the C property). The wife claims that the husband was unemployed for “significant periods” during their marriage and that, as a result, she “was supporting him financially and he was dependent on both myself and my parents”. The husband denies this and says “…I was rarely unemployed because I worked as a [tradesman] and found work relatively easily on a casual basis”.
I am not satisfied that much ultimately turns on these differences. During oral evidence, the husband described the parties’ contributions to the marriage as being “mainly a joint effort”. In my view, that description is justified on the evidence before me in respect of the totality of the financial and non-financial contributions (including homemaker contributions) made by the parties themselves during the course of the relationship. (There are no children of the relationship).
The T property has been rented out since May 2001. In an affidavit filed 11 February 2010, the husband deposes to the rent on the property being $3033 per month.
Commercial signage is affixed to the T property and has, at times, provided rental income. Whilst the wife initially contended that the husband continues to receive income from the sign, counsel ultimately conceded that there was insufficient evidence to support a finding that the husband continued to draw an income from the sign. I agree.

Post-separation

At the time of separation in February 2009, the T property was subject to a mortgage. That mortgage was repaid in full from the rental proceeds in May 2010 – that is, via a joint contribution of the parties.
The husband claims to have outlaid approximately $7,600 following separation to pay “arrears on the [T] property mortgage following the wife’s request to the managing estate agent for funds to be sent to her in Melbourne…”. However, on his own evidence, the husband was reimbursed this sum from subsequent rental proceeds.
The husband and wife have each lived with their parents since separation. The husband has, on his case, been employed on a regular basis (earning approximately $655 per week since separation).
The evidence regarding the wife’s post-separation employment is less than clear. It would appear that the wife was in paid employment for a brief period during the latter part of 2011. In a financial statement filed on behalf of the wife on 7 September 2011, the wife states that she is currently employed “on contract” but goes on to depose that she had been employed at the named business for 50 days.
Dr F, to whose evidence earlier reference has been made, records that the wife had “advised me that at present she not is [sic] working. I understand that [the wife] most recently worked for 2-3 months in ‘customer service’. She reports taking frequent sick leave during this time, this employment terminated in September 2011”. Dr F goes on to say that the wife had said she “last worked approximately two years ago” (i.e. in late 2009 some twelve months or so after separation). There is no evidence before the Court regarding this employment. The wife deposes in her affidavit filed 7 September 2011 that she is “not currently working due to my health”.

Assessment of Contributions

Approach

It was proposed on behalf of the husband that an asset-by-asset approach should be adopted given the differing nature of the parties’ contributions to various assets in the pool. I understand why the submission might be made, but I consider I am better able to assess contributions and arrive at a just and equitable result by reference to the so-called “global approach”. (See Norbis at 523 per Mason and Deane JJ).

Quantification

Expressed qualitatively, an assessment of contributions consistent with justice and equity should take account of the following broadly-expressed findings arising from the matters earlier discussed:
§The husband contributed initially real property which is now unencumbered and represents about 33 per cent of the “pool” of property;
§The use made of that initial contribution is a significant matter; it provided passive income that was the parties’ major source of income during the relationship;
§The wife, through her parents provided $300,000 toward the purchase of real property whose agreed value today can be seen to represent over 60 per cent of the “pool”;
§The wife, through her parents, has contributed, in addition, the mortgage repayments and met the utilities. The mortgage has reduced and is now less than $50,000;
§The use to which those contributions were put is an important consideration – the C property provided a home for the parties for a considerable part of the relationship. That contribution in respect of the marriage is ameliorated to a certain extent by the fact that the property also provided a home for the parents and Ms M. But, equally, the husband and wife were relieved of the burden (both financial and emotional) of finding and funding a place to live;
§Despite the obvious friction which existed in the household comprised of the husband and the wife and the wife’s family, including the events of early 2008 and the Supreme Court proceedings in their aftermath, the wife, through her parents (principally her mother) should be seen as having made some indirect or non-financial contributions including as a homemaker;
§The husband’s assessment that contributions during the relationship should be seen as a “joint effort” is, in my view, an accurate one; in my view the financial and non-financial contributions made by the parties themselves during the course of the relationship should be seen as equal;
§The wife, primarily through her parents, can be seen to have contributed to the preservation of the C property post-separation. I note, though, that a property in which the husband has (an inchoate) interest has provided a home exclusively for the wife and her family and not for him;
§The husband can be seen to have contributed to the preservation of the T property. It has continued to earn income for the benefit of the parties. This post-separation contribution is of more significance than the wife’s post-separation contribution.
Contrary to the manner in which many s 79 applications are run in this Court, it must always be remembered that the process required of the Court is the exercise of a broad discretion in respect of which reasonable minds can differ. It is neither an accounting exercise nor an exercise in mathematics. (See e.g., Norbis at 522; In the Marriage of Brandt (1997) FLC 92-758).
Yet, of course, as was said by Coleman J in Steinbrenner & Steinbrenner [2008] FamCAFC 193:
234.Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case.
Moreover, any adjustment (and resulting disparity between the parties) needs to be seen in terms of its dollar value – as distinct from an apparently arbitrary percentage figure (see In the Marriage of Clauson (1995) 18 Fam LR 693 at 714).
In my view, the contributions of the parties should be assessed in the proportion 60 per cent to the wife and 40 per cent to the husband. That is, the respective contributions should reflect a disparity of 20 per cent, or about $220,000.

Section 79(4)(e) – The “s 75(2) Factors"

The wife is currently aged 31; the husband will turn 38 in August. Both parties have a history of psychiatric illness. The husband has previously been treated for depression. According to Dr F’s report, the wife “presents as reasonably well…”. Given the nature of the wife’s condition, it is tolerably safe to assume that that prognosis is dependant upon the wife being compliant with treatment, which currently involves “regular medication [being] given in the form of an injectible antipsychotic medication, administered every two weeks.” The wife’s prognosis is, nevertheless, guarded. Dr F says:
The symptoms of [the wife’s schizophrenia] are improving with treatment and I would expect some ongoing improvement. As it is still relatively early in the course of [the wife’s] illness, it is difficult to make a firm statement about prognosis, but in general terms people with schizophrenia tend to experience recurrent acute episodes of their illness and there may often be a gradual decline in an individual’s function over years.
Consistent with that, and as some measure of the nature and extent of the wife’s illness, Mr Cethenes Senior describes himself as his daughter’s carer and the need for, and fact of, that care seems plain on all of the evidence before me. Further, Dr F’s report suggests that the wife will likely require some degree of “care” for the rest of her life.
It is necessary to consider the property and financial resources of the parties by reference to what each would receive in respect of the mooted contributions division just referred to (s75(2)(b)). That can be seen represented as follows:

Husband

Wife

T

$365,000

Trust (R Tyler) 50%

$195

$195

Trust (L) 50%

$1015

$1015

Superannuation

$16,500

Legals (Add back)

$23,000

$27,000

C

$710,000

(C Mortgage)

($48,000)

TOTAL

$405,710

$690,210

Adjustment for 40% / 60%

$32,600

($32,600)

As earlier mentioned, the husband says he has been employed post separation and is earning a modest income. He said in oral evidence that he has been in fairly consistent employment since his late teens and has not had any great difficulty acquiring employment. The wife has recently completed further studies so as to, she says, assist her in obtaining employment. One might hope otherwise, but the evidence, particularly that from Dr F, suggests that this might be extremely optimistic to say the least – at least in so far as regular, remunerative employment is concerned. I consider the husband has a greater capacity for remunerative employment than the wife, albeit that it is likely to be productive of modest income.
If the husband retains the T property, however, he will have the benefit of an additional rental income from that property.
The wife might be seen to have significantly greater future needs than the husband by reason of her illness and the guarded prognosis in respect of it. Yet, it is plain that her parents have been the source of past financial assistance and she lives with them and is cared for by them. Her needs, the “commitments necessary to support herself”, are significantly less than what they otherwise might be if that support was not present. So, too, the husband’s depression cannot be ignored. A measure of his lack of independence and the extent to which his necessary commitments are, too, reduced is the fact that he has lived with his parents for the great bulk of the nearly three years since separation and the evidence does not reveal any plans to change that situation.
It was contended by counsel for the husband that the wife is entitled to a disability pension (s 75(2)(f)). In support of that contention, counsel tendered various guides and factsheets prepared by Centrelink regarding payments that may be available to a person with an illness or disability.
It is not in dispute that the wife is not currently receiving a Government pension or allowance as a result of her mental illness, nor, apparently, has she in the past.
Whilst counsel for the husband submitted that the wife is, on the information prepared by Centrelink, eligible to receive a pension, I am not prepared to make such a finding. Whilst the admissibility of the evidence just referred to wasn’t challenged, its probative force pertains to what may or may not apply generally to potential applicants for a pension. It does not in my view, sustain findings as to what may or may not be the conclusions reached by Centrelink in respect of an application not yet made by the wife in circumstances where no such application has been made or foreshadowed in the past.
The parties’ relationship was of relatively short duration. There are no children. The evidence suggests that it was a dysfunctional relationship lived in the context of a wider, conflicted family setting. The parties, each of whom had difficulties of their own had, by any standards, a modest pre-relationship lifestyle. Little has changed in that respect. Each of the parties continues to live with their parents. The relationship has had little impact on the standard of living enjoyed by each.

S 79(4)(e) Assessment

The difference in income and income capacity and the greater health issues and needs of the wife are predominant in persuading me that an adjustment is called for in favour of the wife.
That adjustment, expressed in dollar terms, might be greater but for the modest nature of the husband’s likely future income (his remunerative and “passive” income totals about $73,000 per year gross) and the fact that the respective needs and commitments of the parties are each contained by the support they each receive from their parents.
Yet, while noting that the wife is younger than the husband by seven years or so, the husband is, on any view, better able to earn his way out of the post-separation adjustment of property in circumstances where his mental health issues do not, on the evidence before me, approach the nature or severity of the wife’s.
In my view, an adjustment of 5 per cent, or about $44,200, is appropriate.

Just and Equitable?

It cannot be pretended that the attribution of percentage (or dollar) figures representing outcomes within a broad discretion should ipso facto dictate what is just and equitable. Rather, the result so arrived at must be judged to be a just and equitable outcome in all the circumstances of the case. (See Manolis). Moreover, a focus on the so-called “steps” involved in the process can obfuscate the essential task. (See Norman at [54] – [61] and, in particular, the quotation from Mallett there contained).
If it is otherwise within the bounds of the ultimate exercise of the discretion, it seems to me just and equitable that the husband should retain the T property and the wife should retain the C property. The latter is subject to a mortgage but the wife’s parents have made the repayments, and, in my judgment, likely will continue to do so.
In my judgment, a division of property in accordance with the percentages and dollar amounts earlier concluded, does permit of orders which reflect that outcome:

Property

Husband

Wife

T

$365,000

Trust (R Tyler)

$195

$195

Trust (L) 50%

$1015

$1015

Superannuation

$16,500

Legals (Add back)

$23,000

$27,000

C

$710,000

(C Mortgage)

($48,000)

Provisional totals

$405,710

$690,210

Wife’s Entitlement 65 per cent

$712,300

Husband’s Entitlement 35 per cent

$383,500

Adjustment

($22,100)

$22,100

As can be seen, the division of property there outlined assumes the retention of each of those pieces of real property and an equal division of the very modest amounts of cash that essentially represent what is left of rent payments flowing from a joint asset.
The result there mooted, however, would require the husband, who lives with his parents, suffers from depression and has a modest income, to find about $22,100 when there is no available cash fund from which to meet it and where his property and resources are otherwise modest. The husband does, of course, have $16,500 in superannuation. This is, of course, an extremely modest amount for a 38 year old man. If a splitting order was to be made such that the wife received the whole of that amount (so as to accommodate most of the $22,100 required by way of adjustment), it would leave the husband with no superannuation in circumstances where the nature, form and characteristics of that interest and the means of its acquisition can be seen to differ from the parties’ property and the manner of that property’s acquisition. In addition, the effect of such a splitting order would be to provide a very modest sum to a 31 year old with little realistic prospects of future remunerative employment and with the receipt of any superannuation benefit deferred for over 20 years.
I cannot see how such an order could be just and equitable.
The mooted adjustment represents about 2 per cent of the pool. That is, it is well within the margins of a very wide discretion and an overall result about which reasonable minds could differ. Put another way, if the requirement to make any such cash adjustment is removed, the overall settlement represents about 63 per cent to the wife and about 37 per cent to the husband – or a disparity of 26 per cent or about a quarter of the pool with a dollar value in the region of $250,000.
In my judgment, the orders resulting from such a result in the manner indicated by the above table, but without the requirement for the husband to make the adjustment there referred to, represents a just and equitable outcome in this case.
I will order accordingly.

I certify that the preceding one hundred and ninety-one (191) paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Murphy delivered on 29 March 2012.

Associate:

Date: 29 March 2012

[2012] FamCA 188

29 March 2012

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Civil Procedure

Legal Concepts

Constructive Trust

Costs

Remedies

Jurisdiction

Appeal

Property - description	Value
C property	$710,000.00
T property	$365,000.00
Trust (R. Tyler)	$390.78
Trust (L) – rent moneys	$2,030.85
Husband’s superannuation	$16,492.59
Total	$1,093,914.22
Liabilities
Mortgage – Commonwealth Bank of Australia over C property	($48,799.30)
Add-backs
Distribution from rent moneys for legal fees	$50,165.06
Net	1,095,280

Husband	Wife
T	$365,000
Trust (R Tyler) 50%	$195	$195
Trust (L) 50%	$1015	$1015
Superannuation	$16,500
Legals (Add back)	$23,000	$27,000
C	$710,000
(C Mortgage)	($48,000)
TOTAL
$405,710	$690,210
Adjustment for 40% / 60%	$32,600	($32,600)

Property	Husband	Wife
T	$365,000
Trust (R Tyler)	$195	$195
Trust (L) 50%	$1015	$1015
Superannuation	$16,500
Legals (Add back)	$23,000	$27,000
C	$710,000
(C Mortgage)	($48,000)
Provisional totals	$405,710	$690,210
Wife’s Entitlement 65 per cent	$712,300
Husband’s Entitlement 35 per cent	$383,500
Adjustment	($22,100)	$22,100