Stella & Stella
[2023] FedCFamC1F 1092
•15 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Stella & Stella [2023] FedCFamC1F 1092
File number(s): SYC 2525 of 2021 Judgment of: STRUM J Date of judgment: 15 December 2023 Catchwords: FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS – Whether just and equitable to make any order as required by s 79(2) of the Family Law Act 1975 (Cth) – Two pool approach – Second pool (as found) comprised of assets inherited from or assets derived from assets inherited from husband’s grandmother – Husband’s grandmother’s residual estate divided into quarters – Two quarters bequeathed to each of the husband and the wife respectively – Husband’s grandmother died very shortly prior to separation – Finding that it would not be just and equitable to alter the parties respective interests in the second pool – Finding that it would be just and equitable to alter interests in the assets in the first pool – Finding of very substantial financial contributions made by and on behalf of the husband, including by inter vivos gifts to the parties from his grandmother and trust distributions to him by her trust – Finding of very substantial contributions made by the wife to the welfare of the family, including as homemaker and parent – Finding that the wife’s contributions were rendered more onerous by the husband’s alcohol abuse and physical and verbal abuse towards her – Consideration of Kennon & Kennon (1997) FLC 92-757 principle – Parties’ contributions nevertheless assessed at 40 per cent in favour of the wife and 60 per cent in favour of the husband – No further adjustment pursuant to s 79(4)(e) on account of s 75(2) factors – Section 79(4)(e) adjustment sought by the husband pursuant to s 75(2)(e) on account of the disparity between the parties’ respective contribution-based entitlements would only be to impermissibly effect “palm tree justice”. Legislation: Evidence Act 1995 (Cth) ss 63, 67, 140
Family Law Act 1975 (Cth) ss 75, 79
Evidence Regulations 2018 (Cth) reg 6
Family Law Rules 2004 (Cth) r 15.74
Federal Circuit and Family Court (Family Law) Rules 2021 (Cth)
Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Bonnici & Bonnici (1992) FLC 92-272; [1991] FamCA 86
Britt & Britt (2017) FLC 93-764; [2017] FamCAFC 27
Calvin & McTier (2017) FLC 93-785; [2017] FamCAFC 125
Chapman & Chapman (2014) FLC 93-592; [2014] FamCAFC 91
Dickons & Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Farmer & Bramley (2000) FLC 93-060; [2000] FamCA 1615
Ferguson & Ferguson (1978) FLC 90-500; [1978] FamCA 70
Ferraro & Ferraro (1993) FLC 92-335; [1992] FamCA 64
Fields & Smith (2015) FLC 93-638; [2015] FamCAFC 57
GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32
Gollings & Scott (2007) FLC 93-319; [2007] FamCA 397
Gosper & Gosper (1987) FLC 91-818; [1987] FamCA 43
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
Hoffman & Hoffman (2014) FLC 93-591; [2014] FamCAFC 92
Holland & Holland (2017) FLC 93-798; [2017] FamCAFC 166
Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378; (1984) 54 ALR 155
Kennon & Kennon (1997) FLC 92-757; [1997] FamCA 27
Kessey & Kessey (1994) FLC 92-495; [1994] FamCA 162
Mallett v Mallett (1984) 156 CLR 605; [1984] HCA 21
Martell & Martell [2023] FedCFamC1A 71
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Pavli & Beffa [2013] FamCA 144
Pellegrino v Pellegrino (1997) FLC 92-789; [1997] FamCA 52
Roverati and Roverati (2021) FLC 94-027; [2021] FamCAFC 89
Shewring & Shewring (1987) 12 Fam LR 139; [1987] FamCA 51
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Steinbrenner & Steinbrenner [2008] FamCAFC 193
W & W (1980) FLC 90-872; [1980] FamCA 63
Ward & Ward (Unreported, Full Court of the Family Court of Australia, 16 July 1980)
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Zaruba & Zaruba (2017) FLC 93-776; [2017] FamCAFC 91
Division: Division 1 First Instance Number of paragraphs: 240 Date of hearing: 5–8 June 2023 Place: Sydney (delivered in Melbourne) Counsel for the Applicant: Mr Kearney SC Solicitor for the Applicant: York Law Family Law Specialists Counsel for the Respondent: Mr Richardson SC with Mr Auld Solicitor for the Respondent: Delaney Lawyers ORDERS
SYC 2525 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS STELLA
Applicant
AND: MR STELLA
Respondent
ORDER MADE BY:
STRUM J
DATE OF ORDER:
15 DECEMBER 2023
THE COURT ORDERS THAT:
1.Within 90 days of the date of these Orders, the husband pay to the wife the sum of $1,825,730.
2.Failing compliance with order 1 herein, and such compliance continuing for a period of 14 days thereafter, the husband and wife do all things necessary to list for sale and sell the property known as and situate at E Street, Suburb F in the State of New South Wales (“Suburb F property”) at a price agreed between the parties and failing agreement at such price as may be nominated by Mr G, acting as an expert and not as an arbitrator, and forthwith upon completion of the said sale, the proceeds of sale be applied in the following manner and priority:
(a)first, in payment of all costs necessarily incurred in effecting the sale of the property, including legal fees, disbursements and agent’s commission;
(b)secondly, in payment to the wife of a sum equivalent to:
(i)40 per cent of the total of:
A.the balance then remaining; and
B.the sum of $632,117;
(ii)less the sum of $627,117; and
(c)thirdly, in payment of the balance then remaining to the husband.
3.Pending compliance with orders 1 and 2 herein:
(a)the husband be and hereby is restrained from causing or permitting any dealing in respect of his interest in the Suburb F property, including but not limited to by transfer, encumbrance or assignment; and
(b)the wife be permitted to maintain a caveat on the title to the Suburb F property in respect of her interest arising pursuant to these orders.
4.The wife be entitled to the items specified in annexure A hereto and the husband forthwith upon request by the wife do all things necessary to permit access by the wife to the Suburb F property for the purpose of taking possession of the same.
5.Save as otherwise provided by these orders, each of the husband and the wife be and is hereby be solely entitled, as against the other, to all property and financial resources in their respective names, possession or control or to which they otherwise are or may become entitled.
6.The parties do all acts and things and execute any documents reasonably necessary to give effect to these orders and should either party fail to execute any document within seven days of their being so requested, a Registrar of the Court pursuant to s 106A of the Family Law Act 1975 (Cth) be and is hereby appointed and authorised to sign such documents on behalf of such party.
7.All extant applications (save as to costs) be otherwise dismissed.
8.Any application for costs be by way of written submissions to be filed no later than 4.00 pm on 25 January 2024.
9.Any submissions in opposition to costs be filed by not later than 4.00 pm on 9 February 2024.
10.The submissions referred to in the preceding orders not exceed 15 pages in length.
11.The issue of costs be listed for hearing at 9.30 am on 12 March 2024, such hearing not to exceed one hour in duration.
ANNEXURE A
List of items to be made available for the wife’s collection
(a)Designer wall lamps x 2;
(b)Designer standing lamp;
(c)Professional photographs;
(d)Indigenous art
(e)Photographic art;
(f)Art stored in Attic;
(g)Personal suitcases stored in attic;
(h)Two tier trolley in Mr C's bedroom;
(i)Designer Table in ensuite;
(j)3 x designer chairs;
(k)Designer armchair;
(l)Wife's personal clothing that remained stored in closet in Ms D's bedroom;
(m)Ms D's clothing and personal items in her bedroom;
(n)Mr C's clothing and personal items in his bedroom;
(o)Mr B's clothing and personal items in his bedroom;
(p)All personal sporting gear and equipment in attic and garage belonging to the Wife and children;
(q)Wife's personal collection of designer ceramics and art objects;
(r)Kitchen appliance (birthday gift from Ms J);
(s)All wife's personal belongings stored in garage, including outdoor dining chairs and outdoor dining table;
(t)Mr C's personal sporting equipment;
(u)Handmade decoration; and
(v)Decorations.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Stella & Stella has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRUM J:
INTRODUCTION
These proceedings involve an application by the wife for an alteration of interests in property pursuant to s 79 of the Family Law Act 1975 (Cth) (“Act”).
By a minute of orders contained in her Outline of Case document filed on 1 June 2023, she seeks a payment to her in the sum of $3.3 million.
In her amended Initiating Application, the dismissal of which the husband sought simpliciter, the wife sought an order that the husband pay to her a sum of money equivalent to 65 per cent of the market value of the former matrimonial home at E Street, Suburb F in the State of New South Wales, by way of property settlement. The agreed value of that property is $5.5 million, such that the wife then sought a payment of $3.575 million.
The sum of $3.3 million now sought by her is equivalent to 60 per cent of the value of that real property. It is sought on the basis of what she contends to be her contribution-based entitlement. Otherwise, she seeks that the husband and she retain the assets (including superannuation) registered in their respective names or to which they are entitled or in their possession or control, on the basis that it would not be just and equitable to alter their interests therein.
By the respondent husband’s further amended Response to Initiating Application filed on 15 September 2022, upon which he continued to rely at trial, he merely seeks that the wife’s amended Initiating Application filed 8 September 2022 be dismissed, the effect of which would be that each party retains the assets owned by each of them respectively.
At trial, however, the husband sought that, in the event I do not accede to his primary position, but accede to the wife’s position, there should be a further adjustment in his favour of $2 million on account of s 75(2) factors, pursuant to s 79(4)(e) of the Act. Alternatively, he submitted that in the event I found it just and equitable to make an order altering interests in all the parties’ property, there should be division in the proportions of 62 / 38 per cent in his favour; however, his Senior Counsel was unable to explain how or why this seemingly arbitrary division was proposed rather than, for example, 60 / 40, 62.5 / 37.5 or 65 / 35 per cent.
The gravamen of this case is, essentially, the treatment of funds received by each of the parties, by way of inter vivos gifts and inheritances, from the husband’s grandmother, and distributions from a trust associated with her, as well as the wife’s asserted increased contribution-based claim pursuant to the line of cases commencing with Kennon & Kennon (1997) FLC 92-757.
BACKGROUND
The applicant wife, Ms Stella, was born in 1969 and is 54 years of age. She is a homemaker and, in varying degrees, parent for the three adult children of the marriage. She has not repartnered.
The respondent husband, Mr Stella, was born in 1970 and is 52 years of age. Although he has professional qualifications, he is now self-employed. He has repartnered.
The parties commenced cohabitation in the first half of 1998 and they were married in late 1998. They separated finally on 15 February 2019, having therefore cohabited for over two decades.
The three adult children of the parties’ marriage are: Mr B, born in 2000; Mr C, born in 2003; and Ms D, born in 2005.
These proceedings were instituted by the wife on 9 April 2021.
EVIDENCE
In addition to the documents referred to above, the wife also relied upon:
·her Financial Statement filed on 6 April 2023;
·her trial affidavit, filed on 6 April 2023;
·her earlier reply affidavit, filed on 29 July 2022 (in circumstances where the trial of these proceedings had previously been adjourned);
·an affidavit of the parties’ son, Mr B, filed on 3 August 2022;
·an affidavit of the parties’ son, Mr C, filed on 3 August 2022;
·an affidavit of Mr H, a friend of Mr B, filed on 6 April 2023; and
·an affidavit of Mr K, her brother, filed on 3 August 2022.
None of the wife’s other witnesses were required for cross-examination, notwithstanding that much of their evidence regarding domestic violence, both physical and verbal, was denied by the husband.
In addition to the documents referred to above, the husband also relied upon:
·his amended Outline of Case document filed on 1 June 2023;
·his Financial Statement sworn on 25 May 2023;
·his trial affidavit filed on 15 July 2022;
·his subsequent reply affidavit sworn on 25 May 2023; and
·his further affidavit sworn on 5 June 2023, being the first day of the trial.
On the first day of the trial, the husband sought, and was granted, leave to file and rely upon his Financial Statement, reply affidavit and further affidavit, all of which were out of time. Despite leave being granted that day, inexplicably, the Financial Statement and reply affidavit were not filed until 25 October 2023, following inquiries made by the Court of his solicitors. Despite the grant of leave, his further affidavit sworn on 5 June 2023 has not been filed and does not appear on the Court file. However, they were relied upon during the course of the trial and I have taken them into consideration.
Pursuant to s 140 of the Evidence Act 1995 (Cth), the standard of proof in this case is the balance of probabilities. That section provides:
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject‑matter of the proceeding; and
(c) the gravity of the matters alleged.
The parties’ affidavits exhaustively set out their accounts of the history of their relationship and disputes. I have read and considered that affidavit evidence and do not propose to repeat it at length in these reasons. It is not necessary for a trial Judge to refer to every piece of evidence or argument presented during a trial.
In Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62], Gleeson CJ, McHugh and Gummow JJ said:
… A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
In Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd and Penrith Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385–386, Mahoney JA said:
It is not the duty of the judge to decide every matter which is raised in argument.
…
Nor is it necessary for a judge who is exercising a discretionary judgment to detail each factor which he has found to be relevant or irrelevant, or to itemize, for example, in the assessment of damages for tort, each of the factual matters to which he has had regard… Nor is a judge required to make an explicit finding on each disputed piece of evidence. It will be sufficient, if the inference as to what is found is appropriately clear…
Indeed, much of the detailed evidence of each of the parties, including in cross-examination, is of marginal relevance to my determination of the central issues in this case. A joint chronology was prepared by the parties, as they were ordered to do, and it was tendered on the first day of the trial and marked Exhibit J-1. It spans 36 pages and descends to irrelevant minutiae such as, by way of example, whether between November 2011–November 2012, the family lived in rental accommodation at 1 L Street or 2 L Street, Suburb F.
CREDIT & OTHER OBSERVATIONS
This is a case in which, save for specific – but important – issues which are addressed hereunder, credit did not otherwise loom large. Generally, I am able to determine the case issue by issue, on my assessment of the evidence of the parties. However, I had some difficulties with and reservations about the aspects of the evidence of each of them. I find they each exaggerated aspects they thought favourable to them and sought to minimise or deny aspects they thought unfavourable to them.
By way of example, in the case of the wife, her affidavit filed 6 April 2023 was replete with assertions such as:
50.… Often (not less than 200-300 times) I found him in this state with empty bottles of red wine next to him. On occasions being not less than 50-60 occasions, I found empty bottles of alcohol hidden in parts of the house. …
51.In relation to school fees, in particular from about 2006, there were a number of occasions (not less than 10 to 20 times at least between 2006 and 2018) when reminder correspondence and follow up correspondence were received for payment of outstanding school fees. …
52.… I spoke to her about the school fees again on several occasions of not less than 6-10 times as school fees were not being paid on time as I was worried that the children would not be able to stay at their respective schools if their school fees were not met. On each occasion, [Ms J] assured me “I pay the school fees. I send the money to [the husband].”
…
63.Between 2013 and 2015, there were many occasions (not less than 10-15 times) when I contacted his [colleague] when I could not contact [the husband] on his mobile. …
64.From 2014 and whilst we were renting in [L Street], [the husband] used to say to me “you can sleep under a bridge for all I care, you slut” he said this not less than 100 times during arguments that he and I had which generally was about his drinking and our marriage.
…
71.When he stopped going into town in 2015, I said to [the husband] on not less than 20 occasions, “[The husband], are you considering another career, a different career?” to which he replied “I probably should do something.” …
…
81.… The children begged me on countless occasions (of not less than 200 times) in previous years up until 2019 “Mum, you and dad need to separate. This is not healthy. Dad is abusive and he drinks a lot and loses his mind when he does. He becomes a different person.” but I stayed hoping that things would eventually get better.
…
88.Up until December 2019, and despite our separation, I allowed [the husband] to continue to manage my share portfolio, I trusted him because he had told me on numerous occasions (not less than 20-30 times) over the years “I am experienced in day trading. I make more money from day trading than from [my career].” …
…
123.As outlined above from 2006 there were numerous occasions of not less than 10 times where the gas and electricity were cut off from the home for non-payment of utilities invoices. …
124.On not less than 10 occasions, the gas was cut off, generally whilst I am cooking dinner. …
125.On about five (5) occasions, the electricity supply was cut off by [M Company] because of non-payment of the electricity accounts. …
…
127.…on approximately not less than 12 occasions the landline and/or the mobile phone were cut off and on each occasion I could not have the service restored as I was not authorised on the account and had to contact [the husband] to resolve the issue.
…
146.On many occasions, being no less than five (5), I confided in [Ms J] and told her that “I cannot go on living like this with [the husband] and exposing the children to this”. …
…
164.From the time we moved to [Suburb F] in about 2011/2012, when [the husband] and I had arguments or if I said something he did not like (such as his drinking), [the husband] used to walk me around the kitchen island bench backwards, his body being right in my face, he poked me on my chest and screamed at me “Shut the fuck up. Don’t super impose [sic] me”; “I told you never to fucking super impose [sic] me”. Over the years until separation he said the same term in nearly every discussion or argument or altercation between us. I estimate he said that term not less than 200 times.
…
169.… He also hit me with the book over the head multiple times probably not less than 10-15 times. …
170.There were occasions (no less than 10-20 times) when I said to [the husband], “I will call the Police if you don’t stop this” because of how he was treating me. He responded with “Go on, call the police. I will then [lose my job] and then see how you go you stupid bitch.” …
…
180.From 2007 onwards, on not less than 100 times I said to [the husband] “I have put [Ms D] and [Mr C] to bed. If you want to go and say goodnight now would be good before they go to sleep.” He used to reply “I will go up and say goodnight when I want to say good night and not before. Don’t tell me what to do. Stop superimposing me.” I replied “but they are ready now. They will be falling asleep shortly.” He then became aggressive marching me around the kitchen and poking his finger at my chest and tell me repeatedly “stop superimposing me” he pushed me against the wall or the kitchen bi-fold doors and instructed me with me “shut the fuck up.”
…
191.On numerous occasions of not less than 20 times, [Ms D] and [Mr C] were woken by the sound of arguing, got out of bed and sat on the stairs on the second level of the house in tears listening to [the husband] physically or verbally abusing me. …
192.On more than one hundred (100) times, [the husband] grabbed me and shook me during arguments.
…
199.On numerous occasions (not less than 100 times) [the husband] said to me words to the effect “You came from nothing, you are nothing, you are useless, you are pathetic, you are fat, you are repulsive, you are a slut from Brisbane, I can’t even stand looking at you. You have never achieved anything in your life.”
200.During the course of our marriage, there were a number of other incidents of violence involving [Mr B]. In this regard:-
(a)On at least six (6) to twelve (12) occasions where I saw [the husband] push or shove [Mr B];
(b)There were numerous occasions not less than fifty (50) occasions where he verbally abused [Mr B] by saying to him, “you’re hopeless”, “you’re lazy”;
…
206.…He used to repeat saying “You fucking mongoloid. Go back to Qld.” He used to repeat this phrase not less than 5-10 times.
207.During our arguments between [the husband] and I, where I said to him “[Mr Stella], I cannot live like this anymore.” He used to say “There’s the door (pointing to the front door). Go sleep under a bridge. You cannot take anything with you. You cannot take the car.” I estimate he said this not less than 100-200 times throughout our marriage.
…
208.Over the years and prior to 2006, I said to [the husband] on not less than 10 times “can I help manage our family finances. I can pay bills. Can you put my name on the utilities accounts.” He said at all times “No. that’s none of your business”. …
(Underlined emphasis added)
Whilst the wife’s evidence that such events occurred was not substantially shaken in cross-examination, she could provide no basis for her estimations of the number of times they occurred. I cannot find whether such exaggeration was deliberate on her part or a matter of drafting on the part of her solicitor, who is disclosed as the person who “prepared” her affidavit. Either way, it is an exaggeration, notwithstanding her oath that the contents of her affidavit were true.
However, my concern regarding exaggeration on her part was starkly illustrated in two instances. Paragraphs 79 and 118 of her previous trial affidavit, sworn on 25 July 2022 and filed for the purposes of a trial that year which was adjourned, were tendered on behalf of the husband in the course of cross-examination of her and marked Exhibit H-4.
Paragraph 79 is in almost identical terms to paragraph 81 of her trial affidavit filed for this trial. Whereas in paragraph 81, she asserts that on not less than 200 occasions the children begged her to separate from the husband, in paragraph 79 she asserted that this occurred on not less than 50 occasions.
Paragraph 118 is similarly in almost identical terms to paragraph 124 of her trial affidavit filed for this trial. Whereas in paragraph 124, she asserts that on not less than 10 occasions was the gas supply cut off, in paragraph 118 she asserted that this occurred on approximately more than 5 occasions. Whilst not inconsistent, she was unable to explain this difference in expression.
In cross-examination, she was unable to explain these discrepancies. However, she continued to maintain that the numbers were correct. When asked, for example, about her assertion at paragraph 207 of her trial affidavit that the husband said particular words to her, which she purported to quote, “not less than 100-200 times” throughout their marriage, she first said that it occurred on more occasions than she could count and then conceded that she could not recall the number of occasions. When asked what she meant by the words “not less than 100-200 times”, she said she was “not sure”. When asked whether she had used those words for emphasis, rather than to be taken literally, she disagreed. I find that she has repeatedly grossly exaggerated her evidence in this regard.
In the case of the husband, in the penultimate and final paragraphs of his trial affidavit filed 15 July 2022, he deposed that he was aware, from prior affidavit material filed by the wife in the proceedings, that she made allegations of family violence against him; that he (unqualifiedly) rejected those allegations; and that he proposed to respond to any such allegations in his affidavit in reply.
In his reply affidavit sworn on 25 May 2023, the husband, inter alia, baldly:
·rejected the assertions made by the wife in paragraph 50 of her trial affidavit, which included that from 2006 until separation, his alcohol consumption increased and he became more aggressive and verbally abusive towards her;
·rejected the assertions made by the wife in paragraph 81 of her trial affidavit that, by 2019, his “alcohol consumption, his mental state and the domestic violence, both physical and mental, was escalating” and that she was “seriously concerned” for her life;
·rejected the wife’s allegation in paragraph 154 of her trial affidavit that his violence and abuse against her started when she was four months pregnant with Mr B, when he kicked her, called her a “slut” and a “fucking bitch” and pushed her onto the bed;
·rejected the wife’s allegation in paragraph 155 of her trial affidavit that, in 2005, after the birth of Ms D, he “belted [her] over the head with his hand once” whilst she was holding the baby in her arms;
·rejected the wife’s assertions in paragraph 156 of her trial affidavit that, from 2006, he started to drink more excessively; he became more aggressive and angry; and his “violent outbursts, both physical and verbal” towards her increased, such that the children and she were “terrified” of him;
·rejected the wife’s allegation in paragraph 157 of her trial affidavit that, in the days leading up to Christmas in 2008, he “belted” her across the head backwards and forwards, with an open and closed fist, causing both of her eyes to swell and shut, resulting in her being unable to open her eyes properly and having two black eyes, black cheeks and impaired vision. She further deposed there that:
Notwithstanding this, [the husband] still expected me drive the car to pick up the Christmas food order from the butcher in [Suburb N]. Due to the injuries sustained, I found it difficult to safely drive the car but still drove the car to the butcher. On arrival at the butcher, I called [the husband] and said to him “can you come to the butcher and get the food. I don’t have clear vision. I can barely see. I don’t even know how I got here”. … Despite what he did to me and my facial injuries which were clearly visible … I still prepared the lunch and set the table, wash up and clean up whilst he and his friend drank the afternoon and enjoy the lunch.
(As per original)
·rejected the wife’s allegation in paragraph 164 of her trial affidavit that, from in or about 2011/2012, when they had arguments or if she said something he did not like (such as regarding his drinking), he would walk her around the kitchen island bench backwards, his body being “right in [her] face”, poking her on the chest and screaming at her: “Shut the fuck up. Don’t super impose [sic] me” and “I told you never to fucking super impose [sic] me”;
·rejected the wife’s allegation in paragraph 165 of her trial affidavit that, in about 2012, whilst she was sleeping on the couch after another physical assault, the husband put a pillow over her face and she had to struggle to get him off her;
·rejected wife’s allegation in paragraph 167 of her trial affidavit that, in or about 2013, the husband returned home one evening highly intoxicated, with slurred speech and alcohol on his breath and swaying, and in a highly agitated state and that when he tasted the dinner the wife had prepared for him, he put it in the rubbish bin, in an aggressive manner, and said: “I can’t even get a fucking decent meal cooked for me”;
·rejected the wife’s allegations in paragraphs 168–169 that, on another occasion, shortly thereafter, in the course of the disagreement regarding a book that Mr C was reading, he hit her with it on her body with one hand and clenched his fist with the other, after which:
169.[The husband] pulled me off the bed by my hair. He dragged me by the hair into the ensuite which is approximately four (4) metres from where I was on the bed. [The husband] then proceeded to kick me around my body, back and legs. He then rolled me over and kicked me again. He also hit me with the book over the head multiple times probably not less than 10-15 times. I was screaming. At some stage with all the screaming and my fear and terror I lost my voice in that I was screaming but no sound was coming out. I was in a foetal position on the ground praying for him to stop. Then [the husband] looked at his arm and saw that he had a tiny scratch on it which he scratched on the side of the door on the door latch as he was pulling me into the ensuite. [The husband] then turned to me and said in a very aggressive voice, “Look at this you dumb slut. You’ve made me bleed”. He then continued beating me, kicking me on my body and hitting me with the book over my head. Afterwards he passed out on the bed. I got up to go to the toilet. I stirred him. He asked me “what are you doing” I replied “I am going to the toilet”. [The husband] then said “You’re not using my toilets. Get outside and piss on the front lawn like a dog does”. He instructed me to go to the nature strip outside of the property and urinate. I did.
·rejected the wife’s allegations in paragraph 170 of her trial affidavit that, on an occasion in September 2013, the husband grabbed her mobile telephone from her hand and, with great force, smashed it against the kitchen tiles and that, on another occasion, he threw her mobile telephone causing the screen to smash;
·rejected the wife’s allegations in paragraph 172 of her trial affidavit that, on a morning in mid-2014, when she expressed concern to him regarding his drinking and mental state, he repeatedly told her to “fuck off”, in earshot of Ms D, and said to her: “Come into the bedroom. I want to talk to you. Don’t speak to me about my drinking, you fucking nag”; he pushed her; and he was highly agitated, clenching his teeth and stank of alcohol;
·rejected that, later in the day, he sent text messages to her saying:
“Leave all keys, phone, valuables etc. you must be out of the house by 6.30pm. There is no room for you anymore.” … “You have two (2) hours to pack your stuff. The clock is ticking, get moving”. … “You have……minutes……seconds left” … “tick tock tick tock slut clock is ticking slut you fat bitch. I hope you’re getting organised”. … “Yeah goodluck, try and buy anything hahaha. I’ve just drained the bank account you dumb bitch. See how you can go now you fat bitch”. … “Its 6pm you better be gone.”
·rejected the wife’s allegations in paragraph 176 of her trial affidavit that, from 2014, on occasion, the husband hid her keys and watch in different places around the former matrimonial home (including her personal laptop case at the back of the pantry), laughing at her as she looked for them;
·rejected the wife’s allegations in paragraph 177 of her trial affidavit that, in the course of an incident on 24 February 2015, whilst intoxicated, swaying as he walked and slurring his speech, the husband said to her: “You’re a lying grub. A thief. A fraud. A con artist just like your con artist brother. You’re a little bitch and you can fuck off”, as well as calling her a “slut” and a “whore”, in the presence of the children;
·rejected the wife’s allegations in paragraph 180 of her trial affidavit that, from 2007 onwards, on numerous occasions, he would aggressively march her around the kitchen, poking his finger at her chest, telling her to “stop superimposing” [sic] him, pushing her against the wall or the bi-fold doors of the kitchen, instructing her to “shut the fuck up”;
·rejected the wife’s allegations in paragraph 181 of her trial affidavit that, on three occasions, commencing in 2016, as she got out of bed, her underpants fell straight to the floor, having been cut by scissors at the seam;
·rejected the wife’s allegations in paragraph 182 of her trial affidavit that, in or about 2017, when she raised with the husband his excessive alcohol consumption, after he awoke reeking of alcohol and aggressive, drunk to the point where he fell off the toilet, he said to her: “stop fucking talking to me. Stop fucking nagging me about my drinking” and pushed her in her chest with his finger, screaming at her: “shut the fuck up about my drinking”, much of this in front of Ms D;
·rejected the wife’s allegations in paragraph 185 of her trial affidavit that, in 2018, the husband, whilst heavily intoxicated, became verbally abusive towards her, and, in the presence of the children, ripped an entire newspaper in half, smashed a number of pieces of sporting equipment, threw shoes in her direction, and screamed at her: “You fuckin [sic] slut. Bitch. Whore”, resulting in them fearing for their safety and going to stay overnight at an hotel, the wife and Ms D without their shoes;
·denied the wife’s allegation in paragraph 186 of her trial affidavit that, in 2018, when she again raised his excessive alcohol consumption with him, he responded: “If you ever tell anyone I will kill you and kill your brother and then I’ll burn you and put you into 44 gallon drums and no one will ever find your bodies”;
·rejected the wife’s allegation in paragraph 187 of her trial affidavit that, in about 2018, when the wife burnt her hand with a saucepan lid, which then fell to the ground, he said to her: “You better not have damaged my fucking floor with that lid”, but did not assist her in any way;
·rejected the wife’s allegation in paragraph 189 of her trial affidavit that, in July 2020, in the early hours of the morning, there was a physical altercation between the husband and Mr B, witnessed by a friend of his (Mr H, who swore an affidavit filed on behalf of the wife), in which Mr B suffered bruising to his face;
·rejected the wife’s allegation in paragraph 199 of her trial affidavit that, on numerous occasions, he said to her words to the effect: “You came from nothing, you are nothing, you are useless, you are pathetic, you are fat, you are repulsive, you are a slut from Brisbane, I can’t even stand looking at you. You have never achieved anything in your life”;
·rejected the wife’s allegation in paragraph 200 of her trial affidavit that there were a number of other incidents of violence involving Mr B, including the husband pushing or shoving him and saying to him: “you’re hopeless” and “you’re lazy”;
·rejected the wife’s allegation in paragraph 206 of her trial affidavit that, on occasions, he would call her, in the presence of the children, a “fucking mongoloid” and a “two headed fucking mongoloid”;
·rejected the wife’s allegation in paragraph 207 of her trial affidavit that, when she told him, in the course of arguments, that she could not continue living in the way in which they were, he would point to the front door, saying: “There’s the door. … Go sleep under a bridge. You cannot take anything with you. You cannot take the car”;
·rejected the wife’s allegation in paragraph 210 of her trial affidavit that, in or about 2017, he said to her: “In the event of a separation ever happening, if you come after my money, you slut, I will kill you” and “this is my house and everything is mine. You can fuck off and go and live under a bridge for all I care”.
Notwithstanding these rejections of the wife’s allegations, she was barely cross-examined in relation to their occurrence and not shaken in relation to them. Further, and quite remarkably, neither of the parties’ adult sons, Mr B and Mr C, nor Mr K (the wife’s brother) or Mr H (Mr B’s friend), affidavits by all of whom were filed on behalf of the wife, were cross‑examined on behalf of the husband. The relevance of this is that their evidence, which substantially corroborates the wife’s allegations of domestic violence and her Kennon claim, is unchallenged.
In an affidavit filed on 3 August 2022, the parties’ eldest son, Mr B, deposes to his observations of the husband’s regular, frequent, excessive alcohol consumption, the husband’s behaviour when under the influence thereof and his fear of the husband at such times. He deposes (at paragraph 9):
… I was afraid of my father and what he could do to me because he was very unstable. I kept implements next to my bed for protection because I feared what he may do to me.
He refers to an incident one Christmas Eve, when he was about eight or nine years of age (i.e. in about 2008 or 2009), when he heard his parents arguing. He deposes (at paragraph 10):
… There was shouting and screaming and as I came out of the room and opened the hallway door to the kitchen area I saw my mother’s face gushing with blood. I saw a plastic cup on the floor. As she was bleeding my father was still goading my mother, came close to her face and were still arguing with her and cornering her. Both my brother and I told him to ‘stop dad, stop’. We were both screaming, crying and asking him to stop.
He refers (at paragraph 11) to another occasion, at about that time, when the husband came into his bedroom whilst he was in bed. He describes the husband as “rambling” and being drunk as he “could smell alcohol on his breath and he was not coherent”. He deposes that the father repeatedly said to him: “You’re a fucking idiot. You’re a little shit”.
He generally corroborates the wife’s evidence:
·that, on occasions, she fled with the children from the former matrimonial home;
·regarding the husband frequently punching her on the body or face, as well as slapping her, and calling her words like “slut” and telling her to “fuck off” and “don’t fucking tell me to stop drinking”;
·of physical violence by the husband towards him, including drawing blood; and
·of verbal abuse by the husband towards him.
Specifically, he corroborates the wife’s evidence regarding the physical altercation between the husband and him in July 2020. He deposes (at paragraph 22):
In July 2020 I went out with friends and returned home late at night with my two friends, being a male and female friends. I walked into the house and they went upstairs. My father had not noticed that my friends had come in with me and they were upstairs. Upon seeing me come in my father came charging at me and was saying something in an incoherent manner that I did not understand what he was saying. As he approached me he lunged at me and started punching me with his fist. He punched me in the face not less than 20 times. As my father was hitting me, my male friend stuck his head over the rails and my father told my friend, “What the fuck are you doing here?” Whilst he was saying this he was still laying into me punching me. I was hunched over. My father was giving me upper cuts into face. I kept saying to Dad, “Dad please stop. I love you” however he would not stop. He kept punching me and punching me. He appeared to become more enraged as he was punching me. At one point I got up and bear hugged him to stop him from punching me and we both dropped to the ground. My Dad has had a bad shoulder in the past and as we both fell to the ground his shoulder popped out. He then started swearing at me saying to me, “You fuck. You dislocated my shoulder, get the fuck out of here”. I ran away with my friends. As we were leaving, I saw my father get into his car and drive away with from best I could tell was a beer in his hand. The next day, I took photos of the injuries that I sustained. Annexed hereto and marked “A” is a true copy of the injuries that I sustained which photos I took the following morning.
Annexed to Mr B’s affidavit are two such photos.
Mr B’s evidence in relation to the incident in July 2020 is corroborated by the evidence of his friend, Mr H, who was present on that occasion and witnessed it, an affidavit by whom was filed on behalf of the wife on 6 April 2023.
As with the wife’s allegations, Mr B’s allegations are merely baldly rejected by the husband. However, in circumstances where neither Mr B, nor Mr H, were cross-examined on behalf of the husband, I accept their evidence; it was unchallenged, it is in no way inherently incredible and, especially in the case of Mr B, it generally corroborates (and is corroborated by) the wife’s evidence in this regard.
In an affidavit also filed on 3 August 2023, the parties’ younger son, Mr C, similarly deposes to his observations of the husband’s regular, frequent, excessive alcohol consumption, the husband’s behaviour when under the influence thereof and his fear of the husband at such times. Relevantly, he deposes (at paragraph 6), regarding the husband, that:
… when he started drinking or when he returned home intoxicated, his personality changed and he became violent and abusive and went into his own world which was not pleasant and it was not pleasant to be around him. If anybody (be it my mother or me or any of my siblings) expressed any opinion about his drinking he used to get angry and upset and [sic] with my mother and also became violent. …
He deposes (at paragraph 8) to “numerous occasions” when, in response to the wife’s requests that he cease drinking, the husband responded: “fuck off, don’t tell me what to do. If you don’t like it there’s the door”.
He deposes at paragraph 10 to an incident one Christmas Eve “approximately 14 years ago” (i.e. in or about 2008) when, after consuming alcohol:
… My father lashed out at my mother and threw a glass cup at her which hit her and gave her a black eye. I was very scared for what happened to mum so I said, “I’m going to call the Ambulance” to which my father said, ‘Don’t you fucking call the Ambo’. He then forcefully took the phone from me.
He refers to an argument between his parents, when he was about nine or ten years of age (i.e. in or about 2012 or 2013), regarding the husband’s drinking, after which the wife slept on the couch that night. He deposes (at paragraph 11):
… During the night I walked out of my room and as I was walking down the corridor on the upper level, I saw my father downstairs holding a pillow over my mother’s face trying to suffocate her. He saw me walking down the corridor and he immediately stopped and went back to his room. …
He corroborates Mr B’s evidence regarding the incident, when they were in the early teens, of physical violence by the husband towards Mr B, including drawing blood. Indeed, he describes (at paragraph 12) observing Mr B “bleeding profusely”.
At paragraph 13, he corroborates the wife’s evidence by his evidence that, when he was about 10–12 years of age (i.e. in about 2013–2015), he witnessed the husband holding a book with two hands and hitting her over their head with it.
At paragraph 15, he corroborates the wife’s evidence regarding the husband smashing her phone on the ground, which he deposes he observed, in the course of which he heard the husband say to her: “I’m going to fucking kill you. If you don’t fucking stop I will kill you…”.
He deposes (at paragraph 18):
For as long as I can recall from when I was a little boy nearly most nights or every second night there was an argument about my father’s drinking where he used to become aggressive or violent towards my mother. From the time that I was 13 years of age until I was 17 years of age when Mum and Dad separated, [Ms D] and I used to sit at the top of the stairs every night or every second night to listen in to the fights and arguments between my father and my mother where my father was screaming and yelling and shouting at my mother. I (and [Ms D]) did this in case my mother needed our help. When I sat at the stairs I felt defenceless as I was young and dad had an immense terror and anger in his eyes like nothing was going to stop him from getting what he wanted or doing what he wanted to do. Even on the occasions either me or my sister said to my dad to stop he told us to “fuck off and go to bed”.
He corroborates (at paragraph 21) the wife’s evidence that, when she burnt her hand whilst cooking and the lid of the pot fell on the floor:
…my father did not move or go check on my mother but yelled at my mother, “I hope you didn’t fucking break my floor”. My father did not express any concern towards my mother burning herself or attend to her.
He deposes (at paragraph 23) to an incident, in 2014 or 2015, when the husband was violent towards the wife, “pushing her around, hitting her and screaming and shouting, ‘Fuck off’, ‘You slut’”.
He deposes (at paragraph 32) that, when he was about nine–eleven years of age (i.e. in about 2012–2014):
… my father used to catch [public transport] home from work each day when we lived in [L Street]. [There] was a bar. I heard him say about the bar that “I buy little wine bottles. They are aeroplane bottles”. I remember my dad coming home very intoxicated (as he could hardly speak or walk, his speech was slurred) and generally was unable to ride his bike (which he used to get to and from the [public transport stop]). I was unaware that he was drinking the aeroplane bottles until one day I noticed a stash of empty bottles in the garden. When Mum brought it up with him he became abusive towards mum and said, “Don’t you fucking accuse me of stashing those drinks. How fucking dare you”. As he was yelling he was pushing mum and cornering her into the kitchen while my siblings and I were watching. I was very screed [sic] and crying and my siblings also were crying and appeared scared. I told him Dad stop but did not. My siblings told him Dad stop as well.
As with Mr B, Mr C’s allegations are merely baldly rejected by the husband. However, in circumstances where he too was not cross-examined on behalf of the husband, I accept his evidence; it was similarly unchallenged, it is in no way inherently incredible and it generally corroborates (and is corroborated by) the evidence of both the wife and Mr B in regard to the husband’s frequent excessive alcohol consumption, his physical violence and his verbal abuse.
Many of the wife’s complaints were contemporaneously reported by her to her brother, Mr K, and are confirmed in his affidavit filed on her behalf on 3 August 2022. He too was not cross‑examined on behalf of the husband.
In the course of his cross-examination, after his opportunity to cross-examine the wife’s witnesses had passed, he nevertheless continued to maintain that, on “no occasion” had he been verbally or physically abusive; that the evidence of the wife and her witnesses was “made up in each and every respect”; and it was “all made up” and “not true”. I do not accept his blanket denials, which fly in the face of unchallenged evidence.
In the circumstances, I am comfortably satisfied that, over a sustained and lengthy period during the parties’ cohabitation, the husband regularly engaged in excessive alcohol consumption, often to the point of extreme inebriation, as well as physical violence and verbal abuse towards the wife, as well as the children of the marriage. I note that at the time of trial, Ms D would shortly turn 18 and, therefore, could not have given evidence, even if she wished to do so. Accordingly, I draw no adverse inference against the wife in this regard and was not invited on behalf of the husband to do so. In my consideration and assessment below of the parties’ contributions, I address the wife’s Kennon claim by reason of these findings.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES
At trial, the composition and value of the parties’ non-superannuation assets, superannuation interests and add-backs, and the quantum of their liabilities, were contended by each of the parties to be as follows. Further, how the assets are to be treated was the subject of disagreement. I address this latter issue, in my consideration of the justice and equity of making any alteration of interests in property, as required by s 79(2).
A joint balance sheet was tendered on behalf the parties (Exhibit J-2) and updated as the trial progressed, the final incarnation of which specifies as follows:
Ownership Description Wife’s Value Husband’s Value ASSETS 1 H E Street, Suburb F NSW - estimate $5,500,000 $5,500,000 2 H ANZ Account …41 $42,041 $42,041 3 H ANZ Account …19 $426 $426 4 H ANZ Account …95 $17 $17 5 H ANZ Portfolio …50 $1,501,151 $1,501,151 6 W ANZ Account …65 $359,161 $359,161 7 W ANZ Account …93 $52,594 $52,594 8 W ANZ Account …98 $267,956 $267,956 9 W ANZ Term Deposit …11 $31,123 $31,123 10 W ANZ Term Deposit …62 $110,000 $110,000 11 W ANZ Account …98 $255 $255 12 W ANZ Share Investing Account …34 $5,812,038 $5,812,038 13 H O Pty Ltd NIL NIL 14 H P Pty Ltd NIL NIL 14a. P Trust - Q Street, Town R - estimate $2,000,000 $2,000,000 15 H Motor Vehicle 1 – estimate $90,000 $90,000 16 H Motor Vehicle 2 – estimate $50,000 $50,000 17 W Motor Vehicle 3 $40,000 $40,000 18 W Motor Vehicle 4 - driven by Mr C NIL NIL 19 H Household contents and personal effects at separation – estimate $5,000 $5,000 20 H Two (2) watches - estimate - - 21 W Household contents and personal effects $15,000 $15,000 22 W Jewellery and watch – estimate - - 22A H Husband Tax refund for FYE2020 $96,020 $96,020 22B H Husband Tax refund for FYE2021 $16,640 $16,640 22C H Husband Tax refund for FYE2022 NK NIL 22D H Musical instruments $30,000 $20,000 22E H Contents bought by Husband from inheritance - not in item 19 $46,425 NIL Total $16,065,847 $16,009,422 ADDBACKS 23 H Legal fees paid and in trust $348,075 $348,075 23A H Monies transferred to Husband’s partner’s bank accounts – Jan 2021 to March 2023 + Further payment $180,000 NIL 23B H Waste re share trading - estimate $4,480,000 NIL 24 W Legal fees paid and in trust $521,830 $521,830 Total $5,529,905 $869,905 LIABILITIES 25 H 2020 & 2021 tax liabilities - estimate NIL NIL 26 H 2022 tax liabilities NIL Now [sic] Known 27 H ANZ Rewards Credit Card …62 – in credit NIL NIL 27A W Capital Gains Tax based on share values in assets section (1,018,263) NIL 27A W Wife FY2022 tax payable (51,792) (51,792) Total (1,070,055) $(51,792) SUPERANNUATION Member Name of Fund Type of Interest Wife’s Value Husband’s Value 28 H Superannuation Fund 1 Accumulation $128,606 $128,606 29 W Superannuation Fund 2 Accumulation $261,018 $261,018 Total $389,624 $389,624 TOTAL (incl. Superannuation) $20,915,321 $17,217,159
In closing submissions, an aide memoire, based on that joint balance, was tendered on behalf of the wife (and marked Exhibit W-19), contending for a two-pool approach, as follows:
Description Wife Husband PROPERTY Pool A: non-inherited interests 1. H E Street, Suburb F NSW $5,500,000 $5,500,000 19. H Household contents and personal effects – estimate 5,000 5,000 20. H Two (2) watches - estimate 5,000 5,000 Pool A total $5,510,000 $5,510,000 Pool B: inherited (or sourced from) interests 2. H ANZ Account …41 42,041 42,041 3. H ANZ Account …19 426 426 4. H ANZ Account …95 17 17 5. H ANZ Portfolio …50 1,501,151 1,501,151 6. W ANZ Account …65 359,161 359,161 7. W ANZ Account …93 52,594 52,594 8. W ANZ Account …98 267,956 267,956 9. W ANZ Term Deposit …11 31,123 31,123 10. W ANZ Term Deposit …62 110,000 110,000 11. W ANZ Account …98 255 255 12. W ANZ Account …34 5,812,038 5,812,038 13. H O Pty Ltd NIL NIL 14. H P Pty Ltd NIL NIL 14a H P Trust – Q Street, Town R 2,000,000 2,000,000 15. H Motor Vehicle 1 90,000 90,000 16. H Motor Vehicle 2 50,000 50,000 17. W Motor Vehicle 3 40,000 40,000 18. W Motor Vehicle 4 – driven by Mr C NIL NIL 21. W Household contents and personal effects 5,000 5,000 22. W Jewellery and watch - estimate 0 0 22a H Tax refund for FY2020 96,020 96,020 22b H Tax refund for FY2021 16,640 16,640 22c H Tax refund for FY2022 NK NIL 22d H Musical instruments 30,000 20,000 22e H Contents bought by husband not in item 19 46,000 NIL Pool B total $10,550,422 $10,494,422 Overall total $16,060,422 $16,004,422
As will be apparent, Pool A comprises so-called non-inherited assets and Pool B comprises assets said to have been inherited or sourced from inheritances, as well as inter vivos gifts, from the husband’s grandmother. As stated above, one of the principal issues in this case is the treatment of those gifted or inherited assets (or assets derived therefrom). As was clarified with Senior Counsel for the wife in closing submissions, items no. 6 and 8 in Pool B, being funds totalling $359,161 and $267,956 standing to the credit of the wife in two ANZ bank accounts were, in fact, derived not by way of inheritance but, rather, by inter vivos gifts from the husband's grandmother. For the reasons below, I find this distinction to be important.
It should be noted, albeit de minimis in extremis, that there is one error in the wife’s aide memoire. She ascribes an estimated value of $5,000 to two watches owned by and in the possession of the husband (item no. 20). However, in the joint balance sheet (Exhibit J-2), it is agreed that no value be ascribed thereto and, accordingly, I shall not do so.
The wife’s primary case, which I consider below, is that it is not just and equitable to adjust the parties’ interests in the Pool B assets (nor the liabilities associated therewith or the add-backs derived therefrom), which are, or are sourced from, the inter vivos gifts and inheritances from the husband’s grandmother. Nor does she (or the husband) seek any superannuation split in respect of the parties’ superannuation interests totalling $389,624. Rather, she contends that only the Pool A assets, which she totals at $5,510,000 net (less the sum of $5,000 referred to in the preceding paragraph), should be the subject of adjustive orders pursuant to s 79 of the Act to effect a 60/40 per cent division in her favour.
The husband primarily contends that it is not just and equitable that any of the net parties’ assets, including superannuation interests and legal fees added-back, contended by him to total $17,217,159, be the subject of orders pursuant to s 79 of the Act. However, this excludes, inter alia, add-backs totalling $4.66 million and capital gains taxation in the order of $1 million, contended by the wife. The scenario proposed by the husband would leave the parties with net assets, on the values contended by him, totalling $9,797,976 or 57% in the case of the husband and $7,419,183 or 43% in the case of the wife.
LEGAL PRINCIPLES
Section 79(1) of the Act relevantly provides that, in property settlement proceedings, the Court may make such order as it considers appropriate, 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.
Section 79(2) of the Act provides that the Court shall not make an order under s 79 unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act provides that, in considering what order, if any, should be made under s 79, the Court shall take into account the matters specified in paragraphs (a) to (g) of that subsection. These matters include:
·the financial and non-financial contributions made directly or indirectly by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them (whether or not such property has, since the making of the contributions, ceased to be the property of the parties to the marriage or either of them) (s 79(4)(a)-(b));
·the contributions 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 contributions made in the capacity of homemaker or parent (s 79(4)(c)); and
·the matters referred to in s 75(2) of the Act, so far as they are relevant.
In Stanford v Stanford (2012) 247 CLR 108 at [35], the plurality of the High Court cautioned that the requirements of s 79(2) and 79(4) are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the Court that, in all the circumstances, it is just and equitable to make the order.
The plurality said at [36] that the expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations; it does not admit of exhaustive definition; and it is not possible to chart its metes and bounds. However, while the power given by s 79 is not “to be exercised in accordance with fixed rules”, nevertheless, the plurality said that three fundamental propositions must not be obscured:
37First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38Secondly, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
“The judge called upon to decide proceedings of that kind is not entitled to do what has been described as ‘palm tree justice’. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down.”
39Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 79 is whether those rights and interests should be altered.
40Thirdly, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
(Emphasis in original, footnotes omitted)
The plurality continued:
41Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to “the need to preserve and protect the institution of marriage” identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot (s 71A) make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
42In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
43By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.
(Emphasis in original, footnotes omitted)
In Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39], the Full Court of the (then) Family Court earlier said:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s. 79. That approach involves four inter- related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…
In Bevan & Bevan (2013) FLC 93-545, the Full Court discussed the significance of the decision in Stanford with reference to the four-step process and said:
65.Although the High Court did not disapprove the four step process, we accept it was not approved either. Given the way the matter was resolved, there was no requirement for a pronouncement either way. However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
66.This obligation was previously described in the High Court as the “overriding requirement”: Mallet v Mallet (1984) 156 CLR 605 at 647 per Dawson J. In the same case at 608, Gibbs CJ aptly described s 79 as conferring on a court “a very wide discretion to make such order as it thinks fit when it is satisfied that it is just and equitable that an order should be made …” (emphasis added).
67.This understanding of the role of s 79(2) resonates with authority developed in the early years of operation of the Act. Thus, in Rogers & Rogers (1980) FLC ¶90-874 at 75,539 the Full Court cited with approval this view expressed by Strauss J in Ferguson & Ferguson (1978) FLC ¶90-500 at 77,615:
It seems to me, that the main purpose of sec 79(2) is to ensure that the Court will not alter the property rights of the parties, unless it is satisfied that cogent considerations of justice require it to do so, and that if the Court decides that it is requisite to make any order under the section, the Court must be satisfied that the alterations so ordered, will go no further than the justice of the matter demands.
(Emphasis in original)
In relation to [42] of the decision in Stanford, the Full Court said at [70] that the circumstances referred to therein encapsulated the vast majority of cases, such that the reminder of the “pivotal role” of s 79(2) is unlikely to have any impact in most cases, although it will serve as a reminder to trial judges that the precondition to making any order is a finding that it is just and equitable to do so.
The Full Court continued:
71.Stanford will also serve as a reminder that the four step process “merely illuminates the path to the ultimate result”. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.
72.It follows that judges would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which “adjustments” are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.
In relation to the third of the “fundamental propositions” to which the High Court referred in Stanford, the Full Court said at [81] that it “demands separate consideration of the preliminary question of whether it is just and equitable to make any order altering property interests before the need arises to consider the extent to which existing interests are to be altered and the manner in which that is to be done”. The Full Court said at [83] that “[a]nswering this preliminary question involves the exercise of judicial discretion”, referring to Stanford at [36] (as to which, see my consideration of the dicta of the High Court in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32 at [92]–[97] below.).
The Full Court continued:
84.Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added).
85.This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation.
86.We do not consider it helpful, and indeed it is misleading, to describe this separate enquiry as a “threshold” issue. We say this for two reasons. First, as was emphasised in Stanford, the initial enquiry is to determine the existing legal and equitable interests of the parties. Secondly, although s 79(2) is cast in the negative and amounts to a prohibition against making any order unless it is just and equitable to do so, the corollary is that if the court does make an order, such order itself must be just and equitable: Woollams & Woollams (2004) FLC ¶93-195 per Thackray J at [53] and Teal v Teal [2010] FamCAFC 120 per Finn, Boland and Dawe JJ at [70]. The just and equitable requirement is therefore not a threshold issue, but rather one permeating the entire process.
87.It will be seen from this discussion that while the s 79(2) and s 79(4) issues must not be conflated, they are intertwined because the text of the Act links them. This was recognised in Ferguson & Ferguson where Strauss J said that s 79(2) “is directed to both the questions whether an order should be made at all, and what the order should be, if one is made” (supra at 77,615).
88.This understanding of the interplay between ss 79(2) and 79(4) accords with the analysis of Martin Bartfeld QC in his paper entitled “Stanford and Stanford — Lots of Questions — Very Few Answers”. In that paper, which we drew to the attention of counsel, Mr Bartfeld opined that:
49. … there is scope for taking into account the factors under s 79(4) in the exercise of the [s 79(2)] discretion. This can be accomplished, it is submitted, by treating the contribution factors and the factors under s 75(2) as having two simultaneous characteristics;
a. A discretionary characteristic, which is used to identify those matters which are relevant to enliven the exercise of the discretion. Thus the fact that a party has made substantial contributions, over a long period of time, which are not reflected in their asset holdings but which are reflected in the other party’s assets may found a basis for finding that it is just and equitable for an order to be made; and
b. An evaluative characteristic, which is used to measure the weight or to quantify the effect of a particular contribution.
50. The problem of conflation can easily be overcome by clearly identifying the use to which a factor is being put.
89.In our view, it will be less likely that the separate issues arising under s 79(2) and s 79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it would be just and equitable to make an order. Ultimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues.
(Emphasis in original)
In Chapman & Chapman (2014) FLC 93-592, Strickland & Murphy JJ clarified what had been said in Bevan, as follows:
25.If the plurality intended that a consideration of the s 79(4) matters is mandatory in answering the s [79(2)] question, we respectfully disagree.
26.The judgment in Stanford points, in our view, to the opposite conclusion. …
27.Further, and crucially, in “applying s 79 in this case” the Justices of the High Court did not themselves take into account the matters in s 79(4). Indeed [51] of the judgment suggests they eschewed those s 79(4) matters relating to contribution. If, as the plurality held in Bevan, it is a “…requirement to consider the s 79(4) matters…” (emphasis added) in determining if, pursuant to s 79(2), it is just and equitable to make any order it is, respectfully, inconceivable that their Honours in Stanford would not have done so.
(Underlined emphasis added)
In my view, there is an as yet unresolved tension between the dicta of the Full Court in Bevan at [84]–[85] and that of the Full Court in Chapman at [25]–[27], in particular, the reference in the former decision to the introductory words in s 79(4), namely, “[i]n considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account” (emphasis added) the matters thereafter specified. I note that Bryant CJ was a member of the Bench in each of those cases. However, even if consideration of the s 79(4) matters is not mandatory in answering the s 79(2) question, in my view Chapman does not stand as authority for the proposition that it is not permissible to have regard thereto in order to answer that question.
In Zaruba & Zaruba (2017) FLC 93-776 the Full Court said:
38.In the vast majority of cases, it will be appropriate to address the s 79(2) question by ascertaining the legal and equitable interests in property without making distinctions between individual assets. That is because the “express and implicit assumptions that underpinned the existing property arrangements” can be seen to apply (to the extent and degree to which they do apply) to all of the property of the parties or either of them, including property in which the legal interests vary.
39.However, the position is likely to be different in circumstances where, as here, the characteristics of the property and the circumstances of its acquisition, improvement and the like can be seen to differ significantly and where, as here, the parties’ relationship had taken on quite different characteristics during the period to which the s 79 inquiry is directed.
In that case, the Full Court said at [40] that it was unable to see any evidentiary foundation by which it was open to the primary judge to alter one party’s legal and equitable interest in certain real property, in respect of which it said:
35.On no view of the evidence can it be said that any express or implicit assumptions arising from the marriage relationship underpinned the acquisition, preservation or improvement of Mindarie. Indeed, the evidence is to the contrary. And, of course, there was never any common use of Mindarie nor was there ever intended to be.
36.To the extent there were any express assumptions, they were solely those of the wife and they were to the effect that the husband had, and would have, nothing whatsoever to do with Mindarie — something which was given expression by her having the sole legal interest in it and the husband having made no financial contribution of any kind to it.
(Emphasis in original)
Accordingly, the Full Court held that the primary judge erred in law in failing to consider, as s 79(2) requires, whether it was just and equitable to make an order altering the existing legal and equitable interests in that particular real property.
In Holland & Holland (2017) FLC 93-798, a differently constituted Full Court referred to the passages in Zaruba at [38]–[39] cited above and said:
30.The considerations just discussed recognise that nothing said by the High Court in Stanford calls into question what was earlier said by that court in Norbis v Norbis. There, for example, Wilson and Dawson JJ said:
… Of course, it may be possible and appropriate in many cases to determine the proportions in which the property is to be divided without treating any of the assets separately, but where the interests of the parties differ, a different approach will be open. Section 79, in particular s. 79(4), refers to “any property of the parties to a marriage or either of them” and that expression is sufficient to encompass both the entirety of their property and their individual interests. If the parties’ interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of the property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case. …
31.Thus, the nature of a particular interest or interests in property and when and how it was acquired, utilised, improved or preserved may be very relevant to each or all of three central questions: should a s 79 order be made at all; whether contributions should be assessed “globally” or “asset by asset” or by reference to two or more “pools”; and, what is the nature and extent of each party’s contributions. However, there is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest.
32.Importantly, while it might be convenient to describe property by reference to a characteristic (for example, as an “inheritance” or “post-separation” or “after-acquired” property), its place within the ambit of s 79 is determined by the fact that it exists as a legal or equitable interest of the parties to the marriage or either of them and that the nature, form and characteristics of it and the contributions of all types made by the party suggest that it should be treated in a particular way.
33.The consideration of the three central questions earlier referred to call in each case for the exercise of discretion by a trial judge. That discretion is exercised not by reference to whether property might conveniently be described as “an inheritance” or “after-acquired” but, rather, by reference to the nature, form and characteristics of the property in question and the nature, form and extent of the parties’ contributions of all types across the entirety of their relationship.
34.In respect of the last point, it is important to emphasise that the categorisation of property as “an inheritance” or as “after-acquired” property often leads to an erroneous argument that unless contributions to that property can be established, the property should be “excluded from consideration”. As we have said, that argument is erroneous by reason of ignoring the fundamental premise that s 79 is directed to all of the existing legal and equitable interests in property of the parties or either of them without exclusion of any of those interests.
(Footnotes omitted)
Insofar as it might be argued that property acquired by way of inheritance should be excluded from consideration, the Full Court in Holland said at [35] that such arguments, initially, “might appear to gain some support” from what was said in Bonnici & Bonnici (1992) FLC 92-272 at 79,019–79,020. The relevant passage from Bonnici (at 79,020) was not set out in full in Holland. The Full Court there said:
A property does not fall into a protected category merely because it is an inheritance. On the other hand, if there are ample funds from which an appropriate property settlement can be made and a just result arrived at, then the fact of a recently acquired inheritance would normally be treated as an entitlement of the party in question.
The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances. Such circumstances might include the care of the testator prior to death by the husband or wife as the case may be or other particular services to protect a property. See James and James (1978) FLC ¶90-487. But there was no evidence of this in the present case despite submissions by counsel for the wife to the contrary. Accordingly, we think that in the present case the moneys received by the husband from the sale of the freehold and from his uncle’s estate should not be brought into account.
However, the Full Court in Holland at [35] referred to Calvin & McTier (2017) FLC 93-785, where the Full Court said:
50.The husband particularly relied upon the first sentence of [44] of Bonnici above. We do not agree that in that sentence their Honours were purporting to lay down a guideline as to the approach the court should take to inheritances received after separation. It is clear from reading the passage as a whole that they were not doing so. Whilst the court did indicate that in the case before them it would have been simpler for the primary judge to have dealt with the inheritance separately from the other property, it expressly said that there was nothing wrong with a global approach (i.e. dividing just one group of assets, including the inheritance), provided there was an explanation as to how the division was arrived at (at [46]). See also Bishop & Bishop (2013) FLC ¶93-553 at 87,421.
In Calvin & McTier, the Full Court immediately thereafter continued:
51.In short, we consider that the court retains a discretion as to how to approach the treatment of after-acquired property. The trial magistrate could have included the inheritance amongst the property to be divided or dealt with it separately. The trial magistrate was not obliged to follow one course or the other. The submissions of the husband are no more than an invitation to “pok[e] around in the entrails of discretion” (to adopt the remarks of French CJ, which his Honour made during the unsuccessful application for special leave in Singerson & Jones [2015] HCATrans 195).
52.It is worth repeating that it was not submitted that any error said to have arisen from the inclusion of the inheritance for division led to a result which, after consideration of the contributions and the s 75(2) factors, was inappropriate. Rather, the submissions were directed to the process.
His Honour concluded at [35]:
… Whilst the events described by the wife were no doubt distressing, the evidence and the findings did not deal with the magnitude and extent of its effect. Whilst matters can certainly be inferred, that inference must be properly based on the evidence before the court.
The wife’s evidence, which I accept, includes, by way of examples: the husband regularly returning home late and drunk; the husband regularly passing out drunk at home; an incident in 2005, shortly after the birth of the parties’ third child, when the husband hit the wife on the head, whilst she was holding the child; the children and the wife, including in her capacity as their primary carer, being regularly apprehensive, especially from 2006 onwards, regarding whether the husband would be drunk and/or violent; an assault by the husband upon the wife, to her head, prior to Christmas in 2008, which caused both of her eyes to swell, such that she was unable to open them properly, after which she nevertheless drove her motor vehicle in order to shop for the festive celebrations; the wife then preparing Christmas lunch and thereafter washing and cleaning up, whilst the husband and his friend spent the afternoon drinking; the husband’s self-harm at home in 2010, when the children were at home and distressed, leaving the wife to deal with both him and them; an incident in about 2013 / 2014 when the husband, whilst drunk, assaulted the wife in the course of a dispute over a book that the child Mr C was reading; instances in and from 2014, when the husband hid the wife’s keys, causing her to waste time searching for them; an incident in or about 2017 when the husband, whilst drunk, assaulted the wife who was preparing the child Ms D for school; instances when the wife and children fled from the family home, due to the husband’s abuse, staying albeit briefly in temporary accommodation; instances when the children were awoken during the night by the father’s physical and/or verbal abuse of the wife, which required her to settle them and put them back to sleep; and instances when the wife was required to intervene in the father’s abuse of the eldest child, Mr B.
In cross-examination, the husband conceded that, after the accident, he found functioning around the home “very difficult” and “very hard” but said that he did not know what the impact thereof on the wife would have been, other than that he maintained his behaviour towards the wife and the children did not change, and that, somewhat incredibly, the wife did not do anything over and above that which she previously did. Contrary to his evidence, I find that the husband’s difficulties in functioning around the home did have an impact on the wife and that his behaviour towards the wife and children changed for the worse.
It is not a question of “fault”, which has had no role to play in Australian family law since 1 January 1976. Indeed, even on the wife’s evidence, the husband’s excessive alcohol consumption and domestic violence, both physical and verbal, increased and worsened in and from 2006, in the aftermath of the horrific accident he witnessed. Although the husband did not adduce any psychological or psychiatric evidence establishing cause and effect, I infer from the wife’s evidence that this was, to some indeterminate extent, the case; however, I am unable to unscramble the proverbial omelette. Indeed, it is not necessary to do so. Rather, the question is the effect of the husband’s conduct on the wife’s role, and therefore contributions to the welfare of the family, as homemaker and parent. Senior Counsel for the wife, in closing submissions, correctly submitted that, even if there were a cause for the husband’s conduct (namely, the accident he witnessed), that does not detract from the impact thereof on the wife.
I am comfortably satisfied, both directly and by inference, that the evidence in respect of both the domestic violence perpetrated by the husband upon the wife and his regular excessive consumption of alcohol, taken as a whole, had the discernible effect of making her contributions to the welfare of the family, including in the capacity of homemaker and parent, more onerous, such that it should be recognised in determining the respective contributions of the parties. Indeed, by reason of the husband’s regular excessive consumption of alcohol and resultant regular state of inebriation alone, he was, of necessity, rendered incapable of fully contributing in this regard, such that, as night follows day, the wife’s s 79(4)(c) contributions must have been, and I find were, rendered more onerous.
Notwithstanding the subsequent (and, with respect, overdue) criticism of the decision of the Full Court in Ferraro & Ferraro (1993) FLC 92-335 and overruling of the jurisprudential heresy of so-called ‘special skills’ or ‘special contributions’ (for example, in Hoffman & Hoffman (2014) FLC 93-591), consigning it to the judicial dustbin, the following passages (at 79,571–79,572) remain good law, in my view. In relation to the statement by Wilson J in Mallett v Mallett (1984) 156 CLR 605 at 636 that equality of contributions “will be the measure, other things being equal, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal”, the Full Court in Ferraro said:
Depending upon what is meant by the term “other things being equal”, that statement is frequently cited, as it was in this case, as support for the proposition that the different contributions of the parties will be treated as equal if the “quality” of their respective contributions are equal. That suggests that an evaluation of the quality of performance within the parties’ respective roles must be performed by the Court and then a comparison made in order to arrive at a conclusion as to where the balance lies in relation to their contributions under paras (a) to (c) and as to the distribution of their property.
There has been surprisingly little discussion in subsequent cases of the implications of this view. There has been little more than a repetition of the statement that the homemaker contribution “should be recognised not in a token way but in a substantial way”. One of the few detailed discussions of the implications of that passage is in the judgment of Nygh, J at first instance in the matter of Shewring (1987) 12 Fam LR 139 at 141, which is the report of the judgment of the Full Court (Evatt CJ, Ellis and Lambert, JJ).
I have referred to this passage from Shewring at [108], above. The Full Court in Ferraro at 79,572, continued, saying that:
In that passage Nygh, J makes, in our view, a valid criticism of any suggestion that in each case there must be a detailed analysis of the quality of performance of the roles of the parties.
See also Hoffman and Hoffman at [51].
As the Full Court in Roverati and Roverati (2021) FLC 94-027 at [33] restated (citing Dickons & Dickons (2012) 50 Fam LR 244 at [23]–[26]):
… the assessment of contributions is not a mathematical or accounting exercise, and even more importantly, it is an holistic undertaking with all of the contributions of the parties of whatsoever nature being taken into account.
Nevertheless, in Fields & Smith (2015) FLC 93-638 at [43], Bryant CJ and Ainslie-Wallace J said that, whilst the words of s 79 do not provide endorsement for any category of contribution related to any class of property being, by virtue of that category or class, more valuable or important than another:
In each case the contributions made by the parties must be evaluated in the context of the facts particular to that case.
How then to assess all of the parties’ various and differing contributions, to which I have referred above, in quantitative terms? In an oft cited passage from Steinbrenner & Steinbrenner [2008] FamCAFC 193 at [234], Coleman J said:
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. …
Accordingly, I now take the proverbial “leap” from words to figures.
I am comfortably satisfied that very substantial contributions were made by or on behalf of the husband to the acquisition, conservation and improvement of the property of the parties throughout the marriage, culminating in the property within Pool A, overwhelmingly by reason of the inter vivos gifts from his grandmother, as well as the distributions from the V Family Trust, which were applied primarily to the acquisition, conservation and improvement of the Suburb X, Suburb N and Suburb F properties, as well as to the family’s living expenses, with the remaining balance of those funds constituted by the two bank accounts in the wife’s name which I have included in Pool A.
In relation to the Pool B property, in respect of which I have held it would not be just and equitable to alter the parties’ respective interests therein, for the reasons aforesaid, I am satisfied that neither party can be said to have contributed relevantly to the inheritances received by the other from the husband’s grandmother shortly prior to separation.
I am also comfortably satisfied that the wife made very substantial contributions to the welfare of the family constituted by the parties and their children, including in the capacity of homemaker and parent, rendered all the more so because, over a sustained and lengthy period of time during their cohabitation, the husband regularly engaged in excessive alcohol consumption, often to the point of extreme inebriation, as well as physical violence and verbal abuse towards both the wife and the children of the marriage.
Whilst I have assessed each of the parties’ respective contributions as having been very substantial, I nevertheless conclude that those made by or, more particularly, on behalf of the husband should be given greater weight because, unlike those of the wife, which were made within the context of the parties’ marriage, his were overwhelmingly made from sources external to the marriage and associated with him (namely, his grandmother and the V Family Trust) and, as I have explained above, were in the millions of dollars. In the circumstances, I am of the opinion that an assessment of the parties’ contributions in the proportions of 40 per cent to the wife and 60 per cent to the husband of the Pool A assets gives due recognition to their respective contributions. The husband will receive 20 per cent, or nearly $1.25 million, more than the wife on account of this disparity between their contributions.
SECTION 79(4)(E)–SECTION 75(2) FACTORS.
On behalf of the wife, it was submitted that, if she were awarded 60 per cent of the value of the Suburb F property in Pool A and were to retain her assets in Pool B, as contended by her, no further adjustment, in addition to that on account of contributions, was sought on account of s 75(2) factors, which are imported into s 79 by subsection (4)(e) thereof. However, I have determined that her ANZ accounts …65 and …98, totalling $627,117, should be included in Pool A and have assessed her overall contributions at 40 per cent of Pool A (as increased).
On behalf of the husband, it was boldly submitted that, if I adopted the two pool approach, as well as the 60 / 40 per cent division in the wife’s favour of the Pool A assets, for which she contended, he should receive a further adjustment, pursuant s 79(4)(e), in the sum of $2 million, primarily on account of the disparity between the wife and him in respect of the Pool B property to be retained by each of them. Of course, as I have noted in the preceding paragraph, Pool B has been decreased and Pool A has correspondingly been increased by the sum of $627,117, which is to be retained by the wife. Further, I have assessed the wife’s contribution-based entitlement at 40 (rather than 60) per cent of Pool A.
The relevant matters within s 75(2) are as follows.
As to the age and state of health of each of the parties, as required by paragraph (a), they are of similar ages and each asserts some health issues. The wife is 54 years of age and the husband is 53 years of age. She deposes to suffering from chronic anxiety but has adduced no current expert evidence as to the state thereof. He deposes to suffering from post-traumatic stress disorder but similarly has adduced no current expert evidence as to the state thereof.
As to 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, as required by paragraph (b), I note as follows. By reason of my contribution-based assessment, the wife will retain and receive $2,452,847 in respect of the Pool A assets. In addition also to the retention by the wife of her two ANZ bank accounts (…65 and …98), totalling $627,117, that will require receipt by her of a payment from the husband of $1,825,730. She will also retain assets from Pool B totalling $6,051,010 and superannuation entitlements of $261,018, together with a taxation liability of $51,792 and latent capital gains taxation liability on her inherited share portfolio, if and when they are sold (as to which there is no evidence). She will, therefore, retain and receive assets (including superannuation) totalling $8,712,683.
By reason of my contribution-based assessment, the husband will retain $3,678,670 in respect of the Pool A assets, after the payment to the wife. He will also retain assets from Pool B totalling $3,796,295 and superannuation entitlements of $128,606. Additionally, he will retain his musical instrument, to which he ascribes a value of $20,000 and the wife ascribes a value of $30,000. The difference is de minimis, neither party has adduced expert evidence of value and, in circumstances where I have found that it is not just and equitable to alter the parties’ interests in the Pool B assets, it is not strictly necessary for me to find (even if I could) the value thereof. Similar observations may be made in relation to the husband’s household contents, purchased after separation in 2019 for $46,000, in respect of which the wife relies upon the purchase price but neither party has adduced expert evidence of current value. The husband will, therefore, receive and retain assets (including superannuation) totalling not less than $7,603,571.
Whilst, on these figures, the wife will retain and receive slightly in excess of $1.1 million more than the husband, I note that my calculation of the assets to be retained and received by him excludes the possible add-back sought by the wife, in the sum of up to $4,480,000. Again, given that I have found that it is not just and equitable to alter the parties’ interests in the Pool B assets, it is not necessary for me to decide whether any amount should be added back and, if so, the quantum thereof. However, the husband will have available to him, upon which to draw, the taxation benefit of losses, noting that he has already benefitted therefrom to a considerable extent, as I refer to below.
In relation to the parties’ respective incomes, the wife does not hold any tertiary qualifications and has not worked in paid employment for over two decades, since the birth of the parties’ second child in 2003. Since separation, she has supported herself, as well as the children, only the eldest of whom had attained the age of 18 years by then, from the income generated by her inheritance from the husband’s grandmother. In her Financial Statement, she discloses an income of $517,000 in the 2022 financial year (noting that the 2023 financial year had not yet ended at the time of trial). The husband does not dispute her income.
The husband is a professional and worked in New South Wales for nearly 1.5 decades. Whilst he no longer holds a professional qualification, he remains named on his industry’s list in New South Wales. There is no evidence to suggest he could not return to same form of paid employment. Since 2015, he has been self-employed. In his Financial Statement, he deposes to an income of only $8,580 based on his draft taxation return for the 2021 financial year. However, in the table at paragraph 112 of his affidavit in reply sworn 25 May 2023, he asserted his taxable income to be nil.
His income taxation returns for the 2020 and 2021 financial years were tendered by the wife and marked Exhibit W-9. In respect of the 2020 financial year, his taxation return discloses, inter alia, losses of $535,294, franking credits of $90,175, a taxation refund of $96,020 (which is included in his Pool B assets) and carried-forward losses of $1,344,490. In respect of the 2021 financial year, his taxation return discloses, inter alia, income of $1,073,529, losses of $1,064,947, franking credits and a taxation refund of $16,640 (which is also included in his Pool B assets) and carried-forward losses of $279,543 from 2019-2020. However, notwithstanding being legally qualified and his losses, he proposes to continue share-trading. His taxation returns and notices of assessment for the 2011, 2012, 2013 and 2014 financial years, before he left his profession, were tendered by the wife and marked as Exhibit W-17. On their face, they disclose taxable incomes of $32,712, $36,615, $76,465 (amended from $140,512), $485,100 (amended from $302,463) and $290,014 in respect of those years.
The husband has re-partnered and lives with his new partner. In his Financial Statement, he discloses her income to be in the order of $34,000 per annum; that she pays no expenses for his benefit; but that he pays expenses for her benefit of approximately $134,000 per annum.
Having turned my mind to the other s 75(2) factors, I note, in particular, that for the purposes of paragraph (e) thereof, the parties’ youngest child, who attained the age of 18 years after the conclusion of the trial, has continued to live with the wife on a full-time basis, being in her final year of secondary school this year. It is anticipated she will undertake tertiary studies, albeit possibly interstate.
For the purposes of s 75(2)(d)(i) and (g), I am satisfied that, on the basis of the parties’ respective contribution-based entitlements, they will each be well able to meet their commitments and to maintain a standard of living that, in all the circumstances, is reasonable.
Accordingly, in my view, the only possible factor that might militate for a further adjustment, in favour of the husband, pursuant to s 79(4)(e), is by reason of s 75(2)(b), namely, the disparity between the wife’s and his respective contribution-based entitlements. As I have observed above, the wife will receive slightly in excess of $1.1 million more than the husband; however, that excludes the add-back sought by the wife, in the sum of up to $4,480,000, if I had found that it was just and equitable to alter the parties’ interests in the Pool B assets. The husband’s claim to a further adjustment in his favour of $2 million was said to be on account of the disparity between their contribution-based entitlements. However, in Ward & Ward (Unreported, Full Court of the Family Court of Australia, 16 July 1980), Nygh J, with whom Evatt CJ and Bulley J agreed, said:
The third proposition with which I take issue is that there exists some sort of palm tree justice which demands a balancing out on the grounds of relative hardship. Under section 79 the court has a considerable degree of discretion, and under section 75(2) it must take account of certain financial factors including the present financial factors of the parties. It is not palm tree justice which the court is authorized to exercise under section 79 but it is justice in accordance with the principles laid down in s.79(4) and no account of hardship or balance of hardship can outweigh the hard evidence about the relative contributions made by the parties to the property.
Later that year, in W & W (1980) FLC 90-872 at 75,528, Nygh J again similarly said (albeit in the context of s 79(2)) that “[i]t must be stressed however that sec. 79(2) does not give this court an independent power to effect “palm tree justice”. What is “just and equitable” depends on a proper consideration of the factors set out in sec. 79(4)…”.
In my view, in the circumstances of this case and, in particular, the magnitude of the property to be retained and received by each of the parties on account of their contribution-based entitlements, were I to accede to the further adjustment of $2 million sought by the husband or, indeed, any adjustment, merely because of the disparity between their respective entitlements, and notwithstanding the magnitude of such entitlements of each of them, it would merely impermissibly be to affect palm tree justice.
Accordingly, I decline to make any further adjustment in favour of either of the parties pursuant to s 79(4)(e).
CONCLUSION
Having considered above the effect of the adjustment I propose to make between the parties in respect of the Pool A assets, as found by me, on account of their respective contributions within the purview of s 79(4)(a)–(c), as assessed by me, I am satisfied that it just and equitable for the husband to make a payment to the wife in the sum of $1,825,730; for the husband to retain the Suburb F property (subject to the payment) and for the wife to retain her ANZ bank accounts …65 and …98. Otherwise, they will each retain their respective property within Pool B, as well as their respective superannuation entitlements.
Other than in relation to the two pool approach and the payment contended by the wife, there were no submissions on behalf of the husband in relation to the orders sought by the wife in the event of default by him or the chattels sought by her in Annexure A to her Minute of Orders annexed to her Outline of Case document. In the circumstances, those orders will, in substance, be made.
Otherwise, orders will be made to give effect to these reasons for judgment.
I certify that the preceding two hundred and forty (240) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strum. Associate:
Dated: 15 December 2023
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