Spencer and Zaber (No. 2)

FEDERAL CIRCUIT COURT OF AUSTRALIA

SPENCER & ZABER (No.2)

[2014] FCCA 895

Catchwords:
FAMILY LAW – Property – application for alteration of property interests – credit issues – constitution of the pool of assets – consequences of premature distribution of assets – assessment of this in circumstances where husband agrees to add-back – where lingering doubts remain about quantification of add-back – assessment of contribution – assessment of s.75(2) factors – just and equitable.

Legislation:

Family Law Act 1975, ss.75(2), 79

Bevan & Bevan [2013] FamCAFC 116
Black & Kellner (1992) FLC 92-287
Giunti & Giunti (1986) FLC 91-759
Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA395
Kowaliw & Kowaliw (1981) FLC 91-092
Mezzacappa & Mezzacappa (1987) 11 Fam LR 957
Stanford & Stanford [2012] HCA 52
Weir (1993) FLC 92-338

Applicant:

MR SPENCER

Respondent:

MS ZABER

File Number:

SYC 3760 of 2011

Judgment of:

Judge Altobelli

Hearing dates:

10-12 July 2013, 28-29 January 2014 and 14

February 2014

Date of Last Submission:

8 April 2014

Delivered at:

Sydney

Delivered on:

4 June 2014

REPRESENTATION

Applicant:

In person

Counsel for the Respondent:

Mr Guterres

Solicitors for the Respondent:

Craddock Murray Neumann

Counsel for the Independent Children's Lawyer:

Mr Ladopolous

Solicitors for the Independent Children's Lawyer:

Legal Aid NSW Sydney Central

ORDERS

That within 90 days from the date of these Orders:
(a)The Wife will pay to the Husband the sum of $164,462; and
(b)The Husband shall do all acts and things and sign all documents necessary so as to transfer to the Wife all of his right, title and interest in the property at Property S (hereafter the “Property S property”);
(c)That simultaneously with the above Transfer the Wife shall do all acts and things and pay all monies so as to discharge the Husband’s liability pursuant to any mortgage over the Property S property and provide to the Husband a copy of the discharge of mortgage to evidence same.
That pending the Transfer of the Property S property the Wife shall have the sole occupation of the property, to the exclusion of the husband.
That pending the Transfer of the Property S property the Wife shall pay all monies and indemnify the Husband in relation to;
(a)Any mortgage registered on the title to the Property S property including all repayments of principal and interest in relation thereto; and
(b)All rates, taxes and utilities in relation to the Property S property.
That in the event the Wife does not comply with the terms of Order 1 hereof the parties shall forthwith thereafter do all acts and things and execute all documents so as to list and sell the Property S property by auction at the earliest possible date and at a price to be agreed upon between the parties with the proceeds of sale to be disburse in the following manner and priority:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Discharge of the mortgage to Westpac Bank;
(c)Payment of the $164,462 to the Husband, together with interest calculated under the Family Law Act 1975, its Rules and Regulations, calculated from 90 days after the date of these Orders;
(d)The net balance to the Wife.
That, within 14 days of the date of these Orders the Husband shall do all acts and things necessary so as to cause the Honda CRV, registration number [registration omitted], to be transferred to the sole name of the Wife and the Wife shall hereby indemnify and keep indemnified the Husband in relation to all liabilities in respect of the said motor vehicle.
That unless otherwise specified in these Orders:
(a)Each party shall be solely entitled to all chattels, goods, motor vehicles, furniture, furnishings and any other property in the possession or control of such property as at this date;
(b)Each party shall be solely entitled to any monies, shares, and debentures which stand in such party’s name as at this date;
(c)Each party shall be solely entitled to any superannuation benefits held in such party’s name and each party hereby foregoes any claim they have to any superannuation benefits belonging to or earned by the other.
Each party shall be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party’s name as at the date of these Orders.
That the parties shall each do all acts and things necessary to give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
That should either party fail or refuse to sign any document required to give effect to these orders then the Registrar of this Court (Sydney Registry) is hereby appointed pursuant to Section 106A of the Act to sign the document in the place of the party in default and to do all acts and things necessary to give the document full force and validity.

IT IS NOTED that publication of this judgment under the pseudonym Spencer & Zaber (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 3760 of 2011

MR SPENCER

Applicant

And

MS ZABER

Respondent

REASONS FOR JUDGMENT

Introduction

These reasons for judgment explain why the Court has made orders in the financial aspect of the dispute between the parties. By way of separate reasons, the Court has explained the parenting orders made in this case. Many of the observations about the parties made in that judgment, as well as the Court’s comments about this litigation, also applies in the present case.
The applicant in this case is the husband. He is 45 years old and describes himself as a [occupation omitted]. The respondent is the wife. She is 51 years old and is a [occupation omitted]. The wife arrived in Australia in 1989, from Shanghai, on a student visa and has lived here since. Having met a few years earlier, they started living together in 1997 and married in 1999. They have two children, [X] who is 13 and [Y] who is 10. Both children live with their mother and spend substantial and significant time with their father, each alternate weekend, as well as during school holidays.
The husband and wife are unable to reach agreement in relation to financial matters between them.

Background

One of the issues in this case is to ascertain precisely what assets each of the husband and wife had when they commenced co-habitation.
It is common ground that in 1999, just a few years after they commenced co-habitation and before they married, they purchased an apartment at [M] which was funded primarily by way of a home loan. At the time of purchase their equity was minimal – as little as $20,000. There is a dispute about who contributed this equity but, in the end result, not much turns on this.
The husband and the wife managed to reduce the amount owing on the mortgage quite substantially. There is a dispute between them as to who did what, using funds from what source. What is clear from the evidence, however, is that the combination of whatever they each brought into the relationship, together with some very sound returns on investment, resulted in the mortgage being paid down to a very low level. By 2008, the parties sold the property at [M], and purchased what is now the former matrimonial home at Property S.
The year 2008 was significant for another reason. Clearly, and at least from the husband’s perspective, the marriage became, or had at least become, an unhappy one by this time. His own evidence is that he saw a solicitor in early 2008 to discuss a possible separation. Moreover, again based on his own evidence, from 2008 he established what was referred to in his own evidence as a secret bank account, in the sense that the mother did not become aware of its existence until well after separation. Even on the husband’s own evidence part of his income was diverted away from the household, into this account, together with other joint funds. Even on his case a substantial part of this money was then sent overseas for what he described as philanthropic purposes. The creation of the secret account, and the diversion of funds overseas, contributed to, or greatly exacerbated the wife’s mistrust of the husband, and a considerable portion of the hearing was addressed to evidence about this issue.
By February 2010 the parties had separated on a final basis, after a trial separation. The husband withdrew half of a redraw facility, in the amount of $8,800 and placed the same in his name. In any event, by the time of separation the husband and the wife had been co-habiting about 13 years. The husband initially moved out to [suburb omitted], and then subsequently to [suburb omitted].
The present proceedings were commenced in 2011, and dealt with both parenting and property issues.

The Orders Sought

The orders sought by the husband are contained in his Sixth Amended Application filed 8 July 2013. Those orders are reproduced in the first schedule to these reasons.
Focusing on the substantive matters only, the husband seeks a division of matrimonial property as to 60 per cent in his favour, and 40 per cent in the wife’s favour. He raises a number of issues that may be described as add-back issues, which will be discussed in these reasons.
The financial orders sought by the respondent wife are contained in a document entitled “Proposed Minute of Order Property” which was provided by her Counsel on the first day of the hearing at 10 July 2013. This document is reproduced in the second schedule to these reasons. It is particularly helpful because it attempts to compare the orders sought by the wife, as against the orders sought by the husband. In substance, the wife’s contention is that she would have all of the non-superannuation assets and her superannuation, but that the husband be entitled to retain his superannuation.
Each of the husband and the wife contend that they made a greater initial contribution at separation.
Each of the husband and the wife contend that they made a greater contribution during, and after the marriage up until the date of the trial.
The wife contends that there should be an adjustment under section 75(2) of the Family Law Act 1975 to reflect her greater needs, but the husband contends (doing the best the Court can to understand his proposals in this regard) that she does not have greater needs over and above his.
There are significant issues in this case about the constitution of the asset pool, with each party asserting that there should be add-backs.
Each party contends that there are serious issues of credit, and the other’s evidence should not be accepted by the Court.
The Court will need to make findings about each of these issues, having regard to the evidence.

The Evidence

The husband relied on the following evidence, in his case:
a)Amended Initiating Application, filed 13 December 2013;
b)Financial Statement, filed 14 June 2013;
c)Affidavit of Mr Spencer, filed 14 June 2013;
d)Affidavit of Mr Spencer, filed 10 December 2013; and
e)Affidavit of Mr Spencer, filed 8 July 2013.
The husband represented himself in these proceedings. He was extensively cross-examined.
The wife relied on the following evidence in her case:
a)Amended Response, filed 29 June 2012;
b)Financial Statement, filed 25 June 2013;
c)Affidavit of Ms Zaber, filed 27 October 2011; and
d)Affidavit of Ms Zaber, filed 26 June 2013.
The wife was extensively cross-examined.
Each party tendered in evidence a substantial volume of documents, all of which the Court has had reference to.
This hearing took six days of court time. The Court has already made certain observations about the conduct of the litigation, in the parenting judgement. Each party was required to file written submissions, as the Court was not prepared to allocate Court hearing time after the evidence concluded. The Court has had regard to the submissions as well.

The Applicable Law

This is an application under section 79 of the Family Law Act 1975 which relevantly provides:
Alteration of property interests
(1) In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c) an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
...
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s.75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan [2013] FamCAFC 116, the Full Court of the Family Court of Australia considered the High Court’s decision in Stanford & Stanford [2012] HCA 52, which provided guidance on how section 79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four-step approach articulated by the Full Court in Hickey & Hickey & Attorney General for the Commonwealth of Australia [2003] FamCA 395, but on the basis that it is a shorthand distillation of the words of section 79, as opposed to being a statutory edict. The four steps articulated in Hickey at paragraph 39 are:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
The decisions in Stanford and Bevan also emphasise the importance of making findings that any order is just and equitable for the purposes of section 79(2), independent of the section 79(4) process. In most cases, such as the present one, it makes no difference to the outcome of the alteration of property interests exercise. Even if the just and equitable consideration were treated as a threshold issue in this case the parties have, by their actions (separation, and re-ordering of their financial lives since then), and claims (divergent claims about their property under section 79 of the Act), indicated that they themselves consider it just and equitable that some order be made under section 79 adjusting their property interests as presently held. It is clearly just and equitable in this case to make an order.

Both decisions also emphasise the importance of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. This is not inconsistent with step one in Hickey.
A problem that commonly arises, and indeed does arise in this case, relates to property that once existed but no longer does. It is no longer appropriate to notionally “add-back” this property. This disposed of property may still be significant, however, and needs to be considered as part of the history of the marriage, as well as a section 75(2)(o) consideration. As the Full Court said in Bevan, such disposals must be dealt with carefully. In practical terms this means carefully assessing the evidence about the disposal, attempting to quantify it if this is at all possible, and then assessing its weight whilst neither placing too much, or too little, weight on it. Maintaining jurisprudential rigour, transparency and accountability may well be challenging in the era post the demise of the traditional add-back.
A significant issue in this matter was the alleged non-disclosure of the husband. Attempting to deal with non-disclosure often puts the other spouse to considerable difficulty with regards to investigating their financial affairs. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:
This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC 92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti & Giunti (1986) FLC 91-759, and Mezzacappa & Mezzacappa (1987) 11 Fam LR 957; (1987) FLC 91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken.
It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…
We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors.
The wife raised what is, in effect, a waste argument. A succinct statement of the law in this regard is the statement by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76 644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
This is probably better understood as an issue about property that once existed, but no longer does.

The Balance Sheet

In order to adjudicate on the multiple issues arising about the constitution of the balance sheet in this case, the Court will adopt, as the starting point, the version contended for by the husband, which is reproduced below. The extensive notes to the balance sheet, prepared by the husband, have not been reproduced. They are in the nature of submissions rather than an aide for interpretation of the document.

Balance Sheet v3.0 Note: This document can be sent by electronic means between the parties prior to it being filed at court.			Name		Spencer & Zaber
			File No		SYC 3760 of 2011
			Date		17 Feb 2014		Time 10.00am
			Before		Judge Altobelli
Ownership		Description	Wife’s value			Husband’s value
ASSETS
1	Joint	Property S	$1,050,000.00			$1,050,000.00
2	Husband	Westpac Embargoed Shares (175 shares)	$4,987.50			$4,245.00
3	Husband	Westpac Bank account ([1])	NK			$79
4	Wife	Westpac Bank account ([2])	$1,408			$1,408
5	Wife	Westpac Bank account ([3])	$6,696			$6,696
6	Husband	[F] ([omitted] business)	NK			0
7	Wife	Household Items (including piano and jewellery)	$8,000			$8,000
8	Husband	Household Items	$6,000			$200
9	Husband	Iphone, laptop and other computer equipment	$2,000			$200 + $949
10	Husband	1999 Ford Festiva	$4,000			0
11	Husband	2004 Honda CRV	$11,650			$11,650
11.1	Wife	New household items	NK			$1000
11.2	Wife	Iphone 5, ipad mini, Toshiba laptop and other computer equipment	NK			$2000
11.3	Husband	New household items	NK			$350
Total		$1,094,741.50			$1,086,777.00
ADDBACKS
12	Husband	Transfer of funds between home loan account [5] to husband’s credit account [6]		$13,687.64		0
13	Husband	Transfer of funds between home loan account [7] to husband’s [6]		$11,183.03		0
14	Husband	Transfer of funds between home loan account [7] to husband’s credit a/c [8]		$8,630.91		0
15	Husband	Cash withdrawn from joint account [4] and deposited into husband’s a/c [9]		$10,470		0
16	Husband	Transfer of funds from jointly used credit card to husband’s credit a/c [6]		$1,950		0

17	Husband	Miscellaneous withdrawals from joint home loan accounts	$21,194.21	0
18	Husband	Sale of MQG shares	$4,893.75	0
19	Husband	Salary diversion of the Husband between 20.11.08 and separation into a/c [9]	$13,886.79	0
20	Husband	Withdrawal of funds from the joint home loan account [7], immediately post separation on 8 February 2010	$8,800	0
21	Wife	Post separation credit card debt	0	$10,429

22			Wife			Legal fees			0	$78,391.06?
						Costs inclusive of GST
						Costs incurred with Fiona Reid		$1,306.25
						Costs incurred with Jennifer Weate & Associates		$15,136.26
						Costs incurred with Blackman Legal		$11,948.55
						Costs incurred with Craddock Murray Neumann		$25,000 ?
						Costs incurred with Counsel Paul Guterres		$25,000 ?
						TOTAL		$28,391.06 + $50,000 ?
23			Husband			Legal fees			NK	$3,000
24			Husband			Wire Service Sending			Incorporated above	$60,743.00
24.1			Husband			Overlooked Western Union sending on letter			$6,832.91	$6,832.91
24.2			Wife			Holidays			NK	$15,000
24.3			Husband			Post Separation Mortgage payments			NK	$20,241.50
24.4			Husband			Post Separation Home And Contents insurance payments			NK	$2,300
24.5			Husband			Extra Curricular activities chosen by Wife billed to the Husband’s [M] Fee statement			NK	$2,023.16
24.6			Wife			ICL fee prorata rebate 25% of $12,728.80			NK	$3,182.20
Total						$101,529.24	$202,142.83
LIABILITIES
25		Joint			Westpac Home Loan Acc [10] [10] Loan Acc				$366,293	$366,293
26	Husband			Westpac Personal Loan					$50,929.48	$50,929.48
27	Husband			Westpac Mastercard					$2,189.60	$2,189.60
28	Wife			Westpac VISA Card					$6,320	$6,320
Total				$425,732.08	$ 425,732.08
SUPERANNUATION
Member				Name of Fund			Type of Interest		Wife’s value		Husband’s value
29	Wife			[F] Super			Accumulation Interest (G16)		$132,404.98		$132,404.98
30	Husband			[B] Super			Accumulation Interest (F84)		$124,365.69		$124,365.69
Total				$ 256,770.67		$256,770.67

FINANCIAL RESOURCES
Ownership	Description	Wife/de facto partner’s value	Husband/de ^facto partner’s value
31	0	0
Total	$ 0.00	$ 0.00

It should be understood that the reproduction of the husband’s balance sheet is merely the starting point, and it should not be taken as an acceptance by the Court of any of the matters that the husband contends for. The wife contended for her own balance sheet, but all of her contentions are captured in the husbands anyway.
The balance sheet needs to be approached on an item by item basis.
There is a dispute in relation to the value of the Westpac shares, at item 2. There was consensus that this would be determined by reference to the Australian Stock Exchange value as at the date that the first draft of these reasons for judgement was prepared. This is somewhat artificial, the Court recognises, but a pragmatic approach was felt justified in order to prevent a further disproportionate application of judicial resources to the determination of this case. That value will be $34.00 per share, total value being $5,950 for 175 shares.
In relation to item 3, the husband’s value will be accepted, in the absence of other evidence.
In relation to item 6, the husband’s nil value of [F], will be accepted in the absence of contrary evidence.
In relation to items 8 and 9, the husband’s values will be accepted, as admissions against interest, in the absence of other evidence.
In relation to item 10, the husband’s Ford Festiva, the husband’s evidence about this is that he sold it for $1,700 on 27 January 2013. On the basis that this is the only evidence, that figure will appear at item 10.
In relation to items 11.1 and 11.2, again in the absence of any expert evidence, nil values will be attributed to this.
In relation to 11.3, the husband’s value will be accepted as an admission against interest.
Items 12-17 represents property once in existence but no longer so, as contended on behalf of the wife. These items are highly contentious, and amount to $67,115.79. The evidence about this will be discussed below. As it turns out, there is duplication between items 12-17, and 24-24.1. Double counting is avoided if items 12-17 are regarded as nil.
Item 18 is the sale proceeds of Macquarie Bank shares that the husband owned. Despite the husband’s opposition to this, the sale proceeds of these shares should be taken into account, on the basis of the husband’s own evidence that they were property held by him before separation which he sold without the wife’s knowledge and used for purposes which did not benefit her. As it is property no longer in existence, however, it cannot appear on the balance sheet and all this has been taken into account in other ways. Item 18 will be nil.
Item 19 is in dispute between the parties. The wife contends that the figure represents that part of the husband’s salary that was diverted into the secret account in the last two years of the marriage. Factual findings will need to be made about this, and this is discussed below. It does not need to appear in the balance sheet.
Item 20 represents the $8,800 withdrawn by the husband, on separation, from the offset facility attached to the joint home loan account. The Court is not prepared to add this amount back into the balance sheet, or to consider it, for a number of reasons. The wife had access to a similar amount. The attempt in cross-examination of the husband to trace the application of these funds does not rule out the possibility that the wife and children derived some benefit, directly or indirectly from it. Whilst the evidence is unclear, on balance there is no basis for adding these funds back or taking it into account separately.
Item 21 represents the husband’s contention as to the wife’s post-separation credit card debt. It is hard to understand why he would want this taken into account, but in any event there is no warrant to do so. The wife makes a claim for post-separation contribution that might, indirectly at least, take into account any debt that she says she incurred for the family in the post-separation period. Even if that were the case, it is impossible to ascertain why this would appear on the balance sheet, and it should thus be deleted.
In item 22 the husband contends that the wife’s legal fees should be added back or taken into account. There is no basis for doing so. What evidence there is before the Court about the source of the funds used by the wife to pay her legal fees is that it was income and resources available to her, after separation. From the evidence the Court discerns that the husband was clearly aggrieved that he was paying what he considered to be onerous child support obligations in the post-separation period, and that this might have been used to fund the legal case against him. Whatever the husband’s perceptions may have been, and as erroneous as they may have been, there is no basis for adding back or taking into account funds expended in the post-separation period when the only evidence suggests these funds came from the wife’s post-separation resources. Item 22 is not allowed.
Item 23 is likewise not allowed. The most likely source of any funds used to meet legal fees of the husband was his own income.
Items 24 and 24.1 are significant in the sense that the husband concedes that there should be added back into the balance sheet an amount totalling $67, 575.91 being the amount he agrees he sent off to the Philippines for what he described as “philanthropic” purposes. Given his concession, these reasons will not seek to draw the distinction between add-backs, or money once in existence but no longer so, for this item. The case about add-backs needs to be properly understood in this context. Even the husband concedes that he secretly, and inappropriately (with the benefit of hindsight) remitted funds overseas which did not benefit either the wife or himself. The wife’s contention is about the quantum of these remittances, and thus the amount that should be added back. She contends for a higher figure. Indeed, her case about non-disclosure is more generalised. Thus, for example, in the balance sheet contended on her behalf in her Counsel’s final submission there was not a specific add back figure on the basis of her contention that the true amount of the amount that the husband put beyond the reach of the wife in the last two years of the marriage still cannot be ascertained, even after six days of hearing, and that this should thus be a significant section 75(2) adjustment working in her favour. Obviously, specific findings will need to be made in this regard. As it turns out, the Court accepts the husband’s contentions in this regard. The figures he contends for at items 24 and 24.1 will remain in the balance sheet.
Item 24.2 is an add back contended by the husband for the wife’s expenditure on holidays. There is no basis for this contended add back, either in law, or on the facts. Item 24.2 is not allowed.
In item 24.3 the husband contends that there should be added back the mortgage payments that he made in the post-separation period, totalling $20,241.50. The juridical basis of this is most unclear. The evidence suggests for a substantial period post-separation the husband paid one half of the mortgage on the former matrimonial home, at a time when the wife and children were in sole occupation. He stopped paying half the mortgage when child support was assessed. Throughout the entire post-separation period, he also paid the private school fees for their daughter [Y]. The husband’s post-separation financial contribution should be considered in that context, ie, assessing contribution, and not as an add back. Item 24.3 is not allowed.
The same conclusion applies to items 24.4, and 24.5, as in relation to 24.3. These are purported add backs are not allowed.
Item 24.6 is irrelevant. No order has yet been made for the Independent Children’s Lawyer’s costs. As it turns out, an order for costs in favour of the Independent Children’s Lawyer is inevitable, but that provides no basis for this to be an add back, of some sort.
Items 26, 27 and 28 are contended add backs in relation to liabilities. The Court does not allow any of these. In relation to the MasterCard and Visa Card debts, the strongest inference to be drawn from the evidence that these were debts incurred in the post-separation period which is almost four years now. In relation to the husband’s Westpac personal loan, the Court could not understand any juridical basis for including this on the balance sheet in circumstances where so little is known about it, where such a long period has elapsed since separation, and where a real cloud hovers over the financial affairs of the husband in the last two years of the marriage, and since separation.
It must be obvious that certain factual findings need to be made before the balance sheet can be finalised. Before discussing the relevant evidence, the Court will made some more general observations, and findings, about credit issues.

Credit Issues

The Court had the opportunity to observe both the husband and wife in cross-examination over several days. Certain observations have been made about both of them in the context of the parenting case. In the parenting case, however, credit issues were neither determinative, nor even influential. In the financial case, however, factual findings need to be made some of which may hinge on credit issues.
Neither the husband nor the wife were impressive witnesses. Both were unresponsive at times, and uncooperative in cross-examination. Both were focused on (indeed sometimes obsessed with) matters of form, and not matters of substance. The power struggle that was observed between the parents in the parenting case, was played out in the context of the financial case, with each alleging that the other controlled the finances. Their attitudes towards each other manifested deep distrust. The husband was flippant at times about answers to questions, the wife seemed indifferent about some of her answers. They were both evasive at times, but the husband more-so in relation to financial matters.
There is substance to the complaints that each made about the other in relation to non-disclosure, selective disclosure, or disclosure on terms that are suitable only to them.
The husband’s capacity to split hairs, his tendency to make long speeches which were in the nature of submissions rather than evidence, and his perception of his own virtuousness, was a constant theme of his evidence.
Both husband and wife were plainly unconvincing about certain aspects of their evidence. Her distrust of him coloured all of her evidence and caused her not to accept otherwise logical explanations. He failed to see how his own admitted deception of the wife in the last two years of their marriage would cause her seeming paranoia about his finances. His response to challenges about his evidence, and allegations of non-disclosure, was to swamp the wife, her representatives, and indeed the Court with vast amounts of detail and documentation intended, no doubt from his perspective, to provide clarity, but which more often than not added opaqueness to the evidence.
This is not a case where generalised credit findings can be made adverse to either the husband, or the wife. In reality the Court found both of them untrustworthy at times, and on selected issues. Where it becomes important, the Court will make more nuanced and specific findings, based on the relevant evidence, but taking into account the more generalised observation set out above.

It is necessary, however, to deal with the specific submissions in relation to credit made on behalf of the wife. So much of her case hinged on her case about the unreliability of her husband’s evidence. For example, her Counsel submitted that the wife was a witness of truth who gave forthright evidence that was compelling, consistent, and most critically reliable. It may well be that the partisanship of those representing the wife have made it difficult for them to see the problems in the wife’s own evidence, and importantly her unreliability as a historian. In relation to matters of non-disclosure, for example, the wife’s case at its highest is that she does not know.
The wife, and those who represented her valiantly, and fastidiously, sought to recreate what they considered to be the truth in relation to the husband’s financial dealings in the last two years of the marriage, and since separation. What they may have underestimated, however, was the husband’s obsessive attention to detail, his almost innate ability to gather documents which cast doubts upon the wife’s assertions, and his ability to provide plausible explanations.
The scathing critique of the husband’s evidence, contained in closing submissions, ignores the reality in this case of the concessions that the husband has made about moneys that were sent overseas, and which needed to be added back into the balance sheet. Not only did the husband make concessions, but during the course of the evidence, made even further concessions when it became apparent that he had understated the add back (Item 24.1 on his contended balance sheet).
The criticism of the husband that he was argumentative is unquestionably borne out by the evidence. The Court’s criticism of him in this regard is scathing but, the Court needs to recognise that there is a real chance that the husband’s data driven obsessiveness and capacity to split hairs pertains to his character, rather than indicative of the more broadly based assertion of the contempt of the truth that is implicit in the wife’s case.
Notwithstanding the above, the Court accepts the submissions made on behalf of the wife in relation to specific aspects of the husband’s case. The Court accepts, for example, that the husband’s contention that the wife held secondary cards on his primary credit cards was wrong. The Court accepts that the husband’s contention that it was entirely his idea to invest in Colonial mutual investments was also wrong given that she held those accounts prior to the commencement of the relationship. The Court accepts that the husband was plainly wrong in certain matters contended for in his sworn financial statements, particularly as regards whether the expenses contained therein were met purely by him, as opposed to shared with his current wife. The Court accepts the submission that the evidence the husband led about email communications between the parties was inherently unreliable. The fact is, however, that so little of that correspondence informs the decision in the financial matter.
It is simply not possible for the Court to be as dogmatic about the husband’s credit as the wife would assert. A more nuanced approach needs to be adopted.

Evidence about Remittances Overseas, Diverted Income and Secret Accounts

The matters conceded by the husband have been previously noted. In particular, his case is that as a result of his conduct in the two year period before separation amounts totalling $67,575.91 should be added back into the asset pool.
The wife’s case is that a substantially greater sum has been put out of her reach. The wife’s case in relation to this has evolved, over time. For example in her affidavit filed 29 June 2012, not read in her case, but in effect read in the husband’s case, she contended at paragraph 25, referring to appendix 15, that the “husband wasted a total sum of $93,175”. In her affidavit filed 26 June 2013, and relied on by the wife at the final hearing, in paragraph 346, she asserts:
After review of all the financial documents that have been provided to me, I am aware that at least an amount of $82,796.33 has been taken by [Mr Spencer] from our joint accounts and used for his own purposes prior to our separation.
Her attention then turns to transactions in the post-separation period. Paragraph 347 of the said affidavit she opposes:
I have not been in a position previously to review the transactions [Mr Spencer] has made post our separation. I’m currently in the process of making those reviews now that I have access to the bank statements required. For the period post-separation until February 2011, I have seen that a further $52,368.92.
At paragraph 348 she asserts that there have been further transfers and withdrawals.
The annexure YZ 55 purports to be a summary of the amounts that have been transferred or withdrawn from various accounts (refer paragraph 348 affidavit).
A significant point emerges from the wife’s own evidence at this point – she herself makes a distinction between transactions before separation, and transactions after separation. It is hard for the Court to understand the wife’s concerns about post-separation transactions by the husband unless she can directly establish that joint funds were used for the purpose or joint debt was increased for that purpose. One must not forget that in the post-separation period the wife was in occupation of the former matrimonial home, was earning her own income, and the husband was paying half the mortgage for a considerable time. Even after that ceased, he was paying child support as assessed. Moreover he was paying [Y]’s school fee for a period as well. If the husband chose to use his income for what he himself describes as philanthropic purposes in the post-separation period, and this does not prejudice the wife, it is hard to understand how the post-separation expenditure is relevant. If the husband incurred debt for which he is solely responsible, for the above purpose, that is a matter for him and provided it has no impact on the balance sheet for present purposes there is no disadvantage to the wife. If the husband disposed of assets available at the time of separation for his own post-separation purposes, then obviously this needs to be brought into account. That is why the Court must take into account the sale proceeds of the Macquarie shares.
By the time of closing submissions, however, the wife’s case further evolved. There can be no criticism for this, for there had been six days of evidence. By the time of closing submissions, however, her case was that the Court is unable to precisely identify the property pool because the husband has both failed to disclose, and deliberately misrepresented his true financial circumstances. In short, the wife’s case was not an add back case, or even a waste case, but a more generalised non-disclosure case in which she could not point to property held by the husband with any specificity. Nonetheless, the Court is invited to find that the husband has access to considerable funds that he has not disclosed.
In her Counsel’s written submissions, the wife contends that the correct approach was to ascertain from the evidence not what the husband sent overseas, but the extent to which the matrimonial assets were diminished in value. She says that this amounts to $96,696 but that, in any event, this figure is conservative. Nonetheless, that amount is not to be added back, at least according to the balance sheet contended on behalf of the wife in her closing written submissions. Rather, the Court was urged to “affect a split of the known asset pool 86.5 per cent to Ms Zaber and 13.5 per cent to Mr Spencer, by allocating to Mr Spencer the [B] superannuation, shares and cash held in his name” (written submission 24 March 2014, paragraph 162). To put this figure in context, however, it was contended on behalf of the wife that contributions should be assessed in her favour at 68 per cent, thus meaning the section 75(2) adjustment would be 18.5 per cent (there is clearly a mathematical error in the submissions, which refers to 19.5 per cent) of which between 7.5 per cent – 10.5 per cent represents misappropriated funds: (see paragraph 168-170 written submissions). In other words, when the wife’s case about this non-disclosure is closely examined, her contention is, assuming acceptance of her case “the value of funds appropriated by Mr Spencer is on the available evidence conservatively estimated at 10.5 per cent of the net property pool”. Her contention of the net property pool is $957,635.83 net. In other words, in practical and realistic terms, the wife was seeking an adjustment in her favour of under $100,000 to reflect what she described as the misappropriation of funds by the husband.
Just pausing for a moment, one must reflect on the reality that emerges from the wife’s submissions, about this case. She says, in effect, that the property pool has been diminished by about one hundred thousand dollars. He concedes, in effect, that the property pool has been diminished by $70,000. A considerable part of the six days of the hearing of this case was devoted to this issue, i.e. $30,000. The real impact of this becomes apparent if the Court were to treat this as an add back of $100,000 rather than the vague, generalised section 75(2) adjustment that the wife contends for. He was entitled to some of the money that he in fact diminished prior to separation. One cannot help but wonder whether the justiciable amount in question in this case warranted the entirely disproportionate amount of legal and judicial resource that has been applied to it.
Putting aside such meanderings of the judicial mind, the focus turns to the evidence. The totality of the evidence before the Court leads it to find that in the two year period prior to separation, and probably after the husband had sought legal advice, he began to systematically divert funds out of his income into a secret bank account in his name only, as well as diverting joint funds into the said account, and using the same for purposes unrelated to the marriage, or the family. The Court concludes that the husband, in this period and subsequently, acted deceptively and out of a false sense of entitlement that he could do what he wanted with “his” income and assets. This was his reaction to the power struggle that was happening between the wife and himself certainly about money, but also in relation to the children. The husband’s behaviour, at this time, was undoubtedly duplicitous. He says his purposes were philanthropic. The evidence about this is vague. It is possible that the husband was in fact acting philanthropically, but naively, in sending moneys to people who were, in effect, strangers in need overseas, probably in the Philippines. The husband clearly has a complex personality. He is a devout Orthodox Jew. He is clearly intelligent, and articulate. He is obsessed with detail, and data driven. He was, at times, totally self-absorbed, and quite oblivious to how others perceive his actions. None of this is inconsistent with a total naivety in relation to these overseas transfers to people who, he considered, were in need of the money far more than he was.
The issue for this Court is quantification. Was it the approximate $70,000 that he contended, or the approximate $100,000 that she contends for? The answer is found in reams and reams of bank statements and spreadsheets which each party relies on. Hours of cross-examination were invested in this issue. But for the husband’s concession as to the approximate seventy thousand dollar add back, he would have enormous problems in denying his duplicitous conduct, but that is not the issue.
Whilst the husband and the wife in this case have clearly lost any sense of proportionality between what they are arguing about, and the cost of the resource that has been applied in attempting to determine the issue, this court will not lose a sense of proportionality. In the ultimate analysis, the quantification of the dissipated amounts comes down to a relatively small figure – perhaps as little as $30,000. It is not in the public interest, nor is it a proportionate application of judicial resources, to systematically trawl through the evidence in cross-examination on this topic. It is not an issue the Court can resolve in that sense. Whilst the Court has lingering doubts about the credibility of the husband, the fact remains that he was able to systematically respond and provide an often plausible explanation for everything that was put to him in cross-examination, on this issue. At best, the wife asks the Court to draw certain inferences about the husband’s conduct. That can be achieved, but it must be done in a just and equitable manner for this Court to act consistently with section 79 of the Act.
For balance sheet purposes, the Court will include in the balance sheet the amount conceded by the husband as being the figure that he appropriated for this own use. The best way to deal with the Court’s remaining lingering doubts about whether there was further unilateral dealings as contended by the wife is to make a small adjustment under section 75(2)(o) to reflect the Court’s uncertainty in this regard.

The Balance Sheet for Adjudication Purposes

Having regard to the Court’s findings set out above, the balance sheet in this case will be as follows:

ASSETS
Ownership		Description	Court’s Value
1	Joint	Property S	$1,050,000.00
2	Husband	Westpac Embargoed Shares (175 shares)	$5,950.00
3	Husband	Westpac Bank account ([1])	$79.00
4	Wife	Westpac Bank account ([2])	$1,408.00
5	Wife	Westpac Bank account ([3])	$6,696.00
6	Husband	[F] ([omitted] business)	NIL
7	Wife	Household Items (including piano and jewellery)	$8,000.00
8	Husband	Household Items	$200.00
9	Husband	iPhone, laptop and other computer equipment	$1,149.00
10	Husband	1999 Ford Festiva	$1,700
11	Husband	2004 Honda CRV	$11,650.00
11.1	Wife	New household items	NIL
11.2	Wife	iPhone 5, iPad mini, Toshiba laptop and other computer equipment	NIL
11.3	Husband	New household items	$350 .00
Total			$1,087,182.00
ADD BACKS (which the husband consents to)
Ownership		Description	Court’s Value
12	Husband	Transfer of funds between home loan account [5] to husband’s credit account [6]	NIL
13	Husband	Transfer of funds between home loan account [7] to husband’s [6]	NIL
14	Husband	Transfer of funds between home loan account [7] to husband’s credit a/c [8]	NIL
15	Husband	Cash withdrawn from joint account [4] and deposited into husband’s a/c [9]	NIL
16	Husband	Transfer of funds from jointly used credit card to husband’s credit a/c [6]	NIL
17	Husband	Miscellaneous withdrawals from joint home loan accounts	NIL
18	Husband	Sale of MQG shares (to be otherwise taken into account)	NIL
24	Husband	Wire Service Sending	$60,743.00
24.1	Husband	Overlooked Western Union sending on letter	$6,832.91
Total			$67,577.91
LIABILITIES
Ownership		Description	Court’s Value
25	Joint	Westpac Home Loan Acc [10]	$366,293.00
Total			$366,293.00
TOTAL NON-SUPERANNUATION ASSETS			$788,464.90

SUPERANNUATION
Member	Name of Fund	Type of Interest	Court’s Value
29	Wife	[F] Super	Accumulation Interest (G16)	$132,404.98
30	Husband	[B] Super	Accumulation Interest (F84)	$124,365.69
Total				$256,770.67

The net total asset pool is $1,045,235.50. Superannuation assets comprise $256,770.67. Total non-superannuation assets comprise $788,464.90, most of which is represented in the equity in the home at Property S.

Assessment of Contribution at Co-Habitation

In their evidence both the husband and the wife scramble over each other to assert the superiority of the contribution that they made at co-habitation, but both of them, in their enthusiasm, seem to have lost sight about what the exercise is actually about. For example, the law’s focus is what they had at the time they commenced co-habitation in 1997, and not so much what happened several years later. This is a significant distinction. What happened after they commenced co-habitation, with the consequent sharing of finances, is potentially quite different to what they started with. The husband’s case was that he contributed to the asset pool in a much greater proportion in two ways: firstly, (paragraph 971 of his affidavit filed 14 June 2013: A) “The concept of having both our accumulated savings in Colonial First State’s developing companies fund”, i.e., he is claiming credit for the idea to invest in this fund. The Court has already found this is most unlikely given that the wife had this investment prior to co-habitation, but even if it was the husband’s idea it is hard to extrapolate from that a claim to greater contribution. In any event, the second aspect of his case is that “the contribution from managed fund investing was 371,500 from the husband, and 134,400 from the wife.” This is explained in further detail at paragraph 909 of his affidavit where he explains the source of funds used to pay off the mortgage on the [M] property. He asserts at paragraph 909:
The … mortgage was clearly not paid off in 2006, it was paid down as –
·    From jointly owned managed fund [11] $50,250 November ’07.
·    From Ms Zaber’s managed fund [12] $100,000 April ’06.
·    From Ms Zaber’s managed fund [12] $9,000 November ’07.
·    From Mr Spencer’s managed fund [13] $214,000 March ’06.
·    From Mr Spencer’s managed fund [14] $162,400 January ’08.
A number of things become apparent from the husband’s evidence set out above. One can see how he obtained the figures that $371,000 for him, and $134,000 for his wife. What the husband does not appear to understand, but which the Court finds highly relevant, is the chronology. The parties commenced co-habitation in 1997. How funds were applied nearly ten years later does not necessarily inform an assessment of contribution at the date of co-habitation. It is necessary to find a firmer base to commence the exercise of assessing contribution.
It should be noted at this point in the reasons that to the extent that there is a dispute between the husband and the wife about the date of co-habitation (she says 1997, he says (but this is no means clear) 1998), the Court prefers her evidence over his.
The husband contends that, in 1997, the wife had $40,100 in investments in Colonial Funds. He refers to a document entitled Managed Investments Fund Statement in the wife’s name, being a record of Colonial First State, to support his contention. The wife does not dispute this. Indeed, it is part of her case. However, the wife’s case is that she had a further Colonial fund account – [14] that had a balance of $35,498.60 as at 3 July 1997. She annexes to her affidavit a document YZ 41 that she says establishes the veracity of her contention. The Court cannot see how the document supports the wife’s contention. The onus of proof to establish this was on the wife, and she has failed to discharge the onus.
The wife contends that at the time of co-habitation the husband had $3,000 in a Colonial fund investment scheme. She further asserts that “the investment that [Mr Spencer] had had a loan attached to it.” (Paragraph 314, wife’s affidavit) The husband concedes that he had a $70,000 loan which he describes as his margin loan. The existence of the margin loan is not in question. The payment of the interest on the said loan during the marriage is also not in issue. Moreover, the fact that the mortgage loan was later secured against the wife’s Colonial investment is also not an issue. The issue for the Court was attempting to establish the value of the investment that was purchased using the margin loan. It is not possible to do as the wife asserts, i.e. to treat this simply as a liability, when the documentary evidence suggests that the $70,000 was used to invest in the developing companies investment. Distributions were reinvested, it would seem, for the entire period of the life of the investment, a matter which appears to be true for both the husband and the wife. It is somewhat curious that the husband did not focus more attention in his case in trying to establish the net value of the investment at the time of its acquisition in 1997. The answer might be found somewhere in the hundreds of pages of documents in the husband’s case, but it is certainly not available, nor obvious to the Court as these reasons for judgement are being written. The most likely scenario is that, in 1997, the value of the investment was about the same as the value the margin loan. There is no doubt that the value of the investments appreciated significantly, in the following years, indeed spectacularly so, but the focus for the time being is in seeking to establish a base point of what each had at the time of co-habitation.

The husband’s case goes further, however, in also asserting that he had another Colonial investment which had a value of $35,500. Indeed, the documents corroborate his assertion. On 10 July 1997, $35,498.60 was transferred into his managed fund investment with developing companies at Colonial. It is apparent from the business records that further units were purchased in this investment. There is no other logical explanation for the $35,498 deposit into the husband’s Colonial investment in 1997. Even if the husband was wrong in his evidence that this payment was sourced from his pre-existing [B] fund (a matter strongly advocated on behalf of the wife) the fact of the deposit is unequivocal. The wife could not provide any alternative hypothesis for this deposit. True it is that the husband had himself initially, as it turns out erroneously, attributed this amount to the wife. But this isn’t even consistent with the wife’s evidence about what she had at the time of co-habitation. On balance, the documentary evidence seems to speak for itself, and in the absence of any other plausible explanation, the $35,498 deposit needs to be attributed to the husband.
Having regard to all of the evidence, as voluminous as it is, and as contentious as it is, and doing the best the Court can on the balance of probabilities at the time of co-habitation in 1997, the husband had a net investment of $35,000 in Colonial Mutual, and the wife $40,000.
As a result of what the husband described as the “stellar performances over that time period of these funds”, by 2006 they were able to pay down the mortgage on the [M] property, and this put them in an excellent position to subsequently acquire the former matrimonial home at Property S.
As previously adverted to, the husband claims that he made a special contribution as regards the developing companies investment with Colonial. The Court does not accept this. All of the documents produced to the Court in regards to this investment suggest that distributions were simply re-invested. One might rhetorically ask what sort of special skill is required to re-invest distributions or dividends in an investment that even a novice could tell was performing very handsomely?
The husband’s ultimate contention that he made a greater contribution towards the reduction of the mortgage on [M], in terms of paragraph 909 of his affidavit, extracted above, is plainly fallacious. The focus is not on whose name the funds were held, as at the time that they were redeemed and used to pay down the mortgage. This is purely serendipitous. How a husband and wife choose to structure their investments during their co-habitation and marriage rarely provides an accurate insight into the beneficial ownership of the funds. By 2006, the husband and wife had been co-habiting almost a decade. How the husband could assert that he made a greater contribution simply because the moneys in his managed fund were greater than the wife’s is incomprehensible. In the circumstances in this case, the focus begins on what they had at the time of co-habitation. On the basis of the available evidence it seems that they came in with comparable amounts. Indeed, it was relatively modest beginnings for the husband and the wife, and really it was their good fortune (rather than special skill) that resulted in their humble investment in Colonial multiplying many times over, between 1997 and 2006/07.
Accordingly, at the time of the commencement of their relationship the husband and wife made contributions that were broadly equal.

Assessing contribution at the time of separation

If one puts aside the last two years of the marriage, a period in which the Court has already found the husband was appropriating income and assets for his own use, rather than for joint benefit, the history of contribution between the parties is unremarkable. They both worked, both inside and outside of the home. He probably earned a little bit more than her, but she probably bore more of the homemaking and parenting than he did. The parties pooled their incomes during the marriage. The husband has probably exaggerated his claim of contribution to the welfare of the family, but in reality the wife has probably minimised what he in fact did. There is nothing remarkable about this period, from an assessment of contribution perspective. Like so many husbands and wives they made different types of contributions over a lengthy period and whilst there is no presumption of equality at the end of their relationship there is simply no evidence before the Court that would cause it to assess the value of one spouse’s contribution as being greater than that of the other’s.

Contribution in the Post-Separation Period

There is at least implicit in the wife’s case an assertion that she made a greater contribution in the post-separation period. She says, for example, that she was solely responsible for the family home from September 2011, when the husband stopped paying half of the mortgage. She says she has been diligent in servicing the mortgage, such that in the ensuing three years the principal had reduced by $16,000. She says she has borne the overwhelming responsibility for the care of the children in circumstances where they only spend two nights per fortnight with their father, and he had not sought any extended periods of holiday time.
The husband contends that he paid half of the mortgage between April 2010 and June 2011 in circumstances where he was paying rent, and the wife and children had exclusive occupancy of the home. He contends that he was paying house and contents insurance, paid [Y]’s [M] Private School fees, as well as the cost of extracurricular activities that were charged to him. He says that his contributions post-separation include almost a year of lawn mowing. His child support is assessed at $833 per calendar month. [Y]’s education expenses are $1555 per month.
The Court cannot discern any logical basis for the wife’s claim for post-separation contribution. There is absolutely nothing remarkable about the facts of this case that would warrant a further adjustment in the wife’s favour. Whilst she has had the sole responsibility for the mortgage over the home, she has also been the sole beneficiary of occupancy of the home, together with the children, something that she values highly.

An Adjustment under Section 75(2)?

The wife contends for a sizeable, but difficult to quantify, adjustment in her favour under section 75(2). An objective assessment of the relevant matters under section 75(2) leads to the following:
a)There is nothing about the age or state of health of the parties that would warrant an adjustment in the wife’s favour.
b)The husband’s income, and income earning capacity, is probably greater than the wife’s, but not significantly so. The financial resources available to the husband are greater than that of the wife, as he is married, his wife is earning income, they share expenses, but he has failed to disclose his wife’s financial circumstances to the Court. This is a deliberate strategy on his part. This means that ascertaining the precise disparity in the income and financial resources available to the husband and the wife is rendered much more difficult
c)Both the husband and the wife have superannuation.
d)Pursuant to orders the Court has made the wife will have the primary responsibility for the care of the children. The husband will have the benefit of an order for substantial and significant care. Having regard to the ages of the children, the wife will be bearing this responsibility for quite some time. The husband pays child support, but is clearly unhappy about the amount he is paying. He wishes to have taken into account the school fees that he pays for [Y], to attend [M] College. The father must not forget, however, that it is his desire to have [Y] there, not the mother’s. Why, in these circumstances, he should have this payment taken into account for child support purposes is beyond the Court’s understanding. It is clear that he is pursuing this issue elsewhere, and in a context where these matters ought to be determined on an administrative, rather than judicial basis. One thing can be said for certain. If this Court were being asked to decide whether the assessed level of child support should be altered to reflect the husband’s commitment to pay private school fees, it would not do so. What is known about the husband’s financial circumstances suggests that he has the capacity to pay these school fees, on top of the assessed child support. He wanted [Y] to go to [M]. He must bear the cost of doing so. It is certainly not in [Y]’s best interests for her to be taken out of this school, a consequence which the Court considers inevitable if the wife were forced to pay, either directly or indirectly. The husband is asked to consider this court’s comments in the context of whatever other actions he may take.
e)The Court had available to it evidence about the necessary commitments of each party. The Court has previously mentioned that it regards the husband’s sworn financial statements as being suspect. For example, the husband is clearly not paying the rent that he deposes to in his document, as his wife is paying half. A strong inference would be drawn that that applies to most of the household expenses that he deposes to. There can be no doubt on the evidence that the wife has greater commitments than the husband.
f)There are no relevant issues about the obligations of the husband and the wife to support any other person than their children.
g)Matters of child support have already been mentioned.
h)The wife contends that there should be an adjustment in her favour under section 75(2)(o) any other fact or circumstance, having regard to evidence which suggests the husband has been less than diligent in disclosure, and where there is evidence about the husband’s unilateral appropriation of funds in the two year period prior to separation. There is some substance to this submission. Whilst this court has treated this as an add back because of the husband’s concession, the Court still has lingering doubts about whether the add back accurately reflects the full extent of moneys that he appropriated for his own purposes, and which he described as philanthropic. A further adjustment is called for, but it will not be a significant one for reasons that have been outlined earlier in these reasons. In addition, the husband’s sale of the MQG shares needs to be taken into account.
i)The totality of the considerations discussed above lead to an adjustment in the wife’s favour totalling 15 per cent. Of this, the Court attributes 2.5 per cent to the section 75(2)(o) considerations discussed immediately above.

Conclusion

The outcome of the analysis of contributions and future needs discussed above means that the wife receives an alteration of property interests in her favour of 65 per cent. This is as just and equitable as the circumstances of this case allow. Neither party proposed a superannuation splitting order, so the focus becomes on allocating the non-superannuation assets. The wife would like to retain the former matrimonial home at Property S, and there is no reason to deny her the opportunity to do so. She will have three months from the date of the orders to pay the husband his entitlement, otherwise the house will need to go on the market for sale, and interest will accrue on the husband’s entitlement.
Having regard to the above analysis, the wife would receive 65% of $1,045,235.50, being $679,403. She already retains, or desires to retain the following assets:

Item 1

Property S house

$1,050,000

Item 4

Westpac Bank account ([2])

$1,408

Item 5

Westpac Bank account ([3])

$6,696

Item 7

Household items

$8,000

Item 11

2004 Honda CRV

$11,650

Item 25

Westpac Home Loan

$(366,293)

Item 29

Superannuation

$132,404

TOTAL

$843,865

In order to retain these assets, therefore, the wife would need to pay to the husband $164,462, allowing for some rounding off.

The husband retains all other items.
In terms of the specific orders sought by the parties, a number of issues arise. It is agreed between them that the Honda motor vehicle registered in the husband’s name be transferred to the wife. The calculations above reflect this. The wife will have three months to pay to the husband the sum ordered, failing which the home is to be sold and he is to receive $164,462, together with interest accruing from three months hence. The wife must occupy the home at her own expense. They otherwise keep what they have. The husband sought orders in relation to boxes of ITP tax statements, but the evidence does not allow findings to be made in this regard. The husband withdrew his order in relation to a Gett. There was some vague reference in the hearing to the husband seeking orders in relation to child support. No application was filed, nor would one have been allowed (by either party).
This litigation was unnecessary. Both parties contributed to this. In all likelihood their personalities pre-disposed them to intractable conflict. The wife’s claim was unrealistic, and manifestly so. Non-disclosure is not licence to engage in unrealistic ambit claims. There is a strong sense in this case that the first step in the wife’s thought processes was to establish the result that she wanted, ie, to keep the home with no payment to the husband, and then to work backwards from that and plot a path that might result in its eventual conclusion. The wife, and those who represented her, should have known as soon as the husband made a significant concession about funds misappropriated in the last two years of the marriage, that their non-disclosure argument had lost its sting. As for the husband, his ambit claim in the property settlement was equally misconceived. There is wisdom in the adage that only a fool has himself as a lawyer. Sensible legal advice, if it had been heeded, would have avoided this litigation.

I certify that the preceding one hundred and four (104) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Associate:

Date: 4 June 2014

Schedule 1 – Property Orders as sought by the Applicant Husband

Property Orders

Motor Vehicles

That the Wife pay to the Husband the sum of $4575.00 within 30 days of these Orders, being differential of the mid Red Book private price guide for each parties 50% interest in the two motor vehicles [registration omitted] and [registration omitted].
Contemporaneously with order (12) hereof and upon payment by the Wife to the Husband of the amount in order (12) hereof, the Husband sign all documents and take all steps to cause ownership over the Honda CRV motor vehicle [registration omitted] to be transferred to the Wife within 28 days of receipt of the money.
That the Wife be declared the owner and the Husband to have no claim upon:
a)All motor vehicles registered in her name.
That the Husband be declared the owner and the Wife have no claim upon
a)All motor vehicles registered in his name.

Superannuation

So as to effect a division of 40 percent in favour of the Wife and 60 percent in favour of the Husband:
a)The Wife retain all superannuation entitlements held in her name;
b)The Husband retain all superannuation entitlements held in his name.

Real Estate

The Husband and the Wife shall do all acts and things and sign all documents necessary to cause the sale of the property at Property S and the proceeds of sale to be disbursed as follows:
a)In payment of the agent’s commission and legal expenses of the sale;
b)In payment of the outstanding mortgage;
c)In payment of any outstanding tax, including but not limited to, vendor tax, land tax and capital gains tax;
d)In payment of 40% of the balance to the Wife;
e)In payment of the remaining balance to the Husband.
In the event of the sale of the Property S property by private treaty has not been effected within a period of four [4] months of listing of the property in accordance with order (17) herein, then the parties shall make all such arrangements and do all such acts and sign all such documents to procure a sale by public auction of the Property S property upon the following terms:
a)The auctioneer shall be as agreed between the parties;
b)The auction shall take place within a period of one [1] month after the deadline date for sale by private treaty;
c)The reserve price shall unless agreed upon by the parties be as proposed by the auctioneer;
d)The applicant Husband and respondent Wife shall pay half each of any expenses payable before the real property is auctioned;
e)The balance of sale proceeds obtained thereafter be disbursed in accordance with Orders 17(a) to 17(e) above.

Charge Backs/Add Ons/ Wastage

That the Wife transfer to the Husband the sum of $22041.50 within 28 days of receiving the house settlement funds; being the mortgage and home and contents insurance payments on the house she resided in, that the Husband has made on her behalf post separation.
Contemporaneously with order (20) hereof and upon payment by the Wife to the Husband of the amount in order (20) hereof, the Husband transfer to the Wife $30371.50 within 14 days of receipt of the funds, being for the Husbands personal humanitarian expenses ‘wastage’, less the Wife’s road tolls, retained furniture, plus 50% interest in sale of the Husband’s Macquarie Shares.
That the Wife be declared the owner and the Husband to have no claim upon:
a)Any account, or holding, chattel or possession registered in her name or held in her possession.
That the Husband be declared the owner and the Wife to have no claim upon”
a)Any account, or holding chattel or possession registered in his name or held in his possession.

Other Orders

The Wife will return to the Husband his boxes of ITP Tax statements in her possession.
The Mother will sign a contract to accept a Jewish Religious Divorce ‘Get’ by appearing at the Sydney Beit Din to be completed within 3 months of making this order.
On the sale of the Property S property, the Wife will allow the Husband to remove the Mezuzot (Jewish religious items) from the door frames of the former matrimonial home, the Husband be declared the owner and the Wife to have no claim upon these items.

Schedule 2 – Property Orders as sought by the Respondent Wife

Property Orders

Proposed Order	Agreed/Not agreed	Husband/ Father’ Comment
Real Estate 27. That; a) Within 42 days from the date of these Orders the Husband shall do all acts and things and sign all documents necessary so as to transfer to the Wife all of his right, title and interest in the property at Property S (hereafter the “Property S property”); b) That simultaneously with the above Transfer the Wife shall do all acts and things and pay all monies so as to discharge the Husband’s liability pursuant to any mortgage over the Property S property and provide to the Husband a copy of the discharge of mortgage to evidence same.	Not agreed Partially agreed	Property must be sold, Ms Zaber does not have enough borrowing power. IF she can pay it out.
28. That pending the Transfer of the Property S property the Wife shall have the sole occupation of the property, to the exclusion of the husband.	Not known	IF she can pay it out
29. That pending the Transfer of the Property S property the Wife shall pay all monies and indemnify the Husband in relation to; a) Any mortgage registered on the title to the Property S property including all repayments of principal and interest in relation thereto; and b) All rates, taxes and utilities in relation to the Property S property.	Not known	IF she can pay it out
30. That in the event the Wife does not comply with the terms of Order 27 hereof the parties shall forthwith thereafter do all acts and things and execute all documents so as to list and sell the Property S property by auction at the earliest possible date and at a price to be agreed upon between the parties with the proceeds of sale to be disburse in the following manner and priority: a) Payment of agent’s commission and advertising expenses and legal expenses of the sale; b) Discharge of the mortgage to Westpac Bank; c) The net balance to the Wife.	Not agreed
Other Property 31. That, within 14 days of the date of these Orders the Husband shall do all acts and things necessary so as to cause the Honda CRV, registration number [registration omitted], to be transferred to the sole name of the Wife and the Wife shall hereby indemnify and keep indemnified the Husband in relation to all liabilities in respect of the said motor vehicle.	Partially agreed	Timing contested, see my version of orders
32. That unless otherwise specified in these Orders: a) Each party shall be solely entitled to all chattels, goods, motor vehicles, furniture, furnishings and any other property in the possession or control of such property as at this date; b) Each party shall be solely entitled to any monies, shares, and debentures which stand in such party’s name as at this date; c) Each party shall be solely entitled to any superannuation benefits held in such party’s name and each party hereby foregoes any claim they have to any superannuation benefits belonging to or earned by the other; d) Each party shall be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party’s name as at the date of these Orders.	Agreed
Ancillary Orders 33. That the parties shall each do all acts and things necessary to give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.	Not agreed	Not necessary
34. That should either party fail or refuse to sign any document required to give effect to these orders then the Registrar of this Court (Sydney Registry) is hereby appointed pursuant to Section 106A of the Act to sign the document in the place of the party in default and to do all acts and things necessary to give the document full force and validity.	Agreed
35. That the Father pay the Mother’s costs of and incidental to these proceedings, on an indemnity basis.	Not agreed

[2014] FCCA 895

4 June 2014

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Jurisdiction

Procedural Fairness

Item 1	Property S house	$1,050,000
Item 4	Westpac Bank account ([2])	$1,408
Item 5	Westpac Bank account ([3])	$6,696
Item 7	Household items	$8,000
Item 11	2004 Honda CRV	$11,650
Item 25	Westpac Home Loan	$(366,293)
Item 29	Superannuation	$132,404
TOTAL		$843,865